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IV.

MARITIME COMMERCE
4.1 Topics Participants in maritime commerce Shipowner ( Arts 586, 588, 590 CoC) Art. 586: The shipowner and ship agent shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to repair, equip, ad provision the vessel, provided the creditor proves that the amount claimed was invested for the benefit of the same. By ship agent is understood the person entrusted with provisioning or representing the vessel in the port which it may be found. Art 588: Neither the shipowner nor the ship agent shall be liable for the obligations contracted by the captain, if the latter exceeds the powers and privileges pertaining to him by reason of his position or conferred upon him or conferred upon him by the former. Nevertheless, if the amounts claimed were invested for the benefit of the vessel, the responsibility therefor shall devolve upon its ower or agent. Art 590: The co-owners of the vessel shall be civilly liable, in proportion of their interest in the common fund, for the results of the acts of the captain, referred to in Art 587. Each co-owner may exempt himself from this liability by the abandonment, before a notary, of the part of the vessel belonging to him. Ship Agent (Arts. 586-588, 595-598, 602, 604 and 605, CoC) Art 586. Art 587: The ship agent shall also be civilly liable for the indemnities i favour of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all her equipments ad the freight it may have earned during the voyage. Art 588. Art 595. The ship agent, whether he is at the same time the owner of the vessel, or a manager for an owner or for a association of co-owners, must have the capacity to trade and must be recorded in the merchants registry of the province.

The ship agent shall represent the ownership of the vessel, ad may, in his own name and in such capacity, take judicial and extrajudicial steps in matters relating to commerce. Art 596. The ship agent may discharge the duties of captain of the vessel, subject in every case to the provision of Art 609 If two or more co-owners apply for the provision of captain, the disagreement shall be decided by a vote of the members; and if the vote should result in a tie, it shall be decided i favour of the co-owner having the larger interest in the vessel. If the interests of the applicants should be equal, ad there should be a tie, the matter shall be decided by lot. Art 597. The ship agent shall designate and come to terms with the captain, and shall contract in the name of the owners, who shall be bound in all that refer to repairs, details of equipment, armament, provisions of food and fuel, and freight of the vessel, and, in general, in all that relate to the requirements of navigation. Art 598. The ship agent may not order a new voyage, or make contract for a new charter, or isure the vessel, without the authorization of it owner or resolution of the majority of the co-owners, unless these powers were granted him in the certificate of his appointment. If he insures the vessel without authorization therefore, he shall be subsidiarily liable for the solvency of the insurer. Art 602. The ship agent shall indemnify the captain for all the expenses he may have incurred with fuds of his own or of others, for the benefit of the vessel. Art 604. If the captain or any other member of the crew should be discharged during the voyage, the shall receive their salary until they return to the port where the contract was made, unless there should be just cause for the discharge, all in accordance with Art 636 and following of this Code. Art 605. If the contract of the captain andmembers of the crew with the ship agent should for a definite period or voyage, they may not be discharged until the fulfillmet of their contracts, except by reason of insubordination i serious matters, robbery, theft, habitual drunkenness, or damage caused to the vessel or to its cargo through malice or maniest or proven negligence. Complement of a vessel (Art 648) Art 648. The complement of a vessel shall be understood all persons on board, from the captain to the cabin boy, necessary for the management, maneuvers, and service, and therefore, the complement include the crew, the sailing mates,

engineers, stokers and other employees on board not having specific designations; but it shall include the passengers of the persons whom the vessel is transporting. Captain, master or patron (Art 609-612, 614, 615, 617, 618 and 624, CoC) Art 609. Captains, masters or patrons of vessels be Filipinos, have legal capacity to contract in accordance with this code, and prove the skill, capacity, and qualifications necessary to command and direct the vessel, as established by marine or navigation laws, ordinances, or regulations, and must ot be disqualified according to the same for the discharge of the duties of the position. If the owner of a vessel desires to be the captain thereof, without having the legal qualifications therefor, he shall limit himself to the financial administration of the vessel, and shall intrust the navigation to a person possessing the qualifications reqd by said ordinances and regulations. Art 610. The ff powers shall be inherent in the position of captain, master or patrol of a vessel: 1. To appoint of make contracts with the crew in the absence of the ship agent, and to propose said crew, should said agent be present; but ship agent may not employ any member against the captains express refusal. 2. To command the crew and direct the vessel to the port of its destination, in accordance with the instructions he may have received from the ship agent. 3. To impose, in accordance with the contracts and with the laws and regulations of the merchant marine, and when on board the vessel, correctional punishment upon those who fail to comply with his orders or are wanting in discipline, holding a preliminary hearing on the crimes committed on board the vessel on the seas, which crimes shall be turned over to the authorities having jurisdiction over the same at the 1st port touched. 4. To make contracts for the charter of the vessel in the absence of the ship agent or of its consignee, acting in accordance with the instructions received and protecting the interests of the owner with utmost care. 5. To adopt all proper measures to keep the vessel well supplied and equipped, purchasing all that may be necessary for the purpose, provided there is no time to request instruction from the ship agent. 6. To order, in similar urget cases while on a voyage, the repairs on the hull and engines of the vessel and in its rigging and equipment, which are absolutely necessary to enable it to continue and finish its voyage; but if he should arrive at a point where there is a consignee of the vessel, he shall act in accordance with the latter.

Art 611. In order to comply with the obligations mentioned in the preceding article, the captain, when he has no funds and does not expect to receive any ship agent, shall obtain the same in the successive order stated below: 1. By requesting said funds from the consignee of the vessel or correspondents of the ship agent. 2. By applying to the consignee of the cargo or to those interested therein. 3. By drawing on the ship agent. 4. BY borrowing the amount required by means of a loan on bottomry. 5. By selling a sufficient amount of the cargo to cover the sum absolutely indispensible for the repair of the vessel and to enable it to continue its voyage. In these 2 last cases he must apply to the judicial authority of the port, if in the Philippines, and to the consul of the Republic of the Philippines if in a foreign country, and where there is none, to the local authority, proceeding in accordance with the provisions of Art 583, and with the provisions of the law of civil procedure. Art 612. The ff obligations shall be inherent in the office of the captain: 1. To have on board before starting on a voyage a detailed inventory of the hull, engines, rigging, spare-masts, tackle, and other equipment of the vessel; the royal or the navigation certificate; the roll of persons who make up the crew of the vessel, and the contracts entered into with them; the list of passengers; the bill of health; the certificate of registry proving the ownership of the vessel and all the obligations which encumber the same up to that date; the charter parties or authenticated copies thereof; the invoices or manifests of the cargo, and the memorandum of the visit or inspection by experts, should it have been made at the port of departure. 2. To have a copy of this code on board. 3. To have 3 foied ad stamed books, placing at the beginning of each one a memorandum of the number of folios it contains, signed by the maritime authority, and in his absence by the competent authority. In the first book, which shall be called logbook, he shall enter day by day the condition of the atmosphere, the prevailing winds, the courses taken, the riging carried, the power of the engines used in navigation, the distances covered, the manuevers executed, and other incidents of navigation; he shall also enter the damage suffered by the vessel in her hull, engines rigging, and tackle no matter what its cause may be, as well as the impairment and

damage suffered by cargo, and the effect and importance of the jettison, should there be any; and in cases of serious decisions which require the advice of the crew and passengers, he shall record the decisions adopted. For the information indicated he shall make use of the binnacle book and of the steam of engine kept by the engineer. In the 2nd book called the accounting book, he shall record all the amounts collected and paid for the account of the vessel, entering specifically art by art, the source of the collection and the amounts spent for provisions, repairs, acquisitions of equipment or goods, fuel, food, outfits, wages, and other expenses of whatever nature they may be. He shall furthermore enter therein a list of all the members of the crew, stating their domiciles, their wages and salaries, and the amounts they may have received on account, directly or by delivery to their families. In the third book called the freight book, he shall record the loading and discharge of all the goods, stating their mark and packages, names of the shippers and of the consignees, ports of loading and unloading, and the freightage they give. In this same book he shall record the names and places of sailing of the passengers, the number of packages in their baggage, ad the price of passage. 4. Art 614. A captain who having made and agreement to make a voyage, fails to perform his undertaking, without being perevented by fortuitous accident or force majeure, shall indemnify for all the losses which he may cause without perejudice to the criminal penalties which may be proper. Art 615. Without the cosent of the agent, the captain cannot have himself substituted by another person; and should he do so, besides being liable for all the acts of the substitute and bound to the indemnities mentioned i the foregoing articles, the captain as well as the substitute may be discharged by the ship agent. Art 617. The captain may not contract loans on respondentia secured by cargo; and should he do so, the contracts shall be void. Neither may he borrow money or bottomry for his own transactions, except on the portion of the vessel he owns, provided that o maoney has been previously borrowed of the whole vessel, and there does not exist and other kind of lien or obligation chargeable against the vessel. If he may do so, he must state what interest he has in the vessel. In case of violation of this article, the principal, interest and costs shall be for the personal account of the captain, and the ship agent may furthermore discharge him.

At 618. The captain shall be civilly liable to the ship 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. 3. For all fines and confiscations imposed an account of violation of customs, police, health, and navigation laws and regulations. 4. For the losses and damages caused by mutinies on board the vessel or by reason of faults committed by the crew in the service and defense of the same, if he does not prove that he made timely use of all his authority to prevent or avoid them. 5. For those caused by misuse of the powers of the non fulfilment of the obligations pertaining to him in accordance with Art 610 and 612. 6. For those arising by reason of his going out of his course or taking a course which he should not have taken without sufficient cause, in the opinion of the officers of the vessel, at a meeting with the shippers or supercargoes who may be on board. No exceptions whatsoever shall exempt him from this obligation. 7. For those arising by reason of his voluntary entering a port other than that of his destination, outside of the cases or without the formalities referred to in Art 612. 8. For those arising by reason of non observance of the provisions contained in the regulations on situation of lights and neneuvers for the purpose of preventing collisions. Art 624. A captain whose vessel has gone though a hurricane or who believes that the cargo has suffered damages or averages, shall make a protest thereon before the competent authority at the first port he touches, within 24 hours following his arrival and shall ratify it within the same period when he arrives at his destination, immediately proceeding with the proof of the facts, and he may not open the hatches until after this has been done. The captain shall proceed in the same manner, it, the vessel having been wrecked, he saved alone or with part of his crew, i shich case he shall appear before the nearest authority, and make a sworn statement of facts.

The authority or the sonsul shall verify the said facts receiving sworn statements of the members of the crew and passengers who may have been saved; and taking such other steps as may assist i arriving at the facts he shall make a statement of the result of the proceedings in the log book and in that of the sailing mate, ad shall deliver to the captain the original records of the proceedings, stamped and folioed, with a memorandum of the folios, which he must rubricate, i order that it may be presented to the judge or court of the port of destination. The statement of the captain shall be accepted if it is in accordance with those of the crew and passengers; if they disagree, the latter shall be accepted, always saying proof to the contrary. Sailing or First Mate (Art 627), Second Mate (Art 627) CoC Art 627. The sailing mate, as the second chief of the vessel, and unless the agent orders otherwise, shall take place of the captain in cases of absences, sickness or death, and shall then assume all his powers, duties, and responsibilities. Engineer (Art 632 CoC) Art 632. The ff shall be the obligatios of the second mate: 1. To watch over the reservation of the hull and rigging of the vessel, and to take charge of the preservation of the tackle and equipment which make up her outfit, suggesting to the captain the repairs necessary and the replacement of the goods and implements which are rendered useless and are lost. 2. To take care that the cargo is well arranged, keeping the vessel always ready for maneuver. 3. To preserve order, discipline, and good service among the crew, requesting the necessary orders and Instructions of the captain, and giving him prompt information of any occurrence in which the intervention of his authority may be necessary. 4. To assisgn to each sailor the work he is to do on board, in accordance with the instruction received and to see that it is promptly and accurately carried out. 5. To take charge uder inventory of the rigging ad all the equipment of the vessel, if it should be laid up, unless the ship agent has ordered otherwise. With regard to engineers the ff rules shall govern: 1. In order to be taken on board as a marine engineer forming part of the complement of a merchant vessel, it shall be necessary to have the qualifications which the law and regulations require, and not be disqualified

in accordance therewith for the discharge of his duties. Engineers shall be considered officers of the vessel but they shall have no authority or intervention exept in matters referring to the motor apparatus. 2. When there are two or more engineers on board a vessel, one of them shall be the chief, and the other engineers and all the personnel of the engines shall be under his orders; he shall also have charge of the motor apparatus, the spare parts, the instruments and tools pertaining to, the fuel, the lubricating material and, finally, whatever is entrusted to an engineer on board a vessel. 3. He shall keep the engine and boilers in good condition and state of cleanliness, and shall order what may be proper in order that they may always be ready to work with regularity, being liable for the accidents or damages which his negligence or want of skill may cause to the motor apparatus, to the vessel and to the cargo, without prejudice to the criminal liability which may be proper if there has been a felony or misdemeanour. 4. He shall not make change in the motor apparatus, or proceed to repair the averages he may have noticed in the same, or change the normal speed of its movement without the prior authorization of the captain, to whom, if he should object to their being made, he shall state the proper observations in the presence of the other engineers or officers; and if, notwithstanding this, the captain should insist on his objection, the chief engineer shall make the proper protests, entering the same in the engine book, and shall obey the captain, who, alone shall be responsible for the consequences of his decision. 5. He shall inform the captain of any average which may occur in the motor apparatus, and shall advise him whenever it may be necessary to stop the engines for some time, or when any other incident occurs in his department of which the captain should be immediately informed, besides frequently advising him of the consumption of fuel ad lubricating material. 6. He shall keep a book or registry called the engine book, in which shall be entered all the date referring to the work of the engines, such as, for example, the number of furnaces heated, the vacuum in the condenser, the temperature, the degree of saturation of the water in the boilers the consumption of fuel and lubricating material, and under the heading of noteworthy occurrences, the averages and maladjustments which occur in the engines and boilers, the causes thereof and the means employed to repair the same likewise, the force ad direction of the wind, the rigging set and the speed of the vessel shall be stated, takin the information from the Binnacle Book. Crew (Arts 635-637, CoC)

Art 635. A seaman who has been contracted to serve on a vessel may not rescind his contract or fail to comply therewith exept by reason of legitimate impediment which may have happened to him. Neither may he transfer from the services of one vessel to another without obtaining the written permission of the captain of the vessel on which he may be. If without obtaining said permission, the seaman who has signed for one vessel should sign for another one, the second contract shall be void, and the captain may choose between forcing him to fulfil the service to which he first bound himself, or at his expense to look for a person to substitute him. Furthermore, he shall lose the wages earned on the first contract, to the benefit of the vessel for which he had signed. A captain who, knowig that a seaman is in the service of another vessel, should have made a new agreement with him without having required of him the permission regerred to the captain of the vessel to which the seaman first belonged, for that part of the indemnity, referred to in the 3rd paragraph of this art, which the seamn may not be able to pay. Art 636. If there is no fixed period for which a seaman has been contracted he may not be discharged until the end of the return voyage to the port where he enlisted. Art 637. Neither may the captain discharged a seaman during the time of his contract except for just cause, the ff being considered as such. 1. The perpetration of a crime which disturbs order on the vessel. 2. Repeated insubordination, want of discipline, or o fulfilment of the service. 3. Repeated incapacity and negligence in the fulfilment of the service he should render. 4. Habitual drunkenness 5. Any occurrence which incapacitates the seaman to perform the work entrusted to him, with the exception of that provided in Art 644. 6. Desertion The captain may, however, before getting out on a voyage and without getting out on a voyage and without giving any reason, refuse to permit a seaman whom he may have engaged to go on board, and leave him on land, in which case he will be obliged to pay him his wages as if he had rendered services.

This indemnity shall be paid from the funds of the vessel if the captain should have acted for reasons of prudence and in the interest of the safety and good services of the former. Should this not be the case, it shall be paid to the captain personally. After the voyage has begum, during the same, and until the conclusion thereof, the captain may not abandon any member of his crew on land or on sea, unless, by reason of some crime, his imprisonment and delivery to the component authority i the first port touched should be proper, a matter obligatory for the captain. Books to be kept (Arts 612(3), 629 and 632(6), CoC) Art 612 . The ff obligations shall be inherent in the office of the captain: (3). To have 3 foiled and stamped books, placing at the beginning of each one a memorandum of the number of folios it contains, signed by the maritime authority, and in his absence by the competent authority. In the first book, which shall be called logbook, he shall enter day by day the condition of the atmosphere, the prevailing winds, the courses taken, the rigging carried, the power of the engines used in navigation, the distances covered, the maneuvers executed, and other incidents of navigation; he shall also enter the damage suffered by the vessel in her hull, engines rigging, and tackle no matter what its cause may be, as well as the impairment and damage suffered by cargo, and the effect and importance of the jettison, should there be any; and in cases of serious decisions which require the advice of the crew and passengers, he shall record the decisions adopted. For the information indicated he shall make use of the binnacle book and of the steam of engine kept by the engineer. In the 2nd book called the accounting book, he shall record all the amounts collected and paid for the account of the vessel, entering specifically art by art, the source of the collection and the amounts spent for provisions, repairs, acquisitions of equipment or goods, fuel, food, outfits, wages, and other expenses of whatever nature they may be. He shall furthermore enter therein a list of all the members of the crew, stating their domiciles, their wages and salaries, and the amounts they may have received on account, directly or by delivery to their families. In the third book called the freight book, he shall record the loading and discharge of all the goods, stating their mark and packages, names of the shippers and of the consignees, ports of loading and unloading, and the freightage they give. In this same book he shall record the names and places of sailing of the passengers, the number of packages in their baggage, and the price of passage.

Art 629. The sailing mate shall particularly and personally keep a book, foiled and stamped on all its pages, denominated Binnacle Book with a memorandum at the beginning stating the number of folios it contains, signed by the competent authority, and shall enter therein daily the distance, the course travelled, the variations of the needle, the leeway, the direction and force of the wind, the condition of the atmosphere and of the sea, the rigging set, the latitude and longtitude observed, the number of furnace heated, the steam pressure, the number of revolutions, and under the title incidents, the maneuvers made, the meeting with other vessels, and all the details and incidents which may occur during the voyage. Art 632 (6) Ship Husband SHIP'S HUSBAND, mar. law. An agent appointed by the owner of a ship, and invested with authority to make the requisite repairs, and attend to the management, equipment, and other concerns of the ship he is usually authorized to act as the general agent of the owners, in relation to the ship in her home port. Pilot A pilot in maritime law, is a person duly qualified, and licensed, to conduct a vessel into our ports, or in certain waters. In a broad sense, the term pilot includes both: 1. Those whose duty is to guide vessels into or out of ports, or in particular waters, and 2. Those entrusted with the navigation of vessels on high seas. However, the term pilot is more generally understood as a person taken on board at a particular place for the purpose of conducting a ship thrpugh a river, road or channel or from a port. 4.2 Cases Duties of a captain Inter-orient Maritime Enterprises Inc. vs. NLRCG.R. No. 115286 August 11, 1994 F A C T S : P r i v a t e r e s p o n d e n t C a p t a i n R i z a l i n o Tayong, a licensed Master Mariner with experience in commanding ocean-going vessels, was employed by petitioners Trenda World Shipping (Manila), Inc.a n d S e a H o r s e S h i p M a n a g e m e n t , I n c . t h r o u g h petitioner Inter-Orient Maritime Enterprises, Inc. asMaster of the vessel M/V Oceanic Mindoro , for a p e r i o d o f o n e ( 1 ) y e a r , a s e v i d e n c e d b y a n employment contract. Captain Tayong assumed c o m m a n d o f petitioners' vessel at the port of Hongkong. His instructions w e r e t o r e p l e n i s h bunker and diesel fuel, to sail forthwith to RichardBay, South Africa, and there to load 120,000 metrictons of coal.

O n 1 6 J u l y 1 9 8 9 , w h i l e a t t h e P o r t o f Hongkong and in the process of unloading cargo, C a p t a i n T a y o n g r e c e i v e d a w e a t h e r report that astorm code-named "Gordon" would shortly hit Hongkong. Precautionary measures were taken to secure the safety of the vessel, as well as its crew, c o n s i d e r i n g t h a t t h e v e s s e l ' s t u r b o c h a r g e r w a s leaking and the vessel was fourteen (14) years old. Captain Tayong followed-up the requisition by the former captain of the Oceanic Mindoro for supplies of oxygen and acetylene, necessary for the welding-repair of the turbocharger and the economizer. The vessel sailed from Hong Kong for S i n g a p o r e H e w a s i n s t r u c t e d t o s h u t d o w n t h e economizer and use the auxiliary boiler instead. The vessel arrived at the port of Singapore. M r . C l a r k r e c e i v e d a c a l l f r o m C a p t a i n Tayong informing him that the vessel cannot sail without the oxygen and acetylene for safety reasons d u e t o t h e p r o b l e m s w i t h t h e t u r b o c h a r g e r a n d economizer. Mr. Clark responded that by shutting off the water to the turbo chargers and using the a u x i l i a r y b o i l e r , t h e r e s h o u l d b e n o f u r t h e r problems. According to Captain Tayong, however, h e c o m m u n i c a t e d t o S e a H o r s e h i s r e s e r v a t i o n s regarding proceeding to South Africa without the requested supplies, and was advised by Sea Horse to wait for the supplies. the requisitioned supplieswere delivered and Captain Tayong immediately sailed for Richard Bay. W h e n t h e v e s s e l a r r i v e d a t t h e p o r t o f R i c h a r d B a y , S o u t h A f r i c a o n 1 6 A u g u s t 1 9 8 9 , Captain Tayong was instructed to turn-over his post to the new captain. He was thereafter repatriated to the Philippines, after serving petitioners for a little more than two weeks. He was not informed of thecharges against him. On 5 October 1989, Captain Tayong instituted a complaint for illegal dismissal before the Philippine Overseas Employment Administration ("POEA"),claiming his unpaid salary for the unexpired portion of the written employment contract, plus attorney's fees. Petitioners, in their answer to the complaint , d e n i e d t h a t t h e y h a d i l l e g a l l y d i s m i s s e d C a p t a i n Tayong. They stated that they had dismissed private respondent for loss of trust and confidence. T h e P O E A d i s m i s s e d C a p t a i n T a y o n g ' s complaint and held that there was valid cause for his untimely repatriation. all the time lost as a result of the delay was caused by Captain Tayong and that this concern for the oxygen and acetylene was not legitimate as these supplies were not necessary or i n d i s p e n s a b l e f o r r u n n i n g t h e v e s s e l a n d h e unreasonably refused to follow the instructions of p e t i t i o n e r s a n d t h e i r r e p r e s e n t a t i v e , d e s p i t e petitioners' firm assurances that t h e v e s s e l w a s seaworthy for the voyage to South Africa. O n a p p e a l , t h e N a t i o n a l L a b o r R e l a t i o n s Commission ("NLRC") reversed and set aside the d e c i s i o n o f t h e P O E A . T h e N L R C f o u n d t h a t C a p t a i n T a y o n g h a d n o t b e e n a f f o r d e d a n opportunity to be

heard and that no substantial evidence was adduced to establish the basis for p e t i t i o n e r s ' l o s s o f t r u s t o r c o n f i d e n c e i n t h e Captain. The NLRC declared that he had only acted i n a c c o r d a n c e w i t h h i s d u t i e s t o m a i n t a i n t h e seaworthiness of the vessel and to insure the safety o f t h e s h i p a n d t h e c r e w . T h e N L R C d i r e c t e d petitioners to pay the Captain (a) his salary for the unexpired portion of the contract at US$1,900.00 a month, plus one (1) month leave benefit; and (b)attorney's fees equivalent to ten percent (10%) of the total award due. Petitioners, before this Court, claim that the N L R C h a d a c t e d w i t h g r a v e a b u s e o f d i s c r e t i o n . Petitioners allege that they had adduced sufficient e v i d e n c e t o e s t a b l i s h t h e b a s i s f o r p r i v a t e respondent's discharge, contrary to the conclusion reached by the NLRC. Petitioners insist that Captain Tayong, who must protect the interest of petitioners, had caused them unnecessary damage, and that they, a s o w n e r s o f t h e v e s s e l , c a n n o t b e c o m p e l l e d t o keep in their employ a captain of a vessel in whom they have lost their trust and confidence. Petitioners finally contend that the award to the Captain of his salary corresponding to the unexpired portion of the c o n t r a c t a n d o n e ( 1 ) month leave pay, including attorney's fees, also constituted grave a b u s e o f discretion. ISSUES :whether or not Captain Tayong had reasonable grounds to believe that the safety of the vessel and the crew under his command or the possibility of substantial delay at sea required him to wait for the delivery of the supplies needed for the repair of the turbo-charger and the economizer before embarking on the long voyage from Singapore to South Africa. : Whether or not a managerial employee can be dismissed at any time. HELD : I t i s w e l l s e t t l e d i n t h i s j u r i s d i c t i o n t h a t confidential and managerial employees cannot be arbitrarily dismissed at any time, and without cause a s r e a s o n a b l y e s t a b l i s h e d i n a n a p p r o p r i a t e investigation. The captain of a vessel is a confidential and managerial employee within the meaning of the above doctrine. A master or captain, for purposes of maritime commerce, is one who has command of a vessel. A captain commonly performs three (3) distinct roles: (1) he is a general agent of the shipowner; (2) he is also commander and technical director of the vessel; and (3) he is a representative of the country under whose flag he navigates. 16 Of these roles, by far the most important is the role performed by the captain as commander of the vessel; for such role (which, to our mind, is analogous to that of "Chief Executive Officer" [CEO] of a present-day corporate enterprise) has to do with the operation and preservation of the vessel during its voyage and the protection of the passengers (if any) and crew and cargo. In his role as general agent of the shipowner, the captain has authority to sign bills of lading, carry goods aboard and deal with the freight earned, agree upon rates and decide

whether to take cargo. The ship captain, as agent of the shipowner, has legal authority to enter into contracts with respect to the vessel and the trading of the vessel, subject to applicable limitations established by statute, contract or instructions and regulations of the shipowner. 17 To the captain is committed the governance, care and management of the vessel. 18 Clearly, the captain is vested with both management and fiduciary functions. Such employees, too, are entitled to security of tenure, fair standards of employment and the protection of labor laws. It is plain from the records of the present petition that Captain Tayong was denied any opportunity to defend himself. Petitioners curtly dismissed him f r o m h i s c o m m a n d a n d s u m m a r i l y o r d e r e d h i s repatriation to the Philippines without informing him of the charge or charges levelled against him, a n d m u c h l e s s g i v i n g h i m a c h a n c e t o r e f u t e a n y such charge. It is the right and duty of the captain, in the exercise o f s o u n d d i s c r e t i o n a n d i n g o o d f a i t h , t o d o a l l things with respect to the vessel and its equipment a n d c o n d u c t o f t h e v o y a g e w h i c h a r e r e a s o n a b l y necessary for the protection and preservation of the interests under his charge, whether those be of the s h i p o w n e r s , c h a r t e r e r s , c a r g o o w n e r s o r o f underwriters. It is a basic principle of admiralty law that in navigating a merchantman, the master must be left free to exercise his own best judgment. More importantly, a ship's captain must be accorded a reasonable measure of discretionary authority to decide what the safety of the ship and of its crew and cargo specifically requires on a stipulated ocean voyage. The captain is held responsible, and properly so, for such safety. He is right there on the vessel, in command of it and (it must be presumed) knowledgeable as to the specific requirements of seaworthiness and the particular risks and perils of the voyage he is to embark upon. The applicable principle is that the captain has control of all departments of service in the vessel, and reasonable discretion as to its navigation. 20 It is the right and duty of the captain, in the exercise of sound discretion and in good faith, to do all things with respect to the vessel and its equipment and conduct of the voyage which are reasonably necessary for the protection and preservation of the interests under his charge, whether those be of the shipowners, charterers, cargo owners or of underwriters. 21 It is a basic principle of admiralty law that in navigating a merchantman, the master must be left free to exercise his own best judgment. The requirements of safe navigation compel us to reject any suggestion that the judgment and discretion of the captain of a vessel may be confined within a straitjacket, even in this age of electronic communications. 22 Indeed, if the ship captain is convinced, as a reasonably prudent and competent mariner acting in good faith that the shipowner's or ship agent's instructions (insisted upon by radio or telefax from their offices thousands of miles away) will result, in the very specific circumstances facing him, in imposing unacceptable risks of loss or

serious danger to ship or crew, he cannot casually seek absolution from his responsibility, if a marine casualty occurs, in such instructions. 23 Under all the circumstances of this case, we, a l o n g w i t h t h e N L R C , a r e unable to hold that C a p t a i n T a y o n g ' s d e c i s i o n ( a r r i v e d a t a f t e r consultation with the vessel's Chief Engineer) to wait seven (7) hours in Singapore for the delivery on board the Oceanic Mindoro of the requisitioned supplies needed for the welding-repair, on board the s h i p , o f t h e turbo-charger and the economizer e q u i p m e n t o f t h e v e s s e l , c o n s t i t u t e d m e r e l y arbitrary, capricious or g r o s s l y i n s u b o r d i n a t e behavior on his part. In the view of the NLRC, that d e c i s i o n o f C a p t a i n T a y o n g d i d n o t c o n s t i t u t e a legal basis for the summary dismissal of Captain T a y o n g a n d f o r t e r m i n a t i o n o f h i s contract with p e t i t i o n e r s p r i o r t o t h e e x p i r a t i o n o f t h e t e r m thereof. Clearly, petitioners were angered at CaptainTayong's decision to wait for delivery of the needed supplies before sailing from Singapore, and mayhave changed their estimate of their ability to work with him and of his capabilities as a ship captain.A s s u m i n g t h a t t o b e p e t i t i o n e r s ' m a n a g e m e n t prerogative, that prerogative is nevertheless not to be exercised, in the case at bar, at the cost of loss of C a p t a i n T a y o n g ' s r i g h t s u n d e r h i s c o n t r a c t w i t h petitioners and under Philippine law 5.2 Case Salvage distinguished from towage Barrios vs. Go Thong (GR L-17192, 30 March 1963) En Banc, Barrera (J): 10 concur Facts: Honorio M. Barrios was, on May 1 and 2, 1958, captain and/or master of the MV Henry I of theWilliam Lines Incorporated, of Cebu City, plying between and to and from Cebu City and other southerncities and ports, among which are Dumaguete City, Zamboanga City, and Davao City. At about 8:00 p.m. of 1May 1958, Barrios in his capacity as such captain and/or master of the aforesaid MV Henry I, received orotherwise intercepted an S.O.S. distress signal by blinkers from the MV Alfredo, owned and/or operated byCarlos A. Go Thong & Company. Acting on and/or answering the S.O.S. call, Barrios, also in his capacity ascaptain and/or master of the MV Henry I, which was then sailing or navigating from Dumaguete City, alteredthe course of said vessel, and steered and headed towards the beckoning MV Don Alfredo, which Barriosfound to be in trouble, due to engine failure and the loss of her propeller, for which reason, it was driftingslowly southward from Negros Island towards Borneo in the open China Sea, at the mercy of a moderateeasterly wind. At about 8:25 p.m. on the same day, the MV Henry, under the command of Barrios, succeededin getting near the MV Don Alfredo in fact as near as 7 seven meters from the latter ship and with the consent and knowledge of the captain and/or master of the MV Don Alfredo, Barrios caused the latter vesselto be tied to, or well-

secured and connected with tow lines from the MV Henry I; and in that manner, positionand situation, the latter had the MV Don Alfredo in tow and proceeded towards the direction of DumagueteCity, as evidenced by a written certificate to this effect executed and accomplished by the Master, the ChiefEngineer, the Chief Officer, and the Second Engineer of the MV Don Alfredo, who were then on board thelatter ship at the time of the occurrence stated above. At about 5:10 a.m., 2 May 1958, or after almost 9 hoursduring the night, with the MV Don Alfredo still in tow by the MV Henry I, and while both vessels wereapproaching the vicinity of Apo Island off Zamboanga town, Negros Oriental, the MV Lux, a sister ship of theMV Don Alfredo, was sighted heading towards the direction of the aforesaid two vessels, reaching then 15minutes later, or at about 5:25 a.m. Thereupon, at the request and instance of the captain and/or master of theMV Don Alfredo, Barrios caused the tow lines to be released, thereby also releasing the MV Don Alfredo.Barrios concludes that they establish an impending sea peril from which salvage of a ship worth more thanP100 000.00, plus life and cargo was done, while Go Thong insists that the facts made out no such case, butthat what merely happened was only mere towage from which Barrios cannot claim any compensation orremuneration independently of the shipping company that owned the vessel commanded by him. Brought tothe CFI of Manila (Civil Case 37219), the court therein dismissed the case; with cost against Barrios. Barriosinterposed an appeal.The Supreme Court affirmed the decision of the lower court in all respects, with costs against Barrios.