[G.R. No.

L-69044 May 29, 1987]

EASTERN SHIPPING LINES, INC., petitioner, vs.
INTERMEDIATE APPELLATE COURT and DEVELOPMENT INSURANCE & SURETY
CORPORATION,respondents.
Melencio-Hererra: J.:
Facts:
June, 1977 M/S ASIATICA, a Vessel operated by Eastern Shipping Lines was bound
for Manila from Japan. It loaded:
* 5,000 pieces of colorized lance pipes in 28 packages valued at P256,039.00
consigned to Philippine Blooming Mills Co., Inc.,
*7 cases of spare parts valued at P92,361.75, consigned to Central Textile Mills, Inc.
Both were insured from marine risks with Development Insurance and Surety Corp.
*It also took 128 cartoons of garment fabrics and accessories in 2 containers consigned
to Mariveles Apparel Corp
*2 Cases of surveying instruments consigned to Aman Enterprises and General
Merchandise.
The shipments were insured with DOWA Fire and Marine Insurance Co. and Nisshin
Fire and marine Insurance Co. respectably.
En Route from Kobe to Manila the vessel caught fire and sank losing all its shipment.
The insurance companies paid for the insurance of the above mentioned shipments. A
case is then instituted a case to redeem the insurance that they paid to the various
companies against Eastern Shipping Lines. They contend that Eastern should not be
exempted from liability because it was not able to exercise due diligence in preventing
the occurrence of the fire as well as its unseaworthiness.
Eastern Shipping invoked the Carriage of Goods by Sea Act as a defense wherein it is
said to be exempt from the said liability. The Fire was said to be one of the exempting
circumstance under the act. It also contended that it the fire occurred as a fortuitous
event such as a natural disaster or calamity which leads them to conclude that they
should not be made liable.
Issue:
What Law Should be applied in case of breach in the said shipment

In case of conflict what law should be applied ( COGSA and New Civil Code)
Held:
It is the law of the country to which the goods are to be transported.
Article 1753. The law of the country to which the goods are to be transported shall
govern the liability of the common carrier for their loss, destruction, or deterioration.
Furthermore, the issue of Conflict of Law is then settled by the Supreme Court. Wherein
According to COGSA (CARRIAGE OF GOODS BY SEA ACT) it is then provides for the
exception on the part of the common carrier in cases of fire while in the journey. On the
contrary according New Civil Code of the Philippines Article 1734, Common carriers
are responsible for the loss, destruction, or deterioration of the goods, unless the same
is due to any of the following causes: (1) flood, storm, earthquake, lightning or other
natural disaster or calamity
It is then provided under Article 1766 that In all matters not regulated by this Code, the
rights and obligations of common carriers shall be governed by the Code of Commerce
and by Special laws It is therefore be the New Civil Code that shall be applied before
the said COGSA. The law of the destination would then be applicable over the special
laws such as the COGSA.
COGSA will only be applicable in cases where the matter is not regulated by the Code.