G.R. No. L-49407, 19 August 1988, 164 SCRA 593


NDC as the first preferred mortgagee of three ocean going vessels including one with the name ‘Dona Nati’ appointed MCP as its agent to manage and operate said vessel for and in its behalf and account. Thus, the E. Philipp Corporation of New York loaded on board the vessel “Dona Nati” at San Francisco, California, a total of 1,200 bales of American raw cotton consigned to the order of Manila Banking Corporation, Manila and the People’s Bank and Trust Company acting for and in behalf of the Pan Asiatic Commercial Company, Inc., who represents Riverside Mills Corporation. Also loaded on the same vessel at Tokyo, Japan, were the cargo of Kyokuto Boekui, Kaisa, Ltd., consigned to the order of Manila Banking Corporation consisting of 200 cartons of sodium lauryl sulfate and 10 cases of aluminum foil.

En route to Manila the vessel Dofia Nati figured in a collision at Ise Bay, Japan with a Japanese vessel ‘SS Yasushima Maru’ as a result of which 550 bales of aforesaid cargo of American raw cotton were lost and/or destroyed. The damaged and lost cargoes were paid by the insurer to the Riverside Mills Corporation as holder of the negotiable bills of lading duly endorsed.

Also considered totally lost were the aforesaid shipment of Kyokuto, Boekui Kaisa Ltd., consigned to the order of Manila Banking Corporation, Manila, acting for Guilcon, Manila. The total loss was paid by the insurer to Guilcon as holder of the duly endorsed bill of lading. Hence, plaintiff filed this complaint to recover said amount from the NDC and MCP as owner and ship agent respectively, of the said ‘Dofia Nati’ vessel.


Which laws govern loss or destruction of goods due to collision of vessels outside Philippine waters?


This issue has already been laid to rest by this Court in Eastern Shipping Lines Inc. v. IAC where it was held under similar circumstance “that the law of the country to which the goods are to be transported governs the liability of the common carrier in case of their loss, destruction or deterioration” (Article 1753, Civil Code). Thus, the rule was specifically laid down that for cargoes transported from Japan to the Philippines, the liability of the carrier is governed primarily by the Civil Code and in all matters not regulated by said Code, the rights and obligations of common carrier shall be governed by the Code of commerce and by laws (Article 1766, Civil Code). Hence, the Carriage of Goods by Sea Act, a special law, is merely suppletory to the provision of the Civil Code.

It is immaterial that the collision actually occurred in foreign waters, such as Ise Bay, Japan. It appears, however, that collision falls among matters not specifically regulated by the Civil Code, so that no reversible error can be found in respondent courses application to the case at bar of Articles 826 to 839, Book Three of the Code of Commerce, which deal exclusively with collision of vessels.

*Case digest by Geraldine M. Cabucos, LLB-IV, Andres Bonifacio Law School, SY 2018-2019