Thursday, February 23, 2012

Sea-Land Service, Inc. v. Intermediate Appellate Court (153 SCRA 552 )

Facts: Sea-Land, a foreign shipping and forwarding company licensed to do business in the Philippines, received from Sea-borne Trading Company in California, a shipment consigned to Sen Hiap Hing, the business name used by Cue. The shipper not having declared the value of the shipment , no value was indicated in the bill of lading. The shipment was discharged in Manila, and while awaiting transshipment to Cebu, the cargo was stolen and never recovered. 

The trial court sentenced Sea-Land to pay Cue P186,048 representing the Philippine currency value of the lost cargo, P55, 814 for unrealized profit and P25,000 for attorney’s fees. CA affirmed the trial court’s decision. 

Issue: Whether or not Sea-Land is liable to pay Cue. 

Held: There is no question of the right of a consignee in a bill of lading to recover from the carrier or shipper for loss of, or damage to, goods being transported under said bill, although that document may have been drawn up only by the consignor and the carrier without the intervention of the consignee. 

Since the liability of a common carrier for loss of or damage to goods transported by it under a contract of carriage os governed by the laws of the country of destination and the goods in question were shipped from the United States to the Philippines, the liability of Sea-Land has Cue is governed primarily by the Civil Code, and as ordained by the said Code, supplementary, in all matters not cluttered thereby, by the Code of Commerce and special laws. One of these supplementary special laws is the Carriage of goods by Sea Act (COGSA), made applicable to all contracts for the carriage by sea to and from the Philippines Ports in Foreign Trade by Comm. Act. 65. 

Even if Section 4(5) of COGSA did not list the validity and binding effect of the liability limitation clause in the bill of lading here are fully substantial on the basis alone of Article 1749 and 1750 of the Civil Code. The justices of such stipulation is implicit in its giving the owner or shipper the option of avoiding accrual of liability limitation by the simple expedient of declaring the value of the shipment in the bill of lading. 

The stipulation in the bill of lading limiting the liability of Sea-Land for loss or damages to the shipment covered by said rule to US$500 per package unless the shipper declares the value of the shipment and pays additional charges is valid and binding on Cue.

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