Case Digest: Philippine Charter vs. Chemoil, G.R. No. 136888

 

Philippine Charter vs. Chemoil, 463 SCRA 202, G.R. No. 136888, June 29, 2005

Subject: Transportation Law

FACTS

Philippine Charter Insurance Corporation is a domestic corporation engaged in the business of non-life insurance. Respondent Chemoil Lighterage Corporation is also a domestic corporation engaged in the transport of goods.

Samkyung Chemical Company, Ltd., based in South Korea, shipped 62.06 metric tons of the liquid chemical DIOCTYL PHTHALATE (DOP) on board MT “TACHIBANA  and another 436.70 metric tons of DOP to the Philippines.

The consignee was Plastic Group Phils., Inc. in Manila. PGP insured the cargo with Philippine Charter Insurance Corporation against all risks.

The ocean tanker MT “TACHIBANA” unloaded the cargo to the tanker barge, which shall transport the same to Del Pan Bridge in Pasig River and haul it by land to PGP’s storage tanks in Calamba, Laguna. Upon inspection by PGP, the samples taken from the shipment showed discoloration demonstrating that it was damaged. PGP then sent a letter where it formally made an insurance claim for the loss it sustained. Petitioner paid PGP the full and final payment for the loss and issued a Subrogation Receipt. Meanwhile, PGP paid the respondent the full payment for the latter’s services.

An action for damages was instituted by the petitioner-insurer against the respondent carrier before the RTC, Br.16, City of Manila. The RTC decided in favor of the plaintiff. The counterclaims are DISMISSED. On appeal, CA reversed the trial court’s decision.

ISSUE

Whether or not the damage to the cargo was due to the fault or negligence of the respondent. 

RULING

No, the damage was not due to the fault or negligence of the respondent. 

Under the law, within twenty-four hours following the receipt of the merchandise a claim may be made against the carrier on account of damage or average found upon opening the packages. After the periods mentioned have elapsed, or after the transportation charges have been paid, no claim whatsoever shall be admitted against the carrier with regard to the condition in which the goods transported were delivered.

In this case, PGP failed to file any notice, claim or protest within the period required by Article 366 of the Code of Commerce, which is a condition precedent to the accrual of a right of action against the carrier and the transportation charges have been paid by PGP which estopped petitioners to claim whatsoever against the carrier.

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.

Case Digest: Mitsui Lines vs. Court of Appeals, G.R. No. 119571

 

Mitsui Lines vs. 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.

ISSUE

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

RULING

No. The suit is not for "loss or damage" to goods contemplated in §3(6), the question of prescription of action is governed not by the COGSA but by Art. 1144 of the Civil Code.

Article 1144 of the Civil Code provides for a prescriptive period of ten years. 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 would be some merit in appellant's insistence that the damages suffered by him as a result of the delay in the shipment of his cargo are not covered by the prescriptive provision of the Carriage of Goods by Sea Act above referred to, if such damages were due, not to the deterioration and decay of the goods while in transit, but to other causes independent of the condition of the cargo upon arrival, like a drop in their market value.

Case Digest: Campagnie vs. Hamburg-Amerika, G.R. No. L-10986

 

Campagnie vs. Hamburg-Amerika, 36 Phil. 590, G.R. No. L-10986, March 31, 1917

Subject: Transportation Law

FACTS

This is an action by the Compagnie de Commerce et de Navigation D'Extreme Orient, a corporation duly organized and existing under and by virtue of the laws of the Republic of France, with its principal office in the city of Paris, France, and a branch office in the city of Saigon, against the Hamburg Amerika Packetfacht Actien Gesellschaft, a corporation duly organized under and by virtue of the laws of the Empire of Germany, with its principal office in the city of Humburg, Germany, and represented in the city of Manila by Behn, Meyer & Company (Limited), a corporation. The plaintiff seeks to recover the full value if Saigon of a certain cargo of the steamship Sambia, alleged to amounts to the sum of P266,930, Philippine currency, and prays that certain proceeds of the sale of said cargo, amounting to P135,766.01, now on deposit in this court, be applied on said judgment, and that judgment be rendered in favor of the plaintiff and against the defendant for such sum as may represent the difference between the said amount and the value of the payment and delivery unto plaintiff from said deposit, with legal interest and costs of suit.

RTC decided in favor of the plaintiff and against the defendant and further, that the plaintiff to recover from the defendant the sum of P60,841.32 for the actual damages suffered by the plaintiff by the defendant's breach of the charter party in evidence, with legal interest thereon from the date of the filing of the complaint in this case until paid. The defendant's cross-complaint is hereby dismissed with the costs of this case against the defendant. Both plaintiff and defendant appealed to the Supreme Court as to the damages imposed.

ISSUE

Whether or not the master of the Sambia, when he fled from the port of Saigon and took refuge in the port of Manila, had reasonable grounds to apprehend that his vessel was in danger of seizure or capture by the public enemies of the flag under which he sailed.

RULING

Yes, the master of the Sambia had reasonable grounds to apprehend that his vessel was in danger of seizure or capture by the public enemies of the flag under which he sailed.

Under the general provisions of maritime law  and the express provisions of article 7 of the charter party, the act of God, the king's enemies, arrests and restraints of princes, rulers and people, perils of the seas, barratry of the master and crew, pirates, collisions, strandings, loss or damage from fire on board, in hulk or craft, or on shore; and act, neglect, default or error in judgment whatsoever of pilots, master, crew or other servant of the shipowners in the navigation of the steamer; and all and every the dangers and accidents of the seas, canals and rivers, and of navigation of whatever nature or kind always mutually excepted.

In this case, there is no question as to the necessity, arising out of the presence of enemy cruisers on the high seas which compelled the Sambia, once she had left the port of Saigon, to take refuge in the port of Manila and to stay there indefinitely pending the outcome of the war. The deviation of the Sambia from the route prescribed in her charter party, and the subsequent abandonment by the master of the voyage contemplated in the contract of affreightment, must be held to have been justified by the necessity under which he was placed to elect that course which would remove and preserve the vessel from danger of seizure by the public enemies of the flag under which she sailed; and that neither the vessel nor her owners are liable for the resultant damages suffered by the owner of the cargo.

Case Digest: Transasia Shipping vs. Court of Appeals, G.R. No. 118126

 

Transasia Shipping vs. Court of Appeals, 254 SCRA 260, G.R. No. 118126, March 04, 1996

Subject: Transportation Law

FACTS

Respondent Atty. Renato Arroyo, a public attorney, bought a ticket from herein petitioner for the voyage of M/V Asia Thailand vessel to Cagayan de Oro City from Cebu City on November 12, 1991.

The vessel departed with only one engine running. After an hour, the vessel stopped near Kawit Island and dropped its anchor thereat. After half an hour of stillness, some passengers demanded that they should be allowed to return to Cebu City for they were no longer willing to continue their voyage to Cagayan de Oro City. The captain acceded to their request and thus the vessel headed back to Cebu City.

In Cebu City, plaintiff together with the other passengers who requested to be brought back to Cebu City, were allowed to disembark. Thereafter, the vessel proceeded to Cagayan de Oro City. Petitioner, the next day, boarded the M/V Asia Japan for its voyage to Cagayan de Oro City, likewise a vessel of defendant.

Hence, respondent Arroyo filed before the trial court “an action for damage arising from bad faith, breach of contract and from tort,” against petitioner. The trial court ruled only for breach of contract. The CA reversed the trial court's decision and allowed only compensatory, moral, and exemplary damages. No actual damages was given for there was no designation of departure time as well as petitioner’s liability as to delay in departure.

ISSUE

Whether or not in case of interruption of a vessel's voyage and the consequent delay in that vessel's arrival at its port of destination, the right of a passenger affected thereby to be determined and governed by the vague Civil Code provision on common carriers, or in the absence of a specific provision thereon governed by Art. 698 of the Code of Commerce?

RULING

Art. 698 of the Code of Commerce applies suppletorily with the New Civil Code provisions.

The Civil Code is silent on the rights and duties arising from the delay in a vessel's voyage. However, the petitioner correctly cites Article 698 of the Code of Commerce, which outlines specific provisions for such situations. According to Article 698, passengers must pay a fare proportionate to the distance covered if a voyage is interrupted due to fortuitous events or force majeure. Passengers have a right to indemnity if the interruption is exclusively caused by the captain. The article applies suppletorily according to Article 1766 of the Civil Code.

In this case, the petitioner's failure to observe extraordinary diligence caused the delay. Article 698, in conjunction with other Civil Code articles, holds the petitioner liable for pecuniary losses or loss of profits suffered by the private respondent due to the delay. The private respondent's loss of income, assuming he stayed on the vessel, is considered. However, as the private respondent and some passengers chose not to complete the voyage, causing the vessel to return to its origin, any further delay was a result of his decision to disembark. Had the private respondent stayed on the first vessel, he would have reached his destination on time. Compensatory damages must be proven, and the private respondent failed to provide convincing evidence that he did not receive his salary for the specified date, or that his absence was not excused. Consequently, the petitioner may not be liable for compensatory damages.

Case Digest: Philamgen vs. Court of Appeals, G.R. No. 101426

 

Philamgen vs. Court of Appeals, G.R. No. 101426, May 17, 1993

Subject: Transportation Law

FACTS

On September 4, 1985 the Davao Union Marketing Corporation of Davao City shipped on board the vessel M/V "Crazy Horse" operated by the Transpacific Towage, Inc. cargo consisting of 9,750 sheets of union brand GI sheets and 86,860 bags of union Pozzolan and union Portland Cement. The cargo was consigned to the Bicol Union Center of Pasacao, Camarines Sur, with a certain Pedro Olivan as the "Notify-Party."

The cargo was insured by the Philippine American General Insurance Co., Inc.

Upon arrival, the shipmaster notified the consignee's "Notify-Party" that the vessel was already (sic) to discharge the cargo. However, the discharging could not be affected immediately and continuously because of certain reasons one of which is that a super typhoon code-named "Saling" entered the Philippine area of responsibility and was felt in the eastern coast of the country; Pasacao was placed under Storm Signal No. 3. The discharging of the cargo had to be suspended.

Because of the storm, the vessel broke into two (2) parts and sank partially. The whole barrio outnumbered the crew and the guards, making them helpless to stop the pilferage and looting. As a result of the incident, the cargo of cement was damaged while the GI sheets were looted and nothing was left of the undischarged pieces.

Because the cargo was insured by it the Philippine American General Insurance Co., Inc. paid the shipper Davao Union Marketing Corporation. As a subrogee, the insurer made demands upon the Transpacific Towage, Inc. for the payment of said amount. The latter refused, hence, the Philippine American General Insurance Co., Inc. filed the present complaint.

The lower court found the defendant carrier had exposed the property to the accident and that the plaintiff is also guilty of contributory negligence. On appeal, CA reversed RTC’s decision.

ISSUE

Whether or not the private respondent is liable for the loss of the said insured cargo.

RULING

No, the private respondent is not liable for the loss of the said insured cargo.

Under the law, in order that the common carrier may be exempted from responsibility, the natural disaster must have been the proximate and only cause of the loss. However, the common carrier must exercise due diligence to prevent or minimize loss before, during and after the occurrence of flood, storm or other natural disaster in order that the common carrier may be exempted from liability for the loss, destruction, or deterioration of the goods.

In this case, it is that there was indeed a delay in discharging the cargo from the vessel. However, neither of the parties herein could be faulted for such delay, for the same (delay) was due not to negligence, but to the natural conditions of the port of Pasacao and several other factors. The cargo having been lost due to typhoon "Saling", and the delay incurred in its unloading not being due to negligence, private respondent is exempt from liability for the loss of the cargo, pursuant to Article 1740 of the Civil Code. The records also show that before, during and after the occurrence of typhoon "Saling", private respondent through its shipmaster exercised due negligence to prevent or minimize the loss of the cargo. The diligence exercised by the shipmaster further supports the exemption of private respondent from liability for the loss of the cargo, in accordance with Article 1739 of the Civil Code.

Case Digest: Maersk Line vs. Court of Appeals, G.R. No. 94761

 

Maersk Line vs. Court of Appeals, 222 SCRA 108, G.R. No. 94761, May 17, 1993

Subject: Transportation Law

FACTS

Efren Castillo, proprietor of Ethegal Laboratories, ordered 600,000 empty gelatin capsules from Eli Lilly, Inc. for his pharmaceutical products in the Philippines. The capsules were placed in 6 drums of 100,000 capsules each valued at $1,668.71. Eli Lilly informed Castillo that the capsules were already shipped on board MV "Anders Maesrkline" and expected to arrive in the Philippines on April 3, 1977. However, the capsules were diverted to Richmond, VA, and then back to Oakland, CA, resulting in the goods arriving in the Philippines on June 10, 1977. Castillo refused to take delivery and filed an action for rescission of contract with damages against Maersk and Eli Lilly, alleging gross negligence and undue delay.

After trial, the court rendered judgment in favor of respondent Castillo. On appeal, respondent court affirmed the lower court's decision with modifications.

ISSUE

Whether or not the common carrier is liable for damages.

RULING

Yes, the common carrier is liable for damages.

Under settled 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, SC held that the petitioner is liable for damages due to the delay in the delivery of goods, based on the rule that contracts of adhesion are void. The lower court ruled that the exemption against liability for delay is against public policy and therefore void. The private respondent's action is anchored on Article 1170 of the NCC, not Admiralty law. The delay of two 2 months and seven 7 days was beyond reasonableness. The shipment was described as gelatin capsules for pharmaceutical products and was mishipped to Richmond, Virginia due to the petitioner's negligence. The petitioner's insistence that it cannot be held liable for the delay is found to be unfounded.