Mercantile Law

LOADMASTERS CUSTOMS SERVICES v. GLODEL BROKERAGE G.R. No. 179446 January 10, 2011 Extraordinary Diligence


R&B Insurance issued a Marine Policy in favor of Columbia to insure the shipment of 132 bundles of electric copper cathodes against All Risks.

Columbia engaged the services of Glodel for the release and withdrawal of the cargoes from the pier and the subsequent delivery to its warehouses/plants.

Glodel, in turn, engaged the services of Loadmasters for the use of its delivery trucks to transport the cargoes to Columbia’s warehouses/plants in Bulacan and Valenzuela City.

The goods were loaded on board twelve trucks owned by Loadmasters, driven by its employed drivers and accompanied by its employed truck helpers.

The cargoes in six truckloads for Valenzuela City were duly delivered. However, of the six trucks en route to Bulacan, only five reached the destination. One truck failed to deliver its cargo.

The said truck was later recovered but without the copper cathodes. Columbia filed with R&B Insurance a claim for insurance indemnity. R&B Insurance paid Columbia the amount of ₱1,896,789.62 as insurance indemnity.

R&B Insurance, thereafter, filed a complaint for damages against both Loadmasters and Glodel, seeking reimbursement of the amount it had paid to Columbia for the loss of the subject cargo.

The RTC held Glodel liable for damages for the loss of the subject cargo and was ordered to pay R&B Insurance.

On appeal, the CA rendered the assailed decision holding Loadmasters liable to appellant Glodel for the insurance indemnity which Glodel had to pay to R&B Insurance Corporation.

Hence, Loadmasters filed the present petition.


  1. Whether or not Glodel and Loadmasters are common carriers.
  2. Define Extraordinary Diligence.
  3. Who between Glodel and Loadmasters, is liable to pay R&B Insurance for the amount of the indemnity it paid Columbia.



Loadmasters is a common carrier because it is engaged in the business of transporting goods by land, through its trucking service. It is a common carrier as distinguished from a private carrier wherein the carriage is generally undertaken by special agreement and it does not hold itself out to carry goods for the general public.

The distinction is significant in the sense that “the rights and obligations of the parties to a contract of private carriage are governed principally by their stipulations, not by the law on common carriers.”

In the present case, there is no indication that the undertaking in the contract between Loadmasters and Glodel was private in character. There is no showing that Loadmasters solely and exclusively rendered services to Glodel.

In fact, Loadmasters admitted that it is a common carrier.

In the same vein, Glodel is also considered a common carrier within the context of Article 1732. In its Memorandum, it states that it “is a corporation duly organized and existing under the laws of the Republic of the Philippines and is engaged in the business of customs brokering.”

It cannot be considered otherwise because as held by this Court in Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc., a customs broker is also regarded as a common carrier, the transportation of goods being an integral part of its business.


Loadmasters and Glodel, being both common carriers, are mandated from the nature of their business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over the goods transported by them according to all the circumstances of such case.

When the Court speaks of extraordinary diligence, it is that extreme measure of care and caution which persons of unusual prudence and circumspection observe for securing and preserving their own property or rights. This exacting standard imposed on common carriers in a contract of carriage of goods is intended to tilt the scales in favor of the shipper who is at the mercy of the common carrier once the goods have been lodged for shipment. Thus, in case of loss of the goods, the common carrier is presumed to have been at fault or to have acted negligently.

The Civil Code provides that the exercise of extraordinary diligence lasts from the time the goods are unconditionally placed in the possession of, and received by, the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them.

This presumption of fault or negligence, however, may be rebutted by proof that the common carrier has observed extraordinary diligence over the goods.


Doubtless, R&B Insurance is subrogated to the rights of the insured to the extent of the amount it paid the consignee under the marine insurance, as provided under Article 2207 of the Civil Code.

As subrogee of the rights and interest of the consignee, R&B Insurance has the right to seek reimbursement from either Loadmasters or Glodel or both for breach of contract and/or tort.

Premises considered, the Court is of the view that both Loadmasters and Glodel are jointly and severally liable to R & B Insurance for the loss of the subject cargo. Under Article 2194 of the New Civil Code, “the responsibility of two or more persons who are liable for a quasi-delict is solidary.”

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