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Aboitiz v. CA
Aboitiz v. CA
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SUPREME COURT REPORTS ANNOTATED VOLUME 569 5/26/17, 14:00
resolution of all the other similar claims arising from the sinking of
M/V P. Aboitiz. Considering that the claims against Aboitiz had
reached more than 100, the Court found it necessary to collate all
these claims before their payment from the insurance proceeds of
the vessel and its pending freightage. As a result, the Court
exhorted the trial courts before whom similar cases remained
pending to proceed with trial and adjudicate these claims so that
the pro-rated share of each claim could be determined after all the
cases shall have been decided.
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* SECOND DIVISION.
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findings of the courts below that both Aboitiz and the crew failed to
ensure the seaworthiness of the M/V P. Aboitiz.
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TINGA,J.:
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Antecedents
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2 Rollo (G.R. No. 121833), p. 17. Marine Cargo Policy Nos. M/LP-001-
02343, M/RN-001-03595, M/RN-001-03573, M/LP-051-00205, M/LP-001-
02341 and M/RN-001-03641.
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an amount exceeding $500 per package of lawful money of the United States, or
in case of goods not shipped in packages, per customary freight unit, or the
equivalent of that sum in other currency, unless the nature and value of such
goods have been declared by the shipper before shipment and inserted in the bill
of lading. This declaration, if embodied in the bill of lading, shall be prima facie
evidence, but shall not be conclusive on the carrier. x x x
6 CA Rollo (G.R. No. 121833), pp. 262-271.
7 Rollo (G.R. No. 121833), pp. 12-32.
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8 Id., at p. 19.
9 Id., at pp. 178-179.
10 Id., at p. 208.
11 CA Rollo (CA-G.R. No. 41696), pp. 157-160.
12 Id., at pp. 97-106.
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20 Id., at p. 9.
21 Id., at p. 13.
22 Records (Civil Case No. 138395), pp. 1-13.
23 Id., at pp. 11-14.
24 CA Rollo (CA-G.R. No. 43458-CV), pp. 47-50.
25 Rollo (G.R. No. 137801), pp. 10-27.
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Issues
The principal issue common to all three petitions is
whether Aboitiz can avail limited liability on the basis of
the real and hypothecary doctrine of maritime law.
Corollary to this issue is the determination of actual
negligence on the part of Aboitiz.
These consolidated petitions similarly posit that
Aboitizs 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
Courts ruling in the 1993 GAFLAC case.
Respondents in G.R. No. 121833 counter that the limited
liability rule should not be applied because there was a
finding of negligence in the care of the goods on the part of
Aboitiz based on this
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26 Id.
27 Id., at pp. 159-166.
28 Id., at pp. 174-175.
29 Id., at pp. 33-45.
30 Id., at p. 35.
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that the vessel was not seaworthy and that Aboitiz failed to
exercise extraordinary diligence in the handling of the
cargoes. This being the law of the case, Aboitiz should not
be entitled to the limited liability rule as far as this petition
is concerned, respondents contend.
Ruling of the Court
These consolidated petitions are just among the many
others elevated to this Court involving Aboitizs liability to
shippers and insurers as a result of the sinking of its
vessel, M/V P. Aboitiz, on 31 October 1980 in the South
China Sea. One of those petitions is the 1993 GAFLAC
case, docketed as G.R. No. 100446.31
The 1993 GAFLAC case was an offshoot of an earlier
final and executory judgment in the 1990 GAFLAC case,
where the General Accident Fire and Life Assurance
Corporation, Ltd. (GAFLAC), as judgment obligee therein,
sought the execution of the monetary award against
Aboitiz. The trial court granted GAFLACs prayer for
execution of the full judgment award. The appellate court
dismissed Aboitizs petition to nullify the order of
execution, prompting Aboitiz to file a petition with this
Court.
In the 1993 GAFLAC case, Aboitiz argued that the real
and hypothecary doctrine warranted the immediate stay of
execution of judgment to prevent the impairment of the
other creditors shares. Invoking the rule on the law of the
case, private respondent therein countered that the 1990
GAFLAC case had already settled the extent of Aboitizs
liability.
Following the doctrine of limited liability, however, the
Court declared in the 1993 GAFLAC case that claims
against Aboitiz
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31 Supra note 1.
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The ruling in the 1993 GAFLAC case cited the real and
hypothecary doctrine in maritime law that the shipowner
or agents liability is merely co-extensive with his interest
in the vessel such that a total loss thereof results in its
extinction. No vessel, no liability expresses in a nutshell
the limited liability rule.34
In this jurisdiction, the limited liability rule is embodied
in Articles 587, 590 and 837 under Book III of the Code of
Commerce, thus:
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36 Id.
37 Vasquez v. Court of Appeals, G.R. No. L-42926, 13 September 1985;
138 SCRA 553, 559.
38 Philamgen v. Court of Appeals, 339 Phil. 455, 463; 273 SCRA 262,
271 (1997).
39 Negros Navigation v. Court of Appeals, 346 Phil. 551, 565; 281
SCRA 534, 544 (1997).
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43 Id., at p. 759.
44 G.R. No. 156978, 02 May 2006, 488 SCRA 563.
45 Id., at p. 573.
46 Id., at pp. 570-571.
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