Case Digest: Eastern Shipping vs. Margarine, 93 SCRA 257

 

Eastern Shipping vs. Margarine, 93 SCRA 257

Subject: Transportation  Law

FACTS

The court upheld the appellate judgment holding petitioner liable for the damage suffered by respondent's copra cargo on board petitioner's vessel. Respondent corporation was the consignee of 500 long tons of Philippine copra in bulk with a total value of US$ 108,750.00. A fire broke out aboard the vessel, causing water damage in the amount of US$ 591.38. The lower court rejected petitioner's defense that it was not liable under Philippine Law for the damage. The court ordered Eastern Shipping Lines, Inc. to pay the plaintiff, Margarine-Verkaufs-Union GMBH, US$ 591.38, plus attorney's fees and litigation costs. The petitioner reiterated its submission that Article 848 of the Code of Commerce should be applied.

ISSUE

Whether or not Article 848 of the Code of Commerce governs this case despite the bill of lading which expressly contained the application of the York-Antwerp Rules which provide for MARGARINE-VERKAUFS-UNION GmbH’s fun recovery of the damage loss.

RULING

No.

Article 848 states that claims for averages shall not be admitted if they do not exceed 5 per cent of the interest which the claimant may have in the vessel or cargo if it is gross average, and 1 per cent of the goods damaged if particular average, deducting in both cases the expenses of appraisal, unless there is an agreement to the contrary.

In this case, SC held Article 848 is not applicable in this particular case for the reason that the bill of lading contains an agreement to the contrary. There is a clear and irreconcilable inconsistency between the York-Antwerp Rules expressly adopted by the parties as their contract under the bill of lading which sustains Eastern’s claim, and Article 848 as cited by Margarine which would bar the same. A contract of adhesion as embodied in the printed bill of lading issued for the shipment to which the consignee merely adhered, having no choice in the matter, and consequently, any ambiguity must be construed against the author.