Part IV. A. to D

8/3/2019 Part IV. A. to D

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G.R. No. L-2372 August 26, 1949

INTERNATIONAL HARVESTER COMPANY OF THE

PHILIPPINES, petitioner-appellee,vs.

CRISANTO ARAGON, Judge of Municipal Court of Manila, and

YARAS and COMPANY, FAR EAST, respondents-appellants.

Roxas, Picazo and Mejia for appellants.

Ross, Selph, Carascoso and Janda for appellee.

PARAS,J.:

On July 9, 1947, the respondent-appellant, Yaras and Company, Far

East, filed a complaint in the Municipal Court of Manila (civil caseNo. IV-262) against the Manila Terminal Co., Inc., and International

Harvester Company of the Philippines. The complaint alleges that the

defendant Manila Terminal Co., Inc., is in charge of the custody anddelivery to the respective owners of cargoes discharged at theGovernment piers in the City of Manila; that the defendant

International Harvester Company of the Philippines is the agent in the

Philippines of the vesselBelle of the Sea; that on September 27, 1946,the S/S Belle of the Sea took on board at Los Angeles, California, U. S.

A., goods for shipment to Manila, Philippines, and covered by Bill ofLading No. 105; that the S/S Belle of the Sea arrived in Manila on

December 23, 1946, and discharged her cargo at the Government piers

under the supervision and custody of the defendant Manila Terminal

Co., Inc.; that out of the goods covered by Bill of Lading No. 105, onecarton of assorted samples with a stipulated value of P200 was notdelivered to Yaras and Company; and said merchandise was lost

through the negligence either of the Manila Terminal Co., Inc., or ofthe International Harvester Company of the Philippines. The complaint

prayed for judgment either against the defendant Manila Terminal Co.,

Inc., or the International Harvester Company of the Philippines for theamount of P200, with legal interest from the date of the filing of the

complaint.

Before the trial could be proceeded with, the International Harvester ofthe Philippines filed a motion to dismiss, on the ground that the

Municipal Court of Manila had no jurisdiction to try case because theaction involves admiralty or maritime jurisdiction, which motion was

overruled by the municipal court on December 16, 1947. In due time,

the International Harvester Company of the Philippines filed in theCourt of First Instance of Manila a petition for prohibition (civil case

No. 4328) against the Hon. Crisanto Aragon, Judge of the MunicipalCourt of Manila, and Yaras and Company Far East, for the purpose of

restraining said respondent judge from proceeding with civil case No.IV-262 in so far as the International Harvester Company of the

Philippines was concerned, on the ground that admiralty or maritime

jurisdiction is involved. After trial, the Court of First Instance ofManila rendered judgment favor of the petitioners, International

Harveter Company of the Philippines, ordering the respondent judge ofthe municipal court to desist from taking cognizance of civil case No.

IV-262 as against the International Harvester Company of the

Philippines. From this judgment the respondents have appealed.

From the facts alleged in the complaint filed in the municipal court, itis clear that the International Harvester Company of the Philippines, as

agent in the Philippines of the vessel S/S Belle of the Sea, is

alternatively being held liable for the loss of the cargo in questionthrough its negligence. Inasmuch as it is expressly that the cargo of theS/S Belle of the Sea was discharged on December 23, 1946, at theGovernment piers under the supervision and custody of the Manila

Terminal Company, Inc., the International Havester Company of the

Philippines may be held liable only on the assumption that the goodshad been lost in transit or before being discharged at the pier. In other

words the liability of the International Harvester Company of thePhilippines is predicated on the contract of carriage by sea between the

International Harvester Company of the Philippines and Yaras andCompany as evidenced by Bill of Lading No. 105, independently of

the liability of the Manila Terminal Co., Inc, as operator of an arrastre

service.

Admiralty has jurisdiction over all maritime contracts, in whatever

form, wherever they were executed or are to be performed, but notover non-maritime contracts, (2 Corpus Juris Secundum, p. 84.)

Whether or not a contract is maritime depends not on the place wherethe contract is made and is to be executed, making the locality the test,


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but on the subject-matter of the contract, making the true criterion amaritime service or a maritime transaction. (Id., p. 85.) Specifically,

admiralty has jurisdiction of a proceeding in rem or in personam for

the breach of a contract of affreightment, whether evidenced by a billof lading or a charter party. (Id., pp. 90-91.) And typical of a

controversy over contracts of affreightment is a suit of one partyagainst the other for loss of or damage to the cargo. (1 American

Jurisprudence, p. 567.) This is the very case now before us, becausethe respondent Yaras and Company seeks to recover from the

petitioner International Harvester Company of the Philippines the

value of a certain lost cargo.

The contention of the respondent Yaras and Company that admirally

jurisdiction is not involved herein because the contract in question wasmade upon land and to be terminated upon land, merely reflects the

English rule which had long been rejected in the United States. It isnow settled in the latter country that "the jurisdiction of admiralty in

matters of contract depends upon the subject-matter, i.e., the natureand character of the contract, and that the English rule which conceded

jurisdiction (with few exceptions) only to contracts made upon and the

to be performed upon navigable waters, is inadmissable, the truecriterion being that the contract has reference to maritime service or

maritime transaction." (Benedict on Admiralty, 6th Ed., Vol. 1, p.127.) We choose to adopt the sound American rule. Even in England

the English rule was not without protest. Lord Kenyon, in Menetonevs. Gibbons, 3 Term, 269, had expressed the following criticism: "ifthe admiralty has jurisdiction over the subject-matter, to say that it is

necessary for the parties to go upon the sea to execute the instrumentborders upon absurdity."

The respondent Yaras and Company cannot invoke the rule againstmultiplicity of suits, for the simple reason that said rule has to be

subservient to the superior requirement that the court must havejurisdiction. In view of our conclusion that the cause of action of said

respondent against International Harvester Company of the Philippines

involves admiralty over which the courts of first instance have originaljurisdiction (Par. 4, Sec. 56, Act No. 136 of the Philippine

Commission, as reproduced in sec. 43 [d] of Republic Act No. 296),and to which the jurisdiction of the justice of the peace courts

(including municipal courts) does not extend (sec. 68, Act No. 136 ofthe Philippine Commission, as amended by Commonwealth Act No.

4090, reproduced in par, 2, sec. 88, Republic Act No. 296), the

respondent judge was properly restrained from further proceeding withcivil case No. IV-262.

We hold also that prohibition is the proper remedy, since the

respondent judge was taking cognizance of the case over which he hadno jurisdiction and his order overruling the motion to dismiss filed bythe petitioner-appellee is interlocutory and therefore not appealable.

(Sec. 2 of Rule 67, Rules of Court 2.) At any rate, the remedy ofappeal available when the case shall have been decided on the merits,

is inadequate.

The appealed judgment is therefore affirmed, with costs against the

appellant Yaras and Company. So ordered.

Moran, C. J., Ozaeta, Feria, Bengzon, Padilla, Tuason, Montemayorand Reyes, JJ., concur.


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G.R. No. L-31865 November 26, 1973

PEDRO CABILDO, as Provincial Treasurer, Ilocos Norte,ADOLFO CALAPINI, as Municipal Treasurer, Burgos, IlocosNorte, and THE ILOCOS NORTE COCONUT PRODUCERSASSOCIATION, INC., petitioners,

vs.HON. RICARDO Y. NAVARRO, Judge of the Court of FirstInstance, Laoag City, Ilocos Norte., JOHN F. NORTHCOTT,JR., and ROBERT PATRICK NORTHCOTT, respondents.

Hermenegildo A. Prieto and Antonio Foronda for petitioners.

Manuel V. San Jose and Arturo B. Cristi for respondents.

R E S O L U T I O N

CASTRO, J.:

This is a petition for review on certiorariof the amendeddecision of the Court of First Instance of Ilocos Norte, in its civilcase 4235, declaring valid and effective the redemption madeby the private respondents, John F. Northcott, Jr. and RobertPatrick Northcott, of a parcel of land purchased by the petitioner

Ilocos Norte Coconut Producers Association, Inc. at a publicauction sale.

The essential facts are not controverted.

The Northcotts were the owners of the land covered by TransferCertificate of Title 931 of the land records of Ilocos Norte. Fortax delinquency, the land, which had an assessed value ofP40,300, was sold at public auction by provincial treasurerPedro Cabildo on December 27,1963 to the petitioner Ilocos

Norte Coconut Producers Association, Inc. for the sum of

P6,326. The certificate of sale, together with the final bill of sale,was registered on December 29, 1965. Thru their administrator,Jose Francisco, the Northcotts sought redemption of the land,and accordingly tendered to Cabildo the sums of P5,647.60 onJanuary 21, 1966, P676.30 on February 7, 1966 and P2,553.98on February 15, 1966, or the total amount of P8,877.88including interests. Because the vendee association resisted the

redemption, the Northcotts instituted civil case 4235; afterjoinder of the only issue the timeliness of the redemptionthe trial court rendered a decision dismissing the complaint.

The respondents Northcotts (plaintiffs below) received a copy ofthe adverse decision on August 30, 1968. They filed their noticeof appeal, appeal bond and record on appeal on September 21,1968. Upon an opposition to the approval of the record onappeal, the court ordered its amendment on October 28, 1968.On January 9, 1969, which was the date set for hearing for the

approval of the record on appeal, the court suspended the saidhearing until the resolution of a motion for reconsideration filedby the Northcotts on January 2, 1969. The association opposedthe motion. On January 18, 1969 the respondent court renderedan amended decision declaring valid and effective theredemption made by the Northcotts of the land in question. Thepetitioners appealed the amended decision to this Court;pursuant to our resolution dated February 6, 1960, they filed thepresent petition for review.

We gave due course to the petition on March 13, 1970, and thecase was submitted for decision on February 23, 1971.

On August 8, 1973, thru new counsels, the parties filed, andmoved for the approval of, a compromise agreement whichrecites as follows:

1. That for himself and in behalf of the Northcott Family,Robert P. Northcott filed a Civil Case in the Court of FirstInstance of Ilocos Norte, Branch I, against the Ilocos NorteCoconut Producers Association in Civil Case No. 4235 for

Ownership and which was appealed later by the defendantAssociation in the Supreme Court and now pending therein


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under G.R. No. L-31865, regarding the Dungon-DungonEstate, situated in the Municipalities of Burgos, and Bangui,Ilocos Norte;

2. That both parties in this case now on appeal before theSupreme Court have donated the entire land in litigation tothe Provincial Government of Ilocos Norte, with theexception of 14 hectares thereof retained by and for them in

equal shares of 7 hectares each, copy of said deed ofdonation is hereto attached as part of this CompromiseAgreement, and the Provincial Government has immediatelypossession the land donated to it upon the execution of thisinstrument;

3. That both parties in this case before the Supreme Courthave mutually agreed to have the case dismissed in view ofthe donation already issued by both parties in favor of theProvincial Government of Ilocos Norte.

On August 30, 1973 a "Manifestation" was filed by the law firmof San Jose, Cristi, Enriquez & San Jose, alleging, inter alia,that Atty. Manuel V. San Jose is the counsel of record of theNorthcotts who had retained him on a contingent fee of 60% ofall lands and properties which Atty. San Jose might recover forthem; that the said lawyer had rendered services and spentconsiderable amounts pursuant to their retainer contract; thatthere is also an attorney's lien charged on the subject propertyin favor of one Atty. Manolo Tolentino; that Atty. San Jose hasnot been paid any amount; and that the donation made byRobert P. Northcott is intended to defraud him of his attorney's

fee.

Required to comment on the "Manifestation," Robert P.Northcott stated as follows:

In connection with the retainer contract dated December 22,1969, wherein sixty per cent (60%) as retainer's fee will begiven to my counsel, since then and until now, no propertywhatsoever has yet been recovered, received or delivered tome from the cases, so that there is nothing from which the60% could be taken and given by me to my counsel; in other

words, the 60% is only collectible if any property is

recovered or received. This is the same situation with Atty.Manolo Tolentino, who never recovered anything.

When the Lower Court set aside its original decision, it wasalready outside the reglementary period, so that theAppellate's opinion, most probably, will be against me, and Iwill not be able to realize anything except by virtue of thecompromise agreement which was submitted for approval by

this Honorable Tribunal in the interest of justice and equity.

By resolution of August 30, 1973 the Provincial Board of IlocosNorte took note of the aforequoted compromise agreement andexpressed its gratitude to the parties for donating the land to theprovince.

The claim for attorney's fees does not render infirm the toagreement and is no obstacle to its approval, for a client has anundoubted right to compromise a suit without the intervention of

his lawyer.1

However, since it is not disputed that Atty. ManuelV. San Jose had rendered legal services (although short ofrecovery by the Northcotts of any property) as stipulated in theretainer contract, and the non-recovery may in the very least bepartially attributable to the Northcotts' entering into thecompromise agreement, it is but fair and just that the saidlawyer be compensated for his services on a quantum meruitbasis and, to assure the payment thereof, that a lien beconstituted in favor of Atty. San Jose on the 7 hectares retainedby the Northcotts under the deed of donation, without prejudice

to the immediate effectivity of the compromise agreement.

ACCORDINGLY, the compromise agreement is approved, andthe parties are hereby enjoined to comply faithfully with itsterms. After this resolution shall have become final, let therecord be remanded to the Court of First Instance of IlocosNorte which is hereby ordered to hear and determine, on thebasis ofquantum meruit, the amount of the attorney's fee thatmay be due to Atty. Manuel V. San Jose. Let the correspondinglien be constituted upon the 7-hectare land retained by therespondents Northcotts under the deed of donation. No costs.


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Makalintal, C.J., Teehankee, Makasiar, Esguerra and MuozPalma, JJ., concur.

Footnotes

1 Rustia v. Judge of the CFI of Batangas, et al., 44 Phil. 62; Aro v. Nanawa, L-24163, April 28, 1969, 27 SCRA 1090.


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G.R. No. L-11407 October 30, 1917

FAUSTO RUBISO and BONIFACIO GELITO, plaintiff-appellee,vs.

FLORENTINO E. RIVERA, defendant-appellant.

Francisco Sevilla for appellant.Salvador Q. Araullo for appellee.

TORRES,J.:

This appeal by bill of exceptions was filed by counsel forFlorentino E. Rivera against the judgment of September 6, 1915, in

which the defendant and appellant was ordered to place at the disposal

of the plaintiff Fausto Rubiso the pilot boat in litigation. No specialfinding was made for costs.

On April 10, 1915, counsel for plaintiff brought suit in the Court

of the First Instance of this city and alleged in the complaint that his

clients were the owners of the pilot boat named Valentina, which hadbeen in bad condition since the year 1914 and, on the date of the

complaint, was stranded in the place called Tingloy, of themunicipality of Bauan, Batangas; that the defendant Florentino E.

Rivera took charge or possession of said vessel without the knowledge

or consent of the plaintiff and refused to deliver it to them, under claimthat he was the owner thereof; and that such procedure on the

defendant's part caused the plaintiffs to suffer damages, not onlybecause they could not proceed to repair the vessel, but also because

they were unable to derive profit from the voyages for which said pilotboat was customarily used; and that the net amount of such

uncollected profit was P1,750. The complaint terminated with a

petition that judgment be rendered by ordering the defendant to deliversaid pilot boat to the plaintiffs and indemnify them in the amount

aforementioned or in such amount as should be proven at trial, and to

pay the costs.

Counsel for the defendant entered a general and specific denialof all the facts set forth in the complaint, with the exception of those

admitted in the special defense and consisting in that said pilot boat

belonged to the concern named "Gelito and Co.," Bonifacio Gelitobeing a copartner thereof to the extent of two-thirds, and the Chinaman

Sy Qui, to that of the one-third, of the value of said vessel; thesubsequently Bonifacio Gelito sold his share to his copartner Sy Qui,

as attested by the instrument Exhibit A, registered in the office of theCollector of Customs and made a part of his answer; that later said

Chinaman, the absolute owner of the vessel, sold it in turn to the

defendant Rivera, according to the public instrument, also attached tohis answer as Exhibit B; and that, for the reason, Rivera took

possession of said pilot boat Valentina, as its sole owner. He thereforepetitioned that the defendant be absolved from the complaint, with the

costs against the plaintiff.

After the hearing of the case and introduction of documentary

evidence, the judgment of September 6, 1915, was rendered, fromwhich counsel for the defendant appealed and moved for a new trial.

This motion was denied and the appellant excepted.

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, to the Chinaman Sy Qui, the coowner of theother one-third interest in said vessel; wherefore this vendor is no

longer entitled to exercise any action whatever in respect to the boat inquestion. Gelito was one of the partnership owners of the Valentina, as

in fact his name appears in the certificate of protection issued by theBureau of Customs, and the rights he held are evidenced by the articles

of partnership; but, the whole ownership in the vessel having been

consolidated in behalf of the Chinaman Sy Qui, this latter, in the use ofhis right as the sole owner of the Valentina, sold this boat to Florentino

E. Rivera for P2,500, on January 4, 1915, which facts, are set forth in adeed ratified on the same date before a notary. This document was

registered in the Bureau of Customs on March 17th of the same year.

On the 23d of January of that year, that is, after the sale of the

boat to the defendant Rivera, suit having been brought in the justice ofthe peace court against the Chinaman Sy Qui to enforce payment of a


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certain sum of money, the latter's creditor Fausto Rubiso, the hereinplaintiff, acquired said vessel at a public auction sale and for the sum

of P55.45. The certificate of sale and adjudication of the boat in

question was issued by the sheriff on behalf of Fausto Rubiso, in theoffice of the Collector of Customs, on January 27 of the same year and

was also entered in the commercial registry on the 14th of March,following.

So that the pilot boat Valentina was twice sold: first privately byits owner Sy Qui to the defendant Florentino E. Rivera, on January 4,

1915, and afterwards by the sheriff at public auction in conformitywith the order contained in the judgment rendered by the justice of the

peace, court, on January 23 of the same year, against the Chinaman Sy

Qui and in behalf of the plaintiff, Fausto Rubiso.

It is undeniable that the defendant Rivera acquired by purchasethe pilot boat Valentina on a date prior to that of the purchase and

adjudication made at public auction, by and on behalf of the plaintiffRubiso; but it is no less true that the sale of the vessel by Sy Qui toFlorentino E. Rivera, on January 4, 1915, was entered in the customs

registry only on March 17, 1915, while its sale at public auction toFausto Rubiso on the 23d of January of the same year, 1915, was

recorded in the office of the Collector of Customs on the 27th of the

same month, and in the commercial registry on the 4th of March,following; that is, the sale on behalf of the defendant Rivera was prior

to that made at public auction to Rubiso, but the registration of thislatter sale was prior by many days to the sale made to the defendant.

Article 573 of the Code of Commerce provides, in its firstparagraph:

Merchant vessels constitute property which may be

acquired and transferred by any of the means recognized by

law. The acquisition of a vessel must be included in a writteninstrument, which shall not produce any effect with regard to

third persons if not recorded in the commercial registry.

So that, pursuany to the above-quoted article, inscription in thecommercial registry was indispensable, in order that said acquisition

might affect, and produce consequences with respect to third persons.

However, since the enactment of Act No. 1900, on May 18,

1909, said article of the Code of Commerce was amended, as appearsby section 2 of that Act, here below transcribed.

The documenting, registering, enrolling, and licensing ofvessels in accordance with the Customs Administrative Act and

customs rules and regulations shall be deemed to be a registry

of vessels within the meaning of the title two of the Code ofCommerce, unless otherwise provided in said Customs

Administrative Act or in said customs rules and regulations,and the Insular Collector of Customs shall perform the duties

of commercial register concerning the registering of vessels, asdefined in title two of the Code of Commerce.

The requisite of registration in the registry, of the purchase of avessel, is necessary and indispensable in order that the purchaser's

rights may be maintained against a claim filed by a third person. Suchregistration is required both by the Code of Commerce and by Act No.

1900. The amendment solely consisted in charging the Insular

Collector of Customs, as at present, with the fulfillment of the dutiesof the commercial register concerning the registering of vessels; so

that the registration of a bill of sale of a vessel shall be made in theoffice of the insular Collector of Customs, who, since May 18, 1909,

has been performing the duties of the commercial register in place ofthis latter official.

In view of said legal provisions, it is undeniable that thedefendant Florentino E. Rivera's rights cannot prevail over those

acquired by Fausto Rubiso in the ownership of the pilot boatValentina, inasmuch as, though the latter's acquisition of the vessel atpublic auction, on January 23, 1915, was subsequent to its purchase by

the defendant Rivera, nevertheless said sale at public auction wasantecedently recorded in the office of the Collector of Customs, on

January 27, and entered in the commercial registry an unnecessaryproceeding on March 4th; while the private and voluntary purchase


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made by Rivera on a prior date was not recorded in the office of theCollector of Customs until many days afterwards, that is, not until

March 17, 1915.

The legal rule set down in the Mercantile Code subsists,

inasmuch as the amendment solely refers to the official who shallmake the entry; but, with respect to the rights of the two purchasers,

whichever of them first registered his acquisition of the vessel is theone entitled to enjoy the protection of the law, which considers him theabsolute owner of the purchased boat, and this latter to be free of all

encumbrance and all claims by strangers for, pursuant to article 582 ofthe said code, after the bill of the judicial sale at auction has been

executed and recorded in the commercial registry, all the other

liabilities of the vessel in favor of the creditors shall be consideredcanceled. 1awphil.net

The purchaser at public auction, Fausto Rubiso, who was careful

to record his acquisition, opportunely and on a prior date, has,according to the law, a better right than the defendant Rivera whosubsequently recorded his purchase. The latter is a third person, who

was directly affected by the registration which the plaintiff made of hisacquisition.

Ships or vessels, whether moved by steam or by sail, partake, toa certain extent, of the nature and conditions of real property, on

account of their value and importance in the world commerce; and forthis reason the provisions of article 573 of the Code of Commerce are

nearly identical with those of article 1473 of the Civil Code.

With respect to the indemnity for losses and damages, requested

by the plaintiff, aside from the fact, as shown by the evidence, that,subsequent to the date when the judgment appealed from was

rendered, the vessel in question emerged unharmed from the place

where it was stranded, and was, at the time of the trial, anchored in theport of Maricaban, the record certainly does not furnish any positive

evidence of the losses and damages alleged to have been occasioned.On the other hand, it cannot be affirmed that the defendant acted in

bad faith specifically because he acquired the vessel on a date prior to

that of its acquisition at public auction by the plaintiff Rubiso, who, forthe reason aforestated, is the true and sole owner of said pilot boat.

For the foregoing considerations, whereby the errors assigned tothe judgment appealed from are deemed to have been refuted, it is our

opinion that said judgment should be, as it is hereby, affirmed, withcosts against the appellant. So ordered.

Arellano, C. J., Johnson, Carson, Street and Malcolm, JJ., concur.

Araullo, J., took no part.


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G.R. No. L-13695 October 18, 1921

STANDARD OIL COMPANY OF NEW YORK, plaintiff-appellee,

vs.

MANUEL LOPEZ CASTELO, defendant-appellant.

Gabriel La O for appellant.Lawrence and Ross for appellee.

STREET,J.:

By contract of character dated February 8, 1915, Manuel Lopez

Castelo, as owner, let the small interisland steamerBatangueo for the

term of one year to Jose Lim Chumbuque for use in the conveying ofcargo between certain ports of the Philippine Islands. In this contract it

was stipulated that the officers and crew of theBatangueo should besupplied by the owner, and that the charterer should have no other

control over the captain, pilot, and engineers than to specify thevoyages that they should make and to require the owner to discipline

or relieve them as soon as possible in case they should fail to perform

the duties respectively assigned to them.

While the boat was being thus used by the charterer in the

interisland trade, the standard Oil Company delivered to the agent ofthe boat in Manila a quantity of petroleum to be conveyed to the port

of Casiguran, in the Province of Sorsogon. For this consignment a billof lading of the usual form was delivered, with the stipulation that

freight should be paid at the destination. Said bill of lading containedno provision with respect to the storage of the petroleum, but it was in

fact placed upon the deck of the ship and not in the hold.

While the boat was on her way to the port mentioned, and off

the western coast of Sorsogon, a violent typhoon passed over that

region, and while the storm was at its height the captain wascompelled for the safety of all to jettison the entire consignment of

petroleum consisting of two hundred cases. When the storm abated theship made port, and thirteen cases of the petroleum were recovered,

but the remainder was wholly lost.

To recover the value of the petroleum thus jettisoned but not

recovered, the present action was instituted by the Standard OilCompany against the owner of the ship in the Court of First Instance

of Manila, where judgment was rendered in favor of the plaintiff.From this judgment the defendant appealed.

No question is made upon the point that the captain exercised

proper discretion in casting this petroleum overboard, as a stepnecessary to the salvation of the ship; and in fact it appears that even

after the vessel was thus eased, she was with difficulty prevented fromcapsizing, so great was the intensity of the storm.

The first question for discussion is whether the loss of this

petroleum was a general average loss or a particular less to be bornesolely by the owner of the cargo. Upon this point it will be observedthat the cargo was carried upon deck; and it is a general rule, both

under the Spanish Commercial Code and under the doctrinesprevailing in the courts of admiralty of England America, as well as in

other countries, that ordinarily the loss of cargo carried on deck shall

not be considered a general average loss. This is clearly expressed inRule I of the York-Antwerp Rules, as follows: "No jettison of deck

cargo shall be made good as general average." The reason for this ruleis found in the fact that deck cargo is in an extra-hazardous position

and, if on a sailing vessel, its presence is likely to obstruct the freeaction of the crew in managing the ship. Moreover, especially in thecase of small vessels, it renders the boat top-heavy and thus may have

to be cast overboard sooner than would be necessary if it were in thehold; and naturally it is always the first cargo to go over in case of

emergency. Indeed, in subsection 1 of article 815 of the Code ofCommerce, it is expressly declared that deck cargo shall be cast

overboard before cargo stowed in the hold.

But this rule, denying deck cargo the right to contribution by

way of general average in case of jettison, was first mad in the days ofsailing vessels; and with the advent of the steamship as the principal


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conveyer of cargo by sea, it has been felt that the reason for the rulehas become less weighty, especially with reference to coastwise trade;

and it is now generally held that jettisoned goods carried on deck,

according to the custom of trade, by steam vessels navigatingcoastwise and inland waters, are entitled to contribution as a general

average loss (24 R. C. L., 1419).

Recognition is given to this idea in two different articles in theSpanish Code of Commerce. In the first it is in effect declared that, ifthe marine ordinances allow cargo to the laden on deck in coastwise

navigation, the damages suffered by such merchandise shall not bedealt with as particular average (art. 809 [3], Comm. Code); and in the

other it is stated that merchandise laden on the upper deck of the vessel

shall contribute in the general average if it should be saved; but thatthere shall be no right to indemnity if it should be lost by reason of

being jettisoned for the general safety, except when the marineordinances allow its shipment in this manner in coastwise navigation

(art. 855, Comm. Code).

The Marine Regulations now in force in these Islands contain

provisions recognizing the right of vessels engaged in the interislandtrade to carry deck cargo; and express provision is made as to the

manner in which it shall be bestowed and protected from the elements

(Phil. Mar. Reg. [1913], par 23). Indeed, there is one commodity,namely, gasoline, which from its inflammable nature is not permitted

to be carried in the hold of any passenger vessel, though it may becarried on the deck if certain precautions are taken. There is no express

provision declaring that petroleum shall be carried on deck in anycase; but having regard to its inflammable nature and the known

practices of the interisland boats, it cannot be denied that this

commodity also, as well as gasoline, may be lawfully carried on deckin our coatwise trade.

The reason for adopting a more liberal rule with respect to deck

cargo on vessels used in the coastwise trade than upon those used for

ordinary ocean borne traffic is to be found of course in thecircumstance that in the coastwise trade the boats are small and

voyages are short, with the result that the coasting vessel can use morecircumspection about the condition of the weather at the time of

departure; and if threatening weather arises, she can often reach a portof safety before disaster overtakes her. Another consideration is that

the coastwise trade must as a matter of public policy be encouraged,

and domestic traffic must be permitted under such conditions as arepractically possible, even if not altogether ideal.

From what has been said it is evident that the loss of this

petroleum is a general and not a special average, with the result thatthe plaintiff is entitled to recover in some way and from somebody anamount bearing such proportion to its total loss as the value of both the

ship and the saved cargo bears to the value of the ship and entire cargobefore the jettison was effected. Who is the person, or persons, who

are liable to make good this loss, and what are the conditions under

which the action can be maintained?

That the owner of the ship is a person to whom the plaintiff inthis case may immediately look for reimbursement to the extent above

stated is deducible not only from the general doctrines of admiraltyjurisprudence but from the provisions of the Code of Commerceapplicable to the case. It is universally recognized that the captain is

primarily the representative of the owner; and article 586 of the Codeof Commerce expressly declares that both the owner of the vessel and

the naviero, or charterer, shall be civil liable for the acts of the master.

In this connection, it may be noted that there is a discrepancy betweenthe meaning ofnaviero, in articles 586 of the Code of Commerce,

where the word is used in contradistinction to the term "owner of thevessel" ( propietario), and in article 587 where it is used alone, and

apparently in a sense broad enough to include the owner.Fundamentally the word "naviero" must be understood to refer to the

person undertaking the voyage, who in one case may be the owner and

in another the charterer. But this is not vital to the present discussion.The real point to which we direct attention is that, by the express

provision of the Code, the owner of the vessel is civilly liable for theacts of the captain; and he can only escape from this civil liability by

abandoning his property in the ship and any freight that he may have

earned on the voyage (arts. 587, 588, Code of Comm.).

Now, by article 852 of the Code of Commerce the captain isrequired to initiate the proceedings for the adjustment, liquidation, and


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distribution of any gross average to which the circumstances of thevoyage may 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. In ordinary practice this, wesupposed, would be primarily accomplished by requiring the

consignees of other cargo, as a condition precedent to the delivery oftheir goods to them, to give a sufficient bond to respond for their

proportion of the general average. But it is not necessary here toinquire into details. It is sufficient to say that the captain is required to

take the necessary steps to effect the adjustment, liquidation, and

distribution of the general average. In the case before us the captain ofthe vessel did not take those steps; and we are of the opinion that the

failure of the captain to take those steps gave rise to a liability forwhich the owner of the ship must answer.

But it is said and the entire defense seems to be planted uponthis proposition that the liquidation of the general average is, under

article 852 and related provisions, a condition precedent to the liabilityof the defendant, and that at any rate the defendant, as owner of the

ship, should only be held liable for his proportion of the generalaverage. It is also suggested that if the plaintiff has any right of action

at all upon the state of facts here presented, it is against the captain,

who has been delinquent in performing the duty which the lawimposes on him.

This argument involves, we think, a misconception of the trueimport of the provisions relating to the adjustment and liquidation of

general average. Clearly, for one thing, those provisions are intendedto supply the shipowner, acting of cause in the person of the captain,

with a means whereby he may escape bearing the entire burden of theloss and may distribute it among all the persons who ought to

participate in sharing it; but the making of the liquidation is not a

condition precedent to the liability of the shipowner of the shipperwhose property has been jettisoned.

It is true that if the captain does not comply with the articlerelating to the adjustment, liquidation, and distribution of the general

average, the next article (852) gives to those concerned whethershipowner (naviero) or shipper the right to maintain an action

against the captain for indemnification for the loss; but the recognitionof this right of action does not by any means involve the suppression

of the right of action which is elsewhere recognized in the shipper

against the ship's owner. The shipper may in our opinion go at onceupon the owner and the latter, if so minded, may have his recourse for

indemnization against his captain.

In considering the question now before us it is important toremember that the owner of the ship ordinarily has vastly more capitalembarked upon a voyage than has any individual shipper of cargo.

Moreover, the owner of the ship, in the person of the captain, hascomplete and exclusive control of the crew and of the navigation of the

ship, as well as of the disposition of the cargo at the end of the voyage.

It is therefore proper that any person whose property may have beencast overboard by order of the captain should have a right of action

directly against the ship's owner for the breach of any duty which thelaw may have imposed on the captain with respect to such cargo. To

adopt the interpretation of the law for which the appellant contendswould place the shipowner in a position to escape all responsibility for

a general average of this character by means of the delinquency of his

own captain. This cannot be permitted. The evident intention of theCode, taken in all of its provisions, is to place the primary liability

upon the person who has actual control over the conduct of the voyageand who has most capital embarked in the venture, namely, the owner

of the ship, leaving him to obtain recourse, as it is very easy to do,

from other individuals who have been drawn into the venture asshippers.

It results that the plaintiff is entitled to recover in this action; and

the only additional point to be inquired into is the amount that should

be awarded. In this connection it appears that the total value of thejettisoned cargo, belonging partly to the plaintiff to another shipper,

was P880.35, of which P719.95 represented the value of the plaintiff'spetroleum. Upon the apportionment of this total loss among the

different interests involved, to wit, value of ship, value of cargo, and

the earned but lost freight, it appears that the amount of the lossapportionable to the plaintiff is P11.28. Deducting this from the value

of the petroleum, we have as a result, the amount of P708.67, which isthe amount for which judgment should be given.


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Accordingly, modifying the judgment appealed from to thisextent, we affirm the same, with costs. So ordered.

Johnson and Villamor, JJ., concur.

Mapa, C.J., concurs in the result.

Separate Opinions

ARAULLO,J., dissenting:

As the loss of the petroleum shipped by the plaintiff company on

board the vesselBatangueo, which belongs to the defendant,constitutes gross average and, as the latter, being, according to the law,

an agent, all of which is admitted in the foregoing decision, theprovisions applicable to the case and which should be taken into

consideration in deciding the appeal before this court are those of

various articles in sections 1 of title 4 and sections 1, 2, and 3, of title5, of Book 3 of the Code of Commerce.

Article 811 defines gross or general averages as damages andexpenses which are deliberately caused in order to save the vessel, her

cargo, or both at the same time, from a real and known risk, andparticularly, such as goods jettisoned to lighten the vessel, whether

they belong to the vessel, to the cargo, or to the crew, and the damagesuffered through said act by the goods or board; the damage caused to

the vessel by scuttling or entering her hold in order to save the cargo;

and the expenses of the liquidation of the average. Article 812provides that in order to satisfy the amount of the gross or general

average, all persons having an interests in the vessel and cargo at thetime of the occurrence of the average shall contribute. Article 846

provides that the persons interested in the proof and liquidation of

averages may mutually agree and bind themselves at any time withregard to the liability, liquidation and payment thereof, and that, in the

absence of agreements, the proof of the average shall take place in theport where the repairs are made, should any be necessary, or in the

port of unloading; that the liquidation shall take place in the port of

unloading should it be a Spanish port (now Filipino); that should theaverage have occurred outside of the jurisdictional waters of the

Philippines or should the cargo have been sold in a foreign port byreason of the arrival of the vessel under stress in said port, liquidation

shall be made in the port of arrival; and, finally, if the average shouldhave occurred near the port of destination, and that port is made, the

proceedings for the proof and liquidation above-mentioned shall he

had there.

Article 847 provides that when the liquidation of the averages is

made privately by virtue of agreement, as well as when a judicialauthority takes part therein at the request of any of the parties

interested who do not agree thereto, all of them shall be cited andheard, should they not have renounced this right; that should they not

be present or not have a legitimate representative, the liquidation shallbe made by the consul in said port, and where there is none, by the

judge or court of competent jurisdiction, accordance to the laws of the

country, and for the account of the proper person; and, finally, desiringto furnish all possible means to effect the liquidation, legislator

provides in the last part of said article that, when the representative is aperson well-known in the place where the liquidation takes place, his

intervention shall be admitted and will produce legal effect, even

though he be authorized only by a letter of the shipowner, freighter, orunderwriter; and as to general or gross averages, he lays down

concrete and conclusive rules in articles 853, 854, and 858, withrespect to the form and mode in which the experts appointed by the

interested parties or by the court shall fulfill their duties, as to theexamination of the vessel, the repairs and the appraisement of their

cost, as well as to the appraisement of the goods which are to

contribute to the gross average and those which constitute the average,likewise providing in article 857 that, after the appraisement by the

experts of the goods saved, lost, and those which constitute the grossaverage, and after the repairs have been made to the vessel, should any

be necessary, and in such case, after the approval of the accounts by

the persons interested or by the court, the entire record shall be turnedover to the liquidator appointed, in order that he may proceed with the


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pro rata distribution of the average among the contributing values,after fixing the amount mentioned in said article of the contributing

capital: (1) By the value of the cargo, according to the rules

established in article 854; (2) by the value of the vessel in her actualcondition, according to a statement of experts; (3) by 50 per cent of the

amount of the freight, deducting the remaining 50 per cent for wagesand maintenance of the crew. 1awph!l.net

Lastly, in relation to said provisions, article 851 authorizes thecaptain to proceed privately, upon the agreement of the parties

interested, in the adjustment, liquidation, and distribution of the grossaverage, and for this purpose, it is his duty to call, within forty hours

following the arrival of the vessel at the port, the persons interested in

order that they may decide whether the adjustment or liquidation of thegross average is to be made by experts and liquidators appointed by

themselves, in which case this shall be done should the personsinterested agree, and said article also provides that should an

agreement not be possible, the captain shall apply to the judge or courtof competent jurisdiction, who shall be the one of the port where the

proceedings are to be held in accordance with the provisions of the

Code of Commerce, to the consul of Spain (now of the United States),should there be one, or otherwise to the local authority when the

proceedings are to be held in a foreign port. And finally, the nextarticle, 852, says: "If the captain should not comply with the

provisions contained in the foregoing article, the shipowner or agent or

the freighters shall demand the liquidation, without prejudice to theaction they may bring to demand indemnity from him."

It is therefore beyond question that the action of the plaintiff to

recover indemnity for the damage which it claims to have suffered by

reason of the failure of the captain of the vesselBatangueo to proceedwith the liquidation and distribution of the gross average in which it

was a contributor, and by reason of his act in delivering to the othershippers their respective goods, without first requiring them to give

bond, should have been brought not against the shipowner or agent,

who is the defendant in this case, but against the captain himself of thevesselBatangueo.

Although in the preceding decision it is clearly recognized thatthe captain should have begun the proceedings for the adjustment,

liquidation, and distribution of the gross average in question, and that

it was his duty to take the proper steps to protect any ship whose goodsmay have been jettisoned for the common security, it is also stated that

in ordinary practice this is supposed to be complied with by requiringthe consignees of the other cargoes, as a condition precedent to the

delivery thereof, to give a sufficient bond to answer proportionally forthe gross average, and, lastly, that the failure of the captain to take the

necessary steps to effect the adjustment, liquidation, and distribution

of said average gave rise to the responsibility which should beenforced against the defendant shipowner, against whom the shipper

may immediately institute his action, the former having in turn, if heso desires, the right to bring suit against the captain. The majority

opinion attempts to support the last proposition and invokes articles

586, 587, and 588.

First of all, according to articles 866, 867, and 888 of the sameCode, a bond should be required of the shippers by the captain after

the liquidation is already approved, if the contributors should fail to

pay the amount of the quota by the third day after having beenrequired to do so, and before delivering to them the goods saved.the captain having the right, upon failure to give the bond, to delay thedelivery of the goods until the shippers pay their part of the gross

average corresponding to each of them and not before proceedingwith the liquidation, for the simple reason that the amount of the bond

may only be fixed after the determination of the amount which each of

the shippers may be obliged to contribute to the payment of theaverage, and this is so clear and evident that in article 867 the captain

is authorized to attach the goods saved until the shippers should paythe amount, if they should fail to do so by the third day after demand

upon them. And since the captain may require bond, he may delay thedelivery of the goods saved to the shippers until they make the

payment. In the case at bar, no step having as yet been taken for the

adjustment and liquidation of the gross average in question, the factthat the captain of theBatangueo delivered the respective cargoes of

the other shippers without previously requiring a bond, can not

constitute the basis for making the captain responsible, much less theowner of the vessel, as the trial court has erroneously held in the


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judgment appealed from and as this court is given to understand inreferring to said filing of the bond as a prerequisite to the delivery of

the cargo. This is because the time was not opportune when the captain

should and could exact the bond and the law neither requires suchbond to be filed before proceeding with the liquidation, inasmuch as

the shipowner or agent, as well as the shippers, being interested inproceeding with the liquidation, the Code authorizes them, first, to

demand it from the captain and later to institute the actioncorresponding to them against him to recover indemnity if he should

not comply with the provisions upon the subject, that is, if he should

fail to effect the liquidation, or if, in lieu thereof, he should deliver therespective cargoes to the shippers or permit them to dispose of the

same, in which case the responsibility may be fixed upon the captainand not upon the agent upon this ground, and for not requiring the

shippers to give said bond.

In the second place, although it is true that the captain is, as

stated in the decision, primarily the representative of the shipowner oragent, it cannot in all cases, as the decision gives us to understand, be

deduced that the shipowner must be civilly responsible for all the acts

of the captain.

The Code of Commerce clearly and positively specifies the

cases in which such responsibility in demandable from the agent orshipowner, and the cases in which he is not responsible, the

responsible attaching only to the captain. These cases can not beconfused in view of the clear and positive provisions of said Code, in

relation to the method adopted in the exposition thereof and followingthe order of the subjects contained in this law.

Articles 586, 587, and 588, invoked in the decision in questionin order to maintain that theory, are found in title 2 of Book 3 of said

Code which treats of the persons who intervene in maritimecommerce, that is, as may be seen in sections 1, 2, and 3 thereof, the

shipowners and agents, the captains and masters of vessels and the

officers and crew thereof, respectively. Articles 806 to 818 and 846 to849, and consequently, article 852, invoked in said decision and which

refer to the gross or general average and to the simple or particularaverage, are found in titles 4 and 5 of the same Book 3 which,

respectively, deal with the risks, damages, and accidents of maritimecommerce and with the proof and liquidation of the averages; and they

contain all the provisions of the law relative to said subjects and to the

rights and obligations which arise from the averages.

There is no relation whatever between said articles 586, 587, and588, invoked in the decision, and those which treat of averages. The

first of said articles establishes the civil responsibility of the shipownerand agent for the acts of the captain and the obligations incurred by thelatter for the repair, equipment, and provisioning of the vessel. The

second, that is, article 587, establishes the same responsibility of theagent 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 thevessel with all her equipment and the freight he may have earned

during the voyage. In the present case it is not the conduct of thecaptain in the care of the goods which has given rise to the right to

exact the corresponding civil responsibility, but, according to article862, the failure of the captain to comply with the provisions of article

851, with respect to the adjustment, liquidation, and distribution of the

gross average and the failure to attend to the claims which the agent orthe shippers may or should have made, inasmuch as said article 852

clearly so declares, in referring to the agent or the shippers in thefollowing words: "Without prejudice to the action they may bring to

demand indemnity from him." The care of the goods to which article

857 refers consists in the placing of the goods in the proper andadequate place for their transportation and due preservation during the

voyage, in such manner that they may not suffer damages ordeterioration nor be taken away, for, according to article 618, which

bears some relation to said article 587, the captain is civillyresponsible to the agent and the latter to third persons, who may have

occurred to the vessel and the cargoes due to lack of skill or to

negligence on his part and for the subtraction of theft committed by thecrew, reserving this right to proceed against the guilty parties; and,

according to article 619, he shall be liable for the cargo from the timeit is turned over to him at the deck or afloat alongside the vessel at the

port of loading until he delivers it on the shore or on the discharging

wharp of the port of unloading, unless the contrary has been expresslyagreed upon; and, finally, according to No. 5 of the same article 618,


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he shall be liable for those damages arising from an undue use of thepowers and nonfulfillment of the obligations which are his in

accordance with the articles 610 and 612, one of which, the fifth

mentioned in the last article, is to remain constantly on board thevessel during the time the freight is taken on board and carefully watch

the stowage thereof, which acts, as is well-known, constitute themeans for the effective custody of the goods which may be shipped on

board.

In the present case, if the consignees or owners of the cargo on

board the vesselBatangueo took away with them their respectivecargoes or disposed of them upon arriving at port, after part thereof,

which included the petroleum boxes belonging to the plaintiff, had

been jettisoned, it was not because the captain of said vessel had notfulfilled his duty with respect to the care of the cargo, but because he

did not proceed in accordance with the provision of article 851 alreadycited, in the adjustment, liquidation, and distribution of the gross

average caused by that accident. and did not, as he should have done,according to article 852, require the liquidation either of the agent or

the shippers. Therefore to them alone, including the plaintiff, and not

to the conduct of the captain in the custody of the cargo, is the factattributable that the shippers were able to carry away the dispose of the

cargo saved upon the arrival of the vessel at port.

The third or said articles, that is, 588, cited also in the same

decision, far from making the shipowner or the agent responsible forthe obligations incurred by the captain, exempts them from all

responsibility, if the captain should have exceeded the powers andprivileges which are his by reason of his position or have been

conferred upon him by the former, excepting the case, which bears no

relation whatever to that in question, in which the amounts claimedwere made use of for the benefit of the vessel.

Lastly, although this point has not been touched at all in the

decision now under discussion, according to article 618. No. 5, the

captain shall be civilly liable to the agent, and the latter to thirdpersons with whom he may have contracted, for the damages arising

from an undue use of his powers and the nonfulfillment of hisobligations, but it adds that such liability shall be "in accordance with

articles 610 and 612." These articles, as may be seen, refer to thepowers and obligations inherent in the position of captain with respect

to the appointment, contract, and command of the crew, direction of

the vessel to the port of destination, the imposition of punishments forcrimes committed on board, contracts for the charter of the vessel, its

preservation and repair, the supplying of books of navigation, andothers, which are mentioned in said last article, the equipping of the

vessel and the receiving of the cargo, etc., among which obligationsthere is none which bears the slightest relation to those which the same

Code imposes upon the captain with respect to the adjustment,

liquidation, and distribution of the gross average.

On the other hand, in the various sections of title 4 of Book 3,

and in section 1 of title 5, the Code, in treating of the risks, damages,and accidents of maritime commerce, specifically indicates the cases

in which the responsibility of the captain is enforcible, those in whichthat of the agent or shipowner is demandable and those in which that

responsibility is joint among them, as well as those cases in which noresponsibility may be demanded of the agent or shipowner but only of

the captain.

In effect, article 841 of section 3 of said title 4 provides that if

the wreck or stranding should arise through the malice, or lack or skill

of the captain, or because the vessel put to sea insufficiently repairedand prepared, the captain shall be responsible for the indemnification

of damages caused to the vessel or the cargo by the accident, whichliability may be demanded by the agent or the shippers; but there is in

said section no provision whatever by which the agent or shipowner ismade responsible.

In article 826 of section 3 of the same title, which deals withcollisions, it is provided that the agent of the vessel at fault shall

indemnify the losses and damages suffered, after an expert appraisal, ifa vessel should collide with another through the fault, negligence, or

lack of skill of the captain, sailing mate, or any other member of the

complement, and, according to article 831, if a vessel should be forcedto collide with another by a third vessel, the agent of the third vessel

shall indemnify for the losses and damages caused, the captain being


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civilly liable to said agent, this liability being understood to be limitedto the value of the vessel with all equipment and freight earned.

In treating of arrivals under stress, section 2 of the same title, inarticle 821, declares that when such arrival is not legitimate, the agent

and the captain shall be jointly liable for the expense incurred.

In treating averages, article 809, No. 8, in section 1 of the sametitle, which includes, in simple averages, the damage suffered by thevessel or cargo by reason of an impact or collision with another,

declares that if the accident occurred through the fault or negligence of

the captain, he shall be responsible for all the damages caused, and inNo. 9 of the same article, that the owner of the cargo who is injured as

a result of the fault, negligence, or barratry of the captain or the crewmay demand indemnity from the captain or the crew may demand

indemnity from the captain, the vessel and freight, a rule which isbased upon No. 1 of article 618 , already mentioned, according to

which the captain shall be civilly responsible to the agent and the latterto the third persons, for all damages suffered by the vessel and itscargo by reason of the want of skill or negligence on his part, a

provision which, as is well known, cannot refer to the case in whichthe owners of the cargo, having the right to demand the adjustment,

liquidation, and distribution of the gross average, upon the arrival of

the vessel at port, should dispose of the cargo saved. Such case, asalready stated, is the subject of the express and positive provisions of

articles 851 and 852, in relation to articles 866, 867, and 868, includedin section 2 of the same title, as is shown by the fact that the first of

said articles declares that the captain is responsible to the owners ofthe goods averaged for the losses they may have suffered through his

delay or negligence in collecting the amount of the contribution after

the liquidation is approved, and by the fact that the last of said articles,that is, 868, declares that the captain may exact from the shippers a

bond sufficient to answer for the amount of corresponding to the grossaverage for the purpose of delaying the delivery to them of the goods

saved until they pay said amount.

It is by these special provisions and not by the general

provisions contained in sections 1, 2, and 3, of title 2, of Book 3 ofsaid Code, that we must be governed when dealing with the risks,

damages, and accidents the maritime commerce; and gross averagebeing among them, then, for the failure of the captain of the vessel

Batangueo to comply with the provisions relating to the adjustment,

liquidation, and distribution, the defendant owner of the vessel can notand should not be made liable, but only the captain, for article 852,

already cited, is clear and positive to the effect that in said case theagent or the shippers shall demand of the captain the liquidation and

may exercise against him the action to recover the proper indemnity, aprovision which excludes in such case all responsibility of the agent or

owner of the vessel, for the reason that, the latter being, according to

the same article, one of those who, jointly with the shippers, may askthe captain for the liquidation and institute against him the

corresponding action for indemnification, it would be absurb topretend and maintain that the shippers may also institute the same

action against the agent or owner of the vessel, in this manner

converting him from plaintiff into defendant.

But, as if it is still possible to put under discussion and interpretso clear and positive a provision as that of said article 852, and those

related to it which, as has already been mentioned, are also of the same

character, it is argued in the decision of this court that as "the owner ofthe ship ordinarily has vastly more capital embarked upon a voyage

than has any individual shipper of cargo, and moreover, as the ownerof the ship, in the person of the captain, has complete and exclusive

control of the crew and of the navigation of the ship, as well as of the

disposition of the cargo at the end of the voyage, the evident intentionof the Code, taken in all of its provisions, is to place the primary

liability upon . . . the owner of the ship, leaving him to obtain recourse,as it is very easy to do, from other individuals who have been drawn

into the venture as shippers, for, to adopt another interpretation of thelaw would place the shipowner in a position to escape all

responsibility for a general average of this character by means of the

delinquency of his own captain. And it is therefore proper that anyperson whose property may have been cast overboard by order of the

captain should have a right of action directly against the ship's ownerfor the breach of any duty which the law may have imposed on the

captain with respect to such cargo."


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Such reasoning, however, is not convincing. In the first place, itis not true that the average in question was occasioned by the fault of

the captain of the vesselBatangueo, for on this point there is no

evidence in the record, but because of the necessity of throwingoverboard part of the cargo of said vessel to save it from the danger

then threatening it; secondly, the purpose of the adjustment andliquidation of the gross average is to secure contribution from the

parties interested in the vessel and cargo existing at the time of theoccurrence thereof in order to pay the amount of such average (art.

812, Code of Commerce), for which purpose article 858 defines the

procedure for the distribution of the value of the average, stating thatthere must be taken into consideration, as already stated by us, when

we were discussing this article, the contributing capital determined bythe value of the cargo, that of the vessel in her actual condition and the

percentage of the amount of the freight reduced by 50 per cent for

wages and maintenance of the crew, and further declaring that after thedetermination of the amount of the average, it shall be distributed pro

rata among the contributing values and then paid to the proper parties,after the persons interested therein, that is, the agent or owner of the

vessel and the shippers have consented thereto, or in default thereof,after the liquidation is duly approved; and, lastly, as repeatedly stated

by us, accordingly to the same articles, the owner of the vessel, or the

agent, is also one of the interested parties and coparticipants in theadjudication of the average and its pro rata distribution among the

contributing values. From what has just been said it results that nopurpose is served by considering whether or not he has put in the

voyage or undertaking a capital greater than that of any individual

shipper for the purpose of making him principally liable, that iscompelling him to pay to the shippers what each of the latter as well as

he himself has the right to be paid for in proportion to the amount ofthe respective capital fixed according to the rules already stated in the

distribution of the average. This is because, however great the value ofthe vessel may be, there cannot be conceded to the shippers in the

adjudication a greater value than that corresponding to them in the

adjudication and distribution of the average, according to the capitaldetermined by the value of the cargo at each, in conformity with the

rules established in article 854 for the assessment of the same cargo

and of the goods which have to contribute to said average, nor canthere be conceded to the owner of the vessel a value greater than that

which may correspond to him in said adjudication and distribution,based upon the value of the vessel in its actual condition, according to

a statement of experts and the rules for assessment thereof found in

Nos. 6 and 7 of said article 854, from which it is necessarily inferredthat it is notoriously unjust, because the law does not authorize itand it would be a violation of its positive provisions to compel theowner of the vessel, by the mere fact of having put a greater capital in

the undertaking, to pay to the shippers the quota which corresponds toeach of them which, in this case, according to the majority opinion, is

that which should correspond, without a previous liquidation, to the

plaintiff, Standard Oil Company, saving to him, however, the rightafterwards to bring action or proceed against the other shippers, as

expressed in the same decision. In short, it would amount to absolutelyignoring the provisions of the law, which are so clear, express, and

positive with respect not only to the adjustment, liquidation, anddistribution of the gross average, but also to the procedure for effecting

the same and the rights and obligations of those who should contribute

to the average. And it is very clear that error has been committed,because in the same decision, two paragraphs before that in which the

theory already discussed is made, it is stated that there has been "amisconception of the true import of the provisions relating to the

adjustment and liquidation of general average," in arguing that the

right of action should be "against the captain, who has been delinquentin performing the duty which the law imposes on him," for "clearly,"

says the same decision, "those provisions are intended to supply theshipowner, acting to court in the person of the captain, with a means

whereby he may escape bearing the entire burden of the loss and may

distribute it among all the persons who ought to participate in sharingit; but the making of the liquidation is not a condition precedent to the

liability of the shipowner to the shipper whose property has beenjettisoned."

As is clearly seen, what has just been stated gives us to

understand that the owner of the vessel must suffer all the loss in case

of gross average, and that the provisions relating to the adjustment,liquidation, and distribution thereof are for the purpose of furnishing

him the means for evading and enabling himself to distribute it

between the persons who should participate in the average. This iserroneous, because these provisions, which intentionally are


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extensively mentioned in this opinion, do not have that object, for thereason that the shipowner is not the person who should suffer all the

loss in case of gross average, but it should be partitioned and

distributed between the shipowner or agent and the shippers, inproportion to their interests and the respective value of the cargo and

vessel, which should be fixed according to article 850 and the rules fortheir assessment, stated in article 854 previously cited, after the

liquidation and approval thereof, and after hearing the interestedparties or their representatives; and all of these proceedings would

surely be useless and unnecessary if the shipowner or the agent should

have to suffer all loss but may afterwards distribute it among thoseparticipants therein, or, what is the same thing, if he should be

compelled by law to pay the total value of the average and thenpartition it among the shippers or owners of the cargo, as is maintained

in said decision. And there is no doubt that this is what is maintained

in the decision, as the basis of the pronouncements made therein,because, as already stated, in the paragraph now under discussion, it is

clearly stated that the liquidation is not a condition precedent to theenforcement of the liability of the shipowner to the shipper, whose

goods may have been jettisoned. And this is not what the law says justas it does not say that the shipowner shall be liable to the shipper or

owner of the goods, but that, on the contrary, it says that the shipowner

or agent as well as the shippers may demand liquidation from thecaptain and institute against him the corresponding action to recover

indemnity, that is, that he has the same right as the shippers to demandliquidation from the captain and, in default thereof, to recover

indemnification, from which it is clearly inferred that the liquidation is

a condition precedent, not to the liability of the shipowner to theshipper whose goods may have been jettisoned, as stated in the

decision in question, but to the partition which must be made betweenthe agent or shipowner and the shippers of the respective amount of

the average. This partition, and not that the shipowner should suffer allloss but may afterwards evade and distribute it among all persons who

should share in the average, is the real interpretation of the provisions

to which reference is made in the same decision.

Neither is it true that, as stated in said decision, the shipowner

has, through the captain, the complete and exclusive control of thecrew and the sailing of the vessels, as well as of the destination of the

cargo at the end of the voyage, and that, for this reason, the principalliability for the payment of the gross average must fall upon the

shipowner.

That he does not have the complete and exclusive control of the

crew is shown, among other provisions of the same Code ofCommerce, by the following articles: First, article 610, according to

which, among others, it is an inherent power in the captain to appointor make contracts with the crew in the absence of the agent and topropose said crew if said agent be present, but without any right on the

part of the latter to employ any individual against the captain's expressrefusal. This provision necessarily implies the absolute power of the

captain to take on the contract the crew, and article 634 confirms it,

according to which the captain may make up his crew with the numberhe may consider advisable, taking on resident foreigners, in the

absence of nationals, their number not to exceed one-fifth of the totalcrew, and may even, with the consent of the consul or marine

authorities, complete his crew with foreigners in foreign ports if heshould not find sufficient number of nationals, the captain being

obliged to execute the contract with said members of the crew and

others who compose the complement of the vessel; and finally, article637 which empowers the captain, for sufficient cause, to discharge a

sailor during the time of his contract and to refuse, before setting outon a voyage without giving any reason whatever, to permit a sailor he

may have engaged from going on board, in which case he will be

obliged to pay him his wages as if he had rendered services, thisindemnity to be paid from the funds of the vessel only if the captain

had acted for reasons of prudence and in the interests of safety andgood service of the vessel; but, should this not be the case, says said

article, it shall be paid by the captain personally. And, if in all that hasjust been stated the captain may act independently, it is obvious that

the owner of the vessel or the agent does not have, through the captain,

complete and exclusive control of the crew. In short, the captaindirectly exercises exclusively personal powers with respect to the crew

and, for this reason, he is personally and particularly responsible forhis acts, except in the only case already mentioned, in which he may

have acted for the benefit of the vessel.


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Another power inherent in the position of captain, according toarticle 610, is that of directing the vessel to the port of its destination,

according to the instructions he may have received from the agent, but

from this is cannot be inferred that the shipowner or agent has, throughthe captain, complete and exclusive control of the navigation of the

vessel, for the simple reason that the captain may not obey saidinstructions and may act freely adjusting his decisions according to the

circumstances of each case, as would occur in the case of risks,damages, and accidents which we have previously discussed, cases in

which the law imposes upon the captain the obligations to which titles

4 and 5 of Book 3 refers and indicates those cases which we haveheretofore minutely discussed, in some of which he is personally

responsible, in orders the agent or shipowner, or the latter jointly withthe captain, and still in others, in which the agent is not responsible but

only the captain.

Nor is it true that the shipowner, through the captain, has the

complete and exclusive control of the destination of the cargo at theend of the voyage, for article 619 says textually that the captain shall

be liable for the cargo from the time it is turned over to him at the

dock, or afloat alongside the ship, at the port of loading, until hedelivers it on the shore or on the discharging wharf, of the port of

unloading, unless the contrary has been expressly agreed upon, andthat, according to article 620, he is not liable for the damages caused to

the vessel or to the cargo by reason offorce majeure, and article 625

adds that the captain, under his personal liability, as soon as he arrivesat the port of destination, upon obtaining the necessary permission

from the health and customs officers and fulfilling the other formalitiesrequired by the regulations of the administration, shall turn over the

cargo, without any defalcation, to the consignees and, in a proper case,the vessel, rigging, and freights to the agent. And if the captain is

personally responsible, according to the clear and positive text of said

article, for the delivery of the cargo to the consignees and, of thevessel, rigging, and freight, to the agent or shipowner, it is clear that

the latter does not have complete and exclusive control of thedestination of the cargo at the end of the voyage, because the

obligation to deliver is a personal obligation of the captain, and the

agent or shipowner, just as any of the consignees, may demand saidliability with respect to the vessel, rigging, and freight from the

captain. And that responsibility of the captain cannot be confused withthe provision contained in article 618 of the same Code in favor of the

agent, and that of the latter in favor of third persons who may have

contracted with him, because in said article 618 are specificallymentioned the cases of responsibility to which the same article refers,

and the responsibility of the captain from the moment the cargo isdelivered to him until its unloading is specially declared in article 619

and even more particularly in article 625 which says that saidresponsibility is a personal responsibility of the captain.

It cannot, therefore, be inferred from all the provisions of theCode, that the evident intention thereof is to impose the principal

responsibility upon the shipowner, as stated in the decision of the

majority; and, if the law is to be complied with, it is useless effort toshow its truth, by invoking the general provisions of the Code of

Commerce, which govern the relations between the captain and theshipowner or the agent and those of one or the other or both with third

persons who may have contracted with either of them, or by invokingthose which deal with gross averages, as one of the damages and

accidents and maritime commerce, because, in the first, there is no

declaration expressly made upon the subject, and, in the second, whatis established and declared is precisely the contrary, for the shipowner

or agent has, just as the shippers, the right of action against the captainto enforce his responsibility and to be indemnified by him for the

damages occasioned to them by reason of the failure of the captain to

comply with the obligations imposed upon him by law with respect tothe adjustment, liquidation, and distribution of the average, and with

respect to the disposition and delivery of the goods saved to theshippers, before the payment by the latter of their aliquot part in the

partition of the average, or without their having filed a sufficient bondto answer for the cargo, for the reason that, according to article 619, he

is responsible for the cargo from the moment he takes charge thereof at

the port of loading until its delivery at the port of unloading and,according to article 625, he is, under his personal liability, obliged to

deliver the cargo, without defalcation, to the consignees or shippersand, in the proper case, the vessel, rigging, and freight to the agent

upon the arrival at the port of destination. This shows, in relation to the

provisions of articles 866 and 868, already cited, that the captain of thevessel should be personally liable to the owners of the goods averaged


20/57

for the damages which were incurred by them, by reason of his delayor negligence in requiring a goods of the shippers before delivery to

them of the goods saved, this supposing that they are obliged to doso, instead of proceeding to the adjustment, liquidation, anddistribution of the gross average, inasmuch as the purpose of the law is

to exact said personal responsibility for the due delivery to theconsignees or shippers of the cargo.

The plaintiff, therefore, should have brought said action, if he

had any, for the recovery of the amount claimed in the complaint, not

against the defendant, owner of the vesselBatangueo, but against thecaptain thereof, and said defendant cannot and should not be sentenced

to pay to the plaintiff the sum stated in the decision of this courtwhich, with some modification as to the amount thereof, affirms the

judgment of the trial court; and there is more reason for this assertion

because that sum is, according to said decision, what the plaintiffshould receive in the partition and distribution of the gross average in

question and, yet, it does not appear that the corresponding liquidation,and, consequently, the division and distribution of said average, has

already been made, as required by the provisions of the Code ofCommerce in the articles mentioned at the beginning.

Regretting that I have to dissent from the respectable opinion ofthe majority, I am of the opinion, for the reasons above stated, that the

judgment appealed from should be reversed and the defendant should

be absolved from the complaint.

Avancea, J., concurs.


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G.R. No. L-10195 December 29, 1916

YU CON, plaintiff-appellee,vs.

GLICERIO IPIL, NARCISO LAURON, and JUSTO SOLAMO,

defendants-appellants.

Felix Sevilla y Macam for appellants.Juan Singson and Dionisio Jakosalem for appellee.

ARAULLO,J.:

The purpose of the action brought in these proceedings is to enable the

plaintiff to recover from the defendants jointly and severally the sum

of P450, which had been delivered by the plaintiff to the first and thirdof the above-named defendants, master and supercargo, respectively,

of a banca named Mariabelonging to the second defendant, to becarried, together with various merchandise belonging to the plaintiff,

from the port of Cebu to the town of Catmon of the Province of Cebu.By virtue of the contract executed between the said second defendant

and the plaintiff, the money and merchandise were to be transported by

the said craft between the points above-named in consideration of thepayment of a certain sum for each voyage. The money disappeared

from said craft during the night of October 18, 1911, while it was

anchored in the port of Cebu and ready to sail for its destination,Catmon, and was not afterwards found. The plaintiff based his action

on the charge that the disappearance of said sum was due to theabandonment, negligence, or voluntary breach, on the part of the

defendants, of the duty they had in respect to the safe-keeping of theaforementioned sum.

The defendants, besides denying the allegations of the complaint,pleaded in special defense that the plaintiff, at his own expense and

under his exclusive responsibility, chartered the said banca, the

property of the defendant Lauron, for the fixed period of three days, atthe price of P10 per diem, and that, through the misfortune,

negligence, or abandonment of the plaintiff himself, the losscomplained of occurred, while said banca was at anchor in the port of

Cebu, and was caused by theft committed by unknown thieves. They

further alleged that said defendant Lauron, the owner of the banca

merely placed this craft at the disposal of the plaintiff for the price and

period agreed upon, and did not go with the banca on its voyage fromCatmon to Cebu. As a counterclaim, the defendants also asked that the

plaintiff be ordered to pay the freight agreed upon, which had not yetbeen paid, amounting to P80, plus the sum of P70, as an indemnity for

the losses and damages caused them by the attachment of the banca,

issued at the instance of the plaintiff upon filing his complaint. Theyalso prayed for the additional sum of P100, for the deterioration of the

said banca, and also that of P200 for other deterioration suffered bythe same since November, 1911, and which had not bee paid for.

Finally, the defendants asked to be absolved from the complaint.

Before commencing the hearing of this case, the defendants made a

verbal motion asking that the plaintiff be declared in default, withrespect to the counterclaim filed by them in their answer. On the same

date, the plaintiff presented his answer to said counter claim, denying

each and all of the allegations thereof and of the defendants' specialdefense. The aforementioned motion was overruled by the court, and

the defendants excepted.

At the termination of the trial, the court, in view of the evidence

adduced, held that there was no room to doubt that the sole cause ofthe disappearance of the money from the said banca was the

negligence of the master and the supercargo, the defendants Ipil andSolamo, respectively, and that the defendant Narciso Lauron was

responsible for that negligence, as owner of the banca, pursuant to

articles 589, 587, and 618 of the Code of Commerce, the plaintifftherefore being entitled to recover the amount lost. Judgment was

rendered on April 20, 1914, in favor of the plaintiff and against thedefendants jointly and severally for th

Documents

Part IV. A. to D