FGU Insurance Corporation v. G.P. Sarmiento Trucking Corp.

& Labmert Eroles

GR No. 141910
August 6, 2002

VITUG, J.:

FACTS:
GPS Sarmiento Trucking Corp (GPS) undertook to deliver 30 units of refrigerators to Conception
Industries (CI) with Lambert Eroles (Eroles) as the driver. During the trip the truck collided with another
truck and thus fell into the canal and damaged the refrigerators in the process.
FGU insurance corporation (FGU) paid CI, hence was subrogated for the claims against GPS. FGU
demanded reimbursement form GPS, but GPS paid no heed. FGU filled a complaint against GPS its driver
for breach of contract and damages. GPS claimed that they were the exclusive hauler for CI and its was
not engaged in the business as common carrier, along with a motion to dismiss
RTC ruled in favour of GPS and granted the motion to dismiss. The CA affirmed the decision since
they were on the topic of common carriers, and since it was not proven that GPU was a common carrier,
they could not be presumed negligent, and thus are not required to pay the reimbursement.

ISSUE:
1) Whether Eroles may be liable for the damages caused to the goods
2) Whether GPS, either as a common carrier or a private carrier, may be presumed to have been
negligent when the good it undertook to transport safely were subsequently damaged while
in its protective possession.

HELD:
No. Eroles cannot be held liable as it was not proven that he was a common carrier, hence
negligence cannot be presumed. Not being a party, to the contract of carriage between petitioner’s
principal and defendant may not be held liable under the agreement.

Yes damages may be sought. Since no evidence was submitted by the petitioners for proof that
GPS was a common carrier, the court of appeals and RTC were correct in their judgment that GPS is a
private carrier since it was stated that they are only rendering its services to no other individual or entity
other than CI, hence it is proper to be compensated through breach of contract (culpa contractual).
Under culpa contractual, breach upon the contract confers upon the injured party a valid cause
for recovering that which may have been lost. Thus, FGU has a claim for the amount paid out. The law
recognizing obligatory forces of contracts, will not permit a party to be set free from liability of any kind
of misperformance of the contractual undertaking or a contravention of the tenor thereof.