Case Digest: Southern Lines, Inc. vs Court of Appeals and City of Iloilo, G.R. No. L-16629

 

Southern Lines, Inc. vs Court of Appeals and City of Iloilo, G.R. No. L-16629, January 31, 1962

Subject: Transportation Law

FACTS

National Rice and Corn Corporation (NARIC) shipped 1,726 sacks of rice consigned to the City of Iloilo on board the SS "General Wright" belonging to the Southern Lines, Inc. Each sack of rice weighed 75 kilos, and the shipment indicated in the bill of lading had a total weight of 129,450 kilos.

The City of Iloilo received the shipment and paid. However, the actual merchandise received by the City of Iloilo was short of 13,319 kilos, the proportionate value of which was P6,486.35.

With this, the City of Iloilo filed a complaint in the Court of First Instance of Iloilo against NARIC and Southern Lines, Inc. for the recovery of the amount. After trial, the lower court absolved NARIC but sentenced Southern Lines, Inc. to pay the amount of P4,931.41 which is the difference between the sum of P6,486.35 and P1,554.94 representing the latter's counterclaim for handling and freight. On appeal, CA affirmed the judgment of the trial court. Hence, this petition for review.

ISSUE

Whether or not the defendant-carrier (the petitioner) is liable for the loss or shortage of the rice shipped.

RULING

Yes, it is liable for the loss or shortage of the rice shipped.

Under the provisions of Article 361, the defendant-carrier in order to free itself from liability, was only obliged to prove that the damages suffered by the goods were "by virtue of the nature or defect of the articles." Under the provisions of Article 362, the plaintiff, in order to hold the defendant liable, was obliged to prove that the damages to the goods by virtue of their nature, occurred on account of its negligence or because the defendant did not take the precaution adopted by careful persons.

In this case, SC held that if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom. Furthermore, CA found that the “appellant (petitioner) itself frankly admitted that the strings that tied the bags of rice were broken; some bags were with holes and plenty of rice were spilled inside the hull of the boat, and that the personnel of the boat collected no less than 26 sacks of rice which they had distributed among themselves." This finding shows that the shortage resulted from the negligence of the petitioner. Therefore, the defendant-carrier is liable for the loss.