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Davao Stevedore Terminal Co., Inc.

vs Fernandez
54 OG 05 | November 23, 1957

FACTS: The plaintiff is a domestic corporation doing business in Davao City. It was engaged in the
stevedoring and dock-handling of outgoing and incoming cargoes for inter-island vessels docking at the
Sta. Ana Wharf in Davao City. Pursuant to a verbal contract entered into between the plaintiff and the
carrier Compania Maritima, the former handled the dockhandling work of the vessels owned and
operated by the Compania Maritima which called at the port of Davao City, consisting of receiving the
cargoes discharged from the hold of the vessels from the sling in the wharf and piling them at the wharf,
which cargoes were then taken by the consignees, and also, those from the truck of the shipper to the
sling in the wharf where they were loaded in the hold of the ship. To comply with the above duties, the
plaintiff utilized the services of the members of the Davao Stevedores Mutual Benefit Association, a labor
organization duly registered with the Department of Labor, with which it had a closed shop agreement.
The shippers and the consignees, most of whom were Chinese, were the one paying the plaintiff for the
dock-handling services. It appears that as early as January of 1951 there were already signs that the carrier
Compania Maritima was not satisfied with the services being rendered by the plaintiff-appellant. Cargoes
discharged from the vessels of the carrier were not being safeguarded adequately and were allowed to
be exposed to the elements at the Sta. Ana Wharf for considerable length of time that the carrier brought
to the attention of plaintiff the deplorable situation obtaining at the wharf, in answer, plaintiff advised
the Compania Maritima that cargoes while piled at the wharf were under the care and responsibility of
the carrier. After putting up, for some time, with that sad state of affairs at the wharf, the plaintiff was
notified by the Compania Maritima of the termination of their verbal contract. Efforts were then made by
the Compania Maritima to look for another party who would be satisfactory to the carrier. The Davao Port
Laborers Association was organized and registered as a labor union. And then it was hired by the
defendant and the Compania Maritima in turn entered into a contract with defendant to succeed the
plaintiff in dock-handling and stevedoring the cargoes discharged from its vessels. Plaintiff contends that
this was unfair competition.

HELD: We do not agree with plaintiff. Common carriers assume a heavy responsibility in the care and
vigilance over the goods transported by them. The law requires them to exercise extraordinary diligence
which means that they must render service with the greatest skill and utmost foresight. The extraordinary
diligence required of carriers in the handling of good of the shippers and consignees lasts from the time
the cargoes are loaded in the vessels until they are discharged and delivered to the consignees. To comply
with this weighty obligation, it is only meet and proper that carriers should be afforded the right of having
a wide discretion in the selection and supervision of persons who will handle the goods. Court cannot
withhold from the carriers this right without committing grave injustice. The act of the carrier, therefore,
in entering into a contract with the defendant for the latter to handle the stevedoring and dockhandling
service of the cargoes discharged from the vessel of the carrier appears to us to be well within the right
of the carrier to exercise. Nor can the defendant be held engaging in unfair competition simply because
he offered his services to the Compania Maritima which accepted the offer and formalized their
agreement in a written contract. Moreover, there is wanting in evidence acts of the defendant that will
show unfair competition. A good deal of the act attributed to defendant and regarded by appellant as
unfair competition were performed by the Compania Ma7ritima.