9. Sulpicio vs.
First Lepanto FACTS:
29 June 2005 | J Chico-Nazario | Vigilance over the goods - 1. This is a petition for review on certiorari assailing the CA decision
Liability over cargo v. over cargo packaging which reversed the RTC decision dismissing the damages
complaint filed by Sulpicio Lines [Sulplicio] against First Lepanto
PETITIONER: SULPICIO LINES, INC. -Taisho Insurance Corp [FLT]
RESPONDENTS: FIRST LEPANTO-TAISHO INSURANCE 2. Taiyo Yuden Philippines, Inc. (owner of the goods, Taiyo PH) and
CORPORATION Delbros, Inc. (shipper, Delbros) entered into a contract, evidenced
by Bill of Lading No. CEB/SIN- 008/92 issued by the latter in
SUMMARY: Taiyo PH wanted to ship three crates of inductors to Taiyo favor of the owner of the goods, for Delbros, Inc. to transport a
SG. This was coursed thru Delbros as shipper but Sulpicio was shipment of goods consisting of three (3) wooden crates
subcontracted by Delbros to handle the MNL to Cebu part of the journey. containing one hundred thirty-six (136) cartons of inductors
During unloading at MNL, one of the three crates fell and upon Taiyo and LC compound on board the V Singapore V20 from Cebu
PH’s examination, they were deemed to be a total loss. Taiyo PH sought City to Singapore in favor of the consignee, Taiyo Yuden
payment from Sulpicio but it did not pay so they went to the insurer, First Singapore Pte, Ltd. [Taiyo Yuden PH → Taiyo Yuden SG via
Lepanto (FLT). FLT paid Taiyo PH and now claims its payment from Delbros]
Sulpicio ℅ right of subrogation. Sulpicio argues that its liability covers 3. For the Cebu → Manila travel, Delbros, Inc. engaged the services
only the damage to the packaging, not damage to the entire content of the of the vessel M/V Philippine Princess, owned and operated by
one crate that fell [mas mahal kasi liability pag kasama cost of inductors petitioner Sulpicio Lines, Inc. (carrier, Sulpicio)
as opposed to damage to the cartons only]. The issue is WON Sulpicio is a. During the unloading of the shipment, one crate
liable for damages and to what extent. SC held that Sulpicio should not containing forty-two (42) cartons dropped from the
demarcate liability between content and packaging because in this case, cargo hatch to the pier apron. Taiyo PH examined the
the damage to packaging rendered the entire cargo unfit for shipping; thus, dropped cargo, and upon an alleged finding that the
damage to packaging = damage to contents. Sulpicio is presumed to be contents of the crate were no longer usable for their
negligent under 1735 and it failed to rebut this. Sulpicio is also solidarily intended purpose, they were rejected as a total loss and
liable with Delbros who already paid FLT because it failed to appeal and returned to Cebu City.
the decision attained finality with respect to them. 4. Taiyo PH sought to recover the value of the damaged goods from
Sulpicio but Sulpicio rejected. Taiyo PH sought payment from
DOCTRINE: FLT under a marine insurance policy issued to Taiyo PH
Damage to packaging is damage to entire cargo because damage sustained a. FLT paid the claim less thirty-five percent (35%) salvage
by the packaging of the cargo while in petitioner-carrier's custody resulted value or P194,220.31.
in its unfitness to be transported to its consignee in Singapore. Such failure 5. FLT was now subrogated to the rights of Taiyo PH against Delbros
to ship the cargo to its final destination because of the ruined packaging, and Sulpicio ⇒ FLT filed claims for reimbursement from Delbros
indeed, resulted in damages on the part of the owner of the goods. and Sulpicio but was denied.
6. FLT instituted a civil case for damages against Delbros & Sulpicio
a. Sulpicio filed its answer with counterclaim delivered to the consignee in the same state. In the case
b. Delbros filed an answer with counterclaim and herein, the goods were received by Delbros in Cebu
cross-claim stating that assuming the contents of the crate properly packed in cardboard cartons and then placed in
in question were truly in bad order, fault is with Sulpicio wooden crates, for delivery to the consignee in Singapore.
which was responsible for the unloading of the crates However, before the shipment reached Singapore (while it
c. Sulpicio filed its answer to Delbros asserting that it was in Manila) one crate and 2 cartons contained therein
observed extraordinary diligence in the handling, were not anymore in their original state. They were no
storage and general care of the shipment and that longer fit to be sent to Singapore.
subsequent inspection of the shipment by the Manila b. This consists in the destruction of one wooden crate and
Adjusters and Surveyors Company showed that the the tearing of two of the cardboard boxes therein
contents of the third crate that had fallen were found to be rendering then unfit to be sent to Singapore. Sulpicio
in apparent sound condition, except that "2 cello bags admits that this crate fell while it was being unloaded
each of 50 pieces ferri inductors No. LC FL 112270K-60 at the Manila pier. Falling of the crate was negligence
(c) were unaccounted for and missing as per packaging on the part of defendant-appellee Sulpicio Lines under
list." the doctrine of res ipsa loquitur.
7. Trial court dismissed the complaint for damages filed by FLT since 9. Sulpicio MRed but was denied, hence this petition.
it failed to prove its case with a preponderance of evidence. 10. During the pendency of the appeal before this Court, Delbros, Inc.
a. On cross-examination, he said that two cartons were torn filed a manifestation stating that its appeal filed before this Court
at the sides with top portion flaps opened and the 41 had been dismissed for being filed out of time. As a
cartons were properly sealed and in good order consequence, it paid in full the amount of the damages awarded by
conditions. Two cartons were already opened and slightly the appellate court to the respondent-insurer.
damaged. He merely looked at them but did not conduct a. Delbros, Inc. prays for reimbursement, contribution, or
an inspection of the contents. What he was referring to indemnity from its co-defendant, Sulpicio, as they are
as slightly damaged were the cartons only and not the solidarily liable.
contents.
8. CA reversed this dismissal stating that Sulpicio is liable for ISSUES:
damages because 1. WON based on the evidence presented during the trial, the owner
a. Sulpicio, however, insist that it was only the external of the goods, respondent-insurer's predecessor-in-interest [Taiyo
packaging that was damaged, and that there was no PH], did incur damages, and if so, whether or not petitioner-carrier
actual damage to the goods such that would make them [Sulpicio] is liable for the same. ⇒ Yes Sulpicio is liable, Delbros
liable to the shipper. This theory is erroneous. When the may institute a separate case against Sulpicio for reimbursement
goods are placed at a common carrier's possession for for payment made to FLT.
delivery to a specified consignee, they are in good order
and condition and are supposed to be transported and
RATIO: the common carrier must prove that they observed
[WON Liable] extraordinary diligence as required in Article 1733 of the
1. It cannot be denied that the shipment sustained damage while in CC [Sulpicio failed to overcome presumed negligence]
the custody of Sulpicio. It is not disputed that one of the three (3) [Extent of Liability]
crates did fall from the cargo hatch to the pier apron while 1. FLT paid Taiyo PH under the insurance policy the amount of
petitioner-carrier was unloading the cargo from its vessel. Neither P194,220.31 for the alleged damages the latter has incurred.
is it impugned that upon inspection, it was found that two (2) Neither is there a dispute as to the fact that Delbros, Inc. paid
cartons were torn on the side and the top flaps were open and that P194,220.31 to FLT in satisfaction of the whole amount of the
two (2) cello bags, each of 50 pieces ferri inductors, were missing judgment rendered by the Court of Appeals
from the cargo. 2. Upon FLT’s payment of the alleged amount of loss suffered by the
2. Sulpicio contends that its liability, if any, is only to the extent of insured the insurer is entitled to be subrogated pro tanto to any
the cargo damage or loss and should not include the lack of right of action which the insured may have against the negligent
fitness of the shipment for transport to Singapore due to the common carrier
damaged packing [Sulpicio is mistaken, there is no distinction of 3. As found by the Court of Appeals, there was damage suffered by
liability over cargo versus over packaging] the goods which consisted in the destruction of one wooden crate
3. According to Sulpicio, damage to the packaging is not and the tearing of two (2) cardboard boxes therein which rendered
tantamount to damage to the cargo. It must be stressed that in them unfit to be sent to Singapore. The falling of the crate was
the case at bar, the damage sustained by the packaging of the negligence on the part of Sulpicio Lines, Inc. for which it cannot
cargo while in petitioner-carrier's custody resulted in its exculpate itself from liability because it failed to prove that it
unfitness to be transported to its consignee in Singapore. Such exercised extraordinary diligence
failure to ship the cargo to its final destination because of the 4. As stated in the manifestation filed by Delbros, Inc., however,
ruined packaging, indeed, resulted in damages on the part of the respondent-insurer had already been paid the full amount granted
owner of the goods. by the Court of Appeals, hence, it will be tantamount to unjust
4. The extraordinary diligence in the vigilance over the goods enrichment for respondent-insurer to again recover damages from
tendered for shipment requires the common carrier to know and to herein petitioner-carrier.
follow the required precaution for avoiding the damage to, or
destruction of, the goods entrusted to it for safe carriage and
delivery. SEPARATE OPINIONS:
5. Thus, when the shipment suffered damages as it was being CONCURRING:
unloaded, Sulpicio is presumed to have been negligent in the
handling of the damaged cargo. Under Articles 1735 and 1752 of
the Civil Code
a. To overcome the presumption of liability for loss,
destruction or deterioration of goods under Article 1735,
