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The packages left were received by Cordoba from the customhouse on the
29th of June.
Warner declined to settle with the Cordoba regarding the missing goods
because the protested packages were not opened and examined before
they left the ships side as required by the bill of lading and also because
the claim of loss was not presented within 24 hours after delivery of the
goods to the lighter for transportation to the customs house.
Trial court ruled in favor of defendants.
ISSUE:
HELD:
YES
RATIO:
The bill of lading provided that in event of any packages being refused
on account of condition, they are, if in bad order to be examined on board
the steamer and contents certified to, when steamers responsibility will
cease gave the defendants the undoubted right to retain on board and
examine all refused packages
This right however being exclusively for their own protection, they could
waive it and they did waive it by discharging the goods, notwithstanding
the protest, and accepting a receipt which specified on its face that the
cases were in bad condition when delivered for transportation to the
custom house
Also, plaintiff presented its claim not later than the 27th of June and he
did not receive consignment within the meaning of ART 366 of the
Commercial Code before the 29th of the same month
The discharge of the merchandise into the lighters of the Carman and Co.
For delivery at the custom house under customs supervision and control
was not the receipt of the merchandise contemplated under ART 366
The packages were in the hands of the government and their owner could
not exercise dominion over them until duties were paid
The time prescribe by ART 366 within which claims must be made does not
begin until the consigner has received such possession of the merchandise
that he may exercise over it the ordinary control pertinent to ownership
Justice CHICO-NAZARIO
Facts:
Philippine Charter Insurance Corporation is a domestic corporation
engaged in the business of non-life insurance. Chemoil Lighterage
Corporation is also a domestic corporation engaged in the transport of
goods.
On 24 January 1991, Samkyung Chemical Company, Ltd(Korean Company)
shipped 2 separate cargos of DOP chemical on board MT "TACHIBANA"
under 2 separate Bills of Lading bound for the Philippines. The consignee
was Plastic Group Phils., Inc. (PGP) in Manila. PGP insured the cargo with
herein petitioner Philippine Charter Insurance Corporation against all
risks.
The ocean tanker MT "TACHIBANA" unloaded the cargo to Tanker Barge LB1011 of respondent Chemoil Lighterage Corporation, which shall transport
the same to Del Pan Bridge in Pasig River. Tanker Barge LB-1011 would
unload the cargo to tanker trucks, also owned by the respondent, and haul
it by land to PGPs storage tanks in Calamba, Laguna.
Upon inspection by PGP, the samples from the shipment revealed that the
cargo was damaged. PGP sent Philippine Charter a letter for an insurance
claim.
PGP requested an independent insurance adjuster, the GIT Insurance
Adjusters, Inc. (GIT), to conduct a Quantity and Condition Survey of the
shipment. On 22 February 1991, GIT issued a Report, part of which states:
As unloading progressed, it was observed on February 14, 1991 that DOP
samples taken were discolored from yellowish to amber. Inspection of
cargo tanks showed manhole covers of ballast tanks ceilings loosely
secured. Furthermore, it was noted that the rubber gaskets of the
manhole covers of the ballast tanks re-acted to the chemical causing
shrinkage thus, loosening the covers and cargo ingress to the rusty ballast
tanks
The plant representative of PGP allegedly made a phone call to Chemoil as
notice of contamination of the goods at the time of the delivery of the
goods. This was denied by the witness of Chemoil.
On 13 May 1991, Philippine Charter paid PGP the amount of P5,000,000.00
as full and final payment for the loss. PGP issued a Subrogation Receipt to
Phil. Charter. While Chemoil was paid by PGP for the formers services.
Philippine Charter then filed a collection suit against Chemoil.
evidence that will precisely and ultimately point to the conclusion that the
notice of claim was timely relayed or filed.
The testimony of Chan in court proved that he had no personal knowledge
that the drivers of the respondent were informed of the contamination.
The object sought to be attained by the requirement of the submission of
claims in pursuance of this article is to compel the consignee of goods
entrusted to a carrier to make prompt demand for settlement of alleged
damages suffered by the goods while in transport, so that the carrier will
be enabled to verify all such claims at the time of delivery or within
twenty-four hours thereafter, and if necessary fix responsibility and secure
evidence as to the nature and extent of the alleged damages to the goods
while the matter is still fresh in the minds of the parties.
Where the contract of shipment contains a reasonable requirement of
giving notice of loss of or injury to the goods, the giving of such notice is a
condition precedent to the action for loss or injury or the right to enforce
the carriers liability. Such requirement is not an empty formalism. The
fundamental reason or purpose of such a stipulation is not to relieve the
carrier from just liability, but reasonably to inform it that the shipment
has been damaged and that it is charged with liability therefore, and to
give it an opportunity to examine the nature and extent of the injury. This
protects the carrier by affording it an opportunity to make an
investigation of a claim while the matter is fresh and easily investigated
so as to safeguard itself from false and fraudulent claims.
The filing of a claim with the carrier within the time limitation therefore
actually constitutes a condition precedent to the accrual of a right of
action against a carrier for loss of, or damage to, the goods. The shipper
or consignee must allege and prove the fulfillment of the condition. If it
fails to do so, no right of action against the carrier can accrue in favor of
the former. The aforementioned requirement is a reasonable condition
precedent; it does not constitute a limitation of action.
The second paragraph of Article 366 of the Code of Commerce is also
edifying. It is not only when the period to make a claim has elapsed that
no claim whatsoever shall be admitted, as no claim may similarly be
admitted after the transportation charges have been paid.
In this case, there is no question that the transportation charges have
been paid, as admitted by Phil. Charter, and the corresponding official
receipt duly issued. But the Phil. Charter is of the view that the payment
for services does not invalidate its claim. It contends that under the
second paragraph of Article 366 of the Code of Commerce, it is clear that
such removal shall be prima facie evidence of the delivery by the carrier of
the goods as described in the bill of lading. If the loss or damage is not
apparent, the notice must be given within three days of the delivery.
Said notice of loss or damage may be endorsed upon the receipt of the
goods given by the person taking delivery thereof.
The notice in writing need not be given if the state of the goods has at the
time of their receipt been the subject of joint survey or inspection.
UCPB seizes upon the last paragraph which dispenses with the written
notice if the state of the goods has been the subject of a joint survey
which, in this case, was the opening of the shipment in the presence of an
Eagle Express representative. It should be noted at this point that the
applicability of the above-quoted provision of the COGSA was not raised as
an issue by UCPB before the trial court and was only cited by UCPB in its
Memorandum in this case.
UCPB, however, is ambivalent as to which party Eagle Express represented
in the transaction. By its own manifestation, East Asiatic, and not Eagle
Express, acted as the agent through which summons and court notices
may be served on DAMCO. It would be unjust to hold that Eagle Expresss
knowledge of the damage to the cargo is such that it served to preclude or
dispense with the 24-hour notice to the carrier required by Art. 366 of the
Code of Commerce. Neither did the inspection of the cargo in which Eagle
Expresss representative had participated lead to the waiver of the written
notice under the Sec. 3(6) of the COGSA. Eagle Express, after all, had
acted as the agent of the freight consolidator, not that of the carrier to
whom the notice should have been made.
At any rate, the notion that the request for bad order survey and turn over
survey of bad cargoes signed by Eagle Expresss representative is
construable as compliant with the notice requirement under Art. 366 of
the Code of Commerce was foreclosed by the dismissal of the complaint
against DAMCOs representative, East Asiatic.
Finally, UCPBs misrepresentation that the applicability of the Code of
Commerce was not raised as an issue before the trial court warrants the
assessment of double costs of suit against it.
b. Such notation serves the purpose of a claim to afford the carrier or depositary a
reasonable opportunity as well as facilities to check the validity of the claim while
the facts are still fresh in the minds of the persons who took part in the transaction
and the documents are still available.
c. According to jurisprudence, when there are exterior signs of damage to the
goods, the notation on the delivery receipt is a substantial compliance with the
provisions of Article 366 of the Code of Commerce.
149 Yueng Sheng & Exchange Co. v. Urrutia & Co
FACTS:
PRELIMINARY FACTS:
The captain and engineer of steamer 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 steamer Cebu.
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
However, the announcement did not prevent the crews from containing
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.
While the Cebu was approaching Minas de Batan, the Buen
Viaje approached the other side of the Minas de Batan, also to take on
cargo from the latter, causing no damage to the Minas de Batan or to her
cargo, in spite of the condition of the sea and of the weather.
Y.B. Sontua loaded rice on the Minas de Batan, which sailed from Saigon,
and arrived in the port of Manila with the said cargo of rice and in good
condition.
While the said Minas de Batan lay in the inner harbor of Manila, on July,
21, 1906, the steamer Cebu approached her, carrying her port anchor
penetrated the starboard side of the Minas de Batan, and as a result the
water entered the said steamer, and wet a portion of her cargo of rice;
5,008 sacks, valued at P27,193.93, were completely ruined.
Yueng Sheng considering steamer Cebu liable and responsible for the acts
of its officers and crew, who, on account of their recklessness and
negligence caused damages occasioned to the steamer Minas de Batan.
The lower court ruled in favor G. Urrutia. Yueng Sheng appealed.
Yueng Sheng contended 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."
ISSUE:
whether the Yueng Sheng has a right of action against the G. Urrutia &
Co.,for damages 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.
HELD:
NO.
G. Urrutia & Co. is not the agent of steamer Cebu
If G. Urrutia & Co. by virtue of the above mentioned contract, became the
agents of Cebu, then they must respond for the damages claimed,
because the owner and the agent are civilly responsible for the acts of the
captain.
But G. Urrutia & Co. could not in any way exercise the powers of 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
Article 603 authorizes the agent to the discharge at will, before the vessel
goes out to sea, the captain and members of the crew in whose contracts
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.
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.
Three bills of lading were issued by the ship-agent in the Philippines, Maritime
Factors, Inc.
The shipment covered by Bill of Lading No. 2 was discharged in Iloilo City complete
and in good order and condition.
However, the shipments covered bu Bill of Lading Nos. 1 and 3 were discharged in
Manila in bad order and condition, caked, hardened and lumpy, discolored, and
contaminated with rust and dirt. Damages were valued at PhP683,056.29.
The Petitioner then filed a complaint with the trial court for breach of contract of
carriage against Maritime Factors, Inc. (not included as respondent in this case) as
ship agent in the Philippines for the owners of the vessel M/V Liliana Dimitrova,
while Respondent, was impleaded as charterer f the said vessel and proper party to
accord petitioner complete relief.
Maritime Factors, Inc. filed its answer to the complaint, while private respondent
filed a motion to dismiss, on the grounds that the complaint states no cause of
action, and that petitioner should comply with the Arbitration clause in the sales
contract.
The Motion to dismiss was opposed by the Petitioner contending the inapplicability
of the arbitration clause inasmuch as the cause of action did not arise from a
violation of the terms of the sales contract but rather for claims of cargo damages
where there is nor arbitration agreement.
The trial court denied the Motion to Dismiss.
Elevationg the matter to the CA, Petitioners complaint was dismissed. The CA found
that the arbitration provision in the contract and the bills of lading is applicable.
ISSUE/S:
Whether or not the phrase any dispute arising under this contract in the
arbitration clause of the sales contract covers a cargo claim against the vessel for
breach of contract of carriage. YES.
HELD:
The sales contract is comprehensive enough to include claims for damages arising
from carriage and delivery of the goods. As a general rule, the seller has the
obligation to transmit the goods to the buyer, and concomitant thereto, the
contracting of the carrier to deliver the same.
Assuming arguendo, that the liability of respondent is not based on the sales
contract, but rather on the contract of carriage, being the charterer of the vessel MV
Liliana Dimitrova it would therefore material to show that kind of charter party the
respondent had with the shipowner to determine Respondents liability.
During Suevias journey, war broke out between Russia and Germany. Suevias
captain ordered the ship to be placed on neutral ground, which happened to be the
nearest port of Manila. IHCR demanded HAL to forward the cargo to Vladivostock, if
not by the Suevia, then by some other steamer. HAL declined. IHCR then sued HAL
in Manila.
The RTC of Manila issued a writ of replevin allowing IHCR to recover its cargoes. The
cargoes were then able to reach Vladivostock through the contracting by IHCR of a
separate ship to continue the transport. HAL claimed that IHCR is liable for general
averages for the expenses of the Suevia while at the port of Manila, amounting to
P63,024.50. On the other hand, IHCR claimed that HAL is liable for the expenses it
incurred in contracting a different shipping line.
ISSUES:
Whether or not the cargo belonging to IHCR is liable to be made to contribute, by
way of general average, to the costs and expenses incurred by reason of the
internment of the Suevia in the port of Manila; and
Whether or not the defendant is liable for the expenses of transferring the cargo to
another ship and transporting it to the port of destination.
HELD:
No. The agricultural machinery sought to be transported, being neutral goods, was
not liable to forfeiture in the event of capture by the enemies of the ships flag.
When the master of the Suevia decided to take refuge in the port of Manila, he
acted exclusively with a view to the protection of his vessel. There was no
common danger to the ship and cargo; and therefore it was not a case for a general
average.
Yes. The original bill of lading issued to the shipper in Baltimore contained the
provision that the goods should be forwarded from Hamburg to Vladivostock at the
steamer's expense and this term appeared not only in paragraph 17 in the body of
the bill of lading but was also conspicuously printed in the shipping direction on the
face of the instrument. Further, in the tenth paragraph of the General Rules
contained in the bill of lading which was issued at Hamburg upon account of
the Suevia, for the forwarding of the cargo to Vladivostock, there is found the
following provision: If on account of war disturbances the master is in doubt as
to whether he can safely reach the port of destination or proceed thence on his
voyage unmolested he is at liberty to discharge the goods at another place or
harbour which he may consider safe, whereby his obligations are fulfilled If the
goods for any reason whatsoever cannot be discharged at the port of destination,
the ship is at liberty to forward them by some other means to the port of
destination, for ship's account but not at ship's risk. Lastly, in the Special Clauses
section of the bill of lading, it was provided that The shipowner further to be
entitled to forward the goods by rail from the port of discharge to the final place of
destination, at his expense, but at the risk of the owner, shipper or consignee.
By the terms of the contract of affreightment the defendant company was bound to
forward the cargo to Vladivostock at the steamer's expense, not necessarily by a
steamer belonging to the defendant company; and it does not by any means follow
that it is not liable for the expense incurred by the owner in completing the
unfinished portion of the voyage in another ship. Furthermore, in the special
condition to rule X, the defendant company recognizes its responsibility with respect
to the forwarding of goods; and where it is said in paragraph X that the master's
obligation will be fulfilled by discharge in another port, it must be understood that
reference is had to the obligations incident to the carriage of the goods on the
instant voyage.
In the present case, the court finds no reason for holding HAL as being absolved by
the outbreak of war from its contractual obligation to bear the expenses of
forwarding the goods to Vladivostock, even though it is immediately absolved from
the duty to convey them on its own ship.
154. Litonjua Shipping Company, Inc. vs. National Seamen Board (NSD)
Doctrine:
Facts: Litonjua is the duly appointed crewing Managing Office of Fairwind. The M/V
Dufton Bay is a vessel of foreign registry owned by Mullion. While the Dufton Bay
was in Cebu, the vessels master recruited Candongo to serve as Third Engineer for
a period of 12 months. However, before the expiration of his contract, he was
discharged in Malaysia on the ground by owners arrange.
Candongon filed a complaint before NSD for violation of contract against
Mullion and Litonjua as agent of the shipowner and charterer of the vessel. At first,
Litonjua was declared in default by the hearing officer and rendered judgment
against Litonjua for dismissal without sufficient cause. On appeal, the order of
default was lifted but affirmed the initial decision. It found that Litonjua is the
authorized Philippine agent of Fairwind, chartere of the vessel Dufton Bay as
evidenced by complainants wage account, which indicated Litonjua authorized to
pay wages. Hence, Litonjua filed for petition for certiorari.
Issue: WON Litonjua can be made liable.
Ruling: Yes. Litonjua argues that being the agent of the charterer and not of the
shipowner, it should not have been held liable on the contract of employment of
Candongon.
SC based their decision on the ff:
First, the charter party which existed between Mullion and Fairwind. In
modern maritime law and usage, there are 3 distinguishable types of charter party
a. bareboat or demise charter; b. time charter; c. voyage or trip charter. A bareboat
or demise charter is where the shipowner turns over possession of his vessel to the
charterer, with the latter undertaking to provide crew, vituals, supplies and fuel
during the term of the charter. It is well settled that in a demise or bare boat
charter, the charterer is treated as owner pro hac vice of the vessel, the charterer
assuming in large measure the customary rights and liablilities of the shipowner in
relation to third persons who have dealt with him or with the vessel. In such case,
the Master of the vessel is the agent of the charterer and not of the shipowner. The
owner pro hac vice is held liable for the expenses of the voyage including the wages
of the seamen. Since Litonjua did not present a copy of the charter party, the court
assumed that they entered into a bare boat or demise party on the theory that
submission of such copy will work against them. Treating Fairwind as owner pro hac
vice, Litonjua as Phil. agent of the charterer is liable.
Moreover, under clause No. 8 of the charter party, provides: "Owners shall
have a lien on the cargo for freight, deadfreight, demurrage, and damages
for detention. Charterers shall remain responsible for dead-freight and
demurrage(including damages for detention), incurred at the port of
ground that an amendment would violate the Tariff and Customs Code
relating to unmanifested cargo.
Later however, it agreed to add a footnote reading "Two container vans
carried by other vessel to complete the shipment of twelve containers
under the bill of lading."
The manifest was approved for release only on July 3.
On July 11, when the broker tried to secure the release of the cargo, it was
informed by Smith, Belle, & Co. that the free time for removing the
containers from the container yard had expired on June 26 for the first
vessel, and on July 9, in the case of the 2nd vessel, and that demurrage
charges had begun to run a day after the free time, respectively.
On July 13, La Suerte paid P47,680 representing the total demurrage
charges on all the containers, but it was not able to obtain its goods. It
was able to obtain only a partial release of the cargo because of the
breakdown of the arrastre's equipment at the container yard.
On July 16, La Suerte sent a letter to Smith, Bell & Co. requesting
reconsideration of the demurrage charges, but was refused.
Subsequently, La Suerte refused to pay any more demurrage charges on
the ground that the delay in the release of the cargo was not due to its
fault but to the breakdown of the equipment at the container yard.
La Suerte filed this suit in the RTC for specific performance to compel
respondents to release 7 container vans consigned to it free of charge.
In their answer, private respondents claimed that they were not free to
waive these charges because under the United States Shipping Act of
1916 it was unlawful for any common carrier engaged in transportation
involving the foreign commerce to charge or collect a greater or lesser
compensation that the rates and charges specified in its tariffs on file with
the Federal Maritime Commission.
RTC dismissed petitioner's complaint. It cited the bill of lading which
provided:
23. The ocean carrier shall have a lien on the goods, which shall survive
delivery, for all freight, dead freight, demurrage, damages, loss, charges,
expenses and any other sums whatsoever payable or chargeable to or for
the account of the Merchant under this bill of lading . . . .
RTC likewise invoked clause 29 of the bill of lading which provided:
29. . . .The terms of the ocean carrier's applicable tariff, including tariffs
covering intermodal transportation on file with the Federal Maritime
Commission and the Interstate Commission or any other regulatory body
which governs a portion of the carriage of goods, are incorporated herein.
18. The RTC held that the bill of lading was the contract between the
parties and, therefore, petitioner was liable for demurrage charges. It
rejected petitioner's claim of force majeure in such a way that the delay in
the delivery of the containers was caused by the breaking down of the
equipment of the arrastre operator. The Court reasoned that still plaintiff
has to pay the corresponding demurrage charges. The possibility that the
equipment would break down was not only foreseeable, but actually,
foreseen, and was not caso fortuito.
CA affirmed.
ISSUE: W/N La Suerte is liable for demurrage for delay in removing its
cargo from the containers - YES but only for the period July 3 - 13, 1979
with respect to ten containers and from July 10 - July 13, 1979, in respect
of two other containers
HELD:
Payment of demurrage
La Suerte's contention is that the bill of lading does not provide for the
payment of container demurrage, as Clause 23 of the bill of lading only
says "demurrage," i.e., damages for the detention of vessels. Here there
is no detention of vessels. It invokes a case where SC defined
"demurrage" as follows:
Demurrage, in its strict sense, is the compensation provided for in the
contract of affreightment for the detention of the vessel beyond the time
agreed on for loading and unloading. Essentially, demurrage is the claim
for damages for failure to accept delivery
Whatever may be the merit of petitioner's contention, the fact is that
clause 29(a) also of the bill of lading, in relation to Rule 21 of the Far East
Conference Tariff , specifically provides for the payment by the consignee
of demurrage for the detention of containers and other equipment after
the so-called "free time."
A bill of lading is both a receipt and a contract. As a contract, its terms
and conditions are conclusive on the parties, including the consignee. The
enforcement of the rules of the Far East Conference and the Federal
Maritime Commission is in accordance with R.A. 1407 which declares that
the Philippines, in common with other maritime nations, recognizes the
The case at bar involves a dispute over the ownership of a lorcha (a kind of boat)
named Leal.
As found by the trial court, the lorcha formerly belonged to Francisco Elorriaga. After
his death, his widow decided to sell the boat. After a series of sales, it eventually
ended up with Pedro Endeisa.
Meanwhile, Jesusa Laureano secured the attachment of the lorcha as being property
of Luis Rivera. It was sold at public auction by the Sheriff Jose Taleon despite notice
from Pedro Endeisa that the lorcha belonged to him.
Hence, the present suit filed by Endeisa claiming ownership over the lorcha.
Luis Rivera claims that he is the owner of the boat since he was the one in
possession and not Endeisa.
Issue: Who is the rightful owner of the lorcha?
Held: Pedro Endeisa.
Luis Rivera indeed had possession of the lorcha at the time it was attached and
sold. However, was no proof as to when the said possession commenced and how it
was acquired.
Paragrah 2 of Article 573 of the Code of Commerce states that the ownership of a
vessel may be acquired by possession. However such possession must be in good
faith, continued for three years, and with good title duly recorded. None of these
requisites have been proven in favor of possession of Luis Rivera.
Hence, Pedro Endeisa is entitled to the possession of the lorcha.
After arriving in Saigon, the rice was loaded into the steamer. It then proceeded to
Phu Yen Harbor where she arrived in the afternoon of November 18, 1906. An agent
of P-Company was there and informed the captain that he was going to load 150
cows and 42 carabaos, totaling 202 heads of cattle. The captain allowed the cows
but refused to load the carabaos. The captain and the agent negotiated on the
matter but failed to reach a satisfactory agreement. The agent left the captain at 1
am the following day, November 19, and proceeded to the town of Sung Cau where
the Governor advised him to procure a notary and to make a protest.
The agent returned to Phu Yen at 10 AM that same day, Nov. 19, armed with the
notary and by virtue of which the captain consented to the loading of the carabaos.
However, by then, the weather was already very stormy and no cattle could be
loaded.
The stormy weather continued until Nov. 27 and the cattle could not be loaded
during this time. The steamer already had some cattle on board which were to be
delivered to a certain Lichauco in Manila. Because of the delay, the water supply for
this load of cattle would no longer be enough to nourish them for the journey back
to Manila if the Captain waited any longer. On Nov. 27, the captain decided to leave
Phu Yen, without the 202 heads of cattle that P-Company was expecting.
The vessel arrived in Manila on December 3. As soon as the boat arrived, the
captain applied to Behn Meyer & Co, herein plaintiffs, to act as HIS AGENTS and to
attend to the business while in Manila. Behn Meyer had never before acted as
agents for the steamer.
Meanwhile, S-Company wanted to unload part of the rice in Iloilo and made a
contract with the agents of the shipowner, Sander, Wieler & Co. for such transport
of goods, for HKD 800.
The terms of the original charter called for payment of HKD 9,250 on or before
delivery of the cargo in Manila. S-company did not want to pay until the cargo was
unloaded in Iloilo. On the other hand, Behn Meyer refused to allow the vessel to
leave until payment of the freight and all claims for demurrage had been paid OR
secured.
S-Company therefore deposited Php13,000 with El Banco Espanol-Filipino. The bank
thereafter wrote to Behn Meyer informing them that it guarantees payment of
PHP12,000 in behalf of S-Company if S-Company fails to make payment for the price
stipulated and the demurrage upon completion of the unloading.
The vessel was unloaded in Manila on December 5 and then went to Iloilo. On Dec.
10, Behn Meyer presented to the charterer S-Company an account totaling HKD
12,350 which S-Company refused to pay. Behn Meyer then made a demand against
The Bank which also refused to pay. Behn Meyer thus filed a complaint in court for
collection of payment against The Bank.
S-Company asked to intervene and joined The Bank in opposing the claim. They
denied the allegations of the complaint and set up a counterclaim for damages for
the ship captain's refusal to load the cattle in Phu Yen, thus violating a part of the
terms of the original charter party.
The counterclaim filed by S-Company consisted of:
a.
Lost income it would have gotten from P-Company had the cattle been
delivered
b.
The difference between the value of the rice on the day on which it actually
arrived and the value when it would have arrived had there been no delay in Phu
Yen
c.
The losses which P-Company and Lichauco suffered because of the delay
which resulted to death of some of the cattle and their depreciation value.
d.
The lower court denied the counterclaim and ruled in favor of Behn Meyer and
ordered S-Company and The Bank to pay Php12,081, with interest and costs.
ISSUE:
1.)
Whether the counterclaim set up by S-Company is proper ONLY THE CLAIM
FOR LOST INCOME MAY BE AWARDED
2.)
Whether Behn Meyer can recover freight due to the ship/shipowner from the
charter parties with S-Company - YES
HELD:
1.)
It clearly appears that if the captain had agreed to take the carabaos on
board - when there was enough space for them - he would have left Phu Yen on the
afternoon of November 19 and he would have had enough water for the 4-day
journey back to Manila.
Because of this unreasonable and unexplained refusal of the captain to load the
carabaos, S-Company was deprived of Php2,476 which they were supposed to
receive from P-Company upon completion of the contract between the two.
However, the captain and the ship cannot be held liable for the other claims.
Evidence shows that while in Phu Yen, the captain contacted S-Company, informing
it of the issues in Phu Yen. In reply, S-Company directed the captain to wait at Phu
Yen. After such instruction to wait, the ship cannot be held responsible for damages
that may have arisen because of the delay. ??For the death and depreciation of the
cattle, it was found that Lichauco and P-Company never commenced any action
against S-Company for damages, nor did S-Company pay anything to them. The
court found this claim to be too remote already and reiterated that damages caused
by delay after specific instructions to wait from the charterer S-Company cannot be
attributed to the ship.
As for the claim of demurrage, the court found in evidence that the charter party
provided for nine lay days during which the cargo should be taken on board and
discharged, and for five days of demurrage thereafter at the rate of HKD 250 a day.
S-Companys claim for demurrage is not proper because there was no delay. The 9day provision for lay days was just enough to cover the voyage: 1 day in Saigon, not
more than 2 days in Phu Yen (had the Captain complied and there was no delay)
and not more than 3 days in unloading in Manila, for a total of 6 days. The trip to
Iloilo cannot be counted because that was a special contract. So, even if the delay
in Phu Yen from Nov. 24 to Nov. 27 is counted, still the total number of lay days
would be 9 days, which is the number provided for in the charter party. (The court
started counting the supposed delay from Nov. 24, not counting the period from
Nov. 21-24. I dont know why they didnt count those days).
2.)
S-Company admitted that it owed HKD 9,250 freight for the Saigon-Manila
voyage and an additional HKD 800 for the Manila-Iloilo voyage. Converted to Pesos,
this amounts to PHP10,753.50. From here, the court deducted the lost income due
to S-Company so the total amount that S-Company must pay Behn Meyer is PHP
8,277.50.
There was a brief discussion on whether Behn Meyer can file the suit given that it
was not a party to the original charter party. The court held that Behn Meyer
contracted in its own name with The Bank. There was even evidence shown that the
Bank did not know that Behn Meyer was acting in behalf of another. The case was
filed by Behn Meyer against the Bank based on the letter of guaranty issued by the
bank. Behn Meyer is therefore a real party in interest in this case.
171. K.K. SHELL SEKIYU OSAKA HATSUBAISHO v COURT OF APPEALS,
ATLANTIC VENUS CO., S.A. and THE VESSEL M/V ESTRELLA
(30 JULY 1990)
Ponente: Cortes, J.
FACTS
On 7 Jan 1987, Kumagai Kaiun Kaisha Ltd. (Kumagai), a Japanese corporation, filed a
collection of a sum of money with preliminary attachment against:
Atlantic Venus Co., S.A. (Atlantic), a corporation registered in Panama
The vessel MV Estella (owned by Atlantic)
A motion for reconsideration was filed by Fu Hing and KK Shell, but was denied by
the CA. Hence this appeal.
Fu Hing and the respondents have reached an amicable settlement, thus the SC
only reviewed the case as to KK Shell.
ISSUE: Whether or not KK Shell can be allowed to intervene in the case before the
trial court.
HELD: YES.
RULING:
The Court finds reversible error on the part of the CA in so far as it disallowed KK
Shells intervention in the case before the TC.
1. A reading of the Agency Agreement fails to support the conclusion that KK Shell is
a sub-agent of NSS and is therefore bound by the agreement. No express reference
to the contracting of sub-agents or the applicability of the terms of the agreement,
particularly the choice-of-forum clause, to sub-agents is made in the text of the
agreement. What the contract clearly states are NSS' principal duties, i.e., that it
shall provide for the necessary services required for the husbanding of
Crestamonte's vessels in Japanese ports (section 2.0) and shall be responsible for
fixing southbound cargoes with revenues sufficient to cover ordinary expenses
(section 3.0) [Kindly refer to the original text of the case to see the provisions of the
agency agreement].
Moreover, the complaint-in-intervention filed by K.K. Shell merely alleges that it
provided and supplied the MV Estella with marine diesel oil/fuel, upon request of
NSS who was acting for and as duly appointed agent of Crestamonte. here is thus
no basis for the Court of Appeal's finding, as regards K.K Shell in relation to its
intervention in Civil Case No. 87-38930, that "the sub-agents admitted in their
pleadings that they were appointed as local agent/sub-agent or representatives by
NSS by virtue of said Agency Agreement" . What the Court of Appeals could have
been referring to was K.K. Shell's Urgent Motion for Leave to Intervene dated
February 24, 1987 in another case (Civil Case No. 86-38704) in another court and
involving other vessels (NW Ofelia and MV Christina C), where it was alleged that
K.K. Shell is "one of the representatives of NS Shipping Corporation for the supply of
bunker oil, fuel oil, provisions and other necessaries to vessels of which NS Shipping
Corporation was the general agent." However, this allegation does not conclusively
establish a sub-agency between NSS and K.K. Shell. It is therefore surprising how
the Court of Appeals could have come to the conclusion, just on the basis of the
Agency Agreement and the pleadings filed in the trial court, that "Crestamonte is
the principal, NSS is the agent and ... Fu Hing and K.K Shell are the sub-agents."
In view of the inconclusiveness of the Agency Agreement and the pleadings filed in
the trial court, additional evidence, if there be any, would still have to be presented
to establish the allegation that K.K. Shell is a sub-agent of NSS.
In the same vein, as the choice-of-forum clause in the agreement (paragraph 12.0)
has not been conclusively shown to be binding upon K.K. Shell, additional evidence
would also still have to be presented to establish this defense, K.K. Shell cannot
therefore, as of yet, be barred from instituting an action in the Philippines.
2. Private respondents have anticipated the possibility that the courts will not find
that K.K. Shell is expressly bound by the Agency Agreement, and thus they fall back
on the argument that even if this were so, the doctrine offorum non
conveniens would be a valid ground to cause the dismissal of K.K. Shell's complaintin-intervention.
K.K. Shell counters this argument by invoking its right as maritime lienholder. It
cites Presidential Decree No. 1521, the Ship Mortgage Decree of 1978, which
provides:
SEC. 21. Maritime Lien for Necessaries; person entitled to such lien-Any person
furnishing repairs, supplies, to wage, use of dry dock or marine railway, or other
necessaries, to any vessel, whether foreign or domestic, upon the order of the
owner of such vessel, or of a person authorized by the owner, shall have a maritime
lien on the vessel, which may be enforced by suit in rem, and it shall be necessary
to allege or prove that credit was given to the vessel.
Private respondents on the other hand argue that even if P.D. No. 1521 is applicable,
K.K. Shell cannot rely on the maritime lien because the fuel was provided not
exclusively for the benefit of the MV Estella, but for the benefit of Crestamonte in
general. Under the law it must be established that the credit was extended to the
vessel itself. Now, this is a defense that calls precisely for a factual determination by
the trial court of who benefitted from the delivery of the fuel. Hence, again, the
necessity for the reception of evidence before the trial court.
In other words, considering the dearth of evidence due to the fact that the private
respondents have yet to file their answer in the proceedings below and trial on the
merits is still to be conducted, whether or not petitioners are indeed maritime
lienholders and as such may enforce the lien against the MV Estella are matters that
still have to be established.
Neither are we ready to rule on the private respondents' invocation of the doctrine
of forum non conveniens, as the exact nature of the relationship of the parties is still
to be established. We leave this matter to the sound discretion of the trial court
judge who is in the best position, after some vital facts are established, to
determine whether special circumstances require that his court desist from
assuming jurisdiction over the suit.
175. Sweet Lines vs. Teves
[83 SCRA 361]
Facts:
Private respondents bought tickets for Voyage 90 at the Cagayan de Oro
branch office of petitioner, a shipping company transporting inter-island passengers
and cargoes. Respondents were to board petitioner's vessel, M/S "Sweet Hope"
bound for Tagbilaran City via the port of Cebu. Upon learning that the vessel was
not proceeding to Bohol, since many passengers were bound for Surigao, private
respondents per advice, went to the branch office for proper relocation to M/S
"Sweet Town". Because the said vessel was already filled to capacity, they were
forced to agree "to hide at the cargo section to avoid inspection of the officers of
the Philippine Coastguard." Private respondents alleged that they were, during the
trip," "exposed to the scorching heat of the sun and the dust coming from the ship's
cargo of corn grits," and that the tickets they bought were not honored and they
were constrained to pay for other tickets. In view thereof, private respondents sued
petitioner for damages and for breach of contract of carriage before the Court of
First Instance of Misamis Oriental.
The motion was denied by the trial court. Petitioner moved to reconsider the
order of denial, but no avail. Hence, this instant petition.
ISSUES:?
is valid.
1. W/N Condition No. 14, which limits the venue of actions in Cebu only,
HELD:?1.
No. The Court held that Condition No. 14 is subversive of public policy
on transfers of venue of actions. For, although venue may be changed or transferred
from one province to another by agreement of the parties in writing according to
Rule 4, Section 3, of the Rules of Court, such an agreement will not be held valid
where it practically negates the action of the claimants, such as the private
respondents herein. The philosophy underlying the provisions on transfer of venue
of actions is the convenience of the plaintiffs, as well as his witnesses, and to
promote the ends of justice. Considering the expense and trouble a passenger
residing outside of Cebu City would incur to prosecute a claim in the City of Cebu,
he would most probably decide not to file the action at all. The condition will thus
defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has
branches or offices in the respective ports of call of its vessels and can afford to
litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis
Oriental, as was done in the instant case, will not cause inconvenience to, much less
prejudice, petitioner.
Public policy is "...that principle of the law which holds that no subject or
citizen can lawfully do that which has a tendency to be injurious to the public or
against the public good." Under this principle "...freedom of contract or private
dealing is restricted by law for the good of the public." Clearly, Condition No. 14, if
enforced, will be subversive of the public good or interest, since it will frustrate in
meritorious cases, actions of passenger cants outside of Cebu City, thus placing
petitioner company at a decided advantage over said persons, who may have
perfectly legitimate claims against it. The said condition should, therefore, be
declared void and unenforceable, as contrary to public policy to make the courts
accessible to all who may have need of their services.
2.
Yes. There is no question that there was a valid contract of carriage entered
into by petitioner and private respondents and that the passage tickets, upon which
the latter based their complaint, are the best evidence thereof. All the essential
elements of a valid contract, i.e., consent, cause or consideration and object, are
present. As held in Peralta de Guerrero, et al. v. Madrigal Shipping Co., Inc.,
"It is a matter of common knowledge that whenever a passenger boards a
ship for transportation from one place to another he is issued a ticket by the shipper
which has all the elements of a written contract, Namely: (1) the consent of the
contracting parties manifested by the fact that the passenger boards the ship and
the shipper consents or accepts him in the ship for transportation; (2) cause or
consideration which is the fare paid by the passenger as stated in the ticket; (3)
object, which is the transportation of the passenger from the place of departure to
the place of destination which are stated in the ticket."