Wednesday, November 15, 2023

Case Digest: PCIC vs. UNKNOWN OWNER OF THE VESSEL M/V "NATIONAL HONOR," NSCP and ICSI, G.R. No. 161833


PHILIPPINE CHARTER INSURANCE CORPORATION vs. UNKNOWN OWNER OF THE VESSEL M/V "NATIONAL HONOR," NATIONAL SHIPPING CORPORATION OF THE PHILIPPINES and INTERNATIONAL CONTAINER SERVICES, INC., G.R. No. 161833, July 08, 2005.

Subject: Transportation Law


FACTS

On November 5, 1995, J. Trading Co. Ltd. of Seoul, Korea, loaded a shipment of four units of parts and accessories in the port of Pusan, Korea, on board the vessel M/V "National Honor," represented in the Philippines by its agent, National Shipping Corporation of the Philippines (NSCP). The shipment was for delivery to Manila, Philippines. Freight forwarder, Samhwa Inter-Trans Co., Ltd., issued Bill of Lading No. SH9410306 in the name of the shipper consigned to the order of Metropolitan Bank and Trust Company with arrival notice in Manila to ultimate consignee Blue Mono International Company, Incorporated (BMICI), Binondo, Manila.

The shipment was contained in two wooden crates, complete and in good order condition. here were no markings on the outer portion of the crates except the name of the consignee.

The M/V "National Honor" arrived at the Manila International Container Terminal (MICT) on November 14, 1995. The International Container Terminal Services, Incorporated (ICTSI) was furnished with a copy of the crate cargo list and bill of lading, and it knew the contents of the crate. The following day, the vessel started discharging its cargoes using its winch crane. The crane was operated by Olegario Balsa, a winchman from the ICTSI, the exclusive arrastre operator of MICT.

As the crate was being hoisted from the vessel’s hatch, the mid-portion of the wooden flooring suddenly snapped in the air, about five feet high from the vessel’s twin deck, sending all its contents crashing down hard, resulting in extensive damage to the shipment.

BMICI’s customs broker, JRM Incorporated, took delivery of the cargo in such damaged condition. Upon receipt of the damaged shipment, BMICI found that the same could no longer be used for the intended purpose.

BMICI subsequently filed separate claims against the NSCP, the ICTSI, and its insurer, the PCIC. When the other companies denied liability, PCIC paid the claim and was issued a Subrogation Receipt. As subrogee, PCIC then filed with the RTC of Manila, a Complaint for Damages against the "Unknown owner of the vessel M/V National Honor," NSCP and ICTSI, as defendants. PCIC alleged that the loss was due to the fault and negligence of the defendants

RTC rendered judgment for PCIC and ordered the complaint dismissed. CA affirmed in toto the decision of RTC.

Petitioner asserts that the mere proof of receipt of the shipment by the common carrier (to the carrier) in good order, and their arrival at the place of destination in bad order makes out a prima facie case against it; in such case, it is liable for the loss or damage to the cargo absent satisfactory explanation given by the carrier as to the exercise of extraordinary diligence.

ISSUE

Whether or not the damage sustained by the shipment was due to its defective packing and not to the fault and negligence of the common carrier.

RULING

Yes, the damage sustained was due to defective packaging and not the fault of the respondents.

Under the law, common carriers are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of passengers transported by them, according to all the circumstance of each case. In the event of loss, destruction or deterioration of the insured goods, common carriers shall be responsible unless the same is brought about, among others, by flood, storm, earthquake, lightning or other natural disaster or calamity. In all other cases, 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.

In this case, SC held that appellant’s allegation that since the cargo arrived safely from the port of Pusan, Korea without defect, the fault should be attributed to the arrastre operator who mishandled the cargo, is without merit. The cargo fell while it was being carried only at about five (5) feet high above the ground. It would not have so easily collapsed had the cargo been properly packed. Not only did the shipper fail to properly pack the cargo, it also failed to indicate an arrow in the middle portion of the cargo where additional slings should be attached. At any rate, the issue of negligence is factual in nature and in this regard, it is settled that factual finding of the lower courts are entitled to great weight and respect on appeal, and, in fact, accorded finality when supported by substantial evidence.

Petitioner failed to adduce any evidence to counter that of respondent ICTSI. In addition, under Bill of Lading issued by the respondent NSCP and accepted by the petitioner, the latter represented and warranted that the goods were properly packed, and disclosed in writing the "condition, nature, quality or characteristic that may cause damage, injury or detriment to the goods." Absent any signs on the shipment requiring the placement of a sling cable in the mid-portion of the crate, the respondent ICTSI was not obliged to do so.

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