Is a Customs Broker a Common Carrier?
YES. And this is the story.
In 1992, WS Laboratories, Inc. (WS) imported via
airfreight from Germany oral contraceptives which
were packed in one aluminum container and in two
pallets. WS insured the shipment with LGU Insurance
(LGU).
Upon arrival of the shipment
at the Ninoy Aquino International Airport, it
was discharged "without exception" and
delivered to the PSI Warehouse for safekeeping.
Swift Brokerage, Inc. (Swift) as the customs broker
of WS through its representatives, paid the corresponding
duties, taxes and fees.
Upon receipt of the shipment,
a representative of Swift acknowledged that he
received the cargoes consisting of three pieces
in good condition. Swift delivered the cargoes
to WS. A representative of WS acknowledged the
delivery of the cargoes. But upon inspection,
he discovered some cartons were in bad order.
Thus, he placed a notation on the delivery receipt
that 44 cartons of oral contraceptives were in
bad order condition. The rest were accepted as
complete and in good order.
WS later demanded from Swift
the payment of the value of its loss arising from
the damaged contraceptives. But the latter refused.
WS filed an insurance claim against LGU and LGU
paid the claim of WS. And WS issued a subrogation
receipt in favor of LGU. On demand by LGU, Swift
disclaimed any liability. Hence, LGU filed a complaint
for damages before the Regional Trial Court. But
the trial court after trial on the merits, dismissed
the complaint.
On appeal, the Court of Appeals
reversed the decision of the trial court, holding
that Swift was engaged not only in the business
of customs brokerage but also in the transportation
and delivery of the cargo of its clients hence,
a common carrier within the context of the Civil
Code.
The motion for reconsideration
of Swift was denied by the Court of Appeals, prompting
Swift to elevate the case to the Supreme Court.
The Supreme Court ruled: "The appellate court
did not err in finding petitioner (Swift), a customs
broker, to be also a common carrier, as defined
under Article 1732 of the Civil Code x x x.
Article 1732 does not distinguish
between one whose principal business activity
is the carrying of goods and one who does such
carrying only as an ancillary activity. The contention,
therefore, of petitioner that it is not a common
carrier but a customs broker whose principal function
is to prepare the correct customs declaration
and proper shipping documents as required by law
is bereft of merit.
It suffices that petitioner undertakes
to deliver the goods for pecuniary consideration.
In this light, petitioner as a common carrier
is mandated to observe, under Article 1733 of
the Civil Code, extraordinary diligence in the
vigilance over the goods it transports according
to all circumstances of each case. In the event
that the goods are lost, destroyed or deteriorated,
it is presumed to have been at fault or to have
acted negligently, unless it proves that it observed
extraordinary diligence.
" Let us bear in mind that
a customs broker engaged not only in the business
of customs brokerage but also in the transportation
and delivery of the cargo/es of its clients is
a common carrier within the context of the Civil
Code.
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For comment or inquiries, contact
the writer at jtb@pac-atlantic.com.ph.
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Channel Archive : 2005 Q2
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