FGU Insurance Corp. vs. GP Sarmiento Trucking Corp. and Lambert M.

Eroles

Facts
Respondent GP Sarmiento Trucking Company (GTS) undertook to transport cargoes
for Concepcion Industries Inc. when it collided with an unidentified truck, causing damage
to the cargoes. Petitioner, FGU, insurer of the shipment, paid to Concepcion Industries the
value of the covered cargoes. Then, as subrogee of Concepcion Industries Inc., petitioner
FGU sued GPS for breach of contract of carriage for reimbursement. Instead of filing an
answer, GPS filed a demurrer to evidence, claiming that it could not be held liable as a
common carrier because it was only a private carrier, being the exclusive hauler only of
Concepcion Industries Inc. since 1988.
The lower court granted the motion, ruling that plaintiff FGU failed to prove that GPS
was a common carrier. The CA affirmed the trial court's order.

Issue
Whether or not GPS is considered a common carrier and may be presumed negligent
and therefore liable for damages.

Ruling
The Supreme Court held that GPS cannot be considered a common carrier as it
renders service exclusively to Concepcion Industries; that notwithstanding, GPS cannot
escape from liability since in culpa contractual, mere proof of the existence of the contract
and the failure of its compliance justify prima facie a corresponding right of relief.
Respondent driver, however, who is not a party to the contract of carriage, may not be held
liable under the agreement without concrete proof of his negligence or fault.
Hence, the Supreme Court affirmed the assailed order of the trial court and the CA
insofar as the respondent driver was concerned, but GPS trucking company was ordered to
pay the petitioner FGU the value of the damaged and lost cargoes.