EN BANC

[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 & COMPANY, FAR EAST, respondents-appellants.
Roxas, Picazo & Mejia for appellants.
Ross, Selph, Carrascoso & Janda for appellee.
SYLLABUS
1.
ADMIRALTY; JURISDICTION; MARITIME CONTRACTS.
Admiralty has jurisdiction over all maritime contracts, in
whatever form, wherever they were executed or are to be
performed, but not over non-maritime contracts.
2.ID.; ID.; MARITIME CONTRACTS DEPEND ON THE SUBJECT
MATTER THEREOF. Whether or not a contract is maritime
depends not on the place where the contract is made and is
to be executed, making the locality the test, but on the
subject matter of the contract, making the true criterion a
maritime service or a maritime transaction.
3.
ID.; ID.; CONTRACT OF AFFREIGHTMENT; PROCEEDING
"IN REM" OR "IN PERSONAM." Admiralty has jurisdiction of
a proceeding in rem or in personam for the breach of a
contract of affreightment, whether evidenced by a bill of
lading or a charter party. And typical of a controversy over
contracts of affreightment is a suit of one party against the
other for loss of or damage to the cargo.
4.
PROHIBITION; COURTS; JURISDICTION; JUSTICE OF THE
PEACE COURTS HAVE NO JURISDICTION IN ADMIRALTY CASES.
Cases in admiralty fall within the original jurisdiction of the
Courts of First Instance to which the jurisdiction of the justice
of the peace courts does not extend and if the latter courts
take cognizance of such cases, they may be restrained by the
writ of prohibition.
DECISION
PARAS, J p:

On July 9, 1947, the respondent-appellant, Yaras & Company,

Far East, filed a complaint in the Municipal Court of Manila
(civil case No. 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 and delivery to the respective
owners of cargoes discharged at the Government piers in the
City of Manila; that the defendant International Harvester
Company of the Philippines is the agent in the Philippines of
the vessel Belle of this 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 of Lading No. 105; that the S/S Bellee 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, one carton of
assorted samples with a stipulated value of P200 was not
delivered to Yaras & Company; and said merchandise was
lost through the negligence either of the Manila Terminal Co.,
Inc., or of the 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 the amount of
P200, with legal interest from the date of the filing of the
complaint.
Before the trial could be proceeded with, the International
Harvester Company of the Philippines filed a motion to
dismiss, on the ground that the Municipal Court of Manila had
no jurisdiction to try the case because the action 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 the Court of First Instance of Manila a
petition for prohibition (civil case No. 4328) against the Hon.
Crisanto Aragon, Judge of the Municipal Court of Manila, and
Yaras & Company, Far East, for the purpose of restraining
said respondent judge from proceeding with civil case No. IV262 in so far as the International Harvester Company of the
Philippines was concerned, on the ground that admiralty or
maritime jurisdiction 16 involved. After trial, the Court of First
Instance of Manila rendered judgment in favor of the

petitioners, International Harvester Company of the

Philippines, ordering the respondent judge of the 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, it is 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 question through its negligence. Inasmuch as
it is expressly alleged that the cargo of the S/S Belle of the
Sea was discharged on December 23, 1946, at the
Government piers under the supervision and custody of the
Manila Terminal Company, Inc., the International Harvester
Company of the Philippines may be held liable only on the
assumption that the goods had been lost in transit or before
being discharged at the pier. In other words, the liability of
the International Harvester Company of the Philippines is
predicated on the contract of carriage by sea between the
International Harvester Company of the Philippines and Yaras
& Company 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 not over non-maritime contracts. (2 Corpus
Juris Secundom, p. 84.) Whether or not a contract is maritime
depends not on the place where the contract is made and is
to be executed, making the locality the test, but on the
subject-matter of the contract, making the true criterion a
maritime 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 bill of lading or a charter party. (Id.,
pp. 90-91.) And typical of a controversy over contracts of
affreightment is a suit of one party against the other for loss
of or damage to the cargo. (1 American Jurisprudence, p.
567.) This is the very case now before us, because the
respondent Yaras & 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 & Company that

admiralty jurisdiction is not involved herein because the
contract in question was made upon land and to be
terminated upon land, merely reflects the English rule which
had long been rejected in the United States. It is now settled
in the latter country that "the jurisdiction of admiralty in
matters of contract depends upon the subject-matter, i. e.,
the nature and character of the contract, and that the English
rule which conceded jurisdiction (with few exceptions) only to
contracts made upon and to be performed upon navigable
waters, is inadmissible, the true criterion 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 Menetone vs. Gibbons, 3 Term, 269, had
expressed the following criticism: "if the admiralty has
jurisdiction over the subject-matter, to say that it is
necessary for the parties to go upon the sea to execute the
instrument borders upon absurdity."
The respondent Yaras & Company cannot invoke the rule
against multiplicity of suits, for the simple reason that said
rule has to be subservient to the superior requirement that
the court must have jurisdiction. 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 original
jurisdiction (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 of the 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 with civil 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 had no jurisdiction and his order overruling the
motion to dismiss filed by the petitioner-appellee is
interlocutory and therefore not appealable. (Sec. 2 of Rule
67, Rules of Court 2.) At any rate, the remedy of appeal

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 & Company. So ordered.
Moran, C.J., Ozaeta, Feria, Bengzon,
Montemayor and Reyes, JJ., concur.

Padilla,

Tuason,

A. Vessels
1.

Meaning

Lopez v. Duruelo, 52 Phil 229

EN BANC
[G.R. No. 29166. October 22, 1928.]
AUGUSTO
LOPEZ,
plaintiff-appellant,
vs.
JUAN
DURUELO, ET AL., defendants. ALBINO JISON, appellee.
Angel S. Gamboa for appellant.
Feria & La O for appellee.

collision between vessels is not necessary to preserve the

rights of a person aboard a motor boat engaged in conveying
passengers between ship and shore who is injured in a
collision between the motor boat and the larger vessel.
2.
ID.; ID.; ID.; CASE AT BAR. A person desirous of
embarking on a ship which was some distance away from the
shore in a Philippine port took passage upon a small motor
boat, which was used in conveying passengers and luggage
to and fro between the shore and the shipside. Owing to the
negligence of the patron or incompetence of the person in
charge so the complaint averred the boat approached
too near to the stern of the ship, with the result that the
propeller of the ship, which was still turning, struck the motor
boat and sunk it, injuring the plaintiff. Held: Upon demurrer,
that the failure of the complaint to allege that the plaintiff
had made protest according to article 835 of the Code of
Commerce was no impediment to the maintenance of a civil
action, under articles 1902 and 1903 of the Civil Code, to
recover damages for the tort.
3.
ID.; ID.; ID.; MEANING OF WORD VESSEL. The word
"vessel " (Spanish, "buque," "nave") used in the Third Section
of Title IV, Book Third, of the Code of Commerce, dealing with
collisions, does not include all ships, craft or floating
structures of any kind without limitation. The provisions of
said section do not apply to minor craft engaged in river and
bay traffic.
4.
PLEADING
AND
PRACTICE;
DEMURRER;
INTERPRETATION OF PLEADING DEMURRED TO. A case
should not be dismissed on demurrer when, under any
reasonable interpretation of the complaint, a cause of action
can be made out; and the fact that a complaint is inartificially
drawn or in a certain degree lacking in precision constitutes
no sufficient reason for dismissing it on demurrer. In passing
upon a demurrer, every reasonable intendment is to be taken
in favor of the pleading against which the demurrer is
directed.
DECISION

SYLLABUS
STREET, J p:
1.
SHIPPING; COLLISION; PROTEST. The protest
required by article 835 of the Code of Commerce in case of

This action was instituted in the Court of First Instance of

Occidental Negros by Augusto Lopez, for the purpose of
recovering damages for personal injuries inflicted upon him
by reason of the negligence of the defendants, Juan Duruelo
and Albino Jison. The defendants demurred to the complaint,
and the demurrer having been sustained, the plaintiff elected
to stand upon his complaint, which was accordingly
dismissed; and the plaintiff appealed.
The facts necessary to an understanding of the case as set
out in the complaint are briefly these: On February 10, 1927,
the plaintiff, who is a resident of the municipality of Silay,
Occidental Negros, was desirous of embarking upon the
interisland steamer San Jacinto in order to go to Iloilo. This
boat was at the time in the anchoring ground of the port of
Silay, some half a mile distant from the port. The plaintiff
therefore embarked at the landing in the motor boat Jison,
which was then engaged in conveying passengers and
luggage back and forth from the landing to boats at anchor,
and which was owned and operated by the defendant Albino
Jison, with Juan Duruelo as patron. The engineer (maquinista)
aboard on this trip was one Rodolin Duruelo, a boy of only 16
years of age. He is alleged to have been a mere novice
without experience in the running of motor boats; and the
day of the occurrence now in contemplation is said to have
been the third day of his apprenticeship in this capacity. It is
alleged that the Jison, upon this trip, was grossly overladen,
having aboard fourteen passengers, while its capacity was
only for eight or nine.
As the motor boat approached the San Jacinto in a perfectly
quiet sea, it came too near to the stern of the ship, and as
the propeller of the ship had not yet ceased to turn, the
blades of the propeller struck the motor boat and sank it at
once. It is alleged in the complaint that the approach of the
Jison to this dangerous proximity with the propeller of the San
Jacinto was due to the fault, negligence and lack of skill of
the defendant Juan Duruelo, as patron of the Jison. As the
Jison sank, the plaintiff was thrown into the water against the
propeller, and the revolving blades inflicted various injuries
upon him, consisting of a bruise in the breast, two serious
fractures of the bones of the left leg, and a compound
fracture of the left femur. As a consequence of these injuries
the plaintiff was kept in bed in a hospital in the City of Manila

from the 28th of February until October 19 of the year 1927,

or approximately eight months. In the conclusion of his
complaint the plaintiff sets out the various items of damage
which he suffered, amounting in all to something more than
P120,000. These damages he seeks to recover of the
defendants in this action.
As a general ground of demurrer it is assigned by the
defendants that the complaint does not show a right of
action, and in the course of the argument submitted with the
demurrer attention is directed to the fact that the complaint
does not allege that a protest had been presented by the
plaintiff, within twenty-four hours after the occurrence, to the
competent authority at the port where the accident occurred.
It is accordingly insisted that, under article 835 of the Code of
Commerce, the plaintiff has shown no cause of action.
Assuming that the article of the Code of Commerce relied
upon states a condition precedent to the maintenance of an
action in a case where protest is required and that the
making of protest must be alleged in the complaint in order
to show a good cause of action an assumption that is
possibly without basis, for the reason that lack of protest in a
case where protest is necessary would seem to supply matter
of defense proper to be set up in the answer, we
nevertheless are of the opinion that protest was not
necessary in the case now before us. The article in question
(835, Code of Com.) in found in the section dealing with
collisions, and the context shows the collisions intended are
collisions of sea-going vessels. Said article cannot be applied
to small boats engaged in river and bay traffic. The Third
Book of the Code of Commerce, dealing with Maritime
Commerce, of which the section on Collisions forms a part,
was evidently intended to define the law relative to merchant
vessels and marine shipping; and, as appears from said
Code, the vessels intended in that Book are such as are run
by masters having special training, with the elaborate
apparatus of crew and equipment indicated in the Code. The
word "vessel" (Spanish, "buque," "nave"), used in the section
referred to was not intended to include all ships, craft or
floating structures of every kind without limitation, and the
provisions of that section should not be held to include minor
craft engaged only in river and bay traffic. Vessels which are
licensed to engage in maritime commerce, or commerce by

sea, whether in foreign or coastwise trade, are no doubt

regulated by Book III of the Code of Commerce. Other vessels
of a minor nature not engaged in maritime commerce, such
as river boats and those carrying passengers from ship to
shore, must be governed, as to their liability to passengers,
by the provisions of the Civil Code or other appropriate
special provisions of law.
This conclusion is substantiated by the writer Estasen who
makes comment upon the word "vessel" to the following
effect:
"When the mercantile codes speak of vessels, they refer
solely and exclusively to merchant ships, as they do not
include war ships, and furthermore, they almost always refer
to craft which are not accessory to another as is the case of
launches, lifeboats, etc. Moreover, the mercantile laws, in
making use of the words ship, vessel, boat, embarkation,
etc., refer exclusively to those which are engaged in the
transportation of passengers and freight from one port to
another or from one place to another; in a word, they refer to
merchant vessels and in no way can they or should they be
understood as referring to pleasure craft, yachts, pontoons,
health service and harbor police vessels, floating
storehouses, warships or patrol vessels, coast guard vessels,
fishing vessels, towboats, and other craft destined to other
uses, such as for instance coast and geodetic survey, those
engaged in scientific research and exploration, craft engaged
in the loading and discharge of vessels from same to shore or
docks, or in transhipment and those small craft which in
harbors, along shore, bays, inlets, coves and anchorages are
engaged in transporting passengers and baggage." (Estasen,
Der. Mer., vol. IV, p. 195.)
In Yu Con vs. Ipil (41 Phil., 770), this court held that a small
vessel used for the transportation of merchandise by sea and
for the making of voyages from one port to another of these
Islands, equipped and victualed for this purpose by its owner,
is a vessel, within the purview of the Code of Commerce, for
the determination of the character and effect of the relations
created between the owners of the merchandise laden on it
and its owner. In the case before us the Jison, as we are
informed in the complaint, was propelled by a second-hand
motor, originally used for a tractor plow; and it had a
capacity for only eight persons. The use to which it was being

put was the carrying of passengers and luggage between the

landing at Silay and ships in the harbor. This was not such a
boat as is contemplated in article 835 of the Code of
Commerce, requiring protest in case of collision.
In Yu Con vs. Ipil, supra, the author of the opinion quotes a
passage from the treatise on Mercantile Law by Blanco. We
now have before us the latest edition of Blanco, and we
reproduce here, in both Spanish and English, not only the
passage thus quoted but also the sentence immediately
following said passage; and this latter part of the quotation is
quite pertinent to the point now under consideration.
Says Blanco:
"Las palabras 'nave' y 'buque, en su sentido gramatical, se
aplican para designar cualquier clase de embarcaciones,
grandes o pequeiias, mercantes o de guerra, significacion
que no difiere esencialmente de la juridica, con arreglo a la
cual se consideran buques para los efectos del Codigo y del
Reglamento para la organizacion del Registro mercantil, no
solo las embarcaciones destinadas a la navegacion de
cabotaje o altura, sino tambien los diques flotantes,
pontones, dragas, ganguiles y cualquier otro aparato flotante
destinado a servicios de la industria o del comercio maritimo.
"Aun cuando, conforme a este concepto legal, parece que
todo aparato flotante que sirve directamente para el
trasporte de cosas o personas, o que indirectamente se
relacionen con esta industria, han de sujetarse a los
preceptos del Codigo sobre propiedad, transmision, derechos,
inscripciones, etc., entendemos con el Sr. Benito (obra cit.) y
asi ocurre en la practica, que no son aplicables a las
pequeas embarcaciones, que solo estan sujetas a los de la
administracion de marina para el servicio de los puQrtos o
ejercicio de la industria de la pesca." (Blanco, Der. Mer., vol.
II, pag. 22.)
"The words 'ship' (nave) and 'vessel' (buque), in their
grammatical sense, are applied to designate every kind of
craft, large or small, merchant vessels or war vessels, a
signification which does not differ essentially from its juridical
meaning, according to which vessels for the purposes of the
Code and Regulations for the organization of the Mercantile
Registry, are considered not only those engaged in
navigation, whether coastwise or on the high seas, but also
floating docks, pontoons, dredges, scows and any other

floating apparatus destined for the service of the industry or

maritime commerce.
"Yet notwithstanding these principles from which it would
seem that any floating apparatus which serves directly for
the transportation of things or persons or which indirectly is
related to this industry, ought to be subjected to the
principles of the Code with reference to ownership, transfer,
rights, registration, etc., we agree with Benito (cobra cit.) and
it so happens in practice that they are not applicable to small
craft which are only subject to administrative (customs)
regulations in the matter of port service and in the fishing
industry."
We may add that the word "nave" in Spanish, which is used
interchangeably with "buque" in the Code of Commerce,
means, according to the Spanish-English Dictionary compiled
by Edward R. Bensley and published at Paris in the year
1896, "Ship, a vessel with decks and sails." Particularly
significant in this definition is the use of the word "decks,"
since a deck is not a feature of the smallest types of water
craft.
In this connection a most instructive case from a Federal
Court in the United States is that of The Mamie (5 Fed., 813),
wherein it was held that only vessels engaged in what is
ordinarily known as maritime commerce are within the
provisions of law conferring limited liability on the owner in
case of maritime disaster. In the course of the opinion in that
case the author cites the analogous provisions in the laws of
foreign maritime nations, especially the provisions of the
Commercial Code of France; and it is observed that the word
"vessel" in these codes is limited to ships and other seagoing vessels. "Its provisions are not applicable," said the
court, "to vessels in inland navigation, which are especially
designated by the name of boats." Quoting from the French
author Dufour (1 Droit Mer. 121), the writer of the opinion in
the case cited further says: "Thus, as a general rule, it
appears to me clearly, both by the letter and spirit of the law,
that the provisions of the Second Book of the Commercial
Code [French] relate exclusively to maritime and not to fluvial
navigation; and that consequently the word 'ship,' when it is
found in these provisions, ought to be understood in the
sense of a vessel serving the purpose of maritime navigation

or seagoing vessel, and not in the sense of a vessel devoted

to the navigation of rivers."
It is therefore clear that a passenger on a boat like the Jison,
in the case before us, is not required to make protest as a
condition precedent to his right of action for the injury
suffered by him in the collision described in the complaint. In
other words, article 835 of the Code of Commerce does not
apply. But even if said provision had been considered
applicable to the case in hand, a fair interpretation of the
allegations of the complaint indicates, we think, that the
injuries suffered by the plaintiff in this case were of such a
nature as to excuse protest; for, under article 836, it is
provided that want of protest cannot prejudice a person not
in a condition to make known his wishes. An individual who
has suffered a compound fracture of the femur and received
other physical injuries sufficient to keep him in a hospital for
many months, cannot be supposed to have been in a
condition to make protest within twenty-four hours of such
occurrence. It follows that the demurrer in this case was not
well taken and should have been overruled.
In their brief in this court the attorneys for the defendant
have criticized the complaint for a general lack of certainty
and precision in more than one respect. However, we have
read the document attentively and, in our opinion, it states a
good cause of action upon a civil liability arising from tort
under articles 1902 and 1903 of the Civil Code, and our
attention has not been drawn to any provision of law which
would constitute an obstacle to the maintenance of the
action.
We have repeatedly called the attention of trial courts to the
general rule that a case should not be dismissed on demurrer
when, under any reasonable interpretation of the complaint,
a cause of action can be made out; and the fact that a
complaint is inartificially drawn or in a certain degree lacking
in precision constitutes no sufficient reason for dismissing it.
In passing upon a demurrer, every reasonable intendment is
to be taken in favor of the pleader. In this connection it
should be borne in mind that if a complaint does not show a
good cause of action, the action can be dismissed at a later
stage of the proceedings; and even where no objection has
been previously made, the point can be raised in the

Supreme Court under section 93 of the Code of Civil

Procedure (Abiera vs. Orin, 8 Phil., 193). Little or no
appreciable prejudice to the defendant will therefore
ordinarily result from overruling a demurrer, and no harm is
done to anyone by requiring the defendant to answer. On the
contrary, grave prejudice may result to a plaintiff from the
erroneous sustaining of a demurrer, because of the delay and
even expense necessary to set the matter right upon appeal.
The judgment appealed from is reversed, the demurrer
overruled, and the defendant is required to answer the
complaint within five days after notification of the return of
this decision to the court of origin. So ordered, with costs
against the appellee.
Johnson, Malcolm, Villamor and Romualdez, JJ., concur.
Ostrand, J., concurs in the result.
2.
Significance of registration
transactions affecting vessels

of

Arroyo v. Yu, 54 Phil 511

EN BANC
[G.R. No. 31865. February 28, 1930.]
MARIANO B. ARROYO, Provincial Sheriff of Iloilo,
plaintiff-appellee, vs. MARIA CORAZON YU DE SANE,
JOSE M. PO PAUCO, and PO SUY LIONG, defendantsappellants. PHILIPPINE NATIONAL BANK, defendantappellee.
Luis G. Hofilea, for appellant Corazon Yu de Sane.
Tomas Villa-Real, Teofilo del Rosario and Tiburcio
Lutero, for appellants Po Pauco and Po Suy Liong.
Plaintiff-appellee in his own behalf.
Roman J. Lacson, for defendant-appellee National
Bank.
SYLLABUS
1.
SHIPPING; REGISTRATION OF VESSELS; CHATTEL
MORTGAGE LAW, WHETHER NOW APPLICABLE TO VESSELS;

ADMINISTRATIVE CODE, SECTION 1171, CONSTRUED AND

APPLIED. Section 1171 of the Administrative Code has
modified the provisions of the Chattel Mortgage Law, Act No.
1508, particularly section 4 thereof. It is now not necessary
for a chattel mortgage of a vessel to be noted in the registry
of the register of deeds. On the other hand, it is essential that
a record of documents affecting the title of a vessel be
entered in the office of the collector of customs at a port of
entry.
2.
ID.; ID.; ID.; ID. The law as now existing is designed
to protect persons who deal with a vessel on the strength of
the record title.
3.
ID.; ID.; ID.; ID. Mortgages on vessels, although not
recorded, are good as between the parties. But as against
creditors of the mortgagor, an unrecorded mortgage is
invalid.
4.
ID.; ID.; ID.; ID.; FORECLOSURE OF MORTGAGE. The
procedure provided by law for the foreclosure of a mortgage
must be substantially carried out.
DECISION
MALCOLM, J p:
In the Court of First Instance of Iloilo, the sheriff of that
province instituted an action to compel the various persons
and entities with claims to the lorchas China and Cuylim to
interplead with one another to determine their conflicting
rights. As a result, Po Suy Liong, Ti Liong & Co., J. M. Po
Pauco, Mario Corazon Yu de Sane, and the Philippine National
Bank presented their respective answers and complaints.
Thereafter, it is probable that a hearing was had and
evidence taken, although no such evidence has been
transcribed and elevated to this court, which means that we
must perforce accept the findings of fact made by the trial
judge. His decision concluded with the
following
pronouncements:
"In view of these proven facts, the court holds that the
mortgage of the lorchas China and Cuylim executed in favor
of J. M. Po Pauco through notarial deed Exhibit 2, and the
transfer of said mortgage by J. P. Po Pauco, the mortgagee, to
the Philippine National Bank through notarial deed Exhibit 1,

duly recorded in the registry of deeds of the Province of Iloilo

on November 29, 1919, are valid and legal.
"The fact that this mortgage was not registered in the Bureau
of Customs of the port of Iloilo until March 5th of this year
does not invalidate it; since it was proved at the trial of this
case that such deferred registration was due to certain
doubts entertained by the collector of customs of the port of
Iloilo touching the applicability of Act No. 3324, amending
section 1176 of the Administrative Code; and that said
collector only decided to admit and register said mortgage
upon lorchas China and Cuylim in March of this year after
receipt of advice from Manila regarding the applicability of
Act No. 3324, which was approved on December 4, 1926, to a
mortgage executed on November 6, 1918, in favor of a
Chinese subject a prohibition not found in the original
section 1176 of the Administrative Code, but which went into
effect when the aforementioned Act No. 3324, approved on
December 4, 1926, took effect.
"But the lorchas China and Cuylim do not, by the mere fact of
being mortgaged, cease to pertain to the Lim Ponzon
Navigation Co., as evidenced by certificates of ownership
Exhibits A and B; and being property appertaining to the Lim
Ponzo Navigation Co., they were validly attached, as shown
by Exhibits E, F, G and H, and levied upon by virtue of the
writ of execution Exhibit I, issued December 6, 1928, upon
petition of plaintiff Maria Corazon Yu de Sane filed in civil
case No. 7688, Exhibit C. It was on December 6, 1928, that
by virtue of said writ of execution the sheriff levied upon the
lorchas China and Cuylim, which, according to Exhibit F, had
been attached on December 4, 1928; it being understood
that both attachment and execution were subject to all liens
existing upon said lorchas on the date of the attachment,
which liens were the mortgages in favor of J. M. Po Pauco
transferred by the same to the Philippine National Bank,
according to Exhibits 1 and 2.
"The aforementioned writ of execution Exhibit I was not
carried out by the sheriff because the Philippine National
Bank filed a third- party claim, Exhibit 12, and according to
Exhibit 14, Maria Corazon Yu de Sane, the judgment creditor,
failed to give indemnity bond as required by the sheriff.
"But the court also holds that the provincial sheriff of Iloilo
did not act legally when, after giving notice, Exhibit 15, on

December 28 or 29, 1928, he dissolved the attachment

levied upon the lorchas China and Cuylim, and delivered
them to J. M. Po Pauco, as was proved at the trial of this
control of this court in the instant case, wherein, on
December 17, 1928, the complaint of interpleading filed by
the sheriff was entered in the docket, and, without authority
of the court in the instant case, said sheriff should not have
assumed to dispose of the lorchas China and Cuylim as he
did. The complaint of interpleading filed on December 17,
1928, was presented by the provincial sheriff of Iloilo,
according to paragraph 11 thereof, for the purpose of
protecting himself from any claim that might arise from the
sale of said lorchas; and this protection thus invoked covered
not only the person of the sheriff, but also the lorchas in his
possession which were the object of contradictory claims filed
by several persons. But the sheriff, by his own authority, and
without the knowledge and authority of this court, disposed
of said, lorchas, as stated in Exhibit 15, and in so acting he
assumed full responsibility for all his acts.
"The court holds that the now defendant Maria Corazon Yu de
Sane may, if she so desires, ask for another order of
execution in civil case No. 7688, and may by virtue thereof
attach the lorchas China and Cuylim, and order their sale by
public auction subject to the mortgage executed thereon by
the owner, the Lim Ponzo Navigation Co., in favor of the
Philippine National Bank, which is hereby declared valid.
"The court holds that the damages at the rate of P100 a day
claimed by defendants Po Suy Liong, Ti Liong & Co., and J. M.
Po Pauco through the counterclaim contained in their answer
filed on December 18, 1928, have not been proved.
"As to the cross-complaint filed by the Philippine National
Bank against J. M. Po Pauco, Maria Corazon Yu de Sane, Po
Suy Liong, and Ti Liong & Co., the court finds that the basic
facts thereof have been established, as heretofore stated in
paragraphs numbered 2, 3, 4, 5, and 6, holding J. M. Po Pauco
in debt to the Philippine National Bank for the sum of
P131,994.95, including interest up to March 31, 1928, and
the interest mentioned in Exhibit 10, from April 1, 1928, until
payment, to which is added the stipulated 10 per cent of the
sum total by way of attorney's fees, which the court hereby
reduces to 5 per cent of the whole.

"This debt of J. M. Po Pauco is secured by a mortgage of the

property described in Exhibits 1 and 3, already due and
demandable when the cross-complaint was filed by the
Philippine National Bank.
"Let judgment be entered for the Philippine National Bank,
ordering J. M. Po Pauco to pay to it the sum of P131,994.95,
plus the interest mentioned in Exhibit 10, from April 1, 1928,
until payment, plus 5 per cent of the debt as attorney's fees
and costs of collection.
"If said J. M. Po Pauco fails to pay the amount of this
judgment within three months from the date hereof, the court
will decree the sale of the mortgaged property, as prayed for
by the Philippine National Bank in its cross-complaint; and
should the proceeds of the sale thereof fall short of the
amount of this judgment, a writ of execution shall issue
against, whatsoever unexempted property said J. M. Po Pauco
holds, until the whole balance remaining is satisfied.
"Maria Corazon de Sane, and Po Suy Liong & Co. are hereby
absolved from the cross-complaint interposed by the
Philippine National Bank against them.
"The Philippine National Bank, J. M. Po Pauco, Po Suy Liong,
and Ti Liong & Co., are hereby absolved from the crosscomplaint interposed against them by Maria Corazon Yu de
Sane."
From the aforementioned decision and judgment, two
appeals have been taken, one by Maria Corazon Yu de Sane,
and the other by J. M. Po Pauco and Po Suy Liong. These
appeals will be disposed of in order.
I.
The appeal of Maria Corazon Yu de Sane relates to the
preferences to the two lorchas as between herself and the
Philippine National Bank. Among the facts found by the trial
judge, it is gleaned that the lorchas China and Cuylim were
owned by the Lim Ponzo Navigation Co. On November 6,
1918, the two lorchas were mortgaged to J. M. Po Pauco to
guarantee a loan of P20,000. Two days later, the mortgage
was duly registered in the office of the register of deeds of
Iloilo. On November 28, 1919, J. M. Po Pauco executed a
mortgage in favor of the Philippine National Bank to protect a
loan of P50,000, and covering, among other things, the titles,
rights, and interests which Po Pauco had in the lorchas China
and Cuylim. One day later, this mortgage was registered in
the office of the register of deeds of Iloilo. Subsequently, the

credit of Po Pauco with the Philippine National Bank was

increased to P90,000 which, with accrued interest, is alleged
to now reach the sum of P131,994.95. To return again to the
chattel mortgage, it was only recorded in the office of the
collector of customs of Iloilo on March 5, 1929.
Maria Corazon Yu de Sane secured a judgment against the
Lim Ponzo Navigation Co. for P7,179.65. In due course, a writ
of attachment and an execution were secured, the date of
the latter being December 6, 1928. The notice of seizure was
recorded by the collector of customs of Iloilo on December 4,
1928, on which date the records of that office disclosed the
vessels as free from encumbrances.
The registration of vessels is now governed by the
Administrative Code. Section 1171 thereof provides:
"Record of documents affecting title. In the record of
transfers and incumbrances of vessels, to be kept at each
principal port of entry, shall be recorded at length all
transfers, bills of sale, mortgages, liens, or other documents
which evidence ownership or directly or indirectly affect the
title of registered vessels, and therein shall be recorded all
receipts, certificate, or acknowledgments canceling or
satisfying, in whole or in part, any such obligation. No other
record of any such document or paper shall be required than
such as is affected hereunder."
It is clear that section 1171 of the Administrative Code has
modified the provision of the Chattel Mortgage Law, Act No.
1508, particularly section 4 thereof. It is now not necessary
for a chattel mortgage of a vessel to be noted in the registry
of the register of deeds. On the other hand, it is essential that
a record of documents affecting the title of a vessel be
entered in the office of the collector of customs at a port of
entry (Rubiso and Gelito vs. Rivera [1917], 37 Phil., 72; 2
Araneta, Administrative Code, note to section 1171). The law
as now existing is designed to protect persons who deal with
a vessel on the strength of the record title. Mortgages on
vessels, although not recorded, are good as between the
parties. But as against creditors of the mortgagor, an
unrecorded mortgage is in valid (37 Cyc., 54).
Consolidating the facts, we find the mortgage of the
Philippine National Bank dated November 28, 1919, but not
recorded in the office of the collector of customs until March
5, 1929. The execution sued out by Maria Corazon Yu de Sane

was dated December 6, 1928, and noted at the port of entry

two days prior thereto. Under these facts, the execution
holder would have a prior right over the unrecorded
mortgage. However, in the decision of the trial court, we find
an explanation of the delay which appears to have been
proved at the trial, and which we must accept since there is
nothing in the record to the contrary. His Honor states that
the fact that the mortgage was not registered in the office of
the collector of customs of Iloilo until March 5, 1929, was
because of the doubts entertained by the collector relative to
the applicability of Act No. 3324 to a mortgage executed in
1918 in favor of a Chinese subject. This uncontradicted fact
must be taken as curing the bank's defective title. That the
collector of customs did not perform his duty was no fault of
the bank. Constructive registration of the mortgage must,
therefore, be accepted.
We rule that as between the appellant, Maria Corazon Yu de
Sane, and the appellee, the Philippine National Bank, the
latter has a superior claim in the amount of P20,000, the
amount of the mortgage of Po Pauco which was transferred to
the Philippine National Bank.
II.
The remaining appeal concerns the respective rights of
Jose M. Po Pauco and Po Suy Liong on the one hand and the
Philippine National Bank on the other. There is no particular
merit in the arguments offered on behalf of Po Suy Liong, for
his mortgage, so far as the record discloses, has never been
recorded in the office of the collector of customs. But the
appeal of Po Pauco does present a rather anomalous
condition of affairs.
It will be recalled that the action was begun by the several
parties interpleading. On these pleadings, the trial judge was
led to order the foreclosure of the mortgage of the Philippine
National Bank against Po Pauco. But the record does not
disclose that any one other than the attorney for Po Pauco
was notified, that any summons was issued, or that an
opportunity was afforded Po Pauco to interpose his defense, if
he had any. Obviously, the procedure provided by law for the
foreclosure of a mortgage must be substantially carried out.
It is no answer for the appellee to state that no objection was
interposed in the lower court. The question is one which goes
to the jurisdiction of the court, and a question of this nature
may be raised for the first time on appeal.

With the foregoing pronouncements which, except as they

relate to the judgment of the Philippine National Bank against
J. M. Po Pauco, in the main coincide with the pronouncements
of the trial judge, the judgment appealed from will in part be
affirmed and in part set aside, and the record remanded to
the court of origin for further proceedings. It will be so
ordered, without special pronouncement as to costs in this
instance.
Johnson, Villamor, Ostrand, Johns, Romualdez and Villa-Real,
JJ., concur.
Rubiso v. Rivera, 37 Phil 72
FIRST DIVISION
[G.R. No. 11407. October 30, 1917.]
FAUSTO FUBISO and BONIFACIO GELITO, plaintiffsappellee, vs. FLORENTINO E. RIVERA, defendantappellant.
Francisco Sevilla for appellant.
Salvador Q. Araullo for appellees.
SYLLABUS
1.
SHIPPING; REGISTRATION OF THE PURCHASE OF A
VESSES. The requisite of registration in the registry of the
purchase of a vessel is necessary and indispensable in
orderer that the purchaser's rights may be maintained
against a claim filed by a third person; pursuant to article 573
of the Code of Commerce in connection with section 2 of Act
No. 1900, which Act, amending said article, provides that
such registration, instead of being made in the commercial
registry, shall be entered in the registry of the Insular
Collector of Customs, who, since May 18 1909, has been
performing the duties of commercial register.
2.
ID.; ID. The legal rule set down in the Code of
Commerce, subsist, inasmuch as the amendment solely
refers to the official who shall make the entry.
3.
ID.; ID. Ships or vessels, whether moved by steam
or by sail, partake to a certain extent, of the nature and
conditions of real property, on account of their value and
importance in the world commerce; and for this reason the

provisions of article 573 of the Code of Commerce are nearly

identical with those of article 1473 of the Civil Code.
DECISION
TORRES, J p:
This appeal by bill of exceptions was filed by counsel for
Florentino 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 special finding was made for costs.
On April 10, 1915, counsel for plaintiffs brought suit in the
Court of First Instance of this city and alleged in the
complaint that his clients were the owners of the pilot boat
named Valentina, which had been in bad condition since the
year 1914 and, on the date of the complaint, was stranded in
the place called Tingloy, of the municipality of Bauan,
Batangas; that the defendant Florentino E. Rivera took
charge or possession of said vessel without the knowledge or
consent of the plaintiffs and refused to deliver it to them,
under claim that he was the owner thereof; and that such
procedure on the defendant's part cause the plaintiffs to
suffer damages, not only because they could not proceed to
repair the vessel, but also because they were unable to
derive profit from the voyages for which said pilot boat 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 deliver said 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
denial of 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 & Co.," Bonifacio Gilito being a copartner
thereof to the extent of two-thirds, and the Chinaman Sy Qui,
to that of one-third, of the value of said vessel; that
subsequently Bonifacio Gelito sold his share to his copartner
Sy Qui, as attested by the instrument Exhibit A, registered in
the office of the Collector of Customs and made a part of his

answer; that later said Chinaman, the absolutely owner of the

vessel, sold it in turn to the defendant Rivera, according to
the public instrument, also attached to his answer as Exhibit
B; and that, for this reason, Rivera took possession of the
said pilot boat Valentina, as its sole owner. He therefore
petitioned that the defendant be absolve from the complaint,
with the costs against the plaintiffs.
After the hearing of the case and the introduction of
documentary evidence, the judgment of September 6, 1915,
was rendered, from which counsel for the defendant
appealed and moved for a new trial. This motion was denied
and 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 the other one-third interest in said vessel; wherefore
this vendor is no longer entitled to exercise any action
whatever in respect to the boat in question. Gelito was one of
the partnership owners of the Valentina, as in fact his name
appears in the certificate of protection issued by the Bureau
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 of his right as the sole owner of the
Valentina, sold this boat to Florentino E. Rivera for P2d, 500,
on January 4, 1915, which facts are set forth in a deed
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 that year, that is, after the sale of the boat to
the defendant Rivera, suit having been brought in the justice
of the peace court against the Chinaman Sy Qui to enforce
payment of a certain sum of money, the latter's creditor
Fausto Rubiso, the herein plaintiff, 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 the office 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 said: first privately
by its owner Sy Qui to the defendant to the defendant

Florentino E. Rivera, on January 4, 1915, and afterwards by

the sheriff at public auction in conformity with 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
purchase the pilot boat Valentina on behalf of the plaintiff
Rubiso; but it is no less true that the sale of the vessel by Sy
Qui to Florentino E. Rivera, on January 4, 1915, was entered
in the customs registry only on March 17, 1915, while its sale
is public auction to Fausto 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 this
latter sale was prior by may days to the sale made to the
defendant.
Article 573 of the Code of Commerce provides, in its first
paragraph:
"Merchant vessels constitute property which may be acquired
an transferred by any of the means recognized by law. The
acquisition of a vessel must be included in a written
instrument, which shall not produce any effect with regard to
third persons if not recorded in the commercial registry."
So that, pursuant to the above-quoted article, inscription in
the commercial 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
appears by section 2 of that Act, herebelow transcribed.
"The documenting, registering, enrolling, and licensing of
vessels in accordance with the Customs Administrative Act
and customs rules and regulations shall be deemed to be a
900, on May 18, 1909, said article of the Code of Commerce
was amended, as appears by section 2 of that Act, herebelow
transcribed.
"The documenting, registering, enrolling, and licensing of
vessels 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 title two of the Code

of Commerce, 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,
as defined in title two of the Code of Commerce."
The requisite of registration on the registry, of the purchase
of a vessel, is necessary and indispensable in order that the
purchaser's rights may be maintained against a claim filed by
a third person. Such registration 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 duties of the commercial
register concerning the registering of vessels; so that the
registration of a bill of sale of a vessel shall be made in the
office of the Insular Collector of Customs, who, since May 18,
1909, has been performing the duties of the commercial
register in place of this latter official.
In view of said legal provisions, it is undeniable that the
defendant Florentino E. Rivera's rights cannot prevail over
those acquired by Fausto Rubiso in the ownership of the pilot
boat Valentina, inasmuch as, though the latter's acquisition
of the vessel at public auction, on January 23, 1915, was
subsequent to its purchase by the defendant Rivera,
nevertheless said sale at public auction was antecedently
record in the office of the Collector of Customs, on January
27, and entered in the commercial registry. An
unnecessary proceeding-on March 4th; while the private and
voluntary purchase made by Rivera on a prior date was not
recorded in the office of the Collector 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
shall make the entry; but, with respect to the rights of the
two purchases, whichever of them first registered his
acquisition of the vessel in the one entitled to enjoy the
protection of the law, which considers him the absolute
owner of the purchased boat, an this latter to be free of all
encumbrance and all claims by strangers for, pursuant to
article 582 of the 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 considered canceled.

The purchaser at public auction, Fausto Rubiso, who was

careful to record his acquisition, opportunely and on prior
date, has, according to the law, a better right than the
defendant Rivera who subsequently recorded his purchase.
The latter is a third person, who was directly affected by the
registration which the plaintiff made of the acquisition.
Ships or vessels, whether moved by steam or by sail,
partake, to a certain extent, of the nature and conditions of
real property, on account of their value and importance in the
world commerce; and for this reason the provisions of article
573 of the Code of Commerce are nearly identical with article
1473 of the Civil Code.
With respect to the indemnity for losses and damages,
requested by the plaintiff, aside from the fact, ad 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 the
port 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, for the reasons
aforestated, is true and sole owner of said pilot boat.
For the foregoing considerations, whereby the errors
assigned to the judgment appealed from are deemed to have
been refuted, it is our opinion that said judgment should be,
as it is hereby, affirmed, with the costs against the appellant.
So ordered.
Arrellano, C.J., Johnson, Carson, Street, and Malcolm, JJ.,
concur.
Araullo, J., did not take part.
B. Persons Participating in Maritime Commerce
1.

Shipowners and shipagents

STANDARD OIL COMPANY OF NEW YORK, plaintiffappellee, vs. MANUEL LOPEZ CASTELO, defendantappellant.
Gabriel La O for appellant.
Lawrence & Ross for appellee.
SYLLABUS
1.
GENERAL AVERAGE; COASTWISE TRADE; JETTISON OF
DECK CARGO When, in conformity with marine regulations,
cargo is carried on the deck of a steamer engaged in
coastwise trade, the jettison of such cargo upon occasion of
peril makes a case for general average.
2.
JETTISON; LIQUIDATION OF GENERAL AVERAGE;
OMISSION OF CAPTAIN TO DISTRIBUTE LOSS. When jettison
of cargo occurs it is the duty of the captain to effect the
adjustment, liquidation, and distribution of the general
average; and his omission to take these steps constitutes an
actionable dereliction of duty.
3.
ID.; ID.; ID.; LIABILITY OF SHIPOWNERS. For this
omission not only is the captain personally liable to the
shipper of the jettisoned goods, but the latter may go at once
upon the owner, since the captain of the ship is the
representative of the owner, and the latter is civilly liable for
the acts of the former.
DECISION
STREET, J p:

Standard Oil v. Castelo, 42 Phil 256

FIRST DIVISION
[G.R. No. 13695. October 18, 1921.]

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

Castelo, as owner, let the small interisland steamer
Batangueo for the term of one year to Jose Lim Chumbuque
for use in the conveying of cargo between certain ports of the
Philippine Islands In this contract it was stipulated that the
officers and crew of the Batangueo should be supplied by
the owner, and that the charterer should have no other
control over the captain, pilot, and engineers than to specify
the voyages 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 of the boat in Manila a quantity of petroleum to be
conveyed to the port of Casiguran, in the Province of
Sorsogon. For this consignment a bill of lading of the usual
form was delivered, with the stipulation that freight should be
paid at the destination. Said bill of lading contained no
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
was compelled for the safety of all to jettison the entire
consignment of petroleum consisting of two hundred cases.
When the storm abated the ship 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
Oil Company 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 step necessary to the salvation of the ship;
and in fact it appears that even after the vessel was thus
eased, the was with difficulty prevented from capsizing, 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 loss to
be borne solely by the owner of the cargo. Upon this point it
will be observed that the cargo was carried upon deck; and it
is a general rule, both under the Spanish Commercial Code
and under the doctrines prevailing in the courts of admiralty
of England and 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
in Rule I of the York-Antwerp Rules, as follows: "No jettison of
deck cargo shall be made good as general average." The
reason for this rule is 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 free action of the crew in
managing the ship. Moreover, especially in the case 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 the hold; 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 of Commerce, 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 made in
the days of sailing vessels; and with the advent of the
steamship as the principal conveyer of cargo by sea, it has
been felt that the reason for the rule has 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
navigating coastwise 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 the
Spanish Code of Commerce. In the first it is in effect declared
that, if the marine ordinances allow cargo to be laden on
deck in coastwise navigation, the damages suffered by such
merchandise shall not be dealt 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
that there shall be no right to indemnity if it should be lost by
reason of being jettisoned for the general safety, except
when the marine ordinances 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
interisland trade 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 be carried
on the deck if certain precautions are taken. There is no
express provision declaring that petroleum shall be carried on

deck in any case; 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 deck in our coastwise 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 the circumstance that in the coastwise trade the
boats are small and voyages are short, with the result that
the coasting vessel can use more circumspection about the
condition of the weather at the time of departure; and if
threatening weather arises, she can often reach a port of
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 are practically 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 that the plaintiff is entitled to recover in some way and
from somebody an amount 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 cargo before 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 in
this case may immediately look for reimbursement to the
extent above stated is deducible not only from the general
doctrines of admiralty jurisprudence but from the provisions
of the Code of Commerce applicable to the case. It is
universally recognized that the captain is primarily the
representative of the owner; and article 586 of the Code of
Commerce expressly declares that both the owner of the
vessel and the naviero, or charterer, shall be civilly liable for
the acts of the master. In this connection, it may be noted
that there is a discrepancy between the meaning of naviero,
in article 586 of the Code of Commerce, where the word is
used in contradistinction to the term "owner of the vessel"
(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 the acts 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 is
required to initiate the proceedings for the adjustment,
liquidation, and distribution of any gross average to which
the circumstances of the voyage 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, we suppose, would
be primarily accomplished by requiring the consignees of
other cargo, as a condition precedent to the delivery of their
goods to them, to give a sufficient bond to respond for their
proportion of the general average. But it is not necessary
here to inquire 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 of the 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 for which the owner of the ship must answer.
But it is said and the entire defense seems to be planted
upon this proposition that the liquidation of the general
average is, under article 852 and related provisions, a
condition precedent to the liability of the defendant, and that
at any rate the defendant, as owner of the ship, should only
be held liable for his proportion of the general average. 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 law imposes on him.
This argument involves, we think, a misconception of the true
import of the provisions relating to the adjustment and
liquidation of general average. Clearly, for one thing, those
provisions are intended to supply the shipowner, acting of
course 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 sharing it; but the making of the liquidation is not a
condition precedent to the liability of the shipowner to the
shipper whose property has been jettisoned.
It is true that if the captain does not comply with the article
relating to the adjustment, liquidation, and distribution of the
general average, the next article (852) gives to those
concerned whether shipowner (naviero) or shipper the
right to maintain an action against the captain for
indemnification for the loss; but the recognition of this right
of action does not by any means involve the suppression of
the right of action which is elsewhere recognized in the
shipper against the ship's owner. The shipper may in our
opinion go at once upon 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 to
remember that the owner of the ship ordinarily has vastly
more capital embarked upon a voyage than has any
individual shipper of cargo. Moreover, the owner of 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. It
is therefore proper that any person whose property may have
been cast 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 the law may have imposed on the captain
with respect to such cargo. To adopt the interpretation of the
law for which the appellant contends 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. This cannot be permitted.
The evident intention of the Code, taken in all of its
provisions, is to place the primary liability upon the person
who has actual control over the conduct of the voyage and
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 as shippers.
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 the jettisoned cargo, belonging partly
to the plaintiff and partly to another shipper, was P880.35, of
which P719.95 represented the value of the plaintiff's
petroleum. 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 loss apportionable 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 is the amount for which
judgment should be givec jn.
Accordingly, modifying the judgment appealed from to this
extent, we affirm the same, with costs. So ordered.
Johnson, and Villamor, JJ., concur.
Mapa, C.J., concurs in the result.
Separate Opinions
ARAULLO, J., with whom concurs AVANCEA, J., dissenting:
As the loss of the petroleum shipped by the plaintiff company
on board the vessel Batangueo, 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, the provisions 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 title
5, of Book 3 of the Code of Commerce.
Article 811 defines gross or general averages as damages
and expenses which are deliberately caused in order to save
the vessel, her cargo, or both at the same time, from a real
and known risk, and particularly, such as goods jettisoned to
lighten the vessel, whether they belong to the vessel, to the
cargo, or to the crew, and the damage suffered through said
act by the goods on 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
812 provides that in order to satisfy the amount of the gross
or general average, all persons having an interest in the
vessel and cargo at the time 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 with regard
to the liability, liquidation and payment thereof, and that, in

the absence of agreements, the proof of the average shall

take place in the port where the repairs are made, should any
be necessary, or in the port of unloading; that the liquidation
shall take place in the port of unloading should it be a
Spanish port (now Filipino); that should the average have
occurred outside of the jurisdictional waters of the Philippines
or should the cargo have been sold in a foreign port by
reason 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 should have occurred near the port of
destination, and that port is made, the proceedings for the
proof and liquidation above-mentioned shall be had there.
Article 847 provides that when the liquidation of the
averages is made privately by virtue of agreement, as well as
when a judicial authority takes part therein at the request of
any of the parties interested who do not agree thereto, all of
them shall be cited and heard, should they not have
renounced this right; that should they not be present or not
have a legitimate representative, the liquidation shall be
made by the consul in said port, and where there is none, by
the judge or court of competent jurisdiction, according to the
laws of the country, and for the account of the proper person;
and, finally, desiring to furnish all possible means to effect
the liquidation, the legislator provides in the last part of said
article that, when the representative is a person 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, or underwriter; and as to general or
gross averages, he lays down concrete and conclusive rules
in articles 853, 854, and 858, with respect to the form and
mode in which the experts appointed by the interested
parties or by the court shall fulfill their duties, as to the
examination 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 gross average, 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 turned over to the liquidator appointed, in

order that he may proceed with the 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 actual condition, according to a statement of experts; (3)
by 50 per cent of the amount of the freight, deducting the
remaining 50 per cent for wages and maintenance of the
crew.
Lastly, in relation to said provisions, article 851 authorizes
the captain to proceed privately, upon the agreement of the
parties interested, in the adjustment, liquidation, and
distribution of the gross average, 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 the
gross average is to be made by experts and liquidators
appointed by themselves, in which case this shall be done
should the persons interested agree, and said article also
provides that should an agreement not be possible, the
captain shall apply to the judge or court of 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 next article, 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 the action
they may bring to demand indemnity from him."
It is therefore beyond question that the action of the plaintiff
to recover indemnity for the damages which it claims to have
suffered by reason of the failure of the captain of the vessel
Batangueo to proceed with the liquidation and distribution
of the gross average in which it was a contributor, and by
reason of his act in delivering to the other shippers 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 the vessel Batangueo.

Although in the preceding decision it is clearly recognized

that the 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 shipper whose goods may have been
jettisoned for the common security, it is also stated that in
ordinary practice this is supposed to be complied with by
requiring the consignees of the other cargoes, as a condition
precedent to the delivery thereof, to give a sufficient bond to
answer proportionally for the 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 be enforced
against the defendant shipowner, against whom the shipper
may immediately institute his action, the former having in
turn, if he so 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
same Code, 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 been required to do so, and before
delivering to them the goods saved, the captain having the
right, upon failure to give the bond, to delay the delivery of
the goods until the shippers pay their part of the gross
average corresponding to each of them and not before
proceeding with 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 the average, and
this is so clear and evident that in article 867 the captain is
authorized to attach the goods saved until the shippers
should pay the amount, if they should fail to do so by the
third day after demand upon them. And since the captain
may require bond, he may delay the delivery 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 fact that the captain of the Batangueo 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 the owner of the vessel, as

the trial court has erroneously held in the judgment appealed
from and as this court is given to understand in referring 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 such bond to be filed before proceeding with the
liquidation, inasmuch as the shipowner or agent, as well as
the shippers, being interested in proceeding with the
liquidation, the Code authorizes them, first, to demand it
from the captain and later to institute the action
corresponding 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 the respective cargoes to the
shippers or permit them to dispose of the same, in which
case the responsibility may be fixed upon the captain and 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 or agent, it cannot in all cases, as the decision
gives us to understand, be deduced that the ship. owner
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 is demandable from the
agent or shipowner, and the cases in which he is not
responsible, the responsibility attaching only to the captain.
These cases can not be confused in view of the clear and
positive provisions of said Code, in relation to the method
adopted in the exposition thereof and following the order of
the subjects contained in this law.
Articles 586, 587, and 588, invoked in the decision in
question in order to maintain that theory, are found in title 2
of Book 3 of said Code which treats of the persons who
intervene in maritime commerce, 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 to 849, and
consequently, article 862, invoked in said decision and which
refer to the gross or general average and to the simple or
particular average, are found in titles 4 and 5 of the same

Book 3 which, respectively, deal with the risks, damages, and

accidents of maritime commerce 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,
and 588, invoked in the decision, and those which treat of
averages. The first of said articles establishes the civil
responsibility of the shipowner and agent for the acts of the
captain and the obligations incurred by the latter for the
repair, equipment, and provisioning of the vessel. The
second, that is, article 587, establishes the same
responsibility of the agent for indemnities, in favor of third
persons. which may arise from the conduct of the captain in
the care of the goods which the vessel may carry, from which
he may exempt himself by abandoning the vessel with all her
equipment and the freight he may have earned during the
voyage. In the present case it is not the conduct of the
captain in the care of the goods which has given rise to the
right to exact the corresponding civil responsibility, but,
according to article 862, 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 or the
shippers may or should have made, inasmuch as said article
852 clearly so declares, in referring to the agent or the
shippers in the following 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 and adequate place for
their transportation and due preservation during the voyage,
in such manner that they may not suffer damages or
deterioration nor be taken away, for, according to article 618,
which bears some relation to said article 587, the captain is
civilly responsible to the agent and the latter to third
persons, who may have contracted with him, for all damages
which may have occurred to the vessel and the cargoes due
to lack of skill or to negligence on his part and for the
substraction or theft committed by the crew, reserving his
right to proceed against the guilty Parties; and, according to
article 619, he shall be liable for the cargo from the time it 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 wharf of the port of unloading, unless the
contrary has been expressly agreed upon; and, finally,
according to No. 5 of the same article 618, he shall be liable
for those damages arising from an undue use of the powers
and nonfulfillment of the obligations which are his in
accordance with articles 610 and 612, one of which, the fifth
mentioned in the last article, is to remain constantly on board
the vessel during the time the freight is taken on board and
carefully watch the stowage thereof, which acts, as is wellknown, constitute the means 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 vessel Batangueo took away with them their
respective cargoes 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 not fulfilled his duty
with respect to the care of the cargo, but because he did not
proceed in accordance with the provision of article 851
already cited, 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 fact
attributable that the shippers were able to carry away and
dispose of the cargo saved upon the arrival of the vessel at
port.
The third of said articles, that is, 588, cited also in the same
decision, far from making the shipowner or the agent
responsible for the obligations incurred by the captain,
exempts them from all responsibility, if the captain should
have exceeded the powers and privileges 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 claimed
were 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 third persons with whom he may have contracted,

for the damages arising from an undue use of his powers and
the nonfulfillment of his obligations, but it adds that such
liability shall be "in accordance with articles 610 and 612."
These articles, as may be seen, refer to the powers 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 for crimes committed on board,
contracts for the charter of the vessel, its preservation and
repair, the supplying of books of navigation, and others,
which are mentioned in said last article, the equipping of the
vessel and the receiving of the cargo, etc., among which
obligations there 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 which that of the agent or shipowner is
demandable and those in which that responsibility is joint
among them, as well as those cases in which no
responsibility 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 of skill of the captain, or because the vessel put to sea
insufficiently repaired and prepared, the captain shall be
responsible for the indemnification of damages caused to the
vessel or the cargo by the accident, Which liability may be
demanded by the agent or the shippers; but there is in said
section no provision whatever by which the agent or
shipowner is made responsible.
In article 826 of section 3 of the same title, which deals with
collisions, it is provided that the agent of the vessel at fault
shall indemnify the losses and damages suffered after an
expert appraisal, if a 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 forced to
collide with another by a third vessel, the agent of the third

vessel shall indemnify for the losses and damages caused,

the captain being civilly liable to said agent, this liability
being understood to be limited to the value of the vessel with
all equipment and freight earned.
In treating of arrivals under stress, section 2 of the same title,
in article 821, declares that when such arrival is not
legitimate, the agent and the captain shall be jointly liable for
the expenses incurred.
In treating averages, article 809, No. 8, in section 1 of the
same title, which includes, in simple averages, the damage
suffered by the vessel 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 in No. 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 crew may demand indemnity from the captain, the vessel
and freight, a rule which is based upon No. 1 of article 618,
already mentioned, according to which the captain shall be
civilly responsible to the agent and the latter to the third
persons, for all damages suffered by the vessel and its cargo
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
which the owners of the cargo, having the right to demand
the adjustment, liquidation, and distribution of the gross aver
age, upon the arrival of the vessel at port, should dispose of
the cargo saved. Such case, as already stated, is the subject
of the express and positive provisions of articles 861 and
852, in relation to articles 866, 867, and 868, included in
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 of the 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
corresponding to the gross average 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 of said Code, that we must be governed when dealing with

the risks, damages, and accidents of maritime commerce;
and gross average being 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 not and
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 the agent or the shippers shall demand of the
captain the liquidation and may exercise against him the
action to recover the proper indemnity, a provision 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 ask the captain for the liquidation and institute
against him the corresponding action for indemnification, it
would be absurd to pretend 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
interpret so 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 of the ship ordinarily
has vastly more capital embarked upon a voyage than has
any individual shipper of cargo, and more over, as the owner
of 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 intention of 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 the law 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 any person whose property may have
been cast 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 the law may have imposed on the captain
with respect to such cargo."
Such reasoning, however, is not convincing. In the first place,
it is not true that the average in question was occasioned by
the fault of the captain of the vessel Batangueo, for on this
point there is no evidence in the record, but because of the
necessity of throwing overboard part of the cargo of said
vessel to save it from the danger then threatening it;
secondly, the purpose of the adjustment and liquidation of
the gross average is to secure contribution from the parties
interested in the vessel and cargo 'existing at the time of the
occurrence 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 that there must be taken into
consideration, as already stated by us, when we were
discussing this article, the contributing capital determined by
the value of the cargo, that of the vessel in her actual
condition and the percentage of the amount of the freight
reduced by 50 percent for wages and maintenance of the
crew, and further declaring that after the determination 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,
according to the same articles, the owner of the vessel, or
the agent, is also one of the interested parties and
coparticipants in the adjudication of the average and its pro
rata distribution among the contributing values. From what
has just been said it results that no purpose 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
is compelling 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 of the respective capital fixed
according to the rules already stated in the distribution of the
average. This is because, however great the value of the
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 capital determined by the value of the cargo
of 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 can there 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 inferred that it is notoriously
unjust, because the law does not authorize it and it would
be a violation of its positive provisions to compel the
owner 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 to each 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 right
afterwards to bring action or proceed against the other
shippers, as expressed in the same decision. In short, it
would amount to absolutely ignoring the provisions of the
law, which are so clear, express, and positive with respect
not only to the adjustment, liquidation, and distribution 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 "a misconception 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
delinquent in performing the duty which the law imposes on
him," for "clearly," says the same decision, "those provisions
are intended to supply the shipowner, acting of course 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 sharing it;
but the making of the liquidation is not a condition precedent
to the liability of the shipowner to the shipper whose property
has been jettisoned."

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 is erroneous, because
these provisions, which intentionally are extensively
mentioned in this opinion, do not have that object, for the
reason 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, in proportion to their interests and the
respective value of the cargo and vessel, which should be
fixed according to article 850 and the rules for their
assessment, stated in article 854 previously cited, after the
liquidation and approval thereof, and after hearing the
interested parties 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 those participants therein, or,
what is the same thing, if he should be compelled by law to
pay the total value of the average and then partition 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 the
enforcement of the liability of the shipowner to the shipper,
whose goods may have been jettisoned. And this is not what
the law says just as 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 the captain and
institute against him the corresponding action to recover
indemnity, that is, that he has the same right as the shippers
to demand liquidation 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 the shipper whose goods may
have been jettisoned, as stated in the decision in question,

but to the partition which must be made between the agent

or shipowner and the shippers of the respective amount of
the average. This partition, and not that the shipowner
should suffer all loss 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 the crew and the sailing of the vessel, as
well as of the destination of the cargo at the end of the
voyage, and that, for this reason, the principal liability 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
of Commerce, by the following articles: First, article 610,
according to which, among others, it is an inherent power in
the captain to appoint or make contracts with the crew in the
absence of the agent and to propose 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 express refusal.
This provision necessarily implies the absolute power of the
captain to take on and contract the crew, and article 634
confirms it, according to which the captain may make up his
crew with the number he may consider advisable, taking on
resident foreigners, in the absence of nationals, their number
not to exceed one-fifth of the total crew, and may even, with
the consent of the consul or marine authorities, complete his
crew with foreigners in foreign ports if he should 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, article 637 which empowers the captain, for sufficient
cause, to discharge a sailor during the time of his contract
and to refuse, before setting out on 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,
this indemnity 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 and good 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 has just 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 captain directly exercises exclusively personal powers
with respect to the crew and, for this reason, he is personally
and particularly responsible for his acts, except in the only
case already mentioned, in which he may have acted for the
benefit of the vessel.
Another power inherent in the position of captain, according
to article 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 it cannot be inferred
that the shipowner or agent has, through the captain,
complete and exclusive control of the navigation of the
vessel, for the simple reason that the captain may not obey
said instructions 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
refer and indicates those cases which we have heretofore
minutely discussed, in some of which he is personally
responsible, in others the agent or shipowner, or the latter
jointly with the 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 the end 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 he delivers it on the shore or on
the discharging wharf, of the port of unloading, unless the
contrary has been expressly agreed upon, and that,
according to article 620, he is not liable for the damages
caused to the vessel or to the cargo by reason of force
majeure, and article 625 adds that the captain, under his
personal liability, as soon as he arrives at the port of
destination, upon obtaining the necessary permission from
the health and customs officers and fulfilling the other
formalities required 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
the vessel, rigging, and freight, to the agent or shipowner, it
is clear that the latter does not have complete and exclusive
control of the destination 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 said liability with respect
to the vessel, rigging, and freight from the captain. And that
responsibility of the captain cannot be confused with the
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 specifically mentioned the cases of responsibility to
which the same article refers, and the responsibility of the
captain from the moment the cargo is delivered to him until
its unloading is specially declared in article 619 and even
more particularly in article 625 which says that said
responsibility is a personal responsibility of the captain.
It cannot, therefore, be inferred from all the provisions of the
Code. 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 to show its truth, by invoking the
general provisions of the Code of Commerce, which govern
the relations between the captain and the shipowner 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
invoking those which deal with gross averages, as one of the
damages and accidents of maritime commerce, because, in
the first, there is no declaration expressly made upon the
subject, and, in the second, what is established and declared
is precisely the contrary, for the shipowner or agent has, just
as the shippers, the right of action against the captain to
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 to the adjustment, liquidation, and
distribution of the average, and with respect to the
disposition and delivery of the goods saved to the shippers,

before the payment by the latter of their aliquot part in the

partition of the average, or without their having filed a
sufficient bond to 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
shippers and, 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 the
vessel should be personally liable to the owners of the goods
averaged for the damages which were incurred by them, by
reason of his delay or negligence in requiring a bond of the
shippers before delivery to them of the goods saved, this
supposing that they are obliged to do so, instead of
proceeding to the adjustment, liquidation, and distribution of
the gross average, inasmuch as the purpose of the law is to
exact said personal responsibility for the due delivery to the
consignees 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 vessel
Batangueo, but against the captain thereof, and said
defendant cannot and should not be sentenced to pay to the
plaintiff the sum stated in the decision of this court which,
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 plaintiff should 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 of Commerce in the articles mentioned at the
beginning.
Regretting that I have to dissent from the respectable opinion
of the 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.

(a)

Responsibilities and liabilities

'Yu Con v. Ipil, 41 Phil 770

EN BANC
[G.R. No. 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.
SYLLABUS
1.
SHIPPING; LIABILITY OF MASTER AND SUPERCARGO OF
VESSEL FOR LOSS OF MONEY ENTRUSTED TO THEIR CARE.
A certain sum of money was delivered by Y to G and J, master
and supercargo, respectively, of a small craft engaged in the
coastwise trade in the waters of the Philippine Islands, to be
carried together with various merchandise from the port of
Cebu to the town of Catmon of the Province of Cebu, upon
payment of a fixed sum. This money disappeared from said
craft, and it was not proven nor was there any indication that
it was stolen by persons not belonging to the boat, nor that
its disappearance or loss was due to a fortuitous cause or to
force majeure. Held: That, as G and J, the carriers of said sum
received from Y for its delivery to a shop in the town of

Catmon where it had been consigned, were vested with the

character of depositories of the same, and as they failed to
exercise, in its safe-keeping, the diligence required by the
nature of the obligation assumed by them and required by
the circumstances of the time and the place, they are liable,
pursuant to the provisions of articles 1601 and 1602, in
relation to articles 1783, 1784, and 1770 of the Civil Code, for
its loss or misplacement, and are obliged to deliver it to Y,
with the corresponding interest thereon as an indemnity for
the damage caused him through loss of the same.
2.
ID.; WHAT CONSTITUTES A VESSEL. A minor craft
used for the transportation of merchandise by sea and to
make voyages from one port to another of these Islands,
equipped and victualed for this purpose by its owner, is a
vessel, within the purview of the law and for the
determination of the character and effect of the relations
created between the owners of the merchandise laden on it
and its owner, according to the meaning and construction
given to the word vessel by the Mercantile Code in treating of
maritime commerce under Title 1, Book 3.
3.
ID.; LIABILITY OF SHIPOWNER FOR LOSSES CAUSED BY
CAPTAIN. The owner of a minor craft who has equipped
and victualed it for the purpose of using it in the
transportation of merchandise from one port to another of
these Islands is under the law a shipowner, and the master of
the craft is to be considered as its captain in the legal
acceptation of this word, and the former must be held civilly
liable for indemnities in favor of third parties to which the
conduct of the latter of them may give rise in the custody of
the effects laden on the craft, and for all losses which,
through his fault or negligence, may occur to the
merchandise or effects delivered to him for that
transportation as well as for the damages suffered by their
transportation, as those who contracted with him, in
consequence of misdemeanors and crimes committed by him
or by the members of the crew of the craft.
DECISION
ARAULLO, J p:

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 third of the above-named defendants,
master and supercargo, respectively, of a banca named
Maria belonging to the second defendant, to be carried,
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 the
payment 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 the abandonment,
negligence, or voluntary breach, on the part of the
defendants, of the duty they had in respect to the safekeeping of the aforementioned 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, at the price of P10
per diem, and that, through the misfortune, negligence, or
abandonment of the plaintiff himself, the loss complained 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 from Catmon to Cebu. As a
counterclaim, the defendants also asked that the plaintiff be
ordered to pay the freight agreed upon, which had not yet
been 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. They also prayed for the
additional sum of P100, for the deterioration of the said
banca, and also that of P200 for other deterioration suffered

by the same since November, 1911, and which had not been
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, with respect to the counterclaim filed by them in
their answer. On the same date, the plaintiff presented his
answer to said counterclaim, denying each and all of the
allegations thereof and of the defendants' special defense.
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 of the disappearance of the money from the
said banca was the negligence of the master and the
supercargo, the defendants Ipil and Solamo, respectively, and
that the defendant Narciso Lauron was responsible for that
negligence, as owner of the banca, pursuant to articles 586,
587, and 618 of the Code of Commerce, the plaintiff
therefore being entitled to recover the amount lost. Judgment
was rendered on April 20, 1914, in favor of the plaintiff and
against the defendants jointly and severally for the sum of
P450, with interest thereon at the rate of 6 per cent per
annum from the date of filing of the complaint, October 24,
1911, with costs. The plaintiff was absolved from the
defendant's counterclaim. From this judgment the defendants
excepted and at the same time moved for a new trial. Their
motion was denied, to which ruling they also excepted, and,
through the proper bill of exceptions, entered an appeal to
this Supreme Court. In their brief they allege that the trial
court erred:
1.
In applying articles 586, 587, and 618 of the Code of
Commerce in favor of the plaintiff;
2.
In overruling the motion for default presented by the
defendants and in sentencing the defendants jointly and
severally to pay the plaintiff the amount mentioned in the
judgment; and
3.
In absolving the plaintiff from the defendants'
counterclaim.
The evidence shows that the plaintiff Yu Con, a merchant and
a resident of the town of San Nicolas, of the city of Cebu,
engaged in the sale of cloth and domestic articles and having

a share in a shop, or small store, situated in the town of

Catmon, of said province, had several times chartered from
the defendant Narciso Lauron, a banca named Maria
belonging to the latter, of which Glicerio Ipil was master and
Justo Solamo, supercargo, for the transportation of certain
merchandise and some money to and from the said town and
the port of Cebu, that, on or about the 17th of October, 1911,
the plaintiff chartered the said banca from the defendant
Lauron for the transportation of various merchandise from
the port of Cebu to Catmon, at the price of P45 for the round
trip, which merchandise was loaded on board the said craft
which was then at anchor in front of one of the graded fills of
the wharf of said port; that in the afternoon of the following
day, he delivered to the other two defendants, Ipil, and
Solamo, master and supercargo, respectively, of the
aforenamed banca, the sum of P450, which was in a trunk
belonging to the plaintiff and was taken charge of by said two
defendants, who received this money from the plaintiff, for
the purpose of its delivery to the latter's shop in Catmon for
the purchase of corn in this town; that while the money was
still in said trunk aboard the vessel, on the night of the said
18th of October, the time scheduled for the departure of the
Maria from the port of Cebu, said master and said supercargo
transferred the P450 from the plaintiff's trunk, where it was,
to theirs, which was in a stateroom of the banca, from which
stateroom both the trunk and the money disappeared during
that same night, and that the investigations, made to
ascertain their whereabouts, produced no result.
The facts are also admitted by the aforementioned master
and supercargo, two of the defendants, that they received
from the plaintiff said P450, which sum was in the latter's
own trunk which was placed outside the stateroom of the
banca, for the reason, as they said, that there was no room
for it inside the stateroom; that these defendants therefore
transferred said money to their trunk, which was inside the
stateroom, and that this trunk and the P450 therein
contained disappeared from the boat during the night of that
same day; that said sum had not been found or returned to
the plaintiff; that the plaintiff, being on the banca in the
afternoon of that day, when his trunk containing the P450
was carried aboard, and seeing that said two defendants,
who had the key of the trunk, had removed said sum to their

trunk inside the stateroom, charged them to take special care

of the money; that the master Ipil assured the plaintiff that
there was no danger of the money being lost; and that,
finally, during the night in question, both the master and the
supercargo and four cabin-boys were aboard the banca.
It was likewise proven by the affidavits made by the master
Ipil, the supercargo Solamo, and the cabin-boys of said
vessel, Juan Quiamco and Gabriel Basang, before the
provincial fiscal of Cebu on the day following the commission
of the theft, which affidavits were presented at the trial as
Exhibits A, 3, 4, and 5, and by the testimony given at the trial
by the defendants Ipil and Solamo, that both said cabin-boys
and the other two, Simeon Solamo, and Eulalio Quiamco,
knew of the existence of the money in the trunk inside the
stateroom and witnessed its removal to said trunk from the
plaintiff's; that the last two cabin-boys above-named, in
company with the master and the supercargo, conveyed the
plaintiff's trunk, in which the money was previously
contained, from the plaintiff's shop to the banca; and that no
person not belonging to the vessel knew that the money was
in the trunk inside said stateroom.
According to the testimony of the master Ipil himself he slept
outside the stateroom that night, but a cabin-boy named
Gabriel slept inside. The latter, however, was not presented
by the defendants to be examined in regard to this point, nor
does it appear that he testified in respect thereto in his
affidavit, Exhibit 5, before referred to, presented by the
defendants' own counsel. The master Ipil and the supercargo
Solamo also testified that they left the cabin-boy Simeon
Solamo on guard that night; but this affirmation was not
corroborated by Solamo at the trial, for he was not
introduced as a witness, and only his affidavit Exhibit 2, taken
before the fiscal of Cebu on the day following the commission
of the crime, was presented by the defendants. This affidavit,
which should have been admitted and not rejected, as was
done by the court and excepted to by the defendants, shows
that Simeon Solamo stated that he was not designated to do
guard duty that night, but that on the morning of the said
19th of October, that is, the next day, all agreed that affiant
should say that he was on guard, though it was not true that
he was.

Finally, said two defendants, the master and the supercargo,

gave no satisfactory explanation in regard to the
disappearance of the trunk and the money therein contained,
from the stateroom in which the trunk was, nor as to who
stole or might have stolen it. The master of the banca merely
testified that they, he and the supercargo, did not know who
the robbers were, for, when the robbery was committed, they
were sound asleep, as they were tired, and that he believed
that the guard Simeon also fell asleep because he, too, was
tired. The second defendant gave the same testimony. Both
of them testified that the small window of the stateroom had
been broken, and the first of them, i. e., the master, stated
that all the window-blinds had been removed from the
windows, as well as part of the partition in which they were
and that the trunk in which the money was contained could
have been passed through said small window, because, as
this witness himself had verified, the Chinaman's trunk,
which differed but a little from the one stolen, could be
passed through the same opening. The chief pilot of the
harbor of Cebu, Placido Sepeda, who officially visited the said
banca, also stated that the small wooden window of the
stateroom was broken, and that he believed that in breaking
it much noise must have been produced. However, no
evidence whatever was offered by counsel for the defendants
to prove that it might have been possible to remove the trunk
from the stateroom through the opening made by the
breaking of the small window, neither was the size of the
trunk proven, in relation to the Chinaman's to which the
defendant master referred in his testimony, so that it might
be verified whether the statement made by the latter was
true, viz., that it might have been possible to remove from
the stateroom through said opening the trunk in which the
P450 were contained, which sum, the same as the trunk, its
container, had not been found, in spite of the investigation
made for the purpose. Furthermore, it was not proven, nor is
there any circumstantial evidence to show, that the robbery
in question was committed by persons not belonging to the
craft.
It is therefore beyond all doubt that the loss or
disappearance, on the night aforementioned, of the P450, the
property of the plaintiff, which, were in the possession of the
defendants, the master and the supercargo of the banca

Maria, occurred through the manifest fault and negligence of

said defendants, for, not only did they fail to take the
necessary precautions in order that the stateroom containing
the trunk in which they kept the money should be properly
guarded by members of the crew and put in such condition
that it would be impossible to steal the trunk from it or that
persons not belonging to the vessel might force an entrance
into the stateroom from the outside, but also they did not
expressly station some person inside the stateroom for the
guarding and safe-keeping of the trunk, for it was not proven
that the cabin-boy Gabriel slept there, as the master of the
vessel, Ipil, stated, nor that the other cabin-boy, Simeon
Solamo, was on guard that night, for the latter contradicted
the statements made by the two defendants on this point. On
the contrary, it was proven by the master's own statement
that all the people on the vessel, including himself and the
supercargo Solamo, slept soundly that night; which fact
cannot, in any manner, serve them as an excuse, nor can it
be accepted as an explanation of the statement that they
were not aware of what was then occurring on board. if the
trunk was actually stolen by outsiders and removed through
the small window of the stateroom, a detail which also was
not proven, but, on the contrary, increases their liability,
because it is very strange that none of them who were six
and were around or near the stateroom, should have heard
the noise which the robbers must have made in breaking its
window. All of these circumstances, together with that of its
having been impossible to know who took the trunk and the
money and the failure to recover the one or the other, make
the conduct of the two defendants and of the other members
of the crew of the banca, eminently suspicious and prevent
our holding that the disappearance or loss of the money was
due to a fortuitous event, to force majeure, or that it was an
occurrence which could not have been foreseen, or which, if
foreseen, was inevitable.
It is unquestionable that the defendants Glicerio Ipil and Justo
Solamo were the carriers of the said P450 belonging to the
plaintiff, and that they received this sum from the latter for
the purpose of delivering it to the store of the town of
Catmon, to which it had been consigned. Under such
circumstances, said defendants were the depositories of the
money.

Manresa, in his Commentaries on the Civil Code (Vol. 10 p.

773), in treating of the provisions of the said code concerning
transportation by sea and by land of both persons and things,
says:
''Liability of carriers. In order that a thing may be
transported, it must be delivered to the carrier, as the Code
says. From the time it is delivered to the carrier or shipper
until it is received by the consignee, the carrier has it in his
possession, as a necessary condition for its transportation,
and is obliged to preserve and guard it; wherefore it is but
natural and logical that he should be responsible for it.
"The Code discovers in the relation of all these elements the
factors which go to make up the conception of a trust. and,
taking into account that the delivery of the thing on the part
of the shipper is unavoidable, if the transportation is to take
place, esteems that, at least in certain respects, such trusts
are necessary."
The said two defendants being the depositaries of the sum in
question, and they having failed to exercise for its safekeeping the diligence required by the nature of the obligation
assumed by them and by the circumstances of the time and
the place, it is evident that, in pursuance of the provisions of
articles 1601 and 1602, in their relation to articles 1783 and
1784, and as prescribed in article 1770, of the Civil Code,
they are liable for its loss or misplacement and must restore
it to the plaintiff, together with the corresponding interest
thereon as an indemnity for the losses and damages caused
him through the loss of the said sum.
With respect to the other defendant, Narciso Lauron, as he
was the owner of the vessel in which the loss or
misplacement of the P450 occurred, of which vessel, as
aforestated, Glicerio Ipil was master and Justo Solamo,
supercargo, both of whom were appointed to, or chosen for,
the positions they held, by the defendant himself, and, as the
aforementioned sum was delivered to the said master, Ipil,
and the merchandise to be transported by means of said
vessel from the port of Cebu to the town of Catmon was
laden by virtue of a contract executed by and between the
plaintiff and the owner of the vessel, Narciso Lauron, it
behooves us to examine whether the latter, also, should be
held to be liable, as requested by the plaintiff in his
complaint.

Said vessel was engaged in the transportation of

merchandise by sea and made voyages to and from the port
of Cebu to Catmon, and had been equipped and victualed for
this purpose by its owner, Narciso Lauron, with whom, as
aforesaid, the plaintiff contracted for the transportation of the
merchandise which was to be carried, on the date
hereinabove mentioned, from the port of Cebu to the town of
Catmon.
For legal purposes, that is, for the determination of the
nature and effect of the relations created between that
plaintiff, as owner of the merchandise laden on said craft and
of the money that was delivered to the master, Ipil, and the
defendant Lauron, as owner of the craft, the latter was a
vessel, according to the meaning and construction given to
the word vessel in the Mercantile Code, in treating of
maritime commerce, under Title 1, Book 3.
"The word vessel serves to designate every kind of craft by
whatever particular or technical name it may now be known
or which nautical advancements may give it in the future."
(Commentaries on the Code of Commerce, in the General
Review of Legislation and Jurisprudence, founded by D. Jose
Reus y Garcia, Vol. 2, p. 136.)
According to the Dictionary of Legislation and Jurisprudence
by Escriche, a vessel is any kind of craft, considering solely
the hull.
Blanco, the commentator on mercantile law, in referring to
the grammatical meaning of the words "ship" and "vessels,"
says, in his work aforecited, that these terms designate every
kind of craft, large or small, whether belonging to the
merchant marine or to the navy. And referring to their
juridical meaning, he adds: "This does not differ essentially
from the grammatical meaning; the words 'ship' and 'vessel'
also designate every craft, large or small, so long as it be not
an accessory of another, such as the small boat of a vessel,
of greater or less tonnage. This definition comprises both the
craft intended for ocean or for coastwise navigation, as well
as the floating docks, mud lighters, dredges, dumpscows or
any other floating apparatus used in the service of an
industry or in that of maritime commerce. . . ." (Vol. 1, p.
389.)
According to the foregoing definitions, then, we hold that the
banca called Maria, chartered by the plaintiff Yu Con from the

defendant Narciso Lauron, was a "vessel", pursuant to the

meaning this word has in mercantile law, that is, in
accordance with the provisions of the Code of Commerce in
force.
Glicerio Ipil, the master of the said banca, Maria, must also
be considered as its captain, in the legal acceptation of this
word.
The same Code of Commerce in force in these Islands
compares, in its article 609, masters with captains. It is co be
noted that in the Code of Commerce of Spain the
denomination of arraeces is not included in said article as
equivalent to that of masters, as it is in the Code of these
Islands.
Commenting on said article, the aforementioned General
Review of Legislation and Jurisprudence says:
"The name of captain or master is given, according to the
kind of vessel, to the person in charge of it.
"The first denomination is applied to those who govern
vessels that navigate the high seas or ships of large
dimensions and importance, although they be engaged in the
coastwise trade.
"Masters are those who command smaller ships engaged
exclusively in the coastwise trade.
"For the purposes of maritime commerce, the words 'captain'
and 'master' have the same meaning; both being the chiefs
or commanders of ships." (Vol. 2, p. 168.)
Article 587 of the Code of Commerce in force provides:
"The agent shall be civilly liable for the indemnities in favor
of third persons which arise from the conduct of the captain
in the care of the goods which the vessel carried; but he may
exempt himself herefrom by abandoning the vessel with all
her equipments and the freight he may have earned during
the trip."
Article 618 of the same Code also prescribes:
"The captain shall be civilly liable to the agent and the latter
to the third persons who may have made contracts with the
former
"1.
For all the damages suffered by the vessel and its
cargo by reason of want of skill or negligence on his part, If a
misdemeanor or crime has been committed he shall be liable
in accordance with the Penal Code.

"2.
For all the thefts committed by the crew, reserving his
right of action against the guilty parties."
The Code of Commerce previous to the one now in force, to
wit, that of 1829, in its article 624, provided that the agent or
shipowner should not be liable for any excesses which, during
the navigation, might be committed by the captain and crew,
and that, for the reason of such excesses it was only proper
to bring action against the persons and property of those
found guilty.
Estasen, in his work on the Institutes of Mercantile Law (Vol.
4, p. 280), makes the following remarks, in referring to the
exposition of reasons presented by the Code Commission
which prepared and presented for approval the Code of
Commerce now in force, in which exposition of reasons were
set forth the fundamental differences between the provisions
contained in both codes, with respect to the subject-matter
now under discussion.. He says:
"Another very important innovation introduced by the Code is
that relative to the liability for misdemeanors and crimes
committed by the captain or by members of the crew This is
a matter of the greatest importance on which a variety of
opinions has been expressed by different juris-consults.
"The old code declares the captain civilly liable for all
damage sustained by the vessel or its cargo through lack of
skill or care on his part, through violations of the law, or
through unlawful acts committed by the crew. As regards the
agent or shipowner, it declares in unmistakable terms that he
shall in no wise be liable for any excesses which, during the
navigation, may be committed by the captain and the crew.
"Upon an examination, in the light of the principles of modern
law, of the standing legal doctrine on the nonliability of the
shipowner for the unlawful acts, that is, the crimes or quasi
crimes, committed by the captain and the crew, it is
observed that it cannot by maintained in the absolute and
categorical terms in which it is formulated.
"It is well and good that the shipowner be not held criminally
liable for such crimes or quasi crimes; but he cannot be
excused from liability for the damage and harm which, in
consequence of those acts, may be suffered by the third
parties who contracted with the captain, in his double
capacity of agent and subordinate of the shipowner himself.
In maritime commerce, the shippers and passengers in

making contracts with the captain do so through the

confidence they have in the shipowner who appointed him;
they presume that the owner made a most careful
investigation before appointing him, and, above all, they
themselves are unable to make such an investigation, and
even though they should do so, they could not obtain
complete security, inasmuch as the shipowner can, whenever
he sees fit, appoint another captain instead.
"The shipowner is in the same case with respect to the
members of the crew, for, though he does not appoint
directly, yet, expressly or tacitly, he contributes to their
appointment.
"On the other hand, if the shipowner derives profits from the
results of the choice of the captain and the crew, when the
choice turns out successful, it is also just that he should
suffer the consequences of an unsuccessful appointment, by
application of the rule of natural law contained in the
Partidas, viz., that he who enjoys the benefits derived from a
thing must likewise suffer the losses that ensue therefrom.
"Moreover, the Penal Code contains a general principle that
resolves the question under consideration, for it declares that
such persons as undertake and carry on any industry shall be
civilly liable, in default of those who may be criminally liable,
for the misdemeanors and crimes committed by their
subordinates in the discharge of their duties.
"The Code of Commerce in force omits the declaration of
non-liability contained in the old code, and clearly makes the
shipowner liable civilly for the loss suffered by those who
contracted with the captain, in consequence of the
misdemeanors and crimes committed by the latter or by the
members of the crew."
It is therefore evident that, in accordance with the provisions
of the Code of Commerce in force, which are applicable to the
instant case, the defendant Narciso Lauron, as the proprietor
and owner of the craft of which Glicerio Ipil was the master
and in which, through the fault and negligence of the latter
and of the supercargo Justo Solamo, there occurred the loss,
theft, or robbery of the P450 that belonged to the plaintiff
and were delivered to said master and supercargo, a theft
which, on the other hand, as shown by the evidence, does
not appear to have been committed by a person not
belonging to the craft, should, for said loss or theft, be held

civilly liable to the plaintiff, who executed with said

defendant Lauron the contract for the transportation of the
merchandise and money aforementioned between the port of
Cebu and the town of Catmon, by means of the said craft.
Therefore, the trial court did not err in so holding in the
judgment appealed from.
The plaintiff having filed his answer to the cross-complaint as
soon as the defendant presented their motion for a
declaration of the plaintiff's default in connection with said
cross-complaint, and it being optional with the court to make
in such cases the declaration of default, as provided in
section 129 of the Code of Civil Procedure, the said court did
not incur the second error assigned by the appellants in their
brief.
Lastly, as the banca Maria did not make the trip she should
have made from the port of Cebu to the town of Catmon, on
the occasion in question, through causes chargeable, as has
been seen, to the captain and the supercargo of said banca,
to wit, because of the loss, theft or robbery of the P450
belonging to the plaintiff, and as a contract was made for the
transportation of the said sum and the merchandise from one
of said points to the other, for the round trip, and not through
payment by the plaintiff of the wages due the crew for each
day, as alleged by the defendants, for the proofs presented
by the latter in regard to this point were insufficient, as the
trial court so held, neither did the latter incur error in
overruling the cross-complaint formulated by the defendants
in their answer against the plaintiff.
Therefore, and for all the reasons above set forth, we affirm
the judgment appealed from, with the costs of this instance
against the appellants. So ordered.
Torres, Carson, Moreland and Trent, JJ., concur.

value of his vessel; hence, he can not escape liability

because of the sinking of the vessel.
DECISION
REYES, J. B. L., J p:

Manila
Steamship
Abdulhaman, 100 Phil 32

v.

EN BANC
[G.R. No. L-9534. September 29, 1956.]
MANILA STEAMSHIP CO., INC., petitioner, vs. INSA
ABDULHAMAN
(MORO)
and
LIM
HONG
TO,
respondents.
Pacifico de Ocampo for the petitioner.
Felix F. Catis, Fernando P. Blanco and Carlos Camins,
Jr., for respondents.
SYLLABUS
1.
COMMON CARRIERS; MARITIME TORTS; COLLISION
IMPUTABLE TO BOTH VESSELS; LIABILITY OF SHIPOWNERS,
SOLIDARILY. In case of collision between two vessels
imputable to both of them, each vessel shall suffer her own
damage and both shall be solidarily liable for the damages
occasioned to their cargoes. (Article 827, Code of
Commerce.)
2.
ID.; ID.; LIABILITY OF SHIPOWNERS. The shipowner is
directly and primarily responsible in tort resulting in a
collision at sea, and it may not escape liability on the ground
that it exercised due diligence in the selection and
supervision of the vessels's officer and crew.
3.
ID.; ID.; LIABILITY OF SHIPOWNER WHERE OFFICERS OF
THE SHIP ARE UNLICENSED. The owner of a vessel who
had caused the same to sail without licensed officers is liable
for the injuries caused by the collision over and beyond the

This case was begun in the Court of First Instance of

Zamboanga (Civil Case No. 170) by Insa Abdulhaman against
the Manila Steamship Co., owner of the M/S "Bowline Knot",
and Lim Hong To, owner of the M/L "Consuelo V", to recover
damages for the death of his (plaintiff's) five children and
loss of personal properties on board the M/L "Consuelo V" as
a result of a maritime collision between said vessel and the
M/S "Bowline Knot" on May 4, 1948, a few kilometers distant
from San Ramon Beach, Zamboanga City.
On appeal, the Court of Appeals found the following facts to
have been established:
"From 7:00 to 8:00 o'clock in the evening of May 4, 1948, the
M/L "Consuelo V", laden with cargoes and passengers left the
port of Zamboanga City bound for Siokon under the
command of Faustino Macrohon. She was then towing a
kumpit, named "Sta. Maria Bay". The weather was good and
fair. Among her passengers were the plaintiff Insa
Abdulhaman, his wife Carimla Mora and their five children
already mentioned. The plaintiff and his wife paid their fare
before the voyage started.
On that same night the M/S "Bowline Knot" was navigating
from Maribojoc towards Zamboanga.
Between 9:30 to 10:00 in the evening the dark clouds
bloated with rain began to fall and the gushing strong wind
began to blow steadily harder, lashing the waves into a
choppy and roaring sea. Such weather lasted for about an
hour and then it became fair although it was showering and
the visibility was good enough.
When some of the passengers of the M/L "Consuelo V" were
then sleeping and some were lying down awake, all of a
sudden they felt the shocking collision of the M/L "Consuelo
V" and a big motorship, which later on was identified as the
M/V "Bowline Knot".
Because the M/L "Consuelo V" capsized, her crew and
passengers, before realizing what had happened, found

themselves swimming and floating on the crest of the waves

and as a result of which nine (9) passengers were dead and
missing and all the cargoes carried on said boat, including
those of the plaintiff as appear in the list, Exhibit "A", were
also lost.
Among the dead passengers found were Maria, Amlasa,
Bidoaya and Bidalla, all surnamed Inasa, while the body of
the child Abdula Inasa of 6 years of age was never recovered.
Before the collision, none of the passengers were warned or
informed of the impending danger as the collision was so
sudden and unexpected. All those rescued at sea were
brought by the M/V "Bowline Knot" to Zamboanga City."
(Decision of C. A., pp. 5-6).
As the cause of the collision, the Court of Appeals affirmed
the findings of the Board of Marine Inquiry, that the
commanding officer of the colliding vessels had both been
negligent in operating their respective vessels. Wherefore,
the Court held the owners of both vessels solidarily liable to
plaintiff for the damages caused to him by the collision,
under Article 827 of the Code of Commerce; but exempted
defendant Lim Hong To from liability by reason of the sinking
and total loss of his vessel, the M/L "Consuelo V", while the
other defendant, the Manila Steamship Co., owner of the M/S
"Bowline Knot", was ordered to pay all of plaintiff's damages
in the amount of P20,784.00 plus one-half of the costs. It is
from this judgment that defendant Manila Steamship Co. had
appealed to this Court.
Petitioner Manila Steamship Co. pleads that it is exempt from
any liability to plaintiff under Article 1903 of the Civil Code
because it had exercised the diligence of a good father of a
family in the selection of its employees, particularly Third
Mate Simplicio Ilagan, the officer in command of its vessels,
the M/S "Bowline Knot", at the time of the collision. This
defense is untenable. While it is true that plaintiff's action
against petitioner is based on a tort or quasi-delict, the tort in
question is not a civil tort under the Civil Code but a maritime
tort resulting in a collision at sea, governed by Articles 826939 of the Code of Commerce. Under Article 827 of the Code
of Commerce, in case of collision between two vessels
imputable to both of them, each vessel shall suffer her own
damage and both shall be solidarily liable for the damages
occasioned to their cargoes. The characteristic language of

the law in making the "vessels" solidarily liable for the

damages due to the maritime collision emphasizes the direct
nature of the responsibilities on account of the collision
incurred by the shipowner under maritime law, as
distinguished from the civil law and mercantile law in
general. This direct responsibility is recognized in Article 618
of the Code of Commerce under which the captain shall be
civilly liable to the ship agent, and the latter is the one liable
to third persons, as pointed out in the collision case of Yueng
Sheng Exchange & Trading Co. vs. Urrutia & Co., 12 Phil. 747,
753:
"The responsibility involved in the present action is that
derived from the management of the vessel, which was
defective on account of lack of skill, negligence, or fault,
either of the captain or of the crew, for which the captain is
responsible to the agent, who in his turn is responsible to the
third party prejudiced or damaged. (Article 618, Code of
Commerce)."
In fact, it is a general principle, well established maritime law
and custom, that shipowners and ship agents are civilly liable
for the acts of the captain (Code of Commerce, Article 586)
and for the indemnities due the third persons (Article 587); so
that injured parties may immediately look for reimbursement
to the owner of the ship, it being universally recognized that
the ship master or captain is primarily the representative of
the owner (Standard Oil Co. vs. Lopez Castelo, 42 Phil. 256,
260). This direct liability, moderated and limited by the
owner's right of abandonment of the vessel and earned
freight (Article 587), has been declared to exist, not only in
case of breached contracts, but also in cases of tortious
negligence (Yu Biao Sontua vs. Osorio, 43 Phil. 511, 515):
"In the second assignment of error, the appellant contends
that the defendant ought not to be held liable for the
negligence of his agents and employees.
It is proven that the agents and employees, through whose
negligence the explosion and fire in question occurred, were
agents, employees and mandatories of the defendant. Where
the vessel is one of freight, a public concern or public utility,
its owner or agents is liable for the tortious acts of his agents
(Articles 587, 613, and 618 Code of Commerce; and Article
1902, 1903, 1908, Civil Code). This principle has been
repeatedly upheld in various decisions of this court.

The doctrines cited by the appellant in support of his theory

have reference to the relations between principal and agent
in general, but not to the relations between ship agent and
his agents and employees; for this reason they cannot be
applied in the present case."
It is easy to see that to admit the defense of due diligence of
a bonus paterfamilias (in the selection and vigilance of the
officers and crew) as exempting the shipowner from any
liability for their faults, would render nugatory the solidary
liability established by Article 827 of the Code of Commerce
for the greater protection of injured parties. Shipowners
would be able to escape liability in practically every case,
considering that the qualifications and licensing of ship
masters and officers are determined by the State, and that
vigilance is practically impossible to exercise over officers
and crew of vessels at sea. To compel the parties prejudiced
to look to the crew for indemnity and redress would be an
illusory remedy for almost always its members are, from
captains down, mere wage earners.
We, therefore, find no reversible error in the refusal of the
Court of Appeals to consider the defense of the Manila
Steamship Co., that it is exempt from liability for the collision
with the M/L "Consuelo V" due to absence of negligence on
its parts in the selection and supervision of the officers and
crew of the M/S "Bowline Knot".
The case of Walter S. Smith & Co. vs. Cadwallader Gibson
Lumber Co., 55 Phil. 517, invoked by petitioner, is not the
point. Said case treated of a civil tort, in that the vessel of
the defendant, allegedly negligently managed by its captain
in the course of its maneuvers to moor at plaintiff's wharf,
struck the same and partially demolished it, causing damage
to plaintiff. Because the tort allegedly committed was civil,
the provisions of Article 1903 of the Civil Code were correctly
applied. The present case, on the other hand, involves
tortious conduct resulting in a maritime collision; wherefore,
the liability of the shipowner is, as already stated, governed
by the provisions of the Code of Commerce and not by the
Civil Code.
We agree, however, with petitioner-appellant, that the Court
of Appeals was in error in declaring the respondent Lim Hong
To, owner of the M/L "Consuelo V", exempt from liability to
the original plaintiff, Abdulhaman, in view of the total loss of

his own vessel, that sank as a result of the collision. It is to be

noted that both the master and the engineer of the motor
launch "Consuelo V" were not duly licensed as such (Exh. 2).
In applying for permission to operate, despite the lack of
properly trained and experienced, crew, respondent Lim
Hong To gave as a reason
"that the income derived from the vessel is insufficient to pay
licensed officers who demand high salaries",
and expressly declared:
"That in case of any accident, damage or loss, I shall assume
full risk and responsibility for all the consequences thereof."
(Exhibit 2).
His permit to operate, in fact, stipulated
"that in case of any accident, damage or loss, the registered
owner thereof shall assume full risk and responsibility for all
the consequences thereof, and that said vessel shall be held
answerable for any negligence, disregard or violation of any
of the conditions herein imposed and for any consequence
arising from such negligence, disregard or violations."
(Exhibit 3.)
The Court of Appeals held that neither the letter (Exhibit 2)
nor the permit (Exhibit 3) contained any waiver of the right of
respondent Lim Hong To to limit his liability to the value of his
motor launch and that he did not lose the statutory right to
limit his liability by abandonment of the vessel, as conferred
by Article 587 of the Code of Commerce.
We find the ruling untenable. Disregarding the question
whether mere inability to meet the salary demands of duly
licensed masters and engineers constitutes non-availability
thereof that would excuse noncompliance with the law and
authorize operation without licensed officers under Act 3553,
the fact remains that by operating with an unlicensed
master, Lim Hong To deliberately increased the risk to which
the passengers and shippers of cargo aboard the "Consuelo
V" would be subjected. In his desire to reap greater benefits
in the maritime trade, Lim Hong To willfully augmented the
dangers and hazards to his vessel's unwary passengers, who
would normally assume that the launch officers possessed
the necessary skill and experience to evade the perils of the
sea. Hence, the liability of said respondent can not be the
identical to that of a shipowner who bears in mind the safety
of the passengers and cargo by employing duly licensed

officers. To hold, as the Court of Appeals has done, that Lim

Hong To may limit his liability to the value of his vessels, is to
erase all difference between compliance with law and the
deliberate disregard thereof. To such proposition we can not
assent.
The international rule is to the effect that the right of
abandonment of vessels, as a legal limitation of a
shipowner's liability, does not apply to cases where the injury
or the average is due to shipowner's own fault. Faria
(Derecho Comercial Maritimo, Vol. I, pp. 122-123), on the
authority of judicial precedents from various nations, sets the
rule to be as follows:
"Esta generalmente admitido que el propietario del buque no
tiene derecho a la limitacion legal de responsibilidad si los
daos o averias que dan origen a la limitacion provienen de
sus propias culpas. El Convenio de Bruselas de 25 de agosto
de 1924 tambien invalida la limitacion en el caso de culpa
personal en los accidentes o averas sobrevenidos (Art. 2)."
To the same effect, a noted French author states:
"La limitacion de la responsabilidad maritima ha sido
admitida para proteger a los armadores contra los actos
abusivos de sus encargados y no dejar su patrimonio entero
a la discrecion del personal de sus buques, porque este
personal cumple sus obligaciones en condiciones especiales;
pero los armadores no tienen por sobre los demas derecho a
ser amparados contra ellos mismos ni a ser protegidos contra
sus propios actos."
(Danjon, Derecho Maritimo, Vol. 2, p. 332). (Emphasis
supplied.)
That Lim Hong To understood that he would incur greater
liability than that normally borne by shipowners, is clear from
his assumption of " full" risk and responsibility for all the
consequences" of the operation of the M/L "Consuelo V"; a
responsibility expressly assumed in his letter Exhibit 2, and

imposed in his special permit, in addition to the vessel itself

being held answerable. This express assumption of "full risk
and responsibility" would be meaningless unless intended to
broaden the liability of respondent Lim Hong To beyond the
value of his vessel.
In resume, we hold:
(1)
That the Manila Steamship Co., owner of the M/S
"Bowline Knot", is directly and primarily responsible in tort for
the injuries caused to the plaintiff by the collision of said
vessel with the launch "Consuelo V", through the negligence
of the crews of both vessels, and it may not escape liability
on the ground that it exercised due diligence in the selection
and supervision of the officers and crew of the "Bowline
Knot";
(2)
That Lim Hong To, as owner of the motor launch
"Consuelo V", having caused the same to sail without
licensed officers, is liable for the injuries caused by the
collision over and beyond the value of said launch;
(3)
That both vessels being at fault, the liability of Lim
Hong To and Manila Steamship Co. to the plaintiff herein is in
solidum, as prescribed by Article 827 of the Code of
Commerce.
In view of the foregoing, the decision of the Court of Appeals
is modified, and that of the Court of First Instance affirmed, in
the sense of declaring both original defendants solidarily
liable to plaintiff Insa Abdulhaman in the sum of P20,784.00
and the cost of the litigation, without prejudice to the right of
the one who should pay the judgment in full to demand
contribution from his co-defendant.
Paras, C. J., Padilla, Montemayor, Bautista Angelo, Labrador,
Concepcion, Endencia and Felix, JJ., concur.