Eastern Shipping Lines Inc. v.

IAC, 150 SCRA 463

Doctrine:
When a carrier fails to establish any caso fortuito, the presumption by law of fault or negligence on the part of the
carrier applies.
FACTS:

Carrier – Eastern Shipping Lines Inc

Shipper/Consignee –Stresstek Post Tensioning Philippines Inc

Insurer - First Nationwide Assurance Corporation

Arrastre Operator – E. Razon Inc. (not significant)

Eastern Shipping Lines Inc shipped uncoated 7-wire stress relieved wire strand for prestressed concretewere shipped on
board the vessel "Japri Venture,". Upon arrival at the port of Manila, it discharged thecargo to the custody of the
defendant E. Razon, Inc. from whom the consignee's customs brokerreceived it for delivery to the consignee's
warehouse. First Nationwide Assurance, indemnified theconsignee in the amount of P171,923.00 for damage and loss to
the insured cargo, whereupon theformer was subrogated for the latter. The insurer now seeks to recover from the
defendants what ithas indemnified the consignee. The petitioner protested alleging that it should not be hel liable to
answer for damages for the event that caused the rusting of the goods was due to the “encounteredvery rough seas and
stormy weather” classified as force majeure, hence relieving them of any liability.

Aggrieved, respondent filed a case against petitioner.

RTC– dismissed the case

CA –set aside RTC’s decision and ordered petitioner to pay respondent

ISSUE:

W/N petitioner was negligent and should be held liable for the payment of damages.
HELD:

YES. Plainly, the heavy seas and rains referred to in the master's report were not
caso fortuito, but normal occurrences that an ocean-going vessel, particularly in the month of September which, in our
area, is a month of rains and heavy seas would encounter as a matter of routine. They are not unforeseen nor
unforeseeable. These are conditions that ocean-going vessels would encounter and provide for, in the ordinary course of
a voyage. That rain water (not sea water) found its way into the holds of the Jupri Venture is a clear indication that care and
foresight did not attend the closing of the ship's hatches so that rainwater would not find its way into the cargo holds of the
ship.

Moreover, under Article 1733 of the Civil Code, common carriers are bound to observe "extra-ordinary vigilance
over goods . . . .according to all circumstances of each case," and Article 1735 of the same Code states, to wit:

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.

Since the carrier has failed to establish any caso fortuito, the presumption by law of fault or negligence on the part
of the carrier applies; and the carrier must present evidence that it has observed the extraordinary diligence required by
Article 1733 of the Civil Code in order to escape liability for damage or destruction to the goods that it had admittedly
carried in this case. No such evidence exists of record. Thus, the carrier cannot escape liability.

The presumption, therefore, that the cargo was in apparent good condition when it was delivered by the vessel to
the arrastre operator by the clean tally sheets has been overturned and traversed. The evidence is clear to the effect that
the damage to the cargo was suffered while aboard petitioner's vessel.
Eastern Shipping Lines Inc. VS. Intermediate Appellate Court
(150 SCRA 463)

Facts: Sometime in or prior to June 1977, the M/S Asiatica, a vessel operated by petitioner Eastern Shipping Lines Inc., loaded at
Kobe, Japan for transportation to Manila loaded 5,000 pieces of calorized pipes valued at P256,039.00 which was consigned to
Philippine Blooming Mills Co, Inc. and 7 cases of spare parts valued at P92, 361.75 consigned to Central Textile Mills. Both sets of
goods were inured against marine risk for their stated value with respondent Development Insurance and Surety Corp.

In the same vessel, 2 containers of garment fabrics were also loaded which was consigned to Mariveles Apparel Corp worth $46,583.
The said cargoes were consigned to Nisshin Fire and Marine Insurance. Another cargo loaded to the vessel was the surveying
instruments consigned to Aman Enterprises and General Merchandise and insured against respondent Dowa Fire & Marine Insurance
for $1,385.00.

On the way to Manila, M/S Asiatica caught fire and sank. This resulted to the loss of the ship and its cargoes. The respective Insurers
paid the corresponding marine insurance values and were thus subrogated to the rights of the insured.

The insurers filed a suit against the petitioner carrier for recovery of the amounts paid to the insured. However, petitioner contends that
it is not liable on the ground that the loss was due to an extraordinary fortuitous event.

Issue: Whether the Civil Code provisions on Common Carriers or the Carriage of the Goods by Sea Act will govern the case at bar?

Held: The law of the country to which the goods are to be transported governs the liability of common carrier in case of their loss,
destruction or deterioration. The liability of petitioner is governed primarily by the Civil Code however, in all matters not regulated by the
Civil Code, the Code of Commerce and Special Laws will govern with respect to the rights and obligations of the carrier. Therefore
COGSA is suppletory to the provisions of the Civil Code.

Doctrine:
When a carrier fails to establish any caso fortuito, the presumption by law of fault or negligence on the part of the carrier applies.

Facts:
- 13 coils of uncoated 7-wire stress relived wire strand for prestressed concrete were shipped on board the vessel “Japri Venture” (owned by
Easter Shipping Lines) for delivery to Stresstek Post-Tensioning Phils. in Manila. The cargo was insured by First Nationwide Assurance Corporation
(FNAC).
- The vessel arrived in Manila and discharged the cargo to the custody of E.Razon Inc., from whom the consignee’s customs broker received it for
delivery to the consignee’s warehouse.
- It appears that while en route to Manila, the vessel encountered very rough seas and stormy weather and the cargo stored in the lower hatch of
the vessel was flooded with water about one foot deep. That upon survey, it was found that several coils were rusty on one side and that the
wetting of the cargo was caused by fresh water that entered the hatch when the vessel encountered heavy weather.
- FNAC paid Stresstek about Php 172K for damage and loss to the insured cargo.
- Being subrogated to the rights of Stresstek, FNAC now seeks o recover from Eastern what it has indemnified Stresstek less the salvage value of
the goods, or the total of about Php 124K.
- The RTC ordered for the dismissal of the case.
Upon appeal, the CA held that Eastern is liable to FNAC.

Issue:

Whether Easter should be held liable even if it claims that the shipment was discharged and delivered complete into the custody of the arrastre
operator under clean tally sheets.

Held:
- YES. In arriving at the decision, the SC agreed with the CA on its findings and conclusions.
- The heavy seas and rains referred to in the master’s report were not caso fortuito, but normal occurrences that an ocean going vessel,
particularly in the month of September which, in our area, is a month of rains and heavy seas would encounter as a matter of routine. They are not
unforeseen nor unforeseeable. These are conditions that ocean-going vessels would encounter and provide for, in the ordinary course of voyage.
- The rain water (not sea water) found its way into Japri Venture is a clear indication that care and foresight did not attend the closing of the
ship’s hatches so that rain water would not find its way into the cargo,
- Since Easter has failed to establish any caso fortuito, the presumption of fault or negligence on the part of the carrier applies; and the carrier
must present evidence that it has observed the extraordinary diligence required in Art. 1733 to escape liability.
The SC held that the presumption that the cargo was in apparent good condition when it was delivered by the vessel to the arrastre operation by
the clean tally sheets has been overturned. The evidence is clear to the effect that the damage to the cargo was suffered while aboard petitioner’s
vessel.
Trans World Airlines (TWA) vs. CA

Facts:

Vinluan, a practicing lawyer in Manila had to travel to several cities in Europe and US. While in Paris,
he went to the office of TWA to confirm his reservation for first class accommodation. It was
confirmed twice. During the time of the flight, he was told that there was no 1st class seat available.
Hence, he was downgraded to economy. He protested but he was arrogantly treated by a TWA
employee. And while waiting for his flight, he saw white Caucasians who arrived much later than him,
in first class seats.

Issue: WON Vinluan is entitled to damages.

Held:

Yes.

1 The discrimination is obvious and the humiliation to which private respondent was subjected is
undeniable. Consequently, the award of moral and exemplary damages by the respondent court is in
order.

2 Inattention and lack of care for the interest of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount to bad faith which entitles the passenger
to the award of moral damages. More so in this case where instead of courteously informing private
respondent of his being downgraded under the circumstances, he was angrily rebuffed by an
employee of petitioner
G.R. No. 101503 September 15, 1993
Lessons Applicable: Charter Party (Transportation)

FACTS:
 June 16 1974: Mitsubishi International Corporation (Mitsubishi) of New York, U.S.A., 9,329.7069 M/T of Urea 46%
fertilizer bought by Planters Products, Inc. (PPI) on aboard the cargo vessel M/V "Sun Plum" owned by private Kyosei
Kisen Kabushiki Kaisha (KKKK) from Kenai, Alaska, U.S.A., to Poro Point, San Fernando, La Union, Philippines, as
evidenced by Bill of Lading
 May 17 1974: 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
 Before loading the fertilizer aboard the vessel, 4 of her holds were all presumably inspected by the charterer's
representative and found fit
 The hatches remained closed and tightly sealed throughout the entire voyage
 July 3, 1974: PPI 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
 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 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.
 Tarpaulins and GI sheets were placed in-between and alongside the trucks to contain spillages of the ferilizer
 It took 11 days for PPI to unload the cargo
 Cargo Superintendents Company Inc. (CSCI), private marine and cargo surveyor, was hired by PPI to determine the
"outturn" of the cargo shipped, by taking draft readings of the vessel prior to and after discharge
 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
 Certificate of Shortage/Damaged Cargo prepared by PPI
 short of 94.839 M/T and about 23 M/T were rendered unfit for commerce, having been polluted with sand, rust and
dirt
 PPI sent a claim letter 1974 to Soriamont Steamship Agencies (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
 SSA: what they received was just a request for shortlanded certificate and not a formal claim, and that they "had
nothing to do with the discharge of the shipment
 RTC: failure to destroy the presumption of negligence against them, SSA are liable
 CA: REVERSED - failed to prove the basis of its cause of action

ISSUE: W/N a time charter between a shipowner and a charterer transforms a common carrier into a private one as to
negate the civil law presumption of negligence in case of loss or damage to its cargo

HELD: NO. petition is DISMISSED

 When PPI chartered the vessel M/V "Sun Plum", the ship captain, its officers and compliment were under the employ
of the shipowner and therefore continued to be under its direct supervision and control. Hardly then can we charge
the charterer, a stranger to the crew and to the ship, with the duty of caring for his cargo when the charterer did not
have any control of the means in doing so
 carrier has sufficiently overcome, by clear and convincing proof, the prima facie presumption of negligence. The
hatches remained close and tightly sealed while the ship was in transit as the weight of the steel covers made it
impossible for a person to open without the use of the ship's boom.
 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
 This is a risk the shipper or the owner of the goods has to face. Clearly, KKKK 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.