Roque
vs. Intermediate Appellate Court
(Insurance
Law)
139
SCRA 596 (G.R. No. L-66935)
November
11, 1985
|
Petitioners:
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Isabela
Roque, doing business under the name and style of Isabela Roque Timber
Enterprises and Ong Chiong
|
|
Respondents:
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Intermediate
Appellate Court and Pioneer Insurance and Surety Corporation
|
J. Gutieerrez, Jr.:
FACTS:
Manila
Bay Lighterage Corporation (Manila Bay) a common carrier, entered into a
contract with the petitioner whereby the former would load and carry on board
its barge Mable 10 about 422.18 cubic meters of logs from Malampaya Sound,
Palawan to North Harbor, Manila. The Petitioner insured the logs against loss
for ₱1,000,000.00
with respondent. Pioneer Insurance and Surety Corporation (Pioneer).
The
petitioner loaded on the barge, 811 pieces of logs at Malampaya Sound, Palawan,
for carriage and delivery to North Harbor, Port of Manila, but the shipment
never reached its destination because Mable 10 sank with the 811 pieces of logs
somewhere off Cabuli Point in Palawan on its way to Manila. As alleged by the
petitioner in their complaint and as found by both the trial and appellate
courts, the barge where the logs were loaded was not seaworthy such that it
developed a leak. The appellate Court further found that one of the hatches was
left open causing water to enter the barge and because the barge was not provided
with the necessary cover or tarpaulin, the ordinary splash of sea waves brought
more water inside the barge.
Respondent
ignored the petitioners demand for payment of ₱150,000.00
for the loss of the shipment plus ₱100,000.00
as unrealized profits.
Respondent
Pioneer denied the claim of petitioner for the full amount of ₱100,000.00
on the ground that its liability depended upon the total loss by total loss of
vessel only.
The
trial court decided in favor of the plaintiff (petitioner)
The
appellate court modified the trial courts decision and absolved Pioneer from
liability after finding that there was a breach of implied warranty of
seaworthiness on the part of the petitioners and that the loss of the insured
cargo, was caused by the “perils of the ship and not by the “perils of the
sea.” It ruled that the loss is not covered by the marine insurance policy.
ISSUE:
Whether
or not the implied warranty of seaworthiness in marine insurance attaches to
the shipper who is not the shipowner.
HELD:
Yes.
Section 113 of the Insurance Code provides:
“In every marine insurance upon
a ship or freight or freightage, or upon anything which is the subject of
marine insurance, a warranty is implied that the ship is seaworthy”
Section
99 of the same Code also provides in part.
Marine
insurance includes:
1. Insurance
against loss or damage to:
a)
Vessel, craft, aircraft, vehicles,
goods, freights, cargoes, merchandise
From
the above-quoted provisions, there can be no mistaking the fact that the term
“cargo” can be the subject of marine insurance and that once it is so made, the
implied warranty of seaworthiness immediately attaches to whoever is insuring
the cargo whether he be the shipowner or not.
Moreover,
the fact that the unseaworthiness of the ship was unknown to the insured is
immaterial in ordinary marine insurance and may not be used by him as a defense
in order to recover on the marine insurance policy.
Since
the law provides for an implied warranty of seaworthiness in every contract of
ordinary marine insurance, it becomes the obligation of a cargo owner to look
for a reliable common carrier which keeps its vessels in seaworthy condition.
The shipper of cargo may have no control over the vessel but he has full
control in the choice of the common carrier that will transport his goods. On
the cargo owner mat enter into a control of insurance which specifically provides
that the insurer answers not only for the perils of the sea but also provides
for coverage of perils of the ship.
There
is no doubt that the term perils of the sea extends only to losses caused by
sea damage, or by the violence of the elements and does not embrace all losses
happening at sea. They insure against losses from extraordinary occurrence only
such as stress of weather, winds and waves, lightning, tempests, rocks and the
like. These are understood as “perils of the sea” referred in the policy, and
not those ordinary perils which every vessel must encounter. Perils of the sea
has been said to include only such losses as are extraordinary nature, or arise
from some overwhelming power, which cannot be guarded against by the ordinary exertion
of human skill and diligence (prudence). Damage done to a vessel by perils of
the sea includes every species of damages done to a vessel at sea as
distinguished from the ordinary wear and tear of the voyage and distinct from
injuries suffered by the vessel in consequence of her not being seaworthy at
the outset of her voyage (as in this case). It is also the general rule that
everything which happens thru the inherent vice of the thing, or by the act of
the owners, master or shipper, shall be reputed a peril, if not otherwise borne
in the policy.
On
the contention of the petitioners that the trial court found that the loss was
occasioned by the perils of the sea characterized by the “storm and waves” which
buffeted the vessel, the records show that the court ruled otherwise. It
stated: “xxx The other affirmative defense of defendant Lighterage, that the
supposed loss of the logs was occasioned by force majeure was not supposed by
the evidence. At the time Mable 10 sank, there was not a typhoon but ordinary
strong wind and waves, a condition which is natural and normal in the open sea.
The evidence shows that the sinking of Mable 10 was due to improper loading of
the logs on one side and for that it did not navigate on even keel; that it was
no longer seaworthy that was why it developed leaked; that the personnel of the
tugboat east of Cabuli point where it was buffeted by storm and waves, while
the tugboat proceeded to west of Cabuli point where it was protected by the
mountain side from the storm and waves coming from the east direction, xxx.”
It
must be considered to be settled, furthermore, that a loss which, in the
ordinary course of events, results from the natural and inevitable action of
the sea, from the ordinary wear and tear of the ship, or from the negligent failure
of the ship’s owner to provide the vessel with proper equipment to convey the
cargo under ordinary conditions, is not a peril of the sea. Such a loss is
rather due to what has been aptly called the “perils of the ship.” The insurer
undertakes to insure against perils of the sea and similar perils not against
perils of the ship. As was, well said by Lord Herschell in Wilson, Sans &
Co. vs. Owners of Cargo per the Xanthro ([1887] 12 A.C., 503, 509) there must,
in order to make the insurer liable, be some casualty, something which could
not be foreseen as one of the necessary incidents of the adventure. The purpose
of the policy is to secure an indemnity against accidents which may happen not
against events which must happen.
Barratry
as defined in American Insurance Law is any willful misconduct on the part of master
or crew in pursuance of some unlawful or fraudulent purpose without the consent
of the owners, and to the prejudice of the owner’s interest,” (Sec. 171, U.S.
Insurance Law, quoted in Vance, Handbook on Law of Insurance, 1951, p. 929.)
Barratry necessarily requires a willful and intentional act in its commission.
No honest error of judgment or mere negligence, unless criminally gross, can be
barratry. (See Vance on Law of Insurance, p. 929 and case cited therein.)
In
the case at bar, there is no finding that the loss was occasioned by the
willful or fraudulent acts of the vessel’s crew. There was only simple
negligence or lack of skill. Hence, the second assignment of error must
likewise be dismissed.
