You are on page 1of 4


AFRICA, and the HEIRS OF DOMINGA ONG, petitioners-appellants,

G.R. No. L-12986 March 31, 1966

It appears that in the afternoon of March 18, 1948 a fire broke out at the Caltex service station at the corner of Antipolo street
and Rizal Avenue, Manila. It started while gasoline was being hosed from a tank truck into the underground storage, right at the
opening of the receiving tank where the nozzle of the hose was inserted. The fire spread to and burned several neighboring
houses, including the personal properties and effects inside them. Their owners, among them petitioners here, sued
respondents Caltex (Phil.), Inc. and Mateo Boquiren, the first as alleged owner of the station and the second as its agent in
charge of operation. Negligence on the part of both of them was attributed as the cause of the fire.

WON Caltex and Boquiren should be held liable for damages

This issue depends on whether Boquiren was an independent contractor, as held by the Court of Appeals, or an agent
of Caltex. This question, in the light of the facts not controverted, is one of law and hence may be passed upon by this Court.
These facts are:
(1) Boquiren made an admission that he was an agent of Caltex;
(2) at the time of the fire Caltex owned the gasoline station and all the equipment therein;
(3) Caltex exercised control over Boquiren in the management of the state;
(4) the delivery truck used in delivering gasoline to the station had the name of CALTEX painted on it; and
(5) the license to store gasoline at the station was in the name of Caltex, which paid the license fees.

Caltex admits that it owned the gasoline station as well as the equipment therein, but claims that the business
conducted at the service station in question was owned and operated by Boquiren. But Caltex did not present any contract with
Boquiren that would reveal the nature of their relationship at the time of the fire. There must have been one in existence at
that time. Instead, what was presented was a license agreement manifestly tailored for purposes of this case, since it was
entered into shortly before the expiration of the one-year period it was intended to operate. This so-called license agreement.

But even if the license agreement were to govern, Boquiren can hardly be considered an independent contractor.

To determine the nature of a contract courts do not have or are not bound to rely upon the name or title given it by
the contracting parties, should thereby a controversy as to what they really had intended to enter into, but the way the
contracting parties do or perform their respective obligations stipulated or agreed upon may be shown and inquired into, and
should such performance conflict with the name or title given the contract by the parties, the former must prevail over the

Wherefore, the decision appealed from is reversed and respondents-appellees are held liable solidarily to appellants,
and ordered to pay them the aforesaid sum of P9,005.80 and P10,000.00, respectively, with interest from the filing of the
complaint, and costs.
LIM TAN TONG and MANILA SURETY & FIDELITY CO., INC., defendants-appellants.
G.R. No. L-10517 June 28, 1957

In June, 1951, plaintiff Pearl Island Commercial Corporation, engaged in the manufacture of floor wax under the name
of "Bee Wax", in the City of Manila, entered into a contract, with defendant Lim Tan Tong, wherein the latter, designated as
sole distributor of said article in the provinces of Samar, Leyte, Cebu, Bohol, and Negros Oriental and all the provinces in the
island of Mindanao, was going to buy the said floor wax for resale in the territory above-mentioned. The plaintiff undertook not
to appoint any other distributor within the said territory; to sell to defendant Tong at factory price in Manila, F. O. B. Manila;
that Tong could sell the article in his territory at any price he saw fit; that payment for any floor wax purchased shall be
delivered to plaintiff within sixty days from the date of shipment; that (this is important) Tong was to furnish surety bond to
cover all shipments of the floor wax; and that Lim Tan Tong may return to the plaintiff the floor wax that are damaged or
unmerchantable, at its expense; and that in case of loss due to fortuitous event or force majeure, the plaintiff was to shoulder
the loss, provided the goods were still in transit.

Defendant Manila Surety & Fidelity Co., Inc., with Tong as principal, filed the surety bond (Exhibit B), binding itself
unto the plaintiff in the sum of P5,000, by reason of the appointment of Tong as exclusive agent for plaintiff for the Visayas-
Mindanao provinces, the bond being conditioned on the faithful performance of Tong’s duties, in accordance with the
agreement. It would appear that for its security, the Surety Company had Ko Su Kuan and Marciano Du execute in its favor an
indemnity agreement that they would indemnify said surety company in whatever amount it may pay to the plaintiff by reason
of the bond filed by it.

On June 18, 1951, plaintiff shipped 299 cases of Bee Wax, valued at P7,107, to Tong, duly received by the latter. Tong
failed to remit the value within sixty days, and despite the demand made by plaintiff on him to send that amount, he sent only
P770, leaving a balance of P6,337, which he admits to be still with him, but which he refuses to remit to the plaintiff, claiming
that the latter owed him a larger amount. To enforce payment of the balance of P6,337, plaintiff filed this present action not
only against Tong, but also against the Surety Company, to recover from the latter the amount of its bond of P5,000.

WON the Contract between the oearl island Commercial Corporation and Lim Tan Tong was one of agency so that breach
thereof would come within the terms of the surety bond

It is appellant's contention that it cannot be held liable on its bond for the reason that the latter was filed on the theory that the
contract between the plaintiff and Tong was one of agency as a result of which, said surety Company guaranteed the faithful
performance of tong as agent, but that it turned out that said contract was one of purchase and sale, shown by the very title of
said contract, namely, "Contract of Purchase and Sale", and appellant never undertook to guaranty the faithful performance of
Tong as a purchaser. However, a careful examination of the said contract shows that appellant is only partly right, for the
reason that the terms of the said contract, while providing for sale of Bee Wax from the plaintiff to Tong and purchase of the
same by Tong from the plaintiff, also designates Tong as the sole distributor of the article within a certain territory. Besides,
paragraph 4 of the contract entitled "Security", provides that tong was to furnish surety bond to cover all shipments made by
the plaintiff to him.

Under the circumstances, we are afraid that the Surety Company is not now in a position to deny its liability for the
shipment of the 299 cases of Bee Wax duly received by Tong and his failure to pay its value of P7,107, minus P770 or a balance
of P6,337, of course, up to the limit of P5,000, the amount of the bond.
HON. PEDRO A. RAMIREZ, Presiding Judge of the Court of First Instance of Manila, Branch XXX, OYAMA LINES, CITADEL LINES
and MABUHAY BROKERAGE CO., INC., respondents.
G.R. No. L-48264 February 21, 1980

On December 24, 1975, petitioner, a foreign insurance company authorized to do business in the Philippines thru its
agent, F. E. Zuellig Inc., filed an admiralty case against private respondents Oyama Shipping Co., Ltd. (referred to as Oyama
Lines), a foreign firm doing business in the Philippines, and Citadel Lines, Inc. which is the local agent of private, respondent
Oyama Shipping Co., Inc. and/or Mabuhay Brokerage Co., Inc.

Complaint alleged that on December 21, 1974, 60,000 bags of Urea Nitrogen were shipped from Niihama Japan, on
board the S/S St. Lourdes", claimed to be owned and operated by defendant Citadel Lines, Inc. The goods were consigned to
Borden International Phils., Inc., and insured by petitioner for the sum of P9,319,105.00 against all risks.

The shipment was discharged from the vessel S/S "St. Lourdes" shipside into lighters owned by Mabuhay Brokerage
Company, Inc., but when the same was subsequently delivered to and received by the consignee, it was found to have
sustained losses and/or damage amounting to P38.698.94. This amount was paid by petitioner insurance company to the
consignee/assured, by virtue of which payment it became subrogated to the rights of the latter.

Petitioner made repeated demands against herein private respondents for payment of the aforesaid losses or
damaged but no payment was made and, uncertain in whose custody the goods were damaged, impleaded the private
respondents as alternative defendants to determine their respective liability.

Defendant Citadel Lines, Inc. filed an Answer with Compulsory Counterclaim and Cross-claim, interposing special and
affirmative defenses and alleging that defendant Citadel Lines was merely the civil agent in the Philippines for the Japanese firm
Oyama Shipping Co., Ltd., which was the charterer of the vessel S/S "St. Lourdes", said vessel being owned by Companies
Maritime de Brios, Sociedad Anonima a Panamanian corporation. It was further alleged that the principal agency relationship
between the said Oyama Shipping Co., Ltd. and defendant Citadel Lines, Inc. was terminated on August 21, 1975 when the
Tokyo District Court declared and decreed the insolvency of the said Oyama Shipping Co., Ltd.

It was argued that defendant Citadel Lines "has always acted as an agent of a disclosed principal and, therefore, the
herein defendant is without any liability at all" in connection with the plaintiff's claim

WON respondent Citadel Lines, Inc., the local agent of a foreign ocean going vessel, the S/S "St. Lourdes", may be held primarily
liable for the loss/damage found to have been sustained by subject shipment while on board and/or still in the custody of the
said vessel

The Code of Commerce provides, among others, that the ship agent shall also be liable for the indemnities in favor of
third persons which arise from the conduct of the captain in the care of the goods which the vessel carried; but he may exempt
himself therefrom by abandoning the vessel with all her equipments and the freightage he may have earned during the voyage.
(Article 587).

At any rate, the liabilities of the ship agent are not disputed by private respondent. It appearing that the Citadel Lines
is the ship agent for the vessel S/S "St. Lourdes" at the port of Manila, it is, therefore, liable to the petitioner, solidarily with its
principal, Oyama Shipping Co., Ltd., in an amount representing the value of the goods lost and or damaged, amounting to
P38,698.94, which was likewise the amount paid by petitioner, as insurer, to the insured consignee As found by the court a quo,
there has been no proof presented to show that the officers of the vessel, in whose custody the goods were lost or damaged,
are exempt from liability therefrom and that the damage was caused by factors and circumstances exempting them from

The insolvency of Oyama Lines has no bearing on the instant case insofar as the liability of Citadel Lines, Inc. is
concerned. The law does does not make the liability of the ship agent dependent upon the solvency or insolvency of the ship

WHEREFORE, the decision appealed from is modified, and private respondent Citadel Lines, Inc. is hereby ordered to
pay, solidarily with its principal, Oyama Lines (Oyama Shipping Co., LTD.), the amount of P38,698.94, with interest thereon at
the legal rate from the date of the filing of the complaint on December 24, 1975 until fully paid, P5,000.00 as attorney's fees
and the costs of suit. The rest of the decision is affirmed. No pronouncement as to costs.