Case Summary (G.R. No. 219698)
Key Dates and Transaction Details
Cargo shipped and arrived on August 28, 2001. Marine Policy No. MN-00105/2001 insured shipment against All Risks. Cargo loaded on twelve Loadmasters trucks; six destined for Balagtas, Bulacan and six for Lawang Bato, Valenzuela City. One truck (Isuzu Plate No. NSD-117) en route to Balagtas failed to deliver its cargo and was recovered without the goods.
Monetary Claim and Subrogation
Columbia filed an insurance claim; R&B Insurance paid indemnity after adjustment in the amount of P1,896,789.62 (initial claim P1,903,335.39). R&B Insurance sued Loadmasters and Glodel seeking reimbursement as subrogee of Columbia under Article 2207 of the Civil Code for the indemnity it paid.
Procedural History
Regional Trial Court (Branch 14, Manila) rendered judgment on November 19, 2003, holding Glodel liable to R&B Insurance for P1,896,789.62, and dismissed Loadmasters’ counterclaim. Both R&B Insurance and Glodel appealed. The Court of Appeals (August 24, 2007) held Loadmasters liable to Glodel for the same indemnity amount on the theory that Loadmasters was Glodel’s agent. Loadmasters filed a petition for review on certiorari raising two principal issues: (1) whether Loadmasters can be held liable to Glodel despite the absence of a cross-claim by Glodel against Loadmasters; and (2) whether Loadmasters was legally an agent of Glodel.
Issues Presented to the Supreme Court
- Whether Loadmasters may be held liable to Glodel despite Glodel’s failure to file a cross-claim (Rule 9, Sec. 2 issue).
- Whether Loadmasters was an agent of Glodel under the elements of agency.
Subrogation Principle Applied
The Court reiterates the legal doctrine of subrogation: an insurer that pays indemnity is subrogated to the insured’s rights against the wrongdoer to the extent of the amount paid (Article 2207, Civil Code). Accordingly, R&B Insurance, as subrogee of Columbia, acquired Columbia’s right to seek reimbursement from those legally liable for the loss.
Classification of Parties as Common Carriers (Article 1732)
The Court analyzed whether Loadmasters and Glodel are common carriers. Article 1732 defines common carriers as entities engaged in transporting goods for compensation and offering services to the public. Loadmasters admitted it was engaged in trucking services and thus a common carrier. Glodel, a customs broker whose business includes transportation of goods, was likewise treated as a common carrier consistent with precedent recognizing customs brokers as common carriers where transport is integral to their business.
Standard of Care: Extraordinary Diligence (Article 1733)
Because both parties are common carriers, they owe the high standard of extraordinary diligence in the custody and delivery of goods. Extraordinary diligence is an exacting standard—care beyond ordinary prudence—that common carriers must exercise from the time they unconditionally receive goods until delivery to the consignee or rightful recipient.
Presumption of Fault and Rebuttal
Under the law applicable to common carriers, loss of goods gives rise to a presumption of fault or negligence on the part of the carrier. This presumption is rebuttable only by proof that the carrier exercised extraordinary diligence. The Court found that neither Loadmasters nor Glodel produced convincing proof of such extraordinary care.
Quasi-Delict Liability and Employer Responsibility (Articles 2176 and 2180)
The Court applied the law on quasi-delict (Article 2176) and the employer’s liability for acts of employees (Article 2180). Even absent a direct contractual relation between the consignee and Loadmasters, a cause of action for tort may arise from negligent handling or transportation. Loadmasters’ drivers and helpers were instrumental in the incident resulting in loss; as employer, Loadmasters bore a presumption that it failed in selection or supervision (culpa in eligendo or culpa in vigilando) and failed to overcome that presumption.
Glodel’s Liability for Failure to Exercise Diligence
Glodel was held liable for failing to exercise the extraordinary diligence required of a common carrier in entrusting the goods to Loadmasters without adequate precautions (for example, providing escorts). Glodel’s defense of force majeure was rejected.
Rejection of Agency Relationship (Article 1868)
Contrary to the Court of Appeals’ characterization, the Supreme Court concluded there was no principal-agent relationship between Glodel and Loadmasters. The Court reviewed the elements of agency under Article 1868: mutual consent to the agency relationship, the agent acting in representation of the principal, performance of juridical acts in relation to third persons, and acting within authorized scope. The record showed no mutual intent: Loadmasters never represented Glodel nor was it authorized to represent Glodel. Thus the agency finding by the CA was erroneous.
Joint and Solidary Liability (Article 2194 and Relevant Doctrine)
Notwithstanding the absence of agency, the Court
Case Syllabus (G.R. No. 219698)
Procedural History
- Petition for review on certiorari under Rule 45 filed by Loadmasters Customs Services, Inc. (Loadmasters) assailing the August 24, 2007 Decision of the Court of Appeals (CA) in CA-G.R. CV No. 82822 entitled "R&B Insurance Corporation v. Glodel Brokerage Corporation and Loadmasters Customs Services, Inc."
- RTC, Branch 14, Manila (Civil Case No. 02-103040) rendered a decision on November 19, 2003, holding Glodel Brokerage Corporation (Glodel) liable for damages and dismissing Loadmasters' counterclaim for damages and attorney's fees.
- CA on August 24, 2007 partly granted appeal and held Loadmasters likewise liable to Glodel in the amount of P1,896,789.62 representing the insurance indemnity Glodel had been held liable to pay R&B Insurance Corporation (R&B Insurance).
- Present petition raises issues whether Loadmasters can be held liable to Glodel despite Glodel’s failure to file a cross-claim, and whether Loadmasters can be considered an agent of Glodel under the established facts.
Facts
- On August 28, 2001, R&B Insurance issued Marine Policy No. MN-00105/2001 in favor of Columbia Wire and Cable Corporation (Columbia) to insure shipment of 132 bundles of electric copper cathodes against All Risks.
- The cargoes were shipped on board the vessel "Richard Rey" from Isabela, Leyte to Pier 10, North Harbor, Manila, arriving August 28, 2001.
- Columbia engaged Glodel for release/withdrawal from the pier and delivery to its warehouses/plants. Glodel engaged Loadmasters for use of its delivery trucks to transport the cargoes to Columbia's warehouses/plants in Bulacan and Valenzuela City.
- Goods were loaded on twelve (12) trucks owned by Loadmasters, driven by its employed drivers and accompanied by its employed truck helpers.
- Six (6) truckloads destined for Lawang Bato, Valenzuela City were duly delivered. Of the six (6) truckloads for Balagtas, Bulacan, only five (5) reached destination. One (1) truck with 11 bundles or 232 pieces of copper cathodes failed to deliver its cargo.
- The missing truck, an Isuzu with Plate No. NSD-117, was later recovered but without the copper cathodes.
- Columbia filed claim with R&B Insurance for P1,903,335.39; after investigation, R&B Insurance paid Columbia P1,896,789.62 as insurance indemnity.
- R&B Insurance filed complaint for damages against Loadmasters and Glodel seeking reimbursement of the amount paid to Columbia, asserting subrogation to Columbia's rights.
Issues Presented on Petition
- Whether petitioner Loadmasters can be held liable to respondent Glodel despite Glodel not filing a cross-claim against Loadmasters.
- Whether, under the established and undisputed facts, Loadmasters can be legally considered an agent of Glodel.
Positions of the Parties (as presented in the record)
- Loadmasters:
- Denies being an agent of Glodel, asserting it never represented Glodel in dealings with the consignee.
- Argues Glodel has no recourse against it because Glodel failed to file a cross-claim pursuant to Section 2, Rule 9 of the 1997 Rules of Civil Procedure.
- Glodel:
- Asserts Loadmasters was grossly negligent in transportation and is liable under its cross-claim.
- Contends it can file the cross-claim even for the first time on appeal because no rule prohibits it.
- Characterizes its relationship with Loadmasters as a contract of "charter" where transporter is hired for a specific delivery job, invoking ordinary diligence standard.
- R&B Insurance:
- Contends Glodel should be deemed to have interposed a cross-claim because it was not prevented from presenting evidence against Loadmasters.
- Asserts a contractual agency existed between Loadmasters and Glodel.
Rulings Below — RTC and CA (dispositive excerpts)
- RTC (November 19, 2003):
- Held Glodel liable to R&B Insurance and ordered payment of P1,896,789.62 as actual and compensatory damages with interest, attorney's fees (10% of principal plus P1,500.00 per appearance) and litigation expenses of P22,427.18.
- Dismissed Loadmasters' counterclaim; costs against Glodel.
- CA (August 24, 2007):
- Found Loadmasters an agent of Glodel and held Loadmasters liable to Glodel in the amount of P1,896,789.62 representing the insurance indemnity Glodel had been held liable to R&B Insurance.
- Dismissed Glodel's appeal to be absolved from any liability.
Legal Doctrines and Statutory Provisions Applied
- Subrogation (Article 2207, Civil Code):
- R&B Insurance, having indemnified Columbia, is subrogated to Columbia's rights to recover from the party legally liable for the loss to the extent of the indemnity paid.
- Definition of Common Carrier (Article 1732, Civil Code):
- Persons/corporations engaged in business of carrying goods for compensation, offering services to the public.
- Loadmasters admitted it is a common carrier; Glodel, engaged in customs brokering with transport integral to its business, is likewise regarded as a common carrier per Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc.
- Standard of Diligence (Article 1733, Civil Code):
- Common carriers must observe extraordinary diligence in vigilance over goods from receipt to delivery; extraordinary diligence defined as extreme care observed by persons of unusual prudence and circumspection.
- Presumption of fault arises upon loss of goods