Eastern Shipping Lines vs.

CA, 234 SCRA 781

Vitug, J:

Facts: On December 4, 1981, two fiber drums of riboflavin were shipped from
Yokohama Japan for deliver vessel “SS Eastern Comet” owned by Eastern Shipping
Lines. It was insured under plaintiff’s Marine Insurance Policy. Upon arrival of the
shipment in Manila, it was discharged unto the custody of Metro Port Service. One
drum was in bad order, and the plaintiff was not informed. Metro Port Service delivered
the shipment to Allied Brokerage Corporation. Allied Brokerage Corp. received the
same and the seal of one drum was opened. The Allied Brokerage delivered the
shipment to the consignee’s warehouse. The latter excepted to one drum which
contained spillages while the rest of the contents was adulterated/fake. Damage
amounted to 19,032.00. Plaintiff was obliged to pay the consignee under the marine
insurance policy.

Plaintiff now subrogated all rights of action of the consignee against the
defendants.

Eastern Shipping Lines allegation: (carrier) The shipment was discharged in good
order from the vessel unto the custody of Metro Port Service so that any damage
it incurred after the same occurred when it was turned over to the latter, thus it
has no liability.

Metro Port Services allegation: (arrastre service) when they received the
shipment, it was already in bad order.

Allied Brokerage allegation: (broker) Plaintiff has no cause of action against

them as it was not negligent or at fault and the shipment were already
damaged when it reached them. It also raise that they exercised extra ordinary
diligence in the handling/delivery of the cargo.

Appellate court ruled that only Metro Port Services and Eastern Shipping Lines should be
held liable as provided in Art. 1737 of the NCC, the common carrier’s duty is to observe
extraordinary diligence in the vigilance of goods remains in full force and effect even if
the goods are temporarily unloaded and stored in transit in the warehouse of the carrier
at the place of destination until the consignee has been advised and has had
reasonable opportunity to remove or dispose of the goods.

Appellate court imposed a 12% per annum interest on the amount of 19,032 from
October 1, 1982 as well as award of Attorney’s fees. Thus, this petition.

RELEVANT ISSUES (AS TO SYLLABUS):

1. WON CA ERRED IN HOLDING PETITIONER CARRIER JOINTLY AND SEVERALLY

LIABLE WITH THE ARRASTRE OPERATOR AND CUSTOMS BROKER FOR THE CLAIM
OF PRVIATE RESPONDENT AS GRANTED BY THE CA. – NO.

2. WON THE GRANT OF INTEREST ON THE CLAIM OF THE PRIVATE RESPONDENT

SHOULD COMMENCE FROM THE DATE OF THE FILING OF THE COMPLAINT AT THE
RATE OF TWELVE PERCENT PER ANNUM INSTEAD OF FROM THE DATE OF THE
DECISION OF THE TRUAL COURT AND ONLY AT THRATE OF SIX PERCENT PER
ANNUM
RULING: PETITION IS PARTLY GRANTED.

1.) The Supreme Court rules that Eastern Shipping (carrier) and Metro Port
(arrastre) are liable in solidum. It is the common carrier’s duty to exercise
requisite diligence in the shipment of the goods until it is delivered to its
recipient. There is presumption that when there is a damaged good, the
carrier did not observe the diligence required and there need not an express
finding to hold it liable. Arrastre is also liable as there exists a legal relationship
between the consignee and the arrastre operator akin to a depositor and a
warehouseman. Arrastre has the duty to take good care of the goods in its
custody and deliver it in good condition to the consignee, therefore there
exists a presumption of liability on his part as same as to the common carrier.
Therefore CA correctly held that carrier and arrastre had successive
possession of the shipment and they failed to rebut the presumption of fault
on their part.

2.) The Supreme Court held that the 12 percent only applies to interest imposed
upon loans, forbearance of any money, and in cases were loans are involved
in judgment. Thus, it is 6 % that is applied in this judgment. As to the damages,
the 6 percent will start from the finality of the decision. As to the obligation of
19k, interest will be imposed from the time the complaint was filed.