323 Phil. 214
PANGANIBAN, J.:
"PREMISES CONSIDERED, judgment is hereby rendered ordering defendant Metro Port Service, Inc. to pay plaintiff Summa Insurance Corporation the sum of P280,969.68 with legal interest from November 22, 1982, the date of the filing of the complaint, until full payment, and attorney’s fees in the sum of P20,000.00, with costs of suit.In resolving the issue as to who had custody of the shipment when it was lost, the trial court relied more on the good-order cargo receipts issued by NGSC than on the short-landed certificate issued by private respondent. The trial court held:
"The complaint as against defendant National Galleon Shipping Corporation and the counterclaim interposed by said defendant are hereby dismissed." (Rollo, p. 32).
"As between the aforementioned two documentary exhibits, the Court is more inclined to give credence to the cargo receipts. Said cargo receipts were signed by a checker of defendant NGSC and a representative of Metro Port. It is safe to presume that the cargo receipts accurately describe the quantity and condition of the shipment when it was discharged from the vessel. Metro Port’s representative would not have signed the cargo receipts if only four (4) packages were discharged from the vessel and given to the possession and custody of the arrastre operator. Having been signed by its representative, the Metro Port is bound by the contents of the cargo receipts.On appeal, the Court of Appeals modified the decision of the trial court and reduced private respondent’s liability to P3,500.00 as follows[3]:
"On the other hand, the Metro Port’s shortlanded certificate could not be given much weight considering that, as correctly argued by counsel for defendant NGSC, it was issued by Metro Port alone and was not countersigned by the representatives of the shipping company and the consignee. Besides, the certificate was prepared by Atty. Servillano V. Dolina, Second Deputy General Manager of Metro Port, and there is no proof on record that he was present at the time the subject shipment was unloaded from the vessel and received by the arrastre operator. Moreover, the shortlanded certificate bears the date of March 15, 1982, more than three months after the discharge of the cargo from the carrying vessel.
"Neither could the Court give probative value to the marine report (Exhibit "J", also Exhibit "1"-Razon). The attending surveyor who attended the unloading of the shipment did not take the witness stand to testify on said report. Although Transnational Adjustment Co.’s general manager, Mariano C. Remorin, was presented as a witness, his testimony is not competent because he was not present at the time of the discharge of the cargo.
"Under the foregoing considerations, the Court finds that the one (1) bundle of PC8U blade in question was not lost while the cargo was in the custody of the carrying vessel. Considering that the missing bundle was discharged from the vessel unto the custody of defendant arrastre operator and considering further that the consignee did not receive this cargo from the arrastre operator, it is safe to conclude from these facts that said missing cargo was lost while same was in the possession and control of defendant Metro Port. Defendant Metro Port has not introduced competent evidence to prove that the loss was not due to its fault or negligence. Consequently, only the Metro Port must answer for the value of the missing cargo. Defendant NGSC is absolved of any liability for such loss."
"WHEREFORE, the judgment appealed from is MODIFIED in that defendant Metro Port Service, Inc., is ordered to pay plaintiff Summa Insurance Corporation:Petitioner moved for reconsideration of the said decision but the Court of Appeals denied the same. Hence, the instant petition.
(1) the sum of P3,500.00, with legal interest from November 22, 1982, until fully paid; and
(2) the sum of P7,000.00, as and for attorney’s fees.
"Costs against defendant Metro Port Service, Inc."
1. Responsibility and Liability for Losses and Damages - The CONTRACTOR shall, at its own expense handle all merchandise in the piers and other designated places and at its own expense perform all work undertaken by it hereunder diligently and in a skillful workmanlike and efficient manner; that the CONTRACTOR shall be solely responsible as an independent CONTRACTOR, and hereby agrees to accept liability and to promptly pay to the steamship company, consignee, consignor or other interested party or parties for the loss, damage, or non-delivery of cargoes to the extent of the actual invoice value of each package which in no case shall be more than Three Thousand Five Hundred Pesos (P3,500.00) for each package unless the value of the importation is otherwise specified or manifested or communicated in writing together with the invoice value and supported by a certified packing list to the CONTRACTOR by the interested party or parties before the discharge of the goods, as well as all damage that may be suffered on account of loss, damage, or destruction of any merchandise while in custody or under the control of the CONTRACTOR in any pier, shed, warehouse, facility or other designated place under the supervision of the BUREAU, x x x (Italics supplied).Interpreting a similar provision in the management contract between private respondent’s predecessor, E. Razon, Inc. and the Bureau of Customs, the Court said in E. Razon Inc. vs. Court of Appeals:[10]
"Indeed, the provision in the management contract regarding the declaration of the actual invoice value ‘before the arrival of the goods’ must be understood to mean a declaration before the arrival of the goods in the custody of the arrastre operator, whether it be done long before the landing of the shipment at port, or immediately before turn-over thereof to the arrastre operator’s custody. What is essential is knowledge beforehand of the extent of the risk to be undertaken by the arrastre operator, as determined by the value of the property committed to its care that it may define its responsibility for loss or damage to such cargo and to ascertain compensation commensurate to such risk assumed x x x."In the same case, the Court added that the advance notice of the actual invoice of the goods entrusted to the arrastre operator is "for the purpose of determining its liability, that it may obtain compensation commensurable to the risk it assumes, (and) not for the purpose of determining the degree of care or diligence it must exercise as a depository or warehouseman"[11] since the arrastre operator should not discriminate between cargoes of substantial and small values, nor exercise care and caution only for the handling of goods announced to it beforehand to be of sizeable value, for that would be spurning the public service nature of its business.
"Appellant claims that the above quoted provision is null and void, as it limits the liability of appellee for the loss, destruction or damage of any merchandise, to P500.00 per package, contending that to sustain the validity of the limitation would be to encourage acts of conversion and unjust enrichment on the part of the arrastre operator. Appellant, however, overlooks the fact that the limitation of appellee’s liability under said provision, is not absolute or unqualified, for if the value of the merchandise is specified or manifested by the consignee, and the corresponding arrastre charges are paid on the basis of the declared value, the limitation does not apply. Consequently, the questioned provision is neither unfair nor abitrary, as contended, because the consignee has it in his hands to hold, if he so wishes, the arrastre operator responsible for the full value of his merchandise by merely specifying it in any of the various documents required of him, in clearing the merchandise from the customs. For then, the appellee arrastre operator, by reasons of the payment to it of a commensurate charge based on the higher declared value of the merchandise, could and should take extraordinary care of the special or valuable cargo. In this manner, there would be mutuality. What would, indeed, be unfair and arbitrary is to hold the arrastre operator liable for the full value of the merchandise after the consignee has paid the arrastre charges only (on) a basis much lower than the true value of the goods."In this case, no evidence was offered by petitioner proving the amount of arrastre fees paid to private respondent so as to put the latter on notice of the value of the cargo. While petitioner alleged that prior to the loss of the package, its value had been relayed to private respondent through the documents the latter had processed, petitioner does not categorically state that among the submitted documents were the pro forma invoice value and the certified packing list. Neither does petitioner pretend that these two documents were prerequisites to the issuance of a permit to deliver or were attachments thereto. Even the permit to deliver, upon which petitioner anchors its arguments, may not be considered by the Court because it was not identified and formally offered in evidence.[13]