G.R. No. 171194 - Asian Terminals, Inc. vs. Daehan Fire and Marine Insurance Co., Ltd.

Doosan Corporation shipped twenty-six (26) boxes of printed aluminum sheets on board the vessel Heung-A Dragon, owned by Dongnama Shipping Co., Ltd.
The shipment was covered by Bill of Lading No. DNALHMBUMN010010 and consigned to Access International, located at No. 9 Parada St., San Juan, Metro Manila.
Doosan insured the shipment with respondent Daehan Fire and Marine Insurance Co., Ltd. under an “all-risk” marine cargo insurance policy, with payment made to its settling agent, Smith Bell & Co., Inc.

On July 12, 2000, the vessel arrived in Manila where the containerized van was discharged and unloaded in apparent good condition as indicated by the Equipment Interchange Receipt (EIR) issued by petitioner.
The container van was stored in the Container Yard at the port, placing the goods under the temporary custody of petitioner.

On July 18, 2000, Access International, together with licensed Customs Broker Victoria Reyes Lazo, requested a joint survey of the shipment while it was still in the Container Yard.
No survey was conducted at that time due to the withdrawal of V. Reyes Lazo from the inspection, and petitioner subsequently released the shipment on July 19, 2000, delivering it to Access International’s warehouse in Binondo, Manila.
An inspection conducted at the consignee’s warehouse, by Access International’s surveyor from Lloyd’s Agency, revealed that only twelve (12) boxes were accounted for, indicating that fourteen (14) boxes were missing.

Access International filed a claim against petitioner and V. Reyes Lazo for the missing shipment amounting to $34,993.28.
Following the failure to collect its claim from petitioner, Access International sought indemnification from respondent, which paid an amount of $45,742.81 on November 8, 2000. A Subrogation Receipt was then executed in favor of respondent.
On July 10, 2001, respondent (through its representative, Smith Bell) instituted a case before the Regional Trial Court (RTC) against Dongnama, Uni-ship, Inc., petitioner, and V. Reyes Lazo, alleging that the losses were due to joint negligence and fault of the involved parties.
Dongnama and Uni-ship attempted to dismiss the complaint on the grounds of lack of legal capacity and absence of a viable cause of action but were only partially successful as the case continued against petitioner and V. Reyes Lazo.
The RTC, on August 4, 2004, dismissed the complaint for insufficiency of evidence, finding the submission fatally flawed (including issues with the authority of the person signing the complaint) and determining that the loss occurred after the shipment was already in Access International’s possession.

The Court of Appeals (CA) reversed the RTC decision via its September 14, 2005 Decision and confirmed by a December 20, 2005 Resolution, thereby reinstating respondent’s claim.
The CA held that petitioner, as the arrastre operator, assumed responsibility for the shipment while it was in its custody for seven (7) days at the Container Yard.
The CA applied the principle of substantial compliance by accepting the late submission of a board resolution evidencing the signatory’s authority.
It was determined that petitioner could not rely on the customary limitation of P5,000.00 per package, as provided in its Management Contract with the Philippine Ports Authority (PPA), due to its prior knowledge of the cargo’s actual value and the failure to conduct the requested joint survey.
Both petitioner and V. Reyes Lazo were held jointly and severally liable for the pilferage of the fourteen (14) missing boxes.

Whether petitioner (Asian Terminals, Inc.) is liable for the loss of the subject shipment despite the consignee’s representative’s acknowledgment of receipt in good order on the Equipment Interchange Receipt (EIR).

If petitioner is liable, what is the proper extent of its liability, especially in light of its contention that liability should be limited to P5,000.00 per package as stipulated in its Management Contract with the PPA.

Whether the failure to conduct a joint survey at the time the shipment was still under petitioner’s custody constitutes negligence that would render petitioner responsible for the missing cargo.
To what extent the relationship between the consignee, the arrastre operator, and the customs broker affects the allocation of liability, particularly given that the insurer was subrogated to the rights of the consignee.