Eastern Shipping vs CA

FACTS
Two fiber drums were shipped owned by Eastern Shipping from Japan. The shipment as insured
with a marine policy. Upon arrival in Manila unto the custody of metro Port Service, which excepted to
one drum, said to be in bad order and which damage was unknown the Mercantile Insurance Company.
Allied Brokerage Corporation received the shipment from Metro, one drum opened and without seal.
Allied delivered the shipment to the consignee’s warehouse. The latter excepted to one drum which
contained spillages while the rest of the contents was adulterated/fake. As consequence of the loss, the
insurance company paid the consignee, so that it became subrogated to all the rights of action of
consignee against the defendants Eastern Shipping, Metro Port and Allied Brokerage. The insurance
company filed before the trial court. The trial court ruled in favor of plaintiff an ordered defendants to pay
the former with present legal interest of 12% per annum from the date of the filing of the complaint. On
appeal by defendants, the appellate court denied the same and affirmed in toto the decision of the trial
court.

ISSUE
(1) Whether the applicable rate of legal interest is 12% or 6%.

(2) Whether the payment of legal interest on the award for loss or damage is to be computed from the time
the complaint is filed from the date the decision appealed from is rendered.

3. whether or not a claim for damage sustained on a shipment of goods can be a solidary,
or joint and several, liability of the common carrier, the arrastre operator and the customs
broker;

HELD
(1) The Court held that the legal interest is 6% computed from the decision of the court a quo.
When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damaes awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest shall be adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty.

When the judgment of the court awarding a sum of money becomes final and executor, the
rate of legal interest shall be 12% per annum from such finality until satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of money.

The interest due shall be 12% PA to be computed fro default, J or EJD.

(2) From the date the judgment is made. Where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or EJ but when such
certainty cannot be so reasonably established at the time the demand is made, the interest shll begin to
run only from the date of judgment of the court is made

YES, it is solidary. Since it is the duty of the ARRASTRE to take good care of the goods that
are in its custody and to deliver them in good condition to the consignee, such responsibility
also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore
charged with the obligation to deliver the goods in good condition to the consignee.
--The common carrier's duty to observe the requisite diligence in the shipment of goods
lasts from the time the articles are surrendered to or unconditionally placed in the
possession of, and received by, the carrier for transportation until delivered to, or until the
lapse of a reasonable time for their acceptance by, the person entitled to receive them

DELSAN TRANSPORT LINES, INC., vs CA

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport
Lines, Inc., for a period of 1 year whereby the said common carrier agreed to transport Caltex’s
industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country.

Under the contract, petitioner took on board its vessel, MT Maysun, industrial fuel oil of Caltex
to be delivered tothe Caltex Oil Terminal in Zamboanga City. The shipment was insured with the
private respondent, American Home Assurance Corporation.

The vessel sank taking with it the entire cargo of fuel oil. Private respondent paid Caltex the sum
of P5,096,635.57 representing the insured value of the lost cargo. Exercising its right of
subrogation the private respondent demanded of the petitioner the sameamount it paid to Caltex.
 Due to its failure to collect from the petitioner despite prior demand, private respondent filed a
complaint with the RTC for collection of a sum of money. The trial court dismissed the
complaint against herein petitioner. The trial court found that the vessel, MT Maysun, was
seaworthy to undertake the voyage as determined by the Philippine Coast Guard per Survey
Certificate Report No. M5-016-MH upon inspection during its annual dry-docking and that the
incident was caused by unexpected inclement weather condition or force majeure, thus
exempting the common carrier (herein petitioner) from liability for the loss of its cargo.

The decision of the trial court was reversed by the Court of Appeals. In the absence of any
explanation as to what may have caused the sinking of the vessel coupled with the finding that
the same was improperly manned, the appellate court ruled that the petitioner is liable on its
obligation as common carrier to herein private respondent insurance company as subrogee of
Caltex.

ISSUE: Whether the payment made by the private respondent to Caltex for the insured value of
the lost cargo amounted to an admission that the vessel was seaworthy, thus precluding any
action for recovery against the petitioner.

RULING:

NO. The payment made by the private respondent for the insured value of the lost cargo
operates as waiver of its (private respondent) right to enforce the term of the implied warranty
against Caltex under the marine insurance policy. However, the same cannot be validly
interpreted as an automatic admission of the vessel’s seaworthiness by the private respondent as
to foreclose recourse against the petitioner for any liability under its contractual obligation as a
common carrier. The fact of payment grants the private respondent subrogatory right which
enables it to exercise

Eastern Shipping vs CA

FACTS
Two fiber drums were shipped owned by Eastern Shipping from Japan. The shipment as insured
with a marine policy. Upon arrival in Manila unto the custody of metro Port Service, which excepted to
one drum, said to be in bad order and which damage was unknown the Mercantile Insurance Company.
Allied Brokerage Corporation received the shipment from Metro, one drum opened and without seal.
Allied delivered the shipment to the consignee’s warehouse. The latter excepted to one drum which
contained spillages while the rest of the contents was adulterated/fake. As consequence of the loss, the
insurance company paid the consignee, so that it became subrogated to all the rights of action of
consignee against the defendants Eastern Shipping, Metro Port and Allied Brokerage. The insurance
company filed before the trial court. The trial court ruled in favor of plaintiff an ordered defendants to pay
the former with present legal interest of 12% per annum from the date of the filing of the complaint. On
appeal by defendants, the appellate court denied the same and affirmed in toto the decision of the trial
court.

ISSUE
(1) Whether the applicable rate of legal interest is 12% or 6%.

(2) Whether the payment of legal interest on the award for loss or damage is to be computed from the time
the complaint is filed from the date the decision appealed from is rendered.

3. whether or not a claim for damage sustained on a shipment of goods can be a solidary,
or joint and several, liability of the common carrier, the arrastre operator and the customs
broker;

HELD
(1) The Court held that the legal interest is 6% computed from the decision of the court a quo.
When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damaes awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest shall be adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty.
 When the judgment of the court awarding a sum of money becomes final and executor, the
rate of legal interest shall be 12% per annum from such finality until satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of money.

The interest due shall be 12% PA to be computed fro default, J or EJD.

(2) From the date the judgment is made. Where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or EJ but when such
certainty cannot be so reasonably established at the time the demand is made, the interest shll begin to
run only from the date of judgment of the court is made

YES, it is solidary. Since it is the duty of the ARRASTRE to take good care of the goods that
are in its custody and to deliver them in good condition to the consignee, such responsibility
also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore
charged with the obligation to deliver the goods in good condition to the consignee.
--The common carrier's duty to observe the requisite diligence in the shipment of goods
lasts from the time the articles are surrendered to or unconditionally placed in the
possession of, and received by, the carrier for transportation until delivered to, or until the
lapse of a reasonable time for their acceptance by, the person entitled to receive them

DELSAN TRANSPORT LINES, INC., vs CA

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport
Lines, Inc., for a period of 1 year whereby the said common carrier agreed to transport Caltex’s
industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country.

Under the contract, petitioner took on board its vessel, MT Maysun, industrial fuel oil of Caltex
to be delivered tothe Caltex Oil Terminal in Zamboanga City. The shipment was insured with the
private respondent, American Home Assurance Corporation.

The vessel sank taking with it the entire cargo of fuel oil. Private respondent paid Caltex the sum
of P5,096,635.57 representing the insured value of the lost cargo. Exercising its right of
subrogation the private respondent demanded of the petitioner the sameamount it paid to Caltex.

Due to its failure to collect from the petitioner despite prior demand, private respondent filed a
complaint with the RTC for collection of a sum of money. The trial court dismissed the
complaint against herein petitioner. The trial court found that the vessel, MT Maysun, was
seaworthy to undertake the voyage as determined by the Philippine Coast Guard per Survey
Certificate Report No. M5-016-MH upon inspection during its annual dry-docking and that the
incident was caused by unexpected inclement weather condition or force majeure, thus
exempting the common carrier (herein petitioner) from liability for the loss of its cargo.

The decision of the trial court was reversed by the Court of Appeals. In the absence of any
explanation as to what may have caused the sinking of the vessel coupled with the finding that
the same was improperly manned, the appellate court ruled that the petitioner is liable on its
obligation as common carrier to herein private respondent insurance company as subrogee of
Caltex.

ISSUE: Whether the payment made by the private respondent to Caltex for the insured value of
the lost cargo amounted to an admission that the vessel was seaworthy, thus precluding any
action for recovery against the petitioner.

RULING:

NO. The payment made by the private respondent for the insured value of the lost cargo
operates as waiver of its (private respondent) right to enforce the term of the implied warranty
against Caltex under the marine insurance policy. However, the same cannot be validly
interpreted as an automatic admission of the vessel’s seaworthiness by the private respondent as
to foreclose recourse against the petitioner for any liability under its contractual obligation as a
 common carrier. The fact of payment grants the private respondent subrogatory right which
enables it to exercise

Eastern Shipping vs CA

FACTS
Two fiber drums were shipped owned by Eastern Shipping from Japan. The shipment as insured
with a marine policy. Upon arrival in Manila unto the custody of metro Port Service, which excepted to
one drum, said to be in bad order and which damage was unknown the Mercantile Insurance Company.
Allied Brokerage Corporation received the shipment from Metro, one drum opened and without seal.
Allied delivered the shipment to the consignee’s warehouse. The latter excepted to one drum which
contained spillages while the rest of the contents was adulterated/fake. As consequence of the loss, the
insurance company paid the consignee, so that it became subrogated to all the rights of action of
consignee against the defendants Eastern Shipping, Metro Port and Allied Brokerage. The insurance
company filed before the trial court. The trial court ruled in favor of plaintiff an ordered defendants to pay
the former with present legal interest of 12% per annum from the date of the filing of the complaint. On
appeal by defendants, the appellate court denied the same and affirmed in toto the decision of the trial
court.

ISSUE
(1) Whether the applicable rate of legal interest is 12% or 6%.

(2) Whether the payment of legal interest on the award for loss or damage is to be computed from the time
the complaint is filed from the date the decision appealed from is rendered.

3. whether or not a claim for damage sustained on a shipment of goods can be a solidary,
or joint and several, liability of the common carrier, the arrastre operator and the customs
broker;

HELD
(1) The Court held that the legal interest is 6% computed from the decision of the court a quo.
When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damaes awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest shall be adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty.

When the judgment of the court awarding a sum of money becomes final and executor, the
rate of legal interest shall be 12% per annum from such finality until satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of money.

The interest due shall be 12% PA to be computed fro default, J or EJD.

(2) From the date the judgment is made. Where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or EJ but when such
certainty cannot be so reasonably established at the time the demand is made, the interest shll begin to
run only from the date of judgment of the court is made

YES, it is solidary. Since it is the duty of the ARRASTRE to take good care of the goods that
are in its custody and to deliver them in good condition to the consignee, such responsibility
also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore
charged with the obligation to deliver the goods in good condition to the consignee.
--The common carrier's duty to observe the requisite diligence in the shipment of goods
lasts from the time the articles are surrendered to or unconditionally placed in the
possession of, and received by, the carrier for transportation until delivered to, or until the
lapse of a reasonable time for their acceptance by, the person entitled to receive them

DELSAN TRANSPORT LINES, INC., vs CA

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport
Lines, Inc., for a period of 1 year whereby the said common carrier agreed to transport Caltex’s
industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country.
 Under the contract, petitioner took on board its vessel, MT Maysun, industrial fuel oil of Caltex
to be delivered tothe Caltex Oil Terminal in Zamboanga City. The shipment was insured with the
private respondent, American Home Assurance Corporation.

The vessel sank taking with it the entire cargo of fuel oil. Private respondent paid Caltex the sum
of P5,096,635.57 representing the insured value of the lost cargo. Exercising its right of
subrogation the private respondent demanded of the petitioner the sameamount it paid to Caltex.

Due to its failure to collect from the petitioner despite prior demand, private respondent filed a
complaint with the RTC for collection of a sum of money. The trial court dismissed the
complaint against herein petitioner. The trial court found that the vessel, MT Maysun, was
seaworthy to undertake the voyage as determined by the Philippine Coast Guard per Survey
Certificate Report No. M5-016-MH upon inspection during its annual dry-docking and that the
incident was caused by unexpected inclement weather condition or force majeure, thus
exempting the common carrier (herein petitioner) from liability for the loss of its cargo.

The decision of the trial court was reversed by the Court of Appeals. In the absence of any
explanation as to what may have caused the sinking of the vessel coupled with the finding that
the same was improperly manned, the appellate court ruled that the petitioner is liable on its
obligation as common carrier to herein private respondent insurance company as subrogee of
Caltex.

ISSUE: Whether the payment made by the private respondent to Caltex for the insured value of
the lost cargo amounted to an admission that the vessel was seaworthy, thus precluding any
action for recovery against the petitioner.

RULING:

NO. The payment made by the private respondent for the insured value of the lost cargo
operates as waiver of its (private respondent) right to enforce the term of the implied warranty
against Caltex under the marine insurance policy. However, the same cannot be validly
interpreted as an automatic admission of the vessel’s seaworthiness by the private respondent as
to foreclose recourse against the petitioner for any liability under its contractual obligation as a
common carrier. The fact of payment grants the private respondent subrogatory right which
enables it to exercise

Eastern Shipping vs CA

FACTS
Two fiber drums were shipped owned by Eastern Shipping from Japan. The shipment as insured
with a marine policy. Upon arrival in Manila unto the custody of metro Port Service, which excepted to
one drum, said to be in bad order and which damage was unknown the Mercantile Insurance Company.
Allied Brokerage Corporation received the shipment from Metro, one drum opened and without seal.
Allied delivered the shipment to the consignee’s warehouse. The latter excepted to one drum which
contained spillages while the rest of the contents was adulterated/fake. As consequence of the loss, the
insurance company paid the consignee, so that it became subrogated to all the rights of action of
consignee against the defendants Eastern Shipping, Metro Port and Allied Brokerage. The insurance
company filed before the trial court. The trial court ruled in favor of plaintiff an ordered defendants to pay
the former with present legal interest of 12% per annum from the date of the filing of the complaint. On
appeal by defendants, the appellate court denied the same and affirmed in toto the decision of the trial
court.

ISSUE
(1) Whether the applicable rate of legal interest is 12% or 6%.

(2) Whether the payment of legal interest on the award for loss or damage is to be computed from the time
the complaint is filed from the date the decision appealed from is rendered.

3. whether or not a claim for damage sustained on a shipment of goods can be a solidary,
or joint and several, liability of the common carrier, the arrastre operator and the customs
broker;

HELD
(1) The Court held that the legal interest is 6% computed from the decision of the court a quo.
When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damaes awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest shall be adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty.

When the judgment of the court awarding a sum of money becomes final and executor, the
rate of legal interest shall be 12% per annum from such finality until satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of money.

The interest due shall be 12% PA to be computed fro default, J or EJD.

(2) From the date the judgment is made. Where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or EJ but when such
certainty cannot be so reasonably established at the time the demand is made, the interest shll begin to
run only from the date of judgment of the court is made

YES, it is solidary. Since it is the duty of the ARRASTRE to take good care of the goods that
are in its custody and to deliver them in good condition to the consignee, such responsibility
also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore
charged with the obligation to deliver the goods in good condition to the consignee.
--The common carrier's duty to observe the requisite diligence in the shipment of goods
lasts from the time the articles are surrendered to or unconditionally placed in the
possession of, and received by, the carrier for transportation until delivered to, or until the
lapse of a reasonable time for their acceptance by, the person entitled to receive them

DELSAN TRANSPORT LINES, INC., vs CA

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport
Lines, Inc., for a period of 1 year whereby the said common carrier agreed to transport Caltex’s
industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country.

Under the contract, petitioner took on board its vessel, MT Maysun, industrial fuel oil of Caltex
to be delivered tothe Caltex Oil Terminal in Zamboanga City. The shipment was insured with the
private respondent, American Home Assurance Corporation.

The vessel sank taking with it the entire cargo of fuel oil. Private respondent paid Caltex the sum
of P5,096,635.57 representing the insured value of the lost cargo. Exercising its right of
subrogation the private respondent demanded of the petitioner the sameamount it paid to Caltex.

Due to its failure to collect from the petitioner despite prior demand, private respondent filed a
complaint with the RTC for collection of a sum of money. The trial court dismissed the
complaint against herein petitioner. The trial court found that the vessel, MT Maysun, was
seaworthy to undertake the voyage as determined by the Philippine Coast Guard per Survey
Certificate Report No. M5-016-MH upon inspection during its annual dry-docking and that the
incident was caused by unexpected inclement weather condition or force majeure, thus
exempting the common carrier (herein petitioner) from liability for the loss of its cargo.

The decision of the trial court was reversed by the Court of Appeals. In the absence of any
explanation as to what may have caused the sinking of the vessel coupled with the finding that
the same was improperly manned, the appellate court ruled that the petitioner is liable on its
obligation as common carrier to herein private respondent insurance company as subrogee of
Caltex.

ISSUE: Whether the payment made by the private respondent to Caltex for the insured value of
the lost cargo amounted to an admission that the vessel was seaworthy, thus precluding any
action for recovery against the petitioner.
 RULING:

NO. The payment made by the private respondent for the insured value of the lost cargo
operates as waiver of its (private respondent) right to enforce the term of the implied warranty
against Caltex under the marine insurance policy. However, the same cannot be validly
interpreted as an automatic admission of the vessel’s seaworthiness by the private respondent as
to foreclose recourse against the petitioner for any liability under its contractual obligation as a
common carrier. The fact of payment grants the private respondent subrogatory right which
enables it to exercise

Eastern Shipping vs CA

FACTS
Two fiber drums were shipped owned by Eastern Shipping from Japan. The shipment as insured
with a marine policy. Upon arrival in Manila unto the custody of metro Port Service, which excepted to
one drum, said to be in bad order and which damage was unknown the Mercantile Insurance Company.
Allied Brokerage Corporation received the shipment from Metro, one drum opened and without seal.
Allied delivered the shipment to the consignee’s warehouse. The latter excepted to one drum which
contained spillages while the rest of the contents was adulterated/fake. As consequence of the loss, the
insurance company paid the consignee, so that it became subrogated to all the rights of action of
consignee against the defendants Eastern Shipping, Metro Port and Allied Brokerage. The insurance
company filed before the trial court. The trial court ruled in favor of plaintiff an ordered defendants to pay
the former with present legal interest of 12% per annum from the date of the filing of the complaint. On
appeal by defendants, the appellate court denied the same and affirmed in toto the decision of the trial
court.

ISSUE
(1) Whether the applicable rate of legal interest is 12% or 6%.

(2) Whether the payment of legal interest on the award for loss or damage is to be computed from the time
the complaint is filed from the date the decision appealed from is rendered.

3. whether or not a claim for damage sustained on a shipment of goods can be a solidary,
or joint and several, liability of the common carrier, the arrastre operator and the customs
broker;

HELD
(1) The Court held that the legal interest is 6% computed from the decision of the court a quo.
When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the
amount of damaes awarded may be imposed at the discretion of the court at the rate of 6% per annum.
No interest shall be adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty.

When the judgment of the court awarding a sum of money becomes final and executor, the
rate of legal interest shall be 12% per annum from such finality until satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of money.

The interest due shall be 12% PA to be computed fro default, J or EJD.

(2) From the date the judgment is made. Where the demand is established with reasonable
certainty, the interest shall begin to run from the time the claim is made judicially or EJ but when such
certainty cannot be so reasonably established at the time the demand is made, the interest shll begin to
run only from the date of judgment of the court is made

YES, it is solidary. Since it is the duty of the ARRASTRE to take good care of the goods that
are in its custody and to deliver them in good condition to the consignee, such responsibility
also devolves upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore
charged with the obligation to deliver the goods in good condition to the consignee.
--The common carrier's duty to observe the requisite diligence in the shipment of goods
lasts from the time the articles are surrendered to or unconditionally placed in the
possession of, and received by, the carrier for transportation until delivered to, or until the
lapse of a reasonable time for their acceptance by, the person entitled to receive them

DELSAN TRANSPORT LINES, INC., vs CA

Caltex Philippines entered into a contract of affreightment with the petitioner, Delsan Transport
Lines, Inc., for a period of 1 year whereby the said common carrier agreed to transport Caltex’s
industrial fuel oil from the Batangas-Bataan Refinery to different parts of the country.

Under the contract, petitioner took on board its vessel, MT Maysun, industrial fuel oil of Caltex
to be delivered tothe Caltex Oil Terminal in Zamboanga City. The shipment was insured with the
private respondent, American Home Assurance Corporation.

The vessel sank taking with it the entire cargo of fuel oil. Private respondent paid Caltex the sum
of P5,096,635.57 representing the insured value of the lost cargo. Exercising its right of
subrogation the private respondent demanded of the petitioner the sameamount it paid to Caltex.

Due to its failure to collect from the petitioner despite prior demand, private respondent filed a
complaint with the RTC for collection of a sum of money. The trial court dismissed the
complaint against herein petitioner. The trial court found that the vessel, MT Maysun, was
seaworthy to undertake the voyage as determined by the Philippine Coast Guard per Survey
Certificate Report No. M5-016-MH upon inspection during its annual dry-docking and that the
incident was caused by unexpected inclement weather condition or force majeure, thus
exempting the common carrier (herein petitioner) from liability for the loss of its cargo.

The decision of the trial court was reversed by the Court of Appeals. In the absence of any
explanation as to what may have caused the sinking of the vessel coupled with the finding that
the same was improperly manned, the appellate court ruled that the petitioner is liable on its
obligation as common carrier to herein private respondent insurance company as subrogee of
Caltex.

ISSUE: Whether the payment made by the private respondent to Caltex for the insured value of
the lost cargo amounted to an admission that the vessel was seaworthy, thus precluding any
action for recovery against the petitioner.

RULING:

NO. The payment made by the private respondent for the insured value of the lost cargo
operates as waiver of its (private respondent) right to enforce the term of the implied warranty
against Caltex under the marine insurance policy. However, the same cannot be validly
interpreted as an automatic admission of the vessel’s seaworthiness by the private respondent as
to foreclose recourse against the petitioner for any liability under its contractual obligation as a
common carrier. The fact of payment grants the private respondent subrogatory right which
enables it to exercise