G.R. No. 47004. March 8, 1989.
MARITIME COMPANY OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS and RIZAL SURETY & INSURANCE CO., respondents.

FACTS

Rizal Surety & Insurance Co., as insurer, paid the consignee, Acme Electrical Manufacturing Company, for 800 packages of PVC compound lost in transit aboard the SS Doña Nati. The vessel, owned by the National Development Company (NDC) and operated by its agent, Maritime Company of the Philippines, collided with the M/V Yasushima Maru in Nagoya Bay, resulting in the cargo’s destruction. Rizal Surety, as subrogee, sued NDC and Maritime Co. in the Court of First Instance of Manila for recovery. The trial court dismissed the complaint, ruling that liability lay with the allegedly negligent Japanese vessel, M/V Yasushima Maru, and not with the carrier defendants.
The Court of Appeals reversed the trial court’s decision. It found that Maritime Co. was a ship agent under the Code of Commerce, not merely a civil law agent, and was thus properly sued. It further held that the SS Doña Nati failed to exercise due diligence to avoid the collision. Consequently, the appellate court ordered NDC and Maritime Co. to pay Rizal Surety jointly and severally. Maritime Co. appealed to the Supreme Court, contesting its classification as a ship agent and arguing the loss was due solely to the other vessel’s fault.

ISSUE

The primary issue is whether Maritime Company of the Philippines, as the ship agent and operator of the SS Doña Nati, can be held jointly and severally liable with the shipowner, NDC, for the loss of the cargo under the contract of carriage.

RULING

The Supreme Court affirmed the decision of the Court of Appeals, holding Maritime Co. jointly and severally liable with NDC. The Court ruled that Maritime Co. was indeed a ship agent under Article 586 of the Code of Commerce, as it was entrusted with provisioning and representing the vessel. The Bill of Lading clearly indicated Maritime Co. as “Agent,” with Fuji Asano Kaiun Co., Ltd. in Japan being its sub-agent. This established Maritime Co.’s direct role in the contract of carriage.
On the substantive liability, the Court applied the Civil Code provisions on common carriers, which impose extraordinary diligence for the safe transport of goods. The loss did not fall under any of the exclusive exempting causes listed in Article 1734. The Court upheld the factual finding of the Court of Appeals that the SS Doña Nati did not exercise even due diligence to avoid the collision, making the carrier liable. The cause of action arose from the contract of carriage evidenced by the bill of lading, not purely from the maritime collision. Therefore, the carrier and its agent could not escape liability by blaming the third-party vessel. The defense of prescription was also rejected.