METRO PORT SERVICE, INC., (FORMERLY E. RAZON, INC.), PETITIONER-APPELLANT, VS. COURT OF APPEALS AND CHARTER INSURANCE CO., INC., RESPONDENTS-APPELLEES.

Metro Port Service versus Court of Appeals

The Case

This is a petition for review on certiorari brought by Metro Port Service, Incorporated, formerly E. Razon, Incorporated, against the Court of Appeals and Charter Insurance Company, Incorporated. The action below was one for damages arising from cargo loss, commenced by the insurer as subrogee of the consignee against two parties: the carrier, Universal Shipping Lines, Incorporated, and the arrastre operator, E. Razon, Incorporated. The case matters because it is a working illustration of two enduring rules: the limited scope of a petition for review on certiorari, which ordinarily admits only questions of law, and the exception that permits the Supreme Court to review findings of fact when the appellate court's findings contradict those of the trial court and the evidence on record. It also fixes where liability falls as between a carrier and an arrastre operator when cargo is discharged in bad order and further damaged thereafter.

Procedural History

The insurer sued for damages before the then Court of First Instance of Manila against the carrier and the arrastre operator. Both defendants disclaimed liability, each attributing the loss to the other. The trial court rendered judgment allocating liability between them, ordering the carrier to pay a portion of the claim and the arrastre operator to pay another portion, both with interest, with costs and attorney's fees against both.

On appeal by the carrier and the arrastre operator, the Court of Appeals modified the judgment. It absolved the carrier of all liability and held the arrastre operator solely liable for the entire amount of the claim, with interest and costs. The arrastre operator's motion for reconsideration was denied. The arrastre operator then came to the Supreme Court by petition for review on certiorari, assigning as errors the appellate court's refusal to give credence to its bad order certificates and its holding that the arrastre operator was liable.

Facts

In April 1973, Union Sales Marketing Corporation ordered from Union Carbide of Antwerp, Belgium, 99,540 kilograms of low density polyethylene, valued at 245 United States dollars per kilogram, for a total purchase price of 24,417.30 United States dollars. The shipment was packed in 4,000 bags of 25 net kilograms each, more or less, and was loaded at Antwerp in good order condition on board the vessel Dingalan Bay, owned and operated by Universal Shipping Lines, Incorporated, and consigned to Union in Manila. The shipment was covered by a marine risk note issued by Charter Insurance Company for 212,738 pesos and 17 centavos against all risks.

The carrier arrived in Manila on June 22, 1973, and arrastre services were handled by E. Razon, Incorporated, now Metro Port Service, Incorporated. Of the 4,000 bags, 1,050 bags were received by the consignee in bad order condition. As a consequence of the damage and loss, the insurer paid the consignee 35,709 pesos and 11 centavos in full settlement of the claim, and the insurer became the subrogee of all of the consignee's rights to recover from the parties concerned.

The evidence showed that 619 bags were discharged by the carrier to the arrastre operator in bad order condition, as reflected in cargo receipts issued by the carrier to the arrastre operator and signed by their respective representatives, and in a survey of bad order cargoes signed by both. The condition of those 619 bags before turnover was loss or spoilage of up to 50 percent. The trial court accordingly held the carrier liable only for the value of 443 bags, computed at 16.8209 kilograms per bag, less than the actual net weight of 25 kilograms per bag because of some recovery of spillage, for a total of 12,285 pesos and 94 centavos. Since 619 bags were already in bad order when discharged from the carrier, the remaining 431 bags were damaged while in the arrastre operator's custody.

Issues

• Whether or not the Supreme Court may review the findings of fact of the Court of Appeals in a petition for review on certiorari.
• Whether or not the Court of Appeals erred in disregarding the arrastre operator's bad order certificates and in holding the arrastre operator solely liable for the entire claim.
• Whether or not the insurer may obtain a modification of the trial court's award in its favor in the absence of its own appeal.

Applicable Provisions

Section 2 of Rule 45 of the Rules of Court provides:

Section 2. Contents of petition. The petition shall contain a concise statement of the facts and the law relied upon, and shall state the errors of law committed by the court appealed from.

This provision frames the ordinary limitation that only questions of law may be raised in a petition for review on certiorari, which the Court applies before reaching the merits.

Ruling

On the first issue, the Court acknowledged the general rule that findings of fact of the Court of Appeals are conclusive on the Supreme Court when supported by the evidence on record. The rule is not absolute, however, and admits of exceptions. The Court found the exception present because the appellate court's findings of fact were contrary to those of the trial court and were contradicted by the evidence on record. Review of the facts was therefore proper.

On the second issue, the Court held that the Court of Appeals completely disregarded the evidence of both the carrier and the arrastre operator that 619 bags were discharged by the carrier to the arrastre operator in bad order condition, as shown by the cargo receipts and the survey of bad order cargoes signed by their representatives. Since 619 bags were already in bad order when discharged from the carrier, it followed that the remaining 431 bags were damaged while in the arrastre operator's custody, for which the arrastre operator should be held liable. The Court thus restored the trial court's allocation of liability.

On the third issue, the Court noted that the trial court computed the arrastre operator's liability at 351 bags, notwithstanding the arrastre operator's admission that 80 bags were not included in the bad order cargo certificate. Because the insurer did not appeal the trial court's award, in its desire to have the case terminated soonest, the insurer could not in this appeal have the judgment modified. The liability of the arrastre operator for 9,763 pesos and 94 centavos, as fixed by the trial court, was therefore in order.

Doctrine

First, in a petition for review on certiorari, ordinarily only questions of law may be raised, and findings of fact of the Court of Appeals are generally conclusive on the Supreme Court when supported by the evidence on record. Second, that rule is not absolute: the Supreme Court may review the facts when the appellate court's findings are contrary to those of the trial court and are contradicted by the evidence on record. Third, an appellee who did not himself appeal may not obtain a modification of the judgment in his favor; he cannot secure in the appeal of another a relief he did not himself seek. Fourth, as between carrier and arrastre operator, liability is apportioned according to the condition of the cargo at each turnover, established by cargo receipts and surveys of bad order cargoes signed by their representatives.

Disposition

The Court reversed and set aside the judgment of the Court of Appeals and reinstated that of the Court of First Instance of Manila, with no costs; the arrastre operator, Metro Port Service, Incorporated, therefore lost its petition, and the carrier was again held liable for its allocated share.

Remember This

Memorize the exception: findings of fact of the Court of Appeals are conclusive, unless they contradict the trial court's findings and the evidence on record. Examiners use this case to test the scope of Rule 45 and the rule that an appellee who did not appeal cannot obtain affirmative relief.