G.R. No. 147079 December 21, 2004
A.F. SANCHEZ BROKERAGE INC., petitioner, vs. THE HON. COURT OF APPEALS and FGU INSURANCE CORPORATION, respondents.

FACTS

Wyeth-Suaco Laboratories imported oral contraceptives, insured with respondent FGU Insurance Corporation. Upon arrival at NAIA, the shipment was stored with Philippine Skylanders, Inc. (PSI). Petitioner A.F. Sanchez Brokerage Inc., engaged as Wyeth-Suaco’s customs broker, secured the cargo’s release. A PSI receipt acknowledged by petitioner’s representative confirmed receipt of the cargo in good condition. Representatives from Elite Surveyors, hired by the insurer, witnessed the release. The cargo was then loaded onto petitioner’s trucks for delivery to Hizon Laboratories for inspection.
Upon delivery at Hizon Laboratories, a joint inspection by Wyeth-Suaco and Elite Surveyors revealed 44 cartons were water-damaged. A survey report noted the cargo was in apparent good condition upon loading at NAIA but was damaged upon delivery, during which slight to heavy rains fell. Wyeth-Suaco rejected the damaged goods. FGU Insurance paid Wyeth-Suaco’s claim and was subrogated to its rights. FGU then sued petitioner for damages after its demand was refused.

ISSUE

Whether petitioner A.F. Sanchez Brokerage Inc. is liable for the damage to the cargo shipped to Wyeth-Suaco.

RULING

Yes, petitioner is liable. The Supreme Court affirmed the Court of Appeals’ finding that petitioner, in undertaking the transportation and delivery of the cargo from the warehouse to the consignee’s designated site, acted as a common carrier. Article 1732 of the Civil Code defines common carriers as persons or entities engaged in transporting goods for compensation, offering services to the public. Petitioner’s services, which included transporting the goods via its hired trucks as part of its brokerage contract, fell within this definition.
As a common carrier, petitioner was bound to observe extraordinary diligence under Article 1733. Under Article 1735, common carriers are presumed negligent if goods are lost, destroyed, or deteriorated. The burden shifts to the carrier to prove it exercised extraordinary diligence. Here, petitioner received the cargo in good order, as evidenced by the PSI receipt. The damage was discovered upon delivery. Petitioner failed to rebut the presumption of negligence. Its claim of inherent packaging defects was unsubstantiated. The survey report indicated the damage likely occurred during transit in the rainy conditions, for which petitioner provided no evidence of having taken extraordinary precautions. Consequently, petitioner’s presumed negligence stands, making it liable for the damages paid by the insurer.