Case Summary (G.R. No. 199554)
Key Facts and Circumstances
On May 20, 1950, the ship "Jupiter," owned by Joy, took on 107 bundles of hemp for transport. The cargo was valued at P6,736.20 and was entrusted to the South Sea Shipping Line for delivery to the main office of Lee Teh & Co., Inc. in Manila. However, the ship ran aground in Laoang Bay, Samar, due to the negligence of its captain. Of the cargo, only a portion was salvaged and sold, resulting in a loss of P5,196.20 for Lee Teh & Co., Inc., which had insured the cargo with New Zealand Insurance Co.
Legal Framework
The primary legal consideration in this case is Article 366 of the Code of Commerce, which stipulates that claims for damage against the carrier must be made within twenty-four hours following the receipt of merchandise by the consignee. The article emphasizes that claims are only warranted when there has been a delivery to the consignee per the contract terms.
First Instance Decision
The Court of First Instance of Manila dismissed the case, citing that the claim for damages was invalidated because the shipper or consignee failed to file the claim within the required twenty-four-hour period after the cargo was salvaged. The court determined that the cargo was never delivered to the consignee in Manila since it ran aground before reaching its destination.
Appeal and Issues Raised
On appeal, the New Zealand Insurance Co. challenged the lower court's dismissal, arguing whether Lee Teh & Co. (as either consignor or consignee) was bound by the provisions of Article 366 in filing claims for damages. The court's focus was whether the failure to file such a claim within the stipulated time frame affected the right to recover the losses.
Interpretation of Article 366
It was determined that the requirements of Article 366 only apply where goods were delivered by the carrier to the consignee. Since the cargo never reached its final destination, the court reasoned that the article was not applicable. The breach of contract by the carrier prevented it from invoking this provision, as it failed to fulfill its obligation to deliver.
Comparison with Precedent Case
The Court referenced Roldan vs. Lim Ponzo & Co. In this prior case, the court ruled that Article 366 applies only when goods are delivered to the consignee. In the present scenario, since the cargo was never delivered to Manila, the claim for damages could not be deemed invalid due to the lack of a timely claim under Article 366.
Legal Obligations of the Carrier
The court emphasized that under the carriage contract, the carrier carries reciprocal obligations. Since Joy’s company failed to transport the cargo to its intended destination, it could not insist that the conditions surrounding claims—particularly the timing requirements stated in the Code of Commerce—were applicable.
Final Decision
The Supreme Court reversed the lower court's ruling, acknowledging that the failure of the carrier to deliver the cargo justified
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Case Background
- This case concerns an action for the recovery of P5,196.20 with legal interest from the defendant, stemming from the non-delivery of cargo.
- The incident occurred on May 20, 1950, involving the ship "Jupiter," which was owned by Adriano Choa Joy, operating under South Sea Shipping Line.
- The cargo, consisting of 107 bundles of first-class loose weight hemp weighing 8,273 kilos, was loaded at Carangian, Samar, intended for transportation to Manila.
- The cargo was shipped by the branch office of Lee Teh & Co., Inc. in Samar and was valued at P6,736.20.
Incident Details
- The ship ran aground while entering Laoang Bay, Samar, on May 20, 1950, due to the negligence of Captain Jose Molina, who was subsequently suspended for three months.
- Out of the original cargo, only 7,590 kilos (120 piculs) were salvaged, but these were in damaged condition and sold for P2,040 after incurring a salvage cost of P500.
- Lee Teh & Co., Inc. incurred losses totaling P5,196.20 due to the incident.
Insurance and Claims
- The cargo was insured by New Zealand Insurance Co., Ltd., which compensated the shipper for the damages incurred due to the cargo's non-delivery.
- After the carrier refused to reimburse the damages, the insurance company, as subrogee of the shipper, initiated legal action in the Court of First Instance of Manila.
Court Proceedings
- The lower court found that although the shipper suf