Title
Ganzon vs. Court of Appeals
Case
G.R. No. L-48757
Decision Date
May 30, 1988
A carrier was held liable for breach of contract after municipal officials illegally ordered the dumping of scrap iron, rejecting claims of fortuitous event.

Case Summary (G.R. No. 162267)

Petitioner, Respondent, and Procedural History

Petitioner: Mauro B. Ganzon (common carrier)
Private Respondent: Gelacio E. Tumambing (shipper)
Lower Courts: Court of First Instance of Manila (judgment for damages in favor of Tumambing); Court of Appeals (affirmed liability and awarded P5,895.00 actual, P5,000.00 exemplary damages, plus P2,000.00 attorney’s fees)
Supreme Court Decision Date: May 30, 1988 (under the 1973 Philippine Constitution)

Key Dates

– November 28, 1956: Service contract executed.
– December 1, 1956: Delivery of scrap to LCT “Batman” and commencement of loading.
– December 1, 1956: Mayor Advincula’s armed demand and assault on Tumambing.
– December 4, 1956: Acting Mayor Rub’s order to dump scrap into the sea and subsequent municipal seizure.

Applicable Law

– Civil Code of the Philippines (1950), Articles 1733-1736 on common carriers’ extraordinary responsibility and exceptions.
– Code of Commerce (1916), Articles 361-362 on carrier’s risk and diligence.
– Constitution of the Republic of the Philippines (1973), as in force at decision.

Contract of Carriage and Perfection

Upon unconditional delivery on December 1, 1956, and physical receipt by petitioner’s crew, the contract of carriage was perfected. Under Civil Code Art. 1736, extraordinary responsibility commenced from such receipt until delivery to the consignee.

Presumption of Fault and Burden of Proof

Civil Code Art. 1735 presumes carrier fault where goods are lost or deteriorated, unless the carrier proves observance of extraordinary diligence (Art. 1733) or that the loss resulted from enumerated excepted causes (Art. 1734): (1) natural calamities; (2) act of public enemy; (3) shipper’s act; (4) inherent defect in goods; (5) order of competent public authority.

Intervention by Municipal Officials

Loading was first interrupted by Mayor Advincula’s armed shakedown attempt. After resumption, Acting Mayor Rub, without proving lawful authority, ordered the crew to dump scrap into the sea. He later issued a receipt acknowledging municipal custody of the remaining cargo.

Court of Appeals’ Findings on Public Authority

The appellate court held that Acting Mayor Rub lacked lawful power to order dumping or seizure under legal process. The order formed part of extortionary conduct by municipal officers, not a valid exercise of public authority. Consequently, the event did not qualify as an excepted cause under Civil Code Art. 1734(5).

Supreme Court Ruling

The Supreme Court affirmed the Court of Appeals’ decision:
– Liability attached from receipt of the scrap.
– Petitioner failed to pro

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