G.R. No. L-36481-2 - Servando vs. Philippine Steam Navigation Co.

On November 6, 1963, appellees Clara Uy Bico and Amparo Servando loaded cargoes aboard the vessel FS-176 owned by appellant Philippine Steam Navigation Company (PSNC), for carriage from Manila to Pulupandan, Negros Occidental. Clara Uy Bico shipped 1,528 cavans of rice valued at ₱40,907.50, and Amparo Servando shipped 44 cartons of colored paper, toys, and general merchandise valued at ₱1,070.50. Bills of lading were issued by the appellant to evidence the shipment.
Upon arrival on November 18, 1963, the cargoes were discharged into the Bureau of Customs’ warehouse in Pulupandan in good order.

At about 2:00 PM the same day, a fire of unknown origin razed the Bureau of Customs’ warehouse, destroying the appellees’ cargoes.
Before the fire, Clara Uy Bico had taken delivery of 907 cavans of rice.
Appellees’ claims for compensation were rejected by the appellant.

The Court of First Instance of Negros Occidental ruled against appellant PSNC and ordered payment of damages with legal interest:

The liability was based on the finding that the appellant was responsible for the loss since the goods were lost before actual or constructive delivery to the consignees.

The bills of lading contained “Clause 14” which limited carrier liability for loss caused by force majeure, accidents of the sea, war, public enemies, or fire, except where loss was due to negligence of the carrier.
The court below did not give effect to this clause.

The appellant invoked Article 1736 of the Civil Code imposing extraordinary diligence upon common carriers from when goods come into possession until delivery to consignee.
Argued that delivery to the Customs warehouse was not actual or constructive delivery to consignee; thus, liability ceased only upon actual or constructive delivery.
Claimed fire was a fortuitous event (force majeure) and that they were not negligent.
Asserted that the stipulation limiting liability was valid and binding despite appellees not signing or specifically assenting to it.

Whether the appellant Philippine Steam Navigation Company is liable for the loss of the cargo due to the fire in the Customs warehouse.
Whether the delivery of goods to the Bureau of Customs’ warehouse constituted actual or constructive delivery to the consignees, thereby terminating the carrier’s liability under Article 1736 of the Civil Code.
Whether the clause in the bill of lading exempting the carrier from liability for loss by fire and force majeure is valid, binding, and applicable.
Whether the fire that destroyed the goods amounted to force majeure or fortuitous event relieving the carrier of liability.
Whether appellees’ lack of signature or explicit consent to the stipulation limits the binding effect of the limitation clause.