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ASIAN TERMINALS v. PHILAM INSURANCE CO.

FACTS:

This case involves a dispute over liability for the damage to certain cargoes. On April 15, 1995, Nichimen Corporation shipped 219 packages containing 120 units of brand new Nissan Pickup Truck Double Cab 4x2 model from Japan to Manila. The shipment was insured with Philam against all risks. Upon unloading by ATI staff, it was discovered that one of the packages was in bad order. Universal Motors Corporation, the consignee, conducted a bad order survey and declared the damaged cargoes a total loss. Philam compensated Universal Motors and received a Subrogation Receipt in its favor. Philam then filed a Complaint for damages against Westwind, ATI, and R.F. Revilla Customs Brokerage, Inc. The RTC ruled in favor of Philam and ordered Westwind and ATI to pay Philam the amount of P633,957.15 with interest and attorney's fees. The CA affirmed with modification the RTC's ruling, directing Westwind and ATI to pay Philam the amount of P190,684.48 with interest and attorney's fees.

ISSUES:

  1. Who between ATI and Westwind is liable for the damage suffered by the subject cargo and to what extent?

  2. Whether the Marine Certificate and Subrogation Receipt are properly authenticated.

  3. Whether the Subrogation Receipt is sufficient evidence of payment by petitioner Philam.

  4. Whether Philam's right of action has prescribed.

  5. Who between Westwind and ATI should be liable for the damage to the cargo?

  6. Was the claim filed by Universal Motors within the reglementary period?

  7. Are the petitioners Westwind and ATI concurrently accountable for the damage to the content of Steel Case No. 03-245-42K/1?

  8. Is the petitioner ATI liable for the damaged cargo?

  9. What is the extent of liability of petitioners ATI and Westwind?

  10. Whether the Court of Appeals erred in awarding interest on the amount disputed in favor of the respondent.

  11. Whether the interest rate imposed by the Court of Appeals is correct.

RULING:

  1. The Court cannot resolve the issue of liability between ATI and Westwind because it involves appreciation of factual issues which is beyond the scope of a petition for review on certiorari. Only questions of law may be put in issue in such petitions. However, the Court may resolve questions of fact when certain exceptions apply. In this case, the fifth and seventh exceptions apply. The Court affirms the joint liability of ATI and Westwind, but the Court disallows the award of damages for certain items and reduces the award of attorney's fees.

  2. The Subrogation Receipt is properly authenticated because it was testified by a person who saw the document executed or written. However, the Marine Certificate is not properly authenticated because there is no testimony indicating that Philam's authorized representative signed said document.

  3. The Subrogation Receipt, on its own, is sufficient evidence of payment by petitioner Philam. Petitioners ATI and Westwind failed to offer any evidence to controvert the same. The payment by the insurer operates as an equitable assignment to the insurer of all the remedies that the insured may have against the third party whose negligence or wrongful act caused the loss.

  4. Philam's right of action has not prescribed. The prescriptive period for filing an action for the loss or damage of the goods under the Carriage of Goods by Sea Act (COGSA) is within three days of the delivery, unless the loss or damage is not apparent, in which case, the notice must be given within three days of the delivery.

  5. Westwind and ATI are jointly liable for the damage to the cargo.

  6. The claim filed by Universal Motors was within the reglementary period.

  7. Yes, the petitioners Westwind and ATI are concurrently accountable for the damage to the content of Steel Case No. 03-245-42K/1. The damage was incurred during the discharge of the shipment and while under the supervision of the carrier. Therefore, the carrier is liable for the damage caused to the cargo.

  8. Yes, the petitioner ATI is also liable for the damaged cargo. As an arrastre operator, ATI's duty is to take good care of the goods discharged from a vessel and to turn them over to the party entitled to their possession. Since ATI's stevedores were directly in charge of the physical unloading of the cargo and ATI's foreman picked the cable sling used to hoist the packages, ATI's negligence contributed to the damage of the cargo.

  9. The liability of petitioners ATI and Westwind is confined to the value of the one piece Frame Axle Sub without Lower, which was the only item identified as damaged conclusively in the records.

  10. The Court of Appeals did not err in awarding interest on the amount disputed in favor of the respondent.

  11. The interest rate imposed by the Court of Appeals is modified and reduced to 6% per annum from the date of extrajudicial demand until fully paid.

PRINCIPLES:

  • Questions of law may be put in issue in a petition for review on certiorari, while questions of fact cannot be entertained.

  • The Court may resolve questions of fact when certain exceptions apply, such as when the findings are conflicting or when the findings are contrary to those of the trial court.

  • Subrogation of rights by an insurance company accrues upon payment of the insurance claim.

  • Public documents are self-authenticating and require no further authentication, while private documents require authentication in order to be presented as evidence in court.

  • The testimony of a person who saw the document executed or written is sufficient to establish the authenticity of a document.

  • Payment by the insurer to the insured operates as an equitable assignment to the insurer of all the remedies that the insured may have against the third party whose negligence or wrongful act caused the loss.

  • The prescriptive period for filing an action for the loss or damage of goods under COGSA is within three days of delivery, unless the loss or damage is not apparent, in which case, the notice must be given within three days of delivery.

  • Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. They are responsible for the loss, destruction, or deterioration of the goods, subject to certain exceptions (Article 1734, Civil Code).

  • The extraordinary responsibility of a common carrier lasts from the time the goods are unconditionally placed in its possession until they are delivered to the consignee or the person who has a right to receive them.

  • Failure to comply with the notice requirement does not affect or prejudice the right of the shipper to bring suit within one year after delivery of the goods.

  • Under the Carriage of Goods by Sea Act (COGSA), carriers are responsible for the loading, handling, stowage, carriage, custody, care, and discharge of the goods carried (Section 2).

  • Cargoes while being unloaded generally remain under the custody of the carrier (maritime law jurisprudence).

  • Arrastre operators have the duty to take good care of the goods discharged from a vessel and to turn them over to the party entitled to their possession.

  • The liability of an arrastre operator and a carrier may not be held solidarily liable at all times, but liability can arise if the arrastre operator's negligence contributes to the damage of the cargo.

  • When an obligation not constituting a loan or forbearance of money is breached, the court may impose an interest on the amount of damages awarded at the rate of 6% per annum (Article 2209 of the Civil Code).

  • Interest may be awarded on the amount disputed when deemed just and equitable.