4.

Agreement limiting liability (b) as to amount of liability

Art. 1749 and 1750
Republic of the Philippines The evidence was taken upon such issues, and the lower court rendered
SUPREME COURT judgment in favor of Juan Ysmael for the full amount of its claim, from
Manila which Andres H. Limgengco and Vicente Javier appealed.

EN BANC Defendants raised the following errors of the lower court:

I. The lower court erred in finding that one hundred sixty-four cases of
goods were delivered to and loaded on the steamship Andres.
G.R. No. L-28028             November 25, 1927
II. The lower court erred in holding that appellee was not bound by the
terms of the bills of lading of covering the shipments.
JUAN YSMAEL & CO., INC., plaintiff-appellee,  III. The trial court erred in failing to take into consideration appellants'
vs. special defense based on clause 12 of the bills of lading.
GABINO BARRETTO & CO., LTD., ET AL., defendants. ANDRES H. IV. The lower court erred in rendering judgment against appellants in the
LIMGENGCO and VICENTE JAVIER,appellants. sum of P9,940.95.

Gibbs and McDonough for appellants. ISSUE:

Felipe Ysmael and Grey & Encarnacion for appellee. WON the lower court erred in ruling in favor of plaintiff and disregarding
the stipulation limiting the value of defendants’ liability under clause 12
FACTS: printed in the Bill of Lading. NO
Juan Ysmael & Co. Inc., a domestic corporation, seeks to recover from
Gabino Barretto, et. al. P9,940.95, the alleged value of four cases of RATIO:
merchandise which it delivered to the steamship Andres from Manila to be SC upheld the findings of the trial court that the defendants received from
shipped to Surigao, but which were never delivered to Salomon Sharuff, the plaintiff corporation 164 cases of silk, and delivered at Surigao only
the consignee, or returned to Juan Ysmael & Co.  160 cases of silk, and that defendants failed to deliver the said four cases
in Surigao when the plaintiff’s representative took the delivery of the cargo
Defendants make a specific denial of all of the material allegations of the at that port, and that the original figure "1" and the word "bulto" appearing
complaint, and as a special defense allege that the four cases of on the back of Exhibit 1 were changed by Galleros to read "5" and "bultos."
merchandise in question were never delivered to them, and that under the The testimony of Claro Galleros to the effect that, according to the tallies
provisions of paragraph the provisions of paragraph 7 of the printed made by him on the back of Exhibit 1 during the course of loading, only
conditions appearing on the back of the bill of lading, plaintiff's right of 160 cases were loaded, on board the steamer Andres  stands
action is barred for the reason that it was not brought within sixty days uncorroborated, and it is not supported by the tallies themselves, as these
from the time the cause of action accrued. tallies give a total of 161 cases.

Defendants further alleged that under and by virtue of provision 12 of the Appellants rely on clause 12 of the bill of lading, which is as follows:
bill of lading referred to in plaintiff's amended complaint, the defendants
are not liable in excess of three hundred pesos (P300) for any package of It is expressly understood that carrier shall not be liable for loss or
silk unless the value and contents of such packages are correctly declared damage from any cause or for any reason to an amount
in the bill of lading at the time of shipment, etc. exceeding three hundred pesos (P300) Philippine currency for any
single package of silk or other valuable cargo, nor for an amount
exceeding one hundred pesos (P100) Philippine currency for any
4. Agreement limiting liability (b) as to amount of liability
Art. 1749 and 1750
single package of other cargo, unless the value and contents of the United States, that whatever limitations against its
such packages are correctly declared in this bill of lading at the common-law liability are permissible to a carrier, it cannot
time of shipment and freight paid in accord with the actual limit its liability for injury to or loss of goods shipped, where
measurement or weight of the cargo shipped. such injury or loss is caused by its own negligence. This is
the common-law doctrine and it makes no difference that there is
That condition is printed on the back of the bill of lading. The ship in no statutory prohibition against contracts of this character.
question was a common carrier and, as such, must have been operated as
a public utility. It is a matter of common knowledge that large quantities of PAR. 196. bb. Considerations on Which Rule Based. — The rule,
silk are imported in the Philippine Islands, and that after being imported, it is said, rests on considerations of public policy. The undertaking
they are sold by the merchants in Manila and other large seaports, and is to carry the goods, and to relieve the shipper from all liability
then shipped to different points and places in the Islands. Hence, there is for loss or damage arising from negligence in performing its
nothing unusual about the shipment of silk. In truth and in fact, it is a contract is to ignore the contract itself. The natural effect of a
matter of usual and ordinary business. There was no fraud or concealment limitation of liability against negligence is to induce want of care on
in the shipment in question. Clause 12 above quoted places a limit of P300 the part of the carrier in the performance of its duty. The shipper
"for any single package of silk." The evidence shows that 164 "cases" and the common carrier are not on equal terms; the shipper must
were shipped, and that the value of each case was very near P2,500. In send his freight by the common carrier, or not at all; he is therefore
this situation, the limit of defendants' liability for each case of silk "for loss entirely at the mercy of the carrier, unless protected by the higher
or damage from any cause or for any reason" would put it in the power of power of the law against being forced into contracts limiting the
the defendants to have taken the whole cargo of 164 cases of silk at a carrier's liability. Such contracts are wanting in the element of
valuation of P300 for each case, or less than one-eight of its actual value. voluntary assent.
If that rule of law should be sustained, no silk would ever be shipped from
one island to another in the Philippines. Such a limitation of value is PAR. 197. cc. Application and Extent of Rule — (aa) Negligence
unconscionable and void as against public policy. of Servants. — The rule prohibiting limitation of liability for
negligence is often stated as a prohibition of any contract relieving
The court cited Corpus Juris, volume 10, p. 154, says: the carrier from loss or damage caused by its own negligence or
PAR. 194. 6. Reasonable of Limitation. — The validity of misfeasance, or that of its servants; and it has been specifically
stipulations limiting the carriers liability is to be determined decided in many cases that no contract limitation will relieve
by their reasonableness and their conformity to the sound the carrier from responsibility for the negligence,
public policy, in accordance with which the obligations of the unskillfulness, or carelessness of its employees.
carrier to the public are settled. It cannot lawfully stipulate for
exemption from liability, unless such exemption is just and Based upon the findings of fact of the trial court which are sustained by the
reasonable, and unless the contract is freely and fairly made. evidence, the plaintiff delivered to the defendants 164 cases of silk
No contractual limitation is reasonable which is subversive of consigned and to be delivered by the defendants to Salomon Sharuff in
public policy. Surigao. Four of such cases were never delivered, and the evidence
shows that their value is the alleged in the complaint.
PAR. 195. 7. What Limitations of Liability Permissible. — a.
Negligence — (1) Rule in America — (a) In Absence of Organic SC RULING:
or Statutory Provisions Regulating Subject— aa. Majority Rule. — There is no merit in the appeal. The judgment of the lower court is
In the absence of statute, it is settled by the weight of authority in affirmed, with costs.
4. Agreement limiting liability (b) as to amount of liability
Art. 1749 and 1750
Granting, without deciding, that said conditions appearing on the back of
the originals might have legal effect, the court is of the opinion that in view
SUB ISSUE: of the fact that said conditions are not printed on the triplicate copies
Whether or not the plaintiff’s right of action is barred because it was not which were delivered to the plaintiff, such conditions are not binding
brought within 60 days from the time the cause of action accrued. NO upon the plaintiff.

RATIO:
The goods in question were shipped from Manila on October 25, 1922, to
be delivered to Salomon Sharuff in Surigao, plaintiff’s original complaint
was filed on April 17, 1923, or a little less than 6 months after the shipment
was made. The court held that the action was brought with a “reasonable
time.” It is true that both the plaintiff and the defendants are residents of
Manila, but it is also true that Surigao where the goods in question were to
be delivered is one of the most distant places from Manila. In the very
nature of the things, plaintiff would not want to commence its action until
such time as it had made a full and careful investigation of all of the
material facts and even the law of the case, so as to determine whether or
not defendants were liable for its loss.

Appellants rely upon paragraph 7 of the bill of lading, which is as follows:

All claims for shortage or damage must be made at the time of
delivery to consignee or his agent, if the packages or containers
show exterior signs of damage; otherwise to be made in writing to
the carrier within twenty-four hours from the time of delivery.
Claims for nondelivery or shipment must be presented in writing to
the carrier within thirty days from the date of accrual. Suits based
upon claims arising from shortage, damage, or nondelivery of
shipment shall be instituted within sixty days from date of accrual
of the right of action. Failure to make claims or to institute judicial
proceedings as herein provided shall constitute a waiver of the
claim or right of action.

Upon that question the trial court said:

Assuming, however, that the above quoted conditions came to the
knowledge of the plaintiff, the Supreme court of the Philippine Islands, has
held that such stipulations in the bill of lading are not reasonable, and
therefore, do not bar an action.

And it also said: