Reyma Brokerage, Inc. vs. Philippine Home Assurance Corporation

A bill of lading that contains an express acknowledgment by the carrier of the number of packages—beyond a mere “said to contain” notation—operates as prima facie evidence of receipt of the goods as therein described. The party that receives the sealed containers with the seals intact is presumed to have received the full shipment, and the burden shifts to that party to prove by contrary evidence that the loss did not occur while the goods were in its custody; unrebutted, the prima facie evidence is sufficient to establish liability.

RFM Corporation was the consignee of a shipment of 2,680 cartons of hard frozen boneless beef loaded in five sealed containers at Fremantle, Australia, aboard the vessel MS “Malmros Monsoon.” The cargo was covered by a marine cargo insurance policy issued by Philippine Home Assurance Corporation. Upon arrival in Manila, the containers were discharged to the arrastre operator and later withdrawn by Reyma Brokerage, Inc. for delivery to the consignee’s cold storage. When the containers were stripped the following morning, a shortfall of 203 cartons was discovered. The insurer paid the consignee’s claim and, as subrogee, sought recovery from the broker.

• The Shipment and Bill of Lading: On October 2, 1979, 2,680 cartons of hard frozen boneless beef were shipped from Brisbane, Australia, aboard the vessel MS “Malmros Monsoon” consigned to RFM Corporation under Bill of Lading No. 53149. The cargo was packed in five sealed, shipper-packed containers. The bill of lading stated: “SHIPPED ON BOARD FIVE SHIPPER PACKED CONTAINERS SAID TO CONTAIN 2680 CARTONS …” It further bore printed stipulations that weight, measurement, marks, numbers, quality, contents, and value were furnished by the merchant, had not been checked, and were to be considered unknown unless expressly acknowledged and agreed to. At the bottom, the bill of lading contained the statement: “This bill of lading is a receipt only for the number of packages shown above,” and was duly signed by the carrier.

• Arrival and Transfer: The vessel arrived at Pier 3, Port of Manila, on October 13, 1979. The containers were discharged into the possession and custody of the arrastre operator, with seals intact. They were subsequently transferred to the Reefer Van Area of Pier 13.

• Withdrawal and Delivery by Petitioner: On October 22, 1979, petitioner Reyma Brokerage, Inc., as the broker, loaded the containers onto two trucks with a driver and helper each and withdrew them for delivery to Grech Food Industries Cold Storage in Pasig, Rizal. The delivery arrived at 1:00 a.m. the following day, October 23, 1979—a lapse of more than nine hours for a trip that normally takes about one hour, with no heavy traffic along the route.

• Discovery of Shortage: At 9:00 a.m. on October 23, 1979, the containers were stripped in the presence of petitioner’s representative and the consignee. Upon inventory of Container No. BROU-4306561, a shortage of 203 cartons was discovered. The consignee filed a claim for the missing goods, which was denied. The consignee then filed a claim with private respondent Philippine Home Assurance Corporation under its marine cargo insurance policy.

• Insurance Payment and Subrogation: The insurer paid the consignee P88,658.22 and, by virtue of subrogation, pursued recovery from petitioner. In its answer, petitioner admitted that all containerized shipments arrived in Manila with seals intact and that it received the sealed containers from the arrastre operator with seals intact.

• Applicability of US Lines Doctrine: Petitioner maintained that under United States Lines Inc. v. Commissioner of Customs, a “said-to-contain” bill of lading for sealed containers is a receipt only for the containers, not their contents, because the carrier had no opportunity to verify the quantity. The present case, it argued, is identical, thus petitioner cannot be held liable for the shortage.

• Lack of Evidence of Tampering: Petitioner contended that no evidence of tampering of seals was presented; presumptions cannot substitute for proof, and the plaintiff must rely on the strength of its own evidence, not the weakness of the defense.

• Possibility of Prior Tampering: If the tampering was done so ingeniously that it could not be detected unless the seal was separated from the container, petitioner argued that the containers could have been tampered with from the very start—before petitioner took possession—without anyone noticing.

• Non-Joinder of Indispensable Parties: Petitioner asserted that it was procedurally and equitably improper for private respondent to sue petitioner alone without impleading the carrier and the arrastre contractor as alternative defendants; petitioner should not be singled out.

• Prescription under COGSA: Petitioner invoked the one-year prescriptive period under the Carriage of Goods by Sea Act, arguing that the subrogee cannot have more rights than the consignee, and the action, brought beyond one year from delivery, was barred.

• Express Acknowledgment Overrides “Said to Contain”: Respondent countered that the bill of lading contained not merely a “said to contain” notation but an express acknowledgment that it was a receipt for the number of packages shown. This explicit admission by the carrier distinguishes the case from the US Lines doctrine and makes the bill of lading prima facie evidence of receipt of the goods as described.

• Admission of Intact Seals and Unexplained Delay: Respondent argued that petitioner’s own answer admitted receiving the sealed containers with seals intact. The unauthorized and unexplained nine-hour delay in delivery, when the normal travel time was only one hour, unequivocally indicated that the shortage occurred while the cargo was in petitioner’s exclusive custody and control.

• Liability under “Said-to-Contain” Bill of Lading: Whether the carrier’s express acknowledgment of the number of packages in the bill of lading—despite the “said to contain” notation—renders the document prima facie evidence that the goods were received as described, thereby defeating the defense that the bill of lading is a receipt only for the containers and not their contents.

• Burden of Proof and Attribution of Loss: Whether petitioner’s admission that the containers were received with seals intact, coupled with the unexplained nine-hour delay in delivery, sufficiently shifted the burden of proof to petitioner and established that the loss of 203 cartons occurred while the goods were in its custody.

• Prescription: Whether the insurer’s subrogated claim is barred by the one-year prescriptive period under the Carriage of Goods by Sea Act or, alternatively, whether the applicable prescriptive period is ten years under the Civil Code, and whether the defense of prescription was waived.

• Liability under “Said-to-Contain” Bill of Lading: The bill of lading was held to be prima facie evidence of receipt of the goods as described. The carrier, by stipulating that the bill of lading “is a receipt only for the number of packages shown above” and affixing its signature, made an express acknowledgment of the quantity of cargo. This express acknowledgment takes the case out of the United States Lines doctrine, which applies only where the carrier simply admits the shipper’s information without independent verification. The “said to contain” notation must yield to the carrier’s explicit admission. Under Section 3, paragraph 4, Title I of the Carriage of Goods by Sea Act, the bill of lading shall be prima facie evidence of receipt by the carrier of the goods as therein described.

• Burden of Proof and Attribution of Loss: The admissions in petitioner’s answer—that all containers arrived with seals intact and that it received the sealed containers from the arrastre operator with seals intact—are binding. Having prima facie received all the shipments without shortage, petitioner bore the burden to prove the contrary. Unrebutted prima facie evidence is sufficient as a matter of law to establish the ultimate fact it tends to prove; it can be overcome only by contrary proof, not by surmises or speculations. The record showed no contrary evidence. Moreover, the delivery of the containers took over nine hours for a trip that normally requires only one hour, a circumstance that militated against petitioner’s claim that the loss occurred outside its custody. Accordingly, the loss of the 203 cartons was properly attributed to petitioner.

• Prescription: The prescription defense, although pleaded in the answer, was never pursued in the lower court or in the Court of Appeals. It was therefore waived and could not be raised for the first time before the Supreme Court. Even if it were considered, the one-year prescriptive period under the Carriage of Goods by Sea Act applies only to the carrier and the ship. Petitioner is a broker, not a carrier, and the applicable prescriptive period for the action is ten years under the Civil Code. Ten years had not elapsed from the delivery of the shipment.

• Prima facie effect of bill of lading with express acknowledgment — Where a bill of lading for containerized cargo contains an express acknowledgment by the carrier of the number of packages (e.g., a stipulation that it is a receipt for the number of packages shown), such acknowledgment overrides a “said to contain” notation. The bill of lading then serves as prima facie evidence that the carrier received the goods as described, and the burden shifts to the party receiving the sealed containers to prove that any shortage did not occur while the goods were in its custody.

• Binding effect of admissions in pleadings — Facts alleged in a party’s pleadings are deemed admissions of that party and are binding upon it. Such admissions may be used to establish prima facie receipt of the full shipment.

• Rebuttal of prima facie evidence — Prima facie evidence, if unrebutted, remains sufficient as a matter of law to establish the proposition it supports. It can be overcome only by contrary proof, not by mere surmises, conjectures, or speculations.

• Waiver of prescription defense — A defense of prescription that is alleged in the answer but not pursued in subsequent proceedings is deemed waived and cannot be raised for the first time on appeal.

• Prescriptive period for claims against a broker — The one-year prescriptive period under the Carriage of Goods by Sea Act applies to the carrier and the ship. As to a broker who is not a carrier, the applicable prescriptive period is ten years under the Civil Code, counted from delivery of the goods.

• “Evidently, the carrier, by signifying in the bill of lading that ‘it is a receipt … for the number of packages shown above,’ had explicitly admitted that the containerized shipments had actually the number of packages declared by the shipper in the bill of lading. … Therefore, the phrase ‘said to contain’ also appearing in the bill of lading must give way to this reality.”

• “[T]he bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described … It has been authoritatively said that: … prima facie evidence is of course, like all evidence susceptible to rebuttal; but unrebutted it remains sufficient, as a matter of law to establish the ultimate proposition it purports to prove. It goes without saying that such evidence can only be overcome by contrary proof and not by mere surmises and speculations.”

• “[T]he facts alleged in a party’s pleading are deemed admissions of that party and binding upon it.”

• “The petitioner can not now be allowed to raise this issue to this Court after such waiver or abandonment. … [T]he petitioner is not a carrier or a vessel or a charterer or the legal holder of the bill of lading. The petitioner is the broker. … The prescriptive period of this cause of action is ten years.”

• United States Lines Inc. v. Commissioner of Customs, G.R. No. 73490, June 18, 1987, 151 SCRA 189 — Distinguished. The doctrine that a “said-to-contain” bill of lading for sealed containers is a receipt only for the containers and not their contents was held inapplicable because, in this case, the carrier made an express acknowledgment of the number of packages.

• Phoenix Assurance Co., Ltd. v. United States Lines, No. L-24033, February 22, 1968, 22 SCRA 674 — Followed. Cited for the dual nature of a bill of lading as both a receipt and a contract, and for the rule that it recites and describes the goods as to quantity, weight, and other particulars.

• Granada v. PNB, No. L-20745, September 2, 1966, 18 SCRA 1 — Followed. Applied for the rule that allegations in a party’s pleading constitute binding admissions.

• Insurance Co. of North America v. Phil. Ports Terminal, Inc., L-6420, July 18, 1955, 97 Phil. 288, and Sveriges Angfartygs Assurans Forening v. Qua Chee Gan, No. L-9757, April 16, 1959, 105 Phil. 473 — Relied upon for the proposition that the applicable prescriptive period for an action against a party other than the carrier is ten years.

• Section 3, paragraph 4, Title I, Carriage of Goods by Sea Act — Provides that a bill of lading shall be prima facie evidence of the receipt by the carrier of the goods as therein described. Applied to give probative weight to the carrier’s express acknowledgment of the number of packages.

• Section 2(6), paragraph 4, Carriage of Goods by Sea Act — Prescribes a one-year period for suits against the carrier for loss or damage. Held inapplicable to petitioner because it is a broker, not a carrier.

• Article 1144, Civil Code (in relation to Article 190, now Article 1144, and Section 43, Act No. 190) — Establishes a ten-year prescriptive period for actions upon a written contract. Applied to the subrogated claim against the broker.

• Rule 45, Rules of Court — Governs appeals by certiorari to the Supreme Court; invoked to uphold the CA decision in the absence of any showing that it overlooked facts of substance and value.

Melencio-Herrera (Chairperson), Paras, Padilla, and Regalado, JJ., concurred.