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.