CITADEL LINES, INC. vs.

COURT OF APPEALS* and MANILA WINE

MERCHANTS, INC.
G.R. No. 88092, April 25, 1990
REGALADO, J.

FACTS: In this case, Citadel Lines, Inc. (Citadel) is the general agent of the
vessel where the cartons of cigarettes imported by Manila Wine Merchants, Inc.
(Manila Wine) were loaded. Upon arrival of the shipment in Manila, it was
found out that some of the cartons of cigarettes were missing. Hence, Manila
Wine filed a formal claim with Citadel demanding payment for the FMV of the
missing cargo.

ISSUE: Whether the demand for the FMV of the missing cargo is proper.

RULING: NO.

The SC held that the award of damages for the value of the goods based on
their alleged FMV is erroneous.

It is clearly and expressly provided under Clause 6 of the aforementioned bills

of lading issued by the CARRIER that its liability is limited to $2.00 per kilo.
Basic is the rule, long since enshrined as a statutory provision, that a
stipulation limiting the liability of the carrier to the value of the goods
appearing in the bill of lading, unless the shipper or owner declares a greater
value, is binding. Further, a contract fixing the sum that may be recovered by
the owner or shipper for the loss, destruction or deterioration of the goods is
valid, if it is reasonable and just under the circumstances, and has been fairly
and freely agreed upon.

The Manila Wine itself admits in its memorandum that the value of the goods
shipped does not appear in the bills of lading. Hence, the stipulation on the
carrier's limited liability applies. There is no question that the stipulation is
just and reasonable under the circumstances and have been fairly and freely
agreed upon.

The bill of lading shows that 120 cartons weigh 2,978 kilos or 24.82 kilos per
carton. Since 90 cartons were lost and the weight of said cartons is 2,233.80
kilos, at $2.00 per kilo the CARRIER's liability amounts to only US$4,467.60.