Summa Insurance v. CA (G.R. No. 84680, February 5, 1996)



ISSUE: Is an arrastre operator legally liable for the loss of a shipment in its custody? If so, what is the extent of its liability? The issues brought by the parties could be stated as follows: (1) Is the private respondent legally liable for the loss of the shipment in question? (2) If so, what is the extent of its liability?

(Please help us make a case digest for this piece of jurisprudence. You may leave your contribution in the comment section below or email us at Please include your name so we can properly give credit to you for your work.)1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; ARRASTRE SERVICE; ARRASTRE OPERATOR IS LIABLE FOR THE LOSS OF THE SHIPMENT SINCE IT HAS BEEN ESTABLISHED THAT THE SHIPMENT WAS LOST WHILE IN ITS CUSTODY. - Petitioner was subrogated to the rights of the consignee. The relationship therefore between the consignee and the arrastre operator must be examined. This relationship is much akin to that existing between the consignee or owner of shipped goods and the common carrier, or that between a depositor and a warehouseman. In the performance of its obligations, an arrastre operator should observe the same degree of diligence as that required of a common carrier and a warehouseman as enunciated under Article 1733 of the Civil Code and Section 3(b) of the Warehouse Receipts Law, respectively. Being the custodian of the goods discharged from a vessel, an arrastre operators duty is to take good care of the goods and to turn them over to the party entitled to their possession. In this case, it has been established that the shipment was lost while in the custody of private respondent. We find private respondent liable for the loss. This is an issue of fact determined by the trial court and respondent Court, which is not reviewable in a petition under Rule 45 of the Rules of Court.

2. ID.; EXTENT OF LIABILITY OF ARRASTRE OPERATOR; MANAGEMENT CONTRACT; SINCE PETITIONER FAILED TO CONVINCE THE COURT THAT THE REQUIREMENT OF THE MANAGEMENT CONTRACT HAS BEEN COMPLIED WITH, THE ARRASTRE OPERATOR WAS NOT LIABLE FOR THE ACTUAL INVOICE VALUE OF THE LOST SHIPMENT. - In the performance of its job, an arrastre operator is bound by the management contract it had executed with the Bureau of Customs. However, a management contract, which is a sort of a stipulation pour autrui within the meaning of Article 1311 of the Civil Code, is also binding on a consignee because it is incorporated in the gate pass and delivery receipt which must be presented by the consignee before delivery can be effected to it. The insurer, as successor-in-interest of the consignee, is likewise bound by the management contract. Indeed, upon taking delivery of the cargo, a consignee (and necessarily its successor-in-interest) tacitly accepts the provisions of the management contract, including those which are intended to limit the liability of one of the contracting parties, the arrastre operator. Section 1, Article VI of the Management Contract between private respondent and the Bureau of Customs provides: 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 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. All told, petitioner failed to convince the Court that the requirement of the management contract had been complied with to entitle it to recover the actual invoice value of the lost shipment.
3. REMEDIAL LAW; CIVIL PROCEDURE; EVIDENCE; BURDEN OF PROOF; IN CIVIL CASES, THE BURDEN OF PROOF IS ON THE PARTY WHO WOULD BE DEFEATED IF NO EVIDENCE IS GIVEN ON EITHER SIDE. In civil cases, the burden of proof is on the party who would be defeated if no evidence is given on either side. Said party must establish his case by a preponderance of evidence, which means that the evidence as a whole adduced by one side is superior to that of the other. Petitioner having asserted the affirmative of the issue in this case, it should have presented evidence required to obtain a favorable judgment.

4. LEGAL ETHICS; ATTORNEYS FEES; AWARD OF ATTORNEYS FEES IN THIS CASE IS PROPER, AND THERE IS NO REASON TO RE-EXAMINE THE APPELLATE COURTS DETERMINATION OF THE AMOUNT OF THE AWARD IN VIEW OF THE AMOUNT OF THE PRINCIPAL OBLIGATION. - Anent the attorneys fees, we find the award to be proper considering that the acts and omissions of private respondent have compelled petitioner to litigate or incur expenses to protect its rights. However, as to the amount of the award, we find no reason to re-examine the appellate courts determination thereon in view of the amount of the principal obligation. Otherwise, we would be disregarding the doctrine that discretion, when well exercised, should not be disturbed.