Nedlloyd Lijnen B.V. Rotterdam and The East Asiatic Co., Ltd. vs. Glow Laks Enterprises, Ltd.

A common carrier's extraordinary responsibility for goods transported continues until actual or constructive delivery to the consignee or the person entitled to receive them; delivery solely to port or customs authorities does not terminate this responsibility. Foreign laws must be proven in accordance with Section 24 of Rule 132 of the Revised Rules of Court through official publication or properly attested and certified copies; otherwise, the processual presumption applies that such foreign law is identical to Philippine law.

Petitioner Nedlloyd Lijnen B.V. Rotterdam, a foreign corporation engaged in shipping, loaded 343 cartons of garments belonging to respondent Glow Laks Enterprises, Ltd. at the Port of Manila for transport to Colon, Free Zone, Panama. Upon arrival at the Port of Colon, the goods were turned over to the National Ports Authority pursuant to alleged Panamanian law. Unauthorized persons subsequently secured the release of the goods using falsified bills of lading, resulting in the loss of the shipment valued at US$53,640.00.

• On or about 14 September 1987, respondent Glow Laks Enterprises, Ltd., a Hong Kong-based foreign corporation, loaded 343 cartons of garments on board M/S Scandutch at the Port of Manila for pre-carriage to Hong Kong.
• The goods were covered by Bills of Lading Nos. MHONX-2 and MHONX-3, with a declared value of US$53,640.00.
• The goods arrived in Hong Kong in good condition and were transferred to M/S Amethyst for final carriage to Colon, Free Zone, Panama.
• Both vessels were owned by petitioner Nedlloyd Lijnen B.V. Rotterdam and represented in the Philippines by co-petitioner The East Asiatic Co., Ltd.
• The goods were to be released to the consignee, Pierre Kasem, International, S.A., only upon presentation of the original bills of lading.
• Upon arrival at the Port of Colon on 23 October 1987, petitioners allegedly notified the consignee and turned over custody of the goods to the National Ports Authority pursuant to Panamanian laws, customs, and regulations.
• Unauthorized persons forged the covering bills of lading, and based on these falsified documents, the National Ports Authority released the goods to them.
• On 16 July 1988, respondent filed a formal claim with Nedlloyd for the recovery of US$53,640.00, which was denied.
• The original bills of lading remained in the possession of the notify party/consignee at the time of the misdelivery.

• Panamanian laws (specifically Law 42 and Implementing Order No. 7) were judicially admitted by respondent and therefore did not require further proof.
• The foreign laws were properly proven through the presentation of the Gaceta Official of the Republica de Panama No. 17,596 and the testimony of expert witnesses, specifically the deposition of Mr. Enrique Cajigas, a maritime law practitioner in Panama.
• Even assuming failure of proof of foreign law, the carrier discharged its duty under both Panamanian and Philippine law because its extraordinary responsibility ceased upon delivery of the goods to the National Ports Authority of Panama.
• The discharge of goods into the custody of the port authority was in accordance with local Panamanian law and custom, thereby terminating the carrier's liability.

• The Panamanian laws were not proven in the manner required by Section 24, Rule 132 of the Revised Rules of Court, as the copies presented were not accompanied by the required attestation and certification by competent officials.
• Under the doctrine of processual presumption, since foreign law was not properly proven, it is presumed to be the same as Philippine law.
• Under Articles 1736 and 1738 of the New Civil Code, a common carrier's extraordinary responsibility lasts until actual or constructive delivery to the consignee or the person entitled to receive the goods; mere delivery to port authorities does not relieve the carrier of liability.
• The release of goods to unauthorized persons on the strength of falsified bills of lading constitutes misdelivery, giving rise to the presumption that the common carrier was negligent.
• Petitioners failed to prove that they exercised extraordinary diligence in handling the goods or that they notified the consignee of the arrival of the shipment.

• Procedural:
  • Whether the Court of Appeals erred in ruling that Panamanian laws were not duly proven in accordance with Section 24, Rule 132 of the Revised Rules of Court.
• Substantive Issues:
  • Whether the common carrier's extraordinary responsibility ceased upon delivery of the goods to the National Ports Authority of Panama.
  • Whether petitioners are liable for the misdelivery of the goods under Philippine law.
  • Whether petitioners successfully rebutted the presumption of negligence for the loss of the goods.

• Procedural:
  • The Supreme Court held that the Panamanian laws were not duly proven in accordance with Sections 24 and 25 of Rule 132 of the Revised Rules of Court. The photocopy of the Gaceta Official was not accompanied by the required certificate from the officer having legal custody of the records or by a certificate from a Philippine embassy or consular official authenticated by the seal of his office. The deposition of Mr. Enrique Cajigas was merely an expert opinion and not the certificate contemplated by law, as he was not the custodian of the statute. Consequently, the processual presumption applies, treating the foreign law as the same as Philippine law.
• Substantive:
  • The Court ruled that under Articles 1736 and 1738 of the New Civil Code, the extraordinary responsibility of a common carrier lasts from the time the goods are received for transportation until they are delivered, actually or constructively, to the consignee or the person who has a right to receive them. Delivery to port or customs authorities does not terminate this responsibility. The contract of carriage remains in full force until delivery to the consignee or his agent, evidenced by the surrender of the original bill of lading or at least a signed receipt acknowledging delivery. Since neither occurred and the original bills of lading remained with the notify party, the contract subsisted. The loss of goods to unauthorized persons gives rise to a presumption of negligence under Article 1735 of the Civil Code, which petitioners failed to rebut by adequate proof of extraordinary diligence. The Court found no proof that petitioners notified the consignee of the goods' arrival to afford reasonable opportunity for removal. Thus, petitioners are liable for the value of the misdelivered goods.

• Processual Presumption — Under the rules of private international law, a foreign law must be properly pleaded and proved as a fact; in the absence of pleading and proof, the laws of the foreign country are presumed to be the same as Philippine local or domestic law.
• Proof of Foreign Law — Foreign laws do not prove themselves in Philippine jurisdiction and must be alleged and proved like any other fact. A copy of a foreign public document must be attested by the officer having legal custody and accompanied by a certificate from a secretary of the embassy, consul general, or other authorized Philippine foreign service officer authenticated by the seal of his office to be admissible.
• Extraordinary Diligence of Common Carriers — Common carriers are bound to observe extraordinary diligence in the vigilance over goods from the time they are unconditionally placed in the carrier's possession until actual or constructive delivery to the consignee or the person entitled to receive them, as provided in Articles 1736 and 1738 of the New Civil Code.
• Presumption of Negligence — In case of loss, destruction, or deterioration of goods, the common carrier is presumed to have been negligent and at fault, unless it proves that the loss was due to flood, storm, earthquake, or other natural disaster or calamity under Article 1734 of the New Civil Code.

• "It is well settled that foreign laws do not prove themselves in our jurisdiction and our courts are not authorized to take judicial notice of them. Like any other fact, they must be alleged and proved."
• "The latter requirement is not merely a technicality but is intended to justify the giving of full faith and credit to the genuineness of the document in a foreign country."
• "Extraordinary diligence is that extreme care and caution which persons of unusual prudence and circumspection use for securing or preserving their own property or rights."
• "This expecting standard imposed on common carriers in contract of carrier of goods is intended to tilt the scales in favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for the shipment."
• "Nothing in the New Civil Code, however, suggests, even remotely, that the common carriers' responsibility over the goods ceased upon delivery thereof to the custom authorities."

• Wildvalley Shipping Co., Ltd. v. Court of Appeals — Cited for the principle that foreign laws must be alleged and proved and for the requirements of Section 24, Rule 132 regarding proof of foreign official records.
• Willamete Iron and Steel Works v. Muzzal — Distinguished as an exception where foreign law was established through testimony of an attorney in open court; the Court noted petitioners could not invoke this as their expert witness never appeared at trial and his deposition was obtained ex-parte.
• Manufacturers Hanover Trust Co. v. Guerrero — Cited for the requirements of attestation and certification for foreign public documents under Rule 132.
• National Trucking and Forwarding Corp. v. Lorenzo Shipping Corporation — Cited for the definition of extraordinary diligence and the presumption of negligence against common carriers.
• Saludo, Jr., v. Court of Appeals — Cited for the rule that the extraordinary responsibility of common carriers remains in full force even when goods are temporarily unloaded or stored in transit, terminating only after lapse of reasonable time for acceptance by the consignee.
• Samar Mining Company, Inc. v. Nordeutscher Lloyd — Cited for the definition of actual delivery in contracts of transport.
• Regional Container Lines (RCL) of Singapore v. The Netherlands Insurance Co., (Philippines), Inc. — Cited for the principle that a common carrier is presumed negligent if it fails to prove extraordinary vigilance, and that it must do more than show another party could be responsible.

• Rule 45, Revised Rules of Court — Governs the Petition for Review on Certiorari filed by petitioners.
• Section 24, Rule 132, Revised Rules of Court — Mandates that proof of official records of foreign countries requires attestation by the officer having legal custody and certification by Philippine embassy or consular officials authenticated by seal.
• Section 25, Rule 132, Revised Rules of Court — States that attestation of a copy must declare it to be a correct copy of the original and be under the official seal of the attesting officer.
• Article 1733, New Civil Code — Imposes extraordinary diligence on common carriers from the nature of their business and for reasons of public policy.
• Article 1734, New Civil Code — Enumerates exceptions to common carrier liability, including natural disasters.
• Article 1735, New Civil Code — Establishes the presumption of negligence against the common carrier in case of loss, destruction, or deterioration of goods.
• Article 1736, New Civil Code — Defines the duration of extraordinary responsibility of common carriers from receipt until actual or constructive delivery to the consignee.
• Article 1738, New Civil Code — States that extraordinary liability continues even during storage in the carrier's warehouse until the consignee is advised of arrival and has reasonable opportunity to remove the goods.
• Article 353, Code of Commerce — Provides that the bill of lading is the legal evidence of the contract between shipper and carrier, and that obligations are cancelled only upon exchange of the bill of lading for the goods transported.