SECOND DIVISION
G.R. No. 226345, August 02, 2017
PIONEER INSURANCE AND SURETY CORPORATION, Petitioner, v. APL CO. PTE. LTD., Respondent.
D E C I S I O N
MENDOZA, J.:
This petition for review on certiorari seeks to reverse and set aside the May 26, 2016 Decision1 and August 8, 2016 Resolution2 of the Court of Appeals (CA) in CA-G.R. SP No. 143912, which reversed the November 3, 2015 Decision3 of the Regional Trial Court, Branch 137, Makati City (RTC). The RTC affirmed in toto the March 9, 2015 Decision4 of the Municipal Trial Court, Branch 65, Makati City (MTC).
On January 13, 2012, the shipper, Chillies Export House Limited, turned over to respondent APL Co. Pte. Ltd. (APL) 250 bags of chili pepper for transport from the port of Chennai, India, to Manila. The shipment, with a total declared value of $12,272.50, was loaded on board M/V Wan Hai 262. In turn, BSFIL Technologies, Inc. (BSFIL), as consignee, insured the cargo with petitioner Pioneer Insurance and Surety Corporation (Pioneer Insurance).5
On February 2, 2012, the shipment arrived at the port of Manila and was temporarily stored at North Harbor, Manila. On February 6, 2012, the bags of chili were withdrawn and delivered to BSFIL. Upon receipt thereof, it discovered that 76 bags were wet and heavily infested with molds. The shipment was declared unfit for human consumption and was eventually declared as a total loss.6
As a result, BSFIL made a formal claim against APL and Pioneer Insurance. The latter hired an independent insurance adjuster, which found that the shipment was wet because of the water which seeped inside the container van APL provided. Pioneer Insurance paid BSFIL P195,505.65 after evaluating the claim.7
Having been subrogated to all the rights and cause of action of BSFIL, Pioneer Insurance sought payment from APL, but the latter refused. This prompted Pioneer Insurance to file a complaint for sum of money against APL.
MTC Ruling
In its March 9, 2015 decision, the MTC granted the complaint and ordered APL to pay Pioneer Insurance the amount claimed plus six percent (6%) interest per annum from the filing of the complaint until fully paid, and P10,000.00 as attorney's fees. It explained that by paying BSFIL, Pioneer Insurance was subrogated to the rights of the insured and, as such, it may pursue all the remedies the insured may have against the party whose negligence or wrongful act caused the loss. The MTC declared that as a common carrier, APL was bound to observe extraordinary diligence. It noted that because the goods were damaged while it was in APL's custody, it was presumed that APL did not exercise extraordinary diligence, and that the latter failed to overcome such presumption. The dispositive portion reads:
WHEREFORE, premises considered, judgment is hereby rendered ordering defendant APL Co. Pte Ltd. to pay plaintiff the amount of P195,505.65 plus 6% interest per annum from the filing of this case (01 February 2013) until the whole amount is fully paid and the amount of P10,000.00 as attorney's fees; and the costs.Aggrieved, APL appealed to the RTC.
SO ORDERED.8
WHEREFORE, PREMISES CONSIDERED, the Decision dated March 9, 2015 of the Metropolitan Trial Court Branch 65, Makati City is hereby AFFIRMED in toto, with costs against defendant-appellant APL.Undeterred, APL appealed before the CA.
SO ORDERED.9
WHEREFORE, premises considered, the instant Petition for Review is hereby GRANTED. The assailed Decision dated November 3, 2015 of the RTC, Branch 137, Makati City in Civil Case No. 15-403 is hereby REVERSED and SET ASIDE. Respondent Pioneer Insurance & Surety Corporation's Complaint is accordingly DISMISSED.Pioneer Insurance moved for reconsideration, but the CA denied its motion in its August 8, 2016 Resolution.
SO ORDERED.10
Pioneer Insurance insists the action, which was filed on February 1, 2013, was within the one year prescriptive period under the COGSA after BSFIL received the goods on February 6, 2012. It argues that the nine-month period provided under the Bill of Lading was inapplicable because the Bill of Lading itself states that in the event that such time period is found to be contrary to any law compulsorily applicable, then the period prescribed by such law shall then apply. Pioneer Insurance is of the view that the stipulation in the Bill of Lading is subordinate to the COGSA. It asserts that while parties are free to stipulate the terms and conditions of their contract, the same should not be contrary to law, morals, good customs, public order, or public policy.ISSUES I
WHETHER THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED WHEN IT RULED THAT PETITIONER'S CLAIM AGAINST THE RESPONDENT IS ALREADY BARRED BY PRESCRIPTION; ANDII
WHETHER THE HONORABLE COURT OF APPEALS SERIOSULY ERRED IN HOLDING THAT THE ONE YEAR PRESCRIPTIVE PERIOD PROVIDED UNDER THE CARRIAGE OF GOODS BY SEA ACT (COGSA) IS NOT APPLICABLE IN THE INSTANT CASE.11
The cardinal rule in the interpretation of contracts is embodied in the first paragraph of Article 1370 of the Civil Code: "[i]f the terms of a contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control." This provision is akin to the "plain meaning rule" applied by Pennsylvania courts, which assumes that the intent of the parties to an instrument is "embodied in the writing itself, and when the words are clear and unambiguous the intent is to be discovered only from the express language of the agreement". It also resembles the "four corners" rule, a principle which allows courts in some cases to search beneath the semantic surface for clues to meaning. A court's purpose in examining a contract is to interpret the intent of the contracting parties, as objectively manifested by them. The process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract are not ambiguous and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence.17 [Emphases supplied]After a closer persual of the the Bill of Lading, the Court finds that its provisions are clear and unequivocal leaving no room for interpretation.
Endnotes:
1 Penned by Associate Justice Remedios A. Salazar-Fernando with Associate Justice Priscilla J. Ballazar-Padilla and Associate Justice Melchor Quirino C. Sadang, concurring; rollo, pp. 16-26.
2 Id. at 27-31.
3 Penned by Presiding Judge Ethel V. Mercado-Gutay; id. at 82-89.
4 Penned by Presiding Judge Henry E. Laron; id. at 74-81.
5 Id. at 6.
6 Id.
7 Id. at 6-7.
8 Id. at 81.
9Rollo, p. 89.
10 Id. at 26.
11 Id. at 8.
12 Id. at 94-99.
13 Id. at 103-105.
14 287 Phil. 212 (1992).
15Morla v. Belmonte et al., 678 Phil. 102, 117 (2011).
16 620 Phil. 381 (2009), citing Benguet Corporation v. Cabildo, 585 Phil. 23 (2008).
17 Id. at 388.
18Mitsui O.S.K. Lines Ltd. v. CA, 350 Phil. 813, 817-818 (1998); Belgian Overseas Chartering and Shipping N. V. v. Philippine First Insurance Co., Inc., 432 Phil. 567, 585 (2002); Asian Terminals, Inc. v. Philam Insurance Co., Inc., 715 Phil. 78, 98 (2013).