G.R. No. L-13954; January 17, 1919
COMPAGNIE FRANCO-INDOCHINOISE, plaintiff-appellant, vs. DEUTSCH-AUSTRALISCHE DAMPSCHIFFS GESELLSCHAFT, defendant-appellant.

FACTS:
This case was previously decided by the Supreme Court, which remanded it to the trial court for a new trial limited to determining the amount of damages. The plaintiff, Compagnie Franco-Indochinoise, owned a cargo of rice meal shipped aboard the defendant’s steamship Esslingen from Saigon to Manila. Due to the outbreak of World War I, the defendant unlawfully detained the cargo in Manila Bay, causing it to deteriorate. The damaged cargo was sold on November 6, 1914. In the prior decision, the Supreme Court established that the defendant was liable for damages and directed the trial court to ascertain the difference between the actual proceeds from the sale of the damaged cargo and the amount that could have been obtained if the cargo had been sold in an undamaged condition in Manila Bay on that same date (November 6, 1914). Upon rehearing, the trial court fixed this difference at P35,949.30. Both parties appealed: the plaintiff contended the award was too low, and the defendant contended it was too high.

ISSUE:
What is the correct measure of damages for the deterioration of the cargo, specifically, the market value of the rice meal in an undamaged condition in Manila on November 6, 1914?

RULING:
The Supreme Court modified the trial court’s judgment, increasing the damages awarded to the plaintiff. The Court held that the “law of the case” doctrine precluded re-examining its prior ruling that the valuation date for the undamaged cargo was November 6, 1914. On the factual determination of value, the Court found the evidence demonstrated that the undamaged rice meal (equivalent to grade D tiqui-tiqui) had a market value in Manila during the relevant period that was at least equal to, if not greater than, its original cost price in Saigon. The trial court’s valuation was therefore too low. The correct measure of damages was the difference between this proven value of the undamaged cargo and the actual sale proceeds of the damaged cargo. The Court also rejected the defendant’s argument that liability should be limited by a charter party clause stipulating that damages for non-performance should not exceed the amount of freight, holding such a clause inapplicable to the situation and not binding under general maritime law. Consequently, the Supreme Court awarded the plaintiff damages in the amount of P87,777.56, with interest from November 5, 1914, in lieu of the P35,949.30 awarded by the trial court.