DSR-Senator Lines and C.F. Sharp and Company, INC. VS Federal Phoenix Assurance Co., INC

GR No 135377             07 OCT 03

FACTS:           

This is a petition for review on certiorari for damages arising from the loss of cargo while in transit.

Shipper Berde Plants, Inc. entered into a business with Al-Mohr International Group in Riyadh , Saudi Arabia. They acquired the services of C.F. Sharp and Company Inc. the general ship agent of Petitioner DSR-Senator Lines.

To which a Bill of Lading was produced by the carrier, showing an invoice amounting to $34,579.60. Khor Fakkan Port as its Discharge location and Port Dammam as the Port of Delivery with M/S “Arabian Senator” as the assigned vessel.

Federal Phoenix Assurance Company Inc., insured  the cargo for Php 941,429.61

On June 7 1993, the carrier left Manila and arrived Khor Fakkan to which the cargo was reloaded on board DSR-Senator Lines vessel M/V “Kapitan Sakharov” bound for Port Dammam.

While in Transit the vessel caught fire.

As a result, Federal Phoenix paid Berde Plants the insurance; on the other hand, the latter executed a “Subrogation Receipt.” Federal Phoenix sent a letter to CF Sharp demanding reimbursement. CF Sharp denied the letter on the ground that liability was extinguished when the vessel carrying the cargo was gutted by fire.

Federal Phoenix filed a complaint in RTC which was granted and affirmed by CA.

Issue:

WON DSR-Senator Lines and CF Shard and Company’s liabilities are extinguished due to the fire?

HELD:

NO, In addition to Article 1734, natural disaster must have been the proximate and only cause of the loss, and that the carrier has exercised due diligence to prevent or minimize the loss before, during or after the occurrence of the disaster.

Petition denied.