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Roque V Iac

The Intermediate Appellate Court's ruling is affirmed for two reasons: 1) In marine cargo insurance, there is an implied warranty of seaworthiness by the cargo owner. Since the vessel carrying the insured cargo sank due to unseaworthiness from a defective pipe, the warranty was breached. 2) The loss of cargo was caused by "perils of the ship" meaning defects of the vessel, not "perils of the sea" which refers to losses from extraordinary sea-related events. The shipowner was aware of the defective pipe but failed to properly repair it, causing the loss.

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108 views2 pages

Roque V Iac

The Intermediate Appellate Court's ruling is affirmed for two reasons: 1) In marine cargo insurance, there is an implied warranty of seaworthiness by the cargo owner. Since the vessel carrying the insured cargo sank due to unseaworthiness from a defective pipe, the warranty was breached. 2) The loss of cargo was caused by "perils of the ship" meaning defects of the vessel, not "perils of the sea" which refers to losses from extraordinary sea-related events. The shipowner was aware of the defective pipe but failed to properly repair it, causing the loss.

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Biboy GS
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G.R. No.

L-66935 November 11, 1985


ISABELA ROQUE, doing business under the name and style of Isabela Roque Timber Enterprises and
ONG CHIONG, petitioners, vs. HON. INTERMEDIATE APPELATE COURT and PIONEER INSURANCE AND
SURETY CORPORATION, respondent.
FACTS:
On February 19, 1972, the Manila Bay Lighterage Corporation (Manila Bay), a common carrier, entered into a
contract with the petitioners whereby the former would load and carry on board its barge Mable 10 about
422.18 cubic meters of logs from Malampaya Sound, Palawan to North Harbor, Manila. The petitioners
insured the logs against loss for P100,000.00 with respondent Pioneer Insurance and Surety Corporation
(Pioneer).
On February 29, 1972, the petitioners loaded on the barge, 811 pieces of logs at Malampaya Sound, Palawan
for carriage and delivery to North Harbor, Port of Manila, but the shipment never reached its destination
because Mable 10 sank with the 811 pieces of logs somewhere off Cabuli Point in Palawan on its way to
Manila.
Hence, petitioners commenced Civil Case No. 86599 against Manila Bay and respondent Pioneer.
DECISION OF LOWER COURTS:
(1) Trial Court: found in favor of petitioners.
(2) Intermediate Appellate Court: absolved the respondent insurance company from liability on the grounds
that the vessel carrying the insured cargo was unseaworthy and the loss of said cargo was caused not by the
perils of the sea but by the perils of the ship
ISSUES:
I. THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT IN CASES OF MARINE CARGO
INSURANCE, THERE IS A WARRANTY OF SEAWORTHINESS BY THE CARGO OWNER.
II. THE INTERMEDIATE APPELLATE COURT ERRED IN HOLDING THAT THE LOSS OF THE CARGO IN THIS
CASE WAS CAUSED BY "PERILS OF THE SHIP" AND NOT BY "PERILS OF THE SEA.
RULING:
I. No. The IAC is correct.
The liability of the insurance company is governed by law. Section 113 of the Insurance Code provides:
In every marine insurance upon a ship or freight, or freightage, or upon any thing that is the subject of marine
insurance, a warranty is implied that the ship is seaworthy.
Section 99 of the same Code also provides in part. Marine insurance includes:
(1) Insurance against loss of or damage to:
(a) Vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, ...
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.
Since the law provides for an implied warranty of seaworthiness in every contract of ordinary marine
insurance, it becomes the obligation of a cargo owner to look for a reliable common carrier which keeps its
vessels in seaworthy condition. The shipper of cargo may have no control over the vessel but he has full
control in the choice of the common carrier that will transport his goods. Or the cargo owner may enter into a
contract of insurance which specifically provides that the insurer answers not only for the perils of the sea
but also provides for coverage of perils of the ship.
II. No, the IAC is correct.
In marine cases, the risks insured against are "perils of the sea"
A policy does not cover a loss or injury that must inevitably take place in the ordinary course of things. 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. They insure against losses from extraordinary
occurrences only, such as stress of weather, winds and waves, lightning, tempests, rocks and the like. These
are understood to be the "perils of the sea" referred in the policy, and not those ordinary perils which every
vessel must encounter. "Perils of the sea" has been said to include only such losses as are of extraordinary

nature, encounter. "Perils of the sea" has been 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. Damage done to a vessel by perils of the sea includes every species of damages done to a
vessel at sea, as distinguished from the ordinary wear and tear of the voyage, and distinct from injuries
suffered by the vessel in consequence of her not being seaworthy at the outset of her voyage (as in this case).
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 is quite unmistakable that the loss of the cargo was due to the perils of the ship rather than the perils of the
sea. The facts clearly negate the petitioners' claim under the insurance policy.
In the present case the entrance of the sea water into the ship's hold through the defective pipe already
described was not due to any accident which happened during the voyage, but to the failure of the ship's
owner properly to repair a defect of the existence of which he was apprised. The loss was therefore more
analogous to that which directly results from simple unseaworthiness than to that which result from the
perils of the sea.

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