Fgu Insurance Corporation v. The Court of Appeals

Summary

This consolidated case involved SMC's claim against ANCO partnership for breach of contract of carriage when 29,760 cases of beer cargo were lost during typhoon Sisang in October 1979. The Supreme Court affirmed ANCO's liability, rejecting the res judicata defense based on a prior vessel insurance case, finding the cases involved different parties, subject matter, and causes of action. The Court upheld findings that ANCO's representatives exhibited blatant negligence by leaving an engine-less barge during an impending storm without tugboat assistance, making this the proximate cause of loss rather than the natural disaster alone. However, the Court modified the decision by exonerating FGU Insurance Corporation from liability under the marine insurance policy, distinguishing between ordinary negligence (covered) and gross negligence amounting to misconduct (not covered). The decision establishes important precedents on common carriers' extraordinary diligence requirements, insurance coverage limitations for gross negligence, and res judicata application in related maritime cases.