CARRIAGE OF GOODS BY SEA ACT

Madeloso, Gestelee P. (Case 1-2)

Gundarangan, Sittie Johayra S. (Case 3-4)

(1) Benjamin Cua v. Wallem Philippines Shipping, Inc. and Advance Shipping
Corporation
G.R. No. 171337, July 11, 2012

FACTS:
Advance Shipping is a foreign corporation, and Wallem as its local agent. The
Advance Shipping is the owner and manager of M/V Argo Trader who carried the
shipment Brazilian Soyabean consigned to Cua evidence by Bill of Lading No. 10.

Cua filed civil action for damages against the respondents. The former sought to
recover the payment for damages to 218 tons and for a shortage of 50 tons of
Soyabean. He claimed that the loss was due to the respondent's failure to observe
extraordinary diligence in carrying the cargo.

Advance Shipping moved to dismiss the complaint assailing the RTC's

jurisdiction over Cua's claim should have first been brought to arbitration. RTC ruled
that Cua was not bound by arbitration clause in charter party agreement.

Wallem filed its motion to dismiss on the ground of prescription under Sec 3(6)
COGSA, "that carrier and the ship shall be discharged from all liability in respect
of loss or damage unless suit is brought within one year after delivery of the
goods." Wallem alleged that the goods were delivered to Cua on August 16, 1989
and damages suit was instituted only on November 12, 1990, more than 1 year than
the period alloted under COGSA the same was barred by prescription.

Cua denied the Wallem's claim of prescription, because he referred to the August
10, 1990 telex message sent which stated that Advance Shipping agreed to extend
the commencement of suit for 90 days from August 14, 1990 - November 12, 1990,
which such copy of telex message was supposedly attached to Cua's opposition.
Wallem withdrawn its Motion to Dismiss and adopting instead the arguments in
Advance Shipping Motion to Dismiss.

RTC ordered respondents jointly and severally liable to Cua, based on the extended
prescriptive period by the parties agreement. CA reversed the RTC's decision . The
telex message extending the period to file an action was neither attached to Cua's
opposition, nor presented during trial.

ISSUE: Whether or not Cua's claim for payment of damages against the respondents
has prescribed.

HELD: SC ruled in favor of Cua. The court finds that Cua timely filed his claim before
the trial court. The CA failed to appreciate the admission made by the respondents
in their pleadings that negate a finding of prescription of Cua's claim.

The COGSA is the applicable law for all contracts for carriage of goods by
sea to and from Philippine ports in foreign trade. Thus the law the court shall
consider since the cargo was transported from Brazil to the Philippines.
 Sec 3(6), COGSA, the carrier is discharged from liability for loss or damage to
the cargo "unless the suit is brought within 1 year after delivery of the goods or
date when the good should have been delivered."

The vessel arrived in Manila on July 8, 1989 and Cua's claim was filed on
November 12, 1990. Clearly, it was filed beyond the 1 year period, however under
Cua's complaint respondents agreed to extend the time for filing of the action which is
a material averment under the Rules of Court which must be denied by the
respondents, otherwise the allegation is deemed admitted.

Both respondents failed to specifically deny such claim of an agreement

extending the period to file an action, they made no further statement other than a bare
and unsupported contention that Cua's complaint is barred by prescription and or
laches. They did not provide any factual basis for their belief that the complaint had
prescribed.

Respondents discussion on prescription in their memorandum filed was based

on Art 366 of Code of Commerce and not Sec 3(6), COGSA. Art 366, Code of
Commerce requires that a claim be made with the carrier within 24 hours from the
delivery of the cargo. Since COGSA is the applicable law, their discussion to support
their claim of prescription under Art 366, Code of Commerce would therefore not
constitute a refutation of Cua's allegations of extension.

Failure to specifically deny the agreement on the extension of the period to

file an action, the court considers the extension of the period as an admitted
fact.

(2) UCPB general Insurance Co., Inc. v. Aboitiz Shipping Corp, Eagle Express
Lines, DAMCO Intermodal Services, Inc., and Pimentel Customs Brokerage Co.
G.R No. 168433, February 10, 2009

FACTS:
On June 18, 1991, three (3) units of waste water treatment plant with accessories
were purchased by San Miguel Corporation in Taiwan. The goods came from
Charleston, U.S.A. and arrived at the port of Manila on board MV "SCANDUTCH
STAR". The same were then transported to Cebu on board MV "ABOITIZ SUPERCON
II". After its arrival at the port of Cebu and clearance from the Bureau of Customs, the
goods were delivered to and received by SMC at its plant site on August 2, 1991. It
was then discovered that one electrical motor of one unit was damaged.

Pursuant to an insurance agreement, UCPB paid the amount representing the

value of the damaged unit. UCPB filed a complaint as subrogee of SMC seeking to
recover from defendants the amount it had paid SMC. Aboitiz moved to admit East
Asiatic Co. as general agent of DAMCO Intermodal System.

RTC ruled that DAMCO Intermodal System, Inc. Eagle Express Lines, Inc. and
defendant Aboitiz Shipping are solidarily liable to SMC for the damage of the shipment
and orders. CA reversed the decision of the trial court and ruled that UCPB’s right of
action against respondents did not accrue because UCPB failed to file a formal notice
of claim within 24 hours from (SMC’s) receipt of the damaged merchandise as required
under Art. 366 of the Code of Commerce.
ISSUE: Whether or not the filing of a claim within the 24-hour period prescribed by Art.
366 of Code of Commerce is a condition precedent to the accrual of a right of action
against the carrier for the damages caused to the merchandise.

HELD: SC ruled in favor of the respondents, affirming the decision of the CA. The law
clearly requires that the claim for damage or average must be made within 24 hours
from receipt of the merchandise if, as in this case, damage cannot be ascertained
merely from the outside packaging of the cargo.

Under Art. 366(2) of Code of Commerce, that after the periods mentioned
have elapsed, or the transportation charges have been paid, no claim shall be
admitted against the carrier with regard to the condition in which the goods
transported were delivered.
UCPB itself has revealed that when the shipment was discharged and opened at
the ICTSI in Manila in the presence of an Eagle Express representative, the cargo had
already been found damaged. In fact, a request for bad order survey was then made
and a turnover survey of bad order cargoes was issued, pursuant to the procedure in
the discharge of bad order cargo. The shipment was then repacked and transshipped
from Manila to Cebu on board MV Aboitiz Supercon II. When the cargo was finally
received by SMC at its Mandaue City warehouse, it was found in bad order, thereby
confirming the damage already uncovered in Manila.
Even by the exercise of extraordinary diligence, Aboitiz could not have undone the
damage to the cargo that had already been there when the same was shipped on
board its vessel.

The 24-hour claim requirement as a condition precedent to the accrual of a right

of action against a carrier for loss of, or damage to, the goods. The shipper or
consignee must allege and prove the fulfillment of the condition. Otherwise, no right of
action against the carrier can accrue in favor of the former.

The shipment in this case was received by SMC on August 2, 1991. However,
as found by the Court of Appeals, the claims were dated October 30, 1991. The claim
was, therefore, clearly filed beyond the 24-hour time frame prescribed by Art. 366 of
the Code of Commerce.

(3) PIONEER INSURANCE AND SURETY CORPORATION v. APL CO. PTE. LTD.
G.R. NO. 226345 AUGUST 2, 2017

FACTS:
On January 13, 2012, the shipper, Chillies Export House Limited, turned over to
respondent APL 250 bags of chili pepper for transport from India to Manila. The
shipment, with a total declared value of $12,272.50, was loaded on board MN Wan Hai
262. In turn, BSFIL Technologies, as consignee, insured the cargo with petitioner
Pioneer Insurance.

On February 2, 2012, the shipment arrived at the port of Manila and was
temporarily stored at North Harbor, Manila. On February 6, 2012, the bags of chili were
withdrawn and delivered to the consignee. Upon receipt thereof, it discovered that 76
bags were wet and heavily infested with molds. The shipment was declared unfit for
human consumption and was eventually declared as a total loss.
 Pioneer Insurance paid BSFIL after evaluating the claim. Having been
subrogated to all the rights and cause of action of BSFIL, Pioneer Insurance sought
payment from APL, but the latter refused.

 MTC granted the complaint and ordered APL to pay Pioneer Insurance the amount
claimed.
 RTC concurred with the MTC.
 CA reversed the decisions of the trial courts and ruled that the present action was
barred by prescription.

ISSUE: Whether the one year prescriptive period provided under the Carriage of
Goods by Sea Act (COGSA) is not applicable in the instant case.

RULING: One year prescriptive period under COGSA is applicable.

The cardinal rule in the interpretation of contracts is embodied in the first

paragraph of Article 1370 of the Civil Code: [i]f the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning of its
stipulations shall control.

Where the written terms of the contract are not ambiguous and can only be
read one way, the court will interpret the contract as a matter of law. If the contract
is determined to be ambiguous, then the interpretation of the contract is left to the
court, to resolve the ambiguity in the light of the intrinsic evidence.

In the Bill of Lading, it was categorically stated that the carrier shall in any event
be discharged from all liability whatsoever in respect of the goods, unless suit is
brought in the proper forum within nine (9) months after delivery of the goods or the
date when they should have been delivered. The same, however, is qualified in that
when the said nine-month period is contrary to any law compulsory applicable, the
period prescribed by the said law shall apply.

The present case involves lost or damaged cargo. It has long been settled that
in case of loss or damage of cargoes, the one-year prescriptive period under the
COGSA applies. It is at this juncture where the parties are at odds, with Pioneer
Insurance claiming that the one-year prescriptive period under the COGSA governs;
whereas APL insists that the nine-month prescriptive period under the Bill of Lading
applies.

A reading of the Bill of Lading between the parties reveals that the nine-month
prescriptive period is not applicable in all actions or claims. Hence, strictly applying the
terms of the Bill of Lading, the one-year prescriptive period under the COGSA
should govern because the present case involves loss of goods or cargo. In
finding so, the Court does not construe the Bill of Lading any further but merely applies
its terms according to its plain and literal meaning.

(4) WESTWIND SHIPPING CORPORATION v. UCPB GENERAL INSURANCE CO.

GR No. 200289 Nov 25, 2013

FACTS:
On August 23, 1993, Kinsho-Mataichi Corporation shipped from Japan, 197
metal containers/skids of tin-free steel for delivery to the consignee, San Miguel
Corporation. The shipment, covered by Bill of Lading was loaded and received clean
on board M/V Golden Harvest Voyage No. 66, a vessel owned and operated by
Westwind Shipping Corporation. SMC insured the cargoes against all risks with UCPB
General Insurance Co., Inc.

The shipment arrived in Manila, Philippines on August 31, 1993 and was
discharged in the custody of the arrastre operator, Asian Terminals, Inc. (ATI). During
the unloading operation, however, six containers/skids sustained dents and punctures
from the forklift used by the stevedores of Ocean Terminal Services, Inc. (OTSI) in
centering and shuttling the containers/skids.

Orient Freight International, Inc. (OFII), the customs broker of SMC, withdrew
from ATI the 197 containers/skids, including the six in damaged condition, and
delivered the same at SMC's warehouse in Calamba, Laguna through J.B. Limcaoco
Trucking (JBL).

It was discovered upon discharge that additional nine containers/skids were also
damaged due to the forklift operations; thus, making the total number of 15
containers/skids in bad order.

 RTC dismissed UCPB's complaint and the counterclaims of Westwind, ATI, and OFII.
 CA reversed and set aside the trial court.

ISSUE: Which between a common carrier and an arrastre operator should be

responsible for damage or loss incurred by the shipment during its unloading.

RULING: Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance over the
goods transported by them. Subject to certain exceptions enumerated under Article
1734 of the Civil Code, common carriers are responsible for the loss, destruction, or
deterioration of the goods.

The extraordinary responsibility of the common carrier lasts from the time the
goods are unconditionally placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively, by the carrier to
the consignee, or to the person who has a right to receive them.

For marine vessels, Article 619 of the Code of Commerce provides that the ship
captain is liable for the cargo from the time it is turned over to him at the dock or afloat
alongside the vessel at the port of loading, until he delivers it on the shore or on the
discharging wharf at the port of unloading, unless agreed otherwise.

Lastly, Section 2 of the COGSA provides that under every contract of carriage of
goods by sea, the carrier in relation to the loading, handling, stowage, carriage,
custody, care, and discharge of such goods, shall be subject to the responsibilities and
liabilities and entitled to the rights and immunities set forth in the Act.

Section 3 (2) thereof then states that among the carriers' responsibilities are to
properly and carefully load, handle, stow, carry, keep, care for, and discharge the
goods carried.

Westwind, not ATI, is liable for the damaged containers at the time of its
unloading.
 As the common carrier, not the arrastre operation, is responsible during the
unloading of the cargoes from the vessel and it is not relieved from liability and is still
bound to exercise extraordinary diligence from the moment the cargoes are received
until received by consignee in order to see to it that the cargoes in possession remain
in good order and condition.

MUKTHAR K. GUIALEL LLB-3B

ASIAN TERMINALS, INC., Petitioner,

vs.
PHILAM INSURANCE CO., INC. (now Chartis Philippines Insurance, Inc.),
Respondent
G.R. No. 181163, July 24, 2013

FACTS:
 April 15, 1995 – Nichimen Corporation shipped to Universal Motors Corporation
219 packages containing 120 units of brand new Nissan Pickup Truck Double
Cab 4x2 model, without engine, tires and batteries, on board the vessel S/S
“Calayan Iris” from Japan to Manila. The shipment was insured with Philam
against all risks under Marine Policy.
 April 20, 1995 – The carrying vessel arrived at the port of Manila, when the
shipment was unloaded by the staff of ATI, it was found that the package was in
bad order.
 April 21, 1995 – The Turn Over Survey Bad Order Cargoes identified two
packages as being dented and broken. Thereafter, the cargoes were stored for
temporary safekeeping inside the warehouse.
 May 11, 1995 – The goods were withdrawn from the warehouse and delivered to
the Universal Motors’ warehouse.
 May 12, 1995 – Universal Motors filed a request for bad order survey following a
joint inspection where it was discovered that the objects/cargoes were deformed
and dented.
 May 17, 1995 – The last packages were delivered to Universal Motors.
 August 4, 1995 –Universal Motors filed a formal claim for damages against
Westwind and ATI, but the demands remained unheeded. So it sought reparation
from and was compensated by Philam.
 January 18, 1996, Philam, as subrogee of Universal Motors, filed a complaint for
damages.

ISSUE: Whether Philam’s action for damages prescribed.

HELD: No. Philam’s action for damages has not prescribed.

The prescription period for filing an action for the loss or damages of the goods
under the COGSA is found in paragraph (6), Section 3, thus:

(6) Unless notice of loss or damage and the general nature of such loss or damage be
given in writing to the carrier or his agent at the port of discharge before or at the time
of the removal of the goods into the custody of the person entitled to delivery thereof
under the contract of carriage, such removal shall be prima facie evidence of the
delivery by the carrier of the goods as described in the bill of lading. If the loss or
damage is not apparent, the notice must be given within three days of the delivery.
 Moreover, paragraph (6), Section of the COGSA clearly states that failure to
comply with the notice requirement shall not affect or prejudice the right of the shipper
to bring suit within one year after the delivery of the goods. Petitioner Philam, as the
subrogee of Universal Motors, filed the Complaint for damages on January 18, 1996,
just eight months after all the packages were delivered to its possession on May 17,
1995. Evidently, petitioner Philam’s action against petitioners Westwind and ATI was
seasonably filed.

JOAN KATE UY

INSURANCE COMPANY OF NORTH AMERICA

vs. ASIAN TERMINALs, INC. (ATI)
G.R. No. 180784. February 15, 2012
COGSA NOT APPLICABLE TO ARRASTRE OPERATOR
FACTS
On 9 Nov. 2002, Macro-Lite Korea Corp. shipped to San Miguel Corp. 185
packages of electrolytic tin free steel which was insured with petitioner insurer. Upon
arrival to Manila on 19 Nov. 2002, it was noted that 7 packages thereof were damaged
before turning them over to the ATI's custody pending the withdrawal of the consignee,
R.V Marzan Brokerage Corp. (Marzan). Marzan withdrawn the shipment on Nov. 22, 23
and 29, 2002. Prior to its last withdrawal on 29 Nov. 2002, a joint inspection was
conducted per the Request for Bad Order Survey dated 29 Nov. 2002 which showed
an additional 5 packeages found to be damaged. On 6 Jan 2003, San Miguel filed for
damages against ATI and the insurer. On 22 Jan. 2003, BA McLarens Phils, submitted
to the insurer a Survey Report which noted that out of 12 reported damaged skids, 9
of them were rejected and 3 were accepted by Marzan as good order. Subsequently,
insurer paid San Miguel the cost of the damage.
Upon filing, the RTC dismissed the case being barred by prescription. It ruled that
COGSA applied to this case since the goods were shipped from a foreign port to the
Philippines. The trial court stated that under the said law, particularly paragraph 4,
Section 3 (6)15 thereof, the shipper has the right to bring a suit within one year after
the delivery of the goods or the date when the goods should have been delivered, in
respect of loss or damage thereto. In addition, under the Contract for Cargo Handling
Services executed between the Philippine Ports Authority and Marina Ports Services,
Inc. (now ATI), ATI's liability for damage to cargoes in its custody is limited to ₱5,000.00
for each package, unless the value of the cargo shipment is otherwise specified or
manifested or communicated in writing, together with the declared Bill of Lading value
and supported by a certified packing list to the contractor by the interested party or
parties before the discharge or lading unto vessel of the goods. In this case, RTC
found that insurer was able to overcome arrastre's limited liability.
Consequently, insurer filed a petition under Rule 45 to the SC, contending that
COGSA is not applicable to this case, because the prescriptive period applies only to
the carrier and the ship. It argues that respondent, which is engaged in warehousing,
arrastre and stevedoring business, is not a carrier as defined by the COGSA, because
it is not engaged in the business of transportation of goods by sea in international trade
as a common carrier.
ISSUES
1) Whether the one-year prescriptive period for filing under the COGSA applies to
arrastre operator?
2) Whether insurer is entitled to recover from arrastre?
HELD
1) NO. Under paragraph (6), Section 3, of the COGSA, to wit:
xxx
In any event the carrier and the ship shall be discharged from all liability in respect of
loss or damage unless suit is brought within one year after delivery of the goods or the
date when the goods should have been delivered
xxx
From the provision above, the carrier and the ship may put up the defense of
prescription if the action for damages is not brought within one year after the delivery of
the goods or the date when the goods should have been delivered. It has been held
that not only the shipper, but also the consignee or legal holder of the bill may invoke
the prescriptive period. However, the COGSA does not mention that an arrastre
operator may invoke the prescriptive period of one year; hence, it does not cover the
arrastre operator.

2) YES. Arrastre operator is liable under the executed Contract for Cargo Handling
Service. As early as November 29, 2002, the date of the last withdrawal of the goods
from the arrastre operator, ATI was able to verify that five (5) packages of the shipment
were in bad order while in its custody. The certificate of non-delivery referred to in the
Contract is similar to or identical with the examination report on the request for bad
order survey.
Although the formal claim was filed beyond the 15-day period from the issuance
of the examination report on the request for bad order survey, the purpose of the time
limitations for the filing of claims had already been fully satisfied by the request of the
consignee’s broker for a bad order survey and by the examination report of the arrastre
operator on the result thereof, as the arrastre operator had become aware of and had
verified the facts giving rise to its liability. Hence, the arrastre operator suffered no
prejudice by the lack of strict compliance with the 15-day limitation to file the formal
complaint.
Based on the Evaluation Report of BA McLarens Phils., Inc., only four of the nine
skids were damaged in the custody of ATI. Thus, the arrastre operator is liable for 4
skids damaged while in its custody.
SITTIE KHAIRON TAGO

COMPAÑIA MARITIMA VS. INSURANCE COMPANY OF NORTH AMERICA

G.R. No. L-18965
October 30, 1964

Facts:

Sometime in October, 1952, Macleod and Company of the Philippines contracted

by telephone the services of the Compañia Maritima, a shipping corporation, for the
shipment of 2,645 bales of hemp from the former's Sasa private pier at Davao City to
Manila and for their subsequent trans-shipment to Boston, Massachusetts, U.S.A.
This oral contract was later on confirmed by a formal and written booking issued
by Macleod's branch office in Sasa and hand carried to Compañia Maritima's branch
office in Davao in compliance with which the latter sent to Macleod's private wharf LCT
Nos. 1023 and 1025 on which the loading of the hemp was completed on October 29,
1952. These two lighters were manned each by a patron and an assistant patron. The
patron of both barges issued the corresponding carrier's receipts.
Thereafter, the two loaded barges left Macleod's wharf and proceeded to and
moored at the government's marginal wharf in the same place to await the arrival of the
S.S. Bowline Knot belonging to Compañia Maritima on which the hemp was to be
loaded. During the night of October 29, 1952, or at the early hours of October 30, LCT
No. 1025 sank resulting in the damage or loss of 1,162 bales of hemp loaded therein.
On October 30, 1952, Macleod promptly notified the carrier's main office in
Manila and its branch in Davao advising it of its liability.
The 1,162 bales loaded on the carrier's LCT No. 1025, were insured with the
Insurance Company of North America against all losses and damages. In due time,
Macleod filed a claim for the loss it suffered as above stated with said insurance
company, and after the same had been processed, the sum of P64,018.55 was paid.
Trial court rendered judgment ordering the carrier to pay the insurance company
the sum of P60, 421.02, with legal interest thereon.
CA affirmed.
Issues:
1. Whether or not there was a contract of carriage between the carrier and the
shipper;
2. Whether or not the damage caused to the cargo or the sinking of the barge was
due to a fortuitous event, storm or natural disaster that would exempt the carrier
from liability;
3. Whether or not the respondent insurance company can sue the carrier under its
insurance contract as assignee of Macleod in spite of the fact that the liability of
the carrier as insurer is not recognized in this jurisdiction.

Held:
1. Macleod and Company contracted by telephone the services of
petitioner to ship the hemp in question from the former's private pier at Sasa, Davao
City, to Manila, to be subsequently transhipped to Boston, Massachusettes, U.S.A.,
which oral contract was later confirmed by a formal and written booking issued by
the shipper's branch office, Davao City, in virtue of which the carrier sent two of its
lighters to undertake the service.
It also appears that the patrons of said lighters were employees of the
carrier with due authority to undertake the transportation and to sign the documents
that may be necessary therefor.
The fact that the carrier sent its lighters free of charge to take the hemp
from Macleod's wharf at Sasa preparatory to its loading unto the ship Bowline Knot
does not in any way impair the contract of carriage already entered into between the
carrier and the shipper, for that preparatory steps is but a part and parcel of said
contract of carriage.
Here we have a complete contract of carriage the consummation of which
has already begun: the shipper delivering the cargo to the carrier, and the latter
taking possession thereof by placing it on a lighter manned by its authorized
employees, under which Macleod became entitled to the privilege secured to him by
law for its safe transportation and delivery, and the carrier to the full payment of its
freight upon completion of the voyage.
In fact, the receipt signed by the patron of the lighter that carried the hemp
stated that he was receiving the cargo "in behalf of S.S. Bowline Knot in good order
and condition." On the other hand, the authorities are to the effect that a bill of
lading is not indispensable for the creation of a contract of carriage.
"Bill of lading not indispensable to contract of carriage. As to issuance of a bill of
lading, although Article 350 of the Code of Commerce provides that 'the shipper as
well as the carrier of merchandise of goods may mutually demand that a bill of
lading be made,' still, said bill of lading is not indispensable. 'As regards the form of
the contract of carriage it can be said that provided that there is a meeting of the
minds and from such meeting arise rights and obligations, there should be no
limitations as to form.' The bill of lading is not essential to the contract, although it
may become obligatory by reason of the regulations of railroad companies, or as a
condition imposed in the contract by the agreement of the parties themselves. The
bill of lading is juridically a documentary proof of the stipulations and conditions
agreed upon by both parties. (Del Viso p. 314-315; Robles vs. Santos, 44 Off. Gaz.,
2268). In other words, the Code does not demand, as necessary requisite in the
contract of transportation, the delivery of the bill of lading to the shipper, but gives
right to both the carrier and the shipper to mutually demand of each other the
delivery of said bill. (Sp. Sup. Ct. Decision, May 6, 1895)." (Martin, Philippine
Commercial Laws, Vol. II, Revised Edition, pp. 12-13)

2. The mishap that caused the damage or loss was due, not to force
majeure, but to lack of adequate precaution or measures taken by the carrier to
prevent the loss.
"Aside from the fact that, as admitted by appellant's own witness, the ill-
fated barge had cracks on its bottom (pp. 18-19, t.s.n., Sept. 13, 1959) which
admitted sea water in the same manner as rain entered 'thru tank manholes,'
according to the patron of LCT No. 1023 (exh. JJJ-4) conclusively showing that the
barge was not seaworthy it should be noted that on the night of the nautical accident
there was no storm, flood, or other natural disaster or calamity. Certainly, winds of
11 miles per hour, although stronger than the average 4.6 miles per hour then
prevailing in Davao on October 29, 1952 (exh. 5), cannot be classified as storm. For
according to Beaufort's wind scale, a storm has wind velocities of from 64 to 75
miles per hour; and by Philippine Weather Bureau standards winds should have a
velocity of from 55 to 74 miles per hour in order to be classified as a storm (Northern
Assurance Co., Ltd. vs. Visayan Stevedore Transportation Co., CA-G. R. No.
23167-R. March 12, 1959)."

3. There can also be no doubt that the insurance company can recover
from the carrier as assignee of the owner of the cargo for the insurance amount it
paid to the latter under the insurance contract. The instant case, therefore, is not
one between the insured and the insurer, but one between the shipper and the
carrier, because the insurance company merely stepped into the shoes of the
shipper. And since the shipper has a direct cause of action against the carrier on
account of the damage of the cargo, no valid reason is seen why such action cannot
be asserted or availed of by the insurance company as a subrogee of the shipper.
With regard to the question concerning the personality of the insurance
company to maintain this action, we find the same of no importance, for the attorney
himself of the carrier admitted in open court that it is a foreign corporation doing
business in the Philippines with a personality to file the present action.