A CARRIER IS liable for the loss of cargo resulting from the sinking of the ship it used but did not own.
     Thus ruled the Supreme Court recently as it dismissed a petition that sought the reversal of the rulings of a Makati City Regional Trial Court and the Court of Appeals ordering a carrier to reimburse an insurance firm for the amount it paid when the ship carrying the insured shipment sank.
     In a decision penned by Justice Renato C. Corona, the Court’s First Division held that petitioner Cebu Salvage Corporation (CSC) was a common carrier and therefore should be responsible for the lost shipment unless it can prove that the ship’s sinking was brought about by the causes specified in Article 1734 of the Civil Code (flood, storm, earthquake, lightning, or other natural disaster or calamity; act of the public enemy in war, among others). A common carrier is one engaged in the business of carrying and transporting goods for compensation, and which offers its services to the public.
     The Court noted that CSC “failed to prove that it exercised extraordinary diligence to prevent such loss or that it was due to some casualty or force majeure” despite the contract of carriage of goods. It also noted that CSC had control over what vessel it would use. The fact that CSC did not own the vessel it decided to use to consummate the contract of carriage did not negate its character and duties as a common carrier, it added.
     “To permit a common carrier to escape its responsibility for the goods it agreed to transport would radically derogate from the carrier’s duty of extraordinary diligence. It would also open the door to collusion between the carrier and the supposed owner and to the possible shifting of liability from the carrier to one without any financial capability to answer for the resulting damages,” cautioned the Court. (Cebu Salvage Corporation v. Philippine Home Assurance Corporation, GR No. 150403, January 25, 2007)