EASTERN SHIPPING LINES, INC. PETITIONER, VS. INTERMEDIATE APPELLATE COURT AND DEVELOPMENT INSURANCE & SURETY CORPORATION, RESPONDENTS.

These two cases, both for the recovery of the value of cargo insurance,
arose from the same incident, the sinking of the M/S ASIATICA when it caught
fire, resulting in the total loss of ship and cargo.

The basic facts are not in controversy:

In G.R. No. 69044, sometime in or prior to June, 1977, the
M/S ASIATICA, a vessel operated by petitioner Eastern Shipping Lines, Inc.,
(referred to hereinafter as Petitioner Carrier) loaded at Kobe, Japan for
transportation to Manila, 5,000 pieces of calorized
lance pipes in 28 packages valued at P256,039.00 consigned to Philippine Bloom­ing
Mills Co., Inc., and 7 cases of spare parts valued at P92,361.75, consigned to
Central Textile Mills, Inc.  Both sets of
goods were insured against marine risk for their stated value with respondent
Development Insurance and Sure­ty Corporation.

In G.R. No. 71478, during the same period, the same vessel
took on board 128 cartons of garment fabrics and accessories, in two (2)
containers, consigned to Mariveles Apparel
Corporation, and two cases of surveying instruments consigned to Aman Enterprises and General Merchandise.  The 128 cartons were insured for their stated
value by respondent Nisshin Fire & Marine Insurance Co. for US$46,583.00,
and the 2 cases by respondent Dowa Fire & Marine Insurance Co., Ltd., for
US$11,385.00

Enroute from Kobe, Japan, to Manila,
the vessel caught fire and sank, resulting in the total loss of ship and
cargo.  The respective respondent
Insurers paid the corresponding marine insurance values to the consignees
concerned and were thus subrogated unto the rights of the latter as insured.

G.R. NO. 69044

On May 11, 1978, respondent Development Insurance & Surety
Corporation (Development Insurance, for short), having been subrogated unto the
rights of the two insured companies, filed suit against petitioner Carrier for
the recovery of the amounts it had paid to the insured before the then Court of
First Instance of Manila, Branch XXX (Civil Case No. 116087).

Petitioner-Carrier denied liability mainly on the ground that the
loss was due to an extraordinary fortuitous event, hence, it is not liable
under the law.

On August 31, 1979, the Trial Court rendered judgment in favor of
Development Insurance in the amounts of P256,039.00 and P92,361.75,
respectively, with legal interest, plus P35,000.00 as attorney’s fees and
costs.  Petitioner Carrier took an appeal
to the then Court of Appeals which, on August 14, 1984, affirmed.

Petitioner Carrier is now before us on a Petition for Review on Certiorari.

G.R. NO. 71478

On June 16, 1978, respondents Nisshin Fire & Marine Insurance
Co. (NISSHIN, for short), and Dowa Fire & Marine Insurance Co., Ltd. (DOWA,
for brevity), as subrogees of the insured, filed suit
against Petitioner Carrier for the recovery of the insured value of the cargo
lost with the then Court of First Instance of Manila, Branch II (Civil Case No.
116151), imputing unseaworthiness of the ship and
non-observance of extraordinary diligence by Petitioner Carrier.

Petitioner Carrier denied liability on the principal grounds that
the fire which caused the sinking of the ship is an exempting circumstance
under Section 4(2) (b) of the Carriage of Goods by Sea Act (COGSA); and that
when the loss by fire is established, the burden of proving negli­gence of the
vessel is shifted to the cargo shipper.

On September 15, 1980, the Trial Court rendered judg­ment in
favor of NISSHIN and DOWA in the amounts of US$46,583.00 and US$11,385.00,
respectively, with legal interest, plus attorney’s fees of P5,000.00 and
costs.  On appeal by petitioner, the then
Court of Appeals on September 10, 1984, affirmed with modification the Trial
Court’s judgment by decreasing the amount recoverable by DOWA to US$1,000.00
because of the $500 per package limitation of liability under the COGSA.

Hence, this Petition for Review on Certiorari by
Petitioner Carrier.

Both Petitions were initially denied for lack of merit.  G.R. No. 69044 on January 16, 1985 by the
First Division, and G.R. No. 71478 on September 25, 1985 by the Second
Division.  Upon Petitioner Carrier’s
Motion for Reconsi­deration, however, G.R. No. 69044 was given due course on
March 25, 1985, and the parties were required to submit their respective
Memoranda, which they have done.

On the other hand, in G.R. No. 71478, Petitioner Carrier sought
reconsideration of the Resolution denying the Petition for Review and moved for
its consolidation with G.R. No. 69044, the lower-numbered case, which was then
pending resolution with the First Division. 
The same was granted; the Resolution of the Second Division of September 25, 1985 was set aside and
the Petition was given due course.

At the outset, we reject Petitioner Carrier’s claim that it is
not the operator of the M/S Asiatica but merely a charterer thereof. 
We note that in G.R. No. 69044, Petitioner Carrier stated in its
Petition:

“There are about 22 cases of the ‘ASIATICA’ pend­ing in
various courts where various plaintiffs are repre­sented by various counsel
representing various consignees or insurance companies.  The common defendant in these cases is
petitioner herein, being the operator of said vessel.  x x x  x x x“^[1]

Petitioner Carrier should be held bound to said ad­mission.  As a general rule, the facts alleged in a
party’s pleading are deemed admissions of that party and binding upon it.^[2]
And an admission in one pleading in one action may be received in evidence
against the pleader or his successor-in-interest on the trial of another action
to which he is a party, in favor of a party to the latter action.^[3]

The threshold issues in both cases are:  (1) which law should govern – the Civil Code
provisions on common carriers or the Carriage of Goods by Sea Act?  and (2) who has the burden of proof to show
negligence of the carrier?

On the Law
Applicable

The law of the country to which the goods are to be transported
governs the liability of the common carrier, in case of their loss, destruction
or deterioration.^[4]
As the cargoes in question were transported from Japan to the Philippines, the
liability of Petitioner Carrier is governed primarily by the Civil Code.^[5]
However, in all matters not regulated by said Code, the rights and obliga­tions
of common carrier shall be governed by the Code of Commerce and by special
laws.^[6]
Thus, the Carriage of Goods by Sea Act, a special law, is suppletory
to the provisions of the Civil Code.^[7]

On the Burden of
Proof

Under the Civil Code, common carriers, from the nature of their
business and for reasons of public policy are bound to observe extraordinary
diligence in the vigilance over goods, according to all the circumstances of
each case.^[8]
Common carriers are responsible for the loss, destruction, or deterioration of
the goods unless the same is due to any of the following causes only:

“(1) Flood, storm, earthquake, lightning or other natural
disaster or calamity;

“x x x             x x x“^[9]

Petitioner Carrier claims that the loss of the vessel by fire
exempts it from liability under the phrase “natural disaster or
calamity”.  However, we are of the
opinion that fire may not be considered a natural disaster or calamity.  This must be so as it arises almost invariably
from some act of man or by human means.^[10]
It does not fall within the category of an act of God unless caused by
lightning^[11]
or by other natural disaster or calamity.^[12]
It may even be caused by the actual fault or privity
of the carrier.^[13]

Article 1680 of the Civil Code, which considers fire as an
extraordinary fortuitous event refers to leases of rural lands where a
reduction of the rent is allowed when more than one-half of the fruits have
been lost due to such event, considering that the law adopts a protective
policy towards agriculture.^[14]

As the peril of fire is not comprehended within the exceptions in
Article 1734, supra, Article 1735 of the Civil Code provides that in all
cases other than those mentioned in Article 1734, the common carrier shall be
presumed to have been at fault or to have acted negligently, unless it proves
that it has observed the extraordinary diligence re­quired by law.

In this case, the respective Insurers, as subrogees
of the cargo shippers, have proven that the transported goods have been
lost.  Petitioner Carrier has also proven
that the loss was caused by fire.  The
burden then is upon Petitioner Carrier to prove that it has exercised the
extraordinary diligence required by law. 
In this regard, the Trial Court, concurred in by the Appellate Court,
made the following finding of fact:

“The cargoes in question were, according to the witnesses for
the defendant, placed in hatches No. 2 and 3 of the vessel.  Boatswain Ernesto Pastrana
noticed that smoke was coming out from hatch No. 2 and hatch No. 3; that when
the smoke was noticed, the fire was already big; that the fire must have
started twenty-four (24) hours before the same was noticed; that carbon dioxide
was ordered released and the crew was ordered to open the hatch covers of No. 2
hold for commencement of fire fighting by sea water; that all of these efforts
were not enough to control the fire.

“Pursuant to Article 1733, common carriers are bound to
observe extraordinary diligence in the vigilance over the goods.  The evidence of the defendant did not show
that extraordinary vigilance was observed by the vessel to prevent the
occurrence of fire at hatches num­bers 2 and 3. 
Defendant’s evidence did not likewise show the amount of diligence made
by the crew, on orders, in the care of the cargoes.  What appears is that after the cargoes were
stored in the hatches, no regular inspect­ion was made as to their condition
during the voyage.  Consequently, the
crew could not even explain what could have caused the fire.  The defendant, in the Court’s mind, failed to
satisfactorily show that extraordinary vigilance and care had been made by the
crew to prevent the occur­rence of the fire. 
The defendant, as a common carrier, is liable to the consignees for said
lack of diligence required of it under Article 1733 of the Civil Code.”^[15]

Having failed to discharge the burden of proving that it had
exercised the extraordinary diligence required by law, Petitioner Carrier
cannot escape liability for the loss of the cargo.

And even if fire were to be considered a “natural disaster”
within the meaning of Article 1734 of the Civil Code, it is required under
Article 1739 of the same Code that the “natural disaster” must have
been the “proximate and only cause of the loss”, and that the carrier
has “exercised due diligence to prevent or minimize the loss before,
during or after the occurrence of the disaster”.  This, Peti­tioner Carrier has also failed to
establish satisfactorily.

Nor may Petitioner Carrier seek refuge from liability under the
Carriage of Goods by Sea Act.  It is
provided therein that:

“Sec. 4(2).  Neither the
carrier nor the ship shall be responsible for loss or damage arising or
resulting from

‘(b) Fire, unless caused by the actual fault or privity
of the carrier.

x x x                 x x x“

In this case, both the Trial Court and the Appellate Court, in
effect, found, as a fact, that there was “actual fault” of the
carrier shown by “lack of diligence” in that “when the smoke was
noticed, the fire was already big; that the fire must have started twenty-four
(24) hours before the same was noticed;” and that “after the cargoes
were stored in the hatches, no regular inspection was made as to their
condition during the voyage.” The foregoing suffices to show that the
circumstances under which the fire originated and spread are such as to show
that Petitioner Carrier or its servants were negligent in connection
therewith.  Consequently, the complete
defense afforded by the COGSA when loss results from fire is unavailing to
Petitioner Carrier.

On the US $500 Per
Package Limitation:

Petitioner Carrier avers that its liability if any, should net
exceed US$500 per package as provided in section 4(5) of the COGSA, which
reads:

“(5) Neither the carrier nor the ship shall in any event be or
become liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per package lawful money of
the United States, or in case of goods not shipped in packages, per customary
freight unit or the equivalent of that sum in other currency, unless the nature
and value of such goods have been declared by the shipper before shipment and
inserted in bill of lading.  This
declaration if embodied in the bill of lading shall be prima facie evidence,
but shall be conclusive on the carrier.

“By agreement between the carrier, master or agent of the
carrier, and the shipper another maximum amount than that mentioned in this
paragraph may be fixed:  Pro­vided, That
such maximum shall not be less than the figure above named.  In no event shall the carrier liable for more
than the amount of damage actually sustained.”

x x x

Article 1749 of the New Civil Code also allows the limitations of
liability in this wise:

“Art. 1749.  A
stipulation that the common carrier’s liability is limited to the value of the
goods appearing in the bill of lading, unless the shipper or owner de­clares a
greater value, is binding.”

It is to be noted that the Civil Code does not of itself limit
the liability of the common carrier to a fixed amount per package although the
Code expressly permits a stipulation limiting such liability.  Thus, the COGSA, which is suppletory
to the provisions of the Civil Code, steps in and supplements the Code by
establishing a statutory provision limiting the carrier’s liability in the
absence of a declaration of a higher value of the goods by the shipper in the
bill of lading.  The provisions of the
Carriage of Goods by Sea Act on limited liability are as much a part of a bill
of lading as though physically in it and as much a part thereof as though
placed therein by agreement of the parties.^[16]

In G.R. No. 69044, there is no stipulation in the
respective Bills of Lading (Exhibits “C-2” and “I-3”)^[17]
limiting the carrier’s liability for the loss or destruction of the goods.  Nor is there a declaration of a higher value
of the goods.  Hence, Petitioner
Carrier’s liability should not exceed US$500 per package, or its peso
equivalent, at the time of payment of the value of the goods lost, but in no
case “more than the amount of damage actually sustained.”

The actual total loss for the 5,000 pieces of calorized
lance pipes was P256,039 (Exhibit “C”), which was exactly the amount
of the insurance coverage by Development Insurance (Exhibit “A”), and
the amount affirmed to be paid by respond­ent Court.  The goods were shipped in 28 packages
(Exhibit “C-2”).  Multiplying
28 packages by $500 would result in a product of $14,000 which, at the current
exchange rate of P20.44 to US$1, would be P286,160, or “more than the
amount of damage actually sustained”. 
Consequently, the aforestated amount of
P256,039 should be upheld.

With respect to the seven (7) cases of spare parts (Exhibit
“I-3”), their actual value was P92,361.75 (Exhibit “I”),
which is likewise the insured value of the cargo (Exhi­bit “H”) and
which amount was affirmed to be paid by respondent Court.  However, multiplying seven (7) cases by $500
per package at the present prevailing rate of P20.44 to US$1 (US$3,500 x
P20.44) would yield P71,540 only, which is the amount that should be paid by
Petitioner Carrier for those spare parts, and not P92,361.75.

In G.R. No. 71478, in so far as the two (2) cases of
surveying instruments are concerned, the amount awarded to DOWA, which was
already reduced to $1,000 by the Appellate Court following the statutory $500
liability per package, is in order.

In respect of the shipment of 128 cartons of garment fabrics in
two (2) containers and insured with NISSHIN, the Appellate Court also limited
Petitioner Carrier’s liabi­lity to $500 per package and affirmed the award of
$46,583 to NISSHIN.  It multiplied 128
cartons (considered as COGSA packages) by $500 to arrive at the figure of
$64,000, and explained that “since this amount is more than the insured value
of the goods, that is $46,583, the Trial Court was correct in awarding said
amount only for the 128 cartons, which amount is less than the maximum
limitation of the carrier’s liability”.

We find no reversible error. 
The 128 cartons and not the two (2) containers should be considered as
the shipping unit.

In Mitsui & Co., Ltd. vs. American Export Lines, Inc. 636 F
2d 807 (1981), the consignees of tin ingots and the shipper of floor covering
brought action against the vessel owner and operator to recover for loss of
ingots and floor covering, which had been shipped in vessel-supplied
containers.  The U.S. District Court for
the Southern District of New York rendered judgment for the plaintiffs, and the
defendant appealed.  The United States
Court of Appeals, Second Division, modified and affirmed holding that:

“When what would ordinarily be considered packages are shipped
in a container supplied by the carrier and the number of such units is
disclosed in the shipping documents, each of those units and not the container
constitutes the ‘package’ referred to in liability limitation provision of
Carriage of Goods by Sea Act.  Carriage
of Goods by Sea Act, § 4(5), 46 U.S.C.A. § 1304(5).

“Even if language and purposes of Carriage of Goods by Sea Act
left doubt as to whether carrier-furnished containers whose contents are
disclosed should be treated as packages, the interest in securing international
uni­formity would suggest that they should not be so treated.  Carriage of Goods by Sea Act, §4(5), 46
U.S.C.A. § 1304(5).

 “x x
x After quoting the statement in Leather’s Best,
supra, 451 F 2d at 815, that treating a container as a package is inconsistent
with the congressional pur­pose of establishing a reasonable minimum level of
lia­bility, Judge Beeks wrote, 414 F. Supp. at 907
(footnotes omitted):

Although this approach has not completely escaped criticism, there
is, nonetheless, much to commend it.  It
gives needed recognition to the responsibility of the courts to construe and
apply the statute as enacted, however great might be the temptation to ‘modernize’
or reconstitute it by artful judicial gloss. 
If COGSA’s package limitation scheme suffers
from internal illness, Congress alone must undertake the surgery.  There is, in this regard, obvious wisdom in
the Ninth Circuit’s conclusion in Hartford that techno­logical advancements,
whether or not forseeable by the COGSA promulgators,
do not warrant a dis­tortion or artificial construction of the statu­tory term
‘package’.  A ruling that these large
reusable metal pieces of transport equipment qualify as COGSA packages – at
least where, as here, they were carrier-owned and supplied – would amount to
just such a distortion.

Certainly, if the individual crates or cartons prepared by the
shipper and containing his goods can rightly be considered ‘packages’ standing
by themselves, they do not suddenly lose that character upon being stowed in a
carrier’s con­tainer.  I would liken
these containers to detachable stowage compartments of the ship.  They simply serve to divide the ship’s
overall cargo stowage space into smaller, more serviceable loci.  Shippers’ packages are quite literally
‘stowed’ in the containers utilizing stevedoring practices and materials
analogous to those employed in traditional on board stowage.

In Yeramex International v. S.S. Tando, 1977 A.M.C. 1807 (E.D. Va.), rev’d
on other grounds, 595 F 2d 943 (4 Cir. 1979), another district with many
maritime cases followed Judge Beeks‘ reasoning in
Matsushita and similar­ly rejected the functional economics test.  Judge Kellam held
that when rolls of polyester goods are packed into cardboard cartons which are
then placed in containers, the cartons and not the containers are the packages.

“x x x                x x x “

The case of Smithgreyhound v. M/V Eurygenes^[18]
followed the Mitsui test:

“Eurygenes concerned a shipment of
stereo equipment packaged by the shipper into cartons which were then placed by
the shipper into a carrier-furnished container. 
The number of cartons was disclosed to the carrier in the bill of
lading.  Eurygenes
followed the Mitsui test and treated the cartons, not the container, as the
COGSA packages.  However, Eurygenes indicated that a carrier could limit its
liability to $500 per container if the bill of lading failed to disclose the
number of cartons or units within the container, or if the parties indicated,
in clear and unambiguous language, an agreement to treat the container as the
package.”

(Admiralty Litigation in Perpetuum:  The
Continuing Saga of Package Limitation and Third World Delivery Problems by
Chester D. Hooper & Keith L. Flicker, published in Fordham International
Law Journal, Vol. 6, 1982-83, Number 1) (Emphasis supplied)

In this case, the Bill of Lading (Exhibit “A”)
disclosed the following data:

” 2 Containers

” (128 Cartons)

==========

” Men’s Garments Fabrics and Accessories Freight Prepaid

” Say:  Two (2)
Containers Only.”

Considering, therefore, that the Bill of
Lading clearly disclosed the contents of the containers, the number of cartons
or units, as well as the nature of the goods, and applying the ruling in the Mitsui
and Eurygenes cases it is clear that the 128
cartons, not the two (2) containers should be considered as the shipping unit
subject to the $500 limi­tation of liability.

True, the evidence does not disclose whether the containers
involved herein were carrier-furnished or not usually, however, containers are
provided by the carrier.^[19]
In this case, the probability is that they were so furnished for Petitioner
Carrier was at liberty to pack and carry the goods in containers if they were
not so packed.  Thus, at the dorsal side
of the Bill of Lading (Exhibit “A”) appears the following stipulation
in fine print:

“11.  (Use of Container)
Where the goods receipt of which is acknowledged on the face of this Bill of
Lading are not already packed into container(s) at the time of receipt, the
Carrier shall be at liberty to pack and carry them in any type of
container(s).”

The foregoing would explain the use of the estimate “Say:  Two (2) Containers Only” in the Bill of
Lading, meaning that the goods could probably fit in two (2) con­tainers
only.  It cannot mean that the shipper
had furnished the containers for if so, “Two (2) Containers”
appearing as the first entry would have sufficed.  And if there is any ambiguity in the Bill of
Lading, it is a cardinal principle in the construction of contracts that the
interpretation of obscure words or stipulations in a contract shall not favor
the party who caused the obscurity.^[20]
This applies with even greater force in a contract of adhesion where a contract
is already prepared and the other party merely adhere to it, like the Bill of
Lading in this case, which is drawn up by the carrier.^[21]

On Alleged Denial of
Opportunity to Present Deposition of Its Witnesses:  (in G.R. No. 69044 only)

Petitioner Carrier claims that the Trial Court did not give it
sufficient time to take the depositions of its witnesses in Japan by written
interrogatories.

We do not agree. 
Petitioner Carrier was given full opportunity to present its evidence
but it failed to do so.  On this point,
the Trial Court found:

“x x x             x x x

“Indeed, since after November 6, 1978, to August 27, 1979, not
to mention the time from June 27, 1978, when its answer was prepared and filed
in Court, until September 26, 1978, when the pre-trial conference was conducted
for the last time, the defendant had more than nine months to prepare its
evidence.  Its belated notice to take
deposition on written interrogatories of its witnesses in Japan, served upon
the plaintiff on August 25th, just two days before the hearing set for August
27th, knowing fully well that it was its undertaking on July 11th that the
deposition of the witnesses would be dis­pensed with if by next time it had not
yet been obtained, only proves the lack of merit of the defendant’s motion for
postponement, for which reason it deserves no sympathy from the Court in that
regard.  The defendant has told the Court
since February 16, 1979, that it was going to take the deposition of its
witnesses in Japan.  Why did it take
until August 25, 1979, or more than six months, to prepare its written
interrogatories.  Only the defendant
itself is to blame for its failure to adduce evidence in support of its
defenses.

x x x              x x x “^[22]

Petitioner Carrier was afforded ample time to present its side of
the case.^[23]
It cannot complain now that it was denied due process when the Trial Court
rendered its Decision on the basis of the evidence adduced.  What due pro­cess abhors is absolute lack of
opportunity to be heard.^[24]

On the Award of
Attorney’s Fees:

Petitioner Carrier questions the award of attorney’s fees.  In both cases, respondent Court affirmed the
award by the Trial Court of attorney’s fees of P35,000.00 in favor of
Development Insurance in G.R. No. 69044, and P5,000.00 in favor of NISSHIN and
DOWA in G.R. No. 71478.

 Courts being vested with
discretion in fixing the amount of attorney’s fees, it is believed that the
amount of P5,000.00 would be more reasonable in G.R. No. 69044.  The award of P5,000.00 in G.R. No. 71478 is
affirmed.

WHEREFORE, 1) in G.R. No. 69044, the judgment is modified
in that petitioner Eastern Shipping Lines shall pay the Development Insurance
and Surety Corporation the amount of P256,039 for the twenty-eight (28)
packages of calorized lance pipes, and P71,540 for
the seven (7) cases of spare parts, with interest at the legal rate from the
date of the filing of the Complaint on June 13, 1978, plus P5,000 as attorney’s
fees, and the costs.

2)  In G.R. No. 71478, the
judgment is hereby affirmed.

SO ORDERED.

Narvasa, Cruz, Feliciano, and Gancayco, JJ., concur.

Yap, J., see concurring and
dissenting opinion.

Sarmiento, J., concur on concurring and dissenting opinion of J. Yap.

---

^[1]
Petition, p. 6, Rollo of G.R No. 69044, p. 15.

^[2] Granada
vs. PNB, 18 SCRA 1 (1966); Gardner vs. CA, 131 SCRA 85 (1984).

^[3] p.
51, Vol. 5, Rules of Court by Ruperto G. Martin,
citing 31 C.J.S., 1075.

^[4]
Article 1753 Civil Code.

^[5]
see Samar Mining Co., Inc. vs. Nordeutscher Lloyd, 132 SCRA 529 (1984).

^[6]
Art. 1766, Civil Code; Samar Mining Co. Inc. vs.
Lloyd, supra.

^[7]
See American President Lines vs. Klepper, 110
Phil. 243, 248 (1960).

^[8]
Article 1733 Civil Code.

^[9]
Article 1734, Civil Code.

^[10]
Africa vs. Caltex (Phil.) 16 SCRA 448, 455
(1966).

^[11]
Lloyd vs. Haugh & K. Storage &
Transport Co., 223 Pa. 148, 72 A 516; Forward v. Pittard,
ITR 27, 99 Eng. Reprint, 953.

^[12]
Article 1734, Civil Code.

^[13]
Section 4, Carriage of Goods by Sea Act.

^[14] Manresa, cited in p. 147, V, Outline of Civil Law, J.B.L.
Reyes and R.C. Puno.

^[15]
Decision, Court of Appeals in CA-G.R. No. 67848-R, appealed in G.R. No. 71478.

^[16] Shackman v. Cunard White
Star, D.C. N.Y. 1940, 31 F Supp. 948, 46 USCA 866; cited in Phoenix Assurance
Company vs. Macondray, 64 SCRA 15 (1975).

^[17]
Folio of Exhibits, pp. 6 and 23.

^[18]
666 F. 2d 746, 1982 A.M.C. 320 (2d Cir. 1981).

^[19]“A
container is a permanent reusable article of transport equipment – not
packaging of goods durably made of metal, and equipped with doors
for easy access to the goods and for repealed use.  It is designed to facilitate the handling,
loading, stowage aboard ship, carriage, discharge from ship, movement, and
transfer of large numbers of packages simultaneously by mechanical means to
minimize the cost and risks of manually processing each package
individually.  It functions primarily as
ship’s gear for cargo handling, and is usually provided by the carrier.  (Simon, The Law of Shipping Containers)”
(Emphasis ours).

^[20]
Article 1377, Civil Code.

^[21]
See Qua Chee Gan vs.
Law Union & Rock Ins. Co., Ltd., 98 Phil. 85 (1956).

^[22]
Amended Record on Appeal, Annex “D”, p. 62; Rollo
in G.R. No. 69044, p. 89.

^[23]
Associated Citizens Bank vs. Ople, 103 SCRA
130 (1981).

^[24] Tajonera vs. Lamaroza, 110
SCRA 438 (1981).

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