Case Digest (G.R. No. 156978)
Facts:
Aboitiz Shipping Corporation v. New India Assurance Company, Ltd., G.R. No. 156978, May 02, 2006, Supreme Court Third Division, Quisumbing, J., writing for the Court.The dispute arose from the sinking of the vessel M/V P. Aboitiz on October 31, 1980, while carrying transshipped cargo originally loaded in France by Societe Francaise Des Colloides, consigned to General Textile, Inc. in Manila and insured by New India Assurance Company, Ltd. The cargo was transferred at Hong Kong from a Franco-Belgian Services, Inc. ship to M/V P. Aboitiz for shipment to Manila. Prior to departure, the Japanese Meteorological Center advised the vessel that it was safe to proceed; subsequently the vessel received a report of a typhoon in its general path and altered course to avoid it but, while on the fringe, the hull leaked and the vessel sank. The master and crew survived; the master later filed a Marine Protest describing weather as moderate at the time of foundering.
After the sinking Aboitiz notified the consignee of total loss; General Textile filed a claim with New India, which paid and was subrogated to General Textile's rights. New India employed surveyor Perfect, Lambert & Co., whose report attributed the loss to flooding due to the vessel's questionable seaworthiness. New India sued Aboitiz, Franco‑Belgian Services and its local agent F.E. Zuellig, Inc. alleging negligence, unseaworthiness, failure to exercise extraordinary diligence, and breach of contract of carriage. Franco‑Belgian Services and Zuellig denied negligence, invoked fortuitous event, and filed a cross‑claim against Aboitiz; Aboitiz likewise pleaded fortuitous event, seaworthiness, and invoked maritime principles to limit its liability.
Concurrently, a Board of Marine Inquiry (BMI) investigated and exonerated the captain and crew, declared the vessel seaworthy, and attributed the sinking to exposure to the approaching typhoon; Aboitiz did not initially disclose the BMI proceedings to the trial court. On November 20, 1989, the Regional Trial Court of Manila (Civil Case No. 82‑1475) ruled for New India, finding liability for the total value of the lost cargo (P142,401.60) plus legal interest, attorney’s fees and costs, and dismissed claims against Franco and Zuellig. On appeal, the Court of Appeals in CA‑G.R. CV No. 28770 affirmed the trial court’s decision in a decision dated August 29, 2002 and denied reconsideration on January 23, 2003, holding the BMI proceedings were administrative and unilateral and thus not binding on the courts.
Aboitiz filed a petition for review on certiorari with the Supreme Court, principally arguing that the Court of Appeals erred in failing to apply the doctrine of limited liability under Arts. 587, 590 and 837 of the Code of Commerce (i.e., to limit New India’s recovery to its pro‑rata sh...(Subscriber-Only)
Issues:
- Are the findings and exoneration by the Board of Marine Inquiry binding on the courts with respect to civil liability for the loss of the cargo?
- Did the doctrine of limited liability (real and hypothecary nature of maritime law) apply so that respondent's recovery must be limited to its pro‑rata share in...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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