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SEA-LAND SERVICE v. CA

FACTS:

Philippine Home Assurance Corporation (Assurance) filed a case against Donmac Corporation (Donmac), E. Rason, Inc. (E. Rason), Reyma Brokerage, Inc. (Reyma), and Sea-Land Services, Inc. (Sea-Land) in the Court of First Instance of Manila. Assurance sought to recover P66,289.29 as the subrogee of the assured-consignee, Republic Flour Mills (RFM). The claim was for the loss or damage suffered by RFM's shipment, which the defendants had refused to pay. Assurance paid this amount to RFM and later reduced the original claim to P30,980.04 after some of the lost items were found.

Donmac was identified as the carrier, Sea-Land as its ship agent, E. Razon as the arrastre contractor, and Reyma as the consignee's broker. Following the trial, the Court of First Instance ruled that Donmac and Sea-Land should pay Assurance P20,253.36 with interest. In addition, the court dismissed Sea-Land's counterclaim. Dissatisfied, Sea-Land brought an appeal to the Court of Appeals, which upheld the previous decision. Se-Land then brought a petition for certiorari to the Supreme Court.

ISSUES:

  1. Whether or not the petitioner is discharged from its responsibility over the shipment and there was a constructive delivery to the consignee

  2. Whether the petitioner had been relieved of its obligations under the Bill of Lading when it "devaned" the cargo.

  3. Whether the carrier has the authority to devan the goods from the container without the consent of the consignee or the Bureau of Customs.

RULING:

  1. The Court of Appeals dismissed the claim of the petitioner on the ground that it was raised for the first time on appeal and therefore considered as waived. The complaint filed by Assurance as a subrogee was to collect damages from the defendants for the short-landing and damages to the cargo while in their custody. The petitioner claimed that the "devanning" of the insured cargo took place after due notice was given to the consignee and after the latter failed to claim the cargo. The court held that while the petitioner did not specifically cite the provisions of the Bill of Lading, it is not required to specify the provisions of the law or contract relied upon and that the rules on appellate procedure do not prevent the parties from putting up additional grounds to support their position. Moreover, Assurance failed to object when the Bill of Lading was presented in evidence.

  2. The petition is granted. The Court held that the petitioner has been relieved of its obligations under the Bill of Lading when it "devaned" the cargo. The carrier has the authority to devan the goods from the container without the prior consent of the consignee or the Bureau of Customs.

PRINCIPLES:

  • Parties are not allowed to change theories or shift positions in the appellate court. They must keep within the issues stated in their pleadings or the theories on which the causes of action in the trial court were predicated.

  • A party is not required to specify the provisions of the law or contract relied upon. The rules only require the allegations of the ultimate facts.

  • The rules on appellate procedure do not prevent the parties from putting up additional grounds to support their position.

  • When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings.

  • The carrier may appoint a stevedore or any other person to unload and take delivery of the goods, and delivery from the ship's tackle shall be considered complete, thereby terminating the carrier's responsibility.

  • When possession of the goods is received or taken by the customs or other authorities or by any operator of any facility, such authority or person shall be considered as having received possession and delivery of the goods solely as agent of and on behalf of the shipper and consignee.

  • If the consignee does not take possession or delivery of the goods as soon as they are at their disposal for removal, the goods shall be at their own risk and expense, and the carrier may send the goods to store, warehouse, put them in possession of authorities, or otherwise dispose of them, always at the risk and expense of the goods.

  • The shipper and consignee shall indemnify the carrier for any loss, damage, fine, charge, or expense incurred in dealing with or disposing of the goods or due to the consignee's failure or delay in taking possession and delivery.

  • A person is liable for the damages caused by his own negligence or fault. (Civil Code, Article 2176)

  • In case of breach of contract, the party who fails to comply with his obligations is liable to pay damages. (Civil Code, Article 1167)

  • Actual or compensatory damages may be awarded to the injured party to cover the actual loss or injury suffered. (Civil Code, Article 2199)

  • Moral damages may be awarded to the injured party to compensate for physical suffering, mental anguish, fright, serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation, and similar injury. (Civil Code, Article 2217)

  • Exemplary or corrective damages may be awarded in addition to actual or compensatory damages, but only if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner. (Civil Code, Article 2229)