Roque vs.. Intermediate Appellate Court


139 SCRA 596 (G.R. No. L-66935)

November 11, 1985



Petitioner:          Isabela Roque, doing busines under the name and style of Isabela Roque Timber Enterprises and Ong Chiong

Respondent:      Intermediate Appelate Court and Pioneer Insurance And Surety Corporation

J. Gutierrez, Jr.:


Manila Bay Lighterage Corporation (Manila Bay) a common carrier, entered into a contract with petitioners whereby the former would load and cary on board its barge Marble 10 about 422.18 cubic meters of logs from Malampaya Sound, Palawan to North Harbor Manila. The petitioners insured the logs against loss for ₱ 100,000.00 with respondent Pioneer Insurance and Surety Corporation (Pioneer).

The petitioner 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 Marble 10 sank with the 811 pieces of logs somewhere off Cabuli Point in Palawan on its way to Manila. As alleged by the petitioners in their complaint and as found by both the trial and appellate courts, the barge where the logs were loaded was not seaworthy such that it developed a leak. The appellate court further found that one of the hatches was left open causing water to enter the barge and because the barge was not provided with the necessary cover or tarpauline, the ordinary splash of seawaves brought more water inside the barge.

Respondent ignored the petitioner demand for payment of ₱ 150,000.00 for the loss of the shipment plus ₱ 100,000.00 as unrealized profits.

Respondent Pioneer denied the claim of petitioner for the full amount of ₱ 100,000.00 on the ground that its liability depended upon the total loss of vessel only.

The trial court decided in favor of the plaintiff (petitioner).

The appellate court modified the trial courts decision and absolved Pioneer from liability after finding that there was a breach of implied warranty of seaworthiness on the part of the petitioners and that the loss of the insured cargo was caused by the “perils of the ship” and not by the “perils of sea.” It ruled that the loss is not covered by the marine insurance policy.


Whether or not the implied warranty of seaworthiness in marine insurance attaches to the shipper who is not the shipowner.


Section 113 of the Insurance Code provides:

In every marine insurance upon a ship or freight, or freightage, or upon any thing which 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.

Moreover, the fact that the unseaworthiness of the ship was unknown to the insured is immaterial in ordinary marine insurance and may not be used by him as a defense in order to recover on the marine insurance policy.

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.

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, 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.

On the contention of the petitioners that the trial court found that the loss was occasioned by the perils of the sea characterized by the “storm and waves” which buffeted the vessel, the records show that the court ruled otherwise. It stated: “x x x The other affirmative defense of defendant Lighterage, That the supposed loss of the logs was occasioned by force majeure was not supported by the evidence. At the time Mable 10 sank, there was no typhoon but ordinary strong wind and waves, a condition which is natural and normal in the open sea. The evidence shows that the sinking of Mable 10 was due to improper loading of the logs on one side so that the barge was tilting on one side and for that it did not navigate on even keel; that it was no longer seaworthy that was why it developed leak; that the personnel of the tugboat and the barge committed a mistake when it turned loose the barge from the tugboat east of Cabuli point where it was buffeted by storm and waves, while the tugboat proceeded to west of Cabuli point where it was protected by the mountain side from the storm and waves coming from the east direction. x x x”

lt must be considered to be settled, furthermore, that a loss which, in the ordinary course of events, results from the natural and inevitable action of the sea, from the ordinary wear and tear of the ship, or from the negligent failure of the ship’s owner to provide the vessel with proper equipment to convey the cargo under ordinary conditions, is not a peril of the sea. Such a loss is rather due to what has been aptly called the ‘peril of the ship.’ ‘The insurer undertakes to insure against perils of the sea and similar perils, not against perils of the ship. As was well said by Lord Herschell in Wilson, Sons & Co. v. Owners of Cargo per the Xantho ([1887], 12 A. C., 503, 509), there must, in order to make the insurer liable, be ’some casualty, something which could not be foreseen as one of the necessary incidents of the adventure. The purpose of the policy is to secure an indemnity against accidents which may happen, not against events which must happen.

Barratry as defined in American Insurance Law is “any willful misconduct on the part of master or crew in pursuance of some unlawful or fraudulent purpose without the consent of the owners, and to the prejudice of the owner’s interest,” (Sec. 171, U.S. Insurance Law, quoted in Vance, Handbook on Law of Insurance, 1951, p. 929.) Barratry necessarily requires a willful and intentional act in its commission. No honest error of judgment or mere negligence, unless criminally gross, can be barratry. (See Vance on Law of Insurance, p. 929 and cases cited therein.)

In the case at bar, there is no finding that the loss was occasioned by the willful or fraudulent acts of the vessel’s crew. There was only simple negligence or lack of skill. Hence, the second assignment of error must likewise be dismissed.

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