Tan v. Great Harvest Enterprises
REITERATIONFacts
The Antecedents: Great Harvest Enterprises, Inc. (Great Harvest) contracted Annie Tan, a common carrier, to transport 430 bags of soya beans valued at P230,000.00. The goods were loaded onto Tan's truck, but her employee, Rannie Sultan Cabugatan, failed to deliver them to the intended consignee, Selecta Feeds, which rejected the shipment. Great Harvest then instructed Cabugatan to deliver the soya beans to its warehouse in Malabon. However, the truck and its cargo never reached the warehouse and were subsequently discovered to have been stolen and cannibalized. Great Harvest subsequently filed a complaint for a sum of money against Tan to recover the value of the lost goods. Procedural History: The Regional Trial Court of Quezon City, in its January 3, 2012 Decision, ruled in favor of Great Harvest, ordering Tan to pay P230,000.00 plus interest and attorney's fees. Tan's motion for reconsideration was denied. She appealed to the Court of Appeals, which affirmed the trial court's decision on March 13, 2015, and denied her subsequent motion for reconsideration on September 15, 2015. The appellate court found that Tan, as a common carrier, failed to exercise the extraordinary diligence required and that the loss was not due to a fortuitous event. The Petition: Annie Tan filed a Petition for Review on Certiorari under Rule 45 of the Rules of Civil Procedure, arguing that the Court of Appeals erred in its findings of fact and law. She contends that her obligation was limited to delivering the soya beans to Selecta Feeds, and that the subsequent instruction to deliver to Great Harvest's warehouse constituted a deviation from the original agreement, thereby relieving her of extraordinary diligence. Tan also claims the loss was due to a fortuitous event (truck hijacking) and that she is not an insurer of the goods. She seeks to be absolved of liability or, in the alternative, for her liability to be limited to P75,000.00.
Issue(s)
Whether petitioner Annie Tan, as a common carrier, should be held liable for the value of the stolen soya beans. Whether the change in delivery instructions constituted a deviation from the contract of carriage. Whether the loss of the goods due to the driver's actions constituted a fortuitous event absolving the common carrier of liability.
Ruling
The Petition is DENIED. Petitioner Annie Tan is directed to pay respondent Great Harvest Enterprises, Inc. the sum of Two Hundred Thirty Thousand Pesos (P230,000.00) with interest at the rate of twelve percent (12%) per annum from June 2, 1994 until June 30, 2013, and at the rate of six percent (6%) per annum from July 1, 2013 until its full satisfaction. She is further directed to pay Fifty Thousand Pesos (P50,000.00) as attorney's fees and the costs of suit.
Ratio Decidendi
On the issue of whether petitioner Annie Tan, as a common carrier, should be held liable for the value of the stolen soya beans: The Supreme Court held that petitioner Annie Tan, as a common carrier, is liable for the value of the stolen soya beans. Article 1733 of the Civil Code mandates common carriers to observe extraordinary diligence in the vigilance over the goods entrusted to their care. This responsibility commences from the time the goods are received until they are delivered to the consignee or the person authorized to receive them. The Court emphasized that common carriers are responsible for the loss, destruction, or deterioration of the goods unless it falls under specific exceptions enumerated in Article 1734 of the Civil Code. In this case, the loss was due to the driver's abscondment, which does not fall under any of the excepted causes. Therefore, Tan, as the common carrier, bears the responsibility for the loss. On the issue of whether the change in delivery instructions constituted a deviation from the contract of carriage: The Supreme Court ruled that there was no deviation from the contract of carriage. The lower courts found, based on the testimonies of witnesses and documentary evidence, that there was a standing agreement between Great Harvest and Tan. This agreement stipulated that in case the consignee rejected the delivery, the goods would be delivered to Great Harvest's nearest warehouse. The Court gave great weight to the trial court's appreciation of witness credibility and found that Tan's claim of deviation was self-serving and contradicted by the evidence. The Court of Appeals also affirmed that this practice was the standard business practice between the parties, dispelling any notion of unauthorized diversion. On the issue of whether the loss of the goods due to the driver's actions constituted a fortuitous event absolving the common carrier of liability: The Supreme Court held that the loss of the soya beans was not a fortuitous event that would absolve Tan of liability. The Court distinguished the present case from De Guzman v. Court of Appeals, where the goods were stolen by robbers using "grave or irresistible threat, violence[,] or force." In De Guzman, such an act was considered a fortuitous event. However, in this case, the loss was not attended by grave or irresistible threat, violence, or force. Instead, it was a consequence of Tan's failure to exercise extraordinary diligence, specifically her neglect in vetting her driver, providing security for the cargo during transit, and failing to insure the shipment's value. The Court of Appeals correctly pointed out that these measures could have prevented the loss or ensured compensation.
Main Doctrine
A common carrier is bound to exercise extraordinary diligence over the goods entrusted to its care. The loss of goods due to the driver's abscondment, without proof of any of the exceptions under Article 1734 of the Civil Code, makes the common carrier liable for the value of the lost goods.