Food Terminal Incorporated v. Court of Appeals

Summary

This case involves a breach of contract and negligence dispute between Food Terminal Inc. (warehouse operator) and Basic Foods Corporation (goods owner) over spoiled compressed yeast. Basic Foods stored 1,770 cartons of temperature-sensitive yeast in FTI's refrigerated facility from June 10-23, 1987, with contractual requirement to maintain 2-4 degrees centigrade. When 383.6 cartons worth P161,112.00 spoiled due to temperature control failure, Basic Foods sued for damages. The Regional Trial Court initially dismissed the case, but the Court of Appeals reversed, finding FTI negligent. The Supreme Court affirmed, ruling that FTI's admission of temperature control failure established negligence under Civil Code Articles 1170 and 1173. The decision reinforces warehouseman liability principles and limits of contractual exemption clauses when negligence is proven.