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Eastern Shipping Lines vs. CA (GR 97412, 12 July 1994)En Banc, Vitug (J): 13 concur, 1 took no partFacts:On 4 December 1981, 2 fiber drums of riboflavin were shipped from Yokohama, Japan for deliveryves se l S S Eastern C o m e t owned byEas tern Shi ppi ng Line s und er Bill of Ladi ng YMA- 8. The shi pmen twas insured under Mercantile Insurance Companys MarineInsurance Policy 81/01177 for P36,382,466.38.Upon arrival of the shipment in Manila on 12 December 1981, it was discharged unto the custodyof MetroPort Services, Inc. The latter excepted to one drum, said to be in bad order, which damage was unknown toMercantile Insurance. On 7January 1982, Allied Brokerage Corporation received the shipment from MetroPo r t S e r v i c e , o n e d r u m o p e n e d a n d w i t h o u t
s ea l . On Ja nu ar y 8 an d 14 , 19 82 , Al l i ed Br ok er ag e ma de deliveries of the shipment to the consignees warehouse. Thelatter excepted to one drum which containedspilla ges , whi le the res t of the cont ents was adu lter ated /fa ke. Due to thelosses/damage sustained by saiddrum, the consignee suffered losses totaling P19,032.95, due to the fault andnegligence of the shippingcompany, arrastre operator and broker-forwarder. Claims were presented against them who failed and refusedtopay the same. As a consequence of the losses sustained, Mercantile Insurance was compelled to pay theconsignee P19,032.95 under theaforestated marine insurance policy, so that it became subrogated to all therights of action of said consignee against the shipping company, etc.After trial, the trialcourt rendered judgment (1) ordering the shipping company, the arrastre operator and thebroker-forwarder to pay Mercantile Insurance, insolidum, the amount of P19,032.95 with the present legalinterest of 12% per annum from October 1, 1982, the date of filing of this complaints,until fully paid (theliability of defendant Eastern Shipping, Inc. shall not exceed US$500 per case or the CIF value of the loss,whichever is lesser,while the liability of defendant Metro Port Service, Inc. shall be to the extent of the actualin vo ic e va lu e of ea ch pa ck ag e, cr at e bo x orcontainer in no case to exceed P5,000.00 each, pursuant toSection 6.01 of the Management Contract); P3,000.00 asatto rn ey s fees, and costs; and dismissing thecounterclaims and crossclaim of defendant/cross-claimant Allied BrokerageCorporation.Dissatisfied, Eastern Shipping Lines appealed to the Court of Appeals. The Court of Appeal affirmed in totothe judgment of thecourt a quo.T h e S u p r e m e C o u r t p a r t l y g r a n t e d t h e p e t i t i o n . T h e C o u r t a f f i r m e d t h e a p p e a l e d d e c i s i o nw i t h t h e modification that the legal interest to be paid is 6% on the amount due computed from the decision, dated 3Febr ua ry 19 88 , of th ecou rt a q uo. A 1 2% int erest , in lieu of 6%, sha ll b e im pos ed on suc h am oun t u pon finality of this decision until the paymentthereof.
1 . D u r a t i o n o f c o m m o n c a r r i e r s d u t y t o o b s e r v e r e q u i s i t e d i l i g e n c eThe common carriers duty to observe the requisite diligence in the shipment of goods lasts from thetime the articles are surrendered to orunconditionally placed in the possession of, and received by, the carrierfor transportation until delivered to, or until the lapse of a reasonable timefor their acceptance, by the personentitled to receive them (Arts. 1736-1738, Civil Code; Ganzon vs. Court of Appeals, 161 SCRA 646; KuiBaivs. Dollar Steamship Lines, 52 Phil. 863).2 . P r e s u m p t i o n o f c a r r i e r s n e g l i g e n c e i n c a s e o f l o s s , d a m a g e o f g o o d s ;N o n e o f t h e e x c l u s i v e exceptions can be applied
Haystacks (Berne
Guerrero)When the goods
shipped either arelost or arrive in
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damagedcondition, apresumptionarises againstthecarrier of its
failure to observethat diligence,
and there need
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not be an expressfinding ofnegligence toholdit liable (Art.1735, Civil Code;
PhilippineNational
Railways vs.
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Court of Appeals,139 SCRA 87;MetroPortService vs. Courtof Appeals, 131
SCRA 365).There are, of
course,
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exceptional caseswhensuchpresumptionof fault is notobserved but
these cases,enumerated in
Article 1734 1 of
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the Civil Code,areexclusive, notone of which canbe applied to thecase at bar.3.The rationalewhy the carrier
and arrastre
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operator are made
liable in solidum
In Firemans
Fund Insurancevs. Metro Port
Services (182SCRA 455), the
Court has
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explainedinholding thecarrier and thearrastre operatorliable in solidum,
in the mannerthat The legal
relationshipbetwe
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en the consigneeand the arrastreoperator is akin tothat of a depositorand
warehouseman(Lua Kian
v.Manila
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Railroad Co., 19SCRA 5 [1967].The relationshipbetween theconsignee and the
common carrierissimilar to that
of the consignee
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and the arrastreoperator(NorthernMotors, Inc. v.Prince Line, et
al., 107 Phil.253[1960]). Since it
is the duty of the
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Arrastre to takegood care of thegoods that are inits custody andtodeliver them in
good condition tothe consignee,
such
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responsibilityalso devolvesupon the Carrier.Both theArrastreand the Carrier
are thereforecharged with the
obligation to
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deliver the goodsin goodscondition totheconsignee. Thepronouncement,
however, doesnot imply that
the arrastre
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operator and thecustomsbrokerare themselvesalways andnecessarily liable
solidarily withthe carrier, or
vice-versa, nor
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thatattendantfacts in a givencase may not varythe rule.4.First group of
cases onvariances on the
Courts ruling onlegal interest
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In the cases of thecases ofReformina v.Tomol (1985),Philippine Rabbit
Bus Lines v. Cruz(1986),Florendo
v. Ruiz (1989)
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and NationalPowerCorporation v.angas (1992), thebasic issue focus
on theapplicationof either the 6%
(under the Civil
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Code) or 12%(under theCentral BankCircular) interestperannum. It is
easily discerniblein these cases that
there has been a
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consistentholding that theCentralBankCircularimposing the
12% interest perannum applies
only to loans or
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forbearance 16 ofmoney, goodsorcredits, as wellas to judgmentsinvolving such
loan orforbearance of
money, goods or
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credits, and thatthe6% interestunder the CivilCode governswhen the
transactioninvolves the
payment of
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indemnities intheconcept ofdamage arisingfrom the breachof a delay in the
performance ofobligations in
general.
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Observe,too, thatin these cases, acommon timeframe in thecomputation of
the 6% interestper annum has
beenapplied, i.e.,
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from the time thecomplaint is fileduntil the adjudgedamount is fullypaid.5.Second group ofcases on
variances on the
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Courts ruling on
legal interest
The cases of
MalayanInsurance
Company v.Manila Port
Service (1969),
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Nakpil and Sonsv. CourtofAppeals(1988), andAmerican
ExpressInternational v.
Intermediate
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Appellate Court(1988), did notalterthepronouncedrule on the
application of the6% or 12%
interest per
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annum,depending onwhether or nottheamountinvolved is a loan
or forbearance,on the one hand,
or one of
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indemnity fordamage, on theotherhand.Unlike,however, thefirstgroupwhich remained
consistent in
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holding that therunning of thelegalinterestshould befrom the time of
the filing of thecomplaint until
fully paid, the
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secondgroupvaried onthecommencement of the runningof the legal
interest. Malayanheld that the
amount awarded
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should bearlegalinterest fromthe date of thedecision of thecourt a quo,
explaining thatif the suit were
for
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damages,unliquidated and notknown untildefinitelyascertained,
assessed anddetermined by the
courts after
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proof,then,interest shouldbe from the dateof the decision.American
ExpressInternational v.
IAC, introduced
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adifferent timeframe forreckoning the 6%interest byordering it to becomputed fromthe finality of
(the)decision
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until paid. TheNakpil and Sonscase ruled that12% interest perannum should be
imposed fromthefinality of the
decision until the
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judgment amountis paid. Thefactualcircumstancesmay have called
fordifferentapplications,
guided by the rule
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that the courts arevested withdiscretion,depending on theequitiesof each
case, on theaward of interest.
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6.Rules in the
determination oflegal interests