G.R. No. 98243 July 1, 1992
ALEJANDRO ARADA, doing business under the name and style “SOUTH NEGROS ENTERPRISES”, petitioner, vs. HONORABLE COURT OF APPEALS, respondents.

FACTS

Petitioner Alejandro Arada, proprietor of South Negros Enterprises, is engaged in small-scale shipping as a common carrier. On March 24, 1982, he entered into a contract with private respondent San Miguel Corporation to transport 9,824 cases of beer empties valued at P176,824.80 from San Carlos City, Negros Occidental to Mandaue City using his vessel, M/L Maya. On March 24, 1982, the Philippine Coast Guard denied clearance for the vessel to depart due to a typhoon. Clearance was granted on March 25, 1982, as the sea was calm. During the voyage, a typhoon developed, the vessel’s rudder was destroyed, and it sank on March 27, 1982. The crew filed a marine protest. The Board of Marine Inquiry and later the Commandant of the Philippine Coast Guard exonerated the owner/operator, officers, and crew from any administrative liability. San Miguel Corporation filed a complaint in the Regional Trial Court for recovery of the cargo’s value based on breach of contract of carriage. The RTC dismissed the claim. The Court of Appeals reversed the RTC decision, ordering petitioner to pay the value of the lost cargo with interest. Petitioner contends he was acting as a private carrier and that the factual findings of the marine boards exonerating him are binding on the court.

ISSUE

Whether or not petitioner is liable for the value of the lost cargoes.

RULING

Yes, petitioner is liable. The Supreme Court affirmed the decision of the Court of Appeals. Petitioner was acting as a common carrier, as admitted by his son and officer-in-charge, Eric Arada, who testified that South Negros Enterprises was engaged in the business of common carriers. Common carriers are bound to observe extraordinary diligence in the carriage of goods. The loss of the goods raises a presumption of fault or negligence on the part of the carrier. To be exempt from liability due to a natural disaster, the carrier must prove the disaster was the proximate and only cause of the loss and that it exercised due diligence to prevent or minimize the loss. The Court found that the master of the vessel, Vivencio Babao, was negligent. Knowing a typhoon was impending when clearance was denied on March 24, he failed to ascertain the typhoon’s direction or monitor weather conditions before departing on March 25. Furthermore, the crew did not have the required qualifications under the Philippine Merchant Marine Officers Law. The exoneration by the Board of Marine Inquiry and the Philippine Coast Guard pertained only to administrative liability and does not absolve the carrier from civil liability for failure to exercise extraordinary diligence.