Negros Navigation Co., Inc. v. BPI/MS Insurance Corp.

THIRD DIVISION

[G.R. No. 225877. June 7, 2017.]

NEGROS NAVIGATION COMPANY, INC., petitioner,vs. BPI/MS INSURANCE CORPORATION AND AGILITY LOGISTICS DISTRIBUTION, INC., respondents.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, Third Division, issued a Resolution dated June 7, 2017, which reads as follows:

"G.R. No. 225877(Negros Navigation Company, Inc. vs. BPI/MS Insurance Corporation and Agility Logistics Distribution, Inc.). — This petition for review on certiorari under Rule 45 of the Rules of Court assails the January 29, 2016 Decision 1 and June 21, 2016 Resolution 2 of the Court of Appeals (CA) in CA-G.R. CV No. 103364, affirming the Decision of the Regional Trial Court (RTC).

Facts

The facts, as culled from the CA records, are as follows:

On May 28, 2009, [BPI/MS Insurance] filed a complaint for damages against [Agility Logistics Distribution, Inc.], a corporation engaged in the business of transportation and forwarding of cargoes as a common carrier.

In its complaint, BPI/MS alleged that on July 31, 2008, Agility took and received from SONY PHILIPPINES ("SONY") two (2) twenty (20) footer containers loaded with various electronic products ("subject goods") at its warehouse in Balintawak, Quezon City. HTcADC

The subject goods were received by Agility in complete and in good order condition, which will be delivered and transported by Agility to various consignees in Bacolod City x x x.

Upon receipt of the subject goods, Agility issued a clean House Way Bill No. MNL0337994. However, Agility failed to perform its obligation in transporting safely the subject goods to the consignees, since prior to its delivery, the container WFHU-102895-3 fell, causing damages to the subject goods contained therein.

SONY then filed an insurance claim against BPI/MS. As cargo-insurer, BPI/MS paid SONY the amount of P980,233.87, representing the damages on the subject goods sustained by the shipment and its freight cost.

Consequently, BPI/MS subrogated to the rights and causes of action which SONY have against Agility. BPI/MS sent notices of claim and demanded Agility to pay. Despite such demand, Agility refused to pay BPI/MS without valid and justifiable grounds, prompting the latter to file the said complaint.

In its Answer with Special Affirmative Defenses and Compulsory Counterclaim, Agility admitted its receipt of the two (2) twenty (20) footer containers loaded with the subject goods for transportation and delivery to the consignees in Bacolod City.

Agility, however, denied that it failed to perform its obligation of transporting safely the subject goods for it contracted [Negros Navigation Company, Inc.] on August 1, 2008 to ship the said goods to the consignees in Bacolod City under the Bill of Lading No. A00493620.

Agility argued that on August 3, 2008, when the container van 102895-3 was on the 2nd high positioning, it slipped from linde 58 fork blade, causing the container van to fall on the ground and resulted to damages of the subject goods due to the negligence of Negros.

Agility also admitted that it received demand letters from BPI/MS but it politely declined to pay since the damages were incurred while the subject goods were in sole possession and custody of Negros. Agility further denied having knowledge of the insurance coverage on the subject goods and that BPI/MS paid SONY the amount of P980,233.07, representing the damages on the subject goods. CAIHTE

Claiming that it was unfounded and baseless, Agility prayed for the dismissal of the complaint and payment of actual damages and attorney's fees.

xxx xxx xxx

In its Third-Party Complaint with Compulsory Counterclaim, Agility alleged that on July 31, 2009, it took and received from SONY x x x the subject goods x x x for transportation and delivery x x x.

xxx xxx xxx

On August 3, 2008, while container van no. 102895-3 of Agility was being lifted by the personnel of Negros and upon reaching the second high positioning, said container van slipped from linde 58 fork blade causing said container van to fall to the ground thereby causing damages to all its contents therein in the amount of P980,233.07, representing the total value of the damaged shipment including freight cost of P36,406.55, to the prejudice of SONY.

xxx xxx xxx

By reason of the unjustified refusal of Negros to heed the just and lawful demands of Agility, the latter filed the said third-party complaint and prayed that Negros be held liable to refund and reimburse the total amount of damages which it may be adjudged liable to BPI/MS.

On February 3, 2010, Negros filed its Answer to Third-Party Complaint admitting that Agility contracted its services to transport the subject goods to Bacolod City but denied having received the same in good order and condition.

Negros alleged that the term of the shipment of the cargo was on a "shipper's load, stow and count," in which it has no opportunity to ascertain and inspect the condition and quality of the subject goods shipped.

xxx xxx xxx

Negros further denied the imputation of fault, carelessness nor negligence on its part when the said cargo was unloaded as it followed the procedure and did not deviate from the normal methods of operation and proper handling of the subject goods. x x x

In a Decision dated December 6, 2013, the RTC found Agility and Negros jointly and solidarily liable to BPI/MS. The fallo of the decision reads: aScITE

WHEREFORE, premises considered, judgment is hereby rendered declaring both the defendant and third party defendant liable to the plaintiff. Accordingly, defendant Agility Logistics Distribution, Inc. and Third Party Defendant Negros Navigation, Inc. are hereby ordered to pay plaintiff, jointly and severally, the amount of P980,233.87, representing the damages sustained by the subject shipment and freight cost, plus 12% interest from the filing of the Complaint on 28 May 2009 until full payment, attorney's fees in the amount equivalent to 15% of the total amount due and costs of the suit.

Third-party defendant Negros Navigation is ordered to reimburse defendant Agility Logistics Distribution, Inc. for whatever amount it will pay plaintiff pursuant to this case, with 12% interest per annum from date of Agility's payment to plaintiff until actual reimbursement by Negros Navigation. (emphasis Ours)

All the counterclaims of defendant Agility Logistics Distribution, Inc. and Third-party Negros Navigation Co. are hereby dismissed for lack of factual and legal basis.

SO ORDERED. 3

Only petitioner appealed to the CA.

Meanwhile, during the pendency of the appeal, on September 5, 2014, pursuant to the RTC Decision, Agility voluntarily paid the judgment obligation in the total amount of P1,814,452.11 to BPI/MS, without prejudice to its right to claim for reimbursement from Negros.

On January 29, 2016, the CA, in its assailed Decision, affirmed in toto the RTC Decision. Petitioner moved for, but was, denied reconsideration in the assailed CA Resolution dated June 21, 2016 for lack of merit.

Hence, this petition.

Issues

In its petition, Negros raises the following errors allegedly committed by the CA:

I. THE [CA] COMMITTED A SERIOUS, PALPABLE AND REVERSIBLE ERROR WHEN IT HELD PETITIONER JOINTLY AND SEVERALLY LIABLE WITH RESPONDENTS.

a. RESPONDENT AGILITY'S FAILURE TO APPEAL THE CASE, COUPLED WITH ITS ACT OF VOLUNTARILY PAYING RESPONDENTS THE JUDGMENT OBLIGATION IS AN ADMISSION OF LIABILITY.

b. IN THE REMOTE EVENT PETITIONER IS FOUND LIABLE IN THE CASE, THE LIABILITY SHOULD ONLY BE LIMITED TO THE VALUE DECLARED BY THE SHIPPER BY STIPULATION IN THE BILL OF LADING WHICH IS EQUIVALENT TO P500,000.00. DETACa

II. THE [CA] COMMITTED A PALPABLE ERROR WHEN IT HELD PETITIONER LIABLE BASED ON TORT WHICH REQUIRES ESTABLISHMENT OF FAULT OR NEGLIGENCE WHICH IS NOT PRESENT IN THE INSTANT CASE.

Succinctly put, the vital issue before Us is whether petitioner was correctly held solidarily liable with Agility.

Court's Ruling

The petition is partly meritorious.

We need not discuss Agility's responsibility because of its failure to interpose an appeal from the RTC decision resulting in the finality of the RTC decision as to it. The only issue that we should resolve is the matter of petitioner's liability.

We quote with approval the following ruling of the CA:

Corollary, Negros is solidarily liable with Agility for the damaged goods in view of the bill of lading Negros issued to Agility. A bill of lading is a written acknowledgment of the receipt of goods and an agreement to transport and to deliver them at a specified place to a person named or on his or her order. It operates both as a receipt and as a contract. It is a receipt for the goods shipped and a contract to transport and deliver the same as therein stipulated. Negros breached its contract when it failed to deliver the goods in the same description as stated in Bill of Lading No. A00493620. 4

To escape itself from liability, Negros contends that it was never privy to the contract entered into by Agility with Sony or BPI/MS, as subrogee. The appellate court, in its assailed Decision, ruled that while petitioner may not have a direct contractual relation with Sony or BPI/MS, it is liable under the provisions of Civil Code on quasi-delict, which reads: HEITAD

ART. 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.

We agree.

In Mindanao Terminal and Brokerage Service, Inc. v. Phoenix Assurance Company of New York/McGee & Co., Inc., We held that a tort may arise despite the absence of a contractual relationship, thus:

We agree with the Court of Appeals that the complaint filed by Phoenix and McGee against Mindanao Terminal, from which the present case has arisen, states a cause of action. The present action is based on quasi-delict, arising from the negligent and careless loading and stowing of the cargoes belonging to Del Monte Produce. Even assuming that both Phoenix and McGee have only been subrogated in the rights of Del Monte Produce, who is not a party to the contract of service between Mindanao Terminal and Del Monte, still the insurance carriers may have a cause of action in light of the Court's consistent ruling that the act that breaks the contract may be also a tort. In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract. In the present case, Phoenix and McGee are not suing for damages for injuries arising from the breach of the contract of service but from the alleged negligent mariner by which Mindanao Terminal handled the cargoes belonging to Del Monte Produce. Despite the absence of contractual relationship between Del Monte Produce and Mindanao Terminal, the allegation of negligence on the part of the defendant should be sufficient to establish a cause of action arising from quasi-delict. 5

The Court's ruling in Schmitz Transport & Brokerage Corporation v. Transport Venture is likewise instructive:

Should Prudent be made likewise liable? If at all, that liability could only be for tort under the provisions of Article 2176 and related provisions, in conjunction with Article 2180 of the Civil Code. x x x [O]ne might ask further, how then must the liability of the common carrier, on one hand, and an independent contractor, on the other hand, be described? It would be solidary. A contractual obligation can be breached by tort and when the same act or omission causes the injury, one resulting in culpa contractual and the other in culpa aquiliana, Article 2194 of the Civil Code can well apply. In fine, a liability for tort may arise even under a contract, where tort is that which breaches the contract. Stated differently, when an act which constitutes a breach of contract would have itself constituted the source of a quasi-delictual liability had no contract existed between the parties, the contract can be said to have been breached by tort, thereby allowing the rules on tort to apply. 6 (emphasis supplied)

In this case, it was Negros' negligence in handling the subject goods that breached the contract of transporting the goods safely to its intended destination.

Consequently, We agree with the lower courts' rulings that Negros is jointly and solidarily liable with Agility to BPI/MS, as subrogee, for the damaged goods. Under Article 2194 of the Civil Code, the responsibility of two or more persons who are liable for a quasi-delict is solidary. A solidary or joint and several obligation is one in which each debtor is liable for the entire obligation, and each creditor is entitled to demand the whole obligation. 7

It should be understood, though, that the solidary liability of Agility and Negros does not preclude the application of Article 1217 of the Civil Code on the paying debtor's right of reimbursement from its co-debtor, viz.: aDSIHc

Art. 1217. Payment made by one of the solidary debtors extinguishes the obligation. If two or more solidary debtors offer to pay, the creditor may choose which offer to accept.

He who made the payment may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made. If the payment is made before the debt is due, no interest for the intervening period may be demanded.

The above right of reimbursement of a paying debtor, and the corresponding liability of the co-debtors to reimburse, will only arise, however, if a solidary debtor who is made to answer for an obligation actually delivers payment to the creditor. Payment, which means not only the delivery of money but also the performance, in any other manner, of the obligation, is the operative fact which will entitle either of the solidary debtors to seek reimbursement for the share which corresponds to each of the other debtors. 8

Here, considering that Agility had already paid the entire amount of the judgment obligation to BPI/MS amounting to P1,814,452.11, Article 1217 of the Civil Code comes into play, recognizing its right of reimbursement from Negros' proportional share in the total monetary obligation.

As to the extent of petitioner's liability, We elucidated in Escao v. Ortigas, Jr., on the limit of the amount that may be recovered by the paying obligor from the others declared solidarily liable with him. We ruled, viz.:

In the case of joint and several debtors, Article 1217 makes plain that the solidary debtor who effected the payment to the creditor "may claim from his co-debtors only the share which corresponds to each, with the interest for the payment already made." Such solidary debtor will not be able to recover from the co-debtors the full amount already paid to the creditor, because the right to recovery extends only to the proportional share of the other co-debtors, and not as to the particular proportional share of the solidary debtor who already paid. In contrast, even as the surety is solidarily bound with the principal debtor to the creditor, the surety who does pay the creditor has the right to recover the full amount paid, and not just any proportional share, from the principal debtor or debtors. Such right to full reimbursement falls within the other rights, actions and benefits which pertain to the surety by reason of the subsidiary obligation assumed by the surety. 9

Petitioner concedes that, if found liable, its liability should be limited only to the value declared in the bill of lading. We agree. ATICcS

In Provident Insurance Corp. v. Court of Appeals, We held:

The bill of lading defines the rights and liabilities of the parties in reference to the contract of carriage. Stipulations therein are valid and binding in the absence of any showing that the same are contrary to law, morals, customs, public order and public policy. Where the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of the stipulations shall control. 10

The bill of lading subject of the present case specifically provides, among others:

4. CARRIER'S liability for loss or damage to uncontainerized cargo shall be limited to the value declared in the bill of lading, or the current replacement of the goods, whichever is lower.

In case of containerized cargo, the Carrier's liability for the loss of damage therefore, shall be that declared in the bill of lading, but in no case higher than the following amount depending on the size of the container and class of cargo:

Class A Cargo	Class B Cargo	Class C Cargo
P250,000 for each 10 footer	P150,000 for each 10 footer	P100,000 for each 10 footer
P500,000 for each 20 footer	P300,000 for each 20 footer	P200,000 for each 20 footer
P1,000,000 for each 40 footer	P600,000 for each 40 footer	P400,000 for each 40 footer 11

The above stipulations are, to Our mind, reasonable and just. In the bill of lading, the declared value of the subject goods was P500,000. As the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of the stipulations shall control. Hence, petitioner's liability shall be limited to the amount declared in the bill of lading, which is P500,000.

The 12% rate of interest per annum imposed by the courts a quo from date of Agility's payment to BPI/MS until actual reimbursement by Negros Navigation must, however, be modified. To be consistent with Nacar v. Gallery Frames, 12 and in accordance with Section 1, Resolution 796 of the Monetary Board of the Bangko Sentral ng Pilipinas dated May 16, 2013, the interest on the monetary awards shall then be fixed at 6% per annum, until satisfaction thereof. ETHIDa

WHEREFORE, premises considered, the petition is PARTLY GRANTED. The Court of Appeals Decision and Resolution dated January 29, 2016 and June 21, 2016, respectively, in CA-G.R. CV No. 103364 are AFFIRMED with the MODIFICATION that in view of Agility Logistics Distribution, Inc.'s payment, Negros Navigation Company, Inc. is ordered to reimburse Agility Logistics Distribution, Inc. the amount declared in the bill of lading as its proportional share in the judgment obligation, with 6% interest per annum from date of respondent Agility's payment on September 5, 2014 to respondent BPI/MS until actual reimbursement.

SO ORDERED."

Very truly yours,

(SGD.) WILFREDO V. LAPITANDivision Clerk of Court

Footnotes

1.Rollo, pp. 32-46. Penned by Associate Justice Magdangal M. De Leon and concurred in by Associate Justices Elihu A. Ybañez and Victoria Isabel A. Paredes, Seventh Division.

2.Id. at 47-48.

3.Id. at 38-39.

4.Id. at 43.

5. G.R. No. 162467, May 8, 2009, 587 SCRA 429, 434.

6. G.R. No. 150255, April 22, 2005, 456 SCRA 557, 573-574.

7.Inciong, Jr. v. Court of Appeals, G.R. No. 96405, June 26, 1996, 257 SCRA 578.

8.Navida v. Dizon, Jr., GR 125078, May 30, 2011, 649 SCRA 33, 89.

9. G.R. No. 151953, June 29, 2007, 526 SCRA 26, 44-45.

10. G.R. No. 118030, January 15, 2004, 419 SCRA 480, 483-484.

11. Records, p. 356-A.

12. G.R. No. 189871, August 13, 2013, 703 SCRA 439.