CHAPTER X 2.
The damages suffered by the vessel in her hull, rigging, arms, and
RISKS, DAMAGES, AND ACCIDENTS OF
MARITIME COMMERCE
AVERAGES
ARTICLE 806. For the purposes of this Code the following shall be
considered averages:
1. All extraordinary or accidental expenses which may be incurred
during the navigation for the preservation of the vessel or cargo, or
both.
2. All damages or deterioration the vessel may suffer from the time she
puts to sea from the port of departure until she casts anchor in the port
of destination, and those suffered by the merchandise from the time it
is loaded in the port of shipment until it is unloaded in the port of
consignment.
ARTICLE 807. The petty and ordinary expenses of navigation, such as
pilotage of coasts and ports, lighterage and towage, anchorage dues,
inspection, health, quarantine, lazaretto, and other so-called port
expenses, costs of barges, and unloading, until the merchandise is
placed on the wharf, and any other expenses common to navigation
shall be considered ordinary expenses to be defrayed by the
shipowner, unless there is a special agreement to the contrary.
ARTICLE 808. Averages shall be:
1. Simple or particular.
2. General or gross.
ARTICLE 809. Simple or particular averages shall be, as a general rule,
all the expenses and damages caused to the vessel or to her cargo
which have not redounded to the benefit and common profit of all the
persons interested in the vessel and her cargo, and especially the
following:
1. The damages suffered by the cargo from the time of its embarkation
until it is unloaded, either on account of the nature of the goods or by
reason of an accident at sea or force majeure, and the expenses
incurred to avoid and repair the same.
equipment, for the same causes and reasons, from the time she puts to
sea from the port of departure until she anchored in the port of
destination.
3. The damages 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 should be
detained or embargoed by a legitimate order or force majeure, if the
charter should have been 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 cover any other requirement of the vessel against which the proper
amount shall be charged.
7. The victuals and wages of the crew during the time the vessel is in
quarantine.
8. The damage suffered by the vessel or cargo by reason of an impact
or collision with another, if it were accidental and unavoidable. If the
accident should occur through the fault or negligence of the captain,
the latter shall be liable for all the damage caused.
9. Any damage suffered by the cargo through the faults, 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 freight.
ARTICLE 810. The owner of the goods which gave rise to the expense
or suffered the damage shall bear the simple or particular averages.
ARTICLE 811. General or gross averages shall be, as a general rule, all
the damages and expenses which are deliberately caused in order to
save the vessel, her 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 cargo
captured by enemies, privateers, or pirates, and the provisions, wages,
and expenses of the vessel detained during the time the arrangement
or redemption is taking place.
2. The goods jettisoned to lighten the vessel, whether they belong to
the vessel, to the cargo, or to the crew, and the damage suffered
through said act by the goods kept.
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 her 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 through the opening
made in the vessel in order to drain her and prevent her sinking.
6. The expenses caused through floating a vessel intentionally
stranded for the purpose of saving her.
7. The damage caused to the vessel which it is necessary to break
open, scuttle, or smash in order to save the cargo.
8. The expenses of curing and maintaining 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 detained 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 it should be embargoed or detained by force
majeure or by order of the Government, or in order to repair the
damage caused for the common good.
11. The loss suffered in the value of the goods sold at arrivals under
stress in order to repair the vessel because of gross average.
12. The expenses of the liquidation of the average.
ARTICLE 812. 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.
Average
 in maritime law is loss or damage accidentally happening to a vessel
or to its cargo during a voyage.
 Also a small duty paid to masters of ships, when goods are sent in
another man’s ship, for their care of the goods, over and above the
freight.
Classification of Averages
A. Magsaysay, Inc. v. Anastacia Agan No. L-6393, January 31, 1955
1.ADMIRALTY LAW; VESSELS; ACCIDENTAL STRANDING; AVERAGES.
—The law on averages is contained in the Code of Commerce. Under that
law, averages are classified into simple or particular and general or gross.
Generally speaking, simple or particular averages include all expenses and
damages caused to the vessel or cargo which have not inured to the
common benefit (Art. 809) and are, therefore, to be borne only by the owner
of the property which gave rise to the same (Art 810); while general or gross
averages 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" (Art. 811). Being for the common benefit, gross
averages are to be borne by the owners of the articles saved (Art. 812).
2.ID.; ID.; ID.; CLASSIFICATION OF AVERAGES.—In classifying averages
into simple or Particular and general or gross and defining each class, the
Code (Arts. 809 and 811) at the same time enumerates certain specific
cases as coming specially under one or the other denomination. While the
expenses incurred in putting a vessel afloat may well come under number 2
of article 809—which refers to expenses suffered by the vessel "by reason of
an accident of the sea or force majeure"—and should therefore be classified
as particular average, the said expenses do not fit into any of the specific
cases of general average enumerated in article 811. No. 6 of this article
does. mention "expenses caused in order to float a vessel," but it specifically
refers to "a vessel intentionally stranded for the purpose of saving it" and
would have no application where the stranding was not intentional.
3.ID.; ID.; GENERAL AVERAGE; ITS REQUISITES.—The following are the
requisites for general average: (1) there must be a common danger; (2) for
the common safety part of the vessel or of the cargo or both is sacrificed
deliberately; (3) from the expensess or damages caused follows the
successful saving of the vessel and cargo; and (4) the expenses or damages
should have been incurred or inflicted after taking proper legal steps and
authority.
4.ID..—It is the deliverance from an immediate peril, by a common sacrifice,
that constitutes the essence of general average (Columbian Insurance Co. of
Alejandria vs. Ashby & Stribling, 13 Peters 331, 10 L. ed. 186). Where there
is no proof that the stranded vessel had to be put afloat to save it from an
imminent danger, and what does appear is that the vessel had to be
salvaged in order to enable it "to proceed to its port or destination," the
expenses incurred in floating the vessel do not constitute general average. It
is the safety of the property, and not of the voyage, which constitutes the
true foundation of general average.
5.ID.; ID.; ID.; ID.—Even if the salvage operation was a success, yet if the
sacrifice was for the benefit of the vessel—to enable it to proceed to its
destination—and not for the purpose of saving the cargo, the cargo—owners
are not in law bound to contribute to the expense. A. Magsaysay, Inc. vs.
Agan, 96 Phil. 504, No. L-6393 January 31, 1955
Under the law, averages are classified into:
1. simple or particular and
2. general or gross.
simple or particular averages general or gross averages
Generally speaking, include all all the damages and expenses
expenses and damages caused to which are deliberately caused in
the vessel or cargo which have not order to save the vessel, its cargo,
inured to the common benefit (Art. or both at the same time, from a
809), and are, therefore, to be real and known risk.” (Art. 811)
borne only by the owner of the Being for the common benefit,
property which gave rise to the gross averages are to be borne by
same (Art. 810); the owners of the articles saved.
(Art. 812)
In classifying averages into simple or particular and general or gross and
defining each class, the Code (Arts. 809 and 811) at the same time
enumerates certain specific cases as coming specially under one or the
other denomination. Going over the specific cases enumerated, we find that
while the expenses incurred in putting plaintiff’s vessel afloat may well come
under number 2 of Article 809 — which refers to expenses suffered by the
vessel “by reason of an accident of the sea or force majeure” — and should
therefore be classified as particular average, the said expenses do not fit into
any of the specific cases of general average enumerated in Article 811, No.
6 of this article does mentioned “expenses caused in order to float a vessel,”
but it specifically refers to “a vessel intentionally stranded for the purpose of
saving it” and would have no application where, as in the present case, the
stranding was not intentional.
REQUISITES OF GENERAL AVERAGE
The following are the requisites for general average:
1. There must be a common danger;
2. for the common safety part of the vessel or of the cargo or both is
sacrificed deliberately;
3. from the expenses or damages caused follows the successful saving
of the vessel and cargo; and
4. the expenses or damages should have been incurred or inflicted
after taking proper legal steps and authority. (Magsaysay, Inc. v.
Agan, supra)
In a much earlier case (Compagnie de Commerce, etc. v. Hamburg America,
etc., March 31, 1917), the Supreme Court expounded on these requisites of
general average by citing two leading American cases decided by the
Supreme Court of the United States:
“Such claims have their foundation in equity, and rest upon the doctrine that
whatever is sacrificed for the common benefit of the associated interests
shall be made good by all the interests which are exposed to the common
peril and which were saved from the common danger by the sacrifice. Much
is deferred in such an emergency to the judgment and decision of the
master; but the authorities, everywhere, agree that three things must concur
in order to constitute a valid claim for general average contribution:
First, there must be a common danger to which the ship. and crew were all
exposed, and that danger must be imminent and apparently inevitable,
except by incurring a loss of a portion of the associated interests to save the
remainder. Second, there must be the voluntary sacrifice of a part for the
benefit of the whole, as for example, a voluntary jettison or casting away of
some portion of the associated interests for the purpose of avoiding the
common peril, or a voluntary transfer of the common peril from the whole to
a particular portion of those interests. Third, the attempt so made to avoid
the common peril to which all those interests were exposed must be to some
practical extent successful, for if nothing is saved there cannot be any such
contribution in any case.”
In the next case which came before this court, Mr. Justice Grier, in delivering
judgment, defined these requisites, somewhat more fully, as follows: ‘In
order to constitute a case of general average, three things must concur: (1) a
common danger, a danger in which ship, cargo and crew all participate; a
danger imminent and apparently inevitable, except by voluntarily incurring
the loss of a portion of the whole to save the remainder; (2) there must be a
voluntary jettison, jactus, or casting away of some portion of the joint
concern for the purpose of avoiding this imminent peril, periculi imminentis
evitandi causa, or, in other words, a transfer of the peril from the whole to a
particular portion of the whole; (3) this attempt to avoid the imminent peril
must be successful.’”
ARTICLE 813. In order to incur the expenses and cause the damages
corresponding to gross average, a previous resolution of the captain,
adopted after deliberation with the sailing mate and other officers of
the vessel, and with a hearing of the persons interested in the cargo
who may be present, shall be required.
If the latter shall object, and the captain and officers, or a majority, or
the captain, if opposed to the majority, should consider certain
measures necessary, they may be executed under his liability, without
prejudice to the freighters exercising their rights against the captain
before the judge or court of competent jurisdiction, if they can prove
that he acted with malice, lack of skill, or negligence.
If the persons interested in the cargo, being on the vessel, should not
be heard, they shall not contribute to the gross average, which
contribution shall be paid by the captain, unless the urgency of the
case should be such that the time necessary for previous deliberation
was lacking.
ARTICLE 814. The resolution adopted to cause the damages which
constitute a general average must necessarily be entered in the log
book, stating the motives and reasons therefor, the votes against it,
and the reasons for the disagreement should there be any, and the
irresistible and urgent causes which moved the captain if he acted of
his own accord.
In the first case the minutes shall be signed by all the persons present
who could do so before taking action if possible, and if not at the first
opportunity; in the second case by the captain and by the officers of
the vessel.
In the minutes and after the resolution there shall be stated in detail all
the goods cast away, and mention shall be made of the injuries caused
to those kept on board. The captain shall be obliged to deliver one
copy of these minutes to the maritime judicial authority of the first port
he may make within twenty-four hours after his arrival, and to ratify it
immediately by an oath.
 Where the formalities prescribed under Articles 813 and 814 of the
Code of Commerce in order to incur the expenses and cause the
damage corresponding to gross average were not complied with, the
carrier cannot claim for contribution from the consignees for additional
freight and salvage charges.”
Philippine Home Assurance Corporation v. Court of Appeals and
Eastern Shipping Lines, Inc. G.R. No. 106999, June 20,1996
Same; Ships and Shipping; General Averages; Words and Phrases; As a
rule, general or gross averages include all 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.—On the issue of whether or not
respondent court committed an error in concluding that the expenses
incurred in saving the cargo are considered general average, we rule in the
affirmative. As a rule, general or gross averages include all 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.
Same; Same; Same; Where the formalities prescribed under Articles 813
and 814 of the Code of Commerce in order to incur the expenses and cause
the damage corresponding to gross average were not complied with, the
carrier cannot claim for contribution from the consignees for additional freight
and salvage charges.—While the instant case may technically fall within the
purview of the said provision, the formalities prescribed under Articles 813
and 814 of the Code of Commerce in order to incur the expenses and cause
the damage corresponding to gross average were not complied with.
Consequently, respondent ESLI’s claim for contribution from the consignees
of the cargo at the time of the occurrence of the average turns to naught.
Prescinding from the foregoing premises, it indubitably follows that the cargo
consignees cannot be made liable to respondent carrier for additional freight
and salvage charges. Consequently, respondent carrier must refund to
herein petitioner the amount it paid under protest for additional freight and
salvage charges in behalf of the consignees.
ARTICLE 815. The captain shall supervise the jettison, and shall order
the goods cast overboard in the following order:
1. Those which are on deck, beginning with those which embarrass the
handling of the vessel or damage her, preferring, if possible, the
heaviest ones and those of least utility and value.
2. Those in the hold, always beginning with those of the greatest
weight and smallest value, to the amount and number absolutely
indispensable.
ARTICLE 816. 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 in so far 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 made up
before the departure, in accordance with the first paragraph of Article
612.

ARTICLE 817. If in lightening a vessel on account of a storm, in order

to facilitate her entry into a port or roadstead, part of her 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 has originated from a gross
average, the amount thereof being distributed between the entire
vessel and cargo which caused the same.

If, on the contrary, the merchandise transferred should be saved and

the vessel should be lost, no liability can be demanded of the salvage.

ARTICLE 818. If, as a necessary measure to extinguish a fire in a 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.