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Edgar Cokaliong V UCPB

This case involves the loss of cargo transported by petitioner Edgar Cokaliong Shipping Lines on board the M/V Tandag. Two shippers, Nestor Angelia and Zosimo Mercado, delivered cargo valued at P6,500 and P14,000 respectively according to the bills of lading issued by petitioner. The cargo was insured for higher amounts. A fire destroyed the vessel and the cargo. The court held petitioner liable for the loss as it failed to prove it exercised extraordinary diligence. However, petitioner's liability is limited to the values declared in the bills of lading, not the insured values, as the bills of lading stipulate liability is limited to the declared value unless a higher value is

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1K views2 pages

Edgar Cokaliong V UCPB

This case involves the loss of cargo transported by petitioner Edgar Cokaliong Shipping Lines on board the M/V Tandag. Two shippers, Nestor Angelia and Zosimo Mercado, delivered cargo valued at P6,500 and P14,000 respectively according to the bills of lading issued by petitioner. The cargo was insured for higher amounts. A fire destroyed the vessel and the cargo. The court held petitioner liable for the loss as it failed to prove it exercised extraordinary diligence. However, petitioner's liability is limited to the values declared in the bills of lading, not the insured values, as the bills of lading stipulate liability is limited to the declared value unless a higher value is

Uploaded by

Shane Fulgueras
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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G.R. No. 146018.

June 25, 2003


EDGAR COKALIONG SHIPPING LINES, INC., petitioner, vs. UCPB GENERAL INSURANCE
COMPANY, INC., respondent.

Doctrine:
In Aboitiz Shipping Corporation v. Court of Appeals, the description of the nature and the value
of the goods shipped were declared and reflected in the bill of lading, like in the present case.
The Court therein considered this declaration as the basis of the carrier’s liability and ordered
payment based on such amount.

Facts:
On December 11, 1991, ​Nestor Angelia delivered to the Edgar Cokaliong ShippingLines, Inc.
[petitioner], cargo consisting of one (1) carton of Christmas decor and two (2) sacks of plastic
toys, to be transported on board the M/V Tandag on its Voyage scheduled to depart from Cebu
City for Tandag, Surigao del Sur. ​[Petitioner] issued Bill of Lading No. 58​, freight prepaid,
covering the cargo. Nestor Angelia was both the shipper and consignee of ​the cargo valued​, on
the face thereof, in the amount of​ P6,500.00.

Zosimo Mercado likewise delivered cargo to [petitioner], consisting of two (2) cartons of plastic
toys and Christmas decor, one (1) roll of floor mat and one (1) bundle of various or assorted
goods for transportation thereof from Cebu City to Tandag, Surigao del Sur, on board the said
vessel, and said voyage. ​[Petitioner] issued Bill of Lading No. 59 covering the cargo which, on
the face thereof, was ​valued in the amount of P14,000.00. ​Under the Bill of Lading, Zosimo
Mercado was both the shipper and consignee of the cargo.

The cargo covered by ​Bill of Lading No. 59 ​was ​insured with the UCPB General Insurance Co.,
Inc.​, [respondent] for brevity, for the amount of P100,000.00 ​“against all risks,’ as well as the
cargo covered by ​Bill of Lading No. 58​, was insured with [respondent], for the amount of
P50,000.00.

When the vessel left port, ​fire ensued in the engine room​, and, despite earnest efforts of the
officers and crew of the vessel, ​the fire engulfed and destroyed the entire vessel resulting in the
loss of the vessel and the cargoes therein.

Issue:

(1) ​Is petitioner liable for the loss of the goods?


(2) If it is liable, what is the extent of its liability?

Held:

1. ​Yes. ​The law provides that a common carrier is presumed to have been negligent if it fails to
prove that it exercised extraordinary vigilance over the goods it transported. Ensuring the
seaworthiness of the vessel is the first step in exercising the required vigilance. Petitioner did
not present sufficient evidence showing what measures or acts it had undertaken to ensure the
seaworthiness of the vessel. ​It failed to show when the last inspection and care of the auxiliary
engine fuel oil service tank was made, what the normal practice was for its maintenance, or
some other evidence to establish that it had exercised extraordinary diligence​. It merely stated
that constant inspection and care were not possible, and that the last time the vessel was
dry-docked was in November 1990. Necessarily, ​in accordance with Article 1735 of the Civil
Code, we hold petitioner responsible for the loss of the goods covered by Bills of Lading Nos. 58
and 59.

(2) ​Petitioner’s liability should be ​limited to the value declared by the shipper/consignee in the
Bill of Lading, and not based on the actual insured value of the goods, subject of this case. The
records show that the Bills of Lading covering the lost goods contain the stipulation that in case
of claim for loss or for damage to the shipped merchandise or property, “[t]he liability of the
common carrier x x x shall not exceed the value of the goods as appearing in the bill of lading.”

A stipulation that limits liability is valid as long as it is not against public policy. In Everett
Steamship Corporation v. Court of Appeals, the Court stated:

“A stipulation in the bill of lading limiting the common carrier’s liability for loss or destruction of a
cargo to a certain sum, unless the shipper or owner declares a greater value, is sanctioned by
law, particularly Articles 1749 and 1750 of the Civil Code which provides:

‘Art. 1749. A stipulation that the common carrier’s 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.’

In Aboitiz Shipping Corporation v. Court of Appeals, the description of the nature and the value
of the goods shipped were declared and reflected in the bill of lading, like in the present case.
The Court therein considered this declaration as the basis of the carrier’s liability and ordered
payment based on such amount. Following this ruling, petitioner should not be held liable for
more than what was declared by the shippers/consignees as the value of the goods in the bills
of lading.

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