G.R. No. 84507, 15 March 1990, 18 SCRA 223

FACTS:

In 1976 petitioner imported some lactose crystals from Holland. The importation involved fifteen (15) metric tons packed in 600 6-ply paper bags with polythelene inner bags, each bag at 25 kilos net.
The goods were loaded at the port at Rotterdam in sea vans on board the vessel “MS Benalder’ as the mother vessel, and thereafter aboard the feeder vessel “Wesser Broker V-25” of respondent Ben Lines Container, Ltd. (Ben Lines for short).
The goods were insured by the respondent Filipino Merchants’ Insurance Co., Inc. (insurance company for short) for the sum of P98,882.35, the equivalent of US$8,765.00 plus 50% mark-up or US$13,147.50, against all risks under the terms of the insurance cargo policy.
Upon arrival at the port of Manila, the cargo was discharged into the custody of the arrastre operator respondent E. Razon, Inc. (broker for short), prior to the delivery to petitioner through his broker. Of the 600 bags delivered to petitioner, 403 were in bad order. The surveys showed that the bad order bags suffered spillage and loss later valued at P33,117.63.
Petitioner filed a claim for said loss against respondent insurance company in the amount of P33,117.63 as the insured value of the loss.
Respondent insurance company rejected the claim alleging that assuming that spillage took place while the goods were in transit, petitioner and his agent failed to avert or minimize the loss by failing to recover spillage from the sea van, thus violating the terms of the insurance policy sued upon; and that assuming that the spillage did not occur while the cargo was in transit, the said 400 bags were loaded in bad order, and that in any case, the van did not carry any evidence of spillage.
Hence, petitioner filed the complaint in the RTC of Manila against respondent insurance company seeking payment of the sum of P33,117.63 as damages plus attorney’s fees and expenses of litigation.
In 1986, after trial on the merits, the court a quo rendered a judgment dismissing the complaint against the petitioner.
Hence, the appeal to the CA by petitioner which affirmed the judgment of the trial court.
A motion for reconsideration of said judgment was denied by the appellate court, thus, this petition.

ISSUE:

Whether or not an “all risks” coverage covers only losses occasioned by or resulting from “extra and fortuitous events” despite the clear and unequivocal definition of the term made and contained in the policy sued upon.

RULING:

No.

An all risk insurance policy insures against all causes of conceivable loss or damage, except as otherwise excluded in the policy or due to fraud or intentional misconduct on the part of the insured. It covers all losses during the voyage whether arising from a marine peril or not, including pilferage losses during the war.

In the present case, the “all risks” clause of the policy sued upon reads as follows:
This insurance is against all risks of loss or damage to the subject matter insured but shall in no case be deemed to extend to cover loss, damage, or expense proximately caused by delay or inherent vice or nature of the subject matter insured. Claims recoverable hereunder shall be payable irrespective of percentage.

In the above clause, it is apparent that the terms of the policy are so clear and require no interpretation.

The insurance policy covers all loss or damage to the cargo except those caused by delay or inherent vice or nature of the cargo insured. It is the duty of the respondent insurance company to establish that said loss or damage falls within the exceptions provided for by law, otherwise it is liable therefor. In this case, the damage caused to the cargo has not been attributed to any of the exceptions provided for nor is there any pretension to this effect. Thus, respondent insurance company must pay.
In this case, the damage caused to the cargo has not been attributed to any of the exceptions provided for nor is there any pretension to this effect. Thus, the liability of respondent insurance company is clear.

*Case digest by Oscar Lim Abadies Jr, LLB-IV, Andres Bonifacio College Law School, SY 2018-2019