Case Summary (G.R. No. 131166)
Factual Background and Collision
On December 19, 1987, MT Vector departed Limay, Bataan, bound for Masbate. On December 20, 1987, MV Doña Paz sailed from Tacloban for Manila. At about 10:30 p.m. on December 20, the two vessels collided near Dumali Point, resulting in the ignition of MT Vector’s cargo and one of the worst maritime disasters in Philippine history.
Board of Marine Inquiry Findings
The Board of Marine Inquiry (BMI Case No. 653-87) concluded on March 22, 1988, that MT Vector, its operator Francisco Soriano, and Vector Shipping Corporation were at fault for the collision. The BMI report formed the factual and technical basis for subsequent civil liability proceedings.
Trial Court Proceedings and Third-Party Complaint
In February 1989 the heirs of Sebastian and Corazon Caáezal sued Sulpicio for damages under a contract of carriage theory. Sulpicio filed a third-party complaint against Vector, Soriano, and Caltex, alleging that Caltex chartered an unseaworthy vessel with gross bad faith. The Regional Trial Court granted plaintiffs’ recovery against Sulpicio and dismissed Sulpicio’s third-party complaint against Caltex for lack of proof.
Court of Appeals Decision and Apportionment of Liability
On appeal, the Court of Appeals (April 15, 1997) affirmed plaintiffs’ damages but modified the judgment to hold Vector and Caltex jointly liable to reimburse half each of the amounts Sulpicio was ordered to pay. The appellate court found Caltex negligent in shipping flammable cargo aboard MT Vector despite knowledge of its deficiencies.
Issue: Charterer’s Liability under Maritime Law
The core issue is whether a charterer under a voyage charter is liable to third parties for damages caused by the carrier’s negligence. Caltex contended that under Philippine maritime law and the 1987 Constitution’s public service doctrine, only the vessel owner-operator, not the charterer, may be held liable for collision damages.
Nature of Charter Party and Common Carrier Status
Under Philippine Admiralty and Maritime Law and Civil Code provisions, a contract of affreightment (voyage charter) hires only the vessel; the owner remains in possession and control of ship, stores, crew, and navigation. MT Vector continued as a common carrier despite the charter, retaining its public duty and implied warranties.
Duties and Liability of a Common Carrier
Article 1732–1733 and 1755 of the Civil Code, and Section 3(1) of the Carriage of Goods by Sea Act, impose on common carriers an implied warranty of seaworthiness and a duty to properly man, equip, and supply the ship. Failure to exercise due diligence renders the carrier—and not a mere charterer—liable for quasi-delictual damages to persons or property.
Civil Code Principles on Negligence and Quasi-Delict
Articles 20, 2176, and 1173 of the Civil Code define liability for negligent or willful acts causing damage. Negligence requires omission of diligence corresponding to the nature of the obligation. In maritime contexts, shippers and passengers are not obligated to inspect carrier documents or qualifications, relying instead on the carrier’s public service obligation.
Analysis of Charterer’s Diligence Obligations
Caltex as voyage charterer owed only ordinary diligence in selecting MT Vector, and evidence showed it trusted longstanding partner Vector and relied on Coast Gua
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Facts
- On December 19, 1987, MT Vector, a tramping motor tanker owned and operated by Vector Shipping Corporation, departed Limay, Bataan at about 8:00 p.m. under a voyage charter agreement with Caltex (Philippines), Inc., carrying 8,800 barrels of petroleum products.
- On December 20, 1987, at about 6:30 a.m., MV Doña Paz, a passenger and cargo vessel owned and operated by Sulpicio Lines, Inc., left Tacloban bound for Manila with 59 crew and approximately 1,493 manifest passengers (an estimated total of 4,000 onboard).
- At about 10:30 p.m. on December 20, 1987, the two vessels collided in the vicinity of Dumali Point between Marinduque and Oriental Mindoro. The collision and ensuing fire caused the deaths of almost all passengers and crew of MV Doña Paz and all but two crew members of MT Vector. Only 24 persons survived.
- Among the unmanifested victims were Sebastian Caáezal (47) and his daughter Corazon (11).
- On March 22, 1988, the Board of Marine Inquiry (BMI Case No. 653-87) found MT Vector, its registered operator Francisco Soriano, and Vector Shipping Corporation at fault for the collision.
Procedural History
- February 13, 1989: Teresita and Sotera Caáezal filed a complaint for damages against Sulpicio Lines before the Regional Trial Court (RTC), Branch 8, Manila.
- Sulpicio Lines thereafter filed a third-party complaint against Francisco Soriano, Vector Shipping Corporation, and Caltex (Philippines), Inc., alleging negligent chartering of an unseaworthy vessel.
- September 15, 1992: The RTC rendered judgment in favor of the Caáezal plaintiffs and dismissed Sulpicio’s third-party complaint against Caltex and Vector Shipping for lack of substantiation.
- April 15, 1997: The Court of Appeals modified the RTC decision, ordering Sulpicio Lines to pay damages to the Caáezal heirs and holding Vector Shipping and Caltex jointly liable to indemnify Sulpicio for one-half each of the damages.
- September 30, 1999: The Sup