Title
Canada vs. All Commodities Marketing Corp.
Case
G.R. No. 146141
Decision Date
Oct 17, 2008
A trucking contractor failed to deliver sugar, claiming fortuitous event; held liable for cargo loss, awarded temperate damages, exemplary damages, and attorney’s fees.
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Case Digest (G.R. No. 146141)

Facts:

Parties Involved and Business Context
Petitioner Ernesto P. Canada operates Hi-Ball Freight Services, a business providing trucking and hauling services. Respondent All Commodities Marketing Corporation is a long-standing client of the petitioner.

Contractual Agreement
On October 27, 1986, the respondent contracted the petitioner to haul and deliver 1,000 sacks of sugar from Pier 18, North Harbor in Tondo, Manila, to the Pepsi Cola Plant in Muntinlupa, Metro Manila. The transaction was covered by Way Bills/Delivery Receipts issued by All Star Transport, Inc., but signed by the petitioner's driver.

Incident of Non-Delivery
The petitioner loaded the sugar into his two trucks, but the cargo was never delivered to the destination. The drivers and helpers disappeared with the goods. The respondent demanded payment for the lost sugar, but the petitioner refused, leading the respondent to file a complaint in the Regional Trial Court (RTC) of Makati.

Petitioner’s Defense
In his answer, the petitioner admitted the contract but denied the non-delivery, claiming the cargo reached the Pepsi Cola Plant. He also argued that the loss was due to the respondent's negligence or a fortuitous event.

RTC Decision
The RTC ruled in favor of the respondent, ordering the petitioner to pay the value of the lost sugar (P350,000.00), additional actual losses (P50,000.00), exemplary damages (P50,000.00), and attorney’s fees.

Appeal to the CA
The petitioner appealed to the Court of Appeals (CA), introducing a new argument that Hi-Ball Freight Services was not the common carrier and thus not liable. The CA rejected this new theory, affirmed the RTC’s ruling, and dismissed the petitioner’s motion for reconsideration.

Issue:

  1. Is the petitioner estopped from raising a new theory (denial of the contract) on appeal?
  2. Is the petitioner liable for the loss of the cargo?
  3. Are the awards of actual damages, exemplary damages, and attorney’s fees justified?
  4. Should the petitioner’s counterclaim be granted?

Ruling:

The Supreme Court denied the petition and affirmed the CA’s decision with modifications. The award of actual damages was deleted and replaced with temperate damages of P250,000.00. The awards of exemplary damages (P50,000.00) and attorney’s fees (P50,000.00) were upheld. The petitioner’s counterclaim was dismissed.

Ratio:

  1. Estoppel from Raising New Theory on Appeal
    A party cannot raise a new issue on appeal if it was not presented before the lower court. This rule ensures fairness and due process, as the adverse party would have no opportunity to counter the new argument. The petitioner’s denial of the contract was raised for the first time on appeal and was thus estopped.

  2. Liability for Loss of Cargo
    The petitioner admitted the contract and the employment of the drivers and helpers who disappeared with the goods. His admission conclusively established his liability. The defense of fortuitous event was unsubstantiated, and the loss was due to the petitioner’s negligence.

  3. Award of Damages
    The Court found insufficient evidence to support the award of actual damages. However, temperate damages were awarded because the respondent clearly suffered some pecuniary loss. The exemplary damages and attorney’s fees were upheld as justified under the circumstances.

  4. Dismissal of Counterclaim
    The petitioner’s counterclaim lacked merit, and the Court agreed with the CA’s dismissal of this claim.


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