CHUA YEK HONG vs. INTERMEDIATE APPELLATE COURT, MARIANO GUNO, and DOMINADOR OLIT

G.R. No. 74811 September 30, 1988

FACTS:

Petitioner contracted with the herein private respondent to deliver 1,000 sacks of copra, valued at P101,227.40, on board the vessel M/V Luzviminda I owned by the latter. However it did not reach its destination, the vessel capsized and sank with all its cargo.

Petitioner instituted a complaint against private respondent for breach of contract incurring damages.

Private respondent’s defense is 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.

RTC rendered judgment in favor of Chua Yek Hong however CA reversed the decision by applying Article 587 of the Code of Commerce and the doctrine in Yangco vs. Lasema (73 Phil. 330 [1941]) and held 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:

As this Court held:

If the ship owner or agent may in any way be held civilly liable at all for injury to or death of passengers arising from the negligence of the captain in cases of collisions or shipwrecks, his liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. (Yangco vs. Laserna, et al., supra).

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. The judgment sought to be reviewed is hereby AFFIRMED