Case Digest: Mirasol v. The Robert Dollar Co., G.R. No. L-29721

 

Mirasol v. The Robert Dollar Co., G.R. No. L-29721, March 27, 1929

Subject: Transportation Law

FACTS

Plaintiff alleges that he is the owner and consignee of two cases of books, shipped in good order and condition at New York, U.S.A., on board the defendant's steamship President Garfield, for transport and delivery to the plaintiff in the City of Manila.

The two cases arrived in Manila on September 1, 1927, in bad order and damaged condition, resulting in the total loss of one case and a partial loss of the other. Hence, plaintiff filed his claims, and defendant has refused and neglected to pay, giving as its reason that the damage in question "was caused by sea water."

Defendant made a general and specific denial and alleged the following: 

1. that the steamship President Garfield at all the times alleged was in all respects seaworthy and properly manned, equipped and supplied, and fit for the voyage; hence they are not liable on the grounds of being unseaworthy.

2. that in the bill of lading issued by the defendant to plaintiff, it was agreed in writing that defendant should not be "held liable for any loss of, or damage to, any of said merchandise resulting from “Acts of God, perils of the sea or other waters," and that plaintiff's damage, if any, was caused by "Acts of God" or "perils of the sea."

3. defendant quoted clause 13 of the bill of lading, in which it is stated that in no case shall it be held liable "for or in respect to said merchandise or property beyond the sum of $250 for any piece, package or any article not enclosed in a package, unless a higher value is stated herein and ad valorem freight paid or assessed thereon," and that there was no other agreement.

4. defendant alleges that the damage, if any, was caused by "sea water," and that the bill of lading exempts defendant from liability for that cause. That damage by "sea water" is a shipper's risk, and that defendant is not liable.

After trial, RTC rendered judgment in favor of plaintiff.

ISSUE

Whether or not defendant has presented sufficient evidence to prove its exercise of extraordinary diligence required of a common carrier to merit its exemption from liability given the conditions stated on the bill of lading.

RULING

No, there was no sufficient proof to merit defendant’s exemption from liability.

Under the law, even when there is an agreement limiting the liability of the common carrier in the vigilance over the goods, the common carrier is disputably presumed to have been negligent in case of their loss, destruction or deterioration.

In this case, there is no claim or pretense that the two cases were not in good order when received on board the ship, and it is admitted that they were in bad order on their arrival at Manila. Hence, they must have been damaged in transit. In the very nature of things, if they were damaged by reason of a tempest, rocks, icebergs, foundering, stranding or the perils of the sea, that would be a matter exclusively within the knowledge of the officers of defendant's ship, and in the very nature of things would not be within plaintiff's knowledge, and upon all such questions, there is a failure of proof. Hence, defendant shall not be exempt from liability.

Case Digest: Maersk Lines v. Court of Appeals, 222 SCRA 108, G.R. 94761

 

Maersk Lines v. Court of Appeals, 222 SCRA 108, G.R. 94761, May 17, 1993.

Subject: Transportation Law

FACTS

Petitioner Maersk Line is engaged in the transportation of goods by sea, doing business in the Philippines through its general agent Compania General de Tabacos de Filipinas. Private respondent Efren Castillo, on the other hand, is the proprietor of Ethegal Laboratories, a firm engaged in the manufacturer of pharmaceutical products.

Through a Memorandum of Shipment, the shipper Eli Lilly, Inc. of Puerto Rico advised private respondent as consignee that the 600,000 empty gelatin capsules in six (6) drums of 100,000 capsules each, were shipped on board MV "Anders Maerskline"  for shipment to the Philippines via Oakland, California. In said Memorandum, shipper Eli Lilly, Inc. specified the date of arrival to be April 3, 1977.

For reasons unknown, said cargo of capsules were mishipped and diverted to Richmond, Virginia, USA and then transported back Oakland, Califorilia. The goods finally arrived in the Philippines on June 10, 1977 or after two (2) months from the date specified in the memorandum. As a consequence, private respondent as consignee refused to take delivery of the goods on account of its failure to arrive on time.

Private respondent alleging gross negligence and undue delay in the delivery of the goods, filed an action before RTC for rescission of contract with damages against petitioner and Eli Lilly, Inc. as defendants.

Denying that it committed breach of contract, petitioner alleged in its that answer that the subject shipment was transported in accordance with the provisions of the covering bill of lading and that its liability under the law on transportation of good attaches only in case of loss, destruction or deterioration of the goods as provided for in Article 1734 of Civil Code.

Defendant Eli Lilly, Inc. filed its answer with compulsory and crossclaim alleging that the delay in the arrival of the subject merchandise was due solely to the gross negligence of petitioner Maersk Line. The issues having been joined, private respondent moved for the dismissal of the complaint against Eli Lilly, Inc. on the ground that the evidence on record shows that the delay in the delivery of the shipment was attributable solely to petitioner. Responding to this, RTC dismissed the complaint against Eli Lilly, Inc.

After trial RTC rendered judgment in favor of respondent Castillo. On appeal, CA affirmed the decision of RTC with modification as to the awarding of corresponding damages and attorney’s fees. Hence this appeal.

ISSUE

Whether or not Castillo is entitled to damages resulting from delay in the delivery of the shipment in the absence in the bill of lading of a stipulation on the period of delivery.

RULING

Yes, Castillo is entitled to damages despite absence in the bill of lading of a stipulation on the period of delivery.

Under the law and existing jurisprudence, common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation to deliver at a given date or time, delivery of shipment or cargo should at least be made within a reasonable time.

In this case, a delay in the delivery of the goods spanning a period of two (2) months and seven (7) days falls was beyond the realm of reasonableness for it was through petitioner's negligence that the cargo was mishipped to Richmond, Virginia. Hence, petitioner's insistence that it cannot be held liable for the delay finds no merit. While there was no special contract (aside from the bill of lading which is a contract of adhesion) entered into by the parties indicating the date of arrival of the subject shipment, petitioner nevertheless, was very well aware of the specific date when the goods were expected to arrive as indicated in the bill of lading itself. SC held that there is no need to execute another contract for the purpose as it would be a mere superfluity.

Case Digest: Delsan Transport v. American Home, G.R. No. 149019

Delsan Transport v. American Home, G.R. No. 149019, August 15, 2006.

Subject: Transportation Law

FACTS

Delsan is a domestic corporation which owns and operates the vessel MT Larusan while respondent American Home Assurance Corporation (AHAC for brevity) is a foreign insurance company duly licensed to do business in the Philippines through its agent, the American-International Underwriters, Inc. (Phils.). It is engaged, among others, in insuring cargoes for transportation within the Philippines.

In Aust 1984, Delsan received on board MT Larusan a shipment consisting of 1,986.627 k/l Automotive Diesel Oil (diesel oil) at the Bataan Refinery Corporation for transportation and delivery to the bulk depot in Bacolod City of Caltex Phils., Inc. (Caltex), pursuant to a Contract of Afreightment. The shipment was insured by respondent AHAC against all risks under Inland Floater Policy and Marine Risk Note.

The shipment arrived in Bacolod City. The discharging of the diesel oil started at about 1:30 PM, however, at about 10:30 PM, the discharging had to be stopped on account of the discovery that the port bow mooring of the vessel was intentionally cut or stolen by unknown persons. Because there was nothing holding it, the vessel drifted westward, dragged and stretched the flexible rubber hose attached to the riser, broke the elbow into pieces, severed completely the rubber hose connected to the tanker from the main delivery line at seabed level and ultimately caused the diesel oil to spill into the sea. To avoid further spillage, the vessel’s crew tried water flushing to clear the line of the diesel oil but to no avail. In the meantime, the shore tender, who was waiting for the completion of the water flushing, was surprised when the tanker signaled a "red light" which meant stop pumping. Unaware of what happened, the shore tender, thinking that the vessel would, at any time, resume pumping, did not shut the storage tank gate valve. As all the gate valves remained open, the diesel oil that was earlier discharged from the vessel into the shore tank backflowed.

As a result of spillage and backflow of diesel oil, Caltex sought recovery of the loss from Delsan, but the latter refused to pay. As insurer, AHAC paid Caltex for spillage and for backflow pursuant to Marine Risk Note and Inland Floater Policy respectively. Subsequently, AHAC, as subrogee to Caltex, instituted two separate civil cases against Delsan before the Manila RTC for the loss caused by the spillage and for the backflow.

In August 1989, RTC rendered its decision in favor of AHAC holding Delsan liable for the loss of the cargo for its negligence in its duty as a common carrier. On appeal, CA affirmed the decision of RTC hence this petition.

Delsan insists that the CA committed reversible error in ruling that Article 1734 of the Civil Code cannot exculpate it from liability for the loss of the subject cargo and in not applying the rule on contributory negligence against Caltex, the shipper-owner of the cargo, and in not taking into consideration the fact that the loss due to backflow occurred when the diesel oil was already completely delivered to Caltex.

ISSUE

Whether or not, Delsan, as common carrier, is absolve from liability.

RULING

No.

Under the law, the extraordinary responsibility of common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by, the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to a person who has the right to receive them.

In this case, SC held that Delsan’s argument that it should not be held liable for the loss of diesel oil due to backflow because the same had already been actually and legally delivered to Caltex at the time it entered the shore tank holds no water. The subject cargo was still in the custody of Delsan because the discharging thereof has not yet been finished when the backflow occurred. Since the discharging of the cargo into the depot has not yet been completed at the time of the spillage when the backflow occurred, there is no reason to imply that there was actual delivery of the cargo to the consignee. The discharging of oil products to Caltex Bulk Depot has not yet been finished, Delsan still has the duty to guard and to preserve the cargo. The carrier still has in it the responsibility to guard and preserve the goods, a duty incident to its having the goods transported.

Case Digest: Philippine First Insurance v. Wallem First Shipping, 582 SCRA 457, G.R. No. 165647

 

Philippine First Insurance v. Wallem First Shipping, 582 SCRA 457, G.R. No. 165647, March 26, 2009

Subject: Transportation Law

FACTS

In October 1995, Anhui Chemicals Import & Export Corporation loaded on board M/S Offshore Master a shipment consisting of 10,000 bags of sodium sulphate anhydrous 99 PCT Min. (shipment), complete and in good order for transportation to and delivery at the port of Manila for consignee, L.G. Atkimson Import-Export, Inc. (consignee), covered by a Clean Bill of Lading. The Owner and/or Charterer of M/V Offshore Master is unknown while the shipper of the shipment is Shanghai Fareast Ship Business Company. Both are foreign firms doing business in the Philippines, thru its local ship agent, respondent Wallem Philippines Shipping, Inc. (Wallem).

The shipment arrived at the port of Manila and was subsequently discharged. It was disclosed that during the discharge of shipment, 2,426 poly bags (bags) were in bad order and condition, having sustained various degrees of spillages and loss.

Asia Star Freight Services, Inc. undertook the delivery of the subject shipment from the pier to the consignee’s warehouse in Quezon City, where final inspection was conducted jointly by the consignee’s representative and the cargo surveyor. Upon inspection, it was discovered that 63,065.00 kilograms of the shipment had sustained unrecovered spillages, while 58,235.00 kilograms had been exposed and contaminated, resulting in losses due to depreciation and downgrading.

In April 1996, the consignee filed a formal claim with Wallem for the value of the damaged shipment, to no avail. Thus, consignee filed a formal claim with petitioner Philippines First Insurance Co., Inc., insurer of goods, for the damage and losses sustained by the shipment and the latter signed a subrogation receipt. In the exercise of its right of subrogation, petitioner sent a demand letter to Wallem for the recovery of the amount paid by petitioner to the consignee. However, despite receipt of the letter, Wallem did not settle nor even send a response to petitioner’s claim.

Consequently, petitioner instituted an action before the RTC for damages against respondents. RTC held the shipping company and the arrastre operator solidarily liable since both the arrastre operator and the carrier are charged with and obligated to deliver the goods in good order condition to the consignee. In an appeal, CA reversed and set aside the RTC’s decision holding that there is no solidary liability between the carrier and the arrastre operator because it was clearly established by the court a quo that the damage and losses of the shipment were attributed to the mishandling by the arrastre operator in the discharge of the shipment. Hence this petition.

ISSUE

Whether or not the common carrier’s duties extend to the obligation to safely discharge the cargo from the vessel; Whether or not the carrier should be held liable for the cost of the damaged shipment.

RULING                                   

Yes.

Section 3(2) of the COGSA states that among the carriers’ responsibilities are to properly and carefully load, care for and discharge the goods carried. The bill of lading covering the subject shipment likewise stipulates that the carrier’s liability for loss or damage to the goods ceases after its discharge from the vessel. Article 619 of the Code of Commerce holds a ship captain liable for the cargo from the time it is turned over to him until its delivery at the port of unloading.

In this case, the bad order torn bags, was due to stevedores[‘] utilizing steel hooks/spikes in piling the cargo to [the] pallet board at the vessel’s cargo holds and at the pier designated area before and after discharged that cause the bags to torn while under the supervision of Wallem. It is undisputed that the damage or losses were incurred during the discharge of the shipment while under the supervision of the carrier. Consequently, the carrier is liable for the damage or losses caused to the shipment.

Case Digest: SULPICIO LINES, INC. vs. FIRST LEPANTO-TAISHO INSURANCE CORPORATION, G.R. No. 140349

SULPICIO LINES, INC. vs. FIRST LEPANTO-TAISHO INSURANCE CORPORATION, G.R. No. 140349, June 29, 2005

Subject: Transportation Law

 

FACTS

In February 1992, Taiyo Yuden Philippines, Inc. (owner of the goods) and Delbros, Inc. (shipper) entered into a contract to transport a shipment of goods consisting of three (3) wooden crates containing one hundred thirty-six (136) cartons of inductors and LC compound on board the V Singapore V20 from Cebu City to Singapore in favor of the consignee, Taiyo Yuden Singapore Pte, Ltd.

Delbros, Inc. engaged the services of the vessel M/V Philippine Princess, owned and operated by petitioner Sulpicio Lines, Inc. (carrier) to ship the goods from Cebu City to Manila. During unloading, one crate containing forty-two (42) cartons dropped from the cargo hatch to the pier apron. The owner of the goods examined the dropped cargo, and upon an alleged finding that the contents of the crate were no longer usable for their intended purpose, they were rejected as a total loss and returned to Cebu City.

The owner of the goods filed a claim with herein petitioner-carrier for the recovery of the value of the rejected cargo which was refused by the latter. The owner sought payment from respondent First Lepanto-Taisho Insurance Corporation (insurer). As subrogee, respondent-insurer then filed claims for reimbursement from Delbros, Inc. and petitioner-carrier Sulpicio Lines, Inc. which were subsequently denied. Hence they filed a suit for damages in the RTC.

Petitioner-carrier filed its Answer to Delbros, Inc.’s cross-claim asserting that it observed extraordinary diligence in the handling, storage and general care of the shipment and that subsequent inspection of the shipment by the Manila Adjusters and Surveyors Company showed that the contents of the third crate that had fallen were found to be in apparent sound condition, except that "2 cello bags each of 50 pieces ferri inductors No. LC FL 112270K-60 (c) were unaccounted for and missing as per packaging list."

ISSUE

Whether or not, based on the evidence presented during the trial, the owner of the goods, respondent-insurer’s predecessor-in-interest, did incur damages, and if so, whether or not petitioner-carrier is liable for the same.

RULING

Yes, petitioner-carrier is liable.

Under the law, a common carrier is bound to transport its cargo and its passengers safely "as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to all circumstances." The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding the damage to, or destruction of, the goods entrusted to it for safe carriage and delivery. It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their nature requires."

In this case, petitioner-carrier miserably failed to adduce any shred of evidence of the required extraordinary diligence to overcome the presumption that it was negligent in transporting the cargo. Petitioner-carrier contention’s that its liability, if any, is only to the extent of the cargo damage or loss and should not include the lack of fitness of the shipment for transport to Singapore due to the damaged packing is erroneous. SC affirms CA’s findings that there was damage suffered by the goods which consisted in the destruction of one wooden crate and the tearing of two (2) cardboard boxes therein which rendered them unfit to be sent to Singapore. The falling of the crate was negligence on the part of Sulpicio Lines, Inc. for which it cannot exculpate itself from liability because it failed to prove that it exercised extraordinary diligence.

 

Case Digest: Mitsui Lines v. Court of Appeals, 287 SCRA 366, G.R. No. 119571

 

Mitsui Lines v. Court of Appeals, 287 SCRA 366, G.R. No. 119571, March 11, 1998

Subject: Transportation Law

FACTS

Petitioner Mitsui O.S.K. Lines Ltd. is a foreign corporation represented in the Philippines by its agent, Magsaysay Agencies. It entered into a contract of carriage through Meister Transport, Inc., an international freight forwarder, with private respondent Lavine Loungewear Manufacturing Corporation to transport goods of the latter from Manila to Le Havre, France. Petitioner undertook to deliver the goods to France 28 days from initial loading. On July 24, 1991, petitioner's vessel loaded private respondent's container van for carriage at the said port of origin.

However, in Kaoshiung, Taiwan the goods were not transshipped immediately, with the result that the shipment arrived in Le Havre only on November 14, 1991. The consignee allegedly paid only half the value of the said goods on the ground that they did not arrive in France until the "off season" in that country. The remaining half was allegedly charged to the account of private respondent which in turn demanded payment from petitioner through its agent.

As petitioner denied private respondent's claim, the latter filed a case in the Regional Trial Court on April 14, 1992. In the original complaint, private respondent impleaded as defendants Meister Transport, Inc. and Magsaysay Agencies, Inc., the latter as agent of petitioner Mitsui O.S.K. Lines Ltd. On the other hand, petitioner filed a motion to dismiss alleging that the claim against it had prescribed under the Carriage of Goods by Sea Act.

RTC denied petitioner's motion as well as its subsequent motion for reconsideration. Also, CA affirmed the decision of RTC. Hence this petition.

ISSUE

Whether or not the private respondent's action is for "loss or damage" to goods shipped, within the meaning of Section 3 (6) of the Carriage of Goods by Sea Act (COGSA).

RULING

No, the action is not for “loss or damage” to goods shipped, within the meaning of Section 3(6) of COGSA.

As defined in the Civil Code and as applied to Section 3(6), paragraph 4 of the Carriage of Goods by Sea Act, "loss" contemplates merely a situation where no delivery at all was made by the shipper of the goods because the same had perished, gone out of commerce, or disappeared in such a way that their existence is unknown, or they cannot be recovered.

In this case, there is neither deterioration nor disappearance nor destruction of goods caused by the carrier's breach of contract. Whatever reduction there may have been in the value of the goods is not due to their deterioration or disappearance because they had been damaged in transit. The suit is not for "loss or damage" to goods contemplated in Section 3(6), the question of prescription of action is governed not by the COGSA but by Article 1144 of the Civil Code which provides for a prescriptive period of ten years.

Case Digest: Negros Navigation v. CA, G.R. No. 110398

 

Negros Navigation v. CA, G.R. No. 110398, November 7, 1997

Subject: Transportation Law

FACTS

In April of 1980, private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc. four special cabin tickets (#74411, 74412, 74413 and 74414) for his wife, daughter, son and niece who were going to Bacolod City to attend a family reunion. The tickets were for Voyage No. 457-A of the M/V Don Juan, leaving Manila at 1:00 p.m. on April 22, 1980.

The ship sailed from the port of Manila on schedule.

Unfortunately, Don Juan collided off the Tablas Strait in Mindoro, with the M/T Tacloban City, an oil tanker owned by the Philippine National Oil Company (PNOC) and the PNOC Shipping and Transport Corporation (PNOC/STC). As a result, the M/V Don Juan sank. Several of her passengers perished in the sea tragedy. The bodies of some of the victims were found and brought to shore, but the four members of private respondents' families were never found.

Private respondents filed a complaint in RTC of Manila against Negros Navigation, PNOC, and PNOC/STC, seeking damages for the death of Ardita de la Victoria Miranda, 48, Rosario V. Miranda, 19, Ramon V. Miranda, Jr., 16, and Elfreda de la Victoria, 26.

RTC ruled in favor of private respondent and ordered the defendants (petitioner) to pay jointly and severally the damages. On appeal, CA affirmed RTC’s decision with some modification. Hence this petition.

ISSUE

Whether or not the crew members of petitioner are grossly negligent in the performance of their duties; and is Mecenas vs IAC is binding in this case.

RULING

Yes, the crew members of petitioner are grossly negligent in the performance of their duties and the decision promulgated by the court in Mecenas vs IAC is binding in this case.

Under the law, a common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

In this case, applying the principle of stare decisis, decision on the Mecenas case was applicale. Negros Navigation was found equally negligent in tolerating the playing of mahjong by the ship captain and other crew members while on board the ship and failing to keep the M/V Don Juan seaworthy so much so that the ship sank within 10 to 15 minutes of its impact with the M/T Tacloban City. In addition, the ship was overloaded evidenced by the Certificate of Inspection issued by the Philippine Coast Guard Commander at Iloilo City stated that the total number of persons allowed on the ship was 864 but there were 1,004 on board the vessel when it sank. Taking these circumstances together, and the fact that the M/V Don Juan, as the faster and better-equipped vessel, could have avoided a collision with the PNOC tanker, this Court held that even if the Tacloban City had been at fault for failing to observe an internationally recognized rule of navigation, the Don Juan was guilty of contributory negligence.