MARITIME COMPANY OF THE PHILIPPINES, PETITIONER, VS. COURT OF APPEALS AND RIZAL SURETY & INSURANCE CO., RESPONDENTS.

In the Court of First Instance of Manila, Rizal Surety &
Insurance Co. (hereafter, simply Rizal Surety) sued the National Development
Company (NDC) and Maritime Co. of the Philippines (hereafter simply Maritime
Co.) for the recovery of a sum of money paid by it as insurer for the value of
goods lost in transit on board the vessel known as the SS Doña Nati.^[1]
After due proceedings and trial, the complaint was “dismissed with costs
against plaintiff.”^[2]
The Trial Court’s judgment was founded upon the following findings and
conclusions, to wit:

1. Rizal Surety “was
the insurer of 800 packages of PVC compound loaded on the SS Doña Nati
at Yokohama and consigned to the Acme Electrical Manufacturing Company.”

2.  “The SS Doña Nati
was owned by the National Development Company whereas the Maritime Company of
the Philippines was its Agent. This
appears indubitably in the Bill of Lading, Exhibit D.”

3: “The goods were never delivered to the consignee (Acme
Electrical, etc., supra) so that ** (Rizal), as Insurer, paid ** (said)
consignee the sum of P38,758.50.”

4.    “The
cause of the non-delivery of the goods, from the evidence presented by both
Defendants is that in Nagoya Bay, while the SS Doña Nati was being
piloted by a Japanese pilot, the SS Doña Nati was rammed by M/V Yasushima
Maru, causing damage to the hull of the SS Doña Nati and the
resultant flooding of the holds damaged beyond repair the goods of the
consignee in question.”

5.    “There
is no doubt that under our Code of Commerce, it would be the vessel at fault in
this collision, that would be responsible for the damage to the cargo. And the evidence of both Defendants, which
has not been rebutted, is that the M/V Yasushima Maru was at fault in
the collision, so that the cause of action of plaintiff should be directed to
the owners of the negligent vessel. However,
as Plaintiff has brought this action in good faith, attorney’s fees are not
recoverable.”

Rizal Surety elevated the case to the Court of Appeals.1
That Court found merit in its appeal. It thus rendered judgment,2 setting aside that of the Trial
Court and “ordering defendants-appellees (NDC and Maritime Co.) jointly
and severally to pay jointly and severally to plaintiff-appellant (Rizal
Surety) the sum of P38,758.50 with legal rate of interest from the filing of
the complaint.”3

This judgment of the Appellate Tribunal was in turn appealed by
Maritime Company. To that Court
Maritime Co. attributes the following errors, in a bid to have its judgment
reversed by this Court, viz:

1)     
holding that it was a ship agent under the Code of Commerce
instead of merely an agent under the Civil Code;

2)     
not holding that under the Bill of Lading sued upon, Rizal
Surety had no cause of action against either impleaded defendant;

3)     
not holding that the collision between the SS Doña Nati
and the MV Yasushima Maru — which caused the loss of the insured goods
— was due solely to the fault or negligence of the complement of the Yasushima
Maru, as well as the character of the goods themselves and the defect in
their packing; and

4)     
not holding that Rizal Surety’s cause of action was barred by
prescription as well as Stipulation No. 19 of the Bill of Lading.

The evidence establishes that NDC had appointed petitioner
Maritime Co. as its agent to manage and operate three vessels owned by it,
including the SS Doña Nati, for and in its behalf and account, and for a
determinable period (i.e., until full reimbursement of all moneys advanced
and/or full relief from or payment of all guarantees made by Maritime Co. for
account of the vessels). Under their
written agreement, Maritime Co. was bound to “provision and victual”
the SS Doña Nati and the other two vessels, and to render a complete
report of the operations of the vessels within 60 days after conclusion of each
voyage; it was also authorized to appoint sub-agents at any ports or places
that it might deem necessary, remaining however responsible to the ship-owner
(NDC) for the timely and satisfactory performance of said sub-agents. These facts preponderantly demonstrate the
character of Maritime Co. as ship agent under the Code of Commerce, a ship
agent, according to that Code, being “the person entrusted with
provisioning or representing the vessel in the port in which it may be
found.”4

Maritime Co. however insists that it was not the ship agent of
NDC in Japan but “the Fuji Asano Co., Ltd., which supplied her with
provisions, and represented her therein and which issued the bill of lading for
the owner NDC.” The claim is belied by the bill of lading referred to.1
The letterhead of the bill of lading is in two (2) parts, and is printed in the
following manner:

PHILIPPINE NATIONAL LINES

NATIONAL DEVELOPMENT COMPANY

MARITIME COMPANY OF THE PHILIPPINES

AGENT

PHILIPPINES-HONGKONG-JAPAN-U.S.
PACIFIC COAST-GULF PORTS

HONGKONG-COSMOS DEVELOPMENT COMPANY * JAPAN-FUJI ASANO
KAIUN CO., LTD.

*U.S.A.-NORTH AMERICAN MARITIME AGENCIES

As will be observed, in what may be described
as the main letterhead, Maritime Co. is indicated as “Agent” for the
(1) Philippines, (2)Hongkong (3) Japan, and the (4) U.S. Pacific
Coast-Gulf Ports. Underneath this
main letterhead is a sort of secondary sub-head: “Hongkong-Cosmos Development Company; Japan-Fuji
Asano Kaiun Co., Ltd., U.S.A.-North American Maritime
Agencies.” The necessary connotation is that the firms thus named are
sub-agents or secondary representatives of Maritime Co., Fuji Asano Kaiun Co.,
Ltd., particularly, being the representative of NDC and Maritime Co. in
Japan, as distinguished from the Maritime Co., which is described as AGENT
not only in Japan but also in other places: the Philippines, Hongkong, U.S. Pacific Coast, and the Gulf
Ports. Moreover, the bill shows on its
face that it was issued ‘FOR THE MASTER” by “Maritime Company of the
Philippines, Agent.”

Equally unacceptable is the contention
that “Acme Electrical Manufacturing, Manila,” was not the consignee
of the goods described in the bill of lading and therefore, payment to it for
the loss of said goods did not operate to make Rizal Surety its subrogee. The contention is in the first place belied
by the bill of lading which states that if the goods are “consigned to the
Shipper’s Order” — and the bill is so consigned: “to the order of China Banking
Corporation, Manila, or assigns” — the “Acme Electrical
Manufacturing, Manila,” shall be notified. This shows, in the context of the other documents hereafter adverted
to, that Acme was the importer and China Banking Corporation the financing
agency. The contention is also confuted
by the Commercial Invoice of the shipper2 which recites that it was “by
order and for account of Messrs. Acme Electrical Manufacturing, Manila”
that the 800 bags of PVC compound were shipped from Yokohama to Manila. It is also disproved by the fact that it was
Acme that insured the goods with Rizal Surety and the latter did insure them3 on
the strength of the former’s Marine Risk Note,4 long before the goods were lost at
sea, and it was Acme, thru its broker, that claimed the proceeds for the loss.5
The contention is finally discredited by Maritime Co.’s own certification which
states that the “800 packages PVC Compound ** ** consigned to Acme
Electrical Manufacturing was ‘carried away’ to sea as a result of the
accident and same was unrecovered **.”6

There is thus no question of the entitlement of Acme Electrical
Manufacturing to the proceeds of the insurance against loss of the goods in
question, nor about the fact that it did receive such proceeds from the Rizal
Surety, as insurer, which made payment upon due ascertainment of the actuality
of the loss. The legal effect is
inescapable. Rizal Surety was
subrogated to Acme’s rights against the shipowner and the ship agent arising
from the loss of the goods.1

Now, according to the Court of Appeals, Acme’s rights are to be
determined by the Civil Code, not the Code of Commerce. This conclusion derives from Article 1753 of
the Civil Code to the effect that it is the “law of the country to which
the goods are to be transported (which) shall govern the liability of the
common carrier for their loss, destruction or deterioration.” It is only
in “matters not regulated by ** (the Civil) Code,” according to Article
1766, that “the rights and obligations of common carriers shall be
governed by the Code of Commerce and by special laws.” Since there are
indeed specific provisions regulating the matter of such liability in the Civil
Code, these being embodied in Article 1734, as well as prescribing the period
of prescription of actions, it follows that the Code of Commerce, or the
Carriage of Goods by Sea Act, has no relevancy in the determination of the
carrier’s liability in the instant case. In American President Lines v. Klepper,2
for instance, we ruled that in view of said Articles 1753 and 1756, the
provisions of the Carriage of Goods by Sea Act are merely suppletory to the
Civil Code.

Under the established facts, and in accordance with Article 1734
above mentioned, petitioner Maritime Co. and NDC, as “common
carriers,” are liable to Acme for “the loss, destruction or
deterioration of the goods,” and may be relieved of responsibility if the
loss, etc., “is due to any of the following causes only:3

1.     
Flood, storm, earthquakes, lightning, or other natural
disaster or calamity;

2.     
Act of the public enemy in war, whether international or
civil;

3.     
Act or omission of the shipper or owner of the goods;

4.     
The character of the goods or defects in the packing or in the
containers;

5.     
Order or act of competent public authority.”

Since none of the specified absolutory
causes is present, the carrier’s liability is palpable.

The petitioner’s other claim that the loss of the goods was due
entirely to the fault of the Japanese vessel, Yasushima Maru, which rammed
into the Doña Nati, cannot be sustained. The Appellate Tribunal found, as a fact, after a review and study
of the evidence, that the Dona Nati “did not exercise even due
diligence to avoid the collision.” In line with the familiar axiom that
factual conclusions of the Court of Appeals are conclusive and may not be
reviewed, the petitioner’s attempt to shift the blame to the Japanese vessel is
futile. Having failed to exercise
extraordinary diligence to avoid any loss of life and property, as commanded by
law, not having in fact exercised “even due diligence to avoid the
collision,” it must be held responsible for the loss of the goods in
question. Besides, as remarked by the
Court of Appeals, “the principal cause of action is not derived from a
maritime collision, but rather, from a contract of carriage, as evidenced by
the bill of lading.”

WHEREFORE, the Decision of the Court of Appeals subject of
the petition for review is AFFIRMED, with costs against petitioner.

Cruz, Gancayco, Griño-Aquino, and
Medialdea, JJ., concur.

^[1]
The suit was docketed as Civil Case No. 60601 and was assigned to Branch XIV
presided over by Hon. Judge Jesus de Veyra

^[2]
Judgment, February 16,1968, Rollo, p. 47 – Rec. on App., pp. 50-52

1
Its appeal was docketed as CA-GR. No. 42168-R

2
Rollo, pp. 19-31

3
Ponente was Gopengco, J., with whom concurred Melencio-Herrera
and Ericta, JJ.

4
ART. 586, Code of Commerce; see Switzerland General Insurance Co., Ltd. v.
Ramirez, 96 SCRA 297 [1980]

1
Exhs. D and D-1; folio of exhibits, pp. 5-6

2
Exh. E; folio of exhibits, p. 7

3
Exh. H; folio of exhibits, p. 10

4 Exh. B; folio of exhibits, p, 3

5 Exh. C; folio of exhibits, p. 4

6 Exh.G; folio of exhibits, p. 9

1 ART. 2207, Civil Code; Manila Mahogany Mfg. Corp. v.
C.A., G.R. No. 52756, Oct. 12, 1987

2 110 Phil. 243, 248; see also Eastern Shipping Lines,
Inc. v. IAC, 150 SCRA 463, 470; of, Yangco v. Laserna, 73
Phil. 330, 341

3 Emphasis supplied