Lintojua Shipping Company Inc VS National Seaman Board and Gregorio P. Candongo

G.R. No. L-51910 August 10, 1989

FACTS

Petitioner is the duly appointed local crewing managing office of the Fairwind Shipping Corporation.

On September 11, 1976 M/V Dufton Bay an ocean-going vessel of foreign registry owned by the R.D. Mullion ship broking agency under charter by Fairwind, while in the port of Cebu contracted the services (among others) of Gregorio Candongo as Third Engineer for 12 months with a monthly wage of US$500.00. The agreement was executed before the Cebu Area Manning Unit of the NSB, after which respondent boarded the vessel.

On December 28, 1976 before the expiration of contract, respondent was required to disembark at Port Kilang, Malaysia. Describe in his seaman’s handbook is the reason “by owner’s arrange.”

Condongo filed a complaint against Mullion (Shipping company) for violation of contract and against Litonjua as agent of shipowner.

On February 1977, NSB rendered a judgment by default for failure of petitioners to appear during the initial hearing, rendering the same to pay Candongo because there was no sufficient or valid cause for the respondents to terminate the service of the complainant.

Litonjua’s defense:

Contends that the shipowner, nor the charterer, was the employer of private respondent; and that liability for damages cannot be imposed upon petitioner which was a mere agent of the charterer.

ISSUE

Whether or not Litonjua may be held liable to the private respondent on the contract of employment?

HELD

YES.

The first basis is the charter party which existed between Mullion, the shipowner, and Fairwind, the charterer.

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

Treating Fairwind as owner pro hac vice, petitioner Litonjua having failed to show that it was not such, we believe and so hold that petitioner Litonjua, as Philippine agent of the charterer, may be held liable on the contract of employment between the ship captain and the private respondent.

There is a second and ethically more compelling basis for holding petitioner Litonjua liable on the contract of employment of private respondent. The charterer of the vessel, Fairwind, clearly benefitted from the employment of private respondent as Third Engineer of the Dufton Bay, along with the ten (10) other Filipino crewmembers recruited by Captain Ho in Cebu at the same occasion.

In so doing, petitioner Litonjua certainly in effect represented that it was taking care of the crewing and other requirements of a vessel chartered by its principal, Fairwind.

Last, but certainly not least, there is the circumstance that extreme hardship would result for the private respondent if petitioner Litonjua, as Philippine agent of the charterer, is not held liable to private respondent upon the contract of employment.

Trans-Asia Shipping Lines, Inc. VS Court of Appeals

GR 118126 4 March 1996

FACTS:

Atty Renato Arroyo purchased a ticket from Trans-Asia Shipping lines, Inc. for the voyage of M/V Asia Thailand vessel to Cagayan de Oro from Cebu Sity. Upon boarding he noticed that engines of the vessel were being repaired. Regardless, he boarded the same.

The vessel departed on time with only 1 engine running. It stopped near Kawit Island and after half an hour of stillness, the passengers, who already were suffering from mental distress, demanded that they be brought back to their port of origin.

At Cebu City, passengers who wished to disembark were allowed and given 10 minutes. Atty. Arroyo as one of the passengers. After which, the vessel continued its voyage.

On this account, Passenger Arroyo filed before the trial court a complaint for damages against Trans-Asia Shipping Inc. for failure of transporting the former to his place of destination.

ISSUE:

WON a vessel being unworthy of the sea is tantamount to a breach of contract?

HELD:

Under Article 1733 of the Civil Code, the petitioner was bound to observe extraordinary diligence in ensuring the safety of the private respondent. That meant that the petitioner was, pursuant to Article 1755 of the said Code, bound to carry the private respondent safely as far as human care and foresight could provide, using the utmost diligence of very cautious persons, with due regard for all the circumstances. In this case, we are in full accord with the Court of Appeals that the petitioner failed to discharge this obligation.

Before commencing the contracted voyage, the petitioner undertook some repairs on the cylinder head of one of the vessel's engines. But even before it could finish these repairs, it allowed the vessel to leave the port of origin on only one functioning engine, instead of two. Moreover, even the lone functioning engine was not in perfect condition as sometime after it had run its course, it conked out. This caused the vessel to stop and remain a drift at sea, thus in order to prevent the ship from capsizing, it had to drop anchor. Plainly, the vessel was unseaworthy even before the voyage began. For a vessel to be seaworthy, it must be adequately equipped for the voyage and manned with a sufficient number of competent officers and crew. 21 The failure of a common carrier to maintain in seaworthy condition its vessel involved in a contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.

Lintojua Shipping Company Inc VS National Seaman Board and Gregorio P. Candongo

G.R. No. L-51910 August 10, 1989

FACTS

Petitioner is the duly appointed local crewing managing office of the Fairwind Shipping Corporation.

On September 11, 1976 M/V Dufton Bay an ocean-going vessel of foreign registry owned by the R.D. Mullion ship broking agency under charter by Fairwind, while in the port of Cebu contracted the services (among others) of Gregorio Candongo as Third Engineer for 12 months with a monthly wage of US$500.00. The agreement was executed before the Cebu Area Manning Unit of the NSB, after which respondent boarded the vessel.

On December 28, 1976 before the expiration of contract, respondent was required to disembark at Port Kilang, Malaysia. Describe in his seaman’s handbook is the reason “by owner’s arrange.”

Condongo filed a complaint against Mullion (Shipping company) for violation of contract and against Litonjua as agent of shipowner.

On February 1977, NSB rendered a judgment by default for failure of petitioners to appear during the initial hearing, rendering the same to pay Candongo because there was no sufficient or valid cause for the respondents to terminate the service of the complainant.

Litonjua’s defense:

Contends that the shipowner, nor the charterer, was the employer of private respondent; and that liability for damages cannot be imposed upon petitioner which was a mere agent of the charterer.

ISSUE

Whether or not Litonjua may be held liable to the private respondent on the contract of employment?

HELD

YES.

The first basis is the charter party which existed between Mullion, the shipowner, and Fairwind, the charterer.

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

Treating Fairwind as owner pro hac vice, petitioner Litonjua having failed to show that it was not such, we believe and so hold that petitioner Litonjua, as Philippine agent of the charterer, may be held liable on the contract of employment between the ship captain and the private respondent.

There is a second and ethically more compelling basis for holding petitioner Litonjua liable on the contract of employment of private respondent. The charterer of the vessel, Fairwind, clearly benefitted from the employment of private respondent as Third Engineer of the Dufton Bay, along with the ten (10) other Filipino crewmembers recruited by Captain Ho in Cebu at the same occasion.

In so doing, petitioner Litonjua certainly in effect represented that it was taking care of the crewing and other requirements of a vessel chartered by its principal, Fairwind.

Last, but certainly not least, there is the circumstance that extreme hardship would result for the private respondent if petitioner Litonjua, as Philippine agent of the charterer, is not held liable to private respondent upon the contract of employment.

DSR-Senator Lines and C.F. Sharp and Company, INC. VS Federal Phoenix Assurance Co., INC

GR No 135377             07 OCT 03

FACTS:           

This is a petition for review on certiorari for damages arising from the loss of cargo while in transit.

Shipper Berde Plants, Inc. entered into a business with Al-Mohr International Group in Riyadh , Saudi Arabia. They acquired the services of C.F. Sharp and Company Inc. the general ship agent of Petitioner DSR-Senator Lines.

To which a Bill of Lading was produced by the carrier, showing an invoice amounting to $34,579.60. Khor Fakkan Port as its Discharge location and Port Dammam as the Port of Delivery with M/S “Arabian Senator” as the assigned vessel.

Federal Phoenix Assurance Company Inc., insured  the cargo for Php 941,429.61

On June 7 1993, the carrier left Manila and arrived Khor Fakkan to which the cargo was reloaded on board DSR-Senator Lines vessel M/V “Kapitan Sakharov” bound for Port Dammam.

While in Transit the vessel caught fire.

As a result, Federal Phoenix paid Berde Plants the insurance; on the other hand, the latter executed a “Subrogation Receipt.” Federal Phoenix sent a letter to CF Sharp demanding reimbursement. CF Sharp denied the letter on the ground that liability was extinguished when the vessel carrying the cargo was gutted by fire.

Federal Phoenix filed a complaint in RTC which was granted and affirmed by CA.

Issue:

WON DSR-Senator Lines and CF Shard and Company’s liabilities are extinguished due to the fire?

HELD:

NO, In addition to Article 1734, natural disaster must have been the proximate and only cause of the loss, and that the carrier has exercised due diligence to prevent or minimize the loss before, during or after the occurrence of the disaster.

Petition denied.

CHUA YEK HONG vs. INTERMEDIATE APPELLATE COURT, MARIANO GUNO, and DOMINADOR OLIT

G.R. No. 74811 September 30, 1988

FACTS:

Petitioner contracted with the herein private respondent to deliver 1,000 sacks of copra, valued at P101,227.40, on board the vessel M/V Luzviminda I owned by the latter. However it did not reach its destination, the vessel capsized and sank with all its cargo.

Petitioner instituted a complaint against private respondent for breach of contract incurring damages.

Private respondent’s defense is that even assuming that the alleged cargo was truly loaded aboard their vessel, their liability had been extinguished by reason of the total loss of said vessel.

RTC rendered judgment in favor of Chua Yek Hong however CA reversed the decision by applying Article 587 of the Code of Commerce and the doctrine in Yangco vs. Lasema (73 Phil. 330 [1941]) and held that private respondents' liability, as ship owners, for the loss of the cargo is merely co-extensive with their interest in the vessel such that a total loss thereof results in its extinction.

ISSUE:

Whether or not respondent Appellate Court erred in applying the doctrine of limited liability under Article 587 of the Code of Commerce as expounded in Yangco vs. Laserna, supra.

HELD:

As this Court held:

If the ship owner or agent may in any way be held civilly liable at all for injury to or death of passengers arising from the negligence of the captain in cases of collisions or shipwrecks, his liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. (Yangco vs. Laserna, et al., supra).

The limited liability rule, however, is not without exceptions, namely: (1) where the injury or death to a passenger is due either to the fault of the ship owner, or to the concurring negligence of the ship owner and the captain (Manila Steamship Co., Inc. vs. Abdulhaman supra); (2) where the vessel is insured; and (3) in workmen's compensation claims Abueg vs. San Diego, supra). In this case, there is nothing in the records to show that the loss of the cargo was due to the fault of the private respondent as shipowners, or to their concurrent negligence with the captain of the vessel. The judgment sought to be reviewed is hereby AFFIRMED

China Airlines VS Chiok

GR 152122             30 July 2003

FACTS:

Daniel Chiok purchased a ticket from China Airlines Ltd. Covering Manila-Taipei-Hong Kong-Manila. The ticket was exclusively endorsable to Philippine Airlines. The trips covered by the ticket were pre-scheduled and confirmed.

In Taipei, Chiok went to CAL office to confirm his Hong Kong-Manila flight. CAL attached a yellow sticker, indicating that flight was OK.

In Hong Kong, Chiok went to PAL office to confirm his Manila flight. PAL confirmed and attached its own sticker.

During the scheduled flight bound to Manila, it was cancelled due to a typhoon. All confirmed ticket holders were booked automatically for it’s next flight (next day)

However on the following day, a PAL employee informed Chiok that his name did not appear in PAL’s computer list of passengers and therefore could not be permitted to board PAL flight no. PR 307.

Chiok filed a complaint for damages.

The Regional Trial Court held that CAL and PAL jointly and severely liable to correspondent, affirmed by Court of Appeals.

ISSUE:

WON China Airline is liable as a principal carrier?

HELD:

In citing several cases:

As the principal in the contract of carriage, the petitioner in British Airways v. Court of Appeals was held liable, even when the breach of contract had occurred, not on its own flight, but on that of another airline. The Decision followed our ruling in Lufthansa German Airlines v. Court of Appeals, in which we had held that the obligation of the ticket-issuing airline remained and did not cease, regardless of the fact that another airline had undertaken to carry the passengers to one of their destinations.

In the instant case, following the jurisprudence cited above, PAL acted as the carrying agent of CAL. In the same way that we ruled against British Airways and Lufthansa in the aforementioned cases, we also rule that CAL cannot evade liability to respondent, even though it may have been only a ticket issuer for the Hong Kong-Manila sector.

A. MAGSAYSAY INC. vs. ANASTACIO AGAN

G.R. No. L-6393             January 31, 1955

FACTS:

S S "San Antonio", vessel owned and operated by plaintiff ran aground at the mouth of the Cagayan river, and, attempts to refloat it under its own power having failed, plaintiff have it refloated by the Luzon Stevedoring Co. at an agreed compensation. Once the vessel reached Basco, it’s destination, the cargoes were delivered to their respective owners or consignees, who, with the exception of defendant, made a deposit or signed a bond to answer for their contribution to the average.

The plaintiff brought the present action in the Court of First Instance of Manila to make defendant pay his contribution

Defendant refuses to pay the same amount and alleges that the stranding of the vessel was due to the fault, negligence and lack of skill of its master, that the expenses incurred in putting it afloat did not constitute general average, and that the liquidation of the average was not made in accordance with law.

Lower court sided with the herein petitioner, rendering judgment against Agan.

It was in the findings of the court that the stranding of plaintiff's vessel was due to the sudden shifting of the sandbars at the mouth of the river which the port pilot did not anticipate.

ISSUE:

Whether or not the expenses incurred in floating a vessel so stranded should be considered general average and shared by the cargo owners.

HELD:

No.

Let us now see whether the expenses here in question could come within the legal concept of the general average. Tolentino, in his commentaries on the Code of Commerce, gives the following requisites for general average:

First, there must be a common danger. This means, that both the ship and the cargo, after has been loaded, are subject to the same danger, whether during the voyage, or in the port of loading or unloading; that the danger arises from the accidents of the sea, dispositions of the authority, or faults of men, provided that the circumstances producing the peril should be ascertained and imminent or may rationally be said to be certain and imminent. This last requirement exclude measures undertaken against a distant peril.

Second, that for the common safety part of the vessel or of the cargo or both is sacrificed deliberately.

Third, that from the expenses or damages caused follows the successful saving of the vessel and cargo.

Fourth, that the expenses or damages should have been incurred or inflicted after taking proper legal steps and authority. (Vol. 1, 7th ed., p. 155.)

With respect to the first requisite, the evidence does not disclose that the expenses sought to be recovered from defendant were incurred to save vessel and cargo from a common danger. The vessel ran aground in fine weather inside the port at the mouth of a river, a place described as "very shallow". It would thus appear that vessel and cargo were at the time in no imminent danger or a danger which might "rationally be sought to be certain and imminent." It is, of course, conceivable that, if left indefinitely at the mercy of the elements, they would run the risk of being destroyed. But as stated at the above quotation, "this last requirement excludes measures undertaken against a distant peril." It is the deliverance from an immediate, impending peril, by a common sacrifice, that constitutes the essence of general average. (The Columbian Insurance Company of Alexandria vs. Ashby & Stribling et al., 13 Peters 331; 10 L. Ed., 186). In the present case there is no proof that the vessel had to be put afloat to save it from imminent danger. What does appear from the testimony of plaintiff's manager is that the vessel had to be salvaged in order to enable it "to proceed to its port of destination." But as was said in the case just cited it is the safety of the property, and not of the voyage, which constitutes the true foundation of the general average.

As to the second requisite, we need only repeat that the expenses in question were not incurred for the common safety of vessel and cargo, since they, or at least the cargo, were not in imminent peril. The cargo could, without need of expensive salvage operation, have been unloaded by the owners if they had been required to do so.

With respect to the third requisite, the salvage operation, it is true, was a success. But as the sacrifice was for the benefit of the vessel — to enable it to proceed to destination — and not for the purpose of saving the cargo, the cargo owners are not in law bound to contribute to the expenses.

The final requisite has not been proved, for it does not appear that the expenses here in question were incurred after following the procedure laid down in article 813 et seq.

In conclusion we found that plaintiff not made out a case for general average, with the result that its claim for contribution against the defendant cannot be granted.