CITADEL LINES VS CA

Facts: Citadel Lines Inc. was the carrier of the subject shipment, 180 Filbrite Dunhill Cigarrettes
and imported by Manila Wine Merchants, Inc as the Consignee. When the goods arrived at Port
of Manila, the shipment was stripped. One shipment was delivered and the other was palletized
in a container duly padlocked and sealed by the representative of the carrier. On the next day
they found out that the padlock and seal was tampered and 90 cases of the cigarettes was lost.
The carrier was held liable for the principal amount of P312,480.00 representing the market
value of the goods. The carrier appealed contending that the stipulation limiting the liability of
the carrier in the bill of lading no. 70621374 and 70608680 is binding upon the parties.
ISSUE: Whether the stipulation limiting the liability of the carrier contained in the bill of lading
is binding on the consignee.
Held: Yes, it is binding. The award of damages is erroneous. Under the bill of lading clause 6,
the liability of the carrier is limited to $2.00 per kilo. Basic is the rule that a stipulation limiting
the liability of the carrier to the value of the goods appearing in the bill of lading, unless the
shipper or owner declares a greater value, is binding. Further, 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 fairly agreed
upon.