National Trucking and Forwarding Corp. v. Lorenzo Shipping Corp.
REITERATIONFacts
The Antecedents: The Republic of the Philippines, through the Department of Health (DOH), and CARE entered into an agreement for the donation and distribution of non-fat dried milk. The DOH contracted petitioner National Trucking and Forwarding Corporation (NTFC) for carriage, and NTFC, in turn, contracted respondent Lorenzo Shipping Corporation (LSC) to ship 4,868 bags of non-fat dried milk from September to December 1988. The consignee was NTFC's branch supervisor in Zamboanga City, Abdurahman Jama. Upon arrival, LSC's agent delivered the goods to NTFC's warehouse. LSC's agents requested the original bills of lading from Abdurahman, who presented certified true copies. After delivery, Abdurahman or his subordinates signed delivery receipts. NTFC claimed it did not receive the goods and filed a formal claim. LSC responded that the cargo was delivered to Abdurahman Jama. Abdurahman later resigned. Procedural History: The DOH, CARE, and NTFC filed an action for breach of contract of carriage against LSC. The Regional Trial Court (RTC) of Manila dismissed the complaint and ordered the plaintiffs to pay LSC actual damages and attorney's fees. NTFC appealed to the Court of Appeals (CA), which affirmed the RTC decision in toto. NTFC then filed a petition for review on certiorari with the Supreme Court. The Petition: NTFC assigned errors concerning the CA's failure to apply the standard of extraordinary diligence for common carriers and the sustaining of the award of damages and attorney's fees to LSC.
Issue(s)
Whether respondent LSC is presumed at fault or negligent as a common carrier for the loss or deterioration of the goods. Whether damages and attorney's fees are due to respondent LSC.
Ruling
The Supreme Court ruled in favor of the respondent, Lorenzo Shipping Corporation (LSC). The Court affirmed the Court of Appeals' decision in dismissing NTFC's complaint but deleted the award of actual damages and attorney's fees to LSC. The petition was partially granted.
Ratio Decidendi
On the issue of presumption of fault or negligence: The Court held that Article 1733 of the Civil Code mandates common carriers to observe extraordinary diligence. In case of loss of goods, a common carrier is presumed negligent, as per Article 1735. However, this presumption can be overturned by competent evidence proving the exercise of extraordinary diligence. In this case, LSC adequately proved its exercise of extraordinary diligence. LSC's agents demanded certified true copies of the bills of lading and obtained signed delivery receipts from the consignee or his authorized subordinates. This practice aligns with Article 353 of the Code of Commerce, which states that a receipt for goods delivered, in lieu of the original bill of lading, produces the same effects as the return of the bill of lading. The Court found that the practice of accepting signed delivery receipts, even if signed by subordinates authorized by the consignee, constituted sufficient compliance with the requirements for delivery. Furthermore, the Court noted NTFC's lack of effort to disapprove Abdurahman's resignation until after the investigation, suggesting that NTFC might be attempting to shift responsibility to LSC for potential negligence of its own employee. On the issue of damages and attorney's fees: The Court agreed with NTFC that there was no basis for the award of actual damages and attorney's fees to LSC. The Court reiterated that an adverse decision does not automatically warrant attorney's fees. It found no ill motive on NTFC's part in filing the suit, considering it was compelled to protect the government's credibility with international organizations. The Court also noted that LSC failed to show proof of actual pecuniary loss, thus, no actual damages were due. The award of attorney's fees and actual damages to LSC was deleted.
Main Doctrine
A common carrier is presumed negligent in case of loss or damage to goods, but this presumption can be overturned by competent evidence showing the exercise of extraordinary diligence. The surrender of the original bill of lading is not a condition precedent for discharge of obligation; a signed delivery receipt suffices, especially when the consignee cannot produce the original bill of lading.