Transpo 1
Transpo 1
Transpo 1
ALITALIA has appealed to this Court on Certiorari. Here, it seeks to The Convention also purports to limit the liability of the carriers in
make basically the same points it tried to make before the Trial the following manner: 21
Court and the Intermediate Appellate Court, i.e.: 1. In the carriage of passengers the liability of the carrier
1) that the Warsaw Convention should have been applied for each passenger is limited to the sum of 250,000
to limit ALITALIA'S liability; and francs . . . Nevertheless, by special contract, the carrier and
the passenger may agree to a higher limit of liability.: nad
2) that there is no warrant in fact or in law for the award to
Dr. Pablo of nominal damages and attorney's fees. 14 2. a) In the carriage of registered baggage and of cargo, the
liability of the carrier is limited to a sum of 250 francs per
kilogramme, unless the passenger or consignor has made,
at the time when the package was handed over to the offered in writing to the plaintiff within a period of six
carrier, a special declaration of interest in delivery at months from the date of the occurrence causing the
destination and has paid a supplementary sum if the case damage, or before the commencement of the action, if that
so requires. In that case the carrier will be liable to pay a is later.
sum not exceeding the declared sum, unless he proves that The Warsaw Convention however denies to the carrier availment
sum is greater than the actual value to the consignor at "of the provisions which exclude or limit his liability, if the damage
delivery. is caused by his wilful misconduct or by such default on his part as,
b) In the case of loss, damage or delay of part of registered in accordance with the law of the court seized of the case, is
baggage or cargo, or of any object contained therein, the considered to be equivalent to wilful misconduct," or "if the
weight to be taken into consideration in determining the damage is (similarly) caused . . by any agent of the carrier acting
amount to which the carrier's liability is limited shall be within the scope of his employment." 22 The Hague Protocol
only the total weight of the package or packages amended the Warsaw Convention by removing the provision that
concerned. Nevertheless, when the loss, damage or delay if the airline took all necessary steps to avoid the damage, it could
of a part of the registered baggage or cargo, or of an object exculpate itself completely, 23 and declaring the stated limits of
contained therein, affects the value of other packages liability not applicable "if it is proved that the damage resulted
covered by the same baggage check or the same air way from an act or omission of the carrier, its servants or agents, done
bill, the total weight of such package or packages shall also with intent to cause damage or recklessly and with knowledge that
be taken into consideration in determining the limit of damage would probably result." The same deletion was effected by
liability. the Montreal Agreement of 1966, with the result that a passenger
could recover unlimited damages upon proof of wilful
3. As regards objects of which the passenger takes charge
misconduct. 24
himself the liability of the carrier is limited to 5000 francs
per passenger. The Convention does not thus operate as an exclusive
enumeration of the instances of an airline's liability, or as an
4. The limits prescribed . . shall not prevent the court from
absolute limit of the extent of that liability. Such a proposition is
awarding, in accordance with its own law, in addition, the
not borne out by the language of the Convention, as this Court has
whole or part of the court costs and of the other expenses
now, and at an earlier time, pointed out. 25 Moreover, slight
of litigation incurred by the plaintiff. The foregoing
reflection readily leads to the conclusion that it should be deemed
provision shall not apply if the amount of the damages
a limit of liability only in those cases where the cause of the death
awarded, excluding court costs and other expenses of the
or injury to person, or destruction, loss or damage to property or
litigation, does not exceed the sum which the carrier has
delay in its transport is not attributable to or attended by any where there was satisfactory evidence of malice or bad faith
wilful misconduct, bad faith, recklessness, or otherwise improper attributable to its officers and employees. 29 Thus, an air carrier
conduct on the part of any official or employee for which the was sentenced to pay not only compensatory but also moral and
carrier is responsible, and there is otherwise no special or exemplary damages, and attorney's fees, for instance, where its
extraordinary form of resulting injury. The Convention's provisions, employees rudely put a passenger holding a first-class ticket in the
in short, do not "regulate or exclude liability for other breaches of tourist or economy section, 30 or ousted a brown Asiatic from the
contract by the carrier" 26 or misconduct of its officers and plane to give his seat to a white man, 31 or gave the seat of a
employees, or for some particular or exceptional type of damage. passenger with a confirmed reservation to another, 32 or
Otherwise, "an air carrier would be exempt from any liability for subjected a passenger to extremely rude, even barbaric treatment,
damages in the event of its absolute refusal, in bad faith, to as by calling him a "monkey." 33
comply with a contract of carriage, which is absurd." 27 Nor may it In the case at bar, no bad faith or otherwise improper conduct may
for a moment be supposed that if a member of the aircraft be ascribed to the employees of petitioner airline; and Dr. Pablo's
complement should inflict some physical injury on a passenger, or luggage was eventually returned to her, belatedly, it is true, but
maliciously destroy or damage the latter's property, the without appreciable damage. The fact is, nevertheless, that some
Convention might successfully be pleaded as the sole gauge to special species of injury was caused to Dr. Pablo because petitioner
determine the carrier's liability to the passenger. Neither may the ALITALIA misplaced her baggage and failed to deliver it to her at
Convention be invoked to justify the disregard of some the time appointed — a breach of its contract of carriage, to be
extraordinary sort of damage resulting to a passenger and preclude sure — with the result that she was unable to read the paper and
recovery therefor beyond the limits set by said Convention. It is in make the scientific presentation (consisting of slides,
this sense that the Convention has been applied, or ignored, autoradiograms or films, tables and tabulations) that she had
depending on the peculiar facts presented by each case.:-cralaw painstakingly labored over, at the prestigious international
In Pan American World Airways, Inc. v. I.A.C., 28 for example, the conference, to attend which she had traveled hundreds of miles, to
Warsaw Convention was applied as regards the limitation on the her chagrin and embarrassment and the disappointment and
carrier's liability, there being a simple loss of baggage without any annoyance of the organizers. She felt, not unreasonably, that the
otherwise improper conduct on the part of the officials or invitation for her to participate at the conference, extended by the
employees of the airline or other special injury sustained by the Joint FAO/IAEA Division of Atomic Energy in Food and Agriculture
passenger. of the United Nations, was a singular honor not only to herself, but
to the University of the Philippines and the country as well, an
On the other hand, the Warsaw Convention has invariably been
opportunity to make some sort of impression among her
held inapplicable, or as not restrictive of the carrier's liability,
colleagues in that field of scientific activity. The opportunity to
claim this honor or distinction was irretrievably lost to her because and proof, that Dr. Pablo's right had been violated or invaded by it
of Alitalia's breach of its contract. — absent any claim for actual or compensatory damages, the
prayer thereof having been voluntarily deleted by Dr. Pablo upon
Apart from this, there can be no doubt that Dr. Pablo underwent
the return to her of her baggage — necessarily raised the issue of
profound distress and anxiety, which gradually turned to panic and
nominal damages.: rd
finally despair, from the time she learned that her suitcases were
missing up to the time when, having gone to Rome, she finally This Court also agrees that respondent Court of Appeals correctly
realized that she would no longer be able to take part in the awarded attorney's fees to Dr. Pablo, and the amount of P5,000.00
conference. As she herself put it, she "was really shocked and set by it is reasonable in the premises. The law authorizes recovery
distraught and confused." of attorney's fees inter alia where, as here, "the defendant's act or
omission has compelled the plaintiff to litigate with third persons
Certainly, the compensation for the injury suffered by Dr. Pablo
or to incur expenses to protect his interest," 34 or "where the
cannot under the circumstances be restricted to that prescribed by
court deems it just and equitable." 35
the Warsaw Convention for delay in the transport of baggage.
WHEREFORE, no error being perceived in the challenged decision
She is not, of course, entitled to be compensated for loss or
of the Court of Appeals, it appearing on the contrary to be entirely
damage to her luggage. As already mentioned, her baggage was
in accord with the facts and the law, said decision is hereby
ultimately delivered to her in Manila, tardily but safely. She is
AFFIRMED, with costs against the petitioner.
however entitled to nominal damages — which, as the law says, is
adjudicated in order that a right of the plaintiff, which has been SO ORDERED.
violated or invaded by the defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the plaintiff G.R. No. 94149 May 5, 1992
for any loss suffered — and this Court agrees that the respondent AMERICAN HOME ASSURANCE, COMPANY, petitioner,
Court of Appeals correctly set the amount thereof at P40,000.00. vs.
As to the purely technical argument that the award to her of such THE COURT OF APPEALS and NATIONAL MARINE CORPORATION
nominal damages is precluded by her omission to include a specific and/or NATIONAL MARINE CORPORATION (Manila), respondents.
claim therefor in her complaint, it suffices to draw attention to her
general prayer, following her plea for moral and exemplary Both petitioner American Home Assurance Co. and the respondent
damages and attorney's fees, "for such other and further just and National Marine Corporation are foreign corporations licensed to
equitable relief in the premises," which certainly is broad enough do business in the Philippines, the former through its branch. The
to comprehend an application as well for nominal damages. American Home Assurance Company (Philippines), Inc. and the
Besides, petitioner should have realized that the explicit assertion,
latter through its branch. The National Marine Corporation and 25% of the total amount due as attorney's fees, by filing a
(Manila) (Rollo, p. 20, Annex L, p.1). complaint for recovery of sum of money (Petition, p. 4).
That on or about June 19, 1988, Cheng Hwa Pulp Corporation Respondent, National Marine Corporation, filed a motion to
shipped 5,000 bales (1,000 ADMT) of bleached kraft pulp from dismiss dated August 7, 1989 stating that American Home
Haulien, Taiwan on board "SS Kaunlaran", which is owned and Assurance Company had no cause of action based on Article 848 of
operated by herein respondent National Marine Corporation with the Code of Commerce which provides "that claims for averages
Registration No. PID-224. The said shipment was consigned to shall not be admitted if they do not exceed 5% of the interest
Mayleen Paper, Inc. of Manila, which insured the shipment with which the claimant may have in the vessel or in the cargo if it be
herein petitioner American Home Assurance Co. as evidenced by gross average and 1% of the goods damaged if particular average,
Bill of Lading No. HLMN-01. deducting in both cases the expenses of appraisal, unless there is
On June 22, 1988, the shipment arrived in Manila and was an agreement to the contrary." It contended that based on the
discharged into the custody of the Marina Port Services, Inc., for allegations of the complaint, the loss sustained in the case was
eventual delivery to the consignee-assured. However, upon P35,506.75 which is only .18% of P17,420,000.00, the total value of
delivery of the shipment to Mayleen Paper, Inc., it was found that the cargo.
122 bales had either been damaged or lost. The loss was calculated On the other hand, petitioner countered that Article 848 does not
to be 4,360 kilograms with an estimated value of P61,263.41. apply as it refers to averages and that a particular average
Mayleen Paper, Inc. then duly demanded indemnification from presupposes that the loss or damages is due to an inherent defect
respondent National Marine Corporation for the aforesaid of the goods, an accident of the sea, or a force majeure or the
damages/losses in the shipment but, for apparently no justifiable negligence of the crew of the carrier, while claims for damages due
reason, said demand was not heeded (Petition, p. 4). to the negligence of the common carrier are governed by the Civil
As the shipment was insured with petitioner in the amount of Code provisions on Common Carriers.
US$837,500.00, Mayleen Paper, Inc. sought recovery from the In its order dated November 23, 1989, the Regional Trial Court
former. Upon demand and submission of proper documentation, sustained private respondent's contention. In part it stated:
American Home Assurance paid Mayleen Paper, Inc. the adjusted Before the Court for resolution is a motion for reconsideration filed
amount of P31,506.75 for the damages/losses suffered by the by defendant through counsel dated October 6, 1989.
shipment, hence, the former was subrogated to the rights and The record shows that last August 8, 1989, defendant through
interests on Mayleen Paper, Inc. counsel filed a motion to dismiss plaintiff's complaint.
On June 6, 1989, the petitioner, as subrogee, then brought suit Resolving the said motion last September 18, 1989, the court ruled
against respondent for the recovery of the amount of P31.506.75 to defer resolution thereof until after trial on the merits. In the
motion now under consideration, defendant prays for the
reconsideration of the order of September 18, 1989 and in lieu of all (Ibid., citing California Canneries Co. v. Canton Ins. Office 25
thereof, another order be entered dismissing plaintiff's complaint. Cal. App. 303, 143 p. 549-553).
There appears to be good reasons for the court to take a second From the foregoing definition, it is clear that the damage on the
look at the issues raised by the defendant. cargo in question, is in the nature of the "particular average." Since
xxx xxx xxx the loss is less than 1% to the value of the cargo and there appears
It is not disputed defendants that the loss suffered by the to be no allegations as to any agreement defendants and the
shipment is only .18% or less that 1% of the interest of the consignee of the goods to the contrary, by express provision of the
consignee on the cargo Invoking the provision of the Article 848 of law, plaintiff is barred from suing for recovery.
the Code of Commerce which reads: WHEREOF, plaintiff's complaint is hereby dismissed for lack of
Claims for average shall not be admitted if they do not exceed five cause of action. (Rollo, p. 27; Annex A, pp. 3-4).
percent of the interest which the claimant may have in the vessels The petitioner then filed a motion for reconsideration of the order
or cargo if it is gross average, and one percent of the goods of dismissal but same was denied by the court in its order dated
damaged if particular average, deducting in both cases the January 26, 1990 (supra).
expenses of appraisal, unless there is an agreement to the Instead of filing an appeal from the order of the court a
contrary. (Emphasis supplied) quo dismissing the complaint for recovery of a sum of money,
defendant claims that plaintiff is barred from suing for recovery. American Home Assurance Company filed a petition
Decisive in this case in whether the loss suffered by the cargo in for certiorari with the Court of Appeals to set aside the two orders
question is a "particular average." or respondent judge in said court (Rollo, p. 25).
Particular average, is a loss happening to the ship, freight, or cargo But the Court of Appeals in its decision dated May 30, 1990,
which is not be (sic) shared by contributing among all those dismissed the petition as constituting plain errors of law and not
interested, but must be borne by the owner of the subject to grave abuse of discretion correctible by certiorari (a Special Civil
which it occurs. (Black's Law Dictionary, Revised Fourth Edition, p. Action). If at all, respondent court ruled that there are errors of
172, citing Bargett v. Insurance Co. 3 Bosw. [N.Y.] 395). judgment subject to correction by certiorari as a mode of appeal
as distinguished from general average which but the appeal is to the Supreme Court under Section 17 of the
is a contribution by the several interests engaged in the maritime Judiciary Act of 1948 as amended by Republic Act No. 5440.
venture to make good the loss of one of them for the voluntary Otherwise stated, respondent Court opined that the proper
sacrifice of a part of the ship or cargo to save the residue of the remedy is a petition for review on certiorari with the Supreme
property and the lives of those on board, or for extraordinary Court on pure questions of law (Rollo, p. 30).
expenses necessarily incurred for the common benefit and safety Hence, this petition.
In a resolution dated December 10, 1990, this Court gave due in conducting its business is regulated by the Civil Code primarily
course to the petition and required both parties to file their and suppletorily by the Code of Commerce; and that respondent
respective memoranda (Rollo, p. 58). court refused to consider the Bill of Lading as the law governing
The procedural issue in this case is whether or not certiorari was the parties.
the proper remedy in the case before the Court of Appeals. Private respondent countered that in all matters not covered by
The Court of Appeals ruled that appeal is the proper remedy, for the Civil Code, the rights and obligations of the parties shall be
aside from the fact that the two orders dismissing the complaint governed by the Code of Commerce and by special laws
for lack of cause of action are final orders within the meaning of as provided for in Article 1766 of the Civil Code; that Article 806,
Rule 41, Section 2 of the Rules of Court, subject petition raised 809 and 848 of the Code of Commerce should be applied
questions which if at all, constituting grave abuse of discretion suppletorily as they provide for the extent of the common carriers'
correctible by certiorari. liability.
Evidently, the Court of Appeals did not err in dismissing the This issue has been resolved by this Court in National Development
petition for certiorari for as ruled by this Court, an order of Co. v. C.A. (164 SCRA 593 [1988]; citing Eastern Shipping Lines,
dismissal whether right or wrong is a final order, hence, a proper Inc. v. I.A.C., 150 SCRA 469, 470 [1987] where it was held that "the
subject of appeal, not certiorari (Marahay v. Melicor, 181 SCRA 811 law of the country to which the goods are to be transported
(1990]). However, where the fact remains that respondent Court persons the liability of the common carrier in case of their loss,
of Appeals obviously in the broader interests of justice, destruction or deterioration." (Article 1753, Civil Code). Thus, for
nevertheless proceeded to decide the petition for certiorari and cargoes transported to the Philippines as in the case at bar, the
ruled on specific points raised therein in a manner akin to what liability of the carrier is governed primarily by the Civil Code and in
would have been done on assignments of error in a regular appeal, all matters not regulated by said Code, the rights and obligations of
the petition therein was therefore disposed of on the merits and common carrier shall be governed by the Code of Commerce and
not on a dismissal due to erroneous choice of remedies or by special laws (Article 1766, Civil Code).
technicalities (Cruz v. I.A.C., 169 SCRA 14 (1989]). Hence, a review Corollary thereto, the Court held further that under Article 1733 of
of the decision of the Court of Appeals on the merits against the the Civil Code, common carriers from the nature of their business
petitioner in this case is in order. and for reasons of public policy are bound to observe
On the main controversy, the pivotal issue to be resolved is the extraordinary diligence in the vigilance over the goods and for the
application of the law on averages (Articles 806, 809 and 848 of safety of passengers transported by them according to all
the Code of Commerce). circumstances of each case. Thus, under Article 1735 of the same
Petitioner avers that respondent court failed to consider that Code, in all cases other than those mentioned in Article 1734
respondent National Marine Corporation being a common carrier, thereof, the common carrier shall be presumed to have been at
fault or to have acted negligently, unless it proves that it has evident that the Code of Commerce provisions on averages cannot
observed the extraordinary diligence required by law (Ibid., p. apply.
595). On the other hand, Article 1734 of the Civil Code provides that
But more importantly, the Court ruled that common carriers common carriers are responsible for loss, destruction or
cannot limit their liability for injury or loss of goods where such deterioration of the goods, unless due to any of the causes
injury or loss was caused by its own negligence. Otherwise stated, enumerated therein. It is obvious that the case at bar does not fall
the law on averages under the Code of Commerce cannot be under any of the exceptions. Thus, American Home Assurance
applied in determining liability where there is negligence (Ibid., p. Company is entitled to reimbursement of what it paid to Mayleen
606). Paper, Inc. as insurer.
Under the foregoing principle and in line with the Civil Code's Accordingly, it is evident that the findings of respondent Court of
mandatory requirement of extraordinary diligence on common Appeals, affirming the findings and conclusions of the court a
carriers in the car care of goods placed in their stead, it is but quo are not supported by law and jurisprudence.
reasonable to conclude that the issue of negligence must first be PREMISES CONSIDERED, (1) the decisions of both the Court of
addressed before the proper provisions of the Code of Commerce Appeals and the Regional Trial Court of Manila, Branch 41,
on the extent of liability may be applied. appealed from are REVERSED; and (2) private respondent National
The records show that upon delivery of the shipment in question Marine Corporation is hereby ordered to reimburse the subrogee,
of Mayleen's warehouse in Manila, 122 bales were found to be petitioner American Home Assurance Company, the amount of
damaged/lost with straps cut or loose, calculated by the so-called P31,506.75.
"percentage method" at 4,360 kilograms and amounting to SO ORDERED.
P61,263.41 (Rollo, p. 68). Instead of presenting proof of the G.R. No. 166250 July 26, 2010
exercise of extraordinary diligence as required by law, National UNSWORTH TRANSPORT INTERNATIONAL (PHILS.),
Marine Corporation (NMC) filed its Motion to Dismiss dated INC., Petitioner,
August 7, 1989, hypothetically admitting the truth of the facts vs.
alleged in the complaint to the effect that the loss or damage to COURT OF APPEALS and PIONEER INSURANCE AND SURETY
the 122 bales was due to the negligence or fault of NMC (Rollo, p. CORPORATION, Respondents.
179). As ruled by this Court, the filing of a motion to dismiss on the
ground of lack of cause of action carries with it the admission of On August 31, 1992, the shipper Sylvex Purchasing Corporation
the material facts pleaded in the complaint (Sunbeam Convenience delivered to UTI a shipment of 27 drums of various raw materials
Foods, Inc. v. C.A., 181 SCRA 443 [1990]). Such being the case, it is for pharmaceutical manufacturing, consisting of: "1) 3 drums (of)
extracts, flavoring liquid, flammable liquid x x x banana flavoring;
2) 2 drums (of) flammable liquids x x x turpentine oil; 2 pallets. loaded on a truck with Plate No. PCK-434 facilitated by Champs for
STC: 40 bags dried yeast; and 3) 20 drums (of) Vitabs: Vitamin B delivery to Unilab’s warehouse. The materials were noted to be
Complex Extract."4 UTI issued Bill of Lading No. C320/C15991- complete and in good order in the gate pass.14 On the same day,
2,5covering the aforesaid shipment. The subject shipment was the shipment arrived in Unilab’s warehouse and was immediately
insured with private respondent Pioneer Insurance and Surety surveyed by an independent surveyor, J.G. Bernas Adjusters &
Corporation in favor of Unilab against all risks in the amount of Surveyors, Inc. (J.G. Bernas). The Report stated:
₱1,779,664.77 under and by virtue of Marine Risk Note Number 1-p/bag torn on side contents partly spilled
MC RM UL 0627 926 and Open Cargo Policy No. HO-022-RIU.7 1-s/drum #7 punctured and retaped on bottom side content
On the same day that the bill of lading was issued, the shipment lacking
was loaded in a sealed 1x40 container van, with no. APLU-982012, 5-drums shortship/short delivery15
boarded on APL’s vessel M/V "Pres. Jackson," Voyage 42, and On October 23 and 28, 1992, the same independent surveyor
transshipped to APL’s M/V "Pres. Taft"8 for delivery to petitioner in conducted final inspection surveys which yielded the same results.
favor of the consignee United Laboratories, Inc. (Unilab). Consequently, Unilab’s quality control representative rejected one
On September 30, 1992, the shipment arrived at the port of paper bag containing dried yeast and one steel drum containing
Manila. On October 6, 1992, petitioner received the said shipment Vitamin B Complex as unfit for the intended purpose.16
in its warehouse after it stamped the Permit to Deliver Imported On November 7, 1992, Unilab filed a formal claim17 for the damage
Goods9 procured by the Champs Customs Brokerage.10 Three days against private respondent and UTI. On November 20, 1992, UTI
thereafter, or on October 9, 1992, Oceanica Cargo Marine denied liability on the basis of the gate pass issued by Jardine that
Surveyors Corporation (OCMSC) conducted a stripping survey of the goods were in complete and good condition; while private
the shipment located in petitioner’s warehouse. The survey results respondent paid the claimed amount on March 23, 1993. By virtue
stated: of the Loss and Subrogation Receipt18 issued by Unilab in favor of
2-pallets STC 40 bags Dried Yeast, both in good order condition private respondent, the latter filed a complaint for Damages
and properly sealed against APL, UTI and petitioner with the RTC of Makati.19 The case
19- steel drums STC Vitamin B Complex Extract, all in good order was docketed as Civil Case No. 93-3473 and was raffled to Branch
condition and properly sealed 134.
1-steel drum STC Vitamin B Complex Extra[ct] with cut/hole on After the termination of the pre-trial conference, trial on the
side, with approx. spilling of 1%11 merits ensued. On February 22, 2001, the RTC decided in favor of
On October 15, 1992, the arrastre Jardine Davies Transport private respondent and against APL, UTI and petitioner, the
Services, Inc. (Jardine) issued Gate Pass No. 761412 which stated dispositive portion of which reads:
that "22 drums13 Raw Materials for Pharmaceutical Mfg." were
WHEREFORE, judgment is hereby rendered in favor of plaintif issuance of a bill of lading inasmuch as a bill of lading is not
PIONEER INSURANCE & SURETY CORPORATION and against the indispensable for the execution of a contract of carriage.21
defendants AMERICAN PRESIDENT LINES and UNSWORTH Unsatisfied, petitioner comes to us in this petition for review on
TRANSPORT INTERNATIONAL (PHILS.), INC. (now known as JUGRO certiorari, raising the following issues:
TRANSPORT INT’L., PHILS.), ordering the latter to pay, jointly and 1. WHETHER OR NOT THE HONORABLE COURT OF APPEALS
severally, the former the following amounts: COMMITTED GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK
1. The sum of SEVENTY SIX THOUSAND TWO HUNDRED THIRTY OR EXCESS OF JURISDICTION IN UPHOLDING THE DECISION OF THE
ONE and 27/100 (Php76,231.27) with interest at the legal rate of REGIONAL TRIAL COURT DATED 22 FEBRUARY 2001, AWARDING
6% per annum to be computed starting from September 30, 1993 THE SUM OF SEVENTY SIX THOUSAND TWO HUNDRED THIRTY ONE
until fully paid, for and as actual damages; AND 27/100 PESOS (PHP76,231.27) WITH LEGAL INTEREST AT 6%
2. The amount equivalent to 25% of the total sum as attorney’s PER ANNUM AS ACTUAL DAMAGES AND 25% AS ATTORNEY’S
fees; FEES.
3. Cost of this litigation. 2. WHETHER OR NOT PETITIONER UTI IS A COMMON CARRIER.
SO ORDERED.20 3. WHETHER OR NOT PETITIONER UTI EXERCISED THE REQUIRED
On appeal, the CA affirmed the RTC decision on April 29, 2004. The ORDINARY DILIGENCE.
CA rejected UTI’s defense that it was merely a forwarder, declaring 4. WHETHER OR NOT THE PRIVATE RESPONDENT SUFFICIENTLY
instead that it was a common carrier. The appellate court added ESTABLISHED THE ALLEGED DAMAGE TO ITS CARGO.22
that by issuing the Bill of Lading, UTI acknowledged receipt of the Petitioner admits that it is a forwarder but disagrees with the CA’s
goods and agreed to transport and deliver them at a specific place conclusion that it is a common carrier. It also questions the
to a person named or his order. The court further concluded that appellate court’s findings that it failed to establish that it exercised
upon the delivery of the subject shipment to petitioner’s extraordinary or ordinary diligence in the vigilance over the subject
warehouse, its liability became similar to that of a depositary. As shipment. As to the damages allegedly suffered by private
such, it ought to have exercised ordinary diligence in the care of respondent, petitioner counters that they were not sufficiently
the goods. And as found by the RTC, the CA agreed that petitioner proven. Lastly, it insists that its liability, in any event, should be
failed to exercise the required diligence. The CA also rejected limited to $500 pursuant to the package limitation rule. Indeed,
petitioner’s claim that its liability should be limited to $500 per petitioner wants us to review the factual findings of the RTC and
package pursuant to the Carriage of Goods by Sea Act (COGSA) the CA and to evaluate anew the evidence presented by the
considering that the value of the shipment was declared pursuant parties.
to the letter of credit and the pro forma invoice. As to APL, the The petition is partly meritorious.
court considered it as a common carrier notwithstanding the non-
Well established is the rule that factual questions may not be It is undisputed that UTI issued a bill of lading in favor of Unilab.
raised in a petition for review on certiorari as clearly stated in Pursuant thereto, petitioner undertook to transport, ship, and
Section 1, Rule 45 of the Rules of Court, viz.: deliver the 27 drums of raw materials for pharmaceutical
Section 1. Filing of petition with Supreme Court. – A party desiring manufacturing to the consignee.
to appeal by certiorari from a judgment or final order or resolution A bill of lading is a written acknowledgement of the receipt of
of the Court of Appeals, the Sandiganbayan, the Regional Trial goods and an agreement to transport and to deliver them at a
Court or other courts whenever authorized by law, may file with specified place to a person named or on his or her order.25 It
the Supreme Court a verified petition for review on certiorari. The operates both as a receipt and as a contract. It is a receipt for the
petition shall raise only questions of law which must be distinctly goods shipped and a contract to transport and
set forth. deliver the same as therein stipulated. As a receipt, it recites the
Admittedly, petitioner is a freight forwarder. The term "freight date and place of shipment, describes the goods as to quantity,
forwarder" refers to a firm holding itself out to the general public weight, dimensions, identification marks, condition, quality, and
(other than as a pipeline, rail, motor, or water carrier) to provide value. As a contract, it names the contracting parties, which
transportation of property for compensation and, in the ordinary include the consignee; fixes the route, destination, and freight rate
course of its business, (1) to assemble and consolidate, or to or charges; and stipulates the rights and obligations assumed by
provide for assembling and consolidating, shipments, and to the parties.26
perform or provide for break-bulk and distribution operations of Undoubtedly, UTI is liable as a common carrier. Common carriers,
the shipments; (2) to assume responsibility for the transportation as a general rule, are presumed to have been at fault or negligent
of goods from the place of receipt to the place of destination; and if the goods they transported deteriorated or got lost or destroyed.
(3) to use for any part of the transportation a carrier subject to the That is, unless they prove that they exercised extraordinary
federal law pertaining to common carriers.231avvphi1 diligence in transporting the goods. In order to avoid responsibility
A freight forwarder’s liability is limited to damages arising from its for any loss or damage, therefore, they have the burden of proving
own negligence, including negligence in choosing the carrier; that they observed such diligence.27 Mere proof of delivery of the
however, where the forwarder contracts to deliver goods to their goods in good order to a common carrier and of their arrival in bad
destination instead of merely arranging for their transportation, it order at their destination constitutes a prima facie case of fault or
becomes liable as a common carrier for loss or damage to goods. A negligence against the carrier. If no adequate explanation is given
freight forwarder assumes the responsibility of a carrier, which as to how the deterioration, loss, or destruction of the goods
actually executes the transport, even though the forwarder does happened, the transporter shall be held responsible.28
not carry the merchandise itself.24 Though it is not our function to evaluate anew the evidence
presented, we refer to the records of the case to show that, as
correctly found by the RTC and the CA, petitioner failed to rebut common carriers are governed by the Code of Commerce and
the prima facie presumption of negligence in the carriage of the special laws. Thus, the COGSA supplements the Civil Code by
subject shipment. establishing a provision limiting the carrier’s liability in the absence
First, as stated in the bill of lading, the subject shipment was of a shipper’s declaration of a higher value in the bill of
received by UTI in apparent good order and condition in New York, lading.30 Section 4(5) of the COGSA provides:
United States of America. Second, the OCMSC Survey Report (5) Neither the carrier nor the ship shall in any event be or become
stated that one steel drum STC Vitamin B Complex Extract was liable for any loss or damage to or in connection with the
discovered to be with a cut/hole on the side, with approximate transportation of goods in an amount exceeding $500 per package
spilling of 1%. Third, though Gate Pass No. 7614, issued by Jardine, of lawful money of the United States, or in case of goods not
noted that the subject shipment was in good order and condition, shipped in packages, per customary freight unit, or the equivalent
it was specifically stated that there were 22 (should be 27 drums of that sum in other currency, unless the nature and value of such
per Bill of Lading No. C320/C15991-2) drums of raw materials for goods have been declared by the shipper before shipment and
pharmaceutical manufacturing. Last, J.G. Bernas’ Survey Report inserted in the bill of lading. This declaration, if embodied in the
stated that "1-s/drum was punctured and retaped on the bottom bill of lading, shall be prima facie evidence, but shall not be
side and the content was lacking, and there was a short delivery of conclusive on the carrier.
5-drums." In the present case, the shipper did not declare a higher valuation
All these conclusively prove the fact of shipment in good order and of the goods to be shipped. Contrary to the CA’s conclusion, the
condition, and the consequent damage to one steel drum of insertion of the words "L/C No. LC No. 1-187-008394/ NY 69867
Vitamin B Complex Extract while in the possession of petitioner covering shipment of raw materials for pharmaceutical Mfg. x x x"
which failed to explain the reason for the damage. Further, cannot be the basis of petitioner’s liability.31 Furthermore, the
petitioner failed to prove that it observed the extraordinary insertion of an invoice number does not in itself sufficiently and
diligence and precaution which the law requires a common carrier convincingly show that petitioner had knowledge of the value of
to exercise and to follow in order to avoid damage to or the cargo.32
destruction of the goods entrusted to it for safe carriage and In light of the foregoing, petitioner’s liability should be limited to
delivery.29 $500 per steel drum. In this case, as there was only one drum lost,
However, we affirm the applicability of the Package Limitation Rule private respondent is entitled to receive only $500 as damages for
under the COGSA, contrary to the RTC and the CA’s findings. the loss. In addition to said amount, as aptly held by the trial court,
It is to be noted that the Civil Code does not limit the liability of an interest rate of 6% per annum should also be imposed, plus
the common carrier to a fixed amount per package. In all matters 25% of the total sum as attorney’s fees.
not regulated by the Civil Code, the rights and obligations of
WHEREFORE, premises considered, the petition is PARTIALLY
GRANTED. The Court of Appeals Decision dated April 29, 2004 and
Resolution dated November 26, 2004 are AFFIRMED with
MODIFICATION by reducing the principal amount due private
respondent Pioneer Insurance and Surety Corporation from
₱76,231.27 to $500, with interest of 6% per annum from date of
demand, and 25% of the amount due as attorney’s fees.
The other aspects of the assailed Decision and Resolution STAND.
SO ORDERED.