6. Orient International vs. Keihin-Everett
DOCTRINE – 2176 does not apply when party’s negligence occurs in
performance of obligation. Negligent act gives rise to quasi-delict
only when basis for independent action where parties not bound by
contract
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Keihin-Everett entered into Trucking Agreement with
Matsushita. Keihin would provide services for Matsushita’s
trucking requirements. These services were subcontracted to
Orient International.
When trucking service agreement between keihin and
Matsushita expired, keihen executed an inhouse service
brokerage agreement for matsushita’s Philippine economic
zone authority operations. Keihinn continued to retain the
services of orient, which subcontracted to Schmitz
Matsushita called Keihin’s sales manager about a column on
a tabloid about a interception by Caloocan Police stolen
truck filled with shipment of video monitors and CCTVs
owned by Matsushita
Keihin contacted Orient which said that the tabloid had
blown out of proportion. They claimed that incident simply
involved the breakdown and towing of truck, which was
driven by Cudas with truck helper Aquino
Keihen directed Orient to investigate the matter further.
Orient reiterated that the truck merely broke down and had
to be towed.
However, when the shipment reached Japan, it was
discovered that 10 pallets worth $34k were missing
Keihen decided to investigate independently. It found that
Cudas told Aquino to report engine trouble to Orient. After
Aquino made the phone call, he informed Orient that the
truck had gone missing. Cudas had left him, and soon
became the subject of a manhunt.
When Keihenn confronted Orient, Orient apologized saying
that its report was erroneous.
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FACTS
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Matsushita terminated the in-house brokerage services
agreement with Keihin
Keihin demanded from Orient P2.5M as indemnity for lost
income. Orient refused to pay claiming good faith in its initial
findings. It further argues that nowhere is it found in their
contract with Keihin that it has to report hijacking incidents.
RTC ruled in favor of Keihin, finding Orient negligent.
CA affirmed
ISSUE – W/N Orient was negligent under 2176
HELD – YES
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Orient denies that it was obliged to disclose the facts
regarding the hijacking incident since such was not
stipulated in the contract. Keihin does not dispute this claim.
Orient’s negligence did not create the vinculum juris or legal
relationship with the respondent, which would have given
rise to a quasi delict. Orient’s duty existed prior to its
negligent act. When Keihin contacted Orient, its obligation
was created
The doctrine “the act that breaks the contract may also be
tort” is inapplicable here. Orient’s negligence stems not from
the trucking service agreement, but when it was contacted to
investigate and report on the matter.
The test to determine negligence is if the party exercised
due diligence. In this case, courts found that Orient was
negligent in failing to adequately report the hijacking incident
and not conducting a thorough investigation despite being
directed to do so.
Orient’s arguments that its acts were sound business
judgment lack merit. The circumstances should have alerted
Orient to investigate the incident in a more careful manner