Isabela Roque vs IAC

L-66935; 11 November 1985

 Petitioner Roque hired Manila Bay Lighterage Corp. (MBLC), a common carrier, to load &
carry its logs from Palawan to Manila. Roque insured the logs with respondent Pioneer
Insurance for P100,000
 The cargo never reached Manila because the vessel sank. Allegedly, the barge was not
seaworthy such that it developed a leak. Further, one of the hatches was left open causing
water to enter the barge and because the barge was not provided with the necessary cover
or tarpaulin, the ordinary splash of sea waves brought more water inside the barge.
 Roque demanded payment from both MBLC and Pioneer but was denied, hence, it filed a civil
case against them. The RTC ruled in favor of Roque. Only Pioneer appealed.
 CA reversed RTC and absolved Pioneer because:
o There was a breach of implied warranty of seaworthiness on the part of Roque
o The loss was due to perils of the ship (which is not covered by the insurance policy,
and not perils of the sea
 Hence, this appeal. Petitioner Roque argues that:
o The implied warranty of seaworthiness refers only to the responsibility of the shipowner
and not the cargo owner
o The loss of cargo was due to perils of the sea
o That barratry, against which the cargo was also insured, existed when the personnel
of the tugboat and the barge committed a mistake by turning loose the barge from the
tugboat (aka negligence of the crew)
ISSUE + RULING: Should Pioneer be liable to honor the marine insurance policy
NO. It is true that MBLC is liable (since it did not even appeal), but Roque stated that MBLC
ceased operations and nothing can be recovered from them, so they are trying to recover from
the insurer. However, Pioneer should not be made liable.
Implied warranty of seaworthiness
Petitioner argues that as mere shipper of cargo, having no control of the ship, it has nothing to do
with its seaworthiness. The Court does not agree.
As per Secs. 113 and 99 of the Insurance Code, cargo can be the subject of marine insurance
and once so made, the implied warranty of seaworthiness immediately attaches to whoever is
insuring the cargo whether he be the shipowner or not. Moreover, the fact that the
unseaworthiness of the ship was unknown to the insured is immaterial in ordinary marine
insurance and may not be used by him as a defense in order to recover on the marine insurance
policy.
Since the law provides for an implied warranty of seaworthiness in every contract of
ordinary marine insurance, it becomes the obligation of a cargo owner to look for a reliable
common carrier which keeps its vessels in seaworthy condition. The shipper of cargo may
have no control over the vessel but he has full control in the choice of the common carrier that
will transport his goods. Or the cargo owner may enter into a contract of insurance which
specifically provides that the insurer answers not only for the perils of the sea but also provides
for coverage of perils of the ship.
Perils of the sea vs perils of the ship
The insurer undertakes to insure against perils of the sea and similar perils, not against perils of
the ship. There must, in order to make the insurer liable, be some casualty, something which
could not be foreseen as one of the necessary incidents of the adventure.
In this case, when the vessel sank, there was no typhoon but ordinary strong wind and waves, a
condition which is natural and normal in the open sea. The evidence shows that the sinking of
Mable 10 was due to improper loading of the logs on one side so that the barge was tilting on one
side. Likewise, Roque alleged in its complaint that the vessel developed a leak when one of its
barges was negligently open by the person in charge.
Barratry
A barratry in maritime law refers to acts of fraud or gross negligence of a ship’s master or crew
committed at the expense of its owner or other parties. A Barratry clause is a clause which
provides that there can be no recovery on the policy in case of any willful misconduct on the part
of the master or crew in pursuance of some unlawful or fraudulent purpose without the consent
of the owner and to the prejudice of owner’s interest. It requires an intentional and willful act
in its commission. No honest error or judgment or mere negligence, unless criminally
gross, can be barratry.
Here, there is no finding that the loss was occasioned by the willful or fraudulent acts of the
vessel's crew. There was only simple negligence or lack of skill. Hence, Roque cannot claim from
the insurance due to Barratry.