ABOITIZ SHIPPING V.

NEW INDIA ASSURANCE

FACTS: Societe Francaise Des Colliodes entrusted its cargo containing textile and
auxillary chemicals to a vessel owned by Franco Belgian Services. Such cargo was
consigned to General Textile Inc. Manila, and was insured by respondent New India
Assurance. When it reached Hong Kong, such cargo was transferred to petitioners
vessel. Unfortunately, while en route, the vessels hull lead resulting to the sinking
of the ship. Petitioner notified General Textile Inc of the incident. The latter then
claimed damages from respondent.
Respondent hired a surveyor to investigate the incident. Such surveyor reported
that the vessels seaworthiness was questionable. Respondent then filed a
complaint for damages against petitioner, Franco Belgian Services, and FE Zuellig.
Trial court: petitioner liable
CA: Affirmed TCs ruling
ISSUE: W/N THE LIMITED LIABILITY DOCTRINE, WHICH LIMITS RESPONDENTS AWARD
OF DAMAGES TO ITS PRO RATA SHARE IN THE INSURANCE PROCEEDS, APLIES IN
THIS CASE?
RULING: NO.
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In Monarch, the SC ruled that the sinking of the vessel in such case was not
due to a fortuitous event (this is where they like declared the limits of the
limited liability doctrine
An exception to the limited liability doctrine is when the damage is due to the
fault of the ship owner or to the concurrent negligence of the ship owner and
the captain. In this case, the ship owner shall be liable to the full extent of the
damages
Common carriers are bound to exercise 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.
In the case at bar, petitioner has the burden of showing that it
exercised extraordinary diligence in the transport of goods it had on
board in order to invoke the limited liability doctrine
Petitioner needs to prove that the unseaworthiness of the vessel
was not due to its fault or negligence
The Board of Marine Inquiry report (vessel daw was seaworthy) is
not always binding on the courts, especially when the trial courts
findings were contrary to that of the BMI (EVIDENCE ON RECORD

SHOWED THAT THE WEATHER WAS MODERATE WHEN THE VESSEL

SANK)
Determination of the civil liability of common carriers lies with the
courts
PETITION DENIED