Case Summary (G.R. No. 97412)
Issues Presented
- Whether liability for cargo damage is solidary among carrier, arrastre operator, and customs broker.
- Whether legal interest on an unliquidated damage award runs from complaint filing or from the trial court decision.
- Whether the applicable legal interest rate is 12% (Central Bank Circular No. 416) or 6% (Civil Code).
Common-Carrier Diligence and Presumption of Fault
Under Civil Code Arts. 1734–1738, a common carrier owes extraordinary diligence from receipt of goods until delivery or reasonable removal opportunity. Damage or loss raises a presumption of carrier fault, absent proof of an enumerated exception. Both trial and appellate courts found undisputed evidence of damage occurring under the successive custody of petitioner and co-defendants, justifying liability without express negligence findings.
Joint and Several Liability of Successive Custodians
Previous jurisprudence holds that arrastre operators and carriers share a solidary obligation to deliver goods in good condition (Firemans Fund v. Metro Port Services). The Supreme Court clarified that such solidarity does not universally apply to every arrastre operator or broker but may be imposed on a case-by-case basis. Here, sufficient proof of damage in petitioner’s possession rendered its liability inevitable irrespective of others’ liability.
Legal Interest: Rate and Commencement
The Court surveyed its own precedents on interest awards:
• Loan or forbearance of money or goods → Central Bank Circular No. 416 imposes 12% per annum in absence of stipulation, computed from default or demand, and 12% from finality until payment.
• Indemnity for damages (breach of obligations other than loans) → Civil Code Art. 2209 prescribes 6% per annum; interest discretionarily allowed (Arts. 2210–2211).
• Commencement: If demand is reasonably certain, interest runs from judicial or extrajudicial demand (Art. 1169); if claim amount is not yet liquidated with reasonable certainty, interest begins upon rendition of judgment; upon finality of decision, any unpaid award carries 12% per annum until satisfaction.
Supreme Court Ruling on Interest
Applying these clarified rules, the Court modified the appellate award: it affirmed solidary liability but reduced the pre-finality interest rate to 6% per annum, to run from the February 3,
...continue readingCase Syllabus (G.R. No. 97412)
Facts
- On December 4, 1981, two fiber drums of riboflavin were shipped from Yokohama, Japan to Manila under Bill of Lading No. YMA-8, carried by SS EASTERN COMET of Eastern Shipping Lines, Inc.
- The shipment was insured for ₱36,382,466.38 under Marine Insurance Policy No. 81/01177.
- Upon arrival on December 12, 1981, Metro Port Service, Inc. (arrastre operator) received the drums and “excepted” one drum as already in bad order.
- On January 7, 1982, Allied Brokerage Corporation (customs broker) took delivery; one drum was opened without seal with 15 kg spillages.
- On January 8 and 14, 1982, Allied Brokerage delivered to the consignee; the consignee excepted to one drum adulterated/fake.
- The consignee suffered loss of ₱19,032.95. The insurer paid that sum and became subrogated to the consignee’s rights against the three defendants.
Procedural History
- The insurer-subrogee filed suit against Eastern Shipping Lines (carrier), Metro Port Service (arrastre), and Allied Brokerage (broker).
- The trial court found all three liable in solidum and awarded ₱19,032.95 plus 12% interest from October 1, 1982, attorneys’ fees of ₱3,000, and costs; counterclaims by Allied Brokerage were dismissed.
- The Court of Appeals affirmed the trial court in toto.
- Eastern Shipping Lines petitioned the Supreme Court, challenging (1) joint and several liability, (2) computation date for legal interest, and (3) applicable rate of interest.
Issues
- Whether the common carrier, arrastre operator, and customs broker are solidarily liable for damage to the shipment.
- Whether legal interest on the award accrues from the filing of the complaint or from the date of the trial court’s decision.
- Whether the applicable legal interest rate is 12% per annum (Central Bank Circular No. 416) or 6% per annum (Civil Code).
Findings of Fact by the Lower Courts
- The drums left Japan in good order (no bad‐order notation on Bill of Lading or Commercial Invoice).
- On discharge (December 12, 1981), Metro Port Service noted one drum in damaged condition under the vessel’s Bad Order Tally Sheet.
- Allied Brokerage’s survey report showed one drum o