A.F. Sanchez Brokerage Inc. v. Court of Appeals
REITERATIONFacts
The Antecedents: Wyeth-Pharma GMBH shipped oral contraceptives from Germany to Manila, consigned to Wyeth-Suaco Laboratories, Inc. The shipment was insured against all risks by FGU Insurance Corporation (FGU Insurance). Upon arrival, the shipment was discharged "without exception" and delivered to the warehouse of Philippine Skylanders, Inc. (PSI) for safekeeping. Wyeth-Suaco engaged A.F. Sanchez Brokerage, Inc. (Sanchez Brokerage) as its customs broker to secure the release of the cargoes. Sanchez Brokerage paid the storage fees and acknowledged receipt of the cargoes in "good condition." The cargoes were then stripped from their containers and loaded into transport vehicles hired by Sanchez Brokerage. Elite Adjusters and Surveyors Inc. (Elite Surveyors), engaged by FGU Insurance, witnessed the release. The cargoes were delivered to Hizon Laboratories Inc. for quality control. Upon inspection, it was discovered that 44 cartons were in "bad order," noted on the delivery receipt. A survey report indicated these cartons were "wetted." Hizon Laboratories issued a Destruction Report confirming damage to 41 cartons due to water and foul smell. Wyeth-Suaco rejected these cartons and demanded payment from Sanchez Brokerage for its loss. Sanchez Brokerage refused. Wyeth-Suaco filed an insurance claim with FGU Insurance, which paid the amount of P181,431.49. Wyeth-Suaco issued a Subrogation Receipt in favor of FGU Insurance. FGU Insurance then demanded payment from Sanchez Brokerage. Procedural History: FGU Insurance filed a complaint for damages against Sanchez Brokerage before the Regional Trial Court (RTC) of Makati City. The RTC dismissed the complaint, finding the survey report bereft of evidentiary support. On appeal, the Court of Appeals (CA) reversed the RTC decision, holding that Sanchez Brokerage, by undertaking the delivery of goods, was a common carrier under Article 1732 of the Civil Code. The CA found Sanchez Brokerage presumed negligent and burdened it with proving extraordinary diligence, which it failed to do. The CA ordered Sanchez Brokerage to pay FGU Insurance the principal amount, interest, and attorney's fees. Sanchez Brokerage's motion for reconsideration was denied. The Petition: Sanchez Brokerage filed a petition for certiorari before the Supreme Court, asserting that the CA committed grave abuse of discretion in finding it a common carrier. FGU Insurance argued that certiorari was not the proper remedy and that Sanchez Brokerage, as a common carrier, failed to overcome the presumption of negligence.
Issue(s)
Whether the petition for certiorari was the proper remedy. Whether Sanchez Brokerage, a customs broker, is also a common carrier under Article 1732 of the Civil Code. Whether Sanchez Brokerage exercised extraordinary diligence in the transport of the goods.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals. The petition for certiorari was dismissed for being the improper remedy, as it sought to correct an error of judgment, not jurisdiction. Procedural technicalities aside, the Court found that Sanchez Brokerage, by undertaking the delivery of goods for compensation, qualified as a common carrier. As such, it was presumed negligent for the damage to the cargo unless it could prove it exercised extraordinary diligence, which it failed to do. The Court ruled that Sanchez Brokerage failed to rebut the presumption of negligence arising from the damage to the goods it transported.
Ratio Decidendi
On the propriety of the remedy: The Court held that a petition for certiorari is not a substitute for a lost appeal. Rule 45 clearly states that decisions of the Court of Appeals may be appealed to the Supreme Court by filing a petition for review. The petitioner's filing of a petition for certiorari after failing to appeal within the reglementary period was deemed an improper remedy. Furthermore, the petitioner alleged an error of judgment, not an error of jurisdiction or grave abuse of discretion, which is the sole office of a writ of certiorari. The supervisory jurisdiction of the Court to issue a certiorari writ cannot be exercised to review the intrinsic correctness of a judgment upon law or facts. On whether Sanchez Brokerage is a common carrier: The Court affirmed the appellate court's finding that Sanchez Brokerage is a common carrier. Article 1732 of the Civil Code defines common carriers as entities engaged in the business of transporting passengers or goods for compensation, offering their services to the public. The manager of Sanchez Brokerage himself testified that their services include the delivery of goods to the warehouse of the importer. Article 1732 does not distinguish between entities whose principal business is carrying goods and those for whom carrying is an ancillary activity. It suffices that the entity undertakes to deliver goods for pecuniary consideration. Therefore, Sanchez Brokerage's contention that it is merely a customs broker and not a common carrier was found to be without merit. On the exercise of extraordinary diligence: The Court reiterated that common carriers are bound to observe extraordinary diligence in the vigilance over the goods they transport, as mandated by Article 1733 of the Civil Code. In case of loss, destruction, or deterioration, common carriers are presumed to have been at fault or negligent, unless they prove they observed extraordinary diligence (Article 1735). The evidence showed that Sanchez Brokerage received the cargoes in good order and condition from PSI, but upon delivery to Hizon Laboratories, a portion was found in bad order. Sanchez Brokerage failed to rebut this presumption. Its claims that the damage was due to improper packaging or inherent defects were unavailing, as it accepted the cargo without protest or exception, despite the alleged wet condition noted outside the PSI warehouse. The Court found more likely the possibility that the goods were damaged by rainwater during transit, as suggested by the findings of Hizon Laboratories and the testimony of Sanchez himself regarding a similar past incident. Since Sanchez Brokerage failed to prove it exercised extraordinary diligence, its presumed negligence remained unrebutted.
Main Doctrine
A customs broker that undertakes the delivery of goods for pecuniary consideration is considered a common carrier and is thus bound to observe extraordinary diligence in the vigilance over the goods it transports. Failure to prove the observance of such diligence in case of loss, destruction, or deterioration of the goods gives rise to a presumption of fault or negligence.