Case Summary (G.R. No. 16598)
Factual Background
The central facts of the case involve a shipment of twelve 8-day Edmond clocks, which the plaintiff shipped from New York to Manila aboard the steamship Bolton Castle on June 5, 1919. Upon arrival in Manila on September 10, 1919, the clocks were not delivered by the vessel’s master or the defendant, who acted as its local agent. The plaintiff had already paid the freight in advance and made a demand for delivery, which was not fulfilled. The invoice value of the clocks was ₱22, while their market value in Manila at the expected delivery time was ₱420.
Contractual Clauses and Legal Contention
The bill of lading provided certain clauses that were the basis of the dispute between the plaintiff and the defendant. One significant clause (Clause 1) stated that the value of the goods did not exceed $500 per freight ton unless expressly stated otherwise with ad valorem freight paid. Another clause (Clause 9) emphasized that in cases of claims for short delivery, the carrier would not be liable for more than the net invoice price plus freight and insurance. The defendant tendered ₱76.36 as the calculated freight ton value, which the plaintiff rejected, arguing for the higher market value of ₱420, citing the clauses as contrary to public order and therefore void.
Legal Issues Assessed
The case posed two primary legal questions: first, whether a common carrier could limit its liability for loss or damage to an agreed valuation, and second, which of the two clauses in the bill of lading should govern the defendant's liability. The court analyzed the stipulations in the bill of lading, noting that while certain limitations on liability are permissible, they must adhere to public policy. The court recognized the validity of limitations that are constructed to prevent extravagant valuations when agreed upon by the shipper.
Judicial Interpretation of Contract Clauses
Judicial interpretation focused on whether Clause 1 or Clause 9 should serve as the standard for measuring the defendant's liability. The defendant contended that since the invoice value was less than the maximum stated in Clause 1, this clause should govern. In contrast, Clause 9 offered an explicit framework for calculating liability related to short delivery claims and detailed adjustments according to the net invoice price. The court fo
...continue readingCase Syllabus (G.R. No. 16598)
Case Background
- This case originated in the Court of First Instance of the City of Manila, where the plaintiff sought to recover the sum of P420 along with interest.
- The facts of the case were stipulated by both parties, detailing the shipment of merchandise involving twelve 8-day Edmond clocks.
- The plaintiff caused these clocks to be delivered on board the steamship Bolton Castle on June 5, 1919, for transportation to Manila, having paid the freight in advance.
- Upon the steamship’s arrival in Manila on September 10, 1919, the clocks were not delivered to the plaintiff despite demands for their return.
Value of Goods
- The invoice value of the twelve clocks in New York was P22, while their market value in Manila at the time of supposed delivery was P420.
- The relevant bill of lading contained critical clauses defining the liability of the carrier regarding loss or damage to the cargo.
Clauses of the Bill of Lading
- Clause 1: Stipulated that the value of goods does not exceed $500 per freight ton unless a higher value is expressly stated and ad valorem freight is paid.
- Clause 9: Provided that in case of claims for short delivery or damage, the carrier's liability is limited to the net invoice price plus freight and insurance, adjusted pro rata.