ACT OF SHIPPERTabacalera vs North Front (1997)TABACALERA INSURANCE CO., PRUDENTIAL GUARANTEE & ASSURANCE, INC., and NEW ZEALAND INSURANCE CO., LTD., petitionersNORTH FRONT SHIPPING SERVICES, INC., and COURT OF APPEALS,respondentsFacts:20, 234 sacks of corn grains were shipped on borad North Front 777 which was owned by North Fron Shipping. The cargo was consigned to Republic Flour Mills Corp. in Manila and insured by petitioners.The vessel left Cagayan de Oro City on 2 August 1990 and arrived Manila on 16 August 1990.The consignee, Republic Flour Mills Corporation, was advised of its arrival but it did not immediately commence the unloading operations. The unloading was delayed and the merchandise was already moldy, rancid and deteriorating.After examination, it was found out that the cause of the deterioration was moisture content and the wetting was due to contact with salt water. The moldgrowth was only incipient and not sufficient to make the corn grains toxic and unfit for consumption.In fact the mold growth could still be arrested by drying.However, Republic Flour Mills Corporation rejected the entire cargo and formally demanded fromNorth Front Shipping Services, Inc., payment for the damages suffered by it. The demands however were unheeded.Hence, the insurance companies were forced to pay Republic Flour Mills Corporation.By virtue of the payment made by the insurance companies they were subrogated to the rights of Republic Flour Mills Corporation.Thusly, they lodged a complaint for damages against North Front Shipping Services, Inc., claiming that the loss was exclusively attributable to the faultand negligence of the carrier.The Marine Cargo Adjusters hired by the insurance companies conducted a survey and found cracks in the bodega of the barge and heavy concentration of molds on the tarpaulins and wooden boards.They did not notice any seals in the hatches.The tarpaulins were not brand new as there were patches on them, contrary to the claim of North Front Shipping Services, Inc., thus making it possible for water to seep in.They also discovered that the bulkhead of the barge was rusty.Contention of North Front:North Front Shipping Services, Inc., averred in refutation that it could not be made culpable for the loss and deterioration of the cargo as it was never negligent. Captain Solomon Villanueva, master of the vessel, reiterated that the barge was inspected prior to the actual loading and was found adequate and seaworthy.In addition, they were issued a permit to sail by the Coast Guard.The tarpaulins were doubled and brand new and the hatches were properly sealed.They did not encounter big waves hence it was not possible for water to seep in.He further averred that the corn grains were farm wet and not properly dried when loaded.Issue: WON North Front is liable for the deterioration. Yes, but RFMC is also liable for contributory negligence.Ruling:The charter-party agreement between North Front Shipping Services, Inc., and Republic Flour Mills Corporation did not in any way convert the common carrier into a private carrier.xxxNorth Front Shipping Services, Inc., is a corporation engaged in the businessof transporting cargo and offers its services indiscriminately to the public.It is without doubt a common carrier.As such it is required to observeextraordinary diligencein its vigilance over the goods it transports.[3].When goods placed in its care are lost or damaged, the carrier is presumed to have been at fault or to have acted negligently.[4]North Front Shipping Services, Inc., therefore has the burden of proving that it observedextraordinary diligencein order to avoid responsibility for the lost cargo.xxxIn fine, we find that the carrier failed to observe the requiredextraordinary diligencein the vigilance over the goods placed in its care.TheproofspresentedbyNorthFrontShippingServices,Inc., were insufficient to rebut theprima faciepresumption of privaterespondent's negligence,more so if we consider the evidence adducedby petitioners.It is not denied by the insurance companies that the vessel was indeed inspected before actual loading and thatNorth Front 777was issued aPermit to Sail.They proved the fact of shipment and its consequent loss or damage while in the actual possession of the carrier.Notably, the carrier failed to volunteer any explanation why there was spoilage and how it occurred.On the other hand, it was shown during the trial that the vessel had rusty bulkheads and the wooden boards and tarpaulins bore heavy concentration of molds.The tarpaulins used were not new, contrary to the claim of North Front Shipping Services, Inc., as there were already several patches on them, hence, making it highly probable for water to enter.Laboratory analysis revealed that the corn grains were contaminated with salt water.North Front Shipping Services, Inc., failed to rebut all these arguments.It did not even endeavor to establish that the loss, destruction or deterioration of the goods wasdueto the following:(a) flood, storm, earthquake, lightning, or other natural disaster or calamity; (b) act of the public enemy in war, whether international or civil; (c) act or omission of the shipper or owner of the goods; (d) the character of the goods or defects in the packing or in the containers; (e) order or act of competent public authority.[6]This is a closed list.If the cause of destruction, loss or deterioration is other than the enumerated circumstances, then the carrier is rightly liable therefor.However, we cannot attribute the destruction, loss or deterioration of the cargo solely to the carrier.We find the consignee Republic Flour Mills Corporation guiltyof contributorynegligence.It was seasonably notified of the arrival of the barge but did not immediately start the unloading operations.No explanation was proffered by the consignee as to why there was a delay of six (6) days.Had the unloading been commenced immediately the loss could have been completely avoided or at least minimized.As testified to by the chemist who analyzed the corn samples, the mold growth was only at its incipient stage and could still be arrested by drying.The corn grains were not yet toxic or unfit for consumption.For its contributory negligence, Republic Flour Mills Corporation should share at least 40% of the loss.[7]CHARACTER OF GOODSGovernment vs Ynchausti (1919)Facts:The purpose of this action was to recover the sum of P200 as damages to certain cargo of roofing tiles shipped by the plaintiff Government from Manila to Iloilo on a vessel belonging to the defendant Ynchausti & Co. The tiles were delivered by Ynchausti to the consignee of the Government at Iloilo. Upon delivery it was found that some of the tiles had been damaged; that the damage amounted to about P200. Contention of Ynchausti:Ynchausti denied that the tiles were broken by reason of its negligence. It proved, and the Government did not attempt to dispute, that the roofing tiles in question were of a brittle and fragile nature; that they were delivered by the Government to Ynchausti in bundles of ten each, tied withbejuco[rattan], without any packing or protective covering. The Government did not even attempt to prove any negligence on the part of the defendant.ISSUE: WON Ynchausti is negligent and should be held liable for the broken tiles. Yes.Ruling:The defendant Ynchausti herein proved, and the plaintiff Government did not attempt to dispute, that the tiles in question were of a brittle and fragile nature and that they were delivered by the plaintiff to the defendant without any packing or protective covering. Ynchausti also offered proof to show that there was no negligence on its part, by showing that the tiles were loaded, stowed, and discharged in a careful and diligent manner.In this jurisdiction there is no presumption of negligence on the part of the carriers in case like the present. The plaintiff Govt, not having proved negligence on the part of the defendant Ynchausti, is not entitled to recover damages.Southern Lines vs CA, City of Iloilo (1962)Facts:NARIC (National Rice and Corn Corp.) shipped 1,726 sacks of rice consigned to the City of Iloilo on board the SS "General Wright" belonging to the Southern Lines, Inc. On September 3, 1948, the City of Iloilo received the shipment and paid. However, there was a shortage. The shortage was equivalent to 41 sacks of rice with a net weight of 13,319 kilos.On February 14, 1951 the City of Iloilo filed a complaint in the Court of First Instance of Iloilo against NARIC and the Southern Lines, Inc. for the recovery of the amount of P6,486.35 representing the value of the shortage of the shipment of rice.Contention of Southern Lines:Petitioner claims exemption from liability by contending that the shortage in the shipment of rice was due to such factors as the shrinkage, leakage or spillage of the rice on account of the bad condition of the sacks at the time it received the same and the negligence of the agents of respondent City of Iloilo in receiving the shipment.ISSUE: WON Southern Lines should be exempted from liability. No.Ruling:The contention is untenable, for, if the fact of improper packing is known to the carrier or his servants, or apparent upon ordinary observation, but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom.Furthermore, according to the Court of Appeals, "appellant (petitioner) itself frankly admitted that the strings that tied the bags of rice were broken; some bags were with holes and plenty of rice were spilled inside the hull of the boat, and that the personnel of the boat collected no less than 26 sacks of rice which they had distributed among themselves." This finding, which is binding upon this Court, shows that the shortage resulted from the negligence of petitioner.