Case Summary (G.R. No. L-36481-2)
Facts of the Case
On November 6, 1963, appellees Clara Uy Bico and Amparo Servando shipped goods onboard the appellant Philippine Steam Navigation Company's vessel (FS-176) destined from Manila to Pulupandan, Negros Occidental. Clara Uy Bico shipped 1,528 cavans of rice valued at ₱40,907.50, while Amparo Servando shipped 44 cartons of various merchandise valued at ₱1,070.50. The cargo arrived at Pulupandan on the morning of November 18, 1963, and was unloaded in good condition and stored at the Bureau of Customs' warehouse. At around 2:00 PM the same day, a fire of unknown origin destroyed the warehouse and the goods stored therein. Prior to the fire, Clara Uy Bico had already taken delivery of 907 cavans of rice.
Procedural History
The appellees filed claims for damages against the appellant for the lost cargoes. These claims were initially denied by the appellant. The Court of First Instance ruled in favor of the appellees, awarding damages and legal interest. The appellant appealed, and the Court of Appeals elevated the case to the Supreme Court as the issues involved were pure questions of law.
Legal Issue
Whether the appellant Philippine Steam Navigation Company, as a common carrier, is liable for the loss of the appellees' cargo caused by the fire that burned the Customs warehouse before delivery to the consignees.
Common Carrier Liability under Article 1736
Article 1736 of the Civil Code mandates that common carriers exercise extraordinary diligence from the time goods are unconditionally placed in their possession until actual or constructive delivery to the consignee or authorized receiver. The lower courts held that delivery to the Bureau of Customs warehouse was not actual or constructive delivery to the consignees. Consequently, the carrier retained responsibility for the cargo until such delivery.
Contractual Stipulations Limiting Liability
The bills of lading contained a stipulation (Clause 14) expressly limiting the carrier’s liability for losses caused by force majeure events, including fire, unless due to the carrier's negligence. The Supreme Court upheld the validity of this limitation clause, finding it neither contrary to law, morals, nor public policy. The clause effectively exempts the carrier from liability for losses caused by fortuitous events unless negligence is proven.
Contract of Adhesion and Binding Effect
The appellees argued that they were not bound by the liability limitation because clause 14 was printed in fine letters on the back of the bills of lading and was unsigned by them. The Court rejected this argument, citing precedent that contractual provisions included in contracts of adhesion are binding if the party voluntarily adheres to the contract and has the opportunity to reject it.
Force Majeure and Fortuitous Event under Article 1174
Article 1174 of the Civil Code excludes liability for non-performance caused by events beyond the obligor's control, unforeseen, or inevitable (force majeure or fortuitous event). The Court defined the warehouse fire as a fortuitous event that was independent of the carrier's will, unforeseen, and unavoidable.
Absence of Negligence by the Carrier
The record showed no proof of negligence or delay on the part of the appellant. The appellant had duly notified the consignees of shipment arrival and demanded withdrawal of the cargo, which prompted partial delivery prior to the fire. The storage of the goods in the Customs warehouse was with the knowledge and consent of the consignees and beyond the carrier’s control, as the warehouse was government-owned. The Court distinguished this case from prior rulings where carrier negligence was proven.
Application of Article 1738 and Carrier's Responsibility Post-Arrival
Justice Aquino’s concurring opinion emphasized that under Article 1738, the carrier’s extraordinary liability continues while goods are st
...continue readingCase Syllabus (G.R. No. L-36481-2)
Case Background and Procedural History
- The cases originated from Civil Cases Nos. 7354 and 7428 in the Court of First Instance of Negros Occidental.
- Plaintiffs-Appellees, Amparo C. Servando and Clara Uy Bico, filed claims for damages due to loss of cargoes destroyed by fire.
- Defendant-Appellant, Philippine Steam Navigation Company (PSNC), was declared liable for the damages by the court below.
- PSNC appealed the decision to the Court of Appeals, which then certified the case to the Supreme Court because the case involved only pure questions of law.
- The central issue was whether PSNC, as a common carrier, was liable for the loss of goods caused by a warehouse fire.
Facts of the Case
- On November 6, 1963, appellees loaded cargo on PSNC’s vessel FS-176 for transport from Manila to Pulupandan, Negros Occidental.
- Clara Uy Bico shipped 1,528 cavans of rice valued at P40,907.50; Amparo Servando shipped 44 cartons of colored paper, toys, and general merchandise valued at P1,070.50.
- Bills of lading were issued to evidence carriage of the cargoes.
- Upon arrival on November 18, 1963, the cargoes were unloaded in good order and transferred to the Bureau of Customs’ warehouse.
- Around 2:00 p.m. the same day, the warehouse was destroyed by fire of unknown origin, resulting in total loss of the cargoes, except for 907 cavans of rice already taken delivery of by Uy Bico.
- Appellees’ claims for reimbursement were refused by the appellant, leading to litigation.
Legal Issues Presented
- Whether the delivery of goods to the Bureau of Customs’ warehouse constituted actual or constructive delivery by the carrier under Article 1736 of the Civil Code.
- Whether the appellant, PSNC, had the duty to observe extraordinary diligence until actual or constructive delivery of goods to appellees.
- Whether the limitation clause in the bills of lading exempted the carrier from liability for loss caused by fire.
- Application of the law on fortuitous events (caso fortuito) or force majeure relieving a party from responsibility.
Lower Court’s Ruling
- The Court of First Instance held that delivery to the Bureau of Customs warehouse was not the delivery contemplated by law.
- Since the fire happened before actual or constructive delivery to the consignee, the carrier remained liable for the loss.
- Judgment was rendered ordering PSNC to pay Amparo Servando P1,070.50 and Clara Uy Bico P16,625.00, both with legal interest and costs.
Provisions of Law Relevant to the Case
- Article 1736, Civil Code: Common carriers must exercise extraordinary diligence from the time goods are unconditionally in their possession until actual or constructive delive