Case Summary (G.R. No. 122648)
Procedural Posture and Relief Sought
This is a Petition for Review on Certiorari under Rule 45 assailing the Court of Appeals’ 11 December 2002 Resolution which granted appeal and set aside the Regional Trial Court (RTC) decision. The Court of Appeals directed petitioners to pay respondent the invoice value of the goods lost (US$53,640.00), attorney’s fees (P50,000.00) and costs. The RTC had earlier dismissed respondent’s complaint and awarded petitioners P120,000.00 on their counterclaims for litigation expenses. The Supreme Court reviewed the CA resolution on the petitioners’ grounds.
Material Facts
On or about 14 September 1987 Glow Laks loaded 343 cartons of garments on board M/S Scandutch at the Port of Manila for carriage to Hong Kong and ultimately to Colón, Panama. The goods, evidenced by bills of lading cited above, arrived in Hong Kong and were transshipped to M/S Amethyst for carriage to Colón. Upon arrival at Colón on 23 October 1987, custody was turned over to the National Ports Authority (Panama) in accordance with Panamanian law and practice. Unauthorized persons later presented forged bills of lading and obtained release of the cargo. Respondent instituted a formal claim with Nedlloyd (16 July 1988) and thereafter filed Civil Case No. 88-45595 in the RTC of Manila seeking recovery of US$53,640.00 plus interest.
RTC Decision and Rationale
The RTC dismissed respondent’s complaint and granted petitioners’ counterclaims (ordering P120,000.00 to petitioners). The RTC found that Panamanian law (specifically Law 42 and Implementing Order No. 7) required carriers to discharge cargo into custody of the Panama Ports Authority for government collection purposes, and that petitioners discharged their obligation by so doing. The RTC concluded that subsequent withdrawal by unauthorized persons on the basis of falsified bills did not constitute a misdelivery attributable to the carrier.
Court of Appeals Decision and Rationale
The Court of Appeals reversed the RTC, holding that the Panamanian laws were not proven according to Section 24, Rule 132 of the Revised Rules of Court and therefore could not be accorded full faith and credit. Applying the processual presumption, the CA treated foreign law as unproven and presumed it to be the same as Philippine law. Under Philippine law (New Civil Code), the CA concluded that the carrier’s extraordinary responsibility continued until actual or constructive delivery to the consignee or person entitled to receive the goods; lacking proof that the consignee or notify party had been informed of arrival, the carrier’s extraordinary responsibility subsisted and the carrier was liable for the loss.
Issues Raised by Petitioners on Review
Petitioners primarily argued: (1) there was no need to prove Panamanian law because it had been judicially admitted; (2) they had proved Panamanian law by presenting the Gaceta Official (No. 17.596) and the testimony of expert witnesses; and (3) if foreign law were held unproven, the petitioners nonetheless discharged their duty under either Panamanian or Philippine law and should not be held liable.
Governing Rules on Proof of Foreign Law
The Court reaffirmed the settled rule that foreign laws do not prove themselves and must be alleged and proved like other facts. Proof must comply with Sections 24 and 25, Rule 132 of the Revised Rules of Court: (a) an official publication or a copy attested by the officer having legal custody of the record (or deputy), accompanied by a certificate that such officer has custody if the record is not kept in the Philippines; and (b) a certificate by a Philippine diplomatic or consular officer (secretary of the embassy/legation, consul general, consul, vice-consul, consular agent or other foreign service officer of the Philippines) authenticated by the seal of his office. The attestation must state that the copy is a correct copy of the original and bear the official seal.
Application of Foreign-Law Proof Rule to the Case
The Court found Panamanian Law 42 and Implementing Order No. 7 were not proven in accordance with the mandatory requirements of Rule 132. The photocopy of the Gaceta Official and the deposition of Mr. Enrique Cajigas (a Panamanian maritime practitioner) were insufficient: the photocopy lacked the required attestation and consular certification, and the deposition was not the required custodial certificate but, at best, expert opinion. The Court noted that deposition evidence obtained ex parte and not presented in open court cannot supplant the formal attestation and consular certification required. The Court acknowledged limited exceptions—e.g., testimony in open court of a foreign attorney quoting the law—but found the facts here did not fit those narrow exceptions. Consequently, foreign law could not be given effect and the processual presumption applied.
Legal Standards on Carrier Liability under Philippine Law
Under the New Civil Code (Articles 1733–1738, in particular Articles 1736 and 1738), common carriers are bound by extraordinary diligence in the custody of goods from receipt for carriage until actual or constructive delivery to the consignee or person entitled to receive them. Extraordinary diligence denotes an extreme degree of care; where shipped goods are lost or misdelivered, a presumption of carrier negligence arises. To rebut the presumption, the carrier must prove it exercised such extraordinary diligence; mere showing that another party could be responsible is insufficient. Article 353 of the Code of Commerce establishes that the bill of lading is the legal evidence of the contract and that return or acknowledgement
...continue readingCase Syllabus (G.R. No. 122648)
Procedural Posture and Relief Sought
- Petition for Review on Certiorari filed under Rule 45 of the Revised Rules of Court, assailing the 11 December 2002 Resolution of the Court of Appeals in CA-G.R. CV No. 48277.
- The Court of Appeals had GRANTED the appeal, SET ASIDE the April 29, 1994 Decision of the Regional Trial Court (RTC) of Manila, Branch 52 in Civil Case No. 88-45595, and ordered petitioners to pay respondent: (a) the invoice value of the goods lost, US$53,640.00 (or its peso equivalent); (b) attorney’s fees of P50,000.00; and (c) costs.
- Petitioners (Nedlloyd Lijnen B.V. Rotterdam and The East Asiatic Co., Ltd.) seek reversal of the Court of Appeals’ Resolution and reinstatement of the RTC decision dismissing respondent’s complaint and awarding petitioners P120,000.00 on their counterclaims.
- The Supreme Court (Perez, J.) DENIED the petition and AFFIRMED the assailed Court of Appeals Resolution.
Parties and Nature of the Action
- Petitioner Nedlloyd Lijnen B.V. Rotterdam (Nedlloyd): foreign corporation engaged in carriage of goods by sea; its vessels regularly call at Manila and it is represented in the Philippines by local ship agent co-petitioner East Asiatic Co., Ltd. (East Asiatic).
- Respondent Glow Laks Enterprises, Ltd.: foreign corporation organized under Hong Kong law; not licensed to do business in the Philippines and not doing business in the Philippines.
- Civil action instituted by respondent for recovery of US$53,640.00 representing the invoice value of garments misdelivered at Port of Colon, Panama, plus legal interest from date of first demand.
Material Facts
- On or about 14 September 1987, respondent loaded 343 cartons of garments on M/S Scandutch at the Port of Manila for pre-carriage to Port of Hong Kong under Bills of Lading Nos. MHONX-2 and MHONX-3.
- Goods arrived in good condition in Hong Kong and were transshipped to M/S Amethyst for final carriage to Colon, Free Zone, Panama; both vessels are owned by Nedlloyd and represented in the Philippines by East Asiatic.
- Goods, valued at US$53,640.00, were to be released to the consignee, Pierre Kasem, International, S.A., upon presentation of original bills of lading.
- Upon the vessel’s arrival at Port of Colon on 23 October 1987, petitioners purportedly notified the consignee of arrival and custody of the goods was turned over to the National Ports Authority (Panama) per Panamanian laws/customs practice.
- Unauthorized persons forged the covering bills of lading and, relying on falsified documents, obtained release of the goods from the Panamanian ports authority.
- On 16 July 1988 respondent filed a formal claim with Nedlloyd for US$53,640.00; when not paid, respondent filed Civil Case No. 88-45595 in RTC Manila seeking recovery.
Trial Court (RTC) Findings and Decree
- RTC (Branch 52) after trial dismissed respondent’s complaint and granted petitioners’ counterclaims; ordered dismissal of complaint and awarded petitioners ONE HUNDRED TWENTY THOUSAND PESOS (P120,000.00) on their counterclaims with costs against respondent.
- RTC rationale: Panamanian law was duly proven at trial and, under that statute, carriers unloading at a Panama port must discharge cargo into custody of Panama Ports Authority to facilitate government collection; subsequent withdrawal by unauthorized persons on falsified bills was not misdelivery attributable to carrier’s fault, thus carrier liability had ceased upon turnover to ports authority.
Court of Appeals Holding
- Court of Appeals reversed the RTC, ruling that foreign laws were not proven in compliance with Section 24, Rule 132 of the Revised Rules of Court and therefore could not be given full faith and credit.
- Under the doctrine of processual presumption, for failure to prove foreign law it is presumed foreign laws are the same as Philippine law; applying domestic law, the extraordinary responsibility of common carriers continues until actual or constructive delivery to consignee or person entitled to receive goods.
- Noting absence of proof that the notify party or consignee was informed of arrival, the Court of Appeals held petitioners remained under extraordinary responsibility and directed payment of US$53,640.00 to respondent.
Issues Presented to the Supreme Court
- I. Whether there was no need to prove Panamanian laws because they were judicially admitted and admissions do not require proof.
- II. Whether petitioners proved Panamanian law by presenting a photocopy of the Gaceta Official No. 17.596 (Spanish text of Law 42) and the testimony (deposition) of an expert witness.
- III. If there is failure of proof of foreign law, whether petitioners nonetheless discharged their contractual duty under either Panamanian or Philippine law.
Governing Rules on Proof of Foreign Law (Rule 132, Secs. 24 & 25)
- Foreign laws do not prove themselves and courts are not authorized to take judicial notice of them; they must be alleged and proved like any other fact.
- Section 24, Rule 132: official records may be evidenced by official publication or by a copy attested by officer with custody, or by a deputy, and if not kept in the Philippines, must be accompanied by a certificate attesting custody issued by authorized Philippine embassy or consular officials or foreign service officers and authenticated by the seal of his office.
- Section 25, Rule 132: attestation of copy must state that it is a correct copy of t