transportation cases set 2.docx

7/23/2019 Transportation Cases Set 2.docx

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G.R. No. L-69044 May 29, 1987

EASTERN SHIPPING LINES, INC., petitioner,vs.INTERMEDIATE APPELLATE COURT a! DE"ELOPMENT INSURANCE # SURET$CORPORATION, respondents.

No. 71478 May 29, 1987

EASTERN SHIPPING LINES, INC., petitioner,vs.THE NISSHIN %IRE AND MARINE INSURANCE CO., a! DO&A %IRE # MARINEINSURANCE CO., LTD., respondents.

MELENCIO-HERRERA, J.:

These two cases, both for the recovery of the value of cargo insurance, arose from the sameincident, the sinking of the M/S ASIATIA when it caught fire, resulting in the total loss of shipand cargo.

The basic facts are not in controversy!

In G.R. No. 69044, sometime in or prior to "une, #$%%, the M/S ASIATIA, a vessel operated bypetitioner &astern Shipping 'ines, Inc., (referred to hereinafter as )etitioner arrier* loaded at+obe, "apan for transportation to Manila, ,--- pieces of caloried lance pipes in 0 packagesvalued at )1,-2$.-- consigned to )hilippine 3looming Mills o., Inc., and % cases of spareparts valued at )$,21#.%, consigned to entral Te4tile Mills, Inc. 3oth sets of goods were

insured against marine risk for their stated value with respondent 5evelopment Insurance andSurety orporation.

In G.R. No. 71478,during the same period, the same vessel took on board #0 cartons ofgarment fabrics and accessories, in two (* containers, consigned to Mariveles Apparelorporation, and two cases of surveying instruments consigned to Aman &nterprises and6eneral Merchandise. The #0 cartons were insured for their stated value by respondent7isshin 8ire 9 Marine Insurance o., for :S ;


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suit against petitioner arrier for the recovery of the amounts it had paid to the insured beforethe then ourt of 8irst instance of Manila, 3ranch >>> (ivil ase 7o. 1-0%*.

)etitioner?arrier denied liability mainly on the ground that the loss was due to an e4traordinaryfortuitous event, hence, it is not liable under the law.

=n August 2#, #$%$, the Trial ourt rendered @udgment in favor of 5evelopment Insurance in the

amounts of )1,-2$.-- and )$,21#.%, respectively, with legal interest, plus )2,---.-- asattorneys fees and costs. )etitioner arrier took an appeal to the then ourt of Appeals which,on August #


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At the outset, we re@ect )etitioner arriers claim that it is not the operator of the M/S Asiaticabut merely a charterer thereof. De note that in 6.B. 7o. 1$-


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the crew was ordered to open the hatch covers of 7o, tor commencement of fire fighting by sea water! that all of these effort werenot enough to control the fire.

)ursuant to Article #%22, common carriers are bound to e4traordinary diligence in the vigilance over the goods. The evidence of thedefendant did not show that e4traordinary vigilance was observed by the vessel to prevent the occurrence of fi re at hatchesnumbers and 2. 5efendants evidence did not likewise show he amount of diligence made by the crew, on orders, in the care ofthe cargoes. Dhat appears is that af ter the cargoes were stored in the hatches, no regular inspection was made as to their conditionduring the voyage. onseFuently, the crew could not have even e4plain what could have caused the fire. The defendant, in theourts mind, failed to satisfactorily show that e4traordinary vigilance and care had been made by the crew to prevent theoccurrence of the fire. The defendant, as a common carrier, is liable to the consignees for said lack of deligence reFuired of it underArticle #%22 of the ivil ode. 1(

Caving failed to discharge the burden of proving that it had e4ercised the e4traordinary diligence reFuired by law, )etitioner arrier cannot escape liabilityfor the loss of the cargo.

And even if fire were to be considered a Gnatural disasterG within the meaning of Article #%2< of the ivil ode, it is reFuired under Article #%2$ of thesame ode that the Gnatural disasterG must have been the Gpro4imate and only cause of the loss,G and that the carrier has Ge4ercised due diligence toprevent or minimie the loss before, during or after the occurrence of the disaster. G This )etitioner arrier has also failed to establish satisfactorily.

7or may )etitioner arrier seek refuge from liability under the arriage of 6oods by Sea Act, It is provided therein that!

Sec.


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Multiplying 0 packages by ;-- would result in a product of ;#


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In this case, the 3ill of 'ading (&4hibit GAG* disclosed the following data!

ontainers

(#0* artons*

Mens 6arments 8abrics and Accessories 8reight )repaid

Say! Two (* ontainers =nly.

onsidering, therefore, that the 3ill of 'ading clearly disclosed the contents of the containers, the number of cartons or units, as well as the nature of thegoods, and applying the ruling in the it#ui and ur5)ene#cases it is clear that the #0 cartons, not the two (* containers should be considered as theshipping unit sub@ect to the ;-- limitation of liability.

True, the evidence does not disclose whether the containers involved herein were carrier? furnished or not. :sually, however, containers are provided bythe carrier. 19In this case, the probability is that they were so furnished for )etitioner arrier was at liberty to pack and carry the goods in containers ifthey were not so packed. Thus, at the dorsal side of the 3ill of 'ading (&4hibit GAG* appears the following stipulation in fine print!

##. (:se of ontainer* Dhere the goods receipt of which is acknowledged on the face of this 3ill of 'ading are not already packedinto container(s* at the time of receipt, the arrier shall be at liberty to pack and carry them in any type of container(s*.

The foregoing would e4plain the use of the estimate GSay! Two (* ontainers =nlyG in the 3ill of 'ading, meaning that the goods could probably fit in two(* containers only. It cannot mean that the shipper had furnished the containers for if so, GTwo (* ontainersG appearing as the first entry would havesufficed. and if there is any ambiguity in the 3ill of 'ading, it is a cardinal principle in the construction of contracts that the interpretation of obscure words

or stipulations in a contract shall not favor the party who caused the obscurity. 20This applies with even greater force in a contract ofadhesion where a contract is already prepared and the other party merely adheres to it, like the 3ill of 'ading in thiscase, which is draw. up by the carrier. 21

On Alle)e enial o! Opportunit5 to "re#ent epo#ition o! 2t# itne##e#+(in 6.B. 7o. 1$-


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)etitioner arrier Fuestions the award of attorneys fees. In both cases, respondent ourt affirmed the award by theTrial ourt of attorneys fees of )2,---.-- in favor of 5evelopment Insurance in 6.B. 7o. 1$-


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... &4cept as otherwise stated herein and in ? the harter )arty, this contract shagbe governed by the laws of the 8lag of the Ship carrying the goods. In case ofaverage, same shall be ad@usted according to Jork?Antwerp Bules of #$-.

Dhile the vessel was off 6ibraltar, a fire broke out aboard the and caused water damage to thecopra shipment in the amount of :S; $#.20. )etitioner corporation re@ected respondents claimfor payment of the and respondent filed on "une #0, #$11 in the Manila court of first instance its

complaint against petitioner as defendant for recovery of the same and :S; -.-- ? attorneysfees and e4penses of litigation.

After trial, the lower court re@ected petitioners defense that did not e4ceed L of respondentsinterest in the cargo it was not liable under )hilippine 'aw for the damage which I rendered

@udgment on April , #$1$ Gordering the defendant, &astern Shipping 'ines, Inc. to pay to theplaintiff, Margarine?Kerkaufs?:nion 6M3C, the sum of :S; $#.20, with interest at the legal rate

from the date of the filing of the complaint until fully paid, plus :S; -.-- as attorneys feesand the costs of the suit.G

In this review on Fuestions of law, petitioner reiterates as its first assignment t of error itssubmittal that Article 0


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Insofar as the present case is concerned, the lower court made no finding that it falls within any of the e4ceptionsthat would @ustify the award for attorneys fees, such as gross and evident bad faith in refusing to satisfy a plainlyvalid, @ust and demandable claim. &ven under the broad eleventh e4ception of the cited article which allows theimposition of attorneys fees Gin any other case where the court deems it @ust and eFuitable that attorneys fees ande4penses of litigation should be recovered,G the ourt stressed in 3uan, supra, that Gthe conclusion must be borneout by findings of facts and law. Dhat is @ust and eFuitable in a given case is not a mere matter of feeling but ofdemonstration .... Cence, the e4ercise of @udicial discretion in the award of attorneys fees under Article -0 (##* ofthe ivil ode demands a factual, legal or eFuitable @ustification upon the basis of which the court e4ercises its

discretion. Dithout such a @ustification, the award is a conclusion without a premise, its basis being improperly left tospeculation and [email protected] The summary award of counsels fees made in the appealed @udgment must thereforebe set aside.

A final observation. The appealed @udgment ordered petitioner to pay respondent the sum of :S;$#.20 withinterest at the legal rate (which we hold to be the rate of si4 1LN per cent under Article -$ of the ivil ode inforce at the time of the @udgment of April , #$1$* from the filing of the complaint on "une #0, #$11 until fully paid.)etitioner did not appeal from nor Fuestion this portion of the @udgment reFuiring that it pay respondent?creditor thedamage claim with interest in :.S. currency (with reference to the general rule of discharging obligations in)hilippine currency measured at the prevailing rate of e4change '*. onseFuently, we find no necessity to makeany further pronouncement thereon. De merely affirm the @udgment in :.S. currency in favor of respondentcorporation, a foreign corporation not engaged in business herein, in view of petitioners acFuiescence therein andview the @udgment as one wherein the lower court sentenced petitioner to pay and remit to respondent as a non?

resident foreign corporation the amount due under the @udgment in : S. currency.

A=B5I76'J, the appealed @udgment is hereby affirmed with the modification that the award of attorneys fees isset aside. Dith costs against petitioner.

G.R. No. L-5554 May 27, 1953

BENITO CHUA KUY,petitioner,vs.EVERRETT TEAMHI! COR!ORATION,respondent.

Carolina C. Grio, Deogracias Castaeda, Jr. and Sevilla, Aquino, Paras and Aguilla for petitioner.

Ozaeta, Roas, !ic"auco and Picazo for respondent.

BAUTITA ANGELO,J."

This is a petition for review of the decision of the Court of Appeals dated February 15, 1952 affirminthat of the Court of First !nstance of "anila which holds that the action of petitioner #has already beenbarred by operation of law.#

The pertinent facts of this case as found by the Court of Appeals are$

!t appears from the evidence that prior to %anuary &, 19'( the plaintiff placed with the indent orCumbrero and )ons and order for 5** cases of evaporated mil+ of 9* babies. The incident bouht


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the merchandise for the plaintiff from the Columbia acific -istributin Company of ortland,reon, and its purchase price or the sum of /0,25, includin the freiht chares thereafteramountin '12(.9', were paid by the plaintiff to said company throuh the China an+inCorporation of "anila. n %anuary &, 19'(, the Columbia acific -istributin Company loaded atthe port of ortland, reon, n board the )3) 4.4. aymond of the American "ail 6ine, 6td.,consined to the order of the China an+in Corporation and "in )hen Tradin, "anila, a7uantity of oods described in the bill of ladin as follows$

'oading 5escription of goods 6rossweight

Measurementcu. ft.

MT= -- asesevaporated milk $1babies loaded onboard, "anuary 1,

#$


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later on filed with the latter a formal claim for said loss which amounted to 0,911.*&. Certainneotiations for the amicable settlement of the matter havin failed, this action was instituted on"ay (, 19'.

The main issues raised in this appeal are$ 1: 8hether the Carriae of ;oods by )ea Act is applicable tothis particular case, as claimed by respondent, or the same should be overned by the Code of Commerceor other laws, as claimed by petitioner< 2: 8hether the action of petitioner has already prescribed< and 0:

8hether respondent should pay the indemnity claimed in the complaint.

1: The Carriao of ;oods by )ea Act was enacted by the =nited )tates Conress on April 1&, 190& '&=.).C.A. 10**:. )ection 10 of said Act provides that it shall apply #to all contracts of carriae of oodsbyes to or from ports of the =nited )tates in forein trade.# The term #=nited )tates# was therein definedas includin its districts, territories and possessions.

8hen said Act was enacted by the =nited )tates Conress the political status of the hilippines was then aCommonwealth ;overnment and, therefore, was a territory of the =nited )tates. !n view of the particularthen e>istin between the =nited )tates and the hilippines, Conress ave the latter the choice of ma+inor not ma+in the provisions of said Act applicable to transportation to or from ports of the hilippines by

insertin in section 10 thereof a proviso to the effect that #the hilippine 6eislature may, by law, e>cludeits application to transportation to or from ports of the hilippines !slands#. The Commonwealth;overnment, however, elected to accept and ma+e applicable to the hilippines said Act throuhCommonwealth Act ?o. &5 approved on April 22, 190&, wherein it was provided section 1:that theprovisions of the Carriae of ;oods by )ea Act are @hereby accepted to be made applicable to all contractsfor the carriae of oods by sea to and from hilippine ports in forein trade< Provided, That nothin inthis Act shall be construed as repailin any e>istin provisions of the Code of Commerce which is now inforce, or as limitin its application#.

!n view of the fact that section 10 of the Carriae of ;oods by )ea Ac provides, amon other thins, that#?othin in this Act shall be held to apply to contracts for carriae of oods by sea between any port ofthe =nited )tates or its possession, and, any other port of the =nited )tates or its possessions,# petitionernow contends that said Act cannot apply to the contract for carriae of the oods in 7uestion because atthe time said Act was made applicable to the hilippines the latter was still a possession or territory of the=nited )tates. !n other words, it is contended that the Acts has applicable only to transporation of oods inforeign trade, or between ports of the =nited )tates and ports of forein countries, and since thehilippines was not a a forein country at that time, it does not come within the purview of said Act,unless proper amendment is previously made in the law.

;rantin arguendo that the hilippines was a territory or possession of the =nited )tates for the purposes

of said Act, a different situation obtained after it had become an independent state on %uly ' 190&, whicheventuality fully places it within the purview of said Act. !f before its declaration of independence, thetrade relations between the hilippines and the =nited )tates could only be considered in a domesticsense, after it had become independent said trade relations must have of necessity ac7uired the characterof forein within the meanin of said Act. And there is no need of an e>press leislation to have theprovisions of said Act applicable to the hilippines upon the advent of independence, as claimed bypetitioner, for the simple reason that, foreseein that eventuality, our leislative body, in enactinCommonwealth Act ?o. &5, already provided therein that said provisions should be made applicable #toall contracts for the carriae of oods by sea to and from hilippine ports of forein trade.# This e>pressproviso clearly paves the way for the application of the Carriae of ;oods )ea Act to all contracts from


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hilippine ports to her forein countries, includin the =nited )tates. 8e therefore find that the Court ofAppeals did not errin holdin that Act applicable to the transaction under consideration.

2: 4avin arrived at the foreoin conclusion, the ne>t 7uestion to consider is whether the present actionhas already prescribed. To answer this 7uestion we need to resort to the provisions of said Act which asalready stated, applies to the present case. )ection 0, subsection &, of this Act provides in part$

!n any event the carrier and the ship shall be dischared from all liability in respect or damaeunless suit is brouht within the one year after delivery of the oods or the date when the oodsshould have been delivered$ rovided, That if a notice of loss or damae, either apparent orconcealed, is not iven as provided for in this section, that fact shall not affect or preudice theriht of the shipper to brin suit which one year after the delivery of the oods or the date whenthe oods should have been delivered.

There is no dispute in the evidence that the caro in 7uestion was brouht to the City of "anila,hilippines, from ortland, reon, =.).A., on board a forein ship< that the caro was unloaded at theport of "anila and delivered to petitioner on February 2&, 19'(< that the alleed shortae in the caro wasdiscovered by petitioner on the same date< and that this action was iven to respondent, as local aent of

the owner of the ship, also on the same date< and that this action was commenced only on "ay (, 19', orafter the lapse one year, two months and nine days from the delivery of the oods to petitioner.Considerin that, under the provision aboveB7uoted, an action for recovery of loss or damae inconnection with certain within one year after delivery of said caro, it would seem evident that the actionof petitioner has already prescribed.

etitioner, however, contends that the prescriptive period embodied in the Carriae of ;oods by )ea Acthas no application to the case at bar because the period of prescription that should be considered is thatembodies in the Code of Civil rocedure, which repealed the provisions of the Code of Commerce on thesubect and because, even assumin that the Carriae of ;oods by )ea Act applies to this particulartransaction, the prescriptive period provided therein could not apply to petitioner upon the theory that

#such timeBbar applies to the shipper only, and not to a person other than the shipper.# !n other words, it iscontended that, under said Act, the action to recover loss or damae can only be brouht by the shipperand not any other person interested in the transaction.

The claim that the prescriptive period to be considered in this case is that embodied in the Code of Civilrocedure is untenable for the simple reason that this is a eneral law which only applies to cases notcovered by any special act. As we have already stated, the transaction under consideration is covered bythe Carriae of ;oods by )ea Act, and since this is a special act, its eneral application. To hold otherwisewould be render nuatory the prescriptive provision contained in that special Act.

?either do we find tenable the claim that the prescriptive period contained in said act can only invo+ed by

the shipper, e>cludin all other parties to the transaction. 8hile apparently the proviso contained in theportion of section 0&: of the act we have 7uoted ives the impression that the riht to file suit within oneyear after delivery of the oods applies to the shipper alone, however, readin the proviso in conunctionwith the rest of section 0&:, it at once becomes apparent that the conclusion drawn by petitioner isunwarranted. !n the first place, said section provides that the notice of loss or damae for which a claimfor indemnity maybe made should be iven in writin to the carrier at the port of dischare before or atthe time of the removal of the oods, and if the loss or damae is not apparent said notice should be iven#within three days of the delivery.# From the lanuae of this section, it seems clear that the notice of lossor damae is re7uired to be filed not necessarily by the shipper but also by the consinee or any lealholder of the bill of ladin. !n fact, said section re7uires that the notice be iven at the port of dischare


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and the most loical party to file the notice is either the consinee or the endorsee of the bill of ladin. !nthe second place, a study of the historical bac+round of this particular provision will show that althouhthe word shipper is used in the proviso referred to by petitioner, the intention of the law was not toe>clude the consinee or endorsee of the bill of ladin from brinin the action but merely to limit thefilin of the same within one year after the delivery of the oods at the port of dischare. The )outhernCross, 19'* A. ". C. 59 )-?D:< 6indren vs. Farley, 190 A. ". C. *5 )-?D:E.

Arnold 8. nauth, an eminent authority on admiral commentin on this proviso, says$

The American Act contains an added proviso, which is not in any other 4aue ules te>t, intendedto clarify the foreoin. This was one of the American amendments areed to at the 190* Chamberof Commerce Conference. !t provides, in addition to the te>t of the ule, that

!f a notice of loss or damae, either apparent or concealed is not iven as provided for in thissection, the fact shall not affect or preudice the riht of the shipper to brin suit within one yearafter the delivery of the oods or the date when the oods should have been delivered.

!t seems evident that this lanuae does not alter the sense of the te>t of the 4aue ules< it

merely reiterates in another form the rule already laid down. Curiously, the proviso seems limitedto the rihts of shippers, and miht strictly be construed not to any rihts to consinees,representatives, or surroated parties< whereas the 4aue ules phraseoloy is broader. As the Actcontains both phrases, it would seem to be as broad as the broader of the two forms of words.#cean ills of 6adin, by nauth, p. 229.:

etitioner finally contends that the neotiations between petitioner and respondent conducted with a viewto reachin an amicable settlement between them and which caused the delay in the filin of the presentaction constitute a waiver on the part of the respondent to set up the prescriptive period or operates as aestoppel on his part to rely on such prescriptive period to the preudice of petitioner. This contention isalso untenable. The rule is wellBsettled that a mere proposal for arbitration or the fact that neotiations

have been made for the adustment of a controversy, even if the proposal is not acted upon, or theadustment is not carried out, does not suspend the runnin of the period of prescription, unless there is ane>press areement to the contrary. 4ere there is no such areement.

The mere pendency of neotiations for the adustment of a controversy does not suspend thestatutory prescription aainst an action on the claim involved. 8here the neotiations result in anareement to submit a controversy to the attorneys of the respective parties for them to advise aplan of settlement, but the attorneys do not act on such areement, limitations are not tolled durinthe period of submission in the absence of a provision of the areement specifically tollinlimitations, and the mere fact that there are neotiations with a view of referrin a disputed matterto arbitrators does not suspend the runnin of the statute, there bein no e>press areement to

suspend leal remedies to await the issue of the neotiation. 5' C. %. )., pp. 2'B25.:

4avin reached the foreoin conclusion, the other issues raised by petitioner need not be considered.

8herefore, the decision appealed fr

om is hereby affirmed, with costs aainst the petitioner.


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G.R. No. L-21495 Ma#$% 1&, 1924

THE GOVERNMENT O' THE !HILI!!INE ILAN(,plaintiffBappellant,vs.THE INULAR MARITIME CO.,defendantBappellee.

Attorne%'General (illa'Real for appellant.Antonio ). Opisso for appellee.

MALCOLM,J.:

The ;overnment of the hilippine !slands see+s by this action to recover from The !nsular "aritimeCompany the sum of 0*,'0(.91 for repairs made by the ureau of Commerce and !ndustry on the motorship*nsular.

The !nsular "aritime Company was oraniGed with a capital of 15*,***. !t became the owner of onevessel only, the*nsular, valued at 15*,***. n ctober 29, 1919, The !nsular "aritime Company as+edthe ureau of Commerce and !ndustry to perform certain repairs on the !nsular. The ;overnmentconsented and terminated said repairs on ?ovember 29 of the same year. )ubse7uent thereto, on April 15,192*, the !nsular suffered a total loss by fire.

The bill prepared by the chief accountant of the ureau of Commerce and !ndustry for wor+ done on themotor ship*nsular in the amount of 0*,'0(.91, was dated %uly 01, 192*. Collection of the claim wasattempted pursuant to formal demand made by the Actin !nsular Auditor of date April 0*, 1921.

!t will thus be noted, as was emphasiGed by the defense and by 4is 4onor, the trial ude, that no stepswere ta+en by the ;overnment to secure payment for the repairs until after the loss of the vessel*nsular.The first error assined by the AttorneyB;eneral addressed to this findin of fact is accordinly withoutmerit.

The trial ude further found in effect, as a leal conclusion, that the loss of the vessel !nsulare>tinuished the obliation. The AttorneyB;eneral challenes the correctness of this view.

The decision of the trial ude was predicated on his understandin of the provisions of article 591 of theCode of Commerce in relation with other articles of the same Code, and with the decision of this court inthe case of hilippine )hippin Co. vs. ;arcia Herara 19*&E, & hil., 21:. As to the applicability ofarticle 591 of the Code of Commerce, there is nothin in the lanuae to denote that the liability of theowners of a vessel is wiped out by the loss of that vessel. As to the applicability of the decision in the caseof hilippine )hippin Co. vs. ;arcia Herara, supra, the facts are not the same. There, the owners andaents of a vessel causin the loss of another vessel by collision were held #not liable beyond the vesselitself causin the collision,# but were #not re7uired to pay such indemnification for the reason that the


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obliation thus incurred has been e>tinuished on account of the loss of the thin bound for the paymentthereof.# 4ere< there is a contractual relation which remains unaffected by the loss of the thin concernedin the contract and which is overned principally by the provisions of the Civil Code.

The rihts and liabilities of owners of ships are in many respects essentially the same as in the case ofother owners of thins. As a eneral rule, the owners of a vessel and the vessel itself are liable fornecessary repairs. ?aturally the total destruction of the vessel e>tinuishes a maritime lien, as there is no

loner any res to which it can attach. ut the total destruction of the vessel does not affect the liability ofthe owners for repairs on the vessel completed before its loss.

!t is but fair to say that what has been stated in this decision more accurately e>presses the consensus ofopinion in the court than it does the views of the writer, who sees more in the appellee@s case than do hiscolleaues in the court.

The trial court was accordinly riht in its e>position of the fact but not in its application of the law.%udment must therefore be as it is hereby reversed, and in lieu of the udment appealed from, anothershall be entered here in favor of the plaintiff and aainst the defendant for the sum of 0*,'0(.91 withleal interest from %uly 2*, 1921, when the complaint was presented, until payment. 8ithout special

findins as to costs in either instance, it is so ordered.

G.R. No. L-(8897 D))) ', 1987

LU3ON STE"EDORING CORPORATION, petitioner,

vs.COURT O% APPEALS, HIOS DE %. ESCANO, INC., a! DOMESTIC INSURANCECOMPAN$ O% THE PHILIPPINES, respondents.

GANCA$CO, J.:

=n May 2-, #$10 at past 1!-- in the morning a maritime collision occurred within the vicinity ofthe entrance to the 7orth Carbor, Manila between the tanker 'S= GaviteG owned by 'uonStevedoring orporation and MK G8ernando &scanoG a passenger ship owned by Ci@os de 8.

&scano, Inc. as a result of which said passenger ship sunk. An action in admiralty was filed byCi@os de 8. &scano, Inc. and 5omestic Insurance ompany of the )hilippines against the 'uonStevedoring ompany ('S* in the ourt of 8irst Instance of ebu. In the course of the trial, thetrial court appointed two commissioners representing the plaintiffs and defendant to determinethe value of the 'S= GAKIT&.G Said commissioners found the value thereof to be)#0-,---.--.

After trial on the merits, a decision was rendered on "anuary


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DC&B&8=B&, based on all the foregoing considerations, the ourt renders@udgment in favor of the plaintiffs and against the defendant ordering the latter topay to the plaintiff 5omestic Insurance ompany of the )hilippines the sum of)#


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. If abandonment is reFuired under Article 02% of the ode of ommerce, when should it bemade The ode of ommerce is silent on the matter. The decision of this Conorable ourt in3an)co /. La#erna, #2 )hil. 22-, left the Fuestion open and no other decision, as far as petitionercan ascertain, has resolved the Fuestion.

2. Is the decision of this Conorable ourt inanila %tea*#hip o., 2nc. /.Abulha*a,n#-- )hil.2, wherein it was held that G(t*he international rule to the effect that the right of abandonment ofvessels, as a legal station of a shipowners own fault,G invoked by private respondents and

apparently a ma@or consideration in the denial of the motion for reconsideration, applicable topetitioner under the circumstances of the case at bar4

The respondents were reFuired to comment thereto and after said comment was submitted petitioners submitted areply thereto to which the respondents filed a re@oinder.

=n 7ovember 0, #$02, the ourt gave due course to the petition for review and considered the respondentscomment thereto as the Answer. The parties were reFuired to file their briefs. 3oth parties having filed their briefsthe case is now submitted for decision.

Articles 0%, $-, and 02% of the ode of ommerce provide as follows!

ABT. 0%. The ship agent shall also be civilly liable for the indemnities in favor of third personswhich arise from the conduct of the captain in the vigilance over the goods which the vesselcarriedE but he may e4empt himself therefrom by abandoning the vessel with all her eFuipment andthe freight he may have earned during the voyage.

444 444 444

ABT. $-. The co?owners of the vessel shall be civilly liable in the proportion of their contribution tothe common fund for the results of the acts of the captain, referred to in Article 0%.

&ach co?owner may e4empt himself from this liability by the abandonment, before a notary, of thatpart of the vessel belonging to him.

444 444 444

ABT. 02%. The civil liability incurred by the shipowners in the cases prescribed in this section, shallbe understood as limited to the value of the vessel with all her appurtenances and freight earnedduring the voyage.(

In the case of )hilippine Shipping ompany vs. 6arcia,6which is an action for damages instituted by the )hilippineShipping ompany for the loss of Steamship G7tra. Sra. de 'ourdesG as a result of the collision with the SteamshipG7avarraG of 6arcia, it was found that the G7avarraG was responsible for the collision. The claim of the )hilippineShipping is that the defendant should pay )#0,---.--, the value of the G7avarroG at the time of its loss, inaccordance with the provision of Article 02% of the ode of ommerce, and that it was immaterial that the G7avarroGhad been entirely lost provided the value could be ascertained since the e4tent of liability of the owner of thecolliding vessel resulting from the collision is to be determined by its value.

This ourt speaking through the then hief "ustice Arellano held!

Article 02% of the ode of ommerce provides! GThe civil liability contracted by the shipowners inthe cases prescribed in this section shall be understood as limited to the value of the vessel with allher eFuipment and all the freight money earned during the voyage G

GThis section is a necessary conseFuence of the right to abandon the vessel given to the shipownerin article 0% of the code, and it is one of the many superfluities contained in the code.G ('oreno3enito, G'ecciones,G 2.*


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ABT. 0%. The agent shall also be civilly liable for the indemnities in favor of third persons whicharise from the conduct of the captain in the care of the goods which the vessel carried but he maye4empt himself therefrom by abandoning the vessel with all her eFuipments and the freight he mayhave earned during the trip.

ABT. $-. The part owners of a vessel shall be civilly liable, in the proportion of their contribution tothe common fund, for the results of the acts of the captain referred to in Article 0%. &ach partowner may e4empt himself from this liability by the abandonment, before a notary, of the part of the

vessel belonging to him.

The G&4posicion de motivosG of the ode of ommerce contains the following! GThe present code(#0$* does not determine the @uridical status of the agent where such agent is not himself theowner of the vessel. This omission is supplied by the proposed code, which provides in accordancewith the principles of maritime law that by agent it is to be understood the person intrusted with theprovisioning of the vessel, or the one who represents her in the port in which she happens to be.This person is the only one who represents the vessel that is to say, the only one who representsthe interests of the owner of the vessel. This provision has therefore cleared the doubt whiche4isted as to the e4tent of the liability, both of the agent and of the owner of the vessel. Suchliability is limited by the proposed code to the value of the vessel and other things appertainingthereto.G

here i# no oubt that i! the Na/arro ha not been entirel5 lo#t, the a)ent, ha/in) been hel liable!or the ne)li)ence o! the captain o! the /e##el coul ha/e abanone her with all her e=uip*entan the !rei)ht *one5 earne urin) the /o5a)e, thu# brin)in) hi*#el! within the pro/i#ion# o!article 8>7 in #o !ar a# the #ub#iiar5 ci/il liabilit5 i# concerneThis abandonment which wouldhave amounted to an offer of the value of the vessel, of her eFuipment, and freight money earnedcould not have been refused, and the agent could not have been personally compelled, under suchcircumstances, to pay the #0,--- pesos, the estimated value of the vessel at the time of thecollision.

This is the difference which e4ists between the lawful acts and lawful obligations of the captain andthe liability which he incurs on account of any unlawful act committed by him. In the first case, thelawful acts and obligations of the captain beneficial to the vessel may be enforced as against theagent for the reason that such obligations arise from the contract of agency (provided, however,

that the captain does not e4ceed his authority*, while as to any liability incurred by the captainthrough his unlawful acts, the ship agent is simply subsidiarily civilly liable. This liability of the agentis limited to the vessel and it does not e4tend further. 8or this reason the ode of ommercemakes the agent liable to the e4tent of the value of the vessel, as the codes of the principalmaritime nations provide, with the vessel, and not individually. Such is also the spirit of our code.

The spirit of our code is accurately set forth in a treatise on maritime law, from which we deemproper to Fuote the following as the basis of this decision!

That which distinguishes the maritime from the civil law and even from the mercantile law ingeneral is the real and hypothecary nature of the former, and the many securities of a real naturethat maritime customs from time immemorial the laws, the codes, and the later @urisprudence, haveprovided for the protection of the various and conflicting interests which are ventured and risked in

maritime e4peditions, such as the interests of the vessel and of the agent, those of the owners ofthe cargo and consignees, those who salvage the ship, those who make loans upon the cargo,those of the sailors and members of the crew as to their wages, and those of a constructor as torepairs made to the vessel.

A# e/ience o! thi# ?real? nature o! the *ariti*e law we ha/e @1 the li*itation o! the liabilit5 o! thea)ent# to the actual /alue o! the /e##el an the !rei)ht *one5, an @ the ri)ht to retain the car)oan the e*bar)o an etention o! the /e##el e/en in ca#e# where the orinar5 ci/il law woul notallow *ore than a per#onal action a)ain#t the ebtor or per#on liable. 2t will be ob#er/e that the#eri)ht# are correlati/e, an naturall5 #o, becau#e i! the a)ent can ee*pt hi*#el! !ro* liabilit5 b5abanonin) the /e##el an !rei)ht *one5, thu# a/oiin) the po##ibilit5 o! ri#(in) hi# whole !ortune


19/86

in the bu#ine##, it i# al#o Cu#t that hi# *ariti*e creitor *a5 !or an5 rea#on attach the /e##el it#el!to #ecure hi# clai* without waitin) !or a #ettle*ent o! hi# ri)ht# b5 a !inal Cu)*ent, e/en to the

preCuice o! a thir per#on.

This repeals the civil law to such an e4tent that, in certain cases, where the mortgaged property islost no personal action lies against the owner or agent of the vessel. 8or instance, where thevessel is lost the sailors and members of the crew can not recover their wagesE in case of collision,the liability of the agent is limited as aforesaid, and in case of shipwreck, those who loan their

money on the vessel and cargo lose all their rights and can not claim reimbursement under the law.

There are two reasons why it is impossible to do away with these privileges, to wit! (#* The risk towhich the thing is e4posed, and (* the GrealG nature of the maritime law, e4clusively Greal,Gaccording to which the liability of the parties is limited to a thing which is at the mercy of the waves.If the agent is only liable with the vessel and freight money and both may be lost through theaccidents of navigation it is only @ust that the maritime creditor have some means of obviating thisprecarious nature of his rights by detaining the ship, his only security, before it is lost.

The liens tacit or legal, which may e4ist upon the vessel and which a purchaser of the same wouldbe obliged to respect and recognie are H in addition to those e4isting in favor of the State byvirtue of the privileges which are granted to it by all the laws H pilot, tonnage, and port dues andother similar charges, the wages of the crew earned during the last voyage as provided in article

1


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3rushing aside the incidental issues, the fundamental Fuestion here raised is! May the shipowner or agent, notwithstanding the totalloss of the vessel as a result of the negligence of its captain, be properly held liable in damages for the conseFuent death of itspassengers De are of the opinion and so hold that this Fuestion is controlled by the provision of article 0% of the ode ofommerce. Said article reads!

The agent shall also be civilly liable for the indemnities in favor of third persons which arise from the conduct of the captain in the.care of the goods which the vessel carriedE but he may e4empt himself therefrom by abandoning the vessel with all her eFuipmentsand the freight he may have earned during the voyage.

he pro/i#ion accor# a #hipowner or a)ent the r i)ht o! abanon*entD an b5 nece##ar5 i*plication, hi# liabilit5 i# con!ine to that

which he i# entitle a# o! ri)ht to Eabanon F ?the /e##el with all her e=uip*ent# an the !rei)ht it *a5 ha/e earne urin) the/o5a)e.?It is true that the article apears to deal only with the limited liability of shipowners or agents for damages arising from themisconduct of the captain in the care of the goods which the vessel carries, but this is a mere deficiency of language and in no wayindicates the true e4tent of such liability. The consensus of authorities is to the effect that notwithstanding the language of the afore?Fuoted provision, the benefit of limited liability therein provided for, applies in all cases wherein the shipowner or agent may properlybe held liable for the negligent or illicit acts of the captain. 5r. "ose Ma. 6onale de &chavarri y Kivanco commenting on saidarticle, said!

'a letra del odigo, en el articulo 0%, presenta una gravisima cuestion. &l derecho de abandono, si se atiende a lo escrito, solo serefiere a las indemniaciones a Fue diere lugar la conducta del apitan en la custodia de los efectos Fue cargo en el buFue.

&s ese el espiritu del legislador 7oE habra derecho de abandono en las responsabilidades nacidas de obligaciones contraidas porel apitan y de otros actos de este 'o reputamos evidente y, para fortalecer nuestra opinion, basta copiar el siguiente parrafo de la&4posicion de motivos!

&l proyecto, al aplicar estos principios, se inspira tambien en los intereses del comercio maritimo Fue Fuedaran mas asegurados

ofreciendo a todo el Fue contrata con el naviero o apitan del buFue, la garantia real del mismo, cualesFuiera Fue sean lasfacultades o atribuciones de Fue se hallen investidosE (&chavarri, odigo de omercio, Tomo


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But the pro/i#ion# o! the oe o! o**erce in/o(e b5 appellant ha/e no roo* in the application o! the or(*en:# o*pen#ationAct which #ee(# to i*pro/e, an ai*# at the a*elioration o!, the conition o! laborer# an e*plo5ee#. 2t i# not theliability for thedamage or loss of the cargo or in@ury to, or death of, a passenger by or through the misconduct of the captain or master of the shipEnor the liability for the loss of the ship as a result of collisionE nor the responsibility for wages of the crew, but a liability created by astatute to compensate employees and laborers in cases of in@ury received by or inflicted upon them, while engaged in theperformance of their work or employment, or the heirs and dependents of such laborers and employees in the event of deathcaused by their employment. %uch co*pen#ation ha# nothin) to o with the pro/i#ion# o! the oe o! o**erce re)arin)*ariti*e co**erce. 2t i# an ite* in the co#t o! prouction which *u#t be inclue in the bu)et o! an5 well *ana)e inu#tr5.

Appellants assertion that in the case of &nciso vs. 5y?'iaco (% )hil.


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in@ury or average is due to the ship?owners fault as in said case, the shipowner may not avail of his right to limitedliability by abandoning the vessel.

De reiterate what De said in previous decisions that the real and hypothecary nature of the liability of theshipowner or agent is embodied in the provisions of the Maritime 'aw, 3ook III, ode of ommerce. 21Articles 0%,$- and 02% of the same code are precisely intended to limit the liability of the shipowner or agent to the value ofthe vessel, its appurtenances and freightage earned in the voyage, provided that owner or agent abandons thevessel. Although it is not specifically provided for in Article 02% of the same code that in case of collision there

should be such abandonment to en@oy such limited liability, said article on collision of vessels is a mereamplification of the provisions of Articles 0% and $- of same code where abandonment of the vessel is a pre?condition. &ven without said article, the parties may avail of the provisions of Articles 0% and $- of same code incase of collision. This is the reason why Article 02% of the same code is considered a superfluity. 22

Cence the rule is that in case of collision there should be abandonment of the vessel by the shipowner or agent inorder to en@oy the limited liability provided for under said Article 02%.

The e4ception to this rule is when the vessel is totally lost in which case there is no vessel to abandon soabandonment is not reFuired. 3ecause of such total loss the liability of the shipowner or agent for damages ise4tinguished. 7evertheless, the shipowner or agent is personally liable for claims under the Dorkmensompensation Act and for repairs of the vessel before its loss. 2'

In case of illegal or tortious acts of the captain the liability of the shipowner and agent is subsidiary. In such instancethe shipowner or agent may avail of the provisions of Article 02% of the ode by abandoning the vessel. 24

Cowever, if the in@ury or damage is caused by the shipowners fault as where he engages the services of anine4perienced and unlicensed captain or engineer, he cannot avail of the provisions of Article 02% of the ode byabandoning the vessel. 2(Ce is personally liable for the damages arising thereby.

In the case now before the ourt there is no Fuestion that the action arose from a collision and the fault is laid atthe doorstep of 'S= GaviteG of petitioner. :ndeniably petitioner has not abandoned the vessel. Cence petitionercan not invoke the benefit of the provisions of Article 02% of the ode of ommerce to limit its liability to the value ofthe vessel, all the appurtenances and freightage earned during the voyage.

In the light of the foregoing conclusion, the issue as to when abandonment should be made need not be resolved.

DC&B&8=B&, the petition is 5&7I&5 with costs against petitioner.

S= =B5&B&5.

G.R. No. L-42926 S)*+)) 1', 198(

PEDRO "AS5UE3, SOLEDAD ORTEGA, CLETO . AGAIPO, AGUSTINA "IRTUDES,ROMEO "AS5UE3 a! MAIMINA CAINA$, petitioners,vs.THE COURT O% APPEALS a! %ILIPINAS PIONEER LINES, INC., respondents.

*ilio . a#tellane# !or petitioner#.


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Apolinario A. Abantao !or pri/ate re#ponent#.

MELENCIO-HERRERA, J.:

This litigation involves a claim for damages for the loss at sea of petitioners respective children

after the shipwreck of MK )ioneer ebu due to typhoon G+laringG in May of #$11.

The factual antecedents, as summaried by the trial ourt and adopted by respondent ourt,and which we find supported by the record, read as follows!

Dhen the inter?island vessel MK G)ioneer ebuG left the )ort of Manila in the earlymorning of May #, #$11 bound for ebu, it had on board the spouses AlfonsoKasFue and 8ilipinas 3agaipo and a four?year old boy, Mario Marlon KasFue,among her passengers. The MK G)ioneer ebuG encountered typhoon G+laringGand struck a reef on the southern part of Malapascua Island, located somewherenorth of the island of ebu and subseFuently sunk. The aforementioned

passengers were unheard from since then.

)laintiffs )edro KasFue and Soledad =rtega are the parents of Alfonso KasFueEplaintiffs leto 3agaipo and Agustina Kirtudes are the parents of 8ilipinas 3agaipoEand plaintiffs Bomeo KasFue and Ma4ima ainay are the parents of the child,Mario Marlon KasFue. They seek the recovery of damages due to the loss of

Alfonso KasFue, 8ilipinas 3agaipo and Mario Marlon KasFue during saidvoyage.

At the pre?trial, the defendant admitted its contract of carriage with AlfonsoKasFue, 8ilipinas 3agaipo and Mario Marlon KasFue, and the fact of the sinking

of the MK G)ioneer ebuG. The issues of the case were limited to the defensesalleged by the defendant that the sinking of the vessel was caused by forcema@eure, and that the defendants liability had been e4tinguished by the total lossof the vessel.

The evidence on record as to the circumstances of the last voyage of the MKG)ioneer ebuG came mainly, if not e4clusively, from the defendant. The MKG)ioneer ebuG was owned and operated by the defendant and used in thetransportation of goods and passengers in the inter?island shipping. Scheduled toleave the )ort of Manila at $!-- p.m. on May #


24/86

Dhen the vessel left Manila, its officers were already aware of the typhoon +laringbuilding up somewhere in Mindanao. There being no typhoon signals on the routefrom Manila to ebu, and the vessel having been cleared by the ustomsauthorities, the MK G)ioneer ebuG left on its voyage to ebu despite the typhoon.Dhen it reached Bomblon Island, it was decided not to seek shelter thereat,inasmuch as the weather condition was still good. After passing Bomblon andwhile near "intotolo island, the barometer still indicated the e4istence of good

weather condition continued until the vessel approached Tanguingui island. :ponpassing the latter island, however, the weather suddenly changed and heavy rainsfelt 8earing that due to ero visibility, the vessel might hit hocolate island group,the captain ordered a reversal of the course so that the vessel could weather outthe typhoon by facing the winds and the waves in the open. :nfortunately, at aboutnoontime on May #1, #$11, the vessel struck a reef near Malapascua island,sustained leaks and eventually sunk, bringing with her aptain 8loro Jap who wasin command of the vessel.

5ue to the loss of their children, petitioners sued for damages before the ourt of 8irst Instanceof Manila (ivil ase 7o. 1%#2$*. Bespondent defended on the plea of !orce *aCeure,and the

e4tinction of its liability by the actual total loss of the vessel.

After proper proceedings, the trial ourt awarded damages, thus!

DC&B&8=B&, @udgment is hereby rendered ordering the defendant to pay!

(a* )laintiffs )edro KasFue and Soledad =rtega the sums of )#,---.-- for theloss of earning capacity of the deceased Alfonso KasFue, ),#--.-- for support,and )#-,---.-- for moral damagesE

(b* )laintiffs leto 3. 3agaipo and Agustina Kirtudes the sum of )#%,---.-- for

loss of earning capacity of deceased 8ilipinas 3agaipo, and )#-,---.-- for moraldamagesE and

(c* )laintiffs Bomeo KasFue and Ma4imina ainay the sum of )#-,---.-- by wayof moral damages by reason of the death of Mario Marlon KasFue.

=n appeal, respondent ourt reversed the aforementioned @udgment and absolved privaterespondent from any and all liability.

Cence, this )etition for Beview on ertiorari, the basic issue being the liability for damages ofprivate respondent for the presumptive death of petitioners children.

The trial ourt found the defense of ca#o !ortuitountenable due to various decisive factors, thus!

... It is an admitted fact that even before the vessel left on its last voyage, itsofficers and crew were already aware of the typhoon brewing somewhere in thesame general direction to which the vessel was going. The crew of the vessel tooka calculated risk when it proceeded despite the typhoon advisory. This is Fuiteevident from the fact that the officers of the vessel had to conduct conferencesamongst themselves to decide whether or not to proceed. The crew assumed a


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greater risk when, instead of seeking shelter in Bomblon and other islands thevessel passed en route, they decided to take a change on the e4pectedcontinuation of the good weather the vessel was encountering, and the possibilitythat the typhoon would veer to some other directions. The eagerness of the crewof the vessel to proceed on its voyage and to arrive at its destination is readilyunderstandable. It is undeniably lamentable, however, that they did so at the riskof the lives of the passengers on board.

ontrariwise, respondent Appellate ourt believed that the calamity was caused solely andpro4imately by fortuitous event which not even e4traordinary diligence of the highest degreecould have guarded againstE and that there was no negligence on the part of the commoncarrier in the discharge of its duties.

:pon the evidence and the applicable law, we sustain the trial ourt. GTo constitute a ca#o!ortuitothat would e4empt a person from responsibility, it is necessary that (#* the event must beindependent of the human willE (* the occurrence must render it impossible for the debtor tofulfill the obligation in a normal mannerE and that (2* the obligor must be free of participation in,or aggravation of, the in@ury to the creditor.G 1In the language of the law, the event must have been

impossible to foresee, or if it could be foreseen, must have been impossible to avoid. 2There must be an entiree4clusion of human agency from the cause of in@ury or loss. '

Turning to this case, before they sailed from the port of Manila, the officers and crew were aware of typhoonG+laringG that was reported building up at 1- kms. east of Surigao. In fact, they had lashed all the cargo in the holdbefore sailing in anticipation of strong winds and rough waters.4They proceeded on their way, as did other vesselsthat day. :pon reaching Bomblon, they received the weather report that the typhoon was #< kms. east southeastof Tacloban and was moving west northwest. (Since they were still not within the radius of the typhoon and theweather was clear, they deliberated and decided to proceed with the course. At "intotolo Island, the typhoon wasalready reported to be reaching the mainland of Samar. 6They still decided to proceed noting that the weather wasstill GgoodG although, according to the hief 8orecaster of the Deather 3ureau, they were already within thetyphoon one. 7At Tanguingui Island, about !-- A.M. of May #1, #$11, the typhoon was in an area Fuite close toatbalogan, placing Tanguingui also within the typhoon one. 5espite knowledge of that fact, they again decided to

proceed relying on the forecast that the typhoon would weaken upon crossing the mainland of Samar.8

After abouthalf an hour of navigation towards hocolate Island, there was a sudden fall of the barometer accompanied byheavy downpour, big waves, and ero visibility. The aptain of the vessel decided to reverse course and face thewaves in the open sea but because the visibility did not improve they were in total darkness and, as aconseFuence, the vessel ran aground a reef and sank on May #1, #$11 around #!


26/86

that even in the cited case, it was held that the liability of a shipowner is limited to the value of the vessel or to theinsurance thereon. 5espite the total loss of the vessel therefore, its insurance answers for the damages that ashipowner or agent may be held liable for by reason of the death of its passengers.

DC&B&8=B&, the appealed @udgment is hereby B&K&BS&5 and the @udgment of the then ourt of 8irst Instanceof Manila, 3ranch K, in ivil ase 7o. 1%#2$, is hereby reinstated. 7o costs.

S= =B5&B&5.

[G.R. No. 71929 : December 4, 1990.]

192 SCRA 9

ALITALIA, Petitioner, vs. INTERMEDIATE APPELLATE C!RT "#$ %ELIPA E. PA&L,

Respondents.

D E C I S I N

NAR'ASA,J.:

Dr. Felipa Pablo an associate professor in the University of the Philippines, 1 and a researchgrantee of the Philippine Atomic Energy Agency was invited to tae part at a meeting of the

Department of !esearch and "sotopes of the #oint FA$%"AEA Division of Atomic Energy in Food andAgric&lt&re of the United 'ations in "spra, "taly. ( )he was invited in view of her speciali*ed

nowledge in +foreign s&bstances in food and the agric&lt&re environment.+ )he accepted theinvitation, and was then sched&led by the organi*ers, to read a paper on +he Fate of !adioactive

F&sion Prod&cts -ontaminating egetable -rops.+ / he program anno&nced that she wo&ld be thesecond speaer on the first day of the meeting. 0 o f&lfill this engagement, Dr. Pablo booed

passage on petitioner airline, A"A"A.

)he arrived in 2ilan on the day before the meeting in accordance with the itinerary and time table

set for her by A"A"A. )he was however told by the A"A"A personnel there at 2ilan that her

l&ggage was +delayed inasm&ch as the same . . . 3was4 in one of the s&cceeding flights from !ometo 2ilan.+ 5 6er l&ggage consisted of two 3(4 s&itcases7 one contained her clothing and other

personal items8 the other, her scientific papers, slides and other research material. 9&t the other

flights arriving from !ome did not have her baggage on board.

9y then feeling desperate, she went to !ome to try to locate her bags herself. here, she in:&ired

abo&t her s&itcases in the domestic and international airports, and filled o&t the forms prescribed byA"A"A for people in her predicament. 6owever, her baggage co&ld not be fo&nd. -ompletely

distra&ght and disco&raged, she ret&rned to 2anila witho&t attending the meeting in "spra, "taly.7 nad

$nce bac in 2anila she demanded that A"A"A mae reparation for the damages th&s s&ffered by

her. A"A"A offered her +free airline ticets to compensate her for any alleged damages. . . .+ )here;ected the offer, and forthwith commenced the action < which has given rise to the present

appellate proceedings.

As it t&rned o&t, Prof. Pablo=s s&itcases were in fact located and forwarded to "spra, > "taly, b&t only

on the day after her sched&led appearance and participation at the U.'. meeting there. ? $f co&rseDr. Pablo was no longer there to accept delivery8 she was already on her way home to 2anila. And

for some reason or other, the s&itcases were not act&ally restored to Prof. Pablo by A"A"A &ntileleven 3114 months later, and fo&r 304 months after instit&tion of her action. @


27/86

After appropriate proceedings and trial, the -o&rt of First "nstance rendered ;&dgment in Dr. Pablo=sfavor7 1

+314 $rdering the defendant 3A"A"A4 to pay . . . 3her4 the s&m of BE'C 6$U)A'DPE)$) 3P(,.4, Philippine -&rrency, by way of nominal damages8

3(4 $rdering the defendant to pay . . . 3her4 the s&m of F"E 6$U)A'D PE)$) 3P5,.4,Philippine -&rrency, as and for attorney=s fees8 3and4

3/4 $rdering the defendant to pay the costs of the s&it.+A"A"A appealed to the "ntermediate Appellate -o&rt b&t failed to obtain a reversal of the

;&dgment. 11 "ndeed, the Appellate -o&rt not only affirmed the rial -o&rt=s decision b&t alsoincreased the award of nominal damages payable by A"A"A to P0,.. 1( hat increase it

;&stified as follows7 1/

+-onsidering the circ&mstances, as fo&nd by the rial -o&rt and the negligence committed by

defendant, the amo&nt of P(,. &nder present inflationary conditions as awarded . . . tothe plaintiff as nominal damages, is too little to mae &p for the plaintiff=s fr&stration and

disappointment in not being able to appear at said conference8 and for the embarrassmentand h&miliation she s&ffered from the academic comm&nity for fail&re to carry o&t an official

mission for which she was singled o&t by the fac&lty to represent her instit&tion and theco&ntry. After weighing caref&lly all the considerations, the amo&nt awarded to the plaintiff

for nominal damages and attorney=s fees sho&ld be increased to the cost of her ro&nd trip airfare or at the present rate of peso to the dollar at P0,,.+

A"A"A has appealed to this -o&rt on Certiorari. 6ere, it sees to mae basically the same points ittried to mae before the rial -o&rt and the "ntermediate Appellate -o&rt, i.e.7

14 that the Barsaw -onvention sho&ld have been applied to limit A"A"A=) liability8 and

(4 that there is no warrant in fact or in law for the award to Dr. Pablo of nominal damages

and attorney=s fees. 10

"n addition, A"A"A post&lates that it was error for the "ntermediate Appellate -o&rt to have

ref&sed to pass on all the assigned errors and in not stating the facts and the law on which itsdecision is based. 15

Under the Barsaw -onvention, 1< an air carrier is made liable for damages for7

14 the death, wo&nding or other bodily in;&ry of a passenger if the accident ca&sing it tooplace on board the aircraft or in the co&rse of its operations of embaring or disembaring8

1>

(4 the destr&ction or loss of, or damage to, any registered l&ggage or goods, if theocc&rrence ca&sing it too place d&ring the carriage by air8+ 1? and

/4 delay in the transportation by air of passengers, l&ggage or goods. 1@

"n these cases, it is provided in the -onvention that the +action for damages, however, fo&nded, can

only be bro&ght s&b;ect to conditions and limits set o&t+ therein. (

he -onvention also p&rports to limit the liability of the carriers in the following manner7 (1

1. "n the carriage of passengers the liability of the carrier for each passenger is limited to thes&m of (5, francs . . . 'evertheless, by special contract, the carrier and the passenger

may agree to a higher limit of liability.7 nad

(. a4 "n the carriage of registered baggage and of cargo, the liability of the carrier is limited

to a s&m of (5 francs per ilogramme, &nless the passenger or consignor has made, at thetime when the pacage was handed over to the carrier, a special declaration of interest in

delivery at destination and has paid a s&pplementary s&m if the case so re:&ires. "n that casethe carrier will be liable to pay a s&m not eceeding the declared s&m, &nless he proves that

s&m is greater than the act&al val&e to the consignor at delivery.


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b4 "n the case of loss, damage or delay of part of registered baggage or cargo, or of anyob;ect contained therein, the weight to be taen into consideration in determining the amo&nt

to which the carrier=s liability is limited shall be only the total weight of the pacage orpacages concerned. 'evertheless, when the loss, damage or delay of a part of the

registered baggage or cargo, or of an ob;ect contained therein, affects the val&e of otherpacages covered by the same baggage chec or the same air way bill, the total weight of

s&ch pacage or pacages shall also be taen into consideration in determining the limit ofliability.

/. As regards ob;ects of which the passenger taes charge himself the liability of the carrier islimited to 5 francs per passenger.

0. he limits prescribed . . shall not prevent the co&rt from awarding, in accordance with itsown law, in addition, the whole or part of the co&rt costs and of the other epenses of

litigation inc&rred by the plaintiff. he foregoing provision shall not apply if the amo&nt of thedamages awarded, ecl&ding co&rt costs and other epenses of the litigation, does not

eceed the s&m which the carrier has offered in writing to the plaintiff within a period of simonths from the date of the occ&rrence ca&sing the damage, or before the commencement

of the action, if that is later.

he Barsaw -onvention however denies to the carrier availment +of the provisions which ecl&de or

limit his liability, if the damage is ca&sed by his wilf&l miscond&ct or by s&ch defa&lt on his part as, in

accordance with the law of the co&rt sei*ed of the case, is considered to be e:&ivalent to wilf&lmiscond&ct,+ or +if the damage is 3similarly4 ca&sed . . by any agent of the carrier acting within the

scope of his employment.+ (( he 6ag&e Protocol amended the Barsaw -onvention by removingthe provision that if the airline too all necessary steps to avoid the damage, it co&ld ec&lpate itself

completely, (/ and declaring the stated limits of liability not applicable +if it is proved that the

damage res&lted from an act or omission of the carrier, its servants or agents, done with intent toca&se damage or reclessly and with nowledge that damage wo&ld probably res&lt.+ he same

deletion was effected by the 2ontreal Agreement of 1@


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attrib&table to its officers and employees. (@ h&s, an air carrier was sentenced to pay not onlycompensatory b&t also moral and eemplary damages, and attorney=s fees, for instance, where its

employees r&dely p&t a passenger holding a first%class ticet in the to&rist or economy section, /or o&sted a brown Asiatic from the plane to give his seat to a white man, /1 or gave the seat of a

passenger with a confirmed reservation to another, /( or s&b;ected a passenger to etremely r&de,even barbaric treatment, as by calling him a +money.+ //

"n the case at bar, no bad faith or otherwise improper cond&ct may be ascribed to the employees of

petitioner airline8 and Dr. Pablo=s l&ggage was event&ally ret&rned to her, belatedly, it is tr&e, b&twitho&t appreciable damage. he fact is, nevertheless, that some special species of in;&ry wasca&sed to Dr. Pablo beca&se petitioner A"A"A misplaced her baggage and failed to deliver it to her

at the time appointed a breach of its contract of carriage, to be s&re with the res&lt that shewas &nable to read the paper and mae the scientific presentation 3consisting of slides,

a&toradiograms or films, tables and tab&lations4 that she had painstaingly labored over, at theprestigio&s international conference, to attend which she had traveled h&ndreds of miles, to her

chagrin and embarrassment and the disappointment and annoyance of the organi*ers. )he felt, not&nreasonably, that the invitation for her to participate at the conference, etended by the #oint

FA$"AEA Division of Atomic Energy in Food and Agric&lt&re of the United 'ations, was a sing&larhonor not only to herself, b&t to the University of the Philippines and the co&ntry as well, an

opport&nity to mae some sort of impression among her colleag&es in that field of scientific activity.he opport&nity to claim this honor or distinction was irretrievably lost to her beca&se of Alitalia=s

breach of its contract.

Apart from this, there can be no do&bt that Dr. Pablo &nderwent profo&nd distress and aniety,

which grad&ally t&rned to panic and finally despair, from the time she learned that her s&itcaseswere missing &p to the time when, having gone to !ome, she finally reali*ed that she wo&ld no

longer be able to tae part in the conference. As she herself p&t it, she +was really shoced anddistra&ght and conf&sed.+

-ertainly, the compensation for the in;&ry s&ffered by Dr. Pablo cannot &nder the circ&mstances berestricted to that prescribed by the Barsaw -onvention for delay in the transport of baggage.

)he is not, of co&rse, entitled to be compensated for loss or damage to her l&ggage. As alreadymentioned, her baggage was &ltimately delivered to her in 2anila, tardily b&t safely. )he is however

entitled to nominal damages which, as the law says, is ad;&dicated in order that a right of the

plaintiff, which has been violated or invaded by the defendant, may be vindicated and recogni*ed,and not for the p&rpose of indemnifying the plaintiff for any loss s&ffered and this -o&rt agreesthat the respondent -o&rt of Appeals correctly set the amo&nt thereof at P0,.. As to the

p&rely technical arg&ment that the award to her of s&ch nominal damages is precl&ded by heromission to incl&de a specific claim therefor in her complaint, it s&ffices to draw attention to her

general prayer, following her plea for moral and eemplary damages and attorney=s fees, +for s&chother and f&rther ;&st and e:&itable relief in the premises,+ which certainly is broad eno&gh to

comprehend an application as well for nominal damages. 9esides, petitioner sho&ld have reali*edthat the eplicit assertion, and proof, that Dr. Pablo=s right had been violated or invaded by it

absent any claim for act&al or compensatory damages, the prayer thereof having been vol&ntarilydeleted by Dr. Pablo &pon the ret&rn to her of her baggage necessarily raised the iss&e of nominal

damages.7 rd

his -o&rt also agrees that respondent -o&rt of Appeals correctly awarded attorney=s fees to Dr.Pablo, and the amo&nt of P5,. set by it is reasonable in the premises. he law a&thori*esrecovery of attorney=s fees inter alia where, as here, +the defendant=s act or omission has compelled

the plaintiff to litigate with third persons or to inc&r epenses to protect his interest,+ /0 or +wherethe co&rt deems it ;&st and e:&itable.+ /5

B6E!EF$!E, no error being perceived in the challenged decision of the -o&rt of Appeals, itappearing on the contrary to be entirely in accord with the facts and the law, said decision is hereby

AFF"!2ED, with costs against the petitioner.

)$ $!DE!ED.


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G.R. No. 74978 September 8, 1989MARKET DEVELOPERS, INC. MADE!, pet"t"o#er,$%.&ON. INTERMEDIATE APPELLATE CO'RT (#) GA'DIOSO '*, re%po#)e#t%.Tanjuatco, Oreta, Tanjuatco & Factoran for petitioner.Rodolfo M. Morelos for private respondent.

CRU3, J.:

Dhat one rnay notice at the outset about this case is that the private respondent, although theplaintiff in the court a =uo, seems to have lost all interest after the decision in his favor wasappealed to the respondent court. Ce did not even submit a brief. 1'ater, when this petition was filedand he was reFuired to comment, he also failed to do so. BeFuired to show cause for his non?compliance, hee4plained that his records of the case had been misplaced. Anyway, he said, he could not add to the evidencepresented at the trialE hence, he was submitting the case for resolution by this ourt without further pleadings. 2

It is not as simple as that. The petitioner has raised substantial arguments not touched in the decision underchallenge. It was in the private respondents interest to refute these arguments if he was to maintain his advantage.7otably, the issues raised by the petitioner are mainly legal and could have been answered without much need ofreferring to the records. If there was such a need, it would have been easy for the private respondent to consult therecords in this ourt, which were available to him. 3ut it is now too late for him to do so because of his waiver.

The private respondents seeming indifference becomes an the more costly to him in the light of the challengeddecision of the respondent court. ' It was rather sketchy, to say the least. Cardly an original idea or finding wasvolunteered. The appellate court made a brief recital of the facts, summaried the allegations of the plaintiff and thedefendant, Fuoted at length the findings and conclusions of the trial court 4 declared them well?taken andmeritorious,G and concluded by aiming the appealed decision in toto. It was a mistake for the private respondent tofully rely on that unsatisfactory decision.

It appears that on "une -, #$%0, petitioner Market 5evelopers, Inc. (MA5&* entered into a written barging and towage contract with private respondent 6audioso :y for the shipment of the formers cargo from Iligan ity to+alibo, Aklan, at the rate of ) #.


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After considering the issues and the arguments of the parties, we find that it was erroneous for the respondentcourts to affirm that the original contract concluded on "une -, #$%0, continued to regulate the relations of theparties. Dhat it should have held instead was that the first written contract had been cancelled and replaced by thesecond verbal contract because of the change in the destination of the cargo.

In his testimony, the private respondent said he felt there was no need to draft another agreement as anyway therates remained unchanged at )#.


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De read this last provision as meaning that the charter party may be oral, in which case the terms thereof, nothaving been reduced to writing, shall be those embodied in the bin of lading.

onformably, we recognied in ompania Maritima v. Insurance ompany of 7orth America, 1'the e4istence of acontract of affreightment entered into by telephone, where it was shown that this oral agreement was laterconfirmed by a formal and written booking issued by the shippers branch office and later carried out by the carrier.

De see no reason why the second agreement of the parties to deliver the petitioners cargo to Bo4as ity instead of

+alibo, Aklan, should not be recognied simply because it was not in writing. 'aw and @urisprudence support thevalidity of such a contract. And there is no @ustification either to incorporate in such contract the stipulation fordemurrage in the original written contract which provided for a different port of destination than that later agreedupon by the parties. It was precisely this vital change in the second contract that rendered that first contractineffectual.

If the rate provided for in the old written contract was maintained in the new oral contract, it was simply because, asthe private respondent himself declared, the rates for +alibo, Aklan and ulasi, Bo4as ity, where the same. 3utthe demurrage charges cannot be deemed stipulated also in the verbal contract because the conditions in the portsof Aklan and Bo4as ity were, unlike the rates, not the same. In fact, they were vastly different.

The parol evidence rule is clearly inapplicable because that involves the verbal modification usually not allowed awritten agreement admittedly still valid and subsisting. In the case at bar, the first written agreement had not merely

been modified but actually replaceby the second verbal agreement, which is perfectly valid even if not in writinglike the first. As has been correctly held!

7o principle of law makes it necessary that a new contract upon the same sub@ect between thesame persons shall be reduced to writing because the old contract was written. 14

Begarding the bill of lading, an e4amination thereof will reveal that there is no condition or reFuirement therein forthe payment of demurrage charges. :nder the afore?Fuoted Article 12 of the ode of ommerce, therefore, therewas no reason to read any stipulation for demurrage into the second contract.

At that, even assuming that the original agreement for demurrage had been carried over in the second contract,there is no acceptable evidence of the delay allegedly incurred by the petitioner in the unloading of its cargo in

Bo4as ity. :ys testimony on this matter is self?serving, let alone the fact that he admittedly was not present at theunloading. Cis corroboration is hearsay. This consisted merely of &4hibits 3 and , 1( the so?called statement offacts regarding the unloading of the cargo from the barge, prepared by the barge patron, a certain 5ing "ulian. Thisperson was not presented at the trial to testify on his report and could therefore not be sub@ected to crosse4amination.

A no less important consideration is the timeliness of the private respondents demand for the payment ofdemurrage charges as this would indicate the real intention of the parties regarding this matter.

The petitioner points out that the original bill sent by the private respondent charged it only for the freight but madeno mention of the demurrage charges. The trial court correctly noted, and the respondent court agreed, that Gthis isso because at the time &4hibit was made which was on "uly 0, #$%0, there was yet no demurrage. As a matter offact, unloading had not yet started. The unloading started on "uly #2, #$%0. (&4h. G5G*

True. 3ut accepting ar)ueno the facts stated in the mentioned e4hibits, we find that after sending the petitioner thebilling dated "uly 0, #$%0, the private respondent did not make any additional billing for demurrage following thecompletion of the unloading on "uly


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onsidering that :ys original billing for freightage was made even while the petitioners cargo was still beingunloaded in Bo4as ity, one can only wonder why the billing for the demurrage charges was not made with similardispatch, that is, soon after the alleged delay. :ncharacteristically, that billing was not at all promptE indeed, it wasine4plicably deferred. It is not e4plained either why, when the petitioner remitted what it e4pressly described as GfunpaymentG of its account, :y did not make haste to say that the demurrage charges were still outstanding nor did hemention this claim when he later entered into another freightage contract with the petitioner. More curiously, it tookall of si4 months before it occurred to :y to make a written demand for demurrage although he says his severalverbal demands had been consistently ignored.

The ourt finds that while this delay, standing by itself, is not long enough to constitute laches, it neverthelessclearly reflects on the private respondents credibility when assessed in relation to the facts above narrated.

The sum of it all is that while private respondent could have met all the arguments of the petitioner frontally, heelected to rely merely on the decisions of the trial court and the respondent court, perhaps feeling smuggly that hehad already won. That was his error. Ce mis@udged those @udgments. It should never be assumed that when thisourt sits to review the decisions of the lower courts, it will merely and automatically affirm them without furtherinFuiry on the convenient assumption that they are correct. That may be a presumption, and it is often valid, but it isnever conclusive upon us. Such decisions are always e4amined carefully and thoroughly by this ourt, in the lightof the issues and arguments raised by the parties before it, and may be modified or even reversed wheneverwarranted to give the deserving suitor the appropriate relief As in this case.

DC&B&8=B&, the petition is 6BA7T&5. The decision of the respondent court is B&K&BS&5. ivil ase 7o. B#0-$ in the Begional Trial ourt of ebu is hereby dismissed, with costs against the private respondent.

S= =B5&B&5.

G.R. No. L-(1910 A+ 10, 1989

LITONUA SHIPPING COMPAN$ INC., petitionervs.NATIONAL SEAMEN OARD a! GREGORIO P. CANDONGO respondents.

;errer, alte, ariano, %an)alan) - illanue/a !or petitioner.

#tratonico %. Anano !or pri/ate re#ponent.

%ELICIANO, J.:

In this )etition for ertiorari, petitioner 'iton@ua Shipping ompany, Inc. (G'inton@uaG* seeks toannul and set aside a decision dated, 2# May #$%$ of the 7ational Seamen 3oard (G7S3G* in7S3 ase 7o. #22#?%% affirming the decision dated #% 8ebruary #$%% of the 7S3 hearingofficer which ad@udged petitioner 'iton@ua liable to private respondent for violation of the latterscontract of employment and which ordered petitioner to pay damages.

)etitioner 'iton@ua is the duly appointed local crewing Managing =ffice of the 8airwind Shippingorporation (8airwind*. The M/K u!ton Ba5is an ocean?going vessel of foreign registry ownedby the B.5. Mullion Ship 3roking Agency 'td. (GMullionG*. =n ## September #$%1, while the


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u!ton Ba5was in the port of ebu and while under charter by 8airwind, the vessels mastercontracted the services of, among others, private respondent 6regorio andongo to serve asThird &ngineer for a period of twelve (#* months with a monthly wage of :S;--.--. Thisagreement was e4ecuted before the ebu Area Manning :nit of the 7S3. Thereafter, privaterespondent boarded the vessel. =n 0 5ecember #$%1, before e4piration of his contract, privaterespondent was reFuired to disembark at )ort +elang, Malaysia, and was returned to the)hilippines on "anuary #$%%. The cause of the discharge was described in his Seamans 3ook

as by owners arrangeG.1

Shortly after returning to the )hilippines, private respondent filed a complaint before public respondent 7S3, whichcomplaint was docketed as 7S3?#22#?%%, for violation of contract, against Mullion as the shipping company andpetitioner 'iton@ua as agent of the shipowner and of the charterer of the vessel.

At the initial hearing, the 7S3 hearing officer held a conference with the parties, at which conference petitioner'iton@ua was represented by one of its supercargos, &dmond ru. &dmond ru asked, in writing, that the hearingbe postponed for a month upon the ground that the employee of 'iton@ua in charge of the case was out of town. Thehearing officer denied this reFuest and then declared petitioner 'iton@ua in default. At the hearing, privaterespondent testified that when he was recruited by the aptain of the u!ton Ba5, the latter was accompanied to the7S3 ebu Area Manning :nit by two (* supercargos sent by petitioner 'iton@ua to ebu, and that the two (*supercargos &dmond ru and Benato 'iton@ua assisted private respondent in the procurement of his 7ationalInvestigation and Security Agency (7ISA* clearance. Messrs. ru and 'iton@ua were also present during privaterespondents interview by aptain Co +ing Jiu of the u!ton Ba5.

=n #% 8ebruary #$%%, the hearing officer of the 7S3 rendered a @udgment by default, 2the dispositive portion ofwhich read!

Dherefore, premises considered, @udgment is hereby rendered ordering the respondents B.5.Mullion Shipbrokers o., 'td., and 'iton@ua Shipping o., Inc., @ointly and solidarily to pay thecomplainant the sum of four thousand si4 hundred fifty seven dollars and si4ty three cents(;


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agent of the vessels charterer, the 8airwind Shipping orporation, and that in the recruitmentprocess, the 'iton@ua Shipping ompany through its supercargos in the persons of &dmund ruand Benato 'iton@ua, had knowledge thereof and in fact assisted in the interviews conducted by theMaster of the crew applicants as admitted by Benato 'iton@ua including the acts of facilitating thecrews 7ISA clearances as testified to by complainant. Moreover, the participation of the 'iton@uaShipping orporation in the recruitment of complainant, together with the other crewmembers, inebu in September #$%1 can be traced to the contents of the letter of April , #$%1 by the 8airwindShipping 'imited, thru its 5irector 5avid C.'. Du addressed to the 7ational Seamen 3oard, copy of

which is on file with ontracts and 'icensing 5ivision, Fuote!

This is to certify that Messrs. 'iton@ua Shipping, Inc. is duly appointed local crewing Managing=ffice to attend on our rew reFuirements as well as attend to our ships reFuirements when in)hilippine ports.

De further authoried 'iton@ua Shipping o., Inc. to act as local representative who can sue and besued, and to bind and sign contracts for our behalf. 4

The 7S3 then lifted the suspension of the hearing officers #% 8ebruary #$%% decision.

)etitioner 'iton@ua once more moved for reconsideration. =n 2# May #$%$, public respondent 7S3 rendered adecision (which affirmed its hearing offices decision of #% 8ebruary #$%% and which read in part as follows!

It is clear that re#ponent LitonCua %hippin) o., 2nc. i# the authori.19 i# no other than LitonCua %hippin) o*pan5, 2nc.

8rom this observation, it can be reasonably inferred that the*a#ter o! the /e##el acte !or an inbehal! o! ;airwin %hippin) orporation who ha the obli)ation to pa5 the #alar5 o! theco*plainant. It necessarily follows that 8airwind %hippin) orporation i# the e*plo5er o! #aico*plainant. Moreover, it had been established by complainant that LitonCua %hippin) o*pan5,2nc., ha (nowle)e o! an participate, throu)h it# e*plo5ee, in the recruit*ent o! hereinco*plainant.

444 444 444

In view of the foregoing, and pursuant to Art. 2 of the 7ew 'abor ode of the )hilippines, whichprovides that, The state shall afford protection to labor . . . as well as the provisions of Art. hibit properlihts and in failin to ta+e the proper steps to +eep out of the path of the defendant@s vessel, nevertheless

the officers on defendant@s vessel, by the e>ercise of due precautions miht have avoided the collision by avery simple manuever. ut it is sufficient answer to this contention to point out that the rule of liability inthis urisdiction for maritime accidents such as that now under consideration is clearly, definitely, andune7uivocally laid down in the aboveBcited article 2( of the Code of Commerce< and under that rule, theevidence disclosin that both vessels were blameworthy, the owners of either can successfully maintain anaction aainst the other for the loss or inury of his vessel.

!n cases of a disaster arisin from the mutual nelience of two parties, the party who has a last clearopportunity of avoidin the accident, notwithstandin the nelience of his opponent, is consideredwholly responsible for it under the commonBlaw rule of liability as applied in the courts of common lawof the =nited )tates. ut this rule which is not reconiGed in the courts of admiralty in the =nited )tates,

wherein the loss is divided in cases of mutual and concurrin nelience, as also where the error of onevessel has e>posed her to daner of collision which was consummated by he further rule, that where theprevious application by the further rule, that where the previous act of nelience of one vessel hascreated a position of daner, the other vessel is not necessarily liable for the mere failure to reconiGe theperilous situation< and it is only when in fact it does discover it in time to avoid the casualty by the use ofordinary care, that it becomes liable for the failure to ma+e use of this last clear opportunity to avoid theaccident. )ee cases cited in ?otes, ( Cyc., pp. 011, 012, 010.: )o, under the Inlish rule which conformsvery nearly to the commonBlaw rule as applied in the American courts, it has been held that the fault of thefirst vessel in failin to e>hibit proper lihts or to ta+e the proper side of the channel will relieve fromliability one who neliently runs into such vessels before he sees it< althouh it will not be a defense toone who, havin timely warnin of the daner of collision, fails to use proper care to avoid it. olloc+ on

Torts, 0('.: !n the case at bar, the most that can be said in support of plaintiff@s contention is that there wasnelience on the part of the officers on defendant@s vessel in failin to reconiGe the perilous situationcreated by the nelience of those in chare of plaintiff@s launch, and that had they reconiGed it in time,they miht have avoided the accident. ut since it does not appear from the evidence that they did, in fact,discover the perilous situation of the launch in time to avoid the accident by the e>ercise of ordinary care,it is

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