Aboitiz v CA

7/25/2019 Aboitiz v CA

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Republic of the Philippines

SUPREME COURT

Manila

SECOND DIVISION

G.R. No. 121833 October 17, 2008

ABOITI S!IPPING CORPORATION,petitioners,

vs.

COURT O" APPEA#S, MA#A$AN INSURANCE COMPAN$, INC., COMPAGNIE MARITIME

DES C!ARGEURS REUNIS, %&' ".E. UE##IG (M), INC.,respondents.

x-----------------------------------------x

G.R. No. 1307*2 October 17, 2008


vs.

COURT O" APPEA#S, T!E !ON. +UDGE REMEGIO E. ARI, & - c%/%ct % Pre'&

+'e o t-e RTC, Br%&c- 204 ASIA TRADERS INSURANCE CORPORATION, %&' A##IED

GUARANTEE INSURANCE CORPORATION,respondents.

x-----------------------------------------x

G.R. No. 137801 October 17, 2008


vs.

E5UITAB#E INSURANCE CORPORATION,respondents.

DECISION

TINGA, J.6

Before this Court are three consolidated Rule 45 petitions all involving the issue of whether the

real and hpothecar doctrine !a be invo"ed b the shipowner in relation to the loss of

cargoes occasioned b the sin"ing of M/V P. Aboitiz on #$ %ctober $&'(. )he petitions filed b*boiti+ hipping Corporation *boiti+ co!!onl see" the co!putation of its liabilit in

accordance with the Court/s pronounce!ent in *boiti+ hipping Corporation v. 0eneral *ccident

1ire and 2ife *ssurance Corporation, 2td.$hereafter referred to as 3the $&GAFLAC case3.

)he three petitions ste!!ed fro! so!e of the several suits filed against *boiti+ before different

regional trial courts b shippers or their successors-in-interest for the recover of the !onetar

value of the cargoes lost, or b the insurers for the rei!burse!ent of whatever the paid. )he

trial courts awarded to various clai!ants the a!ounts of P#&,'.(, P4,&.#(,

and P'6,##.'$ in 0.R. 7os. $$'##, $#(65 and $#6'($, respectivel.

ANTECEDENTS

G.R. No. 121833

Respondent Malaan 8nsurance Co!pan, 8nc. Malaan filed five separate actions against

several defendants for the collection of the a!ounts of the cargoes allegedl paid b Malaan

under various !arine cargo policiesissued to the insurance clai!ants. )he five civil cases,
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na!el, Civil Cases 7o. $#'6$, 7o. $#&('#, 7o. $#'6, 7o. R-'$-5 and 7o. $#''6&, were

consolidated and heard before the Regional )rial Court R)C of Manila, Branch 54.

)he defendants in Civil Case 7o. $#'6$ and in Civil Case 7o. $#&('# were Malaan

8nternational hipping Corporation, a foreign corporation based in Malasia, its local ship agent,

2iton9ua Merchant hipping *genc 2iton9ua, and *boiti+. )he defendants in Civil Case 7o.$#'6 were Co!pagnie Mariti!e des Chargeurs Reunis CMCR, its local ship agent, 1.:.

;uellig M, 8nc. ;uellig, and *boiti+. Malaan also filed Civil Case 7o. R-'$-5 onl against

CMCR and ;uellig. )hus, defendants CMCR and ;uellig filed a third-part co!plaint against

*boiti+. 8n the fifth co!plaint doc"eted as Civil Case 7o. $#''6&, onl *boiti+ was i!pleaded as

defendant.

)he ship!ents were supported b their respective bills of lading and insured separatel b

Malaan against the ris" of loss or da!age. 8n the five consolidated cases, Malaan sought the

recover of a!ounts totalingP#&,'.(.

*boiti+ raised the defenses of lac" of 9urisdiction, lac" of cause of action and prescription. 8t also

clai!ed that M/V P. Aboitiz was seaworth, that it exercised extraordinar diligence and that the

loss was caused b a fortuitous event.

*fter trial on the !erits, the

R)C of Manila rendered a


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*boiti+, CMCR and ;uellig appealed the R)C decision to the Court of *ppeals. )he appeal was

doc"eted as C*-0.R. P 7o. #5&65-C@.


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that the Court of *ppeals co!!itted an reversible error. *boiti+/s !otion for reconsideration

was also denied in a Resolution dated 7ove!ber $&&5.$5

)he 7ove!ber $&&5 Resolution beca!e final and executor. %n 1ebruar $&&, *sia

)raders and *llied filed a !otion for execution before the R)C of Manila, Branch (. *boiti+

opposed the !otion. %n $ *ugust $&&, the trial court granted the !otion and issued a writ ofexecution.

*lleging that it had no other speed, 9ust or adeEuate re!ed to prevent the execution of the

9udg!ent, *boiti+ filed with the Court of *ppeals a petition for certiorari and prohibition with an

urgent praer for preli!inar in9unction andor te!porar restraining order doc"eted as C*-0.R.

P 7o. 4$&.$)he petition was !ainl anchored on this Court/s ruling in the

$& GAFLAC case.

%n ' *ugust $&&6, the Court of *ppeals pecial eventeenth


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8ts !otion for reconsideration6having been denied,'*boiti+ filed before this Court a petition for

review on certiorari, doc"eted as 0.R. 7o. $#6'($,&raising this sole issue, to wit=

>?:)?:R %R 7%) )?: *2% G7%>7 * )?: 328M8):< 28*B828)D R2:3 *PP28:.#(

0SSES

)he principal issue co!!on to all three petitions is whether *boiti+ can avail li!ited liabilit on

the basis of the real and hpothecar doctrine of !ariti!e law. Corollar to this issue is the

deter!ination of actual negligence on the part of *boiti+.

)hese consolidated petitions si!ilarl posit that *boiti+/s liabilit to respondents should be

li!ited to the value of the insurance proceeds of the lost vessel plus pending freightage and not

correspond to the full insurable value of the cargoes paid b respondents, based on the Court/s

ruling in the $& GAFLACcase.

Respondents in 0.R. 7o. $$'## counter that the li!ited liabilit rule should not be applied

because there was a finding of negligence in the care of the goods on the part of *boiti+ based

on this Court/s Resolution dated 4


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Court exhorted the trial courts before who! si!ilar cases re!ained pending to proceed with trial

and ad9udicate these clai!s so that the pro-rated share of each clai! could be deter!ined after

all the cases shall have been decided.#

8n the $& GAFLACcase, the Court applied the li!ited liabilit rule in favor of *boiti+ based on

the trial court/s finding therein that *boiti+ was not negligent. )he Court explained, thus=

x x x 8n the few instances when the !atter was considered b this Court, we have been

consistent in this 9urisdiction in holding that the o%(ti!e the 2i!ited 2iabilit Rule 4oe) %ot

$$(is when there is an actual finding of negligence on the part of the vessel owner or agent x

x x. )he pivotal Euestion, thus, is whether there is finding of such negligence on the part of the

owner in the instant case.

* careful reading of the decision rendered b the trial court in Civil Case 7o. $4445 as well as

the entiret of the records in the instant case will show that t-ere -% bee& &o %ct% &'&

o &ee&ce o& t-e /%rt o /etto&er. x x x

)he sa!e is true of the decision of this Court in 0.R. 7o. '&656 affir!ing the decision of the

Court of *ppeals in C*-0.R. C@ 7o. $((& since both decisions did not !a"e an new and

additional finding of fact. Both !erel affir!ed the factual findings of the trial court, adding that

the cause of the sin"ing of the vessel was because of unseaworthiness due to the failure of the

crew and the !aster to exercise extraordinar diligence. 8ndeed, there appears to have been no

evidence presented sufficient to for! a conclusion that petitioner shipowner itself was negligent,

and no tribunal, including this Court, will add or subtract to such evidence to 9ustif a conclusion

to the contrar.##Citations entitled :!phasis supplied

)he ruling in the $& GAFLACcase cited the real and hpothecar doctrine in !ariti!e lawthat the shipowner or agent/s liabilit is !erel co-extensive with his interest in the vessel such

that a total loss thereof results in its extinction. 37o vessel, no liabilit3 expresses in a nutshell

the li!ited liabilit rule.#4

8n this 9urisdiction, the li!ited liabilit rule is e!bodied in *rticles 5'6, 5&( and '#6 under Boo"

888 of the Code of Co!!erce, thus=

*rt. 5'6. )he ship agent shall also be civill liable for the inde!nities in favor of third persons

which !a arise fro! the conduct of the captain in the care of the goods which he loaded on the

vesselA but he !a exe!pt hi!self therefro! b abandoning the vessel with all her eEuip!ent

and the freight it !a have earned during the voage.

*rt. 5&(. )he co-owners of the vessel shall be civill liable in the proportion of their interests in

the co!!on fund for the results of the acts of the captain referred to in *rt. 5'6.

:ach co-owner !a exe!pt hi!self fro! this liabilit b the abandon!ent, before a notar, of

the part of the vessel belonging to hi!.

*rt. '#6. )he civil liabilit incurred b shipowners in the case prescribed in this section, shall be

understood as li!ited to the value of the vessel with all its appurtenances and freightage served

during the voage.

)hese articles precisel intend to li!it the liabilit of the shipowner or agent to the value of the

vessel, its appurtenances and freightage earned in the voage, provided that the owner or agent

abandons the vessel.#5>hen the vessel is totall lost in which case there is no vessel to

abandon, abandon!ent is not reEuired. Because of such total loss the liabilit of the shipowner

or agent for da!ages is extinguished.#?owever, despite the total loss of the vessel, its

insurance answers for the da!ages for which a shipowner or agent !a be held liable.#6
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7onetheless, there are exceptional circu!stances wherein the ship agent could still be held

answerable despite the abandon!ent of the vessel, as where the loss or in9ur was due to the

fault of the shipowner and the captain. )he international rule is to the effect that the right of

abandon!ent of vessels, as a legal li!itation of a shipowner/s liabilit, does not appl to cases

where the in9ur or average was occasioned b the shipowner/s own fault.#'2i"ewise, the

shipowner !a be held liable for in9uries to passengers notwithstanding the exclusivel real andhpothecar nature of !ariti!e law if fault can be attributed to the shipowner.#&

*s can be gleaned fro! the foregoing disEuisition in the $& GAFLACcase, the Court applied

the doctrine of li!ited liabilit in view of the absence of an express finding that *boiti+/s

negligence was the direct cause of the sin"ing of the vessel. )he circu!stances in the

$& GAFLACcase, however, are not obtaining in the instant petitions.

* perusal of the decisions of the courts below in all three petitions reveals that there is a

categorical finding of negligence on the part of *boiti+. 1or instance, in 0.R. 7o. $$'##, the

R)C therein expressl stated that the captain of M/V P. Aboitizwas negligent in failing to ta"e a

course of action that would prevent the vessel fro! sailing into the tphoon. 8n 0.R. 7o. $#(65,

the R)C concluded that *boiti+ failed to show that it had exercised the reEuired extraordinar

diligence in steering the vessel before, during and after the stor!. 8n 0.R. 7o. $#6'($, the R)C

categoricall stated that the sin"ing of M/V P. Aboitizwas attributable to the negligence or fault

of *boiti+. 8n all instances, the Court of *ppeals affir!ed the factual findings of the trial courts.

)he finding of actual fault on the part of *boiti+ is central to the issue of its liabilit to the

respondents. *boiti+/s contention, that with the sin"ing of M/V P. Aboitiz, its liabilit to the cargo

shippers and shippers should be li!ited onl to the insurance proceeds of the vessel absent an

finding of fault on the part of *boiti+, is not supported b the record. )hus, *boiti+ is not entitled

to the li!ited liabilit rule and is, therefore, liable for the value of the lost cargoes as so dulalleged and proven during trial.

:vents have supervened during the pendenc of the instant petitions. %n two other occasions,

the Court ruled on separate petitions involving !onetar clai!s against *boiti+ as a result of the

$&'( sin"ing

of the vessel M/V P. Aboitiz. %ne of the! is the consolidated petitions of Mo%rc# 0%). Co.* 0%c

'. Co"rt of A$$e(),4(A((ie4 G"r%tee 0%)"r%ce Com$% '. Co"rt of A$$e()4$and E5"itb(e

0%)"r%ce Cor$ortio% '. Co"rt of A$$e()4hereafter collectivel referred to as Mo%rc#

0%)"r%ce pro!ulgated on (' Hune (((. )his ti!e, the petitioners consisted of clai!ants

against *boiti+ because either the execution of the 9udg!ent awarding full inde!nification oftheir clai!s was staed or set aside or the lower courts awarded da!ages onl to the extent of

the clai!ants/ proportionate share in the insurance proceeds of the vessel.

8n Mo%rc# 0%)"r%ce, the Court dee!ed it fit to settle once and for all this factual issue b

declaring that the sin"ing of M/V P. Aboitizwas caused b the concurrence of the

unseaworthiness of the vessel and the negligence of both *boiti+ and the vessel/s crew and

!aster and not because of force m!e"re. 7otwithstanding this finding, the Court did not reverse

but reiterated instead the pronounce!ent in GAFLAC to the effect that the clai!ants be treated

as 3creditors in an insolvent corporation whose assets are not enough to satisf the totalit of

clai!s against it.34#)he Court explained that the peculiar circu!stances warranted that

procedural rules of evidence be set aside to prevent frustrating the 9ust clai!s of

shippersinsurers. )hus, the Court in Mo%rc# 0%)"r%ceordered *boiti+ to institute the

necessar li!itation and distribution action before the proper R)C and to deposit with the said

court the insurance proceeds of and the freightage earned b the ill-fated ship.
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?owever, on ( Ma ((, the Court rendered a decision inAboitiz S#i$$i%& Cor$ortio% '.

Ne6 0%4i A))"r%ce Com$%* Lt4.44Ne6 0%4i, reiterating the well-settled principle that the

exception to the li!ited liabilit doctrine applies when the da!age is due to the fault of the

shipowner or to the concurrent negligence of the shipowner and the captain. >here the

shipowner fails to overco!e the presu!ption of negligence, the doctrine of li!ited liabilit

cannot be applied.45

8n Ne6 0%4i, the Court clarified that the earlier pronounce!ent in Mo%rc#0%)"r%ce was not an abandon!ent of the doctrine of li!ited liabilit and that the circu!stances

therein still !ade the doctrine applicable.4

8n Ne6 0%4i, the Court declared that *boiti+ failed to discharge its burden of showing that it

exercised extraordinar diligence in the transport of the goods it had on board in order to invo"e

the li!ited liabilit doctrine. )hus, the Court re9ected *boiti+/s argu!ent that the award of

da!ages to respondent therein should be li!ited to its$ro rtshare in the insurance proceeds

fro! the sin"ing of M/V P. Aboitiz.

)he instant petitions provide another occasion for the Court to reiterate the well-settled doctrine

of the real and hpothecar nature of !ariti!e law. *s a general rule, a ship owner/s liabilit is

!erel co-extensive with his interest in the vessel, except where actual fault is attributable to the

shipowner. )hus, as an exception to the li!ited

liabilit doctrine, a shipowner or ship agent !a be held liable for da!ages when the sin"ing of

the vessel is attributable to the actual fault or negligence of the shipowner or its failure to ensure

the seaworthiness of the vessel. )he instant petitions cannot be spared fro! the application of

the exception to the doctrine of li!ited liabilit in view of the unani!ous findings of the courts

below that both *boiti+ and the crew failed to ensure the seaworthiness of the M/V P. Aboitiz.

!ERE"ORE, the petitions in 0.R. 7os. $$'##, $#(65 and $#6'($ are DENIED. )hedecisions of the Court of *ppeals in C*-0.R. P 7o. #5&65-C@, C*-0.R. P 7o. 4$& and

C*-0.R. C@ 7o. 4#45' are herebA""IRMED. Costs against petitioner.

SO ORDERED.
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