[G.R. No. L-37604. October 23, 1981.
EASTERN AND AUSTRALIAN STEAMSHIP CO., LTD. AND F.E.
ZUELLIG, INC., petitioners, vs. GREAT AMERICAN INSURANCE CO.
and COURT OF FIRST INSTANCE OF MANILA, BRANCH XIII,
respondents.
Facts:
Jackson and Spring (Sydney) Pty. Ltd. shipped from Sydney, Australia, one (1)
case of impellers for warman pump on board the SS "Chitral," a vessel owned
and operated in the Philippines by Eastern & Australian Steamship Co., Ltd., thru
its agent F.E. Zuellig, Inc. for delivery to Manila, Philippines in favor of consignee
Benguet Consolidated, Inc. The shipment was insured with Great American
Insurance, Co. for P35, 921.81 against all risks.
The SS "Chitral" arrived in Manila but failed to discharge the shipment or any part
thereof. Demand was made on Eastern and Australian Steamship for the delivery
of said shipment, but having failed to make delivery, a claim was presented
against them for the value of the shipment. They (Eastern) failed to make good
the claim. As a consequence of the loss of the shipment, private respondent
Great American Insurance Co. was compelled to pay the consignee. As
subrogee, said private respondent filed a complaint against herein petitioners for
recovery of the said amount with legal interest and attorney's fees.
Eastern and Australian Steamship alleged that their liability for the loss of the
shipment is only limited to 100 Sterling or its peso equivalent of P1,544.40 as per
stipulation in the Bill of Lading and that even before the filing of the complaint,
they have signified their willingness to pay the claim up to their limit of liability as
stipulated in the Bill of Lading.
During the pre-trial, the loss of the subject shipment was admitted, and the
parties submitted the case for decision on one issue: whether petitioners' liability
is limited to 100 Sterling or its peso equivalent of P1, 544.40 as stipulated in
Clause 17 of the Bill of Lading or whether petitioners' liability should be $500 or
its peso equivalent in the sum of P3, 217.50 pursuant to Sec. 4(5) of the Carriage
of Goods by Sea Act.
The court found that under Section 4 (5) of the Carriage of Goods by Sea
Act, the carrier and the shipper may, in the absence of a declaration in the Bill of
Lading of the value of the goods shipped, fix a maximum liability of the shipper
for the cargo lost or damaged, but such maximum shall not be less than $500.00
per package. Consequently, the agreement for a maximum liability of only 100
Sterling contained in Clause 17 of the Bill of Lading was declared void for being
contrary to law and as adverted to above, petitioners were held liable.
Issue: Whether or not the CFI erred in deciding that the limit of liability in the sum
of 100 Sterling (or its peso equivalent) of the vessel/ carrier, per package, as
stipulated in Clause 17 of the Bill of Lading, is contrary to law and therefore void.
Ruling: CFI is wrong. The liability as stated in the bill of lading is valid.
There is no inconsistency between Section 4 (5) of the Carriage of Goods by Sea
Act and Clause 17 of the Bill of Lading. The first part of the provision of Section 4
(5) of the Carriage of Goods by Sea Act limits the maximum amount that may be
recovered by the shipper in the absence of an agreement as to the nature and
value of goods shipped. Said provision does not prescribe the minimum and
hence, it could be any amount which is below $500.00. Clause 17 of the
questioned Bill of Lading also provides the maximum for which the carrier is
liable. It prescribes that the carrier may only be held liable for an amount not
more than 100 Sterling which is below the maximum limit required in the Carriage
of Goods by Sea Act.
It should be noted that both the Carriage of Goods by Sea Act and Clause 17 of
the Bill of Lading allow the payment beyond the respective maximum limit
imposed therein, provided that the value of the goods have been declared in the
Bill of Lading.
The second paragraph of Section 4 (5) of the Carriage of Goods by Sea Act
prescribing the maximum amount shall not be less than $500.00 refers to a
situation where there is an agreement other than that set forth in the Bill of
Lading providing for a maximum higher than $500.00 per package. In the case at
bar, it is apparent that there had been no agreement between the parties, and
hence, Clause 17 of the Bill of Lading shall prevail. By providing that $500.00 is
the maximum liability, the law does not disallow an agreement for liability at a
lesser amount.
Thus, in the case of Northern Motors, Inc. vs. Prince Line, We said:
"This Court has held as valid and binding a similar provision in a bill of lading
limiting the carrier's liability to a specific amount unless the shipper expressly
declares a higher valuation and pays the corresponding rate thereon."
Again, in Phoenix Assurance Company vs. Macondray & Co., Inc., We reiterated
the validity of a stipulation limiting the carrier's liability.
WHEREFORE, the decision of the court a quo is hereby reversed and another
one is entered finding petitioners liable to private respondent in the amount of
100 Sterling or its peso equivalent of P1, 544.40.
