SELECTED CASES IN TRANSPORTATION LAW (under Prof. Atty.

Clara) Contract of Carriage of Goods Sarkies Tours Phils, Inc vs. Hon. CA and Dr. Elino, Marisol and Fatima (all surnamed Fortales) G.R. # 108897, Oct. 2 1997 Facts: 1. August 31, 1984, Fatima boarded petitioners De Luxe bus in Manila on her way to Legaspi city. Her brother Raul and an employee of petitioner helped her load 3 pieces of luggage containing all of her optometry review books, materials and equipment, trial lenses, trial contact lenses, passport and visa, as well as her mother Marisols U.S. immigration card, among other important documents and personal belongings. 2. They were all kept in the baggage compartment of the bus, but during stopover at Daet, it was discovered that only one bag remained in the open compartment. The others, including Fatimas things, were missing and might have dropped along the way. 3. Some passengers suggested retracing the route of the bus to try to recover the loss, yet the driver merely ignored them and instead proceeded to Legazpi City. 4. Upon report of the incident, petitioner merely offered P1,000 for each piece of luggage lost, which she turned down. 5. Respondents were able to recover one of the luggages upon asking for assistance from bus companies which plied the same route on that date of the incident.

Issue: Whether or not petitioner is liable for the lost pieces of baggage and damages. Held: Yes. Evidence declares that Fatima indeed declared her luggages and that one of them was even found by a Philtranco bus driver. Under the New Civil Code, common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods transported by them, and this liability lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the person who has a right to receive them unless the loss is due to any of the expected causes under Art. 1734. The cause of the loss in the case at bar was petitioners negligence in not ensuring that the doors of the baggage compartment of its bus were securely fastened. As a result of this lack of care, almost all of the luggage was lost, to the prejudice of the paying passengers. Pedro De Guzman vs. CA and Ernesto Cendana G.R. # L-47822, Dec. 12, 1988 Facts: 1. Respondent Ernesto Cendana, a junk dealer, was engaged in buying up used bottles and scrap metal in Pangasinan. Upon gathering sufficient quantities of such scrap material, respondent would bring such material to Manila for resale. 2. He utilized 2 six-wheeler trucks which he owned for hauling the material to Manila. On the return trip to Pangasinan, respondent would load his vehicles with cargo which various merchants wanted delivered to differing establishments in Pangasinan. For that service, respondent charged freight rates which were commonly lower than regular commercial rates. 3. Nov. 1970, petitioner De Guzman, a merchant and authorized dealer of General Milk Company contracted with respondent for the hauling of 750 cartons of Liberty filled milk. However, only 150 boxes of said milk were delivered to petitioner. The other 600 boxes never reached petitioner, since the truck which carried these boxes was hijacked
JARWIK

6. After more than 9 months of fruitless waiting, respondent decided to file for recovery of the value of the remaining lost items as well as for damages, claiming that the loss was due to petitioners failure to observe extraordinary diligence and that petitioner dealt with them in bad faith from the start. 7. Petitioner disowned any liability on the ground that Fatima allegedly did not declare any excess baggage upon boarding its bus.

somewhere along the McArthur Highway, by armed men who took with them the truck, its driver, his helper and the cargo. 4. Petitioner commenced an action against respondent demanding payment of P22, 150, the claimed value of the lost merchandise, plus damages; arguing that respondent being a common carrier failed to exercise the extraordinary diligence required of him by the law. 5. Respondent denied that he was a common carrier; arguing that he could not be held responsible for the value of the lost goods, such loss having been due to force majeure.

Estelita M. Bascos vs. CA and Rodolfo A. Cipriano G.R. # 101089, Apr. 7, 1993 Facts: 1. Rodolfo Cipriano representing Cipriano Trading Enterprise (CIPTRADE), entered into a hauling contract with Jibfair Shipping Agency Corporation (JIBFAIR) whereby the former bound itself to haul the latters 2000 m/tons of soya bean meal from Manila to Laguna. 2. To carry its obligation, CIPTRADE thru Cipriano, subcontracted with petitioner Estelita Bascos to transport and deliver 400 sacks of soya bean meal at a certain rate and amount. 3. Petitioner failed to deliver the said cargo. As a consequence, Cipriano paid JIBFAIR the amount of the lost goods; and thereafter demanded reimbursement from petitioner, but the latter refused. 4. Cipriano filed a complaint for a sum of money and damages. This petitioner opposed alleging: that there was no contract of carriage since CIPTRADE leased her cargo truck, and; that the truck carrying the cargo was hijacked, hence as a force majeure, must exculpate petitioner from any liability. 5. RTC rendered decision against petitioner.

Issue: Whether or not the hijacking was a force majeure. Held: Yes. The list of causes of loss, destruction or deterioration under Art. 1734 which exempt the common carrier from responsibility, is a closed list, without prejudice to Art. 1735 for those falling outside the mentioned list. Hijacking of the carriers truck does not fall within any of the 5 categories of exempting causes (Art. 1734), hence must be dealt with under Art. 1735..that is, respondent is presumed to have been at fault or to have acted negligently; where such presumption may be overthrown by proof of extraordinary diligence on the part of the private respondent. Under Art. 1745(6), a common carrier is held responsible and will not be allowed to divest or diminish such responsibility even for acts of strangers like thieves or robbers, except where such thieves or robbers in fact acted with grave or irresistible threat, violence or force. In the case at bar, an information for robbery in band was filed against the alleged 5 hijackers where the RTC decision therein shows that the accused indeed acted with grave, if not irresistible, threat, violence or force since it was found out that 3 of them were armed with firearms. Hence, we hold that the occurrence of the loss must be reasonably be regarded as quite beyond the control of the common carrier and properly regarded as a fortuitous event. It is necessary to recall that even common carriers are not made absolute insurers against all risk of travel and of transport of goods, and are not held liable for acts or events which cannot be foreseen or are inevitable, provided that they shall have complied with the rigorous standard of extraordinary diligence.

Issue: Whether or not the hijacking is a force majeure. Held: No. To establish grave and irresistible force, petitioner presented affidavits, which however were concluded as not enough to overcome the presumption. The affidavit was not first hand account. It never dwelt on how the hijacking took place. The presumption of negligence was raised against the petitioner. It was petitioners burden to overcome it. Thus, contrary to her assertion, private respondent need not introduce any evidence to prove her negligence. Her own failure to adduce sufficient proof of extraordinary diligence made the presumption conclusive against her.

JARWIK

Amparo Servando, Clara Uy Bico vs. Phil. Steam Navigation Co. G.R. # 36481-2, Oct. 23, 1982 Facts: 1. Nov. 6, 1963, petitioners Bico and Servando loaded on board the respondents vessel, for carriage from Manila to Negros, certain cargoes: 1,528 cavans of rice by the latter and 44 cartons of colored paper, toys and general merchandise by the former. 2. Upon arrival of the vessel, the cargoes were discharged, complete and in good order, unto the warehouse of the Bureau of Customs. Later, the said warehouse was razed by fire of unknown origin, destroying petitioners cargoes. 3. RTC and CA ordered petitioners be paid of the value of lost cargoes; deciding that the delivery of the shipment to the warehouse of Bureau of Customs is not the delivery contemplated by Art. 1736; since the burning of the same occurred before actual or constructive delivery to the petitioners, the loss is chargeable against respondents. Issue: Whether or not the respondent carrier was liable in the light of the provisions of Art. 1736, in relation to Art. 1738. Held: No. There is nothing in the record to show that respondent carrier incurred in delay in the performance of its obligation. It appears that respondent had not only notified petitioners of the arrival of their shipment, but had demanded that the same be withdrawn. The respondents cannot be charged with negligence. The storage of the goods in the Customs warehouse pending withdrawal thereof by the petitioners was undoubtedly made with their knowledge and consent. Since the warehouse belonged to and was maintained by the government, it would be unfair to impute negligence to the respondent, the latter having no control whatsoever over the same. No extraordinary diligence by the carrier could have prevented the loss of the goods after they had been deposited in the Warehouse of the Bureau of Customs.

Eastern Shipping Lines, Inc. vs. The Nisshin Fire and Marine Insurance Co. and Dowa Fire and Marine Insurance Co., Ltd. G.R. # L-71478, May 29, 1987 Facts: 1. June 1977, M/S Asiatica, a vessel operated by petitioner Eastern Shipping Lines, took on board 128 cartons of garment fabrics and accessories consigned to Mariveles Apparel Corporation and 2 cases of surveying instruments consigned to Aman Enterprises and General Merchandise, both insured by respondents insurance companies herein respectively. 2. En route from Kobe Japan to Manila, the vessel caught fire and sank, resulting in the total loss of ship and cargo. 3. After having paid the insurances, the two insurance companies filed a suit for recovery of the insured value of the cargo lost, imputing unseaworthiness of the ship and non-observance of extraordinary diligence by petitioner. 4. Petitioner denied liability contending that the fire is an exempting circumstance under COGSA and that when the loss by fire is established, the burden of proving negligence of the vessel is shifted to the cargo shipper. 5. RTC decided if favour of the insurers. CA affirmed the same.

Issue: Whether or not fire is an exempting circumstance. Held: No. Fire is not considered as a natural disaster or calamity. It arises almost invariably from some act of man or by human means. It does not fall within the category of an act of God unless caused by lightning or by other natural disaster or calamity. It may even be caused by the actual fault or privity of the carrier. Having such cause as not among the exclusive list that would exempt common carriers from liability, the petitioner, in the case at bar, is presumed to have been at fault or to have acted negligently. And even if fire were to be considered a natural disaster within the meaning of Art. 1734, it is required that the same 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

JARWIK

occurrence of the disaster. This petitioner carrier failed to establish satisfactorily. Mauro Ganzon vs. CA and Gelacio Tumambing G.R. # L-48757, May 30, 1988 Facts: 1. Nov. 28, 1956, respondent Tumambing contracted the services of petitioner Ganzon to haul 305 tons of scrap iron from Bataan to Manila on board a lighter LCT Batman owned by the latter. 2. Respondent delivered the said materials to defendant Filomeno Niza, captain of the lighter, who thereafter began its loading. When about half of the scrap iron was already loaded, Mayor Jose Advincula of Bataan arrived and demanded P5,000 from Gelacio Tumambing. Argument resulted therewith due to refusal of respondent to give the said amount. He was even shot by the said mayor. 3. After sometime, the loading of the scrap iron was resumed, but Acting Mayor Basilio Rub ordered the captain Niza and his crew to dump the said iron where the lighter was docked. Later, the other items left were put under the custody of the Municipality. 4. RTC ordered in favour or Ganzon. Yet it was reversed by the CA. Issue: Whether or not the dumping of the scrap iron into the sea that was ordered by the Local Government official was a fortuitous event. Held: No. The petitioner is presumed to have been at fault or to have acted negligently; he had not been even able to prove that he observed extraordinary diligence in the vigilance over the goods in his custody. Petitioner maintains that he is exempt from any liability because the loss of the scraps was due mainly to the intervention of the municipal officials of Mariveles which, he says, constitutes a caso fortuito. We do not agree. The intervention of the municipal officials was not of a character that would render impossible the fulfilment by the carrier of its obligation. The petitioner was not duty bound to obey the illegal order to dump into the sea the scrap iron.

Moreover, there was absence of sufficient proof that the issuance of the same order was attended with such force or intimidation as to completely overpower the will of the petitioners employees. The mere difficulty in the fulfilment of the obligation is not considered a force majeure. The scraps could have been properly unloaded at the shore or at the NASSCO compound, so that after the dispute, the scraps could then be delivered in accordance with the contract of carriage. Dissent: a. Order or Act of competent public authority. b. Petitioner had no control over the situation as, in fact, Tumambing himself, the owner of the cargo, was impotent to stop the act of the said official and even suffered a gunshot wound on the occasion. c. Through the order or act of competent public authority, therefore, the performance of the contractual obligation was rendered impossible to perform. Benito Macam vs. CA, China Ocean Shipping Co. and/or Wallem Philippines Shipping Inc. Facts: 1. Apr. 4, 1989, petitioner Macam, doing business under BEN-MAC Ent., shipped on board vessel Nen Jiang, owned and operated by respondent China Ocean Shipping Co. (COSC), through local agent Wallem Philippines Shipping Inc (WALLEM) 3500 boxes of watermelon and 1611 boxes of fresh mangoes, exported through Letter of Credit issued by National Bank of Pakistan, Hongkong (PAKISTAN BANK). 2. The shipment was bound for Hongkong with PAKISTAN BANK as consignee and Great Prospect Company (GPC) as notify party. 3. Upon arrival of vessel in Hongkong, the shipment was delivered by WALLEM to GPC, not to PAKISTAN BANK, and without the required Bill of Lading being surrendered. 4. GPC failed to pay PAKISTAN BANK, which prompted the latter to refuse Macam of payment.
JARWIK

5.

Hence, Macam filed this case for collection of the value of the shipment.

Issue: Whether or not respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank guarantee.

Held: No. The extraordinary liability of the common carrier lasts until actual or constructive delivery of the cargoes to the consignee or to the person who has a legal right to receive them. PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was the notify party. However, in the export invoices, GPC was clearly named as the buyer/importer. Hence, GPC as such had the right to receive the said goods. Samar Mining Comp. Inc. vs. Nordeutscher Lloyd and C.F. Sharp and Comp. Inc G.R. # L-28673, Oct. 23, 1984 Facts: 1. Petitioner Samara Mining Comp. Inc (SMCI) imported 1 crate Optima welded wedge wire sieves through M/S Schwabenstein, a vessel owned by respondent NL and CFSCI, the latter (petitioner) being the consignee. 2. Upon arrival in Manila, the goods were delivered in good order and condition to the bonded warehouse of AMCYL (agent of SMCI). The goods however, were never delivered to, nor received by the consignee at the port of destination Davao. 3. Having failed to answer the complaint by SMCI, it filed a claim for the value of the imported goods. AMCYL was brought as a third-party defendant. Issue: Whether or not the stipulation in the bill of lading exempting the carrier from liability for loss of goods not in its actual custody, i.e., after their discharge from the ship is a valid stipulation. Held: Yes. Respondents shirk liability for the loss of the subject goods by claiming that they have discharged the same in full and good condition unto the custody of AMCYL at the port of discharge from ship Manila, and therefore, pursuant to the aforequoted stipulation in the bill of lading, their responsibility for the cargo had ceased.

Bill of lading: both a receipt and a contract. The goods in question were destined for Davao, but were discharged from ship in Manila, in accordance with the bill of lading. The carrier or master, in making arrangements with any person form or in connection with all transhipping or forwarding of the goods or the use of any means of transportation or forwarding of goods not used or operated by the carrier, shall be considered solely the agent of the shipper and consignee and without any other responsibility whatsoever or for the cost thereof. (SEC. 16 of BOL) Valid and not contrary to law, morals, good customs, public order and public policy. The carrier is relieved of responsibility for the loss or damage to the goods upon actual or constructive delivery of the same by the carrier to the consignee or to the person who has a right to receive them (AMCYL). There is actual delivery in contracts for the transport of goods when possession has been turned over to the consignee or to his duly authorized agent (AMCYL) and a reasonable time is given him to remove the same.

JARWIK

Contract of Carriage of Passengers Aboitiz Shipping Corporation vs. CA GR 84458, Nov. 6, 1989 Facts: 1. Anacleto Viana boarded the vessel M/V Antonia, owned by petitioner bound from Mindoro to Manila. Upon arrival, the passengers, including Anacleto, disembarked the said vessel making the latter ready for unloading of its cargoes using a crane owned by Pioneer Stevedoring Corp. (PSC) 2. An hour later unloading ensued, under the control of PSC as arrastre. While the crane was being operated, Anacleto obviously remembering that some of his cargoes were still loaded in the vessel, went back. It was while he was pointing to the crew 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 expired 3 days after. 3. Relatives of Anacleto filed a complaint for damages against petitioner Aboitiz for breach of contract of carriage. 4. Aboitiz, on one hand, denied responsibility contending that at the time of the accident, the vessel was completely under the control of PSC. The latter, on the otherhand, alleged that it is not a party to the contract of carriage, hence should not be dragged into the case. 5. RTC absolved Pioneer from liability and ruled against Aboitiz and that it cannot invoke the fellow-servant rule simply because its liability stems from a breach of contract of carriage.

prepare for his departure. 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 carriers premises to claim his baggage. Even if he had already disembarked an hour earlier, his presence in petitioners premises was not without cause. The victim had to claim his baggage which was possible only one (1) hour after the vessel arrived since it was admittedly standard procedure in the case of petitioners vessel that the unloading operations shall start only after that time. Aboitiz was not able as well to exercise the expected and needed extraordinary diligence. There is no showing that petitioner was extraordinarily diligent in requiring or seeing to it that certain precautionary measures were strictly and actually enforced to subserve their purpose of preventing entry into some forbidden areas, as what happened in the case. 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 petitioners aforesaid failure to exercise extraordinary diligence was the proximate and direct cause of, because it could definitely have prevented, the formers death. Wherefore, CA decision upheld in toto. Aboitiz is liable. La Mallorca vs. CA GR L-20761, Jul. 27,1966 Facts: 1. 20 December 1953, respondent Mariano Beltran and his wife, together with their 3 minor daughters boarded the Pambusco Bus (bound for Anao, Mexico Pampanga) owned and operated by plaintiff La Mallorca. The family was carrying with them 4 pieces of baggages containing their personal belongings. 2. Upon reaching their destination, the bus stopped to allow the passengers, among whom were the respondents. Mariano, then carrying some of their baggages, was the first to get down followed by his wife and their children. He returned to the bus to get his other
JARWIK

6. CA affirmed RTC decision...that Aboitiz prematurely turned over the vessel to Pioneer for the unloading of cargoes which was the direct, immediate and proximate cause of the victims death. Issue: Whether or not Anacleto is still a passenger of Aboitiz despite the circumstances. Held: Yes. 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

bayong left behind, but in doing so, one of his daughters followed him, without him noticing the same. 3. While he was on the running board of the bus waiting for the conductor to hand him the said bayong which he left under one of its seats near the door, the bus, whose motor was not shut off while unloading, suddenly started moving forward, evidently to resume its trip, notwithstanding the fact that the conductor has not given the driver the customary signal to start. 4. The bus had moved at about 10 meters at that stance. Sensing that the bus was again in motion, 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 shade where he left his wife and children. 5. At that precise time, he saw people beginning to gather around the body of a child lying prostrate on the ground, her skull crushed, and without life. The child was none other that his daughter Raquel, who was run over by the bus which she rode earlier together with her parents.

b. He started to run the bus even before the conductor gave him the signal to go. The presence of the family, as 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. Wherefore, CA decision is sustained. La Mallorca is liable. Dangwa Transportation vs CA GR 95582, Oct. 7, 1991 Facts: 1. Pedrito Cudiamat, victim herein, boarded the bus of petitioner while the latter was in full stop. All the intention to board the same was made by the victim when he gave a sign to do the same when the bus was still at a distance from him. 2. It was at this instance when the victim was closing his umbrella at the platform of the bus when the latter made a sudden jerk movement as the driver commenced to accelerate the bus. 3. Due to the premature stepping on the accelerator by the driver and in not waiting for the Pedrito to first secure his seat, the latter fell of the bus and was thereafter run over by the rear right tires of the vehicle. Despite the said incident, instead of bringing Pedrito immediately to the nearest hospital, the driver, in utter bad faith and without regard to the welfare of the victim, first brought his other passengers and cargo to their respective destinations before brining said victim to the hospital where he expired. 4. 13 May 1985, respondent heirs filed this complaint for damages against petitioner for the death of Pedrito. 5. RTC held that the negligence of Pedrito was the proximate cause of his death.

6. Respondents filed this case for breach of contract of carriage and damages. 7. RTC found petitioners liable for the same. CA found the petitioner guilty of quasi-delict and held the latter liable for damages for the negligence of its driver.

Issue: Whether or not Raquel was still a passenger, so as to hold La Mallorca liable therefor. Held: Yes. The relation of carrier and passenger does not cease at the moment the passenger alights from the carriers 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 carriers premises. What is reasonable time or a reasonable delay within this rule is to be determined from all the circumstances. In the circumstances of the present case, it cannot be claimed that the carriers agent had exercised the utmost diligence of a very cautious person required of Art. 1755 to be observed by a common carrier in the discharge of its obligation to transport safely its passengers, i.e.: a. The driver, although stopping the bus, did not put off the engine.

Issue: Whether or not petitioner Dangwa is liable. Held: Yes.

JARWIK

6. CA reversed RTC decision, making the carrier liable for payment of damages to the victims heirs.

When the bus is not in motion, there is no necessity for a person who wants to ride the same to signal his intention to board. A public utility bus, once it stops, is in effect making a continuous offer to bus riders. Hence it becomes the duty of the driver and the conductor to do no act that would have the effect of increasing the peril to the passenger while he was attempting to board the same. The premature acceleration of the bus in this case was a breach of such duty. It is the duty of common carriers to stop their conveyances a reasonable length of time in order to afford passengers an opportunity to board and enter, and they are liable for injuries suffered by boarding passengers resulting from the sudden starting up or jerking of their conveyances while they are doing so. The victim, by 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. The duty which the carrier of passengers owes to its patrons extends to persons boarding the cars as well as to those alighting therefrom. The circumstances which the driver and the conductor failed to bring the gravely injured victim immediately to the hospital for medical treatment is a patent and incontrovertible proof of their negligence. It defies understanding and can even be stigmatized as a callous indifference. Wherefore, CA decision is affirmed. Dangwa is liable. Japan Airlines vs. CA GR 118664, Aug. 7, 1998 Facts: 1. Private respondents Jose Miranda, Enrique and Maria Angela Nina (both surnamed Agana) and Adelia Francisco boarded petitioners plane bound for Manila. As an incentive for travelling on the said airline, both flights were to make an overnight stopover at Narita, Japan, at the airlines' expense, thereafter proceeding to Manila the following day. 2. Upon arrival at Japan, respondents were billeted at Hotel Nikko Narita for the night. The next day, on the final leg of their journey, they went to the airport to take their flight to Manila. However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed NAIA, rendering it inaccessible to airline traffic. Hence, private respondents' trip to Manila was cancelled indefinitely.

3. To accommodate the needs of its stranded passengers, JAL rebooked all the Manila-bound passengers and also paid for the hotel expenses for their unexpected overnight stay. To the dismay of the private respondents, their long anticipated flight to Manila was again cancelled due to NAIA's indefinite closure. At this point, JAL informed the private respondents that it would no longer defray their hotel and accommodation expense during their stay in Narita. 4. Respondents were forced to pay for their accommodations and meal expenses from their personal funds from June 16 to June 21, 1991. Their unexpected stay in Narita ended on June 22, 1991 when they arrived in Manila on board JL flight No. 741. 5. Feeling aggrieved, respondents filed an action for damages against JAL, contending that JAL failed to live up to its duty to provide care and comfort to its stranded passengers when it refused to pay for their hotel and accommodation expenses from June 16 to 21, 1991. In other words, they insisted that JAL was obligated to shoulder their expenses as long as they were still stranded in Narita.

6. On the other hand, JAL denied this allegation and averred that airline passengers have no vested right to these amenities in case a flight is cancelled due to "force majeure." 7. RTC as well as CA favored the respondents.

Issue: Whether or not 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." Held: Yes, but not fully. While JAL was no longer required to defray private respondents' living expenses during their stay in Narita on account of the fortuitous event, JAL had the duty to make the 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.

JARWIK

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 p.m. of the aforesaid date that they were advised that they could be accommodated in said flight which flew at about 9:00 a.m. the next day. PAL vs. CA and Pedro Zapatos GR 82619, Sept. 15, 1993 Facts: 1. Respondent Pedro Zapatos was among the 21 passengers of PAL with a route from Cebu-Ozamis-Cotabato. While on flight and just about 15 mins before landing at Ozamis, the pilot received a radio message that the airport was closed due to heavy rains and inclement weather and that he should proceed to Cotabato instead. 2. In Cotabato, they were given options to either return to Cebu (only 6 may be accommodated; by priority check-in status) that same day, or do the same the next day, or remain at Cotabato and take the next available flight to Ozamis after 2 days. 3. Respondent chose the 1st option, yet was not lodged therein due to its limited accommodation, him being the 9th who checked in. He tried to stop the flight for his personal belongings were still aboard, yet his plea fell on deaf ears. 4. He was left at the airport and could not even hitch a ride in the Ford Fiera loaded with PAL personnel. PAL neither provided respondent with transportation from the airport to the city proper nor food and accommodation for his stay in Cotabato. 5. Respondent filed this case for breach of contract of carriage. RTC rendered judgment in favor of respondent and this was affirmed by the CA.

Contract of air carriage is a peculiar one. This case illustrates PALs failure to grasp the exacting standard required by law. Indisputably, PALs diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such occurrence did not terminate PALs contract with its passengers. ..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 ongoing battle between government forces and Muslim rebels in Cotabato; and the fact that respondent was a stranger to the place. Since part of the failure to comply with the obligation of common carrier to deliver its passengers safely to their destination lay in the PALs failure to provide comfort and convenience to its stranded passengers using extraordinary diligence, the cause of non-fulfillment is not solely and exclusively due to fortuitous event, but due to something which airline could have prevented, petitioner becomes liable to respondent. Tiu vs. Arriesgado GR 138060, Sept. 1, 2004 Facts: 1. March 15, 1987, a cargo truck owned by private respondent Benjamin Condor and driven by Sergio Pedrano was passing over a bridge when one of its tires exploded, prompting the latter to park the said vehicle along the right side of the highway and later had the tire vulcanized at a nearby shop. No warning device, however, was stalled to serve as caution for other passing vehicles. 2. D Rough Riders passenger bus owned by herein petitioner Willaim Tiu and driven by a certain Virgilio Te Laspinas was, at that time, traversing the same said route where respondent Pedro Arriesgado and his wife were then one of the passengers. 3. As the bus was approaching the bridge, Laspias saw the stalled truck, which was then about 25 meters away. He applied the breaks and tried to swerve to the left to avoid hitting the truck. But it was too late; the bus rammed into the trucks left rear. The impact damaged the right

Issue: Whether or not PAL is liable herein. Held: Yes. There is no valid reason for the reversal of the judgment of RTC and CA. There was indeed indifference and inattention on the part of PAL to respondents predicament. PALs answer the incident is not our fault..let us forget that merely evidenced the same.

JARWIK

side of the bus and left several passengers injured. Pedro Arriesgado lost consciousness and suffered a fracture in his right colles. 4. His wife, Felisa, was brought to the Danao City Hospital. She was later transferred to the Southern Island Medical Center where she died shortly thereafter. 5. Respondent then filed a complaint for breach of contract of carriage against the petitioners, D Rough Riders bus operator William Tiu and his driver, Virgilio Te Laspias.

enforce its contractual obligations, for it would be inequitable to exempt the negligent driver and its owner on the ground that the other driver was likewise guilty of negligence. Respondents Pedrano and Condor were likewise negligent: Leaving the truck parked askew without any warning lights or reflector devices to alert oncoming vehicles, and that such failure created the presumption of negligence on the part of his employer, respondent Condor, in supervising his employees properly and adequately. Necesito vs. Paras GR L-10605, June 30, 1958 Facts: 1. Severina Garces and her one-year old son, Precillano Necesito, carrying vegetables, boarded passenger auto truck or bus of the Philippine Rabbit Bus Lines driven by Francisco Bandonell. Along the way to Manila, the bus entered a wooden bridge, but the front wheels swerved to the right; the driver lost control, and after wrecking the bridge's wooden rails, the truck fell on its right side into a creek where water was breast deep. 2. Severina Garces, was drowned; Precillano Necesito, was injured, suffering abrasions and fracture of the left femur. The money, wrist watch and cargo of vegetables were lost. 3. Heirs of the victims filed this case for breach of contract of carriage and damages. 4. The carrier pleaded that the accident was due to "engine or mechanical trouble" independent or beyond the control of the defendants or of the driver Bandonell. 5. RTC, holding that the accident was exclusively due to fortuitous event, dismissed both actions. It found that the bus was proceeding slowly due to the bad condition of the road; that the accident was caused by the fracture of the right steering knuckle, which was defective in that its center or core was not compact but "bubbled and cellulous", a condition that could not be known or ascertained by the carrier despite the fact that regular thirty-day inspections were made of the steering knuckle.

6. The respondent alleged that the passenger bus in question was cruising at a fast and high speed along the national road, and that petitioner Laspias did not take precautionary measures to avoid the accident. 7. RTC ruled in favor of respondent, contending that Laspias had not been driving at a fast pace, he could have easily swerved to the left to avoid hitting the truck, thus, averting the unfortunate incident. It then concluded that petitioner Laspias was negligent. This was affirmed by the CA.

Issue: Whether or not petitioner should be held negligent, hence liable for the incident. Held: Yes. Petitioner Laspias was negligent in driving the Ill-fated bus: Laspias claimed that he was traversing at a speed of 40 to 50 kph. Even in the absence of expert evidence, the damage sustained by the truck itself supports the finding that the D Rough Rider bus driven by petitioner Laspias was traveling at a fast pace. Petitioner Laspias could have swerved to the left lane with proper clearance, and, thus, could have avoided the truck. Instinct, at the very least, would have prompted him to apply the breaks to avert the impending disaster which he must have foreseen when he caught sight of the stalled truck. The maximum speed allowed by law on a bridge is only 30 kilometers per hour. Under Article 2185 of the Civil Code, a person driving a vehicle is presumed negligent if at the time of the mishap, he was violating any traffic regulation. The Doctrine of Last Clear Chance is Inapplicable in the Case at Bar: It only applies in a suit between the owners and drivers of two colliding vehicles. It does not arise where a passenger demands responsibility from the carrier to

Issues: Whether or not the carrier is liable for the manufacturing defect of the steering knuckle.

JARWIK

10

Whether the evidence discloses that in regard thereto the carrier exercised the diligence required by law Held: First issue: Yes. The rationale of the carrier's liability is the fact that the passenger has neither choice nor control over the carrier in the selection and use of the equipment and appliances in use by the carrier. Having no privity whatever with the manufacturer or vendor of the defective equipment, the passenger has no remedy against him, while the carrier usually has. It is but logical, therefore, that the carrier, while not in insurer of the safety of his passengers, should nevertheless be held to answer for the flaws of his equipment if such flaws were at all discoverable. Second issue: No. The only test applied to the steering knuckle in question was a purely visual inspection every thirty days, to see if any cracks developed. It nowhere appears that either the manufacturer or the carrier at any time tested the steering knuckle to ascertain whether its strength was up to standard, or that it had no hidden flaws would impair that strength. And yet the carrier must have been aware of the critical importance of the knuckle's resistance; that its failure or breakage would result in loss of balance and steering control of the bus, with disastrous effects upon the passengers. No argument is required to establish that a visual inspection could not directly determine whether the resistance of this critically important part was not impaired. Nor has it been shown that the weakening of the knuckle was impossible to detect by any known test; on the contrary, there is testimony that it could be detected. We are satisfied that the periodical visual inspection of the steering knuckle as practiced by the carrier's agents did not measure up to the required legal standard of "utmost diligence of very cautious persons" "as far as human care and foresight can provide", and therefore that the knuckle's failure cannot be considered a fortuitous event that exempts the carrier from responsibility.

Juntilla vs. Fontanar GR L-45637, May 31, 1985 Facts: 1. Petitioner Roberto Juntilla was a passenger of a jeepney owned by Fernando Banzon and being driven by Belfor Camaro, through a franchise owned by respondent Clemente Fontanar. 2. During the trip to Mandaue City, the rear right tire exploded causing the vehicle to turn turtle. The plaintiff who was sitting at the front seat was thrown out of the vehicle, leaving him conscious momentarily. Upon coming to his senses, he found that he had a lacerated wound on his right palm and some injuries on some other parts of his body. It was also only later that he discovered that his Omega wrist watch was lost. 3. Hence, petitioner filed this case for breach of contract with damages. 4. Defendants defense: Accident was beyond their control taking into account that the tire that exploded was newly bought and was only slightly used at the time it blew up. 5. RTC rendered judgment in petitioners favor, but CA reversed the same, saying that the tire blow out was a fortuitous event.

Issue: Whether the mechanical defect of a tire blow out would exonerate respondents from liability. Held: No. It cannot be denied in the case at bar that there are specific acts of negligence on the part of the respondents: a. Overspeeding: The jeepney was running at a very fast speed that caused it to jump into a ditch when its rear right tire blew out; which would not ordinarily occur to a jeep running at a regular and safe speed.

b. Overloading: 3 in front seat; 14 in the rear. While it may be true that the tire that blew up was still good because the grooves of the tire were still visible, this fact alone does not make the explosion of the tire a fortuitous event.
JARWIK

11

The sudden blowing-up, therefore, could have been caused by too much air pressure injected into the tire coupled by the fact that the jeepney was overloaded and was overspeeding at the time of the accident. Furthermore, the cause of the unforeseen and unexpected occurrence was not independent of the human will. The accident was caused either through the negligence of the driver and because of mechanical defects in the tire. Maranan vs. Perez GR L-22272, June 26, 1967 Facts: 1. Oct. 18, 1960, Rogelio Corachea was a passenger of a taxicab owned and operated by respondent Pascual Perez. Its driver, Simeon Valenzuela stabbed and killed Rogelio while being a passenger therewith. 2. Valenzuela was later prosecuted and was found of Homicide due to the incident mentioned. While pending appeal of the said case, petitioner Antonia Maranan (mother of Rogelio) filed an action to recover damages from respondents herein for the death of her son. 3. Defense of respondents: Deceased was killed in self-defense; and that death was a caso fortuito for which the carrier was not liable. 4. RTC ruled in petitioners favor; finding Perez liable for damages, while the claim against Valenzuela was dismissed. CA affirmed the same. Issue: Whether or not the carrier (Perez) is liable for the act of its employee (Valenzuela). Held: Yes. In the case at bar, the killing was perpetrated by the driver of the very cab transporting the passenger, in whose hands the carrier had entrusted the duty of executing the contract of carriage. In other words, the killing of the passenger here took place in the course of duty of the guilty employee and when the employee was acting within the scope of his duties. Art. 1759 of the NCC expressly states that: Common carriers are liable for the death of or injuries to passengers through the negligence or willful acts of the formers employees, although such employees may have acted beyond the scope of their authority or in violation of the orders of the common carriers.

It is, then, enough that the assault happens within the course of employment (while on duty), in order for the common carrier to be held liable. Reasons for the rule: a. Full measure of protection to the passenger through exercise of high degree of care prescribed by law (from violence and insults of strangers, fellow passengers and employees of common carrier themselves)

b. Delegation of duty to transport the passenger in the hands of their employees. c. Power of selection and removal belongs with the common carriers.

It is the carriers strict obligation to select its drivers and employees with due regard not only to their technical competence and physical ability, but also, no less important, to their total personality, including their patterns of behavior, moral fibers and social attitude. The RTC rightly adjudged the carrier (Perez) liable pursuant to Art. 1759. The dismissal of the claim against the driver (Valenzuela) was also correct. The action was predicated on breach of contract of carriage and the cab driver was not a party thereto. His civil liability is covered in the criminal case wherein he was convicted by final judgment. De Gillaco vs. Manila Railroad Company GR L-8034, Nov. 18, 1955 Facts: 1. At around 7am of 1 April 1946, Lieut. Tomas Gillaco was a passenger in the train of respondent MRC. Respondent Emilio Devesa, a train guard of the latter happened to be in said station waiting for the same train which would take him to Tututban Station, where he was going to report for duty (9am-7pm of that same day). 2. Devesa had a long standing personal grudge against Gillaco, dating back during the Japanese occupation; hence, because of such personal grudge, Devesa shot Gillaco with the carbine furnished to him by the MRC for his use as such train guard, upon seeing him inside the train coach. 3. Gillaco died as a result of the incident. Devesa was later convicted of homicide by final judgment.

JARWIK

12

Maritime Law 4. Petitioner Cornelia De Gillaco, filed this case for damages against MRC as an employer of Devesa. Issue: Whether or not MRC is liable for damages as to the criminal act of Devesa. Held: No. There can be no quarrel with the principle that a passenger is entitled to protection from personal violence by the carrier or its agents or employees, since the contract of transportation obligates the carrier to transport a passenger safely to his destination. But under the law of the case, this responsibility extends only to those that the carrier could foresee or avoid through the exercise of the degree of care and diligence required of it. The act of Devesa in shooting Gillaco was entirely unforeseeable by the MRC. The latter had no means to ascertain or anticipate that the two would meet, nor could it reasonable foresee every personal rancor that might exist between each one of its many employees and any one of the thousands of eventual passengers riding in its trains. The shooting was therefore a caso fortuito, being both unforeseeable and inevitable. The resulting breach of respondents contract of safe carriage with Gillaco was excused thereby. To require respondent that it should guard against all possible misunderstanding between each and every one of its employees and every passenger that might chance to ride in its conveyances at any time, strikes us as demanding diligence beyond what human care and foresight can provide. The Old Civil Code did not impose such absolute liability against common carriers for acts of their employees. Important note: when the crime took place, Devesa had no duties to discharge in connection with the transportation of Gillaco since the incident happened outside his time for duty. Devesa was therefore under no obligation to safeguard the passengers were Gillaco was riding. The killing of Gillaco was not done in lide of duty. The position of Devesa at the time was that of another would be passenger, a stranger awaiting transportation, and not that of an employee assigned to discharge any of the duties that MRC had assumed by its contract with Gillaco. Devesas assault cannot, therefore, be deemed in law a breach of Gillacos contract of transportation by a servant or employee of the carrier MRC. Aboitiz Shipping Corp. vs. Gen. Accident Fire & Life Assurance Ltd. GR 100446; 21 Jan. 1993 Facts: 1. Aboitiz is a corporation engaged in the business of maritime trade as a carrier. It owned/operated the ill-fated "M/V P. ABOITIZ," a common carrier which sank on a voyage from Hongkong to the Philippines on October 31, 1980. General Accident Fire and Life Assurance Corporation, Ltd. (GAFLAC) is a foreign insurance company pursuing its remedies as a subrogee of several cargo consignees whose respective cargo sank with the said vessel and for which it has priorly paid. 2. Board of Marine Inquiry found that such sinking was due to force majeure and that subject vessel, at the time of the sinking was seaworthy. 3. RTC, however, found against the carrier on the basis that the loss subject matter therein did not occur as a result of force majeure. Hence, it granted an execution of judgment award in the amount of P1,072,611.20. This was affirmed by the CA. 4. Contention of Aboitiz: (a) The doctrine of limited liability on the totality of the claims vis a vis the losses brought about by the sinking of the vessel M/V P. ABOITIZ, as based on the real and hypothecary nature of maritime law, should apply, and not the given judgment award. (b) The finding of unseaworthiness of a vessel is not necessarily attributable to the shipowner. Issue: Whether or not the Limited Liability Rule arising out of the real and hypothecary nature of maritime law should apply in this and related cases. Held: Yes. The real and hypothecary nature of maritime law simply means that the liability of the carrier in connection with losses related to maritime contracts is confined to the vessel, which is hypothecated for such obligations or which stands as the guaranty for their settlement. Thus, the liability of the vessel owner and agent arising from the operation of such vessel were confined to the vessel itself, its equipment, freight, and insurance, if any.

JARWIK

13

Book III (CoC): a. Art. 587. The ship agent shall also be civilly liable for the indemnities in favor of third persons which may arise from the conduct of the captain in the care of the goods which he loaded on the vessel; but he may exempt himself therefrom by abandoning the vessel with all her equipment and the freight it may have earned during the voyage. (Injuries to 3rd Parties)

coastwise trade from the different ports of Oriental Mindoro to the Port of Manila. 2. October 1977, Chua loaded 1,000 sacks of copra, valued at P101,227.40, on board the vessel "M/V Luzviminda I" for shipment from Puerto Galera to Manila. Somewhere between Cape Santiago and Calatagan, the vessel capsized and sank with all its cargo. 3. Chua Instituted a complaint for damages based on breach of contract of carriage against private respondents. 4. RTC decided in favor of Chua, holding respondents solidarily liable. CA ruled to the contrary (applying Art. 587 of CoC). It held that private respondents' liability, as ship owners, for the loss of the cargo is merely co-extensive with their interest in the vessel such that a total loss thereof results in its extinction. Issue: Whether or not respondent Appellate Court erred in applying the doctrine of limited liability under Article 587 of the Code of Commerce. Held: No. The ship owner's or agent's liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction. "No vessel, no liability" expresses in a nutshell the limited liability rule. The total destruction of the vessel extinguishes maritime liens as there is no longer any res to which it can attach. The real and hypothecary nature of the liability of the ship owner or agent had its origin in the prevailing conditions of the maritime trade and sea voyages attended by innumerable hazards and perils. To offset against these adverse conditions and to encourage ship building and maritime commerce, it was deemed necessary to confine the liability of the owner or agent arising from the operation of a ship to the vessel, equipment, and freight, or insurance, if any, so that if the ship owner or agent abandoned the ship, equipment, and freight, his liability was extinguished. Without the principle of limited liability, a ship owner and investor in maritime commerce would run the risk of being ruined by the bad faith or negligence of his captain, and the apprehension of this would be fatal to the interest of navigation.
JARWIK

b. Art. 590. The co-owners of a vessel shall be civilly liable in the proportion of their interests in the common fund for the results of the acts of the captain referred to in Art. 587. Each co-owner may exempt himself from this liability by the abandonment, before a notary, of the part of the vessel belonging to him. (Injuries due to Acts of the Captain) c. Art. 837. The civil liability incurred by shipowners in the case prescribed in this section (on collisions), shall be understood as limited to the value of the vessel with all its appurtenances and freightage served during the voyage. (Injuries due to Collision)

Exception: The only time the Limited Liability Rule does not apply is when there is an actual finding of negligence on the part of the vessel owner or agent. The records in the instant case will show that there has been no actual finding of negligence on the part of petitioner. The cause of the sinking of the vessel was because of unseaworthiness due to the failure of the crew and the master to exercise extraordinary diligence. In the case of a lost vessel, these are the insurance proceeds and pending freightage for the particular voyage. In the instant case, there is, therefore, a need to collate all claims preparatory to their satisfaction from the insurance proceeds on the vessel M/V P. Aboitiz and its pending freightage at the time of its loss. Petition Granted. Chua Yek Hong vs. IAC, Mariano Guno & Dominador Olit GR 74811; 30 Sept. 1988 Facts: 1. Chua is a duly licensed copra dealer. Mariano and Dominador are the owners of the vessel, "M/V Luzviminda I," a common carrier engaged in

14

Exceptions: a. Injury or death to a passenger is due either to the fault of the ship owner, or to the concurring negligence of the ship owner and the captain.

4. NSB decided in respondents favor ordering Litonjua and Mullion solidarily liable for having no valid cause for the termination of the services of Gregorio. 5. Contention of Litonjua: The shipowner, not the charterer, was the employer of private respondent; and that liability for damages cannot be imposed upon petitioner which was a mere agent of the charterer. It is insisted that private respondent's contract of employment and affidavit of undertaking clearly showed that the party with whom he had contracted was none other than Mullion, the shipowner, represented by the ship's master.

b. Vessel is insured. c. Workmens Compensation Claims

In this case, there is nothing in the records to show that the loss of the cargo was due to the fault of the private respondent as shipowners, or to their concurrent negligence with the captain of the vessel. In sum, it will have to be held that since the ship agent's or ship owner's liability is merely co-extensive with his interest in the vessel such that a total loss thereof results in its extinction; and none of the exceptions to the rule on limited liability being present, the liability of private respondents for the loss of the cargo of copra must be deemed to have been extinguished. There is no showing that the vessel was insured in this case. Petition Denied. Litonjua Shipping Comp. Inc. vs. Natl Seamen Board & Gregorio Candongo GR L-51910; 10 Aug. 1989 Facts: 1. Litonjua is the duly appointed local crewing Managing Office of the Fairwind Shipping Corporation (Fairwind). The M/V Dufton Bay is an ocean-going vessel of foreign registry owned by the R.D. Mullion Ship Broking Agency Ltd. (Mullion). 2. Dufton Bay was chartered by Fairwind and its master contracted the services of private respondent Gregorio Candongo to serve as Third Engineer for a period of twelve (12) months. Yet, before expiration of his contract, private respondent was required to disembark at Port Kelang, Malaysia, and was returned to the Philippines; the cause of which was stated as by owners arrange. 3. On his return to Phils., Gregorio filed a complaint before the Natl Seamen Board (NSB) for violation of contract, against Mullion as the shipping company and petitioner Litonjua as agent of the shipowner and of the charterer of the vessel.

Issue: Whether or not the charterer Fairwind was properly regarded as the employer of private respondent Candongo. Held: Yes. Charter Party that existed between Mullion (shipowner) and Fairwind (charterer) a. Bareboat or Demise Charter The shipowner turns over possession of his vessel to the charterer, who then undertakes to provide a crew and victuals and supplies and fuel for her during the term of the charter. The shipowner is not normally required by the terms of a demise charter to provide a crew, and so the charterer gets the "bare boat", i.e., without a crew.

b. Time Charter - A contract for the use of a vessel for a specified period of time or for the duration of one or more specified voyages. The owner of a time-chartered vessel retains possession and control through the master and crew who remain his employees. The time charterer acquires the right to utilize the carrying capacity and facilities of the vessel and to designate her destinations during the term of the charter. c. Voyage or Trip charter - A contract of affreightment, that is, a contract for the carriage of goods, from one or more ports of loading to one or more ports of unloading, on one or on a series of voyages. In a voyage charter, master and crew remain in the employ of the owner of the vessel.

In a demise or bare boat charter, the charterer is treated as owner pro hac vice of the vessel, the charterer assuming in large measure the customary rights and liabilities of the shipowner in relation to third persons who have dealt with him or with the vessel. In such case, the Master of the vessel is

JARWIK

15

the agent of the charterer and not of the shipowner. The charterer or owner pro hac vice, and not the general owner of the vessel, is held liable for the expenses of the voyage including the wages of the seamen. Treating Fairwind as owner pro hac vice, petitioner Litonjua having failed to show that it was not such, we believe and so hold that petitioner Litonjua, as Philippine agent of the charterer, may be held liable on the contract of employment between the ship captain and the private respondent. Petition Denied.

Actions in Case of Breach of Contract of Carriage UCPB General Insurance Co. vs. Aboitiz Shipping Corp. & Eagle Express Line GR # 168433, 10 Feb. 2009 Facts: 1. San Miguel Corp. (SMC) purchased 3 units of Waste Water Treatment Plant from Super Max Engineering Ent. Co. The goods came from Charleston, USA and arrived at Manila on board MV Scandutch Star. 2. They were then transhipped to MV Aboitiz Supercon II then transported to Cebu. The goods were later received by SMC at its Cebu Plant Site on August 2, 1991. There it discovered that one electrical motor of DBS Drive Unit Model DE-30-7 was damaged. 3. Plaintiff UCPB, as insurer, paid SMC representing the value of the damaged unit. As subrogee, UCPB filed a complaint on July 21, 1992 against Aboitiz to recover the amount it had paid SMC. 4. Defenses: a. UCPB Art. 366 of CoC should not apply because the damage had already been known to the carrier..but UCPB interestingly revealed that it knew that the damage was found upon discharge from the foreign carrier (MV Scandutch Star) in the presence of a representative of Eagle Expess Line (in defense Eagle claimed to have represented the interest of the cargo owner, and not the carriers)

b. Aboitiz should not be held responsible because the goods was already damaged even before the transshipment. Further, Art. 366 of CoC serves as a condition precedent to the accrual of UCPBs cause of action against it. 5. RTC ruled against Aboitiz, compelling it to pay UCPB.

JARWIK

6. CA, however, reversed the RTC decision, ruling that UCPBs right of action did not accrue for failure to file formal notice of claim within 24 hours from SMCs receipt of the damaged merchandize as required under Art. 366 of Code of Commerce. (Notice of claim as a condition precedent to the accrual of right of action against the carrier for the damages caused to the merchandize)

16

Issue: Whether a claim should have been made by SMC, or UCPB as SMCs subrogee, within the 24-hour period prescribed by Art. 366 of the Code of Commerce was squarely raised before the trial court. Held: No. The shipment in this case was received by SMC on August 2, 1991. However, as found by the Court of Appeals, the claims were dated October 30, 1991, more than three (3) months from receipt of the shipment and, at that, even after the extent of the loss had already been determined by SMCs surveyor. The claim was, therefore, clearly filed beyond the 24-hour time frame prescribed by Art. 366 of the Code of Commerce. The requirement to give notice of loss or damage to the goods is not an empty formalism. The fundamental reason or purpose of such a stipulation is not to relieve the carrier from just liability, but reasonably to inform it that the shipment has been damaged and that it is charged with liability therefor, and to give it an opportunity to examine the nature and extent of the injury. This protects the carrier by affording it an opportunity to make an investigation of a claim while the matter is still fresh and easily investigated so as to safeguard itself from false and fraudulent claims. After the periods mentioned have elapsed, or the 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. Sec. 3(6) of COGSA provides a similar claim but prescribes a period of 3 days within which notice of claim must be given if the loss or damage is not apparent. Yet, such COGSA provision will not apply since it was not raised as an issue by UCPB before the RTC. Petition DENIED. Philippine Charter Insurance Corp. vs. Chemoil Lighterage Corp. GR # 136888, 29 June 2005 Facts: 1. Samkyung Chemical Company shipped 62.06 metric tons of the liquid chemical DIOCTYL PHTHALATE (DOP) and another 436.70 metric tons of DOP on board MT TACHIBANA to the Philippines. The consignee was Plastic Group Phils., Inc. (PGP) in Manila. 2. The ocean tanker MT TACHIBANA unloaded the cargo to Tanker Barge LB-1011 of respondent Chemoil Lighterage Corporation (CLC), which

shall transport the same to Del Pan Bridge in Pasig River. Tanker Barge LB-1011 would unload the cargo to tanker trucks, also owned by the respondent, and haul it by land to PGPs storage tanks in Calamba, Laguna. 3. Upon inspection by PGP, the samples taken from the shipment showed discoloration from yellowish to amber, demonstrating that it was damaged, as DOP is colorless and water clear. PGP then sent a letter to the petitioner dated 18 February 1991 where it formally made an insurance claim for the loss it sustained due to the contamination. This was later paid by herein petitioner-insurer. 4. As subrogee, petitioner-insurer, filed on 15 July 1991 a claim for damages against CLC. 5. Defenses: a. PGP and PCIC notice of contamination was given through a phone call at the time of delivery of the cargo.

b. CLC notice given by PGP over the telephone was denied by VP of CLC. Between the testimonies of Chan and Abastillas, the latters testimony is more credible because it would be quite unbelievable and contrary to business practice for Chan to merely make a verbal notice of claim that involves millions of pesos. 6. RTC rendered judgment in favour of PCIC, compelling CLC to pay what the former has paid PGP. CA, however, reversed the said RTC ruling for failure to file a notice of claim on time prescribed by Art. 366 of Code of Commerce. Issue: Whether the notice of claim (phone call) was filed within the required period. Held: No. A telephone call made by a PGP employee to a Vice President of CLC may have constituted as a substantial compliance of the requirement of notice, yet no proof was offered that it was done within the required period, which is fatal as to the accrual of the right of action against CLC. Both courts held that, indeed, a telephone call was made by Alfredo Chan (PGP employee) to Encarnacion Abastillas (VP of CLC), informing the latter of the contamination. However, nothing in the trial courts decision stated that the notice of claim was relayed or filed with the respondent-

JARWIK

17

carrier immediately or within a period of twenty-four hours from the time the goods were received. The Court of Appeals made the same finding. Having examined the entire records of the case, we cannot find a shred of evidence that will precisely and ultimately point to the conclusion that the notice of claim was timely relayed or filed. The filing of a claim with the carrier within the time limitation therefore actually constitutes a condition precedent to the accrual of a right of action against a carrier for loss of, or damage to, the goods. The shipper or consignee must allege and prove the fulfillment of the condition. If it fails to do so, no right of action against the carrier can accrue in favor of the former. The aforementioned requirement is a reasonable condition precedent; it does not constitute a limitation of action. There is no evidence to confirm that the notice of claim was filed within the period provided for under Article 366 of the Code of Commerce. Petitioners contention proceeds from a false presupposition that the notice of claim was timely filed. Petition Denied. Aboitiz Shipping Corp. vs. Insurance Comp. of North America GR # 168402, 6 Aug. 2008 Facts: 1. MSAS Cargo Intl Ltd. procured a marine insurance policy from respondent Insurance Company of North America (ICNA) UK Limited of London. The insurance was for a transshipment of certain wooden work tools and workbenches purchased for the consignee Science Teaching Improvement Project (STIP). 2. The cargo, packed inside one container van, was shipped "freight prepaid" from Hamburg, Germany on board M/S Katsuragi. On July 26, 1993, the cargo was received by petitioner Aboitiz Shipping Corporation (Aboitiz) with a notation "grounded outside warehouse." 3. The vessel left Manila en route to Cebu on Aug. 2, 1993. The next day, the shipment arrived in Cebu.On Aug. 11, 1993, the cargo was withdrawn by the consignee, STIP and delivered to Don Bosco Technical High School. It was received by Mr. Bernhard Willig. 4. On August 13, 1993, Mayo B. Perez, then Claims Head of petitioner, received a telephone call from Willig informing him that the cargo sustained water damage. Perez, upon receiving the call, immediately checked the condition of the container and other cargoes. He confirmed that the tools which were stored inside the crate were already corroded.

5.

In a letter dated August 15, 1993, Willig informed Aboitiz of the damage noticed upon opening of the cargo. On September 21, 1993, the consignee filed a formal claim with Aboitiz. STIP then was paid by ICNA as insurer, and the latter thereafter filed a complaint as subrogee against Aboitiz.

6. RTC decided that ICNA was not entitled to relief. CA, however, reversed the ruling of RTC, holding Aboitiz liable to ICNA as a subrogee, eventhough it is an unlicensed foreign corporation. Issue: Whether there was timely filing of notice as required by Art. 366. Held: Yes. Stipulations requiring notice of loss or claim for damage as a condition precedent to the right of recovery from a carrier must be given a reasonable and practical construction, adapted to the circumstances of the case under adjudication, and their application is limited to cases falling fairly within their object and purpose. Understandably, when the goods were delivered, the necessary clearance had to be made before the package was opened. Upon opening and discovery of the damaged condition of the goods, a report to this effect had to pass through the proper channels before it could be finalized and endorsed by the institution to the claims department of the shipping company. The call to petitioner was made two days from delivery, a reasonable period considering that the goods could not have corroded instantly overnight such that it could only have sustained the damage during transit. Moreover, petitioner was able to immediately inspect the damage while the matter was still fresh. In so doing, the main objective of the prescribed time period was fulfilled. Thus, there was substantial compliance with the notice requirement in this case. Petition Denied. Mitsui O.S.K. Lines vs. CA & Lavine Laoungewear Mfg. Corp. GR # 119571; 11 Mar. 1998 Facts: ** The 1 year prescriptive period under Sec. 3(6) of COGSA will not apply to damages caused to the shippers goods in the general sense.
JARWIK

18

1.

Petitioner Mitsui entered into a contract of carriage with private respondent Lavine to transport goods of the latter from Manila to France for 28 days from initial loading.

contract of carriage with Lavine as covered by the laws of more general application. The question before the RTC is not the particular sense of damage as it refers to the physical loss or damage of the shippers goods as specifically covered by Sec. 3(6) of COGSA but Mitsuis potential liability for the damages it has caused in the general sense and, as such, the matter is governed by the Civil Code, the Code of Commerce and COGSA, for the breach of its contract of carriage with private respondent. Hence, the holding of the present suit is not for loss or damage to goods contemplated in Sec. 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 10 years. Petition Denied. Filipino Merchants Ins. Co. vs. Hon. Alejandro & Frota Oceanica Brasilieara GR # L-54140 Filipino Merchants Ins. Co. vs. Hon. Benipayo & Australia-West Pacific Line GR # L-62001 Facts: ** Coverage of the 1 year prescriptive period under the COGSA includes the insurer of the goods. 1. Petitioner Filipino Merchants was an insurer in two transactions (marine insurance policy) mainly: (a) Choa Tiek Sengs goods which sustained loss and damage having Frota Oceanica Brasilieara as the carrier; and (b) Joseph Benzons goods which also sustained loss and damage having Australia-West Pacific Line as the carrier.

2. On 24 July 1991, Mitsui loaded Lavines container van for carriage at the said port of origin. However, in Taiwan, the goods were not transhipped immediately. As a result, the shipment arrived in France only on 14 November 1991 (3 mos & 20 days or 110 days). 3. This prompted the consignee in France to pay only half of the value of the goods on the ground that they arrived in an off season. The other half was charged to the account of Lavine. In turn, Lavine demanded payment from Mitsui, which the latter denied. 4. Lavine, then filed a complaint against Mitsui. The latter filed a motion to dismiss alleging that the claim against it had already prescribed under the COGSA. 5. RTC denied the motion of Mitsui and decided in favour of Lavine. This decision was affirmed and sustained by the CA.

Issue: Whether or not Lavines action is for loss or damage to goods shipped, within the meaning of Sec. 3(6) of the COGSA. Held: No. Loss (Civil Code definition as applied to COGSA) contemplates 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. Whatever damage or injury is suffered by the goods while in transit would result in loss or damage to either the shipper or consignee. As long as it is claimed that the losses or damages suffered by the shipper or consignee were due to the arrival of the goods in damaged or deteriorated condition, the action is still basically one for damage to the goods, and must be filed within the period of 1 year from delivery or receipt, under COGSA. There is neither deterioration nor disappearance nor destruction of goods caused by the carriers breach of contract. Whatever reduction there may have been in the value of goods is not due to their deterioration or disappearance because they had been damaged in transit. What is in issue in this petition is not the liability of Mitsui for its handling of goods as provided by Sec. 3(6) of the COGSA, but its liability under its

2. Due to the said incidents, both shippers (insured) filed a complaint for recovery of a sum of money under the said policies against Filipino Merchants, which in turn filed third-party complaints against herein private respondent carriers Frota and Australia-West. 3. In both cases, Frota and Australia-West alleged that the Filipino Merchants is already barred from filing a claim because under the COGSA, the suit against the them must be filed within one year after delivery of the goods or the date when the goods should have been delivered. 4. Defense of Filipino Merchants: COGSA provision applies only to the shipper, not the insurer of the goods.

JARWIK

19

5.

RTC ruled in favour of Frota and Australia, hence dismissed both the third-party complaints by Filipino Merchants.

Issue: Whether or not the prescriptive period of one year under the COGSA also applies to an insurer such as herein plaintiff Filipino Merchants. Held: Yes. The RTC did not err. The coverage of the COGSA includes the insurer of the goods. Otherwise, what the COGSA intends to prohibit after the lapse of the one year prescriptive period can be done indirectly by the shipper or owner of the goods simply by filing a claim against the insurer even after the lapse of one year.This would be the result if petitioners argument would be followed; that 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: a. 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 time as possible and

Mayer Steel Pipe Corp. & Hongkong Govt Supplies Dept. vs. CA, South Sea Surety and Insurance Co. and Charter Insurance Corp. 274 SCRA 432 (1997) Facts: ** Under Sec. 3(6) of COGSA, only the Carriers liability is extinguished if no suit is brought within one year. 1. Petitioners Mayer and Hongkong Govt Supplies Dept. (HGSD) entered into a contract wherein the former would manufacture and supply the latter various steep pipes and fittings. These products where insured by Mayer with herein respondent insurance company under an all risk policy.

2. Mayer delivered the said products, yet when the goods reached Hongkong, it was discovered that a substantial portion thereof was damaged. 3. In view of the said damage as well as the refusal of the insurers to pay, Mayer and HGSD filed this claim for indemnity by virtue of the said insurance policy. 4. RTC ruled in favour of Mayer and HSDG pronouncing that the goods were damaged not due to manufacturing defects and that the policy was an one of all risk which includes all causes of conceivable loss or damage. 5. CA affirmed the RTC decision. However, it set aside the same ruling and dismissed the complaint on the ground of prescription. It held that the action is already barred under Sec. 3(6) of COGSA since it was filed more than two years from the time the goods were unloaded from the vessel.

b. Avoiding incidents which would necessarily extend the period and permit delays in the settlement of questions affecting the transportation. The shippers Choa and Benzon, in the present case, have given extra-judicial notice to their respective carriers and filed suit against Filipino Merchants well within the one year from their receipt of the goods. Filipino Merchants had plenty of time within which to act (file third-party complaints): a. In Choa case, Filipino Merchants had more than four months to file TPC.

Issue: Whether or not petitioners cause of action had already prescribed under Sec. 3(6) of COGSA. Held: No. The petition is impressed with merit. The CA has erred in applying Sec. 3(6) of COGSA. The said provision 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
JARWIK

b. c. In Benzon case, Filipino Merchants had more than five months to file TPC. In both instances however, the petitioner had slept on its right in its failure to file the appropriate actions against the private respondent carriers herein. Petitions Denied.

20

one year after delivery of the goods or the date when they should have been delivered. Under this provision, only the carriers liability is extinguished if no suit is brought within one year. But the liability of the insurer is not extinguished because the insurers liability is based not on the contract of carriage but on the contract of insurance. A close reading of the law reveals that COGSA governs the relationship between the carrier on the one hand and the shipper, the consignee and/or the insurer on the other hand. COGSA defines the obligation of the carrier under the contract of carriage. It does not, however, affect the relationship between the shipper and the insurer. The latter case is governed by the Insurance Code. Petition Granted. Note: Mayer Steel Pipe case COMPARED TO Filipino Merchants case Mayer Steel Pipe It was the shipper which filed a claim against the insurer; the basis of which is the all risk insurance policies issued by private respondents to Mayer. Applies to suits against the insurer filed by the shipper (insured) Basis: Insurance Contract Prescriptive Period: 10 years (Art. 1144) Filipino Merchants It was the insurer which filed a claim against the carrier for reimbursement of the amount it paid to the shipper. Applies to suits against the carrier filed either by the Shipper, Consignee or Insurer Basis: COGSA Prescriptive Period: 1 year

to help and assist her, and even sarcastically remarked that "If I were to help all 300 passengers in this flight, I would have a broken back!" 2. Edna further alleged that when the plane was about to land in Rome, another flight attendant, Nickolas Kerrigan (Kerrigan), singled her out from among all the passengers. Kerrigan made her appear to the other passengers to be ignorant, uneducated, stupid, and in need of lecturing on the safety rules and regulations of the plane. 3. Because of the incidents, Edna filed a complaint for damages against herein respondent before RTC of Makati City. 4. RTC dismissed the complaint for lack of jurisdiction in accordance with a provision on Warsaw Convention. Issue: Whether Philippine Courts have jurisdiction over the case. Held: No. The In the case at bench, petitioners place of departure was London, United Kingdom while her place of destination was Rome, Italy. Both the United Kingdom and Italy signed and ratified the Warsaw Convention. As such, the transport of the petitioner is deemed to be an "international carriage" within the contemplation of the Warsaw Convention. Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for damages before a. court where the carrier is domiciled;

b. court where the carrier has its principal place of business; c. court where the carrier has an establishment by which the contract has been made; or

Edna Diago Lhuillier vs. British Airways GR # 171092 Facts: ** Jurisdiction is a power introduced for the public good, on account of the necessity of dispensing justice. (Jurisdictio est potestas de publico introducta cum necessitate juris dicendi) 1. Edna Diago Lhuillier took respondents flight 548 from London, United Kingdom to Rome, Italy. Once on board, she allegedly requested Julian Halliday (Halliday), one of the flight attendants, to assist her in placing her hand-carried luggage in the overhead bin. However, Halliday refused

d. court of the place of destination. In this case, respondent is a British corporation domiciled in London, U.K. with London as its principal place of business. Hence, under the 1 st and 2nd jurisdictional rules, the petitioner may bring her case before the courts of London in the U.K. In the passenger ticket and baggage check presented by both the petitioner and respondent, it appears that the ticket was issued in Rome, Italy. Under

JARWIK

21

the 3rd jurisdictional rule, the petitioner has the option to bring her case before the courts of Rome in Italy. Finally, both the petitioner and respondent aver that the place of destination is Rome, Italy, which is properly designated given the routing presented in the said passenger ticket and baggage check. Accordingly, petitioner may bring her action before the courts of Rome in Italy. We thus find that the RTC of Makati correctly ruled that it does not have jurisdiction over the case filed by the petitioner. Petition Denied. China Airlines vs. Daniel Chiok GR # 152122, 30 July 2003 Facts: ** A common carrier has a peculiar relationship with and an exacting responsibility to its passengers. For reasons of public interest and policy, the ticket-issuing airline acts as principal in a contract of carriage and is thus liable for the acts and the omissions of any errant carrier to which it may have endorsed any sector of the entire, continuous trip. 1. Daniel Chiok purchased from China Airlines (CAL) a passenger ticket covering Manila-Taipei-Hongkong-Manila. Said ticket was exclusively endorseable to Philippine Airlines (PAL).

6. RTC held PAL and CAL solidarily liable. CA affirmed the same. Issue: Whether CAL is liable for damages. Held: Yes. The contract of air transportation was between petitioner and respondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in this jurisdiction as a single operation. This jurisprudential rule is supported by the Warsaw Convention, to which the Philippines is a party, and by the existing practices of the International Air Transport Association (IATA). The ticket-issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent. In the instant case, following the jurisprudence cited above, PAL acted as the carrying agent of CAL. In the same way that we ruled against British Airways and Lufthansa in the aforementioned cases, we also rule that CAL cannot evade liability to respondent, even though it may have been only a ticket issuer for the Hong Kong-Manila sector. Petition Denied. FedEx Corp. vs. American Home Assurance Comp. & Philam Ins. Comp. GR # 150094, 18 Aug. 2004 Facts: **Basic is the requirement that before suing to recover loss of or damage to transported goods, the plaintiff must give the carrier notice of the loss or damage, within the period prescribed by the Warsaw Convention and/or the airway bill. 1. SMITHKLINE of Nebraska, USA delivered to Burlington Air Express (BURLINGTON), an agent of petitioner Federal Express Corporation (FedEx) a shipment of 109 cartons of veterinary biologicals for delivery to consignee SMITHKLINE and French Overseas Company in Makati City, Metro Manila.
JARWIK

2. Chiok took his trip from Manila to Taipei using CAL ticket. When he arrived in Taipei, he went to the CAL office and confirmed his Hongkong to Manila trip on board PAL Flight No. PR 311. 3. When he reached Hongkong, he went to the PAL office and sought to reconfirm his flight back to Manila. The PAL office confirmed his return trip on board Flight No. PR 311 and attached its own sticker. On November 24, 1981, he proceeded to Hongkong International Airport for his return trip to Manila, yet was cancelled because of a typhoon in Manila. He was then informed that all the confirmed ticket holders of PAL Flight No. PR 311 were automatically booked for its next flight, which was to leave the next day. 4. On November 25, 1981, he learned from PAL terminal supervisor that his name did not appear in the computer list of passengers and therefore could not be permitted to board PAL Flight No. PR 307. 5. Upon these incidents, he lost certain luggages and things he brought with him. Because of these occurrences, he filed a complaint for damages against PAL and CAL.

2. The shipment was covered by Burlington Airway Bill with the words, 'REFRIGERATE WHEN NOT IN TRANSIT' and 'PERISHABLE' stamp marked on its face. Burlington turned over the custody of said cargoes to Federal Express which transported the same to Manila.

22

3. On Feb. 10, 1994, Dario Dioneda, twelve (12) days after the cargoes arrived in Manila, a non-licensed custom's broker found out that the same were stored only in a room with two (2) air conditioners running, to cool the place instead of a refrigerator. 4. As a consequence of the foregoing result of the veterinary biologics test, SMITHKLINE abandoned the shipment and, declaring 'total loss' for the unusable shipment. 5. Respondent AHAC, as insurer, paid Smithkline. Thereafter, the former filed an action for damages against FedEx imputing negligence on either of both of them in the handling of the cargo.

PAL vs. Hon. Adriano Savillo (RTC Judge) and Simplicio Grio GR # 149547, 4 July 2008 Facts: 1. Simplicio Grio was invited to participate in the 1993 ASEAN Seniors Annual Golf Tournament in Indonesia. He and several companions purchased their passenger tickets from PAL with the following points of passage: Manila-Singapore-Jakarta-Singapore-Manila. They were made to understand by PAL that its plane would take them from Manila to Singapore, while Singapore Airlines would take them from Singapore to Jakarta. 2. On 3 Oct. 1993, they took PAL flight to Singapore, yet upon arrival Singapore Airlines rejected their connecting flight as they were not endorsed by PAL. 3. Stranded at Singapore and left with no recourse, Simplicio was in panic and at a loss where to go; and was subjected to humiliation, embarrassment, mental anguish, serious anxiety, fear and distress. 4. Eventually, they were forced to purchase tickets from Garuda Airlines bound for Jakarta. When they arrived in Jakarta, the party who was supposed to fetch them from the airport had already left and they had to arrange for their transportation to the hotel at a very late hour. After the series of nerve-wracking experiences, Simplicio became ill and was unable to participate in the tournament. 5. Upon his return to the Philippines, Simplicio brought the matter to the attention of PAL. He sent a demand letter to PAL on 20 Dec. 1993 and to Singapore Airlines on 21 Mar. 1994, which both airlines disowned liability and blamed each other for the fiasco. On 15 Aug. 1997, he filed a Complaint for Damages.

6. RTC and CA made FedEx liable. Issue: Whether FedEx is liable for damage to or loss of insured goods. Held: No. Petitioner has tirelessly pointed out that respondents' claim and right of action are already barred. The latter, and even the consignee, never filed any written notice or complaint regarding its claim for damage of or loss to the subject cargo within the period required by the Warsaw Convention and/or in the airway bill. Indeed, this fact has never been denied by respondents and is plainly evident from the records. When an airway bill has a stipulation that requires a notice of claim for loss of or damage to goods shipped and the stipulation is not complied with, its enforcement can be prevented and the liability cannot be imposed on the carrier. To stress, notice is a condition precedent, and the carrier is not liable if notice is not given in accordance with the stipulation. Failure to comply with such a stipulation bars recovery for the loss or damage suffered. Being a condition precedent, the notice must precede a suit for enforcement. In the present case, there is neither an allegation nor a showing of respondents' compliance with this requirement within the prescribed period. While respondents may have had a cause of action then, they cannot now enforce it for their failure to comply with the aforesaid condition precedent. Petition Granted.

6. RTC favored Simplicio by applying the provisions of the Civil Code, not the Warsaw Convention. This was affirmed by the CA. Issue: Whether or not the action has already prescribed. Which law will apply? Held: No. The New Civil Code. This Court distinguished between the: a. Damage to the passengers baggage (Warsaw Convention-2 yrs); and
JARWIK

23

b. Humiliation he suffered at the hands of the airlines employees (NCC-4 yrs). New Civil Code will apply. Simplicios Complaint alleged that both PAL and Singapore Airlines were guilty of gross negligence. The emotional harm suffered by him as a result of having been unreasonably and unjustly prevented from boarding the plane should be distinguished from the actual damages which resulted from the same incident. Under the Civil Code provisions on tort, such emotional harm gives rise to compensation where gross negligence or malice is proven. While this fact still needs to be heard and established by adequate proof before the RTC, an action based on these allegations will not fall under the Warsaw Convention, since the purported negligence on the part of PAL did not occur during the performance of the contract of carriage but days before the scheduled flight. Thus, the present action cannot be dismissed based on the statute of limitations provided under Article 29 of the Warsaw Convention. Lufthansa German Airlines vs. CA & Tirso Antiporda Sr. GR # 83612; 24 Nov. 1994 Facts: 1. Tirso Antiporda, an associate director of the Central Bank of the Phils and a registered consultant of Asian Devt Bank, World Bank and the UNDP, was contracted by SGV to be the institutional financial specialist of Investment and Development Bank of Malawi. 2. Through SGV, petitioner Lufthansa issued a roundtrip ticket for Antipordas confirmed flights to Malawi, Africa. The travel stated this route: Manila-Singapore-Bombay-Nairobi-Lilongwe-Blantyre(Malawi). 3. Antiporda took the Lufthansa flight to Singapore, then to Bombay. Both flights were accorded by Lufthansa Airline. 4. However, upon departure from Bombay, he was informed by the duty officer therein that his seat in Air Kenya bound to Nairobi had been given to a very important person of Bombay. He protested, yet to no avail. Stranded in Bombay for 32 hours, he booked for Nairobi via another airline and arrived in Malawi more than a couple of days late for his appointment therein.

5.

Upon return in Philippines, Antiporda, through his counsel, demanded from Lufthansa indemnity for damages due to malicious and wanton disregard of the contract of carriage. Getting no positive action from Lufthansa, he filed a complaint against the same.

6. RTC found that Lufthansa breached the contract of air transportation as it was exclusively between the Antiporda and Lufthansa, the latter merely endorsing its performance to Air Kenya, as its subcontractor or agent. CA affirmed the RTC decision, explaining that: although the contract of carriage was to be performed by several air carriers, the same is to be treated as a single operation conducted by Lufthansa because Antiporda dealt exclusively with it which issued him a Lufthansa ticket for the entire trip. By issuing a confirmed ticket, Lufthansa in effect guaranteed Antiporda a sure seat with Air Kenya. Issue: Whether or not Lufthansa which issued a confirmed Lufthansa ticket to Antiporda covering a five-leg trip abroad different airlines should be held liable for damages occasioned by the "bumping-off" of Antiporda by Air Kenya, one of the airlines contracted to carry him to a particular destination of the five-leg trip. Held: Yes. In view of the issued Ticket defining the true nature of its contract of carriage with Antiporda, Lufthansa cannot claim that its liability thereon ceased at Bombay and thence, shifted to the various carriers that assumed the actual task of transporting him. We, therefore, reject Lufthansa's theory that from the time another carrier was engaged to transport Antiporda on another segment of his trip, it merely acted as a ticket-issuing agent in behalf of said carrier. In the very nature of their contract, Lufthansa is clearly the principal in the contract of carriage with Antiporda and remains to be so, regardless of those instances when actual carriage was to be performed by various carriers. "Bumping-off," which is the refusal to transport passengers with confirmed reservation to their planned and contracted destinations, totally forecloses said passengers' right to be transported, whereas,
JARWIK

Delay merely postpones for a time being the enforcement of such right. Petition Denied.

24