CASE DIGEST (Transportation Law): Aboitiz vs.

CA
ABOITIZ SHIPPING CORPORATION vs. COURT OF APPEALS, LUCILA C. VIANA, SPS. ANTONIO VIANA
and GORGONIA VIANA, and PIONEER STEVEDORING CORPORATION
(G.R. No. 84458 November 6, 1989)
FACTS:
Anacleto Viana boarded the vessel M/V Antonia, owned by Aboitiz Shipping Corporation, at the port at San
Jose, Occidental Mindoro, bound for Manila. After said vessel had landed, the Pioneer Stevedoring
Corporation took over the exclusive control of the cargoes loaded on said vessel pursuant to the Memorandum
of Agreement between Pioneer and petitioner Aboitiz.
The crane owned by Pioneer was placed alongside the vessel and one (1) hour after the passengers of said
vessel had disembarked, it started operation by unloading the cargoes from said vessel. While the crane was
being operated, Anacleto Viana who had already disembarked from said vessel obviously remembering that
some of his cargoes were still loaded in the vessel, went back to the vessel, and it was while he was pointing
to the crew of the said vessel to the place where his cargoes were loaded that the crane hit him, pinning him
between the side of the vessel and the crane. He was thereafter brought to the hospital where he later expired
three (3) days thereafter.
Private respondents Vianas filed a complaint for damages against petitioner for breach of contract of carriage.
Aboitiz denied responsibility contending that at the time of the accident, the vessel was completely under the
control of respondent Pioneer Stevedoring Corporation as the exclusive stevedoring contractor of Aboitiz,
which handled the unloading of cargoes from the vessel of Aboitiz.
ISSUE:
Whether or not Aboitiz is negligent and is thus liable for the death.
HELD:
Yes.
x x x [T]he victim Anacleto Viana guilty of contributory negligence, but it was the negligence of Aboitiz in
prematurely turning over the vessel to the arrastre operator for the unloading of cargoes which was the direct,
immediate and proximate cause of the victim's death.
The rule is that the relation of carrier and passenger continues until the passenger has been landed at the port
of destination and has left the vessel owner's dock or premises. 11 Once created, the relationship will not
ordinarily terminate until the passenger has, after reaching his destination, safely alighted from the carrier's
conveyance or had a reasonable opportunity to leave the carrier's premises. All persons who remain on the
premises a reasonable time after leaving the conveyance are to be deemed passengers, and what is a
reasonable time or a reasonable delay within this rule is to be determined from all the circumstances, and
includes a reasonable time to see after his baggage and prepare for his departure. 12 The carrier-passenger
relationship is not terminated merely by the fact that the person transported has been carried to his destination
if, for example, such person remains in the carrier's premises to claim his baggage.
It is apparent from the foregoing that what prompted the Court to rule as it did in said case is the fact of the
passenger's reasonable presence within the carrier's premises. That reasonableness of time should be made
to depend on the attending circumstances of the case, such as the kind of common carrier, the nature of its
business, the customs of the place, and so forth, and therefore precludes a consideration of the time element
per se without taking into account such other factors. It is thus of no moment whether in the cited case of La
Mallorca there was no appreciable interregnum for the passenger therein to leave the carrier's premises
whereas in the case at bar, an interval of one (1) hour had elapsed before the victim met the accident. The
primary factor to be considered is the existence of a reasonable cause as will justify the presence of the victim
on or near the petitioner's vessel. We believe there exists such a justifiable cause.

It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers of
vessels are allotted a longer period of time to disembark from the ship than other common carriers such as a
passenger bus. With respect to the bulk of cargoes and the number of passengers it can load, such vessels
are capable of accommodating a bigger volume of both as compared to the capacity of a regular commuter
bus. Consequently, a ship passenger will need at least an hour as is the usual practice, to disembark from the
vessel and claim his baggage whereas a bus passenger can easily get off the bus and retrieve his luggage in a
very short period of time. Verily, petitioner cannot categorically claim, through the bare expedient of comparing
the period of time entailed in getting the passenger's cargoes, that the ruling in La Mallorca is inapplicable to
the case at bar. On the contrary, if we are to apply the doctrine enunciated therein to the instant petition, we
cannot in reason doubt that the victim Anacleto Viana was still a passenger at the time of the incident. When
the accident occurred, the victim was in the act of unloading his cargoes, which he had every right to do, from
petitioner's vessel. As earlier stated, a carrier is duty bound not only to bring its passengers safely to their
destination but also to afford them a reasonable time to claim their baggage.

SECOND DIVISION
G.R. No. 74811 September 30, 1988
CHUA YEK HONG, petitioner,
vs.
INTERMEDIATE APPELLATE COURT, MARIANO GUNO, and DOMINADOR OLIT, respondents.
MELENCIO-HERRERA, J.:
Facts:
Petitioner is a duly licensed copra dealer based at Puerta Galera, Oriental Mindoro, while private respondents
are the owners of the vessel, "M/V Luzviminda I," a common carrier engaged in coastwise trade from the
different ports of Oriental Mindoro to the Port of Manila.

In October 1977, petitioner loaded 1,000 sacks of copra, valued at P101,227.40, on board the vessel "M/V
Luzviminda I" for shipment from Puerta Galera, Oriental Mindoro, to Manila. Said cargo, however, did not
reach Manila because somewhere between Cape Santiago and Calatagan, Batangas, the vessel capsized and
sank with all its cargo.
On 30 March 1979, petitioner instituted before the then Court of First Instance of Oriental Mindoro, a
Complaint for damages based on breach of contract of carriage against private respondents (Civil Case No. R3205).
In their Answer, private respondents averred that even assuming that the alleged cargo was truly loaded aboard
their vessel, their liability had been extinguished by reason of the total loss of said vessel.
Trial court: decided in favor of the plaintiffs
Ca: reversed the decision of the trial court and decided that private respondents' liability, as ship owners,
for the loss of the cargo is merely co-extensive with their interest in the vessel such that a total
loss thereof results in its extinction.
Issue: whether or not respondent Appellate Court erred in applying the doctrine of limited
liability under Article 587 of the Code of Commerce as expounded in Yangco vs. Laserna, supra.

Held:
Article 587 of the Code of Commerce provides:
Art. 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons
which may arise from the conduct of the captain in the care of the goods which he loaded on the
vessel; but he may exempt himself therefrom by abandoning the vessel with all the equipments
and the freight it may have earned during the voyage.
The term "ship agent" as used in the foregoing provision is broad enough to include the ship owner (Standard
Oil Co. vs. Lopez Castelo, 42 Phil. 256 [1921]). Pursuant to said provision, therefore, both the ship owner and
ship agent are civilly and directly liable for the indemnities in favor of third persons, which may arise from the
conduct of the captain in the care of goods transported, as well as for the safety of passengers
transported Yangco vs. Laserna, supra; Manila Steamship Co., Inc. vs. Abdulhaman et al., 100 Phil. 32 [1956]).
However, under the same Article, this direct liability is moderated and limited by the ship agent's or ship
owner's right of abandonment of the vessel and earned freight. This expresses the universal principle of limited
liability under maritime law. The most fundamental effect of abandonment is the cessation of the responsibility
of the ship agent/owner (Switzerland General Insurance Co., Ltd. vs. Ramirez, L-48264, February 21, 1980, 96
SCRA 297). It has thus been held that by necessary implication, the ship agent's or ship owner's liability is
confined to that which he is entitled as of right to abandon the vessel with all her equipment and the freight it
may have earned during the voyage," and "to the insurance thereof if any" (Yangco vs. Lasema, supra). In other
words, the ship owner's or agent's 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.
The total destruction of the vessel extinguishes maritime liens as there is no longer any res to which it can attach
(Govt. Insular Maritime Co. vs. The Insular Maritime, 45 Phil. 805, 807 [1924]).

The limited liability rule, however, is not without exceptions, namely: (1) where the injury or death to a
passenger is due either to the fault of the ship owner, or to the concurring negligence of the ship owner and the
captain (Manila Steamship Co., Inc. vs. Abdulhaman supra); (2) where the vessel is insured; and (3) in
workmen's compensation claims Abueg vs. San Diego, supra). In this case, there is nothing in the records to
show that the loss of the cargo was due to the fault of the private respondent as shipowners, or to their
concurrent negligence with the captain of the vessel.
Moreover, Article 1766 of the Civil Code provides:
Art. 1766. In all matters not regulated by this Code, the rights and obligations of common
carriers shall be governed by the Code of Commerce and by special laws.
In other words, the primary law is the Civil Code (Arts. 17321766) and in default thereof, the Code of
Commerce and other special laws are applied. Since the Civil Code contains no provisions regulating liability of
ship owners or agents in the event of total loss or destruction of the vessel, it is the provisions of the Code of
Commerce, more particularly Article 587, that govern in this case.

SECOND DIVISION
[G.R. No. 92735. June 8, 2000]
MONARCH INSURANCE CO., INC., TABACALERA INSURANCE CO., INC and Hon. Judge AMANTE
PURISIMA, petitioners, vs. COURT OF APPEALS and ABOITIZ SHIPPING CORPORATION, respondents.
[G.R. No. 94867. June 8, 2000]
ALLIED GUARANTEE INSURANCE COMPANY, petitioner, vs. COURT OF APPEALS, Presiding Judge,
RTC Manila, Br. 24 and ABOITIZ SHIPPING CORPORATION, respondents.
[G.R. No. 95578. June 8, 2000]
EQUITABLE INSURANCE CORPORATION, petitioner, vs. COURT OF APPEALS, Former First Division
Composed of Hon. Justices RODOLFO NOCON, PEDRO RAMIREZ, and JESUS ELBINIAS and ABOITIZ
SHIPPING CORPORATION, respondents.
DECISION
DE LEON, JR., J.:
Facts:

Facts:
Th
e M/V P. Aboitiz left Hong Kong for Manila at about 7:30 in t he evening of October 29, 1980 after securing a
departureclearance from t he Hong Kong Port Aut hority.

The departure was delayed for two hours because he (Capt. Racines) was observing the direction of t he storm
t hat crossed t he Bicol Region. He proceeded wit h t h
e voyage only after being informed t hat t he storm
had abated.The M/V P. Aboitiz sank at about 7:00 p.m. of October 31, 1980.Justo Iglesias, meteorologist of
PAGASA, testified in bot h
cases t hat during t he inclusive dates of October 28-31, 1980, a stormy weat
her condition prevailed wit hin t he Philippine area of responsibility, particularly along t he sea route from
Hong Kong to Manila, because of
tropical depression "Yoning."
Petitioners Allied and Equitable refuted t he allegation t hat t he M/V P. Aboitiz and its cargo were lost due to
force majeure, relyingmainly on t he marine protest filed by Capt. Racines under
scale No. 4 that describes the sea condition as "moderate breeze," and"small waves becoming longer, fairly
frequent white horses."
Monarch andTabacalera are insurance carriers of lost cargoes.
They indemnified t he shippers and were consequently subrogated to their rights, interests and actions against
Aboitiz. Because Aboitiz refused to compensate Monarch, it filed two complaints against Aboitiz. In its answer
wit
counterclaim, Aboitiz rejected responsibility for t he claims on t he ground t hat t he sinking of its cargo
vesselwas due toforce majeureor an act of God.Aboitiz
had repeatedly failed to appear in court, it t hen allowed Monarch andTabacalera to present evidence
ex-parte
.
The surveyestablished that on her voyage to Manila from Hong Kong, the vessel did not encounter weather so inclement
that Aboitizwould be exculpated from liability for losses.
The survey added t hat t he
seaworthiness of the vessel was in question
especiallybecause t he breaches of t he hull and t he serious flooding of two (2) cargo
holds occurred simultaneously in "seasonal weat her."In due course, t he trial court rendered judgment against
Aboitiz. It was appealed to t he Court of Appeals but t he appeal was dismissed for its failure to file appellant's
brief.Consequently, Monarch and
Tabacalera moved for execution of judgment.
The trial court granted t he motion and issued separate writsof execution. However, Aboitiz,
invoking the real and hypothecary nature of liabilityin maritime law, filed an urgent motion to quash t he
writs of execution.
According to Aboitiz, since its liability is limited to the value of the vessel which was insufficient to satisfy
the aggregate claimsof all 110 claimants, to indemnify Monarch and Tabacalera ahead of the other
claimants would be prejudicial to the latter.
Aboitiz filed wit h
t he Court of Appeals a petition for certiorari and prohibition wit hprayer for preliminary injunction and/or
temporaryrestraining order, t he same was granted by t he court.\
issue:
Whet her or not t he respondent Court of Appeals erred in finding, upon review, t hat Aboitiz is entitled to t he
benefit of t he limitedliability rule.?
Held:
Rule on Limited Liability. The petitioners assert in common that the vessel M/V P. Aboitiz did not sink by
reason of force majeure but because of its unseaworthiness and the concurrent fault and/or negligence of
Aboitiz, the captain and its crew, thereby barring Aboitiz from availing of the benefit of the limited liability
rule.

The principle of limited liability is enunciated in the following provisions of the Code of Commerce:
Art. 587. The shipagent shall also be civilly liable for the indemnities in favor of third persons
which may arise from the conduct of the captain in the care of goods which he loaded on the
vessel; but he may exempt himself therefrom by abandoning the vessel with all the equipments
and the freight it may have earned during the voyage.
Art. 590. The co-owners of a vessel shall be civilly liable in the proportion of their interests in
the common fund for the results of the acts of the captain referred to in Art. 587.
Each co-owner may exempt himself from his liability by the abandonment, before a notary, of
the part of the vessel belonging to him.
Art. 837. The civil liability incurred by shipowners in the case prescribed in this section, shall be
understood as limited to the value of the vessel with all its appurtenances and the freightage
served during the voyage.
Article 837 applies the principle of limited liability in cases of collision, hence, Arts. 587 and 590 embody the
universal principle of limited liability in all cases. In Yangco v. Laserna,[48] this Court elucidated on the import
of Art. 587 as follows:
"The provision accords a shipowner or agent the right of abandonment; and by necessary
implication, his liability is confined to that which he is entitled as of right to abandon-the vessel
with all her equipments and the freight it may have earned during the voyage. It is true that the
article appears to deal only with the limited liability of the shipowners or agents for damages
arising from the misconduct of the captain in the care of the goods which the vessel carries, but
this is a mere deficiency of language and in no way indicates the true extent of such liability. The
consensus of authorities is to the effect that notwithstanding the language of the aforequoted
provision, the benefit of limited liability therein provided for, applies in all cases wherein the
shipowner or agent may properly be held liable for the negligent or illicit acts of the captain."[49]
"No vessel, no liability," expresses in a nutshell the limited liability rule. The shipowners or agents liability is
merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. The total
destruction of the vessel extinguishes maritime liens because there is no longer any res to which it can attach.
[50]
This doctrine is based on the real and hypothecary nature of maritime law which has its origin in the
prevailing conditions of the maritime trade and sea voyages during the medieval ages, attended by innumerable
hazards and perils. To offset against these adverse conditions and to encourage shipbuilding and maritime
commerce it was deemed necessary to confine the liability of the owner or agent arising from the operation of a
ship to the vessel, equipment, and freight, or insurance, if any.[51]
Contrary to the petitioners theory that the limited liability rule has been rendered obsolete by the advances in
modern technology which considerably lessen the risks involved in maritime trade, this Court continues to
apply the said rule in appropriate cases. This is not to say, however, that the limited liability rule is without
exceptions, namely: (1) where the injury or death to a passenger is due either to the fault of the shipowner, or to
the concurring negligence of the shipowner and the captain;[52] (2) where the vessel is insured; and (3) in
workmens compensation claims.[53]

We have categorically stated that Article 587 speaks only of situations where the fault or negligence is
committed solely by the captain. In cases where the ship owner is likewise to be blamed, Article 587 does not
apply. Such a situation will be covered by the provisions of the Civil Code on common carriers.[54]
A finding that a fortuitous event was the sole cause of the loss of the M/V P. Aboitiz would absolve Aboitiz
from any and all liability pursuant to Article 1734(1) of the Civil Code which provides in part that common
carriers are responsible for the loss, destruction, or deterioration of the goods they carry, unless the same is due
to flood, storm, earthquake, lightning, or other natural disaster or calamity. On the other hand, a finding that the
M/V P. Aboitiz sank by reason of fault and/or negligence of Aboitiz, the ship captain and crew of the M/V P.
Aboitiz would render inapplicable the rule on limited liability. These issues are therefore ultimately questions of
fact which have been subject of conflicting determinations by the trial courts, the Court of Appeals and even
this Court.
Vasquez vs CA Case Digest
Vasquez vs. Court of Appeals
(138 SCRA 553)
Facts: MV Pioneer Cebu left the port of Manila and bounded for Cebu. Its officers were aware of the upcoming
typhoon Klaring that is already building up somewhere in Mindanao. There being no typhoon signals on their route,
they proceeded with their voyage. When they reached the island of Romblon, the captain decided not to seek
shelter since the weather was still good. They continued their journey until the vessel reached the island of
Tanguingui, while passing through the island the weather suddenly changed and heavy rains fell. Fearing that they
might hit Chocolate island due to zero visibility, the captain ordered to reverse course the vessel so that they could
weather out the typhoon by facing the strong winds and waves. Unfortunately, the vessel struck a reef near
Malapascua Island, it sustained a leak and eventually sunk.
The parents of the passengers who were lost due to that incident filed an action against Filipinas Pioneer Lines for
damages. The defendant pleaded force majeure but the Trial Court ruled in favor of the plaintiff. On appeal to the
Court of Appeals, it reversed the decision of the lower stating that the incident was a force majeure and absolved
the defendants from liability.
Issue: Whether of not Filipinas Pioneer Lines is liable for damages and presumed to be at fault for the death of its
passenger?
Held: The Supreme Court held the Filipinas Pioneer Lines failed to observe that extraordinary diligence required of
them by law for the safety of the passengers transported by them with due regard for all necessary circumstance
and unnecessarily exposed the vessel to tragic mishap. Despite knowledge of the fact that there was a typhoon,
they still proceeded with their voyage relying only on the forecast that the typhoon would weaken upon crossing the
island of Samar. The defense of caso fortuito is untenable. To constitute caso fortuito to exempt a person from
liability it necessary that the event must be independent from human will, the occurrence must render it impossible
for the debtor to fulfill his obligation in a normal manner, the obligor must be free from any participation or
aggravation to the injury of the creditor. Filipina Pioneer Lines failed to overcome that presumption o fault or
negligence that arises in cases of death or injuries to passengers.