transpo (nov. 29 and dec. 3)

8/10/2019 Transpo (Nov. 29 and Dec. 3)

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2.

When, whatever its object may be, the carrier is

a merchant or is habitually engaged in

transportation for the public.

Art. 350. The shipper as well as the carrier of

merchandise or goods may mutually demand that a

bill of lading be made, stating:

1.

The name, surname and residence of the

shipper2.


carrier

3.


person to whom or to whose order the goods

are to be sent or whether they are to be

delivered to the bearer of said bill.

4.

The description of the goods, with a statement

of their kind, of their weight, and of the

external marks or signs of the packages in

which they are contained.

5.

The cost of transportation.

6.

The date on which shipment is made7.

The place of delivery to the carrier

8.

The place and the time at which delivery to the

consignee shall be made

9.

The indemnity to be paid by the carrier in case

of delay, if there should be any agreement on

this matter.

Art. 351. In transportation made by railroads or other

enterprises subject to regulation rate and time

schedules, it shall be sufficient for the bills of lading

or the declaration of shipment furnished by the

shipper to refer, with respect to the cost, time andspecial conditions of the carriage, to the schedules and

regulations the application of which he requests; and if

the shipper does not determine the schedule, the

carrier must apply the rate of those which appear to be

the lowest, with the conditions inherent thereto,

always including a statement or reference to in the bill

of lading which he delivers to the shipper.

Art. 352. The bills of lading, or tickets in cases of

transportation of passengers, may be diverse, some for

persons and others for baggage; but all of them shall

bear the name of the carrier, the date of shipment, thepoints of departure and arrival, the cost, and, with

respect to the baggage, the number and weight of the

packages, with such other manifestations which may

be considered necessary for their easy identification.

Art. 353. The legal basis of the contract between the

shipper and the carrier shall be the bill of lading, by

the contents of which all disputes which may arise

with regard to their execution and fulfillment shall be

decided without admission of other exceptions than

forgery or material errors in the drafting thereof.

After the contract has been complied with, the bill of

lading issued by the carrier shall be returned to him

and by virtue of the exchange of this certificate for the

article transported, the respective obligations and

actions shall be considered cancelled, unless in the

same act the claims which the contracting parties

desire to reserve are reduced to writing, exception

being made of the provisions of Art 366.

If in case of loss or for any other reason whatsoever,the consignee cannot return upon receiving the

merchandise the bill of lading subscribed by the

carrier, he shall give said carrier a receipt for the goods

delivered, this receipt producing the same effects as

the return of the bill of lading.

Art. 354. In the absence of a bill of lading, the

respective claims of the parties shall be decided by the

legal proofs that each one may submit in support of his

claims, in accordance with the general provisions

established in this Code for commercial contracts.

Art. 355. The liability of the carrier shall begin from

the moment he receives the merchandise, in person or

through a person entrusted thereto in the place

indicated for their reception.

Art. 356. Carriers may refuse to accept packages which

appear unfit for transportation; and if said

transportation is to be over a railroad, and the

shipment is insisted on, the company shall carry it,

being exempt from all liability of its objections are so

stated in the bill of lading

Art. 358. Should no period within which the goods areto be delivered be previously fixed, the carrier shall be

under the obligation to forward them in the first

shipment of the same or similar merchandise which he

may make to the point of delivery; and should he not

do so, the damages occasioned by the delay shall be

suffered by him.

Art. 359. If there should be an agreement between the

shipper and the carrier with regard to the road over

which the transportation is to be made, the carrier

cannot change the route, unless obliged to do so by

force majeure; and should he do so without beingforced to, he shall be liable for any damage which may

be suffered by the goods transported for any other

cause whatsoever, besides being required to pay the

amount which may have been stipulated for such case.

When on account of the said force majeure the carrier

is obliged to take another route, causing an increase in

the transportation charges, he shall be reimbursed for

said increase after presenting the formal proof thereof.


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Art. 360. The shipper may without changing the place

where the delivery is to be made, change the

consignment of the goods delivered to the carrier, and

the latter shall comply with his orders, provided that at

the time of making the change of the consignee the bill

of lading subscribed by the carrier be returned to him,

if one were issued, exchanging it for another

containing the novation of the contact. The expenses

arising from the change of consignment shall be

defrayed by the shipper.

Art. 361. Merchandise shall be transported at the risk

and venture of the shipper, if the contrary was not

expressly stipulated.

Therefore, all damages and impairment suffered by

the goods during the transportation, by reason of

accident, force majeure, or by virtue of the nature or

defect of the articles, shall be for the account and risk

of the shipper.

The proof of these accidents is incumbent on thecarrier.

Art. 362. The carrier, however, shall be liable for the

losses and damages arising from the causes mentioned

in the foregoing article if it is proved that they

occurred on account of his negligence or because he

did not take the precautions usually adopted by

careful persons, unless the shipper committed fraud in

the bill of lading, making him believe that the goods

were of a class or quality different from what they

really were.

If, notwithstanding the precaution referred to in thisarticle, the goods transported run the risk of being lost

on account of the nature or by reason of an

unavoidable accident, there being no time for the

owners to dispose of the same, the carrier shall proceed

to their sale, placing them for this purpose at the

disposal of the judicial authority of the officials

determined by special provisions.

Art. 363. With the exception of the cases prescribed in

the second paragraph of Art 361, the carrier shall be

obliged to deliver the goods transported in the same

condition in which according to the bill of lading, theywere at the time of their receipt, without any detriment

or impairment, and should he not do so, shall be

obliged to pay the value of the goods not delivered at

the point where they should have been at the time the

delivery should have taken place.

If part of the goods transported should be delivered,

the consignee may refuse to receive it when he proves

that he cannot make use thereof without the others.

The last paragraph above is an instance when the

consignee may abandon goods. The other instances are

set forth in Articles 365 and 371 of the Code of

Commerce

Art. 687. The charters and shippers cannot abandon

merchandise damaged on account of its own inherent

defect or fortuitous event for the payment of the

freightage and other expenses.

The abandonment shall be proper, however, if the

cargo should consist of liquids and they should have

leaked out, there remaining in the containers not more

than one-quarter of their content.

Art. 364. If the effect of the damage referred to in art

361 should be only a reduction in the value of the

goods, the obligation of the carrier shall be reduced to

the payment of the amount of said reduction in value

after appraisal by experts.

Art. 365. If, on account of the damage, the goods are

rendered useless for purposes of sale or consumptionin the use for which they are properly destined, the

consignee shall not be bound to receive them, and may

leave them in the hands of the carrier, demanding

payment therefor at current market prices.

If among the goods damaged there should be some in

good condition and without any defect whatsoever, the

foregoing provisions shall be applicable with regard to

the damaged ones, and the consignee shall receive

those which are sound, this separation being made by

distinct and separate articles, no object being divided

for the purpose, unless the consignee proves theimpossibility of conveniently making use thereof in

this form.

The same provision shall be applied to merchandise in

bales or packages, with distinction of the packages

which appear sound.

Art. 368. The carrier must deliver to the consignee

without any delay or difficulty the merchandise

received by him, by reason of the mere fact of being

designated in the bill of lading to receive it; and

should said carrier not do so, he shall be liable for thedamages which may arise therefrom

Art. 369. Should the consignee not be found at the

domicile indicated in the bill of lading, or should

refuse to pay the transportation charges and expenses

or to receive the goods, the deposit of said goods shall

be ordered by the municipal judge, where there is no

judge of first instance, the be placed at the disposal of

the shipper or sender, without prejudice to a person

having better rights, this deposit having all the effects

of a delivery.


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Art. 711. The legitimate holder of a bill of lading who

does not present it to the captain of the vessel before

her unloading, obliging the latter thereby to unload it

and place it in deposit, shall be liable for the cost of

warehousing and other expenses arising therefrom.

Art. 370. If a period has been fixed for the delivery of

the goods, it must be made within the same; otherwise

the carrier shall pay the indemnity agreed upon in the

bill of lading, neither the shipper nor consignee beingentitled to anything else.

Should no indemnity have been agreed upon and the

delay exceeds the time fixed in the bill of lading, the

carrier shall be liable for the damages which may have

been caused by the delay.

Art. 371. In cases of delay on account of the fault of the

carrier, referred to in the foregoing, the consignee may

leave the goods transported in the hands of the carrier,

informing him thereof in writing before the arrival of

the same at the point of destination.When this abandonment occurs, the carrier shall

satisfy the total value of the goods, as if they had been

lost or mislaid.

Should the abandonment not occur, the indemnity for

losses and damages on account of the delays cannot

exceed the current price of the goods transported on

the day and at the place where the delivery was to have

been made. The same provisions shall be observed in

all cases where this indemnity is due.

Art. 372. The appraisement of the goods which thecarrier must pay in case of their being lost or mislaid

shall be fixed in accordance with what is stated in the

bill of lading, no proof being allowed on the part of

the shipper that there were among the goods declared

therein articles of greater value and money.

Horses, vehicles, vessels, equipment, and all other

principal and accessory means of transportation, shall

be especially obligated in favor of the shipper

although with relation to railroads said obligation

shall be subrogated to the provision of the laws on

concession with regard to property and to whose ofthis Code with regard to the manner and form of

taking attachments and retentions against the said

companies.

CA65

TITLE I

Section 1. When used in this Act

(a) The term "carrier" includes the owner or the

charterer who enters into a contract of carriage with a

shipper.

(b) The term "contract of carriage" applies only to

contracts of carriage covered by a bill of lading or any

similar document of title, insofar as such document

relates to the carriage of goods by sea, including any

bill of lading or any similar document as aforesaid

issued under or pursuant to a charter party from themoment at which such bill of lading or similar

document of title regulates the relations between a

carrier and a holder of the same.

(c) The term "goods" includes goods, wares

merchandise, and articles of every kind whatsoever,

except live animals and cargo which by the contract of

carriage is stated as being carried on deck and is so

carried.

Section 2. Subject to the provisions of section 6, underevery contract of carriage of goods by sea, the carrier in

relation to the loading handling, stowage, carriage

custody, care, and discharge of such goods, shall be

subject to the responsibilities and liabilities and

entitled to the rights and immunities hereinafter set

forth.

RESPONSIBILITIES AND LIABILITIES

Section 3. (1) The carrier shall be bound, before and at

the beginning of the voyage, to exercise due diligence

to

a)

Make the ship seaworthy;

b)

Properly man, equip, and supply the

ship;

c)

Make the holds, refrigerating and

cooling chambers, and all other parts

of the ship in which goods are carried

fit and safe for their reception carriage

and preservation.

(2) The carrier shall properly and carefully load,

handle, stow, carry, keep, care for, and discharge the

goods carried.

(3) After receiving the goods into his charge the carrier,

or the master or agent of the carrier, shall, on demand

of the shipper, issue to the shipper a bill of lading

showing among other things

a.

The leading marks necessary for

identification of the goods as the same

are furnished in writing by the shipper

before the loading of such goods starts,

provided such marks are stamped or


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otherwise shown clearly upon the

goods if uncovered, or on the cases or

coverings in which such goods are

contained, in such a manner as should

ordinarily remain legible until the end

of the voyage.

b.

Either the number of packages or

pieces, or the quantity or weight, as the

case may be, as furnished in writing by

the shipper.

c.

The apparent order and condition of

the goods: Provided, That no carrier,

master, or agent of the carrier, shall be

bound to state or show in the bill of

lading any marks, number, quantity, or

weight which he has reasonable

ground for suspecting not accurately to

represent the goods actually received,

or which he has had no reasonable

means of checking.

(4) Such a bill of lading shall be prima facie evidence

of the receipt by the carrier of the goods as therein

described in accordance with paragraphs (3) (a), (b),

and (c) of this section: Provided, That nothing in this

Act shall be construed as repealing or limiting the

application of any part of the Act, as amended, entitled

"An Act relating to bills of lading in interstate and

foreign commerce," approved August 29, 1916 (U. S. C.

title 49, secs. 81-124), commonly known as the

"Pomerene Bills of Lading Act."

(5) The shipper shall be deemed to have guaranteed to

the carrier the accuracy at the time of shipment of themarks, number, quantity, and weight, as furnished by

him; and the shipper shall indemnify the carrier

against all loss damages, and expenses arising or

resulting from inaccuracies in such particulars. The

right of the carrier to such indemnity shall in no way

limit his responsibility and liability under the contract

of carriage or to any person other than the shipper.

(6) Unless notice of loss or damage and the general

nature of such loss or damage be given in writing to

the carrier or his agent at the port of discharge before

or at the time of the removal of the goods into thecustody of the person entitled to delivery thereof

under the contract of carriage, such removal shall be

prima facie evidence of the delivery by the carrier of

the goods as described in the bill of lading. If the loss

or damage is not apparent, the notice must be given

within three days of the delivery.

Said notice of loss or damage maybe endorsed upon

the receipt for the goods given by the person taking

delivery thereof.

The notice in writing need not be given if the state of

the goods has at the time of their receipt been the

subject of joint survey or inspection.

In any event the carrier and the ship shall be

discharged from all liability in respect of loss or

damage unless suit is brought within one year after

delivery of the goods or the date when the goods

should have been delivered: Provided, That if a notice

of loss or damage, either apparent or concealed, is notgiven as provided for in this section, that fact shall not

affect or prejudice the right of the shipper to bring suit

within one year after the delivery of the goods or the

date when the goods should have been delivered

In the case of any actual or apprehended loss or

damage the carrier and the receiver shall give all

reasonable facilities to each other for inspecting and

tallying the goods.

(7) After the goods are loaded the bill of lading to be

issued by the carrier, master, or agent of the carrier tothe shipper shall, if the shipper so demands, be a

"shipped" bill of lading Provided, That if the shipper

shall have previously taken up any document of title to

such goods, he shall surrender the same as against the

issue of the "shipped" bill of lading, but at the option

of the carrier such document of title may be noted at

the port of shipment by the carrier, master, or agent

with name or name the names of the ship or ships

upon which the goods have been shipped and the date

or dates of shipment, and when so noted the same

shall for the purpose of this section be deemed to

constitute a "shipped" bill of lading.

(8) Any clause, covenant, or agreement in a contract of

carriage relieving the carrier of the ship form liability

for loss or damage to or in connection with the goods

arising from negligence, fault, or failure in the duties

and obligations provide in this section or lessening

such liability otherwise than as provided in this Act,

shall be null and void and of no effect. A benefit of

insurance in favor of the carrier, or similar clause, shall

be deemed to be a clause relieving the carrier from

liability.

RIGHTS AND IMMUNITIES

Section 4. (1) Neither the carrier nor the ship shall be

liable for loss or damage arising or resulting from

unseaworthiness unless caused by want of due

diligence on the part of the carrier to make the ship

seaworthy, and to secure that the ship is properly

manned, equipped, and supplied, and to make to the

holds, refrigerating and cool chambers, and all other

parts of the ship in which goods are carried fit and safe

for their reception, carriage, and preservation in


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accordance with the provisions of paragraph (1) of

section 3. Whenever loss or damage has resulted from

unseaworthiness, the burden of proving the exercise of

due diligence shall be on the carrier or other persons

claiming exemption under the section.

(2) Neither the carrier nor the ship shall be responsible

for loss or damage arising or resulting from

(a) Act, neglect, or default of the master, mariner, pilot,or the servants of the carrier in the navigation or in the

management of the ship;

(b) Fire, unless caused by the actual fault or privity of

the carrier;

(c) Perils, dangers, and accidents of the sea or other

navigable waters;

(d) Act of God;

(e) Act of war,

(f) Act of public enemies;

(g) Arrest or restraint of princes, rulers, or people, or

seizure under legal process;

(h) Quarantine restrictions;

(i) Act or omission of the shipper or owner of the

goods, his agent or representative;

(j) Strikes or lockouts or stoppage or restraint of labor

from whatever cause, whether partial or

general; Provided, That nothing herein contained shall

be construed to relieve a carrier from responsibility forthe carrier's own acts;

(k) Riots and civil commotions

(l) Saving or attempting to save life or property at sea;

(m) Wastage in bulk or weight or any other loss or

damage arising from inherent defect, quality, or vice of

the goods;

(n) Insufficiency of packing;

(o) Insufficiency of inadequacy of marks;

(p) Latent defects not discoverable by due diligence;

and

(q) Any other cause arising without the actual fault and

privity of the carrier and without the fault or neglect of

the agents or servants of the carrier, but the burden of

proof shall be on the person claiming the benefit of

this exception to show that neither the actual fault or

privity of the carrier nor the fault or neglect of the

agents or servants of the carrier contributed to the loss

or damage.

(3) The shipper shall not be responsible for loss or

damage sustained by the carrier or the ship arising

from any cause without the act, fault, or neglect of the

shipper, his agents, or servants.

(4) Any deviation in saving or attempting to save life

or property at sea, or any reasonable deviation shall

not be deemed to be an infringement or breach of this

Act or of the contract of carriage, and the carrier shall

not be liable for any loss or damage resultingtherefrom: Provided, however, That if the deviation is

for the purpose of loading cargo or unloading cargo or

passengers it shall, prima facie, be regarded as

unreasonable.

(6) Goods of an inflammable, explosive, or dangerous

nature to the shipment whereof the carrier, master or

agent of the carrier, has not consented with knowledge

of their nature and character, may at any time before

discharge be landed at any place or destroyed or

rendered innocuous by the carrier without

compensation, and the shipper of such goods shall beliable for all damages and expenses directly or

indirectly arising out of or resulting from such

shipment. If any such goods shipped with such

knowledge and consent shall become a danger to the

ship or cargo, they may in like manner be landed at

any place, or destroyed or rendered innocuous by the

carrier without liability on the part of the carrier except

to general average, if any.

SURRENDER OF RIGHTS AND IMMUNITIES AND

INCREASE OF RESPONSIBILITIES AND

LIABILITIES

Section 5. A carrier shall be at liberty to surrender in

whole or in part all or any of his rights and immunities

or to increase any of his responsibilities and liabilities

under this Act, provided such surrender or increase

shall be embodied in the bill of lading issued to the

shipper.

SPECIAL CONDITIONS

Section 6. Notwithstanding the provisions of the

preceding sections, a carrier, master or agent of the

carrier, and a shipper shall, in regard to any particulargoods be at liberty to enter into any agreement in any

terms as to the responsibility and liability of the carrier

for such goods, and as to the rights and immunities of

the carrier in respect of such goods, or his obligation as

to seaworthiness (so far as the stipulation regarding

seaworthiness is not contrary to public policy), or the

care or diligence of his servants or agents in regard to

the loading, handling stowage, carriage, custody, care

and discharge of the goods carried by sea: Provided

That in this case no bill of lading has been or shall be


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issued and that the terms agreed shall be embodied in

a receipt which shall be a non-negotiable document

and shall be marked as such.

Any agreement so entered into shall have full legal

effect: Provided, That this section shall not apply to

ordinary commercial shipments made in the ordinary

course of trade but only to other shipments where the

character or condition of the property to be carried or

the circumstances, terms, and conditions under whichthe carriage is to be performed are such as reasonably

to justify a special agreement.

Section 7. Nothing contained in this Act shall prevent a

carrier or a shipper from entering into any agreement,

stipulation, condition, reservation, or exemption as to

the responsibility and liability of the carrier or the ship

for the loss or damage to or in connection with the

custody and care and handling of goods prior to the

loading on and subsequent to the discharge from the

ship on which the goods are carried by sea.

54. Cia. Maritima v. Limson 141 SCRA 407

Facts: Compania filed a complaint against Limson for

collection of money which is the unpaid accounts for

passage and freight on shipment of hogs, cattle and

carabals aboard Comapnias vessel

Limson denied liability claiming that he was not the

shipper nor had he authorized sid shipments. He further

set up a counterclaim for the refunf od the rebate he was

entitled to pursuant to their agreement.

The court appointed a commissioner to examine theaccounts involved before proceeding with the hearing.

The report indicated that Companieas claim was based

among other on some several bills signed by one perry

with Limson as the shipper and consignee, and some for

others as shippers and consignee.

CFI: Ruled that Perry was not Limsons authorized

representative. Thus, he was not liable for the bills of

lading not signed by him or his authorized

representatices.

ISSUE: W/N the bills of lading signed by Perry should

be accepted.

HELD: YES.

A shipper may be held liable for freightage on bills of

lading signed by another person where the shipper

appears as shipper or consignee, bills of lading where

persons other than Limson appear as shipper, and bills

of lading not signed by the shipper where the

testimonial evidence shows that the goods shipped

actually belong to him as the shipper.

As regards the controverted bills of lading signed by

perrywith Limson as shipper or consignee, a witness

testified that the signatures therein are those of Cipriano

Magtibay alias "Perry" who took delivery of the cargoes

stated therein after signing the delivery receipts. He was

known to be the regular representative of Limson.

With respect to the unsigned bills of lading, delivery

receipts were issued upon delivery of the shipments

Witnesses testified that the ordinary procedure a

Compania's terminal office was to require the surrender

of the original bill of lading, but when the bill of lading

cannot be surrendered because it had not arrived or

received by the consignee or assignee, the delivery of the

cargo was authorized just the same, and the delivery

receipt was prepared based on the ship's cargo

manifestsor ship's copy of the bill of lading. This

accommodation was specially given Limson, becausedefendant was a regular shipper and ship chandler of

plaintiff, and was a compadre of Cablin.

Regarding the controverted bills of lading in the name of

other persons as shippers or consignees and signed by

Perry, it was established that said bills of lading were for

cattle and hogs-purchased by the defendant from his

"viajeros" in Manila which were delivered to and

received by Limson.

55. US Lines v. Commissioner of Customs 151 SCRA

189

Sec. 24 of Customs Administration order was

promulgated in line with the government policy of

encouraging containerization, which results in the

laudible decongestion of ports of entry. Such

arrangement has been sanctioned worldwide by

international ports to cope up with ever increasing

volume of cargoes of the shipping industry. Hence, the

containerization system was designed to facilitate the

expeditious and economical loading, carriage, and

unloading of cargoes. Under this system, the shipper

loads his cargoes in a specifically designed container,

seals the container and delivers it to the carrier for

transportation. The carrier does not participate in the

counting of the merchandise for loading into the

container the actual loading thereof, nor the sealing of

the container. Having no actual knowledge of the kind

quality or condition of the contents of the container, the

carrier issues the corresponding bill of lading asked on

the declaration of the shipper. The bill of lading

describes the cargo as a container simply and it states


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the contents of the container either as advised by the

shipper or prefaced by the phrase said to contain.

Clearly then, the matter quantity, description and

conditions of the cargo is the sole responsibility of the

shipper.

An examination of said Customs Administration Order

in relation to Sec. 1005 and Sec. 2421 shows that

containerized cargoes on Shippers Load and Count

shipping arrangement are not required to be checked

before said carrier enters the port of unloading in the

Philippines since it is the shipper who has the sole

responsibility for the quantity, description, and

condition of the cargos shipped in container cans, each

container van considered as a unit of transport.

The American Venture faithfully complied with the

requirements of Sec. 1005 of the Tarrif and Customs

Code. Said vessel submitted a complete manifest of all

her cargoes. However there was a slight error thru no

fraudulent intent or negligence on the vessel. Said vesselrelied on the information in the bill of lading submitted

by the shipper in making the manifest. There was no

way for the vessel to discover until after the opening of

the containers and the inventory of their contents.

Considering the total number of cases of cotton denims

as declared by the shipper in the manifest is 78 as borne

on 2 containers and considering the undisputed fact that

the same total number of 78 cases of cotton denims were

found by the Bureau of Customs on board the vessel, it

is clear that the vessels Manifest reflects a complete and

substantially accurate statement of the cargoes containedtherein.

56. Phil. Charter Ins. v. Unknown Owner of Vessel

MA/ "National Honor" 463 SCRA 202

57. Reyma Brokerage Inc. v. Phil. Home Assurance

Corp. 202 SCRA 564

The vessel MS Malmros Monsoon received onboard at

Fremantle, Brisbane Queensland, Australia from shipper

Craig Mostyn & Co., Pty. Ltd. a shipment of 2,680

cartons of hard frozen boneless beef contained in five (5)containers complete and in good order and condition for

transport to Manila in favor of the eventual consignee

RFM Corp. under Bill of Lading No. 53149, dated 2

October 1979. On 13 October 1979, the MS Malmros

Monsoon arrived at Pier 3 of the Port of Manila and

discharged the shipment into the possession and

custody of the arrastre operator. From Pier 3, the

shipment was transferred to the Reefer Van Area of Pier

13 and on 22 October 1979, the arrastre contractor loaded

the containers in 2 trucks and delivered them to Grech

Food Industries Cold Storage in Pasig, Rizal arriving

there at 1:00 A.M., the following morning, 23 October

1979.

4 personnel of the Reyma Brokerage, a driver and a

helper in each truck made the delivery. On 23 October

1979 at 9:00 a.m., the containers were stripped and the

representative of Reyma Brokerage and consignee

counted the contents of 5 containers and after an

inventory of Container BROU-430656[1], it was

discovered that 203 cartons were found short out of the

loaded 2,680 cartons of hard frozen boneless beef which

according to the consignee was totally attributable to the

defendant as it occurred while the said container in

question was in the custody and responsibility of Reyma

Brokerage. Consignee filed claim for the recovery of the

missing 203 cartons but the same was denied and

consequently, consignee filed the claim with the insurer

under its Marine Cargo Insurance Policy. The consignee

was paid by plaintiff the amount of P88,658.22 The

payment of consignees claim by the insurer hadsubrogated the latter to file this instant claim for the

recovery of the said amount.

The trial court (RTC, NCJR, Branch 31, Manila) ruled

against Reyma Brokerage, ordering the latter (1) to pay

the sum of P88,650.22 plus legal interest thereon from

the date of the filing of the Complaint.

The Court of Appeals affirmed the decision of the lower

court on 29 November 1988 (CA GR CV 14550) in toto

Hence, the petition for review on certiorari.

The Supreme Court denied the petition, with costs

against Reyma Brokerage.

1. Express acknowledgment of carrier in present case

The carrier, by signifying in the bill of lading that it is a

receipt . . . for the number of packages shown above,

had explicitly admitted that the containerized shipments

had actually the number of packages declared by the

shipper in the bill of lading. This conclusion is bolstered

by the stipulation printed in the bill of lading, unless

expressly acknowledged and agreed to. Therefore, the

phrase said to contain also appearing in the bill oflading must give way to this reality.

2. Express acknowledgment an exception to doctrine of

US Lines case

The express acknowledgment of the carrier makes the

case at bar an exception to the doctrine enunciated in

United States Lines. The rule enunciated by United

States Lines applies to a situation where the carrier of

the containerized cargo simply admits the information

furnished by the shipper with regard to the goods it


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shipped as reflected in the bill of lading (said to

contain) but not where the carrier of the containerized

cargo makes an explicit admission as to the weight,

measurement marks, numbers, quality, contents, and

value, and more so, inscribed these admissions as

stipulations in the bill of lading itself, or made them an

addendum thereto, to which the carrier affixed its

express acknowledgment as what happened in this case.

In its stead, the dictum that the bill of lading shall beprima facie evidence of the receipt by the carrier of the

goods as therein described governs.

3. Bill of lading both a receipt and a contract

A bill of lading operates both as a receipt and as a

contract. It is a receipt for the goods shipped and a

contract to transport and deliver the same as therein

stipulated. As a receipt, it recites the date and place of

shipment, describes the goods as to quantity, weight,

dimensions, identification marks and condition, quality,

and value. As a contract it names the contracting parties,which include the consignee, fixes the route, destination,

and freight rates or charges, and stipulates the rights

and obligations assumed by the parties.

Facts alleged in a partys pleading are deemed

admissions of that party and binding upon it; Prima

facie evidence

Reyma Brokerage included allegations in its answer that

all the containerized shipments arrived in Manila with

the seals intact, and that it received the said sealed

containers of the shipments, particularly container

BROU-4306561 which sustained the loss of 203 cartons

from the arrastre operator, also with the seals intact. It

can therefore be concluded that Reyma Brokerage

received all the shipments as itemized in the bill of

lading. For the rule is well-established that the

5. Burden of proof to overturn prima facie evidence

As the arrastre operator prima facie received all the

shipments in the sealed containers, it has the burden to

rebut the conclusion that it received the same without

shortage. Prima facie evidence is of course, like all

evidence susceptible to rebuttal; but unrebutted itremains sufficient, as a matter of law to establish the

ultimate proposition it purports to prove. It goes

without saying that such evidence can only be overcome

by contrary proof and not by mere surmises and

speculations. Reyma Brokerage had not overthrown this

presumption by contrary evidence, and thus the loss of

the 203 cartons is attributable to it.

6. Prescription defense waived or abandoned

The defense of prescription (citing sec. 2(6), paragraph 4

of the Carriage of Goods by Sea Act which provides that

the carrier and the ship shall be discharged from all

liability in respect of loss or damage unless suit is

brought within one year after delivery of the goods or

the date when the goods should have been delivered)

had been waived and/or abandoned by the petitioner

Other than the allegation of prescription in the answer

Reyma Brokerage never pursued this matter either in thelater proceedings of the trial court or in the Court of

Appeals. The petitioner cannot now be allowed to raise

this issue to the Supreme Court after such waiver or

abandonment. Granting arguendo that Reyma

Brokerage can still put up prescription as its defense

nonetheless it will not prosper considering that it is not a

carrier or a vessel or a charterer or the legal holder of the

bill of lading. It is the broker and the private respondent

is the insurer. The prescriptive period of this cause of

action is 10 years. In the present case, 10 years have not

yet lapsed from the delivery of the shipment.

58. Keng Hua Paper Products Co. Inc. v. Court of

Appeals 286 SCRA 257

Facts: Sea-Land Service, a shipping company, is a

foreign corporation licensed to do business in the

Philippines. On 29 June 1982, SeaLand received at its

Hong Kong terminal a sealed container, Container

SEAU 67523, containing 76 bales of unsorted waste

paper for shipment to Keng Hua Paper Products, Co. in

Manila. A bill of lading to cover the shipment was

issued by Sea-Land. On 9 July 1982, the shipment wasdischarged at the Manila International Container Port

Notices of arrival were transmitted to Keng Hua but the

latter failed to discharge the shipment from the

container during the free time period or grace period

The said shipment remained inside the Sea-Lands

container from the moment the free time period expired

on 29 July 1982 until the time when the shipment was

unloaded from the container on 22 November 1983, or a

total of 481 days. During the 481-day period, demurrage

charges accrued. Within the same period, letters

demanding payment were sent by Sea-Land to KengHua who, however, refused to settle its obligation which

eventually amounted to P67,340.00. Numerous demands

were made on Keng Hua but the obligation remained

unpaid.

Sea Land thereafter commenced the civil action for

collection and damages. The RTC found Keng Hua liable

for demurrage, attorneys fees and expenses of litigation

Keng Hua appealed to the Court of Appeals, which

denied the appeal and affirmed the lower courts


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decision in toto. In a subsequent resolution, it also

denied Keng Huas motion for reconsideration. Hence,

the petition for review.

The Supreme Court affirmed the assailed Decision with

the modification that the legal interest of 6% per annum

shall be computed from 28 September 1990 until its full

payment before finality of judgment. The rate of interest

shall be adjusted to 12% per annum, computed from the

time said judgment became final and executory until full

satisfaction. The award of attorneys fees is deleted.

1. Nature of bill of lading

A bill of lading serves two functions. First, it is a receipt

for the goods shipped. Second, it is a contract by which

three parties, namely, the shipper, the carrier, and the

consignee undertake specific responsibilities and assume

stipulated obligations. A bill of lading delivered and

accepted constitutes the contract of carriage even though

not signed, because the (a)cceptance of a paper

containing the terms of a proposed contract generallyconstitutes an acceptance of the contract and of all of its

terms and conditions of which the acceptor has actual or

constructive notice. In a nutshell, the acceptance of a

bill of lading by the shipper and the consignee, with full

knowledge of its contents, gives rise to the presumption

that the same was a perfected and binding contract.

2. Shipper and consignee were liable for payment of

demurrer charges; Section 17 of the bill of lading

Section 17 of the bill of lading provided that the shipper

and the consignee were liable for the payment ofdemurrage charges for the failure to discharge the

containerized shipment beyond the grace period

allowed by tariff rules. Section 17 of the bill of lading

provided Cooperage Fines. The shipper and consignee

shall be liable for, indemnify the carrier and ship and

hold them harmless against, and the carrier shall have a

lien on the goods for, all expenses and charges for

mending cooperage, baling, repairing or reconditioning

the goods, or the van, trailers or containers, and all

expenses incurred in protecting, caring for or otherwise

made for the benefit of the goods, whether the goods bedamaged or not, and for any payment, expense, penalty

fine, dues, duty, tax or impost, loss, damage, detention,

demurrage, or liability of whatsoever nature, sustained

or incurred by or levied upon the carrier or the ship in

connection with the goods or by reason of the goods

being or having been on board, or because of shippers

failure to procure consular or other proper permits,

certificates or any papers that may be required at any

port or place or shippers failure to supply information

or otherwise to comply with all laws, regulations and

requirements of law in connection with the goods of

from any other act or omission of the shipper or

consignee. Keng Huas prolonged failure to receive and

discharge the cargo from the Sea-Lands vesse

constitutes a violation of the terms of the bill of lading. I

should thus be liable for demurrage to the former.

3. Keng Huas letter proved refusal to pick up cargo and

not rejection of bill of lading; Implied acceptance

Keng Hua received the bill of lading immediately after

the arrival of the shipment on 8 July 1982. Hav ing been

afforded an opportunity to examine the said document

it did not immediately object to or dissent from any term

or stipulation therein. It was only six months later, on 24

January 1983, that it sent a letter to private respondent

saying that it could not accept the shipment. Its inaction

for such a long period conveys the clear inference that it

accepted the terms and conditions of the bill of lading

Moreover, said letter spoke only of petitioners inability

to use the delivery permit, i.e. to pick up the cargo, dueto the shippers failure to comply with the terms and

conditions of the letter of credit, for which reason the bill

of lading and other shipping documents were returned

by the banks to the shipper. The letter merely proved

its refusal to pick up the cargo, not its rejection of the bill

of lading.

4. Apprehension of violating laws cannot defeat

contractual obligation and liability Keng Huas attempt

to evade its obligation to receive the shipment on the

pretext that this may cause it to violate customs, tariff

and central bank laws must fail. Mere apprehension ofviolating said laws, without a clear demonstration that

taking delivery of the shipment has become legally

impossible, cannot defeat the petitioners contractua

obligation and liability under the bill of lading.

5. Nature of demurrage

Demurrage is merely an allowance or compensation for

the delay or detention of a vessel. It is often a matter of

contract, but not necessarily so. The very circumstance

that in ordinary commercial voyages, a particular sum is

deemed by the parties a fair compensation for delays, isthe very reason why it is, and ought to be, adopted as a

measure of compensation, in cases ex delicto. Wha

fairer rule can be adopted than that which founds itself

upon mercantile usage as to indemnity, and fixes a

recompense upon the deliberate consideration of all the

circumstances attending the usual earnings and

expenditures in common voyages? It appears to us that

an allowance, by way of demurrage, is the true measure

of damages in all cases of mere detention, for that


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allowance has reference to the ships expenses, wear and

tear, and common employment.

6. Amount of Demurrage Charges supported by extant

evidence

The amount of demurrage charges in the sum of P67,340

is a factual conclusion of the trial court that was affirmed

by the Court of Appeals and, thus, binding on theSupreme Court. Besides, such factual finding is

supported by the extant evidence. The apparent

discrepancy was a result of the variance of the dates

when the two demands were made. Necessarily, the

longer the cargo remained unclaimed, the higher the

demurrage. Thus, while in his letter dated 24 April 1983,

Sea-Lands counsel demanded payment of only P37,800,

the additional demurrage incurred by Keng Hua due to

its continued refusal to receive delivery of the cargo

ballooned to P67,340 by 22 November 1983.

8. Three contracts in a letter of credit

In a letter of credit, there are three distinct and

independent contracts: (1) the contract of sale between

the buyer and the seller, (2) the contract of the buyer

with the issuing bank, and (3) the letter of credit proper

in which the bank promises to pay the seller pursuant to

the terms and conditions stated therein. Few things are

more clearly settled in law than that the three contracts

which make up the letter of credit arrangement are to be

maintained in a state of perpetual separation. A

transaction involving the purchase of goods may also

require, apart from a letter of credit, a contract of

transportation specially when the seller and the buyer

are not in the same locale or country, and the goods

purchased have to be transported to the latter.

9. Contract of carriage in bill of lading to be treated

independently of contract of sale and the contract for the

issuance of credit

The contract of carriage, as stipulated in the bill of lading

in the present case, must be treated independently of the

contract of sale between the seller and the buyer, and the

contract for the issuance of a letter of credit between thebuyer and the issuing bank. Any discrepancy between

the amount of the goods described in the commercial

invoice in the contract of sale and the amount allowed in

the letter of credit will not affect the validity and

enforceability of the contract of carriage as embodied in

the bill of lading. As the bank cannot be expected to look

beyond the documents presented to it by the seller

pursuant to the letter of credit, neither can the carrier be

expected to go beyond the representations of the shipper

in the bill of lading and to verify their accuracy vis-a-vis

the commercial invoice and the letter of credit. Thus, the

discrepancy between the amount of goods indicated in

the invoice and the amount in the bill of lading cannot

negate Keng Huas obligation to private respondent

arising from the contract of transportation.

10. Remedy of alleged overshipment lies against the

shipper and not against the carrier

The contract of carriage was under the arrangement

known as Shippers Load AndCount, and the shipper

was solely responsible for the loading of the container

while the carrier was oblivious to the contents of the

shipment. Keng Huas remedy in case of overshipment

lies against the seller/shipper, not against the carrier.

59. Ganzon v Court of Appeals 161 SCRA 646By the said act of delivery, the scraps were

unconditionally placed in the possession and control ofthe common carrier, and upon their receipt by the carrierfor transportation, the contract of carriage was deemedperfected. Consequently, the petitioner-carriersextraordinary responsibility for the loss, destruction, ordeterioration of the goods commenced. Pursuant to Art1736, such extraordinary responsibility would cease onlyupon the delivery, actual or onstructive, by the carrier tothe consignee, or to the person who has a right to receivethem. The fact that part of the shipment had not beenloaded on board the lighter did not impair the saidcontract of transportation as the goods remained in thecustody and control of the carrier, albeit still unloaded.

In any case, the intervention of the municipal officialswas not of a character that would render impossible thefulfillment by the carrier of its obligation. The petitionerwas not duty bound to obey the illegal order to dumpinto the sea the scrap iron. Moreover, there is absence ofsufficinet proof that the issuance of the same order wasattended with such force or intimidation as tocompletely overpower the will of petitionersemployees. The mere difficulty in the fillfilment of theobligation is not considered force majeure. We agreewith the private reposndent that the scraps could have

been properly unloaded at the shore or at the ASSCOcompound. So that after the dispute with the locaofficials concerned was settled, the scraps could then bedelivered in accordance with the contract of carriage.

60. Eastern Shipping Lines v. Court of Appeals 190SCRA 564The bill of lading was issued by the carrier but containedarticles furnished by the shipper, shows on its face thatthe shipment is consigned to shippers order withaddress arrival notice to Consolidated Mines, INc.


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Nowhere did the bill od lading refer to HSBC as theconsigenee or the one to be notified.

The foregoing information, without more, in effectmakes Consolidated Mining for all intents and purposesthe party named and ordered to receive the goods. Thecarrier, not being privy to any transaction betweenHSBC and CMI cannot be expected to look beyond whatis contained on the bill of lading and guess which of the

many banks could possibly be the consignee. Toconsider otherwise would not be sound businesspractice as carrier would be forced to wait for the realowner of the goods to show up, perhaps in vain.

A bill of lading is ordinarily merely a convenientcommenrcial instrument designed to protect theimporter or consignee. In the absence of contraryinsttructions or at least knowledge of other facts, thecarrier is not ordinarily expected to deliver miningequipment to unnamed or unknown party lurking forseveral months.

But assuming that CMI may not be consideredconsignee, the petitioner cannot be faulted for releasingthe goods to CMI under the circumstances, due to itslack of knowlefe as to who was the real consignee inview of CMIs strong representations and letter ofundertaking wherein it stated that the bill of ladingwould be presented later. This is the situation coveredby the last par. Of art. 353 of the Corp Code: if in caseof loss or for any other reason whatsoever, the consigneecannot return upon receiving the merchandise the bill oflading subscribed by the carrier, he shall give said earner

a receipt of the goods delivered this receipt producingthe same effects as the return of the bill of lading.

61. DSR-Senator Lines v. Federal Phoenix AssuranceCo Inc. 413 SCRA 14FACTSBerde Plants delivered 632 units of artificial trees to C.F.Sharp, the General Ship Agent of DSR-Senator Lines, aforeign shipping corporation, for transportation anddelivery to the consignee, Al-Mohr International Group,in Riyadh, Saudi Arabia.

C.F. Sharp issued International Bill of Lading for the

cargo the port of discharge for the cargo was at theKhor Fakkan port and the port of delivery was Riyadh,Saudi Arabia, viaPort Dammam. The cargo was loadedin M/S Arabian Senator.

Federal Phoenix Assurance insured the cargo against allrisks.

On June 7, 1993, M/S Arabian Senator left the ManilaSouth Harbor for Saudi Arabia with the cargo onboard. When the vessel arrived in Khor Fakkan Port, thecargo was reloaded on board DSR-Senator Lines feeder

vessel, M/V Kapitan Sakharov, bound for PorDammam, Saudi Arabia.

However, while in transit, the vessel and all its cargocaught fire.

On July 5, 1993, DSR-Senator Lines informed BerdePlants that M/V Kapitan Sakharov with its cargo wasgutted by fire and sank on or about July 4, 1993. On

December 16, 1993, C.F. Sharp issued a certification tothat effect

Consequently, Federal Phoenix Assurance paid BerdePlants P941,429.61 corresponding to the amount ofinsurance for the cargo. In turn Berde Plants executed inits favor a Subrogation Receipt dated January 17, 1994

On February 8, 1994, Federal Phoenix Assurance sent aletter to C.F. Sharp demanding payment of P941,429.61on the basis of the Subrogation Receipt. C.F. Sharpdenied any liability on the ground that such liability was

extinguished when the vessel carrying the cargo wasgutted by fire.On March 11, 1994, Federal Phoenix Assurance filedwith the RTC, Branch 16, Manila a complaint fordamages against DSR-Senator Lines and C.F. Sharppraying that the latter be ordered to pay actual damagesof P941,429.61, compensatory damages of P100,000.00and costs.ISSUE

W/N DSR-Senator is liable YES

RULING

Under Article 1734, Fire is not one of those enumeratedunder the above provision which exempts a carrier fromliability for loss or destruction of the cargo. Since theperil of fire is not comprehended within the exceptionsin Article 1734, then the common carrier shall bepresumed to have been at fault or to have actednegligently, unless it proves that it has observed theextraordinary diligence required by law.

The natural disaster must have been the proximate andonly cause of the loss, and that the carrier has exercised

due diligence to prevent or minimize the loss before,during or after the occurrence of the disaster.

When the goods shipped either are lost or arrive indamaged condition, a presumption arises against thecarrier of its failure to observe that diligence, and thereneed not be an express finding of negligence to hold itliable.

Common carriers are obliged to observe extraordinarydiligence in the vigilance over the goods transported bythem. Accordingly, they are presumed to have been a


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fault or to have acted negligently if the goods are lost,destroyed or deteriorated.

Respondent Federal Phoenix Assurance raised thepresumption of negligence againstpetitioners. However, they failed to overcome it bysufficient proof of extraordinary diligence.

62. Sea Land Service Inc. v. Intermediate Appellate

Court 153 SCRA 552

Facts: Sea-Land, a foreign shipping and forwardingcompany licensed to do business in the Philippines,received from Sea-borne Trading Company inCalifornia, a shipment consigned to Sen Hiap Hing,the business name used by Cue. The shipper not havingdeclared the value of the shipment , no value wasindicated in the bill of lading. The shipment wasdischarged in Manila, and while awaiting transshipmentto Cebu, the cargo was stolen and never recovered.

The trial court sentenced Sea-Land to pay Cue P186,048representing the Philippine currency value of thelost cargo, P55, 814 for unrealized profit and P25,000 forattorneys fees. CA affirmed the trial courts decision.

Issue:Whether or not Sea-Land is liable to pay Cue.

Held: There is no question of the right of a consignee ina bill of lading to recover from the carrier or shipper forloss of, or damage to, goods being transported undersaid bill, although that document may have been drawnup only by the consignor and the carrier without theintervention of the consignee.

Since the liability of a common carrier for loss of ordamage to goods transported by it under a contract ofcarriage os governed by the laws of the country ofdestination and the goods in question were shippedfrom the United States to the Philippines, the liability ofSea-Land has Cue is governed primarily by the CivilCode, and as ordained by the said Code, supplementary,in all matters not cluttered thereby, by the Codeof Commerce and special laws. One ofthese supplementary special laws is the Carriageof goods by Sea Act (COGSA), made applicable to all

contracts for the carriage by sea to and from thePhilippines Ports in Foreign Trade by Comm. Act. 65.

Even if Section 4(5) of COGSA did not list the validityand binding effect of the liability limitation clause in thebill of lading here are fully substantial on the basis aloneof Article 1749 and 1750 of the Civil Code. The justices ofsuch stipulation is implicit in its giving the owner orshipper the option of avoiding accrual of liabilitylimitation by the simple expedient of declaringthe value of the shipment in the bill of lading.

The stipulation in the bill of lading limiting the liabilityof Sea-Land for loss or damages to the shipment coveredby said rule to US$500 per package unless the shipperdeclares the value of the shipment and pays additionacharges is valid and binding on Cue.

63. Maritime Co. of the Phils, v Court of Appeals 171SCRA 61

Acmes rights are to be determined by the Civil Code,

not the Code of Commerce. This conclusion derives fromArticle 1753 of the CC to the effect that it is the law of thecountry to which the goods are to be transported whichshall govern the liability of the common carrier for theirloss, destruction or deterioration. It is only in mattersnot regulated by the Civil Code, according to Art 1766,that the rights and obligations of common carriers shalbe governed by the Code of Commerce and by Speciallaws. Since there are indeed specific provisionsregulating the matter of such liability in the civil codethese being embodied in Art 1734, as well as prescribingthe prescription of actions, it follows that the Code of

Commerce, or the Carriage of Goods by Sea Act, has norelevancy in the determinations of the carriers liability inthe instant case. In view of the said Articles 1753 and1756, the provisions of the Carriage of Goods by Sea Actare merely suppletory to the Civil Code.

The evidence established that NDC had appointedpetitioner Maritime Co., as its agent to manage andoperate three vessels owned by it for and in its belaf andaccount, and for a determinable periof. Under theirwritten agreement, Maritime Co. was bound toprovision and victual the SS Dona Nati and the other 2vessels, and to render a complete report of theoperations of the vessels within 60 days after conclusionof each voyage; it was also authorized to appoint sub-agents at any ports or places that it might deemnecessary, remaining however responsible to NDC forthe timely and satisfactory performance of saidsubagents. These facts preponderantly demonstrate thecharacter of Maritime Co. as ship agent under the Codeof Commerce, being the person entrusted withprovisioning or representing the vessel in the port inwhich it may be found.

64. Republic v. Lorenzo Shipping Corp. 450 SCRA 550

Facts: The Republic of the Philippines signed anagreement through the Department of Health and theCooperative for American Relief Everywhere, Inc(CARE) wherein it would acquire from the USgovernment donations of Non-Fat Dried Milk and otherfood products. In turn, the Philippines will transportand distribute the donated to the intended beneficiariesof the country. As a result, it entered into a contract ofcarriage of goods with the herein respondent. The lattershipped 4,868 bags of non-fat dried milk from Sept-Dec1988. The consignee named in the bills was


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Abdurahman Jama, petitioners branch supervisor inZamboanga City. Upon reaching the port of Zamboanga,respondents agent, Efren Ruste Shipping Agencyunloaded the said milks. Before each delivery, RogelioRizada and Ismael Zamora both delivery checkers ofEfren Ruste requested Abdurahman to surrender theoriginals of the Bill of Lading. However, the petitioneralleged that they did not receive anything and they fileda claim against the herein respondent. The petitioner

contended that the respondents failed to exerciseextraordinary diligence.

Issue:Whether the respondents failed to exerciseextraordinary diligence required by law?

Held:The surrender of the Bill of Lading is not acondition precedent for a common carrier to bedischarged of its contractual obligation. If the surrenderis not possible, acknowledgment of the delivery bysigning the receipt suffices. The herein respondent didnot even bother to prevent the resignation of

abdurhaman Jama to be utilized as a witness.

65. Cia Maritima v. Insurance Co. of North America 12SCRA 213October, 1952: Macleod and Company of thePhilippines (Macleod) contracted by telephonethe services of the Compaia Maritima (CM), a shippingcorporation, for: shipment of 2,645 bales of hemp fromthe Macleod's Sasa private pier at Davao City toManila and subsequent transhipment to Boston,Massachusetts, U.S.A. on board the S.S. SteelNavigator.

This oral contract was later on confirmed by a formaland written booking issued by Macleod's branch officein Sasa and handcarried to CM's branch office in Davaoin compliance with which the CM sent to Macleod'sprivate wharf LCT Nos. 1023 and 1025 on which theloading of the hemp was completed on October 29,1952.

The 2 lighters were manned each by a patron and anassistant patron. The patrons of both barges issued thecorresponding carrier's receipts and that issued by thepatron of Barge No. 1025 reads in part: Received inbehalf of S.S. Bowline Knot in good order and condition

from MACLEOD AND COMPANY OF PHILIPPINES,Sasa Davao, for transhipment at Manila onto S.S.SteelNavigator.

FINAL DESTINATION:Boston.

Early hours of October 30: LCT No. 1025 sank, resultingin the damage or loss of 1,162 bales of hemp loadedtherein Macleod promptly notified the carrier's mainoffice in Manila and its branch in Davao advising it of itsliability. The damaged hemp was brought to OdellPlantation in Madaum, Davao, for cleaning, washing,

reconditioning, and redrying. total loss adds up toP60,421.02

All abaca shipments of Macleod were insured with theInsurance Company of North America against all lossesand damages. Macleod filed a claim for the loss itsuffered with the insurance company and was paidP64,018.55. subrogation agreement between Macleodand the insurance company wherein the Macleod

assigned its rights over the insured and damaged cargo

October 28, 1953.: failing to recover from the carrierP60,421.02 (amount supported by receipts), theinsurance company instituted the present action. CAaffirmed RTC: ordering CM to pay the insurance co.

ISSUE: W/N there was a contract of carriage bet. CM(carrier) and Macleod (shipper

HELD: YES. Affirmedreceipt of goods by the carrier has been said to lie at the

foundation of the contract to carry and deliver, and ifactually no goods are received there can be no suchcontract

The liability and responsibility of the carrier under acontract for the carriage of goods commence ontheir actual delivery to, or receipt by, the carrier or anauthorized agent. ... and delivery to a lighter in charge of avessel for shipment on the vessel, where it is the customto deliver in that way

Whenever the control and possession of goods passes to

the carrier and nothing remains to be done by theshipper, then it can be said with certainty that therelation of shipper and carrier has been established

As regards the form of the contract of carriage it can besaid that provided that there is a meeting of theminds and from such meeting arise rights andobligations, there should be no limitations as to formThe bill of lading is not essential

Even where it is provided by statute that liabilitycommences with the issuance of the bill of lading, actuadelivery and acceptance are sufficient to bind the carrier

marine surveyors, attributes the sinking of LCT No. 1025to the 'non-water-tight conditions of various buoyancycompartments

66. PAL v. Court of Appeals 255 SCRA 48

FACTS

Isidro Co, accompanied by his wife and son, arrived atthe Manila International Airport aboard PAL airline'sFlight from San Francisco. Soon after his embarking, Coproceeded to the baggage retrieval area to claim his


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checks in his possession. He found 8 of his luggage, butdespite diligent search, he failed to locate his 9thluggage.

Co then immediately notified PAL through itsemployee, Willy Guevarra, who was then in charge ofthe PAL claim counter at the airport. Willy filled up theprinted form known as a Property Irregularity Report,acknowledging the luggage to be missing, and signed it.

The incontestable evidence further shows that plaintifflost luggage was a Samsonite suitcase worth aboutUS$200 and containing various personal effectspurchased by plaintiff and his wife during their stay inthe US and similar other items sent by their friendsabroad to be given as presents to relatives in thePhilippines worth around $1,800.

Co on several occasions unrelentingly called PALsoffice in order to pursue his complaint about his missingluggage but no avail was given. Thus, Co wrote ademand letter to PAL, through its manager of the

Central Baggage Services. PAL replied acknowledgingthat they have been unable to locate the baggage despitecareful search and extended their sincere apologies forthe inconvenience. PAL never found the missingluggage or paid its corresponding value. Co then filedhis present complaint against PAL for damages.

The RTC found PAL liable and ordered said company topay damages. The CA affirmed in toto the trial court'saward.

PAL Contends: The Lower Courts were in error in not

applying the limit of liability under the WarsawConvention which limits the liability of an air carrier ofloss, delay or damage to checked-in baggage to US$20.00based on weight;

ISSUE

W/N the Lower Courts should apply the limit ofliability under the Warsaw Convention? NO

RULING

In Alitalia vs. IAC, the Warsaw Convention limiting the

carrier's liability was applied because of a simple loss ofbaggage without any improper conduct on the part ofthe officials or employees of the airline, or other specialinjury sustained by the passengers. The petitionertherein did not declare a higher value for his luggage,much less did he pay an additional transportationcharge.

PAL contends that under the Warsaw Convention, itsliability, if any, cannot exceed US $20.00 based onweight as private respondent Co did not declare the

contents of his baggage nor pay traditional chargesbefore the flight.

We find no merit in that contention. In Samar MiningCompany, Inc. vs. Nordeutscher Lloyd, this Court ruled:

The liability of the common carrier for the loss,destruction or deterioration of goods transportedfrom a foreign country to the Philippines is

governed primarily by the New Civil Code. In allmatters not regulated by said Code, the rights andobligations of common carriers shall be governed bythe Code of Commerce and by Special Laws.The provisions of the New Civil Code on commoncarriers are Articles 1733, 1735 and 1753 which provide:

Art. 1733. Common carriers.. are bound to observeextraordinary diligence in the vigilance over the goods and forthe safety of the passengers transported by them...

Art. 1735. ...if the goods are lost, destroyed or deteriorated

common carriers are presumed to have been at fault or to haveacted negligently, unless they prove that they observedextraordinary diligence..

Art. 1753. The law of the country to which the goods are to betransported shall govern the liability of the common carrier fortheir loss, destruction or deterioration.

Since the passenger's destination in this case was thePhilippines, Philippine law governs the liability of thecarrier for the loss of the passenger's luggage.

In this case, the PAL failed to overcome, not only the

presumption, but more importantly, the Cos evidenceproving that the carrier's negligence was the proximatecause of the loss of his baggage. Furthermore, petitioneracted in bad faith in faking a retrieval receipt to baiitself out of having to pay Co's claim. The CA thereforedid not err in disregarding the limits of liability underthe Warsaw Convention and applied the Civil Codeinstead.

The stipulation in the Bill of lading limiting the commoncarriers liability to the value of the goods appearing inthe bill, unless the shipper or owner declares a greater

value, is valid and binding. The limitation of the carriersliability is sanctioned by the freedom of the contractingparties to establish such stipulations, clauses, terms, orconditions as they may deem convenient, provided thatthey are not contrary to law, morals, good customs andpublic policy.

There is no absolute obligation on the part of a carrier toaccept cargo. Where a common carrier accepts cargo forshipment for valuable consideration, it takes the risk ofdelivering it in good condition as when it was loadedAnd if the fact of improper packing is known to the


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carrier or its personnel, or apparent upon observationbut it accepts the goods notwithstanding such condition,it is not relived of liability for loss or injury resultingtherefrom.

67. Philamgen Insurance Co. Inc. v, Court of Appeals222 SCRA 155Art 1739 of the CC provides that in order that the

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

While it is true that there was indeed delay indischarging the cargo from the vessel, neither of theparties herein could be faulted for such delay, for the

same was not due not to negligence, but to severalfactors (fiesta, etc) The cargo having been lost due to atyphoon and the delay incurred in its unloading notbeing due to negligence, carrier is exempt from liabilityfor the loss of the cargo. Also, the captain was found tohave exercised due diligence in minimizing loss.

68. Phoenix Assurance Co., Ltd v US Lines Inc. 22SCRA 674; 66 OG 2088A bill of lading operates both as a receipt and as acontract. It is a receipt for the goods shipped and acontract to transport and deliver the same as thereinstipulated. As a receipt, it recited the date and the placeof shipment, describes the goods as to quantity, weight,dimensions, identification marks and condition, quality,and value. As a contract, it names the contractingparties, which include the consignee, fixes the route,destination, and freightage or charges, and stipulates therights and obligations assumed by the parties.

In this jurisdiction, it is a statutory and decisional rule oflaw that a contract is the law between the contractingparties, and where there is nothing in it which iscontrary to law, morals, good customs, public policy, orpublic order, the validity of the contract must be

sustained.

It is admitted by both parties that the crates subjectmatter of this action were lost while in the possessionand custody of the Manila Port Service. Since the longform of Bill of Lading which provides that the carriershall not be liable in any capacity whatsoever for anyloss or damage to the foods while the goods are not in itsactual custody, appellee cannot be held responsible fothe loss of said crates. For as correctly observed by thelower court, it is hardly fair to make appellee

accountable for a loss not due to its acts or omissions orover which it had no control.

Contrary to appellants stand, the appellee did notundertake to carry and deliver safely the cargo to theconsignee in Davao City. The short form Bill of Ladingstates in no uncertain terms that the pert of discharge ofthe cargo is Manila, but that the same was transshippedbeyond the port of discharge to Davao City. Pursuant to

the terms f the long form Bill of Lading, appelleesresponsibility as a common carrier ceased the momentthe goods were unloaded in Manila; and in the mannerof transshipment, appellee acted merely as an agent ofthe shipper and consignee. Contrary likewise toappellants contention the cargo was not transshippedwith the use of transportation used or operated byappellee. It is true that the vessel used for transshipmentis owned and operated by appellees Davao agent, theColumbian Rope Company, but there is no proof thatsaid vessel is owned or operated by appellee. Thevessels of appelles agent are being erroneously

presumed by appellant to be owned and operated byappellee.

Through the short form Bill of Lading, incorporating byreference the terms of the regular long form bill oflading, the United States Lines acknowledged the receiptof the cargo of truck spare parts that it carried and statedthe conditions under which it was to carry the cargo, theplace where it was to be transshipped, the entity towhich delivery is to be made, and the rate ofcompensation for the carriage. This it delivered to DavaoParts and Services, Inc. as evidence of a contract between

them. By receiving the bill of lading, Davao Parts andSerivces, Inc. assented to the terms of consignmentcontained therein, and became bound thereby, so far asthe consitions named are reasonable in the eyes of thelaw. Since neither appellant nor appellee alleges that anyprovision therein is contrary to law, morals, goodcustoms, public policy, or public order, - and indeed. Wefound none- the validity of the Bill of Lading must besustained and the provisions therein properly applied toresolve the conflict between the parties.

69. American Insurance Co., Inc. v. Macondray & Co39 SCRA 494

Importer/Consignee- Atlas Consolidated Mining and

Development Corporation

Shipper- Ansor Corp. of NY (S/S Toledo)

Insurer:

Apellee insurer: American Inusrance Co. Inc. -

insured the cargoes against damages until the

Port of Cebu for P5, 700 in favor of consignee


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Forwarding Agent of Ansor Corp: Macondray& Co., Inc-

agent in the Philippines of the S/S "Toledo", a common carrier

in foreign trade between the United States and Philippine

Ports;

Transshipment:

Port of NYManila (via S/S Toledo) Cebu (via M/S

Bohol)

FACTS:

1. On or about September 12, 1962, certain cargoes

covered by the bill of lading were imported by

Atlas Consolidated Mining and Development

Corporation and were loaded by the shipper,

Ansor Corporation of New York on board theS/S "Toledo" at the port of New York for

delivery to Atlas at Cebu City via Manila.

2.

The freight up to Cebu City was paid in

advance. The American Insurance Company

insured the cargoes against damage up to Cebu

City for $5,700.00 in favor of the consignee.

3.

The S/S "Toledo' discharged them at the port of

Manila on October 17, 1962.

4.

For their transshipment to Cebu City they were

loaded on board the M/S "Bohol".

5.

Upon the vessel's arrival in Cebu City onNovember 12, 1962, the cargoes were discharged

and delivered to the congsignee minus one skid

of truck parts which was not loaded on the M/S

"Bohol". The missing cargo was valued at

$482.96 CIF Cebu, equivalent at that time to

P1,889.58.

6.

The consignee filed the corresponding claim

with herein appellant (agent in the Philippines of

the S/S "Toledo", a common carrier in foreign trade

between the United States and Philippine Ports)

who disclaimed liability therefor alleging that

the cargoes had been discharged in full at the

port of Manila.

7.

A claim for the insured value of the cargo

amounting to P2,087.20 plus the sum of P87.30

as expenses of survey was filed with appellee

under the covering insurance policy and the

same was duly paid, thereby acquiring by

subrogation the rights of the consignee.

8.

Thereafter the corresponding action was filed in

the lower court to recover from appellant what

appellee had paid to the consignee.

9.

Trial Court ordered Appellant Macondray to

pay. Appellant appealed.

ISSUES:

1. Whether the lower court had jurisdiction

YES.

True the case invoked only the sum of P1,889.58

but it is also true that appellee's action against

appellant is one involving admiralty

jurisdiction, the exercise of which pertains

originally and exclusively to Courts of First

Instance.

2. Whether American Insurance has cause of action

against Macondray

YES

Appellant relies on the provisions of

paragraph 22 of the bill of lading to the effor

that the carrying vessel, her owner and agent,

are not liable for loss or damage occurring after

the discharge of the goods. Appellant's

contention rests entirely upon the erroneous

assumption that the carrying vessel had

discharged all the goods covered by the bill oflading in accordance with its obligation.

Under the Carriage Contract covering the

cargoes in question, it was the duty of the

carrying vessel to discharge them at theport of

Cebu City, via the port of Manila. It is clear

therefore, that the discharge effected at the latter

port did not terminate the carrying vessel's

responsibility which included the transshipmen

of the cargoes from the port of Manila to the

port of Cebu City. While it complied with the

obligation with respect to most of the cargoes

covered, by the bill of lading, it failed to do so in

relation to the one skid of truck parts which

according to the stipulation of facts, was not

loaded on board the M/S "Bohol". In truth and

in fact, the same has never been found.

3. Whether Appellant Macondray is the real party in

interest


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YES

Appellant Macondray contends that the action

shouldve been bought against the shipper,

Ansor Corp

Appellant is correct in saying that actions must

be prosecuted not only in the name of the real

party in interest but also against the real party in

interest. It is in error, however, in contendingthat it is not liable for the loss of the skid of

truck parts.

If the fact were that said cargo was loaded and

thereafter lost on board the M/S "Bohol" or

upon its discharge at the port of Cebu City, We

would agree that appellant is not liable. It was

stipulated in this case, however, that the said

skid of truck parts was not loadedat all on

board the M/S "Bohol." In accepting the same on

board the S/S "Toledo" at the port of New York

for shipment to Cebu City, via the port ofManila, it become precisely appellant's duty to

see to it that it was loaded in Manila on board

the M/S "Bohol" or any other vessel, for the port

of Cebu City. Not having complied with this

duty, its liability for the loss is unavoidable.

Ansor Corp. complied with its part of the transaction by

delivering the lost cargo to the S/S "Toledo" at the port

of New York; thereafter paragraph 11 of the bill of

lading operated to make appellant Macondray, the

shipper's forwarding agent whose duty precisely was tohave the cargo, upon arrival at the port of Manila,

transshipped to the port of Cebu City.

As a general rule under the provisions of the Code of

Commerce, the consignee of a cargo carried by a vessel

has a cause of action against the latter's agent for the

undelivered cargo or any portion thereof. This being

the case, it is its duty to compensate appellee for the loss

suffered.

70. Insurance Co. of North America v. Asian Terminals,

Inc. 666 SCRA 226

DOCTRINE: The term carriage of goods in the

Carriage of Goods by Sea Act (COGSA) covers the

period from the time the goods are loaded to the vessel

to the time they are discharged therefrom.

The carrier and the ship shall be discharged

from all liability in respect of loss or damage

unless suit is brought within one year after

delivery of the goods or the date when the

goods should have been delivered.

FACTS:

On November 9, 2002, Macro-Lito Corporation

through M/V DIMI P vessel, 185 packages of

electrolytic tin free steel, complete and in good

condition.

The goods are covered by a bill of lading, had a

declared value of $169,850.35 and was insured

with the Insuracne Company of North America

(Petitioner) against all risk.

The carrying vessel arrived at the port of Manila

on November 19, 2002, and when the shipmen

was discharged therefrom, it was noted that 7 of

the packages were damaged and in bad

condition. On Novermber 21, 2002, the shipment was then

turned over to the custody of Asian Terminals

Inc. (Respondent) for storage and safekeeping

pending its withrawal by the consignee.

On November 29, 2002, prior to the withrawal of

the shipment, a joint inspection of the said cargo

was conducted. The examination report showed

that an additional 5 packages were found to be

damaged and in bad order.

On January 6, 2003, the consignee, San Migue

Corporation filed separate claims against boththe Petioner and the Respondent for the damage

caused to the packages.

The Petitioner then paid San Miguel

Corporation the amound of PhP 431,592.14

which is based on a report of its independent

adjuster.

The Petitioner then formally demanded

reparation against the Respondent for the

amount it paid San Miguel Corporation.

For the failure of the Respondent to satisfy the

demand of the Petitioner, the Petitioner filed for

an action for damages with the RTC of Makati.

The trial court found that indeed, the shipment

suffered additional damage under the custody

of the Respondent prior to the turn over of the

said shipment to San Miguel.

As to the extent of liability, Respondent invoked

the Contract for Cargo Handling Services

executed between the Philippine Ports

Authority and the Respondent. Under the


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contract, the Respondents liability for damage

to cargoes in its custody is limited to PhP5,000

for each package, unless the value of the cargo

shipment is otherwise specified or manifested in

writing together with the declared Bill of

Lading. The trial Court found that the shipper

and consignee with the said requirements.

However, the trial court dismissed the

complaint on the ground that the Petitioners

claim was barred by the statute of limitations. It

held that the Carriage of Goods by Sea Act

(COGSA), embodied in Commonwealth Act No.

65 is applicable. The trial court held that under

the said law, the shipper has the right to bring a

suit within one year after the delivery of the

goods or the date when the goods should have

been delivered, in respect of loss or damage

thereto.

Petitioner then filed before the Supreme Court apetition for review on certiorari assailing the

trial courts order of dismissal.

ISSUE/S:

1.)

Whether or not the trial court committed an

error in dismissing the complaint of the

petitioner based on the one-year prescriptive

period for filing a suit under the COGSA to an

arrastre operator? YES.

2.)

Whether or not the Petitioner is entitled torecover actual damages against the Respondent?

YES, but only PhP164,428.76

HELD:

The term carriage of goods covers the period

from the time when the goods are loaded to the

time when they are discharged from the ship.

Thus, it can be inferred that the peri

transpo (nov. 29 and dec. 3)

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