SPECIAL THIRD DIVISION
[ G.R. No. 185565. April 26, 2017 ]
LOADSTAR SHIPPING COMPANY, INCORPORATED AND LOADSTAR INTERNATIONAL SHIPPING COMPANY, INCORPORATED, PETITIONERS, V. MALAYAN INSURANCE COMPANY, INCORPORATED, RESPONDENT.
CONCURRING AND DISSENTING OPINION
PERALTA, J.:
Respondent has filed the instant Motion for Reconsideration of the Decision dated November 26, 2014, granting the petition, on the following grounds, to wit:
The conclusion of the Court of Appeals that Petitioners Loadstar was acting as a common carrier has been ignored
The factual finding of the Court of Appeals that there was a breach of the Contract of Affreightment was ignored.
The factual finding of the Court of Appeals that Petitioners Loadstar failed to produce evidence of a calamity was ignored.1
In essence, respondent posits the view that petitioners should be made liable to pay it (respondent) the actual damages it seeks to recover as subrogee to the rights of the insured, PASAR.
With due respect to the majority, it is my considered view that the Court should take a more prudent look at the facts and circumstances obtaining herein and grant the instant Motion for Reconsideration.1aшphi1
The ponencia found that: (1) the amount of P32,351,102.32 paid by respondent to PASAR covers the latter's claim for damages to the cargo and that based on the computation of Elite Adjustors and Surveyors; (2) the sum of P32,315,312.32 represents damages for the total loss of that portion of the cargo, equivalent to 777.290 wet metric tons, or 696.336 dry metric tons, which were contaminated with seawater and not merely the depreciation in its value; (3) after claiming damages for the total loss of that portion, PASAR bought back the contaminated copper concentrates from respondent at the price of US$90,000.00. The ponencia proceeds to hold that the fact of repurchase is enough to conclude that the contamination of the copper concentrates cannot be considered as total loss on the part of PASAR, and that there was no sufficient proof of the actual amount of loss to PASAR for which it was indemnified by respondent. Thus, the ponencia concludes that respondent, as subrogee to the rights of PASAR, is not entitled to the amount of actual damages it claims.
I beg to differ.1aшphi1
While it is true that the contamination of the copper concentrates cannot be considered as total loss on the part of PASAR, this does not exclude the fact that the subject cargo obtained damage. On the contrary, the copper concentrates, in fact, obtained damage and that the only remaining value which was salvaged from the contaminated portion amounted only to US$90,000.00. This is precisely the reason why from the insured value of P32,315,312.32, as computed by Elite, PASAR only paid US$90,000.00 when it bought back the contaminated copper concentrates from respondent. In the same vein, this is also the reason why the CA subtracted US$90,000.00, which it considered as the residual value of the contaminated copper concentrates, from the amount of P33,934,948.74 which respondent seeks to recover from petitioner.
As held by the ponencia, "[i]t is not disputed that the copper concentrates carried by M/V Bobcat from Poro Point, La Union to Isabel, Leyte were indeed contaminated with seawater. The issue lies on whether such contamination resulted to damage, and the costs thereof, if any, incurred by the insured PASAR."2
The ponencia holds that respondent failed to prove that the subject copper concentrates are rendered useless or unfit for the purpose intended by PASAR due to contamination with seawater. However, logic dictates that if the contaminated copper concentrates indeed retained their usability and did not greatly diminish in value, why should respondent agree to pay its insured value and to subsequently sell the same to PASAR only for a relatively small amount of US$90,000.00 (which was roughly equivalent to P4,500,000.00)3 when its insured value amounted to more than P32,000,000.00. This only shows that the subject copper concentrates were greatly damaged and there was considerable depreciation in their value.
The question, then, is who will bear the burden of such loss or diminution in value. I submit that the CA did not err in ruling that petitioners should bear the burden of such loss and pay respondent the actual damages it seeks to recover, subject to adjustment as determined by the appellate court.
Petitioners are common carriers. Common carriers are defined, under Article 1732 of the Civil Code, as persons, corporations, firms, or associations engaged in the business of carrying or transporting passenger or goods, or both by land, water or air for compensation, offering their services to the public. As such, they are mandated from the nature of their business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over the goods transported by them according to all the circumstances of such case, as required by Article 1733 of the same Code. Furthermore, Article 1735 of the Civil Code provides that, in all cases other than those mentioned under Article 1734 thereof, if the goods are lost destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Article 1733. There being no dispute that the subject cargo sustained damage, the presumption is that it was caused by reason of petitioners' negligence. Thus, it is incumbent upon petitioners to prove that they exercised extraordinary diligence in the vigilance over such goods it contracted for carriage. As held by the CA, petitioners failed in this regard. Thus, the CA held that:
In this case, the lower court found that the crack that caused seawater to seep into the cargo hold - in turn contaminating part of the cargo of copper concentrates - was caused by a "natural disaster or calamity that wrecked [the] Bobcat while on its way to Isabel, Leyte." However, the record is bereft of any showing that [herein petitioners] were able to prove that a natural disaster occurred while the vessel was en route to its destination save for the allegation that MV "Bobcat" encountered "very heavy weather." None of the crew was presented by [petitioners] during the trial of the case and no witness testified that there was a storm or other calamity which could exculpate [petitioners] from liability. Therefore, under the law, MV "Bobcat" was unseaworthy at the time she undertook the voyage on September 10, 2000.4
As to petitioners' breach of its Contract of Affreightment with respondent, it is submitted that the CA also correctly held that:
x x x [petitioners] were well aware that the cargo of copper concentrates was easily contaminated by seawater, as Item II of the Contract of Affreightment ("NATURE AND QUANTITY OF CARGO") provides:
3. Copper concentrates are easily contaminated by seawater. Loadstar shall ensure that cargo holds and hatches are clean, fully secured and devoid of contamination prior to loading.
[Respondent] further argues that [petitioners] also violated Item III 4 of the Contract of Affreightment, which provides for a limitation in the age of the vessel to be assigned to PASAR. Under said provision, the vessel "must not exceed fifteen (15) years of age unless the vessel has maintained seaworthiness... but in no case to exceed 25 years of age." At the time the incident occurred, MV "Bobcat" was already 30 years of age, and thus, [petitioners] breached the aforementioned provisions.5
Under Article 1170 of the Civil Code, those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those who in any manner contravene the tenor thereof, are liable for damages. In explaining the import of this provision, this Court in Spouses Guanio v. Makati Shangri-La Hotel and Resort, Inc.,6 held that:
In culpa contractual x x x the mere proof of the existence of the contract and the failure of its compliance justify, prima facie, a corresponding right of relief. The law, recognizing the obligatory force of contracts, will not permit a party to be set free from liability for any kind of misperformance of the contractual undertaking or a contravention of the tenor thereof. A breach upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered. The remedy serves to preserve the interests of the promissee that may include his expectation interest, which is his interest in having the benefit of his bargain by being put in. as good a position as he would have been in had the contract been performed, or his reliance interest, which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made; or his restitution interest, which is his interest in having restored to him any benefit that he has conferred on the other party. Indeed, agreements can accomplish little, either for their makers or for society, unless they are made the basis for action. The effect of every infraction is to create a new duty, that is, to make RECOMPENSE to the one who has been injured by the failure of another to observe his contractual obligation unless he can show extenuating circumstances, like proof of his exercise of due diligence x x x or of the attendance of fortuitous event, to excuse him from his ensuing liability, (emphasis and underscoring in the original; capitalization supplied)7
Thus, Article 2201 of the Civil Code provides that:
In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is liable shall be those that are the natural and probable consequences of the breach of the obligation, and which the parties have foreseen or could have reasonably foreseen at the time the obligation was constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which may be reasonably attributed to the non-performance of the obligation.
In the present case, I concur with the majority in finding that petitioners failed to exercise extraordinary diligence in the vigilance over the goods they contracted for carriage. Indeed, petitioners' wanton attitude was shown by the fact that they deployed a clearly over-aged ship and that they failed to make sure that the ship's hatches were watertight or properly secured during voyage. The resulting contamination and the subsequent rejection of the subject copper concentrates can be reasonably attributed to petitioners' non-performance of their obligation to observe extraordinary diligence over the goods they are transporting. In other words, they are guilty of breach of their contract of affreightment with PASAR. Thus, petitioners should be made liable, not only for nominal damages as ruled upon by the majority, but for the entire damage caused to the subject cargo.
Lastly, in regard to petitioners' liability for actual damages, the ponencia's ruling is anchored on the argument that respondent failed to present evidence to prove that the contamination resulted in actual damage to the cargo and the cost of such damage, if any.
I take exception to the above ruling.
In the case of Insurance Company of North America v. Asian Terminals, Inc.,8 this Court, in computing the amount of actual damages due to the petitioner insurance company in the said case, relied on the Evaluation Report of the independent adjuster engaged by the said insurance company. In the instant case, it is well to note that part of the evidence presented by respondent is the final adjustment report dated November 16, 2000, made by Elite Adjusters and Surveyors, Inc. (Elite), an independent company engaged by respondent to assess the damage caused to the subject cargo and the possible consequent liability of respondent as the insurer. In the said report, which was addressed to respondent, Elite found that 777.29 wet metric tons, or 696.336 dry metric tons, had high chlorine and moisture content. Thus, Elite made the following findings and conclusions:
Comparability Aspect. We are satisfied from our own investigation of the claim that the total quantity of 777.290 Wet Metric Tons equivalent to 696.336 dry metric tons were damaged due to contamination and wetting with sea water, occurring during the voyage from Poro Point to Isabel, Leyte, or perils insured under the policy. We believe therefore that the claim is compensable, subject to adjustment.
x x x x
Recommendation. Subject to your agreement with and approval of our findings and adjustment, payment to assured of the amount of P32,351,102.32 as adjusted is hereby recommended.
SALVAGE
As of the present, we doubt that there is any salvage value on the damaged cargo as we are not aware of anyone interested in purchasing the same or of any use thereof.9
As earlier mentioned, respondent agreed to pay PASAR the insured value of the contaminated or damaged copper concentrates on the basis of the abovequoted findings. Again, why should respondent agree to pay P32,351,102.32 if such report is not a competent evidence of such damage? Thus, it is my considered view that the above findings of the independent adjuster is a competent and sufficient evidence of the value of the actual damage sustained by the subject cargo of copper concentrates.
Accordingly, I vote to GRANT the Motion for Reconsideration.
Footnotes
1 Rollo, pp. 587-588.
2 Emphasis supplied.
3 Based on the records of the Bangko Sentral ng Pilipinas, the monthly average Philippine Peso exchange rate for US$1 in November 2000 was 49.7537. Thus, in November 2000, US$90,000.00 was equivalent only to P4,477,833.
4 Rollo, p. 19.
5 Id. at 19-20.
6 656 Phil. 608 (2011).
7 Guanio v. Makati Shangri-La Hotel and Resort, Inc., supra, at 615, citing RCPI v. Verchez, et al., 516 Phil. 725, 735 (2006).
8 682 Phil. 213 (2012).
9 Rollo, pp. 434-435. (Emphasis in the original)
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