Duty to Exercise Extraordinary Diligence

F.C. Fisher v. Yangco Steamship Company

G.R. No. 8095, November 5, 1914, and March 31, 1915
Careon, J.

FACTS:
The plaintiff is a stockholder in the Yangco Steamship Company, the owner of a large
number of steam vessels, duly licensed to engage in the coastwise trade of the Philippines.
On or about June 10, 1912, the directors of the company adopted a resolution which was
thereafter ratified and affirmed by the shareholders of the company, expressly declaring
and providing that the classes of merchandise to be carried by the company in its business
as a common carrier do not include dynamite, powder or other explosives, and expressly
prohibiting the officers, agents and servants of the company from offering to carry,
accepting for carriage or carrying said dynamite, powder or other explosives. Thereafter,
the respondent Acting Collector of Customs, J.S. Stanley, demanded and required of the
company the acceptance and carriage of such explosives. The Acting Collector refused and
suspended the issuance of the necessary clearance documents of the vessels of the
company unless and until company accepts such explosives for carriage.

ISSUE:
Whether or not the conduct on the part of the steamship company and its officers
involves in any instance an undue, unnecessary or unreasonable discrimination.

HELD:
Common carriers in this jurisdiction cannot lawfully decline to accept a particular
class of goods for carriage, to the prejudice of the traffic in those goods, unless it appears
that for some sufficient reason the discrimination against the traffic in such goods is
reasonable and necessary. Indeed it cannot be doubted that the refusal of Steamship
Company to receive for carriage any such explosives on any of its vessels would subject the
traffic in such explosives to a manifest prejudice and discrimination. It is not alleged in the
complaint that all, or indeed any of the defendant companys vessels are unsuited for the
carriage of such explosives.













Sarkies Tours Philippines, Inc. v. Court of Appeals
G.R. No. 108897, October 2, 1997
Romero, J.

FACTS:
On August 31, 1984, Fatima Fortades boarded petitioners De Luxe Bus No. 5 in
Manila on her way to Legazpi City. Her brother Raul helped her loaded three pieces of
luggage containing all of her optometry books, materials and equipment, trial lenses, trial
contact lenses, passport and visa, as well as her mother Mirasols U.S. immigration card.
Her belongings were kept in the baggage compartment of the bus, but during the stopover
at Daet, it was discovered that only one bag remained in the open compartment. The
others, including Fatimas things, were missing. Some of the passengers suggested
retracing the route of the bus to try to recover the lost items, but the driver ignored them.
Private respondents asked assistance from radio stations and even from Philtanco bus
drivers who plied the same route on August 31
st
. The effort paid off when one of Fatimas
bags was recovered. Respondents decided to file a complaint to recover the value of the lost
items.

ISSUE:
Whether or not Sarkies Tours Philippines, Inc. failed to observe the extraordinary
diligence.

HELD:
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
the goods xxx transported by them, and this liability lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier fro transportation
until the same are delivered, actually or constructively, by the carrier to xxx the person
who has a right to receive them, unless the loss is due to any of the excepted cause under
Article 1734 thereof. The cause of the loss in the case at bar was petitioners negligence in
not ensuring that the doors of the compartment were securely fastened. As a result of this
negligence, almost all of the luggage was lost, to the prejudice of the paying passengers.














Defense of Common Carriers

De Guzman v Court of Appeals
G.R. No. L-47822, December 22, 1988
Feliciano, J.

FACTS:
Respondent Ernesto Cedana, a junk dealer, was engaged in buying up used bottles
and scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap materials,
respondent would bring such materials to Manila for resale. He owns 2 six-wheeler trucks
to haul the materials to Manila. On the return trip to Pangasinan, he would load his truck
with cargo which various merhcants wanted delivered to differing establishments in
Pangasinan. In November 1970, petitioner Pedro de Guzman, an authorized dealer of
General Milk Company contracted with respondent for the hauling of 750 cartons of
Liberty filled milk. 150 cartons loaded on a truck driven respondent while 600 cartons
were placed on board the other truck driven by Manuel Strada, respondents driver and
employee. However, the 600 boxes never reached petitioner since armed men hijacked the
truck along MacArthur Highway in Paniqui, Tarlac.

ISSUE:
Whether or not the hijacking of respondents truck a force majeure.

HELD:
The hijacking of the carriers truck does not fall within any of the five (5) exempting
cases listed in Article 1734. It would follow, therefore, that the hijacking of the carriers
vehicle must be dealt with under the provisions of Article 1735, in other words, that the
private respondent as common carrier is presumed to have been at fault or to have acted
negligently. Moreover, under Article 1745 (6), a common carrier is held responsible and
will not be allowed to divest or diminish such responsibility even for acts of strangers like
thieves or robbers, except where such thieves or robbers in fact acted with grave or
irresistible threat, violence or force. In the case, three (3) of the five (5) hold-uppers were
armed with firearms. The robbers not only took away the truck and its cargo but also
kidnapped the driver and his helper, detaining them for several days and later releasing
them in another province (in Zambales). Wherefore, the goods are lost as a result of
robbery which is attended by grave or irresistible threat, violence or force.











Bascos v. Court of Appeals
G.R. No. 101089, April 7, 1993
Campos, Jr., J.

FACTS:
Rodolfo Cipriano representing Cipriano Trading Enterprise (CIPTRADE) entered
into a hauling contract with Jibfair Shipping Agency Corporation whereby the former
bound itself to haul the latters 2000 m/tons of soya bean meal from Magallanes to the
warehouse Purefoods Corporation in Calamba. To carry out its obligation, CIPTRADE,
through Cipriano, subcontracted with Estrellita Bascos (petitioner) to transport and to
deliver 400 sacks of soya bean meal from the Manila Port Area to Calamba. Petitioner failed
to deliver the said cargo due to a force majeure. The truck carrying the cargo was hijacked
in Paco, Manila.

ISSUE:
Whether or not the common carrier is liable to the petitioner.

HELD:
The Court affirms the holding of the respondent court that the loss of the goods was
not due to force majeure. In De Guzman v. CA, the Court held that hijacking, not being
included in the provisions of Article 1734, must be dealt with under the provisions of
Article 1735 and thus, the common carrier is presumed to have been at fault or negligent.
To exculpate the carrier from liability arising from hijacking, he must prove that robbers or
the hijackers acted with grave or irresistible threat, violence, or force (Article 1745). The
common carrier must prove that it exercised extraordinary diligence in order to overcome
the presumption. The petitioners own failure to adduce sufficient proof of extraordinary
diligence made the presumption conclusive against her.



















Servando v. Philippine Steam Navigation Co.
G.R. No. L-36481-2, October 23, 1982
Escolin, J.

FACTS:
On November 6, 1963, appellees Clara Uy Bico and Amparo Servando loaded on
board the appellants vessel for carriage from Manila to Pulupandan, Negros Occidental the
following cargoes: 1,528 cavans of rice and 44 cartons of colored paper, toys and general
merchandise. Upon arrival of the vessel at Pupupandan in the morning, the cargoes were
discharged, complete and in good order, unto the warehouse of the Bureau of Customs. In
the afternoon of the same day, said warehouse was razed by fire of unknown origin,
destroying appellees cargoes.

ISSUE:
Whether or not the fire in the Bureau of Customs warehouse considered as a caso
fortuito.

HELD:
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. 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: xxx 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; xxx fire xxx. This
agreement is mere iteration of the basic principle of law written in Article 1174 of the Civil
Code. It defined caso fortuito as an event that takes place by accident and could not have
been foreseen. In the case at bar, the burning of the customs warehouse was an
extraordinary event which happened independently of the will of the appellant.
















Edgar Cokaliong Shipping Lines v. UCPB General Insurance
G.R. No. 146018, June 25, 2003
Panganiban, J.

FACTS:
Sometime in December 11, 1991, Nestor Angelia delivered to the Edgar Cokaliong
Shipping Lines, Inc. cargo consisting of one (1) carton of Christmas dcor and two (2) sacks
of plastic toys, to be transported on board the M/V Tandag on its Voyage No. T-189
scheduled to depart from Cebu City, on December 12, 1991, for Tandag, Surigao del Sur
(Bill of Lading No. 58). Zosimo Mercado likewise delivered a cargo to Cokaliong Shipping
Lines consisting of two (2) cartons of plastic toys and Christmas dcor, one (1) roll of floor
mat and one (1) bundle of various or assorted goods for transportation thereof from Cebu
to Tandag, Surigao del Sur, on board the said vessel, and said voyage (Bill of Lading No. 59).
Feliciana Legaspi insured the cargo covered by Bill of Lading No. 58 and 59 with the UCPB
General Insurance Co., Inc. Unfortunately, after the vessel had passed Mandaue-Mactan
Bridge, fire ensued in the engine room and, despite earnest efforts of the officers and crew
of the vessel, the fire engulfed and destroyed the entire vessel resulting in the loss of the
vessel and cargoes therein.

ISSUE:
Whether or not the fire that ensued in the engine room of the vessel considered a
force majeure.

HELD:
The Court is not convinced that the petitioner exercised due diligence as proven by
the findings of the Philippine Coast Guard. The uncontroverted findings show that the M/V
Tandag sank due to a fire, which resulted from a crack in the auxiliary engine fuel oil
service tank. The crack was located on the side of the fuel oil tank, which had a mere two-
inch gap from the engine room walling, this precluding constant inspection and care by the
crew. Having originated from an unchecked crack in the fuel oil service tank, the fire could
not have been cause by a force majeure. For majeure generally, applies to a natural
accident such as that caused by lighting, an earthquake, a tempest or public enemy. Hence,
a fire is not considered a natural disaster or calamity. The loss of cargo resulted from the
failure of the officers of the vessel to inspect their ship frequently so as to discover the
existence of cracked parts. The loss cannot be attributed to force majeure, but to the
negligence of those officials. The common carrier failed to prove that it exercised due
diligence over the goods it transported.









Eastern Shipping Lines, Inc. v. IAC
G.R. No. L-69044, May 29, 1987
Melencio-Herrera, J.

FACTS:
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 to the
total loss of ship and cargo. In G.R. No. 69044, the M/S ASIATICA, a vessel operated by
petitioner Eastern Shipping Lines, Inc., (Petitioner Carrier) loaded at Kobe, Japan fro
transportation to Manila, 5,000 pieces of calorized lance pipes in 28 packages consigned to
the Philippine Blooming Mills, Co., Inc., and 7 cases of spare parts cosigned to Central textile
Mills, Inc. Both sets of goods were insured against marine risk.
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 (2) cases of surveying instruments consigned to Aman
Enterprises and General Merchandise.
Enroute for 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.

ISSUE:
Whether or not the loss was due to an extraordinary fortuitous event.

HELD:
Pursuant to Article 1733, common carriers are bound to observe extraordinary
diligence in the vigilance over the goods. The Petitioner Carrier failed to discharge the
burden of proving that it had exercised the extraordinary diligence required by law. Thus,
Petitioner Carrier cannot escape liability for the loss of the cargo. Under Article 1739, 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. Both the Trial Court and the Appellate Court 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 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.











Ganzon v. Court of Appeals, Tumambing
G.R. No. L-48757, May 30, 1988
Sarmiento, J.

FACTS:
The private respondent, Gelacio Tumambing contracted the services of Mauro
Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan to the port of Manila on
board the lighter LCT Batman. On December 1, 1956, Tumambing delivered the scrap
iron to Filomeno Niza, captain of the lighter, for loading which was actually begun on the
same day by the crew of the lighter. When about half of the scrap iron was already loaded,
Mayor Advincula of Mariveles, arrived and demanded Php5, 000 from Tumambing. The
latter resisted then Mayor Advincula drew his gun and fired it at Tumambing. After
sometime, the laoding of the scrap iron was resumed, however, on December 4, Acting
Mator Rub, accompanied by three policemen ordered Niza and his crew to dump the scrap
iron. The rest was brought to the compound of NASSCO.

ISSUE:
Whether or not the loss of the scarp iron was due to a fortuitous event.

HELD:
The petitioner was not duty bound to obey the illegal order to dump into the sea the
scrap iron. Moreover, there is absence of sufficient proof that the issuance of the same
order was attended with such force or intimidation as to completely overpower the will of
the petitioners employees. The mere difficulty in the fulfillment of the obligation is not
considered force majeure. The Court agrees with the private respondent that the scraps
could have been properly unloaded at the shore or at the NASSCO compound, so that after
the dispute with the local officials concerned was settled, the scraps could then be
delivered in accordance with the contract of carriage.


















Stipulation Limiting Liability of Carrier

Calvo v. UCPB General Insurance Co., Inc.
G.R. No. 148496, March 19, 2002
Mendoza, J.

FACTS:
Petitioner Virgines Calvo is the owner of Transorient Container Terminal Services,
Inc. The petitioner entered into a contract with San Miguel Corporation (SMC) for the
transfer of 114 reels of semi-chemical fluting paper and 124 reels of kraft linerboard from
the Port Area in Manila to SMCs warehouse at the Tabacalera Compound, Ermita, Manila.
The cargo was insured by respondent UCPB. On July 14, 1990, the shipment arrived in
Manila on board M/V Hayakawa Maru and, after 24 hours were unloaded from the vessel to
the custody of the arrastre operator. The petitioner, pursuant to her contract with SMC,
withdrew the cargo from the arrastre operator and delivered it to SMCs warehouse in
Ermita. The good were inspected by the Marine Cargo Surveyors and found that 15 reels of
the semi-chemical fluting paper were wet/stained/torn and 3 reels of kraft linerboard
were likewise torn. SMC collected from respondent UCPB payment.

ISSUE:
Whether or not the petitioner is responsible for the loss, destruction or
deterioration of the goods despite a stipulation limiting its liability.

HELD:
Under Article 1734 (4), which provides 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: (4) The character if the goods or defects in the packaging or in the
containers. For this provision to apply, according to the Supreme Court, the rule is that if
the improper packing or, in this case, the defect/s in the container, is/are known to the
carrier or his employees or apparent upon ordinary observation, but nevertheless accepts
the same without protest or exception notwithstanding such condition, he is not relieved of
liability. In this case, petitioner accepted the cargo without exception despite the apparent
defects in some of the container vans. Hence, for failure of petitioner to prove that she
exercised extraordinary diligence in the carriage of goods in this case or that she is exempt
from liability, the presumption of negligence as provided under Article 1735 holds.











Belgian Overseas Chartering v. Philippine First Insurance
G.R. No. 143133, June 5, 2002
Panganiban, J.

FACTS:
On June 13, 1990, CMC Trading A.G. shipped on board the M/V Anangel Sky at
Hamburg, Germany 242 coils of various Prime Gold Rolled Steel sheets for transportation
to Manila consigned to the Philippine Steel Trading Corporation. On July 28, M/V Anangel
Sky arrived at the port of Manila and, within subsequent days, discharged the subject cargo.
Four (4) coils were found to be in bad order. The coils were found to be unfit for the
intended purpose.

ISSUE:
Whether or not the petitioner have overcome the presumption of negligence.

HELD:
Well-settled is the rule that common carriers, from the nature of their business and
for reasons of public policy, are bound to observe extraordinary diligence and vigilance
with respect to the safety of the goods and the passengers they transport. Thus, common
carriers are required to render service with the greatest skill and foresight and to use all
reasonable means to ascertain the nature and characteristics of the goods tendered for
shipment, and to exercise due care in the handling and stowage, including such methods as
their nature requires. The extraordinary responsibility lasts from the time the goods are
unconditionally placed in the possession of and received for transportation by the carrier
until they are delivered, actually or constructively, to the consignee or to the person who
has a right to receive them.
Owing to this high degree of diligence required of them, common carriers, as a
general rule, are presumed to have been at fault or negligent if the goods they transported
deteriorated or got lost or destroyed. That is, unless they prove that they exercised
extraordinary diligence in transporting the goods. In order to avoid responsibility for any
loss or damage, therefore, they have the burden of proving that they observed such
diligence.
Corollary to the foregoing, mere proof of delivery of the goods in good order to a
common carrier and of their arrival in bad order at their destination constitutes a prima
facie case of fault or negligence against the carrier. If no adequate explanation is given as to
how the deterioration, the loss or the destruction of the goods happened, the transporter
shall be held responsible.
That petitioners failed to rebut the prima facie presumption of negligence is revealed in the
case at bar by a review of the records and more so by the evidence adduced by respondent.







Duty to Deliver Goods

Macam v. Court of Appeals
G.R. No. 125524, August 25, 1999
Bellosillo, J.


FACTS:
Petitioner Benito Macam shipped on board the vessel Nen Jiang, through local agent
respondent Wallem Philippines Shipping, Inc. watermelons valued at US$5,950.00 and
fresh mangoes valued at US$14,273.46. The shipment was bound for Hongkong with
Pakistan Bank as consignee and Great Prospect Company of Kowloon, Hongkong as notify
party. Petitioners depository bank. Consolidated Banking Corporation(SOLIDBANK) 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 but was refused. Petitioner returned the amount
involved to SOLIDBANK, and then demanded payment from respondent WALLEM in
writing but to no avail.
Hence petitioner sought collection of the value of the shipment if US$20,223.46 from
respondents before the RTC of Manila, bases on delivery of the shipment to GPC without
presentation of the bills of lading and bank guarantee.

ISSUE:
Whether or not respondents are liable to petitioner for releasing the goods to GPC
without the bills of lading or bank guarantee?

HELD:
Under Art. 1736 of the Civil Code, the extraordinary responsibility of the common
carrier 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 notifying 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
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.
From the testimony of petitioner, we gather that he has been transacting with GPC
as buyer/importer for around 2 to 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.





































Samar Mining Co. v. Nordeutscher Lloyd
G.R. No. L-28673, October 23, 1984
Cuevas, J.

FACTS:
The case arose from an importation made by plaintiff, SAMAR of one crate Optima
welded wedge wire sieves through the M/S SCHWABENSTEIN a vessel owned by defendant
NORDEUTSCHER LLOYD, (represented in the Philippines by its agent, C.F. SHARP & CO.,
INC.), which shipment is covered by Bill of Lading No. 18 duly issued to consignee SAMAR
MINING COMPANY, INC.
Upon arrival of the aforesaid vessel at the port of Manila, the importation was
unloaded and delivered in good order and condition to the bonded warehouse of AMCYL.
The goods were however never delivered to, nor received by, the consignee at the port of
destinationDavao.
Bill of lading, No. 18 sets forth in the page 2 thereof that the goods were received by
NORDEUTSCHER LLOYD at the port of loading at Bremen, Germany, while the freight had
been prepaid up to the port of destination or the port of discharge of goodsDavao. The
carrier undertook to transport the goods in its vessel, M/S SHWABENSTEIN, only up to the
port of discharge from shipManila. Thereafter, the goods were to be transhipped by the
carrier to the port of destination or port of discharge of goods.
Section 1, paragraph 3 of Bill of Lading No. 18, states:
The carrier shall not be liable in any capacity whatsoever for any delay, loss or
damage occurring before the goods enter ships tackle to be loaded or after the goods leave
ships tackle to be discharged, transhipped or forwarded. xxx
The trial court rendered judgment in favor of plaintiff, hence the appeal.

ISSUE:
Whether or not the various clauses and stipulations in the Bill of lading is valid.

HELD:
Yes. The validity of stipulations in bills of lading exempting the carrier from liability
for loss or damage to the goods when the same are not in its actual custody has been
upheld in PHOENIX ASSURANCE CO., LTD. vs. UNITED STATES LINES, 22 SCRA 674 (1968).
The stipulations in the bill of lading in the PHOENIX case which are substantially the
same as the subject stipulations provides:

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.)

The carrier or master, in making arrangements with any person for or in connection with
all transshipping or forwarding of the goods or the use of any means of transportation or
forwarding of goods not used or operated by the carrier, shall be considered solely the
agent of the shipper and consignee and without any other responsibility whatsoever or for
the cost thereof. (Par. 16)

Finding the above stipulations not contrary to law, morals, good customs, public order or
public policy their validity was sustained.

A careful perusal of the provisions of the New Civil Code on common carriers was
looked into by the Court particularly, Article 1736 and 1738.
There is no doubt that Art. 1738 finds no applicability to the instant case. The said
article contemplates a situation where the goods had already reached their place of
destination and are stored in the warehouse of the carrier. The subject goods were still
awaiting transshipment to their port of destination, and were stored in the warehouse of a
third party when last seen and/or heard of.
Article 1736 is applicable to the instant suit. Under said article, the carrier may be
relieved of the responsibility for loss or damage to the goods upon actual or constructive
delivery of the same by the carrier to the consignee, or to the person who has a right to
receive them. In sales, actual delivery has been defined as the ceding of corporeal
possession by the seller, and the actual apprehension of corporeal possession by the buyer
or by some person authorized by him to receive the goods as his representative for the
purpose of custody or disposal. By the same token, there is actual delivery in contracts for
the transport of goods when possession has been turned over to the consignee or to his
duly authorized agent and a reasonable time is given him to remove the goods. The court a
quo found that there was actual delivery to the consignee through its duly authorized
agent, the carrier.
Two undertakings appeared embodied and/or provided for in the Bill of Lading in
question. The first is FOR THE TRANSPORT OF GOODS from Bremen, Germany to Manila.
The second, THE TRANSSHIPMENT OF THE SAME GOODS from Manila to Davao, with
appellant acting as agent of the consignee. At the hiatus between these two undertakings of
appellant which is the moment when the subject goods are discharged in Manila, its
personality changes from that of carrier to that of agent of the consignee. Thus, the
character of appellant's possession also changes, from possession in its own name as
carrier, into possession in the name of consignee as the latter's agent. Such being the case,
there was, in effect, actual delivery of the goods from appellant as carrier to the same
appellant as agent of the consignee. Upon such delivery, the appellant, as erstwhile carrier,
ceases to be responsible for any loss or damage that may befall the goods from that point
onwards. This is the full import of Article 1736, as applied to the case.
The actions of appellant carrier and of its representative in the Philippines being in
full faith with the lawful stipulations of Bill of Lading No. 18 and in conformity with the
provisions of the New Civil Code on common carriers, agency and contracts, they incur no
liability for the loss of the goods in question.
Appealed decision is REVERSED. Plaintiff-appellee's complaint is DISMISSED.








Saludo Jr. v. Court of Appeals
G.R. No. 95536, March 23, 1992
Regalado, J.

FACTS:
After the death of plaintiffs mother, Crispina Saludo, Pomierski and Son Funeral
Home of Chicago brought the remains to Continental Mortuary Air Services which booked
the shipment of the remains from Chicago to San Francisco by TWA and from San Francisco
to Manila with PAL. The remains were taken to the Chicago Airport, but it turned out that
there were two bodies in the said airport. Somehow the two bodies were switched; the
casket bearing the remains of plaintiffs mother was mistakenly sent to Mexico and was
opened there. The shipment was immediately loaded on PAL flight and arrived on Manila a
day after it expected arrival on October 29, 1976.
Plaintiff filed a damage suit with CFI of Leyte, contending that Trans World Airlines
and PAL were liable for misshipment, the eventual delay on the delivery of the cargo
containing the remains, and of the discourtesy of its employees to them.
The court absolve the two airline companies of any liability. The CA affirmed such
decision.

ISSUE:
Whether or not the carrier is liable for damages.

HELD:
The records reveal that petitioners, particularly Maria and Saturnino Saludo,
agonised for nearly five hours, over the possibility of losing their mothers mortal remains,
unattended to and without any assurance from the employees of TWA that they were doing
anything about the situation. They were entitled to the understanding and humane
consideration called of by and commensurate with the extraordinary diligence required for
common carriers, and not the cold insensitivity to their predicament. Common sense could
and should have dictated that they exert a little effort in making a more extensive inquiry
by themselves or through their superiors, rather than just shrug off the problem with a
callous and uncaring remark that they had no knowledge about it. With all the modern
communications equipment readily available to them, it could have easily facilitated said
inquiry. TWAs apathetic stance while not legally reprehensible is morally deplorable.
Losing a loved one, especially ones parent, is a painful experience. Our culture
accords utmost tenderness human feelings toward and in reverence to the dead. That the
remains of the deceased were subsequently delivered, albeit, belatedly and eventually laid
in her final resting place is of little consolation. The imperviousness displayed by TWAs
personnel, even for just that fraction of time, was especially condemnable particularly in
the hours of bereavement of the family of Crispina Saludo, intensified by anguish due to the
uncertainty of the whereabouts of their mothers remains. TWAs personnel were remiss in
the observance of that genuine human concern and professional attentiveness required
and expected of them.
The foregoing observations, however, do not appear to be applicable to respondent
PAL. No attribution of discourtesy or indifference has been made against PAL by
petitioners and, in fact, petitioner Maria Saludo testified that it was to PAL they repaired
after failing to receive proper attention from TWA. It was from PAL that they received
confirmation that their mothers remains would be on the same flight with them.
Petitioners right to be treated with due courtesy in accordance with the degree of
diligence required by law to be exercised by every common carrier was violated by the
TWA and this entitles them, atleast to nominal damages from TWA alone. Articles 2221 and
2222 of the Civil Code make it clear that nominal damages are not intended for
indemnification of loss suffered but for the vindication or recognition of a right violated or
invaded. They are recoverable where some injury has been done but the amount of which
the evidence fails to show, the assessment of damages being left to the discretion of the
court according to the circumstances of the case.




































Rights of Shipper, Consignee

Magellan Marketing v. Court of Appeals
G.R. No. 95529, August 22, 1991
Regalado, J.

FACTS:

- Choju Co., Ltd purchased from Magellan Manufacturers Marketing Corp.
(MMMC) 136,000 anahaw fans for $23,220
- MMMC contracted with F.E. Zuellig, a shipping agent of Orient Overseas Container
Lines, Inc., (OOCL) specifying that he needed an on-board bill of lading and that
transhipment is not allowed under the letter of credit
- MMMC paid F.E. Zuellig the freight charges and secured a copy of the bill of lading
which was presented to Allied Bank. The bank then credited the amount of
US$23,220 covered by the letter of credit to MMMC
- When MMMC's President James Cu, went back to the bank later, he was informed
that the payment was refused by the buying for lack of bill of lading and there was a
transhipment of goods
- The anahaw fans were shipped back to Manila through OOCL who are demanding
from MMMC P246,043.43 (freight charges from Japan to Manila, demurrage
incurred in Japan and Manila from October 22, 1980 up to May 20, 1981 and charges
for stripping the container van of the Anahaw fans on May 20, 1981)
- MMMC abandoned the whole cargo and asked OOCL for damages
- OOCL: bill of lading clearly shows that there will be a transhipment and that petitioner
was well aware that MV (Pacific) Despatcher was only up to Hongkong where the subject
cargo will be transferred to another vessel for Japan
- RTC: favored OOCL:
consented because the bill of lading where it is clearly indicated that there
will be transhipment
- MMMC was the one who ordered the reshipment of the cargo from Japan to Manila
- CA: Affirmed with modification of excluding demurrage in Manila

ISSUE: W/N the bill of lading which reflected the transhipment against the letter of credit is
consented by MMMC


HELD: YES. CA Affirmed with modification

Transhipment
act of taking cargo out of one ship and loading it in another
the transfer of goods from the vessel stipulated in the contract of
affreightment to another vessel before the place of destination named in the
contract has been reached
transfer for further transportation from one ship or conveyance to
another
the fact of transhipment is not dependent upon the ownership of the
transporting ships or conveyances or in the change of carriers, as the petitioner
seems to suggest, but rather on the fact of actual physical transfer of cargo from one
vessel to another
appears on the face of the bill of lading the entry "Hong Kong" in the blank
space labeled "Transhipment," which can only mean that transhipment actually took
place
bill of lading operates both as a receipt and as a contract receipt for the goods
shipper contract to transport and deliver the same as therein stipulated names the
parties, which includes the consignee, fixes the route, destination, and freight rates
or charges, and stipulates the rights and obligations assumed by the parties law
between the parties who are bound by its terms and conditions provided that these
are not contrary to law, morals, good customs, public order and public policy

GR: acceptance of the bill without dissent raises the presumption that all the terms
therein were brought to the knowledge of the shipper and agreed to by him and, in
the absence of fraud or mistake, he is estopped from thereafter denying that he
assented to such term
There clearly appears on the face of the bill of lading under column "PORT OF
TRANSHIPMENT" an entry "HONGKONG'
On board bill of lading vs. received for shipment bill of lading:
on board bill of lading
stated that the goods have been received on board the vessel
which is to carry the goods
received for shipment bill of lading
stated that the goods have been received for shipment with or
without specifying the vessel by which the goods are to be shipped
issued whenever conditions are not normal and there is
insufficiency of shipping space
certification of F.E. Zuellig, Inc. cannot qualify the bill of lading, as originally
issued, into an on board bill of lading as required by the terms of the letter of credit
issued in favor of petitioner - it is a received for shipment bill of lading
issued only on July 19, 1980, way beyond the expiry date of June 30,
1980 specified in the letter of credit for the presentation of an on board bill
of lading
Demurrage
compensation provided for in the contract of affreightment for the
detention of the vessel beyond the time agreed on for loading and unloading
claim for damages for failure to accept delivery
before it could be charged for demurrage charges it should have been
notified of the arrival of the goods first
Since abandon option was communicated, the same is binding upon the
parties on legal and equitable considerations of estoppel