eastern shipping lines vs

8/3/2019 Eastern Shipping Lines Vs

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Eastern Shipping Lines vs. CA (GR 97412, 12 July 1994)En Banc, Vitug (J): 13 concur, 1 took no partFacts:On 4 December 1981, 2 fiber drums of riboflavin were shipped from Yokohama, Japan for deliveryves se l S S Eastern C o m e t owned byEas tern Shi ppi ng Line s und er Bill of Ladi ng YMA- 8. The shi pmen twas insured under Mercantile Insurance Companys MarineInsurance Policy 81/01177 for P36,382,466.38.Upon arrival of the shipment in Manila on 12 December 1981, it was discharged unto the custodyof MetroPort Services, Inc. The latter excepted to one drum, said to be in bad order, which damage was unknown toMercantile Insurance. On 7January 1982, Allied Brokerage Corporation received the shipment from MetroPo r t S e r v i c e , o n e d r u m o p e n e d a n d w i t h o u t

s ea l . On Ja nu ar y 8 an d 14 , 19 82 , Al l i ed Br ok er ag e ma de deliveries of the shipment to the consignees warehouse. Thelatter excepted to one drum which containedspilla ges , whi le the res t of the cont ents was adu lter ated /fa ke. Due to thelosses/damage sustained by saiddrum, the consignee suffered losses totaling P19,032.95, due to the fault andnegligence of the shippingcompany, arrastre operator and broker-forwarder. Claims were presented against them who failed and refusedtopay the same. As a consequence of the losses sustained, Mercantile Insurance was compelled to pay theconsignee P19,032.95 under theaforestated marine insurance policy, so that it became subrogated to all therights of action of said consignee against the shipping company, etc.After trial, the trialcourt rendered judgment (1) ordering the shipping company, the arrastre operator and thebroker-forwarder to pay Mercantile Insurance, insolidum, the amount of P19,032.95 with the present legalinterest of 12% per annum from October 1, 1982, the date of filing of this complaints,until fully paid (theliability of defendant Eastern Shipping, Inc. shall not exceed US$500 per case or the CIF value of the loss,whichever is lesser,while the liability of defendant Metro Port Service, Inc. shall be to the extent of the actualin vo ic e va lu e of ea ch pa ck ag e, cr at e bo x orcontainer in no case to exceed P5,000.00 each, pursuant toSection 6.01 of the Management Contract); P3,000.00 asatto rn ey s fees, and costs; and dismissing thecounterclaims and crossclaim of defendant/cross-claimant Allied BrokerageCorporation.Dissatisfied, Eastern Shipping Lines appealed to the Court of Appeals. The Court of Appeal affirmed in totothe judgment of thecourt a quo.T h e S u p r e m e C o u r t p a r t l y g r a n t e d t h e p e t i t i o n . T h e C o u r t a f f i r m e d t h e a p p e a l e d d e c i s i o nw i t h t h e modification that the legal interest to be paid is 6% on the amount due computed from the decision, dated 3Febr ua ry 19 88 , of th ecou rt a q uo. A 1 2% int erest , in lieu of 6%, sha ll b e im pos ed on suc h am oun t u pon finality of this decision until the paymentthereof.

1 . D u r a t i o n o f c o m m o n c a r r i e r s d u t y t o o b s e r v e r e q u i s i t e d i l i g e n c eThe common carriers duty to observe the requisite diligence in the shipment of goods lasts from thetime the articles are surrendered to orunconditionally placed in the possession of, and received by, the carrierfor transportation until delivered to, or until the lapse of a reasonable timefor their acceptance, by the personentitled to receive them (Arts. 1736-1738, Civil Code; Ganzon vs. Court of Appeals, 161 SCRA 646; KuiBaivs. Dollar Steamship Lines, 52 Phil. 863).2 . P r e s u m p t i o n o f c a r r i e r s n e g l i g e n c e i n c a s e o f l o s s , d a m a g e o f g o o d s ;N o n e o f t h e e x c l u s i v e exceptions can be applied

Haystacks (Berne

Guerrero)When the goods

shipped either arelost or arrive in


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damagedcondition, apresumptionarises againstthecarrier of its

failure to observethat diligence,

and there need


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not be an expressfinding ofnegligence toholdit liable (Art.1735, Civil Code;

PhilippineNational

Railways vs.


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Court of Appeals,139 SCRA 87;MetroPortService vs. Courtof Appeals, 131

SCRA 365).There are, of

course,


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exceptional caseswhensuchpresumptionof fault is notobserved but

these cases,enumerated in

Article 1734 1 of


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the Civil Code,areexclusive, notone of which canbe applied to thecase at bar.3.The rationalewhy the carrier

and arrastre


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operator are made

liable in solidum

In Firemans

Fund Insurancevs. Metro Port

Services (182SCRA 455), the

Court has


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explainedinholding thecarrier and thearrastre operatorliable in solidum,

in the mannerthat The legal

relationshipbetwe


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en the consigneeand the arrastreoperator is akin tothat of a depositorand

warehouseman(Lua Kian

v.Manila


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Railroad Co., 19SCRA 5 [1967].The relationshipbetween theconsignee and the

common carrierissimilar to that

of the consignee


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and the arrastreoperator(NorthernMotors, Inc. v.Prince Line, et

al., 107 Phil.253[1960]). Since it

is the duty of the


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Arrastre to takegood care of thegoods that are inits custody andtodeliver them in

good condition tothe consignee,

such


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responsibilityalso devolvesupon the Carrier.Both theArrastreand the Carrier

are thereforecharged with the

obligation to


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deliver the goodsin goodscondition totheconsignee. Thepronouncement,

however, doesnot imply that

the arrastre


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operator and thecustomsbrokerare themselvesalways andnecessarily liable

solidarily withthe carrier, or

vice-versa, nor


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thatattendantfacts in a givencase may not varythe rule.4.First group of

cases onvariances on the

Courts ruling onlegal interest


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In the cases of thecases ofReformina v.Tomol (1985),Philippine Rabbit

Bus Lines v. Cruz(1986),Florendo

v. Ruiz (1989)


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and NationalPowerCorporation v.angas (1992), thebasic issue focus

on theapplicationof either the 6%

(under the Civil


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Code) or 12%(under theCentral BankCircular) interestperannum. It is

easily discerniblein these cases that

there has been a


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consistentholding that theCentralBankCircularimposing the

12% interest perannum applies

only to loans or


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forbearance 16 ofmoney, goodsorcredits, as wellas to judgmentsinvolving such

loan orforbearance of

money, goods or


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credits, and thatthe6% interestunder the CivilCode governswhen the

transactioninvolves the

payment of


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indemnities intheconcept ofdamage arisingfrom the breachof a delay in the

performance ofobligations in

general.


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Observe,too, thatin these cases, acommon timeframe in thecomputation of

the 6% interestper annum has

beenapplied, i.e.,


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from the time thecomplaint is fileduntil the adjudgedamount is fullypaid.5.Second group ofcases on

variances on the


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Courts ruling on

legal interest

The cases of

MalayanInsurance

Company v.Manila Port

Service (1969),


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Nakpil and Sonsv. CourtofAppeals(1988), andAmerican

ExpressInternational v.

Intermediate


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Appellate Court(1988), did notalterthepronouncedrule on the

application of the6% or 12%

interest per


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annum,depending onwhether or nottheamountinvolved is a loan

or forbearance,on the one hand,

or one of


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indemnity fordamage, on theotherhand.Unlike,however, thefirstgroupwhich remained

consistent in


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holding that therunning of thelegalinterestshould befrom the time of

the filing of thecomplaint until

fully paid, the


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secondgroupvaried onthecommencement of the runningof the legal

interest. Malayanheld that the

amount awarded


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should bearlegalinterest fromthe date of thedecision of thecourt a quo,

explaining thatif the suit were

for


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damages,unliquidated and notknown untildefinitelyascertained,

assessed anddetermined by the

courts after


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proof,then,interest shouldbe from the dateof the decision.American

ExpressInternational v.

IAC, introduced


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adifferent timeframe forreckoning the 6%interest byordering it to becomputed fromthe finality of

(the)decision


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until paid. TheNakpil and Sonscase ruled that12% interest perannum should be

imposed fromthefinality of the

decision until the


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judgment amountis paid. Thefactualcircumstancesmay have called

fordifferentapplications,

guided by the rule


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that the courts arevested withdiscretion,depending on theequitiesof each

case, on theaward of interest.


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6.Rules in the

determination oflegal interests

eastern shipping lines vs

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