ASIAN TERMINALS, INC. vs. PHILAM INSURANCE CO.

, INC

G.R. Nos. 181163, 181262, and 181319, July 24, 2013 (VILLARAMA, JR., J)

FACTS:

On April 15, 1995, Nichimen Corporation shipped to Universal Motors Corporation 219 packages
containing 120 units of brand new Nissan Pickup Truck Double Cab 42 model, without engine, tires and
batteries, on board the vessel S/S Calayan Iris from Japan to Manila. The shipment, which had a declared
value of US$81,368 or P29,400,000, was insured with Philam against all risks under the marine Policy no.
708-8006717-4.

The carrying vessel arrived at the port of manila on April 20, 1995, and when the shipment was unloaded
by the staff of ATI, it was found that the package marked as 03-245-42K/1 was in bad order. The Turn Over
Survey of bad order cargoes dated April 21, 1995 identified two packages, labelled 03-245-42K/1 and
03/237/7CK/2, as being dented and broken. Thereafter, the cargoes were stored for temporary
safekeeping inside CFS Warehouse in Pier No. 5.

On May 11, 1995, the shipment was withdrawn by R.F. Revilla Customs Brokerage, Inc., the authorized
broker of Universal Motors, and delivered to the latters warehouse in Mandaluyong City. Upon the
request of Universal Motors, a bad order survey was conducted on the cargoes and it was found that one
Frame Axle Sub without LWR was deeply dented on the buffle plate while six Frame Assembly with Bush
were deformed and misaligned. Owing to the extent of the damage to said cargoes, Universal Motors
declared them a total loss.

On August 4, 1995, Universal Motors filed a formal claim for damages in the amount of P643,963.84
against Westwind, ATI and R.F. Revilla Customs Brokerage, Inc. When Universal Motors demands
remained unheeded, it sought reparation from and was compensated in the sum of P633,957.15 by
Philam. Accordingly, Universal Motors issued a Subrogation Receipt dated November 15, 1995 in favor of
Philam.

On January 18, 1996, Philam, as subrogee of Universal Motors, filed a Complaint for damages against
Westwind, ATI and R.F. Revilla Customs Brokerage, Inc. before the Regional Trial Court of Makati City. The
trial court rendered judgment in favour of Philam which ruling was affirmed by the Court of Appeals
modifying the amount to be paid by Westwind and ATI.
ISSUE:

Whether or not Philam may claim against Westwind and ATI as a subrogee

HELD:

YES. The Court holds that petitioner Philam has adequately established the basis of its claim against
petitioners ATI and Westwind. Philam, as insurer, was subrogated to the rights of the consignee, Universal
Motors Corporation, pursuant to the Subrogation receipt executed by the latter in favour of the former.
The right of subrogation accrues simply upon payment by the insurance company of the insurance claim.

Petitioner Philams action finds support in Article 2207 of the Civil Code which provides that if the
plaintiffs property has been insured, and he has received indemnity from the insurance company for the
injury or loss arising out of the wrong or breach of contract complained of, the insurance company shall
be subrogated to the rights of the insured against the wrongdoer or the person who has violated the
contract.

In Malayan Insurance Co., Inc. vs. Alberto, the Court explained the effect of payment by the insurer of the
insurance claim in this wise:

We have held that payment by the insurer to the insured operates as an equitable assignment to the
insurer of all the remedies that the insured may have against the third party whose negligence or wrongful
act caused the loss. The right of subrogation is not dependent upon, nor does it grow out of, any privity
of contract. It accrues simply upon payment by the insurance company of the insurance claim. The
doctrine of subrogation has its roots in equity. It is designed to promote and accomplish justice; and is the
mode that equity adopts to compel the ultimate payment of a debt by one who, in justice, equity, and
good conscience, ought to pay

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WESTWIND SHIPPING CORPORATION v.

UCPB GENERAL INSURANCE CO., INC. and ASIAN TERMINALS INC

ORIENT FREIGHT INTERNATIONAL INC. v.

UCPB GENERAL INSURANCE CO., INC. and ASIAN TERMINALS INC.

G.R. No. 200314, G.R. No. 200289, November 25, 2013 THIRD DIVISION PERALTA, J.
Common carriers, from the nature of their business and for reasons of public policy, are bound to observe
extraordinary diligence in vigilance over the goods and for the safety of the passengers transported by
them, according to all the circumstances of each case.

FACTS: Kinsho-Mataichi Corporation shipped from the port of Kobe, Japan, 197 metal
containers/skids of tin-free steel for delivery to the consignee, San Miguel Corporation The shipment was
loaded and received clean on board M/V Golden Harvest Voyage No. 66, a vessel owned and operated by
Westwind Shipping Corporation. SMC insured the cargoes against all risks with UCPB General Insurance
Co., Inc.

The shipment arrived in Manila and was discharged in the custody of the arrastre operator, Asian
Terminals, Inc. During the unloading operation six containers/skids sustained dents and punctures from
the forklift used by the stevedores of Ocean Terminal Services, Inc. in centering and shuttling the
containers/skids. Orient Freight International, Inc., the customs broker of SMC, withdrew from ATI the
197 containers/skids and delivered the same at SMCs warehouse. It was discovered upon discharge that
additional nine containers/skids were also damaged due to the forklift operations; thus, making the total
number of 15 containers/skids in bad order.

SMC filed complaints. The RTC opined that Westwind is not liable, since the discharging of the cargoes
were done by ATI personnel using forklifts. It likewise absolved OFII from any liability, reasoning that it
never undertook the operation of the forklifts which caused the dents and punctures, and that it merely
facilitated the release and delivery of the shipment as the customs broker and representative of SMC. On
appeal by UCPB, the CA reversed and set aside the trial court. It concluded that the common carrier, not
the arrastre operator, is responsible during the unloading of the cargoes and is still bound to exercise
extraordinary diligence at the time. The CA also considered that OFII is liable, agreeing with UCPBs
contention that OFII is a common carrier bound to observe extraordinary diligence and is presumed to be
at fault or have acted negligently for such damage.

ISSUE: Whether Westwind and OFII are liable to exercise extraordinary diligence

RULING: YES. 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. The
extraordinary responsibility of the common carrier 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 consignee, or to the person who has a right to receive
them.

In this case, since the discharging of the containers/skids, which were covered by only one bill of lading,
had not yet been completed at the time the damage occurred, there is no reason to imply that there was
already delivery, actual or constructive, of the cargoes to ATI.

The mere proof of delivery of goods in good order to the carrier, and their arrival in the place of
destination in bad order, make out a prima facie case against the carrier, so that if no explanation is given
as to how the injury occurred, the carrier must be held responsible. It is incumbent upon the carrier to
prove that the loss was due to accident or some other circumstances inconsistent with its liability.18

The contention of OFII is likewise untenable. A customs broker has been regarded as a common carrier
because transportation of goods is an integral part of its business. Article 1732 does not distinguish
between one whose principal business activity is the carrying of goods and one who does such carrying
only as an ancillary activity. The contention, therefore, of petitioner that it is not a common carrier but a
customs broker whose principal function is to prepare the correct customs declaration and proper
shipping documents as required by law is bereft of merit. It suffices that petitioner undertakes to deliver
the goods for pecuniary consideration. As the transportation of goods is an integral part of a customs
broker, the customs broker is also a common carrier. For to declare otherwise "would be to deprive those
with whom [it] contracts the protection which the law affords them notwithstanding the fact that the
obligation to carry goods for [its] customers, is part and parcel of petitioners business."21

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INSURANCE COMPANY OF NORTH AMERICA VS. ASIAN TERMINALS INC.

G.R. No. 180784 February 15, 2012

Doctrine: The term carriage of goods in the Carriage of Goods by Sea Act (COGSA) covers the period
from the time the goods are loaded to the vessel to the time they are discharged therefrom.

The carrier and the ship may put up the defense of prescription if the action for damages is not brought
within one year after the delivery of the goods or the date when the goods should have been delivered.
It has been held that not only the shipper, but also the consignee or legal holder of the bill may invoke the
prescriptive period. However, the COGSA does not mention that an arrastre operator may invoke the
prescriptive period of one year; hence, it does not cover the arrastre operator.

Facts:

The trial court dismissed petitioners complaint for actual damages on the ground of prescription under
the Carriage of Goods by Sea Act. Thus, an action was instituted to review the RTCs decision.

On November 2002, Macro-Lite Corporation shipped to San Miguel Corporation (SMC), through M/V DIMI
P vessel, 185 packages (or 231,000 sheets) of electrolytic tin free steel, complete and in good order
condition and covered by Bill of Lading. The shipment had a declared value of US $169,850.35 and was
insured with petitioner against all risks under its marine policy.

The carrying vessel arrived at the port of Manila and when the shipment was discharged therefrom, it was
noted than 7 packages were damaged and in bad order. The shipment was then turned over to the
custody of respondent (as arrastre operator) for storage and safekeeping pending its withdrawal by the
consignees authorized customs broker, which was later withdrawn by the customs broker from custody
of the respondent.
An examination report was written and showed that an additional 5 packages were found to be damaged
and in bad order.

Consignee, SMC, filed separate claims against respondent and petitioner for the damage of 11,200 sheets
of electrolytic tin free steel. Petitioner, as insurer of the cargo, paid the consignee the amount of Php
431,592.14 for the damage caused to the shipment. Thereafter, petitioner formally demanded reparation
against respondent and as respondent failed to satisfy its demand, petitioner filed an action for damages
with the RTC.

The trial court dismissed the complaint because it was already barred by the statute of limitations. It held
that COGSA, embodied in CA 65, applies to this case since the goods were shipped from a foreign port to
the Philippines. Under the said law, particularly paragraph 4, Section 3(6), the shipper has the right to
bring a suit within one year after the delivery of the goods or the date when the goods should have been
delivered.

Petitioners motion for recon was denied by the trial court. It submits that the trial courts dismissal of the
complaint on the ground of prescription under the COGSA is legally erroneous. It contends that the one-
year limitation period for bringing a suit in court under the COGSA is not applicable to this case. Petitioner
asserts that since the complaint was filed against respondent arrastre operator only, without impleading
the carrier, the prescriptive period under the COGSA is not applicable to this case.

Moreover, petitioner contends that the term carriage of goods in the COGSA covers the period from the
time the goods are loaded to the vessel to the time they are discharged therefrom. It points out that it
sued respondent only for the additional five (5) packages of the subject shipment that were found
damaged while in respondents custody, long after the shipment was discharged from the vessel.

Issues:

(1) WON the one-year prescriptive period for filing a suit under the COGSA applies to this action for
damages against respondent arrastre operator;

(2) WON petitioner is entitled to recover actual damages in the amount of P431,592.14 from respondent.

Ruling:

(1) NO. The COGSA was accepted to be made applicable to all contracts for the carriage of goods by
sea to and from the Philippine ports in foreign trade by virtue of CA 65. The term carriage of goods
covers the period from the time when the goods are loaded to the time when they are discharged from
the ship; thus, it can be inferred that the period of time when the goods have been discharged from the
ship and given to the custody of the arrastre operator is not covered by the COGSA.

The prescriptive period for filing an action for the loss or damage of the goods under the COGSA is found
in paragraph 6, Section 3. It states that in any event, the carrier and the ship shall be discharged from all
liability in respect of loss or damage unless suit is brought within one year after delivery of the goods or
the date when the goods should have been delivered. Provided, that if a notice of loss or damage, either
apparent or concealed, is not given as provided for in this section, that fact shall not affect or prejudice
the right of the shipper to bring suit within one year after the delivery of the goods or the date when the
goods should have been delivered.

However, the COGSA does not mention that an arrastre operator may invoke the prescriptive period of 1
year; hence, it does not cover the arrastre operator.

In fact, respondent arrastre operators responsibility and liability for losses and damages are set forth in
Section 7.01 of the Contract for Cargo Handling Services executed between the Philippine Ports Authority
and Marina Ports Services, Inc. (now Asian Terminals, Inc.), which explicitly provides that the consignee
has a period of thirty (30) days from the date of delivery of the package to the consignee within which to
request a certificate of loss from the arrastre operator. From the date of the request for a certificate of
loss, the arrastre operator has a period of fifteen (15) days within which to issue a certificate of non-
delivery/loss either actually or constructively. Moreover, from the date of issuance of a certificate of non-
delivery/loss, the consignee has fifteen (15) days within which to file a formal claim covering the loss,
injury, damage or non-delivery of such goods with all accompanying documentation against the arrastre
operator.

Here, the verification and ascertainment of liability by respondent ATI had been accomplished within
thirty (30) days from the date of delivery of the package to the consignee and within fifteen (15) days from
the date of issuance by the Contractor (respondent ATI) of the examination report on the request for bad
order survey. Although the formal claim was filed beyond the 15-day period from the issuance of the
examination report on the request for bad order survey, the purpose of the time limitations for the filing
of claims had already been fully satisfied by the request of the consignees broker for a bad order survey
and by the examination report of the arrastre operator on the result thereof, as the arrastre operator had
become aware of and had verified the facts giving rise to its liability. Hence, the arrastre operator suffered
no prejudice by the lack of strict compliance with the 15-day limitation to file the formal complaint.

(2) YES. Petitioner is entitled to actual damages in the amount of P164,428.76 for the four (4) skids
damaged while in the custody of respondent.

It should be noted that the petitioner, who filed this action for damages for the five (5) skids that were
damaged while in the custody of respondent, was not forthright in its claim, as it knew that the damages
it sought in the amount of P431,592.14, which was based on the Evaluation Report of its adjuster/surveyor
covered nine (9) skids. Based on the same Evaluation Report, only four of the nine skids were damaged in
the custody of respondent. Petitioner should have been straightforward about its exact claim, which is
borne out by the evidence on record, as petitioner can be granted only the amount of damages that is
due to it.

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G.R. No. 171337 July 11, 2012

BENJAMIN CUA (CUA UlAN TEK), Petitioner, vs. WALLEM PHILIPPINES SHIPPING, INC. and ADVANCE
SHIPPING CORPORATION, Respondents.

FACTS: Cua filed a civil case for damages aganst Wallem Inc and Advance Shipping Corp for the payment
of damage to 218 tons and for a shortage of 50 tons of shipment of brazilian soybean. He claimed that the
loss was due to the respondents' failure to observe extraordinary diligence in carrying the cargo. Advance
Shipping was a foreign corporation that was the owner and manager of MV Argo Trader that carried the
cargo while Wallem was its local agent.

Wallem filed a motion to dismiss raising the ground of presecription under Section 3(6) of the COGSA
which provides that "the carrier and the ship shall be discharged from all liability in respect of loss or
damage unless suit is brought within one year after delivery of the goods."

ISSUE: Whether or not prescription has set in

HELD: NO. The COGSA is the applicable law for all contracts for carriage of goods by sea to and from
Philippine ports in foreign trade; it is thus the law that the Court shall consider in the present case since
the cargo was transported from Brazil to the Philippines. Under Section 3(6) of the COGSA, the carrier is
discharged from liability for loss or damage to the cargo "unless the suit is brought within one year after
delivery of the goods or the date when the goods should have been delivered." Jurisprudence, however,
recognized the validity of an agreement between the carrier and the shipper/consignee extending the
one-year period to file a claim.

The vessel MV Argo Trader arrived in Manila on July 8, 1989; Cuas complaint for damages was filed before
the RTC of Manila on November 12, 1990. Although the complaint was clearly filed beyond the one-year
period, Cua additionally alleged in his complaint (under paragraph 11) that

"the defendants x x x agreed to extend the time for filing of the action up to November 12, 1990."

The allegation of an agreement extending the period to file an action in Cuas complaint is a material
averment that, under Section 11, Rule 8 of the Rules of Court, must be specifically denied by the
respondents; otherwise, the allegation is deemed admitted.

A review of the pleadings submitted by the respondents discloses that they failed to specifically deny
Cuas allegation of an agreement extending the period to file an action to November 12, 1990. Wallems
motion to dismiss simply referred to the fact that Cuas complaint was filed more than one year from the
arrival of the vessel, but it did not contain a denial of the extension. This presumed admission is further
bolstered by the express admission made by the respondents themselves in their Memorandum:

STATEMENT OF THE CASE

1. This case was filed by [the] plaintiff on 11 November 1990 within the extended period agreed upon by
the parties to file suit.

The above statement is a clear admission by the respondents that there was indeed an agreement to
extend the period to file the claim. Thus, Cua timely filed a claim for the damage to and shortage of the
cargo.
-----------------------xxx---------------------

MALAYAN INSURANCE vs PHILIPPINE FIRST INSURANCE

FACTS

Wyeth contracted a contract of carriage with Republic, a common carrier for the transport of its
goods and product.

Wyeth insured the goods with Philippine First , while Republic insured the same goods with
Malayan insurance

During transit, certain goods were lost due to hijacking of 10 armed men.

Philippine first paid the proceeds to Wyeth, subrogating the rights of wyeth to Philippine first
which filed a claim against Republic and Malayan as a 3rd party defendant.

Republic and Malayan refused the claim of Philippine first. Malayan contended that there was
double insurance and that the first insurer, Philippine First, should bear all the loss.

ISSUE

W/N Malayan is liable? - YES

W/N there is double insurance? - NO

W/N Malayan is solidarily liable with Republic? - NO

HELD

Malayan is liable because of the insurance contract it executed with Republic for the idemnity for
the loss. The cause of the loss not within the purview of an excepted peril, having been determined in the
lower courts is conclusive upon the SC making Malayan liable for the idemnity.

There is double insurance when:

1] The person insured is the same

2] 2 or more insurers insuring separately

3] There is identity of subject matter

4] There is identity of interest insured

5] There is identity of the risk or peril insured against

In the case at bar though the 2 insurance policy, one by Philippine first and one by Malayan were issued
over the same subject matter covering the same peril, it was issued to 2 different persons and to 2
different interest.

Philippine first insured wyeth over its own goods

 Malayan insured republic over the latters insurable interest over the safety of the goods which
could become the basis for liability in case of loss or damage.

Malayan is not solidarily liable with Republic because they have different sources from which their liability
arose. Republic arose due to a contract of carriage, while Malayan is that of contract. Solidarity exist only
by express stipulation of the parties or those provided by law, none of which is applicable in the present
case.

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LOADMASTER CUSTOMS SERVICES VS. GLODEL

G.R. No. 179446, Jan. 10, 2011, Mendoza, J.:p, 2nd Division

FACTS: R&B Insurance insured the shipment of 132 bundles of electric copper cathodes against All Risks
for Columbia, the owner of the cargoes. The cargoes were shipped on board the vessel "Richard Rey" from
Isabela, Leyte, to Pier 10, North Harbor, Manila. They arrived on the same date.Columbia engaged the
services of Glodel for the release and withdrawal of the cargoes from the pier and the subsequent delivery
to its warehouses/plants. Glodel, in turn, engaged the services of Loadmasters for the use of its delivery
trucks to transport the cargoes to Columbias warehouses/plants in Bulacan and Valenzuela City.One (1)
truck, loaded with 11 bundles or 232 pieces of copper cathodes, failed to deliver its cargo.Later on, the
said truck was recovered but without the copper cathodes. Because of this incident, Columbia filed with
R&B Insurance a claim for insurance indemnity in the amount ofP1,903,335.39. R&B Insurance paid
Columbia the amount ofP1,896,789.62 as insurance indemnity and thereafter, filed a complaint for
damages against both Loadmasters and Glodelbefore the Regional Trial Court. It sought reimbursement
of the amount it had paid to Columbia for the loss of the subject cargo. It claimed that it had been
subrogated "to the right of the consignee to recover from the party/parties who may be held legally liable
for the loss."The RTC rendered a decision holding Glodel liable for damages for the loss of the subject
cargo and dismissing Loadmasters counterclaim for damages and attorneys fees against R&B
Insurance.On appeal, the CA likewise held Glodel liable and also Loadmaster.

ISSUE: W/N Loadmaster is also liable for the loss.

HELD:Yes.To totally exculpate itself from responsibility for the lost goods, Loadmasters argues that it
cannot be considered an agent of Glodel because it never represented the latter in its dealings with the
consignee. At any rate, it further contends that Glodel has no recourse against it for its (Glodels) failure
to file a cross-claim. Glodel, in its Comment, counters that Loadmasters is liable to it under its cross-claim
because the latter was grossly negligent in the transportation of the subject cargo. Finally, Glodel argues
that its relationship with Loadmasters is that of Charter wherein the transporter (Loadmasters) is only
hired for the specific job of delivering the merchandise. Thus, the diligence required in this case is merely
ordinary diligence or that of a good father of the family, not the extraordinary diligence required of
common carriers.At the outset, it is well to resolve the issue of whether Loadmasters and Glodel are
common carriers to determine their liability for the loss of the subject cargo. Under Article 1732 of the
Civil Code, common carriers are persons, corporations, firms, or associations engaged in the business of
carrying or transporting passenger or goods, or both by land, water or air for compensation, offering their
services to the public.Based on the definition, Loadmasters is a common carrier because it is engaged in
the business of transporting goods by land, through its trucking service. It is a common carrier as
distinguished from a private carrier wherein the carriage is generally undertaken by special agreement
and it does not hold itself out to carry goods for the general public.The distinction is significant in the
sense that "the rights and obligations of the parties to a contract of private carriage are governed
principally by their stipulations, not by the law on common carriers."

In the same vein, Glodel is also considered a common carrier within the context of Article 1732. In its
Memorandum, it states that it "is a corporation duly organized and existing under the laws of the Republic
of the Philippines and is engaged in the business of customs brokering." It cannot be considered otherwise
because as held by this Court in Schmitz Transport & Brokerage Corporation v. Transport Venture, Inc.,14
a customs broker is also regarded as a common carrier, the transportation of goods being an integral part
of its business.Loadmasters and Glodel, being both common carriers, are mandated from the nature of
their business and for reasons of public policy, to observe the extraordinary diligence in the vigilance over
the goods transported by them according to all the circumstances of such case, as required by Article 1733
of the Civil Code.With respect to the time frame of this extraordinary responsibility, the Civil Code
provides that the exercise of extraordinary diligence 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 consignee, or to the person who has a right to receive
them.

Premises considered, the Court is of the view that both Loadmasters and Glodel are jointly and severally
liable to R & B Insurance for the loss of the subject cargo. Under Article 2194 of the New Civil Code, "the
responsibility of two or more persons who are liable for a quasi-delict is solidary."

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NEW WORLD INTERNATIONAL VS. NYK-FILJAPAN SHIPPING CORP.

G.R. No. 171468, Aug. 24, 2011, Abad, J.:p, 3rd Division

FACTS: Petitioner New World International Development (Phils.), Inc. (New World) bought from DMT
Corporation (DMT) through its agent, Advatech Industries, Inc. (Advatech) three emergency generator
sets worth US$721,500.00.DMT shipped the generator sets by truck from Wisconsin, United States, to LEP
Profit International, Inc. (LEP Profit) in Chicago, Illinois. From there, the shipment went by train to Oakland,
California, where it was loaded on S/S California Luna V59, owned and operated by NYK Fil-Japan Shipping
Corporation (NYK) for delivery to petitioner New World in Manila. NYK issued a bill of lading, declaring
that it received the goods in good condition.NYK unloaded the shipment in Hong Kong and transshipped
it to S/S ACX Ruby V/72 that it also owned and operated. On its journey to Manila, however, ACX Ruby
encountered typhoon Kadiang whose captain filed a sea protest on arrival at the Manila South Harbor
respecting the loss and damage that the goods on board his vessel suffered.

Marina Port Services, Inc. (Marina), the Manila South Harborarrastre or cargo-handling operator, received
the shipment and upon inspection of the three container vans separately carrying the generator sets, two
vans bore signs of external damage while the third van appeared unscathed. An examination of the three
generator sets in the presence of petitioner New Worlds representatives, Federal Builders (the project
contractor) and surveyors of petitioner New Worlds insurer, SeaboardEastern Insurance Company
(Seaboard), revealed that all three sets suffered extensive damage and could no longer be repaired. For
these reasons, New World demanded recompense for its loss from respondents NYK, DMT, Advatech, LEP
Profit, LEP International Philippines, Inc. (LEP), Marina, and Serbros. While LEP and NYK acknowledged
receipt of the demand, both denied liability for the loss. Since Seaboard covered the goods with a marine
insurance policy, petitioner New World sent it a formal claim. Seaboard required petitioner New World
to submit to it an itemized list of the damaged units, parts, and accessories, with corresponding values,
for the processing of the claim. But petitioner New World did not submit what was required of it, insisting
that the insurance policy did not include the submission of such a list in connection with an insurance
claim. Reacting to this, Seaboard refused to process the claim. Thus,petitioner New World filed an action
for specific performance and damages against all the respondents before the Regional Trial Court (RTC)
of Makati City. The RTC rendered a decision absolving the various respondents from liability with the
exception of NYK. The RTC found that the generator sets were damaged during transit while in the care
of NYKs vessel, ACX Ruby.The RTC ruled, however, that petitioner New World filed its claim against the
vessel owner NYK beyond the one year provided under the Carriage of Goods by Sea Act (COGSA).On
appeal, the Court of Appeals (CA) rendered judgment affirming the RTCs rulings except with respect to
Seaboards liability. The CA rendered an amended decision, reversing itself as regards the claim against
Seaboard.

Petitioner New World asserts that the roles of respondents DMT, Advatech, LEP, LEP Profit, Marina and
Serbros in handling and transporting its shipment from Wisconsin to Manila collectively resulted in the
damage to the same, rendering such respondentssolidarily liable with NYK, the vessel owner.

ISSUE: W/N the carrier, NYK, is liable for the damage.

HELD: Yes.Consequently, the Court will not disturb the finding of the RTC, affirmed by the CA, that the
generator sets were totally damaged during the typhoon which beset the vessels voyage from Hong Kong
to Manila and that it was her negligence in continuing with that journey despite the adverse condition
which caused petitioner New Worlds loss.That the loss was occasioned by a typhoon, an exempting cause
under Article 1734 of the Civil Code, does not automatically relieve the common carrier of liability. The
latter had the burden of proving that the typhoon was the proximate and only cause of loss and that it
exercised due diligence to prevent or minimize such loss before, during, and after the disastrous typhoon.
As found by the RTC and the CA, NYK failed to discharge this burden.

-----------------------xxx----------------------

LHUILLER VS. BRITISH AIRWAYS

G.R. No. 171092, Mar. 15, 2010, Del Castillo, J.:p, 2nd Division

FACTS: Petitioner Edna DiagoLhuillier filed a Complaint for damages against respondent British Airways
before the Regional Trial Court (RTC) of Makati City. She alleged that she took respondents flight 548
from London, United Kingdom to Rome, Italy. Once on board, she allegedly requested Julian Halliday
(Halliday), one of the respondents flight attendants, to assist her in placing her hand-carried luggage in
the overhead bin. However, Halliday allegedly refused 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!"Petitioner
further alleged that when the plane was about to land in Rome, Italy, another flight attendant, Nickolas
Kerrigan (Kerrigan), singled her out from among all the passengers in the business class section to lecture
on plane safety. Allegedly, 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. Affronted, petitioner
assured Kerrigan that she knew the planes safety regulations being a frequent traveler. Thereupon,
Kerrigan allegedly thrust his face a mere few centimeters away from that of the petitioner and menacingly
told her that "We dont like your attitude."Upon arrival in Rome, petitioner complained to respondents
ground manager and demanded an apology. However, the latter declared that the flight stewards were
"only doing their job."

Respondent, by way of special appearance through counsel, filed a Motion to Dismiss on grounds of lack
of jurisdiction over the case and over the person of the respondent. Respondent alleged that only the
courts of London, United Kingdom or Rome, Italy, have jurisdiction over the complaint for damages
pursuant to the Warsaw Convention, Article 28(1). The RTC of Makati City, Branch 132, issued an Order
granting respondents Motion to Dismiss.Petitioner now comes directly before us on a Petition for Review
on Certiorari on pure questions of law, arguing that her cause of action arose not from the contract of
carriage, but from the tortious conduct committed by airline personnel of respondent in violation of the
provisions of the Civil Code on Human Relations. Since her cause of action was not predicated on the
contract of carriage, petitioner asserts that she has the option to pursue this case in this jurisdiction
pursuant to Philippine laws.In contrast, respondent maintains that petitioners claim for damages fell
within the ambit of Article 28(1) of the Warsaw Convention. As such, the same can only be filed before
the courts of London, United Kingdom or Rome, Italy.

ISSUE: W/N the RTC has jurisdiction of the case.

HELD: No.The Warsaw Convention has the force and effect of law in this country.The Warsaw Convention
applies because the air travel, where the alleged tortious conduct occurred, was between the United
Kingdom and Italy, which are both signatories to the Warsaw Convention. Under Article 28(1) of the
Warsaw Convention, the plaintiff may bring the action for damages before

1. the court where the carrier is domiciled;

2. the court where the carrier has its principal place of business;

3. the court where the carrier has an establishment by which the contract has been made; or

4. the court of the place of destination.

In this case, it is not disputed that respondent is a British corporation domiciled in London, United
Kingdom with London as its principal place of business. Hence, under the first and second jurisdictional
rules, the petitioner may bring her case before the courts of London in the United Kingdom. In the
passenger ticket and baggage check presented by both the petitioner and respondent, it appears that the
ticket was issued in Rome, Italy. Consequently, under the third 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, Italy. We thus find that the RTC of Makati correctly ruled that it does not have jurisdiction
over the case filed by the petitioner.

A number of reasons tends to support the characterization of Article 28(1) as a jurisdiction and not a venue
provision. First, the wording of Article 32, which indicates the places where the action for damages "must"
be brought, underscores the mandatory nature of Article 28(1). Second, this characterization is consistent
with one of the objectives of the Convention, which is to "regulate in a uniform manner the conditions of
international transportation by air." Third, the Convention does not contain any provision prescribing
rules of jurisdiction other than Article 28(1), which means that the phrase "rules as to jurisdiction" used
in Article 32 must refer only to Article 28(1). In fact, the last sentence of Article 32 specifically deals with
the exclusive enumeration in Article 28(1) as "jurisdictions," which, as such, cannot be left to the will of
the parties regardless of the time when the damage occurred. Furthermore, respondent, in seeking
remedies from the trial court through special appearance of counsel, is not deemed to have voluntarily
submitted itself to the jurisdiction of the trial court.