Professional Documents
Culture Documents
REGALADO, J.:p
This is definitely not a case of first impression. The incident which eventuated
in the present controversy is a drama of common contentious occurrence
between passengers and carriers whenever loss is sustained by the former.
Withal, the exposition of the factual ambience and the legal precepts in this
adjudication may hopefully channel the assertiveness of passengers and the
intransigence of carriers into the realization that at times a bad extrajudicial
compromise could be better than a good judicial victory.
Assailed in this petition for review is the decision of respondent Court of
Appeals in CA-G.R. CV No. 42744 1 which affirmed the decision of the lower
court 2 finding petitioner Philippine Air Lines, Inc. (PAL) liable as follows:
ACCORDINGLY, judgment is hereby rendered ordering
defendant Philippine Air Lines, Inc., to pay plaintiff Gilda C.
Mejia:
(1) P30,000.00 by way of actual damages of the microwave
oven;
(2) P10,000.00 by way of moral damages;
(3) P20,000.00 by way of exemplary damages;
(4) P10,000.00 as attorney's fee;
all in addition to the costs of the suit.
Defendant's counterclaim is hereby dismissed for lack of
merit. 3
TRANSPO | ASS3| 2
Case No. 6210, with costs against petitioner. 6 Consequently, petitioner now
impugns respondent appellate court's ruling insofar as it agrees with (1) the
conclusions of the trial court that since the air waybill is a contract of
adhesion, its provisions should be strictly construed against herein petitioner;
(2) the finding of the trial court that herein petitioner's liability is not limited
by the provisions of the air waybill; and (3) the award by the trial court to
private respondent of moral and exemplary damages, attorney's fees and
litigation expenses.
The trial court relied on the ruling in the case of Fieldmen's Insurance Co.,
Inc. vs. Vda. De Songco, et al. 7 in finding that the provisions of the air
waybill should be strictly construed against petitioner. More particularly, the
court below stated its findings thus:
In this case, it is seriously doubted whether plaintiff had read
the printed conditions at the back of the Air Waybill (Exh.
"1"), or even if she had, if she was given a chance to
negotiate on the conditions for loading her microwave oven.
Instead she was advised by defendant's employee at San
Francisco, U.S.A., that there is no need to declare the value
of her oven since it is not brand new. Further, plaintiff
testified that she immediately submitted a formal claim for
P30,000.00 with defendant. But their claim was referred from
one employee to another th(e)n told to come back the next
day, and the next day, until she was referred to a certain
Atty. Paco. When they got tired and frustrated of coming
without a settlement of their claim in sight, they consulted a
lawyer who demanded from defendant on August 13, 1990
(Exh. "E", an[d] Exh. "6").
The conclusion that inescapably emerges from the above
findings of fact is to concede it with credence. . . . . 8
Respondent appellate court approved said findings of the trial court in this
manner:
We cannot
agree
with
defendant-appellant's
above
contention. Under our jurisprudence, the Air Waybill is a
contract of adhesion considering that all the provisions
thereof are prepared and drafted only by the carrier (Sweet
Lines v. Teves, 83 SCRA 361). The only participation left of
TRANSPO | ASS3| 3
The peculiar nature of such contracts behooves the Court to closely scrutinize
the factual milieu to which the provisions are intended to apply. Thus, just as
consistently and unhesitatingly, but without categorically invalidating such
contracts, the Court has construed obscurities and ambiguities in the
restrictive provisions of contracts of adhesion strictly albeit not unreasonably
against the drafter thereof when justified in light of the operative facts and
surrounding circumstances. 13
TRANSPO | ASS3| 4
present petition. The parallelism between the aforementioned case and this
one is readily apparent for, just as in the instant case, it is the binding effect
of the provisions in a contract of adhesion (an insurance policy in Fieldmen's
Insurance) that is put to test.
This Court
defendant.
A judicious reading of the case reveals that what was pivotal in the judgment
of liability against petitioner insurance company therein, and necessarily
interpreting the provisions of the insurance policy as ineffective, was the
finding that the representations made by the agent of the insurance company
rendered it impossible to comply with the conditions of the contract in
question, rather than the mere ambiguity of its terms. The extended
pronouncements regarding strict construction of ambiguous provisions in an
adhesion contract against its drafter, which although made by the Court as an
aside but has perforce evolved into a judicial tenet over time, was actually an
incidental statement intended to emphasize the duty of the court to protect
the weaker, as against the more dominant, party to a contract, as well as to
prevent the iniquitous situation wherein the will of one party is imposed upon
the other in the course of negotiation.
Thus, there can be no further question as to the validity of the terms of the
air waybill, even if the same constitutes a contract of adhesion. Whether or
not the provisions thereof particularly on the limited liability of the carrier are
binding on private respondent in this instance must be determined from the
facts and circumstances involved vis-a-vis the nature of the provisions sought
to be enforced, taking care that equity and fair play should characterize the
transaction under review.
On petitioner's insistence that its liability for the damage to private
respondent's microwave oven, if any, should be limited by the provisions of
the air waybill, the lower court had this to say:
By and large, defendant's evidence is anchored principally on
plaintiff's alleged failure to comply with paragraph 12, a(1)
(Exh. "1-C-2") of the Air waybill (Exh. "A," also Exh. "1"), by
filing a formal claim immediately after discovery of the
damage. Plaintiff filed her formal claim only on August 13,
1990 (Exh. "6", also Exh. "E"). And, failed to present positive
proof on the value of the damaged microwave oven. Hence,
the denial of her claim.
has
misgivings
about
these
pretensions
of
The appellate court declared correct the non-application by the trial court of
the limited liability of therein defendant-appellant under the "Conditions of
the Contract" contained in the air waybill, based on the ruling in Cathay
Pacific Airways, Ltd. vs. Court of Appeals, et al., 15 which substantially
enunciates the rule that while the Warsaw Convention has the force and
effect of law in the Philippines, being a treaty commitment by the
government and as a signatory thereto, the same does not operate as an
exclusive enumeration of the instances when a carrier shall be liable for
breach of contract or as an absolute limit of the extent of liability, nor does it
preclude the operation of the Civil Code or other pertinent laws.
Petitioner insists that both respondent court and the trial court erred in
finding that petitioner's liability, if any, is not limited by the provisions of the
air waybill, for, as evidence of the contract of carriage between petitioner and
private respondent, it substantially states that the shipper certifies to the
correctness of the entries contained therein and accepts that the carrier's
liability is limited to US $20 per kilogram of goods lost, damaged or
destroyed unless a value is declared and a supplementary charge paid.
Inasmuch as no such declaration was made by private respondent, as she
admitted during cross-examination, the liability of petitioner, if any, should be
limited to 28 kilograms multiplied by US $20, or $560. Moreover, the validity
of these conditions has been upheld in the leading case of Ong Yiu vs. Court
of Appeals, et al., supra, and subsequent cases, for being a mere reiteration
of the limitation of liability under the Warsaw Convention, which treaty has
the force and effect of law. 16
It is additionally averred that since private respondent was merely advised,
not ordered, that she need not declare a higher value for her cargo, the final
decision of refraining from making such a declaration fell on private
TRANSPO | ASS3| 5
respondent and should not put the petitioner in estoppel from invoking its
limited liability. 17
In refutation, private respondent explains that the reason for the absence of
a declaration of a higher value was precisely because petitioner's personnel in
San Francisco, U.S.A. advised her not to declare the value of her cargo,
which testimony has not at all been rebutted by petitioner. This being so,
petitioner is estopped from faulting private respondent for her failure to
declare the value of the microwave oven. 18
The validity of provisions limiting the liability of carriers contained in bills of
lading have been consistently upheld for the following reason:
. . . . The stipulation in the bill of lading limiting the common
carrier's liability to the value of goods appearing in the bill,
unless the shipper or owner declares a greater value, is valid
and binding. The limitation of the carrier's liability is
sanctioned by the freedom of the contracting parties to
establish such stipulations, clauses, terms, or conditions as
they may deem convenient, provided they are not contrary to
law, morals, good customs and public policy. . . . . 19
It cannot be denied that the attention of PAL through its personnel in San
Francisco was sufficiently called to the fact that private respondent's cargo
was highly susceptible to breakage as would necessitate the declaration of its
actual value. Petitioner had all the opportunity to check the condition and
manner of packing prior to acceptance for shipment, 22 as well as during the
preparation of the air waybill by PAL's Acceptance Personnel based on
information supplied by the shipper, 23 and to reject the cargo if the contents
or the packing did not meet the company's required specifications. Certainly,
PAL could not have been otherwise prevailed upon to merely accept the
cargo.
While Vicente Villaruz, officer-in-charge of the PAL Import Section at the time
of incident, posited that there may have been inadequate and improper
packing of the cargo, 24 which by itself could be a ground for refusing
carriage of the goods presented for shipment, he nonetheless admitted on
cross-examination that private respondent's cargo was accepted by PAL in its
San Francisco office:
ATTY. VINCO
So that, be that as it may, my
particular concern is that, it is
the
PAL
personnel
that
accepts the baggage?
Yes, sir.
ATTY. VINCO
Yes, sir.
A At the PAL Air Cargo.
21
TRANSPO | ASS3| 6
ATTY. VINCO
WITNESS
No, I cannot show.
ATTY. VINCO
According to what is stated as
in the acceptance of the
cargo, it is to the best interest
of the airlines, that is, he
want(s) also that the airlines
would be free from any
liability. Could that be one of
the grounds for not admitting
a baggage?
WITNESS
ATTY. VINCO
In response to the trial court's questions during the trial, he also stated that
while the passenger's declaration regarding the general or fragile character of
the cargo is to a certain extent determinative of its classification, PAL
nevertheless has and exercises discretion as to the manner of handling
required by the nature of the cargo it accepts for carriage. He further opined
that the microwave oven was only a general, not a fragile, cargo which did
not require any special handling. 26
There is no absolute obligation on the part of a carrier to accept a cargo.
Where a common carrier accepts a cargo for shipment for valuable
consideration, it takes the risk of delivering it in good condition as when it
was loaded. And if the fact of improper packing is known to the carrier or its
personnel, or apparent upon observation but it accepts the goods
notwithstanding such condition, it is not relieved of liability for loss or injury
resulting therefrom. 27
TRANSPO | ASS3| 7
inspection,
ATTY. VINCO
And what results did those
follow-ups produce?
WITNESS
All they said (was) that the
document
was
being
processed, that they were
waiting for Atty. Paco to
report to the office and they
TRANSPO | ASS3| 8
ATTY. VINCO
And what answer did Atty.
Paco make after you have
reported back to him?
ATTY. VINCO
Who is this Atty. Paco?
WITNESS
WITNESS
ATTY. VINCO
How many times did you go
and see Atty. Paco regarding
the claim of your sister?
WITNESS
Yes, sir. I personally visited
Atty. Paco together with my
auntie who was a former PAL
employee.
WITNESS
I made one personal visit and
several follow-up calls. With
Atty. Paco, I made one phone
call but I made several phone
calls with his secretary or the
clerk at PAL cargo office and I
was trying to locate him but
unfortunately, he was always
out of his office. 31
TRANSPO | ASS3| 9
A Yes, sir.
ATTY. VINCO:
WITNESS:
A Yes, sir.
ATTY. VINCO:
Q And the Claim Officer happened to be Atty.
Paco?
WITNESS:
ATTY. VINCO:
A Yes, sir.
ATTY. VINCO:
Q And you know that the plaintiff thru her
authorized representative Concepcion Dio,
who is her sister had many times gone to
Atty. Paco, in connection with this claim of her
sister?
WITNESS:
A Yes, sir.
ATTY. VINCO:
Q As a matter of fact even when the
complaint was already filed here in Court the
claimant had continued to call about the
settlement of her claim with Atty. Paco, is
that correct?
xxx xxx xxx
WITNESS:
TRANSPO | ASS3| 10
substantial compliance with the requirement in the contract for the filing of a
formal claim.
All told, therefore, respondent appellate court did not err in ruling that the
provision on limited liability is not applicable in this case. We, however, note
in passing that while the facts and circumstances of this case do not call for
the direct application of the provisions of the Warsaw Convention, it should
be stressed that, indeed, recognition of the Warsaw Convention does not
preclude the operation of the Civil Code and other pertinent laws in the
determination of the extent of liability of the common carrier. 36
The Warsaw Convention, being a treaty to which the Philippines is a
signatory, is as much a part of Philippine law as the Civil Code, Code of
Commerce and other municipal special laws. 37 The provisions therein
contained, specifically on the limitation of carrier's liability, are operative in
the Philippines but only in appropriate situations.
Petitioner ascribes ultimate error in the award of moral and exemplary
damages and attorney's fees in favor of private respondent in that other than
the statement of the trial court that petitioner acted in bad faith in denying
private respondent's claim, which was affirmed by the Court of Appeals, there
is no evidence on record that the same is true. The denial of private
respondent's claim was supposedly in the honest belief that the same had
prescribed, there being no timely formal claim filed; and despite having been
given an opportunity to submit positive proof of the value of the damaged
microwave oven, no such proof was submitted. Petitioner insists that its
failure to deliver the oven in the condition in which it was shipped could
hardly be considered as amounting to bad faith. 38
Private respondent counters that petitioner's failure to deliver the microwave
oven in the condition in which it was received can be described as gross
negligence amounting to bad faith, on the further consideration that it failed
to prove that it exercised the extraordinary diligence required by law, and
that no explanation whatsoever was given as to why the front glass of the
oven was broken. 39
The trial court justified its award of actual, moral and exemplary damages,
and attorney's fees in favor of private respondent in this wise:
TRANSPO | ASS3| 11
It will be noted that petitioner never denied that the damage to the
microwave oven was sustained while the same was in its custody. The
possibility that said damage was due to causes beyond the control of PAL has
effectively been ruled out since the entire process in handling of the cargo
from the unloading thereof from the plane, the towing and transfer to the
PAL warehouse, the transfer to the Customs examination area, and its
release thereafter to the shipper was done almost exclusively by, and with
the intervention or, at the very least, under the direct supervision of a
responsible PAL personnel. 42
The very admissions of PAL, through Vicente Villaruz of its Import Section, as
follows:
ATTY. VINCO
So that, you now claim, Mr.
Witness, that from the time
the cargo was unloaded from
the plane until the time it
reaches the Customs counter
where it was inspected, all
the way, it was the PAL
personnel who did all these
things?
ATTY. VINCO
This
locator,
is
he
an
employee of the PAL or the
Customs?
WITNESS
He is a PAL employee.
43
WITNESS
Yes, however, there is also
what we call the Customs
storekeeper and the Customs
guard along with the cargo.
ATTY. VINCO
You made mention about a
locator?
WITNESS
Yes, sir.
TRANSPO | ASS3| 12
TRANSPO | ASS3| 13
May 8, 2009
Mindanao Terminal loaded and stowed the cargoes aboard the M/V Mistrau.
The vessel set sail from the port of Davao City and arrived at the port of
Inchon, Korea. It was then discovered upon discharge that some of the cargo
was in bad condition. The Marine Cargo Damage Surveyor of Incok Loss and
Average Adjuster of Korea, through its representative Byeong Yong Ahn
(Byeong), surveyed the extent of the damage of the shipment. In a survey
report, it was stated that 16,069 cartons of the banana shipment and 2,185
cartons of the pineapple shipment were so damaged that they no longer had
commercial value.5
Del Monte Produce filed a claim under the open cargo policy for the damages
to its shipment. McGees Marine Claims Insurance Adjuster evaluated the
claim and recommended that payment in the amount of $210,266.43 be
made. A check for the recommended amount was sent to Del Monte Produce;
the latter then issued a subrogation receipt 6 to Phoenix and McGee.
Phoenix and McGee instituted an action for damages 7 against Mindanao
Terminal in the Regional Trial Court (RTC) of Davao City, Branch 12. After
trial, the RTC,8 in a decision dated 20 October 1999, held that the only
participation of Mindanao Terminal was to load the cargoes on board the M/V
Mistrau under the direction and supervision of the ships officers, who would
not have accepted the cargoes on board the vessel and signed the foremans
report unless they were properly arranged and tightly secured to withstand
voyage across the open seas. Accordingly, Mindanao Terminal cannot be held
liable for whatever happened to the cargoes after it had loaded and stowed
them. Moreover, citing the survey report, it was found by the RTC that the
cargoes were damaged on account of a typhoon which M/V Mistrau had
encountered during the voyage. It was further held that Phoenix and McGee
had no cause of action against Mindanao Terminal because the latter, whose
services were contracted by Del Monte, a distinct corporation from Del Monte
Produce, had no contract with the assured Del Monte Produce. The RTC
dismissed the complaint and awarded the counterclaim of Mindanao Terminal
in the amount of P83,945.80 as actual damages and P100,000.00 as
attorneys fees.9 The actual damages were awarded as reimbursement for the
expenses incurred by Mindanao Terminals lawyer in attending the hearings in
the case wherein he had to travel all the way from Metro Manila to Davao
City.
Phoenix and McGee appealed to the Court of Appeals. The appellate court
reversed and set aside 10 the decision of the RTC in its 29 October 2003
decision. The same court ordered Mindanao Terminal to pay Phoenix and
TRANSPO | ASS3| 14
McGee "the total amount of $210,265.45 plus legal interest from the filing of
the complaint until fully paid and attorneys fees of 20% of the claim." 11 It
sustained Phoenixs and McGees argument that the damage in the cargoes
was the result of improper stowage by Mindanao Terminal. It imposed on
Mindanao Terminal, as the stevedore of the cargo, the duty to exercise
extraordinary diligence in loading and stowing the cargoes. It further held
that even with the absence of a contractual relationship between Mindanao
Terminal and Del Monte Produce, the cause of action of Phoenix and McGee
could be based on quasi-delict under Article 2176 of the Civil Code. 12
Mindanao Terminal filed a motion for reconsideration, 13 which the Court of
Appeals denied in its 26 February 200414 resolution. Hence, the present
petition for review.
Mindanao Terminal raises two issues in the case at bar, namely: whether it
was careless and negligent in the loading and stowage of the cargoes
onboard M/V Mistrau making it liable for damages; and, whether Phoenix and
McGee has a cause of action against Mindanao Terminal under Article 2176 of
the Civil Code on quasi-delict. To resolve the petition, three questions have to
be answered: first, whether Phoenix and McGee have a cause of action
against Mindanao Terminal; second, whether Mindanao Terminal, as a
stevedoring company, is under obligation to observe the same extraordinary
degree of diligence in the conduct of its business as required by law for
common carriers15 and warehousemen;16 and third, whether Mindanao
Terminal observed the degree of diligence required by law of a stevedoring
company.
We agree with the Court of Appeals that the complaint filed by Phoenix and
McGee against Mindanao Terminal, from which the present case has arisen,
states a cause of action. The present action is based on quasi-delict, arising
from the negligent and careless loading and stowing of the cargoes belonging
to Del Monte Produce. Even assuming that both Phoenix and McGee have
only been subrogated in the rights of Del Monte Produce, who is not a party
to the contract of service between Mindanao Terminal and Del Monte, still the
insurance carriers may have a cause of action in light of the Courts
consistent ruling that the act that breaks the contract may be also a tort. 17 In
fine, a liability for tort may arise even under a contract, where tort is that
which breaches the contract18 . In the present case, Phoenix and McGee are
not suing for damages for injuries arising from the breach of the contract of
service but from the alleged negligent manner by which Mindanao Terminal
handled the cargoes belonging to Del Monte Produce. Despite the absence of
TRANSPO | ASS3| 15
between the consignee or owner of shipped goods and the common carrier,
or that between a depositor and a warehouseman [22 ]. In the performance of
its obligations, an arrastre operator should observe the same degree of
diligence as that required of a common carrier and a
warehouseman as enunciated under Article 1733 of the Civil Code and
Section 3(b) of the Warehouse Receipts Law, respectively. Being the
custodian of the goods discharged from a vessel, an arrastre
operator's duty is to take good care of the goods and to turn them
over to the party entitled to their possession. (Emphasis supplied)23
There is a distinction between an arrastre and a stevedore. 24 Arrastre, a
Spanish word which refers to hauling of cargo, comprehends the handling of
cargo on the wharf or between the establishment of the consignee or shipper
and the ship's tackle. The responsibility of the arrastre operator lasts until the
delivery of the cargo to the consignee. The service is usually performed by
longshoremen. On the other hand, stevedoring refers to the handling of the
cargo in the holds of the vessel or between the ship's tackle and the holds of
the vessel. The responsibility of the stevedore ends upon the loading and
stowing of the cargo in the vessel.1avvphi1
It is not disputed that Mindanao Terminal was performing purely stevedoring
function while the private respondent in the Summa case was performing
arrastre function. In the present case, Mindanao Terminal, as a stevedore,
was only charged with the loading and stowing of the cargoes from the pier
to the ships cargo hold; it was never the custodian of the shipment of Del
Monte Produce. A stevedore is not a common carrier for it does not transport
goods or passengers; it is not akin to a warehouseman for it does not store
goods for profit. The loading and stowing of cargoes would not have a far
reaching public ramification as that of a common carrier and a
warehouseman; the public is adequately protected by our laws on contract
and on quasi-delict. The public policy considerations in legally imposing upon
a common carrier or a warehouseman a higher degree of diligence is not
present in a stevedoring outfit which mainly provides labor in loading and
stowing of cargoes for its clients.
In the third issue, Phoenix and McGee failed to prove by preponderance of
evidence25 that Mindanao Terminal had acted negligently. Where the evidence
on an issue of fact is in equipoise or there is any doubt on which side the
evidence preponderates the party having the burden of proof fails upon that
issue. That is to say, if the evidence touching a disputed fact is equally
balanced, or if it does not produce a just, rational belief of its existence, or if
it leaves the mind in a state of perplexity, the party holding the affirmative as
to such fact must fail.261avvphi1
We adopt the findings27 of the RTC,28 which are not disputed by Phoenix and
McGee. The Court of Appeals did not make any new findings of fact when it
reversed the decision of the trial court. The only participation of Mindanao
Terminal was to load the cargoes on board M/V Mistrau.29 It was not disputed
by Phoenix and McGee that the materials, such as ropes, pallets, and
cardboards, used in lashing and rigging the cargoes were all provided by M/V
Mistrau and these materials meets industry standard.30
It was further established that Mindanao Terminal loaded and stowed the
cargoes of Del Monte Produce aboard the M/V Mistrau in accordance with the
stowage plan, a guide for the area assignments of the goods in the vessels
hold, prepared by Del Monte Produce and the officers of M/V Mistrau.31 The
loading and stowing was done under the direction and supervision of the ship
officers. The vessels officer would order the closing of the hatches only if the
loading was done correctly after a final inspection. 32 The said ship officers
would not have accepted the cargoes on board the vessel if they were not
properly arranged and tightly secured to withstand the voyage in open seas.
They would order the stevedore to rectify any error in its loading and
stowing. A foremans report, as proof of work done on board the vessel, was
prepared by the checkers of Mindanao Terminal and concurred in by the Chief
Officer of M/V Mistrau after they were satisfied that the cargoes were
properly loaded.33
Phoenix and McGee relied heavily on the deposition of Byeong Yong
Ahn34 and on the survey report35 of the damage to the cargoes. Byeong,
whose testimony was refreshed by the survey report, 36 found that the cause
of the damage was improper stowage37 due to the manner the cargoes were
arranged such that there were no spaces between cartons, the use of
cardboards as support system, and the use of small rope to tie the cartons
together but not by the negligent conduct of Mindanao Terminal in loading
and stowing the cargoes. As admitted by Phoenix and McGee in their
Comment38 before us, the latter is merely a stevedoring company which was
tasked by Del Monte to load and stow the shipments of fresh banana and
pineapple of Del Monte Produce aboard the M/V Mistrau. How and where it
should load and stow a shipment in a vessel is wholly dependent on the
shipper and the officers of the vessel. In other words, the work of the
stevedore was under the supervision of the shipper and officers of the vessel.
Even the materials used for stowage, such as ropes, pallets, and cardboards,
TRANSPO | ASS3| 16
are provided for by the vessel. Even the survey report found that it was
because of the boisterous stormy weather due to the typhoon Seth, as
encountered by M/V Mistrau during its voyage, which caused the shipments
in the cargo hold to collapse, shift and bruise in extensive extent. 39 Even the
deposition of Byeong was not supported by the conclusion in the survey
report that:
CAUSE OF DAMAGE
xxx
From the above facts and our survey results, we are of the opinion that
damage occurred aboard the carrying vessel during sea transit, being caused
by ships heavy rolling and pitching under boisterous weather while
proceeding from 1600 hrs on 7th October to 0700 hrs on 12th October,
1994 as described in the sea protest.40
As it is clear that Mindanao Terminal had duly exercised the required degree
of diligence in loading and stowing the cargoes, which is the ordinary
diligence of a good father of a family, the grant of the petition is in order.
However, the Court finds no basis for the award of attorneys fees in favor of
petitioner.lawphil.net None of the circumstances enumerated in Article 2208
of the Civil Code exists. The present case is clearly not an unfounded civil
action against the plaintiff as there is no showing that it was instituted for the
mere purpose of vexation or injury. It is not sound public policy to set a
premium to the right to litigate where such right is exercised in good faith,
even if erroneously.41 Likewise, the RTC erred in awarding P83,945.80 actual
damages to Mindanao Terminal. Although actual expenses were incurred by
Mindanao Terminal in relation to the trial of this case in Davao City, the
lawyer of Mindanao Terminal incurred expenses for plane fare, hotel
accommodations and food, as well as other miscellaneous expenses, as he
attended the trials coming all the way from Manila. But there is no showing
that Phoenix and McGee made a false claim against Mindanao Terminal
resulting in the protracted trial of the case necessitating the incurrence of
expenditures.42
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals in CA-G.R. CV No. 66121 is SET ASIDE and the decision of the
Regional Trial Court of Davao City, Branch 12 in Civil Case No. 25,311.97 is
TRANSPO | ASS3| 17
February 5, 1996
SUMMA
INSURANCE
CORPORATION, petitioner,
vs.
COURT OF APPEALS and METRO PORT SERVICE, INC., respondents.
DECISION
PANGANIBAN, J.:
Is an arrastre operator legally liable for the loss of a shipment in its custody?
If so, what is the extent of its liability? These are the two questions that this
Court faced in this petition for review on certiorari of the Decision1 of the
Court of Appeals2 in CA-G.R. No. CV 04964 promulgated on April 27, 1988,
which affirmed with modification the decision of the Court of First Instance of
Manila in Civil Case No. 82-13988, ordering petitioner to pay private
respondent a sum of money, with legal interest, attorney's fees and the costs
of the suit.
The Facts
On November 22, 1981, the S/S "Galleon Sapphire", a vessel owned by the
National Galleon Shipping Corporation (NGSC), arrived at Pier 3, South
Harbor, Manila, carrying a shipment consigned to the order of Caterpillar Far
East Ltd. with Semirara Coal Corporation (Semirara) as "notify party". The
shipment, including a bundle of PC 8 U blades, was covered by marine
insurance under Certificate No. 82/012-FEZ issued by petitioner and Bill of
Lading No. SF/MLA 1014. The shipment was discharged from the vessel to
the custody of private respondent, formerly known as E. Razon, Inc., the
exclusive arrastre operator at the South Harbor. Accordingly, three goodorder cargo receipts were issued by NGSC, duly signed by the ship's checker
and a representative of private respondent.
On February 24, 1982, the forwarder, Sterling International Brokerage
Corporation, withdrew the shipment from the pier and loaded it on the barge
"Semirara 8104". The barge arrived at its port of destination, Semirara
Island, on March 9, 1982. When Semirara inspected the shipment at its
warehouse, it discovered that the bundle of PC8U blades was missing.
TRANSPO | ASS3| 18
On March 15, 1982, private respondent issued a short-landed certificatestating that the bundle of PC8U blades was already missing when it received
the shipment from the NGSC vessel. Semirara then filed with petitioner,
private respondent and NGSC its claim for P280,969.68, the alleged value of
the lost bundle.
On September 29, 1982, petitioner paid Semirara the invoice value of the
lost shipment. Semirara thereafter executed a release of claim and
subrogation receipt. Consequently, petitioner filed its claims with NGSC and
private respondent but it was unsuccessful.
Petitioner then filed a complaint (Civil Case No. 8213988) with the Regional
Trial Court, Branch XXIV, Manila, against NGSC and private respondent for
collection of a sum of money, damages and attorney's fees.
On August 2, 1984, the trial court rendered a decision absolving NGSC from
any liability but finding private respondent liable to petitioner. The dispositive
portion of the decision reads as follows:
PREMISES CONSIDERED, judgment is hereby rendered ordering
defendant Metro Port Service, Inc. to pay plaintiff Summa Insurance
Corporation the sum of P280,969.68 with legal interest from
November 22, 1982, the date of the filing of the complaint, until full
payment, and attorney's fees in the sum of P20,000.00, with costs of
suit.
The complaint as against defendant National Galleon Shipping
Corporation and the counterclaim interposed by said defendant are
hereby dismissed. (Rollo, p. 32).
In resolving the issue as to who had custody of the shipment when it was
lost, the trial court relied more on the good-order cargo receipts issued by
NGSC than on the short-landed certificate issued by private respondent. The
trial court held:
As between the aforementioned two documentary exhibits, the Court
is more inclined to give credence to the cargo receipts. Said cargo
receipts were signed by a checker of defendant NGSC and a
representative of Metro Port. It is safe to presume that the cargo
receipts accurately describe the quantity and condition of the
TRANSPO | ASS3| 19
On appeal, the Court of Appeals modified the decision of the trial court and
reduced private respondent's liability to P3,500.00 as follows 3:
WHEREFORE, the judgment appealed from is MODIFIED in that
defendant Metro Port Service, Inc., is ordered to pay plaintiff Summa
Insurance Corporation:
(1) the sum of P3,500.00, with legal interest from November 22,
1982, until fully paid; and
(2) the sum of P7,000.00, as and for attorney's fees.
Costs against defendant Metro Port Service, Inc.
Petitioner moved for reconsideration of the said decision but the Court of
Appeals denied the same. Hence, the instant petition.
The Issues
The issues brought by the parties could be stated as follows:
(1) Is the private respondent legally liable for the loss of the
shipment in question?
(2) If so, what is the extent of its liability?
The First Issue: Liability for Loss of Shipment
Petitioner was subrogated to the rights of the consignee. The relationship
therefore between the consignee and the arrastre operator must be
examined. This relationship is much akin to that existing between the
consignee or owner of shipped goods and the common carrier, or that
between a depositor and a warehouseman4. In the performance of its
obligations, an arrastre operator should observe the same degree of diligence
as that required of a common carrier and a warehouseman as enunciated
under Article 1733 of the Civil Code and Section 3(8) of the Warehouse
Receipts Law, respectively. Being the custodian of the goods discharged from
a vessel, an arrastre operator's duty is to take good care of the goods and to
turn them over to the party entitled to their possession.
In this case, it has been established that the shipment was lost while in the
custody of private respondent. We find private respondent liable for the loss.
This is an issue of fact determined by the trial court and respondent Court,
which is not reviewable in a petition under Rule 45 of the Rules of Court.
The Second Issue: Extent of Liability
In the performance of its job, an arrastre operator is bound by the
management contract it had executed with the Bureau of Customs. However,
a management contract, which is a sort of a stipulation pour autrui within the
meaning of Article 1311 of the Civil Code, is also binding on a consignee
because it is incorporated in the gate pass and delivery receipt which must be
presented by the consignee before delivery can be effected to 5 .The insurer,
as successor-in-interest of the consignee, is likewise bound by the
management contract6. Indeed, upon taking delivery of the cargo, a
consignee (and necessarily its successor-in-interest) tacitly accepts the
provisions of the management contract, including those which are intended
to limit the liability of one of the contracting parties, the arrastre operator.7
However, a consignee who does not avail of the services of the arrastre
operator is not bound by the management contract 8. Such an exception to
the rule does not obtain here as the consignee did in fact accept delivery of
the cargo from the arrastre operator.
Section 1, Article VI of the Management Contract between private respondent
and the Bureau of Customs9provides:
1. Responsibility and Liability for Losses and Damages The
CONTRACTOR shall, at its own expense handle all merchandise in the
piers and other designated places and at its own expense perform all
work undertaken by it hereunder diligently and in a skillful
workmanlike and efficient manner; that the CONTRACTOR shall be
solely responsible as an independent CONTRACTOR, and hereby
agrees to accept liability and to promptly pay to the steamship
company, consignee, consignor or other interested party or
parties for the loss, damage, or non-delivery of cargoes to the extent
of the actual invoice value of each package which in no case shall be
more than Three Thousand Five Hundred Pesos (P3,500.00) for each
package unless the value of the importation is otherwise specified or
manifested or communicated in writing together with the invoice
value and supported by a certified packing list to the CONTRACTOR
TRANSPO | ASS3| 20
TRANSPO | ASS3| 21
discharge from the vessel, ironically through petitioner's claim for the lost
package to which were attached the invoice and packing list. All told,
petitioner failed to convince the Court that the requirement of the
management contract had been complied with to entitle it to recover the
actual invoice value of the lost shipment.
Anent the attorney 's fees, we find the award to be proper considering that
the acts and omissions of private respondent have compelled petitioner to
litigate or incur expenses to protect its rights 15. However, as to the amount
of the award, we find no reason to re-examine the appellate court's
determination thereon in view of the amount of the principal obligation.
Otherwise, we would be disregarding the doctrine that discretion, when well
exercised, should not be disturbed.
WHEREFORE, the petition for review on certiorari is DENIED and the decision
of the Court of Appeals is AFFIRMED. Costs against petitioner.
SO ORDERED.
TRANSPO | ASS3| 22
FIREMAN'S
FUND
INSURANCE
CO., petitioner,
vs.
METRO PORT SERVICE, INC., (Formerly E. Razon, Inc.), respondent.
The shipment arrived at the port of Manila on June 3, 1979 and was turned
over complete and in good order condition to the arrastre operator E. Razon
Inc. (now Metro Port Service Inc. and referred to as the ARRASTRE).
There was heavy damage to the cargo as the parts of the machineries were
broken, denied, cracked and no longer useful for their purposes.
The value of the damage was estimated at P187,500.00 which amount was
paid by the petitioner insurance company to the consignee, Vulcan Industrial
and Mining Corporation.
The petitioner, under its subrogation rights, then filed a suit against Maersk
Line, Compania General de Tabacos (as agent) and E. Razon, Inc., for the
recovery of the amount it paid the assured under the covering insurance
policy. On October 26, 1980, the trial court rendered judgment, the decretal
portion of which reads as follows:
xxx xxx xxx
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants by ordering the latter to
pay, jointly and severally, the plaintiff the sum of
P187,500.00, with legal interest thereon from August 29,
1980 until full payment thereof.
Defendants are also ordered to pay, in solidum, the sum of
P10,000.00 as attorney's fees to the plaintiff, and to pay the
costs of this suit.
There shall be no award for exemplary damages in favor of
the plaintiff, for the reason that defendants are probably
TRANSPO | ASS3| 23
TRANSPO | ASS3| 24
In general, the nature of the work of an arrastre operator covers the handling
of cargoes at piers and wharves (Visayan Cebu Terminal Co., Inc. v.
Commissioner of Internal Revenue, 13 SCRA 357 [1965]). This is embodied
in the Management Contract drawn between the Bureau of Customs and E.
Razon Inc., as the Arrastre Operator. The latter agreed to bind itself, to wit:
CLAIMS AND LIABILITY FOR LOSSES AND DAMAGES
1. Responsibility and Liability for Losses and
Damages;
Claims. The CONTRACTOR shall, at its own expense handle
all merchandise in the piers and other designated places and
at its own expense perform all work undertaken by it
hereunder diligently and in skillful workmanlike and efficient
manner; That the CONTRACTOR shall be solely responsible as
an independent CONTRACTOR, and hereby agrees to accept
liability and to promptly pay to the s hip company, consignee,
consignor or other interested party or parties for the loss,
damage, or non-delivery of cargoes to the extent of the
actual invoice value of each package which in no case shall be
more than Three Thousand Five Hundred Pesos (P3,500.00)
for each package unless the value of the importation is
otherwise specified or manifested or communicated in writing
together with the invoice value and supported by a certified
packing list to the CONTRACTOR by the interested party or
parties before the discharge of the goods, as well as all
TRANSPO | ASS3| 25
TRANSPO | ASS3| 26
to the arrastre operator and in fact processed by its chief claims examiner
based on the documents submitted.
SO ORDERED.
TRANSPO | ASS3| 27
BENITO MACAM doing business under the name and style BEN-MAC
ENTERPRISES, petitioner,
vs.
COURT OF APPEALS, CHINA OCEAN SHIPPING CO., and/or WALLEM
PHILIPPINES SHIPPING, INC., respondents.
BELLOSILLO, J.:
On 4 April 1989 petitioner Benito Macam, doing business under the name and
style Ben-Mac Enterprises, shipped on board the vessel Nen Jiang, owned
and operated by respondent China Ocean Shipping Co., through local agent
respondent Wallem Philippines Shipping, Inc. (hereinafter WALLEM), 3,500
boxes of watermelons valued at US$5,950.00 covered by Bill of Lading No.
HKG 99012 and exported through Letter of Credit No. HK 1031/30 issued by
National Bank of Pakistan, Hongkong (hereinafter PAKISTAN BANK) and
1,611 boxes of fresh mangoes with a value of US$14,273.46 covered by Bill
of Lading No. HKG 99013 and exported through Letter of Credit No. HK
1032/30 also issued by PAKISTAN BANK. The Bills of Lading contained the
following pertinent provision: "One of the Bills of Lading must be surrendered
duly endorsed in exchange for the goods or delivery order.1 The shipment
was bound for Hongkong with PAKISTAN BANK as consignee and Great
Prospect Company of Kowloon, Hongkong (hereinafter GPC) as notify party.
On 6 April 1989, per letter of credit requirement, copies of the bills of lading
and commercial invoices were submitted to petitioner's depository bank,
Consolidated Banking Corporation (hereinafter SOLIDBANK), which paid
petitioner
in
advance
the
total
value
of
the
shipment
of
US$20,223.46.1wphi1.nt
Upon arrival in Hongkong, the shipment was delivered by respondent
WALLEM directly to GPC, not to PAKISTAN BANK, and without the required
bill of lading having been surrendered. Subsequently, GPC failed to pay
PAKISTAN BANK such that the latter, still in possession of the original bills of
lading, refused to pay petitioner through SOLIDBANK. Since SOLIDBANK
already pre-paid petitioner the value of the shipment, it demanded payment
from respondent WALLEM through five (5) letters but was refused. Petitioner
was thus allegedly constrained to return the amount involved to SOLIDBANK,
then demanded payment from respondent WALLEM in writing but to no avail.
TRANSPO | ASS3| 28
TRANSPO | ASS3| 29
The real issue is whether respondents are liable to petitioner for releasing the
goods to GPC without the bills of lading or bank guarantee.
Even going back to an event that transpired prior to the filing of the present
case or when petitioner wrote respondent WALLEM demanding payment of
the value of the cargoes, misdelivery of the cargoes did not come into the
picture
From the testimony of petitioner, we gather that he has been transacting with
GPC as buyer/importer for around two (2) or three (3) years already. When
mangoes and watermelons are in season, his shipment to GPC using the
facilities of respondents is twice or thrice a week. The goods are released to
GPC. It has been the practice of petitioner to request the shipping lines to
immediately release perishable cargoes such as watermelons and fresh
mangoes through telephone calls by himself or his "people." In transactions
covered by a letter of credit, bank guarantee is normally required by the
shipping lines prior to releasing the goods. But for buyers using telegraphic
transfers, petitioner dispenses with the bank guarantee because the goods
are already fully paid. In his several years of business relationship with GPC
and respondents, there was not a single instance when the bill of lading was
first presented before the release of the cargoes. He admitted the existence
of the telex of 3 July 1989 containing his request to deliver the shipment to
the consignee without presentation of the bill of lading 15 but not the telex of 5
April 1989 because he could not remember having made such request.
Consider pertinent portions of petitioner's testimony
Q: Are you aware of any document which would indicate or show that
your request to the defendant Wallem for the immediate release of
your fresh fruits, perishable goods, to Great Prospect without the
presentation of the original Bill of Lading?
A: Yes, by telegraphic transfer, which means that it is fully paid. And I
requested immediate release of the cargo because there was
immediate payment.
TRANSPO | ASS3| 30
Q: And you are referring, therefore, to this copy Telex release that
you mentioned where your Company's name appears Ben-Mac?
Atty. Hernandez: Just for the record, Your Honor, the witness
is showing a Bill of Lading referring to SKG (sic) 93023 and
93026 with Great Prospect Company.
Atty. Ventura:
A: Yes, actually, all the shippers partially request for the immediate
release of the goods when they are perishable. I thought Wallem
Shipping Lines is not neophyte in the business. As far as LC is
concerned, Bank guarantee is needed for the immediate release of
the goods . . . .15
Q: Mr. Witness, you testified that if is the practice of the shipper of
the perishable goods to ask the shipping lines to release immediately
the shipment. Is that correct?
A: Yes, sir.
Q: Now, it is also the practice of the shipper to allow the shipping
lines to release the perishable goods to the importer of goods without
a Bill of Lading or Bank guarantee?
A: No, it cannot be without the Bank Guarantee.
Q: You also testified you made this request through phone calls. Who
of you talked whenever you made such phone call?
A: Mostly I let my people to call, sir. (sic)
Q: So everytime you made a shipment on perishable goods you let
your people to call? (sic)
Atty. Hernandez:
A: Not everytime, sir.
Q: Can you tell us an instance when you will allow the release of the
perishable goods by the shipping lines to the importer without the
Bank guarantee and without the Bill of Lading?
TRANSPO | ASS3| 31
There is no mistake that the originals of the two (2) subject Bills of
Lading are still in the possession of the Pakistani Bank. The appealed
decision affirms this fact. Conformably, to implement the said telex
instruction, the delivery of the shipment must be to GPC, the notify
party or real importer/buyer of the goods and not the Pakistani Bank
since the latter can very well present the original Bills of Lading in its
possession. Likewise, if it were the Pakistani Bank to whom the
cargoes were to be strictly delivered, it will no longer be proper to
require a bank guarantee as a substitute for the Bill of Lading. To
construe otherwise will render meaningless the telex instruction.
After all, the cargoes consist of perishable fresh fruits and immediate
delivery thereof to the buyer/importer is essentially a factor to reckon
with. Besides, GPC is listed as one among the several consignees in
the telex (Exhibit 5-B) and the instruction in the telex was to arrange
delivery of A/M shipment (not any party) to respective consignees
without presentation of OB/L and bank guarantee . . . . 20
Apart from the foregoing obstacles to the success of petitioner's cause,
petitioner failed to substantiate his claim that he returned to SOLIDBANK the
full amount of the value of the cargoes. It is not far-fetched to entertain the
notion, as did respondent court, that he merely accommodated SOLIDBANK
in order to recover the cost of the shipped cargoes from respondents. We
note that it was SOLIDBANK which initially demanded payment from
respondents through five (5) letters. SOLIDBANK must have realized the
COMPANY,
and
C.F.
INC., plaintiff-appellee,
SHARP
&
COMPANY,
TRANSPO | ASS3| 32
terms and conditions 4 provided that these are not contrary to law, morals,
good customs, public order and public policy. 5
CUEVAS, J.:+.wph!1
This is an appeal taken directly to Us on certiorari from the decision of the
defunct Court of First Instance of Manila, finding defendants carrier and
agent, liable for the value of goods never delivered to plaintiff consignee. The
issue raised is a pure question of law, which is, the liability of the defendants,
now appellants, under the bill of lading covering the subject shipment.
The case arose from an importation made by plaintiff, now appellee, SAMAR
MINING COMPANY, INC., of one (1) crate Optima welded wedge wire sieves
through the M/S SCHWABENSTEIN a vessel owned by defendant-appellant
NORDEUTSCHER LLOYD, (represented in the Philippines by its agent, C.F.
SHARP & CO., INC.), which shipment is covered by Bill of Lading No. 18 duly
issued to consignee SAMAR MINING COMPANY, INC. Upon arrival of the
aforesaid vessel at the port of Manila, the aforementioned importation was
unloaded and delivered in good order and condition to the bonded warehouse
of AMCYL. 1 The goods were however never delivered to, nor received by, the
consignee at the port of destination Davao.
When the letters of complaint sent to defendants failed to elicit the desired
response, consignee herein appellee, filed a formal claim for P1,691.93, the
equivalent of $424.00 at the prevailing rate of exchange at that time, against
the former, but neither paid. Hence, the filing of the instant suit to enforce
payment. Defendants-appellants brought in AMCYL as third party defendant.
The trial court rendered judgment in favor of plaintiff, ordering defendants to
pay the amount of P1,691.93 plus attorney's fees and costs. However, the
Court stated that defendants may recoup whatever they may pay plaintiff by
enforcing the judgment against third party defendant AMCYL which had
earlier been declared in default. Only the defendants appealed from said
decision.
The issue at hand demands a close scrutiny of Bill of Lading No. 18 and its
various clauses and stipulations which should be examined in the light of
pertinent legal provisions and settled jurisprudence. This undertaking is not
only proper but necessary as well because of the nature of the bill of lading
which operates both as a receipt for the goods; and more importantly, as a
contract to transport and deliver the same as stipulated therein. 2 Being a
contract, it is the law between the parties thereto 3 who are bound by its
Bill of Lading No. 18 sets forth in page 2 thereof 6 that one (1) crate of
Optima welded wedge wire sieves was received by the carrier
NORDEUTSCHER LLOYD at the "port of loading" which is Bremen, Germany,
while the freight had been prepaid up to the port of destination or the "port
of discharge of goods in this case, Davao, the carrier undertook to transport
the goods in its vessel, M/S SCHWABENSTEIN only up to the "port of
discharge from ship-Manila. Thereafter, the goods were to be transshipped by
the carrier to the port of destination or "port of discharge of goods The
stipulation is plainly indicated on the face of the bill which contains the
following phrase printed below the space provided for the port of discharge
from ship", thus: t.hqw
if goods are to be transshipped at port of discharge, show
destination under the column for "description of contents" 7
As instructed above, the following words appeared typewritten under the
column for "description of contents": t.hqw
PORT
OF
DISCHARGE
FREIGHT PREPAID 8
OF
GOODS:
DAVAO
It is clear, then, that in discharging the goods from the ship at the port of
Manila, and delivering the same into the custody of AMCYL, the bonded
warehouse, appellants were acting in full accord with the contractual
stipulations contained in Bill of Lading No. 18. The delivery of the goods to
AMCYL was part of appellants' duty to transship the goods from Manila to
their port of destination-Davao. The word "transship" means: t.hqw
to transfer for further transportation from one ship or
conveyance to another 9
The extent of appellant carrier's responsibility and/or liability in the
transshipment of the goods in question are spelled out and delineated under
Section 1, paragraph 3 of Bill of Lading No. 18, to wit: t.hqw
The carrier shall not be liable in any capacity whatsoever for
any delay, loss or damage occurring before the goods enter
TRANSPO | ASS3| 33
The stipulations in the bill of lading in the PHOENIX case which are
substantially the same as the subject stipulations before Us, provides: t.
hqw
The carrier shall not be liable in any capacity whatsoever for
any loss or damage to the goods while the goods are not in
its actual custody. (Par. 2, last subpar.)
xxx xxx xxx
The carrier or master, in making arrangements with any
person for or in connection with all transshipping or
forwarding of the goods or the use of any means of
transportation or forwarding of goods not used or operated
by the carrier, shall be considered solely the agent of the
shipper and consignee and without any other responsibility
whatsoever or for the cost thereof ... (Par. 16). 12
Finding the above stipulations not contrary to law, morals, good customs,
public order or public policy, We sustained their validity 13 Applying said
stipulations as the law between the parties in the aforecited case, the Court
concluded that: t.hqw
... The short form Bill of Lading ( ) states in no uncertain
terms that the port of discharge of the cargo is Manila, but
that the same was to be transshipped beyond the port of
discharge to Davao City. Pursuant to the terms of the long
form Bill of Lading ( ), appellee's responsibility as a common
carrier ceased the moment the goods were unloaded in
Manila and in the matter of transshipment, appellee acted
merely as an agent of the shipper and consignee. ...
(Emphasis supplied) 14
Coming now to the case before Us, We hold, that by the authority of the
above pronouncements, and in conformity with the pertinent provisions of
the New Civil Code, Section 11 of Bill of Lading No. 18 and the third
paragraph of Section 1 thereof are valid stipulations between the parties
insofar as they exempt the carrier from liability for loss or damage to the
goods while the same are not in the latter's actual custody.
TRANSPO | ASS3| 34
The liability of the common carrier for the loss, destruction or deterioration of
goods transported from a foreign country to the Philippines is governed
primarily by the New Civil Code. 15 In all matters not regulated by said
Code, the rights and obligations of common carriers shall be governed by the
Code of Commerce and by special laws. 16 A careful perusal of the provisions
of the New Civil Code on common carriers (Section 4, Title VIII, Book IV)
directs our attention to Article 1736 thereof, which reads: t.hqw
Article 1736. The extraordinary responsibility of the common
carrier lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or
constructively, by the carrier to the consignee, or to the
person who has a right to receive them, without prejudice to
the provisions of article 1738.
Article 1738 referred to in the foregoing provision runs thus: t.hqw
Article 1738. The extraordinary liability of the common carrier
continues to be operative even during the time the goods are
stored in a warehouse of the carrier at the place of
destination, until the consignee has been advised of the
arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them.
There is no doubt that Art. 1738 finds no applicability to the instant case. The
said article contemplates a situation where the goods had already reached
their place of destination and are stored in the warehouse of the carrier. The
subject goods were still awaiting transshipment to their port of destination,
and were stored in the warehouse of a third party when last seen and/or
heard of. However, Article 1736 is applicable to the instant suit. Under said
article, the carrier may be relieved of the responsibility for loss or damage to
the goods upon actual or constructive delivery of the same by the carrier to
the consignee, or to the person who has a right to receive them. In sales,
actual delivery has been defined as the ceding of corporeal possession by the
seller, and the actual apprehension of corporeal possession by the buyer or
by some person authorized by him to receive the goods as his representative
for the purpose of custody or disposal. 17 By the same token, there is actual
delivery in contracts for the transport of goods when possession has been
turned over to the consignee or to his duly authorized agent and a
reasonable time is given him to remove the goods. 18 The court a quo found
that there was actual delivery to the consignee through its duly authorized
agent, the carrier.
It becomes necessary at this point to dissect the complex relationship that
had developed between appellant and appellee in the course of the
transactions that gave birth to the present suit. Two undertakings appeared
embodied and/or provided for in the Bill of Lading 19 in question. The first is
FOR THE TRANSPORT OF GOODS from Bremen, Germany to Manila. The
second, THE TRANSSHIPMENT OF THE SAME GOODS from Manila to Davao,
with appellant acting as agent of the consignee. 20 At the hiatus between
these two undertakings of appellant which is the moment when the subject
goods are discharged in Manila, its personality changes from that of carrier to
that of agent of the consignee. Thus, the character of appellant's possession
also changes, from possession in its own name as carrier, into possession in
the name of consignee as the latter's agent. Such being the case, there was,
in effect, actual delivery of the goods from appellant as carrier to the same
appellant as agent of the consignee. Upon such delivery, the appellant, as
erstwhile carrier, ceases to be responsible for any loss or damage that may
befall the goods from that point onwards. This is the full import of Article
1736, as applied to the case before Us.
But even as agent of the consignee, the appellant cannot be made
answerable for the value of the missing goods, It is true that the
transshipment of the goods, which was the object of the agency, was not
fully performed. However, appellant had commenced said performance, the
completion of which was aborted by circumstances beyond its control. An
agent who carries out the orders and instructions of the principal without
being guilty of negligence, deceit or fraud, cannot be held responsible for the
failure of the principal to accomplish the object of the agency, 21 This can be
gleaned from the following provisions of the New Civil Code on the
obligations of the agent: t.hqw
Article 1884. The agent is bound by his acceptance to carry
out the agency, and is liable for the damages which, through
his non-performance, the principal may suffer.
xxx xxx xxx
Article 1889. The agent shall be liable for damages if, there
being a conflict between his interests and those of the
principal, he should prefer his own.
TRANSPO | ASS3| 35