Philippine American General Insurance Company v. Court of Appeals

Summary

Philippine American General Insurance sought to recover P1,511,210.00 from Transpacific Towage as subrogee after paying for cargo damaged when M/V 'Crazy Horse' was wrecked during typhoon 'Saling' in October 1985. The vessel had been unloading cargo in Pasacao, Camarines Sur for 40 days when the typhoon struck, causing the ship to break apart and sink partially, resulting in loss of remaining cargo through natural disaster and subsequent looting. The trial court found the carrier liable despite the typhoon, ruling the delay exposed cargo to risk. However, the Court of Appeals and Supreme Court found the carrier not liable, holding that the delay was caused by natural port conditions rather than negligence, and that the typhoon was the sole proximate cause of loss. The Supreme Court affirmed that under Article 1739 of the Civil Code, common carriers are exempt from liability when natural disasters are the proximate and only cause of loss, provided they exercise due diligence, which the shipmaster demonstrated through various protective measures during the typhoon.