8/10/2019 139. New Zealand Ins. Co. v. Adriana Choa Toy 97 Phil 646; 51 OG 5179

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139. New Zealand Ins. Co. v. Adriana Choa Toy 97 Phil 646; 51 OG 5179

FACTS:

A cargo of oats was consigned to Muller and Phipps (Manila) Ltd. The cargo was insured against all risks

by The New Zealand Insurance Co., Ltd. When the cargo was discharged several cartons which contained

the oats were in bad order. The consignee filed a claim against the insurer for the value of the damaged

goods which the latter paid in the amount of P18,148.69. The insurer as subrogee of the consignee sued

E. Razon, Inc. who was the arrastre operator. The insurer demanded reimbursement in the amount of

P17,025.87. The lower figure is due to the fact that the carrier responded for its share of the loss in the

sum of P1,121.02. E. Razon was ordered to pay. He appealed and the CA revewrsed the decision on the

ground of prescription.

ISSUE: W/N E. Razon is not liable due to prescription based on Art. 366 of the Code of Commerce? - NO

HELD:

There are two requisites before claim for damages under Art. 366 may be demanded: 1. Consignment of

goods through a common carrier, by a consignor in one place to a consignee in another place; and 2. The

delivery of the merchandise by the carrier to the consignee at the place of destination

In the instant case, the consignor is the branch office of Lee Teh & Co., Inc., at Catarman, Samar, which

placed the cargo on board the ship Jupiter, and the consignee, its main office at Manila. The lower court

found that the cargo never reached Manila, its destination, nor was it ever delivered to the consignee,

the office of the shipper in Manila, because the ship ran aground upon entering Laoang Bay, Samar on

the same day of the shipment. Such being the case, it follows that the aforesaid article 366 does not

have application because the cargo was never received by the consignee. Moreover, under the bill of

lading issued by the carrier, it was the letter's undertaking to bring the cargo to its destination

Manila,and deliver it to consignee, which undertaking was never complied with. The carrier,

therefore, breached its contract, and, as such, it forfeited its right to invoke in its favor the conditions

required by article 366.

Article 366 of the Commercial Code is limited to cases of claims for damages to goods actually turned

over by the carrier and received by the consignee, whether those damages be apparent from an

examination of the packages in which the goods are delivered, or of such character that the nature and

extend of the damage is not apparent until the packages are opened and the contents examined. Clearly

it has no application in cases wherein the goods entrusted to the carrier are not delivered by the carrier

to the consignee. In such cases there can be no question of a claim for damages suffered by the goods

while in transport, since the claim for damages arises exclusively out of the failure to make delivery.