G.R. No. 182208 October 14, 2015
ASIAN TERMINALS, INC., Petitioner vs. ALLIED GUARANTEE INSURANCE CO., INC., Respondent

FACTS

A shipment of 72,322 lbs. of kraft linear board was transported from the U.S.A. to San Miguel Corporation in Manila. The vessel M/V Nicole arrived on April 8, 1989, and the shipment was offloaded to the arrastre operator, Marina Port Services, Inc. (predecessor of petitioner Asian Terminals, Inc. or ATI). Upon discharge, 158 rolls were assessed as damaged. After withdrawal by the customs broker, Dynamic Brokerage Co. Inc., and delivery to consignee San Miguel, an additional 54 rolls were found damaged, totaling 212 damaged rolls worth P755,666.84. Respondent Allied Guarantee Insurance Co., Inc., as insurer, paid San Miguel and was subrogated to its rights. Allied filed a complaint for damages against the carrier, its agent, the broker, and the arrastre operator (ATI). The Regional Trial Court found all defendants liable: the carrier for the 158 rolls damaged during shipping, and ATI and the broker jointly and severally liable for the additional 54 rolls damaged. The Court of Appeals affirmed the decision. ATI appealed, arguing it should not be liable for the additional 54 rolls, claiming the goods were withdrawn in the same condition as discharged and that damage was discovered only at the consignee’s warehouse.

ISSUE

1. Whether petitioner ATI is liable for the damage to the additional 54 rolls of kraft linear board.
2. Whether the award of attorney’s fees is justified.

RULING

The Supreme Court denied the petition and affirmed the lower courts’ decisions.
1. On the liability for the additional 54 rolls: The Court held that ATI’s petition essentially raised questions of fact, which are not reviewable in a petition for review on certiorari under Rule 45. The findings of the trial and appellate courts that ATI failed to prove it exercised due diligence in handling the goods were conclusive. As an arrastre operator, ATI is bound to observe extraordinary diligence and is presumed negligent upon proof of damage to goods in its custody. ATI failed to overcome this presumption. The Court noted that ATI did not present crucial witnesses, such as the Turn Over Inspector and Bad Order Inspector, to substantiate its claim that no additional damage occurred while the goods were in its custody. The Turn Over Survey and Requests for Bad Order Survey documents alone were insufficient to absolve ATI without supporting testimony.
2. On the award of attorney’s fees: The Court sustained the award. The trial court’s decision, which based the award on the defendants’ failure to settle their obligation despite demands, constituted sufficient justification. The Court cited precedent that attorney’s fees are recoverable when a party’s act or omission has compelled the other to litigate.