Case Digest: Litonjua Shipping Company Inc. vs. National Seamen Board, G.R. No. L-51910

 

Litonjua Shipping Company Inc. vs. National Seamen Board, G.R. No. L-51910, August 10, 1989

Subject: Transportation Law

FACTS

Petitioner is the duly appointed local crewing managing office of the Fairwind Shipping Corporation. On September 11, 1976 M/V Dufton Bay an ocean-going vessel of foreign registry owned by the R.D. Mullion ship broking agency under charter by Fairwind, while in the port of Cebu contracted the services (among others) of Gregorio Candongo as Third Engineer for 12 months with a monthly wage of US$500.00. The agreement was executed before the Cebu Area Manning Unit of the NSB, after which respondent boarded the vessel.

On December 28, 1976 before the expiration of contract, respondent was required to disembark at Port Kilang, Malaysia. Describe in his seaman’s handbook is the reason “by owner’s arrange.”

Condongo filed a complaint against Mullion (Shipping company) for violation of contract and against Litonjua as agent of shipowner. On February 1977, NSB rendered a judgment by default for failure of petitioners to appear during the initial hearing, rendering the same to pay Candongo because there was no sufficient or valid cause for the respondents to terminate the service of the complainant.

Litonjua contends that the shipowner, nor the charterer, was the employer of private respondent; and that liability for damages cannot be imposed upon petitioner which was a mere agent of the charterer.

ISSUE

Whether or not the charterer Fairwind was properly regarded as the employer of private respondent Candongo whom will be liable for damages.

RULING

No, the charterer Fairwind was properly regarded as the employer of private respondent Candongo whom will be liable for damages.

Under the law, a time charter, upon the other hand, like a demise charter, is a contract for the use of a vessel for a specified period of time or for the duration of one or more specified voyages. The owner of a time-chartered vessel retains possession and control through the master and crew who remain his employees. What the time charterer acquires is the right to utilize the carrying capacity and facilities of the vessel and to designate her destinations during the term of the charter. A voyage charter, or trip charter, is simply a contract of affreightment, that is, a contract for the carriage of goods, from one or more ports of loading to one or more ports of unloading, on one or on a series of voyages. In a voyage charter, master and crew remain in the employ of the owner of the vessel.

In this case, NSB decision was affirmed by the SC. It is the respondent Litonjua Shipping Co., Inc. is the authorized Philippine agent of Fairwind Shipping Corporation, charterer of the vessel 'Dufton Bay, wherein complainant, served as 3rd Engineer from 17 September until disembarkation on December 28, 1976. It is also clear from the complainant's wages account bearing the heading 'Fairwind Shipping Corporation', signed by the Master of the vessel that the Philippine agency referred to herein directed to pay the said withdrawn wages of $13.19 is no other than Litonjua Shipping Company, Inc. Thus, Litonjua Shipping is liable for the damages before private respondent.

Case Digest: Julius C. Ouano vs. CA and San Miguel, G.R. No. 142025

 

Julius C. Ouano vs. CA and San Miguel, G.R. No. 142025, July 4, 2002

Subject: Transportation Law

FACTS

San Miguel Corporation (SMC) entered into a Time Charter Party Agreement with Julius Ouano's J. Ouano Marine Services for the M/V Doa Roberta from June 1, 1989, to May 31, 1991, to transport SMC's beverage products. The agreement held Ouano responsible for crew negligence and shortlanded shipments. On November 12, 1990, despite Typhoon Ruping warnings, SMC issued sailing orders to Captain Inguito, leading to the sinking of M/V Doa Roberta on November 13, 1990. Ouano alleged SMC's negligence, initiating legal proceedings. Ouano, in lieu of the deceased captain, filed a Marine Protest. In response, Ouano filed an answer with cross-claim, alleging SMC's negligence as the proximate cause. The trial court found SMC liable, but both SMC and Ouano appealed.

ISSUE

Whether or not the petitioner is liable for the loss of the M/V Doa Roberta, the deaths of its crew, and damages to the cargo.

RULING

Yes, Ouano was held vicariously liable for Captain Inguito's negligence, lacking due diligence in selection and supervision. The Supreme Court upheld the appellate decision, affirming Ouano's liability, but absolving SMC of responsibility. Ouano was ordered to pay damages to the heirs of officers and crew members, excluding Captain Sabiniano Inguito, and indemnify SMC for cargo damages amounting to P10,278,542.40. The ruling emphasized Ouano's failure to ensure the vessel's seaworthiness and his vicarious liability for Captain Inguito's negligence, while dismissing SMC's liability for the sinking.

Case Digest: Maritime Agencies vs. Court of Appeals, 187 SCRA 709, G.R. No. 77638

 

Maritime Agencies vs. Court of Appeals, 187 SCRA 709, G.R. No. 77638, July 12, 1990

Subject: Transportation Law

FACTS

Transcontinental Fertilizer Company of London chartered from Hongkong Island Shipping Company of Hongkong the motor vessel named "Hongkong Island" for the shipment of 8,073.35 MT (gross) bagged urea from Novorossisk, Odessa, USSR to the Philippines. Part of the shipment will be discharged in Cebu and another in Manila. The goods were insured by the consignee with the Union Insurance Society of Canton, Ltd. against all risks.

Maritime Agencies & Services, Inc. was appointed as the charterer's agent and Macondray Company, Inc. as the owner's agent.

On October 31, 1979, the consignee filed a formal claim against Maritime, copy furnished Macondray, for the amount of P87,163.54, representing C & F value of the 1,383 shortlanded bags. On January 12, 1980, the consignee filed another formal claim, this time against Viva Customs Brokerage, for the amount of P36,030.23, representing the value of 574 bags of net unrecovered spillage.

These claims having been rejected, the consignee then went to Union, which on demand paid the total indemnity pursuant to the insurance contract. As subrogee of the consignee, Union then filed a complaint for reimbursement of this amount, with legal interest and attorney's fees, against Hongkong Island Company, Ltd., Maritime Agencies & Services, Inc. and/or Viva Customs Brokerage.  On April 20, 1981, the complaint was amended to drop Viva and implead Macondray Company, Inc. as a new defendant.

After trial, the trial court rendered judgment holding the defendants liable. On appeal, CA modified RTC’s decision. Maritime and Union filed separate motions for reconsideration which were both denied. Hence, this petition.

ISSUE

Whether or not Maritime Agencies, as the charterer's agent, was liable for the cargo loss.

RULING

Maritime Agencies, as the charterer's agent, was not liable for the cargo loss.

Under the law, a voyage charter being a private carriage, the parties may freely contract respecting liability for damage to the goods and other matters. The basic principle is that "the responsibility for cargo loss falls on the one who agreed to perform the duty involved" by the terms of most voyage charters. It is a well-settled principle that the agent shall be liable for the act or omission of the principal only if the latter is undisclosed.

In this case, the charterer did not represent itself as a carrier and indeed assumed responsibility only for the unloading of the cargo, i.e, after the goods were already outside the custody of the vessel. In supervising the unloading of the cargo and issuing daily report for the discharge of the cargo, Maritime acted in representation of the charterer and not of the vessel. It thus cannot be considered a ship agent. As a mere charterer's agent, it cannot be held solidarily liable with Transcontinental for the losses/damages to the cargo outside the custody of the vessel. Notably, Transcontinental was disclosed as the charterer's principal and there is no question that Maritime acted within the scope of its authority. The liability imposable upon it cannot be borne by Maritime which, as a mere agent, is not answerable for injury caused by its principal.

Case Digest: Belgian Overseas vs. Philippine First, 383 SCRA 23, G.R. No. 143133

 

Belgian Overseas vs. Philippine First, 383 SCRA 23, G.R. No. 143133, June 05, 2002

Subject: Transportation Law

FACTS

CMC Trading A.G. shipped on board the MN ‘Anangel Sky’ at Hamburg, Germany 242 coils of various Prime Cold Rolled Steel sheets for transportation to Manila consigned to the Philippine Steel Trading Corporation.  On July 28, 1990, MN Anangel Sky arrived at the port of Manila and, within the subsequent days, discharged the subject cargo.  Four (4) coils were found to be in bad order B.O. Tally sheet No. 154974.  Finding the four (4) coils in their damaged state to be unfit for the intended purpose, the consignee Philippine Steel Trading Corporation declared the same as total loss.

Philippine First Insurance refused to submit to the consignee’s claim.  Consequently, Belgian Overseas paid the consignee and was subrogated to the latter’s rights and causes of action against the defendants-appellees. Subsequently, the plaintiff-appellant instituted this complaint for recovery of the amount paid by them, to the consignee as insured.

Impugning the propriety of the suit against them, defendants-appellees imputed that the damage and/or loss was due to pre-shipment damage, to the inherent nature, vice or defect of the goods, or to perils, danger, and accidents of the sea, or to insufficiency of packing thereof, or to the act or omission of the shipper of the goods or their representatives.  In addition, thereto, defendants-appellees argued that their liability, if there be any, should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws.  

Finally, defendants-appellees averred that, in any event, they exercised due diligence and foresight required by law to prevent any damage/loss to said shipment.”

ISSUE

Whether or not a notation in the bill of lading at the time of loading is sufficient to show pre-shipment damage and to exempt herein defendants from liability.

RULING

No, a notation in the bill of lading at the time of loading is insufficient

Under the law, mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no adequate explanation is given as to how the deterioration, the loss or the destruction of the goods happened, the transporter shall be held responsible.

In this case, petitioners failed to rebut the prima facie presumption of negligence. True, the words "metal envelopes rust stained and slightly dented" were noted on the Bill of Lading; however, there is no showing that petitioners exercised due diligence to forestall or lessen the loss. Having failed to discharge the burden of proving that they have exercised the extraordinary diligence required by law, petitioners cannot escape liability for the damage to the four coils

Case Digest: Eastern Shipping vs. Court of Appeals, 190 SCRA 512, G.R. No. 80936

 

Eastern Shipping vs. Court of Appeals, 190 SCRA 512, G.R. No. 80936, October 17, 1990

Subject: Transportation Law

FACTS

Nanyo Corporation of Japan shipped five packages of supplies and materials to Manila via Eastern Shipping's vessel. The bill of lading was consigned to "Shipper's Order" with an "Address Arrival Notice" to Consolidated Mines Inc. (CMI).

Eastern Shipping released the shipment to CMI without requiring the surrender of the original bill of lading, based on CMI's undertaking to indemnify Eastern Shipping from any claims or liabilities.

Several months later, Hongkong & Shanghai Banking Corporation (HSBC), which financed the shipment, claimed that the cargo was misdelivered and demanded compensation from ESLI.

HSBC wrote another demand letter through counsel in contemplation of a legal action against ESLI should it not make good HSBC's claim.

On the other hand, CMI wrote a letter to HSBC admitting that they received the shipment in question due to a guarantee executed by them and requested HSBC that legal action be held off for at least thirty (30) days, promising to settle its account with HSBC from the funds it was expecting from Benguet Corporation.

CMI having failed to fulfill its promise, HSBC filed a complaint before the then CFI of Rizal against the petitioner praying for actual and compensatory damages, exemplary damage and attorney's fees plus expenses of litigation and judicial costs.

After two motions for extensions, the petitioner-carrier filed its answer with a counterclaim.

On August 15, 1981, the petitioner-carrier filed a third-party complaint against CMI seeking reimbursement from the latter of whatever pecuniary obligations the petitioner may be liable to HSBC, as well as moral damages.

During the trial, CMI filed a Motion to Stay Action given the pendency of involuntary insolvency proceedings commenced against it in the meantime by its creditors which included HSBC. This motion was denied by the trial court.

Based on the evidence presented by HSBC and the petitioner, as CMI failed to present its evidence, the court decided in favor of the plaintiff and against the defendant Eastern Shipping Lines, Inc., ordering the latter to pay.

Petitioner’s motion for reconsideration was denied, thus, they appealed to the CA. The CA AFFIRMED in toto CFI’s (now RTC) decision. Hence, this petition for review.

ISSUE

Whether or not the petitioner carrier "committed gross error and negligence when it released the cargo to CMI", whose name appear as notify party in the bill of lading.

RULING

No, the petitioner carrier did not commit gross error and negligence when it released the cargo to CMI.

Article 353 of the Corporation Code states that if in case of loss or for any other reason whatsoever, the consignee cannot return upon receiving the merchandise the bin of lading subscribed by the carrier, he shall give said carrier receipt of the goods delivered this receipt producing the same effects as the return of the bill of lading.

In this case, exceptional circumstances allow a deviation from the general rule regarding the surrender of the bill of lading. The rule cannot always be absolute. The petitioner cannot be faulted for releasing the goods to CMI under the circumstances, due to its lack of knowledge as to who was the real consignee, given CMI's strong representations and letter of undertaking wherein it stated that the bill of lading would be presented later; precisely the situation covered by the last paragraph of Art. 353 of the Corporation Code. Under the exceptional circumstances and applying especially strong considerations of equity, the petitioner did not commit any fault sufficient to render it liable to HSBC. On the contrary, it was HSBC and CMI who were obviously in bad faith in dealing with the petitioner-carrier.

Case Digest: Provident Insurance vs. Court of Appeals, G.R. No. 118030

Provident Insurance vs. Court of Appeals, G.R. No. 118030, January 15, 2004

Subject: Transportation Law

FACTS

On or about June 5, 1989, the vessel MV "Eduardo II" took and received on board at Sangi, Toledo City a shipment of 32,000 plastic woven bags of various fertilizer in good order and condition for transportation to Cagayan de Oro City. The subject shipment was consigned to Atlas Fertilizer Corporation and covered by Bill of Lading No. 01 and Marine Insurance Policy No. CMI-211/89-CB. Upon its arrival at General Santos City on June 7, 1989, the vessel MV "Eduardo II" was instructed by the consignee's representative to proceed to Davao City and deliver the shipment to its Davao Branch in Tabigao.

On June 10, 1989, the MV "Eduardo II" arrived in Davao City where the subject shipment was unloaded. In the process of unloading the shipment, three bags of fertilizer fell overboard and281 bags were considered to be unrecovered spillages. Because of the mishandling of the cargo, it was determined that the consignee incurred actual damages in the amount of P68,196.16. As the claims were not paid, petitioner Provident Insurance Corporation indemnified the consignee Atlas Fertilizer Corporation for its damages. Thereafter, the petitioner, as subrogee of the consignee, filed on June 3, 1991, a complaint against the respondent carrier seeking reimbursement for the value of the losses/damages to the cargo.

ISSUE

Whether or not stipulations in the bill of lading, the requirement to file a notice of claim in case of damaged goods, is binding upon the consignee.

RULING

Yes, there can be no question about the validity and enforceability of Stipulation No. 7 in the bill of lading.

The twenty-four-hour requirement under the said stipulation is, by agreement of the contracting parties, a sine qua non for the accrual of the right of action to recover damages against the carrier. Carriers and depositaries sometimes require the presentation of claims within a short time after delivery as a condition precedent to their liability for losses. Such a requirement is not an empty formalism. It has a definite purpose, i.e., to afford the carrier or depositary a reasonable opportunity and facilities to check the validity of the claims while the facts are still fresh in the minds of the persons who took part in the transaction and the document are still available.

Case Digest: Erlanger vs. Swedish East, 34 SCRA 178, G.R. No. 10051

 

Erlanger vs. Swedish East, 34 SCRA 178, G.R. No. 10051, March 09, 1916

Subject: Transportation Law

FACTS

S.S. Nippon was bound for Manila to Singapore, loaded mainly with copra and with some other general merchandise. The ship struck the Scarborough Reef, and it was filled with water. Immediately the chief officer wired the Director of Navigation at Manila for assistance for rescue. Shortly thereafter, the captain and crew left the Nippon and went on board of SS. Marchuria and headed for Hong Kong.

Plaintiff Erlanger and Galinger applied to the Director of Navigation for a charter of a coast guard cutter. Through the said cutter, the Nippon was floated and towed to Olangapo, where temporary repairs were made, and then brought to Manila.

The trial court found that the plaintiffs were “entitled to recover one-half of the net proceeds from the property salved and sold, and one-half the value of the property delivered to the claimants.

ISSUES

1)      Whether or not the ship abandoned

2)      Whether or not the salvage conducted with skill, diligence, and efficiency

3)      Whether or not the award is justified

RULING

The relief of property from an impending peril of the sea, by the voluntary exertions of those who are under no legal obligation to render assistance, and the consequent ultimate safety of the property, constitute a case of salvage.

Three elements necessary for a valid salvage claim: (1) A marine peril. (2) Service voluntarily rendered when not required as an existing duty or from a special contract. (3) Success, in whole or in part, or that the service rendered contributed to such success.

(1) The evidence proves that the Nippon was in peril; that the captain left in order to protect his life and the lives of the crew; that the animo revertendi was slight.

When a man finds property thus temporarily left to the mercy of the elements, whether from necessity or any other cause, though not finally abandoned and legally derelict, and he takes possession of it with the bona fide intention of saving it for the owner, he will not be treated as a trespasser. On the contrary, if by his exertions he contributed materially to the preservation of the property, he will entitle himself to a remuneration according to the merits of his service as a salvor.

(2) The plaintiffs were diligent in commencing the work and were careful and efficient in its pursuit and conclusion. While the plaintiff entered upon the salvage proceedings without proper means and not being adapted by their business to conduct their work, and while it may appear that possibly the salvage might have been conducted in a better manner and have accomplished somewhat better results in the saving of the copra cargo, yet it appears that they quickly remedied their lack of means and corrected the conduct of the work so that it accomplished fairly good results.

(3) The award granted to the plaintiff must be reduced. Compensation as salvage is a reward given for perilous services, voluntarily rendered, and as an inducement to mariners to embark in such dangerous enterprises to save life and property. One of the grounds for liberality in salvage awards is the risk assumed by the salvor, that he can have no recompense for service or expense unless he is successful in the rescue of property, and that his reward must be withing the measure of his success. In other words, he can only have a portion, in any event; and the fact that his exertions were meritorious and that their actual value, or the expense actually incurred, exceeded the amount produced by the service, cannot operate to absorb the entire proceeds against the established rules of salvage.