G.R. No. L-43748. February 28, 1979
HARTFORD FIRE INSURANCE CO., PLAINTIFF-APPELLEE, VS. E. RAZON, INC., DEFENDANT-APPELLANT.
MELENCIO-HERRERA, J.:
This case was decided both by the City Court of Manila, and, on
appeal, by the Court of First Instance of Manila on the basis of stipulations
of fact and memoranda submitted by the parties with no oral evidence
presented. On appeal to the Court of
Appeals, that Court resolved to certify the case to us on the ground that where
an action is submitted upon agreed stipulations of fact and the issue is the
correctness of the conclusion drawn therefrom, the question is one of law,
upon the authority of Cunanan vs. Lazatin (74 Phil. 719), and Ng Young vs.
Villa, et als. (93 Phil. 21).
The following facts were stipulated upon by the parties: On January 11, 1968, Union Carbide
Corporation shipped from New York, U.S.A., fifty (50) drums of “brake
fluid” on board the vessel SS “Johannes Maersk” consigned to
Union Carbide Phil., Inc. The shipment
was insured for P19,283.00 against all risks under plaintiff’s Open Policy No.
OC-H-126. The shipment arrived in
Manila on February 19, 1968 and, on the same date, was discharged from the
vessel unto the control, custody and safekeeping of defendant, complete and in
good order. On February 28, 1968, the
shipment was released from the custody of defendant and transferred to the
Luzon Brokerage Corporation for delivery to the consignee. Out of the fifty (50) drums comprising the
shipment, three (3) drums were released from defendant’s custody in the
condition described in defendant’s “Request for Bad Order Survey” No.
B-1881, that is, “in apparent good order, contents complete except each
dented at rims”.[1]
Upon inspection at the consignee’s warehouse, the Mariner’s Adjustment
Corporation reported that “the dents on the top lids and topmost portion
of the body stock created cracks and from their appearance it was evident that
the contents had leaked as shown by stain marks on various parts of the containers,
and that, in their opinion, “loss was due to rough handling presumably
during transit while goods were in the custody of the Arrastre Contractor (E.
Razon, Inc.)”.[2]
Contending that the “brake fluid” was “no longer salable in the
local market at its normal price”, the consignee filed a claim against
defendant for the recovery of P909.15 as its damage but the latter refused to
pay. Plaintiff insurance company paid
the consignee the sum of P1,145.40 and thereafter instituted this action as
subrogee of the consignee.
Originally filed before the City Court of Manila, plaintiff seeks
the recovery of the sum of P1,145.40 representing the value of the damaged
three drums. In its Answer, defendant
maintains that the “drums in question were delivered in good order to the
consignee, hence, any damage on the cargo after leaving the pier premises, is
no longer the responsibility of defendant” and that “in filing this
complaint the plaintiff did not comply with the pertinent provisions of the Revised
Management Contract”.[3]
On January 6, 1969, the parties submitted their “Stipulations
of Fact”, and on dates subsequent thereto, their “Formal Offer of
Exhibits”.
On July 12, 1969, the City Court of Manila, relying on
documentary evidence and memoranda and as agreed upon by the parties, dismissed
the case stating, in part:
“After a careful deliberation on the evidence adduced aria
after a perusal of the parties’ respective memoranda, this Court finds that the
defendant is not liable for the dents sustained by the three (3) drums of
“brake fluid” under the Revised Management Contract inasmuch as
Exhibit “1” (Exh. “G” for the plaintiff), the Request for
Bad Order Survey No. 1881, indicates that said three drums were “in
apparent good order, contents complete except each dented at rim”. So, actually the consignee did not suffer
any damage from the loss of the contents in the drums due to leakage or
spillage. It is to be presumed therefore,
in the absence of proof to the contrary, that the spillage or leakage occurred
after the shipment in question left the custody of the defendant.
“WHEREFORE, in view of the foregoing findings, this case is
hereby ordered dismissed. Without
pronouncement as to costs.
“SO ORDERED.”[4]
On February 18, 1970, the Court of First Instance of Manila, on
appeal, and relying on the same documentary evidence and memoranda presented
before the City Court, reversed the latter’s Decision after finding that:
“There is, therefore, sufficient evidence that the three (3)
drums of brake fluid subject of plaintiff’s claim was damaged while in the
possession of the defendant and, therefore, it is liable to the plaintiff
for such damage the same having been caused by the negligence of defendant’s employees.”
The dispositive portion of the judgment of the Court of First
Instance reads:
“WHEREFORE, the Court renders judgment ordering the defendant
to pay to plaintiff the amount of P1,145.40 and the cost in both
instances. The defendant is entitled to
get from the consignee the three (3) damaged drums of brake fluid and whatever
remains of its contents.”
On appeal to the Court of Appeals, defendant-appellant had
assigned the following errors:
“I
THE HONORABLE COURT OF FIRST INSTANCE OF MANILA ERRED IN HOLDING
THAT THE DEFENDANT-APPELLANT WAS BOUND BY THE SURVEY REPORT OF THE MARINER’S
ADJUSTMENT CORPORATION DATED APRIL 15, 1968 (EXH. H) IN THE EXECUTION OF WHICH
IT WAS NOT A PARTY THERETO.
“II
THE HONORABLE COURT OF FIRST INSTANCE OF MANILA ERRED IN NOT GIVING
CREDENCE AND PROBATIVE VALUE TO THE REQUEST FOR BAD ORDER SURVEY NO. 1881
(EXHS. “G” AND “I” RESPECTIVELY) EXECUTED BY THE
DEFENDANT-APPELLANT ON FEBRUARY 28, 1968 WHEREIN THE CONSIGNEE OR ITS REPRESENTATIVE
WAS A SIGNATORY.
“III
THE HONORABLE COURT OF FIRST INSTANCE OF MANILA ERRED IN RENDERING JUDGMENT
AGAINST THE DEFENDANT-APPELLANT.”[5]
And as heretofore stated, that appellate
Tribunal certified the case to us on the ground that the question involved is
purely legal.
Upon the Stipulations of Fact and the documentary evidence
submitted by the parties, we find that the conclusion drawn therefrom in the
appealed judgment calls for reversal. The real issue to resolve is, did the loss of the contents of the three
drums of brake fluid occur while the drums were in the custody of defendant
arrastre operator?
Of crucial significance is the condition of the cargo as
described in defendant’s Request for Bad Order Survey[6]
prepared before the release of the goods to the consignee’s broker as follows:
“3 drums brake fluid, in apparent good
order contents complete except each dented at rims.”
(Underscoring supplied).
The said Certificate was signed not only
by defendant’s inspector but also by the consignee’s representative. It shows that while the rims of the drums
were dented the contents thereof were complete. If, as the marine survey showed, “it was evident that the
contents had leaked as shown by stain marks on various parts of the
containers”, then, those stain marks should have been evident as well when
defendant’s Bad Order Certificate was prepared. The consignee’s representative would surely have noticed it and
would have caused a notation to that effect to have been made in the Bad Order
Certificate. The fact that the
Certificate was silent on that point but that instead it specifically indicated
that the contents were complete cannot but lead to the conclusion that the
leakage of the contents, as detected upon survey at the consignee’s warehouse,
must have occurred after the cargo had left defendant’s custody. The burden was upon plaintiff to prove that
the cracks on the three drums and the consequent leakage of their contents
could be traced to the dents on the rims of the drums, a question of fact which
was not conclusively answered in the stipulations agreed upon by the parties. It follows that defendant cannot be held
liable for the value of the damage sought to be recovered by plaintiff.
WHEREFORE, the judgment appealed from is reversed, and the
Decision of the City Court dismissing the complaint hereby affirmed.
No costs.
SO ORDERED.
Teehankee, (Chairman), Makasiar, Fernandez, Guerrero, and De Castro, JJ., concur.
[1]
Exhibits “G” and “I”.
[2]
Exhibit “H”.
[3]
Exhibits “6”, “6-A”, and “6-B”.
[4]
pp. 20-21, Record on Appeal.
[5]
p. 12, Appellant’s Brief.
[6]
Exhibits “G” and “I”.