2012BENJAMIN CUA (CUA UlAN TEK), Petitioner, vs. WALLEM PHILIPPINES SHIPPING, INC. and ADVANCE SHIPPING CORPORATION, Respondents.

G.R. No. 171337 July 11, 2012BENJAMIN CUA (CUA UlAN TEK), Petitioner, vs.
WALLEM
PHILIPPINES SHIPPING, INC. and ADVANCE SHIPPING CORPORATION, Respondents.
Facts:
October 1995, Anhui Chemicals Import and Export Corp. loaded on board M/S Offshore Master
a shipment consisting of sodium sulphate anhydrous, complete and in good order for
transportation to and delivery at the port of Manila for consignee, covered by a clean bill of
lading.
On October 16, 1995, the shipment arrived in port of manila and was discharged which caused
various degrees of spillage and losses as evidence by the turn over survey of the arrastre
operator. Asia Star Freight delivered the shipments from pier to the consignees in Quezon City,
during the unloading, it was found by the consignee that the shipment was damaged and in bad
condition.
April 29, 1996, the consignee filed a claim with Wallem for the value of the damaged shipment,
to no avail. Since the shipment was insured with Phil. First Insurance against all risks in the
amount of P2,470,213.50. The consignee filed a claim against the First Insurance. First insurance
after examining the turn-over survey, the bad order certificate and other documents paid the
consignee but later on sent a demand letter to Wallem for the recovery of the amount paid to the
consignee (in exercise of its right of subrogation). Wallem did not respond to the claim.
First Insurance then instituted an action before RTC for damages against Wallem. RTC held the
shipping company and the arrastre operator solidarily liable since both are charged with the
obligation to deliver the goods in good order condition.
The CA reversed and set aside the RTC's decision. CA says that there is no solidary liability
between the carrier and the arrastre because it was clearly established that the damage and losses
of the shipment were attributed to the mishandling by the arrastre operator in the discharge of the
shipment.
Issues:
1. Whether or not the Court of Appeals erred in not holding that as a common carrier, the carriers
duties extend to the obligation to safely discharge the cargo from the vessel;
2. Whether or not the carrier should be held liable for the cost of the damaged shipment;
3. Whether or not Wallems failure to answer the extra judicial demand by petitioner for the cost
of the lost/damaged shipment is an implied admission of the formers liability for said goods;
4. Whether or not the courts below erred in giving credence to the testimony of Mr. Talens.
Ruling:
(1) Yes, the vessel is a common carrier, and thus the determination of the existence or absence of
liability will be gauged on the degree of diligence required of a common carrier. (2) The first and
second issue will be resolved concurrently.
(3) The damage of the shipment was documented by the turn0over survey and request for bad
order survey, with these documents, petitioner insist that the shipment incurred damages while
still in the care and responsibility of Wallem before it was turned over to the arrastre operator.
However, RTC found the testimony of Mr. Talens (cargo surveyor) that the loss was caused by
the mishandling of the arrastre operator. This mishandling was affirmed by the CA which was
the basis for declaring the arrastre operator solely liable for the damage.
It is established that damage or losses were incurred by the shipment during the unloading. As
common carrier, they are bound to observe extraordinary diligence in the vigilance over the
goods transported by them. Subject to certain exceptions enumerated under Article 1734 of the
Civil Code, common carriers are responsible for the loss, destruction, or deterioration of the
goods. The extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until
the same are delivered, actually or constructively, by the carrier to the consignee, or to the person
who has a right to receive them.
For marine vessels, Article 619 of the Code of Commerce provides that the ship captain is liable
for the cargo from the time it is turned over to him at the dock or afloat alongside the vessel at
the port of loading, until he delivers it on the shore or on the discharging wharf at the port of
unloading, unless agreed otherwise.
COGSA provides that under every contract of carriage of goods by sea, the carrier in relation to
the loading, handling, stowage, carriage, custody, care, and discharge of such goods, shall be
subject to the responsibilities and liabilities and entitled to the rights and immunities set forth in
the Act. Section 3 (2) thereof then states that among the carriers responsibilities are to properly
and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried.
On the other hand, the functions of an arrastre operator involve the handling of cargo deposited
on the wharf or between the establishment of the consignee or shipper and the ship's tackle.
Being the custodian of the goods discharged from a vessel, an arrastre operator's duty is to take
good care of the goods and to turn them over to the party entitled to their possession.
Handling cargo is mainly the arrastre operator's principal work so its drivers/operators or
employees should observe the standards and measures necessary to prevent losses and damage to
shipments under its custody. Thus, in this case the appellate court is correct insofar as it ruled
that an arrastre operator and a carrier may not be held solidarily liable at all times. But the
precise question is which entity had custody of the shipment during its unloading from the
vessel?
The records are replete with evidence which show that the damage to the bags happened before
and after their discharge and it was caused by the stevedores of the arrastre operator who were
then under the supervision of Wallem.
It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain
under the custody of the carrier. In the instant case, the damage or losses were incurred during
the discharge of the shipment while under the supervision of the carrier. Consequently, the
carrier is liable for the damage or losses caused to the shipment. As the cost of the actual damage
to the subject shipment has long been settled, the trial courts finding of actual damages in the
amount of P397,879.69 has to be sustained.
(4) Mr Talens credibility must be respected.

2012BENJAMIN CUA (CUA UlAN TEK), Petitioner, vs. WALLEM PHILIPPINES SHIPPING, INC. and ADVANCE SHIPPING CORPORATION, Respondents.

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