Case Digests on Contracts

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FACTS:

      SS/Alicante, belonging to Compania Transatlantica de Barcelona was transporting two locomotive boilers for the Manila Railroad Company.  The equipment of the ship for discharging the heavy cargo was not strong enough to handle the boilers.  Compania Transatlantica contracted the services of Atlantic gulf and Pacific Co., which had the best equipment to lift the boilers out of the ship’s hold.  When Alicante arrived in Manila, Atlantic company sent out its floating crane under the charge of one Leyden.  When the first boiler was being hoisted out of the ship’s hold, the boiler could not be brought out because the sling was not properly placed and the head of the boiler was caught under the edge of the hatch.  The weight on the crane was increased by a strain estimated at 15 tons with the result that the cable of the sling broke and the boiler fell to the bottom of the ship’s hold.  The sling was again adjusted and the boiler was again lifted but as it was being brought up the bolt at the end of the derrick broke and the boiler fell again.  The boiler was so badly damaged that it had to be shipped back to England to be rebuilt.  The damages suffered by Manila Railroad amounted to P23,343.29.  Manila Railroad then filed an action against the Streamship Company to recover said damages.  The Steamship Company caused Atlantic Company to be brought as co-defendant arguing that Atlantic Company as an independent contractor, who had undertaken to discharge the boilers had become responsible for the damage.

      The Court of First Instance decided in favor of Manila Railroad, the plaintiff, against Atlantic Company and absolved the Steamship Company.  Manila Railroad appealed from the decision because the Steamship Company was not held liable also.  Atlantic Company also appealed from the judgment against it. 

 

ISSUES:

1.      Was the Steamship Company liable to Manila Railroad for delivering the boiler in a damaged condition?

2.      Was Atlantic Company liable to the Steamship Company for the amount it may be required to pay the plaintiff?

1. Was Atlantic Company directly liable to plaintiff as held by the trial court?

RULING:

      There was a contractual relation between the Steamship Company and Manila Railroad.  There was also a contractual relation between the Steamship Company and Atlantic.  But there was no contractual relation between the Railroad Company and Atlantic Company.

      There was no question that the Steamship Company was liable to Manila Railroad as it had the obligation to transport the boiler in a proper manner safe and securely under the circumstances required by law and customs.  The Steamship Company cannot escape liability simply because it employed a competent independent contractor to discharge the boiler.

      Atlantic Company claimed that it was not liable, because it had employed all the diligence of a good father of a family and proper care in the selection of Leyden.  Said argument was not tenable, because said defense was not applicable to negligence arising in the course of the performance of a contractual obligation.  The same can be said with respect to the liability of Atlantic Company upon its contract with the Steamship Company.  There was a distinction between negligence in the performance of a contractual obligation (culpa contractual) and negligence considered as an independent source of obligation (culpa aquiliana).  Atlantic Company wasis liable to the Steamship Company for the damage brought upon the latter by the failure of Atlantic Company to use due care in discharging the boiler, regardless of the fact that the damage was caused by the negligence of an employee who was qualified for the work, duly chose with due care.

      Since there was no contract between the Railroad Company and Atlantic Company, Railroad Company can had no right of action to recover damages from Atlantic Company for the wrongful act which constituted...
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