G.R. No. 162467 ; May 8, 2009
Mindanao Terminal and Brokerage Service, Inc. vs. Phoenix Assurance Company of New York/McGee & Co., Inc.

FACTS

Del Monte Philippines, Inc. contracted petitioner Mindanao Terminal, a stevedoring company, to load and stow a shipment of bananas and pineapples belonging to Del Monte Fresh Produce International, Inc. onto the vessel M/V Mistrau for transport to Korea. The shipment was insured by respondents Phoenix Assurance and its agent McGee & Co. Upon arrival in Korea, a portion of the cargo was found damaged and unfit for commerce. The insurers paid the consignor’s claim and were subrogated to its rights.
Respondents then filed a complaint for damages against Mindanao Terminal in the Regional Trial Court (RTC). The RTC dismissed the complaint, finding that Mindanao Terminal loaded the cargo under the ship officers’ supervision and that the damage was due to a typhoon encountered during the voyage. It also held that respondents had no cause of action against Mindanao Terminal due to a lack of direct contractual relationship, as the stevedoring contract was with a different Del Monte entity. The Court of Appeals reversed the RTC, ruling that the damage resulted from improper stowage and that a cause of action existed under quasi-delict.

ISSUE

The core issues are: (1) whether respondents have a cause of action against Mindanao Terminal despite the absence of a direct contract; and (2) whether Mindanao Terminal was negligent in its stevedoring services.

RULING

The Supreme Court granted the petition and reinstated the RTC’s dismissal of the complaint. On the first issue, the Court held that a cause of action based on quasi-delict under Article 2176 of the Civil Code can exist independently of contract. Therefore, the insurers, as subrogees, could potentially sue the stevedore for alleged negligence even without a direct contractual link to the cargo owner.
However, on the second and determinative issue, the Court found that respondents failed to prove by preponderant evidence that Mindanao Terminal was negligent. The legal logic is twofold. First, the degree of diligence required of a stevedoring company is not the extraordinary diligence of a common carrier, but the ordinary diligence of a good father of a family in the conduct of its business. Second, the evidence did not establish that improper stowage caused the damage. The survey report indicated the damage was likely due to the typhoon and the vessel’s inherent motion at sea. The ship’s officers, who supervised the loading and accepted the cargo, did not report any improper stowage. Consequently, the presumption of negligence was not triggered, and the burden of proof remained with the plaintiffs, which they did not discharge. The award of attorney’s fees and costs to Mindanao Terminal by the RTC was also upheld.