Ganzon vs. Court of Appeals

The Court held that a common carrier's extraordinary responsibility for goods under Article 1736 of the Civil Code begins from the moment the goods are unconditionally placed in its possession and received for transportation. The carrier is presumed to be at fault for loss or destruction unless it proves the cause falls under the enumerated exceptions in Article 1734, such as an "order or act of competent public authority." The Court found that an illegal order from a local official, issued as part of a shakedown attempt, does not constitute a valid exempting cause under this provision, nor does it qualify as caso fortuito or force majeure under Article 1174.

Gelacio Tumambing contracted Mauro Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to Manila. On December 1, 1956, Tumambing delivered the scrap iron to Ganzon's captain for loading onto the lighter "Batman." During loading, the Mayor of Mariveles demanded P5,000 from Tumambing and shot him during their argument. Loading later resumed, but on December 4, 1956, the Acting Mayor, accompanied by policemen, ordered the captain and crew to dump the scrap iron into the sea where the lighter was docked. The rest was taken to a nearby compound. Tumambing then sued Ganzon for damages based on culpa contractual.

• On November 28, 1956, Gelacio Tumambing contracted Mauro Ganzon to haul 305 tons of scrap iron from Mariveles, Bataan, to Manila.
• On December 1, 1956, Tumambing delivered the scrap iron to Ganzon's captain, Filomeno Niza, for loading onto the lighter "Batman." Loading commenced under the captain's supervision.
• During loading, Mayor Jose Advincula of Mariveles demanded P5,000 from Tumambing. After a heated argument, the mayor shot and wounded Tumambing, who was then taken to a hospital.
• Loading later resumed. On December 4, 1956, Acting Mayor Basilio Rub, accompanied by three policemen, ordered Captain Niza and his crew to dump the scrap iron where the lighter was docked in three feet of water. The rest was taken to the NASSCO compound.
• Acting Mayor Rub issued a receipt stating the Municipality of Mariveles had taken custody of the scrap iron.

• Petitioner argued the scrap iron had not been unconditionally placed in his custody and control, thus his liability had not commenced.
• He contended the loss was due to the intervention of municipal officials, which constituted a caso fortuito under Article 1174 of the Civil Code, exempting him from liability.
• He also argued the loss was due to an "order or act of competent public authority" under Article 1734(5) of the Civil Code.

• Respondent Tumambing argued that upon delivery of the scrap iron to the carrier's captain, the contract of carriage was perfected and the carrier's extraordinary responsibility commenced.
• He maintained the municipal officials' order was illegal and did not constitute a valid exempting cause, as it was part of an extortion attempt.
• He asserted the carrier failed to exercise extraordinary diligence and could have unloaded the cargo elsewhere to prevent loss.

• Procedural Issues: Whether the petitioner could change his theory on appeal from "order or act of competent public authority" to caso fortuito.
• Substantive Issues:
  1. Whether the carrier's extraordinary responsibility had commenced at the time of the loss.
  2. Whether the loss of the scrap iron was due to an excepted cause under Article 1734 of the Civil Code, specifically an "order or act of competent public authority" or caso fortuito/force majeure.

• Procedural: The Court refused to allow the petitioner to change his theory on appeal. His defense in the courts below was based on "order or act of competent public authority," and he could not shift to a caso fortuito argument at the Supreme Court level.
• Substantive:
  1. The Court held the carrier's extraordinary responsibility under Article 1736 commenced when the scrap iron was unconditionally delivered to and received by the carrier's captain for loading. The fact that part of the shipment was not yet loaded did not impair the contract.
  2. The Court found the loss was not due to an excepted cause. The order from the Acting Mayor was not a valid "order or act of competent public authority" because the official lacked power to issue it and it was part of an illegal shakedown. The carrier was not duty-bound to obey the illegal order. The intervention did not constitute force majeure as it did not render fulfillment impossible; the carrier could have unloaded the cargo elsewhere. The petitioner failed to prove he exercised extraordinary diligence.

• Extraordinary Responsibility of Common Carriers (Articles 1733, 1735, 1736, Civil Code) — Common carriers are bound to observe extraordinary diligence in the vigilance over goods. Their responsibility lasts from the time goods are unconditionally placed in their possession for transportation until delivery to the consignee. They are presumed at fault for loss or destruction unless they prove the cause falls under the specific exceptions in Article 1734.
• Fortuitous Event / Force Majeure (Article 1174, Civil Code) — A person is not liable for the loss of a thing due to a fortuitous event, which is an unforeseen or inevitable event. The Court ruled the illegal order of a public official does not qualify as force majeure if the carrier was not duty-bound to obey it and the event did not make fulfillment impossible.

• "By the said act of delivery, the scraps were unconditionally placed in the possession and control of the common carrier, and upon their receipt by the carrier for transportation, the contract of carriage was deemed perfected. Consequently, the petitioner-carrier's extraordinary responsibility for the loss, destruction or deterioration of the goods commenced."
• "The petitioner was not duty bound to obey the illegal order to dump into the sea the scrap iron. Moreover, there is absence of sufficient proof that the issuance of the same order was attended with such force or intimidation as to completely overpower the will of the petitioner's employees. The mere difficulty in the fulfillment of the obligation is not considered force majeure."

• Government of the Philippine Islands v. Ynchausti & Co. (G.R. No. 14191, September 29, 1919) — Invoked by petitioner based on Articles 361 and 362 of the Code of Commerce. The Court distinguished it, finding no incompatibility with the Civil Code provisions, and stated that Article 1733 of the Civil Code effectively modified any prior requirement of only ordinary diligence.

• Article 1734, Civil Code — Enumerates the excepted causes (e.g., natural disaster, act of public enemy, act of shipper, character of goods, "order or act of competent public authority") for which a common carrier is not presumed to be at fault.
• Article 1735, Civil Code — Establishes the presumption of fault or negligence against the common carrier for loss, destruction, or deterioration of goods, unless it proves the cause is under Article 1734 or that it exercised extraordinary diligence.
• Article 1736, Civil Code — Defines the period of the common carrier's extraordinary responsibility, from unconditional receipt of goods for transportation until their delivery.
• Article 1174, Civil Code — Defines fortuitous events (caso fortuito) as those which could not be foreseen or were inevitable, exempting from liability for breach of obligation.

• Justice Melencio-Herrera — Dissented, arguing the loss was due to an excepted cause: an "order or act of competent public authority" (Article 1734[5]). The Mayor's intervention and the Acting Mayor's order, backed by police, rendered the carrier's performance impossible. The seizure and destruction were done under legal process or authority, thus exempting the carrier from liability under Article 1743.