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Torres Madrid Brokerage Inc.

vs Feb Mitsui and BMT

Facts:
Sony engaged the services of Torres Madrid Brokerage (TMBI) to facilitate, process,
withdraw, and deliver the shipment of various electronic goods from Thailand at the port to
its warehouse in Bian, Laguna.
TMBI subcontracted the services of Benjamin Manalastas company, BMT Trucking services
(BMT) to transport the shipment as they do not own any delivery trucks. TMBI notified Sony
and had no objections of the arrangement.

4 BMT trucks picked up the shipment from the port on Oct. 7, 2000 but due to the truck ban
they could not undertake delivery immediately and bec the ff. Day was Sunday. BMT
scheduled delivery on Oct. 9 2000. October 9 early morning however, only 3 trucks arrived at
Sonys Bian warehouse. The 4th truck was seen abandoned along Diversion Road in
Filinvest, Alabang, Muntinlupa City at 12noon wherein both the driver Rufo Lapesura and
the shipments were missing.
Victor Torres, TMBIs general manager, filed with NBI against Lapesura forhijacking
TMBI notified Sony of the loss and sent BMT a letter demanding payment for the lost
shipment. BMT refused so insisting the goods were hijacked,.
SONY filed an insurance claim with the Mitsui, the insurer of goods. Mitsui paid Sony
P7,293,386.23. After being subrogated to Sonys rights, Mitsui sent TMBI a demand letter for
payment of the lost goods. TMBI refused to pay. Mitsui then filed a complaint against TMBI.
TMBI impleaded BMT as a 3rd party defendant, alleging BMTs driver responsible and claimed
BMTs negligence as the proximate cause. TMBI prayed that in te event it is held liable to
Mitsui, it should be reimbursed by BMT.
RTC found BMT and TMBI jointly and solidarily liable. That they have been doing business
since early 80s and the same incident happened on Sonys cargo in 1997 but neither sony
nor its insurer filed a complaint.
BMT AND TMBI appealed.
TMBI denied that it was a common carrier required to exercise extraordinary diligence and
that hijack is a fortuitous event.
BMT claimed that it exercised extraordinary diligence and ye loss result from a forfuitous
event.

Issue:
1. WON TMBI is a common carrier engaged in the business of transporting goods for
the general public for a fee
2. WON TMBI and BMT are solidarily liable to MITSUI
3. WON BMT is directly liable to Sony or Mitsui
4. WON BMT is liable to TMBI for breach of their contract of carriage

Ruling:

1.A brokerage may be considered a common carrier if it also undertakes to deliver the goods
for its customers. Common carriers are persons, corporations, firms or associations engaged
in the business of transporting passengers or goods or both, by land, water, or air, for
compensation, offering their services to the public. They are bound to observe extraordinary
diligence for reasons of public policy in the vigilance over the goods and in rhe safety of their
passengers. The law does not disringuish between one whose principal business activity is
the carrying of goods and one who undertakes this task only as an ancillary activity.TMBIs
delivery of the goods is an integral, albeit ancillary, part of its brokerage services. As long as
an entity holds itself to the public for the transport of goods as a business, it os considered a
common carrier regardless of whether it owns a vehicle or has actually to hire one.
Consequently, as in the case of theft or robbery of goods,, a common carrier is presumed to
have been at fault or to have acted negligently, unless it can prove that it observed
extraordinary diligence. And that a robbery attended by grave or irresistble threat, violence
or force is a fortuitous event that absolves the common carrier from liability.
In the present case, despite the subcontract, TMBI remained responsible for the cargo.
Under Article 1763, a common carriers extraordinary responsibility 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.TMBI simply argued that it was not a common carrier bound to observe
extraordinary diligence. Its failure to successfully establish this premise carries with it the
presumption of fault thus rendering it liably to Sony or Mitsui for breach of contract

2.NO. TMBIs liability to Mitsui does not stem from a quasi delict but from its breach of
contract. Th e tie that binds TMBI with Mitsui is contractual, albeit one that oassed on to
Mitsui as a result of TMBIs contract of carriage with Sony to which Mitsui had been
subrogated as an insurer. The legal reality that results from this contractual tie precludes the
application of quasi- delict

3.No. There is no direct contractual relationship existed between Sony/Mitsui. Mitsui did not
even sue BMT, much less prove any negligence on its part. There is no basis to directly hold
BMT Liable to Mitsui for quasi-delict

4.YES. By subcontracting the delivery, TMBI entered into its ownc contract of carriage with a
fellow common carrier. The cargo was lost after is transfer to BMTs custody based on its
contract with TMBI. Following Article 1735, BMT Is presumed to be at fault.Since BMT failed
to provethat it observed extraordinary diligence, it is liable to TMBI for breach of their
contract of carriage

TMBI is liable to Sony/Mitsui for breaching the contract of carriage. In turn, TMBI is entitled
to reimbursement from BMT due to the latters won breach of its contract of carriage with
TMBI