DELSAN TRANSPORT LINES, INC., Petitioner, vs. AMERICAN HOME ASSURANCE CORPORATION, Respondent.
FACTS
Petitioner Delsan Transport Lines, Inc., a common carrier, received a shipment of diesel oil for transport and delivery to Caltex Philippines, Inc. in Bacolod City. The cargo was insured by respondent American Home Assurance Corporation (AHAC). During unloading operations at the destination port, unknown persons cut the vessel’s mooring line, causing the vessel to drift. This severed the delivery hose, resulting in a spillage of diesel oil. Concurrently, due to a failure in communication from the vessel to the shore, a backflow of oil from the shore tank occurred. AHAC, as insurer, indemnified Caltex for both losses and, as subrogee, filed separate complaints against Delsan to recover the amounts paid.
The Regional Trial Court consolidated the cases and ruled in favor of AHAC, holding Delsan liable as a common carrier for failing to exercise extraordinary diligence. The Court of Appeals affirmed the trial court’s decision, deleting only the award for attorney’s fees. Delsan appealed to the Supreme Court, arguing it should be exempt from liability under Article 1734 of the Civil Code and that Caltex was contributorily negligent.
ISSUE
Whether petitioner Delsan, as a common carrier, is liable for the loss of the cargo due to spillage and backflow.
RULING
Yes, Delsan is liable. The Court affirmed the decisions of the lower courts. As a common carrier, Delsan is bound to observe extraordinary diligence in the vigilance over the goods it transports from the time of receipt until their delivery to the consignee. The loss occurred during the unloading process, which is a phase of the contract of carriage where the carrier’s extraordinary responsibility persists, as delivery to the consignee was not yet completed.
Delsan failed to prove that the losses were due to any of the exempting causes under Article 1734 of the Civil Code, such as a fortuitous event. The cutting of the mooring line, while an act of a third party, does not automatically absolve the carrier. The carrier must demonstrate that it exercised extraordinary diligence to prevent such an occurrence, which Delsan did not establish. Furthermore, the backflow incident was a direct consequence of the vessel’s inability to promptly communicate the emergency to shore personnel, indicating a lapse in the carrier’s duty of supervision and care during the discharging operation. The defense of contributory negligence on the part of the shipper was also rejected, as Delsan did not sufficiently prove that Caltex’s actions were the proximate cause of the loss. Consequently, Delsan is presumed negligent and liable for the damages.
