Delgado Brothers v. Court of Appeals
REITERATIONFacts
The Antecedents: Richard A. Kleeper filed an action to recover damages for goods contained in a lift van that fell and were damaged while being unloaded from the S.S. President Cleveland, owned by American President Lines, Ltd., to the pier. The unloading was performed by Delgado Brothers, Inc. using its gantry crane. Procedural History: The trial court ordered the shipping company to pay Kleeper for the damaged goods, sentimental value, and attorney's fees, with a directive for Delgado Brothers, Inc. to reimburse the shipping company. The Court of Appeals affirmed the trial court's decision. The Petition: Delgado Brothers, Inc. sought review, arguing it was relieved of liability by the shipping company through a contract concerning the use of its gantry crane.
Issue(s)
Whether petitioner Delgado Brothers, Inc. may be held liable for the damage done to the goods of respondent Richard A. Kleeper subsidiarily to the liability of American President Lines, Ltd. Whether the contract between Delgado Brothers, Inc. and American President Lines, Ltd. effectively relieved petitioner from liability for the negligence of its employee. Whether clause 17 of the bill of lading limiting the carrier's liability and the Carriage of Goods by Sea Act apply.
Ruling
The Supreme Court modified the decision of the Court of Appeals, ruling that petitioner Delgado Brothers, Inc. should not be made liable for the damage caused to the goods in question.
Ratio Decidendi
On whether petitioner Delgado Brothers, Inc. may be held liable for the damage done to the goods of respondent Richard A. Kleeper subsidiarily to the liability of American President Lines, Ltd.: The Court found that the contract between Delgado Brothers, Inc. and American President Lines, Ltd., as evidenced by Exhibit 1-Delgado, expressly stipulated that the shipping company would assume full responsibility and liability for damages arising from the use of the crane and would not hold Delgado Brothers, Inc. liable in any way. This assumption of responsibility by the shipping company, coupled with the explicit agreement not to hold Delgado Brothers, Inc. liable, shifted the burden away from the petitioner. On whether the contract between Delgado Brothers, Inc. and American President Lines, Ltd. effectively relieved petitioner from liability for the negligence of its employee: The Court disagreed with the Court of Appeals' interpretation that the contract did not cover the negligence of the crane operator. The Court held that the phraseology employed in Exhibit 1-Delgado, particularly the clause where the shipping company agreed "not to hold the Delgado Brothers, Inc. liable or responsible in any way thereof," clearly indicated an assumption of responsibility by the carrier for any liability, including that arising from the negligence of the crane operator. The Court emphasized that to exculpate a party from liability for negligence, the contract must be exceptionally clear, and any ambiguity is construed against the party seeking exemption. In this case, the stipulation was sufficiently clear to exempt Delgado Brothers, Inc. On whether clause 17 of the bill of lading limiting the carrier's liability and the Carriage of Goods by Sea Act apply: The Court noted that these issues were already disposed of in a related appeal by the shipping company. The Court reiterated that the shipper, by accepting the bill of lading with a clause printed in red ink stating that the shipper agrees to be bound by all its stipulations, exceptions, and conditions, impliedly accepted the bill of lading and its provisions. Furthermore, Article 1753 of the New Civil Code mandates that the law of the country of destination governs the carrier's liability. Thus, the Philippine Civil Code and Code of Commerce apply, and Section 4(5) of the Carriage of Goods by Sea Act is merely suppletory.
Main Doctrine
A contract for exemption from liability for negligence must be clear and explicit, and any ambiguity is construed against the party claiming exemption. A carrier cannot evade responsibility for the negligence of its employee when the contract expressly assumes such responsibility or exempts the other party from liability in any way.