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A.F. SANCHEZ BROKERAGE INC., petitioners, vs. THE HON.

COURT
OF APPEALS and FGU INSURANCE
CORPORATION, respondents.

DECISION
CARPIO MORALES, J.:

Before this Court on a petition for Certiorari is the appellate courts
Decision of August 10, 2000 reversing and setting aside the judgment of
[1]

Branch 133, Regional Trial Court of Makati City, in Civil Case No. 93-76B
which dismissed the complaint of respondent FGU Insurance Corporation
(FGU Insurance) against petitioner A.F. Sanchez Brokerage, Inc. (Sanchez
Brokerage).
On July 8, 1992, Wyeth-Pharma GMBH shipped on board an aircraft of
KLM Royal Dutch Airlines at Dusseldorf, Germany oral contraceptives
consisting of 86,800 Blisters Femenal tablets, 14,000 Blisters Nordiol tablets
and 42,000 Blisters Trinordiol tablets for delivery to Manila in favor of the
consignee, Wyeth-Suaco Laboratories, Inc. The Femenal tablets were placed
[2]

in 124 cartons and the Nordiol tablets were placed in 20 cartons which were
packed together in one (1) LD3 aluminum container, while the Trinordial
tablets were packed in two pallets, each of which contained 30 cartons. [3]

Wyeth-Suaco insured the shipment against all risks with FGU Insurance
which issued Marine Risk Note No. 4995 pursuant to Marine Open Policy No.
138.[4]

Upon arrival of the shipment on July 11, 1992 at the Ninoy Aquino
International Airport (NAIA), it was discharged without exception and
[5] [6]

delivered to the warehouse of the Philippine Skylanders, Inc. (PSI) located
also at the NAIA for safekeeping. [7]

In order to secure the release of the cargoes from the PSI and the Bureau
of Customs, Wyeth-Suaco engaged the services of Sanchez Brokerage which
had been its licensed broker since 1984. As its customs broker, Sanchez
[8]

Brokerage calculates and pays the customs duties, taxes and storage fees for
the cargo and thereafter delivers it to Wyeth-Suaco. [9]

On July 29, 1992, Mitzi Morales and Ernesto Mendoza, representatives of
Sanchez Brokerage, paid PSI storage fee amounting to P8,572.35 a receipt
for which, Official Receipt No. 016992, was issued. On the receipt, another
[10]

representative of Sanchez Brokerage, M. Sison, acknowledged that he
[11]

received the cargoes consisting of three pieces in good condition. [12]

indicated that the delivery consisted of one container with 144 cartons of Femenal and Nordiol and 1 pallet containing Trinordiol. the cargoes were delivered to Hizon Laboratories Inc. 3 x 700 [26] blister packs of Femenal tablets and 3 x 700 blister packs of Nordiol tablets were heavily damaged with water and emitted foul smell. Wyeth-Suaco issued a Notice of Materials Rejection of 38 cartons of Femenal and 3 cartons of Nordiol on the ground [27] . the customs examiner did not inspect the cargoes which were thereupon stripped from the aluminum [13] containers and loaded inside two transport vehicles hired by Sanchez [14] Brokerage. a representative of Wyeth-Suaco. Also [24] noted was that at the time of delivery to the warehouse of Hizon Laboratories Inc. a survey report dated July 31. 1992 stating that 41 cartons of Femenal tablets [21] and 3 cartons of Nordiol tablets were wetted (sic). CS-0731- 1538/92 attached to which was an Annexed Schedule whereon it was [23] indicated that prior to the loading of the cargoes to the brokers trucks at the NAIA. 1992. He thus placed a note above his signature on the [20] delivery receipt stating that 44 cartons of oral contraceptives were in bad order. bearing No. along with Ronnie Likas. a marine and cargo surveyor and insurance claim adjusters firm engaged by Wyeth-Suaco on behalf of FGU Insurance. On August 5. [25] On August 4. the Hizon Laboratories Inc. slight to heavy rains fell. which could account for the wetting of the 44 cartons of Femenal and Nordiol tablets. they were inspected and found to be in apparent good condition. acknowledged the delivery of the cargoes by affixing his signature on the delivery receipt. Ruben Alonzo thus prepared and signed. in Antipolo City for quality control check. he. (Elite Surveyors). issued a Destruction Report confirming that 38 x 700 blister packs of Femenal tablets. 1992. 1992. however. together with Ruben Alonzo [19] of Elite Surveyors. [15] Among those who witnessed the release of the cargoes from the PSI warehouse were Ruben Alonso and Tony Akas. [18] On July 31. employees of Elite Adjusters [16] and Surveyors Inc. 07037 dated July 29. Upon inspection. discovered that 44 cartons containing Femenal and Nordiol tablets were in bad order. Wyeth-Suaco being a regular importer. 1992. Upon instructions of Wyeth-Suaco.. The delivery [17] receipt. The remaining 160 cartons of oral contraceptives were accepted as complete and in good order. Ronnie Likas. [22] The Elite Surveyors later issued Certificate No.

384. 1993. from [29] Sanchez Brokerage the payment of P191. prompting its (Sanchez Brokerages) representative [32] Morales to inform the Import-Export Assistant of Wyeth-Suaco. The trial court. On demand by FGU Insurance for payment of the amount of P181. that when the sealed containers were opened outside the PSI warehouse. the filing by FGU Insurance of a complaint for damages before the Regional Trial Court of Makati City against the Sanchez Brokerage. As the Sanchez Brokerage refused to heed the demand. Ramir Calicdan. a common carrier within the context of Article 1732 of the New Civil Code. [31] disclaimed liability for the damaged goods. Sanchez Brokerage.49 it paid Wyeth-Suaco. [34] holding that the Survey Report prepared by the Elite Surveyors is bereft of any evidentiary support and a mere product of pure guesswork. dismissed the complaint. by letter of January 7. about the condition of the cargoes but that the latter advised to still deliver them to Hizon Laboratories where an adjuster would assess the damage.431. positing that the damage was due to improper and insufficient export packaging. by letter of August 25.431. Wyeth-Suaco filed an insurance claim against FGU Insurance which paid Wyeth-Suaco the amount ofP181. 1996. [33] Hence. Wyeth-Suaco thus issued Subrogation Receipt in favor of FGU [30] Insurance. [35] On appeal. it was discovered that some of the loose cartons were wet.49 in settlement of its claim under Marine Risk Note Number 4995. the appellate court reversed the decision of the trial court.25 representing the value of its loss arising from the damaged tablets. it holding that the Sanchez Brokerage engaged not only in the business of customs brokerage but also in the transportation and delivery of the cargo of its clients. the appellate court held that Sanchez Brokerage is presumed negligent and upon it rested the burden of proving that it exercised extraordinary negligence not only in instances when negligence is . 1992. hence.that they were delivered to Hizon Laboratories with heavy water damaged (sic) causing the cartons to sagged (sic) emitting a foul order and easily attracted flies.[28] Wyeth-Suaco later demanded. [36] Noting that Wyeth-Suaco adduced evidence that the cargoes were delivered to petitioner in good order and condition but were in a damaged state when delivered to Wyeth-Suaco. by Decision of July 29.

The Appellee is hereby ordered to pay the Appellant the principal amount of P181. On the merits.e. [37] The appellate court thus disposed: IN THE LIGHT OF ALL THE FOREGOING. 2001. Another Decision is hereby rendered in favor of the Appellant and against the Appellee as follows: 1. regardless of the nature of the action or proceedings . until the said amount is paid in full.00 as and by way of attorneys fees. Respondent FGU Insurance avers in its Comment that the proper course of action which petitioner should have taken was to file a petition for review on certiorari since the sole office of a writ of certiorari is the correction of errors of jurisdiction including the commission of grave abuse of discretion amounting to lack or excess of jurisdiction and does not include correction of the appellate courts evaluation of the evidence and factual findings thereon. from the date of the Decision of the Court. with interest thereupon at the rate of 6% per annum. 2. it being documented that petitioner withdrew from the warehouse of PSI the subject shipment entirely in good order and condition. and 3. it comes to this Court on petition for certiorari filed on March 6. [38] Sanchez Brokerages Motion for Reconsideration having been denied by the appellate courts Resolution of December 8. i. respondent FGU Insurance contends that petitioner. the appeal of the Appellant is GRANTED. as a common carrier. 2000 which was received by petitioner on January 5. The Decision of the Court a quo is REVERSED.directly proven but also in those cases when the cause of the damage is not known or unknown. In the main. 431.49. petitioner asserts that the appellate court committed grave and reversible error tantamount to abuse of discretion when it found petitioner a common carrier within the context of Article 1732 of the New Civil Code. failed to overcome the presumption of negligence. 2001. final orders or resolutions of the Court of Appeals in any case.. Rule 45 is clear that decisions. The counterclaims of the Appellee are DISMISSED. [39] The petition fails. The Appellee is hereby ordered to pay to the Appellant the amount of P20.000.

What petitioner is ascribing is an error of judgment. Anacleto F. FLORES: Q: What are the functions of these license brokers. Sanchez. Common carriers are persons. himself testified that the services the firm offers include the delivery of goods to the warehouse of the consignee or importer. the Manager and Principal Broker of Sanchez Brokerage. firms or associations engaged in the business of carrying or transporting passengers or goods or both. which would be but a continuation of the appellate process over the original case. to wit: Art. [42] Procedural technicalities aside. or air. Petitioner alleges that the appellate court erred in reversing and setting aside the decision of the trial court based on its finding that petitioner is liable for the damage to the cargo as a common carrier. which is properly the subject of an ordinary appeal. either upon the law or the facts of the case. 2001 cannot serve as a substitute for the lost remedy of appeal. ATTY. The [41] supervisory jurisdiction of this Court to issue a cert writ cannot be exercised in order to review the judgment of lower courts as to its intrinsic correctness. [40] The Resolution of the Court of Appeals dated December 8. a customs broker. the petitioner must prove not merely reversible error but also grave abuse of discretion amounting to lack or excess of jurisdiction. water. for compensation. 2001. The filing by petitioner of a petition for certiorari on March 6.involved. Since petitioner failed to appeal within 15 days or on or before January 20. the rule is well settled that in a petition for certiorari. not of jurisdiction. by land. license customs broker? WITNESS: . to be also a common carrier. the appellate courts decision had become final and executory. the petition still fails. Jr. may be appealed to this Court by filing a petition for review. corporations. 1732. 2000 was received by petitioner on January 5. offering their services to the public.. 2000 denying the motion for reconsideration of its Decision of August 10. Where the issue or question involves or affects the wisdom or legal soundness of the decision not the jurisdiction of the court to render said decision the same is beyond the province of a petition for certiorari. 2001. In another vein. as defined under Article 1732 of the Civil Code. The appellate court did not err in finding petitioner.

it is presumed to have been at fault or to have acted negligently. and those upon approval of the importer. In the event that the goods are lost. we calculate the taxes that has to be paid in cargos. destroyed or deteriorated. As customs broker. and to exercise due care in the handling and stowage. including such methods as their nature requires. under Article 1733 of the Civil Code. it was established that petitioner received the cargoes from the PSI warehouse in NAIA in good order and condition. The contention.[43] Article 1732 does not distinguish between one whose principal business activity is the carrying of goods and one who does such carrying only as an ancillary activity. unless it proves that it observed extraordinary diligence. petitioner posits that they were damaged due to the fault or negligence of the shipper for failing to properly pack them and to the inherent characteristics of the goods . extraordinary diligence in the vigilance over [45] the goods it transports according to all the circumstances of each case. Inc. [46] The concept of extra-ordinary diligence was explained in Compania Maritima v. It suffices that petitioner undertakes to deliver the goods for pecuniary consideration. and that upon [49] delivery by petitioner to Hizon Laboratories Inc. some of the cargoes were found to be in bad order. as noted in the Delivery Receipt issued by [50] petitioner. and as indicated in the Survey Report of Elite Surveyors and the [51] Destruction Report of Hizon Laboratories. and that it should not be faulted for following the instructions of [53] Calicdan of Wyeth-Suaco to proceed with the delivery despite information . we prepare the entry together for processing and claims from customs and finally deliver the goods to the warehouse of the importer. It requires common carriers to render service with the greatest skill and foresight and to use all reasonable means to ascertain the nature and characteristics of goods tendered for shipment. Court of Appeals: [47] The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to. In this light. or destruction of the goods entrusted to it for sale. [48] In the case at bar. therefore. of petitioner that it is not a [44] common carrier but a customs broker whose principal function is to prepare the correct customs declaration and proper shipping documents as required by law is bereft of merit. carriage and delivery.. [52] In an attempt to free itself from responsibility for the damage to the goods. petitioner as a common carrier is mandated to observe.

were found to be wet. then it should naturally have received the cargo under protest or with reservations duly noted on the receipt issued by PSI. [57] Moreover. they would certainly have gone back to PSI. he is not relieved of liability for the resulting damage. petitioner admitted that it had no documentary evidence to prove that at the time it received the cargoes. 4 of Article 1734 of the Civil Code exempts a [55] common carrier from liability if the loss or damage is due to the character of the goods or defects in the packing or in the containers. But it made no such protest or reservation. on examination outside the PSI warehouse. indeed. [54] While paragraph No. petitioner would [58] have presented. the rule is that if the improper packing is known to the carrier or his employees or is apparent upon ordinary observation. [59] Petitioner goes on to posit that contrary to the report of Elite Surveyors. no witness having identified it and interpreted the technical terms thereof. While Calicdan testified that he received the purported telephone call of Morales on July 29. it is not determinable. the employees of the PSI from whom Morales and Domingo took delivery of the cargo to prove that. 1992. no rain fell that day. . Aside from that phone call.[60] The 4-page weather data furnished by PAGASA on request of Sanchez [61] Brokerage hardly impresses. as observed by the appellate court. he failed to specifically declare what time he received the call. but he nevertheless accepts the same without protest or exception notwithstanding such condition. Or. As to whether the call was made at the PSI warehouse when the shipment was stripped from the airport containers. or when the cargoes were already in transit to Antipolo. Instead. a part of it was wet. part of the cargoes was already damaged when the container was allegedly opened outside the warehouse. [56] If the claim of petitioner that some of the cartons were already damaged upon delivery to it were true. as witness.conveyed to the latter that some of the cartons. if indeed petitioners employees only examined the cargoes outside the PSI warehouse and found some to be wet. showed to the warehouseman the damage. Inc. and demanded then and there for Bad Order documents or a certification confirming the damage. it asserts that some of the cargoes were already wet on delivery by PSI outside the PSI warehouse but such notwithstanding Calicdan directed Morales to proceed with the delivery to Hizon Laboratories. damaged or in bad condition.

vs.: . G. UNKNOWN OWNER OF THE VESSEL M/V "NATIONAL HONOR. July 8. as found by Hizon Laboratories. Respondents. however.." NATIONAL SHIPPING CORPORATION OF THE PHILIPPINES and INTERNATIONAL CONTAINER SERVICES. ATTY. that arrived at the NAIA were damaged and claimed by the Wyeth-Suaco without any question? WITNESS: A: Yes sir.. Costs against petitioner. 2000 Decision of the Court of Appeals is hereby AFFIRMED. Petitioners. and upon their delivery to Hizon Laboratories. it was incumbent on petitioner to prove that it exercised extraordinary diligence in the carriage of the goods. DECISION CALLEJO. No. the oral contraceptives were damaged by rainwater while in transit to Antipolo City is more likely then. the August 10. It did not. SO ORDERED. SR.R. there was an instance that one cartoon (sic) were wetted (sic) but Wyeth- Suaco did not claim anything against us. there was a time that we experienced that there was a cartoon (sic) wetted (sic) up to the bottom are wet specially during rainy season. there was a similar instance when the shipment of Wyeth-Suaco was also found to be wet by rain. a portion thereof was found to be in bad order. 161833. Hence. ATTY.[62] Since petitioner received all the cargoes in good order and condition at the time they were turned over by the PSI warehouseman. 2005 PHILIPPINE CHARTER INSURANCE CORPORATION. its presumed negligence under Article 1735 of the Civil Code remains unrebutted. WHEREFORE. oral contraceptives. Inc. J. FLORES: Q: Was there any instance that a shipment of this nature. The possibility on the other hand that. INC.. Inc. FLORES: Q: HOW IS IT? WITNESS: A: We experienced. Sanchez himself testified that in the past.

National Shipping Corporation of the Philippines (NSCP)..547. 68043 dated October 24. issued Bill of Lading No. Proof to the contrary shall be admissible when this Bill of Lading has been transferred to a third party acting in good faith. ingredient or characteristic that may cause damage.6 There were no markings on the outer portion of the crates except the name of the consignee. otherwise.7 Crate No. other property.. and one (1) unit Milling Machine complete with parts and accessories. Korea. Manila.R. The shipment was for delivery to Manila.9 under Marine Risk Note No. whether principal or agent.060 kgs. Incorporated (BMICI). covered by Commercial Invoice No. Samhwa Inter-Trans Co. 2. quantity. 1 measured 24 cubic meters and weighed 3. The shipper. ship.. 1997 of the Regional Trial Court (RTC) of Manila.000. condition. Incorporated (ICTSI) was . contents. on the other hand. and packed and may be handled in ordinary course without damage to the goods. CV No. in Civil Case No. Ltd. as shipper. Binondo. measured 10 cubic meters and weighed 2. 1995. The Antecedent On November 5. 1994. on board the vessel M/V "National Honor. or value of the Goods and the Carrier shall be under no responsibility whatsoever in respect of such description or particulars.00 with the Philippine Charter Insurance Corporation (PCIC) thru its general agent. Trading Co. measure. represents and warrants that the goods are properly described. any condition. 95-73338.This is a petition for review under Rule 45 of the 1997 Revised Rules of Civil Procedure assailing the Decision1dated January 19. NSGPBSML5125653 in the name of the freight forwarder. secured. complete and in good order condition. 1 and Crate No. descriptions or representations. quality.8 It was insured for P2.00 C&F Manila. quality. one (1) unit Surface Grinder complete with parts and accessories. marks. issued Bill of Lading No. Freight forwarder. numbers. 57357 which affirmed the Decision dated February 17.270. The shipment had a total invoice value of US$90. marked. 2004 of the Court of Appeals (CA) in CA-G. namely. consigned to the order of Stamm International Inc. and for the failure to do so the shipper agrees to be liable for and fully indemnify the carrier and hold it harmless in respect of any injury or death of any person and loss or damage to cargo or property. or property or persons and guarantees the correctness of the particulars. Crate No. The Lathe Machine was stuffed in the crate. 13. Branch 37. The International Container Terminal Services. It contained the following articles: one (1) unit Lathe Machine complete with parts and accessories. noted of the total number of Containers or other packages or units enumerated overleaf. The carrier shall be responsible as to the correctness of any such mark. 2. of Seoul. nature. SH94103062 in the name of the shipper consigned to the order of Metropolitan Bank and Trust Company with arrival notice in Manila to ultimate consignee Blue Mono International Company. the ship or to persons. Philippines. Ltd.4 The shipment was contained in two wooden crates. weight or each piece or package and description of the goods and agrees to ascertain and to disclose in writing on shipment.10 The M/V "National Honor" arrived at the Manila International Container Terminal (MICT) on November 14. Philippines. for its part. It is provided therein that: 12. YJ-73564 DTD5 and a Packing List. loaded a shipment of four units of parts and accessories in the port of Pusan. J. No representation is made by the Carrier as to the weight. Family Insurance and Investment Corporation. Crate No. This Bill of Lading shall be prima facie evidence of the receipt of the Carrier in apparent good order and condition except as. injury or detriment to the goods." represented in the Philippines by its agent. Korea. Makati.620 kgs. On the flooring of the wooden crates were three wooden battens placed side by side to support the weight of the cargo. 1995. NSCP. description.

19 BMICI subsequently filed separate claims against the NSCP.14 Claudio Cansino. It prayed. and it knew the contents of the crate. the checker-inspector of the NSCP. When the other companies denied liability. he placed the sling cables only on those portions of the crate where . PCIC. about five feet high from the vessel’s twin deck.50. the vessel started discharging its cargoes using its winch crane. considering that the crate contained heavy machinery." NSCP and ICTSI.17 resulting in extensive damage to the shipment.000.634. insufficient packing or acts of the shipper. this was a normal procedure. In Dauz’s experience. placed two sling cables on each end of Crate No. PCIC paid the claim and was issued a Subrogation Receipt23 for P1. Cost of suit.00. filed its Answer with Counterclaim and Cross-claim against its co-defendant NSCP.740. testified that the wooden battens placed on the wooden flooring of the crate was of good material but was not strong enough to support the weight of the machines inside the crate. checked the cargo and found it in apparent good condition. a Complaint for Damages24against the "Unknown owner of the vessel M/V National Honor. 2. took delivery of the cargo in such damaged condition.12 the exclusive arrastre operator of MICT.740. held in all equal setting. the safety inspector of ICTSI. as subrogee.21 and its insurer. a winchman from the ICTSI. 1. hence. Attorney’s fees in the amount of P100. it is respectfully prayed of this Honorable Court that judgment be rendered ordering defendants to pay plaintiff. conducted an inspection of the cargo. JRM Incorporated. the mid-portion of the wooden flooring suddenly snapped in the air. among others – WHEREFORE.. The Mariners’ Adjustment Corporation hired by PCIC conducted a survey and declared that the packing of the shipment was considered insufficient. 3. It ruled out the possibility of taxes due to insufficiency of packing. Actual damages in the amount of P1. On March 22.20 the ICTSI.11 The following day. BMICI found that the same could no longer be used for the intended purpose. the following: 1. should have been used.50 plus legal interest at the time of the filing of this complaint until fully paid. as defendants.500. At the trial.15 No sling cable was fastened on the mid-portion of the crate.13 They inspected the hatches.furnished with a copy of the crate cargo list and bill of lading.16 As the crate was being hoisted from the vessel’s hatch. the PCIC. Anthony Abarquez. sending all its contents crashing down hard. The crane was operated by Olegario Balsa. the stevedore of the ICTSI.18 Upon receipt of the damaged shipment.00. Denasto Dauz.22 for US$61. PCIC alleged that the loss was due to the fault and negligence of the defendants. for its part. along with the crew and the surveyor of the ICTSI. Branch 35.634. claiming that the loss/damage of the shipment was caused exclusively by the defective material of the wooden battens of the shipment. BMICI’s customs broker. filed with the RTC of Manila. Jr.25 ICTSI. jointly or in the alternative. It opined that three to four pieces of cable or wire rope slings. He averred that most stevedores did not know how to read and write. never by-passing the center of the crate. 1995.

32 The appellate court held. Inc. with this fallo – WHEREFORE. the decision of the Regional Trial Court of Manila. the ICTSI used only two cable slings on each side of the crate and would not place a sling cable in the mid-section. especially so where the evidence in support thereof is more than substantial. Branch 35. as mere hearsay and devoid of any evidentiary weight. the loss of the shipment contained in Crate No. Not satisfied. where it alleges that: I. with costs against the plaintiff.. He said that unless otherwise indicated by arrow signs. 1997.33 It blamed the shipper for its failure to use materials of stronger quality to support the heavy machines and to indicate an arrow in the middle portion of the cargo where additional slings should be attached. THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW IN NOT HOLDING THAT RESPONDENT COMMON CARRIER IS LIABLE FOR THE DAMAGE SUSTAINED BY THE SHIPMENT IN THE POSSESSION OF THE ARRASTRE OPERATOR. SO ORDERED. the complaint of the plaintiff. Del Pan & Co.27 He concluded that the loss/damage was caused by the failure of the shipper or its packer to place wooden battens of strong materials under the flooring of the crate.29 According to the trial court. The middle wooden batten had a hole (bukong-bukong). that it was bound by the finding of facts of the RTC.the arrow signs were placed. inter alia. this petition by the PCIC. PCIC appealed31 to the CA which rendered judgment on January 19. thus: WHEREFORE. SO ORDERED. 1 was due to the internal defect and weakness of the materials used in the fabrication of the crates. II. dated February 17. as in the case of fragile cargo. 2004 affirming in toto the appealed decision. the affiant not having testified.35 Hence.28 The trial court rendered judgment for PCIC and ordered the complaint dismissed. The ICTSI adduced in evidence the report of the R. and the respective counterclaims of the two defendants are dismissed. stating that the shipment was properly packed and secured. It ratiocinated that the loss of the shipment was due to an excepted cause – "[t]he character of the goods or defects in the packing or in the containers" and the failure of the shipper to indicate signs to notify the stevedores that extra care should be employed in handling the shipment. that the damage to the cargo could be attributed to insufficient packing and unbalanced weight distribution of the cargo inside the crate as evidenced by the types and shapes of items found.34 The CA concluded that common carriers are not absolute insurers against all risks in the transport of the goods.26 He declared that the crate fell from the cranes because the wooden batten in the mid-portion was broken as it was being lifted.J. The trial court rejected the certification30 of the shipper. is AFFIRMED. . and to place a sign in its mid-term section where the sling cables would be placed.

in such case. Respondent NSCP counters that if ever respondent ICTSI is adjudged liable. Had the respondent only bothered to check the list of its contents. they would have been nervous enough to place additional slings and cables to support those massive machines. which were composed almost entirely of thick steel.39 Respondent ICTSI avers that the issues raised are factual. Citing Eastern Shipping Lines. it is liable for the loss or damage to the cargo absent satisfactory explanation given by the carrier as to the exercise of extraordinary diligence. It argues that in the performance of its obligations. THE COURT OF APPEALS GROSSLY MISCOMPREHENDED THE FACTS IN FINDING THAT THE DAMAGE SUSTAINED BY THE [SHIPMENT] WAS DUE TO ITS DEFECTIVE PACKING AND NOT TO THE FAULT AND NEGLIGENCE OF THE RESPONDENTS. as shown by the fact that it was accepted on board the vessel and arrived in Manila safely. the petitioner is raising questions of facts. falls solely upon the shoulder of respondent ICTSI. it is not solidarily liable with it. BMICI. The petitioner avers that the shipment was sufficiently packed in wooden boxes. Court of Appeals. It reiterates that the loss/damage was caused by the . clearly intended for heavy industries. Here lies the utter failure of the respondents to observed extraordinary diligence in the handling of the cargo in their custody and possession. inasmuch as both are charged with the obligation to deliver the goods in good condition to its consignee. inasmuch as the discharging of cargoes from the vessel was its exclusive responsibility. Yet.THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW IN NOT APPLYING THE STATUTORY PRESUMPTION OF FAULT AND NEGLIGENCE IN THE CASE AT BAR. the arrastre operator. It further avers that the "carrier cannot discharge directly to the consignee because cargo discharging is the monopoly of the arrastre. one milling machine and one grinding machine-all coming with complete parts and accessories. improper in a petition for review on certiorari. Extra-care should have been made and extended in the discharge of the subject shipment. hence. therefore. Inc. and not by its negligence. As indicated in the list. not one among the respondents were cautious enough.37 The petitioner posits that the loss/damage was caused by the mishandling of the shipment by therein respondent ICTSI.36 The petitioner asserts that the mere proof of receipt of the shipment by the common carrier (to the carrier) in good order. it is not obliged to exercise extraordinary diligence. It emphasizes that the respondents did not contest the contents of the bill of lading.38 it posits that respondents are liable in solidum to it. improper under Rule 45 of the Rules of Court. Besides. and their arrival at the place of destination in bad order makes out a prima facie case against it. the boxes contained one lat[h]e machine. III. which the Court of Appeals should have readily observed in its appreciation of the pertinent facts. and that the respondents knew that the manner and condition of the packing of the cargo was normal and barren of defects. It maintains that it behooved the respondent ICTSI to place three to four cables or wire slings in equal settings. the respondent ICTSI should observe the same degree of diligence as that required of a common carrier under the New Civil Code of the Philippines." Liability. It claims that it is merely a depository and not a common carrier. including the center portion of the crate to prevent damage to the cargo: … [A] simple look at the manifesto of the cargo and the bill of lading would have alerted respondents of the nature of the cargo consisting of thick and heavy machinery. hence. v. The petitioner insists that the respondents did not observe extraordinary diligence in the care of the goods.

This rule. It requires common carriers to render service with the greatest skill and foresight and "to use all reasonable means to ascertain the nature and characteristic of goods tendered for shipment. is not ironclad and admits certain exceptions. by the person entitled to receive them.40 We have reviewed the records and find no justification to warrant the application of any exception to the general rule.failure of the shipper or his packer to place a sign on the sides and middle portion of the crate that extra care should be employed in handling the shipment. As an alternative. under Article 1734 of the New Civil Code. surmises or conjectures. earthquake. 2. (6) there is no citation of specific evidence on which the factual findings are based.44 To overcome the presumption of negligence in the case of loss. Act of the public enemy in war. Flood. including such methods as their nature requires. The respondent asserts that the testimony of Anthony Abarquez. carriage and delivery. . a presumption arises against the carrier of its failure to observe that diligence.45 However. however. The well-entrenched rule in our jurisdiction is that only questions of law may be entertained by this Court in a petition for review on certiorari. storm. the carrier for transportation until delivered to."42 The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of. The petition has no merit.500. the common carrier must prove that it exercised extraordinary diligence. absurd or impossible. and received by. (7) the findings of absence of facts are contradicted by the presence of evidence on record. would justify a different conclusion. whether international or civil. are mandated to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them. (2) the inference is manifestly mistaken. or destruction of the goods entrusted to it for sale. or until the lapse of a reasonable time for their acceptance. should prevail over that of Rolando Balatbat. such as when (1) the conclusion is grounded on speculations. and there need not be an express finding of negligence to hold it liable. if properly considered. lightning or other natural disaster or calamity. its liability is limited only to P3. (3) there is grave abuse of discretion. and to exercise due care in the handling and stowage.00 as expressed in the liability clause of Gate Pass CFS-BR-GP No. who conducted his investigation at the site of the incident. (9) the Court of Appeals manifestly overlooked certain relevant and undisputed facts that. the presumption of negligence does not apply to any of the following causes: 1. and that the middle wooden batten on the flooring of the crate had a hole. (5) the findings of fact are conflicting. from the nature of their business and for reasons of public policy. and (11) such findings are contrary to the admissions of both parties. it argues that if ever adjudged liable. destruction or deterioration of the goods. We agree with the contention of the petitioner that common carriers. 319773. according to all the circumstances of each case. (8) the findings of the Court of Appeals are contrary to those of the trial court. (10) the findings of the Court of Appeals are beyond the issues of the case.43 When the goods shipped are either lost or arrive in damaged condition. (4) the judgment is based on a misapprehension of facts.41 The Court has defined extraordinary diligence in the vigilance over the goods as follows: The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier to know and to follow the required precaution for avoiding damage to.

" which considerably affected. It bears stressing that the enumeration in Article 1734 of the New Civil Code which exempts the common carrier for the loss or damage to the cargo is a closed list. 20-24). the middle wooden batten gave way and collapsed.47 "Defect" is the want or absence of something necessary for completeness or perfection. therefore.50 The CA affirmed the ruling of the RTC. in the case of the crate in dispute. Crate No. In other words. i. cannot be held as blame worthy for the loss of the machineries contained in Crate No. Because of the enormous weight of the machineries inside this crate. 1 was provided by the shipper of the machineries in Seoul. 5. they too simultaneously with the middle wooden battens gave way and collapsed (TSN. had a knot hole or "bukong-bukong. The crate should have three solid and strong wooden batten placed side by side underneath or on the flooring of the crate to support the weight of its contents." In the present case. The trial court found that the breakage of the crate was not due to the fault or negligence of ICTSI. Said defendant. particularly number (4) thereof. Order or act of competent public authority. The breakage and collapse of Crate No. We find no compelling reason to depart from the factual findings of the trial court. pp. the common carrier is burdened to prove any of the aforecited causes claimed by it by a preponderance of evidence. However.3. the trial court declared that based on the record. inferior means of poor quality. 4. As the combined strength of the other two wooden battens were not sufficient to hold and carry the load. Korea. . a deficiency in something essential to the proper use for the purpose for which a thing is to be used. reduced and weakened its strength. 1996. 1 and the total destruction of its contents were not imputable to any fault or negligence on the part of said defendant in handling the unloading of the cargoes from the carrying vessel. or second rate.e. 1. the loss of the shipment was caused by the negligence of the petitioner as the shipper: The same may be said with respect to defendant ICTSI. Sept. thus: The case at bar falls under one of the exceptions mentioned in Article 1734 of the Civil Code.46 To exculpate itself from liability for the loss/damage to the cargo under any of the causes. a lack or absence of something essential to completeness.49 A thing may be of inferior quality but not necessarily defective. the character of the goods or defects in the packing or in the containers. Act or omission of the shipper or owner of the goods.. which carried substantial volume of the weight of the crate’s contents. the burden of evidence is shifted to the shipper to prove that the carrier is negligent. The character of the goods or defects in the packing or in the containers. 26. Upon examination of the records. If the carrier succeeds.48 On the other hand. There is nothing in the record which would indicate that defendant ICTSI had any role in the choice of the materials used in fabricating this crate. "defectiveness" is not synonymous with "inferiority. but was due solely to the inherent defect and weakness of the materials used in the fabrication of said crate. the middle wooden batten. mediocre. but to the inherent defect and weakness of the materials used in the fabrication of the said crate. although there were three wooden battens placed side by side on its flooring.

Q: How many arrows did you see? A: Four (4) on both sides. a stevedore of ICTSI. Ma’am. there is an arrow drawn where the sling is placed. Q: And where did you see or what parts of the crate did you see those arrows? A: At the corner of the crate. Ma’am." . if there are no arrows.It appears that the wooden batten used as support for the flooring was not made of good materials. which caused the middle portion thereof to give way when it was lifted. Mr. testified before the court their duties and responsibilities: "Q: With regard to crates. what do you do with the crates? A: After I have placed a sling properly. Ma’am. The shipper also failed to indicate signs to notify the stevedores that extra care should be employed in handling the shipment. Q: Now. Ma’am. what do you do with the crates? A: Everyday with the crates. I ask the crane (sic) to haul it. … Q: Now. what do you do with these crates? A: A sling is placed on it. did you find any other marks on the crate? A: Nothing more. Q: When the crates have arrows drawn and where you placed the slings. Ma’am. Ma’am. that’s where I placed the slings. Claudio Cansino. … Q: What did you do with the arrows? A: When I saw the arrows. if any. were written or were marked on the crate? A: The thing that was marked on the cargo is an arrow just like of a chain. … Q: Now. would you place slings on the parts where there are no arrows? A: You can not place slings if there are no arrows. what. Ma’am. Ma’am. Witness. Q: After you placed the slings. Ma’am.

quality or characteristic that may cause damage. NSGPBSML512565 issued by the respondent NSCP and accepted by the petitioner. the issue of negligence is factual in nature and in this regard.52While it is true that the crate contained machineries and spare parts. it cannot thereby be concluded that the respondents knew or should have known that the middle wooden batten had a hole.Appellant’s allegation that since the cargo arrived safely from the port of [P]usan. Korea without defect. or that it was not strong enough to bear the weight of the shipment. in fact. The petitioner failed to adduce any evidence to counter that of respondent ICTSI. that the crates were sealed and that the contents thereof could not be seen from the outside. the latter represented and warranted that the goods were properly packed.51 We agree with the trial and appellate courts. and disclosed in writing the "condition.53 IN LIGHT OF ALL THE FOREGOING. . It would not have so easily collapsed had the cargo been properly packed. that the shipment was in apparent good condition. or that the three wooden battens under the flooring of the cargo were not defective or insufficient or inadequate. it is settled that factual findings of the lower courts are entitled to great weight and respect on appeal. The statement in the Bill of Lading. The petitioner failed to rebut the testimony of Dauz. the fault should be attributed to the arrastre operator who mishandled the cargo. Not only did the shipper fail to properly pack the cargo." Absent any signs on the shipment requiring the placement of a sling cable in the mid-portion of the crate. under Bill of Lading No. the respondent ICTSI was not obliged to do so. and. the petition is DENIED for lack of merit. accorded finality when supported by substantial evidence. nature. SO ORDERED. injury or detriment to the goods. The cargo fell while it was being carried only at about five (5) feet high above the ground. is without merit. is sufficient to sustain a finding of absence of defects in the merchandise. Case law has it that such statement will create a prima faciepresumption only as to the external condition and not to that not open to inspection. The shipper should have used materials of stronger quality to support the heavy machines. On the other hand. There is no showing in the Bill of Lading that the shipment was in good order or condition when the carrier received the cargo. At any rate. it also failed to indicate an arrow in the middle portion of the cargo where additional slings should be attached.