Transportation Digests (c/o Marge) Set 3, for October 2, 2012

LU DO & LU YM CORPORATION vs BINAMIRA FACTS: Parties: Delta Photo Supply Company of NY - Supplier Lu Do and Lu Ym Corp Petitioners-DEFENDANT, Agent of Common Carrier Binamira Respondent, consignee Cebu Stevedoring Company Stevedore, tasked to unload cargo Visayan Cebu Terminal Company Inc arrastre operator of the port, appointed by the Bureau of Customs

Merchandise (photo supplies) shipped on board M/S Fernside at NY USA to be sent to Cebu During discharge in Cebu, the stevedore separated the good and bad cargo All cargo was received at the pier by the arrastre, double checked by both arrastre and terminal company Merchandise was not in the list of bad cargo so therefore, it was received in good condition Consignee discovers that the goods had signs of pilfirage upon delivery, surveyors assess missing supplies at P324.

ISSUE/S: Is the carrier responsible for the loss considering that it occurred after the shipment was DISCHARGED from the ship and placed in the possession and custody of customs authority? HELD: CA decision reversed, carrier is NOT LIABLE. CA made the wrong interpretation of the law and ignored stipulations in the Bill of Lading regarding limitation of liability while cargo is still under the carriers custody and control ONLY. There are very clear stipulations in the Bill of Lading quoted in the decision. - A common carrier is responsible for the loss, destruction or deterioration of the goods it assumes to carry from one place to another unless the same is due to any to any of the causes mentioned in Article 1734 on the new Civil Code, and that, if the goods are lost, destroyed or deteriorated, for causes other that those mentioned, the common carrier is presumed to have been at fault or to have acted negligently, unless it proves that it has observed extraordinary diligence in their care (Article 1735) and that this extraordinary liability lasts from the time the goods are placed in the possession of the carrier until they are delivered to the consignee, or "to the person who has the right to receive them" (Article 1736), but these provisions only apply when the loss, destruction or deterioration takes place while the goods are in the possession of the carrier, and not after it has lost control of them. The reason is obvious. While the goods are in its possession, it is but fair that it exercise extraordinary diligence in protecting them from damage, and if loss occurs, the law presumes that it was due to its fault or negligence. This is necessary to protect the interest the interest of the owner who is at its mercy. The situation changes after the goods are delivered to the consignee.

REGIONAL CHARTER LINES OF SG et al vs THE NETHERLANDS INSURANCE Co. FACTS: Parties: Regional Charter Lines DEFENDANT, Carrier, based in SG EDSA Shipping Agency Agent of RCL Netherlands Insurance insured the goods shipped, paid claims, subrogated RCL Temic Telefunken Microelectronices (Temic) Consignee U Freight forwarding agent based in SG contracted services of Eagle Lines Eagle Lines tasked by U Freight to transport cargo, contracted services of RCL (as a ship owner)

Epoxy Molding Compound (the merchandise) was to be shipped from SG to Manila. The merchandise is temperature sensitive thus it is refrigerated in transit at O degrees Celsius. Unloaded from the ship in good condition, refrigerator was working well. However, goods were damaged because temperature in the ref fluctuated to 33 degree C allegedly because of burnt condenser more of the ref container Temic claimed from Netherlands, Netherlands paid the insurance claim Netherlands filed a complaint for subrogation of insurance settlement against RCL RCL and agent EDSA Shipping denied any negligence in the shipment, and that there is no valid subrogation

ISSUE/S: W/N RCL and EDSA Shipping is liable as CC under the theory of presumption of negligence?

HELD: YES. SC held CC is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported. When the goods shipped are either lost or arrived 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. RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence required by law over the goods they transported. Indeed, there is sufficient evidence showing that the fluctuation of the temperature in the refrigerated container van, as recorded in the temperature chart, occurred after the cargo had been discharged from the vessel and was already under the custody of the arrastre operator, ICTSI. This evidence, however, does not disprove that the condenser fan which caused the fluctuation of the temperature in the refrigerated container was not damaged while the cargo was being unloaded from the ship. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier;RCL and EDSA Shipping failed to dispute this. BURDEN OF PROOF HAS SHIFTED TO THE SHIPPER.

ONG YIU vs CA et al FACTS: Parties: Ong Yiu Petitioner, lawyers and businessman PAL DEFENDANT, Carrier Yiu is a passenger of PAL, from Butuan to Cebu. He was going to Cebu for a trial. His checked-in luggage (maleta) contained documents and transcripts he needed as evidence for the trial. Upon arrival in Cebu, he realized his luggage was lost. Many attempts were made to recover the luggage and bring it from Butuan to Cebu. Long story short, however, he had to ask for postponment of hearing. Luggage was eventually recovered but it was already opened despite the lock and some items were missing (gifts to the parents in law and some documents and exhibits of sensitive nature). PALs ticket as stipulation at the back that in the event of loss, its liability is only limited to P100 unless passenger declares a high value IMPORTANT! CA held PAL is guilty of simple negligence only, no moral and exemplary damages

ISSUE/S: 1. W/N PAL as CC is guilty of simple negligence and NOT bad faith in the breach of its contract of transportation w Yiu? 2. W/N PALs liability is only limited to P100? RELEVANT ISSUE! HELD: 1. PAL has NOT acted in BAD FAITH. There was no gross negligence or fraud on its part. In the absence of a wrongful act or omission, petitioner is NOT entitled to moral and exemplary damages. 2. PALs liability is only limited. Passenger did NOT declare higher value or pay additional transportation charge. Art 1750 of CC (on limited liability)s conditions have been complied with. Stipulation is VALID. Even if petitioner has not signed the ticket, he is still bound by its provisions. A ticket is a CONTRACT OF ADHESION. Petitioner cannot recover excess amount.

SARKIES TOUR PHILS INC vs CA et al FACTS: Parties: Elino, Marisol and Fatima Fortades Respondents, Passengers Sarkies Tour DEFENDANT- petitioner, owner of bus

Fatima Fortades boarded the Sarkies bus from Manila to Legaspi They loaded 3 luggage at the belly of the bus containing optometry review materials and equipment and documents such as passport and US Visa and greencard The luggage was lost because the door to the cargo hold of the bus was apparently left opened. So the bags got lost in transit to Bicol The Fortades demanded the return of the luggage from Sarkies and also exhausted other means such as radio announcements and soliciting the help of the drivers of Victory Liner who take the same route. Since efforts were fruitless, after NINE MONTHS, the Fortades instituted a suit against Sarkies for recovery, claiming that carrier failed to exercise extraordinary diligence

ISSUE/S: W/N Sarkies as carrier is liable? HELD: YES! Petitioner claims that Fatima did not bring any piece of luggage with her, and even if she did, none was declared at the start of the trip. The documentary and testimonial evidence presented at the trial, however, established the contrary. In its letter dated October 1, 1984, Sarkies tacitly admitted its liability by apologizing to respondents and assuring them that efforts were being made to recover the lost items. Besides, the Fortades would not have gone through all the trouble in recovering items if the luggage was not really lost. Furthermore, other passengers had suffered a similar fate: Dr. Lita Samarista testified that petitioner offered her P1,000.00 for her lost baggage and she accepted it; Carleen Carullo-Magno lost her chemical engineering review materials, while her brother lost abaca products he was transporting to Bicol. Under the Civil Code, "(c)ommon 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," and this liability "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 person who has a right to receive them," unless the loss is due to any of the excepted causes under Article 1734 thereof. The cause of the loss in the case at bar was Sarkies negligence in not ensuring that the doors of the baggage compartment of its bus were securely fastened. As a result of this lack of care, almost all of the luggage was lost, to the prejudice of the paying passengers.