G.R. No. 201822.  August 12, 2015.

*
 
**
MARINA PORT SERVICES, INC.,   petitioner,  vs. AMERICAN HOME ASSURANCE
CORPORATION, respondent.

Remedial Law; Civil Procedure; Appeals; Petition for Review on Certiorari; It is evident that
the resolution of the instant case requires the scrutiny of factual issues which are, however,
outside the scope of the present petition filed pursuant to Rule 45 of the Rules of Court.—At the
outset, it is evident that the resolution of the instant case requires the scrutiny of factual
issues which are, however, outside the scope of the present petition filed pursuant to Rule 45
of the Rules of Court. However, the Court held in Asian Terminals, Inc. v. Philam Insurance
Co., Inc., 702 SCRA 88 (2013), that: But while it is not our duty to review, examine and
evaluate or weigh all over again the probative value of the evidence presented, the Court may
nonetheless resolve questions of fact when the case falls under any of the following exceptions:
(1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when
the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when
the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went
beyond the issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8)
when the findings are conclusions without citation of specific evidence on which they are
based; (9) when the facts set forth in the petition as well as in the petitioner’s main and reply
briefs are not disputed by the respondent; and (10) when the findings of fact are premised on
the supposed absence of evidence and contradicted by the evidence on record. The Court finds
that the instant case falls under the aforementioned second, fourth, fifth, and seventh
exceptions. Hence, it shall proceed to delve into factual matters essential to the proper
determination of the merits of this case.

_______________

*  SECOND DIVISION.
**  Now known as Asian Terminals, Inc.

 
 
409

VOL. 766, AUGUST 12, 2015 409

Marina Port Services, Inc. vs. American Home
Assurance Corporation

Mercantile Law; Common Carriers; Warehouse Receipts Act; Arrastre Operators; An arrastre operator
should adhere to the same degree of diligence as that legally expected of a warehouseman or a common
carrier as set forth in Section 3[b] of the Warehouse Receipts Act and Article 1733 of the Civil Code.—The
relationship between an arrastre operator and a consignee is similar to that between a warehouseman
and a depositor, or to that between a common carrier and the consignee and/or the owner of the shipped
goods. Thus, an arrastre operator should adhere to the same degree of diligence as that legally expected
of a warehouseman or a common carrier as set forth in Section 3[b] of the Warehouse Receipts [Act] and
Article 1733 of the Civil Code. As custodian of the shipment discharged from the vessel, the arrastre
operator must take good care of the same and turn it over to the party entitled to its possession.
Same; Same; Same; Same; In case of claim for loss filed by a consignee or the insurer as subrogee, it
is the arrastre operator that carries the burden of proving compliance with the obligation to deliver the
goods to the appropriate party.—In case of claim for loss filed by a consignee or the insurer as subrogee,
it is the arrastre operator that carries the burden of proving compliance with the obligation to deliver the
goods to the appropriate party. It must show that the losses were not due to its negligence or that of its
employees. It must establish that it observed the required diligence in handling the shipment.
Otherwise, it shall be presumed that the loss was due to its fault. In the same manner, an arrastre
operator shall be liable for damages if the seal and lock of the goods deposited and delivered to it as
closed and sealed, be broken through its fault. Such fault on the part of the arrastre operator is likewise
presumed unless there is proof to the contrary.
Same; Same; Same; Same; As held in International Container Terminal Services, Inc. v. Prudential
Guarantee & Assurance Co., Inc., 320 SCRA 244 (1999), the signature of the consignee’s representative on
the gate pass is evidence of receipt of the shipment in good order and condition.—As held in International
Container Terminal Services, Inc. v. Prudential Guarantee & Assurance Co., Inc., 320 SCRA 244 (1999),
the signature of the consignee’s representative on the gate pass is evidence of receipt of the shipment in
good order and condition. Also, that MPSI delivered the subject shipment to MSC’s representative in
good and complete condition and with lock and

 
 
410

410 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation

seals intact is established by the testimonies of MPSI’s employees who were directly involved in the
processing of the subject shipment. Mr. Ponciano De Leon testified that as MPSI’s delivery checker, he
personally examined the subject container vans and issued the corresponding gate passes that were, in
turn, countersigned by the consignee’s representative. MPSI’s other witness, Chief Claims Officer Sergio
Icasiano (Icasiano), testified that the broker, as the consignee’s representative, neither registered any
complaints nor requested for an inspection.
Remedial Law; Evidence; Hearsay Evidence Rule; It is a basic rule that evidence, whether oral or
documentary, is hearsay, if its probative value is not based on the personal knowledge of the witness but
on the knowledge of another person who is not on the witness stand.—The person who prepared the said
report was not presented in court to testify on the same. Thus, the said survey report has no probative
value for being hearsay. “It is a basic rule that evidence, whether oral or documentary, is hearsay, if its
probative value is not based on the personal knowledge of the witness but on the knowledge of another
person who is not on the witness stand.” Moreover, “an unverified and unidentified private document
cannot be accorded probative value. It is precluded because the party against whom it is presented is
deprived of the right and opportunity to cross-examine the person to whom the statements or writings
are attributed. Its executor or author should be presented as a witness to provide the other party to the
litigation the opportunity to question its contents. Being mere hearsay evidence, failure to present the
author of the letter renders its contents suspect and of no probative value.”
Mercantile Law; Common Carriers; Shipper’s Load and Count; Marina Port Services, Inc. (MPSI)
cannot just the same be held liable for the missing bags of flour since the consigned goods were shipped
under “Shipper’s Load and Count” arrangement. This means that the shipper was solely responsible for
the loading of the container, while the carrier was oblivious to the contents of the shipment. Protection
against pilferage of the shipment was the consignee’s lookout.—MPSI cannot just the same be held liable
for the missing bags of flour since the consigned goods were shipped under “Shipper’s Load and Count”
arrangement. “This means that the shipper was solely responsible for the loading of the container, while
the carrier was oblivious to the contents of the shipment. Protection against pilferage of the ship-

 
 
411
 VOL. 766, AUGUST 12, 2015 411
Marina Port Services, Inc. vs. American Home
Assurance Corporation

ment was the consignee’s lookout. The arrastre operator was, like any ordinary depositary, duty-
bound to take good care of the goods received from the vessel and to turn the same over to the party
entitled to their possession, subject to such qualifications as may have validly been imposed in the
contract between the parties. The arrastre operator was not required to verify the contents of the
container received and to compare them with those declared by the shipper because, as earlier stated,
the cargo was at the shipper’s load and count. The arrastre operator was expected to deliver to the
consignee only the container received from the carrier.”

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.
  Poblador, Bautista and Reyes for petitioner.
  Leaño, Leaño and Leaño III Law Office for respondent.

DEL CASTILLO,  J.:

 
This Petition for Review on  Certiorari1  filed pursuant to Rule 45 of the Rules of Court
assails the December 29, 2011 Decision2 and May 8, 2012 Resolution3 of the Court of Appeals
(CA) in C.A.-G.R. CV No. 88321, which granted the appeal filed therein by respondent
American Home Assurance Corporation (AHAC) and reversed and set aside the October 17,
2006 Decision4 of the Regional Trial Court (RTC), Pasig City, Branch 271 dismissing AHAC’s
Complaint5 for Damages against petitioner Marina Port Services, Inc. (MPSI).

_______________

1  Rollo, pp. 23-185, inclusive of Annexes “A” to “U.”

2  CA Rollo, pp. 86-95; penned by Associate Justice Manuel M. Barrios and concurred in by Associate Justices Juan
Q. Enriquez, Jr. and Apolinario D. Bruselas, Jr.
3  Id., at pp. 121-122.
4  Records, pp. 257-279; penned by Assisting Judge Paz Espe­ranza M. Cortes.
5  Id., at pp. 1-2.

 
 
412

412 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation

Factual Antecedents
On September 21, 1989, Countercorp Trading PTE., Ltd., shipped from Singapore to the
Philippines 10 container vans of soft wheat flour with seals intact onboard the vessel M/V Uni
Fortune. The shipment was insured against all risks by AHAC and consigned to MSC
Distributor (MSC).
Upon arrival at the Manila South Harbor on September 25, 1989, the shipment was
discharged in good and complete order condition and with safety seals in place to the custody
of the arrastre operator, MPSI. After unloading and prior to hauling, agents of the Bureau of
Customs officially broke the seals, opened the container vans, and examined the shipment for
tax evaluation in the presence of MSC’s broker and checker. Thereafter, the customs inspector
closed the container vans and refastened them with safety wire seals while MSC’s broker
padlocked the same. MPSI then placed the said container vans in a back-to-back arrangement
at the delivery area of the harbor’s container yard where they were watched over by the
security guards of MPSI and of the Philippine Ports Authority.
On October 10, 1989, MSC’s representative, AD’s Customs Services (ACS), took out five
container vans for delivery to MSC. At the compound’s exit, MPSI issued to ACS the
corresponding gate passes for the vans indicating its turnover of the subject shipment to MSC.
However, upon receipt of the container vans at its warehouse, MSC discovered substantial
shortages in the number of bags of flour delivered. Hence, it filed a formal claim for loss with
MPSI.
From October 12 to 14, 1989 and pursuant to the gate passes issued by MPSI, ACS took out
the remaining five container vans from the container yard and delivered them to MSC. Upon
receipt, MSC once more discovered substantial shortages. Thus, MSC filed another claim with
MPSI.
Per MSC, the total number of the missing bags of flour was 1,650 with a value of
P257,083.00.
 
 
413

VOL. 766, AUGUST 12, 2015 413

Marina Port Services, Inc. vs. American Home
Assurance Corporation

MPSI denied both claims of MSC. As a result, MSC sought insurance indemnity for the lost
cargoes from AHAC. AHAC paid MSC the value of the missing bags of flour after finding the
latter’s claim in order. In turn, MSC issued a subrogation receipt in favor of AHAC.
Thereafter, AHAC filed a Complaint6 for damages against MPSI before the RTC.
 
Ruling of the Regional Trial Court
 
AHAC averred in its Complaint that the partial loss of the bags of flour was due to the fault
or negligence of MPSI since the loss happened while the shipment was still in MPSI’s custody.
MPSI, on the other hand, disclaimed any liability. It essentally maintained in its
Answer7 that the bags of flour were inside sealed container vans when it received the same;
that it handled the subject shipment with the diligence required of it; and that the container
vans were turned over by it to MSC in the same condition that they were in at the time of
their discharge from the vessel. MPSI likewise countered that the failure of MSC to request
for a bad order survey belied the latter’s claim for loss.
Trial then ensued.
On October 17, 2006, the RTC rendered a Decision8 dismissing AHAC’s Complaint. It held
that while there was indeed a shortage of 1,650 sacks of soft wheat flour, AHAC’s evidence
failed to clearly show that the loss happened while the subject shipment was still under
MPSI’s responsibility. Hence, the dispositive portion of the RTC Decision:

_______________

6  Id.
7  Id., at pp. 12-17.
8  Id., at pp. 257-279.

 
 
 414

414 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation

WHEREFORE, premises considered, the complaint is hereby DISMISSED.

SO ORDERED.9

 
Ruling of the Court of Appeals
 
Aggrieved, AHAC appealed to the CA.
In its Decision10 dated December 29, 2011, the CA stressed that in a claim for loss filed by a
consignee, the burden of proof to show due compliance with the obligation to deliver the goods
to the appropriate party devolves upon the arrastre operator. In consonance with this, a
presumption of fault or negligence for the loss of the goods arises against the arrastre operator
pursuant to Articles 126511 and 198112 of the Civil Code. In this case, the CA found that MPSI
failed to discharge such burden and to rebut the aforementioned presumption.

_______________

9   Id., at p. 279.
10  CA Rollo, pp. 86-95.
11  Article  1265.  Whenever the thing is lost in the possession of the debtor, it shall be presumed that the loss was
due to his fault, unless there is proof to the contrary, and without prejudice to the provisions of Article 1165. This
presumption does not apply in case of earthquake, flood, storm, or other natural calamity.
12   Article  1981.  When the thing deposited is delivered closed and sealed, the depositary must return it in the
same condition, and he shall be liable for damages should the seal or lock be broken through his fault.
Fault on the part of the depositary is presumed, unless there is proof to the contrary.
As regards the value of the thing deposited, the statement of the depositor shall be accepted, when the forcible
opening is imputable to the depositary, should there be no proof to the contrary. However, the courts may pass upon
the credibility of the depositor with respect to the value claimed by him.
When the seal or lock is broken, with or without the depositary’s fault, he shall keep the secret of the deposit.

 
 
415

VOL. 766, AUGUST 12, 2015 415

Marina Port Services, Inc. vs. American Home
Assurance Corporation

Thus, it was held liable to AHAC for the value of the missing bags of flour, viz.:
We conclude that x x x MPSI was negligent in the handling and safekeeping of the subject shipment.
It did not create and implement a more defined, concrete and effective measure to detect, curb and
prevent the loss or pilferage of cargoes in its custody. This is manifested by the fact that [MPSI] never
took any action to address such complaint even after it received the formal claim of loss in the first five
(5) vans. As a consequence, more bags of flour were eventually lost or pilfered in the remaining container
vans that were still in [MPSI’s] custody at that time. Case law tells us that negligence is that conduct
which creates undue risk of harm to another, the failure to observe that degree of care, precaution and
vigilance which the circumstance[s] justly demand, whereby that other person suffers injury. Clearly,
[MPSI] breached its arrastre obligations to the consignee for it failed to deliver said bags in good and
complete condition.
 In view of MPSI’s failure to exercise that degree of diligence, precaution and care the law [requires] of
arrastre operators in the performance of their duties to the consignee, [MPSI] is legally bound to
reimburse [AHAC] for the value of the missing bags of flour that it paid to MSC pursuant to the
insurance policy.13

 
In view of the same, the said court disposed of the appeal in this wise:
WHEREFORE, premises considered, the appeal is GRANTED. The Decision of the Regional Trial
Court of Pasig City, Branch 271 dated 17 October 2006 is REVERSED and SET ASIDE. Appellee Marina
Port Services, Inc. is ORDERED to pay appellant, American Home Assurance Corporation, the sum of
Two Hundred Fifty-Seven Thousand and Eighty-Three Pesos (Php257,083.00) with

_______________

13  CA Rollo, pp. 93-94.

 
 
416

416 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation

interest thereon at six percent (6%) [per annum] from the filing of this complaint on 24 September 1990
until the decision becomes final and executory, and thereafter, at the rate of twelve (12) percent [per
annum] until fully paid, and additionally, to pay the x x x sum of Fifty Thousand Pesos (Php50,000.00)
as attorney’s fees.
SO ORDERED.14

 
MPSI moved for reconsideration but the CA denied the same in its Resolution15 dated May
8, 2012.
Hence, the present recourse.
 
Issue
 
The core issue to be resolved in this case is whether MPSI is liable for the loss of the bags of
flour.
 
Our Ruling
 
There is merit in the Petition.
 
Albeit involving factual questions,
the Court shall proceed to resolve
this case since it falls under sev-
eral exceptions to the rule that
only questions of law are proper in
a petition for review on certiorari.
 
At the outset, it is evident that the resolution of the instant case requires the scrutiny of
factual issues which are, however, outside the scope of the present petition filed pursuant to
Rule 45 of the Rules of Court. However, the Court held in  Asian Terminals, Inc. v. Philam
Insurance Co., Inc.16 that:

_______________

14  Id., at p. 94.
15  Id., at pp. 121-122.
16  G.R. Nos. 181163, 181262, & 181319, July 24, 2013, 702 SCRA 88.

 
 
417

VOL. 766, AUGUST 12, 2015 417

Marina Port Services, Inc. vs. American Home
Assurance Corporation

But while it is not our duty to review, examine and evaluate or weigh all over again the probative value
of the evidence presented, the Court may nonetheless resolve questions of fact when the case falls under
any of the following exceptions:
(1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2) when
the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of
discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of
fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of
the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7)
when the findings are contrary to those of the trial court; (8) when the findings are conclusions
without citation of specific evidence on which they are based; (9) when the facts set forth in the
petition as well as in the petitioner’s main and reply briefs are not disputed by the respondent; and
(10) when the findings of fact are premised on the supposed absence of evidence and contradicted
by the evidence on record.17

 
The Court finds that the instant case falls under the aforementioned second, fourth, fifth,
and seventh exceptions. Hence, it shall proceed to delve into factual matters essential to the
proper determination of the merits of this case.
 
Several well-entrenched legal prin-
ciples govern the relationship of an
arrastre operator and a consignee.

_______________

17  Id., at pp. 102-103, citing  Insurance Company of North America v. Asian Terminals, Inc., G.R. No. 180784,
February 15, 2012, 666 SCRA 226, 236-237.

 
 
418

418 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation
 The relationship between an arrastre operator and a consignee is similar to that between a
warehouseman and a depositor, or to that between a common carrier and the consignee and/or
the owner of the shipped goods.18 Thus, an arrastre operator should adhere to the same degree
of diligence as that legally expected of a warehouseman or a common carrier19 as set forth in
Section 3[b] of the Warehouse Receipts [Act]20  and Article 1733 of the Civil Code.21  As
custodian of the shipment discharged from the vessel, the arrastre operator must take good
care of the same and turn it over to the party entitled to its possession.22
In case of claim for loss filed by a consignee or the insurer as subrogee,23 it is the arrastre
operator that carries the bur-

_______________

18    Asian Terminals, Inc. v. First Lepanto-Taisho Insurance Corporation, G.R. No. 185964, June 16, 2014, 726
SCRA 415, 427.
19  Id., at pp. 427-428.
20  Act No. 2137 (February 5, 1912).
Section  3.  Form of Receipts; What Terms May Be Inserted.—A warehouseman may insert in a receipt, issued by
him, any other terms and conditions: Provided, That such terms and conditions shall not:
x x x x
(b)  In any wise impair his obligation to exercise that degree of care in the safe-keeping of the goods entrusted to
him which a reasonably careful man would exercise in regard to similar goods of his own.
21  Article 1733.  Common carriers, from the nature of their business and for reasons of public policy, are bound to
observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
x x x x
22  Asian Terminals, Inc. v. First Lepanto-Taisho Insurance Corporation, supra at p. 428.
23  Civil Code, Art.  1303.  Subrogation transfers to the persons subrogated the credit with all the rights thereto
appertaining, either against the debtor or against third person, be they guarantors or possessors of mortgages, subject
to stipulation in a conventional subrogation.

 
 
419

VOL. 766, AUGUST 12, 2015 419

Marina Port Services, Inc. vs. American Home
Assurance Corporation

den of proving compliance with the obligation to deliver the goods to the appropriate
party.24  It must show that the losses were not due to its negligence or that of its
employees.25  It must establish that it observed the required diligence in handling the
shipment.26 Otherwise, it shall be presumed that the loss was due to its fault.27 In the same
manner, an arrastre operator shall be liable for damages if the seal and lock of the goods
deposited and delivered to it as closed and sealed, be broken through its fault.28 Such fault on
the part of the arrastre operator is likewise presumed unless there is proof to the contrary.29
 
MPSI was able to prove delivery of
the shipment to MSC in good and
complete condition and with locks
and seals intact.
 
It is significant to note that MPSI, in order to prove that it properly delivered the subject
shipment consigned to MSC, presented 10 gate passes marked as Exhibits 4 to 13.30 Each of
these gate passes bore the duly identified signature31  of MSC’s representative which serves,
among others, as an acknowledgment that:
 Issuance of [the] Gate Pass constitutes delivery to and receipt by consignee of the goods as described
above in good order and condition, unless an accompanying B.O.

_______________

24  Asian Terminals, Inc. v. First Lepanto-Taisho Insurance Corporation, supra note 18 at p. 428.

25  Id.
26  Id.
27  Civil Code, Art. 1265.
28  Civil Code, Art. 1981.
29  Id.
30  Records, pp. 188-197.
31  Id.; marked as Exhibits 4-A to 13-A.

 
 
420

420 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation

certificate duly issued and noted on the face of [the] Gate Pass appears.32

 
As held in  International Container Terminal Services, Inc. v. Prudential Guarantee &
Assurance Co., Inc.,33  the signature of the consignee’s representative on the gate pass is
evidence of receipt of the shipment in good order and condition.34
Also, that MPSI delivered the subject shipment to MSC’s representative in good and
complete condition and with lock and seals intact is established by the testimonies of MPSI’s
employees who were directly involved in the processing of the subject shipment. Mr. Ponciano
De Leon testified that as MPSI’s delivery checker, he personally examined the subject
container vans and issued the corresponding gate passes that were, in turn, countersigned by
the consignee’s representative. MPSI’s other witness, Chief Claims Officer Sergio Icasiano
(Icasiano), testified that the broker, as the consignee’s representative, neither registered any
complaints nor requested for an inspection, to wit:
REDIRECT EXAMINATION:
Atty. Laurente
x x x x
Q [A]fter receipt by the broker of the container van containing the cargo, do you require the broker to issue you a report
or certification as to the appearance of the container van?
A [W]e only rely on the gate pass.
Q [A]nd you don’t place there “the padlock is still intact or the wirings still intact?”
A [I]t is stated in the gate pass, your Honor.
x x x x

_______________

32  Id.
33  377 Phil. 1082; 320 SCRA 244 (1999).
34  Id., at p. 1091; p. 250.

 
 
421
 VOL. 766, AUGUST 12, 2015 421
Marina Port Services, Inc. vs. American Home
Assurance Corporation

Q [A]nd the findings [are counter-signed] by the representative of the broker also on the same date?
A [Y]es, your honor.35
x x x x
RECROSS EXAMINATION:
Atty. Laino
q [B]ut did you not say that in the gate pass it is stated there as to the external appearance of the container van?
a [T]here was no indication of any inspection of the container van x  x  x meaning the container vans were all in good
condition, sir.
q [Y]ou said a [while] ago that you did not receive any complaint for broken seals, is it not?
a [Y]es, sir.
q [B]ut the complaint that you received indicates that there were losses.
a [W]e did not receive any complaint from the broker, sir.
q [I]f the broker will complain they have to file a request for inspection of the cargo so that they will know if there [are]
shortages x x x.
a [Y]es, sir.
[C]ourt
q [A]nd if the broker would notice or detect [something] peculiar, the way the door of the container van appears whether
close[d] or not, they have to request for an inspection[?]
a [Y]es, your honor.
q [O]r in the absence of the padlock or wirings, the broker will request for an inspection[?]
a [Y]es, your honor[;] they can require for the examination of the cargo.

_______________

35  TSN, November 6, 1992, pp. 17-18.

 
 
422

422 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation

 q [B]ut there was no request at all by the broker?

 a [T]here was none, your Honor.36

 
Verily, the testimonies of the aforementioned employees of MPSI confirm that the container
vans, together with their padlocks and wirings, were in order at the time the gate passes were
issued up to the time the said container vans were turned over to ACS.
AHAC justifies the failure of ACS to immediately protest the alleged loss or pilferage upon
initial pickup of the first batch of container vans. According to it, ACS could not have
discovered the loss at that moment since the stripping of container vans in the pier area is not
allowed. The Court cannot, however, accept such excuse. For one, AHAC’s claim that stripping
of the container vans is not allowed in the pier area is a mere allegation without proof. It is
settled that “[m]ere allegations do not suffice; they must be substantiated by clear and
convincing proof.”37 For another, even assuming that stripping of the container vans is indeed
not allowed at the pier area, it is hard to believe that MSC or its repre­­sen­tative ACS has no
precautionary measures to protect itself from any eventuality of loss or pilferage. To recall,
ACS’s representative signed the gate passes without any qualifications. This is despite the fact
that such signature serves as an acknowledgment of ACS’s receipt of the goods in good order
and condition. If MSC was keen enough in protecting its interest, it (through ACS) should
have at least qualified the receipt of the goods as subject to inspection, and thereafter arrange
for such an inspection in an area where the same is allowed to be done. However, no such
action or other similar measure was shown to have been undertaken by MSC. What is clear is
that ACS accepted the container vans on its behalf without any qualification. As aptly
observed by the RTC:

_______________

36  Id., at pp. 18-19.

37  Aoanan, Sr. v. Aoanan, Jr., 550 Phil. 726, 738; 522 SCRA 631, 643 (2007).

 
 
423

VOL. 766, AUGUST 12, 2015 423

Marina Port Services, Inc. vs. American Home
Assurance Corporation

During [the] period of turnover of goods from the arrastre to [ACS], there had been no protest on
anything on the part of consignee’s representative x  x  x. Otherwise, the complaint would have been
shown [on] the gate passes. In fact, each gate pass showed the date of delivery, the location of delivery,
the truck number of the truck used in the delivery, the actual quantity of goods delivered, the numbers of
the safety wires and padlocks of the vans and the signatures of the receiver. More importantly, the gate
passes bared the fact that the shipments were turned over by [MPSI] to [ACS] on the same dates of
customs inspections and turnovers.38

 
There being no exception as to bad order, the subject shipment, therefore, appears to have
been accepted by MSC, through ACS, in good order.39 “It logically follows [then] that the case
at bar presents no occasion for the necessity of discussing the diligence required of an
[arrastre operator] or of the theory of [its] prima facie liability x x x, for from all indications,
the shipment did not suffer loss or damage while it was under the care x x x of the arrastre
operator x x x.”40

Even in the light of Article 1981, no

presumption of fault on the part of
MPSI arises since it was not suffic-
iently shown that the container
vans were reopened or that their
locks and seals were broken for the
second time.
 
Indeed, Article 1981 of the Civil Code also mandates a presumption of fault on the part of
the arrastre operator as follows:

_______________

38  Records, p. 276.
39  Bankers & Manufacturers Assurance Corporation v. Court of Appeals, G.R. No. 80256, October 2, 1992, 214
SCRA 433, 436.
40  Id., at pp. 436-437.

 
 
 424

424 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation

Article  1981.  When the thing deposited is delivered closed and sealed, the depositary must return it
in the same condition, and he shall be liable for damages should the seal or lock be broken through his
fault.
Fault on the part of the depositary is presumed, unless there is proof to the contrary.
As regards the value of the thing deposited, the statement of the depositor shall be accepted, when the
forcible opening is imputable to the depositary, should there be no proof to the contrary. However, the
courts may pass upon the credibility of the depositor with respect to the value claimed by him.
When the seal or lock is broken, with or without the depositary’s fault, he shall keep the secret of the
deposit.

 
However, no such presumption arises in this case considering that it was not sufficiently
shown that the container vans were reopened or that their locks and seals were broken for the
second time. As may be recalled, the container vans were opened by a customs official for
examination of the subject shipment and were thereafter resealed with safety wires. While
this fact is not disputed by both parties, AHAC alleges that the container vans were reopened
and this gave way to the alleged pilferage. The Court notes, however, that AHAC based such
allegation solely on the survey report of the Manila Adjuster & Surveyors Company (MASCO).
As observed by the RTC:

AHAC x  x  x claim[s] that there were two instances when the seals were broken. [First], when the
customs officer examined the shipment and had it resealed with safety wires. [Second], when the
surveyor and consignee’s broker visually inspected the shipment and allegedly found the safety wires of
the customs officer to have been detached and missing which they then replaced. This second instance is
only upon their say so as there is no

 
 
425

VOL. 766, AUGUST 12, 2015 425

Marina Port Services, Inc. vs. American Home
Assurance Corporation

x x x documentary or testimonial proof on the matter [other] than the [MASCO] survey report.41

 
However, the person who prepared the said report was not presented in court to testify on the
same. Thus, the said survey report has no probative value for being hearsay. “It is a basic rule
that evidence, whether oral or documentary, is hearsay, if its probative value is not based on
the personal knowledge of the witness but on the knowledge of another person who is not on
the witness stand.”42  Moreover, “an unverified and unidentified private document cannot be
accorded probative value. It is precluded because the party against whom it is presented is
deprived of the right and opportunity to cross-examine the person to whom the statements or
writings are attributed. Its executor or author should be presented as a witness to provide the
other party to the litigation the opportunity to question its contents. Being mere hearsay
evidence, failure to present the author of the letter renders its contents suspect and of no
probative value.”43
There being no other competent evidence that the container vans were reopened or that
their locks and seals were broken for the second time, MPSI cannot be held liable for damages
due to the alleged loss of the bags of flour pursuant to Article 1981 of the Civil Code.
 
At any rate, the goods were
shipped under “Shipper’s Load
and Count” arrangement. Thus,
protection against pilferage of
the subject ship­ment was the
consignee’s lookout.

_______________

41  Records, p. 274.
42  Dela Llana v. Biong, G.R. No. 182356, December 4, 2013, 711 SCRA 522, 535.
43  Huang v. Philippine Hoteliers, Inc., G.R. No. 180440, December 5, 2012, 687 SCRA 162, 203-204.

 
 
426

426 SUPREME COURT REPORTS ANNOTATED

Marina Port Services, Inc. vs. American Home
Assurance Corporation

At any rate, MPSI cannot just the same be held liable for the missing bags of flour since the
consigned goods were shipped under “Shipper’s Load and Count” arrangement. “This means
that the shipper was solely responsible for the loading of the container, while the carrier was
oblivious to the contents of the shipment. Protection against pilferage of the shipment was the
consignee’s lookout. The arrastre operator was, like any ordinary depositary, duty-bound to
take good care of the goods received from the vessel and to turn the same over to the party
entitled to their possession, subject to such qualifications as may have validly been imposed in
the contract between the parties. The arrastre operator was not required to verify the contents
of the container received and to compare them with those declared by the shipper because, as
earlier stated, the cargo was at the shipper’s load and count. The arrastre operator was
expected to deliver to the consignee only the container received from the carrier.”44
All told, the Court holds that MPSI is not liable for the loss of the bags of flour.
WHEREFORE, the Petition is  GRANTED. The Decision dated December 29, 2011 and
Resolution dated May 8, 2012 of the Court of Appeals in C.A.-G.R. CV No. 88321
are REVERSED and SET ASIDE. The Decision dated October 17, 2006 of the Regional Trial
Court, Branch 271, Pasig City in Civil Case No. 90-54517 is  REINSTATED  and the
Complaint in the said case is DISMISSED.
SO ORDERED.

Carpio (Chairperson), Brion, Mendoza and Leonen, JJ., concur.

Petition granted, judgment and resolution reversed and set aside.

_______________

44    International Container Terminal Services, Inc. (ICTSI) v. Prudential Guarantee & Assurance Co.,
Inc., supra note 33 at pp. 1093-1094; pp. 252-253.
  

 
 
427

VOL. 766, AUGUST 12, 2015 427

Marina Port Services, Inc. vs. American Home
Assurance Corporation

Notes.—Hearsay evidence is admissible in determining probable cause in a preliminary

investigation because such investigation is merely preliminary, and does not finally adjudicate
rights and obligations of parties. (Estrada vs. Office of the Ombudsman, 748 SCRA 1 [2015])
The legal relationship between an arrastre operator and a consignee is akin to that between
a warehouseman and a depositor. (Unknown Owner of the Vessel  M/V  China Joy vs. Asian
Terminals, Inc., 752 SCRA 642 [2015])
 
 
——o0o——