Week 13 Digest

8/10/2019 Week 13 Digest

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1. WING KEE COMPRADORING CO VS BARK MONONGAHELAGAB

FACTS:The plaintiff in this case, Wing Kee Compradoring Company,seeks to recover from the defendants, principally the AdmiralLine, as agent for the Bark Monongahela, the sum of P17,675.64,with interest and costs, on account of goods, wares, andmerchandise sold and delivered by the plaintiff to the defendantsfor the use of the crew of theBark Monongahela.The debt was due from the Admiral Line, the agent; C. G.Lothigius, the captain of the boat; and the owners of the boat,either Victor S. Fox & Co., Inc., or the United States ShippingBoard Emergency Fleet Corporation. Captain Lothigius and theAdmiral Line answered. The owners were not cited to appear. Noaction against the bark was taken. Following the trial, judgmentwas rendered dismissing the complaint, without special findingas to costs. Turning next to the facts, the exhibits of record showthat beginning with March 16, 1921, and ending with August 16,1921, various supplies were furnished the Bark MonongahelabyWing Kee Compradoring Company. Most of the bills for thesegoods are made out against the "Admiral Line, S.S. Monongahela."The first requisitions for the supplies are on forms headed "TheAdmiral Line." Then follows Manila, the date, and the name,"Wing Kee Compradoring Co." Next is the order, reading: "Please

deliver to S. S. Monongahelanow lying at Bay, the following goodsand send bills to the Admiral Line:". After this goods are named.At the foot is found, "United States Shipping Board EmergencyFleet Corporation," although these words are erased in a few ofthe requisitions, "The Admiral Line (Pacific Steamship Co.)Operating Agents. By J. J. Armstrong." On the side of therequisitions in red ink is the following: "Note: This requisitionmust be receipted by either Chief Officer, Chief Steward or ChiefEngineer and returned to the Admiral Line, with six copies ofinvoice immediately after delivery of goods." After May 4, 1921,the requisitions seem to have been made out by the steward andthe master. We deduce from these documents that the AdmiralLine was the operating agent for MonongahelaIn the Manila Daily Bulletin for August 2, 1921, appeared thefollowing:"Notice Bark Monongahela The undersigned hereby givenotice that they are not responsible in any manner whatsoeverfor any indebtedness incurred by the Bark Monongahela, itsMaster and/or Crew The Admiral Line." The trial judge foundas a fact that on or before August 4, 1921, the Admiral Linehad ceased to act as agent for theMonongahela. Nevertheless,supplies were furnished the Monongahelaafter these datesby the plaintiff.ISSUE:can Wing Kee sue Admiral Line?HELD: Admiral line is liable only with regard to the suppliesfurnished before the agency of Admiral Line ceased.section 1 of Title 2 of our Code of Commerce refers to"Owners ofVessels and Their Agents." The first article in this section (art.586), and the provision of law which in our judgment is

controlling, reads:The owner of a vessel and the agent shall be civilly liable for the

acts of the captain and for the obligations contracted by the latter

to repair, equip, and provision the vessel, provided the creditorproves that the amount claimed was invested therein.By agent is understood the person intrusted with theprovisioning of a vessel, or who represents her in the port inwhich she happens to be.agents buy in their own names, but really for the account of theirprincipal, the seller has an option to look to either for payment,unless (1) he trusted the agent exclusively; or (2) by the usageand understanding of the business the agent only is held; or (3)unless the special circumstances of the case show that only theagent was intended to be bound and the seller knew it or was

chargeable with knowledge of it. Although the English rule thatwhere the agents buys in his own name for the account of aforeign principal, the agent only is bound appears not to havebeen followed in the United StatesNot only this, but the plaintiff has made no effort to bring theowner of the bark into the case and has pushed with noenthusiasm its case against the captain of the boat. Whatapparently the plaintiff wants is for the Admiral Line, as the agentfor the Bark Monongahela, to pay the claim, leaving the latter toreimburse itself, if sees fit, from the owners.To all this appellee answers that as the agency has ceased, actioncannot be brought against the Admiral Line. To our minds this isa rather far-fetched argument, for, pursued to its logicaconclusion, every agent for a vessel could thus avoidresponsibility pursuant to article 568 of the Code of Commerceby giving up its agency when threatened with suit to enforce theobligations of third parties. Moreover, the bills were presentedwhen the Admiral Line was yet the agent.However, Admiral line is liable only with regard to the suppliesfurnished before the agency of Admiral Line ceased.


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2. FAR EASTERN SHIPPING CO VS CA NIKKI1. Far Eastern Shipping v. CADoctrine:

A pilot, in maritime law, is a person duly qualified, and licensed,to conduct a vessel into orout of ports, or in certain waters. In a broad sense, the term"pilot" includes both (1) thosewhose duty it is to guide vessels into or out of ports, or inparticular waters and (2) thoseentrusted with the navigation of vessels on the high seas.However, the term "pilot" is moregenerally understood as a person taken on board at a particularplace for the purpose ofconducting a ship through a river, road or channel, or from a port

Under English and American authorities, generally speaking,the pilot supersedes themaster for the time being in the command and navigation of theship, and his orders mustbe obeyed in all matters connected with her navigation. Hebecomes the masterpro hacvice and should give all directions as to speed, course,stopping and reversinganchoring, towing and the like. And when a licensed pilot isemployed in a place wherepilotage is compulsory, it is his duty to insist on having

effective control of the vessel,or to decline to act as pilot. Under certain systems of foreignlaw, the pilot does not takeentire charge of the vessel, but is deemed merely the adviser ofthe master, who retainscommand and control of the navigation even in localities wherepilotage is compulsory

The master is not wholly absolved from his duties while a pilotis on board his vessel, andmay advise with or offer suggestions to him. He is still incommand of the vessel, except sofar as her navigation is concerned, and must cause the ordinarywork of the vessel to beproperly carried on and the usual precaution taken. He does notcede his authority when apilot is onboard pursuant to compulsory pilotage.

Even though the pilot is compulsory, if his negligence was notthe sole cause of the injury,but the negligence of the master or crew contributed thereto, theowners are liable. But theliability of the ship in rem does not release the pilot from theconsequences of his ownnegligence. The rationale for this rule is that the master is notentirely absolved ofresponsibility with respect to navigation when a compulsorypilot is in chargeFacts:

The MV PAVLODAR (from USSR), owned by Far EasternShipping (FESC) arrived at the

Port of Manila. Senen GAVINO was tasked by the Manila PilotsAssociation to conductdocking maneuvers for the safe berthing of the vessel (berthing =parking the boat in thepier) KAVANKOV, the ships master, was there to brief him and to

relay his orders.o Note: GAVINO piloted the boat pursuant to compulsorypilotage

When the boat was near the berthing station, GAVINO orderedthe anchor to be dropped.However, the anchor did not take hold as expected and the boatdid not slow down. Theboat eventually hit the pier and damaged it.

The Manila Port Authority sued MPA, FESC and GAVINO for thedamage to the pier. Thetrial court held all the defendants solidarily liable for thedamages. Thus, FESC appealed,arguing that GAVINO, the pilot under compulsory pilotage, wasthe one at faultIssue: Is GAVINO liable for his negligence? Is KAVANKOV liablefor his negligence?Gavino negligent

Pursuant to an ADMIN ORDER requiring compulsory pilotage,Capt. GAVINO wasassigned to pilot MV Pavlodar into the port. Upon assuming suchoffice as compulsory pilot,Capt. Gavino is held to the universally accepted high standards ofcare and diligencerequired of a pilot, whereby he assumes to have skill andknowledge in respect tonavigation in the particular waters over which his licenseextends superior to andmore to be trusted than that of the master

In this case, the Court found that GAVINO was negligentbecause he was late in orderingthe dropping of the anchor. Moroever, when he realized that theanchor did not attachproperly, Gavino ordered merely "half-astern". It took Gavino

another minute to order a"full-astern". By then, it was too late. The vessel's momentumcould no longer be slowedand, barely a minute thereafter, the bow of the vessel hit theapron of the pierKavankov also negligent

The master is not wholly absolved from his duties while a pilotis on board his vessel, andmay advise with or offer suggestions to him. He is still incommand of the vessel, except sofar as her navigation is concerned, and must cause the ordinarywork of the vessel to beproperly carried on and the usual precaution taken.

In this case, while the pilot Gavino may indeed have beencharged with the task of dockingthe vessel in the berthing space the master of the vessel hadthe corresponding duty tocountermand any of the orders made by the pilot, and evenmaneuver the vesselhimself, in case of imminent danger to the vessel and theport. This, KAVANKOVfailed to do.Liability of Shipowners

Even though the pilot is compulsory, if his negligence was notthe sole cause of the injury,but the negligence of the master or crew contributed thereto, theowners are liable. But theliability of the ship in rem does not release the pilot from theconsequences of his own

negligence. The rationale for this rule is that the master is notentirely absolved ofresponsibility with respect to navigation when a compulsorypilot is in charge.


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3. NATIONAL STEEL CORP VS CA EM2. National Steel Corporation v. CADoctrine:

A stevedore company engaged in discharging cargo has theduty to load the cargo in aprudent manner, and it is liable for injury to, or loss of, cargocaused by its negligence andwhere the officers and members and crew of the vessel donothing and have noresponsibility in the discharge of cargo by stevedores , the vesselis not liable for loss of,or damage to, the cargo caused by the negligence of thestevedoresFacts:

Vlasons Shipping owns MV Vlasons I, a vessel which renders

tramping service and assuch, does not transport for the general public. Its services areavailable only to specificpersons. It entered into a contract of affreightment/contract ofvoyage charter hire withNational Steel Corporation (NSC), wherein Vlasons was tasked totransport tin plates andhot rolled sheets to Manila.o The charter party provides that the shipowner shall not beresponsible for

damage to the goods unless caused by the negligence of themaster and crew.

Upon arrival in Manila, it was found that the cargo was wet andrusty. It was found that therusting was due to contact with SEA WATER sustained while onboard the vessel. THUS,NSC sued Vlasons for the damage to the cargo. Vlasons argue thatthe SEA WATERseeped in because of rough seas, and not because of thenegligence of its master andcrew, hence it should not be held liable.

The TC ruled that the damage was due to a fortuitous event,that the damage was due tothe inherent nature of the goods and that the stevedores were theones liable for beingnegligent. Thus, NSC appealed.Issue: Were the officers/crew of VLASONS negligent? NOShipowners not liable

The court found that the ship used old tarpaulin to cover thehatches, but only in additionto the new ones used primarily to make the hatches of theship watertight. Duediligence was exercised by the officers and the crew of the MVVlasons I. It wasdemonstrated by the fact that, despite encountering roughweather twice, the new tarpaulindid not give way and the ship's hatches and cargo holds remainedwaterproof.

NSC failed to discharge its burden to show negligence on the

part of the officers and thecrew of MV Vlasons I. On the contrary, the records reveal that itwas the stevedores ofNSC who were negligent in unloading the cargo from the ship.The stevedores employedonly a tent-like material to cover the hatches when strong rainsoccasioned by a passingtyphoon disrupted the unloading of the cargo. This tent-likecovering, however, was clearlyinadequate for keeping rain and seawater away from the hatchesof the ship.

The fact that NSC actually accepted and proceeded to removethe cargo from the ship

during unfavorable weather will not make VSI liable for anydamage caused thereby. Inpassing, it may be noted that the NSC may seekindemnification, subject to the laws onprescription, from the stevedoring company at fault in thedischarge operations.o A stevedore company engaged in discharging cargo has theduty to load thecargo in a prudent manner, and it is liable for injury to, or loss of,cargo causedby its negligence and where the officers and members and crewof the vessel donothing and have no responsibility in the discharge of cargo bystevedores thevessel is not liable for loss of, or damage to, the cargo caused bythe negligenceof the stevedoresOptional (demurrage)

The Court defined demurrage in its strict sense as thecompensation provided for in thecontract of affreightment for the detention of the vessel beyondthe laytime or that period oftime agreed on for loading and unloading of cargo. It is given tocompensate the shipownerfor the nonuse of the vessel

Laytime runs according to the particular clause of the charterparty. . . . If laytime isexpressed in "running days," this means days when the shipwould be run continuously,and holidays are not excepted. A qualification of "weatherpermitting" excepts only thosedays when bad weather reasonably prevents the workcontemplated.

In this case, the contract of voyage charter hire provided for afour-day laytime; it alsoqualified laytime as WWDSHINC or weather working daysSundays and holidays included.The running of laytime was thus made subject to theweather, and would cease torun in the event unfavorable weather interfered with theunloading of cargo.Consequently, NSC may not be held liable for demurrage as thefour-day laytime allowed itdid not lapse, having been tolled by unfavorable weathercondition

Vlasons won, NSC lostDo Tin Plates Sweat? Yes, due to moisture outside the boat.

However, in this case thedamage to the tinplates was occasioned not by airborne moisturebut by contact with rainand seawater.DOCTRINE: A stevedore company engaged in discharging cargohas the duty to load the cargo in a prudent manner, and it is liablefor injury to, or loss of, cargo caused by its negligence and where

the officers and members and crew of the vessel do nothing andhave no responsibility in the discharge of cargo by stevedoresthe vessel is not liable for loss of, or damage to, the cargo causedby the negligence of the stevedoresFACTS:

Plaintiff National Steel Corporation (NSC) as Charterer anddefendant Vlasons Shipping, Inc. (VSI) as Owner, entered into aContract of Voyage Charter Hire (Affreightment) whereby NSChired VSIs vessel, the MV VLASONS I to make one (1) voyage to

load steel products at Iligan City and discharge them at NorthHarbor, Manila. VSI carried passengers or goods only for those itchose under a special contract of charter party.


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The vessel arrived with the cargo in Manila, but when the vessels

three (3) hatches containing the shipment were opened, nearlyall the skids of tin plates and hot rolled sheets were allegedlyfound to be wet and rusty.Plaintiff NSC filed its complaint against defendant before the CFIwherein it claimed that it sustained losses as a result of the act,neglect and default of the master and crew in the management ofthe vessel as well as the want of due diligence on the part of thedefendant to make the vessel seaworthy -- all in violation ofdefendants undertaking under their Contract of Voyage Charter

Hire.In its answer, defendant denied liability for the alleged damageclaiming that the MV VLASONS I was seaworthy in all respectsfor the carriage of plaintiffs cargo; that said vessel was not acommon carrier inasmuch as she was under voyage charter

contract with the plaintiff as charterer under the charter party.

The trial court ruled in favor of VSI; it was affirmed by the CA onappeal.ISSUE: Whether or not the officers/crew of VLASONS arenegligent thus making the ship owners liable to the plaintiff.HELD:NO The Ship owners are not liableThe court found that the ship used old tarpaulin to cover thehatches, but only in addition to the new ones used primarily tomake the hatches of the ship watertight. Due diligence was

exercised by the officers and the crew of the MV Vlasons I. It wasdemonstrated by the fact that, despite encountering roughweather twice, the new tarpaulin did not give way and the ship'shatches and cargo holds remained waterproof.NSC failed to discharge its burden to show negligence on the partof the officers and the crew of MV Vlasons I. On the contrary, therecords reveal that it was the stevedores of NSC who werenegligent in unloading the cargo from the ship. The stevedoresemployed only a tent-like material to cover the hatches whenstrong rains occasioned by a passing typhoon disrupted theunloading of the cargo. This tent-like covering, however, wasclearly inadequate for keeping rain and seawater away from thehatches of the ship.The fact that NSC actually accepted and proceeded to remove thecargo from the ship during unfavorable weather will not makeVSI liable for any damage caused thereby. In passing, it may benoted that the NSC may seek indemnification, subject to the lawson prescription, from the stevedoring company at fault in thedischarge operations.A stevedore company engaged in discharging cargo has the dutyto load the cargo in a prudent manner, and it is liable for injuryto, or loss of, cargo caused by its negligence and where theofficers and members and crew of the vessel do nothing andhave no responsibility in the discharge of cargo bystevedores the vessel is not liable for loss of, or damage to,the cargo caused by the negligence of the stevedoresThe Court defined demurrage in its strict sense as thecompensation provided for in the contract of affreightment forthe detention of the vessel beyond the laytime or that period of

time agreed on for loading and unloading of cargo. It is given tocompensate the shipowner for the nonuse of the vesselLaytime runs according to the particular clause of the charterparty. . . . If laytime is expressed in "running days," this meansdays when the ship would be run continuously, and holidays arenot excepted. A qualification of "weather permitting" exceptsonly those days when bad weather reasonably prevents the workcontemplated.In this case, the contract of voyage charter hire provided for afour-day laytime; it also qualified laytime as WWDSHINC orweather working days Sundays and holidays included.The running of laytime was thus made subject to the weather,and would cease to run in the event unfavorable weatherinterfered with the unloading of cargo.

Consequently, NSC may not be held liable for demurrage as thefour-day laytime allowed it did not lapse, having been tolled byunfavorable weather conditionhttp://karlmagz.blogspot.ca/2011/02/case-digest-transportation-law-vlasons.html


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4. SWITZERLAND GENERAL INSURANCE VS RAMIREZ EUNICESwitzerland General Insurance v. Ramirez2Doctrine:

The ship agent is solidarily liable with the shipowner for thedamage caused to the goodsdue to the negligence of the captain and crew.Facts:

On 1974, 60k bags of urea nitrogen were shipped from Japan toManila by CITADELLINES (local agent of OYAMA LINES). The goods weredischarged by MABUHAYBROKERAGE. However, when the consignee, BORDENINTERNATIONAL, received thegoods, they were found to have been damaged (the bags weretorn)

SWITZERLAND GEN INSURANCE (SGI) paid BORDEN the valueof the goods and in turnsued OYAMA, CITADEL and MABUHAY BROKERAGE.CITADEL argued that it was not liable since it was merely an

AGENT ofOYAMA and not a ship agent. OYAMA alleged that the claim couldnot beentertained because it was already been declared insolvent by acourt in Japan.

The TC found OYAMA to be liable, and exonerated CITADELand MABUHAYBROKERAGE. Hence, the insurer appealed.Issue: Should CITADEL, the local agent, also be held liable? YES. Itis a ship agent.

Considering the relationship of the parties, respondent CitadelLines, Inc. cannot beconsidered as a "mere agent" under the civil law on agency asdistinguished from a shipagent, within the context of the Code of Commerce.o This is because in Yu Biao Sontua & Co. v. Ossorio, it was heldthat thedoctrines having reference to the relations betweenprincipal and agentcannot be applied in the case of ship agents and ship owners.

In this case, CITADEL is clearly the ship agent of OYAMA. Asprovided in the law, a shipagent is the person entrusted with the provisioning of a vessel orwho represents her in theport in which she happens to be. CITADEL took charge of theunloading of the goods andissued cargo receipts in its own name. Therefore, it is clear thatCITADEL is the shipagent.

Being a ship agent, it is liable for the indemnities in favor of 3rdpersons which arise fromthe conduct of the captain in the care of the goods (Art 587 and618) It is thereforesolidarily liable with OYAMA for the value of the goods paid for

by the insurer.Moreover, the insolvency of Oyama Lines has no bearing on the

case insofar as the liabilityof Citadel is concerned. The law does does not make the liabilityof the ship agentdependent upon the solvency or insolvency of the ship owner.Note: As to the liability of chartererIn this case, the charterer represented itself on the face of the billof lading as the carrier.The vessel owner and the charterer did not stipulate in theCharter party on their separaterespective liabilities for the cargo. The loss/damage to the cargowas sustained while it was

still on board or under the custody of the vessel. As the chartererwas itself the carrier, itwas made liable for the acts of the ship captain who wasresponsible for the cargo whileunder the custody of the vessel.As for the charterer's agent, the evidence showed that itrepresented the vessel when ittook charge of the unloading of the cargo and issued cargoreceipts (or tally sheets) in itsown name. Claims against the vessel for the losses/damagessustained by that cargo werealso received and processed by it. As a result, the charterer'sagent was also considered aship agent and so was held to be solidarily liable with itsprincipal.FACTS:

On December 24, 1975, the petitioner filed an admiralty caseagainst Oyama Shipping Co., Ltd. and its agent Citadel Lines, Incthrough the petitioners agent F.E. Zuellig, Inc. The complainalleged that on December 21, 1974, 60,000 bags of urea nitrogenwere shipped from Ninama, Japan on board the S/S St. Lourdesowned and operated by Citadel Lines, Inc(def.s agent). andinsured by the petitioner for the sum of Php 9,319,105.00 againstall risks. The shipment was discharged from the vessel S/S StLourdes shipside into lighters owned by Mabuhay Brokerage

Company, Inc. but when the same was subsequently delivered toand acknowledged by the consignee, it was found out to havesustained losses and or damage amounting to Php 38,698.94. Theamount was paid by petitioner insurance company to theconsignee by virtue of which payment became subrogated to therights of the latter.

Insurance company filed a case against Oyoma, Citadel andManila Brokerage Co., as alternative defendants to determinetheir liability.As a defense, Citadel claimed that as an agent of Oyoma, it shouldnot be held liable for the damages incurred by the goods.

Oyoma on the other hand, claimed that it has no agent torepresent it in the Philippines, since it has been declaredinsolvent by the Tokyo court, and so the Insurance Companyshould file its claim there. It also raised the defense that thenegligence was attributable to the shipper, Sumitomo ShojKaisha, Ltd for not having placed the goods in a seaworthypackage.It also stated that it was Manila Brokerage who failed toexercise the diligence required.

RTC: ruled that ONLY Oyoma should be held liable becauseCitadel is only an agent as contemplated by the Civil Code, henceit should not be made liable for the damages incurred. Oyomaraised the defense of prescription, but it was not substantiated byany evidence. Insolvency would not in any way affect his liabilityManila Brokerage had exercised diligence, as soon as they sawthe damages, it tied the goods and sewed the torn portions of the

package.

ISSUE:Whether or not Citadel Lines, Inc. may be held primarily liable forthe loss/damage found to have been sustained by subjecshipment while on board and / or still in the custody of the saidvessel?

HELD:YES.The lower court erred in applying the law on agency underthe Civil Code. The Code of Commerce provides, among othersthat the ship agent shall also be liable for the indemnities in favorof third persons which arise from the conduct of the captain inthe care of the goods which the vessel carried; but he may


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exempt himself therefrom by abandoning the vessel with all herequipment and the freightage he may have earned during thevoyage. Citadel Lines, Inc. as the ship agent is liable to thepetitioner, solidarily with its principal Oyama Shipping Co, Ltd.

RATIO:A ship agent, according to Article 586 of the Code of Commerce,is the person entrusted with the provisioningIt is not disputed by the private respondent that it is the localrepresentative in the Philippines of the Oyama Shipping Co., Ltd.and, as alleged by petiti oner, upon arrival of the vessel S/S "St.Lourdes" in Manila, it took charge of the unloading of the cargoand issued cargo receipts (or tally sheets) in its own name, as anevidence of the discharge of cargoes and the conditions thereoffrom the vessel to the arrastre operators and /or untobarges/lighters, and that claims against the vessel S/S "St.Lourdes" for losses/damages sustained by shipments were in factfiled and processed by respondent Citadel Lines, Inc. These factspoint to the inevitable conclusion that private respondent is theentity that represents the vessel in the port of Manila and henceis a ship agent within the meaning and context of Article 586 ofthe Code of Commerce.

The Code of Commerce provides, among others, that the shipagent shall also be liable for the indemnities in favor of third

persons which arise from the conduct of the captain in the care ofthe goods which the vessel carried; but he may exempt himselftherefrom by abandoning the vessel with all her equipments andthe freightage he may have earned during the voyage. (Article587).

In addition, Article 618 of the same Code states:Art. 618. The captain shall be civilly liable to the ship agent andthe latter to the third persons who may have made contracts withthe former 1. For all the damages sufferred by the vessel and its cargo byreason of want of skill or negligence on his part. If amisdemeanor or crime has been committed he shall be liable inaccordance with the Penal Code.2. For all the thefts and robberies committed by the crew,reserving his right of action against the guilty parties.3. For the losses, fines, and confiscations imposed on account ofviolation. of the laws and regulations of customs, police, health,and navigation4. For the losses and damages caused by mutinies on board thevessel or by reason of faults committed by the crew in the serviceand defense of the same, if he does not prove Chat, he made fulluse of his authority to prevent or avoid them.5. For those arising by reason of a misuse of powers and non-fulfillment of the duties which pertain to him in accordance withArticles 610 and 612.6. For those arising by reason of his going out of his course ortaking a course which, in the opinion of the officers of the vessel,at a meeting attended by the shippers or super cargoes who may

be on board, he should not have taken without sufficient cause.No exception whatsoever shall exempt him from his obligation.7. For those arising by reason of his voluntarily entering a portother than his destination, with the exception of the cases orwithout the formalities referred to in Article 612.8. For those arising by reason of the non-observance of theprovisions contained in the regulations for lights and maneuversfor the purpose of preventing collisions.

At any rate, the liabilities of the ship agent are not disputed byprivate respondent. It appearing that the Citadel Lines is the shipagent for the vessel S/S "St. Lourdes" at the port of Manila, it is,therefore, liable to the petitioner, solidarily with its principal,Oyama Shipping Co., Ltd., in an amount representing the value of

the goods lost and or damaged, amounting to P38,698.94, whichwas likewise the amount paid by petitioner, as insurer, to theinsured consignee As found by the court a quo, there has been noproof presented to show that the officers of the vessel, in whosecustody the goods were lost or damaged, are exempt fromliability therefrom and that the damage was caused by factorsand circumstances exempting them from liability.The insolvency of Oyama Lines has no bearing on the instant caseinsofar as the liability of Citadel Lines, Inc. is concerned. The lawdoes does not make the liability of the ship agent dependent uponthe solvency or insolvency of the ship owner.WHEREFORE, the decision appealed from is modified, andprivate respondent Citadel Lines, Inc. is hereby ordered to paysolidarily with its principal, Oyama Lines (Oyama Shipping Co.LTD.), the amount of P38,698.94, with interest thereon at thelegal rate from the date of the filing of the complaint onDecember 24, 1975 until fully paid, P5,000.00 as attorney's feesand the costs of suit. The rest of the decision is affirmed. Nopronouncement as to costs.


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5. SWEET LINES VS CA VANESSA4. Sweet Lines v. CA, Bacatan, Quintos, Cabras, Veloso(private respondents)Doctrine:

In this case, the voyage to Catbalogan was "interrupted" by thecaptain upon instruction ofmanagement. The "interruption" was not due to fortuitous eventor for majeure nor todisability of the vessel. Having been caused by the captainupon instruction ofmanagement, the passengers' right to indemnity from theship owner. The owner of avessel and the ship agent shall be civilly liable for the acts ofthe captain.

Under Article 2220 of the Civil Code, moral damages are justlydue in breaches of contractwhere the defendant acted fraudulently or in bad faith. In thiscase there was bad faith asthe shipowner did not give notice to the respondents as to thechange in schedule and infact bypassed them to comply with its schedule. However, noexemplary damages were notawarded.

The owner of a vessel is liable in damages arising from the actof its captain in by-passing

a pre-scheduled port of callMechanical defects in a common carrier (e.g. boats, vehicles)

are not considered fortuitousevents.Facts:

The 4 private respondents in this case bought 4 first classtickets from SWEET LINES to goto CATBALOGAN, SAMAR. The boat failed to leave on the statedtime (12MN) and insteadleft at 8AM due to engine trouble.

The boat did not dock at CATBALOGAN, the first port of call andinstead proceeded toTACLOBAN. The respondents had no choice but to disembark atTACLOBAN and they hadto board a ferryboat to CATBALOGAN. Hence, they sued SWEETLINES for damages.Issue: Is Sweet Lines liable for damages? YESPertinent Provisions

ART. 614. A captain who, having agreed to make a voyage, fails tofulfill his undertaking, withoutbeing prevented by fortuitous event or force majeure, shallindemnify all the losses which hisfailure may cause, without prejudice to criminal penalties whichmay be proper.

ART. 698. In case of interruption of a voyage already begun, thepassengers shall only beobliged to pay the fare in proportion to the distance covered,without right to recover damages ifthe interruption is due to fortuitous event or force majeure, but

with a right to indemnity, if theinterruption should have been caused by the captain exclusively.If the interruption should becaused by the disability of the vessel, and the passenger shouldagree to wait for her repairs, hemay not be required to pay any increased fare of passage, but hisliving expenses during thedelay shall be for his own account.

As found by both Courts below, there was no fortuitous eventor force majeure whichprevented the vessel from fulfilling its undertaking of takingprivate respondents toCatbalogan. In the first place, mechanical defects in thecarrier are not considered

a caso fortuito that exempts the carrier from responsibilityIn the second place, even granting arguendo that the engine

failure was a fortuitous event,it accounted only for the delay in departure. When the vessefinally left there was no longeranyforce majeure that justified by-passing a port of call. Thevessel was completelyrepaired the following day.

The reason for by-passing the port of Catbalogan, as admittedby SWEET LINEs GeneralManager, was to enable the vessel to catch up with its schedulefor the next week. Therecord also discloses that there were 50 passengers for Taclobancompared to 20passengers for Catbalogan, so that the Catbalogan phase couldbe scrapped withouttoo much loss for the company.

In this case, the voyage to Catbalogan was "interrupted" by thecaptain upon instruction ofmanagement. The "interruption" was not due to fortuitous eventor for majeure nor todisability of the vessel. Having been caused by the captainupon instruction ofmanagement, the passengers' right to indemnity from theship owner is evident. The

owner of a vessel and the ship agent shall be civilly liable forthe acts of the captain.

R E S O L U T I O N

DOCTRINE: The "interruption" was not due to fortuitous event orforce majeure nor to disability of the vessel. Having been causedby the captain upon instruction of management, the passengersright to indemnity is evident. The owner of a vessel and the shipagent shall be civilly liable for the acts of the captain.

FACTS:

PRs (Quintos, Bacatan Cabras and Veloso) purchased first- classtickets from petitioner at its office in Cebu City. They were toboard petitioner's vessel, M/V Sweet Grace, bound forCatbalogan, Western Samar. Instead of departing at thescheduled hour of about midnight on July 8, 1972, the vessel setsail at 3:00 A.M. of July 9, 1972 only to be towed back to Cebu dueto engine trouble, arriving there at about 4:00 P.M. on the sameday. Repairs having been accomplished, the vessel lifted anchoragain on July 10, 1972 at around 8:00 A.M.

Instead of docking at Catbalogan, which was the first port ocall, the vessel proceeded direct to Tacloban at around 9:00P.M. of July 10, 1972. Private respondents had no recourse but todisembark and board a ferryboat to Catbalogan.Hence, this suit for damages for breach of contract of carriage.

TC& CA: NO FORTUITOUS EVENT. MECHANICAL DEFECTS ARENOT CONSIDERED CASO FORTUITO. Even granting arguendo tha

the engine failure was a fortuitous event, it accounted only forthe delay in departure. When the vessel finally left the port oCebuon July 10, 1972, there was no longer any force majeurethat justified by-passing a port of call. The vessel wascompletely repaired the following day after it was towed backto Cebu. Ordered Sweet Lines to pay PRs. MD = 175k to bedivided among them, ED = 30k, and AF = 5k.

ISSUE:Whether Sweet Lines is liable? YES.

HELD:REASON FOR BY-PASSING CATBALOGAN: (As admitted bypetitioner's General Manager) was to enable the vessel to catchup with its schedule for the next week. The record also discloses


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that there were 50 passengers for Tacloban compared to 20passengers for Catbalogan,so that the Catbalogan phase could bescrapped without too much loss for the company.Sweet Lines cannot rely on the conditions in small bold print atthe back of the ticket reading.The passenger's acceptance of this ticket shall be considered as an

acceptance of the following conditions:3. In case the vessel cannot continue or complete the trip for any

cause whatsoever, the carrier reserves the right to bring the

passenger to his/her destination at the expense of the carrier or to

cancel the ticket and refund the passenger the value of his/her

ticket;11. The sailing schedule of the vessel for which this ticket was

issued is subject to change without previous notice.

Even assuming that those conditions are squarely applicable tothe case at bar, petitioner did not comply with the same. It didnot cancel the ticket nor did it refund the value of the ticketsto private respondents. Besides, it was not the vessel's sailingschedule that was involved. Private respondents' complaint isdirected not at the delayed departure the next day but at the by-passing of Catbalogan, their destination. Had petitioner notifiedthem previously, and offered to bring them to their destination atits expense, or refunded the value of the tickets purchased,perhaps, this controversy would not have arisen.

The governing provisions are found in the Code of Commerce andread as follows:

ART. 614. A captain who, having agreed to make a voyage, fails tofulfill his undertaking, without being prevented by fortuitousevent or force majeure, shall indemnify all the losses which hisfailure may cause, without prejudice to criminal penalties whichmay be proper.

ART. 698. In case of interruption of a voyage already begun, thepassengers shall only be obliged to pay the fare in proportion tothe distance covered, without right to recover damages if theinterruption is due to fortuitous event or force majeure, but witha right to indemnity, if the interruption should have been causedby the captain exclusively. If the interruption should be caused bythe disability of the vessel, and the passenger should agree towait for her repairs, he may not be required to pay any increasedfare of passage, but his living expenses during the delay shall befor his own account.

The crucial factorthen is the existence of a fortuitous event orforce majeure. Without it, the right to damages and indemnityexists against a captain who fails to fulfill his undertaking orwhere the interruption has been caused by the captainexclusively.

The voyage to Catbalogan was "interrupted" by the captainupon instruction of management. The "interruption" was not

due to fortuitous event or for majeure nor to disability of thevessel. Having been caused by the captain upon instruction ofmanagement, the passengers' right to indemnity is evident.The owner of a vessel and the ship agent shall be civillyliable for the acts of the captain.

Under Article 2220 of the Civil Code, moral damages are justlydue in breaches of contract where the defendant actedfraudulently or in bad faith.

TC & CA found that there was bad faith on the part of petitionerin that:- did not give notice to plaintiffs- appellees as to the change ofschedule of the vessel;

- despite knowing fully well that it would take no less thanfifteen hoursto effect the repairs of the damaged engine, SweetLines instead made announcement of assurance that the vessewould leave within a short period of time, and when PRs wantedto leave the port and gave up the trip, Sweet Lines employe eswould come and say, 'we are leaving, already.'- did not offer to refund plaintiffs-appellees' tickets nor providethem with transportation from Tacloban City to Catbalogan.Under the circumstances, however, award of MD excessive andaccordingly reduce them to 3k, respectively, for each of theprivate respondents.

The total award of AF of 5k is in order.

Insofar as ED are concerned, although there was bad faith, theCourt is not inclined to grant them in addition to moral damagesExemplary damages cannot be recovered as a matter of right; theCourt decides whether or not they should be adjudicated. Theobjective to meet its schedule might have been called for, butpetitioner should have taken the necessary steps for theprotection of its passengers under its contract of carriage.

DISPOSITIVE PORTION: ACCORDINGLY, the judgment appealedfrom is hereby modified in that petitioner is hereby sentenced toindemnify private respondents in the sum of P3,000.00 each

without interest, plus P1,250.00, each, by way of att/rney's feesand litigation expenses. Costs against petitioner.


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6. INTER-ORIEN MARITIME ENTERPRISES VS NLRC KIKOY5. Inter-orient v. NLRCDoctrine:

Compagnie de Commerce vs. Hamburg is instructive andwherein the Court recognized the discretionary authority of themaster of a vessel and his right to exercise his best judgment,with respect to navigating the vessel he commands

The captain has control of all departments of service in thevessel, and reasonable discretion as to its navigation

A captain commonly performs three (3) distinct roles: (1) he isa general agent of the shipowner; (2) he is also commander andtechnical director of the vessel; and (3) he is a representative ofthe country under whose flag he navigates. The most importantrole has to do with the operation and preservation of the vesselduring its voyage.Facts:

CAPTAIN TAYONG was employed by TRENDA WORLDSHIPPING through INTERORIENTMARITIME ENTERPRISES for 1 year. On 1989, he assumedcommand of the vessel of TRENDA with instructions to sail toSOUTH AFRICA to load 120k tons of coal.

TAYONG encountered problems during the voyage, such as thelack of oxygene and acetylene. These were necessary for thewelding repair of the turbo-charger and the economizer. He wasnot immediately given these supplies and instead ordered to shut

down the economizer, and instead use the auxiliary boilers.TAYONG decided to not immediately proceed to S.A. until thesupplies were eventually delivered.

The supplies eventually arrived after 7 hours and the ship wasable to proceed to S.A.However, upon arrival, TAYONG was relieved of his position andthereafter repatriated for not following orders. He then filed acomplaint for illegal dismissal with the POEA. ThePOEA granted his claim and awarded him his unpaid salary.Issue: Was there sufficient basis to dismiss TAYONG? No.

The captain of a vessel is a confidential and managerialemployee within the meaning ofthe above doctrine. Hence, he cannot be dismissed without justcause.

Moreover, a master or captain, for purposes of maritimecommerce, is one who has command of a vessel. A captaincommonly performs three (3) distinct roles: (1) he is a generalagent of the shipowner; (2) he is also commander and technicaldirector of thevessel; and (3) he is a representative of the country under whoseflag he navigates. Themost important role has to do with the operation andpreservation of the vessel during itsvoyage.

In this case, the captain was dismissed without due process.More importantly, there is nobasis for terminating him. A captain must be accorded areasonable measure ofdiscretionary authority to decide to promote the safety of the

ship and its crew. In this case,TAYONG was convinced that the ship should not sail unless theeconomizer and tubrochargerwere completely repaired. There being no basis to terminate him,it follows that hewas illegally dismissed3IMPORTANT: A "turbo-charger" is a centrifugal blower driven byexhaust gas turbines andused to supercharge an engine, or to supply a charge to the intakeof an internal-combustionengine at a pressure higher than that of the surroundingatmosphere (Webster's New WorldDictionary (1974), p. 1532.

An "economizer" is a device in which water is heated preliminaryto entering the boiler proper.The heat which was used in raising the temperature of the watercontained in the boiler to boilingpoint is utilized, instead of being wasted, for the purpose ofraising the water in the economizerto a high temperature before it enters the boiler. An increase inthe feed water temperature willraise boiler efficiency. (Ithaca Traction Corp. vs. Traveler'sIndemnity Co., 177 N.Y.S. 753[1919]).

G.R. No. 115286 August 11, 1994INTER-ORIENT MARITIME ENTERPRISES, INC., SEA HORSE SHIPINC. and TRENDA WORLD SHIPPING (MANILA), INC., petitioners

vs.NATIONAL LABOR RELATIONS COMMISSION and RIZALINO

D. TAYONG, respondents.Sorry mahaba yung facts, ang daming technical shiz kasi. Pero tocut the facts short, Si Toyong yung captain ng ship(Biyahe is fromhong kong South Africa), nagkaproblema yung ship at tumirikduring the voyage, nagrequest siya ng supplies to repair the shiplate dumating yung supplies. Sinabihan siya na pwede namandaw bumiyahe yung ship, pero di pumayag si tayong kasi baka dkayanin. So ayun pag dating niya sa destination, tayong got fireddahil daw sa delay di nagbayad yung charterer. Hence the Illega

dismissal case.Doctrine: a ship's captain must be accorded a reasonablemeasure of discretionary authority to decide what the safety othe ship and of its crew and cargo specifically requires on astipulated ocean voyage. The captain is held responsible, andproperly so, for such safety. He is right there on the vessel, incommand of it and (it must be presumed) knowledgeable as tothe specific requirements of seaworthiness and the particularrisks and perils of the voyage he is to embark upon. Theapplicable principle is that the captain has control of aldepartments of service in the vessel, and reasonable discretion asto its navigation.The captain of a vessel is a confidential and managerial employeewithin the meaning of the above doctrine. A master or captain

for purposes of maritime commerce, is one who has command oa vessel. A captain commonly performs three (3) distinct roles(1) he is a general agent of the shipowner; (2) he is alsocommander and technical director of the vessel; and (3) he is arepresentative of the country under whose flag he navigates.

Facts:- Private respondent Captain Rizalino Tayong, a licensed Master

Mariner with experience in commanding ocean-going vesselswas employed on 6 July 1989 by petitioners Trenda WorldShipping (Manila), Inc. and Sea Horse Ship Management, Incthrough petitioner Inter-Orient Maritime Enterprises, Inc. asMaster of the vessel M/VOceanic Mindoro, for a period of one (1)year, as evidenced by an employment contract.

- On 15 July 1989, Captain Tayong assumed command opetitioners' vessel at the port of Hongkong. His instructions were

to replenish bunker and diesel fuel, to sail forthwith to RichardBay, South Africa, and there to load 120,000 metric tons of coal.

- On 16 July 1989, while at the Port of Hongkong and in the processof unloading cargo, Captain Tayong received a weather reportthat a storm code-named "Gordon"would shortly hit HongkongPrecautionary measures were taken to secure the safety of thevessel, as well as its crew, considering that the vessel's turbocharger was leaking and the vessel was fourteen 14 years old.

- Tayong followed-up the requisition by the former captain of theOceanic Mindorofor supplies of oxygen and acetylene, necessaryfor the welding-repair of the turbo-charger and the economizer.

This requisition had been made upon request of the ChieEngineer of the vessel and had been approved by the shipowner.


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the vessel sailed from Hong Kong for Singapore. In the Master'ssailing message, Captain Tayong reported a water leak from M.E.Turbo Charger No. 2 Exhaust gas casing. He was subsequentlyinstructed to blank off the cooling water and maintain reducedRPM unless authorized by the owners.

while the vessel was en route to Singapore, Captain Tayongreported that the vessel had stopped in mid-ocean for six (6)hours and forty-five (45) minutesdue to a leaking economizer.He was instructed to shut down the economizer and use theauxiliary boiler instead.

On 31 July 1989 at 0607 hrs., the vessel arrived at the port ofSingapore. 5 The Chief Engineer reminded Captain Tayong thatthe oxygen and acetylene supplies had not been delivered. 6Captain Tayong inquired from the ship's agent in Singapore aboutthe supplies. The ship agent stated that these could only bedelivered at 0800 hours on August 1, 1989 as the stores hadclosed.

Captain Tayong called the shipowner, Sea Horse ShipManagement, Ltd., in London and informed them that thedeparture of the vessel for South Africa may be affected becauseof the delay in the delivery of the supplies.

Sea Horse advised Captain Tayong to contact its TechnicalDirector, Mr. Clark, who was in Tokyo and who could provide asolution for the supply of said oxygen and acetylene.

On the night of 31 July 1989, Mr. Clark received a call from

Captain Tayong informing him that the vessel cannot sail withoutthe oxygen and acetylene for safety reasons due to the problemswith the turbo charger and economizer. Mr. Clark responded thatby shutting off the water to the turbo chargers and using theauxiliary boiler, there should be no further problems. Accordingto Mr. Clark, Captain Tayong agreed with him that the vesselcould sail as scheduled on 0100 hours on 1 August 1989 forSouth Africa.

According to Captain Tayong, however, he communicated to SeaHorse his reservations regarding proceeding to South Africawithout the requested supplies,11and was advised by Sea Horseto wait for the supplies at 0800 hrs. of 1 August 1989, which SeaHorse had arranged to be delivered on board the OceanicMindoro. 12 At 0800 hours on 1 August 1989, the requisitionedsupplies were delivered and Captain Tayong immediately sailedfor Richard Bay.When the vessel arrived at the port of Richard Bay, South Africaon 16 August 1989, Captain Tayong was instructed to turn-overhis post to the new captain. He was thereafter repatriated to thePhilippines, after serving petitioners for a little more than twoweeks.13He was not informed of the charges against him.

Tayong instituted a complaint for illegal dismissal before thePhilippine Overseas Employment Administration ("POEA"),claiming his unpaid salary for the unexpired portion of thewritten employment contract, plus attorney's fees.Petitioners, in their answer to the complaint, denied that they hadillegally dismissed Captain Tayong. Petitioners alleged that hehad refused to sail immediately to South Africa to the prejudiceand damage of petitioners. According to petitioners, as a direct

result of Captain Tayong's delay, petitioners' vessel was placed"off-hire" by the charterers for twelve (12) hours. This meantthat the charterers refused to pay the charter hire orcompensation corresponding to twelve (12) hours, amounting toUS$15,500.00, due to time lost in the voyage. They stated thatthey had dismissed private respondent for loss of trust andconfidence.POEA dismissed Captain Tayong's complaint and held that there

was valid cause for his untimely repatriation. The decision of thePOEA placed considerable weight on petitioners' assertion thatall the time lost as a result of the delay was caused by CaptainTayong and that his concern for the oxygen and acetylenewasnot legitimate as these supplies were not necessary orindispensable for running the vessel.

- National Labor Relations Commission ("NLRC") reversed and setaside the decision of the POEA. The NLRC found that CaptainTayong had not been afforded an opportunity to be heard andthat no substantial evidence was adduced to establish the basisfor petitioners' loss of trust or confidence in the Captain. TheNLRC declared that he had only acted in accordance with hisduties to maintain the seaworthiness of the vessel and to insurethe safety of the ship and the crew.

Issue/s:Was the NLRC correct in affirming the POEA decision? YES

Held:- It is well settled in this jurisdiction that confidential and

managerial employees cannot be arbitrarily dismissed at anytime, and without cause as reasonably established in anappropriate investigation.15Such employees, too, are entitled tosecurity of tenure, fair standards of employment and theprotection of labor laws.

- The captain of a vessel is a confidential and managerial employeewithin the meaning of the above doctrine. A master or captainfor purposes of maritime commerce, is one who has command oa vessel. A captain commonly performs three (3) distinct roles(1) he is a general agent of the shipowner; (2) he is alsocommander and technical director of the vessel; and (3) he is a

representative of the country under whose flag he navigates. 16Othese roles, by far the most important is the role performed bythe captain as commander of the vessel; for such role (whichto our mind, is analogous to that of "Chief Executive Officer[CEO] of a present-day corporate enterprise) has to do with theoperation and preservation of the vessel during its voyage andthe protection of the passengers (if any) and crew and cargo. Inhis role as general agent of the shipowner, the captain hasauthority to sign bills of lading, carry goods aboard and deal withthe freight earned, agree upon rates and decide whether to takecargo. The ship captain, as agent of the shipowner, has legaauthority to enter into contracts with respect to the vessel andthe trading of the vessel, subject to applicable limitationsestablished by statute, contract or instructions and regulations othe shipowner. 17 To the captain is committed the governancecare and management of the vessel. 18 Clearly, the captain isvested with both management and fiduciary functions.

- It is plain from the records of the present petition that CaptainTayong was denied any opportunity to defend himselfPetitioners curtly dismissed him from his command andsummarily ordered his repatriation to the Philippines withoutinforming him of the charge or charges levelled against him, andmuch less giving him a chance to refute any such charge.

- a ship's captain must be accorded a reasonable measure ofdiscretionary authority to decide what the safety of the shipand of its crew and cargo specifically requires on astipulated ocean voyage. The captain is held responsible, andproperly so, for such safety. He is right there on the vessel, incommand of it and (it must be presumed) knowledgeable as

to the specific requirements of seaworthiness and theparticular risks and perils of the voyage he is to embarkupon. The applicable principle is that the captain has controof all departments of service in the vessel, and reasonablediscretion as to its navigation.

Dispositive: ACCORDINGLY, petitioners having failed to showgrave abuse of discretion amounting to loss or excess ofjurisdiction on the part of the NLRC in rendering its assaileddecision, the Petition for Certiorari is hereby DISMISSED, for lackof merit. Costs against petitioners.


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7. TABACALERA INSURANCE CO VS NORTH FRONTSHIPPING JEROME6. Tabacalera Insurance v. North FrontDoctrine:

A charter party between a shipper and a carrier does notconvert the carrier into a privatecarrier.

Failure on the part of the consignee to start unloadingoperations upon notice constitutescontributory negligenceFacts:

On August 1990, 20k sacks of corn grains were shipped onboard NORTH FRONT 777, aship owned by NORTH FRONT SHIPPING. It was consigned toREPUBLIC FLOURMILLS, and insured with TABACALERA insurance.

When the cargo reached its destination, it was found that themerchandise was alreadymoldy and deteriorating. It was found that the goods weredamaged due to contact withSALT WATER. The insurers paid REPUBLIC FLOUR the value ofthe goods and thereaftersued NORTH FRONT SHIPPING for damages.o The TC dismissed the complaint on the ground that the contractentered into was

a charter-party agreement. As such, only ordinary diligence wasrequired ofNORTH FRONT. The inspection of the barge by the shipper andtherepresentatives of the shipping company before actual loading,coupled with the Permit to Sail issued by the Coast Guard,sufficed to meet the degree ofdiligence required of the carrier.o CA affirmed but found that NORTH FRONT was a commoncarrier and itcomplied with its duty to exercise extraordinary diligence.Issue: Was NORTH FRONT a COMMON CARRIER? Yes.NORTH FRONT is a COMMON CARRIER

The charter-party agreement between North Front ShippingServices, Inc., and RepublicFlour Mills Corporation did not in any way convert the commoncarrier into a private carrierNorth Front Shipping Services, Inc., is a corporation engaged inthe business oftransporting cargo and offers its services indiscriminately to thepublic. It is without doubt acommon carrier.As such it is required to observeextraordinary diligence in itsvigilance over the goods it transports.Extraordinary diligence was NOT exercised

North Front Shipping Services, Inc., proved that the vessel wasinspected prior to actualloading by representatives of the shipper and was found fit totake a load of corn grains..

However, having been in the service since 1968, the master of thevessel should haveknown at the outset that corn grains that were farm wet andnot properly dried wouldeventually deteriorate when stored in sealed and hotcompartments as in hatches ofa ship.

With this knowledge, the master of the vessel and his crewshould have undertakenprecautionary measures to avoid or lessen the cargo'spossible deterioration as theywere presumed knowledgeable about the nature of suchcargo. But none of suchmeasures was taken.

However, the consignee REPUBLIC FLOUR is also guilty ofcontributory negligence.It was seasonably notified of the arrival of the goods but itdid not immediately startunloading operations. This led to the further deterioration ofthe goods in question.

Insurers win.

DOCTRINE: A 'charter-party' is defined as a contract by which anentire ship, or some principal part thereof, is let by the owner toanother person for a specified time or use; a contract ofaffreightment by which the owner of a ship or other vessel letsthe whole or a part of her to a merchant or other person for theconveyance of goods, on a particular voyage, in consideration ofthe payment of freight x x x x Contract of affreightment mayeither be time charter, wherein the vessel is leased to thecharterer for a fixed period of time, or voyage charter, whereinthe ship is leased for a single voyage. In both cases, the charterparty provides for the hire of the vessel only, either for adeterminate period of time or for a single or consecutive voyagethe ship owner to supply the ship's store, pay for the wages of themaster of the crew, and defray the expenses for the maintenanceof the ship.FACTSsacks of corn grains valued at P3,500,640.00 were shipped on

board North Front 777The cargo was consigned to Republic Flour Mills CorporationIt was insured with the herein petitionersThe vessel was inspected prior to actual loading byrepresentatives of the shipper and was found fit to carry themerchandiseThe cargo was covered with tarpaulins and wooden boards.The hatches were sealed and could only be opened byrepresentatives of Republic Flour Mills Corporation.

The vessel left Cagayan de Oro City on 2 August 1990 and arrivedManila on 16 August 1990. Republic Flour Mills Corporation wasadvised of its arrival but it did not immediately commence theunloading operationsThere were days when unloading had to be stopped due tovariable weather conditions and sometimes for no apparenreason at all. When the cargo was eventually unloaded there waa shortage of 26.333 metric tons. The remaining merchandise was already moldy, rancid anddeteriorating. The unloading operations were completed on 5September 1990 or twenty (20) days after the arrival of the bargeat the wharf of Republic Flour Mills Corporation in Pasig City.

Precision Analytical Services, Inc., was hired to examine the corngrains and determine the cause of deterioration A Certificate oAnalysis was issued indicating that the corn grains had 18.56%moisture content and the wetting was due to contact with saltwater. The mold growth was only incipient and not sufficient tomake the corn grains toxic and unfit for consumption. In fact the

mold growth could still be arrested by drying. Republic FlouMills Corporation rejected the entire cargo and formallydemanded from North Front Shipping Services, Inc., payment forthe damages suffered by it. The demands however wereunheeded. The insurance companies were perforce obliged topay Republic Flour Mills Corporation P2,189,433.40.insurance companies lodged a complaint for damages againsNorth Front Shipping Services, Inc., claiming that the loss wasexclusively attributable to the fault and negligence of the carrier.The Marine Cargo Adjusters found:

found cracks in the bodega of the barge did not notice any seals in the hatches tarpaulins were not brand new as there were patches


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bulkhead of the barge was rusty.

North Front Shipping Services, Inc defenses: Captain Solomon Villanueva, master of the vessel,reiterated that the barge was inspected prior to the actualloading and was found adequate and seaworthy Was issued a permit to sail by the Coast Guard. tarpaulins were doubled and brand new and thehatches were properly sealed. did not encounter big waves corn grains were farm wet and not properly dried whenloaded.

court below dismissed the complaintIt ruled that the contract entered into between North FrontShipping Services, Inc., and Republic Flour Mills Corporation wasa charter-party agreement. As such, only ordinary diligence inthe care of goods was required of North Front Shipping Services,Inc.Court of Appeals ruled that as a common carrier required toobserve a higher degree of diligence North Front 777satisfactorily complied with all the requirements hence wasissued a Permit to Sail after proper inspection. Consequently, thecomplaint was dismissed and the motion for reconsiderationrejected.

So dismissed parinISSUE: WON NORTH front 777 should be considered a privatecarrier due to the charter agreement? NOOr WON the dismissal was proper? NOHELD: WHEREFORE, the Decision of the Court of Appeals of 22December 1994 and its Resolution of 16 February 1995 areREVERSED and SET ASIDE. Respondent North Front ShippingServices, Inc., is ordered to pay petitioners Tabacalera InsuranceCo., Prudential Guarantee & Assurance, Inc., and New ZealandInsurance Co. Ltd., P1,313,660.00 which is 60% of the amountpaid by the insurance companies to Republic Flour MillsCorporation, plus interest at the rate of 12% per annum from thetime this judgment becomes final until full payment. SOORDERED.RATIO: The charter-party agreement between North FrontShipping Services, Inc., and Republic Flour Mills Corporation didnot in any way convert the common carrier into a private carrierA 'charter-party' is defined as a contract by which an entire ship,or some principal part thereof, is let by the owner to anotherperson for a specified time or use; a contract of affreightmentby which the owner of a ship or other vessel lets the whole or apart of her to a merchant or other person for the conveyance ofgoods, on a particular voyage, in consideration of the payment offreight x x x x Contract of affreightment may either be timecharter, wherein the vessel is leased to the charterer for a fixedperiod of time, or voyage charter, wherein the ship is leased for asingle voyage. In both cases, the charter-party provides for thehire of the vessel only, either for a determinate period of time orfor a single or consecutive voyage, the ship owner to supply the

ship's store, pay for the wages of the master of the crew, anddefray the expenses for the maintenance of the ship.Upon the other hand, the term 'common or public carrier' isdefined in Art. 1732 of the Civil Code. The definition extends tocarriers either by land, air or water which hold themselves out asready to engage in carrying goods or transporting passengers orboth for compensation as a public employment and not as acasual occupation x x x xIt is therefore imperative that a public carrier shall remain assuch, notwithstanding the charter of the whole or portion of avessel by one or more persons, provided the charter is limited tothe ship only, as in the case of a time-charter or voyage-charterNorth Front Shipping Services, Inc., proved that the vessel wasinspected prior to actual loading by representatives of the

shipper and was found fit to take a load of corn grains. Theywere also issued Permit to Sail by the Coast Guard. The masterof the vessel testified that the corn grains were farm wet whenloaded. However, this testimony was disproved by the clean bilof lading issued by North Front Shipping Services, Inc., which didnot contain a notation that the corn grains were wet andimproperly dried. Having been in the service since 1968, themaster of the vessel would have known at the outset that corngrains that were farm wet and not properly dried wouldeventually deteriorate when stored in sealed and hotcompartments as in hatches of a ship. Equipped with thisknowledge, the master of the vessel and his crew should haveundertaken precautionary measures to avoid or lessen thecargo's possible deterioration as they were presumedknowledgeable about the nature of such cargo. But none of suchmeasures was taken.the carrier failed to observe the required extraordinary diligencein the vigilance over the goods placed in its care. The proofspresented by North Front Shipping Services, Inc., wereinsufficient to rebut the prima facie presumption of privaterespondent's negligence, more so if we consider the evidenceadduced by petitioners.It is not denied by the insurance companies that the vessel wasindeed inspected before actual loading and that North Front 777was issued a Permit to Sail. They proved the fact of shipment and

its consequent loss or damage while in the actual possession ofthe carrier. Notably, the carrier failed to volunteer anyexplanation why there was spoilage and how it occurred. On theother hand, it was shown during the trial that the vessel hadrusty bulkheads and the wooden boards and tarpaulins boreheavy concentration of molds. The tarpaulins used were nonew, contrary to the claim of North Front Shipping Services, Inc.as there were already several patches on them, hence, making ithighly probable for water to enter.Laboratory analysis revealed that the corn grains werecontaminated with salt water. North Front Shipping ServicesInc., failed to rebut all these arguments.However, we cannot attribute the destruction, loss ordeterioration of the cargo solely to the carrier. We find theconsignee Republic Flour Mills Corporation guilty ocontributory negligence. It was seasonably notified of thearrival of the barge but did not immediately start the unloadingoperations. No explanation was proffered by the consignee as towhy there was a delay of six (6) days. Had the unloading beencommenced immediately the loss could have been completelyavoided or at least minimized. As testified to by the chemist whoanalyzed the corn samples, the mold growth was only at itsincipient stage and could still be arrested by drying. The corngrains were not yet toxic or unfit for consumption. For itscontributory negligence, Republic Flour Mills Corporation shouldshare at least 40% of the loss.[7]


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8. A. MAGSAYSAY VS AGAN GAB7. A. Magsaysay v. AganDoctrine:Requisites for gross/general averages:

(1) there must be a common danger.(2), that for the common safety part of the vessel or of the

cargo or both is sacrificeddeliberately.

(3), the ship and cargo are saved after the expenses anddamage caused.

(4), that the expenses or damages should have beenincurred or inflicted after takingproper legal steps and authorityFacts:

SS Antonio was owned and operated by A. MAGSAYSAY It wasbound for BATANES andAPARRI with general cargo belonging to different shippers (withAGAN among one ofthem)

When the vessel reached APARRI, the ship ran aground at themouth of the river due tothe shifting of sandbars. It had to be refloated by LuzonStevedoring for an agreed amount.The cargoes were eventually delivered to their owners, except forAGAN, who was the only

one who did not make a deposit to answer for its contribution tothe average.

THUS, A. MAGSAYSAY sued AGAN for his contribution to theaverage. AGAN argued thathe should not be held liable as the stranding of the vessel was dueto the negligence of theships master.Issue: Should a general average be allowed for floating a vesselthat was accidentiallystranded? In other words, should AGAN contribute to theaverage?

The law on averages is contained in the Code of Commerce.Under that law, averages areclassified into simple or particular and general or gross.

Generally speaking, simple or particular averages include allexpenses and damagescaused to the vessel or cargo which have not inured to thecommon benefit (Art. 809), andare, therefore, to be borne only by the owner of the propertygave rise to same (Art.810); while general or gross averages include "all the damagesand expenses which aredeliberately caused in order to save the vessel, its cargo, or bothat the same time, from areal and known risk" (Art. 811). Being for the common benefit,gross averages are to beborne by the owners of the articles saved (Art. 812).

In this case, the The requisites for general and gross averagesare as follows::

First, there must be a common danger. This means, that boththe ship and the cargo,after has been loaded, are subject to the same danger, whetherduring the voyage, or inthe port of loading or unloading; that the danger arises from theaccidents of the sea,dispositions of the authority, or faults of men, provided that thecircumstances producingthe peril should be ascertained and imminent or may rationallybe said to be certain andimminent. This last requirement exclude measures undertakenagainst a distant peril.Second, that for the common safety part of the vessel or ofthe cargo or both is

sacrificed deliberately.Third, that from the expenses or damages caused follows thesuccessful saving ofthe vessel and cargo.Fourth, that the expenses or damages should have beenincurred or inflicted aftertaking proper legal steps and authority

In this case, the 1st requisite was not fulfilled as the evidencedoes not show that theexpenses sought to be recovered were incurred to save the ship.The vessel ran agroundin fine weather and merely at the mouth of the river, which wasvery shallow. It is the deliverance from an immediate, impendingperil, by a common sacrifice, that constitutes theessence of general average. In the present case there is noproof that the vessel hadto be put afloat to save it from imminent danger. What doesappear from the testimonyof plaintiff's manager is that the vessel had to be salvaged inorder to enable it "to proceedto its port of destination." But as was said in the case just cited itis the safety of theproperty, and not of the voyage, which constitutes the truefoundation of the generalaverage

The 2nd requisite was also not fulfilled as the cargo did nothave to be sacrificed. It couldvebeen unloaded by the owners if they were required to do so.

With respect to the third requisite, the salvage operation, was asuccess. But as thesacrifice was for the benefit of the vessel to enable it toproceed to destination and not for the purpose of saving the cargo, the cargo ownersare not in law bound tocontribute to the expenses.

The 4th requisite has not been proved, for it does not appearthat the expenses here inquestion were incurred after following the procedure laid downin article 813 et seq.

In conclusionA. MAGSAYSAY has not made out a case forgeneral average, with theresult that its claim for contribution against the defendantcannot be granted

IF you are a shipper, and your goods are jettisoned, why doyou want a generalaverage loss? General average loss is a rule of equity. So thatothers (other shipper andship owner) will pay you for your loss

G.R. No. L-6393 January 31, 1955A. MAGSAYSAY INC., plaintiff-appellee,vs.ANASTACIO AGAN, defendant-appellant.The S S "San Antonio", vessel owned and operated by plaintiff, left

Manila on October 6, 1949, bound for Basco, Batanes, vis AparriCagayan, with general cargo belonging to different shippersamong them the defendant. The vessel reached Aparri on the10th of that month, and after a day's stopover in that port,weighed anchor to proceed to Basco. But while still in port, it ranaground at the mouth of the Cagayan river, and, attempts torefloat it under its own power having failed, plaintiff have itrefloated by the Luzon Stevedoring Co. at an agreedcompensation. Once afloat the vessel returned to Manila to refueand then proceeded to Basco, the port of destination. There thecargoes were delivered to their respective owners or consigneeswho, with the exception of defendant, made a deposit or signed abond to answer for their contribution to the average.


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On the theory that the expenses incurred in floating the vesselconstitute general average to which both ship and cargo shouldcontribute, plaintiff brought the present action in the Court ofFirst Instance of Manila to make defendant pay his contribution,which, as determined by the average adjuster, amounts toP841.40. Defendant, in his answer, denies liability to his amount,alleging, among other things, that the stranding of the vessel wasdue to the fault, negligence and lack of skill of its master, that theexpenses incurred in putting it afloat did not constitute generalaverage.TC ruled in favor of plaintiff Magsaysay inc so defendant Aganappealed to SC.ISSUE: should defendant contribute?

The law on averages is contained in the Code of Commerce.Under that law, averages are classified into simple or particularand general or gross. Generally speaking, simple or particularaverages include all expenses and damages caused to the vesselor cargo which have not inured to the common benefit (Art. 809),and are, therefore, to be borne only by the owner of the propertygave rise to same (Art. 810); while general or gross averagesinclude "all the damages and expenses which are deliberatelycaused in order to save the vessel, its cargo, or both at the sametime, from a real and known risk" (Art. 811). Being for thecommon benefit, gross averages are to be borne by the owners of

the articles saved (Art. 812).In classifying averages into simple o particular and general orgross and defining each class, the Code (Art. 809 and 811) at thesame time enumerates certain specific cases as coming speciallyunder one or the other denomination. Going over the specificcases enumerated we find that, while the expenses incurred inputting plaintiff's vessel afloat may well come under number 2 ofarticle 809-which refers to expenses suffered by the vessel "byreason of an accident of the sea of the force majuere" andshould therefore be classified as particular average, the saidexpenses do not fit into any of the specific cases of generalaverage enumerated in article 811. No. 6 of this article doesmention "expenses caused in order to float a vessel," but itspecifically refers to "a vessel intentionally stranded for thepurpose of saving it" and would have no application where, as inthe present case, the stranding was not intentional.olentino, in his commentaries on the Code of Commerce, gives thefollowing requisites for general average:First, there must be a common danger. This means, that both theship and the cargo, after has been loaded, are subject to the samedanger, whether during the voyage, or in the port of loading orunloading; that the danger arises from the accidents of the sea,dispositions of the authority, or faults of men, provided that thecircumstances producing the peril should be ascertained andimminent or may rationally be said to be certain and imminent.This last requirement exclude measures undertaken against adistant peril.Second, that for the common safety part of the vessel or of thecargo or both is sacrificed deliberately.

Third, that from the expenses or damages caused follows thesuccessful saving of the vessel and cargo.Fourth, that the expenses or damages should have been incurredor inflicted after taking proper legal steps and authority. (Vol. 1,7th ed., p. 155.)With respect to the first requisite, the evidence does not disclosethat the expenses sought to be recovered from defendant wereincurred to save vessel and cargo from a common danger. Thevessel ran aground in fine weather inside the port at the mouth ofa river, a place described as "very shallow". It would thus appearthat vessel and cargo were at the time in no imminent danger or adanger which might "rationally be sought to be certain andimminent." It is, of course, conceivable that, if left indefinitely atthe mercy of the elements, they would run the risk of being

destroyed. But as stated at the above quotation, "this lasrequirement excludes measures undertaken against a distantperil." It is the deliverance from an immediate, impending perilby a common sacrifice, that constitutes the essence of generaaverage. (The Columbian Insurance Company of Alexandria vsAshby & Stribling et al., 13 Peters 331; 10 L. Ed., 186). In thepresent case there is no proof that the vessel had to be put afloatto save it from imminent danger. What does appear from thetestimony of plaintiff's manager is that the vessel had to besalvaged in order to enable it "to proceed to its port odestination." But as was said in the case just cited it is the safetyof the property, and not of the voyage, which constitutes the truefoundation of the general average.Also,the cargo, were not in imminent peril. The cargo couldwithout need of expensive salvage operation, have been unloadedby the owners if they had been required to do so.The final requisite has not been proved, for it does not appearthat the expenses here in question were incurred after followingthe procedure laid down in article 813 et seq.There was no average; dEfendant need not contribute


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9. STANDARD OIL CO VS CASTELO NIKKI8. Standard Oil v. CasteloDoctrine:

the captain is primarily the representative of the owner; andarticle 586 of the Code ofCommerce expressly declares that both the owner of thevessel and the charterer,shall be civilly liable for the acts of the master and the ownerof the vessel is civillyliable for the acts of the captain; and he can only escape fromthis civil liability byabandoning his property in the ship and any freight that hemay have earned on thevoyage

In this case, Sir will ask again for the requisites of general

average. What happens if thereis no general average loss? Then it will be a simple/particularaverage. Its a fancy way ofsaying that the shipper will bear his own loss.Facts:

CASTELO (owner) leased his interisland steamer Batanguenoto CHUMBUQUE(charterer) for use in the conveying of cargo within the PH. Inthis contract, it was stipulatedthat the officers and crew of the Batangueo should be supplied

by the owner, and that thecharterer should have no other control over the captain,pilot, and engineers than tospecify the voyages that they should make and to require theowner to discipline orrelieve them as soon as possible in case they should fail toperform the dutiesrespectively assigned to them.

The boat was hired by STANDARD OIL to deliver petroleum toSorsogon. The petrol wasplaced on the deck of the ship and not on the hold. During itsvoyage, the boat encountereda storm. The captain was forced to jettison the petroleum. Thus,STANDARD OIL suedCASTELO, the shipowner. CASTELO argues that the loss was aparticular loss that shouldbe borne solely by STANDARD OIL.Issue: Is the loss of the petrol a particular loss or a generalaverage loss? General Average

Petrol is not allowed to be stored in the hold. Hence, it is legalto carry such product on theships deck. Since it was legal to carry such petrol on the deck of

the ship and the captainhad to jettison the goods to save the ship and the other goodsloaded on board, it followsthat the loss of the petrol is a GENERAL AVERAGE.

HENCE, STANDARD OIL may recover from the OWNER of theship (also against thecaptain). This is because it is universally recognized that the

captain is primarily therepresentative of the owner; and article 586 of the Code ofCommerce expresslydeclares that both the owner of the vessel and the charterer,shall be civilly liable forthe acts of the master and the owner of the vessel is civillyliable for the acts of thecaptain; and he can only escape from this civil liability byabandoning his property inthe ship and any freight that he may have earned on thevoyage

Moreover, the captain is required to take the necessary steps toeffect the adjustment,

liquidation, and distribution of the general average. In this case,the captain of the vesseldid not take those steps; consequently, the failure of the captainto take those steps gaverise to the shipowners liability.

Shipowner ordered to contribute. Shipowner loses.


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10. PHIL. HOME ASSURANCE CORP VS CA EM9. Phil Home Assurance v. CA, Eastern ShippingDoctrine:

Where the formalities prescribed under Articles 813 and 814 ofthe Code of Commerce inorder to incur the expenses and cause the damage correspondingto gross average werenot complied with, the carrier cannot claim for contribution fromthe consignees foradditional freight and salvage charges

Fire is generally not a fortuitous eventFacts:

While in KOBE, JAPAN, Eastern Shipping (ESLI) loaded to itship engine parts to WILLIAMLINES, ammonium chloride to ORCAs COMPANY, glue consigned

to PAN ORIENTAL andgarments consigned to DING VELAYO.

While the vessel was off OKINAWA, JAPAN, the acetylenecylinder in the accommodationarea of the ship exploded and this explosion set fire to the wholeship. As a result, themaster and crew had to abandon the ship. The cargoes of theconsignees were saved andthey were subsequently charged for additional freight andsalvage costs. These charges

were all paid by PHAC, the insurer of all the consigneesPHAC in turn sued ESLI, alleging that the money it paid to the

consignees were actuallydamages caused by the fault and negligence of ESLI. ESLI arguedthat the fire was due toa fortuitous event. The complaint was dismissed by the RTC onthe ground of fortuitousevent. Further, it added that the expenses incurred in saving thecargo were consideredgeneral average so the consignees must contribute. CA affirmed.Issue: Was the fire a fortuitous event? NO Was the loss a generalaverage? NO

There is sufficient evidence to show that that the cylindercaught fire because of thefault/negligence of ESLI, its master and its crew. The cylindershould not have been nearthe engine room as the heat generated therefrom could cause anexplosion. It followstherefore that the loss was not caused by a fortuitous event.

As a rule, general or gross averages include all damagesand expenses which aredeliberately caused in order to save the vessel, its cargo, orboth at the same time,from a real and known risk (Art. 811)

While the instant case may technically fall within the purviewof Art 811, the formalitiesprescribed under Articles 813 1and 814 of the Code ofCommerce in order to incurthe expenses and cause the damage corresponding to gross

average were notcomplied with. Consequently, ESLI's claim for contributionfrom the consignees ofthe cargo at the time of the occurrence of the average mustbe denied.

It follows therefore that the cargo consignees cannot be madeliable to the carrier foradditional freight and salvage charges. Consequently, carriermust refund to the insurer theamount it paid under protest for additional freight and salvagecharges in behalf of theconsignees. Carrier loses.DOCTRINE:

Where the formalities prescribed under Articles 813 and 814 ofthe Code of Commerce in order to incur the expenses and causethe damage corresponding to gross average were not compliedwith, the carrier cannot claim for contribution from theconsignees for additional freight and salvage charges.Fire is generally not a fortuitous event.FACTS:Eastern Shipping Lines, Inc. (ESLI) loaded on board SS EasternExplorer in Kobe, Japan, the following shipment for carriage toManila and Cebu, freight pre-paid and in good order andcondition, viz: (a) two (2) boxes internal combustion engineparts, consigned to William Lines, Inc. under Bill of Lading042283; (b) ten (10) metric tons (334 bags) ammonium chlorideconsigned to Orcas Company under Bill of Lading KCE -12; (ctwo hundred (200) bags Glue 300, consigned to Pan OrientaMatch Company under Bill of Lading KCE-8; and (d) garmentsconsigned to Ding Velayo under Bills of Lading Nos. KMA-73 andKMA-74. While the vessel was off Okinawa, Japan, a small flamewas detected on the acetylene cylinder located in theaccommodation area near the engine room on the main decklevel. As the crew was trying to extinguish the fire, the acetylenecylinder suddenly exploded sending a flash of flame throughoutthe accommodation area, thus causing death and severe injuriesto the crew and instantly setting fire to the whole superstructureof the vessel. The incident forced the master and the crew to

abandon the ship. Thereafter, SS Eastern Explorer was found tobe a constructive total loss and its voyage was declaredabandoned. Several hours later, a tugboat under the control ofFaked Salvage Co. arrived near the vessel and commenced to towthe vessel for the port of Naha, Japan. Fire fighting operationswere again conducted at the said port. After the fire wasextinguished, the cargoes which were saved were loaded toanother vessel for delivery to their original ports of destinationESLI charged the consignees several amounts corresponding toadditional freight and salvage charges, as follows: (a) for thegoods covered by Bill of Lading 042283, ESLI charged theconsignee the sum of P1,927.65, representing salvage chargesassessed against the goods; (b) for the goods covered by Bill oLading KCE-12, ESLI charged the consignee the sum of P2,980.64for additional freight and P826.14 for salvage charges against thegoods; (c) for the goods covered by Bill of Lading KCE-8, ESLIcharged the consignee the sum of P3,292.26 for additional freightand P4,130.68 for salvage charges against the goods; and (d) forthe goods under Bills of Lading KMA-73 and KMA-74, ESLIcharged the consignee the sum of P8,337.06 for salvage chargesagainst the goods. The charges were all paid Philippine HomeAssurance Corporation (PHAS) under protest for and in behalf othe consignees.PHAC, as subrogee of the consignees, thereafter filed a complainbefore the RTC of Manila, Branch 39, against ESLI to recover thesum paid under protest on the ground that the same wereactually damages directly brought about by the fault, negligenceillegal act and/or breach of contract of ESLI.The trial court dismissed PHACs complaint and ruled in favor of

ESLI.The Court of Appeals affirmed the trial courts findings and

conclusions.Hence, the present petition for review.ISSUES:Whether or not fire is a fortuitous event. NOWhether or not the loss was a general average. NOHELD:The Supreme Court reversed and set aside the judgmentappealed from, and order Eastern Shipping Lines, Inc. to return toPhilippine Home Assurance Corporation the amount it paidunder protest in behalf of the consignees herein.There is sufficient evidence to show that that the cylinder caughtfire because of the fault/negligence of ESLI, its master and its


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crew. The cylinder should not have been near the engine room asthe heat generated therefrom could cause an explosion. It followstherefore that the loss was not caused by a fortuitous event.As a rule, general or gross averages include all damages andexpenses which are deliberately caused in order to save thevessel, its cargo, or both at the same time, from a real and knownrisk (Art. 811)While the i

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Week 13 Digest