De Guzman v.

CA
Facts:
Respondent Ernesto Cendana was a junk dealer. He buys scrap materials and brings those that he gathered to Manila for resale using 2 six-wheeler trucks.
On the return trip to Pangasinan, respondent would load his vehicle with cargo which various merchants wanted delivered, charging fee lower than the
commercial rates. Sometime in November 1970, petitioner Pedro de Guzman contracted with respondent for the delivery of 750 cartons of Liberty Milk. On
December 1, 1970, respondent loaded the cargo. Only 150 boxes were delivered to petitioner because the truck carrying the boxes was hijacked along the
way. Petitioner commenced an action claiming the value of the lost merchandise. Petitioner argues that respondent, being a common carrier, is bound to
exercise extraordinary diligence, which it failed to do. Private respondent denied that he was a common carrier, and so he could not be held liable for force
majeure. The trial court ruled against the respondent, but such was reversed by the Court of Appeals.
Issues:
(1) Whether or not private respondent is a common carrier
(2) Whether private respondent is liable for the loss of the goods
Held:
(1) Article 1732 makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity. Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation service
on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732 distinguish between
a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or solicits business only from a
narrow segment of the general population. It appears to the Court that private respondent is properly characterized as a common carrier even though he
merely "back-hauled" goods for other merchants from Manila to Pangasinan, although such backhauling was done on a periodic or occasional rather than
regular or scheduled manner, and even though private respondent's principal occupation was not the carriage of goods for others. There is no dispute that
private respondent charged his customers a fee for hauling their goods; that fee frequently fell below commercial freight rates is not relevant here. A
certificate of public convenience is not a requisite for the incurring of liability under the Civil Code provisions governing common carriers.
(2) Article 1734 establishes the general rule that common carriers are responsible for the loss, destruction or deterioration of the goods which they carry,
"unless the same is due to any of the following causes only:
a. Flood, storm, earthquake, lightning, or other natural disaster or calamity;
b. Act of the public enemy in war, whether international or civil;
c. Act or omission of the shipper or owner of the goods;
d. The character of the goods or defects in the packing or in the containers; and
e. Order or act of competent public authority."

The hijacking of the carrier's truck - does not fall within any of the five (5) categories of exempting causes listed in Article 1734. Private respondent as
common carrier is presumed to have been at fault or to have acted negligently. This presumption, however, may be overthrown by proof of extraordinary
diligence on the part of private respondent. We believe and so hold that the limits of the duty of extraordinary diligence in the vigilance over the goods
carried are reached where the goods are lost as a result of a robbery which is attended by "grave or irresistible threat, violence or force." we hold that the
occurrence of the loss must reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is
necessary to recall that even common carriers are not made absolute insurers against all risks of travel and of transport of goods, and are not held liable for
acts or events which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary diligence.
CALVO vs UCPB
FACTS:
• At the time material to this case, Transorient Container Terminal Services, Inc. (TCTSI) owned by Virgines Calvo entered into a contract with San
Miguel Corporation (SMC) for the transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft liner board from the Port Area in
Manila to SMC's warehouse at the Tabacalera Compound, Romualdez St., Ermita, Manila.
o The cargo was insured by respondent UCPB General Insurance Co., Inc.
• July 14, 1990: arrived in Manila on board "M/V Hayakawa Maru" and later on unloaded from the vessel to the custody of the arrastre operator,
Manila Port Services, Inc
• July 23 to July 25, 1990: Calvo withdrew the cargo from the arrastre operator and delivered it to SMC's warehouse in Ermita, Manila
• July 25, 1990: goods were inspected by Marine Cargo Surveyors, who found that 15 reels of the semi-chemical fluting paper were
"wet/stained/torn" and 3 reels of kraft liner board were likewise torn
• SMC collected payment from UCPB the total damage of P93,112 under its insurance contract
• UCPB brought suit against Calvo as subrogee of SMC
o Calvo: Art. 1734(4) The character of the goods or defects in the packing or in the containers
▪ spoilage or wettage" took place while the goods were in the custody of either the carrying vessel "M/V Hayakawa Maru," which
transported the cargo to Manila, or the arrastre operator, to whom the goods were unloaded and who allegedly kept them in open
air for 9 days notwithstanding the fact that some of the containers were deformed, cracked, or otherwise damaged
• Trial Court: Calvo liable
• CA: affirmed
ISSUE: W/N Calvo can be exempted from liability under Art. 1734(4)

HELD: NO. CA AFFIRMED.

• mere proof of delivery of goods in good order to a carrier, and of their arrival at the place of destination in bad order, makes out a prima facie case
against the carrier, so that if no explanation is given as to how the injury occurred, the carrier must be held responsible
• extraordinary responsibility lasts from the time the goods are unconditionally placed in the possession of and received by the carrier for
transportation until the same are delivered actually or constructively by the carrier to the consignee or to the person who has the right to receive
the same
• Article 1732. Common carriers are persons, corporations, firms or associations engaged in the business of carrying or transporting passengers or
goods or both, by land, water, or air for compensation, offering their services to the public."
The above article makes no distinction between one whose principal business activity is the carrying of persons or goods or both, and one who does such
carrying only as an ancillary activity . . . Article 1732 also carefully avoids making any distinction between a person or enterprise offering transportation
service on a regular or scheduled basis and one offering such service on an occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the "general public," i.e., the general community or population, and one who offers services or
solicits business only from a narrow segment of the general population.
• concept of "common carrier" under Article 1732 may be seen to coincide neatly with the notion of "public service," under the Public Service Act
(Commonwealth Act No. 1416, as amended) which at least partially supplements the law on common carriers set forth in the Civil Code
• Under Section 13, paragraph (b) of the Public Service Act, "public service" includes:
" x x x every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited
clientele, whether permanent, occasional or accidental, and done for general business purposes, any common carrier, railroad, street railway, traction
railway, subway motor vehicle, either for freight or passenger, or both, with or without fixed route and whatever may be its classification, freight or
carrier service of any class, express service, steamboat, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers
or freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice-refrigeration plant, canal, irrigation system, gas, electric light, heat and
power, water supply and power petroleum, sewerage system, wire or wireless communications systems, wire or wireless broadcasting stations and other
similar public services. x x x"
• when Calvo's employees withdrew the cargo from the arrastre operator, they did so without exception or protest either with regard to the condition
of container vans or their contents
• Calvo must do more than merely show the possibility that some other party could be responsible for the damage. It must prove that it used "all
reasonable means to ascertain the nature and characteristic of goods tendered for transport and that it exercised due care in the handling
First Philippine Industrial Corp. vs. CA
Facts:
Petitioner is a grantee of a pipeline concession under Republic Act No. 387. Sometime in January 1995, petitioner applied for mayor’s permit in Batangas.
However, the Treasurer required petitioner to pay a local tax based on gross receipts amounting to P956,076.04. In order not to hamper its operations,
petitioner paid the taxes for the first quarter of 1993 amounting to P239,019.01 under protest. On January 20, 1994, petitioner filed a letter-protest to the
City Treasurer, claiming that it is exempt from local tax since it is engaged in transportation business. The respondent City Treasurer denied the protest,
thus, petitioner filed a complaint before the Regional Trial Court of Batangas for tax refund. Respondents assert that pipelines are not included in the term
“common carrier” which refers solely to ordinary carriers or motor vehicles. The trial court dismissed the complaint, and such was affirmed by the Court of
Appeals.
Issue:
Whether a pipeline business is included in the term “common carrier” so as to entitle the petitioner to the exemption
Held:
Article 1732 of the Civil Code defines a "common carrier" as "any person, corporation, firm or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water, or air, for compensation, offering their services to the public."
The test for determining whether a party is a common carrier of goods is:
(1) He must be engaged in the business of carrying goods for others as a public employment, and must hold himself out as ready to engage in the
transportation of goods for person generally as a business and not as a casual occupation;

(2) He must undertake to carry goods of the kind to which his business is confined;
(3) He must undertake to carry by the method by which his business is conducted and over his established roads; and
(4) The transportation must be for hire.
Based on the above definitions and requirements, there is no doubt that petitioner is a common carrier. It is engaged in the business of transporting or
carrying goods, i.e. petroleum products, for hire as a public employment. It undertakes to carry for all persons indifferently, that is, to all persons who
choose to employ its services, and transports the goods by land and for compensation. The fact that petitioner has a limited clientele does not exclude it
from the definition of a common carrier.
Planters Products vs CA
FACTS:
• June 16 1974: Mitsubishi International Corporation (Mitsubishi) of New York, U.S.A., 9,329.7069 M/T of Urea 46% fertilizer bought by Planters
Products, Inc. (PPI) on aboard the cargo vessel M/V "Sun Plum" owned by private Kyosei Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska,
U.S.A., to Poro Point, San Fernando, La Union, Philippines, as evidenced by Bill of Lading
• May 17 1974: a time charter-party on the vessel M/V "Sun Plum" pursuant to the Uniform General Charter was entered into between Mitsubishi as
shipper/charterer and KKKK as shipowner, in Tokyo, Japan
• Before loading the fertilizer aboard the vessel, 4 of her holds were all presumably inspected by the charterer's representative and found fit
• The hatches remained closed and tightly sealed throughout the entire voyage
• July 3, 1974: PPI unloaded the cargo from the holds into its steelbodied dump trucks which were parked alongside the berth, using metal scoops
attached to the ship, pursuant to the terms and conditions of the charter-partly
o hatches remained open throughout the duration of the discharge
o Each time a dump truck was filled up, its load of Urea was covered with tarpaulin before it was transported to the consignee's warehouse
located some 50 meters from the wharf
o Midway to the warehouse, the trucks were made to pass through a weighing scale where they were individually weighed for the purpose of
ascertaining the net weight of the cargo.
o The port area was windy, certain portions of the route to the warehouse were sandy and the weather was variable, raining occasionally
while the discharge was in progress.
o Tarpaulins and GI sheets were placed in-between and alongside the trucks to contain spillages of the ferilizer
o It took 11 days for PPI to unload the cargo
• Cargo Superintendents Company Inc. (CSCI), private marine and cargo surveyor, was hired by PPI to determine the "outturn" of the cargo shipped,
 by taking draft readings of the vessel prior to and after discharge
o shortage in the cargo of 106.726 M/T and that a portion of the Urea fertilizer approximating 18 M/T was contaminated with dirt
• Certificate of Shortage/Damaged Cargo prepared by PPI
o short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having been polluted with sand, rust and dirt
• PPI sent a claim letter 1974 to Soriamont Steamship Agencies (SSA), the resident agent of the carrier, KKKK, for P245,969.31 representing the cost
of the alleged shortage in the goods shipped and the diminution in value of that portion said to have been contaminated with dirt
o SSA: what they received was just a request for shortlanded certificate and not a formal claim, and that they "had nothing to do with the
discharge of the shipment
• RTC: failure to destroy the presumption of negligence against them, SSA are liable
• CA: REVERSED - failed to prove the basis of its cause of action
ISSUE: W/N a time charter between a shipowner and a charterer transforms a common carrier into a private one as to negate the civil law presumption of
negligence in case of loss or damage to its cargo

HELD: NO. petition is DISMISSED

• When PPI chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ of the shipowner and therefore
continued to be under its direct supervision and control. Hardly then can we charge the charterer, a stranger to the crew and to the ship, with the
duty of caring for his cargo when the charterer did not have any control of the means in doing so
• carrier has sufficiently overcome, by clear and convincing proof, the prima facie presumption of negligence. The hatches remained close and tightly
sealed while the ship was in transit as the weight of the steel covers made it impossible for a person to open without the use of the ship's boom.
• bulk shipment of highly soluble goods like fertilizer carries with it the risk of loss or damage. More so, with a variable weather condition prevalent
during its unloading
o This is a risk the shipper or the owner of the goods has to face. Clearly, KKKK has sufficiently proved the inherent character of the goods
which makes it highly vulnerable to deterioration; as well as the inadequacy of its packaging which further contributed to the loss.
o On the other hand, no proof was adduced by the petitioner showing that the carrier was remise in the exercise of due diligence in order to
minimize the loss or damage to the goods it carried.

Caltex [Philippines], Inc. vs. Sulpicio Lines, Inc.

Facts:

On December 20, 1987, motor tanker MV Vector, carrying petroleum products of Caltex, collided in the open sea with passenger ship MV Doña Paz, causing
the death of all but 25 of the latter’s passengers. Among those who died were Sebastian Canezal and his daughter Corazon Canezal. On March 22, 1988,
the board of marine inquiry found that Vector Shipping Corporation was at fault. On February 13, 1989, Teresita Cañezal and Sotera E. Cañezal, Sebastian
Cañezal’s wife and mother respectively, filed with the Regional Trial Court of Manila a complaint for damages arising from breach of contract of carriage
against Sulpicio Lines. Sulpicio filed a third-party complaint against Vector and Caltex. The trial court dismissed the complaint against Caltex, but the Court
of Appeals included the same in the liability. Hence, Caltex filed this petition.

Issue:

Is the charterer of a sea vessel liable for damages resulting from a collision between the chartered vessel and a passenger ship?

Held:

First: The charterer has no liability for damages under Philippine Maritime laws.

Petitioner and Vector entered into a contract of affreightment, also known as a voyage charter.

A charter party is a contract by which an entire ship, or some principal part thereof, is let by the owner to another person for a specified time or use; a
contract of affreightment is one by which the owner of a ship or other vessel lets the whole or part of her to a merchant or other person for the conveyance
of goods, on a particular voyage, in consideration of the payment of freight. A contract of affreightment may be either time charter, wherein the leased
vessel is leased to the charterer for a fixed period of time, or voyage charter, wherein the ship is leased for a single voyage. In both cases, the charter-party
provides for the hire of the vessel only, either for a determinate period of time or for a single or consecutive voyage, the ship owner to supply the ship’s
store, pay for the wages of the master of the crew, and defray the expenses for the maintenance of the ship. If the charter is a contract of affreightment,
which leaves the general owner in possession of the ship as owner for the voyage, the rights and the responsibilities of ownership rest on the owner. The
charterer is free from liability to third persons in respect of the ship.

Second: MT Vector is a common carrier

The charter party agreement did not convert the common carrier into a private carrier. The parties entered into a voyage charter, which retains the
character of the vessel as a common carrier. It is imperative that a public carrier shall remain as such, notwithstanding the charter of the whole or portion of
a vessel by one or more persons, provided the charter is limited to the ship only, as in the case of a time-charter or voyage charter. It is only when the
charter includes both the vessel and its crew, as in a bareboat or demise that a common carrier becomes private, at least insofar as the particular voyage
covering the charter-party is concerned. Indubitably, a ship-owner in a time or voyage charter retains possession and control of the ship, although her holds
may, for the moment, be the property of the charterer. A common carrier is a person or corporation whose regular business is to carry passengers or
property for all persons who may choose to employ and to remunerate him. 16 MT Vector fits the definition of a common carrier under Article 1732 of the
Civil Code.

The public must of necessity rely on the care and skill of common carriers in the vigilance over the goods and safety of the passengers, especially because
with the modern development of science and invention, transportation has become more rapid, more complicated and somehow more hazardous. For these
reasons, a passenger or a shipper of goods is under no obligation to conduct an inspection of the ship and its crew, the carrier being obliged by law to
impliedly warrant its seaworthiness.

Third: Is Caltex liable for damages under the Civil Code?

The charterer of a vessel has no obligation before transporting its cargo to ensure that the vessel it chartered complied with all legal requirements. The duty
rests upon the common carrier simply for being engaged in "public service." The relationship between the parties in this case is governed by special laws.
Because of the implied warranty of seaworthiness, shippers of goods, when transacting with common carriers, are not expected to inquire into the vessel’s
seaworthiness, genuineness of its licenses and compliance with all maritime laws. To demand more from shippers and hold them liable in case of failure
exhibits nothing but the futility of our maritime laws insofar as the protection of the public in general is concerned. Such a practice would be an absurdity in
a business where time is always of the essence. Considering the nature of transportation business, passengers and shippers alike customarily presume that
common carriers possess all the legal requisites in its operation.
Belgian Overseas vs Phil First

Facts:

- CMC Trading A.G. shipped on board the M/V Anangel Sky at Hamburg, Germany 242 coils of various Prime Cold Rolled Steel sheets for transportation to
Manila consigned to the Philippine Steel Trading Corporation.
- On July 28, 1990, M/V Anangel Sky arrived at the port of Manila and, within the subsequent days, discharged the subject cargo. Four (4) coils were
found to be in bad order.
- Finding the four (4) coils in their damaged state to be unfit for the intended purpose, the consignee Philippine Steel Trading Corporation declared the
same as total loss.
- Philippine First Insurance paid the claim of Philippine Steel and was thus subrogated.
- Philippine First then instituted a complaint for recovery of the amount paid to the consignee as insured.
- Belgian claims that the damage and/or loss was due to pre-shipment damage, to the inherent nature, vice or defect of the goods, or to perils, danger
and accidents of the sea, or to insufficiency of packing thereof, or to the act or omission of the shipper of the goods or their representatives. Belgian further
argued that their liability, if there be any, should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws. Finally,
Belgian averred that, in any event, they exercised due diligence and foresight required by law to prevent any damage/loss to said shipment.
- The RTC dismissed the complaint.
- The CA reversed and ruled that Belgian were liable for the loss or the damage of the goods shipped, because they had failed to overcome the
presumption of negligence imposed on common carriers. As to the extent of Belgian’s liability, the CA held that the package limitation under COGSA was not
applicable, because the words "L/C No. 90/02447" indicated that a higher valuation of the cargo had been declared by the shipper.

Issues:

- Whether the notice of loss was timely filed. (Belgian claims that pursuant to Section 3, paragraph 6 of COGSA, respondent should have filed its Notice of
Loss within three days from delivery. They assert that the cargo was discharged on July 31, 1990, but that respondent filed its Notice of Claim only on
September 18, 1990.)

Whether the package limitation of liability under COGSA is applicable. (Belgian contends that assuming that they are liable their liability should be limited to
US$500 per package as provided in the Bill of Lading and by Section 4(5)of COGS

Held:

- NO. Mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie
case of fault or negligence against the carrier.
- In this case, Belgian failed to rebut the prima facie presumption of negligence. First, as stated in the Bill of Lading, Belgian received the subject
shipment in good order and condition in Germany. Second, prior to the unloading of the cargo, an Inspection Report prepared and signed by representatives
of both parties showed the steel bands broken, the metal envelopes rust-stained and heavily buckled, and the contents thereof exposed and rusty. Third,
Bad Order Tally Sheet issued by Jardine Davies Transport Services stated that the four coils were in bad order and condition. Normally, a request for a bad
order survey is made in case there is an apparent or a presumed loss or damage.Fourth, the Certificate of Analysis stated that, based on the sample
submitted and tested, the steel sheets found in bad order were wet with fresh water. Fifth, Belgian -- in a letteraddressed to the Philippine Steel --admitted
that they were aware of the condition of the four coils found in bad order and condition.
- YES. First, the provision of COGSA provides that the notice of claim need not be given if the state of the goods, at the time of their receipt, has been the
subject of a joint inspection or survey. Here, prior to unloading the cargo, an Inspection Report as to the condition of the goods was prepared and signed by
representatives of both parties. Second, as stated in the same provision, a failure to file a notice of claim within three days will not bar recovery if it is
nonetheless filed within one year. This one-year prescriptive period also applies to the shipper, the consignee, the insurer of the goods or any legal holder of
the bill of lading.
- A claim is not barred by prescription as long as the one-year period has not lapsed. In the present case, the cargo was discharged on July 31, 1990,
while the Complaint51 was filed by respondent on July 25, 1991, within the one-year prescriptive period.
- YES. In this case, there was no stipulation in the Bill of Lading limiting the carrier's liability. Neither did the shipper declare a higher valuation of the
goods to be shipped. This fact notwithstanding, the insertion of the words "L/C No. 90/02447 cannot be the basis for Belgian’s liability.
- First, a notation in the Bill of Lading which indicated the amount of the Letter of Credit obtained by the shipper for the importation of steel sheets did not
effect a declaration of the value of the goods as required by the bill. That notation was made only for the convenience of the shipper and the bank
processing the Letter of Credit.
- Second, a bill of lading is separate from the Other Letter of Credit arrangements. Thus, Belgian’s liability should be computed based on US$500 per
package and not on the per metric ton price declared in the Letter of Credit.

FGU Insurance vs CA
FACTS:

• Anco Enterprises Company (ANCO), a partnership between Ang Gui and Co To, was engaged in the shipping business operating two common
carriers
o M/T ANCO tugboat
o D/B Lucio barge - no engine of its own, it could not maneuver by itself and had to be towed by a tugboat for it to move from one place to
another.
• September 23 1979: San Miguel Corporation (SMC) shipped from Mandaue City, Cebu, on board the D/B Lucio, for towage by M/T ANCO:
o 25,000 cases Pale Pilsen and 350 cases Cerveza Negra - consignee SMC’s Beer Marketing Division (BMD)-Estancia Beer Sales Office,
Estancia, Iloilo
o 15,000 cases Pale Pilsen and 200 cases Cerveza Negra - consignee SMC’s BMD-San Jose Beer Sales Office, San Jose, Antique
• September 30, 1979: D/B Lucio was towed by the M/T ANCO arrived and M/T ANCO left the barge immediately
o The clouds were dark and the waves were big so SMC’s District Sales Supervisor, Fernando Macabuag, requested ANCO’s representative to
transfer the barge to a safer place but it refused so around the midnight, the barge sunk along with 29,210 cases of Pale Pilsen and 500
cases of Cerveza Negra totalling to P1,346,197
• When SMC claimed against ANCO it stated that they agreed that it would not be liable for any losses or damages resulting to the cargoes by reason
of fortuitous event and it was agreed to be insured with FGU for 20,000 cases or P858,500
• ANCO filed against FGU
o FGU alleged that ANCO and SMC failed to exercise ordinary diligence or the diligence of a good father of the family in the care and
supervision of the cargoes
• RTC: ANCO liable to SMC and FGU liable for 53% of the lost cargoes
• CA affirmed
ISSUE: W/N FGU should be exempted from liability to ANCO for the lost cargoes because of a fortuitous event and negligence of ANCO

HELD: YES. Affirmed with modification. Third-party complainant is dismissed.

• Art. 1733. Common carriers, from the nature of their business and for reasons of public policy are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.
Such extraordinary diligence in vigilance over the goods is further expressed in Articles 1734, 1735, and 1745 Nos. 5, 6, and 7 . . .

• Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following
causes only:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

. . .
• Art. 1739. In order that the common carrier may be exempted from responsibility, the natural disaster must have been the proximate and only
cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize loss before, during and after the occurrence
of flood, storm, or other natural disaster in order that the common carrier may be exempted from liability for the loss, destruction, or
deterioration of the goods . . .
• Caso fortuito or force majeure
o extraordinary events not foreseeable or avoidable, events that could not be foreseen, or which though foreseen, were inevitable
o not enough that the event should not have been foreseen or anticipated, as is commonly believed but it must be one impossible to foresee
or to avoid - not in this case
▪ other vessels in the port of San Jose, Antique, managed to transfer to another place
• To be exempted from responsibility, the natural disaster should have been the proximate and only cause of the loss. There must have been no
contributory negligence on the part of the common carrier.
o there was blatant negligence on the part of M/T ANCO’s crewmembers, first in leaving the engine-less barge D/B Lucio at the mercy of the
storm without the assistance of the tugboat, and again in failing to heed the request of SMC’s representatives to have the barge
transferred to a safer place
• When evidence show that the insured’s negligence or recklessness is so gross as to be sufficient to constitute a willful act, the insurer must be
exonerated.
• ANCO’s employees is of such gross character that it amounts to a wrongful act which must exonerate FGU from liability under the insurance
contract
o both the D/B Lucio and the M/T ANCO were blatantly negligent