Southern Lines v. Iloilo
REITERATIONFacts
The Antecedents: The City of Iloilo requisitioned rice from NARIC. NARIC shipped 1,726 sacks of rice, weighing 129,450 kilos, on board the SS "General Wright" owned by Southern Lines, Inc. The City of Iloilo received the shipment and paid P63,115.50. However, upon weighing, the City received only 1,685 sacks with a gross weight of 116,131 kilos, resulting in a shortage of 13,319 kilos, equivalent to 41 sacks, with a proportionate value of P6,486.35. Procedural History: The City of Iloilo filed a complaint against NARIC and Southern Lines, Inc. for the value of the shortage. The trial court absolved NARIC but sentenced Southern Lines, Inc. to pay P4,931.41. The Court of Appeals affirmed this decision. The Petition: Southern Lines, Inc. filed a petition for review on certiorari, questioning its liability for the loss or shortage of the rice.
Issue(s)
Whether the petitioner, as a carrier, is liable for the loss or shortage of the rice shipment. Whether the respondent City of Iloilo is precluded from filing an action for damages due to failure to present a claim within 24 hours from receipt of the shipment.
Ruling
The decision of the Court of Appeals is affirmed. Petitioner Southern Lines, Inc. is liable for the shortage in the rice shipment.
Ratio Decidendi
On the carrier's liability for shortage: Under Article 361 of the Code of Commerce, merchandise is transported at the shipper's risk, and losses due to fortuitous events or inherent nature of goods are for the shipper's account. However, Article 362 provides that the carrier is liable if the losses arose from its negligence or failure to take precautions. In this case, the petitioner admitted that the sacks were broken, had holes, and rice spilled inside the hull, with some sacks collected by the crew. This admission demonstrates negligence on the part of the petitioner, relieving it from the presumption of transporting the goods at the shipper's risk. The petitioner's contention that the shortage was due to shrinkage or bad condition of sacks is untenable if the carrier accepted the goods despite apparent defects. On the failure to present a claim within 24 hours: The petitioner's contention that the respondent is precluded from filing an action due to failure to present a claim within 24 hours is untenable. Firstly, this defense was not pleaded in the petitioner's answer and is therefore deemed waived under Section 10, Rule 9 of the Rules of Court. Secondly, the action was for the refund of an amount paid in excess for the entire shipment, subject to adjustment for shortages, not strictly for damages or recovery of shortage. The bill of lading did not limit the time for filing an action for refund of overpayment. The cited cases, where a 24-hour claim period was upheld, are not applicable as they involved different circumstances or the defense was properly raised.
Main Doctrine
A carrier is liable for losses and damages resulting from its negligence or failure to take precautions, even if the goods are transported at the shipper's risk, unless the shipper committed fraud in the bill of lading. A defense not pleaded in the answer is deemed waived.