An importer of Christmas toys loaded 100 boxes of Santa Claus talking dolls aboard a ship in Korea bound for Manila. With the intention of smuggling one-half of his cargo, he took a bill of lading for only 50 boxes. On the voyage to Manila, 50 boxes were jettisoned to save the more precious cargo.
a. Is the importer entitled to receive any indemnity for average? Explain. (2%)
b. What are the types of averages in marine commerce? (3%)
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The importer is not entitled to indemnity for average, and marine commerce averages are classified into particular average and general average. Under Article 816 of the Code of Commerce, goods jettisoned are included in general average only if
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Quick check
What is the statutory effect under Article 816 of the Code of Commerce if unmanifested or smuggled goods are jettisoned?
Article 816 expressly denies general average indemnity for goods jettisoned that were not listed in the bill of lading.
Under Philippine maritime law, what are the two general classifications of averages in marine commerce?
Articles 806 to 811 classify marine averages into simple/particular averages and gross/general averages.
How are losses from a simple or particular average borne under Article 810 of the Code of Commerce?
Particular averages are suffered exclusively by the owner of the damaged or lost property.
What key condition must be satisfied under Article 816 for jettisoned cargo to claim general average contribution?
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If unmanifested goods are successfully saved from a maritime peril after a jettison, what is their legal status regarding general average?
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Learn more about these topics
1. General Average Requisites
Under Article 811 and Article 816 of the Code of Commerce, general average includes all damages and expenses deliberately caused to save the vessel, its cargo, or both, from a real and known maritime peril. To entitle a cargo owner to indemnity under general average, the goods jettisoned or sacrificed must be properly documented and proven by a valid bill of lading. Goods loaded on board secretly or without being declared in the bill of lading are excluded from general average contributions if jettisoned.
2. Unmanifested Cargo Jettison
Under Article 816 of the Code of Commerce, unmanifested or smuggled goods loaded aboard a vessel without being entered into the cargo manifest or bill of lading do not enjoy the benefit of general average indemnity if they are sacrificed or jettisoned during a sea voyage. The law penalizes the fraudulent concealment of cargo by denying reimbursement to the dishonest shipper. However, if unmanifested goods are saved from a maritime peril, they remain liable to contribute proportionally to the general average expenses incurred.
3. Marine Commerce Averages
Under Articles 806 to 811 of the Code of Commerce, averages in marine commerce are classified into simple or particular averages, and gross or general averages. Particular averages comprise all expenses and damages caused to the vessel or cargo that have not inured to the common benefit of all interests involved, and are borne exclusively by the owner of the damaged property. General averages encompass deliberate sacrifices or extraordinary expenses intentionally incurred for the common safety of the ship, freight, and cargo.