Case Summary (G.R. No. 122947)
Petitioner
Annie Tan operated the hauling truck into which the 430 bags of soya beans were loaded on February 3, 1994. After delivery to Selecta Feeds was rejected, her employee delivered the goods on instructions that allegedly were given by Great Harvest to return the shipment to Great Harvest’s warehouse in Malabon. The truck and cargo did not reach that warehouse. Tan reported the truck missing to police and the NBI; the truck was later found in Cavite stripped of its cargo, and Tan expended substantial sums to repair it. She filed a private complaint against Cabugatan and Karamihan and defended in the civil action on various grounds, including that she had merely accommodated Great Harvest and that any deviation from the original unloading point released her from carrier liability.
Respondent
Great Harvest Enterprises, Inc. hired Tan to transport the soya beans, sent demand letters (March 2 and April 26, 1994) after the goods went missing, and filed a civil Complaint for sum of money on June 2, 1994 claiming P230,000.00—the declared value of the 430 bags. Great Harvest asserted an existing verbal hauling arrangement with Tan and maintained that the standing practice when a consignee rejected goods was to return them to respondent’s nearest warehouse.
Key Dates and Procedural Milestones
- February 3, 1994: Goods loaded into Tan’s truck and delivered to Selecta Feeds; consignee rejected the shipment.
- February 7–19, 1994: Respondent inquired; truck reported missing; on February 19 the NBI located the truck in Cavite stripped of cargo.
- June 2, 1994: Great Harvest filed the civil Complaint.
- Criminal proceedings against Karamihan and Cabugatan resulted in convictions/charges; Karamihan was convicted as accessory after the fact and ordered to indemnify Tan P75,000.00.
- The Regional Trial Court of Quezon City granted Great Harvest’s Complaint; the Court of Appeals affirmed; Tan’s Rule 45 petition was ultimately denied by the Supreme Court.
Applicable Law and Governing Legal Framework
The relevant legal framework includes the 1987 Philippine Constitution as the governing constitution for decisions rendered after 1990, the Rules of Civil Procedure (Rule 45 limitations on questions of law), Commonwealth Act No. 146 (Public Service Act) as referenced in the jurisprudence, and the Civil Code provisions defining common carriers and their obligations (Articles 1732–1736, 1734, 1733, 1755, 1756, and Article 1745(6)). Precedent and economic policy reasoning (as cited in the decision) also inform the application of the extraordinary diligence standard.
Procedural History of the Civil and Related Criminal Actions
Great Harvest’s civil action proceeded to trial in the Regional Trial Court, which found Tan liable and rendered judgment in favor of Great Harvest for P230,000.00 plus interest, attorney’s fees, and costs. Tan’s motion for reconsideration was denied. The Court of Appeals dismissed her appeal and denied reconsideration. Tan invoked the misapprehension-of-facts exception to Rule 45 in her petition for review on certiorari, but the Supreme Court denied the petition and affirmed the lower courts’ findings. Separately, in criminal proceedings, Karamihan was convicted as accessory after the fact, and Cabugatan faced qualified theft charges.
Central Legal Issue Presented
Whether petitioner Annie Tan, as a common carrier, should be held civilly liable for the value of the stolen soya beans entrusted to her care, given her defenses that (a) her contractual obligation ended upon delivery to Selecta Feeds, (b) any subsequent instruction to redirect the goods was by respondent and released her from extraordinary diligence obligations, and (c) the loss resulted from a fortuitous hijacking excusing carrier liability.
Trial Court Findings on Contractual Relationship and Credibility
The trial court found the existence of a verbal contract of hauling between Great Harvest and Tan and credited the testimony of Great Harvest’s witness, Cynthia Chua, over petitioner’s assertions. The court concluded that the parties’ established practice was to deliver rejected goods to respondent’s nearest warehouse with prior approval of the consignor, and that Tan consented to that arrangement. The trial court considered petitioner’s contrary claims self-serving and found that the diversion to respondent’s warehouse did not constitute an unauthorized deviation relieving Tan of responsibility.
Appellate Court Reasoning Regarding Carrier Diligence and Contractual Terms
The Court of Appeals affirmed the trial court’s factual findings and emphasized that Tan, as a common carrier, failed to exercise the extraordinary diligence required by law. The appellate court found no deviation from the agreed destination because the parties’ practice provided for return of rejected shipments to respondent’s warehouse. The Court of Appeals also noted that Tan did not provide security for the cargo, nor did she procure insurance that could have mitigated risk or provided recovery for respondent.
Supreme Court Legal Analysis: Rule 45 and Factual Findings
The Supreme Court reiterated that Rule 45 of the Rules of Civil Procedure limits review to questions of law, and that factual findings of appellate courts supported by substantial evidence are binding. The petition’s reliance on the misapprehension-of-facts exception was examined and rejected because the record demonstrated substantial evidence supporting the findings below. The Court emphasized deference to trial court credibility assessments and found no basis to disturb the determination that a verbal ha
...continue readingCase Syllabus (G.R. No. 122947)
Procedural History
- Petition for Review on Certiorari filed under Rule 45 assailing the Court of Appeals Decision dated March 13, 2015 and Resolution dated September 15, 2015 in CA-G.R. CV No. 100412.
- The Court of Appeals affirmed the Regional Trial Court (RTC) January 3, 2012 Decision in Civil Case No. Q-94-20745 which granted Great Harvest Enterprises, Inc.'s Complaint for sum of money against Annie Tan.
- Annie Tan filed a Motion for Reconsideration of the RTC January 3, 2012 Decision; it was denied by the trial court in an Order dated November 21, 2012.
- Tan appealed to the Court of Appeals; the appeal was dismissed by the Court of Appeals in its March 13, 2015 Decision. Tan's Motion for Reconsideration before the Court of Appeals was denied in its September 15, 2015 Resolution.
- Tan filed the present Petition for Review on Certiorari before the Supreme Court. Great Harvest was directed to comment but manifested that it was waiving its right to file a comment.
- The Supreme Court issued a decision dated March 20, 2019 denying the Petition.
Relevant Dates and Chronology of Events
- February 3, 1994: Great Harvest hired Tan to transport 430 bags of soya beans valued at P230,000.00 from Tacoma Integrated Port Services, Inc. (Tacoma) in Port Area, Manila to Selecta Feeds in Camarin, Novaliches, Quezon City; goods loaded into Tan's hauling truck the same day.
- Delivery to Selecta Feeds made by Tan's employee, Rannie Sultan Cabugatan.
- Selecta Feeds rejected the shipment; Great Harvest instructed Cabugatan to deliver and unload at Great Harvest's warehouse in Malabon, but the truck and shipment never reached the warehouse.
- February 7, 1994: Great Harvest inquired about the missing delivery; Tan initially promised to verify, later admitted she could not locate both her truck and Great Harvest’s goods.
- Tan reported the missing truck to the Western Police District Anti-Carnapping Unit and the National Bureau of Investigation (NBI).
- February 19, 1994: NBI informed Tan that the truck had been found in Cavite, cannibalized and without cargo.
- Tan spent over P200,000.00 to have the truck repaired (another part of the rollo reports P300,000.00).
- March 2 and April 26, 1994: Great Harvest sent demand letters to Tan for full payment for the missing 430 bags of soya beans; Tan refused to pay or settle.
- June 2, 1994: Great Harvest filed a Complaint for sum of money against Tan.
- January 25, 2016: Procedural action in the Supreme Court record noted (respondent directed to comment; waived comment).
Factual Background and Key Actors
- Petitioner: Annie Tan — hauling contractor/common carrier who received the soya beans and provided the hauling truck and driver (employee Cabugatan).
- Respondent: Great Harvest Enterprises, Inc. — consignor/owner of the 430 bags of soya beans.
- Driver/Employee: Rannie Sultan Cabugatan (also spelled "Carugatan" in parts of the rollo) — delivered goods to Selecta Feeds and later absconded with the truck and cargo.
- Alleged accomplice/third party: Rody Karamihan — charged as accessory after the fact in a criminal proceeding related to the disappearance/theft of the shipment; criminal Information filed and convictions followed in the related criminal case.
- Witness for plaintiff: Cynthia Chua — Account Officer of Great Harvest whose testimony was credited by trial court and Court of Appeals establishing the business relationship and standing arrangement regarding rejected cargo.
Parties’ Contentions (Petitioner and Respondent)
- Petitioner Annie Tan:
- Denied existence of a hauling contract with Great Harvest; claimed she merely accommodated Great Harvest.
- Argued that Great Harvest instructed her driver to change the point of delivery without her consent; therefore Great Harvest should bear the loss due to deviation from the original unloading point.
- Contended that her obligation ended upon delivery to Selecta Feeds; what occurred after Selecta Feeds' rejection was beyond her control.
- Asserted that the truck hijacking/theft was a fortuitous event and that a carrier is not an insurer against all risks of travel.
- Sought damages from respondent for expenses, moral and exemplary damages, and attorney’s fees (P500,000.00 actual damages; P500,000.00 moral damages; P500,000.00 exemplary damages; P200,000.00 attorney's fees), and alternatively conceded liability of only P75,000.00 if found liable (the amount Karamihan paid for the shipment).
- Respondent Great Harvest:
- Asserted existence of a verbal contract of carriage with petitioner, and that the standing business practice/agreement was that rejected cargo would be delivered to Great Harvest’s nearest warehouse.
- Maintained that the loss was due to petitioner's failure to exercise extraordinary diligence as a common carrier (failure to vet driver, provide security for cargo, or insure the cargo).
Trial Court Findings and Disposition (RTC, Quezon City)
- Trial court (January 3, 2012 Decision) found in favor of Great Harvest and against Tan:
- Held that Tan entered into a verbal contract of hauling with Great Harvest.
- Held Tan responsible for her driver’s failure to deliver the soya beans to Great Harvest.
- Dispositive portion of the RTC decision ordered Tan:
- To pay P230,000.00 with interest at 12% per annum from June 2, 1994 until paid;
- To pay P50,000.00 as attorney’s fees;
- To pay costs against defendant.
- Trial court credited testimony of Cynthia Chua over petitioner; found that the parties had an agreement to deliver rejected goods to Great Harvest’s nearest warehouse with prior approval of the consignor.
- Trial court’s assessment of witness credibility noted in the record and later upheld.
Criminal Proceedings Related to the Loss
- Tan filed a Complaint against Cabugatan and Rody Karamihan alleging conspiracy to steal the shipment entrusted to her.
- An Information for theft was filed against Karamihan; Cabugatan was charged with qualified theft.
- RTC of Manila (Criminal Case No. 94-136947) in an August 4, 2000 Decision found Karamihan guilty as accessory after the fact of theft and sentenced him to imprisonment between six months (arresto mayor maximum) to one year (prision correccional minimum).
- Karamihan was ordered to indemnify Tan P75,000.00—the amount he had paid Cabugatan for the 430 bags of soya beans.
Court of Appeals Decision and Rationale
- Court of Appeals (March 13, 2015) affirmed the RTC January 3, 2012 Decision in toto.
- The Court of Appeals found:
- Parties’ standard business practice when recipient rejected the cargo was to deliver it to Great Harvest’s warehouse; therefore no deviation from the original destination occurred.
- The cargo loss was due to Tan’s failure to exercise th