Case Digest: Everett Steamship v. Court of Appeals, 297 SCRA 496, G.R. No. 122494

 

Everett Steamship v. Court of Appeals, 297 SCRA 496, G.R. No. 122494, October 8, 1998

Subject: Transportation Law

FACTS

Hernandez Trading Co. Inc., private respondent, imported three crates of bus spare parts marked as MARCO C/No. 12, MARCO C/No. 13 and MARCO C/No. 14, from its supplier, Maruman Trading Company, Ltd. (Maruman Trading), a foreign corporation based in Inazawa, Aichi, Japan. The crates were shipped from Nagoya, Japan to Manila on board "ADELFAEVERETTE," a vessel owned by petitioner's principal, Everett Orient Lines. The said crates were covered by Bill of Lading No. NGO53MN.

Upon arrival at the port of Manila, it was discovered that the crate marked MARCO C/No. 14 was missing. Private respondent thereafter made a formal claim upon petitioner for the value of the lost cargo, the amount shown in its commercial invoice. However, petitioner offered to pay only One Hundred Thousand (Y100,000.00) Yen, the maximum amount stipulated under Clause 18 of the covering bill of lading which limits the liability of petitioner.

Private respondent rejected the offer and thereafter instituted a suit for against petitioner before the RTC. After trial, RTC rendered judgment in favor of private respondent considering defendant's categorical admission of loss and its failure to overcome the presumption of negligence and fault.

On appeal, CA affirms the decision of RTC with the additional observation that private respondent cannot be bound by the terms and conditions of the bill of lading because it was not privy to the contract of carriage. Hence this petition.

ISSUE

1. Whether or not the carrier's limited package liability as stipulated in the bill of lading does apply in the instant case.

2. Whether or not the consent of the consignee to the terms and conditions of the bill of lading is necessary to make such stipulations binding upon it.

RULING

1. Yes, the stipulations in the bill of lading is applicable in the instant case.

Under the law, (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 freely and fairly agreed upon.

In this case, SC held that the trial court's ratiocination that private respondent could not have "fairly and freely" agreed to the limited liability clause in the bill of lading because the said conditions were printed in small letters does not make the bill of lading invalid. The stipulation stated in the bill of lading is mind, reasonable and just. The carrier made it clear that its liability would only be up to One Hundred Thousand (Y100,000.00) Yen. However, the shipper, Maruman Trading, had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier. Considering that the shipper did not declare a higher valuation, it had itself to blame for not complying with the stipulations. Therefore, the stipulations on the bill of lading applies.

2. Yes, even if the consignee was not a signatory to the contract of carriage between the shipper and the carrier, the consignee can still be bound by the contract.

In this case, SC held that when private respondent formally claimed reimbursement for the missing goods from petitioner and subsequently filed a case against the latter based on the very same bill of lading, private respondent accepted the provisions of the contract and thereby made itself a party thereto, or at least has come to court to enforce it. Thus, private respondent cannot now reject or disregard the carrier's limited liability stipulation in the bill of lading. Therefore, private respondent is bound by the whole stipulations in the bill of lading and must respect the same.