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G.R. No.


October 15, 2015


Commercial Law; Transportation Law; Arrastre operator. The arrastre
operator's principal work is that of handling cargo, so that its
drivers/operators or employees should observe the standards and measures
necessary to prevent losses and damage to shipments under its custody. 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 tum
them over to the party entitled to their possession.
Same; same; same. 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.
FACTS: The petitioner is an arrastre operator. A shipment of kraft linear
board from US to be delivered to San Miguel Corp in Manila, was made on
board M/V Nicole owned by the Transocean, a foreign corporation whose
Philippine representative is Philippine Transmarine. Upon arrival and
shortly thereafter, the said linear boards were offloaded from the vessel to
the arrastre petitioner. However, upon assessment, 158 rolls of the goods
were reported to be damaged during shipping. Further, upon withdrawal to
the arrastre to be delivered first to San Miguels broker Dynamic and later
on to consignee San Miguel, another 54 rolls of board were reported to be
damaged. The respondent Allied, being the insurer of the goods, paid San
Miguel of the damage and later on seek reimbursement against Transocean,
Philippine Transmarine, Dynamic and petitioner for the lost suffered in
paying the consignee San Miguel by filing a Complaint in RTC Makati. It
alleged that from the port of origin, the goods were in good condition and it
was merely damaged due to the negligence of the abovementioned
defendants. However, petitioner denied the allegations contending that the
goods are already in bad condition when they deliver it to the broker and
consignee and assailed exercise of due diligence in the taking care of the
said goods. The RTC however ruled in favor of Allied and found all the
defendants liable for losses. Upon appeal, the CA affirmed the decision of
the RTC. Hence, this appeal made only by the petitioner. Petitioner claims
that the CA erroneously failed to note the so-called Tum Over Survey of Bad
Order Cargoes and the Requests for Bad Order Survey which supposedly

could release it from liability for the damaged shipment. The reports were
apparently made prior to the shipment's turnover from petitioner to
Dynamic and they purportedly show that no additional loss or damage
happened while the shipment was in petitioner's custody as the reports only
mention the 158 rolls that were damaged during shipping or prior to
petitioners possession hence not liable to the additional 54 damaged rolls.
ISSUE: Whether or not the petitioner shall be held liable for the losses
sustained by respondent.
HELD: AFFIRMATIVE. The petitioner wanted the Court to reexamine the
decisions and evidences presented before the RTC and CA who have the
same ruling which is not allowed by law, except upon the existence of
exceptions allowed. However, none of those exists in this case.
There is no misapprehension of facts nor the evidences presented by
the petitioner such as the Tum Over Survey of Bad Order Cargoes and the
Requests for Bad Order Survey. The trial court correctly gave little credence
to the said reports since between the arrastre operator and the consignee
exist a relationship similar to that of a warehouseman and a depositor. The
relationship between the consignee and the common carrier is similar to
that of the consignee and the arrastre operator. Both the arrastre and the
carrier are, therefore, charged with and responsible to deliver the goods in
good condition to the consignee.
The RTC correctly held that the broker, Dynamic, cannot alone be held
liable for the additional 54 rolls of damaged goods since such damage
happened (a) while the goods were in the custody of the arrastre petitioner;
(b) when they were in transition from petitioner's custody to that of
Dynamic; and (c) during Dynamic's custody. While the RTC could not
conclude with pinpoint accuracy who among the ATI and Dynamic caused
which particular damage and in what proportion or quantity, it was
unblemished that both ATI and Dynamic failed to discharge the burden of
proving that damage on the 54 rolls did not occur during their custody. It
was proven that during petitioners custody and while it will transfer the
goods to the broker, there was a use of wrong lifting equipment thereby
deliberating the cause of such damage. It is a finding of fact of the lower
court which the SC will not disturb.
In its operations, the arrastre operator must observe the same degree
of diligence of that required of a common carrier and a warehouseman. And
it must prove more than a fact that other parties might be liable for the
losses but it must prove that it itself exercised due care in handling thereof,
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.

As established, there was negligence in both petitioner and Dynamic's

performance of their duties in the handling; storage and delivery of the
subject shipment to San Miguel thereby resulting in the loss of 54 rolls of
kraft linear board, solidary liability for such loss shall be imposed.