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 the loss was due to the fault of the other vessel, M/V Yasushima Maru, and thus liability lay with its owners, not the defendants.
The Court of Appeals reversed the trial court’s decision. It found that Maritime Co. was indeed the ship agent under the Code of Commerce, as evidenced by the bill of lading which identified it as “Agent” for various regions, including Japan, with Fuji Asano Kaiun Co., Ltd. acting as its sub-agent. The appellate court further held that the SS Doña Nati did not exercise due diligence to avoid the collision. Consequently, it ordered NDC and Maritime Co. to pay Rizal Surety jointly and severally.

ISSUE

The primary issue is whether Maritime Company of the Philippines, as a ship agent, 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. The Court held that Maritime Co. was correctly characterized as a ship agent under Article 586 of the Code of Commerce, being the entity entrusted with provisioning or representing the vessel. The bill of lading explicitly identified Maritime Co. as “Agent,” with Fuji Asano as a sub-agent, making it directly responsible. As a common carrier, it is bound to observe extraordinary diligence in the carriage of goods. The loss did not fall under any of the exempting causes listed in Article 1734 of the Civil Code. The finding of the Court of Appeals that the SS Doña Nati failed to exercise due diligence to avoid the collision is conclusive and cannot be reviewed. The cause of action stemmed from a breach of the contract of carriage evidenced by the bill of lading, not merely from the collision itself. Since the carrier failed to overcome the presumption of negligence, liability attached. Furthermore, as insurer who paid the consignee, Rizal Surety was properly subrogated to the latter’s rights. Therefore, Maritime Co. and NDC are jointly and severally liable for the insured value of the lost cargo.