G.R. No. 146141 - Canada vs. All Commodities Marketing Corp.

Petitioner Ernesto P. Canada, doing business as Hi-Ball Freight Services, was engaged in providing trucking and hauling services.

On October 27, 1986, respondent All Commodities Marketing Corporation contracted petitioner’s services to haul and deliver one thousand (1,000) sacks of sugar from Pier 18, North Harbor in Tondo, Manila to the Pepsi Cola Plant in Muntinlupa City.

The transaction was documented with Way Bills/Delivery Receipt Nos. 5340 and 5341 issued by All Star Transport, Inc., with the documents being signed by petitioner’s driver.

Although the agreement required the cargo to be delivered to its destination, the goods were never received at the Pepsi Cola Plant as the drivers and their helpers vanished.

Respondent, upon not receiving the sugar, demanded payment equivalent to its value, a demand which petitioner did not satisfy.

Consequently, respondent filed a complaint in the Regional Trial Court (RTC) of Makati (Civil Case No. 18826) seeking recovery of the lost sugar’s value along with other damages.

In the RTC proceedings, petitioner acknowledged the contract with respondent but claimed that the cargo had been delivered to the destination on the said date.

He argued that the loss of the goods was attributable either to respondent’s negligence or to a fortuitous event over which he had no control.

Petitioner also asserted a counterclaim for P350,000.00, alleging that respondent had seized one of his trucks.

The RTC rendered judgment in favor of respondent, ordering petitioner to pay a sum representing the lost sugar’s value, additional amounts for actual losses (unearned income, cost of money, and opportunity lost), exemplary damages, and legal costs.

On appeal before the Court of Appeals (CA), petitioner introduced a new theory by denying his carriage contract with respondent and shifting liability to All Star Transport, despite having previously admitted the contract in the trial court.

The CA rejected this new defense, holding that petitioner was estopped from changing his legal theory on appeal because the issue had not been raised before the lower court.

The CA affirmed the RTC’s decision with modifications: actual damages for the lost sugar and additional losses were deleted due to insufficient evidence, and temperate damages amounting to P250,000.00 were substituted.

The CA also upheld the award of P50,000.00 as exemplary damages and fixed the attorney’s fees at P50,000.00.

Petitioner’s counterclaim was dismissed for lack of merit, and his attempt to later deny the existence of the contractual relationship was not entertained.

Whether petitioner’s newly raised defense – denying the contractual relationship with respondent and alleging that he merely acted on behalf of All Star Transport – can be entertained on appeal.
Whether the defense based on the occurrence of a fortuitous event can exempt petitioner from liability for the non-delivery of the sugar.
Whether the lower courts erred in accepting petitioner’s initial admissions regarding the contract with respondent and, subsequently, rejecting his change in stance on appeal.
Whether the awarding of actual damages for the loss of the sugar was properly supported by evidence, or if temperate damages should replace it.
Whether the dismissal of petitioner’s counterclaim for the alleged value of the seized truck was justified.