Sunday, June 9, 2019

[CASE DIGEST] A. MAGSAYSAY INC. v. ANASTACIO AGAN (G.R. No. L-6393)


January 31, 1955 

Ponente: Reyes, A. J. 
FACTS:

·         On October 6, 1949, the S S "San Antonio," a vessel owned and operated by A. Magsaysay Inc., left Manila en route to Basco, Batanes, via Aparri, Cagayan. The vessel contained general cargo belonging to different shippers, among them Anastacio Agan. 

·         The vessel reached Aparri on October 10, 1949. The next day, it weighed its anchor to proceed to Basco, Batanes. But while still in port, the vessel ran aground at the mouth of the Cagayan River.

·         Attempts to refloat the vessel under its own power failed, prompting Magsaysay, Inc. to have it refloated by the Luzon Stevedoring Co. at an agreed cost.

·         Once afloat, the vessel returned to Manila to refuel and then proceeded to Basco, the port of destination. In Basco, the cargoes were delivered to their respective owners or consignees, who, with the exception of Agan, made a deposit or signed a bond to answer for their contribution to the general average.

·         Because of Agan's refusal to pay his share in the costs spent to refloat the vessel, Magsaysay, Inc. filed an action for collection before the CFI of Manila. According to the average adjuster, Agan was supposed to pay P841.40. 

·         Agan's defense: He was justified in refusing to pay the amount being collected from him because the stranding of the vessel in Aparri was due to the fault, negligence and lack of skill of its master. Agan likewise argued that the expenses incurred in putting the vessel afloat did not constitute general average, and that the liquidation of the average was not made in accordance with law. 

·         CFI ruled in favor of Magsaysay, Inc. Hence, the instant appeal.

RULING:  

Petition granted. CFI ruling reversed. 




Whether the expenses incurred in floating the vessel constitute general average to which both ship and cargo should contribute. – NO. 

·         In order that the expenses incurred by Magsaysay, Inc. in refloating its vessel come within the legal concept of the general average, the following requisites (as listed by Tolentino in his commentaries on the Code of Commerce) must concur:

o   First, there must be a common danger. This means, that both the ship and the cargo, after it 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.

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

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


o   Fourth, that the expenses or damages should have been incurred or inflicted after taking proper legal steps and authority.

·         In the present case, none of the requisites listed above was met.

First requisite - not met

·         The evidence does not show that the expenses sought to be recovered from Agan were incurred to save the vessel and cargo from a common danger. The vessel ran aground in fine weather inside the port at the mouth of a river, a place described as "very shallow". It would thus appear that vessel and cargo were at the time in no imminent danger or a danger which might "rationally be sought to be certain and imminent."

·         It is true that if the vessel were left indefinitely at the mercy of the elements, it would run the risk of being destroyed. But as stated in the first requisite, "this last requirement excludes measures undertaken against a distant peril." It is the deliverance from an immediate, impending peril, by a common sacrifice, that constitutes the essence of general average.

·         In the present case, there is no proof that the vessel had to be put afloat to save it from imminent danger. What appears from the testimony of Magsaysay, Inc.'s manager is that the vessel had to be salvaged in order to enable it "to proceed to its port of destination." It must be noted, however, that it is the safety of the property, and not of the voyage, which constitutes the true foundation of the general average.

Second requisite - not met

·         The expenses in question were not incurred for the common safety of the vessel and its cargo, since neither of them was not in imminent peril. The cargo could, without need of expensive salvage operation, have been unloaded by the owners/shippers if they had been required to do so.

Third requisite - not met

·         It is to be conceded that the salvage operation was a success.  But as the sacrifice was for the benefit of the vessel — to enable it to proceed to destination — and not for the purpose of saving the cargo, the cargo owners are not in law bound to contribute to the expenses.

Fourth requisite - not proved

·         This final requisite has not been proved, for it does not appear that the expenses in question were incurred after following the procedure laid down in Article 813.

·         Given the foregoing, Agan cannot be compelled to contribute to the costs incurred by Magsaysay, Inc. in refloating its vessel.

·         While the expenses incurred in putting Magsaysay, Inc.'s vessel afloat may well come under number 2 of Article 809 — which refers to expenses suffered by the vessel "by reason of an accident of the sea of the force majeure" — and should therefore be classified as particular average, the said expenses do not fit into any of the specific cases of general average enumerated in Article 811. 

·         No. 6 of Article 811 does mention "expenses caused in order to float a vessel," but it specifically refers to "a vessel intentionally stranded for the purpose of saving it" and would have no application where, as in the present case, the stranding was not intentional. 

·         In fact, the stranding of the subject vessel in Aparri was due to the sudden shifting of the sandbars at the mouth of the river which the port pilot did not anticipate. The standing may, therefore, be regarded as accidental.

Nature and kinds of averages

·         The law on averages is contained in the Code of Commerce. 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 which gave rise to same; while 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.

·         In classifying averages into simple o particular and general or gross and defining each class, the Code (Art. 809 and 811) at the same time enumerates certain specific cases as coming specially under one or the other denomination.