G.R. No. L-5203; April 18, 1956
Standard Vacuum Oil Company, plaintiff-appellant, vs. Luzon Stevedoring Co., Inc., defendant-appellee.

FACTS

Plaintiff Standard Vacuum Oil Company entered into a contract with defendant Luzon Stevedoring Co., Inc., for the defendant to transport 2,916.44 barrels of bulk gasoline from Manila to Iloilo. The gasoline was loaded onto the defendant’s barge No. L-522. The defendant’s tugboat “Snapper” towed the barge, along with three other barges, on February 2, 1947. On February 4, 1947, at about 3:00 a.m., the tugboat’s engine stopped due to a broken idler. The defendant was notified by radio. The tugboat attempted to anchor near Elefante Island, but the water was too deep. The weather worsened in the afternoon, with increasing wind and waves. The anchor chains of the tugboat and barges broke, causing them to drift and be dashed against the rocks. The tugboat sank, and barge L-522 was damaged, causing the gasoline to leak out. The defendant’s other tugboat, “Tamban,” arrived after the gasoline had been lost. The plaintiff filed an action to recover damages. The trial court dismissed the case, ruling the loss was due to a fortuitous event. The plaintiff appealed.

ISSUE

Whether the defendant carrier has sufficiently proven that its failure to deliver the gasoline was due to a fortuitous event or circumstances beyond its control, thereby exempting it from liability under Article 361 of the Code of Commerce.

RULING

The Supreme Court reversed the trial court’s decision. The defendant failed to prove that the loss was due to a fortuitous event. The Court found the defendant negligent on several grounds: (1) The tugboat “Snapper” was a surplus property put into operation without a dry-dock overhaul and without complete, requisite equipment, making it unseaworthy. (2) The tugboat failed to carry necessary spare parts, such as spare chains, which was a standard precaution. (3) The tugboat was manned by an incomplete and incompetent crew that did not meet the legal requirements for their positions and licenses. (4) The defendant did not exercise due diligence in rescue efforts; it did not have an adequate, properly equipped tugboat ready for emergencies, and the “Tamban” sent was inadequate and arrived too late. The breaking of the idler may have been an accident, but the subsequent disaster and loss were attributable to the defendant’s lack of reasonable diligence and precaution. Therefore, the defendant is liable for damages. The Court ordered the defendant to pay the plaintiff the sum of P75,578.50 with legal interest from the filing of the complaint.