VELOSO VS CA
ruling was affirmed in toto by the CA. Hence, this
FACTS:
Petitioner Francisco Veloso was the owner of a
parcel of land situated in the district of Tondo,
Manila. The title was registered in the name of
Francisco A. Veloso. The said title was subsequently
canceled and a new one was issued in the name of
Aglaloma B. Escario.
On August 24, 1988, petitioner Veloso filed an
action for annulment of documents, reconveyance
of property with damages and preliminary
injunction and/or restraining order. Petitioner
alleged therein that he was the absolute owner of
the subject property and he never authorized
anybody, not even his wife, to sell it. He alleged that
he was in possession of the title but when his wife,
Irma, left for abroad, he found out that his copy was
missing. He then verified with the Registry of Deeds
of Manila and there he discovered that his title was
already canceled in favor of defendant Aglaloma
Escario. The transfer of property was supported by
a General Power of Attorney executed by Irma
Veloso, wife of the petitioner and appearing as his
attorney-in-fact, and defendant Aglaloma Escario.
Petitioner Veloso, however, denied having executed
the power of attorney and alleged that his signature
was falsified. He also denied having seen or even
known Rosemarie Reyes and Imelda Santos, the
supposed witnesses in the execution of the power of
attorney. He vehemently denied having met or
transacted with the defendant. Thus, he contended
that the sale of the property, and the subsequent
transfer thereof, were null and void. Petitioner
Veloso, therefore, prayed that a temporary
restraining order be issued to prevent the transfer
of the subject property; that the General Power of
Attorney, the Deed of Absolute Sale and the Transfer
Certificate of Title No. 180685 be annulled; and the
subject property be reconveyed to him.
Defendant Aglaloma Escario in her answer
alleged that she was a buyer in good faith and
denied any knowledge of the alleged
irregularity. She allegedly relied on the general
power of attorney of Irma Veloso which was
sufficient in form and substance and was duly
notarized. She contended that plaintiff (herein
petitioner), had no cause of action against her. In
seeking for the declaration of nullity of the
documents, the real party in interest was Irma
Veloso, the wife of the plaintiff. She should have
been impleaded in the case. In fact, Plaintiffs cause
of action should have been against his wife,
Irma. Consequently, defendant Escario prayed for
the dismissal of the complaint and the payment to
her of damages.[8]
The RTC ruled in favor of Escarion and such
petition for review.
ISSUES:
1. Whether or not the power of attorney was
valid and regular on its face.
2. Whether or not there is forgery.
3. Whether or not there is equitable estoppel.
4. Whether or not the respondent is an
innocent purchaser for value
Ruling:
1. YES! An examination of the records showed
that the assailed power of attorney was valid
and regular on its face. It was notarized and
as such, it carries the evidentiary weight
conferred upon it with respect to its due
execution. While it is true that it was
denominated as a general power of attorney,
a perusal thereof revealed that it stated an
authority to sell, to wit:
To buy or sell, hire or lease, mortgage or otherwise
hypothecate lands, tenements and hereditaments or
other forms of real property, more specifically TCT No.
49138, upon such terms and conditions and under
such covenants as my said attorney shall deem fit
and proper.
Thus, there was no need to execute a separate
and special power of attorney since the general
power of attorney had expressly authorized the
agent or attorney in fact the power to sell the subject
property. The special power of attorney can be
included in the general power when it is specified
therein the act or transaction for which the special
power is required.
The general power of attorney was accepted by
the Register of Deeds when the title to the subject
property was canceled and transferred in the name
of private respondent. In LRC Consulta No. 123,
Register of Deeds of Albay, Nov. 10, 1956, it stated
that:
Whether the instrument be denominated as general
power of attorney or special power of attorney, what
matters is the extent of the power or powers
contemplated upon the agent or attorney in fact. If the
power is couched in general terms, then such power
cannot go beyond acts of administration. However,
where the power to sell is specific, it not being merely
implied, much less couched in general terms, there
can not be any doubt that the attorney in fact may
execute a valid sale. xxx
 2. NO! We found, however, that the basis
presented by the petitioner was inadequate
to sustain his allegation of forgery. Mere
variance of the signatures cannot be
considered as conclusive proof that the same
were forged. Forgery cannot be
presumed.[17] Petitioner, however, failed to
prove his allegation and simply relied on the
apparent difference of the signatures. His
denial had not established that the signature
on the power of attorney was not his.
3. YES! We agree with the conclusion of the
lower court that private respondent was an
innocent purchaser for value. Respondent
Aglaloma relied on the power of attorney
presented by petitioners wife, Irma. Being
the wife of the owner and having with her the
title of the property, there was no reason for
the private respondent not to believe in her
authority. Moreover, the power of attorney
was notarized and as such, carried with it
the presumption of its due execution. Thus,
having had no inkling on any irregularity
and having no participation thereof, private
respondent was a buyer in good faith. It has
been consistently held that a purchaser in
good faith is one who buys property of
another, without notice that some other
person has a right to, or interest in such
property and pays a full and fair price for the
same, at the time of such purchase, or before
he has notice of the claim or interest of some
other person in the property.[18]
Documents acknowledged before a notary
public have the evidentiary weight with respect to
their due execution. The questioned power of
attorney and deed of sale, were notarized and
therefore, presumed to be valid and duly
executed. Even granting for the sake of argument,
that the petitioners signature was falsified and
consequently, the power of attorney and the deed of
sale were null and void, such fact would not revoke
the title subsequently issued in favor of private
respondent Aglaloma.In the case of Tenio-
Obsequio vs. Court of Appeals,[20] it was held, viz.:
The right of an innocent purchaser for value must
be respected and protected, even if the seller
obtained his title through fraud.
4. YES! Finally, the trial court did not err in
applying equitable estoppel in this case. The
principle of equitable estoppel states that
where one or two innocent persons must
suffer a loss, he who by his conduct made
the loss possible must bear it. From the
evidence adduced, it should be the petitioner
who should bear the loss. As the court a
quo found:
Besides, the records of this case disclosed that the
plaintiff is not entirely free from blame. He admitted
that he is the sole person who has access to TCT No.
49138 and other documents appertaining thereto
(TSN, May 23, 1989, pp. 7-12). However, the fact
remains that the Certificate of Title, as well as other
documents necessary for the transfer of title were in
the possession of plaintiffs wife, Irma L. Veloso,
consequently leaving no doubt or any suspicion on
the part of the defendant as to her authority.
Spouses Salvador vs Spouses Rabaja
FACTS: Sometime in July 1998, Spouses Rabaja
learned that Spouses Salvador were looking for a
buyer of the subject property. Petitioner Herminia
Salvador (Herminia) personally introduced Gonzales
to them as the administrator of the said property.
Spouses Salvador even handed to Gonzales the
owner's duplicate certificate of title over the subject
property. On July, 3, 1998, Spouses Rabaja made
an initial payment of P48,000.00 to Gonzales in the
presence of Herminia. Gonzales then presented the
Special Power of Attorney[3] (SPA), executed by
Rolando Salvador (Rolando). On the same day, the
parties executed the Contract to Sell[4] which
stipulated that for a consideration of
P5,000,000.00, Spouses Salvador sold, transferred
and conveyed in favor of Spouses Rabaja the subject
property. Spouses Rabaja made several payments
totalling P950,000.00, which were received by
Gonzales pursuant to the SPA provided earlier as
evidenced by the check vouchers signed by
Gonzales and the improvised receipts signed by
Herminia.
Sometime in June 1999, however, Spouses Salvador
complained to Spouses Rabaja that they did not
receive any payment from Gonzales. This prompted
Spouses Rabaja to suspend further payment of the
purchase price; and as a consequence, they received
a notice to vacate the subject property from Spouses
Salvador for non-payment of rentals.
Thereafter, Spouses Salvador instituted an action
for ejectment against Spouses Rabaja. In turn,
Spouses Rabaja filed an action for rescission of
contract against Spouses Salvador and Gonzales,
the subject matter of the present petition.
The MeTC ruled in favor of Spouses Salvador finding
that valid grounds existed for the eviction of
Spouses Rabaja from the subject property and
ordering them to pay back rentals. Spouses
Salvador were able to garnish the amount of
P593,400.00[6] from Spouses Rabaja's time deposit
account pursuant to a writ of execution issued by
the MeTC.[7] Spouses Rabaja appealed to the
Regional Trial Court, which reversed the MeTC
ruling.The RTC-Br. 212 found that no lease
agreement existed between the parties. Thereafter,
Spouses Salvador filed an appeal with the CA. On
March 31, 2006, the CA ruled in favor of Spouses
Salvador and reinstated the MeTC ruling ejecting
Spouses Rabaja.[9] Not having been appealed, the
CA decision in CA-G.R. SP No. 89259 became final
and executory on May 12, 2006.[10]
Meanwhile, the rescission case filed by Spouses
Rabaja against Spouses Salvador and Gonzales was
also raffled to RTC-Br. 212. In their complaint,
Rabaja demanded the rescission of the contract to
sell praying that the amount of P950,000.00 they
previously paid to Spouses Salvador be returned to
them. They likewise prayed that damages be
awarded due to the contractual breach committed
by Spouses Salvador.
Spouses Salvador filed their answer with
counterclaim and cross-claim[12] contending that
there was no meeting of the minds between the
parties and that the SPA in favor of Gonzales was
falsified. In fact, they filed a case for falsification
against Gonzales, but it was dismissed because the
original of the alleged falsified SPA could not be
produced. They further averred that they did not
receive any payment from Spouses Rabaja through
Gonzales. In her defense, Gonzales filed her
answer[13] stating that the SPA was not falsified and
that the payments of Spouses Rabaja amounting to
P950,000.00 were all handed over to Spouses
Salvador. In the pre- trial conference, spouses
Salvador failed to attend.
RTC ruled in favor of spouses Rabaja. It held that
the signature of Spouses Salvador affixed in the
contract to sell appeared to be authentic. CA
affirmed the decision. Hence, this petition.
ISSUES:
1. WON Spouses Salvador are correct in raising
in issue the veracity of the receipts given by
Gonzales, the SPA and the validity of the
contract to sell.
2. WON Spouses Salvador’s argument, that the
ejectment case, from which the amount of
P593,400.00 was garnished, already became
final and executory and could not anymore
be disturbed, is correct.
RULING:
1. NO! The Court agrees with the courts below
in finding that the contract entered into by
the parties was essentially a contract of sale
which could be validly rescinded. Spouses
Salvador insist that they did not receive the
payments made by Spouses Rabaja from
Gonzales which totalled P950,000.00 and
that Gonzales was not their duly authorized
agent. Persons dealing with an agent must
ascertain not only the fact of agency, but
also the nature and extent of the agent's
authority. A third person with whom the
agent wishes to contract on behalf of the
principal may require the presentation of the
power of attorney, or the instructions as
regards the agency. The basis for agency is
representation and a person dealing with an
agent is put upon inquiry and must discover
on his own peril the authority of the agent.
According to Article 1990 of the New Civil
Code, insofar as third persons are
concerned, an act is deemed to have been
performed within the scope of the agent's
authority, if such act is within the terms of
the power of attorney, as written. In this
case, Spouses Rabaja did not recklessly
enter into a contract to sell with Gonzales.
They required her presentation of the power
of attorney before they transacted with her
principal. And when Gonzales presented the
SPA to Spouses Rabaja, the latter had no
reason not to rely on it.
The law mandates an agent to act within the
scope of his authority which what appears in
the written terms of the power of attorney
granted upon him.[36] The Court holds that,
indeed, Gonzales acted within the scope of
her authority. The SPA precisely stated that
she could administer the property, negotiate
the sale and collect any document and all
payments related to the subject
property.[37] As the agent acted within the
scope of his authority, the principal must
comply with all the obligations.[38] As
correctly held by the CA, considering that it
was not shown that Gonzales exceeded her
authority or that she expressly bound
herself to be liable, then she could not be
considered personally and solidarily liable
with the principal, Spouses Salvador.[39]
Perhaps the most significant point which
defeats the petition would be the fact that it
was Herminia herself who personally
 introduced Gonzalez to Spouses Rabaja as
the administrator of the subject property. By
their own ostensible acts, Spouses Salvador
made third persons believe that Gonzales
was duly authorized to administer, negotiate
and sell the subject property. This fact was
even affirmed by Spouses Salvador
themselves in their petition where they
stated that they had authorized Gonzales to
look for a buyer of their property.[40] It is
already too late in the day for Spouses
Salvador to retract the representation to
unjustifiably escape their principal
obligation.
As correctly held by the CA and the RTC,
considering that there was a valid SPA, then
Spouses Rabaja properly made payments to
Gonzales, as agent of Spouses Salvador; and
it was as if they paid to Spouses Salvador. It
is of no moment, insofar as Spouses Rabaja
are concerned, whether or not the payments
were actually remitted to Spouses Salvador.
Any internal matter, arrangement, grievance
or strife between the principal and the agent
is theirs alone and should not affect third
persons. If Spouses Salvador did not receive
the payments or they wish to specifically
revoke the SPA, then their recourse is to
institute a separate action against Gonzales.
Such action, however, is not any more
covered by the present proceeding.
2. The amount of P593,400.00 should not be
returned by Spouses Salvador
Nevertheless, the assailed decision of the CA
must be modified with respect to the amount
of P593,400.00 garnished by Spouses
Salvador and ordered returned to Spouses
Rabaja. The RTC ordered the return of the
amount garnished holding that it
constituted a part of the purchase price. The
CA ruled that Spouses Salvador misled the
Court when they improperly cited CA-G.R.
SP No. 89260 to prove their entitlement to
the said amount. Both courts erred in their
ruling.
First, the garnishment of the amount of
P593,400.00 against Spouses Rabaja was
pursuant to the CA decision in CA-G.R. SP
No. 89259, an entirely different case
involving an action for ejectment, and it does
not concern the rescission case which is on
appeal before this Court. Moreover, the
decision on the ejectment case is final and
executory and an entry of judgment has
already been made.[41] Nothing is more
settled in law than that when a final
judgment is executory, it thereby becomes
immutable and unalterable. The judgment
may no longer be modified in any respect,
even if the modification is meant to correct
what is perceived to be an erroneous
conclusion of fact or law, and regardless of
whether the modification is attempted to be
made by the court which rendered it or by
the highest Court of the land. The doctrine
is founded on consideration of public policy
and sound practice that, at the risk of
occasional errors, judgments must become
final at some definite point in time.[42]
The March 31, 2006 CA decision [43] in CA-
G.R. SP No. 89259 has long been final and
executory and cannot any more be disturbed
by the Court. Public policy dictates that once
a judgment becomes final, executory and
unappealable, the prevailing party should
not be denied the fruits of his victory by
some subterfuge devised by the losing party.
Unjustified delay in the enforcement of a
judgment sets at naught the role and
purpose of the courts to resolve justiciable
controversies with finality.[44]
Leonardo Castillo vs Security Bank Corp.
FACTS: Petitioner Leonardo C. Castillo and
respondent Leon C. Castillo, Jr. are siblings. Leon
and Teresita Flores-Castillo (the Spouses Castillo)
were doing business under the name of JRC Poultry
Farms. Sometime in 1994, the Spouses Castillo
obtained a loan from respondent SBC in the amount
of ₱45,000,000.00. To secure said loan, they
executed a real estate mortgage over (11) parcels of
land belonging to different members of the Castillo
family and which are all located in San Pablo
City.4 They also procured a second loan5 amounting
to ₱2,500,000.00, which was covered by a mortgage
on a land in Pasay City. Subsequently, the Spouses
Castillo failed to settle the loan, prompting SBC to
proceed with the foreclosure of the properties. SBC
was then adjudged as the winning bidder in the
foreclosure. Thereafter, they were able to redeem the
foreclosed properties, except for 2.
On January 30, 2002, Leonardo filed a complaint
for the partial annulment of the real estate
mortgage. He alleged that he owns one of the
properties and that the Spouses Castillo used it as
one of the collaterals for a loan without his consent.
He contested his supposed Special Power of
Attorney (SPA) in Leon’s favor, claiming that it is
falsified. According to him, the date of issuance of
his Community Tax Certificate (CTC) as indicated on
the notarization of said SPA is January 11, 1993,
when he only secured the same on May 17, 1993.
He also assailed the foreclosure of the lots under
TCT Nos.20030 and 10073 which were still
registered in the name of their deceased father.
On the other hand, the Spouses Castillo insisted on
the validity of Leonardo’s SPA. They alleged that
they incurred the loan not only for themselves, but
also for the other members of the Castillo family who
needed money at that time. Upon receipt of the
proceeds of the loan, they distributed the same to
their family members, as agreed upon. However,
when the loan became due, their relatives failed to
pay their respective shares such that Leon was
forced to use his own money until SBC had to finally
foreclose the mortgage over the lots.6
RTC of San Pablo City ruled in Leonardo’s favor
Both parties elevated the case to the CA. On
November 26, 2010, the CA denied Leonardo’s
appeal and granted that of the Spouses Castillo and
SBC. It reversed and set aside the RTC Decision,
essentially ruling that the August 5, 1994 real estate
mortgage is valid. Leonardo filed a Motion for
Reconsideration, but the same was denied for lack
of merit.
Hence, Leonardo brought the case to the Court and
filed the instant Petition for Review
Issue: whether or not the real estate mortgage
constituted over the property in dispute is valid and
binding.
RULING: YES
Leonardo asserts that his signature in the SPA
authorizing his brother, Leon, to mortgage his
property covered by TCT No. T-28297 was falsified.
He claims that he was in America at the time of its
execution. As proof of the forgery, he focuses on his
alleged CTC used for the notarization 10 of the SPA
on May 5, 1993 and points out that it appears to
have been issued on January 11, 1993 when, in
fact, he only obtained it on May 17, 1993. But it is
a settled rule that allegations of forgery, like all other
allegations, must be proved by clear, positive, and
convincing evidence by the party alleging it. It
should not be presumed, but must be established
by comparing the alleged forged signature with the
genuine signatures.11 Here, Leonardo simply relied
on his self-serving declarations and refused to
present further corroborative evidence, saying that
the falsified document itself is the best
evidence.12 He did not even bother comparing the
alleged forged signature on the SPA with samples of
his real and actual signature. What he consistently
utilized as lone support for his allegation was the
supposed discrepancy on the date of issuance of his
CTC as reflected on the subject SPA’s notarial
acknowledgment. On the contrary, in view of the
great ease with which CTCs are obtained these
days,13 there is reasonable ground to believe that,
as the CA correctly observed, the CTC could have
been issued with the space for the date left blank
and Leonardo merely filled it up to accommodate his
assertions. Also, upon careful examination, the
handwriting appearing on the space for the date of
issuance is different from that on the computation
of fees, which in turn was consistent with the rest
of the writings on the document.14 He did not
likewise attempt to show any evidence that would
back up his claim that at the time of the execution
of the SPA on May 5, 1993, he was actually in
America and therefore could not have possibly
appeared and signed the document before the
notary.
And even if the Court were to assume, simply for the
sake of argument, that Leonardo indeed secured his
CTC only on May 17, 1993, this does not
automatically render the SPA invalid. The appellate
court aptly held that defective notarization will
simply strip the document of its public character
and reduce it to a private instrument, but
nonetheless, binding, provided its validity is
established by preponderance of evidence.15 Article
1358 of the Civil Code requires that the form of a
contract that transmits or extinguishes real rights
over immovable property should be in a public
document, yet the failure to observe the proper form
does not render the transaction invalid.16 The
necessity of a public document for said contracts is
only for convenience; it is not essential for validity
or enforceability.17 Even a sale of real property,
though not contained in a public instrument or
formal writing, is nevertheless valid and binding, for
even a verbal contract of sale or real estate produces
legal effects between the parties.18 Consequently,
when there is a defect in the notarization of a
document, the clear and convincing evidentiary
standard originally attached to a duly notarized
document is dispensed with, and the measure to
test the validity of such document is preponderance
of evidence.19
Here, the preponderance of evidence indubitably
tilts in favor of the respondents, still making the SPA
binding between the parties even with the
aforementioned assumed
irregularity.1âwphi1 There are several telling
circumstances that would clearly demonstrate that
Leonardo was aware of the mortgage and he indeed
executed the SPA to entrust Leon with the mortgage
of his property. Leon had in his possession all the
titles covering the eleven (11) properties mortgaged,
including that of Leonardo. 20 Leonardo and the rest
of their relatives could not have just blindly ceded
their respective TCTs to Leon.21 It is likewise
ridiculous how Leonardo seemed to have been
totally oblivious to the status of his property for
eight (8) long years, and would only find out about
the mortgage and foreclosure from a nephew who
himself had consented to the mortgage of his own
lot.22 Considering the lapse of time from the alleged
forgery on May 5, 1993 and the mortgage on August
5, 1994, to the foreclosure on July 29, 1999, and to
the supposed discovery in 2001, it appears that the
suit is a mere afterthought or a last-ditch effort on
Leonardo’s part to extend his hold over his property
and to prevent SBC from consolidating ownership
over the same. More importantly, Leonardo himself
admitted on cross-examination that he granted
Leon authority to mortgage, only that, according to
him, he thought it was going to be with China Bank,
and not SBC.23 But as the CA noted, there is no
mention of a certain bank in the subject SPA with
which Leon must specifically deal. Leon, therefore,
was simply acting within the bounds of the SPA’s
authority when he mortgaged the lot to SBC.
True, banks and other financing institutions, in
entering into mortgage contracts, are expected to
exercise due diligence.24 The ascertainment of the
status or condition of a property offered to it as
security for a loan must be a standard and
indispensable part of its operations.25 In this case,
however, no evidence was presented to show that
SBC was remiss in the exercise of the standard care
and prudence required of it or that it was negligent
in accepting the mortgage.26 SBC could not likewise
be faulted for relying on the presumption of
regularity of the notarized SPA when it entered into
the subject mortgage agreement.
Maritime Agencies vs CA
Facts: Transcontinental Fertilizer Company of
London chartered from Hongkong Island Shipping
Company for the shipment of bagged urea
from Novorossisk, Odessa, USSR, to
the Philippines, the parties signing for this
purpose a Uniform General Charter.
Of the total shipment, a part of it was for the
account of Atlas Fertilizer Company as consignee,
the other parts are to be discharged in Manila and
in Cebu. The goods were insured by the consignee
with the Union Insurance Society of Canton, Ltd.
Maritime Agencies & Services, Inc. was
appointed as the charterer's agent
and Macondray Company, Inc. as the owner's
agent.
The vessel arrived in MANILA and unloaded part of
the consignee's goods, then proceeded to Cebu to
discharge the rest of the cargo.
On October 31, 1979, the consignee filed a formal
claim against Maritime, copy furnished Macondray,
for the amount of P87,163.54, representing C & F
value of the shortlanded bags.[5] On January 12,
1980, the consignee filed another formal claim, this
time against Viva Customs Brokerage, for the
amount of P36,030.23, representing the value of
574 bags of net unrecovered spillage.[6]
These claims having been rejected, the consignee
then went to Union, which on demand paid the total
indemnity of P113,123.86 pursuant to the
insurance contract. As subrogee of the consignee,
Union then filed on September 19,
1980, a complaint for reimbursement of this
amount, with legal interest and attorney's fees,
against Hongkong Island Company, Ltd., Maritime
Agencies & Services, Inc. and/or Viva Customs
Brokerage.[7] On April 20, 1981, the complaint was
amended to drop Viva
and implead Macondray Company, Inc. as a new
defendant.[8]
On January 4, 1984, after trial, the trial court
rendered judgment holding the defendants liable.
CA held Maritime and Union liable. Maritime and
Union filed separate motions for reconsideration
which were both denied. The movants are now
before us to question the decision of the respondent
court.
In G.R. No. 77638, Maritime pleads non-liability on
the ground that it was only the charterer's agent
and should not answer for whatever responsibility
might have attached to the principal. It also argues
that the respondent court erred in applying Articles
1734 and 1735 of the Civil Code in determining
the charterer's liability.
In G.R. No. 77674, Union asks for the modification
of the decision of the respondent court
so as to make Maritime solidarily and solely liable,
its principal not having been impleaded and so not
subject to the jurisdiction of our courts.
These two cases were consolidated. There are three
general categories of charters, to wit, the demise or
"bareboat charter," the time charter and the voyage
charter.
Issue: WON Maritime is soley and solidarily liable
as an agent of the charterer.
Ruling:
A demise charter involves the transfer of full
possession and control of the vessel for the period
covered by the contract, the charterer obtaining the sustained by that cargo were also received and
right to use the vessel and carry whatever cargo it processed by it. As a result, the charterer's agent
chooses, while manning and supplying the ship as was also considered a ship agent and so was held to
well. be solidarily liable with its principal.
A time charter is a contract to use a vessel The facts in the cases at bar are different.
for a particular period of time, the charterer The charterer did not represent itself as a carrier
obtaining the right to direct the movements of the and indeed assumed responsibility ability only for
vessel during the chartering period, although the the unloading of the cargo, i.e, after the goods were
owner retains possession and control. already outside the custody of the vessel. In
A voyage charter is a contract for the hire of supervising the unloading of the cargo and issuing
a vessel for one or a series of voyages usually for the Daily Operations Report and Statement of Facts
purpose of transporting goods for the charterer. The indicating and describing the day-to-day discharge
voyage charter is a contract of affreightment and is of the cargo, Maritime acted in representation of the
considered a private carriage. charterer and not of the vessel. It thus cannot be
Tested by those definitions, the agreement considered a ship agent. As a mere charterer's
entered into in the cases at bar should be agent, it cannot be held solidarily liable with
considered. This brings us to the basic question of Transcontinental for the losses/damages to the
who, in this kind of charter, shall be liable for the cargo outside the custody of the vessel. Notably,
cargo. Transcontinental was disclosed as the charterer's
A voyage charter being a private carriage, the principal and there is no question that Maritime
parties may freely contract respecting liability for acted within the scope of its authority.
damage to the goods and other matters. The basic
principle is that "the responsibility for cargo loss
falls on the one who agreed to perform the duty
involved" in accordance with the terms of most
voyage charters. This is true in the present cases
where the charterer was responsible for loading,
stowage and discharging at the ports visited, while
the owner was responsible for the care of the cargo
during the voyage.
As regards the goods damaged or lost during
unloading, the charterer is liable therefor, having
assumed this activity under the charter party "free
of expense to the vessel." The difficulty is that
Transcontinental has not been impleaded in these
cases and so is beyond our jurisdiction. The liability
imposable upon it cannot be borne by Maritime
which, as a mere agent, is not answerable for injury
caused by its principal. It is a well-settled principle
that the agent shall be liable for the act or omission
of the principal only if the latter is undisclosed. 19
Union seeks to hold Maritime liable as ship
agent on the basis of the ruling of this Court in the
case of Switzerland General Insurance
Co., Ltd. v. Ramirez. 20 However, we do not find that
case is applicable.
In that case, the charterer represented itself
on the face of the bill of lading as the carrier. The
vessel owner and the charterer did not stipulate in
the Charter party on their separate respective
liabilities for the cargo. The loss/damage to the
cargo was sustained while it was still on board or
under the custody of the vessel. As the charterer
was itself the carrier, it was made liable for the acts
of the ship captain who was responsible for the
cargo while under the custody of the vessel.
As for the charterer's agent, the evidence
showed that it represented the vessel when it took
charge of the unloading of the cargo and issued
cargo receipts (or tally sheets) in its own name.
Claims against the vessel for the losses/damages