Transpo Case Digest

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A.

Definition, Article 1732, Civil Code of the Philippines

HOME INSURANCE CO. V AMERICAN STEAMSHIP AGENCIES


23 SCRA 24 April 4, 1968

Facts:
Consorcio Pasquero Del Perse of South America shipped a freight of 21,740 jute
bags of Peruvian fish meal through the SS Crowborough consigned to the Sam Miguel
Brewery and insured by Home Insurance Company for $202,505.00. It arrived in Manila
on March 7, 1963 and was loaded into the lighters of Luzon Stevedoring Company.
However, it arrived with shortages. Thus SMB demanded that Home Insurance pay the
claim of P14,000.00. Home Insurance on the other hand filed for the recovery of the
P14,000.00 from Luzon Stevedoring. The Court of First Instance absolved Luzon
Stevedoring, but ordered the American Steamship Agencies to reimburse the amount to
Home Insurance, basing the ruling on Art. 587 of the Code of Commerce which makes the
ship agent civilly liable for damages in favor of third persons due to conduct of carrier’s
captain and that the stipulation in the charter party exempting the owner from liability is
against public policy under Article 1744 of the New Civil Code.

Issue:
Between the provisions of the New Civil Code and the Code of Commerce, which should
apply.

Held:
The court rules the affirmative as to the non-applicability of the prohibition of the
exemption of the carrier from liability. The provisions of our Civil Code on common
carriers were taken from Anglo-American Law. Under American Jurisprudence, a
common carrier undertakes to carry a special cargo or chartered to a special person only,
becomes a private carrier. And thus, as a private carrier, a stipulation exempting the
owner from liability for the negligence of its agent is not against public policy. The reason
is that there is no strict public policy applied.

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