Transportation Law: Intelligentia Et Scientia Semper Mea

Transportation Law
Pinedapcg,rn,man 2015
of
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1.
Liability
and
pr4esumption
negligence
Arts. 1733, 1734, 1735
A. Common Carriage of Goods
Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3,

4, and 5 of the preceding article, if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that they observed
extraordinary diligence as required in Article 1733.
Art. 1733. 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 and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods
is further expressed in Articles 1734, 1735, and 1745, Nos.
5, 6, and 7, while the extraordinary diligence for the safety
of the passengers is further set forth in Articles 1755 and
1756.
SUBSECTION 2. - Vigilance Over Goods
Art. 1734. 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;
(2) Act of the public enemy in war, whether international or
civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or
in the containers;
(5) Order or act of competent public authority.
Ynchausti Steamship Co. v. Dexter, 41 Phil

289
EN BANC
[G.R. No. 15652. December 14, 1920.]
THE YNCHAUSTI STEAMSHIP COMPANY, petitioner, vs. I. B.
DEXTER, as Auditor of the Philippine Islands, and C. E.
UNSON, as Acting Purchasing Agent of the Philippine
Islands, respondents.
Cohn & Fisher for petitioner.
Attorney-General Paredes and Assistant Attorney-General
A. Santos for respondents.
SYLLABUS
1.
COMMON CARRIER; TRANSPORTATION OF GOVERNMENT
PROPERTY; NOTATION OF SHORTAGE BY CONSIGNEE. When
Government property is transported by common carrier, it is the
duty of the consignee, under section 646 of the Administrative
Code, to make notation of any loss, shortage, or damage upon the
bill of lading, or receipt, before accomplishing it; and where in
obedience to this precept a shortage is noted by the consignee
upon the bill of lading at the time of delivery, such notation is
competent evidence to show that the shortage in fact existed.
2.
ID.; LOSS OR DAMAGE TO GOODS IN TRANSIT; LIABILITY OF
CARRIER. Proof of the delivery of goods in good order to a
carrier, and of their arrival at the place of destination short or in
bad order, makes out a prima facie case; and it is incumbent on the
carrier, in order to exonerate itself, to prove that the loss or injury
was due to some circumstance inconsistent with its liability.
Intelligentia et
Scientia Semper Mea
Transportation Law
DECISION
STREET, J p:
This is a petition for a writ of mandamus filed in this court by the
Ynchausti Steamship Company to compel the Purchasing Agent of
the Philippine Islands and the Insular Auditor to sign, countersign,
and deliver to the petitioner a warrant upon the Treasurer of the
Philippine Islands for the sum of P82.79 in satisfaction of a claim for
that amount, which is alleged to be due the petitioner as a common
carrier for freight earned in transporting for the Government two
distinct consignments of mineral oil from Manila to two other ports
in the Philippine Islands. After the defendants had duly answered,
denying all the allegations of the petition except such as relate to
the character and places of residence of the parties to the petition
(which are admitted) the controversy was submitted for
determination by this court upon an agreed statement of facts as
follows:
"On July 23, 1918, the Government of the Philippine Islands, acting
by and through the respondent Insular Purchasing Agent, employed
the services of the petitioner, Ynchausti Steamship Co., a common
carrier, for the transportation, on board the steamship Venus, from
the port of Manila to the port of Aparri, Cagayan, of a consignment
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3.
ID.; FREIGHT DUE TO CARRIER; SET-OFF FOR LOSS OR
DAMAGE IN TRANSIT. The Purchasing Agent, under the direction
of the Insular Auditor, may properly deduct from the freight due to
a common carrier for the transportation of Government property
any sum for which the carrier is liable to the Government for loss,
shortage, or damage occurring in course of the transportation of
the same property.
4.
MANDAMUS;
COMMON
CARRIER;
CLAIM
AGAINST
GOVERNMENT; BURDEN OF PROOF. A common carrier cannot
maintain an action for the writ of mandamus to compel the
Purchasing Agent to pay a bill for freight due to the carrier, under
the doctrine enunciated in Compaia General de Tabacos vs. French
and Unson (39 Phil., 34), without showing that the loss, shortage, or
damage suffered by the property while in the hands of the carrier
for transportation resulted from some other cause that its own fault
or negligence.
of merchandise, consisting of thirty (30) cases of 'White Rose'
mineral oil of two five-gallon cans to the case; and on September
18, 1918, the said Government likewise employed the services of
petitioner for the transportation on board the steamship Venus,
from Manila to Aparri, Cagayan, of ninety-six case of 'Cock' brand
mineral oil, ten gallons to the case. The goods were delivered by
the shipper to the carrier, which accordingly received them, and to
evidence the contract of transportation, the parties duly executed
and delivered what is popularly called the Government bill of lading
(General Form 9-A), hereto attached, marked Exhibit A and made a
part hereof, wherein and whereby it was stipulated that the carrier,
the petitioner Ynchausti & Co., received the above-mentioned
supplies in apparent good condition, obligating itself to carry said
supplies to the place agreed upon, in accordance with the
authorized and prescribed rates and classifications, and subject to
the law of common carriers in force on the date of the shipment,
and to the conditions prescribed by the Insular Collector of Customs
in Philippine Marine Regulations at page 16 under the heading of
'Bill of Lading Conditions,' hereto attached, marked Exhibit B and
made a part hereof.
"Upon the delivery of the said shipment of 'Cock' brand oil the
consignee claimed that one case was delivered empty, and noted
such claim upon the bill of lading; and upon the delivery of the said
shipment of 'White Rose,' brand oil the consignee claimed that one
case was delivered empty, and noted said claim upon the bill of
lading.
"Thereafter, notwithstanding the protestations of the petitioner,
Ynchausti Steamship Co., that said shortages were due to causes
entirely unknown to it, and were not due to any fault or negligence
on its part, or on the part of its agents or servants, the Acting
Insular Purchasing Agent of the Philippine Islands notified the
petitioners herein that after due investigation the Insular Auditor
found and decided that the leakages of the two whole cases were
due to its negligence and that the deduction of the sum of P22.53,
the invoice value of the goods lost, and held by the Auditor to be
the true value thereof, had been authorized by the said Insular
Auditor.
"Petitioner thereupon protested against the threatened deduction,
and demanded that it be paid the full amount due for the
transportation of the two said shipments of merchandise, to wit. the
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"Thereafter, notwithstanding the protest and demand of the

petitioner as aforesaid, the Insular Auditor, in conformity with his
ruling, declined and still declines to issue to the petitioner a
warrant for the full sum of P82.79, and has tendered to it a warrant
for the sum of P60.26, which the petitioner has refused to accept.
"The sum of P22.53 authorized to be deducted by the Insular
Auditor, as appears herein, has not at any time been liquidated by
consent, agreement, or by the judgment of any court of competent
jurisdiction."
Upon a perusal of the foregoing agreed statement it will be seen
that the present litigation had its origin in a situation practically
identical with that considered by this court in Compaia General de
Tabacos vs. French and Unson (39 Phil., 34). It will be noted,
however, that the case mentioned was decided upon demurrer,
while the one now before us is to be heard and determined upon
the petition, answer, and the admitted facts.
We note that in this case, as in the case of Compaia General de
Tabacos vs. French and Unson (supra), the petition alleges that the
leakage of the lost gasoline was due to causes unknown to the
petitioner and was not due to any fault or negligence of petitioner,
its agents, or servants. The respondents, by demurring to the
petition in the earlier case, admitted that allegation. In the case
now before us that allegation is put in issue, and we find nothing in
the admitted statement of facts to support it. It results that if that
allegation is material to the relief here sought, the petition must
fail.
We are of the opinion that the allegation in question is material and
that the relief sought in this case cannot be granted.
In section 646 of the Administrative Code it is provided that when
Government property is transmitted from one place to another by
carrier, it shall be upon proper bill of lading, or receipt, from such
carrier; and it shall be the duty of the consignee, or his
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sum of P82.79. as shown by its transportation voucher presented in

this cause, hereto attached marked Exhibit C and made a part
hereof.
representative, to make full notation of any evidence of loss,
shortage, or damage, upon the bill of lading, or receipt, before
accomplishing it. It is admitted by the petitioner in the agreed
statement of facts that the consignee, at the time the oil was
delivered, noted the loss in the present case upon the two
respective bills of lading. The notation of these losses by the
consignee, in obedience to the precept of section 646 of the
Administrative Code, is competent evidence to show that the
shortage in fact existed. As the petitioner admits that the oil was
received by it for carriage and inasmuch as the fact of loss is
proved in the manner just stated, it results that there is a
presumption that the petitioner was to blame for the loss; and it
was incumbent upon the petitioner in order to entitle it to relief in
this case to rebut that presumption by proving, as is alleged in the
petition, that the loss was not due to any fault or negligence of the
petitioner.
The mere proof of delivery of goods in good order to a carrier, and
of their arrival at the place of destination in bad order, makes out a
prima facie case against the carrier, so that if no explanation is
given as to how the injury occurred, the carrier must be held
responsible. (4 R. C. L., p. 917.) It is incumbent upon the carrier to
prove that the loss was due to accident or some other circumstance
inconsistent with its liability. (Articles 361-363, Code of
Commerce. ) Indeed, if the Government of the Philippine Islands
had instituted an action in a court of law against the petitioner to
recover the value of the oil lost while these consignments were in
the course of transportation, it would, upon the facts appearing
before us, have been entitled to judgment.
From this it is apparent that the mandamus prayed for cannot be
granted. It is a rule of universal application that a petition for
extraordinary relief of the character here sought must show merit.
That is, the petitioner's right to relief must be clear. Such cannot be
said to be the case where, as here, a presumption of responsibility
on the part of the petitioner stands unrefuted upon the record.
We are of the opinion that, in the absence of proof showing that the
carrier was-not at fault in respect to the matter under discussion,
the Insular Auditor was entitled to withhold, from the amount
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The petition will be dismissed, with costs against the petitioner. So
ordered.
Mapa, C.J., Araullo, Avancea and Villamor, JJ., concur.
Malcolm, J., concurs in the result.
Mirasol v. Dollar, 53 Phil 125
SECOND DIVISION
[G.R. No. 29721. March 27, 1929.]
AMANDO MIRASOL, plaintiff-appellant, vs. THE ROBERT
DOLLAR CO., defendant-appellant.
Vicente Hilado for plaintiff-appellant.
J. A. Wolfson for defendant-appellant.
SYLLABUS
1.
WHEN SHIPPER IS NOT BOUND. Where it appears that a
bill of lading was issued to a shipper containing a clause limiting
the carrier's liability, printed in fine letters on the back of the bill of
lading, which he did not sign and of which he was not advised, in
an action for damages, the shipper is not bound by the clause
which limits the carrier's liability.
2.
WHEN BURDEN OF PROOF IS SHIFTED. Shippers who are
forced to ship goods on an ocean liner, have some legal rights, and
when goods are delivered on board ship in good order and
condition, and the shipowner delivers them to the shipper in bad
order and condition, in an action for damages, the burden of proof
is then shifted, and it devolves upon the shipowner to both allege
and prove that the goods were damaged by reason of some act
which legally exempts him from liability.
3.
REASON FOR RULE. As to when and how goods were
damaged in transit is a matter peculiarly within the knowledge of
the shipowner and his employees, and to require the plaintiff to
prove as to when and how the damage was done would force him
to rely upon the employees of the defendant's ship which in legal
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admittedly due to the petitioner for the freight charges, a sum

sufficient to cover the value of the oil lost in transit.
effect would be to say that he cannot recover damages for any
reason.
STATEMENT
After the promulgation of the decision rendered by the Second
Division on February 13, 1929, 1 the defendant filed a motion to
have the case heard and decided in banc, and inasmuch as the
legal questions involved are important to the shipping interests, the
court thought it best to do so.
After the formal pleas, plaintiff alleges that he is the owner and
consignee of two cases of books shipped in good order and
condition at New York, U. S. A., on board the defendant's steamship
President Garfield, for transport and delivery to the plaintiff in the
City of Manila, all freight charges paid. That the two cases arrived
in Manila on September 1, 1927, in bad order and damaged
condition, resulting in the total loss of one case and a partial loss of
the other. That the loss in one case is P1,630, and the other P700,
for which he filed his claims, and defendant has refused and
neglected to pay, giving as its reason that the damage in question
"was caused by sea water." That plaintiff never entered into any
contract with the defendant limiting defendant's liability as a
common carrier, and when he wrote the letter of September 3,
1927, he had not then ascertained the contents of the damaged
case, and could not determine their value. That he never intended
to ratify or confirm any agreement to limit the liability of the
defendant. That on September 9, 1927, when the other case was
found, plaintiff filed a claim for the real damage of the books
therein named in the sum of $375.
Plaintiff prays for corresponding judgment, with legal interest from
the filing of the complaint and costs.
For answer the defendant made a general and specific denial, and
as a separate and special defense alleges that the steamship
President Garfield at all the times alleged was in all respects
seaworthy and properly manned, equipped and supplied, and fit for
the voyage. That the damage to plaintiff's merchandise, if any, was
not caused through the negligence of the vessel, its master, agent,
officers, crew, tackle or appurtenances, nor by reason of the vessel
being unseaworthy or improperly manned, "but that such damage,
if any, resulted from faults or errors in navigation or in the
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management of said vessel." As a second separate and special

defense, defendant alleges that in the bill of lading issued by the
defendant to plaintiff, it was agreed in writing that defendant
should not be "held liable for any loss of, or damage to, any of said
merchandise resulting from any of the following causes, to wit: Acts
of God, perils of the sea or other waters," and that plaintiff's
damage, if any, was caused by "Acts of God" or "perils of the sea."
As a third special defense, defendant quoted clause 13 of the bill of
lading, in which it is stated that in no case shall it be held liable "for
or in respect to said merchandise or property beyond the sum of
two hundred and fifty dollars for any piece package or any article
not enclosed in a package, unless a higher value is stated herein
and ad valorem freight paid or assessed thereon," and that there
was no other agreement. That on September 3, 1927 the plaintiff
wrote the defendant a letter as follows:
"Therefore, I wish to file claim of damage to the meager maximum
value that your bills of lading will indemnify me, that is $250 as per
condition 13."
As a fourth special defense, defendant alleges that the damage, if
any, was caused by "sea water," and that the bill of lading exempts
defendant from liability for that cause. That damage by "sea water"
is a shipper's risk, and that defendant is not liable.
As a result of the trial upon such issues, the lower court rendered
judgment for the plaintiff for P2,080, with legal interest thereon
from the date of the final judgment, with costs, from which both
parties appealed, and the plaintiff assigns the following errors:
"I.
The lower court erred in holding that plaintiff's damage on
account of the loss of the damaged books in the partially damaged
case can be compensated with an indemnity of P450 instead of
P750 as claimed by plaintiff.
"II.
The lower court, consequently, also erred in giving judgment
for plaintiff for only P2,080 instead of P2,380.
"III.
The lower court erred in not sentencing defendant to pay
legal interest on the amount of the judgment, at least, from the
date of the rendition of said judgment, namely, January 30, 1928."
The defendant assigns the following errors:
"I.
The lower court erred in failing to recognize the validity of
the limited liability clause of the bill of lading, Exhibit 2.
"II.
The lower court erred in holding defendant liable in any
amount and in failing to hold, after its finding as a fact that the
damage was caused by sea water, that the defendant is not liable
for such damage by sea water.
"III
The lower court erred in awarding damages in favor of
plaintiff and against defendant for P2,080 or in any other amount,
and in admitting, over objection, Exhibits G, H, I and J."
DECISION
JOHNS, J p:
Plaintiff's contention that he is entitled to P700 for his Encyclopedia
Britannica is not tenable. The evidence shows that with the P400
which the court allowed, he could buy a new set which would
contain all of the material and subject matter of the one which he
lost. Plaintiff's third assignment of error is well taken, as under all of
the authorities, he is entitled to legal interest from the date of his
judgment rendered in the lower court and not the date when it
becomes final. The lower court found that plaintiff's damage was
P2,080, and that finding is sustained by the evidence. There was a
total loss of one case and a partial loss of the other, and in the very
nature of things, plaintiff could not prove his loss in any other way
or manner than he did prove i, and the trial court who heard him
testify must have been convinced of the truth of his testimony.
There is no claim or pretense that the plaintiff signed the bill of
lading or that he knew of its contents at the time it was issued. In
that situation he was not legally bound by the clause which
purports to limit defendant's liability. That question was squarely
met and decided by this court in banc in Juan Ysmael & Co., vs.
Gabino Barretto & Co. (51 Phil., 90; see numerous authorities there
cited).
Among such authorities is the case of The Kensington decided by
the Supreme Court of the United States January 6, 1902 (46 Law.
ed., 190), in which the opinion was written by the late Chief Justice
White, the syllabus of which is as follows:
"1.
Restrictions of the liability of a steamship company for its
own negligence or failure of duty toward a passenger, being against
the public policy enforced by the courts of the United States, will
not be upheld, though the ticket was issued and accepted in a
foreign country and contained a condition making it subject to the
law thereof, which sustain such stipulations.
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"2.
A stipulation in a steamship passenger's ticket, which
compels him to value his baggage, at a certain sum, far less than it
is worth, or, in order to have a higher value put upon it, to subject it
to the provisions of the Harter Act, by which the carrier would be
exempted from all liability therefor from errors in navigation or
management of the vessel or other negligence, is unreasonable
and in conflict with public policy.
"3.
An arbitrary limitation of 250 francs for the baggage of any
steamship passenger, unaccompanied by any right to increase the
amount by adequate and reasonable proportional payment, is void
as against public policy."
Both the facts upon which it is based and the legal principles
involved are square in point in this case.
The defendant having received the two boxes in good condition, its
legal duty was to deliver them to the plaintiff in the same condition
in which it received them. From the time of their delivery to the
defendant in New York until they were delivered to the plaintiff in
Manila, the boxes were under the control and supervision of the
defendant and beyond the control of the plaintiff. The defendant
having admitted that the boxes were damaged while in transit and
in its possession, the burden of proof then shifted, and it devolved
upon the defendant to both allege and prove that the damage was
caused by reason of some fact which exempted it from liability. As
to how the boxes were damaged, when or where, was a matter
peculiarly and exclusively within the knowledge of the defendant,
and in the very nature of things could not be in the knowledge of
the plaintiff. To require the plaintiff to prove as to when and how the
damage was caused would force him to call and rely upon the
employees of the defendant's ship, which in legal effect would be to
say that he could not recover any damage for any reason. That is
not the law.
Shippers who are forced to ship goods on an ocean liner or any
other ship have some legal rights, and when goods are delivered on
board ship in good order and condition, and the shipowner delivers
them to the shipper in bad order and condition, it then devolves
upon the shipowner to both allege and prove that the goods were
damaged by reason of some fact which legally exempts him from
liability; otherwise, the shipper would be left without any redress,
no matter what may have caused the damage.
The lower court in its opinion says:
"The defendant has not even attempted to prove that the two
cases were wet with sea water by fortuitous event, force majeure or
nature and defect of the things themselves. Consequently, it must
be presumed that it was by causes entirely distinct and in no
manner imputable to the plaintiff, and of which the steamer
President Garfield or any of its crew could not have been entirely
unaware."
And the evidence for the defendant shows that the damage was
largely caused by "sea water," from which it contends that it is
exempt under the provisions of its bill of lading and the provisions
of article 361 of the Code of Commerce, which is as follows:
"Merchandise shall be transported at the risk and venture of the
shipper, if the contrary was not expressly stipulated.
"Therefore, all damages and impairment suffered by the goods
during the transportation, by reason of accident, force majeure, or
by virtue of the nature or defect of the articles, shall be for the
account and risk of the shipper.
"The proof of these accidents is incumbent on the carrier."
In the final analysis, the cases were received by the defendant in
New York in good order and condition, and when they arrived in
Manila, they were in bad condition, and one was a total loss. The
fact that the cases were damaged by "sea water," standing alone
and within itself, is not evidence that they were damaged by force
majeure or for a cause beyond the defendant's control. The words
"perils of the sea," as stated in defendant's brief apply to "all kinds
of marine casualties, such as shipwreck, foundering, stranding,"
and among other things, it is said: "Tempest rocks, shoals, icebergs
and other obstacles are within the expression," and "where the peril
is the proximate cause of the loss, the shipowner is excused."
"Something fortuitous and out of the ordinary course is involved in
both words 'peril' or 'accident.'" Defendant also cites and relies on
the case of Government of the Philippine Islands vs. Ynchausti &
Company (40 Phil., 219), but it appears from a reading of that case
that the facts are very different and, hence, it is not in point. In the
instant case, there is no claim or pretense that the two cases were
not in good order when received on board the ship, and it is
admitted that they were in bad order on their arrival at Manila.
Hence, they must have been damaged in transit. In the very nature
of things, if they were damaged by reason of a tempest, rocks,
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Separate Opinions
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icebergs, foundering, stranding or the perils of the sea, that would

be a matter exclusively within the knowledge of the officers of
defendant's ship, and in the very nature of things would not be
within plaintiff's knowledge, and upon all of such questions, there is
a failure of proof.
The judgment of the lower court will be modified, so as to give the
plaintiff legal interest on the amount of his judgment from the date
of its rendition in the lower court, and in all other respects affirmed,
with costs. So ordered.
Johnson, Malcolm, Ostrand, Romualdez and Villa-Real, JJ., concur.
ARTICLE 1734. Common carriers are responsible for the loss,
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
STREET, J., dissenting in part:

I gave a hesitating adherence to the decision of this case in
division, and upon further reflection, I am now constrained to
record my belief that the decision is in part erroneous. I agree with
the court that the defendant is liable to the plaintiff, but I think that
its liability is limited, under clause 13, printed on the back of the bill
of lading, to the amount of 250 dollars for each of the two boxes of
books comprising this consignment. While the law does not permit
a carrier gratuitously to exempt itself from liability for the
negligence of its servants, it can effectually do so for a valuable
consideration; and where freight rates are adjusted upon the basis
of a reasonable limited value per package, where a higher value is
not declared by the shipper, the limitation as to the value is
binding. This court in two well considered decisions has heretofore
upheld a limitation of exactly the character of that indicated in
clause 13 (H. E. Heacock Co. vs. Macondray & Co., 42 Phil., 205;
Freixas & Co. vs. Pacific Mail Steamship Co., 42 Phil., 198); and I am
unable to see any sufficient reason for ignoring those decisions.
Footnotes
1.
Not reported.
2.
(a)
Exception from liability

Natural disaster
Arts. 1734(1), 1739, 1740; Art. 361
Code of Commerce
(4) The character of the goods or defects in the packing or in the

containers;
(5) Order or act of competent public authority.
ARTICLE 1739. In order that the common carrier may be exempted
from responsibility, the natural disaster must have been the
proximate and only cause of the loss. However, the common carrier
must exercise due diligence to prevent or minimize loss before,
during and after the occurrence of flood, storm or other natural
disaster in order that the common carrier may be exempted from
liability for the loss, destruction, or deterioration of the goods. The
same duty is incumbent upon the common carrier in case of an act
of the public enemy referred to in article 1734, No. 2.
ARTICLE 1740. If the common carrier negligently incurs in delay in
transporting the goods, a natural disaster shall not free such carrier
from responsibility.
ARTICLE 361. The merchandise shall be transported at the risk and
venture of the shipper, if the contrary has not been expressly
stipulated. As a consequence, all the losses and deterioration which
the goods may suffer during the transportation by reason of
fortuitous event, force majeure, or the inherent nature and defect
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Tan Chiong v. Ynchausti, 22 Phil 153

EN BANC
[G.R. No. 6092. March 8, 1912.]
TAN CHIONG SIAN, plaintiff-appellee, vs. INCHAUSTI & CO.,
defendant-appellant.
Haussermann, Cohn & Fisher, for appellant.
O'Brien & DeWitt, for appellee.
SYLLABUS
1.
COMMON CARRIERS; LOSS OF SHIP AND CARGO; FORCE
MAJEURE. Loss of a ship and of its cargo, in a wreck due to
accident or force majeure must, as a general rule, fall upon their
respective owners, except in cases where the wrecking or stranding
of the vessel occurred through malice, carelessness or lack of skill
on the part of the captain and in the remaining cases indicated in
article 841 of the Code of Commerce.
2.
ID.; ID.; ID.;-EXEMPTION FROM LIABILITY. Under article the
Code of Commerce transportation of merchandise is for account,
risk and hazard of the shipper, unless the contrary has been
expressly stipulated. The carrier is exempt from liability if he prove,
as it is incumbent upon him to do, that the loss or destruction of
the merchandise was due to accident and force majeure and not to
fraud, fault, or negligence on the part of the captain or owners of
the ship.
DECISION
TORRES, J p:
This is an appeal through bill of exceptions, by counsel for the firm
of Inchausti & Co., from a judgment rendered by the Honorable A.
S. Crossfield, judge.
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of the goods, shall be for the account and risk of the shipper. Proof
of these accidents is incumbent upon the carrier.
On January 11, 1909, the Chinaman, Tan Chiong Sian or Tan Chinto,
filed a written complaint, which was amended on the 28th of the
same month and again amended on October 27 of the same year,
against the said firm, wherein he alleged, among other things, as a
cause of action: That, on or about November 25, 1908, the plaintiff
delivered to the defendant 205 bundles or cases of general
merchandise belonging to him, which Inchausti & Co., upon
receiving, bound themselves to deliver in the pueblo of Catarman,
Province of Samar, to the Chinaman, Ong Bieng Sip, and in
consideration of the obligations contracted by the defendant party,
the plaintiff obligated himself to pay to the latter the sum of P250
Philippine currency, which payment should be made upon the
delivery of the said merchandise in the said pueblo of Catarman;
but that the defendant company neither carried nor delivered the
aforementioned merchandise to the said Ong Bieng Sip, in
Catarman, but unjustly and negligently failed to do so, with the
result that the said merchandise was almost totally lost; that, had
the defendant party complied well and faithfully with its obligation,
according to the agreement made, the merchandise concerned
would have had a value of P20,000 in the said pueblo of Catarman
on the date when it should have been delivered there, wherefore
the defendant party owed the plaintiff the said sum of P20,000,
which it had not paid him, or any part thereof, notwithstanding the
many demands of the plaintiff; therefore the latter prayed for
judgment against the defendant for the said sum, together with
legal interest thereon from November 25, 1908, and the costs of
the suit.
Counsel for the defendant company, in his answer, set forth that he
admitted the allegations of paragraphs 1 and 2 of the complaint,
amended for the second time, and denied those of paragraphs 3, 4,
5, 6, and 7 of the same. As his first special defense, he alleged that
on or about November 28, 1908, his client, the said firm, received
in Manila from Ong Bieng Sip 205 bundles, bales, or cases of
merchandise to be placed on board the steamer Sorsogon,
belonging to the defendant, for shipment to the port of Gubat,
Province of Sorsogon, to be in the said port transshipped into
another of the defendant's vessels for transportation to the port of
Catarman, Samar, and delivered to the aforesaid Chinaman, Ong
Bieng Sip; that the defendant company, upon receiving the said
merchandise from the latter, Ong Bieng Sip, and on its entering into
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a contract of maritime transportation with him did not know and

was not notified that the plaintiff, Tan Chiong Sian, had any interest
whatever in the said merchandise and had made with the plaintiff
no contract relative to the transportation of such goods, for, on
receiving the latter from the said Ong Bieng Sip, for transportation,
there were made out and delivered to him three bills of lading, Nos.
38, 39, and 76, which contained a list of the goods received and,
printed on the back thereof were the terms of the maritime
transportation contract entered into by and between the plaintiff
and the defendant company, copies of which bills of lading and
contract, marked as Exhibits A, B, and C, are of record, attached to
and made an integral part of the said answer; that Ong Bieng Sip
accepted the said bills of lading and the contract extended on the
backs thereof; that the merchandise mentioned was put on board
the steamer Sorsogon and carried to the port of Gubat, Province of
Sorsogon, where this vessel arrived on November 28, 1908, on
which date the lorcha Pilar, into which the said merchandise was to
be transshipped for carriage to Catarman, was not at Gubat, and
therefore the goods had to be unloaded and stored in the
defendant company's warehouses at Gubat; that, on the 4th of
December of the same year, the lorcha Pilar arrived at Gubat and,
after the termination of certain necessary work, the goods received
from the Chinaman, Ong Bieng Sip, were taken aboard the same,
together with other merchandise belonging to the defendant party,
for the purpose of transportation to the port of Catarman; that,
before the said lorcha could leave for its destination, a strong wind
arose which in the course of the day increased in force until, early
in the morning of the following day, the lorcha was dragged and
driven, by the force of the storm, upon the shore, despite the
means employed by the crew to avoid the accident, and
notwithstanding the five anchors that held the craft, which was
thus wrecked and completely destroyed and the merchandise with
which it was laden, including the 205 bundles or packages taken
aboard for the said Chinaman, was scattered on the shore; that, on
that occasion, the lorcha Pilar was in good condition, provided with
all the proper and necessary equipment and accessories and
carried a crew of sufficient number in command of a skillful patron
or master, wherefore the wreck of the said craft was solely due to
the irresistible force of the elements and of the storm which drove
it upon the shore; that the defendant company, with the greatest
possible diligence, gathered up the said shipwrecked goods that
had been shipped by the Chinaman, Ong Bieng Sip, but, owing to
the damage they had suffered, it was impossible to preserve them,
so, after having offered to deliver them to him, the defendant
proceeded, in the presence of a notary, to sell them at public
auction and realized from the sale thereof P1,693.67, the
reasonable value of the same in the condition in which they were
after they had been gathered up and salved from the wreck of the
lorcha Pilar; that the expenses occasioned by such salvage and sale
of the said goods amounted to P151.35, which were paid by the
defendant party; that the latter offered to the Chinese shipper, the
plaintiff, the amount realized from the sale of the said merchandise,
less P151.35, the amount of the expenses, and the sum of P250,
the amount of the freight stipulated, and is still willing to pay such
products of the said sale to the aforementioned Ong Bieng Sip or to
any other person who should establish his subrogation to the rights
of the Chinaman, Ong Bieng Sip, with respect to the said amount;
that, as his client's second special defense, the defendant company
alleged that one of the conditions of the shipping contract executed
between it and the Chinaman, Ong Bieng Sip, relative to the
transportation of the said merchandise, was that the said firm
should not be held liable for more than P25 for any bundle or
package, unless the value of its contents should be stated in the bill
of lading, and that the shipper, the Chinaman, Ong Bieng Sip, did
not state in the bill of lading the value of any of the bundles or
packages in which the goods shipped by him were packed. Counsel
for the defendant company, therefore, prayed the court to absolve
his client from the complaint, with the costs against the plaintiff.
After the hearing of the case and the introduction of testimony by
the parties, judgment was rendered, on March 18, 1910, in favor of
the plaintiff, Tan Chiong Sian or Tan Chinto, against the defendant
Inchausti & Co., for the sum of P14,642.63, with interest at the rate
of 6 per cent per annum from January 11, 1909, and for the costs of
the trial. The defendant party appealed from this judgment.
This suit was brought for the purpose of collecting a certain sum
which it is alleged the defendant firm owes the plaintiff for losses
and damages suffered by the latter as a result of the former's
noncompliance with the terms of an agreement or contract to
transport certain merchandise by sea from this city to the pueblo of
Catarman, Island of Samar, for the sum of P250.
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The principal question to be determined is whether the defendant is

liable for the loss of the merchandise and for failure to deliver the
same at the place of destination, or whether he is relieved from
responsibility on the ground of force majeure.
Article 1601 of the Civil Code prescribes:
"Carriers of goods by land or by water shall be subject with regard
to the keeping and preservation of the things entrusted to them, to
the same obligations as determined for innkeepers by articles 1783
and 1784.
"The provisions of this article shall be understood without prejudice
to what is prescribed by the Code of Commerce with regard to
transportation by sea and land.
Article 1602 reads:
"Carriers are also liable for the loss of and damage to the things
which they receive, unless they prove that the loss or damage
arose from a fortuitous event or force majeure."
The articles aforecited are as follows:
"ART. 1783. The depositum of goods made by travelers in inns or
hostelries shall also be considered a necessary one. The keepers of
inns and hostelries are liable for them as such bailees, provided
that notice thereof may have been given to them or to their
employees, and that the travelers on their part take the
precautions which said innkeepers or their substitutes may have
advised them concerning the care and vigilance of said goods.
"ART. 1784. The liability referred to in the preceding article shall
include damages to the goods of the travelers caused by servants
or employees of the keepers of inns or hostelries as well as by
strangers, but not those arising from robbery or which may be
caused by any other case of force majeure."
Article 361 of the Code of Commerce provides:
"Merchandise shall be transported at the risk and venture of the
shipper, unless the contrary was expressly stipulated.
"Therefore, all damages and impairment suffered by the goods in
transportation, by reason of accident, force majeure, or by virtue of
the nature or defect of the articles, shall be for the account and risk
of the shipper.
"The proof of these accidents is incumbent on the carrier.
"ART. 362.
The carrier, however, shall be liable for the losses
and damages arising from the causes mentioned in the foregoing
article if it is proved that they occurred on account of his
negligence or because he did not take the precautions usually
adopted by careful persons, unless the shipper committed fraud in
the bill of lading, stating that the goods were of a class or quality
different from what they really were.
"If, notwithstanding the precaution referred to in this article, the
goods transported run the risk of being lost on account of the
nature or by reason of an unavoidable accident, without there
being time for the owners of the same to dispose thereof, the
carrier shall proceed to their sale placing them for this purpose at
the disposal of the Judicial authority or of the officials determined
by special provisions.
"ART. 363.
With the exception of the cases prescribed in the
second paragraph of article 361, the carrier shall be obliged to
deliver the goods transported in the same condition in which,
according to the bill of lading, they were at the time of their receipt,
without any detriment or impairment, and should he not do so, he
shall be obliged to pay the value of the goods not delivered at the
point where they should have been and at the time the delivery
should have taken place.
"If part of the goods transported should be delivered the consignee
may refuse to receive them, when he proves that he can not make
use thereof without the others."
On November 25, 1908, Inchausti & Co. received in Manila from the
Chinaman, Ong Bieng Sip, 205 bundles, bales or cases of goods to
be conveyed by the steamer Sorsogon to the port of Gubat,
Province of Sorsogon, where they were to be transshipped to
another vessel belonging to the defendant company and by the
latter transported to the pueblo of Catarman, Island of Samar, there
to be delivered to the Chinese shipper with whom the defendant
party made the shipping contract. To this end three bills of lading
were executed, Nos. 38, 39, and 76, copies of which, marked as
Exhibits A, B, and C, are found on pages 13, 14, and 15 of the
record.
The steamer Sorsogon, which carried the goods, arrived at the port
of Gubat on the 28th of that month and as the lorcha Pilar, to which
the merchandise was to be transshipped for its transportation to
Catarman, was not yet there, the cargo was unloaded and stored in
the defendant company's warehouses at that port.
Several days later, the lorcha just mentioned arrived at Gubat and,
after the cargo it carried had been unloaded, the merchandise
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belonging to the Chinaman, Ong Bieng Sip, together with other

goods owned by the defendant Inchausti & Co., was taken aboard
to be transported to Catarman; but on December 5, 1908, before
the Pilar could leave for its destination, towed by the launch Texas,
there arose a storm, which, coming from the Pacific, passed over
Gubat and, as a result of the strong wind and heavy sea, the lorcha
was driven upon the shore and wrecked, and its cargo, including
the Chinese shipper's 205 packages of goods, scattered on the
beach. Laborers or workmen of the defendant company, by its
order, then proceeded to gather up the plaintiff's merchandise and,
as it was impossible to preserve it after it was salved from the
wreck of the lorcha, it was sold at public auction before a notary for
the sum of P1,693.67.
The contract entered into between the Chinese shipper, Ong Bieng
Sip, and the firm of Inchausti & Co., provided that transportation
should be furnished from Manila to Catarman, although the
merchandise taken aboard the steamer Sorsogon was to be
transshipped at Gubat to another vessel which was to convey it
from that port to Catarman; it was not stipulated in the said
contract that the Sorsogon should convey the goods to their final
destination, nor that the vessel into which they were to be
transshipped, should be a steamer. The shipper, Ong Bieng Sip,
therefore assented to these arrangements and made no protest
when his 205 packages of merchandise were unloaded from the
ship and, on account of the absence of the lorcha Pilar, stored in
the warehouses at Gubat nor did he offer any objection to the
lading of his merchandise on to this lorcha as soon as it arrived and
was prepared to receive cargo; moreover, he knew that to reach
the port of Catarman with promptness and dispatch, the lorcha had
to be towed by some vessel like the launch Texas, which the
defendant company had been steadily using for similar operations
in those waters.
Hence the shipper, Ong Bieng Sip, made no protest or objection to
the methods adopted by the agents of the defendant for the
transportation of his goods to the port of their destination, and the
record does not show that in Gubat the defendant possessed any
other means for the conveyance and transportation of
merchandise, at least for Catarman, than the lorcha Pilar, towed by
the said launch and exposed during its passage to all sorts of
accidents and perils from the nature and seafaring qualities of a
lorcha, from the circumstances then present and the winds
prevailing on the Pacific Ocean during the months of November and
December.
It is to be noted that a lorcha is not easily managed or steered
when traveling, for, out at sea, it can only be moved by wind and
sails; and along the coast near the shore and in the estuaries where
it customarily travels, it can only move by poling. For this reason, in
order to arrive at the pueblo of Catarman with promptness and
dispatch, the lorcha was usually towed by the launch Texas.
The record does not show that, from the afternoon of the 4th of
December, 1908, until the morning of the following day, the 5th,
the patron or master of the lorcha which was anchored in the cove
of Gubat, received any notice from the captain of the steamer Ton
Yek, also anchored near by, of the near approach of a storm. The
said captain, Juan Domingo Alberdi, makes no reference in his
sworn testimony of having given any such notice to the patron of
the lorcha, nor did the latter, Mariano Gadvilao, testify that he
received such notice from the captain of the Ton Yek or from the
person in charge of the Government observatory. Gadvilao, the
patron, testified that only between 10 and 11 o'clock of Saturday
morning, the 5th of December, was he informed by Inchausti &
Co.'s agent in Gubat that a baguio was approaching; that
thereupon, on account of the condition of the sea, he dropped the
four anchors that the lorcha had on board and immediately went
ashore to get another anchor and a new cable in order more
securely to hold the boat in view of the predicted storm. This
testimony was corroborated by the said representative, Melchor
Muoz. So the lorcha, when the storm broke upon it, was held fast
by five anchors and was, as testified by the defendant without
contradiction or evidence to the contrary, well found and provided
with all proper and necessary equipment and had a sufficient crew
for its management and preservation.
The patron of the lorcha testified specifically that at Gubat or in its
immediate vicinity there is no port whatever adequate for the
shelter and refuge of vessels in cases of danger, and that, even
though there were, on being advised between 10 and 11 o'clock of
the morning of the 5th, of the approach of a storm from the eastern
Pacific, it would have been impossible to spread any sails or weigh
anchor on the lorcha without being dragged or driven against the
reefs by the force of the wind. As the craft was not provided with
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steam or other motive power, it would not have been possible for it
to change its anchorage, nor move from the place where it lay,
even several hours before the notice was received by its patron. A
lorcha can not be compared with a steamer which does not need
the help or assistance of any other vessel in its movements.
Due importance must be given to the testimony of the weather
observer, Antonio Rocha, that the notice received from the Manila
Observatory on the afternoon of December 4, with regard to a
storm traveling from the east of the Pelew Islands toward the
northwest, was not made known to the people of Gubat and that he
merely left a memorandum notice on the desk of the station,
intending to give explanations thereof to any person who should
request them of him. So the notice of the storm sent by the Manila
Observatory was only known to the said observer, and he did not
apprise the public of the approach of the storm until he received
another notice from Manila at 20 minutes past 8 o'clock on
Saturday morning, December 5. Then he made a public
announcement and advised the authorities of the storm that was
coming.
The patron of the lorcha Pilar is charged with gross negligence for
not having endeavored to remove his craft to a safe place in the
Sabang River, about half a mile from where it was anchored.
In order to find out whether there was or was not such negligence
on the part of the patron, it becomes necessary to determine, first,
whether the lorcha, on the morning of December 5, could be moved
by its own power and without being towed by any steamboat, since
it had no steam engine of its own; second, whether the lorcha, on
account of its draft and the shallowness of the mouth of the said
river, could have entered the latter before the storm broke.
The patron, Mariano Gadvilao, stated under oath that the weather
during the night of December 4 was not threatening and he did not
believe there would be a storm; that he knew the Sabang River;
and that the lorcha Pilar, when loaded, could not enter as there was
not sufficient water in its channel; that, according to an official
chart of the port of Gubat, the bar of the Sabang River was covered
by only a foot and a half of water at ordinary low tide and the
lorcha Pilar, when loaded, drew 6 feet and a half; that aside from
the fact that the condition of the sea would not have permitted the
lorcha to take shelter in the said river, even could it have relied
upon the assistance of a towboat, at half past 8 o'clock in the
morning the tide was still low; there was but little water in the river
and still less over the bar.
It was proven by the said official chart of the port of Gubat, that the
depth of water over the bar or entrance of the Sabang River is only
one foot and a half at ordinary low tide; that the rise and fall of the
tide is about 4 feet, the highest tide being at 2 o'clock in the
afternoon of every day; and at that hour, on the 5th of December,
the hurricane had already made its appearance and the wind was
blowing with all its fury and raising great waves.
The lorcha Pilar, loaded as it had been from the afternoon of
December 4, even though it could have been moved by means of
poles, without being towed, evidently could not have entered the
Sabang River on the morning of the 5th, when the wind began to
increase and the sea to become rough, on account of the low tide,
the shallowness of the channel, and the boat's draft.
The facts stated in the foregoing paragraph were proved by the
said chart which was exhibited in evidence and not rejected or
assailed by the plaintiff. They were also supported by the sworn
testimony of the patron of the lorcha, unrebutted by any oral
evidence on the part of the plaintiff such as might disprove the
certainty of the facts related, and, according to section 275 of the
Code of Civil Procedure, the natural phenomenon of the tides,
mentioned in the official hydrographic map, Exhibit 7, which is
prima facie evidence on the subject, of the hours of its occurrence
and of the conditions and circumstances of the port of Gubat, shall
be judicially recognized without the introduction of proof, unless
facts to the contrary be proven, which was not done by the plaintiff,
nor was it proven that between the hours of 10 and 11 o'clock of
the morning of December 5, 1908, there did not prevail a state of
low tide in the port of Gubat.
The oral evidence adduced by the plaintiff with respect to the depth
of the Sabang River, was unable to overcome that introduced by
the defendant, especially the said chart. According to section 320
of the Code of Civil Procedure, such a chart is prima facie evidence
of particulars of general notoriety and interest, such as the
existence of shoals of varying depths in the bar and mouth of the
Sabang River and which obstruct the entrance into the same; the
distance, length, and number of the said shoals, with other details
apparently well known to the patron of the lorcha Pilar, to judge
from his testimony.
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Vessels of considerable draft, larger than the said lorcha, might

have entered the Sabang River some seven or nine years before,
according to the testimony of the Chinaman, Antonio B. Yap Cunco,
though he did not state whether they did so at high tide; but, since
1901, or previous years, until 1908, changes may have taken place
in the bed of the river, its mouth and its bar. More shoals may have
formed or those in existence may have increased in extent by the
constant action of the sea. This is the reason why the patron,
Gadvilao, who was acquainted with the conditions of the port and
cove of Gubat, positively declared that the lorcha Pilar could not, on
account of her draft, enter the Sabang River, on account of low
water.
The patron of the lorcha, after stating (p. 58) that at Gubat or in its
vicinity there is no port that affords shelter, affirmed that it was
impossible to hoist the sails or weigh the anchors on the morning of
the 5th of December, owing to the force of the wind and because
the boat would immediately have been dragged or driven upon the
shoals; that furthermore the lorcha was anchored in a channel
some 300 brazas wide, but, notwithstanding this width, the Pilar
was, for want of motive power, unable to move without being
exposed to be dashed against the coast by the strong wind and the
heavy sea then prevailing. The testimony of this witness was
neither impugned nor offset by any evidence whatever; he was a
patron of long years of service and of much practice in seafaring,
especially in the port of Gubat and its vicinity, who had
commanded or been intrusted with the command of other crafts
similar to the lorcha Pilar and his testimony was absolutely
uncontradicted.
The patron Gadvilao, being cognizant of the duties imposed upon
him by rules 14 and 15 of article 612, and others, of the Code of
Commerce, remained with his sailors, during the time the hurricane
was raging, on board the lorcha from the morning of December 5
until early the following morning, the 6th, without abandoning the
boat, notwithstanding the imminent peril to which he was exposed,
and kept to his post until after the wreck and the lorcha had been
dashed against the rocks. Then he solicited help from the captain of
the steamer Ton Yek, and, thanks to the relief afforded by a small
boat sent by the latter officer, Gadvilao with his crew succeeded in
reaching land and immediately reported the occurrence to the
representative of Inchausti & Co. and to the public official from
whom he obtained the document of protest, Exhibit 1. By such
procedure, he showed that, as a patron skilled in the exercise of his
vocation, he performed the duties imposed by law in cases of
shipwreck brought about by force majeure.
Treating of shipwrecks, article 840 of the Code of Commerce
prescribes:
"The losses and damages suffered by a vessel and he cargo by
reason of shipwreck or stranding shall be individually for the
account of the owners, the part of the wreck which may be saved
belonging to them in the same proportion."
And article 841 of the same code reads:
"If the wreck or stranding should arise through the malice,
negligence, or lack of skill of the captain, or because the vessel put
to sea insufficiently repaired and supplied, the owner or the
freighters may demand indemnity of the captain for the damages
caused to the vessel or cargo by the accident, in accordance with
the provisions contained in articles 610, 612, 614 and 621."
The general rule established in the first of the foregoing articles is
that the loss of the vessel and of its cargo, as the result of
shipwreck, shall fall upon the respective owners thereof, save for
the exceptions specified in the second of the said articles.
These legal provisions are in harmony with those of articles 361
and 362 of the Code of Commerce, and are applicable whenever it
is proved that the loss of, or damage to, the goods was the result of
a fortuitous event or of force majeure; but the carrier shall be liable
for the loss or the damage arising from the causes aforementioned,
if it shall have been proven that they occurred through his own fault
or negligence or by his failure to take the same precautions usually
adopted by diligent and careful persons.
In the contract made and entered into by and between the owner of
the goods and the defendant, no term was fixed within which the
said merchandise should be delivered to the former at Catarman,
nor was it proved that there was any delay in loading the goods
and transporting them to their destination. From the 28th of
November, when the steamer Sorsogon arrived at Gubat and
landed the said goods belonging to Ong Bieng Sip to await the
lorcha Pilar which was to convey them to Catarman, as agreed
upon, no vessel carrying merchandise made the voyage from Gubat
to the said pueblo of the Island of Samar, and with Ong Bieng Sip's
merchandise there were also to be shipped goods belonging to the
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defendant company, which goods were actually taken on board the

said lorcha and suffered the same damage as those belonging to
the Chinaman. So that there was no negligence, abandonment, or
delay in the shipment of Ong Bieng Sip's merchandise, and all that
was done by the carrier, Inchausti & Co., was what it regularly and
usually did in the transportation by sea from Manila to Catarman of
all classes of merchandise. No attempt has been made to prove
that any course other than the foregoing was pursued by that firm
on this occasion; therefore the defendant party is not liable for the
damage occasioned as a result of the wreck or stranding of the
lorcha Pilar because of the hurricane that overtook this craft while it
was anchored in the port of Gubat, on December 5, 1908, ready to
be conveyed to that of Catarman.
It is a fact not disputed, and admitted by the plaintiff, that the
lorcha Pilar was stranded and wrecked on the coast of Gubat during
the night of the 5th or early in the morning of the 6th of December,
1908, as the result of a violent storm that came from the Pacific
Ocean, and, consequently, it is a proven fact that the loss or
damage of the goods shipped on the said lorcha was due to the
force majeure which caused the wreck of the said craft.
According to the aforecited article 361 of the Code of Commerce,
merchandise shall be transported at the risk and venture of the
shipper, unless the contrary be expressly stipulated. No such
stipulation appears of record, therefore, all damages and
impairment suffered by the goods in transportation, by reason of
accident, force majeure, or by virtue of the nature or defect of the
articles, are for the account and risk of the shipper.
A final clause of this same article adds that the burden of proof of
these accidents is upon the carrier; the trial record fully discloses
that the loss and damage of the goods shipped by the Chinaman,
Ong Bieng Sip, was due to the stranding and wreck of the lorcha
Pilar in the heavy storm or hurricane aforementioned; this the
plaintiff did not deny, and admitted that it took place between the
afternoon of the 5th and early in the morning of the 6th of
December, 1908, so it is evident that the defendant is exempt from
the obligation imposed by the law to prove the occurrence of the
said storm, hurricane, or cyclone in the port of Gubat, and,
therefore, if the said goods were lost or damaged and could not be
delivered in Catarman, it was due to a fortuitous event and a
superior, irresistible natural force, or force majeure, which
completely disabled the lorcha intended for their transportation to
the said port of the Island of Samar.
The record bears no proof that the said loss or damage caused by
the stranding or wreck of the lorcha Pilar as a result of the storm
mentioned, occurred through carelessness or negligence on the
part of the defendant company, its agents or the patron of the said
lorcha, or because they did not take the precautions usually
adopted by careful and diligent persons, as required by article 362
of the Code of Commerce; the defendant company, as well as its
agents and the patron of the lorcha, had a natural interest in
preserving the craft and its own goods laden therein an interest
equal to that of the Chinese shipper in preserving his own which
were on board the said lorcha and, in fact, the defendant, his
agents and the patron did take the measures which they deemed
necessary and proper in order to save the lorcha and its cargo from
the impending danger; accordingly, the patron, as soon as he was
informed that a storm was approaching, proceeded to clear the
boat of all gear which might offer resistance to the wind, dropped
the four anchors he had, and even procured an extra anchor from
the land, together with a new cable, and cast it into the water,
thereby adding, in so far as possible, to the stability and security of
the craft, in anticipation of what might occur, as presaged by the
violence of the wind and the heavy sea; and Inchausti & Company's
agent furnished the articles requested by the patron of the lorcha
for the purpose of preventing the loss of the boat; thus did they all
display all the diligence and care such as might have been
employed by anyone in similar circumstances, especially the patron
who was responsible for the lorcha under his charge; nor is it
possible to believe that the latter failed to adopt all the measures
that were necessary to save his own life and those of the crew and
to free himself from the imminent peril of shipwreck.
In view of the fact that the lorcha Pilar had no means of changing
its anchorage, even supposing that there was a better one, and was
unable to accept help from any steamer that might have towed it to
another point, as wherever it might have anchored, it would
continually have been exposed to the lashing of the waves and to
the fury of the hurricane, for the port of Gubat is a cove or open
roadstead with no shelter whatever from the winds that sweep over
it from the Pacific Ocean, and in view of the circumstance that it
was impossible for the said lorcha, loaded as it then was, to have
Intelligentia et
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Transportation Law
Moreover, it is to be noted that, subsequent to the wreck, the

defendant company's agent took all the requisite measures for the
salvage of such of the goods as could be recovered after the
accident, which he did with the knowledge of the shipper, Ong
Bieng Sip, and, in effecting their sale, he endeavored to secure all
possible advantage to the Chinese shipper; in all these
proceedings, as shown by the record, he acted in obedience to the
law.
From all the foregoing it is concluded that the defendant is not
liable for the loss and damage of the goods shipped on the lorcha
Pilar by the Chinaman, Ong Bieng Sip, inasmuch as such loss and
damage were the result of a fortuitous event or force majeure, and
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entered the Sabang River, even though there had been a steamer
to tow it, not only because of an insufficient depth of water in its
channel, but also on account of the very high bar at the entrance of
the said river, it is incontrovertible that the stranding and wreck of
the lorcha Pilar was due to a fortuitous event or to force majeure
and not to the fault and negligence of the defendant company and
its agents or of the patron, Mariano Gadvilao, inasmuch as the
record discloses it to have been duly proved that the latter, in the
difficult situation in which unfortunately the boat under his charge
was placed, took all the precautions that any diligent man should
have taken whose duty it was to save the boat and its cargo, and,
by the instinct of self-preservation, his own life and those of the
crew of the lorcha; therefore, considering the conduct of the patron
of the lorcha and that of the defendant's agent in Gubat, during the
time of the occurrence of the disaster, the defendant company has
not incurred any liability whatever for the loss of the goods, the
value of which is demanded by the plaintiff; it must, besides, be
taken into account that the defendant itself also lost goods of its
own and the lorcha too.
From the moment that it is held that the loss of the said lorcha was
due to force majeure, a fortuitous event, with no conclusive proof of
negligence or of the failure to take the precautions such as diligent
and careful persons usually adopt to avoid the loss of the boat and
its cargo, it is neither just nor proper to attribute the loss or
damage of the goods in question to any fault, carelessness, or
negligence on the part of the defendant company and its agents
and, especially, the patron of the lorcha Pilar.
there was no negligence or lack of care and diligence on the part of
the defendant company or its agents.
Therefore, we hold it proper to reverse the judgment appealed
from, and to absolve, as we hereby do, the defendant, Inchausti &
Co., without special finding as to costs.
Arellano, C.J., Mapa and Johnson, JJ., concur.
Carson and Trent, JJ., dissent.
Separate Opinions
MORELAND, J., dissenting:
In my opinion the decision of the court below, which this court
reverses, is clearly in accordance with law and in strict conformity
with equity and justice. The defendant, a shipowner, agreed with
the plaintiff to transport P14,000 worth of property from Manila to
Catarman, Province of Samar. The defendant never fulfilled its
contract. Instead of delivering the property at Catarman, Province
of Samar, it left it on board of a lorcha in the waters of Gubat, a
port in the southern part of the Island of Luzon, where, during a
storm, the lorcha foundered and the property was lost.
This court holds that the Chinaman must lose his property. This is
the manner in which the defendant lost the goods of the plaintiff:
The Sorsogon, on which the goods were loaded at Manila, arrived at
Gubat about the 28th of November, 1908. A few days later the
lorcha Pilar arrived at Gubat, towed by the tug Texas. The lorcha
was without means of locomotion of its own, except its sails, which,
from the record, appear never to have been used and were
substantially useless, and could move about and protect itself from
the weather only by being towed or "poled." The only boat on the
coast owned by the defendant which could tow the lorcha was the
tug Texas. Sometime before the 5th of December, at least one day
before the storm broke, the goods belonging to the plaintiff were
loaded on this lorcha. The tug Texas, under the orders of the
defendant, left the locality where the lorcha was loaded and did not
return until after it was wrecked.
Let us see what were the conditions at the time the defendant
voluntarily and unnecessarily placed the property of the plaintiff on
the lorcha Pilar:
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(1)
It must be remembered that Gubat is located on the Pacific
coast. The waters of Gubat are not protected waters; they are not
inclosed; they are not in the form of a bay; they are directly open to
the winds from the Pacific Ocean, without protection or shelter of
any kind, except possibly the mouth of the river, a matter here in
dispute and which will be referred to later. They are likewise open
to the full sweep of the waves of the Pacific coming from its widest
reaches.
(2)
At the time the plaintiff's goods were loaded upon the lorcha
Pilar it was the height of the typhoon season in that locality. The
prevailing winds were from the Pacific. Destructive baguios might
reasonably be expected at any time. It was only with the exercise
of diligence and prudence that shipping could be protected
therefrom.
(3)
As I have before indicated, the lorcha Pilar had substantially
no means of locomotion of its own and depended for its protection
in stormy weather entirely upon the steam tug Texas or being
"poled" into the mouth of the river by its crew. At the time of the
storm which destroyed the lorcha, and for some time prior thereto
and for some days thereafter, the Texas was at the port of
Barcelona, on the coast several miles south of Gubat, having been
sent by order of the defendant, its owner.
Summarizing, then, we have the defendant voluntarily placing the
property of the plaintiff upon the kind of craft above described,
dispatching to a distant port substantially the only means of
locomotion and protection which that craft had, except, as we have
said, by being poled, placing that lorcha in waters directly exposed
to the winds and waves of the Pacific and at the mercy of every
baguio that blew; and this during a season of the year when winds
were generally high and destructive baguios might be expected at
any time, and with full knowledge that if a typhoon came while the
agents of the defendant were unprepared the property of the
plaintiff would in all probability be lost.
Having these facts in mind, let us see what the agents of the
defendant did to protect the property of the plaintiff which they had
voluntarily placed in a situation of such peril.
(4)
At the time of the destruction of the lorcha there was a
Government weather observatory at Gubat which received advices
many hours in advance of the approach of a typhoon toward that
locality. It had been there for some years. The purpose of that
observatory was to furnish information to the public concerning the
formation and approach of typhoons from the Pacific and of warning
the people with exposed shipping to take such precautions as were
necessary for its protection. This was known to the defendant's
agents at Gubat. They knew that the observatory had a public
office, open to anybody who cared to visit it, in which would be
found all of the latest information relating to storms and baguios
coming from the Pacific Ocean. They knew that the officials of said
observatory were there for the express purpose of giving such
information. The defendant's agents had at Gubat a barometer and
all the other instruments usually kept by seamen and navigators for
forecasting the weather.
(5)
As we have said, the storm occurred on the 5th of
December. It wrought its greatest havoc late in the afternoon and
the early part of the night. At about 2 o'clock on the day before the
storm, that is, on the 4th of December, the observatory at Gubat
received notice from the Manila observatory that a baguio was
forming in the Pacific Ocean. At about the same time at Barcelona,
only 10 miles south of Gubat, the barometer on board the Texas
dropped so rupidly as to indicate such dangerous weather
probabilities that the captain of the Texas deemed it unsafe to
venture out of the harbor. On the same afternoon the barometer on
board the only steam vessel near Gubat, the Ton Yek, also went
down. Although it does not expressly appear in the evidence, yet it
is an inference entirely fair from the record, and against which
nothing whatever can be urged, that the barometer in the
possession of the agents of the defendant also dropped with the
same rapidity. In all human probability this could not be otherwise
in view of the rapid and decisive fall of the barometer on board the
Texas, only 10 miles away, and the fact that the typhoon broke over
both places equally. At the same time, and more pronounced a little
later, every symptom which men who have to deal with the sea
could and would readily observe, and which the captain of the Ton
Yek did observe as a matter of fact, indicated the approach of a
heavy storm. These evidences were heeded by the captain of the
Ton Yek, who, early on the morning of the 5th, without waiting for
the appearance of a storm signal at the observatory, sent; a
messenger to the observatory for the purpose of ascertaining with
more accuracy what was going to happen. In spite of all of these
things, most of which occurred on the afternoon or evening of the
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day preceding the storm, the agents of the defendant did

absolutely nothing to inform themselves as to the prospective
weather conditions or as to whether or not a baguio was
approaching, and did absolutely nothing to preserve or protect the
property which they had placed in so exposed and dangerous a
place.
(6)
The morning of the 5th arrived. As we have already stated,
all of the signs which men who have to do with the sea so readily
read indicated unquestionably and decisively the approach of the
storm which the advices received by the observatory at 2 o'clock
on the afternoon before told the inhabitants of that locality was
probably coming. Still the agents of the defendant did nothing. The
captain of the Ton Yek, although his vessel was a steam vessel and
was able to take care of itself by reason of its machinery, judging
these signs and portents, found it advisable to consult with the
observatory early on the morning of the 5th. The approach of a
storm was apparent to him and he took precautions accordingly. Yet
the agents of the defendant did nothing. Although the lorcha on
which they had put the property of the plaintiff was, according to
their own admissions, utterly unprotected, and although P14,000
worth of goods intrusted to their care was in great danger of being
lost, still they did absolutely nothing, either by anticipation or
otherwise, to protect that property therefrom.
(7)
On the morning of the 5th at about 8.20 or 8.30 o'clock the
observatory ran up the first danger signal. Still the agents of the
defendant noted nothing, did nothing. They paid absolutely no
attention to it, as they had paid no attention whatever to the other
indications. They left the lorcha to its fate without lifting a finger to
save it. At 9 o'clock the wind had risen and the waves had
commenced to roll. Still nothing was done. At 9.30 the winds were
still stronger and the waves higher. Still nothing was done. At 10.30
the increase in the strength of the wind and of the height of the
waves continued. And yet the agents of the defendant did nothing.
It was well toward 11 o'clock before they began to move. At that
time it was too late. The wind and waves were so high that, with
the means at hand, the lorcha could not be moved from the
exposed position in which it was, even if it be conceded that there
was any safer place within those waters. The lorcha was prevented
from dashing itself immediately upon the rocks only by virtue of its
anchor. At between 10.30 and 11 o'clock the captain of the lorcha
came ashore to secure additional anchors. At that time, however,
as we have observed, it was too late to unload the goods and too
late to remove the lorcha to a safe place within the mouth of the
river, even if that were possible. The agents of the defendant,
having done absolutely nothing up to this time now found, after
they had awakened from their lethargy, that it was too late to do
more than stand by and see the property, which had been intrusted
to their care and for the carrying of which they had been paid,
dashed to pieces on the rock and swallowed up by the sea.
(8)
For nearly eighteen hours prior to the disaster the
information that the disaster was coming lay under the very noses
of the agents of the defendant. For nearly eighteen hours the
barometer had been dropping steadily, so much so that their own
vessel dared not leave a port only 10 miles distant on the afternoon
before. For eighteen hours every warning which nature could give,
indicating the disaster which subsequently came, had been
repeatedly thrust upon them. Yet they did nothing. Having placed
the goods of the plaintiff in an exposed and dangerous position, in
waters open to the winds and waves of the Pacific Ocean, at the
height of the typhoon season, in a vessel which had no motive
power of its own, and having sent away that which they themselves
substantially admit was its only protection, the agents of the
defendant exercised no care or precaution whatever to the end that
they might protect the goods which they themselves had so
recklessly exposed.
Yet this court, under such circumstances, holds that the defendant
may go in peace and that the plaintiff is the one who must bear the
burden of such negligence.
With that decision I can not agree.
An act of God can not be urged for the protection of a person who
has been guilty of gross negligence in not trying to avert its results.
One who has accepted responsibility for pay Can not weakly fold
his hands and say that he was prevented from meeting that
responsibility by an act of God, when the exercise of ordinary care
end prudence would have averted the results flowing from that act.
One who has placed the property of another, instructed to his care,
in an unseaworthy craft, upon dangerous waters, cannot absolve
himself by crying, "an act of God," when every effect which a
Intelligentia et
Scientia Semper Mea
Transportation Law
Where perishable property, such as potatoes, is received by a

common carrier at a season when a very low temperature may
reasonably be apprehended, great diligence should be used in
forwarding such property with dispatch and haste; and where, by a
delay of two or three days, the property is damaged by freezing,
the carrier may be held liable for the damage. (Hewett vs. The
Chicago, B. & Q. Ry. Co., 63 Ia., 611.) A carrier is bound to provide a
vessel in all respects adequate to the purpose, with a captain and
crew of requisite skill or ability; and, failing in these particulars,
though the loss be occasioned by an act of God, the carrier may not
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typhoon produced upon that property could have been avoided by

the exercise of common care and prudence. When the negligence
of the carrier concurs with an act of God in producing a loss, the
carrier is not exempted from liability by showing that the
immediate cause of the damage was the act of God; or, as it has
been expressed, "when the loss is caused by the act of God, if the
negligence of the carrier mingles with it as an active and
cooperative cause, he is still liable." The loss and damage to
perishable articles in consequence of the weather will not excuse
the carrier if it could have been prevented by due care and
diligence. The carrier must not only show that it did all that was
usual, but all that was necessary to be done under the
circumstances. (Wing vs. New York, etc., Ry. Co., 1 Hilt. (N. Y.), 235;
Philleo vs. Sanford, 17 Tex., 228.) To be exempt from liability for
loss because of an act of God, the common carrier must be free
from any previous negligence or misconduct by which that loss or
damage may have been occasioned. For, although the immediate
or proximate cause of a loss in any given instance may have been
what is termed an act of God, yet if the carrier unnecessarily
exposed the property to such accident by any culpable act or
omission of his own, he is not excused. (Mcgraw vs. Baltimore and
Ohio Ry. Co., 41 Am. Rep., 696.) In the case of Wolf vs. American
Express Co., 43 Mo., 421, Wagner, J., said:
"The act of God which excuses the carrier must not only be the
proximate cause of the loss, but the better opinion is that it must
be the sole cause. And where the loss is caused by the 'act of God,'
if the negligence of the carrier mingles with it as an active and
cooperative cause, he is still responsible. (Amies vs. Stevens, 1
Stra., 128.)"
set up a providential calamity to protect himself against what may
have arisen from his own folly. (Hart vs. Allen and Grant, 2 Watts
(Pa.), 114.)
This doctrine is fully supported by the Spanish authorities on the
subject.
Manresa in his commentaries to section 1105 of the Civil Code-of
Spain, volume 8, page 91, says:
"Elucidation of article 1105 and the idea of accident is interesting
under the following aspects: Relation between it and the blame;
enumeration of the requisites that must be present; proof of the
event and characterization thereof; and the consequences it
produces. Let us, examine them.
"Even when the distinction is simple and reasonable between
blame for some exempting circumstance (because it may not be
serious enough to involve such blame, under the law or the
obligation) and accident, since the former admits an imputation
which the latter excludes, even when the former may not be the
basis for legal responsibility, and therefore it can not be said that
where no responsible blame exists there the accident commences,
yet the latter is undeniably characterized by unexpectedness and
inevitability, circumstances susceptible of relative interpretation,
and so whatever relates to the blame must be taken into account,
because, as we shall see, it is in a certain sense, especially in
practical application, connected with the matter under
consideration.
"Aside from this statement of ideas, there may be another of
consequences, for in the complexity of facts, in the same
obligation, there may be present blame enough to involve such and
also accident. When both causes are present, with separation of
time and effects, for partial breach due to one of them may be
possible and then the other may operate to aggravate or complete
these consequences, the distinction is easy and to each cause may
be assigned its own effect for the corresponding result, as neither
exemption, on account of accident, can be extended to what may
be imputed nor to what in any way depends upon it by basing
responsibility arising from blame on the fact that the damage is the
result thereof.
Intelligentia et
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"In connection with this question, a judgment of November 22,

1904, declares that there are some events which, independent of
the will of the obligor, hinder the fulfillment of the obligation, and
yet do not constitute cases of force majeure for the purposes of
such fulfillment, because the possibility that they would occur could
have been foreseen, articles 1101 and 1104 being applicable and
not article 1105, since negligence or blame is also present from not
informing the obligee, either at first or later on, of the state of
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"The problem becomes more difficult when both causes concur to

produce the same effect or when, even though the effect may be
due to accident, the obligor has not exercised necessary diligence,
however blameless he was for the results arising from the breach.
In the first of the last two suppositions, the solution is plain,
because when the obligor incurs the blame of actually producing
the result, even when it is not the only cause, or even the principal
one, there is still sufficient connection between it and the
consequences to cause them to be imputed to him and, as a
voluntary element exists in the causes, there is lacking the
circumstance indispensable to exemption on account of accident.
The second supposition presents a very difficult problem of proof,
which rests upon the obligor, and calls for a careful analysis of the
origin of the breach. The difficulty in this case consists in that the
blame, in addition to its subjective aspect for imputing the
consequences to the obligor, has an objective aspect, to wit, that
these consequences may arise, that the damage which must be
repaired is caused, in such manner that due diligence may be
lacking and yet not extend to the point of involving responsibility,
because it produces no results. Now then, if an accident occurs
under these conditions, absolutely independent of the negligence
that may have existed, it may have occurred with or without
negligence and therefore any derivation of consequences was
lacking, then it can not be said that responsibility arises therefrom;
but to reach this conclusion there first rests with the obligor proof
so difficult that, in addition to overcoming the presumption of
existence of blame, it involves the very fine distinction of the origin
of the breach and perfectly reveals the occurrence of the accident,
joined by their coexistence, and demonstrating absolute lack of
consequences and influence of blame.
affairs and the situation, so as to avoid the consequent damage.
This was the case of a bull fight that could not be held because the
ring was not completed in time for reasons beyond the control of
the contractor, but the fact that the contract did not state that the
ring was unconstructed and the possibility that it would not be at
the time specified, reveals, in the opinion of the court, the lack of
foresight or the negligence which makes article 1105 inapplicable.
"In an essentially analogous way, judgments were pronounced on
June 12, 1899 (Tribunal Contencioso administrativo), and on
October 27, 1905 (Sala tercera), against the company leasing the
tobacco monopoly, for losses caused by theft and fire. It was
further decided in these cases that the company and not the State
must bear the losses, for while accidental fire in a tobacco factory
and theft of stamped goods stored in a branch house may
constitute accidents, yet they do not deserve this characterization
when they occur through omission, neglect or lack of care which
imply breach of the contract.
"According to the text of article 1105, which agrees with the
rational idea of accident, it is sufficient for the event to constitute
such that it have any of the two characteristics enumerated; if it is
foreseen, it is of little import that it be unavoidable; and if it is
unavoidable it does not matter that it may have been foreseen. The
first supposition requires some explanation: an event may be
wholly unforeseen, but, after it has occurred, be very slow in
producing effects, and in such case. although it could not have
been foreseen, as there is time before it produces its effects, the
latter must be considered.
"Besides this special supposition, in which, if carefully considered,
the two characteristics do not concur, since the idea of
unexpectedness, as is seen, is relative, it will be sufficient that one
or the other be present. The possibility of foresight must be
weighed rationally with consideration of all the circumstances, but
this general rule has, strictly speaking, an exception when the
event, although in a general way very difficult, almost impossible to
be foreseen, should for some reason be known to the obligor in due
time.
Intelligentia et
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"Such was the doctrine established in our ancient law regarding the
obligor; the reasons whereof are theoretically set forth further on;
and as a written provision, law 20, title 13, partida 5, which
expressly laid down this principle in connection with pawn-broking
contracts, and which was, by analogy, made the basis for extending
a similar provision to the remaining cases.
"That the Civil Code is inspired by the same idea is clearly
expressed in article 1183 thereof, the commentary on which should
be consulted. Still such solution depends upon the nature of the
proof and of the accident, since its existence as an abnormal event
hindering the fulfillment of the obligation must be proved and not
presumed, and the burden of this proof rests upon the obligor, and
not upon the obligee, whose proof would have to be negative.
Moreover since an accident is the basis for exemption from
responsibility, it must be proved by him who will benefit thereby
and who objects to the requirement that he fulfill his obligations. To
these reasons are joined those above set forth in connection with
the proof of contractual blame, since they are, according to the
same article, 1183, above cited, closely related questions, so much
so that they become two phases of one question presumption
against the existence of accident and of what tends to establish
presumption of blame, in the absence of proof to overcome it.
"Proof of accident must include these points: the occurrence of the
event, the bearing it has upon breach of the obligation, and the
concurrence of unexpectedness and inevitability. In connection with
the first two points, the proof resting upon the obligor must be
specific and exact; but as for the last, although it may be admitted
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"The condition of inevitability can not be understood in so absolute

a sense that it should take away the character of accident from
many that are strictly such, because they are undoubtedly causes,
however powerful they may be, whose injurious effects might have
been avoided by exercising a number of precautions, so
exaggerated and so out of proportion to the importance of the
trouble anticipated, that they would be unreasonable and not
required in law. In such cases, if the means which can and must
rationally be employed are not effective, it will be held to have
been unavoidable. So we see demonstrated how the idea of
diligence is related, somewhat in the nature of limitation, to the
accident.
as a general proposition that, in addition to proving the event, he
must also demonstrate that it involves the condition required to
make it an accident, there are some of such magnitude and, by
their nature, of almost impossible prevision, that proof of their
occurrence demonstrates their condition. Undoubtedly, and
differently from proof of the accident, the exceptional circumstance
that the event (which should as a general proposition be regarded
as unforeseen) was known to the obligor for some special reason,
must be proven by the obligee who asserts it, since the obligation
of proof resting upon the former is fulfilled in this regard by
demonstrating that the event ought rationally to be held to have
been unforeseen.
"Since proof of the accident is related to proof of the blame, it is
evident that the obligor must also prove, so far as he is concerned,
that he is not to blame for breach of the obligation.
"Exemption from responsibility in accidents established by article
1105 has, according to its text, two exceptions, whereby an event
may be plainly proven, and be unforeseen and unavoidable and still
not produce such exemption, viz, when the exception is either
stipulated in the obligation or is expressly mentioned by the law.
The basis for these exceptions rests, according to the cases, either
upon the freedom of contracts, which is opposed to prohibition of a
compact, wherein, without immorality, there is merely an
emphasized stipulation, which is meant to guarantee in every case
an interest and indirectly to secure careful and special diligence in
the fulfillment of the obligation; or upon the nature of the
obligations when risk is an essential element therein; or finally
upon cases whose circumstances, as happens with that provided
for by the last paragraph of article 1096, justify the special
strictness of the law.
"In conclusion, we shall point out that in order to relieve the obligor
from his obligation, it must be remembered that the occurrence of
the event does not suffice, but that the impossibility of fulfilling the
obligation must be the direct consequence of the accident, so that
when it can be fulfilled it will subsist, even if only in part, and
therefore, in order to see whether or not the accident produces this
result the nature of the obligation must be considered, and
according to whether it be specific or general, etc., it will or will not
be extinguished."
Intelligentia et
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Transportation Law
I do not here argue the assertion of the plaintiff denied by the

defendant, that, at any time before nine o'clock of the day of the
destruction of the lorcha, the defendant's agents could have placed
the lorcha in the mouth of the river out of harm's way. I believe that
a fair preponderance of the evidence shows that this could have
been done. The defendant denies this, asserting that the water was
too shallow. Nevertheless, fourteen days after the storm, the
foundered lorcha, water-logged and undoubtedly containing water,
was " poled" by its crew from the place where it went on the rocks
to a place of safety inside the mouth of the river. It is more than
probable that this could have been done at any time before the
storm became too high. At least common prudence would have
required the unloading of the lorcha, which could easily have been
accomplished before the storm if the agents of the defendant had
awakened themselves to their duty.
Martini v. Macondray, 39 Phil 934
EN BANC
[G.R. No. 13972. July 28, 1919.]
G. MARTINI, LTD., plaintiff-appellee, vs. MACONDRAY & CO.
(INC.), defendant-appellant.
Lawrence & Ross for appellant.
Gabriel La O for appellee.
SYLLABUS
1.
SHIPPING; DECK CARGO; DAMAGE RESULTING FROM ACTION
OF ELEMENTS. Where cargo is, with the owner's consent,
transported on the deck of a sea-going vessel upon a bill of lading
exempting the ship's company from liability for damage, the risk of
any damage resulting from carriage on deck, such as the damage
caused by rain or the splashing aboard of sea water, must be borne
by the owner.
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To hold the carrier responsible in the case at bar, it is not necessary

to go so far as the authorities just cited. The negligence is so clear
that it is not necessary to strain doctrines or even press them to
their limits.
DECISION
STREET, J p:
In September of the year 1916, the plaintiff G. Martini, Ltd.,
arranged with the defendant company, as agents of the Eastern
and Australian Steamship Company, for the shipment of two
hundred and nineteen cases or packages of chemical products from
Manila, Philippine Islands, to Kobe, Japan. The goods were
embarked at Manila on the steamship Eastern, and were carried to
Kobe on the deck of that ship. Upon arrival at the port of
destination it was found that the chemicals comprised in the
shipment had suffered damage from the effects of both fresh and
salt water; and the present action was instituted by the plaintiff to
recover the amount of the damage thereby occasioned. In the
Court of First Instance judgment was rendered in favor of the
plaintiffs for the sum of P34,997.56, with interest from March 24,
1917, and costs of the proceeding. From this judgment the
defendant appealed.
That the damage was caused by water, either falling in the form of
rain or splashing aboard by the action of wind and waves, is
unquestionable; and the contention of the plaintiff is that it was the
duty of the ship's company to stow this cargo in the hold and not to
place it in an exposed position on the open deck. The defense is
that by the contract of affreightment the cargo in question was to
be carried on deck at the shipper's risk; and attention is directed to
the fact that on the face of each bill of lading is clearly stamped
with a rubber stencil in conspicuous letters the words "on deck at
shipper's risk." In this connection the defendant relies upon
paragraph 19 of the several bills of lading issued for transportation
of this cargo, which reads as follows:
"19.
Goods signed for on this bill of lading as carried on deck are
entirely at shipper's risk, whether carried on deck or under hatches,
and the steamer is not liable for any loss or damage from any
cause whatever. "
The plaintiff insists that the agreement was that the cargo in
question should be carried in the ordinary manner, that is, in the
ship's hold, and that the plaintiff never gave its consent for the
Intelligentia et
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Transportation Law
Ordinarily the shipper is supposed to produce the mate's receipt to

the agents of the ship's company, who thereupon issue the bill of
lading to the shipper. When, however, the shipper, as not
infrequently happens, desires to procure the bill of lading before he
obtains the mate's receipt, it is customary for him to enter into a
written obligation, binding himself, among other things, to abide by
the terms of the mate's receipt. In the present instance the mate's
receipt did not come to the plaintiff's hand until Monday night, but
as the plaintiff was desirous of obtaining the bills of lading on the
Saturday morning preceding in order that he might negotiate them
at the bank, a request was made for the delivery of the bills of
lading on that day To effectuate this, the plaintiff was required to
enter into the written obligation, calling itself a "letter of
guarantee," which was introduced in evidence as Exhibit D-C. This
document is of the date of September 16, 1916, and of the
following tenor:
"In consideration of your signing us clean B/L for the
undermentioned cargo per above steamer to be shipped on or
under deck at ship's option, for Kobe without production of the
mate's receipt, we hereby guarantee to hold you free from any
responsibility by your doing so, and for any expense should the
whole or part of the cargo be shut out, or otherwise, and to hand
you said mate's receipt as soon as it reaches us and to abide by all
clauses and notations on the same."
In conformity with the purpose of this document the bills of lading
were issued, and the negotiable copies were, upon the same day,
negotiated at the bank by the plaintiff for 90 per cent of the invoice
value of the goods. As already stated these bills of lading contained
on their face, conspicuously stenciled, the words "on deck at
shipper's risks." The mate's receipt, received by the plaintiff two
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goods to be carried on deck. The material facts bearing on this

controverted point appear to be these: On September 15, 1916, the
plaintiff applied to the defendant for necessary space on the
steamship Eastern, and received a shipping order, which
constituted authority for the ship's officers to receive the cargo
aboard. One part of this document contained a form which, when
signed by the mate, would constitute the "mate's receipt," showing
that the cargo had been taken on.
days later also bore the notation "on deck at shipper's risk," written
with pencil, and evidently by the officer who took the cargo on
board and signed the receipt.
The plaintiff insists that it had at no time agreed for the cargo to be
carried on deck; and G. Martini, manager of Martini & Company,
says that the first intimation he had of this was when, at about 4
p.m. on that Saturday afternoon, he examined the nonnegotiable
copies of the bills of lading, which had been retained by the house,
and discovered the words "on deck at shipper's risk" stamped
thereon. Martini says that upon seeing this, he at once called the
attention of S. Codina thereto, the latter being an employee of the
house whose duty it was to attend to all shipments of merchandise
and who in fact had entire control of all matters relating to the
shipping of this cargo. Codina pretends that up to the time when
Martini directed his attention to the fact, he himself was unaware
that the cargo was being stowed on deck; and upon the discovery
of this fact the two gentlemen mentioned expressed mutual
surprise and dissatisfaction. Martini says that he told Codina to
protest at once to Macondray & Company over the telephone, while
Martini himself proceeded to endite a letter, which appears in
evidence as Exhibit D-T of the defendant and is in its material part
as follows:
"MANILA, September 16, 1916.
"MESSRS. MACONDRAY & Co.,
"Manila,
"DEAR SIRS: In re our shipment per steamship Eastern, we are very
much surprised to see that the remark 'on deck at shipper's risk'
has been stamped on the bills of lading Nos. 8 to 23. . . . and
although not believing that the same have actually been shipped
on deck we must hold you responsible for any consequence, loss,
or damage deriving from your action should they have been
shipped as stated.
"Yours faithfully,
"G. MARTINI, LTD.
"By S. CODINA."
This letter was followed by another of the same date and of
substantially the same tenor but containing the following additional
statement:
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"It is the prevailing practice that, whenever a cargo is being carried

on deck, shipowners or agents give advice of it to shippers previous
to shipment taking place, and obtain their consent to it. If we had
been advised of it, shipment would not have been effected by us.
We regret very much this occurrence, but you will understand that
in view of your having acted in this case on your own responsibility,
we shall have to hold you amenable for any consequences that
may be caused from your action."
The first of these letters was forthwith dispatched by messenger,
and upon receiving it, Macondray & Company called Codina by
telephone at about 4.30 p.m. and, referring to the communication
just received, told him that Macondray & Company could not accept
the cargo for transportation otherwise than on deck and that if
Martini & Company were dissatisfied, the cargo could be discharged
from the ship.
There is substantial conformity in the testimony of the two parties
with respect to the time of the conversation by telephone and the
nature of the message which Macondray & Company intended to
convey, though the witnesses differ as to some details and in
respect to what occurred immediately thereafter. Basa, who was in
charge of the shipping department of Macondray & Company and
who conducted the conversation on the part of the latter, says that
he told Codina that if Martini & Company was unwilling for the
cargo to be carried on deck that they could discharge it and further
advised him that Macondray & Company's empty boats were still at
the ship's side ready to receive the cargo. In reply Codina stated
that Martini, the manager, was then out and that he would answer
in a few minutes, after communication with Martini. Within the
course of half an hour Codina called Basa up and said that as the
cargo was already stowed on deck, Martini & Company were willing
for it to be carried in this way, and that their protest was a mere
formality. Codina admits that he was informed by Basa that the
cargo could not be carried under the hatches, and that if Martini &
Company were dissatisfied to have it carried on deck, they could
discharge it. He denies being told that it could be taken off in
Macondray & Company's boats. Codina further states that when the
conversation was broken off for the purpose of enabling him to
communicate with Martini, he consulted with the latter, and was
directed to say that Martini & Company did not consent for the
cargo to be carried on deck and that it must be discharged. Upon
returning to the telephone, he found that the connection had been
broken, and he says that he was thereafter unable to get
Macondray & Company by telephone during that afternoon,
although he attempted to do so more than once.
In the light of all the evidence the conclusion seems clear enough
that, although Martini & Company would have greatly preferred for
the cargo to be carried under the hatches, they nevertheless
consented for it to go on deck. Codina, if attentive to the interests
of his house, must have known from the tenor of the guaranty to
which his signature is affixed that the defendant had reserved the
right to carry it on deck, and when the bills of lading were delivered
to the plaintiff they plainly showed that the cargo would be so
carried.
It must therefore be considered that the plaintiff was duly affected
with notice as to the manner in which the cargo was shipped. No
complaint, however, was made until after the bills of lading had
been negotiated at the bank. When the manager of Martini &
Company first had his attention drawn to the fact that the cargo
was being carried on deck, he called Codina to account, and the
latter found it to his interest to feign surprise and pretend that he
had been deceived by Macondray & Company. Even then there was
time to stop the shipment, but Martini & Company failed to give the
necessary instructions, thereby manifesting acquiescence in the
accomplished fact.
In a later letter of October 25, 1916, addressed to Macondray &
Company, Martini, referring to the incident says: "If previous to the
mailing of the documents, you had actually notified us by phone or
otherwise that you could not accept our cargo in any other way but
on deck, we should have promptly given you instructions to leave it
on the lighters and at our disposal."
From this it is inferable that one reason why the plaintiff allowed
the cargo to be carried away without being discharged, was that
the bills had been discounted and to stop the shipment would have
entailed the necessity of refunding the money which the bank had
advanced, with the inconveniences incident thereto. Another
reason apparently was that Martini discerned, or thought he
discerned the possibility of shifting the risk so as to make it fall
upon the ship's company.
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With reference to the practicability of discharging the cargo in the

late afternoon or evening of Saturday, September 16, before the
ship departed, as it did at 8 p.m. some evidence was introduced
tending to show that in order to get the cargo off certain formalities
were necessary which could not be accomplished, as for instance,
the return of the mate's receipt (which had not yet come to the
plaintiff's hands), the securing of a permit from the customs
authorities, and the securing of an order of discharge from the
steamship company. In view of the fact that the plaintiff did nothing
whatever looking towards the discharge of the cargo, not even so
much as to notify Macondray & Company that the cargo must come
off, the proof relative to the practicability of discharge is
inconclusive. If the plaintiff had promptly informed Macondray &
Company of their resolve to have the cargo discharged, and the
latter had nevertheless permitted the ship to sail without
discharging it, there would have been some ground for plaintiff's
contention that its consent had not been given for the goods to be
carried on deck. Needless to say we attach no weight to the
statement of Codina that he was unable to get Macondray &
Company by telephone in order to communicate directions for the
discharge of the cargo.
The evidence submitted in behalf of the defendant shows that there
was no space in the hold to take the cargo; and it was therefore
unnecessary to consider whether the chemicals to be shipped were
of an explosive or inflammable character, such as to require
stowage on deck. By reason of the fact that the cargo had to be
carried on deck at all events, if carried at all, the guaranty Exhibit
D-C was so drawn as to permit stowage either on or under deck at
the ship's option; and the attention of Codina must have been
drawn to this provision because Macondray & Company refused to
issue the bills of lading upon a guaranty signed by Codina upon
another form (Exhibit R), which contained no such provision. The
messenger between the two establishments who was sent for the
bills of lading accordingly had to make a second trip and go back
for a letter of guaranty signed upon the desired form. The pretense
of Codina that he was deceived into signing a document different
from that which he supposed himself to be signing is wholly
unsustained.
The result of the discussion is that Martini & Company must be held
to have assented to the shipment of the cargo on deck and that
they are bound by the bills of lading in the form in which they were
issued. The trial court in our opinion erred in holding otherwise, and
in particular by ignoring, or failing to give sufficient weight to the
contract of guaranty.
Having determined that the plaintiff consented to the shipment of
the cargo on deck, we proceed to consider whether the defendant
can be held liable for the damage which befell the cargo in
question. It of course goes without saying that if a clean bill of
lading had been issued and the plaintiff had not consented for the
cargo to go on deck, the ship's company would have been liable for
all damage which resulted from the carriage on deck. In the case of
The Paragon (1 Ware, 326; 18 Fed. Cas. No. 10708), decided in
1836 in one of the district courts of the United States, it appeared
that cargo was shipped from Boston, Massachusetts, to Portland,
Maine, upon what is called a clean bill of lading, that is, one in the
common form without any memorandum in the margin or on its
face showing that the goods are to be carried on deck. It was
proved that the shipper had not given his consent for carriage on
deck. Nevertheless, the master stowed the goods on deck; and a
storm having arisen, it became necessary to jettison them. None of
the cargo in the hold was lost. It was thus evident that although the
cargo in question was lost by peril of the sea, it would not have
been lost except for the fact that it was being carried on deck. It
was held that the ship was liable. In the course of the opinion the
following language was used:
"It is contended that the goods, in this case, having been lost by
the dangers of the seas, both the master and the vessel are
exempted from responsibility within the common exemption in bills
of lading; and the goods having been thrown overboard from
necessity, and for the safety of the vessel and cargo, as well as the
lives of the crew, that it presents a case for a general average or
contribution, upon the common principle that when a sacrifice is
made for the benefit of all, that the loss shall be shared by all. . . .
In every contract of affreightment, losses by the dangers of the
seas are excepted from the risks which the master takes upon
himself, whether the exception is expressed in the contract or not.
The exception is made by the law, and falls within the general
principle that no one is responsible for fortuitous events and
accidents of major force. Casus fortuitous nemo praestat. But then
the general law is subject to an exception, that when the inevitable
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accident is preceded by a fault of the debtor or person bound

without which it would not have happened, then he becomes
responsible for it. (Pothier, des Obligations, No. 542; Pret. a Usage,
No. 57; Story, Bailm., c. 4, No. 241; In Majorious casibus si culpa
ejus interveniat tenetur; Dig. 44, 7, 1, s. 4.)
"The master is responsible for the safe and proper stowage of the
cargo, and there is no doubt that by the general maritime law he is
bound to secure the cargo safely under deck. . . . If the master
carries goods on deck without the consent of the shipper . . . he
does it at his own risk. If they are damaged or lost in consequence
of their being thus exposed, he cannot protect himself from
responsibility by showing that they were damaged or lost by the
dangers of the seas. . . . When the shipper consents to his goods
being carried on deck, he takes the risk upon himself of these
peculiar perils. . . . This is the doctrine of all the authorities, ancient
and modern. "
Van Horn vs. Taylor (2 La. Ann., 587; 46 Am. Dec., 558), was a case
where goods stowed on deck were lost in a collision. The court
found that the ship carrying these goods was not at fault, and that
the shipper had notice of the fact that the cargo was being carried
on deck. It was held that the ship was not liable. Said the court:
"It is said that the plaintiff's goods were improperly stowed on deck;
that the deck load only was thrown overboard by the collision, the
cargo in the hold not being injured. The goods were thus laden with
the knowledge and implied approbation of the plaintiff. He was a
passenger on board the steamer, and does not appear to have
made any objection to the goods being thus carried, though the
collision occurred several days after the steamer commenced her
voyage."
In the case of The Thomas P. Thorn (8 Ben., 3; 23 Fed., Cas. No.
13927), decided in the District Court in the State of New York, it
appeared that tobacco was received upon a canal boat, with the
understanding that it was to be carried on deck, covered with
tarpaulins. Upon arrival at its destination it was found damaged by
water, for the most part on the top, and evidently as a
consequence of rains. At the same time a quantity of malt stowed
below deck on the same voyage was uninjured. In discussing the
question whether upon a contract to carry on deck, the vessel was
liable for the wetting of the tobacco, the court said:
"It is manifest that the injury to the tobacco arose simply from the
fact that it was carried on deck. The malt, carried below, although
an article easily injured, received no damage, and the voyage was
performed with usual care, and without disaster. Indeed, there is
evidence of a statement by the libelant, that tobacco must of
necessity be injured by being carried on deck. But, under a contract
to carry upon deck, the risk of any damage resulting from the place
of carriage rests upon the shipper, and, without proof of negligence
causing the damage, there can be no recovery. Here the evidence
shows that all reasonable care was taken of the tobacco during its
transportation; that the manner of stowing and covering it was
known to and assented to by the shipper; and the inference is
warranted that the injury arose, without fault of the carrier, from
rain, to which merchandise transported on deck must necessarily
be in some degree exposed. Any loss arising from damaged thus
occasioned is to be borne by the shipper."
Lawrence vs. Minturn (17 How [U.S,], 100; 15 L ed., 58), was a case
where goods stowed on deck with the consent of the shipper were
jettisoned during a storm at sea. In discussing whether this cargo
was entitled to general average, the Supreme Court of the United
States said:
"The maritime codes and writers have recognized the distinction
between cargo placed on deck, with the consent of the shipper, and
cargo under deck.
"There is not one of them which gives a recourse against the
master, the vessel, or the owners, if the property lost had been
placed on deck with the consent of its owner, and they afford very
high evidence of the general and appropriate usages, in this
particular, of merchants and shipowners.
"So the courts of this country and England, and the writers on this
subject, have treated the owner of goods on deck, with his consent,
as not having a claim on the master or owner of the ship in case of
jettison. The received law, on the point, is expressed by Chancellor
Kent, with his usual precision, in 3 Com., 240: 'Nor is the carrier in
that case (Jettison of deck load) responsible to the owner, unless
the goods were stowed on deck without the consent of the owner,
or a general custom binding him, and then he would be chargeable
with the loss.'"
In Gould vs. Oliver (4 Bing., N. C., 132), decided in the English Court
of Common Pleas in 1837, Tindal, C.J., said:
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"Where the loading on deck has taken place with the consent of the
merchant, it is obvious that no remedy against the shipowner or
master for a wrongful loading of the goods on deck can exist. The
foreign authorities are indeed express; on that point. And the
general rule of the English law, that no one can maintain an action
for a wrong, where he has consented or contributed to the act
which occasioned his loss, leads to the same conclusion."
The foregoing authorities fully sustain the proposition that where
the shipper consents to have his goods carried on deck he takes
the risks of any damage or loss sustained as a consequence of their
being so carried. In the present case it is indisputable that the
goods were injured during the voyage and solely as a consequence
of their being on deck, instead of in the ship's hold. The loss must
therefore fall on the owner. And this would be true, under the
authorities, even though paragraph 19 of the bills of lading, quoted
near the beginning of this opinion, had not been made a term of
the contract.
It is undoubtedly true that, upon general principle, and
momentarily ignoring paragraph 19 of these bills of lading, the
ship's owner might be held liable for any damage directly resulting
from a negligent failure to exercise the care properly incident to the
carriage of the merchandise on deck. For instance, if it had been
improperly placed or secured, and had been swept overboard as a
proximate result of such lack of care, the ship would be liable, to
the same extent as if the cargo had been deliberately thrown over
without justification. So, if it had been shown that, notwithstanding
the stowage of these goods on deck, the damage could have been
prevented, by the exercise of proper skill and diligence in the
discharge of the duties incumbent on the ship, the owner might still
be held.
To put the point concretely, let it be supposed that a custom had
been proved among mariners to protect deck cargo from the
elements by putting a tarpaulin over it; or approaching still more to
imaginable conditions in the present case, let it be supposed that
the persons charged with the duty of transporting this cargo, being
cognizant of the probability of damage by water, had negligently
and without good reason failed to exercise reasonable care to
protect it by covering it with tarpaulins. In such case it could hardly
be denied that the ship's company should be held liable for such
damage as might have been avoided by the use of such precaution.
But it should be borne in mind in this connection that it is
incumbent on the plaintiff, if his cause of action is founded on
negligence of this character, to allege and prove that the damage
suffered was due to failure of the persons in charge of the cargo to
use the diligence properly incident to carriage under these
conditions.
In Clark vs. Barnwell (12 How. [U.S.], 272; 13 L. ed., 985), the
Supreme Court distinguishes with great precision between the
situation where the burden of proof is upon the shipowner to prove
that the loss resulted from an excepted peril and that where the
burden of proof is upon the owner of the cargo to prove that the
loss was caused by negligence on the part of the persons employed
in the conveyance of the goods. The first two syllabi in Clark vs.
Barnwell read as follows:
"Where goods are shipped and the usual bill of lading given,
'promising to deliver them in good order, the dangers of the seas
excepted,' and they are found to be damaged the onus probandi is
upon the owners of the vessel, to show that the injury was
occasioned by one of the excepted causes.
"But, although the injury may have been occasioned by one of the
excepted causes, yet still the owners of the vessel are responsible if
the injury might have been avoided, by the exercise of reasonable
skill and attention on the part of the persons employed in the
conveyance of the goods. But the onus probandi then becomes
shifted upon the shipper, to show the negligence.
The case just referred to was one where cotton thread, put up in
boxes, had deteriorated during a lengthy voyage in a warm climate,
owing to dampness and humidity. In discussing the question of the
responsibility of the ship's owner, the court said:
"Notwithstanding, therefore, the proof was clear that the damage
was occasioned by the effect of the humidity and dampness of the
vessel, which is one of the dangers of navigation, it was competent
for the libelants to show that the respondents might have
prevented it by proper skill and diligence in the discharge of their
duties; but no such evidence is found in the record. For caught that
appears every precaution was taken that is usual or customary, or
known to shipmasters, to avoid the damage in question. And hence
we are obliged to conclude that it is to be attributed exclusively to
the dampness of the atmosphere of the vessel, without negligence
or fault on the part of the master or owners."
Intelligentia et
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It will be observed that by the terms of paragraph 19 of the bills of

lading, the ship is not to be held liable, in the case of goods signed
for as carried on deck, for any loss or damage from any cause
whatever." We are not to be understood as holding that this
provision would have protected the ship from liability for the
consequences of negligent acts, if negligence had been alleged and
proved. From the discussion in Manila Railroad Co. vs. Compania
Transatlantica and Atlantic, Gulf & Pacific Co. (38 Phil. Rep., 875), it
may be collected that the carrier would be held liable in such case,
notwithstanding the exemption contained in paragraph 19. But
however that may be damages certainly cannot be recovered on
the ground of negligence, even from a carrier, where negligence is
neither alleged nor proved.
The judgment appealed from is reversed and the defendant is
absolved from the complaint. No express pronouncement will be
made as to the costs of either instance. So ordered.
Arellano, C.J., Torres, Johnson, Araullo, Malcolm, Avancea and Moir,
JJ., concur.
Eastern Shipping v. IAC, 150 SCRA 463
FIRST DIVISION
[G.R. No. 69044. May 29, 1987.]
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Exactly the same words might be used as applicable to the facts of

the present case; and as it is apparent that the damage here was
caused by rain and sea water the risk of which is inherently
incident to carriage on deck the defendant cannot be held liable.
It is not permissible for the court, in the absence of any allegation
or proof of negligence, to attribute negligence to the ship's
employees in the matter of protecting the goods from rains and
storms. The complaint on the contrary clearly indicates that the
damage done was due to the mere fact of carriage on deck, no
other fault or delinquency on the part of anybody being alleged.
EASTERN
SHIPPING
LINES,
INC.,
petitioner,
vs.
INTERMEDIATE APPELLATE COURT and DEVELOPMENT
INSURANCE & SURETY CORPORATION, respondents.
[G.R. No. 71478. May 29, 1987.]
EASTERN SHIPPING LINES, INC., petitioner, vs. THE NISSHIN
FIRE AND MARINE INSURANCE CO., and DOWA FIRE &
MARINE INSURANCE CO., LTD., respondents.
DECISION
MELENCIO-HERRERA, J p:
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 for Kobe, Japan, to Manila, the vessel caught fire and sank,
resulting in the total loss of ship and cargo. The respective
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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 nonobservance 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.
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respondent Insurers paid the corresponding marine insurance

values to the consignees concerned and were thus subrogated unto
the rights of the latter as the insured.
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 $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 lowernumbered 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. . . ." 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
Intelligentia et
Scientia Semper Mea
Transportation Law
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;
xxx
xxx
xxx" 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
29
Page
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?
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
have 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
Intelligentia et
Scientia Semper Mea
Transportation Law
"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.
xxx
xxx
xxx "
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 not exceed
US$500 per package as provided in section 4(5) of the COGSA,
which reads:
30
Page
to the consignees for said lack of diligence required of it under

Article l733 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:
"(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 be liable for more than the amount of damage actually
sustained."
xxx
xxx
xxx
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
Intelligentia et
Scientia Semper Mea
Transportation Law
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."
31
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.
We find no reversible error. The 128 cartons and not the two (2)
containers should be considered as the shipping unit.
Page
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."
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).
". . . 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 foreseeable by the COGSA
promulgators, do not warrant a distortion or artificial construction
Intelligentia et
Scientia Semper Mea
Transportation Law
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.
"xxx
xxx
xxx"
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
Limitations 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)
32
Page
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.
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 adheres to it, like the Bill of Lading in this case, which is
drawn up by the carrier. 21
Intelligentia et
Scientia Semper Mea
Transportation Law
On Alleged Denial of Opportunity to Present Deposition of Its
Witnesses: (in G.R. No. 69044 only)
33
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:
Page
"xxx
xxx
xxx
"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.
xxx
xxx
xxx" 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.
Separate Opinions
YAP, J., concurring and dissenting:
With respect to G.R. No. 71478, the majority opinion holds that the
128 cartons of textile materials, and not the two (2) containers,
should be considered as the shipping unit for the purpose of
applying the $500.00 limitation under the Carriage of Goods by Sea
Act (COGSA).
The majority opinion followed and applied the interpretation of the
COGSA "package" limitation adopted by the Second Circuit, United
States Court of Appeals, in Mitsui & Co., Ltd. vs. American Export
Lines, Inc., 636 F. 2d 807 (1981) and the Smithgreyhound v. M/V
Eurygenes, 666, F 2d, 746. Both cases adopted the rule that carrierfurnished containers whose contents are fully disclosed are not
"packages" within the meaning of Section 4 (5) of COGSA. prLL
I cannot go along with the majority in applying the Mitsui and
Eurygenes decisions to the present case, for the following reasons:
(1) The facts in those cases differ materially from those obtaining in
the present case; and (2) the rule laid down in those two cases is
by no means settled doctrine.
Intelligentia et
Scientia Semper Mea
Transportation Law
34
Page
In Mitsui and Eurygenes, the containers were supplied by the

carrier or shipping company. In Mitsui, the Court held: "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." Cartons or
crates placed inside carrier-furnished containers are deemed
stowed in the vessel itself, and do not lose their character as
individual units simply by being placed inside container provided by
the carrier, which are merely "detachable stowage compartments
of the ship."
In the case at bar, there is no evidence showing that the two
containers in question were carrier-supplied. This fact cannot be
presumed. The facts of the case in fact show that this was the only
shipment placed in containers. The other shipment involved in the
case, consisting of surveying instruments, was packed in two
"cases."
We cannot speculate on the meaning of the words "Say: Two (2)
Containers Only," which appear in the bill of lading. Absent any
positive evidence on this point, we cannot say that those words
constitute a mere estimate that the shipment could fit in two
containers, thereby showing that when the goods were delivered by
the shipper, they were not yet placed inside the containers and that
it was the petitioner carrier which packed the goods into its own
containers, as authorized under paragraph 11 on the dorsal side of
the bill of lading, Exhibit A. Such assumption cannot be made in
view of the following words clearly stamped in red ink on the face
of the bill of lading: "Shipper's Load, Count and Seal Said to
Contain." This clearly indicates that it was the shipper which loaded
and counted the goods placed inside the container and sealed the
latter.
The two containers were delivered by the shipper to the carrier
already sealed for shipment, and the number of cartons said to be
contained inside them was indicated in the bill of lading, on the
mere say-so of the shipper. The freight paid to the carrier on the
shipment was based on the measurement (by volume) of the two
containers at $34.50 per cubic meter. The shipper must have saved
on the freight charges by using containers for the shipment. Under
the circumstances, it would be unfair to the carrier to have the
limitation of its liability under COGSA fixed on the number of
cartons inside the containers, rather than on the containers
themselves, since the freight revenue was based on the latter.
The Mitsui and Eurygenes decisions are not the last word on the
subject. The interpretation of the COGSA package limitation is in a
state of flux, 1 as the courts continue to wrestle with the
troublesome problem of applying the statutory limitation under
COGSA to containerized shipments. The law was adopted before
modern technological changes have revolutionized the shipping
industry. There is need for the law itself to be updated to meet the
changes brought about by the container revolution, but this is a
task which should be addressed by the legislative body. Until then,
this Court, while mindful of American jurisprudence on the subject,
should make its own interpretation of the COGSA provisions,
consistent with what is equitable to the parties concerned. There is
need to balance the interests of the shipper and those of the
carrier.
In the case at bar, the shipper opted to ship the goods in two
containers, and paid freight charges based on the freight unit, i.e.,
cubic meters. The shipper did not declare the value of the
shipment, for that would have entailed higher freight charges;
instead of paying higher freight charges, the shipper protected
itself by insuring the shipment. As subrogee, the insurance
company can recover from the carrier only what the shipper itself is
entitled to recover, not the amount it actually paid the shipper
under the insurance policy.
In our view, under the circumstances, the container should be
regarded as the shipping unit or "package" within the purview of
COGSA. However, we realize that this may not be equitable as far
as the shipper is concerned. If the container is not regarded as a
"package" within the terms of COGSA, then, the $500.00 liability
limitation should be based on "the customary freight unit." Sec. 4
(5) of COGSA provides that in case of goods not shipped in
packages, the limit of the carrier's liability shall be $500.00 "per
customary freight unit." In the case at bar, the petitioner's liability
for the shipment in question based on "freight unit" would be
$21,950.00 for the shipment of 43.9 cubic meters.
Intelligentia et
Scientia Semper Mea
Transportation Law
Footnotes
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.
9.
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.
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 repeated
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
35
Sarmiento, J ., concur.
Page
I concur with the rest of the decision.
handling, and is usually provided by the carrier. (Simon, The Law of
Shipping Containers)" (Emphasis ours).
20.
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).
YAP, J., concurring and dissenting:
1.
See R.M. Sharpe, Jr. and Mark E. Steiner, "The Container as
'Customary Freight Unit', Round Two of the Container Debate?",
South Texas Law Journal Vol. 24, No. 2 (1983).
(b)
Act of public enemy Art. 1734(3),

1739

ARTICLE 1739. In order that the common carrier may be exempted
from responsibility, the natural disaster must have been the
proximate and only cause of the loss. However, the common carrier
must exercise due diligence to prevent or minimize loss before,
during and after the occurrence of flood, storm or other natural
disaster in order that the common carrier may be exempted from
liability for the loss, destruction, or deterioration of the goods. The
same duty is incumbent upon the common carrier in case of an act
of the public enemy referred to in article 1734, No. 2.
(c)
Act or omission of shipper Art.

1734(3), 1741
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After the periods mentioned have elapsed, or the transportation
charges have been paid, no claim shall be admitted against the
carrier with regard to the condition in which the goods transported
were delivered.
ARTICLE 1741. If the shipper or owner merely contributed to the

loss, destruction or deterioration of the goods, the proximate cause
thereof being the negligence of the common carrier, the latter shall
be liable in damages, which however, shall be equitably reduced.
(d)
Character of goods, etc.

Arts. 1734(4), 1742
Art. 366, Code of Commerce

(4) The character of the goods or defects in the packing or in the
containers;
ARTICLE 1742. Even if the loss, destruction, or deterioration of the
goods should be caused by the character of the goods, or the faulty
nature of the packing or of the containers, the common carrier
must exercise due diligence to forestall or lessen the loss.
ARTICLE 366. Within the twenty-four hours following the receipt of
the merchandise, the claim against the carrier for damage or
average be found therein upon opening the packages, may be
made, provided that the indications of the damage or average
which gives rise to the claim cannot be ascertained from the
outside part of such packages, in which case the claim shall be
admitted only at the time of receipt.
Government v. Ynchausti, 40 Phil 219

FIRST DIVISION
[G.R. No. 14191. September 29, 1919.]
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, plaintiffappellant, vs. YNCHAUSTI & COMPANY, defendant-appellee.
Attorney-General Paredes for the appellant.
Charles C. Cohn for the appellee.
SYLLABUS
1.
SHIPPERS AND SHIPPING; COMMON CARRIERS, LIABILITY OF;
BILL OF LADING; NEGLIGENCE, PRESUMPTION OF; WHO MUST
PROVE NEGLIGENCE WHEN MERCHANDISE IS DAMAGED. A bill of
lading is a contract and the parties thereto are bound by its terms.
Merchandise is transported at the risk and venture of the shipper, if
the contrary does not appear in the bill of lading.
2.
ID.; ID.; ID.; ID. All damages and impairment suffered by
merchandise in transportation by reason of accident, force majeure,
or by virtue of the nature or defect of the articles, shall be at the
risk and account of the shipper.
3.
ID.; ID., ID.; ID. The burden of proof that damages were
caused by the negligence of the carrier is upon the shipper. In this
jurisdiction there is no presumption of negligence on the part of the
common carrier in cases like the present
DECISION
JOHNSON, J p:
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The purpose of this action was to recover the sum of P200 as

damages to certain cargo of roofing tiles shipped by the plaintiff
from Manila to Iloilo on a vessel belonging to the defendant. The
tiles were delivered by the defendant to the consignee of the
plaintiff at Iloilo. Upon delivery it was found that some of the tiles
had been damaged; that the damage amounted to about P200.
Upon a submission of that question to the lower court a judgment
was rendered against the plaintiff in favor of the defendant,
absolving the latter from all liability under the complaint.
There seems to be no dispute about the facts, except whether or
not the tiles were broken by the negligence of the defendant. The
defendant denied that the tiles were broken by reason of its
negligence. The defendant proved, and the plaintiff did not attempt
to dispute, that the roofing tiles in question were of a brittle and
fragile nature; that they were delivered by the plaintiff to the
defendant in bundles of ten each, tied with bejuco [rattan], without
any packing or protective covering. The plaintiff did not even
attempt to prove any negligence on the part of the defendant. On
the other hand, the defendant offered proof to show that there was
no negligence on its part, by showing that the tiles were loaded,
stowed, and discharged by handlabor, and not by mechanical
devices which might have caused the breakage in question.
It appears from the record that the tiles in question were received
by the defendant from the plaintiff, as represented on a
Government bill of lading known as "General Form No. 9-A," which
was made out and submitted by a representative of the Bureau of
Supply to the defendant. ( Exhibit A. ) At the head of Exhibit A is
found the following:
"You are hereby authorized to receive, carry, and deliver the
following described merchandise to treasurer of Iloilo at Iloilo in
accordance with the authorized and prescribed rates and
classifications, and according to the laws of common carriers in
force on the date hereof, settlement and payment of charges to be
made by Bureau of Supply. (Sgd.) T. R. SCHOON, Chief Division of
Supplies, Bureau of Supply."
On the said bill of lading we find the following, which was stamped
thereon by the defendant:
"The goods have been accepted for transportation subject to the
conditions prescribed by the Insular Collector of Customs in
Philippine Marine Regulations, page 16, under the heading 'Bill of
Lading Conditions.' "
The lower court, in discussing the said bill of lading with the two
conditions found thereon, reached the conclusion that the plaintiff
was bound by the terms of the bill of lading as issued by the
defendant and not by the terms which the plaintiff attempted to
impose, that is to say, that such merchandise was to be carried
at owner's risk only; that there was no presumption of negligence
on the part of the defendant from the fact that the tiles were
broken when received by the consignee; and that since the plaintiff
I did not prove negligence on the part of the defendant, the former
was not entitled to recover damages from the latter. The lower
court rendered judgment absolving the defendant from all liability
under the complaint.
The important questions presented by the appeal are: (a) Were the
terms and conditions stamped by the defendant upon the
Government's bill of lading binding upon the plaintiff? (b) Was there
a presumption of negligence on the part of the defendant?
The record shows that ever since the Government began to use the
bill of lading, General Form No. 9-A, the shipowners had always
used the "stamp" in question; that in the present case the
defendant placed said stamp upon the bill of lading before the
plaintiff shipped the tiles in question; that having shipped the
goods under the said bill of lading, with the terms and conditions of
the carriage stamped thereon, the appellant must be deemed to
have assented to the said terms and conditions thereon stamped.
The appellant contends also that it was not bound by the terms and
conditions inserted by the appellee, because (a) the reference
made by the appellee to the "Philippine Marine Regulations"
prescribed by the Collector of Customs was vague; that the
appellee should have expressed the conditions fully and clearly on
the face of the bill of lading; and (b) that the Insular Collector of
Customs had no authority to issue such regulations.
As to the first contention, it seems that the appellant fully knew the
import and significance of the reference made in said regulations.
The appellant attempted to show that prior to the transaction in
question the Government notified the defendant and other
shipowners that it would not be bound by the "stamp" that was
placed by the shipowners on the Government's bill of lading.
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38
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With reference to the contention of the appellant that the Collector

of Customs had no authority to make such regulations, it may be
said in the present ease that the binding effect of the conditions
stamped on the bill of lading did not proceed from the authority of
the Collector of Customs but from the actual contract which the
parties made in the present case. Each bill of lading is a contract
and the parties thereto are bound by its terms.
Finding as we do that the tiles in question were shipped at the
owner's risk, under the law in this jurisdiction, the carrier is only
liable where the evidence shows that he was guilty of some
negligence and that the damages claimed were the result of such
negligence. As was said above, the plaintiff offered no proof
whatever to show negligence on the part of the defendant.
The plaintiff cites some American authorities to support its
contention that the carrier is an absolute insurer of merchandise
shipped and that the proof of breakage or damage to goods
shipped in the hands of the carrier makes out a prime facie case of
negligence against him, and that the burden of proof is thrown on
him to show due care and diligence.
The law upon that question in this jurisdiction is found in articles
361 and 362 of the Commercial Code. Article 361 provides:
"ART. 361.
Merchandise shall be transported at the risk and
venture of the shipper, if the contrary be not expressly stipulated.
"Therefore, all damages and impairment, suffered by the goods in
transportation by reason of accident, force majeure, or by virtue of
the nature or defect of the articles, shall be for the account and risk
of the shipper.
"The proof of these accidents is incumbent upon the carrier."
Article 362 provides:
"ART. 362.
The carrier, however, shall be liable for the losses
and damages arising from the causes mentioned in the foregoing
article, if it be proved against him that they occurred on account of
his negligence or because he did not take the precautions usually
adopted by careful persons, unless the shipper committed fraud in
the bill of lading stating that the goods were of a class or quality
different from what they really were. . . ."
Under the provisions of article 361 the defendant, in order to free
itself from liability, was only obliged to prove that the damages
suffered by the goods were "by virtue of the nature or defect of the
articles." Under the provisions of article 362 the plaintiff, in order to
hold the defendant liable, was obliged to prove that the damages to
the goods by virtue of their nature, occurred on account of its
negligence or because the defendant did not take the precaution
usually adopted by careful persons.
The defendant herein proved, and the plaintiff did not attempt to
dispute, that the tiles in question were of a brittle and fragile nature
and that they were delivered by the plaintiff to the defendant
without any packing or protective covering. The defendant also
offered proof to show that there was no negligence on its part, by
showing that the tiles were loaded, stowed, and discharged in a
careful and diligent manner.
In this jurisdiction there is no presumption of negligence on the part
of the carriers in case like the present. The plaintiff, not having
proved negligence on the part of the defendant, is not entitled to
recover damages.
For the foregoing reasons, the judgment of the lower court is
hereby affirmed, with costs. So ordered.
Arellano, C. J., Araullo, Street, Malcolm and Avancea, JJ., concur.
Southern Lines v. CA, 4 SCRA 256
EN BANC
[G.R. No. L-16629. January 31, 1962.]
SOUTHERN LINES, INC., petitioner, vs. COURT OF APPEALS
and CITY OF ILOILO, respondents.
Jose Ma. Lopez Vito, Jr. for petitioner.
City Fiscal for respondent.
SYLLABUS
1.
COMMON CARRIERS; LIABILITY FOR DAMAGES TO GOODS;
ARTICLES 361 AND 362 OF THE CODE OF COMMERCE. Under
Article 361 of the Code of Commerce, the defendant-carrier, in
order to free itself from liability, was only obliged to prove that the
damages suffered by the goods were "by virtue of the nature or
defect of the articles." Under the provisions of Article 362, the
plaintiff, in order to hold the defendant liable, was obliged to prove
that the damages to the goods by virtue of their nature, occurred
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DECISION
DE LEON, J p:
This is a petition to review on certiorari the decision of the Court of
Appeals in CA-G. R. No. 15579-R affirming that of the Court of First
Instance of Iloilo which sentenced petitioner Southern Lines, Inc. to
pay respondent City of Iloilo the amount of P4,931.41.
Sometime in 1948, the City of Iloilo requisitioned for rice from the
National Rice and Corn Corporation (hereinafter referred to as
NARIC) in Manila. On August 24 of the same year, NARIC, pursuant
to the order, shipped 1,726 sacks of rice consigned to the City of
Iloilo on board the SS "General Wright" belonging to the Southern
Lines, Inc. Each sack of rice weighed 75 kilos and the entire
shipment as indicated in the bill of lading had a total weight of
129,450 kilos. According to the bill of lading, the cost of the
shipment was P63,115.50, itemized and computed as follows:
Unit price per bag P36.25
P62,567.50
Handling at P0.13 per bag 224.38
Trucking at P2.50 per bag
323.62
Total P63,115.50
On September 3, 1948, the City of Iloilo received the shipment and
paid the amount of P63,115.50. However, it was noted at the foot
of the bill of lading that the City of Iloilo "Received the above
mentioned merchandise apparently in same condition as when
shipped, save as noted below: actually received 1685 sacks with a
gross weight of 116,131 kilos upon actual weighing. Total shortage
ascertained 13,319 kilos." The shortage was equivalent to 41 sacks
39
Page
on account of its negligence or because the defendant did not take

the precaution adopted by careful persons. (Government vs.
Ynchausti & Co., 40 Phil., 219, 223).
2.
ID.; ID.; CARRIER NOT RELIEVED FROM LIABILITY IF
IMPROPER PACKING OF GOODS WAS APPARENT. If the fact of
improper packing is known to the carrier or his servants, or
apparent upon ordinary observation, but it accepts the goods
notwithstanding such condition, it is not relieved of liability for loss
or injury resulting therefrom. (9 am. Jur., 869).
of rice with a net weight of 13,319 kilos, the proportionate value of
which was P6,486.35.
On February 14, 1951, the City of Iloilo filed a complaint in the
Court of First Instance of Iloilo against NARIC and the Southern
Lines, Inc. for the recovery of the amount of P6,486.35 representing
the value of the shortage of the shipment of rice. After trial, the
lower court absolved NARIC from the complaint, but sentenced the
Southern Lines, Inc. to pay the amount of P4,931.41 which is the
difference between the sum of P6,486.35 and P1,554.94
representing the latter's counterclaim for handling and freight.
The Southern Lines, Inc. appealed to the Court of Appeals which
affirmed the judgment of the trial court. Hence, this petition for
review.
The only question to be determined in this petition is whether or
not the defendant-carrier, the herein petitioner, is liable for the loss
or shortage of the rice shipped.
Article 361 of the Code of Commerce provides:
"ART. 361. The merchandise shall be transported at the risk and
venture of the shipper, if the contrary has not been expressly
stipulated.
As a consequence, all the losses and deteriorations which the
goods may suffer during the transportation by reason of fortuitous
event, force majeure, or the inherent nature and defect of the
goods, shall be for the account and risk of the shipper.
Proof of these accidents is incumbent upon the carrier."
Article 362 of the same Code provides:
"ART. 362. Nevertheless, the carrier shall be liable for the losses
and damages resulting from the causes mentioned in the preceding
article if it is proved, as against him, that they arose through his
negligence or by reason of his having failed to take the precautions
which usage has established among careful persons, unless the
shipper has committed fraud in the bill of lading, representing the
goods to be of a kind or quality different from what they really
were.
If, notwithstanding the precautions referred to in this article, the
goods transported run the risk of being lost, on account of their
nature or by reason of unavoidable accident, there being no time
for their owners to dispose of them, the carrier may proceed to sell
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them, placing them for this purpose at the disposal of the judicial
authority or of the officials designated by special provisions."
40
Under the provisions of Article 361, the defendant - carrier in order

to free itself from liability, was only obliged to prove that the
damages suffered by the goods were "by virtue of the nature or
defect of the articles." Under the provisions of Article 362, the
plaintiff, in order to hold the defendant liable, was obliged to prove
that the damages to the goods by virtue of their nature, occurred
on account of its negligence or because the defendant did not take
the precaution adopted by careful persons. (Government vs.
Ynchausti & Co., 40 Phil., 219, 223).
Petitioner claims exemption from liability by contending that the
shortage in the shipment of rice was due to such factors as the
shrinkage, leakage or spillage of the rice on account of the bad
condition of the sacks at the time it received the same and the
negligence of the agents of respondent City of Iloilo in receiving the
shipment. The contention is untenable, for, if the fact of improper
packing is known to the carrier or his servants, or apparent upon
ordinary observation, but it accepts the goods notwithstanding
such condition, it is not relieved of liability for loss or injury
resulting therefrom. (9 Am. Jur., 869.) Furthermore, according to the
Court of Appeals, "appellant (petitioner) itself frankly admitted that
the strings that tied the bags of rice were broken; some bags were
with holes and plenty of rice were spilled inside the hull of the boat,
and that the personnel of the boat collected no less than 26 sacks
of rice which they had distributed among themselves." This finding,
which is binding upon this Court, shows that the shortage resulted
from the negligence of petitioner.
Page
Invoking the provisions of Article 366 of the Code of Commerce and

those of the bill of lading, petitioner further contends that
respondent is precluded from filing an action for damages on
account of its failure to present a claim within 24 hours from receipt
of the shipment. It also cites the cases of Government vs. Ynchausti
& Co., 24 Phil., 315 and Triton Insurance Co. vs. Jose, 33 Phil., 194,
ruling to the effect that the requirement that the claim for damages
must be made within 24 hours from delivery is a condition
precedent to the accrual of the right of action to recover damages.
These two cases above-cited are not applicable to the case at bar.
In the first cited case, the plaintiff never presented any claim at all
before filing the action. In the second case, there was payment of
the transportation charges which precludes the presentation of any
claim against the carrier. (See Article 366, Code of Commerce.) It is
significant to note that in the American case of Hoye vs.
Pennsylvania Railroad Co., 13 Ann. Case. 414, it has been said:
". . . 'It has been held that a stipulation in the contract of shipment
requiring the owner of the goods to present a notice of his claim to
the carrier within a specified time after the goods have arrived at
their destination is in the nature of a condition precedent to the
owner's right to enforce a recovery, and that he must show in the
first instance that he has complied with the condition, or that the
circumstances were such that to have complied with it would have
required him to do an unreasonable thing. The weight of authority,
however, sustains the view that each a stipulation is more in the
nature of a limitation upon the owner's right to recovery, and that
the burden of proof is accordingly on the carrier to show that the
limitations was reasonable and in proper form or within the time
stated.' (Hutchinson on Carrier, 3rd ed., par. 447)." Emphasis
Supplied.
In the case at bar, the record shows that petitioner failed to plead
this defense in its answer to respondent's complaint and, therefore,
the same is deemed waived (Section 10, Rule 9, Rules of Court) and
cannot be raised for the first time at the trial or on appeal.
(Maxilom vs. Tabotabo, 9 Phil., 390.) Moreover, as the Court of
Appeals has said:
". . . the records reveal that the appellee (respondent) filed the
present action, within a reasonable time after the short delivery in
the shipment of the rice was made. It should be recalled that the
present action is one for the refund of the amount paid in excess,
and not for damages or the recovery of the shortage; for admittedly
the appellee (respondent) had paid the entire value of the 1726
sacks of rice, subject to subsequent adjustment, as to shortages or
losses. The bill of lading does not at all limit the time for filing an
action for the refund of money paid in excess."
WHEREFORE, the decision of the Court of Appeals is hereby
affirmed in all respects and the petition for certiorari denied.
With costs against the petitioner.
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(e)
Order of competent authority

Arts. 1734(5), 1743
ARTICLE 1734.
Common carriers are responsible for the loss,
(5)
Order or act of competent public authority.
ARTICLE 1743.
If through the order of public authority the
goods are seized or destroyed, the common carrier is not
responsible, provided said public authority had power to issue the
order.
Ganzon v. Court of Appeals, 161 SCRA
646
SECOND DIVISION
[G.R. No. L-48757. May 30, 1988.]
MAURO GANZON, petitioner, vs. COURT OF APPEALS and
GELACIO E. TUMAMBING, respondents.
Antonio B. Abinoja for petitioner.
Quijano, Arroyo & Padilla Law Office for respondents.
DECISION
SARMIENTO, J p:
The private respondent instituted in the Court of First Instance of
Manila 1 an action against the petitioner for damages based on
culpa contractual. The antecedent facts, as found by respondent
Court, 2 are undisputed:
On November 28, 1956, Gelacio Tumambing contracted the
services of Mauro B. Ganzon to haul 305 tons of scrap iron from
Mariveles, Bataan, to the port of Manila on board the lighter LCT
41
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Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L. Barrera

and Dizon, JJ., concur.
Bengzon, C.J., Bautista Angelo and Paredes, JJ., did not take part.
"Batman" (Exhibit 1, Stipulation of Facts, Amended Record on
Appeal, p. 38). Pursuant to this agreement, Mauro B. Ganzon sent
his lighter "Batman" to Mariveles where it docked in three feet of
water (t.s.n., September 28, 1972, p. 31). On December 1, 1956,
Gelacio Tumambing delivered the scrap iron to defendant Filomeno
Niza, captain of the lighter, for loading which was actually begun on
the same date by the crew of the lighter under the captain's
supervision. When about half of the scrap iron was already loaded
(t.s.n., December 14, 1972, p. 20), Mayor Jose Advincula of
Mariveles, Bataan, arrived and demanded P5,000.00 from Gelacio
Tumambing. The latter resisted the shakedown and after a heated
argument between them, Mayor Jose Advincula drew his gun and
fired at Gelacio Tumambing (t.s.n., March 19, 1971, p. 9; September
28, 1972, pp. 6-7). The gunshot was not fatal but Tumambing had
to be taken to a hospital in Balanga, Bataan, for treatment (t.s.n.,
March 19, 1971, p. 13; September 28, 1972, p. 15).
After sometime, the loading of the scrap iron was resumed. But on
December 4, 1956, Acting Mayor Basilio Rub, accompanied by three
policemen, ordered captain Filomeno Niza and his crew to dump the
scrap iron (t.s.n., June 16, 1972, pp. 8-9) where the lighter was
docked (t.s.n., September 28, 1972, p. 31). The rest was brought to
the compound of NASSCO (Record on Appeal, pp. 20-22). Later on
Acting Mayor Rub issued a receipt stating that the Municipality of
Mariveles had taken custody of the scrap iron (Stipulation of Facts,
Record on Appeal, p. 40; t.s.n., September 28, 1972, p. 10.)
On the basis of the above findings, the respondent Court rendered
a decision, the dispositive portion of which states: cdphil
WHEREFORE, the decision appealed from is hereby reversed and
set aside and a new one entered ordering defendant-appellee
Mauro Ganzon to pay plaintiff-appellant Gelacio E. Tumambing the
sum of P5,895.00 as actual damages, the sum of P5,000.00 as
exemplary damages, and the amount of P2,000.00 as attorney's
fees. Costs against defendant-appellee Ganzon. 3
In this petition for review on certiorari, the alleged errors in the
decision of the Court of Appeals are:
I
THE COURT OF APPEALS FINDING THE HEREIN PETITIONER GUILTY
OF BREACH OF THE CONTRACT OF TRANSPORTATION AND IN
IMPOSING A LIABILITY AGAINST HIM COMMENCING FROM THE TIME
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THE SCRAP WAS PLACED IN HIS CUSTODY AND CONTROL HAVE NO

BASIS IN FACT AND IN LAW.
II
THE APPELLATE COURT ERRED IN CONDEMNING THE PETITIONER
FOR THE ACTS OF HIS EMPLOYEES IN DUMPING THE SCRAP INTO
THE SEA DESPITE THAT IT WAS ORDERED BY THE LOCAL
GOVERNMENT OFFICIAL WITHOUT HIS PARTICIPATION.
III
THE APPELLATE COURT FAILED TO CONSIDER THAT THE LOSS OF
THE SCRAP WAS DUE TO A FORTUITOUS EVENT AND THE
PETITIONER IS THEREFORE NOT LIABLE FOR ANY LOSSES AS A
CONSEQUENCE THEREOF. 4
The petitioner, in his first assignment of error, insists that the scrap
iron had not been unconditionally placed under his custody and
control to make him liable. However, he completely agrees with the
respondent Court's finding that on December 1, 1956, the private
respondent delivered the scraps to Captain Filomeno Niza for
loading in the lighter "Batman." That the petitioner, thru his
employees, actually received the scraps is freely admitted.
Significantly, there is not the slightest allegation or showing of any
condition, qualification, or restriction accompanying the delivery by
the private respondent-shipper of the scraps, or the receipt of the
same by the petitioner. On the contrary, soon after the scraps were
delivered to, and received by the petitioner-common carrier,
loading was commenced.
By the said act of delivery, the scraps were unconditionally placed
in the possession and control of the common carrier, and upon their
receipt by the carrier for transportation, the contract of carriage
was deemed perfected. Consequently, the petitioner-carrier's
extraordinary responsibility for the loss, destruction, or
determination of the goods commenced. Pursuant to Art. 1736,
such extraordinary responsibility would cease only upon the
delivery, actual or constructive, by the carrier to the consignee, or
to the person who has a right to receive them. 5 The fact that part
of the shipment had not been loaded on board the lighter did not
impair the said contract of transportation as the goods remained in
the custody and control of the carrier, albeit still unloaded.
The petitioner has failed to show that the loss of the scraps was
due to any of the following causes enumerated in Article 1734 of
the Civil Code, namely:
(1)
Flood, storm, earthquake, lightning, or other natural disaster
or calamity;
(2)
Act of the public enemy in war, whether international or
civil;
(3)
Act or omission of the shipper or owner of the goods;
(4)
The character of the goods or defects in the packing or in
the containers;
(5)
Order or act of competent public authority.
Hence, the petitioner is presumed to have been at fault or to have
acted negligently. 6 By reason of this presumption, the court is not
even required to make an express finding of fault or negligence
before it could hold the petitioner answerable for the breach of the
contract of carriage. Still, the petitioner could have been exempted
from any liability had he been able to prove that he observed
extraordinary diligence in the vigilance over the goods in his
custody, according to all the circumstances of the case, or that the
loss was due to an unforeseen event or to force majeure. As it was,
there was hardly any attempt on the part of the petitioner to prove
that he exercised such extraordinary diligence. prcd
It is in the second and third assignments of error where the
petitioner maintains that he is exempt from any liability because
the loss of the scraps was due mainly to the intervention of the
municipal officials of Mariveles which constitutes a caso fortuito as
defined in Article 1174 of the Civil Code. 7
We cannot sustain the theory of caso fortuito. In the courts below,
the petitioner's defense was that the loss of the scraps was due to
an "order or act of competent public authority," and this contention
was correctly passed upon by the Court of Appeals which ruled
that:
. . . In the second place, before the appellee Ganzon could be
absolved from responsibility on the ground that he was ordered by
competent public authority to unload the scrap iron, it must be
shown that Acting Mayor Basilio Rub had the power to issue the
disputed order, or that it was lawful, or that it was issued under
legal process of authority. The appellee failed to establish this.
Indeed, no authority or power of the acting mayor to issue such an
order was given in evidence. Neither has it been shown that the
cargo of scrap iron belonged to the Municipality of Mariveles. What
we have in the record is the stipulation of the parties that the cargo
of scrap iron was accumulated by the appellant through separate
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purchases here and there from private individuals (Record on

Appeal, pp. 38-39). The fact remains that the order given by the
acting mayor to dump the scrap iron into the sea was part of the
pressure applied by Mayor Jose Advincula to shakedown the
appellant for P5,000.00. The order of the acting mayor did not
constitute valid authority for appellee Mauro Ganzon and his
representatives to carry out.
Now the petitioner is changing his theory to caso fortuito. Such a
change of theory on appeal we cannot, however, allow. In any case,
the intervention of the municipal officials was not of a character
that would render impossible the fulfillment by the carrier of its
obligation. 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 petitioner's employees. The mere
difficulty in the fulfillment of the obligation is not considered force
majeure. We agree 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. llcd
There is no incompatibility between the Civil Code provisions on
common carriers and Articles 361 8 and 362 9 of the Code of
Commerce which were the basis for this Court's ruling in
Government of the Philippine Islands vs. Ynchausti & Co. 10 and
which the petitioner invokes in this petition. For Art. 1735 of the
Civil Code, conversely stated, means that the shipper will suffer the
losses and deterioration arising from the causes enumerated in Art.
1734; and in these instances, the burden of proving that damages
were caused by the fault or negligence of the carrier rests upon
him. However, the carrier must first establish that the loss or
deterioration was occasioned by one of the excepted causes or was
due to an unforeseen event or to force majeure. Be that as it may,
insofar as Art. 362 appears to require of the carrier only ordinary
diligence, the same is deemed to have been modified by Art. 1733
of the Civil Code.
Finding the award of actual and exemplary damages to be proper,
the same will not be disturbed by us. Besides, these were not
sufficiently controverted by the petitioner.
WHEREFORE, the petition is DENIED; the assailed decision of the
Court of Appeals is hereby AFFIRMED. Costs against the petitioner.
This decision is IMMEDIATELY EXECUTORY.
Yap, C.J., Paras and Padilla, JJ., concur.
Separate Opinion
MELENCIO-HERRERA, J ., dissenting:
I am constrained to dissent.
It is my view that petitioner can not be held liable in damages for
the loss and destruction of the scrap iron. The loss of said cargo
was due to an excepted cause - an "order or act of competent
public authority" (Article 1734[5], Civil Code). prcd
The loading of the scrap iron on the lighter had to be suspended
because of Municipal Mayor Jose Advincula's intervention, who was
a "competent public authority." Petitioner had no control over the
situation as, in fact, Tumambing himself, the owner of the cargo,
was impotent to stop the "act" of said official and even suffered a
gunshot wound on the occasion.
When loading was resumed, this time it was Acting Mayor Basilio
Rub, accompanied by three policemen, who ordered the dumping of
the scrap iron into the sea right where the lighter was docked in
three feet of water. Again, could the captain of the lighter and his
crew have defied said order?
Through the "order" or "act" of "competent public authority,"
therefore, the performance of a contractual obligation was
rendered impossible. The scrap iron that was dumped into the sea
was "destroyed" while the rest of the cargo was "seized." The
seizure is evidenced by the receipt issued by Acting Mayor Rub
stating that the Municipality of Mariveles had taken custody of the
scrap iron. Apparently, therefore, the seizure and destruction of the
goods was done under legal process or authority so that petitioner
should be freed from responsibility.
"Art. 1743.
If through order of public authority the goods are
seized or destroyed, the common carrier is not responsible,
provided said public authority had power to issue the order."
Intelligentia et
Scientia Semper Mea
Transportation Law
44
1.
Presided by Judge Jesus P. Morfe.
2.
Pascual, Chairman, ponente; Agrava and Climaco,
concurring.
3.
Decision, 9; Rollo 19.
4.
Petitioner's Brief, 3, 7, 9; Rollo, 41.
5.
Article 1736, Civil Code of the Philippines:
Art. 1736.
The extraordinary responsibility of the
common carriers lasts from the time the goods are unconditionally
placed in the possession of, and received by the carrier for
transportation 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.
6.
Article 1735, supra.
Art. 1735.
In all cases other than those
mentioned in Nos. 1, 2, 3, 4, and 5 of the preceding article, if the
goods are lost, destroyed or deteriorated, common carriers are
presumed to have been at fault or to have acted negligently, unless
they prove that they observed extraordinary diligence as required
in Article 1733.
7.
Art. 1174, supra:
Art. 1174.
Except in cases expressly specified by
the law, or when it is otherwise declared by stipulation, or when the
nature of the obligation requires the assumption of risk, no person
shall be responsible for those events which could not be foreseen,
or which though foreseen, were inevitable.
Page
Footnotes
8.
Article 361, Code of Commerce:

Art. 361.
The merchandise shall be transported
at the risk and venture of the shipper, if the contrary has not been
expressly stipulated.
As a consequence, all the losses and deterioration
which the goods may suffer during the transportation by reason of
fortuitous event, force majeure, or the inherent nature and defect
of the goods, shall be for the account and risk of the shipper.
Proof of these accidents is incumbent upon the carrier.
9.
Article 362, Code of Commerce:
Art. 362.
Nevertheless, the carrier shall be liable
for the losses and damages resulting from the causes mentioned in
the preceding article if it is proved, as against him, that they arose
through his negligence or by reason of his having failed to take the
precautions which usage has established among careful persons,
unless the shipper has committed fraud in the bill of lading,
representing the goods to be of a kind or quality different from
what they really were.
If, notwithstanding the precautions referred to in this
article, the goods transported run the risk of being lost, on account
of their nature or by reason of unavoidable accident, there being no
time for their owners to dispose of them, the carrier may proceed
to sell them, placing them for this purpose at the disposal of the
judicial authority or of the officials designated by special provisions.
10.
No. 14191, September 29, 1919, 40 Phil. 219.
Intelligentia et
Scientia Semper Mea

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Transportation Law

A. Common Carriage of Goods

Art. 1735. In all cases other than those mentioned in Nos. 1, 2, 3,

Art. 1733. Common carriers, from the nature of their

Ynchausti Steamship Co. v. Dexter, 41 Phil

"Thereafter, notwithstanding the protest and demand of the

sum of P82.79. as shown by its transportation voucher presented in

admittedly due to the petitioner for the freight charges, a sum

management of said vessel." As a second separate and special

icebergs, foundering, stranding or the perils of the sea, that would

STREET, J., dissenting in part:

Exception from liability

(4) The character of the goods or defects in the packing or in the

Tan Chiong v. Ynchausti, 22 Phil 153

a contract of maritime transportation with him did not know and

The principal question to be determined is whether the defendant is

belonging to the Chinaman, Ong Bieng Sip, together with other

Vessels of considerable draft, larger than the said lorcha, might

defendant company, which goods were actually taken on board the

Moreover, it is to be noted that, subsequent to the wreck, the

day preceding the storm, the agents of the defendant did

Where perishable property, such as potatoes, is received by a

typhoon produced upon that property could have been avoided by

"In connection with this question, a judgment of November 22,

"The problem becomes more difficult when both causes concur to

"The condition of inevitability can not be understood in so absolute

I do not here argue the assertion of the plaintiff denied by the

To hold the carrier responsible in the case at bar, it is not necessary

Ordinarily the shipper is supposed to produce the mate's receipt to

goods to be carried on deck. The material facts bearing on this

"It is the prevailing practice that, whenever a cargo is being carried

With reference to the practicability of discharging the cargo in the

accident is preceded by a fault of the debtor or person bound

It will be observed that by the terms of paragraph 19 of the bills of

Exactly the same words might be used as applicable to the facts of

G.R. NO. 69044

respondent Insurers paid the corresponding marine insurance

On the Law Applicable

to the consignees for said lack of diligence required of it under

Certainly, if the individual crates or cartons prepared by the shipper

of the statutory term 'package.' A ruling that these large reusable

G.R. No. 69044, and P5,000.00 in favor of NISSHIN and DOWA in

In Mitsui and Eurygenes, the containers were supplied by the

I concur with the rest of the decision.

Act of public enemy Art. 1734(3),

ARTICLE 1734. Common carriers are responsible for the loss,

Act or omission of shipper Art.

(3) Act or omission of the shipper or owner of the goods;

ARTICLE 1734. Common carriers are responsible for the loss,

ARTICLE 1741. If the shipper or owner merely contributed to the

Character of goods, etc.

ARTICLE 1734. Common carriers are responsible for the loss,

Government v. Ynchausti, 40 Phil 219

The purpose of this action was to recover the sum of P200 as

With reference to the contention of the appellant that the Collector

on account of its negligence or because the defendant did not take

Under the provisions of Article 361, the defendant - carrier in order

Invoking the provisions of Article 366 of the Code of Commerce and

Order of competent authority

Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L. Barrera

THE SCRAP WAS PLACED IN HIS CUSTODY AND CONTROL HAVE NO

purchases here and there from private individuals (Record on