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G.R. No. 171406. April 4, 2011.*

ASIAN TERMINALS, INC., petitioner, vs. MALAYAN

INSURANCE CO., INC., respondent.

Remedial Law; Pre­trial; The determination of issues during

the pre­trial conference bars the consideration of other questions,
whether during trial or on appeal; Parties must disclose during
pre­trial all issues they intend to raise during the trial, except
those involving privileged or impeaching matters.—This was never
raised as an issue before the RTC. In fact, it is not among the
issues agreed upon by the parties to be resolved during the pre­
trial. As we have said, “the determination of issues during the
pre­trial conference bars the consideration of other questions,
whether during trial or on appeal.” Thus, “[t]he parties must
disclose during pre­trial all issues they intend to raise during the
trial, except those involving privileged or impeaching matters.
x x x The basis of the rule is simple. Petitioners are bound by the
delimitation of the issues during the pre­trial because they
themselves agreed to the same.”
Same; Appeals; Factual findings of the Court of Appeals (CA)
affirming those of the Regional Trial Court (RTC) are conclusive
and binding, exceptions.—Only questions of law are allowed in
petitions for review on certiorari under Rule 45 of the Rules of
Court. Thus, it is not our duty “to review, examine, and evaluate
or weigh all over again the probative value of the evidence
presented,” especially where the findings of both the trial court
and the appellate court coincide on the matter. As we have often
said, factual findings of the

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* FIRST DIVISION.

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

CA affirming those of the RTC are conclusive and binding, except

in the following cases: “(1) when the inference made is manifestly
mistaken, absurd or impossible; (2) when there is grave abuse of

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discretion; (3) when the findings are grounded entirely on

speculations, surmises or conjectures; (4) when the judgment of
the [CA] is based on misapprehension of facts; (5) when the [CA],
in making its findings, went beyond the issues of the case and the
same is contrary to the admissions of both appellant and appellee;
(6) when the findings of fact are conclusions without citation of
specific evidence on which they are based; (7) when the [CA]
manifestly overlooked certain relevant facts not disputed by the
parties and which, if properly considered, would justify a different
conclusion; and (8) when the findings of fact of the [CA] are
premised on the absence of evidence and are contradicted by the
evidence on record.”
Mercantile Law; Carriage of Goods by Sea Act (COGSA);
Insurance Law; Evidence; The presentation in evidence of the
marine insurance policy is not indispensable before the insurer
may recover from the common carrier the insured value of the lost
cargo in the exercise of its subrogatory right.—Besides, non­
presentation of the insurance contract or policy is not necessarily
fatal. In Delsan Transport Lines, Inc. v. Court of Appeals, 369
SCRA 24 (2001), we ruled that: Anent the second issue, it is our
view and so hold that the presentation in evidence of the
marine insurance policy is not indispensable in this case
before the insurer may recover from the common carrier
the insured value of the lost cargo in the exercise of its
subrogatory right. The subrogation receipt, by itself, is
sufficient to establish not only the relationship of herein
private respondent as insurer and Caltex, as the assured
shipper of the lost cargo of industrial fuel oil, but also the
amount paid to settle the insurance claim. The right of
subrogation accrues simply upon payment by the
insurance company of the insurance claim.
Same; Same; Same; The Management Contract entered into
by petitioner and the Philippine Ports Authority (PPA) is clearly
not among the matters which the courts can take judicial notice of.
—The Management Contract entered into by petitioner and the
PPA is clearly not among the matters which the courts can take
judicial notice of. It cannot be considered an official act of the
executive department. The PPA, which was created by virtue of
Presidential Decree No. 857, as amended, is a government­owned
and controlled

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

corporation in charge of administering the ports in the country.

Obviously, the PPA was only performing a proprietary function
when it entered into a Management Contract with petitioner. As
such, judicial notice cannot be applied.
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PETITION for review on certiorari of the decision and

resolution of the Court of Appeals.
   The facts are stated in the opinion of the Court.
  Cruz, Capule, Marcon & Nabaza Law Offices for
petitioner.
  Tumangan, Payumo & Partners for respondent.

DEL CASTILLO, J.:

Once the insurer pays the insured, equity demands
reimbursement as no one should benefit at the expense of
another.
This Petition for Review on Certiorari1 under Rule 45 of
the Rules of Court assails the July 14, 2005 Decision2 and
the February 14, 2006 Resolution3 of the Court of Appeals
(CA) in CA­G.R. CV No. 61798.
Fa ctua l Antecedents
On November 14, 1995, Shandong Weifang Soda Ash
Plant shipped on board the vessel MV “Jinlian I” 60,000
plastic bags of soda ash dense (each bag weighing 50
kilograms) from China to Manila.4 The shipment, with an
invoice value of US$456,000.00, was insured with
respondent Malayan Insurance Company, Inc. under
Marine Risk Note No. RN­0001­21430, and covered by a
Bill of Lading issued by Tianjin

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1 Rollo, pp. 8­149, with Annexes “A” to “M” inclusive.

2  Id., at pp. 26­37; penned by Associate Justice Rosalinda Asuncion­
Vicente and concurred in by Associate Justices Godardo A. Jacinto and
Bienvenido L. Reyes.
3 Id., at pp. 46­47.
4 Id., at p. 27.

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

Navigation Company with Philippine Banking Corporation

as the consignee and Chemphil Albright and Wilson
Corporation as the notify party.5
On November 21, 1995, upon arrival of the vessel at Pier
9, South Harbor, Manila,6 the stevedores of petitioner
Asian Terminals, Inc., a duly registered domestic
corporation engaged in providing arrastre and stevedoring
services,7 unloaded the 60,000 bags of soda ash dense from
the vessel and brought them to the open storage area of
petitioner for temporary storage and safekeeping, pending
clearance from the Bureau of Customs and delivery to the
consignee.8 When the unloading of the bags was completed

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on November 28, 1995, 2,702 bags were found to be in bad

order condition.9
On November 29, 1995, the stevedores of petitioner
began loading the bags in the trucks of MEC Customs
Brokerage for transport and delivery to the consignee.10 On
December 28, 1995, after all the bags were unloaded in the
warehouses of the consignee, a total of 2,881 bags were in
bad order condition due to spillage, caking, and hardening
of the contents.11
On April 19, 1996, respondent, as insurer, paid the value
of the lost/damaged cargoes to the consignee in the amount
of P643,600.25.12
Ruling of the Regiona l Tria l Court
On November 20, 1996, respondent, as subrogee of the
consignee, filed before the Regional Trial Court (RTC) of
Manila, Branch 35, a Complaint13 for damages against
petitioner, the

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5  Id.
6  Records, p. 134.
7  Rollo, p. 9.
8  Records, pp. 134­135.
9  Rollo, p. 28.
10 Records, pp. 135­136.
11 Id.
12 Rollo, p. 28.
13 Id., at pp. 49­55.

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

shipper Inchcape Shipping Services, and the cargo broker

MEC Customs Brokerage.14
After the filing of the Answers,15 trial ensued.
On June 26, 1998, the RTC rendered a Decision16
finding petitioner liable for the damage/loss sustained by
the shipment but absolving the other defendants. The RTC
found that the proximate cause of the damage/loss was the
negligence of petitioner’s stevedores who handled the
unloading of the cargoes from the vessel.17 The RTC
emphasized that despite the admonitions of Marine Cargo
Surveyors Edgar Liceralde and Redentor Antonio not to
use steel hooks in retrieving and picking­up the bags,
petitioner’s stevedores continued to use such tools, which
pierced the bags and caused the spillage.18 The RTC, thus,
ruled that petitioner, as employer, is liable for the acts and
omissions of its stevedores under Articles 217619 and 2180

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paragraph (4)20 of the Civil Code.21 Hence, the dispositive

portion of the Decision reads:

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14 Id., at p. 28.
15 Records, pp. 19­23, 24­30, and 31­35.
16 Rollo, pp. 38­44; penned by Judge Ramon P. Makasiar.
17 Id., at p. 39.
18 Id., at pp. 39­43.
19 Art. 2176. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage done.
Such fault or negligence, if there is no pre­existing contractual relation
between the parties, is called a quasi­delict and is governed by the
provisions of this Chapter.
20  Art. 2180. The obligation imposed by article 2176 is demandable
not only for one’s own acts or omissions, but also for those of persons for
whom one is responsible.
x x x x
Employers shall be liable for the damages caused by their employees
and household helpers acting within the scope of their assigned tasks,
even though the former are not engaged in any business or industry.
x x x x
21 Rollo, p. 43.

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

“WHEREFORE, judgment is rendered ordering defendant

Asian Terminal, Inc. to pay plaintiff Malayan Insurance
Company, Inc. the sum of P643,600.25 plus interest thereon at
legal rate computed from November 20, 1996, the date the
Complaint was filed, until the principal obligation is fully paid,
and the costs.
The complaint of the plaintiff against defendants Inchcape
Shipping Services and MEC Customs Brokerage, and the
counterclaims of said defendants against the plaintiff are
dismissed.
SO ORDERED.”22

Ruling of the Court of Appea ls

Aggrieved, petitioner appealed23 to the CA but the
appeal was denied. In its July 14, 2005 Decision, the CA
agreed with the RTC that the damage/loss was caused by
the negligence of petitioner’s stevedores in handling and
storing the subject shipment.24 The CA likewise rejected
petitioner’s assertion that it received the subject shipment
in bad order condition as this was belied by Marine Cargo
Surveyors Redentor Antonio and Edgar Liceralde, who both
testified that the actual counting of bad order bags was
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done only after all the bags were unloaded from the vessel
and that the Turn Over Survey of Bad Order Cargoes
(TOSBOC) upon which petitioner anchors its defense was
prepared only on November 28, 1995 or after the unloading
of the bags was completed.25 Thus, the CA disposed of the
appeal as follows:

“WHEREFORE, premises considered, the appeal is DENIED.

The assailed Decision dated June 26, 1998 of the Regional Trial
Court of Manila, Branch 35, in Civil Case No. 96­80945 is hereby
AFFIRMED in all respects.
SO ORDERED.”26

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22 Id., at p. 44.
23 Id., at pp. 115­136.
24 Id., at p. 36.
25 Id., at pp. 30­34.
26 Id., at p. 36.

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

Petitioner moved for reconsideration27 but the CA

denied the same in a Resolution28  dated February 14, 2006
for lack of merit.

Issues

Hence, the present recourse, petitioner contending that:

1. RESPONDENT­INSURER IS NOT ENTITLED TO THE RELIEF

GRANTED AS IT FAILED TO ESTABLISH ITS CAUSE OF
ACTION AGAINST HEREIN PETITIONER SINCE, AS THE
ALLEGED SUBROGEE, IT NEVER PRESENTED ANY VALID,
EXISTING, ENFORCEABLE INSURANCE POLICY OR ANY
COPY THEREOF IN COURT.
2. THE HONORABLE COURT OF APPEALS ERRED WHEN IT
OVERLOOKED THE FACT THAT THE TOSBOC & RESBOC
WERE ADOPTED AS COMMON EXHIBITS BY BOTH
PETITIONER AND RESPONDENT.
3. CONTRARY TO TESTIMONIAL EVIDENCE ON RECORD,
VARIOUS DOCUMENTATIONS WOULD POINT TO THE
VESSEL’S LIABILITY AS THERE IS, IN THIS INSTANT CASE,
AN OVERWHELMING DOCUMENTARY EVIDENCE TO
PROVE THAT THE DAMAGE IN QUESTION WERE
SUSTAINED WHEN THE SHIPMENT WAS IN THE CUSTODY
OF THE VESSEL.

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4. THE HONORABLE COURT OF APPEALS ERRED WHEN IT

ADJUDGED HEREIN DEFENDANT LIABLE DUE TO [THE]
FACT THAT THE TURN OVER SURVEY OF BAD ORDER
CARGOES (TOSBOC) WAS PREPARED ONLY AFTER THE
COMPLETION OF THE DISCHARGING OPERATIONS OR ON
NOVEMBER 28, 1995. THUS, CONCLUDING THAT DAMAGE
TO THE

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27 Id., at pp. 137­148.

28 Id., at p. 47.

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CARGOES WAS DUE TO THE IMPROPER HANDLING

THEREOF BY ATI STEVEDORES.
5. THE HONORABLE COURT OF APPEALS ERRED IN NOT
TAKING JUDICIAL NOTICE OF THE CONTRACT FOR CARGO
HANDLING SERVICES BETWEEN PPA AND ATI AND
APPLYING THE PERTINENT PROVISIONS THEREOF AS
REGARDS ATI’S LIABILITY.29

In sum, the issues are: (1) whether the non­presentation

of the insurance contract or policy is fatal to respondent’s
cause of action; (2) whether the proximate cause of the
damage/loss to the shipment was the negligence of
petitioner’s stevedores; and (3) whether the court can take
judicial notice of the Management Contract between
petitioner and the Philippine Ports Authority (PPA) in
determining petitioner’s liability.
Petitioner’s Arguments
Petitioner contends that respondent has no cause of
action because it failed to present the insurance contract or
policy covering the subject shipment.30 Petitioner argues
that the Subrogation Receipt presented by respondent is
not sufficient to prove that the subject shipment was
insured and that respondent was validly subrogated to the
rights of the consignee.31 Thus, petitioner submits that
without proof of a valid subrogation, respondent is not
entitled to any reimbursement.32
Petitioner likewise puts in issue the finding of the RTC,
which was affirmed by the CA, that the proximate cause of
the damage/loss to the shipment was the negligence of
petitioner’s stevedores.33 Petitioner avers that such finding
is

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29 Id., at p. 261.
30 Id., at pp. 262­268.
31 Id., at p. 262.
32 Id., at p. 268.
33 Id., at p. 270.

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contrary to the documentary evidence, i.e., the TOSBOC,

the Request for Bad Order Survey (RESBOC) and the
Report of Survey.34 According to petitioner, these
documents prove that it received the subject shipment in
bad order condition and that no additional damage was
sustained by the subject shipment under its custody.35
Petitioner asserts that although the TOSBOC was
prepared only after all the bags were unloaded by
petitioner’s stevedores, this does not mean that the
damage/loss was caused by its stevedores.36
Petitioner also claims that the amount of damages
should not be more than P5,000.00, pursuant to its
Management Contract for cargo handling services with the
PPA.37 Petitioner contends that the CA should have taken
judicial notice of the said contract since it is an official act
of an executive department subject to judicial cognizance.38
Respondent’s Arguments
Respondent, on the other hand, argues that the non­
presentation of the insurance contract or policy was not
raised in the trial court. Thus, it cannot be raised for the
first time on appeal.39 Respondent likewise contends that
under prevailing jurisprudence, presentation of the insu­
rance policy is not indispensable.40 Moreover, with or
without the insurance contract or policy, respondent claims
that it should be allowed to recover under Article 123641 of
the Civil

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34 Id., at pp. 268­286.

35 Id.
36 Id., at pp. 283­286.
37 Id., at p. 290.
38 Id.
39 Id., at p. 247.
40 Id., at p. 250.
41  Art. 1236. The creditor is not bound to accept payment or
performance by a third person who has no interest in the fulfillment of the
obligation, unless there is a stipulation to the contrary.

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Code.42 Respondent further avers that “the right of

subrogation has its roots in equity—it is designed to
promote and to accomplish justice and is the mode which
equity adopts to compel the ultimate payment of a debt by
one who in justice, equity and good conscience ought to
pay.”43
Respondent likewise maintains that the RTC and the
CA correctly found that the damage/loss sustained by the
subject shipment was caused by the negligent acts of
petitioner’s stevedores.44 Such factual findings of the RTC,
affirmed by the CA, are conclusive and should no longer be
disturbed.45 In fact, under Section 146 of Rule 45 of the
Rules of Court, only questions of law may be raised in a
petition for review on certiorari.47
As to the Management Contract for cargo handling
services, respondent contends that this is outside the
operation

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Whoever pays for another may demand from the debtor what he has
paid, except that if he paid without the knowledge or against the will of
the debtor, he can recover only insofar as the payment has been beneficial
to the debtor.
42 Rollo, p. 251­252.
43 Id., at p. 253.
44 Id., at pp. 242­244.
45 Id., at p. 241.
46  Section 1. Filing of petition with Supreme Court.—A party
desiring to appeal by certiorari from a judgment, final order or resolution
of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the
Regional Trial Court or other courts, whenever authorized by law, may file
with the Supreme Court a verified petition for review on certiorari. The
petition may include an application for a writ of preliminary injunction or
other provisional remedies and shall raise only questions of law, which
must be distinctly set forth. The petitioner may seek the same provisional
remedies by verified motion filed in the same action or proceeding at any
time during its pendency.
47 Rollo, pp. 245­246.

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of judicial notice.48 And even if it is not, petitioner’s

liability cannot be limited by it since it is a contract of
adhesion.49

Our Ruling

The petition is bereft of merit.

Non­presenta tion of the insura nce
contra ct or policy is not fa ta l in the
insta nt ca se
Petitioner claims that respondent’s non­presentation of
the insurance contract or policy between the respondent
and the consignee is fatal to its cause of action.
We do not agree.
First of all, this was never raised as an issue before the
RTC. In fact, it is not among the issues agreed upon by the
parties to be resolved during the pre­trial.50 As we have
said,

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48 Id., at pp. 238­240.

49 Id., at pp. 240­241.
50  III. ISSUES
1. Whether x  x  x the defendants are liable to pay the plaintiff the
amount of US$456,000.00 representing the amount which plaintiff paid to
the consignee;
2. What is the extent of the damages sustained by the subject shipment?
3. Which of the defendants is liable to plaintiff for the alleged damages
and the extent of liability?
4. Is the package limitation contract applicable in the instant case?
5. Under the Carriage of Goods by Sea [Act] (COGSA), is defendant
Inchcape exempted from damages by virtue of the defense like insufficient
packing, the very nature of the shipment.
6. Is the defendant Inchcape liable for any damage which may have
arisen after the cargo was discharged from the ves­

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“the determination of issues during the pre­trial conference

bars the consideration of other questions, whether during
trial or on appeal.”51 Thus, “[t]he parties must disclose
during pre­trial all issues they intend to raise during the
trial, except those involving privileged or impeaching
matters. x  x  x The basis of the rule is simple. Petitioners
are bound by the delimitation of the issues during the pre­
trial because they themselves agreed to the same.”52
Neither was this issue raised on appeal.53 Basic is the
rule that “issues or grounds not raised below cannot be
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resolved on review by the Supreme Court, for to allow the

parties to raise new issues is antithetical to the sporting
idea of fair play, justice and due process.”54

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sel’s hold or ship’s docket in the case of Ludo v. Binamira, 101 Phil. 120;
7. Whether x  x  x defendant MEC broker had something to do with the
unloading of the cargo from the carrier up to the terminal;
8. Whether x x x defendant MEC had any participation in the unloading
of the cargo to the warehouse or the place of the consignee;
9. Whether x x x the alleged loss or damages to the cargo occurred while
the shipper was in transit or after it was unloaded from the carrier;
10. Whether x  x  x defendants ATI, Inchcape and MEC are entitled to
any form of damages, specifically the attorney’s fees. (Id., at pp. 66­67).
51 Villanueva v. Court of Appeals, 471 Phil. 394, 406; 427 SCRA 439,
447 (2004).
52 Id., at p. 407; p. 447.
53 Rollo, p. 121.
54  Cuenco v. Talisay Tourist Sports Complex, Incorporated, G.R. No.
174154, July 30, 2009, 594 SCRA 396, 399­400.

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Besides, non­presentation of the insurance contract or

policy is not necessarily fatal.55 In Delsan Transport Lines,
Inc. v. Court of Appeals,56 we ruled that:

“Anent the second issue, it is our view and so hold that the
presentation in evidence of the marine insurance policy is
not indispensable in this case before the insurer may
recover from the common carrier the insured value of the
lost cargo in the exercise of its subrogatory right. The
subrogation receipt, by itself, is sufficient to establish not
only the relationship of herein private respondent as
insurer and Caltex, as the assured shipper of the lost cargo
of industrial fuel oil, but also the amount paid to settle the
insurance claim. The right of subrogation accrues simply
upon payment by the insurance company of the insurance
claim.
The presentation of the insurance policy was necessary in the
case of Home Insurance Corporation v. CA (a case cited by
petitioner) because the shipment therein (hydraulic engines)
passed through several stages with different parties involved in
each stage. First, from the shipper to the port of departure;
second, from the port of departure to the M/S Oriental Statesman;
third, from the M/S Oriental Statesman to the M/S Pacific
Conveyor; fourth, from the M/S Pacific Conveyor to the port of
arrival; fifth, from the port of arrival to the arrastre operator;
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sixth, from the arrastre operator to the hauler, Mabuhay

Brokerage Co., Inc. (private respondent therein); and lastly, from
the hauler to the consignee. We emphasized in that case that in
the absence of proof of stipulations to the contrary, the hauler can
be liable only for any damage that occurred from the time it
received the cargo until it finally delivered it to the consignee.
Ordinarily, it cannot be held responsible for the handling of the
cargo before it actually received it. The insurance contract, which
was not presented in evidence in that case would have indicated
the scope of the insurer’s liability, if any, since no evidence was

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55 Eastern Shipping Lines, Inc. v. Prudential Guarantee and Assurance, Inc.,

G.R. No. 174116, September 11, 2009, 599 SCRA 565, 581.
56 420 Phil. 824; 369 SCRA 24 (2001).

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adduced indicating at what stage in the handling process the

damage to the cargo was sustained.”57 (Emphasis supplied.)

In International Container Terminal Services, Inc. v.

FGU Insurance Corporation,58 we used the same line of
reasoning in upholding the Decision of the CA finding the
arrastre contractor liable for the lost shipment despite the
failure of the insurance company to offer in evidence the
insurance contract or policy. We explained:

“Indeed, jurisprudence has it that the marine insurance policy

needs to be presented in evidence before the trial court or even
belatedly before the appellate court. In Malayan Insurance Co.,
Inc. v. Regis Brokerage Corp., the Court stated that the
presentation of the marine insurance policy was necessary, as the
issues raised therein arose from the very existence of an
insurance contract between Malayan Insurance and its consignee,
ABB Koppel, even prior to the loss of the shipment. In Wallem
Philippines Shipping, Inc. v. Prudential Guarantee and
Assurance, Inc., the Court ruled that the insurance contract must
be presented in evidence in order to determine the extent of the
coverage. This was also the ruling of the Court in Home Insurance
Corporation v. Court of Appeals.
However, as in every general rule, there are admitted
exceptions. In Delsan Transport Lines, Inc. v. Court of Appeals,
the Court stated that the presentation of the insurance policy was
not fatal because the loss of the cargo undoubtedly occurred while
on board the petitioner’s vessel, unlike in Home Insurance in
which the cargo passed through several stages with different
parties and it could not be determined when the damage to the
cargo occurred, such that the insurer should be liable for it.
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As in Delsan, there is no doubt that the loss of the cargo in the

present case occurred while in petitioner’s custody. Moreover,
there is no issue as regards the provisions of Marine Open Policy
No. MOP­12763, such that the presentation of the contract itself
is necessary for perusal, not to mention that its existence was
already admitted by petitioner in open court. And even though it
was not

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57 Id., at pp. 835­836; pp. 34­35.

58 G.R. No. 161539, June 27, 2008, 556 SCRA 194.

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

offered in evidence, it still can be considered by the court as long

as they have been properly identified by testimony duly recorded
and they have themselves been incorporated in the records of the
case.”59

Similarly, in this case, the presentation of the insurance

contract or policy was not necessary. Although petitioner
objected to the admission of the Subrogation Receipt in its
Comment to respondent’s formal offer of evidence on the
ground that respondent failed to present the insurance
contract or policy,60 a perusal of petitioner’s Answer61 and
Pre­Trial Brief62 shows that petitioner never questioned
respon­

_______________

59 Id., at pp. 203­204.

60 Rollo, p. 208.
61 SPECIAL AND AFFIRMATIVE DEFENSES
1. Defendant ATI, by way of Special and Affirmative Defenses, reiterates
and repleads all the foregoing.
2. Plaintiff has no cause of action against defendant ATI because the
latter was not negligent in the performance of its duty as an arrastre
operator.
3. As evidenced by the Turn Over Survey of Bad Order Cargoes, the
subject shipment arrived and was discharged unto the custody of
defendant ATI in bad order condition.
4. The subject shipment was released/withdrawn from the custody of
defendant ATI in exactly the same quantity and condition as when
discharged from the carrying vessel. Hence, any alleged loss or damage is
no longer the liability of defendant ATI.
5. Under Section 7.01 of Article VII of the Management Contract
between the Philippine Port[s] Authority and defendant ATI (formerly
Manila Ports Services, Inc.), the liability of the latter in case of loss,

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damage or non­delivery of cargoes in its custody and control shall be

limited to PESOS FIVE THOUSAND ONLY (P5,000.00). (Id., at p. 57).
62 IV. ISSUES
ATI submits that the issues to be resolved by this Honorable Court are
the following:
1. What is the extent of the damages sustained by the subject
shipment?
2. Which of the defendants is liable for the damages?

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

dent’s right to subrogation, nor did it dispute the coverage

of the insurance contract or policy. Since there was no issue
regarding the validity of the insurance contract or policy, or
any provision thereof, respondent had no reason to present
the insurance contract or policy as evidence during the
trial.
Fa ctua l findings of the CA, a ffirming
the RTC, a re conclusive a nd binding
Petitioner’s attempt to absolve itself from liability must
likewise fail.
Only questions of law are allowed in petitions for review
on certiorari under Rule 45 of the Rules of Court. Thus, it is
not our duty “to review, examine, and evaluate or weigh all
over again the probative value of the evidence presented,”63
especially where the findings of both the trial court and the
appellate court coincide on the matter.64 As we have often
said, factual findings of the CA affirming those of the RTC
are conclusive and binding, except in the following cases:
“(1) when the inference made is manifestly mistaken,
absurd or impossible; (2) when there is grave abuse of
discretion; (3) when the findings are grounded entirely on
speculations, surmises or conjectures; (4) when the
judgment of the [CA] is based on misapprehension of facts;
(5) when the [CA], in making its findings, went beyond the
issues of the case and the same is contrary to the
admissions of both appellant and appellee; (6) when the
findings of fact are conclusions without citation of specific
evidence on which they are based; (7) when the [CA]
manifestly overlooked certain relevant facts not disputed
by the parties and which, if properly considered,

_______________

3. Assuming that ATI is liable for the damages up to how much may it
be held liable? (Records, p. 42)
63  Puno v. Puno Enterprises, Inc., G.R. No. 177066, September 11,
2009, 599 SCRA 585, 590.

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64 Dueñas v. Guce­Africa, G.R. No. 165679, October 5, 2009, 603 SCRA

11, 20.

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

would justify a different conclusion; and (8) when the

findings of fact of the [CA] are premised on the absence of
evidence and are contradicted by the evidence on record.”65
None of these are availing in the present case.
Both the RTC and the CA found the negligence of
petitioner’s stevedores to be the proximate cause of the
damage/loss to the shipment. In disregarding the
contention of petitioner that such finding is contrary to the
documentary evidence, the CA had this to say:

“ATI, however, contends that the finding of the trial court was
contrary to the documentary evidence of record, particularly, the
Turn Over Survey of Bad Order Cargoes dated November 28,
1995, which was executed prior to the turn­over of the cargo by
the carrier to the arrastre operator ATI, and which showed that
the shipment already contained 2,702 damaged bags.
We are not persuaded.
Contrary to ATI’s assertion, witness Redentor Antonio,
marine cargo surveyor of Inchcape for the vessel Jinlian I which
arrived on November 21, 1995 and up to completion of
discharging on November 28, 1995, testified that it was only
after all the bags were unloaded from the vessel that the
actual counting of bad order bags was made, thus:
x x x x
The above testimony of Redentor Antonio was
corroborated by Edgar Liceralde, marine cargo surveyor
connected with SMS Average Surveyors and Adjusters, Inc., the
company requested by consignee Chemphil Albright and Wilson
Corporation to provide superintendence, report the condition and
determine the final outturn of quantity/weight of the subject
shipment. x x x
x x x x
Defendant­appellant ATI, for its part, presented its claim
officer as witness who testified that a survey was conducted by
the shipping company and ATI before the shipment was turned
over to

_______________

65 Id., at pp. 20­21.

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

the possession of ATI and that the Turn Over Survey of Bad
Order Cargoes was prepared by ATI’s Bad Order (BO) Inspector.
Considering that the shipment arrived on November 21,
1998 and the unloading operation commenced on said date
and was completed on November 26, 1998, while the Turn
Over Survey of Bad Order Cargoes, reflecting a figure of
2,702 damaged bags, was prepared and signed on
November 28, 1998 by ATI’s BO Inspector and co­signed by a
representative of the shipping company, the trial court’s
finding that the damage to the cargoes was due to the
improper handling thereof by ATI’s stevedores cannot be
said to be without substantial support from the records.
We thus see no cogent reason to depart from the ruling of the
trial court that ATI should be made liable for the 2,702 bags of
damaged shipment. Needless to state, it is hornbook doctrine that
the assessment of witnesses and their testimonies is a matter best
undertaken by the trial court, which had the opportunity to
observe the demeanor, conduct or attitude of the witnesses. The
findings of the trial court on this point are accorded great respect
and will not be reversed on appeal, unless it overlooked
substantial facts and circumstances which, if considered, would
materially affect the result of the case.
We also find ATI liable for the additional 179 damaged bags
discovered upon delivery of the shipment at the consignee’s
warehouse in Pasig. The final Report of Survey executed by SMS
Average Surveyors & Adjusters, Inc., and independent surveyor
hired by the consignee, shows that the subject shipment incurred
a total of 2881 damaged bags.
The Report states that the withdrawal and delivery of the
shipment took about ninety­five (95) trips from November 29,
1995 to December 28, 1995 and it was upon completion of the
delivery to consignee’s warehouse where the final count of 2881
damaged bags was made. The damage consisted of torn/bad order
condition of the bags due to spillages and caked/hardened
portions.
We agree with the trial court that the damage to the shipment
was caused by the negligence of ATI’s stevedores and for which
ATI is liable under Articles 2180 and 2176 of the Civil Code. The
proximate cause of the damage (i.e., torn bags, spillage of contents
and

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

caked/hardened portions of the contents) was the improper

handling of the cargoes by ATI’s stevedores, x x x
x x x x

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ATI has not satisfactorily rebutted plaintiff­appellee’s evidence

on the negligence of ATI’s stevedores in the handling and
safekeeping of the cargoes. x x x
x x x x
We find no reason to disagree with the trial court’s conclusion.
Indeed, from the nature of the [damage] caused to the shipment,
i.e., torn bags, spillage of contents and hardened or caked portions
of the contents, it is not difficult to see that the damage caused
was due to the negligence of ATI’s stevedores who used steel
hooks to retrieve the bags from the higher portions of the piles
thereby piercing the bags and spilling their contents, and who
piled the bags in the open storage area of ATI with insufficient
cover thereby exposing them to the elements and [causing] the
contents to cake or harden.”66

Clearly, the finding of negligence on the part of

petitioner’s stevedores is supported by both testimonial and
documentary evidence. Hence, we see no reason to disturb
the same.
J udicia l notice does not a pply
Finally, petitioner implores us to take judicial notice of
Section 7.01,67 Article VII of the Management Contract for
cargo

_______________

66 Rollo, pp. 30­36.

67 Section 7.01 Responsibility and Liability for Losses and Damages;
Exceptions.—The Contractor shall, at its own expense, handle all
merchandise in all work undertaken by it hereunder, diligently and in a
skillful, workman­like and efficient manner. The Contractor shall be
solely responsible as an independent contractor, and hereby agrees to
accept liability and to pay to the shipping company, consignees, consignors
or other interested party or parties for the loss, damage or non­delivery of
cargoes in its custody and control to the extent of the actual invoice value
of each package which in no case shall be more than FIVE THOUSAND
PESOS (P5,000.00) each, unless the value of the cargo shipment is
otherwise specified or manifested or communicated in writing together
with the declared

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130 SUPREME COURT REPORTS ANNOTATED

Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

handling services it entered with the PPA, which limits

petitioner’s liability to P5,000.00 per package.
Unfortunately for the petitioner, it cannot avail of
judicial notice.
Sections 1 and 2 of Rule 129 of the Rules of Court
provide that:

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“SECTION 1. Judicial notice, when mandatory.—A court

shall take judicial notice, without the introduction of evidence, of
the existence and territorial extent of states, their political
history, forms of government and symbols of nationality, the law
of nations, the admiralty and maritime courts of the world and
their seals, the political constitution and history of the
Philippines, the official acts of the legislative, executive and
judicial departments of the Philippines, the laws of nature, the
measure of time, and the geographical divisions.
SEC. 2. Judicial notice, when discretionary.—A court may
take judicial notice of matters which are of public knowledge, or
are capable of unquestionable demonstration or ought to be
known to judges because of their judicial functions.”

The Management Contract entered into by petitioner

and the PPA is clearly not among the matters which the
courts can take judicial notice of. It cannot be considered
an official act of the executive department. The PPA, which
was created by virtue of Presidential Decree No. 857, as
amended,68 is a government­owned and controlled
corporation in charge of administering the ports in the
country.69 Obviously, the PPA

_______________

Bill of Lading value and supported by a certified packing list to the

Contractor by the interested party or parties before the discharge or
loading unto vessel of the goods.

x x x
68 REVISED CHARTER OF THE PHILIPPINE PORTS AUTHORITY. Promulgated on
December 23, 1975.
69 SECTION 6. Corporate Powers and Duties.—
a) The corporate duties of the Authority shall be:
x x x x

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Asian Terminals, Inc. vs. Malayan Insurance Co., Inc.

was only performing a proprietary function when it entered

into a Management Contract with petitioner. As such,
judicial notice cannot be applied.
WHEREFORE, the petition is hereby DENIED. The
assailed July 14, 2005 Decision and the February 14, 2006
Resolution of the Court of Appeals in CA­G.R. CV No.
61798 are hereby AFFIRMED.
SO ORDERED.

Corona (C.J., Chairperson), Velasco, Jr., Leonardo­De

Castro and Perez, JJ., concur.
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Petition denied, judgment and resolution affirmed.

Note.—Stipulation in the bill of lading limiting

respondent’s liability for the loss of the subject cargoes is
allowed under Article 1749 of the Civil Code, and Sec. 4,
paragraph (5) of the Carriage of Goods by Sea Act
(COGSA). (Philippine Charter Insurance Corporation vs.
Neptune Orient Lines/
Overseas Agency Services, Inc., 554 SCRA 335 [2008])
——o0o——

_______________

(ii) To supervise, control, regulate, construct, maintain, operate, and

provide such facilities or services as are necessary in the ports vested in,
or belonging to the Authority.
x x x x
b) The corporate powers of the Authority shall be as follows:
x x x x
(vi) To make or enter [into] contracts of any kind or nature to enable
it to discharge its functions under this Decree.
x x x x.

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