G.R. No. L-28741. March 20, 1984.
REPARATIONS COMMISSION, Plaintiff-Appellee, vs. COMPAÑIA MARITIMA, Defendant-Appellant.

FACTS

The Reparations Commission (REPACOM) filed a complaint to recover the value of eight lost crates of reparations goods shipped from Japan on board the vessel M/V Mactan, owned by Compañia Maritima (MARITIMA), and consigned to REPACOM in Manila. The trial court absolved MARITIMA from liability, finding the cargo was discharged in good order and delivered to the Customs Arrastre Service. However, the court refused to rule on MARITIMA’s permissive counterclaim against REPACOM for unpaid freight charges totaling P357,055.51 for various reparations shipments, suggesting a separate action be filed. MARITIMA appealed this refusal to decide its counterclaim.
The Supreme Court, to avoid further prolongation of the already protracted proceedings, opted to decide the counterclaim directly. The evidence established that the freight charges for shipments of reparations goods from Japan, consigned to REPACOM on a freight-collect basis, remained largely unpaid. REPACOM did not dispute the debt but disclaimed liability, invoking Section 11 of the Reparations Act ( R.A. No. 1789 ), which states that ocean freight “shall be paid by the end-user.”

ISSUE

Whether the Reparations Commission (REPACOM), as consignee of the reparations goods, is liable to the carrier, Compañia Maritima, for unpaid ocean freight charges.

RULING

No, REPACOM is not liable. The Supreme Court dismissed MARITIMA’s counterclaim, affirming that Section 11 of the Reparations Act is controlling. MARITIMA argued that under the bills of lading and the Code of Commerce (particularly Article 686), the consignee (REPACOM) is obligated to pay freight upon delivery. However, the Court ruled that the specific provisions of the Reparations Act form part of and are read into every contract for the shipment of reparations goods, unless clearly excluded—which was not shown. The law explicitly allocates the responsibility for paying ocean freight to the end-user, not the consignee-commission. This statutory allocation governs over general provisions of commercial law or the terms of the bills of lading. The Court cited a prior case with the same parties where it was held that REPACOM, as a government agency implementing the Reparations Act, could not be held liable for freight charges that the law mandates shall be borne by the end-user. Therefore, MARITIMA’s recourse for collection is against the end-user, San Jose Cement Corporation, and not against REPACOM.