A.F. SANCHEZ BROKERAGE INC.

vs.
THE HON. COURT OF APPEALS and FGU INSURANCE CORPORATION
G.R. No. 147079
December 21, 2004

Article 1733 of the Civil Code, extraordinary diligence in the vigilance over the goods it
transports according to all the circumstances of each case. In the event that the goods are
lost, destroyed or deteriorated, it is presumed to have been at fault or to have acted
negligently, unless it proves that it observed extraordinary diligence.

FACTS:

• Wyeth Pharma hired the service of the petitioner and defendant in the importation of
their product (oral contraceptives/drugs). Petitioner being the customs broker and the
defendant as their insurance company.
• When the cargo-product arrives at the NAIA, the cargo were put to warehouse PSI
(Philippine Skylanders, Inc.) located also in NAIA
• The petitioner-broker were to settle all necessary customs taxes and payments up until
to the delivery of the cargo to the warehouse of Wyeth Pharma. As Wyeth Phrama being
the old customer of the petitioner-broker, the latter did not inspect at all the cargoe and
loaded them to their container for the delivery and to be inspected at the Hizon
Laboratory, as per Wyeth Pharma.
• The petitioner-broker received the cargo from PSI and marked all goods as in “good
condition” however upon the delivery to the laboratory, the latter marked some goods
as in “bad condition” so as well to the warehouse of Wyeth Pharma.
• Wyeth Pharma demanded for the payment of the damaged goods but the petitioner-
broker heed the demand, so Wyeth Pharma filed an insurance claim to the respondent-
insurance for the damaged goods. The latter paid the amount.
• The respondent-insurance now claims against the petitioner-broker to pay the X amount
for the reason that as a common carrier, the petitioner-broker is liable for the damages.

ISSUE: Whether or not Petitioner-Brokerage is liable for the damages.

RULING: Yes. Petitioner as a common carrier is mandated to observe, under Article 1733 of the
Civil Code, extraordinary diligence in the vigilance over the goods it transports according to all
the circumstances of each case. In the event that the goods are lost, destroyed or deteriorated,
it is presumed to have been at fault or to have acted negligently, unless it proves that it observed
extraordinary diligence.

Since petitioner received all the cargoes in good order and accepts the same without protest or
exception, and upon their delivery to Hizon Laboratories, Inc. a portion thereof was found to be
in bad order, it was incumbent on petitioner to prove that it exercised extraordinary diligence in
the carriage of the goods. It did not, however. Hence, its presumed negligence under Article 1735
of the Civil Code remains unrebutted.