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  • FEDEX vs. AHAC and PHILAM G.R. No. 150094, 18 August 2004)

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    Federal Express Corporation was sued for damages by Phil-Am Insurance Company for the loss of a shipment of veterinary biologicals insured by Phil-Am and delivered by Federal Express. The shipment required refrigeration but was stored in a room with air conditioners instead. The biologicals were found to be unusable. Phil-Am paid the claim to the consignee and then sued Federal Express, arguing negligence. The Supreme Court reversed the lower court's finding of liability for Federal Express, reasoning that upon receiving the insurance payout, the consignee had transferred its right to sue for damages to Phil-Am, who could only proceed against the carrier if negligence was shown.

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    FEDEX vs. AHAC and PHILAM G.R. No. 150094, 18 August 2004)

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    Federal Express Corporation was sued for damages by Phil-Am Insurance Company for the loss of a shipment of veterinary biologicals insured by Phil-Am and delivered by Federal Express. The shipment required refrigeration but was stored in a room with air conditioners instead. The biologicals were found to be unusable. Phil-Am paid the claim to the consignee and then sued Federal Express, arguing negligence. The Supreme Court reversed the lower court's finding of liability for Federal Express, reasoning that upon receiving the insurance payout, the consignee had transferred its right to sue for damages to Phil-Am, who could only proceed against the carrier if negligence was shown.

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    © All Rights Reserved
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    34 views1 page

    FEDEX vs. AHAC and PHILAM G.R. No. 150094, 18 August 2004)

    Uploaded by

    Thoughts and More Thoughts
    Federal Express Corporation was sued for damages by Phil-Am Insurance Company for the loss of a shipment of veterinary biologicals insured by Phil-Am and delivered by Federal Express. The shipment required refrigeration but was stored in a room with air conditioners instead. The biologicals were found to be unusable. Phil-Am paid the claim to the consignee and then sued Federal Express, arguing negligence. The Supreme Court reversed the lower court's finding of liability for Federal Express, reasoning that upon receiving the insurance payout, the consignee had transferred its right to sue for damages to Phil-Am, who could only proceed against the carrier if negligence was shown.

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    © All Rights Reserved
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    of 1

    Federal Express Corporation vs.

    American Home Assurance Company and Phil-Am


    Insurance Company, Inc., G.R. No. 150094, 18 August 2004)
    FEDEX vs. AHAC and PHILAM INSURANCE COMPANY, INC

    G.R. No. 150094, August 18, 2004

    PANGANIBAN, J.:

    FACTS:

    Shipper SMITHKLINE USA delivered to carrier Burlington Air Express, an agent of herein petitioner,
    a cargo shipment, insured with respondent which consist of 109 cartons of veterinary biological for
    delivery to consignee SMITHKLINE and French Overseas Company in Makati City with the words,
    “REFRIGERATE WHEN NOT IN TRANSIT” and “PERISHABLE” stamp marked on its face.
    However, 12 days after the cargoes arrived in Manila, it was found out that the same were stored
    only in a room with 2 air conditioners running in the warehouse of Cargohaus Inc., to cool the place
    instead of a refrigerator.

    As a consequence of the result of the veterinary biological test, SMITHKLINE abandoned the
    shipment and, declaring “total loss” for the unusable shipment, filed a claim with AHAC through its
    representative in the Philippines, The Philam Insurance Co., Inc., (PHILAM) which recompensed
    SMITHKLINE for the whole insured amount. Thereafter, PHILAM filed an action for damages against
    FEDEX imputing negligence on either or both of them in the handling of the cargo where it was
    decided that FEDEX is solidarily liable with Cargohaus Inc.

    ISSUE:

    Is FEDEX liable for damage to or loss of the insured goods

    RULING:
    Assailed decision reversed insofar as it pertains to FEDEX

    RATIO DECIDENDI:

    No. Upon receipt of the insurance proceeds, the consignee (SMITHKLINE) executed a subrogation
    receipt in favor of respondents authorizing them “to file claims and begin suit against any such
    carrier, person, vessel, corporation or government.” Undeniably, the consignee had a legal right to
    receive the goods in the same condition it was delivered for transport to petitioner and if that right
    was violated, the consignee would have a cause of action against the person responsible therefor.

    In the exercise of its subrogatory right, an insurer may proceed against an erring carrier and to all
    intents and purposes, it stands in the place and in substitution of the consignee.

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