G.R. No. 146141, October 17, 2008
ERNESTO CANADA, doing business under the name and style of HI-BALL FREIGHT SERVICES, petitioner, vs. ALL COMMODITIES MARKETING CORPORATION, respondent.

FACTS

Petitioner Ernesto P. Canada, doing business as Hi-Ball Freight Services, was engaged in providing trucking and hauling services. Respondent All Commodities Marketing Corporation, a long-time client, contracted petitioner’s services on October 27, 1986, to haul and deliver 1,000 sacks of sugar from Pier 18, North Harbor, Manila, to the Pepsi Cola Plant in Muntinlupa. The transaction was covered by Way Bills/Delivery Receipts of All Star Transport, Inc., signed by petitioner’s driver. Petitioner loaded the sugar onto his two trucks, but the cargo was never delivered, and the drivers and helpers disappeared. Respondent demanded payment for the value of the lost sugar and, upon petitioner’s refusal, filed a complaint in the RTC of Makati. In his Answer, petitioner admitted the contract but denied non-delivery, claiming the goods were delivered and that any loss was due to respondent’s negligence or a fortuitous event. He also counterclaimed for the value of a truck allegedly seized by respondent. The RTC ruled in favor of respondent, ordering petitioner to pay actual, exemplary damages, and attorney’s fees. On appeal to the CA, petitioner raised a new theory—that he was not the common carrier and that All Star was responsible. The CA affirmed the RTC, ruling petitioner was estopped from raising a new issue on appeal and rejecting the defense of fortuitous event. The CA also denied petitioner’s motion for reconsideration.

ISSUE

The primary issue is whether petitioner can be held liable for the loss of the sugar cargo, considering his defenses, including a new theory raised on appeal denying the contract of carriage and asserting fortuitous event, and the propriety of the damages awarded.

RULING

The Supreme Court DENIED the petition but MODIFIED the damages awarded. The Court held that petitioner is estopped from raising the new theory that he was not the common carrier, as it was not raised before the RTC and doing so would violate due process. The Court noted petitioner’s judicial admissions in his Answer and during trial, where he admitted the contract and that the drivers were his employees, making such admissions conclusive under Section 4, Rule 129 of the Rules of Court. The defense of fortuitous event was rejected for lack of evidence, with the Court finding the loss was due to petitioner’s negligence. However, the award of actual damages (₱350,000 for the sugar and ₱50,000 for other losses) was deleted due to insufficient proof. Instead, temperate damages of ₱250,000 were awarded, as some pecuniary loss was suffered but the amount could not be proven with certainty. The award of exemplary damages (₱50,000) was upheld, as temperate damages were awarded. Attorney’s fees were reduced to ₱50,000. Legal interest of 6% per annum from the RTC decision’s promulgation and 12% per annum from the finality of the Supreme Court’s decision until full satisfaction was imposed. The dismissal of petitioner’s counterclaim was sustained for lack of merit.