Facts:

The case involves 2100 Customs Brokers, Inc. (Petitioner) versus Philam Insurance Company, now AIG Philippines Insurance, Inc. (Respondent), represented in G.R. No. 223377, decided on June 10, 2020. The dispute arose from a shipment of goods involving Ablestik Laboratories (Ablestik) that included 63 jars of Ablebond Adhesive sent via Japan Airlines (JAL) Flight No. JL 5261, with an air waybill issued in Los Angeles, California on February 27, 2001. The goods were designated for consignee TSPIC and transited in Japan before expected arrival in Manila on March 1, 2001. Ablestik provided specific handling instructions indicating that the goods were perishable, requiring delivery within 72 hours and to be maintained at -40°F during transit. The shipment was insured under Marine Cargo Certificate 0801012154 with Philam Insurance.

Upon arrival at the Ninoy Aquino International Airport, the goods were stored in a warehouse and were only notified to 2100 CBI on March 2, 2001, with TSPI

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Facts:

Background and Shipment Details

• On February 27, 2001, Ablestik Laboratories shipped two cardboard boxes containing 63 jars of Ablebond Adhesive on board Japan Airlines Flight No. JL 5261 from Los Angeles, USA.
• The shipment, covered by Airway Bill No. 131-66081842, was destined to arrive in Manila, with a scheduled connecting flight (JAL Flight No. JL 745) after transshipment in Japan.
• Ablestik issued detailed handling instructions to its freight forwarder, U-Freight America Inc., which emphasized:
• The perishable nature of shipments containing dry ice requiring delivery within 72 hours.
• The necessity to maintain frozen products at -40°F, with re-icing in transit if transit exceeds 72 hours.
• On arrival, the cargo must be stored in a freezer at 32°F or colder.

Insurance Coverage and Parties Involved

• The goods were insured by Philam Insurance Company (now AIG Philippines Insurance Inc.) under Marine Cargo Certificate No. 0801012154 and Open Policy Number 9595292, covering all risks against loss or damage.
• TSPIC, the consignee, and 2100 Customs Brokers, Inc. (2100 CBI), the petitioner, became embroiled in disputes over the handling and subsequent damage to the shipment.

Timeline of Events and Communication

• Arrival and Storage:
• The shipment arrived at Ninoy Aquino International Airport (NAIA) at 1:30 a.m. on March 1, 2001.
• The cargo was stored at the Paircargo warehouse within the NAIA Complex.
• Notification and Freight Payment:
• On March 2, 2001, at 2:47 p.m., TSPIC notified 2100 CBI of the shipment’s arrival, forwarding crucial documents including a Packing List and Shipment Handling Instructions.
• TSPIC also issued an extra copy of the Airway Bill marked “freight collect,” which necessitated payment of freight charges (amounting to P14,672.00) for the BOC’s release of the original document.
• Due to lateness of the documents and closure of banks on March 2 (Friday), the freight charges were only paid on March 5, 2001.
• Delivery and Damage Discovery:
• At approximately 2:00 a.m. on March 6, 2001, 2100 CBI took delivery of the cargo and delivered it to TSPIC.
• Upon receipt, TSPIC discovered that the dry ice contained within the boxes had melted, as confirmed by a Damage Report and photographic evidence from MASCO (Manila Adjusters Surveyors Company).
• Claims and Litigation:
• TSPIC filed a claim against 2100 CBI for the value of the damaged shipment, which 2100 CBI refused to pay, asserting that the damage resulted from TSPIC’s failure to give pre-alerts and timely payment for freight charges.
• TSPIC subsequently filed a claim with Philam for recovery, resulting in a payment of P391,917.69 after MASCO’s survey.
• Philam, having settled the claim on behalf of TSPIC and executed a subrogation receipt on July 30, 2001, filed a claim for reimbursement against 2100 CBI, which was later denied.
• Lower Court Proceedings:
• The Metropolitan Trial Court (MeTC) ruled on June 6, 2013, ordering 2100 CBI to pay actual damages, attorney’s fees, and costs, emphasizing that 2100 CBI, as a customs broker acting as a common carrier, was expected to exercise extraordinary diligence in handling perishable goods.
• The Regional Trial Court (RTC) affirmed the MeTC’s decision on May 23, 2014.
• The Court of Appeals (CA) denied 2100 CBI’s petition on October 12, 2015 and its subsequent Motion for Reconsideration on March 7, 2016.

Parties’ Positions

• 2100 CBI’s position:
• Claimed it was merely a customs broker or commercial agent, not a common carrier responsible for the transportation of goods.
• Argued that it did not have custody of the shipment until its release by the Bureau of Customs (BOC), and that any delay was attributable to TSPIC’s failure to timely pay the freight charges and provide necessary documents.
• Philam’s position:
• Asserted that 2100 CBI, by virtue of being a common carrier, had the duty to exercise extraordinary diligence and was therefore liable for the damages.
• Maintained that the Marine Cargo Certificate, despite its name, covered the shipment transported by air.
• Testimonies:
• Witnesses such as Ildefonso Magnawa and Elmer Remo testified on the process of shipment clearance and the timing of custody transfer.
• Their testimonies underscored that 2100 CBI did not have actual control over the cargo until after the BOC released it, thereby limiting its opportunity to implement extra handling precautions.

Issue:

Determination of the Nature of 2100 CBI’s Business

• Is 2100 Customs Brokers, Inc. considered a common carrier engaged in the transportation of goods despite its primary function as a customs broker?

Validity and Scope of the Marine Cargo Certificate

• Does the Marine Cargo Certificate extend coverage to goods transported by air, despite the implication of "marine" in its title?

The Requirement of the Presentation of the Insurance Policy

• Must the original insurance policy be presented to establish the extent of the insurer’s liability and the coverage applicable to the damaged goods?

Assessment of Negligence in the Handling of the Shipment

• Was 2100 CBI negligent in handling the shipment of TSPIC, thereby rendering it liable for the damage to the cargo?

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)