G.R. No.

L-36481-2 October 23, 1982

AMPARO C. SERVANDO, CLARA UY BICO, plaintiffs-appellees,

vs.
PHILIPPINE STEAM NAVIGATION CO., defendant-appellant.

Zoilo de la Cruz, Jr. & Associate for plaintiff-appellee Amparo Servando.

Benedicto, Sumbingco & Associate for appellee Clara Uy Bico.

Ross, Salcedo, del Rosario, Bito & Misa for defendant-appellant.

ESCOLIN, J.:

This appeal, originally brought to the Court of Appeals, seeks to set aside the
decision of the Court of First Instance of Negros Occidental in Civil Cases Nos. 7354
and 7428, declaring appellant Philippine Steam Navigation liable for damages for
the loss of the appellees' cargoes as a result of a fire which gutted the Bureau of
Customs' warehouse in Pulupandan, Negros Occidental.

The Court of Appeals certified the case to Us because only pure questions of law
are raised therein.

The facts culled from the pleadings and the stipulations submitted by the parties are
as follows:

On November 6, 1963, appellees Clara Uy Bico and Amparo Servando loaded on

board the appellant's vessel, FS-176, for carriage from Manila to Pulupandan,
Negros Occidental, the following cargoes, to wit:

Clara Uy Bico —

1,528 cavans of rice valued

at P40,907.50;

Amparo Servando —

44 cartons of colored paper,

toys and general merchandise valued at P1,070.50;

as evidenced by the corresponding bills of lading issued by the appellant. 1

Upon arrival of the vessel at Pulupandan, in the morning of November 18, 1963, the
cargoes were discharged, complete and in good order, unto the warehouse of the
Bureau of Customs. At about 2:00 in the afternoon of the same day, said warehouse
was razed by a fire of unknown origin, destroying appellees' cargoes. Before the fire,
however, appellee Uy Bico was able to take delivery of 907 cavans of
rice 2 Appellees' claims for the value of said goods were rejected by the appellant.

On the bases of the foregoing facts, the lower court rendered a decision, the
decretal portion of which reads as follows:

WHEREFORE, judgment is rendered as follows:

1. In case No. 7354, the defendant is hereby ordered to pay the plaintiff
Amparo C. Servando the aggregate sum of P1,070.50 with legal
interest thereon from the date of the filing of the complaint until fully
paid, and to pay the costs.

2. In case No. 7428, the defendant is hereby ordered to pay to plaintiff

Clara Uy Bico the aggregate sum of P16,625.00 with legal interest
thereon from the date of the filing of the complaint until fully paid, and
to pay the costs.

Article 1736 of the Civil Code imposes upon common carriers the duty to observe
extraordinary diligence from the moment the goods are unconditionally placed in
their possession "until the same are delivered, actually or constructively, by the
carrier to the consignee or to the person who has a right to receive them, without
prejudice to the provisions of Article 1738. "

The court a quo held that the delivery of the shipment in question to the warehouse
of the Bureau of Customs is not the delivery contemplated by Article 1736; and since
the burning of the warehouse occurred before actual or constructive delivery of the
goods to the appellees, the loss is chargeable against the appellant.

It should be pointed out, however, that in the bills of lading issued for the cargoes in
question, the parties agreed to limit the responsibility of the carrier for the loss or
damage that may be caused to the shipment by inserting therein the following
stipulation:

Clause 14. Carrier shall not be responsible for loss or damage to

shipments billed 'owner's risk' unless such loss or damage is due to
negligence of carrier. Nor shall carrier be responsible for loss or
damage caused by force majeure, dangers or accidents of the sea or
other waters; war; public enemies; . . . fire . ...
We sustain the validity of the above stipulation; there is nothing therein that is
contrary to law, morals or public policy.

Appellees would contend that the above stipulation does not bind them because it
was printed in fine letters on the back-of the bills of lading; and that they did not sign
the same. This argument overlooks the pronouncement of this Court in Ong Yiu vs.
Court of Appeals, promulgated June 29, 1979,  3 where the same issue was resolved in
this wise:

While it may be true that petitioner had not signed the plane ticket (Exh.
'12'), he is nevertheless bound by the provisions thereof. 'Such
provisions have been held to be a part of the contract of carriage, and
valid and binding upon the passenger regardless of the latter's lack of
knowledge or assent to the regulation'. It is what is known as a contract
of 'adhesion', in regards which it has been said that contracts of
adhesion wherein one party imposes a ready made form of contract on
the other, as the plane ticket in the case at bar, are contracts not
entirely prohibited. The one who adheres to the contract is in reality
free to reject it entirely; if he adheres, he gives his consent." (Tolentino,
Civil Code, Vol. IV, 1962 Ed., p. 462, citing Mr. Justice J.B.L. Reyes,
Lawyer's Journal, Jan. 31, 1951, p. 49).

Besides, the agreement contained in the above quoted Clause 14 is a mere iteration
of the basic principle of law written in Article 1 1 7 4 of the Civil Code:

Article 1174. Except in cases expressly specified by the law, or when it

is otherwise declared by stipulation, or when the nature of the
obligation requires the assumption of risk, no person shall be
responsible for those events which could not be foreseen, or which,
though foreseen, were inevitable.

Thus, where fortuitous event or force majeure is the immediate and proximate cause
of the loss, the obligor is exempt from liability for non-performance. The
Partidas, 4 the antecedent of Article 1174 of the Civil Code, defines 'caso fortuito' as 'an
event that takes place by accident and could not have been foreseen. Examples of this
are destruction of houses, unexpected fire, shipwreck, violence of robbers.'

In its dissertation of the phrase 'caso fortuito' the Enciclopedia Juridicada

Espanola 5 says: "In a legal sense and, consequently, also in relation to contracts, a
'caso fortuito' presents the following essential characteristics: (1) the cause of the
unforeseen and unexpected occurrence, or of the failure of the debtor to comply with his
obligation, must be independent of the human will; (2) it must be impossible to foresee
the event which constitutes the 'caso fortuito', or if it can be foreseen, it must be
impossible to avoid; (3) the occurrence must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner; and (4) the obligor must be free from
any participation in the aggravation of the injury resulting to the creditor." In the case at
bar, the burning of the customs warehouse was an extraordinary event which happened
independently of the will of the appellant. The latter could not have foreseen the event.

There is nothing in the record to show that appellant carrier ,incurred in delay in the
performance of its obligation. It appears that appellant had not only notified
appellees of the arrival of their shipment, but had demanded that the same be
withdrawn. In fact, pursuant to such demand, appellee Uy Bico had taken delivery of
907 cavans of rice before the burning of the warehouse.

Nor can the appellant or its employees be charged with negligence. The storage of
the goods in the Customs warehouse pending withdrawal thereof by the appellees
was undoubtedly made with their knowledge and consent. Since the warehouse
belonged to and was maintained by the government, it would be unfair to impute
negligence to the appellant, the latter having no control whatsoever over the same.

The lower court in its decision relied on the ruling laid down in Yu Biao Sontua vs.
Ossorio 6, where this Court held the defendant liable for damages arising from a fire
caused by the negligence of the defendant's employees while loading cases of gasoline
and petroleon products. But unlike in the said case, there is not a shred of proof in the
present case that the cause of the fire that broke out in the Custom's warehouse was in
any way attributable to the negligence of the appellant or its employees. Under the
circumstances, the appellant is plainly not responsible.

WHEREFORE, the judgment appealed from is hereby set aside. No costs.

SO ORDERED.

Makasiar (Chairman), Concepcion, Jr., Guerrero, Abad Santos and De Castro, JJ.,
concur.

Separate Opinions

AQUINO, J., concurring:

I concur. Under article 1738 of the Civil Code "the extraordinary liability of the
common carrier continues to be operative even during the time the goods are stored
in the warehouse of the carrier at the place of destination, until the consignee has
been advised of the arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them".

From the time the goods in question were deposited in the Bureau of Customs'
warehouse in the morning of their arrival up to two o' clock in the afternoon of the
same day, when the warehouse was burned, Amparo C. Servando and Clara Uy
Bico, the consignees, had reasonable opportunity to remove the goods. Clara had
removed more than one-half of the rice consigned to her.

Moreover, the shipping company had no more control and responsibility over the
goods after they were deposited in the customs warehouse by the arrastre and
stevedoring operator.

No amount of extraordinary diligence on the part of the carrier could have prevented
the loss of the goods by fire which was of accidental origin.

Under those circumstances, it would not be legal and just to hold the carrier liable to
the consignees for the loss of the goods. The consignees should bear the loss which
was due to a fortuitous event.

Separate Opinions

AQUINO, J., concurring:

I concur. Under article 1738 of the Civil Code "the extraordinary liability of the
common carrier continues to be operative even during the time the goods are stored
in the warehouse of the carrier at the place of destination, until the consignee has
been advised of the arrival of the goods and has had reasonable opportunity
thereafter to remove them or otherwise dispose of them".

From the time the goods in question were deposited in the Bureau of Customs'
warehouse in the morning of their arrival up to two o' clock in the afternoon of the
same day, when the warehouse was burned, Amparo C. Servando and Clara Uy
Bico, the consignees, had reasonable opportunity to remove the goods. Clara had
removed more than one-half of the rice consigned to her.

Moreover, the shipping company had no more control and responsibility over the
goods after they were deposited in the customs warehouse by the arrastre and
stevedoring operator.
No amount of extraordinary diligence on the part of the carrier could have prevented
the loss of the goods by fire which was of accidental origin.

Under those circumstances, it would not be legal and just to hold the carrier liable to
the consignees for the loss of the goods. The consignees should bear the loss which
was due to a fortuitous event.