Delsan Transport Lines v. American Home Assurance Corporation

Summary

Delsan Transport Lines operated MT Larusan vessel carrying diesel oil from Bataan to Bacolod for Caltex. During unloading, unknown persons cut the port bow mooring line, causing the vessel to drift and damage the delivery system, resulting in oil spillage into the sea and backflow from shore tanks. American Home Assurance Corporation, having paid Caltex's insurance claims totaling over P2.4 million, sued Delsan as subrogee. The Supreme Court affirmed lower courts' findings that Delsan, as common carrier, failed to exercise extraordinary diligence required by law and was liable for the cargo losses. The Court rejected Delsan's defenses of contributory negligence and completed delivery, emphasizing that common carrier responsibility continues until complete delivery and that the proximate cause was Delsan's failure to promptly communicate the emergency to shore personnel. This case reinforces the strict liability standards for common carriers under Philippine law.