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Case Digest: Regional Container Lines v. Netherlands Insurance, G.R. No. 168151

 

Regional Container Lines v. Netherlands Insurance, 598 SCRA 304, G.R. No. 168151, September 4, 2009

Subject: Transportation Law


FACTS

In October 1995, 405 cartons of Epoxy Molding Compound were consigned to be shipped from Singapore to Manila for Temic Telefunken Microelectronics Philippines. U-Freight Singapore PTE Ltd., a forwarding agent based in Singapore, contracted the services of Pacific Eagle Lines PTE. Ltd. to transport the subject cargo. As the cargo was highly perishable, the inside of the container had to be kept at a temperature of 0º Celsius. Pacific Eagle loaded the refrigerated container on board the M/V Piya Bhum, a vessel owned by RCL, with which Pacific Eagle had a slot charter agreement.

However, when Temic received the shipment, the cargo completely damaged. It was found that during unloading from the ship, the chart temperature reading of the container fluctuated to 33º Celsius.

Temic then filed a claim for cargo loss against Netherlands Insurance. As subrogee, Netherlands Insurance filed a complaint for subrogation of insurance settlement with the RTC of Manila.

The trial court dismissed the complaint on demurrer to evidence. On appeal, CA reversed the decision of RTC. Motion for reconsiderations to CA were also dismissed. Hence this petition.

ISSUE

Whether or not the CA correctly held RCL and EDSA Shipping liable as common carriers under the theory of presumption of negligence

RULING

Yes, CA correctly held that RCL and EDSA Shipping are liable.

Under the law, a common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported. When the goods shipped are either lost or arrived in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable. To overcome the presumption of negligence, the common carrier must establish by adequate proof that it exercised extraordinary diligence over the goods. It must do more than merely show that some other party could be responsible for the damage.

In this case, RCL and EDSA Shipping failed to prove that they did exercise the degree of diligence required by law over the goods they transported. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier; RCL and EDSA Shipping failed to dispute this. RCL and EDSA Shipping, however, failed to satisfy this standard of evidence and offered no evidence at all; a reversal of a dismissal based on a demurrer to evidence bars the defendant from presenting evidence supporting its allegations.

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