GR 47447 47449; (October, 1941) (Digest)
G.R. No. 47447 -47449. October 29, 1941.
TEODORO R. YANGCO, ETC., petitioner, vs. MANUEL LASERNA, ET AL., respondents.
FACTS
On May 26, 1927, the steamer S.S. Negros, owned by petitioner Teodoro R. Yangco, departed from Romblon for Manila despite Typhoon Signal No. 2 being hoisted. The vessel was overloaded, with its loadline 67 inches below the water surface, baggage heaped on the upper deck, the hold packed, and additional cargo of marble, copra, and lumber. It carried about 180 passengers, exceeding its capacity of 123. Two hours into the voyage, between Banton and Simara islands, the vessel encountered strong winds and rough seas. While attempting to turn back to port, it was struck sideways by a big wave, capsized, and sank, resulting in numerous deaths, including Antolin Aldaña, Victorioso Aldaña, Casiana Laserna, and Genaro Basaña. The heirs of the deceased filed separate civil actions for damages in the Court of First Instance of Capiz, which awarded sums to the plaintiffs. Petitioner sought to abandon the vessel to the plaintiffs, but the abandonment was denied. The Court of Appeals affirmed the judgments, increasing one award. Petitioner appealed to the Supreme Court.
ISSUE
May a shipowner or agent be held liable in damages for the death of passengers resulting from the captain’s negligence, despite the total loss of the vessel?
RULING
No. The Supreme Court reversed the lower courts’ decisions and absolved petitioner of liability. The Court held that the liability of a shipowner or agent in such cases is governed by Article 587 of the Code of Commerce, which limits liability to the value of the vessel, its equipment, and freight earned during the voyage. This principle of limited liability applies universally to all cases where the shipowner may be held liable for the negligent or illicit acts of the captain, including incidents of shipwreck. The Court emphasized the “real and hypothecary nature” of maritime law, which confines the shipowner’s liability to his interest in the vessel. Since the S.S. Negros was totally lost, any liability was extinguished with the vessel, rendering abandonment unnecessary. The Court noted that while the vessel was a common carrier and the relationship was based on a contract of carriage, maritime law operates to limit liability to the value of the vessel or its insurance, and no insurance was indicated in this case.