Case Digest: Central Shipping v. Insurance Company, 438 SCRA 511, G.R. No. 150751

 

Central Shipping v. Insurance Company, 438 SCRA 511, G.R. No. 150751, September 20, 2004.

Subject: Transportation Law

FACTS

In July 1990 at Puerto Princesa, Palawan, Central Shipping received on board its vessel, the M/V ‘Central Bohol’, 376 pieces [of] Philippine Apitong Round Logs and undertook to transport said shipment to Manila for delivery to Alaska Lumber Co., Inc. Upon completion of loading of the cargo, the vessel left Palawan and commenced the voyage to Manila. However, the vessel sunk while in route to Manila on July 26, 1990 and the cargo was totally lost due to the shifting of logs in hold.

Respondent alleged that the total loss of the shipment was caused by the fault and negligence of the petitioner and its captain and as direct consequence thereof the consignee suffered damage. Alaska Lumber Co. Inc. presented a claim for the value of the shipment to the [petitioner] but the latter failed and refused to settle the claim, hence [respondent], being the insurer, paid said claim and now seeks to be subrogated to all the rights and actions of the consignee as against the [petitioner].

Petitioner raised as its main defense that the proximate and only cause of the sinking of its vessel and the loss of its cargo was a natural disaster, a tropical storm which neither [petitioner] nor the captain of its vessel could have foreseen."

RTC was unconvinced that the sinking of M/V Central Bohol had been caused by the weather or any other caso fortuito. CA affirmed RTC’s decisions and concluded that the doctrine of limited liability was not applicable, in view of petitioner’s negligence—particularly its improper stowage of the logs. Hence, this Petition.

ISSUE

1. Whether the carrier is liable for the loss of the cargo.

2. Whether the doctrine of limited liability is applicable.

RULING

1. Yes, the carrier is liable for the loss of the cargo.

Under the law, common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to: (1) flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers; and, (5) Order or act of competent public authority.

In this case, the weather condition encountered by petitioner’s vessel was not a "storm" or a natural disaster comprehended in the law. Given the known weather condition prevailing during the voyage, the manner of stowage employed by the carrier was insufficient to secure the cargo from the rolling action of the sea. The carrier took a calculated risk in improperly securing the cargo. Having lost that risk, it cannot now disclaim any liability for the loss.

2. No. The doctrine of limited liability under Article 587 of the Code of Commerce is not applicable to the present case. This rule does not apply to situations in which the loss or the injury is due to the concurrent negligence of the shipowner and the captain. It has already been established that the sinking of M/V Central Bohol had been caused by the fault or negligence of the ship captain and the crew, as shown by the improper stowage of the cargo of logs. "Closer supervision on the part of the shipowner could have prevented this fatal miscalculation." As such, the shipowner was equally negligent. It cannot escape liability by virtue of the limited liability rule.