Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION

G.R. No. 106999 June 20, 1996
PHILIPPINE HOME ASSURANCE CORPORATION, petitioner,
vs.
COURT OF APPEALS and EASTERN SHIPPING LINES, INC., respondents.

APUNAN, J.:p
Eastern Shipping Lines, Inc. (ESLI) loaded on board SS Eastern Explorer in
Kobe, Japan, the following shipment for carriage to anila and !eb", freight
pre#paid and in good order and condition, viz$ (a) two (%) boxes internal
comb"stion engine parts, consigned to &illiam Lines, Inc. "nder 'ill of Lading
(o. )*%%+,- (b) ten (l)) metric ton. (,,* bags) ammoni"m chloride, consigned
to .rca/s !ompan0 "nder 'ill of Lading (o. K!E#I%- (c) two h"ndred (%)))
bags 1l"e ,)), consigned to 2an .riental atch !ompan0 "nder 'ill of
Lading (o. K!E#+- and (d) garments, consigned to 3ing 4ela0o "nder 'ills of
Lading (os. K5#6, and K5#6*.
&hile the vessel was off .7inawa, Japan, a small flame was detected on the
acet0lene c0linder located in the accommodation area near the engine room
on the main dec7 level. 5s the crew was tr0ing to exting"ish the fire, the
acet0lene c0linder s"ddenl0 exploded sending a flash of flame thro"gho"t the
accommodation area, th"s ca"sing death and severe in8"ries to the crew and
instantl0 setting fire to the whole s"perstr"ct"re of the vessel. 9he incident
forced the master and the crew to abandon the ship.
9hereafter, SS Eastern Explorer was fo"nd to be a constr"ctive total loss and
its vo0age was declared abandoned.
Several ho"rs later, a t"gboat "nder the control of :"7"da Salvage !o. arrived
near the vessel and commenced to tow the vessel for the port of (aha, Japan.
:ire fighting operations were again cond"cted at the said port. 5fter the fire
was exting"ished, the cargoes which were saved were loaded to another
vessel for deliver0 to their original ports of destination. ESLI charged the
consignees several amo"nts corresponding to additional freight and salvage
charges, as follows$ (a) for the goods covered b0 'ill of Lading (o. )*%%+,,
ESLI charged the consignee the s"m of 2;,<%6.=>, representing salvage
charges assessed against the goods- (b) for the goods covered b0 'ill of
Lading (o. K!E#;%, ESLI charged the consignee the s"m of 2%,<+).=* for
additional freight and 2+%=.;* for salvage charges against the goods- (c) for
the goods covered b0 'ill of Lading (o. K!E#+, ESLI charged the consignee
the s"m of 2,,%<%.%= for additional freight and 2*,;,).=+ for salvage charges
against the goods- and
(d) for the goods "nder 'ills of Lading (os. K5#6, and K5#6*, ESLI
charged the consignee the s"m of 2+,,,6.)= for salvage charges against the
goods.
9he charges were all paid b0 2hilippine ?ome 5ss"rance !orporation (2?5!)
"nder protest for and in behalf of the consignees.
2?5!, as s"brogee of the consignees, thereafter filed a complaint before the
@egional 9rial !o"rt of anila, 'ranch ,<, against ESLI to recover the s"m
paid "nder protest on the gro"nd that the same were act"all0 damages
directl0 bro"ght abo"t b0 the fa"lt, negligence, illegal act andAor breach of
contract of ESLI.
In its answer, ESLI contended that it exercised the diligence reB"ired b0 law in
the handling, c"stod0 and carriage of the shipment- that the fire was ca"sed
b0 an "nforeseen event- that the additional freight charges are d"e and
demandable p"rs"ant to the 'ill of Lading-
1
and that salvage charges are
properl0 collectible "nder 5ct (o. %=;=, 7nown as the Salvage Law.
9he trial co"rt dismissed 2?5!/s complaint and r"led in favor of ESLI
ratiocinating th"s$
9he B"estion to be resolved is whether or not the fire on the
vessel which was ca"sed b0 the explosion of an acet0lene
c0linder loaded on the same was the fa"lt or negligence of the
defendant.
Evidence has been presented that the SS CEastern ExplorerC was
a seaworth0 vessel (3eposition of J"mpei aeda, .ctober %,,
;<+), p. ,) and before the ship loaded the 5cet0lene !0linder (o.
(!& +6>, the same has been tested, chec7ed and examined and
was certified to have complied with the reB"ired safet0 meas"res
and standards (3eposition of Sen8ei ?a0ashi, .ctober %,, ;<+),
pp. %#,). &hen the fire was detected b0 the crew, fire fighting
operations was immediatel0 cond"cted b"t d"e to the explosion of
the acet0lene c0linder, the crew were "nable to contain the fire
and had to abandon the ship to save their lives and were saved
from drowning b0 passing vessels in the vicinit0. 9he b"rning of
the vessel rendering it a constr"ctive total loss and incapable of
p"rs"ing its vo0age to the 2hilippines was, therefore, not the fa"lt
or negligence of defendant b"t a nat"ral disaster or calamit0
which nobod0 wo"ld li7e to happen. 9he salvage operations
cond"cted b0 :"7"da Salvage !ompan0 (Exhibits C*#5C and C=#
5C) was perfectl0 a legal operation and charges made on the
goods recovered were legitimate charges.
5ct (o. %=;=, otherwise 7nown as the Salvage Law,
is th"s applicable to the case at bar. Section ; of 5ct
(o. %=;= states$
Sec ;. &hen in case of shipwrec7, the
vessel or its cargo shall be be0ond the
control of the crew, or shall have been
abandoned b0 them, and pic7ed "p and
conve0ed to a safe place b0 other
persons, the latter shall be entitled to a
reward for the salvage.
9hose who, not being incl"ded in the
above paragraph, assist in saving a
vessel or its cargo from shipwrec7, shall
be entitled to li7e reward.
In relation to the above provision, the S"preme !o"rt
has r"led in Erlanger D 1alinger v. Swedish East
5siatic !o., Ltd., ,* 2hil. ;6+, that three elements are
necessar0 to a valid salvage claim, namel0 (a)a
marine peril (b) service vol"ntaril0 rendered when not
reB"ired as an existing d"t0 or from a special contract
and (c) s"ccess in whole or in part, or that the service
rendered contrib"ted to s"ch s"ccess.
9he above elements are all present in the instant
case. Salvage charges ma0 th"s be assessed on the
cargoes saved from the vessel. 5s provided for in
Section ;, of the Salvage Law, C9he expenses of
salvage, as well as the reward for salvage or
assistance, shall be a charge on the things salvaged
or their val"e.C In anila @ailroad !o. v. acondra0
!o., ,6 2hil. >+,, it was also held that Cwhen a ship
and its cargo are saved together, the salvage
allowance sho"ld be charged against the ship and
cargo in the proportion of their respective val"es, the
same as in a case of general average . . .C 9h"s, the
Ccompensation to be paid b0 the owner of the cargo is
in proportion to the val"e of the vessel and the val"e
of the cargo saved.C (5tlantic 1"lf and 2acific !o. v.
Echida Kisen Kaisha, *% 2hil. ,%;). (emorand"m for
3efendant, @ecords, pp. %;%#%;,).
&ith respect to the additional freight charged b0 defendant from
the consignees of the goods, the same are also validl0
demandable.
5s provided b0 the !ivil !ode$
5rt. ;;6*. Except in cases expressl0 specified b0 law,
or when it is otherwise declared b0 stip"lation, or
when the nat"re of the obligation reB"ire the
ass"mption of ris7, no person shall be responsible for
those events which co"ld not be foreseen, or which
tho"gh foreseen, were inevitable.
5rt ;%==. 9he debtor in obligations to do shall also be
released when the prestation becomes legall0 or
ph0sicall0 impossible witho"t the fa"lt of the obligor.C
9he b"rning of CE5S9E@( EF2L.@E@C while off .7inawa
rendered it ph0sicall0 impossible for defendant to compl0 with its
obligation of delivering the goods to their port of destination
p"rs"ant to the contract of carriage. Ender 5rticle ;%== of the !ivil
!ode, the ph0sical impossibilit0 of the prestation exting"ished
defendant/s obligation..
It is b"t legal and eB"itable for the defendant therefore, to demand
additional freight from the consignees for forwarding the goods
from (aha, Japan to anila and !eb" !it0 on board another
vessel, the CE5S9E@( 5@S.C 9his finds s"pport "nder 5rticle
+** of the !ode of !ommerce which provides as follows$
5rt. +**. 5 captain who ma0 have ta7en on board the
goods saved from the wrec7 shall contin"e his co"rse
to the port of destination- and on arrival sho"ld
deposit the same, with 8"dicial intervention at the
disposal of their legitimate owners. . . .
9he owners of the cargo shall defra0 all the expenses
of this arrival as well as the pa0ment of the freight
which, after ta7ing into consideration the
circ"mstances of the case, ma0 be fixed b0
agreement or b0 a 8"dicial decision.
:"rthermore, the terms and conditions of the 'ill of Lading
a"thoriGe the imposition of additional freight charges in case of
forced interr"ption or abandonment of the vo0age. 5t the dorsal
portion of the 'ills of Lading iss"ed to the consignees is this
stip"lation$
;%. 5ll storage, transshipment, forwarding or other
disposition of cargo at or from a port of distress or
other place where there has been a forced
interr"ption or abandonment of the vo0age shall be at
the expense of the owner, shipper, consignee of the
goods or the holder of this bill of lading who shall be
8ointl0 and severall0 liable for all freight charges and
expenses of ever0 7ind whatsoever, whether pa0able
in advance or not that ma0 be inc"rred b0 the cargo in
addition to the ordinar0 freight, whether the service be
performed b0 the named carr0ing vessel or b0
carrier/s other vessels or b0 strangers. 5ll s"ch
expenses and charges shall be d"e and pa0able da0
b0 da0 immediatel0 when the0 are inc"rred.
9he bill of lading is a contract and the parties are bo"nd b0 its
terms (1ov/t of the 2hilippine Islands vs. Hncha"sti and !o., *)
2hil. %;<). 9he provision B"oted is binding "pon the consignee.
3efendant therefore, can validl0 reB"ire pa0ment of additional
freight from the consignee. 2laintiff can not th"s recover the
additional freight paid b0 the consignee to defendant.
(emorand"m for 3efendant, @ecord, pp. %;>#%;=).
2
.n appeal to the !o"rt of 5ppeals, respondent co"rt affirmed the trial co"rt/s
findings and concl"sions,
!
hence, the present petition for review before this
!o"rt on the following errors$
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S5L451E !?5@1ES.
"
It is B"ite evident that the foregoing assignment of errors challenges the
findings of fact and the appreciation of evidence made b0 the trial co"rt and
later affirmed b0 respondent co"rt. &hile it is a well#settled r"le that onl0
B"estions of law ma0 be raised in a petition for review "nder @"le *> of the
@"les of !o"rt, it is eB"all0 well#settled that the same admits of the following
exceptions, namel0$ (a) when the concl"sion is a finding gro"nded entirel0 on
spec"lation, s"rmises or con8ect"res- (b) when the inference made is
manifestl0 mista7en, abs"rd or impossible- (c) where there is a grave ab"se of
discretion- (d) when the 8"dgment is based on a misapprehension of facts- (e)
when the findings of fact are conflicting- (f) when the !o"rt of 5ppeals, in
ma7ing its findings, went be0ond the iss"es of the case and the same is
contrar0 to the admissions of both appellant and appellee- (g) when the
findings of the !o"rt of 5ppeals are contrar0 to those of the trial co"rt- (h)
when the findings of fact are concl"sions witho"t citation of specific evidence
on which the0 are based-
(i) when the facts set forth in the petition as well as in the petitioners/ main and
repl0 briefs are not disp"ted b0 the respondents- and (8) when the finding of
fact of the !o"rt of 5ppeals is premised on the s"pposed absence of evidence
and is contradicted b0 the evidence on record.
#
9h"s, if there is a showing, as
in the instant case, that the findings complained of are totall0 devoid of
s"pport in the records, or that the0 are so glaringl0 erroneo"s as to constit"te
grave ab"se of discretion, the same ma0 be properl0 reviewed and eval"ated
b0 this !o"rt.
It is worth0 to note at the o"tset that the goods s"b8ect of the present
controvers0 were neither lost nor damaged in transit b0 the fire that raGed the
carrier. In fact, the said goods were all delivered to the consignees, even if the
transshipment too7 longer than necessar0. &hat is at iss"e therefore is not
whether or not the carrier is liable for the loss, damage, or deterioration of the
goods transported b0 them b"t who, among the carrier, consignee or ins"rer
of the goods, is liable for the additional charges or expenses inc"rred b0 the
owner of the ship in the salvage operations and in the transshipment of the
goods via a different carrier.
In absolving respondent carrier of an0 liabilit0, respondent !o"rt of 5ppeals
s"stained the trial co"rt/s finding that the fire that g"tted the ship was a nat"ral
disaster or calamit0. 2etitioner ta7es exception to this concl"sion and we
agree.
In o"r 8"rispr"dence, fire ma0 not be considered a nat"ral disaster or calamit0
since it almost alwa0s arises from some act of man or b0 h"man means.
It cannot be an act of 1od "nless ca"sed b0 lightning or a nat"ral disaster or
cas"alt0 not attrib"table to h"man agenc0.
6
In the case at bar, it is not disp"ted that a small flame was detected on the
acet0lene c0linder and that b0 reason thereof, the same exploded despite
efforts to exting"ish the fire. (either is there an0 do"bt that the acet0lene
c0linder, obvio"sl0 f"ll0 loaded, was stored in the accommodation area near
the engine room and not in a storage area considerabl0 far, and in a safe
distance, from the engine room. oreover, there was no showing, and none
was alleged b0 the parties, that the fire was ca"sed b0 a nat"ral disaster or
calamit0 not attrib"table to h"man agenc0. .n the contrar0, there is strong
evidence indicating that the acet0lene c0linder ca"ght fire beca"se of the fa"lt
and negligence of respondent ESLI, its captain and its crew.
:irst, the acet0lene c0linder which was f"ll0 loaded sho"ld not have been
stored in the accommodation area near the engine room where the heat
generated therefrom co"ld ca"se the acet0lene c0linder to explode b0 reason
of spontaneo"s comb"stion. @espondent ESLI sho"ld have easil0 foreseen
that the acet0lene c0linder, containing highl0 inflammable material was in real
danger of exploding beca"se it was stored in close proximit0 to the engine
room.
Second, respondent ESLI sho"ld have 7nown that b0 storing the acet0lene
c0linder in the accommodation area s"pposed to be reserved for passengers,
it "nnecessaril0 exposed its passengers to grave danger and in8"r0. !"rio"s
passengers, ignorant of the danger the tan7 might have on h"mans and
propert0, co"ld have handled the same or co"ld have lighted and smo7ed
cigarettes while repairing in the accommodation area.
9hird, the fact that the acet0lene c0linder was chec7ed, tested and examined
and s"bseB"entl0 certified as having complied with the safet0 meas"res and
standards b0 B"alified experts
$
before it was loaded in the vessel onl0 shows
to a great extent that negligence was present in the handling of the acet0lene
c0linder after it was loaded and while it was on board the ship. Indeed, had
the respondent and its agents not been negligent in storing the acet0lene
c0linder near the engine room, then the same wo"ld not have lea7ed and
exploded d"ring the vo0age.
4eril0, there is no merit in the finding of the trial co"rt to which respondent
co"rt erroneo"sl0 agreed that the fire was not the fa"lt or negligence of
respondent b"t a nat"ral disaster or calamit0. 9he records are simpl0 wanting
in this regard.
5nent petitioner/s ob8ection to the admissibilit0 of Exhibits C*// and //>C, the
Statement of :acts and the arine (ote of 2rotest iss"ed b0 !aptain 9ib"rcio
5. Lica0lica0, we find the same impressed with merit beca"se said doc"ments
are hearsa0 evidence. !apt. Lica0lica0, aster of S.S. Eastern Explorer who
iss"ed the said doc"ments, was not presented in co"rt to testif0 to the tr"th of
the facts he stated therein- instead, respondent ESLI presented J"npei
aeda, its 'ranch anager in 9o70o and Ho7ohama, Japan, who evidentl0
had no personal 7nowledge of the facts stated in the doc"ments at iss"e. It is
clear from Section ,=, @"le ;,) of the @"les of !o"rt that an0 evidence,
whether oral or doc"mentar0, is hearsa0 if its probative val"e is not based on
the personal 7nowledge of the witness b"t on the 7nowledge of some other
person not on the witness stand. !onseB"entl0, hearsa0 evidence, whether
ob8ected to or not, has no probative val"e "nless the proponent can show that
the evidence falls within the exceptions to the hearsa0 evidence r"le.
%
It is
excl"ded beca"se the part0 against whom it is presented is deprived of his
right and opport"nit0 to cross#examine the persons to whom the statements or
writings are attrib"ted.
.n the iss"e of whether or not respondent co"rt committed an error in
concl"ding that the expenses inc"rred in saving the cargo are considered
general average, we r"le in the affirmative. 5s a r"le, general or gross
averages incl"de all damages and expenses which are deliberatel0 ca"sed in
order to save the vessel, its cargo, or both at the same time, from a real and
7nown ris7
9
&hile the instant case ma0 technicall0 fall within the p"rview of
the said provision, the formalities prescribed "nder 5rticles +;,
10
and +;*
11
of
the !ode of !ommerce in order to inc"r the expenses and ca"se the damage
corresponding to gross average were not complied with. !onseB"entl0,
respondent ESLI/s claim for contrib"tion from the consignees of the cargo at
the time of the occ"rrence of the average t"rns to na"ght.
2rescinding from the foregoing premises, it ind"bitabl0 follows that the cargo
consignees cannot be made liable to respondent carrier for additional freight
and salvage charges. !onseB"entl0, respondent carrier m"st ref"nd to herein
petitioner the amo"nt it paid "nder protest for additional freight and salvage
charges in behalf of the consignees.
&?E@E:.@E, the 8"dgment appealed from is hereb0 @E4E@SE3 and SE9
5SI3E. @espondent Eastern Shipping Lines, Inc. is .@3E@E3 to ret"rn to
petitioner 2hilippine ?ome 5ss"rance !orporation the amo"nt it paid "nder
protest in behalf of the consignees herein.
S. .@3E@E3.
Padilla, Bellosillo, Vitug and Hermosisima, Jr., JJ., concur.
Foo&no&e'
; Sec ;%. 5ll storage, transshipment forwarding or other disposition of
cargo at or from port of distress or other place where there has been a
forced interr"ption or abandonment of the vo0age shall be at the
expense of the owner, shipper, consignee of the goods or the holder of
this bill of lading who shall be 8ointl0 and severall0 liable for all freight
charges and expenses of ever0 7ind whatsoever, whether pa0able in
advance or not that ma0 be inc"rred b0 the cargo in addition to the
ordinar0 freight, whether pa0able in advance or not that ma0 be inc"rred
b0 the cargo in addition to the ordinar0 freight, whether the service be
performed b0 the named carr0ing vessel or b0 carrier/s other vessels or
b0 strangers s"ch expenses and charges shall be d"e and pa0able da0
b0 da0 immediatel0 when the0 are inc"rred.
% .riginal @ecords, pp. %*)#%*,.
, Rollo, pp. %<#,<.
* Id., at ;%#;,.
> 1eronimo v. !o"rt of 5ppeals, %%* S!@5 *<*, *<+#*<< (;<<,J- '2I
!redit !orporation v. !o"rt of 5ppeals, %)* S!@5 =);, =)+#=)< K;<<;J-
edina v. 5sistio, Jr., ;<; S!@5 %;+, %%,#%%* K;<<)J.
= Eastern Shipping Lines, Inc. v. Intermediate 5ppellate !o"rt ;>)
S!@5 *=, K;<+6J- 5frica v. !altex, ;= S!@5 **+ K;<==J- See also *
5gba0ani, !ommentaries and J"rispr"dence on the !ommercial Laws
of the 2hilippines, ;<<, Edition, p. **.
6 .riginal @ecords, p. ;6;.
+ 'ag"io v. !o"rt of 5ppeals, %%= S!@5 ,==, ,6) K;<<,J.
< 5rt +;;, !ode of !ommerce.
;) 5rt +;,. In order to inc"r the expenses and ca"se the damages
corresponding to gross average, there m"st be a resol"tion of the
captain, adopted after deliberation with the sailing mate and other
officers of the vessel, and after hearing the persons interested in the
cargo who ma0 be present.
If the latter shall ob8ect, and the captain and officers or a ma8orit0 of
them, or the captain, if opposed to the ma8orit0, sho"ld consider certain
meas"res necessar0 the0 ma0 be exec"ted "nder his responsibilit0,
witho"t pre8"dice to the right of the shippers to proceed against the
captain before the competent 8"dge or co"rt, if the0 can prove that he
acted with malice, lac7 of s7ill, or negligence.
If the persons interested in the cargo, being on board the vessel, have
not been heard, the0 shall not contrib"te to the gross average, their
share being chargeable against the captain, "nless the "rgenc0 of the
case sho"ld be s"ch that the time necessar0 for previo"s deliberations
was wanting.
;; 5rt +;*. 9he resol"tion adopted to ca"se the damages which
constit"te general average m"st necessaril0 be entered in the log boo7,
stating the motives and reasons for the dissent, sho"ld there be an0,
and the irresistible and "rgent ca"ses which impelled the captain if he
acted of his own accord.
In the first case the min"tes shall be signed b0 all the persons present
who co"ld do so before ta7ing action, if possible- and if not, at the first
opport"nit0. In the second case, it shall be signed b0 the captain and b0
the officers of the vessel.
In the min"tes, and after the resol"tion, shall be stated in detail all the
goods 8ettisoned, and mention shall be made of the in8"ries ca"sed to
those 7ept on board. 9he captain shall be obliged to deliver one cop0 of
these min"tes to the maritime 8"dicial a"thorit0 of the first port he ma0
ma7e, within twent0#fo"r ho"rs after his arrival, and to ratif0 it
immediatel0 "nder oath.
9he Lawphil 2ro8ect # 5rellano Law :o"ndation