Extent of liability of the shipowner and ship agent
2 Aboitiz Shipping Corp. v. CA
G.R. Nos. 121833, 130752, 137801 October 17, 2008
TINGA, J.:
FACTS
Before this Court are three consolidated Rule 45 petitions all involving the issue of whether the real
and hypothecary doctrine may be invoked by the shipowner in relation to the loss of cargoes
occasioned by the sinking of M/V P. Aboitiz on 31 October 1980. The petitions filed by Aboitiz
Shipping Corporation (Aboitiz) commonly seek the computation of its liability in accordance with the
Court’s pronouncement in Aboitiz Shipping Corporation v. General Accident Fire and Life Assurance
Corporation, Ltd.1 ("the 1993 GAFLAC case").
The three petitions stemmed from some of the several suits filed against Aboitiz before different
regional trial courts by shippers or their successors-in-interest for the recovery of the monetary value
of the cargoes lost, or by the insurers for the reimbursement of whatever they paid. The trial courts
awarded various sums to various claimants
These consolidated petitions similarly posit that Aboitiz’s liability to respondents should be limited to
the value of the insurance proceeds of the lost vessel plus pending freightage and not correspond to
the full insurable value of the cargoes paid by respondents, based on the Court’s ruling in the
1993 GAFLAC case.
ISSUE
whether Aboitiz can avail limited liability on the basis of the real and hypothecary doctrine of
maritime law.
ruling
Aboitiz is not entitled to the limited liability rule and is, therefore, liable for the value of the lost
cargoes as so duly alleged and proven during trial.
A perusal of the decisions of the courts below in all three petitions reveals that there is a categorical
finding of negligence on the part of Aboitiz. For instance, in G.R. No. 121833, the RTC therein
expressly stated that the captain of M/V P. Aboitiz was negligent in failing to take a course of action
that would prevent the vessel from sailing into the typhoon. In G.R. No. 130752, the RTC concluded
that Aboitiz failed to show that it had exercised the required extraordinary diligence in steering the
vessel before, during and after the storm. In G.R. No. 137801, the RTC categorically stated that the
sinking of M/V P. Aboitiz was attributable to the negligence or fault of Aboitiz. In all instances, the
Court of Appeals affirmed the factual findings of the trial courts.
The finding of actual fault on the part of Aboitiz is central to the issue of its liability to the
respondents. Aboitiz’s contention, that with the sinking of M/V P. Aboitiz, its liability to the cargo
shippers and shippers should be limited only to the insurance proceeds of the vessel absent any
finding of fault on the part of Aboitiz, is not supported by the record. Thus,
The instant petitions provide another occasion for the Court to reiterate the well-settled doctrine of
the real and hypothecary nature of maritime law. As a general rule, a ship owner’s liability is merely
co-extensive with his interest in the vessel, except where actual fault is attributable to the shipowner.
Thus, as an exception to the limited liability doctrine, a shipowner or ship agent may be held liable
for damages when the sinking of the vessel is attributable to the actual fault or negligence of the
shipowner or its failure to ensure the seaworthiness of the vessel. The instant petitions cannot be
spared from the application of the exception to the doctrine of limited liability in view of the
unanimous findings of the courts below that both Aboitiz and the crew failed to ensure the
seaworthiness of the M/V P. Aboitiz.
CONCLUSION
WHEREFORE, the petitions in G.R. Nos. 121833, 130752 and 137801 are DENIED. The decisions
of the Court of Appeals in CA-G.R. SP No. 35975-CV, CA-G.R. SP No. 41696 and CA-G.R. CV No.
43458 are hereby AFFIRMED
