THE MANILA RAILROAD CO., PLAINTIFF AND APPELLANT, VS. MACONDRAY & CO., DEFENDANT AND APPELLANT.

This action was instituted by the plaintiff, the Manila Railroad Company,
upon February 24,1916, in the Court of First Instance of the city of Manila to
recover of the defendant, Macondray & Co., the sum of P75,000, the alleged
value of salvage service rendered on April 6,1915, by the steamer
Hondagua, owned by the plaintiff, to the steamer Seward, which
was owned by the defendant. At the hearing judgment was rendered in favor of the
plaintiff for the sum of P4,000. From this judgment both parties have appealed,
the plaintiff insisting that the amount allowed by the lower court is
inadequate, the defendant that it is excessive.

The facts as found by the judge of the trial court are substantially these:
On the date mentioned the Seward left Saigon for the Philippine
Islands, encountering a moderately high sea. The ship was laden with a cargo of
rice, the weight of which, taken in connection with the condition of the sea,
caused the vessel to spring a leak, and her master felt compelled to return to
Saigon. At this juncture the steamship Hondagua was sighted, whereupon
the Seward flew the international code signal “In distress; want
immediate assistance.” The Hondagua changed her course and approached
the Seward the latter in succession displaying the following signals:
“I have sprung a leak;” “I wish to be taken in tow;” “Can you spare hawser;” and
“The leak is gaining rapidly.” In response to signals from the Hondagua
the Seward sent her own boat to the Hondagua for a heaving
line, by means of which a hawser was passed from the Hondagua to the
Seward and the former, with the latter in tow, then proceeded at half
speed towards Saigon. Shortly afterwards, the Seward signalled “The
leak is gaining rapidly,” after which the Hondagua went full speed
ahead, until the arrival of both vessels at Cape St. James, at the mouth of the
Saigon River, where they anchored. The towing occupied some four or five hours,
and covered a distance of twenty five or thirty miles. The Seward’s
engines were kept working until within an hour of her arrival at Cape St. James,
when the water reached the engine room and put out the fires under the main
boiler, leaving only the auxiliary boiler in use.

The court further found that the value of the Seward upon her
arrival at Cape St. James did not exceed P20,000 and that the value of the cargo
was approximately P54,000. The defendant company had no interest in the cargo,
other than that of carrier, and the cargo was owned by shippers whose names do
not appear of record.

There is of course no question as to the liability of the defendant, as owner
of the Seward, for the service rendered by the plaintiff in towing that
ship to safety. Nor is there any dispute over the fact that the service rendered
was a salvage service and remunerable as such. The tow questions properly
presented for decisions are these: (1) Is the plaintiff entitled to recover from
the owner of the Seward, in this action, remuneration for saving the
cargo as well as for saving the ship? (2) What is the reasonable compensation
which should be allowed in this action?

Where a ship and its cargo are saved together, as a result of services
carried on with a view to saving both, the salvage allowance should be
apportioned between the ship and cargo in the proportion of their respective
values, the same as in a case of general average; and neither is liable for the
salvage due from the other. (35 Cyc, 770; see also 24 Am. & Eng.
Encyc. Law, 2d ed., p. 1219, The Alaska, 23 Fed., 597, The Colonel
Adams, 19 Fed., 795.)

“The salvor must always bear in mind that * * * the interests in ship and in
cargo are only severally liable. each for its proportionate share of the salvage
remuneration. If one who has salved both ship and cargo brings before the court
in his salvage action only the ship, or only the cargo, he will get judgment
only for such an amount of reward as the court finds to be due in respect of the
value of that property which is before the court.” (Kennedy on Law of Civil
Salvage, p. 186.)

In the case of The Mary Pleasants (Swab., 224), where salvage
services had been rendered to the vessel herself and to the cargo aboard of her,
the salvors proceeded against the ship alone. In the course of his judgment the
learned Dr. Lushington said: “But the real difficulty is, that there is no
proceeding against the cargo * * *. The difficulty, I say, arises from this
circumstance, because when the court considers the services rendered to the ship
and cargo, it always estimates the amount of salvage remuneration according to
the value of the ship and cargo taken together. It is contrary to all principles
of justice, if a cargo has received and been benefited by the services so
rendered, that the whole burden of the salvage remuneration should fall on the
ship itself.”

Not only is the salvage charge a separate and divisible burden as between
ship and cargo, but also as between portions of the cargo belonging to different
owners. Thus, in an appeal by the claimants of the cargo, it was said by the
Supreme Court of the United States:

“It is true that the salvage service was in one sense entire; but it
certainly cannot be deemed entire for the purpose of founding a right against
all the claimants jointly, so as to make them all jointly responsible for the
whole salvage; on the contrary, each claimant is responsible only for the
salvage properly due and chargeable on the gross proceeds or sales of his own
property pro rata. It would otherwise follow that the property of one
claimant might be made chargeable with the payment of the whole salvage, which
would be against the clearest principles of law on this subject.” (Straton
vs. Jarvis, 8 Pet. [U. S.], 4; see also Shields vs.
Thomas, 58 U.S., 3; Spear vs. Place, 11 How., 521.)

These authorities show that there is no common liability for the amounts due
from the ship or other portions of the cargo when the ship and cargo, or either,
are brought into the custody of the court as a result of a proceeding in
rem. The rule of liability must be the same where a personal action is
instituted against the owners of the one or the other. The personal liability of
each must be limited to the proportion of the salvage charge which should be
borne by his own property.

If it had been alleged and proved that the ship was unseaworthy when she put
to sea or that the necessity for the salvage service was due to the negligence
of the master, or of the ship’s owner, the latter might have been liable, at
least between himself and the shipper, for the entire cost of the service, and
this possibly might have changed the character of the ship’s liability to the
salvor; or, again, if the claim for compensation had been limited to the value
of the service, considered on the simple basis of work and labor done, it would
have been proper, we think, to assess the entire cost of the service against the
shipowner, because the service was rendered at the request of the master. But
when the claim Is put upon the basis of salvage, the fixing of the compensation
goes beyond the limits of a quantum meruit for the work and labor done
and involves the assessment of a bounty. The amount to be allowed upon a claim
of this character is in part determined upon considerations of equity and public
policy; and it is not proper, in our opinion, to make the ship, or the ship’s
owner, liable for the whole, in the absence of some statutory provision, or
other positive rule of law, fixing such liability on the shipowner. It results
that, as the owner of the cargo has not been made a party, no recovery can be
had in this action in regard to the service rendered to the cargo.

In fixing the amount of compensation to be awarded for salvage service, it
has been declared by the Supreme Court of the United States that the principal
circumstances to be taken into consideration are: (1) The labor expended by the
salvors in rendering the salvage service; (2) The promptitude, skill, and energy
displayed in rendering the service and saving the property; (3) The value of the
property employed by the salvors in rendering the service, and the danger to
which such property was exposed; (4) The risk incurred by the salvors in
rescuing the property from the impending peril; (5) The value of the property
salved; and (6) The degree of danger from which the property was rescued.
(The Blackwall, 10 Wall., 1; 19 L. ed., 870.)

In applying these criteria to the case now before us, the following
circumstances, not already noted, are pertinent, namely: the Hondagua
was delayed in her voyage about nine hours, during five of which she was engaged
in towing the Seward. This delay caused her to enter at Iloilo, the
port of her destination, in the early hours of the morning of the day of her
arrival instead of the late afternoon of the previous day; but the unloading of
her cargo was not thereby retarded. Considered on the basis of charter-party
contract under which she was operating, the Hondagua was earning about
P300 per day, which was considered reasonable compensation for her use,
including the services of officers and crew. The service rendered did not
involve any further expenditure of labor on the part of the salvors than such as
was commonly incident to working the ship. No unusual display of skill and
energy on their part was required; and the condition of the sea was not such as
to involve any special risk either to the Hondagua or her crew.
Finally, the danger from which the Seward was rescued was real, as the
ship when taken in tow was confronted by a serious peril. The value of the
vessel when saved was, we think, properly fixed by the trial court at
P20,000.

In determining the amount of the award to be allowed in cases of this kind
the aim should be to hold out to seafaring men a fair inducement to the
performance of salvage services without fixing a scale of compensation so high
as to cause vessels in need of such services to hesitate and decline to receive
them because of the ruinous cost. That the salvor is entitled, as of bounty, to
something more than mere remuneration for his own work and the risk incurred by
him, is conceded; but certainly the interests of commerce would not be promoted
by the encouragement of exorbitant charges. Towage is not considered a salvage
service of high order of merit; and when the risk is inconsiderable and other
conditions favorable, the compensation to be allowed should be modest in its
amount. Under all the circumstances we think that the sum of P1,000 is adequate
for the service rendered in this case. The judgment of the lower court must
accordingly be reduced to the sum of one thousand pesos (P1,000), with interest
at 6 per cent per annum from February 24, 1916, and for this amount execution
will issue. No special finding will be made as to costs of this instance.

With the modification above indicated the judgment is affirmed. So
ordered.

Arellano, C. J., Torres, Carson, Araullo, Malcolm, and Avanceña,
JJ., concur.

Johnson, and Fisher, JJ., did not take part.