Transpo Full Text
Transpo Full Text
goods are lost, destroyed or deteriorated. There are very few instances when
the presumption of negligence does not attach and these instances are
ESTRELLITA M. BASCOS, petitioners, enumerated in Article 1734. In those cases where the presumption is applied,
vs. the common carrier must prove that it exercised extraordinary diligence in
COURT OF APPEALS and RODOLFO A. CIPRIANO, respondents. order to overcome the presumption . . . The presumption of negligence was
raised against petitioner. It was petitioner's burden to overcome it. Thus,
Modesto S. Bascos for petitioner. contrary to her assertion, private respondent need not introduce any evidence
to prove her negligence. Her own failure to adduce sufficient proof of
Pelaez, Adriano & Gregorio for private respondent. extraordinary diligence made the presumption conclusive against her.
This is a petition for review on certiorari of the decision ** of the Court of 5. That there is no sufficient security for the claim sought to be enforced by
Appeals in "RODOLFO A. CIPRIANO, doing business under the name the present action;
CIPRIANO TRADING ENTERPRISES plaintiff-appellee, vs. ESTRELLITA
M. BASCOS, doing business under the name of BASCOS TRUCKING, 6. That the amount due to the plaintiff in the above-entitled case is above all
defendant-appellant," C.A.-G.R. CV No. 25216, the dispositive portion of legal counterclaims;"
which is quoted hereunder:
The trial court granted the writ of preliminary attachment on February 17,
"PREMISES considered, We find no reversible error in the decision appealed 1987.
from, which is hereby affirmed in toto. Costs against appellant." 1
In her answer, petitioner interposed the following defenses: that there was no
The facts, as gathered by this Court, are as follows: contract of carriage since CIPTRADE leased her cargo truck to load the
cargo from Manila Port Area to Laguna; that CIPTRADE was liable to
Rodolfo A. Cipriano representing Cipriano Trading Enterprise (CIPTRADE petitioner in the amount of P11,000.00 for loading the cargo; that the truck
for short) entered into a hauling contract 2 with Jibfair Shipping Agency carrying the cargo was hijacked along Canonigo St., Paco, Manila on the
Corporation whereby the former bound itself to haul the latter's 2,000 m/tons night of October 21, 1988; that the hijacking was immediately reported to
of soya bean meal from Magallanes Drive, Del Pan, Manila to the warehouse CIPTRADE and that petitioner and the police exerted all efforts to locate the
of Purefoods Corporation in Calamba, Laguna. To carry out its obligation, hijacked properties; that after preliminary investigation, an information for
CIPTRADE, through Rodolfo Cipriano, subcontracted with Estrellita Bascos robbery and carnapping were filed against Jose Opriano, et al.; and that
(petitioner) to transport and to deliver 400 sacks of soya bean meal worth hijacking, being a force majeure, exculpated petitioner from any liability to
P156,404.00 from the Manila Port Area to Calamba, Laguna at the rate of CIPTRADE.
P50.00 per metric ton. Petitioner failed to deliver the said cargo. As a
consequence of that failure, Cipriano paid Jibfair Shipping Agency the After trial, the trial court rendered a decision *** the dispositive portion of
amount of the lost goods in accordance with the contract which stated that: which reads as follows:
"WHEREFORE, judgment is hereby rendered in favor of plaintiff and BEEN RENDERED MOOT AND ACADEMIC BY THE DECISION OF
against defendant ordering the latter to pay the former: THE MERITS OF THE CASE." 7
1. The amount of ONE HUNDRED FIFTY-SIX THOUSAND FOUR The petition presents the following issues for resolution: (1) was petitioner a
HUNDRED FOUR PESOS (P156,404.00) as an (sic) for actual damages common carrier?; and (2) was the hijacking referred to a force majeure?
with legal interest of 12% per cent per annum to be counted from December
4, 1986 until fully paid; The Court of Appeals, in holding that petitioner was a common carrier, found
that she admitted in her answer that she did business under the name A.M.
2. The amount of FIVE THOUSAND PESOS (P5,000.00) as and for Bascos Trucking and that said admission dispensed with the presentation by
attorney's fees; and private respondent, Rodolfo Cipriano, of proofs that petitioner was a
common carrier. The respondent Court also adopted in toto the trial court's
3. The costs of the suit. decision that petitioner was a common carrier, Moreover, both courts
appreciated the following pieces of evidence as indicators that petitioner was
The "Urgent Motion To Dissolve/Lift preliminary Attachment" dated March a common carrier: the fact that the truck driver of petitioner, Maximo
10, 1987 filed by defendant is DENIED for being moot and academic. Sanglay, received the cargo consisting of 400 bags of soya bean meal as
evidenced by a cargo receipt signed by Maximo Sanglay; the fact that the
SO ORDERED." 6 truck helper, Juanito Morden, was also an employee of petitioner; and the
fact that control of the cargo was placed in petitioner's care.
Petitioner appealed to the Court of Appeals but respondent Court affirmed
the trial court's judgment. In disputing the conclusion of the trial and appellate courts that petitioner
was a common carrier, she alleged in this petition that the contract between
Consequently, petitioner filed this petition where she makes the following her and Rodolfo A. Cipriano, representing CIPTRADE, was lease of the
assignment of errors; to wit: truck. She cited as evidence certain affidavits which referred to the contract
as "lease". These affidavits were made by Jesus Bascos 8 and by petitioner
herself. 9 She further averred that Jesus Bascos confirmed in his testimony
"I. THE RESPONDENT COURT ERRED IN HOLDING THAT THE
his statement that the contract was a lease contract. 10 She also stated that:
CONTRACTUAL RELATIONSHIP BETWEEN PETITIONER AND
she was not catering to the general public. Thus, in her answer to the
PRIVATE RESPONDENT WAS CARRIAGE OF GOODS AND NOT
amended complaint, she said that she does business under the same style of
LEASE OF CARGO TRUCK.
A.M. Bascos Trucking, offering her trucks for lease to those who have cargo
to move, not to the general public but to a few customers only in view of the
II. GRANTING, EX GRATIA ARGUMENTI, THAT THE FINDING OF fact that it is only a small business. 11
THE RESPONDENT COURT THAT THE CONTRACTUAL
RELATIONSHIP BETWEEN PETITIONER AND PRIVATE
We agree with the respondent Court in its finding that petitioner is a common
RESPONDENT WAS CARRIAGE OF GOODS IS CORRECT,
carrier.
NEVERTHELESS, IT ERRED IN FINDING PETITIONER LIABLE
THEREUNDER BECAUSE THE LOSS OF THE CARGO WAS DUE TO
FORCE MAJEURE, NAMELY, HIJACKING. Article 1732 of the Civil Code defines a common carrier as "(a) person,
corporation or firm, or association engaged in the business of carrying or
transporting passengers or goods or both, by land, water or air, for
III. THE RESPONDENT COURT ERRED IN AFFIRMING THE FINDING
compensation, offering their services to the public." The test to determine a
OF THE TRIAL COURT THAT PETITIONER'S MOTION TO
common carrier is "whether the given undertaking is a part of the business
DISSOLVE/LIFT THE WRIT OF PRELIMINARY ATTACHMENT HAS
engaged in by the carrier which he has held out to the general public as his
occupation rather than the quantity or extent of the business transacted." 12
In this case, petitioner herself has made the admission that she was in the lost, destroyed or deteriorated. 18 There are very few instances when the
trucking business, offering her trucks to those with cargo to move. Judicial presumption of negligence does not attach and these instances are
admissions are conclusive and no evidence is required to prove the same. 13 enumerated in Article 1734. 19 In those cases where the presumption is
applied, the common carrier must prove that it exercised extraordinary
But petitioner argues that there was only a contract of lease because they diligence in order to overcome the presumption.
offer their services only to a select group of people and because the private
respondents, plaintiffs in the lower court, did not object to the presentation of In this case, petitioner alleged that hijacking constituted force majeure which
affidavits by petitioner where the transaction was referred to as a lease exculpated her from liability for the loss of the cargo. In De Guzman vs.
contract. Court of Appeals, 20 the Court held that hijacking, not being included in the
provisions of Article 1734, must be dealt with under the provisions of Article
Regarding the first contention, the holding of the Court in De Guzman vs. 1735 and thus, the common carrier is presumed to have been at fault or
Court of Appeals 14 is instructive. In referring to Article 1732 of the Civil negligent. To exculpate the carrier from liability arising from hijacking, he
Code, it held thus: must prove that the robbers or the hijackers acted with grave or irresistible
threat, violence, or force. This is in accordance with Article 1745 of the Civil
"The above article makes no distinction between one whose principal Code which provides:
business activity is the carrying of persons or goods or both, and one who
does such carrying only as an ancillary activity (in local idiom, as a "Art. 1745. Any of the following or similar stipulations shall be considered
"sideline"). Article 1732 also carefully avoids making any distinction unreasonable, unjust and contrary to public policy;
between a person or enterprise offering transportation service on a regular or
scheduled basis and one offering such service on an occasional, episodic or xxx xxx xxx
unscheduled basis. Neither does Article 1732 distinguish between a carrier
offering its services to the "general public," i.e., the general community or (6) That the common carrier's liability for acts committed by thieves, or of
population, and one who offers services or solicits business only from a robbers who do not act with grave or irresistible threat, violences or force, is
narrow segment of the general population. We think that Article 1732 dispensed with or diminished;"
deliberately refrained from making such distinctions."
In the same case, 21 the Supreme Court also held that:
Regarding the affidavits presented by petitioner to the court, both the trial
and appellate courts have dismissed them as self-serving and petitioner "Under Article 1745 (6) above, a common carrier is held responsible and
contests the conclusion. We are bound by the appellate court's factual will not be allowed to divest or to diminish such responsibility even for
conclusions. Yet, granting that the said evidence were not self-serving, the acts of strangers like thieves or robbers except where such thieves or robbers
same were not sufficient to prove that the contract was one of lease. It must in fact acted with grave or irresistible threat, violence or force. We believe
be understood that a contract is what the law defines it to be and not what it and so hold that the limits of the duty of extraordinary diligence in the
is called by the contracting parties. 15 Furthermore, petitioner presented no vigilance over the goods carried are reached where the goods are lost as a
other proof of the existence of the contract of lease. He who alleges a fact has result of a robbery which is attended by "grave or irresistible threat, violence
the burden of proving it. 16 or force."
Likewise, We affirm the holding of the respondent court that the loss of the To establish grave and irresistible force, petitioner presented her accusatory
goods was not due to force majeure. affidavit, 22 Jesus Bascos' affidavit, 23 and Juanito Morden's 24 "Salaysay".
However, both the trial court and the Court of Appeals have concluded that
Common carriers are obliged to observe extraordinary diligence in the these affidavits were not enough to overcome the presumption. Petitioner's
vigilance over the goods transported by them. 17 Accordingly, they are affidavit about the hijacking was based on what had been told her by Juanito
presumed to have been at fault or to have acted negligently if the goods are
Morden. It was not a first-hand account. While it had been admitted in court
for lack of objection on the part of private respondent, the respondent Court
had discretion in assigning weight to such evidence. We are bound by the FELICIANO, J.:
conclusion of the appellate court. In a petition for review on certiorari, We
are not to determine the probative value of evidence but to resolve questions Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used
of law. Secondly, the affidavit of Jesus Bascos did not dwell on how the bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities of
hijacking took place. Thirdly, while the affidavit of Juanito Morden, the truck such scrap material, respondent would bring such material to Manila for
helper in the hijacked truck, was presented as evidence in court, he himself resale. He utilized two (2) six-wheeler trucks which he owned for hauling the
was a witness as could be gleaned from the contents of the petition. material to Manila. On the return trip to Pangasinan, respondent would load
Affidavits are not considered the best evidence if the affiants are available as his vehicles with cargo which various merchants wanted delivered to
witnesses. 25 The subsequent filing of the information for carnapping and differing establishments in Pangasinan. For that service, respondent charged
robbery against the accused named in said affidavits did not necessarily mean freight rates which were commonly lower than regular commercial rates.
that the contents of the affidavits were true because they were yet to be
determined in the trial of the criminal cases. Sometime in November 1970, petitioner Pedro de Guzman a merchant and
authorized dealer of General Milk Company (Philippines), Inc. in Urdaneta,
The presumption of negligence was raised against petitioner. It was Pangasinan, contracted with respondent for the hauling of 750 cartons of
petitioner's burden to overcome it. Thus, contrary to her assertion, private Liberty filled milk from a warehouse of General Milk in Makati, Rizal, to
respondent need not introduce any evidence to prove her negligence. Her petitioner's establishment in Urdaneta on or before 4 December 1970.
own failure to adduce sufficient proof of extraordinary diligence made the Accordingly, on 1 December 1970, respondent loaded in Makati the
presumption conclusive against her. merchandise on to his trucks: 150 cartons were loaded on a truck driven by
respondent himself, while 600 cartons were placed on board the other truck
Having affirmed the findings of the respondent Court on the substantial which was driven by Manuel Estrada, respondent's driver and employee.
issues involved, We find no reason to disturb the conclusion that the motion
to lift/dissolve the writ of preliminary attachment has been rendered moot Only 150 boxes of Liberty filled milk were delivered to petitioner. The other
and academic by the decision on the merits. 600 boxes never reached petitioner, since the truck which carried these boxes
was hijacked somewhere along the MacArthur Highway in Paniqui, Tarlac,
In the light of the foregoing analysis, it is Our opinion that the petitioner's by armed men who took with them the truck, its driver, his helper and the
claim cannot be sustained. The petition is DISMISSED and the decision of cargo.
the Court of Appeals is hereby AFFIRMED.
On 6 January 1971, petitioner commenced action against private respondent
SO ORDERED. in the Court of First Instance of Pangasinan, demanding payment of P
22,150.00, the claimed value of the lost merchandise, plus damages and
G.R. No. L-47822 December 22, 1988 attorney's fees. Petitioner argued that private respondent, being a common
carrier, and having failed to exercise the extraordinary diligence required of
PEDRO DE GUZMAN, petitioner, him by the law, should be held liable for the value of the undelivered goods.
vs.
COURT OF APPEALS and ERNESTO CENDANA, respondents. In his Answer, private respondent denied that he was a common carrier and
argued that he could not be held responsible for the value of the lost goods,
Vicente D. Millora for petitioner. such loss having been due to force majeure.
'every person that now or hereafter may own, operate, manage, or control in "that everything relating to the exploration for and exploitation of petroleum
the Philippines, for hire or compensation, with general or limited clientele, x x and everything relating to the manufacture, refining, storage,
whether permanent, occasional or accidental, and done for general business or transportation by special methods of petroleum, is hereby declared to
purposes, any common carrier, railroad, street railway, traction railway, be a public utility." (Underscoring Supplied)
subway motor vehicle, either for freight or passenger, or both, with or
without fixed route and whatever may be its classification, freight or carrier The Bureau of Internal Revenue likewise considers the petitioner a
service of any class, express service, steamboat, or steamship line, pontines, "common carrier." In BIR Ruling No. 069-83, it declared:
ferries and water craft, engaged in the transportation of passengers or
freight or both, shipyard, marine repair shop, wharf or dock, ice plant, ice- "x x x since [petitioner] is a pipeline concessionaire that is engaged only in
refrigeration plant, canal, irrigation system gas, electric light heat and power, transporting petroleum products, it is considered a common carrier under
water supply and power petroleum, sewerage system, wire or wireless Republic Act No. 387 x x x. Such being the case, it is not subject to
communications systems, wire or wireless broadcasting stations and other withholding tax prescribed by Revenue Regulations No. 13-78, as amended."
similar public services.' "(Underscoring Supplied)
From the foregoing disquisition, there is no doubt that petitioner is a
Also, respondent's argument that the term "common carrier" as used in "common carrier" and, therefore, exempt from the business tax as provided
Section 133 (j) of the Local Government Code refers only to common for in Section 133 (j), of the Local Government Code, to wit:
carriers transporting goods and passengers through moving vehicles or
vessels either by land, sea or water, is erroneous. "Section 133. Common Limitations on the Taxing Powers of Local
Government Units. - Unless otherwise provided herein, the exercise of the
As correctly pointed out by petitioner, the definition of "common taxing powers of provinces, cities, municipalities, and barangays shall not
carriers" in the Civil Code makes no distinction as to the means of extend to the levy of the following :
transporting, as long as it is by land, water or air. It does not provide that the
transportation of the passengers or goods should be by motor vehicle. In fact,
xxxxxxxxx
(j) Taxes on the gross receipts of transportation contractors and MR. AQUINO (A.). Thank you for that clarification, Mr. Speaker. x x x[18]
persons engaged in the transportation of passengers or
freight by hire and common carriers by air, land or water, It is clear that the legislative intent in excluding from the taxing power
except as provided in this Code." of the local government unit the imposition of business tax against common
carriers is to prevent a duplication of the so-called "common carrier's tax."
The deliberations conducted in the House of Representatives on the
Local Government Code of 1991 are illuminating: Petitioner is already paying three (3%) percent common carrier's tax on
its gross sales/earnings under the National Internal Revenue Code. [19] To tax
petitioner again on its gross receipts in its transportation of petroleum
"MR. AQUINO (A). Thank you, Mr. Speaker.
business would defeat the purpose of the Local Government Code.
Mr. Speaker, we would like to proceed to page 95, line 1. It states : "SEC.121 WHEREFORE, the petition is hereby GRANTED. The decision of the
[now Sec. 131]. Common Limitations on the Taxing Powers of Local respondent Court of Appeals dated November 29, 1995 in CA-G.R. SP No.
Government Units." x x x 36801 is REVERSED and SET ASIDE.
SO ORDERED.
MR. AQUINO (A.). Thank you Mr. Speaker.
Now, as to petitioner's liability, Art. 1733 of the Civil Code provides: ICSU-412105-0 - rubber gasket on left side/door panel partly
detached loosened.10
Common carriers, from the nature of their business and for reasons
of public policy, are bound to observe extraordinary diligence in the In addition, petitioner claims that Marine Cargo Surveyor Ernesto Tolentino
vigilance over the goods and for the safety of the passengers testified that he has no personal knowledge on whether the container vans
transported by them, according to all the circumstances of each were first stored in petitioner's warehouse prior to their delivery to the
case. . . . consignee. She likewise claims that after withdrawing the container vans
from the arrastre operator, her driver, Ricardo Nazarro, immediately
In Compania Maritima v. Court of Appeals,9 the meaning of "extraordinary delivered the cargo to SMC's warehouse in Ermita, Manila, which is a mere
diligence in the vigilance over goods" was explained thus: thirty-minute drive from the Port Area where the cargo came from. Thus, the
damage to the cargo could not have taken place while these were in her
The extraordinary diligence in the vigilance over the goods tendered custody.11
for shipment requires the common carrier to know and to follow the
required precaution for avoiding damage to, or destruction of the Contrary to petitioner's assertion, the Survey Report (Exh. H) of the Marine
goods entrusted to it for sale, carriage and delivery. It requires Cargo Surveyors indicates that when the shipper transferred the cargo in
common carriers to render service with the greatest skill and question to the arrastre operator, these were covered by clean Equipment
foresight and "to use all reasonable means to ascertain the nature and Interchange Report (EIR) and, when petitioner's employees withdrew the
characteristic of goods tendered for shipment, and to exercise due cargo from the arrastre operator, they did so without exception or protest
care in the handling and stowage, including such methods as their either with regard to the condition of container vans or their contents. The
nature requires." Survey Report pertinently reads --
In the case at bar, petitioner denies liability for the damage to the cargo. She Details of Discharge:
claims that the "spoilage or wettage" took place while the goods were in the
custody of either the carrying vessel "M/V Hayakawa Maru," which Shipment, provided with our protective supervision was noted
transported the cargo to Manila, or the arrastre operator, to whom the goods discharged ex vessel to dock of Pier #13 South Harbor, Manila on 14
were unloaded and who allegedly kept them in open air for nine days from July 1990, containerized onto 30' x 20' secure metal vans, covered by
July 14 to July 23, 1998 notwithstanding the fact that some of the containers clean EIRs. Except for slight dents and paint scratches on side and
were deformed, cracked, or otherwise damaged, as noted in the Marine roof panels, these containers were deemed to have [been] received in
Survey Report (Exh. H), to wit: good condition.
Before this Court on a petition for Certiorari is the appellate courts Among those who witnessed the release of the cargoes from the PSI
Decision1 of August 10, 2000 reversing and setting aside the judgment of warehouse were Ruben Alonso and Tony Akas,16 employees of Elite
Branch 133, Regional Trial Court of Makati City, in Civil Case No. 93-76B Adjusters and Surveyors Inc. (Elite Surveyors), a marine and cargo surveyor
which dismissed the complaint of respondent FGU Insurance Corporation and insurance claim adjusters firm engaged by Wyeth-Suaco on behalf of
(FGU Insurance) against petitioner A.F. Sanchez Brokerage, Inc. (Sanchez FGU Insurance.
Brokerage).
Upon instructions of Wyeth-Suaco, the cargoes were delivered to Hizon
On July 8, 1992, Wyeth-Pharma GMBH shipped on board an aircraft of Laboratories Inc. in Antipolo City for quality control check. 17 The delivery
KLM Royal Dutch Airlines at Dusseldorf, Germany oral contraceptives receipt, bearing No. 07037 dated July 29, 1992, indicated that the delivery
consisting of 86,800 Blisters Femenal tablets, 14,000 Blisters Nordiol tablets consisted of one container with 144 cartons of Femenal and Nordiol and 1
and 42,000 Blisters Trinordiol tablets for delivery to Manila in favor of the pallet containing Trinordiol.18
consignee, Wyeth-Suaco Laboratories, Inc.2The Femenal tablets were placed
in 124 cartons and the Nordiol tablets were placed in 20 cartons which were On July 31, 1992, Ronnie Likas, a representative of Wyeth-Suaco,
packed together in one (1) LD3 aluminum container, while the Trinordial acknowledged the delivery of the cargoes by affixing his signature on the
tablets were packed in two pallets, each of which contained 30 cartons. 3 delivery receipt.19 Upon inspection, however, he, together with Ruben Alonzo
of Elite Surveyors, discovered that 44 cartons containing Femenal and
Wyeth-Suaco insured the shipment against all risks with FGU Insurance Nordiol tablets were in bad order.20 He thus placed a note above his signature
which issued Marine Risk Note No. 4995 pursuant to Marine Open Policy on the delivery receipt stating that 44 cartons of oral contraceptives were in
No. 138.4 bad order. The remaining 160 cartons of oral contraceptives were accepted as
complete and in good order.
Upon arrival of the shipment on July 11, 1992 at the Ninoy Aquino
International Airport (NAIA),5 it was discharged "without exception"6 and Ruben Alonzo thus prepared and signed, along with Ronnie Likas, a survey
delivered to the warehouse of the Philippine Skylanders, Inc. (PSI) located report21 dated July 31, 1992 stating that 41 cartons of Femenal tablets and 3
also at the NAIA for safekeeping.7 cartons of Nordiol tablets were "wetted" (sic).22
In order to secure the release of the cargoes from the PSI and the Bureau of The Elite Surveyors later issued Certificate No. CS-0731-1538/92 23 attached
Customs, Wyeth-Suaco engaged the services of Sanchez Brokerage which to which was an "Annexed Schedule" whereon it was indicated that prior to
had been its licensed broker since 1984.8 As its customs broker, Sanchez the loading of the cargoes to the brokers trucks at the NAIA, they were
Brokerage calculates and pays the customs duties, taxes and storage fees for inspected and found to be in "apparent good condition."24 Also noted was that
the cargo and thereafter delivers it to Wyeth-Suaco. 9 at the time of delivery to the warehouse of Hizon Laboratories Inc., slight to
heavy rains fell, which could account for the wetting of the 44 cartons of
On July 29, 1992, Mitzi Morales and Ernesto Mendoza, representatives of Femenal and Nordiol tablets.25
Sanchez Brokerage, paid PSI storage fee amounting to P8,572.35 a receipt
for which, Official Receipt No. 016992,10 was issued. On the receipt, another On August 4, 1992, the Hizon Laboratories Inc. issued a Destruction
representative of Sanchez Brokerage, M. Sison, 11 acknowledged that he Report26 confirming that 38 x 700 blister packs of Femenal tablets, 3 x 700
received the cargoes consisting of three pieces in good condition.12 blister packs of Femenal tablets and 3 x 700 blister packs of Nordiol tablets
were heavily damaged with water and emitted foul smell.
On August 5, 1992, Wyeth-Suaco issued a Notice of Materials Rejection 27 of Noting that Wyeth-Suaco adduced evidence that the cargoes were delivered
38 cartons of Femenal and 3 cartons of Nordiol on the ground that they were to petitioner in good order and condition but were in a damaged state when
"delivered to Hizon Laboratories with heavy water damaged (sic) causing the delivered to Wyeth-Suaco, the appellate court held that Sanchez Brokerage
cartons to sagged (sic) emitting a foul order and easily attracted flies." 28 is presumed negligent and upon it rested the burden of proving that it
exercised extraordinary negligence not only in instances when negligence is
Wyeth-Suaco later demanded, by letter29 of August 25, 1992, from Sanchez directly proven but also in those cases when the cause of the damage is not
Brokerage the payment of P191,384.25 representing the value of its loss known or unknown.37
arising from the damaged tablets.
The appellate court thus disposed:
As the Sanchez Brokerage refused to heed the demand, Wyeth-Suaco filed an
insurance claim against FGU Insurance which paid Wyeth-Suaco the amount IN THE LIGHT OF ALL THE FOREGOING, the appeal of the
of P181,431.49 in settlement of its claim under Marine Risk Note Number Appellant is GRANTED. The Decision of the Court a quo is
4995. REVERSED. Another Decision is hereby rendered in favor of the
Appellant and against the Appellee as follows:
Wyeth-Suaco thus issued Subrogation Receipt30 in favor of FGU Insurance.
1. The Appellee is hereby ordered to pay the Appellant the
On demand by FGU Insurance for payment of the amount of P181,431.49 it principal amount of P181, 431.49, with interest thereupon at
paid Wyeth-Suaco, Sanchez Brokerage, by letter31 of January 7, 1993, the rate of 6% per annum, from the date of the Decision of
disclaimed liability for the damaged goods, positing that the damage was due the Court, until the said amount is paid in full;
to improper and insufficient export packaging; that when the sealed
containers were opened outside the PSI warehouse, it was discovered that 2. The Appellee is hereby ordered to pay to the Appellant the
some of the loose cartons were wet,32 prompting its (Sanchez Brokerages) amount of P20,000.00 as and by way of attorneys fees; and
representative Morales to inform the Import-Export Assistant of Wyeth-
Suaco, Ramir Calicdan, about the condition of the cargoes but that the latter 3. The counterclaims of the Appellee are DISMISSED. 38
advised to still deliver them to Hizon Laboratories where an adjuster would
assess the damage.33 Sanchez Brokerages Motion for Reconsideration having been denied by the
appellate courts Resolution of December 8, 2000 which was received by
Hence, the filing by FGU Insurance of a complaint for damages before the petitioner on January 5, 2001, it comes to this Court on petition for certiorari
Regional Trial Court of Makati City against the Sanchez Brokerage. filed on March 6, 2001.
The trial court, by Decision34 of July 29, 1996, dismissed the complaint, In the main, petitioner asserts that the appellate court committed grave and
holding that the Survey Report prepared by the Elite Surveyors is bereft of reversible error tantamount to abuse of discretion when it found petitioner a
any evidentiary support and a mere product of pure guesswork. 35 "common carrier" within the context of Article 1732 of the New Civil Code.
On appeal, the appellate court reversed the decision of the trial court, it Respondent FGU Insurance avers in its Comment that the proper course of
holding that the Sanchez Brokerage engaged not only in the business of action which petitioner should have taken was to file a petition for review on
customs brokerage but also in the transportation and delivery of the cargo of certiorari since the sole office of a writ of certiorari is the correction of errors
its clients, hence, a common carrier within the context of Article 1732 of the of jurisdiction including the commission of grave abuse of discretion
New Civil Code.36 amounting to lack or excess of jurisdiction and does not include correction of
the appellate courts evaluation of the evidence and factual findings thereon.
On the merits, respondent FGU Insurance contends that petitioner, as a The appellate court did not err in finding petitioner, a customs broker, to be
common carrier, failed to overcome the presumption of negligence, it being also a common carrier, as defined under Article 1732 of the Civil Code, to
documented that petitioner withdrew from the warehouse of PSI the subject wit:
shipment entirely in good order and condition.39
Art. 1732. Common carriers are persons, corporations, firms or
The petition fails. associations engaged in the business of carrying or transporting
passengers or goods or both, by land, water, or air, for compensation,
Rule 45 is clear that decisions, final orders or resolutions of the Court of offering their services to the public.
Appeals in any case, i.e., regardless of the nature of the action or proceedings
involved, may be appealed to this Court by filing a petition for review, which Anacleto F. Sanchez, Jr., the Manager and Principal Broker of Sanchez
would be but a continuation of the appellate process over the original case. 40 Brokerage, himself testified that the services the firm offers include the
delivery of goods to the warehouse of the consignee or importer.
The Resolution of the Court of Appeals dated December 8, 2000 denying the
motion for reconsideration of its Decision of August 10, 2000 was received ATTY. FLORES:
by petitioner on January 5, 2001. Since petitioner failed to appeal within 15
days or on or before January 20, 2001, the appellate courts decision had Q: What are the functions of these license brokers, license customs
become final and executory. The filing by petitioner of a petition for broker?
certiorari on March 6, 2001 cannot serve as a substitute for the lost remedy of
appeal. WITNESS:
In another vein, the rule is well settled that in a petition for certiorari, the As customs broker, we calculate the taxes that has to be paid in
petitioner must prove not merely reversible error but also grave abuse of cargos, and those upon approval of the importer, we prepare the entry
discretion amounting to lack or excess of jurisdiction. together for processing and claims from customs and finally deliver
the goods to the warehouse of the importer.43
Petitioner alleges that the appellate court erred in reversing and setting aside
the decision of the trial court based on its finding that petitioner is liable for Article 1732 does not distinguish between one whose principal business
the damage to the cargo as a common carrier. What petitioner is ascribing is activity is the carrying of goods and one who does such carrying only as an
an error of judgment, not of jurisdiction, which is properly the subject of an ancillary activity.44 The contention, therefore, of petitioner that it is not a
ordinary appeal. common carrier but a customs broker whose principal function is to prepare
the correct customs declaration and proper shipping documents as required
Where the issue or question involves or affects the wisdom or legal by law is bereft of merit. It suffices that petitioner undertakes to deliver the
soundness of the decision not the jurisdiction of the court to render said goods for pecuniary consideration.
decision the same is beyond the province of a petition for certiorari.41 The
supervisory jurisdiction of this Court to issue a cert writ cannot be exercised In this light, petitioner as a common carrier is mandated to observe, under
in order to review the judgment of lower courts as to its intrinsic correctness, Article 173345 of the Civil Code, extraordinary diligence in the vigilance over
either upon the law or the facts of the case. 42 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
Procedural technicalities aside, the petition still fails. been at fault or to have acted negligently, unless it proves that it observed
extraordinary diligence.46
The concept of "extra-ordinary diligence" was explained in Compania Moreover, as observed by the appellate court, if indeed petitioners
Maritima v. Court of Appeals:47 employees only examined the cargoes outside the PSI warehouse and found
some to be wet, they would certainly have gone back to PSI, showed to the
The extraordinary diligence in the vigilance over the goods tendered warehouseman the damage, and demanded then and there for Bad Order
for shipment requires the common carrier to know and to follow the documents or a certification confirming the damage. 58 Or, petitioner would
required precaution for avoiding damage to, or destruction of the have presented, as witness, the employees of the PSI from whom Morales
goods entrusted to it for sale, carriage and delivery. It requires and Domingo took delivery of the cargo to prove that, indeed, part of the
common carriers to render service with the greatest skill and cargoes was already damaged when the container was allegedly opened
foresight and "to use all reasonable means to ascertain the nature and outside the warehouse.59
characteristics of goods tendered for shipment, and to exercise due
care in the handling and stowage, including such methods as their Petitioner goes on to posit that contrary to the report of Elite Surveyors, no
nature requires."48 rain fell that day. Instead, it asserts that some of the cargoes were already wet
on delivery by PSI outside the PSI warehouse but such notwithstanding
In the case at bar, it was established that petitioner received the cargoes from Calicdan directed Morales to proceed with the delivery to Hizon
the PSI warehouse in NAIA in good order and condition;49 and that upon Laboratories, Inc.
delivery by petitioner to Hizon Laboratories Inc., some of the cargoes were
found to be in bad order, as noted in the Delivery Receipt 50 issued by While Calicdan testified that he received the purported telephone call of
petitioner, and as indicated in the Survey Report of Elite Surveyors 51 and the Morales on July 29, 1992, he failed to specifically declare what time he
Destruction Report of Hizon Laboratories, Inc. 52 received the call. As to whether the call was made at the PSI warehouse when
the shipment was stripped from the airport containers, or when the cargoes
In an attempt to free itself from responsibility for the damage to the goods, were already in transit to Antipolo, it is not determinable. Aside from that
petitioner posits that they were damaged due to the fault or negligence of the phone call, petitioner admitted that it had no documentary evidence to prove
shipper for failing to properly pack them and to the inherent characteristics of that at the time it received the cargoes, a part of it was wet, damaged or in
the goods53 ; and that it should not be faulted for following the instructions of bad condition.60
Calicdan of Wyeth-Suaco to proceed with the delivery despite information
conveyed to the latter that some of the cartons, on examination outside the The 4-page weather data furnished by PAGASA61 on request of Sanchez
PSI warehouse, were found to be wet.54 Brokerage hardly impresses, no witness having identified it and interpreted
the technical terms thereof.
While paragraph No. 4 of Article 173455 of the Civil Code exempts a
common carrier from liability if the loss or damage is due to the character of The possibility on the other hand that, as found by Hizon Laboratories, Inc.,
the goods or defects in the packing or in the containers, the rule is that if the the oral contraceptives were damaged by rainwater while in transit to
improper packing is known to the carrier or his employees or is apparent Antipolo City is more likely then. Sanchez himself testified that in the past,
upon ordinary observation, but he nevertheless accepts the same without there was a similar instance when the shipment of Wyeth-Suaco was also
protest or exception notwithstanding such condition, he is not relieved of found to be wet by rain.
liability for the resulting damage.56
ATTY. FLORES:
If the claim of petitioner that some of the cartons were already damaged upon
delivery to it were true, then it should naturally have received the cargo under Q: Was there any instance that a shipment of this nature, oral
protest or with reservations duly noted on the receipt issued by PSI. But it contraceptives, that arrived at the NAIA were damaged and claimed
made no such protest or reservation.57 by the Wyeth-Suaco without any question?
WITNESS: DECISION
CARPIO-MORALES, J.:
A: Yes sir, there was an instance that one cartoon (sic) were wetted
(sic) but Wyeth-Suaco did not claim anything against us.
On petition for review is the June 27, 2001 Decision [1] of the Court of Appeal
well as its Resolution[2] dated September 28, 2001 denying the motion for reconsidera
ATTY. FLORES:
which affirmed that of Branch 21 of the Regional Trial Court (RTC) of Manila in C
Case No. 92-63132[3] holding petitioner Schmitz Transport Brokerage Corpora
Q: HOW IS IT? (Schmitz Transport), together with Black Sea Shipping Corporation (Black S
represented by its ship agent Inchcape Shipping Inc. (Inchcape), and Transport Ven
WITNESS: (TVI), solidarily liable for the loss of 37 hot rolled steel sheets in coil that were wa
overboard a barge.
A: We experienced, there was a time that we experienced that there
was a cartoon (sic) wetted (sic) up to the bottom are wet specially On September 25, 1991, SYTCO Pte Ltd. Singapore shipped from the por
during rainy season.62 Ilyichevsk, Russia on board M/V Alexander Saveliev (a vessel of Russian registry
owned by Black Sea) 545 hot rolled steel sheets in coil weighing 6,992,450 metric ton
Since petitioner received all the cargoes in good order and condition at the The cargoes, which were to be discharged at the port of Manila in favor of
time they were turned over by the PSI warehouseman, and upon their consignee, Little Giant Steel Pipe Corporation (Little Giant), [4] were insured agains
delivery to Hizon Laboratories, Inc. a portion thereof was found to be in bad risks with Industrial Insurance Company Ltd. (Industrial Insurance) under Marine Po
order, it was incumbent on petitioner to prove that it exercised extraordinary No. M-91-3747-TIS.[5]
diligence in the carriage of the goods. It did not, however. Hence, its
presumed negligence under Article 1735 of the Civil Code remains The vessel arrived at the port of Manila on October 24, 1991 and the Philippine P
unrebutted. Authority (PPA) assigned it a place of berth at the outside breakwater at the Manila S
Harbor.[6]
WHEREFORE, the August 10, 2000 Decision of the Court of Appeals is Schmitz Transport, whose services the consignee engaged to secure the requ
hereby AFFIRMED. clearances, to receive the cargoes from the shipside, and to deliver them to its
consignees) warehouse at Cainta, Rizal, [7] in turn engaged the services of TVI to se
Costs against petitioner. barge and tugboat at shipside.
SO ORDERED. On October 26, 1991, around 4:30 p.m., TVIs tugboat Lailani towed the barge E
V to shipside.[8]
By 7:00 p.m. also of October 26, 1991, the tugboat, after positioning the b
alongside the vessel, left and returned to the port terminal. [9] At 9:00 p.m., arr
[G.R. No. 150255. April 22, 2005] operator Ocean Terminal Services Inc. commenced to unload 37 of the 545 coils from
vessel unto the barge.
By 12:30 a.m. of October 27, 1991 during which the weather condition had bec
SCHMITZ TRANSPORT & BROKERAGE CORPORATION, petitioner, inclement due to an approaching storm, the unloading unto the barge of the 37 coils
vs. TRANSPORT VENTURE, INC., INDUSTRIAL INSURANCE accomplished.[10] No tugboat pulled the barge back to the pier, however.
COMPANY, LTD., and BLACK SEA SHIPPING AND DODWELL now
INCHCAPE SHIPPING SERVICES, respondents. At around 5:30 a.m. of October 27, 1991, due to strong waves, [11] the crew o
barge abandoned it and transferred to the vessel. The barge pitched and rolled with
waves and eventually capsized, washing the 37 coils into the sea. [12] At 7:00 a.m., aIn holding all the defendants solidarily liable, the appellate court ruled that each
tugboat finally arrived to pull the already empty and damaged barge back to the pier. was essential such that without each others contributory negligence the incident would
have happened and so much so that the person principally liable cannot be distingui
Earnest efforts on the part of both the consignee Little Giant and Industrial Insurance
with sufficient accuracy.[25]
to recover the lost cargoes proved futile.[14]
In discrediting the defense of fortuitous event, the appellate court held that altho
Little Giant thus filed a formal claim against Industrial Insurance which paid itdefendants
the obviously had nothing to do with the force of nature, they however had co
[15]
amount of P5,246,113.11. Little Giant thereupon executed a subrogation receipt of where to anchor the vessel, where discharge will take place and even when
of Industrial Insurance. discharging will commence.[26]
Industrial Insurance later filed a complaint against Schmitz Transport, TVI, and The defendants respective motions for reconsideration having been denied
Black Sea through its representative Inchcape (the defendants) before the RTC of Manila, Resolution[27] of September 28, 2001, Schmitz Transport (hereinafter referred to
for the recovery of the amount it paid to Little Giant plus adjustment fees, attorneys petitioner)
fees, filed the present petition against TVI, Industrial Insurance and Black Sea.
and litigation expenses.[16]
Petitioner asserts that in chartering the barge and tugboat of TVI, it was acting fo
Industrial Insurance faulted the defendants for undertaking the unloading ofprincipal,the consignee Little Giant, hence, the transportation contract was by and betw
cargoes while typhoon signal No. 1 was raised in Metro Manila. [17] Little Giant and TVI.[28]
By Decision of November 24, 1997, Branch 21 of the RTC held all the defendants By Resolution of January 23, 2002, herein respondents Industrial Insurance, B
negligent for unloading the cargoes outside of the breakwater notwithstanding the storm Sea, and TVI were required to file their respective Comments. [29]
signal.[18] The dispositive portion of the decision reads:
By its Comment, Black Sea argued that the cargoes were received by the consi
WHEREFORE, premises considered, the Court renders judgment in favor of the plaintiff, through petitioner in good order, hence, it cannot be faulted, it having had no control
ordering the defendants to pay plaintiff jointly and severally the sum of P5,246,113.11 supervision thereover.[30]
with interest from the date the complaint was filed until fully satisfied, as well as the sum
For its part, TVI maintained that it acted as a passive party as it merely received
of P5,000.00 representing the adjustment fee plus the sum of 20% of the amount
cargoes and transferred them unto the barge upon the instruction of petitioner. [31]
recoverable from the defendants as attorneys fees plus the costs of suit. The counterclaims
and cross claims of defendants are hereby DISMISSED for lack of [m]erit. [19] In issue then are:
(1) Whether the loss of the cargoes was due to a fortuitous event, independent of
To the trial courts decision, the defendants Schmitz Transport and TVI filed a joint
act of negligence on the part of petitioner Black Sea and TVI, and
motion for reconsideration assailing the finding that they are common carriers and the
award of excessive attorneys fees of more than P1,000,000. And they argued that they(2) If there was negligence, whether liability for the loss may attach to Black
were not motivated by gross or evident bad faith and that the incident was caused petitioner
by a and TVI.
fortuitous event. [20]
When a fortuitous event occurs, Article 1174 of the Civil Code absolves any p
By resolution of February 4, 1998, the trial court denied the motionfrom for any and all liability arising therefrom:
reconsideration. [21]
All the defendants appealed to the Court of Appeals which, by decision of JuneART.27, 1174. Except in cases expressly specified by the law, or when it is other
[22] declared
2001, affirmed in toto the decision of the trial court, it finding that all the defendants by stipulation, or when the nature of the obligation requires the assumptio
were common carriers Black Sea and TVI for engaging in the transport of goods and risk, no person shall be responsible for those events which could not be foreseen, or w
cargoes over the seas as a regular business and not as an isolated transaction, though foreseen, were inevitable.
Schmitz Transport for entering into a contract with Little Giant to transport the cargoes
from ship to port for a fee.[24] In order, to be considered a fortuitous event, however, (1) the cause of the unfore
and unexpected occurrence, or the failure of the debtor to comply with his obliga
must be independent of human will; (2) it must be impossible to foresee the event which Contrary to petitioners insistence, this Court, as did the appellate court, finds
constitute the caso fortuito, or if it can be foreseen it must be impossible to avoid; (3)petitioner
the is a common carrier. For it undertook to transport the cargoes from the ship
occurrence must be such as to render it impossible for the debtor to fulfill his obligation
of M/V
in Alexander Saveliev to the consignees warehouse at Cainta, Rizal. As the appe
any manner; and (4) the obligor must be free from any participation in the aggravation court
of put it, as long as a person or corporation holds [itself] to the public for the pur
the injury resulting to the creditor.[32] of transporting goods as [a] business, [it] is already considered a common ca
regardless if [it] owns the vehicle to be used or has to hire one. [42] That petitioner
[T]he principle embodied in the act of God doctrine strictly requires that the act must common
be carrier, the testimony of its own Vice-President and General Manager Noel
occasioned solely by the violence of nature. Human intervention is to be excluded from that part of the services it offers to its clients as a brokerage firm includes
transportation
creating or entering into the cause of the mischief. When the effect is found to be in part of cargoes reflects so.
the result of the participation of man, whether due to his active intervention or neglect or
Atty. Jubay: Will you please tell us what [are you] functions x x x as Execu
failure to act, the whole occurrence is then humanized and removed from the rules
Vice-President and General Manager of said Company?
applicable to the acts of God.[33]
Mr. Aro: Well, I oversee the entire operation of the brokerage and trans
The appellate court, in affirming the finding of the trial court that human intervention business of the company. I also handle the various division heads of
in the form of contributory negligence by all the defendants resulted to the loss of the company for operation matters, and all other related functions that
cargoes,[34] held that unloading outside the breakwater, instead of inside the breakwater, President may assign to me from time to time, Sir.
while a storm signal was up constitutes negligence. [35] It thus concluded that the proximate
Q: Now, in connection [with] your duties and functions as you mentioned,
cause of the loss was Black Seas negligence in deciding to unload the cargoes at an unsafe
you please tell the Honorable Court if you came to know the compan
place and while a typhoon was approaching.[36]
the name Little Giant Steel Pipe Corporation?
From a review of the records of the case, there is no indication that there was greater
A: Yes, Sir. Actually, we are the brokerage firm of that Company.
risk in loading the cargoes outside the breakwater. As the defendants proffered, the
weather on October 26, 1991 remained normal with moderate sea condition such that port Q: And since when have you been the brokerage firm of that company, if
operations continued and proceeded normally.[37] can recall?
The weather data report,[38] furnished and verified by the Chief of the Climate Data
Section of PAG-ASA and marked as a common exhibit of the parties, states that while A: Since 1990, Sir.
typhoon signal No. 1 was hoisted over Metro Manila on October 23-31, 1991, the sea
condition at the port of Manila at 5:00 p.m. - 11:00 p.m. of October 26, 1991 was Q: Now, you said that you are the brokerage firm of this Company. What w
moderate. It cannot, therefore, be said that the defendants were negligent in not unloading or duty did you perform in behalf of this company?
the cargoes upon the barge on October 26, 1991 inside the breakwater. A: We handled the releases (sic) of their cargo[es] from the Bureau
That no tugboat towed back the barge to the pier after the cargoes were completely Customs. We [are] also in-charged of the delivery of the goods to
[39]
loaded by 12:30 in the morning is, however, a material fact which the appellate court warehouses. We also handled the clearances of their shipment at the Bu
[40]
failed to properly consider and appreciate the proximate cause of the loss of the cargoes. of Customs, Sir.
Had the barge been towed back promptly to the pier, the deteriorating sea conditions
notwithstanding, the loss could have been avoided. But the barge was left floating in open xxx
sea until big waves set in at 5:30 a.m., causing it to sink along with the cargoes
loss thus falls outside the act of God doctrine. Q: Now, what precisely [was] your agreement with this Little Giant Steel
Corporation with regards to this shipment? What work did you do with
The proximate cause of the loss having been determined, who among the parties shipment?
is/are responsible therefor?
A: We handled the unloading of the cargo[es] from vessel to lighter and thenArticle
the 1732 does not distinguish between one whose principal business activity is
delivery of [the] cargo[es] from lighter to BASECO then to the truck andcarrying
to of goods and one who does such carrying only as an ancillary activity.
the warehouse, Sir. contention, therefore, of petitioner that it is not a common carrier but a customs br
whose principal function is to prepare the correct customs declaration and proper ship
Q: Now, in connection with this work which you are doing, Mr. Witness, youdocuments
are as required by law is bereft of merit. It suffices that petitioner undertake
supposed to perform, what equipment do (sic) you require or did you use in the goods for pecuniary consideration.[45]
deliver
order to effect this unloading, transfer and delivery to the warehouse?
A: Actually, we used the barges for the ship side operations, this unloading And in Calvo v. UCPB General Insurance Co. Inc.,[46] this Court held that as
[from] vessel to lighter, and on this we hired or we sub-contracted transportation
with of goods is an integral part of a customs broker, the customs broker is a
[T]ransport Ventures, Inc. which [was] in-charged (sic) of the barges common carrier. For to declare otherwise would be to deprive those with whom
in BASECO compound we are leasing cranes to have the cargo unloaded contracts the protection which the law affords them notwithstanding the fact that
obligation to carry goods for [its] customers, is part and parcel of petitioners business.
from the barge to trucks, [and] then we used trucks to deliver [the cargoes]
to the consignees warehouse, Sir.
As for petitioners argument that being the agent of Little Giant, any negligen
Q: And whose trucks do you use from BASECO compound to the consignees committed was deemed the negligence of its principal, it does not persuade.
warehouse?
True, petitioner was the broker-agent of Little Giant in securing the release of
A: We utilized of (sic) our own trucks and we have some other contracted cargoes. In effecting the transportation of the cargoes from the shipside and into L
trucks, Sir. Giants warehouse, however, petitioner was discharging its own personal obligation u
a contact of carriage.
xxx Petitioner, which did not have any barge or tugboat, engaged the services of TV
handler[48] to provide the barge and the tugboat. In their Service Contract, [49] while L
ATTY. JUBAY: Will you please explain to us, to the Honorable Court whyGiant
is it was named as the consignee, petitioner did not disclose that it was acting
you have to contract for the barges of Transport Ventures Incorporated in
commission and was chartering the vessel for Little Giant. [50] Little Giant did not
this particular operation? automatically become a party to the Service Contract and was not, therefore, bound by
terms and conditions therein.
A: Firstly, we dont own any barges. That is why we hired the services of another
firm whom we know [al]ready for quite sometime, which is Transport Not being a party to the service contract, Little Giant cannot directly sue TVI b
Ventures, Inc. (Emphasis supplied)[43] thereon but it can maintain a cause of action for negligence.[51]
It is settled that under a given set of facts, a customs broker may be regarded as a In the case of TVI, while it acted as a private carrier for which it was under no
common carrier. Thus, this Court, in A.F. Sanchez Brokerage, Inc. v. The Honorable Court
to observe extraordinary diligence, it was still required to observe ordinary diligenc
of Appeals,[44] held: ensure the proper and careful handling, care and discharge of the carried goods.
The appellate court did not err in finding petitioner, a customs broker, to be also a Thus, Articles 1170 and 1173 of the Civil Code provide:
common carrier, as defined under Article 1732 of the Civil Code, to wit,
ART. 1170. Those who in the performance of their obligations are guilty of fr
Art. 1732. Common carriers are persons, corporations, firms or associations engaged negligence,
in or delay, and those who in any manner contravene the tenor thereof, are li
for damages.
the business of carrying or transporting passengers or goods or both, by land, water, or air,
for compensation, offering their services to the public.
ART. 1173. The fault or negligence of the obligor consists in the omission of
xxx diligence which is required by the nature of the obligation and corresponds with
circumstances of the persons, of the time and of the place. When negligence showsthe badCivil Code. x x x [O]ne might ask further, how then must the liability of the com
faith, the provisions of articles 1171 and 2202, paragraph 2, shall apply. carrier, on one hand, and an independent contractor, on the other hand, be describe
would be solidary. A contractual obligation can be breached by tort and when the sam
If the law or contract does not state the diligence which is to be observed inorthe omission causes the injury, one resulting in culpa contractual and the other in c
performance, that which is expected of a good father of a family shall be required. aquiliana, Article 2194 of the Civil Code can well apply. In fine, a liability for tort
arise even under a contract, where tort is that which breaches the contract. St
Was the reasonable care and caution which an ordinarily prudent person would differently,
have when an act which constitutes a breach of contract would have i
used in the same situation exercised by TVI? [52] constituted the source of a quasi-delictual liability had no contract existed between
parties, the contract can be said to have been breached by tort, thereby allowing the r
This Court holds not. on tort to apply.[57]
TVIs failure to promptly provide a tugboat did not only increase the risk that might
have been reasonably anticipated during the shipside operation, but was the proximateAs for Black Sea, its duty as a common carrier extended only from the time the g
cause of the loss. A man of ordinary prudence would not leave a heavily loaded barge were surrendered or unconditionally placed in its possession and received
floating for a considerable number of hours, at such a precarious time, and in the opentransportation
sea, until they were delivered actually or constructively to consignee L
Giant.[58]
knowing that the barge does not have any power of its own and is totally defenseless from
the ravages of the sea. That it was nighttime and, therefore, the members of the crew of a Parties to a contract of carriage may, however, agree upon a definition of deli
tugboat would be charging overtime pay did not excuse TVI from calling for one that suchextends the services rendered by the carrier. In the case at bar, Bill of Lading N
tugboat. covering the shipment provides that delivery be made to the port of discharge or so
thereto as she may safely get, always afloat.[59] The delivery of the goods to the consi
As for petitioner, for it to be relieved of liability, it should, following Article
1739[53] of the Civil Code, prove that it exercised due diligence to prevent or minimizewas
the not from pier to pier but from the shipside of M/V Alexander Saveliev and
loss, before, during and after the occurrence of the storm in order that it may be exempted for which reason the consignee contracted the services of petitioner. Since B
barges,
from liability for the loss of the goods. Sea had constructively delivered the cargoes to Little Giant, through petitioner, it
discharged its duty.[60]
While petitioner sent checkers[54] and a supervisor[55] on board the vessel to counter-
check the operations of TVI, it failed to take all available and reasonable precautions to In fine, no liability may thus attach to Black Sea.
avoid the loss. After noting that TVI failed to arrange for the prompt towage of the barge Respecting the award of attorneys fees in an amount over P1,000,000.00 to Indus
despite the deteriorating sea conditions, it should have summoned the same or another Insurance, for lack of factual and legal basis, this Court sets it aside. While Indus
tugboat to extend help, but it did not. Insurance was compelled to litigate its rights, such fact by itself does not justify the aw
This Court holds then that petitioner and TVI are solidarily liable [56] for the loss ofofthe
attorneys fees under Article 2208 of the Civil Code. For no sufficient showing of
cargoes. The following pronouncement of the Supreme Court is instructive: faith would be reflected in a partys persistence in a case other than an erron
conviction of the righteousness of his cause. [61] To award attorneys fees to a party
The foundation of LRTAs liability is the contract of carriage and its obligation because
to the judgment is rendered in its favor would be tantamount to imposing a prem
indemnify the victim arises from the breach of that contract by reason of its failure to on ones right to litigate or seek judicial redress of legitimate grievances. [62]
exercise the high diligence required of the common carrier. In the discharge of its On the award of adjustment fees: The adjustment fees and expense of divers w
commitment to ensure the safety of passengers, a carrier may choose to hire its incurred own by Industrial Insurance in its voluntary but unsuccessful efforts to locate
employees or avail itself of the services of an outsider or an independent firm to undertake
retrieve the lost cargo. They do not constitute actual damages. [63]
the task. In either case, the common carrier is not relieved of its responsibilities under the
contract of carriage. As for the court a quos award of interest on the amount claimed, the same call
modification following the ruling in Eastern Shipping Lines, Inc. v. Court
Appeals[64] that when the demand cannot be reasonably established at the time the dem
Should Prudent be made likewise liable? If at all, that liability could only be for tort under
the provisions of Article 2176 and related provisions, in conjunction with Article 2180 is made,
of the interest shall begin to run not from the time the claim is made judiciall
extrajudicially but from the date the judgment of the court is made (at which the timeSamhwa
the Inter-Trans Co., Ltd., issued Bill of Lading No. SH9410306 [2] in the
[65]
quantification of damages may be deemed to have been reasonably ascertained). name of the shipper consigned to the order of Metropolitan Bank and Trust
Company with arrival notice in Manila to ultimate consignee Blue Mono
WHEREFORE, judgment is hereby rendered ordering petitioner Schmitz Transport International Company, Incorporated (BMICI), Binondo, Manila.
& Brokerage Corporation, and Transport Venture Incorporation jointly and severally liable
for the amount of P5,246,113.11 with the MODIFICATION that interest at SIX NSCP, for its part, issued Bill of Lading No. NSGPBSML512565 [3] in
PERCENT per annum of the amount due should be computed from the promulgation theonname of the freight forwarder, as shipper, consigned to the order of
November 24, 1997 of the decision of the trial court. Stamm International Inc., Makati, Philippines. It is provided therein that:
Costs against petitioner.
12. This Bill of Lading shall be prima facie evidence of the receipt of the
SO ORDERED. Carrier in apparent good order and condition except as, otherwise, noted of
the total number of Containers or other packages or units enumerated
overleaf. Proof to the contrary shall be admissible when this Bill of Lading
has been transferred to a third party acting in good faith. No representation is
[G.R. No. 161833. July 8, 2005] made by the Carrier as to the weight, contents, measure, quantity, quality,
description, condition, marks, numbers, or value of the Goods and the Carrier
shall be under no responsibility whatsoever in respect of such description or
particulars.
PHILIPPINE CHARTER INSURANCE CORPORATION, petitioner,
vs. UNKNOWN OWNER OF THE VESSEL M/V NATIONAL 13. The shipper, whether principal or agent, represents and warrants that
HONOR, NATIONAL SHIPPING CORPORATION OF THE the goods are properly described, marked, secured, and packed and may be
PHILIPPINES and INTERNATIONAL CONTAINER handled in ordinary course without damage to the goods, ship, or property or
SERVICES, INC., respondents. persons and guarantees the correctness of the particulars, weight or each
piece or package and description of the goods and agrees to ascertain and to
DECISION disclose in writing on shipment, any condition, nature, quality, ingredient or
CALLEJO, SR., J.: characteristic that may cause damage, injury or detriment to the goods, other
property, the ship or to persons, and for the failure to do so the shipper agrees
to be liable for and fully indemnify the carrier and hold it harmless in respect
This is a petition for review under Rule 45 of the 1997 Revised Rules of
of any injury or death of any person and loss or damage to cargo or property.
Civil Procedure assailing the Decision [1] dated January 19, 2004 of the Court
The carrier shall be responsible as to the correctness of any such mark,
of Appeals (CA) in CA-G.R. CV No. 57357 which affirmed the Decision
descriptions or representations.[4]
dated February 17, 1997 of the Regional Trial Court (RTC) of Manila,
Branch 37, in Civil Case No. 95-73338.
The shipment was contained in two wooden crates, namely, Crate No. 1
and Crate No. 2, complete and in good order condition, covered by
Commercial Invoice No. YJ-73564 DTD [5] and a Packing List.[6] There were
The Antecedent no markings on the outer portion of the crates except the name of the
consignee.[7] Crate No. 1 measured 24 cubic meters and weighed 3,620 kgs.
On November 5, 1995, J. Trading Co. Ltd. of Seoul, Korea, loaded a It contained the following articles: one (1) unit Lathe Machine complete with
shipment of four units of parts and accessories in the port of Pusan, Korea, parts and accessories; one (1) unit Surface Grinder complete with parts and
on board the vessel M/V National Honor,represented in the Philippines by its accessories; and one (1) unit Milling Machine complete with parts and
agent, National Shipping Corporation of the Philippines (NSCP). The accessories. On the flooring of the wooden crates were three wooden battens
shipment was for delivery to Manila, Philippines. Freight forwarder, placed side by side to support the weight of the cargo. Crate No. 2, on the
other hand, measured 10 cubic meters and weighed 2,060 kgs. The Lathe PCIC alleged that the loss was due to the fault and negligence of the
Machine was stuffed in the crate. The shipment had a total invoice value of defendants. It prayed, among others
US$90,000.00 C&F Manila.[8] It was insured for P2,547,270.00 with the
Philippine Charter Insurance Corporation (PCIC) thru its general agent, WHEREFORE, it is respectfully prayed of this Honorable Court that
Family Insurance and Investment Corporation, [9] under Marine Risk Note No. judgment be rendered ordering defendants to pay plaintiff, jointly or in the
68043 dated October 24, 1994.[10] alternative, the following:
The M/V National Honor arrived at the Manila International Container
Terminal (MICT) on November 14, 1995. The International Container 1. Actual damages in the amount of P1,740,634.50 plus legal
Terminal Services, Incorporated (ICTSI) was furnished with a copy of the interest at the time of the filing of this complaint until fully
crate cargo list and bill of lading, and it knew the contents of the crate. [11] The paid;
following day, the vessel started discharging its cargoes using its winch
crane. The crane was operated by Olegario Balsa, a winchman from 2. Attorneys fees in the amount of P100,000.00;
the ICTSI,[12] the exclusive arrastre operator of MICT.
3. Cost of suit.[25]
Denasto Dauz, Jr., the checker-inspector of the NSCP, along with the
crew and the surveyor of the ICTSI, conducted an inspection of the cargo. ICTSI, for its part, filed its Answer with Counterclaim and Cross-claim
[13]
They inspected the hatches, checked the cargo and found it in apparent against its co-defendant NSCP, claiming that the loss/damage of the shipment
good condition.[14] Claudio Cansino, the stevedore of the ICTSI, placed two was caused exclusively by the defective material of the wooden battens of
sling cables on each end of Crate No. 1. [15] No sling cable was fastened on the the shipment, insufficient packing or acts of the shipper.
mid-portion of the crate. In Dauzs experience, this was a normal procedure.
[16]
As the crate was being hoisted from the vessels hatch, the mid-portion of At the trial, Anthony Abarquez, the safety inspector of ICTSI, testified
the wooden flooring suddenly snapped in the air, about five feet high from that the wooden battens placed on the wooden flooring of the crate was of
the vessels twin deck, sending all its contents crashing down hard, good material but was not strong enough to support the weight of the
[17]
resulting in extensive damage to the shipment. machines inside the crate. He averred that most stevedores did not know
how to read and write; hence, he placed the sling cables only on those
BMICIs customs broker, JRM Incorporated, took delivery of the cargo portions of the crate where the arrow signs were placed, as in the case of
in such damaged condition.[18] Upon receipt of the damaged shipment, fragile cargo. He said that unless otherwise indicated by arrow signs, the
BMICI found that the same could no longer be used for the intended ICTSI used only two cable slings on each side of the crate and would not
purpose. The Mariners Adjustment Corporation hired by PCIC conducted a place a sling cable in the mid-section. [26] He declared that the crate fell from
survey and declared that the packing of the shipment was considered the cranes because the wooden batten in the mid-portion was broken as it was
insufficient. It ruled out the possibility of taxes due to insufficiency of being lifted.[27] He concluded that the loss/damage was caused by the failure
packing. It opined that three to four pieces of cable or wire rope slings, held of the shipper or its packer to place wooden battens of strong materials under
in all equal setting, never by-passing the center of the crate, should have been the flooring of the crate, and to place a sign in its mid-term section where the
used, considering that the crate contained heavy machinery. [19] sling cables would be placed.
BMICI subsequently filed separate claims against the NSCP, [20] the The ICTSI adduced in evidence the report of the R.J. Del Pan & Co.,
ICTSI,[21] and its insurer, the PCIC,[22] for US$61,500.00. When the other Inc. that the damage to the cargo could be attributed to insufficient packing
companies denied liability, PCIC paid the claim and was issued a and unbalanced weight distribution of the cargo inside the crate as evidenced
Subrogation Receipt[23] for P1,740,634.50. by the types and shapes of items found.[28]
On March 22, 1995, PCIC, as subrogee, filed with the RTC of Manila, The trial court rendered judgment for PCIC and ordered the complaint
Branch 35, a Complaint for Damages[24] against the Unknown owner of the dismissed, thus:
vessel M/V National Honor, NSCP and ICTSI, as defendants.
WHEREFORE, the complaint of the plaintiff, and the respective THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW
counterclaims of the two defendants are dismissed, with costs against the IN NOT APPLYING THE STATUTORY PRESUMPTION OF FAULT AND
plaintiff. NEGLIGENCE IN THE CASE AT BAR.
SO ORDERED.[29] III.
According to the trial court, the loss of the shipment contained in Crate THE COURT OF APPEALS GROSSLY MISCOMPREHENDED THE
No. 1 was due to the internal defect and weakness of the materials used in the FACTS IN FINDING THAT THE DAMAGE SUSTAINED BY THE
fabrication of the crates. The middle wooden batten had a hole (bukong- [SHIPMENT] WAS DUE TO ITS DEFECTIVE PACKING AND NOT TO
bukong). The trial court rejected the certification [30] of the shipper, stating THE FAULT AND NEGLIGENCE OF THE RESPONDENTS.[36]
that the shipment was properly packed and secured, as mere hearsay and
devoid of any evidentiary weight, the affiant not having testified. The petitioner asserts that the mere proof of receipt of the shipment by
[31] the common carrier (to the carrier) in good order, and their arrival at the
Not satisfied, PCIC appealed to the CA which rendered judgment on
place of destination in bad order makes out a prima facie case against it; in
January 19, 2004 affirming in toto the appealed decision, with this fallo
such case, it is liable for the loss or damage to the cargo absent satisfactory
explanation given by the carrier as to the exercise of extraordinary diligence.
WHEREFORE, the decision of the Regional Trial Court of Manila, Branch The petitioner avers that the shipment was sufficiently packed in wooden
35, dated February 17, 1997, is AFFIRMED. boxes, as shown by the fact that it was accepted on board the vessel and
arrived in Manila safely. It emphasizes that the respondents did not contest
SO ORDERED.[32] the contents of the bill of lading, and that the respondents knew that the
manner and condition of the packing of the cargo was normal and barren of
The appellate court held, inter alia, that it was bound by the finding of defects. It maintains that it behooved the respondent ICTSI to place three to
facts of the RTC, especially so where the evidence in support thereof is more four cables or wire slings in equal settings, including the center portion of the
than substantial. It ratiocinated that the loss of the shipment was due to an crate to prevent damage to the cargo:
excepted cause [t]he character of the goods or defects in the packing or in the
containers and the failure of the shipper to indicate signs to notify the [A] simple look at the manifesto of the cargo and the bill of lading would
stevedores that extra care should be employed in handling the shipment. [33] It have alerted respondents of the nature of the cargo consisting of thick and
blamed the shipper for its failure to use materials of stronger quality to heavy machinery. Extra-care should have been made and extended in the
support the heavy machines and to indicate an arrow in the middle portion of discharge of the subject shipment. Had the respondent only bothered to
the cargo where additional slings should be attached. [34] The CA concluded check the list of its contents, they would have been nervous enough to place
that common carriers are not absolute insurers against all risks in the additional slings and cables to support those massive machines, which were
transport of the goods.[35] composed almost entirely of thick steel, clearly intended for heavy
Hence, this petition by the PCIC, where it alleges that: industries. As indicated in the list, the boxes contained one lat[h]e machine,
one milling machine and one grinding machine-all coming with complete
I. parts and accessories. Yet, not one among the respondents were cautious
enough. Here lies the utter failure of the respondents to observed
THE COURT OF APPEALS COMMITTED SERIOUS ERROR OF LAW extraordinary diligence in the handling of the cargo in their custody and
IN NOT HOLDING THAT RESPONDENT COMMON CARRIER IS possession, which the Court of Appeals should have readily observed in its
LIABLE FOR THE DAMAGE SUSTAINED BY THE SHIPMENT IN THE appreciation of the pertinent facts.[37]
POSSESSION OF THE ARRASTRE OPERATOR.
II.
The petitioner posits that the loss/damage was caused by the of facts are contradicted by the presence of evidence on record; (8) the
mishandling of the shipment by therein respondent ICTSI, the arrastre findings of the Court of Appeals are contrary to those of the trial court; (9)
operator, and not by its negligence. the Court of Appeals manifestly overlooked certain relevant and undisputed
facts that, if properly considered, would justify a different conclusion; (10)
The petitioner insists that the respondents did not observe extraordinary the findings of the Court of Appeals are beyond the issues of the case; and
diligence in the care of the goods. It argues that in the performance of its (11) such findings are contrary to the admissions of both parties. [40]
obligations, the respondent ICTSI should observe the same degree of
diligence as that required of a common carrier under the New Civil Code of We have reviewed the records and find no justification to warrant the
the Philippines. Citing Eastern Shipping Lines, Inc. v. Court of Appeals,[38] it application of any exception to the general rule.
posits that respondents are liable in solidum to it, inasmuch as both are
charged with the obligation to deliver the goods in good condition to its We agree with the contention of the petitioner that common carriers,
from the nature of their business and for reasons of public policy, are
consignee, BMICI.
mandated to observe extraordinary diligence in the vigilance over the goods
Respondent NSCP counters that if ever respondent ICTSI is adjudged and for the safety of the passengers transported by them, according to all the
liable, it is not solidarily liable with it. It further avers that the carrier cannot circumstances of each case. [41] The Court has defined extraordinary diligence
discharge directly to the consignee because cargo discharging is the in the vigilance over the goods as follows:
monopoly of the arrastre. Liability, therefore, falls solely upon the shoulder
of respondent ICTSI, inasmuch as the discharging of cargoes from the vessel The extraordinary diligence in the vigilance over the goods tendered for
was its exclusive responsibility. Besides, the petitioner is raising questions of shipment requires the common carrier to know and to follow the required
facts, improper in a petition for review on certiorari.[39] precaution for avoiding damage to, or destruction of the goods entrusted to it
for sale, carriage and delivery. It requires common carriers to render service
Respondent ICTSI avers that the issues raised are factual, hence,
with the greatest skill and foresight and to use all reasonable means to
improper under Rule 45 of the Rules of Court. It claims that it is merely a
ascertain the nature and characteristic of goods tendered for shipment, and to
depository and not a common carrier; hence, it is not obliged to exercise
exercise due care in the handling and stowage, including such methods as
extraordinary diligence. It reiterates that the loss/damage was caused by the
their nature requires.[42]
failure of the shipper or his packer to place a sign on the sides and middle
portion of the crate that extra care should be employed in handling the
shipment, and that the middle wooden batten on the flooring of the crate had The common carriers duty to observe the requisite diligence in the
a hole. The respondent asserts that the testimony of Anthony Abarquez, who shipment of goods lasts from the time the articles are surrendered to or
conducted his investigation at the site of the incident, should prevail over that unconditionally placed in the possession of, and received by, the carrier for
of Rolando Balatbat. As an alternative, it argues that if ever adjudged liable, transportation until delivered to, or until the lapse of a reasonable time for
its liability is limited only to P3,500.00 as expressed in the liability clause of their acceptance, by the person entitled to receive them. [43] When the goods
Gate Pass CFS-BR-GP No. 319773. shipped are either lost or arrive in damaged condition, a presumption arises
against the carrier of its failure to observe that diligence, and there need not
The petition has no merit. be an express finding of negligence to hold it liable. [44] To overcome the
presumption of negligence in the case of loss, destruction or deterioration of
The well-entrenched rule in our jurisdiction is that only questions of law
the goods, the common carrier must prove that it exercised extraordinary
may be entertained by this Court in a petition for review on certiorari. This
diligence.[45]
rule, however, is not ironclad and admits certain exceptions, such as when (1)
the conclusion is grounded on speculations, surmises or conjectures; (2) the However, under Article 1734 of the New Civil Code, the presumption of
inference is manifestly mistaken, absurd or impossible; (3) there is grave negligence does not apply to any of the following causes:
abuse of discretion; (4) the judgment is based on a misapprehension of facts;
(5) the findings of fact are conflicting; (6) there is no citation of specific 1. Flood, storm, earthquake, lightning or other natural disaster or
evidence on which the factual findings are based; (7) the findings of absence 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; Crate No. 1 was provided by the shipper of the machineries in Seoul, Korea.
4. The character of the goods or defects in the packing or in the There is nothing in the record which would indicate that defendant ICTSI
containers; had any role in the choice of the materials used in fabricating this crate. Said
5. Order or act of competent public authority. defendant, therefore, cannot be held as blame worthy for the loss of the
machineries contained in Crate No. 1.[50]
It bears stressing that the enumeration in Article 1734 of the New Civil
Code which exempts the common carrier for the loss or damage to the cargo
The CA affirmed the ruling of the RTC, thus:
is a closed list.[46] To exculpate itself from liability for the loss/damage to the
cargo under any of the causes, the common carrier is burdened to prove any
of the aforecited causes claimed by it by a preponderance of evidence. If the The case at bar falls under one of the exceptions mentioned in Article 1734
carrier succeeds, the burden of evidence is shifted to the shipper to prove that of the Civil Code, particularly number (4) thereof, i.e., the character of the
the carrier is negligent.[47] goods or defects in the packing or in the containers. The trial court found
that the breakage of the crate was not due to the fault or negligence of ICTSI,
Defect is the want or absence of something necessary for completeness but to the inherent defect and weakness of the materials used in the
or perfection; a lack or absence of something essential to completeness; a fabrication of the said crate.
deficiency in something essential to the proper use for the purpose for which
a thing is to be used.[48] On the other hand, inferior means of poor quality, Upon examination of the records, We find no compelling reason to depart
mediocre, or second rate. [49] A thing may be of inferior quality but not from the factual findings of the trial court.
necessarily defective. In other words, defectiveness is not synonymous with
inferiority. It appears that the wooden batten used as support for the flooring was not
In the present case, the trial court declared that based on the record, the made of good materials, which caused the middle portion thereof to give way
loss of the shipment was caused by the negligence of the petitioner as the when it was lifted. The shipper also failed to indicate signs to notify the
shipper: stevedores that extra care should be employed in handling the shipment.
The same may be said with respect to defendant ICTSI. The breakage and Claudio Cansino, a stevedore of ICTSI, testified before the court their duties
collapse of Crate No. 1 and the total destruction of its contents were not and responsibilities:
imputable to any fault or negligence on the part of said defendant in handling
the unloading of the cargoes from the carrying vessel, but was due solely to Q: With regard to crates, what do you do with the crates?
the inherent defect and weakness of the materials used in the fabrication of A: Everyday with the crates, there is an arrow drawn where the
said crate. sling is placed, Maam.
Q: When the crates have arrows drawn and where you placed the
The crate should have three solid and strong wooden batten placed side by slings, what do you do with these crates?
side underneath or on the flooring of the crate to support the weight of its A: A sling is placed on it, Maam.
contents. However, in the case of the crate in dispute, although there were
three wooden battens placed side by side on its flooring, the middle wooden Q: After you placed the slings, what do you do with the crates?
batten, which carried substantial volume of the weight of the crates contents, A: After I have placed a sling properly, I ask the crane (sic) to
had a knot hole or bukong-bukong, which considerably affected, reduced and haul it, Maam.
weakened its strength. Because of the enormous weight of the machineries Q: Now, what, if any, were written or were marked on the crate?
inside this crate, the middle wooden batten gave way and collapsed. As the A: The thing that was marked on the cargo is an arrow just like of
combined strength of the other two wooden battens were not sufficient to a chain, Maam.
hold and carry the load, they too simultaneously with the middle wooden
battens gave way and collapsed (TSN, Sept. 26, 1996, pp. 20-24).
Q: And where did you see or what parts of the crate did you see petitioner, the latter represented and warranted that the goods were properly
those arrows? packed, and disclosed in writing the condition, nature, quality or
A: At the corner of the crate, Maam. characteristic that may cause damage, injury or detriment to the goods.
Absent any signs on the shipment requiring the placement of a sling cable in
Q: How many arrows did you see? the mid-portion of the crate, the respondent ICTSI was not obliged to do so.
A: Four (4) on both sides, Maam.
The statement in the Bill of Lading, that the shipment was in apparent
Q: What did you do with the arrows? good condition, is sufficient to sustain a finding of absence of defects in the
A: When I saw the arrows, thats where I placed the slings, Maam. merchandise. Case law has it that such statement will create a prima
Q: Now, did you find any other marks on the crate? facie presumption only as to the external condition and not to that not open to
A: Nothing more, Maam. inspection.[53]
Q: Now, Mr. Witness, if there are no arrows, would you place IN LIGHT OF ALL THE FOREGOING, the petition is DENIED for
slings on the parts where there are no arrows? lack of merit.
A: You can not place slings if there are no arrows, Maam. SO ORDERED.
Appellants allegation that since the cargo arrived safely from the port of THIRD DIVISION
[P]usan, Korea without defect, the fault should be attributed to the arrastre
operator who mishandled the cargo, is without merit. The cargo fell while it
was being carried only at about five (5) feet high above the ground. It would LEA MER INDUSTRIES, INC., G.R. No. 161745
not have so easily collapsed had the cargo been properly packed. The Petitioner,
shipper should have used materials of stronger quality to support the heavy Present
machines. Not only did the shipper fail to properly pack the cargo, it also Panganiban, J.,
failed to indicate an arrow in the middle portion of the cargo where Chairman,
additional slings should be attached. At any rate, the issue of negligence is - versus - Sandoval-Gutierrez,
factual in nature and in this regard, it is settled that factual findings of the Corona,
lower courts are entitled to great weight and respect on appeal, and, in fact, Carpio Morales, and
accorded finality when supported by substantial evidence. [51] Garcia, JJ
Promulgated:
We agree with the trial and appellate courts. MALAYAN INSURANCE CO., INC.,*
Respondent. September 30, 2005
The petitioner failed to adduce any evidence to counter that of x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x
respondent ICTSI. The petitioner failed to rebut the testimony of Dauz, that
the crates were sealed and that the contents thereof could not be seen from DECISION
the outside.[52] While it is true that the crate contained machineries and spare
parts, it cannot thereby be concluded that the respondents knew or should
have known that the middle wooden batten had a hole, or that it was not PANGANIBAN, J.:
strong enough to bear the weight of the shipment.
There is no showing in the Bill of Lading that the shipment was in good
order or condition when the carrier received the cargo, or that the three
wooden battens under the flooring of the cargo were not defective or
insufficient or inadequate. On the other hand, under Bill of Lading No.
NSGPBSML512565 issued by the respondent NSCP and accepted by the
ommon carriers are bound to observe extraordinary diligence in their
presumes that common carriers are at fault or negligent for any loss or Ilian Silica Mining entered into a contract of carriage with Lea Mer
damage to the goods that they transport. In the present case, the evidence Industries, Inc., for the shipment of 900 metric tons of silica sand valued
the silica sand was placed on board Judy VII, a barge leased by Lea Mer.
The Case
[6]
During the voyage, the vessel sank, resulting in the loss of the cargo. [7]
finding that the cause of the loss was a fortuitous event. [10] The RTC noted
The assailed Resolution denied reconsideration.
loss of the cargo subject of this case was caused by
that the vessel had sunk because of the bad weather condition brought about fortuitous event for which herein petitioner could not be held
liable.
by Typhoon Trining. The court ruled that petitioner had no advance
C. Whether or not the respondent, Court of Appeals, had
knowledge of the incoming typhoon, and that the vessel had been cleared by committed serious error and grave abuse of discretion in
disregarding the testimony of the witness from the
the Philippine Coast Guard to travel from Palawan to Manila. [11] MARINA, Engr. Jacinto Lazo y Villegal, to the effect that
the vessel Judy VII was seaworthy at the time of incident
and further in disregarding the testimony of the PAG-ASA
weather specialist, Ms. Rosa Barba y Saliente, to the effect
Ruling of the Court of Appeals that typhoon Trining did not hit Metro Manila or Palawan.[14]
Reversing the trial court, the CA held that the vessel was not seaworthy when
In the main, the issues are as follows: (1) whether petitioner is liable for the
it sailed for Manila. Thus, the loss of the cargo was occasioned by petitioners
loss of the cargo, and (2) whether the survey report of Jesus Cortez is
fault, not by a fortuitous event.[12]
admissible in evidence.
was due to a fortuitous event. This issue involves primarily a question of fact, private carrier when Vulcan chartered it. [19] Charter parties are classified as
notwithstanding petitioners claim that it pertains only to a question of law. As contracts of demise (or bareboat) and affreightment, which are distinguished
a general rule, questions of fact may not be raised in a petition for review. as follows:
by the fact that it was petitioners crew that manned the tugboat M/V extraordinary diligence, or that the loss or damage was occasioned by any of
Ayalit and controlled the barge Judy VII.[23] Necessarily, petitioner was a the following causes:[27]
required by the nature of their business and for reasons of public policy. Article 1174 of the Civil Code provides that no person shall be responsible
[24]
Extraordinary diligence requires rendering service with the greatest skill for a fortuitous event which could not be foreseen, or which, though
and foresight to avoid damage and destruction to the goods entrusted for foreseen, was inevitable. Thus, if the loss or damage was due to such an
Common carriers are presumed to have been at fault or to have acted (a) the cause of the unforeseen and unexpected occurrence, or the failure of
negligently for loss or damage to the goods that they have transported. the debtors to comply with their obligations, must have been independent of
human will; (b) the event that constituted the caso fortuito must have been exercised extraordinary diligence to avoid the loss, or that the loss had been
impossible to foreseeor, if foreseeable, impossible to avoid; (c) the occasioned by a fortuitous event -- an exempting circumstance.
occurrence must have been such as to render it impossible for the debtors to
fulfill their obligation in a normal manner; and (d) the obligor must have It was precisely this circumstance that petitioner cited to escape
been free from any participation in the aggravation of the resulting injury to liability. Lea Mer claimed that the loss of the cargo was due to the bad
the creditor.[29] weather condition brought about by Typhoon Trining. [32] Evidence was
presented to show that petitioner had not been informed of the incoming
To excuse the common carrier fully of any liability, the fortuitous typhoon, and that the Philippine Coast Guard had given it clearance to begin
event must have been the proximate and only cause of the loss. [30] Moreover, the voyage.[33] On October 25, 1991, the date on which the voyage
it should have exercised due diligence to prevent or minimize the loss before, commenced and the barge sank, Typhoon Trining was allegedly far from
during and after the occurrence of the fortuitous event. [31] Palawan, where the storm warning was only Signal No. 1. [34]
Loss in the Instant Case fortuitous event was sorely insufficient. As required by the pertinent law, it
was not enough for the common carrier to show that there was an unforeseen
There is no controversy regarding the loss of the cargo in the present case. As
or unexpected occurrence. It had to show that it was free from any fault -- a
the common carrier, petitioner bore the burden of proving that it had
fact it miserably failed to prove.
First, petitioner presented no evidence that it had attempted to
Second, the alleged fortuitous event was not the sole and proximate
minimize or prevent the loss before, during or after the alleged fortuitous
cause of the loss. There is a preponderance of evidence that the barge was not
event.[35] Its witness, Joey A. Draper, testified that he could no longer
seaworthy when it sailed for Manila. [38] Respondent was able to prove that, in
remember whether anything had been done to minimize loss when water
the hull of the barge, there were holes that might have caused or aggravated
started entering the barge.[36]This fact was confirmed during his cross-
the sinking.[39]Because the presumption of negligence or fault applied to
examination, as shown by the following brief exchange:
petitioner, it was incumbent upon it to show that there were no holes; or, if
Atty. Baldovino, Jr.:
Other than be[a]ching the barge Judy VII, were there other
there were, that they did not aggravate the sinking.
precautionary measure[s] exercised by you and the
crew of Judy VII so as to prevent the los[s] or
sinking of barge Judy VII?
xxxxxxxxx
Petitioner offered no evidence to rebut the existence of the holes. Its
Atty. Baldovino, Jr.:
Your Honor, what I am asking [relates to the] action witness, Domingo A. Luna, testified that the barge was in tip-top or excellent
taken by the officers and crew of tugboat Ayalit and
barge Judy VII x x x to prevent the sinking of barge
Judy VII? condition,[40] but that he had not personally inspected it when it left Palawan.
xxxxxxxxx [41]
Court:
Mr. witness, did the captain of that tugboat give any
instruction on how to save the barge Judy VII?
The submission of the Philippine Coast Guards Certificate of
Joey Draper:
I can no longer remember sir, because that happened [a] long
time ago.[37] Inspection of Judy VII, dated July 31, 1991, did not conclusively prove that
the barge was seaworthy.[42] The regularity of the issuance of the Certificate is The facts reveal that Cortezs Survey Report was used in the testimonies of
disputably presumed.[43] It could be contradicted by competent evidence, respondents witnesses -- Charlie M. Soriano; and Federico S. Manlapig, a
which respondent offered. Moreover, this evidence did not necessarily take cargo marine surveyor and the vice-president of Toplis and Harding
into account the actual condition of Company.[47] Soriano testified that the Survey Report had been used in
the vessel at the time of the commencement of the voyage. [44] preparing the final Adjustment Report conducted by their company. [48] The
final Report showed that the barge was not seaworthy because of the
Second Issue:
Admissibility of the Survey Report
existence of the holes. Manlapig testified that he had prepared that Report
after taking into account the findings of the surveyor, as well as the pictures
Petitioner claims that the Survey Report [45] prepared by Jesus Cortez, the and the sketches of the place where the sinking occurred. [49] Evidently, the
cargo surveyor, should not have been admitted in evidence. The Court partly existence of the holes was proved by the testimonies of the witnesses, not
agrees. Because he did not testify during the trial, [46] then the Report that he merely by Cortez Survey Report.
had prepared was hearsay and therefore inadmissible for the purpose of
Rule on Independently
Relevant Statement
proving the truth of its contents.
That witnesses must be examined and presented during the trial, [50] and that
The Survey Report Not the Sole Evidence
their testimonies must be confined to personal knowledge is required by the
An exception to the foregoing rule is that on independently relevant and Resolution are AFFIRMED. Costs against petitioner.
relevant. Here, the hearsay rule does not apply. [55] PUNO, C.J., Chairperson
,
SANDOVAL-GUTIERREZ,
- v e r s u s - CORONA,
AZCUNA and
In the instant case, the challenged Survey Report prepared by Cortez was GARCIA, JJ.
PHILIPPINE HOME
admitted only as part of the testimonies of respondents witnesses. The ASSURANCE
CORPORATION,
Respondent. Promulgated: discharge at Tagoloan, Misamis Oriental to consignee Ferrochrome Phils.,
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
Pursuant to the contract, on December 23, 1984, petitioner received
DECISION and loaded 1,100 metric tons of silica quartz on board the M/T Espiritu Santo
which left Ayungon for Tagoloan the next day.[9] The shipment never reached
CORONA, J.:
its destination, however, because the M/T Espiritu Santo sank in the
MCCII filed a claim for the loss of the shipment with its insurer, respondent
This is the issue presented for the Courts resolution in this petition for review
Philippine Home Assurance Corporation.[11] Respondent paid the claim in the
on certiorari[1] assailing the March 16, 2001 decision [2] and September 17,
amount of P211,500and was subrogated to the rights of MCCII. [12] Thereafter,
2001 resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 40473
it filed a case in the RTC[13] against petitioner for reimbursement of the
which in turn affirmed the December 27, 1989 decision [4] of the Regional
amount it paid MCCII.
Trial Court (RTC), Branch 145, Makati, MetroManila.[5]
The pertinent facts follow. After trial, the RTC rendered judgment in favor of respondent. It
entered into a voyage charter [6] wherein petitioner was to load 800 to 1,100
On appeal, the CA affirmed the decision of the RTC. Hence, this
metric tons of silica quartz on board the
petition.
M/T Espiritu Santo[7] at Ayungon, Negros Occidental for transport to and
Petitioner and MCCII entered into a voyage charter, also known as a Based on the agreement signed by the parties and the testimony of
contract of affreightment wherein the ship was leased for a single voyage for petitioners operations manager, it is clear that it was a contract of carriage
the conveyance of goods, in consideration of the payment of freight. [14] Under petitioner signed with MCCII.It actively negotiated and
a voyage charter, the shipowner retains the possession, command and solicited MCCIIs account, offered its services to ship the silica quartz and
navigation of the ship, the charterer or freighter merely having use of the proposed to utilize the M/T Espiritu Santo in lieu of the M/T Seebees or the
space in the vessel in return for his payment of freight. [15] An owner who M/T Shirley (as previously agreed upon in the voyage charter) since these
retains possession of the ship remains liable as carrier and must answer for vessels had broken down.[20]
of the loss of the cargo, it was engaged in the business of carrying and
Petitioner argues that the CA erred when it affirmed the RTC finding
transporting goods by water, for compensation, and offered its services to the
that the voyage charter it entered into with MCCII was a contract of carriage.
public.[21]
[17]
It insists that the agreement was merely a contract of hire wherein MCCII
From the nature of their business and for reasons of public policy,
hired the vessel from its owner, ALS Timber Enterprises (ALS). [18] Not being
common carriers are bound to observe extraordinary diligence over the goods
the owner of the M/T Espiritu Santo, petitioner did not have control and
they transport according to the circumstances of each case. [22] In the event of
supervision over the vessel, its master and crew. [19] Thus, it could not be held
loss of the goods, common carriers are responsible, unless they can prove
liable for the loss of the shipment caused by the sinking of a ship it did not that this was brought about by the causes specified in Article 1734 of the
own. Civil Code.[23] In all other cases, common carriers are presumed to be at fault
We disagree. or to have acted negligently, unless they prove that they observed
extraordinary diligence.[24]
Petitioner was the one which contracted with MCCII for the While it is true that a bill of lading may serve as the contract of carriage
transport of the cargo. It had control over what vessel it would use. All between the parties,[29] it cannot prevail over the express provision of the
throughout its dealings with MCCII, it represented itself as a common voyage charter that MCCII and petitioner executed:
carrier. The fact that it did not own the vessel it decided to use to [I]n cases where a Bill of Lading has been issued by a carrier
covering goods shipped aboard a vessel under a charter
consummate the contract of carriage did not negate its character and duties as party, and the charterer is also the holder of the bill of lading,
the bill of lading operates as the receipt for the goods, and as
a common carrier. The MCCII (respondents subrogor) could not be document of title passing the property of the goods, but not
as varying the contract between the charterer and
reasonably expected to inquire about the ownership of the vessels which the shipowner. The Bill of Lading becomes, therefore, only a
receipt and not the contract of carriage in a charter of the
petitioner carrier offered to utilize. As a practical matter, it is very difficult
entire vessel, for the contract is the Charter Party, and is the
and often impossible for the general public to enforce its rights of action law between the parties who are bound by its terms and
condition provided that these are not contrary to law, morals,
under a contract of carriage if it should be required to know who the actual good customs, public order and public policy. [30]
owner of the vessel is.[25] In fact, in this case, the voyage charter itself Finally, petitioner asserts that MCCII should be held liable for its
denominated petitioner as the owner/operator of the vessel. [26] own loss since the voyage charter stipulated that cargo insurance was for
to public policy.[32]
Again, we disagree.
liable to the charterer or shipper if it does not own the vessel it chooses to
use. MCCII never dealt with ALS and yet petitioner insists that MCCII DECISION
should sue ALS for reimbursement for its loss. Certainly, to permit a
common carrier to escape its responsibility for the goods it agreed to CARPIO MORALES, J.:
transport (by the expedient of alleging non-ownership of the vessel it Spouses Dante and Leonora Cruz (petitioners) lodged a Complaint on
employed) would radically derogate from the carrier's duty of extraordinary January 25, 2001[1] against Sun Holidays, Inc. (respondent) with the Regional
Trial Court (RTC) of Pasig City for damages arising from the death of their
diligence. It would also open the door to collusion between the carrier and
son Ruelito C. Cruz (Ruelito) who perished with his wife on September 11,
the supposed owner and to the possible shifting of liability from the carrier to 2000 on board the boat M/B Coco Beach III that capsized en route to
one without any financial capability to answer for the resulting damages. [34] Batangas from Puerto Galera, Oriental Mindoro where the couple had stayed
at Coco Beach Island Resort (Resort) owned and operated by respondent.
WHEREFORE, the petition is hereby DENIED.
The stay of the newly wed Ruelito and his wife at the Resort from September
9 to 11, 2000 was by virtue of a tour package-contract with respondent that
Costs against petitioner.
included transportation to and from the Resort and the point of departure in
Batangas.
SO ORDERED.
SPOUSES DANTE CRUZ and G.R. No. 186312 Miguel C. Matute (Matute),[2] a scuba diving instructor and one of the
LEONORA CRUZ,
survivors, gave his account of the incident that led to the filing of the
Petitioners, Present:
complaint as follows:
CARPIO MORALES, J.,
Chairperson,
BRION,
Matute stayed at the Resort from September 8 to 11, 2000. He was originally At the time of Ruelitos death, he was 28 years old and employed as a
scheduled to leave the Resort in the afternoon of September 10, 2000, but contractual worker for Mitsui Engineering & Shipbuilding Arabia, Ltd.
was advised to stay for another night because of strong winds and heavy in Saudi Arabia, with a basic monthly salary of $900.[3]
rains. Petitioners, by letter of October 26, 2000,[4] demanded indemnification from
respondent for the death of their son in the amount of at least P4,000,000.
On September 11, 2000, as it was still windy, Matute and 25 other Resort
guests including petitioners son and his wife trekked to the other side of Replying, respondent, by letter dated November 7, 2000,[5] denied any
the Coco Beach mountain that was sheltered from the wind where they responsibility for the incident which it considered to be a fortuitous event. It
boarded M/B Coco Beach III, which was to ferry them to Batangas. nevertheless offered, as an act of commiseration, the amount of P10,000 to
petitioners upon their signing of a waiver.
Shortly after the boat sailed, it started to rain. As it moved farther away from
Puerto Galera and into the open seas, the rain and wind got stronger, causing As petitioners declined respondents offer, they filed the Complaint, as earlier
the boat to tilt from side to side and the captain to step forward to the front, reflected, alleging that respondent, as a common carrier, was guilty of
leaving the wheel to one of the crew members. negligence in allowing M/B Coco Beach III to sail notwithstanding storm
warning bulletins issued by the Philippine Atmospheric, Geophysical and
The waves got more unwieldy. After getting hit by two big waves Astronomical Services Administration (PAGASA) as early as 5:00 a.m. of
which came one after the other, M/B Coco Beach III capsized putting all September 11, 2000.[6]
passengers underwater.
In its Answer,[7] respondent denied being a common carrier, alleging that its
The passengers, who had put on their life jackets, struggled to get out of the
boats are not available to the general public as they only ferry Resort guests
boat. Upon seeing the captain, Matute and the other passengers who reached
and crew members.Nonetheless, it claimed that it exercised the utmost
the surface asked him what they could do to save the people who were still
diligence in ensuring the safety of its passengers; contrary to petitioners
trapped under the boat. The captain replied Iligtas niyo na lang ang sarili
allegation, there was no storm on September 11, 2000as the Coast Guard in
niyo (Just save yourselves).
fact cleared the voyage; and M/B Coco Beach III was not filled to capacity
and had sufficient life jackets for its passengers. By way of Counterclaim,
Help came after about 45 minutes when two boats owned by Asia Divers in
respondent alleged that it is entitled to an award for attorneys fees and
Sabang, Puerto Galera passed by the capsized M/B Coco Beach III. Boarded
litigation expenses amounting to not less than P300,000.
on those two boats were 22 persons, consisting of 18 passengers and four
crew members, who were brought to Pisa Island. Eight passengers, including Carlos Bonquin, captain of M/B Coco Beach III, averred that the Resort
petitioners son and his wife, died during the incident. customarily requires four conditions to be met before a boat is allowed to
sail, to wit: (1) the sea is calm, (2) there is clearance from the Coast Guard, for guests cannot be considered as ancillary to its business as no income is
(3) there is clearance from the captain and (4) there is clearance from the derived therefrom; that it exercised extraordinary diligence as shown by the
[8]
Resorts assistant manager. He added that M/B Coco Beach III met all four conditions it had imposed before allowing M/B Coco Beach III to sail; that
conditions on September 11, 2000,[9] but a subasco or squall, characterized by the incident was caused by a fortuitous event without any contributory
strong winds and big waves, suddenly occurred, causing the boat to capsize. negligence on its part; and that the other case wherein the appellate court
[10]
held it liable for damages involved different plaintiffs, issues and evidence. [16]
By Decision of February 16, 2005,[11] Branch 267 of the Pasig RTC dismissed
petitioners Complaint and respondents Counterclaim. The petition is impressed with merit.
Petitioners Motion for Reconsideration having been denied by Order Petitioners correctly rely on De Guzman v. Court of Appeals[17] in
[12]
dated September 2, 2005, they appealed to the Court of Appeals. characterizing respondent as a common carrier.
on September 11, 2000.Respondents position does not impress. have been the proximate and only cause of the loss. And it should have
exercised due diligence to prevent or minimize the loss before, during and
The evidence shows that PAGASA issued 24-hour public weather forecasts after the occurrence of the fortuitous event. [25]
and tropical cyclone warnings for shipping on September 10 and 11, 2000
Respondent cites the squall that occurred during the voyage as the fortuitous
advising of tropical depressions in Northern Luzon which would also affect
event that overturned M/B Coco Beach III. As reflected above, however, the
the province of Mindoro.[22] By the testimony of Dr. Frisco Nilo, supervising
occurrence of squalls was expected under the weather condition
weather specialist of PAGASA, squalls are to be expected under such
of September 11, 2000. Moreover, evidence shows that M/B Coco Beach
weather condition.[23]
III suffered engine trouble before it capsized and sank. [26]The incident was,
therefore, not completely free from human intervention.
A very cautious person exercising the utmost diligence would thus not brave
such stormy weather and put other peoples lives at risk. The extraordinary The Court need not belabor how respondents evidence likewise fails to
diligence required of common carriers demands that they take care of the demonstrate that it exercised due diligence to prevent or minimize the loss
goods or lives entrusted to their hands as if they were their own. This before, during and after the occurrence of the squall.
respondent failed to do.
Article 1764[27] vis--vis Article 2206[28] of the Civil Code holds the
Respondents insistence that the incident was caused by a fortuitous
common carrier in breach of its contract of carriage that results in the death
event does not impress either.
of a passenger liable to pay the following: (1) indemnity for death, (2)
The elements of a "fortuitous event" are: (a) the cause of the unforeseen and
indemnity for loss of earning capacity and (3) moral damages.
unexpected occurrence, or the failure of the debtors to comply with their
obligations, must have been independent of human will; (b) the event that
Petitioners are entitled to indemnity for the death of Ruelito which is
constituted the caso fortuito must have been impossible to foresee or, if
fixed at P50,000.[29]
foreseeable, impossible to avoid; (c) the occurrence must have been such as
As for damages representing unearned income, the formula for its
computation is:
Life expectancy = 2/3 x [80 - age of deceased at the time of
Net Earning Capacity = life expectancy x (gross annual
income - reasonable and death]
necessary living expenses).
2/3 x [80 - 28]
Life expectancy is determined in accordance with the
formula: 2/3 x [52]
Life expectancy = 35
2 / 3 x [80 age of deceased at the time of death] [30]
Pursuant to Article 2208[39] of the Civil Code, attorney's fees may 3. When the judgment of the court awarding a sum
also be awarded where exemplary damages are awarded. The Court finds of money becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or
that 10% of the total amount adjudged against respondent is reasonable for paragraph 2, above, shall be 12% per annum from such
the purpose. finality until its satisfaction, this interim period being
deemed to be by then an equivalent to a forbearance of
credit. (emphasis supplied).
Finally, Eastern Shipping Lines, Inc. v. Court of Appeals [40] teaches
that when an obligation, regardless of its source, i.e., law, contracts, quasi-
contracts, delicts or quasi-delicts is breached, the contravenor can be held
Since the amounts payable by respondent have been determined with
liable for payment of interest in the concept of actual and compensatory
certainty only in the present petition, the interest due shall be computed upon
damages, subject to the following rules, to wit
the finality of this decision at the rate of 12% per annum until satisfaction, in
accordance with paragraph number 3 of the immediately cited guideline
1. When the obligation is breached, and it consists in
the payment of a sum of money, i.e., a loan or forbearance of in Easter Shipping Lines, Inc.
money, the interest due should be that which may have been
stipulated in writing. Furthermore, the interest due shall
WHEREFORE, the Court of Appeals Decision of August 19,
itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest 2008 is REVERSED and SET ASIDE. Judgment is rendered in favor of
shall be 12% per annum to be computed from default, i.e., petitioners ordering respondent to pay petitioners the following: (1) P50,000
from judicial or extrajudicial demand under and subject to
the provisions of Article 1169 of the Civil Code. as indemnity for the death of Ruelito Cruz; (2) P8,316,000 as indemnity for
Ruelitos loss of earning capacity; (3) P100,000 as moral
2. When an obligation, not constituting a loan or
damages; (4) P100,000 as exemplary damages; (5) 10% of the total amount
forbearance of money, is breached, an interest on the amount
of damages awarded may be imposed at the discretion of the adjudged against respondent as attorneys fees; and (6) the costs of suit.
court at the rate of 6% per annum. No interest, however,
shall be adjudged on unliquidated claims or damages except
The total amount adjudged against respondent shall earn interest at the rate of
12% per annum computed from the finality of this decision until full
payment.
SO ORDERED.