Case Digest (G.R. No. 149038) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Philippine American General Insurance Company vs. PKS Shipping Company (G.R. No. 149038, April 9, 2003), Davao Union Marketing Corporation (DUMC) contracted PKS Shipping Company to transport seventy-five thousand bags of cement valued at ₱3,375,000 from Zamboanga del Sur to Tacloban City. DUMC insured the cargo for its full value with Philippine American General Insurance Company (Philamgen). On the evening of December 22, 1988, while the dumb barge *Limar I* was being towed by the tug *MT Iron Eagle* near Dumagasa Point, the barge suddenly sank, carrying down the entire cement shipment. DUMC filed a formal claim with Philamgen, which paid the full insured amount and then sought reimbursement from PKS Shipping. Upon PKS Shipping’s refusal, Philamgen sued in the Regional Trial Court of Makati, Branch 65, which dismissed the complaint, holding that the loss could have been caused by a fortuitous event or crew negligence and that under Article 587 of the Commercial Code the ship Case Digest (G.R. No. 149038) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Shipment and Insurance
- Davao Union Marketing Corporation (DUMC) contracted PKS Shipping Company to transport 75,000 bags of cement valued at ₱3,375,000 to Tacloban City.
- DUMC insured the entire cargo with Philippine American General Insurance Company (Philamgen) for its full value.
- Sinking of the Barge
- On the evening of 22 December 1988, while the dumb barge Limar I was towed by the tug MT Iron Eagle off Dumagasa Point, Zamboanga del Sur, the barge sank, submerging the entire cargo.
- Crew testimonies and sworn marine protests described waves of 6–8 feet and strong winds causing water ingress through the barge’s hatches. Certificates of Inspection and Coastwise Load Line Certificate attested to Limar I’s seaworthiness.
- Insurance Claim and Trial Court Proceedings
- DUMC filed a formal claim with Philamgen, which paid the full amount and then sought reimbursement from PKS Shipping.
- Philamgen sued PKS Shipping in Makati RTC, which dismissed the complaint, finding that the loss could have been a fortuitous event or due to negligence, and that under Article 587 of the Code of Commerce the ship owner could limit liability by abandoning the vessel.
- Court of Appeals Decision and Petition for Review
- On appeal, the Court of Appeals affirmed: (a) PKS was not a common carrier but a private one engaged in a casual occupation with a limited clientele, and (b) the loss resulted from a fortuitous event, absolving PKS of liability.
- Philamgen filed a petition for review to the Supreme Court, arguing (a) PKS is a common carrier regardless of clientele size, (b) no typhoon entered the Philippine Area of Responsibility, and (c) PKS failed to exercise due diligence. PKS Shipping opposed, asserting the petition impermissibly attacked factual findings.
Issues:
- Is PKS Shipping a common carrier or a private carrier under Philippine law?
- Did PKS Shipping exercise the proper diligence required of it in the carriage of goods?
- Was the loss of the cargo due to a fortuitous event, thereby exempting PKS Shipping from liability?
- Did the Court of Appeals commit reversible error of law in its conclusions based on the established facts?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)