Asia Lighterage and Shipping, Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: On June 13, 1990, Marubeni American Corporation shipped 3,150 metric tons of wheat from Portland, Oregon, to Manila, consigned to General Milling Corporation. The shipment was insured by Prudential Guarantee and Assurance, Inc. Upon arrival in Manila on July 25, 1990, the cargo was transferred to the custody of petitioner Asia Lighterage and Shipping, Inc. (Asia Lighterage) for delivery to the consignee's warehouse. On August 15, 1990, 900 metric tons were loaded onto barge PSTSI III. The transport was suspended due to a typhoon warning. On August 22, 1990, the barge sought shelter and was tied to other barges. It sustained a hole after hitting an unseen protuberance, causing it to list. A Marine Protest was filed. The barge was refloated, the hole patched with clay and cement, and it was towed to a terminal. On September 5, 1990, while en route to the consignee's wharf, the barge ran aground due to strong current, necessitating the transfer of a portion of the goods to other barges. The next day, September 6, 1990, the towing bits broke, and the barge sank, resulting in the total loss of the remaining cargo. A second Marine Protest was filed. The salvaged cargo was sold for P201,379.75. The consignee claimed from Asia Lighterage and Prudential Guarantee. Prudential Guarantee indemnified the consignee P4,104,654.22 and, as subrogee, sought recovery from Asia Lighterage. Procedural History: The Regional Trial Court (RTC) ruled in favor of Prudential Guarantee, ordering Asia Lighterage to pay P4,104,654.22 with interest and attorney's fees. The Court of Appeals (CA) affirmed with modification, ordering the deduction of the salvage value. The CA denied Asia Lighterage's motion for reconsideration. The Petition: Asia Lighterage filed a petition with the Supreme Court, arguing that it is not a common carrier and that it exercised due diligence, thus should not be liable for the loss of the cargo.
Issue(s)
Whether petitioner Asia Lighterage and Shipping, Inc. is a common carrier. Whether petitioner exercised extraordinary diligence in the care and custody of the consignee's cargo.
Ruling
The Supreme Court denied the petition, affirming the decision of the Court of Appeals. The Court held that Asia Lighterage is a common carrier and failed to exercise extraordinary diligence, making it liable for the loss of the cargo.
Ratio Decidendi
On the issue of whether petitioner is a common carrier: The Court ruled that petitioner is a common carrier. Article 1732 of the Civil Code defines common carriers as entities engaged in transporting passengers or goods for compensation, offering their services to the public. Petitioner's principal business is lighterage and drayage, and it offers its barges to the public for carrying goods by water for compensation. The Court clarified that the definition does not distinguish between principal and ancillary activities, nor between regular and occasional services, nor between a carrier serving the general public and one serving a narrow segment. Therefore, even if petitioner's services were on an irregular basis or to a limited clientele, it still fits the definition of a common carrier. The test is whether the undertaking is part of the business held out to the general public, not the extent of the business transacted. On the issue of whether petitioner exercised extraordinary diligence: The Court upheld the findings of the lower courts that petitioner failed to exercise extraordinary diligence. Common carriers are presumed negligent if goods are lost, destroyed, or deteriorated, and must prove they exercised extraordinary diligence to overcome this presumption, unless the loss falls under the exceptions in Article 1734 of the Civil Code (flood, storm, etc.). In this case, the barge sank due to its towing bits breaking, resulting in total cargo loss. Petitioner claimed the loss was due to a typhoon, but failed to prove it was the proximate and sole cause. Evidence showed the barge had already sustained damage, including a hole, after hitting a sunken object prior to the typhoon. The temporary patch with clay and cement was insufficient. The Court found that proceeding with the voyage despite the damage and the knowledge of an incoming typhoon constituted negligence. The testimony of petitioner's own officers indicated that the sinking occurred after the barge was already in the Pasig River, and the typhoon was not the proximate cause; rather, human negligence intervened.
Main Doctrine
A company engaged in the business of lighterage and drayage, offering its services for compensation, is considered a common carrier under Article 1732 of the Civil Code, regardless of whether its services are offered on an irregular basis or to a limited clientele. Common carriers are presumed negligent in case of loss or damage to goods and must prove they exercised extraordinary diligence to overcome this presumption, with exceptions enumerated in Article 1734 of the Civil Code.