Torres Madrid vs. FEB
Torres Madrid vs. FEB
Torres Madrid vs. FEB
194121
Facts:
TMBI – who did not own any delivery trucks – subcontracted the services of
Benjamin Manalastas’ company, BMT Trucking Services (BMT), to transport the
shipment from the port to the Biñan warehouse. 3 Incidentally, TMBI notified Sony
who had no objections to the arrangement. 4
Four BMT trucks picked up the shipment from the port at about 11:00 a.m. of
October 7, 2000. However, BMT could not immediately undertake the delivery
because of the truck ban and because the following day was a Sunday. Thus, BMT
scheduled the delivery on October 9, 2000.
In the early morning of October 9, 2000, the four trucks left BMT’s garage for
Laguna.5 However, only three trucks arrived at Sony’s Biñan warehouse.
Later that evening, BMT’s Operations Manager Melchor Manalastas informed Victor
Torres, TMBI’s General Manager, of the development. 7 They went to Muntinlupa
together to inspect the truck and to report the matter to the police. 8
TMBI notified Sony of the loss through a letter dated October 10, 2000. 11 It also sent
BMT a letter dated March 29, 2001, demanding payment for the lost shipment. BMT
refused to pay, insisting that the goods were "hijacked."
In the meantime, Sony filed an insurance claim with the Mitsui, the insurer of the
goods. After evaluating the merits of the claim, Mitsui paid
Sony PHP7,293,386.23 corresponding to the value of the lost goods. 12
After being subrogated to Sony’s rights, Mitsui sent TMBI a demand letter dated
August 30, 2001 for payment of the lost goods. TMBI refused to pay Mitsui’s claim.
As a result, Mitsui filed a complaint against TMBI on November 6, 2001,
At the trial, it was revealed that BMT and TMBI have been doing business with each
other since the early 80’s. It also came out that there had been a previous hijacking
incident involving Sony’s cargo in 1997, but neither Sony nor its insurer filed a
complaint against BMT or TMBI.13
On August 5, 2008, the RTC found TMBI and Benjamin Manalastas jointly and
solidarily liable to pay Mitsui PHP 7,293,386.23 as actual damages, attorney’s fees
equivalent to 25% of the amount claimed, and the costs of the suit. 14 The RTC held
that TMBI and Manalastas were common carriers and had acted negligently.
On October 14, 2010, the CA affirmed the RTC’s decision but reduced the award of
attorney’s fees to PHP 200,000.
TMBI disagreed with the CA’s ruling and filed the present petition on December 3,
2010.
Issue:
(1) Whether or not TMBI is a common carrier?
(2) Whether or not TMBI is liable for negligence?
Held:
(1) Common carriers are persons, corporations, firms or associations engaged in the
business of transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public. 32 By the nature of their business
and for reasons of public policy, they are bound to observe extraordinary diligence
in the vigilance over the goods and in the safety of their passengers.
Despite TMBI’s present denials, we find that the delivery of the goods is an integral,
albeit ancillary, part of its brokerage services. TMBI admitted that it was contracted
to facilitate, process, and clear the shipments from the customs authorities,
withdraw them from the pier, then transport and deliver them to Sony’s warehouse
in Laguna.
Further, TMBI’s General Manager Victor Torres described the nature of its services
as follows:
That TMBI does not own trucks and has to subcontract the delivery of its clients’
goods, is immaterial. As long as an entity holds itself to the public for the transport
of goods as a business, it is considered a common carrier regardless of whether it
owns the vehicle used or has to actually hire one. 41
For all other cases - such as theft or robbery – a common carrier is presumed to
have been at fault or to have acted negligently, unless it can prove that it
observed extraordinary diligence.43
In the present case, the shipper, Sony, engaged the services of TMBI, a common
carrier, to facilitate the release of its shipment and deliver the goods to its
warehouse. In turn, TMBI subcontracted a portion of its obligation – the delivery of
the cargo – to another common carrier, BMT.
Despite the subcontract, TMBI remained responsible for the cargo. Under Article
1736, a common carrier’s extraordinary responsibility over the shipper’s goods lasts
from the time these goods are unconditionally placed in the possession of, and
received by, the carrier for transportation, until they are delivered, actually or
constructively, by the carrier to the consignee. 48
That the cargo disappeared during transit while under the custody of BMT – TMBI’s
subcontractor – did not diminish nor terminate TMBI’s responsibility over the cargo.
Article 1735 of the Civil Code presumes that it was at fault.
The cargo was lost after its transfer to BMT' s custody based on its contract of
carriage with TMBI. Following Article 1735, BMT is presumed to be at fault. Since
BMT failed to prove that it observed extraordinary diligence in the performance of
its obligation to TMBI, it is liable to TMBI for breach of their contract of carriage.
In these lights, TMBI is liable to Sony (subrogated by Mitsui) for breaching the
contract of carriage. In tum, TMBI is entitled to reimbursement from BMT due to the
latter's own breach of its contract of carriage with TMBI. The proverbial buck stops
with BMT who may either: (a) absorb the loss, or (b) proceed after its missing driver,
the suspected culprit, pursuant to Article 2181