G.R. No.

L-18965

October 30, 1964

COMPAIA MARITIMA, petitioner, vs. INSURANCE COMPANY OF NORTH AMERICA, respondent. Rafael Dinglasan Ozaeta Gibbs & Ozaeta for respondent. BAUTISTA ANGELO, J.: Sometime in October, 1952, Macleod and Company of the Philippines contracted by telephone the services of the Compaia Maritima, a shipping corporation, for the shipment of 2,645 bales of hemp from the former's Sasa private pier at Davao City to Manila and for their subsequent transhipment to Boston, Massachusetts, U.S.A. on board the S.S. Steel Navigator. This oral contract was later on confirmed by a formal and written booking issued by Macleod's branch office in Sasa and handcarried to Compaia Maritima's branch office in Davao in compliance with which the latter sent to Macleod's private wharf LCT Nos. 1023 and 1025 on which the loading of the hemp was completed on October 29, 1952. These two lighters were manned each by a patron and an assistant patron. The patrons of both barges issued the corresponding carrier's receipts and that issued by the patron of Barge No. 1025 reads in part: Received in behalf of S.S. Bowline Knot in good order and condition from MACLEOD AND COMPANY OF PHILIPPINES, Sasa Davao, for transhipment at Manila onto S.S. Steel Navigator. FINAL DESTINATION: Boston. Thereafter, the two loaded barges left Macleod's wharf and proceeded to and moored at the government's marginal wharf in the same place to await the arrival of the S.S. Bowline Knot belonging to Compaia Maritima on which the hemp was to be loaded. During the night of October 29, 1952, or at the early hours of October 30, LCT No. 1025 sank, resulting in the damage or loss of 1,162 bales of hemp loaded therein. On October 30, 1952, Macleod promptly notified the carrier's main office in Manila and its branch in Davao advising it of its liability. The damaged hemp was brought to Odell Plantation in Madaum, Davao, for cleaning, washing, reconditioning, and redrying. During the period from November 1-15, 1952, the carrier's trucks and lighters hauled from Odell to Macleod at Sasa a total of 2,197.75 piculs of the reconditioned hemp out of the original cargo of 1,162 bales weighing 2,324 piculs which had a total value of 116,835.00. After reclassification, the value of the reconditioned hemp was reduced to P84,887.28, or a loss in value of P31,947.72. Adding to this last amount the sum of P8,863.30 representing Macleod's expenses in checking, grading, rebating, and other fees for washing, cleaning and redrying in the amount of P19.610.00, the total loss adds up to P60,421.02. All abaca shipments of Macleod, including the 1,162 bales loaded on the carrier's LCT No. 1025, were insured with the Insurance Company of North America against all losses and damages. In due time, Macleod filed a claim for the loss it suffered as above stated with said insurance company, and after the same had been processed, the sum of P64,018.55 was paid, which was noted down in a document which aside from being a receipt of the amount paid, was a subrogation agreement between Macleod and the insurance company wherein the former assigned to the latter its rights over the insured and damaged cargo. Having failed to recover from the carrier the sum of P60,421.02, which is the only amount supported by receipts, the insurance company instituted the present action on October 28, 1953. After trial, the court a quo rendered judgment ordering the carrier to pay the insurance company the sum of P60,421.02, with legal interest thereon from the date of the filing of the complaint until fully paid, and the costs. This judgment was affirmed by the Court of Appeals on December 14, 1960. Hence, this petition for review. The issues posed before us are: (1) Was there a contract of carriage between the carrier and the shipper even if the loss occurred when the hemp was loaded on a barge owned by the carrier which was loaded free of charge and was not actually loaded on the S.S. Bowline Knot which would carry the hemp to Manila and no bill of lading was issued therefore?; (2) Was the damage caused to the cargo or the sinking of the barge where it was loaded due to a fortuitous event, storm or natural disaster that would exempt the carrier from liability?; (3) Can respondent insurance company sue the carrier under its insurance contract as assignee of Macleod in spite of the fact that the liability of the carrier as insurer is not recognized in this jurisdiction?; (4) Has the Court of Appeals erred in regarding Exhibit NNN-1 as an implied admission by the carrier of the correctness and sufficiency of the shipper's statement of accounts contrary to the burden of proof rule?; and (5) Can the insurance company maintain this suit without proof of its personality to do so? 1. This issue should be answered in the affirmative. As found by the Court of Appeals, Macleod and Company contracted by telephone the services of petitioner to ship the hemp in question from the former's private pier at Sasa, Davao City, to Manila, to be subsequently transhipped to Boston, Massachusetts, U.S.A., which oral contract was later confirmed by a formal and written booking issued by the shipper's branch office, Davao City, in virtue of which the carrier sent two of its lighters to undertake the service. It also appears that the patrons of said lighters were employees of the carrier with due for petitioner.

authority to undertake the transportation and to sign the documents that may be necessary therefor so much so that the patron of LCT No. 1025 signed the receipt covering the cargo of hemp loaded therein as follows: . Received in behalf of S.S. Bowline Knot in good order and condition from MACLEOD AND COMPANY OF PHILIPPINES, Sasa Davao, for transhipment at Manila onto S.S. Steel Navigator. FINAL DESTINATION: Boston. The fact that the carrier sent its lighters free of charge to take the hemp from Macleod's wharf at Sasa preparatory to its loading onto the ship Bowline Knot does not in any way impair the contract of carriage already entered into between the carrier and the shipper, for that preparatory step is but part and parcel of said contract of carriage. The lighters were merely employed as the first step of the voyage, but once that step was taken and the hemp delivered to the carrier's employees, the rights and obligations of the parties attached thereby subjecting them to the principles and usages of the maritime law. In other words, here we have a complete contract of carriage the consummation of which has already begun: the shipper delivering the cargo to the carrier, and the latter taking possession thereof by placing it on a lighter manned by its authorized employees, under which Macleod became entitled to the privilege secured to him by law for its safe transportation and delivery, and the carrier to the full payment of its freight upon completion of the voyage. The receipt of goods by the carrier has been said to lie at the foundation of the contract to carry and deliver, and if actually no goods are received there can be no such contract. The liability and responsibility of the carrier under a contract for the carriage of goods commence on their actual delivery to, or receipt by, the carrier or an authorized agent. ... and delivery to a lighter in charge of a vessel for shipment on the vessel, where it is the custom to deliver in that way, is a good delivery and binds the vessel receiving the freight, the liability commencing at the time of delivery to the lighter. ... and, similarly, where there is a contract to carry goods from one port to another, and they cannot be loaded directly on the vessel and lighters are sent by the vessel to bring the goods to it, the lighters are for the time its substitutes, so that the bill of landing is applicable to the goods as soon as they are placed on the lighters. (80 C.J.S., p. 901, emphasis supplied) ... The test as to whether the relation of shipper and carrier had been established is, Had the control and possession of the cotton been completely surrendered by the shipper to the railroad company? Whenever the control and possession of goods passes to the carrier and nothing remains to be done by the shipper, then it can be said with certainty that the relation of shipper and carrier has been established. Railroad Co. v. Murphy, 60 Ark. 333, 30 S.W. 419, 46 A. St. Rep. 202; Pine Bluff & Arkansas River Ry. v. MaKenzie, 74 Ark. 100, 86 S.W. 834; Matthews & Hood v. St. L., I.M. & S.R. Co., 123 Ark. 365, 185 S.W. 461, L.R.A. 1916E, 1194. (W.F. Bogart & Co., et al. v. Wade, et al., 200 S.W. 148). The claim that there can be no contract of affreightment because the hemp was not actually loaded on the ship that was to take it from Davao City to Manila is of no moment, for, as already stated, the delivery of the hemp to the carrier's lighter is in line with the contract. In fact, the receipt signed by the patron of the lighter that carried the hemp stated that he was receiving the cargo "in behalf of S.S. Bowline Knot in good order and condition." On the other hand, the authorities are to the effect that a bill of lading is not indispensable for the creation of a contract of carriage. Bill of lading not indispensable to contract of carriage. As to the issuance of a bill of lading, although article 350 of the Code of Commerce provides that "the shipper as well as the carrier of merchandise or goods may mutua-lly demand that a bill of lading is not indispensable. As regards the form of the contract of carriage it can be said that provided that there is a meeting of the minds and from such meeting arise rights and obligations, there should be no limitations as to form." The bill of lading is not essential to the contract, although it may become obligatory by reason of the regulations of railroad companies, or as a condition imposed in the contract by the agreement of the parties themselves. The bill of lading is juridically a documentary proof of the stipulations and conditions agreed upon by both parties. (Del Viso, pp. 314-315; Robles vs. Santos, 44 O.G. 2268). In other words, the Code does not demand, as necessary requisite in the contract of transportation, the delivery of the bill of lading to the shipper, but gives right to both the carrier and the shipper to mutually demand of each other the delivery of said bill. (Sp. Sup. Ct. Decision, May 6, 1895). (Martin, Philippine Commercial Laws, Vol. II, Revised Edition, pp. 12-13) The liability of the carrier as common carrier begins with the actual delivery of the goods for transportation, and not merely with the formal execution of a receipt or bill of lading; the issuance of a bill of lading is not necessary to complete delivery and acceptance. Even where it is provided by statute that liability commences with the issuance of the bill of lading, actual delivery and acceptance are sufficient to bind the carrier. (13 C.J.S., p. 288) 2. Petitioner disclaims responsibility for the damage of the cargo in question shielding itself behind the claim of force majeure or storm which occurred on the night of October 29, 1952. But the evidence fails to bear this out. Rather, it shows that the mishap that caused the damage or loss was due, not to force majeure, but to lack of adequate

precautions or measures taken by the carrier to prevent the loss as may be inferred from the following findings of the Court of Appeals: Aside from the fact that, as admitted by appellant's own witness, the ill-fated barge had cracks on its bottom (pp. 18-19, t.s.n., Sept. 13, 1959) which admitted sea water in the same manner as rain entered "thru tank man-holes", according to the patron of LCT No. 1023 (exh. JJJ-4) conclusively showing that the barge was not seaworthy it should be noted that on the night of the nautical accident there was no storm, flood, or other natural disaster or calamity. Certainly, winds of 11 miles per hour, although stronger than the average 4.6 miles per hour then prevailing in Davao on October 29, 1952 (exh. 5), cannot be classified as storm. For according to Beaufort's wind scale, a storm has wind velocities of from 64 to 75 miles per hour; and by Philippine Weather Bureau standards winds should have a velocity of from 55 to 74 miles per hour in order to be classified as storm (Northern Assurance Co., Ltd. vs. Visayan Stevedore Transportation Co., CA-G.R. No. 23167-R, March 12, 1959). The Court of Appeals further added: "the report of R. J. del Pan & Co., Inc., marine surveyors, attributes the sinking of LCT No. 1025 to the 'non-water-tight conditions of various buoyancy compartments' (exh. JJJ); and this report finds confirmation on the above-mentioned admission of two witnesses for appellant concerning the cracks of the lighter's bottom and the entrance of the rain water 'thru manholes'." We are not prepared to dispute this finding of the Court of Appeals. 3. There can also be no doubt that the insurance company can recover from the carrier as assignee of the owner of the cargo for the insurance amount it paid to the latter under the insurance contract. And this is so because since the cargo that was damaged was insured with respondent company and the latter paid the amount represented by the loss, it is but fair that it be given the right to recover from the party responsible for the loss. The instant case, therefore, is not one between the insured and the insurer, but one between the shipper and the carrier, because the insurance company merely stepped into the shoes of the shipper. And since the shipper has a direct cause of action against the carrier on account of the damage of the cargo, no valid reason is seen why such action cannot be asserted or availed of by the insurance company as a subrogee of the shipper. Nor can the carrier set up as a defense any defect in the insurance policy not only because it is not a privy to it but also because it cannot avoid its liability to the shipper under the contract of carriage which binds it to pay any loss that may be caused to the cargo involved therein. Thus, we find fitting the following comments of the Court of Appeals: It was not imperative and necessary for the trial court to pass upon the question of whether or not the disputed abaca cargo was covered by Marine Open Cargo Policy No. MK-134 isued by appellee. Appellant was neither a party nor privy to this insurance contract, and therefore cannot avail itself of any defect in the policy which may constitute a valid reason for appellee, as the insurer, to reject the claim of Macleod, as the insured. Anyway, whatever defect the policy contained, if any, is deemed to have been waived by the subsequent payment of Macleod's claim by appellee. Besides, appellant is herein sued in its capacity as a common carrier, and appellee is suing as the assignee of the shipper pursuant to exhibit MM. Since, as above demonstrated, appellant is liable to Macleod and Company of the Philippines for the los or damage to the 1,162 bales of hemp after these were received in good order and condition by the patron of appellant's LCT No. 1025, it necessarily follows that appellant is likewise liable to appellee who, as assignee of Macleod, merely stepped into the shoes of and substituted the latter in demanding from appellant the payment for the loss and damage aforecited. 4. It should be recalled in connection with this issue that during the trial of this case the carrier asked the lower court to order the production of the books of accounts of the Odell Plantation containing the charges it made for the loss of the damaged hemp for verification of its accountants, but later it desisted therefrom on the claim that it finds their production no longer necessary. This desistance notwithstanding, the shipper however pre-sented other documents to prove the damage it suffered in connection with the cargo and on the strength thereof the court a quo ordered the carrier to pay the sum of P60,421.02. And after the Court of Appeals affirmed this award upon the theory that the desistance of the carrier from producing the books of accounts of Odell Plantation implies an admission of the correctness of the statements of accounts contained therein, petitioner now contends that the Court of Appeals erred in basing the affirmance of the award on such erroneous interpretation. There is reason to believe that the act of petitioner in waiving its right to have the books of accounts of Odell Plantation presented in court is tantamount to an admission that the statements contained therein are correct and their verification not necessary because its main defense here, as well as below, was that it is not liable for the loss because there was no contract of carriage between it and the shipper and the loss caused, if any, was due to a fortuitous event. Hence, under the carrier's theory, the correctness of the account representing the loss was not so material as would necessitate the presentation of the books in question. At any rate, even if the books of accounts were not produced, the correctness of the accounts cannot now be disputed for the same is supported by the original documents on which the entries in said books were based which were presented by the shipper as part of its evidence. And according to the Court of Appeals, these documents alone sufficiently establish the award of P60,412.02 made in favor of respondent. 5. Finally, with regard to the question concerning the personality of the insurance company to maintain this action, we find

the same of no importance, for the attorney himself of the carrier admitted in open court that it is a foreign corporation doing business in the Philippines with a personality to file the present action. WHEREFORE, the decision appealed from is affirmed, with costs against petitioner. G.R. No. L-9840 April 22, 1957 LU DO & LU YM CORPORATION, petitioner-defendant, vs. I. V. BINAMIRA, respondent-plaintiff. Ross, Selph, I. V. Binamira in his own behalf. BAUTISTA ANGELO, J.: On April 4, 1954, plaintiff filed an action in the Court of First Instance of Cebu against defendant to recover the sum of P324.63 as value of certain missing shipment, P150 as actual and compensatory damages, and P600 as moral and pecuniary damages. After trial, the court rendered judgment ordering defendant to pay plaintiff the sum of P216.84, with legal interest. On appeal, the Court of Appeals affirmed the judgment, hence the present petition for review. On August 10, 1951, the Delta Photo Supply Company of New York shipped on board the M/S "FERNSIDE" at New York, U.S.A., six cases of films and/or photographic supplies consigned to the order of respondent I. V. Binamira. For this shipment, Bill of Lading No. 29 was issued. The ship arrived at the port of Cebu on September 23, 1951 and discharged her cargo on September 23, and 24, 1951, including the shipment in question, placing it in the possession and custody of the arrastre operator of said port, the Visayan Cebu Terminal Company, Inc. Petitioner, as agent of the carrier, hired the Cebu Stevedoring Company, Inc. to unload its cargo. During the discharge, good order cargo was separated from the bad order cargo on board the ship, and a separate list of bad order cargo was prepared by Pascual Villamor, checker of the stevedoring company. All the cargo unloaded was received at the pier by the Visayan Cebu Terminal Company Inc, arrastre operator of the port. This terminal company had also its own checker, Romeo Quijano, who also recorded and noted down the good cargo from the bad one. The shipment in question, was not included in the report of bad order cargo of both checkers, indicating that it was discharged from the, ship in good order and condition. On September 26, 1951, three days after the goods were unloaded from the ship, respondent took delivery of his six cases of photographic supplies from the arrastre operator. He discovered that the cases showed signs of pilferage and, consequently, he hired marine surveyors, R. J. del Pan & Company, Inc., to examine them. The surveyors examined the cases and made a physical count of their contents in the presence of representatives of petitioner, respondent and the stevedoring company. The surveyors examined the cases and made a physical count of their contents in the presence of representatives of petitioner, respondent and the stevedoring company. The finding of the surveyors showed that some films and photographic supplies were missing valued at P324.63. It appears from the evidence that the six cases of films and photographic supplies were discharged from the ship at the port of Cebu by the stevedoring company hired by petitioner as agent of the carrier. All the unloaded cargo, including the shipment in question, was received by the Visayan Cebu Terminal Company Inc., the arrastre operator appointed by the Bureau of Customs. It also appears that during the discharge, the cargo was checked both by the stevedoring company hired by petitioner as well as by the arrastre operator of the port, and the shipment in question, when discharged from the ship, was found to be in good order and condition. But after it was delivered to respondent three days later, the same was examined by a marine surveyor who found that some films and supplies were missing valued at P324.63. The question now to be considered is: Is the carrier responsible for the loss considering that the same occurred after the shipment was discharged from the ship and placed in the possession and custody of the customs authorities? The Court of Appeals found for the affirmative, making on this point the following comment: In this jurisdiction, a common carrier has the legal duty to deliver goods to a consignee in the same condition in which it received them. Except where the loss, destruction or deterioration of the merchandise was due to any of the cases enumerated in Article 1734 of the new Civil Code, a carrier is presumed to have been at fault and to have acted negligently, unless it could prove that it observed extraordinary diligence in the care and handling of the goods (Article 1735, supra). Such presumption and the liability of the carrier attach until the goods are delivered actually or constructively, to the consignee, or to the person who has a right to receive them (Article 1736, supra), and we believe delivery to the customs authorities is not the delivery contemplated by Article 1736, supra, in connection with second paragraph of Article 1498, supra, because, in such a case, the goods are then still in the hands of the Government and their owner could not exercise dominion whatever over them until the duties are paid. In the case at bar, the presumption against the carrier, represented appellant as its agent, has not been successfully rebutted. Carrascoso and Janda for petitioner.

It is now contended that the Court of Appeals erred in its finding not only because it made wrong interpretation of the law on the matter, but also because it ignored the provisions of the bill of lading covering the shipment wherein it was stipulated that the responsibility of the carrier is limited only to losses that may occur while the cargo is still under its custody and control. We believe this contention is well taken. It is true that, as a rule, 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, Idem.), 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, Idem.), 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. While we agree with the Court of Appeals that while delivery of the cargo to the consignee, or to the person who has a right to receive them", contemplated in Article 1736, because in such case the goods are still in the hands of the Government and the owner cannot exercise dominion over them, we believe however that the parties may agree to limit the liability of the carrier considering that the goods have still to through the inspection of the customs authorities before they are actually turned over to the consignee. This is a situation where we may say that the carrier losses control of the goods because of a custom regulation and it is unfair that it be made responsible for what may happen during the interregnum. And this is precisely what was done by the parties herein. In the bill of lading that was issued covering the shipment in question, both the carrier and the consignee have stipulated to limit the responsibility of the carrier for the loss or damage that may because to the goods before they are actually delivered by insert in therein the following provisions: 1. . . . The Carrier shall not be liable in any capacity whatsoever for any delay, nondelivery or misdelivery, or loss of or damage to the goods occurring while the goods are not in the actual custody of the Carrier. . . . (Emphasis ours.) (Paragraph 1, Exhibit "1") 2. . . . The responsibility of the Carrier in any capacity shall altogether cease and the goods shall be considered to be delivered and at their own risk and expense in every respect when taken into the custody of customs or other authorities. The Carrier shall not be required to give any notification of disposition of the goods. . . . (Emphasis ours.) (Paragraph 12, Exhibit "1") 3. Any provisions herein to the contrary notwithstanding, goods may be . . . by Carrier at ship's tackle . . . and delivery beyond ship's tackle shall been tirely at the option of the Carrier and solely at the expense of the shipper or consignee. (Paragraph 22, Exhibit "1") It therefore appears clear that the carrier does not assume liability for any loss or damage to the goods once they have been "taken into the custody of customs or other authorities", or when they have been delivered at ship's tackle. These stipulations are clear. They have been adopted precisely to mitigate the responsibility of the carrier considering the present law on the matter, and we find nothing therein that is contrary to morals or public policy that may justify their nullification. We are therefore persuaded to conclude that the carrier is not responsible for the loss in question, it appearing that the same happened after the shipment had been delivered to the customs authorities. Wherefore, the decision appealed from is reversed, without pronouncement as to costs.

G.R. No. L-19004

June 30, 1964

RICHARD A. KLEPPER, plaintiff-appellee,

vs. AMERICAN PRESIDENT LINES LTD., ET AL., defendants, AMERICAN PRESIDENT LINES, LTD., defendant-appellant. Ozaeta, Gibbs and Ozaeta Ross, Selph and Carrascoso and Leocadio de Asis for defendant-appellant. BAUTISTA ANGELO, J.: On November 5, 1957, the Court of First Instance of Manila in Civil Case No. 28826 rendered a decision the dispositive portion of which reads: IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered on favor of the plaintiff Richard A. Klepper, ordering the defendant, American President Lines, Ltd., to pay said plaintiff the sum of P6,729.50, value of the goods damaged, plus P500.00 as their sentimental value, with legal interest from the date of the filing of the complaint until fully paid, and the further sum of P1,000.00 as attorney's fees. Once this judgment is satisfied, defendant Delgado Bros., Inc. is also ordered to pay to defendant American President Lines, Ltd., the same amounts. Delgado Bros. Inc., is likewise ordered to pay the costs. This decision was appealed to the Court of Appeals, which in due time affirmed it in toto. Again, the case was taken to this Court on a petition for review, and on November 29, 1960, the latter affirmed the decision of the court a quo, as affirmed by the Court of Appeals, with slight modification as follows: WHEREFORE, with the modification that petitioner shipping Company should only pay to respondent the sum of $500.00 as value of the goods damaged, the decision appealed from should be affirmed in all other respects, without pronouncement as to costs.1wph1.t Our decision having become final, the case was remanded to the court of origin, but instead of waiting for the execution of the judgment, counsel for defendants made a tender of payment to the plaintiff of P1,000.00 stating that it was in full satisfaction of the judgment which limits their liability of $500.00. When this tender was refused, defendants deposited the money with the clerk of court, and moved the court for an entry of satisfaction of judgment. This was opposed by the plaintiff. Thereafter, the court a quo issued an order the dispositive portion of which reads: WHEREFORE, in addition to the sum of P1,000.00 deposited by the defendant, American President Lines, Ltd., it should also deposit with this Court the interest on said amount of the legal rate from the date of the filing of the complaint until fully paid, and the further sum of P1,000.00 as attorney's fees, in conformity with the judgment of this Court confirmed by the Court of Appeals and in part by the Supreme Court. No costs should be awarded inasmuch as the Supreme Court has stated in its judgment "without pronouncement as to costs." Dissatisfied with this order, defendant took the present appeal. The main thesis of appellant is that since the main question involved in their appeal was whether the carrier's liability should be limited to $500.00, and this Court has upheld the affirmative contention of appellants, to interpret our decision to mean that the carrier can be liable for more than $500.00 by imposing thereon interest and attorney's fees as was done by the lower court, would be to nullify our holding on the very crux of the case the limitation of $500.00. But this contention overlooks one important factor, that in our decision we did not merely limit the liability of defendants to $500.00 but went further to state that "the decision appealed from should be affirmed in all other respects." In other words, while we ruled that the liability of defendants insofar as the value of the goods damaged is concerned should not go beyond $500.00, we likewise ruled that the other portion of the decision should stand, and this concerns the interest that defendants were ordered to pay on the amount adjudicated, as well as the attorney's fees. This portion of the judgment was affirmed, and hence it should be enforced. We find no error in the order appealed from. WHEREFORE, the order appealed from is affirmed. No costs. Bengzon, C.J., Padilla, Concepcion, Reyes, Labrador, Barrera and Dizon, JJ., took no part. J.B.L., Paredes, Regala and Makalintal, JJ., concur. for plaintiff-appellee.

G.R. No. L-36481-2 October 23, 1982 AMPARO C. SERVANDO, CLARA UY BICO, plaintiffs-appellees, vs. PHILIPPINE STEAM NAVIGATION CO., defendant-appellant. Zoilo de la Cruz, Jr. & Associate for plaintiff-appellee Amparo Servando.

Benedicto, Sumbingco & Associate for appellee Clara Uy Bico. Ross, Salcedo, del Rosario, Bito & Misa for defendant-appellant. ESCOLIN, J.: This appeal, originally brought to the Court of Appeals, seeks to set aside the decision of the Court of First Instance of Negros Occidental in Civil Cases Nos. 7354 and 7428, declaring appellant Philippine Steam Navigation liable for damages for the loss of the appellees' cargoes as a result of a fire which gutted the Bureau of Customs' warehouse in Pulupandan, Negros Occidental. The Court of Appeals certified the case to Us because only pure questions of law are raised therein. The facts culled from the pleadings and the stipulations submitted by the parties are as follows: On November 6, 1963, appellees Clara Uy Bico and Amparo Servando loaded on board the appellant's vessel, FS-176, for carriage from Manila to Pulupandan, Negros Occidental, the following cargoes, to wit: Clara Uy Bico 1,528 cavans of rice valued at P40,907.50; Amparo Servando 44 cartons of colored paper, toys and general merchandise valued at P1,070.50; as evidenced by the corresponding bills of lading issued by the appellant. 1 Upon arrival of the vessel at Pulupandan, in the morning of November 18, 1963, the cargoes were discharged, complete and in good order, unto the warehouse of the Bureau of Customs. At about 2:00 in the afternoon of the same day, said warehouse was razed by a fire of unknown origin, destroying appellees' cargoes. Before the fire, however, appellee Uy Bico was able to take delivery of 907 cavans of rice 2 Appellees' claims for the value of said goods were rejected by the appellant. On the bases of the foregoing facts, the lower court rendered a decision, the decretal portion of which reads as follows: WHEREFORE, judgment is rendered as follows: 1. In case No. 7354, the defendant is hereby ordered to pay the plaintiff Amparo C. Servando the aggregate sum of P1,070.50 with legal interest thereon from the date of the filing of the complaint until fully paid, and to pay the costs. 2. In case No. 7428, the defendant is hereby ordered to pay to plaintiff Clara Uy Bico the aggregate sum of P16,625.00 with legal interest thereon from the date of the filing of the complaint until fully paid, and to pay the costs. Article 1736 of the Civil Code imposes upon common carriers the duty to observe extraordinary diligence from the moment the goods are unconditionally placed in their possession "until the same are delivered, actually or constructively, by the carrier to the consignee or to the person who has a right to receive them, without prejudice to the provisions of Article 1738. " The court a quo held that the delivery of the shipment in question to the warehouse of the Bureau of Customs is not the delivery contemplated by Article 1736; and since the burning of the warehouse occurred before actual or constructive delivery of the goods to the appellees, the loss is chargeable against the appellant. It should be pointed out, however, that in the bills of lading issued for the cargoes in question, the parties agreed to limit the responsibility of the carrier for the loss or damage that may be caused to the shipment by inserting therein the following stipulation: Clause 14. Carrier shall not be responsible for loss or damage to shipments billed 'owner's risk' unless such loss or damage is due to negligence of carrier. Nor shall carrier be responsible for loss or damage caused by force majeure, dangers or accidents of the sea or other waters; war; public enemies; . . . fire . ... We sustain the validity of the above stipulation; there is nothing therein that is contrary to law, morals or public policy. Appellees would contend that the above stipulation does not bind them because it was printed in fine letters on the back-of the bills of lading; and that they did not sign the same. This argument overlooks the pronouncement of this Court in Ong Yiu vs. Court of Appeals, promulgated June 29, 1979, 3 where the same issue was resolved in this wise: While it may be true that petitioner had not signed the plane ticket (Exh. '12'), he is nevertheless bound by the provisions

thereof. 'Such provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation'. It is what is known as a contract of 'adhesion', in regards which it has been 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. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent." (Tolentino, Civil Code, Vol. IV, 1962 Ed., p. 462, citing Mr. Justice J.B.L. Reyes, Lawyer's Journal, Jan. 31, 1951, p. 49). Besides, the agreement contained in the above quoted Clause 14 is a mere iteration of the basic principle of law written in Article 1 1 7 4 of the Civil Code: Article 1174. Except in cases expressly specified by the law, or when it is otherwise declared by stipulation, or when the nature of the obligation requires the assumption of risk, no person shall be responsible for those events which could not be foreseen, or which, though foreseen, were inevitable. Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss, the obligor is exempt from liability for non-performance. The Partidas, 4 the antecedent of Article 1174 of the Civil Code, defines 'caso fortuito' as 'an event that takes place by accident and could not have been foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers.' In its dissertation of the phrase 'caso fortuito' the Enciclopedia Juridicada Espanola 5 says: "In a legal sense and, consequently, also in relation to contracts, a 'caso fortuito' presents the following essential characteristics: (1) the cause of the unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible to foresee the event which constitutes the 'caso fortuito', or if it can be foreseen, it must be impossible to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor." In the case at bar, the burning of the customs warehouse was an extraordinary event which happened independently of the will of the appellant. The latter could not have foreseen the event. There is nothing in the record to show that appellant carrier ,incurred in delay in the performance of its obligation. It appears that appellant had not only notified appellees of the arrival of their shipment, but had demanded that the same be withdrawn. In fact, pursuant to such demand, appellee Uy Bico had taken delivery of 907 cavans of rice before the burning of the warehouse. Nor can the appellant or its employees be charged with negligence. The storage of the goods in the Customs warehouse pending withdrawal thereof by the appellees was undoubtedly made with their knowledge and consent. Since the warehouse belonged to and was maintained by the government, it would be unfair to impute negligence to the appellant, the latter having no control whatsoever over the same. The lower court in its decision relied on the ruling laid down in Yu Biao Sontua vs. Ossorio 6, where this Court held the defendant liable for damages arising from a fire caused by the negligence of the defendant's employees while loading cases of gasoline and petroleon products. But unlike in the said case, there is not a shred of proof in the present case that the cause of the fire that broke out in the Custom's warehouse was in any way attributable to the negligence of the appellant or its employees. Under the circumstances, the appellant is plainly not responsible. WHEREFORE, the judgment appealed from is hereby set aside. No costs. SO ORDERED. Makasiar (Chairman), Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ., concur. Separate Opinions AQUINO, J., concurring: I concur. Under article 1738 of the Civil Code "the extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in the warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them". From the time the goods in question were deposited in the Bureau of Customs' warehouse in the morning of their arrival up to two o' clock in the afternoon of the same day, when the warehouse was burned, Amparo C. Servando and Clara Uy Bico, the consignees, had reasonable opportunity to remove the goods. Clara had removed more than one-half of the rice consigned to her. Moreover, the shipping company had no more control and responsibility over the goods after they were deposited in the customs warehouse by the arrastre and stevedoring operator.

No amount of extraordinary diligence on the part of the carrier could have prevented the loss of the goods by fire which was of accidental origin. Under those circumstances, it would not be legal and just to hold the carrier liable to the consignees for the loss of the goods. The consignees should bear the loss which was due to a fortuitous event.

G.R. No. 93252 November 8, 1991 RODOLFO T. GANZON, petitioner, vs. THE COURT OF APPEALS AND LUIS T. SANTOS, respondents. G.R. No. 93746 November 8, 1991 MARY ANN RIVERA ARTIEDA, petitioner, vs. HON. LUIS SANTOS, in his capacity as Secretary of the Department of Local Government, NICANOR M. PATRICIO, in his capacity as Chief, Legal Service of the Department of Local Government and SALVADOR CABALUNA, respondents. G.R. No. 95245 November 8, 1991 RODOLFO T. GANZON, petitioner, vs. THE HONORABLE COURT OF APPEALS and LUIS T. SANTOS, in his capacity as the Secretary of the Department of Local Government, respondents. Manuel Lazaro and Vincent Rondaris for petitioner in G.R. Nos. 93252 & 95245. RESOLUTION PADILLA, J.:p Before the Court for resolution are the various issues raised by Rodolfo T. Ganzon's urgent motion, dated 7 September 1991, wherein he asks the Court to dissolve the temporary restraining order (TRO) it had issued, dated 5 September 1991, against the TRO earlier issued by the Court of Appeals in CA-G.R. SP No. 25840 entitled Ganzon vs. Santos, et al. On 5 August 1991, the Court's decision in the present case was promulgated, upholding the validity of the orders of preventive suspension issued by respondent Secretary Santos, the dispositive part of which decision reads: WHEREFORE, premises considered, the petitions are DISMISSED. The Temporary Restraining Order issued is LIFTED. The suspensions of the petitioners are AFFIRMED, provided that the petitioner, Mayor Rodolfo Ganzon, may not be made to serve future suspensions on account of any of the remaining administrative charges pending against him for acts committed prior to August 11, 1988. The Secretary of Interior is ORDERED to consolidate all such administrative cases pending against Mayor Ganzon. The sixty-day suspension against the petitioner, Mary Ann Rivera Artieda, is AFFIRMED No costs. 1 A brief summary of the facts that led to this Court's decision of 5 August 1991 ("main decision", for brevity) is as follows: 1. Sometime in 1988, a series of ten (10) administrative complaints were filed by various city officials, against petitioner Ganzon, the elected City Mayor of Iloilo City, on various charges such as abuse of authority, oppression, grave misconduct and others. 2. In the course of the hearing of the administrative cases, respondent Secretary Santos issued against petitioner Ganzon three (3) separate orders of preventive suspension dated 11 August 1988, 11 October 1988, and 3 May 1990, each of the orders to last for a 60-day period. Petitioner assailed the validity of the said orders by filing with the Court of Appeals two (2) separate petitions for prohibition docketed CA-G.R. SP No. 16417 and CA-G.R. SP No. 20736. On 7 September 1988 and 5 July 1990, the appellate court rendered the decision in CA-G.R. SP Nos. 16417 and 20736 dismissing the petitions for lack of merit.

Hence, petitioner Ganzon filed with this Court two (2) separate petitions assailing the decision in CA-G.R. SP No. 16417 (subject of G.R. No. 93252), and that in CA-G.R. SP No. 20736 (subject of G.R. No. 95245) 2 3. On 26 June 1990, we issued a Temporary Restraining Order barring the respondent Secretary from implementing the suspension orders, and restraining the enforcement of the Court of Appeals' two (2) decisions. However, it appears that even before the promulgation on 5 August 1991 of the main decision, respondent Secretary Santos had issued on 3 July 1991 against petitioner Ganzon another order of preventive suspension in connection with Administrative Case No. 51-90 filed by complainant Octavius J. Jopson, which order states: It appearing from a perusal of the complaint as well as the answer in Administrative Case No 51-90, entitled Octavius J. Jopson, Complainant, versus, Mayor Rodolfo T. Ganzon, Respondent, for Oppression, etc., that there is reasonable ground to believe that Respondent has committed the act or acts complained of, as prayed for by Complainant Jopson, you are hereby preventively suspended from office for a period of sixty (60) days effective immediately. (Emphasis supplied) On 6 July 1991, petitioner Ganzon filed his "extremely urgent motion" (with supplemental motions later filed) questioning the validity of the said last mentioned suspension order. This Court issued a resolution dated 9 July 1991, requiring respondents to comment on petitioner's urgent motion. After the main decision in the present petitions was rendered by the Court on 5 August 1991, respondents filed motions dated, 9 and 29 August 1991 alleging therein that the issues raised in petitioner's motion (6 July 1991) were rendered moot and academic by the said decision, and seeking clarification on whether it was still necessary to comply with this Court's resolutions requiring respondents to file comment on petitioner's said motion of 6 July 1991. Meanwhile, on 29 August 1991, respondent Santos issued a memorandum addressed to petitioner Ganzon, in connection with the 5 August 1991 main decision, stating therein that the third order of preventive suspension issued against petitioner on 3 May 1990 shall be deemed in force and effect. The memorandum states: The Supreme Court, in its Decision in the above-referred cases, which affirmed the authority of the Secretary of Local Government to discipline local elective officials, explicitly states that, We are therefore allowing Mayor Rodolfo Ganzon to suffer the duration of his third suspension and lifting for the purpose, the Temporary Restraining Order earlier issued . . . In view thereof, the third preventive suspension imposed on you, photo copy of which is hereto attached, is hereby deemed in force. On 30 August 1991, petitioner Ganzon filed with the Court of Appeals a petition for mandamus, docketed CA-G.R. SP No. 25480 against respondents. On the same day, petitioner filed in these petitions his "manifestation and compliance," alleging that he had already fully served the suspension orders issued against him, in compliance with the main decision of 5 August 1991, and that he should be allowed to re-assume his office starting 4 September 1991. Meanwhile, in reaction to the memorandum dated 29 August 1991 issued by respondent Santos, petitioner filed in CA-G.R. SP No. 25840 a motion praying for the issuance of a temporary restraining order, which motion was granted by the Court of Appeals, when on 3 September 1991, it (CA) issued the said TRO. On 4 September 1991, respondents filed with this Court a motion asking for the issuance of a restraining order addressed to the Court of Appeals and against the TRO issued in CAG.R. SP No. 25840. Granting respondents' motion, this Court on 5 September 1991 issued a temporary restraining order directing the Court of Appeals to cease and desist from implementing the TRO it had issued dated 3 September 1991 immediately suspending the implementation of the order of the Secretary of Interior and Local Government dated 29 August 1991. On 9 September 1991, petitioner Ganzon filed a motion to dissolve this Court's restraining order dated 5 September 1991. The records show that petitioner Ganzon, to this date, remains suspended from office (as the elected Mayor of Iloilo City) and since the order of preventive suspension dated 3 July 1991 (the fourth suspension order 3 ) was issued against him by respondent Secretary; in other words, he has been serving the said fourth suspension order which is to expire after a period of 60 days, or on 4 September 1991. Similar to the argument raised in his petition filed with the Court of Appeals in CA-G.R. SP No. 25840, petitioner Ganzon, in support of his plea for the lifting of the TRO dated 5 September 1991 issued by this Court, in re: TRO dated 3 September 1991, issued by Court of Appeals, contends that inasmuch as he has already served fully the suspension orders issued against him, in compliance with the mandate of this Court's decision dated 5 August 1991, coupled with the fact that he had also completely served by 4 September 1991 the fourth order of preventive suspension dated 3 July 1991, he should therefore be allowed to re-assume his office starting 4 September 1991. On the other hand, respondent Secretary maintains that petitioner Ganzon can be allowed to return to his office (as Mayor of Iloilo City) only after 19 October 1991, as it is only after such date when petitioner may be said to have fully served the

preventive suspension orders as decreed in the main decision and in the order dated 3 July 1991 (fourth suspension). The question then is when petitioner Ganzon may be allowed to re-assume his position and duties as mayor of Iloilo City. Is it only after 19 October 1991 as claimed by respondents, or at some earlier date? The answer to this question would depend on how petitioner has served the preventive suspension orders issued against him. We note that the main decision refers to three (3) orders of preventive suspension each to last for 60 days. The first, dated 11 August 1988, was admittedly fully served by petitioner. The second order dated 11 October 1988 was not served because its enforcement was restrained by an order of the Regional Trial Court of Iloilo City upon petition of petitioner himself. 4 As to the third order dated 3 May 1990, the main decision states that petitioner is allowed to serve the duration of said third suspension order. It would seem, therefore, that after petitioner has served in full the third suspension order as decreed in the main decision, he can then return to his official duties as Iloilo City Mayor. However, we must also take note of the supervening 3 July 1991 order, again suspending petitioner from office for another 60 days, which order was issued even before the main decision of 5 August 1991 was promulgated. (The records show, however, that petitioner has in fact fully served the fourth suspension order, as admitted by respondents no less. This will be discussed shortly; but any issue on its validity is now moot and academic. 5 Besides, it is clear that this fourth suspension order is not one of the three orders covered by and subject of the main decision). Considering, nonetheless, the necessity of serving the third and fourth orders of suspension, there is need to look into when petitioner started to serve these orders so as to determine when their service expires. Petitioner contends that the following are the periods within which he stayed out of his office as he was serving the orders of preventive suspension issued against him: FROM Up to and Including May 4, June 9, July 5, 1991 September 3, 1991 8 1990 1990 May June 18, 26, 1990 1990 6 7

Petitioner argues that for the periods of 4 May 18 May 1990, and 9 June to 26 June 1990, he was serving the third suspension order; whereas for the period of 5 July to 3 September 1991, he was then serving the fourth suspension order. On the other hand, respondent Secretary contends that as to the third order of preventive suspension, dated 3 May 1990, petitioner served it only from 4 May 1990 to 19 May 1990. 9 Respondent denies that from 11 June to 30 June 1990 10 petitioner had served again the third suspension order. As to the fourth suspension order, respondent Secretary confirms that petitioner served it starting from 5 July 1991 to 3 September 1991.11 As regards the third suspension order, it is noted that though both parties admit that petitioner started serving it on 4 May 1990, they however differ as to when the service ended (Petitioner claims he served it even after 18 May 1990, whereas, respondent claims it ended 19 May 1990.) In view of this divergence, the Court rules that the third order was served by petitioner from 4 May 1990 up to 18 May 1990 only, the latter date being the date when the Court of Appeals issued a TRO in CA-G.R. SP No. 20736, 12 and thus, interrupted petitioner's service of the suspension orders and enabled him re-assume his office as Iloilo City Mayor. We also do not accept petitioner's contention that from 9 June 1990 up to 26 June 1990 13 he again started to serve the third suspension order, inasmuch as during the period of 9 June 1990 to 26 June 1990, the records show that he was then in office discharging the functions of the Mayor of Iloilo City. 14 In sum, we rule that petitioner served the third suspension order only from 4 May 1990 up to 18 May 1990. The period from 4 May 1990 to 18 May 1990 is equivalent to fourteen (14) days. 15 Hence, as to the third suspension order (3 May 1990), petitioner having served fourteen (14) days of the 60-day preventive suspension imposed in the order, 46 days still remained to be served by him as decreed in the main decision. If we follow the mandate of such main decision which ordained that the third order be served and that the temporary restraining order 16 against it be lifted, it would follow that the remaining 46 days should be served starting 5 August 1991 (date of promulgation of main decision) until fully served. Another way to serve the 46 days would be to begin serving it only on 4 September 1991 (the day after 3 September 1991 which was the last day of service for the fourth suspension order), or until 20 October 1991 (the 46th day from 4 September 1990). However we take note of the fact that petitioner has already fully served the 60-day fourth order of preventive suspension which started 5 July 1991 (that is, even before the main decision was rendered) and ended on 3 September 1991. Petitioner raises the issue of whether he could or should be allowed to serve the third and the fourth orders "simultaneously". If we allow his submission and accept "simultaneous service", it would mean the following: that from 5 August 1991 (the date the

TRO issued by this Court was lifted) up to 3 September 1991 (the last day for serving the fourth order), twenty-nine (29) days have elapsed; that these twenty-nine (29) days which form part of his service for the fourth order can be also credited to his favor by treating said twenty-nine (29) days as forming part of his service of the third order; if this were so, he would need to serve only seventeen (17) days more to complete the service of the third order; said seventeen (17) days from 3 September 1991 will expire on 20 September 1991, which would be the last day for serving the third suspension order. Respondents however object to adopting the idea of "simultaneous service," of preventive suspensions as, according of them, this is not allowed under the Local Government Code. We agree with petitioner that he can be allowed the benefit of simultaneous service of the third and fourth suspension orders, for the following reasons. If simultaneous service of two (2) suspension orders is allowed, this would work in favor of the petitioner (an elective local official) as the balance of his third preventive suspension would, in effect, be reduced from 46 days to 17 days. It will be recalled that, in the main decision, noting that successive suspensions have been inflicted on Mayor Ganzon we stated that what "is intriguing is that respondent Secretary has been cracking down, so to speak, on the Mayor piecemeal apparently, to pin him down ten times the pain, when he, the respondent Secretary could have pursued a consolidated effort." 17 Surely, allowing petitioner to serve simultaneously the overlapping third and fourth suspensions will favor him, (and presumably the local constituency) and certainly lessen if not offset the harsh effects of whatever motive may be behind the intriguing action of the respondent Secretary in issuing those successive suspension orders. Furthermore, we may already take judicial notice of the recently-approved Local Government Code of 1991 (recently signed into law by the President) 18 which provides (as to imposition of preventive suspensions) as follows: Sec. 63. Preventive Suspension xxx xxx xxx b) . . . that, any single preventive suspension of local elective official shall not extend beyond sixty (60) days: Provided, further that in the event that several administrative cases are filed against an elective official, he cannot be preventively suspended for more than ninety (90) days within a single year on the same ground or grounds existing and known at the time of the first suspension. (emphasis supplied) Since we can allow, as we here allow, under the bizarre circumstances of this case, petitioner to serve the third and fourth orders simultaneously (insofar as they overlap), this means that, as explained earlier, petitioner shall serve only 17 days more (not 46 days) to complete the service of the third order, that is, starting from 3 September 1991 and ending on 20 September 1991. Hence, as of this latter date, petitioner has complied with the mandate of the main decision for he has already fully served the third preventive suspension which ended on 20 September 1991. But then another issue is raised by respondents, i.e. that considering that the main decision refers to the first, second and third orders of preventive suspension (as far as Mayor Ganzon is concerned), petitioner, apart from serving the third order (the first one having been fully served), should also serve the second order (for another 60 days) as the latter has admittedly not been serve yet due to a restraining order issued by a trial court, 19 and considering that the dispositive portion of the main decision decreed that "suspensions of petitioners (including the other petitioner Artieda in G.R. No. 93746) are affirmed." We agree with the respondents on this point. The main decision refers to the three (3) suspension orders the first, the second and the third. As shown earlier, the first and the third orders have already been served. It is only the second order which seems to have been unserved. If we follow the decision which states that the three (3) suspensions are affirmed, there appears to be no reason why the second order should not be served for another 60-day period. However, there is no cogent reason why, under the bizarre circumstances of this case where the respondent Secretary has chosen to impose preventive suspensions piecemeal, instead of consolidating the several administrative cases of similar nature and close vintage we cannot allow the concept of simultaneous service to apply to the second order (as we did in the third order). It would follow then that the second order is also fully served to this date for the service of said second order would have started on 5 August 1991 (when the main decision was rendered as this was the time when this Court found and affirmed the validity of the three (3) suspension orders, including the second order). The 60-day period from 5 August 1991 expired on 4 October 1991. It appears that as to the second preventive suspension, petitioner manifested that there is still an existing preliminary injunction issued by the RTC of Iloilo City, Branch 33 in Special Civil Action No. 18312, entitled Ganzon vs. Santos, et al. 20 One may ask as to the status of the case pending with the RTC, Iloilo City, Branch 33 insofar as the said case involves the issue on the validity of the second preventive suspension order. Under the main decision of this Court, dated 5 August 1991,

second preventive suspension has been affirmed; under the present resolution, said second preventive suspension has been served. Consequently, Special Civil Action No. 18312 before the Regional Trial Court of Iloilo City has been rendered moot and academic, insofar as the second preventive suspension order is concerned. As to the petition (docketed CA-G. R. SP No. 25840) filed with the Court of Appeals, which involves the question of the validity of the fourth order, and which has clearly been served, petitioner admitted that he filed it, on the belief that it was the proper remedy for his reinstatement to office; thinking that his suspensions have been served and ended. 21 As we have ruled that petitioner has served the suspension orders decreed in the main decision and in the light of the finding of this Court that the fourth preventive suspension order has been served, the issues raised in CA-G.R. SP No. 25840; have also become moot and academic, warranting dismissal thereof. WHEREFORE, the urgent motion of petitioner, dated 7 September 1991 is hereby GRANTED. The temporary restraining order dated 5 September 1991 is hereby LIFTED. Respondents are ordered to allow petitioner to re-assume his office as elected Mayor of Iloilo City effective immediately. The Court of Appeal is directed to dismiss CA-G.R. SP No. 25840 for having become moot and academic. The Region Trial Court of Iloilo City, Branch 33 before which petitioner's action for prohibition (Special Civil Action No. 18312) is pending is also ordered to dismiss the said case for having become moot and academic insofar as petitioner prays therein to enjoin his (second) preventive suspension. This resolution is without prejudice to the administrative cases (where the first, second, third and fourth preventive suspension orders were issued) proceeding on the merits thereof. Also, as decreed in the main decision of 5 August 1991. . . . petitioner, Mayor Rodolfo Ganzon, may not be made to serve future suspensions on account of any of the remaining administrative charges pending against him for acts committed prior to August 11, 1988. G.R. No. 121404 May 3, 2006

ANICETO G. SALUDO, JR., Petitioner, vs. COURT OF APPEALS, HON. FERNANDO V. GOROSPE, JR., in his capacity as Presiding Judge, Regional Trial Court of Makati, Branch 61, and SALLY V. BELLOSILLO, Respondents. DECISION YNARES-SANTIAGO, J.: This Petition HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt1" 1 seeks to annul and set aside the August 8, 1995 Resolution HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt2" 2 of the Court of Appeals in CA-G.R. SP No. 36670, which dismissed the Petition HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt3" 3 for certiorari to annul and set aside the November 10, 1994 HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt4" 4 and February 20, 1995 Orders HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt5" 5 issued by the Regional Trial Court of Makati City, Branch 61, in Civil Case No. 88-2181. The said Orders denied petitioner Aniceto G. Saludo, Jr.s Motion to Suspend Proceedings in Civil Case No. 88-2181 HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt6" 6 as well as his Motion for Reconsideration. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt7" 7 1avvphil.net Petitioner prayed for the suspension of proceedings in the said civil case on the ground that to proceed with the trial would make public the administrative case entitled Bellosillo v. The Board of Governors of the Integrated Bar of the Philippines and Aniceto G. Saludo, Jr. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt8" 8 for Gross Professional Misconduct/Malpractice filed by herein private respondent Sally V. Bellosillo against him and thereby violate the confidentiality rule as stated in Section 18, Rule 139-B of the Rules of Court. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt9" 9 On September 4, 1995, we issued a Temporary Restraining Order (TRO) HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt10" 10 to enjoin the Regional Trial Court of Makati City, Branch 61, from proceeding with the pre-trial and trial of Civil Case No. 88-2181, effective immediately and during the entire period that the case is pending or until further orders. It appears, however, that on March 31, 2006, the Court rendered judgment on the administrative case disposing as follows: WHEREFORE, the petition is DENIED and the assailed Resolution of the IBP Board of Governors, dated March 30,

1996, dismissing the complaint against respondent [Aniceto G. Saludo. Jr.] in Adm. Case No. 3297 is AFFIRMED. SO ORDERED. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt11" 11 We held therein that private respondent Bellosillo has not established a prima facie case to hold petitioner administratively liable as her dealings with the latter, such as the alleged cash borrowings and unwarranted solicitations, were ordinary business transactions arising from their personal dealings, and not from an attorney-client relationship. They represent purely personal interests and not professional misconduct. In view of the foregoing, the present petition has been rendered moot as petitioners prayer has become inconsequential with the dismissal of the administrative complaint filed against him. Thus, the trial of Civil Case No. 88-2181 must now proceed immediately. Section 18, Rule 139-B of the Rules of Court states that "proceedings against attorneys shall be private and confidential. However, the final order of the Supreme Court shall be published like its decisions in other cases." The purpose of the rule is not only to enable this Court to make its investigations free from any extraneous influence or interference, but also to protect the personal and professional reputation of attorneys and judges from the baseless charges of disgruntled, vindictive, and irresponsible clients and litigants; it is also to deter the press from publishing administrative cases or portions thereto without authority. We have ruled that malicious and unauthorized publication or verbatim reproduction of administrative complaints against lawyers in newspapers by editors and/or reporters may be actionable. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt12" 12 Such premature publication constitutes a contempt of court, punishable by either a fine or imprisonment or both at the discretion of the Court. The lawyer as an aggrieved party may recover damages in a civil suit filed for the purpose; HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt13" 13 or may choose to waive the confidentiality of proceedings in the disbarment case against him/her. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt14" 14 Enabling the court to keep administrative investigations free of extraneous influence or interference essentially calls for independence and impartiality of the investigating court, commissioners, or officers. It does not, however, exclude the possibility of simultaneously commencing a judicial case against a lawyer who is being administratively investigated. The settled rule is that criminal and civil cases are different from administrative matters, such that the disposition in the first two will not inevitably govern the third and vice versa. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt15" 15 In Berbano v. Barcelona, HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt16" 16 it was held that: Disciplinary proceedings against lawyers are sui generis. Neither purely civil nor purely criminal, they do not involve a trial of an action or a suit, but are rather investigations by the Court into the conduct of one of its officers. Not being intended to inflict punishment, [they are] in no sense a criminal prosecution. Accordingly, there is neither a plaintiff nor a prosecutor therein. [They] may be initiated by the Court motu propio. Public interest is [their] primary objective, and the real question for determination is whether or not the attorney is still a fit person to be allowed the privileges as such. Hence, in the exercise of its disciplinary powers, the Court merely calls upon a member of the Bar to account for his actuations as an officer of the Court with the end in view of preserving the purity of the legal profession and the proper and honest administration of justice by purging the profession of members who by their misconduct have prove[n] themselves no longer worthy to be entrusted with the duties and responsibilities pertaining to the office of an attorney. We also emphasized in Gatchalian Promotions Talents Pool, Inc. v. "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt17" 17 that: Naldoza HYPERLINK

[A] finding of guilt in the criminal case will not necessarily result in a finding of liability in the administrative case. Conversely, respondents acquittal does not necessarily exculpate him administratively. In the same vein, the trial courts finding of civil liability against the respondent will not inexorably lead to a similar finding in the administrative action before this Court. Neither will a favorable disposition in the civil action absolve the administrative liability of the lawyer. x x x. Thus, the proceedings in Civil Case No. 88-2181 could continue notwithstanding the pendency of the administrative case. In fact, we have actually ruled on administrative cases with pending judicial proceedings related thereto. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt18" 18 The fact that the charges and some pieces of evidence to be used in both cases are similar does not necessarily amount to prejudice or deprivation of due process to any of the parties in either case. Petitioner also contended that the non-suspension of Civil Case No. 88-2181 while the administrative case is being heard would unduly expose him to the public eye and ear, and consequently cause irreparable injury to his personal and professional integrity.

Petitioners contention lacks basis. As correctly pointed out by the Court of Appeals in CA-G.R. SP No. 36670, petitioner can ably protect himself by timely objections to any action of the other parties in Civil Case No. 88-2181, which refers to the administrative case against him. Besides, to forestall the civil case from proceeding due to the pendency of the administrative case would be unfair to the party instituting the civil case and would also unduly delay the administration of justice. Indeed, the success of a lawyer in his profession depends almost entirely on his reputation. Anything which will harm his good name is to be deplored HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt19" 19 as a lawyers reputation is "a plant of tender growth, and its bloom, once lost, is not easily restored." HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt20" 20 The eventual dismissal however of the administrative case, as in this case, should more than redeem and maintain petitioners good name. Finally, the Court of Appeals correctly held that: Under Section 1, Rule 21 of the Revised Rules of Court, [now Section 8, Rule 30 of the Rules of Court HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt21" 21], an action may be suspended only on the ground of a possibility of a compromise. The rule of confidentiality under Section 18 of Rule 139-B cannot be a ground for suspending the proceedings in a civil case, unless it is patent, which is not the case here, that the civil case was filed purposely to circumvent the said rule. As a matter of fact, the complaint in this case was not initiated by the private respondent but by a person whom she claims to be an agent of the petitioner. The confidentiality of administrative proceeding is not intended to place lawyers in a privileged position with regard to civil or criminal actions against them. HYPERLINK "http://www.lawphil.net/judjuris/juri2006/may2006/gr_121404_2006.html" \l "fnt22" 22 WHEREFORE, theinstant petition is DISMISSED for being moot and academic. The Temporary Restraining Order issued on September 4, 1995 is ordered LIFTED. The Presiding Judge of the Regional Trial Court of Makati City, Branch 61 is ORDERED to proceed hearing Civil Case No. 88-2181. [G.R. No. 125524. August 25, 1999] BENITO MACAM doing business under the name and style BEN-MAC ENTERPRISES, petitioner, vs. COURT OF APPEALS, CHINA OCEAN SHIPPING CO., and/or WALLEM PHILIPPINES SHIPPING, INC., respondents. DECISION BELLOSILLO, J.: On 4 April 1989 petitioner Benito Macam, doing business under the name and style Ben-Mac Enterprises, shipped on board the vessel Nen Jiang, owned and operated by respondent China Ocean Shipping Co., through local agent respondent Wallem Philippines Shipping, Inc. (hereinafter WALLEM), 3,500 boxes of watermelons valued at US$5,950.00 covered by Bill of Lading No. HKG 99012 and exported through Letter of Credit No. HK 1031/30 issued by National Bank of Pakistan, Hongkong (hereinafter PAKISTAN BANK) and 1,611 boxes of fresh mangoes with a value of US$14,273.46 covered by Bill of Lading No. HKG 99013 and exported through Letter of Credit No. HK 1032/30 also issued by PAKISTAN BANK. The Bills of Lading contained the following pertinent provision: "One of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order." HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn1" \o "" The shipment was bound for Hongkong with PAKISTAN BANK as consignee and Great Prospect Company of Kowloon, Hongkong (hereinafter GPC) as notify party. On 6 April 1989, per letter of credit requirement, copies of the bills of lading and commercial invoices were submitted to petitioner's depository bank, Consolidated Banking Corporation (hereinafter SOLIDBANK), which paid petitioner in advance the total value of the shipment of US$20,223.46. Upon arrival in Hongkong, the shipment was delivered by respondent WALLEM directly to GPC, not to PAKISTAN BANK, and without the required bill of lading having been surrendered. Subsequently, GPC failed to pay PAKISTAN BANK such that the latter, still in possession of the original bills of lading, refused to pay petitioner through SOLIDBANK. Since SOLIDBANK already pre-paid petitioner the value of the shipment, it demanded payment from respondent WALLEM through five (5) letters but was refused. Petitioner was thus allegedly constrained to return the amount involved to SOLIDBANK, then demanded payment from respondent WALLEM in writing but to no avail. On 25 September 1991 petitioner sought collection of the value of the shipment of US$20,223.46 or its equivalent of P546,033.42 from respondents before the Regional Trial Court of Manila, based on delivery of the shipment to GPC without presentation of the bills of lading and bank guarantee. Respondents contended that the shipment was delivered to GPC without presentation of the bills of lading and bank guarantee per request of petitioner himself because the shipment consisted of perishable goods. The telex dated 5 April 1989 conveying such request read -

AS PER SHPRS REQUEST KINDLY ARRANGE DELIVERY OF A/M SHIPT TO RESPECTIVE CNEES WITHOUT PRESENTATION OF OB/L HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn2" \o "" and bank guarantee since for prepaid shipt ofrt charges already fully paid our end x x x x HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn3" \o "" Respondents explained that it is a standard maritime practice, when immediate delivery is of the essence, for the shipper to request or instruct the carrier to deliver the goods to the buyer upon arrival at the port of destination without requiring presentation of the bill of lading as that usually takes time. As proof thereof, respondents apprised the trial court that for the duration of their two-year business relationship with petitioner concerning similar shipments to GPC deliveries were effected without presentation of the bills of lading. HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn4" \o "" Respondents advanced next that the refusal of PAKISTAN BANK to pay the letters of credit to SOLIDBANK was due to the latter's failure to submit a Certificate of Quantity and Quality. Respondents counterclaimed for attorneys fees and costs of suit. On 14 May 1993 the trial court ordered respondents to pay, jointly and severally, the following amounts: (1) P546,033.42 plus legal interest from 6 April 1989 until full payment; (2) P10,000.00 as attorney's fees; and, (3) the costs. The counterclaims were dismissed for lack of merit. HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn5" \o "" The trial court opined that respondents breached the provision in the bill of lading requiring that "one of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order," when they released the shipment to GPC without presentation of the bills of lading and the bank guarantee that should have been issued by PAKISTAN BANK in lieu of the bills of lading. The trial court added that the shipment should not have been released to GPC at all since the instruction contained in the telex was to arrange delivery to the respective consignees and not to any party. The trial court observed that the only role of GPC in the transaction as notify party was precisely to be notified of the arrival of the cargoes in Hongkong so it could in turn duly advise the consignee. Respondent Court of Appeals appreciated the evidence in a different manner. According to it, as established by previous similar transactions between the parties, shipped cargoes were sometimes actually delivered not to the consignee but to notify party GPC without need of the bills of lading or bank guarantee. HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn6" \o "" Moreover, the bills of lading were viewed by respondent court to have been properly superseded by the telex instruction and to implement the instruction, the delivery of the shipment must be to GPC, the real importer/buyer of the goods as shown by the export invoices, HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn7" \o "" and not to PAKISTAN BANK since the latter could very well present the bills of lading in its possession; likewise, if it were the PAKISTAN BANK to which the cargoes were to be strictly delivered it would no longer be proper to require a bank guarantee. Respondent court noted that besides, GPC was listed as a consignee in the telex. It observed further that the demand letter of petitioner to respondents never complained of misdelivery of goods. Lastly, respondent court found that petitioners claim of having reimbursed the amount involved to SOLIDBANK was unsubstantiated. Thus, on 13 March 1996 respondent court set aside the decision of the trial court and dismissed the complaint together with the counterclaims. HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn8" \o "" On 5 July 1996 reconsideration was denied. HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn9" \o "" Petitioner submits that the fact that the shipment was not delivered to the consignee as stated in the bill of lading or to a party designated or named by the consignee constitutes a misdelivery thereof. Moreover, petitioner argues that from the text of the telex, assuming there was such an instruction, the delivery of the shipment without the required bill of lading or bank guarantee should be made only to the designated consignee, referring to PAKISTAN BANK. We are not persuaded. The submission of petitioner that the fact that the shipment was not delivered to the consignee as stated in the Bill of Lading or to a party designated or named by the consignee constitutes a misdelivery thereof is a deviation from his cause of action before the trial court. It is clear from the allegation in his complaint that it does not deal with misdelivery of the cargoes but of delivery to GPC without the required bills of lading and bank guarantee 6. The goods arrived in Hongkong and were released by the defendant Wallem directly to the buyer/notify party, Great Prospect Company and not to the consignee, the National Bank of Pakistan, Hongkong, without the required bills of lading and bank guarantee for the release of the shipment issued by the consignee of the goods x x x x HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn10" \o "" Even going back to an event that transpired prior to the filing of the present case or when petitioner wrote respondent WALLEM demanding payment of the value of the cargoes, misdelivery of the cargoes did not come into the picture We are writing you on behalf of our client, Ben-Mac Enterprises who informed us that Bills of Lading No. 99012 and 99013 with a total value of US$20,223.46 were released to Great Prospect, Hongkong without the necessary bank guarantee. We

were further informed that the consignee of the goods, National Bank of Pakistan, Hongkong, did not release or endorse the original bills of lading. As a result thereof, neither the consignee, National Bank of Pakistan, Hongkong, nor the importer, Great Prospect Company, Hongkong, paid our client for the goods x x x x HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn11" \o "" At any rate, we shall dwell on petitioners submission only as a prelude to our discussion on the imputed liability of respondents concerning the shipped goods. Article 1736 of the Civil Code provides Art. 1736. The extraordinary responsibility of the common carriers 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 consignee, or to the person who has a right to receive them, without prejudice to the provisions of article 1738. HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn12" \o "" We emphasize that the extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a right to receive them. PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was the notify party. However, in the export invoices GPC was clearly named as buyer/importer. Petitioner also referred to GPC as such in his demand letter to respondent WALLEM and in his complaint before the trial court. This premise draws us to conclude that the delivery of the cargoes to GPC as buyer/importer which, conformably with Art. 1736 had, other than the consignee, the right to receive them HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn13" \o "" was proper. The real issue is whether respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank guarantee. Respondents submitted in evidence a telex dated 5 April 1989 as basis for delivering the cargoes to GPC without the bills of lading and bank guarantee. The telex instructed delivery of various shipments to the respective consignees without need of presenting the bill of lading and bank guarantee per the respective shippers request since for prepaid shipt ofrt charges already fully paid. Petitioner was named therein as shipper and GPC as consignee with respect to Bill of Lading Nos. HKG 99012 and HKG 99013. Petitioner disputes the existence of such instruction and claims that this evidence is self-serving. From the testimony of petitioner, we gather that he has been transacting with GPC as buyer/importer for around two (2) or three (3) years already. When mangoes and watermelons are in season, his shipment to GPC using the facilities of respondents is twice or thrice a week. The goods are released to GPC. It has been the practice of petitioner to request the shipping lines to immediately release perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his people. In transactions covered by a letter of credit, bank guarantee is normally required by the shipping lines prior to releasing the goods. But for buyers using telegraphic transfers, petitioner dispenses with the bank guarantee because the goods are already fully paid. In his several years of business relationship with GPC and respondents, there was not a single instance when the bill of lading was first presented before the release of the cargoes. He admitted the existence of the telex of 3 July 1989 containing his request to deliver the shipment to the consignee without presentation of the bill of lading HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn14" \o "" but not the telex of 5 April 1989 because he could not remember having made such request. Consider pertinent portions of petitioners testimony Q: Are you aware of any document which would indicate or show that your request to the defendant Wallem for the immediate release of your fresh fruits, perishable goods, to Great Prospect without the presentation of the original Bill of Lading? A: Yes, by telegraphic transfer, which means that it is fully paid. And I requested the immediate release of the cargo because there was immediate payment. Q And you are referring, therefore, to this copy Telex release that you mentioned where your Companys name appears Ben-Mac? Atty. Hernandez: Just for the record, Your Honor, the witness is showing a Bill of Lading referring to SKG (sic) 93023 and 93026 with Great Prospect Company. Atty. Ventura: Q: Is that the telegraphic transfer? A: Yes, actually, all the shippers partially request for the immediate release of the goods when they are perishable. I thought Wallem Shipping Lines is not neophyte in the business. As far as LC is concerned, Bank guarantee is needed for the immediate release of the goods x x x x HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn15" \o ""

Q: Mr. Witness, you testified that it is the practice of the shipper of the perishable goods to ask the shipping lines to release immediately the shipment. Is that correct? A: Yes, sir. Q: Now, it is also the practice of the shipper to allow the shipping lines to release the perishable goods to the importer of goods without a Bill of Lading or Bank guarantee? A: No, it cannot be without the Bank Guarantee. Atty. Hernandez: Q: Can you tell us an instance when you will allow the release of the perishable goods by the shipping lines to the importer without the Bank guarantee and without the Bill of Lading? A: As far as telegraphic transfer is concerned. Q: Can you explain (to) this Honorable Court what telegraphic transfer is? A: Telegraphic transfer, it means advance payment that I am already fully paid x x x x Q: Mr. Macam, with regard to Wallem and to Great Prospect, would you know and can you recall that any of your shipment was released to Great Prospect by Wallem through telegraphic transfer? A: I could not recall but there were so many instances sir. Q: Mr. Witness, do you confirm before this Court that in previous shipments of your goods through Wallem, you requested Wallem to release immediately your perishable goods to the buyer? A: Yes, that is the request of the shippers of the perishable goods "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn16" \o "" x x x x HYPERLINK

Q: Now, Mr. Macam, if you request the Shipping Lines for the release of your goods immediately even without the presentation of OBL, how do you course it? A: Usually, I call up the Shipping Lines, sir x "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn17" \o "" A: Mostly I let my people to call, sir. (sic) Q: So everytime you made a shipment on perishable goods you let your people to call? (sic) A: Not everytime, sir. Q: You did not make this request in writing? A: No, sir. I think I have no written request with Wallem "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn18" \o "" x x x x HYPERLINK x x x HYPERLINK

Q: You also testified you made this request through phone calls. Who of you talked whenever you made such phone call?

Against petitioners claim of not remembering having made a request for delivery of subject cargoes to GPC without presentation of the bills of lading and bank guarantee as reflected in the telex of 5 April 1989 are damaging disclosures in his testimony. He declared that it was his practice to ask the shipping lines to immediately release shipment of perishable goods through telephone calls by himself or his people. He no longer required presentation of a bill of lading nor of a bank guarantee as a condition to releasing the goods in case he was already fully paid. Thus, taking into account that subject shipment consisted of perishable goods and SOLIDBANK pre-paid the full amount of the value thereof, it is not hard to believe the claim of respondent WALLEM that petitioner indeed requested the release of the goods to GPC without presentation of the bills of lading and bank guarantee. The instruction in the telex of 5 April 1989 was to deliver the shipment to respective consignees. And so petitioner argues that, assuming there was such an instruction, the consignee referred to was PAKISTAN BANK. We find the argument too simplistic. Respondent court analyzed the telex in its entirety and correctly arrived at the conclusion that the consignee referred to was not PAKISTAN BANK but GPC There is no mistake that the originals of the two (2) subject Bills of Lading are still in the possession of the Pakistani Bank. The appealed decision affirms this fact. Conformably, to implement the said telex instruction, the delivery of the shipment must be to GPC, the notify party or real importer/buyer of the goods and not the Pakistani Bank since the latter can very well present the original Bills of Lading in its possession. Likewise, if it were the Pakistani Bank to whom the cargoes were to be strictly delivered, it will no longer be proper to require a bank guarantee as a substitute for the Bill of Lading. To construe otherwise will render meaningless the telex instruction. After all, the cargoes consist of perishable fresh fruits and

immediate delivery thereof to the buyer/importer is essentially a factor to reckon with. Besides, GPC is listed as one among the several consignees in the telex (Exhibit 5-B) and the instruction in the telex was to arrange delivery of A/M shipment (not any party) to respective consignees without presentation of OB/L and bank guarantee x x x x HYPERLINK "http://sc.judiciary.gov.ph/jurisprudence/1999/aug99/125524.htm" \l "_edn19" \o "" Apart from the foregoing obstacles to the success of petitioners cause, petitioner failed to substantiate his claim that he returned to SOLIDBANK the full amount of the value of the cargoes. It is not far-fetched to entertain the notion, as did respondent court, that he merely accommodated SOLIDBANK in order to recover the cost of the shipped cargoes from respondents. We note that it was SOLIDBANK which initially demanded payment from respondents through five (5) letters. SOLIDBANK must have realized the absence of privity of contract between itself and respondents. That is why petitioner conveniently took the cudgels for the bank. In view of petitioners utter failure to establish the liability of respondents over the cargoes, no reversible error was committed by respondent court in ruling against him. WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals of 13 March 1996 dismissing the complaint of petitioner Benito Macam and the counterclaims of respondents China Ocean Shipping Co. and/or Wallem Philippines Shipping, Inc., as well as its resolution of 5 July 1996 denying reconsideration, is AFFIRMED. SO ORDERED. Mendoza, Quisumbing, and Buena, JJ., concur. ...