UNCIANO, JENNY FLOR C. 2010-0048 A. Averages 1. Concept (Art. 806, CC) 2.

Classes of average and the persons liable a. Simple average (Art. 809-810, CC) b. General average (Art. 811, 812-813, 816-818, 732, 859861, CC) Collisions 1. Definition 2. Zones in collision (see: doctrine of error in extremis) 3. Rules on liability (Art. 826-832 CC; see: doctrine of inscrutable fault) 4. Limited liability rule (Art. 837, CC)

B.

A. AVERAGES 1. Concept Article 806 of the Code of Commerce provides that: “For the purposes of this code the following shall be considered averages: 1. All extraordinary or accidental expenses which may be incurred during the voyage in order to preserve the vessel, the cargo, or both; 2. Any damages or deteriorations which the vessel may suffer from the time it puts to sea from the port of departure until it casts anchor in the port of destination, and those suffered by the merchandise from the time they are loaded in the port of shipment until they are unloaded in the port of their consignment.”
2. Classes of average and the persons liable •

Where both vessel and cargo are saved, it is general average; where only the vessel or only the cargo is saved, it is simple average.

a. Particular or Simple average

The losses and expenses suffered by the vessel in its hull. 5. The loss inflicted upon the vessel or cargo by reason of an impact or collision with another. or to meet any other need of the vessel. and especially the following: 1. The wages and victuals of the crew when the vessel is detained or embargoed by legitimate order or force majeure. The losses suffered by the merchandise loaded on deck. 3. and equipment. 8. simple or particular averages shall include all the expenses and damages caused to the vessel or to her cargo which have not inured to the common benefit and profit of all the persons interested in the vessel and her cargo. and the expenses incurred to avoid and repair the same. arms. If the accident should occur through the fault or negligence of the captain. 7. against which the proper amount shall be charged.Article 809 of the Code of Commerce provides that: “As a general rule. if it is accidental and unavoidable. 4. . except in coastwise navigation. if the marine ordinances allow it. from the time it puts to sea from the port of departure until it anchors and lands in the port of destination. in order to make repairs or secure provisions. if the charter has been contracted for a fixed sum for the voyage. either on account of inherent defect of the goods or by reason of an accident of the sea or force majeure. 6. for the same causes and reasons. The necessary expenses on arrival at a port. The losses suffered by the cargo from the time of its embarkation until it is unloaded. The lowest value of the goods sold by the captain in arrivals under stress for the payment of provisions and in order to save the crew. 2. The victuals and wages of the crew while the vessel is in quarantine. rigging. the latter shall be liable for all the losses caused.

It is the safety of the property. Article 810 of the Code of Commerce provides that: “The owner of the goods which gave rise to the expense or suffered the damage shall bear the simple or particular averages. common safety factor. Exception: if there is insurance Exception to the Exception: Stipulated in the insurance policy stating no liability on the part of the insurer regarding particular average. vs. Inc. Principle: Loss will lie where it falls. or barratry of the captain or of the crew. without prejudice to the right of the owner to recover the corresponding indemnity from the captain. Not only is there absence of a marine peril.” General Rule: No reimbursement. (A. 967 Phil 504 [1955]) . and the freightage. which are deliberately caused in order to save the vessel and/or its cargo from real and known risk resulting in a common benefit. and deliberateness. in order to continue its voyage. which constitutes the true foundation of general average. Magasaysay. • Expenses incurred to refloat a vessel. General average Includes all damages and expenses. Reason: There was no common benefit. the vessel.” Q: Who is liable? A: Owner of the goods b. do not constitute general average. Thes expenses and damages shall be borne ratably among all those having interest in the vessel and cargo at the time of the occurrence of the average. Agan.9. and not the voyage. which accidentally ran aground. negligence. Any loss suffered by the cargo through the fault.

whether they belong to the cargo. should he prefer it. The cables and masts which are cut or rendered useless. the vessel. 7. The expenses of removing or transferring a portion of the cargo in order to lighten the vessel and place it in condition to enter a port or roadstead. and particularly the following: 1. The goods or cash invested in the redemption of the vessel or of the cargo captured by enemies. or pirates. The expenses for the treatment and subsistence of the members of the crew who may have been wounded or crippled in defending or saving the vessel. and the damage resulting therefrom to the goods removed or transferred. in order to save the cargo. and the necessary expenses which he may incur in his imprisonment. The wages of any member of the crew held as hostage by enemies. or pirates. . 2. the anchors and the chains which are abandoned. and the provisions. 8. and the damage suffered through said act by the goods which are kept on board. The damage suffered by the goods of the cargo by the opening made in the vessel in order to drain it and prevent its sinking. 4. its cargo. or both. privateers. privateers. or both at the same time. or to the crew. general or gross averages shall include all the damages and expenses which are deliberately caused in order to save the vessel. until he is returned to the vessel or to his domicile. from a real and known risk. and expenses of the vessel detained during the time the settlement or redemption is being made. to the vessel. scuttled or broken in order to save the cargo. 6. 9. 5.Article 811 of the Code of Commerce provides that: “As a general rule. 3. wages. The damage caused to the vessel which had to be opened. The expenses caused in order to float a vessel intentionally stranded for the purpose of saving it. The goods jettisoned to lighten the vessel.

lack of skill. should consider certain measures necessary. or negligence. they may be executed under his responsibility. they shall not contribute to the gross average. The wages and victuals of the crew of a vessel chartered by the month. The depreciation resulting in the value of the goods sold at arrival under stress in order to repair the vessel by reason of gross average. it shall be necessary insofar as the cargo is concerned that their existence on board be proven by means of the bill of lading. or in order to repair the damage caused for the common benefit. unless the urgency of the case should be such that the time necessary for previous deliberations was wanting. 12. and the captain and officers or a majority of them. there must be a resolution of the captain. If the latter shall object. have not been heard. being on board the vessel. If the persons interested in the cargo.” Article 816 of the Code of Commerce states that: “In order that the goods jettisoned may be included in the gross average and the owners thereof be entitled to indemnity.” . by means of the inventory prepared before the departure in accordance with the first paragraph of Article 812. and after hearing the persons interested in the cargo who may be present. adopted after deliberation with the sailing mate and other officers of the vessel.” Article 812 of the Code of Commerce provides that: “In order to satisfy the amount of the gross or general averages. all the persons having an interest in the vessel and cargo therein at the time of the occurrence of the average shall contribute. if opposed to the majority. if they can prove that he acted with malice. The expenses of the liquidation of the average. and with regard to those belonging to the vessel. 11. or the captain. without prejudice to the right of the shippers to proceed against the captain before the competent judge or court. during the time that it is embargoed or detained by force majeure or by order of the government.10.” Article 813 of the Code of Commerce provides that: “In order to incur the expenses and cause the damages corresponding to gross average. their share being chargeable against the captain.

” Article 859 of the Code of Commerce provides that: “The insurers of the vessel of the freightage. the general average which may take place in the goods on which the loan is made. in proportion to their respective interest. creek. as if the loss had originated from a gross average. the vessel should be lost running the same risk. in the absence of an express agreement between the contracting parties. If. notwithstanding the jettison of merchandise. in order to facilitate its entry into a port or roadstead. on the contrary. and equipment. after the vessel has been saved from the risk which gave rise to the jettison. lost. this loss shall be considered gross average. the merchandise transferred should be saved and the vessel should be lost. In particular averages.” Article 818 of the Code of Commerce states that: “If. The owners of the goods saved shall not be liable for the indemnification of those jettisoned. ropes. to which the vessels saved shall contribute. or damaged. insofar as is required of each one of these objects respectively.” Article 860 of the Code of Commerce provides that: “If. should it not belong to the kind of risks excepted in the foregoing article.” Article 732 of the Code of Commerce provides that: “Lenders on bottomry or respondentia shall suffer. the lender on bottomry or respondentia shall also contribute in proportion to his respective interest. no liability may be demanded of the salvage. the amount thereof being distributed between the vessel and cargo from which it came. and of the cargo shall be obliged to pay for the indemnification of the gross average.Article 817 of the Code of Commerce states that: “if in lightning a vessel on account of a storm. breakage of masts. no contribution whatsoever by reason of gross average shall be proper.” Article 861 of the Code of Commerce provides that: “If. the owner of said part shall be entitled to indemnity. part of the cargo should be transferred to lighters or barges and be lost. as a necessary measure to extinguish a fire in port. it should be decided to sink any vessel. or bay. it should be lost through another accident taking place . roadstead.

3.” Remedy: Reimbursement General Rule: The sacrifice made must be in the course of the voyage. Common danger Exposure to common danger to ship and the cargo after it has been loaded whether during voyage or port of loading and unloading. Article 817 of the Code of Commerce which covers fire in the port. Article 818 of the Code of Commerce which covers transfer of cargo to another vessel for the necessity to enter another port. Requisites: 1. Proper Formalities and Legal Steps That the expenses or damages should have been incurred or inflicted after taking legal steps and authority Formalities: 1. 4. If the latter disagree. adopted after a deliberation with the other officers of the vessel and after hearing all persons interested in the cargoes. 2. the decision of the captain should prevail but they shall register their objections. Deliberate Sacrifice That for the common safety part of the vessel or the cargo or both is sacrificed deliberately. deducting the expenses incurred in saving them. There must be a resolution of the captain. and 2. Success That from the expenses or damages caused follows the successful saving of the vessel and cargo. the goods saved and existing from the first risk shall continue liable to contribution by reason of the gross average according to their value in the condition in which they may be found.during the voyage. Exceptions: General average exists even if there is no voyage yet: 1. .

Goods not recorded in the books or records of the vessel. It must be signed. Q: What if A and B were found to be negligent. who bears the consequential damages? A: With regard to the vessel. who bears the consequential damages? A: A shall be liable for the consequential damages for she is at fault. Injury or death of passenger Example: Q: A and B collided. With regard to the cargoes and passengers. Damage to vessel b. Goods carried on deck. COLLISIONS 1. 2. The resolution must be entered in the logbook. stating the reasons and motives for the dissent. in the first case. B. A was found to be negligent. Loss/damage to cargo c. and the irresistible and urgent causes if he acted in his own accord. each vessel shall be liable for their own losses. Goods Not Covered By General Average Even If Sacrificed 1. Zones in Collision (Doctrine of error in extremis) .2.the act of throwing cargo overboard in order to lighten the vessel. The minutes must also contain a detail of all the goods jettisoned and those injuries caused to those on board. Possible damage: a. by the captain and all the officers of the vessel. Jettison. 3. by all persons present in the hearing. In the second case. they are solidarily liable. Fuel for the vessel if there is more than sufficient fuel for the voyage. Allision is an impact between a moving vessel and a stationary one. 2. Definition Collision is an impact of two vessels both of which are moving.

*Knowing these zones are important for liability purposes. through the fault. *This doctrine is inapplicable in the following instances: 1. and 2. or lack of skill of the captain. both parties are at fault but only one party is liable. Third zone – time when collision is certain and time of impact. Rule on Liability (1)Article 826 of the Code of Commerce provides that: “If a vessel should collide with another.” • The collision may be due to the fault. If the suit is between a parties of contract of carriage. *An error in this zone would no longer be legally consequential. had in fact an opportunity later than that of the plaintiff to avoid an accident. 3. Doctrine of Last Clear Chance provides that a negligent defendant is held liable to a negligent plaintiff or even to a plaintiff who has been grossly negligent where he should have been aware of it in the reasonable exercise of due care. after an expert appraisal. the owner of the vessel at fault shall indemnify the losses and damages suffered. sailing mate. Doctrine of Error in Extremis is a sudden movement made by a faultless vessel during the third zone of collision with another vessel which is at fault during the second zone. negligence. sailing mate. Even if such sudden movement is wrong. or any other member of the . negligenceor lack of skill of the captain. *It is in this period where conduct of the vessels is primordial. no responsibility will fall on said faultless vessel. 1. First zone – all time up to the moment when risk of collision begins 2. or any other member of the complement. In case of collision of vessels 3. Only the party who has the last clear opportunity to avoid the impact is held liable. It is in this zone that vessels must strictly observe nautical rules unless a departure therefrom becomes necessary to avoid imminent danger. *In this doctrine. Second zone – time between moment when risk of collision begins and moment it becomes a practical certainty.

and • . 2. (3)Article 828 of the Code of Commerce states that: “The provisions of the preceding article are applicable to the use in which it cannot be determined which of the two vessels has caused the collision. Doctrine of Inscrutable Fault provides that in case of collision where it cannot be determined which between the two vessels was at fault. Each vessel shall suffer its own losses. but as regards the owner of cargoes both vesselsshall be jointly and severally liable. each vessel and its cargo shall bear its own damages.complement of the vessel. The common carrier must have exercised due diligence to prevent or minimize loss before.” Article 830 of the Code of Commerce states that: “If a vessel should collide with another. The owner of the vessel at fault may be liable for losses or damages. both vessels bear their respective damage.” Requisites: 1. which may be proper. The common carrier must not have been guilty of delay.” The collision may be due to the fault of bithe vessels. (2)Article 827 of the Code of Commerce provides that: “If the collision is imputable to both vessels. Article 829 of the Code of Commerce states that: “In the cases above mentioned the civil action of the owner against the person causing the injury as well as the criminal liabilities. during and after the occurrence of the natural disaster.” • If it cannot be determined which vessel is at fault. 3. *This is known as the Doctrine of Inscrutable Fault. The natural disaster must have been the proximate and only cause of the loss. through fortuitous event or force majeure. each vessel shall also sufer its own losses and both shall be solidarily liable for losses or damages on the cargoes. each one shall suffer its own damages. but both should be solidarily liable for damage to the cargo of both vessels. are reserved. and both shall be solidarily responsible for the losses and damages occasioned to their cargoes.

Limited Liability Rule *There must be no fault on the part of the shipowner. the captain thereof being civilly liable to said owner. (5) Article 831 of the Code of Commerce provides that: “If a vessel should be forced by a third vessel to collide with another. The captain must have made a protest before the competent authority at the first port he touched within the 24 hours following his arrival. 4. the injury occasioned shall be considered as particular average of the vessel run into. (4) The vessels may collide with each other through fortuitous event or force majeure. *The fault falls only with his crew. causing them damages. The third vessel will be liable for losses and damages. the owner of the third vessel shall indemnify the losses and damages caused. a vessel which is properly anchored and moored should collide with those nearby.4. General Rule: The liability of shipowner and ship agent is limited to the amount of interest in said vessel such that where vessel is . each shall bear its own damage. proceeding immediately with the proof of the facts. * This is known as the Doctrine of Proximate Cause (6) Article 832 of the Code of Commerce states that: “If by reason of a storm or other cause of force majeure.” • A vessel which is properly anchored and moored may collide with those nearby. and should have ratified it within the same period when he arrived at the port of destination. without opening the hatches until after this has been done.” • Two vessels may collide with each other without their fault by reason of a third vessel. by reason of storm or other cause of force majeure. In this case. The vessel run into shall suffer its own damage and expense.

CA. or 7. Laserna. In case the vessel would totally sink or get lost by reason of the ship owner or ship agents fault. IAC. bay or gulf. the obligation is extinguished. The interest extends to: 1. 2. ( Heirs of Amparo Delos Santos vs. 150751. 4. In case the vesselisnot common but a special carrier. In case of expense for equipping. repairing or provisioning of the vessel. 3.) The limited liability doctrine applies not only to the goods but also in all cases like death or injury to passengers.entirely lost. America. Equipments. 73 Phil 330) • When shipowner was equally negligent. Of N. it cannot escape liability by virtue of the limited liability rule ( Central Shipping Co. The vessel itself. Escano. vs INsurnace Co. 5. ( Chua vs. Freightage. ( Yangco vs. When the injury to or death of a passenger is due either to the fault of the ship owner and the captain. 6. Insurance proceeds. ( Luzon Stevedoring vs. 2. The voyage is not maririme. 186 SCRA 649) • . GR No. In workmen’s compensation claims. 2004. 166 SCRA 183 [ 1988]) Exceptions: When not applicable: 1. but only in river. 3. 4. September 20. 156 SCRA 169 [1987]). When the vessel is insured ( to the extent of the insurance proceeds).

Article 837 of the Code of Commerce states that: “The civil liability incurred by the shipowners in the case prescribed in this section.” . shall be understood as limited to the value of the vessel with all its appurtenances and freightage.

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