### Facts:
In May 1987, Colgate Palmolive Philippines, Inc., imported alkyl benzene from Japan, insured against all risks by Insurance Company of North America. Bayne Adjusters and Surveyors, Inc., was tasked with supervising the cargo’s handling from a chemical tanker to a barge, then into Colgate’s storage. On June 27, 1987, during transfer to the shore tank, the pump faced multiple breakdowns. Eventually, the Bayne surveyor left without instructions or sealing the tank’s valves. Unscheduled, barge operators resumed pumping, leading to overflow and alkyl benzene loss.
The consignee filed a claim with the insurer, agreed on a loss figure, and was paid P811,609.53. Bayne Adjusters failed to settle the matter extrajudicially, prompting the insurer to file a collection suit as subrogee. Both the trial and appellate courts found Bayne negligent for not following Standard Operating Procedure, leading to the loss.
### Issues:
1. Whether Bayne Adjusters and Surveyors Inc. was negligent in handling the alkyl benzene, causing its spillage.
2. Whether the Standard Operating Procedure in Handling Liquid Bulk Cargo applies to the case.
3. The impact of the alleged contractual mischaracterization on liability.
4. The role and weight of testimony and factual findings in the context of appeal to the Supreme Court.
### Court’s Decision:
The Supreme Court upheld the findings of both lower courts, affirming Bayne Adjusters’ negligence. The Court emphasized Bayne’s failure to follow the established Standard Operating Procedure crucial in preventing unsupervised pumping and resultant overflow. Bayne’s argument focusing on the contractual terms and misinterpretation was dismissed, noting the remedied mistake about the contract’s nature did not outweigh evidence of negligence. The Supreme Court reiterated its stance on not overturning lower courts’ findings on witness credibility and factual determination without compelling reasons, none of which were present in this case.
### Doctrine:
The negligence of an obligor in fulfilling their duty that results in loss or damage renders them liable for damages. This principle is interpreted within the context of the obligor’s failure to abide by established standards or procedures expected in the ordinary course of their duty.
### Class Notes:
– **Negligence and Liability:** Obligor’s failure to follow standard operating procedures, leading to damage or loss, constitutes negligence.
– **Standard Operating Procedure Compliance:** Obligors must adhere to established procedures relevant to their specific duties to prevent loss or damage.
– **Contractual Mischaracterization:** An initial mischaracterization of a contract’s nature, if corrected, has limited impact on the evaluation of obligation fulfillment and negligence.
– **Factual Findings and Witness Credibility:** Lower courts’ determinations on facts and witness credibility are generally conclusive in the absence of strong, cogent reasons to overturn them.
### Historical Background:
The case underscores the critical need for strict adherence to industry standards, especially in handling and transporting hazardous or valuable materials. It also illustrates the role and weight of procedural accuracy and the delineation of duties within contractual relationships, reflecting broader principles in maritime and insurance law in the Philippines.
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