Aboitiz Shipping Corporation v. Philippine American General Insurance Co.
REITERATIONFacts
The Antecedents: Marinduque Mining Industrial Corporation (Marinduque) shipped one skid carton of valve parts from Boston, U.S.A., evidenced by bill of lading No. BOSF-45607. The shipment was ordered from Jamesbury, Singapore PTE, LTD. Upon arrival in Manila, the cargo was received and deposited by Aboitiz Shipping Corporation (Aboitiz) at Pier 4, North Harbor, Manila, for transhipment to Nonoc Island, for which Aboitiz issued bill of lading No. 23. On July 3, 1980, while the cargo was at the Aboitiz terminal during heavy rain, it was reported as pilfered. Of the total value of $42,209.33, only $7,412.00 worth remained. Marinduque filed a claim against Aboitiz for P246,430.80 and a similar claim against Phil-American General Insurance Co., Inc. (Phil-Am) under policy MRN-01754 PAG. Phil-Am paid Marinduque P246,430.80 as insurer. Procedural History: Phil-Am, subrogated to Marinduque's rights, filed a complaint against Aboitiz in the Regional Trial Court (RTC) of Manila. The RTC dismissed the complaint, which was affirmed upon denial of a motion for reconsideration. Phil-Am appealed to the Court of Appeals (CA), which reversed the RTC's decision, ordering Aboitiz to pay Phil-Am P246,430.80 plus P15,000.00 as attorney's fees. A motion for reconsideration was denied. The Petition: Aboitiz filed a petition for review on certiorari with the Supreme Court, assailing the CA's decision and raising five assignments of error, primarily questioning its liability for the pilfered cargo.
Issue(s)
Whether petitioner Aboitiz Shipping Corporation was properly held liable for the pilferage of the cargo. Whether the insurance coverage was effective at the time of the pilferage. Whether petitioner was denied due process.
Ruling
The petition is devoid of merit and is DISMISSED. Aboitiz Shipping Corporation is ordered to pay Philippine American General Insurance Co. the sum of P246,430.80 plus P15,000.00 as attorney's fees.
Ratio Decidendi
On whether petitioner Aboitiz Shipping Corporation was properly held liable for the pilferage of the cargo: The Supreme Court held that Aboitiz's contention that it could not be liable because the cargo was stolen even before it was loaded on its vessel is untenable. The records clearly show that petitioner received the cargo when it arrived in Manila at its offices at Pier 4, North Harbor. It was while the cargo was in Aboitiz's possession and before it was loaded onto its vessel that the pilferage occurred. Therefore, its liability is clear under the law and the contract of carriage. The Court emphasized that the cargo was in the custody of Aboitiz when the loss occurred, establishing a direct link between the petitioner's possession and the pilferage. On whether the insurance coverage was effective at the time of the pilferage: The Court clarified that the trial court erred in relying on Marine Risk Note No. 017545, which was issued after the pilferage. The questioned shipment was covered by a continuing and open insurance coverage, Marine Open Policy No. 100184, executed by Phil-Am in favor of Marinduque, which took effect after September 1, 1975. This coverage extended from the time the cargo was loaded aboard the vessel in Boston until its delivery to Aboitiz's possession in Manila. The Marine Risk Note was merely an acknowledgment or declaration confirming the specific shipment and not the policy itself. Thus, the insurance was effective and covered the loss. On whether petitioner was denied due process: The Supreme Court found no merit in Aboitiz's claim of denial of due process. The records indicated that Aboitiz was declared in default, and consequently, the evidence for Marinduque was received ex-parte in accordance with the rules. The Court stated that Aboitiz had only itself to blame for the proceedings under the circumstances, implying that its failure to appear or participate was the cause of the ex-parte proceedings.
Main Doctrine
A shipping corporation is liable for the pilferage of cargo that occurred while the cargo was in its possession and before it was loaded onto its vessel, even if the pilferage occurred before loading.