Case Digest: Summa Insurance vs. Court of Appeals, 253 SCRA 175, G.R. No. 84860

 

Summa Insurance vs. Court of Appeals, 253 SCRA 175, G.R. No. 84860, February 06, 1996

Subject: Transportation Law

 

FACTS

The S/S "Galleon Sapphire", a vessel owned by the National Galleon Shipping Corporation (NGSC), arrived at Pier 3, South Harbor, Manila, carrying a shipment consigned to the order of Caterpillar Far East Ltd. with Semirara Coal Corporation (Semirara) as "notify party". The shipment, including a bundle of PC 8 U blades. The shipment was discharged to the custody of private respondent, formerly known as E. Razon, Inc., the exclusive arrastre operator at the South Harbor. Accordingly, three good-order cargo receipts were issued by NGSC, duly signed by the ship's checker and a representative of private respondent.

The forwarder, Sterling International Brokerage Corporation, withdrew the shipment from the pier and loaded it on the barge "Semirara 8104". However, when Semirara inspected the shipment at its warehouse, the bundle of PC8U blades was missing.

Semirara then filed with petitioner, private respondent and NGSC its claim for the value of the lost bundle. Petitioner paid Semirara the invoice value of the lost shipment. Semirara thereafter executed a release of claim and subrogation receipt. Consequently, petitioner filed its claims with NGSC and private respondent but it was unsuccessful.

The petitioner then filed a complaint with the RTC of Manila against NGSC and private respondent for collection of a sum of money, damages and attorney's fees.

The trial court rendered a decision absolving NGSC from any liability but finding private respondent liable to petitioner. On appeal, the CA modified the decision of the trial court and reduced private respondent's liability. Petitioner's motion for reconsideration was also denied. Hence, the instant petition.

ISSUE

Whether or not an arrastre operator is legally liable for the loss of a shipment in its custody.

RULING

Yes, the arrastre operator is legally liable for the loss of a shipment in its custody.

Under Article 1733 of the Civil Code and Section 3(8) of the Warehouse Receipts Law, being the custodian of the goods discharged from a vessel, an arrastre operator's duty is to take good care of the goods and to turn them over to the party entitled to their possession.

In this case, the relationship therefore between the consignee and the arrastre operator s much akin to that existing between the consignee or owner of shipped goods and the common carrier, or that between a depositor and a warehouseman. In the performance of its obligations, an arrastre operator should observe the same degree of diligence as that required of a common carrier and a warehouseman as enunciated from the above provision. It has been established that the shipment was lost while in the custody of private respondent. We find private respondent liable for the loss.

Case Digest: Brillo vs. Court of Appeals, 260 SCRA 383, G.R. No. 109090

 

Brillo vs. Court of Appeals, 260 SCRA 383, G.R. No. 109090, August 07, 1996

Subject: Transportation Law

FACTS

Daily Overland Express, Inc. was a forwarding business that charged freight for goods from Legaspi City to Manila. Brillo Handicrafts, Inc. was one of its regular customers, with an outstanding balance of P153,204.10. Daily filed a complaint in December 1990 for the balance, claiming it was exorbitant and overstated. The matter was referred to a certified public accountant, who calculated the liability as P109,741.66 and the defendant's insisted rate of P2.20 per ton per kilometer. The trial court had to determine which computation was applicable in the case. The Regional Manager of the Land Transportation Franchising and Regulatory Board informed the trial court that the fixed rate was issued by the Philippine Federation of Petroleum Haulers Association, not Daily.

ISSUE

Whether or not appellant is liable for the balance of freight.

RULING

Yes, the applicable rate for freight charges should be the one agreed upon by the parties, and it should have the force of law between them, if a party has already partially paid the amount and did not object to the rate being charged, they cannot belatedly challenge the amount being collected. Estoppel may set in if a party has engaged in a business relationship for a ling time without objecting to the billing.

In this case, appellant has engaged the trucking services of plaintiff years before this litigation. Plaintiff has been charging freight rates to which defendant never objected. it would have been easily for appellant to manifest its objection to plaintiff's billing from the start of their business relations, but it did not. Appellant was silent for so long a time until this suit was filed against it. It was too late, estoppel had already set in.

Case Digest: Litonjua Shipping Company Inc. vs. National Seamen Board, G.R. No. L-51910

 

Litonjua Shipping Company Inc. vs. National Seamen Board, G.R. No. L-51910, August 10, 1989

Subject: Transportation Law

FACTS

Petitioner is the duly appointed local crewing managing office of the Fairwind Shipping Corporation. On September 11, 1976 M/V Dufton Bay an ocean-going vessel of foreign registry owned by the R.D. Mullion ship broking agency under charter by Fairwind, while in the port of Cebu contracted the services (among others) of Gregorio Candongo as Third Engineer for 12 months with a monthly wage of US$500.00. The agreement was executed before the Cebu Area Manning Unit of the NSB, after which respondent boarded the vessel.

On December 28, 1976 before the expiration of contract, respondent was required to disembark at Port Kilang, Malaysia. Describe in his seaman’s handbook is the reason “by owner’s arrange.”

Condongo filed a complaint against Mullion (Shipping company) for violation of contract and against Litonjua as agent of shipowner. On February 1977, NSB rendered a judgment by default for failure of petitioners to appear during the initial hearing, rendering the same to pay Candongo because there was no sufficient or valid cause for the respondents to terminate the service of the complainant.

Litonjua contends that the shipowner, nor the charterer, was the employer of private respondent; and that liability for damages cannot be imposed upon petitioner which was a mere agent of the charterer.

ISSUE

Whether or not the charterer Fairwind was properly regarded as the employer of private respondent Candongo whom will be liable for damages.

RULING

No, the charterer Fairwind was properly regarded as the employer of private respondent Candongo whom will be liable for damages.

Under the law, a time charter, upon the other hand, like a demise charter, is a contract for the use of a vessel for a specified period of time or for the duration of one or more specified voyages. The owner of a time-chartered vessel retains possession and control through the master and crew who remain his employees. What the time charterer acquires is the right to utilize the carrying capacity and facilities of the vessel and to designate her destinations during the term of the charter. A voyage charter, or trip charter, is simply a contract of affreightment, that is, a contract for the carriage of goods, from one or more ports of loading to one or more ports of unloading, on one or on a series of voyages. In a voyage charter, master and crew remain in the employ of the owner of the vessel.

In this case, NSB decision was affirmed by the SC. It is the respondent Litonjua Shipping Co., Inc. is the authorized Philippine agent of Fairwind Shipping Corporation, charterer of the vessel 'Dufton Bay, wherein complainant, served as 3rd Engineer from 17 September until disembarkation on December 28, 1976. It is also clear from the complainant's wages account bearing the heading 'Fairwind Shipping Corporation', signed by the Master of the vessel that the Philippine agency referred to herein directed to pay the said withdrawn wages of $13.19 is no other than Litonjua Shipping Company, Inc. Thus, Litonjua Shipping is liable for the damages before private respondent.

Case Digest: Julius C. Ouano vs. CA and San Miguel, G.R. No. 142025

 

Julius C. Ouano vs. CA and San Miguel, G.R. No. 142025, July 4, 2002

Subject: Transportation Law

FACTS

San Miguel Corporation (SMC) entered into a Time Charter Party Agreement with Julius Ouano's J. Ouano Marine Services for the M/V Doa Roberta from June 1, 1989, to May 31, 1991, to transport SMC's beverage products. The agreement held Ouano responsible for crew negligence and shortlanded shipments. On November 12, 1990, despite Typhoon Ruping warnings, SMC issued sailing orders to Captain Inguito, leading to the sinking of M/V Doa Roberta on November 13, 1990. Ouano alleged SMC's negligence, initiating legal proceedings. Ouano, in lieu of the deceased captain, filed a Marine Protest. In response, Ouano filed an answer with cross-claim, alleging SMC's negligence as the proximate cause. The trial court found SMC liable, but both SMC and Ouano appealed.

ISSUE

Whether or not the petitioner is liable for the loss of the M/V Doa Roberta, the deaths of its crew, and damages to the cargo.

RULING

Yes, Ouano was held vicariously liable for Captain Inguito's negligence, lacking due diligence in selection and supervision. The Supreme Court upheld the appellate decision, affirming Ouano's liability, but absolving SMC of responsibility. Ouano was ordered to pay damages to the heirs of officers and crew members, excluding Captain Sabiniano Inguito, and indemnify SMC for cargo damages amounting to P10,278,542.40. The ruling emphasized Ouano's failure to ensure the vessel's seaworthiness and his vicarious liability for Captain Inguito's negligence, while dismissing SMC's liability for the sinking.

Case Digest: Maritime Agencies vs. Court of Appeals, 187 SCRA 709, G.R. No. 77638

 

Maritime Agencies vs. Court of Appeals, 187 SCRA 709, G.R. No. 77638, July 12, 1990

Subject: Transportation Law

FACTS

Transcontinental Fertilizer Company of London chartered from Hongkong Island Shipping Company of Hongkong the motor vessel named "Hongkong Island" for the shipment of 8,073.35 MT (gross) bagged urea from Novorossisk, Odessa, USSR to the Philippines. Part of the shipment will be discharged in Cebu and another in Manila. The goods were insured by the consignee with the Union Insurance Society of Canton, Ltd. against all risks.

Maritime Agencies & Services, Inc. was appointed as the charterer's agent and Macondray Company, Inc. as the owner's agent.

On October 31, 1979, the consignee filed a formal claim against Maritime, copy furnished Macondray, for the amount of P87,163.54, representing C & F value of the 1,383 shortlanded bags. On January 12, 1980, the consignee filed another formal claim, this time against Viva Customs Brokerage, for the amount of P36,030.23, representing the value of 574 bags of net unrecovered spillage.

These claims having been rejected, the consignee then went to Union, which on demand paid the total indemnity pursuant to the insurance contract. As subrogee of the consignee, Union then filed a complaint for reimbursement of this amount, with legal interest and attorney's fees, against Hongkong Island Company, Ltd., Maritime Agencies & Services, Inc. and/or Viva Customs Brokerage.  On April 20, 1981, the complaint was amended to drop Viva and implead Macondray Company, Inc. as a new defendant.

After trial, the trial court rendered judgment holding the defendants liable. On appeal, CA modified RTC’s decision. Maritime and Union filed separate motions for reconsideration which were both denied. Hence, this petition.

ISSUE

Whether or not Maritime Agencies, as the charterer's agent, was liable for the cargo loss.

RULING

Maritime Agencies, as the charterer's agent, was not liable for the cargo loss.

Under the law, a voyage charter being a private carriage, the parties may freely contract respecting liability for damage to the goods and other matters. The basic principle is that "the responsibility for cargo loss falls on the one who agreed to perform the duty involved" by the terms of most voyage charters. It is a well-settled principle that the agent shall be liable for the act or omission of the principal only if the latter is undisclosed.

In this case, the charterer did not represent itself as a carrier and indeed assumed responsibility only for the unloading of the cargo, i.e, after the goods were already outside the custody of the vessel. In supervising the unloading of the cargo and issuing daily report for the discharge of the cargo, Maritime acted in representation of the charterer and not of the vessel. It thus cannot be considered a ship agent. As a mere charterer's agent, it cannot be held solidarily liable with Transcontinental for the losses/damages to the cargo outside the custody of the vessel. Notably, Transcontinental was disclosed as the charterer's principal and there is no question that Maritime acted within the scope of its authority. The liability imposable upon it cannot be borne by Maritime which, as a mere agent, is not answerable for injury caused by its principal.

Case Digest: Belgian Overseas vs. Philippine First, 383 SCRA 23, G.R. No. 143133

 

Belgian Overseas vs. Philippine First, 383 SCRA 23, G.R. No. 143133, June 05, 2002

Subject: Transportation Law

FACTS

CMC Trading A.G. shipped on board the MN ‘Anangel Sky’ at Hamburg, Germany 242 coils of various Prime Cold Rolled Steel sheets for transportation to Manila consigned to the Philippine Steel Trading Corporation.  On July 28, 1990, MN Anangel Sky arrived at the port of Manila and, within the subsequent days, discharged the subject cargo.  Four (4) coils were found to be in bad order B.O. Tally sheet No. 154974.  Finding the four (4) coils in their damaged state to be unfit for the intended purpose, the consignee Philippine Steel Trading Corporation declared the same as total loss.

Philippine First Insurance refused to submit to the consignee’s claim.  Consequently, Belgian Overseas paid the consignee and was subrogated to the latter’s rights and causes of action against the defendants-appellees. Subsequently, the plaintiff-appellant instituted this complaint for recovery of the amount paid by them, to the consignee as insured.

Impugning the propriety of the suit against them, defendants-appellees imputed that the damage and/or loss was due to pre-shipment damage, to the inherent nature, vice or defect of the goods, or to perils, danger, and accidents of the sea, or to insufficiency of packing thereof, or to the act or omission of the shipper of the goods or their representatives.  In addition, thereto, defendants-appellees argued that their liability, if there be any, should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws.  

Finally, defendants-appellees averred that, in any event, they exercised due diligence and foresight required by law to prevent any damage/loss to said shipment.”

ISSUE

Whether or not a notation in the bill of lading at the time of loading is sufficient to show pre-shipment damage and to exempt herein defendants from liability.

RULING

No, a notation in the bill of lading at the time of loading is insufficient

Under the law, mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no adequate explanation is given as to how the deterioration, the loss or the destruction of the goods happened, the transporter shall be held responsible.

In this case, petitioners failed to rebut the prima facie presumption of negligence. True, the words "metal envelopes rust stained and slightly dented" were noted on the Bill of Lading; however, there is no showing that petitioners exercised due diligence to forestall or lessen the loss. Having failed to discharge the burden of proving that they have exercised the extraordinary diligence required by law, petitioners cannot escape liability for the damage to the four coils

Case Digest: Eastern Shipping vs. Court of Appeals, 190 SCRA 512, G.R. No. 80936

 

Eastern Shipping vs. Court of Appeals, 190 SCRA 512, G.R. No. 80936, October 17, 1990

Subject: Transportation Law

FACTS

Nanyo Corporation of Japan shipped five packages of supplies and materials to Manila via Eastern Shipping's vessel. The bill of lading was consigned to "Shipper's Order" with an "Address Arrival Notice" to Consolidated Mines Inc. (CMI).

Eastern Shipping released the shipment to CMI without requiring the surrender of the original bill of lading, based on CMI's undertaking to indemnify Eastern Shipping from any claims or liabilities.

Several months later, Hongkong & Shanghai Banking Corporation (HSBC), which financed the shipment, claimed that the cargo was misdelivered and demanded compensation from ESLI.

HSBC wrote another demand letter through counsel in contemplation of a legal action against ESLI should it not make good HSBC's claim.

On the other hand, CMI wrote a letter to HSBC admitting that they received the shipment in question due to a guarantee executed by them and requested HSBC that legal action be held off for at least thirty (30) days, promising to settle its account with HSBC from the funds it was expecting from Benguet Corporation.

CMI having failed to fulfill its promise, HSBC filed a complaint before the then CFI of Rizal against the petitioner praying for actual and compensatory damages, exemplary damage and attorney's fees plus expenses of litigation and judicial costs.

After two motions for extensions, the petitioner-carrier filed its answer with a counterclaim.

On August 15, 1981, the petitioner-carrier filed a third-party complaint against CMI seeking reimbursement from the latter of whatever pecuniary obligations the petitioner may be liable to HSBC, as well as moral damages.

During the trial, CMI filed a Motion to Stay Action given the pendency of involuntary insolvency proceedings commenced against it in the meantime by its creditors which included HSBC. This motion was denied by the trial court.

Based on the evidence presented by HSBC and the petitioner, as CMI failed to present its evidence, the court decided in favor of the plaintiff and against the defendant Eastern Shipping Lines, Inc., ordering the latter to pay.

Petitioner’s motion for reconsideration was denied, thus, they appealed to the CA. The CA AFFIRMED in toto CFI’s (now RTC) decision. Hence, this petition for review.

ISSUE

Whether or not the petitioner carrier "committed gross error and negligence when it released the cargo to CMI", whose name appear as notify party in the bill of lading.

RULING

No, the petitioner carrier did not commit gross error and negligence when it released the cargo to CMI.

Article 353 of the Corporation Code states that if in case of loss or for any other reason whatsoever, the consignee cannot return upon receiving the merchandise the bin of lading subscribed by the carrier, he shall give said carrier receipt of the goods delivered this receipt producing the same effects as the return of the bill of lading.

In this case, exceptional circumstances allow a deviation from the general rule regarding the surrender of the bill of lading. The rule cannot always be absolute. The petitioner cannot be faulted for releasing the goods to CMI under the circumstances, due to its lack of knowledge as to who was the real consignee, given CMI's strong representations and letter of undertaking wherein it stated that the bill of lading would be presented later; precisely the situation covered by the last paragraph of Art. 353 of the Corporation Code. Under the exceptional circumstances and applying especially strong considerations of equity, the petitioner did not commit any fault sufficient to render it liable to HSBC. On the contrary, it was HSBC and CMI who were obviously in bad faith in dealing with the petitioner-carrier.