G.R. No.

148496

March 19, 2002

VIRGINES CALVO doing !"in#"" !nd#r $h# na%# and "$&'# (RANSORIEN( CON(AINER (ERMINAL SERVICES, INC., petitioner, vs. )C*+ GENERAL INS)RANCE CO., INC. ,-or%#r'& A''i#d G!aran$## In". Co., Inc.. respondent. MEN/O0A, J.: This is a petition for review of the decision,1 dated May 31, 2001, of the Court of Appeals, affirming the decision2 of the egional Trial Court, Ma!ati City, "ranch 1#$, which ordered petitioner to pay respondent, as su%rogee, the amount of &'3,112.00 with legal interest, representing the value of damaged cargo handled %y petitioner, 2() thereof as attorney*s fees, and the cost of the suit.1wphi1.nt The facts are as follows+ &etitioner ,irgines Calvo is the owner of Transorient Container Terminal -ervices, .nc. /TCT-.0, a sole proprietorship customs %ro!er. At the time material to this case, petitioner entered into a contract with -an Miguel Corporation /-MC0 for the transfer of 11# reels of semi1chemical fluting paper and 12# reels of !raft liner %oard from the &ort Area in Manila to -MC*s warehouse at the Ta%acalera Compound, omualde2 -t., 3rmita, Manila. The cargo was insured %y respondent 4C&" 5eneral .nsurance Co., .nc. 6n 7uly 1#, 1''0, the shipment in 8uestion, contained in 30 metal vans, arrived in Manila on %oard 9M:, ;aya!awa Maru9 and, after 2# hours, were unloaded from the vessel to the custody of the arrastre operator, Manila &ort -ervices, .nc. <rom 7uly 23 to 7uly 2(, 1''0, petitioner, pursuant to her contract with -MC, withdrew the cargo from the arrastre operator and delivered it to -MC*s warehouse in 3rmita, Manila. 6n 7uly 2(, 1''0, the goods were inspected %y Marine Cargo -urveyors, who found that 1( reels of the semi1chemical fluting paper were 9wet:stained:torn9 and 3 reels of !raft liner %oard were li!ewise torn. The damage was placed at &'3,112.00. -MC collected payment from respondent 4C&" under its insurance contract for the aforementioned amount. .n turn, respondent, as su%rogee of -MC, %rought suit against petitioner in the egional Trial Court, "ranch 1#$, Ma!ati City, which, on =ecem%er 20, 1''(, rendered >udgment finding petitioner lia%le to respondent for the damage to the shipment.

The trial court held+ .t cannot %e denied . . . that the su%>ect cargoes sustained damage while in the custody of defendants. 3vidence such as the ?arehouse 3ntry -lip /3@h. 9390A the =amage eport /3@h. 9<90 with entries appearing therein, classified as 9T3=9 and 9T-B9, which the claims processor, Ms. Agrifina =e Cuna, claimed to %e tearrage at the end and tearrage at the middle of the su%>ect damaged cargoes respectively, coupled with the Marine Cargo -urvey eport /3@h. 9;9 1 9;1#1A90 confirms the fact of the damaged condition of the su%>ect cargoes. The surveyorDs*E report /3@h. 9;1#1A90 in particular, which provides among others that+ 9 . . . we opine that damages sustained %y shipment is attri%uta%le to improper handling in transit presuma%ly whilst in the custody of the %ro!er . . . .9 is a finding which cannot %e traversed and overturned. The evidence adduced %y the defendants is not enough to sustain DherE defense that Dshe isE are not lia%le. =efendant %y reason of the nature of DherE %usiness should have devised ways and means in order to prevent the damage to the cargoes which it is under o%ligation to ta!e custody of and to forthwith deliver to the consignee. =efendant did not present any evidence on what precaution DsheE performed to prevent DtheE said incident, hence the presumption is that the moment the defendant accepts the cargo DsheE shall perform such e@traordinary diligence %ecause of the nature of the cargo. .... 5enerally spea!ing under Article 1F3( of the Civil Code, if the goods are proved to have %een lost, destroyed or deteriorated, common carriers are presumed to have %een at fault or to have acted negligently, unless they prove that they have o%served the e@traordinary diligence re8uired %y law. The %urden of the plaintiff, therefore, is to prove merely that the goods he transported have %een lost, destroyed or deteriorated. Thereafter, the %urden is shifted to the carrier to prove that he has e@ercised the e@traordinary diligence re8uired %y law. Thus, it has %een held that the mere proof of delivery of goods in good order to a carrier, and of their arrival at the place of destination in %ad order, ma!es out a prima facie case against the carrier, so that if no e@planation is given as to how the in>ury occurred, the carrier must %e held responsi%le. .t is incum%ent upon the carrier to prove that the

loss was due to accident or some other circumstances inconsistent with its lia%ility.9 /cited in Commercial Caws of the &hilippines %y Ag%ayani, p. 31, ,ol. .,, 1'$' 3d.0 =efendant, %eing a customs %rother, warehouseman and at the same time a common carrier is supposed DtoE e@ercise DtheE e@traordinary diligence re8uired %y law, hence the e@traordinary responsi%ility lasts from the time the goods are unconditionally placed in the possession of and received %y the carrier for transportation until the same are delivered actually or constructively %y the carrier to the consignee or to the person who has the right to receive the same.3 Accordingly, the trial court ordered petitioner to pay the following amounts 11 1. The sum of &'3,112.00 plus interestA 2. 2() thereof as lawyer*s feeA 3. Costs of suit.# The decision was affirmed %y the Court of Appeals on appeal. ;ence this petition for review on certiorari. &etitioner contends that+ .. T;3 C64 T 6< A&&3AC- C6MM.TT3= -3 .64- AB= 3,3 -."C3 3 6 D.BE =3C.=.B5 T;3 CA-3 B6T 6B T;3 3,.=3BC3 & 3-3BT3= "4T 6B &4 3 -4 M.-3-, -&3C4CAT.6BAB= MAB.<3-TCG M.-TAH3B .B<3 3BC3. ... T;3 C64 T 6< A&&3AC- C6MM.TT3= -3 .64- AB= 3,3 -."C3 3 6 .B CCA--.<G.B5 T;3 &3T.T.6B3 A- A C6MM6B CA .3 AB= B6T A- & .,AT3 6 -&3C.AC CA .3 ?;6 =.= B6T ;6C= .T- -3 ,.C3- T6 T;3 &4"C.C.( .t will %e convenient to deal with these contentions in the inverse order, for if petitioner is not a common carrier, although %oth the trial court and the Court of Appeals held otherwise, then she is indeed not lia%le %eyond what ordinary diligence in the vigilance over the goods transported %y her, would re8uire.I Conse8uently, any damage to the cargo she agrees to transport cannot %e presumed to have %een due to her fault or negligence.

&etitioner contends that contrary to the findings of the trial court and the Court of Appeals, she is not a common carrier %ut a private carrier %ecause, as a customs %ro!er and warehouseman, she does not indiscriminately hold her services out to the pu%lic %ut only offers the same to select parties with whom she may contract in the conduct of her %usiness. The contention has no merit. .n De Guzman v. Court of Appeals,F the Court dismissed a similar contention and held the party to %e a common carrier, thus 1 The Civil Code defines 9common carriers9 in the following terms+ 9Article 1F32. Common carriers are persons, corporations, firms or associations engaged in the %usiness of carrying or transporting passengers or goods or %oth, %y land, water, or air for compensation, offering their services to the pu%lic.9 The a%ove article ma!es no distinction %etween one whose principal %usiness activity is the carrying of persons or goods or %oth, and one who does such carrying only as an ancillary activity . . . Article 1F32 also carefully avoids ma!ing any distinction %etween a person or enterprise offering transportation service on aregular or scheduled asis and one offering such service on an occasional, episodic or unscheduled asis.Beither does Article 1F32 distinguish %etween a carrier offering its services to the 9general pu lic,9 i.e., the general community or population, and one who offers services or solicits %usiness only from a narrowsegment of the general population. ?e thin! that Article 1F32 deli%erately refrained from ma!ing such distinctions. -o understood, the concept of 9common carrier9 under Article 1F32 may %e seen to coincide neatly with the notion of 9pu%lic service,9 under the &u%lic -ervice Act /Commonwealth Act Bo. 1#1I, as amended0 which at least partially supplements the law on common carriers set forth in the Civil Code. 4nder -ection 13, paragraph /%0 of the &u%lic -ervice Act, 9pu%lic service9 includes+ 9 @ @ @ every person that now or hereafter may own, operate, manage, or control in the &hilippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and done for general usiness purposes, any common carrier, railroad, street railway, traction railway, su%way motor vehicle, either for freight or passenger, or %oth, with or without fi@ed

route and whatever may %e its classification, freight or carrier service of any class, e@press service, steam%oat, or steamship line, pontines, ferries and water craft, engaged in the transportation of passengers or freight or %oth, shipyard, marine repair shop, wharf or doc!, ice plant, ice1refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power petroleum, sewerage system, wire or wireless communications systems, wire or wireless %roadcasting stations and other similar pu%lic services. @ @ @9 $ There is greater reason for holding petitioner to %e a common carrier %ecause the transportation of goods is an integral part of her %usiness. To uphold petitioner*s contention would %e to deprive those with whom she contracts the protection which the law affords them notwithstanding the fact that the o%ligation to carry goods for her customers, as already noted, is part and parcel of petitioner*s %usiness. Bow, as to petitioner*s lia%ility, Art. 1F33 of the Civil Code provides+ Common carriers, from the nature of their %usiness and for reasons of pu%lic policy, are %ound to o%serve e@traordinary diligence in the vigilance over the goods and for the safety of the passengers transported %y them, according to all the circumstances of each case. . . . .n Compania !aritima v. Court of Appeals,' the meaning of 9e@traordinary diligence in the vigilance over goods9 was e@plained thus+ The e@traordinary diligence in the vigilance over the goods tendered for shipment re8uires the common carrier to !now and to follow the re8uired precaution for avoiding damage to, or destruction of the goods entrusted to it for sale, carriage and delivery. .t re8uires common carriers to render service with the greatest s!ill and foresight and 9to use all reasona%le means to ascertain the nature and characteristic of goods tendered for shipment, and to e@ercise due care in the handling and stowage, including such methods as their nature re8uires.9 .n the case at %ar, petitioner denies lia%ility for the damage to the cargo. -he claims that the 9spoilage or wettage9 too! place while the goods were in the custody of either the carrying vessel 9M:, ;aya!awa Maru,9 which transported the cargo to Manila, or the arrastre operator, to whom the goods were unloaded and who allegedly !ept them in open air for nine days from 7uly 1# to 7uly 23, 1''$

notwithstanding the fact that some of the containers were deformed, crac!ed, or otherwise damaged, as noted in the Marine -urvey eport /3@h. ;0, to wit+ MAJ4120I2$$0 .C-413I3#I113 loose &3 4120#20'1# T6C41213IF#13 soa!ed MAJ41201#0I10 .C-41#1210(10 1 10 detached loosened. 1 1 1 1 1 rain gutter deformed:crac!ed left side ru%%er gas!et on door distorted:partly with pinholes on roof panel right portion wood flooring weDtE and:or with signs of water with dent:crac! on roof panel ru%%er gas!et on left side:door panel partly

.n addition, petitioner claims that Marine Cargo -urveyor 3rnesto Tolentino testified that he has no personal !nowledge on whether the container vans were first stored in petitioner*s warehouse prior to their delivery to the consignee. -he li!ewise claims that after withdrawing the container vans from the arrastre operator, her driver, icardo Ba2arro, immediately delivered the cargo to -MC*s warehouse in 3rmita, Manila, which is a mere thirty1minute drive from the &ort Area where the cargo came from. Thus, the damage to the cargo could not have ta!en place while these were in her custody.11 Contrary to petitioner*s assertion, the -urvey eport /3@h. ;0 of the Marine Cargo -urveyors indicates that when the shipper transferred the cargo in 8uestion to the arrastre operator, these were covered %y clean 38uipment .nterchange eport /3. 0 and, when petitioner*s employees withdrew the cargo from the arrastre operator, they did so without e@ception or protest either with regard to the condition of container vans or their contents. The -urvey eport pertinently reads 11 =etails of =ischarge+ -hipment, provided with our protective supervision was noted discharged e@ vessel to doc! of &ier K13 -outh ;ar%or, Manila on 1# 7uly 1''0, containeri2ed onto 30* @ 20* secure metal vans, covered %y clean

3. s.3@cept for slight dents and paint scratches on side and roof panels, these containers were deemed to have D%eenE received in good condition. .... Transfer:=elivery+ 6n 7uly 23, 1''0, shipment housed onto 30* @ 20* cargo containers was DwithdrawnE %y Transorient Container -ervices, .nc. . . . 1i$ho!$ #2c#3$ion. DThe cargoE was finally delivered to the consignee*s storage warehouse located at Ta%acalera Compound, omualde2 -treet, 3rmita, Manila from 7uly 23:2(, 1''0.12 As found %y the Court of Appeals+ <rom the D-urvey eportE, it DisE clear that the shipment was discharged from the vessel to the arrastre, Marina &ort -ervices .nc., in good order and condition as evidenced %y clean 38uipment .nterchange eports /3. s0. ;ad there %een any damage to the shipment, there would have %een a report to that effect made %y the arrastre operator. The cargoes were withdrawn %y the defendant1appellant from the arrastre still in good order and condition as the same were received %y the former without e@ception, that is, without any report of damage or loss. -urely, if the container vans were deformed, crac!ed, distorted or dented, the defendant1appellant would report it immediately to the consignee or ma!e an e@ception on the delivery receipt or note the same in the ?arehouse 3ntry -lip /?3-0. Bone of these too! place. To put it simply, the defendant1appellant received the shipment in good order and condition and delivered the same to the consignee damaged. ?e can only conclude that the damages to the cargo occurred while it was in the possession of the defendant1appellant. ?henever the thing is lost /or damaged0 in the possession of the de%tor /or o%ligor0, it shall %e presumed that the loss /or damage0 was due to his fault, unless there is proof to the contrary. Bo proof was proffered to re%ut this legal presumption and the presumption of negligence attached to a common carrier in case of loss or damage to the goods.13 Anent petitioner*s insistence that the cargo could not have %een damaged while in her custody as she immediately delivered the containers to -MC*s compound, suffice it to say that to prove the e@ercise of e@traordinary diligence, petitioner must do more than merely show the possi%ility that some other party could %e

responsi%le for the damage. .t must prove that it used 9all reasona%le means to ascertain the nature and characteristic of goods tendered for DtransportE and that DitE e@erciseDdE due care in the handling DthereofE.9 &etitioner failed to do this. Bor is there %asis to e@empt petitioner from lia%ility under Art. 1F3#/#0, which provides 11 Common carriers are responsi%le for the loss, destruction, or deterioration of the goods, unless the same is due to any of the following causes only+ .... /#0 The character of the goods or defects in the pac!ing or in the containers. .... <or this provision to apply, the rule is that if the improper pac!ing or, in this case, the defect:s in the container, is:are !nown to the carrier or his employees or apparent upon ordinary o%servation, %ut he nevertheless accepts the same without protest or e@ception notwithstanding such condition, he is not relieved of lia%ility for damage resulting therefrom.1# .n this case, petitioner accepted the cargo without e@ception despite the apparent defects in some of the container vans. ;ence, for failure of petitioner to prove that she e@ercised e@traordinary diligence in the carriage of goods in this case or that she is e@empt from lia%ility, the presumption of negligence as provided under Art. 1F3(1( holds. ?;3 3<6 3, the decision of the Court of Appeals, dated May 31, 2001, is A<<. M3=.1wphi1.nt -6 6 =3 3=. "ellosillo, #uisum ing, "uena, and De $eon, %r., %%., concur.