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Everett Steamship Corp. vs.

CA and Hernandez Trading

FACTS: HELD and RATIO:


Hernandez Trading (Hernandez) imported three crates of bus spare The Supreme Court ruled in favour of petitioner.
parts (labelled Marco 12, 13, 14) from its supplier, Maruman ARTICLE 1749 states that a stipulation limiting the carriers
Trading in Japan. The ships were transported to Manila on board liability to value of the goods in the bill of lading is valid,
ADELFAEVERETTE, a vessel owned by petitioners principal, UNLESS the shipper or owner declares a higher value.
Everett Orient Lines. A bill of lading was issued for the crates. ARTICLE 1750 states that a contract fixing the sum of what the
When the vessel arrived in Manila, it was discovered that Marco owner or shipper may recover for the loss of the goods is valid, if it
14 was missing. Petitioner admitted and confirmed the loss in a is just and reasonable under the circumstances and is freely and
letter. Hernandez made a claim of Y1,552,500, the amount shown fairly agreed upon.
in the invoice. Petitioner claims its liability was only limited to The limited-liability clause has constantly been sustained by the
Y100,000, which was the maximum limit on its liability as stated Court in numerous cases.1
in Clause 18 of the Bill of Lading. The bill of lading expressly provided that the liability of the carrier
Hernandez filed a collection suit against petitioner with the RTC of shall be limited to Y100,000 unless a higher amount is declared in
Caloocan. writing by the shipper in the bill of lading, and extra freight is paid.
The RTC ruled in favour of Hernandez, making petitioner liable o The above stipulation is reasonable and just. Maruman
for Y1,552,500 plus attorneys fees and cost of the suit. Trading had the option of declaring a higher value, yet it
RTC Ratio: Everett categorically admitted to its fault. It failed to failed to do so.
overcome the presumption of negligence. The limitation clause o Contracts of adhesion are not invalid per se. The other
was in fine print at the back of the bill of lading. party is free to accept or reject it in its entirety. Ignorance
o Under Article 1750 of the Civil Code, a contract fixing is not an excuse because the shipper, owner, or consignee
the sum that may be recovered by the owner/shipper for has the responsibility to fully comprehend the contract.2
the loss must be reasonable and just under the o Maruman trading, the shipper is extensively engaged in
circumstances, and must be freely agreed upon. the trading business, and is presumed to be aware of the
o The requisites have not been met by Everett. The letters terms and conditions of shipping transactions.
were so small that it could not have been presumed that Consignee is bound by the transaction, even if the shipping
Hernandez read and was aware of the conditions. contract was between shipper and carrier. The relationship between
CA affirmed the ruling of the RTC. It added that Hernandez was consignee and shipper is one of agency, or his status as some
not bound by the conditions of the bill of lading because it was not stranger in whose favour some stipulation is made in the contract.
a privy to the contract of carriage between Everett and Maruman He automatically becomes a party thereto the moment he enforces
Trading, the shipper named in the bill of lading. and demands the fulfilment of that stipulation. When Hernandez
o CA held that Hernandez was entitled to the full amount of
the value loss, based on Article 1735 of the Civil Code. 1 Sea Land Services vs. IAC. The just and reasonable character of such a clause is upheld. It
Everett never overcame the presumption of negligience. still gives the owner the option to disregard the clause by properly declaring the nature and
ISSUES: value of the shipment.
1. W/N the consent of the consignee to the bill of lading is necessary
to make the terms and conditions therein binding upon him;
2. W/N the limited liability under Clause 18 applies to this case. 2 PAGI vs. Sweet Lines and Ong Yiu vs. CA
formally claimed reimbursement for the missing goods based on contract and consequently became bound by it. It is thus estopped
the very same bill of lading, it accepted the provisions of the from rejecting the limitedliability clause in the bill of lading.

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