Final Answer?
Wednesday, March 14th, 2007REPUBLIC OF THE PHILIPPINES REGIONAL TRIAL COURT NATIONAL CAPITAL JUDICIAL REGION BRANCH ________, MAKATI CITY XY INSURANCE COMPANY, CIVIL CASE __________ Plaintiff, FOR: Recovery of Sum of Money For Reimbursement — versus– A, Or PERUVIAN SHIPPING LINES, Or ARRASTRE OPERATOR XX, Defendants. x————————————————-x A N S W E R COMES NOW the Defendant, ARRASTRE OPERATOR XX, with principal office at North harbor Manila, and hereby represented by the undersigned counsel whose office is located at 35th Floor Enterprise Tower, Ayala Avenue, Makati City, where it may be served with summons and other court processes at said address, and in answer to plaintiff’s complaint, unto this Honorable Court respectfully alleges: 1. That defendant respectfully admits the averments in paragraphs 1,2,3, and 4 and paragraphs 11 and 12 of the complaint; 2. That defendant has no knowledge or sufficient information to form a belief as to the truth of the averments contained in paragraphs 5, 6, 7, 8, 9, 10, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23 and 24 of the complaint; 3. That defendant admits the averments in paragraph 13 but only with respect to subsections (d), (e), (f) , and (h), and that defendant has no knowledge or sufficient information to form a belief as to the truth of the rest of the allegations; 4. That defendant specifically denies the allegations contained in paragraph 25 of the complaint the truth being that in the performance of its job, herein defendant arrastre operator did not and could have not executed a contract with buyer X that will govern their respective rights and obligations. And assuming that it did execute one, such contract is simply ultra vires and will be given without any effect because there are already governing terms and conditions provided for in such circumstances. What governs is the Arrastre Management Contract executed between herein defendant with the Bureau of Customs. The Arraste Management Contract entered into by and between the operator/contractor and the Bureau of Customs was pursuant to the provisions of Act No. 3002, as amended by Act No. 3851, Commonwealth Act No. 285 and Republic Act No. 140 and subsequently, pursuant to Section 1231 of the Tariff and Customs Code (Republic Act No 1937). It is a stipulation pour autrui within the meaning of Article 1311 of the Civil Code for the benefit of the consignee of the goods. It is binding on the consignee by virtue of its being incorporated in the gate pass and delivery receipt which must be presented by the consignee before delivery can be effected. The insurer, as successor-in-interest of the consignee, is likewise bound by the said management contract. Upon taking delivery of the cargo, a consignee (and necessarily its successor-in- interest) tacitly accepts the provisions of the said management contract, including those which are intended to limit the liability of one of the contracting parties, the arrastre operator. Plaintiff XY Insurance company as the necessary successor-in-interest of the consignee is thus bound by the provisions of the management contract, particularly paragraph 15, herein attached as Annex “A” with the signatures of the parties (Arrastre Operator and a representative of the Bureau of Customs) and date marked respectively as Annex “A-1” and Annex “A-2” and made an integral part hereof, with respect to the provision thus stated: “xxx the arrastre operator shall not be liable for all loss, damages and impairment suffered by the goods before the goods reached its custody or those suffered after the goods left the custody of the arrastre operator, or those suffered by the goods by reason of force majeure, or by virtue of the nature and defect of the items which shall be for the accounts and risks of the consignor or sender, Provided that if the cargo was received in an impaired or damaged condition or on the occasion of any loss, that it shall be annotated in the Certified packing list and cargo receipt xxx” (italics supplied) The consignee cannot be permitted to take advantage of the favorable provisions of the said management contract and reject those that are disadvantageous to it. The management contract is enforceable against the consignee because, as already noted, it was incorporated in the “Gate Pass” and “Delivery Permit” herein attached as Annex “B” and Annex “C” respectively, together with the signatures and dates marked correspondingly as Annex “B-1” and Annex “B-2” and Annex “C-1” and Annex “C-2”, and made integral part hereof. The consignee obtained delivery of the cargo by means of those documents, thus, the arrastre operator’s liability is limited to losses, impairment and injury suffered by the goods from the time it is officially received by herein defendant until the time it leaves its custody and does not extend to those suffered before delivery or those suffered after the goods left its custody; 5. That defendant denies the averments contained in paragraph 26 of the complaint the truth being that herein defendant received the goods in bad order condition as evidenced by “Bad Order Cargo Receipt” issued by the Peruvian Shipping Lines, a copy of which is attached as Annex “D” with the signature of the parties (ship captain and herein defendant) and date marked respectively as Annex “D-1” and Annex “D-2” and made an integral part thereof. It is thus safe to assume that the Bad Order Cargo Receipt issued by the shipping company accurately describe the quantity and condition of the shipment when it was discharged from the vessel. Furthermore, herein defendant notified immediately on the same day of receipt of the goods buyer-consignee X of the fact of the receipt of the goods in bad order condition, attached therewith the “Arrastre Receipt” executed by herein defendant for the shipping company Peruvian Shipping Lines indicating, among others, the fact of receipt and the bad order condition of the goods as received and herein attached as Annex “E” with the signatures of the issuing and receiving parties (Arrastre operator XX and the ship captain Peruvian Shipping Lines) and date thereof marked as Annex “E-1” and Annex “E-2” respectively and made as an integral part hereof. A copy of the said “Notice of Receipt of Goods in Bad Order Condition” as received by buyer-consignee X is attached as Annex “F” with the signatures of the issuing and receiving parties ( Arrastre operator XX and buyer-consignee X) and date thereof marked as Annex “F-1” and Annex “F-2” respectively and made as an integral part hereof. However, despite such immediate notice, it was only after three days that such buyer-consignee X claimed the goods from herein defendant. Moreover, despite the bad order condition in which the goods were received from shipping line Peruvian Shipping Lines, herein defendant exercised extraordinary diligence in the storage of the goods to avoid further impairment on the goods until the goods were taken from herein defendant’s custody; 6. That defendant admits the averments in paragraph 27 and 28 of the complaint; 7. That defendant has no knowledge or sufficient information to form a belief as to the truth of the averments contained in paragraph 29 of the complaint; 8. That defendant admits the averments in paragraph 30 only with respect to the notice of payment to herein defendant but with respect to the notice of payment to the other defendants, herein defendant has no knowledge or sufficient information to form a belief as to the truth of the averments; 9. That defendant has no knowledge or sufficient information to form a belief as to the truth of the averments contained in paragraph 31 of the complaint; 10. That defendant denies the averment in paragraph 32 of the compliant but only with respect to the averment that herein defendant failed to exercise the required diligence 11. in the handling of the goods, the truth being that herein defendant exercised the required diligence in the handling of the goods by storing the goods in a condition that would avoid further damage on the goods notwithstanding the fact that said goods were already in a bad order condition when received by herein defendant; And as by way of A F F I R M A T I V E D E F E N S E S Defendant repleads the foregoing allegation, and aver further: 12. That herein defendant upon receipt of the goods in bad order condition from shipping line Peruvian Shipping Lines requested a Bad Order Survey / Analysis which was done by a MARINA expert and conducted in the presence of a representative of both herein defendant and the shipping line Peruvian Shipping Lines, a report of said analysis is herein attached as Annex “G”, showing that the cause of the damage is an increase of Chloride content and sodium content which respectively makes up 55.04 wt% and 30.61 wt% of saltwater or seawater. It further states that it would take a constant exposure of at least seven days for the contact of the seawater to the Peruvian fishmeal, which were the goods received from Peruvian Shipping Lines, to damage the latter prompting the necessary conclusion that the goods were already in a damaged condition upon receipt by herein defendant because the goods only stayed in the custody of herein defendants for three days. Furthermore, herein defendant’s depository house is fifty meters away from the seashore thereby negating contact with seawater at such distance. The analysis also revealed growth of Fungi Imperfecti specie which grows in a medium with increased sodium chloride content (Seawater) with increased humidity and said specie of fungi takes a minimum of seven days to grow in a medium thereby gives the necessary implication that the growth of the fungi that damaged the goods took place while in the custody of the defendant carrier and long before the goods were in the possession of herein defendant since the goods were released to buyer-consignee X barely three days after receipt from the shipping line; 13. That the MARINA Report, herein attached as Annex “H” with the signature of the surveyor and date of its execution respectively marked as Annex “H-1” and Annex “H-2” and made an integral part hereof, submitted by the surveyor who attended the unloading of the shipment certified in the same report that the goods were received in bad order condition; 14. That the Supreme Court held in the case of Aboitiz and Company., Inc., Visayan Coconut Growers, Inc., vs. The Collector of Customs of Cebu, and Cebu Port terminal, INC., [GRN L-29466 May 18, 1978]: “xxx arrastre refers to the handling of cargo on the wharf or between the establishment of the consignee or shipper and the ship’s tackle xxx” The responsibility of the arrastre operator on the handling of the goods is thus limited from the time of unloading of the carrier until delivered to the buyer or consignee. That despite the bad order condition in which the goods were received from shipping line Peruvian Shipping Lines, herein defendant exercised extraordinary diligence in the storage of the goods to avoid further impairment on the goods until the goods were taken from herein defendant’s custody after three days from the date when buyer-consignee was notified of the receipt of the goods from Peruvian shipping Lines. Accordingly, the questioned shipment was delivered to the consignee in exactly the same order, condition and quantity it was received from the carrying vessel. Furthermore, herein defendant has exercised the necessary and extra diligence as shown by the immediate Notice of Receipt of Goods in Bad Order Condition to prevent further damage and by the Analysis / Bad Order Survey by an expert to know the extent and cause of Damage to know and further prevent the goods from deteriorating. Buyer-consignee X, however, only showed up after three days despite the urgent nature of the Notice sent. Further, the Analysis / Bad Order Survey conducted after sending the Notice showed that it was already futile to save the goods as it was too late indicating therein the irreversible chemical transformation that took place; 15. That herein defendant is not a common carrier duty bound to exercise extraordinary diligence, but such fact notwithstanding it still exercised such degree of extraordinary diligence and vigilance over the goods; 16. That the legal relationship between an arrastre operator and the consignee is akin to that of a warehouseman and a depositor. (Northern Motors, Inc. vs. Prince line, L-13884, February 29, 1960). Like any ordinary depository, the arrastre operator is duty bound to take care of the goods it had received from the vessel and to turn the same over to the party entitled to its possession, xxx (Macondry & Co., Inc. vs. Delgado Brothers, Inc., L-13118, April 28, 1960; Atlantic Mutual Ins. Co. vs Manila Port Service, L-15618, L-16000 & L-16116, November 29, 1960); Such duty of the operator would be the same if the goods had xxx been imported from another State (Macondry & Co., Inc. vs. Delgado Brothers, Inc., L-13118, April 28, 1960; Atlantic Mutual Ins. Co. vs Manila Port Service, L-15618, L-16000 & L-16116, November 29, 1960; Delgado Brothers, Inc vs. Home Insurance Co., supra; Insurance Co. of North America vs. Manila Port Service, L-16573, November 29, 1961 [3 SCRA 553-554]; Lua Kian vs. Manila Railroad Co., L-23033, Janunary 5,1967 [19 SCRA 5]; Malayan Insurance Co., Inc. vs. Manila Port Service, L-26700, May 15, 1969 [28 SCRA 66]); 17. That herein defendant delivered the goods to the consignee in the same condition as when they were received from defendant carrier. And as by way of an affirmative defense in the alternative: 18. That Article 1996 of the New Civil Code of the Philippines provides that “A deposit is necessary: (1) when it is made in compliance with a legal obligation xxx.” Such legal obligation can be found in Section 1206 of the Tariff and Customs Code which provides that the “The Collector of Customs shall cause all articles entering the jurisdiction of his district and destined for importation through his port to be entered in customhouse, shall cause all such articles to be appraised and classified and shall assess and collect the duties, taxes and other charges xxx.” Moreover, Article 1997 of the New Civil Code of the Philippines provides that the deposit referred to in No. 1 of the preceding article (Article 1996) shall be governed by the provisions of the law establishing it xxx” Since the law (Tariff and Customs Code) governing it says nothing about the liability in case the goods are in bad ordered conditioned when claimed, the State has not given its consent to be sued. 19. That the plaintiff has no cause of action against herein defendant, which is an agency hired by Government of the Republic of the Philippines particularly by the Bureau of Customs in doing the arrastre operations in North Harbor, Manila. And as such, herein defendant is merely an arm with no personality of its own apart from the National Government. The Bureau of Customs, in doing arrastre operations through herein defendant, is doing so as part of the Department of Finance (Sec. 81, Revised Administrative Code) or as a finger of the Department of Finance (American Ins. Co. vs. Macondry & Co., Inc., L-24031, August 19, 1967; 20 SCRA 1104). Its primary function is governmental, that of assessing and collecting lawful revenues from imported articles and customs duties, fees, charges, fines, and penalties (Sec 602, Republic Act Numbered 1937). To this function, the arrastre service is a necessary incident. For practical reasons said revenues and customs duties can not be assessed and collected by simply receiving the importer’s or ship agent’s or consignee’s declaration of merchandise being imported and imposing the duty provided in the Tariff Law. Custom authorities and officers must see to it that the declaration tallies with the merchandise actually landed. And this checking up requires the landed merchandise be hauled from the ship’s side to a suitable place in the customs premises to enable said customs officers to make it, that is, it requires arrastre operations. Although said arrastre functions may be deemed proprietary, it is necessary incident of the primary and governmental function of the Bureau of Customs, done on behalf of the National Government. Clearly, therefore, although said arrastre function may be deemed proprietary, it is a necessary incident of the primary and governmental function of the Bureau of Customs, so that engaging in the same does not necessarily render said Bureau liable to suit. For otherwise, it could not perform its governmental function without necessarily exposing itself to suit. Sovereign immunity, granted as to the end, should not be denied as to the necessary means to that end. (Mobil Philippines Exploration, Inc. vs. Customs Arraste Service, L-23139, December 17, 1966 [18 SCRA 1120-1121]; Domestic Insurance Co. of the Philippines vs. American Pioneer Line, L-28651, February 27, 1968 [22 SCRA 831]; Domestic Insurance Co. of the Philippines vs. Republic, L-29362, September 27, 1968 [25 SCRA 231]; Fireman’s Fund Insurance Co. vs. Maersk Line Far East Service, L-27189, March 28, 1969 [27 SCRA 520]; Rizal Surety and Insurance Co. vs. Customs Arraste Service, L-25709, April 25, 1969 [ 27 SCRA 1016].) Section 1213 of Republic Act No. 1937 (Tariff and Customs Code, effective June 1, 1957) states: “Receiving, Handling, Custody and Delivery of Articles. - The Bureau of Customs shall have exclusive supervision and control over the receiving, handling, custody and delivery of articles on the wharves and piers at all ports of entry and in the exercise of its functions it is hereby authorized to acquire, take over, operate and superintend such plants and facilities as may be necessary for the receiving, handling, custody and delivery of articles, and the convenience and comfort of passengers and the handling of baggage, as well as to acquire fire protection equipment for use in the piers: Provided, That whenever in his judgment the receiving, handling, custody and delivery of articles can be carried on by private parties with greater efficiency, the Commissioner may, after public bidding and subject to the approval of the department head, contract with any private party for the service of receiving, handling, custody and delivery of articles, and in such event, the contract may include the sale or lease of government-owned equipment and facilities used in such service.” That the foregoing statutory provisions authorizing the grant by contract to any private party of the right to render said arrastre services necessarily imply that the same is deemed by Congress to be proprietary or non-governmental function. (Mobil Philippines Exploration, Inc. vs. Customs Arrastre Service, L-23139, December 17, 1966 [18 SCRA 1120-1121]) Now, the fact that a non-corporate government entity performs a function proprietary in nature does not necessarily result in its being suable. If said non-governmental function is undertaken as an incident to its governmental function, there is no waiver thereby of the sovereign immunity from suit extended to such government entity. (Bureau of Printing et al. vs. Bureau of Printing Employees Association, et al., L-15751, January 25, 1961) Therefore, the Republic, in doing arrastre operations through the Bureau of Customs of the Customs Arraste Service or herein defendant who does the actual work, performs a necessary incident of the primary governmental function of assessment and collection from importations, of lawful revenues, tariff, and customs duties, fees, charges, fines and penalties, and as such, the Republic is immune from suit without its consent for said operations. (Insurance Co. of North America vs. Republic, L-(Insurance Co. of North America vs. Republic, L-25517, September 14, 1967 [21 SCRA 125]; Domestic Insurance Co. of the Philippines vs. Barber Line, L-233879, November 18, 1967 [ 21 SCRA 961]; union Insurance Society of Canton, Ltd. vs. Republic of the Philippines, L-25338, March 28, 1969 [27 SCRA 446]; Domestic Insurance Co. of the Philippines vs. Everett Siam Line, L-23878, July 31, 1970 [34 SCRA 80]). Indeed, the arrastre operations of the Bureau of Customs through herein defendant agency are purely incidental to the governmental function of assessing and collecting custom duties due on imported merchandise, and that, in engaging in such necessary incidental activity, the Government did not waive its immunity from suit without its express consent. 20. That it is the duty of a party attempting to show liability on the part of the Government to allege in the complaint, as a basis of the cause of action, that the Republic of the Philippines, has consented to be sued, either by special law covering special subject matter, or by general law expressing the terms on which such consent is given. Such an allegation is essential to create a justifiable cause of action against the Government, without which the complaint suffers from fatal defect. Where no allegation is made, the case against the Republic may be dismissed. (American Ins. Co. vs. Macondry & Co., Inc., L-24031, August 19, 1967; 20 SCRA 1104) And as by way of C O U N T E R C L A I M Answering defendant repleads and incorporates anew, insofar as they are applicable, the foregoing averments and further alleges: 21. That the filing of the malicious and groundless action by plaintiff against answering defendant has besmirched the latter’s reputation for which it should be compensated by way of moral damages the amount of which, though not capable of pecuniary estimation, would not be less than P50, 000, 000.00; 22. That answering defendant was forced to secure the services of a private counsel to defend its interest from plaintiff’s action, the reasonable value of which would not be less than P30, 000, 000.00 as attorney’s fees and expenses of litigation, plus P100,000.00 per appearance in court; As and by way of C R O S S C L A I M Defendant hereby repleads, reiterates and reproduces all the material allegations contained in the foregoing answer with affirmative defenses and in the counterclaim; 23. That co-defendant common carrier should be liable on any and whatever amount the answering defendant may be held answerable or which it may be ordered or suffered to pay under and by virtue of the present action in favor of plaintiff, answering defendant having received the goods from defendant common carrier in BAD ORDER CONDITION as evidenced by the “Bad Order Cargo Receipt” and “Arrastre Receipt”; 24. That answering defendant exercised reasonable diligence in taking care of the goods while the same were in its possession and custody; 25. That in the remote event that the answering defendant may be held answerable or which it may be ordered or suffered to pay under and by virtue of the present action in favor of plaintiff, co-defendants should reimburse answering defendant on any and whatever amount the latter may be liable in favor of the plaintiff. P R A Y E R WHEREFORE, premises considered, answering defendant respectfully prays to the Honorable Court to render judgment as follows: 1. by dismissing the complaint against answering defendant; As to the Counterclaim: 2. by ordering plaintiff to pay answering defendant moral damages in the amount of P50,000,000.00, plus attorney’s fees of P30,000,000.00, plus the sum of P100,000.00 per appearance in court and the costs of this suit; And as to the Crossclaim: 3. by ordering co-defendant common carrier be liable on any and whatever amount the answering defendant may be held answerable or which it may be ordered or suffered to pay under and by virtue of the present action in favor of plaintiff; 4. by ordering co-defendants to reimburse answering defendant on any and whatever amount the latter may be liable in favor of the plaintiff in the remote event that the answering defendant may be held answerable or which it may be ordered or suffered to pay under and by virtue of the present action in favor of plaintiff. Answering defendant prays for such other and further relief as may be just and equitable in the premises. RESPECTFULLY SUBMITTED. Manila for Makati, Metro Manila March 14, 2007 CJJ- DECA and ASSOCIATES LAW FIRM ( Counsel for Defendant) 35th Floor Enterprise Tower Ayala Avenue, Makati City By: CHRISTIAN PAUL SIRUNO Counsel for Defendant IBP OR No. 789234, 6-87-90 for CY 2007 PTR-Makati City, 567234, 2-0-00 JAYCEE RIVERA Counsel for Defendant IBP OR No. 789235, 6-87-90 for CY 2007 PTR-Makati City, 567235, 2-0-00 JOSEPH SALUD Counsel for Defendant IBP OR No. 789236, 6-87-90 for CY 2007 PTR-Makati City, 567236, 2-0-00 DEXTER MATIAS Counsel for Defendant IBP OR No. 789237, 6-87-90 for CY 2007 PTR-Makati City, 567237, 2-0-00 EULER PAUL MADAMBA Counsel for Defendant IBP OR No. 789238, 6-87-90 for CY 2007 PTR-Makati City, 567238, 2-0-00 CHRISTIAN FERDINAND CAYLAO Counsel for Defendant IBP OR No. 789239, 6-87-90 for CY 2007 PTR-Makati City, 567239, 2-0-00 AL PAGLINAWAN Counsel for Defendant IBP OR No. 789234, 6-87-90 for CY 2007 PTR-Makati City, 567234, 2-0-00 COPY FURNISHED TO: XYZ Law Firm Counsel for Plaintiff 564 Don Chino Roces Avenue, Makati City Seller A Represented by A Philippines 321 BC Plaza, Makati City Carrier — Peruvian Shipping Lines Represented by Matthew Martinez 456 Ayala Avenue, Makati City REPUBLIC OF THE PHILIPPIES} MAKATI CITY, METRO MANILA}SS. VERIFICATION I, Michael Richard Perz, of legal age, after having been duly sworn in accordance with law, do hereby depose and state that: 1. I am the authorized representative of the defendant corporation in the foregoing complaint filed by the plaintiff. In my official capacity as the General Manager of the defendant corporation, I am authorized to defend the interest of the latter and to prosecute its counter-claim; 2. I have caused the preparation and the corresponding filing of the foregoing answer to the complaint of the plaintiff; 3. I have read the contents of the answer and attest that all its allegations herein are true and correct of my personal knowledge or are based on authentic records. IN WITNESS HEREOF, I have hereunto set my hand this 14th day of March 2007 in Makati City. MICHAEL RICHARD PERZ Affiant SUBSCRIBED AND SWORN to me before this 14th day of March 2007 in Makati City, upon presentation to me of her Community Tax Certificate No. 001567897, issued at Sampaloc, Manila on January 17, 2007. CAROLINA DE GUZMAN Notary Public Until December 31, 2007 PTR-Makati City 00758484, 1-9-07 Doc. No.______; Page No.______; Book No._____; Series of _____.
