Case Digest: Delgado Brothers vs. Home Insurance, 1 SCRA 853

Delgado Brothers vs. Home Insurance, 1 SCRA 853

Subject: Transportation Law

FACTS

In 1955, Victor Bijou & Co. shipped aboard the vessel S.S. Leoville, and consigned to the Judy Philippines, Inc. of Manila a shipment of 1 case Linen Handkerchief and 2 cases cotton piece goods from New York to Manila.

The shipment was insured with herein respondent by the shipper and/or consignee. The shipment was unloaded complete and in good order from the said vessel by the petitioner, but the latter delivered the same to the consignee with 1 case of Linen Handkerchief in bad order, with a shortage of 503 yards of Linen Print Handkerchiefs, to the prejudice, loss and damage of the shipper and/or consignee.

Respondent paid the shipper/consignee and was issued a subrogation receipt. Notwithstanding the respondent’s claim, the petitioner failed and refused to pay the shipper and/or consignee and/or respondent. Hence, the respondent was compelled to file the case.

As special defense, petitioner alleged that since no claim whatsoever was filed by respondent or the consignee, or their representatives against petitioner within the 15-day period from the date of the arrival of the goods before they could file a suit in the court of proper jurisdiction within 1 year from the date of said arrival at the Port of Manila hence petitioner is completely relieved and released of any liability for loss or damage under the law and in accordance with the pertinent provisions of the Management Contract with the Bureau of Customs, covering the operation of the Arrastre Service for the Port of Manila; and that petitioner in no way acts as an agent of the carrying vessel or of the importer or consignee. Petitioner, therefore, prayed for the dismissal of respondent’s complaint.

After trial, the court rendered a decision dismissing the case and absolving petitioner from liability on the merits of the latter’s special defenses invoked in its answer. On appeal, CA reversed CFI’s decision and ordered the petitioner to pay to respondent.

ISSUE

Whether or not CFI had no jurisdiction over the subject matter of the action, the same not being an admiralty case, and the amount sought to be recovered falling within the exclusive original jurisdiction of the Municipal Court of Manila.

RULING

Yes, CFI had no jurisdiction over the subject matter of action, the same not being an admiralty case, and the amount sought to recover falls within the exclusive original jurisdiction of the MTC of Manila.

Under the law, in case of controversy involving both maritime and non-maritime subject matter, where the principal matter involved belongs to the jurisdiction of a court of common law or of equity, admiralty will not take cognizance of incidental maritime matters connected therewith but will relegate the whole controversy to the appropriate tribunal.

In this case, Section 2 of the Management Contract with the Bureau of Customs clearly states the functions of petitioner as arrastre operator. Nothing in those functions relates to the trade and business of navigation nor the use or operation of vessels.  Delgado Brothers, Inc. has nothing to do with the loading or unloading of cargoes to and from the ships. Its operation on and its responsibility for the merchandise and goods begins from the time they are placed upon the wharves or piers or delivered along sides of ships and does not deal with any maritime matter or with the administration and application of any maritime law. Court of First Instance of Manila has jurisdiction in cases where suit is brought directly against the carrier or shipowner. Respondent cannot invoke the rule against multiplicity of suits, for the simple reason that said rule has to be subservient to the superior requirement that the court must have jurisdiction.

Case Digest: Eastern Shipping vs. Margarine, 93 SCRA 257

 

Eastern Shipping vs. Margarine, 93 SCRA 257

Subject: Transportation  Law

FACTS

The court upheld the appellate judgment holding petitioner liable for the damage suffered by respondent's copra cargo on board petitioner's vessel. Respondent corporation was the consignee of 500 long tons of Philippine copra in bulk with a total value of US$ 108,750.00. A fire broke out aboard the vessel, causing water damage in the amount of US$ 591.38. The lower court rejected petitioner's defense that it was not liable under Philippine Law for the damage. The court ordered Eastern Shipping Lines, Inc. to pay the plaintiff, Margarine-Verkaufs-Union GMBH, US$ 591.38, plus attorney's fees and litigation costs. The petitioner reiterated its submission that Article 848 of the Code of Commerce should be applied.

ISSUE

Whether or not Article 848 of the Code of Commerce governs this case despite the bill of lading which expressly contained the application of the York-Antwerp Rules which provide for MARGARINE-VERKAUFS-UNION GmbH’s fun recovery of the damage loss.

RULING

No.

Article 848 states that claims for averages shall not be admitted if they do not exceed 5 per cent of the interest which the claimant may have in the vessel or cargo if it is gross average, and 1 per cent of the goods damaged if particular average, deducting in both cases the expenses of appraisal, unless there is an agreement to the contrary.

In this case, SC held Article 848 is not applicable in this particular case for the reason that the bill of lading contains an agreement to the contrary. There is a clear and irreconcilable inconsistency between the York-Antwerp Rules expressly adopted by the parties as their contract under the bill of lading which sustains Eastern’s claim, and Article 848 as cited by Margarine which would bar the same. A contract of adhesion as embodied in the printed bill of lading issued for the shipment to which the consignee merely adhered, having no choice in the matter, and consequently, any ambiguity must be construed against the author.

Case Digest: Republic vs. Luzon Stevedoring Corporation, 21 SCRA 279, G.R. No. L21749

 

Republic vs. Luzon Stevedoring Corporation, 21 SCRA 279, G.R. No. L21749, September 29, 1967

Subject: Transportation Law

 

FACTS

Barge owned by Luzon Stevedoring Corporation was being towed down the Pasig River by tugboats “Bangus” and “Barbero” which belongs to the same corporation. The barge rammed against one of the wooden piles of Nagtahan Bailey Bridge, smashed the post and caused the bridge to list. The river, at that time, was swollen and the current swift, on account of the heavy downpour of Manila and the surrounding provinces.

Republic sued LSC for Actual and consequential damages caused by its employees amounting to P192,561.72 CFI adjudge LSC liable in damages to the plaintiff-appellee Republic of the Philippines. However, LSC directed the appealed before the SC and contended that the lower court erred that the defendant-appellant had exercised the diligence required in the selection and supervision of its personnel to prevent injuries or damage, that the ramming of bridge was caused by force majeure and that it is exorbitant and without factual basis that the plaintiff, Republic of the Philippines entitled to damages amounting above.

ISSUE

Whether or not the Republic is entitled for damages.

RULING

Yes, the Republic is entitled for damages. 

Under the doctrine of res ipsa loquitor which means the thing speaks for itself. And based on negligence, it essentially means that the circumstances surrounding the case make it obvious that negligence occurred.

In this case, it avails the appellant naught to argue that the dolphins, like the bridge, were improperly located. Even if true, these circumstances would merely emphasize the need of even higher degree of care on appellant's part in the situation involved in the present case. The appellant, whose barges and tugs travel up and down the river everyday, could not safely ignore the danger posed by these allegedly improper constructions that had been erected, and in place, for years. Therefore, LSC is liable.

Case Digest: Far Eastern Shipping Company vs. CA, G.R. No. 130068

 

Far Eastern Shipping Company vs. CA, G.R. No. 130068, October 1, 1998

Subject: Transportation Law

FACTS

This case involves a dispute over liability for damages caused to a pier by a vessel during docking maneuvers. The vessel, M/V PAVLODAR, owned and operated by Far Eastern Shipping Company (FESC), arrived at the Port of Manila and was assigned Berth 4. Capt. Senen Gavino, a member of the Manila Pilots' Association (MPA), was assigned to conduct the docking maneuvers. However, during the docking process, the anchor of the vessel did not take hold, causing the vessel to collide with the pier and resulting in damage to both the pier and the vessel.

The Philippine Ports Authority (PPA) filed a complaint for damages against FESC, Capt. Gavino, and MPA. The trial court held the defendants jointly and severally liable for damages and ordered them to pay the PPA. The defendants appealed to the Court of Appeals, raising issues regarding the liability of the pilot and the owner of the vessel.

ISSUE

Whether or not MPA should be held solidarily liable with Capt. Gavino and FESC for the damages.

RULING

Yes, the Supreme Court affirmed the decision of the Court of Appeals. It held that Capt. Gavino was negligent in the performance of his duties as a pilot and should have ensured that his directions were promptly and strictly followed. The court also found that Capt. Kavankov, the master of the vessel, was also liable for the damages. The court ruled that MPA should be held solidarily liable with Capt. Gavino and FESC because of the concurrent negligence of Capt. Gavino and Capt. Kabankov.

The court's ratio is that MPA should be held solidarily liable with Capt. Gavino and FESC because of the concurrent negligence of Capt. Gavino and Capt. Kabankov. The court also found that the provisions of Customs Administrative Order No. 15-65 establish MPA's liability and are legally binding. The court emphasized the duty of pilots to have thorough knowledge of the waters and to exercise the highest degree of care and diligence in the performance of their duties. The court also held that the provisions of the Civil Code on damages are not applicable in this case because there is no employer-employee relationship between MPA and Capt. Gavino.

Case Digest: Rubiso vs. Rivera, 37 Phil 72, G.R. No. L-11407

Rubiso vs. Rivera, 37 Phil 72, G.R. No. L-11407, October 30, 1917

Subject: Transportation Law

FACTS

The counsel of plaintiff brought a suit alleging that his clients were the owners of the pilot boat named Valentine, which has been in bad condition and on the date of the complaint, was stranded in the place called Tingly, of the municipality of Battings. The defendant Rivera took charge or took possession of the said boat without the knowledge or consent of the plaintiff and refused to deliver it to them, under the claim that he was the owner thereof. The refusal on the part of the defendant has caused the plaintiff damages because they were unable to derive profit from the voyages for which the said pilot boat was customarily used. The defendant, on the other hand, alleged that they purchased the subject pilot boat. The plaintiff alleged that the sale on behalf of the defendant Rivera was prior to that made at public auction to Rubio, but the registration of this latter sale was prior to the sale made to the defendant.

 ISSUE

Whether or not, the plaintiff still has the better right over the subject vessel. 

RULING

Yes, the plaintiff has better right over the subject vessel. 

Article 573 of the Code of Commerce provides that merchant vessels constitute property that may be acquired and transferred by any of the means recognized by law. The acquisition of a vessel must be included in a written instrument, which shall not produce any effect with regard to third persons if not recorded in the commercial registry. The requisite of registration in the registry of the purchase of a vessel is necessary and indispensable in order that the purchaser’s rights may be maintained against a claim filed by third person. 

In this case, it is undeniable that the defendant Florentino E. Rivera's rights cannot prevail over those acquired by Fausto Rubiso in the ownership of the pilot boat Valentina, inasmuch as, though the latter's acquisition of the vessel at public auction, on January 23, 1915, was subsequent to its purchase by the defendant Rivera, nevertheless said sale at public auction was antecedently recorded in the office of the Collector of Customs, on January 27, and entered in the commercial registry — an unnecessary proceeding — on March 4th; while the private and voluntary purchase made by Rivera on a prior date was not recorded in the office of the Collector of Customs until many days afterwards, that is, not until March 17, 1915.

Case Digest: Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance Corp., Ltd., 217 SCRA 359, G.R. No. 100446

 

Aboitiz Shipping Corporation vs. General Accident Fire and Life Assurance Corp., Ltd., 217 SCRA 359, G.R. No. 100446, January 21, 1993

Subject: Transportation Law

 

FACTS

Petitioner is a corporation engaged in the business of maritime trade as a carrier who owned and operated the M/V P/ ABOITIZ, a common carrier that sank on a voyage. Private respondent General Accident Fire and Life Assurance Corporation, Ltd. (GAFLAC) is a foreign insurance company pursuing its remedy as a subrogee of several cargo consignees whose respective cargo sank with the said vessel and for which it has priory paid.

The sinking of vessel gave rise to filling of suit to recover the lost cargo either by shippers, their successors-in-interest, or the cargo insurers like GAFLAC as subrogees. The sinking was initially investigated by the Board of Marine Inquiry, which found that such sinking was due to fortuitous event.

Notwithstanding such finding, the trial court found against the carrier on the basis that the loss was not due to force majeure. The attempted execution of the judgment award in said case gave rise to this case.

Aboitiz contends that the Limited Liability Rule warrants immediate stay of execution of judgment to prevent impairment of other creditor’s shares.

ISSUE

Whether or not the doctrine of limited liability is applicable to this case. 

RULING

Yes, the doctrine of limited liability is applicable to this case.

The provisions under the Code of Commerce provides that limited liability rule covers only civil liabilities for injuries to third parties (Art. 587), acts of the captain (Art. 590) and collisions If these circumstances are attendant then the only time the Limited Liability Rule does not apply is when there is an actual finding of negligence on the part of the vessel owner or agent.

In this case, there has been no actual finding of negligence on the part of Aboitiz. The cause of the sinking of the vessel was because of unseaworthiness due to the failure of the crew and the master to exercise extraordinary diligence. There appears to have been no evidence presented sufficient to form a conclusion that petitioner shipowner itself was negligent.

Case Digest: The Government of the Philippine Islands vs. The Insular Maritime Co., G.R. No. L-21495

 

The Government of the Philippine Islands vs. The Insular Maritime Co., G.R. No. L-21495, March 18, 1924

Subject: Transportation Law

FACTS

The Government of the Philippine Islands seeks by this action to recover from The Insular Maritime Company the sum of P30,437.91 for repairs made by the Bureau of Commerce and Industry on the motor ship Insular.

The Insular Maritime Company became the owner of one vessel only, the Insular, valued at P150,000. On October 29, 1919, The Insular Maritime Company asked the Bureau of Commerce and Industry to perform certain repairs on the Insular.

The Government consented and terminated said repairs on November 29 of the same year. Subsequent thereto, on April 15, 1920, the Insular suffered a total loss by fire. The bill prepared by the chief accountant of the Bureau of Commerce and Industry for work done on the motor ship Insular in the amount of P30,437.91, was dated July 31, 1920. Collection of the claim was attempted pursuant to formal demand made by the Acting Insular Auditor of date April 30, 1921.

It will thus be noted, as was emphasized by the defense and by His Honor, the trial judge, that no steps were taken by the Government to secure payment for the repairs until after the loss of the vessel Insular. The trial judge further found in effect, as a legal conclusion, that the loss of the vessel Insular extinguished the obligation. The Attorney-General challenges the correctness of this view.

ISSUE

Whether or not the obligation of Insular Maritime Company to pay the Bureau of Commerce and Industry for the repairs done has been extinguished.

RULING

No. The obligation to pay on the part of Insular Maritime Company still exists.

As a general rule, the owners of a vessel and the vessel itself are liable for necessary repairs. Naturally, the t destruction of the vessel extinguishes a maritime lien, as there is no longer any res to which it can attach. But the total destruction of the vessel does not affect the liability of the owners for repairs on the vessel completed before its loss.

In this case, the trial court was accordingly right in its exposition of the fact but not in its application of the law. In Article 591 of the Code of Commerce, there is nothing in the language to denote that the liability of the owners of a vessel is wiped out by the loss of that vessel. While the decision in the case of Philippine Shipping Co. vs. Garcia Vergara, supra, the facts are not the same. There, the owners and agents of a vessel causing the loss of another vessel by collision were held "not liable beyond the vessel itself causing the collision," but were "not required to pay such indemnification for the reason that the obligation thus incurred has been extinguished on account of the loss of the thing bound for the payment thereof." In this case, there is a contractual relation that remains unaffected by the loss of the thing concerned in the contract and which is governed principally by the provisions of the Civil Code. The rights and liabilities of owners of ships are in many respects essentially the same as in the case of other owners of things.