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G.R.No.143133

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RepublicofthePhilippines
SUPREMECOURT
Manila
THIRDDIVISION
G.R.No.143133June5,2002
BELGIANOVERSEASCHARTERINGANDSHIPPINGN.V.andJARDINEDAVIESTRANSPORTSERVICES,
INC.,petitioners,
vs.
PHILIPPINEFIRSTINSURANCECO.,INC.,respondents.
PANGANIBAN,J.:
Proof of the delivery of goods in good order to a common carrier and of their arrival in bad order at their
destination constitutes prima facie fault or negligence on the part of the carrier. If no adequate explanation is
given as to how the loss, the destruction or the deterioration of the goods happened, the carrier shall be held
liabletherefor.
StatementoftheCase
BeforeusisaPetitionforReviewunderRule45oftheRulesofCourt,assailingtheJuly15,1998Decision1and
theMay2,2000Resolution2oftheCourtofAppeals3(CA)inCAGRCVNo.53571.Thedecretalportionofthe
Decisionreadsasfollows:
"WHEREFORE,inthelightoftheforegoingdisquisition,thedecisionappealedfromisherebyREVERSED
andSETASIDE.DefendantsappelleesareORDEREDtojointlyandseverallypayplaintiffsappellantsthe
following:
'1) FOUR Hundred Fifty One Thousand TwentySeven Pesos and 32/100 (P451,027.32) as actual
damages,representingthevalueofthedamagedcargo,plusinterestatthelegalratefromthetime
offilingofthecomplaintonJuly25,1991,untilfullypaid
'2)Attorney'sfeesamountingto20%oftheclaimand
'3)Costsofsuit.'"4
TheassailedResolutiondeniedpetitioner'sMotionforReconsideration.
TheCAreversedtheDecisionoftheRegionalTrialCourt(RTC)ofMakatiCity(Branch134),whichhaddisposed
asfollows:
"WHEREFORE,inviewoftheforegoing,judgmentisherebyrendered,dismissingthecomplaint,aswellas
defendant'scounterclaim."5
TheFacts
ThefactualantecedentsofthecasearesummarizedbytheCourtofAppealsinthiswise:
"OnJune13,1990,CMCTradingA.G.shippedonboardtheM/V'AnangelSky'atHamburg,Germany242
coilsofvariousPrimeColdRolledSteelsheetsfortransportationtoManilaconsignedtothePhilippineSteel
Trading Corporation. On July 28, 1990, M/V Anangel Sky arrived at the port of Manila and, within the
subsequent days, discharged the subject cargo. Four (4) coils were found to be in bad order B.O. Tally
sheetNo.154974.Findingthefour(4)coilsintheirdamagedstatetobeunfitfortheintendedpurpose,the
consigneePhilippineSteelTradingCorporationdeclaredthesameastotalloss.
1 w p h i1 .n t

"Despite receipt of a formal demand, defendantsappellees refused to submit to the consignee's claim.
Consequently, plaintiffappellant paid the consignee five hundred six thousand eighty six & 50/100 pesos
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(P506,086.50), and was subrogated to the latter's rights and causes of action against defendants
appellees. Subsequently, plaintiffappellant instituted this complaint for recovery of the amount paid by
them,totheconsigneeasinsured.
"Impugning the propriety of the suit against them, defendantsappellees imputed that the damage and/or
loss was due to preshipment damage, to the inherent nature, vice or defect of the goods, or to perils,
danger and accidents of the sea, or to insufficiency of packing thereof, or to the act or omission of the
shipper of the goods or their representatives. In addition thereto, defendantsappellees argued that their
liability, if there be any, should not exceed the limitations of liability provided for in the bill of lading and
otherpertinentlaws.Finally,defendantsappelleesaverredthat,inanyevent,theyexercisedduediligence
andforesightrequiredbylawtopreventanydamage/losstosaidshipment."6
RulingoftheTrialCourt
TheRTCdismissedtheComplaintbecauserespondenthadfailedtoproveitsclaimswiththequantumofproof
requiredbylaw.7
Itlikewisedebunkedpetitioners'counterclaim,becauserespondent'ssuitwasnotmanifestlyfrivolousorprimarily
intendedtoharassthem.8
RulingoftheCourtofAppeals
In reversing the trial court, the CA ruled that petitioners were liable for the loss or the damage of the goods
shipped,becausetheyhadfailedtoovercomethepresumptionofnegligenceimposedoncommoncarriers.
TheCAfurtherheldasinadequatelyprovenpetitioners'claimthatthelossorthedeteriorationofthegoodswas
due to preshipment damage.9 It likewise opined that the notation "metal envelopes rust stained and slightly
dented"placedontheBillofLadinghadnotbeentheproximatecauseofthedamagetothefour(4)coils.10
Astotheextentofpetitioners'liability,theCAheldthatthepackagelimitationunderCOGSAwasnotapplicable,
becausethewords"L/CNo.90/02447"indicatedthatahighervaluationofthecargohadbeendeclaredbythe
shipper.TheCA,however,affirmedtheawardofattorney'sfees.
Hence,thisPetition.11
Issues
IntheirMemorandum,petitionersraisethefollowingissuesfortheCourt'sconsideration:
I
"Whetherornotplaintiffbypresentingonlyonewitnesswhohasneverseenthesubjectshipmentand
whosetestimonyispurelyhearsayissufficienttopavethewayfortheapplicabilityofArticle1735ofthe
CivilCode
II
"Whetherornottheconsignee/plaintifffiledtherequirednoticeoflosswithinthetimerequiredbylaw
III
"Whether or not a notation in the bill of lading at the time of loading is sufficient to show preshipment
damageandtoexempthereindefendantsfromliability
IV
"Whetherornotthe"PACKAGELIMITATION"ofliabilityunderSection4(5)ofCOGSAisapplicabletothe
caseatbar."12
Insum,theissuesboildowntothree:
1.Whetherpetitionershaveovercomethepresumptionofnegligenceofacommoncarrier
2.Whetherthenoticeoflosswastimelyfiled
3.Whetherthepackagelimitationofliabilityisapplicable
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ThisCourt'sRuling
ThePetitionispartlymeritorious.
FirstIssue:
ProofofNegligence
Petitionerscontendthatthepresumptionoffaultimposedoncommoncarriersshouldnotbeappliedonthebasis
ofthelonetestimonyofferedbyprivaterespondent.Thecontentionisuntenable.
Wellsettledistherulethatcommoncarriers,fromthenatureoftheirbusinessandforreasonsofpublicpolicy,
are bound to observe extraordinary diligence and vigilance with respect to the safety of the goods and the
passengers they transport.13 Thus, common carriers are required to render service with the greatest skill and
foresightand"touseallreason[a]blemeanstoascertainthenatureandcharacteristicsofthegoodstenderedfor
shipment, and to exercise due care in the handling and stowage, including such methods as their nature
requires."14 The extraordinary responsibility lasts from the time the goods are unconditionally placed in the
possessionofandreceivedfortransportationbythecarrieruntiltheyaredelivered,actuallyorconstructively,to
theconsigneeortothepersonwhohasarighttoreceivethem.15
Thisstrictrequirementisjustifiedbythefactthat,withoutahandoravoiceinthepreparationofsuchcontract,
the riding public enters into a contract of transportation with common carriers.16 Even if it wants to, it cannot
submititsownstipulationsfortheirapproval.17Hence,itmerelyadherestotheagreementpreparedbythem.
Owing to this high degree of diligence required of them, common carriers, as a general rule, are presumed to
have been at fault or negligent if the goods they transported deteriorated or got lost or destroyed.18 That is,
unless they prove that they exercised extraordinary diligence in transporting the goods.19 In order to avoid
responsibility for any loss or damage, therefore, they have the burden of proving that they observed such
diligence.20
However,thepresumptionoffaultornegligencewillnotarise21ifthelossisduetoanyofthefollowingcauses:
(1)flood,storm,earthquake,lightning,orothernaturaldisasterorcalamity(2)anactofthepublicenemyinwar,
whetherinternationalorcivil(3)anactoromissionoftheshipperorownerofthegoods(4)thecharacterofthe
goodsordefectsinthepackingorthecontaineror(5)anorderoractofcompetentpublicauthority.22Thisisa
closedlist.Ifthecauseofdestruction,lossordeteriorationisotherthantheenumeratedcircumstances,thenthe
carrierisliabletherefor.23
Corollary to the foregoing, mere proof of delivery of the goods in good order to a common carrier and of their
arrivalinbadorderattheirdestinationconstitutesaprimafaciecaseoffaultornegligenceagainstthecarrier.If
noadequateexplanationisgivenastohowthedeterioration,thelossorthedestructionofthegoodshappened,
thetransportershallbeheldresponsible.24
That petitioners failed to rebut the prima facie presumption of negligence is revealed in the case at bar by a
reviewoftherecordsandmoresobytheevidenceadducedbyrespondent.25
First, as stated in the Bill of Lading, petitioners received the subject shipment in good order and condition in
Hamburg,Germany.26
Second, prior to the unloading of the cargo, an Inspection Report27 prepared and signed by representatives of
both parties showed the steel bands broken, the metal envelopes ruststained and heavily buckled, and the
contentsthereofexposedandrusty.
Third,BadOrderTallySheetNo.15497928issuedbyJardineDaviesTransportServices,Inc.,statedthatthefour
coils were in bad order and condition. Normally, a request for a bad order survey is made in case there is an
apparentorapresumedlossordamage.29
Fourth, the Certificate of Analysis30 stated that, based on the sample submitted and tested, the steel sheets
foundinbadorderwerewetwithfreshwater.
Fifth,petitionersinaletter31addressedtothePhilippineSteelCoatingCorporationanddatedOctober12,1990
admittedthattheywereawareoftheconditionofthefourcoilsfoundinbadorderandcondition.
These facts were confirmed by Ruperto Esmerio, head checker of BM Santos Checkers Agency. Pertinent
portionsofhistestimonyarereproducehereunder:
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"Q.Mr.Esmerio,youmentionedthatyouareaHeadChecker.WillyouinformtheHonorableCourtwith
whatcompanyyouareconnected?
A.BMSantosCheckersAgency,sir.
Q.HowisBMSantoscheckersAgencyrelatedorconnectedwithdefendantJardineDaviesTransport
Services?
A.Itisthecompanywhocontractsthecheckers,sir.
Q.YoumentionedthatyouareaHeadChecker,willyouinformthisHonorableCourtyourdutiesand
responsibilities?
A.IamtherepresentativeofBMSantosonboardthevessel,sir,tosupervisethedischargeofcargoes.
xxxxxxxxx
Q. On or about August 1, 1990, were you still connected or employed with BM Santos as a Head
Checker?
A.Yes,sir.
Q. And, on or about that date, do you recall having attended the discharging and inspection of cold
steelsheetsincoilonboardtheMV/ANANGELSKY?
A.Yes,sir,Iwasthere.
xxxxxxxxx
Q.Basedonyourinspectionsinceyouwerealsopresentatthattime,willyouinformthisHonorable
CourttheconditionortheappearanceofthebadordercargoesthatwereunloadedfromtheMV/ANANGEL
SKY?
ATTY.MACAMAY:
Objection,YourHonor,Ithinkthedocumentitselfreflectstheconditionofthecoldsteelsheetsand
thebestevidenceisthedocumentitself,YourHonorthatshowstheconditionofthesteelsheets.
COURT:
Letthewitnessanswer.
A.Thescrapofthecargoesisbrokenalreadyandtheropeisloosenandthecargoesaredentonthe
sides."32
Alltheseconclusivelyprovethefactofshipmentingoodorderandconditionandtheconsequentdamagetothe
fourcoilswhileinthepossessionofpetitioner,33whonotablyfailedtoexplainwhy.34
Further, petitioners failed to prove that they observed the extraordinary diligence and precaution which the law
requiresacommoncarriertoknowandtofollowtoavoiddamagetoordestructionofthegoodsentrustedtoitfor
safecarriageanddelivery.35
True, the words "metal envelopes rust stained and slightly dented" were noted on the Bill of Lading however,
thereisnoshowingthatpetitionersexercisedduediligencetoforestallorlessentheloss.36Havingbeeninthe
serviceforseveralyears,themasterofthevesselshouldhaveknownattheoutsetthatmetalenvelopesinthe
said state would eventually deteriorate when not properly stored while in transit.37 Equipped with the proper
knowledge of the nature of steel sheets in coils and of the proper way of transporting them, the master of the
vesselandhiscrewshouldhaveundertakenprecautionarymeasurestoavoidpossibledeteriorationofthecargo.
But none of these measures was taken.38 Having failed to discharge the burden of proving that they have
exercised the extraordinary diligence required by law, petitioners cannot escape liability for the damage to the
fourcoils.39
In their attempt to escape liability, petitioners further contend that they are exempted from liability under Article
1734(4)oftheCivilCode.Theycitethenotation"metalenvelopesruststainedandslightlydented"printedonthe
Bill of Lading as evidence that the character of the goods or defect in the packing or the containers was the
proximatecauseofthedamage.Wearenotconvinced.
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Fromtheevidenceonrecord,itcannotbereasonablyconcludedthatthedamagetothefourcoilswasduetothe
conditionnotedontheBillofLading.40Theaforecitedexceptionreferstocaseswhengoodsarelostordamaged
while in transit as a result of the natural decay of perishable goods or the fermentation or evaporation of
substances liable therefor, the necessary and natural wear of goods in transport, defects in packages in which
theyareshipped,orthenaturalpropensitiesofanimals.41Noneoftheseispresentintheinstantcase.
Further,evenifthefactofimproperpackingwasknowntothecarrieroritscreworwasapparentuponordinary
observation, it is not relieved of liability for loss or injury resulting therefrom, once it accepts the goods
notwithstanding such condition.42 Thus, petitioners have not successfully proven the application of any of the
aforecitedexceptionsinthepresentcase.43
SecondIssue:
NoticeofLoss
Petitioners claim that pursuant to Section 3, paragraph 6 of the Carriage of Goods by Sea Act44 (COGSA),
respondent should have filed its Notice of Loss within three days from delivery. They assert that the cargo was
dischargedonJuly31,1990,butthatrespondentfileditsNoticeofClaimonlyonSeptember18,1990.45
Wearenotpersuaded.First,theabovecitedprovisionofCOGSAprovidesthatthenoticeofclaimneednotbe
givenifthestateofthegoods,atthetimeoftheirreceipt,hasbeenthesubjectofajointinspectionorsurvey.As
statedearlier,priortounloadingthecargo,anInspectionReport46astotheconditionofthegoodswasprepared
andsignedbyrepresentativesofbothparties.47
Second,asstatedinthesameprovision,afailuretofileanoticeofclaimwithinthreedayswillnotbarrecoveryif
it is nonetheless filed within one year.48 This oneyear prescriptive period also applies to the shipper, the
consignee,theinsurerofthegoodsoranylegalholderofthebilloflading.49
InLoadstarShippingCo.,Inc,v.CourtofAppeals,50weruledthataclaimisnotbarredbyprescriptionaslongas
theoneyearperiodhasnotlapsed.Thus,inthewordsoftheponente,ChiefJusticeHilarioG.DavideJr.:
"InasmuchastheneithertheCivilCodenortheCodeofCommercestatesaspecificprescriptiveperiodon
thematter,theCarriageofGoodsbySeaAct(COGSA)whichprovidesforaoneyearperiodoflimitation
on claims for loss of, or damage to, cargoes sustained during transitmay be applied suppletorily to the
caseatbar."
Inthepresentcase,thecargowasdischargedonJuly31,1990,whiletheComplaint51wasfiledbyrespondent
onJuly25,1991,withintheoneyearprescriptiveperiod.
ThirdIssue:
PackageLimitation
Assumingarguendotheyareliableforrespondent'sclaims,petitionerscontendthattheirliabilityshouldbelimited
toUS$500perpackageasprovidedintheBillofLadingandbySection4(5)52ofCOGSA.53
On the other hand, respondent argues that Section 4(5) of COGSA is inapplicable, because the value of the
subjectshipmentwasdeclaredbypetitionersbeforehand,asevidencedbythereferencetoandtheinsertionof
theLetterofCreditor"L/CNo.90/02447"inthesaidBillofLading.54
Abillofladingservestwofunctions.First,itisareceiptforthegoodsshipped.53Second,itisacontractbywhich
three parties namely, the shipper, the carrier, and the consignee undertake specific responsibilities and
assume stipulated obligations.56 In a nutshell, the acceptance of the bill of lading by the shipper and the
consignee, with full knowledge of its contents, gives rise to the presumption that it constituted a perfected and
bindingcontract.57
Further, a stipulation in the bill of lading limiting to a certain sum the common carrier's liability for loss or
destructionofacargounlesstheshipperorownerdeclaresagreatervalue58issanctionedbylaw.59There
are,however,twoconditionstobesatisfied:(1)thecontractisreasonableandjustunderthecircumstances,and
(2)ithasbeenfairlyandfreelyagreeduponbytheparties.60Therationaleforthisruleistobindtheshippersby
theiragreementtothevalue(maximumvaluation)oftheirgoods.61
Itistobenoted,however,thattheCivilCodedoesnotlimittheliabilityofthecommoncarriertoafixedamount
perpackage.62 In all matters not regulated by the Civil Code, the right and the obligations of common carriers
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shall be governed by the Code of Commerce and special laws.63 Thus, the COGSA, which is suppletory to the
provisions of the Civil Code, supplements the latter by establishing a statutory provision limiting the carrier's
liabilityintheabsenceofashipper'sdeclarationofahighervalueinthebilloflading.64Theprovisionsonlimited
liabilityareasmuchapartofthebillofladingasthoughphysicallyinitandasthoughplacedtherebyagreement
oftheparties.65
Inthecasebeforeus,therewasnostipulationintheBillofLading66limitingthecarrier'sliability.Neitherdidthe
shipper declare a higher valuation of the goods to be shipped. This fact notwithstanding, the insertion of the
words"L/CNo.90/02447cannotbethebasisforpetitioners'liability.
First,anotationintheBillofLadingwhichindicatedtheamountoftheLetterofCreditobtainedbytheshipperfor
theimportationofsteelsheetsdidnoteffectadeclarationofthevalueofthegoodsasrequiredbythebill.67That
notationwasmadeonlyfortheconvenienceoftheshipperandthebankprocessingtheLetterofCredit.68
Second,inKengHuaPaperProductsv.CourtofAppeals,69weheldthatabillofladingwasseparatefromthe
OtherLetterofCreditarrangements.Weruledthus:
"(T)he contract of carriage, as stipulated in the bill of lading in the present case, must be treated
independentlyofthecontractofsalebetweenthesellerandthebuyer,andthecontractofissuanceofa
letterofcreditbetweentheamountofgoodsdescribedinthecommercialinvoiceinthecontractofsaleand
the amount allowed in the letter of credit will not affect the validity and enforceability of the contract of
carriageasembodiedinthebilloflading.Asthebankcannotbeexpectedtolookbeyondthedocuments
presentedtoitbythesellerpursuanttotheletterofcredit,neithercanthecarrierbeexpectedtogobeyond
therepresentationsoftheshipperinthebillofladingandtoverifytheiraccuracyvisvisthecommercial
invoiceandtheletterofcredit.Thus,thediscrepancybetweentheamountofgoodsindicatedintheinvoice
andtheamountinthebillofladingcannotnegatepetitioner'sobligationtoprivaterespondentarisingfrom
thecontractoftransportation."70
Inthelightoftheforegoing,petitioners'liabilityshouldbecomputedbasedonUS$500perpackageandnoton
the per metric ton price declared in the Letter of Credit.71 In Eastern Shipping Lines, Inc. v. Intermediate
AppellateCourt,72weexplainedthemeaningofpackages:
"Whenwhatwouldordinarilybeconsideredpackagesareshippedinacontainersuppliedbythecarrierand
thenumberofsuchunitsisdisclosedintheshippingdocuments,eachofthoseunitsandnotthecontainer
constitutesthe'package'referredtointheliabilitylimitationprovisionofCarriageofGoodsbySeaAct."
Considering,therefore,therulinginEasternShippingLines and the fact that the Bill of Lading clearly disclosed
thecontentsofthecontainers,thenumberofunits,aswellasthenatureofthesteelsheets,thefourdamaged
coilsshouldbeconsideredastheshippingunitsubjecttotheUS$500limitation.
1 w p h i1 .n t

WHEREFORE,thePetitionispartlygrantedandtheassailedDecisionMODIFIED.Petitioners'liabilityisreduced
toUS$2,000plusinterestatthelegalrateofsixpercentfromthetimeofthefilingoftheComplaintonJuly25,
1991untilthefinalityofthisDecision,and12percentthereafteruntilfullypaid.Nopronouncementastocosts.
SOORDERED.
SandovalGutierrez,andCarpio,JJ.,concur.
Puno,J.,abroad,onofficialleave.

Footnote
1Rollo,pp.4855.
2Ibid.,p.57.
3WrittenbyJusticeJainalD.Rasul(Divisionchairman)concurredinbyJusticesDelilahVidallonMagtolis

andRodrigoV.Cosico(members).
4CADecision,pp.78rollo,pp.5455.
5RTCDecision,p.4rollo,p.108pennedbyActingPresidingJudgePaulT.Arcangel.
6CADecision,pp.13rollo,pp.4850.
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7RTCDecision,p.3rollo,p.107.
8Ibid.,pp.4&108.
9CADecisionp.5rollo,p.52.
10Ibid.,pp.6&53.
11 The case was deemed submitted for decision on March 29, 2001, upon the Court's receipt of

respondent'sMemorandumsignedbyAtty.BaltazarY.Repol.Petitioners'Memorandum,filedonFebruary
9,2001,wassignedbyAtty.LancelotS.Limqueco.
12Pages56rollo,pp.172173.
13Art.1733,CivilCode.
14CompaniaMaritimav.CourtofAppeals,164SCRA685,692,August29,1988,perFernan,CJ.
15Art.1736,CivilCode.
16ValenzuelaHardwoodandIndustrialSupply,Inc.v.CourtofAppeals,274SCRA642,June30,1997.
17Ibid.
18PhilippineAmericanGeneralInsuranceCo,Inc.v.MGGMarineServices,Inc.GRNo.135645,March8,

2002.
19 Art. 1735 Civil Code. "In all cases other than those mentioned in Nos. 1,2,3,4 and 5 of the preceding

article, if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at
faultortohaveactednegligently,unlesstheyprovethattheyobservedextraordinarydiligenceasrequired
inArticle1733."
20TabacaleraInsuranceCo.v.NorthFrontShippingServices,Inc.,272SCRA527,May16,1997.
21PhilippineAmericanGeneralInsuranceCo.,Inc.v.MGGMarineServices,Inc.,supra.
22Art.1734,CivilCode.
23TabacaleraInsuranceCo.v.NorthFrontShippingServices,Inc.,supra.
24Compania Maritima v. Court of Appeals, supra Mirasol v. Robert Dollar Co., 53 Phil. 129, March 27,

1929YnchaustiSteamshipCo.v.DexterandUnson,41Phil.289,December14,1920.
25TabacaleraInsuranceCo.v.NorthFrontShippingServices,Inc.,supra.
26SeeExhibit"A"records,p.31.
27SeeExhibit"F"ibid.,p.39.
28SeeAnnex"C",id.,p.61.
29International Container Services, Inc. v. Prudential Guarantee & Assurance Co., Inc., 320 SCRA 244,

December8,1999.
30Exhibit"I"records,p.47.
31SeeExhibit"L"ibid.,p.51.
32TSN,December13,1993,pp.410.
33TabacaleraInsuranceCo.v.NorthFrontShippingServices,Inc.,supra.
34Ibid.
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35CompaniaMaritimav.CourtofAppeals,supra.
36Article1742,CivilCode."Eveniftheloss,destructionordeteriorationofthegoodsshouldbecausedby

the character of the goods, or the faulty nature of the packing or of the containers, common carriers
exercisedduediligencetoforestallorlessentheloss."
37TabacaleraInsuranceCo.v.NorthFrontShippingServices,Inc.,supra.
38Ibid.
39EasternShippingLines,Inc.v.IntermediateAppellateCourt,supra.
40CompaniaMaritimav.CourtofAppeals,supra.
41Tolentino,CivilCodeofthePhilippines,Vol.V,1992ed.,p.301,citing9Am.Jur.,pp.862863.
42 Southern Lines v. Court of Appeals, 4 SCRA 258, January 31, 1962 Philippine Airlines v. Court of

Appeals,255SCRA48,March14,19969Am.Jur.P.869.
43VlasonsShipping,Inc.v.CourtofAppeals,283SCRA45,December12,1997.
44CommonwealthActNo.65."Section1.ThattheprovisionsofPublicActNo.521ofthe74thCongressof

theUnitedStates,approvedonApril16,1936,beaccepted,asitisherebyacceptedtobemadeapplicable
toallcontractsforthecarriageofgoodsbyseatoandfromPhilippineportsinforeigntrade:Provided,That
nothinginthisActshallbeconstruedasrepealinganyexistingprovisionoftheCodeofCommercewhichis
nowinforceoraslimitingitsapplication."ApprovedonApril22,1936.
45Exhibit"K"records,p.50.
46Exhibit"F"ibid.,p.39.
473(6)COGSAprovides:

"Unlessnoticeoflossordamageandthegeneralnatureofsuchlossordamagebegiveninwriting
tothecarrierorhisagentattheportofdischargeoratthetimeoftheremovalofthegoodsintothe
custodyofthepersonentitledtodeliverythereofunderthecontractofcarriage,suchremovalshall
beprimafacieevidenceofthedeliverybythecarrierofthegoodsasdescribedinthebilloflading.If
thelossordamageisnotapparent,thenoticemustbegivenwithinthreedaysofdelivery.
"Saidnoticeoflossordamagemaybeendorseduponthereceiptforthegoodsgivenbytheperson
takingdeliverythereof.
"Thenoticeinwritingneednotbegivenifthestateofthegoodshasatthetimeoftheirreceiptbeen
thesubjectofjointsurveyorinspection.
"In any event the carrier and the ship shall be discharged from all liability in respect of loss or
damageunlesssuitisbroughtwithinoneyearafterdeliveryofthegoodsorthedatewhenthegoods
should have been delivered Provided, That, if a notice of loss or damage, either apparent or
concealed,isnotgivenasprovidedforinthissection,thatfactshallnotaffectorprejudicetherightof
theshippertobringsuitwithinoneyearafterthedeliveryofthegoodsorthedatewhenthegoods
shouldhavebeendelivered.
"Inthecaseofanyactualorapprehendedlossordamage,thecarrierandthereceivershallgiveall
reasonablefacilitiestoeachotherforinspectingandtallyingthegoods."
48Vitug,PandectofCommercialLawandJurisprudence,3rded.,1997,p.333.
49Ibid.,citingFilipinoMerchantsInsuranceCo.,Inc.v.Alejandro,145SCRA42,October14,1986.
50315SCRA339,September28,1999,perDavideJr.,CJ.
51Records,p.1.
52Thissectionprovides:

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"(5)Neitherthecarriernortheshipshallinanyeventbeorbecomeliableforanylossordamageto
or in connection with the transportation of goods in an amount exceeding $500 per package lawful
moneyoftheUnitedStates,orincaseofgoodsnotshippedinpackages,percustomaryfreightunit,
ortheequivalentofthatsuminothercurrency,unlessthenatureandvalueofsuchgoodshavebeen
declared by the shipper before the shipment and inserted in bill of lading. This declaration if
embodiedinthebillofladingshallbeprimafacieevidence,butshallnotbeconclusiveonthecarrier.
"By agreement between the carrier, master or agent of the carrier, and the shipper another
maximum amount than that mentioned in this paragraph may be fixed Provided, That such
maximum shall not be less than the figure above named. In no event shall the carrier be liable for
morethantheamountofdamageactuallysustained.
"Neither the carrier nor the ship shall be responsible in any event for loss or damage to or in
connectionwiththetransportationofthegoodsifthenatureorvaluethereofhasbeenknowinglyand
fraudulentlymisstatedbytheshipperinthebilloflading."
53Petitioners'Memorandum,p.14rollo,p.181.
54Respondent'sMemorandum,p.14rollo,p.203.
55KengHuaPaperProductsCo.,Inc.v.CourtofAppeals,286SCRA257,February12,1998.
56MagellanMftg.MarketingCorp.v.CourtofAppeals,201SCRA102,August22,1991.
57SaludoJr.v.CourtofAppeals,207SCRA498,March23,1992.
58Art.1749,CivilCode.
59EverettSteamshipCorporationv.CourtofAppeals,297SCRA496,October8,1998.
60Art.1750,CivilCode.
61Vitug,CompendiumofCivilLawandJurisprudence,1993rev.ed.,p.702.
62EasternShippingLines,Inc.v.IntermediateAppellateCourt,supra.
63Art.1766,CivilCode.
64EasternShippingLines,Inc.v.IntermediateAppellateCourt,supra.
65PhoenixAssuranceCompanyv.Macondray,64SCRA15,May13,1975.
66Exhibit"A"records,p.31.
67Hernandez&Penasales,PhilippineAdmiraltyandMaritimeLaw,1sted.,1987,p.291,citingMcCarthyv.

BarberSteamshipLines,45Phil.488,December10,1923.
68Ibid.
69Supra.
70Ibid.,pp.269270,perPanganiban,J.
71AssailedDecision,p.7rollo,p.54.
72150SCRA463,May29,1967,citingMitsui&Co.,Ltd.v.AmericanExportLines,636F2nd807(1981).
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