No. 1

GR No. 194589 September 21, 2015

BALAYAN BAY RURAL BANK, INC., represented by its Statutory Liquidator, THE PHILIPPINE DEPOSIT INSURANCE CORPORATION v NATIONAL LIVELIHOOD DEVELOPMENT CORPORATION

Commercial Law; Banking; Insolvency . After the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the trustee of its assets for the equal benefit of all the creditors, including depositors. The assets of the insolvent banking institution are held in trust for the equal benefit of all creditors, and after its insolvency, one cannot obtain an advantage or a preference over another by an attachment, execution or otherwise.

Same; Same; Same. The properties of an insolvent bank are not transferred by operation of law to the statutory receiver/liquidator but rather these assets are just held in trust to be distributed to its creditors after the liquidation proceedings in accordance with the rules on concurrence and preference of credits. The debtor’s properties are then deemed to have been conveyed to the Liquidator in trust for the benefit of creditors, stockholders and other persons in interest. This notwithstanding, any lien or preference to any property shall be recognized by the Liquidator in favor of the security or lienholder, to the extent allowed by law, in the implementation of the liquidation plan.

No. 2

G.R. No. 208802 October 14, 2015

G.V. FLORIDA TRANSPORT, INC., v HEIRS OF ROMEO L. BATTUNG, JR., represented by ROMEO BATTUNG, SR.,

Commercial Law; Transportation Law; Common Carrier. While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligence against them, it does not, however, make the carrier an insurer of the absolute safety of its passengers. Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance, and precaution in the carriage of passengers by common carriers to only such as human care and foresight can provide. What constitutes compliance with said duty is adjudged with due regard to all the circumstances.

Same; same; same. Where the injury sustained by the passenger was (1) in no way due to any defect in the means of transport or in the method of transporting, or (2) to the negligent or willful acts of the common carrier's employees with respect to the foregoing – such as when the injury arises wholly from causes created by strangers which the carrier had no control of or prior knowledge to prevent- there would be no issue regarding the common carrier's negligence in its duty to provide safe and suitable care, as well as competent employees in relation to its transport business; as such, the presumption of fault/negligence foisted under Article 1756 of the Civil Code should not apply.

Same; same; same. Case law states that the concept of diligence of a good father of a family connotes reasonable care consistent with that which an ordinarily prudent person would have observed when confronted with a similar situation.

No. 3

G.R. No. 205271 September 2, 2015

LAND BANK OF THE PHILIPPINES v BELLE CORPORATION

Commercial Law; Banking Law; mortgagee in good faith. When the purchaser or the mortgagee is a bank, the rule on innocent purchasers or mortgagees for value is applied more strictly.48 Being in the business of extending loans secured by real estate mortgage, banks are presumed to be familiar with the rules on land registration.49 Since the banking business is impressed with public interest, they are expected to be more cautious, to exercise a higher degree of diligence, care and prudence, than private individuals in their dealings, even those involving registered lands.50 Banks may not simply rely on the face of the certificate of title.51

Same;same;same. A person who deliberately ignores a significant fact that could create suspicion in an otherwise reasonable person is not a mortgagee in good faith. A mortgagee cannot close his eyes to facts which should put a reasonable man on his guard and claim that he acted in good faith under the belief that there was no defect in the title of the mortgagor.

No.4

GR No. 175278 September 23, 2015

GSIS FAMILY BANK -THRIFT BANK [Formerly Inc.], Comsavings Bank v BPI FAMILY BANK

Commercial Law; Corporation Law; Coporate Name. Section 18. Corporate name. – No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing or contrary to existing laws. When a change in the corporate name is approved, the Commission shall issue an amended certificate of incorporation under the amended name.

Same; same; same.To fall within the prohibition of the law on the right to the exclusive use of a corporate name, two requisites must be proven, namely:(1)that the complainant corporation acquired a prior right over the use of such corporate name; and (2) the proposed name is either (a)identical or (b) deceptive or confusingly similar to that of any existing corporation or to any other name already protected by law; or (c) patently deceptive, confusing or contrary to existing law.

Same; same; SEC jurisdiction. Findings of fact of quasi-judicial agencies, like the SEC, are generally accorded respect and even finality by this Court, if supported by substantial evidence, in recognition of their expertise on the specific matters under their consideration, more so if the same has been upheld by the appellate court, as in this case.

No. 5

G.R. No. 182208 October 15, 2015

ASIAN TERMINALS, INC. v ALLIED GUARANTEE INSURANCE, CO. INC.

Commercial Law; Transportation Law; Arrastre operator. The arrastre operator's principal work is that of handling cargo, so that its drivers/operators or employees should observe the standards and measures necessary to prevent losses and damage to shipments under its custody. In the performance of its obligations, an arrastre operator should observe the same degree of diligence as that required of a common carrier and a warehouseman. Being the custodian of the goods discharged from a vessel, an arrastre operator's duty is to take good care of the goods and to tum them over to the party entitled to their possession.

Same; same; same. In instances when the consignee claims any loss, the burden of proof is on the arrastre operator to show that it complied with the obligation to deliver the goods and that the losses were not due to its negligence or that of its employees.

No. 1

GR No. 194589 September 21, 2015

BALAYAN BAY RURAL BANK, INC., represented by its Statutory Liquidator, THE PHILIPPINE DEPOSIT INSURANCE CORPORATION v NATIONAL LIVELIHOOD DEVELOPMENT CORPORATION

Commercial Law; Banking Law; Insolvency . After the Monetary Board has declared that a bank is insolvent and has ordered it to cease operations, the Board becomes the trustee of its assets for the equal benefit of all the creditors, including depositors. The assets of the insolvent banking institution are held in trust for the equal benefit of all creditors, and after its insolvency, one cannot obtain an advantage or a preference over another by an attachment, execution or otherwise.

Same; Same; Same. The properties of an insolvent bank are not transferred by operation of law to the statutory receiver/liquidator but rather these assets are just held in trust to be distributed to its creditors after the liquidation proceedings in accordance with the rules on concurrence and preference of credits. The debtor’s properties are then deemed to have been conveyed to the Liquidator in trust for the benefit of creditors, stockholders and other persons in interest. This notwithstanding, any lien or preference to any property shall be recognized by the Liquidator in favor of the security or lienholder, to the extent allowed by law, in the implementation of the liquidation plan.

PEREZ, J.:

FACTS: The case sprouts from a collection suit filed by the respondent against the petitioner bank prior to the declaration of the Monetary Board that it will be placed on receivership. And during the pendency of the case, the said declaration was made appointing PDIC as the receiver of the petitioner bank pursuant to RA 7653. After being placed into receivership, the respondent filed a motion for substitution invoking Section 19, Rule 3 of the Revised Rules of Court and claimed that by virtue of transfer of interest of the petitioner bank to the PDIC, the latter may be substituted as party or joined with the original party. Despite opposition, the trial court granted the motion.

Contending that the substitution is not proper in the instant case since the PDIC is not the real party in interest but was merely tasked to keep the assets of the bank for the benefit of its creditors, petitioner bank raised the matter· before the SC on question of law via Petition for Review on Certiorari.

ISSUE: Whether or not substitution of the PDIC as defendant or its inclusion therein as co-defendant is contrary to law.

HELD: NEGATIVE. Upon the announcement of the Monetary Board that a particular institution is insolvent, it will become its trustee for all its assets for the equal advantage of the institution’s creditors. The PDIC, being declared as herein petitioner bank’s statutory liquidator, shall collate all its assets and liabilities and be liable for its administration.

With this, the PDIC, being a fiduciary of the petitioner bank, may prosecute or defend the case as a representative party but, the petitioner bank will still be included in the case since it still remains as the real party in interest as stated in Sec. 3, Rule 3 of the Revised Rules of Court. The PDIC merely remains as a representative party, which, under the New Central Bank Act is given the authority to conserve and take care of the petitioner bank to the benefit of all its creditors.

However, the Court firmly disagreed with the reliance of the respondent with the transfer of interest pendente lite as the justification for the substitution for it is contrary to law to declare any transfer of interest in case of receivership. The assets of the insolvent bank is not transferred, but merely held in trust to be distributed to its creditors after the liquidation proceedings in accordance with the rules on concurrence and preference of credits. In addition, there is no dissolution of the insolvent’s bank legal personality merely because it is placed under receivership. It is not replaced nor substituted.

Hence, concluding that PDIC is a mere representative of the petitioner bank and not the real party in interest, which in this case still remains to be the petitioner bank, both entities must be named as defendants in the collection suit filed by the respondent. The petition is denied.

No. 2

G.R. No. 208802 October 14, 2015

G.V. FLORIDA TRANSPORT, INC., v HEIRS OF ROMEO L. BATTUNG, JR., represented by ROMEO BATTUNG, SR.,

Commercial Law; Transportation Law; Common Carrier. While the law requires the highest degree of diligence from common carriers in the safe transport of their passengers and creates a presumption of negligence against them, it does not, however, make the carrier an insurer of the absolute safety of its passengers. Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance, and precaution in the carriage of passengers by common carriers to only such as human care and foresight can provide. What constitutes compliance with said duty is adjudged with due regard to all the circumstances.

Same; same; same. Where the injury sustained by the passenger was (1) in no way due to any defect in the means of transport or in the method of transporting, or (2) to the negligent or willful acts of the common carrier's employees with respect to the foregoing – such as when the injury arises wholly from causes created by strangers which the carrier had no control of or prior knowledge to prevent- there would be no issue regarding the common carrier's negligence in its duty to provide safe and suitable care, as well as competent employees in relation to its transport business; as such, the presumption of fault/negligence foisted under Article 1756 of the Civil Code should not apply.

Same; same; same. Case law states that the concept of diligence of a good father of a family connotes reasonable care consistent with that which an

ordinarily prudent person would have observed when confronted with a similar situation.

PERLAS- BERNABE J.:

FACTS: The case started on a shooting incident wherein the victim Battung, was shot by a co- passenger while riding the petitioner’s bus on a trip going to Manila. While on their way, the bus driver stopped the vehicle, alighted and checked the tires. It is at this moment when a co- passenger shot the victim who was sitting at the first row and immediately went down the bus. The conductor, after seeing what happened, informed the driver and they immediately brought Battung to the hospital but was declared dead on arrival. Hence, a complaint was filed by the respondents against the driver, conductor and the petitioner corporation for civil liability alleging breach on the contract of carriage on the part of the latter thereby causing the death of Battung. The respondents alleged that being a common carrier, the petitioner is bound to observe extraordinary care and diligence in ensuring the safety of passenger. The RTC ruled in favor of the respondents and affirmed by the CA. Hence, this appeal.

ISSUE: Whether or not petitioner is liable for damages to respondent.

HELD: NEGATIVE. Article 1756 of the Civil Code provides that in case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755. However a common carrier is not an insurer of the safety of its passengers as stressed by the law on several jurisprudence of the SC.

With us is a mere presumption of fault on the part of the common carrier which, of course, may be rebutted upon showing of proof that exercised extraordinary diligence as required by law in the performance of its contractual obligation, or that the injury suffered by the passenger was solely due to a fortuitous event.

It is therefore vital for the carrier to prove that the injury or death does not arise out of their negligence or of its employees in carrying the passenger for transport. In the case at bar, the death is neither caused by the negligence of the petitioner corporation nor the driver and conductor but is caused by a stealthy action of a co- passenger who after killing the victim, immediately alighted. Therefore, the petitioner’s act of extraordinary diligence could not be put into question and no presumption of fault or negligence could be used.

Hence, in this case, the applicable provision is Article 1763 of the Civil Code, which states that a common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers, if the common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission, which indeed requires a lesser degree of diligence on the part of the common carrier. And here, the prosecution still failed to prove negligence on the part of the petitioner. No danger or suspicious action was foreseen by the petitioner or any of its employees from the time the killers went inside the bus, when they are being ticketed or asked of their fare that would require any heightened alert and security measures.

Consequently, it cannot be settled that there is a failure to employ diligence of a good father of a family by the petitioner or any of its employees in relation to its responsibility under Article 1763 of the Civil Code. As such, petitioner cannot altogether be held civilly liable.

No. 3

G.R. No. 205271 September 2, 2015

LAND BANK OF THE PHILIPPINES v BELLE CORPORATION

Commercial Law; Banking Law; mortgagee in good faith. When the purchaser or the mortgagee is a bank, the rule on innocent purchasers or mortgagees for value is applied more strictly.48 Being in the business of extending loans secured by real estate mortgage, banks are presumed to be familiar with the rules on land registration.49 Since the banking business is impressed with public interest, they are expected to be more cautious, to exercise a higher degree of diligence, care and prudence, than private individuals in their dealings, even those involving registered lands.50 Banks may not simply rely on the face of the certificate of title.51

Same;same;same. A person who deliberately ignores a significant fact that could create suspicion in an otherwise reasonable person is not a mortgagee in good faith. A mortgagee cannot close his eyes to facts which should put a reasonable man on his guard and claim that he acted in good faith under the belief that there was no defect in the title of the mortgagor.

PERALTA, J.:

FACTS: The suit started upon a land dispute between the respondent corporation and a certain Bautista wherein the latter contested that it is the owner of the land being in possession of the respondent corporation which is involved in the development and creation of leisure and recreational areas in Tagaytay area such as the Tagaytay Highlands. The respondent filed a suit for quieting of title with TRO upon receiving a letter from Bautista ordering the respondent to vacate the subject area and stopped its operation which was made without her consent. During the pendency of the case, the respondent was informed that Bautista is no longer the registered owner of the disputed area as it was already foreclosed by the petitioner bank and a new TCT was registered in the bank’ name. Hence, a Motion for Leave to File Amended Petition impleading petitioner as indispensable party was filed by the respondent corporation which was granted by the trial court. Apparently, Bautista mortgaged the property to the bank without informing respondent. However, because of the failure to pay the loan obtained, the mortgage was foreclosed in favor of the bank. Claiming that it is a mortgagee on good faith, the petitioner bank contended that observed due diligence and prudence expected of it as a banking institution. Prior to the approval of the loan application, there as a verification of the status of the collateral by its representative which then revealed that the subject property was registered in the name of Bautista and that the same is free and clear of any lien or encumbrance. Further, no adverse ownership or interest was found upon ocular inspection. Therefore, in the absence of

anything to excite or arouse suspicion, petitioner is legally justified to rely on the mortgagor and what appears on the face of her certificate of title.

The RTC ruled against the respondents but was reversed and set aside by the CA upon appeal. The CA ruled that the respondent corporation is the true and registered owner of the disputed area and that the petitioner is not to be considered a mortgagee in good faith. It made notice that not once did the bank made a testimony that it conducted an investigation on the status of the property despite the fact that it forms part of the ingress and egress of the well-known Tagaytay Highlands since 1990 or several years before it accepted the property as collateral from Bautista. Since its negligence was the primary, immediate and overriding reason, petitioner must bear the loss of the disputed property. Hence, this appeal.

ISSUE: Whether or not the petitioner is a mortgagee in good faith hence not liable for the loss sustained by the corporation.

HELD: NEGATIVE. The Court, upon investigation and taking into account of the facts and evidence of the case ruled that the corporation is the legitimate owner of the disputed area. And in connection with this, the determination of liability on the part of the petitioner yielded in the positive.

As held in several jurisprudence, there is a stricter rule provided by the law when a bank is questioned as to its good faith as a mortgagee. More caution and a higher degree of diligence are expected from a bank by reason of it being imbued with public interest. Hence, it could not just merely rely on the face of the certificate of title. No assumption could be made that simply because the title offered as security is on its face free of any encumbrances or lien, the bank will already be relieved of any obligation of ascertaining the verified status of the property and inspecting it for mortgage purposes. It is of judicial notice that the standard practice for banks before approving a loan is to send its representatives to the property offered as collateral to assess its actual condition, verify the genuineness of the title, and investigate who is/are its real owner/s and actual possessors.

However, such standard was not achieved in this case. Despite existence of a defect on the title and ignorance of an existing problem upon its examination that there is a traversing road within the disputed area and still sticking with the genuineness of the title presented by Bautista, the bank could not claim good faith on its part. The facts show the existence of several circumstances that would arouse suspicion on the part of the bank

but there is a willful closing of their eyes and refusal to believe on such defect. After encountering a dead end in the DENR’s Land Management Section – Region IV and the Tax Mapping Section of the Tagaytay City Assessor’s Office, it manifestly failed to inquire further on the identity of possible adverse claimants and the status of their occupancy. Had there been an inquiry with Bautista or any of the occupants of the nearby area of the existence of the traversing access road, it could easily show that there is indeed defect on the title Bautista. There should have been an exhaustive investigation but none was made. The acceptance of the collateral despite the existing facts constitutes gross negligence on the part of the bank. Hence, the bank could not be considered a mortgagee in good faith.

No. 4

GR No. 175278 September 23, 2015 GSIS FAMILY BANK -THRIFT BANK [Formerly Inc.], Comsavings Bank v BPI FAMILY BANK

Commercial Law; Corporation Law; Coporate Name. Section 18. Corporate name. – No corporate name may be allowed by the Securities and Exchange Commission if the proposed name is identical or deceptively or confusingly similar to that of any existing corporation or to any other name already protected by law or is patently deceptive, confusing or contrary to existing laws. When a change in the corporate name is approved, the Commission shall issue an amended certificate of incorporation under the amended name.

Same; same; same.To fall within the prohibition of the law on the right to the exclusive use of a corporate name, two requisites must be proven, namely:(1)that the complainant corporation acquired a prior right over the use of such corporate name; and (2) the proposed name is either (a)identical or (b) deceptive or confusingly similar to that of any existing corporation or to any other name already protected by law; or (c) patently deceptive, confusing or contrary to existing law.

Same; same; SEC jurisdiction. Findings of fact of quasi-judicial agencies, like the SEC, are generally accorded respect and even finality by this

Court, if supported by substantial evidence, in recognition of their expertise on the specific matters under their consideration, more so if the same has been upheld by the appellate court, as in this case.

JARDELEZA, J.:

FACTS: The petitioner was first organized under the name Royal Savings Bank and started its operations in 1971. However, due to liquidity problems, it was placed under receivership on where GSIS acquired ownership over it. To improve its marketability, it applied to the SEC an application to change its corporate name to “GSIS Family Bank, a Thrift Bank.” same as with BSP and DTI. The two latter entities approved the application and petitioner started its operation with its new name as per DTI Certificate of Registration and Monetary Board Circular Approval. On the other hand, the respondent started using its name BPI Family Savings Bank in the year 1985 upon merger of BPI and Family Bank and Trust Company. Since its incorporation, the bank has been commonly known as “Family Bank.” BPI Family Savings Bank then registered with the Bureau of Domestic Trade the trade or business name “BPI Family Bank,” and acquired a reputation and goodwill under the name.

Upon being informed that the petitioner applied for the use of “Family Bank” as its corporate name, the respondent filed a petition before the SEC to disallow or prevent the registration of the name “GSIS Family Bank” or any other corporate name with the words “Family Bank” in it. The respondent claimed exclusive ownership with the said name and it will create and is already creating confusion on the part of the public between the two banking institutions.

The SEC CRMD ruled in favor of the respondent holding that it acquired prior right over the corporate name arising from its long and nationwide use of the said name. Upon appeal, the CA affirmed the decision of the SEC. It further ruled that the approvals by the BSP and by the DTI of petitioner’s application to use the name “GSIS Family Bank” do not constitute authority for its lawful and valid use. It held that the SEC has absolute jurisdiction, supervision and control over all corporations. Hence, this appeal by petitioner.

ISSUE: Whether or not the petitioner is entitled to the change and use of its corporate name “GSIS Family Bank, a Thrift Bank.”

HELD: NEGATIVE. The Corporation Code provides the rule on corporate name and the two main requisites for the exclusive use of corporate name are present in this case in favor of the respondent bank. The said bank has successfully established prior right over the name. “Family Bank”. Upon its incorporation in 1969, it is already named as Family Savings Bank and later on changed to BPI Family Savings Bank I 1985 whereas the petitioner was incorporated as GSIS Family Bank- A Thrift Bank 17 years after, or only in 2002. The Court, applying the priority rule, ruled that respondent has the prior right over the use of the corporate name.

The second requisite likewise obtains on two points: the proposed name is (a) identical or (b) deceptive or confusingly similar to that of any existing corporation or to any other name already protected by law. Section 3 of the Revised Guidelines in the Approval of Corporate or Partnership Name states that if there be identical, misleading or confusingly similar name to one already registered by another corporation or partnership with the SEC, the proposed name must contain at least one distinctive word different from the name of the company already registered.

In this case, the mere adding of the words “GSIS” and “Thrift” does not satisfy the requirements provided. GSIS is merely an acronym of the proper name for which the petitioner is identified and the word thrift merely indicates a classification or kind of bank the petitioner is. Such adding of the word would not create much distinction simply because both entities are involved in the banking business. The second point likewise exists. In determining the existence of confusing similarity in corporate names, the test is whether the similarity is such as to mislead a person using ordinary care and discrimination. And even without such proof of actual confusion between the two corporate names, it suffices that confusion is probable or likely to occur. Respondent has proved confusion not just on their employees but even on the public of the change of name of the petitioner and its connection with the respondent bank. Furthermore, in contrast to the allegation of the petitioner, “Family,” as used in respondent's corporate name, is not generic. It cannot be separated from the word “bank”.

SEC decisions are given much accord by this Court especially if it is affirmed by the CA, as in this case. The SEC is the government entity fully accorded with absolute jurisdiction as to the administration or management of corporations in the country. It has the duty to prevent any confusion on the corporate name not just for the sake of this entities but more so for the protection of the public. There is a correct application of Section 18 of the

Corporation Code by the SEC. the DTI AND BSP decisions granting petitioner’s application must bow down to SEC’s decision. Hence, the SC denied the petition.

No.5

G.R. No. 182208 October 15, 2015

ASIAN TERMINALS, INC. v ALLIED GUARANTEE INSURANCE, CO. INC.

Commercial Law; Transportation Law; Arrastre operator. The arrastre operator's principal work is that of handling cargo, so that its drivers/operators or employees should observe the standards and measures necessary to prevent losses and damage to shipments under its custody. In the performance of its obligations, an arrastre operator should observe the same degree of diligence as that required of a common carrier and a warehouseman. Being the custodian of the goods discharged from a vessel, an arrastre operator's duty is to take good care of the goods and to tum them over to the party entitled to their possession.

Same; same; same. In instances when the consignee claims any loss, the burden of proof is on the arrastre operator to show that it complied with the obligation to deliver the goods and that the losses were not due to its negligence or that of its employees.

PERALTA, J.:

FACTS: The petitioner is an arrastre operator. A shipment of kraft linear board from US to be delivered to San Miguel Corp in Manila, was made on board M/V Nicole owned by the Transocean, a foreign corporation whose Philippine representative is Philippine Transmarine. Upon arrival and shortly thereafter, the said linear boards were offloaded from the vessel to the arrastre petitioner. However, upon assessment, 158 rolls of the goods were reported to be damaged during shipping. Further, upon withdrawal to the arrastre to be delivered first to San Miguel’s broker Dynamic and later on to consignee San Miguel, another 54 rolls of board were reported to be damaged. The respondent Allied, being the insurer of the goods, paid San Miguel of the damage and later on seek reimbursement against Transocean, Philippine Transmarine, Dynamic and petitioner for the lost suffered in paying the consignee San Miguel by filing a Complaint in RTC Makati. It alleged that from the port of origin, the goods were in good condition and it was merely damaged due to the negligence of the abovementioned

defendants. However, petitioner denied the allegations contending that the goods are already in bad condition when they deliver it to the broker and consignee and assailed exercise of due diligence in the taking care of the said goods. The RTC however ruled in favor of Allied and found all the defendants liable for losses. Upon appeal, the CA affirmed the decision of the RTC. Hence, this appeal made only by the petitioner. Petitioner claims that the CA erroneously failed to note the so-called Tum Over Survey of Bad Order Cargoes and the Requests for Bad Order Survey which supposedly could release it from liability for the damaged shipment. The reports were apparently made prior to the shipment's turnover from petitioner to Dynamic and they purportedly show that no additional loss or damage happened while the shipment was in petitioner's custody as the reports only mention the 158 rolls that were damaged during shipping or prior to petitioner’s possession hence not liable to the additional 54 damaged rolls.

ISSUE: Whether or not the petitioner shall be held liable for the losses sustained by respondent.

HELD: AFFIRMATIVE. The petitioner wanted the Court to reexamine the decisions and evidences presented before the RTC and CA who have the same ruling which is not allowed by law, except upon the existence of exceptions allowed. However, none of those exists in this case.

There is no misapprehension of facts nor the evidences presented by the petitioner such as the Tum Over Survey of Bad Order Cargoes and the Requests for Bad Order Survey. The trial court correctly gave little credence to the said reports since between the arrastre operator and the consignee exist a relationship similar to that of a warehouseman and a depositor. The relationship between the consignee and the common carrier is similar to that of the consignee and the arrastre operator. Both the arrastre and the carrier are, therefore, charged with and responsible to deliver the goods in good condition to the consignee.

The RTC correctly held that the broker, Dynamic, cannot alone be held liable for the additional 54 rolls of damaged goods since such damage happened (a) while the goods were in the custody of the arrastre petitioner; (b) when they were in transition from petitioner's custody to that of Dynamic; and (c) during Dynamic's custody. While the RTC could not conclude with pinpoint accuracy who among the ATI and Dynamic caused which particular damage and in what proportion or quantity, it was unblemished that both ATI and Dynamic failed to discharge the burden of proving that damage on the 54 rolls did not occur during their custody. It was proven that during petitioner’s custody and while it will transfer the goods to the broker, there was a use of wrong lifting equipment thereby deliberating the cause of such damage. It is a finding of fact of the lower court which the SC will not disturb.

In its operations, the arrastre operator must observe the same degree of diligence of that required of a common carrier and a warehouseman. And it must prove more than a fact that other parties might be liable for the losses but it must prove that it itself exercised due care in handling thereof, that it complied with the obligation to deliver the goods and that the losses were not due to its negligence or that of its employees.

As established, there was negligence in both petitioner and Dynamic's performance of their duties in the handling; storage and delivery of the subject shipment to San Miguel thereby resulting in the loss of 54 rolls of kraft linear board, solidary liability for such loss shall be imposed.