Common carriers; extraordinary diligence; misdelivery of goods under Philippine laws.

"xxx.

Having settled the issue on the applicable Rule, we now resolve the issue of whether or not petitioners are liable for the misdelivery of goods under Philippine laws.

Under the New Civil Code, common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligencein the vigilance over goods, according to the circumstances of each case.23 Common carriers are responsible for loss, destruction or deterioration of the goods unless the same is due to flood, storm, earthquake or other natural disaster or calamity.24 Extraordinary diligence is that extreme care and caution which persons of unusual prudence and circumspection use for securing or preserving their own property or rights.25 This expecting standardimposed on common carriers in contract of carrier of goods is intended to tilt the scales in favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for the shipment.26 Hence, in case of loss of goods in transit, the common carrier is presumed under the law to have been in fault or negligent.27

While petitioners concede that, as a common carrier, they are bound to observe extraordinary diligence in the care and custody of the goods in their possession, they insist that 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 arrastreoperator, who in turn took complete responsibility over the care, storage and delivery of the cargoes.28

In contrast, respondent, submits that the fact that the shipments were not delivered to the consignee as statedin 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 transported, as in this case, fell into the hands of persons who have no right to receive them.

We sustain the position of the respondent.

Article 1736 and Article 1738 are the provisions in the New Civil Code which define the period when the common carrier is required to exercise diligence lasts, viz:

Article 1736. The extraordinary responsibility of the common carrier lasts from the time the goodsare unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of article 1738.

Article 1738. The extraordinary liability of the common carrier continues to be operative even during the time the goods are stored in a warehouse of the carrier at the place of destination, until the consignee has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove them or otherwise dispose of them.

Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the carrier.29 This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner exercises the right of stop page in transitu, and terminates only after the lapse of a reasonable time for the acceptance, of the goods by the consignee or such other person entitled to receive them.30

It was further provided in the samestatute that the 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.31 In sales, actual delivery has been defined as the ceding of the corporeal possession by the seller, and the actual apprehension of the corporeal possession by the buyer or by some person authorized by him to receive the goods as his representative for the purpose of custody or disposal.32 By the same token, 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.33

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.

A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported.34 When the goods shipped are either lost or arrived in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable.35 To overcome the presumption of negligence, the common carrier must establish by adequateproof that it exercised extraordinary diligence over the goods.36 It must do more than merely show that some other party could be responsible for the damage.37

In the present case, petitioners failed to prove that they did exercise the degree of diligence required by law over the goods they transported. Indeed, aside from their persistent disavowal of liability by conveniently posing an excuse that their extraordinary responsibility isterminated upon release of the goods to the Panamanian Ports Authority, petitioners failed to adduce sufficient evidence they exercised extraordinary care to prevent unauthorized withdrawal of the shipments. Nothing in the New Civil Code, however, suggests, even remotely, that the common carriers’ responsibility over the goods ceased upon delivery thereof to the custom authorities. To the mind of this Court, 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. Explicit on this point is the provision of Article 353 of the Code of Commerce which provides:

Article 353. The legal evidence of the contract between the shipper and the carrier shall be the bills of lading, by the contents of which the disputes which may arise regarding their execution and performance shall be decided, no exceptions being admissible other than those of falsity and material error in the drafting.

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.

In case the consignee, upon receiving the goods, cannot return the bill of lading subscribed by the carrier, because of its loss or of any other cause, he must give the latter a receiptfor the goods delivered, this receipt producing the same effects as the return of the bill of lading.

While surrender of the original bill of lading is not a condition precedent for the common carrier to bedischarged 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.38 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 P01i of Cristobal in order to afford them ample opportunity to remove the cargoes from the port of discharge. We have scoured the records and found that neither the consignee nor the notify paiiy 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. They could have presented proof to show that they exercised extraordinary care but they chose in vain, full reliance to their cause on applicability of Panamanian law to local jurisdiction. It is for this reason that we find petitioners liable for the misdelivery of the goods. It is evident from the review of the records and by the evidence adduced by the respondent that petitioners failed to rebut the prima facie presumption of negligence. We find no compelling reason to depa1i from the ruling of the Court of Appeals that under the contract of carriage, petitioners are liable for the value of the misdelivcred goods.

Xxx."


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

NEDLLOYD LIJNEN B.V. ROTTERDAM and THE EAST ASIATIC CO., LTD., Petitioners,
vs.
GLOW LAKS ENTERPRISES, LTD., Respondent.

https://lawphil.net/judjuris/juri2014/nov2014/gr_156330_2014.html