FGU Insurance vs CA

Republic of the Philippines
SUPREME COURT
SECOND DIVISION
G.R. No. 137775. March 31, 2005
FGU INSURANCE CORPORATION, Petitioners,
vs.
THE COURT OF APPEALS, SAN MIGUEL CORPORATION, an ESTATE OF ANG
GUI, r!"r!#!n$! %& LUCIO, 'ULIAN, an 'AIME, a(( #)rna*! ANG, an CO
TO, Respondents.
G.R. No. 1+070+. March 31, 2005
ESTATE OF ANG GUI, R!"r!#!n$! %& LUCIO, 'ULIAN an 'AIME, a((
#)rna*! ANG, an CO TO,Petitioners,
vs.
THE HONORA,LE COURT OF APPEALS, SAN MIGUEL CORP., an FGU
INSURANCE CORP., Respondents.
D E C I S I O N
CHICO-NA.ARIO, J.:
Before s !re t"o sep!r!te Petitions for revie" !ss!ilin# the Decision
$
of the Court of
%ppe!ls in C%&'.R. CV No. ()*+( entitled, ,S!n -i#uel Corpor!tion, Pl!inti.&%ppellee
versus Est!te of %n# 'ui, represented b/ 0ucio, 1uli!n !nd 1!i2e, !ll surn!2ed %n#,
!nd Co 3o, Defend!nts&%ppell!nts, 3hird4P!rt/ Pl!inti.s versus 5' Insur!nce
Corpor!tion, 3hird&P!rt/ Defend!nt&%ppell!nt,, "hich !6r2ed in toto the
decision
+
of the Re#ion!l 3ri!l Court of Cebu Cit/, Br!nch ++. 3he dispositive portion
of the Court of %ppe!ls decision re!ds:
78ERE5ORE, for !ll the fore#oin#, 9ud#2ent is hereb/ rendered !s follo"s:
$: Orderin# defend!nts to p!/ pl!inti. the su2 of P$,;(*,$)<.== !nd !n interest of
*> per !nnu2 to be rec?oned fro2 the @lin# of this c!se on October +, $))=A
+: Orderin# defend!nts to p!/ pl!inti. the su2 of P+B,===.== for !ttorne/Cs fees !nd
!n !ddition!l su2 of P$=,===.== !s liti#!tion eDpensesA
;: 7ith cost !#!inst defend!nts.
5or the 3hird&P!rt/ Co2pl!int:
$: Orderin# third&p!rt/ defend!nt 5' Insur!nce Co2p!n/ to p!/ !nd rei2burse
defend!nts the !2ount of P*;+,<==.==.
;
3he 5!cts
Evidence sho"s th!t %nco Enterprises Co2p!n/ E%NCO:, ! p!rtnership bet"een %n#
'ui !nd Co 3o, "!s en#!#ed in the shippin# business. It o"ned the -F3 %NCO
tu#bo!t !nd the DFB 0ucio b!r#e "hich "ere oper!ted !s co22on c!rriers. Since the
DFB 0ucio h!d no en#ine of its o"n, it could not 2!neuver b/ itself !nd h!d to be
to"ed b/ ! tu#bo!t for it to 2ove fro2 one pl!ce to !nother.
On +; Septe2ber $)<), S!n -i#uel Corpor!tion ES-C: shipped fro2 -!nd!ue Cit/,
Cebu, on bo!rd the DFB 0ucio, for to"!#e b/ -F3 %NCO, the follo"in# c!r#oes:
Bill of 0!din# No. Ship2ent Destin!tion
$ +B,=== c!ses P!le Pilsen Est!nci!, Iloilo
;B= c!ses CerveG! Ne#r! Est!nci!, Iloilo
+ $B,=== c!ses P!le Pilsen S!n 1ose, %ntiHue
+== c!ses CerveG! Ne#r! S!n 1ose, %ntiHue
3he consi#nee for the c!r#oes covered b/ Bill of 0!din# No. $ "!s S-CCs Beer
-!r?etin# Division EB-D:&Est!nci! Beer S!les O6ce, Est!nci!, Iloilo, "hile the
consi#nee for the c!r#oes covered b/ Bill of 0!din# No. + "!s S-CCs B-D&S!n 1ose
Beer S!les O6ce, S!n 1ose, %ntiHue.
3he DFB 0ucio "!s to"ed b/ the -F3 %NCO !ll the "!/ fro2 -!nd!ue Cit/ to S!n
1ose, %ntiHue. 3he vessels !rrived !t S!n 1ose, %ntiHue, !t !bout one oCcloc? in the
!fternoon of ;= Septe2ber $)<). 3he tu#bo!t -F3 %NCO left the b!r#e i22edi!tel/
!fter re!chin# S!n 1ose, %ntiHue.
7hen the b!r#e !nd tu#bo!t !rrived !t S!n 1ose, %ntiHue, in the !fternoon of ;=
Septe2ber $)<), the clouds over the !re! "ere d!r? !nd the "!ves "ere !lre!d/
bi#. 3he !rr!stre "or?ers unlo!din# the c!r#oes of S-C on bo!rd the DFB 0ucio
be#!n to co2pl!in !bout their di6cult/ in unlo!din# the c!r#oes. S-CCs District
S!les Supervisor, 5ern!ndo -!c!bu!#, reHuested %NCOCs represent!tive to tr!nsfer
the b!r#e to ! s!fer pl!ce bec!use the vessel 2i#ht not be !ble to "ithst!nd the bi#
"!ves.
%NCOCs represent!tive did not heed the reHuest bec!use he "!s con@dent th!t the
b!r#e could "ithst!nd the "!ves. 3his, not"ithst!ndin# the f!ct th!t !t th!t ti2e,
onl/ the -F3 %NCO "!s left !t the "h!rf of S!n 1ose, %ntiHue, !s !ll other vessels
!lre!d/ left the "h!rf to see? shelter. 7ith the "!ves #ro"in# bi##er !nd bi##er,
onl/ 3en 3hous!nd Seven 8undred Ninet/ E$=,<)=: c!ses of beer "ere disch!r#ed
into the custod/ of the !rr!stre oper!tor.
%t !bout ten to eleven oCcloc? in the evenin# of =$ October $)<), the cre" of DFB
0ucio !b!ndoned the vessel bec!use the b!r#eCs rope !tt!ched to the "h!rf "!s cut
o. b/ the bi# "!ves. %t !round 2idni#ht, the b!r#e run !#round !nd "!s bro?en
!nd the c!r#oes of beer in the b!r#e "ere s"ept !"!/.
%s ! result, %NCO f!iled to deliver to S-CCs consi#nee 3"ent/&Nine 3hous!nd 3"o
8undred 3en E+),+$=: c!ses of P!le Pilsen !nd 5ive 8undred 5ift/ EBB=: c!ses of
CerveG! Ne#r!. 3he v!lue per c!se of P!le Pilsen "!s 5ort/&5ive Pesos !nd 3"ent/
Cent!vos EP(B.+=:. 3he v!lue of ! c!se of CerveG! Ne#r! "!s 5ort/&Seven Pesos !nd
3en Cent!vos EP(<.$=:, hence, S-CCs cl!i2 !#!inst %NCO !2ounted to One -illion
3hree 8undred 5ort/&SiD 3hous!nd One 8undred Ninet/&Seven Pesos
EP$,;(*,$)<.==:.
%s ! conseHuence of the incident, S-C @led ! co2pl!int for Bre!ch of Contr!ct of
C!rri!#e !nd D!2!#es !#!inst %NCO for the !2ount of One -illion 3hree 8undred
5ort/&SiD 3hous!nd One 8undred Ninet/&Seven Pesos EP$,;(*,$)<.==: plus interest,
liti#!tion eDpenses !nd 3"ent/&5ive Percent E+B>: of the tot!l cl!i2 !s !ttorne/Cs
fees.
pon %n# 'uiCs de!th, %NCO, !s ! p!rtnership, "!s dissolved hence, on +* 1!nu!r/
$));, S-C @led ! second !2ended co2pl!int "hich "!s !d2itted b/ the Court
i2ple!din# the survivin# p!rtner, Co 3o !nd the Est!te of %n# 'ui represented b/
0ucio, 1uli!n !nd 1!i2e, !ll surn!2ed %n#. 3he substituted defend!nts !dopted the
ori#in!l !ns"er "ith countercl!i2 of %NCO ,since the subst!nti!l !lle#!tions of the
ori#in!l co2pl!int !nd the !2ended co2pl!int !re pr!ctic!ll/ the s!2e.,
%NCO !d2itted th!t the c!ses of beer P!le Pilsen !nd CerveG! Ne#r! 2entioned in
the co2pl!int "ere indeed lo!ded on the vessel belon#in# to %NCO. It cl!i2ed
ho"ever th!t it h!d !n !#ree2ent "ith S-C th!t %NCO "ould not be li!ble for !n/
losses or d!2!#es resultin# to the c!r#oes b/ re!son of fortuitous event. Since the
c!ses of beer P!le Pilsen !nd CerveG! Ne#r! "ere lost b/ re!son of ! stor2, !
fortuitous event "hich b!ttered !nd sun? the vessel in "hich the/ "ere lo!ded, the/
should not be held li!ble. %NCO further !sserted th!t there "!s !n !#ree2ent
bet"een the2 !nd S-C to insure the c!r#oes in order to recover inde2nit/ in c!se
of loss. Pursu!nt to th!t !#ree2ent, the c!r#oes to the eDtent of 3"ent/ 3hous!nd
E+=,===: c!ses "!s insured "ith 5' Insur!nce Corpor!tion E5': for the tot!l
!2ount of Ei#ht 8undred 5ift/&Ei#ht 3hous!nd 5ive 8undred Pesos EPIBI,B==.==: per
-!rine Insur!nce Polic/ No. +)B)$.
SubseHuentl/, %NCO, "ith le!ve of court, @led ! 3hird&P!rt/ Co2pl!int !#!inst 5',
!lle#in# th!t before the vessel of %NCO left for S!n 1ose, %ntiHue "ith the c!r#oes
o"ned b/ S-C, the c!r#oes, to the eDtent of 3"ent/ 3hous!nd E+=,===: c!ses, "ere
insured "ith 5' for ! tot!l !2ount of Ei#ht 8undred 5ift/&Ei#ht 3hous!nd 5ive
8undred Pesos EPIBI,B==.==: under -!rine Insur!nce Polic/ No. +)B)$. %NCO
further !lle#ed th!t on or !bout =+ October $)<), b/ re!son of ver/ stron# "inds
!nd he!v/ "!ves brou#ht !bout b/ ! p!ssin# t/phoon, the vessel run !#round ne!r
the vicinit/ of S!n 1ose, %ntiHue, !s ! result of "hich, the vessel "!s tot!ll/ "rec?ed
!nd its c!r#oes o"ned b/ S-C "ere lost !ndFor destro/ed. %ccordin# to %NCO, the
loss of s!id c!r#oes occurred !s ! result of ris?s insured !#!inst in the insur!nce
polic/ !nd durin# the eDistence !nd lifeti2e of s!id insur!nce polic/. %NCO "ent on
to !ssert th!t in the re2ote possibilit/ th!t the court "ill order %NCO to p!/ S-CCs
cl!i2, the third&p!rt/ defend!nt corpor!tion should be held li!ble to inde2nif/ or
rei2burse %NCO "h!tever !2ounts, or d!2!#es, it 2!/ be reHuired to p!/ to S-C.
In its !ns"er to the 3hird&P!rt/ co2pl!int, third&p!rt/ defend!nt 5' !d2itted the
eDistence of the Insur!nce Polic/ under -!rine Cover Note No. +)B)$ but
2!int!ined th!t the !lle#ed loss of the c!r#oes covered b/ the s!id insur!nce polic/
c!nnot be !ttributed directl/ or indirectl/ to !n/ of the ris?s insured !#!inst in the
s!id insur!nce polic/. %ccordin# to 5', it is onl/ li!ble under the polic/ to 3hird&
p!rt/ Pl!inti. %NCO !ndFor Pl!inti. S-C in c!se of !n/ of the follo"in#:
!: tot!l loss of the entire ship2entA
b: loss of !n/ c!se !s ! result of the sin?in# of the vesselA or
c: loss !s ! result of the vessel bein# on @re.
5urther2ore, 5' !lle#ed th!t the 3hird&P!rt/ Pl!inti. %NCO !nd Pl!inti. S-C f!iled
to eDercise ordin!r/ dili#ence or the dili#ence of ! #ood f!ther of the f!2il/ in the
c!re !nd supervision of the c!r#oes insured to prevent its loss !ndFor destruction.
3hird&P!rt/ defend!nt 5' pr!/ed for the dis2iss!l of the 3hird&P!rt/ Co2pl!int !nd
!s?ed for !ctu!l, 2or!l, !nd eDe2pl!r/ d!2!#es !nd !ttorne/Cs fees.
3he tri!l court found th!t "hile the c!r#oes "ere indeed lost due to fortuitous event,
there "!s f!ilure on %NCOCs p!rt, throu#h their represent!tives, to observe the
de#ree of dili#ence reHuired th!t "ould eDoner!te the2 fro2 li!bilit/. 3he tri!l court
thus held the Est!te of %n# 'ui !nd Co 3o li!ble to S-C for the !2ount of the lost
ship2ent. 7ith respect to the 3hird&P!rt/ co2pl!int, the court ! Huo found 5'
li!ble to be!r 5ift/&3hree Percent EB;>: of the !2ount of the lost c!r#oes. %ccordin#
to the tri!l court:
. . . Evidence is to the e.ect th!t the DFB 0ucio, on "hich the c!r#o insured, run&
!#round !nd "!s bro?en !nd the beer c!r#oes on the s!id b!r#e "ere s"ept !"!/. It
is the sense of this Court that the risk insured against was the cause of the loss.
. . .
Since the tot!l c!r#o "!s (=,BB= c!ses "hich h!d ! tot!l !2ount of P$,I;;,)=B.==
!nd the !2ount of the polic/ "!s onl/ for PIBI,B==.==, defendants as assured,
therefore, were considered co-insurers of third-party defendant FGU Insurance
Corporation to the extent of 97,!"#"" $alue of the cargo# ConseHuentl/, in!s2uch
!s there "!s p!rti!l loss of onl/ P$,;(*,$)<.==, the !ssured sh!ll be!r B;> of the
lossJ
(
KE2ph!sis oursL
3he !ppell!te court !6r2ed in toto the decision of the lo"er court !nd denied the
2otion for reconsider!tion !nd the supple2ent!l 2otion for reconsider!tion.
8ence, the petitions.
3he Issues
In '.R. No. $;<<<B, the #rounds for revie" r!ised b/ petitioner 5' c!n be
su22!riGed into t"o: $: 7hether or not respondent Court of %ppe!ls co22itted
#r!ve !buse of discretion in holdin# 5' li!ble under the insur!nce contr!ct
considerin# the circu2st!nces surroundin# the loss of the c!r#oesA !nd +: 7hether
or not the Court of %ppe!ls co22itted !n error of l!" in holdin# th!t the doctrine
of res %udicata !pplies in the inst!nt c!se.
In '.R. No. $(=<=(, petitioner Est!te of %n# 'ui !nd Co 3o !ss!il the decision of the
!ppell!te court b!sed on the follo"in# !ssi#n2ents of error: $: 3he Court of %ppe!ls
co22itted #r!ve !buse of discretion in !6r2in# the @ndin#s of the lo"er court th!t
the ne#li#ence of the cre"2e2bers of the DFB 0ucio "!s the proDi2!te c!use of the
loss of the c!r#oesA !nd +: 3he respondent court !cted "ith #r!ve !buse of
discretion "hen it ruled th!t the !ppe!l "!s "ithout 2erit despite the f!ct th!t s!id
court h!d !ccepted the decision in Civil C!se No. R&$);($, !s !6r2ed b/ the Court
of %ppe!ls !nd the Supre2e Court, !s res %udicata.
Rulin# of the Court
5irst, "e sh!ll ende!vor to dispose of the co22on issue r!ised b/ both petitioners in
their respective petitions for revie", th!t is, "hether or not the doctrine of res
%udicata !pplies in the inst!nt c!se.
It is %NCOCs contention th!t the decision in Civil C!se No. R&$);($,
B
"hich "!s
decided in its f!vor, constitutes res %udicata "ith respect to the issues r!ised in the
c!se !t b!r.
3he contention is "ithout 2erit. 3here c!n be no res %udicata !s bet"een Civil C!se
No. R&$);($ !nd the c!se !t b!r. In order for res %udicata to be 2!de !pplic!ble in !
c!se, the follo"in# essenti!l reHuisites 2ust be present: $: the for2er 9ud#2ent
2ust be @n!lA +: the for2er 9ud#2ent 2ust h!ve been rendered b/ ! court h!vin#
9urisdiction over the sub9ect 2!tter !nd the p!rtiesA ;: the for2er 9ud#2ent 2ust be
! 9ud#2ent or order on the 2eritsA !nd (:there &ust 'e 'etween the (rst and
second action identity of parties, identity of su'%ect &atter, and identity of causes of
action#
*
3here is no Huestion th!t the @rst three ele2ents of res 9udic!t! !s enu2er!ted
!bove !re indeed s!tis@ed b/ the decision in Civil C!se No. R&$);($. 8o"ever, the
doctrine is still in!pplic!ble due to the !bsence of the l!st essenti!l reHuisite of
identit/ of p!rties, sub9ect 2!tter !nd c!uses of !ction.
3he p!rties in Civil C!se No. R&$);($ "ere %NCO !s pl!inti. !nd 5' !s defend!nt
"hile in the inst!nt c!se, S-C is the pl!inti. !nd the Est!te of %n# 'ui represented
b/ 0ucio, 1uli!n !nd 1!i2e, !ll surn!2ed %n# !nd Co 3o !s defend!nts, "ith the l!tter
2erel/ i2ple!din# 5' !s third&p!rt/ defend!nt.
3he sub9ect 2!tter of Civil C!se No. R&$);($ "!s the insur!nce contr!ct entered
into b/ %NCO, the o"ner of the vessel, "ith 5' coverin# the vessel DFB 0ucio, "hile
in the inst!nt c!se, the sub9ect 2!tter of liti#!tion is the loss of the c!r#oes of S-C,
!s shipper, lo!ded in the DFB 0ucio !nd the resultin# f!ilure of %NCO to deliver to
S-CCs consi#nees the lost c!r#o. Other"ise st!ted, the controvers/ in the @rst c!se
involved the ri#hts !nd li!bilities of the shipo"ner $is-)-$is th!t of the insurer, "hile
the present c!se involves the ri#hts !nd li!bilities of the shipper$is-)-$is th!t of the
shipo"ner. Speci@c!ll/, Civil C!se No. R&$);($ "!s !n !ction for Speci@c
Perfor2!nce !nd D!2!#es b!sed on 5' -!rine 8ull Insur!nce Polic/ No. V-5&-8&
$;B$) coverin# the vessel DFB 0ucio, "hile the inst!nt c!se is !n !ction for Bre!ch
of Contr!ct of C!rri!#e !nd D!2!#es @led b/ S-C !#!inst %NCO b!sed on Bill of
0!din# No. $ !nd No. +, "ith defend!nt %NCO see?in# rei2burse2ent fro2 5'
under Insur!nce Polic/ No. -%&BI(I*, should the for2er be held li!ble to p!/ S-C.
-oreover, the sub9ect 2!tter of the third&p!rt/ co2pl!int !#!inst 5' in this c!se is
di.erent fro2 th!t in Civil C!se No. R&$);($. In the l!tter, %NCO "!s suin# 5' for
the insur!nce contr!ct over the vessel "hile in the for2er, the third&p!rt/ co2pl!int
!rose fro2 the insur!nce contr!ct coverin# the c!r#oes on bo!rd the DFB 0ucio.
3he doctrine of res %udicata precludes the re&liti#!tion of ! p!rticul!r f!ct or issue
!lre!d/ p!ssed upon b/ ! court of co2petent 9urisdiction in ! for2er 9ud#2ent, in
!nother !ction bet"een the s!2e p!rties b!sed on ! di.erent cl!i2 or c!use of
!ction. 3he 9ud#2ent in the prior !ction oper!tes !s estoppel onl/ !s to those
2!tters in issue or points controverted, upon the deter2in!tion of "hich the @ndin#
or 9ud#2ent "!s rendered.
<
If ! p!rticul!r point or Huestion is in issue in the second
!ction, !nd the 9ud#2ent "ill depend on the deter2in!tion of th!t p!rticul!r point or
Huestion, ! for2er 9ud#2ent bet"een the s!2e p!rties or their privies "ill be @n!l
!nd conclusive in the second if th!t s!2e point or Huestion "!s in issue !nd
!d9udic!ted in the @rst suit.
I
Since the c!se !t b!r !rose fro2 the s!2e incident !s th!t involved in Civil C!se No.
R&$);($, onl/ @ndin#s "ith respect to 2!tters p!ssed upon b/ the court in the
for2er 9ud#2ent !re conclusive in the disposition of the inst!nt c!se. % c!reful
perus!l of the decision in Civil C!se No. R&$);($ "ill reve!l th!t the pivot!l issues
resolved b/ the lo"er court, !s !6r2ed b/ both the Court of %ppe!ls !nd the
Supre2e Court, c!n be su22!riGed into three le#!l conclusions: $: th!t the DFB
0ucio before !nd durin# the vo/!#e "!s se!"orth/A +: th!t there "!s proper notice
of loss 2!de b/ %NCO "ithin the re#le2ent!r/ periodA !nd ;: th!t the vessel DFB
0ucio "!s ! constructive tot!l loss.
S!id decision, ho"ever, did not p!ss upon the issues r!ised in the inst!nt c!se.
%bsent therein "!s !n/ discussion re#!rdin# the li!bilit/ of %NCO for the loss of the
c!r#oes. Neither did the lo"er court p!ss upon the issue of the !lle#ed ne#li#ence of
the cre"2e2bers of the DFB 0ucio bein# the c!use of the loss of the c!r#oes o"ned
b/ S-C.
3herefore, b!sed on the fore#oin# discussion, "e !re reversin# the @ndin#s of the
Court of %ppe!ls th!t there isres %udicata.
%nent %NCOCs @rst !ssi#n2ent of error, i#e., the !ppell!te court co22itted error in
concludin# th!t the ne#li#ence of %NCOCs represent!tives "!s the proDi2!te c!use
of the loss, s!id issue is ! Huestion of f!ct !ss!ilin# the lo"er courtCs !ppreci!tion of
evidence on the ne#li#ence or l!c? thereof of the cre"2e2bers of the DFB 0ucio. %s
! rule, @ndin#s of f!ct of lo"er courts, p!rticul!rl/ "hen !6r2ed b/ the !ppell!te
court, !re dee2ed @n!l !nd conclusive. 3he Supre2e Court c!nnot revie" such
@ndin#s on !ppe!l, especi!ll/ "hen the/ !re borne out b/ the records or !re b!sed
on subst!nti!l evidence.
)
%s held in the c!se of *onato $# Court of +ppeals,
$=
in this
9urisdiction, it is ! fund!2ent!l !nd settled rule th!t @ndin#s of f!ct b/ the tri!l court
!re entitled to #re!t "ei#ht on !ppe!l !nd should not be disturbed unless for stron#
!nd co#ent re!sons bec!use the tri!l court is in ! better position to eD!2ine re!l
evidence, !s "ell !s to observe the de2e!nor of the "itnesses "hile testif/in# in the
c!se.
$$
It is not the function of this Court to !n!l/Ge or "ei#h evidence !ll over !#!in, unless
there is ! sho"in# th!t the @ndin#s of the lo"er court !re tot!ll/ devoid of support
or !re #l!rin#l/ erroneous !s to constitute p!lp!ble error or #r!ve !buse of
discretion.
$+
% c!reful stud/ of the records sho"s no co#ent re!son to f!ult the @ndin#s of the
lo"er court, !s sust!ined b/ the !ppell!te court, th!t %NCOCs represent!tives f!iled
to eDercise the eDtr!ordin!r/ de#ree of dili#ence reHuired b/ the l!" to eDculp!te
the2 fro2 li!bilit/ for the loss of the c!r#oes.
First, %NCO !d2itted th!t the/ f!iled to deliver to the desi#n!ted consi#nee the
3"ent/ Nine 3hous!nd 3"o 8undred 3en E+),+$=: c!ses of P!le Pilsen !nd 5ive
8undred 5ift/ EBB=: c!ses of CerveG! Ne#r!.
,econd, it is borne out in the testi2on/ of the "itnesses on record th!t the b!r#e
DFB 0ucio h!d no en#ine of its o"n !nd could not 2!neuver b/ itself. Met, the p!tron
of %NCOCs tu#bo!t -F3 %NCO left it to fend for itself not"ithst!ndin# the f!ct th!t !s
the t"o vessels !rrived !t the port of S!n 1ose, %ntiHue, si#ns of the i2pendin#
stor2 "ere !lre!d/ 2!nifest. %s st!ted b/ the lo"er court, "itness -r. %n!st!cio
-!nil!# testi@ed th!t the c!pt!in or p!tron of the tu#bo!t -F3 %NCO left the b!r#e
DFB 0ucio i22edi!tel/ !fter it re!ched S!n 1ose, %ntiHue, despite the f!ct th!t there
"ere !lre!d/ bi# "!ves !nd the !re! "!s !lre!d/ d!r?. 3his is corrobor!ted b/
defend!ntsC o"n "itness, -r. 5ern!ndo -!c!bue#.
$;
3he tri!l court continued:
%t th!t precise 2o2ent, since it is the dut/ of the defend!nt to eDercise !nd observe
eDtr!ordin!r/ dili#ence in the vi#il!nce over the c!r#o of the pl!inti., the p!tron or
c!pt!in of -F3 %NCO, representin# the defend!nt could h!ve pl!ced DFB 0ucio in !
ver/ s!fe loc!tion before the/ left ?no"in# or sensin# !t th!t ti2e the co2in# of !
t/phoon. 3he presence of bi# "!ves !nd d!r? clouds could h!ve "!rned the p!tron
or c!pt!in of -F3 %NCO to insure the s!fet/ of DFB 0ucio includin# its c!r#o. DFB
0ucio bein# ! b!r#e, "ithout its en#ine, !s the p!tron or c!pt!in of -F3 %NCO ?ne",
could not possibl/ 2!neuver b/ itself. 8!d the p!tron or c!pt!in of -F3 %NCO, the
represent!tive of the defend!nts observed eDtr!ordin!r/ dili#ence in pl!cin# the DFB
0ucio in ! s!fe pl!ce, the loss to the c!r#o of the pl!inti. could not h!ve occurred. In
short, therefore, defend!nts throu#h their represent!tives, f!iled to observe the
de#ree of dili#ence reHuired of the2 under the provision of %rt. $<;; of the Civil
Code of the Philippines.
$(
Petitioners Est!te of %n# 'ui !nd Co 3o, in their -e&orandu&, !sserted th!t the
contention of respondents S-C !nd 5' th!t ,the cre"2e2bers of DFB 0ucio should
h!ve left port !t the onset of the t/phoon is li?e !dvisin# the @sh to 9u2p fro2 the
fr/in# p!n into the @re !nd !n !dvice th!t borders on 2!dness.,
$B
3he !r#u2ent does not persu!de. 3he records sho" th!t the DFB 0ucio "!s the onl/
vessel left !t S!n 1ose, %ntiHue, durin# the ti2e in Huestion. 3he other vessels "ere
tr!nsferred !nd te2por!ril/ 2oved to -!l!ndon#, B ?ilo2eters fro2 "h!rf "here
the b!r#e re2!ined.
$*
Cle!rl/, the tr!nsferred vessels "ere de@nitel/ s!fer in
-!l!ndon# th!n !t the port of S!n 1ose, %ntiHue, !t th!t p!rticul!r ti2e, ! f!ct "hich
petitioners f!iled to dispute
%NCOCs !r#u2ents boil do"n to the cl!i2 th!t the loss of the c!r#oes "!s c!used b/
the t/phoon ,isang, ! fortuitous event Ecaso fortuito:, !nd there "!s no f!ult or
ne#li#ence on their p!rt. In f!ct, %NCO cl!i2s th!t their cre"2e2bers eDercised due
dili#ence to prevent or 2ini2iGe the loss of the c!r#oes but their e.orts proved no
2!tch to the forces unle!shed b/ the t/phoon "hich, in petitionersC o"n "ords "!s,
b/ !n/ /!rdstic?, ! n!tur!l c!l!2it/, ! fortuitous event, !n !ct of 'od, the
conseHuences of "hich petitioners could not be held li!ble for.
$<
3he Civil Code provides:
Ar$. 1733. Co22on c!rriers, fro2 the n!ture of their business !nd for re!sons of
public polic/ !re bound to observe eDtr!ordin!r/ dili#ence in the vi#il!nce over the
#oods !nd for the s!fet/ of the p!ssen#ers tr!nsported b/ the2, !ccordin# to !ll the
circu2st!nces of e!ch c!se.
Such eDtr!ordin!r/ dili#ence in vi#il!nce over the #oods is further eDpressed in
%rticles $<;(, $<;B, !nd $<(B Nos. B, *, !nd < . . .
Ar$. 173+. Co22on c!rriers !re responsible for the loss, destruction, or
deterior!tion of the #oods, unless the s!2e is due to !n/ of the follo"in# c!uses
onl/:
E$: 5lood, stor2, e!rthHu!?e, li#htnin#, or other n!tur!l dis!ster or c!l!2it/A
. . .
Ar$. 173/. In order that the common carrier may be exempted from
responsibility, the natural disaster must have been the proximate and only
cause of the loss. 8o"ever, the co22on c!rrier 2ust eDercise due dili#ence to
prevent or 2ini2iGe loss before, durin# !nd !fter the occurrence of Nood, stor2, or
other n!tur!l dis!ster in order th!t the co22on c!rrier 2!/ be eDe2pted fro2
li!bilit/ for the loss, destruction, or deterior!tion of the #oods . . . EE2ph!sis
supplied:
Caso fortuito or force &a%eure E"hich in l!" !re identic!l insof!r !s the/ eDe2pt !n
obli#or fro2 li!bilit/:
$I
b/ de@nition, !re eDtr!ordin!r/ events not foresee!ble or
!void!ble, events th!t could not be foreseen, or "hich thou#h foreseen, "ere
inevit!ble. It is therefore not enou#h th!t the event should not h!ve been foreseen
or !nticip!ted, !s is co22onl/ believed but it 2ust be one i2possible to foresee or
to !void.
$)
In this c!se, the c!l!2it/ "hich c!used the loss of the c!r#oes "!s not unforeseen
nor "!s it un!void!ble. In f!ct, the other vessels in the port of S!n 1ose, %ntiHue,
2!n!#ed to tr!nsfer to !nother pl!ce, ! circu2st!nce "hich pro2pted S-CCs
District S!les Supervisor to reHuest th!t the DFB 0ucio be li?e"ise tr!nsferred, but to
no !v!il. 3he DFB 0ucio h!d no en#ine !nd could not 2!neuver b/ itself. Even if
%NCOCs represent!tives "!nted to tr!nsfer it, the/ no lon#er h!d !n/ 2e!ns to do
so !s the tu#bo!t -F3 %NCO h!d !lre!d/ dep!rted, le!vin# the b!r#e to its o"n
devices. 3he c!pt!in of the tu#bo!t should h!ve h!d the foresi#ht not to le!ve the
b!r#e !lone considerin# the pendin# stor2.
7hile the loss of the c!r#oes "!s !d2ittedl/ c!used b/ the t/phoon ,isang, !
n!tur!l dis!ster, %NCO could not esc!pe li!bilit/ to respondent S-C. 3he records
cle!rl/ sho" the f!ilure of petitionersC represent!tives to eDercise the eDtr!ordin!r/
de#ree of dili#ence 2!nd!ted b/ l!". 3o be eDe2pted fro2 responsibilit/, the
n!tur!l dis!ster should h!ve been the proDi2!te !nd onl/ c!use of the loss.
+=
3here
2ust h!ve been no contributor/ ne#li#ence on the p!rt of the co22on c!rrier. %s
held in the c!se of .i&pangco ,ons $# /angco ,tea&ship Co.:
+$
. . . 3o be eDe2pt fro2 li!bilit/ bec!use of !n !ct of 'od, the tu# 2ust be free fro2
!n/ previous ne#li#ence or 2isconduct b/ "hich th!t loss or d!2!#e 2!/ h!ve
been occ!sioned. 5or, !lthou#h the i22edi!te or proDi2!te c!use of the loss in !n/
#iven inst!nce 2!/ h!ve been "h!t is ter2ed !n !ct of 'od, /et, if the tu#
unnecess!ril/ eDposed the t"o to such !ccident b/ !n/ culp!ble !ct or o2ission of
its o"n, it is not eDcused.
++
3herefore, !s correctl/ pointed out b/ the !ppell!te court, there "!s bl!t!nt
ne#li#ence on the p!rt of -F3 %NCOCs cre"2e2bers, @rst in le!vin# the en#ine&less
b!r#e DFB 0ucio !t the 2erc/ of the stor2 "ithout the !ssist!nce of the tu#bo!t, !nd
!#!in in f!ilin# to heed the reHuest of S-CCs represent!tives to h!ve the b!r#e
tr!nsferred to ! s!fer pl!ce, !s "!s done b/ the other vessels in the portA thus,
2!?in# s!id bl!t!nt ne#li#ence the proDi2!te c!use of the loss of the c!r#oes.
7e no" co2e to the issue of "hether or not 5' c!n be held li!ble under the
insur!nce polic/ to rei2burse %NCO for the loss of the c!r#oes despite the @ndin#s
of the respondent court th!t such loss "!s occ!sioned b/ the bl!t!nt ne#li#ence of
the l!tterCs e2plo/ees.
One of the purposes for t!?in# out insur!nce is to protect the insured !#!inst the
conseHuences of his o"n ne#li#ence !nd th!t of his !#ents. 3hus, it is ! b!sic rule in
insur!nce th!t the c!relessness !nd ne#li#ence of the insured or his !#ents
constitute no defense on the p!rt of the insurer.
+;
3his rule ho"ever presupposes
th!t the loss h!s occurred due to c!uses "hich could not h!ve been prevented b/
the insured, despite the eDercise of due dili#ence.
3he Huestion no" is "hether there is ! cert!in de#ree of ne#li#ence on the p!rt of
the insured or his !#ents th!t "ill deprive hi2 the ri#ht to recover under the
insur!nce contr!ct. 7e s!/ there is. 8o"ever, to "h!t eDtent such ne#li#ence 2ust
#o in order to eDoner!te the insurer fro2 li!bilit/ 2ust be ev!lu!ted in li#ht of the
circu2st!nces surroundin# e!ch c!se. 7hen evidence sho" th!t the insuredCs
ne#li#ence or rec?lessness is so #ross !s to be su6cient to constitute ! "illful !ct,
the insurer 2ust be eDoner!ted.
In the c!se of ,tandard -arine Ins# Co# $# 0o&e 1each .# 2 3# Co.,
+(
the nited St!tes
Supre2e Court held th!t:
3he ordin!r/ ne#li#ence of the insured !nd his !#ents h!s lon# been held !s ! p!rt
of the ris? "hich the insurer t!?es upon hi2self, !nd the eDistence of "hich, "here it
is the proDi2!te c!use of the loss, does not !bsolve the insurer fro2 li!bilit/. 1ut
willful exposure, gross negligence, negligence a&ounting to &isconduct, etc#, ha$e
often 'een held to release the insurer fro& such lia'ility.
+B
KE2ph!sis oursL
. . .
In the c!se of 7illi!2s v. Ne" En#l!nd Insur!nce Co., ; Cli.. +((, 5ed. C!s. No.
$<,<;$, the o"ners of !n insured vessel !tte2pted to put her !cross the b!r !t
8!tter!s Inlet. She struc? on the b!r !nd "!s "rec?ed. 3he 2!ster ?ne" th!t the
depth of "!ter on the b!r "!s such !s to 2!?e the !tte2pted p!ss!#e d!n#erous.
1ud#e Cli.ord held th!t, under the circu2st!nces, the loss "!s not "ithin the
protection of the polic/, s!/in#:
%uthorities to prove th!t persons insured c!nnot recover for ! loss occ!sioned b/
their o"n "ron#ful !cts !re h!rdl/ necess!r/, !s the proposition involves !n
ele2ent!r/ principle of univers!l !pplic!tion. 0osses 2!/ be recovered b/ the
insured, thou#h re2otel/ occ!sioned b/ the ne#li#ence or 2isconduct of the 2!ster
or cre", if proDi2!tel/ c!used b/ the perils insured !#!inst, bec!use such 2ist!?es
!nd ne#li#ence !re incident to n!vi#!tion !nd constitute ! p!rt of the perils "hich
those "ho en#!#e in such !dventures !re obli#ed to incurA 'ut it was ne$er
supposed that the insured could reco$er inde&nity for a loss occasioned 'y his own
wrongful act or 'y that of any agent for whose conduct he was
responsi'le.
+*
KE2ph!sis oursL
5ro2 the !bove&2entioned decision, the nited St!tes Supre2e Court h!s 2!de !
distinction bet"een ordin!r/ ne#li#ence !nd #ross ne#li#ence or ne#li#ence
!2ountin# to 2isconduct !nd its e.ect on the insuredCs ri#ht to recover under the
insur!nce contr!ct. %ccordin# to the Court, "hile 2ist!?e !nd ne#li#ence of the
2!ster or cre" !re incident to n!vi#!tion !nd constitute ! p!rt of the perils th!t the
insurer is obli#ed to incur, such ne#li#ence or rec?lessness 2ust not be of such
#ross ch!r!cter !s to !2ount to 2isconduct or "ron#ful !ctsA other"ise, such
ne#li#ence sh!ll rele!se the insurer fro2 li!bilit/ under the insur!nce contr!ct.
In the c!se !t b!r, both the tri!l court !nd the !ppell!te court h!d concluded fro2
the evidence th!t the cre"2e2bers of both the DFB 0ucio !nd the -F3 %NCO "ere
bl!t!ntl/ ne#li#ent. 3o "it:
3here "!s 'latant negligence on the p!rt of the e2plo/ees of defend!nts&!ppell!nts
"hen the p!tron Eoper!tor: of the tu# bo!t i22edi!tel/ left the b!r#e !t the S!n
1ose, %ntiHue "h!rf despite the loo2in# b!d "e!ther. Ne#li#ence "!s li?e"ise
eDhibited b/ the defend!nts&!ppell!ntsC represent!tive "ho did not heed
-!c!bu!#Cs reHuest th!t the b!r#e be 2oved to ! 2ore secure pl!ce. 3he prudent
thin# to do, !s "!s done b/ the other se! vessels !t S!n 1ose, %ntiHue durin# the
ti2e in Huestion, "!s to tr!nsfer the vessel to ! s!fer "h!rf. 3he negligence of the
defendants-appellants is pro$ed 'y the fact that on "4 5cto'er 4979, the only
si&ple $essel left at the wharf in ,an Jose was the *61 .ucio.
+<
KE2ph!sis oursL
%s st!ted e!rlier, this Court does not @nd !n/ re!son to devi!te fro2 the conclusion
dr!"n b/ the lo"er court, !s sust!ined b/ the Court of %ppe!ls, th!t %NCOCs
represent!tives h!d f!iled to eDercise eDtr!ordin!r/ dili#ence reHuired of co22on
c!rriers in the ship2ent of S-CCs c!r#oes. Such bl!t!nt ne#li#ence bein# the
proDi2!te c!use of the loss of the c!r#oes !2ountin# to One -illion 3hree 8undred
5ort/&SiD 3hous!nd One 8undred Ninet/&Seven Pesos EP$,;(*,$)<.==:
3his Court, t!?in# into !ccount the circu2st!nces present in the inst!nt c!se,
concludes th!t the bl!t!nt ne#li#ence of %NCOCs e2plo/ees is of such #ross
ch!r!cter th!t it !2ounts to ! "ron#ful !ct "hich 2ust eDoner!te 5' fro2 li!bilit/
under the insur!nce contr!ct.
0HEREFORE, pre2ises considered, the Decision of the Court of %ppe!ls d!ted +(
5ebru!r/ $))) is hereb/ %55IR-ED "ith -ODI5IC%3ION dis2issin# the third&p!rt/
co2pl!int.
SO ORDERED.
FGU In#)ranc! Cor" 1# CA 2Ca#! ,r3!45
0essons %pplic!ble: 0oss c!used b/ ne#li#ence of the insured EInsur!nce:
FACTS6
• %nco Enterprises Co2p!n/ E%NCO:, ! p!rtnership bet"een %n# 'ui
!nd Co 3o, "!s en#!#ed in the shippin# business oper!tin# t"o
co22on c!rriers
• -F3 %NCO tu#bo!t
• DFB 0ucio b!r#e & no en#ine of its o"n, it could not 2!neuver b/
itself !nd h!d to be to"ed b/ ! tu#bo!t for it to 2ove fro2 one
pl!ce to !nother.
• Septe2ber +; $)<): S!n -i#uel Corpor!tion ES-C: shipped fro2
-!nd!ue Cit/, Cebu, on bo!rd the DFB 0ucio, for to"!#e b/ -F3
%NCO:
• +B,=== c!ses P!le Pilsen !nd ;B= c!ses CerveG! Ne#r! &
consi#nee S-CCs Beer -!r?etin# Division EB-D:&Est!nci! Beer
S!les O6ce, Est!nci!, Iloilo
• $B,=== c!ses P!le Pilsen !nd +== c!ses CerveG! Ne#r! &
consi#nee S-CCs B-D&S!n 1ose Beer S!les O6ce, S!n 1ose, %ntiHue
• Septe2ber ;=, $)<): DFB 0ucio "!s to"ed b/ the -F3 %NCO
!rrived !nd -F3 %NCO left the b!r#e i22edi!tel/
• 3he clouds "ere d!r? !nd the "!ves "ere bi# so S-CCs District
S!les Supervisor, 5ern!ndo -!c!bu!#, reHuested %NCOCs
represent!tive to tr!nsferthe b!r#e to ! s!fer pl!ce but it refused
so !round the 2idni#ht, the b!r#e sun? !lon# "ith +),+$= c!ses
of P!le Pilsen !nd B== c!ses of CerveG! Ne#r! tot!llin#
to P$,;(*,$)<
• 7hen S-C cl!i2ed !#!inst %NCO it st!ted th!t the/ !#reed th!t
it "ould not be li!ble for !n/ losses or d!2!#es resultin# to the
c!r#oes b/ re!son of fortuitous event !nd it "!s !#reed to be
insured "ith 5' for +=,=== c!ses or PIBI,B==
• %NCO @led !#!inst 5'
• 5' !lle#ed th!t %NCO !nd S-C f!iled to eDercise ordin!r/
dili#ence or the dili#ence of ! #ood f!ther of the f!2il/ in the c!re
!nd supervision of the c!r#oes
• R3C: %NCO li!ble to S-C !nd 5' li!ble for B;> of the lost c!r#oes
• C% !6r2ed
ISSUE6 7FN 5' should be eDe2pted fro2 li!bilit/ to %NCO for the lost
c!r#oes bec!use of ! fortuitous event !nd ne#li#ence of %NCO
HEL76 8ES. %6r2ed "ith 2odi@c!tion. 3hird&p!rt/ co2pl!in!nt is
dis2issed.
• %rt. $<;;. Co22on c!rriers, fro2 the n!ture of their business !nd
for re!sons of public polic/ !re bound to observe eDtr!ordin!r/
dili#ence in the vi#il!nce over the #oods !nd for the s!fet/ of the
p!ssen#ers tr!nsported b/ the2, !ccordin# to !ll the
circu2st!nces of e!ch c!se.
• Such eDtr!ordin!r/ dili#ence in vi#il!nce over the #oods is further
eDpressed in %rticles $<;(, $<;B, !nd $<(B Nos. B, *, !nd < . . .
%rt. $<;(. Co22on c!rriers !re responsible for the loss, destruction, or
deterior!tion of the #oods, unless the s!2e is due to !n/ of the follo"in#
c!uses onl/:
E$: 5lood, stor2, e!rthHu!?e, li#htnin#, or other n!tur!l dis!ster or
c!l!2it/A
. . .
• %rt. $<;). In order th!t the co22on c!rrier 2!/ be eDe2pted fro2
responsibilit/, the n!tur!l dis!ster 2ust h!ve been the proDi2!te
!nd onl/ c!use of the loss. 8o"ever, the co22on c!rrier 2ust
eDercise due dili#ence to prevent or 2ini2iGe loss before, durin#
!nd !fter the occurrence of Nood, stor2, or other n!tur!l
dis!ster in order th!t the co22on c!rrier 2!/ be eDe2pted fro2
li!bilit/ for the loss, destruction, or deterior!tion of the #oods . . .
• C!so fortuito or force 2!9eure
• eDtr!ordin!r/ events not foresee!ble or !void!ble, events th!t
could not be foreseen, or "hich thou#h foreseen, "ere inevit!ble
• not enou#h th!t the event should not h!ve been foreseen or
!nticip!ted, !s is co22onl/ believed but it 2ust be one i2possible
to foresee or to !void & not in this c!se
• other vessels in the port of S!n 1ose, %ntiHue, 2!n!#ed
to tr!nsfer to !nother pl!ce
• 3o be eDe2pted fro2 responsibilit/, the n!tur!l dis!ster should
h!ve been the proDi2!te !nd onl/ c!use of the loss. 3here 2ust
h!ve been no contributor/ne#li#ence on the p!rt of the co22on
c!rrier.
• there "!s bl!t!nt ne#li#ence on the p!rt of -F3 %NCOCs
cre"2e2bers, @rst in le!vin# the en#ine&less b!r#e DFB 0ucio !t
the 2erc/ of the stor2 "ithout the !ssist!nce of the tu#bo!t, !nd
!#!in in f!ilin# to heed the reHuest of S-CCs represent!tives to
h!ve the b!r#e tr!nsferred to ! s!fer pl!ce
• 7hen evidence sho" th!t the insuredCs ne#li#ence or rec?lessness
is so #ross !s to be su6cient to constitute ! "illful !ct, the insurer
2ust be eDoner!ted.
• %NCOCs e2plo/ees is of such #ross ch!r!cter th!t it !2ounts to !
"ron#ful !ct "hich 2ust eDoner!te 5' fro2 li!bilit/ under the
insur!nce contr!ct
• both the DFB 0ucio !nd the -F3 %NCO "ere bl!t!ntl/ ne#li#ent