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MARITIME AGENCIES v. CA

FACTS:

Transcontinental Fertilizer Company of London chartered the motor vessel "Hongkong Island" from Hongkong Island Shipping Company of Hongkong for the shipment of bagged urea from Ukraine to the Philippines. The shipment was for the account of Atlas Fertilizer Company. The vessel arrived in Manila and unloaded part of the cargo, then proceeded to Cebu to discharge the rest of the cargo. The consignee filed formal claims against Maritime Agencies & Services, Inc. for shortlanded bags and against Viva Customs Brokerage for net unrecovered spillage. The claims were rejected, and the consignee went to Union Insurance Society of Canton, Ltd. for indemnity. Union filed a complaint for reimbursement against Hongkong Island Company, Ltd., Maritime Agencies and Services, Inc., and later amended to implead Macondray Company, Inc. as a new defendant. The trial court held the defendants liable, but the Court of Appeals modified the decision, exempting Hongkong Island Company, Ltd. from any liability. Maritime and Union filed separate motions for reconsideration, which were both denied. They appealed to the Supreme Court.

ISSUES:

  1. Whether the vessel can be held liable for the damage or loss of the cargo.

  2. Whether the one-year prescriptive period applies to the filing of the claim.

  3. Whether or not Maritime Agencies & Services, Inc. (Maritime) can be held solidarily liable with Transcontinental for the losses/damages to the cargo outside the custody of the vessel.

  4. Whether or not the appealed decision is final as to Hongkong Island Co., Ltd. and Macondray & Co., Inc.

RULING:

  1. The vessel can be held liable for the damage or loss of the cargo. The bags were in good order when received in the vessel, and the presumption is that they were damaged or lost during the voyage as a result of their negligent or improper stowage. Therefore, the ship owner should be held liable.

  2. The one-year prescriptive period applies to the filing of the claim. The Carriage of Goods by Sea Act, specifically Section 3(6), provides that the carrier and the ship shall be discharged from all liability unless suit is brought within one year after delivery of the goods or the date when the goods should have been delivered. The period for filing the claim should commence on the date when the last item was delivered to the consignee.

  3. Maritime cannot be held solidarily liable with Transcontinental for the losses/damages to the cargo outside the custody of the vessel. Maritime acted as a mere charterer's agent in supervising the unloading of the cargo, representing the charterer and not the vessel.

  4. The appealed decision is not final as to Hongkong Island Co., Ltd. and Macondray & Co., Inc. They were formally impleaded as respondents and they discussed their position in their memorandum. The issues raised by them can be considered in the interest of justice.

PRINCIPLES:

  • Under American jurisprudence, a common carrier undertaking to carry a special cargo or chartered to a special person only becomes a private carrier. As a private carrier, a stipulation exempting the owner from liability for the negligence of its agent is valid and not against public policy.

  • The provisions of the Civil Code on common carriers should not be applied if the carrier is acting as a private carrier. The strict public policy governing common carriers has no force where the public at large is not involved.

  • The one-year prescriptive period under the Carriage of Goods by Sea Act applies to claims for loss or damage to goods. This period prevails over the general provisions of the Civil Code on prescription of actions.

  • An agent shall be liable for the act or omission of the principal only if the latter is undisclosed.

  • A charterer's agent cannot be held solidarily liable with the carrier for losses or damages to the cargo outside the custody of the vessel.

  • The appellate court has discretionary power to consider errors not assigned if the consideration of such errors is necessary in arriving at a just decision of the case.

  • Factual findings of the trial court are generally affirmed on appeal unless there is a clear showing of error or grave abuse of discretion.