GR 136960; (December, 2003) (Digest)
G.R. No. 136960; December 8, 2003
IRON BULK SHIPPING PHILIPPINES, CO., LTD., petitioner, vs. REMINGTON INDUSTRIAL SALES CORPORATION, respondent.
FACTS
Remington Industrial Sales Corporation imported hot-rolled steel sheets, which were shipped aboard the MV “Indian Reliance,” represented by Iron Bulk Shipping Philippines, Co., Ltd. The cargo was insured by Pioneer Asia Insurance Corporation. Upon arrival at the Port of Manila, the steel sheets were found to be wet and rusty. Inspection reports confirmed the presence of water and rust, with one test indicating a slight trace of salt but not conclusively proving seawater damage, and another suggesting freshwater contamination. Remington filed claims against the insurer and the carrier, which were denied, prompting a collection suit.
The Regional Trial Court ruled in favor of Remington, holding Iron Bulk liable for failing to exercise the required extraordinary diligence of a common carrier. The court found that water was present in the cargo hold and was dripping from the cargo during discharge, with Iron Bulk offering no sufficient explanation for the water’s entry. The Court of Appeals affirmed this decision in toto. Iron Bulk elevated the case to the Supreme Court via a petition for review on certiorari.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s decision holding Iron Bulk liable for the damaged cargo.
RULING
The Supreme Court modified the appealed decision but affirmed Iron Bulk’s liability. The Court upheld the finding that Iron Bulk, as a common carrier, failed to overcome the presumption of negligence under Article 1735 of the Civil Code. The cargo was delivered in a damaged state, and Iron Bulk did not sufficiently prove that the damage was due to any of the exempting causes enumerated in Article 1734, such as a fortuitous event. The presence of water in the hold, witnessed during discharge, coupled with the lack of a credible explanation for its source, constituted a failure to exercise the required extraordinary diligence.
However, the Court modified the award of damages. It found the evidence insufficient to prove the exact extent of the loss with certainty, as a portion of the cargo had already been sold. Therefore, the award of actual damages was deleted. In its place, the Court awarded temperate damages under Article 2224 of the Civil Code, set at a reasonable thirty percent of the claimed loss, amounting to ₱165,000.00. The award of attorney’s fees was also deleted, as Iron Bulk’s offer to settle a portion of the claim was found to be in good faith, and the refusal of the full claim was not unwarranted.