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Asian Terminals, Inc. vs. Allied Guarantee Insurance, Co., Inc.

G.R. No. 182208, October 14, 2015

By: Mano, Razna I.

Doctrine: Since the relationship of an arrastre operator and a consignee is akin to that between a
warehouseman and a depositor, then, in instances when the consignee claims any loss, the burden of proof is on
the arrastre operator to show that it complied with the obligation to deliver the goods and that the losses were not
due to its negligence or that of its employees.

Parties: Marina Port Services, Inc. (Marina), the predecessor of herein petitioner Asian Terminals, Inc. (petitioner
ATP) - arrastre operator; Transocean Marine, Inc. (Transocean), a foreign corporation and the shipping company;
Philippine Transmarine Carrier, Inc. (Philippine Transmarine) Philippine representative of Transocean; San Miguel
Corporation (SMC) consignee; Dynamic Brokerage Co. Inc. (Dynamic) SMCs customs broker; Allied Guarantee
Insurance, Co., Inc., (Allied) insurer of the shipment.

FACTS:

On February 5, 1989, a shipment was made of 72,322 lbs. of kraft linear board (a type of paperboard) loaded and
received from the ports of Lake Charles, LA, and Mobile, AL, U.S.A., for transport and delivery to San Miguel
Corporation (SMC) in Manila, Philippines. The goods were shipped on board the vessel M/V Nicole, owned and
operated by Transocean Marine, Inc. (Transocean), represented in the Philippines by Philippine Transmarine Carrier,
Inc. (Philippine Transmarine).

Upon arrival in Manila on April 8, 1989, the subject shipment was offloaded from the vessel to the Marina Port
Services, Inc. (Marina), the predecessor of herein petitioner Asian Terminals, Inc. ( petitioner ATP), which is an
arrastre operator. It was found out that a total of 158 rolls of the goods were damaged during shipping. Further, an
additional 54 rolls were found to have been damaged while in the custody of Marina and SMCs broker, Dynamic
Brokerage Co., Inc. (Dynamic). Thereafter, the private respondent which is the insurer of the shipment, Allied
Guarantee Insurance, Co., In., (respondent Allied), paid SMC the value of the damaged goods and was subrogated
in the latters rights.

On March 8, 1990, respondent Allied filed a Complaint for maritime damages against Transocean, Philippine
Transmarine, Dynamic and Marina seeking to be indemnified for the sum of money it lost in paying SMC.

RTC: Ruled in favor of respondent. It found all the defendants, including the predecessor of herein petitioner,
liable for the losses. It ruled that the shipping company Transocean liable for the 158 rolls of damaged goods due
to the latter's failure to observe the necessary precautions and extraordinary diligence as common carrier to
prevent such damage. Then, the additional 54 rolls of the goods that were lost were found to have been damaged
while in the possession of Marina, the arrastre operator and Dynamic, the broker.

CA: Affirmed the RTCs ruling. It found the carriers Transocean and Philippine Transmarine liable to the insurer,
the subrogee of the consignee, for the 158 rolls of kraft linear board that were lost or damaged while in the
former's custody during shipping. The common carriers were held liable because they were found unable to
overcome the presumption of negligence while in custody of the goods. Then, the arrastre ATI and the broker
Dynamic were likewise found liable for the additional 54 rolls of the same goods destroyed as both failed to prove
the exercise of the amount of diligence required in the safekeeping of said goods. In particular, the appellate court
stated that ATI failed to present the Turn Over Inspector and Bad Order Inspector as witnesses who could have
testified that no additional goods were damaged during its custody.

Petitioners Arguments:

- ATI, as successor of Marina, elevated the matter to the Supreme Court and maintained that the goods
were withdrawn by the broker in the same condition as they were discharged from the vessel. It
argued that it is not liable for the damage to the additional 54 rolls as these were discovered only at
the warehouse of San Miguel and these were the broker's responsibility after they were released from
ATI's custody until delivery to the consignee.
 - It also argues that the CA erroneously failed to note the so-called Turn Over Survey of Bad Order
Cargoes and the Requests for Bad Order Survey which supposedly could absolve it from liability for
the damaged shipment. The reports were allegedly made prior to the shipment's turnover from ATI to
Dynamic and they purportedly show that no additional loss or damage happened while the shipment
was in ATI's custody as the reports only mention the 158 rolls that were damaged during shipping or
prior to ATI's possession. In particular, the Requests for Bad Order Survey was allegedly signed by
Dynamic's representative stating that only 158 rolls were damaged as of the goods' transfer from ATI
to Dynamic.

Respondents Argument:

- It alleged that the shipment was loaded from the ports of origin "in good and complete order
condition," and all losses were due to the fault of the carrier, arrastre, and the broker.

ISSUE: Whether petitioner has been proven liable for the additional 54 rolls of damaged goods to respondent.

HELD: YES, petitioner is liable for the additional 54 rolls of damaged goods.

RATIO:

1. In the performance of its obligations, an arrastre operator should observe the same degree of diligence as
that required of a common carrier and a warehouseman. Being the custodian of the goods discharged from a
vessel, an arrastre operator's duty is to take good care of the goods and to turn them over to the party entitled to
their possession. With such a responsibility, the arrastre operator must prove that the losses were not due to its
negligence or to that of its employees. It must prove that it exercised due care in the handling thereof. This burden,
however, was not established by petitioner and it was found out that the additional 54 rolls of damaged goods
occurred during the following instances: (1) while the goods were in the custody of the arrastre ATI; (2) when they
were in transition from ATI's custody to that of Dynamic (i.e., during loading to Dynamic's trucks); and (3) during
Dynamic's custody.

2. A mere sign-off from the customs broker's representative that he had received the subject shipment "in
good order and condition without exception" would not absolve the arrastre from liability, simply because the
representative's signature merely signifies that said person thereby frees the arrastre from any liability for loss or
damage to the cargo so withdrawn while the same was in the custody of such representative to whom the cargo
was released, but it does not foreclose the remedy or right of the consignee (or its subrogee) to prove that any loss
or damage to the subject shipment occurred while the same was under the custody, control and possession of the
arrastre operator.

To reiterate, the signature by a customs broker's representative of "receipt in good order" does not
foreclose the consignee's or its subrogee's right or remedy to prove that additional loss or damage to the subject
shipment occurred while the same was under the custody, control and possession of the arrastre operator. Further,
it is unclear whether these Requests for Bad Order Survey were executed prior to or after loading was done onto
Dynamic's trucks.
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Dangwa Transportation Co., Inc. vs Court of Appeals

G.R. No. 95582, October 07, 1991

By: Mano, Razna I.

Doctrine: By the contract of carriage, the carrier assumes that express obligation to transport the
passenger to his destination safely and to observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by the passenger is right away attributable to the fault or
negligence of the carrier.

Parties: Theodore M. Lardizabal (petitioner driver) driver of the bus; Dangwa Transportation Co., Inc. (petitioner
corporation) owner of the bus; Pedrito Cudiamat passenger of the bus; Inocencia Cudiamat, et al (private
respondents) relatives of the victim.

FACTS:

On May 13, 1985, an incident occurred to which the petitioner Theodore M. Lardizabal was driving a passenger bus
belonging to petitioner corporation and ran over its passenger, Pedrito Cudiamat by prematurely stepping on the
accelerator of the bus just as when the victim boarded the same. The victim fell from the platform of the bus when
it suddenly accelerated forward and was run over by the rear right tires of the vehicle. However, instead of bringing
Pedrito immediately to the nearest hospital, the said driver, in utter bad faith and without regard to the welfare of
the victim, first brought his other passengers and cargo to their respective destinations before bringing said victim
to the Lepanto Hospital where he later died.

The place of the accident and the place where one of the passengers alighted were both between Bunkhouses 53
and 54, hence the bus was at a full stop when the victim boarded the same.

Private respondents filed a complaint for damages against petitioners for the death of Pedrito Cudiamat as a result
of a vehicular accident.

RTC: Ruled in favor of petitioners. It found that Pedrito Cudiamat was negligent in trying to board a moving
vehicle, especially with one of his hands holding an umbrella. And, without having given the driver or the conductor
any indication that he wishes to board the bus. Cudiamat attempted to board defendants' bus, the vehicle's door
was open instead of being closed. This should be so, for it is hard to believe that one would even attempt to board
a vehicle (i)n motion if the door of said vehicle is closed. Here lies the defendant's lack of diligence.

CA: Set aside RTCs order. It found that the incident took place due to the gross negligence of the appellee-
driver in prematurely stepping on the accelerator and in not waiting for the passenger to first secure his seat
especially so when we take into account that the platform of the bus was at the time slippery and wet because of a
drizzle. The defendants-appellees utterly failed to observe their duty and obligation as common carrier to the end
that they should observe extra-ordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them according to the circumstances of each case.

Petitioners Arguments:

- Petitioners alleged that they had observed and continued to observe the extraordinary diligence
required in the operation of the transportation company and the supervision of the employees, even
as they add that they are not absolute insurers of the safety of the public at large.

- The driver and the conductor had no knowledge that the victim would ride on the bus, since the latter
had supposedly not manifested his intention to board the same.

Respondents Argument:

- Petitioner driver was driving in a reckless and imprudent manner and without due regard to traffic
rules and regulations and safety to persons and property which caused the victims death.

ISSUE: Whether respondent court erred in reversing the decision of the trial court and in finding petitioners
negligent and liable for the damages claimed.
HELD: No, the respondent court did not err because the petitioners were negligent in transporting the passenger.

RATIO:

Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence for the safety of the passengers transported by them, according to all the circumstances of
each case. A common carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.

It has also been repeatedly held that in an action based on a contract of carriage, the court need not make an
express finding of fault or negligence on the part of the carrier in order to hold it responsible to pay the damages
sought by the passenger. By the contract of carriage, the carrier assumes the express obligation to transport the
passenger to his destination safely and to observe extraordinary diligence with a due regard for all the
circumstances, and any injury that might be suffered by the passenger is right away attributable to the fault or
negligence of the carrier. This is an exception to the general rule that negligence must be proved, and it is
therefore incumbent upon the carrier to prove that it has exercised extraordinary diligence.

Moreover, the circumstances under which the driver and the conductor failed to bring the gravely injured victim
immediately to the hospital for medical treatment is a patent and incontrovertible proof of their negligence. It
defies understanding and can even be stigmatized as callous indifference. The evidence shows that after the
accident the bus could have forthwith turned at Bunk 56 and thence to the hospital, but its driver instead opted to
first proceed to Bunk 70 to allow a passenger to alight and to deliver a refrigerator, despite the serious condition of
the victim.