OBLIGATIONS AND CONTRACTS SLC-LAW

DIGEST :
MAERSK LINE, petitioner, vs Court of Appeals and Efren V. Castillo, doing business under the name
and style of Ethegal Laboratories, respondents
G.R. No. 94761 May 17, 1993
Topic/Doctrine: Article 1170: Grounds of Liability to Pay Damages

FACTS:
Private respondent ordered from Eli Lilly. Inc. 600,000 empty gelatin capsules for the
manufacture of his pharmaceutical products. Through a Memorandum of Shipment, the shipper Eli Lilly,
advised private respondent as consignee that the empty gelatin capsules were already shipped on board
for shipment to the Philippines via Oakland, California. In said Memorandum, shipper Eli Lilly, Inc.
specified the date of arrival to be April 3, 1977. For reasons unknown, said cargo of capsules were
mishipped and diverted to Richmond, Virginia, USA and then transported back Oakland, Califorilia. The
goods finally arrived in the Philippines on June 10, 1977 or after two (2) months from the date specified
in the memorandum. As a consequence, private respondent as consignee refused to take delivery of the
goods on account of its failure to arrive on time.
Private respondent alleging gross negligence and
undue delay in the delivery of the goods, filed an
action before the court a quo for rescission of
contract with damages against petitioner and Eli
Lilly, Inc. as defendants.
Private respondent filed an action before the court a quo for rescission of contract with
damages against petitioner and Eli Lilly, Inc.

ISSUE: Whether or not private respondent is liable for damages.

RULING:
Yes. The private respondent is liable for damages. Article 1170 of the Civil Code provides that
“Those who in the performance of their obligations are guilty of fraud, negligence, or delay, and those
who in any manner contravene the tenor thereof, are liable for damages.”
There was gross negligence on the part of the petitioner in mishiping the subject goods destined
for Manila but was inexplicably shipped to Richmond, Virginia, U.S.A.. Petitioner is liable for breach of
contract of carriage through gross negligence amounting to bad faith.
The oft-repeated rule regarding a carrier's liability for delay is that in the absence of a special
contract, a carrier is not an insurer against delay in transportation of goods. When a common carrier
undertakes to convey goods, the law implies a contract that they shall be delivered at destination within
a reasonable time, in the absence, of any agreement as to the time of delivery . But where a carrier has
made an express contract to transport and deliver properly within a specified time, it is bound to fulfill
its contract and is liable for any delay, no matter from what cause it may have arisen. The delay in the
delivery of the goods spanning a period of two (2) months and seven (7) days falls was beyond the realm
of reasonableness.
Additionally, in finding petitioner liable for damages for the delay in the delivery of goods was
made on the rule that contracts of adhesion are void. Generally, contracts of adhesion are considered
void since almost all the provisions of these types of contracts are prepared and drafted only by one
party. The only participation left of the other party in such a contract is the affixing of his signature
thereto, hence the term "Adhesion".

TICKLER:
Castillo ordered empty gelatin capsules from Eli Lily. He filed before the court a quo for
rescission with damages for the delay in delivery for 2mos. and 7 days against Maersk Line(carrier) and
Eli Lily (shipper). Eli Lily cross-claimed against Maersk Line for their negligence in the delivery.

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OBLIGATIONS AND CONTRACTS SLC-LAW

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