G.R. No. 206892 & 207035, February 03, 2021
C.V. Gaspar Salvage & Lighterage Corporation, Petitioner, vs. LG Insurance Company, Ltd., (United States Branch)/WM H. McGee & Co., Inc., Respondents.

[G.R. No. 207035]
Fortune Brokerage and Freight Services, Inc., Petitioner, vs. LG Insurance Company, Ltd. (United States Branch) and WM H. McGee & Co., Inc., C.V. Gaspar Salvage & Lighterage Corporation, and Venancio Mesina, Respondents.

FACTS

On August 5, 1997, Sunkyong America, Inc. shipped 23,842 bags of Peruvian fishmeal from Peru to its consignee, Great Harvest, in Manila. The shipment was insured against all risks by LG Insurance Company, Ltd. (U.S. Branch), through its American manager, WM H. McGee & Co., Inc. Great Harvest engaged Fortune Brokerage as its customs broker. The shipment arrived at the Port of Manila on September 16, 1997, and was discharged into four barges owned by C.V. Gaspar for delivery to Great Harvest’s warehouse. While moored at the Pasig River, the cargo on barge “AYNA-1” got wet, damaging 3,662 bags of fishmeal. Great Harvest filed claims against Fortune Brokerage and C.V. Gaspar, which were ignored. Great Harvest then claimed against its insurance with LG Insurance, which paid the claim. Great Harvest executed a subrogation receipt in favor of LG Insurance. LG Insurance and WM H. McGee demanded payment from Fortune Brokerage and C.V. Gaspar, and upon refusal, filed an action for damages. The Regional Trial Court (RTC) ruled in favor of LG Insurance and WM H. McGee, holding Fortune Brokerage and C.V. Gaspar jointly and solidarily liable. The Court of Appeals (CA) affirmed the RTC decision but deleted the award of attorney’s fees. C.V. Gaspar and Fortune Brokerage filed separate petitions for review.

ISSUE

1. Whether Fajardo Law Office, through Atty. Beda Fajardo, was authorized to file the Complaint and Amended Complaint and sign the Verification and Certification on Non-Forum Shopping on behalf of LG Insurance and WM H. McGee.
2. Whether there was a valid subrogation of rights between Great Harvest and LG Insurance and WM H. McGee.
3. Whether barge AYNA-1 is a common carrier.
4. Whether C.V. Gaspar and Fortune Brokerage should be held solidarily liable to LG Insurance and WM H. McGee.

RULING

1. Yes. LG Insurance, a foreign corporation not doing business in the Philippines, may sue on isolated transactions. WM H. McGee, as its American manager, designated Fajardo Law Office and Atty. Beda Fajardo as its resident agent via a Special Power of Attorney, which necessarily included the authority to sign the Verification and Certification of Non-Forum Shopping. The belated filing of the certification with the Amended Complaint constituted substantial compliance with the Rules of Court.
2. Yes. Under Article 2207 of the Civil Code, an insurer who pays a claim is subrogated to the rights of the insured against the wrongdoer. The subrogation receipt executed by Great Harvest in favor of LG Insurance validly transferred its rights. The payment by LG Insurance was not a donation but indemnity under the insurance contract.
3. Yes. AYNA-1, a barge offered to the public for the transport of cargo by water for compensation, is a common carrier. As such, C.V. Gaspar, its owner/operator, is bound to observe extraordinary diligence in the vigilance over the goods transported. The damage to the cargo due to water ingress through a hole in the barge’s plating gave rise to a presumption of negligence, which C.V. Gaspar failed to rebut.
4. Yes. C.V. Gaspar, as a common carrier, is liable for the damage due to its failure to overcome the presumption of negligence. Fortune Brokerage, as a customs broker whose business includes the transportation of goods, is also considered a common carrier. It assumed full responsibility for any damage to the cargo under the service contract signed by its authorized representative, Venancio Mesina. The RTC and CA correctly held them jointly and severally liable.
The petitions were DENIED. The Decision and Resolution of the Court of Appeals were AFFIRMED.