Samar Mining Company, Inc. vs.

Nordeutscher Lloyd
132 SCRA 529 (1984)

Facts:

Samar Mining Company, Inc. (SMCI) imported one (1) crate Optima welded wedge wire sieves
from Germany, through a vessel owned by common carrier, Nordeutscher Lloyd, represented in
the Philippines by its agent, CF. Sharp & Co., Inc. which shipment is covered by Bill of Lading
No. 18 duly issued to consignee, SMCI.

Upon arrival of the vessel at the port of Manila, the goods were unloaded and delivered by the
carrier to the bonded warehouse of AMCYL where the goods were stored before its
transshipment to Davao, which was the agreed point of destination. However, the goods were
never transhipped to Davao hence, were not received by the consignee.

Consequently, SMCI filed an extrajudicial claim for the value of the goods against the carrier,
but was not paid. Hence, SMCI filed the instant suit to enforce such payment.

The trial court rendered a decision in favor of SMCI, ordering defendants to pay the value of the
goods.

Hence, this petition.

Issue:

W/N the petitioners are liable for the loss of the shipment.

Ruling:

No. 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.

Here, Article 1736 of the New Civil Code provisions on common carriers was applied by the
Supreme Court.

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.
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.

In finding that the appellant was not responsible for the loss of the goods since there was actual
delivery to the consignee through his duly authorized agent, who turned out to be
carrier-appellant herein, the Court ruled in this wise:

Under the bill of lading, the appellant-carrier assumed 2 undertakings:

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 appellants possession also changes, from possession in its own name
as carrier, into possession in the name of consignee as the latters 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 in this case.