REGIONAL CONTAINER LINES (RCL) OF SINGAPORE and EDSA
SHIPPING AGENCY, petitioners, vs. THE NETHERLANDS INSURANCE CO. (PHILIPPINES),
INC., respondentG.R. No. 168151 | September 4, 2009
FACTS:
On October 20, 1995, 405 cartons of Epoxy Molding Compound
were consigned to be shipped from Singapore to Manila for Temic Telefunken
Microelectronics Philippines. U-Freight Singapore, a forwarding agent based in
Singapore, contracted the services of Pacific Eagle to transport the subject
cargo. The cargo was packed, stored, and sealed by Pacific Eagle in its
Refrigerated Container. As the cargo was highly perishable, the inside of the
container had to be kept at a temperature of 0 degree Celsius. Pacific Eagle
then loaded the refrigerated container on board the M/V Piya Bhum, a vessel
owned by RCL, with which Pacific Eagle had a slot charter agreement. RCL duly
issued its own Bill of Lading in favor of Pacific Eagle.
On October 25, 1995, the M/V Piya Bhum docked in Manila.
After unloading the refrigerated container, it was plugged to the power
terminal of the pier to keep its temperature constant. Fidel Rocha,
Vice-President for Operations of Marines Adjustment Corporation, accompanied by
two surveyors, conducted a protective survey of the cargo. They found that
based on the temperature chart, the temperature reading was constant from
October 18, 1995 to October 25, 1995 at 0 degree Celsius. However, at midnight
of October 25, 1995 when the cargo had already been unloaded from the ship, the
temperature fluctuated with a reading of 33 degree Celsius. Rocha believed the
fluctuation was caused by the burnt condenser fan motor of the refrigerated
container.
On November 9, 1995, Temic received the shipment. It found
the cargo completely damaged.
Netherlands Insurance filed a complaint for subrogation of
insurance settlement against “the
unknown owner of M/V Piya Bhum” and TMS Ship Agencies (TMS), the latter thought
to be the local agent of M/V Piya Bhum’s unknown owner.
Netherlands Insurance amended the to implead EDSA Shipping, RCL, Eagle Liner
Shipping Agencies, U-Freight Singapore, and U- Ocean Inc., as additional defendants. A third
amended complaint was later made, impleading Pacific Eagle in substitution of Eagle
Liner Shipping Agencies.
The defendants all disclaimed liability for the damage
caused to the cargo, citing several reasons why Netherland Insurance’s claims
must be rejected. Specifically, RCL and EDSA Shipping denied negligence in the
transport of the cargo; they attributed any negligence that may have caused the
loss of the shipment to their co-defendants. They likewise asserted that no
valid subrogation exists, as the payment made by Netherlands Insurance to the
consignee was invalid. By way of affirmative defenses, RCL and EDSA Shipping
averred that the Netherlands Insurance has no cause of action, and is not the
real party-in-interest, and that the claim is barred by laches/prescription.
The trial court dismissed the Civil Case. The trial court ruled
that while there was valid subrogation, the defendants could not be held liable
for the loss or damage, as their respective liabilities ended at the time of
the discharge of the cargo from the ship at the Port of Manila.
The CA reversed the dismissal of the complaint against RCL
and Edsa Shipping Agency.
RCL and EDSA Shipping disclaim any responsibility for the
loss or damage to the goods in question. They contend that the cause of the
damage to the cargo was the “fluctuation of the temperature in the reefer van,”
which fluctuation occurred after the cargo had already been discharged from the
vessel; no fluctuation, they point out, arose when the cargo was still on board
M/V Piya Bhum. As the cause of the damage to the cargo occurred after the same
was already discharged from the vessel and was under the custody of the
arrastre operator (International Container Terminal Services, Inc. or ICTSI),
RCL and EDSA Shipping posit that the presumption of negligence provided in
Article 1735 of the Civil Code should not apply. What applies in this case is
Article 1734, particularly paragraphs 3 and 4 thereof, which exempts the
carrier from liability for loss or damage to the cargo when it is caused either
by an act or omission of the shipper or by the character of the goods or
defects in the packing or in the containers.
ISSUE:
whether the CA correctly held RCL and EDSA Shipping liable
as common carriers under the theory of presumption of negligence
RULING:
In Central Shipping Company, Inc. v. Insurance Company of North
America, the Court reiterated the rules for the liability of a common carrier
for lost or damaged cargo as follows:
(1)
Common carriers are bound to observe
extraordinary diligence over the goods they transport, according to all the
circumstances of each case;
(2)
In the event of loss, destruction, or
deterioration of the insured goods, common carriers are responsible, unless
they can prove that such loss, destruction, or deterioration was brought about
by, among others, “flood, storm, earthquake, lightning, or other natural
disaster or calamity”; and
(3)
In all other cases not specified under Article
1734 of the Civil Code, common carriers are presumed to have been at fault or
to have acted negligently, unless they observed extraordinary diligence.
A common carrier is presumed to have been negligent if it
fails to prove that it exercised extraordinary vigilance over the goods it
transported. When the goods shipped are either lost or arrived in damaged
condition, a presumption arises against the carrier of its failure to observe
that diligence, and there need not be an express finding of negligence to hold
it liable.
To overcome the presumption of negligence, the common
carrier must establish by adequate proof that it exercised extraordinary
diligence over the goods. It must do more than merely show that some other
party could be responsible for the damage.
In the present case, RCL and EDSA Shipping failed to prove
that they did exercise that degree of diligence required by law over the goods
they transported. Indeed, there is sufficient evidence showing that the
fluctuation of the temperature in the refrigerated container van, as recorded
in the temperature chart, occurred after the cargo had been discharged from the
vessel and was already under the custody of the arrastre operator, ICTSI. This
evidence, however, does not disprove that the condenser fan ·which caused the
fluctuation of the temperature in the refrigerated container was not damaged
while the cargo was being unloaded from the ship. It is settled in maritime law
jurisprudence that cargoes while being unloaded generally remain under the
custody of the carrier, RCL and EDSA Shipping failed to dispute this.
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