11/9/2017 G.R. No.

185964

G.R.No.185964June16,2014

ASIANTERMINALS,INC.,Petitioner,
vs.

FIRSTLEPANTOTAISHOINSURANCECORPORATION,Respondent.

DECISION

REYES,J.:

ThisisaPetitionforReviewonCertiorari1underRule45oftheRulesofCourtseekingtoannulandsetasidethe
Decision2 dated October 10, 2008 of the Court of Appeals (CA) in CAG.R. SP No. 99021 which adjudged
petitionerAsianTerminals,Inc.(ATI)liabletopaythemoneyclaimsofrespondentFirstLepantoTaishoInsurance
Corporation(FIRSTLEPANTO).

TheUndisputedFacts

On July 6, 1996,3 3,000 bags of sodium tripolyphosphate contained in 100 plain jumbo bags complete and in
good condition were loaded and received on board M/V "Da Feng" owned by China Ocean Shipping Co.
(COSCO) in favor of consignee, Grand Asian Sales, Inc. (GASI). Based on a Certificate of Insurance4 dated
August24,1995,itappearsthattheshipmentwasinsuredagainstallrisksbyGASIwithFIRSTLEPANTOfor
7,959,550.50underMarineOpenPolicyNo.0123.

TheshipmentarrivedinManilaonJuly18,1996andwasdischargedintothepossessionandcustodyofATI,a
domesticcorporationengagedinarrastrebusiness.TheshipmentremainedforquitesometimeatATIsstorage
area until it was withdrawn by broker, Proven Customs Brokerage Corporation (PROVEN), on August 8 and 9,
1996 for delivery to the consignee. Upon receipt of the shipment,5GASI subjected the same to inspection and
foundthatthedeliveredgoodsincurredshortagesof8,600kilogramsandspillageof3,315kgforatotalof11,915
kgofloss/damagevaluedat166,772.41.

GASI sought recompense from COSCO, thru its Philippine agent Smith Bell Shipping Lines, Inc. (SMITH
BELL),6ATI7andPROVEN8butwasdenied.Hence,itpursuedindemnificationfromtheshipmentsinsurer.9

After the requisite investigation and adjustment, FIRST LEPANTO paid GASI the amount of 165,772.40 as
insuranceindemnity.10

Thereafter, GASI executed a Release of Claim11 discharging FIRST LEPANTO from any and all liabilities
pertainingtothelost/damagedshipmentandsubrogatingittoalltherightsofrecoveryandclaimstheformermay
haveagainstanypersonorcorporationinrelationtothelost/damagedshipment.

As such subrogee, FIRST LEPANTO demanded from COSCO, its shipping agency in the Philippines, SMITH
BELL,PROVENandATI,reimbursementoftheamountitpaidtoGASI.WhenFIRSTLEPANTOsdemandswere
notheeded,itfiledonMay29,1997aComplaint12forsumofmoneybeforetheMetropolitanTrialCourt(MeTC)
ofManila,Branch3.FIRSTLEPANTOsoughtthatitbereimbursedtheamountof166,772.41,twentyfivepercent
(25%)thereofasattorneysfees,andcostsofsuit.

ATIdeniedliabilityforthelost/damagedshipmentandclaimedthatitexercisedduediligenceandcareinhandling
thesame.13ATIaverredthatuponarrivaloftheshipment,SMITHBELLrequestedforitsinspection14anditwas
discoveredthatonejumbobagthereofsustainedloss/damagewhileinthecustodyofCOSCOasevidencedby
Turn Over Survey of Bad Order Cargo No. 47890 dated August 6, 199615 jointly executed by the respective
representativesofATIandCOSCO.DuringthewithdrawaloftheshipmentbyPROVENfromATIswarehouse,
theentireshipmentwasreexaminedanditwasfoundtobeexactlyinthesameconditionaswhenitwasturned
overtoATIsuchthatonejumbobagwasdamaged.Tobolsterthisclaim,ATIsubmittedRequestforBadOrder
SurveyNo.40622datedAugust9,199616jointlyexecutedbytherespectiverepresentativesofATIandPROVEN.
ATIalsosubmittedvariousCargoGatePasses17showingthatPROVENwasabletocompletelywithdrawallthe
shipmentfromATIswarehouseingoodorderconditionexceptforthatonedamagedjumbobag.

In the alternative, ATI asserted that even if it is found liable for the lost/damaged portion of the shipment, its
contractforcargohandlingserviceslimitsitsliabilitytonotmorethan5,000.00perpackage.ATIinterposeda
counterclaimof20,000.00againstFIRSTLEPANTOasandforattorneysfees.Italsofiledacrossclaimagainst
itscodefendantsCOSCOandSMITHBELLintheeventthatitismadeliabletoFIRSTLEPANTO.18

PROVEN denied any liability for the lost/damaged shipment and averred that the complaint alleged no specific
acts or omissions that makes it liable for damages. PROVEN claimed that the damages in the shipment were
sustained before they were withdrawn from ATIs custody under which the shipment was left in an open area

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exposedtotheelements,thievesandvandals.PROVENcontendedthatitexercisedduediligenceandprudence
inhandlingtheshipment.PROVENalsofiledacounterclaimforattorneysfeesanddamages.19

Despite receipt of summons on December 4, 1996,20COSCO and SMITH BELL failed to file an answer to the
complaint. FIRST LEPANTO thus moved that they be declared in default21 but the motion was denied by the
MeTConthegroundthatunderRule9,Section3oftheRulesofCivilProcedure,"whenapleadingassertinga
claimstatesacommoncauseofactionagainstseveraldefendingparties,someofwhomanswerandtheother
failtodoso,theCourtshalltrythecaseagainstallupontheanswersthusfiled,andrenderjudgmentuponthe
evidencepresented."22

RulingoftheMeTC

InaJudgment23datedMay30,2006,theMeTCabsolvedATIandPROVENfromanyliabilityandinsteadfound
COSCO to be the party at fault and hence liable for the loss/damage sustained by the subject shipment.
However,theMeTCruledithasnojurisdictionoverCOSCObecauseitisaforeigncorporation.Also,itcannot
enforce judgment upon SMITH BELL because no evidence was presented establishing that it is indeed the
Philippine agent of COSCO. There is also no evidence attributing any fault to SMITH BELL. Consequently, the
complaintwasdismissedinthiswise:

WHEREFORE,inlightoftheforegoing,judgmentisherebyrenderedDISMISSINGtheinstantcaseforfailureof
[FIRSTLEPANTO]tosufficientlyestablishitscauseofactionagainst[ATI,COSCO,SMITHBELL,andPROVEN].

Thecounterclaimsof[ATIandPROVEN]arelikewisedismissedforlackoflegalbasis.

Nopronouncementastocost.

SOORDERED.24

RulingoftheRegionalTrialCourt

On appeal, the Regional Trial Court (RTC) reversed the MeTCs findings. In its Decision25 dated January 26,
2007, the RTC of Manila, Branch 21, in Civil Case No. 06116237, rejected the contentions of ATI upon its
observationthatthesameisbeliedbyitsveryowndocumentaryevidence.TheRTCremarkedthat,if,asalleged
byATI,onejumbobagwasalreadyinbadorderconditionuponitsreceiptoftheshipmentfromCOSCOonJuly
18,1996,thenhowcomethattheRequestforBadOrderSurveyandtheTurnOverSurveyofBadOrderCargo
werepreparedonlyweeksthereafteroronAugust9,1996andAugust6,1996,respectively.ATIwasadjudged
unabletoprovethatitexercisedduediligencewhileincustodyoftheshipmentandhence,negligentandshould
beheldliableforthedamagescausedtoGASIwhich,inturn,issubrogatedbyFIRSTLEPANTO.

The RTC rejected ATIs contention that its liability is limited only to 5,000.00 per package because its
Management Contract with the Philippine Ports Authority (PPA) purportedly containing the same was not
presentedasevidence.Moreimportantly,FIRSTLEPANTOorGASIcannotbedeemedboundtherebybecause
they were not parties thereto. Lastly, the RTC did not give merit to ATIs defense that any claim against it has
alreadyprescribedbecauseGASIfailedtofileanyclaimwithinthe15dayperiodstatedinthegatepassissued
byATItoGASIsbroker,PROVEN.Accordingly,theRTCdisposedthus:

WHEREFORE,inlightoftheforegoing,thejudgmentonappealisherebyREVERSED.

[ATI]isherebyorderedtoreimburse[FIRSTLEPANTO]theamountof[P]165,772.40withlegalinterestuntilfully
paid,topay[FIRSTLEPANTO]10%oftheamountduethelatterasandforattorneysfeesplusthecostsofsuit.

Thecomplaintagainst[COSCO/SMITHBELLandPROVEN]areDISMISSEDforlackofevidenceagainstthem.
Thecounterclaimandcross[]claimof[ATI]arelikewiseDISMISSEDforlackofmerit.

SOORDERED.26

RulingoftheCA

ATIsoughtrecoursewiththeCAchallengingtheRTCsfindingthatFIRSTLEPANTOwasvalidlysubrogatedto
the rights of GASI with respect to the lost/damaged shipment. ATI argued that there was no valid subrogation
because FIRSTLEPANTO failed to present a valid, existing and enforceable Marine Open Policy or insurance
contract.ATIreasonedthattheCertificateofInsuranceorMarineCoverNotesubmittedbyFIRSTLEPANTOas
evidenceisnotthesameasanactualinsurancecontract.

InitsDecision27datedOctober10,2008,theCAdismissedtheappealandheldthattheReleaseofClaimandthe
CertificateofInsurancepresentedbyFIRSTLEPANTOsufficientlyestablisheditsrelationshipwiththeconsignee

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andthatuponproofofpaymentofthelattersclaimfordamages,FIRSTLEPANTOwassubrogatedtoitsrights
againstthoseliableforthelost/damagedshipment.

TheCAalsoaffirmedtherulingoftheRTCthatthesubjectshipmentwasdamagedwhileinthecustodyofATI.
Thus,theCAdisposedasfollows:

WHEREFORE, premises considered, the assailed Decision is hereby AFFIRMED and the instant petition is
DENIEDforlackofmerit.

SOORDERED.28

ATImovedforreconsiderationbutthemotionwasdeniedintheCAResolution29datedJanuary12,2009.Hence,
thispetitionarguingthat:

(a) The presentation of the insurance policy is indispensable in proving the right of FIRST LEPANTO to be
subrogatedtotherightoftheconsigneepursuanttotherulinginWallemPhilippinesShipping,Inc.v.Prudential
GuaranteeandAssuranceInc.30

(b) ATI cannot be barred from invoking the defense of prescription as provided for in the gate passes in
consonance with the ruling in International Container Terminal Services, Inc. v. Prudential Guarantee and
AssuranceCo,Inc.31

RulingoftheCourt

TheCourtdeniesthepetition.

ATIfailedtoprovethatitexercised
duecareanddiligencewhilethe
shipmentwasunderitscustody,
controlandpossessionasarrastre
operator.

ItmustbeemphasizedthatfactualquestionspertainingtoATIsliabilityfortheloss/damagesustainedbyGASI
has already been settled in the uniform factual findings of the RTC and the CA that: ATI failed to prove by
preponderanceofevidencethatitexercisedduediligenceinhandlingtheshipment.

SuchfindingsarebindingandconclusiveuponthisCourtsinceareviewthereofisproscribedbythenatureofthe
presentpetition.OnlyquestionsoflawareallowedinpetitionsforreviewoncertiorariunderRule45oftheRules
ofCourt.ItisnottheCourtsdutytoreview,examine,andevaluateorweighalloveragaintheprobativevalueof
theevidencepresented,especiallywherethefindingsoftheRTCareaffirmedbytheCA,asinthiscase.32

ThereareonlyspecificinstanceswhentheCourtdeviatesfromtheruleandconductsareviewofthecourtsa
quos factual findings, such as when: (1) the inference made is manifestly mistaken, absurd or impossible (2)
thereisgraveabuseofdiscretion(3)thefindingsaregroundedentirelyonspeculations,surmisesorconjectures
(4)thejudgmentoftheCAisbasedonmisapprehensionoffacts(5)theCA,inmakingitsfindings,wentbeyond
theissuesofthecaseandthesameiscontrarytotheadmissionsofbothappellantandappellee(6)thefindings
of fact are conclusions without citation of specific evidence on which they are based (7) the CA manifestly
overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a
different conclusion and (8) the findings of fact of the CA are premised on the absence of evidence and are
contradictedbytheevidenceonrecord.33

None of these instances, however, are present in this case. Moreover, it is unmistakable that ATI has already
concededtothefactualfindingsofRTCandCAadjudgingitliablefortheshipmentsloss/damageconsideringthe
absenceofargumentspertainingtosuchissueinthepetitionatbar.

Thesenotwithstanding,theCourtscrutinizedtherecordsofthecaseandfoundthatindeed,ATIisliableasthe
arrastreoperatorforthelost/damagedportionoftheshipment.

Therelationshipbetweentheconsigneeandthearrastreoperatorisakintothatexistingbetweentheconsignee
and/or the owner of the shipped goods and the common carrier, or that between a depositor and a
warehouseman. Hence, in the performance of its obligations, an arrastre operator should observe the same
degreeofdiligenceasthatrequiredofacommoncarrierandawarehouseman.Beingthecustodianofthegoods
dischargedfromavessel,anarrastreoperatorsdutyistotakegoodcareofthegoodsandtoturnthemoverto
thepartyentitledtotheirpossession.34

In a claim for loss filed by the consignee (or the insurer), the burden of proof to show compliance with the
obligation to deliver the goods to the appropriate party devolves upon the arrastre operator. Since the
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safekeepingofthegoodsisitsresponsibility,itmustprovethatthelosseswerenotduetoitsnegligenceortothat
of its employees. To avoid liability, the arrastre operator must prove that it exercised diligence and due care in
handlingtheshipment.35

ATIfailedtodischargeitsburdenofproof.Instead,itinsistedonshiftingtheblametoCOSCOonthebasisofthe
RequestforBadOrderSurveydatedAugust9,1996purportedlyshowingthatwhenATIreceivedtheshipment,
onejumbobagthereofwasalreadyindamagedcondition.

The RTC and CA were both correct in concluding that ATIs contention was improbable and illogical. As
judiciously discerned by the courts a quo, the date of the document was too distant from the date when the
shipmentwasactuallyreceivedbyATIfromCOSCOonJuly18,1996.Infact,whatthedocumentestablishedis
thatwhentheloss/damagewasdiscovered,theshipmenthasbeeninATIscustodyforatleasttwoweeks.This
circumstance, coupled with the undisputed declaration of PROVENs witnesses that while the shipment was in
ATIs custody, it was left in an open area exposed to the elements, thieves and vandals,36 all generate the
conclusionthatATIfailedtoexerciseduecareanddiligencewhilethesubjectshipmentwasunderitscustody,
controlandpossessionasarrastreoperator.

Toprovetheexerciseofdiligenceinhandlingthesubjectcargoes,anarrastreoperatormustdomorethanmerely
showthepossibilitythatsomeotherpartycouldberesponsibleforthelossorthedamage.37Itmustprovethatit
usedallreasonablemeanstohandleandstoretheshipmentwithduecareanddiligenceincludingsafeguardingit
fromweatherelements,thievesorvandals.

Nonpresentationoftheinsurance
contractisnotfataltoFIRST
LEPANTOscauseofactionfor
reimbursementassubrogee.

ItisconspicuousfromtherecordsthatATIputinissuethesubmissionoftheinsurancecontractforthefirsttime
beforetheCA.DespiteopportunitytostudyFIRSTLEPANTOscomplaintbeforetheMeTC,ATIfailedtoallegein
itsanswerthenecessityoftheinsurancecontract.Neitherwasthesameconsideredduringpretrialasoneofthe
decisive matters in the case. Further, ATI never challenged the relevancy or materiality of the Certificate of
Insurance presented by FIRST LEPANTO as evidence during trial as proof of its right to be subrogated in the
consignees stead. Since it was not agreed during the pretrial proceedings that FIRST LEPANTO will have to
prove its subrogation rights by presenting a copy of the insurance contract, ATI is barred from pleading the
absenceofsuchcontractinitsappeal.Itisimperativeforthepartiestodiscloseduringpretrialallissuesthey
intendtoraiseduringthetrialbecause,theyareboundbythedelimitationofsuchissues.Thedeterminationof
issues during the pretrial conference bars the consideration of other questions, whether during trial or on
appeal.38

Afaithfuladherencetotherulebylitigantsisensuredbytheequallysettledprinciplethatapartycannotchange
histheoryonappealassuchactviolatesthebasicrudimentsoffairplayanddueprocess.AsstressedinJosev.
Alfuerto:39

[A]partycannotchangehistheoryofthecaseorhiscauseofactiononappeal.Pointsoflaw,theories,issuesand
arguments not brought to the attention of the lower court will not be considered by the reviewing court. The
defensesnotpleadedintheanswercannot,onappeal,changefundamentallythenatureoftheissueinthecase.
Todosowouldbeunfairtotheadverseparty,whohadnoopportunitytopresentevidenceinconnectionwiththe
newtheorythiswouldoffendthebasicrulesofdueprocessandfairplay.40(Citationomitted)

While the Court may adopt a liberal stance and relax the rule, no reasonable explanation, however, was
introducedtojustifyATIsfailuretotimelyquestionthebasisofFIRSTLEPANTOsrightsasasubrogee.

The fact that the CA took cognizance of and resolved the said issue did not cure or ratify ATIs faux pas. "[A]
judgmentthatgoesbeyondtheissuesandpurportstoadjudicatesomethingonwhichthecourtdidnothearthe
parties,isnotonlyirregularbutalsoextrajudicialandinvalid."41Thus,forresolvinganissuenotframedduringthe
pretrialandonwhichthepartieswerenotheardduringthetrial,thatportionoftheCAsjudgmentdiscussingthe
necessityofpresentinganinsurancecontractwaserroneous.

At any rate, the nonpresentation of the insurance contract is not fatal to FIRST LEPANTOs right to collect
reimbursementasthesubrogeeofGASI.

"Subrogationisthesubstitutionofonepersonintheplaceofanotherwithreferencetoalawfulclaimorright,so
thathewhoissubstitutedsucceedstotherightsoftheotherinrelationtoadebtorclaim,includingitsremedies
orsecurities."42TherightofsubrogationspringsfromArticle2207oftheCivilCodewhichstates:

Art.2207.Iftheplaintiffspropertyhasbeeninsured,andhehasreceivedindemnityfromtheinsurancecompany
fortheinjuryorlossarisingoutofthewrongorbreachofcontractcomplainedof,theinsurancecompanyshallbe
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subrogatedtotherightsoftheinsuredagainstthewrongdoerorthepersonwhohasviolatedthecontract.Ifthe
amountpaidbytheinsurancecompanydoesnotfullycovertheinjuryorloss,theaggrievedpartyshallbeentitled
torecoverthedeficiencyfromthepersoncausingthelossorinjury.

Asageneralrule,themarineinsurancepolicyneedstobepresentedinevidencebeforetheinsurermayrecover
theinsuredvalueofthelost/damagedcargointheexerciseofitssubrogatoryright.InMalayanInsuranceCo.,
Inc.v.RegisBrokerageCorp.,43theCourtstatedthatthepresentationofthecontractconstitutiveoftheinsurance
relationship between the consignee and insurer is critical because it is the legal basis of the latters right to
subrogation.44

InHomeInsuranceCorporationv.CA,45theCourtalsoheldthattheinsurancecontractwasnecessarytoprove
thatitcoveredthehaulingportionoftheshipmentandwasnotlimitedtothetransportofthecargowhileatsea.
Theshipmentinthatcasepassedthroughsixstageswithdifferentpartiesinvolvedineachstageuntilitreached
the consignee. The insurance contract, which was not presented in evidence, was necessary to determine the
scope of the insurers liability, if any, since no evidence was adduced indicating at what stage in the handling
processthedamagetothecargowassustained.46

An analogous disposition was arrived at in the Wallem47 case cited by ATI wherein the Court held that the
insurancecontractmustbepresentedinevidenceinordertodeterminetheextentofitscoverage.Itwasfurther
ruledthereinthattheliabilityofthecarrierfromwhomreimbursementwasdemandedwasnotestablishedwith
certaintybecausetheallegedshortageincurredbythecargoeswasnotdefinitivelydetermined.48

Nevertheless,theruleisnotinflexible.Incertaininstances,theCourthasadmittedexceptionsbydeclaringthata
marineinsurancepolicyisdispensableevidenceinreimbursementclaimsinstitutedbytheinsurer.

InDelsanTransportLines,Inc.v.CA,49theCourtruledthattherightofsubrogationaccruessimplyuponpayment
bytheinsurancecompanyoftheinsuranceclaim.Hence,presentationinevidenceofthemarineinsurancepolicy
isnotindispensablebeforetheinsurermayrecoverfromthecommoncarriertheinsuredvalueofthelostcargoin
theexerciseofitssubrogatoryright.Thesubrogationreceipt,byitself,washeldsufficienttoestablishnotonlythe
relationship between the insurer and consignee, but also the amount paid to settle the insurance claim. The
presentationoftheinsurancecontractwasdeemednotfataltotheinsurerscauseofactionbecausethelossof
thecargoundoubtedlyoccurredwhileonboardthepetitionersvessel.50

The same rationale was the basis of the judgment in International Container Terminal Services, Inc. v. FGU
InsuranceCorporation,51whereinthearrastreoperatorwasfoundliableforthelostshipmentdespitethefailureof
theinsurancecompanytoofferinevidencetheinsurancecontractorpolicy.AsinDelsan,itwascertainthatthe
lossofthecargooccurredwhileinthepetitionerscustody.52

Based on the attendant facts of the instant case, the application of the exception is warranted. As discussed
1wphi1

above, it is already settled that the loss/damage to the GASIs shipment occurred while they were in ATIs
custody, possession and control as arrastre operator. Verily, the Certificate of Insurance53 and the Release of
Claim54presented as evidence sufficiently established FIRST LEPANTOs right to collect reimbursement as the
subrogeeoftheconsignee,GASI.

WithATIsliabilityhavingbeenpositivelyestablished,tostrictlyrequirethepresentationoftheinsurancecontract
will run counter to the principle of equity upon which the doctrine of subrogation is premised. Subrogation is
designed to promote and to accomplish justice and is the mode which equity adopts to compel the ultimate
paymentofadebtbyonewhoinjustice,equityandgoodconscienceoughttopay.55

Thepaymentbytheinsurertotheinsuredoperatesasanequitableassignmenttotheinsurerofalltheremedies
whichtheinsuredmayhaveagainstthethirdpartywhosenegligenceorwrongfulactcausedtheloss.Therightof
subrogation is not dependent upon, nor does it grow out of any privity of contract or upon payment by the
insurance company of the insurance claim. It accrues simply upon payment by the insurance company of the
insuranceclaim.56

ATIcannotinvokeprescription

ATI argued that the consignee, thru its insurer, FIRST LEPANTO is barred from seeking payment for the
lost/damagedshipmentbecausetheclaimletterofGASItoATIwasservedonlyonSeptember27,1996ormore
thanonemonthfromthedatetheshipmentwasdeliveredtotheconsigneeswarehouseonAugust9,1996.The
claimofGASIwasthusfiledbeyondthe15dayperiodstatedinATIsManagementContractwithPPAwhichin
turnwasreproducedinthegatepassesissuedtotheconsigneesbroker,PROVEN,asfollows:

IssuanceofthisGatePassConstitutesdeliverytoandreceiptbyconsigneeofthegoodsasdescribedabovein
good order and condition unless an accompanying x x x certificates duly issued and noted on the face of this
GatePassappeals.[sic]

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ThisGatepassissubjecttoalltermsandconditionsdefinedintheManagementContractbetweenthePhilippine
Port[s] Authority and Asian Terminals, Inc. and amendment thereto and alterations thereof particularly but not
limited to the [A]rticle VI thereof, limiting the contractors liability to [P]5,000.00 per package unless the
importationisotherwisespecifiedormanifestedorcommunicatedinwritingtogetherwiththeinvoicevalueand
supportedbyacertifiedpackinglisttothecontractorbytheinterestedpartyorpartiesbeforethedischargeofthe
goods and corresponding arrastre charges have been paid providing exception or restrictions from liability
releasing the contractor from liability among others unless a formal claim with the required annexes shall have
been filed with the contractor within fifteen (15) days from date of issuance by the contractors or certificate of
loss,damages,injury,orCertificateofnondelivery.57

The contention is bereft of merit. As clarified in Insurance Company of North America v. Asian Terminals,
Inc.,58substantialcompliancewiththe15daytimelimitationisallowedprovidedthattheconsigneehasmadea
provisionalclaimthruarequestforbadordersurveyorexaminationreport,viz:

Althoughtheformalclaimwasfiledbeyondthe15dayperiodfromtheissuanceoftheexaminationreportonthe
request for bad order survey, the purpose of the time limitations for the filing of claims had already been fully
satisfied by the request of the consignees broker for a bad order survey and by the examination report of the
arrastreoperatorontheresultthereof,asthearrastreoperatorhadbecomeawareofandhadverifiedthefacts
givingrisetoitsliability.Hence,thearrastreoperatorsufferednoprejudicebythelackofstrictcompliancewith
the15daylimitationtofiletheformalcomplaint.59(Citationsomitted)

Inthepresentcase,ATIwasnotifiedoftheloss/damagetothesubjectshipmentasearlyasAugust9,1996thru
aRequestforBadOrderSurvey60jointlypreparedbytheconsigneesbroker,PROVEN,andtherepresentatives
of ATI. For having submitted a provisional claim, GASI is thus deemed to have substantially complied with the
notice requirement to the arrastre operator notwithstanding that a formal claim was sent to the latter only on
September27,1996.ATIwasnotdeprivedthebestopportunitytoprobeimmediatelytheveracityofsuchclaims.
Verilythen,GASI,thruitssubrogeeFIRSTLEPANTO,isnotbarredbyfilingthehereinactionincourt.

ATI cannot rely on the ruling in Prudentiat61 because the consignee therein made no provisional claim thru
request for bad order survey and instead filed a claim for the first time after four months from receipt of the
shipment.

Attorney'sfeesandinterests

All told, ATI is liable to pay FIRST LEPANTO the amount of the Pl 65, 772.40 representing the insurance
indemnitypaidbythelattertoGASI.PursuanttoNacarv.GalleryFrames,62thesaidamountshallearnalegal
interestattherateofsixpercent(6%)perannumfromthedateoffinalityofthisjudgmentuntilitsfullsatisfaction.

AscorrectlyimposedbytheRTCandtheCA,tenpercent(10%)ofthejudgmentawardisreasonableasandfor
attorney'sfeesconsideringthelengthoftimethathaspassedinprosecutingtheclaim.63

WHEREFORE,premisesconsidered,thepetitionisherebyDENIED.TheDecisiondatedOctober10,2008ofthe
CourtofAppealsinCAG.R.SPNo.99021isherebyAFFIRMEDinsofarasitadjudgedliableandorderedAsian
Terminals, Inc., to pay First LepantoTaisho Insurance Corp., the amount of 165,772.40, ten percent (10%)
thereofasandforattorney'sfees,pluscostsofsuit.Thesaidamountshallearnlegalinterestattherateofsix
percent(6%)perannumfromthedateoffinalityofthisjudgmentuntilitsfullsatisfaction.

SOORDERED.

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