Roque v. Intermediate Appellate Court

Roque v. Intermediate Appellate Court

G.R. No. L-66935 Nov. 11, 1985 Justice Gutierrez, Jr. Facts:

Isabela Roque (Roque of Isabela Roque Timber Enterprises) hired the Manila Bay Lighterage Corp. (Manila Bay) to load and carry its logs from Pala wan to North Harbor, Manila. The logs were insured with Pioneer Insurance and Surety Corp. (Pioneer). The logs never reached Ma nila due to certain circumstances (a s 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 ca using 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, but 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:

WON in cases of marine insurance, there is a warranty of seaworthiness by the cargo owner; WON the loss of the cargo was due to perils of the sea, not perils of the ship. Held:

Yes, there is. The liability of the insurance company is governed by law. Section 113 of the Insurance Code provides that “In “ 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 i nsurance and that once it is s o 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 u sed by him as a defense in order to recover on the marine insurance policy. As to the second issue, by a pplying 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,  nature, or arise from some overwhelming power , which cannot be guarded a gainst by the ordinary exertion of human skill and prudence. t is also the general rule that everything which happens thru the inherent 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, f rom 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. N either 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 o ccasioned by the willful or fraudulent acts of the vessel's crew. There was only simple negligence or lack of skill.