Asian Terminals, Inc. vs. Simon Enterprises, Inc.

An arrastre operator cannot be held liable for cargo shortage where the consignee fails to prove the actual weight of the shipment at the port of origin, particularly when the bill of lading contains a "shipper's weight, quantity and quality unknown" clause, and the alleged shortage falls within allowable variance due to the inherent nature of the goods.

Contiquincybunge Export Company shipped U.S. Soybean Meal in bulk to Simon Enterprises, Inc. from Louisiana to Manila. The shipment was discharged to the receiving barges of Asian Terminals, Inc. (ATI), the arrastre operator. Respondent claimed a shortage of 199.863 metric tons out of the manifested 3,300 metric tons and sued ATI and the carrier for damages.

• The Shipments: Two shipments of U.S. Soybean Meal in bulk were transported from Louisiana, U.S.A. to Manila. The first shipment arrived on M/V "Sea Dream," where respondent initially claimed a shortage of 18.556 metric tons, but this claim was later settled via Release and Quitclaim. The second shipment arrived on M/V "Tern," with a manifested weight of 3,300.000 metric tons.
• The Bill of Lading: The carrier issued a clean Berth Term Grain Bill of Lading for the second shipment, which contained the qualification "Shipper’s weight, quantity and quality unknown."
• The Claim: Upon discharge to ATI's receiving barges, respondent reported receiving only 3,100.137 metric tons, alleging a shortage of 199.863 metric tons valued at US$79,848.86 or ₱2,100,025.00. Respondent filed an action for damages against the unknown owner of the vessels, its local agent Inter-Asia Marine Transport, Inc., and ATI.
• The Proforma Invoice: The invoice indicated a description of 3,000 metric tons, but respondent's claims manager admitted that the supplier had the option to ship plus or minus 10% of the quantity.
• The Survey Reports: Respondent relied on the Survey Reports of Del Pan Surveyors, which used the barge displacement method (draught survey) to determine the weight of the cargo. The surveys were conducted under slight to slightly rough sea conditions. A discrepancy was noted in the survey computations: while the report established an average weight of 52 kilos per bag, the final computation used 49 kilos per bag to arrive at the shortage figure.
• Moisture Content: The cargo had a moisture content of 12.5%. Respondent's own cargo surveyor testified that weight loss was possible during the 36-day voyage due to the shift in temperature from winter in the United States to the warmer Philippine climate (desorption).

• Failure to Prove Actual Shortage: Petitioner argued that respondent failed to prove the subject shipment suffered actual shortage, as there was no competent evidence establishing that it weighed 3,300 metric tons at the port of origin.
• Bill of Lading Stipulations: Petitioner maintained that the "shipper’s weight, quantity and quality unknown" stipulation in the bill of lading is not contrary to public policy, and thus, ATI cannot be bound by the quantity or weight declared therein.
• Inherent Nature of Goods: Petitioner argued that any shortage may have been due to the inherent nature of the shipment and its insufficient packing, considering the cargo was shipped in bulk with a 12.5% moisture content.
• Lack of Negligence: Petitioner maintained that respondent presented no evidence showing fault or negligence on the part of ATI.
• Unreliable Weighing Methods: Petitioner argued that the draught survey methods used to establish the shortage were inaccurate and unreliable.
• Counterclaim: Petitioner argued entitlement to its counterclaim for attorney's fees.

• Affirmance of CA: Respondent countered by extensively quoting the Court of Appeals decision and maintaining its correctness, asserting that the factual findings of the trial court, as affirmed by the appellate court, should not be disturbed on appeal.

• Liability for Shortage: Whether the appellate court erred in affirming the trial court decision holding the arrastre operator solidarily liable with its co-defendants for the shortage incurred in the shipment.

• Liability for Shortage: The liability of the arrastre operator was reversed and set aside on the ground that respondent failed to prove actual shortage and negligence. Before the presumption of fault or negligence shifts the burden to the carrier or arrastre operator, the plaintiff must first prove actual shortage by establishing the weight of the shipment at the port of origin and arrival. The bill of lading containing a "shipper’s weight, quantity and quality unknown" clause is not conclusive proof of actual weight. Furthermore, the testimony of a claims manager regarding the weight indicated in documents was deemed hearsay due to lack of personal knowledge. The alleged shortage of 6.05% falls within the 10% allowable variance in the invoice, and weight loss due to desorption during transit is a recognized phenomenon supported by the cargo surveyor's testimony. Finally, no negligence was attributed to ATI, and the draught survey methods used were rendered unreliable by sea conditions and computational discrepancies.

• Presumption of Fault in Common Carriers — Common carriers are presumed to have been at fault or to have acted negligently if the goods transported are lost, destroyed, or deteriorated. However, before the burden shifts to the defendant to prove extraordinary diligence, the plaintiff must first prove that the subject shipment suffered actual shortage by establishing the weight at the port of origin and arrival.
• Bill of Lading as Prima Facie Evidence — The weight of the shipment indicated in a bill of lading serves as prima facie evidence of the amount or quantity of goods. However, this presumption is rebutted when the bill of lading contains clauses such as "Shipper’s weight, quantity and quality unknown" or "Said to weigh," meaning the carrier was oblivious to the actual contents and weight of the shipment, which was based solely on the shipper’s declaration.
• Hearsay Evidence on Cargo Weight — A witness who has no personal knowledge of the actual weight of the cargo at the port of origin cannot competently testify to the weight based solely on documents presented to them; such testimony is hearsay and insufficient to prove the fact of shortage.

• "Though it is true that common carriers are presumed to have been at fault or to have acted negligently if the goods transported by them are lost, destroyed, or deteriorated, and that the common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption, the plaintiff must still, before the burden is shifted to the defendant, prove that the subject shipment suffered actual shortage."
• "As can be culled from the above-mentioned cases, the weight of the shipment as indicated in the bill of lading is not conclusive as to the actual weight of the goods. Consequently, the respondent must still prove the actual weight of the subject shipment at the time it was loaded at the port of origin so that a conclusion may be made as to whether there was indeed a shortage for which petitioner must be liable."
• "In the absence of clear, convincing and competent evidence to prove that the cargo indeed weighed, albeit the Bill of Lading qualified it by the phrase 'said to weigh,' 6,599.23 MT at the port of origin when it was loaded onto the MV Hoegh, the fact of loss or shortage in the cargo upon its arrival in Manila cannot be definitively established."

• Wallem Philippines Shipping, Inc. v. Prudential Guarantee & Assurance, Inc., 445 Phil. 136 (2003) — Followed. Established that under a "said to weigh" clause, the shipper is solely responsible for the loading while the carrier is oblivious of the contents of the shipment.
• International Container Terminal Services, Inc. v. Prudential Guarantee & Assurance Co., Inc., 377 Phil. 1082 (1999) — Followed. Explained that an arrastre operator is not required to verify the contents of a container received and compare them with those declared by the shipper when the cargo is at the shipper’s load and count.
• Bankers & Manufacturers Assurance Corporation v. Court of Appeals, G.R. No. 80256, October 2, 1992, 214 SCRA 433 — Followed. Elucidated that for goods transported in sealed containers with "Said to Contain" or similar clauses, the bill of lading is only prima facie evidence of the quantity, and the carrier's duty is only to transport and deliver in the same condition received.
• Malayan Insurance Co., Inc. v. Jardine Davies Transport Services, Inc., G.R. No. 181300, September 18, 2009, 600 SCRA 706 — Followed. Held that the presumption that a bill of lading constitutes prima facie evidence of the goods described is rebutted by clauses casting doubt on the declared weight, and without proof of actual weight at origin, the fact of shortage cannot be definitively established.

• Article 1734, Civil Code — Enumerates the causes (natural disaster, act of public enemy, act of shipper, character of goods, order of public authority) for which common carriers are not responsible for the loss, destruction, or deterioration of goods. Cited to emphasize that the plaintiff must prove actual shortage taking into consideration these exceptions before liability arises.
• Article 1742, Civil Code — Provides that even if the loss or deterioration is caused by the character of the goods or faulty packing, the common carrier must exercise due diligence to forestall or lessen the loss. Cited as the standard of diligence required of carriers, applicable only after the fact of loss or shortage is established.
• Rule 130, Section 36, Rules of Court — States that a witness can testify only to facts derived from their own perception; hearsay is excluded. Applied to disregard the testimony of respondent's claims manager regarding the weight of the cargo at the port of origin, as he had no personal knowledge thereof.

Sereno, C.J. (Chairperson), Leonardo-De Castro, Bersamin, Abad.