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Tabacalera Insurance Co vs North Front Shipping

Services and CA


FACTS:
August 2, 1990 on board North Front 777 (owned
by North Front Shipping Services)
o Cargo: 20,234 sacks of corn grains worth
Php3,500,640
o Consigned to Republic Four Mills Corp
o Bill Lading No. 001
o Insured w/ Prudential Guarantee and
Assurance Inc and New Zealand Insurance Co
o Inspected by representatives of shipper and
was found fit to carry the merchandise
o Cargo covered with tarpaulins and wooden
boards
Shipment is from Cagayan de Oro to Manila and
arrived on August 16, 1990
Republic Flour Mills Corp was advised of the
arrival but did not immediately commenced
unloading
Unloading stopped on certain days
o Variable weather conditions
o No particular reason
Unloading finished on September 5, 1990
o Shortage of 26.333 metric tons after
unloading
o Remaining merchandise was already moldy,
rancid and deteriorating
Precision Analytical Services was hired to examine
the corn grains and determine cause of
deterioration
o Corn grains had 18.56% moisture content
o Wetting due to contact with salt water
o Molding can still be arrested by drying
Republic Flour Mills Corp rejected the entire cargo
and demanded North Front to pay the damages it
suffered but North Front refused to pay so the
insurance companies paid Php 2,189,433.40
Insurance companies filed complaint against
North Front and hired Marine Cargo Adjusters to
conduct survey on the ship
o Cracks were found in the bodega of the
barge and heavy concentration of molds on
the tarpaulins and wooden boards
o No seals in the hatches
o Tarpaulins not brand new and there were
patches in it, which makes it possible for
water to seep in
o Bulkhead of the barge was rusty
Captain Solomon Villanueva, master of the vessel,
claims that they cannot be held liable because:
o Barge was inspected by shippers
representative prior to the actual loading
and was found adequate and seaworthy
o Issued a permit to sail by Coast Guard
o Tarpaulins were doubled and brand new
o Hatches were properly sealed
o Did not encounter big waves for it was
impossible for water to seep in
o Corn grains were farm wet and not properly
dried when loaded
Lower Court:
o Contract between the two is charter-party
agreement so only ordinary diligence is
required
o Diligence is met when prior inspection was
done and permit to sail issued
Court of Appeals:
o North Front is common carrier
o Requirements of extraordinary diligence met
when it was issued a permit to sail
o Complaint dismissed and motion for
reconsideration rejected


ISSUE: WON North Front is liable?


HELD: YES
The proofs presented by North Front Shipping Ser
vices, Inc., were insufficient to rebut the prima
facie presumption of private respondent's
negligence
Compania Maritima v. Court of Appeals: It is
incumbent upon the common carrier to prove that
the loss, deterioration or destruction was due to
accident or some other circumstances inconsistent
with its liability.
Having been in the service since 1968, the master of
the vessel would have known at the outset that corn
grains that were farm wet and not properly dried
would eventually deteriorate when stored in sealed
and hot compartments as in hatches of a
ship. Equipped with this knowledge, the master of
the vessel and his crew should have undertaken
precautionary measures to avoid or lessen the
cargo's possible deterioration as they were
presumed knowledgeable about the nature of such
cargo. But none of such measures was taken.
Republic Flour Mills Corporation guilty of
contributory negligence. It was seasonably notified
of the arrival of the barge but did not immediately
start the unloading operations. No explanation was
proffered by the consignee as to why there was a
delay of six (6) days. It should shoulder 40% of the
loss.

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