TRANSPORTATION LAWSCASE DIGESTS – FIRST SET Luque V. Villegas JG Summit Holdings, Inc., V. CA Kmu Labor Center V. Garcia SULPICIO LINES CASES Caltex V. Sulpicio Lines, Inc. Sulpicio V. CA Sulpicio Lines, Inc. V. First Lepanto-Taisho Insurance Corporation Sulpicio Lines, Inc. V. Curso ABOITIZ CASES Aboitiz Shipping Corporation vs CA Aboitiz Shipping Corp vs General Fire And Life Assurance Corp Aboitiz Shipping Corporation vs New India Assurance Company, Ltd., LUQUE VS VILLEGAS Facts: Petitioners ( who are passengers from Cavite and Batangas who ride on buses to and from their province and Manila) and some public service operators of buses and jeeps assail the validity of Ordinance 4986and Administrative Order 1. should the NIDC opt to sell its shares of stock to a third party. Neither shall any such franchise or right be granted except under the condition that it shall be subject to amendment. 2. . and is a mere license or privilege. HELD:No. The State shall encourage equity participation in public utilities by the general public. 2000 FACTS: National Investment and Development Corporation (NIDC) and Kawasaki Heavy Industries entered into a Joint Venture Agreement in a shipyard business named PHILSECO. INC. City of Manila. they can only do so to the extent allowed them by paragraphs 1. Traffic congestion has moved from worse to critical.. there is a need to regulate the operation of public services. beyond the perimeter of Greater Manila. NIDC’s interest was later transferred to the National Government. certificate. there is nothing to prevent its purchase of stocks even beyond 60% of the capitalization as the Constitution clearly limits only foreign capitalization.4 of the JVA accorded the parties the right of first refusal “under the same terms. or repeal by the Congress when the common good so requires.5. and allowed for the disposition of the government’s non-performing assets.” Notably. Petitioner's Certificate of Public Convenience was issued subject to the condition that operators shall observe and comply with all the rules and regulations of the PSC relative to PUB service.2 and 1. a CPC constitutes neither a franchise nor a contract. to top the winning bid of JG Summit Holdings over PHILSECO.” This phrase implies that when either party exercises the right of first refusal under paragraph 1. the following provision of the Article XII of the Constitution applies: “Sec. The purpose of the ban is to minimize the problem in Manila and the traffic congestion. or authorization be exclusive in character or for a longer period than fifty years. Held: 1. Whether or not the said regulations are valid. paragraph 1. No franchise. JG SUMMIT HOLDINGS. Thus. vs. nor does it confer upon the holder any proprietary right/interest/franchise in the public highways. A shipyard such as PHILSECO being a public utility as provided by law. confers no property right. Kawasaki could only exercise its right of first refusal to the extent that its total shares of stock would not exceed 40% of the entire shares of stock of SNS or PHILSECO. As far as the State is concerned. and all the executive and managing officers of such corporation or association shall be citizens of the Philippines. Whether or not Ordinance 4986 destroys vested rights to operate in Manila. Administrative Order 1 issued by Commissioner of Public Service states that all jeeps authorized to operate from Manila to any point in Luzon. certificate. JG Summit protested alleging that such act would effectively increase Kawasaki’s interest in PHILSECO—a shipyard is a public utility–and thus violative of the Constitution. may purchase even beyond 60% of the total shares. 11. As a government corporation and necessarily a 100% Filipino-owned corporation. Pursuant to President Aquino’s Proclamation No. Both Ordinance 4986 and AO 1 fit into the concept of promotion and regulation of general welfare. alteration.3 of the JVA or under the proportion of 60%-40% of the shares of stock. they have already acquired a vested right to operate. NO! A vested right is some right or interest in the property which has become fixed and established and is no longer open to doubt or controversy. on the other hand. Ordinance 4986 states that PUB and PUJs shall be allowed to enter Manila only from 6:30am to 8:30pm every day except Sundays and holidays. Issue: 1. It is no argument that the passengers enjoyed the privilege of having been continuously transported even before outbreak of war. with a shareholding of 60-40 respectively. The alleged right is dependent upon the manner public services are allowed to operate within a given area. Petitioners contend that since they possess a valid CPC. Neither do bus passengers have a vested right to be transported directly to Manila. the latter allowed Kawasaki Heavy Industries to choose a company to which it has stockholdings. which established the Committee on Privatization (COP) and Asset Privatization Trust (APT). shall carry the words "For Provincial Operation". CA November 20. Times have changed and vehicles have increased. nor shall such franchise. 2. Hence. or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens. The NIDC. The holder does not acquire a property right in the route covered. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital.4. delays and accidents resulting from the free entry into the streets of Manila and the operation around said streets. ISSUE: Whether or not respondents’ act is valid. YES! Using the doctrine in Lagman vs. This meant that provincial bus fares were rolled back to the levels duly authorized by the LTFRB prior to March 16. Remedios A. over and above the existing authorized fare without having to file a petition for the purpose. and the order dated March 24. On February 13. KMU has a locus standi (or ability of a party to demonstrate to the court sufficient connection to and harm from the law or action challenged to support that party’s participation in the case) which is inherent in the Section 1 of Article VIII of the Constitution provides: Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable. collided in the open sea with passenger ship MV Doña Paz. and a public hearing be held. . Second. 1988. Pete Nicomedes Prado issued Department Order No 92-587 defining the framework on the regulation of transport services. The Memo read as “is the liberalization of regulations in the transport sector and to move away gradually from regulatory policies and make progress towards greater reliance to market forces:” Chairman Fernando informed Sec. INC. Jose B. 90-395 to Land Transportation Franchising and Regulatory Board (LTFRB) Chairman. later increased to plus twenty (20%) and minus twenty-five (-25%) percent.S. Jr. the establishment of a presumption of public need in favor of an applicant for a proposed transport service without having to prove public necessity is illegal for being violative of the Public Service Act and the Rules of Court and petitions before the LTFRB. First. On March 22. memoranda and/or orders declared invalid. 1990 LTFRB released a fare schedule based on a straight computation. Orbos that the Memo is not legally feasible and recommended for further studies because (1) under Public Service Act rates should be approved by public service operators. Garcia. on June 20. 1994 is hereby MADE PERMANENT insofar as it enjoined the bus fare rate increase granted under the provisions of the aforementioned administrative circulars. NO. carrying petroleum products of Caltex. SULPICIO LINES CASES CALTEX VS. WHEREFORE. 1994 franchises for the operation of buses. 1992 DOTC Sec. invalid and illegal. and (4) DOTC should consider reforms that will be uplifting after the earthquake. 1994. Orbos issued Memorandum Circular No. 92-009. Facts: On December 20. and (b) creating a presumption of public need for a service in favor of the applicant for a certificate of public convenience and placing the burden of proving that there is no need for the proposed service to the oppositor. and the LTFRB asseverate that the petitioner does not have the standing to maintain the instant suit. On March 30. prohibiting and preventing respondents from implementing the bus fare rate increase as well as the questioned orders and memorandum circulars. The Court. 92-587 that laid down the deregulation and other liberalization policies for the transport sector. On December 14.KMU LABOR CENTER V. A moratorium was likewise enforced on the issuance of ISSUE:Are the petitioners have the right to petition of this case? Whether or not the fare adjustment is constitutional? HELD: (1) YES. On December 5. is unconstitutional. (PBOAP) filed an application for fare rate increase. 1990 the Provincial Bus Operators Association of the Philippines. the instant petition is hereby GRANTED and the challenged administrative issuances and orders. Kilusang Mayo Uno anchors its claim on two (2) grounds. On March 16. 23. 1994. in view of the foregoing. jeepneys. 1993 DOTC Secretary Jesus B. and taxicabs. (2) it was untimely due to an earthquake happened on July 16. Fernando that will allow provincial bus operators to charge passengers rates within a range of 15% above and 15% below the LTFRB official rate for a period of one (1) year to be implemented on August 6. (3) it will trigger upward adjustment in bus fares especially in trips bound for Northern Luzon. Then on October 8. LTFRB issued on February 17. Inc. LTFRB Memorandum Circular No. Garcia issued a memorandum to LTFRB for the swift action on the adoption of the rules and procedures to implement Department Order No. 1992 DOTC Sec. LTFRB dismissed because of lack of merit. 1987. there should be publication and notice especially to affected sectors. issued a temporary restraining order enjoining. namely: DOTC Department Order No. They further claim that it is within DOTC and LTFRB’s authority to set a fare range scheme and establish a presumption of public need in applications for certificates of public convenience. the board of marine inquiry found that Vector Shipping Corporation was at fault. 1994 issued by respondent LTFRB are hereby DECLARED contrary to law and invalid insofar as they affect provisions therein (a) delegating to provincial bus and jeepney operators the authority to increase or decrease the duly prescribed transportation fares. 1994. Among those who died were Sebastian Canezal and his daughter Corazon Canezal. SULPICIO LINES. motor tanker MV Vector. FACTS: Department of Transportation and Communication (DOTC) Secretary Oscar M. causing the death of all but 25 of the latter’s passengers. the authority given by respondent LTFRB to provincial bus operators to set a fare range of plus or minus fifteen (15%) percent. 92-587. 1990. GARCIA DEC. The Temporary Restraining Order issued on June 20. and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the Government. shippers of goods. Held: Third: Is Caltex liable for damages under the Civil Code? First: The charterer has no liability for damages under Philippine Maritime laws. In both cases. in consideration of the payment of freight. while in transit. passengers and shippers alike customarily presume that common carriers possess all the legal requisites in its operation. thus violating his duty to exercise extraordinary diligence in the carrying of passengers safely to their destination October 24. bringing with them several pieces of luggage. A contract of affreightment may be either time charter. the charter-party provides for the hire of the vessel only.M. is let by the owner to another person for a specified time or use. 16 MT Vector fits the definition of a common carrier under Article 1732 of the Civil Code. the rights and the responsibilities of ownership rest on the owner. be the property of the charterer. 3 by 10 P. Such a practice would be an absurdity in a business where time is always of the essence. pay for the wages of the master of the crew. also known as a voyage charter. although her holds may. Petitioner and Vector entered into a contract affreightment. genuineness of its licenses and compliance with all maritime laws. SULPICIO V. and defray the expenses for the maintenance of the ship. or some principal part thereof. as in a bareboat or demise that a common carrier becomes private. It is imperative that a public carrier shall remain as such. which retains the character of the vessel as a common carrier. Indubitably. Cañezal. remunerate him. of October 23. The duty rests upon the common carrier simply for being engaged in "public service. Issue:Is the charterer of a sea vessel liable for damages resulting from a collision between the chartered vessel and a passenger ship? The public must of necessity rely on the care and skill of common carriers in the vigilance over the goods and safety of the passengers. filed with the Regional Trial Court of Manila a complaint for damages arising from breach of contract of carriage against Sulpicio Lines. The parties entered into a voyage charter. transportation has become more rapid.1989. wherein the ship is leased for a single voyage. a contract of affreightment is one by which the owner of a ship or other vessel lets the whole or part of her to a merchant or other person for the conveyance of goods. but the Court of Appeals included the same in the liability. encountered inclement weather which caused huge waves due to Typhoon Unsang. The charterer is free from liability to third persons in respect of the ship. Second: MT Vector is a common carrier The charter party agreement did not convert the common carrier into a private carrier. when transacting with common carriers. 1995 Lessons Applicable: Exceptions to Contracting Parties FACTS: October 23. wherein the leased vessel is leased to the charterer for a fixed period of time. a ship-owner in a time or voyage charter retains possession and control of the ship. more complicated and somehow more hazardous. 2 had been raised by the PAG-ASA authorities over Leyte as early as 5:30 P. Sebastian Cañezal’s wife and mother respectively. as in the case of a timecharter or voyage charter. The trial court dismissed the complaint against Caltex. for the moment. Manila. If the charter is a contract of affreightment. a passenger or a shipper of goods is under no obligation to conduct an inspection of the ship and its crew. Considering the nature of transportation business. Caltex filed this petition. 1988: Tito Duran Tabuquilde (Tito) and his 3-year old daughter Jennifer Anne (Anne) boarded the M/V Dona Marilyn at North Harbor. It is only when the charter includes both the vessel and its crew. on a particular voyage. which leaves the general owner in possession of the ship as owner for the voyage. the carrier being obliged by law to impliedly warrant its seaworthiness. the ship owner to supply the ship’s store. provided the charter is limited to the ship only. Angelina Tabuquilde contacted the Sulpicio Office to verify radio reports that the vessel M/V Dona Marilyn was missing Sulpicio Lines assured her that the ship was merely "hiding" thereby assuaging her anxiety . CA July 14. at least insofar as the particular voyage covering the charter-party is concerned. Storm Signal No. are not expected to inquire into the vessel’s seaworthiness. A common carrier is a person or corporation whose regular business is to carry passengers or property for all persons who may choose to employ and to The charterer of a vessel has no obligation before transporting its cargo to ensure that the vessel it chartered complied with all legal requirements. Sulpicio filed a third-party complaint against Vector and Caltex. To demand more from shippers and hold them liable in case of failure exhibits nothing but the futility of our maritime laws insofar as the protection of the public in general is concerned. notwithstanding the charter of the whole or portion of a vessel by one or more persons. 1988 morning: M/V Dona Marilyn. Hence. especially because with the modern development of science and invention. 1988 and which signal was raised to Signal No. of A charter party is a contract by which an entire ship.M ship captain ordered the vessel to proceed to Tacloban when prudence dictated that he should have taken it to the nearest port for shelter. Teresita Cañezal and Sotera E. either for a determinate period of time or for a single or consecutive voyage. For these reasons." The relationship between the parties in this case is governed by special laws. Because of the implied warranty of seaworthiness. or voyage charter. 00 as actual damages for the loss of the contents of the pieces of baggage is deleted and that the award of P30. Court of Appeals is AFFIRMED with the MODIFICATION that the award of P27. or returning to the port of Manila which is nearer. on 24 February 1992. Respondent-insurer paid the claim less thirty-five percent (35%) salvage value or P194. . for Delbros. engaged the services of the vessel M/V Philippine Princess. throwing Tito and Anne. fraudulent and reckless manner The crew assumed a greater risk when. During the unloading of the shipment. moral damages may be recovered when it results in the death of a passenger With respect to the award of exemplary damages. dismissing the complaint for damages for failure of the plaintiff to prove its case with a preponderance of evidence.00 as exemplary damages P50. owned and operated by petitioner Sulpicio Lines. P30. Inc. Inc. 1988 2:00 P.580. (shipper) entered into a contract. Thereafter.00 under Article 2206 in relation Article 1764 is increased to P50. . . There is no showing that the value of the contents of the lost pieces of baggage was based on the bill of lading or was previously declared by Tito before he boarded the ship Article 2206 of the Civil Code of the Philippines: only deaths caused by a crime as quasi delict are entitled to actual and compensatory damages without the need of proof of the said damages The amount of damages for death caused by a crime or quasi delict shall be at least Three Thousand Pesos.000. the owner of the goods sought payment from respondent First LepantoTaisho Insurance Corporation (insurer) under a marine insurance policy issued to the former.31. (owner of the goods) and Delbros. 1988: Tito and other survivors in the Almagro Island were fetched and were brought to Tacloban Medical Center for treatment October 31. Branch XIV. With respect to the award of moral damages. The owner of the goods filed a claim with herein petitionercarrier for the recovery of the value of the rejected cargo which was refused by the latter. the general rule is that said damages are not recoverable in culpa contractual except when the presence of bad faith was proven in breach of contract of carriage. they were rejected as a total loss and returned to Cebu City. Tito tried to keep himself and his daughter afloat but to no avail as the waves got stronger and he was subsequently separated from his daughter despite his efforts. Inc. but failed Angelina tried to seek the assistance of the Sulpicio Lines in Manila to no avail Angelina spent sleepless nights worrying about her husband and daughter in view of the refusal of Sulpicio Lines to release a verification of the sinking of the ship October 26.00. Ltd. vs. The owner of the goods examined the dropped cargo.: vessel capsized.00 as attorney's fees.00 for the death of Anne P100. evidenced by Bill of Lading No. into the sea.000.000. October 25. Article 2232 of the Civil Code of the Philippines gives the Court the discretion to grant said damages in breach of contract when the defendant acted in a wanton. October 24.00 as moral damages P50. (carrier). instead of dropping anchor in or at the periphery of the Port of Calapan. Assailed as well is the Resolution3 of the Court of Appeals denying petitioner’s Motion for Reconsideration. and costs ISSUE: W/N Tito has a right to recover damage for his lost belongings HELD: NO. Inc.000. to transport a shipment of goods consisting of three (3) wooden crates containing one hundred thirty-six (136) cartons of inductors and LC compound on board the V Singapore V20 from Cebu City to Singapore in favor of the consignee.: He found himself on Almagro Island in Samar He immediately searched for his daughter among the survivors in the island. along with hundreds of passengers.M. The vessel arrived at the North Harbor.580 Trial Court: in favor of Tito actual damages. Deducing alone from said provision.000.M. 1988: Tito filed a claim for damages against Sulpicio Lines for the death of Anne and the loss of his belongings worth P27. CEB/SIN-008/92 issued by the latter in favor of the owner of the goods. FACTS: On 25 February 1992.000. even though there may have been mitigating circumstances. INC. FIRST LEPANTO-TAISHO INSURANCE CORPORATION (full text) Before Us is a Petition for Review on Certiorari assailing the Decision1 of the Court of Appeals reversing the Decision2 of the Regional Trial Court (RTC) of Manila. Manila. 1988: Tito reported the loss of his daughter and was informed that the corpse of a child with his daughter's description had been found Tito wrote a letter to his wife. Inc. . Delbros. 1988: coffin bearing the corpse of Anne was buried November 24. one can conclude that damages arising from culpa contractual are not compensable without proof of special damages sustained by the heirs of the victim. proceeded on its voyage on the assumption that it will be able to beat and race with the typhoon and reach its destination before it (Unsang) passes SULPICIO LINES. For the carriage of said shipment from Cebu City to Manila. 1988 11:00 A. and upon an alleged finding that the contents of the crate were no longer usable for their intended purpose. 220. Taiyo Yuden Singapore Pte. Taiyo Yuden Philippines. one crate containing forty-two (42) cartons dropped from the cargo hatch to the pier apron. reporting the sad fact that Jennifer Anne was dead Angelina suffered from shock and severe grief upon receipt of the news November 3. Bill of Lading. and petitioner-carrier Sulpicio Lines. there is damage suffered by the goods of the shipper.31 representing actual damages. that he. the decretal portion of which reads: WHEREFORE. petitioner-carrier filed its Answer with Counterclaim. respondent-insurer filed a suit for damages docketed as Civil Case No.4 A Motion for Reconsideration was then filed by herein respondent-insurer and subsequently denied by the trial court in an Order dated 07 February 1995 on the ground that it did not raise any new issue. Inc. he said that two cartons were torn at the sides with top portion flaps opened and the 41 cartons were properly sealed and in good order conditions. the evidence shows that one of the three crates fell during the unloading at the pier in Manila. before the shipment reached Singapore (while it was in Manila) one crate and 2 cartons contained therein were not anymore in their original state. alleging that assuming the contents of the crate in question were truly in bad order. ….’s cross-claim. Claims Statement. They were no longer fit to be sent to Singapore. They were torn at the sides and their top portions or flaps were open. Marine Policies. except that "2 cello bags each of 50 pieces ferri inductors No. Delbros.WHEREFORE.As We have already found. they are in good order and condition and are supposed to be transported and delivered to the consignee in the same state. the trial court dismissed the complaint for damages as well as the counterclaim filed by therein defendant Sulpicio Lines. Inc. Survey Report. …. jointly and severally. This testimony is hearsay. Upon examination. However. judgment is hereby rendered dismissing the Complaint. Defendant-appellee Sulpicio Lines admits that this crate fell . in view of the foregoing considerations. Inc. filed on 15 April 1993 its Answer with Counterclaim and Cross-claim. The first witness for the plaintiff merely testified about the payment of the claim based on the documents accompanying the claim which were the Packing List. defendant Sulpicio Lines’ counterclaim and defendant Delbros Inc. These facts were admitted by all the parties. respondent-insurer then filed claims for reimbursement from Delbros. When the goods are placed at a common carrier’s possession for delivery to a specified consignee. The wooden crate which fell was damaged such that this particular crate was not anymore sent to Singapore and was instead shipped back to Cebu from Manila. Inc.’s crossclaim asserting that it observed extraordinary diligence in the handling. for delivery to the consignee in Singapore. On 04 November 1992. 92-63337 with the trial court against Delbros. From the foregoing evidence. Marine Risk Note. This theory is erroneous. Defendant-appellees. fault is with herein petitioner-carrier which was responsible for the unloading of the crates. Arturo Valdez. Inc. Defendants-appellees Delbros and Sulpicio Lines are hereby ordered to pay. Two cartons were already opened and slightly damaged. Inc. and the cross-claim filed by Delbros. and petitioner-carrier. The check was paid and delivered to the assured as evidenced by the check voucher and the subrogation receipt. What he was referring to as slightly damaged were the cartons only and not the contents." After hearing. it was found that two (2) cartons of the fortytwo (42) cartons contained in this crate were externally damaged. He merely looked at them but did not conduct an inspection of the contents. and the letter to Third Party carriers and shipping lines (Exhibit A-J). Thus. On cross-examination. among others.5 The appellate court disposed of the issues in the case in this wise: Furthermore. and that there was no actual damage to the goods such that would make them liable to the shipper. On 05 February 1993.The payment of the insurance claim of the owner of the goods by the respondent-insurer subrogated the latter to whatever right or legal action the owner of the goods may have against Delbros. insist that it was only the external packaging that was damaged. which were subsequently denied. Inc. He prepared a survey report (Exhibits G and G-1) and took a picture of shipment (Exhibit G-2). the goods were received by defendant-appellee Delbros in Cebu properly packed in cardboard cartons and then placed in wooden crates. Inc. Petitioner-carrier filed its Answer to Delbros. respondent-insurer instituted an appeal with the Court of Appeals. Inc. On cross-examination by counsel for the Sulpicio Lines. together with a co-surveyor and a representative of Sulpicio Lines had conducted a survey of the shipment at the compound of Sulpicio Lines. it is apparent that the plaintiff had failed to prove its case with a preponderance of evidence. LC FL 112270K-60 (c) were unaccounted for and missing as per packaging list. The second witness for the plaintiff. Commercial Invoices. and herein petitioner-carrier. The decision appealed from is REVERSED. which reversed the dismissal of the complaint by the lower court. Sulpicio Lines. plaintiff-appellant the sum of P194. however. According to the RTC: The plaintiff has failed to prove its case. This consists in the destruction of one wooden crate and the tearing of two of the cardboard boxes therein rendering then unfit to be sent to Singapore. testified.220. plus legal interest counted from the filing of the complaint until fully paid. storage and general care of the shipment and that subsequent inspection of the shipment by the Manila Adjusters and Surveyors Company showed that the contents of the third crate that had fallen were found to be in apparent sound condition. In the case herein. the appeal is granted. he said that their company paid the claim less 35% salvage value based on the adjuster report. Thus. indeed. RULING We shall first address the procedural issue raised by petitioner-carrier. the Court of Appeals required herein respondent-insurer to submit seven (7) copies of the questioned decision within five (5) days from notice. Nevertheless. Inc. this Court has allowed the filing of an appeal upon subsequent compliance with the requirements imposed by law. filed a manifestation stating that its appeal7 filed before this Court had been dismissed for being filed out of time and thus the case as against it was declared closed and terminated.. therefore. Diaz [336 SCRA 113] and Piglas-Kamao vs. Defendant-appellee Sulpicio Lines cannot exculpate itself from liability because it failed to prove that it exercised due diligence in the selection and supervision of its employees to prevent the damage. however. herein petitioner-carrier Sulpicio Lines.while it was being unloaded at the Manila pier. Inc. Delbros. As enunciated by the Court in the case of Jaro v. resulted in damages on the part of the owner of the goods. It must be stressed that in the case at bar. Inc. herein petitioner-carrier filed its Motion for Reconsideration of the decision of the Court of Appeals which was subsequently denied in a Resolution dated 13 October 1999. the owner of the goods. Falling of the crate was negligence on the part of defendant-appellee Sulpicio Lines under the doctrine of res ipsa loquitur. albeit belatedly.12 The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence. Sulpicio Lines. the diligence of a good paterfamilias established in respect of the ordinary relations between members of society. for whatever it had paid to respondent-insurer in consonance with the decision of the appellate court declaring both Delbros. In Cusi-Hernandez vs. Said Resolution was properly complied with. on the part of the Court of Appeals when it gave due course to the appeal after respondent-insurer had submitted copies of the RTC decision. Inc. respondent-insurer’s predecessor-in-interest. or indemnity from its codefendant. The Court of Appeals erred in not dismissing the appeal for failure of appellant to comply with the technical requirement of the Rules of Court. and petitioner-carrier Sulpicio Lines. that in a Resolution9 dated 13 August 1996. ISSUES Petitioner-carrier raises the following issues in its petition: 1. Inc. We now come to the substantial issues alleged by petitionercarrier. The Court of Appeals erred in not holding that the trial court justly and correctly dismissed the complaint against Sulpicio Lines. i. whether or not petitioner-carrier is liable for the same. Court of Appeals There is ample jurisprudence holding that the subsequent and substantial compliance of an appellant may call for the relaxation of the rules of procedure. the right to appeal is a statutory right and one who seeks to avail of that right must comply with the manner required by the pertinent rules for the perfection of an appeal. which dismissal is already final.8 A perusal of the records will show. Neither is it impugned that upon inspection. As a rule. As a common carrier. contribution.6 On 21 June 1999. During the pendency of the appeal before this Court. Inc. 2. Section 13(h) of the Rules of Civil Procedure. if any. the damage sustained by the packaging of the cargo while in petitioner-carrier’s custody resulted in its unfitness to be transported to its consignee in Singapore. that the Court of Appeals should have dismissed the appeal for failure of respondent-insurer to attach a copy of the decision of the trial court to its appellant’s brief in violation of Rule 44.13 A common carrier is bound to transport its cargo and its . did incur damages. it paid in full the amount of the damages awarded by the appellate court to the respondent-insurer.e. The pivotal question to be considered in the resolution of this issue is whether or not. Before this Court. It is not disputed that one of the three (3) crates did fall from the cargo hatch to the pier apron while petitioner-carrier was unloading the cargo from its vessel. Hence. and if so. prays for reimbursement. It cannot be denied that the shipment sustained damage while in the custody of petitioner-carrier. each of 50 pieces ferri inductors. damage to the packaging is not tantamount to damage to the cargo. where a strict application of the technical rules will impair the proper administration of justice. According to it. Such failure to ship the cargo to its final destination because of the ruined packaging. it is expected to observe extraordinary diligence in the handling of goods placed in its possession for transport. As a consequence. it was found that two (2) cartons were torn on the side and the top flaps were open and that two (2) cello bags. Delbros. The reasons behind the failure of the petitioners in these two cases to comply with the required attachments were no longer scrutinized. National Labor Relations Commission [357SCRA 640]. The falling of the crate during the unloading is evidence of petitioner-carrier’s negligence in handling the cargo. we ruled that the subsequent submission of the missing documents with the motion for reconsideration amounts to substantial compliance.11 We see no error. Petitioner-carrier contends that its liability. were missing from the cargo. is only to the extent of the cargo damage or loss and should not include the lack of fitness of the shipment for transport to Singapore due to the damaged packing. the instant petition. based on the evidence presented during the trial. Petitioner-carrier seems to belabor under the misapprehension that a distinction must be made between the cargo packaging and the contents of the cargo. This is erroneous. jointly and severally liable. and to exercise due care in the handling and stowage. in case the decision in the instant case be adverse to petitioner-carrier. Dr. Coming now to the issue of the extent of petitioner-carrier’s liability. Inc. or destruction of. the MV Doa Marilyn sank in the afternoon of October 24. the assailed Decision of the Court of Appeals dated 26 May 1999 and its Resolution dated 13 October 1999 are hereby AFFIRMED."14 The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding the damage to. so that he who is substituted succeeds to the rights of the other in relation to a debt or claim.. 1988. including its remedies or securities. there was damage suffered by the goods which consisted in the destruction of one wooden crate and the tearing of two (2) cardboard boxes therein which rendered them unfit to be sent to Singapore.26 The falling of the crate was negligence on the part of Sulpicio Lines. has no personality before this Court. INC. for which it cannot exculpate itself from liability because it failed to prove that it exercised extraordinary diligence. bound for Tacloban City.23 In other words. paid P194. may institute against petitioner-carrier Sulpicio Lines. destruction or deterioration of goods under Article 1735.31 to respondent-insurer in satisfaction of the whole amount of the judgment rendered by the Court of Appeals. with due regard to all circumstances. Unfortunately. using the utmost diligence of a very cautious person. Notwithstanding. WHEREFORE.22 The rights to which the subrogee succeeds are the same as.’s prayer contained in its manifestation that. a subrogee cannot succeed to a right not possessed by the subrogor. the common carrier must prove that they observed extraordinary diligence as required in Article 173319 of the Civil Code. Curso upon a finding that force majeure had caused the sinking. those of the person for whom he is substituted. vs CURSO March 17. To overcome the presumption of liability for loss.24 A subrogee in effect steps into the shoes of the insured and can recover only if the insured likewise could have recovered. petitioner-carrier is presumed to have been negligent in the handling of the damaged cargo.27 Thus. Curso boarded at the port of Manila the MV Doa Marilyn.passengers safely "as far as human care and foresight can provide. including such methods as their nature requires. Petitioner-carrier miserably failed to adduce any shred of evidence of the required extraordinary diligence to overcome the presumption that it was negligent in transporting the cargo."16 As found by the Court of Appeals. that is. as common carrier. common carriers are presumed to have been at fault or to have acted negligently in case the goods transported by them are lost. Inc. respondent-insurer had already been paid the full amount granted by the Court of Appeals. it is undisputed that respondent-insurer paid the owner of the goods under the insurance policy the amount of P194. With respect to Delbros.25 Hence. Inc. but not greater than. Inc.. The CA awarded moral and other damages to the surviving brothers and sisters. Neither is there dispute as to the fact that Delbros.20 As stated in the manifestation filed by Delbros. Inc. Inc. the insurer is entitled to be subrogated pro tanto to any right of action which the insured may have against the common carrier whose negligence or wrongful act caused the loss. an inter-island vessel owned and operated by petitioner Sulpicio Lines.15 It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment. a pronouncement as to the matter of reimbursement. 2010 (full text) Are the surviving brothers and sisters of a passenger of a vessel that sinks during a voyage entitled to recover moral damages from the vessel owner as common carrier? This is the question presented in the appeal taken by the common carrier from the reversal by the Court of Appeals (CA) of the decision of the Regional Trial Court (RTC) dismissing the complaint for various damages filed by the surviving brothers and sisters of the late Dr. Under Articles 173517 and 175218 of the Civil Code.. it will be tantamount to unjust enrichment for respondent-insurer to again recover damages from herein petitioner-carrier. destroyed or had deteriorated. liable for the damages suffered by the owner of the goods? Upon respondent-insurer’s payment of the alleged amount of loss suffered by the insured (the owner of the goods). Cenon E. indemnification or contribution in favor of Delbros. with respect to the damages the latter is liable to pay. this shall not bar any action Delbros. we uphold the ruling of the appellate court that herein petitioner-carrier is liable to pay the amount paid by respondent-insurer for the damages sustained by the owner of the goods. FACTS: On October 23.220. security or remedy the subrogor did not have. it not being a party to the instant case. he cannot acquire any claim. No costs. The question then is: To what extent is Sulpicio Lines.31 for the alleged damages the latter has incurred. when the shipment suffered damages as it was being unloaded. premises considered. be included in the decision. the goods entrusted to it for safe carriage and delivery. Inc. Inc. this Court will not pass upon said issue since Delbros. Inc. SULPICIO LINES. however. hence.21 Subrogation is the substitution of one person in the place of another with reference to a lawful claim or right. Inc. 1988 while at sea due to the inclement sea and weather conditions brought about by .220. Furthermore. Doa Marilyn. Doa Marilyn.924. The fact that the stud bolts in the ships hydraulic system gave way while the ship was at sea discredits the theory that the appellee exercised due diligence in maintaining the seaworthy condition of the M..000. resulting in his untimely death. at their own cost. (d) expenses of litigation of at least P50. and crew of any negligence and administrative liability.Typhoon Unsang. (b) in not holding that the petitioner was negligent and did not exercise the required diligence and care in conducting Dr.V. B-0851. bearing upon the general direction of the path of the M. 08-88. and that after the accident it conducted intensive search and rescue operations and extended assistance and aid to the victims and their families. then such a mishap would not have occurred. Plaintiffs were unable to recover the body of their brother. xxx. that the sinking of the vessel and the death of its passengers. finding the defendant-appellee Sulpicio Lines. that there was no basis to consider the MV Doa Marilyn not seaworthy at the time of the voyage.[2] Based on the events described by the appellees witness. Inc. the court finds inadequate explanation why the officers of the M. Curso to his destination. . or its officers and crew. 2002.V. as follows: (a) compensatory damages of P1. and employed as a resident physician at the Naval District Hospital in Naval. and would have retired from government service by December 20. there was no account of the acts and decision of the crew of the ill-fated ship from 8:00 PM on October 23. the ships hydraulic system failed and had to be repaired mid-voyage.. The body of Dr.[1] They prayed for judgment. In lieu thereof. and had acted promptly and competently to avoid the same. and (d) in not awarding damages to them.00.[4] xxx Aside from these.[3] the CA held and disposed: On January 21. Furthermore. It averred that the MV Doa Marilyn was seaworthy in all respects. the defendant must compensate the plaintiffs for moral damages that they suffered as a result of the negligence attending the loss of the M. sued the petitioner in the RTC in Naval. He had a basic monthly salary of P3. the Court doubts the fitness of the ship for the voyage. Branch 16. Ruling of the CA The respondents appealed to the CA. while suffering great grief due to the loss of a loved one. which exempted a common carrier from liability. The RTC concluded that the officers of the MV Doa Marilyn had acted with the diligence required of a common carrier. It does not appear what occurred during that time. including Dr. 1995. or what weather reports were received and acted upon by the ship captain. Typhoon Unsang). Curso.940. Biliran. (c) in not finding that the MV Doa Marilyn was unseaworthy at the time of its sinking. Doa Marilyn. At the time of his death. Ruling of the RTC On July 28. Plaintiffs. If the officers and crew of the Doa Marilyn had indeed been adequately monitoring the strength and direction of the typhoon. in vain.V.000.000. Curso was 48 years old. It is part of the appellees extraordinary diligence as a common carrier to make sure that its ships can withstand the forces that bear upon them during a voyage. the Court found inadequate proof to show that Sulpicio Lines. rendered in Civil Case No. the RTC dismissed the complaint upon its finding that the sinking of the vessel was due to force majeure. have established that they took great pains to recover. Curso.e. is hereby SET ASIDE. and was in fact cleared by the Philippine Coast Guard for the voyage. who died single and without issue. the body of their brother. and that the respondents failed to prove their claim for damages. The petitioner denied liability. Doa Marilyn. that the findings of the Special Board of Marine Inquiry (SBMI) constituted to investigate the disaster absolved the petitioner. Curso who was on board the ill-fated M. 1993.V.00. Dr. 1988 when the Chief Mate left his post until 4:00 AM the next day when he resumed duty. Cursos surviving heirs and successors in interest entitled to recover moral and other damages. Biliran to claim damages based on breach of contract of carriage by sea. its officers. contending that the RTC erred: (a) in considering itself barred from entertaining the case by the findings of fact of the SBMI in SBMI-ADM Case No. judgment is hereby rendered.00. Biliran. In the first place. and not take shelter while a strong typhoon was approaching. In its decision dated September 16. insisting that the sinking of the vessel was due to force majeure (i. (b) moral damages of P100. to have been negligent in transporting the deceased Cenon E. they were Dr. whether they be the ordinary stress of the sea during a calm voyage or the rage of a storm. that their parents had predeceased Dr. had exercised the required degree of diligence to acquit the appellee of liability. Doa Marilyn had not apprised themselves of the weather reports on the approach of typhoon Unsang which had the power of a signal no. Moral damages worth P100.00. Inc. WHEREFORE. (e) attorneys fees of P50.809. allegedly the surviving brothers and sisters of Dr. They stated. along with hundreds of other passengers of the ill-fated vessel.00.000. the respondents.00 is proper. could not have been avoided. 3 cyclone. averring that the petitioner had acted negligently in transporting Dr. the appealed decision of the RTC of Naval. among others. What happened during such time is important in determining what information about the typhoon was gathered and how the ship officers reached their decision to just change course. (c) exemplary or corrective damages in the amount deemed proper and just. as such. making the vessel a virtual derelict amidst a raging storm at sea. premises considered. Curso and the other passengers. and (f) costs of suit.V. Curso. 2004 at the age of 65. and that. Furthermore. Curso was not recovered. since at the first sign of bad weather. 000. (c) the wrongful act or omission of the defendant must be the proximate cause of the injury sustained by the claimant. The petitioner has correctly relied on the holding in Receiver for North Negros Sugar Company. Essentially. To be entitled to moral damages.000. as enumerated in Article 2219 of the Civil Code.20. the recipient who is not an heir called to the decedent's inheritance by the law of testate or intestate succession. such indemnity shall in every case be assessed and awarded by the court.00. for a period not exceeding five years. unless there is fraud or bad faith. or amusements that will serve to alleviate the moral suffering he has undergone by reason of the tragic event. According to Villanueva v.[12] to the effect that in case of death caused by quasi-delict. moral damages are not recoverable in actions for damages predicated on a breach of contract. this appeal. the exact duration to be fixed by the court. Article 2206.Defendant-appellee is hereby ordered to pay the plaintiffs heirs of Cenon E.[7] Issues The petitioner raises the following issues: ARE THE BROTHERS AND SISTERS OF A DECEASED PASSENGER IN A CASE OF BREACH OF CONTRACT OF CARRIAGE ENTITLED TO AN AWARD OF MORAL DAMAGES AGAINST THE CARRIER? ASSUMING (THAT) THEY ARE ENTITLED TO CLAIM MORAL DAMAGES. moral damages may be awarded in case of breach of contract of carriage that results in the death of a passenger. Inc. and the indemnity shall be paid to the heirs of the latter.241.[11] Thus. and the ruling in Receiver for North Negros Sugar Co. v.00. mental.[5] Hence. (4) Costs of the suit. unless the deceased on account of permanent physical disability not caused by the defendant. (2) Quasi-delicts causing physical injuries. Ybaez. (b) there must be a culpable act or omission factually established. may demand support from the person causing the death. in relation to Article 2206 (3). the brother of the deceased was not entitled to the award of moral damages based on Article 2206 of the Civil Code. Inc. concerning Damages. in which the petitioner insists that the CA committed grievous errors in holding that the respondents were entitled to moral damages as the brothers and sisters of the late Dr. (2) If the deceased was obliged to give support according to the provisions of article 291. even though there may have been mitigating circumstances. It is true that under Article 1003[14] of the Civil Code they succeeded to the entire estate of the late Dr. that is. Salvador. and surviving spouse. ascendants.[13] the conditions for awarding moral damages are: (a) there must be an injury. Inclusio unius est exclusio alterius. legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a common carrier. . Ybaez. Curso. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book.[9] in accordance with Article 1764.[10] The solemn power and duty of the courts to interpret and apply the law do not include the power to correct the law by reading into it what is not written therein. Moral damages may be recovered in the following and analogous cases: (1) A criminal offense resulting in physical injuries. v. the purpose of moral damages is indemnity or reparation. In addition: (1) The defendant shall be liable for the loss of the earning capacity of the deceased. Curso in the absence of the latters descendants. viz: Article 2219.. diversions. had no earning capacity at the time of his death. However. the respondents must have a right based upon law. The foregoing legal provisions set forth the persons entitled to moral damages. and (d) the award of damages is predicated on any of the cases stated in Article 2219 of the Civil Code. that the CA thereby disregarded Article 1764 and Article 2206 of the Civil Code. (3) Moral Damages in the amount of P100. to enable the injured party to obtain the means. As a general rule.[8] As an exception. SHOULD THE AWARD BE GRANTED OR GIVEN TO THE BROTHER OR SISTER NOTWITHSTANDING (THE) LACK OF EVIDENCE AS REGARDS HIS OR HER PERSONAL SUFFERING? RULING The petition is meritorious. illegitimate children. (2) Loss of Earning Capacity in the amount of P504. Curso the following: (1) Death indemnity in the amount of P50. (3) The spouse. clearly substantiated by the claimant. The omission from Article 2206 (3) of the brothers and sisters of the deceased passenger reveals the legislative intent to exclude them from the recovery of moral damages for mental anguish by reason of the death of the deceased. or psychological. the CA erred in awarding moral damages to the respondents. which provide: Article 1764. whether physical. The amount of damages for death caused by a crime or quasi-delict shall be at least three thousand pesos. of the Civil Code.[6] whereby the Supreme Court disallowed the award of moral damages in favor of the brothers and sisters of a deceased passenger in an action upon breach of a contract of carriage. they were not included among the persons entitled to recover moral damages. bound for Manila. such person remains in the carrier's premises to claim his baggage. 26. After said vessel had landed. (9) Acts mentioned in article 309. ascendants. HELD:Yes. In fine. 3 of this article. may also recover moral damages. immediate and proximate cause of the victim's death. Hence. went back to the vessel. 30. (10) Acts and actions referred to in articles 21. The provision does not include succession in the collateral line as a source of the right to recover moral damages. it started operation by unloading the cargoes from said vessel. While the crane was being operated. but it was the negligence of Aboitiz in prematurely turning over the vessel to the arrastre operator for the unloading of cargoes which was the direct. The parents of the female seduced. 32. the relationship will not ordinarily terminate until the passenger has. Article 2219 circumscribes the instances in which moral damages may be awarded. (4) Adultery or concubinage. 9 of this article. abduction. 34 and 35. 28. ascendants and brothers and sisters may bring the action mentioned in No. (8) Malicious prosecution. 11 Once created.(3) Seduction. Aboitiz denied responsibility contending that at the time of the accident. Private respondents Vianas filed a complaint for damages against petitioner for breach of contract of carriage. after reaching his destination. and it was while he was pointing to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him. and surviving spouse of the deceased passenger to demand moral damages for mental anguish by reason of the death of the deceased. x x x [T]he victim Anacleto Viana guilty of contributory negligence. granted. 27.[17] WHEREFORE. the Pioneer Stevedoring Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum of Agreement between Pioneer and petitioner Aboitiz. safely alighted from the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. Article 1003 of the Civil Code is not concerned with recovery of moral damages. rape or other lascivious acts. Occidental Mindoro. ISSUE: Whether or not Aboitiz is negligent and is thus liable for the death. the vessel was completely under the control of respondent Pioneer Stevedoring Corporation as the exclusive stevedoring contractor of Aboitiz. It is apparent from the foregoing that what prompted the Court to rule as it did in said case is the fact of the passenger's reasonable presence within the carrier's premises. illegitimate children. descendants. 2002 of the Court of Appeals damages amounting to P100. at the port at San Jose. He was thereafter brought to the hospital where he later expired three (3) days thereafter. The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port of destination and has left the vessel owner's dock or premises. 29. in the order named. (7) Libel. (6) Illegal search. owned by Aboitiz Shipping Corporation. 12 The carrier-passenger relationship is not terminated merely by the fact that the person transported has been carried to his destination if.[16] Article 2206 of the Civil Code entitles the descendants. decision of moral and set ABOITIZ CASES ABOITIZ SHIPPING CORPORATION VS. pinning him between the side of the vessel and the crane. slander or any other form of defamation. abducted. All persons who remain on the premises a reasonable time after leaving the conveyance are to be deemed passengers. CA FACTS: Anacleto Viana boarded the vessel M/V Antonia. and includes a reasonable time to see after his baggage and prepare for his departure. Anacleto Viana who had already disembarked from said vessel obviously remembering that some of his cargoes were still loaded in the vessel.000. for example. The spouse. That reasonableness of time should be made to . The usage of the phrase analogous cases in the provision means simply that the situation must be held similar to those expressly enumerated in the law in question[15] following the ejusdem generis rule. which handled the unloading of cargoes from the vessel of Aboitiz. The crane owned by Pioneer was placed alongside the vessel and one (1) hour after the passengers of said vessel had disembarked. raped or abused referred to in No.00 is deleted aside. moral damages may be recovered in an action upon breach of contract of carriage only when: (a) where death of a passenger results. or (b) it is proved that the carrier was guilty of fraud and bad faith. the petition for review on certiorari is and the award made to the respondents in the dated September 16. (5) Illegal or arbitrary detention or arrest. and what is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. even if death does not result. other cases have resulted in the finding that vessel was seaworthy at the time of the sinking. or the cargo insurers like General Accident (GAFLAC).Due to these different rulings. which is hypothecated for such obligations or which stands as theguaranty for their settlement. This was affirmed by the CA and ordered the immediate execution of the full judgment award. As earlier stated. Thissinking of the vessel gave rise to the filing of several suits for recovery of the lost cargo either by the shippers their successors-in-interest.depend on the attending circumstances of the case. an interval of one (1) hour had elapsed before the victim met the accident. It is of common knowledge that. The co-owners of a vessel shall be civilly liable in the proportion of their interests in the commonfund for the results of the acts of the captain referred to in Art. The only time the Limited Liability Rule does not apply is when there is an actual finding of negligence on the part of thevessel owner or agent. at the time of the sinking was seaworthy. 587. Thus. a carrier is duty bound not only to bring its passengers safely to their destination but also to afford them a reasonable time to claim their baggage. It has its origin by reason of the conditions and risks attending maritime trade in its earliestyears when such trade was replete with innumerable and unknown hazards since vessels had to go through largelyuncharted waters to ply their trade. the nature of its business. a ship passenger will need at least an hour as is the usual practice. and so forth. its equipment. 837. The Limited Liability Rule in the Philippines is taken up in Book III of the Code of Commerce. but he mayexempt himself therefrom by abandoning the vessel with all her equipment and the freight it may haveearned during the voyage. On the contrary. We believe there exists such a justifiable cause. to disembark from the vessel and claim his baggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a very short period of time. ABOITIZ. petitioner cannot categorically claim. When the accident occurred. the victim was in the act of unloading his cargoes. 587. that the ruling in La Mallorca is inapplicable to the case at bar. if we are to apply the doctrine enunciated therein to the instant petition. by the very nature of petitioner's business as a shipper. hereunder quoted in toto: Art. and insurance. we cannot in reason doubt that the victim Anacleto Viana was still a passenger at the time of the incident. Verily. The civil liability incurred by shipowners in the case prescribed in this section (on collisions). . which limitation served to induce capitalists into effectively wagering their resources againstthe consideration of the large profits attainable in the trade. and that suchsinking was due toforce majeure. the customs of the place. from petitioner's vessel. which he had every right to do. The trial court rules against the carrier on the ground that the loss didnot occur as a result of force majeure. a vessel w/c sank on a voyage from Hongkong to the Philippines. before a notary. Art.shall be understood aslimited to the value of the vessel with all its appurtenances and freightage served during the voyage. if any. ISSUE 2: Whether there is a finding of such negligence on the part of the owner in this case. the passengers of vessels are allotted a longer period of time to disembark from the ship than other common carriers such as a passenger bus. and 837. through the bare expedient of comparing the period of time entailed in getting the passenger's cargoes. Aboitiz argued that the Limited Liability Rule warrants immediate stay of execution of judgment to prevent impairment of other creditors' shares.Board of Marine Inquiry (BMI). The ship agent shall also be civilly liable for the indemnities in favor of third persons which mayarise from the conduct of the captain in the care of the goods which he loaded on the vessel. ABOITIZ SHIPPING CORPORATIONvs. It is thus of no moment whether in the cited case of La Mallorca there was no appreciable interregnum for the passenger therein to leave the carrier's premises whereas in the case at bar. 590. Art. Aboitiz. particularly in Articles 587. of the part of the vessel belonging to him. the Court holds that the vessel M/V "Aboitiz" and its cargo werenot lost due to fortuitous event or force majeure. ABOITIZ SHIPPING CORP VS GENERAL FIRE AND LIFE ASSURANCE CORP FACTS: Aboitiz Shipping is the owner of M/V P. RULING 2: The SC ruled in the negative. RULING: The SC ruled in the affirmative. ISSUE: Whether the Limited Liability Rule arising out of the real and hypothecary nature of maritime law should apply inthis and related cases. such vessels are capable of accommodating a bigger volume of both as compared to the capacity of a regular commuter bus. the trial court merely held that: Considering the foregoing reasons. It was designed to offset such adverse conditions and to encourage people andentities to venture into maritime commerce despite the risks and the prohibitive cost of shipbuilding. such as the kind of common carrier. and therefore precludes a consideration of the time element per se without taking into account such other factors.In its Decision. as based on thereal and hypothecary nature of maritime law. Consequently.However.590. on its initial investigation found that such sinking was due toforce majeureand that subjectvessel.Each co-owner may exempt himself from this liability by the abandonment. the liability of the vessel owner and agent arising from the operation of such vessel were confined to the vessel itself.freight. With respect to the bulk of cargoes and the number of passengers it can load. The primary factor to be considered is the existence of a reasonable cause as will justify the presence of the victim on or near the petitioner's vessel.The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with lossesrelated to maritime contracts is confined to the vessel. Aboitiz seeks a pronouncement as to the applicability of the doctrine of limited liability onthe totality of the claimsvis a visthe losses brought about by the sinking of the vessel M/V P. the vessel was advised by the Japanese Meteorological Center that it was safe to travel to its destination. and declared the vessel seaworthy and concluded that the sinking was due to the vessel’s exposure to the approaching typhoon. On November 3. Consequently. 1989 of the Regional Trial Court of Manila in Civil Case No. General Textile. on October 31. Aboitiz was due to an unforeseen event and without fault or negligence on its part.60. It also alleged that in accordance with the real and hypothecary nature of maritime law. Aboitiz Shipping Corporation12 involving the same incident.E. The complaint with respect to Franco and Zuellig is dismissed and their counterclaim against New India is likewise dismissed SO ORDERED. thus: WHEREFORE. small waves. However. Lambert and Company. Ltd. Respondent paid General Textile and was subrogated to the rights of the latter. claiming that they exercised extraordinary diligence in handling the shipment while it was in their possession. Aboitiz filed his "Marine Protest". F. The Court of Appeals affirmed the Decision3 dated November 20. in favor of respondent New India Assurance Company. 590 AND 837 OF . On October 31. to investigate the cause of the sinking. the vessel changed its course. 2006(full text) For review on certiorari are the Decision1 dated August 29. To avoid the typhoon. PREMISES CONSIDERED. Inc. Petitioner elevated the case to the Court of Appeals and presented the findings of the BMI. 2003 denying reconsideration. and the proximate cause of the loss of cargo was a fortuitous event. M/V P. it was still at the fringe of the typhoon when its hull leaked. The BMI exonerated the captain and crew of any administrative liability. Aboitiz. respondent added. Hence. Aboitiz Shipping Corporation. It held petitioner liable for the total value of the lost cargo plus legal interest. Aboitiz extinguished its liability on the loss of the cargoes. its unseaworthiness. the sinking of M/V P. May 2. CV No.11 Meanwhile.x x x DISREGARDING THE RULINGS OF THE HONORABLE SUPREME COURT ON THE APPLICATION OF THE RULE ON LIMITED LIABILITY UNDER ARTICLE 587. Inc. the Board of Marine Inquiry (BMI) conducted its own investigation to determine whether the captain and crew were administratively liable.9 the surveyor concluded that the cause was the flooding of the holds brought about by the vessel’s questionable seaworthiness. the trial court. LTD.8 Respondent hired a surveyor. 1989. arising from the sinking of its vessel. Zuellig. in Manila and insured by respondent New India Assurance Company. citing the Court of Appeals decision in General Accident Fire and Life Assurance Corporation v. of the total loss of the vessel and all of its cargoes. ruled in favor of respondent. While in Hongkong. Hence. and was unilateral in nature. FrancoBelgian Services and the latter’s local agent. and the failure of defendants therein to exercise extraordinary diligence in the transport of the goods. fairly frequent white horses. 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.net Franco-Belgian Services and Zuellig responded. hence not binding on the courts. petitioner neither informed respondent nor the trial court of the investigation. 1980. 82-1475. respondent filed a complaint for damages against petitioner Aboitiz. 28770 and its Resolution2 dated January 23. petitioner notified7 the consignee. General Textile.5 But while at sea. On November 20.R. However.4 Before departing.NEW INDIA ASSURANCE COMPANY. Perfect.101avvphil. plus legal interest thereon until the same is fully paid. 2002 of the Court of Appeals in CA-G. Aboitiz for transshipment to Manila. 1980... the appellate court affirmed in toto the trial court’s decision. lodged a claim with respondent for the amount of its loss. on August 29. but the captain and his crew were saved. However. In its report. this petition for review. the cargo was transferred to M/V P. 2003. The cargo was consigned to General Textile. its vessel was seaworthy. (Zuellig). alleging that the Court of Appeals gravely erred in: I. This petition stemmed from the action for damages against petitioner. the vessel received a report of a typhoon moving within its general path. 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. becoming longer. 1980. Ltd. Petitioner moved for reconsideration but the same was denied on January 23. It alleged that the sinking of M/V P."6 Thereafter. For its part. Inc. attorney’s fees equivalent to fifteen [percent] (15%) of the total amount due and the costs of suit. petitioner also raised the same defense that the ship was seaworthy. defendants therein breached their contract of carriage. 2002. It held that the proceedings before the BMI was only for the administrative liability of the captain and crew. judgment is hereby rendered in favor of New India and against Aboitiz ordering the latter to pay unto the former the amount of P142. stating that the wind force was at 10 to 15 knots at the time the ship foundered and described the weather as "moderate breeze. the captain of M/V P.401. the vessel sank. FACTS: Societe Francaise Des Colloides loaded a cargo of textiles and auxiliary chemicals from France on board a vessel owned by Franco-Belgian Services. 18 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. These factual findings of the Court of Appeals. INC.R. to limit its liability to the amount of the insurance proceeds.24 In contrast. Petitioner. Considering the evidence presented and the circumstances obtaining in this case. we said that the sinking of the vessel was not due to force majeure. still. applies in this case. 2002 and Resolution dated January 23. These findings are conclusive not only on the parties but on this Court as well. common carriers are responsible. 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.x x x RULING THAT THE ISSUE ON THE APPLICATION OF THE RULE ON LIMITED LIABILITY UNDER ARTICLES 587. 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. Differently put.16 Therein. common carriers are presumed to have been at fault or to have acted negligently. AND ABOITIZ SHIPPING CORPORATION V. according to respondent. the doctrine of limited liability cannot be applied. It bears stressing that this Court has variedly applied the doctrine of limited liability to the same incident – the sinking of M/V P. . In Monarch. Aboitiz. 1980. in this case. v. but to its unseaworthy condition. we found petitioner concurrently negligent with the captain and crew. 28770 are AFFIRMED. destruction or deterioration of the insured goods. we find that petitioner failed to discharge this burden.25 Besides.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. 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. the shipowner shall be liable to the full-extent of the damage. exoneration of the vessel’s officers and crew by the BMI merely concerns their respective administrative liabilities. LTD. Monarch. Evidence on record showed that the weather was moderate when the vessel sank. petitioner should be held liable for the total value of the lost cargo. B. 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. unless they prove that they observed extraordinary diligence. the latest ruling. Aboitiz on October 31. Though this duty can be delegated. 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.28 Therefore. where the vessel is found unseaworthy.23 In the present case. destruction or deterioration was brought about by the causes specified in Article 1734 of the Civil Code. In which case. ET AL. tried to settle the conflicting pronouncements of this Court relative to the sinking of M/V P. which limits respondent’s award of damages to its pro-rata share in the insurance proceeds. From the nature of their business and for reasons of public policy. we are asked to resolve whether the limited liability doctrine.19 We thus find it necessary to clarify now the applicability here of the decision in Monarch. citing Monarch Insurance Co. ABOITIZ". the petition is DENIED for lack of merit. unless they can prove that the loss. Inc. The Decision dated August 29. 2003 of the Court of Appeals in CA-G.22 Moreover. However. the determination of which properly belongs to the courts. both the trial and the appellate courts. It initially attributed the sinking to the typhoon and relied on the BMI findings that it was not at fault. the shipowner must exercise close supervision over its men. Hence. CV No. the shipowner is also presumed to be negligent since it is tasked with the maintenance of its vessel. common carriers are bound to observe extraordinary diligence over the goods they transport according to all the circumstances of each case. affirming those of the trial court are not to be disturbed on appeal. A. the findings of the BMI are not deemed always binding on the courts. 590 AND 837 OF THE CODE OF COMMERCE HAD BEEN CONSIDERED AND PASSED UPON IN ITS DECISION.x x x NOT APPLYING THE RULINGS IN THE CASES OF MONARCH INSURANCE CO. Court of Appeals. COURT OF APPEALS ET AL.THE CODE OF COMMERCE TO CASES INVOLVING THE SINKING OF THE M/V "P. 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. GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION.27 Where the shipowner fails to overcome the presumption of negligence. found that the sinking was not due to the typhoon but to its unseaworthiness.21 In all other cases.. V. WHEREFORE. petitioner has the burden of proving that the unseaworthiness of its vessel was not due to its fault or negligence. but must be accorded great weight.17 But the Court stressed that the circumstances therein still made the doctrine of limited liability applicable. Costs against petitioner..14 Stated simply.20 In the event of loss. ABOITIZ.