G.R. No. 108253 - Geraldez vs. Court of Appeals

On or about June 5, 1919, plaintiff H. E. Heacock Company delivered four cases of merchandise on board the steamship Bolton Castle in New York Harbor, one case containing twelve (12) 8-day Edmond clocks, properly boxed and marked for transportation to Manila; plaintiff paid freight in advance from New York to Manila.
The steamship arrived in Manila on or about September 10, 1919, consigned to defendant Macondray & Company, Inc., as agent and representative of the vessel in that port; neither the master nor the defendant delivered the twelve clocks to plaintiff despite demand.

The invoice value of the twelve clocks in New York was P22; their market value in Manila at the time of expected delivery was P420.
The bill of lading issued by the ship’s master included these relevant clauses:

Clause 1: “It is mutually agreed that the value of the goods receipted for above does not exceed $500 per freight ton, or, in proportion for any part of a ton, unless the value be expressly stated herein and ad valorem freight paid thereon.”
Clause 9: “Also, that in the event of claims for short delivery of, or damage to, cargo being made, the carrier shall not be liable for more than the net invoice price plus freight and insurance less all charges saved, and any loss or damage for which the carrier may be liable shall be adjusted pro rata on the said basis.”

The case containing the twelve clocks measured 3 cubic feet; the freight ton value thereof was stated as $1,480 (U.S. currency). Plaintiff did not declare any greater value than $500 per freight ton and did not pay ad valorem freight.
On or about October 9, 1919, defendant tendered P76.36 to plaintiff, representing the proportionate freight-ton valuation for the twelve clocks; plaintiff rejected the tender.
Plaintiff filed suit (complaint dated November 20, 1919) seeking recovery of P420 plus interest. The trial court applied clause 9 and awarded judgment for P226.02 (invoice value plus freight and insurance) with legal interest and costs. Both parties appealed to the Supreme Court.

Whether a common carrier may, by stipulation in the bill of lading, limit its liability for loss or damage of cargo to an agreed valuation (and if so, under what conditions such stipulations are valid).
If such limitation is permissible, whether clause 1 ($500 per freight ton limitation) or clause 9 (net invoice price plus freight and insurance) governs the measure of the carrier’s liability in this case — i.e., whether defendant’s liability is limited to P76.36 (freight-ton proportion) or to the invoice-based sum awarded by the trial court (P226.02), or to the market value claimed by plaintiff (P420).