G.R. No. 116940.

June 11, 1997

THE PHILIPPINE AMERICAN GENERAL INSURANCE COMPANY, INC., vs. CA and
FELMAN SHIPPING LINES

Doctrine:

Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by them” In the event of loss of
goods, common carriers are presumed to have acted negligently.

Facts:
The Coca-Cola bottlers company loaded 7,500 cases of soft drinks on MV Asilda
to be transported from Zamboaga to Cebu City. When it was left, the weather was fine.
However, at around 8:45 in the evening the vessel sank in the waters of Zamboanga del
Norte bringing down the entire cargo including the subject 7,500 cases of 1-liter Coca-
Cola soft drink bottles. As a result, Coca-Cola bottlers filed a claimed against FELMAN
shipping lines the owner of the ship for the recovery of the damages it sustained as a
result of their loss. But denied the claim thus prompting them to file an insurance claim
with PHILAMGEN which paid its claim of P755,250.00. Claiming its right of subrogation
PHILAMGEN sought recourse against FELMAN which disclaimed any liability for the
loss.

Issue:
Whether the loss of the cargos was due to fortuitous circumstances?
Ruling:
No. The proximate cause of the sinking of MV Asilda was its being top-heavy. It is
settled that carrying a deck cargo raises the presumption of unseaworthiness unless it
can be shown that the deck cargo will not interfere with the proper management of the
ship. However, it was established that MV Asilda was not designed to carry substantial
amount of cargo on deck. The inordinate loading of cargo deck resulted in the decrease
of the vessels metacentric height thus, making it unstable. The strong winds and waves
encountered by the vessel are but the ordinary vicissitudes of a sea voyage and as
such merely contributed to its already unstable and unseaworthy condition.
It was already established at the outset that the sinking of MV Asilda was due to its
unseaworthiness even at the time of its departure from the port of Zamboanga. It was
top-heavy as an excessive amount of cargo was loaded on deck. Closer supervision on
the part of the ship owner could have prevented this fatal miscalculation. As
such, FELMAN was equally negligent.
 G.R. No. 150751. September 20, 2004
CENTRAL SHIPPING COMPANY, INC., petitioner, vs. INSURANCE COMPANY
OF NORTH AMERICA

Doctrine:
A common carrier is presumed to be at fault or negligent. It shall be liable for the
loss, destruction or deterioration of its cargo, unless it can prove that the sole and
proximate cause of such event is one of the causes enumerated in Article 1734 of the
Civil Code, or that it exercised extraordinary diligence to prevent or minimize the loss.
Facts:
On July 25, 1990 at Puerto Princesa, Palawan, the M/V Central Bohol received on
board its vessel, 376 pieces 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.
At about 0125 hours on July 26, 1990, while in route to Manila, the vessel listed
about 10 degrees starboard side, due to the shifting of logs in the hold and had
increased to 15 degrees, the ship captain ordered his men to abandon ship and of the
same day the vessel completely sank. Due to the sinking of the vessel, the cargo was
totally lost. The Insurance Company alleged that the total loss of the shipment was
caused by the fault and negligence of the shipping company and its captain. Alaska
Lumber Co. Inc., presented a claim for the value of the shipment but the latter failed and
refused to settle the claim, hence, being the insurer, paid said claim and now seeks to
be subrogated to all the rights and actions of the consignee.
The RTC was unconvinced that the sinking of M/V Central Bohol had been caused
by the weather or any other caso fortuito. Applying the rule of presumptive fault or
negligence against the carrier, the trial court held petitioner liable for the loss of the
cargo. Then, CA affirmed of the trial court findings.

Issue:
Whether the carrier is liable for the loss of the cargos
Ruling:
Yes.
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 ship owner could have prevented this fatal
miscalculation. As such, the ship owner was equally negligent. It cannot escape liability
by virtue of the limited liability rule.
Even if the weather encountered by the ship is to be deemed a natural disaster
under Article 1739 of the Civil Code, petitioner failed to show that such natural disaster
or calamity was the proximate and only cause of the loss. Human agency must be
entirely excluded from the cause of injury or loss. In other words, the damaging effects
blamed on the event or phenomenon must not have been caused, contributed to, or
worsened by the presence of human participation. The defense of fortuitous event or
natural disaster cannot be successfully made when the injury could have been avoided
by human precaution.
Hence, if a common carrier fails to exercise due diligence -- or that ordinary care
that the circumstances of the particular case demand -- to prevent or minimize the loss
before, during and after the occurrence of the natural disaster, the carrier shall be
deemed to have been negligent. The loss or injury is not, in a legal sense, due to a
natural disaster under Article 1734(1).
 G.R. No. 143133. June 5, 2002
BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and JARDINE DAVIES TRANSPORT
SERVICES, INC., vs. PHILIPPINE FIRST INSURANCE CO., INC.,

Doctrine:
Proof of the delivery of goods in good order to a common carrier and of their
arrival in bad order at their destination constitutes prima facie fault or negligence on the
part of the carrier. If no adequate explanation is given as to how the loss, the
destruction or the deterioration of the goods happened, the carrier shall be held liable
therefor

Facts:

CMC Trading shipped on board the MN Anangel Sky at Germany 242 coils of
various Prime Cold Rolled Steel sheets for transportation to Manila consigned to the
Philippine Steel Trading Corporation. The MN Anangel Sky arrived at the port of Manila
and, within the subsequent days, discharged the subject cargo. Four (4) coils were
found to be in bad order. Finding the four (4) coils in their damaged state to be unfit for
the intended purpose, the consignee Philippine Steel Trading Corporation declared the
same as total loss.
Despite of a formal demand, they refused to submit to the consignees
claim. Consequently, the insurance paid the damage sustained, and was subrogated to
the latter’s rights and causes of action. Subsequently, they instituted a complaint for
recovery of the amount paid by them, to the consignee as insured. The RTC dismissed
the Complaint because respondent had failed to prove its claims with the quantum of
proof required by law. However, the CA ruled that petitioners were liable for the loss or
the damage of the goods shipped, because they had failed to overcome the
presumption of negligence imposed on common carriers.

Issue:
Whether petitioners have overcome the presumption of negligence of a common
carrier

Ruling:
No.
The common carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary diligence and vigilance with respect to the safety of
the goods and the passengers they transport. Thus, common carriers are required to
render service with the greatest skill and foresight and to use all reasonable means to
ascertain the nature and characteristics of the goods tendered for shipment, and to
exercise due care in the handling and stowage, including such methods as their nature
requires. The extraordinary responsibility lasts from the time the goods
are unconditionally placed in the possession of and received for transportation by the
carrier until they are delivered, actually or constructively, to the consignee or to the
person who has a right to receive them.
Owing to this high degree of diligence required of them, common carriers, as a
general rule, are presumed to have been at fault or negligent if the goods they
transported deteriorated or got lost or destroyed. That is, unless they prove that they
exercised extraordinary diligence in transporting the goods. In order to avoid
responsibility for any loss or damage, therefore, they have the burden of proving that
they observed such diligence. However, the presumption of fault or negligence will not
arise if the loss is due to any of the following causes: (1) flood, storm, earthquake,
lightning, or other natural disaster or calamity; (2) an act of the public enemy in war,
whether international or civil; (3) an act or omission of the shipper or owner of the
goods; (4) the character of the goods or defects in the packing or the container; or (5)
an order or act of competent public authority. This is a closed list. If the cause of
destruction, loss or deterioration is other than the enumerated circumstances, then the
carrier is liable therefor.
Corollary to the foregoing, mere proof of delivery of the goods in good order to a
common carrier and of their arrival in bad order at their destination constitutes a prima
facie case of fault or negligence against the carrier. If no adequate explanation is given
as to how the deterioration, the loss or the destruction of the goods happened, the
transporter shall be held responsible.