Compania Maritima v. Insurance Company of North America

Contract of carriage; When contract completed; Loading of cargo on carrier’s barge preparatory to loading on ship.—Where the shipper delivered the cargo to the carrier and the latter took possession thereof by placing it on a lighter or barge manned by its authorized employees, it is held that there existed a complete contract of carriage the consummation of which had already begun.Same; Same; Bill of lading not indispensable to contract.—A bill of lading is not indispensable for the creation of a contract of carriage.

Same; Same; Carrier’s liability for damage to cargo; When storm deemed to exist.—Winds of 11 miles per hour, although stronger than the average 4–6 miles per hour then prevailing in the port where the lighter sank on the night in question, cannot be classified as a storm. For according to Beaufort’s wind scale, a storm has wind velocities of from 64 to 75 miles per hour; and by Philippine Weather Bureau standards winds should have a velocity of from 55 to 74 miles per hour to be classified as a storm.

Same; Same; Implied admission by carrier of charges in waiving its right to have books of accounts of shipper produced in court.—The act of the carrier in waiving its right to have the books of account of the shipper presented in Court is tantamount to an admission that the statements contained therein concerning the charges the latter made for the loss of the damaged cargo are correct and their verification is not necessary, because its main defense was that it was not liable for the damage since there was no contract of carriage between it and the shipper and the loss caused, if any, was due to a fortuitous event.

Insurance; Right of insurer to sue carrier as assignee of shipper; Defect in insurance policy no defense.—An insurance company can sue the carrier under its insurance contract as assignee of the shipper, and the carrier cannot set up as a defense any defect in the insurance policy.

Same; Same; When proof of personality of foreign insurance company not important.—The question of the personality of a foreign insurance company to sue in this jurisdiction becomes of no importance where the carrier’s attorney admitted in open court that it is a foreign insurance company doing business in the Philippines with a personality to file the present action.

Lu Do v. Binamira

CONTRACT OF CARRIAGE; LlABILITY OF CARRIERS WHILE THE GOODS ARE IN THE CUSTODY OF CUSTOMS AUTHORITIES.—While delivery of the cargo to the customs authorities is not delivery to the consignee, or "to the person who has a right to receive them", contemplated in Article 1736 of the New Civil Code, because in such case the goods are still in the hands of the Government and the owner cannot exercise dominion over them, however the parties may agree to limit the liability of the carrier considering that the goods have still to go through the inspection of the customs authorities before they are actually turned over to the consignee. This is a situation where the carrier loses control of the goods because of a custom regulation and it is unfair that it be made responsible for any loss or damage that may be caused to the goods during the interregnum.

APL v. Klepper

1.COMMON CARRIERS; NATURE AND EXTENT OF RESPONSIBILITY—The responsibility of a common carrier is extraordinary and lasts from the time the goods are placed in its possession until they are delivered, actually or constructively, to the consignee or to the person who has a right to receive them. It can only be exempt therefrom for causes enumerated in Article 1734 of the New Civil Code.

2.ID.; BILL OF LADING; WHEN BINDING UPON CONSIGNEE ALTHOUGH NOT SIGNED BY HIM OR BY HIS AGENT.—Where the bill of lading provides that a shipper or consignee who accepts the bill becomes bound by all the stipulations contained therein, the said shipper or consignee cannot elude its provisions simply because they prejudice him and take advantage of those that are beneficial to him. In the case at bar, the fact that the shipper and consignee paid the corresponding freight on his goods, shows that he impliedly accepted the bill of lading which was issued in connection with his shipment. Hence, the same is binding upon him as if it had been actually signed by him or by any person in his behalf.

3.ID.; ID.; PROVISION IN CARRIAGE OF GOODS BY SEA ACT LIMITING CARRIER'S LIABILITY TO $500.00.—Article 1753 of the Civil Code provides that the law of the country to which the goods are to be transported shall govern the liability of the common carrier in case of loss, destruction or

deterioration. This means the law of the Philippines, or the Civil Code. Under Article 1766, "In all matters not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by special laws," and in the Civil Code there are provisions that govern said rights and obligations (Articles 1736, 1737 and 1738). Therefore, although Section 4(5) of the Carriage of Goods by Sea Act states that the carrier shall not be liable in an amount exceeding $ 500.00 per package unless the value of the goods had been declared by the shipper and inserted in the bill of lading, said section is merely suppletory to the provisions of the Civil Code.

Samar Mining v. Nordeutscher Lloyd

Contracts; Common Carriers; Bill of Lading both a receipt and a contract.—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. Being a contract, it is the law between the parties thereto, who are bound by its terms and conditions provided that these are not contrary to law, morals, good customs, public order and public policy.

Same; Same; A stipulation in the bill of lading exempting the carrier from liability for loss of goods not in its actual custody, i.e., after their discharge from the ship, is valid.—We find merit in appellants’ stand. The validity of stipulations 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 has been upheld by Us in PHOENIX ASSURANCE CO., LTD. vs. UNITED STATES LINES, 22 SCRA 674 (1968). Said case matches the present controversy not only as to the material facts but more importantly, as to the stipulations contained in the bill of lading concerned. As if to underline their awesome likeness, the goods in question in both cases were destined for Davao, but were discharged from ship in Manila, in accordance with their respective bill of lading.

Same; Same; Liability of international common carriers governed primarily by New Civil Code.—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. 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.

Same; Same; Art. 1738 of N.C.C. makes a carrier liable for loss of goods even after ship discharge only if such goods were deposited in a warehouse of the carrier.—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.

Same; Same; Art. 1736 of N.C.C. applies to case at bar. Said article relieves a carrier of responsibility upon actual or constructive delivery of goods to consignee.—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. 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. The court a quo found that there was actual delivery to the consignee through its duly authorized agent, the carrier.

Same; Same; Agency; Appellant’s liability as a common carrier was effective only for the transport of goods from Germany to Manila, the point of discharge. From Manila to Davao, upon transshipment of the same goods the carrier is transformed into an agent of the consignee and ceases to be liable as a carrier for loss or damage to goods transshipped.—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 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. 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.

Same; Same; Same; After a common carrier’s status has passed from that of carrier to that of agent of consignee, loss of goods in its hands for cause beyond its control and without its negligence being proved, relieves carrier of civil liability for such loss or damage.—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.

Same; Same; Same; Same.—The actions of appellant carrier and of its representative in the Philippines being in full faith with the lawful stipulations of Bill of Lading No. 18 and in conformity with the provisions of the New Civil Code on common carriers, agency and contracts, they incur no liability for the loss of the goods in question.

Eastern Shipping v. Court of Appeals

Common Carriers; Obligations; Presumption of Fault; When the goods shipped either are lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe that requisite diligence, and there need not be an express finding of negligence to hold it liable.—The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the

time the articles are surrendered to or unconditionally placed in the possession of, and received by, the carrier for transportation until delivered to, or until the lapse of a reasonable time for their acceptance by, the person entitled to receive them (Arts. 1736-1738, Civil Code; Ganzon vs. Court of Appeals, 161 SCRA 646; Kui Bai vs. Dollar Steamship Lines, 52 Phil. 863). When the goods shipped either are lost or arrive in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable (Art. 1735, Civil Code; Philippine National Railways vs. Court of Appeals, 139 SCRA 87; Metro Port Service vs. Court of Appeals, 131 SCRA 365). There are, of course, exceptional cases when such presumption of fault is not observed but these cases, enumerated in Article 1734 of the Civil Code, are exclusive, not one of which can be applied to this case.

Same; Same; Arrastre Operator; Carrier and arrastre operator liable in solidum for the proper delivery of the goods to the consignee.—The question of charging both the carrier and the arrastre operator with the obligation of properly delivering the goods to the consignee has, too, been passed upon by the Court. In Fireman’s Fund Insurance Co. vs. Metro Port Service, Inc. (182 SCRA 455), we have explained, in holding the carrier and the arrastre operator liable in solidum, thus: “The legal relationship between the consignee and the arrastre operator is akin to that of a depositor and warehouseman (Lua Kian v. Manila Railroad Co., et al., 19 SCRA 5 [1967]. The relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator (Northern Motors, Inc. v. Prince Line, et al., 107 Phil. 253 [1960]). Since it is the duty of the ARRASTRE to take good care of the goods that are in its custody and to deliver them in good condition to the consignee, such responsibility also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore charged with the obligation to deliver the goods in good condition to the consignee.”

Same; Same; Same; The Supreme Court is not implying, however, that the arrastre operator and the customs broker are themselves always and necessarily liable solidarily with the carrier, or vice-versa, nor that attendant facts in a given case may not vary the rule.—We do not, of course, imply by the above pronouncement that the arrastre operator and the customs broker are themselves always and necessarily liable solidarily with the carrier, or vice-versa, nor that attendant facts in a given case may not vary the rule. The instant petition has been brought solely by Eastern Shipping Lines which,

being the carrier and not having been able to rebut the presumption of fault, is, in any event, to be held liable in this particular case. A factual finding of both the court a quo and the appellate court, we take note, is that “there is sufficient evidence that the shipment sustained damage while in the successive possession of appellants” (the herein petitioner among them). Accordingly, the liability imposed on Eastern Shipping Lines, Inc., the sole petitioner in this case, is inevitable regardless of whether there are others solidarily liable with it.

Damages; Interest Rates; Rules of thumb for future guidance in the award of damages and interest rates.—The ostensible discord is not difficult to explain. The factual circumstances may have called for different applications, guided by the rule that the courts are vested with discretion, depending on the equities of each case, on the award of interest. Nonetheless, it may not be unwise, by way of clarification and reconciliation, to suggest the following rules of thumb for future guidance.

Same; Same; Same; When an obligation is breached, the contravenor can be held liable for damages.—When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on “Damages” of the Civil Code govern in determining the measure of recoverable damages.Same; Same; Same; Interests in the Concept of Actual and Compensatory Damages; In a loan or forbearance of money, the interest due should be that stipulated in writing, and in the absence thereof, the rate shall be 12% per annum.—With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows: 1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

Same; Same; Same; Same; In case of other obligations, the interest on the amount of damages may be imposed at the discretion of the court at the rate

of 6% per annum.—When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged. Same; Same; Same; Same; When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.—When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.

Eastern Shipping v. BPI / MS Insurance

Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; It is settled that in petitions for review on certiorari, only questions of law may be put in issue.—Well entrenched in this jurisdiction is the rule that factual questions may not be raised before this Court in a petition for review on certiorari as this Court is not a trier of facts. This is clearly stated in Section 1, Rule 45 of the 1997 Rules of Civil Procedure, as amended, which provides: SECTION 1. Filing of petition with Supreme Court.—A party desiring to appeal by certiorari from a judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the Regional Trial Court or other courts whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari. The petition shall raise only questions of law which must be distinctly set forth. Thus, it is settled that in petitions for review on certiorari, only questions of law may be put in issue. Questions of fact cannot be entertained.

Same; Same; Same; “Question of Law” and “Question of Fact,” Distinguished.—A question of law exists when the doubt or controversy concerns the correct application of law or jurisprudence to a certain set of facts, or when the issue does not call for an examination of the probative value of the evidence presented, the truth or falsehood of facts being admitted. A question of fact exists when the doubt or difference arises as to the truth or falsehood of facts or when the query invites calibration of the whole evidence considering mainly the credibility of the witnesses, the existence and relevancy of specific surrounding circumstances as well as their relation to each other and to the whole, and the probability of the situation.

Civil Law; Common Carriers; Extraordinary Diligence; It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier; 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.—Verily, it is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier. As hereinbefore found by the RTC and affirmed by the CA based on the evidence presented, the goods were damaged even before they were turned over to ATI. Such damage was even compounded by the negligent acts of petitioner and ATI which both mishandled the goods during the discharging operations. Thus, it bears stressing unto petitioner that common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods transported by them. Subject to certain exceptions enumerated under Article 1734 of the Civil Code, common carriers are responsible for the loss, destruction, or deterioration of the goods. 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. 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. That is, unless they prove that they exercised extraordinary diligence in transporting the goods. In order to avoid responsibility for any loss or damage, therefore, they have the burden of proving that they observed such high level of diligence.