COMPANIA MARITIMA, PLAINTIFF-APPELLANT, VS. JOSE C. LIMSON, DEFENDANT-APPELLANT.

Compania Maritima versus Limson

The Case

This is a case about money owed on both sides of a shipping relationship. Compania Maritima, a shipping company, sued Jose C. Limson, a regular shipper of hogs, cattle, and carabaos and a ship chandler who supplied foodstuffs to its vessels, to collect the balance of his unpaid passage and freight accounts. Limson answered with a counterclaim for the price of foodstuffs he had sold and delivered to the company, for freight payments the company had not accounted for, and for rebates he had earned under a special arrangement. The case matters because it shows how the Supreme Court treats the report of a commissioner in a heavily accounting-driven case, and how it weighs bills of lading, ship's copies, cargo manifests, and delivery receipts as proof of freight charges actually earned and properly debited to a shipper's account.

Procedural History

Compania Maritima filed its complaint for collection in the Court of First Instance of Manila. Limson moved for a bill of particulars, asking that the bills of lading behind the statement of account be attached, and the trial court ordered the company to attach duplicate originals of those bills. Limson then answered, denying liability and setting up his counterclaim. Because the case turned primarily on questions of accounting, the trial court, upon the company's motion and without opposition from Limson, appointed a certified public accountant, Anselmo T. del Rosario, as commissioner to examine the accounts. The commissioner submitted his report, and the trial court rendered judgment based principally on that report. Both parties appealed to the Supreme Court. Compania Maritima raised six assigned errors, and Limson raised one.

Facts

From October 1957 to February 1961, Limson shipped hogs, cattle, and carabaos on the vessels of Compania Maritima from various ports of the Visayas and Mindanao, and he also sold and delivered foodstuffs and supplies to the company. The parties kept a running charge account, and a special arrangement entitled Limson to rebates on freight for shipments from certain ports, including Davao, Cotabato, Dadiangas, Iligan, and Masbate.

In October 1962, Compania Maritima sued Limson for the unpaid balance of his account. Limson denied any liability, claiming full payment, and counterclaimed for the rebates, for freight payments not accounted for, and for the cost of foodstuffs delivered. The commissioner examined the records and reported that Limson's claims totalled 676,416 pesos and five centavos, while the company's claim rested on 1,521 bills of lading. He recommended that only the amount supported by original bills of lading signed by Limson or his agent, 68,209 pesos and 76 centavos, be charged to Limson.

The trial court adopted the commissioner's report in part. It held Limson liable for the bills of lading without originals but supported by other copies, in the total of 166,867 pesos and 28 centavos, yet it held him not liable on the bills not signed by him or his authorized representative, sustaining his claim that a certain Perry was not his representative. It rendered judgment ordering Compania Maritima to pay Limson 441,339 pesos and one centavo, with legal interest from the filing of the counterclaim, plus 5,000 pesos as attorney's fees. Both parties appealed.

Issues

• Whether or not the trial court erred in rejecting the bills of lading signed by Perry, where Limson appeared as shipper or consignee and where other persons appeared as shipper or consignee.
• Whether or not the trial court erred in rejecting the bills of lading unsigned by Limson.
• Whether or not the trial court erred in holding Limson liable for the freight covered by bills of lading whose originals were not submitted.
• Whether or not the trial court erred in its computation of the balance due to Limson, including the rebates to which he was entitled.

Applicable Provisions

The decision does not quote any statutory provision. It rests on the rules of evidence on the presentation of documentary proof, particularly the settled principle that when original documents are lost or destroyed, secondary evidence such as duplicate originals, ship's copies, and cargo manifests may be presented in their place. The Court applied that principle to the bills of lading and manifests offered by Compania Maritima.

Ruling

On the first issue, the Court held that the trial court erred in rejecting the bills of lading signed by Perry. The evidence showed that Perry, whose real name was Cipriano Magtibay, was Limson's regular representative for hogs, introduced as such by Limson himself, and that he signed delivery receipts in the presence of the company's clerks. The Court likewise found that the bills in the names of other persons were for cattle and hogs Limson had purchased from his viajeros or belonged to Marcelino Tinoco, whose freight was charged to Limson's account by agreement.

On the second issue, the Court held that the trial court erred in rejecting the unsigned bills of lading. The company's witnesses testified that when the original bill could not be surrendered, delivery was still authorized and a delivery receipt was prepared from the ship's cargo manifests or the ship's copy of the bill of lading, an accommodation given to Limson as a regular shipper.

On the third issue, the Court found merit in the company's contention that the trial court correctly held Limson liable for the 166,867 pesos and 28 centavos covered by bills whose originals were not submitted, because those charges rested on the carbon originals of the ship's copies and on the cargo manifests, substantiated by supporting documents salvaged after a fire at the San Nicolas bodega or kept in the terminal office. The originals were lost or destroyed during the remodelling of the office building or in that fire.

On the fourth issue, the Court recomputed the account. Taking the total freight charges of 698,159 pesos and 14 centavos from the statement of account, and applying the special rates individually to Limson's shipments, it arrived at freight overcharges or rebates of 111,291 pesos and 18 centavos. Adding the cash payments of 235,007 pesos and 85 centavos, the freight adjustment, and the cost of foodstuffs of 411,982 pesos and 35 centavos, after deducting a double billing, the total came to 759,419 pesos and 83 centavos. Deducting the freight charges of 698,159 pesos and 14 centavos, the balance in favor of Limson is 61,260 pesos and 69 centavos.

Doctrine

A commissioner's report is not binding on the courts, which must test it against the documentary and testimonial evidence. When original bills of lading are lost or destroyed, secondary evidence such as duplicate originals, the ship's copies, and the cargo manifests, supported by delivery receipts, may prove that freight charges were earned and properly debited to a shipper's account. A shipper is bound by the acts of a representative whom he himself introduced to the carrier as authorized to take delivery, and by freight charges he agreed to have debited to his account. Freight rebates under a special arrangement must be computed by applying the agreed special rates to the actual shipments.

Disposition

The Supreme Court modified the judgment, reducing the amount due to Limson to 61,260 pesos and 69 centavos, and resolved the appeals accordingly.

Remember This

Remember that a commissioner's report must yield to the evidence, and that lost originals may be replaced by ship's copies and cargo manifests. Examiners use this case to test the weight of a commissioner's report and the rules on secondary evidence of lost shipping documents.