ADMIRALTY ASSIGNMENT: Section 14.

 Qualifications of Applicant for

Examination. – Every applicant for examination shall
establish the following requisites:
1. Qualifications of a Captain - Art. 609 (Code of Commerce) vis-
a-vis RA 8544
[a] He is a citizen of the Philippines
2. Arts. 610, 611 (Code of Commerce) -
a) US vs Yap Tian Jong, 34 Phil 10,
b) Joaquin Castro & Co. vs Maersk Line, 62 Phil 310 [b] He is of good moral character;
3. Art. 613, 614, 615, 617, 618
4. What is Loan on Bottomry? Loan on Respondentia
5. What is Barratry? - [c] He has met standards of medical fitness, particularly with
a) GR No. L-66935, US vs Bacho, 10 Phil 574, 576 good eyesight and hearing as certified by a Department of
b) Sontua & Co. vs Ossorio, GR No. 17690. June 14, 1922 Health [DOH] accredited medical institution conducting
c) Yueng Sheng Exchange vs Urrutia, GR No. 4566 Feb. 9, physical and medical examinations for seafarers
1909
d) US vs Steamship "Islas Filipinas," GR No. 8746. October
30, 1914
[d] In the case of Marine Deck/Engineer Officer, he must be a
e) Compagnie Franco-Indochinoise vs Deutch, GR No. graduate of Bachelor of Science in Maritime Transportation or
11169. March 31, 1917 Bachelor of Science in Marine Engineering in a school,
f) Robles vs Lizarraga Hermanos, GR No. 10152, Mar 29, academy, institute, college or university duly recognized by the
1917 Commission on Higher Education [CHED];
g) US vs Eduardo, GR No. 5097. February 10, 1910
h) Sulpicio Lines vs Sesante, GR No. 172682, July 27, 2016
[e] For an applicant taking the examination other than that for
the Marine Deck/Engineer Officer, he must have completed a
course approved by the appropriate government agency, as
defined in the rules and regulations implementing this Act.
QUALIFICAITONS OF A CAPTAIN - ART 609
CODE OF COMMERCE Section 15. Fraudulent Application. – The Board may
suspend or revoke any Certificate of Registration obtained
through misrepresentation made in the application for
examination.
Article 609. Captains and masters of vessels must be
Spaniards * having legal capacity to bind themselves in Section 16. Scope of Examination. – The subjects that
accordance with this Code, and must prove that they have the
shall be included in the examination for Marine Deck/Engineer
skill, capacity, and qualifications required to command and Officer shall include, among others, the following major
direct the vessel, as established by marine laws, ordinances, or
functions:
regulations, or by those of navigation, and that they are not
disqualified according to the same for the discharge of the
duties of that position. Legal Capacity (1) Navigation;

If the owner of a vessel desires to be the captain thereof and (2) Cargo Handling and Stowage;
does not have the legal qualifications therefor, he shall limit
himself to the financial administration of the vessel, and shall (3) Controlling the Operation of the Ship and Care for the
intrust her navigation to a person possessing the qualifications Persons On-Board;
required by said ordinances and regulations.
(4) Marine Engineering;
GR : agent has the right to choose the crew, but
captain can refuse. (5) Electrical, Electronic and Control Engineering;

Republic Act No. 8544             February 24, 1998 (6) Maintenance and Repair;

AN ACT REGULATING THE PRACTICE OF THE (7) Radio Communications at the following levels of
MERCHANT MARINE PROFESSION IN THE responsibility:
PHILIPPINES
(1) Management Level
Philippine Merchant Marine Officers Act of 1998
(2) Operation Level
ARTICLE V
EXAMINATION, REGISTRATION AND CERTIFICATE OF
The said subjects and their syllabi may be amended by the
COMPETENCY
Board so as to conform to technological changes brought
about by continuing trends in the profession.
Section 13. Examination Required. – All applicants for
registration for the practice of the Maritime Profession shall be
Section 17. Rating in the Board Examinations . – To be
required to undergo and pass a written technical examination
qualified as having passed the board examination for Marine
as provided for in this Act. When conditions and circumstances
Deck/Engineer Officer, a candidate must obtain a weighted
warrant, the Board may give walk-in examinations, subject to
general average of seventy percent [70%], with no grade
the approval of the Commission.
lower than sixty percent [60%] in any given subject. An
examinee who obtains a weighted general average rating of
seventy percent [70%] but obtains a rating below sixty
percent [60%] in any given subject must take the examination
in the subject or subjects where he obtained a grade below
sixty percent [60%].
Section 18. Report of Ratings. – The Board shall submit to
the Commission the ratings obtained by each candidate within
fifteen [15] days after the examination, unless extended for
just cause. Upon the release of the results of the examination,
the Board shall send by mail the rating received by each
examinee at his given address using the mailing envelope
submitted during the examination.
Section 19. Re-Examination. – An applicant who fails to
pass the examination for the third time shall be allowed to
take another examination only after the lapse of one year
Section 20. Oath. – All successful candidates in the
examination shall be required to take an oath of profession
before the Board or any government official authorized to
administer oaths, prior to entering upon the practice of the
Maritime Profession.
Section 21. Certificate of Registration and Certificate
of Competency. – A Certificate of Registration shall be issued
to applicants who pass the examination for Marine
Deck/Engineer Officer, subject to payment of registration fees.
The Certificate of Registration of a marine professional shall
bear the signature of the Chairman of the Board stamped with
the official seal and signature of the Chairman of the
Professional Regulation Commission indicating that the person
named therein is a registered Marine Deck/Engineer Officer.
A Certificate of Competency bearing the registration number,
date of issuance and expiry date duly signed by the Chairman
of the Board, shall likewise be issued to every registrant,
provided that the professional fees have been paid. No person
shall practice as Marine Deck/Engineer Officer in this country
unless such person shall have secured a Certificate of
Competency to practice as Marine Deck/Engineer Officer in the
manner herein provided. A holder of a Certificate of
Competency is entitled to practice the profession with all the
privileges appurtenant thereto until the expiration of the
validity of his Certificate of Competency.
Section 22. Indication of Certificate of Competency and
Professional Tax Receipt . – The Marine Deck/Engineer
Officer shall be required to indicate his Certificate of
Competency number, the duration of validity, including the
professional tax receipt number on the documents he signs,
uses or issues in connection with the practice of his profession.
Section 23. Refusal to Register. – The Board shall not
register any successful examinee who has been convicted by a
court of competent jurisdiction of any criminal offense
involving moral turpitude or has been found guilty of immoral
or dishonorable conduct after investigation by the Board, or
has been declared to be of unsound mind. The reason for
refusal shall be set forth in writing.
Section 24. Grounds for Suspension and Revocation of
Certificate of Registration and Certificate of
Competency, Cancellation of Special Dispensation . –
The Board shall have the power, upon due notice and hearing,
to revoke or suspend the Certificate of Competency of a
Marine Deck/Engineer Officer, or to cancel a Special
Dispensation for cause, which includes but shall not be limited
to: the use or perpetration of any fraud or deceit in obtaining
a Certificate of Registration, or for incompetence, negligence,
or for the illegal practice of a Marine Deck/Engineer Officer;
violation of the provisions of this Act, its implementing Rules
and Regulations and/or violations of Policies of the Board,
including the Code of Ethics for Marine Deck/Engineer Officers.
The action of the Board shall be final and executory without
prejudice to the right of the aggrieved party to appeal the
same within fifteen (15) days from written notice, to the
Commission.
Section 25. Reinstatement, Re-issuance or
Replacement of Certificate of Competency . – The Board
may, upon application and for reasons deemed proper and
sufficient, reinstate any revoked Certificate of Competency or
reissue any suspended Certificate of Competency, and in so
doing, may, in its discretion, exempt the applicant from taking
another examination
New Certificates of Competency to replace lost, destroyed or
mutilated ones may be issued subject to the rules as
implemented by the Board
Section 26. Renewal of Certificate of Competency . –
The Certificate of Competency shall be renewed upon
satisfying the requirements imposed by the Board, and
payment of the corresponding fees prescribed by the Board in
accordance with the schedule of fees fixed by the Commission.
ARTICLE VI
PRACTICE OF MARINE DECK AND ENGINEER OFFICER
Section 27. Practice of Merchant Marine Profession . –
No person shall practice or offer to practice the merchant
marine profession in the Philippines or offer himself as a
marine deck/engineer officer, or use the title, word, letter,
figure or any sign tending to convey the impression that he is
a marine deck/engineer officer, or advertise or indicate in any
manner whatsoever that he is qualified to perform the work of
a marine deck/engineer officer unless he has satisfactorily
passed the licensure examination given by the Board and is a
holder of a valid Certificate of Registration and Certificate of
Competency duly issued to him by the Board of Marine
Deck/Engineer Officers.
In compliance with the STCW '78 convention and its
amendments, the person holding senior merchant marine
licenses namely, the master, chief officer, chief engineer and
second engineers must be able to function under the
management level of responsibility while the officers-in-charge
of navigational and engineering watch must be able to
function under the operational level of responsibility
Section 28. Recognition of Certificates. – A foreigner
holding a Certificate of Competency issued by his national
administration in accordance with STCW '78 Convention, as
amended, requirements shall be issued special dispensation to
serve on board a Philippine registered vessel engaged in the
international trade: Provided, That the Philippine Certificate of
Competency issued and endorsed by the Board shall be
reciprocally recognized by the said foreign national
administration to allow the Filipino merchant marine to
practice his profession on board the foreigner's flag vessel.
Section 29. Quality Standards. – The Boards shall establish
a system of standards that shall be subject to external
management assessment or audit in accordance with the
STCW '78 Convention, as amended
Section 30. Funding Provision. – Such sums as may be
necessary to carry out the provisions of this Act shall be
included in the General Appropriations Act of the year
following its enactment into law and thereafter.
Section 31. Integration of Marine Deck/Engineer
Officers. – All marine deck/engineer officers shall be
integrated into one [1] national organization which shall be
recognized by the Board and by the Commission as the one
and only integrated and accredited association of Marine
Deck/Engineer Officers. A Marine Deck/Engineer Officer duly
registered with the Board shall automatically become a
member of the integrated and accredited association of Marine
Deck/Engineer Officers, and shall receive the benefits and
privileges appurtenant thereto upon payment of the required
fees and dues. Membership in the integrated and accredited
association shall not be a bar to membership in other
associations of marine deck/engineer officers
Section 32. Code of Ethics for Marine Deck/Engineer
Officers. – The Board shall adopt and approve the Code of
Ethics for Marine Deck/Engineer Officers prescribed by the
integrated and accredited national association of Marine
Deck/Engineer Officers.
ARTICLE 610, 611, CODE OF
COMMERCE
ARTICLE 610. The following powers are inherent in the
position of captain or master of a vessel:
1. To appoint or make contracts with the crew in the absence
of the agent and propose said crew, should said agent be
present; but the agent shall not be permitted to employ any
member against the captain's express refusal.
2. To command the crew and direct the vessel to the port of
its destination, in accordance with the instructions he may
have received from the agent.
3. To impose, in accordance with the agreements and the laws
and regulations of the merchants marine, on board the vessel,
correctional punishment upon those who do not comply with
his orders or who conduct themselves against discipline,
holding a preliminary investigation on the crimes committed on
board the vessel on the high seas, which shall be turned over
to the authorities, who are to take cognizance thereof, at the
first port touched.
4. To make contracts for the charter of the vessel in the
absence of the agent or of her consignee, acting in accordance
with the instructions received and protecting the interests of
the owner most carefully.
5. To adopt all the measures which may be necessary to keep
the vessel well supplied and equipped, purchasing for the
purpose all that may be necessary, provided there is no time
to request instructions of the agent.
6. To make, in similar urgent cases and on a voyage, the
repairs to the hull and engines of the vessel and to her rigging
and equipment which are absolutely necessary in order for her
to be able to continue and conclude her voyage; but if she
should arrive at a point where there is a consignee of the
vessel, he shall act in concurrence with the latter.
ARTICLE 611. In order to comply with the obligations
mentioned in the foregoing article, the captain, when he has
no funds and does not expect to receive any from the agent,
shall procure the same in the successive order stated below:
1. By requesting said funds of the consignees or
correspondents of a vessel.
2. By applying to the consignees of the cargo or to the persons
interested therein.
3. By drawing on the agent.
4. By borrowing the amount required by means of a bottomry
bond.
5. By selling a sufficient amount of the cargo to cover the
amount absolutely necessary to repair the vessel, and to equip
her to pursue the voyage.
In the two latter cases he must apply to the judicial authority
of the port, if in Spain  and to the Spanish  consul, if in a
foreign country; and where there should be none, to the local
authority, proceeding in accordance with the prescriptions of
Article 583, and with the provisions of the law of civil
procedure.
ARTICLE 613, 614, 615, 617, 618
ARTICLE 613. A captain who navigates for freight in common
or on shares can not make any transaction for his exclusive
account, and should he do so the profit shall belong to the
other persons in interest, and the losses shall be for his own
exclusive account.
ARTICLE 614. A captain who, having made an agreement to
make a voyage, should not fulfill his obligation, without being
prevented by an accident case or by force majeure, shall pay
for all the losses his action may cause, without prejudice to
criminal penalties which may be proper.
ARTICLE 615. Without the consent of the agent, the captain
can not have himself substituted by another person; and
should he do so, besides being liable for all the acts of the
substitute and bound to the indemnities mentioned in the
foregoing article, the substitute as well as the captain may be
discharged by the agent.
ARTICLE 616. If the provisions and fuel of the vessel are
consumed before arriving at the port of destination, the
captain shall decide, with the consent of the officers of the
same, to make the nearest port to get a supply of either; but if
there are persons on board who have provisions of their own
he may force them to turn said provisions over for the
common consumption of all persons on board, paying the price
thereof immediately, or at the latest, at the first port reached.
ARTICLE 617. The captain can not contract loans
on respondentia, and should he do so the contracts shall be
void.
Neither can he borrow money on bottomry for his own
transactions, except on the portion of the vessel he owns,
provided no money has been previously borrowed on the
whole vessel, and provided there does not exist any other kind
of lien or obligation thereon. When he is permitted to do so,
he must necessarily state what interest he has in the vessel.
In case of violation of this article the principal, interest, and
costs shall be charged to the private account of the captain,
and the agent may furthermore have the right to discharge
him.
ARTICLE 618. The captain shall be civilly liable to the
agent, and the latter to the third persons who may
have made contracts with the former —
1. For all the damages suffered by the vessel and his cargo by
reason of want of skill or negligence on his part. If a
misdemeanor or crime has been committed he shall be liable
in accordance with the Penal Code.
2. For all the thefts committed by the crew, reserving his right
of action against the guilty parties.
3. For the losses, fines, and confiscations imposed an account
of violation of the laws and regulations of customs, police,
health, and navigation.
4. For the losses and damages caused by mutinies on board
the vessel, or by reason of faults committed by the crew in the
service and defense of the same, if he does not prove that he
made full use of his authority to prevent or avoid them.
5. For those arising by reason of an undue use of powers and
non-fulfillment of the obligations which are his in accordance
with Articles 610 and 612.
6. For those arising by reason of his going out of his course or
taking a course which he should not have taken without
sufficient cause, in the opinion of the officers of the vessel, at
a meeting with the shippers or supercargoes who may be on
board.
No exception whatsoever shall exempt him from this
obligation.
7. For those arising by reason of his voluntarily entering a port
other than his destination, with the exception of the cases or
without the formalities referred to in Article 612.
8. For those arising by reason of the non-observance of the
provisions contained in the regulations for lights and
evolutions for the purpose of preventing collisions.
LOAN ON BOTTOMRY? LOAN ON
RESPONDENTIA
2. LOANS ON BOTTOMRY AND RESPONDENTIA
CHARACTER OF LOAN, ART. 719 ARTICLE 719
A loan on bottomry or respondentia shall be considered that
which the repayment of the sum loaned and the premium
stipulated, under any condition whatsoever, depends on the
safe arrival in port of the goods on which it is made, or of their
value in case of accident.
FORMS AND REQUISITES ARTICLE 720
Loans on bottomry or respondentia may be executed:
1. By means of a public instrument.
2. By means of a bond signed by the contracting parties and
the broker who took part therein.
3. By means of a private instrument. Under whichever of these
forms the contract is executed, it shall be entered in the
certificate of the registry of the vessel and shall be recorded in
the commercial registry, without which requisites the credits
originating from the same shall not have, with regard to other
credits, the preference which, according to their nature, they
should have, although the obligation shall be valid between
the contracting parties.
The contracts made during a voyage shall be governed by the
provisions of Articles 583 and 611, and shall be effective with
regard to third persons from the date of their execution, if
they should be recorded in the commercial registry of the port
of registry of the vessel before eight days have elapsed from
the date of her arrival.
If said eight days should elapse without the record having
been made in the commercial registry, the contracts made
during the voyage of a vessel shall not have any effect with
regard to third persons, except from the day and date of their
entry. In order that the bonds of the contracts celebrated in
accordance with No. 2 may have legal force, they must
conform to the registry of the broker who took part therein. In
those celebrated in accordance with No. 3 the
acknowledgment of the signature must precede. Contracts
which are not reduced to writing shall not be the basis for a
judicial action.
ARTICLE 721 In a bottomry or respondentia bond there must
be stated:
1. The kind, name, and registry of the vessel.
2. 2. The name, surname, and domicile of the captain.
3. 3. The names, surnames, and domicile of the person giving
and of the person receiving the loan.
4. 4. The amount of the loan and the premium stipulated.
5. 5. The time for repayment.
6. 6. The goods pledged to secure repayment.
7. 7. The voyage for which the risk is run.
ARTICLE 722 The bonds may be issued to order, in which case
they shall be transferable by indorsement, and the assignee
shall acquire all the rights and run all the risks corresponding
to the indorser.
AMOUNT ARTICLE 723 Loans made be made in goods and in
merchandise, fixing their value in order to determine the
principal of the loan.
ARTICLE 726 If the lender should prove that he loaned a
larger amount than the value of the article liable for the
bottomry loan, by reason of fraudulent measures employed by
the borrower the loan shall only be valid for the amount at
which said object is appraised by experts. The surplus principal
shall be returned with legal interest for the whole period of the
duration of the disbursement.
ARTICLE 727 If the full amount of the loan contracted to load
the vessel should not be made use of for the cargo, the
surplus shall be returned before clearing. The same procedure
shall be observed with regard to the goods taken as a loan if
they could not all have been loaded.
ARTICLE 728 The loan which the captain takes at the point of
residence of the owners of the vessel shall only affect that part
of the latter which belongs to the captain, if the other owners
or their agents should not have given their express
authorization thereto or should not have taken part in the
transaction. If one or more of the owners should be requested
to furnish the amount necessary to repair or provision the
vessel, and should not do so within twenty-four hours, the
interest which the parties in default may have in the vessel
shall be liable for the loan in the proper proportion. Outside of
the residence of the owners the captain may contract loans in
accordance with the provisions of Articles 583 and 611. BY
vocal critics by distracting and burdening them with an
expensive and complicated lawsuit. They repress free speech
rights protected by the First Amendment, as lawsuits can
easily cost thousands of dollars. Many states have anti-SLAPP
laws, which are more commonly invoked

WHOM ARTICLE 611 In order to comply with the obligations

mentioned in the foregoing article, the captain, when he has
no funds and does not expect to receive any from the agent,
shall procure the same in the successive order stated below:
1. By requesting said funds of the consignees or
correspondents of a vessel. 2. By applying to the consignees
of the cargo or to the persons interested therein.

BARRATRY

ISABELA ROQUE VS PIONEER INSURANCE

AND SURETY CORPORATION
GR No. L-66935
Barratry as defined in American Insurance Law is "any willful
misconduct on the part of master or crew in pursuance of
some unlawful or fraudulent purpose without the consent of
the owners, and to the prejudice of the owner's interest."

Barratry necessarily requires a willful and intentional act in its

commission. No honest error of judgment or mere negligence,
unless criminally gross, can be barratry.

In admiralty law, barratry is an act of gross misconduct

committed by a master or crew of a vessel resulting in damage
to the vessel or its cargo. These activities may include
desertion, illegal scuttling, theft of the ship or cargo, and any
act carried out against the best interests of the shipowner.

In maritime law, barratry is the commission of an act by the

master or mariners of a vessel for an unlawful or fraudulent
purpose that is contrary to the duty owed to the owners, by
which act the owners sustain an injury.

Examples of Barratry

Although barratry is considered a relatively obsolete practice

by lawyers looking to turn a dime, the practice itself is more
common in certain fields of laws than others, such as with
personal injury claims.

For example, some states like Texas that take barratry more
seriously even prohibit lawyers from being the first to initiate
contact with a future potential client (as some are feared to
show up overeager to accident scenes).1 A lawyer soliciting
employment on a case, forcing an individual to take on a case
through threat or coercion, or even beginning to work on and
file a case behind someone's back are all considered examples
of barratry.

Barratry vs. SLAPP Lawsuits

Although barratry lawsuits are few and far between, a more
common form of barratrous litigation is known as SLAPP
lawsuits or a strategic lawsuit against public participation.
SLAPPs are commonly initiated to censor, silence, or intimidate
1. US VS. YAP TIAN JONG Three witnesses engaged in the discharging the cargo and
34 Phil 10 one who was in employ of the accused testified positively to
the delivery of the box in question to the accused,

RETAINING GOODS ERRONEOUSLY NAME OF THE BOAT - Steamship Batangueno

DELIVERED BY CARRIER. — ESTAFA; NAME OF THE CONSIGNEE - Y.J/ Yap Tian Jong of the 18
boxes or packages
NAME OF THE DEFENDANT- SY JONG KUANG WITH A BOX
OF Sinamay valued at P625
By mistake a box of sinamay, ACCUSED INITIALS - Y.J
 consigned to a merchant
 The accused took possession of the box
 thus delivered to him by mistake,
 converted it to his own use, 1. This is an appeal convicting the defendant and appellant
 and upon demand for its return, of the crime of estafa
 denied that he had received it and
 declared that he knew nothing whatever about 2. a case containing a number of bolts of sinamay cloth
it. was by mistake unloaded
Held:
3. from the steamship Batangueño ( NAME OF THE BOAT)
That the accused is guilty of the crime of estafa as defined and
penalized in subsection 5 of article 535 of the Penal Code. 4. by reason

a) of its being marked the same as, or similar to,

certain cases consigned to the defendant (Y. J.)
CARRIERS; ACTION BY MASTER OF
VESSEL FOR CONVERSION AND 5. there the accused
UNLAWFUL DETENTION OF GOODS.
a) after opening the box and
b) discovering that it contained bolts of sinamay cloth,
c) maliciously, fraudulently and criminally, and
The captain of the vessel thereby prejudicing another person,
d) appropriated to himself the said box
 to whose possession this box of goods containing the sinamay cloth and
 had been intrusted for transportation, e) denied having received the said goods."cralaw
 had sufficient interest therein tua1aw library
1. to institute and maintain proceedings 6. The bill of lading shows 18 packages or boxes bore the
against the accused, marks Y.J. presumably represent the initials of the
2. both civil and criminal, accused
 for its conversion and unlawful
detention, 7. Before reaching Ibajay
after due demand had been made for its return.
a) the Batangueño
i. took aboard at New Washington, Province of
Capiz,
ii. a box of sinamay valued at P625, consigned by
FACTS Sy Jong Kuang to another Chinese merchant in
Manila

8. This box also bears the marks "Y.J."

a) and through mistake, possibly due to the similarity

In this case, there are two packages, one of which is for the
defendant - YAP TIAN JONG and one to SY JONG KUANG b)
Both packages were marked similarly the same Y.J.
IT WAS ONLY DISCOVERED
18 boxes consigned to Yap Tian Jong, marked Y.J and a box
of Sinamay consigned to Sy Jong Kuang valued at 625. c)
The boxes were unloaded by mistake.
d)
The mistake was only discovered after the boat left Ibajay and
e)
the captain telegraphed regarding the missing box, however,
the accused denied that he had received the box and declared
that he know nothing whatever about it.
to the marks on defendant’s goods,
it was put off the vessel at Ibajay, with the rest of
the shipment of goods consigned there.
The mistake was discovered after the boat left
Ibajay and before it reached Romblon, the next
port, and on arriving at Romblon,
the captain telegraphed back to Ibajay with regard
to the missing box of sinamay.
When the Batangueño stopped at ibajay on her next
trip some 10 or 12 days later,
i. the accused, in response to inquiries of the
captain,
ii. denied that he had received the box and
declared that he knew nothing whatever about
 it.

9. It was conteded by the prosecution that this box of

sinamay cloth was unloaded by mistake
a) Despite the demands made by the captain of the
ship
b) for the return of the goods, into whose care it had
been intrusted by its owner
c) the accused took possession and retained the goods ISSUES
unloaded by mistake

10. That the box was put off by mistake at Ibajay

a) is not disputed and is not subject to dispute, and

1. Whether or not the accused is guilty of the express
b) three witnesses who were at that time engaged in
provisions of subsection 5 of article 535 of the Penal Code
discharging the cargo of the Batangueño, and one
YES
who was in the employ of the accused, testified
positively to the delivery of the box in question to
2. Whether or not the captain of the vessel could not lawfully
the accused, together with the other goods
file a complaint charging the defendant with the crime of
consigned to him on board the Batangueño.
estafa
NO.
While it appears that two of these witnesses were taken into
the employ of the captain of the Batangueño it does not
necessarily follow
 that all that they said on the witness stand was false and
unworthy of credence.

It is true that they appear to have been "willing" witnesses, RULING

and that their readiness to appear and testify may have
resulted from the fact that they were at that time in the
employ of the captain of the Batangueño,

THE TRIAL JUDGE- Package came into the

possession of the accused 1. YES

a) but the trial judge, was of the opinion that, their
testimony was true,
b) we are satisfied beyond a reasonable doubt that it
came into the possession of the accused in the
manner and form charged by the prosecution,
c) he refused to (return) do so and denied having
received it,
d) declaring at the same time that he knew nothing
whatever in regard to it.
With regard to the criticisms of counsel for
 wherein he observes that the preponderance of the
testimony
 is in favor of the prosecution,
 it is sufficient to say that while this finding might seem to
indicate that the judge found the accused guilty upon a
preponderance of the evidence,
 nevertheless, the other findings set forth in the opinion
 clearly disclose that the trial judge
 gave no credit whatever to the testimony of the
witnesses for the defense, and
 accepted as true beyond a reasonable doubt the
testimony of the witnesses called for the
prosecution.
We agree with the trial judge that the evidence clearly
discloses a violation of the express provisions of subsection 5
of article 535 of the Penal Code, in that, "to the prejudice of
another he converted to his own use the box of sinamay,
received by him under such circumstances as to give rise to an
obligation to return or make delivery of the same" to the
owner upon demand, and that he "denied having received
these goods."cralaw virtua1aw library
2. NO
We find no merit in the contention that the captain of the
vessel, to whose possession the box of sinamay was intrusted
for transportation to Manila, could not lawfully file a complaint
charging the defendant with the crime of estafa. The fact that
this box of goods had been intrusted to the possession of the
captain of the Batangueño for transportation was sufficient in
itself to maintain his right to proceed against the accused,
both civilly and criminally, for its conversion and unlawful
detention, after due demand had been made for its return by
the captain, who had a perfect right to its possession, for the
purpose of its transportation aboard his ship to the original
consignee.

2.
2. JOAQUIN CASTRO & CO. VS. MAERSK 3. Whether or not plaintif is entitled to a refund for the freight
paid - YES
62 Phil 310

Decision of the Lower Court was reversed by the Supreme

Court absolving defendant from the complaint DEFENDANT APPEALED ON THAT RULING

1. COURT DECLARING THE BOILER IS LESS THAN 40

TONS
2. Defendant relying upon the provisions of Article 1124 of the
Civil Code for the between the fulfillment of obligation or
FACTS payment for damages and interest - NOT BOTH

 The person prejudiced may choose between

exacting the fulfillment of the obligation or its
resolution with indemnity for damages and payment
of interest in either case He may also demand the
PLAINTIFF : JOAQUIN CASTRO resolution of the obligation even after having
DEFENDANT : MAERSK requested its fulfillment, should the latter be found
VESSEL : PETER MAERSK impossible.
TRANSSHIPMENT VESSEL : ISLAS VISAYAS
ARTICLE 1124 : APPLICABLE
DEFENDANT LIABLE : NO
REFUND ON THE FREIGHT : YES

 Castro and Maersk entered into a contract

 Maersk will transfer 40-ton boiler by the motorship Peter RULING
Maersk with freight of 277.50
 From Manila to Cebu
For transhipment at cebu to the vessel Islas Visayas
 Contract stated that boiler should not weigh more than
40 tons
 Because the boom of the Peter Maersk was COURT SAID ON THE 1st ISSUE - ARTICLE 1124 -
incapable of lifting heavier objects. UNFOUNDED

 Because of the various paper showing the weight
of the boiler, 40-tons, 41 tons,
 Captain Petersen demanded from Suzara, an agent
of the plaintiff, certificate showing the boiler did not
weigh to exceed 40 tons
 Because no certicate was shown, Maersk refused to
transport the boiler as it weighed more than 42 1/2 tons.
 placing the freight paid by the plaintiff at the latter's
disposal.
 Because of the refusal of the defendant, plaintiff brought
an action for the specific performance of the contract and
to recover damages
 Defendant was ordered to pay the plaintiff the sum of
4,438, to refund the freight charges with legal interest on
both sums and to pay the costs. (BOTH FULFILLMENT
AND DAMAGES AND INTEREST )
Under this article, the person prejudiced MAY DEMAND
1. For Specific Performance of the obligation - indemnity for
damages and payment of interest
2. As well as rescind it - because of the phrase “in either case”
The second and third assignments of error more properly
involve questions of fact. We agree that the principal question
at issue upon which hinges the determination of the case
refers to the weight of the boiler.
WEIGHT OF THE THE BOILER ISSUE
The defendant was justified in rescinding the contract as
expressly stated the boiler should weigh not more than 40
tons.

The judgment was based entirely on alleged preponderance of

the evidence - which was premised on the expert testimony of
Suzara, Magsaysay and Miller.
ISSUE
1. Magsaysay and Miller testified

 upon a plan of the boiler not prepared by them.

The former's inspection of the boiler was so superficial and

1. Whether or not the court made an error declaring the boiler
made conform to the plan, that his estimate cannot be made
less than 40 tons. YES, IT WEIGHED MORE THAN 40
to with respect to the testimony of Millerwhose estimate
TONS
likewise was based on the data afforded by the plan not
2. Whether or not Article 1124 of the Civil Code is applicable in
prepared by him.
this case. NO

2. Referring to Suzara's testimony,

 it appears that he had admitted to Captain Petersen, in
the presence of Fitzsimmons, and to Grimm
 that the boiler, weighed 41 or 42 tons.

After the rejection of the boiler.

Suzara, during, another conversation with Thomson in the

presence of Captain Petersen, again stated having seen in the
original invoice of the boiler or in a copy thereof that it
weighed 42 ½ tons.

REFUND OF THE FREIGHT CHARGES

COURT RULED:
Upon this evidence, we are forced to conclude that the
preponderance thereof supports the defendant's theory
that the boiler exceeded the weight assured by the
plaintiff's agent, thereby justifying it in rescinding the
contract.

The last assignment of error refers to the refund of the freight

charges ordered in the judgment. Inasmuch as the amount
thereof was deposited with the clerk of court subject to the
outcome of the suit, we are of the opinion that the resolution
should have directed the clerk of court to deliver it to the
plaintiff.
3. ISABELA ROQUE VS PIONEER
 PIONEER REFUSED TO PAY - on the ground that its
INSURANCE AND SURETY CORPORATION liability depended upon the “Total loss by Total loss of
GR No. L-66935 vessel only.”

TRIAL COURT DECISION

TOPIC: Marine Insurance; Risk/Perils, all risk policies

The Trial Court ordered Manila Bay and Pioneer to pay

petitioners jointly and severally the amount of P100k.
DOCTRINE:
 During the initial stages of the hearing, Manila Bay was
A loss which,
ordered to sell salvaged parts of the logs to the highest
 in the ordinary course of events
bidder with the funds to be deposited in a bank.
1. results from the natural and inevitable action of the
sea,
2. from the ordinary wear and tear of the ship, or IAC DECISION
3. from the negligent failure of the ship's owner to
provide the vessel with proper equipment to convey IAC modified the trial court's decision and
the cargo under ordinary conditions,
IS NOT A PERIL OF THE SEA BUT PERIL OF THE  absolved Pioneer from liability after finding that
there was a breach of implied warranty of
SHIP. seaworthiness on the part of the petitioners and
The insurer undertakes to insure against perils of the sea and
 that the loss of the insured cargo was caused by
similar perils, not against perils of the ship.
the "perils of the ship" and not by the "perils of
the sea". It ruled that the loss is not covered by the
marine insurance policy.

SUMMARY:  The appellate court further found that one of the

Name of the Barge : Mable 10 hatches was left open causing water to enter the
Load : 422.18 Cubic Meters of Log barge and because the barge was not provided with
the necessary cover or tarpaulin, the ordinary splash
Destination : Malampaya Sound, Palawan
of sea waves brought more water inside the barge
To North Harbor Manila
Where Sank : 810 Pieces of logs, somewhere off
Cabuli Point in Palawan
Reason of Sank : Unseaworthiness
Was there Barratry?: No ISSUE
Who is liable : Manila Bay
Insurer : Not liable - Perils of the Ship, not
Perils of the Sea

1. Whether there is a warranty of seaworthiness by the cargo

holder. (YES) Manila Bay Carrier is liable

2. Whether the loss of the cargo in this case was caused by

FACTS "perils of the ship" and not by "perils of the sea." PERILS OF
THE SHIP

 Roque and Chiong entered into a contract with Manila RULING

Bay Lighterage Corp
 to load and carry on board its barge Mable 10
 about 422.18 cubic meters of logs
 from Malampaya Sound, Palawan to North Harbor,
Manila.
 Mable 10 sank with the 810 pieces of logs SUPREME COURT DECISION
somewhere off Cabuli Point in Palawan.

 The logs were insured against loss for P100k with FIRST ISSUE
Pioneer.

 Petitioners demanded payment for loss of the shipment There is no dispute over the liability of the common
from Pioneer; carrier Manila Bay.
In fact, it did not bother to appeal the questioned decision.  Or the cargo owner may enter into a contract of
However, the petitioners state that Manila Bay has ceased insurance which specifically provides that the
operating as a firm and nothing may be recovered from it. insurer answers not only for the perils of the sea
They are, therefore, trying to recover their losses from the but also provides for coverage of perils of the ship.
insurer.
Second Issue :LOSS OF CARGO WAS DUE TO THE
PERILS OF THE SHIP
● Section 113 of the Insurance Code provides:

 "In every marine insurance upon a ship or freight, ● It is quite unmistakable that the loss of the cargo was due to
or freightage, or upon any thing which is the the perils of the ship rather than the perils of the sea. The
subject of marine insurance, a warranty is implied facts clearly negate the petitioners' claim under the insurance
that the ship is seaworthy." policy. In the case of Go Tiaoco y Hermanos v. Union Ins.
Society of Canton, supra, we had occasion to elaborate on
Section 99 of the same Code also provides in part. 'Marine the term "perils of the ship." We ruled:
insurance includes:
PERILS OF THE SHIP
"(1) Insurance against loss of or damage to:
(a) Vessels, craft, aircraft, vehicles, goods, freights, cargoes, A loss which,
merchandise, . . . ."  in the ordinary course of events
1. results from the natural and inevitable action of the
THE TERM CARGO CAN BE THE SUBJECT OF MARINE sea,
INSURANCE 2. from the ordinary wear and tear of the ship, or
3. from the negligent failure of the ship's owner to
● From the above-quoted provisions, there can be no provide the vessel with proper equipment to convey
mistaking the fact that the term "cargo" can be the subject of the cargo under ordinary conditions,
marine insurance and that once it is so made, the implied
warranty of seaworthiness immediately attaches to IS NOT A PERIL OF THE SEA BUT PERIL OF THE SHIP.
whoever is insuring the cargo whether he be the
shipowner or not.
IN ORDER TO MAKE INSURER LIABLE, THERE MUST
 Go Tiaco v. Union Insurance: "The same BE CASUALTY, SOMETHING WHIH COULD NOT BE
conclusion must be reached if the question be FORESEEN AS ONE OF THE NECESSARY INCIDENTS
discussed with reference to the seaworthiness of OF THE ADVENTURE
the ship. It is universally accepted that in every
contract of insurance upon anything which is the
The purpose of the policy is to secure an indemnity against
subject of marine insurance, a warranty is implied
accidents which may happen, not against events which must
that the ship shall be seaworthy at the time of the
happen.
inception of the voyage. This rule is accepted in our
own Insurance Law”
ENTRANCE OF THE SEA WATER - UNSEAWORTHINESS
UNSEAWORTHINESS OF THE SHIP UNKNOWN TO THE
 In the present case the entrance of the sea water into
INSURED IS IMMATERIL
the ship's hold through the defective pipe already
described was not due to any accident which
● Moreover, the fact that the unseaworthiness of the ship was
happened during the voyage, but to the failure of
unknown to the insured is immaterial in ordinary marine
the ship's owner properly to repair a defect of the
insurance and may not be used by him as a defense in order
existence of which he was apprised.
to recover on the marine insurance policy.
 The loss was therefore more analogous to that which
 Richelieu v. Boston Marine: "There was no
directly results from simple unseaworthiness than to that
lookout, and both that and the rate of speed were
which result from the perils of the sea
contrary to the Canadian Statute. The exception of
losses occasioned by unseaworthiness was in effect
 Suffice it to say that upon the authority of those cases
a warranty that a loss should not be so occasioned,
there is no room to doubt the liability of the shipowner
and whether the fact of unseaworthiness were
for such a loss as occurred in this case.
known or unknown would be immaterial."
 By parity of reasoning the insurer is not liable; for
 The Supreme Court held that :
generally speaking, the shipowner excepts the perils of
the sea from his engagement under the bill of lading,
 Since the law provides for an implied warranty of
while this is the very perils against which the insurer
seaworthiness in every contract of ordinary marine
intends to give protection. As applied to the present case
insurance,
it results that the owners of the damaged rice must look
to the shipowner for redress and not to the insurer.
 it becomes the obligation of a cargo owner to look
for a reliable common carrier which keeps its
WAS THERE BARRATRY? NO
vessels in seaworthy condition.
Barratry as defined in American Insurance Law is "any willful
 The shipper of cargo may have no control over the
misconduct on the part of master or crew in pursuance of
vessel but he has full control in the choice of the
some unlawful or fraudulent purpose without the consent of
common carrier that will transport his goods.
the owners, and to the prejudice of the owner's interest."
Barratry necessarily requires a willful and intentional act in its
commission. No honest error of judgment or mere negligence,
unless criminally gross, can be barratry.

In the case at bar, there is no finding that the loss was

occasioned by the willful or fraudulent acts of the vessel's
crew. There was only simple negligence or lack of skill.
4. US VS. BACHO 9. and that in from one to three minutes, the plate fell into
the boiler and
10 Phil 574, 576 10. splashed the hot water through the manhole on the
Chinaman Chan-Yan,
DOCTRINE: SHIPS AND SHIPPING; RECKLESS 11. who died within twenty-four hours from the effect of the
NEGLIGENCE. — scalds thus inflicted on his person.

Defendant, all the evidence of record tends to prove that he

adopted the usual, proper, and necessary method of
 a chief engineer on a steamship plying in Philippine procedure,
waters,  and that in opening the manhole at the time and
 caused the manhole plate of the vessel’s boiler to be  under the conditions then existing
removed under his supervision.  he was in the usual and proper performance of his
 The operation was performed in the manner duties as engineer.
1. customary upon such vessels and
2. with reasonable care. The evidence throws no light on the true cause of the
accident. It may have resulted from a hidden defect in the
Held, That the defendant is not guilty of reckless rope on which the plate was suspended, for which the accused
negligence, and judgment of conviction reversed. could in no wise be held responsible. It may have resulted
from the slipping of one of the knots used by the fireman in
trying the ends of the rope on which the plate was suspended,
NAME OF THE VESSEL : Steamer Carmen and while it may be admitted that there are cases where it
ACCUSED : Chief Engr. Bacho might be the duty of a ship’s officer to examine personally a
WHERE : Lying at anchor near Cebu knot tied by a subordinate, where there is reason to believe
NAME OF THE VICTIM : Chinaman Chan Yan that a slip resulting from an imperfect tie would endanger the
lives or the property of others, nevertheless in a case such as
the one under consideration, wherein there was apparently
only the most remote possibility of danger resulting from a
THE ACCUSED - failure to tie the knot in an absolutely safe and secure manner,
we do not think that such extreme diligence could be required.
 the accused, the chief engineer on board the steamer Indeed the usefulness of ship’s officers would be dangerously
Carmen impaired if they were required to give their personal attention
 which was lying at anchor near Cebu, to all such petty details, and a ship’s officer might well hesitate
to take command if he be held criminally responsible for every
 carelessly and with reckless negligence accident resulting from the neglect of those under his
 released the screws command. Again, the fall of the plate might have been caused
 which held in place the manhole plate on the by some mischievous or malicious person, and indeed there is
steamer’s boiler, some evidence in the record which suggest this as the true
 without taking proper precautions to keep the plate solution of the problem. The rope which the defendant
from falling into the boiler; produced at the trial as the one on which the plate was
suspended showed evidences of having been cut, from the
AS A RESULT description of the boiler and the parts about the manhole, it is
difficult to understand how it could have been found in that
1. the plate fell into the boiler, and condition unless some one had deliberately used a knife. We
2. plunging into the hot water presume it will not be contended, and it was not proven, that
3. splashed some of it through the manhole so that it was the duty of the defendant to keep such a strict watch on
4. It fell upon a Chinaman named Chan-Yan, any particular part of the engine as to make it impossible for a
5. scalding him severely that he died the following day. malicious mischievous person to give the rope a cut with a
knife, with perhaps no other object than to annoy the engineer
by letting the plate fall into the boiler, so that he would be
In the usual and proper discharge of his duty as engineer, compelled to go in after it.

1. the accused directed one of his firemen to open the
manhole
2. that the accused personally superintended the work, and
3. that it was done in accordance with the method usually
adopted on board steamers in Philippine waters;
4. that the manhole plate, which is so constructed that it
can not be taken off, is held in position by large screws in
such manner that when the bolts on these screws in such
manner
5. that when the bolts on these screws are loosened the
plate drops into the boiler,
6. unless it be supported by a cord or rope;
7. that under the direction of the accused the plate, which
weighed about 20 pounds, was suspended on a rope
kept for that purpose;
8. that thereafter the accused and the fireman went about
their work in another part of the ship;
Whatever was the cause of the fall of the plate, we find
nothing in the record to indicate that it was due to the
negligence or carelessness of the defendant, and on the
contrary there is evidence to show that he exercised all the
care and took all the precautions required of him in the due
performance of his duty.
The trial judge seems to have been of opinion that if a rope
strong enough had been used, and if the knots had been tied
in a proper, and if the plate had been properly secured, it
could not have fallen, so that there must have been
negligence somewhere, and as the defendant was in charge of
the work, he should be held responsible. What has been said
would seem to be sufficient answer to this reasoning, and it
may be added, that in the general experience of mankind,
accidents apparently unavoidable and often inexplicable are
unfortunately too frequent to permit us to conclude that some
one must be criminally liable for negligence in every case
where an accident occurs. It is the duty of the prosecution in
each case to prove by competent evidence not only the
existence of criminal negligence, but that the accused was
guilty thereof.

The accused produced a rope at the trial which he swore was

the rope upon which the plate was suspended, and his
statement was corroborated by the fireman; the court,
however, refused to believe that this was the very rope used
by the defendant, although there was not a particle of
evidence to the contrary. The trial judge found that, since the
rope appeared to be so strong that the swinging plate could
not have broken it, either this was not the rope used or it
must have been already cut the place where it was supposed
to have broken before it was put in use. As we have said, it
might have been cut after the plate was suspended, or there
might have been a hidden defect in the rope, so far as
appears from the testimony of record, the accident might have
resulted from some other cause than the breaking of the rope;
and in any event, it is going far to say that, as the accident
had occurred, the court would refuse to believe uncontradicted
testimony that a certain rope had been used, unless that rope
were so weak as to justify a finding of negligence in its use.

The accused maintained that before opening the boiler he sent

the deceased to work at another part of the ship, and there is
some evidence in support of his statement. The prosecution
introduced testimony to prove that after the accident, the
accused admitted that he had forgotten that the deceased was
working near the boiler. We do not think, however, that the
point is of special importance, as unless it appeared that the
accused was guilty of criminal negligence in the method
employed in opening the boiler, we do not think the mere fact
that he opened the manhole of the boiler while the deceased
was working in the neighborhood constituted such criminal
negligence as would sustain the judgment of conviction. The
steamer was lying quietly at anchor, and the possibility that
the accident by which the deceased came to his death would
occur was so remote that it would be most unreasonable to
hold him criminally responsible for failing to anticipate it.

The judgment of conviction and the sentence imposed upon

the appellant are reversed with the costs in both instances de
oficio. So ordered.
5. SONTUA & CO. VS. OSSORIO
GR No. 17690. June 14, 1922
 2 steamer was on fire
 First, the Alfonso, then Y Sontua was lying
alongside moored to the wharf of said river
 Sontua filed an action for recovery for the damages
due to the negligene of the agents and employees
of Alfonso
 There were 2 causes of action in the complaint
 Trial Court sentenced defendant to pay 67400 with
legal interest and the cost
 RELATIONS BETWEEN PRINCIPAL AND AGENT AND
HIS AGENTS AND EMPLOYEES IS NOT APPLICABLE
IN THE PRESENT CASE
On the evening of the 13th of March, 1920,
a fire broke out on board the motor boat Alfonso when this
boat was in the Pasig River, city of Manila, ready to weigh
anchor.
A short distance from the Alfonso the steamer Y. Sontua was
lying alongside moored to the wharf of said river.
The fire in the motor boat Alfonso spread to the steamer Y.
Sontua, causing damages to her deck, according to plaintiff,
amounting to P67,400.
The plaintiff, which is a regular partnership and the owner of
the steamer Y. Sontua, brought this action to recover from the
defendant, the owner and agent of said motor boat Alfonso,
the aforementioned sum as indemnity for the damages alleged
by the plaintiff to have been sustained by him
through the negligence of the agents and employees of the
said defendant, which caused the fire in the aforesaid motor
boat Alfonso, wherefrom it spread, and caused said damages
to the steamer Y. Sontua.
These damages are specified in the two causes of action set
forth in the complaint,
in the first
1. of which are mentioned
a) the appurtenances and parts of the aforesaid
vessel that were destroyed and damaged by
the said fire, and
b) for the repair of which the sum of P40,000 was
expended.
In the second cause of action
2. it is alleged that
a) the plaintiff sustained damages to the amount of
P27,400 for the demurrage and
b) delay in the ordinary voyages of the aforesaid
vessel Y. Sontua.
After denying generally and specifically the allegations of the
complaint, the defendant alleges, as special defense, that he
has taken no part either directly or indirectly in the acts
alleged in the complaint;
TRIAL COURT
Sentenced the defendant to pay the plaintiff the above-
mentioned sum of P67,400, with legal interest thereon from
the date of the filing of the complaint, and the costs.
ASSIGNMENT OF ERRORS
(a) The finding that the explosion in question was due to the
negligence of the persons in charge of the motor
boat Alfonso;
i. imputable to the negligence of the
persons having charge at that time of
said motor boat
(b) the finding that the defendant is liable for the negligence
of his agents and employees; and
 YES LIABLE FOR THE NEGLIGENCE OF
HIS AGENTS AND EMPLOYEES
 Where the vessel is one of freight, a
public concern or public utility, its owner
or agent is liable for the tortious acts of
his agents (arts. 587, 613, and 618, Code
of Commerce; and arts. 1902, 1903,
1908, Civil Code). This principle has been
repeatedly upheld in various decisions of
this court.
 Therefore there is also no ground for holding
that the second error assigned by the
appellant has been committed
C. the awarding of an excessive sum as damages.
1. AMOUNT OF REPAIR 27,968
2. AMOUNT OF MATERIALS USED IN REPAIRS
12139.30
3. AMOUNT OF DAMAGE SUSTAINED FOR THE DELAY
14379
i. Award of damages based on the delay
ii. not chargeable to the defendant since
said delay is in no way imputable to him
 iii. should be reduced to one-half, or thirty-five
days at the rate of P410.84 a day which is the
net profit that the aforesaid steamer Y.
Sontua failed to realize
4. ADDTL DAMAGES FOR MAINTENANCE - Not
Necessary
With regard to the first error,
the following facts are proven: That during the day and night
of the 12th, and during the day of the 13th of March 1920,
 there were loaded in the said motor boat Alfonso 2,000
cases of petroleum and 8,473 cases of gasoline, of which
5,000 cases of gasoline and 2,000 of petroleum were placed
in the hold of said motor boat, and the balance on deck;
 that said loading was done without permission from the
customs authorities;
 that the said cases were loaded by means of straps
supporting 10 or 12 cases at a time;
 that the said cases of gasoline and petroleum were
placed in the hold about 14 feet from the boiler of
the main engine and about 4 feet from the boiler
of the smaller engine;
 that on the evening of the 13th of March, 1920, the
smaller engine was in operation preparatory to the
departure of the motor boat which, at that time, was
getting ready to leave;
 that the fire in said motor boat burst out with an
explosion followed by a violent expulsion of gasoline and
petroleum;
 that owing to the proximity of the motor boat to the
steamer Y. Sontua, the magnitude of the fire and the
inflammability of the material that served as fuel, the fire
spread to the said steamer Y. Sontua, and so rapidly that
it was impossible for the crew of the Y. Sontua to check
its progress,
EXPERT TESTIMONY
Expert testimony was also introduced by the plaintiff to the
effect that it is but natural that, after several
transhipments of more than 8,000 cases of gasoline
and 2,000 cases of petroleum there is bound to be a
leakage,
on an average of 1 to 4 cases per hundred, due to the fact
that the loading is effected by means of straps supporting
from 10 to 12 cases at a time which, quite frequently, receive
violent bumps resulting in damage to the cans and the
consequent leakage of either gasoline or petroleum, as the
case may be.
It was also shown by expert testimony that the gases formed
by the volatilization of the gasoline or petroleum leaking from
the cases are apt to accumulate in a compartment, such as the
hold of a ship, without sufficient ventilation causing the gases
to ignite upon coming in contact with a spark or upon the
temperature being sufficiently raised.
Under these circumstances we are constrained to hold that the
fire which caused the damages for which the plaintiff seeks to
be indemnified was the inevitable effect of the explosion and
fire which occurred in the motor boat Alfonso; that this
explosion and fire in the said motor boat is, with good ground,
imputable to the negligence of the persons having charge at
that time of said motor boat and under whose direction the
loading of the aforesaid cases of petroleum and gasoline had
been performed.
In the second assignment of error,
the appellant contends that the defendant ought not to be
held liable for the negligence of his agents and employees.
It is proven that the agents and employees, through whose
negligence the explosion and fire in question occurred, were
agents, employees, and mandatories of the defendant. Where
the vessel is one of freight, a public concern or public utility,
its owner or agent is liable for the tortious acts of his agents
(arts. 587, 613, and 618, Code of Commerce; and arts. 1902,
1903, 1908, Civil Code). This principle has been repeatedly
upheld in various decisions of this court.
RELATIONS BETWEEN PRINCIPAL AND AGENT AND
HIS AGENTS AND EMPLOYEES IS NOT APPLICABLE IN
THE PRESENT CASE
The doctrines cited by the appellant in support of his theory
have reference to the relations between principal and agent
and his agents and employees; for this reason they cannot be
applied in the present case.
In American law, principles similar to those in force in the
Philippines and contained in the Code of Commerce above
cited, are prevailing:
Vessel owner's liability in general. —
The general liability of a vessel owner
1. extends to losses by fire arising from other than a natural
or other excepted cause, whether occurring on the ship
accidentally, or communicated from another vessel, or
from the shore; and
2. the fact that fire produces the motive power of a boat
does not affect the case.
3. Such losses are not within the exceptions either of act of
God, or peril of the sea, except by local custom, unless
proximately caused by one of these events.
4. In jurisdictions where the civil law obtains, however, it
has been held that if property on a steamboat is
destroyed by fire, the owners of the boat are not
responsible, if it was being navigated with proper
diligence, although the accident occurred at night.
5. The common law liability extends even to loss by fires
caused entirely by spontaneous combustion of the cargo,
without any negligence on the part of master or crew.
(R.C.L., vol. 24, pp. 1324-1325.)
With regard to the allegation that the obligations enumerated
in article 612 of our Code of Commerce are
1. inherent in the master
a) such inherent duties do not limit to the latter the
civil liability arising from their nonfulfillment,
and as the damage, if any, resulting from the ten days' delay
in the Pasig River, is remote and, therefore, not chargeable
to the defendant since said delay is in no way
imputable to him,
we think, in view of all of the circumstances of the case and
taking into consideration
1. the importance of all the repairs, whether by fire or
otherwise,
2. the delay of seventy days, according to the evidence of
the plaintiff, chargeable to the defendant,
should be reduced to one-half, or thirty-five days at the rate of
P410.84 a day which is the net profit that the aforesaid
steamer Y. Sontua failed to realize as a consequence of said
delay.

2. but while the master is responsible to the ship agent,
a) the ship agent, in turn, is responsible to third
persons, as is clearly provided in article 618 of said
Code, in which express mention is made, is
subsections 5 and 7, of the duties enumerated in
the said article 612.
The third error is concerned with the amount of the
damages sustained by the plaintiff.
AMOUNT OF REPAIR 27,968
We find that the damages sustained by the plaintiff by reason
of this delay amount to P14,379.40.
The plaintiff further asks that he be awarded, by way of
damages, the sum of P4,400 covering maintenance and salary
of the officers and crew of his steamer during the delay
aforementioned. We do not feel that he is entitled to this item
for the reason that such expenses have already been taken
into account in determining the net daily profit above referred
to. We find that the total sum which the plaintiff is entitled to
recover from the defendant as damages under the facts stated
is fifty-four thousand four hundred eighty-six pesos and
seventy centavos (P54,486.70).

It is sufficiently proven that the sum paid by the plaintiff to the

Earnshaw Shipyards for the repairs made to the steamer Y.
Sontua, damage to which was caused by the fire in question,
amount to P27,968;

that the materials used in said repairs and paid for by the
plaintiff are worth P12,139.30.

AMOUNT OF DAMAGE SUSTAINED FOR THE DELAY

As to the damages sustained by the plaintiff on account of the

delay of the steamer Y. Sontua,

 the evidence shows that this steamer was delayed ten

days in the Pasig River,

 waiting for available space in the shipyard before it was

taken to the said repair-shop;

 that it was not absolutely necessary that the repair of the

damages caused by the fire should be made in the
shipyard;

 that said vessel was taken to the shipyard for repair of

some parts of it not damaged by the fire in question.

1. As the evidence does not sufficiently show the time

consumed in repairing the actual damage caused by the
said fire,

2. nor the time employed in making the other repairs,

6. YUENG SHENG EXCHANGE VS.
URRUTIA
GR No. 4566 Feb. 9, 1909
No control and supervision, it is still logged with
Smith, Bell and Co.
1. SHIPS AND SHIPPING; CHARTERERS; LIABILITY FOR
DAMAGES CAUSED BY NEGLIGENCE. —
 The charterer of a ship who,
 by the terms of the charter party,
 has only the right to indicate the ports or places at
which the vessel shall call or enter,
 but who has no jurisdiction or control over the acts
of the captain,
 is not liable for the damages caused by the
negligence of the latter in handling the ship.
Plaintiff - YB Sontua
Vessel - Minas de Batan
Destination - Saigon to Manilla
G. Urrutia & Co - chartered the CEBU BUT NOT THE OWNER
The captain and the engineer of CEBU hired the crew and
were in the exercise of their duties
 YB Sontua loaded rice on the Minas de Batan
 From saigon, it arrived in the port of Manila while the rice
in safe and in good condition
 While the said Minas de Batan lay in the inner harbor of
Manila
 A steamer Cebu approached Minas de Batan
 Carrying her port achor hanging over the load line
 The fluke of the said anchor penetrated the starboard
side of the Mians de Batan
 as a result, water entered the said steamer and wet a
portion of her cargo rice, 5,008 valued at 27193.93
for this the
Yueng Sheng Exchange and Trading Company, as insurance
company, paid Y. B. Sontua the sum of P15,995.85,
and the Hip On Insurance Company, Limited, paid the said
Sontua the sum of P11,198.08.
The first-named company, by virtue of its own contract and
rights, and by virtue of the contract and rights transferred by
the latter, commenced the present suit against G. Urrutia &
Co. for the above-named sum of P27,193.93, as damages,
 with legal interest and the costs of the suit, considering
the said company as the charterers responsible for the
steamer Cebu
 and consequently responsible for the acts of the officers
and the crew of the same, who, on account of their
recklessness and negligence, were the cause of the
damages occasioned to the steamer Minas de Batan, to
one of the shippers, and to the company which insured
the damaged cargo.
The facts above related appear from an agreement
reached by the lawyers of both parties. The two following
facts also appear as accepted:chanrob1es virtual 1aw
library
That G. Urrutia & Co. are not the owners of the Cebu,
but they had chartered her.
 A copy of the contract was made an integral part of this
agreement.
That the captain and engineer of the Cebu were
engaged, on the date of the execution of the contract,
 by Smith, Bell & Co., a partnership organized in
accordance with the laws in force in the Philippine
Islands, and
 from this company G. Urrutia & Co. chartered the
steamer under the above-mentioned contract.
 The said captain and engineer in turn hired the crew, and
were in the exercise of their duties at the time of the
occurrence in question.
On the date in question — that is, on July 21, 1906 —
the
 second typhoon signal had been hoisted at the
semaphore station; this signal announced a distant
typhoon, and gave warning that certain precautions
should be taken in case the typhoon should approach,
 but did not prevent the crews from continuing their
ordinary tasks while the said typhoon continued at a
distance.
 It was at this time that the Cebu approached the Minas
de Batan for the purpose of taking on cargo from the
latter. It is also agreed that, while the Cebu was
approaching, the Buen Viaje approached the other side of
the Minas de Batan, for the same purpose, causing no
damage to the latter or to her cargo, in spite of the
condition of the sea and of the weather.
The above-mentioned contract is of the following
tenor:jgc:chanrobles.com.ph
"Messrs. Smith, Bell & Co., as agents of the Cebu on the
one part, and Messrs. G. Urrutia & Co., as charterers, on
the other, have agreed on this date to the following
charter:jgc:chanrobles.com.ph
"First. Messrs. Smith, Bell & Co. charter the Cebu to
Messrs. G. Urrutia & Co. for the sum of P2,500, plus P650
in consideration of the fact that Messrs. Smith, Bell & Co.
will pay for ships’ stores required by the said steamer for
her deck and engineering departments, amounting to the
total sum of P3,150 monthly, payable at the end of each
month in Philippine currency.
x       x       x
"Third. Messrs. G. Urrutia & Co. will pay for the coal, salaries
of the officers and of the crew, water, pilotage, subsistence of
the crew, and any other expenses occasioned by loading and
unloading. Fines that may be imposed for defects of the
steamer, such as lack of life preservers, boats, machinery,
etc., shall be paid by the agents of the Cebu, and all those
fines resulting from orders given by charterers shall be paid by
the latter.
"Fourth. Expenses for maintenance of the vessel, such as
repairs, sails, calking, painting, etc., shall be paid by the
agents of the ship.
x       x       x
"Seventh. Both the captain and the crew of the ship shall be
under the orders of the charterers, who will instruct them as
to the trips to be made, the stopping places, provided these
are those mentioned in the previous article, the freight to be
received on board, and they shall work at night in loading and
unloading, should it be required by the charterers, provided
such work be not excessive, and shall perform such other
duties as relate to the better administration of the ship.
"Eighth. Messrs. Urrutia & Co. shall not discharge the captain
nor dismiss the engineer, but should these officers commit any
punishable fault, the said Messrs. Urrutia shall inform the
agents of the vessel, in order that the latter may take such
steps as they may deem necessary in the case."cralaw
virtua1aw library
The question was presented whether the plaintiff company
has, by virtue of such facts, a right of action against the
defendant company, for damages amounting to P27,193.93,
caused through the fault, carelessness, or negligence of the
officers of the Cebu, resulting in damage to the Minas de
Batan, on account of which a portion of the cargo of rice was
spoiled. The Court of First Instance of the city of Manila,
considering that G. Urrutia & Co. were not the owners but
mere charterers of the Cebu, decided the said question in the
negative, saying "that the shipowner or the agent are
responsible for the acts of the captain, although the ship be
chartered or rented, when the charterers have not, as in the
present case, the power to appoint the captain nor to
discharge him," and therefore absolved the defendants G.
Urrutia & Co., with the costs against the plaintiffs.
The latter excepted to the judgment and filed a bill of
exceptions in this court, and the appeal having been heard, it
appears that the appellant files the following assignment of
errors:jgc:chanrobles.com.ph
"1. The court below erred in finding that the defendants were
not responsible for damages caused the plaintiffs, as alleged in
the complaint.
"2. The court below erred in deciding the said case in favor of
the defendants."cralaw virtua1aw library
The whole ground of this assignment of errors rests on the
proposition advanced by the appellant company that "the
charterer of a vessel, under the conditions stipulated in the
charter party in question, is the owner pro hac vice of the ship
and takes upon himself the responsibilities of the
owner."cralaw virtua1aw library
Granted that the cause of the damages was the fault,
negligence, or incompetence of the captain or the crew of the
Cebu, and that the damage was caused by the collision of the
latter with the Minas de Batan, the law applicable to the case,
since it occurred in inner waters of Manila Bay, is the Code of
Commerce of the Philippines.
Article 826 of this code provides:jgc:chanrobles.com.ph
"If a vessel should collide with another through the fault,
negligence, or lack of skill of the captain, sailing master, or
any other member of the complement, the owner of the vessel
at fault shall indemnify the loss and damage suffered, after an
expert appraisal."cralaw virtua1aw library
If G. Urrutia & Co., by virtue of the above-mentioned contract,
became the agents of the Cebu, then they must respond for
the damages claimed, because the owner and the agent are
civilly responsible for the acts of the captain. (Art. 586.)
But G. Urrutia & Co. could not in any way exercise the powers
or rights of an agent. They could not represent the ownership
of the vessel, nor could they, in their own name and in such
capacity, take judicial or extrajudicial steps in all that relates to
commerce (art. 595, par. 2); thus if the Cebu were attached,
they would have no legal capacity to proceed to secure its
release; speaking generally, not even the fines could or ought
to be paid by them, unless such fines were occasioned by their
orders. Article 603 authorizes the agent to discharge at will,
before the vessel goes out to sea, the captain and members of
the crew in w hose contracts a definite period or a definite
voyage is not stipulated. And, according to article 597, the
agent can choose, and make arrangements with the captain,
and male contracts in the name of the owners; the latter will
be responsible in the matter of repairs, details of equipment,
armament, provisions, fuel, and freight of the vessel, and, in
general, in all that relates to the requirements of navigation.
And it may have been seen that G. Urrutia & Co. could not do
the first — i. e., that which relates to the present question,
either appoint the captain or discharge him at any time.
The contract executed by Smith, Bell & Co., as agents for the
Cebu, and G. Urrutia & Co., as charterers of the vessel, did not
put the latter in the place of the former, nor make them
agents of the owner or owners of the vessel.
With relation to those agents, they retained opposing rights
derived from the charter party of the vessel, and at no time
could they be regarded by the third parties, or by the
authorities, or by the courts, as being in the place of the
owners or the agents in matters relating to the responsibility
pertaining to the ownership and possession of the vessel;
neither had they the powers of such owners or agents with
respect to the management and navigation of the ship, and
still less with regard to the ownership and true possession of
the vessel. In proof of this, the ultimate right of an agent, in
the matter of his civil liability for indemnities in favor of third
persons, arising from the conduct of the captain in. the care of
freight carried by the vessel, viz: to abandon the vessel with
all her equipments together with the proceeds derived from
the carriage of freight on the trip, in no manner pertains to G.
Urrutia & Co. by virtue of their contract with Smith, Bell & Co.
(Art. 587.)
The contract simply granted G. Urrutia & Co. the lease of the
Cebu for the voyages expressed in the sixth clause namely,
from Manila to certain ports, "and they could not arrange for
the vessel to make voyages to other ports not mentioned,
without the express authority of Messrs. Smith, Bell & Co."
Their possession was, therefore, the uncertain title of lease,
not a possession representing the true and real possession of
the owner, such as is that of the agent, who is fully
subrogated to the place of the owner in regard to the
dominion, possession, free administration, and navigation of
the vessel.
G. Urrutia & Co. had only the use of the Cebu for the voyages
stipulated in the contract, the right to transport their own
cargo, and to profits accruing from carriage of extra freight
belonging to other persons. The material possession or the
possession in fact was held by the captain, and he held it in
the name of Messrs. Smith, Bell & Co.; he was their
subordinate and represented them in regard to the rights of
possession and ownership and to the substance of the vessel,
the preservation and management of which were entrusted to
his care and vigilance without contemplation of any right in
favor of other persons to whom the use and enjoyment of the
ship might have been granted. Only in regard to this use and
enjoyment was he placed under the orders of the lessees
within the terms and limits of the contract.
The responsibility involved in the present action is that derived
from the management of the vessel, which was defective on
account of lack of skill, negligence, or fault, either of the
captain or of the crew, for which the captain is responsible to
the agent, who in his turn is responsible to the third party
prejudiced or damaged. (Art. 618, Code of Commerce.)

The rule of law laid down by the lower court is the same
international rule adopted by the Congress of Antwerp, and it
is a logical corollary of the precise provisions of the Code of
Commerce now in force.

Therefore, we affirm the judgment appealed from, with the

costs of this instance against the appellant company.

Torres, Mapa, Carson and Willard, JJ., concur.

1. US VS. STEAMSHIP ISLAS FILIPINAS
GR No. 8746. October 30, 1914
1. CUSTOMS ADMINISTRATIVE ACT; VESSELS IN FOREIGN
TRADE; MANIFESTS OF CARGO. — Section 77 of act No, 355
imposes the absolute obligation, under penalty for failure,
upon every vessel from foreign port to have "on board
complete written or typewritten manifests of all her cargo,
signed by the master;" and the law requiring such a manifest
to be kept by the master is not complied with unless the
manifests is true and accurate.
2. ID.; ID.; ID.; LIABILITY OF VESSEL. — It appearing that
the steamship Islas Filipinas arrived at the port of Manila from
the foreign port of Hongkong having on board 918 tins of
prepared opium, of an estimated value of from P35,000 to
P40,000, which did not appear on the ship’s manifest although
the steamer had on board other cargo all of which was duly
manifested as required by law,
2.
3. Held: That the steamship was liable to the penalty
prescribed in section 77 of Act No. 355.
3. ID.; ID.; "CARGO" DEFINED. — The word "cargo" as used
in section 77 of Act No. 355, includes all goods, wares, and
merchandise aboard ship which do not form part of the ship’s
stores.
4. ID.; ID.; LACK OF KNOWLEDGE OF UNMANIFESTED
CARGO. — The lack of knowledge or consent on the part of
the owners of a vessel of a violation of the provisions of
section 77 of Act No. 355, in no wise relieves the vessel of her
liabilities for the penalties prescribe therefor.
DECISION
CARSON, J. :
This is an appeal by the owners of the steamship Islas Filipinas
from a judgment of the Court of First Instance of Manila,
conforming the decision of the Insular Collector of Customs,
imposing a fine of P1,000 on the steamship Islas Filipinas
under the provisions of section 77, and section 313, as
amended, of Act No. 355, for failure to have on board a
complete manifest in the prescribed from of all her cargo.
The facts in this case are not in dispute. It appears that the
steamship Islas Filipinas arrived at the port of Manila from the
foreign port of Hongkong on or about April 15, 1912, and that
she had on board 918 tins of prepared opium, weighing
210.87 kilos, which did not appear on the ship’s manifests.
The estimated value of this opium in Manila was between
P35,000 and P40,000, the streamer had on board other cargo
that the above-mentioned opium, all of which was duly
manifested as required by law, but that portion of her cargo
consisting of 918 tins of opium was not manifested and did not
appear upon any written or typewritten manifest of the cargo
aboard said vessel. The steamship Islas Filipinas was seized by
the customs authorities for having on board unmanifested
contraband cargo in violation of the Customs Administrative
Act; and at a hearing held at the customhouse in Manila, at
which one of her owners, together with his counsel, was
present, the Insular Collector of Customs, after hearing the
evidence, imposed a fine of P1,000 upon the vessel under the
provisions of section 77 of Act No. 355. The facts touching the
discovery and seizure of this unmanifested opium are set forth
as follows in the brief of the appellant:jgc:chanrobles.com.ph
"The authorities having received information that there was
opium on board the boat, the customs officials and the owner
of the steamer made a thorough search of the ship. The
search resulted in finding 918 tins of prepared opium under
some cement in the bottom of a water tank at the bottom of
the boat, and one tin was found concealed under a table top
in the dining room directly over the manhole leading into the
tank in which the 918 tins were found.
"An investigation was made by the owners and they
discharged the captain and all other members of the crew
whom they believed implicated.
"Mr. Fernandez’ testimony on that point is as follows (bottom
of p. 14, bill of exceptions):jgc:chanrobles.com.ph
"‘Q. What, if anything, have you done in reference to the
officers or crew?
"‘A. We discharged the captain, after I was morally convinced
that he had a part in it; I discharged one of the engineers and
the supercargo, and I was going to discharge another officer,
but he had already quit himself.’
"A criminal charge was also filed against Jose Artiaga, the
captain of the ship, and Cecilio Jimenez, another officer of the
ship, charging them with the crime of illegal importation of the
opium mentioned. Said persons were duly tried, convicted and
punished for said offense. (See case No. 8691, Court of First
Instance, Manila.)
"There is no contention that the owners had any knowledge or
were in any wise implicated in this offense, and the testimony
shows that the owners afforded every help possible to search
the ship, and gave the customs officials what little information
they were able to gather from Mr. Fernandez’ chauffeur, who
was on the ship on that trip. (See p. 16, bill of exceptions.)
Not only had the owners no knowledge of the offense, but the
officers, on putting this opium on board, did so in violation of
the instructions of the owners. (See testimony of Ramon
Fernandez, p. 14, bill of exceptions.)
"The captain was a trusted employee of the firm and it was a
surprise to the company that this man should do such a thing.
(See testimony of Ramon Fernandez, p. 15, bill of exceptions.)
"The guilty parties were duly arrested, convicted, and
punished. The owners themselves did all they could to punish
them by discharging them."cralaw virtua1aw library
In the decision of this case the lower court
said:jgc:chanrobles.com.ph
"This is an appeal from an order of the Insular Collector of
Customs imposing a fine upon the appellant for violation of Act
No. 355, section 77, as amended, which provides as
follows:jgc:chanrobles.com.ph
"‘Every vessel from a foreign port or place must, under a
penalty of not exceeding one thousand pesos for failure, have
on board complete written or typewritten manifests of all her
cargo.’
"It is admitted that appellant’s vessel did have on board 918
tins of opium which were not manifested, but it is contended
that these did not constitute cargo because they were placed
on board and concealed there without the knowledge of the
owners. We find no definition of the term ’cargo,’ however,
which limits it to goods known to the owner. On the contrary,
their knowledge is immaterial, and whatever the vessel is
loaded with constitutes the cargo. In order to enforce the law,
it becomes necessary to hold the owners, regardless of their
knowledge; any other rule would lead to all sorts of evasion
and subterfuge, but the general rule. in marine law is to make
the vessel itself liable.
"Neither do we think it was incumbent upon the Collector to
proceed against the master of the vessel. It is true that he and
another official have been prosecuted criminally, but that in no
way bars the present proceeding. The section above quoted
imposes the liability ’on every vessel’ and not upon the master
of the vessel. This provision was strictly followed by the Acting
Collector of Customs in his decision, for not only was the fine
imposed upon the vessel, but its enforcement by seizure of the
same was provided for.
"Finding no error in the decision of the Collector, we have no
alternative but to enforce the same."cralaw virtua1aw library
In discussing the contentions of counsel for the appellant we
adopt as our own the reasoning of the Solicitor-General which
is set forth in his brief on appeal substantially as
follows:chanrob1es virtual 1aw library
The appellant claims that the court erred (1) in holding that
there was no error in the decision of the Collector of Customs;
(2) in not reversing the decision of the Collector; (3) in holding
that the steamer lslas Filipinas and the owners are liable to a
fine under section 303 of Act No. 355 for having on board
unmanifested cargo; (4) in holding that the facts set forth in
the complaint are violations of section 77 of Act No. 355. In
his brief, the counsel or appellant says:jgc:chanrobles.com.ph
"We contend it is very unjust and morally wrong to punish or
hold Fernandez Hermanos liable or responsible for this criminal
act of another, and that unless there is a statute making the
owner legally liable, this case should be reversed."cralaw
virtua1aw library
The question of the propriety of subjecting the owners of a
vessel to an administrative fine for the violation of the
customs-revenue laws is a matter for legislative determination.
The Philippine Legislature has adopted this method of
punishment for the infraction of certain provisions of the
Customs Administrative Act. Far more stringent laws and
regulations have been adopted elsewhere, (See 36 Cyc., 20-
22.) By the general maritime law, vessels are made
responsible for the unlawful acts of their masters and crews;
and this extends even to forfeiture by positive law. (Dobbin’s
Distillery v. United States, 96 U. S., 395, 400.)
In his work on Marine Insurance (7th ed., vol. 1, sec. 250), Sir
Joseph Arnould says: "A shipowner may become liable to pay
large sums in consequence of loss of life, injury to person, or
damage to property caused by the improper navigation of his
vessel."cralaw virtua1aw library
Whether this responsibility of the owners of vessels is based
on the law of agency or on the theory that the vessel (res) is
the guilty thing, is of no special importance. Experience has
demonstrated that the application of such penalties is
necessary for the purpose of protecting the revenues, and the
lives and property intrusted to such common carriers. An able
argument which completely disposes of the alleged injustice
and immorality of imposing this fine upon the appellant in this
case is that delivered by Messrs. Ingersoll and Bradford in
Phile v. The Anna (1 Dallas, U. S., 202), under a statute
providing for the forfeiture of the vessel, wherein it is
said:jgc:chanrobles.com.ph
"That the determination of this cause would certainly produce
consequences of an important nature, and either render the
act of assembly upon which it is founded, a dead letter, or a
productive instrument of public revenue. In governments
differently constituted, where regal pageantry, or military
force, can invite or compel respect and obedience to the law,
little danger is to be apprehended from the occasional
indulgence of learned men in their ingenious and novel
comments upon the sense and expressions of the legislature;
but under a democratical constitution such as ours, should the
people acquire a habit of yielding to logical subtleties and
specious declamation, there is no power to control the evil that
must ensue; the principles of jurisprudence would become
weak and fluctuating, and the virtue and dignity of the
commonwealth would be contaminated and eventually
destroyed. Instead, therefore, of considering how to escape
from the strong expression of the Act before us, it is our duty
to give it the fullest operation that is necessary for suppressing
the mischief to which the legislative attention was originally
directed; and here we cordially embrace the position of our
antagonists, that the meaning of those who framed the law is
the best guide to direct us in carrying it into execution. What
then was the evil complained of, at the time that this act was
made? The atrocious frauds committed upon the revenue.
What was the remedy provided? It could not be merely the
forfeiture of the smuggled goods, as the claimants insinuate,
for that was imposed by an antecedent law; but the truth is,
that every other penalty having proved ineffectual, this statute
was enacted expressly to super add the forfeiture of the vessel
or boat from which the goods should be clandestinely
unladed."cralaw virtua1aw library
In that case the court held that under the law the vessel in
question was liable to forfeiture in case the goods were
unladen from her before due entry, whether the owners were
privy to the transaction or otherwise. In his charge to the jury
the president of the court said: "This has been repeatedly
called a hard law; but the truth is, that revenue laws are of a
harsher nature than any others, and necessarily so; for, the
devices of ingenious men render it indispensable for the
legislature to meet their illicit practices with severer
penalties."cralaw virtua1aw library
The appellant’s contention that the provisions of section 77 of
Act No. 355 apply only to cases where a vessel does not have
a manifest on board, and, that section 303 of said Act is
applicable in cases in which a vessel has on board cargo not
included in her manifests, is not well founded. Section 303
imposes certain duties upon the master of a vessel in
connection with the administration of the customs regulations;
and provides penalties in case of failure to perform them; and
the vessel or its owners are not made responsible except as
provided in section 343 of the Act. Section 77 imposes the
absolute obligation, under penalty for failure, upon every
vessel from a foreign port to have "on board complete written
or typewritten manifests of all her cargo, signed by the
master." Where the law requires a manifest to be kept or
delivered, it is not complied with unless the manifest is true
and accurate. (See Phile v. The Anna, supra.)
Another contention of the appellant is that the opium in
question is not "cargo" within the meaning of the custom laws.
The term "cargo" is not specifically defined in the Customs
Administrative Act, but from the language used in several of its
provisions it is clear that the word "cargo" as used in the
section under consideration includes all goods, wares, and
merchandise aboard ship which do not form part of the ship’s
stores.
Black’s Law Dictionary defines the term "cargo" as follows:
"The load or lading of a vessel; goods and merchandise put on
board a ship to be carried to a certain port.
"The lading or freight of a ship; the goods, merchandise, or
whatever is conveyed in a ship or other merchant vessel. (See
1 Mason, 142; 4 Pick., 429; 9 Metc. (Mass.) , 366;103 Mass.,
406.)
"A cargo is the loading of a ship or other vessel, the bulk of
which is to be ascertained from the capacity of the ship or
vessel. The word embraces all that the vessel is capable of
carrying. (3 Rob. (N. Y.) , 173.) The term may be applied in
such a sense as to include passengers, as well as freight, but
in a technical sense it designates goods only."cralaw virtua1aw
library
would become us to prefer the former. But if the policy of the
legislature seems to bear hard on the subject, we are not to
judge and determine upon its propriety (that is a matter for
deliberation of those who made the law), and however, unjust
it seems, we must acquiesce, or there must be a dissolution of
society. It must certainty affect every humane man to see the
innocent suffer; but in society this is not strange or
uncommon; and the distinction may property be taken
between criminal and civil cases. the law never punishes any
man criminally but for his own act, yet it frequently punishes
him in his pocket for the act of another."cralaw virtua1aw
library
The judgment entered in the lower court should be and is
hereby affirmed, with the costs of this instance against
the Appellant.

The following definitions of the word "cargo" are found in the

cases:jgc:chanrobles.com.ph

"The word ’cargo’ ex vi termini, means the goods on board of

the vessel." (Seamans v. Loring (U. S.) , 21 Fed. Cas., 920,
924.)

"A cargo is the lading of a ship or other vessel, the bulk or

dimension of which is to be ascertained from the capacity of
the ship or vessel; and, where the name of the ship or vessel
is in the contract, her capacity for carrying or the bulk of her
cargo need not be stated for the word ’cargo’ embraces all
that the vessel is capable of carrying." (Flanagan v. Demarest,
26 N. Y. Sup. Ct. (3 Rob.) , 173, 181.)

"The cargo is the lading of the vessel, and, though by bribery

or craft, some articles might be introduced in the hold, without
the knowledge of the owners or the captain, yet everything
which is put on board the vessel is, in general, comprehended
in that description." (Phile v. The Anna, 1 Dallas (U.S.) , 202.)

The present case raises a question of great importance to the

practical and successful working on the Customs
Administrative Act, and its decision will determine whether
section 77 of said Act is to be given force and effect ands is to
have any real value as a provision designed to prevent frauds
upon the public revenues. If the owners of vessels were
allowed to escape the penalty provided for this fraud or
attempt to defraud the revenues by setting up pleas of
innocence and ignorance, it is clear that the legislative
intention would be defeated. as was said in the case of Phile v.
The Anna (supra):jgc:chanrobles.com.ph

"Then, there remains only the great point upon which the
counsel for the claimnants seem chiefly to rely, to wit, their
innocence and ignorance with respect to the fraud that has
been committed. There is no evidence, indeed, that tends to
show that the owners of the ship meant to do anything
unfairly; but, on the contrary, that the mate brought the goods
hither with the avowed intention to defraud them as well as
the State. The question then recurs, what difference does it
make, whether they knew of it or not? Here is a positive law
that directs a due entry of all goods, wares, and merchandise
imported into this State, under certain penalties, and one of
them is the forfeiture of the vessel or boat from which they
are unladed It does not speak of the knowledge of any person,
but seems to be studiously worded to avoid that construction.
It is not a novel law, through perhaps it is stricter now than
formerly; for, in England, it has long existed, and before the
Revolution it was known in Pennsylvania. the legislature has
thought that nothing else bound to obedience. If indeed, the
law was doubtful or latitudinal ,admitting one interpretation,
which would be just, and another which would be unjust, it
2. COMPAGNIE FRANCO- INDOCHINOISE VS.
DEUTCH
GR No. 11169. March 31, 1917
For a statement of this case on appeal we cannot do better
than to set forth the substance of the carefully prepared
opinion in the court below, and the assignments of error by
counsel on the appeals brought here by both parties.
This is an action by the Compagnie Franco-Indochinoise, a
corporation organized and existing under the laws of the
Republic of France, against the Deutsch-Australische
Dampschiffs Gesellschaft, a corporation organized and existing
under the laws of the Empire of Germany, asking that a
receiver be appointed to take possession of the cargo of the
German steamship Esslingen, consisting of 126,028 sacks of
rice-meal and 600 wooden ventilators, and to dispose of the
same and to hold the proceeds thereof subject to the order of
the court; and also praying that a judgment be given in favor
of the plaintiff and against the defendant for the delivery of
the cargo, or for the value thereof, if such delivery cannot be
made, and for damages and costs.
Pursuant to a stipulation of the parties, the court below, on
October 16, 1914, appointed as joint receivers in this cause
Messr. H T. Fox and D. H. Jacoby to take possession of the
cargo of the Esslingen, consisting of 116,808 sacks of white
rice-meal, 9,220 sacks of cargo-meal, and 600 wooden
ventilators, and to sell and dispose of the same, and to hold
and deposit the proceeds of such sale subject to the further
order of the court.
The defendant, by its answer, admitted that the plaintiff is a
corporation organized and existing under the laws of the
Republic of France, and is represented in the Philippine Islands
and the city of Manila by Mr. Paul Emile Nestor Colas; that the
defendant is a corporation organized and existing under the
laws of the Empire of Germany, and is represented in the
Philippine Islands, in the city of Manila, by Behn, Meyer &
Company (Limited), and by Captain Sparmann, master of the
steamship Esslingen, then in the port of Manila.
The defendant also admitted by its answer the allegations of
the plaintiff that on the 9th day of June, 1914, in the city of
Paris, France, plaintiff and defendant executed in writing a
contract of charter party whereby defendant undertook that
the German steamship Esslingen should proceed to the port of
Saigon, in the French colony of Indo-China, and there load a
cargo of rice-meal, belonging to plaintiff, not exceeding seven
thousand tons.
On January 22, 1915, the parties signed and filed a statement
of facts as follows:
"It is stipulated and agreed by the parties in the above action
through their respective attorneys that the following are the
facts in this action in addition to those admitted by the
pleading, viz:
"1. That the contract of the charter party referred to in
paragraph 2 of the complaint and paragraph 2 of the answer is
as is shown by the copy thereof hereto attached, marked
Exhibit A, which is made a part of this stipulation.
"2. That the steamship Esslingen is and at all times herein
mentioned has been a steamship owned by the defendant and
registered in Germany, sailing under the German flag; that on
the first day of August, 1914, the said steamship was in the
French port of Saigon engaged in loading a cargo of rice-meal
belonging to plaintiff, in accordance with the terms of the
charter party Exhibit A hereto attached; that on or before the
said first day of August the master of the said steamship
received telegraphic instructions from the defendant to
proceed to the port of Manila in the Philippine Islands and
there await further orders, the instructions being given on
account of the threatening aspect of war between Germany
and France; that on the said first day of August the master of
the said steamship delivered to plaintiff a letter, a copy of
which is hereto attached, marked Exhibit B and is made a part
of this stipulation; that on the same day the plaintiff delivered
to the master of the said steamship a letter in answer to the
said Exhibit B, a copy of which marked Exhibit C is attached
hereto and made a part of this stipulation; that the said
steamship remained in the port of Saigon and continued to
load said cargo and completed the loading of the same on or
before the 4th day of August, 1914; that on the same fourth
day of August the said steamship left the port of Saigon for
the port of Manila, pursuant to the aforesaid instructions from
the owners; that plaintiff at the time of the departure of the
said steamship from Saigon had full knowledge of the intention
of her master to proceed to Manila, plaintiff's agents in Saigon
being also the defendant's agents, and at the instance of the
master, plaintiff through its agents, secured a bill of health and
other necessary clearance papers for the voyage of the
steamship to Manila; that war between the Republic of Franc
and Empire of Germany began on the third day of August,
1914, and has continued from that date to the present time;
that neither the master of the said steamship nor any other
representative thereof or any other person sought to obtain
from the French authorities at the port of Saigon a lassez
passer of clearance, or other permission to proceed from
Saigon to the ports of Liverpool, England, and Hamburg,
Germany, or either of them, and that at the time of said
steamship's leaving Saigon for Manila it was understood
between the plaintiff and the defendant that the steamship
should proceed only to Hamburg and the port of Liverpool was
to be left out; that if the said steamship was justified in
seeking refuge in a neutral port under the conditions existing,
Manila was a reasonable and proper port of refuge; and that
the rice-meal and cargo-meal constituting the cargo of the said
steamship is a food product used principally for animals.
"3. That the said steamship arrived at the port of Manila from
Saigon in due time and has since remained and still remains in
the said port of Manila; that the said cargo if delivered at its
destination, Hamburg, as contemplated by the charter party,
Exhibit A, would have been worth at such place at least its
value at the time and place of embarkation, plus the freight
from Saigon to Hamburg.
"4. That on the 14th day of September, 1914, and at other
times thereafter up to the time of filing of the complaint
herein, plaintiff demanded delivery of the cargo of the said
steamship from the master, and that defendant's agent has at
all times been willing to deliver said cargo upon deposit in cash
of the full amount for freight from Saigon to destination as
stated in the charter party, amounting to nearly P70,000,
Philippine currency, and has refused to deliver said cargo
except upon the making of such deposit, and that plaintiff has
at all times refused to deposit the freight charges as aforesaid;
that the cash deposit was required in order to insure the
payment of whatever freight might be found due upon
adjustment under the terms of the charter party.
"5. That the receivers appointed by this court in this action
have taken possession of the cargo of said steamship and
have sold the same for P61,154.58; that in making such sale
the receivers have necessarily incurred expenses as will be
shown by their report, and are entitled to fees which may be
fixed by the court for their services; that the net proceeds of
the sale of the cargo to be determined by the deduction from
the aforesaid gross proceeds and the expenses and fees and
fees of the receivers is the true and fair value of the cargo of
the said steamship in the port of Manila.
"6. It is further stipulated that without the introduction of
testimony the judgment of the court may be entered upon the
questions of law arising from the foregoing stipulation and the
pleadings in the above entitled action."
On the same day, by stipulation of the parties, the defendant
filed an additional and supplemental answer, alleging
substantially as follows: (1) That since the arrival of the
steamship Esslingen in Manila Bay; it had been unable to
resume its voyage or to leave this port of refuge on account of
conditions following the declaration of war and now existing,
and that the plaintiff-defendant had incurred costs and
expenses of account of coming into and remaining in this port
of refuge as itemized in the answer, aggregating the sum of
P26,116.98; (2) that the receivers of the cargo of the
steamship Esslingen had sold the cargo for the sum of
P61,154.58, and that defendant claimed a lien for the amount
of costs and expenses as set forth in paragraph 1 against the
proceeds of the sale of the cargo, and prayed that the lien be
determined by way of adjustment of liability through general
average of all entities interested in the adventure as evidenced
by the charter party, a copy of which was attached to and
made a party of the supplemental answer, and that such
general average should be determined under the York-
Antwerp Rules as provided in the charter party; (3) that the
whole of the expenses and costs incurred by the defendant as
set forth in paragraph 1 of the supplemental answer was still
due from plaintiff to defendant by way of general average
charges against the cargo of the steamship, of which cargo
plaintiff alleged itself to be the owner; (4) that the
steamship Esslingen was still unable to resume its voyage
under the charter party owing to the conditions of war which
still existed and that the defendant was unable to state when
such voyage could be resumed, and that other and further
expensed and costs would be incurred by the plaintiff in
addition to those set forth, which will be a charge against the
cargo to the plaintiff as the alleged owner thereof by way of
general average, and the amount of such future and additional
costs and expensed the defendant was then unable to state;
(5) that there was justly due and owing from plaintiff to
defendant for freight on the cargo of the Esslingen the sum of
P68,376.04 in accordance with the terms of the contract
between the plaintiff and defendant as appears in the charter
party, no part of which freights had been paid or assured in
any way; that this amount constitutes a lien upon the cargo
and the product of the sale thereof by way of general average
between all the entities in the adventure undertaken in
accordance with the terms of the charter-party, and that the
general average between the parties had not yet been
adjusted.
The defendant prayed that judgment be entered against the
plaintiff for the sum of P94,493.02 with legal interest thereon,
and that such sum be declared a lien upon the proceeds of the
sale of the cargo as made by the receivers theretofore
appointed.
Thereafter, on February 13, 1915, the defendant filed a
motion to strike out that portion of paragraph 6 of the
stipulation of facts made by counsel for both parties under
date of January 22, 1915, which states that without the
introduction of testimony judgment may be entered, and that
the defendant be allowed to present evidence in relation to
past and future expenses as alleged in defendant's additional
and supplemental answer which was filed by stipulation of the
parties.
This motion to strike out a portion of the agreed statement of
facts was overruled by the court below on the ground that the
court had no power or authority to strike out any part of an
agreed statement of facts on the motion of one party without
the consent of the other; but the court permitted the
defendant to present evidence in relation to past and future
expenses as alleged in defendant's additional and
supplemental answer for the reason that the court was of
opinion that there was no basis for the rendition of judgment
upon the allegations of the answer without the taking of
evidence or the filing of an additional agreed statement of
facts.
The evidence introduced upon the additional and supplemental
answer was substantially as follows:
It was stipulated that the amount of the freight to which
reference is made in the stipulation of facts as about P70,000
is the amount of P68,376.04.
Captain Sparmann, master of the steamship Esslingen,
testified over the objection of the plaintiff, as to which the
ruling of the court was reserved, that since coming to Manila
he had incurred expenses in the maintenance of the crew and
of the vessel itself, as shown by Exhibit A, which is a
statement of expenses amounting to P49,501.87 incurred from
the time the ship put in at Manila Bay up to the 15th of April,
1915; the total of Exhibit B for wages being the first item in
Exhibit A, Captain Sparmann claimed a lien on the ship's cargo
on account of these expenses. He said that it would be
impossible for the ship to leave Manila harbor during the
European war, and that future expenses would be incurred for
which a lien was also claimed.
Exhibits A and B were offered in evidence against the
objection of the plaintiff that they tend to prove general
average expenses, although the pleadings and the stipulation
of facts show that no general average had been claimed and
no lien for general average had been claimed by the
defendant; and, as plaintiff insisted, the general average could
in no event be charged against the cargo after demand was
made for the delivery of the cargo, and in no event could
charges be attributed to the cargo after it was actually
disposed of.
Upon consideration of all the facts in evidence and of the
arguments of counsel, the authorities cited and other
authorities, pertinent to the question at issue in this cause, the
trial court set forth the following conclusions as to the law:
"1. That the court has jurisdiction of the parties and of the
subject-matter in this action.
"2. That it was the duty of the defendant under the terms of
the charter party in evidence, to transport the cargo in
question from Saigon to Hamburg or Liverpool, via Canal,
under steam all the way (unless disabled), or near thereunto
as the might safely get, and there to deliver the said cargo
(always afloat) in any safe dock or berth which the charterers
or their agents might appoint.
"3. That the freights on the cargo having been made payable
on delivery at Hamburg or Liverpool, and the transportation of
the cargo having been abandoned by defendant at Manila, no
part of the freight was earned without such delivery, in the
absence of an agreement that the shipowner should become
entitled to a proportion of the freight on delivery of the cargo
in a port of refuge (Carver on Carriage of Goods by Sea,
section 307.)
"4. That the fear of the owners and master of the seizure or
capture of the said steamship Esslingen by one of the
belligerent powers at war with Germany was not the result
of force majeure and was not a legal or sufficient excuse for
having fled with a French cargo from Saigon, a French port, to
Manila, or for the failure of the defendant to transport and
deliver the said cargo to the consignees at Hamburg or
Liverpool, or for the failure to tranship the same and cause it
to be delivered in accordance with the terms of the charter
party.
"5. That the provision in the charter party for the delivery of
the cargo at Hamburg and of Liverpool. "or so near thereunto
as she may safely get" is no excuse of authority for entering
Manila Bay to avoid the seizure or capture of the ship by an
enemy of Germany, as that clause was intended only to justify
the master of the ship in discharging the cargo at some
outside anchorage, when by reason of her draft or
obstructions to navigation she could not reach the usual whart
or anchorage of a designated port. (See Meissner vs. Brun,
128 U. S., 47, 32 Law Ed., 496.)
"6. That there can be no general average unless there has
been a voluntary and successful sacrifice of a part of the
maritime adventure for the benefit of the whole adventure and
for no other purpose; in other words, there must be an
intentional sacrifice of a part of the property on board the
vessels for the purpose of saving the remained from
a common peril, or extraordinary expenditures must be
incurred for the purpose of saving the property in peril .
(McAndrews vs. Thatcher, 3 Wall., 347, 366; The Star of Hope
vs. Annan. 9 Wall., 203, 228; Fowler vs. Rathbone, 12 Wall.,
102, 114; Hobson vs. Lord, 92 U. S. 397, 404; Ralli vs. Troop,
157 U. S., 356, 393; Barnard vs. Adams, 10 How., 270, 303;
Philippine Code of Commerce, articles 806, 808, 811 and 812.)
"7. That inasmuch as the French cargo was absolutely safe in
the French port of Saigon, and the deviation of the
steamship Esslingen from her intended voyage to Hamburg
and Liverpool and her entry into Manila Bay were induced by
the fear of the captain of the vessel by one of the belligerents
at war with Germany, the alleged peril which induced the
master of said vessel to come to Manila was not common to
both ship and cargo as required by the York-Antwerp Rules as
a condition precedent to the levying of a general average; that
this cargo under the law of nations was not subject to
confiscation by any enemy of Germany, and the cargo not
having been imperiled, the expenses and loss to the ship and
its owners occasioned by the deviation and by taking refuge in
Manila Bay during the European War were not for the benefit
of the cargo, but for the sole benefit of the ship and its crew;
and therefore the cargo should not in any event be called
upon for contribution under general average.
"8. That is was the duty of the defendant under the charter
party to transport said cargo to Hamburg or Liverpool in the
steamer Esslingen but if, for any reason, the transportation
could not be effected in that vessel within a reasonable time,
owing to the perishable nature of the cargo, it was the legal
duty of the owners of said vessels and of the master thereof to
make the shipment in another vessel. (Carver on Carriage of
Goods by Sea, sections 304, 305.)
"9. That the defendant is liable to the plaintiff for the damage
caused in not having delivered the said cargo to Hamburg or
Liverpool in accordance with the terms of the charter party;
and the transportation of the cargo having been abandoned by
the defendant at Manila, and the defendant not having earned
the freight money, the value of the cargo at Saigon must be
that basis for determining the damages suffered by the
plaintiff.
"10. That since the report of the receivers appointed by this
court, upon the agreement of the parties, to sell said cargo at
Manila and to hold the proceeds subject to the order of the
court, shows that said cargo was sold for the gross sum of
P61,154.58, with expense of the sale amounting to P267.89,
and the court having allowed the receivers the sum of
P3,043.34 for their services in making said sale, there now
remains subject to the order of the court the net sum of
P57,823.35.
"11. That it having been alleged in the complaint and admitted
in the answer that the value of the cargo at Saigon was the
equivalent of P145,600.91, Philippine currency; and it having
been agreed in the statement of facts that the value of the
cargo in Manila is the price for which it was sold by the
receivers, P61,154.58 less the receivers' fees and expenses as
above stated, the court finds that the plaintiff is damaged by
the acts of the defendant complained of in the amount of the
difference between the agreed value of the cargo at Saigon
(P145,600.91) and the net proceeds of the sale in Manila
(P57,823.35), or P87,777.56; but the court further finds that
by paragraph 29 of the charter party the penalty which must
be imposed in case of nonperformance of said arguments is
the amount of the damages proved, provided same do not
exceed the estimated amount of freight which in this case is
P68,376.04."
Therefore, let judgment be entered in this case in favor of the
plaintiff and against the defendant for the said sum of fifty-
seven thousand eight hundred and twenty-three and 35/100
pesos (P57,823.35) less any commissions of the clerk of this
court, free and clear of all liens, claims or charges asserted by
the defendant in this cause, with legal interest on said sum
from the date of the filing of the complaint in this case until
paid; and further, that the plaintiff have and recover of and
from the defendant in this cause the sum of sixty-eight
thousand three hundred and seventy-six and 4/100 pesos
(P68,376.04) as and for actual damages suffered by the
plaintiff by the defendant's breach of charter party in evidence,
with interest thereon from the date of the filing of the
complaint in this case until paid.
The defendant's cross complaint and counterclaim is hereby
dismissed with the costs of this case against the defendant.
It is so ordered.
Counsel for the defendant-appellant made the following
assignment of errors on appeal:
1. The court erred in finding that it has jurisdiction of the
persons and subject-matter of this action.
2. The court erred in finding that no part of the freight became
due until delivery of the cargo at Hamburg or Liverpool and, in
the absence of an agreement, that the shipowner would not
be entitled to a proportion on delivery at a port of refuge.
3. The court erred in finding that the fear of the owner and
master of the S. S. Esslinger was not the result of force
majeure and was not a legal or sufficient excuse for leaving a
French port or for failing to deliver the cargo to the consignee
at the ports of delivery or to tranship same and deliver in
accordance with the charter party.
4. The court erred in finding that the provisions of the charter
party for the delivery of cargo at Hamburg or Liverpool or so
near thereunto as she may safely get was no excuse for
entering Manila Bay to avoid capture.
5. The court erred in finding that the entry of S.
S. Esslingen into Manila Bay to avoid capture was not ground
for general average between the steamship, the cargo and
freight.
6. The trial court erred in finding that the entry of the S.
S. Esslingen into Manila Bay was not caused by peril common
to both ship and cargo under the York-Antwerp Rules or any
other.
7. The court erred in finding that the defendant was bound to
transport the cargo in another vessel if it could not be done by
the chartered vessel, when no other vessels were available.
8. The court erred in finding that the defendant was liable for
damages for not having delivered the cargo at Hamburg or
Liverpool.
9. The court erred in finding that the transportation of the
cargo had been abandoned at Manila and that no freight
having been earned the value of the cargo at Saigon created
the basis for the damages suffered by the plaintiff.
10. The court erred in finding, as set forth in paragraph 10 of
its decision, that any sum of money as proceeds of the sale of
cargo was subject to the order of the court.
11. The court erred in finding that the plaintiff was damaged
by the acts of the defendant in the sum of the difference
between the value of the cargo at Saigon and the net
proceeds from the sale thereof in Manila.
12. The court erred in entering judgments in any sum
whatever in favor of the plaintiff and against the defendant
before general average had been adjusted between ship, the
cargo and freight, as provided by the terms of the charter
party.
13. The court erred in dismissing defendant's cross complaint
and counterclaim.
Counsel for the plaintiff appellant made the following
assignments of error:
1. The court found that paragraph 29 of the charter party,
Exhibit A of the agreed statement of facts, limits defendant's
liability for damages to the estimated amount of freight,
P68,376.04.
2. The court ordered judgments for damages in the sum of
P68,376.04 instead of P87,777.56.
xxx           xxx           xxx
From a comparison of the foregoing statement of this case
with the statement of the case set forth in the opinion just
filed in the case of the Sambia (Compagnie de Commerce et
de Navigation d'Extreme Orient vs. The Hamburg Amerika
Packetfacht Actien Gessellschaft, (p. 590, ante), it will be seen
that the controlling facts in both cases are strikingly similar,
with the exception of the facts touching the disposition of the
cargoes of the two vessels by their respective master after
they had taken refuge in the port of Manila.
Our rulings upon the various contentions of counsels in the
former case may, therefore, be regarded as renewed with
relation to like contentions in the case at bar, except only as to
the contention that the shipowner should be held liable for the
damages suffered by the cargo aboard the Esslingen while the
vessel lay in Manila Bay, because of the failure of the master
to proceed with reasonable promptness to take proper
measures for the disposition of this perishable cargo by sale or
otherwise, and because of his refusal to deliver it to its owner
when lawful demand was made therefor.
In the case of the Sambia it appeared that the vessel arrived
from Saigon in Manila Bay on the 8th of August, 1914; that
two telegrams were dispatched by the local agent of the
shipowner and of the master, to the duly authorized
representative of the cargo owner in Saigon, one on the day of
arrival and another a week later, advising him of the situation;
that these cablegrams were not delivered presumably because
of the interruption of cable communication following the
outbreak of war; that later two letters were forwarded but
remained unanswered until after the master had sought and
secured judicial authority to sell the cargo — the answer when
it was received being a flat refusal on the part of the Saigon
representative of the cargo owner to give any instructions or
assume any responsibility; that on September 4, 1914, the
master of the Sambia had a survey made of the cargo, by a
qualified marine surveyor, who reported that it "showed signs
of heating and being infested with weevils" and recommended
that it be sold in the interest of all concerned; that on
September 10, 1914, the master not having been able to get
into communication with the cargo owners, or their
representative in Saigon, sought and secured judicial authority
to sell the cargo; and that the cargo was sold under judicial
authority in accordance with the provisions of local law made
and provided in such cases.
In the case of the Esslingen which arrived in Manila Bay on the
7th of August, 1914, it does not affirmatively appear that the
master took any measures whatever looking to the protection
of the interests of the cargo owners; and on the contrary, it
appears that although the duly authorized representative of
the cargo owner was in Manila, and made demand upon the
master for delivery of the cargo on September 14, 1914, "and
at other times thereafter, up to the time of the filing of the
complaint in this action" on October 15, 1914, the master and
the local agent of the shipowner refused to make delivery
without a deposit in cash of the full amount of freight charges
agreed upon in the charter party, amounting to nearly
P70,000, "to insure the payment of whatever freight might be
found due upon adjustment under the terms of the charter
party;" that not until the day following the filing of the
complaint in this action, praying for damages and the
appointment of a receiver to take possession and dispose of
the cargo, that is to say not until October 16, 1914, seventy
days after the arrival of the vessel in the port of refuge, and
then only upon stipulation of counsel in open court, were
jointly receivers appointed to sell the cargo and to hold and
deposit the proceeds subject to the order of the court.
In our opinion in the case of the Sambia we discussed at some
length the duty and the liability of the master and the
shipowner as to the disposition of her cargo after the vessel
had taken refuge in Manila Bay, and we held, substantially,
that the master had complied with the duty resting upon him,
in the absence of the owner of the cargo, to sell this
perishable cargo which had been intrusted to him under a
contract of affreightment which he found himself unable to
execute; and that we could not say, from the facts disclosed
by the record, that he had taken an unreasonable time in
deciding upon the course he finally adopted, so as to charge
the shipowner with damages resulting from the deterioration
of the cargo while on board the vessel in Manila Bay.
In the case at bar, however, we think that under the doctrine
laid down in the case of the Sambia, the master, and therefore
the shipowner, must be held responsible for the damages
suffered by the cargo aboard the Esslingen while it lay in
Manila Bay. Not only did he fail and neglect to take any
measures looking to the sale of the cargo, but he actually
refused to deliver this perishable cargo to its owner upon
demand, after it has lain in the hold of the vessel for about
five weeks, unless the cargo owner would comply with his
wholly unjustifiable requirement of a deposit of P70,000 cash,
on account of freight to which he had not the shadow of a
lawful claim; and he persisted in that refusal until legal
proceedings were instituted after the perishable cargo had lain
in the hold of the vessel for more than two months under the
rays of a tropical sun, and as was admitted in argument,
without adequate ventilation, it being impossible to secure
such ventilation while the vessel lay at anchor.
In the light of these facts, it would seem to be unnecessary to
add anything to what was said in our former opinion in order
to sustain our ruling in the case at bar, but it may not be
amiss to insert here the following citations from Carver's
Carriage of Goods by Sea, 5th ed., which set forth the doctrine
and the ground upon which it rests in the clearest and most
explicit terms:
309. The master is entitled to delay for such a period as may
be reasonable under the circumstances, before deciding on the
course he will adopt. He may claim a fair opportunity of
carrying out the contract, and earning the freight, whether by
repairing or transhipping. (See The Blenheim [1885] 54 L. J.,
Adm. 81; 10 P. D., 167; 5 Asp. M. C., 522.) Should the repair
of the ship be undertaken it must be proceeded with diligently;
and is so done, the freighter will have no ground of complaint,
although the consequent delay be a long one. Unless, indeed,
the cargo is perishable, and likely to be injured by the delay.
Where that is the case, it ought to be forwarded, or sold, or
given up, as the case may be, without waiting for the repairs,
or proper steps, if such are possible, taken to prevent the
cargo suffering by the delay. Any failure on the part of the
shipowner or master to perform his duty in these respects will
be ground for an action by the owner of the cargo. (Hansen
vs. Dunn [1906], 11 Com. Ca., 100; 22 T. L. R., 458.)
304a. A shipowner, or shipmaster (if communication with the
shipowner is impossible), will be allowed a reasonable time in
which to decide what course he will adopt in such cases as
those under discussion; time must be allowed to him to
ascertain the facts, and to balance the conflicting interests
involved, of shipowner, cargo owner, underwriters on ship,
cargo, and freight. But once that time has elapsed, he is
bound to act promptly according as he has elected either to
repair or abandon the voyage, or tranship. If he delays, and
owing to that delay a perishable cargo suffers damage, the
shipowner will be liable for that damage; he cannot escape
that obligation by pleading the absence of definite instructions
from the owners of cargo or their underwriters, since he has
control of the cargo and is entitled to elect. Thus, in Hansen
vs. Dunn ([1906] 11 Com. Ca., 100; 22 T. L. R., 458) the
shipowner was held liable for damage suffered by a cargo of
maize, which he had kept in the ship's hold during an
unreasonable delay in electing what course he should adopt.
"If instead of promptly transhipping, he preferred to negotiate
for that to which he was not entitled, a pro rata freight on
discharge of the maize at Cape Town, he had no right in order
to obtain that advantage to keep the goods meanwhile where
he knew that they were daily suffering damage and might
thereby become unmerchantable. If he wished, for his own
advantage, to delay action, it could only be done, in common
fairness, by his incurring the expense involved in his doing his
best for the goods by discharging them out of The
Closeburn's hold." (Kennedy, J., 11 Com. Ca., at p. 105.)
It is impossible, however, in the condition of the record
brought here on appeal, to determine the amount of the
deterioration and consequent loss in value of the cargo which
should be attributed to its detention on board the Esslingen in
Manila Bay. The value of the cargo in Saigon was admittedly
307,214.44 francs or P145,600.91, and its "true and fair value"
in the condition in which it was found at the time when it was
sold in Manila was expressly agreed to be the net proceeds of
the sale, that is to say P57,823.35; but how much of this
heavy loss in value was due to the deterioration in the quality
of the cargo while it lay in the hold of the vessel in Manila Bay,
we are unable to determine from the agreed statement of
facts upon which the case was submitted. There is not
stipulation as to what this cargo of rice-meal would have
brought had it been thrown on the market in Manila in the
condition in which it was when it was brought into Manila Bay,
and before it began to deteriorate as a result of its detention
on board the vessel, nor is there a stipulation as to the market
value in Manila of a similar cargo rice-meal in good condition
at the time when the damaged cargo was sold. We are unable
to say, therefore, how much of the loss should be attributed to
deterioration in quality; and how much should be attributed to
a difference in values between the undamaged cargo of rice-
meal in Saigon and a like cargo of undamaged rice-meal in
Manila Bay. In the absence of any evidence of record on which
to base a finding as to what the cargo would have brought had
it not deteriorated in Manila Bay, we are wholly unable to fix
the damages for which the shipowner should be held
responsible, unless we assume without proof a value to be set
on undamaged rice-meal in Manila which neither party
included or intended to include in the agreed statement of
facts upon which the case was submitted for adjudication.
Under our rulings in the Sambia case, the owners of
the Esslingen are not liable for losses resulting from the flight
of that vessel from Saigon and the carrying of the cargo to
Manila; so that if the undamaged cargo was worth less in
Manila Bay than in the port of Saigon, the loss must be born
by the cargo owner. As we have already indicated, the
measure of the damages for which the shipowner can be held
responsible is the amount of the deterioration of the cargo in
Manila Bay, he being held responsible therefor, because of the
master's failure to take prompt measures looking to the sale of
this perishable cargo; and because of his wholly unjustifiable
refusal to turn it over to its owners, on demand, after the
voyage contemplated in the charter party had been
abandoned.
Since we must reversed so much of the judgment entered in slight way. Moreover, it is well-known as a matter of
the court below as allows damages in the sum of P57,823.35 commercial history that the value of rice in Saigon never
for the alleged breach of the contract to transport the cargo differs very seriously from the value in Manila
from Saigon to Dunkirk or Hamburg, and are unable from the
agreed statement of facts to fix the amount of the damages The majority of the court believing, however, that the case
which should be allowed because of the failure of the master, should be returned, I do not dissent.
after arriving in Manila Bay, to turn over the cargo to its
owners and "to take such measures in the interests of the
shipper as might reasonably be required of a prudent man
under the existing conditions," we are of opinion that a new
trial should be allowed on this breach of the case.

Since we would not hesitate, upon the record now before us,
to fix the amount of the damages suffered by the shipper as a
result of the deterioration of the cargo in Manila Bay at the
difference between the proceeds of the sale of the damaged
cargo and the amount which could have been gotten for such
a cargo of rice-meal in an undamaged condition in Manila Bay
at the time when the damages cargo was sold, if this latter
amount could be determined from the record, it will make for
the convenience of the parties and an early termination of this
litigation, to limit the scope of the inquiry on the new trial to
the determination of this latter amount, judgment to be
entered, thereafter, in conformity with the doctrine of liability
herein announced.

We conclude that so much of the judgment entered in the

court below as provides for the delivery to the plaintiff of the
sum of P57,82.35, the net proceeds of the sale of the cargo of
the Esslingen now on deposit subject to the order of the court
below, less commissions of the clerk of that court, but free
and clear of all liens, claims or charges asserted by the
defendant in this cause should be affirmed; but that so much
thereof as provides for the recovery of P68,376.04, with
interest, as and for actual damages suffered by the plaintiff by
the defendant's breach of the charter party, should be
reversed; and that so much thereof as provides for the
recovery of the legal interest upon the amount of the proceeds
of the sale of the cargo should be modified by substituting
therefor a provisions for the recovery of any interest
allowances which may have accumulated in any bank or other
institution wherein the said net proceeds of the sale of the
cargo may have been deposited subject to the order of the
court, and thus modified should be affirmed; and that the
record should be returned to the court wherein it originated
with instructions to grant a new trial, wherein the inquiry will
be limited to the determination of the amount which could
have been gotten for the cargo taken on board in Saigon, is
such cargo had been offered for sale in an undamaged
condition in Manila Bay at the time when the damages cargo
was sold, judgment to be entered, thereafter, in conformity
with the doctrine of liability hereinbefore announced, without
costs in both instances. So ordered.

Torres, Trent and Araullo, JJ., concur.

Separate Opinions

MORELAND, J., concurring:

I should prefer to determine the case here and now upon the
theory that the value of the rice as stipulated was the value
accepted and acted upon by all parties throughout the case as
the basis for the computation of damages, was accepted and
acted upon by the court as the basis of its judgment, and that
no party has, on this appeal, questioned its correctness in the
3. ROBLES VS. LIZARRAGA HERMANOS
GR No. 10152, Mar 29, 1917
This action was instituted in the Court of First Instance of
Occidental Negros by Zacarias Robles against Lizarraga
Hermanos, a mercantile partnership organized under the laws
of the Philippine Islands, for the purpose of recovering
compensation for improvements made by the plaintiff upon
the hacienda "Nahalinan" and the value of implements and
farming equipment supplied to the hacienda by the plaintiff, as
well as damages for breach of contract. Upon hearing the
cause the trial court gave judgment for the plaintiff to recover
of the defendant the sum of P14,194.42, with costs. From this
judgment the defendant appealed.
It appears that the hacienda "Nahalinan," situated in the
municipality of Pontevedra, Occidental Negros, belonged
originally to the spouses Zacarias Robles and Anastacia de la
Rama, parents of the present plaintiff, Zacarias Robles. Upon
the death of Zacarias Robles, sr., several years ago, his widow
Anastacia de la Rama was appointed administratrix of his
estate; and on May 20, 1913, as widow and administratrix, she
leased the hacienda to the plaintiff, Zacarias Robles, for the
period of six years beginning at the end of the milling season
in May, 1915, and terminating at the end of the milling season
in May, 1920. It was stipulated that any permanent
improvements necessary to the cultivation and exploitation of
the hacienda should be made at the expense of the lessee
without right to indemnity at the end of the term. As the place
was in a run-down state, and it was foreseen that the lessee
would be put to much expense in bringing the property to its
productive capacity, the annual rent was fixed at the moderate
amount of P2,000 per annum.
The plaintiff accordingly entered upon the property, in the
character of lessee; and, in order to put the farm in good
condition, he found it necessary to make various
improvements and additions to the plant. Briefly stated, the
changes and additions thus effected were these: Substitution
of a new hydraulic press; reconstruction of dwelling house;
construction of new houses for workmen; building of
camarins; construction of chimney; reconstruction of ovens;
installment of new coolers; purchase of farming tools and
many head of carabao, with other repairs and improvements.
All this expense was borne exclusively by the lessee, with the
exception that his mother and coheirs contributed P1,500
towards the expense of the reconstruction of the dwelling
house, which was one-half the outlay for that item. The firm of
Lizarraga Hermanos was well aware of the nature and extent
of these improvements, for the reason that the lessee was a
customer of the firm and had purchased from it many of the
things that went into the improvements.
In 1916, or three years before the lease was to expire,
Anastacia de la Rama died, leaving as heirs Zacarias Robles
(the plaintiff), Jose Robles, Evarista Robles, Magdalena Robles,
Felix Robles, Jose Robles, and Evarista Robles acquired by
purchase the shares of their coheirs in the entire inheritance;
and at this juncture Lizarraga Hermanos came forward with a
proposal to buy from these three all of the other properties
belonging to the Robles estate (which included other
properties in addition to the hacienda "Nahalinan").
In course of the negotiations an obstacle was encountered in
the fact that the lease of Zacarias Robles still had over two
years to run. It was accordingly proposed that he should
surrender the last two years of his lease and permit Lizarraga
Hermanos to take possession as purchaser in June, 1918. A
surrender of the two years of the lease would naturally involve
a heavy sacrifice on the part of Zacarias Robles not only
because the rent which he was bound to pay was low, but
because he had already made most of the expenditures in
outfitting the farm which would be necessary for farming
operations during the entire period of the lease.
The plaintiff alleges and the trial court found, upon what we
believe to be sufficient proof, that, in consideration that the
plaintiff should shorten the term of his lease to the extent
stated, the defendant agreed to pay him the value of all
betterments that he had made on the hacienda and
furthermore to purchase from him all that belonged to him
personally on the hacienda, including the crop of 1917-18, the
cattle, farming implements and equipment, according to a
valuation to be made after the harvest. The plaintiff agreed to
this; and the instrument of conveyance by which the three
owners, Zacarias, Jose and Evarista Robles, conveyed the
property to Lizarraga Hermanos was accordingly executed on
November 16, 1917.
The effective clauses of conveyance by which each of the
three owner transferred their respective interest to the
purchaser read as follows:
(a) Por la presente, Don Jose Robles, en consideracion a la
cantidad de P25,266.37 que declara haber ya recibido de la
casa comercial Lizarraga Hermanos, vende, cede y traspasa a
la mencionada casa comercial Lizarraga Hermanos,
representada en este acto por D. Severiano Lizarraga, como
gerente de la misma, sus sucesores y causahabientes, todos
sus derechos, interes y participacion en la testamentaria de la
difunta Da. Anastacia de la Rama, como uno de los herederos
forzosos de la misma y todos los derechos, interes y
participacion adquiridos conjuntamente por el y sus hermanos
Da. Evarista Robles y D. Zacarias Robles de D. Rafael Campos
y Hurtado y de Da. Magdalena Robles.
(b) Y Da. Evarista Robles, con la debida licencia marital de su
esposo D. Enrique Martin, quien concurre al otorgamiento de
este documento, en consideracion a la cantidad de
P23,036.43, que declara haber ya recibido de la casa comercial
Lizarraga Hermanos, representada en este acto por D.
Severano Lizarraga, como gerente de la misma, sus sucesores
y causahabientes, vende, cede y traspasa todos sus derechos,
intereses y participacion en la testamentaria de la difunta Da.
Anastacia de la Rama, como una de interes y participacion
adquiridos por ella juntamente con sus hermanos D. Jose
Robles y D. Zacarias Robles de D. Rafael Campos y Hurtado y
de Da. Magdalena Robles.
(c) Y, finalmente, D. Zacarias Robles, en consideracion a la
cantidad de P32,589.59 que la casa Lizarraga Hermanos,
representada en este acto por D. Severiano Lizarraga, por la
presente promete pagarle en o antes del 30 de mayo de 1917,
con los intereses a razon de 8 por ciento anual, vende, cede y
traspasa a favor de la mencionada casa comercial Lizarraga
Hermanos, sus sucesores y causahabientes, todos sus
derechos, interes y participacion en la testamentaria de la
difunta Da. Anastacia de la Rama, como uno de los herederos
forzosos de la misma, y todos los derechos, interes y
participcion adquiridospor el, juntamente con sus hermanos,
Da. Evarista Robles y D. Jose Robles, de D. Rafael Campos y
Hurtado y de Da. Magdalena Robles."
It will be seen from the clauses quoted that the plaintiff
received some thousands of pesos of the purchase money
more than his brother and sister. This is explained by the fact
that the plaintiff was a creditor of his mother's estate while the
other two were debtors to it; and the difference in the
amounts paid to each resulted from the adjustments of their
respective rights. Furthermore, it will be noted that the three
grantors in the deed conveyed only their deceased mother;
and precisely the same words are used in defining what was
conveyed by Zacarias Robles as in defining what was
conveyed by the other two. These words are noteworthy, and
in the original Spanish they run as follows: " Sus derechos,
interes y participacion en la testamentaria de la difunta Da.
Anastacia de la Rama, como uno de los herederos forzosos de
la misma." What was conveyed by the plaintiff is not defined
as being, in part, the hacienda "Nahalinan," nor as including
any of his rights in or to the property conveyed other than
those which he possessed in the character of heir.
No reference is made in this conveyance to the surrender of
the plaintiff's rights as lessee, except in fixing the date when
the lease should end; nor is anything said concerning the
improvements or the property of a personal nature which the
plaintiff had placed on the hacienda. The plaintiff says that,
when the instrument was presented to him, he saw that in the
sixth paragraph it was declared that the plaintiff's lease should
subsist only until June 30, 1918, instead of in May, 1920,
which was the original term, while at the same time the
promise of the defendant to compensate for him for the
improvements and to purchase the existing crop, together with
the cattle and other things, was wanting; and he says that
upon his calling attention to this, the representative of the
defendant explained that this was unnecessary in view of the
confidence existing between the parties, at the same time
calling the attention of the plaintiff to the fact that the plaintiff
was already debtor to the house of Lizarraga Hermanos in the
amount of P49,000, for which the firm had no security. Upon
this manifestation the plaintiff subsided; and, believing that
the agreement with respect to compensation would be carried
out in good faith, he did not further insist upon the
incorporation of said agreement into this document. Nor was
the supposed agreement otherwise reduced to writing.
On the part of the defendant it is claimed that the agreement
with respect to compensating the plaintiff for improvements
and other things was never in fact made. What really
happened, accordingly to the defendant's answer, is that, after
the sale of the hacienda had been effected, the plaintiff
offered to sell the defendant firm the crop of cane then
existing uncut on the hacienda, together with the carabao
then in use on the place. This propositon was favorably
received by the defendant; and it is admitted that an
agreement was arrived at with respect to the value of the
carabao, which were taken over for the agreed price, but it is
claimed with respect to the crop that the parties did not come
into accord.
Upon the issue of fact thus made we are of the opinion that
the preponderance of the evidence supports the contention of
the plaintiff — and the finding of the trial court — to the effect
that, in consideration of the shortening of the period of the
lease by nearly two years, the defendant undertook to pay for
the improvements which the plaintiff had placed on
the hacienda and take over at a fair valuation, to be made by
appraisers, the personal property, such as carabao, tools and
farming impliments, which the plaintiff had placed upon
the hacienda at his own personal expense. The plaintiff
introduced in evidence a letter (Exhibit D), written on March 1,
1917, by Severiano Lizarraga to the plaintiff, in which
reference is made to an appraisal and liquidation. This letter is
relied upon by the plaintiff as constituting written evidence of
the agreement; but it seems to us so vague that, if it stood
alone, and a written contract were really necessary, it could
not be taken as sufficient proof of the agreement in question.
But we believe that the contract is otherwise proved by oral
testimony.
When testifying as a witness of the defense Carmelo Lizarraga
himself admitted — contrary to the statement of defendant's
answer — that a few days before the conveyance was
executed the plaintiff proposed that the defendant should buy
all the things that the plaintiff then had on the hacienda,
whereupon the Lizarragas informed him that they would buy
those things if an agreement should be arrived at as to the
price. We note that as regards the improvements the position
of the defendant is that they pertained to the hacienda at the
time the purchase was effected and necessarily passed with it
to the defendant.
As against the denials of the Lizarraga we have the direct
testimony of the plaintiff and his brother Jose to the effect that
the agreement was as claimed by the plaintiff; and this is
supported by the natural probabilities of the case in
connection with a subsequent appraisal of the property, which
was rendered futile by the course pursued by the defendants.
It is, however, unnecessary to enter into details with respect
to this, because, upon examining the assignments of error of
the appellant in this court, it will be found that no exception
has been taken to the finding of the trial court to the effect
that a verbal contract was made in the sense claimed by the
plaintiff.
We now proceed to discuss seriatim the errors assigned by the
appellant. Under the first, exception is taken to the action of
the trial court in admitting oral evidence of a contract different
from that expressed in the contract of sale (Exhibit B); and it
is insisted that the written contract must be taken as
expressing all of the pacts, agreements and stipulations
entered into between the parties with respect to the
acquisition of the hacienda. In this connection stress is placed
upon the fact that there is no allegation in the complaint that
the written contract fails to express the agreement of the
parties. This criticism is in our opinion not well directed. The
case is not one for the reformation of a document on the
ground of mistake or fraud in its execution, as is permitted
under section 285 of the Code of Civil Procedure. The purpose
is to enforce an independent or collateral agreement which
constituted an inducement to the making of the sale, or part of
the consideration therefor. There is no rule of evidence of
wider application than that which declares extrinsic evidence
inadmissible either to contradict or vary the terms of a written
contract. The execution of a contract in writing is deemed to
supersede all oral negotiations or stipulations concerning its
terms and the subject-matter which preceded the execution of
the instrument, in the absence of accident, fraud or mistake of
fact (10 R. C. L., p. 1016). But it is recognized that this rule is
to be taken with proper qualifications; and all the authorities
are agreed that proof is admissible of any collateral, parol
agreement that is not inconsistent with the terms of the
written contract, though it may relate to the same subject-
matter (10 R. C. L., p. 1036). As expressed in a standard legal
encyclopedia, the doctrine here referred to is as follows: "The
rule excluding parol evidence to vary or contradict a writing
does not extend so far as to preclude the admission of
extrinsic evidence to show prior or contemporaneous collateral
parol agreements between the parties, but such evidence may
be received, regardless of whether or not the written
agreement contains any reference to such collateral
agreement, and whether the action is at law or in equity." (22
C. J., p. 1245.) It has accordingly been held that, in case of a
written contract of lease, the lessee may prove an
independent verbal agreement on the part of the landlord to
put the leased premises in a safe condition; and a vendor of
realty may show by parol evidence that crops growing on the
land were reserved, though no such reservation was made in
the deed of conveyance (10 R. C. L., p. 1037). In the case
before us the deed of conveyance purports to transfer to the
defendant only such interests in certain properties as had
come to the conveyors by inheritance. Nothing is said
concerning the rights in the hacienda which the plaintiff had
acquired by lease or concerning the things that he had placed
thereon by way of improvement or had acquired by purchase.
The verbal contract which the plaintiff has established in this
case is therefore clearly independent of the main contract of
conveyance, and evidence of such verbal contract is admissible
under the doctrine above stated. The rule that a preliminary or
contemporaneous oral agreement is not admissible to vary a
written contract appears to have more particular reference to
the obligation expressed in the written agreement, and the
rule had never been interpreted as being applicable to matters
of consideration or inducement. In the case before us the
written contract is complete in itself; the oral agreement is
also complete in itself, and it is a collateral to the written
contract, notwithstanding the fact that it deals with related
matters.
Under the second assignment of error the appellant directs
attention to subsection 4 of article 335 of the Code of Civil
Procedure wherein it is declared that a contract for the sale of
goods, chattels or things in action, at a price of not less than
P100, shall be unenforceable unless the contract, or some
note or memorandum thereof shall be in writing and
subscribed by the party charged, or by his agent; and it is
insisted that the court erred in admitting proof of a verbal
contract over the objection of the defendant's attorney. But it
will be noted that the same subsection contains a qualification,
which is stated in these words, "unless the buyer accept and
receive part of such goods and chattels." In the case before us
the trial court found that the personal property, consisting of
farming implements and other movables placed on the farm by
the plaintiff, have been utilized by the defendant in the
cultivation of the hacienda, and that the defendant is
benefiting by those things. No effort was made in the court
below by the defendant to controvert the proof submitted on
this point in behalf of the plaintiff, and no error is assigned in
this court to the findings of fact with reference thereto made
by the trial judge. It is evident therefore that proof of the oral
agreement with respect to the movables was properly received
by the trial judge, even over the objection of the defendant's
attorney. .
The appellant's third assignment of error has reference to the
alleged suspensive condition annexed to the oral agreement.
In this connection it is claimed that the true meaning of the
proven verbal agreement is that, in case the parties should fail
to agree upon the price, after an appraisal of the property, the
agreement would not be binding; in other words, that the
stipulation for appraisal and agreement as to the price was a
suspensive condition in the contract: and since the parties
have never arrived at any agreement on the price (except as
to the carabao), it is contended that the obligation of the
defendant has never become effective. We are of the opinion
that the stipulation with respect to the appraisal of the
property did not create a suspensive condition. The true sense
of the contract evidently was that the defendant would take
over the movables and the improvements at an appraised
valuation, and the defendant obligated itself to promote the
appraisal in good faith. As the defendant partially frustrated
the appraisal, it violated a term of the contract and made itself
liable for the true value of the things contracted about, as
such value may be established in the usual course of proof.
Furthermore, it must occur to any one, as the trial judge
pointed out, that an unjust enrichment of the defendant would
result from allowing it to appropriate the movables without
compensating the plaintiff thereof.
The fourth assignment of error is concerned with the
improvements. Attention is here directed to the fact that the
improvements placed on the hacienda by the plaintiff became
a part of the realty and as such passed to the defendant by
virtue of the transfer effected by the three owner in the deed
of conveyance (Exhibit B.). It is therefore insisted that, the
defendant having thus acquired the improvements, the
plaintiff should not be permitted to recover their value again
from the defendant. This criticism misses the point. There can
be no doubt that the defendant acquired the fixed
improvements when it acquired the land, but the question is
whether the defendant is obligated to indemnify the plaintiff
for his outlay in making the improvements. It was upon the
consideration of the defendant's promise so to indemnify the
plaintiff that the latter agreed to surrender the lease nearly
two no doubt as to the validity of the promise made under
these circumstances to the plaintiff.
The fifth assignment of error is directed towards the action of
the trial court in awarding to the plaintiff the sum of P1,142 as
compensation for the damage caused by the failure of the
defendant to take the existing crop of cane from
the hacienda at the proper time. In this connection it appears
that it was only in November, 1917, that the defendant finally
notified the plaintiff that he would not take the cane off the
plaintiff's hands. Having relied upon the promise of the
defendant with respect to this matter, the plaintiff had made
no prior arrangements to have the cane ground himself, and
he had failed to contract ahead for the necessary laborers to
harvest the crop. Due to this lack of hands the milling of the
cane was delayed, and things that ought to have been done in
December, 1917, were only accomplished in February, 1918. It
resulted also that the milling of the cane was not completed
until July, 1918. The trial court took judicial notice of the fact
that protracted delay in the milling of sugar-cane results in
loss; and his Honor estimated the damage to the plaintiff's
crop upon this account in the amount above stated. As
fortifying his position on this point his Honor quoted
extensively in his opinion from scientific treatises on the
subject of the sugar industry in this and other countries. That
there must have been damage attributable to the cause above
stated is manifest; and although the estimate made by the
court was based upon what may be considered matter of
judicial notice without any specific estimate from farmers, we
see no reason to conclude that any injustice was done to the
plaintiff in said estimate.
Upon the whole we find no reason to modify the conclusions
of the trial court upon any point, and the judgement appealed
from must be affirmed. It is so ordered, with costs against the
appellant.
4. US vs EDUARDO
GR No. 5097. February 10, 1910
The defendant was accused of executing, with reckless
negligence, an act, which if done with malice would constitute
a grave, committed as follows:
That the said Pedro Eduardo on or about the 16th day of July,
1908, in the city of Manila, Philippine Islands, did then and
there, wilfully, unlawfully, and feloniously, with deliberate
premeditation and through reckless negligence, cause the
death of and kill one Erisberta Garrido and others, whose
names are unknown, in this, to wit:
That on and for a long time prior to the said 16th day of July,
1908, the said accused, Pedro Eduardo, was patron and
master of a small steamer, bark, and seagoing vessel,
propelled by steam, of less than 95 tons burden, which
steamer was then and there duly registered and licensed
under the name of San Gabriel and was then and there
navigating in and making voyages in the waters of the
Philippine Islands, between the port of Manila and Corregidor
Island, lying near the entrance to the Bay of Manila, Philippine
Islands; that as such patron and master the said Pedro
Eduardo was then and there in complete command and control
of said vessel and the loading, sailing, departure and
navigation of said vessel, San Gabriel, in the harbor of Manila,
and on her voyages in the waters of the Philippine Islands;
that on the said 16th day of July, in the said city of Manila,
Philippine Islands, the said Pedro Eduardo, while so in
complete control and command of the said vessel San Gabriel,
did then and there, while said steamer and vessel San
Gabriel was lying moored in the harbor of the said city of
Manila and in the Pasig River in said city, willfully, unlawfully,
and knowingly, and with gross and reckless negligence, greatly
overload the said steamer San Gabriel and take and cause to
be taken upon and aboard the said steamer San
Gabriel passengers and freight far in excess of her carrying
capacity to such an extent as to render her navigation and
voyage upon the waters of Manila Bay, between the city of
Manila and Corregidor, unsafe and perilous to the said vessel
and to the lives of the passengers and crew thereof; and did
further, then and there, while the said steamer San
Gabriel was so overload, as the said accused, then and there
well knew, and when, as the accused then and there well
knew, the hull of the said steamer San Gabriel was in an
injured state and unable to resist heavy seas and stormy
weather, willfully, unlawfully, and in gross violation of harbor
regulations and with gross and criminal negligence, take and
cause the said vessel San Gabriel to be taken from her dock
and moorings in the Pasig River in said city of Manila, and
proceed with said vessel, so overloaded, on a voyage to
Corregidor Islands, lying at the entrance of Manila Bay, when,
as the said accused well knew, a typhoon and storm was
raging over Manila Harbor and Bay and the storm and typhoon
was threatening to become worse and the said storm was, at
the time of the actual sailing of said vessel San Gabriel, as the
said accused well knew, of such violence as to render the
voyage of the San Gabriel exceedingly unsafe and dangerous
and when, as the said accused well knew, by reason of all of
the aforesaid, the said San Gabriel could not leave her
moorings and pass into the waters of Manila Bay and on her
voyage to Corregidor without grave danger and peril of being
wrecked, foundered, and sunk at sea and without grave
danger of the said Erisberta Garrido, a child of tender years,
and others whose names are unknown, who were then and
there passengers aboard the said San Gabriel, as the said
accused well knew, being shipwrecked with said vessel and
drowned; that the said vessel San Gabriel while proceeding
and being taken by the said accused, Pedro Eduardo, upon the
voyage to Corregidor, as aforesaid, and while within the
waters of Manila Bay and beyond the harbor limits of the city
of Manila, by reason of being so overloaded by the accused, as
aforesaid, and by reason and because of the unseaworthy
condition of her hull, as aforesaid, and by reason of being then
and there a vessel of less than 95 tons burden, was unable to
resist the severe storm and stress of weather aforesaid and
was then and there wrecked, foundered, and sunk in the
waters of Manila Bay, whereby said Erisberta Garrido and
others whose names are unknown were then and there
drowned.
That the said vessel San Gabriel was unable, by reason of said
foundering and shipwreck, to come into any port of the
Philippine Islands after she sailed from the said port of Manila,
but the said Pedro Eduardo was rescued and brought to the
city of Manila on the 19th day of July, 1908, on the steam
launch De la Rama, duly licensed and registered in the
Philippine Islands, under the laws thereof; and the said Pedro
Eduardo is now within the jurisdiction of this court; that all of
the acts of negligence aforesaid were committed within the
harbor of the city of Manila and within the jurisdiction of the
Court of First Instance of the city of Manila, but the foundering
of the vessel at sea and the death of the said Erisberta Garrido
and others, whose names are unknown, took place without the
harbor of the city of Manila and within the waters of Manila
Bay, navigable waters of the Philippine Islands and more than
3 miles distant from any land, harbor, or port of the Philippine
Islands.
All contrary to law.
After hearing the evidence adduced during the trial, the lower
court found the defendant guilty, beyond any reason of doubt,
of the crime charged in the complaint, and sentenced him to
be imprisoned for one year and six months of presidio
correccional, and to pay the costs.
From this sentence of the lower court the defendant appealed.
No question is presented to this court except the question of
the sufficiency of the evidence adduced during the trial in the
lower court to justify said sentence.
From an examination of the evidence adduced during the trial,
the following facts seems to be proven, beyond peradventure
of doubt:
First. That the defendant, Pedro Eduardo, on the 16th of July,
1908, was captain in charge of the launch San Gabriel and had
been such captain of said launch from the 13th of April, 1903.
Second. That said launch San Gabriel was a launch
constructed of wood, with a gross tonnage of 43.94 tons, and
on the 16th of July, 1908, was licensed to carry thirty
passengers only, together with a crew composed of eleven
persons, composed of one captain, one machinist, four
firemen, and five sailors.
Third. That on the said 16th of July, 1908, said launch was
anchored in the Pasig River, in the city of Manila; that the hold
was filed with freight and additional freight was piled upon the
deck; that a policeman who was near the place where the said
launch was anchored just before the time of raising said
anchor, forbade the captain from taking any more freight on
board, because of the then overloaded condition of said
launch.
Fourth. That there was on board said launch at the time it to prision correccional in its minimum degree, and with arresto
sailed out of the Pasig River into Manila Bay, about one mayor in its minimum and medium degrees if it shall constitute
hundred passengers, more or less, among whom was one a less grave crime."
Erisberta Garrido, a child of tender years.
The crime imputed to the defendant here is that he drowned
Fifth. That there were no cabins for passengers on said Erisberta Garrido, which would, had it been done with malice,
launch, and that all the passengers were required to remain on have constituted a grave crime.
deck, and that launch was a single-deck launch.
The phrase "reckless negligence" is one most difficult to
Sixth. That at and before the time (16th of July, 1908) the said define. Many courts have attempted to define it. It seems
launch raised anchor, the second storm signal was displayed impossible to give an exact definition of what constitutes
at the usual place for displaying such signals in the city of "reckless negligence." We do not attempt here to define it.
Manila, knowledge of which the defendant had. Each case must depend upon its own facts. We deem it
sufficient, under the facts and circumstances of the present
Seventh. That the defendant had full knowledge of the case, to hold that the defendant did, through his reckless
provisions of the Customs Administrative Circular, No. 436, negligence and without due regard for the safety of Erisberta
issued by the Hon. H. B. McCoy, Acting Insular Collector of Garrido and the other passengers on board the said
Customs, which contains the following precautions to captains launch San Gabriel, raise the anchor of said launch and steam
of vessels when the second storm signal is displayed: out of the Pasig River into Manila Bay, in the face of a severe
storm, while the boat was overloaded both with freight and
passengers, where, by reason of said negligence and
Vessels shall strengthen their moorings. It is deemed advisable
overloading, Erisberta Garrido was drowned.
that vessels shall send down light yards and masts. Steamers
shall be ready to use their engines on short notice. Dangerous
for small vessels to be in the bay. Bancas must not leave the In our conclusions we have taken into consideration the
river. decisions of the supreme court of Spain of the 7th of March,
1871; the 13th of May, 1874; the 3d of May, 1876; the 23d of
December, 1887, and the 18th of October, 1899.
Eighth. That the son of the owner of the vessel, Andres
Gabriel, who had under his control the disposition and
direction of said launch, on the afternoon of the 15th of July, After a full consideration of all of the facts and circumstances,
1908, in view of the bad condition of the weather, advised the we are of the opinion and so hold that the evidence shows,
machinist and the said captain, that they should not go out of beyond peradventure of doubt, that the defendant is guilty of
the river on the following day. a violation of the provisions of said article 568 of the Penal
Code, and that the penalty imposed by the lower court was in
accordance with the provisions of law; it is, therefore, hereby
Ninth. That a few days before the said 16th of July, 1908, the affirmed, with costs. So ordered.
said launch had collided with the stone wall or embankment of
the Pasig River with such force as might have weakened the
frame of said launch. Arellano, C.J., Torres, Mapa, Carson, Moreland and Elliott,
JJ., concur.
Tenth. That notwithstanding the instructions of the son of the
owner of said launch given to the defendant not to leave the
river on the 16th of July, 1908; and notwithstanding the fact
that the hold was filed with freight and that additional freight
was piled upon the single deck of said launch; and
notwithstanding the fact that the launch was loaded with one
hundred passengers, more or less, being more than three
times the number which she was permitted to carry; and
notwithstanding the fact that the second storm signal had
been displayed several hours; and notwithstanding the fact
that the defendant knew that the second storm signal had
been displayed and was then displayed, he raised anchor and
left the Pasig River and steamed out into Manila Bay, where,
after two or more hours of sailing in the direction of Corregidor
Island, in the face of a severe storm, the said launch
foundered and one Erisberta Garrido, a child of tender years,
and others whose names are unknown, were then and there
drowned; that ninety-five of the passengers who were on
board the said launch at the time she foundered, and who
were struggling in the water at or near the place where the
said launch sunk, were rescued by other launches and bancas,
which went to the scene for that purpose, the bodies of others
being found a few days later on the shores of Manila Bay.

The theory of the prosecution is that the defendant is

criminally liable under the provisions of article 568 of the Penal
Code, in its first paragraph. Said article provides that "he who
shall execute through reckless negligence an act that, if done
with malice, would constitute a grave crime, shall be punished
with the penalty of the arresto mayor in its maximum degree
5. SULPICIO LINES VS. SESANTE of the respondent,9 holding as
follows:ChanRoblesVirtualawlibrary
GR No. 172682, July 27, 2016 WHEREFORE, judgment is hereby rendered
in favor of plaintiff Napoleon Sesante and
Moral damages are meant to enable the injured party to obtain against defendant Sulpicio Lines, Inc.,
the means, diversions or amusements in order to alleviate the ordering said defendant to pay plaintiff:
moral suffering. Exemplary damages are designed to permit
the courts to reshape behavior that is socially deleterious in its
consequence by creating negative incentives or deterrents 1. Temperate damages in the amount
against such behavior. of P400,000.00;
2. Moral damages in the amount of
The Case One Million Pesos (P1,000,000.00);
3. Costs of suit.
This appeal seeks to undo and reverse the adverse decision
promulgated on June 27, 2005,1 whereby the Court of Appeals
(CA) affirmed with modification the judgment of the Regional SO ORDERED.10chanroblesvirtuallawlibrary
Trial Court (RTC), Branch 91, in Quezon City holding the The RTC observed that the petitioner, being negligent, was
petitioner liable to pay temperate and moral damages due to liable to Sesante pursuant to Articles 1739 and 1759 of
breach of contract of carriage.2chanrobleslaw the Civil Code; that the petitioner had not established its due
diligence in the selection and supervision of the vessel crew;
Antecedents that the ship officers had failed to inspect the stowage of
cargoes despite being aware of the storm signal; that the
On September 18, 1998, at around 12:55 p.m., the M/V officers and crew of the vessel had not immediately sent a
Princess of the Orient, a passenger vessel owned and operated distress signal to the Philippine Coast Guard; that the ship
by the petitioner, sank near Fortune Island in Batangas. Of the captain had not called for then "abandon ship" protocol; and
388 recorded passengers, 150 were lost.3 Napoleon Sesante, that based on the report of the Board of Marine Inquiry (BMI),
then a member of the Philippine National Police (PNP) and a the erroneous maneuvering of the vessel by the captain during
lawyer, was one of the passengers who survived the sinking. the extreme weather condition had been the immediate and
He sued the petitioner for breach of contract and proximate cause of the sinking.
damages.4chanrobleslaw
The petitioner sought reconsideration, but the RTC only partly
Sesante alleged in his complaint that the M/V Princess of the granted its motion by reducing the temperate damages from
Orient left the Port of Manila while Metro Manila was P500,000.00 to P300,000.00.11chanrobleslaw
experiencing stormy weather; that at around 11:00 p.m., he
had noticed the vessel listing starboard, so he had gone to the Dissatisfied, the petitioner appealed.12 It was pending the
uppermost deck where he witnessed the strong winds and big appeal in the CA when Sesante passed away. He was
waves pounding the vessel; that at the same time, he had substituted by his heirs.13chanrobleslaw
seen how the passengers had been panicking, crying for help
and frantically scrambling for life jackets in the absence of the Judgment of the CA
vessel's officers and crew; that sensing danger, he had called
a certain Vency Ceballos through his cellphone to request him On June 27, 2005, the CA promulgated its assailed decision. It
to inform the proper authorities of the situation; that lowered the temperate damages to P120,000.00, which
thereafter, big waves had rocked the vessel, tossing him to the approximated the cost of Sesante's lost personal belongings;
floor where he was pinned by a long steel bar; that he had and held that despite the seaworthiness of the vessel, the
freed himself only after another wave had hit the vessel;5 that petitioner remained civilly liable because its officers and crew
he had managed to stay afloat after the vessel had sunk, and had been negligent in performing their duties.14chanrobleslaw
had been carried by the waves to the coastline of Cavite and
Batangas until he had been rescued; that he had suffered Sttill aggrieved, Sulpicio Lines moved for reconsideration, but
tremendous hunger, thirst, pain, fear, shock, serious anxiety the CA denied the motion.15chanrobleslaw
and mental anguish; that he had sustained injuries, 6 and had
lost money, jewelry, important documents, police uniforms Hence, this appeal.
and the .45 caliber pistol issued to him by the PNP; and that
because it had committed bad faith in allowing the vessel to Issues
sail despite the storm signal, the petitioner should pay him
actual and moral damages of P500,000.00 and P1,000,000.00, The petitioner attributes the following errors to the CA, to
respectively.7chanrobleslaw wit:ChanRoblesVirtualawlibrary
I
In its defense, the petitioner insisted on the seaworthiness of
the M/V Princess of the Orient due to its having been cleared THE ASSAILED DECISION
to sail from the Port of Manila by the proper authorities; that ERRED IN SUSTAINING
the sinking had been due to force majeure; that it had not THE AWARD OF MORAL
been negligent; and that its officers and crew had also not DAMAGES, AS THE
been negligent because they had made preparations to INSTANT CASE IS FOR
abandon the vessel because they had launched life rafts and ALLEGED PERSONAL
had provided the passengers assistance in that INJURIES PREDICATED
regard.8chanrobleslaw ON BREACH OF
CONTRACT OF CARRIAGE,
Decision of the RTC AND THERE BEING NO
PROOF OF BAD FAITH ON
On October 12, 2001, the RTC rendered its judgment in favor THE PART OF SULPICIO
 II
THE ASSAILED DECISION ERRED IN
SUSTAINING THE AMOUNT OF MORAL
DAMAGES AWARDED, THE SAME BEING
UNREASONABLE, EXCESSIVE AND
UNCONSCIONABLE, AND TRANSLATES TO
UNJUST ENRICHMENT AGAINST SULPICIO
III
THE ASSAILED DECISION ERRED IN
SUSTAINING THE AWARD OF TEMPERATE
DAMAGES AS THE SAME CANNOT
SUBSTITUTE FOR A FAILED CLAIM FOR
ACTUAL DAMAGES, THERE BEING NO
COMPETENT PROOF TO WARRANT SAID
AWARD
IV
THE AWARD OF TEMPERATE DAMAGES IS
UNTENABLE AS THE REQUISITE NOTICE
UNDER THE LAW WAS NOT GIVEN TO
SULPICIO IN ORDER TO HOLD IT LIABLE
FOR THE ALLEGED LOSS OF SESANTE'S
PERSONAL BELONGINGS
V Rule 87 of the Rules of Court enumerates the following actions
THE ASSAILED DECISION ERRED IN
SUBSTITUTING THE HEIRS OF
RESPONDENT SESANTE IN THE INSTANT
CASE, THE SAME BEING A PERSONAL
ACTION WHICH DOES NOT SURVIVE
VI
THE ASSAILED DECISION ERRED IN
APPLYING ARTICLE 1759 OF THE NEW
CIVIL CODE AGAINST SULPICIO SANS A
CLEAR-CUT FINDING OF SULPICIO'S BAD
FAITH IN THE
INCIDENT16chanroblesvirtuallawlibrary
In other words, to be resolved are the following, namely: ( 1)
Is the complaint for breach of contract and damages a
personal action that does not survive the death of the
plaintiff?; (2) Is the petitioner liable for damages under Article
1759 of the Civil Code?; and (3) Is there sufficient basis for
awarding moral and temperate damages?
Ruling of the Court
The appeal lacks merit.
I
An action for breach of contract of carriage survives
the death of the plaintiff
The petitioner urges that Sesante's complaint for damages was
purely personal and cannot be transferred to his heirs upon his
death. Hence, the complaint should be dismissed because the
death of the plaintiff abates a personal action.
The petitioner's urging is unwarranted.
Section 16, Rule 3 of the Rules of Court lays down the proper
procedure in the event of the death of a
litigant, viz.:ChanRoblesVirtualawlibrary
Section 16. Death of party; duty of counsel.
- Whenever a party to a pending action
dies, and the claim is not thereby
extinguished, it shall be the duty of his
counsel to inform the court within thirty (30)
days after such death of the fact thereof,
and to give the name and address of his
legal representative or representatives.
Failure of counsel to comply with his duty
shall be a ground for disciplinary action.
The heirs of the deceased may be
allowed to be substituted for the
deceased, without requiring the
appointment of an executor or administrator
and the court may appoint a guardian ad
litem for the minor heirs.
xxxx
Substitution by the heirs is not a matter of jurisdiction, but a
requirement of due process.17 It protects the right of due
process belonging to any party, that in the event of death the
deceased litigant continues to be protected and properly
represented in the suit through the duly appointed legal
representative of his estate.18chanrobleslaw
The application of the rule on substitution depends on whether
or not the action survives the death of the litigant. Section 1,
that survive the death of a party, namely: (1) recovery of real
or personal property, or an interest from the estate; (2)
enforcement of liens on the estate; and (3) recovery of
damages for an injury to person or property. On the one hand,
Section 5, Rule 86 of the Rules of Court lists the actions
abated by death as including: (1) claims for funeral expenses
and those for the last sickness of the decedent; (2) judgments
for money; and (3) all claims for money against the deceased,
arising from contract, express or implied.
A contract of carriage generates a relation attended with
public duty, neglect or malfeasance of the carrier's employees
and gives ground for an action for damages.19 Sesante's claim
against the petitioner involved his personal injury caused by
the breach of the contract of carriage. Pursuant to the
aforecited rules, the complaint survived his death, and could
be continued by his heirs following the rule on substitution.
II
The petitioner is liable for breach of contract of
carriage
The petitioner submits that an action for damages based on
breach of contract of carriage under Article 1759 of the Civil
Code should be read in conjunction with Article 2201 of the
same code; that although Article 1759 only provides for a
presumption of negligence, it does not envision automatic
liability; and that it was not guilty of bad faith considering that
the sinking of M/V Princess of the Orient had been due to a
fortuitous event, an exempting circumstance under Article
1174 of the Civil Code.
The submission has no substance.
Article 1759 of the Civil Code does not establish a presumption
of negligence because it explicitly makes the common carrier
liable in the event of death or injury to passengers due to the
negligence or fault of the common carrier's employees. It
reads:ChanRoblesVirtualawlibrary
 Article 1759. Common carriers are liable (3) the occurrence must be such as to
for the death or injuries to passengers render it impossible for the debtor to fulfill
through the negligence or willful acts his obligation in any manner; and (4) the
of the former's employees, although obligor must be free from any participation
such employees may have acted beyond the in the aggravation of the injury resulting to
scope of their authority or in violation of the the creditor.
orders of the common carriers. [T]he principle embodied
in the act of God doctrine
This liability of the common carriers does strictly requires that the
not cease upon proof that they exercised all act must be occasioned
the diligence of a good father of a family in solely by the violence
the selection and supervision of their of nature. Human
employees. intervention is to be
The liability of common carriers under Article 1759 is excluded from creating
demanded by the duty of extraordinary diligence required of or entering into the
common carriers in safely carrying their cause of the mischief.
passengers.20chanrobleslaw When the effect is
found to be in part the
On the other hand, Article 1756 of the Civil Code lays down result of the
the presumption of negligence against the common carrier in participation of man,
the event of death or injury of its whether due to his
passenger, viz.:ChanRoblesVirtualawlibrary active intervention or
Article 1756. In case of death of or injuries neglect or failure to
to passengers, common carriers are act, the whole
presumed to have been at fault or to have occurrence is then
acted negligently, unless they prove that humanized and
they observed extraordinary diligence as removed from the rules
prescribed in Articles 1733 and 1755. applicable to the acts
Clearly, the trial court is not required to make an express of God.29 (bold
finding of the common carrier's fault or negligence. 21 Even the underscoring supplied for
mere proof of injury relieves the passengers from establishing emphasis)
the fault or negligence of the carrier or its employees. 22 The The petitioner has attributed the sinking of the vessel to the
presumption of negligence applies so long as there is evidence storm notwithstanding its position on the seaworthiness of M/V
showing that: (a) a contract exists between the passenger and Princess of the Orient. Yet, the findings of the BMI directly
the common carrier; and (b) the injury or death took place contradicted the petitioner's attribution, as
during the existence of such contract.23 In such event, the follows:ChanRoblesVirtualawlibrary
burden shifts to the common carrier to prove its observance of 7. The Immediate and the Proximate Cause
extraordinary diligence, and that an unforeseen event or force of the Sinking
majeure had caused the injury.24chanrobleslaw
The Captain's erroneous maneuvers of
Sesante sustained injuries due to the buffeting by the waves the M/V Princess of the Orient minutes
and consequent sinking of M/V Princess of the Orient where he before she sunk [sic] had caused the
was a passenger. To exculpate itself from liability, the accident. It should be noted that during the
common carrier vouched for the seaworthiness of M/V Princess first two hours when the ship left North
of the Orient, and referred to the BMI report to the effect that Harbor, she was navigating smoothly
the severe weather condition - a force majeure - had brought towards Limbones Point. During the same
about the sinking of the vessel. period, the ship was only subjected to the
normal weather stress prevailing at the time.
The petitioner was directly liable to Sesante and his heirs. She was then inside Manila Bar. The waves
were observed to be relatively small to
A common carrier may be relieved of any liability arising from endanger the safety of the ship. It was only
a fortuitous event pursuant to Article 117425cralawred of when the MV Princess of the Orient had
the Civil Code. But while it may free a common carrier from cleared Limbones Pt. while navigating
liability, the provision still requires exclusion of human agency towards the direction of the Fortune Island
from the cause of injury or loss.26 Else stated, for a common when this agonizing misfortune struck the
carrier to be absolved from liability in case of force majeure, it ship.
is not enough that the accident was caused by a fortuitous
event. The common carrier must still prove that it did not Initially, a list of three degrees was
contribute to the occurrence of the incident due to its own or observed. The listing of the ship to her
its employees' negligence.27 We explained in Schmitz Transport portside had continuously increased. It was
& Brokerage Corporation v. Transport Venture, Inc.,28 as at this point that the captain had misjudged
follows:ChanRoblesVirtualawlibrary the situation. While the ship continuously
In order to be considered a fortuitous event, listed to her portside and was battered by
however, (1) the cause of the unforeseen big waves, strong southwesterly winds,
and unexpected occurrence, or the failure of prudent judgement [sic] would dictate that
the debtor to comply with his obligation, the Captain should have considerably
must be independent of human will; (2) it reduced the ship's speed. He could have
must be impossible to foresee the event immediately ordered the Chief Engineer to
which constitute the caso fortuito, or if it can slacken down the speed. Meanwhile,
be foreseen it must be impossible to avoid; the winds and waves continuously hit the
 ship on her starboard side. The waves were
at least seven to eight meters in height and
the wind velocity was a[t] 25 knots. The MV
Princess of the Orient being a close-type
ship (seven decks, wide and high
superstructure) was vulnerable and exposed
to the howling winds and ravaging seas.
Because of the excessive movement, the
solid and liquid cargo below the decks must
have shifted its weight to port, which could
have contributed to the tilted position of the
ship.
Minutes later, the Captain finally ordered to
reduce the speed of the ship to 14 knots. At
the same time, he ordered to put ballast
water to the starboard-heeling tank to arrest
the continuous listing of the ship. This was
an exercise in futility because the ship was
already listing between 15 to 20 degrees to
her portside. The ship had almost reached
the maximum angle of her loll. At this stage,
she was about to lose her stability.
Despite this critical situation, the Captain
executed several starboard maneuvers.
Steering the course of the Princess to
starboard had greatly added to her tilting. In
the open seas, with a fast speed of 14
knots, advance maneuvers such as this
would tend to bring the body of the ship in
the opposite side. In navigational terms, this
movement is described as the centripetal
force. This force is produced by the water
acting on the side of the ship away from the
center of the turn. The force is considered to
act at the center of lateral resistance which,
in this case, is the centroid of the
underwater area of the ship's side away
from the center of the turn. In the case of
the Princess, when the Captain maneuvered
her to starboard, her body shifted its weight
to port. Being already inclined to an angle of
15 degrees, coupled with the instantaneous
movement of the ship, the cargoes below
deck could have completely shifted its
position and weight towards portside. By
this time, the ship being ravaged
simultaneously by ravaging waves and
howling winds on her starboard side, finally
lost her grip.30chanroblesvirtuallawlibrary
Even assuming the seaworthiness of the MA/ Princess of the
Orient, the petitioner could not escape liability considering
that, as borne out by the aforequoted findings of the BMI, the
immediate and proximate cause of the sinking of the vessel
had been the gross negligence of its captain in maneuvering
the vessel.
The Court also notes that Metro Manila was experiencing
Storm Signal No. 1 during the time of the sinking.31 The BMI
observed that a vessel like the M/V Princess of the Orient,
which had a volume of 13.734 gross tons, should have been
capable of withstanding a Storm Signal No. 1 considering that
the responding fishing boats of less than 500 gross tons had
been able to weather through the same waves and winds to
go to the succor of the sinking vessel and had actually rescued
several of the latter's distressed passengers. 32chanrobleslaw
III
The award of moral damages and temperate damages
is proper
The petitioner argues that moral damages could be meted
against a common carrier only in the following instances, to
wit: (1) in the situations enumerated by Article 2201 of
the Civil Code; (2) in cases of the death of a passenger; or
(3)where there was bad faith on the part of the common
carrier. It contends that none of these instances obtained
herein; hence, the award should be deleted.
We agree with the petitioner that moral damages may be
recovered in an action upon breach of contract of carriage only
when: (a) death of a passenger results, or (b) it is proved that
the carrier was guilty of fraud and bad faith, even if death
does not result.33 However, moral damages may be awarded if
the contractual breach is found to be wanton and deliberately
injurious, or if the one responsible acted fraudulently or with
malice or bad faith.34chanrobleslaw
The CA enumerated the negligent acts committed by the
officers and crew of M/V Princess of the
Orient, viz.:ChanRoblesVirtualawlibrary
x x x. [W]hile this Court yields to the
findings of the said investigation report, yet
it should be observed that what was
complied with by Sulpicio Lines were only
the basic and minimal safety standards
which would qualify the vessel as seaworthy.
In the same report however it also revealed
that the immediate and proximate cause of
the sinking of the M/V Princess of the Orient
was brought by the following: erroneous
maneuvering command of Captain Esrum
Mahilum and due to the weather condition
prevailing at the time of the tragedy. There
is no doubt that under the circumstances the
crew of the vessel were negligent in
manning it. In fact this was clearly
established by the investigation of the Board
of Marine Inquiry where it was found
that:ChanRoblesVirtualawlibrary
The Chief Mate, when
interviewed under oath,
had attested that he was
not able to make stability
calculation of the ship vis-
a-vis her cargo. He did not
even know the
metacentric height (GM)
of the ship whether it be
positive or negative.
As cargo officer of the
ship, he failed to prepare
a detailed report of the
ship's cargo stowage plan.
He likewise failed to conduct the soundings
(measurement) of the ballast tanks before
the ship departed from port. He readily
presumed that the ship was full of ballast
since the ship was fully ballasted when she
left Cebu for Manila on 16 September 1998
and had never discharge[d] its contents
since that time.
Being the officer-in-charge for emergency
situation (sic) like this, he failed to execute
and supervise the actual abandonship (sic)
procedure. There was no announcement at
 the public address system of abandonship
(sic), no orderly distribution of life jackets
and no orderly launching of life rafts. The
witnesses have confirmed this finding on
their sworn statements.
There was miscalculation in judgment on the
part of the Captain when he erroneously
navigated the ship at her last crucial
moment. x x x
To aggravate his case, the Captain, having
full command and responsibility of the MV
Princess of the Orient, had failed to ensure
the proper execution of the actual
abandoning of the ship.
The deck and engine officers (Second Mate,
Third Mate, Chief Engineers, Second
Engineer, Third Engineer and Fourth
Engineer), being in charge of their
respective abandonship (sic) post, failed to
supervise the crew and passengers in the
proper execution of abandonship (sic)
procedure.
The Radio Officer (spark) failed to send the
SOS message in the internationally accepted
communication network (VHF Channel 16).
Instead, he used the Single Side Band (SSB)
radio in informing the company about the
emergency situation. x x x
x35chanroblesvirtuallawlibrary
The aforestated negligent acts of the officers and crew of M/V
Princess of the Orient could not be ignored in view of the
extraordinary duty of the common carrier to ensure the safety
of the passengers. The totality of the negligence by the
officers and crew of M/V Princess of the Orient, coupled with
the seeming indifference of the petitioner to render assistance
to Sesante,36 warranted the award of moral damages.
While there is no hard-and-fast rule in determining what is a
fair and reasonable amount of moral damages, the discretion
to make the determination is lodged in the trial court with the
limitation that the amount should not be palpably and
scandalously excessive. The trial court then bears in mind that
moral damages are not intended to impose a penalty on the
wrongdoer, or to enrich the plaintiff at the expense of the
defendant.37 The amount of the moral damages must always
reasonably approximate the extent of injury and be
proportional to the wrong committed.38chanrobleslaw
The Court recognizes the mental anguish, agony and pain
suffered by Sesante who fought to survive in the midst of the
raging waves of the sea while facing the immediate prospect
of losing his life. His claim for moral and economic vindication
is a bitter remnant of that most infamous tragedy that left
hundreds of families broken in its wake. The anguish and
moral sufferings he sustained after surviving the tragedy
would always include the memory of facing the prospect of his
death from drowning, or dehydration, or being preyed upon by
sharks. Based on the established circumstances, his survival
could only have been a miracle wrought by God's grace, by
which he was guided in his desperate swim for the safety of
the shore. But even with the glory of survival, he still had to
grapple with not just the memory of having come face to face
with almost certain death, but also with having to answer to
the instinctive guilt for the rest of his days of being chosen to
live among the many who perished in the
tragedy.39chanrobleslaw
While the anguish, anxiety, pain and stress experienced by
Sesante during and after the sinking cannot be quantified, the
moral damages to be awarded should at least approximate the
reparation of all the consequences of the petitioner's
negligence. With moral damages being meant to enable the
injured party to obtain the means, diversions or amusements
in order to alleviate his moral and physical sufferings,40 the
Court is called upon to ensure that proper recompense be
allowed to him, through his heirs. For this purpose, the
amount of P1,000,000.00, as granted by the RTC and affirmed
by the CA, is maintained.
The petitioner contends that its liability for the loss of
Sesante's personal belongings should conform with Article
1754, in relation to Articles 1998, 2000 to 2003 of the Civil
Code, which provide:ChanRoblesVirtualawlibrary
Article 1754. The provisions of Articles 1733
to 1753 shall apply to the passenger's
baggage which is not in his personal custody
or in that of his employees. As to other
baggage, the rules in Articles 1998 and 2000
to 2003 concerning the responsibility of
hotel-keepers shall be applicable.
xxxx
Article 1998. The deposit of effects made by
travellers in hotels or inns shall also be
regarded as necessary. The keepers of
hotels or inns shall be responsible for them
as depositaries, provided that notice was
given to them, or to their employees, of the
effects brought by the guests and that, on
the part of the latter, they take the
precautions which said hotel-keepers or their
substitutes advised relative to the care and
vigilance of their effects.
xxxx
Article 2000. The responsibility referred to in
the two preceding articles shall include the
loss of, or injury to the personal property of
the guests caused by the servants or
employees of the keepers of hotels or inns
as well as by strangers; but not that which
may proceed from any force majeure. The
fact that travellers are constrained to rely on
the vigilance of the keeper of the hotel or
inn shall be considered in determining the
degree of care required of him.
Article 2001. The act of a thief or robber,
who has entered the hotel is not
deemed force majeure, unless it is done with
the use of arms or through an irresistible
force.
Article 2002. The hotel-keeper is not liable
for compensation if the loss is due to the
acts of the guest, his family, servants or
visitors, or if the loss arises from the
character of the things brought into the
hotel.
Article 2003. The hotel-keeper cannot free
himself from responsibility by posting notices
to the effect that he is not liable for the
articles brought by the guest. Any stipulation
 to the contrary between the hotel-keeper
and the guest whereby the responsibility of
the former as set forth in Articles 1998 to
2001 is suppressed or diminished shall be
void.
The petitioner denies liability because Sesante's belongings
had remained in his custody all throughout the voyage until
the sinking, and he had not notified the petitioner or its
employees about such belongings. Hence, absent such notice,
liability did not attach to the petitioner.
Is notification required before the common carrier becomes
liable for lost belongings that remained in the custody of the
passenger?
We answer in the negative.
The rule that the common carrier is always responsible for the
passenger's baggage during the voyage needs to be
emphasized. Article 1754 of the Civil Code does not exempt
the common carrier from liability in case of loss, but only
highlights the degree of care required of it depending on who
has the custody of the belongings. Hence, the law requires the
common carrier to observe the same diligence as the hotel
keepers in case the baggage remains with the passenger;
otherwise, extraordinary diligence must be
exercised.41 Furthermore, the liability of the common carrier
attaches even if the loss or damage to the belongings resulted
from the acts of the common carrier's employees, the only
exception being where such loss or damages is due to force
majeure.42chanrobleslaw
In YHT Realty Corporation v. Court of Appeals ,43 we declared
the actual delivery of the goods to the innkeepers or their
employees as unnecessary before liability could attach to the
hotelkeepers in the event of loss of personal belongings of
their guests considering that the personal effects were inside
the hotel or inn because the hotelkeeper shall remain
accountable.44 Accordingly, actual notification was not
necessary to render the petitioner as the common carrier liable
for the lost personal belongings of Sesante. By allowing him to
board the vessel with his belongings without any protest, the
petitioner became sufficiently notified of such belongings. So
long as the belongings were brought inside the premises of
the vessel, the petitioner was thereby effectively notified and
consequently duty-bound to observe the required diligence in
ensuring the safety of the belongings during the voyage.
Applying Article 2000 of the Civil Code, the petitioner assumed
the liability for loss of the belongings caused by the negligence
of its officers or crew. In view of our finding that the
negligence of the officers and crew of the petitioner was the
immediate and proximate cause of the sinking of the M/V
Princess of the Orient, its liability for Sesante's lost personal
belongings was beyond question.
The petitioner claims that temperate damages were
erroneously awarded because Sesante had not proved
pecuniary loss; and that the CA merely relied on his self-
serving testimony.
The award of temperate damages was proper.
Temperate damages may be recovered when some pecuniary
loss has been suffered but the amount cannot, from the
nature of the case, be proven with certainty.45 Article 222446 of
the Civil Code expressly authorizes the courts to award
temperate damages despite the lack of certain proof of actual
damages.47chanrobleslaw
Indubitably, Sesante suffered some pecuniary loss from the
sinking of the vessel, but the value of the loss could not be
established with certainty. The CA, which can try facts and
appreciate evidence, pegged the value of the lost belongings
as itemized in the police report at P120,000.00. The valuation
approximated the costs of the lost belongings. In that context,
the valuation of P120,000.00 is correct, but to be regarded as
temperate damages.
In fine, the petitioner, as a common carrier, was required to
observe extraordinary diligence in ensuring the safety of its
passengers and their personal belongings. It being found
herein short of the required diligence rendered it liable for the
resulting injuries and damages sustained by Sesante as one of
its passengers.
Should the petitioner be further held liable for exemplary
damages?
In contracts and quasi-contracts, the Court has the discretion
to award exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or malevolent
manner.48 Indeed, exemplary damages cannot be recovered as
a matter of right, and it is left to the court to decide whether
or not to award them.49 In consideration of these legal
premises for the exercise of the judicial discretion to grant or
deny exemplary damages in contracts and quasi-contracts
against a defendant who acted in a wanton, fraudulent,'
reckless, oppressive, or malevolent manner, the Court hereby
awards exemplary damages to Sesante.
First of all, exemplary damages did not have to be specifically
pleaded or proved, because the courts had the discretion to
award them for as long as the evidence so warranted.
In Marchan v. Mendoza,50 the Court has relevantly
discoursed:ChanRoblesVirtualawlibrary
x x x. It is argued that this Court is
without jurisdiction to adjudicate this
exemplary damages since there was no
allegation nor prayer, nor proof, nor
counterclaim of error for the same by
the appellees. It is to be observed
however, that in the complaint,
plaintiffs "prayed for such other and
further relief as this Court may deem
just and equitable." Now, since the
body of the complaint sought to
recover damages against the
defendant-carrier wherein plaintiffs
prayed for indemnification for the
damages they suffered as a result of
the negligence of said Silverio Marchan
who is appellant's employee; and since
exemplary damages is intimately
connected with general damages,
plaintiffs may not be expected to single
out by express term the kind of
damages they are trying to recover
against the defendant's carrier. Suffice
it to state that when plaintiffs prayed
in their complaint for such other relief
and remedies that may be availed of
under the premises, in effect,
therefore, the court is called upon to
exercise and use its discretion whether
the imposition of punitive or exemplary
damages even though not expressly
prayed or pleaded in the plaintiffs'
complaint.
x x x It further appears that the
 amount of exemplary damages need
not be proved, because its
determination depends upon the
amount of compensatory damages that
may be awarded to the claimant. If the
amount of exemplary damages need
not be proved, it need not also be
alleged, and the reason is obvious
because it is merely incidental or
dependent upon what the court may
award as compensatory damages.
Unless and until this premise is
determined and established, what may
be claimed as exemplary damages
would amount to a mere surmise or
speculation. It follows as a necessary
consequence that the amount of
exemplary damages need not be
pleaded in the complaint because the
same cannot be predetermined. One
can merely ask that it be determined
by the court if in the use of its
discretion the same is warranted by
the evidence, and this is just what
appellee has done. (Bold underscoring
supplied for emphasis)
And, secondly, exemplary damages are designed by our civil
law to "permit the courts to reshape behavior that is socially
deleterious in its consequence by creating negative incentives
or deterrents against such behavior."51 The nature and
purpose for this kind of damages have been well-stated
in People v. Dalisay,52 to wit:ChanRoblesVirtualawlibrary
Also known as 'punitive' or 'vindictive'
damages, exemplary or corrective
damages are intended to serve as a
deterrent to serious wrong doings, and
as a vindication of undue sufferings
and wanton invasion of the rights of an
injured or a punishment for those
guilty of outrageous conduct. These
terms are generally, but not always, used
interchangeably. In common law, there is
preference in the use of exemplary damages
when the award is to account for injury to
feelings and for the sense of indignity and
humiliation suffered by a person as a result
of an injury that has been maliciously and
wantonly inflicted, the theory being that
there should be compensation for the hurt
caused by the highly reprehensible conduct
of the defendant - associated with such
circumstances as willfulness, wantonness,
malice, gross negligence or recklessness,
oppression, insult or fraud or gross fraud -
that intensifies the injury. The terms
punitive or vindictive damages are often
used to refer to those species of damages
that may be awarded against a person to
punish him for his outrageous conduct. In
either case, these damages are
intended in good measure to deter the
wrongdoer and others like him from
similar conduct in the future. (Bold
underscoring supplied for emphasis)
The BMI found that the "erroneous maneuvers" during the ill-
fated voyage by the captain of the petitioner's vessel had
caused the sinking. After the vessel had cleared Limbones
Point while navigating towards the direction of Fortune Island,
the captain already noticed the listing of the vessel by three
degrees to the portside of the vessel, but, according to the
BMI, he did not exercise prudence as required by the situation
in which his vessel was suffering the battering on the
starboard side by big waves of seven to eight meters high and
strong southwesterly winds of 25 knots. The BMI pointed out
that he should have considerably reduced the speed of the
vessel based on his experience about the vessel - a close-type
ship of seven decks, and of a wide and high superstructure -
being vulnerable if exposed to strong winds and high waves.
He ought to have also known that maintaining a high speed
under such circumstances would have shifted the solid and
liquid cargo of the vessel to port, worsening the tilted position
of the vessel. It was only after a few minutes thereafter that
he finally ordered the speed to go down to 14 knots, and to
put ballast water to the starboard-heeling tank to arrest the
continuous listing at portside. By then, his moves became an
exercise in futility because, according to the BMI, the vessel
was already listing to her portside between 15 to 20 degrees,
which was almost the maximum angle of the vessel's loll. It
then became inevitable for the vessel to lose her stability.
The BMI concluded that the captain had executed several
starboard maneuvers despite the critical situation of the
vessel, and that the maneuvers had greatly added to the tilting
of the vessel. It observed:ChanRoblesVirtualawlibrary
x x x In the open seas, with a fast
speed of 14 knots, advance maneuvers
such as this would tend to bring the
body of the ship in the opposite side.
In navigational terms, this movement
is described as the centripetal force.
This force is produced by the water
acting on the side of the ship away
from the center of the turn. The force is
considered to act at the center of
lateral resistance which, in this case, is
the centroid of the underwater area of
the ship's side away from the center of
the turn. In the case of the Princess,
when the Captain maneuvered her to
starboard, her body shifted its weight
to port. Being already inclined to an
angle of 15 degrees, coupled with the
instantaneous movement of the ship,
the cargoes below deck could have
completely shifted its position and
weight towards portside. By this time,
the ship being ravaged simultaneously
by ravaging waves and howling winds
on her starboard side, finally lost her
grip.53chanroblesvirtuallawlibrary
Clearly, the petitioner and its agents on the scene acted
wantonly and recklessly. Wanton and reckless are virtually
synonymous in meaning as respects liability for conduct
towards others.54Wanton means characterized by extreme
recklessness and utter disregard for the rights of others; or
marked by or manifesting arrogant recklessness of justice or of
rights or feelings of others.55 Conduct is reckless when it is an
extreme departure from ordinary care, in a situation in which a
high degree of danger is apparent. It must be more than any
mere mistake resulting from inexperience, excitement, or
confusion, and more than mere thoughtlessness or
inadvertence, or simple inattention.56chanrobleslaw
The actuations of the petitioner and its agents during the
incident attending the unfortunate sinking of the M/V Princess
of the Orient were far below the standard of care and
circumspection that the law on common carriers demanded.
Accordingly, we hereby fix the sum of P1,000,000.00 in order
to serve fully the objective of exemplarity among those
engaged in the business of transporting passengers and cargo
by sea. The amount would not be excessive, but proper. As
the Court put it in Pereña v. Zarate:57
Anent the P1,000,000.00 allowed as
exemplary damages, we should not reduce
the amount if only to render effective the
desired example for the public good. As a
common carrier, the Perenas needed to be
vigorously reminded to observe their duty to
exercise extraordinary diligence to prevent a
similarly senseless accident from happening
again. Only by an award of exemplary
damages in that amount would suffice to
instill in them and others similarly situated
like them the ever-present need for greater
and constant vigilance in the conduct of a
business imbued with public interest. 58 (Bold
underscoring supplied for emphasis)
WHEREFORE, the Court AFFIRMS the decision promulgated
on June 27, 2005 with the MODIFICATIONS that: (a) the
amount of moral damages is fixed at P1,000,000.00; (b) the
amount of P1,000,000.00 is granted as exemplary damages;
and (c) the sum of P120,000.00 is allowed as temperate
damages, all to be paid to the heirs of the late Napoleon
Sesante. In addition, all the amounts hereby awarded shall
earn interest of 6% per annum from the finality of this
decision until fully paid. Costs of suit to be paid by the
petitioner.

SO ORDERED.chanRoblesvirtualLawlibrary

Sereno, C.J., Leonardo-De Castro, Perlas-Bernabe ,

and Caguioa, JJ., concur.