56 PLANTERS PRODUCTS, INC., vs. CA, SORIAMONT STEAMSHIP
The same results were contained in a Certificate of
AGENCIES AND KYOSEI KISEN KABUSHIKI KAISHA,
G.R. No. 101503 September 15, 1993
F: Planters Products, Inc. (PPI), purchased from MITSUBISHI of New York,
U.S.A., 9,329.7069 metric tons (M/T) of Urea 46% fertilizer which the latter
shipped in bulk on aboard the cargo vessel M/V "Sun Plum" owned by private
respondent Kyosei Kisen Kabushiki Kaisha (KKKK) from Alaska, U.S.A., to
Poro Point, San Fernando, La Union as evidenced by Bill of Lading.
Prior to its voyage, a time charter-party on the vessel M/V "Sun Plum"
pursuant to the Uniform General Charter was entered into between Mitsubishi
as shipper/charterer and KKKK as shipowner, in Tokyo, Japan.
After the Urea fertilizer was loaded in bulk by stevedores hired by and under
the supervision of the shipper, the steel hatches were closed with heavy iron
lids, covered with three (3) layers of tarpaulin, then tied with steel bonds. The
hatches remained closed and tightly sealed throughout the entire voyage.
Upon arrival of the vessel at the port, Petitioner unloaded the cargo from the
holds into its steelbodied dump trucks which were parked alongside the berth,
using metal scoops attached to the ship, pursuant to the terms and conditions
of the charter-partly (which provided for an F.I.O.S. clause). The hatches
remained open throughout the duration of the discharge.
Each time a dump truck was filled up, its load of Urea was covered with
tarpaulin before it was transported to the consignee's warehouse located some
fifty (50) meters from the wharf. Midway to the warehouse, the trucks were
made to pass through a weighing scale where they were individually weighed
for the purpose of ascertaining the net weight of the cargo. The port area was
windy, certain portions of the route to the warehouse were sandy and the
weather was variable, raining occasionally while the discharge was in
progress. 8 The petitioner's warehouse was made of corrugated galvanized iron
(GI) sheets, with an opening at the front where the dump trucks entered and
unloaded the fertilizer on the warehouse floor. Tarpaulins and GI sheets were
placed in-between and alongside the trucks to contain spillages of the ferilizer.The period during which private respondent was to observe the degree of
It took eleven (11) days for PPI to unload the cargo, A private marine and
cargo surveyor, Cargo Superintendents Company Inc. (CSCI), was hired by
PPI to determine the "outturn" of the cargo shipped, by taking draft readings of destination and its hull was reexamined by the consignee, but prior to
the vessel prior to and after discharge. The survey report submitted by CSCI
to the consignee (PPI) revealed a shortage in the cargo of 106.726 M/T and
that a portion of the Urea fertilizer approximating 18 M/T was contaminated
with dirt.
Shortage/Damaged Cargo dated 18 July 1974 prepared by PPI which showed
that the cargo delivered was indeed short of 94.839 M/T and about 23 M/T
were rendered unfit for commerce, having been polluted with sand, rust and
dirt.
Consequently, PPI sent a claim letter to SSA, the resident agent of the carrier,
KKKK, for P245,969.31 representing the cost of the alleged shortage in the
goods shipped and the diminution in value of that portion said to have been
contaminated with dirt.
The defendant carrier argued that the strict public policy governing common
carriers does not apply to them because they have become private carriers by
reason of the provisions of the charter-party.
TC: The court a quo however sustained the claim of the plaintiff against the
defendant. Common carrier is presumed negligent.
CA: reversed the lower court and absolved the carrier from liability. Cargo
vessel M/V "Sun Plum" owned by private respondent KKKK was a private
carrier and not a common carrier by reason of the time charterer-party.
ISSUE: WON Cargo vessel M/V "Sun Plum" owned by private respondent
KKKK liable?
R: No. Not Liable. Indeed, we agree with respondent carrier that bulk shipment
of highly soluble goods like fertilizer carries with it the risk of loss or damage.
More so, with a variable weather condition prevalent during its unloading, as
was the case at bar. This is a risk the shipper or the owner of the goods has to
face. Clearly, respondent carrier has sufficiently proved the inherent character
of the goods which makes it highly vulnerable to deterioration; as well as the
inadequacy of its packaging which further contributed to the loss. On the other
hand, no proof was adduced by the petitioner showing that the carrier was
remise in the exercise of due diligence in order to minimize the loss or damage
to the goods it carried.
diligence required of it as a public carrier began from the time the cargo was
unconditionally placed in its charge after the vessel's holds were duly inspected
and passed scrutiny by the shipper, up to and until the vessel reached its
unloading. This is clear from the limitation clause agreed upon by the parties in
the Addendum to the standard "GENCON" time charter-party which provided
for an F.I.O.S., meaning, that the loading, stowing, trimming and discharge of
the cargo was to be done by the charterer, free from all risk and expense to the
carrier. 35 Moreover, a shipowner is liable for damage to the cargo resulting
from improper stowage only when the stowing is done by stevedores employed
by him, and therefore under his control and supervision, not when the same is
done by the consignee or stevedores under the employ of the latter. 36
goods may suffer during the transportation by reason of fortuitous event, force
majeure, or the inherent defect of the goods, shall be for the account and risk
of the shipper, and that proof of these accidents is incumbent upon the
carrier. 37 The carrier, nonetheless, shall be liable for the loss and damage
resulting from the preceding causes 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. 38

Article 1733 of the New Civil Code mandates that common carriers, by reason WHEREFORE, the petition is DISMISSED. The assailed decision of the
of the nature of their business, should observe extraordinary diligence in the CA AFFIRMED. Respondent NOT LIABLE.
vigilance over the goods they carry. 25 In the case of private carriers, however,
the exercise of ordinary diligence in the carriage of goods will suffice. Important note:
Moreover, in the case of loss, destruction or deterioration of the goods,
common carriers are presumed to have been at fault or to have acted Respondent is a charter-party. Therefore it becomes private. Not common
negligently, and the burden of proving otherwise rests on them. 26 On the carrier.
contrary, no such presumption applies to private carriers, for whosoever
alleges damage to or deterioration of the goods carried has the onus of proving
that the cause was the negligence of the carrier. One of the main distinction between common carrier and private carrier is that
in common carrier, it should observe extraordinary diligence. On the other
hand, in private carrier, ordinary diligence is enough.
Verily, the presumption of negligence on the part of the respondent carrier has
been efficaciously overcome by the showing of extraordinary zeal and assiduity
Another main distinction is that in common carrier, the presumption of
exercised by the carrier in the care of the cargo. This was confirmed by
respondent appellate court thus negligence are presumed, they are presumed to have been acted negligently
and they have the burden to rebut negligence. However, in private carrier,
there is no such presumption, the person or party who allege negligence on the
. . . Be that as it may, contrary to the trial court's finding, the carrier has the burden of proving negligence.
record of the instant case discloses ample evidence showing
that defendant carrier was not negligent in performing its
obligations. Particularly, the following testimonies of plaintiff- Therefore, in this case, the petitioner failed to prove negligence on the part of
the carrier.
appellee's own witnesses clearly show absence of negligence
by the defendant carrier; that the hull of the vessel at the time
of the discharge of the cargo was sealed and nobody could
open the same except in the presence of the owner of the
cargo and the representatives of the vessel (TSN, 20 July
1977, p. 14); that the cover of the hatches was made of steel
and it was overlaid with tarpaulins, three layers of tarpaulins
and therefore their contents were protected from the weather
(TSN, 5 April 1978, p. 24); and, that to open these hatches,
the seals would have to be broken, all the seals were found to
be intact (TSN, 20 July 1977, pp. 15-16) (emphasis supplied).

Article 1734 of the New Civil Code provides that common carriers are not
responsible for the loss, destruction or deterioration of the goods if caused by
the charterer of the goods or defects in the packaging or in the containers. The
Code of Commerce also provides that all losses and deterioration which the
59 EDGAR COKALIONG SHIPPING LINES, INC., petitioner, vs. UCPB
GENERAL INSURANCE COMPANY, INC., respondent.
G.R. No. 146018. June 25, 2003
The liability of a common carrier for the loss of goods may, by stipulation in the
bill of lading, be limited to the value declared by the shipper. On the other
hand, the liability of the insurer is determined by the actual value covered by
the insurance policy and the insurance premiums paid therefor, and not
necessarily by the value declared in the bill of lading.
Facts:
- Sometime on December 11, 1991, Nestor Angelia delivered to the Petitioner
Edgar Cokaliong Shipping Lines, Inc. (now Cokaliong Shipping Lines), cargo
consisting of one (1) carton of Christmas dcor and two (2) sacks of plastic toys,
to be transported on board the M/V Tandag on its Voyage No. T-189
scheduled to depart from Cebu City, on December 12, 1991, for Tandag,
Surigao del Sur.
- Petitioner issued Bill of Lading No. 58, freight prepaid, covering the cargo.
Nestor Angelia was both the shipper and consignee of the cargo valued, on the
face thereof, in the amount of P6,500.00.
- Zosimo Mercado likewise delivered cargo to petitioner, consisting of two (2)
cartons of plastic toys and Christmas decor, one (1) roll of floor mat and one - In its Answer to the complaint, Cokaliong alleged that:
(1) bundle of various or assorted goods for transportation thereof from Cebu
City to Tandag, Surigao del Sur, on board the said vessel, and said voyage.
Petitioner issued Bill of Lading No. 59 covering the cargo which, on the face
thereof, was valued in the amount of P14,000.00. Under the Bill of Lading,
Zosimo Mercado was both the shipper and consignee of the cargo.
- On December 12, 1991, Feliciana Legaspi insured the cargo, covered by Bill
of Lading No. 59, with the Respondent UCPB General Insurance Co., Inc., for -
the amount of P100,000.00 against all risks under Open Policy No. 002/91/254 as stated in the Bill of Lading and, hence, [petitioner] cannot be held liable for
for which she was issued, by UCPB Marine Risk Note No. 18409 on said date. the loss of the cargo beyond the value thereof declared in the Bill of Lading.
She also insured the cargo covered by Bill of Lading No. 58, for the amount of
P50,000.00, under Open Policy No. 002/91/254 on the basis of which UCPB
issued Marine Risk Note No. 18410 on said date.
- When the vessel left port, it had thirty-four (34) passengers and assorted
cargo on board, including the goods of Legaspi. After the vessel had passed by
the Mandaue-Mactan Bridge, fire ensued in the engine room, and, despite
earnest efforts of the officers and crew of the vessel, the fire engulfed and
destroyed the entire vessel resulting in the loss of the vessel and the cargoes
therein. The Captain filed the required Marine Protest.
- Thereafter, Feliciana Legaspi filed a claim, with UCPB, for the value of the
cargo insured under Marine Risk Note No. 18409 and covered by Bill of Lading
No. 58 (60,388) and 59 (P110,056.00). She submitted, in support of her claim,
a Receipt and Order slips signed by Zosimo Mercado. UCPB approved both
claims of Feliciana Legaspi and drew and issued UCPB Check No. 612939,
dated March 9, 1992, in the net amount of PP49,500.00 and 99,000.00
respectively, in settlement of her claim after which she executed a Subrogation
Receipt/Deed, for said amount, in favor of UCPB.
- On July 14, 1992, as subrogee of Feliciana Legaspi, filed a complaint
anchored on torts against Cokaliong with the RTC for the collection of the total
principal amount of P148,500.00, which it paid to Feliciana Legaspi for the loss
of the cargo.
- UCPB alleged, inter alia, in its complaint, that the cargo subject of its
complaint was delivered to, and received by, Cokaliong for transportation to
Tandag, Surigao del Sur under Bill of Ladings 58 and 59; that the loss of the
cargo was due to the negligence of the petitioner; and that Feliciana Legaspi
had executed Subrogation Receipts/Deeds in favor of UCPB after paying to
her the value of the cargo on account of the Marine Risk Notes it issued in her
favor covering the cargo.
- (a) it was cleared by the Board of Marine Inquiry of any negligence in the
burning of the vessel;
- (b) the complaint stated no cause of action against [petitioner]; and
(c) the shippers/consignee had already been paid the value of the goods
- A few days after the sinking of the vessel, a representative of the Legaspi
Marketing filed claims for the values of the goods under Bills of Lading Nos. 58
and 59 in behalf of the shippers/consignees, Nestor Angelia and Zosimo
Mercado;
- Petitioner approved the claim of Legaspi Marketing for the value of the cargo
under both Bill of Ladings and remitted to Legaspi Marketing the amount of
P14,000.00 under Equitable Banking Corporation Check No. 20230486 dated
August 12, 1992, in the amount of P14,000.00 for Zozimo. Since Nestor
Angelia owed Chester Marketing, Inc., for some purchases, [petitioner] merely
set off the amount due to him under Bill of Lading No. 58 .
- Petitioner never knew, before settling with Legaspi Marketing and Nestor
Angelia that the cargo under both Bills of Lading were insured with UCPB or
that Feliciana Legaspi filed claims for the value of the cargo with UCPB and
that the latter approved the claims of Feliciana Legaspi and paid the total
amount of P148,500.00 to her; Petitioner came to know, of the payments by
[respondent] of the claims of Feliciana Legaspi when it was served with the
summons and complaint.
- on October 8, 1992; after settling his claim, Nestor Angelia executed the
Release and Quitclaim and Affidavit in favor of [respondent]; hence, [petitioner]
was absolved of any liability for the loss of the cargo covered by Bills of Lading
Nos. 58 and 59; and even if it was, its liability should not exceed the value of
the cargo as stated in the Bills of Lading
Ruling of the Court of Appeals
The CA decided against the petitioner and held that the payment to Legaspi
Marketing for the cargo covered by Bill of Lading No. 59 did not extinguish
petitioners obligation to respondent, because there was no evidence that
Feliciana Legaspi (the insured) was the owner/proprietor of Legaspi Marketing.
The CA also pointed out the impropriety of treating the claim under Bill of
Lading No. 58 -- covering cargo valued therein at P6,500 -- as a setoff against
Nestor Angelias account with Chester Enterprises, Inc.
Finally, it ruled that respondent is not bound by the valuation of the cargo
under the Bills of Lading, x x x nor is the value of the cargo under said Bills of
Lading conclusive on the [respondent]. This is so because, in the first place,
the goods were insured with the [respondent] for the total amount of
P150,000.00, which amount may be considered as the face value of the goods. allowed when more than one-half of the fruits have been lost due to such
Hence this Petition.
Issues
1. Whether or not the loss of goods was due to force majeure.
2. Whether or not the petitioners liability should be based on the actual insured
value of the goods and not from actual valuation declared by the
shipper/consignee in the bill of lading.
Held: The Petition is partly meritorious.
Ratio: First Issue:
Liability for Loss
The cause of the loss of the goods, subject of this case, was not force majeure.
- The uncontroverted findings of the Philippine Coast Guard show that the M/V
Tandag sank due to a fire, which resulted from a crack in the auxiliary engine
fuel oil service tank. Fuel spurted out of the crack and dripped to the heating
exhaust manifold, causing the ship to burst into flames. The crack was located
on the side of the fuel oil tank, which had a mere two-inch gap from the engine
room walling, thus precluding constant inspection and care by the crew. Having
originated from an unchecked crack in the fuel oil service tank, the fire could
not have been caused by force majeure. Broadly speaking, force majeure
generally applies to a natural accident, such as that caused by a lightning, an
earthquake, a tempest or a public enemy. Hence, fire is not considered a
natural disaster or calamity.
- In Eastern Shipping Lines, Inc. v. Intermediate Appellate Court, we explained:
- This must be so as it arises almost invariably from some act of man or by
human means. It does not fall within the category of an act of God unless
caused by lighting or by other natural disaster or calamity. It may even be
caused by the actual fault or privity of the carrier.
Article 1680 of the Civil Code, which considers fire as an extraordinary
fortuitous event refers to leases or rural lands where a reduction of the rent is
event, considering that the law adopts a protective policy towards agriculture.
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.
Where loss of cargo results from the failure of the officers of a vessel to inspect Such limited-liability clause has also been consistently upheld by this Court in a
their ship frequently so as to discover the existence of cracked parts, that loss number of cases.
cannot be attributed to force majeure, but to the negligence of those officials.
Sea-Land Service, Inc. vs. Intermediate Appellate Court, we ruled:
The law provides that a common carrier is presumed to have been negligent if
it fails to prove that it exercised extraordinary vigilance over the goods it It seems clear that even if said section 4 (5) of the Carriage of Goods by Sea
transported. Ensuring the seaworthiness of the vessel is the first step in Act did not exist, the validity and binding effect of the liability limitation clause in
exercising the required vigilance. Petitioner did not present sufficient evidence the bill of lading here are nevertheless fully sustainable on the basis alone of
showing what measures or acts it had undertaken to ensure the seaworthiness the cited Civil Code Provisions. That said stipulation is just and reasonable is
of the vessel. It failed to show when the last inspection and care of the auxiliary arguable from the fact that it echoes Art. 1750 itself in providing a limit to
engine fuel oil service tank was made, what the normal practice was for its liability only if a greater value is not declared for the shipment in the bill of
maintenance, or some other evidence to establish that it had exercised lading.
extraordinary diligence. It merely stated that constant inspection and care were
not possible, and that the last time the vessel was dry-docked was in
In the present case, the stipulation limiting petitioners liability is not contrary to
November 1990. Necessarily, in accordance with Article 1735 of the Civil
public policy. In fact, its just and reasonable character is evident. The
Code, we hold petitioner responsible for the loss of the goods covered by Bills
of Lading Nos. 58 and 59. shippers/consignees may recover the full value of the goods by the simple
expedient of declaring the true value of the shipment in the Bill of Lading. Other
than the payment of a higher freight, there was nothing to stop them from
Second Issue: placing the actual value of the goods therein. In fact, they committed fraud
against the common carrier by deliberately undervaluing the goods in their Bill
Extent of Liability of Lading, thus depriving the carrier of its proper and just transport fare.

The records show that the Bills of Lading covering the lost goods contain the Concededly, the purpose of the limiting stipulation in the Bill of Lading is to
stipulation that in case of claim for loss or for damage to the shipped protect the common carrier. Such stipulation obliges the shipper/consignee to
merchandise or property, [t]he liability of the common carrier x x x shall not notify the common carrier of the amount that the latter may be liable for in case
exceed the value of the goods as appearing in the bill of lading. A stipulation of loss of the goods. The common carrier can then take appropriate measures
that limits liability is valid as long as it is not against public policy. -- getting insurance, if needed, to cover or protect itself. This precaution on the
part ofthe carrier is reasonable and prudent.
In Everett Steamship Corporation v. Court of Appeals, the Court stated:
Hence, a shipper/consignee that undervalues the real worth of the goods it
A stipulation in the bill of lading limiting the common carriers liability for loss or seeks to transport does not only violate a valid contractual stipulation, but
destruction of a cargo to a certain sum, unless the shipper or owner declares a commits a fraudulent act when it seeks to make the common carrier liable for
greater value, is sanctioned by law, particularly Articles 1749 and 1750 of the more than the amount it declared in the bill of lading.
Civil Code which provides:
Indeed, Zosimo Mercado and Nestor Angelia misled petitioner by undervaluing
Art. 1749. A stipulation that the common carriers liability is limited to the value the goods in their respective Bills of Lading. Hence, petitioner was exposed to
of the goods appearing in the bill of lading, unless the shipper or owner a risk that was deliberately hidden from it, and from which it could not protect
declares a greater value, is binding. itself.

Art. 1750. A contract fixing the sum that may be recovered by the owner or
shipper for the loss, destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has been freely and fairly
agreed upon.
It is well to point out that, for assuming a higher risk (the alleged actual value of
the goods) the insurance company was paid the correct higher premium by
Feliciana Legaspi; while petitioner was paid a fee lower than what it was
entitled to for transporting the goods that had been deliberately undervalued by
the shippers in the Bill of Lading.
Between the petitioner and the insurer, the insurer should bear the loss in
excess of the value declared in the Bills of Lading. This is the just and
equitable solution.

We find no cogent reason to disturb the CAs finding that Feliciana Legaspi was
the owner of the goods covered by Bills of Lading Nos. 58 and 59.
Undoubtedly, the goods were merely consigned to Nestor Angelia and Zosimo
Mercado, respectively; thus, Feliciana Legaspi or her subrogee (respondent)
was entitled to the goods or, in case of loss, to compensation therefor. There is
no evidence showing that petitioner paid her for the loss of those goods. It
does not even claim to have paid her.

On the other hand, Legaspi Marketing filed with petitioner a claim for the lost
goods under Bill of Lading No. 59, for which the latter subsequently paid
P14,000. But nothing in the records convincingly shows that the former was the
owner of the goods.Respondent was, however, able to prove that it was
Feliciana Legaspi who owned those goods, and who was thus entitled to
payment for their loss. Hence, the claim for the goods under Bill of Lading No.
59 cannot be deemed to have been extinguished, because payment was made
to a person who was not entitled thereto.
49 AMANDO MIRASOL, plaintiff-appellant, vs.THE ROBERT DOLLAR
CO., defendant-appellant.
G.R. No. L-29721 March 27, 1929
Facts
- Amando Mirasol petitioner 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, Issue:Whether or not the provision in the BL no. 13 limiting the defendant's
plaintiff filed a claim for the real damage of the books therein named in the sum liability is valid is liable for the damage caused by sea water
of $375
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 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.
- 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.
The lower court rendered judgment for the plaintiff for P2,080, with legal
interest thereon from the date of the final judgment.
Hence the appeal.
Held:
An arbitrary limitation of 250 francs for the baggage of any steamship
passenger unaccompanied by any right to increase the amount of adequate
and reasonable proportional payment, is void as against public policy.
Ratio:
There is no claim or pretense that the plaintiff signed the bill of lading or that he
knew of his contents at the time that it was issued. In that situation he was not
legally bound by the clause which purports to limit defendant's liability.
- in Juan Ysmael and Co., vs. Gabino Baretto and Co., (51 Phil., 90; see
numerous authorities there cited). Among such authorities in the case of The
Kengsington decided by the Supreme Court of the U.S. January 6, 1902 (46
Law. Ed., 190), the Court held that:
1. Restrictions of the liability of a steamship company for its own negligence or
failure of duty toward the passenger, being against the public policy enforced
by the courts of the United States, will not to 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 sustained such stipulation.
2. The 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, things, it is said: "Tempest, rocks, shoals, icebergs and other obstacles are
by which the carrier would be exempted from all the liability therefore from
errors in navigation or management of the vessel of other negligence is
unreasonable and in conflict with public policy.
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.
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
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'."

3. An arbitrary limitation of 250 francs for the baggage of any steamship
passenger unaccompanied by any right to increase the amount of adequate
and reasonable proportional payment, is void as against public policy.
In the present 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.
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, 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 lower court in its opinion says:

Hence, 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
The defendant has not even attempted to prove that the two cases were wet rendition in the lower court, and in all respects affirmed, with costs.
with sea water by fictitious event, force majeure or nature and defect of the
things themselves. Consequently, it must be presumed that it was by causes Dussenting Opinions STREET, J., dissenting in part:
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. 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
And the evidence for the defendant shows that the damage was largely caused consignment. While the law does not permit a carrier gratuitously to exempt
by "sea water," from which it contends that it is exempt under the provisions of itself from liability for the negligence of its servants, it cannot effectually do so
its bill of lading and the provisions of the article 361 of the Code of Commerce, for a valuable consideration; and where freight rates are adjusted upon the
which is as follows:
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
Merchandise shall be transported at the risk and venture of the shipper, if the two well considered decisions has heretofore upheld a limitation of exactly the
contrary was not expressly stipulated. 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.
58 AMERICAN PRESIDENT LINES, LTD. vs. RICHARD A. KLEPPER, ET AL. (1) Whether or not the respondent was legally bound by the clause
[G.R. No. L-15671. November 29, 1960.] which purports to limit the plaintiffs liability even if he did not sign
the bill of lading.
DOCTRINE: Article 1753 of the civil code provides that the law of the
country to which the goods are to be transported shall govern the Yes. The respondent was legally bound by the clause which purports
liability of the common carrier in case of loss. to limit the plaintiffs liability even if he did not sign the bill of lading.
As Klepper shipped his goods on board the ship of the plaintiff and
Section 4 (5) of the Carriage of Goods by Sea Act states that the paid the corresponding freight, it means that he impliedly accepted
carrier shall not be liable in an amount exceeding $500.00 per the bill of lading which was issued in connection with the shipment in
package unless the value of the goods had been declared by the question. The same is binding upon him as it has been actually
shipper and inserted in the bill of lading, signed by him or by any other person in his behalf.

FACTS: On February 17, 1955, Klepper shipped on board the S.S.
President Cleveland at Yokohama, Japan one life van under bill of
lading No, 82, containing personal and household effects. The bill of
lading provides that liability in case of loss or damage shall not
exceed $500.00. The ship arrived in the port of Manila on February
22, 1995 and while the lift van was being unloaded by the Gantry
crane operated by Delgado Brothers, Inc., it fell on the pier and its
contents were spilled and scattered. A survey was made and the
result was that Klepper suffered damages totalling P6,729.50 arising
out of the breakage, denting and smashing of the goods.
The trial court rendered decision ordering the shipping company to
pay plaintiff the sum of P6,729.50, value of the goods damaged, plus
P500.00 as their sentimental value, with legal interest from the filing ofamount exceeding $500.00 per package unless the value of the
the complaint, and the sum of P1,000.00 as attorney's fees. The court
ordered that, once the judgment is satisfied, co-defendant Delgado
Brothers, Inc. should pay the shipping company the same amounts
by way of reimbursement. Both defendants appealed to the Court
of Appeals which affirmed in toto the decision of the trial court. The In accepting the bill of lading, the shipper, consignee and owner of
shipping company interposed the present petition for review.
Petitioner does not dispute its liability as common carrier, it however
contends that the same cannot exceed $500.00 invoking in its favor
the bill of lading and Section 4(5) of the Carriage of Goods by Sea
Act (Commonwealth Act No. 65).
(2) Whether or not the liability should not exceed $500.00 as
stipulated in the bill of lading.
Yes. Article 1753 of the civil code provides that the la w of the
country to which the goods are to be transported shall govern the
liability of the common carrier in case of loss, destruction or
deterioration. This means the law of the Philippines, or the Civil Code.
Under Article 1766, In all matters not regulated by this Code, the
rights and obligations of common carriers shall be governed by the
Code of Commerce and by special laws, and in the Civil Code
there are provisions that govern said rights and obligations (Arts.
1736, 1737, 1738). Therefore, although Section 4 (5) of the Carriage
of Goods by Sea Act states that the carrier shall not be liable in an
goods had been declared by the shipper and inserted in the bill of
lading, said section is merely suppletory to the provisions of the Civil
Code.
the goods agree to be bound by all its stipulations, exceptions and
conditions, whether written, printed or stamped on the front or back.

ISSUES and RULING:

ADMIN PAREDES V COURT OF APPEALS (1996)
FACTS:
Public respondents promulgated Administrative order 1 & 2
revising the rules of practice before the bureau of patents,
trademarks and technology transfer in patent and trademark cases
to take effect on March 15, 1993
Rule 16 of AO 1 and rule 15 of AO 2 increased the fees payable to
the Bureau of Patents for registration of patents and trademarks
and rule 59 of AO 2 prohibited the filing of multi class applications
covering several classes of goods
Petitioners Paredes are registered patent agents who filed a
petition for prohibition with prayer for the issuance of a writ of
preliminary injunction to stop Respondents from enforcing the
administrative orders and to declare AO 1 and rules 15 and 59 of
AO 2 be null and void
CA- Dismissed the petition
Our legislature in delegating to administrative officers the
authority to revise fees and charges expressly required
cabinet approval for the proper exercise of said power.
Petitioners should have not wasted the opportunity to utilize
this built in remedy.
Prohibition is granted only in cases where no other remedy is
available which is sufficient to afford redress.
In the instant case, Petitioners still have another available
recourse under the law of section 2 BP 325 which envisions a
3 step process involving a hierarchy of authority before the
rate increases and charges imposed and collected.
o First, the Bureau of Patents makes a recommendation of
the fee increases
o Second, The recommended rates are submitted to the DTI
secretary for evaluation. If the rates conform to the rules of
the ministry of finance, then the same are approved. In
turn, it becomes the rate of the department.
o The determination of the supposed rates as determined by
the head are subject to the approval of the cabinet.

ISSUE:
WON the court erred in dismissing the petition on the ground
of non exhaustion of administrative remedies?

HELD:
Petitioners do not dispute that public respondents are expressly
authorized to revise their fees and charges under BP 325 an act
authorizing heads of ministries, offices, agencies and commissions
of the national government to revise the rates of fees and charges
Court denies the petition
Prohibition is not the proper remedy. The enabling law itself
which is BP 325 has specifically tasked the cabinet to review
and approve any proposed revisions of rates of fees and
charges.
Petitioners should have availed of this easy and accessible
remedy instead of immediately resorting to the judicial
process
ADMIN - JAIME C. LOPEZ, petitioner, vs. CITY OF MANILA and within the administrative machinery, this should be resorted to before resort
HON. BENJAMIN A.G. VEGA, Presiding Judge, RTC can be made to the courts, not only to give the administrative agency the
opportunity to decide the matter by itself correctly, but also to prevent
Lopez v. City of Manila (GR No. 127139; Feb. 19, 1999) unnecessary and premature resort to courts.
FACTS: One of the reasons for the doctrine of exhaustion is the separation of
powers which enjoins upon the judiciary a becoming policy of non-
Section 219 of Republic Act 7160 (R.A. 7160) or the Local Government interference with matters coming primarily within the competence of other
Code of 1991 requires the conduct of the general revision of real property. department. x x x
The revision of real property assessments prescribed therein was not yet There are however a number of instances when the doctrine may be
enforced in the City of Manila. Upon receipt of Memorandum Circular No. dispensed with and judicial action validly resorted to immediately. Among
04-95 from the Bureau of Local Government Finance relating to the failure these exceptional cases are: (1) when the question raised is purely legal,
of most of the cities and municipalities of Metropolitan Manila, including the
(2) when the administrative body is in estoppel; (3) when the act
City of Manila, to conduct the general revision of real property and aftercomplained of is patently illegal; (4) when there is urgent need for judicial
obtaining the necessary funds from the City Council, the City Assessor intervention; (5) when the claim involved is small; (6) when irreparable
began the process of general revision based on the updated fair market damage will be suffered; (7) when there is no other plain, speedy and
values of the real properties. adequate remedy; (8) when strong public interest is involved; (9) when the
The City Assessors Office submitted the proposed schedule of fair market subject of controversy is private land; and (10) in quo-warranto proceeding
values to the City Council for its appropriate action. The council then (citation omitted).
enacted Manila Ordinance No. 7894 which was approved. With the In the courts opinion, however, the instant petition does not fall within any
implementation of the ordinance, the tax on the land owned by the of the exceptions above-mentioned.
petitioner was increase hence he filed a special proceeding for the
declaration of nullity of the City of Manila Ordinance No. 7894 for being
unjust, excessive, oppressive or confiscatory.
Manila Ordinance No. 7905 took effect thereafter, reducing by fifty percent
(50%) the assessment levels (depending on the use of property, e.g.,
residential, commercial) for the computation of tax due. The new
ordinance amended the assessment levels provided by Section
74, paragraph (A) of Manila Ordinance No. 7794..
Despite the amendment brought about by Manila Ordinance No. 7905, the
controversy proceeded.
The trial court dismissed the case for failure of the petitioner to exhaust
administrative remedies.
ISSUE: W/N the doctrine of exhaustion of administrative remedies may be
dispensed with in the instant case
HELD: NO. As a general rule, where the law provides for the remedies
against the action of an administrative board, body, or officer, relief to
courts can be sought only after exhausting all remedies provided. The
reason rests upon the presumption that the administrative body, if given
the chance to correct its mistake or error, may amend its decision on a
given matter and decide it properly. Therefore, where a remedy is available
54 LOADSTAR SHIPPING VS CA occasional, episodic or unscheduled. The records do not disclose that the M/V
Cherokee, on the date in question, undertook to carry a special cargo or was
FACTS: LOADSTAR received on board its M/V Cherokee the following goods
chartered to a special person only. There was no charter party. The bills of
for shipment:
lading failed to show any special arrangement, but only a general provision to
a) 705 bales of lawanit hardwood; the effect that the M/V Cherokee was a general cargo carrier.Further, the bare
b) 27 boxes and crates of tilewood assemblies and others; and fact that the vessel was carrying a particular type of cargo for one shipper,
which appears to be purely coincidental, is not reason enough to convert the
c) 49 bundles of mouldings R & W (3) Apitong Bolidenized. vessel from a common to a private carrier, especially where, as in this case, it
The goods, amounting to P6,067,178, were insured for the same amount with was shown that the vessel was also carrying passengers.
MIC against various risks including TOTAL LOSS BY TOTAL LOSS OF THE 2.NO, M/V Cherokee was not seaworthy when it embarked on its
VESSEL. The vessel, in turn, was insured by Prudential Guarantee & voyage on 19 November 1984. The vessel was not even sufficiently manned at
Assurance, Inc. for P4M. On its way to Manila from the port of Nasipit, Agusan the time. For a vessel to be seaworthy, it must be adequately equipped for the
del Norte, the vessel, along with its cargo, sank off Limasawa Island. As a voyage and manned with a sufficient number of competent officers and crew.
result of the total loss of its shipment, the consignee made a claim with The failure of a common carrier to maintain in seaworthy condition its vessel
involved in a contract of carriage is a clear breach of its duty prescribed in
LOADSTAR which, however, ignored the same. As the insurer, MIC paid
Article 1755 of the Civil Code. Thus, the doctrine of limited liability does not
P6,075,000 to the insured in full settlement of its claim, and the latter apply where there was negligence on the part of the vessel owner or
executed a subrogation receipt therefor. agent.LOADSTAR was at fault or negligent in not maintaining a seaworthy
vessel and in having allowed its vessel to sail despite knowledge of an
On 4 February 1985, MIC filed a complaint against LOADSTAR and PGAI,
approaching typhoon. Since it was remiss in the performance of its duties,
alleging that the sinking of the vessel was due to the fault and negligence of LOADSTAR cannot hide behind the limited liability doctrine to escape
LOADSTAR and its employees. However LOADSTaR denied liability it responsibility for the loss of the vessel and its cargo.
contended that the vessel was a private carrier because it was not issued a
certificate of public convenience, it did not have a regular trip or schedule nor
a fixed route, and there was only one shipper, one consignee for a special
cargo. LOADSTAR goes on to argue that, being a private carrier, any
agreement limiting its liability, such as what transpired in this case, is valid.
Since the cargo was being shipped at owners risk, LOADSTAR was not liable.
ISSUES:
1.WON LoadStar is a private carrier
2. WON the agreement limiting Loadstar's liability can be invoked by the
latter.
HELD:
1. NO, LOADSTAR is a common carrier. It is not necessary that the carrier be
issued a certificate of public convenience, and this public character is not
altered by the fact that the carriage of the goods in question was periodic,