Title
Asia Lighterage and Shipping Inc. vs. Court of Appeals
Case
G.R. No. 147246
Decision Date
Aug 19, 2003
A common carrier failed to exercise extraordinary diligence, leading to cargo loss during typhoon; insurer's recovery claim upheld due to negligence.
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Case Digest (G.R. No. 147246)

Facts:

  1. Shipment and Insurance:

    • On June 13, 1990, 3,150 metric tons of Better Western White Wheat, valued at US$423,192.35, was shipped by Marubeni American Corporation from Portland, Oregon, to General Milling Corporation in Manila. The shipment was insured by Prudential Guarantee and Assurance, Inc. for P14,621,771.75 under Marine Cargo Risk Note RN 11859/90.
  2. Transfer of Cargo:

    • On July 25, 1990, the cargo arrived in Manila and was transferred to petitioner Asia Lighterage and Shipping, Inc., which was contracted by the consignee to deliver the cargo to its warehouse in Pasig City.
  3. Initial Incident:

    • On August 15, 1990, 900 metric tons of the shipment was loaded onto barge PSTSI III. However, the transport was suspended on August 17, 1990, due to an incoming typhoon. The barge was later tied down to other barges at Engineering Island for shelter.
  4. Damage and Salvage Attempts:

    • On August 22, 1990, the barge developed a hole after hitting an unseen underwater object. The petitioner filed a Marine Protest on August 28, 1990, and hired Gaspar Salvaging Corporation to refloat the barge. The hole was patched with clay and cement.
  5. Second Incident and Total Loss:

    • On September 5, 1990, the barge ran aground again due to strong currents. A portion of the cargo was transferred to other barges. On September 6, 1990, the barge sank completely after its towing bits broke, resulting in the total loss of the remaining cargo. A second Marine Protest was filed on September 7, 1990.
  6. Salvage and Claims:

    • On September 14, 1990, a bidding was conducted to dispose of the damaged wheat, with proceeds amounting to P201,379.75. The consignee filed claims with the petitioner and the insurer. Prudential Guarantee indemnified the consignee for P4,104,654.22 and sought recovery from the petitioner.
  7. Legal Proceedings:

    • Prudential Guarantee filed a complaint against Asia Lighterage on July 3, 1991, for recovery of the indemnity, attorney’s fees, and costs. The Regional Trial Court ruled in favor of Prudential Guarantee, and the Court of Appeals affirmed the decision with modifications.

Issue:

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Ruling:

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Ratio:

  1. Definition of a Common Carrier:

    • Under Article 1732 of the Civil Code, a common carrier is defined as any entity engaged in the business of transporting goods or passengers for compensation, regardless of whether the service is offered on a regular or irregular basis. The petitioner’s principal business of lighterage and drayage qualifies it as a common carrier.
  2. Extraordinary Diligence Required:

    • Common carriers are bound to observe extraordinary diligence in the care and custody of goods transported by them. They are presumed negligent in case of loss, destruction, or deterioration of goods unless they prove that the loss was due to specific exceptions under Article 1734 of the Civil Code, such as natural disasters.
  3. Negligence and Proximate Cause:

    • The petitioner failed to prove that the typhoon was the proximate and only cause of the loss. The barge had already sustained damage before the typhoon, and the petitioner’s decision to proceed with the voyage despite the risks demonstrated a lack of due diligence.
  4. Force Majeure Not Applicable:

    • The typhoon cannot be invoked as force majeure to exempt the petitioner from liability because the loss was partly due to the petitioner’s negligence.


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