Table of Contents

TITLE PERSON ASSIGNED

Obligations of Common Carriers
1. Aboitiz Shipping Corporation vs. Von Claude Alingcayon
CA
2. Dangwa Transportation vs. CA Lucille Arianne Donato
3. LRTA vs. Navidad Dyrene Mara Rosario
4. La Mallorca vs. CA Anna-Patricia Bravo
5. Japan Airlines vs. CA Paulo Bautista
6. Phil. Airlines vs. CA Mazradain Gayle Carpio
7. Gacal vs. PAL Zarina Irish Martinez
8. Fortune Express, Inc. vs. CA Bryan Bautista
9. Pilapil vs. CA Gionico Pagulayan
10.Maranan vs. Perez Clinton Caramat
11.Singapore Airlines vs. Andion Algerico Cayetano
Fernandez
12.Fortune Express vs. CA Brenn Jay-ar Agamao
13.Bachelor Express vs. CA Keifer Athens Lacuata
14.De Gillaco vs. Manila Railroad Jaymart Bello
Company
15.Cathay Pacific Airways vs. CA Arvin Balageo
16.Mapa vs. CA Amor Manuel

Obligation of Shipper, Consignee

and Passenger
1. Isaac vs. A.L. Ammen Frederick Diong-an
Transportation
2. Compania Maritima vs. CA Jason Lambert Tomad
3. PNR vs. CA Laurice Pocais

Extraordinary Diligence
1. Standard Vacuum Oil vs. Luzon Melissa Madriaga
Stevedoring
2. Planters Products, Inc. vs. CA Ebony Gomgom-o
3. Mecenas, et al. vs. CA Kate Claire Odiem
4. Brinas vs. People of the Phils. Mercy Sayen
5. BLTB vs. IAC Jennifer Densen
6. Batangas Transportation Company Levi Mae Castro
vs. Caguimbal, et al.
7. Mallari vs. CA Ma. Clare Pascua
8. Nocum vs. Laguna Tayabas Bus Mavie Pinkihan
Company
9. PAL vs. CA Regine Noelle Ignacio
10.Vda. De Aberto vs PAL Mavie Pinkihan
 11.Japan Airlines vs. Michael Aileen Bangsoy
Asuncion, et al.

Bill of Lading
1. HE Heacock Company vs. Anna-Patricia Bravo
Macondray
2. Ong Yiu vs. CA Tedd Mabitazan
3. Sea- Land Services vs. IAC Chrissan Mae Poserio
4. Citadel Lines vs. CA Nadia Christine Mendiguarin
5. Everett Steamship Corporation Laurice Pocais
6. Saludo, Jr. vs. CA Brenn Jay-ar Agamao
7. Northwest Airlines vs. Cuenca Kate Claire Odiem
8. Alitalia vs. IAC Ebony Gomgom-o
9. Pan American World Airways vs. Levi Mae Castro
IAC
10.China Airlines vs. Daniel Chiok Mazradain Gayle Carpio
11.Santos III vs. Northwest Airlines Clinton Caramat
12.United Airlines vs. Willie UY Lucille Arianne Donato

Actions in Case of Breach of

Contract of Carriage
1. Fabre vs. CA Dyrene Mara Rosario
2. PhilAmGen Insurance vs. Jennifer Densen
Sweetlines
3. Ang vs. American Steamship Ma. Clare Pascua
Agencies
4. Mitsui vs. CA Jason Lambert Tomad
5. Fil Merchants vs. Alejandro Arvin Balageo
6. Mayer Steel Pipe Corp. vs. CA Bryan Bautista
7. Dole Phils. Vs. Maritime Company Zarina Irish Martinez
of the Phils.
8. Insurance Company of North Amor Manuel
Americavs. Asian Terminals, Inc.
9. Benjamin Cua vs. Wallen Chrissan Mae Poserio
Philippines Shipping, Inc.
ABOITIZ SHIPPING CORPORATION vs. HON. COURT OF APPEALS,
LUCILA C. VIANA, SPS.ANTONIO VIANA and GORGONIA VIANA, and
PIONEER STEVEDORING CORPORATION

G.R. No. 84458 November 6, 1989

REGALADO, J.:

Facts:

Anacleto Viana purchased a ticket and boarded the vessel M/V Antonia,
owned by Aboitiz Shipping bound for Manila. After said vessel had landed,
the Pioneer Stevedoring Corporation took over the exclusive control of the
cargoes loaded on said vessel pursuant to the Memorandum of Agreement
dated July 26, 1975 between the third party defendant Pioneer Stevedoring
Corporation and Aboitiz Shipping Corporation.

The crane owned by the third party defendant and operated by its
crane operator Alejo Figueroa was placed alongside the vessel and one (1)
hour after the passengers of said vessel had disembarked, it started
operation by unloading the cargoes from said vessel. While the crane was
being operated, Anacleto Viana who had already disembarked from said
vessel obviously remembering that some of his cargoes were still loaded in
the vessel, went back to the vessel, and it was while he was pointing to the
crew of the said vessel to the place where his cargoes were loaded that the
crane hit him, pinning him between the side of the vessel and the crane. He
was thereafter brought to the hospital where he later expired three (3) days
thereafter, the cause of his death according to the Death Certificate being
"hypostatic pneumonia secondary to traumatic fracture of the pubic bone
lacerating the urinary bladder". Vianas filed a complaint for damages against
Aboitiz for breach of contract of carriage.

In its answer, Aboitiz denied responsibility contending that the crane

operator was not an employee of Aboitiz, thus, he cannot be held liable
under the fellow-servant rule. He filed a third-party complaint against Pioneer
imputing liability thereto for Anacleto Viana's death as having been allegedly
caused by the negligence of the crane operator who was an employee of
Pioneer under its exclusive control and supervision.

Pioneer, in its answer to the third-party complaint, raised the defenses

that Aboitiz had no cause of action against Pioneer considering that Aboitiz is
being sued by the Vianas for breach of contract of carriage to which Pioneer
is not a party; that Pioneer had observed the diligence of a good father of a
family both in the selection and supervision of its employees as well as in the
prevention of damage or injury to anyone including the victim Anacleto
Viana; that Anacleto Viana's gross negligence was the direct and proximate
cause of his death; and that the filing of the third-party complaint was
premature by reason of the pendency of the criminal case for homicide
through reckless imprudence filed against the crane operator, Alejo Figueroa.

The trial court ordered Aboitiz to pay the Vianas for damages incurred,
and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter
paid the Vianas.

Both Aboitiz and Pioneer filed separate motions for reconsideration

wherein they similarly raised the trial court's failure to declare that Anacleto
Viana acted with gross negligence despite the overwhelming evidence
presented in support thereof. In addition, Aboitiz alleged, in opposition to
Pioneer's motion, that under the memorandum of agreement the liability of
Pioneer as contractor is automatic for any damages or losses whatsoever
occasioned by and arising from the operation of its arrastre and stevedoring
service.

In an order the trial court absolved Pioneer from liability for failure of
the Vianas and Aboitiz to preponderantly establish a case of negligence
against the crane operator which the court a quo ruled is never presumed,
aside from the fact that the memorandum of agreement supposedly refers
only to Pioneer's liability in case of loss or damage to goods handled by it but
not in the case of personal injuries, and, finally that Aboitiz cannot properly
invoke the fellow-servant rule simply because its liability stems from a
breach of contract of carriage.
 Not satisfied with the modified judgment of the trial court, Aboitiz
appealed the same to the Court of Appeals which affirmed the findings of the
trial court except as to the amount of damages awarded to the Vianas.

Hence, this petition.

Issues:

I. What is the diligence required in the performance of an obligation of

a common carrier?

II. What is the presumption as to the liability of the common carrier in

case of a passengers death or injury?

III. Whether or not the carrier-passenger relationship is terminated

upon reaching the passengers destination; thus terminates the
carriers obligation

IV. Whether or not the common carrier, Aboitiz, is liable

Held:

I. Under the law, common carriers are, from the nature of their
business and for reasons of public policy, bound to observe extraordinary
diligence in the vigilance over the goods and for the safety of the passengers
transported by them, according to all the circumstances of each case. More
particularly, a common carrier is bound to carry the passengers safely as far
as human care and foresight can provide, using the utmost diligence of very
cautious persons, with a due regard for all the circumstances.

II. Where a passenger dies or is injured, the common carrier is

presumed to have been at fault or to have acted negligently. This gives rise
to an action for breach of contract of carriage where all that is required of
plaintiff is to prove the existence of the contract of carriage and its non-
performance by the carrier, that is, the failure of the carrier to carry the
passenger safely to his destination, 18 which, in the instant case, necessarily
includes its failure to safeguard its passenger with extraordinary diligence
while such relation subsists.
The presumption is established by law that in case of a passenger's death or
injury the operator of the vessel was at fault or negligent, having failed to
exercise extraordinary diligence and it is incumbent upon it to rebut the
same. This is in consonance with the avowed policy of the State to afford full
protection to the passengers of common carriers which can be carried out
only by imposing a stringent statutory obligation upon the latter.

III. No. The carrier-passenger relationship is not terminated merely by

the fact that the person transported has been carried to his destination if, for
example, such person remains in the carrier's premises to claim his
baggage. The rule is that the relation of carrier and passenger continues until
the passenger has been landed at the port of destination and has left the
vessel owner's dock or premises. Once created, the relationship will not
ordinarily terminate until the passenger has, after reaching his destination,
safely alighted from the carrier's conveyance or had a reasonable
opportunity to leave the carrier's premises. All persons who remain on the
premises a reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this
rule is to be determined from all the circumstances, and includes a
reasonable time to see after his baggage and prepare for his departure.

IV. Yes. There is no showing that petitioner was extraordinarily diligent

in requiring or seeing to it that said precautionary measures were strictly and
actually enforced to subserve their purpose of preventing entry into the
forbidden area. By no stretch of liberal evaluation can such perfunctory acts
approximate the "utmost diligence of very cautious persons" to be exercised
"as far as human care and foresight can provide" which is required by law of
common carriers with respect to their passengers.

While the victim was admittedly contributorily negligent, still

petitioner's aforesaid failure to exercise extraordinary diligence was the
proximate and direct cause of, because it could definitely have prevented,
the former's death.
 DANGWA TRANSPORTATION CO., INC. VS. COURT OF APPEALS
G.R. NO. 95582, OCTOBER 7, 1991

FACTS:
Theodore Lardizabal was driving a passenger bus belonging to Dangwa
Transportation Co., Inc. The bus was at full stop between Bunkhouses 53 and
54 when Pedro Cudiamat alighted. However, the bus suddenly accelerated
forward and ran over Pedro. Theodore first brought his other passengers and
cargo to their respective destinations before bring Pedro to Lepanto Hospital
where he expired.

ISSUE:
Whether or not Dangwa Transportation Co., Inc. should be held liable
for the negligence of its driver Theodore.

HELD:
Yes. A public utility once it stops, is in effect making a continuous offer
to bus riders. The duty of the driver is not to make acts that would have the
effect of increasing peril to a passenger while he is attempting to board the
same. Stepping and standing on the platform of the bus is already
considered a passenger and is entitled to all the rights and protection
pertaining to such a contractual relation. Thus, the duty extends to boarding
and alighting. The general rule is by contract of carriage, the carrier assumes
the express obligation to transport the passenger to his destination safely
and observe extraordinary diligence with due regard to all circumstance.
 LIGHT RAIL TRANSIT AUTHORITY & RODOLFO ROMAN vs. MARJORIE
NAVIDAD
G.R. No. 145804, February 6, 2003
Vitug, J.

FACTS:
On 14 October 1993, Nicanor Navidad, then drunk, entered the EDSA
LRT station after purchasing a token (representing payment of the fare).
While Navidad was standing on the platform near the LRT tracks, Junelito
Escartin, the security guard assigned to the area approached Navidad and a
misunderstanding or an altercation between the two apparently ensued that
led to a fist fight. Navidad later fell on the LRT tracks. At the exact moment
that Navidad fell, an LRT train, operated by petitioner Rodolfo Roman, was
coming in. Navidad was struck by the moving train, and he was killed
instantaneously.

A complaint for damages was then filed against Escartin, Roman, the
LRTA, the Metro Transit Organization Inc. and Prudent for the death of
Navidad. The RTC then held that Prudent and Escartin were liable and it
ordered them to pay jointly and severally the damages for the death of
Navidad.

On appeal, the CA exonerated Prudent and Escartin from any liability

for the death of Navidad and held that LRTA and Roman jointly and severally
liable. It ruled that the contract of carriage had already existed when
Navidad entered the place where passengers were supposed to be after
paying the fare and getting the corresponding token therefor.

ISSUE:
Whether or not the LRTA and Roman are liable for the death of
Navidad.

RULING:
The law requires common carriers to carry passengers safely using the
utmost diligence of very cautious persons with due regard for all
circumstances. Such duty of a common carrier to provide safety to its
passengers so obligates it not only during the course of the trip but for so
long as the passengers are within its premises and where they ought to be in
pursuance to the contract of carriage. Thus, in this case, the foundation of
LRTAs liability is the contract of carriage and its obligation to indemnify the
victim arises from the breach of that contract by reason of its failure to
exercise the high diligence required of the common carrier. In the discharge
of its commitment to ensure the safety of passengers, a carrier may choose
to hire its own employees or avail itself of the services of an outsider or an
independent firm to undertake the task. In either case, the common carrier
is not relieved of its responsibilities under the contract of carriage.
 On the other hand, there is no showing that petitioner Roman himself
is guilty of any culpable act or omission, he must also be absolved from
liability. Needless to say, the contractual tie between the LRT and Navidad is
not itself a juridical relation between the latter and Roman; thus, Roman can
be made liable only for his own fault or negligence.
 LA MALLORCA VS. CA
G.R. NO. L-20761 JULY 27, 1966
BARRERA, J.

FACTS:

Plaintiffs, spouses, together with their minor daughters, boarded the

Pambusco Bus. The conductor, the half-brother of plaintiff Mariano Beltran,
issued three tickets covering the full fares of the plaintiff and their eldest
child. No fare was charged on Raquel and Fe, since both were below the
height at which fare is charged in accordance with the appellant's rules and
regulations. The bus reached Anao, Pampanga whereat it stopped to allow
the passengers to get off. The plaintiffs, carrying some of their baggages,
was the first to get down the bus. Mariano led his family to the side of the
road. He returned to the bus to get his other bayong but in so doing, his
daughter Raquel followed him, unnoticed by her father. While said Mariano
Beltran was on the running board of the bus waiting for the conductor to
hand him his bayong, the bus suddenly started moving forward, evidently to
resume its trip. Mariano immediately jumped from the running board without
getting his bayong from the conductor. He landed on the side of the road
almost in front of the place where he left his family. At that precise time, he
saw people beginning to gather around the body of Raquel (4 yrs. Old), his
child lying prostrate on the ground, her skull crushed, and without life, who
was run over by the bus in which she rode earlier together with her parents.

ISSUE:
Whether or not the bus company is liable for damages for the death of
the plaintiff.

RULING:

Yes, the relation of carrier and passenger does not cease at the
moment the passenger alights from the carrier's vehicle at a place selected
by the carrier at the point of destination, but continues until the passenger
has had a reasonable time or a reasonable opportunity to leave the carrier's
premises. In the first place, the driver, although stopping the bus,
nevertheless did not put off the engine. Secondly, he started to run the bus
even before the bus conductor gave him the signal to go and while the latter
was still unloading part of the baggages of the passengers Mariano Beltran
and family. The presence of said passengers near the bus was not
unreasonable and they are, therefore, to be considered still as passengers of
the carrier, entitled to the protection under their contract of carriage. In the
circumstances, it cannot be claimed that the carrier's agent had exercised
the "utmost diligence" of a "very cautions person" required by Article 1755 of
the Civil Code to be observed by a common carrier in the discharge of its
obligation to transport safely its passengers. There can be no controversy
that as far as the father is concerned, when he returned to the bus for his
bayong which was not unloaded, the relation of passenger and carrier
between him and the petitioner remained subsisting.

JAPAN AIRLINES (JAL) vs. COURT OF APPEALS

G.R. No. 118664, August 7, 1988, Romero, J.

FACTS:

Private respondents were passengers of JAL flight No. JL 001 from San
Francisco, California, and JAL flight No. JL o61 from Los Angeles, California,
both bound for Manila. As an incentive for traveling with the Japan Airlines,
private respondents were billeted at Hotel Nikko, Narita, Japan on June 14,
1991 for an overnight stopover at the airlines expense before proceeding to
Manila the next day. However, due to the Mt. Pinatubo eruption, unrelenting
ashfall blanketed Ninoy Aquino International Airport (NAIA) rendering it
inaccessible to airline traffic. Private respondents trip to Manila was
canceled indefinitely. JAL rebooked all the Manila-bound passengers on flight
No. 741 due to depart on June 16, 1991. However, the same flight was
canceled because the NAIA was closed indefinitely. At this point, JAL informed
private respondents that it would no longer defray their hotel and
accommodation expenses while in Narita.

On June 22, 1991, the NAIA was only reopened to airline traffic on June
22, 1991. Private respondents were forced to pay for their accommodations
and meal expenses from their personal funds from June 16 to June 21, 1991.

ISSUE:
Whether JAL, as a common carrier, has the obligation to shoulder the
hotel and meal expenses of its stranded passengers until they have reached
their final destination, even if the delay were caused by force majeure.

RULING:
 No. When the common carrier is unable to fulfill his obligation because
of force majeure, the general rule is that it cannot be held liable for
damages for non-performance, in the absence of bad faith or negligence. If
the fortuitous event was accompanied by neglect and malfeasance by the
carriers employees, an action for damages against the carrier is
permissible. Unfortunately, for private respondents, none of these conditions
are present in the instant petition.

The common carrier is not an insurer of risks. Adverse weather

conditions or extreme climactic changes are some of the perils involved in air
travel, the consequences of which the passenger must assume or expect.

However, JAL had the duty to make necessary arrangements to

transport private respondents on the first available connecting flight to
Manila. Petitioner JAL reneged on its obligation to look after the comfort and
convenience of its passengers when it declassified private respondents from
transit passengers to new passengers, as a result of which private
respondents were obliged to make the necessary arrangements themselves
for the next flight to Manila. Private respondents were placed on the
waiting list from June 20 to June 24. To assure themselves of a seat on an
available flight, they were compelled to stay in the airport the whole day of
June 22, 1991 and it was only at 8:00 PM of the aforesaid date that they were
advised that they could be accommodated in said flight which flew at about
9:00 AM the next day.

JAL is ordered to pay each of the private respondents nominal damages

in the sum of P100,000.00 each including attorneys fees of P50,000.00 plus
costs. Nominal damages are adjudicated in order that a right of a plaintiff,
which has been violated or invaded by the defendant, may be vindicated or
recognized and not for the purpose of indemnifying any loss suffered by him.
 Philippine Airlines vs Court of Appeals
226 scra 423 (1993)

FACTS:
Zapatos purchased a plane ticket from PAL. The planes route was from
Cebu-Ozamiz-Botabato. During the tour, PAL bypassed Ozamiz City due to
bad weather. When he was informed of the situation, the PAL gave him
options to choose from. Zapatos chose to return to Cebu City on the same
day. However, there were only 6 seats left and that the seats were given to
passengers according to their check-in sequence at Cebu. As a result, he was
stranded at Cotabato City.

In Cotabato City, PAL failed to provide accommodations for Zapatos,

refused to give him a ride to the City and lost his luggage. Zapatos filed a
complaint against PAL.

PAL responded that it shall not be bothered with looking after the
passengers comfort and convenience because the diversion of the flight was
due to the typhoon, a fortuitous event, being so will be over and beyond its
duties under the contract of carriage.

ISSUE:
Whether or not PALs duty to observe its duties and obligations under
the carriage of contract is extinguished in occurrence of a fortuitous event

HELD:
NO. The contract of carriage requires the common carries to carry the
passengers safely as far as human care and foresight can provide, using the
utmost diligence of a very cautious person, with due regard for all the
circumstances.

In this case, PAL as the common carrier failed miserably on exercising

its duties. The position taken by PAL in this case clearly illustrates its failure
to grasp the exacting standard required by law. Undisputably, PALs
diversion of its flight due to inclement weather was a fortuitous event.
Nonetheless, such occurrence did not terminate PALs contract with its
passengers. Being in the business of air carriage and the sole one to operate
in the country, PAL is deemed equipped to deal with situations as in the case
at bar. What we said in one case once again must be stressed, i.e., the
relation of carrier and passenger continues until the latter has been landed
at the port of destination and has left the carriers premises. Hence, PAL
necessarily would still have to exercise extraordinary diligence in
safeguarding the comfort, convenience and safety of its stranded passengers
until they have reached their final destination. On this score, PAL grossly
failed considering the then on-going battle between government forces and
Muslim rebels in Cotabato City and the fact that the private respondent was
a stranger to the place.
 G.R. No. L-55300 March 15, 1990

FRANKLIN G. GACAL and CORAZON M. GACAL, the latter assisted by

her husband, FRANKLIN G. GACAL, petitioners,
vs.
PHILIPPINE AIR LINES, INC., and THE HONORABLE PEDRO SAMSON C.
ANIMAS, in his capacity as PRESIDING JUDGE of the COURT OF FIRST
INSTANCE OF SOUTH COTABATO, BRANCH I, respondents.

G.R. No. L-55300 March 15, 1990

PARAS, J.:

Facts:

Franklin G. Gacal and his wife, Corazon, Bonifacio S. Anislag and his
wife, Mansueta, and the late Elma de Guzman, boarded a PAL flight to Manila
from the Davao Airport. Commander Zapata, and five other armed members
of the Moro National Liberation Front (MNLF), all passengers of the same
flight, hijacked the aircraft ten minutes after take off. The hijackers directed
the pilot to fly to Libya but upon the pilots explanation of the fuel
limitations, they relented and directed the aircraft to land at Zamboanga
Airport.

At the runway of the Zamboanga Airport, the aircraft was met by two
armored cars of the military with machine guns pointed at the plane. The
rebels demanded that a DC-aircraft take them to Libya with the President of
PAL as hostage and that they be given $375,000 and 6 armalites, otherwise
they will blow up the plane. The negotiations lasted for three days and it was
only on the third day that the passengers were served 1/4 slice of a sandwich
and 1/10 cup of PAL water. On the same day, relatives of the hijackers were
allowed to board the plane but immediately after they alighted therefrom, a
battle between the military and the hijackers ensued, culminating in the
liberation of the surviving crew and passengers, the death of 10 passengers
and 3 hijackers, and the capture of the 3 others.

Franklin G. Gacal was unhurt but his wife suffered injuries and was
hospitalized for 2 days. Bonifacio S. Anislag also escaped unhurt but Mrs.
Anislag suffered a fracture at the radial bone of her left elbow for which she
was hospitalized and operated on. Elma de Guzman died because of that
battle.
 The plaintiffs filed an action for damages demanding from PAL actual
damages for hospital and medical expenses and the value of lost personal
belongings, moral damages, attorneys fees and exemplary damages.
The trial court dismissed the complaints finding that all the damages
sustained in the premises were attributed to force majeure. Hence, this
petition.

Issue:

Whether or not PAL is liable for damages

Ruling:

NO. Under Art 1733 of the Civil Code, common carriers are required to
exercise extraordinary diligence in their vigilance over the goods and for the
safety of passengers transported by them, according so all the
circumstances of each case. They are presumed at fault or to have acted
negligently whenever a passenger dies or is injured or for the loss,
destruction or deterioration of goods in cases other than those enumerated
in Article 1734 of the Civil Code.

The source of a common carrier's legal liability is the contract of

carriage, and by entering into said contract, it binds itself to carry the
passengers safely as far as human care and foresight can provide. There is
breach of this obligation if it fails to exert extraordinary diligence according
to all the circumstances of the case in exercise of the utmost diligence of a
very cautious person.

It is the duty of a common carrier to overcome the presumption of

negligence and it must be shown that the carrier had observed the required
extraordinary diligence of a very cautious person as far as human care and
foresight can provide or that the accident was caused by a fortuitous event.
Thus, as ruled by this Court, no person shall be responsible for those "events
which could not be foreseen or which though foreseen were inevitable."
(Article 1174, Civil Code). The term is synonymous with caso fortuito which is
of the same sense as "force majeure".

In order to constitute a caso fortuito or force majeure that would

exempt a person from liability under Article 1174 of the Civil Code, it is
necessary that the following elements must concur: (a) the cause of the
breach of the obligation must be independent of the human will (the will of
the debtor or the obligor); (b) the event must be either unforeseeable or
unavoidable; (c) the event must be such as to render it impossible for the
debtor to fulfill his obligation in a normal manner; and (d) the debtor must be
free from any participation in, or aggravation of the injury to the creditor.
Caso fortuito or force majeure, by definition, are extraordinary events not
foreseeable or avoidable, events that could not be foreseen, or which,
though foreseen, are inevitable. It is, therefore, not enough that the event
should not have been foreseen or anticipated, as is commonly believed, but
it must be one impossible to foresee or to avoid. The mere difficulty to
foresee the happening is not impossibility to foresee the same (Republic v.
Luzon Stevedoring Corporation, 21 SCRA 279 [1967]).
 FORTUNE EXPRESS, INC., vs. COURT OF APPEALS, PAULIE U.
CAORONG, and minor children YASSER KING CAORONG, ROSE HEINNI
and PRINCE ALEXANDER, all surnamed CAORONG, and represented
by their mother PAULIE U. CAORONG
G.R. No. 119756
March 18, 1999
Ponente: Mendoza, J.:

Facts:
On November 22, 1989, three armed Maranaos who pretended to be
passengers, seized a bus of Fortune Express at Linamon, Lanao del Norte
while on its way to Iligan City. Among the passengers was Atty. Caorong. The
leader of the Maranaos, identified as one Bashier Mananggolo, ordered the
driver to stop the bus on the side of the highway. Mananggolo then shot the
driver on the arm, which caused him to slump on the steering wheel. Then
one of the companions of Mananggolo started pouring gasoline inside the
bus, as the other held the passengers at bay with a handgun. Mananggolo
then ordered the passengers to get off the bus. The passengers, including
Atty. Caorong, stepped out of the bus and went behind the bushes in a field
some distance from the highway.
However, Atty. Caorong returned to the bus to retrieve something from
the overhead rack. The driver who regained consciousness, heard Atty.
Caorong pleading with the armed men to spare the driver as he was innocent
of any wrong doing and was only trying to make a living. During this
exchange between Atty. Caorong and the assailants,the driver climbed out of
the left window of the bus and crawled to the canal on the opposite side of
the highway. He heard shots from inside the bus. Larry de la Cruz, one of the
passengers, saw that Atty. Caorong was hit. Then the bus was set on
fire. Some of the passengers were able to pull Atty. Caorong out of the
burning bus and rush him to the Mercy Community Hospital in Iligan City, but
he died while undergoing operation.
The private respondents brought this suit for breach of contract of
carriage in the Regional Trial Court, Branch VI, Iligan City.
Ruling of the RTC: The court dismissed the complaint because the
trial courts stand is that the diligence demanded by law does not include the
posting of security guards and it is not a guarantee that the killing would
have been definitely avoided. The death of Atty. Caorong was an unexpected
and unforeseen occurrence over which defendant had no control.
Ruling of the CA: The CA reversed the ruling of the RTC. Given the
circumstances obtaining in the case at bench that: (a) two Maranaos died
because of a vehicular collision involving one of appellees vehicles; (b)
appellee received a written report from a member of the Regional Security
Unit, Constabulary Security Group, that the tribal/ethnic group of the two
deceased were planning to burn five buses of appellee out of revenge; and
(c) appellee did nothing for the safety of its passengers travelling in the area
of influence of the victims, appellee has failed to exercise the degree of
diligence required of common carriers. Hence, appellee must be adjudged
liable.

Issues:
1 Whether or not Fortune Express can be held liable for the death of
Atty. Caorong.
2 Whether or not Fortune Express can be held liable for the incident of
the seizure of the bus by the Maranoaos.

Held:
1. Yes, Art. 1763 of the Civil Code provides that a common carrier is
responsible for injuries suffered by a passenger on account of the willful acts
of other passengers, if the employees of the common carrier could have
prevented the act the exercise of the diligence of a good father of a family. In
the case at bar, it can be seen that the negligence of petitioners employees
is the proximate cause of the seizure of the bus by Mananggolo and his men.
It was said that some maranaos are planning to take revenge on Fortune
Express by burning some of their buses. Notwithstanding this threats,
Fortune Express took no action in preventing such threat to materialize. No
such precautions were made by Fortune Express. Therefore, having failed to
exercise the due diligence that is required under law, Fortune Express is
liable for the death of Atty. Caorong.
2. Yes, Fortune Express is liable for the incident of the seizure of the
bus by the Maranaos. Art. 1174 of the Civil Code defines a fortuitous even as
an occurrence which could not be foreseen or which though foreseen,
is inevitable. In order to be considered as force majeure, it is necessary that:
(a) the cause of the breach of the obligation must be independent of
the human will;
(b) the event must be either unforeseeable or unavoidable;
(c) the occurrence must be such as to render it impossible for the
debtor to fulfill the obligation in a normal manner; and
(d)the obligor must be free of participation in, or aggravation of, the
injury to the creditor. The absence of any of the requisites mentioned above
would prevent the obligor from being excused from liability. (Cited from the
case of Yobido v. Court of Appeals)
Art. 1755 of the Civil Code provides that a common carrier is bound
to carry the passengers as far as human care and foresight can provide,
using the utmost diligence of very cautious person, with due regard for all
the circumstances. In the present case, this factor of is lacking. It is
because despite the report that the maranaos were planning to burn some of
petitioners buses that there should be necessary precautions would be
taken. But nothing was done.
Petitioner contends that Atty. Caorong was guilty of contributory
negligence in returning to the bus to retrieve something. What apparently
angered them was his attempt to help the driver of the bus by pleading
for his life. He was playing the role of the good Samaritan. Certainly, this act
cannot be considered an act of negligence, let alone recklessness.
 JOSE PILAPIL vs. CA and ATLACO TRANSPOTATION COMPANY, IIC.
G.R No. 52159 December 22, 1989
Padilla, J.:

FACTS:
Jose Pilapil, a paying passenger, boarded Atlaco bus at San Nicolas,
Iriga City at about 6:00 P.M. While said bus was in its course between Iriga
and Naga, an unidentified man, a bystander along said national highway,
hurled a stone at the left side of the bus, which hit petitioner above his left
eye. Respondent's personnel lost no time in bringing the petitioner to the
provincial hospital in Naga City where he was confined and treated. Despite
the treatment accorded to him, Jose Pilapil lost partially his left eye's vision
and sustained a permanent scar above the left eye.

Thereafter, Pilapil instituted before the Court of First Instance of

Camarines Sur, Branch I an action for recovery of damages sustained as a
result of the stone-throwing incident against Atlaco Transportaion Company.
The court ruled in favor of Pilapil. Respondent appealed to the Court of
Appeals, which reversed and set aside the decision of the Court of First
Instance.

ISSUE:
Whether or not the nature of the business of a transportation company
requires the assumption of certain risks, and the stoning of the bus by a
stranger resulting in injury to petitioner-passenger is one such risk from
which the common carrier may not exempt itself from liability

HELD:
The court held that in consideration of the right granted to the
common carrier under the Civil Code, to engage in the business of
transporting passengers and goods, a common carrier does not give its
consent to become an insurer of any and all risks to passengers and goods. It
merely undertakes to perform certain duties to the public as the law
imposes, and holds itself liable for any breach thereof. While the law requires
the highest degree of diligence from common carriers in the safe transport of
their passengers and creates a presumption of negligence against them, it
does not, however, make the carrier an insurer of the absolute safety of its
passengers.

Article 1763. A common carrier is responsible for injuries suffered by a

passenger on account of the willful acts or negligence of other passengers or
of strangers, if the common carrier's employees through the exercise of the
diligence of a good father of a family could have prevented or stopped the
act or omission.
 Clearly under the above provision, a tort committed by a stranger who
causes injury to a passenger does not accord the latter a cause of action
against the carrier. The negligence for which a common carrier is held
responsible is the negligent omission by the carrier's employees to prevent
the tort from being committed when the same could have been foreseen and
prevented by them. Further, under the same provision, it is to be noted that
when the violation of the contract is due to the willful acts of strangers, as in
the instant case, the degree of care essential to be exercised by the common
carrier for the protection of its passenger is only that of a good father of a
family.
 Maranan v. Perez
G.R. No. L-22272 June 26, 1967
Bengson, J., P.:

Facts:
Corachea was a passenger in a taxicab owned and operated by Perez
when he was stabbed and killed by the driver Valenzuela. The latter was
convicted of homicide by th Court of First Instance. While the case was
pending before the Court of Appeals, Coracheas mother filed an action in
the Court of First Instance to recover damages from Perez and Valenzuela for
the death of her son. Defendants asserted that the deceased was killed in
self-defense, since he first assaulted the driver by stabbing him from behind.
Perez further claimed that the death was a caso fortuito for which the carrier
was not liable. After trial, the court found for the plaintiff and awarded
damages against defendant Perez. The claim against defendant Valenzuela
was dismissed. Both plaintiff and defendant Perez appealed to the Court, the
former asking for more damages and the latter insisting on non-liability. The
Court of Appeals affirmed the conviction.

Issue:
Whether or not the owner and operator Perez should be civilly liable for
the death of the passenger Corachea

Ruling:
Yes. The Court ruled that the owner and operator Perez should be civilly
liable for the death of the passenger Corachea.
The new Civil Code of the Philippines expressly makes the common
carrier liable for intentional assaults committed by its employees upon its
passengers, by the wording of Art. 1759 which categorically states that

Common carriers are liable for the death of or injuries to passengers

through the negligence or willful acts of the former's employees,
although such employees may have acted beyond the scope of their
authority or in violation of the orders of the common carriers.

The basis of the carrier's liability for assaults on passengers committed

by its drivers rests either on (1) the doctrine of respondeat superior or (2) the
principle that it is the carrier's implied duty to transport the passenger safely.

Plaintiff's action was predicated on breach of contract of carriage and

the cab driver was not a party. His civil liability is covered in the criminal
case wherein he was convicted by final judgment.
 Singapore Airlines Limited vs. Andion Fernandez
G.R. No. 142305. December 10, 2003
Callejo, SR., J.:

Facts:
Respondent is an acclaimed soprano here in the Philippines and
abroad. While she was pursuing a Masters Degree in Music in Germany, she
was invited to sing before the King and Queen of Malaysia on February 3 and
4, 1991. The airline passage ticket was purchased from petitioner Singapore
Airlines which would transport her to Manila from Frankfurt, Germany on
January 28, 1991. From Manila, she would proceed to Malaysia on the next
day. It was necessary for the respondent to pass by Manila in order to gather
her wardrobe; and to rehearse and coordinate with her pianist her repertoire
for the aforesaid performance.

The petitioner issued the respondent a Singapore Airlines ticket for

Flight No. SQ 27, leaving Frankfurt, Germany bound for Singapore with
onward connections from Singapore to Manila. The petitioner missed the
connecting flight from Singapore to Manila, due to the late arrival of Flight
No. SQ 27 in Singapore leaving the respondent and other passengers
stranded.

The respondent never made it to Manila and was forced to take a direct
flight from Singapore to Malaysia, through the efforts of her mother and
travel agency in Manila. Her mother also had to travel to Malaysia bringing
with her respondents wardrobe and personal things needed for the
performance.

Issue:
Whether or not the petitioner failed to exercise extraordinary diligence.

Held:
The contract of air carriage is a peculiar one. Imbued with public
interest, the law requires common carriers to carry the passengers safely as
far as human care and foresight can provide, using the utmost diligence of
very cautious persons with due regard for all the circumstances.

When an airline issues a ticket to a passenger, confirmed for a

particular flight on a certain date, a contract of carriage arises. The
passenger then has every right to expect that he be transported on that
flight and on that date. If he does not, then the carrier opens itself to a suit
for a breach of contract of carriage. In an action for breach of contract of
carriage, the aggrieved party does not have to prove that the common
carrier was at fault or was negligent. All that is necessary to prove is the
existence of the contract and the fact of its non-performance by the carrier.
Since the petitioner did not transport the respondent, as covenanted by it on
said terms, the petitioner clearly breached its contract of carriage with the
respondent.

The defense that the delay was due to fortuitous events and beyond
petitioners control is unavailing. Being in the business of air carriage is
deemed to be equipped to deal with situations. If the cause of non-fulfillment
of the contract is due to a fortuitous event, it has to be the sole and only
cause, indeed, petitioner was not without recourse to enable it to fulfill its
obligation to transport the respondent safely as scheduled as far as human
care and foresight can provide to her destination.

The petitioners diligence in communicating to its passengers the

consequences of the delay in their flights was wanting. By knowing fully well
that even before the plaintiff boarded defendants Jumbo aircraft in Frankfurt
bound for Singapore, it has already incurred a delay of two hours.
Nevertheless, defendant did not take the trouble of informing plaintiff,
among its other passengers of such a delay. Such information should have
been given and inquiries made in Frankfurt.
 Fortune Express, Inc. v. Court of Appeals

G.R. No. 119756, 18 March 1999

Mendoza, J.

FACTS:

Fortune Express is a bus company operating somewhere in the region

of Mindanao, One incident happened wherein one of the bus unit of Fortune
Express figured in an accident with a jeepney, which results in the death of
several passengers, including two Maranaos. Generalao, a volunteer field
agent of the Philippine Constabulary conducted an investigation, and came
into a knowledge that the Maranaos are planning to have their revenge
against the bus company, which the safety of the lives and properties were
assured by their Operations Manager. The dreaded incident happened during
one of the voyage of a bus unit of the company, being maneuvered by their
driver Cabatuan. Two Maranaos went as passengers and during the voyage;
they seized the bus and even shot the driver in the arm in order to stop the
bus from cruising the road. They asked the passengers to disembark the bus,
while spilling gas on the bus with that of the body of the driver, Atty.
Caorong, one of the passengers, went inside to get something out of his
belongings when he saw that they are intending to burn the bus with that of
the driver. He pleaded that they should spare the life of the driver for he was
innocent from the earlier incident. During the commotion, the driver
managed to get out of the bus, thereafter a gunshot was heard. Another
passenger saw that Atty. Caorong was hittted and they pulled him out,
brought to the hospital, but was already pronounced dead while under
operation.

The private respondents brought this suit for breach of contract of

carriage in the Regional Trial Court, Branch VI, Iligan City. In its decision,
dated December 28, 1990, the trial court dismissed the complaint. On
appeal, however, the Court of Appeals reversed.

ISSUE:

1. Whether or not Fortune Express can be held liable for the death of
Atty. Caorong
 2. Whether or not Fortune Express can be held liable for the incident of
the seizure of the bus by the Maranoaos

RULING:

1. Yes, Art. 1763 of the Civil Code provides that a common carrier is
responsible for injuries suffered by a passenger on account of wilfull acts of
other passengers, if the employees of the common carrier could have
prevented the act through the exercise of the diligence of a good father of a
family. In the present case, it is clear that because of the negligence of
petitioner's employees, the seizure of the bus by Mananggolo and his men
was made possible. Despite warning by the Philippine Constabulary at
Cagayan de Oro that the Maranaos were planning to take revenge on the
petitioner by burning some of its buses and the assurance of petitioner's
operation manager, Diosdado Bravo, that the necessary precautions would
be taken, petitioner did nothing to protect the safety of its passengers. From
the foregoing, it is evident that petitioner's employees failed to prevent the
attack on one of petitioner's buses because they did not exercise the
diligence of a good father of a family. Hence, petitioner should be held liable
for the death of Atty. Caorong.

2. No, Art. 1174 of the Civil Code defines a fortuitous event as an

occurrence which could not be foreseen, is inevitable. In Yobido v. Court of
Appeals, the court held that to considered as force majeure, it is necessary
that (1) the cause of the breach of the obligation must be independent of the
human will; (2) the event must be either unforeseeable or unavoidable; (3)
the occurrence must be render it impossible for the debtor to fulfill the
obligation in a normal manner; and (4) the obligor must be free of
participation in, or aggravation of, the injury to the creditor. The absence of
any of the requisites mentioned above would prevent the obligor from being
excused from liability. Art. 1755 of the Civil Code provides that "a common
carrier is bound to carry the passengers as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with due
regard for all the circumstances." Thus, the Court held in Pilapil and De
Guzman that the respondents therein were not negligent in failing to take
special precautions against threats to the safety of passengers which could
not be foreseen, such as tortious or criminal acts of third persons. In the
present case, this factor of unforeseeability (the second requisite for an
event to be considered force majeure) is lacking. As already stated, despite
the report of PC agent Generalao that the Maranaos were planning to burn
some of petitioner's buses and the assurance of petitioner's operation
manager (Diosdado Bravo) that the necessary precautions would be taken,
nothing was really done by petitioner to protect the safety of passengers.
 Bachelor Express, Inc. vs. Court of Appeals
G.R. No. 85691, July 31, 1990
Gutierrez, Jr., J.
Facts:
Bus No. 800 owned by the Bachelor Express, Inc. and being driven by
Cresencio Rivera, was the situs of a stampede which resulted in the death of
passengers Ornominio Beter and Narcisa Rautraut.

The cause of the stampede was when a passenger suddenly stabbed a

PC soldier. When the bus stopped, it was found that the deceases were lying
on the road. The passenger who stabbed the soldier alighted and ran
towards nearby bushes but thereafter killed by shot by the police.

The heirs of the deceased passengers Ornominio Beter and Narcisa

Rautraut filed a complaint for sum of money against the petitioners, alleged
owner Samson Yasay and the driver Cresencio Rivera.

The petitioners denied liability alleging that there was transport of the
passengers to their designated place of destination and the corporation
exercised due diligence in the choice of its employees.

They also allege that the incident was beyong the control and foresight
that human care can provide.

The trial court dismissed the complaint, however the Court of Appeals
reversed and set aside the decision of the trial court.

Issue:
Whether or not there is liability on the part of the common carrier even
if the passengers jump off from the running bus.

Held:
The Supreme Court held that the term caso fortuito the Enciclopedia
Juridica Espaola says: 'In a legal sense and, consequently, also in relation to
contracts, a caso fortuito presents the following essential characteristics: (1)
The cause of the unforeseen and unexpected occurrence, or of the failure of
the debtor to comply with his obligation, must be independent of the human
will. (2) It must be impossible to foresee the event which constitutes the caso
fortuito, or if it can be foreseen, it must be impossible to avoid. (3) The
occurrence must be such as to render it impossible for the debtor to fulfill his
obligation in a normal manner. And (4) the obligor (debtor) must be free from
any participation in the aggravation of the injury resulting to the creditor.

Thus the running amuck of the passenger was the proximate cause of
the incident that triggered off the commotion and panic among the
passengers such as to cause the stampede which lead to the death of the
two passengers is caso fortuito.

However, the common carrier is still liable according to the following

provisions of the Civil Code:
ART. 1755. A common carrier is bound to carry the
passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons,
with a due regard for all the circumstances.

ART. 1756. In case of death of or injuries to passengers, common

carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary
diligence as prescribed in Articles 1733 and 1755.

The common carrier did not observe extraordinary diligence in the

safeguard of the lives of its passengers, as evidenced in that when at the
time of the commotion, the bus did not stop but it continued to a speeding
full stop.
 De Gillaco vs Manila Railroad Company
G.R. No. L-8034 November 18, 1955
Reyes, J.B.L. J.

Facts:
On April 1, 1946, Lieut. Tomas Gillaco, the husband of the herein
plaintiff, rode on one of the trains of Manila Railroad Company coming from
Calamba, Laguna to Manila. Upon reaching Paco Railroad Station, Emilio
Devesa, a train security guard of Manila Railroad Company, rode the same
train where he saw Gillaco whom he had a long personal grudged. He then
and there shot Gillaco who died thereof. He was convicted of the crime of
homicide by final judgment. During the killing, what was enforced was the
Civil Code of 1889 and so the latter is used.

Issue:
Whether or not liability is attached to the Manila Railroad Company in
the act of Devesa.

Held:
No. The court held that the supposed source of liability of the herein
defendant is the contract of carriage. However, the court ruled too under
article 1105 of the Civil Code that if an event is unforeseen, there is no
liability to be imposed. In the case at bar, the court held that the act of
Devesa is a fortuitous event under Art. 105 of the Old Civil Code. Further,
The court relied on the rulings of the American cases specifically the one
given by the supreme court of Texas holding that liability attaches to the
employer if the employee is clothed with delegated authority and charged
with the duty by the carrier to exercise his undertaking with the passenger.
Clearly, Devesa was not. Thus, his acts cannot make Manila Railroad
Company liable to the victim.
CATHAY PACIFIC AIRWAYS, LTD vs. COURT OF APPEALS and TOMAS L.
ALCANTARA
G.R. No. 60501. March 5, 1993
BELLOSILLO, J p:

FACTS:
On 19 October 1975, respondent Tomas L. Alcantara was a first class
passenger of petitioner Cathay Pacific Airways from Manila to Hong Kong and
onward from Hong Kong to Jakarta. The purpose of his trip was to attend the
following day, October 20, 1975, a conference with the Director General
of Trade of Indonesia. He checked in his luggage which contained not only his
clothing and articles for personal use but also papers and documents he
needed for the conference. Upon his arrival in Jakarta, respondent discovered
that his luggage was missing. Private respondent was told that his luggage
was left behind in Hong Kong. For this, respondent Alcantara was offered
$20.00 as inconvenience money" to buy his immediate personal needs until
the luggage could be delivered to him. The respondent, as a result of the
incident had to seek postponement of his pre-arranged conference. When his
luggage finally reached Jakarta more than twenty four hours later, it was not
delivered to him at his hotel but was required by petitioner to be picked up
by an official of the Philippine Embassy. Respondent filed a case for damages
in the CFI of Lanao del Norte which ruled in his favour. Both parties appealed
to the Court of Appeals. Court of Appeals rendered its decision affirming the
decision of the CFI but by modifying its awards by increasing the damages

ISSUE:
Whether or not the Court of Appeals erred in not applying the Warsaw
Convention to limit the liability of the respondent airline.

RULING:
No. The Warsaw Convention has the force and effect of law in this
country, being a treaty commitment assumed by the Philippine government,
said convention does not operate as an exclusive enumeration of the
instances for declaring a carrier liable for breach of contract of carriage or as
an absolute limit of the extent of that liability. The Warsaw Convention
declares the carrier liable for damages in the enumerated cases and under
certain limitations. However, it must not be construed to preclude the
operation of the Civil Code and other pertinent laws. It does not regulate,
much less exempt, the carrier from liability for damages for violating the
rights of its passengers under the contract of carriage, especially if willful
misconduct on the part of the carrier's employees is found or established,
which is clearly the case before Us. For, the Warsaw Convention itself
provides in Art. 25 that (1) The carrier shall not be entitled to avail himself of
the provisions of this convention which exclude or limit his liability, if the
damage is caused by his willful misconduct or by such default on his part
as, in accordance with the law of the court to which the case is submitted, is
considered to be equivalent to willful misconduct.
 PURITA S. MAPA, CARMINA S. MAPA and CORNELIO P. MAPA v COURT
OF APPEALS and TRANS-WORLD AIRLINES INC
G.R. No. 122308, July 8, 1997
DAVIDE, JR., J.:
Facts:
Petitioners entered into contract of air transportation with defendant
TWA as evidence by TWA ticket purchased in Bangkok, Thailand. The tickets
were for Los Angeles-New York-Boston-St. Louis-Chicago. On August 10,
1990, plaintiffs Carmina and Purita left Manila on board PAL flight No. 104 for
Los Angeles. Carmina was to commence schooling and thus was
accompanied by Purita to assist her in settling down at the University. They
arrived Los Angeles on the same date and stayed there until August 14, 1990
when they left for New York City.On August 14, 1990, plaintiffs Purita and
Carmina S. Mapa arrived at the John F. Kennedy (JFK) Airport, New York, on
TWA Flight No. 904. On August 27, 1990, plaintiffs Purita and Carmina S.
Mapa departed for Boston, taking a connecting flight on TWA's carrier, TW
0901, from JFK Airport, New York, to Boston's Logan Airport, checking in
seven (7) pieces of luggage at the TWA counter in the JFK Airport. The seven
baggages were received by a porter who issued seven TWA baggage
receipts.Upon arriving in Boston, plaintiffs Purita and Carmina proceeded to
the carousel to claim their baggages and found only three out of the seven
they checked in. TWA's representative confidently assured them that their
baggages would be located within 24 hours and not more than 48 hours..
The total value of the lost items amounted to $11,283.79.On September 20,
1990, plaintiff's counsel wrote indemnification for the grave damage and
injury suffered by the plaintiffs.TWA again assured plaintiffs that intensive
search was being conducted. Plaintiff initiated an action for damages before
the Regional Trial Court of Quezon City for damages but the case was
dismissed for lack of jurisdiction in light of Article 28(1) of the Warsaw
Convention. The CA affirmed such decision.
Issue:
Whether or not Article 28(1) of the Warsaw Convention is applicable
on this case
Ruling:

Article 28(1) of the Warsaw Convention, provides An action for

damages must be brought, at the option of the plaintiff, in the territory of
one of the High Contracting Parties, either before the court of the domicile of
the carrier or of his principal place of business, or where he has a place of
business through which the contract has been made, or before the court at
the place of destination.

In the instance case, the Domicile of carrier TWA is Kansas City,

Missouri, USA. Its principal place of business is Kansas City, Missouri, USA.
TWA's place of business through which the contracts were made is Bangkok,
Thailand. The place of destination is Chicago, hence it is applicable if the
flight is an international flight, Court of Appeals' affirmance of the dismissal
were not based on indubitable facts or grounds, but no inferences without
established factual basis, The Trial court was directed to proceed with the
pre-trial, if it has not been terminated, and with the trial on the merits of the
case and then to render judgment thereon, taking into account the foregoing
observations on the issue of jurisdiction.
 CESAR L. ISAAC vs. A. L. AMMEN TRANSPORTATION CO., INC.
G.R. No. L-9671 August 23, 1957

FACTS:
A. L. Ammen Transportation is a corporation engaged in the business of
transporting passengers by land for compensation.
Plaintiff boarded a bus of defendant as paying passenger from Ligao,
Albay, bound for Pili, Camarines Sur, but before reaching his destination, the
bus collided with a pick-up car which was coming from the opposite direction
and, as a, result, his left arm was completely severed and fell inside the back
part of the bus.
Plaintiff brought this action against defendants for damages alleging
that the collision which resulted in the loss of his left arm was mainly due to
the gross incompetence and recklessness of the driver of the bus operated
by defendant and that defendant incurred in culpa contractual arising from
its non-compliance with its obligation to transport plaintiff safely to his,
destination.
Defendant set up as special defense that the injury suffered by plaintiff
was due entirely to the fault or negligence of the driver of the pick-up car
which collided with the bus driven by its driver and to the contributory
negligence of plaintiff himself
The trial court dismissed the complaint after trial found that the
collision occurred due to the negligence of the driver of the pick-up car and
not to that of the driver of the bus it appearing that the latter did everything
he could to avoid the same but that notwithstanding his efforts, he was not
able to avoid it.
Appellant invokes the rule that, "when an action is based on a contract
of carriage, as in this case, all that is necessary to sustain recovery is proof
of the existence of the contract of the breach thereof by act or omission". On
the other hand, appellee contends that "if there is no negligence on the part
of the common carrier but that the accident resulting in injuries is due to
causes which are inevitable and which could not have been avoided or
anticipated notwithstanding the exercise of that high degree of care and skill
which the carrier is bound to exercise for the safety of his passengers",
neither the common carrier nor the driver is liable therefor.

ISSUE:
Whether or not the common carrier is liable for the injury suffered.

RULING:
No. It appears that Bus No. 31, immediately prior to the collision, was
running at a moderate speed because it had just stopped at the school zone
of Matacong, Polangui, Albay. The pick-up car was at full speed and was
running outside of its proper lane. The driver of the bus, upon seeing the
manner in which the pick-up was then running, swerved the bus to the very
extreme right of the road until its front and rear wheels have gone over the
pile of stones or gravel situated on the rampart of the road. Said driver could
not move the bus farther right and run over a greater portion of the pile, the
peak of which was about 3 feet high, without endangering the safety of his
passengers. And notwithstanding all these efforts, the rear left side of the
bus was hit by the pick-up car.
Considering all the circumstances, we are persuaded to conclude that
the driver of the bus has done what a prudent man could have done to avoid
the collision and in our opinion this relieves appellee from legibility under our
law.
Apparent that appellant is guilty of contributory negligence. Had he not
placed his left arm on the window sill with a portion thereof protruding
outside, perhaps the injury would have been avoided as is the case with the
other passenger. It is to be noted that appellant was the only victim of the
collision.

Wherefore, the decision appealed is affirmed.

 COMPANIA MARITIMA VS. CA
August 29, 1988

FACTS:

Private respondent Concepcion of Consolidated Construction had a

contract with the Civil Aeronautics Administration for the construction of the
airport in Cagayan de Oro. Being a Manila-based contractor, Concepcion had
to ship his construction equipment to CDO City. Concepcion negotiated with
petitioner Compania for the shipment of one (1) unit payloader. A Bill of
Lading was issued to him.

The equipment was loaded aboard the MV. It arrived safely in CDO City.
While the payloader was about two (2) meters above the pier in the course
of unloading, the swivel pin of the heel block Hatch No. 2 gave way, causing
the payloader to fall. The payloader was completely damaged.

Meanwhile, petitioner Compania shipped the payloader to Manila

where it was weighed at the SMC. Finding that the payloader weighed 7.5
tons and not 2.5 tons as declared in the Bill of Lading, petitioner denied the
claim for damages, contending that had Concepcion declared the actual
weight of the payloader, damage to the payloader could have been
prevented. Concepcion filed an action for damages. CFI dismissed; the
proximate cause of the fall of the payloader was Concepcion's act or
omission in having misrepresented the weight of the payloader, which
underdeclaration led the Chief Officer of the vessel to use the heel block of
hatch No. 2 (which only has a 5-ton capacity) in unloading the payloader. CA
reversed and ordered Petitioner to pay Concepcion. But reduced the value of
the payloader by 20% due to Concepcions contributory negligence.

ISSUE:
WON the act of private respondent Concepcion in furnishing petitioner
Compaia Maritima with an inaccurate weight was the proximate cause of
the damage, as would absolutely exempt petitioner from liability for
damages.

HELD:
NO. Petitioner argues: The loss, destruction, or deterioration of the
goods was due to an act or omission of the shipper or owner of the goods
(Art. 1734). SC held that mere proof of delivery of the goods in good order to
a common carrier, and of their arrival at the place of destination in bad
order, makes out prima facie case against the common carrier, so that if no
explanation is given as to how the loss, deterioration or destruction of the
goods occurred, the common carrier must be held responsible. The
extraordinary diligence in the vigilance over goods requires common carriers
to render service with the greatest skill and foresight and "to use all
reasonable means to ascertain the nature and characteristic of goods
tendered for shipment, and to exercise due care in the handling and
stowage. In the case at bar, Petitioner, upon the testimonies of its own
crew, failed to take the necessary and adequate precautions for avoiding
damage to the payloader. CA found that petitioner used a 5-ton capacity
lifting apparatus to lift and unload a visibly heavy cargo like a payloader.
There was laxity and carelessness of petitioner's crew in their methods of
ascertaining the weight of heavy cargoes offered for shipment before loading
and unloading them. The weight submitted by private respondent
Concepcion was entered into the bill of lading by petitioners company
collector, without seeing the equipment to be shipped. Mr. Mariano Gupana,
assistant traffic manager of petitioner, confirmed in his testimony that the
company never checked the information entered in the bill of lading. The
Chief Officer took the bill of lading on its face value and presumed the same
to be correct by merely "seeing" it. Acknowledging that there was a "jumbo"
in the MV Cebu (w/ a 20-25 ton capacity), The Chief Officer chose not to use
it. Extraordinary care and diligence compel the use of the "jumbo" lifting
apparatus as the most prudent course for petitioner. Art. 1741. If the shipper
or owner merely contributed to the loss, destruction or deterioration of the
goods, the proximate cause thereof being the negligence of the common
carrier, the latter shall be liable in damages, which however, shall be
equitably reduced.
We find equitable the conclusion of the Court of Appeals reducing the
recoverable amount of damages by 20%. Decision AFFIRMED.
 PHILIPPINE NATIONAL RAILWAYS vs CA
GR No. L-55347
October 4, 1985
Escolin, J.

FACTS:
On September 10, 1972, Winifredo Tupang boarded Train No. 516 of
PNR as a paying passenger bound for Manila. Due to some mechanical
defect, the train stopped at Sipocot, Camarines Sur, for repairs.
Unfortunately, upon passing Iyam Bridge at Lucena, Quezon, Winifredo fell
off the train resulting in his death. The train did not stop despite the alarm
raised by the other passengers that somebody fell from the train. Police
authorities were dispatched to the Iyam Bridge where they found the lifeless
body of Winifredo. Upon complaint filed by the deceaseds widow, Rosario,
the then CFI held the PNR liable for damages for breach of contract of
carriage On appeal, CA sustained the holding of the trial court that the PNR
did not exercise the utmost diligence required by law of a common carrier.

ISSUE:
Whether or not there was contributory negligence on the part of
Winifredo Tupang

RULING:
The petitioner has the obligation to transport its passengers to their
destinations and to observe extraordinary diligence in doing so. Death or any
injury suffered by any of its passengers gives rise to the presumption that it
was negligent in the performance of its obligation under the contract of
carriage.

But while petitioner failed to exercise extraordinary diligence as

required by law, it appears that the deceased was chargeable with
contributory negligence. Since he opted to sit on the open platform between
the coaches of the train, he should have held tightly and tenaciously on the
upright metal bar found at the side of said platform to avoid falling off from
the speeding train. Such contributory negligence, while not exempting the
PNR from liability, nevertheless justified the deletion of the amount
adjudicated as moral damages and the award of exemplary damages.
STANDARD VACUUM OIL COMPANY vs LUZON STEVEDORING CO., INC.
G.R. No. L-5203. April 18, 1956
BAUTISTA ANGELO, J.:

FACTS:
Defendant is a private stevedoring company engaged in transporting
local products, including gasoline in bulk. Plaintiff entered into a contract
with Defendant to transport barrels of bulk gasoline belonging to Plaintiff. A
deep sea-tugboat is called Snapper. In the course of transporting, the
engine of the tugboat came to a dead stop; that the engineer on board the
tugboat found out that the trouble was due to a broken idler, which the
engineer examined it for the first time and it was only then that he found
that there were no spare parts to use except a worn out spare driving chain.
The captain of the Snapper attempted to cast anchor but strike the rocks a
hole was opened in the hull of the Snapper, which ultimately caused it to
sink, while the barge No. L-522 was so badly damaged that the gasoline it
had on board leaked out.
It appears that this tugboat had previously made several trips and
each time it had to obtain a special permit from the Bureau of Customs
because it had never been dry-docked and did not have complete equipment
to be able to obtain a permanent permit. The Bureau of Customs found it to
be inadequately equipped and so the Bureau required Defendant to provide
it with the requisite equipment but it was never able to complete it.
Defendant pleaded that its failure to deliver the gasoline was due to
fortuitous event or caused by circumstances beyond its control and not to its
fault or negligence or that of any of its employees.

ISSUE:
Has Defendant proven that its failure to deliver the gasoline to its place
of destination is due to accident or force majeure or to a cause beyond its
control?

RULING:
While the breaking of the idler may be due to an accident, or to
something unexpected, the cause of the disaster which resulted in the loss of
the gasoline can only be attributed to the negligence or lack of precaution to
avert it on the part of Defendant. The loss of the gasoline certainly cannot be
said to be due to force majeure or unforeseen event but to the failure
of Defendant to extend adequate and proper help.
The fact that the tugboat was a surplus property, has not been dry-
docked, and was not provided with the requisite equipment to make it
seaworthy, shows that Defendant did not use reasonable diligence in putting
the tugboat in such a condition as would make its use safe for operation. A
special permit given by the Bureau of Customs to make the trip does not
relieve Defendant from liability.
 Also, the tugboat had undertaken several trips before with practically
the same crew without any untoward consequence, cannot furnish any
justification for continuing in its employ a deficient or incompetent personnel
contrary to law and the regulations of the Bureau of Customs.
 PLANTERS PRODUCTS, INC.V COURT OF APPEALS

G.R. No. 101503 September 15, 1993

BELLOSILLO, J.:

FACTS

Petitioner purchased from Mitsubishi International Corporation a

metric tons of Urea fertilizer which the latter shipped in bulk aboard the
cargo vessel Sun Plum owned by the private respondent Kyosei Kisen
Kabushiki Kaisha.

Prior to its voyage, a time charter-party on the vessel M/V Sun Plum
pursuant to the Uniform General Charter was entered into between
Mitsubishi as shipper and KKKK as a shipowner. Before loading the fertilizer
aboard the vessel four of her holds were all presumably inspected by the
charterers representative and found fit to take a load of UREA in bulk. After
the Urea fertilizer was loaded in bulk by stevedores hired by and under the
supervision of the shipper, the steel hatches were closed with heavy iron lids,
covered with three (3) layers of tarpaulin, then tied with steel bonds. The
hatches remained closed and tightly sealed throughout the entire voyage.
Petitioner unloaded the cargo from the holds into its steel bodied dump
trucks which were parked alongside the berth, using metal scoops attached
to the ship, pursuant to the terms and conditions of the charter-partly . The
hatches remained open throughout the duration of the discharge.

Consequently, PPI sent a claim letter dated 18 December 1974 to Soriamont

Steamship Agencies, the resident agent of the carrier, KKKK, for P245,
969.31 representing the cost of the alleged shortage in the goods shipped
and the diminution in value of that portion said to have been contaminated
with dirt.

ISSUE

Whether or not a common carrier becomes a private carrier by

reason of a charter-party to negate the civil law presumption of negligence in
case of loss or damage to its cargo

RULING
The Supreme Court held that a charter-party can become a private carrier by
reason of a charter-party. It is not disputed that respondent carrier, in the
ordinary course of business, operates as a common carrier, transporting
goods indiscriminately for all persons. When petitioner chartered the vessel
M/V "Sun Plum", the ship captain, its officers and compliment were under the
employ of the shipowner and therefore continued to be under its direct
supervision and control. Hardly then can we charge the charterer, a stranger
to the crew and to the ship, with the duty of caring for his cargo when the
charterer did not have any control of the means in doing so.

This is evident in the present case considering that the steering of the ship,
the manning of the decks, the determination of the course of the voyage and
other technical incidents of maritime navigation were all consigned to the
officers and crew who were screened, chosen and hired by the shipowner.

It is therefore imperative that a public carrier shall remain as such,

notwithstanding the charter of the whole or portion of a vessel by one or
more persons, provided the charter is limited to the ship only, as in the case
of a time-charter or voyage-charter. It is only when the charter includes both
the vessel and its crew, as in a bareboat or demise that a common carrier
becomes private, at least insofar as the particular voyage covering the
charter-party is concerned. Indubitably, a shipowner in a time or voyage
charter retains possession and control of the ship, although her holds may,
for the moment, be the property of the charterer.

In an action for recovery of damages against a common carrier on the goods

shipped, the shipper or consignee should first prove the fact of shipment and
its consequent loss or damage while the same was in the possession, actual
or constructive, of the carrier. Thereafter, the burden of proof shifts to
respondent to prove that he has exercised extraordinary diligence required
by law or that the loss, damage or deterioration of the cargo was due to
fortuitous event, or some other circumstances inconsistent with its liability.

Although it is considered a common carrier, respondent has sufficiently

overcome, by clear and convincing proof, the prima facie presumption of
negligence.
 MECENAS, ET AL. V. CA
G.R. No. 88052, December 14, 1989
FELICIANO, J.:

FACTS:

On the evening of 22 April 1980, at about 10:30 o'clock, the M/T

"Tacloban City," a barge-type oil tanker of Philippine registry owned by the
Philippine National Oil Company (PNOC) and operated by the PNOC Shipping
and Transport Corporation (PNOC Shipping), and the M/V "Don Juan," an
interisland vessel also of Philippine registry owned and operated by the
Negros Navigation Co., Inc. (Negros Navigation) collided at the Talbas Strait
near Maestra de Ocampo Island in the vicinity of the island of Mindoro. When
the collision occurred, the sea was calm, the weather fair and visibility good.
As a result of this collision, the M/V "Don Juan" sank and hundreds of its
passengers perished. Among the ill-fated passengers were the parents of
petitioners, the spouses Perfecto Mecenas and Sofia Mecenas, whose bodies
were never found despite intensive search by petitioners.

ISSUE:

W/N Negros Navigation and Capt. Santisteban were grossly negligent

during the events which culminated in the collision with "Tacloban City" and
the sinking of the "Don Juan" and the resulting heavy loss of lives

RULING:

The behaviour of the captain of the "Don Juan" in tills instance-playing

mahjong "before and up to the time of collision constitutes behaviour that is
simply unacceptable on the part of the master of a vessel to whose hands
the lives and welfare of at least seven hundred fifty (750) passengers had
been entrusted. Whether or not Capt. Santisteban was "off-duty" or "on-
duty" at or around the time of actual collision is quite immaterial; there is,
both realistically speaking and in contemplation of law, no such thing as "off-
duty" hours for the master of a vessel at sea that is a common carrier upon
whom the law imposes the duty of extraordinary diligence- the duty to carry
the passengers safely as far as human care and foresight can provide, using
the utmost diligence of very cautious persons, with a due regard for all the
circumstances. The record does not show that was the first or only time that
Capt. Santisteban had entertained himself during a voyage by playing
mahjong with his officers and passengers. Negros Navigation in permitting,
or in failing to discover and correct such behaviour, must be deemed
grossly negligent.

Capt. Santisteban was also faulted in the Philippine Coast Guard

decision for failing after the collision, "to institute appropriate measures to
delay the sinking of M/V Don Juan." This appears to be a euphemism for
failure to maintain the sea-worthiness or the water-tight integrity of the "Don
Juan." The record shows that the "Don Juan" sank within ten (10) to fifteen
(15) minutes after initial contact with the "Tacloban City. The officer-on-
watch in the "Don Juan" admitted that he had failed to inform Capt.
Santisteban not only of the "imminent danger of collision" but even of "the
actual collision itself. "

The total number of persons on board the "Don Juan" on that ill-starred
night of 22 April 1980 was 1,004, or 140 persons more than the maximum
lumber that could be safely carried by the "Don Juan," per its own Certificate
of Inspection. The SC noted in addition, that only 750 passengers had been
listed in its manifest for its final voyage; in other words, at least 128
passengers on board had not even been entered into the "Don Juan's"
manifest. The "Don Juan's" Certificate of Inspection showed that she carried
life boat and life raft accommodations for only 864 persons, the maximum
number of persons she was permitted to carry; in other words, she did not
carry enough boats and life rafts for all the persons actually on board that
tragic night of 22 April 1980.

Under these circumstances, a presumption of gross negligence on

the part of the vessel (her officers and crew) and of its ship-owner arises; this
presumption was never rebutted by Negros Navigation.

The grossness of the negligence of the "Don Juan" is underscored when

one considers the foregoing circumstances in the context of the following
facts: Firstly, the "Don Juan" was more than twice as fast as the "Tacloban
City." The "Don Juan's" top speed was 17 knots; while that of the "Tacloban
City" was 6.3. knots. Secondly, the "Don Juan" carried the full complement of
officers and crew members specified for a passenger vessel of her class.
Thirdly, the "Don Juan" was equipped with radar which was functioning that
night. Fourthly, the "Don Juan's" officer on-watch had sighted the "Tacloban
City" on his radar screen while the latter was still four (4) nautical miles
away. Visual confirmation of radar contact was established by the "Don Juan"
while the "Tacloban City" was still 2.7 miles away. In the total set of
circumstances which existed in the instant case, the "Don Juan," had it taken
seriously its duty of extraordinary diligence, could have easily avoided the
collision with the "Tacloban City," Indeed, the "Don Juan" might well have
avoided the collision even if it had exercised ordinary diligence merely.

In the petition at bar, the "Don Juan" having sighted the "Tacloban City"
when it was still a long way off was negligent in failing to take early
preventive action and in allowing the two (2) vessels to come to such close
quarters as to render the collision inevitable when there was no necessity for
passing so near to the "Tacloban City" as to create that hazard or
inevitability, for the "Don Juan" could choose its own distance. It is
noteworthy that the "Tacloban City," upon turning hard to port shortly before
the moment of collision, signalled its intention to do so by giving two (2)
short blasts with horn. The "Don Juan " gave no answering horn blast to
signal its own intention and proceeded to turn hard to starboard.
 G.R. No. L-30309 November 25, 1983

CLEMENTE BRIAS vs. PEOPLE OF THE PHILIPPINES, et al.

GUTIERREZ, JR., J.:

Extraordinary Diligence

FACTS:

The victims Martina Bool and her three-year old granddaughter Emelita
Gesmundo, were on board the second coach bound for Barrio Lusacan,
Tiaong, Quezon. The petitioner-appellant was assigned as the conductor.

When the train slackened its speed, Brias shouted "Lusacan, Lusacan", the
two stood up and proceeded to the nearest exit but the train unexpectedly
resumed its regular speed and as a result, the old woman and the child
stumbled and they were seen no more. It took three minutes more before the
train stopped at the next barrio, Lusacan, and the victims were not among
the passengers who disembarked thereat.

The Court of First Instance of Quezon convicted defendant-appellant

Clemente Brias for double homicide thru reckless imprudence.

On appeal, the respondent Court of Appeals affirmed the judgment of the

lower court. It found that the appellant's negligent act was the proximate
cause of the injury.

ISSUE:

Whether or not Brias observed the extraordinary diligence required of him.

RULING:

NO. It was negligence on the conductor's part to announce the next flag stop
when said stop was still a full three minutes ahead.

The negligence of petitioner-appellant in prematurely and erroneously

announcing the next flag stop was the proximate cause of the deaths of
Martina Bool and Emelita Gesmundo. This announcement prompted the
victims to stand and proceed to the nearest exit. Without said
announcement, the victims would have been safely seated in their
respective seats when the train jerked as it picked up speed

Thus, the conviction was affirmed.

 BLTB & Armando Pon v. IAC, et al.
G.R. No. 74387-90 November 14, 1988

FACTS:
A bus of Batangas Laguna Tayabas Bus Co. (BLTB) driven by Armando
Pon collided with that of Superlines Transportation Company (Superlines)
driven by Ruben Dasco which resulted in the death of three individuals and
injuries to two other persons, all passengers of the BLTB bus.
The surviving heirs of those who died instituted separate cases against
BLTB and Superlines together with their respective drivers for damages and
other costs. The two drivers were also charged each for criminal offenses.
After trial on the merits, the lower court exonerated defendants
Superlines and its driver Dasco from liability and attributed sole
responsibility to defendants BLTB and its driver Pon, and ordered them jointly
and severally to pay damages to the plaintiffs. Defendants BLTB and Pon
appealed; the CA affirmed the RTC ruling with modification, hence the
petition for certiorari to the SC.

ISSUE:
Whether or not BLTB and Pon should be held liable, and Superlines and
its driver are excluded.

RULING:
It is settled that the proximate cause of the collision resulting in the
death of three and injuries to two of the passengers of the BLTB was the sole
negligence of the driver of BLTB, Pon, who recklessly operated and drove said
bus in a lane where overtaking is not allowed by Traffic Rules and
Regulations. Such negligence is binding on BLTB because involved herein is a
contract of carriage, the court need not make and express finding of fault or
negligence on the part of the carrier order to hold it responsible for the
payment of damages sought the passenger. By the contract of carriage, the
carrier BLTB assumed the express obligation to transport passengers to their
destination safely and to observe extraordinary diligence with de r for all
circumstances and any injury that might be suffered by its passengers is
right attributable to the fault or negligence of the carrier.
 Batangas Transportation Company vs. Caguimbal,
G.R. No. L-22985, January 24, 1968

FACTS:

Caguimbal who was a paying pasenger of Batangas Transportation

Company (BTCO) bus died when the bus of the Bian Transportation
Company (Binan) which was coming from the opposite direction and a calesa
managed by Makahiya, which was then ahead of the Bian bus met an
accident.

A passenger requested the conductor of BTCO to stop as he was going

to alight, and when he heard the signal of the conductor, the driver slowed
down his bus swerving it farther to the right in order to stop. A calesa, then
driven by Makahiya was at a distance of several meters facing the BTCO bus
coming from the opposite direction. At the same time, the Bian bus was
about 100 meters away likewise going northward and following the direction
of the calesa. Upon seeing the Bian bus the driver of the BTCO bus dimmed
his light; that as the calesa and the BTCO bus were passing each other from
the opposite directions, the Bian bus following the calesa swerved to its left
in an attempt to pass between the BTCO bus and the calesa. Without
diminishing its speed, the Bian bus passed through the space between the
BTCO bus and the calesa hitting first the left side of the BTCO bus with the
left front corner of its body and then bumped and struck the calesa which
was completely wrecked.

The driver was seriously injured and the horse was killed; The second
and all other posts supporting the top of the left side of the BTCO bus were
completely smashed and half of the back wall to the left was ripped open.
The BTCO bus suffered damages for the repair of its damaged portion. As a
consequence of this occurrence, Caguimbal and Tolentino died, apart from
others who were injured.

The widow and children of Caguimbal sued to recover damages from

the BTCO. The latter, in turn, filed a third-party complaint against the Bian
and its driver, Ilagan. Subsequently, the Caguimbals amended their
complaint, to include therein, as defendants, said Bian and Ilagan.

ISSUE:
Whether BTCO is liable to pay damages for failure to exercise
extraordinary diligence?

RULING:

YES. BTCO has not proven the exercise of extraordinary diligence on its
part.
 The recklessness of the driver of Binan was, manifestly, a major factor
in the occurrence of the accident which resultedin the death of Pedro
Caguimbal. Indeed, as driver of the Bian bus, he overtook Makahiya's horse-
driven rig or calesa and passed between the same and the BTCO bus despite
the fact that the space available was not big enough therefor, in view of
which the Bian bus hit the left side of the BTCO bus and then the calesa.

Article 1733 of the Civil Code provides the general rule that
extraordinary diligence must be exercised by the driver of a bus in the
vigilance for the safety of his passengers.

The record shows that, in order to permit one of them to disembark, the
BTCO bus driver drove partly to the right shoulder of the road and partly on
the asphalted portion thereof. Yet, he could have and should have seen to it
had he exercised "extraordinary diligence" that his bus was completely
outside the asphalted portion of the road, and fully within the shoulder
thereof, the width of which being more than sufficient to accommodate the
bus.

In an action based on a contract of carriage, the court need not make

an express finding of fault or negligence on the part of the carrier in order to
hold it responsible to pay the damages sought for by the passenger. By the
contract of carriage, the carrier assumes the express obligation to transport
the passenger to his destination safely and to observe extraordinary
diligence with a due regard for all the circumstances, and any injury that
might be suffered by the passenger is right away attributable to the fault or
negligence of the carrier (Article 1756, new Civil Code). This is an exception
to the general rule that negligence must be proved, and it is therefore
incumbent upon the carrier to prove that it has exercised extraordinary
diligence as prescribed in Articles 1733 and 1755 of the new Civil Code.
 ALFREDO MALLARI SR. and ALFREDO MALLARI JR., petitioners, vs.
COURT OF APPEALS and BULLETIN PUBLISHING CORPORATION,
respondents.
G.R. No. 128607. January 31, 2000
BELLOSILLO,J.

FACTS:
On 14 October 1987, the passenger jeepney driven by Alfredo Mallari
Jr. and owned by his co-petitioner Alfredo Mallari Sr. collided with the delivery
van of Bulletin Publishing Corp. along the National Highway in Bataan.
Mallari Jr. testified that he went to the left lane of the highway and overtook a
Fiera which had stopped on the right lane. Before he passed by the Fiera, he
saw the van of respondent BULLETIN coming from the opposite direction. It
was driven by one Felix Angeles. The collision occurred after Mallari Jr.
overtook the Fiera while negotiating a curve in the highway. The impact
caused the jeepney to turn around and fall on its left side resulting in injuries
to its passengers one of whom was Israel Reyes who eventually died due to
the gravity of his injuries.
On 16 December 1987 Claudia G. Reyes, the widow of Israel M. Reyes,
filed a complaint for damages with the Regional Trial Court of Olongapo. The
trial court ordered BULLETIN and Felix Angeles to pay jointly and severally
Claudia G. Reyes. On appeal the Court of Appeals modified the decision of
the trial court and found no negligence on the part of Angeles and
consequently of his employer, BULLETIN. Instead, the appellate court ruled
that the collision was caused by the sole negligence of petitioner Alfredo
Mallari Jr. Thus, Mallari Jr. and Mallari Sr. are solidarily liable for damages to
the widow of the victim.
Hence, this petition.

ISSUE:
Whether or not Alfredo Mallari Sr. ,owner of the jeep, is solidarily liable
with the driver Alfredo Mallari Jr.

HELD:
YES. The negligence and recklessness of the driver of the passenger
jeepney is binding against petitioner Mallari Sr., who admittedly was the
owner of the passenger jeepney engaged as a common carrier, considering
the fact that in an action based on contract of carriage, the court need not
make an express finding of fault or negligence on the part of the carrier in
order to hold it responsible for the payment of damages sought by the
passenger. Under Art. 1755 of the Civil Code, a common carrier is bound to
carry the passengers safely as far as human care and foresight can provide
using the utmost diligence of very cautious persons with due regard for all
the circumstances. Moreover, under Art. 1756 of the Civil Code, in case of
death or injuries to passengers, a common carrier is presumed to have been
at fault or to have acted negligently, unless it proves that it observed
extraordinary diligence. Further, pursuant to Art. 1759 of the same Code, it is
liable for the death of or injuries to passengers through the negligence or
willful acts of the formers employees.
 HERMINIO L. NOCUM v LAGUNA TAYABAS BUS COMPANY
G.R. No. L-23733 October 31, 1969
BARREDO, J.:
FACTS:

Herminio L. Nocum (Nocum) was a passenger of Laguna Tayabas Bus

Company. Loaded in the said bus was a box containing firecrackers which
was loaded by a co-passenger, which was decleard to the conductor of the
bus as cloths and other miscellaneous items. While on transit the box with
firecrackers on it exploded, as a result Nocum was injured, demanding the
bus company to pay damages he had inccured.

The findings of fact of the trial court are not assailed. Appellee has not
filed any brief.

ISSUE:

Whether or not the bus company had performed the due diligence
required hance would not be held liable to pay the damages to the appellee

RULING:

In this particular case before Us, it must be considered that while it is

true the passengers of appellant's bus should not be made to suffer for
something over which they had no control, as enunciated in the decision of
this Court cited by His Honor, fairness demands that in measuring a common
carrier's duty towards its passengers, allowance must be given to the
reliance that should be reposed on the sense of responsibility of all the
passengers in regard to their common safety. It is to be presumed that a
passenger will not take with him anything dangerous to the lives and limbs of
his co-passengers, not to speak of his own. Not to be lightly considered must
be the right to privacy to which each passenger is entitled. He cannot be
subjected to any unusual search, when he protests the innocuousness of his
baggage and nothing appears to indicate the contrary, as in the case at bar.

Appellant further invokes Article 1174 of the Civil Code which relieves
all obligors, including, of course, common carriers like appellant, from the
consequence of fortuitous events. The court a quo held that "the breach of
contract (in this case) was not due to fortuitous event and that, therefore,
the defendant is liable in damages." Since We hold that appellant has
succeeded in rebutting the presumption of negligence by showing that it has
exercised extraordinary diligence for the safety of its passengers, "according
to the circumstances of the (each) case", We deem it unnecessary to rule
whether or not there was any fortuitous event in this case.

ACCORDINGLY, the appealed judgment of the trial court is reversed and

the case is dismissed, without costs.
 PHILIPPINE AIRLINES, INC. vs. COURT OF APPEALS and PEDRO
ZAPATOS
G.R. No. L-82619; September 15, 1993
BELLOSILLO, J:

FACTS:

This is a petition for certiorari rooted on the claim for damages filed by
private respondent Pedro Zapatos against Philippine Airlines (PAL) for breach
of contract of carriage before the then Court of First Instance of Misamis
Occidental, Ozamiz City. Zapatos was one of the 21 passengers of PAL Flight
477 whose flight was by-passed when the plane had to proceed to Cotabato
instead of Ozamiz, from the original routing of Cebu-Ozamiz-Cebu. This is
due to the fact that the airport in Ozamiz had to close due to the heavy rains
and inclement weather. Upon arrival at Cotabato City, the PAL Station Agent
informed the passengers of their options one of which was to board Flight
560 bound for Manila and which would land some of the diverted passengers
in Cebu. However, only 6 seats were left on this flight and the basis for
priority was the check-in sequence at Cebu. Zapatos being checked-in
passenger No. 9, was not accommodated. Zapatos claims that his belongings
valued at P2,000 was left on board Flight 560 and was never recovered. He
was also left at the airport without having been given transportation from the
airport to the city proper nor food and accommodation for his stay in
Cotabato City. He was likewise exposed to the peril and danger of Muslim
rebels plundering at that time. Both the CFI and the Court of Appeals
adjudged PAL liable for actual, moral, and exemplary damages.

ISSUE:

Whether or not PAL is liable despite the occurrence of a force majeure

HELD:

YES. The contract of air carriage is a peculiar one. Being imbued with
public interest, the law requires common carriers to carry the passengers
safely as far as human care and foresight can provide, using the utmost
diligence of very cautious persons, with due regard for all the circumstances.
PAL failed on this. PALs diversion of its flight due to inclement weather,
being a fortuitous event, did not however terminate its contract with its
passengers. Being in the business of air carriage and the sole one to operate
in the country, PAL is deemed equipped to deal with situations as In the case
at bar. The relation of carrier and passenger continues until the latter has
been landed at the port of destination and has left the carriers premises.
Hence, PAL necessarily would still have to exercise extraordinary diligence in
safeguarding the comfort, convenience, and safety of its stranded
passengers until they have reached their final destinations. On this score,
PAL grossly failed considering the then ongoing battle between government
forces and Muslim rebels in Cotabato City and the fact that Zapatos was a
stranger to the place.
 CONRADA VDA. DE ABETO v PHILIPPINE AIR LINES
G.R. No. L-28692 July 30, 1982
RELOVA, J..
FACTS:

Judge Quirico Abeto, boarded the Philippine Air Lines' PI-C133 plane
travelling to Manila from Iloilo. The plane did not reach its destination, the
following day,it was on the news that the plane was missing and few weeks
after it was ascertained that the said plane crashed. All the passengers,
including Judge Abeto had not survived the plane crash.

Conrada Vda. de Abeto was appointed administrator of the estate of

Judge Abeto. Subsequently, she filed for the recovery of damages that she
and her family incured upon the happening of the incident.
ISSUE:

Whether or not the defendant observed proper diligence required by

law being a common carrier

RULING:

The provisions of the Civil Code on this question of liability are clear
and explicit. Article 1733 binds common carriers, "from the nature of their
business and by reasons of public policy, ... to observe extraordinary
diligence in the vigilance ... for the safety of the passengers transported by
them according to all the circumstances of each case." Article 1755
establishes the standard of care required of a common carrier, which is, "to
carry the passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due regard for all
the circumstances." Article 1756 fixes the burden of proof by providing that
"in case of death of or injuries to passengers, common carriers are presumed
to have been at fault or to have acted negligently, unless they prove that
they observed extra-ordinary diligence as prescribed in Articles 1733 and
1755." Lastly, Article 1757 states that "the responsibility of a common carrier
for the safety of passengers ... cannot be dispensed with or lessened by
stipulation, by the posting of notices, by statements on tickets, or otherwise."

At any rate, in the absence of a satisfactory explanation by appellant

as to how the accident occurred, the presumption is, it is at fault. In an action
based on a contract of carriage, the court need not make an express finding
of fault or negligence on the part of the carrier in order to hold it responsible
to pay the damages sought for by the passenger. By the contract of carriage,
the carrier assumes the express obligation to transport the passenger to his
destination safely and to observe extraordinary diligence with a due regard
for all the circumstances, and any injury that might be suffered by the
passenger is right away attributable to the fault or negligence of the carrier
(Art. 1756, New Civil Code). This is an exception to the general rule that
negligence must be proved.
 JAPAN AIRLINES v. MICHAEL ASUNCION AND JEANETTE ASUNCION
G.R. No. 16173 JANUARY 28, 2005
YNARES-SANTIAGO, J.:

FACTS:
On March 27, 1992, respondents Michael Asuncion and Jeanette
Asuncion left Manila on board a plane of Japan Airlines bound for Los
Angeles. Their itinerary included a stop-over at Narita, Japan and an
overnight stay at Hotel Nikko, Narita, Japan. However, upon arrival, they
were not given a shore pass by the immigration authority for the reason that
the immigration officer, during their interview with the respondents, noted
that Michael appeared to be shorter than his height as indicated in his
passport. Thus, they were made to stay at the Narita Airport Rest House
instead where they were billed the amount of four hundred US dollars each
for their accommodation, security service and meals. On December 12,
1992, respondents then filed a complaint for damages against Japan Airlines
for its failure to apprise them of their travel requirements and that they were
rudely and forcibly detained at the Narita Airport.

ISSUE:
Whether or not there was breach of contract of carriage?

RULING:
Japan Airlines did not breach its contract of carriage. It may be true
that Japan Airlines has the duty to inspect whether its passengers have the
necessary documents, however, such duty does not extend to checking the
veracity of every entry in these documents. Japan Airlines could not vouch
for the authenticity of the passport and the correctness of the entries
therein. The power to admit or not an alien into the country is a sovereign
act which cannot be interfered with even by Japan airlines. Such is not within
the ambit of the contract of carriage between petitioner and respondents.
 H. E. HEACOCK COMPANY VS. MACONDRAY & COMPANY, INC.
G.R. NO. L-16598 OCTOBER 3, 1921
JOHNSON, J.

FACTS:

The plaintiff caused to be delivered on board of steamship Bolton

Castle, then in the harbor of New York, four cases of merchandise containing
twelve 8-day Edmond clocks for transportation to Manila, and paid freight on
said clocks in advance. The steamship arrived in the port of Manila,
consigned to the defendant as agent of said vessel. Neither the master of
said vessel nor the defendant herein, as its agent, delivered to the plaintiff
the clocks, although demand was made upon them for their delivery. The bill
of lading issued and delivered to the plaintiff by the master of the said
steamship states the following clauses: 1. It is mutually agreed that the value
of the goods receipted for above does not exceed $500 per freight ton, or, in
proportion for any part of a ton, unless the value be expressly stated herein
and ad valorem freight paid thereon. 9. Also, that in the event of claims for
short delivery of, or damage to, cargo being made, the carrier shall not be
liable for more than the net invoice price plus freight and insurance less all
charges saved, and any loss or damage for which the carrier may be liable
shall be adjusted pro rata on the said basis. The case containing the Edmond
clocks measured 3 cubic feet, and the freight ton value thereof was $1,480,
U. S. currency. No greater value than $500, U. S. currency, per freight ton
was declared by the plaintiff on the aforesaid clocks, and no ad valorem
freight was paid thereon. The defendant tendered to the plaintiff P76.36, the
proportionate freight ton value of the Edmond clocks, in payment of
plaintiff's claim, which tender plaintiff rejected. The plaintiff-appellant insists
that it is entitled to recover from the defendant the market value of the
clocks in question the sum of P420.

ISSUE:
Whether or not a common carrier, by stipulations inserted in the bill of
lading, limit its liability for the loss of or damage to the cargo to an agreed
valuation of the latter?

RULING:

Three kinds of stipulations have often been made in a bill of lading.

The first is one exempting the carrier from any and all liability for loss or
damage occasioned by its own negligence. The second is one providing for
an unqualified limitation of such liability to an agreed valuation. And
the third is one limiting the liability of the carrier to an agreed valuation
unless the shipper declares a higher value and pays a higher rate of freight.
The first and second kinds of stipulations are invalid as being contrary to
public policy, but the third is valid and enforceable. A reading of clauses 1
and 9 of the bill of lading shows that the present case falls within the third
stipulation, to wit: That a clause in a bill of lading limiting the liability of the
carrier to a certain amount unless the shipper declares a higher value and
pays a higher rate of freight, is valid and enforceable. The bill of lading in
question should be interpreted against the defendant carrier, which drew
said contract.
ONG YIU VS. CA
G.R. No. L-40597 June 29, 1979
MELENCIO-HERRERA, J.

Facts:

Ong Yiu was flying on a PAL flight from Cebu to Butuan City. He was
scheduled to attend a trial in Butuan City. He checked-in a blue maleta at the
PAL Cebu counter and was issued the corresponding claim stub. Upon arrival
at Bancasi Airport, Butuan, he waited for his luggage but found out that it
was over-delivered to Manila. The luggage contained vital documents needed
for his trial the next day. Due to Ong Yius demands, the Butuan PAL
representative relayed a message to the Cebu office which confirmed the
situation and notified Butuan PAL that the luggage would arrive on the first
flight in from Manila. The message was however, not received since it was
relayed after office hours and the employees had gone home. Ong Yiu wired
PAL Cebu demanding the delivery of his luggage otherwise he would hold PAL
liable for damages for causing him inconvenience, worry and anxiety. The
next morning Ong Yiu went to the airport and demanded from PAL his
luggage, however, he did not wait for the arrival of the flight and left
immediately. Dagorro, the driver of Ong Yiu, volunteered to take the luggage
to the latter. The driver opened the luggage and examined its contents but
did not touch them. Upon delivery to the petitioner, Ong Yiu refused to
accept the luggage. Upon inspection, Ong Yiu found that a folder containing
certain exhibits, transcripts and private documents were missing, aside from
two gift items for his parents-in-law. Dagorro returned it to the porter clerk
who sealed it and forwarded the same to PAL Cebu.

Ong Yiu demanded from PAL Cebu actual and compensatory damages
as an incident of breach of contract of carriage. The lower Court found PAL to
have acted in bad faith and with malice. The Court of Appeals, finding that
PAL was guilty only of simple negligence, reversed the judgment of the trial
Court granting petitioner moral and exemplary damages.

Issue:

Whether or not PAL is liable for damages and gross negligence and for
acting in bad faith for the loss of the baggage

Ruling:
 No. There is no bad faith when the airline company exerted due
diligence with its duty in locating a passengers lost luggage. PAL has
exercised due diligence and has exerted all efforts to locate to missing
luggage. Hence, the petitioner is not entitled to moral nor exemplary
damages. Despite the absence of a contract, the ticket binds the passengers
to the policies and provisions of PAL.

A contract limiting liability upon an agreed valuation does not offend

against the policy of the law forbidding one from contracting against his own
negligence. (Randolph v. American Airlines, 103 Ohio App. 172, 144 N.E. 2d
878; Rosenchein vs. Trans World Airlines, Inc., 349 S.W. 2d 483)

The liability of PAL for the loss, in accordance with the stipulation
written on the back of the ticket is limited to P100.00 per baggage. Ong Yiu
not having declared a greater value, and not having called the attention of
PAL on its true value and paid the tariff therefor. The validity of the
stipulation is not questioned by Ong Yiu. They are printed in reasonably and
fairly big letters, and are easily readable. Moreover, Ong Yiu had been a
frequent passenger of PAL from Cebu to Butuan City and back, and he, being
a lawyer and businessman, must be fully aware of these conditions.
Considering, therefore, that Ong Yiu had failed to declare a higher value for
his baggage, he cannot be permitted a recovery in excess of P100.00.
Passengers are advised not to place valuable items inside their baggage but
to avail of our V-cargo service. Also, there is nothing in the evidence to
show the actual value of the goods allegedly lost by Ong Yiu.

While it may be true that Ong Yiu had not signed the plane ticket, he is
nevertheless bound by the provisions thereof. Such provisions have been
held to be a part of the contract of carriage and valid and binding upon the
passenger regardless of the latters lack of knowledge or assent to the
regulation. It is what is known as a contract of adhesion, in regards which
it has been said that contracts of adhesion wherein one party imposes a
readymade form of contract on the other, as the plane ticket in the present
case, are contracts not entirely prohibited. The one who adheres to the
contract is in reality free to reject it entirely; if he adheres, he gives his
consent.

In the absence of a wrongful act or omission or of fraud or bad faith,

Ong Yiu is not entitled to moral damages. Ong Yu is neither entitled to
exemplary damages. In contracts, as provided for in Article 2232 of the Civil
Code, exemplary damages can be granted if the defendant acted in a
wanton, fraudulent, reckless, oppressive, or malevolent manner, which has
not been proven in the present case.
 G.R. No. 75118 August 31, 1987

SEA-LAND SERVICE, INC. vs. INTERMEDIATE APPELLATE COURT and

PAULINO CUE, doing business under the name and style of "SEN
HIAP HING,"

NARVASA, J.:

FACTS:
On or about January 8, 1981, Sea-Land Service, Inc. (Sea-Land for
brevity), a foreign shipping and forwarding company licensed to do business
in the Philippines, received from Seaborne Trading Company in Oakland,
California a shipment consigned to Sen Hiap Hing the business name used by
Paulino Cue in the wholesale and retail trade which he operated out of an
establishment located on Borromeo and Plaridel Streets, Cebu City.

The shipper not having declared the value of the shipment, no value
was indicated in the bill of lading. The shipment arrived in Manila on
February 12, 1981, and there discharged in Container No. 310996 into the
custody of the arrastre contractor and the customs and port
authorities. Sometime between February 13 and 16, 1981, after the
shipment had been transferred, along with other cargoes to Container No.
40158 near Warehouse 3 at Pier 3 in South Harbor, Manila, awaiting trans-
shipment to Cebu, it was stolen by pilferers and has never been recovered.

Paulino Cue, the consignee, made formal claim upon Sea-Land for the
value of the lost shipment allegedly amounting to P179,643.48. Sea-Land
offered to settle for US$4,000.00, or its then Philippine peso equivalent of
P30,600 asserting that said amount represented its maximum liability for the
loss of the shipment under the package limitation clause in the covering bill
of lading. Cue rejected the offer and thereafter brought suit for damages
against Sea-Land in the then Court of First Instance of Cebu, Branch X. Sea-
Land appealed to the Intermediate Appellate Court. 9 That Court however
affirmed the decision of the Trial Court xxx in all its parts ...

ISSUE:
Whether or not the consignee of seaborne freight is bound by
stipulations in the covering bill of lading limiting to a fixed amount the
liability of the carrier for loss or damage to the cargo where its value is not
declared in the bill.
RULING:

Since the liability of a common carrier for loss of or damage to goods

transported by it under a contract of carriage is governed by the laws of the
country of destination and the goods in question were shipped from the
United States to the Philippines, the liability of petitioner Sea-Land to the
respondent consignee is governed primarily by the Civil Code, and as
ordained by the said Code, suppletorily, in all matters not determined
thereby, by the Code of Commerce and special laws. One of these
suppletory special laws is the Carriage of Goods by Sea Act, U.S. Public Act
No. 521 which was made applicable to all contracts for the carriage of goods
by sea to and from Philippine ports in foreign trade by Commonwealth Act
No. 65, approved on October 22, 1936. Sec. 4(5) of said Act in part reads:
(5) Neither the carrier nor the ship shall in any event be or become
liable for any loss or damage to or in connection with the
transportation of goods in an amount exceeding $500 per package
lawful money of the United States, or in case of goods not shipped in
packages, per customary freight unit, or the equivalent of that sum in
other currency, unless the nature and value of such goods have been
declared by the shipper before shipment and inserted in the bill of
lading. This declaration, if embodied in the bill of lading, shall be prima
facie evidence, but shall not be conclusive on the carrier.

By agreement between the carrier, master, or agent of the carrier, and

the shipper another maximum amount than that mentioned in this
paragraph may be fixed: Provided, That such maximum shall not be
less than the figure above named. In no event shall the carrier be liable
for more than the amount of damage actually sustained.

Article 1766 of the Civil Code expressly subjects the rights and obligations of
common carriers to the provisions of the Code of Commerce and of special
laws in matters not regulated by said (Civil) Code, the Court fails to fathom
the reason or justification for the Appellate Court's pronouncement in its
appealed Decision that the Carriage of Goods by Sea Act " ... has no
application whatsoever in this case. Not only is there nothing in the Civil
Code which absolutely prohibits agreements between shipper and carrier
limiting the latter's liability for loss of or damage to cargo shipped under
contracts of carriage; it is also quite clear that said Code in fact has
agreements of such character in contemplation in providing, in its Articles
1749 and 1750, that:

ART. 1749 A stipulation that the common carrier's liability is

limited to the value of the goods appearing in the bill of lading,
unless the shipper or owner declares a greater value, is binding.
 ART. 1750. A contract fixing the sum that may be recovered by
the owner or shipper for the loss, destruction, or deterioration of
the goods is valid, if it is reasonable and just under the
circumstances, and has been fairly and freely agreed upon.

Nothing contained in section 4(5) of the Carriage of Goods by Sea Act

already quoted is repugnant to or inconsistent with any of the just-cited
provisions of the Civil Code. Said section merely gives more flesh and greater
specificity to the rather general terms of Article 1749 (without doing any
violence to the plain intent thereof) and of Article 1750, to give effect to just
agreements limiting carriers' liability for loss or damage which are freely and
fairly entered into.

It seems clear that even if said section 4(5) of the Carriage of Goods by
Sea Act did not exist, the validity and binding effect of the liability limitation
clause in the bill of lading here are nevertheless fully sustainable on the
basis alone of the cited Civil Code provisions. That said stipulation is just and
reasonable is arguable from the fact that it echoes Art. 1750 itself in
providing a limit to liability only if a greater value is not declared for the
shipment in the bill of lading. To hold otherwise would amount to questioning
the justice and fairness of that law itself, and this the private respondent
does not pretend to do. But over and above that consideration, the lust and
reasonable character of such stipulation is implicit in it giving the shipper or
owner the option of avoiding accrual of liability limitation by the simple and
surely far from onerous expedient of declaring the nature and value of the
shipment in the bill of lading. And since the shipper here has not been heard
to complaint of having been "rushed," imposed upon or deceived in any
significant way into agreeing to ship the cargo under a bill of lading carrying
such a stipulation in fact, it does not appear that said party has been
heard from at all insofar as this dispute is concerned there is simply no
ground for assuming that its agreement thereto was not as the law would
require, freely and fairly sought and given.

There can, therefore, be no doubt or equivocation about the validity

and enforceability of freely-agreed-upon stipulations in a contract of carriage
or bill of lading limiting the liability of the carrier to an agreed valuation
unless the shipper declares a higher value and inserts it into said contract or
bill. This pro position, moreover, rests upon an almost uniform weight of
authority.

Private respondent, by making claim for loss on the basis of the bill of
lading, to all intents and purposes accepted said bill. Having done so, he

... becomes bound by all stipulations contained therein whether on the front
or the back thereof. Respondent cannot elude its provisions simply because
they prejudice him and take advantage of those that are beneficial.
Secondly, the fact that respondent shipped his goods on board the ship of
petitioner and paid the corresponding freight thereon shows that he
impliedly accepted the bill of lading which was issued in connection with the
shipment in question, and so it may be said that the same is finding upon
him as if it had been actually signed by him or by any other person in his
behalf
 CITADEL LINES INC. vs. COURT OF APPEALS and MANILA WINE
MERCHANTS INC.
G.R. No. 88092, April 25, 1990, J. Regalado

Facts:
Petitioner Citadel Lines, Inc. (carrier) is the general agent of the vessel
Cardigan Bay/Strait Enterprise. Respondent Manila Wine Merchants, Inc.
(consignee) is the importer of the subject shipment of Dunhill cigarettes from
England. On March 17, 1979, the vessel loaded on board at England 180
Filbrite cartons of mixed British manufactured cigarettes. The shipment
arrived at the Port of Manila Pier in container vans received by E. Razon Inc
(arrastre). Due to lack of space, the representatives of the carrier kept the
cigarettes in containers, padlocked and sealed. The next morning, the head
checker of the carrier discovered that 90 cases of imported British
manufactured cigarettes were missing.
The consignee sought to recover from the carrier the market value of
the missing cargoes in the amount of Php 315,000 but the carrier argued
that the arrastre operator should be held liable as the incident occurred in an
area absolutely under the control of the latter. The trial court and the
appellate court adjudged the carrier as the party liable for the loss of
cargoes. Hence, the present recourse by Citadel.

Issues:
1. Whether the loss occurred while the cargo in question was in the custody
of Citadel Lines

2. Whether the stipulation limiting the liability of the carrier contained in the
bill of lading is binding on the consignee

Ruling:
1. Yes. On the basis of the evidence presented, further bolstered by the
testimonies of Citadels Claims Manager and Head Checker, the subject
cargo which was placed in a container van, padlocked and sealed by the
representative of the carrier was still in its possession and control when the
loss occurred, there having been no formal turnover of the cargo to the
arrastre. Considering, therefore, that the subject shipment was lost while it
was still in the custody of herein petitioner carrier, and considering further
that it failed to prove that the loss was occasioned by an excepted cause, the
inescapable conclusion is that the carrier was negligent and should be held
liable therefor.

2. Yes. Basic is the rule, long since enshrined as a statutory provision, that a
stipulation limiting the liability of the carrier to the value of the goods
appearing in the bill of lading, unless the shipper or owner declares a greater
value, is binding. Further, a contract fixing the sum that may be recovered by
the owner or shipper for the loss, destruction or deterioration of the goods is
valid, if it is reasonable and just under the circumstances, and has been fairly
and freely agreed upon. The consignee itself admitted in its memorandum
that the value of the goods shipped does not appear in the bills of lading.
Hence, the stipulation on the carrier's limited liability applies. Petitioner was
ordered to pay respondent the sum of US$4,465.60.

Pocais, Laurice L.

EVERETT STEAMSHIP CORP. vs CA and HERNANDEZ TRADING CO.,

INC.
GR No. 122494
October 8, 1998

Martinez, J.
FACTS:
Private respondent imported three crates of bus spare parts marked as
MARCO C/No. 12, MARCO C/No. 13 and MARCO C/No. 14, from its supplier.
The crates were shipped from Nagoya, Japan to Manila on board a vessel
owned by petitioners principal, Everett Orient Lines. The said crates were
covered by Bill of Lading No. NGO53MN. Upon arrival at the port of Manila, it
was discovered that the crate marked MARCO C/No. 14 was missing. Private
respondent thereafter made a formal claim upon petitioner for the value of
the lost cargo amounting to Y1,552,500.00. However, petitioner offered to
pay only Y100,000.00, the maximum amount stipulated under Clause 18 of
the covering bill of lading which limits the liability of petitioner.

Private respondent rejected the offer and thereafter instituted a suit for
collection against petitioner before the RTC. The trial court rendered
judgment in favor of private respondent. On appeal, the CA deleted the
award of attorneys fees but affirmed the trial courts findings with the
additional observation that private respondent cannot be bound by the terms
and conditions of the bill of lading because it was not privy to the contract of
carriage. Petitioner now comes to the SC to resolve the issue.

ISSUES:
1 Whether or not the carriers limited package liability as stipulated in the
bill of lading applies in the instant case
2 Whether or not private respondent, as consignee, who is not a signatory
to the bill of lading is bound by the stipulations thereof

RULING:
1 A stipulation in the bill of lading limiting the common carriers liability for
loss or destruction of a cargo to a certain sum, unless the shipper or
owner declares a greater value, is sanctioned by law, particularly Articles
1749 and 1750 of the Civil Code which provide:
 ART. 1749. A stipulation that the common carriers liability is limited
to the value of the goods appearing in the bill of lading, unless the
shipper or owner declares a greater value, is binding.
ART. 1750. A contract fixing the sum that may be recovered by the
owner or shipper for the loss, destruction, or deterioration of the goods
is valid, if it is reasonable and just under the circumstances, and has
been freely and fairly agreed upon.

Such limited-liability clause has also been consistently upheld by this

Court in a number of cases. In the bill of lading, the carrier made it clear
that its liability would only be up to Y100,000.00. However, the shipper,
Maruman Trading, had the option to declare a higher valuation if the value
of its cargo was higher than the limited liability of the carrier. Considering
that the shipper did not declare a higher valuation, it had itself to blame
for not complying with the stipulations.

2 When private respondent formally claimed reimbursement for the missing

goods from petitioner and subsequently filed a case against the latter
based on the very same bill of lading, it (private respondent) accepted
the provisions of the contract and thereby made itself a party thereto, or
at least has come to court to enforce it. Thus, private respondent cannot
now reject or disregard the carriers limited liability stipulation in the bill
of lading. In other words, private respondent is bound by the whole
stipulations in the bill of lading and must respect the same.

In fine, the liability of petitioner for the loss of the cargo is limited to
One Hundred Thousand (Y100,000.00) Yen, pursuant to Clause 18 of the
bill of lading.
 Saludo, Jr. v. Court of Appeals

G.R. No. 95536, 23 March 1992

Regalado, J.

FACTS:

After the death of plaintiffs' mother, Crispina Galdo Saludo, in Chicago

Illinois, (on) October 23, 1976, Pomierski and Son Funeral Home of Chicago,
made the necessary preparations and arrangements for the shipment, of the
remains from Chicago to the Philippines. Pomierski brought the remains to
C.M.A.S. (Continental Mortuary Air Services) at the airport (Chicago) which
made the necessary arrangements such as flights, transfers, etc.; C.M.A.S. is
a national service used by undertakers to throughout the nation (U.S.A.),
they furnish the air pouch which the casket is enclosed in, and they see that
the remains are taken to the proper air freight terminal. C.M.A.S. booked the
shipment with PAL thru the carrier's agent Air Care International, with
Pomierski F.H. as the shipper and Mario (Maria) Saludo as the consignee. In
the meantime, plaintiffs Maria Salvacion Saludo and Saturnino Saludo, thru a
travel agent, were booked with United Airlines from Chicago to California,
and with PAL from California to Manila. She then went to the funeral director
of Pomierski Funeral Home who had her mother's remains and she told the
director that they were booked with United Airlines. But the director told her
that the remains were booked with TWA flight to California. This upset her,
and she and her brother had to change reservations from UA to the TWA
flight after she confirmed by phone that her mother's remains should be on
that TWA flight. She then called Pomierski that her mother's remains were
not at the West Coast terminal, and Pomierski immediately called C.M.A.S.,
which in a matter of 10 minutes informed him that the remains were on a
plane to Mexico City, that there were two bodies at the terminal, and
somehow they were switched; he relayed this information to Miss Saludo in
California; later C.M.A.S. called and told him they were sending the remains
back to California via Texas. It-turned out that TWA had carried a shipment
under PAL Airway Bill No. 079-ORD-01180454 on TWA Flight 603 of October
27, 1976, a flight earlier than TWA Flight 131 of the same date. TWA
delivered or transferred the said shipment said to contain human remains to
PAL at 1400H or 2:00 p.m. of the same date, October 27, 1976. "Due to a
switch(ing) in Chicago", this shipment was withdrawn from PAL by CMAS at
1805H (or 6:05 p.m.) of the same date, October 27.

In a letter dated December 15, 1976, petitioners' counsel informed

private respondent Trans World Airlines (TWA) of the misshipment and
eventual delay in the delivery of the cargo containing the remains of the late
Crispin Saludo, and of the discourtesy of its employees to petitioners Maria
Salvacion Saludo and Saturnino Saludo. In a separate letter on June 10, 1977
addressed to co-respondent Philippine Airlines (PAL), 5 petitioners stated that
they were holding PAL liable for said delay in delivery and would commence
judicial action should no favorable explanation be given. Both private
respondents denied liability. Thus, a damage suit was filed by petitioners
before the then Court of First Instance, Branch III, Leyte, praying for the
award of actual damages of P50,000.00, moral damages of P1,000,000.00,
exemplary damages, attorney's fees and costs of suit.

ISSUE:

Whether or not the private respondents failed to exercise extraordinary

diligence in the performance of its duty, as provided for by law, in delivering
freight or of the remains of the deceased

RULING:

No, to support their assertion, petitioners rely on the jurisprudential

dictum, both under American and Philippine law, that "(t)he issuance of a bill
of lading carries the presumption that the goods were delivered to the carrier
issuing the bill, for immediate shipment, and it is nowhere questioned that a
bill of lading is prima facie evidence of the receipt of the goods by the carrier.
. . . In the absence of convincing testimony establishing mistake, recitals in
the bill of lading showing that the carrier received the goods for shipment on
a specified date control (13 C.J.S. 235)."

A bill of lading is a written acknowledgment of the receipt of the goods

and an agreement to transport and deliver them at a specified place to a
person named or on his order. Such instrument may be called a shipping
receipt, forwarder's receipt and receipt for transportation. The designation,
however, is immaterial. It has been hold that freight tickets for bus
companies as well as receipts for cargo transported by all forms of
transportation, whether by sea or land, fall within the definition. Under the
Tariff and Customs Code, a bill of lading includes airway bills of lading. The
two-fold character of a bill of lading is all too familiar; it is a receipt as to the
quantity and description of the goods shipped and a contract to transport the
goods to the consignee or other person therein designated, on the terms
specified in such instrument.

While the Court agree with petitioners' statement that "an airway bill
estops the carrier from denying receipt of goods of the quantity and quality
described in the bill," a further reading and a more faithful quotation of the
authority cited would reveal that "(a) bill of lading may contain constituent
elements of estoppel and thus become something more than a contract
between the shipper and the carrier. . . . (However), as between the shipper
and the carrier, when no goods have been delivered for shipment no recitals
in the bill can estop the carrier from showing the true facts . . . Between the
consignor of goods and receiving carrier, recitals in a bill of lading as to the
goods shipped raise only a rebuttable presumption that such goods were
delivered for shipment. As between the consignor and a receiving carrier, the
fact must outweigh the recital."

In other words, on October 26, 1976 the cargo containing the casketed
remains of Crispina Saludo was booked for PAL Flight Number PR-107 leaving
San Francisco for Manila on October 27, 1976, PAL Airway Bill No. 079-
01180454 was issued, not as evidence of receipt of delivery of the cargo on
October 26, 1976, but merely as a confirmation of the booking thus made for
the San Francisco-Manila flight scheduled on October 27, 1976. Actually, it
was not until October 28, 1976 that PAL received physical delivery of the
body at San Francisco, as duly evidenced by the Interline Freight Transfer
Manifest of the American Airline Freight System and signed for by Virgilio
Rosales at 1945H, or 7:45 P.M. on said date.

Explicit is the rule under Article 1736 of the Civil Code that the
extraordinary responsibility of the common carrier begins from the time the
goods are delivered to the carrier. This responsibility remains in full force and
effect even when they are temporarily unloaded or stored in transit, unless
the shipper or owner exercises the right of stoppage in transitu, and
terminates only after the lapse of a reasonable time for the acceptance, of
the goods by the consignee or such other person entitled to receive
them. And, there is delivery to the carrier when the goods are ready for and
have been placed in the exclusive possession, custody and control of the
carrier for the purpose of their immediate transportation and the carrier has
accepted them. Where such a delivery has thus been accepted by the
carrier, the liability of the common carrier commences eo instanti.

Hence, while we agree with petitioners that the extraordinary diligence

statutorily required to be observed by the carrier instantaneously
commences upon delivery of the goods thereto, for such duty to commence
there must in fact have been delivery of the cargo subject of the contract of
carriage. Only when such fact of delivery has been unequivocally established
can the liability for loss, destruction or deterioration of goods in the custody
of the carrier, absent the excepting causes under Article 1734, attach and
the presumption of fault of the carrier under Article 1735 be invoked.

As already demonstrated, the facts in the case at bar belie the

averment that there was delivery of the cargo to the carrier on October 26,
1976. Rather, as earlier explained, the body intended to be shipped as
agreed upon was really placed in the possession and control of PAL on
October 28, 1976 and it was from that date that private respondents became
responsible for the agreed cargo under their undertakings in PAL Airway Bill
No. 079-01180454. Consequently, for the switching of caskets prior thereto
which was not caused by them, and subsequent events caused thereby,
private respondents cannot be held liable.
 NORTHWEST AIRLINES, INC. v. CUENCA
G.R. No. L-22425, August 31, 1965
CONCEPCION, J.:
FACTS:

This is an action for damages for alleged breach of contract. After

appropriate proceedings the Court of First Instance of Manila, in which the
case was originally filed, rendered judgment sentencing defendant Northwest
Airlines, Inc. (herein petitioner) to pay to plaintiff Cuenca (herein respondent)
the sum of P20,000 as moral damages, together with the sum of P5,000 as
exemplary damages, with legal interest thereon from the date of the filing of
complaint," December 12, 1959, "until fully paid, plus the further sum of
P2,000 as attorney's fees and expenses of litigation." On appeal taken by
petitioner, said decision was affirmed by the Court of Appeals, except as to
the P5,000.00 exemplary damages, which was eliminated, and the
P20,000.00 award for moral damages, which was converted into nominal
damages.

ISSUE:

Whether or not respondent has no cause of action

RULING:

Respondent has a cause of action. Petitioner's argument that

respondent has no cause of action is predicated upon Articles 17, 18 and 19
of the Warsaw Convention, October 12, 1929, reading:

ART. 17. The carrier shall be liable for damages sustained in the event
of the death or wounding of a passenger or any other bodily injury
suffered by a passenger, if the accident which caused the damage so
sustained took place on board the aircraft or in the course of any of the
operations of embarking or disembarking.

ART. 18. (1) The carrier shall be liable for damage sustained in the
event of the destruction or loss of, or of damage to, any checked
baggage, or any goods, if the occurrence which caused the damage so
sustained took place during the transportation by air.

(2) The transportation by air within the meaning of the preceding

paragraph shall comprise the period during which the baggage or
goods are in charge of the carrier, whether in an airport or on board an
aircraft, or, in the case of a landing outside an airport, in any place
whatsoever.
 (3) The period of the transportation by air shall not extend to any
transportation by land, by sea, or by river performed outside an
airport. If, however, such transportation takes place in the performance
of a contract for transportation by air, for the purpose of loading,
delivery, or transhipment, any damage is presumed, subject to proof to
the contrary, to have been the result of an event which took place
during the transportation by air.

ART. 19. The carrier shall be liable for damage occasioned by delay in
the transportation by air of passengers, baggage, or goods.

Petitioner argues that pursuant to those provisions, an air "carrier is

liable only" in the event of death of a passenger or injury suffered by him, or
of destruction or loss of, or damage to any checked baggage or any goods,
or of delay in the transportation by air of passengers, baggage or goods. This
pretense is not borne out by the language of said Articles. The same merely
declare the carrier liable for damages in the enumerated cases, if the
conditions therein specified are present. Neither said provisions nor others in
the aforementioned Convention regulate or exclude liability for other
breaches of contract by the carrier. Under petitioner's theory, an air carrier
would be exempt from any liability for damages in the event of its absolute
refusal, in bad faith, to comply with a contract of carriage, which is absurd.

Moreover, there are special reasons why the P20,000.00 award in favor
of respondent herein is justified, even if said award were characterized as
nominal damages. When his contract of carriage was violated by the
petitioner, respondent held the office of Commissioner of Public Highways of
the Republic of the Philippines. Having boarded petitioner's plane in Manila
with a first class ticket to Tokyo, he was, upon arrival at Okinawa, transferred
to the tourist class compartment. Although he revealed that he was traveling
in his official capacity as official delegate of the Republic to a conference in
Tokyo, an agent of petitioner rudely compelled him in the presence of other
passengers to move, over his objection, to the tourist class, under threat of
otherwise leaving him in Okinawa. In order to reach the conference on time,
respondent had no choice but to obey.

It is true that said ticket was marked "W/L," but respondent's attention
was not called thereto. Much less was he advised that "W/L" meant "wait
listed." Upon the other hand, having paid the first class fare in full and
having been given first class accommodation as he took petitioner's plane in
Manila, respondent was entitled to believe that this was a confirmation of his
first class reservation and that he would keep the same until his ultimate
destination, Tokyo. Then, too, petitioner has not tried to explain or even
alleged that the person to whom respondent's first class seat was given had
a better right thereto. In other words, since the offense had been committed
with full knowledge of the fact that respondent was an official representative
of the Republic of the Philippines, the sum of P20,000 awarded as damages
may well be considered as merely nominal. At any rate, considering that
petitioner's agent had acted in a wanton, reckless and oppressive manner,
said award may also be considered as one for exemplary damages. (Decision
AFFIRMED)
 ALITALIA V IAC
G.R. No. 71929: December 4, 1990
NARVASA, J.:
FACTS:
Dr. Pablo a professor in the University of the Philippines and a research
grantee of the Philippine Atomic Energy Agency was invited to take part a
meeting of the Department of Research and Isotopes of the Joint FAO-IAEA
Division of atomic Energy in Food and Agriculture of the United Nations in
Ispra, Italy. To fulfill this engagement he booked passage on petitioner airline.
Upon arrival in Milan on the day before the meeting she was approached by
the petitioner personnel that her luggage was delayed. But the other flights
arriving from Rome did not have her baggage on board by then she returned
to Manila without attending the meeting and her luggage have not yet found
out.
Once back in Manila she demanded that the petitioner make reparation for
the damages thus suffered by her. ALITALIA offered her free airline tickets to
compensate her for any alleged damages but she rejected the offer .She
received her luggage 11 months and after she had already instituted a case
against Alitalia.

ISSUE:
Whether or not the WARSAW CONVENTION should be applied to limit
Alitalias liability and entitled to nominal damages

RULING:

The Court held that Alitalia is liable to pay Dr. Pablo for nominal
damages. The Warsaw Convention provides that an air carrier is made liable
for damages when: (1) the death, wounding or other bodily injury of
a passenger if the accident causing it took place on board the aircraft or in
the course of its operations of embarking or disembarking; (2) the
destruction or loss of, or damage to, any registered luggage or goods, if the
occurrence causing it took place during the carriage by air"; and (3) delay in
the transportation by air of passengers, luggage or goods. However, the
claim for damages may be brought subject to limitations provided in the said
convention. In this case, Dr. Pablo did not suffer any other injury other than
not being able to read her paper in Italy. This was due to the fact that Alitalia
misplaced her luggage. There was no bad faith or malice on the part of
Alitalia in the said delay in the arrival of her luggage. Dr. Pablo received all
her things which were returned to her in good condition although 11 months
late. Therefore she shall receive nominal damages for the special injury
caused.
PAN AMERICAN WORLD AIRWAYS, INC. vs. INTERMEDIATE APPELLATE
COURT

G.R. No. 70462 August 11, 1988

FACTS:

Plaintiff Pangan obtained from defendant Pan Am's Manila Office,

through the Your Travel Guide, an economy class airplane ticket for passage
from Manila to Guam on defendant's Flight No. 842 of May 27,1978, upon
payment by said plaintiff of the regular fare.

On May 27, 1978, two hours before departure time plaintiff Pangan
presented his ticket and checked in his two luggages which contained the
promotional and advertising materials, the clutch bags, barong tagalog and
his personal belongings for which he was given baggage claim tickets.
Subsequently, Pangan was informed that his name was not in the manifest
and so he could not take Flight No. 842 in the economy class. Since there
was no space in the economy class, plaintiff Pangan took the first class
because he wanted to be on time in Guam to comply with his commitment,
paying an additional sum of $112.00.

When plaintiff Pangan arrived in Guam, his two luggages did not arrive
with his flight, as a consequence of which his agreements with Slutchnick
and Quesada for the exhibition of the films in Guam and in the United States
were cancelled. Thereafter, he filed a written claim for his missing luggages.

Upon arrival in the Philippines, Pangan made protest as to the

treatment which he received from the employees of the defendant and the
loss of his two luggages. Defendant Pan Am assured plaintiff Pangan that his
grievances would be investigated and given its immediate consideration.
Due to the defendant's failure to communicate with Pangan about the action
taken on his protests, the present complaint was filed by the plaintiff.

ISSUE:
Whether or not respondent is entitled for damages for loss of profits
on account of delay or failure of delivery of his luggages.

RULING:
Yes but petitioner's liability is limited to the amount stated in the ticket.
Under Art.1107 of the Civil Code, a debtor in good faith like the
defendant herein, may be held liable only for damages that were foreseen or
might have been foreseen at the time the contract of transportation was
entered into. But before defendant could be held to special damages, such as
the present alleged loss of profits on account of delay or failure of delivery, it
must have appeared that he had notice at the time of delivery to him of the
particular circumstances attending the shipment, and which probably would
lead to such special loss if he defaulted. Contracts of the plaintiffs for the
exhibition of the films in Guam and California were cancelled because of the
loss of the two luggages in question." [Rollo, p. 36] The evidence reveals that
the proximate cause of the cancellation of the contracts was private
respondent Pangan's failure to deliver the promotional and advertising
materials on the dates agreed upon. For this petitioner cannot be held liable.
Private respondent Pangan had not declared the value of the two luggages
he had checked in and paid additional charges. Neither was petitioner privy
to respondents' contracts nor was its attention called to the condition therein
requiring delivery of the promotional and advertising materials on or before a
certain date.
China Airlines vs Daniel Chiok
Gr no. 152122 July 30, 2003
Panganiban, J.

FACTS:
Chiok purchased from China Airlines airline passenger ticket covering
Mainla-Taipei-Hongkong-Manila. The ticket was exclusively endorsed to
Philippine Airlines. Though out the trip, the ticket was honoured in Taipei and
in Hongkong but in the flight returning supposedly to Manila, he was told that
all flights to Manila has been cancelled due to bad weather. Chiok was
advised to stay for the flight scheduled the next day. However, when he
boarded the plane of Philippines Airlines the next day he was stopped as his
name did not appear at the list of the passengers. One of his luggages was
also missing.

ISSUE:
Whether or not the China Airlines is still liable even if the breach of
contract occurred in Philippine Airlines

HELD:
Yes. The Supreme Court states that under the general partnership
agreement, the ticket-issuing airline, which in this case is China Airlines, is
the principal in the contract of carriage. The endorsed airline is only an
agent. Thus, the obligation of the principal remains and did not cease even
when the breach did not happen on its own flight, but in one of its agents
which undertook the responsibility to carry the passenger to the destination.
Under Article 1, sec. 3 of the Warsaw Convention, it states:
Transportation to be performed by several successive air carriers
shall be deemed, for the purposes of this Convention, to be one undivided
transportation, if it has been regarded by the parties as a single operation,
whether it has been agreed upon under the form of a single contract or of a
series of contracts, and it shall not lose its international character merely
because one contract or a series of contracts is to be performed entirely
within a territory subject to the sovereignty, suzerainty, mandate, or
authority of the same High Contracting Party.
 Santos III v. Northwest Orient Airlines

G.R. No. 101538 June 23, 1992

Cruz, J.:

Facts:

The petitioner is a minor and a resident of the Philippines. Private

respondent Northwest Orient Airlines (NOA) is a foreign corporation with
principal office in Minnesota, U.S.A. and licensed to do business and maintain
a branch office in the Philippines. The petitioner purchased from a round-trip
ticket in San Francisco. U.S.A., for his flight from San Francisco to Manila via
Tokyo and back. No date was specified for his return to San Francisco. The
petitioner checked in for his scheduled departure to Manila. Despite a
previous confirmation and re-confirmation, he was informed that he had no
reservation for his flight from Tokyo to Manila. He therefore had to be wait-
listed.

Petitioner filed a case for damages before the RTC. NOA moved to
dismiss the complaint on the ground of lack of jurisdiction. It contended that
the Philippines was not its domicile nor was this its principal place of
business. Neither was the petitioner's ticket issued in this country nor was
his destination Manila but San Francisco in the United States.

The lower court dismisssed the case. CA affirmed.

Issue:

Whether or not the Philippine courts has jurisdiction over the case

Ruling:

No. The Court ruled that the Philippine courts has jurisdiction over the
case but rather the USA.

The place of destination, within the meaning of the Warsaw

Convention, is determined by the terms of the contract of carriage or,
specifically in this case, the ticket between the passenger and the carrier.
Examination of the petitioner's ticket shows that his ultimate destination is
San Francisco. Although the date of the return flight was left open, the
contract of carriage between the parties indicates that NOA was bound to
transport the petitioner to San Francisco from Manila. Manila should therefore
be considered merely an agreed stopping place and not the destination.
Article 1(2) also draws a distinction between a "destination" and an "agreed
stopping place." It is the "destination" and not an "agreed stopping place"
that controls for purposes of ascertaining jurisdiction under the Convention.
The contract is a single undivided operation, beginning with the place of
departure and ending with the ultimate destination. The use of the singular
in this expression indicates the understanding of the parties to the
Convention that every contract of carriage has one place of departure and
one place of destination. An intermediate place where the carriage may be
broken is not regarded as a "place of destination."

The Court can only sympathize with the petitioner, who must prosecute
his claims in the United States rather than in his own country at least
inconvenience. But the Court is unable to grant him the relief he seeks
because the Court is limited by the provisions of the Warsaw Convention
which continues to bind us.
 UNITED AIRLINES VS. WILLIE UY
NOVEMBER 19, 1991

FACTS:
On October 13, 1989, respondent Willie Uy, a revenue passenger on a
United Airlines flight for the San Francisco-Manila route, checked in together
with his language one piece which was found to be overweight. An airline
personnel rebuked him saying that he should have known the maximum
weight allowance (70kgs per bag) and in a loud voice ordered Uy to repack
his luggages. Respondent Uy acceded but the luggage was still overweight
and so the airline billed him overweight charges which he offered to pay with
a miscellaneous charge order (MCO) or an airline prepaid credit. However,
the MCO was not accepted due to conflicting figures listed on it.

Later, upon arrival in Manila, he discovered that one of his bags had
been slashed and its contents stolen, claiming the value lost to be around
US$ 5,310. Respondent Uy sent three demand letters dated Oct. 16, 1989,
Jan. 4, 1990, Oct. 28, 1991. The petitioner airline in response to the first
demand, mailed a check representing to the payment of loss based on the
maximum liability of $9.70 per pound. Uy was not satisfied and sent the said
second and third letter demanding an out-of-court settlement of P1,000,000.
United Airlines did not accede to his demands.

Consequently on June 9, 1992, respondent Uy filed a complaint for

damages alleging that he was a person of good station, sitting in the board
of directors of several top 500 corporations and holding senior executive
positions for such similar firms, that petitioner airline accorded him ill and
shabby treatment to his extreme embarrassment and humiliation. He
prayed for P1 million for moral damages, P500k for exemplary, P50k
attorneys fees and $5,310 for actual damages.

United Airlines moved to dismiss on the ground that Uys cause of

action had prescribed invoking Art. 29 of the Warsaw Convention.

ISSUE:
Whether or not the 2 year prescriptive period of the Warsaw
Convention bar respondent Uys action for damages.

HELD:
Insofar as the first cause of action (action for damages arising from
misconduct) is concerned, respondent's failure to file his complaint within the
2 year limitation of the Warsaw Convention does not bar his action since
petitioner airline may still be held liable for breach of other provisions of the
Civil Code which prescribe a different period or procedure for instituting the
action, specifically, Art. 1146 thereof which prescribes 4 years for filing an
action based on torts.
 As for respondent's second cause of action (action for damages arising
from damage to property), indeed the travaux preparatories of the Warsaw
Convention reveal that the delegates thereto intended the 2 year limitation
incorporated in Art. 29 as an absolute bar to suit and not to be made subject
to the various tolling provisions of the laws of the forum. This therefore
forecloses the application of our own rules on interruption of prescriptive
periods. Article 29, par. (2), was intended only to let local laws determine
whether an action had been commenced within the 2 year period, and within
our jurisdiction an action shall be deemed commenced upon the filing of a
complaint. Since it is indisputable that respondent filed the present action
beyond the 2 year time frame his second cause of action must be barred.
However in spite of this, the SC declared that although respondent filed his
complaint more than 2 years later, beyond the period of limitation prescribed
by the Warsaw Convention for filing a claim for damages, it is obvious that
respondent was forestalled from immediately filing an action because
petitioner airline gave him the runaround, answering his letters but not
giving in to his demands. Hence, despite the express mandate of Art. 29 of
the Warsaw Convention that an action for damages should be filed within 2
years from the arrival at the place of destination, such rule shall not be
applied in the instant case because of the delaying tactics employed by
petitioner airline itself. Therefore, Uy's second cause of action cannot be
considered as time-barred under Art. 29 of the Warsaw Convention.
 ENGRACIO FABRE, JR. and PORFIRIO CABIL vs. COURT OF APPEALS
G.R. no. 111127, July 26, 1996
Mendoza, J.

FACTS:
Petitioner Fabre and his wife were the owners of 1982 model Mazda
minibus. They were using the said vehicle as a school bus service for
children in Manila. They hired Cabil as their driver. On November 2, 1982,
private respondent Word for the World Christian Fellowship (WWCF) arranged
with petitioners for the transportation of members of young adult ministry
from Manila to La Union and back. While travelling, they met an accident.
The bus hit a fence and a coconut tree that caused passengers to be injured
including respondent Antonio.

The WWCF and Antonio then filed a criminal complaint against the
driver, the trial court decided in favor of respondents. All evidence
presented showed the negligence of the defendants ultimately resulted to
the accident. The Court of Appeals affirmed the decision of the Trial Court.
Hence this petition.

ISSUE:
Whether or not the petitioners are liable for the injuries suffered by the
respondents based on culpa contractual and/or culpa aquiliana.

RULING:
The Court ruled that damages should be awarded based on the theory
that petitioners are liable for breach of contract of carriage or culpa
contractual or on the theory of quasi delict or culpa aquiliana holding that
the relation of passenger and carrier is contractual both in origin and
nature, nevertheless the act that breaks the contract may be also a tort. In
both sources of obligation, the existence of negligence of petitioners must be
determined. In this case, Cabil drove his bus negligently, while his employer,
the Fabres, who owned the bus, failed to exercise the diligence of a good
father of the family in the selection and supervision of their employee is fully
supported by the evidence on record. Pursuant to Arts. 2176 and 2180 of the
Civil Code his negligence gave rise to the presumption that his employers,
the Fabres, were themselves negligent in the selection and supervision of
their employee. Thus, the finding of the Court that petitioners are liable
under Arts. 2176 and 2180 for quasi delict fully justify that they are guilty of
breach of contract of carriage under Arts. 1733, 1755 and 1759 of the Civil
Code.
 Philam Gen. Insurance & Tagum Plastics v. Sweet Lines Inc., et al.
212 SCRA 194 G.R. No. 87434 August 5, 1992

FACTS:
This is a maritime suit was commenced on May 12, 1978 by the
petitioners against private respondents Sweet Lines, Inc. (SLI), and Davao
Veterans Arrastre xxx (DVAPSI), along with SCI Line (the Shipping Corp. of
India Ltd.) and FE Zuellig Inc., as co-defendants in a court a quo, seeking
recovery of the cost of lost and damaged shipment plus exemplary damages
and other costs allegedly due to defendants negligence.
It would appear that the vessel SS Vishva Yash took on board cargoes
for shipment to Manila 600 bags Polythylene 631 (P631)and 6,400 bags of
Polythylene 647 (P647) consigned to the order of Far East Bank and Trust
Company of Manila with arrival notice to Tagum Plastics. Tagum plastics
insured the cargoes with Philamgen. After the cargoes arrived in Manila, the
same were loaded to M/V Sweet Love owned and operated by SLI, and they
co-mingled with similar cargoes belonging to Evergreen Plantation and
Standfilco.
Only 5,413 bags of P647 and 507 bags of P631 arrived in good
condition to Tagum Plastics leaving a balance of 1,080 bags either damaged,
missing, or shortlanded.
Before trial, a compromise agreement was entered into between
petitioners, as plaintiffs, and defendants SCI Line and FE Zuellig upon latters
claim against them. The petitioners moved for dismissal of the case based on
the compromise agreement and the same was granted by the court with
prejudice. In the judgment, it was rendered in favor of Philamgen against
remaining defendants Sweet Lines and Davao Arrastre, for both to pay the
petitioner jointly and severally the amounts P34,902.00 and P49,747.55 with
legal interest plus other costs.
The respondents Sweet Lines and Davao Arrastre appealed; the RTC
decision was reversed on the ground of prescription, thus the appeal by the
petitioners to the SC.

ISSUE:
Whether or not Davao Arrastre can be held responsible as a common
carrier as the petitioners contend.

RULING:
The CA judgment is affirmed.
The petitioners failed to pin-point on any of the original defendants
neither did the trial court, much less the CA, precisely establish the stage in
the course of the shipment when the goods were lost, destroyed or
damaged. What can only be inferred from the factual findings of the trial
court is that by the time the cargo was discharged to davao Arrastre, loss or
damged had already occurred and that the same could have possibly
occurred while the same was in the custody of Davao Arrastre.
 Unlike a common carrier, an arrastre operator does not labor under the
presumption of negligence in case of loss, or deterioration of goods
discharged to its custody. In other words, to hold an arrastre operator liable
for loss of and/or damage to goods entrusted to it there must be
preponderance evidence that it did not exercise due diligence in the handling
and care of the goods.
 DOMINGO ANG V AMERICAN STEAMSHIP AGENCIES INC.
GR NO. L-22491, JANUARY 27,1967

BENGZON, JP,J:

FACTS:

Yau Yue agreed to sell 140 packages of galvanized steel durzinc sheets to
one Herminio G. Teves. Yau Yue shipped the articles of which the American
Steamship Agencies, Inc. is the agent in the Philippines, under a shipping
agreement. When the articles arrived in Manila , Hongkong & Shanghai Bank
notified Teves, the "notify party" under the bill of lading, and requested
payment of the demand draft representing the purchase price of the articles.
Teves, however, did not pay the demand draft, prompting the bank to make
the corresponding protest. The bank likewise returned the bill of lading and
demand draft to Yau Yue which indorsed the said bill of lading to Domingo
Ang.

Subsequently, Domingo Ang claimed for the articles from American

Steamship Agencies, Inc., by presenting the indorsed bill of lading, but he
was informed by the latter that it had delivered the articles to Teves.
Domingo Ang filed a complaint in the Court of First Instance of Manila against
the American Steamship Agencies, Inc., for having allegedly wrongfully
delivered and/or converted the goods covered by the bill of lading belonging
to him. On December 2, 1963, defendant filed a motion to dismiss upon the
ground that plaintiff's cause of action has already prescribed under the
Carriage of Goods by Sea Act (Commonwealth Act No. 65), more particularly
Section 3 (6), paragraph 4.

ISSUE:

Whether or not the cause of action of Mr. Ang has already prescribed
under the Carriage of Goods by Sea Act (Commonwealth Act No. 65), more
particularly Section 3 (6), paragraph 4.

HELD:

NO. The period does not apply to conversion or misdelivery. The one year
period as provided in Section 3(6) of the COGSA refers to loss of the cargo
and not to misdelivery. The Civil Law concept of loss is applicable. It is
understood that a thing is lost when it perishes, or goes out of commerce, or
disappears in such a way that its existence is unknown or cannot be
recovered. Thus the COGSA provision does not apply in the case if the goods
were either rightly delivered or misdelivered, but they were not lost. The
applicable prescriptive period is that found under the Civil Code, either ten
years for a breach of a written contract or four years for quasi-delict.
 Mitsui V. CA
Mendoza, J.

FACTS:
Mitsui Lines entered into a contract of carriage with Lavine Longewear
Manufacturing to transport goods the latter from Manila to France. Mitsui
Lines undertook to deliver the goods to France 28 days from initial loading.
On July 24, 1991, Mitsuis vessel loaded Lavine's container van for carriage at
the said port of origin. However, in Kaoshiung, Taiwan the goods were not
transshipped immediately, with the result that the shipment arrived in France
only on November 14, 1991. The consignee allegedly paid only half the value
of the said goods on the ground that they did not arrive in France until the
"off season" in that country. The remaining half was allegedly charged to the
account of Lavine which in turn demanded payment from Mitsui through its
agent. Mitsui denied Lavines claim.

ISSUE:
Whether or not private respondents action is for loss or damage to
goods shipped within the meaning of the Carriage of Goods by Sea Act
(COGSA )?

HELD:
No. The suit is not for loss or damage to goods contemplated in section
3(6), the question of prescription of action is governed not by the COGSA but
by Art. 1144 of the Civil Code which provides for a prescriptive period of ten
years. As defined in the Civil Code and as applied to Section 3(6), paragraph
4 of the Carriage of Goods by Sea Act, loss contemplates merely a situation
where no delivery at all was made by the shipper of the goods because the
same had perished, gone out of commerce, or disappeared in such a way
that their existence is unknown or they cannot be recovered.
There would be some merit in appellants insistence that the damages
suffered by him as a result of the delay in the shipment of his cargo are not
covered by the prescriptive provision of the Carriage of Goods by Sea Act
above referred to, if such damages were due, not to the deterioration and
decay of the goods while in transit, but to other causes independent of the
condition of the cargo upon arrival, like a drop in their market value.
 FILIPINO MERCHANTS INSURANCE COMPANY, INC vs. HONORABLE
JOSE ALEJANDRO

G.R. No. L-54140 October 14, 1986

GUTIERREZ, JR., J.:

FACTS:

In 1976, Choa Tiek Seng contracted Frota Oceanica Brasiliera for the
latter to deliver goods. Choa Tiek Seng insured the goods with Filipino
Merchants Insurnace Company. The goods left the port of Manila on
December 13, 1976 and reached its point of destination on December 17,
1976. The goods were however damaged.

Choa Tiek Seng then filed an insurance claim. Filipino Merchants refused to
pay so in August 1977, it was sued by Choa Tiek Seng. In January 1978,
Filipino Merchants filed a third party complaint against the carrier Frota
Oceanica Brasiliera as it alleged that it is the carrier who is liable to pay
damages to Choa Tiek Seng. Judge Jose Alejandro of the trial court ruled
against Filipino Merchants. The Court of Appeals affirmed the ruling of the
judge. The lower courts ruled that Filipino Merchants is already barred from
filing a claim because under the Carriage of Goods by Sea Act, the suit
against the carrier must be filed within one year after delivery of the goods
or the date when the goods should have been delivered or one year from
December 17, 1976. The insurance company is already barred for it filed its
third party complaint only in January 1978.

ISSUE:

Whether or not Filipino Merchants is precluded by the said time-bar

rule.

HELD:

Yes. The pertinent provision of the Carriage of Goods by Sea Act does
not only apply to the shipper but also applies to the insurer. The coverage of
the Carriage of Goods by Sea Act includes the insurer of the goods.
Otherwise, what the Act intends to prohibit after the lapse of the one year
prescriptive period can be done indirectly by the shipper or owner of the
goods by simply filing a claim against the insurer even after the lapse of one
year. This would be the result if the insurer can, at any time, proceed against
the carrier and the ship since it is not bound by the time-bar provision. In this
situation, the one year limitation will be practically useless. This could not
have been the intention of the law which has also for its purpose the
protection of the carrier and the ship from fraudulent claims by having
matters affecting transportation of goods by sea be decided in as short a
time as possible and by avoiding incidents which would unnecessarily
extend the period and permit delays in the settlement of questions affecting
the transportation.
 MAYER STEEL PIPE CORPORATION and HONGKONG GOVERNMENT
SUPPLIES DEPARTMENT vs. COURT OF APPEALS
G.R. No. 124050
June 19, 1997
Puno, J.:
Facts:
In 1983, petitioner Hongkong Government Supplies Department
contracted petitioner Mayer Steel Pipe Corporation to manufacture and
supply various steel pipes and fittings. From August to October, 1983, Mayer
shipped the pipes and fittings to Hongkong.
Prior to the shipping, petitioner Mayer insured the pipes and fittings
against all risks with private respondents South Sea Surety and Insurance
Co., Inc. and Charter Insurance Corp.
Petitioners Mayer and Hongkong jointly appointed Industrial Inspection
Inc. as third-party inspector to examine whether the pipes and fittings are
manufactured in accordance with the specifications in the
contract. Industrial Inspection certified all the pipes and fittings to be in
good order condition before they were loaded in the vessel. Nonetheless,
when the goods reached Hongkong, it was discovered that a substantial
portion thereof was damaged.
Petitioners filed a claim against private respondents for indemnity
under the insurance contract. Private respondents refused to pay because
the insurance surveyor's report allegedly showed that the damage is a
factory defect.
On April 17, 1986, petitioners filed an action against private
respondents to recover the sum of HK$299,345.30. For their defense,
private respondents averred that they have no obligation to pay the amount
claimed by petitioners because the damage to the goods is due to factory
defects which are not covered by the insurance policies.
Ruling of the trial court: It ruled in favor of the petitioners. It found
that the damage to the goods is not due to manufacturing defects. It also
noted that the insurance contracts executed by petitioner Mayer and private
respondents are "all risks" policies which insure against all causes of
conceivable loss or damage. The only exceptions are those excluded in the
policy, or those sustained due to fraud or intentional misconduct on the part
of the insured.
Ruling of the CA: The court affirmed the ruling of the trial court that
the damage done was due to factory defects. However, it set aside the
decision of the trial court and dismissed the complaint on the ground of
prescription. Section 3(6) of the Carriage of Goods by Sea Act provides that
"the carrier and the ship shall be discharged from all liability in respect of
loss or damage unless suit is brought within one year after delivery of the
goods or the date when the goods should have been delivered." Respondent
court ruled that this provision applies not only to the carrier but also to the
insurer. (This is cited from the case of Filipino Merchants Insurance
Co., Inc. v. Alejandro).
Issue:
Whether or not the CA erred in holding that petitioners cause of action
had already prescribed on applying the carriage of goods by sea act.

Held:
Yes. The CA erred in applying Section 3(6) of the Carriage of Goods by
Sea Act. Section 3(6) of the Carriage of Goods by Sea Act states that the
carrier and the ship shall be discharged from all liability for loss or damage to
the goods if no suit is filed within one year after delivery of the goods or the
date when they should have been delivered. This provision states that the
liability of the insurer is not extinguished because the insurer's liability is
based not on the contract of carriage but on the contract of insurance. A
close reading of the law reveals that the Carriage of Goods by Sea Act
governs the relationship between the carrier on the one hand and the
shipper, the consignee and/or the insurer on the other hand. It defines the
obligations of the carrier under the contract of carriage. It does not,
however, affect the relationship between the shipper and the insurer.
The CA mistakenly cited the Filipino Merchants Insurance case,
because in here the insurer filed a claim against the carrier for
reimbursement of the amount it paid to the shipper. In the case at bar, it
was the shipper which filed a claim against the insurer. The ruling in Filipino
Merchants should apply only to suits against the carrier filed either by the
shipper, the consignee or the insurer.
Therefore, an "all risks" insurance policy covers all kinds of loss other
than those due to willful and fraudulent act of the insured. Thus, when
private respondents issued the "all risks" policies to petitioner Mayer, they
bound themselves to indemnify the latter in case of loss or damage to the
goods insured. Such obligation prescribes in ten years, in accordance with
Article 1144 of the New Civil Code.
 DOLE PHILIPPINES, INC., plaintiff-appellant,
vs.
MARITIME COMPANY OF THE PHILIPPINES, defendant-appellee.

G.R. No. L-61352

February 27, 1987

NARVASA, J.:

Facts:
The cargo subject of the instant case was discharged in Dadiangas
unto the custody of the consignee, Dole Philippines. The corresponding claim
for the damages sustained by the cargo was filed by the plaintiff with the
defendant, Maritime Company on May 4, 1972. On June 11, 1973 the plaintiff
filed a complaint in the CFI Manila embodying 3 causes of action involving 3
separate and different shipments. The third cause of action therein involved
the cargo now subject of this present litigation. On December 11, 1974,
Judge Serafin Cuevas issued an Order dismissing the first two causes of
action. The third cause of action which covered the cargo subject of this case
now was likewise dismissed but without prejudice as it was not covered by
the settlement. Because of the dismissal of the complaint with respect to the
third cause of action, DOLE instituted this present complaint on January 6,
1975. Maritime filed an answer pleading inter alia the affirmative defense of
prescription under the provisions of the Carriage of Goods by Sea Act. The
Trial Court granted the motion, scheduling the preliminary hearing on April
27, 1977. The record before the Court does not show whether or not that
hearing was held, but under date of May 6, 1977, Maritime filed a formal
motion to dismiss invoking once more the ground of prescription. The Trial
Court, after due consideration, resolved the matter in favor of Maritime and
dismissed the complaint.

Issue:
Whether or not Article 1155 of the Civil Code applies in lieu of the
COGSA.

Ruling:
No. Article 1155 of the Civil Code provides that the prescription of
actions is interrupted by the making of an extrajudicial written demand by
the creditor

Section 3, paragraph 6 of the COGSA provides that:

The carrier and the ship shall be discharged from all liability in respect of
loss or damage unless suit is brought within one year after delivery of the
goods or the date when the goods should have been delivered; Provided,
That, if a notice of loss or damage, either apparent or conceded, is not given
as provided for in this section, that fact shall not affect or prejudice the right
of the shipper to bring suit within one year after the delivery of the goods or
the date when. The goods should have been delivered.

1. Dole argues that since the provisions of the Civil Code are, by express
mandate of said Code, suppletory of deficiencies in the Code of Commerce
and special laws in matters governed by the latter and there being a patent
deficiency with respect to the tolling of the prescriptive period provided for in
the Carriage of Goods by Sea Act, prescription under said Act is subject to
the provisions of Article 1155 of the Civil Code on tolling. Since Dole's claim
for loss or damage was filed on May 4, 1972 amounted to a written
extrajudicial demand which would toll or interrupt prescription under Article
1155, it operated to toll prescription also in actions under the Carriage of
Goods by Sea Act.

These arguments might merit weightier consideration were it not for the fact
that the question has already received a definitive answer, adverse to the
position taken by Dole, in The Yek Tong Lin Fire & Marine Insurance Co., Ltd.
vs. American President Lines, Inc.

2. Dole argues that it was error for the court not to have considered the
action of plaintiff-appellant suspended by the extrajudicial demand which
took place, according to defendant's own motion to dismiss on August 22,
1952.

Court noticed that while plaintiff avoids stating any date when the goods
arrived in Manila, it relies upon the allegation made in the motion to dismiss
that a protest was filed on August 22, 1952 which goes to show that
plaintiff-appellant's counsel has not been laying the facts squarely before the
court for the consideration of the merits of the case. We have already
decided that in a case governed by the Carriage of Goods by Sea Act, the
general provisions of the Code of Civil Procedure on prescription should not
be made to apply. (Chua Kuy vs. Everett Steamship Corp., G.R. No. L-5554,
May 27, 1953.) We hold that in such a case the general provisions of the new
Civil Code (Art. 1155) cannot be made to apply, as such application would
have the effect of extending the one-year period of prescription fixed in the
law. It is desirable that matters affecting transportation of goods by sea be
decided in as short a time as possible; the application of the provisions of
Article 1155 of the new Civil Code would unnecessarily extend the period and
permit delays in the settlement of questions affecting transportation,
contrary to the clear intent and purpose of the law.

Under Dole's theory, when its claim was received by Maritime, the one-year
prescriptive period was interrupted and began to run anew from May 4,
1972, affording Dole another period of one year counted from that date
within which to institute action on its claim for damage. Unfortunately, Dole
let the new period lapse without filing action. It instituted Civil Case No.
91043 only on June 11, 1973, more than one month after that period has
expired and its right of action had prescribed.
 INSURANCE COMPANY OF NORTH AMERICA, v. ASIAN TERMINALS,
INC.,
G.R. No. 180784, February 15, 2012
PERALTA, J.:
Facts:
In November 9,2002, Macro-Lite Korea Corporation shipped to San
Miguel Corp., one eighty five (185) packages of electronic steel in all good
condition. The shipment was insured by the Petitioner. On November
19,2002, the shipment arrived in Manila, where seven (7) packages were
damaged. On November 21,2002 the shipment was turned over to the
respondent for safekeeping. November 29, 2002, the authorized broker of
the consignee inspected the shipment wherein they found additional five
damaged packaged. On January 6,2003, the consignee San Miguel Corp file
claims against the respondent and petitioner for damages. The petitioner
being the insurer of the cargo paid San Miguel Corp, after which demanded
reparation against the respondent but the latter refuses to do so, hence they
filed an action for damages with the RTC. The trial court dismissed the
complaint on the ground that the petitioners claim was barred by the statute
of limitation. Where the suit must be bring within one year after the date of
the delivery of the goods.

Issue:
Whether or not the one-year prescriptive period for filing a suit under
the COGSA applies to respondent arrastre operator.

Held:
No, Section 1 of CA No. 65 states: Section 1. That the provisions of
Public Act Numbered Five hundred and twenty-one of the Seventy-fourth
Congress of the United States, approved on April sixteenth, nineteen
hundred and thirty-six, be accepted, as it is hereby accepted to be made
applicable to all contracts for the carriage of goods by sea to and from
Philippine ports in foreign trade: Provided, That nothing in the Act shall be
construed as repealing any existing provision of the Code of Commerce
which is now in force, or as limiting its application.
It is noted that the term carriage of goods covers the period from
the time when the goods are loaded to the time when they are discharged
from the ship; thus, it can be inferred that the period of time when the goods
have been discharged from the ship and given to the custody of the arrastre
operator is not covered by the COGSA.
 G.R. No. 171337 July 11, 2012
BENJAMIN CUA (CUA UlAN TEK) v. W ALLEM PHILIPPINES SHIPPING,
INC. and ADVANCE SHIPPING CORPORATION
BRION, J.

FACTS:
Cua filed a civil action for damages against Wallem and Advance
Shipping before the RTC of Manila. Cua sought the payment of
P2,030,303.52 for damage to 218 tons and for a shortage of 50 tons of
shipment of Brazilian Soyabean consigned to him, as evidenced by Bill of
Lading No. 10. He claimed that the loss was due to the respondents failure
to observe extraordinary diligence in carrying the cargo. Advance Shipping (a
foreign corporation) was the owner and manager of M/V Argo Trader that
carried the cargo, while Wallem was its local agent.

Advance Shipping filed a motion to dismiss the complaint, assailing the

RTCs jurisdiction over Cuas claim; it argued that Cuas claim should have
first been brought to arbitration. Cua opposed Advance Shippings argument;
he contended that he, as a consignee, was not bound by the Charter Party
Agreement, which was a contract between the ship owner (Advance
Shipping) and the charterers.

The RTC ruled that Cua was not bound by the arbitration clause in the
Charter Party Agreement. In the meantime, Wallem filed its own motion to
dismiss, raising the sole ground of prescription. Section 3(6) of the Carriage
of Goods by Sea Act (COGSA) provides that the carrier and the ship shall be
discharged from all liability in respect of loss or damage unless suit is
brought within one year after delivery of the goods. Wallem alleged
that the goods were delivered to Cua on August 16, 1989, but the damages
suit was instituted only on November 12, 1990 more than one year than
the period allotted under the COGSA. Since the action was filed beyond the
one year prescriptive period, Wallem argued that Cuas action has been
barred.

ISSUE:
Whether Cuas claim for payment of damages against the respondents
has prescribed.

RULING:
The failure to raise or plead the grounds generally amounts to a
waiver, except if the ground pertains to (1) lack of jurisdiction over the
subject matter, (2) litis pendentia, (3) res judicata, or (4) prescription.

The COGSA is the applicable law for all contracts for carriage of goods
by sea to and from Philippine ports in foreign trade; it is thus the law that the
Court shall consider in the present case since the cargo was transported from
Brazil to the Philippines. Under Section 3(6) of the COGSA, the carrier is
discharged from liability for loss or damage to the cargo unless the suit is
brought within one year after delivery of the goods or the date when the
goods should have been delivered.Jurisprudence, however, recognized the
validity of an agreement between the carrier and the shipper/consignee
extending the one-year period to file a claim.

The allegation of an agreement extending the period to file an action in

Cuas complaint is a material averment that, under Section 11, Rule 8 of the
Rules of Court, must be specifically denied by the respondents; otherwise,
the allegation is deemed admitted. A review of the pleadings submitted by
the respondents discloses that they failed to specifically deny Cuas
allegation of an agreement extending the period to file an action to
November 12, 1990.

We cannot consider the respondents discussion on prescription in their

Memorandum filed with the RTC, since their arguments were based on Cuas
supposed failure to comply with Article 366 of the Code of Commerce, not
Section 3(6) of the COGSA the relevant and material provision in this case.
Article 366 of the Code of Commerce requires that a claim be made with the
carrier within 24 hours from the delivery of the cargo; the respondents
alleged that they were informed of the damage and shortage only on
September 13, 1989, months after the vessels arrival in Manila.

Since the COGSA is the applicable law, the respondents discussion to

support their claim of prescription under Article 366 of the Code of
Commerce would, therefore, not constitute a refutation of Cuas allegation of
extension. Given the respondents failure to specifically deny the agreement
on the extension of the period to file an action, the Court considers the
extension of the period as an admitted fact.