Aboitiz Shipping Corporation vs Insurance Company of North America

G.R. 168402
August 6, 2008

Facts: Science Teaching Improvement Project (STIP), Ecotech Center, Sudlon Lahug, Cebu
City, Philippines was named as consignee in a bill of lading. The shipment suffered water damage.
Upon investigation, it was found that at some point, the shipment was placed outside the
warehouse where heavy rains caused the water damage. The consignee tried to seek indemnity
from the petitioner but the petitioner refused, claiming it exercised due diligence.

Issue: Whether or not the petitioner exercised the required degree of diligence?

Held: No - The rule as stated in Article 1735 of the Civil Code is that in cases where the goods are
lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have
acted negligently, unless they prove that they observed extraordinary diligence required by law.
To prove the exercise of extraordinary diligence, petitioner 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 the goods tendered for
transport and that it exercised due care in handling them. Petitioner failed to overcome such
presumption.