Home Assurance Corp.

holding Delsan liable for the loss of the cargo for it negligence in its duty as a
common carrier. CA also agreed with the decision of the RTC stating that
Delsan failed to exercise the extraordinary diligence.

Hence, petitioner filed this case arguing that CA erred in ruling that Article 1734 of the Civil Code cannot
absolve it from liability for the loss of the subject cargo and in not applying the rule on contributory

Page | 37
negligence against Caltex, the shipper-owner of the cargo, and in not taking into consideration the fact
that the loss due to backflow occurred when the diesel oil was already completely delivered to Caltex.

Delsan would have the Court absolve it from liability for the loss of its cargo on two grounds. First , the
loss through spillage was partly due to the contributory negligence of Caltex; and Second, the loss
through backflow should not be borne by Delsan because it was already delivered to Caltex's shore tank.

ISSUE: Will the arguments of the Petitioner prosper?

RULING:

Both the trial court and the CA uniformly ruled that Delsan failed to prove its claim that there was a
contributory negligence on the part of the owner of the goods —Caltex and the Court sees no reason to
depart therefrom. As the Court saw it, the crew of the vessel should have promptly informed the shore
tender that the port mooring line was cut off but Delsan did not do so on the
lame excuse that there was no available banca. As it is, Delsan's personnel signaled a "red light" which
was not a sufficient warning because such signal only meant that the pumping of diesel oil had been
finished. Neither did the blowing of whistle suffice considering the distance of more than 2 kilometers
between the vessel and the Caltex Bulk Depot, aside from the fact that it was not the agreed signal.

Delsan, being a common carrier, should have exercised extraordinary diligence in the performance of its
duties. Consequently, it is obliged to prove that the damage to its cargo was caused by one of the
excepted causes if it were to seek exemption from responsibility. Having failed to do so, Delsan must
bear the consequences.

Hence, the petition was DENIED.

34. Delsan Transport Lines v. CA, G.R. No. 127897, 15 November 2001

CASE 34

DELSAN TRANSPORT LINES V CA

GR No. 127897, Nov. 15, 2007

FACTS:

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines,
Inc., for a period of one year whereby the said common carrier agreed to transport Caltex's industrial fuel
oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took
on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the
Caltex Oil Terminal in Zamboanga City which was insured by private respondent, American Home
Assurance Corporation.

MT Maysun set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early
morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil.
Subsequently, private respondent paid Caltex P5,096,635.57 representing the insured value of the lost
cargo. Exercising its right of subrogation, the private respondent Home Assurance Corp. holding Delsan
liable for the loss of the cargo for it negligence in its duty as a common carrier. CA also agreed with the
decision of the RTC stating that
Delsan failed to exercise the extraordinary diligence.

Hence, petitioner filed this case arguing that CA erred in ruling that Article 1734 of the Civil Code cannot
absolve it from liability for the loss of the subject cargo and in not applying the rule on contributory

Page | 37
negligence against Caltex, the shipper-owner of the cargo, and in not taking into consideration the fact
that the loss due to backflow occurred when the diesel oil was already completely delivered to Caltex.

Delsan would have the Court absolve it from liability for the loss of its cargo on two grounds. First , the
loss through spillage was partly due to the contributory negligence of Caltex; and Second, the loss
through backflow should not be borne by Delsan because it was already delivered to Caltex's shore tank.

ISSUE: Will the arguments of the Petitioner prosper?

RULING:

Both the trial court and the CA uniformly ruled that Delsan failed to prove its claim that there was a
contributory negligence on the part of the owner of the goods —Caltex and the Court sees no reason to
depart therefrom. As the Court saw it, the crew of the vessel should have promptly informed the shore
tender that the port mooring line was cut off but Delsan did not do so on the
lame excuse that there was no available banca. As it is, Delsan's personnel signaled a "red light" which
was not a sufficient warning because such signal only meant that the pumping of diesel oil had been
finished. Neither did the blowing of whistle suffice considering the distance of more than 2 kilometers
between the vessel and the Caltex Bulk Depot, aside from the fact that it was not the agreed signal.

Delsan, being a common carrier, should have exercised extraordinary diligence in the performance of its
duties. Consequently, it is obliged to prove that the damage to its cargo was caused by one of the
excepted causes if it were to seek exemption from responsibility. Having failed to do so, Delsan must
bear the consequences.

Hence, the petition was DENIED.

34. Delsan Transport Lines v. CA, G.R. No. 127897, 15 November 2001

CASE 34

DELSAN TRANSPORT LINES V CA

GR No. 127897, Nov. 15, 2007

FACTS:

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines,
Inc., for a period of one year whereby the said common carrier agreed to transport Caltex's industrial fuel
oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took
on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the
Caltex Oil Terminal in Zamboanga City which was insured by private respondent, American Home
Assurance Corporation.

MT Maysun set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early
morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil.
Subsequently, private respondent paid Caltex P5,096,635.57 representing the insured value of the lost
cargo. Exercising its right of subrogation, the private respondent Home Assurance Corp. holding Delsan
liable for the loss of the cargo for it negligence in its duty as a common carrier. CA also agreed with the
decision of the RTC stating that
Delsan failed to exercise the extraordinary diligence.

Hence, petitioner filed this case arguing that CA erred in ruling that Article 1734 of the Civil Code cannot
absolve it from liability for the loss of the subject cargo and in not applying the rule on contributory

Page | 37
negligence against Caltex, the shipper-owner of the cargo, and in not taking into consideration the fact
that the loss due to backflow occurred when the diesel oil was already completely delivered to Caltex.

Delsan would have the Court absolve it from liability for the loss of its cargo on two grounds. First , the
loss through spillage was partly due to the contributory negligence of Caltex; and Second, the loss
through backflow should not be borne by Delsan because it was already delivered to Caltex's shore tank.

ISSUE: Will the arguments of the Petitioner prosper?

RULING:

Both the trial court and the CA uniformly ruled that Delsan failed to prove its claim that there was a
contributory negligence on the part of the owner of the goods —Caltex and the Court sees no reason to
depart therefrom. As the Court saw it, the crew of the vessel should have promptly informed the shore
tender that the port mooring line was cut off but Delsan did not do so on the
lame excuse that there was no available banca. As it is, Delsan's personnel signaled a "red light" which
was not a sufficient warning because such signal only meant that the pumping of diesel oil had been
finished. Neither did the blowing of whistle suffice considering the distance of more than 2 kilometers
between the vessel and the Caltex Bulk Depot, aside from the fact that it was not the agreed signal.

Delsan, being a common carrier, should have exercised extraordinary diligence in the performance of its
duties. Consequently, it is obliged to prove that the damage to its cargo was caused by one of the
excepted causes if it were to seek exemption from responsibility. Having failed to do so, Delsan must
bear the consequences.

Hence, the petition was DENIED.

34. Delsan Transport Lines v. CA, G.R. No. 127897, 15 November 2001

CASE 34

DELSAN TRANSPORT LINES V CA

GR No. 127897, Nov. 15, 2007

FACTS:

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines,
Inc., for a period of one year whereby the said common carrier agreed to transport Caltex's industrial fuel
oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took
on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the
Caltex Oil Terminal in Zamboanga City which was insured by private respondent, American Home
Assurance Corporation.

MT Maysun set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early
morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil.
Subsequently, private respondent paid Caltex P5,096,635.57 representing the insured value of the lost
cargo. Exercising its right of subrogation, the private respondent Home Assurance Corp. holding Delsan
liable for the loss of the cargo for it negligence in its duty as a common carrier. CA also agreed with the
decision of the RTC stating that
Delsan failed to exercise the extraordinary diligence.

Hence, petitioner filed this case arguing that CA erred in ruling that Article 1734 of the Civil Code cannot
absolve it from liability for the loss of the subject cargo and in not applying the rule on contributory

Page | 37
negligence against Caltex, the shipper-owner of the cargo, and in not taking into consideration the fact
that the loss due to backflow occurred when the diesel oil was already completely delivered to Caltex.

Delsan would have the Court absolve it from liability for the loss of its cargo on two grounds. First , the
loss through spillage was partly due to the contributory negligence of Caltex; and Second, the loss
through backflow should not be borne by Delsan because it was already delivered to Caltex's shore tank.

ISSUE: Will the arguments of the Petitioner prosper?

RULING:

Both the trial court and the CA uniformly ruled that Delsan failed to prove its claim that there was a
contributory negligence on the part of the owner of the goods —Caltex and the Court sees no reason to
depart therefrom. As the Court saw it, the crew of the vessel should have promptly informed the shore
tender that the port mooring line was cut off but Delsan did not do so on the
lame excuse that there was no available banca. As it is, Delsan's personnel signaled a "red light" which
was not a sufficient warning because such signal only meant that the pumping of diesel oil had been
finished. Neither did the blowing of whistle suffice considering the distance of more than 2 kilometers
between the vessel and the Caltex Bulk Depot, aside from the fact that it was not the agreed signal.

Delsan, being a common carrier, should have exercised extraordinary diligence in the performance of its
duties. Consequently, it is obliged to prove that the damage to its cargo was caused by one of the
excepted causes if it were to seek exemption from responsibility. Having failed to do so, Delsan must
bear the consequences.

Hence, the petition was DENIED.

34. Delsan Transport Lines v. CA, G.R. No. 127897, 15 November 2001

CASE 34

DELSAN TRANSPORT LINES V CA

GR No. 127897, Nov. 15, 2007

FACTS:

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines,
Inc., for a period of one year whereby the said common carrier agreed to transport Caltex's industrial fuel
oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took
on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the
Caltex Oil Terminal in Zamboanga City which was insured by private respondent, American Home
Assurance Corporation.

MT Maysun set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early
morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil.
Subsequently, private respondent paid Caltex P5,096,635.57 representing the insured value of the lost
cargo. Exercising its right of subrogation, the private respondent Home Assurance Corp. holding Delsan
liable for the loss of the cargo for it negligence in its duty as a common carrier. CA also agreed with the
decision of the RTC stating that
Delsan failed to exercise the extraordinary diligence.

Hence, petitioner filed this case arguing that CA erred in ruling that Article 1734 of the Civil Code cannot
absolve it from liability for the loss of the subject cargo and in not applying the rule on contributory

Page | 37
negligence against Caltex, the shipper-owner of the cargo, and in not taking into consideration the fact
that the loss due to backflow occurred when the diesel oil was already completely delivered to Caltex.

Delsan would have the Court absolve it from liability for the loss of its cargo on two grounds. First , the
loss through spillage was partly due to the contributory negligence of Caltex; and Second, the loss
through backflow should not be borne by Delsan because it was already delivered to Caltex's shore tank.

ISSUE: Will the arguments of the Petitioner prosper?

RULING:

Both the trial court and the CA uniformly ruled that Delsan failed to prove its claim that there was a
contributory negligence on the part of the owner of the goods —Caltex and the Court sees no reason to
depart therefrom. As the Court saw it, the crew of the vessel should have promptly informed the shore
tender that the port mooring line was cut off but Delsan did not do so on the
lame excuse that there was no available banca. As it is, Delsan's personnel signaled a "red light" which
was not a sufficient warning because such signal only meant that the pumping of diesel oil had been
finished. Neither did the blowing of whistle suffice considering the distance of more than 2 kilometers
between the vessel and the Caltex Bulk Depot, aside from the fact that it was not the agreed signal.

Delsan, being a common carrier, should have exercised extraordinary diligence in the performance of its
duties. Consequently, it is obliged to prove that the damage to its cargo was caused by one of the
excepted causes if it were to seek exemption from responsibility. Having failed to do so, Delsan must
bear the consequences.

Hence, the petition was DENIED.

34. Delsan Transport Lines v. CA, G.R. No. 127897, 15 November 2001

CASE 34

DELSAN TRANSPORT LINES V CA

GR No. 127897, Nov. 15, 2007

FACTS:

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport Lines,
Inc., for a period of one year whereby the said common carrier agreed to transport Caltex's industrial fuel
oil from the Batangas-Bataan Refinery to different parts of the country. Under the contract, petitioner took
on board its vessel, MT Maysun, 2,277.314 kiloliters of industrial fuel oil of Caltex to be delivered to the
Caltex Oil Terminal in Zamboanga City which was insured by private respondent, American Home
Assurance Corporation.

MT Maysun set sail from Batangas for Zamboanga City. Unfortunately, the vessel sank in the early
morning of August 16, 1986 near Panay Gulf in the Visayas taking with it the entire cargo of fuel oil.
Subsequently, private respondent paid Caltex P5,096,635.57 representing the insured value of the lost
cargo. Exercising its right of subrogation, the private respondent