B2022 REPORTS ANNOTATED VOL [July 11.
2016]
Torres-Madrid Inc. vs FEB Mitsui Marine Insurance
Recit-ready summary
Sony contracted with TMBI to facilitate, process, withdraw and deliver the
shipment of electronic goods from the port of Manila to its warehouse.
TMBI subcontracted BMT for the usage of trucks in order to transport the
shipment to the warehouse. 4 BMT trucks picked the shipment but only 3
trucks arrived at the warehouse. The other truck was found to be abandoned
with the driver and goods missing.
Sony filed an insurance claim against Mitsui for the lost goods. Mitsui paid
for the value of the lost goods and went after TMBI. But TMBI refused to
pay saying that it was BMT’s driver who was the proximate cause of the
loss.
RTC declared that TMBI and BTC are solidarily liable based on Article
2941.
ISSUE: W/N TMBI and BMT are liable?
TMBI, being a broker, is still a common carrier since it undertakes the
delivery of goods to its customers. A common carrier is presumed to have
been at fault or to have acted negligently, unless it can prove that it
observed extraordinary diligence. However, theft or the robbery of the
goods is not considered a fortuitous event or a force majeure.
Despite the subcontract, TMBI is responsible for the cargo under Article
1736. That the cargo disappeared during transit while under the custody of
BMT — TMBI's subcontractor — did not diminish nor terminate TMBI's
responsibility over the cargo. Article 1735 presumes that it was at fault.
TMBI and BMT are not solidarily liable based on Article 2194. Article
2194 cannot apply in this case because it presupposes that there is a quasi-
delict. But TMBI’s liability to Mitsui is based on a breach of contract
because of the contract of carriage, and not a quasi-delict.
On the other hand, BMT is not directly liable to Sony/Mitsui even if the
cargo was loss under its custody because there was no direct contractual
relationship that existed between them.
It can be argued that Sony/Mitsui can go after BMT on a cause of action
arising from a quasi-delict pursuant to Article 2176 which states that a 3rd
G.R. NO: G.R. No. 194121
ARTICLE; TOPIC OF CASE: Partis; nature and liabilities of joint-tortfeasors
Torres-Madrid Inc. vs FEB Mitsui Marine Insurance
party suffering damage from the action of another due to the latter’s fault or
negligence.
However, Mitsui only filed against TMBI and did not sue BMT. BMT was
only included because TMBI sued it for reimbursement due to the liability
incurred from its contract of carriage with Sony/Mitsui. So there is no basis
to directly hold BMT liable for Mitsui for quasi-delict.
The subcontract between TMBI and BMT is a contract of carriage. Since
the cargo was lost in BMT’s custody, he is presumed to be at fault pursuant
to Article 1735 by failing to prove he exercised extraordinary diligence.
Therefore, BMT is liable for TMBI for breach of contract.
Sony is subrogated by Mitsui as insurer. Mitsui can go after TMBI for
breach of contract. TMBI can seek reimbursement from BMT for breach of
contract of carriage. BMT can either shoulder the loss or go after the
missing truck driver pursuant to Article 2181.
FACTS:
Sony engaged the services of TMBI (Torres-Madrid Brokerage Inc) to
facilitate, process, withdraw, and deliver the shipment of electronic
goods (from Thailand and Malaysia) from the port of Manila to its
warehouse in Biñan.
TMBI – who did not own any delivery trucks – subcontracted the services
of Benjamin Manalastas’ company, BMT Trucking Services, to transport
the shipment from the port to the Biñan warehouse. Incidentally, TMBI
notified Sony who had no objections to the arrangement.
4 trucks left BMT’s garage for Laguna. But only 3 trucks arrived at Sony’s
Biñan warehouse. At around 12 noon, the truck driven by Rufo Lapesura
was found abandoned along the Diversion Road in Filinvest, Alabang,
Muntinlupa City. Both the driver and the shipment were missing.
Sony filed an insurance claim with the Mitsui, - insurer of the goods. Mitsui
paid Sony 7, 293,386.23 corresponding to the value of the lost goods.
Mitsui sent a letter to TMBI a demand letter for payment of the lost goods.
TMBI refused to pay. As a result, Mitsui filed a complaint against TMBI.
PONENTE: Brion
DIGEST MAKER: Eon
 B2022 REPORTS ANNOTATED
Torres-Madrid Inc. vs FEB Mitsui Marine Insurance
TMBI impleaded Benjamin Manalastas, the proprietor of BMT. TMBI
claimed that BMT’s negligence as the proximate cause of the loss. TMBI
prayed that if it held liable to Mitsui for loss, it should be reimbursed by
BMT.
RTC: TMBI and Benjamin Manalastas are jointly and solidarily liable to
pay Mitsui P7, 293, 386.23 as actual damages based on Article 2914. TMBI
and Manalastas were common carriers and had acted negligently on the
basis o
CA held that
- hijacking is not a fortuitous event because the term refers to the
general stealing of cargo during transit.
- TMBI is a common carrier
- Even if the hijacking is a fortuitous event, TMBI failed to observe
extraordinary diligence in overseeing the cargo and adopting
security measures rendered it liable for loss
- Even if TMBI had not been negligent in the handling, transport
and delivery, it still breached its contractual obligation to Sony
when it failed to deliver the shipment.
TMBI: Hijacking is a fortuitous event. It is also not a common carrier
because it does not own a single truck to transport its shipment and it does
not offer transport services to the public for compensation. It insists that the
service it offered was limited to processing of paperwork attendant to the
entry of Sony’s goods. It denies that delivery of the shipment was a part of
its obligation.
BMT: It insists that hijacking was a fortuitous event that exonerates it from
liability. It also insists that it observed the required standard of car. BMT
blamed TMBI for the latter’s failure to adopt security measures to protect
Sony’s cargo.
MITSUI: Mitsui counters that neither TMBI nor BMT alleged or proved
during the trial that the taking of the cargo was accompanied with grave or
irresistible threat, violence, or force. Hence, the incident cannot be
considered "force majeure" and TMBI remains liable for breach of contract.
G.R. NO: G.R. No. 194121
ARTICLE; TOPIC OF CASE: Partis; nature and liabilities of joint-tortfeasors
VOL [July 11. 2016]
Torres-Madrid Inc. vs FEB Mitsui Marine Insurance
ISSUE: W/N TMBI and BMT are liable?
RULING:
A brokerage may be considered a common carrier if it also undertakes to
deliver the goods for its customers.
In A.F. Sanchez Brokerage, Inc. v. Court of Appeals: a customs broker —
whose principal business is the preparation of the correct customs
declaration and the proper shipping documents — is still considered a
common carrier if it also undertakes to deliver the goods for its customers.
Despite TMBI's present denials, we find that the delivery of the goods is an
integral, albeit ancillary, part of its brokerage services. TMBI admitted that
it was contracted to facilitate, process, and clear the shipments from the
customs authorities, withdraw them from the pier, then transport and deliver
them to Sony's warehouse in Laguna
TMBI should be held responsible for the loss, destruction, or deterioration
of the goods it transports unless it results from:
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 of 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.
For all other cases — such as theft or robbery — a common carrier is
presumed to have been at fault or to have acted negligently, unless it can
prove that it observed extraordinary diligence. Simply put, the theft or the
robbery of the goods is not considered a fortuitous event or a force majeure.
A common carrier may absolve itself of liability for a resulting loss
(1) if it proves that it exercised extraordinary diligence in transporting and
safekeeping the goods; or
(2) if it is stipulated with the shipper/owner of the goods to limit its
liability for the loss, destruction, or deterioration of the goods to a degree
less than extraordinary diligence.
However, a stipulation diminishing or dispensing with the common carrier's
liability for acts committed by thieves or robbers who do not act with grave
PONENTE: Brion
DIGEST MAKER: Eon
 B2022 REPORTS ANNOTATED
Torres-Madrid Inc. vs FEB Mitsui Marine Insurance
or irresistible threat, violence, or force is void under Article 1745 of the
Civil Code for being contrary to public policy.
Despite the subcontract, TMBI remained responsible for the cargo. Under
Article 1736, a common carrier's extraordinary responsibility over the
shipper's goods lasts from the time these goods are unconditionally placed
in the possession of, and received by, the carrier for transportation, until
they are delivered, actually or constructively, by the carrier to the
consignee.
That the cargo disappeared during transit while under the custody of BMT
— TMBI's subcontractor — did not diminish nor terminate TMBI's
responsibility over the cargo. Article 1735 of the Civil Code presumes that
it was at fault.
TMBI and BMT are not solidarily liable to Mitsui
The court does not agree that TMBI and BMT are solidarily liable to Mitsui
for the loss as joint tortfeasors. Article 2194 does not apply in this case.
TMBI's liability to Mitsui does not stem from a quasi-delict but from its
breach of contract. The tie that binds TMBI with Mitsui is contractual,
albeit one that passed on to Mitsui as a result of TMBI's contract of carriage
with Sony to which Mitsui had been subrogated as an insurer who had paid
Sony's insurance claim.
(Article 2194 presupposes that the liability of 2 or more persons are
predicated on a quasi-delict. But in this case, it was a breach of K not a
quasi delict)
The legal reality that results from this contractual tie precludes the
application of quasi-delict based Article 2194.
A 3rd party may recover from a common carrier for quasi-delict but must
prove actual negligence
BMT is not directly liable to Sony/Mitsui for the loss of the cargo. While it
is undisputed that the cargo was lost under the actual custody of BMT
(whose employee is the primary suspect in the hijacking or robbery of the
shipment), no direct contractual relationship existed between Sony/Mitsui
and BMT.
But if at all, Sony/Mitsui's cause of action against BMT could only arise
from quasi- delict, as a third party suffering damage from the action of
G.R. NO: G.R. No. 194121
ARTICLE; TOPIC OF CASE: Partis; nature and liabilities of joint-tortfeasors
VOL [July 11. 2016]
Torres-Madrid Inc. vs FEB Mitsui Marine Insurance
another due to the latter's fault or negligence, pursuant to Article 2176 of
the Civil Code.
Culpa contractual: Plaintiff only needs to establish the existence of the
contract and the obligor's failure to perform his obligation. It is not
necessary for the plaintiff to prove or even allege that the obligor's non-
compliance was due to fault or negligence because Article 1735 already
presumes that the common carrier is negligent. The common carrier can
only free itself from liability by proving that it observed extraordinary
diligence. It cannot discharge this liability by shifting the blame on its
agents or servants.
Culpa aquiliana: It must clearly establish the defendant's fault or negligence
because this is the very basis of the action. Moreover, if the injury to the
plaintiff resulted from the act or omission of the defendant's employee or
servant, the defendant may absolve himself by proving that he observed the
diligence of a good father of a family to prevent the damage.
In the present case, Mitsui's action is solely premised on TMBI's breach of
contract. Mitsui did not even sue BMT, much less prove any negligence on
its part. If BMT has entered the picture at all, it is because TMBI sued it for
reimbursement for the liability that TMBI might incur from its contract of
carriage with Sony/Mitsui. Accordingly, there is no basis to directly hold
BMT liable to Mitsui for quasi-delict.
BMT is liable to TMBI for breach of their contract of carriage
TMBI does not have to absorb the loss. By subcontracting the cargo
delivery to BMT, TMBI entered into its own contract of carriage with a
fellow common carrier.
The cargo was lost after its transfer to BMT's custody based on its contract
of carriage with TMBI. Following Article 1735, BMT is presumed to be
at fault. Since BMT failed to prove that it observed extraordinary diligence
in the performance of its obligation to TMBI, it is liable to TMBI for breach
of their contract of carriage.
IN SUM: Sony is subrogated by Mitsui as insurer. Mitsui can go after
TMBI for breach of contract. TMBI can seek reimbursement from BMT for
breach of contract of carriage. BMT can either shoulder the loss or go after
the missing truck driver pursuant to Article 2181.
PONENTE: Brion
DIGEST MAKER: Eon
 B2022 REPORTS ANNOTATED VOL [July 11. 2016]
Torres-Madrid Inc. vs FEB Mitsui Marine Insurance Torres-Madrid Inc. vs FEB Mitsui Marine Insurance

Disposition: Court orders that TMBI pay respondent Mitsui: actual (3) Act or omission of the shipper or owner of the goods;
damages, atty.’s fees, and cost of suit. Manalastas should reimburse TMBI (4) The character of the goods or defects in the packing or in the containers;
of the amounts. (5) Order or act of competent public authority.
Notes Article 1735. In all cases other than those mentioned in Nos. 1, 2, 3, 4, and
3 contracts: 5 of the preceding article, if the goods are lost, destroyed or deteriorated,
1. Brokerage Contract – Sony & TMBI common carriers are presumed to have been at fault or to have acted
2. Subcontract – TMBI & BMT negligently, unless they prove that they observed extraordinary diligence as
3. Insurance contract – Sony & Mitsui required in article 1733.
The goods were lost in BMT’s possession Article 2181. Whoever pays for the damage caused by his dependents or
employees may recover from the latter what he has paid or delivered in
Causes of action: satisfaction of the claim.
(1) Mitsui filed a case of breach of contract against TMBI only Compare (1) LRTA v. Navidad, (2) Sps. Pereña and (3) Torres-Madrid)!
(2) TMBI filed a 3rd party claim against BMT on the basis of breach of
contract.

Article 2194. The responsibility of two or more persons who are liable for
quasi-delict is solidary.
Article 2176. Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such fault
or negligence, if there is no pre-existing contractual relation between the
parties, is called a quasi-delict and is governed by the provisions of this
Chapter
Article 1733. Common carriers, from the nature of their business and for
reasons of public policy, are bound to observe extraordinary diligence in the
vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further
expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the
extraordinary diligence for the safety of the passengers is further set forth in
articles 1755 and 1756.
SUBSECTION 2. Vigilance Over Goods
Article 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following
causes only:
(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;
(2) Act of the public enemy in war, whether international or civil;

G.R. NO: G.R. No. 194121 PONENTE: Brion

ARTICLE; TOPIC OF CASE: Partis; nature and liabilities of joint-tortfeasors DIGEST MAKER: Eon