Delsan Transport Lines, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Caltex Philippines entered into a contract of affreightment with Delsan Transport Lines, Inc. (petitioner) for the transport of industrial fuel oil. Delsan's vessel, MT Maysun, loaded 2,277.314 kiloliters of fuel oil for delivery to Zamboanga City. The shipment was insured with American Home Assurance Corporation (private respondent). On August 16, 1986, MT Maysun sank near Panay Gulf, losing its entire cargo. Procedural History: Private respondent paid Caltex P5,096,635.57 for the lost cargo and, exercising its right of subrogation, demanded the same amount from petitioner. Upon petitioner's failure to pay, private respondent filed a collection suit. The Regional Trial Court dismissed the complaint, finding the vessel seaworthy and the sinking caused by force majeure. The Court of Appeals reversed this decision, holding petitioner liable based on PAGASA weather reports contradicting petitioner's claims of inclement weather and finding the vessel improperly manned. Petitioner's motion for reconsideration was denied. The Petition: Petitioner seeks review of the Court of Appeals' decision, arguing that the appellate court erred in reversing the RTC decision, in finding the vessel unseaworthy, and in not applying the doctrine in Home Insurance Corporation v. CA.
Issue(s)
Whether the payment made by the private respondent to Caltex for the insured value of the lost cargo amounted to an admission that the vessel was seaworthy, thus precluding any action for recovery against the petitioner. Whether the non-presentation of the marine insurance policy bars the complaint for recovery of sum of money for lack of cause of action.
Ruling
The petition is denied. The decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the issue of whether payment by the insurer constitutes an admission of seaworthiness: The Court ruled in the negative. Payment by the private respondent to Caltex operates as a waiver of its right to enforce the implied warranty against Caltex. However, this payment cannot be interpreted as an admission of the vessel's seaworthiness that would foreclose recourse against the petitioner as a common carrier. The payment grants the private respondent a subrogatory right, enabling it to exercise legal remedies available to Caltex against the petitioner. Article 2207 of the New Civil Code clearly states that the insurer is subrogated to the rights of the insured against the wrongdoer or the person who violated the contract. On the issue of whether the non-presentation of the marine insurance policy bars the complaint: The Court ruled in the negative. The presentation of the marine insurance policy is not indispensable for the insurer to recover from the common carrier in the exercise of its subrogatory right. The subrogation receipt, by itself, is sufficient to establish the relationship between the insurer and the assured, as well as the amount paid. The right of subrogation accrues upon payment by the insurance company of the insurance claim. The ruling in Home Insurance Corporation v. CA, which required the presentation of the policy, is distinguished as that case involved multiple stages of cargo handling where the exact point of damage was unclear, necessitating the policy to define liability. In the present case, it is undisputed that the cargo was lost while on board petitioner's vessel, MT Maysun, which sank in transit.
Main Doctrine
A common carrier is presumed to have been at fault or negligent in case of loss or destruction of goods, and must overcome this presumption by proving it observed extraordinary diligence. Payment by an insurer to the assured does not preclude the insurer, as subrogee, from pursuing remedies against the common carrier, nor does it constitute an admission of the vessel's seaworthiness.