508 Phil. 656
Common carriers are bound to observe extraordinary
diligence in their vigilance over the goods entrusted to them, as
required by the nature of their business and for reasons of public
policy. Consequently, the law presumes that common carriers are at
fault or negligent for any loss or damage to the goods that they
transport. In the present case, the evidence submitted by petitioner to
overcome this presumption was sorely insufficient.
The Case
Before us is a Petition for Review
[1] under Rule 45 of the Rules of Court, assailing the October 9, 2002 Decision
[2] and the December 29, 2003 Resolution
[3] of the Court of Appeals (CA) in CA-GR CV No. 66028. The challenged Decision disposed as follows:
"WHEREFORE, the appeal is GRANTED. The December 7, 1999 decision of the Regional Trial Court of Manila, Branch 42 in Civil Case No. 92-63159 is hereby REVERSED and SET ASIDE.
[Petitioner] is ordered to pay the [herein respondent] the value of the
lost cargo in the amount of P565,000.00. Costs against the [herein
petitioner]."[4]
The assailed Resolution denied reconsideration.
The Facts
Ilian
Silica Mining entered into a contract of carriage with Lea Mer
Industries, Inc., for the shipment of 900 metric tons of silica sand
valued at P565,000.
[5]
Consigned to Vulcan Industrial and Mining Corporation, the cargo was to
be transported from Palawan to Manila. On October 25, 1991, the silica
sand was placed on board
Judy VII, a barge leased by Lea Mer.
[6] During the voyage, the vessel sank, resulting in the loss of the cargo.
[7]Malayan Insurance Co., Inc., as insurer, paid Vulcan the value of the lost cargo.
[8]
To recover the amount paid and in the exercise of its right of
subrogation, Malayan demanded reimbursement from Lea Mer, which refused
to comply. Consequently, Malayan instituted a Complaint with the
Regional Trial Court (RTC) of Manila on September 4, 1992, for the
collection of P565,000 representing the amount that respondent had paid
Vulcan.
[9]On October 7, 1999, the trial court dismissed the Complaint, upon finding that the cause of the loss was a fortuitous event.
[10]
The RTC noted that the vessel had sunk because of the bad weather
condition brought about by Typhoon Trining. The court ruled that
petitioner had no advance knowledge of the incoming typhoon, and that
the vessel had been cleared by the Philippine Coast Guard to travel from
Palawan to Manila.
[11]Ruling of the Court of Appeals
Reversing
the trial court, the CA held that the vessel was not seaworthy when it
sailed for Manila. Thus, the loss of the cargo was occasioned by
petitioner's fault, not by a fortuitous event.
[12]Hence, this recourse.
[13]The Issues
Petitioner states the issues in this wise:
"A.
Whether or not the survey report of the cargo surveyor, Jesus Cortez,
who had not been presented as a witness of the said report during the
trial of this case before the lower court can be admitted in evidence to
prove the alleged facts cited in the said report.
"B. Whether or
not the respondent, Court of Appeals, had validly or legally reversed
the finding of fact of the Regional Trial Court which clearly and
unequivocally held that the loss of the cargo subject of this case was
caused by fortuitous event for which herein petitioner could not be held
liable.
"C. Whether or not the respondent, Court of Appeals, had
committed serious error and grave abuse of discretion in disregarding
the testimony of the witness from the MARINA, Engr. Jacinto Lazo y
Villegal, to the effect that the vessel 'Judy VII' was seaworthy at the
time of incident and further in disregarding the testimony of the
PAG-ASA weather specialist, Ms. Rosa Barba y Saliente, to the effect
that typhoon 'Trining' did not hit Metro Manila or Palawan."[14]
In the main, the issues are as follows: (1) whether petitioner is
liable for the loss of the cargo, and (2) whether the survey report of
Jesus Cortez is admissible in evidence.
The Court's Ruling
The Petition has no merit.
First Issue:
Liability for Loss of Cargo
Question of FactThe
resolution of the present case hinges on whether the loss of the cargo
was due to a fortuitous event. This issue involves primarily a question
of fact, notwithstanding petitioner's claim that it pertains only to a
question of law. As a general rule, questions of fact may not be raised
in a petition for review.
[15] The present case serves as an exception to this rule, because the factual findings of the appellate and the trial courts vary.
[16] This Court meticulously reviewed the records, but found no reason to reverse the CA.
Rule on Common CarriersCommon
carriers are persons, corporations, firms or associations engaged in
the business of carrying or transporting passengers or goods, or both --
by land, water, or air -- when this service is offered to the public
for compensation.
[17]
Petitioner is clearly a common carrier, because it offers to the public
its business of transporting goods through its vessels.
[18]Thus, the Court corrects the trial court's finding that petitioner became a private carrier when Vulcan chartered it.
[19] Charter parties are classified as contracts of demise (or bareboat) and affreightment, which are distinguished as follows:
"Under
the demise or bareboat charter of the vessel, the charterer will
generally be considered as owner for the voyage or service stipulated.
The charterer mans the vessel with his own people and becomes, in
effect, the owner pro hac vice,
subject to liability to others for damages caused by negligence. To
create a demise, the owner of a vessel must completely and exclusively
relinquish possession, command and navigation thereof to the charterer;
anything short of such a complete transfer is a contract of
affreightment (time or voyage charter party) or not a charter party at
all."[20]
The distinction is significant, because a demise or bareboat charter indicates a business undertaking that is
private in character.
[21]
Consequently, the rights and obligations of the parties to a contract
of private carriage are governed principally by their stipulations, not
by the law on common carriers.
[22]The
Contract in the present case was one of affreightment, as shown by the
fact that it was petitioner's crew that manned the tugboat
M/V Ayalit and controlled the barge
Judy VII.
[23] Necessarily, petitioner was a common carrier, and the pertinent law governs the present factual circumstances.
Extraordinary Diligence RequiredCommon carriers are bound to observe
extraordinary
diligence in their vigilance over the goods and the safety of the
passengers they transport, as required by the nature of their business
and for reasons of public policy.
[24]
Extraordinary diligence requires rendering service with the greatest
skill and foresight to avoid damage and destruction to the goods
entrusted for carriage and delivery.
[25]Common
carriers are presumed to have been at fault or to have acted
negligently for loss or damage to the goods that they have transported.
[26]
This presumption can be rebutted only by proof that they observed
extraordinary diligence, or that the loss or damage was occasioned by
any of the following causes:
[27] "(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
"(2) Act of the public enemy in war, whether international or civil;
"(3) Act or omission of the shipper or owner of the goods;
"(4) The character of the goods or defects in the packing or in the containers;
"(5) Order or act of competent public authority."[28]
Rule on Fortuitous EventsArticle
1174 of the Civil Code provides that "no person shall be responsible
for a fortuitous event which could not be foreseen, or which, though
foreseen, was inevitable." Thus, if the loss or damage was due to such
an event, a common carrier is exempted from liability.
Jurisprudence
defines the elements of a "fortuitous event" as follows: (a) the cause
of the unforeseen and unexpected occurrence, or the failure of the
debtors to comply with their obligations, must have been independent of
human will; (b) the event that constituted the
caso fortuito must
have been impossible to foresee or, if foreseeable, impossible to
avoid; (c) the occurrence must have been such as to render it
impossible for the debtors to fulfill their obligation in a normal
manner; and (d) the obligor must have been free from any participation
in the aggravation of the resulting injury to the creditor.
[29]To
excuse the common carrier fully of any liability, the fortuitous event
must have been the proximate and only cause of the loss.
[30]
Moreover, it should have exercised due diligence to prevent or minimize
the loss before, during and after the occurrence of the fortuitous
event.
[31]Loss in the Instant CaseThere
is no controversy regarding the loss of the cargo in the present case.
As the common carrier, petitioner bore the burden of proving that it
had exercised extraordinary diligence to avoid the loss, or that the
loss had been occasioned by a fortuitous event -- an exempting
circumstance.
It was precisely this circumstance that petitioner
cited to escape liability. Lea Mer claimed that the loss of the cargo
was due to the bad weather condition brought about by Typhoon Trining.
[32]
Evidence was presented to show that petitioner had not been informed of
the incoming typhoon, and that the Philippine Coast Guard had given it
clearance to begin the voyage.
[33]
On October 25, 1991, the date on which the voyage commenced and the
barge sank, Typhoon Trining was allegedly far from Palawan, where the
storm warning was only "Signal No. 1."
[34]The
evidence presented by petitioner in support of its defense of
fortuitous event was sorely insufficient. As required by the pertinent
law, it was not enough for the common carrier to show that there was an
unforeseen or unexpected occurrence. It had to show that it was free
from any fault -- a fact it miserably failed to prove.
First,
petitioner presented no evidence that it had attempted to minimize or
prevent the loss before, during or after the alleged fortuitous event.
[35]
Its witness, Joey A. Draper, testified that he could no longer remember
whether anything had been done to minimize loss when water started
entering the barge.
[36] This fact was confirmed during his cross-examination, as shown by the following brief exchange:
"Atty. Baldovino, Jr.:
Other
than be[a]ching the barge Judy VII, were there other precautionary
measure[s] exercised by you and the crew of Judy VII so as to prevent
the los[s] or sinking of barge Judy VII?
x x x x x x x x x
Atty. Baldovino, Jr.:
Your
Honor, what I am asking [relates to the] action taken by the officers
and crew of tugboat Ayalit and barge Judy VII x x x to prevent the
sinking of barge Judy VII?
x x x x x x x x x
Court:
Mr. witness, did the captain of that tugboat give any instruction on how to save the barge Judy VII?
Joey Draper:
I can no longer remember sir, because that happened [a] long time ago."[37]
Second,
the alleged fortuitous event was not the sole and proximate cause of
the loss. There is a preponderance of evidence that the barge was not
seaworthy when it sailed for Manila.
[38]
Respondent was able to prove that, in the hull of the barge, there were
holes that might have caused or aggravated the sinking.
[39]
Because the presumption of negligence or fault applied to petitioner,
it was incumbent upon it to show that there were no holes; or, if there
were, that they did not aggravate the sinking.
Petitioner offered
no evidence to rebut the existence of the holes. Its witness, Domingo
A. Luna, testified that the barge was in "tip-top" or excellent
condition,
[40] but that he had not personally inspected it when it left Palawan.
[41]The submission of the Philippine Coast Guard's Certificate of Inspection of
Judy VII, dated July 31, 1991, did not conclusively prove that the barge was seaworthy.
[42] The regularity of the issuance of the Certificate is disputably presumed.
[43]
It could be contradicted by competent evidence, which respondent
offered. Moreover, this evidence did not necessarily take into account
the actual condition of the vessel at the time of the commencement of
the voyage.
[44]Second Issue:
Admissibility of the Survey Report
Petitioner claims that the Survey Report
[45]
prepared by Jesus Cortez, the cargo surveyor, should not have been
admitted in evidence. The Court partly agrees. Because he did not
testify during the trial,
[46]
then the Report that he had prepared was hearsay and therefore
inadmissible for the purpose of proving the truth of its contents.
The Survey Report Not the Sole EvidenceThe
facts reveal that Cortez's Survey Report was used in the testimonies of
respondent's witnesses -- Charlie M. Soriano; and Federico S. Manlapig,
a cargo marine surveyor and the vice-president of Toplis and Harding
Company.
[47] Soriano testified that the Survey Report had been used in preparing the final Adjustment Report conducted by their company.
[48]
The final Report showed that the barge was not seaworthy because of the
existence of the holes. Manlapig testified that he had prepared that
Report after taking into account the findings of the surveyor, as well
as the pictures and the sketches of the place where the sinking
occurred.
[49] Evidently, the existence of the holes was proved by the testimonies of the witnesses, not merely by Cortez' Survey Report.
Rule on Independently
Relevant StatementThat witnesses must be examined and presented during the trial,
[50] and that their testimonies must be confined to personal knowledge is required by the rules on evidence, from which we quote:
"Section 36. Testimony generally confined to personal knowledge; hearsay excluded.
–A witness can testify only to those facts which he knows of his
personal knowledge; that is, which are derived from his own perception,
except as otherwise provided in these rules."[51]
On this basis, the trial court correctly refused to admit Jesus Cortez's Affidavit, which respondent had offered as evidence.
[52] Well-settled is the rule that, unless the affiant is presented as a witness, an affidavit is considered hearsay.
[53]An
exception to the foregoing rule is that on "independently relevant
statements." A report made by a person is admissible if it is intended
to prove the tenor, not the truth, of the statements.
[54]
Independent of the truth or the falsity of the statement given in the
report, the fact that it has been made is relevant. Here, the hearsay
rule does not apply.
[55]In
the instant case, the challenged Survey Report prepared by Cortez was
admitted only as part of the testimonies of respondent's witnesses. The
referral to Cortez's Report was in relation to Manlapig's final
Adjustment Report. Evidently, it was the existence of the Survey Report
that was testified to. The admissibility of that Report as part of the
testimonies of the witnesses was correctly ruled upon by the trial
court.
At any rate, even without the Survey Report, petitioner
has already failed to overcome the presumption of fault that applies to
common carriers.
WHEREFORE, the Petition is
DENIED and the assailed Decision and Resolution are
AFFIRMED. Costs against petitioner.
SO ORDERED.
Sandoval-Gutierrez, Corona, Carpio Morales, and
Garcia, JJ., concur.
*
The Petition included the Court of Appeals as a respondent. However,
the CA was omitted by the Court from the title of the case because,
under Section 4 of Rule 45 of the Rules of Court, the appellate court
need not be impleaded in petitions for review.
[1] Rollo, pp. 12-27.
[2]
Id., pp. 36-41. Tenth Division. Penned by Justice Elvi John S.
Asuncion, with the concurrence of Justices Portia Aliño-Hormachuelos
(Division chairperson) and Juan Q. Enriquez Jr. (member).
[3] Id., p. 48.
[4] Assailed Decision, pp. 5-6; rollo, pp. 40-41.
[5] Id., pp. 1 & 36.
[6]
The barge was allegedly owned by J. T. Lighterage Services. (TSN dated
September 27, 1995, p. 3) It was non-propelled therefore, it could
only operate through its towing by petitioner's tugboat
M/T Ayalit. (TSN dated April 26, 1995, p. 12; TSN dated April 25, 1996, p. 19)
[7] Assailed Decision, p. 1; rollo, p. 36.
[8] Id., pp. 2 & 37.
[9] Ibid. The case was docketed as Civil Case No. 92-63159 and raffled to Branch 42.
[10] Ibid.
[11] RTC Decision dated December 7, 1999, p. 9; rollo, p. 58.
[12] Assailed Decision, p. 4; rollo, p. 39.
[13]
The case was deemed submitted for decision on October 25, 2004, upon
this Court's receipt of petitioner's sparse, 6-page (with only two pages
of argument) Memorandum, signed by Atty. Romualdo M. Jubay.
Respondent's Memorandum, signed by Atty. Frederick C. Angel, was
received by this Court on October 7, 2004.
[14] Petition, p. 8; rollo, p. 19. Original in uppercase.
[15] §1 of Rule 45 of the Rules of Court.
[16] Menchavez v. Teves Jr., 449 SCRA 380, 395, January 26, 2005;
Philippine American General Insurance Company v. PKS Shipping Company, 401 SCRA 222, 230, April 9, 2003;
Commissioner of Internal Revenue v. Embroidery and Garments Industries (Phil.), Inc., 364 Phil. 541, 546, March 22, 1999.
[17] Art. 1732 of the Civil Code.
[18] Petition, pp. 4-5; rollo, pp. 14-15.
[19] RTC Decision dated December 7, 1999, p. 7; rollo, p. 56.
[20] Puromines, Inc. v. Court of Appeals, 220 SCRA 281, 288, per Nocon
J. See also
National Food Authority v. Court of Appeals, 370 Phil. 735, 743, August 4, 1999.
[21] Philippine American General Insurance Company v. PKS Shipping Company, supra, p. 228;
Coastwise Lighterage Corporation v. Court of Appeals, 316 Phil. 13, 19, July 12, 1995.
[22] National Steel Corporation v. Court of Appeals, 347 Phil. 345, 362, December 12, 1997;
Valenzuela Hardwood and Industrial Supply, Inc. v. Court of Appeals, 274 SCRA 642, 654, June 30, 1997.
[23] RTC Decision dated December 7, 1999, pp. 4-6; rollo, pp. 53-55.
[24] Art. 1733 of the Civil Code.
[25] Calvo v. UCPB General Insurance Co., Inc., 429 Phil. 244, 252, March 19, 2002;
Compania Maritima v. Court of Appeals, 164 SCRA 685, 692, August 29, 1988.
[26] Art. 1735 of the Civil Code.
[27] Ibid. See also
National Trucking and Forwarding Corp. v. Lorenzo Shipping Corporation, GR No. 153563, February 7, 2005;
Asia Lighterage and Shipping, Inc. v. Court of Appeals, 409 SCRA 340, 346, August 19, 2003;
Philippine American General Insurance Company v. PKS Shipping Company, supra, p. 229;
Coastwise Lighterage Corporation v. Court of Appeals, supra, p. 20;
Basco v. Court of Appeals, 221 SCRA 318, 323, April 7, 1993.
[28] Art. 1734 of the Civil Code.
[29] Mindex Resources Development v. Morillo, 428 Phil. 934, 944, March 12, 2002;
Philippine American General Insurance Co. Inc. v. MGG Marine Services, Inc., 428 Phil. 705, 714, March 8, 2002;
Metal Forming Corp. v. Office of the President, 317 Phil. 853, 859, August 28, 1995;
Vasquez v. Court of Appeals, 138 SCRA 553, 557, September 13, 1985;
Republic v. Luzon Stevedoring Corp., 128 Phil. 313, 318, September 29, 1967.
[30] Art. 1739 of the Civil Code.
[31] Ibid.
[32] RTC Decision dated December 7, 1999, p. 9; rollo p. 58 (citing the testimony of Rosa S. Barba).
See also Petitioner�s Memorandum, p. 2; rollo, p. 157.
[33] Ibid. (citing the testimony of Domingo A. Luna).
[34] The testimony of Rosa S. Barba, weather specialist of Philippine Atmosphere (PAGASA), was summarized by the RTC as follows:
"In
May 1993, upon the request of [petitioner's] counsel, she issued a
weather bureau report or certification, an official record of Pagasa,
which weather report is based on their weather station at Puerto
Princesa, Palawan. x x x The report on the weather condition on October
21, 1991 at around 11:00 am to 2:00 pm was weathercast sky. The bad
weather condition on October 25, 26, and 27, 1991 was caused by typhoon
'Trining' but said typhoon then was far from Palawan, which was only
signal No. 1. Tropical storm 'Trining' entered the Philippine area of
responsibility on October 24. Pagasa did issue a warning that said
storm was approaching the Philippines. Storm 'Trining' was classified,
as super typhoon with a maximum of 185 kilometer[s] per hour and the
coverage was big. On October 24, 1991, typhoon 'Trining' hit Batangas,
the Ilocos Provinces, Isabela, but not Metro Manila or Palawan. Maybe
Palawan was affected but if ever it was affected it was only minimal."
RTC Decision dated December 7, 1999, p. 6; rollo, p. 55.
[35] See Art. 1739 of the Civil Code.
[36] The testimony of Joey A. Draper, the quarter master in charge of steering the tugboat, was summarized by the RTC as follows:
"On
October 25, 1991, he was assigned in the tugboat 'M/T Ayalit.' x x x
[The tugboat] was towing the barge 'Judy VII' which was carrying silica
sand. x x x He was an ordinary seaman in 1991 and it was his first year
as a seaman, although he made several trips to Palawan and Manila. x x x
He does not know the qualification[s] of a seaman but he was then a
second year high school [student] and though he did not take any
examination, he knew about navigation. When the incident happened in
1991[,] he had no seaman book as it was not yet strict at the time and
the seaman book can be dispensed with. He was only 18 years and has an
actual training of the work when he boarded the tugboat. Even if he has
no formal schooling, the master allowed him to handle the wheel of the
tugboat. When they left San Vicente, Palawan for Manila on said date at
around 4:00 pm, the weather was fair. When they passed by Linapakan
Island, the waves were quite big and the wind was a little bit strong.
At that point in time, the barge patrol of 'Judy VII' wave[d] his hand
[at] them. Their captain decided to approach the barge. They noticed
that [there was] water already inside the barge. About two (2) days
later, their captain decided to beach the barge. The said barge then
sank and only the barge's house at the back portion of the barge ('the
puppa') was above water. He could only remember that they save[d] the
bargemen and proceeded to El Nido, Palawan where they secured themselves
to save the tugboat. But he could no longer remember how long a time
they stayed thereat nor if they went back to the barge 'Judy VII.'" RTC
Decision, p. 6; rollo, p. 55.
[37] TSN dated November 22, 1995, pp. 27-29.
[38]
In civil cases, parties who carry the burden of proof must establish
their case by a preponderance of evidence. §1 of Rule 133 of the Rules
of Court.
[39]
Respondent proved this allegation through the testimony of its witnesses
and submission of documentary evidence. Unseaworthiness was also the
finding of the appellate court. Assailed Decision, p. 4; rollo, p. 39.
[40] TSN dated April 26, 1995, p. 44.
[41] TSN dated September 27, 1995, pp. 17-21.
[42] Petitioner's Exhibit "4."
[43] §3(m) of Rule 131 of the Rules of Court.
[44] Delsan Transport Lines, Inc. v. Court of Appeals, 420 Phil. 824, 834, November 15, 2001.
[45] Exhibit "H."
See "Respondent's Offer of Evidence," p. 2; records, p. 159.
[46] Petitioner's Memorandum, p. 3; rollo, p. 160.
Respondent's
witness, Federico S. Manlapig, testified that Jesus Cortez -- who had
already migrated to Australia -- could no longer testify. TSN dated
December 15, 1994, p. 9.
[47] RTC Decision dated December 7, 1999, p. 4; rollo, p. 53.
[48] Ibid.
[49] TSN dated December 15, 1994, pp. 9-13.
[50] §1 of Rule 132 of the Rules of Court.
[51] Rule 130 of the Rules of Court.
[52] RTC Order dated March 17, 1995; records, p. 165.
[53] Melchor v. Gironella, GR No. 151138, February 16, 2005;
People v. Crispin, 383 Phil. 919, 931, March 2, 2000;
People v. Villeza, 127 SCRA 349, 359, January 31, 1984;
Paa v. Chan, 128 Phil. 815, 821, October 31, 1967.
[54] Country Bankers Insurance v. Lianga Bay and Community Multi-purpose Cooperative, 425 Phil. 511, 521, January 25, 2002. See also
Presidential Commission on Good Government v. Desierto, 445 Phil. 154, 191, February 10, 2003;
People v. Mallari, 369 Phil. 872, 884, July 20, 1999;
People v. Cloud, 333 Phil. 306, 322, December 10, 1996.
[55] People v. Velasquez, 352 SCRA 455, 476, February 21, 2001;
Gotesco Investment Corporation v. Chatto, 210 SCRA 18, 32, June 16, 1992.