Case Digest (G.R. No. 165647)
Facts:
On October 2, 1995, Anhui Chemicals Import & Export Corporation loaded 10,000 bags of sodium sulphate anhydrous on board the M/S Offshore Master at Shanghai for carriage to the Port of Manila under a Clean Bill of Lading reflecting a gross weight of 500,200 kilograms. The vessel’s owner and charterer were unknown foreign firms, with Wallem Phils. Shipping, Inc. acting as local agent. Upon arrival on October 16, 1995, the arrastre operator’s Turn Over Survey and Bad Order Survey disclosed that 2,426 poly bags were in bad order, with 63,065 kg of unrecovered spillages and 58,235 kg exposed and contaminated. The consignee, L.G. Atkimson Import-Export, Inc., lodged claims first with Wallem and then with its insurer, Philippines First Insurance Co., Inc., which paid ₱397,879.69 and obtained a subrogation receipt. After Wallem failed to respond to a demand letter, the insurer sued Wallem and the unknown vessel interests in the Regional Trial Court (Manila, Branch 55) on October 7, 199Case Digest (G.R. No. 165647)
Facts:
- Charter and Shipment
- On 2 October 1995, Anhui Chemicals Import & Export Corp. loaded 10,000 bags of sodium sulphate anhydrous (gross weight 500,200 kg) on M/S Offshore Master for carriage to Manila under a clean bill of lading, consignee L.G. Atkimson Import-Export, Inc.
- The vessel’s owner/charterer and the shipper (Shanghai Fareast Ship Business Co.) were foreign entities represented by local agent Wallem Philippines Shipping, Inc.
- Arrival and Damage
- On 16 October 1995, upon discharge at Manila, 2,426 bags were found in bad order with spillages, per the Turn-Over Survey by Asian Terminals, Inc.
- Joint final inspection revealed 63,065 kg unrecovered spillages and 58,235 kg exposed or contaminated, causing depreciation and downgrading.
- Insurance and Claim
- Consignee’s April 1996 claim against Wallem failed. The cargo was insured for ₱2,470,213.50 with Philippines First Insurance Co., Inc., which, after documents review, paid ₱397,879.69 and took subrogation.
- Wallem did not respond to the insurer’s demand for recovery.
- Litigation History
- Philippines First sued Wallem in RTC Manila for ₱397,879.69 plus 6% interest, 25% attorney’s fees and costs. RTC (Nov 1998) attributed damage to arrastre mishandling but held carrier solidarily liable and awarded damages.
- Court of Appeals (June 2004) reversed, finding sole liability of the arrastre operator under the exception to solidary liability.
Issues:
- Carrier Duty
- Does a common carrier’s duty extend to the safe discharge of cargo?
- Should the carrier be held liable for the cost of the damaged shipment?
- Admissions and Credibility
- Does Wallem’s failure to answer the insurer’s demand imply admission of liability?
- Did the courts err in crediting the testimony of surveyor Talens?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)