Eastern and Australian Steamship Co., LTD vs. Great American Insurance Co.

Eastern and Australian Steamship Co., LTD vs. Great American Insurance Co.

108 SCRA 248

Facts:

On December 10, 1971, the Jackson and Spring (Sydney) Pty. Ltd. shipped from Sydney, Australia, one case of impeller’s for warman pump on board the SS Chitral, a vessel owned and operated in the Philippines by Eastern and Australian Steamship Co. Ltd., thru its agent FE Zuellig, Inc. under the bill of lading no. 39 for delivery to Manila in favor of the consignee Buenget Consolidated, Inc.  The shipment was insured with Great Americans Insurance Co. for P35,921.81 against all risks.  On December 22, 1971, the SS Chitnel arrived in Manila but failed to discharge the shipment.  Demand for delivery was made by petitioner .  Having failed to make the delivery, a claim was prescribed against them for the value to make the delivery, a claim was preserved against them for the value of the shipment.  As a consequence of the loss of the shipment, herein defendant was compelled to pay the consignee the amount of the insurance.  As subrogee, said private respondent filed a complaint against petitioner’s for recovery of said amount with legal interest at attorney’s fees.

Issue: 

Whether or not the stipulation limiting the carrier liability for goods lost or damaged is valid.

Held: 

Petitioner’s stand that the conditioned imposed in clause 17 of the bill of lading should not be read in the light of the second paragraph of Sec 4(5) of Carriage of Goods by Sea Act (COGSA) is well taken.  Indeed, it would be to render ineffective the very inherent of the law setting the sum of $500 as the maximum liability of the vessel is a carrier per package.  In the absence of a higher valuation of the goods as indicated in the bill of lading.