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REGIONAL CONTAINER LINES (RCL) OF EDSA SHIPPING AGENCY, Petitioners, -
versus - THE
NETHERLANDS INSURANCE CO. (
Respondent. |
G.R.
No. 168151
Present: QUISUMBING,
J.,
Chairperson,
CARPIO-MORALES, BRION, DEL CASTILLO, and ABAD, JJ. Promulgated: September 4, 2009 |
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D E C I S I O N
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BRION, J.: |
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For our resolution is the petition for
review on certiorari filed by petitioners Regional Container Lines of
Singapore (RCL) and EDSA Shipping Agency (EDSA Shipping) to annul
and set aside the decision[1] and resolution[2] of the Court of Appeals (CA)
dated
RCL is
a foreign corporation based in
FACTUAL ANTECEDENTS
The pertinent
facts, based on the records are summarized below.
On
To insure the cargo against loss and
damage, Netherlands Insurance issued a Marine Open Policy in favor of Temic, as
shown by MPO-21-05081-94 and Marine Risk Note MRN-21 14022, to cover all
losses/damages to the shipment.
On
On P1,036,497.00 under the
terms of the Marine Open Policy. Temic then executed a loss and subrogation
receipt in favor of Netherlands Insurance.
Seven
months from delivery of the cargo or on June 4, 1996, Netherlands Insurance
filed a complaint for subrogation of insurance settlement with the Regional
Trial Court, Branch 5, Manila, 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.[4] The complaint was docketed as Civil Case No.
96-78612.
Netherlands Insurance amended the
complaint on
TMS
filed its answer to the original complaint. RCL and EDSA Shipping filed their
answers with cross-claim and compulsory counterclaim to the second amended
complaint. U-Ocean likewise filed an answer with compulsory counterclaim and
cross-claim. During the pendency of the case, U-Ocean, jointly with U-Freight
Singapore, filed another answer with compulsory counterclaim. Only Pacific
Eagle and TMS filed their answers to the third amended complaint.
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.
After Netherlands Insurance had made its
formal offer of evidence, the defendants including RCL and EDSA Shipping sought
leave of court to file their respective motions to dismiss based on demurrer to
evidence.
RCL
and EDSA Shipping, in their motion, insisted that Netherlands Insurance had (1)
failed to prove any valid subrogation, and (2) failed to establish that any
negligence on their part or that the loss was sustained while the cargo was in
their custody.
On
Netherlands
Insurance seasonably appealed the order of dismissal to the CA.
On
WHEREFORE,
in view of the foregoing, the dismissal
of the complaint against defendants Regional Container Lines and Its local
agent, EDSA Shipping Agency, is REVERSED
and SET ASIDE. The dismissal of the complaint against the other defendants
is AFFIRMED. Pursuant to Section 1, Rule 33 of the 1997 Rules of Civil
Procedure, defendants Regional Container Lines and EDSA Shipping Agency are
deemed to have waived the right to present evidence.
As such, defendants Regional Container Lines and EDSA Shipping
Agency are ordered to reimburse plaintiff in the sum of P1,036,497.00
with interest from date hereof until fully paid.
No
costs.
SO ORDERED. [Emphasis
supplied.]
The CA dismissed Netherland Insurance’s complaint
against the other defendants after finding that the claim had already been
barred by prescription.[5]
Having
been found liable for the damage to the cargo, RCL and EDSA Shipping filed a
motion for reconsideration, but the CA maintained its original conclusions.
The
sole issue for our resolution is whether
the CA correctly held RCL and EDSA Shipping liable as common carriers under the
theory of presumption of negligence.
THE
COURT’S RULING
The
present case is governed by the following provisions of the Civil Code:
ART.
1733. Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe
extraordinary diligence in the vigilance over the goods and for the safety
of the passengers transported by them according to all the circumstances of
each case.
Such extraordinary
diligence in the vigilance over the goods is further expressed in articles
1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for
the safety of the passengers is further set forth in articles1755 and 1756.
ART. 1734. Common carriers are responsible for the loss,
destruction, or deterioration of the goods, unless the same is due to any of
the following causes only:
1) Flood, storm, earthquake, lightning, or other
natural disaster or calamity;
2) Act of the public enemy in war, whether
international or civil;
3) Act of omission of the shipper or owner of the
goods;
4) The character of the goods or defects in the
packing or in the containers;
5) Order or act of competent public authority.
ART. 1735. In all cases
other that those mentioned in Nos. 1, 2, 3, 4 and 5 of the preceding article, if
the goods are lost, destroyed, or deteriorated, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that they
observed extraordinary diligence as required by article 1733.
ART.
1736. The extraordinary responsibility of the common
carrier lasts from the time the goods are unconditionally placed in the
possession of, and received by the carrier for transportation until the sane
are delivered, actually or constructively, by the carrier to the consignee, or
to the person who has a right to receive them, without prejudice to the
provisions of articles 1738.
ART. 1738. The
extraordinary liability of the common carrier continues to be operative even
during the time the goods are stored in a warehouse of the carrier at the place
of destination, until the consignee has been advised of the arrival of the
goods and has had reasonable opportunity thereafter to remove them or otherwise
dispose of them.
ART. 1742. Even if the
loss, destruction, or deterioration of the goods should be caused by the
character of the goods, or the faulty
nature of the packing or of the containers, the common carrier must exercise
due diligence to forestall or lessen the loss.
In Central Shipping Company, Inc. v. Insurance
Company of North America,[6] we 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.[7]
In the present case, 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. Thus, RCL and EDSA Shipping seek to lay the blame
at the feet of other parties.
We do not find the arguments of RCL
and EDSA Shipping meritorious.
A common
carrier is presumed to have been negligent if it fails to prove that it
exercised extraordinary vigilance over the goods it transported.[8] 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.[9]
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.[10]
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;[11] RCL and EDSA Shipping failed to dispute this.
RCL and EDSA Shipping could have offered evidence
before the trial court to show that the damage to the condenser fan did not
occur: (1) while the cargo was in transit; (2) while they were in the act of
discharging it from the vessel; or (3) while they were delivering it actually
or constructively to the consignee. They
could have presented proof to show that they exercised extraordinary care and
diligence in the handling of the goods, but they opted to file a demurrer to
evidence. As the order granting their
demurrer was reversed on appeal, the CA correctly ruled that they are deemed to
have waived their right to present evidence,[12]
and the presumption of negligence must stand.
It is for this reason as well that we find RCL and EDSA Shipping’s claim that the loss or damage to the cargo was caused by a defect in the packing or in the containers. To exculpate itself from liability for the loss/damage to the cargo under any of the causes, the common carrier is burdened to prove any of the causes in Article 1734 of the Civil Code claimed by it by a preponderance of evidence. If the carrier succeeds, the burden of evidence is shifted to the shipper to prove that the carrier is negligent.[13] RCL and EDSA Shipping, however, failed to satisfy this standard of evidence and in fact offered no evidence at all on this point; a reversal of a dismissal based on a demurrer to evidence bars the defendant from presenting evidence supporting its allegations.
WHEREFORE, we DENY the petition for review on certiorari filed by the Regional
Container Lines of Singapore and EDSA Shipping Agency. The decision of the
Court of Appeals dated
SO
ORDERED.
ARTURO D. BRION
Associate Justice
WE
CONCUR:
LEONARDO A.
QUISUMBING
Associate
Justice Chairperson |
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CONCHITA
CARPIO-MORALES Associate
Justice |
MARIANO C. Associate Justice |
ROBERTO A. ABAD
Associate
Justice
ATTESTATION
I attest that the conclusions in the
above Decision had been reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
LEONARDO
A. QUISUMBING
Associate Justice
Chairperson
CERTIFICATION
REYNATO
S. PUNO
Chief Justice
[1]
Penned
by Associate Justice Arcangelita M. Romilla-Lontok, and concurred in by
Associate Justice Martin S. Villarama, Jr., and Associate Justice Danilo B.
Pine (retired); rollo, pp. 40, 45-53.
[2]
[3] U-Freight
issued its own Bill of Lading No. SINMNL 048/10/95 covering the cargo.
[4] TMS was
actually the local agent of Pacific Eagle.
[5] The bill of
lading issued by U-Freight provided that its liability shall be discharged
“unless a suit is brought in the proper forum and written notice thereof
received by the carrier within nine (9) months after the delivery of the
goods.” By the time U-Freight, U-Ocean,
and Pacific Eagle were impleaded in the amended complaints, the period to file
claims had already lapsed.
[6] G.R. 150751,
[7] Ibid,
citing Asia Lighterage and Shipping, Inc.
v. Court of Appeal, 409 SCRA 340 (2003), and Delsan Transport Lines, Inc. v. Court of Appeals, 369 SCRA 24
(2001).
[8] Edgar Cokaliong Shipping Lines, Inc. v. UCPB
General Insurance Company, Inc., G.R. No. 146018, June 25, 2003, 404 SCRA
706.
[9] DSR-Senator Lines v. Federal Phoenix
Assurance Co., Inc., G.R. No. 135377, October 7, 2003, 413 SCRA 14, citing Eastern Shipping Lines, Inc. v. Court of
Appeals, 234 SCRA 78 (1994) and cases cited therein.
[10] Aboitiz
Shipping Corporation v. Insurance Company of North America, G.R. No.
168402, August 6, 2008; Calvo v. UCPB
General Insurance Co., Inc., G.R. No. 148896, March 19, 2002, 379 SCRA 510.
[11] Philippines First Insurance Co., Inc. v.
Wallem Phils. Shipping, Inc., G.R. No. 165647,
[12] RULES OF COURT,
RULE 33. SEC. 1. Demurrer to evidence.- After
the plaintiff has completed the presentation of his evidence, the defendant may
move for dismissal right to relief. If his motion is denied, he shall have the
right to present evidence. If the
motion is granted but on appeal the order of dismissal is reversed he shall be
deemed to have waived the right to present evidence.
[13] Philippine Charter Insurance Corporation v.
M/V National Honor, G.R. No. 161833,