The Philippine American General Insurance Co. v. Mcg Marine Services

Summary

Philippine American General Insurance Co. insured San Miguel Corporation's cargo worth P5.8 million for transport via M/V Peatheray Patrick-G. The vessel sank on March 3, 1987 due to strong winds and huge waves off Surigao del Sur, causing total cargo loss. After paying the insurance claim, the insurer sued the vessel owner and marine services company under subrogation. The trial court found defendants liable, but the Court of Appeals reversed, finding the loss due to fortuitous events. The Supreme Court affirmed, ruling that the strong winds and enormous waves constituted an unforeseeable fortuitous event under Article 1734 of the Civil Code. Since the vessel was seaworthy and properly manned when it departed, and the natural disaster was the sole proximate cause of the loss with no human agency involved, the defendants were absolved of liability.