ASIAN TERMINALS, INC. vs.

PHILAM INSURANCE
CO., INC
July 2, 2014 § 1 Comment

G.R. Nos. 181163, 181262, and 181319, July 24, 2013 (VILLARAMA, JR., J)

FACTS:

On April 15, 1995, Nichimen Corporation shipped to Universal Motors Corporation 219 packages

containing 120 units of brand new Nissan Pickup Truck Double Cab 4×2 model, without engine, tires and

batteries, on board the vessel S/S Calayan Iris from Japan to Manila. The shipment, which had a declared

value of US$81,368 or P29,400,000, was insured with Philam against all risks under the marine Policy no.

708-8006717-4.

The carrying vessel arrived at the port of manila on April 20, 1995, and when the shipment was unloaded

by the staff of ATI, it was found that the package marked as 03-245-42K/1 was in bad order. The Turn

Over Survey of bad order cargoes dated April 21, 1995 identified two packages, labelled 03-245-42K/1

and 03/237/7CK/2, as being dented and broken. Thereafter, the cargoes were stored for temporary

safekeeping inside CFS Warehouse in Pier No. 5.

On May 11, 1995, the shipment was withdrawn by R.F. Revilla Customs Brokerage, Inc., the authorized

broker of Universal Motors, and delivered to the latter’s warehouse in Mandaluyong City. Upon the request

of Universal Motors, a bad order survey was conducted on the cargoes and it was found that one Frame

Axle Sub without LWR was deeply dented on the buffle plate while six Frame Assembly with Bush were

deformed and misaligned. Owing to the extent of the damage to said cargoes, Universal Motors declared

them a total loss.

On August 4, 1995, Universal Motors filed a formal claim for damages in the amount of P643,963.84

against Westwind, ATI and R.F. Revilla Customs Brokerage, Inc. When Universal Motors’ demands remained

unheeded, it sought reparation from and was compensated in the sum of P633,957.15 by Philam.

Accordingly, Universal Motors issued a Subrogation Receipt dated November 15, 1995 in favor of Philam.

On January 18, 1996, Philam, as subrogee of Universal Motors, filed a Complaint for damages against

Westwind, ATI and R.F. Revilla Customs Brokerage, Inc. before the Regional Trial Court of Makati City. The

trial court rendered judgment in favour of Philam which ruling was affirmed by the Court of Appeals

modifying the amount to be paid by Westwind and ATI.

ISSUE:

Whether or not Philam may claim against Westwind and ATI as a subrogee

HELD:

YES. The Court holds that petitioner Philam has adequately established the basis of its claim against

petitioners ATI and Westwind. Philam, as insurer, was subrogated to the rights of the consignee, Universal

Motors Corporation, pursuant to the Subrogation receipt executed by the latter in favour of the former.

The right of subrogation accrues simply upon payment by the insurance company of the insurance claim.

Petitioner Philam’s action finds support in Article 2207 of the Civil Code which provides that if the

plaintiff’s property has been insured, and he has received indemnity from the insurance company for the

injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall

be subrogated to the rights of the insured against the wrongdoer or the person who has violated the

contract.
In Malayan Insurance Co., Inc. vs. Alberto, the Court explained the effect of payment by the insurer of the

insurance claim in this wise:

We have held that payment by the insurer to the insured operates as an equitable assignment to the

insurer of all the remedies that the insured may have against the third party whose negligence or wrongful

act caused the loss. The right of subrogation is not dependent upon, nor does it grow out of, any privity of

contract. It accrues simply upon payment by the insurance company of the insurance claim. The doctrine

of subrogation has its roots in equity. It is designed to promote and accomplish justice; and is the mode

that equity adopts to compel the ultimate payment of a debt by one who, in justice, equity, and good

conscience, ought to pay

Asian Terminals Inc vs PhilAm Insurance

Case on Letter of Credit

Asian Terminals, Inc., Petitioner, vs. Philam Insurance Co., Inc., (now Chartis Philippines Insurance,
Inc.), Respondent

G.R. No. 181163, July 24, 2013

Philam Insurance Co., Inc., (now Chartis Philippines Insurance Inc.), Petitioner, vs. Westwind Shipping
Corporation and Asian Terminals, Inc., Respondents

G.R. 181262

Westwind Shipping Corporation, Petitioner, vs. Philam Insurance Co., Inc. (now Chartis Philippines
Insurance Inc.), Respondent

G.R. 181319

Facts: The case is a consolidation of three petitions for certiorari assailing the Decision and Resolution of
the Court of Appeals where Nichimen Corporation shipped to consignee Universal Motors Corporation
packages of automobiles, where upon delivery, said goods were found to have sustained damages.
However, being insured with Philam against all risks, said insurance agency compensated Universal
Motors and a subrogation receipt was issued thereafter to the insurance company. Philam, now the
subrogee of Universal Motors went after Westwind and Asian Terminal for reparation of compensated
amount given to Universal Motors.

Issue: What document may be effective used to prove loss and/or damages on the part of the shipper or
consignee?

Ruling: A letter of credit may be used. A letter of credit is a financial device developed by merchants as
a convenient and relatively safe mode of dealing with sales of goods to satisfy the seemingly
irreconcilable interests of a seller, who refuses to part with his goods before he is paid, and a buyer, who
wants to have control of his goods before paying. Letters of credit are employed by the parties desiring to
enter into commercial transaction, mainly for the benefit of the parties to the original transaction.
Accordingly, for purposes of reckoning when notice of loss or damage should be given to the carrier or its
agent, the date of delivery to Universal Motors is controlling.

INSURANCE COMPANY OF
NORTH AMERICA vs. ASIAN
TERMINALS, INC.
DOCTRINE:
The term “carriage of goods” in the Carriage of Goods by Sea Act (COGSA) covers the period from
the time the goods are loaded to the vessel to the time they are discharged therefrom.

• The carrier and the ship shall be discharged from all liability in respect of loss or damage unless
suit is brought within one year after delivery of the goods or the date when the goods should have
been delivered.
FACTS:

• On November 9, 2002, Macro-Lito Corporation, through M/V “DIMI P” vessel, 185 packages of
electrolytic tin free steel, complete and in good condition.
• The goods are covered by a bill of lading, had a declared value of $169,850.35 and was insured
with the Insuracne Company of North America (Petitioner) against all risk.
• The carrying vessel arrived at the port of Manila on November 19, 2002, and when the shipment
was discharged therefrom, it was noted that 7 of the packages were damaged and in bad condition.
• On Novermber 21, 2002, the shipment was then turned over to the custody of Asian Terminals.
Inc. (Respondent) for storage and safekeeping pending its withrawal by the consignee.
• On November 29, 2002, prior to the withrawal of the shipment, a joint inspection of the said cargo
was conducted. The examination report showed that an additional 5 packages were found to be
damaged and in bad order.
• On January 6, 2003, the consignee, San Miguel Corporation filed separate claims against both
the Petioner and the Respondent for the damage caused to the packages.
• The Petitioner then paid San Miguel Corporation the amound of PhP 431,592.14 which is based
on a report of its independent adjuster.
• The Petitioner then formally demanded reparation against the Respondent for the amount it paid
San Miguel Corporation.
• For the failure of the Respondent to satisfy the demand of the Petitioner, the Petitioner filed for an
action for damages with the RTC of Makati.
• The trial court found that indeed, the shipment suffered additional damage under the custody of
the Respondent prior to the turn over of the said shipment to San Miguel.
• As to the extent of liability, Respondent invoked the Contract for Cargo Handling Services
executed between the Philippine Ports Authority and the Respondent. Under the contract, the
Respondent’s liability for damage to cargoes in its custody is limited to PhP5,000 for each package,
unless the value of the cargo shipment is otherwise specified or manifested in writing together with
the declared Bill of Lading. The trial Court found that the shipper and consignee with the said
requirements.
• However, the trial court dismissed the complaint on the ground that the Petitioner’s claim was
barred by the statute of limitations. It held that the Carriage of Goods by Sea Act (COGSA),
embodied in Commonwealth Act No. 65 is applicable. The trial court held that under the said law, the
shipper has the right to bring a suit within one year after the delivery of the goods or the date when
the goods should have been delivered, in respect of loss or damage thereto.
• Petitioner then filed before the Supreme Court a petition for review on certiorari assailing the trial
court’s order of dismissal.

ISSUE/S:

1.) Whether or not the trial court committed an error in dismissing the complaint of the petitioner
based on the one-year prescriptive period for filing a suit under the COGSA to an arrastre operator?
YES.

2.) Whether or not the Petitioner is entitled to recover actual damages against the Respondent?
YES, but only PhP164,428.76
HELD:

• The term “carriage of goods” covers the period from the time when the goods are loaded to the
time when they are discharged from the ship. Thus, it can be inferred that the period of time when
the goods have been discharged from the ship and given to the custody of the arrastre operator is
not covered by the COGSA.

• The Petitioner, who filed the present action for the 5 packages that were damaged while in the
custody of the respondent was not fortright in its claim, as it knew that the damages it sought, based
on the report of its adjuster covered 9 packages. Based on the report, only four of the nine packages
were damaged in the custody of the Respondent. The Petitioner can be granted only the amount of
damages that is due to it.

MALAYAN INSURANCE vs PHILIPPINE FIRST INSURANCE FACTS      Wyeth contracted a

contract of carriage with Republic, a common carrier for the transport of its goods and product. Wyeth
insured the goods with Philippine First , while Republic insured the same goods with Malayan insurance
During transit, certain goods were lost due to hijacking of 10 armed men. Philippine first paid the
proceeds to Wyeth, subrogating the rights of wyeth to Philippine first which filed a claim against Republic
and Malayan as a 3rd party defendant. Republic and Malayan refused the claim of Philippine first.
Malayan contended that there was double insurance and that the first insurer, Philippine First, should
bear all the loss.

ISSUE    HELD  Malayan is liable because of the insurance contract it executed with Republic for the
idemnity for the loss. The cause of the loss not within the purview of an excepted peril, having been
determined in the lower courts is conclusive upon the SC making Malayan liable for the idemnity. There is
double insurance when: 1] The person insured is the same 2] 2 or more insurers insuring separately 3]
There is identity of subject matter 4] There is identity of interest insured 5] There is identity of the risk or
peril insured against In the case at bar though the 2 insurance policy, one by Philippine first and one by
Malayan were issued over the same subject matter covering the same peril, it was issued to 2 different
persons and to 2 different interest.   Philippine first insured wyeth over its own goods Malayan insured
republic over the latters insurable interest over the safety of the goods which could become the basis for
liability in case of loss or damage. W/N Malayan is liable? - YES W/N there is double insurance? - NO
W/N Malayan is solidarily liable with Republic? - NO

Malayan is not solidarily liable with Republic because they have different sources from which their liability
arose. Republic arose due to a contract of carriage, while Malayan is that of contract. Solidarity exist only
by express stipulation of the parties or those provided by law, none of which is applicable in the present
case.
Loadmasters Customs Services Inc. vs. Glodel Brokerage Corporation Digested
LOADMASTERS CUSTOMS SERVICES, INC., vs. GLODEL BROKERAGE CORPORATION
and R&B INSURANCE CORPORATION, / G.R. No. 179446 / January 10, 2011

FACTS:

The case is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court assailing the August 24, 2007 Decision of the Court of Appeals (CA) in CA-G.R. CV No.
82822.

On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor
of Columbia to insure the shipment of 132 bundles of electric copper cathodes against All Risks.
On August 28, 2001, the cargoes were shipped on board the vessel "Richard Rey" from Isabela,
Leyte, to Pier 10, North Harbor, Manila. They arrived on the same date.
Columbia engaged the services of Glodel for the release and withdrawal of the cargoes
from the pier and the subsequent delivery to its warehouses/plants. Glodel, in turn, engaged the
services of Loadmasters for the use of its delivery trucks to transport the cargoes to Columbia’s
warehouses/plants in Bulacan and Valenzuela City.
The goods were loaded on board twelve (12) trucks owned by Loadmasters, driven by
its employed drivers and accompanied by its employed truck helpers. Of the six (6) trucks route
to Balagtas, Bulacan, only five (5) reached the destination. One (1) truck, loaded with 11
bundles or 232 pieces of copper cathodes, failed to deliver its cargo.
Later on, the said truck, was recovered but without the copper cathodes. Because of this
incident, Columbia filed with R&B Insurance a claim for insurance indemnity in the amount
ofP1,903,335.39. After the investigation, R&B Insurance paid Columbia the amount
ofP1,896,789.62 as insurance indemnity.

R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and
Glodel before the Regional Trial Court, Branch 14, Manila (RTC), It sought reimbursement of
the amount it had paid to Columbia for the loss of the subject cargo. It claimed that it had been
subrogated "to the right of the consignee to recover from the party/parties who may be held
legally liable for the loss."

On November 19, 2003, the RTC rendered a decision holding Glodel liable for damages
for the loss of the subject cargo and dismissing Loadmasters’ counterclaim for damages and
attorney’s fees against R&B Insurance.

Both R&B Insurance and Glodel appealed the RTC decision to the CA.
On August 24, 2007, the CA rendered that the appellee is an agent of appellant Glodel,
whatever liability the latter owes to appellant R&B Insurance Corporation as insurance
indemnity must likewise be the amount it shall be paid by appellee Loadmasters. Hence,
Loadmasters filed the present petition for review on certiorari.
ISSUE:

Whether or not Loadmasters and Glodel are common carriers to determine their liability for the
loss of the subject cargo.

RULING:

The petition is PARTIALLY GRANTED. Judgment is rendered declaring petitioner Loadmasters

Customs Services, Inc. and respondent Glodel Brokerage Corporation jointly and severally
liable to respondent

Under Article 1732 of the Civil Code, common carriers are persons, corporations, firms, or
associations engaged in the business of carrying or transporting passenger or goods, or both by
land, water or air for compensation, offering their services to the public. Loadmasters is a
common carrier because it is engaged in the business of transporting goods by land, through its
trucking service. It is a common carrier as distinguished from a private carrier wherein the
carriage is generally undertaken by special agreement and it does not hold itself out to carry
goods for the general public. Glodel is also considered a common carrier within the context of
Article 1732. For as stated and well provided in the case of Schmitz Transport & Brokerage
Corporation v. Transport Venture, Inc., a customs broker is also regarded as a common carrier,
the transportation of goods being an integral part of its business.

Loadmasters and Glodel, being both common carriers, are mandated from the nature of their
business and for reasons of public policy, to observe the extraordinary diligence in the vigilance
over the goods transported by them according to all the circumstances of such case, as
required by Article 1733 of the Civil Code. When the Court speaks of extraordinary diligence, it
is that extreme measure of care and caution which persons of unusual prudence and
circumspection observe for securing and preserving their own property or rights. With respect to
the time frame of this extraordinary responsibility, the Civil Code provides that the exercise of
extraordinary diligence 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.

The Court is of the view that both Loadmasters and Glodel are jointly and severally liable to R &
B Insurance for the loss of the subject cargo. Loadmasters’ claim that it was never privy to the
contract entered into by Glodel with the consignee Columbia or R&B Insurance as subrogee, is
not a valid defense.

For under ART. 2180. The obligation imposed by Article 2176 is demandable not only for one’s
own acts or omissions, but also for those of persons for whom one is responsible.

xxxx
Employers shall be liable for the damages caused by their employees and household helpers
acting within the scope of their assigned tasks, even though the former are not engaged in any
business or industry.

It is not disputed that the subject cargo was lost while in the custody of Loadmasters whose
employees (truck driver and helper) were instrumental in the hijacking or robbery of the
shipment. As employer, Loadmasters should be made answerable for the damages caused by
its employees who acted within the scope of their assigned task of delivering the goods safely to
the warehouse.

Glodel is also liable because of its failure to exercise extraordinary diligence. It failed to ensure
that Loadmasters would fully comply with the undertaking to safely transport the subject cargo
to the designated destination. Glodel should, therefore, be held liable with Loadmasters. Its
defense of force majeure is unavailing.

For the consequence, Glodel has no one to blame but itself. The Court cannot come to its aid
on equitable grounds. "Equity, which has been aptly described as ‘a justice outside legality,’ is
applied only in the absence of, and never against, statutory law or judicial rules of
procedure." The Court cannot be a lawyer and take the cudgels for a party who has been at
fault or negligent.