FAR EASTERN SHIPPING COMPANY vs.

COURT OF APPEALS and PHILIPPINE PORTS AUTHORITY

FACTS:
M/V PAVLODAR, owned and operated by the Far Eastern Shipping Company (FESC), arrived at the Port of Manila
and was assigned Berth 4 of the Manila International Port, as its berthing space. Gavino, who was assigned by the
Appellant Manila Pilots’ Association to conduct the docking maneuvers for the safe berthing, boarded the vessel at
the quarantine anchorage and stationed himself in the bridge, with the master of the vessel, Victor Kavankov, beside
him. After a briefing of Gavino by Kavankov of the particulars of the vessel and its cargo, the vessel lifted anchor
from the quarantine anchorage and proceeded to the Manila International Port. The sea was calm and the wind was
ideal for docking maneuvers. When the vessel reached the landmark, one-half mile from the pier, Gavino ordered the
engine stopped. When the vessel was already about 2,000 feet from the pier, Gavino ordered the anchor dropped.
Kavankov relayed the orders to the crew of the vessel on the bow. The left anchor, with two (2) shackles, were
dropped. However, the anchor did not take hold as expected. The speed of the vessel did not slacken. A commotion
ensued between the crew members. After Gavino noticed that the anchor did not take hold, he ordered the engines
half-astern. Abellana, who was then on the pier apron, noticed that the vessel was approaching the pier fast.
Kavankov likewise noticed that the anchor did not take hold. Gavino thereafter gave the “full-astern” code. Before
the right anchor and additional shackles could be dropped, the bow of the vessel rammed into the apron of the pier
causing considerable damage to the pier as well as the vessel.

ISSUES:
(1) Is the pilot of a commercial vessel, under compulsory pilotage, solely liable for the damage caused by the vessel
to the pier, at the port of destination, for his negligence?;
(2) Would the owner of the vessel be liable likewise if the damage is caused by the concurrent negligence of the
master of the vessel and the pilot under a compulsory pilotage?

HELD:
(1) Generally speaking, the pilot supersedes the master for the time being in the command and navigation of the ship,
and his orders must be obeyed in all matters connected with her navigation. He becomes the master pro hac vice and
should give all directions as to speed, course, stopping and reversing anchoring, towing and the like. And when a
licensed pilot is employed in a place where pilotage is compulsory, it is his duty to insist on having effective control
of the vessel or to decline to act as pilot. Under certain systems of foreign law, the pilot does not take entire charge of
the vessel but is deemed merely the adviser of the master, who retains command and control of the navigation even in
localities where pilotage is compulsory. It is quite common for states and localities to provide for compulsory
pilotage, and safety laws have been enacted requiring vessels approaching their ports, with certain exceptions, to
take on board pilots duly licensed under local law. The purpose of these laws is to create a body of seamen
thoroughly acquainted with the harbor, to pilot vessels seeking to enter or depart, and thus protect life and property
from the dangers of navigation. Upon assuming such office as a compulsory pilot, Capt. Gavino is held to the
universally accepted high standards of care and diligence required of a pilot, whereby he assumes to have skill and
knowledge in respect to navigation in the particular waters over which his license extends superior to and more to be
trusted than that of the master. He is not held to the highest possible degree of skill and care but must have and
exercise the ordinary skill and care demanded by the circumstances, and usually shown by an expert in his profession.
Under extraordinary circumstances, a pilot must exercise extraordinary care. In this case, Capt. Gavino failed to
measure up to such strict standard of care and diligence required of pilots in the performance of their duties. As the
pilot, he should have made sure that his directions were promptly and strictly followed.

(2) The negligence on the part of Capt. Gavino is evident; but Capt. Kabancov is no less responsible for the allision.
The master is still in command of the vessel notwithstanding the presence of a pilot. A perusal of Capt. Kabankov’s
testimony makes it apparent that he was remiss in the discharge of his duties as master of the ship, leaving the entire
docking procedure up to the pilot, instead of maintaining watchful vigilance over this risky maneuver. The owners of
a vessel are not personally liable for the negligent acts of a compulsory pilot, but by admiralty law, the fault or
negligence of a compulsory pilot is imputable to the vessel and it may be held liable therefor in rem. Where, however,
by the provisions of the statute the pilot is compulsory only in the sense that his fee must be paid, and is not in
compulsory charge of the vessel, there is no exemption from liability. Even though the pilot is compulsory, if his
negligence was not the sole cause of the injury, but the negligence of the master or crew contributed thereto, the
owners are liable. But the liability of the ship in rem does not release the pilot from the consequences of his own
negligence. The master is not entirely absolved of responsibility with respect to navigation when a compulsory pilot
is in charge. Except insofar as their liability is limited or exempted by statute, the vessel or her owners are liable for
all damages caused by the negligence or other wrongs of the owners or those in charge of the vessel. As a general rule,
the owners or those in possession and control of a vessel and the vessel are liable for all natural and proximate
damages caused to persons or property by reason of her negligent management or navigation.
Philippine Interisland Shipping Association vs. CA: EO1088 was promulgated by the former President Marcos,
heeding the call of the local pilotage to have pilotage rates increased. The Philippine Port’s Association then
promulgates MC4386 fixing the rates lower than those provided under EO1088. The UHPAP then filed a case
seeking the nullity of EO1088, but the PPA opposed on grounds that the EO is no longer effective due to the MC,
hence the case is moot and academic. The case was upheld by the CA, hence this petition by PPA with intervenors.

The court said that the power to fix rates is legislative, hence it cannot be overridden by administrative issuances,
hence it cannot change the contents of the law.

Corona vs. UHPA: UHPA seeks to have the PPA’s AO limiting the term of appointment of harbor pilots to one year
subject to yearly renewal or cancellation, on grounds of violating the rights of harbor pilots to exercise their
profession and their right to due process of law. The court held that the AO is unconstitutional. It restricts the practice
of pilotage as a property right for implementing a pre-evaluation cancellation if a pilot is deemed physically and
mentally unfit. This is a deprivation of due process of law.

NFA vs. CA: NFA employed one of the vessels of Hongfil to carry several cargo. The vessel of Hongfil arrived at the
port of Cagayan de Oro for the loading. However, the loading and and unloading were both delayed due to strikes
commenced by employees of the arrastre and unavailability of the berthing place. After the fulfillment of the
agreement, NFA paid Hongfil 1M for the services. However, Hongfil sent a separate billing for the shutout load,
deadfreight, and demurrage suffered during the loading and unloading. The court said that the letter of agreement
between NFa nad Hongfil was a charter party, under a contract of affreightment, where the the owner of the vessel
leases part or all of its space to haul goods for others. Art 680 states that the charterer (employer of services of vessel)
is liable for deadfreight (goods not loaded). The Letter clearly states that 200,000 bags of corn were to be shipped,
but only 166k bags were loaded, making NFA liable for the 33000 bags. For demurrage, Demurrage is the sum fixed
in a charter party as a renumeration to the owner of the ship for the detention of his vessel beyond the number of days
allowed by the charter party for loading or unloading or for sailing. Liability for demurrage, using the word in its
strict technical sense, exists only when expressly stipulated in the contract. Shipper or charterer is liable for the
payment of demurrage claims when he exceeds the period for loading or unloading as agreed upon or the agreed
“laydays.” The period for such may or may not be stipulated in the contract. Demurrage begins when the vessel is
detained beyond the reasonable amount of time. In the contract, it says Customary Quick Dispatch, implying the
standard of diligence required for the loading and unloading time. However, since the charterer cannot be considered
an insurer of all events, especially causes that cannot be imputed to it, the detention of the vessel was still within the
reasonable amount of time contemplated in demurrage. Also, the statement Demmurage/Dispatch: None is a waiver
of Hongfil’s right to demurrage.

Association of International Shipping Lines vs. PPA:On the validity of Section 5.3 of AO 15-95 and AO 09-2000.
There is no dispute that the PPA has the power to provide pilotage services. The PPA, however, may authorize pilots
associations to provide pilotage services, which is what the PPA precisely did. The PPA contracted out the provision
of pilotage services to various pilots associations. In consideration of the privilege to render pilotage services and to
use port facilities, the different pilots associations are required to remit to the PPA a government share of at least
10% of thepilots’ (members of the associations) gross income derived from purely pilotage service. Before the
introduction of the direct collection system, the different pilots associations used to remit the 10% government share
to the PPA. With the issuance of AO 09-2000, specifically under Section 5.3.1, “[t]he ten (10%) percent government
share from regular pilotage services rendered shall be assessed and directly collected by the PPA from shipping
companies/agents on a per vessel basis.” The shipowners are obliged to withhold this amount from the fees payable
to the pilots for their general services, and remit the withheld amount to the PPA. In other words, the shipowners will
withhold the 10% government share from the fees they have to pay the pilots, which amount will then be collected by
the PPA. Is the PPA empowered to appoint the shipowners as its withholding agent to collect the 10% government
share? The Court holds that the PPA has sufficient authority to constitute the shipowners as withholding agent for the
10% government share. Under its charter, the PPA has the authority to impose, fix, prescribe, increase or decrease
such rates, charges or fees for the use of port facilities, and for services rendered by the PPA or by any private
organization.19 This power necessarily includes the authority to issue rules and regulations on the manner of
collection of the 10% government share. The power to impose or fix rates or charges is definitely much broader than
enforcing a different manner of collection of the 10% government share.

The Court rejects petitioner’s contention that the direct collection system is unreasonable. The direct collection
system has a reasonable relationship to PPA’s objective of ensuring the effective collection and accounting of all
income and revenues accruing out of dues, rates, and charges for the use of facilities and services provided by the
PPA.

There is also no merit in petitioner’s argument that the direct collection system violates the principle of autonomy of
contract.The Court agrees with the PPA that the only difference between the old and new collection system is the
manner of collection. Whether under the old or new system of collecting the 10% government share, the pilots, who
are members of the various pilots associations, are the ones legally liable for the payment of the 10% government
share. The PPA merely appointed the shipowners as its withholding agent for the 10% government share. No new
fees or charges were imposed upon the shipowners. What the shipowners will remit to the PPA is actually a portion
of the fees they used to pay the pilots under the old collection system.

PPA vs. Mendoza: Judge Mendoza issued a preliminary injunction against PPA from integrating all its arrastres into
one organization for purposes of granting permits, allowing respondent Pernito to operate independently as arrastre
and stevedore contractors. The court held that PPA has the power to integrate arrastre and stevedoring services in the
Philippines according to PD857, specifically the power to adopt and implement policies which it deems most
effective in the successful attainment of the law’s objectives, like providing the necessary services on its own, or to
engage the services of contractors. Regarding the prohibition on monopolies, its allowed to regulate thru monopolies
for public interest, given that the port of cebu is a major port and affects the economy of the whole country.

First Plywood Corporation vs. CA: The issue presented is simple enough: Is the service performed by PPA limited
only to “the labor in hooking the net or sling” or is such service, as the administrative orders call it, “greater work
than hooking”? If it be the latter case, then PPA has the authority to charge the higher rates; but if it be otherwise,
then reversal of the decision of respondent court would follow as a matter of course. The court held that the work by
the arrastres involved those greater than hooking (tallying, placing, signaling, hoisting, truck driving, etc.). In this
case, the work required additional actions before hooking can be done.

Municipality of Echague vs. Abellera: The sole issue raised in the petition is whether or not, under Presidential
Decree No. 1, or the Integrated Reorganization Plan, which vests on the Board of Transportation the jurisdiction and
authority to issue Certificate of Public Convenience for the operation of public land, water and air transportation
utilities, there would still be need for an applicant for a ferry boat service operating between two points within a
municipality to obtain a favorable resolution of the Sangguniang Bayan of said municipality before the Board of
Transportation can validly award the corresponding franchise to the applicant, considering the provisions of Sections
2318-2320 of the Revised Administrative Code. The issues presented by Echague is the violation of due process for
a lack of notice to its own ferry service that a CPC was granted to a certain Ballad, and there was a lack of
indorsement from the Council. The court held that due process was violated for mere publication in two unnamed
Manila newspapers of general circulation. As to the 2nd, the requirement for ferry services from two points in one
municipality is necessary, despite PD1. The duties of both the Board and the Municipal COuncils are compatible and
concert with each other. The Municipality has the power to establish a municipal ferry, while the Board issues the
CPC and regulates it.

Calme vs. CA: Calme and four other people were charged with murder of Bernal while on board the interisland
passenger ship “Cebu City” bound from Ozamis to Cebu. The information was filed with the Oroquieta RTC, but the
petitioners moved for quashal for lack of consideration, asserting the incident report received by the captain while
they were in Siquijor. The court held that the incident report doesn’t necessarily mean that the crime took place there.
Nonetheless, the cime took place while in a vessel in transit, meaning Sec. 15, par c of Rule 110 applies:"(w)here an
offense is committed on board a vessel in the course of its voyage, the criminal action may be instituted and tried in
the proper court of the first port of entry or of any municipality or territory through which the vessel passed during
such voyage subject to the generally accepted principles of international law.