1. Because of spillage of the rice during the trip from Davao to Dumaguete due to the bad condition of the socks, there was a shortage in the rice delivered by the Armilito Baya Lines, Inc. to the consignee Calijan John Mark Import and Export Corp. The carrier accepted the shipment, knowing that some of the socks had holes and some had broken string. When sued, Armilito Baya Lines, Inc. alleged that the loss was caused by the spillage of the rice on account of the defective conditions of the socks, at the time it received the shipment, and, therefore, it cannot be held liable. Is Armilito Baya Lines Inc. contention valid? Decide and give reasons.