G.R. No.

154305             December 9, 2004

MACONDRAY & CO., INC., petitioner,

vs.
PROVIDENT INSURANCE CORPORATION, respondent.

Appeals; Factual findings of the Court of Appeals—when not in conflict with those of the trial court—
are not disturbed by the Supreme Court, to which only questions of law may be raised in an appeal
by certiorari.—As a rule, factual findings of the Court of Appeals—when not in conflict with those of
the trial court—are not disturbed by this Court, to which only questions of law may be raised in an
appeal by certiorari. In the present case, we find no compelling reason to overturn the Court of
Appeals in its categorical finding that petitioner was the ship agent. Such factual finding was not in
conflict with the trial court’s ruling, which had merely stated that petitioner was not the agent of Trade
and Transport. Indeed, although it is not an agent of Trade and Transport, petitioner can still be the
ship agent of the vessel M/V Trade Carrier.

Code of Commerce; Maritime Law; Ship Agents; Words and Phrases; A ship agent is “the person
entrusted with provisioning or representing the vessel in the port in which it may be found.”—Article
586 of the Code of Commerce states that a ship agent is “the person entrusted with provisioning or
representing the vessel in the port in which it may be found.” Hence, whether acting as agent of the
owner of the vessel or as agent of the charterer, petitioner will be considered as the ship agent and
may be held liable as such, as long as the latter is the one that provisions or represents the vessel.

Same; Same; Same; The acts of a corporation in preparing the Notice of Readiness, the Statement
of Facts, the Completion Notice, the Sailing Notice and Custom’s Clearance, and in preparing the
needs of the vessel, like money, provision, water and fuel, all point to the conclusion that it was the
entity that represented the vessel and was the ship agent within the meaning and context of Article
586 of the Code of Commerce.—The trial court found that petitioner “was appointed as local agent of
the vessel, which duty includes arrangement for the entrance and clearance of the vessel.” Further,
the CA found and the evidence shows that petitioner represented the vessel. The latter prepared the
Notice of Readiness, the Statement of Facts, the Completion Notice, the Sailing Notice and
Custom’s Clearance. Petitioner’s employees were present at Sangi, Toledo City, one day before the
arrival of the vessel, where they stayed until it departed. They were also present during the actual
discharging of the cargo. Moreover, Mr. de la Cruz, the representative of petitioner, also prepared for
the needs of the vessel, like money, provision, water and fuel. These acts all point to the conclusion
that it was the entity that represented the vessel in the Port of Manila and was the ship agent within
the meaning and context of Article 586 of the Code of Commerce.

Same; Same; Same; A ship agent may be held civilly liable in certain instances, as provided for in
Articles 586 and 587 of the Code of Commerce.—As ship agent, it may be held civilly liable in
certain instances. The Code of Commerce provides: “Article 586. The shipowner and the ship agent
shall be civilly liable for the acts of the captain and for the obligations contracted by the latter to
repair, equip, and provision the vessel, provided the creditor proves that the amount claimed was
invested for the benefit of the same.” “Article 587. The ship agent shall also be civilly liable for the
indemnities in favor of third persons which may arise from the conduct of the captain in the care of
the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the
vessel with all her equipments and the freight it may have earned during the voyage.”

Attorneys; Pleadings and Practice; The court cannot be expected to take judicial notice of the new
address of a lawyer who has moved or to ascertain on its own whether or not the counsel of record
has been changed and who the new counsel could possibly be or whether he probably resides or
holds office.—In the present case, service of the assailed Decision was made on petitioner’s
counsels of record, Attys. Moldez and Galoz, on March 6, 2002. That copy of the Decision was,
however, returned to the sender for the reason that the addressee had “move[d] out.” If counsel
moves to another address without informing the court of that change, such omission or neglect is
inexcusable and will not stay the finality of the decision. “The court cannot be expected to take
judicial notice of the new address of a lawyer who has moved or to ascertain on its own whether or
not the counsel of record has been changed and who the new counsel could possibly be or where
he probably resides or holds office.”

Same; The negligence of counsel binds the client—service made upon the present counsel of record
at his given address is service to the client; A client should take the initiative of periodically keeping
in touch with its counsel, checking with the court, and inquiring about the status of its case.—It is
unfortunate that the lawyer of petitioner neglected his duties to the latter. Be that as it may, the
negligence of counsel binds the client. Service made upon the present counsel of record at his given
address is service to petitioner. Hence, the assailed Decision has already become final and
unappealable. In the present case, there is no compelling reason to overturn well-settled
jurisprudence or to interpret the rules liberally in favor of petitioner, who is not entirely blameless. It
should have taken the initiative of periodically keeping in touch with its counsel, checking with the
court, and inquiring about the status of its case. In so doing, it could have taken timely steps to
neutralize the negligence of its chosen counsel and to protect its interests. “Litigants represented by
counsel should not expect that all they need to do is sit back, relax and await the outcome of their
case.” Macondray & Co., Inc. vs. Provident Insurance Corporation, 445 SCRA 644, G.R. No. 154305
December 9, 2004

DECISION

PANGANIBAN, J.:

Hornbook is the doctrine that the negligence of counsel binds the client. Also settled is the rule that
clients should take the initiative of periodically checking the progress of their cases, so that they
could take timely steps to protect their interest.

The Case

Before us is a Petition for Review under Rule 45 of the Rules of Court, seeking to set aside the
1 

February 28, 2002 Decision and the July 12, 2002 Resolution of the Court of Appeals (CA) in CA-
2  3 

GR CV No. 57077. The dispositive portion of the Decision reads as follows:

"WHEREFORE, premises considered, the assailed Decision dated September 17, 1996 is
hereby REVERSED and SET ASIDE. Accordingly, [Petitioner] Macondray & Co., Inc., is
hereby ORDERED to pay the [respondent] the amount of P1,657,700.95."

The assailed Resolution denied petitioner's Motion for Reconsideration.

The Facts

The CA adopted the factual antecedents narrated by the trial court, as follows:
"x x x. On February 16, 1991, at Vancouver, B.C. Canada, CANPOTEX SHIPPING
SERVICES LIMITED INC., of Saskatoon, Saskatchewan, (hereinafter the SHIPPER),
shipped and loaded on board the vessel M/V 'Trade Carrier', 5000 metric tons of Standard
Grade Muriate of Potash in bulk for transportation to and delivery at the port of Sangi, Toledo
City, Cebu, in favor of ATLAS FERTILIZER CORPORATION, (hereinafter CONSIGNEE)
covered by B/L Nos. VAN-SAN-1 for the 815.96 metric tons and VAN-SAN-2 for the 4,184.04
metric tons. Subject shipments were insured with [respondent] against all risks under and by
virtue of an Open Marine Policy No. MOP-00143 and Certificate of Marine Insurance No.
CMI-823-91.

"When the shipment arrived, CONSIGNEE discovered that the shipment sustained
losses/shortage of 476.140 metric tons valued at One Million Six Hundred Fifty Seven
Thousand Seven Hundred Pesos and Ninety Five Centavos (P1,657,700.95), Philippine
Currency. Provident paid losses. Formal claims was then filed with Trade & Transport and
Macondray but the same refused and failed to settle the same. Hence, this complaint.

"As per Officer's Return dated 4 June 1992, summons was UNSERVED to defendant
TRADE AND TRANSPORT at the given address for reason that TRADE AND TRANSPORT
is no longer connected with Macondray & Co. Inc., and is not holding office at said address
as alleged by Ms. Guadalupe Tan. For failure to effect service of summons the case against
TRADE & TRANSPORT was considered dismissed without prejudice.

"Defendant MACONDRAY filed ANSWER, denying liability over the losses, having NO
absolute relation with defendant TRADE AND TRANSPORT, the alleged operator of the
vessel who transported the subject shipment; that accordingly, MACONDRAY is the local
representative of the SHIPPER; the charterer of M/V TRADE CARRIER and not party to this
case; that it has no control over the acts of the captain and crew of the Carrier and cannot be
held responsible for any damage arising from the fault or negligence of said captain and
crew; that upon arrival at the port of Sangi, Toledo City, Cebu, the M/V Trade Carrier
discharged the full amount of shipment, as shown by the draft survey with a total quantity of
5,033.59 metric tons discharged from the vessel and delivered to the CONSIGNEE.

"ISSUES: Whether or not Macondray and Co. Inc., as an agent is responsible for any loss
sustained by any party from the vessel owned by defendant Trade and Transport. "Whether
or not Macondray is liable for loss which was allegedly sustained by the plaintiff in this case.

"EVIDENCE FOR THE PLAINTIFF

"Plaintiff presented the testimonies of Marina Celerina P. Aguas and depositions of Alberto
Milan and Alfonso Picson submitted as additional witnesses for PROVIDENT to prove the
material facts of the complaint are deemed admitted by defendant MACONDRAY, on their
defense that it is not an agent of TRADE AND TRANSPORT.

"EVIDENCE FOR THE DEFENDANT MACONDRAY:

"Witness Ricardo de la Cruz testified as Supercargo of MACONDRAY, that MACONDRAY

was not an agent of defendant TRADE AND TRANSPORT; that his functions as Supercargo
was to prepare a notice of readiness, statement of facts, sailing notice and custom's
clearance in order to attend to the formalities and the need of the vessel; that MACONDRAY
is performing functions in behalf of CANPOTEX and was appointed as local agent of the
vessel, which duty includes arrangement of the entrance and clearance of the vessel."
 The trial court, in the decision dated September 17, 1996 earlier adverted to, ruled in favor of
the [petitioner] x x x, the dispositive portion of which reads:

"WHEREFORE, PREMISES CONSIDERED, the case as against [petitioner] MACONDRAY

is hereby DISMISSED.

"No pronouncement as to costs." 4

Ruling of the Court of Appeals

The CA affirmed the trial court's finding that petitioner was not the agent of Trade and Transport. The
appellate court ruled, however, that petitioner could still be held liable for the shortages of the
shipment, because the latter was the ship agent of Canpotex Shipping Services Ltd. -- the shipper
and charterer of the vessel M/V Trade Carrier.

All told, the CA held petitioner "liable for the losses incurred in the shipment of the subject cargoes to
the [respondent], who, being the insurer of the risk, was subrogated to the rights and causes of
action which the consignee, Atlas Fertilizer Corporation, had against the [petitioner]." 5

Hence, this Petition. 6

The Issues

Petitioner raises the following issues for our consideration:

"Whether or not liability attached to petitioner despite the unequivocal factual findings, that it
was not a ship agent.

"Whether or not the 28 February 2002 Decision of the Court of Appeals has attained finality.

"Whether or not by filing the instant Petition for Review on Certiorari, petitioner is guilty of
forum-shopping." 7

The Court's Ruling

The Petition has no merit.

First Issue:

Petitioner's Liability

As a rule, factual findings of the Court of Appeals -- when not in conflict with those of the trial court --
are not disturbed by this Court, to which only questions of law may be raised in an appeal by
8 

certiorari.
9

In the present case, we find no compelling reason to overturn the Court of Appeals in its categorical
finding that petitioner was the ship agent. Such factual finding was not in conflict with the trial court's
ruling, which had merely stated that petitioner was not the agent of Trade and Transport. Indeed,
although it is not an agent of Trade and Transport, petitioner can still be the ship agent of the vessel
M/V Trade Carrier.
Article 586 of the Code of Commerce states that a ship agent is "the person entrusted with
provisioning or representing the vessel in the port in which it may be found."

Hence, whether acting as agent of the owner of the vessel or as agent of the charterer, petitioner
10  11 

will be considered as the ship agent and may be held liable as such, as long as the latter is the one
12 

that provisions or represents the vessel.

The trial court found that petitioner "was appointed as local agent of the vessel, which duty includes
arrangement for the entrance and clearance of the vessel." Further, the CA found and the evidence
13 

shows that petitioner represented the vessel. The latter prepared the Notice of Readiness, the
Statement of Facts, the Completion Notice, the Sailing Notice and Custom's Clearance. Petitioner's
14 

employees were present at Sangi, Toledo City, one day before the arrival of the vessel, where they
stayed until it departed. They were also present during the actual discharging of the
cargo. Moreover, Mr. de la Cruz, the representative of petitioner, also prepared for the needs of the
15 

vessel, like money, provision, water and fuel. 16

These acts all point to the conclusion that it was the entity that represented the vessel in the Port of
Manila and was the ship agent within the meaning and context of Article 586 of the Code of
17 

Commerce.

As ship agent, it may be held civilly liable in certain instances. The Code of Commerce provides:

"Article 586. The shipowner and the ship agent shall be civilly liable for the acts of the
captain and for the obligations contracted by the latter to repair, equip, and provision the
vessel, provided the creditor proves that the amount claimed was invested for the benefit of
the same."

"Article 587. The ship agent shall also be civilly liable for the indemnities in favor of third
persons which may arise from the conduct of the captain in the care of the goods which he
loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with
all her equipments and the freight it may have earned during the voyage."

Petitioner does not dispute the liabilities of the ship agent for the loss/shortage of 476.140 metric
tons of standard-grade Muriate of Potash valued at P1,657,700.95. Hence, we find no reason to
delve further into the matter or to disturb the finding of the CA holding petitioner, as ship agent, liable
to respondent for the losses sustained by the subject shipment.

Second Issue:

Finality of the CA Decision

Petitioner claims that it picked up the February 28, 2002 Decision of the CA on May 14, 2002, after
receiving the postal notice the day before. It further attributes gross negligence to its previous
counsel for not informing the CA of his change of address. It thus contends that notice of the
assailed Decision given to the previous counsel cannot be considered as notice to petitioner.

We are not persuaded. "It is well-settled that when a party is represented by counsel, notice should
be made upon the counsel of record at his given address to which notices of all kinds emanating
from the court should be sent in the absence of a proper and adequate notice to the court of a
change of address." 18
In the present case, service of the assailed Decision was made on petitioner's counsels of record,
Attys. Moldez and Galoz, on March 6, 2002. That copy of the Decision was, however, returned to the
sender for the reason that the addressee had "move[d] out." If counsel moves to another address
without informing the court of that change, such omission or neglect is inexcusable and will not stay
the finality of the decision. "The court cannot be expected to take judicial notice of the new address
19 

of a lawyer who has moved or to ascertain on its own whether or not the counsel of record has been
changed and who the new counsel could possibly be or where he probably resides or holds office." 20

It is unfortunate that the lawyer of petitioner neglected his duties to the latter. Be that as it may, the
negligence of counsel binds the client. Service made upon the present counsel of record at his
21 

given address is service to petitioner. Hence, the assailed Decision has already become final and
unappealable.

In the present case, there is no compelling reason to overturn well-settled jurisprudence or to

interpret the rules liberally in favor of petitioner, who is not entirely blameless. It should have taken
the initiative of periodically keeping in touch with its counsel, checking with the court, and inquiring
about the status of its case. In so doing, it could have taken timely steps to neutralize the
22 

negligence of its chosen counsel and to protect its interests. "Litigants represented by counsel
should not expect that all they need to do is sit back, relax and await the outcome of their case." 23

In view of the foregoing, there is no necessity of passing upon the third issue raised by petitioner.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against
petitioner.

SO ORDERED.

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

STANDARD OIL COMPANY OF NEW YORK, plaintiff-appellee,

vs.
MANUEL LOPEZ CASTELO, defendant-appellant.

Gabriel La O for appellant.

Lawrence and Ross for appellee.

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.
Standard Oil Co. of New York vs. Lopez Castelo, 42 Phil., 256, No. 13695 October 18, 1921

STREET, J.:

By contract of character dated February 8, 1915, Manuel Lopez Castelo, as owner, let the small
interisland steamer Batangueño 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 Batangueño 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, she 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 less 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 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 mad 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 the 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 coatwise trade.

The reason for adopting a more liberal rule with respect to deck cargo on vessels used in the
coastwise trade than upon those used for ordinary ocean borne traffic is to be found of course in 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 civil 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 articles 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
supposed, 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 cause 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 of 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 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 given.

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

G.R. No. 4536           September 17, 1908

BEHN, MEYER & CO., plaintiffs-appellants,

vs.
J. MCMICKING, ET AL., defendants-appellees.

Kinney and Lawrence, for appellants.

Marcelo Caringal for appellees.

1.FINAL JUDGMENT; JURISDICTION COURTS.—Where a final judgment of an executory

character has been rendered in a suit, the mission of the court is limited to the execution and
enforcement of the said final judgment in all of its parts and in accordance with its express orders.

2.SHIPS AND SHIPPING; LIABILITY OF AGENTS.—The agent, even though he may not be the
owner of the vessel, is liable to the shippers and owners of the cargo transported by it, for losses
and damages occasioned to such cargo without prejudice, however, to his rights against the owner
of the ship, to the extent of the value of the vessel, it’s equipment, and the freight. BEHN, MEYER &
CO. VS.. M’MICKING ET AL., 11 Phil. 276, No. 4536 September 17, 1908

TORRES, J.:

On the 3rd of December, 1907, counsel for the firm of Behn, Meyer and CO., filed a written
complaint with the Court of First Instance of this city praying that, upon bond being furnished by
them to the amount that the court might see fit to fix, and in accordance with the provisions of
section 166 of the Code of Civil Procedure, a writ of preliminary injunction be granted him restraining
the sheriff of Manila, Jose McMicking, his deputies and assistance, and the other defendants, from
attaching or seizing any kind of property belonging to the plaintiffs, and from taking any measures for
the purpose of carrying into effect or executing the judgment entered in case No. 24851 of said court,
pending the final decision in the litigation; and that judgment be entered therein in favor of the
plaintiff company, authorizing the same to pay the sheriff of Manila, or to any of the defendants who
may be entitled thereto, the sum of P2,279.67, in full satisfaction of a judgment rendered in the said
case No. 2485; and that, upon such payment, the said preliminary injunction be made perpetual, and
that costs be allowed, together with any other just and equitable relief.
Upon bond in the amount of P2,000 having been furnished the preliminary writ of injunction applied
for was issued on the same date.

The defendants, on being notified, summoned, and cited to appear on the 4th of the said month
interposed a demurrer alleging that the facts set out by the complaint did not constitute a cause of
action, and that the said complaint was ambiguous, unintelligible, and vague. On the 16th of the said
month the demurrer was sustained, and, although in accordance with the law the injunction should
have been dissolved, the court below, however, ordered the same continued pending the appeal that
the plaintiff might interpose. The plaintiff company excepted thereto and informed the court and the
defendants that it preferred not to amend its former complaint; thereupon the court below, entered
judgment in favor of the defendants on the 24th of December of the same year, dismissing the
complaint with costs against the plaintiff.

Counsel for the plaintiff company excepted to the above decision, and immediately moved for a new
trial on the ground that said judgment was contrary to law; the motion was overruled on the 4th of
January, 1908, and the appellant company at once gave notice of its intention to present and perfect
a bill of exceptions, in order that the same might be certified and approved.

The appellant company after claiming in its brief that the court below erred in having admitted the
demurrer offered to its complaint by counsel for defendants, and in having dismissed the said
complaint, concluded by asking the repeal of the order sustaining the demurrer, inasmuch as Behn,
Meyer and CO., are entitled to exemption from the liability imposed in case No. 2485 by placing in
the hands by the sheriff, for delivery to the claimants the sum of P2,279.67, receipt as freight of the
steamship Kudat, and earned on the voyage during which the loss of the lorcha Nevada took place,
without however, making delivery of the said steamer and her equipment.

In the main case cited above, Behn, Meyer and CO., were sentenced to pay the sum of P9,000 to
Jose Guzman, the owner of the said lorcha, for the loss thereof; in this new litigation they claim to
limit the liability fixed by the executory judgment, and to be authorized to comply therewith by
delivering the said amount and to be thereby exempted from the remainder of the liability.

As foundation for this new pretension the second part of article 587 of the Code of Commerce is
invoked, and the following question is submitted: Does the exemption provided in article 587
constitute a defense against the liability or a means of exoneration therefrom? After the disquisition
on the laws of the United States and some countries of Europe upon the liability of the naviero or
owner of the vessel, counsel for the plaintiffs expresses his opinion that the exemption provided for
by the said article of the Code of Commerce does not constitute a defense against an action based
on the first clause of said article, but a means of exoneration from liability determined by a judicial
decision.

If this question had been set up in the said litigation No. 2485, it would have been duly resolved, as it
should, in the judgment; but the firm of Behn, Meyer and CO., did not allege any such exemption,
nor the right or means granted by the second part of article 587 of the Commercial Code above
alluded to; but in answering the complaint, they simply denied all and everyone of the allegations
contained in the complaint of the owner of the lost lorcha, and after a final and executory judgment
was rendered in said case, the action of the court was limited to the execution and enforcement of
the final judgment in all of its parts and in accordance with its express orders.

The provisions of Civil Code and those of the code of Commerce agree in fixing the liability of the
person who, being at the head of an enterprise or business establishment, places or selects another
to manage it, for the losses or damages that the said manager may cause in the discharge of his
office.
It should be borne in mind that the vessel herself is liable as a mortgaged thing for the credits of the
shippers or owners of the goods transported by her; and that the naviero (agent), even though he is
not the owner of the vessel, is in every way liable to the creditor for such losses and damages,
without prejudice to his rights against the owner on the value of the same, its equipment and freight.

Case No. 2485 being remanded to the Court of First Instance with the decision of this court affirming
the judgement appealed from, it is the duty of the judge below who is charged with the enforcement
of the final decision to resolve all matter that may hinder or obstruct the complete execution thereof;
among such impediments, the allegation of the right or means prescribed in the second part of the
aforesaid article 587 of the Commercial Code. Otherwise no legal provision whatever has been
alleged that may exempt him from fully complying with the said judgment in all its parts.

For the foregoing reasons, and considering that the orders exempted to, of the court below dated the
16th and 24th of December 1907, are in accordance with the law, it is our opinion that the same
should be and are hereby affirmed, with the costs against the appellants; it being of course
understood that the writ preliminary injunction issued on the 3d of the said month shall be at once
dissolved and set aside. So ordered.

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

YU CON, plaintiff-appellee,
vs.
GLICERIO IPIL, NARCISO LAURON, and JUSTO SOLAMO, defendants-appellants.

Felix Sevilla y Macam for appellants.

Juan Singson and Dionisio Jakosalem for appellee.

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 depositaries 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 their
transportation, as well as for the damages suffered by those who contracted with him, in
consequence of misdemeanors and crimes committed by him or by the members of the crew of the
craft. Yu Con vs. Ipil., 41 Phil. 770, No. 10195 December 29, 1916

ARAULLO, J.:

The purpose of the action brought in these proceedings is to enable the plaintiff to recover from the
defendants jointly and severally the sum of P450, which had been delivered by the plaintiff to the first
and 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 safe-keeping 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 bee paid for.
Finally, the defendants asked to be absolved from the complaint.

Before commencing the hearing of this case, the defendants made a verbal motion asking that the
plaintiff be declared in default, with respect to the counterclaim filed by them in their answer. On the
same date, the plaintiff presented his answer to said counter claim, denying each and all of the
allegations thereof and of the defendants' 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 589, 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 rage 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 and 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 defendant's 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 afore-
named 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 truck abroad 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, has 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, final,
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 said cabin-boys ad 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 defendant's 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 to 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 of 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 occuring 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 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 depositaries of the money.lawphi1.net

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, esteem 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 safe-keeping 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 articles
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 the 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 word
"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 should 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 to 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 therefrom 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 shipowners, it declares in
unmistakeable 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 non-liability 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 be 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 the 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
fir, 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 iondustry
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 instance 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 supercago 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 judgement 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 cases chargeable, as has been seen, to the
captain and the supercargo of said banca, to wit, because of the loss, theft of 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.

G.R. No. L-17690             June 14, 1922

YU BIAO SONTUA & CO., plaintiff-appellee,

vs.
MIGUEL J. OSSORIO, defendant-appellant.

Antonio Sanz and Kincaid, Perkins and Kincaid for appellant.

M. H. de Joya for appellee.

1.MASTER AND SERVANT; SHIPOWNER'S OR SHIP AGENT'S LIABILITY FOR ACTS OF HIS
EMPLOYEES.—It having been proven that the explosion and fire which took place in a ship are, with
good ground, imputable to the negligence of the persons who were then in charge thereof and under
whose direction the loading of cases of petroleum and gasoline had been effected, and that the said
persons are agents of the shipowner or ship agent, the latter is liable for the negligent acts
committed by them, under articles 587, 613, and 618 of the Code of Commerce, and 1902, 1903,
and 1908 of the Civil Code.

2.INHERENT DUTIES OF THE MASTER OF A SHIP; LlABILITY OF THE SHIP AGENT TOWARDS
THIRD PERSONS.—Although the duties enumerated in article 612 of the Code of Commerce are
inherent in the master, the civil liability arising from the nonfulfilment thereof is not limited to the
latter, since while the master is responsible to the ship agent, he is, in turn, liable to third persons, as
is clearly provided in article 618 of the said Code, which in its subsections 5 and 7 expressly
mentions such duties enumerated in the aforesaid article 612. Yu Biao Sontua & Co. vs. Ossorio, 43
Phil. 511, No. 17690 June 14, 1922

ROMUALDEZ, J.:

On the evening of the 13th of March, 1920, a fire broke out on board the motor boat Alfonso when
this boat was in the Pasig River, city of Manila, ready to weigh anchor. A short distance from
the Alfonso the steamer Y. Sontua was lying alongside moored to the wharf of said river.

The fire in the motor boat Alfonso spread to the steamer Y. Sontua, causing damages to her deck,
according to plaintiff, amounting to P67,400.
The plaintiff, which is a regular partnership and the owner of the steamer Y. Sontua, brought this
action to recover from the defendant, the owner and agent of said motor boat Alfonso, the
aforementioned sum as indemnity for the damages alleged by the plaintiff to have been sustained by
him through the negligence of the agents and employees of the said defendant, which caused the
fire in the aforesaid motor boat Alfonso, wherefrom it spread, and caused said damages to the
steamer Y. Sontua. These damages are specified in the two causes of action set forth in the
complaint, in the first of which are mentioned the appurtenances and parts of the aforesaid vessel
that were destroyed and damaged by the said fire, and for the repair of which the sum of P40,000
was expended. In the second cause of action it is alleged that the plaintiff sustained damages to the
amount of P27,400 for the demurrage and delay in the ordinary voyages of the aforesaid vessel Y.
Sontua. After denying generally and specifically the allegations of the complaint, the defendant
alleges, as special defense, that he has taken no part either directly or indirectly in the acts alleged
in the complaint; that if the plaintiff has sustained any damages, they are not the result of the act
said to have been committed by the agents and employees of the defendant; and are not imputable
to the negligence of the defendant, or any of his agents, employees, or mandatories.

The case having been tried, the court sentenced the defendant to pay the plaintiff the above-
mentioned sum of P67,400, with legal interest thereon from the date of the filing of the complaint,
and the costs.

From the judgment the defendant appeals to this court assigning three errors, to wit: (a) The finding
that the explosion in question was due to the negligence of the persons in charge of the motor
boat Alfonso; (b) the finding that the defendant is liable for the negligence of his agents and
employees; and (c) the awarding of an excessive sum as damages.

With regard to the first error, the following facts are proven: That during the day and night of the
12th, and during the day of the 13th of March 1920, there were loaded in the said motor
boat Alfonso 2,000 cases of petroleum and 8,473 cases of gasoline, of which 5,000 cases of
gasoline and 2,000 of petroleum were placed in the hold of said motor boat, and the balance on
deck; that said loading was done without permission from the customs authorities; that the said
cases were loaded by means of straps supporting 10 or 12 cases at a time; that the said cases of
gasoline and petroleum were placed in the hold about 14 feet from the boiler of the main engine and
about 4 feet from the boiler of the smaller engine; that on the evening of the 13th of March, 1920, the
smaller engine was in operation preparatory to the departure of the motor boat which, at that time,
was getting ready to leave; that the fire in said motor boat burst out with an explosion followed by a
violent expulsion of gasoline and petroleum; that owing to the proximity of the motor boat to the
steamer Y. Sontua, the magnitude of the fire and the inflammability of the material that served as
fuel, the fire spread to the said steamer Y. Sontua, and so rapidly that it was impossible for the crew
of the Y. Sontua to check its progress,

Expert testimony was also introduced by the plaintiff to the effect that it is but natural that, after
several transhipments of more than 8,000 cases of gasoline and 2,000 cases of petroleum there is
bound to be a leakage, on an average of 1 to 4 cases per hundred, due to the fact that the loading is
effected by means of straps supporting from 10 to 12 cases at a time which, quite frequently, receive
violent bumps resulting in damage to the cans and the consequent leakage of either gasoline or
petroleum, as the case may be.

It was also shown by expert testimony that the gases formed by the volatilization of the gasoline or
petroleum leaking from the cases are apt to accumulate in a compartment, such as the hold of a
ship, without sufficient ventilation causing the gases to ignite upon coming in contact with a spark or
upon the temperature being sufficiently raised.
Under these circumstances we are constrained to hold that the fire which caused the damages for
which the plaintiff seeks to be indemnified was the inevitable effect of the explosion and fire which
occurred in the motor boat Alfonso; that this explosion and fire in the said motor boat is, with good
ground, imputable to the negligence of the persons having charge at that time of said motor boat and
under whose direction the loading of the aforesaid cases of petroleum and gasoline had been
performed.

The trial court did not, therefore, commit the first error assigned by the appellant.

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 agent is liable for the
tortious acts of his agents (arts. 587, 613, and 618, Code of Commerce; and arts. 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 and his agents and employees; for this reason they cannot be applied in the
present case.

In American law, principles similar to those in force in the Philippines and contained in the Code of
Commerce above cited, are prevailing:

Vessel owner's liability in general. — The general liability of a vessel owner extends to
losses by fire arising from other than a natural or other excepted cause, whether occurring
on the ship accidentally, or communicated from another vessel, or from the shore; and the
fact that fire produces the motive power of a boat does not affect the case. Such losses are
not within the exceptions either of act of God, or peril of the sea, except by local custom,
unless proximately caused by one of these events. In jurisdictions where the civil law
obtains, however, it has been held that if property on a steamboat is destroyed by fire, the
owners of the boat are not responsible, if it was being navigated with proper diligence,
although the accident occurred at night. The common law liability extends even to loss by
fires caused entirely by spontaneous combustion of the cargo, without any negligence on the
part of master or crew. (R.C.L., vol. 24, pp. 1324-1325.)

With regard to the allegation that the obligations enumerated in article 612 of our Code of
Commerce are inherent in the master such inherent duties do not limit to the latter the civil
liability arising from their nonfulfillment, but while the master is responsible to the ship
agent, the ship agent, in turn, is responsible to third persons, as is clearly provided in article
618 of said Code, in which express mention is made, is subsections 5 and 7, of the duties
enumerated in the said article 612.

Therefore there is also no ground for holding that the second error assigned by the appellant has
been committed.

The third error is concerned with the amount of the damages sustained by the plaintiff.

It is sufficiently proven that the sum paid by the plaintiff to the Earnshaw Shipyards for the repairs
made to the steamer Y. Sontua, damage to which was caused by the fire in question, amount to
P27,968; that the materials used in said repairs and paid for by the plaintiff are worth P12,139.30. As
to the damages sustained by the plaintiff on account of the delay of the steamer Y. Sontua, the
evidence shows that this steamer was delayed ten days in the Pasig River, waiting for available
space in the shipyard before it was taken to the said repair-shop; that it was not absolutely
necessary that the repair of the damages caused by the fire should be made in the shipyard; that
said vessel was taken to the shipyard for repair of some parts of it not damaged by the fire in
question.

As the evidence does not sufficiently show the time consumed in repairing the actual damage
caused by the said fire, nor the time employed in making the other repairs, and as the damage, if
any, resulting from the ten days' delay in the Pasig River, is remote and, therefore, not chargeable to
the defendant since said delay is in no way imputable to him, we think, in view of all of the
circumstances of the case and taking into consideration the importance of all the repairs, whether by
fire or otherwise, the delay of seventy days, according to the evidence of the plaintiff, chargeable to
the defendant, should be reduced to one-half, or thirty-five days at the rate of P410.84 a day which is
the net profit that the aforesaid steamer Y. Sontua failed to realize as a consequence of said delay.
We find that the damages sustained by the plaintiff by reason of this delay amount to P14,379.40.

The plaintiff further asks that he be awarded, by way of damages, the sum of P4,400 covering
maintenance and salary of the officers and crew of his steamer during the delay aforementioned. We
do not feel that he is entitled to this item for the reason that such expenses have already been taken
into account in determining the net daily profit above referred to. We find that the total sum which the
plaintiff is entitled to recover from the defendant as damages under the facts stated is fifty-four
thousand four hundred eighty-six pesos and seventy centavos (P54,486.70).

The judgment appealed from is hereby modified and the defendant sentenced to pay the plaintiff the
sum of P54,486.70 with costs. So ordered.

[G.R. No. L-9534.  September 29, 1956.]

MANILA STEAMSHIP CO., INC., Petitioner, vs. INSA ABDULHAMAN (MORO) and LIM HONG
TO, Respondents.
 
DECISION
REYES, J. B. L., J.:
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: chanroblesvirtuallawlibrary

“From 7: 00 to 8: 00 o’clock in the evening of May 4, 1948, the M/L “Consuelo V”, laden with cargoes
chanroblesvirtua llawlibrary chanroblesvirtuallawlibrary

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
chanroblesvirtua llawlibrary chanroblesvirtua llawlibrary

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 chan roblesvirtualawlibrary

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 826-939
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: chanroblesvirtua llawlibrary

“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
chan roblesvirtualawlibrary

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): chanroblesvirtua llawlibrary

“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
chan roblesvirtualawlibrary

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.”
chan roblesvirtualawlibrary

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 chan roblesvirtualawlibrary

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: chanroblesvirtuallawlibrary

“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 unwarry 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 cannot 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 cannot 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. Fariña (Derecho Comercial Maritimo, Vol. I, pp. 122-123), on the authority of judicial precedents
from various nations, sets the rule to be as follows: chanroblesvirtuallawlibrary

“Esta generalmente admitido que el propietario del buque no tiene derecho a la limitacion legal de
responsibilidad si los daños 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 averías sobrevenidos (Art. 2°).”
To the same effect, a noted French author states: chanroblesvirtua llawlibrary

“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 chan roblesvirtualawlibrary

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
chan roblesvirtualawlibrary

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: chanroblesvirtua llawlibrary

(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.