G.R. No. 137775 – FGU INSURANCE CORPORATION, petitioner, vs. THE COURT OF APPEALS, SAN MIGUEL CORPORATION, and ESTATE OF ANG GUI, represented by LUCIO, JULIAN, and JAIME, all surnamed ANG, and CO TO, respondents.
G.R. No. 140704 – ESTATE OF ANG GUI, Represented by LUCIO, JULIAN and JAIME, all surnamed ANG, and CO TO, petitioners, vs. THE HONORABLE COURT OF APPEALS, SAN MIGUEL CORP., and FGU INSURANCE CORP., respondents.
CHICO-NAZARIO, J.
Rule Synopsis
On Obligations and Contracts – where the contributory negligence of the debtor concurred with a fortuitous event, the latter is not exempted from liability.
On Insurance Law – ordinary negligence of the insured does not exonerate the insurer, the same was deemed to have been assumed by the latter. However, gross or reckless negligence of the insured excuses the insurer from its liability.
Facts
Anco Enterprises Company (ANCO) is a partnership between Ang Gui and Co To engaged in the shipping business. It operates the M/T ANCO tugboat and the D/B Lucio barge (has no engine and must be towed by the tugboat) as a common carrier.
San Miguel Corp. (SMC) shipped beverages via D/B Lucio towed by M/T ANCO. When the ships arrived at Antique, M/T ANCO immediately left D/B Lucio despite an impending storm. All the other vessels were transferred to a safer place except D/B Lucio. SMC requested for its transfer but the crewmen of the said vessel did not heed the same as they were confident that the vessel can withstand the storm. However, it did not. The storm destroyed the vessel and led to ANCO’s failure to deliver about P1.35M worth of beverages.
SMC filed complaint for breach of contract of carriage against ANCO. The latter, on the other hand, filed a Third-Party complaint against its insurer under a marine insurance policy (P858k), FGU.
For the defenses, ANCO alleged that the loss was due to a fortuitous event. For FGU, it alleged that the cause of loss was not an insured risk, and that ANCO failed to exercise the requisite diligence in preventing the loss or destruction of the cargoes.
The RTC found ANCO liable to SMC on account of its negligence. Whereas, it ordered FGU to shoulder 53% of the amount of the lost cargoes in accordance with its insurance policy with the former. The SC sustained the award of damages to SMC, but exonerated FGU from liability, i.e. third-party complaint dismissed.
Issues
- Was the negligence of ANCO’s representatives was the proximate cause of the loss?
- Could FGU be held liable under the insurance policy to reimburse ANCO for the loss of the cargoes despite the findings of the CA that such loss was occasioned by the blatant negligence of the latter’s employees?
Ruling and Discussion
Procedural Note: An earlier case was filed by ANCO against FGU for Specific Performance and Damages to recover from the latter on the basis of the Marine Hull Insurance Policy issued by it. In this case, the SC ruled in favor of ANCO. The Court said here that such case is not res judicata to the present case as the parties and subject matter of the two were different.
As to parties, in the earlier case, the same was between ANCO (plaintiff) and FGU (defendant); where as in the present case, the parties were: SMC (plaintiff) and heirs of Ang and Co To (defendants), merely impleading FGU in a third-party complaint.
As to subject matter, the controversy in the first case involved the rights and liabilities of the shipowner vis-à-vis that of the insurer, while the present case involves the rights and liabilities of the shipper vis-à-vis that of the shipowner. The earlier case was an action for Specific Performance and Damages based on FGU’s marine insurance; whereas the present case is an action for Breach of Contract of Carriage and Damages filed by SMC against ANCO based on Bills of Lading. Lastly, the subject matter of the third-party complaint against FGU is different from the earlier case. In the former case, ANCO was suing FGU for the insurance contract over the vessel while in the present case, the third-party complaint arose from the insurance contract covering the cargoes on board the D/B Lucio.
As to issues raised, the earlier case merely resolved: 1) the seaworthiness of D/B Lucio; 2) proper notice of loss made by ANCO within the reglementary period; and 3) that the vessel D/B Lucio was a constructive total loss. This case raises the issue of: 1) liability of ANCO for the loss of the cargoes, and 2) alleged negligence of the crewmembers of the D/B Lucio being the cause of the loss of the cargoes owned by SMC.
- Yes. The negligence of ANCO’s representatives was the proximate cause of the loss.
The Court held that there was no reason for the SC to disturb the factual findings of the lower court that ANCO’s representatives failed to exercise the extraordinary degree of diligence required by the law to exculpate them from liability for the loss of the cargoes.
First, ANCO failed to deliver all of the cargoes to the consignee.
Second, D/B Lucio was immediately left by the tugboat at Antique, despite it not having an engine of its own. It was left to fend for itself despite evidence of the impending storm. In fact, D/B Lucio was the only vessel left wharf where the others have already temporarily moved to a safer port.
As a common carrier, ANCO is required to exercise extraordinary diligence over the goods and for the safety of the passengers transported by them (Art. 1733). While they are exempted from liability arising from the loss, destruction or deterioration of goods entrusted to them in case of flood, storm, earthquake, lightning, or other natural disaster or calamity (Art. 1734), the natural disaster must have been the proximate and only cause of the loss (Art. 1739). Thus, contributory negligence will not exonerate the common carrier from liability.
In this case, the court held that the calamity which caused the loss of the cargoes was not unforeseen nor was it unavoidable. In fact, the other vessels were able to move to a safer port and managed to save themselves from destruction. The Court pointed out that there was blatant negligence on the part of M/T ANCO’s crewmembers, first in leaving the engine-less barge D/B Lucio at the mercy of the storm without the assistance of the tug-boat, and again in failing to heed the request of SMC’s representatives to have the barge transferred to a safer place. - No. FGU could not be held liable.
While, it is a basic rule in insurance that the carelessness and negligence of the insured or his agents constitute no defense on the part of the insurer (as ordinary negligence of the insured and his agents has long been held as a part of the risk which the insurer takes upon himself). This rule presupposes that the loss has occurred due to causes which could not have been prevented by the insured, despite the exercise of due diligence. When evidence show that the insured’s negligence or recklessness is so gross as to be sufficient to constitute a willful act, the insurer must be exonerated.
In this case, the Court agreed with the the findings of the lower courts that under the circumstances, the employees and crewmembers of both the D/B Lucio and the M/T ANCO were blatantly negligent.
Dispositive
Judgment affirmed with modification.