G.R. No. L-57582 August 24, 1984
METRO PORT SERVICE, INC., (Formerly E. Razon, Inc.), petitioner-appellant, vs. COURT OF APPEALS and CHARTER INSURANCE CO., INC., respondents-appellees.

FACTS

Charter Insurance Co., Inc. (INSURER) paid Union Sales Marketing Corporation (UNION) for damages to a shipment of polyethylene bags. The shipment arrived in Manila aboard a vessel owned by Universal Shipping Lines, Inc. (CARRIER), with arrastre services handled by E. Razon, Inc., now Metro Port Service, Inc. (ARRASTRE). The INSURER, as subrogee, sued both the CARRIER and the ARRASTRE for recovery of the amount paid.
The trial court found both defendants liable, apportioning the damages between them. The CARRIER was ordered to pay P12,285.94, and the ARRASTRE was ordered to pay P9,763.94, with both being held jointly and severally liable for attorney’s fees. On appeal, the Court of Appeals modified the decision. It absolved the CARRIER completely and held the ARRASTRE solely liable for the entire claim of P22,049.88. The appellate court based its ruling on its finding that the cargo damage occurred solely during the arrastre’s custody, dismissing evidence that a significant portion of the bags were already in bad order upon discharge from the vessel.

ISSUE

Whether the Court of Appeals erred in its factual findings by absolving the carrier of liability and holding the arrastre operator solely liable, contrary to the evidence presented at trial.

RULING

The Supreme Court reversed the decision of the Court of Appeals and reinstated the trial court’s judgment. While factual findings of the Court of Appeals are generally conclusive, exceptions exist when such findings are contradicted by the evidence on record. Here, the appellate court’s conclusion was erroneous as it disregarded material evidence.
The evidence, consisting of Cargo Receipts and a Survey of Bad Order Cargoes jointly signed by representatives of both the CARRIER and the ARRASTRE, conclusively established that 619 bags were already in bad order condition, with loss or spoilage of up to 50%, upon discharge from the vessel to the arrastre. This documentary evidence directly contradicted the appellate court’s finding that damage occurred only under the arrastre’s care. Consequently, the CARRIER was correctly held liable for the damage to the 619 bags. The trial court’s computation, which limited the CARRIER’s liability to the value of 443 bags based on the INSURER’s own evidence, was upheld. The ARRASTRE’s liability, as fixed by the trial court for damage to the remaining bags that occurred in its custody, was also reinstated. The INSURER, not having appealed the trial court’s award, was barred from seeking its modification.