Bayne Adjusters and Surveyors vs. Court of Appeals, et al G.R. No. 116332, January 25, 2000

FACTS: Colgate Palmolive Philippines, Inc. imported alkyl benzene from Japan. Said liquid cargo was insured with herein private respondent Insurance Company of North America against all risk for its full value. Petitioner Baynes Ajusters was contracted by the consignee to supervise the proper handling and discharge of the cargo from a chemical tanker to a receiving barge until the cargo is pumped into the consignee’s shore tank. The pumping operation was interrupted several times due to mechanical problems. When the pump broke down once again, petitioner’s surveyor left the premises without leaving any instruction with the foreman what to do in the event that the pump becomes operational again. Later, petitioner sent Amado Fontillas, a cargo surveyor to the premises and it was agreed that the pumping operation would resume the following day. Fontillas tried to inform the barge men but could not find them. When the barge men arrived the following morning, they found the valves of the tank open and resumed operation. The following morning, it was found that an undetermined amount of alkyl benzene was lost due to overflow. Consignee filed a claim with the insurer for the value of the lost cargo.


ISSUE: Will the action for the collection of money by the insurance company as subrogee prosper on account of the negligence of petitioner?


HELD: YES. The petitioner’s failure to closely supervise the discharge of the cargo in accordance with accepted guidelines is the proximate cause of the loss. It is clear that under the standard procedure the surveyor is required to seal all cargo compartment manhole covers and the barge and manifold covers to avoid unsupervised discharge of the liquid cargo and to avert loss. Although the cessation of the pumping operations in this case was not voluntarily requested by the consignee, but was due to the mechanical problems with the pump, there is greater reason to comply with the procedure. The recurring pump break down should have warned the petitioner’s surveyor of the need to exercise extreme caution and closer supervision to safeguard the discharge of the cargo as the pump break down hindered normal pumping operations. It was during the unsupervised discharge of the cargo that the spillage occurred.