Title
FGU Insurance Corp. vs. Court of Appeals
Case
G.R. No. 137775
Decision Date
Mar 31, 2005
A common carrier's negligence caused cargo loss during a storm; insurer FGU was exonerated due to the carrier's gross negligence, despite the fortuitous event.

Case Digest (G.R. No. 137775)

Facts:

FGU Insurance Corporation v. The Court of Appeals, San Miguel Corporation, and Estate of Ang Gui, G.R. Nos. 137775 and 140704, March 31, 2005, Supreme Court Second Division, Chico‑Nazario, J., writing for the Court.

Evidence shows that Anco Enterprises Company (ANCO), a partnership between Ang Gui and Co To, owned the tug M/T ANCO and the engine‑less barge D/B Lucio, and operated as common carriers. On 23 September 1979, San Miguel Corporation (SMC) shipped two lots of beer on the D/B Lucio—one consigned to Estancia, Iloilo (Bill of Lading No. 1) and the other to San Jose, Antique (Bill of Lading No. 2). The D/B Lucio had to be towed by M/T ANCO because it lacked its own propulsion.

The vessels arrived at San Jose, Antique, on 30 September 1979 amid worsening weather; other vessels sought shelter but M/T ANCO left the D/B Lucio at the wharf. Arrastre workers and SMC’s district supervisor requested that the barge be moved to a safer place, but ANCO’s representative refused. Only 10,790 cases were discharged; by 1 October 1979 the barge’s mooring rope was severed, the crew abandoned the barge late that night, and the barge was later driven aground and broken, resulting in the loss of 29,210 cases of Pale Pilsen and 550 cases of Cerveza Negra.

SMC sued ANCO for breach of contract of carriage and damages in the Regional Trial Court (Civil Case No. R‑19710), claiming P1,346,197.00. After Ang Gui died and the partnership dissolved, SMC amended the complaint to implead the Estate of Ang Gui (represented by Lucio, Julian and Jaime Ang) and Co To; ANCO (through the substituted defendants) retained the original defenses and counterclaim. ANCO admitted carriage and asserted fortuitous event and an agreement that the cargoes had been insured with FGU Insurance Corporation (FGU) for 20,000 cases under Marine Insurance Policy No. 29591; ANCO therefore filed, with leave of court, a third‑party complaint against FGU seeking reimbursement should ANCO be held liable to SMC.

At trial the RTC (Branch 22, Judge Pampio A. Abarintos) found that although the loss was caused by a typhoon, ANCO’s representatives failed to exercise the extraordinary diligence required of common carriers and were therefore liable to SMC; the RTC apportioned liability and held FGU liable for 53% of the loss under the cargo insurance policy. The Court of Appeals (CA) affirmed the RTC decision in CA‑G.R. CV No. 49624 in toto and denied reconsideration. ANCO relied on a prior suit, Civil Case No. R‑19341 (where ANCO had prevailed against F...(Subscriber-Only)

Issues:

  • Does the doctrine of res judicata bar litigation of the cargo‑loss claims in the present case given the prior judgment in Civil Case No. R‑19341?
  • Was the negligence of ANCO’s crewmembers the proximate cause of the loss of SMC’s cargoes?
  • May FGU be held liable under the cargo insurance policy despite the court’s finding of ANCO’s...(Subscriber-Only)

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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