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    DELSAN TRANSPORT LINES V CA

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    valeryanns
    1) Delsan Transport Lines contracted with Caltex Philippines to transport fuel oil from Batangas to Zamboanga City. The fuel oil was insured by American Home Assurance. During transport, Delsan's vessel MT Maysun sank, causing the loss of the entire cargo. 2) American Home Assurance paid Caltex for the loss. It then sought recovery from Delsan Transport Lines through subrogation. The Supreme Court ruled that as the insurer, American Home Assurance had the right to exercise legal remedies against Delsan as the common carrier. 3) The Court also ruled that Delsan failed to prove the sinking was due to force majeure as it claimed

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    DELSAN TRANSPORT LINES V CA

    Uploaded by

    valeryanns
    2K views1 page
    1) Delsan Transport Lines contracted with Caltex Philippines to transport fuel oil from Batangas to Zamboanga City. The fuel oil was insured by American Home Assurance. During transport, Delsan's vessel MT Maysun sank, causing the loss of the entire cargo. 2) American Home Assurance paid Caltex for the loss. It then sought recovery from Delsan Transport Lines through subrogation. The Supreme Court ruled that as the insurer, American Home Assurance had the right to exercise legal remedies against Delsan as the common carrier. 3) The Court also ruled that Delsan failed to prove the sinking was due to force majeure as it claimed

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    DELSAN TRANSPORT LINES v CA

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    DELSAN TRANSPORT LINES v CA

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    1) Delsan Transport Lines contracted with Caltex Philippines to transport fuel oil from Batangas to Zamboanga City. The fuel oil was insured by American Home Assurance. During transport, Delsan's vessel MT Maysun sank, causing the loss of the entire cargo. 2) American Home Assurance paid Caltex for the loss. It then sought recovery from Delsan Transport Lines through subrogation. The Supreme Court ruled that as the insurer, American Home Assurance had the right to exercise legal remedies against Delsan as the common carrier. 3) The Court also ruled that Delsan failed to prove the sinking was due to force majeure as it claimed

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    Download as doc, pdf, or txt
    2K views1 page

    DELSAN TRANSPORT LINES V CA

    Uploaded by

    valeryanns
    1) Delsan Transport Lines contracted with Caltex Philippines to transport fuel oil from Batangas to Zamboanga City. The fuel oil was insured by American Home Assurance. During transport, Delsan's vessel MT Maysun sank, causing the loss of the entire cargo. 2) American Home Assurance paid Caltex for the loss. It then sought recovery from Delsan Transport Lines through subrogation. The Supreme Court ruled that as the insurer, American Home Assurance had the right to exercise legal remedies against Delsan as the common carrier. 3) The Court also ruled that Delsan failed to prove the sinking was due to force majeure as it claimed

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    of 1

    G.R. No. 127897.

    November 15, 2001


    DELSAN TRANSPORT LINES, INC., vs. THE HON. COURT OF APPEALS and
    AMERICAN HOME ASSURANCE CORPORATION,
    FACTS: The facts show that Caltex Philippines (Caltex for brevity) entered into a contract of
    affreightment with the petitioner, Delsan Transport Lines, Inc., for a period of one year whereby
    the said common carrier agreed to transport Caltexs industrial fuel oil from the Batangas-Bataan
    Refinery to different parts of the country. Under the contract, petitioner took on board its vessel,
    MT Maysun 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the Caltex Oil
    Terminal in Zamboanga City. The shipment was insured with the private respondent, American
    Home Assurance Corporation. During the voyage, the vessel sank. The insurer paid Caltex and
    now seeks recovery under the right of subrogation. The trial court found the vessel seaworthy
    and the incident was caused by force majeure hence, exempt from liability. CA reversed the trial
    courts decision, explaining that petitioner was liable as a common carrier due to lack of
    manpower and absent any explanation why the vessel sank.
    ISSUE: Whether or not there was an implied admission of seaworthiness thus precluding the
    right of recovery by private respondent as insurer.
    Whether or not the non-presentation of the marine insurance policy bars the complaint for
    recovery of sum of money for lack of cause of action.
    RULING: No. The payment made by the private respondent for the insureds value of the lost
    cargo operates as waiver of its (private respondent) right to enforce the term of the implied
    warranty against Caltex under the marine insurance policy. However, the same cannot be validly
    interpreted as an automatic admission of the vessels seaworthiness by the private respondent as
    to foreclose recourse against the petitioner for any liability under its contractual obligation as a
    common carrier. The fact of payment grants the private respondent subrogatory right which
    enables it to exercise legal remedies that would otherwise be available to Caltex as owner of the
    lost cargo against the petitioner common carrier.
    From the nature of their business and for reasons of public policy, common carriers are bound to
    observe extraordinary diligence in the vigilance over the goods and for the safety of passengers
    transported by them, according to all the circumstance of each case.In the event of loss,
    destruction or deterioration of the insured goods, common carriers shall be responsible unless the
    same is brought about, among others, by flood, storm, earthquake, lightning or other natural
    disaster or calamity. In all other cases, if the goods are lost, destroyed or deteriorated, common
    carriers are presumed to have been at fault or to have acted negligently, unless they prove that
    they observed extraordinary diligence. The said presumption was not overturned by petitioner in
    this case. Hence, private respondent as insurer can exercise its right of subrogation against
    petitioner.
    Thus, as the appellate court correctly ruled, petitioners vessel, MT Maysun, sank with its entire
    cargo for the reason that it was not seaworthy. There was no squall or bad weather or extremely
    poor sea condition in the vicinity when the said vessel sank.
    Anent the second issue, it is our view and so hold that the presentation in evidence of the marine
    insurance policy is not indispensable in this case before the insurer may recover from the
    common carrier the insured value of the lost cargo in the exercise of its subrogatory right. The
    subrogation receipt, by itself, is sufficient to establish not only the relationship of herein private
    respondent as insurer and Caltex, as the assured shipper of the lost cargo of industrial fuel oil,
    but also the amount paid to settle the insurance claim. The right of subrogation accrues simply
    upon payment by the insurance company of the insurance claim.

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