Facts:

This case involves three consolidated petitions for review on certiorari filed by Aboitiz Shipping Corporation (referred to as “Aboitiz”) against various respondents relating to a maritime incident that occurred on October 31, 1980, when M/V P. Aboitiz sank. The respondents include Malayan Insurance Company, Inc., Compagnie Maritime des Chargeurs Reunis, F.E. Zuellig (M), Inc., Asia Traders Insurance Corporation, Allied Guarantee Insurance Corporation, and Equitable Insurance Corporation. Following the sinking, multiple actions were initiated by shippers and insurance companies seeking recovery for the loss of cargoes, supported by bills of lading and insured under marine policies. The Regional Trial Courts (RTCs) in Manila awarded amounts totaling P639,862.02, P646,926.30, and P87,633.81 in the respective cases of G.R. Nos. 121833, 130752, and 137801. Aboitiz contended that its liability should be limited under the real and hypothecary doctrine, arguing

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Facts:

Consolidated Petitions and Underlying Incident

• The case involves three consolidated Rule 45 petitions (G.R. Nos. 121833, 130752, and 137801) arising from the sinking of M/V P. Aboitiz on October 31, 1980 in the South China Sea.
• Aboitiz Shipping Corporation, the petitioner, faced multiple collection suits filed by shippers and insurers seeking recovery of the monetary value of cargoes lost during the sinking.
• The petitions stemmed primarily from separate civil actions where trial courts rendered judgments awarding different amounts for the lost cargoes.

Facts of the Separate Cases

• G.R. No. 121833
• Respondent Malayan Insurance Company, Inc. initiated five consolidated actions against various defendants, including Aboitiz, based on marine cargo policies issued to insured shippers.
• The Regional Trial Court (RTC) of Manila, Branch 54, issued judgments on multiple cases with aggregate awards amounting to a significant sum, with findings that implicated Aboitiz in liability.
• On appeal, the Court of Appeals affirmed the RTC decision, basing its ruling on prior decisions such as the 1990 GAFLAC case, which highlighted issues of seaworthiness and the operational duty of the crew and officers.

Procedural History and Key Developments

• During the pendency of these petitions, Aboitiz consistently raised defenses including lack of jurisdiction, lack of cause of action, prescription, and the force majeure claim.
• Aboitiz’s appeal efforts included motions for reconsideration at both the Court of Appeals and the Supreme Court levels, aimed at invoking the real and hypothecary doctrine to limit its liability.
• The Supreme Court previously addressed similar issues in the 1993 GAFLAC case, which articulated that the limited liability rule could only be applied if there was no finding of negligence on the part of the shipowner or agent.

Impact of Related Jurisprudence and Subsequent Actions

• The 1993 GAFLAC decision established that claims arising from the sinking of a vessel should be confined to the vessel’s declared value, provided no negligence was found.
• Subsequent decisions, such as in Monarch Insurance and New India, clarified that the doctrine of limited liability is applicable only when extraordinary diligence is shown and no negligence is present.
• In the present consolidated petitions, all lower courts had found Aboitiz negligent—whether in the failure to provide a seaworthy vessel or to exercise the required extraordinary diligence—thus affecting the applicability of the doctrine.

Issue:

Applicability of the Real and Hypothecary Doctrine (Limited Liability Rule)

• Whether Aboitiz Shipping Corporation can invoke the limited liability rule to confine its liability solely to the value of the vessel (or its insurance proceeds) and pending freightage.
• Whether the doctrine’s protective effect is available in light of the established findings of negligence against Aboitiz by the RTC and affirmed by the Court of Appeals.

Determination of Negligence and Its Consequences

• Whether the factual record supports a finding of actual negligence on the part of Aboitiz directly leading to the sinking of M/V P. Aboitiz.
• Whether such a finding precludes the application of the limited liability doctrine, thereby rendering Aboitiz responsible for the full value of the lost cargoes.

Scope of Liability Amid Multiple Claims

• Whether the computation of Aboitiz’s liability should be based on the declared value of shipments, as maintained in prior cases (e.g., the 1993 GAFLAC decision).
• How the presence of numerous claims from shippers and insurers affects the determination of the shipowner’s pro-rated share of liability.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)