Mindanao Terminal v.

Phoenix Assurance

Facts:

A petition for certiorari was filed by Mindanao Terminl and Brokerage Service Inc. against
Phoenix Assurance Company of NY/Mcgee and Co., Inc.

Del Monte Ph contracted Mindanao Terminal Brokerage Services Inc. to load and stow a
shipment of 146,288 cartons of bananas and pineapples belonging to Del Monte Intl. into the
cargo of M/V Mistrau to be delivered from Davao to Korea. The cargos were insured under an
open cargo policy with Phoenix Assurance.

Upon delivery to Korea, and because of a typhoon, it was found that around 18k of cartons in
total were damaged beyond commercial value. Del Monte filed a claim under the open cargo
policy for damages and Mcgee Insurance recommended payment in the amount of $210k. A
subrogation receipt was issued to Phoenix and Mcgee.

Phoenix and Mcgee then instituted an action for damages against Mindanao Terminal claiming
the latter to be negligent however Mindanao Terminal stated that it would not have agreed to
stow the cargoes unless they were properly secured for voyage.

CA decided the case in favor of Phoenix hence this petition.

Issues:

WON Phoenix and Mcgee sufficiently proved that Mindanao Terminal acted negligently in
transporting the vessel?

Ruling:

No. Phoenix and McGee failed to prove by preponderance of evidence that Mindanao Terminal
had acted negligently.

The only participation of Mindanao Terminal was to load the cargoes on board M/V Mistrau. As
admitted by Phoenix and McGee in their Comment, the latter is merely a stevedoring company
which was tasked by Del Monte to load and stow the shipments. How and where it should load
and stow a shipment in a vessel is wholly dependent on the shipper and the of officers of the
vessel.

It was not disputed by Phoenix and McGee that the materials, such as ropes, pallets, and
cardboards, used in lashing and rigging the cargoes were all provided by M/V Mistrau and these
materials meets industry standard.
It was further established that Mindanao Terminal loaded and stowed the cargoes in
accordance with the stowage plan, prepared by Del Monte Produce and the of officers of M/V
Mistrau. A foreman's report, as proof of work done on board the vessel, was prepared by the
checkers of Mindanao Terminal and concurred in by the Chief Officer of M/V Mistrau after they
were satisfied that the cargoes were properly loaded.

In fact, Byeong, the Company who discovered the damages, found that the cause of the
damage was improper stowage due to the manner the cargoes were arranged such that there
were no spaces between cartons, the use of cardboards as support system, and the use of
small rope to tie the cartons together but not by the negligent conduct of Mindanao Terminal in
loading and stowing the cargoes.

As it is clear that Mindanao Terminal had duly exercised the required degree of diligence
in loading and stowing the cargoes, which is the ordinary diligence of a good father of a
family, the grant of the petition is in order.