SEA-LAND SERVICE, INC. vs.

INTERMEDIATE APPELLATE COURT and PAULINO

CUE, doing business under the name and style of "SEN HIAP HING"
G.R. No. 75118, August 31, 1987
NARVASA, J.

FACTS: In this case, Sea-Land Service, Inc. (Sea-Land), a foreign shipping and
forwarding company doing business in the PH received from Seaborne Trading
Company (Seaborne) a shipment which is consigned to Sen Hiap Hing, a business
owned by Paulino Cue. Seaborne failed to declare the value of the shipment. When the
shipment arrived in Manila and was awaiting trans-shipment to Cebu, it was stolen
and has never been recovered. With that, Cue made a formal claim against Sea-Land
for the value of the lost shipment. Sea-Land offered to settle for $4,000 pursuant to a
clause in the bill of lading limiting the liability of the carrier in case of loss or damage
to cargo at $500 per item unless the shipper declared a higher value. Cue refused to
receive the same and instituted an action for damages against Sea-Land

ISSUE: Whether the stipulation in the bill of lading limiting the liability of Sea-Land
for loss/damage of the shipment valid and binding.

RULING: YES.

ART. 1749 A stipulation that the common carrier's liability is limited to the value of
the goods appearing in the bill of lading, unless the shipper or owner declares a
greater value, is binding.

ART. 1750. 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.