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G.R. No.
141910 August 6, 2002
FGU INSURANCE CORPORATION, petitioner,

vs.
G.P. SARMIENTO TRUCKING CORPORATION and LAMBERT M. EROLES, respondents.
VITUG, J.:
FACTS:
G.P. Sarmiento Trucking Corporation (GPS) undertook to deliver 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, Metro Manila, to the
Central Luzon Appliances in Dagupan City. 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 damage to the cargoes.
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 failed to heed the claim, FGU
filed a complaint for damages and breach of contract of carriage against GPS and its driver
Lambert Eroles with the RTC of Makati City. In its answer, respondents asserted that GPS was the
exclusive hauler only of Concepcion Industries, Inc., since 1988, and it was not so engaged in business
as a common carrier. Respondents further claimed that the cause of damage was purely accidental.
FGU presented its evidence, establishing the extent of damage to the cargoes and the
amount it had paid to the assured. GPS, instead of submitting its evidence, filed with leave of court a
motion to dismiss the complaint by way of demurrer to evidence on the ground that petitioner had failed
to prove that it was a common carrier.
The RTC dismissed the case on the ground that FGU was not able to prove that GPS was a
common carrier so the law on common carriers are inapplicable. The applicable law is Art. 2185. But
because FGU was unable to prove violation of any traffic regulations, negligence cannot be presumed
and GPS nor Eroles cannot be made liable for damages.
Upon appeal, the CA upheld the RTC’s decision and supported the reasoning that
because FGU insisted that GPS was liable under Art.1735 as a common carrier, FGU has the burden
of proving that GPS is a common carrier or that the carrier was negligent. Because FGU failed to prove
either, the appeal was dismissed.
ISSUE/S:
1. WON GPS may be considered as a common carrier as defined under the law and existing
jurisprudence. [NO]
2. WON 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. [YES]
3. WON the doctrine of res ipsa loquitur is applicable in the instant case. [NO]
4. WON Eroles may be ordered to pay the petitioner for breach of contract. [NO]
RULING:
1. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc.,

rendering or offering its services to no other individual or entity, cannot be considered
a common carrier. The true test of a common carrier is the carriage of passengers or goods,
providing space for those in the public who opt to avail themselves of its transportation service for a
fee.
2. Culpa contractual. A breach upon the contract confers upon the injured party a valid cause for
recovering that which may have been lost or suffered. The effect of every infraction is to create a new
duty, that is, to make recompense to the one who has been injured by the failure of another to
observe his contractual obligation unless he can show extenuating circumstances, like proof of
his exercise of due diligence or of the attendance of fortuitous event, to excuse him from his ensuing
liability.
Respondent trucking corporation recognizes the existence of a contract of carriage between it

and petitioner’s assured, and admits that the cargoes it has assumed to deliver have been lost
or damaged while in its custody. In such a situation, a default on, or failure of compliance with, the
obligation – in this case, the delivery of the goods in its custody to the place of destination - gives rise
to a presumption of lack of care and corresponding liability on the part of the contractual obligor the
burden being on him to establish otherwise. GPS has failed to do so.
3. Resort to the doctrine, however, may be allowed only when (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's duty to the plaintiff.
Thus, it is not applicable when an unexplained accident may be attributable to one of several
causes, for some of which the defendant could not be responsible.
4. Respondent driver, on the other hand, without concrete proof of his negligence or fault,
may not himself be ordered to pay petitioner. The driver, not being a party to the contract of carriage
between petitioner’s 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 assumed their
personality or their juridical position.
DECISION:
The RTC and CA Decisions are AFFIRMED in so far as Eroles is concerned but REVERSED with
regard to GPS. GPS is ordered to pay FGU in the value of the damaged and lost cargoes in the amount
of P204,450.00

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G.R. No.

141910 August 6, 2002

FGU INSURANCE CORPORATION, petitioner,

FGU Insurance Corporation (FGU), an insurer of the shipment, paid to Concepcion

1. GPS, being an exclusive contractor and hauler of Concepcion Industries, Inc.,

Respondent trucking corporation recognizes the existence of a contract of carriage between it

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