1. DELSAN TRANSPORT LINES, INC vs.
AMERICAN Delsan failed to prove its claim that there was a contributory
HOME ASSURANCE CORPORATION
G.R. No. 149019, August 15, 2006
FACTS:
Delsan is a domestic corporation which owns and operates the vessel
MT Larusan. On the other hand, respondent American Home Assurance
Corporation (AHAC for brevity) is a foreign insurance company duly. It
is engaged, among others, in insuring cargoes for transportation within
the Philippines. Unloading operations commenced, discharging of the
diesel oil. The discharging had to be stopped on account of the
discovery that the port bow mooring of the vessel was intentionally cut
or stolen by unknown persons. Because there was nothing holding it,
the
vessel drifted westward, ultimately caused the diesel oil to spill into the
sea.
As a result of spillage and backflow of diesel oil, Caltex sought
recovery of the loss from Delsan, but the latter refused to pay. As
insurer, AHAC paid Caltex. AHAC, as Caltex’s subrogee, instituted Civil
Case against Delsan.
caused by the spillage. It likewise prayed that it be indemnified for
damages suffered
Delsan insists that the rule on contributory negligence against Caltex,
the shipper-owner of the cargo, and the diesel oil was already
completely delivered to Caltex.
ISSUE:
W.O.N. Delsan is liable based on Article 1734 of the
NCC and W.O.N. the rule on contributory negligence
should be applied against Caltex.
HELD:
Petition is DENIED. CA is affirmed.
Art. 1734. Common carriers are responsible for the
loss, destruction, or deterioration of the goods, unless
the same is due to any of the following causes only:
1) Flood storm, earthquake, lightning, or other natural
disaster or calamity;
2) Act of the public enemy in war, whether
international or civil;
3) Act or omission of the shipper or owner of the
goods;
4) The character of the goods or defects in the packing
or in the containers;
5) Order or act of competent public authority.
negligence on the part of the owner of the goods – Caltex. Dlesan, as
the owner of the vessel, was obliged to prove that the loss was caused
by one of the excepted causes if it were to seek exemption from
responsibility. Unfortunately, it miserably failed to discharge this
burden by the required quantum of proof.
Delsan’s argument that it should not be held liable for the loss
of diesel oil due to backflow because the same had already been
actually and legally delivered to Caltex at the time it entered the shore
tank holds no water. It had been settled that the subject cargo was still
in the custody of Delsan because the discharging
thereof has not yet been finished.
2. Sarkies Tours Philipines, Inc. vs. CA
G.R. No. 108897
Facts:
Fatima Fortades was a passenger of one of the buses of
petitioner Sarkies Tours bound for Legazpi City. She had onboard
luggages which contained important documents and personal
belongings. Her belongings were kept in the baggage compartment of
the bus, but during a stopover at Daet, it was discovered that only one
bag remained in the open compartment. The others, including Fatima's
things, were missing and might have dropped along the way. Despite
the suggestion of the passengers to retrace its route in order to recover
their luggage, the driver nevertheless neglected themand continued
driving. Consequently, respondents filed a case to recover the value of
the remaining lost items, as well as moral and exemplary damages,
attorney's fees and expenses of litigation. They claimed
that the loss was due to petitioner's failure to observe extraordinary
diligence in the care of Fatima's luggage and that petitioner dealt with
them in bad faith from the start. Petitioner, on the other hand,
disowned any liability for the loss on the ground that Fatima allegedly
did not declare any excess baggage upon boarding its bus.
Issue:
Whether or not Sarkies is liable for damages for lost propery of its
passengers.
Held:
The Supreme Court held that Sarkies is liable for the loss. The cause of
the loss was petitioner's negligence in not ensuring that the doors of
the baggage compartment of its bus were securely fastened.
 As a result of this lack of care, almost the entire luggage was
lost, to the prejudice of the paying passengers.
Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the
vigilance over the goods transported by them.
This liability lasts from the time the goods are unconditionally
placed in the possession of, and received by the
carrier for transportation until the same are delivered, actually or
constructively, by the carrier to the
person who has a right to receive them. The awarding of actual
damages to respondents is just because
their efforts in recovering the lost items must be well compensated.
Moral and exemplary damages must
also be awarded in the presence of bad faith and negligence on the part
of the common carrier.
Sarkies Tours Philippines vs. Court of Appeals and Elino, Marisol and
Fatima Minerva Fortades
G.R. No. 108897, October 2, 1997
280 SCRA 58
FACTS:
Fatima Fortades boarded petitioner Sarkies Tours’ De Luxe Bus in
Manila on her way to Legazpi City. Her three luggages were loaded in
the baggage compartment of the bus. However, during a stopover at
Daet, it was discovered that only one bag remained in the open
compartment. Fatima and her family went to great lengths to recover
the luggages but only one bag was returned to them. They reported to
the police, the NBI, and the regional and head offices of petitioner. Her
mother even sought the assistance of Philtranco bus drivers and the
radio stations.
After more than nine months of fruitless waiting, respondents filed a
case to recover the value of the remaining lost items, as well as moral
and exemplary damages, attorney’s fees and expenses of litigation.
vigilance over the goods transported by them, and this liability “lasts
from the time the goods are unconditionally placed in the possession
of, and received by the carrier for transportation until the same are
delivered, actually or constructively, by the carrier to the person who
has a right to receive them,” unless the loss is due to any of the
excepted causes under Article 1734 thereof. The cause of the loss was
petitioner’s negligence in not ensuring that the doors of the baggage
compartment of its bus were securely fastened. As a result of this lack
of care, almost all of the luggage was lost, to the prejudice of the
paying passengers.
2. Yes. Under the circumstances, respondents are entitled to the award
of damages. It is not disputed that of the three pieces of luggage of
Fatima, only one was recovered. The other two contained optometry
books, materials, equipment, as well as vital documents and personal
belongings. Respondents had to shuttle between Bicol and Manila in
their efforts to be compensated for the loss. During the trial, Fatima and
Marisol had to travel from the United States just to be able to testify.
Expenses were also incurred in reconstituting their lost documents.
The Court agrees with the Court of Appeals in awarding P30,000.00 for
the lost items and P30,000.00 for the transportation expenses, but
disagrees with the deletion of the award of moral and exemplary
damages which, in view of the foregoing proven facts, with negligence
and bad faith on the fault of petitioner having been duly established,
should be granted to respondents in the amount of P20,000.00 and
P5,000.00, respectively.

RTC rendered a favorable judgment. On appeal, the appellate court

affirmed the trial court’s judgment, but deleted the award of moral and
exemplary damages.

ISSUES:
1. Whether or not carrier was responsible for the loss.
2. Whether or not respondents are entitled to the award of damages.
RULING:
1. It has been established that the carrier received the luggages.
From the nature of their business and for reasons of public policy,
common carriers are bound to observe extraordinary diligence in the
3.Tabacalera Insurance Co., Prudential Guarantee & Assurance, Inc.,
and New Zealand Insurance Co., Ltd. vs. North Front Shipping Services,
Inc. and Court of Appeals
G.R. No. 119197. May 16, 1997
FACTS: On 2 August 1990, 20,234 sacks of corn grains were shipped on
board a vessel owned by the carrier. The vessel was inspected prior to
actual loading by representatives of the shipper and was found fit to
carry the merchandise.
The unloading operations took twenty (20) days after the arrival of the
barge at the wharf of the consignee in Manila. There was also a
shortage of 26.333 metric tons and the remaining cargo were
deteriorating.
The corn grains were examined and the laboratory analysis certificate
revealed that the corn grains were contaminated with salt water but the
mold growth could be stopped by drying and would still fit for
consumption. However, the consignee rejected the entire cargo and
demanded for payment for damages which were settled by the insurers.
The insurance companies hired Marine Cargo Adjusters to conduct a
survey and the latter found cracks in the bodega of the barge and
heavy concentration of molds on the tarpaulins and wooden boards.
The tarpaulins were not brand new as there were patches on them,
contrary to the claim of North Front Shipping Services, Inc., thus
making it possible for water to seep in. They also discovered that the
bulkhead of the barge was rusty and no seals in the hatches.
carriers to render service with the greatest skill and foresight and ‘to
use all reasonable means to ascertain the nature and characteristics of
goods tendered for shipment, and to exercise due care in the handling
and stowage, including such methods as their nature requires.’
In this case the master of the vessel and his crew failed to undertake
precautionary measures to avoid or lessen the cargo’s possible
deterioration as they were presumed knowledgeable about the nature
of the cargo having been in the service for almost three decades.
2. No. The Court also found that the consignee was guilty of
contributory negligence. No explanation was given by the the
consignee why there was a delay of six (6) days in unloading the cargo.
The loss could have been avoided or minimized if they commenced the
unloading immediately. The consignee should share at least 40% of the
loss for its contributory negligence.
NOTES:
Mere proof of delivery of the goods in good order to a common carrier,
and of their arrival at the place of destination in bad order, makes
out prima facie case against the common carrier, so that if no
explanation is given as to how the loss, deterioration or destruction of
the goods occurred, the common carrier must be held responsible.
Otherwise stated, it is incumbent upon the common carrier to prove
that the loss, deterioration or destruction was due to accident or some
other circumstances inconsistent with its liability. (Compania Maritima
v. Court of Appeals)

Parties
Respondent Carrier – North Front Shipping Services, Inc.
Consignee – Republic Flour Mills Corporation
Petitioner Insurers – Tabacalera Insurance Co., Prudential Guarantee &
Assurance, Inc., and New Zealand Insurance Co., Ltd.
ISSUES:
1. Whether or not the carrier observed extraordinary diligence in their
vigilance over the cargo they transported.
2. Whether or not the carrier was the sole responsible for the loss
destruction, loss or deterioration of the cargo.
RULING:
1. No. The carrier failed to observe the required extraordinary diligence
in the vigilance over the goods placed in its care. The extraordinary
diligence in the vigilance over the goods tendered for shipment
requires the common carrier to know and to follow the required
precaution for avoiding damage to, or destruction of the goods
entrusted to it for safe carriage and delivery. It requires common
4. Macam v. Court of Appeals
313 SCRA 77
Facts:
Petitioner Macam exported watermelons and mangoes to Hong Kong,
Great Prospect Company is the consignee. The bill of lading stated that
one of the bill must be presented by the Pakistan Bank as
consignee and GPC as the notify party. Upon arrival in Hong Kong, the
shipment was delivered by the carrier directly to GPC and not to
Pakistan Bank and without surrendering the bill of lading.
Issue:
Whether or not there was a valid delivery.
Held:
The extraordinary responsibility of common carriers last until actual or
constructive delivery of the cargo to the consignee or his agent.
Pakistan was indicted as consignee and GPC was the notify party.
However, in the export invoice, GPC was clearly named as buyer or
importer. Petitioner referred to GPC as such in his demand letter to
respondent and his complaint before the court. This premise brings
into conclusion that the deliveries of the cargo to GPC as buyer or
importer is in conformity with Art. 1736 of the Civil Code. Therefore,
there was a valid delivery.
4. Benito Macam, doing business under the name and style Ben-Mac
Enterprises vs. Courts of Appeals, China Ocean Shipping Co., and/or
Wallem Philippines Shipping, Inc.
G.R. No. 125524, August 25, 1999
Upon arrival in Hongkong and after receiving a telex instruction, the
shipment was delivered by respondent Wallem directly to GPC, not to
Pakistan Bank, and without the required bill of lading having been
surrendered. Subsequently, GPC failed to pay Pakistan Bank such that
the latter, still in possession of the original bills of lading, refused to
pay petitioner through Solidbank.
ISSUE:
Is Wallem liable for the goods it delivered to GPC without presentation
of the bills of lading and bank guarantee?
RULING:
NO. Wallem is not liable for the following reasons:
1. It delivered the goods to the person who has the right to receive
them. This is in accordance with Art. 1736 which states that: The
extraordinary responsibility of the common carriers lasts from the time
the goods are unconditionally placed in the possession of, and
received by the carrier for transportation until the same are delivered,
actually or constructively, by the carrier to the consignee, or to the
person who has a right to receive them, without prejudice to the
provisions of article 1738. GPC, even though designated as the notify
party in the bills of lading, was clearly named as buyer/importer in the
export invoices.
2. The petitioner sent instructions through telex to deliver various
shipments to the respective consignees without need of presenting the
bill of lading and bank guarantee per the respective shipper’s request
since “for prepaid shipt ofrt charges already fully paid.” GPC is listed
as one among the several consignees in the telex.

FACTS:
On 6 April 1989, petitioner Benito Macam shipped on board the vessel
Nen Jiang, owned and operated by respondent China Ocean Shipping
Co., through local agent respondent Wallem Philippines Shipping, Inc.
boxes of watermelons and mangoes which were covered by bill of
ladings and exported through letters of credit issued by National Bank
of Pakistan, Hongkong (Pakistan Bank). The Bills of Lading contained
the following pertinent provision: “One of the Bills of Lading must be
surrendered duly endorsed in exchange for the goods or delivery
order.” The shipment was bound for Hongkong with Pakistan Bank as
consignee and Great Prospect Company of Kowloon, Hongkong (GPC)
as notify party.
On 6 April 1989, copies of the bills of lading and commercial invoices
were submitted to petitioner’s depository bank, Consolidated Banking
Corporation (Solidbank), which paid petitioner in advance the total
value of the shipment.
5. Samar Mining Co. v. Nordeutscher Lloyd & C.F. Sharp & Co. Inc.
G.R. No. L-28673
Facts:
Herein petitioner and defendant entered into a contract where the
former agreed to ship a crate of optima wielded wedge wire sleeves,
with the Bill of Lading indicated the effective transportation from
Germany to Manila only.
From Manila, the crate was to be further transported to Davao. The
carrier had unloaded and delivered the goods in the rouded warehouse
in Manila. Unfortunately, the goods were lost and never reached Davao
City.
Issue:
Whether or not herein petitioner is liable for the loss.
Held:
The court rules the negative, when the carrier under the terms of the
Bill of Lading had delivered the goods at the port of destination, at that
point he merely becomes the agent of the consignee and ceases to be
liable for any loss a damage of goods transported.
Furthermore, there is no applicability of Article 1738 of the New
Civil Code, which contemplates liability of the carrier of the shipment of
goods while stored in the warehouse of the carrier. However, in the
present case, the warehouse belonged to a third person.
6. Servando v. Philippine Steam Navigation Co.
117 SCRA 832
Facts:
Clara Uy Bico and Amparo Servando loaded on board the
appellant's vessel, FS-176, for carriage
from Manila to Pulupandan, Negros Occidental cargoes of cavans of
rice and cartons of colored paper which were evidenced by bills of
lading.
Upon arrival of the vessel at Pulupandan the cargoes were
discharged, complete and in good order, unto the warehouse of the
Bureau of Customs. At about 2:00 in the afternoon of the same day,
said warehouse was razed by a fire of unknown origin, destroying
appellees' cargoes.
Before the fire, however, appellee Uy Bico was able to take
delivery of 907 cavans of rice Appellees' claims for the value of said
goods were rejected by the appellant.
Issue:
Whether or not carrier is liable for the loss of the cargo.
Held:
The court a quo held that the delivery of the shipment in question to the
warehouse of the Bureau of Customs is not the delivery contemplated
by Article 1736; and since the burning of the warehouse
occurred before actual or constructive delivery of the goods to the
appellees, the loss is chargeable against the appellant.
Article 1736 of the Civil Code imposes upon common carriers
the duty to observe extraordinary diligence from the moment the goods
are unconditionally placed in their possession "until
the same are delivered, actually or constructively, by the carrier to the
consignee or to the person who has a right to receive them, without
prejudice to the provisions of Article 1738. "
It should be pointed out, however, that in the bills of lading
issued for the cargoes in question, the parties agreed to limit the
responsibility of the carrier for the loss or damage that may be caused
to thenshipment by inserting therein the following stipulation:
Clause 14. Carrier shall not be responsible for loss or damage
to shipments billed 'owner's risk' unless such loss or damage is due to
negligence of carrier. Nor shall carrier be responsible for loss or
damage caused by force majeure, dangers or accidents of the sea or
other waters; war; public enemies; . . . fire . ...
The Court sustains the validity of the above stipulation. There is
nothing therein that is contrary to law, morals or public policy.
Therefore, the carrier is no longer liable for the loss of the goods.
Edgar Cokaliong Shipping Lines v. UCPB General insurance Company,
June 25, 2003
Pdf file ito. HAHAHAHAHA
BASCOS vs. COURT OF APPEALS and RODOLFO A. CIPRIANO
G.R. No. 101089
April 7, 1993
FACTS: Rodolfo A. Cipriano representing Cipriano Trading Enterprise
(CIPTRADE for short) entered into a hauling contract with Jibfair
Shipping Agency Corp whereby the former bound itself to haul the
latter’s 2,000 m/tons of soya bean meal to the warehouse in Calamba,
Laguna. To carry out its obligation, CIPTRADE, through Cipriano,
subcontracted with Bascos to transport and to deliver 400 sacks of
soya bean meal from the Manila Port Area to Calamba, Laguna.
Petitioner failed to deliver the said cargo. As a consequence of that
failure, Cipriano paid Jibfair Shipping Agency the amount of the lost
goods in accordance with their contract.
Cipriano demanded reimbursement from petitioner but the latter
refused to pay. Eventually, Cipriano filed a complaint for a sum of
money and damages with writ of preliminary attachment for breach of a
contract of carriage. The trial court granted the writ of preliminary
attachment.
In her answer, petitioner interposed the defense that there was no
contract of carriage since CIPTRADE leased her cargo truck to load the
cargo from Manila Port Area to Laguna and that the truck carrying the
cargo was hijacked and being a force majeure, exculpated petitioner
from any liability
After trial, the trial court rendered a decision in favor of Cipriano and
against Bascos ordering the latter to pay the former for actual damages
for attorney’s fees and cost of suit.
The “Urgent Motion To Dissolve/Lift preliminary Attachment” Bascos is
DENIED for being moot and academic.
Petitioner appealed to the Court of Appeals but respondent Court
affirmed the trial court’s judgment.
Hence this petition for review on certiorari
ISSUE:
(1) WON petitioner a common carrier
(2) WON the hijacking referred to a force majeure
HELD: The petition is DISMISSED and the decision of the Court of
Appeals is hereby AFFIRMED.
1. YES
In disputing the conclusion of the trial and appellate courts that
petitioner was a common carrier, she alleged in this petition that the
contract between her and Cipriano was lease of the truck. She also
stated that: she was not catering to the general public. Thus, in her
answer to the amended complaint, she said that she does business
under the same style of A.M. Bascos Trucking, offering her trucks for
lease to those who have cargo to move, not to the general public but to
a few customers only in view of the fact that it is only a small business.
We agree with the respondent Court in its finding that petitioner is a
common carrier.
Article 1732 of the Civil Code defines a common carrier as “(a) person,
corporation or firm, or association engaged in the business of carrying
or transporting passengers or goods or both, by land, water or air, for
compensation, offering their services to the public.” The test to
determine a common carrier is “whether the given undertaking is a part
of the business engaged in by the carrier which he has held out to the
general public as his occupation rather than the quantity or extent of
the business transacted.” 12 In this case, petitioner herself has made
the admission that she was in the trucking business, offering her trucks
to those with cargo to move. Judicial admissions are conclusive and no
evidence is required to prove the same. 13
But petitioner argues that there was only a contract of lease because
they offer their services only to a select group of people. Regarding the
first contention, the holding of the Court in De Guzman vs. Court of
Appeals 14 is instructive. In referring to Article 1732 of the Civil Code, it
held thus:
“The above article makes no distinction between one whose principal
business activity is the carrying of persons or goods or both, and one
who does such carrying only as an ancillary activity (in local idiom, as a
“sideline”). Article 1732 also carefully avoids making any distinction
between a person or enterprise offering transportation service on a
regular or scheduled basis and one offering such service on an
occasional, episodic or unscheduled basis. Neither does Article 1732
distinguish between a carrier offering its services to the “general
public,” i.e., the general community or population, and one who offers
services or solicits business only from a narrow segment of the general
population. We think that Article 1732 deliberately refrained from
making such distinctions.”
2. NO
Likewise, We affirm the holding of the respondent court that the loss of
the goods was not due to force majeure.
Common carriers are obliged to observe extraordinary diligence in the
vigilance over the goods transported by them. Accordingly, they are
presumed to have been at fault or to have acted negligently if the goods
are lost, destroyed or deteriorated. There are very few instances when
the presumption of negligence does not attach and these instances are
enumerated in Article 1734. 19 In those cases where the presumption is
applied, the common carrier must prove that it exercised extraordinary
diligence in order to overcome the presumption.
In this case, petitioner alleged that hijacking constituted force majeure
which exculpated her from liability for the loss of the cargo. In De
Guzman vs. Court of Appeals, the Court held that hijacking, not being
included in the provisions of Article 1734, must be dealt with under the
provisions of Article 1735 and thus, the common carrier is presumed to
have been at fault or negligent. To exculpate the carrier from liability
arising from hijacking, he must prove that the robbers or the hijackers
acted with grave or irresistible threat, violence, or force. This is in
accordance with Article 1745 of the Civil Code which provides:
“Art. 1745. Any of the following or similar stipulations shall be
considered unreasonable, unjust and contrary to public policy; xx
(6) That the common carrier’s liability for acts committed by thieves, or
of robbers who do not act with grave or irresistible threat, violences or
force, is dispensed with or diminished;” xx
NOTES:
1. She cited as evidence certain affidavits which referred to the
contract as “lease”. These affidavits were made by Jesus Bascos and
by petitioner herself and Cipriano and CIPTRADE did not object to the
presentation of affidavits by petitioner where the transaction was
referred to as a lease contract. Both the trial and appellate courts have
dismissed them as self-serving and petitioner contests the conclusion.
We are bound by the appellate court’s factual conclusions. Yet,
granting that the said evidence were not self-serving, the same were
not sufficient to prove that the contract was one of lease. It must be
understood that a contract is what the law defines it to be and not what
it is called by the contracting parties. Furthermore, petitioner presented
no other proof of the existence of the contract of lease. He who alleges
a fact has the burden of proving it.
2. Having affirmed the findings of the respondent Court on the
substantial issues involved, We find no reason to disturb the
conclusion that the motion to lift/dissolve the writ of preliminary
attachment has been rendered moot and academic by the decision on
the merits.
Eastern Shipping Lines vs. IAC
150 SCRA 463
Facts:
In GR 69044, the M/S ASIATICA, a vessel operated by Eastern Shipping
Lines loaded at Kobe,
Japan for Manila:
(1) 5,000 pieces of calorized lance pipes in 28 packages valued at
P256,039.00 consigned to
Philippine Blooming Mills Co., Inc.,
(2) 7 cases of spare parts valued at P92,361.75, consigned to Central
Textile Mills, Inc.
Both sets of goods were insured for their value with Development
Insurance and Surety Corporation.
In GR 71478, the same vessel took on board :
1. 128 cartons of garment fabrics and accessories, in 2 containers,
consigned to Mariveles
Apparel Corporation
2. two cases of surveying instruments consigned to Aman Enterprises
and General
Merchandise.
The 128 cartons were insured for their value by Nisshin Fire &
Marine Insurance Co., for US$46,583.00. The 2 cases by Dowa Fire &
Marine Insurance Co., Ltd., for US$11,385.00. Enroute for Kobe, Japan,
to Manila, the vessel caught fire and sank, resulting in the total loss of
ship and cargo.
The respective Insurers paid the corresponding marine
insurance values to the consignees concerned and were thus
subrogated unto the rights of the latter as the insured.
Eastern Shipping denied liability mainly on the ground that the loss
was due to an extraordinary fortuitous event; hence, it is not liable
under the law. The Trial Court rendered judgment in favor of
Development Insurance in the amounts of P256,039.00 and P92,361.75,
respectively, with legal interest, plus P35,000.00 as attorney’s fees and
costs. Eastern Shipping took an appeal to the then Court of Appeals
which, on 14 August 1984, affirmed the decision of the trial court.
Eastern Shipping filed a petition for review on certiorari.
Nisshin, and Dowa, as subrogees of the insured, filed suit against
Eastern Shipping for the recovery of the insured value of the cargo lost
imputing unseaworthiness of the ship and non-observance
of extraordinary diligence by Eastern Shipping. Eastern Shipping
denied liability on the principal grounds that the fire which caused the
sinking of the ship is an exempting circumstance under Section 4(2) (b)
of the Carriage of Goods by Sea Act (COGSA); and that when the loss
of fire is established, the burden of proving negligence of the vessel is
shifted to the cargo shipper. Trial Court rendered judgment in favor of
Nisshin and Dowa. CA affirmed decision. Hence this petition on
certiorari.
Issue:
Whether or not the carrier exercised extraordinary diligence.
Held:
Eastern Shipping shall pay the Development Insurance the amount of
P256,039 for the 28
packages of calorized lance pipes, and P71,540 for the 7 cases of spare
parts, with interest at the legal
rate from the date of the filing of the Complaint on 13 June 1978, plus
P5,000 as attorney’s fees, and the
costs. The Court, on the other hand, in GR 71478, affirmed the
judgment.
The evidence of the defendant did not show that extraordinary
diligence was observed by the
vessel to prevent the occurrence of fire at hatches nos. 2 and 3.
Defendant’s evidence did not likewise
show the amount of diligence made by the crew, on orders, in the care
of the cargoes. What appears is
that after the cargoes were stored in the hatches, no regular inspection
was made as to their condition
during the voyage. The complete defense afforded by the COGSA when
loss results from fire is
unavailing to Eastern Shipping. The Carriage of Goods by Sea Act
(COGSA), a special law, is merely
suppletory to the provisions of the Civil Code The fire may not be
considered a natural disaster or
calamity, as it arises almost invariably from some act of man or by
human means. It does not fall within
the category of an act of God unless caused by lightning or by other
natural disaster or calamity. It may
even be caused by the actual fault or privity of the carrier.
National
Ganzon v. Court of Appeals
161 SCRA 646
Facts:
Ganzon, petitioner herein, was hired by Tumambing to haul 305 tons of
scrap iron. The contract was for the petitioner to transport the scrap
iron to Manila from Bataan. Tumambing delivered the scrap
iron to Niza, captain of the lighter LCT “Batman”, to board it on the
same. The crew of the Batman started to load the iron, and when they
were about halfway through, Mayor Advincula arrived and demanded
P5,000 from Tumambing. The latter resisted and a heated argument
started. Mayor Advincula drew his
gun and fired at Tumambing. He was brought to the hospital for
treatment, lucky for him the wound was not fatal.A few days after this
incident, the loading of the scrap metal was resumed. However, the
acting Mayor this time went to the port where the Batman was docked.
He was accompanied by 3 policemen and he ordered Captain Niza to
dump the scrap iron where the lighter was docked. What was left of the
iron was confiscated by the Acting Mayor and brought to NASSCO. A
receipt was issued showing that
the municipality had taken custody of the scraps or iron.
Tumambing filed a case in order to recover damages for the
loss that he sustained. The lower court rendered a decision in favor of
Ganzon. However, on appeal the Court of Appeals reversed the
decision ordering Ganzon to pay Tumambing P5,895 as actual
damages, P5,000 for exemplary damages and attorney’s fees as well.
Hence this petition by Ganzon.
Issue:
Whether or not Ganzon is liable for the loss that Tumambing
sustained.
Held:
The Court held that Ganzon is liable for the loss of Tumambing. The
defense that the scraps of iron were not unconditionally placed in his
custody and control is untenable. Petitioner herein admits that the
scraps of iron were delivered to Captain Niza by Tumambing in order to
load the same on the lighter Batman. The employees of Ganzon
received the scraps of iron on his behalf, therefore the scraps of metal
were placed in his custody and control. Upon the receipt of the scraps
by the carrier in order transport the same, the contract of carriage was
perfected. Upon perfection of the contract, the exercise of extraordinary
diligence in caring for the goods shall also commence to begin.
Article 1738 of the NCC provides that the exercise of
extraordinary diligence shall cease only upon delivery to the consignee
or to the person who has the right to receive the same. In this case,
there was no delivery made to the consignee, therefore the carrier
should have exercised extraordinary diligence in taking care of the
scraps of iron. It is irrelevant that the scraps of iron were only partially
loaded on the lighter. The scraps of iron were already under the
custody and control of the carrier, therefore he shall be liable for its
loss.
CASE DIGEST in Transportation Law: PHILIPPINE AMERICAN
GENERAL INSURANCE CO., INC. vs. MGG MARINE SERVICES,
INC. (G.R. No. 135645, March 8, 2002)
FACTS: On March 1, 1987, San Miguel Corporation insured several beer bottle cases with
petitioner Philippine American General Insurance Company. The cargo were loaded on
board the M/V Peatheray Patrick-G to be transported from Mandaue City to Bislig, Surigao
del Sur.
After having been cleared by the Coast Guard Station in Cebu the previous day, the vessel
left the port of Mandaue City for Bislig, Surigao del Sur on March 2, 1987. The weather
was calm when the vessel started its voyage.
The following day, M/V Peatheray Patrick-G listed and subsequently sunk off Cawit Point,
Cortes, Surigao del Sur. As a consequence thereof, the cargo belonging to San Miguel
Corporation was lost.
Petitioner paid San Miguel Corporation the full amount of the cargo pursuant to the terms
of their insurance contract, and as subrogee filed with the Regional Trial Court (RTC) of
Makati City a case for collection against private respondents to recover the amount it paid.
Meanwhile, the Board of Marine Inquiry conducted its own investigation and found that the
cause of the sinking of the vessel was the existence of strong winds and enormous waves
in Surigao del Sur, a fortuitous event that could not have been for seen at the time the M/V
Peatheray Patrick-G left the port of Mandaue City. It was further held by the Board that
said fortuitous event was the proximate and only cause of the vessel's sinking.
ISSUE: Whether or not respondent MGG should be held liable.
HELD: No. [Common carriers, from the nature of their business and for reasons of public
policy, are mandated to observe extraordinary diligence in the vigilance over the goods
and for the safety of the passengers transported by them. Owing to this high degree of
diligence required of them, common carriers, as a general rule, are presumed to have
been at fault or negligent if the goods transported by them are lost, destroyed or if the
same deteriorated.
However, this presumption of fault or negligence does not arise in the cases enumerated
under Article 1734 of the Civil Code:
Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following causes only:(1) Flood, storm, earthquake,
lightning or other natural disaster or calamity;(2) Act of the public enemy in war, whether
international or civil;(3) Act or omission of the shipper or owner of the goods;(4) The
character of the goods or defects in the packing or in the containers;(5) Order or act of
competent public authority.]
In order that a common carrier may be absolved from liability where the loss, destruction or
deterioration of the goods is due to a natural disaster or calamity, it must further be shown
that the such natural disaster or calamity was the proximate and only cause of the loss;
there must be "an entire exclusion of human agency from the cause of the injury of the
loss."Moreover, even in cases where a natural disaster is the proximate and only cause of
the loss, a common carrier is still required to exercise due diligence to prevent or minimize
loss before, during and after the occurrence of the natural disaster, for it to be exempt from
liability under the law for the loss of the goods. If a common carrier fails to exercise due
diligence--or that ordinary care which the circumstances of the particular case demand --
to preserve and protect the goods carried by it on the occasion of a natural disaster, it will
be deemed to have been negligent, and the loss will not be considered as having been
due to a natural disaster under Article 1734 (1).
[In the case at bar, the issues may be narrowed down to whether the loss of the cargo was
due to the occurrence of a natural disaster, and if so, whether such natural disaster was
the sole and proximate cause of the loss or whether private respondents were partly to
blame for failing to exercise due diligence to prevent the loss of the cargo.
The parties do not dispute that on the day the M/V Peatheray Patrick-G sunk, said vessel
encountered strong winds and huge waves ranging from six to ten feet in height. The
vessel listed at the port side and eventually sunk at Cawit Point, Cortes, Surigao del Sur.
The Court of Appeals, citing the decision of the Board of Marine Inquiry in the
administrative case against the vessel's crew (BMI--646-87), found that the loss of the
cargo was due solely to the existence of a fortuitous event, particularly the presence of
strong winds and huge waves at Cortes, Surigao del Sur on March 3, 1987
CALVO VS. UCPB GENERAL INSURANCE TERMINAL
SERVICE, INC.
Facts:
A contract was entered into between Calvo and San Miguel Corporation
(SMC) for the transfer of certain cargoes from the port area in Manila to
the warehouse
of SMC. The cargo was insured by UCPB General Insurance Co., Inc.
When the shipment arrived and unloaded from the vessel, Calvo
withdrew the cargo from the arrastre operator and delivered the same
to SMC’s warehouse. When it was inspected, it was found out that
some of the goods were torn.
UCPB, being the insurer, paid for the amount of the damages
and as
subrogee thereafter, filed a suit against Calvo. Petitioner, on the other
hand, contends that it is a private carrier not required to observe such
extraordinary diligence in the vigilance over the goods. As customs
broker, she does not indiscriminately hold
her services out to the public but only to selected parties.
Issue:
Whether or not Calvo is a common carrier liable for the damages for
failure to observe extraordinary diligence in the vigilance over the
goods.
Held: - The CA reversed and ruled that Belgian were liable for the loss or the
The contention has no merit. In De Guzman v. Court of Appeals, the damage of the goods shipped, because they had failed to overcome the
Court dismissed a similar contention and held the party to be a presumption of negligence imposed on common carriers. As to the extent of
common carrier, thus - Belgian’s liability, the CA held that the package limitation under COGSA was
The Civil Code defines "common carriers" in the not applicable, because the words "L/C No. 90/02447" indicated that a higher
following terms: valuation of the cargo had been declared by the shipper.
"Article 1732. Common carriers are persons,
corporations, firms or associations engaged in the
Issues:
business of carrying or transporting passengers or
goods or both, by land, water, or air for compensation,
offering their services to the public." The law makes no distinction - Whether the notice of loss was timely filed. (Belgian claims that pursuant
between a carrier offering its services to the general community or to Section 3, paragraph 6 of COGSA, respondent should have filed its Notice
solicits business only from a narrow segment of the general of Loss within three days from delivery. They assert that the cargo was
population. Note that the transportation of goods holds an integral part discharged on July 31, 1990, but that respondent filed its Notice of Claim
of Calvo’s business, it cannot indeed be doubted that it is a common only on September 18, 1990.)
carrier.
Whether the package limitation of liability under COGSA is applicable.
(Belgian contends that assuming that they are liable their liability should be
Belgian overseas chartering v. Phil. First insurance co,. limited to US$500 per package as provided in the Bill of Lading and by
383 scra 23 Section 4(5)of COGS
Facts:
- CMC Trading A.G. shipped on board the M/V Anangel Sky at Hamburg, Held:
Germany 242 coils of various Prime Cold Rolled Steel sheets for
transportation to Manila consigned to the Philippine Steel Trading - NO. Mere proof of delivery of the goods in good order to a common
Corporation. carrier and of their arrival in bad order at their destination constitutes a prima
- On July 28, 1990, M/V Anangel Sky arrived at the port of Manila and, facie case of fault or negligence against the carrier.
within the subsequent days, discharged the subject cargo. Four (4) coils - In this case, Belgian failed to rebut the prima facie presumption of
were found to be in bad order. negligence. First, as stated in the Bill of Lading, Belgian received the subject
- Finding the four (4) coils in their damaged state to be unfit for the shipment in good order and condition in Germany. Second, prior to the
intended purpose, the consignee Philippine Steel Trading Corporation unloading of the cargo, an Inspection Report prepared and signed by
declared the same as total loss. representatives of both parties showed the steel bands broken, the metal
- Philippine First Insurance paid the claim of Philippine Steel and was thus envelopes rust-stained and heavily buckled, and the contents thereof
subrogated. exposed and rusty. Third, Bad Order Tally Sheet issued by Jardine Davies
Transport Services stated that the four coils were in bad order and condition.
- Philippine First then instituted a complaint for recovery of the amount paid Normally, a request for a bad order survey is made in case there is an
to the consignee as insured. apparent or a presumed loss or damage.Fourth, the Certificate of Analysis
- Belgian claims that the damage and/or loss was due to pre-shipment stated that, based on the sample submitted and tested, the steel sheets
damage, to the inherent nature, vice or defect of the goods, or to perils, found in bad order were wet with fresh water. Fifth, Belgian -- in a
danger and accidents of the sea, or to insufficiency of packing thereof, or to letteraddressed to the Philippine Steel --admitted that they were aware of the
the act or omission of the shipper of the goods or their representatives. condition of the four coils found in bad order and condition.
Belgian further argued that their liability, if there be any, should not exceed - YES. First, the provision of COGSA provides that the notice of claim need
the limitations of liability provided for in the bill of lading and other pertinent not be given if the state of the goods, at the time of their receipt, has been
laws. Finally, Belgian averred that, in any event, they exercised due diligence the subject of a joint inspection or survey. Here, prior to unloading the cargo,
and foresight required by law to prevent any damage/loss to said shipment. an Inspection Report as to the condition of the goods was prepared and
- The RTC dismissed the complaint. signed by representatives of both parties. Second, as stated in the same
provision, a failure to file a notice of claim within three days will not bar
recovery if it is nonetheless filed within one year. This one-year prescriptive
period also applies to the shipper, the consignee, the insurer of the goods or
any legal holder of the bill of lading.
- A claim is not barred by prescription as long as the one-year period has
not lapsed. In the present case, the cargo was discharged on July 31, 1990,
while the Complaint51 was filed by respondent on July 25, 1991, within the
one-year prescriptive period.
- YES. In this case, there was no stipulation in the Bill of Lading limiting the
carrier's liability. Neither did the shipper declare a higher valuation of the
goods to be shipped. This fact notwithstanding, the insertion of the words
"L/C No. 90/02447 cannot be the basis for Belgian’s liability.
- First, a notation in the Bill of Lading which indicated the amount of the
Letter of Credit obtained by the shipper for the importation of steel sheets did
not effect a declaration of the value of the goods as required by the bill. That
notation was made only for the convenience of the shipper and the bank
processing the Letter of Credit.
- Second, a bill of lading is separate from the Other Letter of Credit
arrangements. Thus, Belgian’s liability should be computed based on
US$500 per package and not on the per metric ton price declared in the
Letter of Credit.