Averages are classified into simple or particular and general or gross.
Generally speaking, simple or particular averages include all expenses and damages caused to the vessel or cargo which have not inured to the common benefit, and are, therefore, to be borne only by the owner of the property gave rise to same.
General or gross averages include "all the damages and expenses which are deliberately caused in order to save the vessel, its cargo, or both at the same time, from a real and known risk.” Being for the common benefit, gross averages are to be borne by the owners of the articles saved.
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.
Standard Oil Co. of New York v. Lopez Castelo
The owner of the vessel is civilly liable for the acts of the captain; and he can only escape from this civil liability by abandoning his property in the ship and any freight that he may have earned on the voyage.
In a general average, the shipper whose cargo was sacrificed in order to save the ship and cargo may recover from the shipowner. The Shipowner is directly liable for the general average but may recover from the other individuals liable to contribute to the general average.
Philippine Home Assurance v. CA
As a rule, general or gross averages include all damages and expenses which are deliberately caused in order to save the vessel, its cargo, or both at the same time, from a real and known risk.
While the instant case may technically fall within the purview of the said provision, the formalities prescribed under Articles 813 and 814 of the Code of Commerce in order to incur the expenses and cause the damage corresponding to gross average were not complied with.
Formalities:
Resolution of the Captain after deliberation with the sailing mate and other officers of the vessel, and after hearing the persons interested in the cargo who may be present.
The shippers have may object and if overruled by the captain, they may proceed against the captain if they can prove malice, lack of skill or negligence.
If the situation is urgent, the deliberation may be dispensed with.
Resolution must be entered in the logbook stating:
Minutes must be signed all persons present. If urgent, by the captain and officers.
Minutes shall state the goods jettisoned.
Copy of the minutes must be delivered to the maritime judicial authority within 24 hours from arrival and must be ratified under oath.
COLLISSIONS
Mecenas v. CA
The grossness of the negligence of the "Don Juan" is underscored when one considers the foregoing circumstances in the context of the following facts: Firstly, the "Don Juan" was more than twice as fast as the "Tacloban City;" it carried the full complement of officers and crew members specified for a passenger vessel of her class; it was equipped with radar; the "Don Juan's officer on-watch had sighted the "Tacloban City" on his radar screen while the latter was still four (4) nautical miles away.
It is true that the "Tacloban City" failed to follow Rule 18 of the International Rules of the Road which requires two (2) power-driven vessels meeting end on or nearly end on each to alter her course to starboard (right) so that each vessel may pass on the port side (left) of the other. The "Tacloban City," when the two (2) vessels were only three-tenths (0.3) of a mile apart, turned (for the second time) 15° to port side while the "Don Juan" veered hard to starboard. . . . [But] "route observance" of the International Rules of the Road will not relieve a vessel from responsibility if the collision could have been avoided by proper care and skill on her part or even by a departure from the rules.
In the petition at bar, the "Don Juan" having sighted the "Tacloban City" when it was still a long way off was negligent in failing to take early preventive action and in allowing the two (2) vessels to come to such close quarters as to render the collision inevitable when there was no necessity for passing so near to the "Tacloban City" as to create that hazard or inevitability, for the "Don Juan" could choose its own distance. It is noteworthy that the "Tacloban City," upon turning hard to port shortly before the moment of collision, signalled its intention to do so by giving two (2) short blasts with its horn. The "Don Juan" gave no answering horn blast to signal its own intention and proceeded to turn hard to starboard
Smith Bell and Company v. CA
For her part, the "Yotai Maru" did comply with its obligations under Rule 18 (a). As the "Yotai Maru" found herself on an "end-on" or a "nearly end-on" situation vis-a-vis the "Don Carlos," and as the distance between them was rapidly shrinking, the "Yotai Maru" turned starboard (to its right) and at the same time gave the required signal consisting of one short horn blast. The "Don Carlos" turned to portside (to its left), instead of turning to starboard as demanded by Rule 18 (a). The "Don Carlos" also violated Rule 28 (c) for it failed to give the required signal of two (2) short horn blasts meaning "I am altering my course to port."
A "proper look-out" is one who has been trained as such and who is given no other duty save to act as a look-out and who is stationed where he can see and hear best and maintain good communication with the officer in charge of the vessel, and who must, of course, be vigilant.
The Second mate shall take command of the vessel in case of the inability or disqualification of the captain and sailing mate, assuming, in such case, their powers and liability.
Manila Steamship v. Insa Abdulhaman
In case of collision between two vessels imputable to both of them, each vessel shall suffer her own damage and both shall be solidarily liable to the damages caused to their cargoes. In making both vessels solidarily liable, their responsibility is direct.
Despite the total loss of one of the vessels, the ship owner of said vessel is not absolved by the limited liability rule due to his concurrent negligence in knowingly hiring an unlicensed captain and engineer, thereby increasing the risk of passengers.
Moreover, the said shipowner in obtaining his permit to operate, assumed all risks and thereby waived the application of the limited liability rule.
Caltex Philippines v. Sulpicio Lines
A charter party is a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a specified time or use; a contract of affreightment is one by which the owner of a ship or other vessel lets the whole or part of her to a merchant or other person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight.
A contract of affreightment may be either time charter, wherein the leased vessel is leased to the charterer for a fixed period of time, or voyage charter , wherein the ship is leased for a single voyage. In both cases, the charter-party provides for the hire of the vessel only, either for a determinate period of time or for a single or consecutive voyage, the ship owner to supply the ship's store, pay for the wages of the master of the crew, and defray the expenses for the maintenance of the ship.
Under a demise or bareboat charter on the other hand, the charterer mans the vessel with his own people and becomes, in effect, the owner for the voyage or service stipulated, subject to liability for damages caused by negligence.
If the charter is a contract of affreightment, which leaves the general owner in possession of the ship as owner for the voyage, the rights and the responsibilities of ownership rest on the owner. The charterer is free from liability to third persons in respect of the ship.
In this case, the charter party agreement did not convert the common carrier into a private carrier. The parties entered into a voyage charter, which retains the character of the vessel as a common carrier.
Under the COGSA, the carrier impliedly warrants the seaworthiness of the ship. 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. The failure of a common carrier to maintain in seaworthy condition the vessel involved in its contract of carriage is a clear breach of its duty prescribed in Article 1755 of the Civil Code.
The charterer of a vessel has no obligation before transporting its cargo to ensure that the vessel it chartered complied with all legal requirements. The duty rests upon the common carrier simply for being engaged in "public service." Because of the implied warranty of seaworthiness, shippers of goods, when transacting with common carriers, are not expected to inquire into the vessel's seaworthiness, genuineness of its licenses and compliance with all maritime laws.
National Development Company v. CA
Article 826 of the Code of Commerce provides that where collision is imputable to the personnel of a vessel, the owner of the vessel at fault, shall indemnify the losses and damages incurred after an expert appraisal. But more in point to the instant case is Article 827 of the same Code, which provides that if the collision is imputable to both vessels, each one shall suffer its own damages and both shall be solidarily responsible for the losses and damages suffered by their cargoes.
Significantly, under the provisions of the Code of Commerce, particularly Articles 826 to 839, the shipowner or carrier, is not exempt from liability for damages arising from collision due to the fault or negligence of the captain. Primary liability is imposed on the shipowner or carrier in recognition of the universally accepted doctrine that the shipmaster or captain is merely the representative of the owner who has the actual or constructive control over the conduct of the voyage.
The agent, even though he may not be the owner of the vessel, is liable to the shippers and owners of the cargo transported by it, for losses and damages occasioned to such cargo, without prejudice, however, to his rights against the owner of the ship, to the extent of the value of the vessel, its equipment, and the freight.
Kramer v. CA
In an action for damages arising from the collision of two (2) vessels the four (4) year prescriptive period must be counted from the day of the collision. The aggrieved party need not wait for a determination by an administrative body like a Board of Marine Inquiry, that the collision was caused by the fault or negligence of the other party before he can file an action for damages.
Note: Case is shipowner against shipowner.
SPECIAL CONTRACTS OF MARITIME COMMERCE
Guerrero v. Madrigal Shipping
Contract of Carriage. Consent manifested by the fact that the passenger boards the ship and the carrier consents or accepts him in the ship for transportation. Cause which is the fare paid by the passenger. Object which is the transportation of the passenger from the place of departure to the place of destination.
Planters Products v. CA
A "charter-party" is defined as a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a specified time or use; a contract of affreightment by which the owner of a ship or other vessel lets the whole or a part of her to a merchant or other person for the conveyance of goods, on a particular voyage, in consideration of the payment of freight; Charter parties are of two types: (a) contract of affreightment which involves the use of shipping space on vessels leased by the owner in part or as a whole, to carry goods for others; and, (b) charter by demise or bareboat charter, by the terms of which the whole vessel is let to the charterer with a transfer to him of its entire command and possession and consequent control over its navigation, including the master and the crew, who are his servants. Contract of affreightment may either be time charter, wherein the vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single voyage. In both cases, the charter-party provides for the hire of vessel only, either for a determinate period of time or for a single or consecutive voyage, the shipowner to supply the ship's stores, pay for the wages of the master and the crew, and defray the expenses for the maintenance of the ship.
It is therefore imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion of a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage-charter. It is only when the charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar as the particular voyage covering the charter-party is concerned. Indubitably, a shipowner in a time or voyage charter retains possession and control of the ship, although her holds may, for the moment, be the property of the charterer.
Coastwise Lighterage Corporation v CA
Under the demise or bareboat charter of the vessel, the charterer will generally be regarded as the owner for the voyage or service stipulated. The charterer mans the vessel with his own people and becomes the owner pro hac vice , subject to liability to others for damages caused by negligence. To create a demise, the owner of a vessel must completely and exclusively relinquish possession, command and navigation thereof to the charterer, anything short of such a complete transfer is a contract of affreightment (time or voyage charter party) or not a charter party at all
On the other hand a contract of affreightment is one in which the owner of the vessel leases part or all of its space to haul goods for others. It is a contract for special service to be rendered by the owner of the vessel and under such contract the general owner retains the possession, command and navigation of the ship, the charterer or freighter merely having use of the space in the vessel in return for his payment of the charter hire
An owner who retains possession of the ship though the hold is the property of the charterer, remains liable as carrier and must answer for any breach of duty as to the care, loading and unloading of the cargo
Maritime Agencies v. CA
In this case, the charterer was liable for the unloading of the cargo because of a contract. However, the charterer’s agent, which cannot be considered a shipagent is not answerable for injury caused by the principal. It is a well-settled principle in agency that the agent shall be liable for the act or omission of the principal only if the latter is undisclosed.
In a previous case however, the charterer’s agent was made liable because the charterer represented itself on the bill of lading. As the charterer itself was the carrier it was liable for the loss and damage to the cargo. As for the charterer’s agent, it was considered as shipagent because it took charge of the unloading and issued cargo receipts in its own name and claims against the charterer-carrier were received and processed by it.
Here, the charterer did not represent itself as carrier. It only assumed responsibility for unloading. Consequently, the charterer’s agent cannot be considered a ship agent and is not liable to third parties.
Litonjua v. National Seamen Board
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 [charterer] as owner pro hac vice, petitioner Litonjua having failed to show that it [fairwind] 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.
Puromines v. CA
Responsibility to third persons for goods shipped on board a vessel follows the vessel's possession and employment; and if possession is transferred to the charterer by virtue of a demise, the charterer, and not the owner, is liable as carrier on the contract of affreightment made by himself or by the master with third persons, and is answerable for loss, damage or nondelivery of goods received for transportation. An owner who retains possession of the ship, though the hold is the property of the charterer, remains liable as carrier and must answer for any breach of duty as to the care, loading or unloading of the cargo.
Ouano v. CA
The act of the charterer in sub-chartering the vessel, in spite of a categorical prohibition may be a violation of the contract, but the owner's right of recourse is against the original charterer, either for rescission or fulfillment, with the payment of damages in either case.
In a demise or bareboat, not only the entire capacity of the ship is let but the ship itself, and the possession is passed to the charterer. The entire control and management of it is given up to him. The general owner loses his lien for freight, but the lien itself is not destroyed; the charterer is substituted in his place, in whose favor the lien continues to exist when goods are taken on freight. The general owner, however, has no remedy for the charter of his vessel but his personal action on the covenants of the charter party. It is a contract in which he trusts in the personal credit of the charterer.
Therefore, where the charter constitutes a demise of the ship and the charterer is the owner for the voyage, and that is the kind of charter party involved in the instant case, the general owner has no lien on the cargo for the hire of the vessel, in the absence of an express provision therefor
Loadstar Shipping v. Pioneer Asia
Petitioner remains a common carrier notwithstanding the existence of the charter agreement with the Northern Mindanao Transport Company, Inc. since the said charter is limited to the ship only and does not involve both the vessel and its crew. As elucidated in Planters Products, its charter is only a voyage-charter, not a bareboat charter.
Mindanao Bus Company v. CIR
Bills of Lading, in modern jurisprudence, are not those issued by masters of vessels alone; they now comprehend all forms of transportation, whether by sea or land, and includes the receipts for cargo transported.
A bill of lading may be defined as a written acknowledgment of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or on his order. Such instruments are sometimes called 'shipping receipts,' 'forwarders' receipts,' and 'receipts for transportation." The designation, however, is not material, and neither is the form of the instrument. If it contains an acknowledgment by the carrier of the receipt of goods for transportation, it is, in legal effect, a bill of lading.
Macondray and Company v. Acting Commissioner of Customs
The inclusion of the unmanifested cargoes in the Bill of Lading does not satisfy the requirement of the aforequoted sections of the Tariff and Customs Code. It is to be noted that nowhere in the said section is the presentation of a Bill of Lading required, but only the presentation of a Manifest containing a true and accurate description of the cargoes.
This is for the simple reason that while a manifest is a declaration of the entire cargo, a bill of lading is but a declaration of a specific part of the cargo and is a matter of business convenience based exclusively on a contract. The object of a manifest is to furnish the customs officers with a list to check against, to inform our revenue officers what goods are being brought into the country, and to provide a safeguard against goods being brought into this country on a vessel and then smuggled ashore. In short, while a bill of lading is ordinarily merely a convenient commercial instrument designed to protect the importer or consignee, a manifest of the cargo is absolutely essential to the exportation or importation of property in all vessels.
The evident intent and object of which is to impose upon the owners and officers of such vessel an imperative obligation to submit lists of the entire loading of the ship in the prescribed form, to facilitate the labors of the customs and immigration officers and to defeat any attempt to make use of such vessels to secure the unlawful entry of persons or things into the country. Since therefore, the purpose served by the manifest is far different from that of the bill of lading, We cannot acceptor place an imprimatur on the contention of petitioner that the entries in the bill of lading adequately supplied the deficiency of the manifest and cured it of its infirmity. The mandate of the law is clear and We cannot settle for less. The law imposes the absolute obligation, under penalty for failure, upon every vessel from a foreign port to have "on board complete written or typewritten manifests of all her cargo, signed by the master". Where the law requires a manifest to be kept or delivered, it is not complied with unless the manifest is true and accurate.
Magellan v. CA
An on board bill of lading is one in which it is stated that the goods have been received on board the vessel which is to carry the goods, whereas a received for shipment bill of lading is one in which it is stated that the goods have been received for shipment with or without specifying the vessel by which the goods are to be shipped. An on board bill of lading is issued when the goods have been actually placed aboard the ship with every reasonable expectation that the shipment is as good as on its way.
Received for shipment bills of lading are issued whenever conditions are not normal and there is insufficiency of shipping space.
It is, therefore, understandable that a party to a maritime contract would require an on board bill of lading because of its apparent guaranty of certainty of shipping as well as the seaworthiness of the vessel which is to carry the goods.
Demurrage, in its strict sense, is the compensation provided for in the contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading. Essentially, demurrage is the claim for damages for failure to accept delivery. In a broad sense, every improper detention of a vessel may be considered a demurrage. Liability for demurrage, using the word in its strictly technical sense, exists only when expressly stipulated in the contract. Using the term in its broader sense, damages in the nature of demurrage are recoverable for a breach of the implied obligation to load or unload the cargo with reasonable dispatch, but only by the party to whom the duty is owed and only against one who is a party to the shipping contract. Notice of arrival of vessels or conveyances, or of their placement for purposes of unloading is often a condition precedent to the right to collect demurrage charges.
Telengtan Brothers v. CA
A bill of lading is both a receipt and a contract.
Liability for demurrage only starts after the free time and at the time when the consignee may claim the cargo.
Sweet Lines v. Teves
Condition No. 14, under the passenger ticket provides that the venue of actions arising out of the conditions and provisions of the ticket, irrespective of where it is issued, shall be filed in the competent courts in the City of Cebu.
Condition No. 14, if enforced, will be subversive of the public good or interest, since it will frustrate in meritorious cases, actions of passenger cants outside of Cebu City, thus placing petitioner company at a decided advantage over said persons, who may have perfectly legitimate claims against it. The said condition should, therefore, be declared void and unenforceable, as contrary to public policy — to make the courts accessible to all who may have need of their services.
Reyma Brokerage v. Phil Home Assurance
Evidently, the carrier, by signifying in the bill of lading that "it is a receipt ... for the number of packages shown above," had explicitly admitted that the containerized shipments had actually the number of packages declared by the shipper in the bill of lading. And this conclusion is bolstered by the stipulation printed in the bill of lading, "unless expressly acknowledged and agreed to." Therefore, the phrase "said to contain" also appearing in the bill of lading must give way to this reality.
The bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described.
The situation is different however where the carrier of the containerized cargo simply admits the information furnished by the shipper with regard to the goods it shipped as reflected in the bill of lading ("said to contain").
As the carrier prima facie received all the shipments in the sealed containers, it has the burden to rebut the conclusion that it received the same without shortage.
Keng Hua Paper Products v. CA
A bill of lading serves two functions. First , it is a receipt for the goods shipped. Second , it is a contract by which three parties, namely, the shipper, the carrier, and the consignee undertake specific responsibilities and assume stipulated obligations. A "bill of lading delivered and accepted constitutes the contract of carriage even though not signed," because the "(a)cceptance of a paper containing the terms of a proposed contract generally constitutes an acceptance of the contract and of all of its terms and conditions of which the acceptor has actual or constructive notice." In a nutshell, the acceptance of a bill of lading by the shipper and the consignee, with full knowledge of its contents, gives rise to the presumption that the same was a perfected and binding contract.
Hence, the contract of carriage, as stipulated in the bill of lading in the present case, must be treated independently of the contract of sale between the seller and the buyer, and the contract for the issuance of a letter of credit between the buyer and the issuing bank. Any discrepancy between the amount of the goods described in the commercial invoice in the contract of sale and the amount allowed in the letter of credit will not affect the validity and enforceability of the contract of carriage as embodied in the bill of lading. As the bank cannot be expected to look beyond the documents presented to it by the seller pursuant to the letter of credit, neither can the carrier be expected to go beyond the representations of the shipper in the bill of lading and to verify their accuracy vis-a-viz the commercial invoice and the letter of a credit.
Market Developers v. IAC
The charter party may be oral, in which case the terms thereof, not having been reduced to writing, shall be those embodied in the bill of lading.
We see no reason why the second agreement of the parties to deliver the petitioner's cargo to Roxas City instead of Kalibo, Aklan, should not be recognized simply because it was not in writing. Law and jurisprudence support the validity of such a contract. And there is no justification either to incorporate in such contract the stipulation for demurrage in the original written contract which provided for a different port of destination than that later agreed upon by the parties. It was precisely this vital change in the second contract that rendered that first contract ineffectual.
If the rate provided for in the old written contract was maintained in the new oral contract, it was simply because, as the private respondent himself declared, the rates for Kalibo, Aklan and Culasi, Roxas City, where the same. But the demurrage charges cannot be deemed stipulated also in the verbal contract because the conditions in the ports of Aklan and Roxas City were, unlike the rates, not the same.
Regarding the bill of lading, an examination thereof will reveal that there is no condition or requirement therein for the payment of demurrage charges. Under the afore-quoted Article 653 of the Code of Commerce, therefore, there was no reason to read any stipulation for demurrage into the second contract.
