Case Digest: New Zealand vs. Joy, G.R. No. L-7311

 

New Zealand vs. Joy, 97 Phil. 646, G.R. No. L-7311, September 30, 1955

Subject: Transportation Law

FACTS

A cargo of oats was consigned to Muller and Phipps (Manila) Ltd. The cargo was insured against all risks by The New Zealand Insurance Co., Ltd. When the cargo was discharged several cartons which contained the oats were in bad order. The consignee filed a claim against the insurer for the value of the damaged goods which the latter paid in the amount of P18,148.69. The insurer as subrogee of the consignee sued E. Razon, Inc. who was the arrastre operator. The insurer demanded reimbursement in the amount of P17,025.87. The lower figure is due to the fact that the carrier responded for its share of the loss in the sum of P1,121.02.

RTC ordered E. Razon to pay. On appeal, the CA reversed RTC’s decision on the ground of prescription.

ISSUE

Whether or not E. Razon is not liable due to prescription based on Art. 366 of the Code of Commerce.

RULING

No. 

Under Article 366 of the Code of Commerce, there are two requisites before claim for damages may be demanded: (1) consignment of goods through a common carrier, by a consignor in one place to a consignee in another place; and (2) the delivery of the merchandise by the carrier to the consignee at the place of destination.

In the instant case, the consignor is the branch office of Lee Teh & Co., Inc., at Catarman, Samar, which placed the cargo on board the ship Jupiter, and the consignee, its main office at Manila. The lower court found that the cargo never reached Manila, its destination, nor was it ever delivered to the consignee, the office of the shipper in Manila, because the ship ran aground upon entering Laoang Bay, Samar on the same day of the shipment. It follows that the aforesaid Article 366 does not have application because the cargo was never received by the consignee. Moreover, under the bill of lading issued by the carrier, it was the letter's undertaking to bring the cargo to its destination—Manila—and deliver it to consignee, which undertaking was never complied with. The carrier, therefore, breached its contract, and, as such, it forfeited its right to invoke in its favor the conditions required by Article 366.