GR 185565; (November, 2014) (Digest)
G.R. No. 185565 , November 26, 2014
LOADSTAR SHIPPING COMPANY, INCORPORATED and LOADSTAR INTERNATIONAL SHIPPING COMPANY, INCORPORATED, Petitioners, vs. MALAYAN INSURANCE COMPANY, INCORPORATED, Respondent.
FACTS
Loadstar International Shipping Co., Inc. (Loadstar International) owned M/V “Bobcat,” operated by Loadstar Shipping Company, Inc. (Loadstar Shipping) under a charter party agreement. They entered into a Contract of Affreightment with Philippine Associated Smelting and Refining Corporation (PASAR) to transport copper concentrates. On September 10, 2000, 5,065.47 WMT of copper concentrates, insured by Malayan Insurance Company, Inc. (Malayan), were loaded onto M/V “Bobcat” in Cargo Holds Nos. 1 and 2. On September 12, 2000, during the voyage, cracks were discovered on the starboard side of the main deck, allowing seawater to enter and contaminate the cargo in Cargo Hold No. 2. Upon arrival, PASAR’s surveyor confirmed seawater contamination, leading PASAR to reject 750 MT of the cargo. PASAR filed a claim against Loadstar Shipping. Malayan paid PASAR ₱32,351,102.32 based on the surveyor’s recommendation and was subrogated to PASAR’s rights. Malayan then demanded reimbursement from Loadstar Shipping, which refused, prompting Malayan to file a complaint for damages. The Regional Trial Court (RTC) dismissed the complaint, ruling that the vessel was seaworthy and the damage was due to a peril of the sea, and that the copper concentrates, despite contamination, remained usable. The Court of Appeals (CA) reversed the RTC, ordering petitioners to pay actual damages of ₱33,934,948.75, later modified to deduct US$90,000.00 (the residual value from the sale of the damaged cargo to PASAR). Petitioners appealed to the Supreme Court.
ISSUE
Whether Malayan, as subrogee, sufficiently proved that PASAR suffered actual pecuniary loss due to the seawater contamination of the copper concentrates, thereby entitling it to recover damages from the petitioners.
RULING
The Supreme Court GRANTED the petition, REVERSED and SET ASIDE the CA Decision and Resolution, and REINSTATED the RTC Decision dismissing the complaint.
The Court held that Malayan failed to prove by preponderance of evidence that PASAR sustained actual pecuniary loss. While seawater contamination was established, Malayan did not present sufficient evidence, such as the Philex-PASAR purchase agreement or proof of penalty impositions under that agreement, to demonstrate that the contamination resulted in a measurable financial loss to PASAR (e.g., through penalties, reduced value, or rejection). The payment made by Malayan to PASAR, based solely on the surveyor’s report, did not automatically prove actual loss, as the right of subrogation requires proof of the insured’s actual loss. The Court emphasized that actual damages must be proven with reasonable certainty and cannot be based on speculation. Consequently, without proof of actual loss, Malayan’s subrogatory claim failed. The Court found no need to address other issues, such as whether M/V “Bobcat” was a common or private carrier.