KINDS OF INSURANCE CONTRACT

1. Fire
2. Casualty
3. Suretyship
4. Life
5. CMVLI
6. Marine
FIRE INSURANCE

 Contract of indemnity by which the insurer for a stipulated premium,

agrees to indemnify the insured against loss of or damage to, a property
caused by fire

 May include loss by lightning, windstorm, tornado, or earthquake and

other allied risks, when such risks are covered by extension to fire
insurance policies or under separate policies (Sec. 169, ICP)

Friendly Fire Hostile Fire

- Fire that burns in a place where it is - Fire that escapes (spread) and burns
supposed to burn in a place where it is not supposed to
be

Note: what is covered by the fire insurance policy is hostile fire, not merely
friendly fire

Effect of Alteration in the use or condition of the thing insured

From that to which it is limited by the policy
- Rescission of contract of fire insurance
Provided that the following requisites are present:

a. The use or condition of the thing (insured) is specifically limited or

stipulated in the policy;
b. Such use or condition as limited by the policy is altered;
c. The alteration is made without the consent of the insurer;
d. The alteration is made by means within the control of the insured; and
e. The alteration increased the risk (Sec. 170, ICP)
 NB: An alteration in the use or condition of the thing insured from that to
which it is limited by the policy DOES NOT AFFECT a contract of fire
insurance IF:

a. it does not increase the risk; or

b. it does not violate its provisions even though it increases the risk and is
the cause of the loss

Examples of Material alteration

1. Converting an insured residential house to a factory; and

2. Transfer of the insured machineries and equipment from one building to
another that was not stipulated in the policy without the consent of the
insurer because this change the condition of the thing insured

Every contract of insurance is made with reference to conditions surrounding

the subject matter of the risk. Thus, there is an implied promise or undertaking on
the part of the insured that he will not change the premises or the character of
the business carried there so as to increase the risk of loss by fire. (44 AmJur 2d
138)

Measure of indemnity in Open vs Valued Policies

Open Policy Valued Policy

Only the expense necessary to Parties are bound by the valuation, in
replace the thing lost or injured in the the absence of fraud or mistake,
condition it was at the time of the similar to Marine Insurance
injury will be paid

If there is valuation:

 The effect shall be similar to a marine insurance policy wherein the

valuation is conclusive between the parties in adjusting the loss (Sec. 158,
ICP)
In the absence of express valuation:

 The insured is only entitled to recover the amount of actual loss sustained
 The burden of proof is upon him to establish the amount of such loss by
preponderance of evidence
CASUALTY INSURANCE

- An insurance covering loss or liability arising from accident or mishap,

excluding those falling under other types of insurance such as fire or
marine (Sec. 176, ICP)
Accidental vs Intentional as used in Insurance

Intentional as used in an accident policy excepting intentional injuries inflicted

by the insured or any other person implies the exercise of the reasoning
faculties, consciousness and volition. Where a provision of the policy excludes
intentional injury, it is the intention of the person inflicting the injury that is
controlling.

If the injuries suffered by the insured clearly resulted from the intentional act of a
third person, the insurer is relieved from liability as stipulated.

The terms “accident” or “accidental” as used in insurance contracts, have not

acquired any technical meaning. They are construed by the courts in the
ordinary and common acceptation. Thus, the terms have been taken to mean
that which happen by chance or fortuitously, without intention or design, which
is unexpected, unusual or unforeseen. The terms do not, without qualification,
exclude events resulting in damage or loss due to fault, recklessness or
negligence of third parties. The concept is not necessarily synonymous with “no
fault”. It may be utilized simply to distinguish intentional or malicious acts from
negligent or careless acts of man.
TWO GENERAL DIVISIONS

Liability Insurance Indemnity Insurance

Third-party liability insurance against liability to third
person
Insurer assumes the obligation to pay Insurer
the third party in whose favor the
liability of the insured arises; however,
the insurer is not solidarily liable with
the insured for his obligation
Liability of the insurer attaches as soon Attaches only after the insured has
as the liability of the insured to the paid his liability to the third party
third party is established
Covers liability incurred from quasi-
delict or criminal negligence but
cannot cover deliberate acts
Third party may directly sue the
insurer upon the occurrence of the
loss
If the insurer pays the third person, the
right of subrogation operates
Third person who might be injured
may not sue the insurer directly; only
the insured (sought to be held liable
by the third person) can recover from
the insurer

NO ACTION CLAUSE

- Requirement in a policy of liability insurance which provides that a suit

must first be instituted and a final judgment be first obtained against
the insured; only thereafter can the person injured recover on the
policy

SURETYSHIP

- An agreement whereby the surety guarantees the performance by

another of an undertaking or an obligation in favor of a third party
(Sec. 177,
- An agreement whereby a surety guarantees the performance or
undertakes to answer, under specified terms and conditions, for the
debt, default or miscarriage of the principal or obligor, such as failure
to perform, or breach of trust, negligence and the like, in favor of a
third party
- Shall be deemed an insurance contract if the surety’s main business is
that of suretyship, and not where the contract is merely incidental to
any other legitimate business or activity of the suretyship

NATURE OF A SURETY’S UNDERTAKING

1. CONTRACTUAL AND ACCESSORY BUT DIRECT—The contractual

obligation of the surety is merely an accessory
or collateral to the obligation contracted by the principal. BUT, his liability
to the creditor is direct, primary, and absolute.

2. LIABILITY IS LIMITED BY THE TERMS OF THE CONTRACT—The extent of a surety’s

liability is determined only by the
terms of the contract and cannot be extended by implication.
3. LIABILITY ARISES ONLY IF PRINCIPAL DEBTOR IS HELD LIABLE—
If the principal debtor and the surety are held liable, their liability to pay the
creditor would be solidary. But, the surety does not incur liability unless and until
the principal debtor is held liable.
a. A surety is bound by a judgment against the principal even though the
party was not a party to
the proceedings.
b. The creditor may sue, separately or together, the
principal debtor and the surety (since they are solidarily bound).
c. Generally, a demand or notice of default is not required to fix the
surety’s liability.
d. An accommodation party (one who signs an instrument as maker,
drawer, acceptor, or indorser
without consideration and only for the purpose of lending his name) is, in
effect, a surety. He is thus
liable to pay the holder of the instrument, subject to reimbursement from the
accommodated party.

e. A surety bond is void where there is no principal debtor.

4. SURETY IS NOT ENTITLED TO EXHAUSTION—A surety is

not entitled to the exhaustion of the properties of the
principal debtor since the surety assumes a solidary liability for the fulfillment
of the principal obligation.

5. THE UNDERTAKING IS TO THE CREDITOR, NOT TO THE PRINCIPAL DEBTOR—

The debtor cannot claim that the
surety breached its obligation to pay for the principal
obligation because there is no obligation as between the
surety and the debtor. If the surety does not pay, the
principal debtor is still not relieved of his obligation.

6. SURETY NOT ENTITLED TO NOTICE OF PRINCIPAL’S DEFAULT—

the surety is bound to take notice of the principal’s default to perform the
obligation

7. PRIOR DEMAND BY THE CREDITOR UPON PRINCIPAL NOT REQUIRED—the right

of the creditor to proceed against the
surety alone exists independently of his right to proceed
against the principal where both surety and principal are equally bound

8. SURETY IS NOT EXONERATED BY NEGLECT OF ANOTHER TO SUE PRINCIPAL—

mere want of diligence or forbearance doesn’t affect the creditor’s rights vis-
à-vis the surety, unless the surety requires him by appropriate notice to sue
on the obligation. The rationale for the rule is that
there is nothing to prevent the creditor from proceeding against the principal at
any time

LIFE INSURANCE

- Insurance on human life and insurance appertaining thereto or

connected therewith includes every contract or undertaking for the
payment of endowments or annuities (Sec. 181, ICP)

Annuity – every contract or undertaking for the payment of annuities

including contracts for the payment of lump sums under a retirement
program where a life insurance company manages or acts as a trustee
for such retirement program shall be considered insurance contract.

Effect of death of insured through suicide

The insurer in a life insurance contract shall be liable in case of suicide by the
insured if:

a. Suicide was committed after the policy has been in force for a period of 2
years from the date of its issue or its last reinstatement, unless the policy
provides a shorter period;
b. Suicide committed in a state of insanity; it shall make the insurer liable
regardless of the date of the commission of the suicide

Accidental death

Sun v CA G.R. No. 92383 July 17, 1992

J. Cruz

Facts:
Lim accidentally killed himself with his gun after removing the magazine, showing
off, pointing the gun at his secretary, and pointing the gun at his temple. The
widow, the beneficiary, sued the petitioner and won 200,000 as indemnity with
additional amounts for other damages and attorney’s fees. This was sustained in
the Court of Appeals then sent to the Supreme court by the insurance company.

Issue:
Was Lim’s widow eligible to receive the benefits?

Held:
Yes

Ratio: There was an accident.

De la Cruz v. Capital Insurance says that "there is no accident when a deliberate
act is performed unless some additional, unexpected, independent and
unforeseen happening occurs which produces or brings about their injury or
death." This was true when he fired the gun.
Under the insurance contract, the company wasn’t liable for bodily injury caused
by attempted suicide or by one needlessly exposing himself to danger except to
save another’s life.
Lim wasn’t thought to needlessly expose himself to danger due to the witness
testimony that he took steps to ensure that the gun wasn’t loaded. He even
assured his secretary that the gun was loaded.
There is nothing in the policy that relieves the insurer of the responsibility to pay
the indemnity agreed upon if the insured is shown to have contributed to his own
accident.

COMPULSORY MOTOR VEHICLE LIABILITY INSURANCE

Mandatory insurance or guaranty to indemnify the death or bodily injury of a

third party or passenger arising from the use thereof. Registration of any vehicle
will not be made or renewed without complying with the requirement (Sec. 389,
ICP)

- May be complied with using any of the following: (1) insurance policy;
(2) surety bond; (3) cash bond.
Motor vehicle – any vehicle as defined in Land Transportation and Traffic Code

Passenger – any fare paying person being transported and conveyed in and by
a motor vehicle for transportation of passengers for compensation, including
persons expressly authorized by law or by the vehicle’s operator or his agents to
ride without fare
Coverage - P100,000.00 (plus additional P100,000.00 if what is involved is used as
public utility (Insurance Memo. Circular 4-2006)

Death indemnity – P70,000.00 plus P30,000.00 funeral expenses

Limit of liability:
The SC previously ruled that the insurer’s liability will not exceed P100,000.00 (plus
another P100,000.00 if common carrier or P200,000.00) regardless of the number
of passengers killed or injured (First Quezon City Co., Inc. Vs CA)

However, the limit is now per person/injury under the LTFRB M.C. No. 2014-02

Purpose of Compulsory Third-party liability Insurance

- To give immediate financial assistance to victims of motor vehicle

accidents and/or their dependents, especially if they are poor
regardless of the financial capability of motor vehicle owners or
operators responsible for the accident sustained (First Integrated
Bonding and Ins. Co., Inc. vs Hernando)

No Fault Clause (Sec. 391, ICP)

The injured third party or passenger is given the option to file a claim for death or
injury without the necessity of proving fault or negligence of any kind under the
following circumstances:

a. Total indemnity – not exceeding P15,000.00;

b. Proofs of loss sufficient evidence to substantiate claim: (1) Police report of
accident; and (2) Death certificate and evidence sufficient to establish
the proper payee; or (3) medical report or evidence of medical or
hospital disbursement in respect of which refund is claimed;
c. Claim may be made against one motor vehicle only

From whom should the injured recover

a. In the case of an occupant of a vehicle, claim shall lie against the insurer
of the vehicle in which the occupant is riding, mounting or dismounting
from
 b. If not occupant, claim shall lie against the insurer of the directly offending
vehicle
c. In all cases, the right of the party paying the claim to recover against the
owner of the vehicle responsible for the accident shall be maintained

MARINE

- Type of transportation insurance which is concerned with the perils of

navigation, property in transit or those risks incidental thereto
Risks covered
- Specifically provided under Sec. 101 of the ICP
2 MAJOR DIVISIONS

1. Ocean Marine Insurance

-insures against risk connected with the navigation to which a ship, cargo,
freightage, profits or other insurable interests in movable property may be
exposed during a certain voyage or fixed period of time

4 Groups:

a. Ships or hulls
b. Goods or cargoes
c. Earnings/freightage
d. Liability

Over the vessel – Example: insurance for loss or damage to the vessel; insurance
for the construction, conversion and repair of the hull (Builder’s risk policy)

Insurance over the cargo – insures the goods that are being shipped against loss
or damages, Example: if it is specifically provided that the insurance policy will
only cover the loss/damage to camote na idedeliver sa Rapu-rapu, then the
bananas will not be covered

Against liability – protects the owner of the carrier or vessel against liability to
other persons, Example: insurance policy that insures liability for collission

Insurance over earnings – may cover loss of freightage for failure to complete
the voyage or delivery of the goods
Freightage – amount of money paid for carrying goods (read Sec. 102, ICP for
the more precise definition)

Inland Marine Insurance

- Covers the land transportation perils of property shipped by railroads,

motor trucks, and other means of transportation
- Risks of lake, rivers or other inland waterway transportation and other
waterborne perils outside those covered by Ocean M.I.
Average

- Extraordinary or accidental expense incurred during the voyage for

the preservation of vessel, cargo or both from the time it is loaded and
the voyage commenced until it ends and cargo is unloaded
Two kinds of Average

1. Gross or General Average

2. Simple or Particular Average
JETTISON – goods are thrown overboard to save other cargoes and/or the ship
General Averages

- Damages and expenses which are deliberately caused by the master

of the vessel or upon his authority, in order to save the vessel, her cargo
or both at the same time from a real and known risk
Requisites:
a. Common danger to the vessel or cargo
b. Part of the vessel was sacrificed deliberately
c. The sacrifice must be for the common safety or for the benefit of all
d. Made by the master or upon his authority
e. Must not be caused by any fault on the party asking contribution
f. Must be successful
g. Must be necessary
Particular Average

- Damages and expenses not inured to the common benefit and profit
o interested in the vessel and her cargo
- Suffered by and borne alone by the owner of the cargo or the vessel
 - Owner of the goods is not entitled to receive contribution from other
owners
Example:

A vessel owned by “A” valued at P5 million, is on the way to Singapore to deliver

the goods belonging to X, Y and Z. the value of the cargoes belonging to each
of them are valued at P1 million each (a total of P3million worth of cargoes).
Later, a strong typhoon placed the vessel at peril forcing the captain and its
crew to lighten its load by jettisoning the cargoes belonging to X. As a result, the
vessel and the cargoes of Y and Z safely reached Singapore. The vessel is
insured with RR Insurance Co. for its full value while the cargoes of Z are fully
insured with SS Insurance Co.
Can X recover from RR and SS?
Ans: YES. X can recover from RR and SS.

The case involves a general average, hence, those who benefited from the loss
incurred by X are liable for general average contribution. The facts show that A,
Y and Z are liable for contribution because the properties were saved when the
cargoes of X were jettisoned. Consequently, the insurers of A and Z are also
liable.

Perils of the Sea

- Refers only to fortuitous accidents or casualties of the seas

- Do not include the natural and ordinary action of the sea or wave
(wear and tear)
- The mere fact that an injury is due to violence of some marine force
does not necessarily bring it within the protection of the policy if not
unusual or unexpected
- Includes only such losses as are of extraordinary nature or arising from
some overwhelming power which cannot be guarded against by the
ordinary exertion of human skill or prudence
- Distinguished from ordinary wear and tear of the voyage and from
injuries suffered by the vessel in consequence of her not being
unseaworthy
Examples of Perils of the Sea

- Rusting of steel pipes in the course of voyage; Rust is not an inherent

vice of the steel pipes without interference of external factors
 - Storms, collision of the vessel, fire. Smoke and noxious fumes; sinking,
flooding and capsizing and any hazards resulting from the unique
environment of the sea
Perils of the Ship

- Loss in the ordinary course of events resulting:

a. From the ordinary, natural, and inevitable action of the sea;
b. From ordinary wear and tear of the ship; and
c. From the negligent failure of the ship’s owner to provide the vessel
with proper equipment to convey the cargo under ordinary
conditions
GENERAL RULE:

- In the absence of stipulation, the risks Insured against are only perils of
the sea
EXCEPTION:

- When there is an all-risk policy provided that the injuries suffered by the
vessel is not as a consequence of her not being unseaworthy
- All risks, regardless of their nature, shall be covered by the insurance
policy unless those loss attributable to the insured himself

Wear and tear – a thing deteriorates or depreciates in value by the ordinary and
reasonable use thereof
Insurable interest in Marine Insurance

-such interest arising from the relation of the insured as will justify a reasonable
expectation of advantage/benefit
Parties with insurable interest

a. Shipowner – (1) over the value of the vessel (even if chartered and the
charterer agreed to pay the shipowner the value of the vessel in case of
loss, however the shipowner can recover only the amount not
recoverable from the charterer; (2) over the expected freightage

b. Cargo owner/shipper – over the cargo and expected profits

c. Charterer – (1) over the vessel up to the extent of the amount he is liable
to the shipowner, if the ship or lost or damaged during the voyage; (2)
over his expected profits or freightage if he accepts cargoes from other
persons for a fee; (3) over his own cargo or his client’s carg
Kinds of charter parties

What is a voyage charter party?

A voyage charter party can be defined as a legal contract, in which shipowners

promise to carry a particular cargo on a particular ship on a particular voyage
for an agreed sum.

What is a time charter party?

A time charter party can be defined as a legal contract, in which charterers are
hiring of vessels for a specific period of time from the shipowners.

What are the differences between voyage charter parties and time charter
parties?

Responsibilities of the Parties:

Time Charter Parties:

 Under time charter party contracts, shipowner remains responsible for the
technical operation of the vessel, but commercial control of the vessel is
handled by the charterer.
 Under time charter party contracts, shipowner must cover all costs
associated with crewing, maintenance of the vessel and insurance, but vessel
fuel consumption and port charges will be compensated by the charterer.

Voyage Charter Parties:

 Under voyage charter party contracts both technical and commercial
management handled by the shipowner.
 Under voyage charter party contracts, shipowner is not only responsible
for the costs associated with crewing, maintenance of the vessel and insurance,
but also pays for all the costs of the voyage, including bunkers and port
charges.

Duration:

Time Charter Parties:

 Time charter party contracts are signed for a limited period of time
without dictating a fixed route to the charterer. During the charter party
contract period, the charterer could operate the
vessel commercially within allowed routes freely.
Voyage Charter Parties:
 Voyage charter party contracts are signed to carry specific amount of
goods between pre-determined route. Under voyage charter parties shipowners
carry pre-defined cargo between pre-determined ports. Once the
transportation is completed, the voyage charter party contract comes to an
end.

Calculation of the Contract Amount:

Time Charter Parties:

 Under time charter party contracts, charterers pay daily hire to the
shipowners of the vessels.
Voyage Charter Parties:
 Under voyage charter party contracts, charterers are obliged to pay the
freight to the shipowners. Freight is calculated either according to the quantity
of cargo loaded or carried, or a lump sum freight (money paid to shipper for a
charter of a ship up to stated limit irrespective of quantity of cargo).

IMPLIED WARRANTIES

Seaworthiness of the vessel

Seaworthy – when reasonable fit to perform the service and to encounter the
ordinary perils of the voyage, contemplated by the parties to the policy

There should be due consideration:

1. To the nature of the ship
2. The voyage
3. The service to be performed

Extends not only to condition of the structure of the ship itself, but requires that it
be properly laden and provided with competent master, a sufficient number of
competent officers and seamen, and the requisite appurtenances and
equipment

An implied warranty of seaworthiness is complied with if the ship be seaworthy

at the time of the commencement of the risk, except in the cases provided
under Sec 117 (a) and (b), Sec 119, Sec. 120

The ship must be seaworthy at the time of the voyage. It doesn't have to be
seaworthy all the time except if:
a.) Time Policy – insurance is made for a specified length of time, the implied
warranty is not complied with unless the vessel is seaworthy at the beginning of
each voyage it undertakes during that time
b.) Voyage Policy -the ship must be seaworthy at the beginning of each stage of
the voyage
c.) Cargo Policy -the ship receiving the cargo must be seaworthy at the beginning
of each voyage
It's possible that the ship could be seaworthy for insurance purposes but not when
it comes to insuring the cargo.

Generally, It is only the commencement of the voyage that is the reckoning point
to determine if the implied warranty of seaworthiness was complied with. If the
vessel becomes unseaworthy after the commencement of the voyage, then there
is no breach of warranty.

Exception: (Sec. 120)

When the ship becomes unseaworthy during the voyage to which an insurance
relates, an unreasonable delay in repairing the defect exenorates the insurer on
ship or shipowner’s interest from liablity from any loss arising therefrom

For example:

A typhoon damaged the vessel on its way to destination forcing it to seek refuge
in another port. If the shipowner did not repair or delays in repairing the vessel
even if it was in a position to do so without unnecessary delay, the insurer will be
exonerated from any loss arising therefrom.

Implied warranty against improper deviation

Deviation – departure of vessel from course of voyage, or an unreasonable

delay in pursuing voyage or the commencement of an entirely different voyage

It must not deviate from the voyage. Deviation includes departing from the
course of the voyage, going on a completely different one or even an
unreasonable delay in undertaking the voyage. A deviation is allowed if:

a.) Made in good faith to save human life or relieving another ship in distress (but
not to save cargo)
b.) It is necessary to comply with a warranty or avoid peril
c.) Caused by circumstances beyond the captain's and shipowner's control
d.) Made in good faith and with reasonable ground to avoid peril

every deviation not specified is improper

3.) The ship must not engage in an illegal venture

Loss and Abandonment

Loss can be total or partial. If the loss is total it can be either actual (the thing is
lost in its entirety) or constructive.

Actual total loss (Sec. 132)

1. Total destruction
2. Loss by sinking
3. Damage rendering the thing valueless or
4. Total deprivation of owner of possession of thing insured

Constructive Loss (Sec. 133 in relation to Sec. 141)

Constructive loss takes place when the thing isn't totally lost but, legally speaking,
it is totally lost and there is a proper abandonment.

1. Actual loss of more than ¾ of the value of the object

2. Damage reducing the value by more than ¾ of the value of the vessel and
of cargo
3. Expenses of shipment exceed 4/4 of value of cargo

Remedy In case of constructive total loss

1. insured may abandon the goods or vessel to the insurer and claim for whole
insured value
2. or he may, without abandoning vessel, claim for partial actual loss

Abandonment

Act of the insured by which after a constructive total loss, he declares

relinquishment to the insurer of his interest in the thing insured

Requisites:

1. Actual relinquishment by the insured of his interest in the thing insured

2. Constructive total loss
3. Abandon be neither partial nor conditional
4. Must be made with a reasonable time after receipt of reliable information
of loss
5. Must be factual
 6. Made by giving notice thereof to the insurer (orally or in writing)
7. Notice of abandonment must be explicit and must specify the particular
cause of the abandonment

In abandonment, the insured relinquishes his interest in the thing to the insurer if
the damage/loss exceeds 3/4 of the thing's value. The loss must be more than 3/4
or it will be considered a partial loss and can't be abandoned. If abandonment is
proper, it is an absolute right and acceptance on the insurer's part isn't necessary.

If there is a valid abandonment, the insurer now has an interest over the
abandoned thing and whatever is recovered belongs to him.

What is the Doctrine of Limited Liability?

Also called the “no vessel, no liability doctrine,” it provides that liability of ship
owner is limited to ship owner’s interest over the vessel. Consequently, in case of
loss, the ship owner’s liability is also extinguished. Limited liability likewise extends
to ship’s appurtenances, equipment, freightage, and insurance proceeds. The
ship owner’s or agent’s liability is merely co-extensive with his interest in the
vessel, such that a total loss of the vessel results in the liability’s extinction. The
vessel’s total destruction extinguishes maritime liens because there is no longer
any res to which they can attach. (Monarch Insurance v. CA, G.R. No. 92735,
June 8, 2000)

What are the exceptions to the doctrine of limited liability?

1. Repairs and provisioning of the vessel before the loss of the vessel; (Art. 586)

2. Insurance proceeds. If the vessel is insured, the proceeds will go to the persons
entitled to claim from the shipowner; (Vasquez v. CA, G.R. No. L-42926, Sept. 13,
1985)

3. Workmen’s Compensation cases (now Employees’ Compensation under the

Labor Code); (Oching v. San Diego, G.R. No. 775, Dec. 17, 1946)

4. When the shipowner is guilty of fault or negligence; Note: But if the captain is
the one who is guilty, doctrine may still be invoked, hence, abandonment is still
an option.

5. Private carrier; or

6. Voyage is not maritime in character.

As a general rule, a ship owner's liability is merely co-extensive with his interest in
the vessel, except where actual fault is attributable to the shipowner. Thus, as an
exception to the limited liability doctrine, a shipowner or ship agent may be held
liable for damages when the sinking of the vessel is attributable to the actual
fault or negligence of the shipowner or its failure to ensure the seaworthiness of
the vessel. The instant petitions cannot be spared from the application of the
exception to the doctrine of limited liability in view of the unanimous findings of
the courts below that both Aboitiz and the crew failed to ensure the
seaworthiness of the M/V P. Aboitiz.

ABOITIZ SHIPPING CORPORATION, Petitioners, v. COURT OF APPEALS,