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SULPICIO LINES v. FIRST LEPANTO-TAISHO INSURANCE CORPORATION

FACTS:

Respondent First Lepanto-Taisho Insurance Corporation filed a complaint for damages against Delbros, Inc. and petitioner Sulpicio Lines, Inc., stemming from a contract to transport a shipment of goods. Delbros, Inc. engaged the services of Sulpicio Lines, Inc. to transport the goods from Cebu City to Manila. During unloading, one crate containing 42 cartons dropped and was rejected as a total loss. The owner of the goods filed a claim with Sulpicio Lines, Inc., but it was denied. Respondent insurer paid the claim and sought reimbursement from Delbros, Inc. and Sulpicio Lines, Inc. Afterward, respondent insurer filed a suit for damages. The trial court dismissed the complaint, but the Court of Appeals reversed and ordered Delbros, Inc. and Sulpicio Lines, Inc. to pay damages. Sulpicio Lines, Inc. filed a motion for reconsideration, which was denied.

ISSUES:

  1. Whether the Court of Appeals erred in not holding that the trial court justly and correctly dismissed the complaint against Sulpicio Lines, which dismissal is already final.

  2. Whether the Court of Appeals erred in not dismissing the appeal for failure of the appellant to comply with the technical requirement of the Rules of Court.

  3. Whether the petitioner-carrier was negligent in handling the damaged cargo during unloading.

  4. To what extent is the petitioner-carrier liable for the damages suffered by the owner of the goods.

RULING:

  1. The Court of Appeals did not err in not holding that the trial court justly and correctly dismissed the complaint against Sulpicio Lines. The Court found that there was damage suffered by the goods of the shipper, caused by the negligence of Sulpicio Lines. Therefore, Sulpicio Lines cannot exculpate itself from liability.

  2. The Court of Appeals did not err in giving due course to the appeal filed by the respondent-insurer. Although there was a failure to attach a copy of the decision of the trial court to the appellant's brief, the respondent-insurer subsequently complied with the court's requirement and submitted copies of the decision.

  3. The petitioner-carrier is presumed to have been negligent in the handling of the damaged cargo. They failed to prove that they observed extraordinary diligence.

  4. The petitioner-carrier is liable to pay the amount paid by the respondent-insurer for the damages sustained by the owner of the goods.

PRINCIPLES:

  • A common carrier is expected to observe extraordinary diligence in the handling of goods placed in its possession for transport.

  • The falling of goods during unloading is evidence of the carrier's negligence in handling the cargo.

  • The right to appeal is a statutory right, but the court may allow an appeal upon subsequent compliance with the requirements, especially when a strict application of technical rules would impair the proper administration of justice.

  • Common carriers are bound to transport cargo safely using the utmost diligence and to know and follow the required precautions to avoid damage or destruction of the goods.

  • Common carriers are presumed to be at fault or negligent in case of loss, destruction, or deterioration of the goods they transport.

  • To overcome the presumption of liability, the common carrier must prove that they observed extraordinary diligence.

  • The insurer, upon payment of the insured's loss, is entitled to be subrogated to the insured's right of action against the common carrier.

  • A subrogee in effect steps into the shoes of the insured and can recover only if the insured could have recovered.

  • Unjust enrichment should be avoided, and the insurer cannot recover damages from the carrier if it has already been fully paid by the insured.