AVERAGES:

An item of expense or damage

o Expense: you have to spend money for
something

Disbursed btwn time of departure

till arrival)
o Damage: ex) jettison

Ex) Jettison: when you throw cargo overboard

o This is an average bec its a damage wc is
suffered by merchandise btwn the pt when
its loaded til its unloaded (from time of
departure till arrival)

Is there a similarity btwn average here & GWA?

Averages: either gross or general OR simple or

particular
o When
the
law
separates
or
distinguishes/1st
defines
&
then
enumerates gen & particular averages
what 1 item/fact strikes us as that wc
separates 1 ave from the other?
o Why is the distinction impt?

Distinction is impt bec of the right

of
contribution
=
right
of
reimbursement
Right of contribution: more
accurate term

RIGHT OF CONTRIBUTION:
o Contribution is made of in favor for the
person who incurred the damage/expense
o Right to contribute, to make whole the
person who has suffered from the average
o This DSNT EXIST in all averages

Only exists in the case of gen ave

Can compel other parties
to
the
venture
to
contribute

In particular ave: theres no right

to contribution, so the person who
incurred
the
damage/expense
suffers his own loss = ea to his
own loss
No right to contribution
What you need to know:

1st: det what the ave is expense or damage

incurred by the vessel or cargo during the voyage
btwn loading & unloading
o Shld be incurred during the voyage
o Incurred by the owner of cargo or owner of
the vessel
o When expense/damages takes place,
there are persons who arent happy bec
they dont want expenses, just want
profits
o Ex) vessel is delayed bec of an arrival
under stress expense!

Bec needs to feed the crew, etc

2nd: det if its gen or particular ave:

o There is NO TOTAL RECOVERY, regardless
of whether it gen or particular ave

Bec
a
percentage
of
the
expense/damage will be charged
also to the person who suffered
the same

Its a contribution to
himself
(bec
every1
contributes)
More impt ave: the gen/gross ave

Bec of the right of contribution

So
businessmen
are
more
concerned w determining if its
gen/gross ave
How will you det if its gen or particular?
(look at the reqs)

Gen/Gross ave:

Reqs:
o The expense/damage was deliberately
incurred

To save the vessel or cargo

o For common safety common to the
owner of the vessel & the owner of the
goods

Rem: Their interests are conflicting

o Success: successful saving of the vessel &
cargo

If jettison the car, but vessel is lost

anyway = X gen ave, its a
shipwreck
o Real & known risk: provides a common
threat/dangers to the vessel & cargo

Law also enumerates other instances of gen ave

(A811)

Anything outside the defn & enumeration is a

simple/particular ave if its an ave in the 1st place

Defn here similar to the defn of PU: its a defn by

example
o It provides you w a gen defn & then
provides examples of what it might
includes
o So
its
an
enumeration
wc
isnt
exclusive/exhaustive

In det WON the ave is gen or particular:

o Falls w/in the enumeration of gen ave

= gen ave!

Everything outside of this is

particular

Ex) if it was a CC, no need to look

at the gen defn of a PU = no need
to look at the Q of WON its a PU
bec for sure youre a PU bec
youre under the enumeration
o If not w/in the enumeration of the
particular ave

= can still be a particular ave IF

NOT a gen ave
Magsaysay v Agan:

SS Antonio ran aground & it was refloated

o Ran aground bec there was a sudden
shifiting of the sandbar wc the Capt ddnt
anticipate, so he made a mistake & it ran
aground

Ave here: cost of the refloating

o Particular ave bec it ddnt comply w the
reqs of a gen ave

There was NO DANGER

o Water was very shallow, fine weather

Wsnt dne for the common safety of the vessel or

cargo
Successful refloating but sacrifice was only for the
vessels benefit so it cld proceed to its destination
& not for the purpose of saving the cargo
Cant fall under #6, A811: bec the stranding wsnt
intentional
o REASON why not a gen ave: The expense
wsnt deliberately incurred
o No conscious undertaking of the expense
or damage

Ex) ship is abt to sink capt &

crew det that the best way to save
is to throw some cargo overboard;
so throws a car overboard
The expenses from refloating ddnt arise from a
deliberate act
o The Capt ddnt intentionally run aground
the vessel to save it

A. Averages
1. Concept
Article 806 of the Code of Commerce
provides that: For the purposes of this
code the following shall be considered
averages:
1.
All
extraordinary
or
accidental expenses which may be
incurred during the voyage in order to
preserve the vessel, the cargo, or both; 2.
Any damages or deteriorations which the
vessel may suffer from the time it puts to
sea from the port of departure until it
casts anchor in the port of destination,
and those suffered by the merchandise
from the time they are loaded in the port
of shipment until they are unloaded in the
port of their consignment.
2. Classes of average and the persons
liable
a. Simple average
Article 809 of the Code of
Commerce provides that: As a
general rule, simple or particular
averages
shall
include
all
the
expenses and damages caused to the
vessel or to her cargo which have not
inured to the common benefit and
profit of all the persons interested in
the vessel and her cargo, and
especially the following:
1. The losses suffered by the cargo
from the time of its embarkation
until it is unloaded, either on
account of inherent defect of the
goods or by reason of an accident
of the sea or force majeure, and
the expenses incurred to avoid
and repair the same;
2. The losses and expenses suffered
by the vessel in its hull, rigging,

arms, and equipment, for the

same causes and reasons, from
the time it puts to sea from the
port of departure until it anchors
and lands in the port of
destination;
3. The losses suffered by the
merchandise loaded on deck,
except in coastwise navigation, if
the marine ordinances allow it;
4. The wages and victuals of the
crew when the vessel is detained
or embargoed by legitimate order
or force majeure, if the charter has
been contracted for a fixed sum
for the voyage;
5. The necessary expenses on arrival
at a port, in order to make repairs
or secure provisions;
6. The lowest value of the goods sold
by the captain in arrivals under
stress
for
the
payment
of
provisions and in order to save the
crew, or to meet any other need of
the vessel, against which the
proper amount shall be charged;
7. The victuals and wages of the
crew while the vessel is in
quarantine;
8. The loss inflicted upon the vessel
or cargo by reason of an impact or
collision with another, if it is
accidental and unavoidable. If the
accident should occur through the
fault or negligence of the captain,
the latter shall be liable for all the
losses caused;
9. Any loss suffered by the cargo
through the fault, negligence, or
barratry of the captain or of the
crew, without prejudice to the
right of the owner to recover the
corresponding indemnity from the
captain, the vessel, and the
freightage.
General Rule: No reimbursement
Principle: Loss will lie where it falls
Reason: There was no common
benefit
Exception: if there is insurance
Exception
to
the
Exception:
Stipulated in the insurance policy
stating no liability on the part of the
insurer regarding particular average.
Article 810 of the Code of
Commerce provides that: The owner
of the goods which gave rise to the
expense or suffered the damage shall
bear
the
simple
or
particular
averages.

Q: Who is liable?
A: Owner of the goods
b. General average
Article 811 of the Code of
Commerce provides that: As a
general
rule,
general or gross
averages
shall
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, and particularly the following:
1. The goods or cash invested in the
redemption of the vessel or of the
cargo captured by enemies,
privateers, or pirates, and the
provisions, wages, and expenses
of the vessel detained during the
time the settlement or redemption
is being made;
2. The goods jettisoned to lighten the
vessel, whether they belong to the
cargo, to the vessel, or to the
crew, and the damage suffered
through said act by the goods
which are kept on board;
3. The cables and masts which are
cut or rendered useless, the
anchors and the chains which are
abandoned, in order to save the
cargo, the vessel, or both;
4. The expenses of removing or
transferring a portion of the cargo
in order to lighten the vessel and
place it in condition to enter a port
or roadstead, and the damage
resulting therefrom to the goods
removed or transferred;
5. The damage suffered by the goods
of the cargo by the opening made
in the vessel in order to drain it
and prevent its sinking;
6. The expenses caused in order to
float
a
vessel
intentionally
stranded for the purpose of saving
it;
7. The damage caused to the vessel
which had to be opened, scuttled
or broken in order to save the
cargo;
8. The expenses for the treatment
and subsistence of the members
of the crew who may have been
wounded or crippled in defending
or saving the vessel;
9. The wages of any member of the
crew held as hostage by enemies,
privateers, or pirates, and the
necessary expenses which he may
incur in his imprisonment, until he

is returned to the vessel or to his

domicile, should he prefer it;
10. The wages and victuals of the
crew of a vessel chartered by the
month, during the time that it is
embargoed or detained by force
majeure or by order of the
government, or in order to repair
the damage caused for the
common benefit;
11. The depreciation resulting in the
value of the goods sold at arrival
under stress in order to repair the
vessel by reason of gross average;
12. The expenses of the liquidation of
the average.
Article 812 of the Code of
Commerce provides that: In order to
satisfy the amount of the gross or
general averages, all the persons
having an interest in the vessel and
cargo therein at the time of the
occurrence of the average shall
contribute.
Article 813 of the Code of
Commerce provides that: In order to
incur the expenses and cause the
damages corresponding to gross
average, there must be a resolution of
the captain, adopted after deliberation
with the sailing mate and other
officers of the vessel, and after
hearing the persons interested in the
cargo who may be present. If the
latter shall object, and the captain and
officers or a majority of them, or the
captain, if opposed to the majority,
should consider certain measures
necessary, they may be executed
under his responsibility, without
prejudice to the right of the shippers
to proceed against the captain before
the competent judge or court, if they
can prove that he acted with malice,
lack of skill, or negligence. If the
persons interested in the cargo, being
on board the vessel, have not been
heard, they shall not contribute to the
gross average, their share being
chargeable against the captain, unless
the urgency of the case should be
such that the time necessary for
previous deliberations was wanting.
Article 816 of the Code of
Commerce states that: In order that
the goods jettisoned may be included
in the gross average and the owners
thereof be entitled to indemnity, it
shall be necessary insofar as the cargo

is concerned that their existence on

board be proven by means of the bill
of lading; and with regard to those
belonging to the vessel, by means of
the inventory prepared before the
departure in accordance with the first
paragraph of Article 812.
Article 817 of the Code of
Commerce states that: if in lightning
a vessel on account of a storm, in
order to facilitate its entry into a port
or roadstead, part of the cargo should
be transferred to lighters or barges
and be lost, the owner of said part
shall be entitled to indemnity, as if the
loss had originated from a gross
average, the amount thereof being
distributed between the vessel and
cargo from which it came. If, on the
contrary, the merchandise transferred
should be saved and the vessel should
be lost, no liability may be demanded
of the salvage.
Article 818 of the Code of
Commerce states that: If, as a
necessary measure to extinguish a fire
in port, roadstead, creek, or bay, it
should be decided to sink any vessel,
this loss shall be considered gross
average, to which the vessels saved
shall contribute.
Article 732 of the Code of
Commerce provides that: Lenders
on bottomry or respondentia shall
suffer, in proportion to their respective
interest, the general average which
may take place in the goods on which
the loan is made. In particular
averages, in the absence of an
express agreement between the
contracting parties, the lender on
bottomry or respondentia shall also
contribute in proportion to his
respective interest, should it not
belong to the kind of risks excepted in
the foregoing article.
Article 859 of the Code of
Commerce
provides
that:
The
insurers of the vessel of the
freightage, and of the cargo shall be
obliged to pay for the indemnification
of the gross average, insofar as is
required of each one of these objects
respectively.
Article 860 of the Code of
Commerce
provides
that:
If,
notwithstanding
the
jettison
of
merchandise, breakage of masts,
ropes, and equipment, the vessel

should be lost running the same risk,

no contribution whatsoever by reason
of gross average shall be proper. The
owners of the goods saved shall not
be liable for the indemnification of
those jettisoned, lost, or damaged.
Article 861 of the Code of
Commerce provides that: If, after
the vessel has been saved from the
risk which gave rise to the jettison, it
should be lost through another
accident taking place during the
voyage, the goods saved and existing
from the first risk shall continue liable
to contribution by reason of the gross
average according to their value in the
condition in which they may be found,
deducting the expenses incurred in
saving them.
Remedy: Reimbursement
General Rule: The sacrifice made
must be in the course of the voyage.
Exceptions: General average exists
even if there is no voyage yet: 1.
Article 817 of the Code of Commerce
which covers fire in the port; and 2.
Article 818 of the Code of Commerce
which covers transfer of cargo to
another vessel for the necessity to
enter another port.
Requisites:
1. Exposure to common danger to
ship and the cargo after it has
been loaded whether during
voyage or port of loading and
unloading;
2. That for the common safety part
of the vessel or the cargo or both
is sacrificed deliberately;
3. That from the expenses or
damages caused follows the
successful saving of the vessel
and cargo;
4.

That the expenses or damages

should have been incurred or
inflicted after taking legal steps
and authority
Formalities:
1. There must be a resolution of the
captain,
adopted
after
a
deliberation with the other officers
of the vessel and after hearing all
persons interested in the cargoes.
If the latter disagree, the decision
of the captain should prevail but
they shall register their objections.
2. The resolution must be entered in
the logbook, stating the reasons

and motives for the dissent, and

the irresistible and urgent causes
if he acted in his own accord. It
must be signed, in the first case,
by all persons present in the
hearing. In the second case, by
the captain and all the officers of
the vessel. The minutes must also
contain a detail of all the goods
jettisoned and those injuries
caused to those on board.

5.

average, the person benefited by

the damage or expense incurred
must contribute his proportionate
share, to be determined by the
amount of damages or expenses
incurred and apportioned among
the those benefited in proportion
to the value of their property save.
In particular average, it is
implied that there is only one
interest involved and the
proportion pertains to him 100%.

3. Liquidation of Average
4. Whether general or particular