Belgian Overseas Chartering and Shipping N.V. v.

Philippine First Insurance

G.R. 143133, June 5, 2002.

Facts:

On June 13, 1990, CMC Trading A.G. shipped on board the MV Anangel Sky at Hamburg, Germany, 242
coils of various Prime Cold Rolled Steel sheets consigned to the Philippine Steel Trading Corporation (PSTC).
On July 28, 1990, the MV Anangel Sky arrived the port of Manila, and within the subsequent days, the cargo
was discharged. Four (4) of the coils were in bad order and unfit for the intended purpose thus, PSTC declared
the same a total loss and sent a formal demand letter to Philippine First Insurance (PFI) which the latter
refused to receive. Consequently, Belgian Overseas paid the consignee the amount of P506,086.50 and was
subrogated to the latter’s rights against PFI.

PFI imputed that the damage and/or loss was due to pre-shipment damage, to the inherent nature,
vice or defect of the goods, or to perils, danger and accidents of the sea, or to insufficiency of packaging, or to
the act or omission of the shipper of goods or their representatives. In addition, they argued that their liability,
if any, should not exceed the liability provided for in the bill of lading and other pertinent laws. Finally, they
averred that they exercised due diligence and foresight required by law to prevent any damage/loss to said
shipment. The RTC dismissed the complaint but the CA reversed, hence the petition.

Issue:

W/N petitioner had overcome the presumption of negligence of a common carrier?

HELD:

No. Petitioner’s contention presumption that the presumption of fault imposed on common carriers
should not be applied on the basis of the lone testimony of the offered by the private respondent is untenable.
Well-settled is the rule that common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence and vigilance with respect to the safety of the goods and
the passengers they transport. The extraordinary responsibility lasts from the time the goods
are unconditionally placed in the possession of and received for transportation by the carrier until they are
delivered, actually or constructively, to the consignee or to the person who has a right to receive them.

This strict requirement is justified by the fact that, without a hand or a voice in the preparation of such
contract, the riding public enters into a contract of transportation with common carriers. Even if it wants to, it
cannot submit its own stipulations for their approval. Hence, it merely adheres to the agreement prepared by
them. The mere proof of delivery of the goods in good order to a common carrier and of their arrival in bad
order at their destination constitutes a prima facie case of fault or negligence against the carrier. If no
adequate explanation is given as to how the deterioration, the loss or the destruction of the goods happened,
the transporter shall be held responsible.
 Nocum v. Laguna Tayabas Bus Company
G.R. No. L-23733, October 31, 1969

Facts:

Laguna Tayabas Bus Company (Laguna) appealed the decision of the lower court where it was held
liable to pay Herminio Nocum P1,351 in damages for injuries the latter sustained while riding as a passenger in
Bus No. 120, which was making a trip within barrio Dita, Municipality of Bay, Laguna. The injury was caused by
the explosion of firecrackers contained in another passenger’s box which was declared as containing clothes
and miscellaneous items.

The bus conductor, Sancho Mendoza, the passenger told him that the box contained clothes and other
misc. items. He helped load the box and charged him twenty-five centavos for it. He did not open the box
because he relied on the word of the owner. Nicolas Cornista, another employee of the company stated that
they were not authorized to open the baggage of passengers because of instruction from management that
they were to call the police if they thought some packages contained prohibited articles.

The trial judge that it was stated in the bus company’s manual that employees were prohibited to
allow explosives such as dynamite and firecrackers to be transported on its buses. It was therefore incumbent
upon the employees of the bus company to make the proper inspection of all the baggages which are carried
by the passengers. Neither was there any fortuitous event that could have caused the breach of contract, if
the employees had properly inspected the box the accident could have been avoided. The passenger’s refusal
to open the box was no excuse, because as stated by Cornista, the employees could call the police if there
were packages containing prohibited articles.

Issue:

W/N Laguna Tayabas Bus Co. was liable?

HELD:

No. The Supreme Court held that the Art. 1733 states that extraordinary diligence is required for the
safety of the passengers transported by them “according to all circumstances of each case.” Article 1755
repeats the same qualification by stating that “A common carrier is bound to carry the passenger safely as far
human care and foresight can provide, using the utmost diligence of very cautious persons, with regard for all
the circumstances.”

It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs
of his co-passengers, not to speak of his own. Not to be considered lightly is the right to privacy which each
passenger is entitled. He cannot be subjected to any unusual search, when he protests the innocuousness of
his baggage and nothing appears to indicate the contrary, as in the case at bar. In other words, inquiry may be
verbally made as to the nature of a passenger’s baggage when such is not outwardly perceptible, but beyond
this, constitutional boundaries are already in danger of being transgressed. Calling a policeman to his aid in
compelling the passenger to submit to more rigid inspection after the passenger had already declared that the
box contained mere clothes and other miscellaneous, could not have justified invasion of a constitutionally
protected domain. Police officers acting without judicial authority secured in the manner provided by law are
not beyond the pale of constitutional inhibitions designed to protect individual human rights and liberties

When there are sufficient indications that the representations of the passenger regarding the nature of
his baggage may not be true, in the interest of the common safety of all, the assistance of the police
authorities may be solicited, not necessarily to force the passenger to open his baggage, but to conduct the
needed investigation consistent with the rules of propriety and, above all, the constitutional rights of the
passenger. It is in this sense that the mentioned service manual issued by appellant to its conductors must be
understood.
 Maranan v. Perez
G.R. No. L-22272, June 26, 1967

Facts:

Rogelio Corachea, on October 18, 1960, was a passenger in taxicab owned and operated by Pascual
Perez when he was stabbed and killed by the driver , Simeon Valenzuela. Valenzuela was prosecuted and
convicted for homicide and an appeal was taken to the Court of Appeals.

On December 6 1961, while appeal was pending in the Court of Appeals, Antonia Maranan, Rogelio's
mother, filed an action in the Court of First Instance of Batangas to recover damages from Perez and
Valenzuela for the death of her son. Defendants asserted that the deceased was killed in self-defense, since he
first assaulted the driver by stabbing him from behind. Defendant Perez further claimed that the death was
a caso fortuito for which the carrier was not liable.

The court a quo, after trial, found for the plaintiff and awarded her P3,000 as damages against
defendant Perez. The claim against defendant Valenzuela was dismissed. From this ruling, both plaintiff and
defendant Perez appealed to this Court, the former asking for more damages and the latter insisting on non-
liability. Subsequently, the Court of Appeals affirmed the judgment of conviction earlier mentioned, during the
pendency of the herein appeal, and on May 19, 1964, final judgment was entered therein.

Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila Railroad Co., 97 Phil. 884,
that the carrier is under no absolute liability for assaults of its employees upon the passengers. The attendant
facts and controlling law of that case and the one at bar are very different however. In the Gillaco case, the
passenger was killed outside the scope and the course of duty of the guilty employee. The employee in said
case was a guard named Devesa assigned to guard the Manila-San Fernando trains and was at Paco station
who was also awaiting a train for transportation when he shot and killed a passenger of the Calamba-Manila
train; the killing of the passenger was not done in the line of the guard’s duty. Devesa, was at the time of the
occurrence, as if in the position of a stranger also awaiting transport and not an employee assigned to
discharge any duties that the railroad had assumed by its contract with the deceased.

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, unlike
the Gillaco case, 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.

Issue:

W/N petitioner Perez was liable for the acts of his employee?

HELD:

Yes. The Supreme Court was of the opinion that under the Art. 1759 Civil Code, it is enough that the
assault happens within the course of the employee's duty. It is no defense for the carrier that the act was
done in excess of authority or in disobedience of the carrier's orders. The carrier's liability here is absolute in
the sense that it practically secures the passengers from assaults committed by its own employees.
Accordingly, it is the carrier's strict obligation to select its drivers and similar 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.
 China Airlines v. Chiok
G.R. No. 152122. July 30, 2003

Facts:

On September 18, 1981, Daniel Chiok (Chiok) purchased from China Airlines, Ltd. (CAL) airline
passenger ticket number 297:4402:004:278:5 for air transportation covering Manila-Taipei-Hongkong-
Manila. Said ticket was exclusively endorseable to Philippine Airlines, Ltd. (PAL). Chiok then went to CAL
office to confirm his Hong Kong-Manila flight. CAL attached a yellow sticker, indicating that flight was
OK.

When Chiok 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, Chiok proceeded to Hongkong International Airport for his return trip to Manila. However,
upon reaching the PAL counter, Chiok saw a poster stating that PAL Flight No. PR 311 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. He then informed PAL personnel that,
being the founding director of the Philippine Polysterene Paper Corporation, he had to reach Manila on
November 25, 1981 because of a business option which he had to execute on said date

On November 25, 1981, Chiok went to the airport. Cathay Pacific stewardess Lok Chan (Lok) had taken
and received Chioks plane ticket and his luggage. However, Lok called the attention of Carmen Chan, PAL’s
terminal supervisor, and informed her that Chioks name was not in the computer list of
passengers. Subsequently, Carmen informed Chiok that his name did not appear in PALs computer list of
passengers and therefore could not be permitted to board PAL Flight No. PR 307. Thus, Chiok filed for
damages and the RTC held CAL and PAL joint and severally liable.

Issue:

W/N China Airlines was liable to Chiok as the principal carrier?

HELD:

Yes. The Supreme Court held that “that 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).”

Article 1, Section 3 of the Warsaw Convention states that

“Transportation to be performed by several successive air carriers shall be deemed, for the purposes of this Convention, to be
one undivided transportation, if it has been regarded by the parties as a single operation, whether it has been agreed upon
under the form of a single contract or of a series of contracts, and it shall not lose its international character merely because
one contract or a series of contracts is to be performed entirely within a territory subject to the sovereignty, suzerainty,
mandate, or authority of the same High Contracting Party.”
Article 15 of IATA-Recommended Practice similarly provides:

“Carriage to be performed by several successive carriers under one ticket, or under a ticket and any conjunction ticket issued
therewith, is regarded as a single operation.”

Likewise, as the principal in the contract of carriage, the petitioner in British Airways v. Court of
Appeal, was held liable, even when the breach of contract had occurred, not on its own flight, but on that of
another airline. The Decision followed our ruling in Lufthansa German Airlines v. Court of Appeals, in which we
had held that the obligation of the ticket-issuing airline remained and did not cease, regardless of the fact that
another airline had undertaken to carry the passengers to one of their destinations. 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.