G.R. No. L-82082 - Insular Bank of Asia and America vs. Spouses Salazar

A maritime collision occurred on May 4, 1948, off San Ramon Beach, Zamboanga City.
The collision involved two vessels: the M/S "Bowline Knot" (owned by Manila Steamship Co., Inc.) and the M/L "Consuelo V" (owned by Lim Hong To).
The M/L "Consuelo V" was on a scheduled voyage from the port of Zamboanga City to Siokon, carrying both cargoes and passengers, including the plaintiff Insa Abdulhaman, his wife, and their five children.

The M/L "Consuelo V" departed between 7:00 and 8:00 in the evening under the command of Faustino Macrohon, while towing a kumpit named "Sta. Maria Bay."
The weather was initially good and fair, and passengers had already paid their fare prior to departure.
The M/S "Bowline Knot" was en route from Maribojoc towards Zamboanga City.

Later that evening, between 9:30 and 10:00, dark clouds and a heavy downpour commenced accompanied by gushing winds, creating a choppy and roaring sea.
After about an hour of intense weather, conditions improved to fair despite intermittent showers.
Suddenly, while many passengers were asleep or reclining, a violent collision occurred between the M/L "Consuelo V" and the M/S "Bowline Knot."
The collision resulted in the capsizing of the M/L "Consuelo V," leaving its crew and passengers to fend for their lives in turbulent waters.

Nine passengers were declared dead or missing, including several named individuals (e.g., Maria, Amlasa, Bidoaya, Bidaila, and a six-year-old child whose body was never recovered).
All cargoes aboard the "Consuelo V," including those belonging to the plaintiff (as evidenced in Exhibit "A"), were lost.
Survivors were rescued by the M/S "Bowline Knot" and brought to Zamboanga City.

The Board of Marine Inquiry, as corroborated by the Court of Appeals, found that the collision was due to the negligence of the commanding officers of both vessels.
The negligence was specifically linked to the improper and careless handling of their respective vessels.
Both shipowners were deemed solidarily liable for the damages caused under Article 827 of the Code of Commerce, though an exception was initially made for Lim Hong To due to the sinking of his vessel.

It was noted that the master and the engineer of the M/L "Consuelo V" were not duly licensed.
Lim Hong To admitted to operating the vessel with unlicensed officers, justifying it on financial grounds by claiming insufficient income to afford licensed personnel.
He explicitly assumed "full risk and responsibility" for any accident, damage, or loss as per his letter (Exhibit 2) and the terms stipulated in his special permit (Exhibit 3).

Whether the defense of exercising due diligence in the selection and supervision of employees (as argued under Article 1903 of the Civil Code) is applicable in cases of maritime collisions governed by the Code of Commerce.
Whether such due diligence can exempt a shipowner from liability when negligence results in a maritime tort.

The issue of whether the Manila Steamship Co. can avoid liability for the collision by proving it exercised the diligence of a "good father of a family" in hiring its officers and crew.
The nature of the tort committed – specifically, whether it falls under the civil tort provisions of the Civil Code or as a maritime tort under Articles 826-939 of the Code of Commerce.

Whether Lim Hong To, who operated the vessel with unlicensed officers, can limit his liability to the value of the vessel despite his explicit assumption of "full risk and responsibility."
The consideration of whether the total loss of his vessel qualifies him for the statutory limitation of liability under Article 587 of the Code of Commerce.

The issue regarding the sharing of liability between the two shipowners, given that both vessels were found to be at fault.
How the principles of solidary liability, as provided by Article 827 of the Code of Commerce, apply in the determination of damages to be paid to the plaintiff.