G.R. No. 108397 - Food Terminal Inc. vs. Court of Appeals

Petitioner: Food Terminal Incorporated (FTI), a company engaged in the business of storage of goods or merchandise for compensation at its refrigerated warehouse in Taguig, Metro Manila.
Respondent: Basic Foods Corporation, a company engaged in the manufacturing business of food and allied products which required refrigerated storage for its Red Star compressed yeast.

Under a cold storage contract, Basic Foods deposited goods with FTI for cold storage.
It was alleged by the complaint that Basic Foods deposited a total of 1,770 cartons of Red Star compressed yeast during the period from June 10, 1987, up to June 23, 1987.
The refrigerated warehouse, specifically Zone 4, was pre-cooled as FTI had switched on the cooling and refrigeration system before the loading of the goods.
The arrangement allowed Basic Foods the discretion in loading its stocks on the pallet towers according to its own requirements and satisfaction.

Basic Foods claimed that FTI was negligent in its duties as a warehouseman, particularly in failing to adequately control the temperature in its refrigerated warehouse.
Due to such alleged negligence, a total of 383.6 cartons of Red Star compressed yeast were spoiled, amounting to a value of no less than P161,112.00.
Following the damage, Basic Foods demanded FTI to pay for the loss; when the demand proved futile, the action was instituted.

FTI denied the deposition of 1,770 cartons, alleging that only 750 cartons were deposited and stored in its warehouse.
The defendant asserted that it exercised utmost diligence in the care and custody of the goods and maintained that any deterioration might have been due to:

Basic Foods’ own negligence in arranging the stocks, taking into account the inherent nature and characteristics of the compressed yeast.
Circumstances beyond the reasonable control of the defendant.

Additionally, FTI invoked a clause in the storage contract that exempted them from liability for any direct or indirect loss or damage to the goods from various causes – including variations in temperature, humidity, shrinkage, fermentation, or inherent defects.
FTI also argued that Basic Foods was estopped from the suit, having acknowledged receipt of the goods in good order as evidenced by the Bonded Warehouse Issues.

Trial Court: Rendered a judgment dismissing Basic Foods’ action against FTI.
Court of Appeals: Reversed the trial court decision on December 17, 1992, ruling in favor of Basic Foods and holding FTI liable to pay for the damaged goods with interest and costs.
Petition for Review: FTI elevated the case to the Supreme Court via a petition for review on certiorari, challenging the Court of Appeals’ decision.

Whether or not FTI was negligent in the care and custody of Basic Foods’ goods during storage.
Whether the failure to maintain the agreed temperature in the cold storage area directly resulted in the deterioration of the compressed yeast.

Whether the factual conclusions reached by the Court of Appeals, particularly regarding negligence, should be subject to review on appeal via certiorari.

Whether FTI’s invocation of the contractual limitations of liability and estoppel on the part of Basic Foods effectively barred recovery for the alleged damages.