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TORRES-MADRID BROKERAGE v. FEB MITSUI MARINE INSURANCE CO.

FACTS:

Sony Philippines engaged the services of Torres-Madrid Brokerage, Inc. (TMBI) to transport a shipment of electronic goods from the Port of Manila to its warehouse in Binan, Laguna. TMBI subcontracted the services of BMT Trucking Services (BMT) to transport the shipment using four BMT trucks. However, one of the trucks driven by Lapesura went missing. TMBI and BMT reported the incident to the police and the National Bureau of Investigation (NBI).

TMBI notified Sony of the loss and sent a demand letter to BMT for payment of the lost shipment. Meanwhile, Sony filed an insurance claim with FEB Mitsui Marine Insurance Co., Inc. (Mitsui), the insurer of the goods. Mitsui paid Sony the value of the lost goods and was subrogated to Sony's rights.

Mitsui sent TMBI a demand letter for payment of the lost goods, but TMBI refused to pay. As a result, Mitsui filed a complaint against TMBI. TMBI impleaded BMT as a third-party defendant and claimed that BMT's negligence was the proximate cause of the loss.

The trial court found TMBI and BMT jointly and solidarily liable to pay Mitsui damages for the lost goods. TMBI and BMT appealed the decision, but the Court of Appeals affirmed the trial court's ruling.

TMBI argued that the hijacking was a fortuitous event and that it was not a common carrier. BMT claimed that it observed the required standard of care and that TMBI was at fault for failing to send a representative to accompany the shipment. Mitsui countered that TMBI was liable for breach of contract and negligence in handling the cargo.

TMBI filed a petition for review on certiorari challenging the Court of Appeals' decision.

ISSUES:

  1. Whether or not TMBI can be considered a common carrier.

  2. Whether or not TMBI can be held liable for the loss, destruction, or deterioration of the goods it transports.

  3. Whether TMBI and BMT are solidarity liable to Mitsui for the loss as joint tortfeasors.

  4. Whether BMT is directly liable to Sony/Mitsui for the loss of the cargo.

RULING:

  1. TMBI is considered a common carrier. A customs broker, such as TMBI, can still be considered a common carrier if it also undertakes to deliver the goods for its customers. The law does not distinguish between one whose principal business activity is the carrying of goods and one who undertakes this task only as an ancillary activity. TMBI's customs brokerage services, including the transport and delivery of the cargo, are an integral part of its services. Hence, TMBI is considered a common carrier.

  2. TMBI can be held liable for the loss, destruction, or deterioration of the goods it transports, unless it falls under the exemptions provided by law. The theft or robbery of the goods is not considered a fortuitous event or a force majeure. A common carrier is presumed to have been at fault or acted negligently in such cases, unless it can prove that it observed extraordinary diligence. A stipulation diminishing or dispensing with the common carrier's liability for acts committed by thieves or robbers who do not act with grave or irresistible threat, violence, or force is void. In this case, TMBI failed to prove that it exercised extraordinary diligence, and its argument that the hijacking was attended by force or intimidation is untenable. Therefore, TMBI can be held liable for the loss of the goods.

  3. TMBI and BMT are not solidarity liable to Mitsui for the loss as joint tortfeasors. TMBI's liability stems from a breach of contract, not from a quasi-delict. The contractual tie between TMBI and Mitsui precludes the application of Article 2194 of the Civil Code, which provides for solidarity liability in quasi-delict cases.

  4. BMT is not directly liable to Sony/Mitsui for the loss of the cargo. There is no direct contractual relationship between Sony/Mitsui and BMT. If at all, Sony/Mitsui's cause of action against BMT could only arise from quasi-delict. However, Mitsui did not sue BMT and did not prove any negligence on its part. Therefore, there is no basis to hold BMT directly liable to Mitsui for quasi-delict.

PRINCIPLES:

  • A customs broker can be considered a common carrier if it also undertakes to deliver the goods for its customers.

  • A common carrier is liable for the loss, destruction, or deterioration of the goods it transports, unless it falls under the exemptions provided by law.

  • The theft or robbery of goods is not considered a fortuitous event or force majeure.

  • A common carrier is presumed to have been at fault or acted negligently in cases of theft or robbery, unless it can prove that it observed extraordinary diligence.

  • A stipulation diminishing or dispensing with a common carrier's liability for acts committed by thieves or robbers who do not act with grave or irresistible threat, violence, or force is void.

  • Failure to prove the exercise of extraordinary diligence carries with it the presumption of fault or negligence.

  • Solidarity liability under Article 2194 of the Civil Code applies to persons who are liable for quasi-delict, not to those liable for breach of contract.

  • In an action for breach of contract (culpa contractual), the plaintiff only needs to establish the existence of the contract and the obligor's failure to perform the obligation. It is not necessary to prove fault or negligence because the common carrier is presumed negligent under Article 1735. The common carrier can only free itself from liability by proving extraordinary diligence.

  • In an action for quasi-delict (culpa aquiliana), the plaintiff must establish the defendant's fault or negligence. The defendant may absolve itself by proving the diligence of a good father of a family to prevent the damage.

  • A subcontractor in a contract of carriage is liable for breach of its contract with the main carrier if it fails to prove extraordinary diligence. The main carrier, in turn, is liable to the subrogated insurer for breaching the contract of carriage.