Case Digest (G.R. No. 217311)
Facts:
The case involves Aleson Shipping Lines, Inc. (petitioner) and CGU International Insurance PLC and Candano Shipping Lines, Inc. (respondents). The events leading to the case began on July 14, 2002, when Candano Shipping entered into a time charter agreement with Apo Cement Corporation for the transportation of cement from Cebu to Albay using its vessel, M/V Romeo. The vessel was loaded with 31,250 bags of cement, valued at P3,427,500, and was insured by CGU Insurance. At around midnight, while M/V Romeo was exiting the pier in Apo channel, it collided with M/V Aleson Carrier 5 (M/V Aleson), owned by Aleson Shipping. The collision resulted in a significant breach in M/V Romeo's hull, causing it to sink almost immediately. Following the incident, Apo Cement sought compensation from both shipping companies but received no response, prompting them to file an insurance claim with CGU Insurance, which was subsequently approved. CGU Insurance then initiated legal proceedings aga...
Case Digest (G.R. No. 217311)
Facts:
Background and Contractual Agreements
- In 2002, Candano Shipping Lines, Inc. (Candano Shipping) entered into a time charter agreement with Apo Cement Corporation (Apo Cement) for the delivery of cement from Cebu to Albay using Candano Shipping's vessel, M/V Romeo. The cargo consisted of 31,250 bags of cement, equivalent to 1,250 metric tons, and was insured by CGU International Insurance (CGU Insurance).
The Collision Incident
- On July 14, 2002, at around midnight, M/V Romeo was exiting the pier in the Apo channel when it collided with M/V Aleson Carrier 5 (M/V Aleson), owned by Aleson Shipping Lines, Inc. (Aleson Shipping). The front hull of M/V Aleson struck the side of M/V Romeo, creating a gaping hole that caused M/V Romeo to sink almost instantly, resulting in the loss of the cement cargo worth P3,427,500.
Post-Collision Actions
- Apo Cement demanded payment from both Candano Shipping and Aleson Shipping but received no response. Consequently, Apo Cement filed an insurance claim with CGU Insurance, which was granted. CGU Insurance then filed a case against both Candano Shipping and Aleson Shipping for actual damages and attorney’s fees.
Defenses Raised
- Aleson Shipping denied liability, arguing that M/V Romeo was at fault and that its crew had exercised due diligence to avoid the collision. It also claimed that CGU Insurance’s action was improper because it was not a party to the time charter agreement.
- Candano Shipping maintained that M/V Romeo was seaworthy and that it had exercised extraordinary diligence. It blamed Aleson Shipping for the collision, alleging that M/V Aleson was carelessly operated. Candano Shipping also argued that CGU Insurance failed to comply with the arbitration clause in the time charter agreement.
Testimonies and Evidence
- Teodoro R. Lopez, CGU Insurance’s surveyor, testified that M/V Aleson caused the collision by failing to wait for M/V Romeo to clear the pier. He also stated that M/V Aleson ignored warnings to slow down.
- Captain Ramil Fermin Cabeltes of M/V Aleson admitted that he failed to verify whether M/V Romeo had cleared the pier and did not use the vessel’s horn to signal M/V Romeo. He also acknowledged that he could have maneuvered M/V Aleson to avoid the collision but chose not to, fearing the vessel might run aground.
- Maria Tessie Jadulco Flores, Candano Shipping’s operations manager, testified that M/V Aleson was at fault for violating the right-of-way rule in the Apo channel, which required incoming vessels to wait until outgoing vessels had cleared the pier.
Trial Court Decision
- The Regional Trial Court held Aleson Shipping solely liable for the collision, ordering it to pay P3,368,750 in damages plus interest and attorney’s fees. The court dismissed the complaint against Candano Shipping, finding that it had exercised extraordinary diligence as a common carrier.
Appeal to the Court of Appeals
- Aleson Shipping appealed, arguing that the trial court misapplied the law on common carriers and misinterpreted the evidence. The Court of Appeals affirmed the trial court’s decision, finding no reason to depart from its findings.
Issue:
- Whether Aleson Shipping is liable for the damages resulting from the collision.
- Whether the trial court erred in applying the law on common carriers to Aleson Shipping, which had no contractual relationship with Apo Cement or CGU Insurance.
- Whether the testimonies of witnesses, particularly those of Flores and Lopez, were properly admitted as evidence.
- Whether Candano Shipping exercised extraordinary diligence in the care and custody of the cargo.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Conclusion:
- The Supreme Court upheld the liability of Aleson Shipping for the collision, finding that its captain failed to exercise ordinary diligence. The Court affirmed the lower courts’ decisions, including the dismissal of the complaint against Candano Shipping, which had exercised the required diligence as a common carrier.