Transpo April 13 Digests
Transpo April 13 Digests
Transpo April 13 Digests
CHAPTER 11 - VESSELS
The facts are also admitted by the aforementioned master and
supercargo, two of the defendants, that they received from the plaintiff
1. DEFINITIONS
said P450, which sum was in the latter's own trunk which was placed
*Cases:
outside the stateroom of the banca, for the reason, as they said, that
(a) YU CON, plaintiff-appellee, vs. GLICERIO IPIL, NARCISO there was no room for it inside the stateroom; that these defendants
LAURON, and JUSTO SOLAMO, defendants-appellants. [G.R. No. therefore transferred said money to their trunk, which was inside the
10195. December 29, 1916.]
stateroom, and that this trunk and the P450 therein contained
disappeared from the boat during the night of that same day; that said
FACTS: Petitioner Yu Con, a merchant and a resident of the town of sum had not been found or returned to the plaintiff; that the plaintiff,
San Nicolas, of the city of Cebu, engaged in the sale of cloth and being on the banca in the afternoon of that day, when his trunk
domestic articles and having a share in a shop, or small store, situated containing the P450 was carried aboard, and seeing that said two
in the town of Catmon, of said province, had several times chartered defendants, who had the key of the trunk, had removed said sum to
from the respondent Narciso Lauron, a banca named Maria belonging their trunk inside the stateroom, charged them to take special care of
to the latter, of which Glicerio Ipil was master and Justo Solamo, the money; that the master Ipil assured the plaintiff that there was no
supercargo, for the transportation of certain merchandise and some danger of the money being lost; and that, nally, during the night in
money to and from the said town and the port of Cebu, that, on or question, both the master and the supercargo and four cabin-boys
about the 17th of October, 1911, the plaintiff chartered the said banca were aboard the banca.
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, RTC RULING: In favor of Yu Con. Held that there was no room to
to theirs, which was in a stateroom of the banca, from which stateroom doubt that the sole cause of the disappearance of the money from the
both the trunk and the money disappeared during that same night, and said banca was the negligence of the master and the supercargo, and
TRANSPORTATION LAW April 13 Reading Assignment Page 2 of 31
that the defendant Narciso Lauron was responsible for that negligence, of the Code of Civil Procedure, the said court did not incur the
as owner of the banca. Yu Con was absolved from the defendant's second error assigned by the appellants in their brief. Lastly, as
counterclaim.
the banca Maria did not make the trip she should have made from
RESPONDENTS’ CONTENTIONS: Allege that the trial court erred:
the port of Cebu to the town of Catmon, on the occasion in
question, through causes chargeable, as has been seen, to the
1. In applying articles 586, 587, and 618 of the Code of Commerce in captain and the supercargo of said banca, to wit, because of the
favor of the plaintiff;
loss, theft or robbery of the P450 belonging to the plaintiff, and as
a contract was made for the transportation of the said sum and
2. In overruling the motion for default presented by the defendants and the merchandise from one of said points to the other, for the round
in sentencing the defendants jointly and severally to pay the plaintiff trip, and not through payment by the plaintiff of the wages due the
the amount mentioned in the judgment; and
crew for each day, as alleged by the defendants, for the proofs
presented by the latter in regard to this point were insu cient, as
3. In absolving the plaintiff from the defendants' counterclaim.
the trial court so held, neither did the latter incur error in
overruling the cross-complaint formulated by the defendants in
ISSUE: Whether the defendants are liable for the loss of the amount?
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 According to the Dictionary of Legislation and Jurisprudence by
the store of the town of Catmon, to which it had been consigned. Escriche, a vessel is any kind of craft, considering solely the hull.
FOR
On February 10, 1927, Augusto was desirous of embarking upon the RULING: NO, Whether Article 835 of the Code of Commerce
interisland steamer San Jacinto in order to go to Iloilo. The boat was cannot be applied since Jison is a small boat. In the case before
anchored in port of Silay. The plaintiff therefore embarked at the us the Jison, was propelled by a second-hand motor, originally
landing in the motor boat Jison, which was then engaged in conveying used for a tractor plow; and it had a capacity for only eight
passengers and luggage back and forth from the landing to boats at persons. This was not such a boat as is contemplated in article
anchor, and which was owned and operated by the defendant Albino 835 of the Code of Commerce, requiring protest in case of
Jison, with Juan Duruelo as patron. The engineer (maquinista) aboard collision. The Mamie (5 Fed., 813), wherein it was held that only
on this trip was one Rodolin Duruelo, a boy of only 16 years of age on vessels engaged in what is ordinarily known as maritime
the 3rd day of his apprenticeship. It is alleged that the Jison, upon this commerce are within the provisions of law conferring limited
trip, was grossly overladen, having aboard fourteen passengers, while liability on the owner in case of maritime disaster. It is therefore
its capacity was only for eight or nine. As the boat was approaching clear that a passenger on a boat like the Jison, in the case before
the San Jacinto the propeller of the ship struck the motor boat and us, is not required to make protest as a condition precedent to his
sank it. It was alleged that it was due to the fault negligence and lack if right of action for the injury suffered by him in the collision
skill of Juan as patron of the Jison. As the boat sank, Augusto was described in the complaint. In other words, article 835 of the Code
thrown into the revolving blades and suffered various injuries (a bruise of Commerce does not apply. But even if said provision had been
in the breast, two serious fractures of the bones of the left leg, and a considered applicable to the case in hand, a fair interpretation of
compound fracture of the left femur), hence, Augusto was hospitalised the allegations of the complaint indicates, we think, that the
for 8 months.
injuries suffered by the plaintiff in this case were of such a nature
as to excuse protest; for, under article 836, it is provided that want
RESPONDENT’S CONTENTION: Augusto’s complaint does not show of protest cannot prejudice a person not in a condition to make
a right of action, and in the course of the argument submitted with the known his wishes. An individual who has suffered a compound
demurrer attention is directed to the fact that the complaint does not fracture of the femur and received other physical injuries su cient
allege that a protest had been presented by the plaintiff, within twenty- to keep him in a hospital for many months, cannot be supposed to
four hours after the occurrence, to the competent authority at the port have been in a condition to make protest within twenty-four hours
TRANSPORTATION LAW April 13 Reading Assignment Page 6 of 31
of such occurrence. It follows that the demurrer in this case was Commerce. Other vessels of a minor nature not engaged in maritime
not well taken and should have been overruled. In their brief in this commerce, such as river boats and those carrying passengers from
court the attorneys for the defendant have criticized the complaint ship to shore, must be governed, as to their liability to passengers, by
for a general lack of certainty and precision in more than one the provisions of the Civil Code or other appropriate special provisions
respect. However, we have read the document attentively and, in of law.
in that Book are such as are run by masters having special training,
with the elaborate apparatus of crew and equipment indicated in the The court does not agree with the assignment of the defendants in
Code. The word "vessel" (Spanish, "buque," "nave"), used in the regards to the protest being a condition precedent. As article 835 of
section referred to was not intended to include all ships, craft or the code of commerce that the context of the article is that of collision
floating structures of every kind without limitation, and the provisions of sea going vessels, not to small boats engaged in river and bay
of that section should not be held to include minor craft engaged only traffic, and the vessel must be run by a master with special training
in river and bay traffic. Vessels which are licensed to engage in and competent crew.
used for the transportation of merchandise by sea and for the making
of voyages from one port to another of these Islands, equipped and
victualed for this purpose by its owner, is a vessel, within the purview 1.01 OTHER VESSELS
of the Code of Commerce, for the determination of the character and 1.02 KINDS OF VESSELS
SYLLABUS
4. ACQUISITION
4.01 PRESCRIPTION
835 of the Code of Commerce in case of collision between vessels is 4.03 CO-OWNER’S RIGHTS
injured in a collision between the motor boat and the larger vessel.
5.01 RIGHTS UNDER THE TARIFF AND CUSTOMS CODE
Instance of this city and alleged in the complaint that they were the
owners of the pilot boat named Valentina, which had been in bad ISSUE: Whether Rubiso and Gelito’s rights on the boat prevails over
condition since the year 1914 and, on the date of the complaint, was Rivera’s rights?
Fubiso or Gelito and refused to deliver it to them, under claim that It is undeniable that the defendant Rivera acquired by purchase the
Rivera was the owner thereof; and that such procedure on Rivera's pilot boat Valentina on behalf of the plaintiff Rubiso; but it is no less
part cause the plaintiffs to suffer damages, not only because they true that the sale of the vessel by Sy Qui to Florentino E. Rivera, on
could not proceed to repair the vessel, but also because they were January 4, 1915, was entered in the customs registry only on March
unable to derive profit from the voyages for which said pilot boat was 17, 1915, while its sale is public auction to Fausto Rubiso on the 23d
customarily used; and that the net amount of such uncollected pro t of January of the same year, 1915, was recorded in the o ce of the
was P1,750. The complaint terminated with a petition that judgment be Collector of Customs on the 27th of the same month, and in the
rendered by ordering the defendant to deliver said pilot boat to Fubiso commercial registry on the 4th of March, following; that is, the sale on
and Gelito and indemnify them in the amount aforementioned or in behalf of the defendant Rivera was prior to that made at public auction
such amount as should be proven at trial, and to pay the costs.
to Rubiso, but the registration of this latter sale was prior by may days
to the sale made to the defendant.
Rivera entered a general and specific denial of all the facts set forth in Article 573 of the Code of Commerce provides, in its first paragraph:
The requisite of registration on the registry, of the purchase of a vessel, The purchaser at public auction, Fausto Rubiso, who was careful to
is necessary and indispensable in order that the purchaser's rights record his acquisition, opportunely and on prior date, has, according to
may be maintained against a claim led by a third person. Such the law, a better right than the defendant Rivera who subsequently
registration is required both by the Code of Commerce and by Act No. recorded his purchase. The latter is a third person, who was directly
1900. The amendment solely consisted in charging the Insular affected by the registration which the plaintiff made of the acquisition.
registered his acquisition of the vessel in the one entitled to enjoy the
protection of the law, which considers him the absolute owner of the
has, according to the law, a better right than the defendant Rivera who
subsequently recorded his purchase. Ships or vessels, whether moved
7. SHIP’S MANIFEST
the world commerce; and for this reason the provisions of article 573
10. CABOTAGE
of the Code of Commerce are nearly identical with article 1473 of the
11. REPAIR OF VESSELS
Civil Code. The sale on behalf of the defendant Rivera was prior to that
made at public auction to Rubiso, but the registration of this latter sale
was prior by may days to the sale made to the defendant.
SYLLABUS
The requisite of registration in the registry of the purchase of a vessel 1.01 THE SHIP MORTGAGE DECREE OF 1978
is necessary and indispensable in orderer that the purchaser's rights 1.02 THE CODE OF COMMERCE PROVISIONS
may be maintained against a claim led by a third person; pursuant to 1.03 HISTORY OF SHIP MORTGAGE DECREE
4. MARITIME LIEN
Another Loi was issued directing the foreclosure of the mortgage of the
*Case: POLIAND INDUSTRIAL LIMITED, petitioner, vs. NATIONAL 5 vessel for failure to pay Galleons debt despite demands. DBP upon
DEVELOPMENT COMPANY, DEVELOPMENT BANK OF THE foreclosure of the 5 vessel sold it to NDC.
seeks judgment declaring the National Development Company (NDC) President Aquino issued Administrative Order No. 64 directing NDC
and the DBP solidarily liable representing the maritime lien in favor of and Philippine Export and Foreign Loan Guarantee Corporation (now
POLIAND and the net amount of loans incurred by Galleon Shipping Trade and Investment Development Corporation of the Philippines) to
Corporation (GALLEON). Petitioner NDC seeks the reversal of the transfer some of their
that it acted only as manager. Nor it agreed in the assumption of Article 580, while providing for the order of payment of creditors in the
Galleons liabilities for no purchase and sale agreement was executed event of sale of a vessel, had been repealed by (P.D.) No. 1521 Ship
and the delivery of the required shares of stock of Galleon did not take Mortgage Decree of 1978 Section 17 thereof confers on the preferred
place.
mortgage lien on the vessel superiority over all other claims, thereby
engendering an irreconcilable conflict with the order of preference
RTC RULING: Upon motion by POLIAND, the trial court dropped provided under Article 580 of the Code of Commerce, it follows that
GALLEON as a defendant the trial court concluded that under LOI No. the Code of Commerce provision is deemed repealed by the provision
1155, DBP and NDC are liable for those obligations. In sum, NDC and of P.D. No. 1521, as the poster
ground that NDC did not acquire ownership of GALLEON only control properly applied in the instant case depends on the classification of
and management. NDC was held liable to POLIAND for the payment of the mortgage on the GALLEON vessels
Limited
NDC and DBP both argue that POLIAND's claim cannot prevail over
DBP's mortgage credit over the foreclosed vessels was an ordinary As stated in Section 21, P.D. No. 1521, a maritime lien may consist in
ship mortgage and not a preferred one, for the purpose of "other necessaries spent for the vessel." The ship modification cost
guaranteeing GALLEON's foreign borrowings.
may properly be classified under this broad category because it was a
Section 2 of P.D. No. 1521 recognizes the constitution of a mortgage necessary expenses for the vessel's navigation. As long as an expense
on a vessel, to wit:
on the vessel is indispensable to the maintenance and navigation of
SECTION 2. Who may Constitute a Ship Mortgage. — Any citizen of the vessel, it may properly be treated as a maritime lien for necessaries
the
under Section 21, P.D. No. 1521.
SECTION 17. Preferred Maritime Lien, Priorities, Other Liens. — (a) Only NDC is liable on the maritime lien
Upon the sale of any mortgaged vessel in any extra-judicial sale or by POLIAND maintains that DBP is also solidarily liable for the payment of
order of a district court of the Philippines in any suit in rem in admiralty the preferred maritime lien over the proceeds of the foreclosure sale
order stated: (1) expenses and fees allowed and costs taxed by the
court and taxes due to the Government; (2) crew's wages; (3) general The first argument is absurd. Although POLIAND are not sailors
average; (4) salvage including contract salvage; (5) maritime liens entitled to wages they can still make a claim for the advances spent for
arising prior in time to the recording of the preferred mortgage; (6) the salary and wages of the crew under the principle of legal
TRANSPORTATION LAW April 13 Reading Assignment Page 14 of 31
subrogation. By definition, subrogation is the transfer of all the rights of POLIAND's cause of action against NDC is premised on the theory that
the creditor to a third person who substitutes him in all his rights.
when NDC acquired all the shareholdings of GALLEON, the former
also assumed the latter's liabilities.
years from the time the right of action accrues. The right of action
arose after January 15, 1982 the prescriptive period was tolled when -NDC, not liable under LOI No. 1155
POLIAND made a written demand for the satisfaction on September 24 As a general rule, letters of instructions are simply directives of the
1991. Laches also do not lie because there was no unreasonable delay President of the Philippines Being administrative in nature, they do not
on the part of POLIAND in asserting its rights.
have the force and effect of a law and, thus, cannot be a valid source
of obligation. However President Marcos exercised extraordinary
the Court finds that only NDC is liable for the payment of the maritime legislative powers, which the Court has declared as having the force
lien. maritime lien is akin to a mortgage lien in that in spite of the and effect of a statute including LOI.
NDC had already assumed the management and operations of LOI was issued at the time when the President exercised legislative
GALLEON. NDC could not have pleaded ignorance over the existence powers the LOI is not connected to a grave emergency or threat to
of a prior or preferential lien on the vessels subject of foreclosure.
peace and order. It is only for rehabilitation purpose.
The Court cannot accept POLIAND's theory that with the effectivity of
LOI No. 1155, N D C ipso facto acquired the interests in GALLEON
TRANSPORTATION LAW April 13 Reading Assignment Page 15 of 31
without disregarding applicable statutory requirements governing the Legaspi v. Minister of Finance, paramount considerations compelled
acquisition of a corporation. Ordinarily, in the merger of two or more the grant of extraordinary legislative power to the President at that time
existing corporations, one of the combining corporations survives and when the nation was beset with threats to public order and the
continues the combined business, while the rest are dissolved and all purpose for which the authority was granted was speci c to meet the
their rights, properties and liabilities are acquired by the surviving exigencies of that period[.]
corporation. The merger, however, does not become effective upon the
mere agreement of the constituent corporations. Since no certificate of 3. ID.; ID.; ID.; ID.; CONDITIONS THAT MUST BE ESTABLISHED
merger was issued as the certificate is the consequence that a merger BEFORE A LETTER OF INSTRUCTION MAY BE CONSIDERED A LAW.
took place.
— The following conditions must be established before a letter of
The records do not show SEC approval of the merger.
instruction may be considered a law: To form part of the law of the
land, the decree, order or LOI must be issued by the President in the
DBP, not liable under LOI No. 1155
exercise of his extraordinary power of legislation as contemplated in
Being a mere administrative issuance LOI No. 1155 cannot be a valid Section 6 of the 1976 amendments to the Constitution, whenever in his
source of obligation because it did not create any privity of contract judgment, there exists a grave emergency or threat or imminence
between DBP and POLIAND or its predecessors-in-interest.
thereof, or whenever the interim Batasan Pambansa or the regular
National Assembly fails or is unable to act adequately on any matter
SYLLABUS
for any reason that in his judgment requires immediate action. Only
when issued under any of the two circumstances will a decree, order,
1. POLITICAL LAW; LETTERS OF INSTRUCTION; GENERALLY, or letter be quali ed as having the force and effect of law. The decree
LETTERS OF INSTRUCTION DO NOT HAVE THE FORCE AND or instruction should have been issued either when there existed a
EFFECT OF A LAW AND CANNOT BE A VALID SOURCE OF grave emergency or threat or imminence or when the Legislature failed
OBLIGATION. — As a general rule, letters of instructions are simply or was unable to act adequately on the matter. The qualification that
directives of the President of the Philippines, issued in the exercise of there exists a grave emergency or threat or imminence thereof must be
his administrative power of control, to heads of departments and/or o interpreted to refer to the prevailing peace and order conditions
cers under the executive branch of the government for observance by because the particular purpose the President was authorized to
the o cials and/or employees thereof. Being administrative in nature, assume legislative powers was to address the deteriorating peace and
they do not have the force and effect of a law and, thus, cannot be a order situation during the martial law period.
4. ID.; ID.; ID.; ID.; LETTER OF INSTRUCTION NO. 1155 WAS IN THE
2. ID.; ID.; ID.; EXCEPTION; PRESIDENT MARCOS ISSUED CERTAIN NATURE OF A MERE ADMINISTRATIVE ISSUANCE TO UNDERTAKE A
DECREES, ORDERS AND LETTERS OF INSTRUCTION WHICH THE POLICY MEASURE. — Although LOI No. 1155 was undoubtedly
COURT HAS DECLARED AS HAVING THE FORCE AND EFFECT OF A issued at the time when the President exercised legislative powers
STATUTE. — However, during the period when then President Marcos granted under Amendment No. 6 of the 1973 Constitution, the
exercised extraordinary legislative powers, he issued certain decrees, language and purpose of LOI No. 1155 precludes this Court from
orders and letters of instruction which the Court has declared as declaring that said LOI had the force and effect of law in the absence
having the force and effect of a statute. As pointed out by the Court in of any of the conditions set out in Parong. The subject matter of LOI
TRANSPORTATION LAW April 13 Reading Assignment Page 16 of 31
No. 1155 is not connected, directly or remotely, to a grave emergency exceptions. In the following instances, the Court ruled that an
or threat to the peace and order situation of the nation in particular or appellate court is accorded a broad discretionary power to waive the
to the public interest in general. Nothing in the language of LOI No. lack of assignment of errors and consider errors not assigned: (a)
1155 suggests that it was issued to address the security of the nation. Grounds not assigned as errors but affecting the jurisdiction of the
Obviously, LOI No. 1155 was in the nature of a mere administrative court over the subject matter; (b) Matters not assigned as errors on
issuance directed to NDC, DBP and MARINA to undertake a policy appeal but are evidently plain or clerical errors within contemplation of
measure, that is, to rehabilitate a private corporation.
law; (c) Matters not assigned as errors on appeal but consideration of
which is necessary in arriving at a just decision and complete
5. MERCANTILE LAW; CORPORATION LAW; MERGER AND resolution of the case or to serve the interests of a justice or to avoid
CONSOLIDATION OF CORPORATION; MERGER SHALL ONLY BE dispensing piecemeal justice; (d) Matters not speci cally assigned as
EFFECTIVE UPON THE ISSUANCE OF A CERTIFICATE OF MERGER errors on appeal but raised in the trial court and are matters of record
BY THE SECURITIES AND EXCHANGE COMMISSION (SEC). — having some bearing on the issue submitted which the parties failed to
Ordinarily, in the merger of two or more existing corporations, one of raise or which the lower court ignored; (e) Matters not assigned as
the combining corporations survives and continues the combined errors on appeal but closely related to an error assigned; (f) Matters not
business, while the rest are dissolved and all their rights, properties assigned as errors on appeal but upon which the determination of a
and liabilities are acquired by the surviving corporation. The merger, question properly assigned, is dependent.
however, does not become effective upon the mere agreement of the
constituent corporations. As speci cally provided under Section 79 of 7. MERCANTILE LAW; CODE OF COMMERCE; ARTICLE 378
said Code, the merger shall only be effective upon the issuance of a THEREOF GOVERNS THE SALE OF VESSELS IN A FOREIGN PORT;
certi cate of merger by the Securities and Exchange Commission NOT APPLICABLE IN CASE AT BAR. — NDC cites Articles 578 and
(SEC), subject to its prior determination that the merger is not 580 of the Code of Commerce to bolster its argument that the
inconsistent with the Code or existing laws. Where a party to the foreclosure of the vessels extinguished all claims against the vessels
merger is a special corporation governed by its own charter, the Code including POLIAND's claim. Article 578 of the Code of Commerce is
particularly mandates that a favorable recommendation of the not relevant to the facts of the instant case because it governs the sale
appropriate government agency should rst be obtained. The issuance of vessels in a foreign port. Said provision outlines the formal and
of the certi cate of merger is crucial because not only does it bear out registration requirements in order that a sale of a vessel on voyage or
SEC's approval but also marks the moment whereupon the in a foreign port becomes effective as against third persons. On the
consequences of a merger take place. By operation of law, upon the other hand, the resolution of the instant case depends on the
effectivity of the merger, the absorbed corporation ceases to exist but determination as to which creditor is entitled to the proceeds of the
its rights, and properties as well as liabilities shall be taken and foreclosure sale of the vessels. Clearly, Article 578 of the Code of
deemed transferred to and vested in the surviving corporation.
Commerce is inapplicable.
6. REMEDIAL LAW; CIVIL PROCEDURE; APPEAL BY CERTIORARI; 8. ID.; PRESIDENTIAL DECREE NO. 1521 (SHIP MORTGAGE DECREE
GENERALLY, AN APPELLATE COURT MAY ONLY PASS UPON OF 1978); PREFERRED MORTGAGE LIEN; SECTION 17 THEREOF
ERRORS ASSIGNED; EXCEPTIONS. — Generally, an appellate court REPEALED ARTICLE 580 OF THE CODE OF COMMERCE. — Article
may only pass upon errors assigned. However, this rule is not without 580, while providing for the order of payment of creditors in the event
TRANSPORTATION LAW April 13 Reading Assignment Page 17 of 31
of sale of a vessel, had been repealed by the pertinent provisions of instant case compared to the Civil Code provisions on the concurrence
Presidential Decree (P.D.) No. 1521, otherwise known as the Ship and preference of credit. General legislation must give way to special
Mortgage Decree of 1978. In particular, Article 580 provides that in legislation on the same subject, and generally be so interpreted as to
case of the judicial sale of a vessel for the payment of creditors, the embrace only cases in which the special provisions are not applicable.
debts shall be satis ed in the order speci ed therein. On the other hand,
Section 17 of P.D. No. 1521 also provides that in the judicial or 11. ID.; ID.; ID.; MARITIME LIEN ARISING PRIOR IN TIME TO THE
extrajudicial sale of a vessel for the enforcement of a preferred RECORDING OF THE PREFERRED MORTGAGE IS CONSIDERED TO
mortgage lien constituted in accordance with Section 2 of P.D. No. BE SUPERIOR TO THE LATTER. — Before POLIAND's claim may be
1521, such preferred mortgage lien shall have priority over all pre- classi ed as superior to the mortgage constituted on the vessel, it must
existing claims against the vessel, save for those claims enumerated be shown to be one of the enumerated claims which Section 17, P.D.
under Section 17, which have preference over the preferred mortgage No. 1521 declares as having preferential status in the event of the sale
lien in the order stated therein. Since P.D. No. 1521 is a subsequent of the vessel. One of such claims enumerated under Section 17, P.D.
legislation and since said law in Section 17 thereof confers on the No. 1521 which is considered to be superior to the preferred mortgage
preferred mortgage lien on the vessel superiority over all other claims, lien is a maritime lien arising prior in time to the recording of the
thereby engendering an irreconcilable con ict with the order of preferred mortgage. Such maritime lien is described under Section 21,
preference provided under Article 580 of the Code of Commerce, it P.D. No. 1521[.] . . . Under the aforequoted provision, the expense
follows that the Code of Commerce provision is deemed repealed by must be incurred upon the order of the owner of the vessel or its
the provision of P.D. No. 1521, as the posterior law.
authorized person and prior to the recording of the ship mortgage.
Under the law, it must be established that the credit was extended to
9. ID.; ID.; ID.; IF IT IS CONSTITUTED FOR THE PURPOSE STATED the vessel itself.
of the claims against the vessel is the more applicable statute to the
TRANSPORTATION LAW April 13 Reading Assignment Page 18 of 31
13. REMEDIAL LAW; EVIDENCE; CREDIBILITY; GENERALLY, 15. CIVIL LAW; OBLIGATIONS AND CONTRACTS; STATUTE OF
FINDINGS OF FACT OF LOWER COURTS ARE DEEMED FRAUDS; INAPPLICABLE WHEN THERE IS NO CONTRACT
CONCLUSIVE AND BINDING UPON THE SUPREME COURT. — All BETWEEN THE PARTIES. — DBP's reliance on the Statute of Frauds is
told, the determination of the existence and the amount of POLIAND's misplaced. Article 1403 (2) of the Civil Code, which enumerates the
claim for maritime lien is a nding of fact which is within the province of contracts covered by the Statute of Frauds, is inapplicable. To begin
the courts below. Findings of fact of lower courts are deemed with, there is no privity of contract between POLIAND or its
conclusive and binding upon the Supreme Court except when the predecessors-in-interest, on one hand, and DBP, on the other.
ndings are grounded on speculation, surmises or conjectures; when POLIAND hinges its claim on the maritime lien based on LOI No. 1195
the inference made is manifestly mistaken, absurd or impossible; when and P.D. No. 1521, and not on any contract or agreement.
courts of admiralty wherein the property alone is treated as responsible 5.02 WAIVER OF LIEN
for the claim or obligation upon which the proceedings are based. 5.03 PRESCIPTION AND LACHES
Considering that DBP subsequently transferred ownership of the 5.04 MARITIMES LIENS FOR NECESSARIES
vessels to NDC, the Court holds the latter liable on the maritime lien. *Case: CRESCENT PETROLEUM, LTD., petitioner, vs. M/V "LOK
Notwithstanding the subsequent transfer of the vessels to NDC, the MAHESHWARI," THE SHIPPING CORPORATION OF INDIA, and
maritime lien subsists.
PORTSERV LIMITED and/or TRANSMAR SHIPPING,
INC., respondents. [G.R. No. 155014. November 11, 2005.]
19. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; WHERE THE In a nutshell, this case is for the satisfaction of unpaid supplies
INEVITABLE CONCLUSION FROM THE BODY OF THE DECISION IS furnished by a foreign supplier in a foreign port to a vessel of foreign
SO CLEAR AS TO SHOUT THAT THERE WAS A MISTAKE IN THE registry that is owned, chartered and sub-chartered by foreign entities.
case, it is clear from the trial court records and the Court of Appeals'
Rollo that the bigger amount awarded in the dispositive portion of the 1995, Portserv requested petitioner Crescent Petroleum a canadian
Court of Appeals' Decision was a typographical mistake. Considering corporation engaged in the business of selling petroleum and oil
that the appellate court's Decision merely a rmed the trial court's nding products for the use and operation of oceangoing vessels, to deliver
with respect to the amount of maritime lien, the bigger amount stated marine fuel oils to the Vessel. Petitioner Crescent granted the request
in the dispositive portion of the Court of Appeals' Decision must have through facsimile.
As security for the payment of the bunker fuels and related services, it The case has to be dismissed.
Marine Petrobulk delivered the bunker fuels, Having paid Marine the following are the requisites for maritime liens on necessaries to
Petrobulk, Crescent issued a revised invoice to "Portserv Limited, of exist: (1) the "necessaries" must have been furnished to and for the
M/V 'Lok Maheshwari.
benefit of the vessel; (2) the "necessaries" must have been necessary
The period lapsed and several demands were made but no payment for the continuation of the voyage of the vessel; (3) the credit must
was received.
have been extended to the vessel; (4) there must be necessity for the
extension of the credit; and (5) the necessaries must be ordered by
while the Vessel was docked at the port of Cebu City, Crescent persons authorized to contract on behalf of the vessel.
instituted before the RTC of Cebu City an action "for a sum of money
against respondent vessel.
First. It was not established that benefit was extended to the vessel.
Second. Petitioner Crescent did not show any proof that the marine
For failing to file their answers trial court declared respondents Vessel products were necessary for the continuation of the vessel.
in default.
Third. It was not established that credit was extended to the vessel.
CA RULING: REVERSED RTC on the ground of forum non conveniens A time charter is a contract for the use of a vessel for a specified
considering that the parties are foreign corporations which are not period of time or for the duration of one or more specified voyages
doing business in the
wherein the owner of the time-chartered vessel retains possession and
Philippines."
control through the master and crew who remain his employees. Not
enjoying the presumption of authority, petitioner Crescent should have
ISSUES:
proved that Portserv was authorized by the shipowner to contract for
WON RTC has jurisdiction over the case - YES
supplies.
Respondents Vessel and SCI, maintain that Section 21 of the P.D. No.
Sec. 21. Maritime Lien for Necessaries; persons entitled to such lien.
1521 does not apply to a foreign supplier
whether the court has or will exercise jurisdiction, depends on the law
of the country where the supplies were furnished, which must be First. Out of the seven basic factors listed in the case of Lauritzen,
pleaded and proved."
Philippine law only falls under one — the law of the forum. All other
elements are foreign — Canada is the place of the wrongful act, of the
Two. The Lauritzen-Romero-Rhoditis trilogy of cases, which replaced allegiance or domicile of the injured and the place of contract; India is
such single-factor methodologies as the law of the place of supply.
the law of the flag and the allegiance of the defendant shipowner.
The following factors were considered: (1) place of the wrongful act; Balancing these basic interests, it is inconceivable that the Philippine
(2) law of the flag; (3) allegiance or domicile of the injured; (4) court has any interest in the case that outweighs the interests of
allegiance of the defendant shipowner; (5) place of contract; (6) Canada or India for that matter.
inaccessibility of foreign forum; and (7) law of the forum. (8) in hellenic
lines vs RHoditis ship owners base of operation is another factor in Second. P.D. No. 1521 or the Ship Mortgage Decree of 1978 is
determining whether the Jones Act is applicable; and there well may inapplicable following the factors under Restatement (Second) of
be others."
Conflict of Laws. Like the Federal Maritime Lien Act of the U.S., P.D.
No. 1521 or the Ship Mortgage Decree of 1978 was enacted primarily
THIS IS applicable not only to personal injury claims arising under the to protect Filipino suppliers and was not intended to create a lien from
Jones Act but to all matters arising under maritime law in general.
a contract for supplies between foreign entities delivered in a foreign
Lauritzen test is not a mechanical one. the list of seven factors in
port.
place of contracting; (b) the place of negotiation of the contract; (c) the
place of performance; (d) the location of the subject matter of the Finally. The submission of petitioner is not in keeping with the
contract; and (e) the domicile, residence, nationality, place of reasonable expectation of the parties to the contract. The contract of
incorporation and place of business of the parties.
supplies could not have intended to be the laws of a remote country to
The initial choice of law determination is significantly affected by the determine the creation of a lien by the mere accident of the vessel
statutory policies surrounding a maritime lien.
being in the Philippine territory.
6.01 PURPOSE
A typhoon passed over the region while the boat was sailing the
6.02 FORMAL REQUIREMENTS
captain was compelled for the safety of all to jettison the entire
6.03 MARINA RULES
consignment of petroleum consisting of two hundred cases. After, only
13 cases were recovered, the rest was lost.
CHAPTER 13 - PERSONS WHO TAKE PART IN MARITIME No question is made upon the point that the captain exercised proper
COMMERCE
discretion in casting this petroleum overboard as a step necessary to
the salvation of the ship;
not permitted to be carried in the hold of any passenger vessel, though In the case the captain of the vessel did not take those steps; that the
it may be carried on the deck if certain precautions are taken due to its failure of the captain to take those steps gave rise to a liability for
flammable nature.
which the owner of the ship must answer.
The reason is that in the coastwise trade the boats are small and the owner of the ship, in the person of the captain, has complete and
voyages are short, and she can port easily. And also to encourage exclusive control of the crew and of the navigation of the ship, as well
traffic even if not altogether ideal.
as of the disposition of the cargo at the end of the voyage.
From what has been said it is evident that the loss of this petroleum is The evident intention of the Code, taken in all of its provisions, is to
a general and not a special average.
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
It is universally recognized that the captain is primarily the venture, namely, the owner of the ship, leaving him to obtain recourse
representative of the owner and article 586 of the Code of Commerce from other individuals who have been drawn into the venture as
expressly declares that both the owner of the vessel and the naviero, shippers.
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 RULING: YES the owner is liable, But it does not necessarily follow
acts of the former.
that Siy Cong Bieng & Co as charterer or agent is exempt from
liability; and both the owner and agent can be held responsible
where both are impleaded together.
from a collision.
the coastwise steamer Ban Yek left the port of Naga on the Bicol River That naviero, as used in the Spanish text of article 826, means owner
Camarines Sur, with destination to the City of Manila. As the ship is further to be inferred from article 837, which limits the civil liability
approached the Malbong bend of the Bicol River, Gainza, another expressed in article 826 to the value of the vessel with all her
vessel, the Perla was up the river on the way to Naga. the Ban Yek appurtenances and all the freight earned during the voyage.
gave two blasts with her whistle, thus indicating an intention to pass
TRANSPORTATION LAW April 13 Reading Assignment Page 26 of 31
There would have been no propriety in limiting liability to the value of (b) WING KEE COMPRADORING COMPANY, plaintiff-appellant, vs.
the vessel unless the owner were understood to be the person liable. It THE BARK "MONONGAHELA," VICTOR S. FOX & CO., INC., owner
is therefore clear that by special provision of the Code of Commerce of the bark Monongahela, THE ADMIRAL LINE, and C.G.
the owner is made responsible for the damage caused by an accident LOTHIGIUS, defendants-appellees. [G.R. No. 19540. January 29,
of the kind under consideration in this case; and in more than one case 1923.]
this court has held the owner liable, when sued alone
action had its origin in a tortious act and did not arise from contract.
A regular justice of the peace would without doubt be competent to In 1921 Admiral Line no longer was an agent of Bark Monongahela.
take a marine protest, and the same authority must be conceded to But supplies were furnished to Monongahela after the agency was
the auxiliary justice in the absence of any showing in the record to the terminated.
effect that the justice of the peace himself was acting at the time in the
municipality.
WING KEE COMPRADORING COMPANY wants for the Admiral Line,
as the agent for the Bark Monongahela, to pay the claim, leaving the
Upon the point of responsibility for the collision the fault is to be latter to reimburse itself.
agent.
Art 586
"The owner of a vessel and the agent shall 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 therein.
when the agents buy in their own names, but really for the account of
their principal the seller has an option to look to either for payment,
unless (1) he trusted the agent exclusively; or (2) by the usage and
understanding of the business the agent only is held; or (3) unless the
special circumstances of the case show that only the agent was
intended to be bound and the seller knew it or was chargeable with
knowledge of it.
SYLLABUS
of the fire was the explosion of the motorboat when readying to sail,
due to the near proximity of the gasoline and petroleum’s leak and not SYLLABUS
enough ventilation.
MASTER AND SERVANT; SHIPOWNER'S OR SHIP AGENT'S
LIABILITY FOR ACTS OF HIS EMPLOYEES. — It having been proven
RTC RULING: Ruled in favor of Yu there is negligence
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
ISSUE: Whether Ossorio is ought to be liable for the negligence of his charge thereof and under whose direction the loading of cases of
agents and employees
petroleum and gasoline had been affected, and that the said persons
are agents of the shipowner or ship agent, the latter is liable for the
RULING: YES, Ossorio is ought to be liable for the negligence of negligent acts committed by them, under articles 587, 613, and 618 of
his agents and employees. Defendant sentenced to pay the the Code of Commerce, and 1902, 1903, and 1908 of the Civil Code.
2. PART OWNERS
CA RULING: affirmed RTC finding that petitioner was not the agent of
3. POWERS AND FUNCTIONS OF SHIP AGENT
Trade and Transport.
*Cases:
However, that petitioner could still be held liable for the shortages of
(a) MACONDRAY & CO., INC., petitioner, vs. PROVIDENT the shipment because the latter was the ship agent of Canpotex the
INSURANCE CORPORATION, respondent. [G.R. No. 154305. shipper and charterer of the vessel M/V Trade Carrier. Petitioner
December 9, 2004.]
represented the vessel.
Hornbook is the doctrine that the negligence of counsel binds the ISSUE: Whether Macondray and Co. Inc., as an agent is responsible
client. Also settled is the rule that clients should take the initiative of for any loss sustained by any party from the vessel owned by
periodically checking the progress of their cases, so that they could defendant Trade and Transport.
RULING:
FACTS: On 1991 CANPOTEX SHIPPING SERVICES LIMITED INC., of Petition is DENIED and the assailed Decision AFFIRMED
Upon arrival CONSIGNEE discovered that the shipment sustained loss Article 586 of the Code of Commerce
Hence, whether acting as agent of the owner of the vessel or as agent The subject vessel is owned by P.T. Pakarti Tata (PAKARTI) which it
of the charterer, petitioner will be considered as the ship agent and chartered to (SHINWA). Representing itself as owner of the vessel,
may be held liable as such, as long as the latter is the one that SHINWA entered into a charter party contract with Sky an agent of Kee
provisions or represents the vessel.
Yeh which further chartered it to Regency. Thus, it was REGENCY that
Acts of petitioners employees points that they are the shippers agent
directly dealt with consignee HEINDRICH and issued clean bill of
As ship agent, it may be held civilly liable in certain instances. The lading.
Code of
Commerce provides:
The vessel arrived at the Port of Manila it was found upon inspection
"Article 586. The ship-owner and the ship agent shall be civilly liable that 43,905 bags were in bad order and condition.
for the acts of the captain and for the obligations contracted by the Unable to collect the sustained damages from the shipper, CARDIA,
latter to repair, equip, and provision the vessel, provided the creditor and the charterer, REGENCY, each paid the consignee, HEINDRICH
proves that the amount claimed was invested for the benefit of the and consequently became subrogated to all the rights and causes of
same."
action accruing to HEINDRICH.
"Article 587. The ship agent shall also be civilly liable for the respondents filed a complaint for damages against Regency , Sky,
indemnities in favor of third persons which may arise from the conduct Ace.
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 PAKARTI and SHINWA alleged ACENAV claimed that, not being privy
all her equipment’s and the freight it may have earned during the to the bill of lading it was not a real party-in-interest from whom the
voyage."
respondents can demand compensation. They claimed that they were
agent of Shipper Cardia not of the vessel or regency
(b) ACE NAVIGATION CO., INC., petitioner, vs. FGU INSURANCE Another claim were filed by heindrich which was later consolidated.
FACTS: 1990, Cardia Limited (CARDIA) shipped on board the vessel CA RULING: found PAKARTI, SHINWA, KEE YEH and its agent, SKY,
M/V Pakarti Tiga at Shanghai Port China, tons worth of Grey Portland solidarily liable remaining 30% to be shouldered solidarity by CARDIA
Cement to be discharged at the Port of Manila and delivered to its and its agent, ACENAV,
consignee, (HEINDRICH).
PAKARTI and SHINWA moved or the withdrawal of their petitions for The shipowner and the ship agent shall be civilly liable for the acts of
lack of interest
the captain and for the obligations contracted by the latter to repair,
equip, and provision the vessel, provided the creditor proves that the
Only the petition of ACENAV remained for the Court's resolution
amount claimed was invested therein.
principal.
On this score, Article 1868 of the Civil Code states that an agent is not
Decision and Resolution of the Court of Appeals hereby REVERSED
personally liable to the party with whom he contracts unless he
expressly binds himself or exceeds the limits of his authority without
bill of lading is defined as "an instrument in writing, signed by a carrier giving such party sufficient notice of his powers.
or his agent, describing the freight so as to identify it, stating the name Records are bereft of any showing that ACENAV exceeded its authority
of the consignor, the terms of the contract for carriage, and agreeing or in the discharge of its duties as a mere agent of CARDIA. Furthermore,
directing that the freight to be delivered to the order or assigns of a since CARDIA was not impleaded as a party in the instant suit, the
specified person at a specified place."
liability attributed upon it that the damage sustained by the cargo was
It operates both as a receipt and as a contract.
due to improper packing cannot be borne by ACENAV.
The original parties to the bill of lading are: (a) the shipper CARDIA; (b) 4. CAPTAINS AND MASTERS OF VESSELS