1.(a)
What do you understand by the hypothecary nature of maritime law? (b) What is
the general rule concerning said principle? (c) What are the exceptions to the
rule?
Answer: The real and hypothecary nature of maritime law
simply means that the liability of the carrier in connection with losses
related to maritime contracts is confined to the vessel, which is hypothecated
for such obligations or which stands as the guaranty for their settlement. It
has its origin by reason of the conditions and risks attending maritime trade
in its earliest years when such trade was replete with innumerable and unknown
hazards since vessels had to go through largely uncharted waters to ply their
trade. It was designed to offset such adverse conditions and to encourage
people and entities to venture into maritime commerce despite the risks and the
prohibitive cost of shipbuilding. Thus, the liability of the vessel owner and
agent arising from the operation of such vessel were confined to the vessel
itself, its equipment, freight, and insurance, if any, which limitation served
to induce capitalists into effectively wagering their resources against the
consideration of the large profits attainable in the trade.x x xNonetheless, there
are exceptional circumstances wherein the ship agent could still be held
answerable despite the abandonment of the vessel, as where the loss or injury
was due to the fault of the shipowner
and the captain. The international rule is to the effect that the right of abandonment
of vessels, as a legal limitation of a shipowner's liability, does not apply to
cases where the injury or average was occasioned by the shipowner's own fault.[38] Likewise, the
shipowner may be held liable for injuries to passengers notwithstanding the
exclusively real and hypothecary nature of maritime law if fault can be
attributed to the shipowner x x x As a general rule, a ship owner's
liability is merely co-extensive with his interest in the vessel, except
where actual fault is attributable to the shipowner. Thus, as an exception to
the limited liability doctrine, a shipowner or ship agent may be held liable
for damages when the sinking of the vessel is attributable
to the actual fault or negligence of the shipowner
or
its
failure to ensure the seaworthiness of the vessel. X x x
The limited liability rule, however, is not without exceptions, namely:
(1)
where the injury or death to a passenger is due either to the fault of the
shipowner, or to the concurring negligence of the shipowner and the captain
(Manila Steamship Co., Inc. vs. Abdulhaman, supra);
(2) where the vessel is insured; and
(3) in workmen's compensation claims (Abueg
vs. San Diego, supra). In this case, there is nothing in the
records to show that the loss of the cargo was due to the fault of the private
respondents as shipowners, or to their concurrent negligence with the captain
of the vessel.
2. Petitioner is a duly licensed
copra dealer based at Puerta Galera, Oriental Mindoro, while private
respondents are the owners of the vessel, "M/V Luzviminda I," a
common carrier engaged in coastwise trade from the different ports of Oriental
Mindoro to the Port of Manila.
In
October 1977, petitioner loaded 1,000 sacks of copra, valued at P101,227.40, on
board the vessel "M/V Luzviminda I" for shipment from Puerta Galera,
Oriental Mindoro, to Manila. Said cargo, however, did not reach Manila
because somewhere between Cape Santiago and Calatagan, Batangas, the vessel
capsized and sank with all its cargo.
On
30 March 1979, petitioner instituted before the then Court of First Instance of
Oriental Mindoro, a Complaint for damages based on breach of contract of
carriage against private respondents (Civil Case No. R-3205).
In
their Answer, private respondents averred that even assuming that the alleged
cargo was truly loaded aboard their vessel, their liability had been
extinguished by reason of the total loss of said vessel.
Question: Who is correct on this matter: the
petitioner or respondent? Explain your answer.
Answer: In
sum, it will have to be held that since the ship agent’s or shipowner's
liability is merely co-extensive with his interest in the vessel such that a
total loss thereof results in its extinction. (Yangco vs. Laserna, supra),
and none of the exceptions to the rule on limited liability being present, the
liability of private respondents for the loss of the cargo of copra must be
deemed to have been extinguished. There is no showing that the vessel was
insured in this case. (CHUA YEK HONG, PETITIONER,
VS. INTERMEDIATE APPELLATE COURT, MARIANO GUNO, AND DOMINADOR OLIT,
RESPONDENTS. SECOND DIVISION[ G.R. No. 74811, September 30, 1988 ])
3. On July 18, 1990, petitioner entrusted for repair his Nissan pick-up car 1988 model to private respondent - which is engaged in the sale, distribution and repair of motor vehicles. Private respondent undertook to return the vehicle on July 21, 1990 fully serviced and supplied in accordance with the job contract. After petitioner paid in full the repair bill in the amount of
Questions: (a) Is carnapping a fortuitous event? (b) Can the repair shop be made liable for
the value of the car and pay damages? (c) What do you understand by “the
assumption of risk”? (d) Is this principle applicable in the case at bar?
Answer:
It is a not a defense for a repair shop of motor vehicles to escape liability
simply because the damage or loss of a thing lawfully placed in its possession
was due to carnapping. Carnapping per se cannot be considered as a
fortuitous event. The fact that a thing was unlawfully and forcefully taken
from another’s rightful possession, as in cases of carnapping, does not
automatically give rise to a fortuitous event. To be considered as such,
carnapping entails more than the mere forceful taking of another’s property. It
must be proved and established that the event was an act of God or was done
solely by third parties and that neither the claimant nor the person alleged to
be negligent has any participation.[9] In accordance with the
Rules of evidence, the burden of proving that the loss was due to a fortuitous
event rests on him who invokes it[10]- which in this case is
the private respondent. However, other than the police report of the alleged
carnapping incident, no other evidence was presented by private respondent to
the effect that the incident was not due to its fault. A police report of an
alleged crime, to which only private respondent is privy, does not suffice to
established the carnapping. Neither does it prove that there was no fault on
the part of private respondent notwithstanding the parties’ agreement at the
pre-trial that the car was carnapped. Carnapping does not foreclose the
possibility of fault or negligence on the part of private respondent.
Even assuming arguendo that carnapping was duly
established as a fortuitous event, still private respondent cannot escape
liability. Article 1165[11] of the New Civil Code
makes an obligor who is guilty of delay responsible even for a fortuitous event
until he has effected the delivery. In this case, private respondent was
already in delay as it was supposed to deliver petitioner’s car three (3) days
before it was lost. Petitioner’s agreement to the rescheduled delivery does not
defeat his claim as private respondent had already breached its obligation.
Moreover, such accession cannot be construed as waiver of petitioner’s right to
hold private respondent liable because the car was unusable and thus,
petitioner had no option but to leave it.
Assuming further that there was no delay, still
working against private respondent is the legal presumption under Article 1265
that its possession of the thing at the time it was lost was due to its fault.[12] This presumption is
reasonable since he who has the custody and care of the thing can easily
explain the circumstances of the loss. The vehicle owner has no duty to show
that the repair shop was at fault. All that petitioner needs to prove, as
claimant, is the simple fact that private respondent was in possession of the
vehicle at the time it was lost. In this case, private respondent’s possession
at the time of the loss is undisputed. Consequently, the burden shifts to the
possessor who needs to present controverting evidence sufficient enough to
overcome that presumption. Moreover, the exempting circumstances - earthquake,
flood, storm or other natural calamity - when the presumption of fault is not
applicable[13] do not concur in this
case. Accordingly, having failed to rebut the presumption and since the case
does not fall under the exceptions, private respondent is answerable for the
loss.
It must likewise be emphasized that pursuant to
Articles 1174 and 1262 of the New Civil Code, liability attaches even if the
loss was due to a fortuitous event if “the nature of the obligation requires
the assumption of risk”.[14] Carnapping is a normal
business risk for those
engaged in the repair of motor vehicles. For just as the owner is exposed to
that risk so is the
repair shop since the car was entrusted to it. That is why, repair shops are
required to first register with the Department of Trade and Industry (DTI)[15] and to secure an
insurance policy for the “shop covering the property entrusted by its customer
for repair, service or maintenance” as a pre-requisite for such
registration/accreditation.[16] Violation of this
statutory duty constitutes negligence per se.[17] Having taken custody of
the vehicle, private respondent is obliged not only to repair the vehicle but
must also provide the customer with some form of security for his property over
which he loses immediate control. An owner who cannot exercise the seven (7)
juses or attributes of ownership – the right to possess, to use and
enjoy, to abuse or consume, to accessories, to dispose or alienate, to recover
or vindicate and to the fruits -[18] is a crippled owner.
Failure of the repair shop to provide security to a motor vehicle owner would
leave the latter at the mercy of the former. Moreover, on the assumption that private respondent’s repair
business is duly registered, it presupposes that its shop is covered by
insurance from which it may recover the loss. If private respondent can recover
from its insurer, then it would be unjustly enriched if it will not compensate
petitioner to whom no fault can be attributed. Otherwise, if the shop is not
registered, then the presumption of negligence applies.
4. State
the formula for computing the net earning capacity.
living expenses),[53]
*Life expectancy = 2/3 (80
- age of the deceased)
5. In case a passenger dies by reason of the negligence of the driver what are the four possible damages that may be recovered by the heirs of the victim?
Answer:
ART. 2206. The amount of damages for death caused by a crime or quasi-delict shall
be at least three thousand pesos ( now fifty thousand pesos), even though there
may have been mitigating circumstances. In addition:(1) The defendant
shall be liable for the loss of the earning capacity of the deceased, and the indemnity shall be paid to the heirs of the
latter; such indemnity shall in every case be assessed and awarded by the
court, unless the deceased on account of permanent physical disability not
caused by the defendant, had no earning capacity at the time of his death;(2)
If the deceased was obliged to give support according to the provisions of
article 291, the recipient who is not an heir called to the decedent’s
inheritance by the law of testate or intestate succession, may demand support from the person causing the death, for a period not
exceeding five years, the exact duration to be fixed by the court;(3) The
spouse, legitimate and illegitimate descendants and ascendants of the deceased
may demand moral damages for mental anguish by reason of the death of the
deceased.
6. What do you mean by the doctrine
of “last clear chance”? When is it not applicable? What is its effect to a
liability?
Answer: The doctrine of last clear chance
applies to a situation where the plaintiff was guilty of prior or antecedent
negligence, but the defendant − who had the last fair chance to avoid the impending harm and failed
to do so − is made liable for all the consequences of the accident,
notwithstanding the prior negligence of the plaintiff.[39] However, the
doctrine does not apply where the party charged is required to act
instantaneously, and the injury cannot be avoided by the application of all means at
hand after the peril is or should have been discovered.[40]
7. Petitioner-spouses Samuel and
Chinita Parilla and their co-petitioner-son Deodato Parilla, as dealers[4]
of Pilipinas Shell Petroleum Corporation (Pilipinas Shell), have been in
possession of a parcel of land (the property) located at the poblacion of
Bantay, Ilocos Sur which was leased to it by respondent Dr. Prospero Pilar
under a 10-year Lease Agreement[5] entered into in 1990.When the
lease contract between Pilipinas Shell and respondent expired in 2000,
petitioners remained in possession of the property on which they built improvements
consisting of a billiard hall and a restaurant, maintained a sari-sari
store managed by Leonardo Dagdag, Josefina Dagdag and Edwin Pugal, and allowed
Flor Pelayo, Freddie Bringas and Edwin Pugal to use a portion thereof as
parking lot.[6]Despite demands to vacate, petitioners[7]
and the other occupants[8] remained in the property.Hence,
respondent who has been residing in the United States,[9] through
his attorney-in-fact Marivic Paz Padre, filed on February 4, 2002 a complaint
for ejectment before the Bantay MTC with prayer for the issuance of a writ of
preliminary injunction with damages[10] against petitioners and the
other occupants of the property.After trial, the MTC, by Decision of February
3, 2003, ordered herein petitioners and their co-defendants and all persons
claiming rights under them to vacate the property and to pay the
plaintiff-herein respondent the amount of P50,000.00 as reasonable compensation
for the use of the property and P10,000.00 as attorney's fees and to pay the
cost of suit. And it ordered the plaintiff-herein respondent to
reimburse defendants Samuel Parilla, Chinita Parilla and Deodato
Parilla the amount of Two Million Pesos (P2,000,000.00) representing the value
of the improvements introduced on the property.
QUESTION: Is the decision for
reimbursement correct? In you opinion, what should be the correct ruling on the
matter? What principle of law is applicable? Explain.
Answer: Petitioners' claim for reimbursement of the alleged
entire value of the improvements does not thus lie under Article 1678. Not even for one-half of such alleged
value, there being no substantial evidence, e.g., receipts or other
documentary evidence detailing costs of construction. Besides, by petitioners'
admission, of the structures they originally built — the billiard hall,
restaurant, sari-sari store and a parking lot, only the "bodega-like"
sari-sari store and the parking lot now exist.[27]
At all events, under Article 1678, it is the lessor who is given the option, upon termination of the lease contract, either to appropriate the useful improvements by paying one-half of their value at that time, or to allow the lessee to remove the improvements. This option solely belongs to the lessor as the law is explicit that "[s]hould the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby." It appears that the lessor has opted not to reimburse.
At all events, under Article 1678, it is the lessor who is given the option, upon termination of the lease contract, either to appropriate the useful improvements by paying one-half of their value at that time, or to allow the lessee to remove the improvements. This option solely belongs to the lessor as the law is explicit that "[s]hould the lessor refuse to reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer damage thereby." It appears that the lessor has opted not to reimburse.
8. What is the effect if the lessor refuses to pay the lessee one-half of
the value of the useful improvements introduced to a land leased?
Answer:The refusal of the
lessor to pay the lessee one-half of
the value of the useful improvements gives
rise to the right of removal.
9. Sometime
in 1956, Francisca Cardente, for and on behalf of her grandson, petitioner
Ignacio Cardente, who was then a minor, and now married to his co-petitioner,
purchased from Isidro Palanay one hectare of land. The property purchased
is a part of a 9.2656-hectare parcel of land covered by Original Certificate of
Title (O.C.T., for short) No. P-1380 in Palanay's name. Immediately after
the purchase, the Cardentes took possession of the land and planted various
crops and trees thereon. They have been in continuous possession ever
since, adverse to the whole world. Unfortunately, however, the private
document evidencing the sale of the
one-hectare lot to petitioner Ignacio Cardente was lost and never found despite
diligent efforts exerted to locate the same.
Some four years later, on August 18, 1960, Isidro Palanay
sold the entire property covered by O.C.T. No. P-1380, including the
one-hectare portion already sold to Cardente, this time to the private
respondents, Ruperto Rubin and his wife. The deed of sale was registered and a new title, Transfer
Certificate of Title (T.C.T., for short) No. 1173, was issued in favor of the
Rubin spouses. Notwithstanding the second sale,
or because of it, Isidro Palanay, with the written conforme of his wife,
Josepha de Palanay, on December 9, 1972, executed a public document in favor of
petitioner Ignacio Cardente confirming the sale
to him (Cardente) in 1956 of the one hectare portion. The deed of confirmation
likewise states that the subsequent vendee, respondent Ruperto Rubin, was
informed by Palanay of the first sale of
the one-hectare portion to Cardente.
By virtue of having the property titled in the name of
Ruperto Rubin, he now claims that he is the owner of the whole property in
question. Question: (a) Is the claim of Rubin correct? (b) Is this a case of
double sale? (c) In case it is, what principle of law will you apply regarding
double sale? Explain.
Answer: Admittedly, this case involves a double sale.
While the private respondents allegedly bought from Isidro Palanay on August
18, 1960 the entire property comprising 9.2656 hectares and covered by O.C.T.
No. P-1380, the petitioners, on the other hand, lay claim to one hectare
thereof which they undeniably purchased from the same vendor earlier, in
1956. The conflict, therefore, falls under, and can be resolved by,
Article 1544 of the Civil Code which sets the rules on double sales.
ART. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the person who may
have first taken possession thereof in good faith, if it should be movable
property.
Should it be immovable property, the ownership shall belong to
the person acquiring it who in good faith first recorded it in the Registry of Property.
Should there be no inscription, the ownership shall pertain to
the person who in good faith was first in the possession; and, in the absence thereof, to the person who presents the oldest title, provided there is good faith.
It is undisputed that the private respondents, the second
vendees, registered the sale in their
favor whereas the petitioners, the first buyers, did not. But mere
registration of the sale is not
enough. Good faith must concur with the registration. Bad faith
renders the registration nothing but an exercise in futility. The law and
jurisprudence are very clear on this score.
The heart of the problem is whether or not the private
respondents acted in good faith when they registered the deed of sale dated August 18, 1960 more than six
months later, on March 7, 1961. Inextricably, the inquiry must be
directed on the knowledge, or lack of it, of the previous sale of the one-hectare portion on the part of
the second buyers at the time of registration. The trial court found that
the second vendees had such knowledge.
It is true that good faith is always presumed while bad
faith must be proven by the party alleging it. In this case, however, viewed in the light of the
circumstances obtaining, we have no doubt that the private respondents'
presumed good faith has been sufficiently overcome and their bad faith amply
established.
The "Confirmation Of A Deed Of Absolute Sale Of A Portion Of A Registered Agricultural
Land" executed by the late Ignacio Palanay on December 9, 1972 and which
was exhibited in the trial court below, admitted the sale of the one hectare portion to the petitioners sometime in
1956. The same deed likewise explicitly stated that the "fact of the
previous sale, was well known and
acknowledged by Mr. Ruperto Rubin (the private respondent)." These recitals were further buttressed by Concepcion
Salubo, a daughter of Isidro Palanay, who testified that she knew of the previous
sale of the one-hectare portion to
petitioner Ignacio Cardente and that private respondent Ruperto Rubin was
properly informed of the said sale. On this regard, no ill-motive had been attributed to the
vendor Isidro Palanay and to his daughter Concepcion Salubo for testifying the
way they did -- against the private respondents. They were disinterested
persons who stood to gain nothing except, perhaps, the satisfaction of setting
the record straight, or, in the words of the seller, "for the purpose of
giving efficacy to the Deed of Sale I
made to Ignacio Cardente which was made in a private document x x x."
Further, the notorious and continuous possession and full
enjoyment by petitioners of the disputed one-hectare property long (four years)
before the private respondents purchased the same from Palanay bolsters the
petitioners' position. That possession would have been enough to arouse
the suspicion of the private respondents as to the ownership of the entire area
which they were about to purchase. Their failure to inquire and to
investigate the basis of the petitioners' actual occupation of the land forming
a substantial part of what they were buying militates against their posited
lack of knowledge of the first sale.
"A purchaser cannot close his eyes to facts which should put a reasonable
man upon his guard and then claim that he acted in good faith under the belief
that there was no defect in the title of the vendor." We have warned time and again that a buyer of real
property which is in the possession of persons other than the seller must be
wary and should investigate the rights of those in possession. Otherwise,
without such inquiry, the buyer can hardly be regarded as a buyer in good faith.
The private respondents' avowals that they had never
known of the prior sale until the issues
were joined at the trial court, for, before that, they merely tolerated the
continued presence of the original occupants, Francisca and Eugenia Cardente,
and Ignacio, in the premises, out of simple pity for the two old women, is too pat to be believed. For if these were so,
the reason why the private respondents' continued to tolerate the occupation by
the petitioners of the contested property even after the demise of the two old
women escapes us. Rubin's allegation that this was because they were
still in good terms with the petitioners is too lame an excuse to deserve even a scant
consideration. The private respondents' total lack of action against the
actual occupants of a good portion of the land described in their torrens title
can only be construed as acceptance on their part of the existence of the prior
sale and their resignation to the fact
that they did not own the one-hectare portion occupied by the
petitioners. Present these facts, the foisted ignorance of the
respondents as to the first sale is an
empty pretense. Their seventeen years of inaction and silence eloquently
depict a realization of lack of right.
10.The factual antecedents of the case are summarized by the Court of
Appeals in this wise:
“On June 13, 1990, CMC Trading A.G. shipped on board the MN ‘Anangel
Sky’ at Hamburg, Germany 242 coils of various Prime Cold Rolled Steel sheets
for transportation to Manila consigned to the Philippine Steel Trading
Corporation. On July 28, 1990, MN Anangel Sky arrived at the port of
Manila and, within the subsequent days, discharged the subject cargo.
Four (4) coils were found to be in bad order B.O. Tally sheet No. 154974.
Finding the four (4) coils in their damaged state to be unfit for the intended
purpose, the consignee Philippine Steel Trading Corporation declared the same
as total loss.
“Despite receipt of a formal demand, defendants-appellees refused to submit to the consignee’s claim. Consequently, plaintiff-appellant paid the consignee five hundred six thousand eighty six & 50/100 pesos (P506,086.50), and was subrogated to the latter’s rights and causes of action against defendants-appellees. Subsequently, plaintiff-appellant instituted this complaint for recovery of the amount paid by them, to the consignee as insured.
“Impugning the propriety of the suit against them, defendants-appellees imputed that the damage and/or loss was due to pre-shipment damage, to the inherent nature, vice or defect of the goods, or to perils, danger and accidents of the sea, or to insufficiency of packing thereof, or to the act or omission of the shipper of the goods or their representatives. In addition thereto, defendants-appellees argued that their liability, if there be any, should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws. Finally, defendants-appellees averred that, in any event, they exercised due diligence and foresight required by law to prevent any damage/loss to said shipment.
“Despite receipt of a formal demand, defendants-appellees refused to submit to the consignee’s claim. Consequently, plaintiff-appellant paid the consignee five hundred six thousand eighty six & 50/100 pesos (P506,086.50), and was subrogated to the latter’s rights and causes of action against defendants-appellees. Subsequently, plaintiff-appellant instituted this complaint for recovery of the amount paid by them, to the consignee as insured.
“Impugning the propriety of the suit against them, defendants-appellees imputed that the damage and/or loss was due to pre-shipment damage, to the inherent nature, vice or defect of the goods, or to perils, danger and accidents of the sea, or to insufficiency of packing thereof, or to the act or omission of the shipper of the goods or their representatives. In addition thereto, defendants-appellees argued that their liability, if there be any, should not exceed the limitations of liability provided for in the bill of lading and other pertinent laws. Finally, defendants-appellees averred that, in any event, they exercised due diligence and foresight required by law to prevent any damage/loss to said shipment.
Question: Is the argument of the defendants-appellees correct? Explain
your answer.
Answer: Well-settled is the rule that common carriers, from the
nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence and vigilance with respect to the safety of the
goods and the passengers they transport.[13] Thus, common carriers
are required to render service with the greatest skill and foresight and “to
use all reason[a]ble means to ascertain the nature and characteristics of the
goods tendered for shipment, and to exercise due care in the handling and
stowage, including such methods as their nature requires.”[14] The
extraordinary responsibility lasts from the time the goods are unconditionally
placed in the possession of and received for transportation by the carrier
until they are delivered, actually or constructively, to the consignee or to
the person who has a right to receive them.[15]
This strict requirement is justified by the fact that, without a hand or a voice in the preparation of such contract, the riding public enters into a contract of transportation with common carriers.[16] Even if it wants to, it cannot submit its own stipulations for their approval.[17] Hence, it merely adheres to the agreement prepared by 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.[18] That is, unless they prove that they exercised extraordinary diligence in transporting the goods.[19] In order to avoid responsibility for any loss or damage, therefore, they have the burden of proving that they observed such diligence.[20]
However, the presumption of fault or negligence will not arise[21] if the loss is due to any of the following causes:
This strict requirement is justified by the fact that, without a hand or a voice in the preparation of such contract, the riding public enters into a contract of transportation with common carriers.[16] Even if it wants to, it cannot submit its own stipulations for their approval.[17] Hence, it merely adheres to the agreement prepared by 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.[18] That is, unless they prove that they exercised extraordinary diligence in transporting the goods.[19] In order to avoid responsibility for any loss or damage, therefore, they have the burden of proving that they observed such diligence.[20]
However, the presumption of fault or negligence will not arise[21] if the loss is due to any of the following causes:
(1)
flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2)
an act of the public enemy in war, whether international or civil;
(3)
an act or omission of the shipper or owner of the goods; (4) the character of
the goods or defects in the packing or the container; or
(5) an order or act of competent public
authority.[22] This is a closed
list. If the cause of destruction, loss or deterioration is other than
the enumerated circumstances, then the carrier is liable therefor.[23]
Corollary to the foregoing, mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no adequate explanation is given as to how the deterioration, the loss or the destruction of the goods happened, the transporter shall be held responsible.[24]
x x x
Corollary to the foregoing, mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no adequate explanation is given as to how the deterioration, the loss or the destruction of the goods happened, the transporter shall be held responsible.[24]
x x x
A
bill of lading serves two functions. First, it is a receipt for
the goods shipped.[55] Second, it is a contract by which
three parties -- namely, the shipper, the carrier, and the consignee --
undertake specific responsibilities and assume stipulated obligations.[56]
In a nutshell, the acceptance of the bill of lading by the shipper and the
consignee, with full knowledge of its contents, gives rise to the presumption
that it constituted a perfected and binding contract.[57]
Further, a stipulation in the bill of lading limiting to a certain sum the common carrier’s liability for loss or destruction of a cargo -- unless the shipper or owner declares a greater value[58] -- is sanctioned by law.[59] There are, however, two conditions to be satisfied: (1) the contract is reasonable and just under the circumstances, and (2) it has been fairly and freely agreed upon by the parties.[60] The rationale for, this rule is to bind the shippers by their agreement to the value (maximum valuation) of their goods.[61]
It is to be noted, however, that the Civil Code does not limit the liability of the common carrier to a fixed amount per package.[62] In all matters not regulated by the Civil Code, the right and the obligations of common carriers shall be governed by the Code of Commerce and special laws.[63] Thus, the COGSA, which is suppletory to the provisions of the Civil Code, supplements the latter by establishing a statutory provision limiting the carrier’s liability in the absence of a shipper’s declaration of a higher value in the bill of lading.[64] The provisions on limited liability are as much a part of the bill of lading as though physically in it and as though placed there by agreement of the parties.[65]
In the case before us, there was no stipulation in the Bill of Lading[66] limiting the carrier’s liability. Neither did the shipper declare a higher valuation of the goods to be shipped. This fact notwithstanding, the insertion of the words “L/C No. 90/02447 cannot be the basis for petitioners’ liability.
First, a notation in the Bill of Lading which indicated the amount of the Letter of Credit obtained by the shipper for the importation of steel sheets did not effect a declaration of the value of the goods as required by the bill.[67] That notation was made only for the convenience of the shipper and the bank processing the Letter of Credit.[68]
Second, in Keng Hua Paper Products v. Court of Appeals,[69] we held that a bill of lading was separate from the Other Letter of Credit arrangements. We ruled thus:
Further, a stipulation in the bill of lading limiting to a certain sum the common carrier’s liability for loss or destruction of a cargo -- unless the shipper or owner declares a greater value[58] -- is sanctioned by law.[59] There are, however, two conditions to be satisfied: (1) the contract is reasonable and just under the circumstances, and (2) it has been fairly and freely agreed upon by the parties.[60] The rationale for, this rule is to bind the shippers by their agreement to the value (maximum valuation) of their goods.[61]
It is to be noted, however, that the Civil Code does not limit the liability of the common carrier to a fixed amount per package.[62] In all matters not regulated by the Civil Code, the right and the obligations of common carriers shall be governed by the Code of Commerce and special laws.[63] Thus, the COGSA, which is suppletory to the provisions of the Civil Code, supplements the latter by establishing a statutory provision limiting the carrier’s liability in the absence of a shipper’s declaration of a higher value in the bill of lading.[64] The provisions on limited liability are as much a part of the bill of lading as though physically in it and as though placed there by agreement of the parties.[65]
In the case before us, there was no stipulation in the Bill of Lading[66] limiting the carrier’s liability. Neither did the shipper declare a higher valuation of the goods to be shipped. This fact notwithstanding, the insertion of the words “L/C No. 90/02447 cannot be the basis for petitioners’ liability.
First, a notation in the Bill of Lading which indicated the amount of the Letter of Credit obtained by the shipper for the importation of steel sheets did not effect a declaration of the value of the goods as required by the bill.[67] That notation was made only for the convenience of the shipper and the bank processing the Letter of Credit.[68]
Second, in Keng Hua Paper Products v. Court of Appeals,[69] we held that a bill of lading was separate from the Other Letter of Credit arrangements. We ruled thus:
“(T)he contract of carriage, as stipulated in the bill
of lading in the present case, must be treated independently of the contract of
sale between the seller and the buyer, and the contract of issuance of a letter
of credit between the amount of goods described in the commercial invoice in
the contract of sale and the amount allowed in the letter of credit will not
affect the validity and enforceability of the contract of carriage as embodied
in the bill of lading. As the bank cannot be expected to look beyond the
documents presented to it by the seller pursuant to the letter of credit,
neither can the carrier be expected to go beyond the representations of the
shipper in the bill of lading and to verify their accuracy vis-à-vis the
commercial invoice and the letter of credit. Thus, the discrepancy between the
amount of goods indicated in the invoice and the amount in the bill of lading
cannot negate petitioner’s obligation to private respondent arising from the
contract of transportation.”[70]
In the light of the foregoing, petitioners’ liability
should be computed based on US$500 per package and not on the per metric ton
price declared in the Letter of Credit.[71] In Eastern Shipping
Lines, Inc. v. Intermediate Appellate Court[72] we explained the
meaning of package:
“When what would ordinarily be considered packages are
shipped in a container supplied by the carrier and the number of such units is
disclosed in the shipping documents, each of those units and not the container
constitutes the ‘package’ referred to in the liability limitation provision of
Carriage of Goods by Sea Act.”
Considering,
therefore, the ruling in Eastern Shipping Lines and the fact that the
Bill of Lading clearly disclosed the contents of the containers, the number of
units, as well as the nature of the steel sheets, the four damaged coils should
be considered as the shipping unit subject to the US$500 limitation.(BELGIAN OVERSEAS CHARTERING AND
SHIPPING N.V. AND JARDINE DAVIES TRANSPORT SERVICES, INC., PETITIONERS, VS.
PHILIPPINE FIRST INSURANCE CO., INC., RESPONDENT THIRD DIVISION[ G.R. No.
143133, June 05, 2002 ]
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