SECOND DIVISIONG.R. No. 198226, July 18, 2014ABOITIZ TRANSPORT SYSTEM CORPORATION AND ABOITIZ SHIPPING CORPORATION, Petitioners,v.CARLOS A. GOTHONG LINES, INC. AND VICTOR S. CHIONGBIAN,Respondents.

G.R. NO. 198228ABOITIZ TRANSPORT SYSTEM CORPORATION,Petitioner,v.CARLOS A. GOTHONG LINES, INC. AND VICTOR S. CHIONGBIAN,Respondents.Assailed in these petitions for review oncertiorari1are the Orders dated August 13, 2010,2April 15, 2011,3and July 6, 20114of the Regional Trial Court of Cebu City, Branch 20 (RTC) in Civil Case No. CEB-34951, which confirmed the notice of dismissal filed by respondent Carlos A. Gothong Lines, Inc. (CAGLI) and, consequently, dismissed the case without prejudice, denied petitioners Aboitiz Transport System Corporation (ATSC) and Aboitiz Shipping Corporations (ASC) motion for reconsideration, and deemed ATSCs motion to exclude respondent Victor S. Chiongbian (respondent Chiongbian) from arbitration moot and academic, respectively.The Facts

ASC, CAGLI, and William Lines, Inc. (WLI), principally owned by the Aboitiz, Gothong, and Chiongbian families, respectively, entered into an Agreement5dated January 8, 1996, which was signed by Jon Ramon Aboitiz for ASC, Benjamin D. Gothong (Gothong) for CAGLI, and respondent Chiongbian for WLI. In the said Agreement, ASC and CAGLI agreed to transfer their shipping assets to WLI in exchange for the latters shares of capital stock. The parties likewise agreed that WLI would run the merged shipping business and be renamed WG&A, Inc. Pertinently, Section 11.06 of the Agreement provides that all disputes arising out of or in connection with the Agreement shall be finally settled by arbitration in accordance with Republic Act No. (RA) 876, otherwise known as The Arbitration Law,6and that each of the parties shall appoint one arbitrator, and the three arbitrators would then appoint the fourth arbitrator who shall act as Chairman.

Among the attachments to the Agreement was a letter7dated January 8, 1996 written by respondent Chiongbian and addressed to Gothong, stating that WLI committed to acquire from CAGLIs inventory certain spare parts and materials not exceeding P400 Million. In this relation, a valuation of CAGLIs inventory was conducted wherein it was shown that the same amounted to P514 Million.8Thereafter, WLI received inventory valued at P558.89 Million, but only paid CAGLI the amount of P400 Million as agreed upon in the Agreement.9Dissatisfied, CAGLI sent to WLI various letters in 2001, demanding that the latter pay or return the inventory that it received in excess of P400 Million.10cralawred

Sometime in 2002, the Chiongbian and Gothong families decided to sell their respective interests in WLI/WG&A to the Aboitiz family. This resulted in the execution of a Share Purchase Agreement11whereby Aboitiz Equity Ventures (AEV) agreed to purchase and acquire the WLI/WG&A shares of the Chiongbian and Gothong families. Thereafter, the corporate name of WLI/WG&A was changed to ATSC.12cralawred

Six (6) years later, or in 2008, CAGLI sent a letter13dated February 14, 2008 to ATSC demanding that the latter pay the excess inventory it delivered to WLI amounting to P158,399,700.00. CAGLI likewise demanded AEV and respondent Chiongbian that they refer their dispute to arbitration.14In response, AEV countered that the excess inventory had already been returned to CAGLI and that it should not be included in the dispute, considering that it is an entity separate and distinct from ATSC.15Thus, CAGLI was constrained to file a complaint16before the RTC against Chiongbian, ATSC, ASC, and AEV to compel them to submit to arbitration.

For their part, ATSC and AEV moved for the dismissal of the case, contending that CAGLI did not have a cause of action for arbitration since its claim had already been paid or otherwise, extinguished, and, in any event, said action had already prescribed.17cralawredThe RTC Proceedings

In an Order18dated December 4, 2009, the RTC dismissed the complaint only with respect to AEV for lack of cause of action,19but not as to the other defendants. Thereafter, the RTC issued an Order20dated February 26, 2010, directing CAGLI, respondent Chiongbian, ATSC, and ASC to proceed to arbitration, and accordingly, the parties appointed their respective arbitrators, with ATSC and ASC doing so only on anad cautelambasis.21cralawred

Meanwhile, ATSC filed a Motion for Reconsideration/To Exclude22dated March 25, 2010 praying that respondent Chiongbian be excluded from the arbitration proceedings since the latter was not a party to the Agreement. Pending resolution of the said motion, CAGLI filed a Notice of Dismissal23dated July 8, 2010, averring that it has decided to withdraw its complaint in view of the fact that the opposing parties had not filed their respective responsive pleadings.

In an Order24dated August 13, 2010, the RTC found CAGLIs Notice of Dismissal meritorious, and, thus, confirmed the same and ordered the case dismissed without prejudice.

Dissatisfied, ATSC and ASC moved for reconsideration25which was, however, denied in an Order26dated April 15, 2011. In said Order, the RTC cited Section 1 of Rule 17 of the Rules of Court which allows the plaintiff to file a notice of dismissal of the complaint as a matter of right before service of the answer or a motion for summary judgment. It further ruled that, save for the condition that no answer or motion for summary judgment had been priorly filed, nothing in the rules or law expressly prohibits or restricts the right of the plaintiff to withdraw the complaint by mere notice of dismissal at any stage of the proceedings.27cralawred

Separately, the RTC issued an Order28dated July 6, 2011, denying ATSCs Motion for Reconsideration/To Exclude, holding that the issue raised in the said motion has been rendered moot and academic in view of the confirmation of CAGLIs notice of dismissal.

Hence, the instant petitions.The Issues Before the Court

The issues for the Courts resolution are as follows: (a) whether or not the RTC was correct in confirming CAGLIs notice of dismissal and, consequently, dismissing the case without prejudice; and (b) whether or not respondent Chiongbian should be excluded from the arbitration proceedings.The Courts Ruling

The petition is meritorious.

A. Propriety of CAGLIs Notice of Dismissal.

At the outset, the Court notes that the nature of the complaint filed by CAGLI before the RTC is for the enforcement of an arbitration agreement, governed by Section 6 of RA 876, viz.:chanRoblesvirtualLawlibrarySection 6.Hearing by court. A party aggrieved by the failure, neglect or refusal of another to perform under an agreement in writing providing for arbitration may petition the court for an order directing that such arbitration proceed in the manner provided for in such agreement. Five days notice in writing of the hearing of such application shall be served either personally or by registered mail upon the party in default. The court shall hear the parties, and upon being satisfied that the making of the agreement or such failure to comply therewith is not in issue, shall make an order directing the parties to proceed to arbitration in accordance with the terms of the agreement. If the making of the agreement or default be in issue the court shall proceed to summarily hear such issue.If the finding be that no agreement in writing providing for arbitration was made, or that there is no default in the proceeding thereunder, the proceeding shall be dismissed. If the finding be that a written provision for arbitration was made and there is a default in proceeding thereunder, an order shall be made summarily directing the parties to proceed with the arbitration in accordance with the terms thereof.

x x x x (Emphasis supplied)

In the case ofGonzales v. Climax Mining, Ltd. (Gonzales),29the Court had instructed that the special proceeding under the above-quoted provision is the procedural mechanism for the enforcement of the contract to arbitrate.30RA 876 explicitly confines the courts authority only to pass upon the issue of whether there is or there is no agreement in writing providing for arbitration. If there is such agreement, the court shall issue an order summarily directing the parties to proceed with the arbitration in accordance with the terms thereof; otherwise, the proceeding shall be dismissed.31To stress, such proceeding is merely a summary remedy to enforce the agreement to arbitrate and the duty of the court is not to resolve the merits of the parties claims but only to determine if they should proceed to arbitration or not.32cralawred

In the present case, the records show that the primary relief sought for in CAGLIs complaint, i.e., to compel the parties to submit to arbitration,33had already been granted by the RTC through its Order34dated February 26, 2010. Undeniably, such Order partakes of a judgment on the merits of the complaint for the enforcement of the arbitration agreement.

At this point, although no responsive pleading had been filed by ATSC,35 it is the rules on appeal, or other proceedings after rendition of a judgment or final order no longer those on notice of dismissal that come into play. Verily, upon the rendition of a judgment or final order,36the period before service of the answer or of a motion for summary judgment, mentioned in Section 137of Rule 17 of the Rules of Court when a notice of dismissal may be filed by the plaintiff, no longer applies. As a consequence, a notice of dismissal filed by the plaintiff at such judgment stage should no longer be entertained or confirmed.

In view of the foregoing, it was an error on the part of the RTC to have confirmed the notice of dismissal and to have dismissed the complaint without prejudice.

B. Parties covered by Arbitration Proceedings.

Section 2 of RA 876 specifies who may be subjected to arbitration, to wit:chanRoblesvirtualLawlibrarySec. 2.Persons and matters subject to arbitration. Two or more persons or parties may submit to the arbitration of one or more arbitrators any controversy existing between them at the time of the submission and which may be the subject of an action, or the parties to any contract may in such contract agree to settle by arbitration a controversy thereafter arising between them. Such submission or contract shall be valid, enforceable and irrevocable, save upon such grounds as exist at law for the revocation of any contract.

x x x x

InGonzales, the Court explained that [d]isputes do not go to arbitration unless and until the parties have agreed to abide by the arbitrators decision. Necessarily, a contract is required for arbitration to take place and to be binding.38 Furthermore, inDel Monte Corporation USA v. Court of Appeals,39the Court stated that [t]he provision to submit to arbitration any dispute arising therefrom and the relationship of the parties is part of that contract. As a rule, contracts are respected as the law between the contracting parties and produce effect as between them, their assigns and heirs.40Succinctly put, only those parties who have agreed to submit a controversy to arbitration who, as against each other, may be compelled to submit to arbitration.

In the present case, Section 11.06 of the Agreement, which embodies the Arbitration Agreement among the parties, provides:chanRoblesvirtualLawlibraryAll disputes arising out of or in connection with this Agreement including any issue as to this Agreement's validity or enforceability, which cannot be settled amicably among the parties, shall be finally settled by arbitration in accordance with the Arbitration Law (Republic Act No. 876) by an arbitration tribunal composed of four (4) arbitrators. Each of the parties shall appoint one (1) arbitrator, the three (3) to appoint the fourth arbitrator who shall act as Chairman. Any award by the arbitration tribunal shall be final and binding upon the parties and shall be enforced by judgment of the Courts of Cebu or Metro Manila.41

The three parties to the Agreement and necessarily to the arbitration agreement embodied therein are: (a) ASC, (b) CAGLI, and (c) WLI/WG&A/ATSC. Contracts, like the subject arbitration agreement, take effect only between the parties, their assigns and heirs.42Respondent Chiongbian, having merely physically signed the Agreement as a representative of WLI, is not a party thereto and to the arbitration agreement contained therein. Neither is he an assignee or an heir of any of the parties to the arbitration agreement. Hence, respondent Chiongbian cannot be included in the arbitration proceedings.

WHEREFORE, the petitions areGRANTED. The Orders dated August 13, 2010, April 15, 2011, and July 6, 2011 of the Regional Trial Court of Cebu City, Branch 20 (RTC) in Civil Case No. CEB-34951 are herebyREVERSEDandSET ASIDE. The Order dated February 26, 2010 of the RTC isREINSTATEDwithMODIFICATIONexcluding Victor S. Chiongbian from the arbitration proceedings.

SO ORDERED.

Carpio, (Chairperson), Brion, Del Castillo,andPerlas-Bernabe, JJ.,concur.

6Entitled An Act to Authorize the Making of Arbitration and Submission Agreements, to Provide for the Appointment of Arbitrators and the Procedure for Arbitration in Civil Controversies, and for Other Purposes.

35Once a judgment or order on the merits of the particular matter involved in the complaint has been rendered or parties have already been prejudiced by virtue of having appeared in court to defend their position, as in the present case, it is as though an answer or motion for summary judgment had already been filed. (Cf. San Miguel Corp. v. Sandiganbayan,394 Phil. 608, 648 [2000].)

37Sec. 1. Dismissal upon notice by plaintiff. A complaint may be dismissed by the plaintiff by filing a notice of dismissal at any time before service of the answer or of a motion for summary judgment. Upon such notice being filed, the court shall issue an order confirming the dismissal. Unless otherwise stated in the notice, the dismissal is without prejudice, except that a notice operates as an adjudication upon the merits when filed by a plaintiff who has once dismissed in a competent court an action based on or including the same claim.

42See Article 1311 of the Civil Code, which reads:ChanRoblesVirtualawlibraryArt. 1311. Contracts take effect only between the parties, their assigns and heirs, except in case where the rights and obligations arising from the contract are not transmissible by their nature, or by stipulation or by provision of law. The heir is not liable beyond the value of the property he received from the decedent.If a contract should contain some stipulation in favor of a third person, he may demand its fulfillment provided he communicated his acceptance to the obligor before its revocation. A mere incidental benefit or interest of a person is not sufficient. The contracting parties must have clearly and deliberately conferred a favor upon a third person.

EN BANCG.R. No. L-21335December 17, 1966ABOITIZ SHIPPING CORPORATION,Petitioner, vs.VIVENCIA ANDO PEPITO, and the minors, LOLITA, ALBERTO, NELSON, MARYLEN and MARIA, all surnamed PEPITO represented by their mother, the respondent Vivencia Ando Pepito,Respondents.Between the night of November 30, and the early morning of December 1, 1961, Demetrio Pepito, a crew member of m/v P. Aboitiz, disappeared therefrom while said vessel was on voyage.chanroblesvirtualawlibrarychanrobles virtual law libraryOn December 26, 1961, petitioner received from respondent Vivencia Ando Pepito a letter dated December 21, 1961, stating -You are hereby notified that one of your employees, Mr. Demetrio Pepito, a crew member of M/V P. Aboitiz, one of your vessels, was reported missing as per record of the Deck Log Book of the M/V P. Aboitiz while said vessel was navigating from Surigao to Tandag. It is our belief that Mr. Pepito is already dead. A diligent search has been made but the same is rendered futile.On January 12, 1962, Vivencia Ando Pepito, for herself and in behalf of her children, the other respondents, filed with Regional Office No. 8, Department of Labor, Cebu City, a notice and claim for compensation, asking for death benefits, and describing the circumstances of the alleged death of Demetrio Pepito on the night of November 30, 1961 in the following manner,viz: "While the vessel was navigating from Surigao to Tandag, the herein deceased was lost or reported missing as per record of the deck log of the M/V P. Aboitiz".chanroblesvirtualawlibrarychanrobles virtual law libraryHaving received on February 15, 1962 from the chief, labor operations section of said regional office, a letter enclosing the foregoing claim, petitioner, on February 16, 1962, sent to that office the employer's report of accident or sickness, controverting the claim for compensation and alleging that Demetrio Pepito was found missing on December 1, 1961 and giving its own version of the incident as follows: "Pepito disappeared while off duty, and when the vessel was near Bucas Grande Island while the ship was in navigation on a calm sea and good weather. We do not know if he purposely jumped and swam ashore".chanroblesvirtualawlibrarychanrobles virtual law libraryOn March 21, 1962,without hearing, the Regional Administrator issued an award for death benefits to respondents, planted upon the ground that "the right to compensation of the claimant has not been controverted by respondent within the period provided for by law."chanrobles virtual law libraryMotion to reconsider was of no avail. Petition sought review from the Workmen's Compensation Commission. In a decision dated March 8, 1963, said Commission affirmed. The reconsideration sought was thwarted in the Commission'sen bancresolution of April 5, 1963.chanroblesvirtualawlibrarychanrobles virtual law libraryWe are now called upon to review oncertiorarithe Commission's decision of March 8, 1963 and its resolution of April 5, 1963.chanroblesvirtualawlibrarychanrobles virtual law library1. There should be no quarrel as to the fact that petitioner came to know of the disappearance of Demetrio Pepito on December 1, 1961. Petitioner so admits in its report of accident or sickness. And then, on December 26, 1961 petitioner received from respondent Vivencia Ando Pepito a letter informing it of the fact that Demetrio Pepito was reported missing on December 1, 1961, as per record of the deck log book of m/v P. Aboitiz.chanroblesvirtualawlibrarychanrobles virtual law libraryDecidedly, the purported controversion - filed on February 16, 1962 - was made beyond the periods set forth in the law and the rules and regulations of the Workmen's Compensation Commission, namely, 14 days from the date of accident or 10 days from knowledge thereof.1chanrobles virtual law library2. Logically, the next problem we face is the scope of the non-controversion which may be clamped upon petitioner.chanroblesvirtualawlibrarychanrobles virtual law libraryBy Section 2, Rule 7 of the Rules of the Workmen's Compensation Commission, "[A]ll the general rules of procedure in the Courts of First Instance shall be suppletory to the Rules of the Workmen's Compensation Commission but the commission shall not be bound by the technical rules of procedure".chanroblesvirtualawlibrarychanrobles virtual law libraryWe go deep into the recitals of the notice and claim for compensation. It simply says that while the vessel was navigating, "the herein deceased was lost or reported missing". This claim was filed on January 12, 1962, or barely 42 days after the event took place. At that time, no presumption existed that Demetrio Pepito was dead. The boat was not lost. This opens up a number of possibilities. Because nothing is certain. Nobody knows what has happened to him. He could have transferred to another vessel or watercraft. He could even have swam to safety. Or he could have died. Or worse, he could have taken his own life. Legal implications - such as right to compensation, succession, the legal status of the wife - are so important that courts should not so easily be carried to the conclusion that the man is dead.2The result is that death cannot be taken as a fact.chanroblesvirtualawlibrarychanrobles virtual law libraryNon-controversion in compensation cases, as in the case of pleadings in ordinary civil cases,3simply means admission of facts, not conclusions of law.chanroblesvirtualawlibrarychanrobles virtual law libraryAs applied to the case before us, the mere failure to controvert the statement that Demetrio Pepito is believed to be "dead" or "deceased" because he "was lost" or was "reported missing", does not import an admission that the man is actually dead, but that he was just lost or missing.chanroblesvirtualawlibrarychanrobles virtual law libraryWe, therefore, rule that petitioner's non-controversion admits but the fact that Demetrio Pepito was lost or missing, but certainly is not an admission of the actual fact of death.chanroblesvirtualawlibrarychanrobles virtual law library3. But petitioner was directed to pay compensation without inquiry into the fact and circumstances of death. This trenches upon petitioner's right to due process enshrined in Section 1 (1) of Article Ill of the Constitution that "[N]o person shall be deprived of life, liberty, or property without due process of law." The award having been made before petitioner was given an opportunity to be heard on the debatable fact and circumstances of death, that award has no leg to stand on. We nullify that award as a violation of a constitutional prescription.chanroblesvirtualawlibrarychanrobles virtual law library4. But the Commission would want to downgrade petitioner's cry of denial of due process by a reference to a certain investigation report dated January 12, 1962, made - barely 42 days after the incident - by one Anselmo M. Morales, a constabulary sergeant, to the effect that Demetrio Pepito was "on board said boat on her maiden voyage to Tandag, Surigao del Sur; that at about 2:00 o'clock a.m. on December 1, 1961, Francisco Ygot, a watchman on duty, noticed that Demetrio Pepito was not in the crews' sleeping quarters; that when a thorough search of the boat failed to locate the missing crew member, the boat's course was reversed upon instruction of its captain in order to look for him; that because no trace of Demetrio Pepito or his body could be found, the search was abandoned and the boat then proceeded to Tandag; and thatno one knew what happened to Demetrio Pepito because he disappeared at midnight on a rough sea(big waves)".4This report does not prove death. At best, it confirms a known fact - disappearance, with the circumstance that "no one knew what happened to Demetrio Pepito". Besides, said report was not brought up at any hearing. It was but the result of an investigation. Whatever the investigator said would not rise above the level of hearsay twice removed. By Section 7 of the Workmen's Compensation Law "[A]llex parteevidence received by the Commissioner shall be reduced to writing and any party in interest shall have the opportunity to examine and rebut the same". Petitioner was not afforded an opportunity to as much as examine or contradict this report. It thus results that said report is of no value as evidence.chanroblesvirtualawlibrarychanrobles virtual law library5. The employer-employee relationship is conceded. The event arose out of, and took place in the course of, employment. It matters not that the disappearance occurred, as alleged by petitioner, while Demetrio Pepito was off-duty. For, that incident happened while the boat was on a sea voyage. He had no choice. He had to be in the vessel.5chanrobles virtual law library6. From the time the event took place, i.e., from the night of November 30, 1961, to this date, more than 4 years have elapsed. It is because of this that we approach this problem with a practical end in view. By this time, it cannot be gainsaid that the case of the disappearance of Demetrio Pepito could come within the coverage of paragraph 3, Article 391 of the Civil Code, which reads:ART. 391. The following shall be presumed dead for all purposes, including the division of estate among the heirs:xxxxxxxxxxxxxxxxxxchanrobles virtual law library(3) A person who has been in danger of death under other circumstances and his existence has not been known for four years.6With the known facts, namely, that Demetrio Pepito was lost or missing while the boat was navigating, he could have been in danger of death. But of course, evidence must be taken that his existence has not been known for four years or thereafter.chanroblesvirtualawlibrarychanrobles virtual law libraryUpon the view we take of this case, we vote to set aside the appealed decision of March 8, 1963 and the resolution of April 5, 1963, and to direct that the record hereof be returned to the Workmen's Compensation Commission with instructions -chanrobles virtual law library1. To hold a hearing, with notice to the parties, to determine (a) whether Demetrio Pepito is alive; or (b) whether he should be presumed dead, under the provisions of paragraph 3, Article 391 of the Civil Code; and (c) the circumstances of death if it be found or presumed that he died; andchanrobles virtual law library2. To render judgment accordingly.chanroblesvirtualawlibrarychanrobles virtual law libraryNo costs. So ordered.chanroblesvirtualawlibrarychanrobles virtual law library

EN BANC

[G.R. No. L-14526. March 31, 1965.]

ABOITIZ SHIPPING CORPORATION; CARLOS A. GO THONG & COMPANY; CEBU NAVIGATION COMPANY, INC.; CEBU-BOHOL FERRY CO., INC.; COROMINAS, RICHARDS NAVIGATION CO., INC.; HIJOS DE F. ESCANO, INC, INC.; PACIFIC LINES, INC.; ROYAL LINES, INC.; SOUTHERN ISLAND SHIPPING CORPORATION; SWEET LINES SHIPPING; VISAYAN TRANSPORTATION CO., INC.; PHILIPPINE STEAM NAVIGATION CO.; COMPAIA MARITIMA; and GENERAL SHIPPING CO., INC.,Plaintiffs-Appellants, v. THE CITY OF CEBU, FELIPE PAREJA, as City Treasurer of Cebu; THE HON. SERGIO OSMEA, JR., as Mayor of the City of Cebu,Defendants-Appellees.

SYLLABUS

1. MUNICIPAL CORPORATIONS; PUBLIC WHARVES; "PUBLIC" REFERS TO USE RATHER THAN OWNERSHIP. The word "public," as employed to describe a wharf, does not refer to its ownership either by the National Government or by a province or municipality, It denotes rather the nature of its use. Thus public wharves have been held to be those used generally by the public, free of charge or for compensation, while a private wharf is one whose owner or lessee has exclusive enjoyment or use thereof.

2. ID.; RIGHT TO IMPOSE WHARFAGE DUES RESTS ON OWNERSHIP OF WHARF. Assuming the public character of a wharf by reason of its availability for public use, the right to impose wharfage dues rests on a different basis that of ownership. For wharfage is a charge against the vessel by way of rent or compensation for its being allowed to lie alongside a wharf for the purpose of loading or unloading freight.

3. ID.; RIGHT TO COLLECT WHARFAGE ON WHARF OWNED BY NATIONAL GOVERNMENT. The right to collect wharfage dues for the use of a wharf owned by the National Government rests on it and not on the city where such wharf may happen to be located.

4. ID.; CITY MAY NOT COLLECT WHARFAGE DUES FOR USE OF PUBLIC WHARVES OWNED BY NATIONAL GOVERNMENT. A provision of the charter of a city authorizing it to fix charges to be paid by all watercraft using "public wharves" located in said city does not authorize it to collect wharfage dues on wharves owned by the National Government.

5. ID.; POWER TO TAX OF CITY NOT INHERENT. The power to tax is an attribute of sovereignty and for it to be exercised by a municipal corporation requires a clear delegation of the power by means of a charter grant or by a general enabling statute. The power is not inherent in a municipal corporation.

D E C I S I O N

The principal question here is whether or not under its charter, Commonwealth Act No. 58, the City of Cebu may provide by ordinance for the collection of wharfage from shipping concerns whose vessels dock at the public wharves or piers located in said city but owned by the National Government. The ordinance, No. 207, was purportedly enacted by the Municipal Board on August 14, 1956 and approved by the City Mayor on the following August 27. Plaintiffs paid the wharfage charges under protest since September 1, 1956 and on May 8, 1957 filed this action in the Court of First Instance of Manila to have the said ordinance declared void, its enforcement enjoined in so far as the wharves, docks and other landing places belonging to the National Government were concerned, and all the amounts thus for collected by defendants refunded by them.

The court a quo dismissed the complaint after trial and the case has come to us on appeal by plaintiffs.

Appellants have raised some questions of fact, and in particular point out certain events and circumstances to show that ordinance No. 207 was not and could not have been enacted, as alleged by appellees, on August 14, 1956. This case, however, may be decided solely on the legal issue presented by the parties.

The Municipal Boards authority to pass the ordinance is claimed by appellees under section 17(w) of the charter of the City of Cebu, which states:jgc:chanrobles.com.ph

"SECTION 17. General powers and duties of the Board. Except as otherwise provided by law, and subject to the conditions and limitations thereof, the Municipal Boards shall have the following legislative powers:chanrob1es virtual 1aw libraryxxx(w) To fix the charges to be paid by all watercraft landing at or using public wharves, docks, levees, or landing places."cralaw virtua1aw library

The lower court ruled, upholding appellees contention in this respect, that in using the terms "public wharves, docks, levees or landing places," the legislature made no distinction between those owned by the National Government and those owned by the City of Cebu and that consequently both fall within the scope of the power granted. Appellants assail this construction as erroneous, first in the light of the generally accepted meaning of "public wharf" as it may have a bearing on the right or authority to charge wharfage and, secondly, in view of other related provisions of the same city charter.

The word "public," as employed to describe a wharf, does not refer to its ownership either by the National Government or by a province or municipality. It denotes rather the nature of its use. Thus public wharves have been held to be those used generally by the public, free of charge or for compensation, while a private wharf is one whose owner or lessee has exclusive enjoyment or use thereof (Hamilton v. Portland State Pier Site District, 112 A. 836). Piers or landing places and wharves may be private or they may be, in their nature, public, although the property may be in an individual owner, where the latter is under obligation to concede to others the privilege of landing their goods or of mooring their vessels there, upon payment of a reasonable compensation as wharfage (Duttoon v. Strong, 17 Law, Ed. 29, 1 Black 35, 66 U.S. 339). So a wharf may be public whether it belongs to the National Government, to a municipal corporation or to a private individual or concern.

Assuming the public character of a wharf by reason of its availability for public use, the right to impose wharfage dues rests on a different basis that of ownership. For wharfage is a charge against the vessel by way of rent or compensation for its being allowed to lie alongside a wharf for the purpose of loading or unloading freight (Phil. Sugar Centrals Agency v. Insular Collector of Customs, 51 Phil. 131, citing Parkersburg and Ohio River Transportation Co. v. City of Parkersburg, 27 Law Ed. 584) and, of course, for the use of the artificial facilities offered for that purpose (City of Shreveport v. Red River and Coast Line, 55 Am. Rep. 504). That the right to charge wharfage is based on ownership has been impliedly recognized by this Court in Province of Mindoro v. Cruz, 74 Phil. 108, as follows: ". . . the subsequent classification of the port of Calapan as a national port did not, and was not intended to, divest the province of Mindoro of its part ownership of the wharf and, accordingly, of its right to collect wharfage for its use as it had theretofore done;" and "not until its complete ownership has become vested in the National Government by the mode of transfer provided by law may the province of Mindoro be divested of this right."cralaw virtua1aw library

Under the foregoing test the right to collect the wharfage in question here belongs to the National Government, as in fact it has always collected the same from appellants. It is unreasonable to conclude that the legislature, simply because it employed the term "public wharves" in section 17 (w) of the charter of the City of Cebu, thereby authorized the latter to collect wharfage irrespective of the ownership of the wharves involved. The National Government did not surrender such ownership to the city; and there is no justifiable ground to read into the statute an intention to burden ship owners, such as appellants, with the obligation of paying dues twice for the same purpose.

Legislative intent must be ascertained from a consideration of the statute as a whole and not of an isolated part or a particular provision alone. This is a cardinal rule of statutory construction. For taken in the abstract, a word or phrase might easily convey a meaning quite different from the one actually intended and evident when the word or phrase is considered with those with which it is associated. Thus an apparently general provision may have a limited application if viewed together with other provisions.

Section 17 (w) of the charter of the City of Cebu is a case in point. It authorizes the Municipal Board to fix the charges to be paid by all watercraft landing at or using public wharves, docks, levees, or landing places. There is indeed no distinction therein between public wharves owned by the National Government and those owned by the city itself. But the subsection immediately preceding (v) impliedly establishes such a distinction. It empowers the Municipal Board "to provide for the construction and maintenance, and regulate the use, of public landing places, wharves, piers, docks and levees." It seems fairly evident that when the law-making body used the term "public wharves, etc." in subsection w, it meant to refer to those mentioned in the preceding subsection, namely, the "public wharves, etc." constructed and therefore owned by the City of Cebu. Section 30 of the charter has a similar bearing on the question, in granting to the City Engineer "the care and custody of all public docks, wharves, piers, levees, and landing places, when erected" undoubtedly referring to those constructed and owned by the city. For in so far as those belonging to the National Government are concerned they remain under the exclusive control, direction and management of the Bureau of Customs, according to section 1142 of the Revised Administrative Code. And appellants have accordingly been paying to the National Government fees for the use of its wharves in Cebu, pursuant to law, particularly Republic Act No. 1371, which took effect on July 1, 1955 and was later on embodied in the new Tariff and Customs Code.

The court a quo ruled that Section 17(w) of the city charter is "plainly evincive of the power to tax for revenue purposes," and therefore the wharfage charges imposed by ordinance pursuant thereto are proper even if the amounts actually collected are much more than what may be justified as license fees under the police power of regulation of "shipping offices" granted under section 17 (1) of the same charter. The power to tax is an attribute of sovereignty and for it to be exercised by a municipal corporation requires a clear delegation of the power by means of a charter grant or by a general enabling statute. The power is not inherent in a municipal corporation (Saldaa v. City of Iloilo, 55 O.G. 10267), and if there is any doubt as to whether or not such power has been delegated to it the doubt must be resolved negatively (We Wa Yu v. City of Lipa, 54 O.G. 4055).

But even if the wharfage dues authorized under Section 17(w) be considered as taxes for revenue, such authority nevertheless is limited to public wharves, docks, levees and other landing places belonging to the City of Cebu and not to those owned by the National Government under the exclusive supervision of the Bureau of Customs.

IN VIEW OF THE FOREGOING, the judgment appealed from is reversed; Ordinance No. 207 of the City of Cebu is declared null and void, and appellees are ordered to refund to appellants all amounts collected thereunder and to refrain from making such collection. Costs against appellees.

THIRD DIVISION[G.R. NO. 156978 : May 2, 2006]ABOITIZ SHIPPING CORPORATION,Petitioner,v.NEW INDIA ASSURANCE COMPANY, LTD.,Respondent.D E C I S I O NFor review oncertiorariare the Decision1dated August 29, 2002 of the Court of Appeals in CA-G.R. CV No. 28770 and its Resolution2dated January 23, 2003 denying reconsideration. The Court of Appeals affirmed the Decision3dated November 20, 1989 of the Regional Trial Court of Manila in Civil Case No. 82-1475, in favor of respondent New India Assurance Company, Ltd.This petition stemmed from the action for damages against petitioner, Aboitiz Shipping Corporation, arising from the sinking of its vessel,M/V P. Aboitiz, on October 31, 1980.The pertinent facts are as follows:Societe Francaise Des Colloidesloaded a cargo of textiles and auxiliary chemicals from France on board a vessel owned by Franco-Belgian Services, Inc. The cargo was consigned to General Textile, Inc., in Manila and insured by respondent New India Assurance Company, Ltd. While in Hongkong, the cargo was transferred toM/V P. Aboitizfor transshipment to Manila.4Before departing, the vessel was advised by the Japanese Meteorological Center that it was safe to travel to its destination.5But while at sea, the vessel received a report of a typhoon moving within its general path. To avoid the typhoon, the vessel changed its course. However, it was still at the fringe of the typhoon when its hull leaked. On October 31, 1980, the vessel sank, but the captain and his crew were saved.On November 3, 1980, the captain ofM/V P. Aboitizfiled his "Marine Protest", stating that the wind force was at 10 to 15 knots at the time the ship foundered and described the weather as "moderate breeze, small waves, becoming longer, fairly frequent white horses."6Thereafter, petitioner notified7the consignee, General Textile, of the total loss of the vessel and all of its cargoes. 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.8Respondent hired a surveyor, Perfect, Lambert and Company, to investigate the cause of the sinking. In its report,9the surveyor concluded that the cause was the flooding of the holds brought about by the vessel's questionable seaworthiness. Consequently, respondent filed a complaint for damages against petitioner Aboitiz, Franco-Belgian Services and the latter's local agent, F.E. Zuellig, Inc. (Zuellig). Respondent alleged that the proximate cause of the loss of the shipment was the fault or negligence of the master and crew of the vessel, its unseaworthiness, and the failure of defendants therein to exercise extraordinary diligence in the transport of the goods. Hence, respondent added, defendants therein breached their contract of carriage.10rbl rl l lbrrFranco-Belgian Services and Zuellig responded, claiming that they exercised extraordinary diligence in handling the shipment while it was in their possession; its vessel was seaworthy; and the proximate cause of the loss of cargo was a fortuitous event. They also filed a cross-claim against petitioner alleging that the loss occurred during the transshipment with petitioner and so liability should rest with petitioner.For its part, petitioner also raised the same defense that the ship was seaworthy. It alleged that the sinking ofM/V P. Aboitizwas due to an unforeseen event and without fault or negligence on its part. It also alleged that in accordance with the real and hypothecary nature of maritime law, the sinking ofM/V P. Aboitizextinguished its liability on the loss of the cargoes.11Meanwhile, the Board of Marine Inquiry (BMI) conducted its own investigation to determine whether the captain and crew were administratively liable. However, petitioner neither informed respondent nor the trial court of the investigation. The BMI exonerated the captain and crew of any administrative liability; and declared the vessel seaworthy and concluded that the sinking was due to the vessel's exposure to the approaching typhoon.On November 20, 1989, the trial court, citing the Court of Appeals decision inGeneral Accident Fire and Life Assurance Corporation v. Aboitiz Shipping Corporation12involving the same incident,ruled in favor of respondent. It held petitioner liable for the total value of the lost cargo plus legal interest, thus:WHEREFORE, PREMISES CONSIDERED, judgment is hereby rendered in favor of New India and against Aboitiz ordering the latter to pay unto the former the amount of P142,401.60, plus legal interest thereon until the same is fully paid, attorney's fees equivalent to fifteen [percent] (15%) of the total amount due and the costs of suit.The complaint with respect to Franco and Zuellig is dismissed and their counterclaim against New India is likewise dismissedSO ORDERED.13rbl rl l lbrrPetitioner elevated the case to the Court of Appeals and presented the findings of the BMI. However, on August 29, 2002, the appellate court affirmedin totothe trial court's decision. It held that the proceedings before the BMI was only for the administrative liability of the captain and crew, and was unilateral in nature, hence not binding on the courts. Petitioner moved for reconsideration but the same was denied on January 23, 2003.Hence, this Petition for Review, alleging that the Court of Appeals gravely erred in:I.x x x DISREGARDING THE RULINGS OF THE HONORABLE SUPREME COURT ON THE APPLICATION OF THE RULE ON LIMITED LIABILITY UNDER ARTICLE 587, 590 AND 837 OF THE CODE OF COMMERCE TO CASES INVOLVING THE SINKING OF THE M/V "P. ABOITIZ;A.x x x NOT APPLYING THE RULINGS IN THE CASES OFMONARCH INSURANCE CO., INC. ET AL. V. COURT OF APPEALS ET AL.ANDABOITIZ SHIPPING CORPORATION V. GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, LTD.;B.x x x RULING THAT THE ISSUE ON THE APPLICATION OF THE RULE ON LIMITED LIABILITY UNDER ARTICLES 587, 590 AND 837 OF THE CODE OF COMMERCE HAD BEEN CONSIDERED AND PASSED UPON IN ITS DECISION;II.x x x NOT LIMITING THE AWARD OF DAMAGES TO RESPONDENT TO ITSPRO-RATASHARES IN THE INSURANCE PROCEEDS FROM THE SINKING OF THE M/V "P. ABOITIZ".14Stated simply, we are asked to resolve whether the limited liability doctrine, which limits respondent's award of damages to its pro-rata share in the insurance proceeds, applies in this case.Petitioner, citingMonarch Insurance Co. Inc. v. Court of Appeals,15contends that respondent's claim for damages should only be against the insurance proceeds and limited to its pro-rata share in view of the doctrine of limited liability.Respondent counters that the doctrine of real and hypothecary nature of maritime law is not applicable in the present case because petitioner was found to have been negligent. Hence, according to respondent, petitioner should be held liable for the total value of the lost cargo.It bears stressing that this Court has variedly applied the doctrine of limited liability to the same incident - the sinking ofM/V P. Aboitizon October 31, 1980.Monarch, the latest ruling, tried to settle the conflicting pronouncements of this Court relative to the sinking ofM/V P. Aboitiz. InMonarch, we said that the sinking of the vessel was not due toforce majeure,but to its unseaworthy condition.16Therein, we found petitioner concurrently negligent with the captain and crew.17But the Court stressed that the circumstances therein still made the doctrine of limited liability applicable.18Our ruling inMonarchmay appear inconsistent with the exception of the limited liability doctrine, as explicitly stated in the earlier part of theMonarchdecision. An exception to the limited liability doctrine is when the damage is due to the fault of the shipowner or to the concurrent negligence of the shipowner and the captain. In which case, the shipowner shall be liable to the full-extent of the damage.19We thus find it necessary to clarify now the applicability here of the decision inMonarch.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.20In 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.21In 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.22Moreover, 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.23In 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. It initially attributed the sinking to the typhoon and relied on the BMI findings that it was not at fault. However, 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.24In contrast, the findings of the BMI are not deemed always binding on the courts.25Besides, exoneration of the vessel's officers and crew by the BMI merely concerns their respective administrative liabilities.26It does not in any way operate to absolve the common carrier from its civil liabilities arising from its failure to exercise extraordinary diligence, the determination of which properly belongs to the courts.27Where the shipowner fails to overcome the presumption of negligence, the doctrine of limited liability cannot be applied.28Therefore, we agree with the appellate court in sustaining the trial court's ruling that petitioner is liable for the total value of the lost cargo.WHEREFORE, the petition is DENIED for lack of merit. The Decision dated August 29, 2002 and Resolution dated January 23, 2003 of the Court of Appeals in CA-G.R. CV No. 28770 areAFFIRMED.Costs against petitioner.SO ORDERED.

20Civil Code, Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.21Id. at Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only:(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;(2) Act of the public enemy in war, whether international or civil;(3) Act or omission of the shipper or owner of the goods;(4) The character of the goods or defects in the packing or in the containers;(5) Order or act of competent public authority.22Id. at Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in article 1733.

SECOND DIVISION[G.R. NO. 156978 : August 24, 2007]ABOITIZ SHIPPING CORPORATION,Petitioner,v.NEW INDIA ASSURANCE COMPANY, LTD.,Respondent.R E S O L U T I O NIn its Motion for Reconsideration,1petitioner seeks the reversal of this Court's Decision2dated May 2, 2006, and the referral of this case to the CourtEn Bancallegedly due to its inconsistency with the rulings inMonarch Insurance Co., Inc. v. Court of Appeals3andAboitiz Shipping Corporation v. General Accident Fire and Life Assurance Corporation, Ltd.4(GAFLAC).The pertinent facts are undisputed.On October 31, 1980,M/V P. Aboitiz, a vessel owned by petitioner, sank on her voyage from Hong Kong to Malaysia. Respondent is the insurer of the lost cargoes loaded on boardM/V P. Aboitizand consigned to General Textile, Inc. After respondent indemnified General Textile, Inc., it was subrogated to its rights, interests and actions against petitioner.Respondent filed an action docketed as Civil Case No. 82-1475 before the Regional Trial Court of Manila, Branch 36, for recovery against petitioner, among others, claimingP142,401.60 as actual damages, attorney's fees, exemplary damages and costs of suit. On November 20, 1989, the trial court held petitioner liable for the total value of the lost cargoes instead of applying the doctrine of limited liability.5The Court of Appeals affirmedin totothe trial court's decision and denied petitioner's motion for reconsideration.6Petitioner elevated the case to this Court raising the issue of whether the doctrine of limited liability, which limits respondent's award of damages to its pro rata share in the insurance proceeds, applies in this case.7In our May 2, 2006 Decision, we denied the petition for lack of merit and affirmed the decision of the Court of Appeals holding petitioner liable for the total value of the lost cargo.8Hence, this Motion for Reconsideration, raising the following as issues:I.THE DECISION DISREGARDED THE EARLIER RULINGS OF THIS HONORABLE COURT INGAFLAC(217 SCRA 259) AND THEMONARCHCASES (333 SCRA 71), WHERE BOTH HELD THAT ABOITIZ' LIABILITY IS LIMITED TO THE VALUE OF THE INSURANCE PROCEEDS NOTWITHSTANDING THE FINDING THAT ABOITIZ WAS AT FAULT.II.THE DECISION VIOLATES PARAGRAPH 3, SECTION 4 OF ARTICLE VIII OF THE CONSTITUTION WHICH STATES IN PART THAT - "NO DOCTRINE OR PRINCIPLE OF LAW LAID DOWN BY THE COURT IN A DECISION RENDERED EN BANC OR IN DIVISION MAY BE MODIFIED OR REVERSEDEXCEPT BY THE COURT SITTING EN BANC." (CITATIONS OMITTED.)9Simply, the issue is: Did the May 2, 2006 Decision modify or reverse the rulings inMonarchand GAFLAC contrary to Section 4(3)10of Article VIII of the Constitution?cralaw libraryPetitioner seeks the referral of this case to the CourtEn Bancalleging that our May 2, 2006 Decision modified or reversed the doctrines inGAFLACand Monarch, where we ruled that petitioner's liability was limited to the claimants' pro rata share in the insurance proceeds in view of the doctrine of limited liability. Invoking Section 4(3) of Article VIII of the Constitution, petitioner contends that no doctrine or principle laid down by the Court in a decision rendered in division may be modified or reversed, except by the Court sittingEn Banc.Respondent counters that petitioner should be held liable for the total value of the lost cargo. It insists that the doctrine of limited liability does not apply because petitioner was found negligent.We are not swayed to reconsider.Petitioner's arguments are mere rehash of those already submitted to and pronounced without merit by this Court in our May 2, 2006 Decision. The basic issues have already been passed upon and the motion discloses no cogent reason to warrant modification of our May 2, 2006 Decision. For all litigation must come to an end at some point, the Court En Banc should be shielded from the importunings of litigants who resort to the convenience of an appeal to the CourtEn Bancmerely to hamper or delay the final resolution of the case. The Court En Banc is not an appellate court to which our May 2, 2006 Decision may be appealed under the present circumstances.A perusal ofGAFLACand Monarchvis - -visthe instant case will show that our May 2, 2006 Decision did not modify or reverse the doctrines inGAFLACand Monarch. The factual findings of this case were different fromGAFLAC, which precludes this Court to apply the principles enunciated therein. Here, petitioner was found concurrently negligent with the ship captain and crew, while inGAFLAC, there is no such finding. Then the peculiar circumstances inMonarchcalled for the application of the doctrine of limited liability, as we have extensively discussed in our May 2, 2006 Decision.chanrobles virtual law libraryWe need only to stress that 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.11In 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.12In 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.13The weather was moderate whenM/V P. Aboitizsank. Both the trial and appellate courts also ruled that theM/V P. Aboitizsank due to its unseaworthiness and not due to typhoon. To limit petitioner's liability to the amount of the insurance proceeds, it has the burden of showing that the unseaworthiness of the vessel was not due to its fault or negligence. But it failed to do so. Where the shipowner fails to overcome the presumption of negligence, the doctrine of limited liability cannot be applied.14WHEREFORE, petitioner's motion for reconsideration and referral to the Court En Banc isDENIED WITH FINALITY.No further pleadings shall be allowed.SO ORDERED.10Section 4.'x x x(3) 'no doctrine or principle of law laid down by the court in a decision rendereden bancor in division may be modified or reversed except by the court sittingen banc.11Civil Code, Art. 1733.Art. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.Such extraordinary diligence in vigilance over the goods is further expressed in Articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in Articles 1755 and 1756.12Id. at Art. 1734.Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only:(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;(2) Act of the public enemy in war, whether international or civil;(3) Act or omission of the shipper or owner of the goods;(4) The character of the goods or defects in the packing or in the containers;(5) Order or act of competent public authority.13Id. at Art. 1735.Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733.

FIRST DIVISION

[G.R. No. 77530. October 5, 1989.]

ABOITIZ SHIPPING CORPORATION,Petitioner, v. PHILIPPINE AMERICAN GENERAL INSURANCE CO.,Respondent.

SYLLABUS

1. INSURANCE; MARINE RISK NOTE, NOT A FORM OF INSURANCE; ITS MAIN PURPOSE. The questioned shipment is covered by this continuing open insurance coverage from the time it was loaded aboard the SS Arthur Maersk in Boston, U.S.A. to the time it was delivered to the possession of petitioner at its offices at Pier 4 in Manila until it was pilfered when the great majority of the cargo was lost on July 3, 1980. The trial court in dismissing the complaint apparently relied on Marine Risk Note No. 017545 which was issued by private respondent only on July 28, 1980 after the shipment in question was already pilfered. Obviously the trial court mistook said Marine Risk Note as an insurance policy when it is not. It is only an acknowledgment or declaration of the private respondent confirming the specific shipment covered by its Marine Open Policy, the evaluation of the cargo and the chargeable premium.

2. ID.; RECEIPT OF INSURED CARGO AT THE OFFICE NOT LOADING IN THE SHIP; TIME FOR RECKONING LIABILITY. The contention of the petitioner that it could not be liable for the pilferage of the cargo as it was stolen even before it was loaded on its vessel is untenable. Petitioner received the cargo when it arrived in Manila at its offices at Pier 4, North Harbor and it was while in its possession and before loading it in its vessel that the cargo was pilfered. Its liability is clear.

3. CIVIL PROCEDURE; DEFAULT ORDER; PROPER GROUND FOR RECEPTION OF EVIDENCE, EX PARTE. Petitioner also decries the proceedings before the lower court as ex-parte without affording it due process. The records however show that the petitioner was declared in default and thus the evidence for Marinduque was received ex-parte in accordance with the rules. Petitioner had only itself to blame under the circumstances.

D E C I S I O N

Marinduque Mining Industrial Corporation (Marinduque for short) shipped on board SS Arthur Maersk from Boston, U.S.A. a shipment of one (1) skid carton parts for valves as evidenced by bill of lading No. BOSF-45607 issued by the Maersk Lines dated April 25, 1980. 1

The shipment was ordered from Jamesbury, Singapore PTE, LTD., which issued the cargos packing list 2 and Invoice number 3 showing the contents of the carton. The consular invoice was issued by the Philippine Consulate in Singapore for the shipment showing the contents and its total price amounting to $39,419.60 as well as the freight and other charges amounting to $2,791.73. 4 When the cargo arrived in Manila, it was received and deposited in the office of Aboitiz Shipping Corporation (Aboitiz for short) at Pier 4, North Harbor, Manila for transhipment to Nonoc Island for which it issued bill of lading No. 23. 5

On July 7, 1980 Marinduque, as consignee of the cargo, made a report to the effect that said cargo was pilfered on the night of July 3, 1980 while there was heavy rain at the Aboitiz terminal and that of the total value of the cargo of $42,209.33, only $7,412.00 worth remains of the cargo with the recommendation that the claim be made against Aboitiz. 6

The services of the Manila Adjusters and Surveyors Co. (Manila Adjusters for brevity) were engaged by the Phil-American General Insurance Co., Inc. (Phil Am for short) which came out with the report that the cargo in question was delivered at Pier 4, North Harbor on July 3, 1980 which cargo, when inspected on July 5, 1980 showed that it was pilfered. The list of the remaining contents was in the report. 7 A confirmatory report was submitted by the Manila Adjusters dated November 8, 1980. 8

On August 11, 1980, Marinduque filed a claim against Aboitiz in the amount of P246,430.80 representing the value of the pilfered cargo. 9 On the same day Marinduque filed a claim for the same amount against the Phil-Am on the latters policy MRN-01754 PAG. 10

On August 25, 1981 Phil-Am paid Marinduque the sum of P246,430.80 as insurer of the cargo. 11

Phil-Am then filed a complaint in the Regional Trial Court (RTC) of Manila against Aboitiz for the recovery of the same amount alleging that it has been subrogated to the rights of Marinduque.

In a decision rendered on January 11, 1984, the complaint was dismissed with costs against the plaintiff. A motion for reconsideration of this decision was denied in an order dated March 19, 1984.chanrobles.com : virtual law library

Hence the Phil-Am appealed to the Court of Appeals wherein in due course a decision was rendered on December 17, 1986 reversing the appealed order of dismissal of the complaint and ordering defendant Aboitiz to pay plaintiff Phil-Am the sum of P246,430.80 plus P15,000.00 as attorneys fees. 12 A motion for reconsideration thereof was denied in a resolution of the appellate court dated February 27, 1987.

Hence the herein petition for review forcertiorarifiled by Aboitiz predicated on five assignments of errors, the resolution of which revolves on the singular issue of whether petitioner was properly held liable to the private respondent by the appellate court.

The petition is devoid of merit.

The main thrust of the petition is that the findings of the trial court that the insurance policy covering the cargo was issued at the time when the cargo was already pilfered and that the coverage under Marine Policy No. 100105 PAG never began and that Marine Policy No. 100184 did not attach to the shipment because the shipment was never loaded on any vessel of the defendant should be entitled to considerable weight.

The records of this case show that private respondent executed a continuous and open insurance coverage covering goods of Marinduque imported into and exported from the Philippines which took effect after September 1, 1975, as contained in Marine Open Policy No. 100184. 13 A similar insurance coverage was also executed by petitioner in favor of Marinduque for all its goods shipped or moved within the territorial limits of the Philippines also effective after September 1, 1975 and contained in Marine Open Policy No. 100185. 14

The questioned shipment is covered by this continuing open insurance coverage from the time it was loaded aboard the SS Arthur Maersk in Boston, U.S.A. to the time it was delivered to the possession of petitioner at its offices at Pier 4 in Manila until it was pilfered when the great majority of the cargo was lost on July 3, 1980.

The trial court in dismissing the complaint apparently relied on Marine Risk Note No. 017545 which was issued by private respondent only on July 28, 1980 15 after the shipment in question was already pilfered. 16 Obviously the trial court mistook said Marine Risk Note as an insurance policy when it is not. It is only an acknowledgment or declaration of the private respondent confirming the specific shipment covered by its Marine Open Policy, the evaluation of the cargo and the chargeable premium. 17

The contention of the petitioner that it could not be liable for the pilferage of the cargo as it was stolen even before it was loaded on its vessel is untenable. Petitioner received the cargo when it arrived in Manila at its offices at Pier 4, North Harbor and it was while in its possession and before loading it in its vessel that the cargo was pilfered. Its liability is clear.chanrobles lawlibrary : rednad

Petitioner also decries the proceedings before the lower court as ex-parte without affording it due process. The records however show that the petitioner was declared in default and thus the evidence for Marinduque was received ex-parte in accordance with the rules. Petitioner had only itself to blame under the circumstances.

WHEREFORE, the petition is DISMISSED with costs against petitioner.

SO ORDERED

EN BANC

[G.R. No. L-20998. August 31, 1965.]

ABOITIZ SHIPPING CORPORATION,Petitioner, v. DEMETRIA OQUERIA, and the minors MEMORACION, ELICITA, MAXIMO and MARIETTA, all surnamed BUEN, represented by their mother, the respondent Demetria Oqueria,Respondents.

SYLLABUS

1. WORKMENS COMPENSATION; AWARD WITHOUT PREVIOUS NOTICE AND HEARING, WHEN JUSTIFIED; CASE AT BAR. Petitioner Shipping Corporation was aware of the disappearance of its seaman and yet it did not file the corresponding Employers Report of Accident within fourteen days from the date of the accident or within ten days after it acquired knowledge thereof. Petitioner did not try, either to justify, or even explain, its failure to submit the report within the statutory period. Consequently, petitioner is deemed to have admitted the validity of the claim for compensation, so that the Regional Labor Administrator was justified in readily making the corresponding award, without previous notice and hearing.

D E C I S I O N

Appeal bycertiorari, taken by petitioner Aboitiz Shipping Corporation, from an order and a resolution of the Workmens Compensation Commission, sustaining a claim for compensation of respondents Demetria Oqueria and her children based upon the alleged death of Demetrias husband and father of her children, Sofronio Buen.

The record shows that Sofronio Buen, a seaman of petitioner "was lost at sea while the M/V Carmen was" navigating in the high seas, near Kaubian Island, "making its voyage from Cebu City to Surigao del Norte, on October 14, 1961. A marine protest was filed by the Master" of said vessel, "Publio Gacela, at Tandag, Surigao del Sur, after futile attempts had been made to recover the body of Sofronio Buen" (in the language of the order appealed from). On January 3, 1962, in view of petitioners failure to submit its "employers report of accident" prior thereto, Regional Office No. VIII wrote to the Manager of the Aboitiz Co., Inc., a communication (Annex A) enclosing therewith the corresponding forms, with the request that the same be accomplished and then returned to said office. On January 26, 1962, Aboitiz Co., Inc., replied stating that said vessel belongs, not to said enterprise, but to petitioner Aboitiz Shipping Corporation, to which said letter (Annex A) and the aforementioned forms were indorsed (see Annex B). Soon, thereafter, or on January 29, 1962, petitioner wrote to Regional Office No. VIII the communication Annex C, acknowledging receipt of Annex A and enclosing therewith the aforementioned forms duly accomplished.

Soon, thereafter, or on February 20, 1962, the Regional Labor Administrator, who considered respondents claim for compensation uncontroverted, made the award, Annex G, declaring that said respondents are entitled to a total compensation of P3,806.40, and, accordingly, directing petitioner herein to pay this sum to the respondents, and the sum of P39.00 to the Workmens Compensation Commission as fee thereof under Section 55 of the Workmens Compensation Act, as amended.

On March 16, 1962, petitioner filed a motion, dated March 14, 1962, to set aside said award, which motion was denied in an order of the Regional Labor Administrator of May 14, 1962. On June 21, 1962, petitioner moved for the review of said award of February 20, 1962 and of the aforementioned order of May 14, 1962. By an order dated January 14, 1963, the petition for review was denied by the Chairman of the Workmens Compensation Commission, upon the ground that the motion to set aside the award had been filed out of time. On or about January 26, 1963, petitioner filed a motion for reconsideration of this order of January 14, 1963. The motion was denied by the Workmens Compensation Commission en banc, on February 19, 1963.

Hence this appeal bycertioraritaken by the petitioner, which maintains that the Workmens Compensation Commission erred: (1) in holding that petitioner had not controverted the claim for compensation involved in this case; (2) in not holding that the award of February 20, 1962 and the order of May 14, 1962, denying the petition to set aside said award, are illegal and invalid, the award having been made without previous notice and hearing; (3) in impliedly presuming the death of Buen in consequence of his disappearance from petitioners vessel; (4) in not holding that the filing by petitioner of the Employers Report of Accident or Sickness on January 30, 1962, had satisfied the requirements of Section 1, Rule 14, of the Rules of the Workmens Compensation Commission; (5) in not holding that in sending copy of the award dated February 20, 1962 to petitioners manager instead of to petitioners counsel, the Commission contravened Section 2, Rule 27, of the Rules of Court; (6) in not holding that the reglementary period to seek a review of such award commenced to run from receipt of notice thereof by petitioners counsel; and (7) in concluding that said award has already become final and executory and in affirming said award.

It is not disputed that Sofronio Buen disappeared from petitioners vessel while the same was navigating in the high seas on October 14, 1961, that a watchman of the vessel discovered said disappearance on that same date, and that, after searching in vain for the body of Sofronio, the Master of said vessel filed the corresponding protest. Petitioner was aware, therefore, of said disappearance of Buen since October 14, 1961. Yet, it did not file the corresponding Employers Report of Accident within fourteen (14) days from said date or within ten (10) days after it acquired knowledge of the accident. Pursuant to the second paragraph of Section 45 of the Workmens Compensation Act, as amended, petitioner is deemed, accordingly to have renounced the right to controvert the claim for compensation (National Development Co. vs WCC, Et Al., L-20504, March 31, 1965; Manila Railroad Co. v. Vda. de Chavez, etc., Et Al., L-20103, September 30, 1964; Agustin v. WCC, L-19957, September 29, 1964; Manila Railroad Co. v. Pineda, L-19773, May 30, 1964) unless it "submits reasonable grounds for the failure to make the necessary reports, on the basis of which the commissioner may reinstate his right to controvert the claim." Although petitioner did not submit its Employers Report of Accident and the Employers Supplementary Report of Accident until January 30, 1962, or 108 days after the accident, and after its agent had knowledge thereof, it did not try, either to justify, or even explain, its failure to submit the report aforementioned within the statutory period. As a consequence despite the statement in said Employers Report of Accident (Annex D) to the effect that it controverted the claim for compensation petitioner is deemed, therefore, to have admitted the validity of respondents claim for compensation, so that the Regional Labor Administrator was justified in readily making the corresponding award, without previous notice and hearing.

It is also, clear that, apart from the circumstance that the death of Buen is deemed admitted by petitioner in view of its failure to controvert respondents claim for compensation, said death was properly deduced from the fact that Buen disappeared from petitioners vessel while the same was navigating in the high seas; that, according to petitioners Supplementary Report of Accident (Annex F), Buen must have jumped or fallen overboard; that Buen was then under the influence of Liquor, and, hence, under circumstances unfavorable to an intelligent and effective effort on his part to save his life; that, despite diligent search, his body could not be found, because of which the corresponding marine protest was filed by the Master of said vessel; and that, up to the present, or almost four (4) years later, the whereabouts of Buen has not been located.

As regards the party on whom notice of the award should have been served, suffice it to say that, at the time of said award, petitioners counsel had not, as yet, entered his appearance in the case. Accordingly, notice of said award was properly served upon petitioner itself, on February 24, 1962. Petitioners motion of March 16, 1962, to set aside said award, was filed, therefore, after the expiration of the period of fifteen (15) days prescribed therefor in Rule 23, Section 1, of the Rules of the Commission. In other words, the award was then final and executory.

WHEREFORE, the order and the resolution appealed from are hereby affirmed, with costs against the petitioner. It is so ordered.

THIRD DIVISION

[G.R. No. 100446. January 21, 1993.]

ABOITIZ SHIPPING CORPORATION,Petitioner, v. GENERAL ACCIDENT FIRE AND LIFE ASSURANCE CORPORATION, LTD.,Respondent.

SYLLABUS

1. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; STAY OF EXECUTION OF JUDGMENT; GROUNDS THEREFOR. This Court has always been consistent in its stand that the very purpose for its existence is to see to the accomplishment of the ends of justice. Consistent with this view, a number of decisions have originated herefrom, the tenor of which is that no procedural consideration is sacrosanct if such shall result in the subverting of substantial justice. The right to an execution after finality of a decision is certainly no exception to this. Thus, in Cabrias v. Adil (135 SCRA 355 [1985]), this Court ruled that: ". . . It is a truism that every court has the power to control, in the furtherance of justice, the conduct of its ministerial officers, and of all other persons in any manner connected with a case before it, in every manner appertaining thereto. It has also been said that: . . . every court having jurisdiction to render a particular judgment has inherent power to enforce it, and to exercise equitable control over such enforcement. The court has authority to inquire whether its judgment has been executed, and will remove obstructions to the enforcement thereof. Such authority extends not only to such orders and such writs as may be necessary to carry out the judgment into effect and render it binding and operative, but also to such orders and such writs as may be necessary to prevent an improper enforcement of the judgment. If a judgment is sought to be perverted and made a medium of consummating a wrong the court on proper application can prevent it." (at p. 359) and again in the case of Lipana v. Development Bank of Rizal (154 SCRA 257 [1987]), this Court found that: "The rule that once a decision becomes final and executory, it is the ministerial duty of the court to order its execution, admits of certain exceptions as in cases of special and exceptional nature where it becomes the imperative in the higher interest of justice to direct the suspension of its execution (Vecine v. Geronimo, 59 OG 579); whenever it is necessary to accomplish the aims of justice (Pascual v. Tan, 85 Phil. 164); or when certain facts and circumstances transpired after the judgment became final which would render the execution of the judgment unjust (Cabrias v. Adil, 135 SCRA 354)." (at p. 201)

2. COMMERCIAL LAW; CODE OF COMMERCE; REAL AND HYPOTHECARY NATURE OF MARITIME LAW; MEANING; ORIGIN AND PURPOSE. The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel, which is hypothecated for such obligations or which stands as the guaranty for their settlement. It has its origin by reason of the conditions and risks attending maritime trade in its earliest years when such trade was replete with innumerable and unknown hazards since vessels had to go through largely uncharted waters to ply their trade. It was designed to offset such adverse conditions and to encourage people and entities to venture into maritime commerce despite the risks and the prohibitive cost of shipbuilding. Thus, the liability of the vessel owner and agent arising from the operation of such vessel were confined to the vessel itself, its equipment, freight, and insurance, if any, which limitation served to induce capitalists into effectively wagering their resources against the consideration of the large profits attainable in the trade. It might be noteworthy to add in passing that despite the modernization of the shipping industry and the development of high-technology safety devices designed to reduce the risks therein, the limitation has not only persisted, but is even practically absolute in well-developed maritime countries such as the United States and England where it covers almost all maritime casualties. Philippine maritime law is of Anglo-American extraction, and is governed by adherence to both international maritime conventions and generally accepted practices relative to maritime trade and travel.

3. ID.; ID.; LIMITED LIABILITY RULE; WHEN RULE NOT APPLICABLE; WHEN RULE PROPERLY INVOKED; CASE AT BAR. In this jurisdiction, on the other hand, its application has been well-nigh constricted by the very statute from which it originates. The Limited Liability Rule in the Philippines is taken up in Book III of the Code of Commerce, particularly in Articles 587, 590, and 837, hereunder quoted in toto: "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 her equipment 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 this 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 (on collisions), shall be understood as limited to the value of the vessel with all its appurtenances and freightage served during the voyage." Taken together with related articles, the foregoing cover only liability for injuries to third parties (Art. 587), acts of the captain (Art. 590) and collisions (Art. 837). In view of the foregoing, this Court shall not take the application of such limited liability rule, which is a matter of near absolute application in other jurisdictions, so lightly as to merely "imply" its inapplicability, because as could be seen, the reasons for its being are still apparently much in existence and highly regarded. We now come to its applicability in the instant case. In the few instances when the matter was considered by this Court, we have been consistent in this jurisdiction in holding that the only time the Limited Liability Rule does not apply is when there is an actual finding of negligence on the part of the vessel owner or agent (Yango v. Laserna, 73 Phil. 330 [1941]; Manila Steamship Co., Inc. v. Abdulhanan, 101 Phil. 32 [1957]; Heirs of Amparo delos Santos v. Court of Appeals, 186 SCRA 649 [1967]) . . . We must stress that the matter of the Limited Liability Rule as discussed was never in issue in all prior cases, including those before the RTCs and the Court of Appeals. As discussed earlier, the "limited liability" in issue before the trial courts referred to the package limitation clauses in the bills of lading and not the limited liability doctrine arising from the real and hypothecary nature of maritime trade. The latter rule was never made a matter of defense in any of the cases a quo, as properly it could not have been made so since it was not relevant in said cases. The only time it could come into play is when any of the cases involving the mishap were to be executed, as in this case. Then, and only then, could the matter have been raised, as it has now been brought before the Court.

4. ID.; ID.; ID.; RIGHTS OF VESSEL OWNER OR AGENT AKIN TO RIGHTS OF SHAREHOLDERS TO LIMITED LIABILITY UNDER CORPORATION LAW; RIGHTS OF CLAIMANTS AGAINST VESSEL OWNER OR AGENT COMPARED TO RIGHTS OF CREDITORS AGAINST INSOLVENT CORPORATION WITH SUFFICIENT ASSETS. The rights of a vessel owner or agent under the Limited Liability Rule are akin to those of the rights of shareholders to limited liability under our corporation law. Both are privileges granted by statute, and while not absolute, must be swept aside only in the established existence of the most compelling of reasons. In the absence of such reasons, this Court chooses to exercise prudence and shall not sweep such rights aside on mere whim or surmise, for even in the existence of cause to do so, such incursion is definitely punitive in nature and must never be taken lightly. More to the point, the rights of parties to claim against an agent or owner of a vessel may be compared to those of creditors against an insolvent corporation whose assets are not enough to satisfy the totality of claims as against it. While each individual creditor may, and in fact shall, be allowed to prove the actual amounts of their respective claims, this does not mean that they shall all be allowed to recover fully thus favoring those who filed and proved their claims sooner to the prejudice of those who come later. In such an instance, such creditors too would not also be able to gain access to the assets of the individual shareholders, but must limit their recovery to what is left in the name of the corporation. Thus, in the case of Lipana v. Development Bank of Rizal earlier cited, We held that: "In the instant case, the stay of execution of judgment is warranted by the fact that respondent bank was placed under receivership. To execute the judgment would unduly deplete the assets of respondent bank to the obvious prejudice of other depositors and creditors, since, as aptly stated in Central Bank v. Morfe (63 SCRA 114), after the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the trustee of its assets for the equal benefit of all creditors, and after its insolvency, one cannot obtain an advantage or preference over another by an attachment, execution or otherwise." In both insolvency of a corporation and the sinking of a vessel, the claimants or creditors are limited in their recovery to the remaining value of accessible assets. In the case of an insolvent corporation, these are the residual assets of the corporation left over from its operations. In the case of a lost vessel, these are the insurance proceeds and pending freightage for the particular voyage.

5. ID.; ID.; ID.; COLLATION OF ALL CLAIMS PREPARATORY TO SETTLEMENT OUT OF INSURANCE PROCEEDS ON VESSEL; NO CLAIMANT GIVEN PRECEDENCE OVER OTHERS; CASE AT BAR. In the instant case, there is, therefore, a need to collate all claims preparatory to their satisfaction from the insurance proceeds on the vessel M/V P. Aboitiz and its pending freightage at the time of its loss. No claimant can be given precedence over the others by the simple expedience of having filed or completed its action earlier than the rest. Thus, execution of judgment in earlier completed cases, even those already final and executory, must be stayed pending completion of all cases occasioned by the subject sinking. Then and only then can all such claims be simultaneously settled, either completely or pro-rata should the insurance proceeds and freightage be not enough to satisfy all claims . . . In fairness to the claimants, and as a matter of equity, the total proceeds of the insurance and pending freightage should now be deposited in trust. Moreover, petitioner should institute the necessary limitation and distribution action before the proper admiralty court within 15 days from the finality of this decision, and thereafter deposit with it the proceeds from the insurance company and pending freightage in order to safeguard the same pending final resolution of all incidents, for final pro-rating and settlement thereof.

D E C I S I O N

This refers to a petition for review which seeks to annul and set aside the decision of the Court of Appeals dated June 21, 1991, in CA G.R. SP No. 24918. The appellate court dismissed the petition forcertiorarifiled by herein petitioner, Aboitiz Shipping Corporation, questioning the Order of April 30, 1991 issued by the Regional Trial Court of the National Capital Judicial Region (Manila, Branch IV) in its Civil Case No. 144425 granting private respondents prayer for execution for the full amount of the judgment award. The trial court in so doing swept aside petitioners opposition which was grounded on the real and hypothecary nature of petitioners liability as ship owner. The application of this established principle of maritime law would necessarily result in a probable reduction of the amount to be recovered by private respondent, since it would have to share with a number of other parties similarly situated in the insurance proceeds on the vessel that sank.

The basic facts are not disputed.

Petitioner is a corporation organized and operating under Philippine laws and engaged in the business of maritime trade as a carrier. As such, it owned and operated the ill-fated "M/V P. ABOITIZ," a common carrier which sank on a voyage from Hongkong to the Philippines on October 31, 1980. Private respondent General Accident Fire and Life Assurance Corporation, Ltd. (GAFLAC), on the other hand, is a foreign insurance company pursuing its remedies as a subrogee of several cargo consignees whose respective cargo sank with the said vessel and for which it has priorly paid.

The incident of said vessels sinking gave rise to the filing of suits for recovery of lost cargo either by the shippers, their successor-in-interest, or the cargo insurers like GAFLAC as subrogees. The sinking was initially investigated by the Board of Marine Inquiry (BMI Case No. 466, December 26, 1984), which found that such sinking was due to force majeure and that subject vessel, at the time of the sinking was seaworthy. This administrative finding notwithstanding, the trial court in said Civil Case No. 144425 found against the carrier on the basis that the loss subject matter therein did not occur as a result of force majeure. Thus, in said case, plaintiff GAFLAC was allowed to prove, and was later awarded, its claim. This decision in favor or GAFLAC was elevated all the way up to this Court in G.R. No. 89757 (Aboitiz v. Court of Appeals, 188 SCRA 387 [1990]), with Aboitiz, like its ill-fated vessel, encountering rough sailing. The attempted execution of the judgment award in said case in the amount of P1,072,611.20 plus legal interest has given rise to the instant petition.

On the other hand, other cases have resulted in findings upholding the conclusion of the BMI that the vessel was seaworthy at the time of the sinking, and that such sinking was due to force majeure. One such ruling was likewise elevated to this Court in G.R. No. 100373, Country Bankers Insurance Corporation v. Court of Appeals, Et Al., August 28, 1991 and was sustained. Part of the task resting upon this Court, therefore, is to reconcile the resulting apparent contrary findings in cases originating out of a single set of facts.

It is in this factual milieu that the instant petition seeks a pronouncement as to the applicability of the doctrine of limited liability on the totality of the claims vis a vis the losses brought about by the sinking of the vessel MV P. ABOITIZ, as based on the real and hypothecary nature of maritime law. This is an issue which begs to be resolved considering that a number of suits alleged in the petition number about 110 (p. 10 and pp. 175 to 183, Rollo) still pend and whose resolution shall well-nigh result in more confusion than presently attends the instant case.

In support of the instant petition, the following arguments are submitted by the petitioner:chanrob1es virtual 1aw library

1. The Limited Liability Rule warrants immediate stay of execution of judgment to prevent impairment of other creditors shares;

2. The finding of unseaworthiness of a vessel is not necessarily attributable to the shipowner; and

3. The principle of "Law of the Case" is not applicable to the present petition. (pp. 2-26, Rollo.)

On the other hand, private respondent opposes the foregoing contentions, arguing that:cralawnad

1. There is no limited liability to speak of or applicable real and hypothecary rule under Article 587, 590, and 837 of the Code of Commerce in the face of the facts found by the lower court (Civil Case No. 144425), upheld by the Appellate Court (CA G.R. No. 10609), and affirmed in toto by the Supreme Court in G.R. No. 89757 which cited G.R. No. 88159 as the Law of the Case; and

2. Under the doctrine of the L