G.R. No. 171406 April 4, 2011 ASIAN TERMINALS, INC. vs. MALAYAN INSURANCE, CO., INC.

Facts: On November 14, 1995, Shandong Weifang Soda Ash Plant shipped on board the vessel MV !inlian " #$,$$$ plasti% bags of soda ash dense from &hina to Manila' (he shipment, )ith an invoi%e val*e of +S,45#,$$$'$$, )as ins*red )ith respondent Mala-an "ns*ran%e &ompan-, "n%', and %overed b- a .ill of /ading iss*ed b- (ian0in Navigation &ompan- )ith Philippine .an1ing &orporation as the %onsignee and &hemphil Albright and Wilson &orporation as the notif- part-' On November 21, 1995, *pon arrival of the vessel in Manila, the stevedores of petitioner Asian (erminals, "n%', a d*l- registered domesti% %orporation engaged in providing arrastre and stevedoring servi%es, *nloaded the #$,$$$ bags of soda ash dense from the vessel and bro*ght them to the open storage area of petitioner for temporar- storage and safe1eeping' When the *nloading of the bags )as %ompleted on November 23, 1995, 2,4$2 bags )ere fo*nd to be in bad order %ondition' On November 29, 1995, the stevedores of petitioner began loading the bags in the tr*%1s of M5& &*stoms .ro1erage for transport and deliver- to the %onsignee' On 6e%ember 23, 1995, after all the bags )ere *nloaded in the )areho*ses of the %onsignee, a total of 2,331 bags )ere in bad order %ondition d*e to spillage, %a1ing, and hardening of the %ontents' On April 19, 199#, respondent, as ins*rer, paid the val*e of the lost7 damaged %argoes to the %onsignee in the amo*nt of P#48,#$$'25' On November 2$, 199#, respondent, as s*brogee of the %onsignee, filed before the 9(& of Manila a %omplaint for damages against petitioner :Asian (erminals, "n%';, the shipper :"n%h%ape Shipping Servi%es;, and the %argo bro1er :M5& &*stoms .ro1erage;' (he 9(& rendered a de%ision finding petitioner liable for the damage7loss s*stained b- the shipment b*t absolving the other defendants < "n%h%ape Shipping Servi%es and M5& &*stoms .ro1erage' (he 9(& fo*nd that the pro=imate %a*se of the damage7loss )as the negligen%e of petitioner>s stevedores )ho handled the *nloading of the %argoes from the vessel' (he 9(& emphasi?ed that despite the admonitions of Marine &argo S*rve-ors not to *se steel hoo1s in retrieving and pi%1ing<*p the bags, petitioner>s stevedores %ontin*ed to *se s*%h tools, )hi%h pier%ed the bags and %a*sed the spillage' (he 9(&, th*s, r*led that petitioner, as emplo-er, is liable for the a%ts and omissions of its stevedores and is ordered to pa- plaintiff Mala-an "ns*ran%e &ompan-, "n%' Aggrieved, petitioner appealed to the &A b*t the appeal )as denied' (he &A agreed )ith the 9(& that the damage7loss )as %a*sed b- the negligen%e of petitioner>s stevedores in handling and storing the s*b0e%t shipment' (he &A li1e)ise re0e%ted petitioner>s assertion that it re%eived the s*b0e%t shipment in bad order %ondition as this )as disproved b- the Marine &argo S*rve-ors )ho testified that the a%t*al %o*nting of bad order bags )as done onl- after all the bags )ere *nloaded from the vessel and that the (*rn Over S*rve- of .ad Order &argoes :(OS.O&; *pon )hi%h petitioner an%hors its defense )as prepared onl- on November 23, 1995 or after the *nloading of the bags )as %ompleted' Petitioner moved for re%onsideration b*t the &A denied the same in a 9esol*tion for la%1 of merit' Petitioners Arguments 1' Petitioner %ontends that respondent has no %a*se of a%tion be%a*se it failed to present the ins*ran%e %ontra%t or poli%- %overing the s*b0e%t shipment' Petitioner arg*es that the S*brogation 9e%eipt presented b- respondent is not s*ffi%ient to prove that the s*b0e%t shipment )as ins*red and that respondent )as validl- s*brogated to the rights of the %onsignee' (h*s, petitioner s*bmits that )itho*t proof of a valid s*brogation, respondent is not entitled to an- reimb*rsement' Petitioner li1e)ise p*ts in iss*e the finding of the 9(&, )hi%h )as affirmed b- the &A, that the pro=imate %a*se of the damage7loss to the shipment )as the negligen%e of petitioner>s stevedores' Petitioner avers that s*%h finding is %ontrar- to the do%*mentar- eviden%e, i'e', the (OS.O&, the 9e@*est for .ad Order S*rve- :95S.O&; and the 9eport of S*rve-' A%%ording to petitioner, these do%*ments prove that it re%eived the s*b0e%t shipment in bad order %ondition and that no additional damage )as s*stained b- the s*b0e%t shipment *nder its %*stod-' Petitioner asserts that altho*gh the (OS.O& )as prepared onl- after all the bags )ere *nloaded b- petitioner>s stevedores, this does not mean that the damage7loss )as %a*sed b- its stevedores' Petitioner also %laims that the amo*nt of damages sho*ld not be more than P5,$$$'$$, p*rs*ant to its Management &ontra%t for %argo handling servi%es )ith the PPA' Petitioner %ontends that the &A sho*ld have ta1en 0*di%ial noti%e of the said %ontra%t sin%e it is an offi%ial a%t of an e=e%*tive department s*b0e%t to 0*di%ial %ogni?an%e'

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Respondents Arguments

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9espondent, on the other hand, arg*es that the non<presentation of the ins*ran%e %ontra%t or poli%- )as not raised in the trial %o*rt' (h*s, it %annot be raised for the first time on appeal' 9espondent li1e)ise %ontends that *nder prevailing 0*rispr*den%e, presentation of the ins*ran%e poli%- is not indispensable' 9espondent f*rther avers that the right of s*brogation has its roots in e@*it- < it is designed to promote and to a%%omplish 0*sti%e and is the mode )hi%h e@*it- adopts to %ompel the *ltimate pa-ment of a debt b- one )ho in 0*sti%e, e@*it- and good %ons%ien%e o*ght to pa-' 9espondent li1e)ise maintains that the 9(& and the &A %orre%tl- fo*nd that the damage7loss s*stained b- the s*b0e%t shipment )as %a*sed b- the negligent a%ts of petitioner>s stevedores' S*%h fa%t*al findings of the 9(&, affirmed b- the &A, are %on%l*sive and sho*ld no longer be dist*rbed' "n fa%t, *nder Se%tion 1 of 9*le 45 of the 9*les of &o*rt, onl- @*estions of la) ma- be raised in a petition for revie) on %ertiorari' As to the Management &ontra%t for %argo handling servi%es, respondent %ontends that this is o*tside the operation of 0*di%ial noti%e' And even if it is not, petitioner>s liabilit- %annot be limited b- it sin%e it is a %ontra%t of adhesion'

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Issues:

:1; Whether the non<presentation of the ins*ran%e %ontra%t or poli%- is fatal to respondent>s %a*se of a%tionA

:2; Whether the pro=imate %a*se of the damage7loss to the shipment )as the negligen%e of petitioner>s stevedoresA and :8; Whether the %o*rt %an ta1e 0*di%ial noti%e of the Management &ontra%t bet)een petitioner and the Philippine Ports A*thorit- :PPA; in determining petitioner>s liabilit-' Ruling: Th p !i!io" is # r $! o$ % ri!. &1' (h !h r or "o! !h r spo") "!*s "o"+pr s "!,!io" o$ !h i"s-r,". .o"!r,.! or poli./ # !0 " !h r spo") "! ,") !h .o"si1" $,!,l !o i!s .,-s o$ ,.!io". 2 NO. No"+pr s "!,!io" o$ !h i"s-r,". .o"!r,.! or poli./ is "o! $,!,l i" !h i"s!,"! .,s . is

Birst of all, this )as never raised as an iss*e before the 9(&' .asi% is the r*le that iss*es or gro*nds not raised belo) %annot be resolved on revie) b- the S*preme &o*rt, for to allo) the parties to raise ne) iss*es is antitheti%al to the sporting idea of fair pla-, 0*sti%e and d*e pro%ess' .esides, non<presentation of the ins*ran%e %ontra%t or poli%- is not ne%essaril- fatal' I" 3 ls," Tr,"spor! Li" s, I".. v. Co-r! o$ App ,ls, the presentation in eviden%e of the marine ins*ran%e poli%- is not indispensable before the ins*rer ma- re%over from the %ommon %arrier the ins*red val*e of the lost %argo in the e=er%ise of its s*brogator- right' (he s*brogation re%eipt, b- itself, is s*ffi%ient to establish not onl- the relationship of the ins*rer and the ass*red shipper of the lost %argo of ind*strial f*el oil, b*t also the amo*nt paid to settle the ins*ran%e %laim' (he right of s*brogation a%%r*es simpl- *pon pa-ment b- the ins*ran%e %ompan- of the ins*ran%e %laim' I" 4o% I"s-r,". Corpor,!io" v. CA, the presentation of the ins*ran%e poli%- )as ne%essar- be%a*se the shipment therein :h-dra*li% engines; passed thro*gh several stages )ith different parties involved in ea%h stage' "n the absen%e of proof of stip*lations to the %ontrar-, the ha*ler %an be liable onl- for an- damage that o%%*rred from the time it re%eived the %argo *ntil it finall- delivered it to the %onsignee' Ordinaril-, it %annot be held responsible for the handling of the %argo before it a%t*all- re%eived it'

Co)ever, as in ever- general r*le, there are admitted e=%eptions' "n 6elsan (ransport /ines, "n%' v' &o*rt of Appeals, the &o*rt stated that the presentation of the ins*ran%e poli%- )as not fatal be%a*se the loss of the %argo *ndo*btedl- o%%*rred )hile on board the petitioner>s vessel, *nli1e in Come "ns*ran%e in )hi%h the %argo passed thro*gh several stages )ith different parties and it %o*ld not be determined )hen the damage to the %argo o%%*rred, s*%h that the ins*rer sho*ld be liable for it' As in 6elsan, there is no do*bt that the loss of the %argo in the present %ase o%%*rred )hile in petitioner>s %*stod-' Similarl-, in this %ase, the presentation of the ins*ran%e %ontra%t or poli%- )as not ne%essar-' Altho*gh petitioner ob0e%ted to the admission of the S*brogation 9e%eipt in its &omment to respondent>s formal offer of eviden%e on the gro*nd that respondent failed to present the ins*ran%e %ontra%t or poli%-, a per*sal of petitioner>s Ans)er and Pre<(rial .rief sho)s that petitioner never @*estioned respondent>s right to s*brogation, nor did it disp*te the %overage of the ins*ran%e %ontra%t or poli%-' Sin%e there )as no iss*e regarding the validit- of the ins*ran%e %ontra%t or poli%-, or an- provision thereof, respondent had no reason to present the ins*ran%e %ontra%t or poli%- as eviden%e d*ring the trial' Cen%e, the fa%t*al findings of the &A, affirming the 9(&, are binding and %on%l*sive' &2' (h !h r or "o! !h pro5i%,! .,-s o$ !h ),%,1 6loss !o !h ship% "! 0,s !h " 1li1 ". o$ p !i!io" r*s s! v )or s. 2 YES. .oth the 9(& and the &A fo*nd the negligen%e of petitioner>s stevedores to be the pro=imate %a*se of the damage7loss to the shipment' "n disregarding the %ontention of petitioner that s*%h finding is %ontrar- to the do%*mentar- eviden%e, the &A had this to sa-D A(", ho)ever, %ontends that the finding of the trial %o*rt )as %ontrar- to the do%*mentar- eviden%e of re%ord, parti%*larl-, the (*rn Over S*rve- of .ad Order &argoes dated November 23, 1995, )hi%h )as e=e%*ted prior to the t*rn<over of the %argo b- the %arrier to the arrastre operator A(", and )hi%h sho)ed that the shipment alread- %ontained 2,4$2 damaged bags' Co)ever, %ontrar- to A(">s assertion, the )itnesses E marine %argo s*rve-ors of "n%h%ape for the vessel !inlian " )hi%h arrived on November 21, 1995 and *p to %ompletion of dis%harging on November 23, 1995, ! s!i$i ) !h,! i! 0,s o"l/ ,$! r ,ll !h #,1s 0 r -"lo,) ) $ro% !h v ss l !h,! !h ,.!-,l .o-"!i"1 o$ #,) or) r #,1s 0,s %,) . (here is no %ogent reason to depart from the r*ling of the trial %o*rt that A(" sho*ld be made liable for the 2,4$2 bags of damaged shipment' Needless to state, it is hornboo1 do%trine that the assessment of )itnesses and their testimonies is a matter best *nderta1en b- the trial %o*rt, )hi%h had the opport*nit- to observe the demeanor, %ond*%t or attit*de of the )itnesses' (he findings of the trial %o*rt on this point are a%%orded great respe%t and )ill not be reversed on appeal, *nless it overloo1ed s*bstantial fa%ts and %ir%*mstan%es )hi%h, if %onsidered, )o*ld materiall- affe%t the res*lt of the %ase' (he pro=imate %a*se of the damage :i'e', torn bags, spillage of %ontents and %a1ed7hardened portions of the %ontents; )as the improper handling of the %argoes b- A(">s stevedoresA and A(" has not satisfa%toril- reb*tted plaintiff<appellee>s eviden%e on the negligen%e of A(">s stevedores in the handling and safe1eeping of the %argoes' "ndeed, from the nat*re of the damage %a*sed to the shipment, i'e', torn bags, spillage of %ontents and hardened or %a1ed portions of the %ontents, it is not diffi%*lt to see that the damage %a*sed )as d*e to the negligen%e of A(">s stevedores )ho *sed steel hoo1s to retrieve the bags from the higher portions of the piles thereb- pier%ing the bags and spilling their %ontents, and )ho piled the bags in the open storage area of A(" )ith ins*ffi%ient %over thereb- e=posing them to the elements and F%a*singG the %ontents to %a1e or harden' &learl-, the finding of negligen%e on the part of petitioner>s stevedores is s*pported b- both testimonial and do%*mentar- eviden%e' Cen%e, )e see no reason to dist*rb the same' &7' (h !h r !h .o-r! .," !,8 9-)i.i,l "o!i. o$ !h M,",1 % "! Co"!r,.! # !0 " p !i!io" r ,") !h :hilippi" :or!s A-!hori!/ &::A' i" ) ! r%i"i"1 p !i!io" r*s li,#ili!/. 2 NO. Binall-, petitioner implores *s to ta1e 0*di%ial noti%e of Se%tion 4'$1, Arti%le V"" of the Management &ontra%t for %argo handling servi%es it entered )ith the PPA, )hi%h limits petitioner>s liabilit- to P5,$$$'$$ per pa%1age' +nfort*natel- for the petitioner, it %annot avail of 0*di%ial noti%e'

(he Management &ontra%t entered into b- petitioner and the PPA is not among the matters )hi%h the %o*rts %an ta1e 0*di%ial noti%e of' "t %annot be %onsidered an offi%ial a%t of the e=e%*tive department' (he PPA, )hi%h )as %reated b- virt*e of Presidential 6e%ree No' 354, as amended, is a government<o)ned and %ontrolled %orporation in %harge of administering the ports in the %o*ntr-' Obvio*sl-, the PPA )as onl- performing a proprietar- f*n%tion )hen it entered into a Management &ontra%t )ith petitioner' As s*%h, 0*di%ial noti%e %annot be applied'