EVERETT STEAMSHIP v.

CA (Steph)
October 8, 1998 | Martinez, , J. | Special Torts: Judicial Vigilance involving the shipment of its goods to its customers. The shipper could not have
known or should know the stipulations in the bill of lading and there it should have
PETITIONER: Everett Steamship Corporation declared a higher valuation of the goods shipped. Moreover, Maruman Trading has
RESPONDENTS: Court of Appeals, Hernandez Trading Co. Inc. not been heard to complain that it has been deceived or rushed into agreeing to ship
the cargo in petitioner's vessel. In fact, it was not even impleaded in this case.
SUMMARY: Hernandez Trading Co., Inc. (Hernandez) imported 3 crates of bus
spare parts (MARCO C/No. 12, MARCO C/No. 13 and MARCO C/No. 14), from DOCTRINE: Greater vigilance is required of the courts when dealing with
Maruman Trading Company, Ltd. (Maruman), a foreign corporation based in contracts of adhesion in that the said contracts must be carefully scrutinized
Japan. The crates (covered by Bill of Lading No. NGO53MN) were shipped on "in order to shield the unwary (or weaker party) from deceptive schemes
board “ADELFAEVERETTE,” a vessel owned by Everett Orient Lines. Upon contained in ready-made covenants"
arrival at the port of Manila, it was discovered that the crate marked MARCO
C/No. 14 was missing. Hernandez made a formal claim for Y1,552,500.00, as
shown in an Invoice No. MTM-941, dated November 14, 1991. Everett FACTS:
Streamship Corp. offered to pay only Y100,000.00 the maximum amount stipulated
under Clause 18 of the covering bill of lading. Hernandez rejected the offer and 1. Private respondent imported three crates of bus spare parts marked as
thereafter instituted a suit for collection. The Trial Court decided in favor of MARCO C/No. 12, MARCO C/No. 13 and MARCO C/No. 14, from its
Hernandez. The Court of Appeals Affirmed but deleted the award of attorney’s supplier, Maruman Trading Company, Ltd. (Maruman Trading), a foreign
fees. corporation based in Inazawa, Aichi, Japan. The crates were shipped from
Nagoya, Japan to Manila on board "ADELFAEVERETTE," a vessel owned
ISSUE: W/N Everett is liable for the actual value of the lost goods OR the by petitioner's principal, Everett Orient Lines. The said crates were covered
maximum amount as stipulated in bill of lading? – NO, only liable for the by Bill of Lading No. NGO53MN.
amount as stated in the Bill of Lading. 2. Upon arrival at the port of Manila, it was discovered that the crate marked
MARCO C/No. 14 was missing.
A stipulation in the bill of lading limiting the common carrier's liability for loss or 3. Private respondent then filed a formal claim upon petitioner for the value of
destruction of a cargo to a certain sum, unless the shipper or owner declares a the lost cargo amounting to One Million Five Hundred Fifty Two
greater value, is sanctioned by law. In order to be valid, the stipulation must be Thousand Five Hundred (Y1,552,500.00) Yen, the amount shown in an
"reasonable and just under the circumstances, and has been freely and fairly Invoice No. MTM-941, dated November 14, 1991.
agreed upon." In the present case, it can be gleaned that the carrier shall not be 4. However, petitioner offered to pay only One Hundred Thousand
liable for any loss or damage exceeding Y100,000 unless the value of the goods (Y100,000.00) Yen, the maximum amount stipulated under Clause 18 of
higher than this amount is declared in writing by shipper and extra freight is paid the covering bill of lading which limits the liability of petitioner. (market
as required. Considering that the shipper did not declare a higher valuation, it value of lost shipment v Maximum Amount as stipulated in the Bill of
Lading)
had itself to blame for not complying with the stipulations. 5. Private respondent rejected the offer and thereafter instituted a suit for
collection docketed as Civil Case No. C-15532, against petitioner before the
Moreover, contracts of adhesion are not invalid per se. The one who adheres to the Regional Trial Court of Caloocan City, Branch 126
contract is in reality free to reject it entirely; if he adheres, he gives his consent. 6. RTC: Rendered judgment in favor of private respondent. Ordered Everett to
However, Greater vigilance, however, is required of the courts when dealing pay the actual value of the lost cargo as well as damages, costs of suit and
with contracts of adhesion in that the said contracts must be carefully attorney’s fees. It opined that since the terms at the back of the Bill of
scrutinized "in order to shield the unwary (or weaker party) from deceptive Lading was not signed by the shipper (Hernandez Trading), then they are
schemes contained in ready-made covenants," such as the bill of lading in not bound by such stipulation limiting the liability of the shipper.
question. 7. CA: Affirmed the decision of the RTC. Hernandez Trading not privy to
contract between Maruman and Everett.
In this case, the shipper Maruman has been extensively engaged in the trading
business. It can not be said to be ignorant of the business transactions it entered into
ISSUE/s: WoN Everett is liable for the actual value of the lost goods OR the stipulations in the bill of lading and there it should have declared a
maximum amount as stipulated in bill of lading? – NO, only liable for the amount higher valuation of the goods shipped. Moreover, Maruman Trading
as stated in the Bill of Lading. has not been heard to complain that it has been deceived or rushed into
agreeing to ship the cargo in petitioner's vessel. In fact, it was not even
RULING: WHEREFORE, the decision of the Court of Appeals dated June 14, 1995 impleaded in this case.
in C.A.-G.R. CV No. 42803 is hereby REVERSED and SET ASIDE. 9. Moreover, private respiondent as the consignee can still be bound by the
contract of carriage between the shipper (Maruman) and the carrier
RATIO: (Everett).This stems from either a relation of agency that may exist between
him and the shipper or consignor, or his status as stranger in whose favor
1. A stipulation in the bill of lading limiting the common carrier's liability for some stipulation is made in said contract, and who becomes a party thereto
loss or destruction of a cargo to a certain sum, unless the shipper or owner when he demands fulfillment of that stipulation, in this case the delivery of
declares a greater value, is sanctioned by law. It has also been consistently the goods or cargo shipped.
upheld by the Court in a long line of jurisprudence. 10. When private respondent formally claimed reimbursement for the missing
2. In order to be valid, the stipulation must be "reasonable and just under goods from petitioner and subsequently filed a case against the latter based
the circumstances, and has been freely and fairly agreed upon." on the very same bill of lading, it (private respondent) accepted the
3. In the present case, it can be gleaned that the carrier shall not be liable for provisions of the contract and thereby made itself a party thereto, or at least
any loss or damage exceeding Y100,000 unless the value of the goods has come to court to enforce it.
higher than this amount is declared in writing by shipper and extra freight 11. Lastly, it was proven by the petitioner that it did not know of the contents,
is paid as required. quantity and value of the shipment contrary to what private respondent is
4. The above stipulations are, to our mind, reasonable and just. In the bill of contending. A mere perusal of the Bill of Lading would show that to be held
lading, the carrier made it clear that its liability would only be up to One liable for the actual amount, the shipper should declared in writing a higher
Hundred Thousand (Y100,000.00) Yen. However, the shipper, Maruman valuation of its goods before receipt thereof by the carrier and insert the said
Trading, had the option to declare a higher valuation if the value of its cargo declaration in the bill of lading, with the extra freight paid. This was never
was higher than the limited liability of the carrier. Considering that the complied in this case.
shipper did not declare a higher valuation, it had itself to blame for not
complying with the stipulations.
5. The fact that the conditions were written in small letters does not make
the bill of lading invalid.
6. Furthermore, contracts of adhesion are not invalid per se. The one who
adheres to the contract is in reality free to reject it entirely; if he adheres he
gives his consent.'
7. Greater vigilance, however, is required of the courts when dealing with
contracts of adhesion in that the said contracts must be carefully
scrutinized "in order to shield the unwary (or weaker party) from
deceptive schemes contained in ready-made covenants," such as the bill
of lading in question. The stringent requirement which the courts are
enjoined to observe is in recognition of Article 24 of the Civil Code which
mandates that " (i)n all contractual, property or other relations, when one of
the parties is at a disadvantage on account of his moral dependence,
ignorance, indigence, mental weakness, tender age or other handicap, the
courts must be vigilant for his protection."
8. In this case, the shipper Maruman has been extensively engaged in the
trading business. It can not be said to be ignorant of the business
transactions it entered into involving the shipment of its goods to its
customers. The shipper could not have known or should know the