FACTS:

The Republic of the Philippines, through an agreement with CARE, contracted NTFC to transport donated non-fat dried milk. NTFC then shipped the goods through LSC, with Abdurahman Jama as the consignee. At the port of Zamboanga City, the cargo was delivered to NTFC's warehouse by LSC's agent. The delivery checkers requested Abdurahman to surrender the original bills of lading, but he only presented certified true copies. NTFC claimed non-delivery of the goods and filed a case against LSC. The RTC ruled in favor of LSC, ordering the plaintiffs to pay damages and attorney's fees. The Court of Appeals affirmed the RTC's decision. NTFC appeals to the Supreme Court, arguing LSC's failure to exercise extraordinary diligence and the baselessness of the damages awarded.

ISSUES:

1. Is respondent presumed at fault or negligent as a common carrier for the loss or deterioration of the goods?

2. Are damages and attorney's fees due to the respondent?

RULING:

1. No, the respondent is not presumed at fault or negligent as a common carrier for the loss or deterioration of the goods. The Court of Appeals did not commit any reversible error in affirming the judgment of the trial court.

2. Yes, damages and attorney's fees are due to the respondent. The trial court correctly ordered the plaintiffs, including petitioner, to pay actual damages in the amount of P50,000.00, and attorney's fees in the amount of P70,000.00, plus costs of suit.

PRINCIPLES:

• Common carriers are required to exercise extraordinary diligence in the carriage of goods.

• In case of loss, destruction, or deterioration of the goods, the common carrier is presumed at fault or negligent, unless it proves that it has observed extraordinary diligence.

• The liability of a common carrier is limited to the actual damages suffered by the plaintiff.

• Attorney's fees may be awarded when the defendant's act or omission compelled the plaintiff to litigate or incur expenses to protect its interest.