TOPIC: DUTIES OF COMMON CARRIER
MAERSKLINE petitioner,
vs.
COURT OF APPEALS AND EFREN V. CASTILLO,
doing business under the name and style of
Ethegal Laboratories, respondents.
G.R. No. 94761 May 17, 1993
Facts:
Petitioner Maersk Line is engaged in the
transportation of goods by sea, doing business in
the Philippines through its general agent Compania
General de Tabacos de Filipinas.
Private respondent Efren Castillo, on the other
hand, is the proprietor of Ethegal Laboratories, a
firm engaged in the manutacture of
pharmaceutical products.
On November 12, 1976, private respondent
ordered from Eli Lilly. Inc. of Puerto Rico through
its (Eli Lilly, Inc.'s) agent in the Philippines, Elanco
Products, 600,000 empty gelatin capsules for the
manufacture of his pharmaceutical products. The
capsules were placed in six (6) drums of 100,000
capsules each valued at US $1,668.71.
Through a Memorandum of Shipment, the shipper
Eli Lilly, Inc. of Puerto Rico advised private
respondent as consignee that the 600,000 empty
gelatin capsules in six (6) drums of 100,000
capsules each, were already shipped on board MV
"Anders Maerskline" under Voyage No. 7703 for
shipment to the Philippines via Oakland, California.
In said Memorandum, shipper Eli Lilly, Inc. specified
the date of arrival to be April 3, 1977.
For reasons unknown, said cargo of capsules were
mishipped and diverted to Richmond, Virginia, USA
and then transported back Oakland, Califorilia. The
goods finally arrived in the Philippines on June 10,
1977 or after two (2) months from the date
specified in the memorandum. As a consequence,
private respondent as consignee refused to take
delivery of the goods on account of its failure to
arrive on time.
Private respondent alleging gross negligence and
undue delay in the delivery of the goods, filed an
action before the court a quo for rescission of
contract with damages against petitioner and Eli
Lilly, Inc. as defendants.
Denying that it committed breach of contract,
petitioner alleged in its that answer that the
subject shipment was transported in accordance
with the provisions of the covering bill of lading
and that its liability under the law on
transportation of good attaches only in case of loss,
destruction or deterioration of the goods as
provided for in Article 1734 of Civil Code (Rollo, p.
16).
Defendant Eli Lilly, Inc., on the other hand, filed its
answer with compulsory and cross-claim. In its
cross-claim, it alleged that the delay in the arrival
of the subject merchandise was due solely to the
gross negligence of petitioner Maersk Line.
The trial court rendered a decision in favor of
Castillo hold that there was a breach in the
performance of their obligation by the defendant
Maersk Line consisting of their negligence to ship
the 6 drums of empty Gelatin Capsules which
under their own memorandum shipment would
arrive in the Philippines on April 3, 1977 which
under Art. 1170 of the New Civil Code, they stood
liable for damages.
On appeal, respondent court rendered its decision
dated August 1, 1990 affirming with modifications
the lower court's decision.
Issue: WON Maersk Line is liable for damages
resulting from delay in the delivery of the shipment
in the absence in the bill of lading of a stipulation
on the period of delivery.
Ruling:
Petitioner maintains that it cannot be held for
damages for the alleged delay in the delivery of the
600,000 empty gelatin capsules since it acted in
good faith and there was no special contract under
which the carrier undertook to deliver the
shipment on or before a specific date.
The bill of lading covering the subject shipment
among others, reads:
6. GENERAL
(1) The Carrier does not undertake that the goods
shall arive at the port of discharge or the place of
delivery at any particular time or to meet any
particular market or use and save as is provided in
clause 4 the Carrier shall in no circumstances be
liable for any direct, indirect or consequential loss
or damage caused by delay. If the Carrier should
nevertheless be held legally liable for any such
direct or indirect or consequential loss or damage
caused by delay, such liability shall in no event
exceed the freight paid for the transport covered
by this Bill of Lading.
It is not disputed that the aforequoted provision at
the back of the bill of lading, in fine print, is a
contract of adhesion. Generally, contracts of
adhesion are considered void since almost all the
provisions of these types of contracts are prepared
and drafted only by one party, usually the carrier .
The only participation left of the other party in
such a contract is the affixing of his signature
thereto, hence the term "Adhesion".
Nonetheless, settled is the rule that bills of lading
are contracts not entirely prohibited. One who
adheres to the contract is in reality free to reject it
in its entirety; if he adheres, he gives his consent
(Magellan Manufacturing Marketing Corporation v.
Court of Appeals, et al., 201 SCRA 102 [1991]).
However, the aforequoted ruling applies only if
such contracts will not create an absurd situation
as in the case at bar. The questioned provision in
the subject bill of lading has the effect of practically
leaving the date of arrival of the subject shipment
on the sole determination and will of the carrier.
While it is true that common carriers are not
obligated by law to carry and to deliver
merchandise, and persons are not vested with the
right to prompt delivery, unless such common
carriers previously assume the obligation to deliver
at a given date or time, delivery of shipment or
cargo should at least be made within a reasonable
time.
In Saludo, Jr. v. Court of Appeals (207 SCRA 498
[1992]) this Court held:
The oft-repeated rule regarding a carrier's liability
for delay is that in the absence of a special
contract, a carrier is not an insurer against delay in
transportation of goods. When a common carrier
undertakes to convey goods, the law implies a
contract that they shall be delivered at destination
within a reasonable time, in the absence, of any
agreement as to the time of delivery. But where a
carrier has made an express contract to transport
and deliver properly within a specified time, it is
bound to fulfill its contract and is liable for any
delay, no matter from what cause it may have
arisen. This result logically follows from the well-
settled rule that where the law creates a duty or
charge, and the default in himself, and has no
remedy over, then his own contract creates a duty
or charge upon himself, he is bound to make it
good notwithstanding any accident or delay by
inevitable necessity because he might have
provided against it by contract. Whether or not
there has been such an undertaking on the part of
the carrier is to be determined from the
circumstances surrounding the case and by
application of the ordinary rules for the
interpretation of contracts.
An examination of the subject bill of lading shows
that the subject shipment was estimated to arrive
in Manila on April 3, 1977. While there was no
special contract entered into by the parties
indicating the date of arrival of the subject
shipment, petitioner nevertheless, was very well
aware of the specific date when the goods were
expected to arrive as indicated in the bill of lading
itself. In this regard, there arises no need to
execute another contract for the purpose as it
would be a mere superfluity.
In the case before us, we find that a delay in the
delivery of the goods spanning a period of two (2)
months and seven (7) days falls was beyond the
realm of reasonableness. Described as gelatin
capsules for use in pharmaceutical products,
subject shipment was delivered to, and left in, the
possession and custody of petitioner-carrier for
transport to Manila via Oakland, California. But
through petitioner's negligence was mishipped to
Richmond, Virginia.
Petitioner's insitence that it cannot be held liable
for the delay finds no merit.
Mauro Ganzon v CA
FACTS: Gelacio > Ganzon (via Capt. Niza) > Lighter
Batman (common carrier) (loaded half)
November 28, 1956: Gelacio Tumambing (Gelacio)
contracted the services of of Mauro B. Ganzon to
haul 305 tons of scrap iron from Mariveles, Bataan,
to the port of Manila on board the light LCT
Batman
December 1, 1956: Gelacio delivered the scrap iron
to Filomeno Niza, captain of the lighter, for loading
which was actually begun on the same date by the
crew of the lighter under the captains supervisor.
When about half of the scrap iron was already
loaded, Mayor Jose Advincula of Mariveles, Bataan
arrived and demanded P5000 from Gelacio.
Upon resisting, the Mayor fired at Gelacio so he
had to be taken to the hospital. Loading of the
scrap iron was resumed.
December 4, 1956: Acting Mayor Basilio Rub (Rub),
accompanied by 3 policemen, ordered captain
Filomeno Niza and his crew to dump the scrap iron
where the lighter was docked
Later on Rub had taken custody of the scrap iron
RTC: in favor of Gelacio and against Ganzon
ISSUE: W/N Ganzon should be held liable under the
contract of carriage
HELD: YES. Petition is DENIED.
Ganzon thru his employees, actually received the
scraps is freely admitted. Pursuant to Art. 1736,
such extraordinary responsibility would cease only
upon the delivery, actual or constructive, by the
carrier to the consignee, or to the person who has
a right to receive them.
The fact that part of the shipment had not been
loaded on board the lighter did not impair the said
contract of transportation as the goods remained
in the custody and control of the carrier, albeit still
unloaded.
Failure to show that the loss of the scraps was due
to any of the following causes enumerated in
Article 1734 of the Civil Code, namely:
(1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act or omission of the shipper or owner of the
goods;
(4) The character of the goods or defects in the
packing or in the containers;
(5) Order or act of competent public authority.
Hence, the petitioner is presumed to have been at
fault or to have acted negligently.
By reason of this presumption, the court is not
even required to make an express finding of fault
or negligence before it could hold the petitioner
answerable for the breach of the contract of
carriage.
Exempted from any liability had he been
able to prove that he observed
extraordinary diligence in the vigilance over
the goods in his custody, according to all
the circumstances of the case, or that the
loss was due to an unforeseen event or
to force majeure. As it was, there was
hardly any attempt on the part of the
petitioner to prove that he exercised such
extraordinary diligence.
We cannot sustain the theory of caso fortuito -
"order or act of competent public authority"(Art.
1174 of the Civil Code) no authority or power of
the acting mayor to issue such an order was given
in evidence. Neither has it been shown that the
cargo of scrap iron belonged to the Municipality of
Mariveles. Ganzon was not duty bound to obey
the illegal order to dump into the sea the scrap
iron. Moreover, there is absence of sufficient proof
that the issuance of the same order was attended
with such force or intimidation as to completely
overpower the will of the petitioner's employees.
The mere difficulty in the fullfilment of the
obligation is not considered force majeure.
LOADSTAR SHIPPING VS. CA (315 SCRA 339, 1999)
Facts: On November 19, 1984, loadstar received on
board its M/V Cherokee bales of lawanit
hardwood, tilewood and Apitong Bolidenized for
shipment. The goods, amounting to P6,067, 178.
Were insured for the same amount with the Manila
Insurance Company against various risks including
Total Loss by Total Loss of the Vessel. On
November 20, 1984, on its way to Manila from the
port of Nasipit, Agusan Del Norte, the vessel, along
with its cargo, sank off Limasawa Island. As a result
of the total loss of its shipment, the consignee
made a claim with loadstar which, however,
ignored the same. As the insurer, MIC paid to the
insured in full settlement of its claim, and the latter
executed a subrogation receipt therefor. MIC
thereafter filed a complaint against loadstar
alleging that the sinking of the vessel was due to
fault and negligence of loadstar and its employees.
In its answer, Loadstar denied any liability
for the loss of the shippers goods and claimed that
the sinking of its vessel was due to force majeure.
The court a quo rendered judgment in favor of
MIC., prompting loadstar to elevate the matter to
the Court of Appeals, which however, agreed with
the trial court and affirmed its decision in toto. On
appeal, loadstar maintained that the vessel was a
private carrier because it was not issued a
Certificate of Public Convenience, it did not have a
regular trip or schedule nor a fixed route, and there
was only one shipper, one consignee for a special
crago.
Issue: Whether or not M/V Cherokee was a private
carrier so as to exempt it from the provisions
covering Common Carrier?
Held: Loadstar is a common carrier.
The Court held that LOADSTAR is a common
carrier. It is not necessary that the carrier be issued
a certificate of public convenience, and this public
character is not altered by the fact that the
carriage of the goods in question was periodic,
occasional, episodic or unscheduled. Further, the
bare fact that the vessel was carrying a particular
type of cargo for one shipper, which appears to be
purely co-incidental; it is no reason enough to
convert the vessel from a common to a private
carrier, especially where, as in this case, it was
shown that the vessel was also carrying
passengers.
Article 1732 also carefully avoids making
any distinction between a person or enterprise
offering transportation service on a regular or
scheduled basis and one offering such service on
an occasional, episodic or unscheduled basis.
Neither does Article 1732 distinguish between a
carrier offering its services to the "general public,"
i.e., the general community or population, and one
who offers services or solicits business only from a
narrow segment of the general population.
DE GUZMAN VS. COURT OF APPEALS (168 SCRA
612)
Facts: Cendena was a junk dealer and was engaged
in buying used bottles and scrap materials in
Pangasinan and brought these to Manila for resale.
He used two 6-wheeler trucks. On the return trip to
Pangasinan, he would load his vehicles with cargo
which various merchants wanted delivered to
Pangasinan. For that service, he charged freight
lower than regular rates. General Milk Co.
contacted with him for the hauling of 750 cartons
of milk. On the way to Pangasinan, one of the
trucks was hijacked by armed men who took with
them the truck and its cargo and kidnapped the
driver and his helper. Only 150 cartons of milk
were delivered. The Milk Co. sued to claim the
value of the lost merchandise based on an alleged
contract of carriage. Cendena denied that he was a
common carrier and contended that he could not
be liable for the loss it was due to force majeure.
The trial court ruled that he was a common carrier.
The CA reversed.
Issue: Whether or not Cendena is a common
carrier?
Held: Yes, Cendena is properly characterized as a
common carrier even though he merely
backhauled goods for other merchants, and even if
it was done on a periodic basis rather than on a
regular basis, and even if his principal occupation
was not the carriage of goods.
Article 1732 makes no distinction between one
whose principal business activity is the carrying of
persons or goods or both, and one who does such
carrying only as an ancillary activity. It also avoids
making a distinction between a person or
enterprise offering transportation services on a
regular or scheduled basis and one offering service
on an occasional, episodic or unscheduled basis.
Neither does it make a distinction between a
carrier offering its services to the general public
and one who offers services or solicits business
only from a narrow segment of population.
Bascos v. CA
Facts:
Rodolfo Cipriano, representing CIPTRADE, entered
into a hauling contract with Jibfair Shipping Agency
Corporation whereby the former bound itself to
haul the latters 2000m/tons of soya bean meal
from Manila to Calamba. CIPTRADE subcontracted
with petitioner Estrellita Bascos to transport and
deliver the 400 sacks of soya beans. Petitioner
failed to deliver the cargo, and as a consequence,
Cipriano paid Jibfair the amount of goods lost in
accordance with their contract. Cipriano demanded
reimbursement from petitioner but the latter
refused to pay. Cipriano filed a complaint for
breach of contract of carriage. Petitioner denied
that there was no contract of carriage since
CIPTRADE leased her cargo truck, and that the
hijacking was a force majeure. The trial court ruled
against petitioner.
Issues:
(1) Was petitioner a common carrier?
(2) Was the hijacking referred to a force majeure?
Held:
(1) Article 1732 of the Civil Code defines a common
carrier as "(a) person, corporation or firm, or
association engaged in the business of carrying or
transporting passengers or goods or both, by land,
water or air, for compensation, offering their
services to the public." The test to determine a
common carrier is "whether the given undertaking
is a part of the business engaged in by the carrier
which he has held out to the general public as his
occupation rather than the quantity or extent of
the business transacted." In this case, petitioner
herself has made the admission that she was in the
trucking business, offering her trucks to those with
cargo to move. Judicial admissions are conclusive
and no evidence is required to prove the same.
(2) Common carriers are obliged to observe
extraordinary diligence in the vigilance over the
goods transported by them. Accordingly, they are
presumed to have been at fault or to have acted
negligently if the goods are lost, destroyed or
deteriorated. There are very few instances when
the presumption of negligence does not attach and
these instances are enumerated in Article 1734. In
those cases where the presumption is applied, the
common carrier must prove that it exercised
extraordinary diligence in order to overcome the
presumption. The presumption of negligence was
raised against petitioner. It was petitioner's burden
to overcome it. Thus, contrary to her assertion,
private respondent need not introduce any
evidence to prove her negligence. Her own failure
to adduce sufficient proof of extraordinary
diligence made the presumption conclusive against
her.
EVERETT STEAMSHIP vs. CA
FACTS
Hernandez trading company imported three crates
of bus spare parts marked as Marco 12, Marco 13,
March 14 from its supplier Maruman trading
company.
Said crates were shipped from Japan to Manila on
noard the vessel owned by Everette Orient Lines.
Upon arrival in Manila, it was discovered that
Marco 14 was missing.
Hernandez makes a formal claim to Everette in an
amount of 1 mill ++ Yen, which is the amount of
the cargo lost.
However, Everett offers an amount of 100k
because it is the amount that was stipulated in its
Bill of Lading.
Hernandez files a case at the RTC of Caloocan, RTC
rules1 in favor of Hernandez holding Everett liable
for the amount of !mill ++ Yen.
1 Art. 1750. A contract fixing the sum
that may be recovered by the owner or shipper
for the loss, destruction or deterioration of the
goods is valid, if it is reasonable and just under
the circumstances, and has been fairly and
freely agreed upon.
THE CA affirmed the RTCs ruling and made an
additional observation that since Hernandez is not
a privy to the contract in the bill of lading ( the
contract was entered by Everett and Maruman
trading [shipper]), and so the 100k limit stipulated
will not bind Hernandez making Everett liable for
the full amount of 1mill ++ Yen.
ISSUE
Is Everett liable for the full amount or the amount
that was stipulated in the contract?- what was
stipulated in the contract
Is Hernandez a privy to the contract which says
that Petitioner is liable only for 100k? Yes
RULING
Controlling provisions for this issue would be 1749
and 1750 of the Civil Code. 2
In Sea Land Service, Inc. vs Intermediate Appellate
Court
That said stipulation is just and reasonable is
arguable from the fact that it echoes Art. 1750
itself in providing a limit to liability only if a greater
value is not declared for the shipment in the bill of
lading. To hold otherwise would amount to
questioning the justness and fairness of the law
It is required, however, that the contract must be reasonable and
just under the circumstances and has been fairly and freely agreed
upon.XXX
the Court is of the view that the requirements of said article have
not been met. The fact that those conditions are printed at the back
of the bill of lading in letters so small that they are hard to read
would not warrant the presumption that the plaintiff or its supplier
was aware of these conditions such that he had fairly and freely
agreed to these conditions. It can not be said that the plaintiff had
actually entered into a contract with the defendant, embodying the
conditions as printed at the back of the bill of lading that was issued
by the defendant to plaintiff.
2 ART. 1749. A stipulation that the common
carriers liability is limited to the value of the goods
appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding.
ART. 1750. A contract fixing the sum that may be
recovered by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been
freely and fairly agreed upon.
itself, and this the private respondent does not
pretend to do. But over and above that
consideration, the just and reasonable character of
such stipulation is implicit in it giving the shipper or
owner the option of avoiding accrual of liability
limitation by the simple and surely far from
onerous expedient of declaring the nature and
value of the shipment in the bill of lading
The clause of the contract goes:
The carrier shall not be liable for any loss of or any
damage to or in any connection with, goods in an
amount exceeding One Hundred Thousand Yen in
Japanese Currency (Y100,000.00) or its equivalent
in any other currency per package or customary
freight unit (whichever is least) unless the value of
the goods higher than this amount is declared in
writing by the shipper before receipt of the goods
by the carrier and inserted in the Bill of Lading and
extra freight is paid as required. (Emphasis
supplied)
The shipper, Maruman Trading, had the option to
declare a higher valuation if the value of its cargo
was higher than the limited liability of the carrier.
Considering that the shipper did not declare a
higher valuation, it had itself to blame for not
complying with the stipulations.
The trial courts ratiocination that private
respondent could not have fairly and freely
agreed to the limited liability clause in the bill of
lading because the said conditions were printed in
small letters does not make the bill of lading
invalid.
In Ong Yiu VS. CA the court said that
Contracts of adhesion wherein one party imposes
a ready-made form of contract on the other, as the
plane ticket in the case at bar, are contracts not
entirely prohibited
A contract limiting liability upon an agreed
valuation does not offend against the policy of the
law forbidding one from contracting against his
own negligence
The shipper, Maruman Trading, we assume, has
been extensively engaged in the trading business.
It cannot be said to be ignorant of the business
transactions it entered into involving the shipment
of its goods to its customers. The shipper could not
have known, or should know the stipulations in the
bill of lading and there it should have declared a
higher valuation of the goods shipped. Moreover,
Maruman Trading has not been heard to complain
that it has been deceived or rushed into agreeing
to ship the cargo in petitioners vessel.
Even if the consignee was not a signatory to the
contract of carriage between the shipper and the
carrier.
The consignee can still be bound by the contract.
private respondent (Hernandez) formally claimed
reimbursement for the missing goods from
petitioner and subsequently filed a case against the
latter based on the very same bill of lading, it
(private respondent) accepted the provisions of the
contract and thereby made itself a party thereto,
or at least has come to court to enforce it. Thus,
private respondent cannot now reject or disregard
the carriers limited liability stipulation in the bill of
lading. In other words, private respondent is
bound by the whole stipulations in the bill of lading
and must respect the same.
Summa Insurance vs. CA GR. No. 84680
Facts:
S/S "Galleon Sapphire", a vessel owned by the
National Galleon Shipping Corporation (NGSC),
arrived at Pier 3, South Harbor, Manila, carrying a
shipment consigned to the order of Caterpillar Far
East Ltd. with Semirara Coal Corporation (Semirara)
as "notify party". The shipment, including a bundle
of PC 8 U blades, was covered by marine issued by
petitioner and Bill of Lading. The shipment was
discharged from the vessel to the custody of
private respondent, formerly known as E. Razon,
Inc., the exclusive arrastre operator at the South
Harbor. Accordingly, three good-order cargo
receipts were issued by NGSC, duly signed by the
ship's checker and a representative of private
respondent.The forwarder, Sterling International
Brokerage Corporation, withdrew the shipment
from the pier and loaded it on the barge "Semirara
8104". The barge arrived at its port of destination,
Semirara Island, on Upon inspection, Semirara
discovered that the bundle of PC8U blades was
missing at its warehouse.Private respondent issued
a short-landed certificate-stating that the bundle of
PC8U blades was already missing when it received
the shipment from the NGSC vessel. Semirara then
filed with petitioner, private respondent and NGSC
its claim for P280, 969.68, the alleged value of the
lost bundle. Petitioner paid Semirara the invoice
value of the lost shipment. Semirara thereafter
executed a release of claim and subrogation
receipt. Consequently, petitioner filed its claims
with NGSC and private respondent but it was
unsuccessful. Petitioner then filed a complaint
against NGSC and private respondent for collection
of a sum of money, damages and attorney's fees.
The trial court rendered a decision absolving NGSC
from any liability but finding private respondent
liable to petitioner. On appeal, the Court of
Appeals modified the decision of the trial court and
reduced private respondent's liability.
Issue:
Whether or not the private respondent legally
liable for the loss of the shipment in question?
What is the extent of its liability?
Ruling:
Yes, SC finds the Respondent liable for the loss.
Petitioner was subrogated to the rights of the
consignee. The relationship between the petitioner
and the respondent is akin to that existing between
the consignee or owner of shipped goods and the
common carrier, or that between a depositor and a
warehouseman. In the performance of its
obligations, an arrastre operator should observe
the same degree of diligence as that required of a
common carrier and a warehouseman as
enunciated under Article 1733 of the Civil Code and
Section 3(8) of the Warehouse Receipts Law,
respectively. Being the custodian of the goods
discharged from a vessel, an arrastre operator's
duty is to take good care of the goods and to turn
them over to the party entitled to their possession.
In the performance of its job, an arrastre operator
is bound by the management contract it had
executed with the Bureau of Customs. However, a
management contract, which is a sort of a
stipulation pour autrui within the meaning of
Article 1311 of the Civil Code, is also binding on a
consignee because it is incorporated in the gate
pass and delivery receipt which must be presented
by the consignee before delivery can be effected
to .The insurer, as successor-in-interest of the
consignee, is likewise bound by the management
contract. Indeed, upon taking delivery of the cargo,
a consignee (and necessarily its successor-in-
interest) tacitly accepts the provisions of the
management contract, including those which are
intended to limit the liability of one of the
contracting parties, the arrastre operator.