E. Razon, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Pioneer Insurance & Surety Corporation, as insurer-subrogee, filed a complaint to recover P21,937.75 from Northern Lines, Inc. and/or E. Razon, Inc. for three (3) cases of radio and phonograph parts that were short-delivered from a shipment of eighty-six (86) cases. The shipment was discharged from the SS "Don Jacinto II" into the custody of E. Razon, Inc., an arrastre operator. E. Razon certified that only 83 cases were delivered to the consignee, MGM Importers Corporation. Pioneer indemnified the assured for the full value of the lost cargo. Procedural History: The Court of First Instance of Manila ordered E. Razon, Inc. to pay Pioneer the sum of P10,899.28 with legal interest, dismissing the complaint against Northern Lines, Inc. The Court of Appeals affirmed this decision in toto. E. Razon, Inc. filed a petition for review by certiorari. The Petition: The sole issue raised by petitioner E. Razon, Inc. is the limitation of its liability to P2,000 per package as stipulated in its Revised Management Contract with the Bureau of Customs, arguing that the invoice value was not declared in writing prior to the arrival of the goods.
Issue(s)
Whether the arrastre operator's liability is limited to P2,000 per package under the Revised Management Contract, considering the declaration of the invoice value. Whether the petitioner's claim of reduced liability due to only two cases being missing, with the third having shortages, is substantiated by evidence.
Ruling
The petition is dismissed. The judgment ordering E. Razon, Inc. to pay Pioneer Insurance and Surety Corporation P10,899.28 with legal interest is affirmed.
Ratio Decidendi
On the limitation of liability and declaration of invoice value: The Court ruled that the petitioner's liability is not limited to P2,000 per package. The declaration of the actual invoice value was sufficiently made when MGM Importers declared it for tax purposes and arrastre charges upon arrival. Presenting the invoice, packing list, and shipping documents to the Bureau of Customs and E. Razon satisfied the condition of declaring the actual invoice value before the goods arrived in the arrastre operator's custody, overcoming the limitation of liability. The provision regarding declaration "before the arrival of the goods" means "before the arrival of the goods in the custody of the arrastre operator." This ensures the operator knows the risk and can ascertain commensurate compensation, as in Northern Motors, Inc. v. Prince Lines. Having been informed of the actual invoice value and receiving arrastre charges based thereon, E. Razon, Inc. cannot insist on a lower liability. On the petitioner's claim of reduced liability: The petitioner's contention that only two cases were missing, with the third having shortages, was unsubstantiated. The Court found no sufficient evidence to support this claim. The petitioner's own certification of delivery indicated that out of 86 manifested cases, only 83 were delivered by E. Razon, with no further deliveries made to the consignee. This refutes the petitioner's assertion of reduced liability.
Main Doctrine
An arrastre operator's liability, limited by contract to a certain amount per package, can be overcome if the actual invoice value of the goods was declared or made known to the operator before or at the time of the turnover of the goods, as this declaration satisfies the condition for overcoming the limitation and ensures the operator is compensated commensurately to the risk assumed.