Roque vs. Intermediate Appellate Court: Facts
Roque vs. Intermediate Appellate Court: Facts
ISSUES:
I. THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT IN CASES OF MARINE CARGO
INSURANCE, THERE IS A WARRANTY OF SEAWORTHINESS BY THE CARGO OWNER.
II. THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE LOSS OF THE CARGO IN THIS
CASE WAS CAUSED BY "PERILS OF THE SHIP" AND NOT BY "PERILS OF THE SEA.”
RULING:
I. No. The IAC is correct.
The liability of the insurance company is governed by law. Section 113 of the Insurance Code
provides:
In every marine insurance upon a ship or freight, or freightage, or upon any thing that 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 of or damage to:
(a) Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, ...
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.
MARINE INSURANCE
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.
In the absence of stipulation that insurer answers for perils of the ship, insurance
cannot be recovered on losses from perils of the ship.—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. Or the cargo
owner may enter into a contract 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.
BARRATRY" DEFINED
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 cases cited therein.)
There is no barratry as will enable a cargo shipper to recover on a marine cargo
insurance where ship's crew's acts constitute only simple negligence or lack of skill.—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.
FACTS:
A complaint was filed by private respondent corporation against petitioner (then defendant) company
seeking collection of the sum of P868,339.15 representing private respondent's losses and damages
incurred in a shipment of seamless steel pipes under an insurance contract in favor of the said private
respondent as the insured, consignee or importer of aforesaid merchandise while in transit from Japan to
the Philippines on board vessel SS "Eastern Mariner."
ISSUE: WON the rusting of steel pipes in the course of a voyage is a "peril of the sea" in view of the toll
on the cargo of wind, water, and salt conditions.
RULING:
YES. There is no question that the rusting of steel pipes in the course of a voyage is a
“peril of the sea” in view of the toll on the cargo of wind, water, and salt conditions. At
any rate if the insurer cannot be held accountable therefor, we would fail to observe a
cardinal rule in the interpretation of contracts, namely, that any ambiguity therein should
be construed against the maker/issuer/drafter thereof, namely, the insurer. Besides the
precise purpose of insuring cargo during a voyage would be rendered fruitless. Be it noted
that any attack of the 15-day clause in the policy was foreclosed right in the pre-trial
conference.
Civil Procedure
Finally, it is a cardinal rule that save for certain exceptions, findings of facts of the
appellate tribunal are binding on Us. Not one of said exceptions can apply to this case.
DOCTRINES: