Eastern Shipping Lines vs. BPI/MS Insurance Corp., G.R. No. 182864 [Case Digest]

 

Eastern Shipping Lines vs. BPI/MS Insurance Corp.,

G.R. No. 182864, January 12, 2015

Facts:

            BPI/MS Insurance Corporation (BPI/MS) and Mitsui Sumitomo Insurance Company Limited (Mitsui) filed a Complaint before RTC Makati against ESLI and ATI to recover actual damages amounting to US$17,560.48 with legal interest, attorney’s fees and costs of suit.

            In their complaint, BPI/MS and Mitsui alleged that on 2 February 2004 at Yokohama, Japan, Sumitomo Corporation shipped on board ESLI’s vessel M/V "Eastern Venus 22" 22 coils of various Steel Sheet weighing 159,534 kilograms in good order and condition for transportation to and delivery at the port of Manila, Philippines in favor of consignee Calamba Steel Center, Inc. (Calamba Steel) located in Saimsim, Calamba, Laguna as evidenced by a Bill of Lading.

            The complaint alleged that the shipment arrived at the port of Manila in an unknown condition and was turned over to ATI for safekeeping. Upon withdrawal of the shipment by the Calamba Steel’s representative, it was found out that part of the shipment was damaged and was in bad order condition such that there was a Request for Bad Order Survey.

            On 12 May 2004 at Kashima, Japan, Sumitomo Corporation again shipped on board ESLI’s vessel M/V "Eastern Venus 25" 50 coils in various Steel Sheet weighing 383,532 kilograms in good order and condition for transportation to and delivery at the port of Manila, Philippines in favor of the same consignee Calamba Steel asevidenced by a Bill of Lading. ESLI’s vessel withthe second shipment arrived at the port of Manila partly damaged and in bad order. The coils sustained further damage during the discharge from vessel to shore until its turnover to ATI’s custody for safekeeping.

            RTC Makati City rendered a decision finding both the ESLI and ATI liable for the damages sustained by the two shipments. Court of Appeals absolved ATI from liability thereby modifying the decision of the trial court.

            ESLI bases of its non-liability onthe survey reports prepared by BPI/MS and Mitsui’s witness Manuel which found that the cause of damage was the rough handling on the shipment by the stevedores of ATI during the discharging operations. However, Manuel does not absolve ESLI of liability. The witness in fact includes ESLI in the findings of negligence. ESLI cites the affidavit of its witness Rodrigo who stated that the cause of the damage was the rough mishandling by ATI’s stevedores.

 

 

Issue:

            Whether or not ESLI is liable for the damages of the coils transported by them.

 

Held:

            YES. In maritime transportation, a bill of lading is issued by a common carrier as a contract, receipt and symbol of the goods covered by it.  If it has no notation of any defect or damage in the goods, it is considered as a "clean bill of lading." A clean bill of lading constitutes prima facie evidence of the receipt by the carrier of the goods as therein described.

            Based on the bills of lading issued, it is undisputed that ESLI received the two shipments of coils from shipper Sumitomo Corporation in good condition at the ports of Yokohama and Kashima, Japan. However, upon arrival at the port of Manila, some coils from the two shipments were partly dented and crumpled as evidenced by the Turn Over Survey of Bad Order Cargoes No. 67982 dated 13 February 2004 and Turn Over Survey of Bad Order Cargoes Nos. 68363 and 683655 both dated 24 May 2004 signed by ESLI’s representatives, a certain Tabanao and Rodrigo together with ATI’s representative Garcia. According toTurn Over Survey of Bad Order Cargoes No. 67982, four coils and one skid were partly dented and crumpled prior to turnover by ESLI to ATI’s possession while a total of eleven coils were partly dented and crumpled prior to turnover based on Turn Over Survey Bad Order Cargoes Nos. 68363 and 68365.

            Mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no adequate explanation is given as to how the deterioration, loss, or destruction of the goods happened, the transporter shall be held responsible. From the foregoing, the fault is attributable to ESLI.