Nedlloyd Lijnen B.V. Rotterdam v. Glow Laks Enterprises, Ltd., Case Digest

Posted

h5. G.R. No. 156330, November 19, 2014

Doctrine

For the common carrier to be discharged from contractual obligation, there must be surrender of bill of lading by the consignee or if not possible, the acknowledgement of the delivery by signing the delivery receipt.

Facts

Petitioner is a foreign corporation engaged in the business of carrying goods by sea, whose vessels regularly call at the port of Manila. It is doing business in the Philippines thru its local ship agent, co-petitioner East Asiatic Co., Ltd.

Respondent is likewise a foreign corporation organized and existing under the laws of Hong Kong. It is not licensed to do, and it is not doing business in, the Philippines.

Respondent loaded on board M/S Scandutch, at the Port of Manila a total 343 cartoons of garments, complete and in good order for pre-carriage to the Port of Hong Kong. The goods covered by Bills of Lading Nos. MHONX-2 and MHONX-3 arrived in good condition in Hong Kong and were transferred to M/S Amethyst for final carriage to Colon, Free Zone, Panama. Both vessels, M/S Scandutch and M/S Amethyst, are owned by petitioner represented in the Philippines by its agent, East Asiatic. The goods which were valued at US$53,640.00 was agreed to be released to the consignee, Pierre Kasem, International, S.A., upon presentation of the original copies of the covering bills of lading. Upon arrival of the vessel at the Port of Colon on 23 October 1987, petitioners purportedly notified the consignee of the arrival of the shipments, and its custody was turned over to the National Ports Authority in accordance with the laws, customs regulations and practice of trade in Panama. By an unfortunate turn of events, however, unauthorized persons managed to forge the covering bills of lading and on the basis of the falsified documents, the ports authority released the goods.

Petitioner filed a complaint against respondent. Respondent denied liability. They averred that they cannot be faulted for the release of the goods to unauthorized persons, their extraordinary responsibility as a common carrier having ceased at the time the possession of the goods were turned over to the possession of the port authorities.

The trial court ruled in favor of respondents. On appeal, the Court of Appeals reversed the ruling of the trial court. The trial court ruled that under the New Civil Code, the discharge of the goods into the custody of the ports authority therefore does not relieve the common carrier from liability because the extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has the right to receive them. Absent any proof that the notify party or the consignee was informed of the arrival of the goods, the appellate court held that the extraordinary responsibility of common carriers remains.

Contention of the parties

PETITIONER – They cannot be held liable for the loss of the shipments, their extraordinary responsibility having ceased at the time the goods were discharged into the custody of the customs arrastre operator, who in turn took complete responsibility over the care, storage and delivery of the cargoes. 28

RESPONDENT – The fact that the shipments were not delivered to the consignee as stated in the bill of lading or to the party designated or named by the consignee, constitutes misdelivery thereof, and under the law it is presumed that the common carrier is at fault or negligent if the goods they transportedfell into the hands of persons who have no right to receive them.

Issue:

WON the petitioner is liable for the misdelivery of goods to unauthorized persons (YES)

Ruling:

Under the New Civil Code, common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over goods, according to the circumstances of each case. In case of loss of goods in transit, the common carrier is presumed under the law to have been in fault or negligent.

Carrier may be relieved from the responsibility for loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee or to the person who has the right to receive them. There is actual delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his duly authorized agent and a reasonable time is given him to remove the goods.

In this case, there is no dispute that the custody of the goods was never turned over to the consignee or his agents but was lost into the hands of unauthorized persons who secured possession thereof on the strength of falsified documents. The loss or the misdelivery of the goods in the instant case gave rise to the presumption that the common carrier is at fault or negligent.

Moreover, the petitioners failed to prove that they exercise extraordinary negligence to rebut the presumption of negligence. Nothing in the law provides that the common carrier’s liability ceases upon the delivery to the Customs Authority.

Hence, the contract of carriage remains in full force and effect even after the delivery of the goods to the port authorities; the only delivery that releases it from their obligation to observe extraordinary care is the delivery to the consignee or his agents. Even more telling of petitioners’ continuing liability for the goods transported to the fact that the original bills of lading up to this time, remains in the possession of the notify party or consignee

Under Article 353 of the Code of Commerce:

p<>> “After the contract has been complied with, the bill of lading which the carrier has issued shall be returned to him, and by virtue of the exchange of this title with the thing transported, the respective obligations and actions shall be considered cancelled, unless in the same act the claim which the parties may wish to reserve be reduced to writing, with the exception of that provided for in Article 366.”

While surrender of the original bill of lading is not a condition precedent for the common carrier to be discharged from its contractual obligation, there must be, at the very least, an acknowledgement of the delivery by signing the delivery receipt, if surrender of the original of the bill of lading is not possible. There was neither surrender of the original copies of the bills of lading nor was there acknowledgment of the delivery in the present case. This leads to the conclusion that the contract of carriage still subsists and petitioners could be held liable for the breach thereof.

Petitioners could have offered evidence before the trial court to show that they exercised the highest degree of care and caution even after the goods was turned over to the custom authorities, by promptly notifying the consignee of its arrival at the Port of Cristobal in order to afford them ample opportunity to remove the cargoes from the port of discharge. Here, neither the consignee nor the notify party was informed by the petitioners of the arrival of the goods, a crucial fact indicative of petitioners’ failure to observe extraordinary diligence in handling the goods entrusted to their custody for transport.

Hence, petitioners are liable for misdelivery of goods.

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