Facts:

This case involves a legal dispute between Asian Terminals, Inc. (Petitioner) and Malayan Insurance Co., Inc. (Respondent) concerning damage to a shipment of soda ash cargo. The factual background dates back to November 14, 1995, when 60,000 bags of soda ash were shipped from China aboard the vessel MV "Jinlian I". The cargo, valued at approximately US$456,000, was insured by Malayan Insurance under Marine Risk Note No. RN-0001-21430, with a Bill of Lading issued identifying the consignee as Philippine Banking Corporation. Upon the vessel's arrival at Pier 9, South Harbor, Manila, on November 21, 1995, the stevedores from Asian Terminals, Inc. unloaded the cargo for temporary storage pending customs clearance. By November 28, 1995, a significant number of the bags—2,702—were found to be in bad order due to improper handling. After the delivery to the consignee on December 28, 1995, this total rose to 2,881 damaged bags. Respondent Malayan Insurance paid the consign

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Facts:

Factual Antecedents

• On November 14, 1995, Shandong Weifang Soda Ash Plant in China shipped 60,000 plastic bags of soda ash dense (50 kg per bag) aboard the MV "Jinlian I" destined for Manila.
• The shipment had an invoice value of US$456,000.00 and was insured by Malayan Insurance Co., Inc. under Marine Risk Note No. RN-0001-21430.
• The Bill of Lading was issued by Tianjin Navigation Company, with Philippine Banking Corporation as the consignee and Chemphil Albright and Wilson Corporation as the notify party.
• Upon arrival at Pier 9, South Harbor, Manila on November 21, 1995, petitioner’s (Asian Terminals, Inc.) stevedores unloaded the shipment and temporarily stored it pending clearance by the Bureau of Customs.
• During unloading, initially on November 28, 1995, 2,702 bags were noted to be in bad order condition.
• Subsequent transport on November 29, 1995 led to further handling, and by December 28, 1995, upon delivery to the consignee’s warehouse, a total of 2,881 bags were determined to be damaged due to spillage, caking, and hardening of contents.
• On April 19, 1996, respondent (the insurer) paid the insured amount of P643,600.25 to the consignee.

Proceedings in Lower Courts

• Regional Trial Court (RTC)
• On November 20, 1996, respondent, acting as subrogee of the consignee, filed a Complaint for damages against petitioner, the shipper, and a cargo broker.
• The RTC Trial, completed on June 26, 1998, found petitioner liable for the damage/loss, attributing the proximate cause to the negligence of its stevedores.
• Evidence showed that, despite warnings from Marine Cargo Surveyors (Edgar Liceralde and Redentor Antonio) against using steel hooks for handling, petitioner’s stevedores continued the practice, which led to the piercing of the bags and subsequent spillage.
• The RTC held petitioner liable under Articles 2176 and 2180 of the Civil Code and ordered payment of P643,600.25 plus interest.
• Court of Appeals (CA)
• Petitioner appealed the RTC’s decision, asserting that the shipment was received in bad order and that documentary evidence (TOSBOC, RESBOC, and the Report of Survey) exonerated it from additional damage.
• The CA, in its July 14, 2005 Decision, affirmed the RTC’s ruling, stressing that the actual counting of damaged bags occurred only after all bags had been unloaded and that the negligence of petitioner’s stevedores was the proximate cause of the additional damage.
• Petitioner’s subsequent motion for reconsideration was denied on February 14, 2006 for lack of merit.
• Documented Evidence and Testimonies
• Testimonies from marine cargo surveyors and petitioner’s own claim officer corroborated that the counting of bad order bags occurred only after the complete unloading of the cargo.
• The documentary evidence, including the Turn Over Survey of Bad Order Cargoes (TOSBOC) and the final Report of Survey, supported the findings that the damage was incurred due to improper handling by the stevedores.

Issue:

Whether the non-presentation of the insurance contract or policy is fatal to the respondent’s subrogation claim.

• Petitioner contends that without introducing the said document, the insurer (respondent) cannot validly establish its cause of action.
• Respondent argues that the subrogation receipt, and not the policy itself, is sufficient to prove the insured relationship and its right of subrogation.

Whether the proximate cause of the damage or loss sustained by the shipment was due to the negligence of petitioner’s stevedores.

• Petitioner maintains that the documentary evidence (TOSBOC, RESBOC, and the Report of Survey) shows the shipment was received in bad order, implying that no additional damage occurred under its custody.
• Respondent and the lower courts assert that the negligent handling, particularly the use of steel hooks and improper stacking/storage, directly caused further damage.

Whether the court can take judicial notice of the Management Contract between petitioner and the Philippine Ports Authority (PPA) which limits petitioner’s liability.

• Petitioner seeks judicial notice to invoke the stipulated package limitation of P5,000.00 per package.
• Respondent argues that the contract is a commercial document and is subject to strict evidentiary requirements, making judicial notice inapplicable.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)