Central Shipping Company v. Insurance Company of North America

Summary

This landmark maritime law case establishes key principles for common carrier liability in the Philippines. Central Shipping Company's vessel M/V Central Bohol sank during a voyage from Palawan to Manila, resulting in total loss of 376 pieces of logs worth P3 million. The Supreme Court rejected the carrier's defense of fortuitous event, finding that the southwestern monsoon encountered was not a 'storm' under Civil Code Article 1734(1) and that improper cargo stowage contributed to the loss. The Court emphasized that carriers cannot escape liability by invoking natural disasters when their own negligence contributes to the loss. The decision reinforces the presumptive fault rule against common carriers and their duty of extraordinary diligence in cargo protection. It also clarifies that the doctrine of limited liability under the Code of Commerce does not apply when the shipowner and captain are concurrently negligent. The case provides important guidance on burden of proof requirements for carriers claiming exemption from liability due to natural disasters.