DOCKET NO / CASE NO: L-48264

DATE: February 21, 1980

PETITIONER: Switzerland General Insurance Company, Ltd.

RESPONDENT: Honorable Pedro A. Ramirez, Oyama Lines, Citadel Lines and Mabuhay Brokerage Co., Inc.

FACTS:

On December 24, 1975, the petitioner filed an admiralty case against Oyama Shipping Co., Ltd. and its agent Citadel Lines, Inc. through the petitioners agent F.E. Zuellig, Inc. The complaint alleged that on December 21, 1974, 60,000 bags of urea nitrogen were shipped from Ninama, Japan on board the S/S St. Lourdes, owned and operated by Citadel Lines, Inc. and insured by the petitioner for the sum of Php 9,319,105.00 against all risks. The shipment was discharged from the vessel S/S St. Lourdes shipside into lighters owned by Mabuhay Brokerage Company, Inc. but when the same was subsequently delivered to and acknowledged by the consignee, it was found out to have sustained losses and or damage amounting to Php 38,698.94. The amount was paid by petitioner insurance company to the consignee by virtue of which payment became subrogated to the rights of the latter.

ISSUE:

Whether or not Citadel Lines, Inc. may be held primarily liable for the loss/damage found to have been sustained by subject shipment while on board and / or still in the custody of the said vessel?

HELD:

YES. The Code of Commerce provides, among others that the ship agent shall also be liable for the indemnities in favor of third persons which arise from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt himself therefrom by abandoning the vessel with all her equipment and the freightage he may have earned during the voyage. Citadel Lines, Inc. as the ship agent is liable to the petitioner, solidarily with its principal Oyama Shipping Co, Ltd.Lessons Applicable:Bill of Lading (Transportation)Laws Applicable:Article 1736,Article 1738,Article 1884,Article 1889,Article 1892,Article 1909FACTS: Samar Mining Company, Inc. imported1 crate ofwelded wedge wire sieves shipped throughNordeutscher Lloyd Bill of Lading No. 18: transshipped at port of discharge:davao Section 1, paragraph 3 of Bill of Lading No. 18 The carrier shall not be liable in any capacity whatsoever for any delay, loss or damage occurring before the goods enter ship's tackle to be loaded or after the goods leave ship's tackle to be discharged, transshipped or forwarded ... Section 11: Whenever the carrier or m aster may deem it advisable or in any case where the goods are placed at carrier's disposal at or consigned to a point where the ship does not expect to load or discharge, the carrier or master may, without notice, forward the whole or any part of the goods before or after loading at the original port of shipment, ... This carrier, in making arrangements for any transshipping or forwarding vessels or means of transportation not operated by this carrier shall be considered solely the forwarding agent of the shipper and without any other responsibility whatsoever even though the freight for the whole transport has been collected by him. ... Pending or during forwarding or transshipping the carrier may store the goods ashore or afloat solely as agent of the shipper and at risk and expense of the goods and the carrier shall not be liable for detention nor responsible for the acts, neglect, delay or failure to act of anyone to whom the goods are entrusted or delivered for storage, handling or any service incidental thereto When the goods arrived in the port of Davao, it wasdelivered in good order and condition to the bonded warehouse of AMCYL but it was not delivered and received bySamar Mining Company, Inc. Samarfiled a claim againstNordeutscher and C.F. Sharp whobrought in AMCYL as third party defendant RTC: favored Samar Nordeutscher and C.F. Sharplaible but may enforce judgment against AMCYLISSUE: W/N thestipulations in bills of lading exempting the carrier from liability for loss or damage to the goods when the same are not in its actual custody is validHELD: YES. Reversed 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. - applicable 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. - no applicable sincearticle contemplates a situation where the goods had already reached their place of destination and are stored in the warehouse of the carrier 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. 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. Article 1892. The agent may appoint a substitute if the principal has not prohibited him from doing so; but he shall be responsible for the acts of the substitute:

(1) When he was not given the power to appoint one;

(2) When he was given such power but without designating the person and the person appointed was notoriously incompetent or insolvent Article 1909. The agent is responsible not only for fraud, but also for negligence which shall be judged with more or less rigor by the courts, according to whether the agency was or was not for a compensation. The records fail to reveal proof of negligence, deceit or fraud committed by appellant or by its representative in the Philippines. Neither is there any showing of notorious incompetence or insolvency on the part of AMCYT, which acted as appellant's substitute in storing the goods awaiting transshipment