"It is alleged in the complaint that plaintiff Basic Foods was engaged in the business of manufacturing food and allied products using for the production thereof Red Star compressed yeast which required storage in a refrigerated space to avoid spoilage. On the other hand, defendant Food Terminal, Incorporated (FTI for brevity) was engaged in the business of storage of goods or merchandise for compensation at its refrigerated warehouse in Taguig, Metro Manila. During the period from June 10, 1987 up to June 23, 1987, plaintiff deposited for cold storage with the defendant 1,770 cartons of Red Star compressed yeast. However, because of the latter's negligence in the performance of its obligations as a warehouseman consisting of, among others, its failure to control the temperature in its warehouse where the aforecited merchandise were stored, a total of 383.6 cartons of said Red Star compressed yeast worth not less than P161,112.00 were spoiled. As a consequence of this damage, plaintiff demanded from defendant FTI payment of the total value of the spoiled compressed yeast. This demand proved to be futile. Hence, the instant action.

"In its answer, defendant denied that plaintiff had deposited with it 1,770 cartons of Red Star compressed yeast. It alleged that only 750 cartons of the merchandise had been stored in its warehouse. Further, it asserted that it had exercised utmost diligence in the care and custody of plaintiff's commodities as a reasonably careful owner of similar goods would exercise and that if any injury was suffered by plaintiff corporation by reason of the alleged deterioration of its goods, the same was primarily caused by its (plaintiff’s) negligence and/or circumstances beyond the reasonable control of the defendant. Before Basic Foods deposited the cartons of the compressed yeast, FTI had already switched on the cooling and refrigeration system in its Central Refrigeration Warehouse specifically Zone 4 for pre-cooling measure. Defendant afterwards undertook to maintain and control the temperature between two degrees centigrade and four degrees centigrade specification through constant and proper monitoring by its personnel. This procedure, however, was done by allowing plaintiff to load its stocks in the pallet towers in Zone 4 and giving it discretion as to the stocks arrangement according to its own requirements and satisfaction. Defendant further averred that the alleged damage of some cartons of the subject commodities could be attributed to plaintiff’s arrangement of the same taking into consideration its nature and characteristic; that pursuant to the stipulations under the parties' cold storage contract, the defendant would not be liable for any loss, injury or damage, whether direct or indirect, to plaintiff's goods attributable to any cause whatsoever and in particular from causes beyond the reasonable control of the defendant. Neither would FTI be liable for damage or injury, resulting from variations in or wrong temperature and relative humidities, or shrinkage, deterioration, fermentation, decay, putrefaction, or those due to any inherent defects in the nature of the goods stored. Defendant maintained that plaintiff was already estopped from filing the instant suit since it (plaintiff) had acknowledged receipt of the goods in good order condition as indicated in the Bonded Warehouse Issues. katarungan

"Eventually, the court a quo rendered judgment dismissing the instant action. x x x"3 [Petition, Annex "B", Rollo, pp. 37-38.3