Case Digest: National Development Company vs.

Court of Appeals

NATIONAL DEVELOPMENT COMPANY vs. THE COURT OF APPEALS and DEVELOPMENT INSURANCE AND
SURETY CORPORATION

G.R. No. L-49407 19 August 1988

Facts:

National Development Company (NDC) appointed Maritime Company of the Philippines (MCP) as its
agent to manage and operate its vessel, ‘Dona Nati’, for and in behalf of its account. In 1964, while en
route to Japan from San Francisco, Dona Nati collided with a Japanese vessel, ‘SS Yasushima Maru’,
causing its cargo to be damaged and lost. The private respondent, as insurer to the consigners, paid
almost Php400,000.00 for said lost and damaged cargo. Hence, the private respondent instituted an
action to recover from NDC.

Issue:

Which laws govern the loss and destruction of goods due to collision of vessels outside Philippine
waters?

Ruling:

In a previously decided case, it was held that the law of the country to which the goods are to be
transported governs the liability of the common carrier in case of their loss, destruction or deterioration
pursuant to Article 1753 of the Civil Code. It is immaterial that the collision actually occurred in foreign
waters, such as Ise Bay, Japan.

It appears, however, that collision falls among matters not specifically regulated by the Civil Code,
hence, we apply Articles 826 to 839, Book Three of the Code of Commerce, which deal exclusively with
collision of vessels.