G.R. No. 84680 ; February 5, 1996
Summa Insurance Corporation, petitioner, vs. Court of Appeals and Metro Port Service, Inc., respondents.

FACTS

The case involves the loss of a bundle of PC8U blades from a shipment insured by petitioner Summa Insurance Corporation. The shipment arrived in Manila aboard a vessel owned by National Galleon Shipping Corporation (NGSC) and was discharged into the custody of respondent Metro Port Service, Inc., the exclusive arrastre operator. Three good-order cargo receipts, signed by both the ship’s checker and Metro Port’s representative, were issued. Subsequently, when the shipment reached the consignee, Semirara Coal Corporation, the bundle was discovered missing. Metro Port later issued a short-landed certificate claiming the bundle was already missing upon receipt from the vessel. Summa, as subrogee after paying Semirara’s claim, sued both NGSC and Metro Port for the loss.
The trial court absolved NGSC but held Metro Port liable for the full invoice value of P280,969.68, finding the loss occurred during Metro Port’s custody based on the good-order receipts. The Court of Appeals affirmed Metro Port’s liability but reduced the amount to P3,500.00, citing the limitation of liability under the management contract between Metro Port and the Bureau of Customs. Summa filed this petition, seeking recovery of the full invoice value.

ISSUE

The primary issue is whether Metro Port is liable for the loss and, if so, whether its liability is limited to P3,500.00 as stipulated in its management contract.

RULING

The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. The Court upheld Metro Port’s liability for the loss, as the arrastre operator is presumed negligent once a shipment is lost while in its custody, and Metro Port failed to rebut this presumption. However, the Court enforced the contractual limitation of liability. The management contract, which governs the relationship between the arrastre operator and the consignee, limits liability for loss to P500.00 per package unless the value is declared in writing before discharge and a corresponding arrastre charge is paid.
The Court found that Summa failed to prove that the required declaration of value was made before the shipment’s discharge to Metro Port. The invoice and packing list indicating the value were only submitted to Metro Port after the loss, during the claims process. Consequently, the stipulation limiting liability to P500.00 per package was applicable. Since the lost bundle was one package, and the contract further limited liability to a maximum of seven packages (P3,500.00) per transaction, Metro Port’s liability was correctly capped at P3,500.00. The award of attorney’s fees was also sustained.