G.R. No. 213931. November 17, 2021.
KUWAIT AIRWAYS CORPORATION, PETITIONER, VS. THE TOKIO MARINE AND FIRE INSURANCE CO., LTD., AND TOKIO MARINE MALAYAN INSURANCE CO., INC., RESPONDENTS.

FACTS

Petitioner Kuwait Airways Corporation (KAC) is a foreign corporation licensed in the Philippines as a common carrier for air transportation. Respondents are Tokio Marine and Fire Insurance Co., Ltd. (TMFICL), a Japanese insurer, and its affiliate/settling agent, Tokio Marine Malayan Insurance Co., Inc. (TMMICI). On January 6, 2003, Fujitsu Europe Limited (FEL) engaged O’Grady Air Services (OAS) to transport 10 pallets of disk drives from the UK to Fujitsu Computer Products Corporation of the Philippines (FCPCP) in Laguna. The shipment, insured under TMFICL’s policy, was loaded onto KAC’s aircraft. It arrived at NAIA on January 9, 2003. A photocopy of a MIASCOR Storage and Delivery Receipt dated January 10, 2003, noted one crate had a hole and another was dented. The cargo was later received by FCPCP on January 18, 2003. TMMICI hired a surveyor, Henry Barcena, who inspected the goods at FCPCP’s premises on January 27, 2003 (18 days after arrival). His initial report stated the disk drives “appeared [in] good order but rejected by consignee’s authorized representative.” A later Certificate of Survey suggested the damage may have been caused by the rigor of voyage or rough handling. After KAC did not act on FCPCP’s claim, TMMICI paid the insurance indemnity. TMFICL was subrogated to FCPCP’s rights. Respondents filed a complaint for damages against OAS and KAC. Only KAC filed an Answer, denying negligence and asserting it exercised extraordinary diligence. The RTC dismissed the complaint, finding the evidence of damage (the MIASCOR and Japan Cargo Delivery Receipts) inadmissible and lacking probative value, and giving little credence to the late survey. The CA reversed, holding the receipts indubitably proved damage and applying the doctrine of res ipsa loquitur to presume KAC’s negligence.

ISSUE

1. Whether the MIASCOR Storage and Delivery Receipt and the Japan Cargo Delivery Receipt are adequate proof of damage to the goods.
2. Whether the doctrine of res ipsa loquitur may be applied in this case.
3. Whether petitioner’s liability, if any, may be limited in accordance with the Warsaw Convention.

RULING

1. No, the receipts are not adequate proof of damage. The Supreme Court held that the photocopies of the MIASCOR and Japan Cargo Delivery Receipts are inadmissible as secondary evidence. The respondents failed to lay the proper foundation for their admission; they did not account for the original receipts’ absence or prove their due execution and authenticity. The witnesses could not identify the signatures on the receipts nor testify to their preparation. Consequently, these documents have no probative value. The surveyor’s inspection, conducted 18 days after the cargo’s arrival, also cannot establish that the damage occurred while the goods were in KAC’s custody, as the cargo was no longer in KAC’s exclusive possession.
2. No, the doctrine of res ipsa loquitur is not applicable. The doctrine requires that (a) the occurrence of an injury, (b) the thing causing the injury was under the exclusive control of the defendant, and (c) the occurrence is such that it would not have happened in the ordinary course without negligence. Here, the first requisite—proof of injury or damage occurring while under the carrier’s custody—was not established due to the inadmissibility of the key evidence (the receipts) and the significant delay in inspection. Without competent proof that the goods were already damaged upon unloading from KAC’s aircraft, the doctrine cannot be invoked to create a presumption of negligence.
3. The issue of limiting liability under the Warsaw Convention was rendered moot. Since the respondents failed to prove by competent evidence that the goods were damaged while in KAC’s custody as a carrier, KAC’s liability was not established. Therefore, there is no basis to discuss the application of liability limits under the Warsaw Convention.
DISPOSITIVE:
The Petition was GRANTED. The Decision and Resolution of the Court of Appeals were REVERSED and SET ASIDE. The Decision of the Regional Trial Court dismissing the complaint was REINSTATED.