11/22/2017 FGU Insurance Corp vs GP Sarmiento Trucking Corp : 141910 : August 6, 2002 : J.

Vitug : First Division

FIRSTDIVISION

[G.R.No.141910.August6,2002]

FGU INSURANCE CORPORATION, petitioner, vs. G.P. SARMIENTO

TRUCKINGCORPORATIONandLAMBERTM.EROLES,respondents.

DECISION
VITUG,J.:

G.P.SarmientoTruckingCorporation(GPS)undertooktodeliveron18June1994thirty(30)
units of Condura S.D. white refrigerators aboard one of its Isuzu truck, driven by Lambert
Eroles, from the plant site of Concepcion Industries, Inc., along South Superhighway in
Alabang,MetroManila,totheCentralLuzonAppliancesinDagupanCity.While the truck was
traversing the north diversion road along McArthur highway in Barangay Anupol, Bamban,
Tarlac, it collided with an unidentified truck, causing it to fall into a deep canal, resulting in
damagetothecargoes.
FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion
Industries, Inc., the value of the covered cargoes in the sum of P204,450.00. FGU, in turn,
being the subrogee of the rights and interests of Concepcion Industries, Inc., sought
reimbursement of the amount it had paid to the latter from GPS. Since the trucking company
failedtoheedtheclaim,FGUfiledacomplaintfordamagesandbreachofcontractofcarriage
againstGPSanditsdriverLambertEroleswiththeRegionalTrialCourt,Branch66,ofMakati
City.Initsanswer,respondentsassertedthatGPSwastheexclusivehauleronlyofConcepcion
Industries, Inc., since 1988, and it was not so engaged in business as a common
carrier.Respondentsfurtherclaimedthatthecauseofdamagewaspurelyaccidental.
Theissueshavingthusbeenjoined,FGUpresenteditsevidence,establishingtheextentof
damagetothecargoesandtheamountithadpaidtotheassured.GPS,insteadofsubmitting
itsevidence,filedwithleaveofcourtamotiontodismissthecomplaintbywayofdemurrerto
evidenceonthegroundthatpetitionerhadfailedtoprovethatitwasacommoncarrier.
The trial court, in its order of 30 April 1996, [1] granted the motion to dismiss, explaining
thusly:

Under Section 1 of Rule 131 of the Rules of Court, it is provided that Each party must prove his own
afrmative allegation, xxx.

In the instant case, plaintiff did not present any single evidence that would prove that defendant is a
common carrier.

x x xx x xx x x

Accordingly, the application of the law on common carriers is not warranted and the presumption of fault
or negligence on the part of a common carrier in case of loss, damage or deterioration of goods during
transport under 1735 of the Civil Code is not availing.

Thus, the laws governing the contract between the owner of the cargo to whom the plaintiff was
subrogated and the owner of the vehicle which transports the cargo are the laws on obligation and
contract of the Civil Code as well as the law on quasi delicts.

Under the law on obligation and contract, negligence or fault is not presumed.The law on quasi delict
provides for some presumption of negligence but only upon the attendance of some circumstances.Thus,
Article 2185 provides:

Art. 2185.Unless there is proof to the contrary, it is presumed that a person driving a motor vehicle has
been negligent if at the time of the mishap, he was violating any trafc regulation.

Evidence for the plaintiff shows no proof that defendant was violating any trafc regulation.Hence, the
presumption of negligence is not obtaining.

Considering that plaintiff failed to adduce evidence that defendant is a common carrier and defendants
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driver was the one negligent, defendant cannot be made liable for the damages of the subject cargoes.[2]

The subsequent motion for reconsideration having been denied,[3]plaintiff interposed an

appealtotheCourtofAppeals,contendingthatthetrialcourthaderred(a)inholdingthatthe
appellee corporation was not a common carrier defined under the law and existing
jurisprudenceand(b)indismissingthecomplaintonademurrertoevidence.
The Court of Appeals rejected the appeal of petitioner and ruled in favor of GPS. The
appellatecourt,initsdecisionof10June1999,[4]discoursed,amongotherthings,that

"x x x in order for the presumption of negligence provided for under the law governing common carrier
(Article 1735, Civil Code) to arise, the appellant must rst prove that the appellee is a common
carrier.Should the appellant fail to prove that the appellee is a common carrier, the presumption would
not arise; consequently, the appellant would have to prove that the carrier was negligent.

"x x xx x xx x x

"Because it is the appellant who insists that the appellees can still be considered as a common carrier,
despite its `limited clientele, (assuming it was really a common carrier), it follows that it (appellant) has
the burden of proving the same.It (plaintiff-appellant) `must establish his case by a preponderance of
evidence, which means that the evidence as a whole adduced by one side is superior to that of the other.
(Summa Insurance Corporation vs. Court of Appeals, 243 SCRA 175).This, unfortunately, the appellant
failed to do --hence, the dismissal of the plaintiffs complaint by the trial court is justied.

"x x xx x xx x x

"Based on the foregoing disquisitions and considering the circumstances that the appellee trucking
corporation has been `its exclusive contractor, hauler since 1970, defendant has no choice but to comply
with the directive of its principal, the inevitable conclusion is that the appellee is a private carrier.

"x x xx x xx x x

"x x x the lower court correctly ruled that 'the application of the law on common carriers is not warranted
and the presumption of fault or negligence on the part of a common carrier in case of loss, damage or
deterioration of good[s] during transport under [article] 1735 of the Civil Code is not availing.' x x x.

"Finally, We advert to the long established rule that conclusions and ndings of fact of a trial court are
entitled to great weight on appeal and should not be disturbed unless for strong and valid reasons."[5]

Petitioner's motion for reconsideration was likewise denied[6] hence, the instant petition,
[7]raisingthefollowingissues:

WHETHER RESPONDENT GPS MAY BE CONSIDERED AS A COMMON CARRIER AS DEFINED

UNDER THE LAW AND EXISTING JURISPRUDENCE.

II

WHETHER RESPONDENT GPS, EITHER AS A COMMON CARRIER OR A PRIVATE CARRIER,

MAY BE PRESUMED TO HAVE BEEN NEGLIGENT WHEN THE GOODS IT UNDERTOOK TO
TRANSPORT SAFELY WERE SUBSEQUENTLY DAMAGED WHILE IN ITS PROTECTIVE
CUSTODY AND POSSESSION.

III

WHETHER THE DOCTRINE OFRES IPSA LOQUITURIS APPLICABLE IN THE INSTANT CASE.

Onthefirstissue,theCourtfindstheconclusionofthetrialcourtandtheCourtofAppeals
tobeamplyjustified.GPS,beinganexclusivecontractorandhaulerofConcepcionIndustries,
Inc., rendering or offering its services to no other individual or entity, cannot be considered a
commoncarrier.Commoncarriersarepersons,corporations,firmsorassociationsengagedin
thebusinessofcarryingortransportingpassengersorgoodsorboth,byland,water,orair,for
hireorcompensation,offeringtheirservicestothepublic,[8]whethertothepublicingeneralor
toalimitedclienteleinparticular,butneveronanexclusivebasis.[9]Thetruetestofacommon
carrier is the carriage of passengers or goods, providing space for those who opt to avail
themselves of its transportation service for a fee.[10]Given accepted standards, GPS scarcely
fallswithinthetermcommoncarrier.
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Theaboveconclusionnothwithstanding,GPScannotescapefromliability.
In culpa contractual, upon which the action of petitioner rests as being the subrogee of
ConcepcionIndustries,Inc.,themereproofoftheexistenceofthecontractandthefailureofits
compliance justify, prima facie, a corresponding right of relief.[11] The law, recognizing the
obligatoryforceofcontracts,[12]willnotpermitapartytobesetfreefromliabilityforanykindof
misperformance of the contractual undertaking or a contravention of the tenor thereof.[13] A
breachuponthecontractconfersupontheinjuredpartyavalidcauseforrecoveringthatwhich
mayhavebeenlostorsuffered.The remedy serves to preserve the interests of the promisee
that may include his expectation interest, which is his interest in having the benefit of his
bargain by being put in as good a position as he would have been in had the contract been
performed,orhisrelianceinterest,whichishisinterestinbeingreimbursedforlosscausedby
relianceonthecontractbybeingputinasgoodapositionashewouldhavebeeninhadthe
contractnotbeenmadeorhisrestitutioninterest,whichishisinterestinhavingrestoredtohim
any benefit that he has conferred on the other party.[14] Indeed, agreements can accomplish
little, either for their makers or for society, unless they are made the basis for action.[15] The
effectofeveryinfractionistocreateanewduty,thatis,tomakerecompensetotheonewho
hasbeeninjuredbythefailureofanothertoobservehiscontractualobligation[16]unlesshecan
showextenuatingcircumstances,likeproofofhisexerciseofduediligence(normallythatofthe
diligence of a good father of a family or, exceptionally by stipulation or by law such as in the
case of common carriers, that of extraordinary diligence) or of the attendance of fortuitous
event,toexcusehimfromhisensuingliability.
Respondenttruckingcorporationrecognizestheexistenceofacontractofcarriagebetween
itandpetitionersassured,andadmitsthatthecargoesithasassumedtodeliverhavebeenlost
ordamagedwhileinitscustody.Insuchasituation,adefaulton,orfailureofcompliancewith,
theobligationinthiscase,thedeliveryofthegoodsinitscustodytotheplaceofdestination
gives rise to a presumption of lack of care and corresponding liability on the part of the
contractualobligortheburdenbeingonhimtoestablishotherwise.GPShasfailedtodoso.
Respondentdriver,ontheotherhand,withoutconcreteproofofhisnegligenceorfault,may
nothimselfbeorderedtopaypetitioner.Thedriver,notbeingapartytothecontractofcarriage
between petitioners principal and defendant, may not be held liable under the agreement. A
contract can only bind the parties who have entered into it or their successors who have
assumedtheirpersonalityortheirjuridicalposition.[17]Consonantlywiththeaxiomresinteralios
acta aliis neque nocet prodest, such contract can neither favor nor prejudice a third
person.Petitioners civil action against the driver can only be based onculpa aquiliana, which,
unlikeculpacontractual,wouldrequiretheclaimantfordamagestoprovenegligenceorfaulton
thepartofthedefendant.[18]
A word in passing. Res ipsa loquitur, a doctrine being invoked by petitioner, holds a
defendant liable where the thing which caused the injury complained of is shown to be under
thelattersmanagementandtheaccidentissuchthat,intheordinarycourseofthings,cannot
beexpectedtohappenifthosewhohaveitsmanagementorcontrolusepropercare.Itaffords
reasonableevidence,intheabsenceofexplanationbythedefendant,thattheaccidentarose
from want of care.[19] It is not a rule of substantive law and, as such, it does not create an
independentgroundofliability.Instead,itisregardedasamodeofproof,oramereprocedural
convenience since it furnishes a substitute for, and relieves the plaintiff of, the burden of
producingspecificproofofnegligence.Themaximsimplyplacesonthedefendanttheburden
ofgoingforwardwiththeproof.[20]Resorttothedoctrine,however,maybeallowedonlywhen(a)
the event is of a kind which does not ordinarily occur in the absence of negligence (b) other
responsible causes, including the conduct of the plaintiff and third persons, are sufficiently
eliminated by the evidence and (c) the indicated negligence is within the scope of the
defendant'sdutytotheplaintiff.[21]Thus,itisnotapplicablewhenanunexplainedaccidentmay
be attributable to one of several causes, for some of which the defendant could not be
responsible.[22]
Resipsaloquiturgenerallyfindsrelevancewhetherornotacontractualrelationshipexists
between the plaintiff and the defendant, for the inference of negligence arises from the
circumstances and nature of the occurrence and not from the nature of the relation of the
parties.[23]Nevertheless, the requirement that responsible causes other than those due to
defendantsconductmustfirstbeeliminated,forthedoctrinetoapply,shouldbeunderstoodas
beingconfinedonlytocasesofpure(noncontractual)tortsinceobviouslythepresumptionof
negligenceinculpacontractual,aspreviouslysopointedout,immediatelyattachesbyafailure
of the covenant or its tenor. In the case of the truck driver, whose liability in a civil action is
predicated on culpa acquiliana, while he admittedly can be said to have been in control and
managementofthevehiclewhichfiguredintheaccident,itisnotequallyshown,however,that
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the accident could have been exclusively due to his negligence, a matter that can allow,
forthwith,resipsaloquiturtoworkagainsthim.
If a demurrer to evidence is granted but on appeal the order of dismissal is reversed, the
movant shall be deemed to have waived the right to present evidence.[24] Thus, respondent
corporationmaynolongerofferprooftoestablishthatithasexercisedduecareintransporting
thecargoesoftheassuredsoastostillwarrantaremandofthecasetothetrialcourt.
WHEREFORE, the order, dated 30April 1996, of the Regional Trial Court, Branch 66, of
MakatiCity,andthedecision,dated10June1999,oftheCourtofAppeals,areAFFIRMEDonly
insofarasrespondentLambertM.Erolesisconcerned,butsaidassailedorderofthetrialcourt
and decision of the appellate court are REVERSED as regards G.P. Sarmiento Trucking
Corporationwhich,instead,isherebyorderedtopayFGUInsuranceCorporationthevalueof
thedamagedandlostcargoesintheamountofP204,450.00.Nocosts.
SOORDERED.
Davide,Jr.,C.J.,(Chairman),Kapunan,YnaresSantiago,andAustriaMartinez,JJ.,concur.

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