Virgines Calvo doing business under the name

and style Transorient Container Terminal

Services, Inc. vs. UCPB General Insurance Co.,
Inc. (formerly Allied Guarantee Ins. Co., Inc.)

G.R. No.: 148496

Date: March 19, 2002

FACTS:

Virgines Calvo operated Transorient Container Terminal Services, Inc. (TCTSI),

a sole proprietorship customs broker. Under a contract with San Miguel
Corporation (SMC), TCTSI undertook to transport 114 reels of semi-chemical
fluting paper and 124 reels of kraft liner board from Manila Port Area to SMC's
warehouse. The cargo was insured by UCPB General Insurance Co., Inc. Upon
inspection, it was found that 15 reels of semi-chemical fluting paper and 3
reels of kraft liner board were damaged. SMC collected insurance from UCPB,
leading UCPB to sue TCTSI as subrogee to recover the amount.

ISSUES:

Is a customs broker who offers services to select clients a common carrier?

Is TCTSI liable for the damage to the goods?

RULING:

Pursuant to Article 1732 of the Civil Code, a customs broker, even if offering
services to select clients, is considered a common carrier if transportation of
goods is integral to their business. Article 1732 defines "common carriers" as
entities engaged in carrying or transporting passengers or goods for
compensation, offering their services to the public. The article does not
distinguish between primary or ancillary carriers, nor does it require services
to be offered to the entire public.

TCTSI is liable for the damage. Article 1735 of the Civil Code presumes
common carriers to be at fault or negligent in case of lost, destroyed, or
deteriorated goods, unless they prove observance of extraordinary diligence.
The burden of proof initially lies on the plaintiff to show the loss, destruction,
or deterioration, after which the carrier must prove extraordinary diligence.
TCTSI failed to prove such diligence and could not disprove the presumption of
negligence.
NOTES:

Extraordinary diligence in the vigilance over goods requires common carriers to

take all necessary precautions to prevent damage or destruction of entrusted
goods. The burden of proving extraordinary diligence rests on the carrier, and
the mere delivery of goods in good order and their subsequent delivery in bad
order shifts the burden of explanation to the carrier, failing which it is held
responsible.