Topic Case Doctrine

Extraordinary Eastern Shipping Lines, The heavy seas and rains referred to in the master’s report were not caso fortuito but normal occurrences that
Diligence Inc. v. Court of Appeals an ocean-going vessel, particularly in the month of September which, in our area, is a month of rains and
heavy seas would encounter as a matter of routine. They are not unforeseen nor unforeseeable. These are
conditions that ocean-going vessels would encounter and provide for, in the ordinary course of a voyage. That
rain water (not sea water) found its way into the holds of the Jupri Venture is a clear indication that care and
foresight did not attend the closing of the ship's hatches so that rain water would not find its way into the cargo
holds of the ship.

Since the carrier has failed to establish any caso fortuito, the presumption by law of fault or negligence on the
part of the carrier applies; and the carrier must present evidence that it has observed the extraordinary
diligence required by Article 1733 of the Civil Code in order to escape liability for damage or destruction to the
goods that it had admittedly carried in this case. No such evidence exists of record. Thus, the carrier cannot
escape liability.

Extraordinary DELSAN TRANSPORT The payment made by the private respondent for the insured’s value of the lost cargo operates as waiver of its
Diligence LINES, INC., vs CA (private respondent) right to enforce the term of the implied warranty against Caltex under the marine
insurance policy. However, the same cannot be validly interpreted as an automatic admission of the vessel’s
seaworthiness by the private respondent as to foreclose recourse against the petitioner for any liability under
its contractual obligation as a common carrier. The fact of payment grants the private respondent subrogatory
right which enables it to exercise legal remedies that would otherwise be available to Caltex as owner of the
lost cargo against the petitioner common carrier.

Extraordinary Philippine Charter The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier
Diligence Insurance Corp. v. to know and to follow the required precaution for avoiding damage to, or destruction of the goods entrusted to
Unknown Owner it for sale, carriage and delivery. It requires common carriers to render service with the greatest skill and
foresight and “to use all reasonable means to ascertain the nature and characteristic of goods tendered for
shipment, and to exercise due care in the handling and stowage, including such methods as their nature
requires.”

The common carrier’s duty to observe the requisite diligence in the shipment of goods lasts from the time the
articles are surrendered to or unconditionally placed in the possession of, and received by, the carrier for
transportation until delivered to, or until the lapse of a reasonable time for their acceptance, by the person
entitled to receive them.] >When the goods shipped are either lost or arrive in damaged condition, a
presumption arises against the carrier of its failure to observe that diligence, and there need not be an express
finding of negligence to hold it liable. To overcome the presumption of negligence in the case of loss,
destruction or deterioration of the goods, the common carrier must prove that it exercised extraordinary
diligence.

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

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

Extraordinary Lorenzo Shipping v. BJ Respondent could not have incurred delay in the delivery of cylinder liners as no demand, judicial or
Diligence Marthel extrajudicial, was made by respondent upon petitioner in contravention of the express provision of Article 1169
of the Civil Code which provides that those obliged to deliver or to do something incur in delay from the time
the obligee judicially or extrajudicially demands from them the fulfillment of their obligation. There was also no
evidence of the alleged cancellation of orders by petitioner and that the delivery of the cylinder liners on 20
April 1990 was reasonable under the circumstances.

In determining whether time is of the essence in a contract, the ultimate criterion is the actual or apparent
intention of the parties and before time may be so regarded by a court, there must be a sufficient
manifestation, either in the contract itself or the surrounding circumstances of that intention.

Extraordinary Sealoader Shipping v. The doctrine of last clear chance states that where both parties are negligent but the negligent act of one is
Diligence Grand Cement appreciably later than that of the other, or where it is impossible to determine whose fault or negligence caused
Manufacturing the loss, the one who had the last clear opportunity to avoid the loss but failed to do so, is chargeable with the
loss. Negligence is defined as the omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs, would do, or the doing of something
which a prudent and reasonable man would not do, or as Judge Cooley defines it, (T)he failure to observe for
the protection of the interests of another person, that degree of care, precaution, and vigilance which the
circumstances justly demand, whereby such other person suffers injury.

Grand Cement was not guilty of negligent acts, which contributed to the damage that was incurred on its wharf.
Sealoader had the responsibility to inform itself of the prevailing weather conditions in the areas where its
vessel was set to sail. Sealoader cannot merely rely on other vessels for weather updates and warnings on
approaching storms, as what apparently happened in this case. Common sense and reason dictates this.To do
so would be to gamble with the safety of its own vessel, putting the lives of its crew under the mercy of the sea,

Transportation of Goods
 as well as running the risk of causing damage to the property of third parties for which it would necessarily be
liable.

Presumption of Delsan Transport v. Common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by
Negligence American Home them. They are presumed to have been at fault or to have acted negligently if the goods are lost, destroyed or
deteriorated. To overcome the presumption of negligence in case of loss, destruction or deterioration of the
goods, the common carrier must prove that it exercised extraordinary diligence.

Presumption of Delsan Transport Lines v. From the nature of their business and for reasons of public policy, common carriers are bound to observe
Negligence CA extraordinary diligence in the vigilance over the goods and for the safety of passengers transported by them,
according to all the circumstance of each case.In the event of loss, destruction or deterioration of the insured
goods, common carriers shall be responsible unless the same is brought about, among others, by flood, storm,
earthquake, lightning or other natural disaster or calamity. In all other cases, if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they
prove that they observed extraordinary diligence. The said presumption was not overturned by petitioner in this
case. Hence, private respondent as insurer can exercise its right of subrogation against petitioner.

Presumption of Maersk Lines v. Court of While it is true that common carriers are not obligated by law to carry and to deliver merchandise, and persons
Negligence Appeals are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation
to deliver at a given date or time, delivery of shipment or cargo should at least be made within a reasonable
time.

While there was no special contract entered into by the parties indicating the date of arrival of the subject
shipment, petitioner nevertheless, was very well aware of the specific date when the goods were expected to
arrive as indicated in the bill of lading itself. In this regard, there arises no need to execute another contract for
the purpose as it would be a mere superfluity. In the case before us, we find that a delay in the delivery of the
goods spanning a period of two months and seven days falls was beyond the realm of reasonableness.

Presumption of FGU Insurance v. Court FGU was exonerated from liability to ANCO because of blatant negligence on the part of the employees of
Negligence of Appeals defendants-appellants when the patron (operator) of the tug boat immediately left the barge at the San Jose,
Antique wharf despite the looming bad weather. Negligence was likewise exhibited by the defendants
appellants’ representative who did not heed the request that the barge be moved to a more secure place.

Presumption of DSR-Senator v. Federal Fire is not one of those enumerated under Art. 1734 of the Civil Code which exempts a carrier from liability for
Negligence loss or destruction of the cargo. In Eastern Shipping Lines, Inc. vs. Intermediate Appellate Court, we ruled that
since the peril of fire is not comprehended within the exceptions in Article 1734, then the common carrier shall
be presumed to have been at fault or to have acted negligently, unless it proves that it has observed the
extraordinary diligence required by law. Even if fire were to be considered a natural disaster within the purview
of Article 1734, it is required under Article 1739[10] of the same Code that the natural disaster must have been

Transportation of Goods
 the proximate and only cause of the loss, and that the carrier has exercised due diligence to prevent or
minimize the loss before, during or after the occurrence of the disaster. Common carriers are obliged to
observe extraordinary diligence in the vigilance over the goods transported by them.

Accordingly, they are presumed to have been at fault or to have acted negligently if the goods are lost,
destroyed or deteriorated. There are very few instances when the presumption of negligence does not attach
and these instances are enumerated in Article 1734. In those cases where the presumption is applied, the
common carrier must prove that it exercised extraordinary diligence in order to overcome the presumption.

Presumption of Philamgen v. Court of The appellate court in exempting private respondent from liability applied Article 1739 of the Civil Code which
Negligence Appeals provides: “In order that the common carrier may be exempted from responsibility, the natural disaster must
have been the proximate and only cause of the loss. However, the common carrier must exercise due
diligence to prevent or minimize loss before, during and after the occurrence of flood, storm, or other natural
disaster in order that the common carrier may be exempted from liability for the loss, destruction, or
deterioration of the goods.”

Considering the disputed fact that there really was delay in completing the unloading of the goods from the
vessel, the Court believes that the real issue at bar centers on the application of Article 1740 of the Civil Code.
In short, the principal question, in determining which of the parties in the present case should bear the loss of
the goods, is whether the delay involved in the unloading of the goods is deemed negligently incurred in, so as
not to free private respondent from liability, notwithstanding the fact that the ultimate cause of the loss of the
goods was the sinking of the vessel brought about by typhoon "Saling."

Presumption of Belgian Overseas Well-settled is the rule that common carriers, from the nature of their business and for reasons of public policy,
Negligence Chartering v. Philippine are bound to observe extraordinary diligence and vigilance with respect to the safety of the goods and the
First Insurance Co passengers they transport. Thus, common carriers are required to render service with the greatest skill and
foresight and “to use all reasonable means to ascertain the nature and characteristics of the goods tendered
for shipment, and to exercise due care in the handling and stowage, including such methods as their nature
requires.” 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.

Owing to this high degree of diligence required of them, common carriers, as a general rule, are presumed to
have been at fault or negligent if the goods they transported deteriorated or got lost or destroyed. That is,
unless they prove that they exercised extraordinary diligence in transporting the goods. In order to avoid
responsibility for any loss or damage, therefore, they have the burden of proving that they observed such
diligence.

However, the presumption of fault or negligence will not arise if the loss is due to any of the following causes:
(1) flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) an act of the public enemy in
war, whether international or civil; (3) an act or omission of the shipper or owner of the goods; (4) the character

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 of the goods or defects in the packing or the container; or (5) an order or act of competent public authority.
This is a closed list. If the cause of destruction, loss or deterioration is other than the enumerated
circumstances, then the carrier is liable therefor.

Presumption of Cokaliong Shipping Lines The law provides that a common carrier is presumed to have been negligent if it fails to prove that it exercised
Negligence v. WCPB, Gen. Insurance extraordinary vigilance over the goods it transported (Art. 1735). Ensuring the seaworthiness of the vessel is
Co the first step in exercising the required vigilance. Petitioner did not present sufficient evidence showing what
measures or acts it had undertaken to ensure the seaworthiness of the vessel. It failed to show when the last
inspection and care of the auxiliary engine fuel oil service tank was made, what the normal practice was for its
maintenance, or some other evidence to establish that it had exercised extraordinary diligence. It merely stated
that constant inspection and care were not possible, and that the last time the vessel was dry-docked was in
November 1990. Necessarily, in accordance with Article 1735of the Civil Code, we hold petitioner responsible
for the loss of the goods covered by Bills of Lading Nos. 58 and 59.

Presumption of Sarkies Tours Phil., Inc. Under the Civil Code, common carriers, from the nature of their business and for reasons of public policy, are
Negligence v. CA 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 excepted causes under Article 1734 thereof.

Where the common carrier accepted its passenger's baggage for transportation and even had it placed in the
vehicle by its own employee, its failure to collect the freight charge is the common carrier's own lookout. It is
responsible for the consequent loss of the baggage. In the instant case, defendant appellant's employee even
helped Fatima Minerva Fortades and her brother load the luggages/baggages in the bus' baggage
compartment, without asking that they be weighed, declared, receipted or paid for. Neither was this required of
the other passengers.

Presumption of Valenzuela Hardwood In a contract of private carriage, the parties may validly stipulate that responsibility for the cargo rests solely on
Negligence and Industrial Supply v. the charterer, exempting the shipowner from liability for loss of or damage to the cargo caused even by the
CA negligence of the ship captain. Pursuant to Article 1306 17 of the Civil Code, such stipulation is valid because
it is freely entered into by the parties and the same is not contrary to law, morals, good customs, public order,
or public policy. Indeed, their contract of private carriage is not even a contract of adhesion. We stress that in a
contract of private carriage, the parties may freely stipulate their duties and obligations which perforce would
be binding on them. Unlike in a contract involving a common carrier, private carriage does not involve the
general public. Hence, the stringent provisions of the Civil Code on common carriers protecting the general
public cannot justifiably be applied to a ship transporting commercial goods as a private carrier. Consequently,
the public policy embodied therein is not contravened by stipulations in a charter party that lessen or remove
the protection given by law in contracts involving common carriers.

Presumption of Yobido v. CA The explosion of the new tire is not a fortuitous event. There are human factors involved in the situation. The
Negligence fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was

Transportation of Goods
 properly mounted on the vehicle. Neither may the fact that the tire bought and used is of a brand name noted
for quality, resulting in the conclusion that it could not explode within five day’s use. It is settled that an
accident caused either by defects in the automobile or through the negligence of its driver is not a caso fortuito.
Moreover, a common carrier may not be absolved from liability in case of force majeure. A common carrier
must still prove that it was not negligent in causing the death or injury resulting from the accident. Thus, having
failed to overthrow the presumption of negligence with clear and convincing evidence, petitioners are hereby
held liable for damages.

Defenses and Central Shipping v. From the nature of their business and for reasons of public policy, common carriers are bound to observe
Conditions Insurance Company extraordinary diligence over the goods they transport, according to all the circumstances of each case. In the
event of loss, destruction or deterioration of the insured goods, common carriers are responsible; that is,
unless they can prove that such loss, destruction or deterioration was brought about -- among others -- by
"flood, storm, earthquake, lightning or other natural disaster or calamity." In all other cases not specified under
Article 1734 of the Civil Code, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence.

Defenses and Everett Steamship v. In the bill of lading, the carrier made it clear that all claims for which it may be liable shall be adjusted and
Conditions Court of Appeals settled on the basis of the shipper's net invoice cost plus freight and insurance premiums, if paid, and in no
event shall the carrier be liable for any loss of possible profits or any consequential loss. Its liability would only
be up to One Hundred Thousand (Y100,000.00) Yen. However, the shipper, had the option to declare a higher
valuation if the value of its cargo was higher than the limited liability of the carrier. Considering that the shipper
did not declare a higher valuation, it had itself to blame for not complying with the stipulations.

The commercial Invoice does not in itself sufficiently and convincingly show that the common carrier has
knowledge of the value of the cargo as contended by the shipper.

Defenses and Cruz v. Sun Holidays The elements of a "fortuitous event" are: (a) the cause of the unforeseen and unexpected occurrence, or the
Conditions failure of the debtors to comply with their obligations, must have been independent of human will; (b) the event
that constituted the caso fortuito must have been impossible to foresee or, if foreseeable, impossible to avoid;
(c) the occurrence must have been such as to render it impossible for the debtors to fulfill their obligation in a
normal manner; and (d) the obligor must have been free from any participation in the aggravation of the
resulting injury to the creditor.

To fully free a common carrier from any liability, the fortuitous event must have been the proximate and only
cause of the loss. And it should have exercised due diligence to prevent or minimize the loss before, during
and after the occurrence of the fortuitous event.

Defenses and Southern Lines, Inc. v. Under the provisions of Article 361, the defendant-carrier in order to free itself from liability, was only obliged to
Conditions CA prove that the damages suffered by the goods were "by virtue of the nature or defect of the articles."

Transportation of Goods
 Article 361 of the Code of Commerce provides: .

ART. 361. — The merchandise shall be transported at the risk and venture of the shipper, if the contrary has
not been expressly stipulated.

As a consequence, all the losses and deteriorations which the goods may suffer during the transportation by
reason of fortuitous event, force majeure, or the inherent nature and defect of the goods, shall be for the
account and risk of the shipper.

Duration of Mitusi Lines v. Court of The suit is not for "loss or damage" to goods contemplated in §3(6), the question of prescription of action is
Responsibility Appeals governed not by the COGSA but by Art. 1144 of the Civil Code which provides for a prescriptive period of ten
years. As defined in the Civil Code and as applied to Section 3(6), paragraph 4 of the Carriage of Goods by
Sea Act, "loss" contemplates merely a situation where no delivery at all was made by the shipper of the goods
because the same had perished, gone out of commerce, or disappeared in such a way that their existence is
unknown or they cannot be recovered.

There would be some merit in appellant's insistence that the damages suffered by him as a result of the delay
in the shipment of his cargo are not covered by the prescriptive provision of the Carriage of Goods by Sea Act
above referred to, if such damages were due, not to the deterioration and decay of the goods while in transit,
but to other causes independent of the condition of the cargo upon arrival, like a drop in their market value.

Duration of Sulpicio v. First Lepanto The falling of the crate during the unloading is evidence of petitioner-carrier’s negligence in handling the cargo.
Responsibility As a common carrier, it is expected to observe extraordinary diligence in the handling of goods placed in its
possession for transport. The standard of extraordinary diligence imposed upon common carriers is
considerably more demanding than the standard of ordinary diligence, i.e., the diligence of a good
paterfamilias established in respect of the ordinary relations between members of society. A common carrier is
bound to transport its cargo and its passengers safely "as far as human care and foresight can provide, using
the utmost diligence of a very cautious person, with due regard to all circumstances.”

The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common carrier
to know and to follow the required precaution for avoiding the damage to, or destruction of, the goods
entrusted to it for safe carriage and delivery. It requires common carriers to render service with the greatest
skill and foresight and “to use all reasonable means to ascertain the nature and characteristic of goods
tendered for shipment, and to exercise due care in the handling and stowage, including such methods as their
nature requires.”

Duration of Coastwise Lighterage v. The law and jurisprudence on common carriers both hold that the mere proof of delivery of goods in good
Responsibility Court of Appeals order to a carrier and the subsequent arrival of the same goods at the place of destination in bad order makes
for a prima facie case against the carrier. It follows then that the presumption of negligence that attaches to

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 common carriers, once the goods it is sports are lost, destroyed or deteriorated, applies to the petitioner.

Duration of Philippine First Insurance For marine vessels, Article 619 of the Code of Commerce provides that the ship captain is liable for the cargo
Responsibility v. Wallem First Shipping from the time it is turned over to him at the dock or afloat alongside the vessel at the port of loading, until he
delivers it on the shore or on the discharging wharf at the port of unloading, unless agreed otherwise.

COGSA provides that under every contract of carriage of goods by sea, the carrier in relation to the loading,
handling, stowage, carriage, custody, care, and discharge of such goods, shall be subject to the
responsibilities and liabilities and entitled to the rights and immunities set forth in the Act. Section 3 (2) thereof
then states that among the carriers responsibilities are to properly and carefully load, handle, stow, carry,
keep, care for, and discharge the goods carried.

On the other hand, the functions of an arrastre operator involve the handling of cargo deposited on the wharf
or between the establishment of the consignee or shipper and the ship's tackle. Being the custodian of the
goods discharged from a vessel, an arrastre operator's duty is to take good care of the goods and to turn them
over to the party entitled to their possession.

Handling cargo is mainly the arrastre operator's principal work so its drivers/operators or employees should
observe the standards and measures necessary to prevent losses and damage to shipments under its
custody.

It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the
custody of the carrier. In the instant case, the damage or losses were incurred during the discharge of the
shipment while under the supervision of the carrier. Consequently, the carrier is liable for the damage or losses
caused to the shipment

Duration of Samar Mining v. The validity of stipulations in bills of lading exempting the carrier from liability for loss or damage to the goods
Responsibility Nordeutscher Lloyd when the same are not in its actual custody has been upheld. There is no doubt that Art. 1738 finds no
applicability to the instant case. The said article contemplates a situation where the goods had already reached
their place of destination and are stored in the warehouse of the carrier. The subject goods were still awaiting
transshipment to their port of destination, and were stored in the warehouse of a third party when last seen
and/or heard of.

Article 1736 is applicable to the instant suit. Under said article, the carrier may be relieved of the responsibility
for 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. In sales, actual delivery has been defined as the
ceding of corporeal possession by the seller, and the actual apprehension of corporeal possession by the
buyer or by some person authorized by him to receive the goods as his representative for the purpose of
custody or disposal. By the same token, 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 and a reasonable time is
given him to remove the goods. The court a quo found that there was actual delivery to the consignee through

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 its duly authorized agent, the carrier.

Duration of Ganzon v. CA Petitioner Ganzon failed to show that the loss of the scrap iron due to any cause enumerated in Art. 1734. The
Responsibility order of the acting Mayor did not constitute valid authority for petitioner to carry out. In any case, the
intervention of the municipal officials was not of a character that would render impossible the fulfillment by the
carrier of its obligation. The petitioner was not duly bound to obey the illegal order to dump into the sea the
scrap of iron. Moreover, there is 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 petitioner’s employees.

By the delivery made during Dec. 1, 1956, the scraps were unconditionally placed in the possession and
control of the common carrier, and upon their receipt by the carrier of transportation, the contract of carriage
was deemed perfected. Consequently, Ganzon’s extraordinary responsibility for the loss, destruction or
deterioration of the goods commenced. According to Art 1738, such extraordinary responsibility would cease
only upon the delivery by the carrier to the consignee or persons with right to receive them. The fact that part
of the shipment had not been loaded on board did not impair the contract of transportation as the goods
remained in the custody & control of the carrier.

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

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

Duration of Macam v. CA The extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes
Responsibility to the consignee or to the person who has a 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 buyer/importer. Petitioner also referred to GPC as such in his demand letter to respondent WALLEM
and in his complaint before the trial court. This premise draws us to conclude that the delivery of the cargoes to
GPC as buyer/importer which, conformably with Art. 1736 had, other than the consignee, the right to receive
them was proper.

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 The real issue is whether respondents are liable to petitioner for releasing the goods to GPC without the bills of
lading or bank guarantee. From the testimony of petitioner, we gather that he has been transacting with GPC
as buyer/importer for around two (2) or three (3) years already. When mangoes and watermelons are in
season, his shipment to GPC using the facilities of respondents is twice or thrice a week. The goods are
released to GPC. It has been the practice of petitioner to request the shipping lines to immediately release
perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his
"people." In transactions covered by a letter of credit, bank guarantee is normally required by the shipping lines
prior to releasing the goods. But for buyers using telegraphic transfers, petitioner dispenses with the bank
guarantee because the goods are already fully paid. In his several years of business relationship with GPC
and respondents, there was not a single instance when the bill of lading was first presented before the release
of the cargoes.

Stipulation PAL v. Court of Appeals The liability of the common carrier for the loss, destruction or deterioration of goods transported from a foreign
Limiting Carrier’s country to the Philippines is governed primarily by the New Civil Code. In all matters not regulated by said
Liability Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by
Special Laws.

Since the passenger's destination in this case was the Philippines, Philippine law governs the liability of the
carrier for the loss of the passenger's luggage.

In this case, the petitioner failed to overcome, not only the presumption, but more importantly, the private
respondent's evidence, proving that the carrier's negligence was the proximate cause of the loss of his
baggage.

Stipulation Cathay Pacific v. Court of Although the Warsaw Convention has the force and effect of law in this country, being a treaty commitment
Limiting Carrier’s Appeals assumed by the Philippine government, said convention does not operate as an exclusive enumeration of the
Liability instances for declaring a carrier liable for breach of contract of carriage or as an absolute limit of the extent of
that liability. The Warsaw Convention declares the carrier liable for damages in the enumerated cases and
under certain limitations. However, it must not be construed to preclude the operation of the Civil Code and
other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating
the rights of its passengers under the contract of carriage, especially if wilfull misconduct on the part of the
carrier's employees is found or established, which is clearly the case before Us. For, the Warsaw Convention
itself provides in Art. 25 that —

"(1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit
his liability, if the damage is caused by his wilfull misconduct or by such default on his part as, in accordance
with the law of the court to which the case is submitted, is considered to be equivalent to wilfull misconduct."

(2) Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused

Transportation of Goods
 under the same circumstances by any agent of the carrier acting within the scope of his employment."

Stipulation Trans-Asia Shipping v. No actual damages since no evidence of delay. Any further delay then in the private respondent's arrival at the
Limiting Carrier’s Court of Appeals port of destination was caused by his decision to disembark. Had he remained on the first vessel, he would
Liability have reached his destination at noon of 13 November 1991, thus been able to report to his office in the
afternoon. He, therefore, would have lost only the salary for half of a day. But actual or compensatory
damages must be proved, which the private respondent failed to do. There is no convincing evidence that he
did not receive his salary for 13 November 1991 nor that his absence was not excused.

Stipulation Sweet Lines v. Teves Considered in the light of circumstances prevailing in the inter-island shipping industry in the country today, the
Limiting Carrier’s SC held that Condition No. 14 printed at the back of the passage tickets should be held as void and
Liability unenforceable for the following reasons: First, under circumstances obligation in the inter-island shipping
industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back of the
passage tickets, on which Condition No. 14 is Printed in fine letters, and Second, Condition No. 14 subverts
the public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and
interests of innumerable passengers located in different places of the country who, under Condition No. 14, will
have to file suits against petitioner only in the City of Cebu. Considering the expense and trouble a passenger
residing outside of Cebu City would incur to prosecute a claim in the City of Cebu, he would most probably
decide not to file the action at all. The condition will thus defeat, instead of enhance, the ends of justice. Upon
the other hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to
litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the
instant case, will not cause inconvenience to, much less prejudice, petitioner.

Amount of Ysmael v. Barretto Limiting the common carrier’s liability for loss or damage from any cause or for any reason for less than 1/8 the
Liability actual value of the goods is unconscionable and therefore against public policy. A common carrier cannot
lawfully stipulate for exemption from liability, unless such exemption is just and reasonable and the contract is
freely and fairly made.

Amount of Shewaram v. PAL It can not be said that a contract has been entered into between a passenger and the common carrier,
Liability embodying the conditions as printed at the back of the ticket. The fact that those conditions are printed at the
back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that the
passenger was aware of those conditions such that he had "fairly and freely agreed" to those conditions. The
passenger is considered not having agreed to the stipulation on the ticket, as manifested by the fact that he did
not sign the ticket.

Amount of Ong Yiu v. CA While it may be true that the passenger had not signed the plane ticket, he is nevertheless bound by the
Liability provisions thereof. "Such provisions have been held to be a part of the contract of carriage, and valid and
binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation". It is what
is known as a contract of "adhesion", in regards which it has been said that contracts of adhesion wherein one

Transportation of Goods
 party imposes a ready made form of contract on the other, as the plane ticket in the case at bar, are contracts
not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres,
he gives his consent. A contract limiting liability upon an agreed valuation does not offend against the policy of
the law forbidding one from contracting against his own negligence.

Amount of Sea Land Services, Inc. Since the liability of a common carrier for loss of or damage to goods transported by it under a contract of
Liability v. IAC carriage so governed by the laws of the country of destination and the goods in question were shipped from
the United States to the Philippines, the liability of common carrier to the consignee is governed primarily by
the Civil Code. Applying the Civil Code provisions (Article 1749 and 1750) the stipulation in the bill of lading
limiting the liability of the common carrier for loss or damages to the shipment covered by said rule unless the
shipper declares the value of the shipment and pays additional charges is valid and binding on the consignee.

Amount of Citadel Lines, Inc. v. CA Basic is the rule that a stipulation limiting the liability of the carrier to the value of the goods appearing in the bill
Liability of lading, unless the shipper or owner declares a greater value, is binding. Furthermore, a contract fixing the
sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the goods is
valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.

In this case, the award based on the alleged market value of the goods is erroneous. It is provided in a clause
in the BOL that its liability is limited to US$2.00/kilo. The consignee also admits in the memorandum that the
value of the goods does not appear in the bill of lading. Hence, the stipulation on the carrier’s limited liability
applies.

Amount of British Airways v. CA The contract of transportation was exclusively between the passenger and common carrier BA. The latter
Liability merely endorsing the Manila to Hong Kong log of the former’s journey to PAL, as its subcontractor or agent.
Conditions of contracts were one of continuous air transportation. Well-settled rule that an agent is also
responsible for any negligence in the performance of its function and is liable for damages which the principal
may suffer by reason of its negligent act. When an action is based on breach of contract of carriage, the
passenger can only sue BA and not PAL, since the latter was not a party in the contract.

The contention of BA with respect to limited liability was overruled although it is recognized in the Philippines,
stating that BA had waived the defense of limited liability when it allowed Mahtani(the passenger) to testify as
to the actual damages he incurred due to the misplacement of his luggage, without any objection.

Amount of Loadstar Shipping Co., The doctrine of limited liability does not apply where there was negligence on the part of the vessel owner or
Liability Inc. v. CA agent.[17] LOADSTAR was at fault or negligent in not maintaining a seaworthy vessel and in having allowed its
vessel to sail despite knowledge of an approaching typhoon. In any event, it did not sink because of any storm
that may be deemed as force majeure, inasmuch as the wind condition in the area where it sank was
determined to be moderate. Since it was remiss in the performance of its duties, LOADSTAR cannot hide
behind the “limited liability” doctrine to escape responsibility for the loss of the vessel and its cargo.

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 Such stipulation is obviously null and void for being contrary to public policy. Three kinds of stipulations have
often been made in a bill of lading. The first is one exempting the carrier from any and all liability for loss or
damage occasioned by its own negligence. The second is one providing for an unqualified limitation of such
liability to an agreed valuation. And the third is one limiting the liability of the carrier to an agreed valuation
unless the shipper declares a higher value and pays a higher rate of freight. According to an almost uniform
weight of authority, the first and second kinds of stipulations are invalid as being contrary to public policy, but
the third is valid and enforceable. In the case at bar, the stipulation effectively reduces the common carrier’s
liability for the loss or destruction of the goods to a degree less than extraordinary, hence invalid.

Passenger’s Quisumbing, Sr. v. CA The highjacking-robbery was force majeure. The hijackers do not board an airplane through a blatant display
Baggages of firepower and violent fury. Firearms, hand-grenades, dynamite, and explosives are introduced into the
airplane surreptitiously and with the utmost cunning and stealth, although there is an occasional use of
innocent hostages who will be coldly murdered unless a plane is given to the hijackers' complete disposal.

PAL was not negligent so as to overcome the force majeure nature of the hi-jacking. Hijackers do not board an
airplane through a blatant display of firepower and violent fury. Firearms and grenades are brought to the
plane surreptitiously. PAL could not have been faulted for want of diligence, particularly for failing to take
positive measures to implement Civil Aeronautics Administration regulations prohibiting civilians from carrying
firearms on board the plane. The use of the most sophisticated electronic detection devices may have
minimized hijacking but still ineffective against truly determining hijackers.

Passenger’s PanAm v. Rapadas The Warsaw Convention governs the availment of the liability limitations where the baggage check is
Baggages combined with or incorporated in the passenger ticket. In the case at bar, the baggage check is combined with
the passenger ticket in one document of carriage. The passenger ticket complies with Article 3, which
provides:
(c) a notice to the effect that, if the passenger's journey involves an ultimate destination or stop in a country
other than the country of departure, the Warsaw Convention may be applicable and that the Convention
governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss of or
damage to baggage.

The provisions in the plane ticket are sufficient to govern the limitations of liabilities of the airline for loss of
luggage. The passenger, upon contracting with the airline and receiving the plane ticket, was expected to be
vigilant insofar as his luggage is concerned. If the passenger fails to adduce evidence to overcome the
stipulations, he cannot avoid the application of the liability limitations.

The facts show that the private respondent actually refused to register the attache case and chose to take it
with him despite having been ordered by the PANAM agent to check it in. In attempting to avoid registering the
luggage by going back to the line, private respondent manifested a disregard of airline rules on allowable
handcarried baggages. Prudence of a reasonably careful person also dictates that cash and jewelry should be

Transportation of Goods
 removed from checked-in-luggage and placed in one's pockets or in a handcarried Manila-paper or plastic
envelope.

The alleged lack of enough time for him to make a declaration of a higher value and to pay the corresponding
supplementary charges cannot justify his failure to comply with the requirement that will exclude the application
of limited liability.

Passenger’s British Airways v. CA The contract of transportation was exclusively between the passenger and common carrier BA. The latter
Baggages merely endorsing the Manila to Hong Kong log of the former’s journey to PAL, as its subcontractor or agent.
Conditions of contracts were one of continuous air transportation. Well-settled rule that an agent is also
responsible for any negligence in the performance of its function and is liable for damages which the principal
may suffer by reason of its negligent act. When an action is based on breach of contract of carriage, the
passenger can only sue BA and not PAL, since the latter was not a party in the contract.

The contention of BA with respect to limited liability was overruled although it is recognized in the Philippines,
stating that BA had waived the defense of limited liability when it allowed Mahtani(the passenger) to testify as
to the actual damages he incurred due to the misplacement of his luggage, without any objection.

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