THIRD DIVISION
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ABOITIZ SHIPPING CORPORATION, Petitioner, - versus - |
G.R.
No. 156978 Present: Quisumbing, J., Chairperson, Carpio, Carpio Morales, Tinga, and VELASCO, JR., JJ. |
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NEW INDIA ASSURANCE COMPANY, LTD., Respondent. |
Promulgated: |
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DECISION
QUISUMBING, J.:
For review on certiorari are the Decision[1]
dated
This petition stemmed from the action
for damages against petitioner, Aboitiz Shipping Corporation, arising from the
sinking of its vessel, M/V P. Aboitiz, on
The pertinent facts are as follows:
Societe Francaise Des Colloides loaded a cargo of textiles and
auxiliary chemicals from
Before departing, the vessel was
advised by the
On
Thereafter, petitioner notified[7]
the consignee, General Textile, of the total loss of the vessel and all of its
cargoes. General Textile, lodged a claim
with respondent for the amount of its loss.
Respondent paid General Textile and was subrogated to the rights of the
latter.[8]
Respondent hired a surveyor, Perfect,
Lambert and Company, to investigate the cause of the sinking. In its report,[9]
the surveyor concluded that the cause was the flooding of the holds brought
about by the vessel’s questionable seaworthiness. Consequently, respondent filed a complaint
for damages against petitioner Aboitiz, Franco-Belgian Services and the latter’s
local agent, F.E. Zuellig, Inc. (Zuellig).
Respondent alleged that the proximate cause of the loss of the shipment
was the fault or negligence of the master and crew of the vessel, its
unseaworthiness, and the failure of defendants therein to exercise
extraordinary diligence in the transport of the goods. Hence, respondent added, defendants therein breached
their contract of carriage.[10]
Franco-Belgian Services and Zuellig responded,
claiming that they exercised extraordinary diligence in handling the shipment
while it was in their possession; its vessel was seaworthy; and the proximate
cause of the loss of cargo was a fortuitous event. They also filed a cross-claim against
petitioner alleging that the loss occurred during the transshipment with petitioner
and so liability should rest with petitioner.
For its part, petitioner also raised
the same defense that the ship was seaworthy.
It alleged that the sinking of M/V P. Aboitiz was due to an
unforeseen event and without fault or negligence on its part. It also alleged that in accordance with the
real and hypothecary nature of maritime law, the sinking of M/V P. Aboitiz extinguished
its liability on the loss of the cargoes.[11]
Meanwhile, the Board of Marine
Inquiry (BMI) conducted its own investigation to determine whether the captain
and crew were administratively liable.
However, petitioner neither informed respondent nor the trial court of
the investigation. The BMI exonerated
the captain and crew of any administrative liability; and declared the vessel
seaworthy and concluded that the sinking was due to the vessel’s exposure to
the approaching typhoon.
On
WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor of New India and against Aboitiz ordering the latter to pay unto the former the amount of P142,401.60, plus legal interest thereon until the same is fully paid, attorney’s fees equivalent to fifteen [percent] (15%) of the total amount due and the costs of suit.
The complaint with respect to Franco and Zuellig is dismissed and their counterclaim against New India is likewise dismissed
SO
ORDERED.[13]
Petitioner
elevated the case to the Court of Appeals and presented the findings of the
BMI. However, on
Hence, this petition for review, alleging
that the Court of Appeals gravely erred in:
I.
x x x DISREGARDING THE RULINGS OF THE HONORABLE SUPREME COURT ON THE APPLICATION OF THE RULE ON LIMITED LIABILITY UNDER ARTICLE 587, 590 AND 837 OF THE CODE OF COMMERCE TO CASES INVOLVING THE SINKING OF THE M/V “P. ABOITIZ;
A.
x
x x NOT APPLYING THE RULINGS IN THE CASES OF MONARCH
INSURANCE CO., INC. ET AL. V. COURT OF APPEALS ET AL. AND ABOITIZ SHIPPING CORPORATION V.
GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, LTD.;
B.
x x x RULING THAT THE ISSUE ON THE APPLICATION OF THE RULE ON LIMITED LIABILITY UNDER ARTICLES 587, 590 AND 837 OF THE CODE OF COMMERCE HAD BEEN CONSIDERED AND PASSED UPON IN ITS DECISION;
II.
x x x NOT LIMITING THE AWARD OF DAMAGES TO RESPONDENT TO ITS PRO-RATA
SHARES IN THE INSURANCE PROCEEDS FROM THE SINKING OF THE M/V “P. ABOITIZ”.[14]
Stated simply, we are asked to
resolve whether the limited liability doctrine, which limits respondent’s award
of damages to its pro-rata share in the insurance proceeds, applies in this
case.
Petitioner, citing Monarch
Insurance Co. Inc. v. Court of Appeals,
[15]
contends that respondent’s claim for damages should only be against the
insurance proceeds and limited to its pro-rata share in view of the doctrine of
limited liability.
Respondent counters that the doctrine
of real and hypothecary nature of maritime law is not applicable in the present
case because petitioner was found to have been negligent. Hence, according to respondent, petitioner
should be held liable for the total value of the lost cargo.
It bears stressing that this Court has
variedly applied the doctrine of limited liability to the same incident – the
sinking of M/V P. Aboitiz on
Our ruling in Monarch may
appear inconsistent with the exception of the limited liability doctrine, as
explicitly stated in the earlier part of the Monarch decision. An exception to the limited liability
doctrine is when the damage is due to the fault of the shipowner or to the
concurrent negligence of the shipowner and the captain. In which case, the shipowner shall be liable
to the full-extent of the damage.[19]
We thus find it necessary to clarify now
the applicability here of the decision in Monarch.
From the nature of their business and
for reasons of public policy, common carriers are bound to observe
extraordinary diligence over the goods they transport according to all the
circumstances of each case.[20] In the event of loss, destruction or
deterioration of the insured goods, common carriers are responsible, unless
they can prove that the loss, destruction or deterioration was brought about by
the causes specified in Article 1734 of the Civil Code.[21]
In all other cases, common carriers are
presumed to have been at fault or to have acted negligently, unless they prove
that they observed extraordinary diligence.[22] Moreover, where the vessel is found
unseaworthy, the shipowner is also presumed to be negligent since it is tasked
with the maintenance of its vessel.
Though this duty can be delegated, still, the shipowner must exercise
close supervision over its men.[23]
In the present case, petitioner has
the burden of showing that it exercised extraordinary diligence in the
transport of the goods it had on board in order to invoke the limited liability
doctrine. Differently put, to limit its
liability to the amount of the insurance proceeds, petitioner has the burden of
proving that the unseaworthiness of its vessel was not due to its fault or
negligence. Considering the evidence
presented and the circumstances obtaining in this case, we find that petitioner
failed to discharge this burden. It initially
attributed the sinking to the typhoon and relied on the BMI findings that it
was not at fault. However, both the trial
and the appellate courts, in this case, found that the sinking was not due to
the typhoon but to its unseaworthiness.
Evidence on record showed that the weather was moderate when the vessel
sank. These factual findings of the
Court of Appeals, affirming those of the trial court are not to be disturbed on
appeal, but must be accorded great weight. These findings
are conclusive not only on the parties but on this Court as well.[24]
In contrast, the findings of the BMI
are not deemed always binding on the courts.[25] Besides, exoneration of the vessel’s officers
and crew by the BMI merely concerns their respective administrative
liabilities.[26] It does not in any way operate to absolve the
common carrier from its civil liabilities arising from its failure to exercise
extraordinary diligence, the determination of which properly belongs to the
courts.[27]
Where the shipowner fails to overcome
the presumption of negligence, the doctrine of limited liability cannot be
applied.[28] Therefore, we agree with the appellate court
in sustaining the trial court’s ruling that petitioner is liable for the total
value of the lost cargo.
WHEREFORE, the
petition is DENIED for lack of merit. The Decision
dated
Costs against petitioner.
SO ORDERED.
LEONARDO
A. QUISUMBING
Associate Justice
WE CONCUR:
CONCHITA
CARPIO MORALES DANTE O.
TINGA
PRESBITERO J. VELASCO, JR.
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
LEONARDO A. QUISUMBING
Associate
Justice
Chairperson
C E R T I F I C A T I O N
Pursuant to Section 13, Article VIII
of the Constitution and the Division Chairperson’s Attestation, I certify that
the conclusions in the above decision had been reached in consultation before
the case was assigned to the writer of the opinion of the Court’s Division.
ARTEMIO
V. PANGANIBAN
Chief Justice
[1] Rollo, pp. 84-97. Penned by Associate Justice Romeo J. Callejo, Sr. (now a member of this Court), with Associate Justices Remedios Salazar-Fernando, and Danilo B. Pine concurring.
[2]
[3]
[4]
[5]
[6]
[7] Exhibit “F-1,” folder of exhibits, p. 8.
[8] Exhibits “G, G-1, G-2,”
[9] Records, pp. 562-580.
[10]
[11]
[12] CA-G.R. C.V. No. 10609,
[13] Records, p. 859.
[14] Rollo, pp. 68-69.
[15] G.R. No. 92735,
[16]
[17]
[18]
[19]
[20] Civil
Code, Art. 1733. Common carriers,
from the nature of their business and for reasons of public policy, are bound
to observe extraordinary diligence in the vigilance over the goods and for the
safety of the passengers transported by them, according to all the
circumstances of each case.
Such extraordinary diligence in the vigilance
over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5,
6, and 7, while the extraordinary diligence for the safety of the passengers is
further set forth in articles 1755 and 1756.
[21]
(1) Flood,
storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act
of the public enemy in war, whether international or civil;
(3) Act
or omission of the shipper or owner of the goods;
(4) The
character of the goods or defects in the packing or in the containers;
(5) Order
or act of competent public authority.
[22]
[23] Philippine
American General Insurance Co., Inc. v. Court of Appeals, G.R.
No. 116940, June 11, 1997, 273 SCRA 262, 272.
[24] Prudential Bank v. Chonney Lim, G.R.
No. 136371, November 11, 2005, p. 5.
[25] See Aboitiz Shipping Corporation v. Court
of Appeals, G.R. No. 89757,
[26] Delsan Transport Lines, Inc. v. Court of Appeals, G.R. No. 127897, November 15, 2001, 369 SCRA 24, 33.
[27]
[28] Central
Shipping Company, Inc. v. Insurance Company of North America, G.R. No.
150751, September 20, 2004, 438 SCRA 511, 523-524.