American Home Insurance Company vs. Court of Appeals

American Home Insurance Company vs. Court of Appeals 

GR. No. 9419 (1992)

Facts: 

Both petitioner American Home Insurance Company and respondent National Marine Corporation (NMC) are foreign corporation licensed to do business in the Philippines. On or about June 19, 1988, Cheng Hua Pulp Corporation shipped 5000 bales of Kraft bulb from Taiwan on board “SS Kaunlaran” owned by NMC. Such shipment with American Home Insurance. On June 22, 1988, the shipment arrived in Manila and was discharged into the custody of Marina Port Services for delivery to the consignee assured. However, upon delivery, it was discovered that 12 bales had either been damaged or lost. The loss had an estimated value of P61,263.41. Petitioner paid Mayleen Paper, Inc. The adjusted amount of P31,501.75. As subrogee, petitioner bought suit against respondent NMC for the recovery of the amount it paid Mayleen Paper Inc. The trial court dismissed the complaint. The CA affirmed decision of the trial court.

Issue:

Whether or not the provisions of the Code of Commerce will apply in determining the liability of a common carrier when there is negligence.

Held:

The Supreme Court held in favor of the petitioner on the ground that the law in general averages of the Code Commerce is applicable only when such law or damages of the cargoes does not arise from the negligence of the court of the carrier otherwise the provision of the Civil Code in law on common carrier shall primarily govern the obligations and liabilities of the common carrier. Therefore, respondent is civilly liable to petitioner American Home Insurance.