Title
Atlantic, Gulf and Pacific Co. of Manila vs. Uchida Kisen Kaisha
Case
G.R. No. 15871
Decision Date
Nov 7, 1921
Salvors recovered a partially sunk steamship and cargo in Manila Bay, 1918. Court awarded P100,000 for services, apportioned between shipowners and cargo owner under Act No. 2616.
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Case Digest (G.R. No. 15871)

Facts:

Incident and Salvage Operation
On October 21, 1918, the steamship Kyodo Maru was discharging cargo in Manila Bay when a submerged lighter caused damage to its hull, leading to the vessel sinking partially by October 22, 1918. The forward half of the ship was submerged by October 23, 1918. The plaintiffs, Atlantic, Gulf & Pacific Company of Manila and Simmie & Gkilk, were engaged as salvors on October 23, 1918, to recover the ship and part of its cargo. The salvage operation ended on October 31, 1918, when the vessel was successfully floated.

Proposals and Negotiations
The plaintiffs initially proposed two compensation options: (1) P150,000 if successful, with reimbursement of expenses in case of failure, and (2) P300,000 under a "no cure no pay" basis. The ship’s agent informed the plaintiffs that the proposals would be forwarded to the owners in Japan for approval. Meanwhile, the plaintiffs continued salvage operations under the understanding that they would be compensated as salvors if no special contract was agreed upon.

On October 30, 1918, the plaintiffs were informed that the ship’s owners rejected both proposals and proposed to settle based on the reasonable value of the services rendered. The plaintiffs demanded P150,000, while the defendants offered P75,000. The plaintiffs reduced their demand to P125,000, which was rejected, leading to the filing of this lawsuit for P300,000, later reduced to P297,443.40 in the trial brief and further reduced to P275,000 on appeal.

Value of the Vessel and Cargo
The Kyodo Maru was valued at P1,300,000 at the time of the accident. The cargo on board included 2,005 tons of coal, owned by defendant Vicente Madrigal, of which 573 tons were removed during the salvage operation. The value of the coal in Manila was P45 per ton.

Issue:

  1. What is the appropriate amount of compensation for the plaintiffs’ salvage services?
  2. Is the defendant Vicente Madrigal, as owner of the cargo, liable to contribute to the salvage award?

Ruling:

The Court modified the lower court’s judgment and awarded the plaintiffs a total of P100,000, consisting of P50,000 for expenses and P50,000 as a reward for salvage services. The award was apportioned as follows:

  • P98,000 to be paid jointly and severally by Uchida Kisen Kaisha and Mitsui Bussan Kaisha (owners of the vessel).
  • P2,000 to be paid by Vicente Madrigal (owner of the cargo).

Ratio:

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