Case Digest: Provident Insurance vs. Court of Appeals, G.R. No. 118030

Provident Insurance vs. Court of Appeals, G.R. No. 118030, January 15, 2004

Subject: Transportation Law

FACTS

On or about June 5, 1989, the vessel MV "Eduardo II" took and received on board at Sangi, Toledo City a shipment of 32,000 plastic woven bags of various fertilizer in good order and condition for transportation to Cagayan de Oro City. The subject shipment was consigned to Atlas Fertilizer Corporation and covered by Bill of Lading No. 01 and Marine Insurance Policy No. CMI-211/89-CB. Upon its arrival at General Santos City on June 7, 1989, the vessel MV "Eduardo II" was instructed by the consignee's representative to proceed to Davao City and deliver the shipment to its Davao Branch in Tabigao.

On June 10, 1989, the MV "Eduardo II" arrived in Davao City where the subject shipment was unloaded. In the process of unloading the shipment, three bags of fertilizer fell overboard and281 bags were considered to be unrecovered spillages. Because of the mishandling of the cargo, it was determined that the consignee incurred actual damages in the amount of P68,196.16. As the claims were not paid, petitioner Provident Insurance Corporation indemnified the consignee Atlas Fertilizer Corporation for its damages. Thereafter, the petitioner, as subrogee of the consignee, filed on June 3, 1991, a complaint against the respondent carrier seeking reimbursement for the value of the losses/damages to the cargo.

ISSUE

Whether or not stipulations in the bill of lading, the requirement to file a notice of claim in case of damaged goods, is binding upon the consignee.

RULING

Yes, there can be no question about the validity and enforceability of Stipulation No. 7 in the bill of lading.

The twenty-four-hour requirement under the said stipulation is, by agreement of the contracting parties, a sine qua non for the accrual of the right of action to recover damages against the carrier. Carriers and depositaries sometimes require the presentation of claims within a short time after delivery as a condition precedent to their liability for losses. Such a requirement is not an empty formalism. It has a definite purpose, i.e., to afford the carrier or depositary a reasonable opportunity and facilities to check the validity of the claims while the facts are still fresh in the minds of the persons who took part in the transaction and the document are still available.