CONSEQUENCES OF DELAY

Excusable delays in carriage suspend, but do not generally terminate, the contract of carriage,
and when the cause is removed, the master must proceed with the voyage and make delivery.
During the detention or delay, the vessel continues to be liable as a common carrier, not a
warehouseman, and remains duty bound to exercise extraordinary diligence. If the delay is
legally inexcusable, the following consequences result:

(1) the carrier is still liable even if natural disaster caused the damage;

(2) the stipulation limiting the liability of the carrier is inoperative;

(3) the carrier is liable for the damages caused by the delay; and

(4) the consignee may exercise his right to abandon under Article 371 of the Code of
Commerce. a. New Civil Code Provisions on Delay.

The provisions of the Civil Code on Common Carriers expressly provide for certain effects of
delay in transporting goods. Articles 1740 and 1747 provide:

ARTICLE 1740. If the common carrier negligently incurs in delay in transporting the goods, a
natural disaster shall not free such carrier from responsibility.

ARTICLE 1747. If the common carrier, without just cause, delays the transportation of the goods
or changes the stipulated or usual route, the contract limiting the common carrier‟s liability
cannot be availed of in case of the loss, destruction, or deterioration of the goods.

b. Code of Commerce Provisions on Delay. The Code of Commerce provisions on Overland

Transportation likewise deal with delay on the part of the carrier. Articles 370 to 374 of the Code
of Commerce provide:

ARTICLE 370. If a period has been fixed for the delivery of the goods, it must be made within
such time, and, for failure to do so, the carrier shall pay the indemnity stipulated in the bill of
lading, neither the shipper nor the consignee being entitled to anything else. If no indemnity has
been stipulated and the delay exceeds the time fixed in the bill of lading, the carrier shall be
liable for the damages which the delay may have caused.

ARTICLE 371. In case of delay through the fault of the carrier, referred to in the preceding
articles, the consignee may leave the goods transported in the hands of the former, advising
him thereof in writing before their arrival at the point of destination. When this abandonment
takes place, the carrier shall pay the full value of the goods as if they had been lost or mislaid. If
the abandonment is not made, the indemnification for losses and damages by reason of the
delay cannot exceed the current price which the goods transported would have had on the day
and at the place in which they should have been delivered; this same rule is to be observed in
all other cases in which this indemnity may be due.

ARTICLE 372. The value of the goods which the carrier must pay in cases of loss or
misplacement shall be determined in accordance with that declared in the bill of lading, the
shipper not being allowed to present proof that among the goods declared therein there were
articles of greater value and money. Horses, vehicles, vessels, equipment and all other principal
and accessory means of transportation shall be especially bound in favor of the shipper,
although with respect to railroads said liability shall be subordinated to the provisions of the laws
of concession with respect to the property, and to what this Code established as to the manner
and form of effecting seizures and attachments against said companies.

ARTICLE 373. The carrier who makes the delivery of the merchandise to the consignee by
virtue of combined agreements or services with other carriers shall assume the obligations of
those who preceded him in the conveyance, reserving his right to proceed against the latter if he
was not the party directly responsible for the fault which gave rise to the claim of the shipper or
consignee. The carrier who makes the delivery shall likewise acquire all the actions and rights of
those who preceded him in the conveyance. The shipper and the consignee shall have an
immediate right of action against the carrier who executed the transportation contract, or against
the other carriers who may have received the goods transported without reservation. However,
the reservation made by the latter shall not relieve them from the responsibilities which they
may have incurred by their own acts.

ARTICLE 374. The consignees to whom the shipment was made may not defer the payment of
the expenses and transportation charges of the goods they receive after the lapse of twenty-four
hours following their delivery; and in case of delay in this payment, the carrier may demand the
judicial sale of the goods transported in an amount necessary to cover the cost of transportation
and the expenses incurred.

c. Right to Abandon. The first paragraph of Article 371 of the Code of Commerce provides that
in cases of delay on account of the fault of the carrier, the consignee may leave the goods
transported in the hands of the carrier, informing him thereof in writing before the arrival of the
same at the point of destination. The carrier shall be liable for the total value of such goods. The
foregoing provision “confers upon the consignee an exceptional but limited right to abandon the
goods transported during the period intervening between the moment when the fault of the
carrier produces a delay which is the generative cause of action, until the moment just before
the arrival of the goods at the place of delivery, by communicating such abandonment to the
carrier in writing; and when these conditions do not concur, the refusal to accept cannot be
effective.”

(1) The Supreme Court observed in one case that such rule in Article 371 of the Code of
Commerce that the shipper can abandon the goods in case of unreasonable delay in delivery in
overland transportation, can also be made to apply to marine transportation even if the provision
is in the Chapter of the Code of Commerce dealing with overland transportation.

(2) Moreover, the Supreme Court ruled that abandonment may also be made by virtue of
stipulation or agreement between the parties. The Supreme Court explained in Magellan Mfg.
Marketing Corp. v. Court of Appeals: “Now, there is no dispute that private respondents
expressly and on their own volition granted petitioner an option with respect to the satisfaction of
freightage and demurrage charges. Having given such option, especially since it was accepted
by petitioner, private respondents are estopped from reneging thereon. Petitioner, on its part,
was well within its right to exercise said option. Private respondents, in giving the option, and
petitioner, in exercising that option, are concluded by their respective actions. To allow either of
them to unilaterally back out on the offer and on the exercise of the option would be to
countenance abuse of rights as an order of the day, doing violence to the long entrenched
principle of mutuality of contracts. It will be remembered that in overland transportation, an
unreasonable delay in the delivery of transported goods is sufficient ground for the
abandonment of goods. By analogy, this can also apply to maritime transportation. Further, with
much more reason can petitioner in the instant case properly abandon the goods, not only
because of the unreasonable delay in its delivery but because of the option which was
categorically granted to and exercised by it as a means of settling its liability for the cost and
expenses of reshipment. And, said choice having been duly communicated, the same is binding
upon the parties on legal and equitable considerations of estoppel.” (Emphasis supplied)