DSR-SENATOR LINES & C.F. SHARP VS.

FEDERAL PHOENIX ASSURANCE, 2003

Facts

Berde Plants (shipper) delivered 632 units of artificial trees to C.F. Sharp (common carrier), the General Ship
Agent of DSR-Senator Lines, a foreign shipping corp., for delivery to the consignee, Al-Mohr Intl in Riyadh,
Saudi Arabia. Federal Phoenix Assurance insured the cargo.

However, while in transit, the vessel and all its cargo caught fire.

C.F. Sharp denied any liability on the ground that such liability was extinguished when the vessel carrying the
cargo was gutted by fire.

Federal Phoenix Assurance sued for damages

Issue Whether the fire exempts a common carrier from liability over the goods? No

Ruling

Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the
same is due to any of the following causes only:

1. Flood, storm, earthquake, lightning, or other natural disaster or calamity;

2. Act of the public enemy in war, whether international or civil;
3. Act or omission of the shipper or owner of the goods;
4. The character of the goods or defects in the packing or in the containers;
5. Order or act of competent public authority."

Fire is not one of those enumerated under the above provision which exempts a carrier from liability for loss
or destruction of the cargo.

In Eastern Shipping Lines, Inc. vs. IAC, we ruled that since the peril of fire is not comprehended within the
exceptions in Article 1734, then the common carrier shall be presumed to have been at fault or to have acted
negligently, unless it proves that it has observed the extraordinary diligence required by law.

Even if fire were to be considered a natural disaster within the purview of Article 1734, it is required under
Article 1739 that the natural disaster must have been the proximate and only cause of the loss, and that the
carrier has exercised due diligence to prevent or minimize the loss before, during or after the occurrence of
the disaster.

We have held that the duration of common carrier's duty to observe the requisite diligence in the shipment of
goods lasts from the time the articles are surrendered to or unconditionally placed in the possession of, and
received by, the carrier for transportation until delivered to or until the lapse of a reasonable time for their
acceptance by the person entitled to receive them. When the goods shipped either are lost or arrive in
damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there
need not be an express finding of negligence to hold it liable.

CF Sharp failed to overcome the presumption of negligence by sufficient proof of extraordinary diligence.
 Lorenzo Shipping v. Chubb And Sons, Gearbulk & Transmarine Carriers, 2004

Facts

Lorenzo Shipping was the carrier of 581 bundles of black steel pipes. Gearbulk carried the goods on board its
vessel for the account of Sumitomo (consignee). Chubb and Sons insured the goods

Mayer Steel (shipper) loaded 581 bundles of black steel pipes on board the vessel owned by Lorenzo Shipping
for the consignee, Sumitomo, with Chubb and Sons as insurer of the goods.

Upon arrival of the goods at Davao on Dec. 2, 1987, Transmarine Carriers discovered seawater in the hatch of
the vessel, and found the steel pipes submerged in it. Gearbulk loaded the heavily rusted shipment on board
its vessel for carriage in USA. On Dec. 7, 1987, Sumitomo informed Lorenzo Shipping that it will file an
insurance claim based on the damaged cargo.

Sumitomo claimed the insurance proceeds. Chubb and Sons, as subrogee, sued for sum of money against
Lorenzo Shipping, Gearbulk, and Transmarine.

Issue Whether the claim based on damaged cargo has prescribed? No

Ruling

Lorenzo Shipping was negligent

Lorenzo Shipping failed to keep its vessel in seaworthy condition. The Surveyors found the tank top of the
vessel to be rusty, thinning, and with several holes at different places. The holes allowed seawater to enter
the flooring of the hatch of the vessel where the steel pipes were stowed. The contact with sea water caused
the steel pipes to rust.

Chubb and Sons claim for damages has not yet prescribed

Art. 366 of the Code of Commerce states:

Within the 24 hours following the receipt of the merchandise, the claim against the carrier for damage,
which may be found therein upon the opening of the packages, may be made. Provided that the
indications of the damage cannot be ascertained from the outside part of such package, in which case
the claim shall be admitted only at the time of the receipt.

After the periods mentioned have elapsed, OR transportation charges have been paid, no claim shall
be admitted against the carrier with regard to the condition in which the goods transported were
delivered.

The twenty-four-hour period prescribed by Art 366 of the Code of Commerce within which claims must be
presented does not begin to run until the consignee has received such possession of the merchandise that he
may exercise over it the ordinary control pertinent to ownership. In other words, there must be delivery of the
cargo by the carrier to the consignee at the place of destination.
In the case at bar, consignee Sumitomo has not received possession of the cargo, and has not physically
inspected the same at the time the shipment was discharged at Davao. The consignee received it only when it
reached the United States shore. Only then was delivery made and completed. And only then did the 24-hour
prescriptive period start to run.

Law at the place of destination governs

Finally, we find no merit to the contention of respondents Gearbulk and Transmarine that American law
governs the contract of carriage because the U.S.A. is the country of destination. Petitioner Lorenzo Shipping,
through its vessel, carried the goods from Manila to Davao City. Thus, as against petitioner Lorenzo Shipping,
the place of destination is Davao City. Hence, Philippine law applies.

American Airlines v. Democrito Mendoza, 2000

Facts

Mendoza purchased from Singapore Airlines in Manila conjunction tickets for Manila - Singapore - Athens -
Larnaca - Rome - Turin - Zurich - Geneva - Copenhagen - New York. The petitioner was not a participating
airline under the said conjunction tickets. Mendoza decided to forego his trip to Copenhagen and to go
straight to New York and in the absence of a direct flight under his conjunction tickets from Geneva to New
York, she exchanged the unused portion of the conjunction ticket for a one-way ticket from Geneva to New
York from the petitioner. Petitioner issued its own ticket and claimed the value of the unused portion of the
conjunction ticket.

Mendoza sued for damages at RTC Cebu for the alleged embarassment and mental anguish he suffered at the
Geneva Airport when the petitioners security officers prevented him from boarding the plane, detained him
for about an hour and allowed him to board the plane only after all the other passengers have boarded.

The petitioner filed a motion to dismiss for lack of jurisdiction per Art. 28 (1) of the Warsaw Convention.

Issue Does the RTC Cebu have jurisdiction? Yes

Ruling

The contract of carriage entered into by the Mendoza with Singapore Airlines, and subsequently with the
petitioner, to transport him to nine cities in different countries with New York as the final destination is a
contract of international transportation and the provisions of the Convention automatically. This includes
section 28 (1) which enumerates the four places where an action for damages may be brought.

Art 28 (1) 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.

Petitioner issued the ticket in Geneva which was neither the domicile nor its principal place of business nor
the Mendozas place of destination.
The question is whether the contract of transportation between the petitioner and the private respondent
would be considered as a single operation and part of the contract of transportation entered into by the latter
with Singapore Airlines in Manila.

Art 1(3) of the Warsaw Convention which states: "Transportation to be performed by several
successive carriers shall be deemed to be one undivided transportation, if it has been regarded by the
parties as a single operation x x x."

Art. 1(3) clearly states that a contract of air transportation is taken as a single operation whether it is founded
on a single contract or a series of contracts.

The contract of carriage between the Mendoza and Singapore Airlines although performed by different
carriers under a series of airline tickets, including that issued by petitioner, constitutes a single operation.
Thus, when the petitioner accepted the unused portion of the conjunction tickets, and undertook to transport
Mendoza from Geneva to New York, the petitioner tacitly recognized its commitment to act as agent of the
principal contracting airline, Singapore Airlines. As such, the petitioner thereby assumed the obligation to take
the place of the carrier originally designated in the original conjunction ticket. As an agent of the principal
carrier the petitioners undertaking should be taken as part of a single operation under the contract of
carriage executed by Mendoza and Singapore Airlines in Manila.

The third option of Mendoza under Art 28 (1) of the Warsaw Convention e.g., to sue in the place of business of
the carrier (Singapore Airlines) wherein the contract was made, is therefore, Manila, and Philippine courts are
clothed with jurisdiction over this case.

We note that while this case was filed in Cebu and not in Manila the issue of venue is no longer an issue as the
petitioner is deemed to have waived it when it presented evidence before the trial court.