G.R. No. 189524 October 11, 2017
ORIENTAL ASSURANCE CORPORATION, Petitioner, vs. MANUEL ONG, doing business under the business name of WESTERN PACIFIC TRANSPORT SERVICES AND/OR ASIAN TERMINALS, INC., Respondents.

FACTS

JEA Steel Industries imported 72 steel coils, which arrived in Manila on June 10, 2002, and were placed under the custody of arrastre operator Asian Terminals, Inc. (ATI). The coils were subsequently delivered to the consignee by the trucking service of Manuel Ong on June 14 and 17, 2002. Eleven coils were discovered damaged. The consignee’s insurer, Oriental Assurance Corporation, paid the claim and then filed a complaint for sum of money against Ong and ATI on May 19, 2003. ATI defended itself by arguing that the claim was filed beyond the 15-day prescriptive period stipulated in the Gate Pass and the Management Contract, which also limited its liability to ₱5,000 per package. The Regional Trial Court dismissed the complaint, a ruling affirmed by the Court of Appeals, which held the claim had prescribed. Oriental Assurance elevated the case to the Supreme Court via a Petition for Review on Certiorari.

ISSUE

The primary issues were: (1) whether the Court of Appeals erred in ruling on the issue of prescription despite it not being an assigned error on appeal; (2) whether the claim against ATI was barred by prescription; and (3) whether Manuel Ong was liable for the cargo damage.

RULING

The Supreme Court partially granted the petition. On the procedural issue, the Court held that the Court of Appeals correctly ruled on prescription. While not an assigned error, prescription, being a question of law, may be reviewed if evident from the records and its resolution is necessary for a complete determination of the case. On the substantive issue of prescription, the Court ruled the claim was not barred. The 15-day period under the Management Contract for filing a formal claim begins from the date of ATI’s issuance of a certificate of loss or damage. The consignee’s claim letter, received by ATI on June 19, 2002—just two days after the final delivery was completed on June 17—constituted substantial compliance. This timely written notice served the contract’s purpose of enabling ATI to verify the claim promptly. However, the Court affirmed ATI’s limited liability. The Management Contract validly limited ATI’s liability to ₱5,000 per package, and there was no proof the consignee declared a higher value or paid corresponding arrastre charges to waive this limit. Therefore, ATI’s liability was capped at ₱5,000 per damaged coil. Finally, the Court absolved Manuel Ong from liability. The evidence, including the delivery receipts signed “subject to verification,” failed to establish that the damage occurred during his trucking service. The presumption of negligence against a common carrier was sufficiently rebutted.