transpo chap6 cases

8/20/2019 Transpo Chap6 Cases

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G.R. No. 121833 October 17, 2008

ABOITIZ SHIPPING CORPORATION, petitioners,vs.COURT OF APPEAS, !AA"AN INSURANCE CO!PAN", INC., CO!PAGNIE!ARITI!E #ES CHARGEURS REUNIS, $%& F.E. ZUEIG '!(, INC., respondents.

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

ABOITIZ SHIPPING CORPORATION, petitioners,vs.COURT OF APPEAS, THE HON. *U#GE RE!EGIO E. ZARI, +% +- c$$c+t/ $-Pre-+&+% *&e o te RTC, Br$%c 20 ASIA TRA#ERS INSURANCECORPORATION, $%& AIE# GUARANTEE INSURANCECORPORATION, respondents.

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G.R. No. 137801 October 17, 2008

ABOITIZ SHIPPING CORPORATION, petitioners,vs.E4UITABE INSURANCE CORPORATION, respondents.

#ECISION

TINGA, J.5

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

whether the real and hypothecary doctrine may be invoed by the shipowner inrelation to the loss of cargoes occasioned by the sining of M/V P. Aboitiz on !"#ctober "$%&. 'he petitions filed by (boiti) *hipping Corporation +(boiti) commonlysee the computation of its liability in accordance with the Courts pronouncement in (boiti) *hipping Corporation v. eneral (ccident /ire and 0ife (ssuranceCorporation, 0td." +hereafter referred to as 1the "$$! GAFLAC case1.

'he three petitions stemmed from some of the several suits filed against (boiti)before different regional trial courts by shippers or their successors-in-interest for therecovery of the monetary value of the cargoes lost, or by the insurers for thereimbursement of whatever they paid. 'he trial courts awarded to various claimantsthe amounts of2

3!$,%3.&, 2

343,$3.!&, and 2

%,3!!.%" in .R. 6os. ""%!!,"!&5 and "!%&", respectively.

ANTECEDENTS

G.R. No. 121833

Respondent 7alayan 8nsurance Company, 8nc. +7alayan filed f ive separate actionsagainst several defendants for the collection of the amounts of the cargoes allegedlypaid by 7alayan under various marine cargo policies issued to the insurance

claimants. 'he five civil cases, namely, Civil Cases 6o. "!%3", 6o. "!$&%!, 6o."!%3, 6o. R-%"-53 and 6o. "!%%$, were consolidated and heard before theRegional 'rial Court +R'C of 7anila, Branch 54.

'he defendants in Civil Case 6o. "!%3" and in Civil Case 6o. "!$&%! were 7alayan8nternational *hipping Corporation, a foreign corporation based in 7alaysia, its localship agent, 0iton9ua 7erchant *hipping (gency +0iton9ua, and (boiti). 'hedefendants in Civil Case 6o. "!%3 were Compagnie 7aritime des ChargeursReunis +C7CR, its local ship agent, /.:. ;uellig +7, 8nc. +;uellig, and (boiti).7alayan also filed Civil Case 6o. R-%"-53 only against C7CR and ;uellig. 'hus,defendants C7CR and ;uellig filed a third-party complaint against (boiti). 8n the fifthcomplaint doceted as Civil Case 6o. "!%%$, only (boiti) was impleaded asdefendant.

'he shipments were supported by their respective bills of lading and insuredseparately by 7alayan against the ris of loss or damage. 8n the five consolidatedcases, 7alayan sought the recovery of amounts totaling 2

3!$,%3.&.

(boiti) raised the defenses of lac of 9urisdiction, lac of cause of action andprescription. 8t also claimed that M/V P. Aboitiz was seaworthy, that it exercisedextraordinary diligence and that the loss was caused by a fortuitous event.

(fter trial on the merits, the R'C of 7anila rendered a


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4. 8n Civil Case 6o. "!$&%!, defendant (boiti) is ad9udged liable and ordered to payplaintiff the amount of #ne ?undred /ifty-*ix 'housand 'wo ?undred :ighty-*even2esos and *ixty-/our Centavos +2"53,%.34A

8n Civil Case 6o. "!%%$, defendant (boiti) is ad9udged liable and ordered to payplaintiff the amount of /ifty-'wo 'housand *ix ?undred :ighty-6ine 2esos and /iftyCentavos +25,3%$.5&.

(ll the aforesaid award shall bear interest at the legal rate from the filing of the

respective complaints. Considering that there is no clear showing that the cases fallunder (rticle &%, 6os. 4 and 5, of the Civil Code, and in consonance with the basicrule that there be no penalty +in terms of attorneys fees imposed on the right tolitigate, no damages by way of attorneys fees are awardedA however, costs of thepartyparties to whom 9udgment awards are made shall be made by the party orderedto pay the said 9udgment awards.

*# #R


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8n view of the denial of its motion for reconsideration,"% (boiti) filed before this Courtthe instant petition for review on certiorari doceted as .R. 6o. "!&5."$ 'he petitionattributes the following errors to the Court of (ppeals=

'?: C#R' #/ (22:(0* R(@:0D :RR:< >?:6 8' R0:< '?(' '?: 0#>:RC#R' ?(< 7(:8?' '#'?: (/0(C C(*: 6 (* '?: 10878':< 08(B808'D R0:1 (2208:*.!&

0SSES

'he principal issue common to all three petitions is whether (boiti) can avail limitedliability on the basis of the real and hypothecary doctrine of maritime law. Corollary tothis issue is the determination of actual negligence on the part of (boiti).

'hese consolidated petitions similarly posit that (boiti)s liability to respondentsshould be limited to the value of the insurance proceeds of the lost vessel pluspending freightage and not correspond to the full insurable value of the cargoes paid

by respondents, based on the Courts ruling in the "$$! GAFLAC case.

Respondents in .R. 6o. ""%!! counter that the limited liability rule should not beapplied because there was a finding of negligence in the care of the goods on the partof (boiti) based on this Courts Resolution dated 4


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of M/V P. Aboitiz . Considering that the claims against (boiti) had reached more than"&&, the Court found it necessary to collate all these claims before their payment fromthe insurance proceeds of the vessel and i ts pending freightage. (s a result, the Courtexhorted the trial courts before whom similar cases remained pending to proceed withtrial and ad9udicate these claims so that the pro-rated share of each claim could bedetermined after all the cases shall have been decided.!

8n the "$$! GAFLAC case, the Court applied the limited liability rule in favor of (boiti)based on the trial courts finding therein that (boiti) was not negligent. 'he Court

explained, thus=

x x x 8n the few instances when the matter was considered by this Court, we havebeen consistent in this 9urisdiction in holding that the o%( time the 0imited 0iabilityRule 4oe) %ot $$( is when there is an actual finding of negligence on the part of thevessel owner or agent x x x. 'he pivotal Euestion, thus, is whether there is finding ofsuch negligence on the part of the owner in the instant case.

( careful reading of the decision rendered by the trial court in Civil Case 6o. "4445as well as the entirety of the records in the instant case will show that tere $- bee%%o $ct$6 +%&+% o %e6+e%ce o% te $rt o et+t+o%er . x x x

'he same is true of the decision of this Court in .R. 6o. %$5 affirming the decisionof the Court of (ppeals in C(-.R. C@ 6o. "&3&$ since both decisions did not maeany new and additional finding of fact. Both merely affirmed the factual findings of thetrial court, adding that the cause of the sining of the vessel was because ofunseaworthiness due to the failure of the crew and the master to exerciseextraordinary diligence. 8ndeed, there appears to have been no evidence presentedsufficient to form a conclusion that petitioner shipowner itself was negligent, and notribunal, including this Court, will add or subtract to such evidence to 9ustify aconclusion to the contrary.!! +Citations entitled +:mphasis supplied

'he ruling in the "$$! GAFLAC case cited the real and hypothecary doctrine inmaritime law that the shipowner or agents liability is merely co-extensive with hisinterest in the vessel such that a total loss thereof results in its extinction. 16o vessel,no liability1 expresses in a nutshell the limited liability rule.!4

8n this 9urisdiction, the limited liability rule is embodied in (rticles 5%, 5$& and %!under Boo 888 of the Code of Commerce, thus=

(rt. 5%. 'he ship agent shall also be civilly liable for the indemnities in favor of thirdpersons which may arise from the conduct of the captain in the care of the goodswhich he loaded on the vesselA but he may exempt himself therefrom by abandoningthe vessel with all her eEuipment and the freight it may have earned during thevoyage.

(rt. 5$&. 'he co-owners of the vessel shall be civilly liable in the proportion of theirinterests in the common fund for the results of the acts of the captain referred to in

(rt. 5%.

:ach co-owner may exempt himself from this liability by the abandonment, before anotary, of the part of the vessel belonging to him.

(rt. %!. 'he civil liability incurred by shipowners in the case prescribed in thissection, shall be understood as limited to the value of the vessel with all i tsappurtenances and freightage served during the voyage.

'hese articles precisely intend to limit the liability of the shipowner or agent to thevalue of the vessel, its appurtenances and freightage earned in the voyage, provided

that the owner or agent abandons the vessel.!5>hen the vessel is totally lost in whichcase there is no vessel to abandon, abandonment is not reEuired. Because of suchtotal loss the liability of the shipowner or agent for damages isextinguished.!3 ?owever, despite the total loss of the vessel, its insurance answers forthe damages for which a shipowner or agent may be held liable.!

6onetheless, there are exceptional circumstances wherein the ship agent could stil lbe held answerable despite the abandonment of the vessel, as where the loss orin9ury was due to the fault of the shipowner and the captain. 'he international rule isto the effect that the right of abandonment of vessels, as a legal limitation of ashipowners liability, does not apply to cases where the in9ury or average wasoccasioned by the shipowners own fault.!%0iewise, the shipowner may be held liablefor in9uries to passengers notwithstanding the exclusively real and hypothecary nature

of maritime law if fault can be attributed to the shipowner.!$

(s can be gleaned from the foregoing disEuisition in the "$$! GAFLAC case, theCourt applied the doctrine of limited liability in view of the absence of an expressfinding that (boiti)s negligence was the direct cause of the sining of the vessel. 'hecircumstances in the "$$! GAFLAC case, however, are not obtaining in the instantpetitions.

( perusal of the decisions of the courts below in all three petitions reveals that there isa categorical finding of negligence on the part of (boiti). /or instance, in .R. 6o.""%!!, the R'C therein expressly stated that the captain of M/V P. Aboitiz wasnegligent in failing to tae a course of action that would prevent the vessel fromsailing into the typhoon. 8n .R. 6o. "!&5, the R'C concluded that (boiti) failed toshow that it had exercised the reEuired extraordinary diligence in steering the vesselbefore, during and after the storm. 8n .R. 6o. "!%&", the R'C categorically statedthat the sining of M/V P. Aboitiz was attributable to the negligence or fault of (boiti).8n all instances, the Court of (ppeals affirmed the factual findings of the trial courts.

'he finding of actual fault on the part of (boiti) is central to the issue of its liability tothe respondents. (boiti)s contention, that with the sining of M/V P. Aboitiz , its liabilityto the cargo shippers and shippers should be limited only to the insurance proceedsof the vessel absent any finding of fault on the part of (boiti), is not supported by therecord. 'hus, (boiti) is not entitled to the limited liability rule and is, therefore, liablefor the value of the lost cargoes as so duly alleged and proven during trial.

http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt32http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt32http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt33http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt33http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt34http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt35http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt36http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt36http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt37http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt37http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt38http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt38http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt39http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt32http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt33http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt34http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt35http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt36http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt37http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt38http://www.lawphil.net/judjuris/juri2008/oct2008/gr_121833_2008.html#fnt39


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:vents have supervened during the pendency of the instant petitions. #n two otheroccasions, the Court ruled on separate petitions involving monetary claims against (boiti) as a result of the "$%& sining

of the vessel M/V P. Aboitiz . #ne of them 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()4 +hereaftercollectively referred to as Mo%rc# 0%)"r%ce promulgated on &% Hune &&&. 'histime, the petitioners consisted of claimants against (boiti) because either the

execution of the 9udgment awarding full indemnification of their claims was stayed orset aside or the lower courts awarded damages only to the extent of the claimantsproportionate share in the insurance proceeds of the vessel.

8n Mo%rc# 0%)"r%ce, the Court deemed it fit to settle once and for all this factualissue by declaring that the sining of M/V P. Aboitiz was caused by the concurrence of the unseaworthiness of the vessel and the negligence of both (boiti) and the vesselscrew and master and not because of force m!e"re. 6otwithstanding this finding, theCourt did not reverse but reiterated instead the pronouncement in GAFLAC to theeffect that the claimants be treated as 1creditors in an insolvent corporation whoseassets are not enough to satisfy the totality of claims against it.14! 'he Court explainedthat the peculiar circumstances warranted that procedural rules of evidence be setaside to prevent frustrating the 9ust claims of shippersinsurers. 'hus, the Court

in Mo%rc# 0%)"r%ce ordered (boiti) to institute the necessary limitation anddistribution action before the proper R'C and to deposit with the said court theinsurance proceeds of and the freightage earned by the ill-fated ship.

?owever, on & 7ay &&3, the Court rendered a decision in Aboitiz S#i$$i%&Cor$ortio% '. Ne6 0%4i A))"r%ce Com$%* Lt4 .44 +Ne6 0%4i, reiterating the well-settled principle that the exception to the limited liability doctrine applies when thedamage is due to the fault of the shipowner or to the concurrent negligence of theshipowner and the captain. >here the shipowner fails to overcome the presumptionof negligence, the doctrine of limited liability cannot be applied.45 8n Ne6 0%4i, theCourt clarified that the earlier pronouncement in Mo%rc# 0%)"r%ce was not anabandonment of the doctrine of limited liability and that the circumstances therein stillmade the doctrine applicable.43

8n Ne6 0%4i, the Court declared that (boiti) failed to discharge its burden of showingthat it exercised extraordinary diligence in the transport of the goods it had on boardin order to invoe the limited liability doctrine. 'hus, the Court re9ected (boiti)sargument that the award of damages to respondent therein should be limited toits $ro rt share in the insurance proceeds from the sining of M/V P. Aboitiz .

'he instant petitions provide another occasion for the Court to reiterate the well-settled doctrine of the real and hypothecary nature of maritime law. (s a general rule,a ship owners liability is merely co-extensive with his interest in the vessel, exceptwhere actual fault is attributable to the shipowner. 'hus, as an exception to the limited

liability doctrine, a shipowner or ship agent may be held liable for damages when thesining of the vessel is attributable to the actual fault or negligence of the shipowneror its failure to ensure the seaworthiness of the vessel. 'he instant petitions cannot be

spared from the application of the exception to the doctrine of limited liability in viewof the unanimous findings of the courts below that both (boiti) and the crew failed toensure the seaworthiness of the M/V P. Aboitiz .

HEREFORE, the petitions in .R. 6os. ""%!!, "!&5 and "!%&" are #ENIE#.'he decisions of the Court of (ppeals in C(-.R. *2 6o. !5$5-C@, C(-.R. *2 6o.4"3$3 and C(-.R. C@ 6o. 4!45% are hereby AFFIR!E#. Costs against petitioner.SO OR#ERE#.

Foot%ote-I (s replacement of Hustice 2resbitero H. @elasco, Hr. who inhibited himself due to participation in C(


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G.R. No. 10088 *6/ 13, 2011

AGUSTIN P. #EA TORRE, 2etitioner,vs.THE HONORABE COURT OF APPEAS, CRISOSTO!O G. CONCEPCION,RA!ON 9BO"9 ARRAZABA, PHIIPPINE TRIGON SHIP"AR# CORPORATION,$%& ROAN# G. #EA TORRE, Respondents.

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

G.R. No. 10))

PHIIPPINE TRIGON SHIP"AR# CORPORATION $%& ROAN# G. #EATORRE, 2etitioners,vs.CRISOSTO!O G. CONCEPCION, AGUSTIN #EA TORRE $%& RA!ON 9BO"9ARRAZABA, Respondents.

< : C 8 * 8 # 6

!EN#OZA, J.:

'hese consolidated petitions" for review on certiorari see to reverse and set asidethe *eptember !&, &&


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c. (ny cost for the additional eEuipment to be installed on the vessel will beborne by the /8R*' 2(R'D +2'*C Roland and the cost of the eEuipmentwill be deductible from the monthly rental of the vesselA

d. 8n the event the vessel is grounded or other Kforce ma9eureL that will maethe vessel non-operaKxxLble, the rental of the vessel shall be suspended fromthe start until the vessel will be considered operationalA

e. 'he cost for the dry-docing andor repair of vessel shall not

exceed 2 &&,&&&.&&, any excess shall be borne by the *:C#6< 2(R'D+'*0(gustinA

f. 'he *:C#6< 2(R'D +'*0(gustin undertaes to shoulder themaintenance cost for the duration of the usageA

g. (ll cost for the necessary repair of the vessel shall be on the account ofthe *:C#6< 2(R'D +'*0(gustinA

h. 'hat the *:C#6< 2(R'D +'*0(gustin has the option to terminate thecontract in the event the *:C#6< 2(R'D +'*0(gustin decides to stopoperatingA

9. 'he /8R*' 2(R'D +2'*CRoland will terminate the services of allvessels crew and the *:C#6< 2(R'D +'*0(gustin shall have the right toreplace and rehire the crew of the vessel.

. 8nsurance premium of the vessel will be divided eEually between the/8R*' 2(R'D +2'*CRolando and the *:C#6< 2(R'D +'*0 (gustin. Knderscoring suppliedL

#n 6ovember , "$%4, '*0, this time represented by Roland per (gustins *pecial2ower of (ttorney,"" sub-chartered 0C'-Hosephine to Ramon 0arra)abal +0arra)abalfor the transport of cargo consisting of sand and gravel to 0eyte. 'he following wereagreed upon in that contract," to wit=

". 'hat the /8R*' 2(R'D +'*0 by Roland agreed that 0C'-Hosephine shallbe used by the *:C#6< 2(R'D +0arra)abal for and in consideration on thesum of /8@: '?#*(6< /8@: ?6


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>?:R:/#R:, in view of all the foregoing, 9udgment is hereby rendered as follows=

". 'he defendants, 2hilippine 'rigon *hipping Corporation and Roland de la'orre, and the third-party defendant, (gustin de la 'orre, shall pay theplaintiff, 9ointly and severally, the sum of :8?' ?6


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'?: C#R' #/ (22:(0* :RR:< 86 6#' (220D86 '?: 2R#@8*8#6*#/ '?: C#


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:ach co-owner may exempt himself from this liability by the abandonment, before anotary, of the part of the vessel belonging to him.

---

(rt. %!. 'he civil liability incurred by shipowners in the case prescribed in thissection, shall be understood as limited to the value of the vessel with all itsappurtenances and freightage served during the voyage.

(rticle %! specifically applies to cases involving collision which is a necessaryconseEuence of the right to abandon the vessel given to the shipowner or ship agentunder the first provision M (rticle 5%. *imilarly, (rticle 5$& is a reiteration of (rticle5%, only this time the situation is that the vessel is co-owned by severalpersons.5 #bviously, the forerunner of the 0imited 0iability Rule under the Code ofCommerce is (rticle 5%. 6ow, the latter is Euite clear on which indemnities may beconfined or restricted to the value of the vessel pursuant to the said Rule, and theseare the M 1indemnities in favor of third persons which may arise from the conduct ofthe captain in the care of the goods which he loaded on the vessel.1 'hus, what iscontemplated is the liability to third persons who may have dealt with the shipowner,the agent or even the charterer in case of demise or bareboat charter.

'he only person who could avail of this is the shipowner, Concepcion. ?e is the veryperson whom the 0imited 0iability Rule has been conceived to protect. 'he petitionerscannot invoe this as a defense. 8n Dangco v. 0aserna,3 this Court, through Hustice7oran, wrote=

'he policy which the rule is designed to promote is the encouragement of shipbuildingand investment in maritime commerce.

x x x.

Protius, in his law of >ar and 2eace, says that men would be deterred from investingin ships if they thereby incurred the apprehension of being rendered liable to anindefinite amount by the acts of the master, x x x.

0ater, in the case of 7onarch 8nsurance Co., 8nc. v. C(,% this Court, this time throughHustice *abino R.


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Chief Hustice (rtemio @. 2anganiban, 18ndeed, where the reason for the rule ceases,the rule itself does not apply.1!!

'he Court now comes to the issue of the liability of the charterer and the sub-charterer.

8n the present case, the charterer and the sub-charterer through their respectivecontracts of agreementcharter parties, obtained the use and service of the entire0C'-Hosephine. 'he vessel was liewise manned by the charterer and later by the

sub-charterers people. >ith the complete and exclusive relinEuishment ofpossession, command and navigation of the vessel, the charterer and later the sub-charterer became the vessels owner pro hac vice. 6ow, and in the absence of anyshowing that the vessel or any part thereof was commercially offered for use to thepublic, the above agreementscharter parties are that of a private carriage where therights of the contracting parties are primarily defined and governed by the stipulationsin their contract.!4

(lthough certain statutory rights and obligations of charter parties are found in theCode of Commerce, these provisions as correctly pointed out by the R'C, are notapplicable in the present case. 8ndeed, none of the provisions found in the Code ofCommerce deals with the specific rights and obligations between the real shipownerand the charterer obtaining in this case. 6ecessarily, the Court loos to the 6ew Civil

Code to supply the deficiency.!5 'hus, the R'C and the C( were both correct inapplying the statutory provisions of the 6ew Civil Code in order to define therespective rights and obligations of the opposing parties.

'hus, Roland, who, in his personal capacity, entered into the 2reliminary (greementwith Concepcion for the dry-docing and repair of 0C'-Hosephine, is liable under (rticle ""%$!3 of the 6ew Civil Code. 'here is no denying that the vessel was notreturned to Concepcion after the repairs because of the provision in the 2reliminary (greement that the same 1should1 be used by Roland for the first two years. Beforethe vessel could be returned, it was lost due to the negligence of (gustin to whomRoland chose to sub-charter or sublet the vessel.

2'*C is liable to Concepcion under (rticles "335! and "33!% of the 6ew Civil Code.

(s the charterer or lessee under the Contract of (greement dated Hune &, "$%4,2'*C was contract-bound to return the thing leased and it was liable for thedeterioration or loss of the same.

(gustin, on the other hand, who was the sub-charterer or sub-lessee of 0C'-Hosephine, is liable under (rticle "35" of the 6ew Civil Code.!$ (lthough he was never privy to the contract between 2'*C and Concepcion, he remained bound to preservethe chartered vessel for the latter.


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insure the same. nfortunately, they failed to do so in clear contravention of theirrespective agreements. Certainly, they should now all answer for the loss of thevessel.

>?:R:/#R:, the petitions are ithout pre9udice to his obligation toward the sublessor,the sublessee is bound to the lessor for all acts which refer to theuse and preservation of the thing leased in the manner stipulated

between the lessor and the lessee.4& ?:RR:R(, Remedial 0aw, @ol. 8, &&& :dition, p. !544" (5"i4r '. CF0 of C$iz* r%c# 00*0-4&4$&, #ctober %, "$, %& *CR("!, "!!.4 (rticle ""& of the 6ew Civil Code=

(rt.""&. 'hose who in the performance of their obligations areguilty of fraud, negligence, or delay, and those who in any mannercontravene the tenor thereof, are liable for damages.

4! :xhibit 1,1 /older of :xhibits, vol.", p. &!.

http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt1http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt1http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt2http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt2http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt3http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt3http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt4http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt4http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt5http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt5http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt6http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt6http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt7http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt7http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt8http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt8http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt9http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt9http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt10http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt10http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt11http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt11http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt12http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt12http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt13http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt13http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt14http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt14http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt15http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt15http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt16http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt16http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt17http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt17http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt18http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt18http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt19http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt19http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt20http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt20http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt21http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt21http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt22http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt22http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt23http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt23http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt24http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt24http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt25http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt25http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt26http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt26http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt27http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt27http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt28http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt28http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt29http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt29http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt30http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt30http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt31http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt31http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt32http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt32http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt33http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt33http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2011.html#rnt34http://www.lawphil.net/judjuris/juri2011/jul2011/gr_160088_2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13/33

G.R. No. 1:38. A-t 22, 200)

POIAN# IN#USTRIA I!ITE#, 2etitioners,vs.NATIONA #E;EOP!ENT CO!PAN", #E;EOP!ENT BAN< OF THEPHIIPPINES, $%& THE HONORABE COURT OF APPEAS 'Fortee%t#+=+-+o%( respondents.

G.R. No. 1:3877. A-t 22, 200)

NATIONA #E;EOP!ENT CO!PAN", 2etitioners,vs.POIAN# IN#USTRIA I!ITE#, Respondent.

< : C 8 * 8 # 6

TINGA, J .5

Before this Court are two Rule 45 consolidated petitions for review seeing the reviewof the Deci)io%" of the Court of (ppeals +/ourth


14/33

#n *eptember 4, "$$", 2#08(6< made written demands on (00:#6, 6


15/33

may be necessary to allow the foreclosed vessels to engage on the internationalshipping business,1 as well as attorneys fees and costs of suit. 'he dispositiveportion of the Deci)io% reads=

>?:R:/#R:, the assailed decision is 7#


16/33

'he bone of contention revolves around two main issues, namely= +" >hether 6ith respect to appellant 6


17/33

'o form part of the law of the land, the decree, order or 0#8 must be issued by the2resident in the exercise of his extraordinary power of legislation as contemplated in*ection 3 of the "$3 amendments to the Constitution, whenever in his 9udgment,there exists a grave emergency or threat or imminence thereof, or whenever theinterim Batasan 2ambansa or the regular 6ational (ssembly fails or is unable to actadeEuately on any matter for any reason that in his 9udgment reEuires immediateaction.!4

#nly when issued under any of the two circumstances will a decree, order, or letter be

Eualified as having the force and effect of law. 'he decree or instruction should havebeen issued either when there existed a grave emergency or threat or imminence orwhen the 0egislature failed or was unable to act adeEuately on the matter. 'heEualification that t#ere e;i)t) &r'e emer&e%c or t#ret or immi%e%ce t#ereof mustbe interpreted to refer to the prevailing peace and order conditions because theparticular purpose the 2resident was authori)ed to assume legislative powers was toaddress the deteriorating peace and order situation during the martial law period.

'here is no doubt that 0#8 6o. ""55 was issued on Huly ", "$%" when then2resident 7arcos was vested with extraordinary legislative powers. 0#8 6o. ""55 wasspecifically directed to


18/33

could not have intended that the parties disregard the reEuirements of law. 8n theabsence of *:C approval, there was no effective transfer of the shareholdings in(00:#6 to 6


19/33

6o. "5", otherwise nown as the *hip 7ortgage hether or not the order of preference under *ection ", 2.e& b/ te cort $%& t$>e- &e to te Go=er%@e%t '2( cre?- ?$e- '3(e%er$6 $=er$e ':( -$6=$e +%c6&+% co%tr$ct -$6=$e ')( @$r+t+@e 6+e%-$r+-+% r+or +% t+@e to te recor&+% o te reerre& @ort$e '( &$@$e-$r+-+% ot o tort $%& '7( reerre& @ort$e re+-tere& r+or +% t+@e.

+b 8f the proceeds of the sale should not be sufficient to pay all creditors included inone number or grade, the residue shall be divided among them pro rata. (ll creditsnot paid, whether fully or partially shall subsist as ordinary credits enforceable bypersonal action against the debtor. 'he record of 9udicial sale or sale by public auction

shall be recorded in the Record of 'ransfers and :ncumbrances of @essels in the portof documentation. +:mphasis supplied.

'here is no Euestion that the mortgage executed in favor of


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'he provision of 2.


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/rom the foregoing, it is clear that the amount used for the repair of the vessel 7@1(sean 0iberty1 was advanced by Citiban and was utili)ed for the purpose of payingoff the original maritime lienor, ?ong Gong nited


22/33

'he lower court awarded attorneys fees to 2#08(6< in the amount of 2",&&&,&&&.&&on account of the amount involved in the case and the protracted character of thelitigation.3$ 'he award was affirmed by the Court of (ppeals as against 6


23/33

44 .R. 6o. "4!%33, Ro((o, pp. "$4-"!!.45 04 . at "!!4.43 *oco ' . 7ilitante, &% 2hil. "5", "& +"$%!.4 (R'8C0: 5%. 8f the vessel being on a voyage or in a foreign port, its owner orowners should voluntarily alienate it, either to /ilipinos or to foreigners domiciled in thecapital or in a port of another country, the bill of sale shall be executed before theconsul of the Republic of the 2hilippines at the port where it terminates its voyage andsaid instrument shall produce no effect with respect to third persons if it is notinscribed in the registry of the consulate. 'he consul shall immediately forward a truecopy of the instrument of purchase and sale of the vessel to the registry of vessels ofthe port where said vessel is inscribed and registered.

8n every case the alienation of the vessel must be made to appear with a statement ofwhether the vendor receives its price in whole or in part, or whether he preserves inwhole or in part any claim on said vessel. 8n case the sale is made to a /ilipino, thisfact shall be stated in the certificate of navigation.>hen a vessel, being on a voyage, shall be rendered useless for navigation, thecaptain shall apply to the competent 9udge on court of the port of arrival, should it be inthe 2hilippinesA and should it be in a foreign country, to the consul of the Republic ofthe 2hilippines, should there be one, or, where there is none, to the 9udge or court orto the local authorityA and the consul, or the 9udge or court, shall order an examinationof the vessel to be made.8f the consignee or the insurer should reside at said port, or should haverepresentatives there, they must be cited in order that they may tae part in theproceedings on behalf of whoever may be concerned.4% (R'8C0: 5%&. 8n all 9udicial sales of any vessel for the payment of creditors, thefollowing shall have preference in the order stated=

". 'he credit in favor of the public treasury proven by means of an official certificate ofcompetent authority.. 'he 9udicial costs of the proceedings, according to an appraisement approved bythe 9udge or court.!. 'he pilotage charges, tonnage dues, and the other sea or port charges, proven bymeans of proper certificates of the officers intrusted with the collection thereof.4. 'he salaries of the depositaries and eepers of the vessel and any other expensesfor its preservation from the time of arrival at the port until the sale, which appear tohave been paid or be due by virtue of an account verified and approved by the 9udgeor court.5. 'he rent of the warehouse where the rigging and stores of the vessel have beentaen care of, according to contract.3. 'he salaries due the captain and crew during its last voyage, which shall be verifiedby means of the liEuidation to be made in view of the li sts and of the boos of accountof the vessel, approved by the chief of the Bureau of 7erchant 7arine, where there is

one, and in his absence by the consul or 9udge or court.. 'he reimbursement for the goods of the freight which the captain may have sold inorder to repair the vessel, provided that the sale has been ordered through a 9udicialproceedings held with the formalities reEuired in such cases, and recorded in thecertificate of registry of the vessel.%. 'he part of the price which has not been paid to the said vendor, the unpaid creditsfor materials and labor in the construction of the vessel, when it has not navigated,and those arising from the repair and eEuipment of the vessels and from itsprovisioning with victuals and fuel during the last voyage.8n order that the credits provided for in this subdivision may en9oy this preference, theymust appear by contracts recorded in the registry of vessels, or if they were contractedfor the vessel while on a voyage and said vessel has not returned to the port where itis registered, they must be made with the authori)ation reEuired for such cases andannotated in the certificate of registration of the vessel.$. 'he amount borrowed on bottomry on the hull, eel, tacle, and stores of the vessel

before its departure, proven by means of the contract executed according to law andrecorded in the registry of vesselsA those borrowed during the voyage with the

authori)ation mentioned in the preceding subdivision, satisfying the same reEuisitesAand the insurance premium, proven by the insurance policy or a certificate taen fromthe boos of the broer."&. 'he indemnity due the shipper for the value of the goods shipped which were notdelivered to the consignees, or for averages suffered for which the vessel i s liable,provided that either appear in a 9udicial or arbitration decision.4$ .R. 6o. "4!%, Ro((o, p. 5".5& *:C'8#6 ". 2referred 7aritime 0ien, 2riorities, #ther 0iens.+a pon the sale ofany mortgaged vessel in any extra-9udicial sale or by order of a district court of the2hilippines in any suit in rem in admiralty for the enforcement of a preferred mortgagelien thereon, all pre-existing claims in the vessel, i ncluding any possessory common-

law lien of which a lienor is deprived under the provisions of *ection "3 of this


24/33

+4 (ny amount reEuired to be endorsed by the provisions of paragraphs +e or +f ofthis *ection.+d *uch endorsement shall be made +" by the Coast uard ?:R:/#R:, it is most respectfully prayed that 9udgment be rendered in favor ofplaintiff 2oliand 8ndustrial 0imited ordering=. . . ..


25/33

G.R. No. :7::7:7:: October 2, 1:1

TEO#ORO R. "ANGCO, ETC., petitioner,vs.!ANUE ASERNA, ET A., respondents.

C(ro M. Recto for $etitio%er.Po6e(( > Ve& for re)$o%4e%t).

!ORAN, J.:

(t about one oScloc in the afternoon of 7ay 3, "$, the steamer S.S. Ne&ro),belonging to petitioner here, 'eodoro R. Dangco, left the port of Romblon on its retuntrip to 7anila. 'yphoon signal 6o. was then up, of which fact the captain was dulyadvised and his attention thereto called by the passengers themselves before thevessel set sail. 'he boat was overloaded as indicated by the loadline which was 3 to inches below the surface of the water. Baggage, truns and other eEuipments wereheaped on the upper dec, the hold being paced to capacity. 8n addition, the vesselcarried thirty sacs of crushed marble and about one hundred sacs of copra andsome lumber. 'he passengers, numbering about "%&, were overcrowded, the vesselSscapacity being limited to only "! passengers. (fter two hours of sailing, the boatencountered strong winds and rough seas between the islands of Banton and *imara,

and as the waves splashed the ladiesS dresses, the awnings were lowered. (s the seabecame increasingly violent, the captain ordered the vessel to turn left, evidently toreturn to port, but in the manuever, the vessel was caught sidewise by a big wavewhich caused it to capsi)e and sin. 7any of the passengers died in the mishap,among them being (ntolin (ldaTa and his son @ictorioso, husband and son,respectively, of :milia Bienvenida who, together with her other children and a brother-in-law, are respondents in .R. 6o. 444A Casiana 0aserna, the daughter ofrespondents 7anuel 0aserna and 2.(. de 0aserna in .R. 444%A and enaroBasaTa, son of /ilomeno BasaTa, respondent in .R. 6o. 444$. 'hese respondentsinstituted in the Court of /irst 8nstance of Capi) separate civil actions againstpetitioner here to recover damages for the death of the passengers aforementioned.'he court awarded the heirs of (ntolin and @ictorioso (ldana the sum of 2,&&&A theheirs of Casiana 0aserna, 25$&A and those of enaro Basana, also 25$&. (fter the

rendition of the 9udgment to this effcet, petitioner, by a verified pleading, sought toabandon th evessel to the plainitffs in the three cases, together with all itseEuipments, without pre9udice to his r ight to appeal. 'he abandonment having beendenied, an appeal was taen to the Court of (ppeals, wherein all the 9udgmnets wereaffirmed except that which sums was increased to 24,&&&. 2etitioner, now deceased,appealed and is here represented by his legal representative.

Brushing aside the incidental issues, the fundamental Euestion here raised is= 7aythe shipowner or agent, notwithstanding the total loss of the vessel as a result of thenegligence of its captain, be properly held liable in damages for the conseEuent deathof its passengersU >e are of the opinion and so hold that this Euestion is controlledby the provisions of article 5% of the Code of Commerce. *aid article reads=

'he agent shall also be civilly liable for the indemnities in favor of thirdpersons which arise from the conduct of the captain in the care of the goods

which the vessel carriedA but he may exempt himself therefrom byabandoning the vessel with all her eEuipments and the freight he may haveearned during the voyage.

'he provisions accords a shipowner or agent the right of abandonmentA and bynecessary implication, his liability is confined to that which he is entitled as of right toabandon 1the vessel with all her eEuipments and the freight it may have earnedduring the voyage.1 8t is true that the article appears to deal only with the limitedliability of shipowners or agents for damages arising from the misconduct of the

captain in the care of the goods which the vessel carries, but this is a mere deficiencyof language and in no way indicates the true extent of such liability. 'he consensus ofauthorities is to the effect that notwithstanding the language of the aforeEuotedprovision, the benefit of limited liability therein provided for, applies in all caseswherein the shipowner or agent may properly be held liable for the negligent or illicitacts of the captain.


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principles of maritime law that by agent it is to be understood the personintrusted with the provisioning of the vessel, or the one who represents her inthe port in which she happens to be. 'his person is the only one whorepresents the vessel that is to say, the only one who represents theinterests of the owner of the vessel. 'his provision has therefore cleared thedoubt which existed as to the extent of the liability, both of the agent and ofthe owner of the vessel. *uch liability is lim ited by the proposed code tothe '("e of t#e 'e))e( and other things appertaining thereto.

8nP#i(i$$i%e S#i$$i%& Co. '). Grci

+3 2hil., %", %4-%3, we have expressedourselves in such a comprehensive manner as to leave no room for doubt on theapplicability of our rtio 4eci4e%4i not only to cases of collision but also to those ofshipwrecs, etc. >e said=

'his is the difference which exists between the lawful acts and lawfulobligations of the captain and the liability which he incurs on account of anyunlawful act committed by him. 8n the first case, the lawful acts andobligations of the captain beneficial to the vessel may be enforced asagainst the agent for the reason that such obligations arise from te thecontract of agency +provided, however, that the captain does not exceed hisauthority, while as to any liability incurred by the captain through hisunlawful acts, the ship agent is simply subsidiarily civilly liable. 'his liabilityof the agent is limited to the vessel and it does not extend further. /or thisreason the Code of Commerce maes the agent liable to the extent of thevalue of the vessel, as the codes of the principal maritime nationsprovide 6it# t#e 'e))e( , and not individually. *uch is also the spirit of ourCode.

'he spirit of our code s accurately set forth in a treatise on maritime law,from which we deem proper to Euote the following as the basis of thisdecision=(6$#i(.%et

1'hat which distinguishes the maritime from the civil law and evenfrom the mercantile law in general is the re( %4#$ot#ecr nature of the former, and the many securities of

a re( nature that maritime customs from time immemorial, thelaws, the codes, and the later 9urisprudence, have provided for theprotection of the various and conflicting interests which areventured and rised in maritime expeditions, such as the interestsof the vessel and of the agent, those of the owners of the cargo andconsignees, those who salvage the ship, those who mae loansupon the cargo, those of the sailors and members of the crew as totheir wages, and those of a constructor as to repairs made to thevessel.

1(s evidence of this re( nature of the maritime law we have +" thelimitation of the liability of the agents to the actual value of thevessel and the freight money, and + the right to retain the cargo

and the embargo and detention of the vessel even in cases wherethe ordinary civil law would not allow more than a personal action

against the debtor or person liable. 8t will be observed that theserights are correlative, and naturally so, because if the agent canexempt himself from liability by abandoning the vessel and freightmoney, thus avoiding the possibility of rising his whole fortune inthe business, it is also 9ust that his maritime creditor may for anyreason attach the vessel itself to secure his claim without waiting for a settlement of his rights by a final 9udgment, even to the pre9udiceof a third person.

1'his repeals the civil law to such an extent that, in certain cases,where the mort&&e4 $ro$ert is (o)t no personal action lies againstthe owner or agent of the vessel. /or instance, where the vessel islost the sailors and members of the crew cannot recover theirwagesA in case of collision, the liability of the agent is limited asaforesaid, and in case of shipwrec, those who loan their money onthe vessel and cargo lose all their rights and cannot claimreimbursement under the law.

1'here are two reasons why it is impossible to do away with theseprivileges, to wit= +" 'he ris to which the thing is exposed, and +the re( nature of the maritime law, exclusively re( , according towhich the liability of the parties is l imited to a thing which is at themercy of the waves. 8f the agent is only liable with the vessel andfreight money and both may be lost through the accidents ofnavigation it is only 9ust that the maritime creditor have somemeans to obviating this precarious nature of his rights by detainingthe ship, his only security, before it is lost.

1'he liens, tacit or legal, which may exist upon the vessel andwhich a purchaser of the same would be obliged to respect andrecogni)e are in addition to those existing in favor of the *tate byvirtue of the privileges which are granted to it by all the laws pilot, tonnate, and port dues and other similar charges, the wagesof the crew earned during the last voyage as provided in article 343of the Code of Commerce, salvage dues under article %4, theindemnification due to the captain of the vessel in case his contractis terminated on account of the voluntary sale of the ship and theinsolvency of the owner as provided in article 3&%, and all otherliabilities arising from collisions under articles %! and %!%.1

>e are shared in this conclusion by the eminent commentators on the sub9ect. (gustin @icente y ella, asserting, in his 18ntroduccion al


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responsabilidad del naviero se organi)a de un modo especifico yparticularisimo Eue no encuentra similar en el derecho general de lasobligaciones.

na forma corrientisima de verificarse el comercio maritimo durante laepoca medieval, era prestar un propietario su navio para Eue cargase en elmercancias determinada persona, y se hiciese a la mar, yendo al frente dela expedicion un patron del buEue, Eue llegado al puerto de destino seencargaba de venderlas y retornaba al de salida despues de adEuirir enaEuel otros efectos Eue igualmente revendia a su regreso, verificado lo cuallos beneficios de la expedicion se repartian entre el dueTo del buEue, elcargador y el capitan y tripulantes en la proporcion estipulada. :l derechomaritimo empe)o a considerar la asociacion asi formada como unaverdadera sociedad mercantil, de responsabilidad limitada, y de acuerdocon los principios Eue gobiernan aEuella en los casos de accidentes,aborda9es, naufragios, etc., se resolvia Eue el dueTo del buEue perdia lanave, el cargador las mercancias embarcadas y el capitan y la tripulacion sutraba9o, sin Eue en ningun caso el tercer acreedor pudiese reclamar mayorcantidad de ninguno de ellos, porEue su responsabilidad Euedaba limitada alo Eue cada uno aporto a la sociedad. Recogidas estas ideas en el derechocomercial de tiempos posteriores, la responsabilidad del naviero se edificosobre aEuellos principios, y derogando la norma general civil de Eue delcumplimiento de sus obligaciones responde el deudor con todos sus bienes

presentes y futuros, la responsabilidad maritima se considero siemprelimitadai$)o !"re al patrimonio de mar. D este es el origen de la reglatrascendental de derecho maritimo segun la cual el naviero se libera de todaresponsabilidad abandonando el buEue y el flete a favor de los acreedores.

/rom the E%cic(o$e4i ="ri4ic E)$@o(, @ol. !, p. !4, we read=

(hora bien= Vhasta donde se extiende esta responsabilidad del navieroUVsobre Eue bienes pueden los acreedores resarcirseU :sta es otraespecialidad del 6:R 6#' '# :FC::< 86':R:*'. 'he liability of theowner of any vessel, for any embe))lement, loss, or destruction, by anyperson, of any property, goods, or merchandise, shipped or put on board ofsuch vessel, or for any loss, damage, or in9ury by collision, or for any act,matter or thing, loss, damage, or forfeiture, done, occasioned, or incurredwithout the privity, or nowledge of such owner or owners, shall in no caseexceed the amount or value of the interest of such owner in such vessel, andher freight then pending.

'he policy which the rule is designed to promote is the encouragement of shipbuildingand investment in maritime commerce. +@ide= 6orwich Q 6. D. 'rans.Co. '. >right, )"$rA 'he 7ain '. >illiams, "5 . *. "A 5% C. H. 3!4. (nd it is inthat spirit that the (merican courts construed the 0imited 0iability (ct of Congresswhereby the immunities of the (ct were applied to claims not only for lost goods butalso for in9uries and 1loss of life of passengers, whether arising under the general lawof admiralty, or under /ederal or *tate statutes.1 +'he Cit of Co("mb"), /ed. 43&A'he Lo%&fe((o6 , "&4 /ed. !3&A Butler '. Boston Q *avannah *teamship Co., ! 0aw.ed. "&"A Craig '. Continental 8nsurance Co., !5 0aw. ed. %!3. 'he *upreme Courtof the nited *tates in 6orwich Q 6. D. 'rans. Co. v. >right, %& . *. "&4, & 0aw. ed.5%5, 5%$-5$&, accounting for the history of the principle, clinches our exposition of thesupporting authorities=


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'he history of the limitation of liability of shipowners is matter of commonnowledge. 'he learned opinion of ="4&e >are in the case of T#e Rebecc," >are, "%-"$4, leaves little to be desired on the sub9ect. ?e shows that itoriginated in the maritime law of modern :uropeA that whilst the civil , as wellas the common law, made the owner responsible to the whole extent ofdamage caused by the wrongful act or negligence of the matter or crew, themaritime law only made then liable +if personally free from blame to theamount of their interest in the ship. *o that, if they surrendered the ship, theywere discharged.

rotius, in his law of >ar and 2eace, says that men would be deterred frominvesting in ships if they thereby incurred the apprehension of beingrendered liable to an indefinite amount by the acts of the master and,therefore, in ?olland, they had never observed the Roman 0aw on thatsub9ect, but had a regulation that the ship owners should be bound nofarther than the value of their ship and freight. ?is words are= N'i) et eor"m5"e i% %'i )"%t ,1 1the ship and goods therein.1 But he is speaing of theownerSs interestA and this, as to the cargo, is the freight thereon, and in thatsense he is understood by the commentators. Boulay 2aty,


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G.R. No. )11) *%e 21, 10

HEIRS OF A!PARO #E OS SANTOS, HEIRS OF ERNANIE #EOS SANTOS,HEIRS OF A!ABEA #EOS SANTOS, HEIRS OF ENN" #EOS SANTOS,HEIRS OF !EAN" #EOS SANTOS, HEIRS OF TERESA PA!ATIAN, HEIRS OF#IEGO SAE!, AN# RUBEN RE"ES, petitioners,

vs.HONORABE COURT OF APPEAS AN# CO!PANIA !ARITI!A,respondents.

Se'eri%o . Mc'i%t* =r. for $etitio%er).

Di%&()% L6 ffice for $ri'te re)$o%4e%t.

!E#IA#EA. J .5

'his petition for review on certiorri sees to set aside the decision of the Court of (ppeals in C(-.R. 6o. 5%""%-R affirming the decision in Civil Case 6o. 45$! of thethen Court of /irst 8nstance +now Regional 'rial Court, Branch F8, 7anila which

dismissed the petitionersS claim for damages against Compania 7aritima for the in9uryto and death of the victims as a result of the sining of 7@ 7indoro on 6ovember 4,"$3.

'he trial court found the antecedent facts to be as follows=

'his is a complaint originally filed on #ctober ", "$3% +p. ", rec.and amended on #ctober 4, "$3% +p. "3 rec. by the heirs of ashington, (lan, with many passengers aboard. 8t appears thatsaid vessel met typhoon S>elmingS on the *ibuyan *ea, (lan, atabout 5=&& in the morning of 6ovember 4, "$3 causing the deathof many of its passengers, although about "!3 survived.

7auricio delos *antos declared that on 6ovember , "$3 heaccompanied his common-law wife, (mparo delos *antos, andchildren, namely= Romeo, Hosie, ?ernani, who was "& years old, (bella, years old, 7aria 0emia, 5 years old and 7elany, 5 monthsold, to pier %, 6orth ?arbor, 7anila, to board the 7@ 7indoroSbound for (lan. 8t appears that (mparo delos *antos and the

aforesaid children brought all their belongings, including householdutensils valued at 2 ",&&&.&&, with the intention of living in (lanpermanently.

(s already stated, the boat met typhoon S>elmingS and due to thestrong waves it san causing the drowning of many passengersamong whom were (mparo delos *antos and all the aforesaidchildren. 8t appears also that 'eresa 2amatian and


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with !,&&& cases of beer, one dump truc and $ various goods+:xhs. < and


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in damages based on the principle of limited liability of the shipowner or ship agentunder (rticle 5% of the Code of Commerce.

'he heirs and Reyes now come to s with the following assignment of errors=

:RR#R 8

'?: ?#6#R(B0: R:*2#6 C8@80 C#henever death or in9ury to a passenger occurs, common carriers are presumed tohave been at fault or to have acted negligently unless they prove that they observed

extraordinary diligence as prescribed by (rticles "!! and "55 +(rticle "53, 6ewCivil Code.

uided by the above legal provisions, >e painstaingly reviewed the records of thecase and found imprints of 7aritimaSs negligence which compel s to reverse theconclusion of the appellate court.

7aritima claims that it did not have any information about typhoon S>elmingS untilafter the boat was already at sea. 7odem technology belie such contention. 'he>eather Bureau is now eEuipped with modern apparatus which enables it to detectany incoming atmospheric disturbances. 8n his summary report on tropical cycloneS>elmingS which occurred within the 2hilippine (rea of Responsibility, eather Bureau


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Considering the above report and the evidence on record showing the late departureof the ship at 3=&& p.m. +instead of the scheduled =&& p.m. departure on 6ovember, "$3, >e find it highly improbable that the >eather Bureau had not yet issued anytyphoon bulletin at any time during the day to the shipping companies. 7aritimasubmitted no convincing evidence to show this omission. 8tSs evidence showing the>eather BureauSs forecast of 6ovember !, "$3 is not persuasive. 8t merely indicatedthe weather bulletin of that day. 6owhere could >e find any statement therein fromthe >eather Bureau that it had not issued any forecast on 6ovember 8 and , "$3+:xh. 3, Records, p. 5. *ignificantly, the appellate court found that the shipSscaptain through his action showed prior nowledge of the typhoon. 'he court said=

... 8t cannot be true that he was apprised of the typhoon only atabout ""=&& oScloc the following morning on 6ovember !, "$3when the >eather report was transmitted to him from the >eatherBureau at which time he plotted its position. /or in his radiogramsent to defendant-appelleeSs office in 7anila as early as %=& in themorning of 6ovember !, "$3 +:xh. hile >e agree with the appellate court that the captain was negligent foroverloading the ship, >e, however, rule that 7aritima shares eEually in hisnegligence. >e find that while 7@ 7indoro was already cleared by the Bureau ofCustoms and the Coast uard for departure at =&& p.m. the shipSs departure was,however, delayed for four hours. 7aritima could not account for the delay because itneither checed from the captain the reasons behind the delay nor sent itsrepresentative to inEuire into the cause of such delay. 8t was due to this interim thatthe appellate court noted that 1+indeed there is a great probability that unmanifestedcargo +such as dump truc, ! toyota cars, steel bars, and 3,&&& beer cases and

passengers +about 4" more than the authori)ed "$! passengers were loadedduring the four +4 hour interval1 +ith theabove finding, >e now come to the damages due to the petitioners. #rdinarily, >ewould remand the case to the trial court for the reception of evidence. Consideringhowever, that this case has been pending for almost twenty-three +! years now andthat since all the evidence had already been presented by both parties and receivedby the trial court, >e resolve to decide the corresponding damages due to petitioners+see *amal v. Court of (ppeals, $$ 2hil. !&A


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delos *antos and her deceased children incurred transportation and incidentalexpenses in connection with the trial of this case in the amount of 25&&.&& while

transpo chap6 cases

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