GREAT HARVEST ENTERPRISES, INC., PLAINTIFF-APPELLEE, VS. ANNIE TAN, DOING BUSINESS UNDER THE TRADE NAME AND STYLE A J & T TRADING, DEFENDANT-APPELLANT.
BUESER, J.:
“WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against the defendant, ordering the latter:
- To pay the sum of P230,000.00 with interest thereon at the rate of 12% per annum starting from June 2, 1994 (when the case was filed) and until paid;
- To pay the sum of P50,000.00 as Attorney’s fees; and
- Costs against the defendant.
SO ORDERED.”
The Facts
The pertinent facts and antecedent proceedings, as borne by the records, are as follows:
On February 3, 1994, appellee engaged the services of the appellant for the delivery of four hundred thirty (430) bags of U.S. soya beans valued at Two Hundred Thousand Thirty Pesos (P230,000.00). Per agreement, appellant was tasked to transport said goods from the Tacoma Integrated Port Services, Inc. (“Tacoma”) located at Port Area, Manila to the intended recipient, Selecta Feeds at Camarin, Novaliches, Quezon City.
At the port, the subject goods were loaded in appellant’s hauling truck with Plate Number PLH 266. Said truck was then being driven by her employee, Rannie Sultan Cabugatan (“Cabugatan”) as evinced by Tacoma Integrated Port Services, Inc. Waybill No. 24764[2] and Great Harvest Enterprises, Inc. Waybill No. 3886.[3]
However, upon arrival at the Selecta Feeds, the goods were rejected. Appellee then instructed Cabugatan to deliver and unload the rejected goods at the company’s Malabon warehouse. Notwithstanding appellant’s assurances, the goods did not arrive at said warehouse within the day.
In the evening of February 4, 1994, appellee was informed by its checker that the truck carrying its goods was parked at the Tacoma terminal. Immediately, appellee instructed the driver to remain within the terminal. Later however, the truck was no where to be found.
On February 7, 1994, after going over its internal control, appellee discovered that the subject goods had not been delivered by appellant. This prompted appellee to ask appellant about the missed delivery. Appellant, in turn, assured that proper verification would be made.
After repeated inquiries, appellant finally admitted to appellee the following day that the goods and the truck were missing. Appellant exerted efforts to locate her truck and the missing cargo.
On February 19, 1994, the National Bureau of Investigation (NBI) informed appellee that the missing truck had been found abandoned in Cavite. Unfortunately, the driver and the goods were no where to be found.
Consequently, appellee made demands for appellant to pay for the lost goods as contained in the Letters dated March 2, 1994[4] and April 26, 1994[5] sent by its counsel to the latter. Despite said demands, appellant did not pay appellee’s claim. Neither did appellant make any arrangement to settle the same.
Aggrieved by the loss of the subject goods and the refusal of appellant to make proper restitution, appellee filed the present complaint for sum of money claiming that said loss was a result of appellant’s negligence.[6]
Refuting the allegations of the complaint, appellant filed her Answer with Compulsory Counterclaim[7] and contended that the appellee has no cause of action against her. Appellant stressed that there was no hauling contract to begin with and that the agreement between her and appellee had been a mere accommodation on her part. Further, appellant claimed that she had no notice and had not given consent for the change in the goods’ point of destination from Selecta Feeds to appellee’s Malabon warehouse.
Appellant posited that she cannot be made liable for the hijacking incident. She was not at fault and said incident was beyond her control. She added that at the time of the hijacking, the driver had been acting under the authority of appellee and should therefore be considered as the employee of the latter. Given the foregoing, appellant contended that the resulting loss of the goods should be considered the sole responsibility of the appellee.
Moreover, it was claimed that appellant had done everything in her power to save the subject goods in contrast to appellant’s lack of cooperation. On this point, appellant posited that appellee should be considered to have contributed to said loss.
After pre-trial, trial on the merits ensued. The parties presented their respective testimonial evidence and documentary exhibits. To prove its cause of action, appellee presented Benito Solis, Cynthia Chua and Ruben Basino as witnesses.
During the presentation of appellee’s evidence, the appellant moved for the dismissal of the complaint, which was denied by the trial court. The proceedings below were then suspended since appellant elevated the dismissal of her motion before the Court of Appeals via a petition for certiorari.
Eventually, with the denial of said petition for certiorari, appellant proceeded to offer evidence to substantiate her claims and affirmative defenses. Aside from her own testimony and her documentary exhibits, appellant presented witnesses Marcelino Cruz, Efren Meneses, Jr. and Rochelle Gallardo.
In its Decision dated January 3, 2012, the court a quo, in the manner as afore-quoted, found merit in the complaint and granted appellee’s entreaty. The trial court ruled that albeit verbal, there was a valid perfected contract between appellee and appellant for the transport of the subject goods. The trial court was also unimpressed with appellant’s assertion that the diversion of the goods had been done without her knowledge and consent. Thus, having bound herself to said contract, appellant was declared liable for the loss of then subject goods.
Not content with the trial court’s pronouncement, appellant filed the present appeal.
The Issue
The main issue to be resolved in this appeal is whether the appellant is liable for the damages sustained by appellee due to the loss of the subject goods.
The Court’s Ruling
We find the present appeal bereft of merit.
Questioning the disquisitions of the trial court, appellant asserts that her contract with appellee was to deliver the goods to Selecta Feeds and that it was only upon the instance of the appellee that the driver had been directed to deliver the goods to the latter’s Malabon warehouse. The loss of the subject goods, appellant points out, is therefore attributable to appellee’s act of diverting the truck to another destination and its failure to provide security for said delivery.
For this reason, appellant contends that it is the appellee that should be declared negligent and liable for the loss of the subject goods. Appellant should thus be exempt from liability for said loss considering that under Article 1734 of the Civil Code of the Philippines, a common carrier, is exempted from liability if the loss is due to the act or omission of the shipper or the owner of the goods.
Also, appellant claims that the hijacking incident was beyond her control and as such, she should be free from liability. Appellant emphasizes that she had exercised extra-ordinary diligence in the selection of her driver Cabugatan and that she had acted in good faith after the loss of the hauling truck. At this juncture, appellant again harps on the efforts that she exerted to locate the missing truck.
We are not persuaded.
As can be gleaned from the records, the thrust of appellant’s arguments centers on the supposed unauthorized act of appellee in diverting the goods from its original point of destination to the latter’s Malabon warehouse. On one hand, appellee claims that when the intended recipient of the goods has refused to accept the delivery, the usual procedure that they adopted was to return the goods to the shipper’s nearest warehouse, subject to the payment of additional fees. While this agreement was only made verbally, the same had already been their practice since 1988.[8]
On the other hand, appellant denies having agreed to the aforesaid arrangement with appellee and maintains that the subject delivery is only the second time that she had transacted with the company, the first being in January 1994.[9] She stresses that the agreement was to return the rejected goods to the point of origin, which in this case is at Tacoma in Manila.
Given these conflicting claims, this Court is tasked to resolve the pivotal issue of whether there was indeed an agreement between the parties and that the change in the place of delivery after the recipient’s rejection of the goods had been done pursuant to said agreement.
After reviewing the evidence on record, this Court concurs with the disposition of the trial court finding in favor of appellee. Contrary to the conflicting averments of the appellant, the evidence presented by appellee has established by a preponderance of evidence the existence of a valid verbal agreement between the parties with regard to the transport of the subject goods.
Verily, the testimony alone of appellee’s Account Officer, Cynthia Chua, dispels the contrary allegations made by appellant in so far as the nature of their business relationship is concerned. Consistently and without qualms, said witness narrated the details respecting the company’s relations with the appellant and the events that transpired before, during and after the perfection of the contract and the subsequent loss of the subject cargo. Said testimony and the documentary exhibits, i.e, the Tacoma waybill and appellee’s waybill, prove the perfection and existence of the disputed verbal contract.
Emphatically, from the aforesaid waybills, it was duly established that while verbal, the parties herein has agreed for the hauling and delivery of the soya beans from the company’s broker to the intended recipient. It was further proven by evidence that appellant had agreed and consented to the delivery of the soya beans to the company’s nearest warehouse in case the cargo goods had been rejected by the recipient as it had been the practice between the parties.[10]
Also, from the previous receipts issued by appellant in favor of appellee, it can be gathered that aside from consenting to the diversion of the cargo to another unloading point, additional charges had been paid in consideration thereof.[11]
Paling in comparison, appellant failed to substantiate her assertions against appellee’s cause of action. Truth be told, the pieces of evidence proffered by appellee are mere denials and self-serving allegations, which as aptly ruled by the trial court cannot outweigh the strength of the positive testimony of the appellee’s witnesses.
Pertinently, while she had been insistent in her Answer that she had no contractual relationship with appellee and that their arrangement was a mere accommodation, appellant’s testimony directly contradicts the same as she had testified in court that the subject transaction was the second one that she had entered with the company. This assertion is further belied by the fact that documentary exhibits, i.e., previous receipts issued by appellant to appellee, prove that in October 1993, the latter already contracted the services of the former in several instances.
Perforce, there is no merit in appellant’s assertion that the loss of the subject goods is attributable to appellee’s act of diverting the truck to another destination and its failure to provide security for said delivery. Being part of the terms and conditions of the contract, the responsibility over said cargo remains with the appellant and the latter is thus liable for any loss or damage thereto pursuant to Article 1734 of the Civil Code, which states that “common carriers are responsible for the loss, destruction, or deterioration of the goods.”
Moreover, it is basic that a contract is the law between the parties. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. Unless the stipulations in a contract are contrary to law, morals, good customs, public order or public policy, the same are binding as between the parties.[12]
Indeed, appellant, having been engaged in the business of providing transportation services as a common carrier,[13] is contractually bound to observe extraordinary diligence in the vigilance over the goods transported by her. This extraordinary responsibility of common carriers lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them.[14] Thus, from the nature of her business and for reasons of public policy, appellant cannot plausibly deny liability in this case as stated in their contract.
Besides, as the records would show, appellant did not observe extra-ordinary diligence in the conduct of her business as a common carrier. In breach of their agreement, appellant did not provide security while the goods were in transit and she also did not pay for the insurance coverage of said goods. These measures could have prevented the hi-jacking or could have ensured the payment of the damages sustained by the appellee. Also, regardless of the efforts that she had exerted after the hijacking of the cargo truck, appellant stays liable to pay appellee of the attending damages.
We likewise find untenable the belated effort of the appellant to question the amount being claimed by the appellee in the present suit, especially so since said amount was already admitted by appellant in her responsive pleading. Besides, the mere fact that Selecta Feeds rejected the delivery of said goods does not ipso facto depreciate their value. Sans any proof to the contrary, appellant cannot simply and belatedly surmise that the value of the subject goods should be computed at a lower rate since the same had been rejected by the recipient.
One final note. It is settled that factual findings of the lower courts are entitled to great weight and respect on appeal, and in fact accorded finality when supported by substantial evidence on the record.[15] Perusing the records of this case, there is no cogent reason to deviate from this legal precept considering that the assailed Decision is in accord with the facts obtaining and the applicable law and jurisprudence. Appellant, as a common carrier, is liable for the loss of the goods subject matter of their contract.
Considering that they are supported by the evidence on record, this Court is in full accord with the disquisitions of the court a quo in awarding appellee its monetary claim equivalent to the amount of the loss that it had sustained due to the fault of the appellant.
WHEREFORE, the premises considered, the instant appeal is hereby DISMISSED and the assailed Decision dated January 3, 2012 AFFIRMED in toto.
IT IS SO ORDERED.
Bruselas, JR., A. D., Chairman, and [*]Paredes, V. I. A, JJ., concur.
[*]Acting Junior Member for 15 working days only from February 24-March 16, 2015 per Office Order No. 55-15-ABR dated February 23, 2015.
[1] Original Records, pp 881-886.
[2] Id. at p. 5.
[3] Id. at p. 6.
[4] Id. at p. 7.
[5] Id. at p. 8.
[6] Id. at pp. 1-4, sans annexes.
[7] Id. at pp. 28-31, sans annexes.
[8] Transcript of Stenographic Notes, August 5, 1997, pp. 6, 8.
[9] Transcript of Stenographic Notes, September 7, 1999, p. 9.
[10] Transcript of Stenographic Notes, March 26, 1996, at pp. 11-12.
[11] Original records, at pp. 267-269.
[12] Morla vs. Belmonte, G.R. No. 171146, December 7, 2011.
[13]Article 1732 of the Civil Code – Common 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 for compensation, offering their services to the public.
[14] Westwind Shipping Corporation vs. UCPB General Insurance Co., Inc., G.R. No. 200289, November 25, 2013.
[15] Spouses Bernales vs. Heirs of Sambaan, G.R. No. 163271, January 15, 2010.