18. Mindanao Terminal and Brokerage Service, Inc. vs.
Phoenix Assurance Mindanao Terminal is charged w/ the loading of the cargoes had acted
Company of New York/McGee & Co., Inc.
1. Del Monte contracted petitioner Mindanao Terminal, a stevedoring
company, to load & stow shipment of cartons of bananas & pineapples,
which belonged to Del Monte Produce into the cargo hold of the vessel
MV Mistrau. It was then transported to Korea in favor of consignee Taegu
Industries.
2. Del Monte Produce insured the shipment under an open cargo policy w/ 2
insurance companies Phoenix & McGee.
3. Mindanao loaded & stowed the cargoes aboard the vessel. Upon arriving
at Korea and upon discharge it was discovered that some of the cargo was
in bad condition. The cargo damage surveyor of Korea, Byeong, surveyed &
reported that 16,069 out of 146,288 cartons of bananas & 2,185 out of 15k
cartons were damaged & longer had commercial value.
4. Del Monte produce filed a claim against the insurance companies. Latter
instituted action for damages against Mindanao claiming it was negligent
in handling the cargoes.
5. RTC: Did not hold Mindanao liable since it only loaded the cargoes on
board the vessel and this was done under the supervision of the ships
officer who would not have accepted the cargoes on board the vessel &
signed the foremans report unless they were properly arranged & tightly
secured to withstand voyage. And that the cargoes were damages due to
the typhoon w/c the vessel encountered during its voyage. And that the
insurance companies had no cause of action against Mindanao because it
was Del Monte who contracted Mindano and not Del Monte Produce
(insured).
6. CA: Reversed. Mindanao liabile. Damages was due to improper stowage by
Mindano and as stevedore of the cargo, it has the duty to exercise
extraordinary diligence in loading & stowing the cargoes. The cause of
action of the insurance companies against Mindanao can be based on
quasi-delict under 2176 NCC even if there is no contractual relationship
b/w Mindanao & Del Monte Produce.
ISSUE:
Is a stevedoring a common carrier? NO.
What degree of diligence in the conduct of business should it exercise? Diligence of
a good father of the family / ordinary diligence
HELD:
Art. 1173 NCC states that if the law / contract doesnt state the degree of diligence
to be observed in performing an obligation, then it should be which is expected of a
good father of a family or ordinary diligence.
merely as labor provider. No specific law that imposes it a higher degree
of diligence that ordinary diligence for a stevedoring company.
It was not proven by the insurance companies that Mindano was bound by
a contract stipulation to observe a higher degree of diligence that that of
ordinary diligence. Hence, following Art 1173,
Mindanao, stevedoring company, is only required to observe ordinary
diligence in loading & stowing cargoes into the vessel.
Distinction b/w Arrestre & Stevedoring
ARRASTRE STEVEDORING
handling of cargo on the handling of cargo in the holds of the
wharf/between the establishment of vessel / between the ships tackle &
the consignee or shipper & ships tackle hold of the vessel
responsibility lasts until delivery of the responsibility of stevedore ends upon
cargo to the consignee the loading & stowing of the cargo in
the vessel
usually performed by longshoremen
Here, Mindanao was performing purely stevedoring function while the
case cited by the CA wherein Summa was a party thereto was performing
arrestre function.
Mindanao as stevedore was only charged w/ the loading & stowing of the
cargoes from the pier to the shipss cargo hold. It was NEVER a
CUSTODIAN of the shipment of Del Monte Produce.
A stevedore is not a common carrier for it does not transport goods or
passengers; it is not akin to a warehouseman for it does not store goods
for profit.
The public policy consideration upon common carrier / warehouseman is
not present in stevedoring w/c mainly provides labor in loading & stowing
cargoes for its clients. And that the public is still protected by our laws on
contract & on quasi-delict.
The insurance company failed to prove that Mindanao acted negligently.
Mindano only loaded the cargoes onboard the vessel. But the materials,
ropes used in lashing & rigging the cargoes were all provided by the vessel
w/c meet the industry standard.
The loading & stowing was under the supervision of the ship officers. The
latter would not have accepted the cargoes on board the vessel if they
were not properly arranged and tightly secured to withstand the voyage in
open seas.
 Minadano is only tasked to load and stow the shipments of fresh banana
and pineapple of Del Monte Produce aboard the M/V Mistrau. How and
where it should load and stow a shipment in a vessel is wholly dependent
on the shipper and the officers of the vessel.
The damage was due to the stormy weather which caused the shipments
in the cargo hold to collapse.
it is clear that Mindanao Terminal had duly exercised the required degree
of diligence in loading and stowing the cargoes, which is the ordinary
diligence of a good father of a family.

As to the issue on the cause of action of the insurance company against Mindanao:
The action is based on quasi-delict due to the negligence of the loading &
stowing the cargoes belonging to Del Monte Produce.
Even if the insurance companies were only subrogated in the rights of Del
Monte Produce, they still have a cause of action against Mindano since a
liability for tort may still arise even under a contract, even the tort is what
caused the breach of the contract.
In this case, the insurance companies were not suing for damages for
injuries arising from the breach of contract of service but from the alleged
negligence of Mindano in handling the cargoes. Hence, even if there is no
contract b/w Del Monte Produce & Mindano, the allegation of negligence
is sufficient to establish a cause of action arising from a quasi-delict.