REPUBLIC VS.

LORENZO SHIPPING CORPORATION

FACTS

Republic of the Philippines, through the Department of Health (DOH), and the
Cooperative for American Relief Everywhere, Inc. (CARE) signed an agreement wherein CARE
would acquire from the United States government donations of non-fat dried milk and other food
products from January 1, 1987 to December 31, 1989. In turn, the Philippines would transport
and distribute the donated commodities to the intended beneficiaries in the country.

The government entered into a contract of carriage of goods with petitioner National
Trucking and Forwarding Corporation (NTFC) and the latter shipped 4,868 bags of non-fat dried
milk through respondent Lorenzo Shipping Corporation (LSC). The consignee named in the bills
of lading issued by the respondent was Abdurahman Jama, petitioners branch supervisor in
Zamboanga City.

On reaching the port of Zamboanga City, respondents agent, Efren Ruste Shipping
Agency, unloaded the 4,868 bags of non-fat dried milk and delivered the goods to petitioners
warehouse. Before each delivery, the delivery checkers of Efren Ruste Shipping Agency,
requested Abdurahman to surrender the original bills of lading, but the latter merely presented
certified true copies thereof. Upon completion of each delivery, the checkers asked Abdurahman
to sign the delivery receipts. However, at times when Abdurahman had to attend to other
business before a delivery was completed, he instructed his subordinates to sign the delivery
receipts for him.

The petitioner allegedly did not receive the subject goods. Thus, petitioner NTFC filed a
formal claim for non-delivery of the goods shipped through respondent. In reply, the respondent
explained that the cargo had already been delivered to Abdurahman. The petitioner then
decided to investigate the loss of the goods. But before the investigation was over, Abdurahman
resigned as branch supervisor of petitioner.

Disbelieving respondents insistence that the goods were delivered, the government
through the DOH, CARE, and NTFC as plaintiffs filed an action for breach of contract of
carriage, against respondent as defendant, with the RTC of Manila.

After trial, the RTC resolved the case in favor of the defendant. Petitioner appealed to
the Court of Appeals on the grounds that the lower court faulted for not holding that respondent
failed to deliver the cargo, and that respondent failed to exercise the extraordinary diligence
required of common carriers. The Court of Appeals found that the trial court did not commit any
error. It dismissed the appeal, and affirmed the assailed decision in toto. Hence, this petition.

ISSUE
 Whether the respondent is negligent as common carrier for the loss or deterioration of
the goods.

RULING

We rule for respondent.

Article 1733 of the Civil Code demands that a common carrier observe extraordinary
diligence over the goods transported by it. Extraordinary diligence is that extreme measure of
care and caution which persons of unusual prudence and circumspection use for securing and
preserving their own property or rights. 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. Hence, in case of
loss of goods in transit, the common carrier is presumed under the law to have been at fault or
negligent. However, the presumption of fault or negligence, may be overturned by competent
evidence showing that the common carrier has observed extraordinary diligence over the
goods.

In the instant case, we agree with the court a quo that the respondent adequately proved
that it exercised extraordinary diligence. Although the original bills of lading remained with
petitioner, respondents agents demanded from Abdurahman the certified true copies of the bills
of lading. They also asked the latter and in his absence, his designated subordinates, to sign
the cargo delivery receipts.

This practice, which respondents agents testified to be their standard operating

ART. 353. . . .

After the contract has been complied with, the bill of lading which the carrier has
issued shall be returned to him and by virtue of the exchange of this title with the
thing transported, the respective obligations and actions shall be considered
cancelled.

In case the consignee, upon receiving the goods, cannot return the bill of lading
subscribed by the carrier, because of its loss or of any other cause, he must give the latter a
receipt for the goods delivered, this receipt producing the same effects as the return of the bill of
lading. (Emphasis supplied)

Conformably with the aforecited provision, the surrender of the original bill of lading is
not a condition precedent for a common carrier to be discharged of its contractual obligation. If
surrender of the original bill of lading is not possible, acknowledgment of the delivery by signing
the delivery receipt suffices. This is what respondent did.

JAPAN AIRLINES VS. SIMANGAN

Jesus Simangan needed to go to the USA to donate a kidney to his ailing cousin, Loreto
Simangan. He was issued an emergency U.S. visa by the American Embassy in Manila. Then
respondent purchased a round trip plane ticket from petitioner JAL. On July 29, 1992, the date
of his flight, respondent went to Ninoy Aquino International Airport and after passing through
said immigration and security procedures, respondent was allowed by JAL to enter its airplane.
While inside the airplane, JAL's airline crew suspected respondent of carrying a falsified travel
document and imputed that he would only use the trip to the United States as a pretext to stay
and work in Japan. The stewardess asked respondent to show his travel documents and was
ordered to stand up and leave the plane. Respondent pleaded but his pleas were ignored. The
plane took off and he was left behind.

Respondent filed an action for damages against JAL with the Regional Trial Court. He
claimed he was not able to donate his kidney to Loreto; and that he suffered terrible
embarrassment and mental anguish. He prayed that he be awarded damages. JAL denied the
material allegations of the complaint. It argued, among others, that its failure to allow
respondent to fly on his scheduled departure was due to "a need for his travel documents to be
authenticated by the United States Embassy" because no one from JAL's airport staff had
encountered a parole visa before. The RTC rendered its decision in favor of the respondent.
JAL appealed to the CA contending that it is not guilty of breach of contract of carriage, hence,
not liable for damages. The CA affirmed the decision of the RTC. Hence, this petition.

ISSUE

Whether JAL is guilty of breach of contract of carriage.

RULING

Yes, JAL is guilty of contract of carriage.

JAL did not allow respondent to fly. It informed respondent that there was a need to first
check the authenticity of his travel documents with the U.S. Embassy. As admitted by JAL, the
flight could not wait for Mr. Simangan because it was ready to depart. Since JAL definitely
declared that the flight could not wait for respondent, it gave respondent no choice but to be left
behind. The latter was unceremoniously bumped off despite his protestations and valid travel
documents and notwithstanding his contract of carriage with JAL. Damage had already been
done when respondent was offered to fly the next day on July 30, 1992. Said offer did not cure
JALs default.

Apart from the fact that respondents plane ticket, boarding pass, travel authority and
personal articles already passed the rigid immigration and security routines, JAL, as a common
carrier, ought to know the kind of valid travel documents respondent carried. As provided in
Article 1755 of the New Civil Code: A common carrier is bound to carry the passengers safely
as far as human care and foresight can provide, using the utmost diligence of very cautious
persons, with a due regard for all the circumstances. Thus, We find untenable JALs defense of
verification of respondents documents in its breach of contract of carriage. It bears repeating
that the power to admit or not an alien into the country is a sovereign act which cannot be
interfered with even by JAL.

In an action for breach of contract of carriage, all that is required of plaintiff is to prove
the existence of such contract and its non-performance by the carrier through the latters failure
to carry the passenger safely to his destination. Respondent has complied with these twin
requisites.