Cokaliong Shipping Vs UCPB

Limiting the Amount of Liability located on the side of the fuel oil tank, which had a mere
Cokaliong Shipping vs. UCPB two-inch gap from the engine room walling, thus
precluding constant inspection and care by the crew
December 11, 1991: Nestor Angelia (shipper and consignee)
delivered to the petitioner Edgar Cokaliong Shipping Lines, Having originated from an unchecked crack in the fuel
Inc. (now Cokaliong Shipping Lines), a cargo consisting of oil service tank, the fire could not have been caused by
one (1) carton of Christmas decor and two (2) sacks of plastic force majeure. Broadly speaking, force majeure generally
toys, to be transported on board the M/V Tandag from Cebu applies to a natural accident, such as that caused by a
City for Tandag, Surigao del Sur. This cargo is under Bill of lightning, an earthquake, a tempest or a public enemy.
Lading No. 58, in the amount of P6,500.00.
Hence, fire is not considered a natural disaster or
Zosimo Mercado (another shipper and consignee) likewise calamity. It does not fall within the category of an act of
delivered cargo to petitioner consisting of two (2) cartons of God unless caused by lighting or by other natural disaster
plastic toys and Christmas decor, one (1) roll of floor mat and or calamity. It may even be caused by the actual fault or
one (1) bundle of various or assorted goods. This is under Bill privity of the carrier.
of Lading No. 59, valued in the amount of P14,000.00
Peril of fire is not comprehended within the exceptions in
Feliciana Legaspi (owner of the goods) insured the cargo, Article 1734; Article 1735 applies (please see provision)
covered by BOL Nos. 59 and No. 58, with the UCPB General
Insurance Co., Inc., [respondent]. No. 59 was insured for Where loss of cargo results from the failure of the
P100,000 while No. 58 for P50,000. [*Note that both amounts officers of a vessel to inspect their ship frequently so as
are far from the actual and declared value in the BOLs issued to discover the existence of cracked parts, that loss
by Cokaliong] cannot be attributed to force majeure, but to the
negligence of those officials.
After the vessel had passed by the Mandaue-Mactan Bridge,
fire ensued in the engine room, and, despite earnest efforts of Ensuring the seaworthiness of the vessel is the first step
the officers and crew of the vessel, the fire engulfed and in exercising the required vigilance. Petitioner did not
destroyed the entire vessel resulting in the loss of the vessel present sufficient evidence showing what measures or
and the cargoes therein. acts it had undertaken to ensure the seaworthiness of the
vessel.
Feliciana Legaspi filed a claim, with [respondent], for the
value of the cargos insured. The latter approved the claim. For It failed to show when the last inspection and care of the
Bill of Lading No. 59, Legaspi received from UCPB auxiliary engine fuel oil service tank was made, or some
P99,000.00 while for No. 58, P60,338.00. other evidence to establish that it had exercised
extraordinary diligence.
UCPB as subrogee of Legaspi, filed a complaint anchored on
torts against petitioner, with the RTC of Makati City, for the It merely stated that constant inspection and care were
collection of the total principal amount of P148,500.00. not possible, and that the last time the vessel was dry-
Respondent alleged that the loss of the cargo was due to the docked was in November 1990.
negligence of the petitioner
(2) Respondent’s contention: petitioner’s liability should
Petitioner alleged that: (a) It was cleared by the Board of be based on the actual insured value of the goods, subject
Marine Inquiry of any negligence in the burning of the vessel; of this case.
and (b) it cannot be held liable for the loss of the cargo beyond Petitioner’s: its liability should be limited to the value
the value thereof declared in the Bill of Lading. declared by the shipper/consignee in the Bill of Lading.
SC: Petitioner should not be held liable for more than

ISSUES: what was declared by the shippers/consignees as the
(1) Is petitioner liable for the loss of the goods? YES value of the goods in the bills of lading.
(2) If it is liable, what is the extent of its liability?
According to what was reflected in the Bill of Lading Ratio: The records show that the Bills of Lading
covering the lost goods contain the stipulation that in
HELD: case of claim for loss or for damage to the shipped
(1) Petitioner’s argument: the cause of the loss of the merchandise or property, [t]he liability of the common
goods, subject of this case, was force majeure. It adds carrier x x x shall not exceed the value of the goods as
that its exercise of due diligence was adequately proven appearing in the bill of lading.
by the findings of the Philippine Coast Guard.
A stipulation that limits liability is valid as long as it is
SC: We are not convinced. The uncontroverted findings not against public policy. Following provisions apply in
of the Philippine Coast Guard show that the M/V the present case:
Tandag sank due to a fire, which resulted from a crack in
the auxiliary engine fuel oil service tank. The crack was
Art. 1749. A stipulation that the common carriers
liability is limited to the value of the goods appearing in
the bill of lading, unless the shipper or owner declares a
greater value, is binding.
Art. 1750. A contract fixing the sum that may be
recovered by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is
reasonable and just under the circumstances, and has
been freely and fairly agreed upon.
Pursuant to the afore-quoted provisions of law, it is

required that the stipulation limiting the common carriers
liability for loss must be reasonable and just under the
circumstances, and has been freely and fairly agreed
upon.
In the present case, the stipulation limiting petitioner’s

liability is not contrary to public policy.
The shippers/consignees may recover the full value of

the goods by the simple expedient of declaring the true
value of the shipment in the Bill of Lading. Other than
the payment of a higher freight, there was nothing to stop
them (Legaspi, et.al) from placing the actual value of the
goods therein.
In fact, they committed fraud against the common carrier

by deliberately undervaluing the goods in their Bill of
Lading, thus depriving the carrier of its proper and just
transport fare.
Concededly, the purpose of the limiting stipulation in the

Bill of Lading is to protect the common carrier. Such
stipulation obliges the shipper/consignee to notify the
common carrier of the amount that the latter may be
liable for in case of loss of the goods. The common
carrier can then take appropriate measures -- getting
insurance, if needed, to cover or protect itself. This
precaution on the part of the carrier is reasonable and
prudent.

Cokaliong Shipping Vs UCPB

Uploaded by

Copyright:

Available Formats

Cokaliong Shipping Vs UCPB

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Cokaliong Shipping Vs UCPB

Uploaded by

Copyright:

Available Formats

Limiting the Amount of Liability located on the side of the fuel oil tank, which had a mere

SC: Petitioner should not be held liable for more than

Pursuant to the afore-quoted provisions of law, it is

In the present case, the stipulation limiting petitioner’s

The shippers/consignees may recover the full value of

In fact, they committed fraud against the common carrier

Concededly, the purpose of the limiting stipulation in the

You might also like