ISABELA ROQUE, doing business under the name and style of Isabela Roque Timber
Enterprises and ONG CHIONG, petitioners, vs. HON. INTERMEDIATE APPELLATE COURT
and PIONEER INSURANCE AND SURETY CORPORATION, respondents.
G.R. No. L-66935 Nov. 11, 1985
DOCTRINE:
In marine insurance (which includes cargo), the implied warranty of seaworthiness
attaches to the shipper whether shipowner or not.From the above-quoted provisions,
there can be no mistaking the fact that the term "cargo" can be the subject of marine
insurance and that once it is so made, the implied warranty of seaworthiness
immediately attaches to whoever is insuring the cargo whether he be the shipowner or
not.
Moreover, the fact that the unseaworthiness of the ship was unknown to the insured is
immaterial in ordinary marine insurance and may not be used by him as a defense in
order to recover on the marine insurance policy.
The cargo owner is required to look for a common carrier that keeps its vessels
seaworthy. In the absence of stipulation that insurer answers for perils of the ship,
insurance cannot be recovered on losses from perils of the ship.
Loss of cargo is not due to perils of the sea where there was no typhoon, but ordinary
strong wind and waves and where cargo was negligently handled by ship's crew.
Barratry" defined.Barratry as defined in American Insurance Law is "any wilful
misconduct on the part of master or crew in pursuance of some unlawful or fraudulent
purpose without the consent of the owners, and to the prejudice of the owner's interest,"
Barratry necessarily requires a willful and intentional act in its commission. No honest
error of judgment or mere negligence, unless criminally gross, can be barratry.
FACTS:
Isabela Roque (Roque of Isabela Roque Timber Enterprises) hired the Manila
Bay Lighterage Corp. (Manila Bay) to load and carry its logs from Palawan to North
Harbor, Manila. The logs were insured with Pioneer Insurance and Surety Corp.
(Pioneer). The logs never reached Manila due to certain circumstances (as alleged by
Roque and found by the appellate court), such as the fact that the barge was not
seaworthy that it developed a leak, that one of the hatches were left open causing water
to enter, and the absence of the necessary cover of tarpaulin causing more water to enter
the barge.
When Roque demanded payment from Pioneer, the latter refused on the
ground that its liability depended upon the Total Loss by Total Loss of Vessel Only.
The trial court ruled in favor of Roque in the civil complaint filed by the latter
against Pioneer, but the decision was reversed by the appellate court.
Issue:
1. Whether in cases of marine insurance, there is a warranty of seaworthiness by
the cargo owner.
2. Whether the loss of the cargo was due to perils of the sea, not perils of the ship.
Held:
1. Yes, there is. The liability of the insurance company is governed by law. Section
113 of the Insurance Code provides that In every marine insurance upon a
ship or freight, or freightage, or upon anything which is the subject of
marine insurance, a warranty is implied that the ship is seaworthy.
Hence, there can be no mistaking the fact that the term "cargo" can be the
subject of marine insurance and that once it is so made, the implied warranty of
seaworthiness immediately attaches to whoever is insuring the cargo whether
he be the shipowner or not.
Moreover, the fact that the unseaworthiness of the ship was unknown to the
insured is immaterial in ordinary marine insurance and may not be used by
him as a defense in order to recover on the marine insurance policy.
2. As to the second issue, by applying Sec. 113 of the Insurance Code, there is no
doubt that the term 'perils of the sea' extends only to losses caused by sea
damage, or by the violence of the elements, and does not embrace all
losses happening at sea; it is said to include only such losses as are
of extraordinary nature, or arise from some overwhelming power, which
cannot be guarded against by the ordinary exertion of human skill and
prudence.
It is also the general rule that everything which happens thru the inherent vice
of the thing, or by the act of the owners, master or shipper, shall not be reputed
a peril, if not otherwise borne in the policy.
It must be considered to be settled, furthermore, that a loss which, in the
ordinary course of events, results from the natural and inevitable action of the
sea, from the ordinary wear and tear of the ship, or from the negligent failure of
the ship's owner to provide the vessel with proper equipment to convey the
cargo under ordinary conditions, is not a peril of the sea.
Such a loss is rather due to what has been aptly called the "peril of the ship."
The insurer undertakes to insure against perils of the sea and similar perils, not
against perils of the ship. Neither barratry can be used as a ground by Roque.
Barratry as defined in American Insurance Law is "any willful misconduct on
the part of master or crew in pursuance of some unlawful or fraudulent
purpose without the consent of the owners, and to the prejudice of the owner's
interest." Barratry necessarily requires a willful and intentional act in its
commission. No honest error of judgment or mere negligence, unless criminally
gross, can be barratry.
In the case at bar, there is no finding that the loss was occasioned by the willful
or fraudulent acts of the vessel's crew. There was only simple negligence or
lack of skill.