Aboitiz v New India G..R. No. 156978 May 2, 2006

J. Quisimbing

Facts:

Textile cargo owned by General Textile was shipped to Manila using M/V P. Aboitiz. Before departing, the vessel was advised that it was safe to travel to its destination, but while at sea, the vessel received a report of a typhoon moving within its path.  It was at the edge of a typhoon when its hull leaker. The vessel sank, but the captain and his crew were saved.

The captain filed his “Marine Protest”, stating that the weather was “moderate breeze, small waves, becoming longer, fairly frequent white horse

General Textile lodged a claim with respondent for the amount of its loss. Respondent paid General Textile and was subrogated to the rights of the latter.

After investigation, the cause was found to be the vessel’s unsearworthiness.

General filed a complaint with Aboitiz and the trial court consequently ruled in favor of the former.

Petitioner elevated the case to the Court of Appeals, which in turn, affirmed the trial court’s decision. It moved for reconsideration but the same was denied. Hence, this petition for review

Issue:

WON the limited liability doctrine applies in this case

Held: No

Ratio:

Where the shipowner fails to overcome the presumption of negligence, the doctrine of limited liability cannot be applied.

From the nature of their business and for reasons of public policy, common carriers are bound to observe extraordinary diligence over the goods they transport according to all the circumstances of each case. In the event of loss, destruction or deterioration of the insured goods, common carriers are responsible, unless they can prove that the loss, destruction or deterioration was brought about by the causes specified in Article 1734 of the Civil Code. In all other cases, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence. Moreover, where the vessel is found unseaworthy, the shipowner is also presumed to be negligent since it is tasked with the maintenance of its vessel.  Though this duty can be delegated, still, the shipowner must exercise close supervision over its men.

In the present case, petitioner has the burden of showing that it exercised extraordinary diligence in the transport of the goods it had on board in order to invoke the limited liability doctrine.  Differently put, to limit its liability to the amount of the insurance proceeds, petitioner has the burden of proving that the unseaworthiness of its vessel was not due to its fault or negligence. 

Considering the evidence presented and the circumstances obtaining in this case, we find that petitioner failed to discharge this burden. Both the trial and the appellate courts, in this case, found that the sinking was not due to the typhoon but to its unseaworthiness.  Evidence on record showed that the weather was moderate when the vessel sank.  These factual findings of the Court of Appeals, affirming those of the trial court are not to be disturbed on appeal, but must be accorded great weight.  These findings are conclusive not only on the parties but on this Court as well.