Law School Noob: [CASE DIGEST] Lu Do & Lu Ym Corp. v. Binamira (G.R. No. L-9840)

Friday, December 24, 2021

[CASE DIGEST] Lu Do & Lu Ym Corp. v. Binamira (G.R. No. L-9840)

April 22, 1957

FACTS:

I.V. Binamira ordered six cases of films and/or photographic supplies from Delta Photo Supply Company of New York. Lu Do is the agent of the carrier and hired Cebu Stevedoring to unload its cargo.

The cargo on board on board the M/S "FERNSIDE" was unloaded and received by the Visayan Cebu Terminal Company, the arrastre operator of the port. Cebu Stevedoring and Visayan Cebu both indicated that the shipment in question was in good order and condition.

After Binamira took the delivery, he discovered that the cases showed signs of pilferage. Binamira filed an action against Lu Do to recover the amount of the missing shipment.

The Court of First Instance granted the action. This was subsequently affirmed by the Court of Appeals, saying that the carrier is presumed negligent and that the delivery to the customs is not the delivery contemplated in the Code.

Hence, the instant petition.

ISSUE:

Whether the CA erred in ignoring the provisions in the bill of lading stipulating that the responsibility of the carrier is limited only to losses that may occur while the cargo is still under its custody and control. – YES.

HELD:

The Supreme Court held that although the CA is correct, the provisions in the bill of lading may limit the liability of the carrier as in this case.

As a rule, a common carrier is responsible for the loss, destruction or deterioration of the goods it assumes to carry from one place to another unless the same is due to any to any of the causes mentioned in Article 1734 on the new Civil Code, and that, if the goods are lost, destroyed or deteriorated, for causes other that those mentioned, the common carrier is presumed to have been at fault or to have acted negligently, unless it proves that it has observed extraordinary diligence in their care (Article 1735, Idem.).

Extraordinary liability lasts from the time the goods are placed in the possession of the carrier until they are delivered to the consignee, or "to the person who has the right to receive them." But these provisions only apply when the loss, destruction or deterioration takes place while the goods are in the possession of the carrier, and not after it has lost control of them.

Delivery of the cargo to the consignee, or to the person who has a right to receive them is not the delivery contemplated in Article 1736, because in such case the goods are still in the hands of the Government and the owner cannot exercise dominion over them.

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