Lizardi v. Yaptico
REITERATIONFacts
The Antecedents: Lim Jocsing, a merchant, entered into a contract with F.M. Yaptico, a commission firm, establishing an account current and a credit line of P15,000 for the purchase of abaca and copra. Lim Jocsing guaranteed the credit with his business. The contract stipulated that abaca and copra secured by Lim Jocsing were to be delivered to Yaptico, with their value credited to Lim Jocsing's account. Lim Jocsing was to ship these goods only on Yaptico's steamers and pay freight charges. The contract also stated that abaca and copra delivered to be received on board by Yaptico's agent would be for the account of Yaptico, unless Lim Jocsing expressly provided otherwise in writing. Yaptico sent a steamer, the Bais, with goods and cash to Lim Jocsing. Lim Jocsing loaded 430 piculs of abaca, valued at P9,460, onto the Bais for consignment to Yaptico in Cebu. This shipment was insured for P15,000 in the name of Yaptico, who was the agent for the insurance companies. On October 15, 1912, the steamer Bais wrecked, and Lim Jocsing perished. The abaca was lost. Yaptico collected the insurance proceeds amounting to P10,320. Procedural History: Carlos de Lizardi, administrator of Lim Jocsing's estate, filed a complaint against F.M. Yaptico, praying for the payment of P15,000, representing the value of the abaca and the insurance collected by Yaptico. The defendant admitted collecting the insurance but claimed ownership of the abaca based on an express contract, asserting that the abaca became his property upon loading. The trial court ruled that the abaca was the property of Lim Jocsing and ordered Yaptico to pay P10,320 with legal interest. Yaptico appealed. The Petition: The plaintiff administrator sought to recover the value of the abaca and the insurance proceeds collected by the defendant. The defendant appealed the trial court's decision, asserting ownership of the abaca and the right to the insurance proceeds.
Issue(s)
Whether the ownership of the lost abaca had transferred to F.M. Yaptico upon delivery on board the vessel. Whether F.M. Yaptico is entitled to retain the insurance proceeds collected for the lost shipment.
Ruling
The Supreme Court reversed the decision of the lower court, absolving the defendant F.M. Yaptico from the complaint. The Court ruled that the abaca loaded on the steamer Bais became the property of F.M. Yaptico upon delivery to his agent, and therefore, Yaptico was entitled to the insurance proceeds.
Ratio Decidendi
On Issue 1: The Supreme Court held that ownership of the abaca transferred to Yaptico upon its delivery to the supercargo of the steamer Bais. The Court relied on the fifth paragraph of the contract, which explicitly stated that merchandise delivered on board Yaptico's steamers 'shall be for the account of Yaptico' unless otherwise provided in writing. Applying Article 1281 of the Civil Code, the Court found these terms clear and leaving no room for doubt; therefore, the literal meaning must be observed. Since there was no written provision from Lim Jocsing to the contrary, the delivery constituted a transfer of ownership. The Court noted that the abaca was essentially reimbursement for the cash and goods Yaptico had advanced to Lim Jocsing. Thus, from the moment of delivery, the goods were at the risk of Yaptico as the new owner. On Issue 2: Because Yaptico was the owner of the abaca at the time of the wreck, he was the party who suffered the financial prejudice of the loss. The Court applied the principle of res perit domino, reasoning that since the value of the abaca was already credited to Lim Jocsing’s account current upon receipt on board, Lim Jocsing would not have suffered the loss regardless of whether the ship arrived in Cebu. Yaptico, as the owner, had a legitimate insurable interest and properly insured the goods in his own name and at his own expense. Consequently, it is just and legal that he collect the insurance proceeds as payment for the value of the abaca he had already advanced. The fact that Lim Jocsing paid certain expenses like freight and commissions was deemed a contractual benefit for the creditor and did not negate the transfer of property rights to Yaptico.
Main Doctrine
Under a contract where goods delivered to a party are to be credited to the account of the deliveror, and the risk of loss is explicitly stated to be on the recipient unless otherwise provided in writing, the goods become the property of the recipient upon delivery to their agent or vessel, entitling the recipient to the insurance proceeds in case of loss.