G.R. No. L-24033. February 22, 1968
PHOENIX ASSURANCE CO., LTD., PLAINTIFF-APPELLANT, VS. UNITED STATES LINES, DEFENDANT-APPELLEE.
BENGZON, J.P., J.:
The facts antecedent to this appeal from a decision dated October 31, 1964 of the Court of
First Instance of Manila, are as follows:
On June 29, 1962, General Motors shipped and consigned on a CIF
basis to Davao Parts and Service, Inc. at Davao City from New York aboard the United States Lines’
vessel SS “Pioneer Moor” a cargo of truck’ spare parts in 25 cases
and 4 crates (2 pieces unboxed), for which United States Lines issued a short
form bill of lading No. T-1 (Annex “A” and Exh. “1”), and which shipment was insured
against loss and damage with Phoenix’
Assurance Co., Ltd. The short form bill
of lading No. T-1 indicated Manila as the port of
discharge and Davao City as the place where the goods
were to be trans-shipped, and expressly incorporated by reference
the provisions contained in the carrier’s regular long form bill of
lading (Annex “B” and Exh. “2”).
The SS “Pioneer Moor” on July 28, 1962 discharged at Manila
to the custody of the Manila Port Service which was then the operator of the arrastre service at the Port
of Manila, the above described
cargo, complete but with the exception of two cases, namely, Cases Nos. 3139
and 3148 valued at P1,498.25.
On July 30, 1962,
the Luzon Brokerage Corporation, customs broker hired by the United States
Lines, filed in behalf of the latter a provisional claim against the Manila
Port Service for short-landed, short-delivered and/or landed in bad order cargo
ex-United States Lines’ vessel.
On August 30, 1962, the aforedescribed
cargo, with the exception of Crates Nos. 3139 and 3148 which were not
discharged at the Manila Port, and Crates Nos. 3648 and 3649 which were
discharged at the Manila Port hut were lost in the custody of the Manila Port
Service, was transshipped by United States Lines to Davao
through a vessel of its Davao agent, Columbian Rope
Company, and duly received in good order by the Davao
Parts and Service, Inc.
Davao Parts and Service, Inc. filed on
December 26, 1962 a formal claim with the United States Lines through the
latter’s agent, Columbian Rope Company, for the value Crates Nos. 3139, 3148,
3648 and 3649 in the total sum of P2,010.37.
The United States Lines, after proper verification, paid Davao Parts and Service, Inc. the sum of ‘P1,458.25, representing the value of Crates. Nos. 3139 and
3148, when it was discovered that these two crates had been overlanded
in Honolulu, but refused to pay for the value of Crates Nos. 3648 and 3649 for
the reason that these crates had been lost while in the custody of the Manila
Port Service.
The two crates (Nos. 3139 and 3148) which were over?landed
in Honolulu and for which United
States Lines paid Davao Parts and Service, Inc. the
sum of P1,458.25, were later recovered and returned to
Davao Parts and Service, Inc. and the latter refunded
United States Lines for the sum it paid.
In view of United States Lines’ refusal to pay for the two crates
(Nos. 3648 and 3649)-which were lost while in the custody of the Manila Port
Service, Ker Company, agent of Phoenix Assurance Co.,
Ltd., in the Philippines, and insurer of Davao Farts
and Service Inc.,
paid to the latter the value of said crates in the sum of P552.12.
On March 25, 1963,
the United States Lines, through the Columbian Rope Company, by letter informed
the Davao Parts and Service, Inc. that it was filing
a claim for the undelivered crates with the Manila Port Service. And true to its word, it filed on March 30, 1963 a formal Claim with
the Manila Port Service for the value of Crates Nos. 3648 and 3649, but the
latter declined to honor the same.
On June 26, 1963, United States Lines, through Columbian Rope
Company, its Davao agent, informed the Davao Parts and Service, Inc., inter alia, that the Manila Port Service had not yet
settled its claim, and that the one-year period provided by law within which to
bring action against the Manila Port Service for the two crates (Nos. 3648 and
3649) would expire on July 28, 1963.
Phoenix Assurance Co., Ltd., through Ker
& Company, Ltd., its agent in the Philippines,
wrote on July 24, 1963 the
United States Lines expressing its appreciation to the latter for taking action
against the Manila Port Service. In the
same letter it requested for an extension of time to file suit against the
United States Lines (the prescriptive period for doing so being set to expire
on July 28, 1963), explaining that it could not file suit against any entity
(including the Manila Port Service) except the United States Lines with whom
its subrogee, the Davao
Parts and Service, Inc., was in contract.
No reply having been received by It from
the United States Lines, the Phoenix Assurance Co., Ltd. on July 29, 1963 filed a suit praying
that judgment be rendered against the former for the sum of P552.12, with
interest at the legal rate, plus attorneys fees and expenses of litigation.[1]
On August 16, 1963,
the United States Lines filed its answer with counterclaim,[2] while
Phoenix Assurance Co., Ltd. filed its answer to said counterclaim on August 26, 1963.
On March 9, 1964,
the parties submitted a Partial Stipulation of Facts.[3]
After trial, the lower court on October 31, 1964 rendered a decision dismissing
plaintiff’s complaint.[4]
Thus this appeal, raising the sole issue of whether or not the lower
court erred in dismissing the complaint and in exonerating defendant-appellee from liability for the value of the two
undelivered crates Nos. 3648 and 3649.
It must be stated at the outset that a bill of lading operates
both as a receipt and as a contract. It
is a receipt for the goods shipped and a contract to transport and deliver the
same as therein stipulated. As a
receipt, it recites the date and place of shipment, describes the goods as to
quantity, weight, dimensions, identification marks and condition, quality, and
value. As a contract, it names the contracting parties, which include the consignee,
fixes the route, destination, and freight rate or charges, and stipulates the
rights and obligations assumed by the parties.[5]
In this jurisdiction, it is a statutory and decisional rule of
law that a contract is the law between the contracting parties,[6]
and where there is nothing in it which is contrary to law, morals,
good customs, public policy, or public order, the validity of the contract must
be sustained.[7]
The Bill of Lading (short form) No. T-1
dated June 29, 1962 (Annex
“A” and Exh. “1”) provides under
Section thereof (Exh. “1-a”) that, “It
is agreed that the receipt, custody, carriage, delivery and transshipping of
the goods are subject to the terms appearing on the face and back hereof and
also to the terms contained in the carrier’s regular long form bill of lading,
used in this service, including any clauses presently, being stamped
or endorsed thereon which shall be deemed to be incorporated in this bill of
lading, which shall govern the relations, whatsoever they may be, between
shipper, consignee, carrier and ship in every contingency, wheresoever
and whensoever occurring and whether the carrier be
acting as such or as bailee, x x
x.” (Underscoring supplied)
On the other hand, the regular long form Bill of Lading (Annex
“B” and Exh. “2”) provides, inter
alia that:
“The carrier shall not be liable in any capacity whatsoever
for any loss or damage to the goods while the goods are not in its actual
custody.” (Par. 2, last subpar., Underscoring supplied)
xx xx xx xx
xx
“The carrier or master, in the exercise of its or his
discretion and altho‘ transshipment or forwarding of
the goods may not have been contemplated or provided for herein, may at port
of discharge or any other place whatsoever transship or forward the goods or
any part thereof by any means at the risk and expense of the goods and at any
time, whether before or after loading on the ship named herein and by any
route, whether within or outside the scope of the voyage or beyond the port of
discharge or destination of the goods and without notice to the shipper or
consignee. The carrier or master may
delay such transshipping or forwarding for any reason, including but not
limited to awaiting a vessel or other means of transportation whether by the
carrier or others.
“The carrier or master in making arrangements with any person
for or in connection with transshipping or forwarding of the goods or the use
of any means of transportation not used or operated carrier, shall
be considered solely the agent of the shipper and consignee and without any
other responsibility whatsoever or for the cost thereof. The receipt, custody, carriage and delivery
of the goods by any such person or on-carrier and all transshipping and
forwarding shall be subject to all the provisions whatsoever of such person’s
or on-carrier’s form of bill of lading or agreement then in use, whether or not
issued and even though such provisions may be less favorable to the shipper or
consignee in any respect than the provisions of this bill of lading. The shipper and consignee authorize the
carrier or master to arrange with any such person or on-carrier that the lowest
valuation or limitation of liability contained in the bill of lading or other
agreement of such person on on-carrier shall apply.
“All responsibility of the carrier in any capacity shall
altogether cease and the goods shall be deemed delivered by it and this
contract of carriage shall be deemed fully performed on actual or constructive
delivery of the goods to itself as such agent of the shipper and consignee or
to any such person or on-carrier at port of discharge from ship or elsewhere in
case of an earlier transhipment.
“The shipper and consignee shall be liable to this carrier
for and shall indemnify it against all expense of forwarding and transshipping,
including any increase in or additional freight or other charges whatsoever.
“Pending or during forwarding or transshipping this carrier
or the master may store the goods ashore or afloat solely as agent of the
shipper and at the risk and expense of the goods and this carrier shall not be
responsible for the acts, neglect, delay or failure to act of anyone to whom
the goods are entrusted or delivered for storage, handling, or any service
incidental thereto.
“In case the carrier issues a bill of lading covering
transportation by a local or other carrier prior to the goods being delivered
to and put into the physical custody of the carrier, it shall not be under any
responsibility or liability whatsoever for any loss or damage to the goods
occurring prior to or until the actual receipt or custody of the goods by it at
the port or place of transshipment and in arranging for the transportation to
such port or place where the goods are put in its physical custody, it acts
solely as the agent of the shipper.” (Par. 16, Underscoring supplied)
It is admitted by both parties that the crates subject matter of
this action were lost while in the possession and custody of the Manila Port
Service. Since the long form of Bill of
Lading (Annex “B” and Exh. “2”)
provides that “The carrier shall not be liable in any capacity
whatsoever for any loss or damage to the goods while the goods are not in its
actual custody”, appellee
cannot be held responsible for the loss of said crates. For as correctly observed by the lower court,
it is hardly fair to make appellee accountable for a
loss not due to its acts or omissions or over which it had no control.[8]
Contrary to appellant’s stand, the appellee
did not undertake to carry and deliver safely the cargo to the consignee in Davao City. The short form Bill of
Lading (Annex “A” and Exh.
“1”) states in no uncertain terms that the port of discharge of the
cargo is Manila, but that the same
was to be transshipped beyond the port of discharge to Davao City. Pursuant to the terms of the long form Bill
of Lading (Annex “B” and Exh.
“2”), appellee’s responsibility as a
common carrier ceased the moment the goods were unloaded in Manila;
and In the matter of transshipment, appellee acted
merely as an agent of the shipper and consignee. Contrary likewise to appellant’s contention,
the cargo was not transshipped with the use of transportation used or operated
by appellee.
It is true that the vessel used for transshipment is owned and operated
by appellee’s Davao agent, the Columbian Rope
Company, but there is no proof that said vessel is owned or operated by appellee. The
vessels of appellee’s agent are being erroneously
presumed by appellant to be owned and operated by appellee.
Appellant argues that the provisions of the Bill of Lading
exculpating the appellee from liability for cargo
losses, do not apply where full cargo freight is paid up to and beyond the
point of stipulated discharge, and here defendant-appellee
agreed to absorb all costs of forwarding and transshipment – freight having
been prepaid up to Davao
City. But the receipt of full cargo freight up to Davao City
cannot render inoperative, the provisions of the Bill of Lading relied upon by appellee inasmuch as such a situation is not provided
therein as an exception. In fact, one
searches the Bills of Lading (short and long forms) in vain for such an
exception. Besides, it is for the
convenience of both parties that full freight up to Davao
City, had been prepaid, otherwise there would have been need to make further
arrangements regarding the transshipment of the cargo to Davao
City. After all, the long form Bill of
Lading provides that, “The shipper and consignee shall be liable to this
carrier for and shall indemnify it against all expense of forwarding and transshipping, including any increase in or additional
freight or other charges whatsoever.” (Annex “B” and Exh. “2”, par. 6, subpar. 4)
The filing of a claim by defendant-appellee
with the Manila Port Service for the value of the losses cannot be considered
an indication that it is answerable for cargo losses up to Davao City. On the contrary, it is a convincing proof
that said party was not remiss in its duties: as agent or the consignee. That appellee
captioned its claim against the Manila Port Service as “SS ‘Pioneer Moor’ Voy. 25 Reb.
1067 New York/Davao via Manila B/L T-1 31 Package’s
Truck Spare Parts Cons: Davao Parts and Service”, likewise, is no proof that appellee knowingly assumed liability for cargo losses up to
Davao City. It merely showed that the goods would have to
be, as indeed they were, first unloaded in Manila
and thereafter transshipped to Davao
City.
Through the short form Bill of Lading (Annex “A” and Exh. incorporating by reference the terms of the regular long
form bill of lading (Annex “B” and Exh.
“2”), the United States Lines acknowledged the receipt of the cargo
of truck spare parts that it carried, and stated the conditions under which it
was to carry the cargo, the place where it was to be transshipped, the entity
to which delivery is to be made, and the vote of compensation for the
carriage. This it delivered to the Davao Parts and Services, Inc as evidence of a contract
between them. By receiving the bill of
lading, Davao Parts and Services, Inc. assented to
the terms of the consignment contained therein, and became bound thereby, so
far as the conditions named are reasonable in the eyes of the law. Since neither appellant nor appellee alleges that any provision therein is contrary to
law moral’s good customs, public policy, or public order, – and indeed We found
none – the validity of the Bill of Lading must be sustained and the provisions
therein properly applied to resolve the conflict between the parties.
WHEREFORE, the decision appealed from is hereby affirmed,
with costs against the appellant.
SO ORDERED.
Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Sanchez, Ruiz Castro,
Angeles, and Fernando, JJ., concur.
[1]
Record on Appeal, pp. 1-4.
[2]
Record on Appeal, pp. 4-12.
[3]
Record on Appeal, pp. 14-20.
[4]
Record on Appeal, pp. 21-34.
[5] 13 Am. Jur. 2d,
p. 782; Almario’s Transportation and Public Service
Law, 1966 Ed., p 6.
[6]
Art. 1159, Civil Code; Co-Tiangco v. To-Jamco, 3 Phil. 210; Borromeo v.
Franco, 5 Phil. 49; Alcantara v. Alinea, 8 Phil. 111; Compañia
General de Tabacos v. Obed,
13 Phil. 391; 0llendorf v. Abrahamson, 38 Phil. 585; Puyat
& Sons v. Arco 72 Phi. 402; Quizana v.
Redugerio, 50 O.G. 2444, May 7, 1954; Iñigo, et al, v. National Abaca & other Fibers
Corp. and Philippine National Bank, L-5295, Sept. 29, 1954.
[7]
Art. 1306, Civil Code;.Borromeo v. Franco, supra;
Icaza v. Ortega, 5 Phil. 166; Roxas v. Mijares, 9 Phil.
252; Jimeno v. Gacilago,
14 Phil. 16; Jose v. Damian, 14 Phil. 104; Tañido
v. Jumauan, 17 Phil. 335; Yu Tek & Co. v. Gonzales, 29 Phil. 384.
[8] Record
on Appeal, p. 32.