LITONJUA SHIPPING VS.

NATIONAL SEAMEN BOARD

DOCTRINE: Kinds of Charter Parties
KEYWORD: bareboat, time and voyage charter
PONENTE: FELICIANO, J.

FACTS:
Petitioner Litonjua is the duly appointed local crewing Managing Office of the Fairwind Shipping Corporation ('Fairwind).
The M/V Dufton Bay is an ocean-going vessel of foreign registry owned by the R.D. Mullion Ship Broking Agency Ltd.
("Mullion"). While the Dufton Bay was in the port of Cebu and while under charter by Fairwind, the vessel's master
contracted the services of, among others, private respondent Gregorio Candongo to serve as Third Engineer for a period
of twelve (12) months with a monthly wage of US$500.00. This agreement was executed before the Cebu Area Manning
Unit of the NSB. Thereafter, private respondent boarded the vessel. Before expiration of his contract, private
respondent was required to disembark at Port Kelang, Malaysia, and was returned to the Philippines. The cause of the
discharge was described in his Seaman's Book as 'by owner's arrange".

Shortly after returning to the Philippines, private respondent filed a complaint before public respondent NSB, for
violation of contract, against Mullion as the shipping company and petitioner Litonjua as agent of the shipowner and of
the charterer of the vessel.

At the initial hearing, the NSB hearing officer held a conference with the parties, at which conference petitioner Litonjua
was represented by one of its supercargos, Edmond Cruz. Edmond Cruz asked, in writing, that the hearing be postponed
for a month upon the ground that the employee of Litonjua in charge of the case was out of town. The hearing officer
denied this request and then declared petitioner Litonjua in default. At the hearing, private respondent testified that
when he was recruited by the Captain of the Dufton Bay, the latter was accompanied to the NSB Cebu Area Manning
Unit by two (2) supercargos sent by petitioner Litonjua to Cebu, and that the two (2) supercargos Edmond Cruz and
Renato Litonjua assisted private respondent in the procurement of his National Investigation and Security Agency (NISA)
clearance. Messrs. Cruz and Litonjua were also present during private respondent's interview by Captain Ho King Yiu of
the Dufton Bay.

NSB HEARING OFFICER:
From the evidence on record it clearly appears that there was no sufficient or valid cause for the respondents to
terminate the services of complainant prior to the expiry date of the contract. For this reason the respondents have
violated the conditions of the contract of employment which is a sufficient justification for this Board to render award in
favor of the complainant of the unpaid salaries due the latter as damages corresponding to the unexpired portion of the
contract including the accrued leave pay.


NSB CENTRAL OFFICE:
While it appears that in the preparation of the employment papers of the complainant, what was indicated therein was
R.D. Mullion Co. (HK) Ltd. as thecompany whom Captain Ho King Yiu, the Master of the vessel Dufton Bay, was
representing to be the shipowner, the fact remains that at the time of the recruitment of the complainant, as duly
verified by the National Seamen Board, Cebu Area Manning Unit, the Litonjua Shipping Company was the authorized
agent of the vessel's charterer, the Fairwind Shipping Corporation, and that in the recruitment process, the Litonjua
Shipping Company through its supercargos in the persons of Edmund Cruz and Renato Litonjua, had knowledge thereof
and in fact assisted in the interviews conducted by the Master of the crew applicants as admitted by Renato Litonjua
including the acts of facilitating the crew's NISA clearances as testified to by complainant. Moreover, the participation of
the Litonjua Shipping Corporation in the recruitment of complainant, together with the other crewmembers, in Cebu can
be traced to the contents of the letter by the Fairwind Shipping Limited, thru its Director David H.L. Wu addressed to the
National Seamen Board.
The NSB then lifted the suspension of the hearing officer's decision.

Petitioner Litonjua once more moved for reconsideration.
On public respondent NSB rendered a decision which affirmed its hearing offices decision:

The master of the vessel acted for and in behalf of Fairwind Shipping Corporation who had the obligation to pay the
salary of the complainant. It necessarily follows that Fairwind Shipping Corporation is the employer of said complainant.
Moreover, it had been established by complainant that Litonjua Shipping Company, Inc., had knowledge of and
participated, through its employee, in the recruitment of herein complainant.

ISSUE:
Whether or not the charterer Fairwind was properly regarded as the employer of private respondent Candongo.

PETITIONER'S CONTENTION:
Litonjua contends that the shipowner, not 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. It is insisted that private
respondent's contract of employment and affidavit of undertaking clearly showed that the party with whom he had
contracted was none other than Mullion, the shipowner, represented by the ship's master. Petitioner also argues that its
supercargos merely assisted Captain Ho King Yiu of the Dufton Bay in being private respondent as Third Engineer.
Petitioner also points to the circumstance that the discharge and the repatriation of private respondent was specified in
his Seaman's Book as having been "by owner's arrange." Litonjua thus argues that being the agent of the charterer and
not of the shipowner, it accordingly should not have been held liable on the contract of employment of private
respondent.

SUPREME COURT:
In modern maritime law and usage, there are three (3) distinguishable types of charter parties: (a) the "bareboat" or
"demise" charter; (b) the "time" charter; and (c) the "voyage" or "trip" charter.

A bareboat or demise charter is a demise of a vessel, much as a lease of an unfurnished house is a demise of real
property. The shipowner turns over possession of his vessel to the charterer, who then undertakes to provide a crew
and victuals and supplies and fuel for her during the term of the charter. The shipowner is not normally required by the
terms of a demise charter to provide a crew, and so the charterer gets the "bare boat", i.e., without a crew. Sometimes,
of course, the demise charter might provide that the shipowner is to furnish a master and crew to man the vessel under
the charterer's direction, such that the master and crew provided by the shipowner become the agents and servants or
employees of the charterer, and the charterer (and not the owner) through the agency of the master, has possession
and control of the vessel during the charter period.

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. In this case, however, the owner of a time-chartered vessel
(unlike the owner of a vessel under a demise or bare-boat charter), 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.

It is well settled that in a demise or bare boat charter, the charterer is treated as owner pro hac vice of the vessel, the
charterer assuming in large measure the customary rights and liabilities of the shipowner in relation to third persons
who have dealt with him or with the vessel. In such case, the Master of the vessel is the agent of the charterer and not
of the shipowner. The charterer or owner pro hac vice, and not the general owner of the vessel, is held liable for the
expenses of the voyage including the wages of the seamen.

It is important to note that petitioner Litonjua did not place into the record of this case a copy of the charter party
covering the M/V Dufton Bay. We must assume that petitioner Litonjua was aware of the nature of a bareboat or
demise charter and that if petitioner did not see fit to include in the record a copy of the charter party, which had been
entered into by its principal, it was because the charter party and the provisions thereof were not supportive of the
position adopted by petitioner Litonjua in the present case, a position diametrically opposed to the legal consequence of
a bareboat charter. Treating Fairwind as owner pro hac vice, petitioner Litonjua having failed to show that it was not
such, we believe and so hold that petitioner Litonjua, as Philippine agent of the charterer, may be held liable on the
contract of employment between the ship captain and the private respondent.

There is a ethically more compelling basis for holding petitioner Litonjua liable on the contract of employment of private
respondent. The charterer of the vessel, Fairwind, clearly benefitted from the employment of private respondent as
Third Engineer of the Dufton Bay, along with the ten other Filipino crewmembers recruited by Captain Ho in Cebu at the
same occasion. If private respondent had not agreed to serve as such Third Engineer, the ship would not have been able
to proceed with its voyage. Secondly, the scope of authority or the responsibility of petitioner Litonjua was not clearly
delimited.

There is the circumstance that extreme hardship would result for the private respondent if petitioner Litonjua, as
Philippine agent of the charterer, is not held liable to private respondent upon the contract of employment. Clearly, the
private respondent, and the other Filipino crew members of the vessel, would be defenseless against a breach of their
respective contracts. While wages of crew members constitute a maritime lien upon the vessel, private respondent is in
no position to enforce that lien. If only because the vessel, being one of foreign registry and not ordinarily doing
business in the Philippines or making regular calls on Philippine ports cannot be effectively held to answer for such
claims in a Philippine forum. Upon the other hand, it seems quite clear that petitioner Litonjua, should it be held liable to
private respondent for the latter's claims, would be better placed to secure reimbursement from its principal Fairwind.
In turn, Fairwind would be in an indefinitely better position (than private respondent) to seek and obtain recourse from
Mullion, the foreign shipowner, should Fairwind feel entitled to reimbursement of the amounts paid to private
respondent through petitioner Litonjua. #Dugena





























PLANTERS PRODUCTS, INC VS. CA
KEYWORDS: Charter-Party; UREA FERTILIZER

DOCTRINE: A public carrier shall remain as such, notwithstanding the charter of the whole or portion of a vessel by one
or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is
only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes
private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a
time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the
property of the charterer.

FACTS: Planters Products, Inc. (PPI), purchased from Mitsubishi International Corporation (MITSUBISHI) of New York,
U.S.A., Urea 46% fertilizer which the latter shipped in bulk aboard the cargo vessel M/V Sun Plum owned by private
respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Alaska, U.S.A., to Port Point, San Fernando, La Union, Philippines.

Prior to its voyage, a time charter-party on the vessel M/V Sun Plum pursuant to the Uniform General Charterwas
entered into between Mitsubishi as shipper/charterer and KKKK as shipowner.

Before loading the fertilizer aboard the vessel, four (4) of herholdswere all presumably inspected by the charterers
representative and found fit to take a load of urea in bulk. The vessels hold to be properly swept, cleaned and dried at
the vessels expense and the vessel to be presented clean for use in bulk to the satisfaction of the inspector before
daytime commences.

After the Urea fertilizer was loaded in bulk by stevedores hired by and under the supervision of the shipper, the steel
hatches were closed with heavy iron lids, covered with three (3) layers of tarpaulin, then tied with steel bonds. The
hatches remained closed and tightly sealed throughout the entire voyage.

Upon arrival of the vessel at her port of call, the steel pontoon hatches were opened with the use of the vessels boom.
The hatches remained open throughout the duration of the discharge.

It took eleven (11) days for PPI to unload the cargo. The survey report submitted by CSCI (Cargo
SuperintendentsCompany Inc.) to the consignee (PPI) dated 19 July 1974 revealed a shortage in the approximating 18
M/T was contaminated with dirt.

ISSUE: WON the charter party changed the character of the public carrier to a private carrier?

LOWER COURT: IN FAVOR OF PETITIONER. Lower Court held the carrier liable. A common carrier is presumed negligent
in case of loss or damage of the goods it contracts to transport

CA: REVERSED. The cargo vessel M/V Sun Plum owned by private respondent KKKK was a private carrier and not a
common carrier by reason of the time charter-party.

SC: NO. A charter-party is defined as a contract by which an entireship, or some principal part thereof, is let by the
owner toanother person for a specified time or use. A contract ofaffreightment by which the owner of a ship or other
vessel lets the whole or a part of her to a merchant or other person for the conveyance of goods, on a particular voyage,
in consideration of the payment of freight.

Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space on vessels leased
by the owner in part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat charter, by the
terms of which the whole vessel is let to the charterer with a transfer to him of its entire command and possession and
consequent control over its navigation, including the master and the crew, who are his servants.

Contract of affreightment may either be time charter, wherein the vessel is leased to the charterer for a fixed period of
time, or voyage charter, wherein the ship is leased for a single voyage.In both cases, the charter-party provides for the
hire of the vessel only, either for a determinate period of time or for a single or consecutive voyage, the shipowner to
supply the ships stores, pay for the wages of the master and the crew, and defray the expenses for the maintenance of
the ship.

When petitioner chartered the vessel M/V Sun Plum, the ship captain, its officers and compliment were under the
employ of the shipowner and therefore continued to be under its direct supervision and control. Hardly then can we
charge the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the charterer did
not have any control of the means in doing so. This is evident in the present case considering that the steering of the
ship, the manning of the decks, the determination of the course of the voyage and other technical incidents of maritime
navigation were all consigned to the officers and crew who were screened, chosen and hired by the shipowner.

It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion
of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or
voyage-charter.

HOWEVER, the presumption of negligence on the part of the respondent carrier has been efficaciously overcome by the
showing of extraordinary zeal and assiduity exercised by the carrier in the care of the cargo. The period during which
private respondent was to observe the degree of diligence required of it as a public carrier began from the time the
cargo was unconditionally placed in its charge after the vessels holds were duly inspected and passed scrutiny by the
shipper, up to and until the vessel reached its destination and its hull was re-examined by the consignee, but prior to
unloading. #ENCARNACION
































CALTEX VS SULPICIO

KEYWORD/S: MT VECTOR AND DOA PAZ COLLISION, DUMALI POINT, CONTRACT OF AFFREIGHTMENT--VOYAGE
CHARTER

FACTS:
MT VECTOR owned and operated by Vector Shipping left Limay, Bataan at about 8:00pm on Dec 19, 1987 eon route to
Masbate, loaded with petroleum products shipped by CALTEX. On the other hand, on Dec 20, 1987 at about 6:30 am
passenger ship owned by SULPICIO LINES MV DOA PAZ left the port of Tacloban headed for Manila with a complement
of 59 crew members including the master and his officers and passengers totaling 1,493 as indicated in the coastguard
clearance.

At about 10:30 pm of Dec 20, 1987 the two vessels collided in the open sea within the vicinity of Dumali Point between
MARINDUQUE AND ORIENTAL MINDORO. All crew members of MV DOA PAZ died, while 2 survivors from MT VECTOR
claimed that they were sleeping at the time of the incident.

THE MV DOA PAZ carried an estimated 4,000 passengers; many were not in the manifest. Only 24 survived the tragedy.
The BUREAU OF MARINE INQUIRY(BMI) after investigation found that MT VECTOR, it's registered owner and operator
were at fault. SULPICIO alleged that CALTEX chartered MT VECTOR with gross and evident bad faith knowing fully well
that MT VECTOR WAS IMPROPERLY MANNED, ILL-EQUIPPED, UNSEAWORTHY AND A HAZARD TO SAFE NAVIGATION.

ISSUE: WHETHER OR NOT THE CALTEX IS LIABLE

RULING :
No, the charterer of a vessel has no obligation before transporting its cargo to ensure that the vessel it chartered
complied with all legal requirements. The duty rests upon the common carrier simply being engaged in "public service".
The civil code demands diligence which is required by the nature of the obligation and that which corresponds with the
circumstances of the persons, time and of the place.

In the case at bar, CALTEX AND VECTOR entered into a contract of affreightment, also known as voyage charter wherein
the ship is leased for a single voyage. The charter party provides for the hire of the VESSEL ONLY, the ship owner to
supply the ship's store, pay for wages of the master of the crew and defray expenses for the maintenance of the ship. If
the charterer is a contract of affreightment, which leaves the general owner in possession of the ship as owner for the
voyage, THE RIGHTS AND RESPONSIBILITIES OF OWNERSHIP REST ON THE OWNER. THE CHARTERER IS FREE FROM
LIABILITY TO THIRD PERSONS IN RESPECT OF THE SHIP.

THE SUPREME COURT CHARACTERIZED THE SAID SPECIE OF CHARTER PARTY AS ONE WHICH DOES NOT AFFECT THE AT
ALL THE NATURE OF THE BUSINESS OF SULPICIO LINES AS A COMMON CARRIER.#ESGUERRA















WILLIAMS V YANGCO

KEYWORD: Subic

DOCTRINE: Since it does NOT appear from the evidence that the perilous situation of the launch in time to avoid the
accident by the exercise of ordinary care, it is very clear that the plaintiff cannot escape the legal consequences of the
contributory negligence of his launch, even were we to hold that the doctrine is applicable in this jurisdiction.

FACTS:
The steamer Subic, owned by the defendant, collided with the launch Euclid owned by the plaintiff, in the Bay of Manila
at an early hour on the morning of January 9, 1911, and the Euclid sank five minutes thereafter. The findings of record
disclosed that the officers on both boats were negligent in the performance of their duties at the time of the accident,
and that both vessels were to blame for the disaster. (Yes, ito lang ang facts na nasa full text ng case)

Plaintiffs defense based his contentions upon the theory of the facts as contended for by him, insists that under the
doctrine of "the last clear chance," the defendant should be held liable because, as he insists, even if the officers on
board the plaintiffs launch were negligent in failing to exhibit proper lights and in failing to take the proper steps to
keep out of the path of the defendants vessel, nevertheless the officers on defendants vessel, by the exercise of due
precautions might have avoided the collision by a very simple maneuver.

ISSUES:WON plaintiff (Elucid) has a cause of action against defendant. RULING:

Trial court
Euclid was worth at a fair valuation P10,000; that both vessels were responsible for the collision; and that the loss
should be divided equally between the respective owners, P5,000 to be paid to the plaintiff by the defendant, and
P5,000 to be borne by the plaintiff himself.
The trial judge was of opinion that the vessels were jointly responsible for the collision and should be held jointly liable
for the loss resulting from the sinking of the launch. But actions for damages resulting from maritime collisions are
governed in this jurisdiction by the provisions of section 3, title 4, Book III of the Code of Commerce, and among these
provisions we find the following:
"ART. 827. If both vessels may be blamed for the collision, each one shall be liable for its own damages, and both shall
be jointly responsible for the loss and damage suffered by their cargoes."

CA
We are all agreed with the trial judge in his holding that the responsible officers on both vessels were negligent in the
performance of their duties at the time when the accident occurred, and that both vessels were to blame for the
collision.

SUPREME COURT:
None. In disposing of this case the trial judge apparently had in mind that portion of the section which treats of the joint
liability of both vessels for loss or damage suffered by their cargoes. In the case at bar, however, the only loss incurred
was that of the launch Euclid itself, which went to the bottom soon after the collision.
In cases of a disaster arising from mutual negligence of two parties, the party who has a last clear opportunity of
avoiding the accident, notwithstanding the negligence of his opponent, is considered wholly responsible for it under the
common-law rule of liability as applied in the courts of common law in the United States. But this, is limited in its
application by the further rule, that where the previous act of negligence of one vessel has created a position of danger,
the other vessel is not necessarily liable for the mere failure to recognize the perilous situation; and it is only when in
fact it does discover it in time to avoid the casualty by the use of ordinary care, that it becomes liable for the failure to
make use of this last clear opportunity to avoid the accident
In the case at bar, the most that can be said in support of plaintiffs contention is that there was negligence on the part
of the officers on defendants vessel in failing to recognize the perilous situation created by the negligence of those in
charge of plaintiffs launch, and that had they recognized it in time, they might have avoided the accident. But since it
does NOT appear from the evidence that they did, in fact, discover the perilous situation of the launch in time to avoid
the accident by the exercise of ordinary care, it is very clear that under the above set out limitation to the rule, the
plaintiff cannot escape the legal consequences of the contributory negligence of his launch, even were we to hold that
the doctrine is applicable in this jurisdiction, upon which point we expressly reserve our decision at this time.
#FLORANDA
















Smith Bell And Company Inc. And Tokyo Marine And Fire Insurance Co., Inc Vs. Court Of Appeals And Carlos A. Go
Thong And Co.,
KEYWORD: #DonCarlos #YotaiMaru #Banggaantayu...then selfie after XD

DOCTRINE: CIVIL LAW; QUASI-DELICT; NEGLIGENCE; FACTORS CONSTITUTIVE THEREOF WHICH NEGLIGENCE WAS THE
PROXIMATE CAUSE OF THE COLLISION; 3 Principal Factors

SHORT FACTS: On 3 May 1970, 3:50 a.m., on the approaches to the port of Manila near Caballo Island, a collision took
place between the M/V Don Carlos, an inter-island vessel owned and operated by Carlos A. Go Thong and Company
(Go Thong), and the M/S Yotai Maru, a merchant vessel of Japanese registry. The Don Carlos was then sailing
south bound leaving the port of Manila for Cebu, while the Yotai Maru was approaching the port of Manila, coming in
from Kobe, Japan. The bow of the Don Carlos rammed the portside (left side) of the Yotai Maru inflicting a 3 cm.
gaping hole on her portside near Hatch 3, through which seawater rushed in and flooded that hatch and her bottom
tanks, damaging all the cargo stowed therein. The consignees of the damaged cargo got paid by their insurance
companies.

The insurance companies in turn, having been subrogated to the interests of the consignees of the damaged cargo,
commenced actions against Go Thong for damages sustained by the various shipments in the then CFI of Manila. 2 cases
were filed in the CFI of Manila.

The first case was commenced by Smith Bell and Sumitomo Marine and Fire Insurance Company Ltd., against Go Thong,
in Branch 3, which was presided over by Judge Bernardo P. Fernandez.
The second case was filed by Smith Bell and Company, Inc. and Tokyo Marine and Fire Insurance Company, Inc. against
Go Thong in Branch 4, which was presided over by then Judge, later Associate Justice of this Court, Serafin R. Cuevas.
Civil Cases 82567 (Judge Fernandez) and 82556 (Judge Cuevas) were tried under the same issues and evidence relating
to the collision between the Don Carlos and the Yotai Maru the parties in both cases having agreed that the
evidence on the collision presented in one case would be simply adopted in the other.

ISSUE: Whether or not M/V Don Carlos was negligent and thus shall be held liable for the collision

PETITIONERS CONTENTION:
In their Petition for Review, petitioners assail the finding and conclusion of the Sison Decision, that the "Yotai Maru" was
negligent and at fault in the collision, rather than the "Don Carlos."

RESPONDENTS CONTENTION:
Private respondent Go Thong, upon the other hand, argues that the Supreme Court, in rendering its minute Resolution
in G.R. No. L-48839, had merely dismissed Go Thongs Petition for Review of the Reyes, L.B., J. Decision for lack of merit
but had not affirmed in toto that Decision. Thus, Go Thong concludes, this Court did not hold that the "Don Carlos" had
been negligent in the collision.

RULING:
1. TRIAL COURT: In favor of petitioner. In both cases, the Manila CFI held that the officers and crew of the Don Carlos
had been negligent, that such negligence was the proximate cause of the collision and accordingly held Go Thong liable
for damages to the insurance companies.
2. APPELLATE COURT
a) In CA-GR 61320-R, the Court of Appeals through Reyes, L.B., J., rendered affirmed the Decision of Judge Fernandez. Go
Thong moved for reconsideration, without success.
b) In CA-GR 61206-R, the Court of Appeals through Sison, P.V., J., reversed the Cuevas Decision and held the officers of
the Yotai Maru at fault in the collision with the Don Carlos, and dismissed the insurance companies complaint.
Smith Bell & Co. and the Tokyo Marine & Fire Insurance Co. Inc. asked for reconsideration, to no avail. Hence, the
petition for review on certiorari.

3. SUPREME COURT: M/V Don Carlos was negligent.
(a) Reyes ( ) J. Fernandez decision: Go Thong then went to the Supreme Court on Petition for Review. Supreme Court
denied the Petition for lack of merit. Go Thong filed a Motion for Reconsideration; the Motion was denied by the
Supreme Court .
(b) Sison ( X )Cuevas decision: The Supreme Court reversed and set aside the Decision of the Court of Appeals in CA-GR
61206-R, and reinstated and affirmed the decision of the trial court in its entirety; with costs against Go Thong.
The SC ruled that M/V Don Carlos was negligent and its negligence was the sole proximate cause of the collision and of
the resulting damages. The Court believes that there are three (3) principal factors which are constitutive of negligence
on the part of the "Don Carlos," which negligence was the proximate cause of the collision.
1) The failure of the "Don Carlos" to comply with the requirements of Rule 18 (a) of the International Rules of the Road.
(page 499 footnote in Aquino transpo book 2011 ed)
2) "Don Carlos" was its failure to have on board that might a "proper look-out" as required by Rule I (B). Under Rule 29
of the same set of Rules, all consequences arising from the failure of the "Don Carlos" to keep a "proper look-out" must
be borne by the "Don Carlos.
A "proper look-out" is one who has been trained as such and who is given no other duty save to act as a look-out and
who is stationed where he can see and hear best and maintain good communication with the officer in charge of the
vessel, and who must, of course, be vigilant.
3) The third factor constitutive of negligence on the part of the "Don Carlos" relates to the fact that Second Mate Benito
German was, immediately before and during the collision, in command of the "Don Carlos." Second Mate German
simply did not have the level of experience, judgment and skill essential for recognizing and coping with the risk of
collision as it presented itself that early morning when the "Don Carlos," running at maximum speed and having just
overtaken the "Don Francisco" then approximately one mile behind to the starboard side of the "Don Carlos," found
itself head-on or nearly head-on vis-a-vis the "Yotai Maru." It is essential to point out that this situation was created by
the "Don Carlos" itself.
Article 633 of the Code of Commerce provides: The second mate shall take command of the vessel in case of the
inability or disqualification of the captain and sailing mate, assuming, in such case, their powers and liability. #GUETA















National Development Company vs. Court of Appeals
TOPIC: Collisions
KEYWORD/s: Doa Nati <3 Yasushima Maru

DOCTRINES:
- The laws of the Philippines will apply in case at bar and it is immaterial whether the collision actually occurred in
foreign waters.
- Liability of owner and agent of vessel; The agent even though he was not the owner of the vessel, is liable to the
shippers and owners of cargo transported by it, for losses and damages to the cargo without prejudice to his
rights against the owner of the ship. It is well settled that both the owner and agent of the offending vessel
are liable for the damage done where both are impleaded; that in case of collision, both the owner and the
agent are civilly responsible for the acts of the captain

FACTS:
- A memorandum was entered into between defendants National Development Company (NDC) and Maritime
Company of the Philippines (MCP) on September 13, 1962:
- Defendant NDC as the first preferred mortgagee of 3 ocean-going vessels including vessel Doa Nati
appointed defendant MCP as its agent to manage and operate said vessels in its behalf.
- February 28, 1964 - The E. Phillipp Corporation of the New York loaded on board the vessel Doa Nati at San
Francisco, California, a total of 1,200 bales of American raw cotton
- consigned to the order of Manila Banking Corporation and the Peoples Bank and Trust Company, acting for and
in behalf of the Pan Asiatic Commercial Company, Inc., who represents Riverside Mills Corporation
- At 6:04 a.m. on April 15, 1964 at Ise Bay, Japan - the vessel figured in a collision with a Japanese vessel (SS
Yasushima Maru). As a result of which 550 bales of aforesaid cargo were lost and/or destroyed
- The damage and lost cargo was worth P344,977.86 which amount, the Development Insurance and Surety
Corporation as insurer, paid to the Riverside Mills Corporation as holder of the negotiable bills of lading duly
endorsed. The insurer filed before the CFI of Manila an action for the recovery of said amount from NDC and
MCP.

PETITIONERS CONTENTION:
The Carriage of Goods by Sea Act should apply to the case at bar and not the Civil Code or the Code of Commerce, in
determining the liability for loss of cargos resulting from the collision outside the territorial jurisdiction of the PH
Under Section 4 (2) of said Act, the carrier is NOT responsible for the loss or damage resulting from the "act, neglect or
default of the master, mariner, pilot or the servants of the carrier in the navigation or in the management of the ship."
Petitioners insist that based on the findings of the trial court which were adopted by the Court of Appeals, both pilots of
the colliding vessels were at fault and negligent.

PRIVATE RESPONDENTS CONTENTION:
DISC had paid as insurer the total amount of P364,915.86 to the consignees or their successors-in-interest, for the said
lost or damaged cargoes., and thus entitled to recovery from the ship owner or carrier.

ISSUE: W/N the COGSA will apply to collision of vessels in foreign waters

RULING:
TRIAL COURT
NDC and MCP are liable to DISC; COGSA was not applied in determining the liability of NDC and MCP
COURT OF APPEALS: affirmed in toto

SUPREME COURT:
NO. The Code of Commerce is applicable in the case. It was held that the law of the country to which the goods are to
be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. Thus, the
rule was specifically laid down that for cargoes transported from Japan to the Philippines, the liability of the carrier is
governed primarily by the Civil Code and in all matters not regulated by said Code, the rights and obligations of common
carrier shall be governed by the Code of Commerce and by special laws.

It appears, however, that collision falls among matters NOT specifically regulated by the Civil Code, so that no reversible
error can be found in respondent courts application to the case at bar of Articles 826 to 839, Book Three of the Code of
Commerce, which deal exclusively with collision of vessels.

More specifically, Article 826 of the Code of Commerce provides that where collision is imputable to the personnel of a
vessel, the owner of the vessel at fault, shall indemnify the losses and damages incurred after an expert appraisal. But
more in point to the instant case is Article 827 of the same Code, which provides that if the collision is imputable to both
vessels, each one shall suffer its own damages and both shall be solidarily responsible for the losses and damages
suffered by their cargoes.

Significantly, under the provisions of the Code of Commerce, particularly Articles 826 to 839, the ship owner or carrier, is
not exempt from liability for damages arising from collision due to the fault or negligence of the captain.
Primary liability is imposed on the shipowner or carrier in recognition of the universally accepted doctrine that the
shipmaster or captain is merely the representative of the owner who has the actual or constructive control over the
conduct of the voyage.

MCPs claim that the fault or negligence can only be attributed to the pilot of the vessel SS Yasushima Maru and not to
the Japanese Coast pilot navigating the vessel Dona Nati, need not be discussed lengthily as said claim is not only at
variance with NDCs posture, but also contrary to the factual findings of the trial court affirmed no less by the Court of
Appeals, that both pilots were at fault for not changing their excessive speed despite the thick fog obstructing their
visibility. #LEANO





















Mecenas (v) CA, Capt. Santisteban and Negros Navigation Co. Inc.
Key Phrase : Green Light Starboard (Chap3 keyword : mahjong)

Doctrine :"Route observance" of the International Rules of the Road (Rule18) will not relieve a vessel from responsibility
if the collision could have been avoided by proper care and skill on her part or even by a departure from the rules.

FACTS:
"M/V Don Juan" sank within 10-15 min from impact causing the death of hundreds of its passengers (the collision
incident happened around 10:30pm of April 22, 1980 when the sea was calm, the weather fair and the visibility was
good)

Defendant PNOC's version
An interisland vessel (M/V Don Juan) owned and operated by Negros Navigation was first sighted at about 5 or 6
miles from a barge-type oil tanker (M/T Tacloban City) owned by the Philippine National Oil Company (PNOC)
and operated PNOC Shipping
Don Juan was on the starboard (right) side of Tacloban City and as it approached, Tacloban City gave a leeway of
10 to the left to enable Tacloban to see the direction of Don Juan.
Don Juan switched to green light, signifying that it will pass Tacloban City's right side; it will be a starboard to
starboard passing and Tacloban City's purpose in giving a leeway of 10 at this point, is to give Don Juan more
space for her passage (this leeway was increased by Tacloban City to an additional 15 towards the left) at this
time the way was clear and Don Juan has not changed its course.When Tacloban City altered its course the
second time, from 300 to 285, Don Juan was about 4.5 miles away and despite executing a hardport
maneuver, the collision nonetheless occurred as Don Juan rammed the Tacloban City near the starboard bow

Negros Navigations version
Don Juan first sighted Tacloban City 4 miles away and Tacloban City showed its red and green lights twice; it
proceeded to, and will cross, the path of Don Juan (Tacloban was on the left side of Don Juan)
Upon seeing Tacloban's red and green lights, Don Juan executed hard starboard (Tacloban was about 1,500 feet
away) in conformity with the rule that "when both vessels are head on or nearly head on, each vessel must turn
to the right in order to avoid each other"; nonetheless, Tacloban appeared to be heading towards Don Juan.
Don Juan, after execution of hard starboard, will move forward 200 meters before the vessel will respond to
such maneuver; Between 9 to 15 seconds from execution of hard starboard, collision occurred.

Alleging negligence of defendants, the 7 legitimate children of Sps. Mecenas file a complaint against Negros Navigation
and the captain of the "Don Juan" (Capt. Roger Santisteban).

ISSUES: Whether or not private respondents acted recklessly (with gross negligence).

RULING:
Regional Trial Court of QC defendants are equally negligent and liable
M/ V Don Juan and Tacloban City became aware of each other's presence in the area by visual contact at a distance of
something like 6 miles from each other and they were fully aware that if they continued on their course, they will meet
head on. They executed maneuvers inadequate, and too late, to avoid collision thus the defendants are equally
negligent and are liable for damages.

Court of Appeals
"Don Juan" was at least as negligent as the M/T "Tacloban City" in the events leading up to the collision and the sinking
of the "Don Juan."

Supreme Court petition for review on certiorari is granted (CA = reversed & set aside)
1. Grossness of the negligence of "Don Juan" underscored in the context of the following facts:
"Don Juan" was more than twice as fast as the "Tacloban City" because The "Don Juan's" top speed was 17 knots
while that of the "Tacloban City" was 6.3. knots
"Don Juan" carried the full complement of officers and crew members specified for a passenger vessel of her
class
"Don Juan" was equipped with radar which was functioning that night
"Don Juan's" officer on-watch had sighted the "Tacloban City" on his radar screen while the latter was still four
(4) nautical miles away and visual confirmation of radar contact was established by the "Don Juan" while the
"Tacloban City" was still 2.7 miles away

2. Had "Don Juan" taken seriously its duty of extraordinary diligence, it could have easily avoided the collision with the
"Tacloban City," and indeed, the "Don Juan" might well have avoided the collision even if it had exercised ordinary
diligence merely.

3. In ordinary circumstances, a vessel discharges her duty to another by a faithful and literal observance of the Rules of
Navigation, and she cannot be held at fault for so doing even though a different course would have prevented the
collision BUT this rule is not to be applied where it is apparent, as in the instant case, that her captain was guilty of
negligence or of a want of seamanship in not perceiving the necessity for, or in so acting as to create such necessity for,
a departure from the rule and acting accordingly.

4. "Don Juan" having sighted the "Tacloban City" when it was still a long way off was negligent in failing to take early
preventive action and in allowing the 2 vessels to come to such close quarters as to render the collision inevitable when
there was no necessity for passing so near to the "Tacloban City" as to create that hazard or inevitability, for the "Don
Juan" could choose its own distance AND it is noteworthy that the "Tacloban City," upon turning hard to port shortly
before the moment of collision, signaled its intention to do so by giving two (2) short blasts with horn while the "Don
Juan " gave no answering horn blast to signal its own intention and proceeded to turn hard to starboard.
5. We conclude that Capt. Santisteban and Negros Navigation are properly held liable for gross negligence in connection
with the collision of the "Don Juan" and "Tacloban City" and the sinking of the "Don Juan" leading to the death of
hundreds of passengers and we find no necessity for passing upon the degree of negligence or culpability properly
attributable to PNOC and PNOC Shipping or the master of the "Tacloban City," since they were never impleaded here.
#LUALHATIMARQUEZ

























Aboitiz Shipping vs General Accident Fire and Life Insurance Corp
Keyword: sinking ship, varying decisions of the TC and CA

Facts:
Aboitiz Shipping is the owner and operator of M/V P. Aboitiz. The vessel sank while on a voyage from Hongkong to the
Philippines. Several suits for recovery of the lost cargo either by the shippers, their successors-in-interest, or the cargo
insurers like General Accident (GAFLAC) were filed. The Board of Marine Inquiry (BMI), on its initial investigation found
that such sinking was due to force majeure and that subject vessel, at the time of the sinking was seaworthy. The trial
court ruled against the carrier on the ground that the loss did not occur as a result of force majeure. This was affirmed
by the CA and ordered the immediate execution of the full judgment award. However, other cases have resulted in the
finding that vessel was seaworthy at the time of the sinking, and that such sinking was due to force majeure. Due to
these different rulings, Aboitiz seeks a pronouncement as to the applicability of the doctrine of limited liability on the
totality of the claims vis a vis the losses brought about by the sinking of the vessel M/V P. ABOITIZ, as based on the real
and hypothecary nature of maritime law. Aboitiz argued that the Limited Liability Rule warrants immediate stay of
execution of judgment to prevent impairment of other creditors' shares.

Issue: Whether the Limited Liability Rule arising out of the real and hypothecary nature of maritime law should apply in
this and related cases.

Petitioners Contention:
1. The Limited Liability Rule warrants immediate stay of execution of judgment to prevent impairment of other creditors'
shares;
2. The finding of unseaworthiness of a vessel is not necessarily attributable to the shipowner; and
3 The principle of "Law of the Case" is not applicable to the present petition.

Respondents Contention:
1. There is no limited liability to speak of or applicable real and hypothecary rule under Article 587, 590, and 837 of the
Code of Commerce in the face of the facts found by the lower court (Civil Case No. 144425), upheld by the Appellate
Court (CA G.R. No. 10609), and affirmed in toto by the Supreme Court in G.R. No. 89757 which cited G.R. No. 88159 as
the Law of the Case; and
2. Under the doctrine of the Law of the Case, cases involving the same incident, parties similarly situated and the same
issues litigated should be decided in conformity therewith following the maxim stare decisis et non quieta movere.

Ruling:
Trial Court and CA: The rulings vary which prompted petitioner to file the present action.


Supreme Court:
The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses
related to maritime contracts is confined to the vessel, which is hypothecated for such obligations or which stands as the
guaranty for their settlement. It has its origin by reason of the conditions and risks attending maritime trade in its
earliest years when such trade was replete with innumerable and unknown hazards since vessels had to go through
largely uncharted waters to ply their trade. It was designed to offset such adverse conditions and to encourage people
and entities to venture into maritime commerce despite the risks and the prohibitive cost of shipbuilding.
Thus, the liability of the vessel owner and agent arising from the operation of such vessel were confined to the vessel
itself, its equipment, freight, and insurance, if any, which limitation served to induce capitalists into effectively wagering
their resources against the consideration of the large profits attainable in the trade. The Limited Liability Rule in the
Philippines is taken up in Book III of the Code of Commerce, particularly in Articles 587,590, and 837, hereunder quoted
in toto :

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

Art. 590. The co-owners of a vessel shall be civilly liable in the proportion of their interests in the common fund for the
results of the acts of the captain referred to in Art. 587. Each co-owner may exempt himself from this liability by the
abandonment, before a notary, of the part of the vessel belonging to him.

Art. 837. The civil liability incurred by shipowners in the case prescribed in this section (on collisions), shall be
understood as limited to the value of the vessel with all its appurtenances and freightage served during the voyage.
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 the instant case, there is, therefore, a need to collate all claims preparatory to their satisfaction from the insurance
proceeds on the vessel M/V P. Aboitiz and its pending freightage at the time of its loss. No claimant can be given
precedence over the others by the simple expedience of having filed or completed its action earlier than the rest. Thus,
execution of judgment in earlier completed cases, even those already final and executory, must be stayed pending
completion of all cases occasioned by the subject sinking. Then and only then can all such claims be simultaneously
settled, either completely or pro-rata should the insurance proceeds and freightage be not enough to satisfy all claims.
The petition was granted. #LUZADIO


The Philippine American General Insurance Company v. Court of Appeals- SEE NTBK
































ERLANGER & GALINGER vs. THE SWEDISH EAST ASIATIC CO.
DOCTRINE: Three elements are necessary to 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.

FACTS:
May 7, 1913: Steamship NIPPON loaded with copra and other general merchandise sailed from Manila to Singapore.
May 8, 1914 :4:30PM: It went aground Scarborough Reef.
May 9, 1913: Chief officer Weston and 9 other members of crew left NIPPON.
May 12, 1913 :
- Morning: They reached Santa Cruz, Zambales and Weston sent a telegram to Helm, Director of Bureau of
Navigation, Manila stating that NIPPON was stranded on Scarborough Reef and wants immediate assistance for
saving crew.
- 1:30PM: Government of the Phil Islands orderd coast guard cutter MINDORO with life-saving appliances to the
scene of the wreck.
- 3:00PM: Steamship MANCHURIA sailed from Manila to Hongkong was requested to pass by Scarborough Reef.

May 13, 1912: MANCHURIA arrived before MINDORO and took on board the captain and remainder of crew.
MANCHURIA was still near Scarborough Reef when MINDORO arrived. Captain of MANCHURIA informed captain of
MINDORO that the crew and captain were on board and proceeding to Hongkong. Captain of MINDORO offered
assistance but MANCHURIA declined. MINDORO proceeded to NIPPON and removed balance of baggage found on deck.
MINDORO proceeded to Santa Cruz, Zambales, took Weston and 9 crew members on board and brought to Manila.
Captain Dixon of MANCHURIA sent a message that all were rescued from NIPPON and that it was stranded on
the extreme north end of shoal. It also stated that the streamer was full of water fore and fat and is badly ashore and it
was abandoned. Captain of NIPPON saw said message before it was sent. The crew boarding MANCHURIA took with
them the chronometer, ships register, ships articles, ships logs and much of crews baggage amounting to P 156,
231.73.

May 14, 1913: Erlanger & Galinger applied to Director of Navigation for a charter of a coast guard cutter for the purpose
of proceeding to the stranded steamer NIPPON. The coast guard cutter MINDORO was chartered to Erlanger & Galinger.

May 17, 1913: Erlanger & Galinger took possession of NIPPON and continued in possession until about July 1 when the
last cargo was shipped to Manila. NIPPON was floated and towed to Olongapo and temporary repairs were made. It was
then brought to Manila.

The ship was valued at P 250, 000.00. Erlanger & Galingers claim was settled for P 145, 800.00. they filed this action
against the insurance companies who represented the cargo salved from NIPPON, to have the amount of salvage they
were entitled, determined.
THE RESPONDENTS: The Oelwerke Teutonia is a corporation as claimant of copra.
New Zealand Insurance Company as insurer and assignee of ownders of 33 crates of agar-agar.
Tokio Marine Insurance Company as insurer and assigne of 1, 000 cases of bean oil and 2 cases of bamboo lacquer work.
The Thames and Mersey Marine Insurance Company as a reinsurer to the extent of P6,500 on the cargo of copra

PETITIONERS CONTENTION: They are entitled to a reimbursement of their expenses, out of the gross value of the
salved property. They also contended that the cargo and vessel are equally chargeable with the expense of the salvage.
They also claim that that the NIPPON was a derelict or quasi-derelict.

RESPONDENTS CONTENTION: They contended that Erlanger & Galinger were not salvors of the copra and that the
latter were not entitled to recover one-half of the proceeds of copra. They also contended that the captain and the crew
did not leave the ship sine animo revertendi, but that it was their intention to go to Hongkong and procure assistance
with which to save the ship and her cargo.

ISSUE:
1. Whether or not the ship was abandoned.
2. Whether or not the salvage was conducted with skill, diligence and efficiency.

RULING:
Honorable A. S. Crossfield: The court found that the plaintiffs were "entitled to recover one-half of the net proceeds
from the property salved and sold (which has nothing to do with the steamship itself), and one-half the value of the
property delivered to the claimants."

Supreme Court:
The question whether or not a particular ship and her cargo is a fit object of salvage depends upon her condition at the
time the salvage services are performed.
Three elements are necessary to 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.

The ship was abandoned.
At the time the plaintiff commenced the attempt to salve what was possible of the S. S. Nippon and cargo, it was
justified, from all the conditions existing, in believing that it had been abandoned and in taking possession, even though
the master of the vessel intended when he left it, to return and attempt salvage. Captain Dixon also sent telegrams
stating that NIPPON was stranded.
The evidence also 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. The argument of the defendant-appellant to the effect that the ship was in
no danger is a bit out of place in view of the statement of the captain that she would sink with the first gale, coupled
with the fact that a typhoon was the cause of her stranding.
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. It does
not appear from the evidence that anyone then or subsequently suggested or found any other course which might have
been pursued and which would have brought better results.
The plaintiffs commenced the actual work of salving the ship and cargo on May 18, 1913. The last of the cargo was a
brought to Manila the latter part of June. The last of the dry copra was brought to Manila on June 5. The estimates of
the experts with regard to the time necessary to remove the cargo ranged from eight to twenty days. The greater
portion of the cargo was brought in by the plaintiffs within fifteen days. The delay after June 5 was due to the difficulty
in inducing laborers to work with wet copra. This difficulty would have arisen with any set of salvors and cannot be
attributed to a lack of care or diligence on the part of the plaintiffs.#MAGALIT
















Honorio Barrios vs. Carlos A. Go Thong
KEYWORD: Salvage vs Towage

DOCTRINE: When the ship stranded is not in a perilous condition, the services rendered by another ship in attaching it in
tow is merely towage and not salvage.
PONENTE: Barrera, J.

FACTS:
Honorio Barrios, the captain of MV Henry I of William Lines Incorporated, received an SOS signal by blinkers from the
MV Don Alfredo, owned and operated by Carlos A. Go Thong & Company, causing the former to alter its course to
render aid. MV Don Alfredo was found to be in trouble due to engine failure and the loss of a propeller. With the
consent of Captain Loresto of the distressed vessel, the plaintiff tied MV Don Alfredo to MV Henry I and had it in tow
towards the direction of Dumaguete City. The next morning they came across MV Lux, a sister ship of MV Don Alfredo.
And Upon the request of Captain Lorseto, the tow lines were released.

ISSUE: Whether the services rendered by the petitioner to the respondent constituted salvage or towage.

PETITIONERS CONTNETION: claims salvage of the distressed ship amounting to P100,000

RESPONDENTS CONTENTION: the petitioner cannot claim separate compensation from that they own from the
shipping company

COURT OF FIRST INSTANCE
Dismissed. The MV Don Alfredo was not in a perilous condition, therefore cannot be considered quasi-derelict and the
Salvage Law (Act 2616) is not applicable.

SUPREME COURT
The Court ruled that the service was towage.
Section 1 of the Salvage Law (Act 2616) provides: When in case of shipwreck, the vessel or its cargo shall be beyond the
control of the crew, or shall have been abandoned by them, and picked up and conveyed to a safe place by other
persons, the latter shall be entitled to reward for the salvage.

Salvage, has been defined as the compensation allowed to persons by whose assistance a ship or her cargo has been
saved, in whole or in part, from impending peril on the sea, or in recovering such property from actual loss, as in case of
shipwreck,derelict, or recapture. It has three elements, namely: (1) a marine peril; (2) service voluntarily rendered when
not required as an existing duty or from a special contract; and (3) success in whole or in part, or that the service
rendered contributed to such success. The court opined that there was no sea peril to begin with to warrant the claim
for salvage. Although it is true that the ship was in a helpless condition due to engine failure, there was no peril. The
weather was fair and clear, the waves were small, there was no risk in floundering, and in case the ship were to drift, the
anchor could easily be lowered. The crew did not even find it necessary to lower the motor boats and evacuate its
passengers, neither was there a necessity to jettison the cargo for safety measures. The vessel was crew were only
prevented from moving the vessel, such case did not make the vessel a quasi-derelict.
Instead, what constituted was a towage. By the consent of the respondent from the petitioners offer to tow the vessel,
they impliedly entered into a juridical relationship of towage.

***the material distinction between TOWAGE and SALVAGE is that a reward ought to sometimes be given to the crew of
the salvage vessel and other participants in the salvage service; no such reward is given in case of towage. In towage, the
master and crew are not entitled to remuneration pursuant to the contract of towage.#MANALANG
















ELSER, INC., vs. COURT OF APPEALS
KEYWORD: COGSA

DOCTRINE: A carrier cannot limit its liability in a manner contrary to what is provided for in the COGSA.

SHORT FACTS:
In December 1945 the goods specified in the Bill of Lading, were shipped on the 'S.S. Sea Hydra,' of Isthmian Steamship
Company, from New York to Manila, and were received by the consignee 'Udharam Bazar and Co.', except one case of
vanishing cream valued at P159.78. The goods were insured against damage or loss by the 'Atlantic Mutual Insurance
Co.'; `Udharam Bazar and Co.' Inc., who denied having received the goods for custody; and the 'International Harvester
Co. of the Philippines,' as agent for the shipping company, who answer that the goods were landed and delivered to the
Customs authorities. Finally, 'Udaharam Bazar and Co.' claimed for indemnity of the loss from the insurer, 'Atlantic
Mutual Insurance Co.', and was paid by the latter's agent 'E. E. Elser Inc.' the amount involved, that is, P159.78.

PETITIONERS CONTENTION: Petitioners contend that the finding of the appellate court is erroneous in the light of the
provisions of the Carriage of Goods by Sea Act of 1936, which apply to this case, the same having been made an integral
part of the covenants agreed upon in the bill of lading.

ISSUE: Whether clause 18 of the bill of lading shall prevail over the provisions in the Carriage of Goods by Sea Act.

COURT OF APPEALS: the Court of Appeals held that petitioners have already lost their right to press their claim against
respondent because of their failure to serve notice thereof upon the carrier within 30 days after receipt of the notice of
loss or damage as required by clause 18 of the bill of lading

SUPREME COURT: That clause 18 must of necessity yields to the provisions of the Carriage of Goods by Sea Act in view
of the proviso contained in the same Act which says: "any clause, covenant, or agreement in a contract of carriage
relieving the carrier or the ship from liability for loss or damage to or in connection with the goods . . . or lessening such
liability otherwise than as provided in this Act, shall be null and void and of no effect." (section 3.) This means that a
carrier cannot limit its liability in a manner contrary to what is provided for in said act and so clause 18 of the bill of
lading must of necessity be null and void.
















Dole v Maritime Company of the Phil
Keywords: Cogsa's one year prescriptive period for claims
Ponente: Narvasa, J

Facts:
Subject matter of action against Maritime: loss and/or damage to a shipment of machine parts

The cargo subject of the instant case was discharged in Dadiangas unto the custody of the consignee on
December 18, 1971
The corresponding claim for the damages sustained by the cargo was filed by the plaintiff with the defendant
vessel on May 4, 1972;
On June 11, 1973 the plaintiff filed a complaint in the Court of First Instance of Manila having three causes of
action, the third one is the claim for loss and/damage upon the said cargo shipment

The complaints for two causes of action were dismissed but the third cause of action was dismissed without prejudiced,
hence the petitioner filed again a complaint on January 6, 1975.

Issue
whether or not Article 1155 of the Civil Code providing that the prescription of actions is interrupted by the making of an
extrajudicial written demand by the creditor is applicable to actions brought under the Carriage of Goods by Sea Act

Petitioner's contention:
It concedes that its action is subject to the one-year period of limitation prescribe. Dole's contention that the
prescriptive period "*** remained tolled as of May 4, 1972 and that in legal contemplation the case (Civil Case No.
96353) was filed on January 6, 1975 , well within the one-year prescriptive period in Sec. 3(6) of the Carriage of Goods by
Sea Actand because Dole's claim for loss or damage made on May 4, 1972 amounted to a written extrajudicial demand
which would toll or interrupt prescription under Article 1155, it operated to toll prescription also in actions under the
Carriage of Goods by Sea Act.

Defendant's contention: Prescribed action

Ruling
Court rejected the contention that an extrajudicial demand toiled the prescriptive period provided for in the Carriage of
Goods by Sea Act. Similarly, we now hold that in such a case the general provisions of the new Civil Code (Art. 1155)
cannot be made to apply, as such application would have the effect of extending the one-year period of prescription
fixed in the law. It is desirable that matters affecting transportation of goods by sea be decided in as short a time as
possible; the application of the provisions of Article 1155 of the new Civil Code would unnecessarily extend the period
and permit delays in the settlement of questions affecting transportation, contrary to the clear intent and purpose of
the law. It is clearly fallacious and merits no consideration. #MARIANO
















SEA-LAND SERVICE, INC., vs. INTERMEDIATE APPELLATE COURT and PAULINO CUE, doing business under the name
and style of "SEN HIAP HING"
KEYWORD: no value declared; stolen

DOCTRINE: Even if Section 4(5) of COGSA did not exist, the validity and binding effect of the liability limitation clause in
the bill of lading here are fully sustainable on the basis alone of Article 1749 and 1750 of the Civil Code. That said
stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to liability
only if a greater value is not declared for the shipment in the bill of lading. To hold otherwise would amount to
questioning the justice and fairness of that law itself.

FACTS:
Sea-Land Service, Inc., a foreign shipping and forwarding company licensed to do business in the Philippines, received
from Seaborne Trading Company in Oakland, California a shipment consigned to Sen Hiap Hing the business name used
by Paulino Cue. The shipper not having declared the value of the shipment, no value was indicated in the bill of lading.
The bill described the shipment only as "8 CTNS on 2 SKIDS-FILES." The shipment arrived in Manila, and while awaiting
transshipment to Cebu,the cargo was stolen by pilferers and has never been recovered.

Paulino Cue, the consignee, made formal claim upon Sea-Land for the value of the lost shipment allegedly amounting to
P179,643.48. 5 Sea-Land offered to settle for US$4,000.00, or its then Philippine peso equivalent of P30,600.00.
asserting that said amount represented its maximum liability for the loss of the shipment under the package limitation
clause in the covering bill of lading. Cue rejected the offer and thereafter brought suit for damages against Sea-Land in
the then Court of First Instance of Cebu, Branch X.

ISSUE: Whether or not the consignee of seaborne freight is bound by stipulations in the covering bill of lading limiting to
a fixed amount the liability of the carrier for loss or damage to the cargo where its value is not declared in the bill.

RULING:
YES. Since the liability of a common carrier for loss of or damage to goods transported by it under a contract of carriage
is governed by the laws of the country of destination and the goods in question were shipped from the United States to
the Philippines, the liability of Sea-Land has Cue is governed primarily by the Civil Code, and as ordained by the said
Code, supplementary, in all matters not cluttered thereby, by the Code of Commerce and special laws. One of these
supplementary special laws is the Carriage of goods by Sea Act (COGSA), made applicable to all contracts for the carriage
by sea to and from the Philippines Ports in Foreign Trade by Commonwealth Act. 65.

Even if Section 4(5) of COGSA did not exist, the validity and binding effect of the liability limitation clause in the bill of
lading here are fully sustainable on the basis alone of Article 1749 and 1750 of the Civil Code. That said stipulation is just
and reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to liability only if a greater
value is not declared for the shipment in the bill of lading. To hold otherwise would amount to questioning the justice
and fairness of that law itself, and this the private respondent does not pretend to do.
But over and above that consideration, the lust and reasonable character of such stipulation is implicit in it giving the
shipper or owner the option of avoiding acrrual of liability limitation by the simple and surely far from onerous
expedient of declaring the nature and value of the shipment in the bill of lading.

The stipulation in the bill of lading limiting the liability of Sea-Land for loss or damages to the shipment covered by
Section 4(5) of COGSA to US$500 per package unless the shipper declares the value of the shipment and pays additional
charges is valid and binding on Cue. #MEDINA
















Maritime Agencies and Services, Inc. vs CA
KEYWORD: Urea; Prescription period for filing claim

DOCTRINE:
In any event, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is
brought within one year after delivery of the goods or the date when the goods should have been delivered; Provided,
that if a notice of loss for damage; either apparent or concealed, is not given as provided for in this section, that fact
shall not effect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the
date when the goods should have been delivered.

FACTS:
Transcontinental Fertilizer Company of London chartered from Hongkong Island Shipping Company of Hongkong the
motor vessel named "Hongkong Island" for the shipment of 8073.35 MT (gross) bagged urea from Novorossisk, Odessa,
USSR to the Philippines, the parties signing for this purpose a Uniform General Charter. Of the total shipment, 5,400.04
MT was for the account of Atlas Fertilizer Company as consignee, 3,400.04 to be discharged in Manila and the remaining
2,000 MT in Cebu. The goods were insured by the consignee with the Union Insurance Society of Canton, Ltd. for
P6,779,214.00 against all risks. Maritime Agencies & Services, Inc. was appointed as the charterer's agent and
Macondray Company, Inc. as the owner's agent. The vessel arrived in Manila on October 3, 1979, and unloaded part of
the consignee's goods, then proceeded to Cebu on October 19, 1979, to discharge the rest of the cargo. 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 of P113,123.86 pursuant to the insurance contract. As subrogee of the consignee, Union then filed on
September 19, 1980, 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. The trial court
rendered judgment holding the defendants liable. The CA modified said decision.

ISSUE: Whether or not the period for filing the claim had already prescribed.

RULING:
SC We do agree that the period for filing the claim is one year, in accordance with the Carriage of Goods by Sea Act.
This was adopted and embodied by our legislature in Com. Act No. 65 which, as a special law, prevails over the general
provisions of the Civil Code on prescription of actions. Section 3(6) of that Act provides as follows:
In any event, the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is
brought within one year after delivery of the goods or the date when the goods should have been delivered; Provided,
that if a notice of loss for damage; either apparent or concealed, is not given as provided for in this section, that fact
shall not effect or prejudice the right of the shipper to bring suit within one year after the delivery of the goods or the
date when the goods should have been delivered.

The one-year period in the cases at bar should commence on October 20, 1979, when the last item was delivered to the
consignee. 18 Union's complaint was filed against Hongkong on September 19, 1980, but tardily against Macondray on
April 20, 1981. The consequence is that the action is considered prescribed as far as Macondray is concerned but not
against its principal, which is what matters anyway. #NERI
















Mayer Steel Pipe Corporation vs. Court of Appeals

Doctine: Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship shall be discharged from all
liability for loss or damage to the goods if no suit is filed within one year after delivery of the goods or the date when
they should have been delivered. Under this provision, only the carriers liability is extinguished if no suit is brought
within one year. But the liability of the insurer is not extinguished because the insurers liability is based not on the
contract of carriage but on the contract of insurance. A close reading of the law reveals that the Carriage of Goods by
Sea Act governs the relationship between the carrier on the one hand and the shipper, the consignee and or insurer on
the other hand. It defines the obligations of the carrier under the contract of carriage. It does not, however, affect the
relationship between the shipper and the insurer. The latter case is governed by the Insurance Code.

Facts:
In 1983, petitioner Hong Kong Government Supplies Department (Hongkong) contracted petitioner Mayer Steel Pipe
Corporation (Mayer) to manufacture and supply various steel pipes and fittings. From August to October 1983, Mayer
shipped the pipes and fittings to Hongkong.
Prior to the shipping, petitioner Mayer insured pipes and fittings against all risks with private respondents South Sea
Surety and Insurance Co. Inc. (South Sea) and Charter Insurance Corp. (Charter).
Petitioners Mayer and Hongkong jointly appointed Industrial Inspection (International) Inc. as third-party inspector to
examine whether the pipes and fittings are manufactured in accordance with the specifications in the contract.
Industrial Inspection certified all the pipes and fittings to be in good order condition before they were loaded in the
vessel. Nonetheless, when the goods reached Hongkong, it was discovered that a substantial portion thereof was
damaged.

Issue: Whether or not Section 3 (6) of COGSA will apply in the case at bar

Respondents claim: Private respondents averred that they have no obligation to pay the amount claimed by petitioners
because the damage to the goods is due to the factory defects which are not covered by the insurance policies.

Trial Court: Damage to the goods is not due to the manufacturing defects. Insurance contracts executed by petitioner
Mayer and private respondents are all-risks policies which insure against all causes of conceivable loss or damage.

CA: Affirmed TCs ruling. However, it set aside the decision of the trial court and dismissed the complaint on the ground
of prescription. It held that the action is barred under Sec. 3 (6) of the COGSA since it was filed only on April 17, 1986,
more than two years from the time the goods were unloaded from the vessel. Sec. 3 (6) of the COGSA provides that the
carrier and the ship will be discharged from all liability in respect of loss or damage unless suit is brought within one year
after delivery of the goods or the date when the goods should have been delivered. Respondent court ruled that this
provision applies not only to the carrier but also to the insurer, citing Filipino Merchants Insurance Co. V. Alejandro.

SC: Under Sec 3 (6) of COGSA, only the carriers liability is extinguished if no suit is brought within one year. But the
liability of the insurer is not extinguished because the insurers liability is based not on the contract of carriage but on
the contract of insurance. COGSA governs the relationship between the carrier on the one hand and the shipper, the
consignee and/or the insurer on the other hand. It defines the obligations of the carrier under the contract of carriage. It
does not, however, affect the relationship between the shipper and the insurer. The latter case is governed by the
Insurance Code.
The Filipino Merchants case is different from the case at bar. In Filipino Merchants, it was the insurer which filed a claim
against the carrier for reimbursement of the amount it paid to the shipper. In the case at bar, it was the shipper which
filed a claim against the insurer. The basis of the shippers claim is the all-risks insurance policies issued by the private
respondents to petitioner Mayer.
When the Court said in Filipino Merchants that Section 3 (6) of the COGSA applied to the insurer, it meant that the
insurer, like the shipper, may no longer file a claim against the carrier beyond the one year period provided in the law.
#PASCUA
































LUZON STEVEDORING vs. THE PUBLIC SERVICE COMMISSION
KEYWORD: considered as a public carrier

DOCTRINE:
Section 13 (b) of the Public Service Law (Commonwealth Act No. 146) defines public service thus: "The term 'public
service' includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or
compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general
business purposes any common carrier, railroad, street railway, traction railway, subway, motor vehicle, either for
freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or carrier service
of any class, express service, steamboat, or steamship line, pontines, ferries, and small water craft

FACTS:
Petitioners are engaged in the stevedoring or lighterage and harbor towage business. They are also engaged in
interisland service which consist of hauling cargoes such as sugar, oil, fertilizer and other commercial commodities.
There is no fixed route in the transportation of these cargoes, the same being left at the indication of the owner or
shipper of the goods. Petitioners, in their hauling business, serve only a limited portion of the public. During the period
from January, 1949 and up to the present, respondent Luzon Stevedoring Co. Inc., has been rendering to PRATRA
regularly and on many occasions such service by carrying fertilizer from Manila to various points in the provinces, and on
the return trip sugar was loaded from said provinces to Manila. For these services, respondent Luzon Stevedoring
Company, Inc., charged PRATRA at the rate of P0.60 per picul or bag of sugar and, according to Mr. Mauricio Rodriguez,
chief of the division in charge of sugar and fertilizer of the PRATRA, for the transportation of fertilizer, this respondent
charged P12 per metric ton.

The Philippine Shipowners Association complained to the Public Service Commission that petitioners were engaged in
the transportation of cargo in the Philippines for hire or compensation without authority or approval of the Commission.
The rates petitioners charged resulted in ruinous competition. The Public Service Commission restrained petitioners
from further operating their watercraft to transport goods for hire or compensation between points in the Philippines
until the commission approves the rates they propose to charge.

ISSUE: Whether or not the petitioners fall under the definition in Section 13 (b) of the Public Service Law

PETITIONERS CONTENTION: Luzon Stevedoring asserts that it is a private carrier and not a public carrier. Being so, it is
not subject to CA 146 which regulates common carriers.

RESPONDENTS CONTENTION: It was upon these findings that the Commission made the order now sought to be
reviewed, upon complaint of the Philippine Shipowners' Association charging that the then respondents were engaged
in the transportation of cargo in the Philippines for hire or compensation without authority or approval of the
Commission, having adopted, filed and collected freight charges at the rate of P0.60 per bag or picul, particularly sugar,
loaded and transported in their lighters and towed by their tugboats between different points in the Province of Negros
Occidental and Manila, which said rates resulted in ruinous competition with complainant.
RULING: Upon the foregoing considerations, the appealed order of the Public Service Commission is affirmed, with costs
against the petitioners. It is not necessary, under this definition, that one holds himself out as serving or willing to serve
the public in order to be considered public service.

In that case, the Luzon Brokerage Company, a customs broker, had been receiving, depositing and delivering goods
discharged from ships at the pier to its customers. As here, the Luzon Brokerage was then rendering transportation
service for compensation to a limited clientele, not to the public at large.

In the United States where, it is said, there is no fixed definition of what constitutes public service or public utility, it is
also held that it is not always necessary, in order to be a public service, that an organization be dedicated to public use,
i.e., ready and willing to serve the public as a class. It is only necessary that it must in some way be impressed with a
public interest; and whether the operation of a given business is a public utility depends upon whether or not the service
rendered by it is of a public character and of public consequence and concern. (51 C. J. 5.) Thus, a business may be
affected with public interest and regulated for public good although not under any duty to serve the public. (43 Am. Jur.,
572.)

It has been already shown that the petitioners' lighters and tugboats were not leased, but used to carry goods for
compensation at a fixed rate for a fixed weight. At the very least, they were hired, hired in the sense that the shippers
did not have direction, control, and maintenance thereof, which is a characteristic feature of lease. Commonwealth Act
No. 146 declares in unequivocal language that an enterprise of any of the kinds therein enumerated is a public service if
conducted for hire or compensation even if the operator deals only with a portion of the public or limited clientele.
#QUINTOS
















Epitancio San Pablo vs. Pantranco South Express Inc
Keyword: black double

Doctrine: Ferry implies the crossing of open seas, thus the service is not merely a ferry service but is actually a coastwise
shipping which requires the application of separate CPC.

Facts: PANTRANCO is engaged in the land transportation business with PUB service for passengers and freight and
various certificates for public conveniences CPC to operate passenger buses from Metro Manila to Bicol Region and
Eastern Samar. PANTRANCO twrote to Maritime Industry Authority (MARINA) requesting authority to lease/purchase a
vessel named M/V "Black Double" "to be used for its project to operate a ferryboat service from Matnog, Sorsogon and
Allen, Samar that will provide service to company buses and freight trucks that have to cross San Bernardo Strait.
Despite the refusal or the Marina to give due course to the request, Pantranco nevertheless acquired the MV Double . It
wrote the Chairman of the Board of Transportation (BOT) that it proposes to operate a ferry service to carry its
passenger buses and freight trucks between Allen and Matnog in connection with its trips to Tacloban City.Without
awaiting action on its request PANTRANCO started to operate said ferry service. Acting Chairman Jose C. Campos, Jr. of
BOT ordered PANTRANCO not to operate its vessel until the application for hearing. BOT rendered its decision holding
that the ferry boat service is part of its CPC to operate from Pasay to Samar/Leyte by amending PANTRANCO's CPC.
Epitacio San Pablo and Cardinal Shipping Corporation who are franchise holders of the ferry service in this area
interposed their opposition.

RC: It claims that it can operate a ferry service in connection with its franchise for bus operation in the highway from
Pasay City to Tacloban City "for the purpose of continuing the highway, which is interrupted by a small body of water,
the said proposed ferry operation is merely a necessary and incidental service to its main service and obligation of
transporting its passengers from Pasay City to Tacloban City. Such being the case, there is no need to obtain a separate
certificate for public convenience to operate a ferry service between Allen and Matnog to cater exclusively to its
passenger buses and freight trucks.

PC: They claim they adequately service the PANTRANCO by ferrying its buses, trucks and passengers.

Issue: Whether or not Pantranco is authorized to operate a ferry service or coastwise or interisland shipping service
along its authorized route as an incident to its franchise without the need of filing a separate application for the sam

Ruling:
No. The term "ferry" implied the continuation by means of boats, barges, or rafts, of a highway or the connection of
highways located on the opposite banks of a stream or other body of water. The term necessarily implies transportation
for a short distance, almost invariably between two points, which is unrelated to other transportation while steamboat
or motorboat service is between the different islands, involving more or less great distance and over more or less
turbulent and dangerous waters of the open sea, to be coastwise or inter-island service. The conveyance of passengers,
trucks and cargo from Matnog to Allen is certainly not a ferry boat service but a coastwise or interisland shipping
service. Under no circumstance can the sea between Matnog and Allen be considered a continuation of the highway.
While a ferry boat service has been considered as a continuation of the highway when crossing rivers or even lakes,
which are small body of waters - separating the land, however, when as in this case the two terminals, Matnog and Allen
are separated by an open sea it can not be considered as a continuation of the highway.
Respondent PANTRANCO should secure a separate CPC for the operation of an interisland or coastwise shipping service
in accordance with the provisions of law. Its CPC as a bus transportation cannot be merely amended to include this
water service under the guise that it is a mere private ferry service. #SANTOS, A.



































Mansanal vs Ausejo
Keyword: Holp-up incident thinking that driver has direct participation to the crime.

Doctrine:
The power of the Commission to suspend or revoke any certificate received under the provisions of the Act may only be
exercised whenever the holder thereof has violated or willfully and contumaciously refused to comply with any order,
rule or regulation of the Commission or any provision of the Act. In the absence of showing that there is willful and
contumacious violation on the part of petitioner, no certificate of public convenience may be validly revoked.

Facts:
Mr. Ausejo and Mr. Caballes, strolling along the seasided embankment of Dewey or Roxas Boulevard at about 6:00
o'clock in the morning of March 13, 1966 towards the direction of Pasay City. As they were in front of the L & S Building,
they noticed that the three (3) men alighted from a vehicle behind them. Immediately thereafter, these men accosted
and held-up both of them. Since the two offered some resistance, they attracted the attention of other promenaders as
well as the attention of about twelve passing motorists who stopped to watch the spectacle, Two of the hold-uppers
went after Mr. Caballes and the other one took care of Mr. Ausejo who fought back and succeeded in disarming the
hold-uppers of his knife. He then drew his pistol and tried to shoot him but it jammed. As the two other hold-uppers ran
towards his direction, presumably to assist their companion, they were warned that Mr. Ausejo had a gun and so they
stopped and rushed instead to a waiting taxi bearing Plate No. 6100.

Issue: Whether or not the certificate of public convenience issued should be cancelled for not rendering safe, adequate
and proper service by employing a driver with criminal tendencies, in violation of the Public Service Law

Held:
All that was proved during the investigation was the hold-up incident of March 13, 1966. But proof of the hold-up
incident is not proof of the charges under Section 19 (a) of the Public Service Law and Sec. 47 of the Revised Order No.
17. Most importantly, even the precise Identity of the taxicab boarded by the hold-uppers as they escaped had not been
established. The only testimony linking the taxicab of petitioner was that of the companion of private respondent Ausejo
that he saw the malefactors scamper away and seize a taxi whose plate number was "6100". With respect to the
description of the alleged taxi, he said that the taxi was red in the entire body while private respondent Ausejo said that
the taxi was red and it had parts painted blue. Both confirmed each other that the plate color was orange.

We find that petitioner has successfully refuted the alleged participation of her taxi.

Even on the assumption that it was petitioner's taxicab that was used by the escaping hold-uppers, there is no evidence
that the driver is a co-conspirator in the commission of the offense of robbery. Conspiracy must be proved by clear and
convincing evidence. The mere claim that the taxicab was there and probably waiting is not proof of conspiracy in this
case as it should be recalled that there were about twelve vehicles that stopped to view the spectacle. Further, it is
possible that the driver did not act voluntarily as no person in his right senses would defy the wishes of armed
passengers. Even on the assumption that the driver had participated voluntarily in the incident, his culpability should not
be made a ground for the cancellation of the certificate of petitioner.

While an employer may be subsidiarily liable for the employee's civil liability in a criminal action, subsidiary liability
presupposes that there was a criminal action. Besides, in order that an employer may be subsidiarily liable, it should be
shown that the employee committed the offense in the discharge of his duties. While it is true also that an employer
may be primarily liable under Article 2180 of the Civil Code for the acts or omissions of persons for whom one is
responsible, this liability extends only to damages caused by his employees acting within the scope of their assigned
tasks. Clearly, the act in question is totally alien to the business of petitioner as an operator and hence, the driver's illicit
act is not within the scope of the functions entrusted to him. Moreover, the action before respondent Commission is
neither a criminal prosecution nor an action for quasi-delict. Hence, there is absolutely no ground to hold petitioner
liable for the driver's act. #SANTOS, N.
















COGEO-CUBAO OPERATORS AND DRIVERS ASSOCIATION V. COURT OF APPEALS
KEYWORD: Jeepney, Certificate of Public Convenience

DOCTRINE: Under the Public Service Law, a certificate of public convenience is an authorization issued by the Public
Service Commission for the operation of public services from which no franchise is required by law. It is included in the
term "property" in the broad sense of term. It can be sold by the holder thereof because it has considerable market
value and is considered a valuable asset. And although it is considered a private property, it is affected with public
interest and must be submitted to the control of the government for the common good.

FACTS:
A Certificate of Public Convenience to operate a jeepney service was ordered to be issued im favor of the Lungsod
Silangan to ply the Cogeo-Cubao route sometime in 1983 on the justification that public necessity and convenience will
be served. On the other hand, the defendant Association was registered as non-stock, non-profit organization with the
SEC with the main purpose of representing the plaintiff-appellee for whatever contract and/or agreement it will have
regarding the ownership of units, and the like of the members of the Association. Plaintiffs however adopted a "Bandera
System" wherein a member of the cooperative id permitted to queue for passengers at the disputed pathway in
exchange for a ticket worth P20.00. The funds derived therefrom are alleged to be used for Christmas programs of the
drivers and other benefits.

On the strength of the defendant's registration as a collective body with the SEC, defendants, led by Romeo Oliva,
decided to form a human barricade and assumed the dispatching of passenger jeepneys, and thus gave rise to a suit for
damages.

The trial court ruled in favor of Lungsod Silangan, herein respondent. Upon appeal, the Court of Appeals affirmed lower
court's decision with modifications as to the damages awarded.

ISSUE: Whether the petitioner usurped the property right of the respondent. RULING:

RTC: RTC held that the petitioner usurped the property right of the respondent.

CA: CA Reversed RTCs decision citing that the petitioner has not made any usurpation with the property right of the
respondent.

SC: SC reversed CAs contention.
Yes. Insofar as the interest of the State is involved, a certificate of public convenience does not confer upon the holder
any proprietary right or interest or franchise in the route covered thereby and in the public highways. However, with
respect to other persons and other public utilities, a certificate of public convenience as property which represents the
right and authority to operate its facilities for public service, cannot be taken or interferred with without due process of
law. Appropriate actions may be maintained by the holder of the certificate against those who have not been authorized
to operate in competition with the former and those who invade the rights which the former has pursuant to the
authority granted by the Public Service Law.

It is clear from the facts that the petitioner formed a barricade and forcibly took over the motor units and personnel of
the respondent corporation. This paralyzed the usual activities and earnings of the latter during the period of 10days
and violated the rights of the respondent Lungsod Corp. to conduct its operations thru its authorized officers. Therefore,
the respondent is legally entitled for the award of damages pursuant to Arts. 21 and 2222 of the Civil Code. #SUBIJANO

Kilusang Mayo Uno (KMU) Labor Center vs. Hon. Jesus Garcia, Jr.- SEE NTBK

FRANCISCO S. TATAD vs. HON. JESUS B. GARCIA- SEE NTBK









































PAL v CAB
KEYWORDS: GrandAir, franchise

DOCTRINE: There is nothing in the law nor in the Constitution, which indicates that a legislative franchise is an
indispensable requirement for an entity to operate as a domestic air transport operator. Although Section 11 of Article
XII recognizes Congress' control over any franchise, certificate or authority to operate a public utility, it does not mean
Congress has exclusive authority to issue the same.

FACTS: Grand International Airways (GrandAir) applied for a Certificate of Public Convenience and Necessity (CPCN) with
the Civil Aeronautics Board (CAB). Petitioner, itself the holder of a legislative franchise to operate air transport services,
filed an Opposition to the application raising among other things the issue of lack of jurisdiction of the Board to hear the
application because GrandAir did not possess a legislative franchise. Chief Hearing Officer of CAB issued an Order
denying petitioner's Opposition. The Board promulgated Resolution No. 119(92) approving the issuance of a Temporary
Operating Permit (TOP) in favor of Grand Air for a period of three months. This was extended for a period of six (6)
months.

PETITIONERS CONTENTION: GrandAir does not possess a legislative franchise authorizing it to engage in air
transportation service within the Philippines or elsewhere. Such franchise is, allegedly, a requisite for the issuance of a
Certificate of Public Convenience or Necessity by the respondent Board, as mandated under Section 11, Article XII of the
Constitution. RESPONDENTS CONTENTION: Respondent GrandAir, on the other hand, posits that a legislative franchise
is no longer a requirement for the issuance of a Certificate of Public Convenience and Necessity or a Temporary
Operating Permit.

ISSUE: Does the CAB have the authority to issue a CPCN or TOP to a domestic air transport operator who does not
possess a legislative franchise (YES)

RULING:
Congress has granted certain administrative agencies the power to grant licenses for, or to authorize the operation of
certain public utilities. It is generally recognized that a franchise may be derived indirectly from the state through a duly
designated agency, and to this extent, the power to grant franchises has frequently been delegated, even to agencies
other than those of a legislative nature.

The Civil Aeronautics Board has the authority to issue a Certificate of Public Convenience and Necessity, or Temporary
Operating Permit to a domestic air transport operator, who, though not possessing a legislative franchise, meets all the
other requirements prescribed by the law. There is nothing in the law nor in the Constitution, which indicates that a
legislative franchise is an indispensable requirement for an entity to operate as a domestic air transport operator.
Although Section 11 of Article XII recognizes Congress' control over any franchise, certificate or authority to operate a
public utility, it does not mean Congress has exclusive authority to issue the same. Franchises issued by Congress are not
required before each and every public utility may operate. In many instances, Congress has seen it fit to delegate this
function to government agencies, specialized particularly in their respective areas of public service.
Congress, by giving the respondent Board the power to issue permits for the operation of domestic transport services,
has delegated to the said body the authority to determine the capability and competence of a prospective domestic air
transport operator to engage in such venture. This is not an instance of transforming the respondent Board into a mini-
legislative body, with unbridled authority to choose who should be given authority to operate domestic air transport
services.The respondent Civil Aeronautics Board is DIRECTED to CONTINUE hearing the application of respondent Grand
International Airways, Inc. for the issuance of a Certificate of Public Convenience and Necessity. #TENORIO