G.R. No. L-69044, 29 May 1987, 150 SCRA 464

FACTS:

The M/S ASIATICA, a vessel operated by petitioner Eastern Shipping Lines, Inc., (referred to hereinafter as Petitioner Carrier) loaded at Kobe, Japan for transportation to Manila, 5,000 pieces of calorized lance pipes in 28 packages consigned to Philippine Blooming Mills Co., Inc., and 7 cases of spare parts consigned to Central Textile Mills, Inc. Both sets of goods were insured against marine risk for their stated value with respondent Development Insurance and Surety Corporation.

En route for Kobe, Japan, to Manila, the vessel caught fire and sank, resulting in the total loss of ship and cargo. The respondent Insurer paid the corresponding marine insurance values to the consignees concerned and was thus subrogated unto the rights of the latter as the insured.

Respondent Development Insurance & Surety Corporation (Development Insurance, for short), having been subrogated unto the rights of the two insured companies, filed suit against petitioner Carrier for the recovery of the amounts it had paid to the insured. Petitioner-Carrier denied liability mainly on the ground that the loss was due to an extraordinary fortuitous event, hence, it is not liable under the law.

ISSUE:

Whether the Civil Code provisions on Common carriers or the Carriage of Goods by Sea Act will govern in the case at bar.

HELD:

The law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration. As the cargoes in question were transported from Japan to the Philippines, the liability of Petitioner Carrier is governed primarily by the Civil Code. However, in all matters not regulated by said Code, the rights and obligations of common carrier shall be governed by the Code of Commerce and by special laws. Thus, the Carriage of Goods by Sea Act, a special law, is suppletory to the provisions of the Civil Code.

*Case digest by Geraldine M. Cabucos, LLB-IV, Andres Bonifacio Law School, SY 2018-2019