FREIXAS AND COMPANY, PLAINTIFF AND APPELLANT, VS. PACIFIC MAIL STEAMSHIP CO., DEFENDANT AND APPELLEE.

On the 23d day of May, 1918, the plaintiff, a
regular general copartnership, caused to be delivered on board the
defendant’s steamship Colusa, then in the harbor of San
Francisco, California, one case of hat bands, described in the bill of
lading as one case of dry goods, properly boxed and marked for
transportation to the port of Manila. The plaintiff paid the
freight—not on ad valorem value but on space—on said merchandise from
San Francisco to Manila, in advance, to the defendant’s authorized
representatives in San Francisco. The master of the said steamship
issued and delivered to the plaintiff his bill of lading for said
merchandise, which bill of lading was introduced in evidence as Exhibit
B.

The said steamship Colusa arrived in the port of “Manila
on or about June 19, 1918, but neither the master thereof nor the
defendant herein delivered to the plaintiff the aforesaid one case of
hat bands, although demand was made upon them for its delivery, and the
said steamship departed from the port of Manila without landing said
plaintiff’s merchandise.

The invoice value of the said one case of hat bands at the time of its delivery to the steamship Colusa
was the sum of P1,624.78. This amount was claimed by the plaintiff from
the defendant as damages for failure to deliver the said merchandise,
but the defendant tendered to the plaintiff only the sum of $100, U. S.
currency, in payment of plaintiff’s claim, which tender plaintiff
rejected. Whereupon the present action was instituted.

Upon the foregoing facts in relation with clauses 25 and 27 of the
bill of lading, Exhibit B, the Honorable Geo. R. Harvey, judge, in a
carefully prepared opinion, rendered a judgment in favor of the
plaintiff and against the defendant for the sum of P200, Philippine
currency, with costs against the plaintiff. From that judgment the
plaintiff appealed to this court.

The issue presented by the present case hinges on clauses 25 and 27
of the bill of lading, Exhibit B. Said clauses read as follows:

“25. All liability for loss or damage to
goods shall be determined by their invoice cost plus freight. It is
expressly understood that the Steamship Company is not accountable for
weight, leakage, breakage, insecure packages, chafage to goods in
bales, nor for loss or damage from the effects of climate or decay, or
caused by other cargo in contact or otherwise when properly stowed; nor
for explosion of articles on freight or otherwise, nor from unavoidable
detention or delay, and it is expressly agreed that the goods named in
this Bill of Lading are hereby valued at not exceedingly $100 per
package, and unless a different or other value is expressly written and
declared herein, the liability of the companies therefor, in case of
the total loss of all or any of the said goods from any cause, shall
not exceed $100 per package, and in case of the partial loss of or
damage to any of said goods, the liability of the carriers shall not
exceed such proportion thereof per package as the loss or damage on
each package shall bear to the sum of $100.”

“27. The
shipper hereby represents and declares that the value of each package
described on the face of this bill of lading does not exceed the sum of
$100, unless the shipper shall expressly declare and there shall be
written on the face thereof a different value; and upon such basis of
valuation of said packages, the rate of freight thereon is adjusted.”

The appellant indirectly attacks the validity of the foregoing clauses upon grounds which may be summarized as follows:

(1) That said clauses (25 and 27) of the bill of lading are in
contravention of the principles of article 1601 of our Civil Code;

(2) That said clauses “were probably not within the contemplation of the parties'” when the bill of lading was executed; and

(3) That there was no consideration for said clauses “because the
amount of the freight was not based on the value of the merchandise but
on the cubic foot space occupied by it.”

1. With reference to the first ground above set forth, article 1601 of the Civil Code provides:

“ART. 1601. Carriers of goods by land or by water
shall be subject, with respect to the care and preservation of the
things entrusted to them, to the same obligations as those imposed on
innkeepers by articles 1783 and 1784.

“The provisions of
this article shall be understood to be without prejudice to those of
the Code of Commerce with respect to transportation by sea and land.”

Quoting the foregoing article together with articles 1783 and 1784
and the commentaries of Manresa thereon, appellant contends “that the
Civil Code does not permit any limitation of liability on the carrier’s
part unless the loss or damage occurred through force majeure
or an act of God,” for such limitation would be contrary to public
policy. We have discussed this same question in the case of H. E.
Heacock Co. vs. Macondray & Co. (42 Phil., p. 205, post), which is analogous to the present case. In that case we said:

“Three kinds of stipulations have often been made in a bill of lading. The first is one exempting the carrier from any and all liability for loss or damage occasioned by its own negligence. The second is one providing for an unqualified limitation of such liability to an agreed valuation. And the third
is one limiting the liability of the carrier to an agreed valuation
unless the shipper declares a higher value and pays a higher rate of
freight. According to an almost uniform weight of authority, the first
and second kinds of stipulations are invalid as being contrary to
public policy, but the third is valid and enforceable.” (See cases
cited.)

The clauses of the bill of lading here in question fall within the
third kind of stipulation above described, and are therefore valid and
enforceable. (Union Pacific Ry. Co. vs. Burke, No. 10, Advance Opinions, April 1, 1921, U. S. Supreme Court.)

2. With reference to the second ground invoked by
   the appellant, to wit: That the said clauses were probably not within
   the contemplation of the parties when the bill of lading was executed,
   the following statement clearly appears on the face of said bill of
   lading:

“All the provisions above and on the reverse side of this bill of lading are hereby agreed to on the part of the shipper.

(Sgd.)	“B. BERTOLOME,
	“Shipper.”

The foregoing statement, in our opinion, is conclusive against the
plaintiff in the absence of proof that its representative, B.
Bertolone, signed the same through error or fraud.

3. With reference to the third contention of the
   appellant, it is undisputed that the latter did not declare the
   merchandise in question to be of a higher value than $100 per package,
   but paid the freight therefor upon the express understanding and
   agreement between the parties that its value did not exceed $100 per
   package. The bill of lading shows that the appellant paid $18.18 on two
   packages or cases of dry goods (hat bands), measuring 29 cubic feet.
   While it is true that the unit of measure adopted in fixing the rate of
   freight was the cubic foot of space occupied by the merchandise, it is
   clear that such rate was charged upon the stipulation that the value of
   each package, for which the carrier stood responsible, did not exceed
   $100. (See clause 27, supra.) In other words, if the
   shipper had declared that each package was of the value of Pl,624.78
   instead of P200, he would have had to pay a much higher rate than that
   which he did pay on the basis of a valuation of P200 per package. We
   are, therefore, of the opinion that there was sufficient consideration
   for the clauses or stipulations of the bill of lading in question.

The appellant further contends that the appellee, not having shown
what became of the merchandise in question, is liable for the entire
value thereof, as otherwise it would enrich itself by appropriating the
goods and then pleading limited liability. If this were an action for
conversion of the plaintiff’s chattel and the plaintiff proved that the
defendant had really appropriated the goods in question, there would be
no question but that the defendant would be liable for the full market
value thereof to the plaintiff. But the present is an action to recover
from the defendant carrier the value of the goods carried by it, which
were alleged to have been wholly lost not “by an act of God or any
other excusable event but by and in consequence of the negligence and
carelessness of said defendant and its agents and servants.” (Par. 3,
complaint.) While it was possible for the defendant to have
appropriated the goods in question, yet we are of the opinion that the
defendant cannot be presumed to have done so by the mere fact that it
admits the loss of said goods through its negligence and carelessness,
as alleged in the complaint.

In the case of the Union Pacific Railway Company vs. Burke, supra, the Supreme Court of the United States, in discussing the question before us, said:

“In many cases, from the decision in Hart vs. Pennsylvania R. R. Co. (112 U. S., 331; 28 L. ed., 717; 5 Sup. Ct. Rep., 151, decided in 1884), to Boston & M. R. Co. vs.
Piper (246 U.S., 439; 62 L. ed., 820; 38 Sup. Ct. Rep., 354; Ann. Cas.
1918E, 469, decided in 1918), it has been declared to be the settled
Federal law that if a common carrier gives to a shipper the choice of
two rates, the lower of them conditioned upon his agreeing to a
stipulated valuation of his property in case of loss, even by the
carrier’s negligence, if the shipper makes such a choice,
understandingly and freely, and names his valuation, he cannot
thereafter recover more than the value which he thus places upon his
property.

“As a matter of legal distinction, estoppel is
made the basis of this ruling,—that, having accepted the benefit of the
lower rate, in common honesty the shipper may not repudiate the
conditions on which it was obtained,—but the rule and the effect of it
are clearly established.

“This court has consistently held
the law to be that it is against public policy to permit a common
carrier to limit its common-law liability by contracting for exemption
from the consequences of his own negligence or that of its servants
(112 U. S., 331, 338, and 246 U. S., 439, 444, supra), and
valuation agreements have been sustained only on principles of
estoppel, and in carefully restricted cases where choice of rates was
given,—where ‘the rate was tied to the release.’ Thus in the Hart Case
(p. 343), it is said:

” ‘ The distinct ground of our
decision in the case at bar is, that where a contract of the kind,
signed by the shipper, is fairly made, agreeing on the valuation of the
property carried, with the rate of freight based on the condition that
the carrier assumes liability only to the extent of the agreed
valuation, even in case of loss or damage by the negligence of the
carrier, the contract will be upheld as a proper and lawful mode of
securing a due proportion between the amount for which the carrier may
be responsible and the freight he receives, and of protecting himself
against extravagant and fanciful valuations.’ “

In the case of Boston & M. R. Co. vs. Piper (246 U. S., 439), it was said:

“In the previous decisions of this court upon the
subject it has been said that the limited valuation for which a
recovery may be had does not permit the carrier to defeat recovery
because of losses arising from its own negligence, but serves to fix
the amount of recovery upon an agreed valuation made in consideration
of the lower fate stipulated to be paid for the service.”

For all of the foregoing reasons the judgment of the lower court
should be affirmed, without any finding as to costs in this instance.
So ordered.

Araullo, Streett Avancena, and Villamor, JJ., concur.