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TRANSPORTATION |CASE DIGESTS
Southern Lines, Inc. v. CAJanuary 31, 1962
De Leon, J.
SUMMARY:The city of Iloilo bought rice from NARIC whichwas shipped through the Southern Lines, Inc. Iloilo paid forthe entire shipping cost. When the goods arrived in Iloilo,there was shortage in the number of sacks, hence, Iloilofiled a case for the recovery of the amount representingthe value of the shortage of the shipment of rice. The CFIand CA absolved NARIC and ordered Southern to pay. Oneof the defenses of Southern was that it was exempt fromliability because the shortage was on account of the badcondition of the sacks. The SC affirmed the lower courtsand held southern liable.
DOCTRINE: if the fact of improper packing is known to thecarrier or his servants, or apparent upon ordinary
observation, but it accepts the goods notwithstanding such
condition, it is not relieved of liability for loss or injury
resulting thereform.
FACTS:- The City of Iloilo requisitioned for rice from the
National Rice and Corn Corporation (hereafter
referred to as NARIC) in Manila
- NARIC, pursuant to the order, shipped the rice
consigned to the City of Iloilo on board the SS
"General Wright" belonging to the Southern Lines,
Inc.
o Total no. of sacks - 1,726
o Total weight 129, 450 kilos
o Cost of shipment paid by Iloilo P63,115.50
- When Iloilo received the rice, it noted at the foot of
the bill of lading that it received only 1, 685 sacks or
116, 131 kilos.
o Shortage: 41 sacks = 13, 319 kilos = P6,
486.35
o Iloilo filed a case before the CFI against NARIC
and Southern for the recovery of the amount
of P6, 486.35.
- CFI: absolved NARIC, Southern to pay P4,931.41
which is the difference between the sum of
P6,486.35 and P1,554.94 representing the latter's
counterclaim for handling and freight.
- CA affirmed
ISSUES: whether or not the defendant-carrier, the hereinpetitioner, is liable for the loss or shortage of the riceshippedRULING: Yes, Southern is liable.
RATIO:
Applicable Laws
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The Court applied arts. 3611 and 3622 of the Code of
Commerce and quoted Government v. Ynchausti and Co. in
its application:
Under the provisions of Article 361, the defendant-
carrier in order to free itself from liability, was onlyobliged to prove that the damages suffered by the
goods were "by virtue of the nature or defect of the
articles." Under the provisions of Article 362, the
plaintiff, in order to hold the defendant liable, was
obliged to prove that the damages to the goods by
virtue of their nature, occurred on account of its
negligence or because the defendant did not take
the precaution adopted by careful persons.
Southern not exempt from liability
1ART. 361. The merchandise shall be transported at the risk andventure of the shipper, if the contrary has not been expresslystipulated.
As a consequence, all the losses and deteriorations whichthe goods may suffer during the transportation by reason offortuitous event, force majeure, or the inherent nature and defectof the goods, shall be for the account and risk of the shipper.
Proof of these accidents is incumbent upon the carrier2ART. 362. Nevertheless, the carrier shall be liable for the lossesand damages resulting from the causes mentioned in thepreceding article if it is proved, as against him, that they arosethrough his negligence or by reason of his having failed to take the
precautions which usage his establisbed among careful persons,unless the shipper has committed fraud in the bill of lading,representing the goods to be of a kind or quality different fromwhat they really were.
If, notwithstanding the precautions referred to in thisarticle, the goods transported run the risk of being lost, on accountof their nature or by reason of unavoidable accident, there beingno time for their owners to dispose of them, the carrier mayproceed to sell them, placing them for this purpose at the disposalof the judicial authority or of the officials designated by specialprovisions.
Southern: claims exemption on liability on the ground that
he shortage in the shipment of rice was due to such factors
as the shrinkage, leakage or spillage of the rice on account
of the bad condition of the sacks at the time it received the
same and the negligence of the agents of respondent City of
Iloilo in receiving the shipment.
Court:
- if the fact of improper packing is known to the
carrier or his servants, or apparent upon ordinary
observation, but it accepts the goods
notwithstanding such condition, it is not relieved of
liability for loss or injury resulting thereform.
- According to the CA: Southern itself frankly admitted
that the strings that tied the bags of rice were
broken; some bags were with holes and plenty of rice
were spilled inside the hull of the boat, and that the
personnel of the boat collected no less than 26 sacks
of rice which they had distributed among
themselves.
- The shortage was due to Southerns negligence.
City of Iloilo not precluded from filing a claim
Southern: Invoking art. 366 of the code of commerce andciting 2 cases (Government v. Ynchausti & Co., Triton
Insurance Co. v. Jose) argues that the requirement that the
claim for damages must be made within 24 hours from
delivery is a condition precedent to the accrual of the right
of action to recover damages.
Court:
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- The 2 cases cited are not applicable to the case at
bar:
o In Ynchausti the plaintiff never presented
any claim before filing an action
o In Triton there was payment of
transportation charges which precludes the
presentation of any claim against the carrier.
- In the American case of ofHoye v. Pennsylvania
Railroad Co. it was stated that:
such a stipulation (referring to the stipulation in the
contract requiring the owner of goods to present
claim at a specified time) is more in the nature of a
limitation upon the owner's right to recovery, andthat the burden of proof is accordingly on the carrier
to show that the limitation was reasonable and in
proper form or within the time stated.
- Case at bar:
o Southern failed to plead this defense in its
answer to the complaint and is therefore
deemed waived.
o The present action is for the refund of theamount paid in excess and not for damages
or recovery of the shortage. Iloilo paid for the
entire value of 1726 sacks.
o The bill of lading does not limit the time for
filing an action for the refund of the money
paid in excess.
DISPOSITIVE: CA affirmed.