THE ATLANTIC, GULF & PACIFIC COMPANY OF MANILA AND SIMMIE & GKILK, PLAINTIFFS AND APPELLANTS VS. UCHIDA KISEN KAISHA AND MITSUI BUSSAN KAISHA, DEFENDANTS AND APPELLANTS. VICENTE…

This action was commenced by the
plaintiffs in the Court of First Instance of the city of Manila to
recover from the defendants the sum of P300,000 as compensation for the
salvage of the steamship Kyodo Maru and part of her cargo, in
Manila Bay, in the months of October and November, 1918. Judgment was
rendered in favor of the plaintiffs and against the defendants Uchida
Kisen Kaisha and Mitsui Bussan Kaisha in solidum for the sum
of P140,000 and for costs. The action was dismissed as regards the
defendant Vicente Madrigal, the owner of the cargo. From that judgment
the plaintiffs and the defendants Uchida Kisen Kaisha and Mitsui Bussan
Kaisha appealed to this court.

It appears from the record that on the 21st day of October, 1918, while the steamship Kyodo Maru
was discharging a cargo of coal, the property of the defendant Vicente
Madrigal, in the harbor of Manila, inside the breakwater, one of the
lighters alongside said vessel sank. In swinging with the tide, the Kyodo Maru came violently in contact with this submerged lighter, the result being that her hull was perforated.

The said steamer began to sink during the morning of October 22d
and touched the bottom of the harbor at 10 o’clock of the same morning.
She continued to sink deeper into the mud until, on October 23d, the
forward half of the vessel was entirely submerged, while the stern half
was still afloat.

The depth of the water in that part of the harbor where the vessel
was moored at the time of the accident is about 21 feet at low tide.
The depth of the vessel from deck to keel is about 35 feet. The value
of the vessel at the time of the accident was about P1,300,000,
Philippine currency.

On the afternoon of October 23d, the plaintiffs, at the request of
the captain and agents of the ship, took possession of the sinking
vessel as salvors and commenced salvage operation at once. At that time
they had submitted two propositions to the captain and agents of the
ship as to compensation for the salvage services to be performed: one
for P150,000 in case of success and reimbursement of expenses in case
of failure, and another for P300,000 “no cure no pay.” The plaintiffs
were informed that the propositions would be transmitted to the owners
of the vessel in Japan for acceptance or rejection, but they were
requested to continue work in the meantime, upon the understanding that
if no special contract should be made they would be compensated as
salvors.

The vessel was floated on October 30th and the salvage operations
ended the following day. On the afternoon of October 30th the
plaintiffs were informed in writing that the head office of the
steamship company in Japan had, by cable, rejected both of the
above-mentioned propositions, and that it was proposed to settle with
them on the basis of the reasonable value of their services as salvors.
Plaintiffs then made demand for payment of P150,000. Defendants (not
including Madrigal) offered to pay P75,000. Plaintiffs then made a
counter offer of P125,000. This was rejected, and plaintiffs then
brought the present action for the recovery of a salvage award of
P300,000; but, in their trial brief, they reduced this demand to
P’297,443.40.

During the pendency of the negotiations regarding the value of the
salvage services, it was agreed that the vessel should be freed from
any lien which the plaintiffs might have upon her as salvors, in
consideration of the agreement of the defendant Mitsui Bussan Kaisha to
respond in solidum with the owner of the vessel, the defendant Uchida
Kisen Kaisha, for whatever might be found due the salvors upon final
judgment.

There is no dispute with regard to the foregoing facts. The only
dispute in this case is (1) with regard to the amount of compensation
to be awarded to the plaintiffs for the salvage of the ship in
question, and (2) whether or not the defendant-appellee Vicente
Madrigal, as owner of the cargo, is liable for any contribution to such
compensation.

I. While the plaintiffs originally claimed P300,000 as
compensation, which they reduced to P297,443.40 in their trial brief in
the court below, they have further reduced the same to P275,000 in
their brief on appeal to this court; whereas the defendants-appellants
still maintain their original contention that the plaintiffs are not
entitled to more than P75,000. This question of compensation involves
two elements: (a) The actual expenses incurred in the salvage operation, and (b) the reward for services rendered by the plaintiffs as salvors.

A. Attached to the plaintiffs’ complaint is a statement (Exhibit A)
of the expenses alleged to have been incurred by them, aggregating the
sum of P63,074.45. The defendants-appellants, in their brief,
vigorously challenge the reasonableness of these charges, alleging that
they “are palpably, grossly and sinfully exaggerated,” and contend that
if the plaintiffs “are allowed P40,000 to recover their out-of-pocket
expenses and the reasonable value of the use of their equipment, they
would certainly not be the losers.”

Among the items in Exhibit A which are impugned by the defendants-appellants are the following:

(1)	Rental of pump lighter………………………………………………..	P11,520.00
(2)	Rental of derrick No. 2………………………………………………..	9,600.00
(3)	Rental of the launch Columbia……………………………………..	4,800.00
(4)	Ferry service………………………………………………………………..	7,410.00
(5)	Rental of pumps…………………………………………………………..	3,000.00
(6)	Use of hose…………………………………………………………………	10,612.50
(7)	Charges for labor and supervision, consisting of;

(a)	Preliminary labor in connection
	with preparing equipment, ma-
	chine, shop work, and overhaul-
	ing equipment upon its return..	P1,390.00
(b)	Labor at ship………………………………	3,352.00
(c)	Supervision ……………………………….	2,500.00
		___________	7,242.00

We shall not undertake to analyze the evidence relative to each of
the foregoing items with a view to arriving at an accurate estimate of
the total expenses incurred by the plaintiffs. Such a task would be
impossible of accomplishment inasmuch as plaintiffs themselves have
“just figured it out roughly,” and the defendants’ expert witness,
Swann, by whom they endeavored to show that the plaintiffs’ charges
were grossly exaggerated, also admits that his estimates have only been
“figured out roughly.” Suffice it to say that after a perusal of the
luminous briefs of the eminent counsel for both parties, in relation
with the evidence adduced during the trial of the cause, we are
persuaded that most of the charges for expenses made by the plaintiffs
are really exorbitant. Considering all of the facts and circumstances
of this case, and specially the inflated war prices of materials at the
time the salvage in question was performed, we are of the opinion that
the sum of P50,000 would be a very reasonable allowance to the
plaintiffs for their cash outlay and the rental value of their
equipment.

B. With regard to the reward for salvage services,
defendants-appellants maintain that the sum of P35,000 would be a
liberal net award to the salvors.

Section 10 of Act No. 2616 prescribes the rule for determining the reward for salvage as follows:

“In a case coming under the last preceding section, as well as in the absence of an agreement, the
reward for salvage or assistance shall be fixed by the Court of First
Instance of the province where the things salvaged are found, taking
into account principally the expenditures made to recover or save the
vessel or the cargo or both, the zeal demonstrated, the time employed,
the services rendered, the excessive expenses occasioned, the number of
persons who aided, the danger to which they and their vessels were
exposed, as well as that which menaced the things recovered or
salvaged, and the value of such things after deducting the expenses.”

Counsel for defendants-appellants, however, assail the validity of
said Act (No. 2616) “upon the ground that salvage is a matter which
pertains, both as regards the substantive law and procedure, to the
admiralty jurisdiction of the courts, and that, therefore, it is not
within the scope of the law-making authority of the Philippine
Legislature.” In support of that contention counsel call attention to
the fact that section 56 of Act No. 136 provides that the Courts of
First Instance shall have original jurisdiction “in all actions in
admiralty and maritime jurisdiction, irrespective of the value of the
property in controversy or the amount of the demand;” and that both the
Philippine Bill and the Jones Law provide “that the admiralty
jurisdiction of the Supreme Court and Courts of First Instance shall
not be changed except by act of Congress.” Counsel maintain that the
phrase “admiralty and maritime jurisdiction,” used in said Act No. 136,
and the same phrase used in the Organic Law, are identical in meaning
and that both apply not only to the mere power to hear and decide, but
to the maritime law as a body.

In the case of Heath vs. The Steamer San Nicolas
(7 Phil,, 532), this court held that “the phrase ‘admiralty and
maritime jurisdiction’ found in Act No. 136, section 56, paragraph 4, did not put in force in
these Islands the law, practice, and procedure in force in admiralty
courts in the United States.” In the case of G. Urrutia & Co. vs.
Pasig Steamer & Lighter Co. (22 Phil., 330, decided March 22, 1912,
four years prior to the passage of Act No. 2616), this court said:
“There being no express legislation exactly applicable to cases of salvage, nor legal principles thereto relating established by the courts, pursuant
to the second paragraph of article 6 of the Civil Code, we must fall
back upon the customs of the place, and, in the “absence thereof,
general principles of law.”

In the case of the United States vs. Bull (15 Phil., 7),
this court held that “an Act of the legislative authority of the
Philippine Government which has not been expressly disapproved by
Congress is valid unless its subject-matter has been covered by
Congressional legislation, or its enactment forbidden by some provision
of the organic law.” It is not even suggested that the Act in question
(No. 2616) has been expressly disapproved by Congress, and our
attention has not been called to any Act of Congress, applicable to the
Philippine Islands, relating to the subject-matter of said Act
No.-2616, nor are we aware of the existence of any such Act. The only
question, then, is whether the provision in our organic law (the
Philippine Bill and the Jones Law) “that the admiralty jurisdiction of
the Supreme Court and Courts of First Instance shall not be changed
except by act of Congress,” should be construed as forbidding the
Philippine Legislature from enacting such a law as Act No. 2616,
relating to salvage—a matter pertaining to admiralty. The answer to
that question depends upon whether or not Act No. 2616 did in any way
change the admiralty jurisdiction of the Supreme Court and the Courts
of First Instance, as provided by Act No. 136.

Even granting, without deciding, the contention of
defendants-appellants that the phrase “admiralty jurisdiction” used in
our organic law applies not only to the power to hear and decide but to
the maritime law as a body, still we are unable to say that Act No.
2616 has effected any change in the admiralty jurisdiction of this
court and the Courts of First Instance. Counsel cite the cases of The Jelling (253 Fed. Rep., 381), The Felix (62 Fed. Rep., 620), and The L. W. Perry (71
Fed. Rep., 745), in an effort to show that the rules prescribed by
section 11 of Act No. 2616 are different from the American maritime
law. Again granting that they are different, yet, as decided by this
court in the San Nicolas case, supra, the phrase “admiralty and maritime jurisdiction” found in Act No. 136 did not put in force in these Islands the law,
practice, and procedure in force in the admiralty courts in the United
States. The American maritime law not being necessarily in force in
these Islands, it is clear that Act No. 2616 of the Philippine
Legislature could not and did not affect the same.

Therefore, following our decision in the Bull case, supra, we are of the opinion and so decide that Act No. 2616 is valid until expressly disapproved by Congress.

Applying now the rules prescribed by section 10 of said Act No.
2616, above quoted, in determining the reward for the salvage in
question, the following facts should be taken into account: (1) That
the salvage operations in question were performed in Manila Bay, inside
the breakwater, where the depth of the water was only about 21 feet at
low tide; (2) that those operations lasted eight days—from noon of
October 23d to October 31st—although the salvors appear to have
rendered services until the 8th of November; (3) that the vessel salved
and its cargo were never in danger of total loss, although it is
admitted that if the vessel had sunk and listed, the expenses of
recovering the same would have been considerable; (4) that the salvage
operation was comparatively simple, consisting merely of using pumps to
prevent the vessel from sinking any further, while the salvors were
building a cofferdam around the submerged forehatch preparatory to
pumping her out; (5) that there was no danger to the lives and property
of the salvors in view of the proximity to the shore of the place where
the work was performed; (6) that the value of the equipment used,
including the launches employed to maintain the ferry service, was
about P300,000; (7) that the plaintiffs’ outlay, together with the
reasonable rental value of their equipment, was, as we have heretofore
estimated, the sum of P50,000; (8) that the Kyodo Maru was,
at the time she was salved, valued at P1,300,000; (9) that the captain
of said vessel was in a hurry to get her out because he had to meet a
new charter in Japan; and (10) that the plaintiffs accomplished the
salvage with energy and promptitude, to the entire satisfaction of the
captain and agents of the vessel.

Considering all of the foregoing facts in relation with the award
heretofore made by this court in the salvage cases of Erlanger &
Galinger vs. Swedish East Asiatic Co., Ltd. (34 Phil., 178), Manila Railroad Co. vs. Macondray & Co. (37 Phil., 850), and G. Urrutia & Co. vs.
Pasig Steamer & Lighter Co. (22 Phil., 330), we are persuaded that
the sum of P50,000 would be an equitably liberal net compensation to
the plaintiffs as salvors of the Kyodo Maru. This, together
with the sum of P50,000 which we have found should be allowed them for
their expenses and the reasonable rental value of their equipment,
makes a total award to the plaintiffs of the sum of P100,000. We are
persuaded that this amount is a sufficient compensation for the outlay
and effort of the salvors in the present case, and that the same is
liberal enough to constitute an inducement to others to render like
services in similar emergencies in the future.

II. The next question for determination is the liability, if any,
of the defendant Vicente Madrigal as owner of the cargo, to contribute
to the salvage award above-mentioned.

At the time the
plaintiffs commenced their work as salvors there were 2,005 tons of
coal on the vessel, the property of the said defendant. In order to
raise the vessel it was necessary for the salvors to take part of said
coal from her. The coal so taken and brought ashore by the plaintiffs
amounted to 573 tons. The value of that coal in Manila at that time was
P45 a ton.

The lower court absolved this defendant from liability upon the ground (a) that “it does not appear that the cargo was in serious danger of injury or loss,” and (b)
that although the plaintiffs may perhaps be entitled to compensation
for the unloading and landing of the 573 tons, the record contains no
data from which the amount of such compensation can be determined.
Defendants-appellants take exception to that conclusion of the lower
court and contend that the salvage award should be apportioned between
them, as owners of the vessel, and defendant-appellee, as owner of the
cargo; that the value of the whole amount of coal on board the vessel
at the time of the salvage was P92,525, which is approximately 6 1/2
per cent of the value of the vessel; and that that proportion should be
awarded against the defendant-appellee. Defendant-appellee, on the
other hand, contends that: “All the service rendered to the cargo, the
property of this defendant, if any was in fact so rendered, was not
rendered with an intent to benefit the cargo, but to assist the salvors
in their principal work, the raising of the ship. They would not have
removed a ton of this coal had its removal not facilitated the salving
of the ship and such removal did not operate in any way to benefit the
cargo, nor save it from any risk or damage. The only benefit may be one
to the owner of the coal in an amount equivalent to the stevedoring
charges he would have had to pay to remove from the ship the 573 tons
taken from her by these plaintiffs. As there is no evidence as to the
value of this, and as this defendant has offered to pay and is still
willing to pay the plaintiff that amount, it need not be further
discussed here.”

While we agree with the defendant-appellee that, as the record
shows, the removal of the 573 tons of coal from the vessel was merely
incidental to, and necessitated by, the raising of said vessel, we
cannot agree with him that “such removal did not operate in any way to
benefit the cargo, nor save it from any risk or damage.” Had the vessel
completely, sunk and listed, extreme difficulty would no doubt have
been encountered in removing the coal in question from her hold, thus
occasioning considerable expense and loss to this defendant. It is also
undeniable that part of the plaintiffs’ expenses which we have allowed
against defendants-appellants were incurred in carrying such coal to
the shore. It is but just, then, that defendant-appellee should share a
proportionate amount of the award.

Considering, however, that the removal of said coal from the
sinking vessel was merely incidental to salving her; and considering
that only 573 tons of such cargo were actually taken by the plaintiffs
from the ship, it being no longer necessary to touch the rest for the
purpose of raising her, we are of the opinion that full justice would
be done to all the parties concerned by taking the value of the said
573 tons of coal in relation with the value of the ship, and thus
apportion the salvage award between their respective owners. The said
573 tons of coal, at P45 a ton, are worth P25,785, which is
approximately 2 per cent of the value of the ship (which is estimated
at P1,300,000). Hence the defendant-appellee should be made to pay 2
per cent of the award of P100,000, or the sum of P2,000.

Wherefore, the judgment appealed from is hereby modified, and it is
hereby ordered and decreed that the plaintiffs have and recover the sum
of P98,000, Philippine currency, from the defendants Uchida Kisen
Kaisha and Mitsui Bussan Kaisha, jointly and severally, and the sum of
P2,000, Philippine currency, from the defendant Vicente Madrigal,
without any finding as to costs in this instance. So ordered.

Araullo, Street, Avancena., and Villamor, JJ., concur.