UCPB Insurance v.

Aboitiz Shipping

San Miguel Corporation (SMC) purchased 3 units of waste water treatment plant with accessories
from Super Max Engineering Enterprises, Co., Ltd. of Taipei, Taiwan. Upon arrival at the port of
Manila (carried by East Asiatic Co. Ltd as agent of DAMCO as inter-island carrier from a foreign
carrier), it was transferred again to Cebu (carried by Aboitiz Shipping Corp. and the Eagle Express
line as agents of the owner of the cargo in facilitating the transhipmment). The goods were
delivered to and received by SMC but discovered that one electrical motor was damaged.

Pursuant to insurance agreement, SMC was subrogated by the UCPB, and paid the value of the loss
suffered. Consequently, this complaint was filed to recover the amount from the defendants.

The RTC ruled that the defendants are solidarily liable to pay the UCPB of the amount of
recovery.
East Asiatic filed an appeal on the ground of prescription, which was given due course by the CA
and set aside the lower courts decision, and the same became final and executory.

As to Aboitiz and Eagle Express, the lower courts decision is still enforced , thus, it prompts their
appeal on the ground that there is no more cause of action since pursuant to Art. 366 of Code of
Commerce, consignee made no claim against them (the carrier) within twenty four (24) hours
following the receipt of the cargo regarding the condition in which said cargo was delivered. They
have only learned of the claim upon receipt of the complaint.

The CA ruled in favor of the defendants. Hence this petition.

The SC ruled by denying the petition of the UCPB and affirming the CA.

The further contention of UCPB that there was already damage to the cargo during the transfer to
defendants resulting to non-applicability of Art. 366 of Code of Commerce, will have the Courts
more reason to believe that the carrier was at no fault if such cargo was damaged prior to the
transfer.

PLAINTIFF / Plaintiff-Subrogee UCPB Insurance

SHIPPER / owner of the goods San Miguel Corporation (SMC)
Defendant; CARRIER (by sea) ABOITIZ ; EAGLE EXPRESS; EAST
Whether the UCPB can recover the
amount as a subrogee to the shipper
Controversy when it fails to meet the condition
precedent of Art. 366 of the code of
Commerce.
recovery of the value amounting to
Cause of action
the loss/damage to the cargo

Art. 366 of Code of Commerce:

“Within twenty-four hours following
the receipt of the merchandise, the
claim against the carrier for damage
or average which may be found
therein upon opening the packages,
Law applicable: may be made, provided that the
indications of the damage or average
which gives rise to the claim cannot
be ascertained from the outside part
of such packages, in which case the
claim shall be admitted only at the
time of receipt.”