Severally liable

Is a customs broker a common carrier? This is one of the questions answered in this case of ST Brokerage Corporation.

The case involved 545 hot rolled steel sheets in coil weighing 6,992,450 metric tons shipped from Russia to the port of Manila by a vessel of Russian Registry and owned by BS Shipping Corporation represented by its local agent ICS. The cargoes were consigned in favor of LGS and insured by Industrial Insurance Co. (IIC).

The vessel arrived at the port of Manila on October 24, 1991 and the Philippine Ports Authority assigned it a place of birth outside of the breakwater at the Manila South Harbor. Upon arrival of the shipment, LGS the consignee engaged the services of ST Brokerage Corporation to secure the requisite clearances, to receive the cargoes from the shipside, and to deliver them to the consignee’s warehouse. For this purpose, ST engaged the services of Transport Venture Inc (TVI) to send a barge and a tugboat at ship side.

On October 26, 1991, around 4:30 p.m., TVI sent its barge to shipside towed by a tugboat. The sea condition at the port of Manila at that time was quite moderate. By 7 p.m., the tugboat left and returned to the port terminal after positioning the barge at shipside. Then at about 9 p.m. the arrastre operator commenced to unload 37 of the 545 sheets from the vessel to the barge. By 12:30 a.m. of the following day October 27, the unloading unto the barge of the 37 coils was accomplished but no tugboat pulled the barge back to the pier. By that time the weather condition had become inclement and at around 5:30 a.m. the crew of the barge abandoned it and transferred to the vessel due to strong waves. The barge pitched and rolled until it capsized washing the 37 coils into the sea. So by the time the tug boat arrived at 7 a.m., it pulled an empty and damaged barge back to the pier.

Both the consignee LGS and the insurer IIC tried to retrieve the cargoes but it proved futile. Hence LGS filed a formal claim against IIC which paid the amount of P5,246,113.11. Upon signing by LGS of a subrogation receipt in favor of IIC, the latter sued ST Brokerage Corporation, TVI the barge and tug boat owner and BS Shipping which shipped the cargoes from Russia to Manila, through its local agent ICS for the recovery of the amount it paid to LGS, plus adjustment fees, attorney’s fees and litigation expenses. IIC faulted them for negligence that resulted in the loss of the cargoes. IIC alleged that all of them are common carriers and therefore should be held solidarily liable. This contention was upheld by the Courts. But ST Brokerage questioned the decision, arguing that it was only a broker agent of LGS in securing the release of the cargoes. Was ST correct?

No. ST is a common carrier as it undertook to transport the cargoes from the shipside of the vessel outside the breakwater to the consignee’s warehouse. As long as a person or corporation holds itself to the public for purposes of transporting goods as a business, it is already considered a common carrier regardless of whether it owns the vessel to be used or has to hire one. Customs broker is regarded as a common carrier since transportation of goods is an integral part of its business. Common Carriers are persons or corporations, firms or associations engaged in the business of carrying or transporting passengers or goods or both by land, water or air, for compensation, offering their services to the public (Article 1732, Civil Code). Article 1732 does not distinguish between one whose principal business activity is the carrying of goods and one which does such carrying only as an ancillary activity. It suffices that such person or corporation undertakes to deliver the goods for pecuniary consideration. To declare otherwise would be to deprive those with whom it contracts the protection which the law affords them notwithstanding the fact that the obligation to carry goods for its customers is part and parcel of its business. So ST Brokerage is jointly and severally liable to IIC together with BS Shipping and TVI (Schmitz Transport etc. vs. Transport Venture Inc. G.R. 150225, April 22, 2005. 456 SCRA 557).

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