Manila Steamship v.

Abdulhaman
G.R. L-9534 – September 29, 1956
J.J.B.L Reyes

Topic: Persons participating in maritime commerce – shipowners and ship agents – responsibilities and liabilities
Doctrine: It is a general principle, well established in maritime law and custom, that shipowners and ship agents are civilly
liable for the acts of the captain and for the indemnities due third persons

Petitioner: Manila Steamship Co.

Respondents: Insa Abdulhaman and Lim Hong To

Case Summary: Abdulhaman, together with his children were aboard M/L Consuelo, owned by Lim Hong To. During its
voyage, it collided with M/S Bowline Knot, and some passengers and crew died and many went missing. The trial court
ruled that Manila Steamship, as owner of Bowline Knot is solidarily liable to Abdulhaman for the damages caused by the
collision since it was found to be attributable to the negligence of its captain, and given that the captain is an agent of the
owner, then the principal is liable therefore. With regard to Hong To’s liability, the Court disagreed with the CA in holding
that he could limit his liability so as to give meaning to the provision that allows a limited liability upon the total loss of the
vessel. The Coourt declared that this would render nugatory the provisions of the Code of Commerce provide the solidary
liability for the greater protection of injured parties.

Facts:

 May 4, 1948: M/L Consuelo V, laden with cargo and passengers left the port of Zamboaga bound for Siokon; the
weather was good and fair
o Among the passengers were Insa Abdulhaman, his wife Carimla nd their 5 chilcren
o On the same night, M/S Bowline Knot was navigating from Maribojoc towards Zamboanga
o Between 9-10pm, the clouds started getting bloated with rain and a strong wind began to blow steadily
harder, lashing the waves into a choppy and roaring sea
 Although this was so, the visibility was good enough
o While some of the passengers of Consuelo were sleeping, all of a sudden there was a shock of a collision
with Bowline
 Consuelo capsized and both the crew and passengers found themselves floating and swimming on
the crest of the waves – 9 people died including the children of Insa
o The CA affirmed the findings of the Board of Marine Inquiry that the commanding officer of both vessels
were negligent in operating their respective vessels
 The CA held the owners of both vessels solidarily liable to Insa for the damages caused by the
collision, but exempted Defendant Lim Hong To from any liability by reason of the sinking and
total loss of his vessel, Consuelo
 Manila Steamship claims that it is exempt from any liability under Article 1903 of the Civil Code because it had
exercised the diligence of a good father of a family in the selection of its employees, particularly the officer in
command of its vessel “Bowline” at the time of the collision

Issues + Held:
1. W/N Manila Steamship is relieved of liability – NO
 MS’s defense is untenable! While it is true that the action was based on a tort or quasi-delict, the torn in question is
not a civil tort under the Civil Code, but a maritime tort resulting in a collision at sea  governed by Articles 826-
839 of the Code of Commerce
o Under Article 827, in case of collision between two vessels imputable to both of them, each vessel shall
suffer her own damage and both shall be solidarily liable for the damages occasioned to their cargoes
 This emphasizes the direct nature of the responsibilities on account of the collision incurred by the
shipowner under maritime law, as distinguished from the civil law and mercantile law in general
 This direct responsibility is recognized under Article 618 of the Code of Commerce where the
captain shall be civilly liable to the ship agent, and the latter to third persons
 In the case of Yueng Sheng v. Urrutia the court declared that “the direct responsibility
involved is that derived from the management of the vessel, which was defective on account
of lack of skill, negligence, or fault, either of the captain or of the crew, for which the captain
 is responsible to the agent, who in his turn, is responsible to the third party prejudiced or
damaged.”
 It is a general principle, well established in maritime law and custom, that shipowners and ship
agents are civilly liable for the acts of the captain and for the indemnities due third persons
 This is in place so that injured parties may immediately look for reimbursement to the owner
of the ship, it being universally recognized that the ship master or captain is primarily the
representative of the owner
 It is proven that agents and employees, through whose negligence the explosion and fire in
question occurred, were agents, employees and mandatories of Defendant
 Where the vessel is one of freight, a public concern or public utility, its owner or agents is
liable for the tortious acts of his agents
 It is easy to admit the defense of due diligence of a bonus paterfamilias (in selection and vigilance of the officers
and crew) as exempting the shipowner from any liability for their faults wound render nugatory the solidary liability
established by Article 827 of the Code of Commerce for the greater protection of injured parties
o The Court, therefore, finds no reversible error in the refusal of the CA to consider the defense of Manila
Steamship
 The Court, however, agrees with Manila Steamship that the CA erred in declaring that Lim Hong To, owner of
Consuelo V, exempt from liability, in view of the total loss of own vessel that sank as a result of the collision
o The CA held that neither the letter nor the permit contained any waiver of the right of Hong To to limit his
liability to the value of his motor launch and that he did not lose the statutory right to limit his liability by
abandonment of the vessel
o The SC ruled that this is untenable  Hong To deliberately increased the risk to which the passengers and
shippers of cargo aboard Consuelo would be subjected in his desire to reap greater benefits in the maritime
trade
o Hong To willfully augmented the dangers and hazards to his vessel’s unwary passengers who would
normally assume that the launch officers possessed the necessary skill and experience to evade the perils of
the sea  hence, liability of Hong To cannot be identical to that of a shipowner who bears in mind the
safety of the passengers and cargo by employing duly licensed officers
 The international rule is to the effect that the right of abandonment of vessels, as a legal limitation
of a shipowner’s liability, does not apply to cases where the injury or the average is due to
shipowner’s own fault
o Hong To understood that he would incur greater liability than that normally borne by shipowners  this is
clear from his assumption of “full” risk and responsibility for the all the consequences of the operation of
Consuelo  a responsibility expressly assumed in his letter, and imposed in his special permit, in addition
to the vessel itself being held answerable
 The express assumption of “full risk and responsibility” would be meaningless unless intended to
broaden the liability of Hong To beyond the value of his vessel

Ruling: IN VIEW OF ALL OF THE FOREGOING, the assailed judgment of respondent Court of Appeals if MODIFIED.