G.R. NO.

L-9840

LU DO & LU YM
CORP. v.
I.V. BINAMIRA
Presented by Thea Santos
 Lu Do & Lu Ym Corp.
(Petitioner, Agent of

Common Carrier)

Binamira (Respondent,
Consignee)

Cebu Stevedoring

Characters Company (Stevedore,

tasked to unload cargo)

of the Case Visayan Cebu Terminal

Company Inc. (Arrastre
Operator of the Port)

Delta Photo Supply Co.

(Supplier)

R.J. del Pan & Co., Inc.

(Marine Surveyors)
 Facts of the Case

Delta Photo Supply Company

The ship arrived at the port of

of New York shipped on board

Cebu and cargo was

the M/S FERNSIDE at New

discharged including the

York, 6 cases of films and

shipment in question, placing it

photographic supplies
in the possession and custody

consigned to the order of I. V.

of the arrastre operator.

Binamira. For this shipment, Bill

of Lading was issued.

 Facts of the Case
Petitioner hired a stevedoring The shipment in question, was

company to unload its cargo. not included in the report of

During the discharge, good bad order cargo of both

order cargo was separated checkers, indicating that it was

from the bad order cargo on discharged from the, ship in

board the ship, and a separate good order and condition. But

list of bad order cargo was after it was delivered to

prepared by the checker of the respondent after 3 days, the

stevedoring company. All the same was examined by a

cargo unloaded was received surveyor and found out that

at the pier by the arrastre some films and supplies were

operator of the port. missing.

 Facts of the Case

The Court of Appeals affirmed

The Trial Court ruled that the

this decision based on the

carrier is responsible for the

provisions of Article 1734, 1735,

loss and therefore, should be

and 1736 of the New Civil

liable in paying the respective

Code.
costs.
 ISSUE

Whether or not the carrier is responsible for the loss considering

that it occurred after the shipment was discharged from the ship

and placed in the possession and custody of customs authority.

RULING

The decision of the CA was reversed, therefore, the carrier is

NOT LIABLE. CA made the wrong interpretation of the law and

ignored the stipulations in the Bill of Lading regarding the

limitation of liability of the carrier.

 LEGAL PRINCIPLES

Article 1734 of the New 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.

 LEGAL PRINCIPLES

Article 1735 of the New Civil Code

In all cases other than those mentioned in Nos. 1, 2, 3, 4, and 5 of the

preceding article, if 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 as required in

article 1733.
 LEGAL PRINCIPLES

Article 1736 of the New Civil Code

The extraordinary responsibility of the common carrier 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.

 LEGAL PRINCIPLES
These provisions, however, only apply when the loss,

destruction or deterioration takes place while the goods are

in the possession of the carrier, and not after it has lost

control of them.

The parties may agree to limit the liability of the carrier

considering that the goods have still to go through the

inspection of the customs authorities before they are actually

turned over to the consignee. This is a situation where we

may say that the carrier losses control of the goods because

of a custom regulation and it is unfair that it be made

responsible for what may happen during the interregnum.

 LEGAL PRINCIPLES
Bill of Lading

A transport document issued by shipping lines, carriers and international freight

forwarders or non-vessel operating common carrier for water-borne freight. It

is a contract of carriage between the carrier and the shipper which defines the

liabilities of each party. The holder or consignee of the bill has the right to

claim delivery of the goods at the port of destination.

 LEGAL PRINCIPLES
In the bill of lading that was issued covering the shipment in

question, both the carrier and the consignee have stipulated

to limit the responsibility of the carrier for the loss or damage

that may be caused to the goods before they are actually

delivered.

It therefore appears clear that the carrier does not assume

liability for any loss or damage to the goods once they have

been "taken into the custody of customs or other authorities",

or when they have been delivered at ship's tackle.