Case Summary (G.R. No. 147724)
Facts of the Case
Lorenzo Shipping Corporation was contracted to transport steel pipes which, upon arrival in Davao City, were found to be heavily rusted due to seawater contamination. These pipes had been loaded in good condition, with clean bills of lading issued by Lorenzo Shipping. Once the shipment reached its destination in the United States, the consignee rejected the damaged cargo and subsequently filed an insurance claim with Chubb and Sons, which was settled. Chubb and Sons later filed a lawsuit to recover the amount paid under the insurance claim.
Applicable Law
The legal framework guiding this case includes provisions from the 1987 Philippine Constitution, the Corporation Code, and the Code of Commerce concerning maritime law and the obligations of common carriers. The principle of subrogation under insurance law also plays a crucial role, determining the rights of Chubb and Sons to pursue recovery as a subrogee of Sumitomo.
Issues Raised by the Petitioner
Lorenzo Shipping raised several arguments on appeal, including:
- Whether Chubb and Sons had the capacity to sue in Philippine courts as a foreign corporation.
- The validity of Sumitomo’s claim against Lorenzo Shipping, particularly regarding compliance with claim periods under the Code of Commerce.
- The adequacy of evidence concerning the condition of the goods upon delivery.
- Whether co-respondents Gearbulk and Transmarine carried some liability.
Court Findings on Capacity to Sue
The court determined that Chubb and Sons could maintain a lawsuit in the Philippines. It emphasized that the right to sue under an isolated transaction was permissible even if the foreign corporation did not have a business license in the country. The court elaborated that the subrogation allowed Chubb and Sons to step into the shoes of Sumitomo concerning rights and remedies against Lorenzo Shipping, signifying its standing in court.
Resolution of Negligence
The court upheld the findings of both lower courts that ruled Lorenzo Shipping was negligent in its duties as a carrier. Evidence demonstrated that the shipment was undamaged when loaded and significantly compromised when received in Davao City. Hence, the presumption of negligence against the carrier was valid, and Lorenzo Shipping failed to rebut this presumption with credible counter-evidence.
Prescription of Claim and Delivery Issues
The court ruled that the claim by Chubb and Sons was timely filed. It reasoned that the 24-hour period for reporting damage under Article 366 of the Code of Commerce commenced only when the consignee took possession of the goods, which occurred upon their arrival in th
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Case Background
- The case involves an appeal by Lorenzo Shipping Corporation (Lorenzo Shipping) from a decision of the Court of Appeals affirming a Regional Trial Court ruling that found it liable to pay Chubb and Sons, Inc. for attorney’s fees and costs of suit.
- Lorenzo Shipping, a domestic corporation engaged in coastwise shipping, was the carrier of 581 bundles of black steel pipes shipped from Manila to Davao City.
- The goods were subsequently carried to the United States by Gearbulk, Ltd., a foreign corporation, through its Philippine agent, Philippine Transmarine Carriers, Inc.
- The consignee of the goods was Sumitomo Corporation, a foreign corporation based in the United States, which had insured the cargo with Chubb and Sons, Inc.
Factual Summary
- On November 21, 1987, the steel pipes were loaded onto the M/V Lorcon IV, owned by Lorenzo Shipping, and were consigned to Sumitomo Corporation.
- Upon arrival in Davao City on December 2, 1987, the shipment was found to be damaged due to seawater exposure, which resulted in rust formation on the pipes.
- A survey report confirmed the damaged state of the cargo, noting the flooding of the cargo hold and the rusty condition of the pipes.
- After inspection, Sumitomo rejected the shipment and filed a marine insurance claim with Chubb and Sons, which was settled at $104,151.00.
Procedural History
- Chubb and Sons filed a c