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Maersk Line vs. Court of Appeals and Efren V. Castillo

The Supreme Court ruled that Maersk Line was liable for the delayed delivery of Efren Castillo's shipment of empty gelatin capsules from the US to the Philippines. While carriers are not obligated to deliver by a specific date unless agreed to, delivery must still occur within a reasonable time frame. The two month and seven day delay was deemed unreasonable. Additionally, Maersk Line failed to explain the cause of the delay, including the misshipment of the goods to the wrong US port. This constituted gross negligence and entitled Castillo to damages.

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44 views

Maersk Line vs. Court of Appeals and Efren V. Castillo

The Supreme Court ruled that Maersk Line was liable for the delayed delivery of Efren Castillo's shipment of empty gelatin capsules from the US to the Philippines. While carriers are not obligated to deliver by a specific date unless agreed to, delivery must still occur within a reasonable time frame. The two month and seven day delay was deemed unreasonable. Additionally, Maersk Line failed to explain the cause of the delay, including the misshipment of the goods to the wrong US port. This constituted gross negligence and entitled Castillo to damages.

Uploaded by

jovelyn davo
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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MAERSK LINE vs. COURT OF APPEALS AND EFREN V. CASTILLO


 G.R. No. 94761 May 17, 1993

Facts:

Maersk Line is engaged in the transportation of goods by sea, doing business in the Philippines
through its general agent Compania General de Tabacos de Filipinas.

Efren Castillo, on the other hand, is the proprietor of Ethegal Laboratories, a firm engaged in
the manutacture of pharmaceutical products.

Mr. Castillo ordered from Eli Lilly. Inc. 600,000 empty gelatin capsules. The capsules were
placed in six (6) drums of 100,000 capsules each.

Shipper Lilly Inc. advised Mr. Castillo that the 600,000 empty gelatin capsules were already
shipped on board MV "Anders Maerskline" for shipment to the Philippines via Oakland,
California. In the Memorandum of shipment, shipper specified the date of arrival to be April 3,
1977.

For reasons unknown, said cargo of capsules were mishipped and diverted to Richmond,
Virginia, USA and then transported back Oakland, Califorilia. The goods finally arrived in the
Philippines on June 10, 1977 or after two (2) months from the date specified in the
memorandum.

Efren Castillo as consignee refused to take delivery of the goods on account of its failure to
arrive on time. He filed an action before the court for rescission of contract with damages
against Eli Lilly, Inc. alleging gross negligence and undue delay in the delivery of the goods.

Denying that it committed breach of contract, Eli lily filed a cross-claim against Maersk line alleg
that the subject shipment was transported in accordance with the provisions of the covering bill
of lading and that its liability under the law on transportation of good attaches only in case of
loss, destruction or deterioration of the goods as provided for in Article 1734 of Civil Code; and
further alleged that the delay in the arrival of the subject merchandise was due solely to the
gross negligence of petitioner Maersk Line.

Compalint against Eli Lily Inc. was dismissed.

The trial court rendered judgment in favor of Mr. Castillo and declaring Maersk Line Liable. On
appeal, respondent court affirmed with modifications the lower court's decision.

ISSUE: WON the carrier is liable for the delay in the delivery of the shipment.
HELD:

Yes. While it is true that common carriers are not obligated by law to carry and to deliver
merchandise, and persons are not vested with the right to prompt delivery, unless such
common carriers previously assume the obligation to deliver at a given date or time, delivery of
shipment or cargo should at least be made within a reasonable time. A delay in delivery of
gelatin capsules for use in pharmaceutical products for a period of two months and sevens days
is considered beyond the realm of reasonableness.

Moreover, failure of the carrier to explain cause of delay in the delivery of the shipment makes
it liable for breach of contract of carriage through gross negligence amounting to bad faith,
entitling consignee’s recovery of moral damages. The unexplained misshipment of the goods by
the common carrier constitutes gross carelessness or negligence amounting to misconduct
which justifies damages to the aggrieved party.

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