Gaspar Salvage & Lighterage Corp. v. LG Insurance Company
REITERATIONFacts
The Antecedents: Sunkyong America, Inc. shipped 23,842 bags of Peruvian fishmeal, insured by LG Insurance Company, Ltd. (U.S. Branch) through WM H. McGee & Co., Inc., for delivery to Manila. The shipment was loaded onto barges owned by C.V. Gaspar Salvage & Lighterage Corporation for final delivery to the consignee's warehouse. During transit on barge "AYNA-1," the cargo became wet, resulting in the damage and loss of 3,662 bags of fishmeal. The consignee, Great Harvest, filed claims against Fortune Brokerage and C.V. Gaspar, which were ignored. Consequently, Great Harvest filed a claim with LG Insurance, which paid the insurance claim and was subsequently subrogated to Great Harvest's rights. Procedural History: LG Insurance and WM H. McGee filed an action for damages against Fortune Brokerage and C.V. Gaspar. The Regional Trial Court (RTC) ruled in favor of LG Insurance and WM H. McGee, holding Fortune Brokerage and C.V. Gaspar jointly and solidarily liable for the damages and attorney's fees. Both defendants appealed. The Court of Appeals (CA) affirmed the RTC's decision with modification, deleting the award of attorney's fees, and denied the subsequent motions for reconsideration. C.V. Gaspar and Fortune Brokerage then filed separate petitions for review on certiorari with the Supreme Court, which were consolidated. The Petition: C.V. Gaspar Salvage & Lighterage Corporation and Fortune Brokerage and Freight Services, Inc. filed petitions for review on certiorari under Rule 45 of the Rules of Court. C.V. Gaspar argues that the complaint was defective, AYNA-1 is not a common carrier, its service contract with Fortune Brokerage is valid, and it should not be held solidarily liable. Fortune Brokerage contends that LG Insurance and WM H. McGee failed to prove their claim, it is not a party to the service contract, and the complaint suffered from defects. Both petitioners challenge the authority of Fajardo Law Office to file the complaint and the validity of the subrogation.
Issue(s)
Whether Fajardo Law Office, through Atty. Fajardo, was authorized to file the Complaint and Amended Complaint and sign the Verification and Certification on Non-Forum Shopping in behalf of LG Insurance and WM H. McGee. Whether there was a valid subrogation of rights between Great Harvest and LG Insurance and WM H. McGee. Whether AYNA-1 is a common carrier. Whether C.V. Gaspar and Fortune Brokerage should be held solidarily liable to LG Insurance and WM H. McGee for the amount paid to Great Harvest.
Ruling
The petitions have no merit. The Supreme Court affirmed the Decision of the Court of Appeals, holding Fortune Brokerage and C.V. Gaspar jointly and solidarily liable to LG Insurance and WM H. McGee.
Ratio Decidendi
On the authority of Fajardo Law Office and Atty. Fajardo: The Court held that a foreign corporation not doing business in the Philippines is not absolutely incapacitated from filing suit. LG Insurance, acting through WM H. McGee, had a Special Power of Attorney designating Fajardo Law Office as its resident agent with authority to represent it in the suit. The Court also found that the late filing of the Verification and Certification of Non-Forum Shopping, attached to the Amended Complaint, constituted substantial compliance with the Rules of Court, as the objective of preventing forum shopping was met. On the validity of subrogation: The Court affirmed that there was a valid subrogation under Article 2207 of the Civil Code. LG Insurance paid Great Harvest's insurance claim for the damaged fishmeal. Upon payment, LG Insurance was subrogated to the rights of Great Harvest against the wrongdoers, Fortune Brokerage and C.V. Gaspar, to the extent of the payment made. This right accrues upon payment and does not require privity of contract or a written assignment. On AYNA-1 being a common carrier: The Court agreed with the CA that AYNA-1 is a common carrier as defined under Article 1732 of the Civil Code. As one of the barges commissioned to transport goods for compensation, offering its services to the public, it is bound to observe extraordinary diligence. The presence of a hole in the bottom plating of AYNA-1, as evidenced by the survey results, established its unseaworthiness and C.V. Gaspar's failure to overcome the presumption of negligence. On the solidary liability of C.V. Gaspar and Fortune Brokerage: The Court upheld the CA's finding that Fortune Brokerage assumed full liability under its service contract with Great Harvest for any damage to the cargo. Despite Fortune Brokerage's claims regarding Mesina's authority, the RTC found that Mesina, as an employee entrusted with shipside permits and with a history of signing similar service contracts, was acting within the scope of his implied authority. Therefore, Fortune Brokerage could not escape liability under the service contract it executed with C.V. Gaspar. The Court also noted that a customs broker can be considered a common carrier if transportation is an integral part of its business.
Main Doctrine
A foreign corporation not licensed to do business in the Philippines may sue in local courts on isolated business transactions, and the late filing of a verification and certification against forum shopping constitutes substantial compliance with the Rules of Court.