Republic of the Philippines

Court of Appeals
Manila

FOURTH DIVISION
MAKATI INSURANCE
CORPORATION,
Plaintiff-Appellant,
- versus SINCERE MARITIME
CORPORATION, CARGILL NORTH
ASIA LTD., and MARITIME PHILS.
PORT SERVICES, INC.,
Defendants-Appellees.
x-------------------------------------------------x
SINCERE MARITIME
CORPORATION, CARGILL NORTH
ASIA LTD., and MARITIME PHILS.
PORT SERVICES, INC.,
Third-Party Plaintiffs-Appellants,

CA-G.R. CV No. 63146

Members:
VIDALLON-MAGTOLIS, D.,Chair
DE LOS SANTOS, E. R., and
BRION, A.D., JJ.

- versus MARIA CRISTINA CHEMICAL

INDUSTRIES, INC.,
Promulgated:
Third-Party Defendant-Appellee.
____________
x-----------------------------------------------------------------------------------------x

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CA-G.R. CV No. 63146

Decision

DECISION
BRION, J.:
Before us are separate appeals that are both grounded on the
damages the vessel MV Sincere No. 5 (vessel) and the private
wharf of the Maria Cristina Chemical Industries Inc. (MCCI)
suffered while the vessel was docked at the MCCI private wharf to
discharge a cargo of salt for the consignee Mabuhay Vinyl
Corporation (Mabuhay).

Makati Insurance Corporation (Makati Insurance) is the

insurer of MCCI who paid for the damages MCCI incurred in the MV
Sincere No. 5 incident. It filed the complaint, Civil Case No. 9364936,1 for a sum of money before the Regional Trial Court (RTC)
of Manila, Branch 40, in the exercise of its right of subrogation under
Article 2207 of the Civil Code.

RTC Judge Felipe G. Pacquing

dismissed the complaint on the ground that the damage to MCCIs

wharf was caused by force majeure.2 MCCI brought this judgment of
dismissal to us on appeal.

1
2

Record, at pp.1-4.
Id., at pp. 365-368.

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CA-G.R. CV No. 63146

Decision

With leave of court, the defendants filed a third-party

complaint3 against MCCI on the ground that the structure and
maintenance of the MCCI wharf contributed to the damage that the
vessel suffered.

The lower court dismissed the complaint in its

orders dated February 10, 1995,4 April 25, 19955 and October 23, 19956
on the ground that the third-party complaint fails to state a cause of
action. The third-party plaintiffs likewise brought the dismissal of
their third-party complaint to us on appeal.

BACKGROUND

Makati Insurances complaint recites that

3. On or about February 26, 1992, the vessel MV Sincere
No. 5 berthed and secured herself at the private wharf of Maria
Cristina Chemical Industries, Inc., at Iligan City to discharge her
cargo of industrial salt in favor of Mabuhal Vinyl Corporation who
leased said wharf from its owner for the purpose of receiving the
said shipment.
4. Discharging of the cargo having been suspended due to
the presence of Northeasterly winds, the master of the MK/V
Sincere No. 5 was requested by the pier owner to pull out the
vessel from the pier to prevent damage to the pier, which request
said master refused to heed;
5. As a result, the vessel continuously bumped the piers
fender clusters, thus, causing extensive damage thereto, as well as
3
4
5
6

Id., at pp. 125-130.

Record, at p. 185
Id., at p. 216.
Id., at p. 224.

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CA-G.R. CV No. 63146

Decision

to the piers deck and the mooring ballard, rendering the wharf
unusable;
6. The aforesaid pier facilities together with other related
machineries and equipment of Maria Cristina Chemicals Industries,
Inc. was insured by the latter with plaintiff under and by virtue of
Policy No. SPF-0858;
7. The aforementioned damages to the pier facilities were
brought about by the fault or negligence of the defendants; sheer
lack of prudence, lack of foresight, and lack of skill of the vessels
master who did not act swiftly to avert the damages as aforesaid or
at least to minimize the same;

The defendants Sincere Maritime Corporation and Maritime

Philippine Ports Services, Inc. admitted in their Answer7 that the
vessel was docked at the MCCI pier but otherwise denied the
negligence imputed against the vessels master, citing as defenses the
fact that there was force majeure and the negligence of the
managers/operators of the pier.
Subsequently, Cargill North Asia Ltd., the charterer of MV
Sincere No. 5, was impleaded as a party defendant through an
amended complaint.8 The defendants, for their part, sought leave
and was allowed by the lower court to file a third-party complaint
against Maria Cristina Chemical Industries, Inc.9
complaint states that:

7
8
9

Record, at pp.19-23.
Id., at pp. 67-71.
Id., at pp. 125-130.

The third-party

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CA-G.R. CV No. 63146

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3. On February 25, 1992, M/V Sincere No. 5, owned by Sincere

Maritime and under charter by CARGILL and represented in the

Philippines by MARITIME PHIL., arrived at the Iligan roadstead,
Philippines, to discharge her cargo of industrial salt of the
consignee, Mabuhay Vinyl Corporation, but which temporarily lied
(sic) idle while awaiting berthing instruction from said consignee of
the shipment;
4. However, on or about the morning of February 26, 1992, the
local harbor pilot boarded M/V SINCERE NO. 5 for docking; and
she was safely secured along side (sic) a private wharf or pier of
MARIA CRISTINA and started discharging her said shipment for
the consignee;
5.
While discharging its said shipment that same day, a
northeasterly wind occurred and prevailed in the sorrounding (sic)
areas, which temporarily stopped the ongoing discharging of
shipment, as M/V SINCERE NO. 5 begun (sic) to have a strong
contact and crushed to the fenders cluster piles of the wharf/pier;
6. With the contacts between M/V SINCERE NO. 5 and the only
four (4) fender-cluster piles, which were inadequate and defective,
the latter easily gave way with one cluster uprooted, causing
damages to M/V SINCERE NO. 5 and the wharf/pier;
7. In fine, the damages incurred by M/V SINCERE NO. 5 and
allegedly by the wharf/pier were caused by a force-majeure, the
northeasterly wind, and the inadequate and defective wharf/pier as
a result of the lack of proper maintenance by and/or malfeasance
and /or negligence of its owner/operator, MARIA CRISTINA,
considering the undeniable fact that the same wharf/pier used to be
constantly hit by other ships/vessels before M/V SINCE NO. 5
came to dock thereat;
xxx
9. Third-party Defendant, MARIA CRISTINA, is liable alone to
compensate and/or pay for whatever loss and/or claim of Plaintiff
under the insurance Policy No. SPF-0858, since the damages on the
wharf/pier in question were caused by the inadequate and defective
wharf/pier itself, more specifically its delapidated/defective (sic)

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CA-G.R. CV No. 63146

Decision

fender-cluster piles, due to lack of proper maintainance (sic) by

and/or malfeasance and/or negligence of MARIA CRISTINA, as
stated in paragraphs 5,6 and 7 hereof:

It was this third-party complaint that the lower court dismissed for
lack of cause of action.
At the trial, the plaintiff-appellant presented two witnesses.
Efren C. Cabungan10 testified that MCCI is insured by their company
and identified the MCCIs insurance policy.11

Upon receipt of

MMCIs claim, they immediately assigned the claim to one of their

adjusters, the Toplis and Harding company, who was tasked to
proceed to the cite (sic), inspect the damage sustained by the vessel and to
submit a formal report. . .12 Toplis submitted a preliminary report
identified and marked as Exhibit B13 and a subsequent evaluation
report14 marked as Exhibit C.

The witness confirmed that the

plaintiff paid MCCIs insurance claim and identified the subrogation

receipt (Exh. D)15 and Exhibit E, a Sworn Statement on Proof of
Loss. On the whole, his testimony went towards proving the right of
the plaintiff to be subrogated to the right of MMCI to claim damages
against the defendants.

TSN, January 8, 1998.

Exhibit A - Property Floater Policy dated August 26, 1993; A-1 Premium Inventory No.
A-16238; Record, at p. 323.
12
TSN, January 8, 1998, at p. 6.
13
Id., at p. 9; Exh. B, Record at pp. 324-326.
14
Id., at pp. 9-10; Exh. C, Record at pp. 327-331.
15
Id., at p. 15; Exh. D, Record, at p. 332.
10
11

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CA-G.R. CV No. 63146

Decision

Valentino Aboy, the second witness for the plaintiff, is a civil

engineer and adjuster. He was presented to testify on the adjustment
and investigation made in this pier incident. . . to explain to the court how
the amount or the value of the losses has been arrived at. . . identify some
documents in support to (sic) his recommendation made as to how much
was the actual losses suffered by the pier facilities.16 Mr. Aboy
confirmed that he is an adjuster and the Vice President of his
company. His company was instructed or commissioned by the MCCI
to adjust the claims filed by the insured, the Maria Cristina Chemical
Industries for the damages sustained by their pier facilities as a result of the
incident.17 He narrated that his people went to the loss site to gather
information surrounding the circumstances of the incident as well as
to inspect the damages that resulted from the incident.18 He himself
did not go to the

MCCI pier.19

The data and documents were

analyzed by his staff and submitted to him. He identified the same

Exhibits B and C that the previous witness identified.
The defendants uniformly objected to the admission of these
exhibits for lack of proper identification. They likewise presented
two witnesses in their defense. Their first witness was Alfredo Saso,
General Manager of Survey Specialist, who acted as surveyor and

16
17
18
19

TSN, Feb. 27, 1998, at p. 4.

TSN, Feb. 27, 1998, at pp. 5-6.
Id., at p. 22.
Id., at. pp. 22-23.

CA-G.R. CV No. 63146

Decision

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8

who testified20 on the inspection made on the site and on his survey
reports (Exhibits 1 and 2 with sub-markings)21. In the course of
his testimony, he identified the following:
a. Exhibit 322 Marine Note of Protest by Capt. Lui Jen-Yu
dated Feb. 26, 1992, subsequently offered to prove that the master of
the vessel made a protest;
b. Exhibit 423 Letter dated Feb. 25, 1992, addressed by
Mabuhay Vinyl Corporation to Capt. Lui Jen-Yu;
c. Exhibit 524 Letter of Mabuhay to Capt. Lui Jen-Yu dated
Feb. 27, 1992, advising the Captain to undock the vessel so that
unloading can be undertaken at the Iligan pier;
d. Exhibit 5-A25 Masters remarks on the Mabuhay letter;
and
e. Exhibits 6 and 7 with submarkings26 refer to the layout
of the MCCI pier and the photographs of the damaged pier and
vessel.
The second defense witness was Diomedes Rabadam, a claims
processor, who testified27 on the Vessels Damage Report, marked
TSN, Oct. 20, 1998
Plaintiffs Evidence Folder: Exh. 1, pp.1-2; Exh. 2, pp. 3-9.
22
Id., at p. 10
23
Id., at p. 11
24
Plaintiffs Evidence Folder, at p. 12
25
Ibid.
26
Id., at pp. 13-14
27
TSN, Nov. 17, 1998
20
21

CA-G.R. CV No. 63146

Decision

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and offered as Exhibit 9. 28 He likewise identified as part of Exhibit

9 the Statement of the Master of the Vessel consisting of his
insights and comments on the February 26, 1992 incident. The cited
Statement was separately marked as Exhibit 8.29

The plaintiff objected to all the defendants exhibits but

particularly to the survey reports for violation of the opinion rule
and to the Marine Protest by the Master of the vessel (Exh. 3), the
Masters remarks on the Mabuhay letter (Exhibit 5-A), and the
Statement of the Master of the Vessel (Exhibit 8) for being hearsay.

In its decision, the lower court identified the outstanding

issues (as identified by the parties in their pre-trial briefs) as follows:
1. Was there damage in the pier facilities?
2. Was there proper subrogation?
3. Are defendants liable for damages?
4. Will the counterclaim be granted?

After summarily disposing of the two initial issues, the lower

court, proceeded to rule on the third issue as follows:
Are the defendants liable? While there was proper
subrogation, the defendants claim that the damage of the insured
property was caused by force-majeur is valid.
28
29

Plaintiffs Evidence Folder, at. p. 60

Id., at pp. 43-59

CA-G.R. CV No. 63146

Decision

The last paragraph of exhibit B-1 reads as follows:

However, at about 1:30 p.m., discharging operations
was stopped due to the presence of strong
northeasterly winds which also enduced (sic) long
swells to occur. This condition prevailed until 6:45
p.m. and caused the vessel to continuously bumped
(sic) the piers fender clusters. (Emphasis provided)
Exhibit 2, under the heading VESSEL POUNDING ON
MCCI PIER gave the following account:
Accordingly, at 1330 hours of the above date,
discharging of cargo from the aforementioned vessel
was temporarily stopped due to alleged strong
Northeasterly wind (25-30 knots) and long swell that
prevailed in the area. As a consequence, the vessels
starboard section made of (sic) contact and crushed to
(sic) the fender cluster piles, as well as to (sic) the
MCCI pier. Due to the incessant contact between the
vessel and the four (4) fender cluster piles at that time,
the latter, which were installed in line with the main
pier and (two clusters for each side), gave way with
one cluster uprooted, causing the vessels starboard
section, which was in line of the overhand section of
the concrete pier in way of Hold No. 3, to crush
against it. As a result, the vessels starboard section
and the MCCIs concrete pier sustained damage.
(Emphasis supplied)
From the above exhibits, it is clear that the proximate cause
of the damage of the insured property of MCCI is due to the strong
northeasterly winds of about 25 to 30 knots which enduced (sic)
long swells and caused SINCERE No. 5 to bump and damage the
pier of MCCI. This is considered force-majeur to which the
defendants should not be held liable for the damage done.

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CA-G.R. CV No. 63146

Decision

Apparently for the same reason, the lower court dismissed the
counterclaim as well.

I. APPEAL FROM THE DECISION DATED JANUARY 4, 1999:

ASSIGNMENT OF ERRORS

In its appeal, Makati Insurance assigns the following errors:

1. THE HONORABLE LOWER COURT ERRED IN

RULING THAT THE PROXIMATE CAUSE OF THE

DAMAGE OF THE INSURED PROPERTY WAS
FORCE MAJEURE;

2. THE HONORABLE LOWER COURT ERRED IN

RULING THAT THE DEFENDANTS SHOULD NOT
BE HELD LIABLE FOR THE DAMAGE DONE;
3. THE HONORABLE COURT ERRED IN DISMISSING
THE COMPLAINT.

THE COURTS RULING

We see no merit in the appeal.

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CA-G.R. CV No. 63146

Decision

We went out of our way to extensively quote portions of the

complaint in order to clarify at the outset what the case is all about
and what requires to be proven to support or defeat the complaint.
The complaint is for damages based on Article 2176 of the Civil Code
and is anchored on the existence of damages and negligence. Thus,
the complaint alleges that The abovementioned damages to the pier
facilities were brought about by the fault or negligence of the defendants,
sheer lack of prudence, lack of foresight, and lack of skill of the vessels
master who did not act swiftly to avert the damages as aforesaid or at least,
to minimize the same.30
In a civil litigation (as in the present case), it is the plaintiff who
has the burden of proving the cause of action embodied in the
complaint. It is basic law that a plaintiff must prove the existence of
its legal right, the correlative legal duty on the part of the defendant
to respect the plaintiffs legal right, and an act or omission of the
defendant in violation of plaintiffs right.31

Under Article 2176

involved in the present case, the cause of action centers on the act or
omission on the part of the vessel, attended by fault or negligence,
causing damage to the MCCI wharf.

30
31

Complaint, Record, p. 3
Mathay v. Consolidated Bank, 58 SCRA 559; Dulay v. Court of Appeals, 243 SCRA 221.

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CA-G.R. CV No. 63146

Decision

We extensively reviewed the evidence adduced by the plaintiffappellant to prove the elements that would entitle it to recover from
the defendants.

Thus, for purposes of this Decision, we even

outlined the evidence, both testimonial and documentary, that the

plaintiff-appellants witnesses presented.

Unlike the lower court

who dismissed the complaint in recognition of the defense of force

majeure, we conclude after our evaluation that the plaintiff-appellant
miserably failed to prove the allegations of its complaint.
Incidentally, we are keenly aware that the plaintiff-appellants failure
to prove the allegations of the complaint is not an error specifically
assigned in the present appeal. A review or assessment of this aspect
of the case is necessary, however, even before the defense of force
majeure the focal point of the present appeal can be considered.
Thus, it is an issue which we can legitimately tackle and rule upon in
this appeal because it is an issue upon which the determination of the
assigned error depends.32

The plaintiff-appellant presented only two witnesses, one of

whom, Efren Cabungan, testified solely on MCCIs insurance claim
and the documentary support to entitle the plaintiff to exercise the
right of subrogation. Thus, he said nothing that would support the
Article 2176 aspect of the complaint.

32

Law Firm of Abrenica, et. al. vs. CA, et. al., G.R. No. 143706, April 5, 2002.

CA-G.R. CV No. 63146

Decision

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The second witness was Valentino Aboy, an adjuster, who

frankly admitted the role of his company and his own role in the
whole affair. They were there to adjust the claim. In one case,33 the
Honorable Supreme Court had occasion to define the role of an
adjuster and the High Court put it in these words:
An insurance adjuster is ordinarily a special agent for the person
or company for whom he acts, and his authority is prima facie
coextensive with the business entrusted to him. . .
An adjuster does not discharge functions of a quasi-judicial
nature, but represents his employer, to whom he owes faithful
service, and for his acts, in the employer's interest, the employer is
responsible so long as the acts are done while the agent is acting
within the scope of his employment. (45 C.J.S., 1338-1340.)

This was Valentino Aboys role and as confirmed by the first witness,
Mr. Cabugan, Aboys company was there to survey the damage
caused to MCCI and to submit a report for insurance payment
purposes. Valentino Aboy was frank enough to admit this role, the
fact that the reports he identified were prepared by his own people,
and that he did not go to the site of the damage himself. Thus,
Valentino Aboy had nothing to testify on with respect to the
causation of the damage to the pier and to the vessel, much less on
the question of whether there was fault, negligence or force majeure.
Under this evidentiary situation, the plaintiff-appellant may
have established the fact of damage that MCCI suffered and its
33

Smith, Bell & Co. Inc. vs. Court of Appeals, et al., G.R. No. 110668. February 6, 1997.

CA-G.R. CV No. 63146

Decision

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extent, but has done nothing more beyond this. To be sure, this type
of evidence may have been sufficient in a case by an insured against
his insurance company where the issue is the fact of damage and the
extent of the amount that the insured should recover. This type of
evidence, however, is fatally deficient in a quasi-delict case where the
plaintiff has to establish the element of causation and the existence of
fault or negligence through competent and admissible evidence. In
the context of the present case, the plaintiff has to show that the
resulting damage to MCCIs pier was caused by MV Sincere No. 5
and that there was attendant fault or negligence in causing the
damage. In the absence of competent proof establishing all these
elements, we see no need to discuss the issue of force majeure, a
defense that comes into play to show that the damage, even if caused
by the defendant, is excused by a cause (force majeure) recognized by
law. Thus, the dismissal of plaintiff-appellants appeal and of the
complaint are legally in order.

II. APPEAL FROM THE ORDERS DATED FEBRUARY 10, 1995,

APRIL 25, 1995 AND OCTOBER 23, 1995

The appealed Order dated February 10, 199534 states: For

resolution is a motion to dismiss third party complaint filed by third party
defendants and the opposition thereat of the third party plaintiff, and after a
34

Record, p. 185

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CA-G.R. CV No. 63146

Decision

careful evaluation of their pleadings, the Court resolves to dismiss the third
party complaint for lack of cause of action against the third party
defendants. This dismissal was confirmed in the subsequent orders of
the lower court dated April 25, 1995 and October 23, 1995.

The third-party plaintiffs appeal from these orders under the

following ASSIGNMENT OF ERRORS
1. THE HONORABLE LOWER COURT ERRED IN
HOLDING THAT THE THIRD-PARTY COMPLAINT
DID NOT CLEARLY STATE THE ULTIMATE FACTS
REQUIRED BY LAW FOR A COMPLAINT TO BE
VALID.
2. THE HONORABLE LOWER COURT ERRED IN NOT
HOLDING THAT IT CAN RENDER A VALID
JUDGMENT IN THE INSTANT THIRD-PARTY
COMPLAINT, IF THE ALLEGATIONS OF FACTS
THEREIN ARE HYPOTHETICALLY ADMITTED:
HENCE, THE SAME STATES CAUSE(S) OF ACTION,
AGAINST THIRD-PARTY DEFENDANT.
3.

THE HONORABLE COURT ERRED IN NOT

HOLDING THAT THE ORDER OF DISMISSAL IS
DEFECTIVE IN FORM AND SUBSTANCE.
THE COURTS RULING

CA-G.R. CV No. 63146

Decision

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We resolve to dismiss the appeal for lack of jurisdiction.

A third-party complaint is a claim that a defending party may,
with leave of court, file against a person not a party to the action,
called the third-party defendant, for contribution, indemnity,
subrogation or any other relief, in respect of his opponents claim.35
A third-party complaint is actually independent of and separate and
distinct from the plaintiffs complaint. Were it not for the Rules of
Court, it would have to be filed independently and separately from
the original complaint by the defendant against the third-party.36
Based on this relationship, there are really two cases for which
separate judgments may be rendered in the action. Separate appeals
may be made which remedies may be separately treated by this
Court37 as we are doing in the present case.
A dismissal based on lack of cause of action brought through a
motion to dismiss before the lower court looks solely at the
allegations of the complaint and hypothetically admits all these
allegations to test whether a cause of action is alleged. Necessarily,
the consideration made by the court is purely legal since no
questions of facts are required to be passed upon. As held by our
Supreme Court, "a question of law exists when the doubt or controversy
Section 11, Rule 6, Rules of Court.
Remedial Law, Herrera, Vol I, 2000 Ed., at p. 486.
37
See: Benaza v. Bonilla, 1 SCRA 1154; Singapore Airlines, Ltd. v. Court of Appeals, et al., G.R.
No. 107356. March 31, 1995
35
36

CA-G.R. CV No. 63146

Decision

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concerns the correct application of law or jurisprudence to a certain set of

facts; or when the issue does not call for an examination of the probative
value of the evidence presented, the truth or falsehood of facts being
admitted.38

There is purely legal consideration as well in the issue of

whether a set of allegations are allegations of ultimate facts and in
the issue of whether a resolution of dismissal is defective in form and
substance. In the first case, the question is whether the allegations
existing in the complaint are ultimate facts in legal contemplation;
in the second, the question is whether the given form and the
substance of the lower courts order satisfy legal standards. Thus in
both, no examination of evidence is required, only a consideration in light of existing law and jurisprudence - of the disputed complaint
or order that is before the court.

Under these legal situations, we have no option but to dismiss

the third-party plaintiffs appeal pursuant to Section 2, Rule 50 of the
Rules of Court since appeals of purely legal questions must be
brought, not to us, but to the Honorable Supreme Court.

38

Posadas-Moya & Associates Construction Co. Inc., vs. Greenfield Development Corporation, et
al., G.R. No. 141115. June 10, 2003, citing Republic v. Sandiganbayan, GR No. 102508, January 30,
2002.

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CA-G.R. CV No. 63146

Decision

WHEREFORE, based on the above premises, we hereby

DISMISS the appeal and AFFIRM the dismissal of the complaint in
Civil Case No. 93-64936. We likewise hereby DISMISS the thirdparty plaintiffs appeal from the Orders dated February 10, 1995,
April 25, 1995 and October 23, 1995 for lack of jurisdiction. No
pronouncement as to costs.
SO ORDERED.

WE CONCUR:

ARTURO D. BRION
Associate Justice

DELILAH VIDALLON-MAGTOLIS ELIEZER R. DE LOS SANTOS

Associate Justice
Associate Justice

CERTIFICATION
Pursuant to Article VIII, Section 13 of the Constitution, it is
hereby certified that the conclusions in the above decision were
reached in consultation before the case was assigned to the writer of
the opinion of the Court.

DELILAH VIDALLON-MAGTOLIS
Associate Justice

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CA-G.R. CV No. 63146

Decision

Chair, Fourth Division