Case Summary (G.R. No. 200289)
RTC Dismissal Based on Prescription and Nonliability
The Regional Trial Court dismissed UCPB’s complaint and the respondents’ counterclaims. It ruled the claim against ATI prescribed under the Cargo Gate Pass stipulations and International Container Terminal Services doctrine requiring a 15-day claim. It also held Westwind not liable under COGSA Section 3(6) since unloading was performed by ATI, and OFII not liable as it merely facilitated delivery as customs broker.
CA’s Reversal and Apportionment of Liability
The Court of Appeals granted UCPB’s appeal. It affirmed prescription as to ATI but held Westwind liable for the six originally damaged containers and OFII liable for the nine subsequently damaged. Relying on Philippines First Insurance v. Wallem, the CA treated unloading as still under the carrier’s custody. It found OFII a common carrier under NCC Article 1732, subject to extraordinary diligence and presumed negligent for the additional damage.
Carrier’s Nondelegable Duty During Unloading
Under COGSA Section 3(2), NCC Articles 1733–1736, and Commerce Code Article 619, a carrier’s duty of extraordinary diligence extends until cargo is actually or constructively delivered to the consignee. Jurisprudence confirms that unloading remains within the carrier’s custody and cannot be delegated to relieve liability for damage during discharge.
Supreme Court’s Affirmation of Westwind’s Liability
The Supreme Court held that discharge of the containers under a single bill of lading was incomplete when the damage occurred; no constructive delivery to ATI had taken place. Citing Nichimen v. M/V Farland and regional cases, it reaffirmed the carrier’s nondelegable obligation for safe unloading and rejected Westwind’s argument that ATI’s independent control absolved it of responsibility.
Supreme Court’s Affirmation of OFII’s Status and Liability
The Court deemed OFII a common
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Procedural History
- Two petitions for certiorari under Rule 45 filed by Westwind Shipping Corporation (G.R. No. 200289) and Orient Freight International, Inc. (G.R. No. 200314) to challenge:
- The Court of Appeals’ September 13, 2011 Decision reversing the January 27, 2006 RTC Decision.
- The CA’s January 19, 2012 Resolution denying reconsideration.
- RTC Branch 30, Manila City dismissed UCPB’s complaint and counterclaims of petitioners.
- CA reversed the RTC, holding Westwind and OFII liable and sustaining only the RTC’s prescription ruling as to Asian Terminals, Inc.
Facts of the Case
- August 23, 1993: Kinsho-Mataichi Corp. shipped 197 metal containers of tin-free steel from Kobe, Japan to San Miguel Corp. (SMC), covered by Bill of Lading No. KBMA-1074, on board M/V Golden Harvest (owned/operated by Westwind).
- SMC insured cargo with UCPB for US$184,798.97 (≈ P6,209,245.28).
- August 31, 1993: Shipment discharged in Manila under custody of arrastre operator Asian Terminals, Inc. (ATI).
- September 1, 1993: Baliwag Shipping Agency, agent of vessel, issued two Bad Order Cargo Receipts for six containers damaged by OTSI stevedore’s forklift at ATI.
- September 7, 1993: OFII, as SMC’s customs broker, withdrew all 197 containers from ATI and delivered via JBL to SMC warehouse; nine more containers were found damaged upon delivery (total 15 bad-order containers).
- August 15, 1994: SMC claimed from UCPB for P292,732.80; UCPB paid, obtained subrogation receipt.
- August 30, 1994: UCPB filed complaint against Westwind, ATI, and OFII for damages corresponding to 15 containers.
Trial Court Decision
- RTC dismissed UCPB’s complaint:
- Action against ATI held barred by prescription under 15-day stipulation and International Container Terminal Services doctrine.
- Westwind found not liable under Section 3(6) COGSA and precedents (E.E. Elser; Belgian Overseas) since stevedoring was by ATI personnel.
- OFII absolved: acted only as customs b