G.R. No.
162467 May 8, 2009 Del Monte Produce filed a claim under the open cargo policy for the
MINDANAO TERMINAL AND BROKERAGE SERVICE, INC., Petitioner,
vs. PHOENIX ASSURANCE COMPANY OF NEW YORK/ LEONARDO
DE CASTRO,** and MCGEE & CO., INC., Respondent.
Del Monte Philippines, Inc. (Del Monte) contracted petitioner
Mindanao Terminal and Brokerage Service, Inc. (Mindanao
Terminal), a stevedoring company, to load and stow a shipment of
146,288 cartons of fresh green Philippine bananas and 15,202
cartons of fresh pineapples belonging to Del Monte Fresh Produce
International, Inc. (Del Monte Produce) into the cargo hold of the
vessel M/V Mistrau. The vessel was docked at the port of Davao City
and the goods were to be transported by it to the port of Inchon,
Korea in favor of consignee Taegu Industries, Inc. Del Monte
Produce insured the shipment under an open cargo policy with
private respondent Phoenix Assurance Company of New York
(Phoenix), a non-life insurance company, and private respondent
McGee & Co. Inc. (McGee), the underwriting manager/agent of
Phoenix.
Mindanao Terminal loaded and stowed the cargoes aboard the M/V
Mistrau. The vessel set sail from the port of Davao City and arrived
at the port of Inchon, Korea. It was then discovered upon discharge
that some of the cargo was in bad condition. The Marine Cargo
Damage Surveyor of Incok Loss and Average Adjuster of Korea,
through its representative Byeong Yong Ahn (Byeong), surveyed the
extent of the damage of the shipment. In a survey report, it was
stated that 16,069 cartons of the banana shipment and 2,185
cartons of the pineapple shipment were so damaged that they no
longer had commercial value.[5]
damages to its shipment. McGees Marine Claims Insurance Adjuster
evaluated the claim and recommended that payment in the amount
of $210,266.43 be made. A check for the recommended amount
was sent to Del Monte Produce; the latter then issued a subrogation
receipt[6] to Phoenix and McGee.
Phoenix and McGee instituted an action for damages against
Mindanao Terminal in the Regional Trial Court (RTC) of Davao City,
Branch 12. After trial, the RTC,[8] in a decision dated 20 October
1999, held that the only participation of Mindanao Terminal was to
load the cargoes on board the M/V Mistrau under the direction and
supervision of the ships officers, who would not have accepted the
cargoes on board the vessel and signed the foremans report unless
they were properly arranged and tightly secured to withstand
voyage across the open seas. Accordingly, Mindanao Terminal
cannot be held liable for whatever happened to the cargoes after it
had loaded and stowed them. Moreover, citing the survey report, it
was found by the RTC that the cargoes were damaged on account of
a typhoon which M/V Mistrau had encountered during the voyage.
It was further held that Phoenix and McGee had no cause of action
against Mindanao Terminal because the latter, whose services were
contracted by Del Monte, a distinct corporation from Del Monte
Produce, had no contract with the assured Del Monte Produce. The
RTC dismissed the complaint and awarded the counterclaim of
Mindanao Terminal in the amount of P83,945.80 as actual damages
and P100,000.00 as attorneys fees.[9] The actual damages were
awarded as reimbursement for the expenses incurred by Mindanao
Terminals lawyer in attending the hearings in the case wherein he
had to travel all the way from Metro Manila to Davao City.
Phoenix and McGee appealed to the Court of Appeals. The appellate
court reversed and set aside[10] the decision of the RTC in its 29
October 2003 decision. The same court ordered Mindanao Terminal
to pay Phoenix and McGee the total amount of $210,265.45 plus
legal interest from the filing of the complaint until fully paid and
attorneys fees of 20% of the claim.[11] It sustained Phoenixs and
McGees argument that the damage in the cargoes was the result of
improper stowage by Mindanao Terminal. It imposed on Mindanao
Terminal, as the stevedore of the cargo, the duty to exercise
extraordinary diligence in loading and stowing the cargoes. It
further held that even with the absence of a contractual
relationship between Mindanao Terminal and Del Monte Produce,
the cause of action of Phoenix and McGee could be based on quasi-
delict under Article 2176 of the Civil Code.
Mindanao Terminal filed a motion for reconsideration,[13] which
the Court of Appeals denied in its 26 February 2004[14] resolution.
Hence, the present petition for review.
Mindanao Terminal raises two issues in the case at bar, namely:
whether it was careless and negligent in the loading and stowage of
the cargoes onboard M/V Mistrau making it liable for damages; and,
whether Phoenix and McGee has a cause of action against
Mindanao Terminal under Article 2176 of the Civil Code on quasi-
delict. To resolve the petition, three questions have to be answered:
first, whether Phoenix and McGee have a cause of action against
Mindanao Terminal; second, whether Mindanao Terminal, as a
stevedoring company, is under obligation to observe the same
extraordinary degree of diligence in the conduct of its business as
required by law for common carriers[15] and warehousemen;[16]
and third, whether Mindanao Terminal observed the degree of
diligence required by law of a stevedoring company.
We agree with the Court of Appeals that the complaint filed by
Phoenix and McGee against Mindanao Terminal, from which the
present case has arisen, states a cause of action. The present action
is based on quasi-delict, arising from the negligent and careless
loading and stowing of the cargoes belonging to Del Monte
Produce. Even assuming that both Phoenix and McGee have only
been subrogated in the rights of Del Monte Produce, who is not a
party to the contract of service between Mindanao Terminal and
Del Monte, still the insurance carriers may have a cause of action in
light of the Courts consistent ruling that the act that breaks the
contract may be also a tort.[17] In fine, a liability for tort may arise
even under a contract, where tort is that which breaches the
contract[18]. In the present case, Phoenix and McGee are not suing
for damages for injuries arising from the breach of the contract of
service but from the alleged negligent manner by which Mindanao
Terminal handled the cargoes belonging to Del Monte Produce.
Despite the absence of contractual relationship between Del Monte
Produce and Mindanao Terminal, the allegation of negligence on
the part of the defendant should be sufficient to establish a cause of
action arising from quasi-delict.
The resolution of the two remaining issues is determinative of the
ultimate result of this case.
Article 1173 of the Civil Code is very clear that if the law or contract
does not state the degree of diligence which is to be observed in the
performance of an obligation then that which is expected of a good
father of a family or ordinary diligence shall be required. Mindanao
Terminal, a stevedoring company which was charged with the
loading and stowing the cargoes of Del Monte Produce aboard M/V
Mistrau, had acted merely as a labor provider in the case at bar.
There is no specific provision of law that imposes a higher degree of
diligence than ordinary diligence for a stevedoring company or one
who is charged only with the loading and stowing of cargoes. It was
neither alleged nor proven by Phoenix and McGee that Mindanao
Terminal was bound by contractual stipulation to observe a higher
degree of diligence than that required of a good father of a family.
We therefore conclude that following Article 1173, Mindanao
Terminal was required to observe ordinary diligence only in loading
and stowing the cargoes of Del Monte Produce aboard M/V
Mistrau.
The Court of Appeals erred when it cited the case of Summa
Insurance Corporation v. CA and Port Service Inc.[20] in imposing a
higher degree of diligence,[21] on Mindanao Terminal in loading
and stowing the cargoes. The case of Summa Insurance Corporation
v. CA, which involved the issue of whether an arrastre operator is
legally liable for the loss of a shipment in its custody and the extent
of its liability, is inapplicable to the factual circumstances of the case
at bar. Therein, a vessel owned by the National Galleon Shipping
Corporation (NGSC) arrived at Pier 3, South Harbor, Manila, carrying
a shipment consigned to the order of Caterpillar Far East Ltd. with
Semirara Coal Corporation (Semirara) as "notify party." The
shipment, including a bundle of PC 8 U blades, was discharged from
the vessel to the custody of the private respondent, the exclusive
arrastre operator at the South Harbor. Accordingly, three good-
order cargo receipts were issued by NGSC, duly signed by the ship's
checker and a representative of private respondent. When Semirara
inspected the shipment at house, it discovered that the bundle of
PC8U blades was missing. From those facts, the Court observed:
x x x The relationship therefore between the consignee and the
arrastre operator must be examined. This relationship is much akin
to that existing between the consignee or owner of shipped goods
and the common carrier, or that between a depositor and a
warehouseman[[22]]. 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 as
enunciated under Article 1733 of the Civil Code and Section 3(b) of
the Warehouse Receipts Law, respectively. 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 turn them over to the party
entitled to their possession.
There is a distinction between an arrastre and a stevedore.[24]
Arrastre, a Spanish word which refers to hauling of cargo,
comprehends the handling of cargo on the wharf or between the
establishment of the consignee or shipper and the ship's tackle. The
responsibility of the arrastre operator lasts until the delivery of the
cargo to the consignee. The service is usually performed by
longshoremen. On the other hand, stevedoring refers to the
handling of the cargo in the holds of the vessel or between the
ship's tackle and the holds of the vessel. The responsibility of the
stevedore ends upon the loading and stowing of the cargo in the
vessel.
It is not disputed that Mindanao Terminal was performing purely
stevedoring function while the private respondent in the Summa
case was performing arrastre function. In the present case,
Mindanao Terminal, as a stevedore, was only charged with the
loading and stowing of the cargoes from the pier to the ships cargo
hold; it was never the custodian of the shipment of Del Monte
Produce. A stevedore is not a common carrier for it does not
transport goods or passengers; it is not akin to a warehouseman for
it does not store goods for profit. The loading and stowing of
cargoes would not have a far reaching public ramification as that of
a common carrier and a warehouseman; the public is adequately
protected by our laws on contract and on quasi-delict. The public
policy considerations in legally imposing upon a common carrier or
a warehouseman a higher degree of diligence is not present in a
stevedoring outfit which mainly provides labor in loading and
stowing of cargoes for its clients.
In the third issue, Phoenix and McGee failed to prove by
preponderance of evidence[25] that Mindanao Terminal had acted
negligently. Where the evidence on an issue of fact is in equipoise
or there is any doubt on which side the evidence preponderates the
party having the burden of proof fails upon that issue. That is to say,
if the evidence touching a disputed fact is equally balanced, or if it
does not produce a just, rational belief of its existence, or if it leaves
the mind in a state of perplexity, the party holding the affirmative as
to such fact must fail.[26]
We adopt the findings[27] of the RTC,[28] which are not disputed by
Phoenix and McGee. The Court of Appeals did not make any new
findings of fact when it reversed the decision of the trial court. The
only participation of Mindanao Terminal was to load the cargoes on
board M/V Mistrau.[29] It was not disputed by Phoenix and McGee
that the materials, such as ropes, pallets, and cardboards, used in
lashing and rigging the cargoes were all provided by M/V Mistrau
and these materials meets industry standard.[30]
It was further established that Mindanao Terminal loaded and
stowed the cargoes of Del Monte Produce aboard the M/V Mistrau
in accordance with the stowage plan, a guide for the area
assignments of the goods in the vessels hold, prepared by Del
Monte Produce and the officers of M/V Mistrau.[31] The loading
and stowing was done under the direction and supervision of the
ship officers. The vessels officer would order the closing of the
hatches only if the loading was done correctly after a final
inspection.[32] The said ship officers would not have accepted the
cargoes on board the vessel if they were not properly arranged and
tightly secured to withstand the voyage in open seas. They would
order the stevedore to rectify any error in its loading and stowing. A
foremans report, as proof of work done on board the vessel, was
prepared by the checkers of Mindanao Terminal and concurred in
by the Chief Officer of M/V Mistrau after they were satisfied that
the cargoes were properly loaded.[33]
Phoenix and McGee relied heavily on the deposition of Byeong Yong
Ahn[34] and on the survey report[35] of the damage to the cargoes.
Byeong, whose testimony was refreshed by the survey report,[36]
found that the cause of the damage was improper stowage[37] due
to the manner the cargoes were arranged such that there were no
spaces between cartons, the use of cardboards as support system,
and the use of small rope to tie the cartons together but not by the
negligent conduct of Mindanao Terminal in loading and stowing the
cargoes. As admitted by Phoenix and McGee in their Comment[38]
before us, the latter is merely a stevedoring company which was
tasked by Del Monte to load and stow the shipments of fresh
banana and pineapple of Del Monte Produce aboard the M/V
Mistrau. How and where it should load and stow a shipment in a
vessel is wholly dependent on the shipper and the officers of the
vessel. In other words, the work of the stevedore was under the
supervision of the shipper and officers of the vessel. Even the
materials used for stowage, such as ropes, pallets, and cardboards,
are provided for by the vessel. Even the survey report found that it
was because of the boisterous stormy weather due to the typhoon
Seth, as encountered by M/V Mistrau during its voyage, which
caused the shipments in the cargo hold to collapse, shift and bruise
in extensive extent.[39] Even the deposition of Byeong was not
supported by the conclusion in the survey report that:
CAUSE OF DAMAGE
From the above facts and our survey results, we are of the opinion
that damage occurred aboard the carrying vessel during sea transit,
being caused by ships heavy rolling and pitching under boisterous
weather while proceeding from 1600 hrs on 7th October to 0700 hrs
on 12th October, 1994 as described in the sea protest.
As it is clear that Mindanao Terminal had duly exercised the
required degree of diligence in loading and stowing the cargoes,
which is the ordinary diligence of a good father of a family, the
grant of the petition is in order.
However, the Court finds no basis for the award of attorneys fees in
favor of petitioner. None of the circumstances enumerated in
Article 2208 of the Civil Code exists. The present case is clearly not
an unfounded civil action against the plaintiff as there is no showing
that it was instituted for the mere purpose of vexation or injury. It is
not sound public policy to set a premium to the right to litigate
where such right is exercised in good faith, even if erroneously.[41]
Likewise, the RTC erred in awarding P83,945.80 actual damages to
Mindanao Terminal. Although actual expenses were incurred by
Mindanao Terminal in relation to the trial of this case in Davao City,
the lawyer of Mindanao Terminal incurred expenses for plane fare,
hotel accommodations and food, as well as other miscellaneous
expenses, as he attended the trials coming all the way from Manila.
But there is no showing that Phoenix and McGee made a false claim
against Mindanao Terminal resulting in the protracted trial of the
case necessitating the incurrence of expenditures.
WHEREFORE, the petition is GRANTED. The decision of the Court of
Appeals in CA-G.R. CV No. 66121 is SET ASIDE and the decision of
the Regional Trial Court of Davao City, Branch 12 in Civil Case No.
25,311.97 is hereby REINSTATED MINUS the awards of P100,000.00
as attorney’s fees and P83,945.80 as actual damages.
SO ORDERED.
G.R. No. 157481 January 24, 2006
LOADSTAR SHIPPING CO., INC., Petitioner, vs. PIONEER ASIA
INSURANCE CORP., Respondent.
Petitioner Loadstar Shipping Co., Inc. (Loadstar for brevity) is the
registered owner and operator of the vessel M/V Weasel. It holds
office at 1294 Romualdez St., Paco, Manila.
On June 6, 1984, Loadstar entered into a voyage-charter with
Northern Mindanao Transport Company, Inc. for the carriage of
65,000 bags of cement from Iligan City to Manila. The shipper was
Iligan Cement Corporation, while the consignee in Manila was
Market Developers, Inc.
On June 24, 1984, 67,500 bags of cement were loaded on board
M/V Weasel and stowed in the cargo holds for delivery to the
consignee. The shipment was covered by petitioners Bill of Lading
dated June 23, 1984.
Prior to the voyage, the consignee insured the shipment of cement
with respondent Pioneer Asia Insurance Corporation for P1,400,000,
for which respondent issued Marine Open Policy No. MOP-006
dated September 17, 1980, covering all shipments made on or after
September 30, 1980.
At 12:50 in the afternoon of June 24, 1984, M/V Weasel left Iligan
City for Manila in good weather. However, at 4:31 in the morning of
June 25, 1984, Captain Vicente C. Montera, master of M/V Weasel,
ordered the vessel to be forced aground. Consequently, the entire
shipment of cement was good as gone due to exposure to sea
water. Petitioner thus failed to deliver the goods to the consignee in
Manila.
The consignee demanded from petitioner full reimbursement of the
cost of the lost shipment. Petitioner, however, refused to reimburse
the consignee despite repeated demands.
Nonetheless, on March 11, 1985, respondent insurance company
paid the consignee P1,400,000 plus an additional amount of
P500,000, the value of the lost shipment of cement. In return, the
consignee executed a Loss and Subrogation Receipt in favor of
respondent concerning the latters subrogation rights against
petitioner.
Hence, on October 15, 1986, respondent filed a complaint docketed
as Civil Case No. 86-37957, against petitioner with the Regional Trial
Court of Manila, Branch 8. It alleged that: (1) the M/V Weasel was
not seaworthy at the commencement of the voyage; (2) the
weather and sea conditions then prevailing were usual and
expected for that time of the year and as such, was an ordinary peril
of the voyage for which the M/V Weasel should have been normally
able to cope with; and (3) petitioner was negligent in the selection
and supervision of its agents and employees then manning the M/V
Weasel.
In its Answer, petitioner alleged that no fault nor negligence could
be attributed to it because it exercised due diligence to make the
ship seaworthy, as well as properly manned and equipped.
Petitioner insisted that the failure to deliver the subject cargo to the
consignee was due to force majeure. Petitioner claimed it could not
be held liable for an act or omission not directly attributable to it.
On February 15, 1993, the RTC rendered a Decision in favor of
respondent, to wit:
WHEREFORE, in view of the foregoing, judgment is hereby rendered
in favor of plaintiff and against defendant Loadstar Shipping Co., Inc.
ordering the latter to pay as follows:
1. To pay plaintiff the sum of P1,900,000.00 with legal rate of
interest per annum from date of complaint until fully paid;
2. To pay the sum equal to 25% of the claim as and for attorneys
fees and litigation expenses; and,
3. To pay the costs of suit.
IT IS SO ORDERED.
The RTC reasoned that petitioner, as a common carrier, bears the
burden of proving that it exercised extraordinary diligence in its
vigilance over the goods it transported. The trial court explained
that in case of loss or destruction of the goods, a statutory
presumption arises that the common carrier was negligent unless it
could prove that it had observed extraordinary diligence.
Petitioners defense of force majeure was found bereft of factual
basis. The RTC called attention to the PAG-ASA report that at the
time of the incident, tropical storm Asiang had moved away from
the Philippines. Further, records showed that the sea and weather
conditions in the area of Hinubaan, Negros Occidental from 8:00
p.m. of June 24, 1984 to 8:00 a.m. the next day were slight and
smooth. Thus, the trial court concluded that the cause of the loss
was not tropical storm Asiang or any other force majeure, but gross
negligence of petitioner.
Petitioner appealed to the Court of Appeals.
In its Decision dated October 15, 2002, the Court of Appeals
affirmed the RTC Decision with modification that Loadstar shall only
pay the sum of 10% of the total claim for attorneys fees and
litigation expenses. It ruled,
WHEREFORE, premises considered, the Decision dated February 15,
1993, of the Regional Trial Court of Manila, National Capital Judicial
Region, Branch 8, in Civil Case No. 86-37957 is hereby AFFIRMED
with the MODIFICATION that the appellant shall only pay the sum of
10% of the total claim as and for attorneys fees and litigation
expenses. Costs against the appellant.
SO ORDERED.
Petitioners Motion for Reconsideration was denied.
The instant petition is anchored now on the following assignments
of error:
I THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT PETITIONER IS A COMMON CARRIER UNDER ARTICLE 1732 OF
THE CIVIL CODE.
II ASSUMING ARGUENDO THAT PETITIONER IS A COMMON
CARRIER, THE HONORABLE COURT OF APPEALS ERRED IN HOLDING
THAT THE PROXIMATE CAUSE OF THE LOSS OF CARGO WAS NOT A
FORTUITOUS EVENT BUT WAS ALLEGEDLY DUE TO THE FAILURE OF
PETITIONER TO EXERCISE EXTRAORDINARY DILIGENCE.
III THE HONORABLE COURT OF APPEALS ERRED IN AFFIRMING
THE AWARD BY THE TRIAL COURT OF ATTORNEYS FEES AND
LITIGATION EXPENSES IN FAVOR OF HEREIN RESPONDENT.
On the first and second issues, petitioner contends that at the time
of the voyage the carriers voyage-charter with the shipper
converted it into a private carrier. Thus, the presumption of
negligence against common carriers could not apply. Petitioner
further avers that the stipulation in the voyage-charter holding it
free from liability is valid and binds the respondent. In any event,
petitioner insists that it had exercised extraordinary diligence and
that the proximate cause of the loss of the cargo was a fortuitous
event.
With regard to the third issue, petitioner points out that the award
of attorneys fees and litigation expenses appeared only in the
dispositive portion of the RTC Decision with nary a justification.
Petitioner maintains that the Court of Appeals thus erred in
affirming the award.
For its part, respondent dismisses as factual issues the inquiry on (1)
whether the loss of the cargo was due to force majeure or due to
petitioners failure to exercise extraordinary diligence; and (2)
whether respondent is entitled to recover attorneys fees and
expenses of litigation.
Respondent further counters that the Court of Appeals was correct
when it held that petitioner was a common carrier despite the
charter of the whole vessel, since the charter was limited to the ship
only.
Prefatorily, we stress that the finding of fact by the trial court, when
affirmed by the Court of Appeals, is not reviewable by this Court in a
petition for review on certiorari. However, the conclusions derived
from such factual finding are not necessarily pure issues of fact
when they are inextricably intertwined with the determination of a
legal issue. In such instances, the conclusions made may be raised in
a petition for review before this Court.
The treshold issues in this case are: (1) Given the circumstances of
this case, is petitioner a common or a private carrier? and (2) In
either case, did petitioner exercise the required diligence i.e., the
extraordinary diligence of a common carrier or the ordinary
diligence of a private carrier?
Article 1732 of the Civil Code defines a common carrier as follows:
Article 1732. Common carriers are persons, corporations, firms or
associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public.
Petitioner is a corporation engaged in the business of transporting
cargo by water and for compensation, offering its services
indiscriminately to the public. Thus, without doubt, it is a common
carrier. However, petitioner entered into a voyage-charter with the
Northern Mindanao Transport Company, Inc. Now, had the voyage-
charter converted petitioner into a private carrier?
We think not. The voyage-charter agreement between petitioner
and Northern Mindanao Transport Company, Inc. did not in any way
convert the common carrier into a private carrier. We have already
resolved this issue with finality in Planters Products, Inc. v. Court of
Appeals[11] where we ruled that:
It is therefore imperative that a public carrier shall remain as such,
notwithstanding the charter of the whole or portion of a vessel by
one or more persons, provided the charter is limited to the ship
only, as in the case of a time-charter or voyage-charter. It is only
when the charter includes both the vessel and its crew, as in a
bareboat or demise that a common carrier becomes private, at least
insofar as the particular voyage covering the charter-party is
concerned. Indubitably, a shipowner in a time or voyage charter
retains possession and control of the ship, although her holds may,
for the moment, be the property of the charterer.
Conformably, petitioner remains a common carrier notwithstanding
the existence of the charter agreement with the Northern
Mindanao Transport Company, Inc. since the said charter is limited
to the ship only and does not involve both the vessel and its crew.
As elucidated in Planters Products, its charter is only a voyage-
charter, not a bareboat charter.
As a common carrier, petitioner is required to observe extraordinary
diligence in the vigilance over the goods it transports.[13] When the
goods placed in its care are lost, petitioner is presumed to have
been at fault or to have acted negligently. Petitioner therefore has
the burden of proving that it observed extraordinary diligence in
order to avoid responsibility for the lost cargo.[14]
In Compania Maritima v. Court of Appeals,[15] we said:
it is incumbent upon the common carrier to prove that the loss,
deterioration or destruction was due to accident or some other
circumstances inconsistent with its liability.
The extraordinary diligence in the vigilance over the goods tendered
for shipment requires the common carrier to know and to follow
the required precaution for avoiding damage to, or destruction of
the goods entrusted to it for safe carriage and delivery. It requires
common carriers to render service with the greatest skill and
foresight and to use all reasonable means to ascertain the nature
and characteristics of goods tendered for shipment, and to exercise
due care in the handling and stowage, including such methods as
their nature requires.
Article 1734 enumerates the instances when a carrier might be
exempt from liability for the loss of the goods. These are:
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers; and
(5) Order or act of competent public authority.
Petitioner claims that the loss of the goods was due to a fortuitous
event under paragraph 1. Yet, its claim is not substantiated. On the
contrary, we find supported by evidence on record the conclusion of
the trial court and the Court of Appeals that the loss of the entire
shipment of cement was due to the gross negligence of petitioner.
Records show that in the evening of June 24, 1984, the sea and
weather conditions in the vicinity of Negros Occidental were calm.
The records reveal that petitioner took a shortcut route, instead of
the usual route, which exposed the voyage to unexpected hazard.
Petitioner has only itself to blame for its misjudgment.
Petitioner heavily relies on Home Insurance Co. v. American
Steamship Agencies, Inc.[18] and Valenzuela Hardwood and
Industrial Supply, Inc. v. Court of Appeals.[19] The said cases
involved a private carrier, not a common carrier. Moreover, the
issue in both cases is not the effect of a voyage-charter on a
common carrier, but the validity of a stipulation absolving the
private carrier from liability in case of loss of the cargo attributable
to the negligence of the private carrier.
Lastly, on the third issue, we find consistent with law and prevailing
jurisprudence the Court of Appeals award of attorneys fees and
expenses of litigation equivalent to ten percent (10%) of the total
claim. The contract between the parties in this case contained a
stipulation that in case of suit, attorneys fees and expenses of
litigation shall be limited to only ten percent (10%) of the total
monetary award. Given the circumstances of this case, we deem the
said amount just and equitable.
WHEREFORE, the petition is DENIED. The assailed Decision dated
October 15, 2002 and the Resolution dated February 27, 2003, of
the Court of Appeals in CA-G.R. CV No. 40999, are AFFIRMED.
SO ORDERED.
G.R. No. 179446 January 10, 2011
LOADMASTERS CUSTOMS SERVICES, INC., Petitioner, vs. GLODEL
BROKERAGE CORPORATION and R&B INSURANCE CORPORATION,
Respondents.
On August 28, 2001, R&B Insurance issued Marine Policy No. MN-
00105/2001 in favor of Columbia to insure the shipment of 132
bundles of electric copper cathodes against All Risks. On August 28,
2001, the cargoes were shipped on board the vessel Richard Rey
from Isabela, Leyte, to Pier 10, North Harbor, Manila. They arrived
on the same date.
Columbia engaged the services of Glodel for the release and
withdrawal of the cargoes from the pier and the subsequent
delivery to its warehouses/plants. Glodel, in turn, engaged the
services of Loadmasters for the use of its delivery trucks to
transport the cargoes to Columbias warehouses/plants in Bulacan
and Valenzuela City.
The goods were loaded on board twelve (12) trucks owned by
Loadmasters, driven by its employed drivers and accompanied by its
employed truck helpers. Six (6) truckloads of copper cathodes were
to be delivered to Balagtas, Bulacan, while the other six (6)
truckloads were destined for Lawang Bato, Valenzuela City. The
cargoes in six truckloads for Lawang Bato were duly delivered in
Columbias warehouses there. Of the six (6) trucks en route to
Balagtas, Bulacan, however, only five (5) reached the destination.
One (1) truck, loaded with 11 bundles or 232 pieces of copper
cathodes, failed to deliver its cargo.
Later on, the said truck, an Isuzu with Plate No. NSD-117, was
recovered but without the copper cathodes. Because of this
incident, Columbia filed with R&B Insurance a claim for insurance
indemnity in the amount of P1,903,335.39. After the requisite
investigation and adjustment, R&B Insurance paid Columbia the
amount of P1,896,789.62 as insurance indemnity.
R&B Insurance, thereafter, filed a complaint for damages against
both Loadmasters and Glodel before the Regional Trial Court,
Branch 14, Manila (RTC), docketed as Civil Case No. 02-103040. It
sought reimbursement of the amount it had paid to Columbia for
the loss of the subject cargo. It claimed that it had been subrogated
to the right of the consignee to recover from the party/parties who
may be held legally liable for the loss.[2]
On November 19, 2003, the RTC rendered a decision[3] holding
Glodel liable for damages for the loss of the subject cargo and
dismissing Loadmasters counterclaim for damages and attorneys
fees against R&B Insurance. The dispositive portion of the decision
reads:
WHEREFORE, all premises considered, the plaintiff having
established by preponderance of evidence its claims against
defendant Glodel Brokerage Corporation, judgment is hereby
rendered ordering the latter:
1. To pay plaintiff R&B Insurance Corporation the sum of
P1,896,789.62 as actual and compensatory damages, with interest
from the date of complaint until fully paid;
2. To pay plaintiff R&B Insurance Corporation the amount
equivalent to 10% of the principal amount recovered as and for
attorneys fees plus P1,500.00 per appearance in Court;
3. To pay plaintiff R&B Insurance Corporation the sum of
P22,427.18 as litigation expenses.
WHEREAS, the defendant Loadmasters Customs Services, Inc.s
counterclaim for damages and attorneys fees against plaintiff are
hereby dismissed.
With costs against defendant Glodel Brokerage Corporation.
SO ORDERED.
Both R&B Insurance and Glodel appealed the RTC decision to the
CA.
On August 24, 2007, the CA rendered the assailed decision which
reads in part:
Considering that appellee is an agent of appellant Glodel, whatever
liability the latter owes to appellant R&B Insurance Corporation as
insurance indemnity must likewise be the amount it shall be paid by
appellee Loadmasters.
WHEREFORE, the foregoing considered, the appeal is PARTLY
GRANTED in that the appellee Loadmasters is likewise held liable to
appellant Glodel in the amount of P1,896,789.62 representing the
insurance indemnity appellant Glodel has been held liable to
appellant R&B Insurance Corporation.
Appellant Glodels appeal to absolve it from any liability is herein
DISMISSED.
SO ORDERED.
Hence, Loadmasters filed the present petition for review on
certiorari before this Court presenting the following
ISSUES
1. Can Petitioner Loadmasters be held liable to Respondent Glodel
in spite of the fact that the latter respondent Glodel did not file a
cross-claim against it (Loadmasters)?
2. Under the set of facts established and undisputed in the case, can
petitioner Loadmasters be legally considered as an Agent of
respondent Glodel?[6]
To totally exculpate itself from responsibility for the lost goods,
Loadmasters argues that it cannot be considered an agent of Glodel
because it never represented the latter in its dealings with the
consignee. At any rate, it further contends that Glodel has no
recourse against it for its (Glodels) failure to file a cross-claim
pursuant to Section 2, Rule 9 of the 1997 Rules of Civil Procedure.
Glodel, in its Comment,[7] counters that Loadmasters is liable to it
under its cross-claim because the latter was grossly negligent in the
transportation of the subject cargo. With respect to Loadmasters
claim that it is already estopped from filing a cross-claim, Glodel
insists that it can still do so even for the first time on appeal
because there is no rule that provides otherwise. Finally, Glodel
argues that its relationship with Loadmasters is that of Charter
wherein the transporter (Loadmasters) is only hired for the specific
job of delivering the merchandise. Thus, the diligence required in
this case is merely ordinary diligence or that of a good father of the
family, not the extraordinary diligence required of common carriers.
R&B Insurance, for its part, claims that Glodel is deemed to have
interposed a cross-claim against Loadmasters because it was not
prevented from presenting evidence to prove its position even
without amending its Answer. As to the relationship between
Loadmasters and Glodel, it contends that a contract of agency
existed between the two corporations.
Subrogation is the substitution of one person in the place of
another with reference to a lawful claim or right, so that he who is
substituted succeeds to the rights of the other in relation to a debt
or claim, including its remedies or securities.[9] Doubtless, R&B
Insurance is subrogated to the rights of the insured to the extent of
the amount it paid the consignee under the marine insurance, as
provided under Article 2207 of the Civil Code, which reads:
ART. 2207. If the plaintiffs property has been insured, and he has
received indemnity from the insurance company for the injury or
loss arising out of the wrong or breach of contract complained of,
the insurance company shall be subrogated to the rights of the
insured against the wrong-doer or the person who has violated the
contract. If the amount paid by the insurance company does not
fully cover the injury or loss, the aggrieved party shall be entitled to
recover the deficiency from the person causing the loss or injury.
As subrogee of the rights and interest of the consignee, R&B
Insurance has the right to seek reimbursement from either
Loadmasters or Glodel or both for breach of contract and/or tort.
The issue now is who, between Glodel and Loadmasters, is liable to
pay R&B Insurance for the amount of the indemnity it paid
Columbia.
At the outset, it is well to resolve the issue of whether Loadmasters
and Glodel are common carriers to determine their liability for the
loss of the subject cargo. Under Article 1732 of the Civil Code,
common carriers are persons, corporations, firms, or associations
engaged in the business of carrying or transporting passenger or
goods, or both by land, water or air for compensation, offering their
services to the public.
Based on the aforecited definition, Loadmasters is a common carrier
because it is engaged in the business of transporting goods by land,
through its trucking service. It is a common carrier as distinguished
from a private carrier wherein the carriage is generally undertaken
by special agreement and it does not hold itself out to carry goods
for the general public.[10] The distinction is significant in the sense
that the rights and obligations of the parties to a contract of private
carriage are governed principally by their stipulations, not by the
law on common carriers.
In the present case, there is no indication that the undertaking in
the contract between Loadmasters and Glodel was private in
character. There is no showing that Loadmasters solely and
exclusively rendered services to Glodel.
In fact, Loadmasters admitted that it is a common carrier.
In the same vein, Glodel is also considered a common carrier within
the context of Article 1732. In its Memorandum,[13] it states that it
is a corporation duly organized and existing under the laws of the
Republic of the Philippines and is engaged in the business of
customs brokering. It cannot be considered otherwise because as
held by this Court in Schmitz Transport & Brokerage Corporation v.
Transport Venture, Inc.,[14] a customs broker is also regarded as a
common carrier, the transportation of goods being an integral part
of its business.
Loadmasters and Glodel, being both common carriers, are
mandated from the nature of their business and for reasons of
public policy, to observe the extraordinary diligence in the vigilance
over the goods transported by them according to all the
circumstances of such case, as required by Article 1733 of the Civil
Code. When the Court speaks of extraordinary diligence, it is that
extreme measure of care and caution which persons of unusual
prudence and circumspection observe for securing and preserving
their own property or rights.[15] This exacting standard imposed on
common carriers in a contract of carriage of goods is intended to tilt
the scales in favor of the shipper who is at the mercy of the
common carrier once the goods have been lodged for shipment.[16]
Thus, in case of loss of the goods, the common carrier is presumed
to have been at fault or to have acted negligently.[17] This
presumption of fault or negligence, however, may be rebutted by
proof that the common carrier has observed extraordinary diligence
over the goods.
With respect to the time frame of this extraordinary responsibility,
the Civil Code provides that the exercise of extraordinary diligence
lasts from the time the goods are unconditionally placed in the
possession of, and received by, the carrier for transportation until
the same are delivered, actually or constructively, by the carrier to
the consignee, or to the person who has a right to receive them.[18]
Premises considered, the Court is of the view that both Loadmasters
and Glodel are jointly and severally liable to R & B Insurance for the
loss of the subject cargo. Under Article 2194 of the New Civil Code,
the responsibility of two or more persons who are liable for a quasi-
delict is solidary.
Loadmasters claim that it was never privy to the contract entered
into by Glodel with the consignee Columbia or R&B Insurance as
subrogee, is not a valid defense. It may not have a direct contractual
relation with Columbia, but it is liable for tort under the provisions
of Article 2176 of the Civil Code on quasi-delicts which expressly
provide:
ART. 2176. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage
done. Such fault or negligence, if there is no pre-existing contractual
relation between the parties, is called a quasi-delict and is governed
by the provisions of this Chapter.
Pertinent is the ruling enunciated in the case of Mindanao Terminal
and Brokerage Service, Inc. v. Phoenix Assurance Company of New
York,/McGee & Co., Inc.[19] where this Court held that a tort may
arise despite the absence of a contractual relationship, to wit:
We agree with the Court of Appeals that the complaint filed by
Phoenix and McGee against Mindanao Terminal, from which the
present case has arisen, states a cause of action. The present action
is based on quasi-delict, arising from the negligent and careless
loading and stowing of the cargoes belonging to Del Monte
Produce. Even assuming that both Phoenix and McGee have only
been subrogated in the rights of Del Monte Produce, who is not a
party to the contract of service between Mindanao Terminal and
Del Monte, still the insurance carriers may have a cause of action in
light of the Courts consistent ruling that the act that breaks the
contract may be also a tort. In fine, a liability for tort may arise even
under a contract, where tort is that which breaches the contract. In
the present case, Phoenix and McGee are not suing for damages for
injuries arising from the breach of the contract of service but from
the alleged negligent manner by which Mindanao Terminal handled
the cargoes belonging to Del Monte Produce. Despite the absence
of contractual relationship between Del Monte Produce and
Mindanao Terminal, the allegation of negligence on the part of the
defendant should be sufficient to establish a cause of action arising
from quasi-delict.
In connection therewith, Article 2180 provides:
ART. 2180. The obligation imposed by Article 2176 is demandable
not only for ones own acts or omissions, but also for those of
persons for whom one is responsible.
Employers shall be liable for the damages caused by their
employees and household helpers acting within the scope of their
assigned tasks, even though the former are not engaged in any
business or industry.
It is not disputed that the subject cargo was lost while in the
custody of Loadmasters whose employees (truck driver and helper)
were instrumental in the hijacking or robbery of the shipment. As
employer, Loadmasters should be made answerable for the
damages caused by its employees who acted within the scope of
their assigned task of delivering the goods safely to the warehouse.
Whenever an employees negligence causes damage or injury to
another, there instantly arises a presumption juris tantum that the
employer failed to exercise diligentissimi patris families in the
selection (culpa in eligiendo) or supervision (culpa in vigilando) of its
employees.[20] To avoid liability for a quasi-delict committed by its
employee, an employer must overcome the presumption by
presenting convincing proof that he exercised the care and diligence
of a good father of a family in the selection and supervision of his
employee.[21] In this regard, Loadmasters failed.
Glodel is also liable because of its failure to exercise extraordinary
diligence. It failed to ensure that Loadmasters would fully comply
with the undertaking to safely transport the subject cargo to the
designated destination. It should have been more prudent in
entrusting the goods to Loadmasters by taking precautionary
measures, such as providing escorts to accompany the trucks in
delivering the cargoes. Glodel should, therefore, be held liable with
Loadmasters. Its defense of force majeure is unavailing.
At this juncture, the Court clarifies that there exists no principal-
agent relationship between Glodel and Loadmasters, as erroneously
found by the CA. Article 1868 of the Civil Code provides: By the
contract of agency a person binds himself to render some service or
to do something in representation or on behalf of another, with the
consent or authority of the latter. The elements of a contract of
agency are: (1) consent, express or implied, of the parties to
establish the relationship; (2) the object is the execution of a
juridical act in relation to a third person; (3) the agent acts as a
representative and not for himself; (4) the agent acts within the
scope of his authority.[22]
Accordingly, there can be no contract of agency between the
parties. Loadmasters never represented Glodel. Neither was it ever
authorized to make such representation. It is a settled rule that the
basis for agency is representation, that is, the agent acts for and on
behalf of the principal on matters within the scope of his authority
and said acts have the same legal effect as if they were personally
executed by the principal. On the part of the principal, there must
be an actual intention to appoint or an intention naturally inferable
from his words or actions, while on the part of the agent, there
must be an intention to accept the appointment and act on it.[23]
Such mutual intent is not obtaining in this case.
What then is the extent of the respective liabilities of Loadmasters
and Glodel? Each wrongdoer is liable for the total damage suffered
by R&B Insurance. Where there are several causes for the resulting
damages, a party is not relieved from liability, even partially. It is
sufficient that the negligence of a party is an efficient cause without
which the damage would not have resulted. It is no defense to one
of the concurrent tortfeasors that the damage would not have
resulted from his negligence alone, without the negligence or
wrongful acts of the other concurrent tortfeasor. As stated in the
case of Far Eastern Shipping v. Court of Appeals,
X x x. Where several causes producing an injury are concurrent and
each is an efficient cause without which the injury would not have
happened, the injury may be attributed to all or any of the causes
and recovery may be had against any or all of the responsible
persons although under the circumstances of the case, it may
appear that one of them was more culpable, and that the duty
owed by them to the injured person was not the same. No actor's
negligence ceases to be a proximate cause merely because it does
not exceed the negligence of other actors. Each wrongdoer is
responsible for the entire result and is liable as though his acts were
the sole cause of the injury.
There is no contribution between joint tortfeasors whose liability is
solidary since both of them are liable for the total damage. Where
the concurrent or successive negligent acts or omissions of two or
more persons, although acting independently, are in combination
the direct and proximate cause of a single injury to a third person, it
is impossible to determine in what proportion each contributed to
the injury and either of them is responsible for the whole injury.
Where their concurring negligence resulted in injury or damage to a
third party, they become joint tortfeasors and are solidarily liable
for the resulting damage under Article 2194 of the Civil Code.
The Court now resolves the issue of whether Glodel can collect from
Loadmasters, it having failed to file a cross-claim against the latter.
Undoubtedly, Glodel has a definite cause of action against
Loadmasters for breach of contract of service as the latter is
primarily liable for the loss of the subject cargo. In this case,
however, it cannot succeed in seeking judicial sanction against
Loadmasters because the records disclose that it did not properly
interpose a cross-claim against the latter. Glodel did not even pray
that Loadmasters be liable for any and all claims that it may be
adjudged liable in favor of R&B Insurance. Under the Rules, a
compulsory counterclaim, or a cross-claim, not set up shall be
barred.[25] Thus, a cross-claim cannot be set up for the first time on
appeal.
For the consequence, Glodel has no one to blame but itself. The
Court cannot come to its aid on equitable grounds. Equity, which
has been aptly described as a justice outside legality, is applied only
in the absence of, and never against, statutory law or judicial rules
of procedure.[26] The Court cannot be a lawyer and take the
cudgels for a party who has been at fault or negligent.
WHEREFORE, the petition is PARTIALLY GRANTED. The August 24,
2007 Decision of the Court of Appeals is MODIFIED to read as
follows:
WHEREFORE, judgment is rendered declaring petitioner
Loadmasters Customs Services, Inc. and respondent Glodel
Brokerage Corporation jointly and severally liable to respondent
R&B Insurance Corporation for the insurance indemnity it paid to
consignee Columbia Wire & Cable Corporation and ordering both
parties to pay, jointly and severally, R&B Insurance Corporation a]
the amount of P1,896,789.62 representing the insurance indemnity;
b] the amount equivalent to ten (10%) percent thereof for attorneys
fees; and c] the amount of P22,427.18 for litigation expenses.
The cross-claim belatedly prayed for by respondent Glodel
Brokerage Corporation against petitioner Loadmasters Customs
Services, Inc. is DENIED.
SO ORDERED.
G.R. No. 194121 July 11, 2016
TORRES-MADRID BROKERAGE, INC., Petitioner ,vs. FEB MITSUI
MARINE INSURANCE CO., INC. and BENJAMIN P. MANALAST AS,
doing business under the name of BMT TRUCKING SERVICES,
Respondents
On October 7, 2000, a shipment of various electronic goods from
Thailand and Malaysia arrived at the Port of Manila for Sony
Philippines, Inc. (Sony). Previous to the arrival, Sony had engaged
the services of TMBI to facilitate, process, withdraw, and deliver the
shipment from the port to its warehouse in Biñan, Laguna.2
TMBI – who did not own any delivery trucks – subcontracted the
services of Benjamin Manalastas’ company, BMT Trucking Services
(BMT), to transport the shipment from the port to the Biñan
warehouse.3 Incidentally, TMBI notified Sony who had no
objections to the arrangement.
Four BMT trucks picked up the shipment from the port at about
11:00 a.m. of October 7, 2000. However, BMT could not
immediately undertake the delivery because of the truck ban and
because the following day was a Sunday. Thus, BMT scheduled the
delivery on October 9, 2000.
In the early morning of October 9, 2000, the four trucks left BMT’s
garage for Laguna.5 However, only three trucks arrived at Sony’s
Biñan warehouse.
At around 12:00 noon, the truck driven by Rufo Reynaldo Lapesura
(NSF-391) was found abandoned along the Diversion Road in
Filinvest, Alabang, Muntinlupa City.6 Both the driver and the
shipment were missing.
Later that evening, BMT’s Operations Manager Melchor Manalastas
informed Victor Torres, TMBI’s General Manager, of the
development.7 They went to Muntinlupa together to inspect the
truck and to report the matter to the police.
Victor Torres also filed a complaint with the National Bureau of
Investigation (NBI) against Lapesura for "hijacking."9 The complaint
resulted in a recommendation by the NBI to the Manila City
Prosecutor’s Office to prosecute Lapesura for qualified theft.
TMBI notified Sony of the loss through a letter dated October 10,
2000.11 It also sent BMT a letter dated March 29, 2001, demanding
payment for the lost shipment. BMT refused to pay, insisting that
the goods were "hijacked."
In the meantime, Sony filed an insurance claim with the Mitsui, the
insurer of the goods. After evaluating the merits of the claim, Mitsui
paid Sony PHP7,293,386.23 corresponding to the value of the lost
goods.
After being subrogated to Sony’s rights, Mitsui sent TMBI a demand
letter dated August 30, 2001 for payment of the lost goods. TMBI
refused to pay Mitsui’s claim. As a result, Mitsui filed a complaint
against TMBI on November 6, 2001,
TMBI, in turn, impleaded Benjamin Manalastas, the proprietor of
BMT, as a third-party defendant. TMBI alleged that BMT’s driver,
Lapesura, was responsible for the theft/hijacking of the lost cargo
and claimed BMT’s negligence as the proximate cause of the loss.
TMBI prayed that in the event it is held liable to Mitsui for the loss,
it should be reimbursed by BMT.
At the trial, it was revealed that BMT and TMBI have been doing
business with each other since the early 80’s. It also came out that
there had been a previous hijacking incident involving Sony’s cargo
in 1997, but neither Sony nor its insurer filed a complaint against
BMT or TMBI.
On August 5, 2008, the RTC found TMBI and Benjamin Manalastas
jointly and solidarily liable to pay Mitsui PHP 7,293,386.23 as actual
damages, attorney’s fees equivalent to 25% of the amount claimed,
and the costs of the suit.14 The RTC held that TMBI and Manalastas
were common carriers and had acted negligently.
Both TMBI and BMT appealed the RTC’s verdict.
TMBI denied that it was a common carrier required to exercise
extraordinary diligence. It maintains that it exercised the diligence
of a good father of a family and should be absolved of liability
because the truck was "hijacked" and this was a fortuitous event.
BMT claimed that it had exercised extraordinary diligence over the
lost shipment, and argued as well that the loss resulted from a
fortuitous event.
On October 14, 2010, the CA affirmed the RTC’s decision but
reduced the award of attorney’s fees to PHP 200,000.
The CA held: (1) that "hijacking" is not necessarily a fortuitous event
because the term refers to the general stealing of cargo during
transit;15 (2) that TMBI is a common carrier engaged in the business
of transporting goods for the general public for a fee;16 (3) even if
the "hijacking" were a fortuitous event, TMBI’s failure to observe
extraordinary diligence in overseeing the cargo and adopting
security measures rendered it liable for the loss;17 and (4) even if
TMBI had not been negligent in the handling, transport and the
delivery of the shipment, TMBI still breached its contractual
obligation to Sony when it failed to deliver the shipment.18
TMBI disagreed with the CA’s ruling and filed the present petition
on December 3, 2010.
The Arguments
TMBI’s Petition
TMBI insists that the hijacking of the truck was a fortuitous event. It
contests the CA’s finding that neither force nor intimidation was
used in the taking of the cargo. Considering Lapesura was never
found, the Court should not discount the possibility that he was a
victim rather than a perpetrator.19
TMBI denies being a common carrier because it does not own a
single truck to transport its shipment and it does not offer transport
services to the public for compensation.20 It emphasizes that Sony
knew TMBI did not have its own vehicles and would subcontract the
delivery to a third-party.
Further, TMBI now insists that the service it offered was limited to
the processing of paperwork attendant to the entry of Sony’s goods.
It denies that delivery of the shipment was a part of its obligation.21
TMBI solely blames BMT as it had full control and custody of the
cargo when it was lost.22 BMT, as a common carrier, is presumed
negligent and should be responsible for the loss.
BMT’s Comment
BMT insists that it observed the required standard of care.23 Like
the petitioner, BMT maintains that the hijacking was a fortuitous
event – a force majeure – that exonerates it from liability.24 It
points out that Lapesura has never been seen again and his fate
remains a mystery. BMT likewise argues that the loss of the cargo
necessarily showed that the taking was with the use of force or
intimidation.
If there was any attendant negligence, BMT points the finger on
TMBI who failed to send a representative to accompany the
shipment.26 BMT further blamed TMBI for the latter’s failure to
adopt security measures to protect Sony’s cargo.
Mitsui counters that neither TMBI nor BMT alleged or proved during
the trial that the taking of the cargo was accompanied with grave or
irresistible threat, violence, or force.28 Hence, the incident cannot
be considered "force majeure" and TMBI remains liable for breach
of contract.
Mitsui emphasizes that TMBI’s theory – that force or intimidation
must have been used because Lapesura was never found – was only
raised for the first time before this Court.29 It also discredits the
theory as a mere conjecture for lack of supporting evidence.
Mitsui adopts the CA’s reasons to conclude that TMBI is a common
carrier. It also points out Victor Torres’ admission during the trial
that TMBI’s brokerage service includes the eventual delivery of the
cargo to the consignee.
Mitsui invokes as well the legal presumption of negligence against
TMBI, pointing out that TMBI simply entrusted the cargo to BMT
without adopting any security measures despite: (1) a previous
hijacking incident when TMBI lost Sony’s cargo; and (2) TMBI’s
knowledge that the cargo was worth more than 10 million pesos.31
Mitsui affirms that TMBI breached the contract of carriage through
its negligent handling of the cargo, resulting in its loss.
The Court’s Ruling
A brokerage may be considered a common carrier if it also
undertakes to deliver the goods for its customers
Common carriers are persons, corporations, firms or associations
engaged in the business of transporting passengers or goods or
both, by land, water, or air, for compensation, offering their services
to the public.32 By the nature of their business and for reasons of
public policy, they are bound to observe extraordinary diligence in
the vigilance over the goods and in the safety of their passengers.
In A.F. Sanchez Brokerage Inc. v. Court of Appeals,34we held that a
customs broker – whose principal business is the preparation of the
correct customs declaration and the proper shipping documents – is
still considered a common carrier if it also undertakes to deliver the
goods for its customers. The law does not distinguish between one
whose principal business activity is the carrying of goods and one
who undertakes this task only as an ancillary activity.35 This ruling
has been reiterated in Schmitz Transport & Brokerage Corp. v.
Transport Venture, Inc.,36 Loadmasters Customs Services, Inc. v.
Glodel Brokerage Corporation,37and Westwind Shipping
Corporation v. UCPB General Insurance Co., Inc.38
Despite TMBI’s present denials, we find that the delivery of the
goods is an integral, albeit ancillary, part of its brokerage services.
TMBI admitted that it was contracted to facilitate, process, and
clear the shipments from the customs authorities, withdraw them
from the pier, then transport and deliver them to Sony’s warehouse
in Laguna.39
Further, TMBI’s General Manager Victor Torres described the nature
of its services as follows:
ATTY. VIRTUDAZO: Could you please tell the court what is the
nature of the business of [TMBI]?
Witness MR. Victor Torres of Torres Madrid: We are engaged in
customs brokerage business. We acquire the release documents
from the Bureau of Customs and eventually deliver the cargoes to
the consignee’s warehouse and we are engaged in that kind of
business, sir.40
That TMBI does not own trucks and has to subcontract the delivery
of its clients’ goods, is immaterial. As long as an entity holds itself to
the public for the transport of goods as a business, it is considered a
common carrier regardless of whether it owns the vehicle used or
has to actually hire one.
Lastly, TMBI’s customs brokerage services – including the
transport/delivery of the cargo – are available to anyone willing to
pay its fees. Given these circumstances, we find it undeniable that
TMBI is a common carrier.
Consequently, TMBI should be held responsible for the loss,
destruction, or deterioration of the goods it transports unless it
results from:
(1) Flood, storm, earthquake, lightning, or other natural disaster or
calamity;
(2) Act of the public enemy in war, whether international or civil;
(3) Act of omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the
containers;
(5) Order or act of competent public authority.
For all other cases - such as theft or robbery – a common carrier is
presumed to have been at fault or to have acted negligently, unless
it can prove that it observed extraordinary diligence.
Simply put, the theft or the robbery of the goods is not considered a
fortuitous event or a force majeure. Nevertheless, a common carrier
may absolve itself of liability for a resulting loss: (1) if it proves that
it exercised extraordinary diligence in transporting and safekeeping
the goods;44 or (2) if it stipulated with the shipper/owner of the
goods to limit its liability for the loss, destruction, or deterioration
of the goods to a degree less than extraordinary diligence.
However, a stipulation diminishing or dispensing with the common
carrier’s liability for acts committed by thieves or robbers who do
not act with grave or irresistible threat, violence, or force is void
under Article 1745 of the Civil Code for being contrary to public
policy.46 Jurisprudence, too, has expanded Article 1734’s five
exemptions. De Guzman v. Court of Appeals47 interpreted Article
1745 to mean that a robbery attended by "grave or irresistible
threat, violence or force" is a fortuitous event that absolves the
common carrier from liability.
In the present case, the shipper, Sony, engaged the services of
TMBI, a common carrier, to facilitate the release of its shipment and
deliver the goods to its warehouse. In turn, TMBI subcontracted a
portion of its obligation – the delivery of the cargo – to another
common carrier, BMT.
Despite the subcontract, TMBI remained responsible for the cargo.
Under Article 1736, a common carrier’s extraordinary responsibility
over the shipper’s goods lasts from the time these goods are
unconditionally placed in the possession of, and received by, the
carrier for transportation, until they are delivered, actually or
constructively, by the carrier to the consignee.48
That the cargo disappeared during transit while under the custody
of BMT – TMBI’s subcontractor – did not diminish nor terminate
TMBI’s responsibility over the cargo. Article 1735 of the Civil Code
presumes that it was at fault.
Instead of showing that it had acted with extraordinary diligence,
TMBI simply argued that it was not a common carrier bound to
observe extraordinary diligence. Its failure to successfully establish
this premise carries with it the presumption of fault or negligence,
thus rendering it liable to Sony/Mitsui for breach of contract.
Specifically, TMBI’s current theory – that the hijacking was attended
by force or intimidation – is untenable.
First, TMBI alleged in its Third Party Complaint against BMT that
Lapesura was responsible for hijacking the shipment.49 Further,
Victor Torres filed a criminal complaint against Lapesura with the
NBI.50 These actions constitute direct and binding admissions that
Lapesura stole the cargo. Justice and fair play dictate that TMBI
should not be allowed to change its legal theory on appeal.
Second, neither TMBI nor BMT succeeded in substantiating this
theory through evidence. Thus, the theory remained an
unsupported allegation no better than speculations and
conjectures. The CA therefore correctly disregarded the defense of
force majeure.
TMBI and BMT are not solidarily liable to Mitsui
We disagree with the lower courts’ ruling that TMBI and BMT are
solidarily liable to Mitsui for the loss as joint tortfeasors. The ruling
was based on Article 2194 of the Civil Code:
Art. 2194. The responsibility of two or more persons who are liable
for quasi-delict is solidary.
Notably, TMBI’s liability to Mitsui does not stem from a quasi-delict
(culpa aquiliana) but from its breach of contract (culpa contractual).
The tie that binds TMBI with Mitsui is contractual, albeit one that
passed on to Mitsui as a result of TMBI’s contract of carriage with
Sony to which Mitsui had been subrogated as an insurer who had
paid Sony’s insurance claim. The legal reality that results from this
contractual tie precludes the application of quasi-delict based
Article 2194.
A third party may recover from a common carrier for quasi-delict
but must prove actual negligence
We likewise disagree with the finding that BMT is directly liable to
Sony/Mitsui for the loss of the cargo. While it is undisputed that the
cargo was lost under the actual custody of BMT (whose employee is
the primary suspect in the hijacking or robbery of the shipment), no
direct contractual relationship existed between Sony/Mitsui and
BMT. If at all, Sony/Mitsui’s cause of action against BMT could only
arise from quasi-delict, as a third party suffering damage from the
action of another due to the latter’s fault or negligence, pursuant to
Article 2176 of the Civil Code.
We have repeatedly distinguished between an action for breach of
contract (culpa contractual) and an action for quasi-delict (culpa
aquiliana).
In culpa contractual, the plaintiff only needs to establish the
existence of the contract and the obligor’s failure to perform his
obligation. It is not necessary for the plaintiff to prove or even allege
that the obligor’s non-compliance was due to fault or negligence
because Article 1735 already presumes that the common carrier is
negligent. The common carrier can only free itself from liability by
proving that it observed extraordinary diligence. It cannot discharge
this liability by shifting the blame on its agents or servants.
On the other hand, the plaintiff in culpa aquiliana must clearly
establish the defendant’s fault or negligence because this is the very
basis of the action.53 Moreover, if the injury to the plaintiff resulted
from the act or omission of the defendant’s employee or servant,
the defendant may absolve himself by proving that he observed the
diligence of a good father of a family to prevent the damage.
In the present case, Mitsui’s action is solely premised on TMBI’s
breach of contract. Mitsui did not even sue BMT, much less prove
any negligence on its part. If BMT has entered the picture at all, it is
because TMBI sued it for reimbursement for the liability that TMBI
might incur from its contract of carriage with Sony/Mitsui.
Accordingly, there is no basis to directly hold BMT liable to Mitsui
for quasi-delict.
In these lights, TMBI is liable to Sony (subrogated by Mitsui) for
breaching the contract of carriage. In tum, TMBI is entitled to
reimbursement from BMT due to the latter's own breach of its
contract of carriage with TMBI. The proverbial buck stops with BMT
who may either: (a) absorb the loss, or (b) proceed after its missing
driver, the suspected culprit, pursuant to Article 2181.
WHEREFORE, the Court hereby ORDERS petitioner TorresMadrid
Brokerage, Inc. to pay the respondent FEB Mitsui Marine Insurance
Co", Inc. the following:
a. Actual damages in the amount of PHP 7,293,386.23 plus legal
interest from the time the complaint was filed until it is fully paid;
b. Attorney's foes in the amount of PHP 200,000.00; and
c. Costs of suit.
Respondent Benjamin P. Manalastas is in turn ORDERED to
REIMBURSE Torres-Madrid Brokerage, Inc. of the above-mentioned
amounts.

BMT is liable to TMBI for breach of their contract of carriage SO ORDERED.

We do not hereby say that TMBI must absorb the loss. By

subcontracting the cargo delivery to BMT, TMBI entered into its
own contract of carriage with a fellow common carrier.

The cargo was lost after its transfer to BMT' s custody based on its
contract of carriage with TMBI. Following Article 1735, BMT is
presumed to be at fault. Since BMT failed to prove that it observed
extraordinary diligence in the performance of its obligation to TMBI,
it is liable to TMBI for breach of their contract of carriage.