G.R. No. 152158 ; February 7, 2003
WALLEM PHILIPPINES SHIPPING INC. and SEACOAST MARITIME CORPORATION, petitioners, vs. PRUDENTIAL GUARANTEE & ASSURANCE INC. and COURT OF APPEALS, respondents.

FACTS

Prudential Guarantee & Assurance Inc. (Prudential) filed a complaint for damages against Wallem Philippines Shipping, Inc. and Seacoast Maritime Corporation. Prudential sought to recover the amount it paid to its insured, General Milling Corporation (GMC), for an alleged shortage in a shipment of soybean meal. The cargo was transported under a bill of lading, and upon discharge and weighing at GMC’s warehouse using its own scale, a shortage was reported. Prudential, as subrogee, paid GMC’s claim based on supporting documents and a surveyor’s report, then demanded reimbursement from the carriers.
The Regional Trial Court dismissed Prudential’s complaint. It found the evidence for the shortage insufficient, noting that the surveyor’s report relied on GMC’s uncalibrated scale and a pre-shipment weight certificate not prepared by the surveyor. The Court of Appeals reversed this decision, holding that Prudential had established a prima facie case of shortage, shifting the burden to the carriers to prove they exercised due diligence.

ISSUE

Whether Prudential, as subrogee, sufficiently proved the fact and extent of the cargo shortage to hold the carriers liable for damages.

RULING

The Supreme Court reversed the Court of Appeals and reinstated the RTC’s dismissal. The legal logic is anchored on the insufficiency of Prudential’s evidence to prove the cargo shortage. First, for the substantive claim of loss, Prudential failed to provide competent proof of the exact quantity of cargo loaded. The surveyor’s outturn figures were based on GMC’s scale, which was found to be uncalibrated and unreliable, with admitted discrepancies. The reported pre-shipment weight was taken from a certificate not prepared by the surveyor, making it hearsay. Without reliable proof of both the shipped and landed quantities, no valid shortage could be established.
Second, for Prudential’s capacity as subrogee, the subrogation receipt alone was insufficient to prove its right of action. Following precedent, such a receipt only shows payment and subrogation but does not, by itself, establish the carrier’s liability for the loss. The insurance policy itself was not presented as evidence. Consequently, Prudential failed to discharge its fundamental burden of proving the fact of loss and its extent by preponderance of evidence. The prima facie presumption of carrier liability under Article 1735 of the Civil Code never arose due to this failure of initial proof.