De Guzman vs.
CA and Cendena 168 SCRA verified first where the typhoon was before
612
FACTS:
Respondent Cendena was engaged in buying
scrap materials in Pangasinan which was then
brought to Manila for resale using two 6-wheeler
trucks. On its return to Pangasinan, Cendena
would load his vehicles with cargo from various
merchants who wanted delivered to Pangasinan.
For that service he charged freight lower than
regular rates. De Guzman contracted with
Cendena for the hauling of 750 cartons of milk.
On the way to Pangasinan, one of the trucks was
hijacked by armed men who took with them the
truck and its cargo and kidnapped the driver and
his helper. Only 150 cartons of milk were
delivered. The Milk Co. sued to claim the value of
the lost merchandise based on an alleged
contract of carriage. Cendena denied that he was
a common carrier and contended that he could
not be liable for the loss it was due to force
majeure. The trial court ruled that he was a
common carrier. The CA reversed.
ISSUE:
Whether or not Cendena is a common carrier.
HELD:
Cendena is properly characterized as a common
carrier even though he merely backhauled goods
for other merchants, and even if it was done on a
periodic basis rather than on a regular basis, and
even if his principal occupation was not the
carriage of goods. Article 1732 makes no
distinction between one whose principal business
activity is the carrying of persons or goods or
both, and one who does such carrying only as an
ancillary activity.
Arada vs. CA 210 SCRA 624
FACTS:
Alejandro Arada owns and operates the South
Negros Endterprises which was engaged in small
scale shipping business as common carrier. It
entered into a contract with San Miguel
Corporation to safely transport cargoes from San
Carlos City, Negros Occidental to Mandaue City.
While on its way to Mandaue City, Arada's vessel
sank together with the cargoes after
encountering a typhoon.
ISSUE:
WON Arada is liable for the loss of the cargo of
San Miguel Corporation
HELD:
Arada is liable for the loss of the cargo. South
Negros Enterprises was exercising its function as
a common carrier when it entered into a contract
with San Miguel Corp to carry and transport the
latters cargoes. A common carrier both from the
nature of its business and for insistent reasons of
public policy is burdened by law with the duty of
exercising extraordinary diligence not only in
ensuring the safety of passengers, but in caring
for the goods transported by it.
In the case at bar, Southern Negros failed to
observe extraordinary diligence over the cargo in
question was negligent previous to the sinking of
the carrying vessel. The master crew knew that
there was a typhoon coming before his departure
but did not check where it was. He should have
departing. The master crew did not ascertain
where the typhoon was headed by the use of his
vessels barometer and radio. Neither did the
captain of the vessel monitor and record the
weather conditions as required under Art.612 of
the Code of Commerce. A common carrier is
obliged to observed extraordinary diligence and
the failure of the master crew to ascertain the
direction of the storm and the weather condition
of the path they would be traversing, constitute
lack of foresight and minimum vigilance over its
cargoes taking into account the surrounding
circumstances of the case.
Strong vs. Iloilo Negros Air Express Co. 40
O.G. 269
FACTS:
The plaintiff of this case was a passenger aboard
Iloilo-Negros Air Express plane en route from Iloilo
to Manila. While on its way, the plane's motors
suddenly went dead and notwithstanding with the
efforts of the pilot, it plunged into the sea and
sank. The passengers including the plaintiff were
rescued. He then filed a complaint for damages
but CFI dismissed his complaint.
ISSUE:
Whether or not Iloilo Negros Air Express is liable.
HELD:
The Iloilo Negros Air Express is not liable.
Airplaine companies are not required to exercise
all the care. Airline is not liable for an accident
which rarely happens due to defects in ignition
cables since cables are purchased from a
competent and reputable manufacturer in the
absence of a showing that it knew those defects
or that such kind of ignition cables is not
ordinarily use on the airplane operated by it.
Bataclan vs. Medina 102 Phil. 181
FACTS:
Shortly after midnight, Juan Bataclan rode a bus
owned by Mariano Medina from Cavite to Pasay.
While on its way, the driver of the bus was driving
fast and when he applied the brakes it cause the
bus to be overturned. The driver, the conductor,
and some passengers were able to free
themselves from the bus except Bataclan and 3
others. The passengers called the help of the
villagers and as it was dark, the villagers brought
torch with them. The driver and the conductor
failed to warn the would-be helpers of the fact
that gasoline has spilled from the overturned bus
so a huge fire ensued which engulfed the bus
thereby killing the 4 passengers trapped inside. It
was also found later in trial that the tires of the
bus were old.
ISSUE:
Whether or not the proximate cause of the death
of Bataclan et al was their burning by reason of
the torches which ignited the gasoline.
HELD:
No. The proximate cause was the overturning of
the bus which was caused by the negligence of
the driver because he was speeding and also he
was already advised by Medina to change the
tires yet he did not. Such negligence resulted to
the overturning of the bus. The torches carried by
the would-be helpers are not to be blamed. It is
just but natural for the villagers to respond to the
call for help from the passengers and since it is a
rural area which did not have flashlights, torches
are the natural source of lighting. Further, the
smell of gas could have been all over the place
yet the driver and the conductor failed to provide
warning about said fact to the villagers.
La Mallorca vs. CA 17 SCRA 739
FACTS:
Mariano Beltran and his family rode a bus owned
by La Mallorca. Upon arrival at their destination,
they alighted from the bus and Mariano led them
to a shaded spot 5 meters away from the bus. He
then went back to the bus to get his baggage but
unknowingly, his youngest daughter followed
him. While Mariano was still on the bus awaiting
for the conductor to give his baggage, the bus
started to run resulting to the death of his
daughter. The said bus ran over her.
ISSUE:
Whether or not the contractual obligation
between the parties ceases the moment the
passenger alighted form the vehicle.
HELD:
The contractual obligation between the parties
does cease the moment the passenger alighted
form the vehicle. It has been recognized as a rule
that the relation of carrier and passenger does
not cease at the moment the passenger alight
from the carrier's vehicle at a place selected by
the carrier at the point of destination, but
continues until the passenger has had a
reasonable time or a reasonable opportunity to
leave the carrier's premises. And, what is a
reasonable time or a reasonable delay within this
rule is to be determined from all the
circumstances. In this case, there was no utmost
diligence. Firstly, the driver, although stopping
the bus did not put off the engine. Secondly, he
started to run the bus even before the bus
conductor gave him the signal and while the
latter was unloading cargo. Here, the presence of
said passenger near the bus was not
unreasonable and the duration of responsibility
still exists.
Bachelor Express vs. CA 188 SCRA 216
FACTS:
A bus owned by Bachelor Express and driven by
Cresencio Rivera was the situs of a stampede
which resulted in the death of its two passengers.
It was stipulated that while the bus is on its way
to Butuan City, a passenger at rear portion
suddenly stabbed a PC soldier which caused
commotion and panic among the passengers and
that when the bus stopped, two passengers were
found lying down the road, Ornominio Beter was
already dead as a result of head injuries and
Narcisa Rautraut also suffering from severe
injuries which caused here death later. Thus,
heirs of the two passengers filed a complaint for
sum of money against Bachelor Express and its
driver.
ISSUE:
Whether or not Bachelor Express is liable to the
death of its two passengers.
HELD:
While the sudden stabbing by a passenger of
another passenger inside the bus may be
considered as force majeure as to absolved the
carrier from liability, the carrier must prove that it
was not at fault of negligent causing the injuries.
It was shown that the buss door is not
properly kept in that the mere push makes it
opens easily causing some of
the passengers fell during the commotion and
despite of the panic inside the bus caused by the
stabbing, the conductor failed to blow his whistle
to signal the driver to stop and the driver
continued driving unminding the commotion
going on. Clearly the carriers employees failed to
exercise the extra ordinary diligence in
preventing or minimizing the injuries during and
after the incident. The carrier failed to rebut the
presumption of being at fault or acted negligently.
Maranan vs Perez 20 SCRA 412, June 26,
1967
Facts:
Passenger Rogelio Corachea was stabbed and
killed by the driver of a taxicab owned by Pascual
Perez.
Issue:
Whether the carrier is liable for the assault of its
employees upon the passengers.
Held:
Common carriers are liable for the death of or
injuries to passengers through the negligence or
willful acts of the formers employees, although
such employees may have acted beyond the
scope of their authority or in violation of the
orders of the common carrier. It is the carriers
oblication to select its drivers and similar
employees with due regard not only to technical
competence but also to their total personality,
their, behaviour, and their moral fiber.
Bachelor Express, Inc. vs CA 188 SCRA 216,
July 31, 1990
Facts:
A bus owned by Bachelor Express, Inc. while on
transit was the situs of a stampede which
resulted in the death of two passengers.
Issue:
Whether Bachelor Express, Inc. is liable for the
death of its passengers.
Held:
Bachelor Express, Inc. is a common carrier. The
victims were passengers of its bus and while
being passengers of the bus, suffered injuries
which caused their death. Consequently,
petitioner is presumed to have acted negligently.
Since the petitioner have failed to overcome the
presumption of fault and negligence found in the
law governing common carriers, Bachelor
Express, Inc. is undeniably liable for the death of
the two passengers.

De Gillaco vs MRR 97 Phil 844, December
18, 1955
Facts:
Devesa has a long-standing personal grudge with
Gillaco. One morning, while waiting in a train
station one to report for duty, MRR guard Devesa,
upon seeing Gillaco inside the MRR train coach,
shot and killed the latter.
Issue:
Whether employer MRR is liable for the offense
committed by its off-duty guard.
Held:
When the crime took place, the position of
Devesa would be a passenger, a stranger also
wanting transportation and not of an employee
assigned to discharge duties. MRR had no means
to ascertain or anticipate that the two would
meet, nor could it reasonably foresee every
personal rancor that might exist between
passengers riding in its trains. The shooting was
therefore a caso fortuito and pursuant to
established doctrine, the resulting breach of
companys contract of safe carriage with
deceased was excused thereby.
Sulpicio Lines, Inc. vs CA 246 SCRA 299, July
14, 1995
Facts:
Several stevedores boarded the vessel owned by
the petitioner and opened its storeroom. The
stevedores were warned of the gas and heat
generated by the copra stored in the holds of the
ship. Not heeding the warning, three stevedores
entered the storeroom, fell unconscious and
eventually died of gas poisoning.
Issue:
Whether petitioner is liable as a common carrier.
Held:
The presence of the stevedores on board the
barge of the petitioner was called for by the
contract of carriage. Petitioner knew of the
presence and role of the stevedores in its barge
and thus consented to their presense. Hence,
petitioner was responsible for their safety while
on board the barge.
Air France vs Carrascoso 18 SCRA 155,
September 28, 1966
Facts:
Carrascoso was issued a first class round trip
ticket from Manila to Rome. From Manila to
Bangkok, Carrascoso travelled in first class, but at
Bangkok, the Manager of the airline forced him to
vacate the first class seat that he was occupying
because there was a white man, who, the
manage alleged, had a better right to the seat.
Issue:
Whether Carrascoso is entitled for awarding of
damages.
Held:
Such an action constitutes bad faith. The
manager imposed his arbitrary will, forcibly
ejecting Carrascoso from his first class seat,
making him suffer humiliation of having to go to
the tourist class compartment just to give way to
another passenger whose right thereto has not
been established. Carrascoso suffered
inconvenience, embarassment and humiliation,
thereby causing him mental anguish, serious
anxiety, and social humiliation, resulting in moral
damages. Carrascoso is, therefore, entitled to all
damages.
Munsayac vs. De Lara 23 SCRA 1086 June
26, 1968
Plaintiff was a passenger in a jeep owned and
operated by defendant. Defendant drove at
excessive speed and did not take due care even
though the road is under repair and that his
passengers requested him to go slowly.
The law does not contemplate a vicarious liability
on his part: the breach is his as party to the
contract, and so if he is to be held liable at all for
exemplary damages by reason of the wrongful
act of his agent, it must be shown that he had
previously authorized or knowingly ratified it
thereafter, in effect making him a co-participant.
It is not enough to say that an example should be
made, or corrective measures employed, for the
public good, especially in accident cases where
public carriers are involved. For the causative
negligence in such cases is personal to the
employees actually in charge of the vehicles, and
it is they who should be made to pay this kind of
damages by way of example or correction, unless
by the demonstrated tolerance or approval of the
owners they themselves can be held at fault and
their fault is of the character described in Article
2232 of the Civil Code. Otherwise there would be
practically no difference between their liability for
exemplary damages and their liability for
compensatory damages, which needs no proof of
their negligence since the suit is predicated on
breach of contract and due diligence on their part
does not constitute a defense.
Singson vs. Court of Appeals 282 SCRA 149
November 1997
Facts:
Carlos Singson and his cousin Crescentino
Tiongson bought from respondent Cathay Pacific
Airways two (2) open-dated, identically routed,
round trip plane tickets (Manila to LA and vice
versa). Each ticket consisted of six (6) flight
coupons, each would be detached at the start of
each leg of the trip.
Singson failed to obtain a booking in LA for their
flight to Manila; apparently, the coupon
corresponding to the 5th leg of the trip was
missing and instead the 3rd was still attached. It
was not until few days later that the defendant
finally was able to arrange for his return to
Manila.
Singson commenced an action for damages
based on breach of contract of carriage against
CATHAY before the Regional Trial Court.
CATHAY alleged that there was no contract of
carriage yet existing such that CATHAYs refusal
to immediately book him could not be construed
as breach of contract of carriage.
Issue:
Was there a breach of contract?
Held:
YES. The round trip ticket issued by the carrier to
the passenger was in itself a complete written
contract by and between the carrier and the
passenger. It had all the elements of a complete
written contract, to wit: (a) the consent of the
contracting parties manifested by the fact that
the passenger agreed to be transported by the
carrier to and from Los Angeles via San Francisco
and Hong Kong back to the Philippines, and the
carriers acceptance to bring him to his
destination and then back home; (b) cause or
consideration, which was the fare paid by the
passenger as stated in his ticket; and, (c) object,
which was the transportation of the passenger
from the place of departure to the place of
destination and back, which are also stated in his
ticket. In fact, the contract of carriage in the
instant case was already partially executed as the
carrier complied with its obligation to transport
the passenger to his destination, i.e., Los
Angeles.
Philippine Airlines, Inv. Vs. Court of Appeals
275 SCRA 621 July 17, 1997
Facts:
Leovegildo A. Pantejo was booked on a PAL flight
from Manila to Cebu, and from Cebu he would
take a connecting flight to Surigao. But due to a
typhoon, the connecting flight was cancelled. He
asked PAL that he be billeted in a hotel at PALs
expense instead of the cash assistance of
P300.00 given by PAL to its stranded passengers.
PAL refused, and Pantejo was forced to seek and
accept the generosity of a co-passenger, and he
shared a room with him at the Sky View Hotel.
Pantejo subsequently learned that hotel
expenses of some of his co-passengers were
shouldered by PAL. When Pantejo threatened to
sue the airline for discriminating against him, PAL
offered to pay him P300.00. He later sued PAL for
damages.
Held:
Pantejo is entitled to moral damages. The
discriminatory act of petitioner against private
respondent ineludibly makes the former liable for
moral damages under Art. 21 in relation to Art.
2219 (10) of the Civil Code. Such inattention to
and lack of care by petitioner airline for the
interest of its passengers who are entitled to its
utmost consideration, particularly as to their
convenience, amount to bad faith which, entitles
the passenger to the award of moral damages.
China Airlines Limited vs. Court of Appeals
211 SCRA 897 July 29, 1992
Facts:
Private respondent Manuel Ocampo bought,
through Ultraman Travel Agency, a round trip
ticket for Manila-San Francisco-Manila from China
Airlines Limited (CAL). The ticket itself showed
that Ocampos return flight from San Francisco to
Manila was scheduled for May 24, 1979. Ocampo,
however, wanted to leave for Manila earlier than
May 24, because of important reasons. He sought
to make special arrangements through Ultraman
Travel Agency, with CAL Manila for a change in
schedule.
Held:
Although petitioner CAL had indeed confirmed a
seat for Ocampo on the 18 May 1979 flight from
San Francisco-Honolulu (and all the way to
Manila), it had breached its contract of carriage
by such failure or refusal to board Ocampo on
that flight. We are not, however, persuaded that
that breach of contractual obligation had been
attended by bad faith or malice or gross
negligence amounting to bad faith.
Under Art. 2232 of the Civil Code, in a
contractual or quasi-contractual relationship,
exemplary damages may be awarded only if the
defendant had acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner. We
are unable to so characterize the behavior here
shown by the employees of CAL Manila and/or
CAL San Francisco.
Trans World Airlines vs. Court of Appeals
165 SCRA 143 August 30, 1988
Facts:
Rogelio Vinluan had a first class ticket for Flight
No. 41 of petitioner from New York to San
Francisco. It was twice confirmed and yet
petitioner unceremoniously told him that there
was no first class seat available for him and that
he had to be downgraded to the economy class.
As he protested, he was arrogantly threatened by
one Mr. Braam. Worst still, while he was waiting
for the flight, he saw that several Caucasians who
arrived much later were accommodated in first
class seats when the other passengers did not
show up.
Held:
The discrimination is obvious and the humiliation
to which private respondent was subjected is
undeniable. Consequently, the award of moral
and exemplary damages by the Court of Appeals
is in order.
Zulueta vs. Pan American World Airways,
Inc. 49 SCRA 1 January 8, 1973
Zulueta spouse and daughter were aboard PANAM
from Honolulu to Manila. On its first lag, it landed
on Wake Island, the stopover was 30 mins. Mr Z
went to the CR at terminal but was full of soldiers,
he was forced to look a CR down the beach. Upon
boarding, Mr Z could not be found. The take-off
was delayed and he blamed the EEs. Z claims
that he was stopped at the gate and asked that Z
open his luggage but he refused. He was
disallowed to board and plane and was left in the
island. He stayed there for 2 nights.
In relation between carrier and passenger
involves special and peculiar obligations and
duties, differing in kind and degree, from those of
almost every other legal or contractual relation.
On account of the peculiar situation of the parties
the law implies a promise and imposes upon the
carrier the corresponding duty of protection and
courteous treatment. Therefore, the carrier is
under the absolute duty of protecting his
passengers from assault or injury by himself or
his servants.
Where a conductor uses language to a
passenger which is calculated to insult, humiliate,
or wound the feelings of a person of ordinary
feelings and sensibilities, the carrier is liable,
because the contract of carriage impliedly
stipulated for decent, courteous, and respectful
treatment, at hands of the carriers EEs. Among
the factors court take into account is assessing
moral damages are the professional, social,
political and financial standing of the offended
parties on one hand, and the business and
financial position of the offender on the other.
Moral damages of 1M excessive, only
500K. Contributory negligence that aggravated
the gravity of situation, mainly because of his
arrogant and overbearing attitude and behavior.
CHUA YEK HONG VS. IAC (Limited Liability
Rule) 166 SCRA 13
FACTS:
Petitioner Chua is a duly licensed copra
dealer based at Puerto Galera, Oriental Mindoro,
while private respondents are the owners of the
vessel M/V Luz \viminda I, a common carrier
engaged in coastwise trade from the different
ports of Oriental Mindoro to the Port of Manila. In
one of the shipments of copra to Manila from
Puerto Galera, the vessel capsized between Cape
Santiago and Batangas and sank with all its
cargo.
ISSUE:
Who are liable for indeminities in favo of third
persons?
HELD:
Pursuant to the provision on Art 587 of the
Code of Commerce, both the shipowner and
shipagent are civilly and directly liable. However,
this direct liability is moderated and limited by
the shipagent's or shipowner's right of
abandonment of the vessel and earned freight.
This expresses the universal principple of limited
liability under the maritime law. It's exceptions
are: 1. where the injury or death to a passenger is
due to the either fault of the shipowner, or to the
concurring negligence of the shipowner and the
captain; 2. where the vessel is insured; 3. in
workmen's compensation claims.
MANILA STEAMSHIP CO. VS. ABDULHAMAN
(Liability) 100 Phil. 32
FACTS:
M/L Consuelo V, owned by Lim Hong To,
collided with M/V Bowline Knot, owned by Manila
Steamship Co. This action is to recover damages
for the death of plaintiff's children and loss of
personal properties on board M/L Consuelo V. As
to the cause of the collision, it was found that
both were negligent. The Court held the owners
of both vessels solidarily liable under Art. 827 of
the Com. Code, but exempted the owner of M/L
consuelo from liability by reason of the sinking
and total loss of his vessel, and oreder Manila
Steamship to pay all of P20,784.
ISSUE:
Can the owner of M/L consuelo be exempt from
liability by reason of the sinking and total loss of
his vessel?
HELD: No. the right of abandonment of vessels,
as a legal limitation of shipowner's liability does
not apply to cases where the injury of the
average is due to shipowner's own fault. To hold
that the owner of M/L Consuelo may limit his
liability to the value of his vessel is to erase all
differences between owners who comply with the
law and those that deliberately disregard the law.
The owner havong caused the vessel to sail
without licensed officers, is liable for the injuries
caused by the collision over and beyond the
value of said launch.
RUBISO VS RIVERA (Significance of
Registration) 37 Phil. 72
FACTS:
Rivera acquired by purchase the pilot boat
Valentina on a date prior to that of the purchase
and adjudication at public auction by Rubiso. But
the sale at the public action to Rubiso was
recorded in the office of the Collector of Customs
on Jan 27, 1915 and in the commercial registry on
March 4, 1915, while the sale to Rivera was
entered in the customs registry only on March 17,
1915.
ISSUE:
Who has a better right over the vessel.
HELD:
Rubiso has a better right over the vessel.
The requisite of registration in the registry of the
purchase of a vessel is necessary and
indispensable in order that the purchaser's rights
may be maintained against a claim filed by a
third person. Such registration is required by both
Art 573 of the Com. Code in connection with Sec.
2 of Act 1900. Moreover, the rules on double sale
of immovable property should be applied
inasmuch as vessels, though movable by nature,
are treated as immovable property for purposes
of registration because of their importance in the
world of Commerce.
LUFTHANSA GERMAN AIRLINES VS. CA
(Damages) 243 SCRA 600
FACTS:
Private respondent Don Ferry was not able
to take Cathay Pacific's flight from Frankfurt to
Manila because petitioner Lufthansa did not give
its endoresment on Ferry's ticket to Cathay.
However Lufthansa was able to book him its flight
to Bangkok on the same day and Bangkok to
Manila on board Thai Airways the next day.
Lufthansa seeks a review of the CA decision
condenming them to pay actual, moral, and
exemplaray damages aside from the nominal
damages incurred.
ISSUE:
Whether Lufthansa should to pay actual, moral,
and exemplaray damages.
HELD:
No. Petitioner's failure constituted breach
of its contract of carriage with private
respondent. However, this was not attended by
fraud, or bad faith. Where the defendant is not
shown to have acted fraudulently or in bad faith
in breaching the contract, liability for damages is
limited to the natural and probable consequences
of the breach of the obligation, and which the
parties had forseen or could reasonably have
forseen. In such a case, liability would not include
the payment of moral and exemplary
damages.the award of actual damage must also
be disallowed being highly speculative. In the
absence of proof on the actual damages suffered,
private respondent is entitled to nominal
damages.
SARKIES TOURS PHILS VS. IAC (Damages)
124 SCRA 588
FACTS:
Petitioner Sarkies Tours Phils. Inc.,
advertised in the newspaper its tour to Corregidor
on Independence Day. Private respondent Dizons
purchased tickets from Sarkies. The M/V Edisco,
which was used for the tour, was owned by
Mendoza. It was not registered to ferry
passengers, nor was it licensed to operate as a
watercraft. On the trip, it was overloaded and
lacked lifesaving equipment. When disaster
struck on the return trip to Manila, the boat
capsized. Consequently, private respondent lost
cash and personal belongings and their young
daughter also drowned. The court held both
Sarkies and Mendoza jointly and severally liable
for the damages for the reasin that the
relationship between the two was a single
operation...which guaranteed them safe passage
all throughout.
ISSUE:
Whether Sarkies can be held liable for exemplary
damages.
HELD:
The award for the exemplary damages
should be eliminated. There is no showing that
SARKIES acted in a wanton...or malevolent
manner which would warrant the application of
corrective measures for the public good
especially in accident cases where the public
carriers are involved. The causative negligence in
such cases is personal to employees actually in
charge of the vehicles, and it is they who should
be made to pay this kind of damages by way of
example or correction.
TAN VS NORTHWEST AIRLINES (Damages)
327 SCRA 263
FACTS:
Petitioners Tan boarded Northwest Airlines
Flight 29 in USA bound for the Philippines. Upon
arrival at NAIA, petitioners found that their
baggages were missing. They were informed that
the baggages might still be in another plane. Two
days after, they recovered their baggages but
some of its contents were destroyed. Petitioner
filed a case for damages with the RTC which
found responent liable. On appeal, the CA deleted
the award of moral and exemplary damages.
ISSUE:
Whether Northwest should be made liable for
moral and exemplary damages.
HELD:
No. Respondent was not guilty of willful
misconduct. For willful misconduct to exist there
must be a showing that the acts complained of
were impelled by an intention to violate the law,
or were in persistent disregard of one's rights. It
must be evidenced by a flagrantly or shamefully
wrong or improper conduct. There was nothing in
respondent's conduct which showed that they
were motivated by malice or bad faith in loading
her baggaes on another plane. Where in
breaching the contract of carriage the defendant
airline is not shown to have acted fraudulently,
liability for damages is limited to the natural and
probable consequences of the breach of the
obligation, and which the parties had forseen or
could reasonably have forseen.
HEIRS OF AMPARO DE LOS SANTOS v. CA
Facts:
This petition for certiorari seeks to set aside the
CA decision in affirming the CFI decision which
dismissed the petitioners claim for damages
against Compania Maritima for the injury to and
death of the victims as a result of the sinking of
M/V Mindoro.
Issue:
WON Maritimas negligence and of the application
of Art 587 of the Code of Commerce? s
Held:
The petition has merit. Maritimas lack of
extraordinary diligence coupled with the
negligence of the captain as found by the
appellate court were the proximate causes of the
sinking of M/V Mindoro. Hence, Maritima is liable
for the deaths and injury of the victims.
ABOITIZ SHIPPING CORPORATION v.
GENERAL ACCIDENT FIRE AND LIFE
ASSURANCE CORPORATON, LTD.
Facts:
Petitioner is a domestic corporation engaged in
the business of maritime trade. It owned M/V P.
ABOITIZ, a common carrier which sank on voyage
from Hongkong to Philippines. The Board of
Maritime Inquiry found that such sinking was due
to force majeure and that the vessel was
seaworthy. General Accident Fire and Life
Assurance Corporation, Ltd (GAFLAC) was
awarded its claim on the ground that the loss did
not occur as a result of force majeure.
Issue:
WON M/V P. ABOITIZ was liable?
Held:
The real an hypothecary nature of maritime law
simply means that the liability of the carrier in
connection with losses relate to maritime
contracts is confined to the vessel, which is
hypothecated for such obligations or which
stands as guaranty for their settlement.
MONARCH INSURANCE CO., INC. v. CA
Facts:
All cases arose from the loss of cargoes of various
shippers when the M/V P. Aboitiz, a common
carrier sank on her voyage from Hong Kong to
Manila. The shippers, their successor-in-interest,
and the cargo insurers such as the instant
petitioners file separate suits against Aboitiz
before the RTCs.

Issue:
WON limited liability rule may apply?
Held:
Article 837 applies the principle of limited liability
in cases of collision, hence Arts 587 and 590
embody the universal principle of limited liability
in all cases.
A. MAGSAYSAY, INC. v. AGAN
Facts:
Plaintiffs vessel SS Antonio left Manila for Basco,
Batanes with general cargo owned by the
different shippers including that of the defendant.
Upon reaching Aparri, it accidentally ran aground.
Plaintiff had it refloate by Lusteveco for
Compensation.
Issue:
WON expenses incurred was considered general
Average?
Held:
The expenses incurred in floating the vessel do
not constitute general average. In classifying
averages into simple or particular an general or
gross and defining each class, the Code of
Commerce at the same time enumerates certain
specific cases as coming specially under one or
the other class.
The following are the requisites for a
general average: 1. There must be a common
danger, 2. for the common safety, part of the
vessel or cargo or both is sacrificed deliberately,
3. from the expenses of damages caused follows
the successfully saving of the vessel and cargo,
and 4. the expenses or damages should have
been incurred or inflicted after the taking the
proper legal steps and authority.
AMERICAN HOME ASSURANCE COMPANY v.
CA
Facts:
NMC Claims that AHA is barred from suing
recovery?
Issue:
WON claim for average be admitted?
Held:
Claims for average shall not be admitted if they
do not exceed five percent of the interest which
the claimant may have in the vessel or cargo if it
is gross average and one percent of the goods
damaged if particular average deducting in both
cases the expenses of appraisal, unless there is
an agreement to the contrary.
STEVENS & CO. v. NORDEUTSCHER LLOYD
Facts:
Plaintiff shipped from Hamburg to Manila aboard
defendants vessel MX Schwabenstein, 2,000
pieces of prismatical thermometer arriving in
Manila on May 15, 1959. Upon delivery on May
21, 1959s, it was discovered that 1,154 pieces
were missing and/or destroyed. Defendant refuse
to pay the claims of loss despite demants.
Issue:
WON action had prescribed?
Held:
The action commenced by plaintiff in the
Municipal Court on April 27, 1960 was dismissed
for lack of jurisdiction over the subject-matter on
June 13, 1960 or over 20 days after the expiration
of the period of one year, beginning May 21,
1959, within which plaintiffs action could be
brought, pursuant to COGSA.
CALTEX (PHIL.) v. SULPICIO LINES (315 SCRA
709)
Facts:
MT Vector is a tramping motor tanker owned and
operated by Vector Shipping Corporation (Vector),
which is engaged in the business of transporting
fuel products. On December 19, 1987, MT Vector
left Limay, Bataan, enroute to Masbate, loaded
with barrels of petroleum products shipped by
Caltex, by virtue of a charter contract between
Vector and Caltex. The next day, MT Vector
collided with passenger ship MV Doa Paz of
Sulpicio Lines, Inc. (Sulpicio). After investigation,
it was found that MT Vector was at fault. The
claimants filed with the Regional Trial Court of
Manila, a complaint for Damages Arising from
Breach of Contract of Carriage against Sulpicio
which, in turn, filed a third-party complaint
against Vector and Caltex.
Issue:
Is the charterer (Caltex) liable under the
Philippine Maritime Laws?
Held:
No. The respective rights and duties of a shipper
and the carrier depends not on whether the
carrier is public or private, but on whether the
contract of carriage is a bill of lading or
equivalent shipping documents on the one hand,
or a charter party or similar contract on the other.
In the case at bar, Caltex and Vector entered into
a contract of affreightment, also known as a
voyage charter. If the charter is a contract of
affreightment, which leaves the general owner in
possession of the ship as owner for the voyage,
the rights and the responsibilities of ownership
rest on the owner. The charterer is free from
liability to third persons in respect of the ship.
Moreover, Caltex and Vector Shipping Corporation
had already been doing business since 1985, or
for about two years before the tragic incident
occurred in 1987. Past services rendered showed
no reason for Caltex to observe a higher degree
of diligence. Clearly, as a mere voyage charterer,
Caltex had the right to presume that the ship was
seaworthy as even the Philippine Coast Guard
itself was convinced of its seaworthiness. All
things considered, the court finds no legal basis
to hold Caltex liable for damages.
MARITIME AGENCIES AND SERVICES, INC. v.
CA (187 SCRA 346)
Facts:
Transcontinental Fertilizer Company of London
chartered from Hongkong Island Shipping
Company the motor vessel Hongkong Island for
the shipment of urea from Odessa, USSR to the
Philippines. A Uniform General Charter was
signed by the parties for the purpose. Of the total
shipment, part of it was for the account of Atlas
Fertilizer Company (Atlas) as consignee; some
were to be discharged in Manila and the
remaining in Cebu. The goods were insured by
the consignee with the Union Insurance Society of
Canton, Ltd. against all risks. Maritime Agencies
and Services, Inc. was appointed as the charters
agent and Macondray Company, Inc. as the
owners agent. On October 31, 1979, Atlas filed a
claim for the value of short landed bags.
Issue:
Is petitioner liable?
Held:
No. A voyage charter being a private carriage, the
parties may freely contract respecting liability for
damage to the goods and other matters. The
basic principle is that the responsibility for cargo
loss falls on the one who agreed to perform the
duty involved in accordance with the terms of
most voyage charters. This is true in the present
cases where the charterer was responsible for
loading, stowage and discharging at the ports
visited, while the owner was responsible for the
care of the cargo during the voyage under Par. 2
of the Uniform General Charter. As regards the
goods damaged or lost during unloading, the
charterer is liable therefor, having assumed this
activity under the charter party free of expense
to the vessel. However, the liability imposable
upon it cannot be borne by Maritime which, as a
mere agent, is not answerable for injury caused
by its principal. It is a well-settled principle that
the agent shall be liable for the act or omission of
the principal only if the latter is undisclosed.
MARIMPERIO COMPANIA NAVIERA, S.A. v. CA
(156 SCRA 368)
Facts:
Respondents Philin Traders Corporation (Philin)
and Union Import and Export Corporation (Union)
entered into a joint business venture for the
purchase of copra from Indonesia for sale in
Europe. Exequiel Toeg of Interocean, who was
commissioned to look for a vessel, found the
vessel SS Paxoi of Marimperio available. Philin
and Union authorized Toeg to negotiate for its
charter but with the instructions to keep
confidential the fact that they are the real
charterers. A Uniform Time Charter for the hire
of vessel Paxoi was entered into by the owner,
Marimperio through its agent, representing
Interocean Shipping Corporation, as the
charterer, although it merely acted in behalf of
the real charterers, Philin and Union.
Issue:
Do respondents have legal capacity to bring suit
for specific performance against the petitioner
based on the charter party?
Held:
No. It is obvious from the disclosure made in the
charter party by the authorized broker that the
real charterer is the Interocean Shipping
Company (which sublet the vessel to Union and in
turn sublet it to Philin). In a contract of sub-lease,
the personality of the lessee does not disappear;
he does not transmit absolutely his rights and
obligations to the sub-lessee; and the sub-lessee
generally does not have any direct action against
the owner of the premises as lessor, to require
the compliance of the obligations contracted with
the plaintiff as lessee, or vice versa. In the Civil
Code, there are at least two instances which allow
the lessor to bring an action directly against the
sub-lessee (a) use and preservation of the
premises under Article 1651, and (b) rentals
under Article 1652. In both articles, however, it
should be noted that it is not the sub-lessee, but
the lessor, who can bring the action.
PLANTERS PRODUCTS, INC. v. CA (226 SCRA
476)
Facts:
Planters Products, Inc. (Planters) purchased from
Mitsubishi International Corporation of U.S.A tons
of urea fertilizer which the latter shipped aboard
the cargo vessel owned by private respondent
Kyosei Kisin Kabushiki Kaisha (KKKK) from
America to La Union. Prior to its voyage, a time
charter party was entered into between
Mitsubishi as shipper/charterer and KKKK as
shipowner. After the arrival of the vessel, the
report submitted by private marine and cargo
surveyors revealed a shortage in the cargo, and
some portion in the cargo was contaminated with
dirt, rendering the same unfit for commerce.
Issue:
Does a common carrier become a private carrier
by reason of a charter party?
Held:
No. It is not disputed that respondent carrier, in
the ordinary course of business, operates as a
common carrier, transporting goods
indiscriminately for all persons. When petitioner
chartered the vessel M/V Sun Plum, the ship
captain, its officers and compliment were under
the employ of the shipowner and therefore
continued to be under its direct supervision and
control. Hardly then can the court charge the
charterer, a stranger to the crew and to the ship,
with the duty of caring for his cargo when the
charterer did not have any control of the means
in doing so. It is therefore imperative that a public
carrier shall remain as such, notwithstanding the
charter of the whole or portion of a vessel by one
or more persons, provided the charter is limited
to the ship only, as in the case of a time-charter
or voyage-charter. It is only when the charter
includes both the vessel and its crew, as in a
bareboat or demise that a common carrier
becomes private, at least insofar as the particular
voyage covering the charter party is concerned.
Indubitably, a shipowner in a time or voyage
charter retains possession and control of the ship,
although her holds may, for the moment, be the
property of the charterer.
LUZON STEVEDORING CORP. v. CA (156
SCRA 169)
Facts:
A maritime collision occurred between the tanker
LSCO Cavite owned by Luzon Stevedoring
Corporation (Luzon) and MV Fernando Escao a
passenger ship owned by Hijos de F. Escao, Inc.
(Escao), as a result the passenger ship sunk. An
action in admiralty was filed by Escao and the
Domestic Insurance Company of the Philippines
against Luzon. The trial court held that LSCO
Cavite was solely to blame for the collision and
that Luzons claim that its liability should be
limited under Article 837 of the Code of
Commerce has not been established. The Court of
Appeals affirmed the trial court. The Supreme
Court also affirmed the Court Appeals.
Issue:
Is it necessary that the owner should abandon the
vessel in order to claim limited liability under
Article 837 of the Code of Commerce?
Held:
Yes. However, if the injury was due to the
shipowners fault, the shipowner may not avail of
his right to avail of limited liability by abandoning
the vessel. The real nature of the liability of the
shipowner or agent is embodied in the Code of
Commerce. Articles 587, 590 and 837 are
intended to limit the liability of the shipowner,
provided that the owner or agent abandons the
vessel. Although Article 837 does not specifically
provide that in case of collision there should be
abandonment, to enjoy such limited liability, said
article is a mere amplification of the provisions of
Articles 587 and 590 which makes it a mere
superfluity. The exception to this rule in Article
837 is when the vessel is totally lost in which
case there is no vessel to abandon, thus
abandonment is not required. Because of such
loss, the liability of the owner or agent is
extinguished. However, they are still personally
liable for claims under the Workmens
Compensation Act and for repairs on the vessel
prior to its loss. In this case, the Court held that
the petitioner is at fault and since he did not
abandon the vessel, he cannot invoke the benefit
of Article 837 to limit his liability to the value of
the vessel, all appurtenances and freightage
earned during the voyage.
SMITH BELL AND COMPANY (PHILS.), INC. v.
CA (197 SCRA 201)
Facts:
A collision took place between the M/V Don
Carlos, an inter-island vessel owned and
operated by Carlos A. Go Thong and Company
(Go Thong), and the M/S Yotai Maru, a merchant
vessel of Japanese registry. The consignees of the
damaged cargo were paid by their insurance
companies. The insurance companies, in turn,
having been subrogated to the interests of the
consignees of the damaged cargo, commenced
actions against Go Thong for damages sustained
by the various shipments.
Issue:
Was M/V Don Carlos negligent?
Held:
Yes. There are three principal factors which are
constitutive of negligence on the part of M/V Don
Carlos, which negligence was the proximate
cause of the collision. The first of the factors was
the failure of Don Carlos to comply with the
requirements of Rule 18 (a) of the International
Rules of the Road. Herein, Don Carlos was
overtaking another vessel, the Don Francisco. It
was in the process of overtaking Don Francisco
that Don Carlos was finally brought into a
situation where he was meeting end-on or nearly
end-on Yotai Maru thus involving risk of
collision. The second factor was its failure to have
on board that night a proper look-out as
required by Rule I (B). Under Rule 29 of the same
set of rules, all consequences arising from the
failure of Don Carlos to keep a proper look-
out must be borne by Don Carlos. The third
factor relates to the fact that Second Mate Benito
German was, immediately before and during the
collision, in command of the Don Carlos,
although its captain, Captain Rivera, was very
much in the said vessel at the time. The fact that
second mate German was allowed to be in
command of Don Carlos and not the chief or
the sailing mate in the absence of Captain Rivera,
gives rise to no other conclusion except that said
vessel had no chief mate. Worst still, aside from
Germans being only a second mate, is his
apparent lack of sufficient knowledge of the basic
and generally established rules of navigation (e.g.
necessity of look-out). There is, therefore, every
reasonable ground to believe that his inability to
grasp actual situation and the implication brought
about by inadequacy of experience and technical
know-how was mainly responsible and decidedly
accounted for the collision of the vessels involved
in the case.
Keng Hua vs CA, RTC & Sea Land Service,
Inc 286 SCRA 257
Facts:
Sea Land (carrier) received a sealed container for
shipment to Keng Hua (consignee) in Manila. A
bill of lading was issued. However, the contents
remained inside the container for 6 months, thus
as per agreement in the bill of lading, demurrage
charges accrued for the consignees failure to
discharge the shipment. As a result, Sea Land
demanded from Keng Hua the payment of the
charges. Keng Hua refused alleging that the bill of
lading is not binding. It admits receiving the bill of
lading but contends that its refusal in accepting
the shipment proves that terms and conditions
printed therein.
Issue:
WON the bill of lading is binding to the consignee
(Keng Hua).
Held:
Yes. A bill of lading serves two functions. First, it
is a receipt for the goods shipped. Second, it is a
contract by which three parties, namely, the
shipper, the carrier, and the consignee undertake
specific responsibilities and assume stipulated
obligations. A "bill of lading delivered and
accepted constitutes the contract of carriage
even though not signed," because the
"acceptance of a paper containing the terms of a
proposed contract generally constitutes an
acceptance of the contract and of all of its terms
and conditions of which the acceptor has actual
or constructive notice."
In this case Keng Hua admits that it received the
bill of lading. Having been afforded an
opportunity to examine the said document, Keng
Hua did not immediately object to or dissent from
any term or stipulation therein. Hence, the terms
and conditions as well as the various entries
contained therein were brought to its knowledge.
Keng Hua accepted the bill of lading without
interposing any objection as to its contents. This
raises the presumption that it agreed to the
entries and stipulations imposed therein. The
acceptance of a bill of lading by the shipper and
the consignee, with full knowledge of its contents,
gives rise to the presumption that the same was
a perfected and binding contract.

American Insurance Co. v. Compania
Maritima 21 SCRA 998
Facts:
A certain cargo was shipped in New York aboard
MS Toreador of which the general agent in the
Philippines is Macondray with freight prepaid to
Cebu City, pursuant to the Bill of Lading. In as
much as the final port of call of the MS Toreador
was Manila, the carrier transshipped the cargo
after its discharge in Manila aboard the SS
Siquijor, an inter-island vessel. The shipment was
finally discharged in Cebu City, short of two (2)
pieces of the cargo. Hence a complaint was filed
in Court agai9nst Macondray. Macondray moved
to dismiss the complaint on the ground that
plaintiffs action had already prescribed under
COGSA. Plaintiff averred that the one-year
prescriptive period provided for in the COGSA
does not apply in this case, which should be
governed by the statute of limitations. Trial Court
dismissed the complaint. Plaintiff appealed.
Issue:
WON the transshipment of cargo from Manila to
Cebu was a separate transaction from the
originally entered into by Macondray.
Held:
The action is based on the contract of carriage up
to the final port of destination, which was Cebu
City, for which the corresponding freight had
been prepaid. The transshipment of the cargo
from Manila to Cebu was not a separate
transaction from the originally entered by
Macondray, as general agent for the MS Toreador.
It was part of MAcondrays obligation under the
contract of service and the fact that
transshipment was made via an inter-island
vessel did not operate to remove the transaction
from the operation of the COGSA.
Union Carbide Philippines v. Manila Railroad
Co. 77 SCRA 359
Facts:
On December 18, 1961, the vessel arrived in
Manila with a cargo of synthetic resin consigned
to General Base Metals, Inc., which sold the cargo
to the plaintiff herein. On the following day the
cargo was delivered to the Manila Port Service in
good order and condition, except for 25 bags
which were in bad order.
On December 21, 1962, the plaintiff filed a
complaint in the CFI against the steamship
Company to recover value of the damaged cargo.
The court dismissed the action on the ground that
it had prescribed, because it was filed beyond
one-year after the delivery of the goods, as
contemplated in Section 3 (6) of COGSA. The
plaintiff appealed, contending that delivery in
the law meant the actual delivery of the goods to
the consignee by the customs broker. The carrier
contended that delivery meant discharge from
the vessel into the custody of the customs
arrastre operator.
Issue:
WON the plaintiff is correct in interpreting
delivery as actual of the goods to the consignee
by the customs broker.
Held:
The sensible and practical interpretation is that
delivery within the meaning of Section 3 (6) of
COGSA means delivery to the arrastre operator.
That delivery is evidenced by tally sheets which
show whether the goods were landed in good
order or in bad order, a fact the consignee or
shipper can easily ascertain through the customs
broker.
To use as basis for computing the 1-year period
the of delivery to the consignee would be
unrealistic and might generate confusion
between the loss or damage sustained by the
goods while in the carriers custody, and the loss
or damage caused to the goods while in the
arrastre operators possession.
Stevens & Co. v. Nordeutscher Lloyd 6 SCRA
180
Facts:
Plaintiff shipped from Hamburg to Manila aboard
defendants vessel MX Schwahenstein, 2,000
pieces of prismatical thermometers arriving in
Manila on May 15, 1959. Upon delivery on May
21, 1959, it was discovered that 1,154 pieces
were missing and/or destroyed. Defendant
refused to pay the claims of loss despite
demands.
Plaintiff brought an action in the Municipal Court
of Manila on April 27, 1960, against defendant to
recover damages, but the case was dismissed on
June 30, 1960, without trial on the merits, due to
lack of jurisdiction over the subject matter, being
an admiralty case. Plaintiff then filed again the
complaint in the Manila CFI on June 24, 1960 and
defendant moved to dismiss the complaint upon
the ground that plaintiffs cause of action had
already prescribed, having been filed more than
one-year from May 21, 1959 when the goods
were, or ought to be delivered. Plaintiff alleged
that the period of prescription of one year in the
COGSA was suspended by the filing of the action
in Municipal Court of Manila on April 27, 1960
until dismissed on June 13, 1960. CFI dismissed
the complaint.
Issue:
WON the plaintiffs (Stevens and Co.) causes of
action had prescribed.
Held:
The motion to dismiss should have been denied,
not only because of Article 1155 of the NCC which
provides that prescription of actions is interrupted
when they are filed before the court but also in
view of Section 49 of Article 190 which provides
that if, an action commenced in due time, the
plaintiff fails otherwise than upon the merits, and
the time limited for the commencement of such
action has, at the date of such failure, expired,
the plaintiff may commence a new action within
one year after such date.
The action commenced was dismissed for lack of
jurisdiction over the subject matter on June 13,
1960, or over 20 days after the expiration of the
period of one year, beginning May 21, 1959,
within which plaintiffs action could be brought,
pursuant to COGSA. Under Section 49 of Article
190, the period within which such plaintiff could
initiate the present action was renewed,
therefore, for another year, beginning from June
14, 1960. The case at bar was commenced on
June 24, 1960, or within the period last
mentioned.
Ang v. Compania Maritima 133 SCRA 600
Facts:
Ang on September 26, 1963, as the assignee of a
Bill of Lading held by Yau Yue Commercial bank,
Ltd. Of Hongkong, sued Compania maritime of
the Philippines and C.L. Diokno. He prayed that
the defendants be ordered to pay him solidarily
the sum of US $130,539.68 with interest from
February 9, 1963 plus attorneys fee and
damages.
This case involves the recovery of damages by
the consignee from the carrier in a case of
misdelivery of the cargo which action was
dismissed by the trial court on the grounds of
lack of cause of action and prescription, since the
action was filed beyond the one-year period
provided in the COGSA.
Issue:
WON the action filed by Ang on misdelivery of
cargo had prescribed.
Held:
In the American Steamship Agencies cases, it was
held that the action of Ang is based on
misdelivery of the cargo which should be
distinguished from loss thereof. The one year
period provided for in Section 3 (6) of COGSA
refers to loss of the cargo. What is applicable is
the 4-year period of prescription for quasi-delicts
prescribed in Article 1146 (2) of the Civil Code or
ten years for violation of a written contract as
provided for in the Article 1144 (1) of the same
Code. As Ang filed the action less than three (3)
years from the date of the alledged misdelivery of
the cargo, it has not yet prescribed. Ang, as
indorsee of the Bill of Lading, is a real party in
interest with a cause of action for damages.
SANTOS III vs Northwest Orient Airlines
FACTS:
Article 28 An action for damages must be
brought, at the option of the plaintiff, in the
territory of one of the High Contracting Parties,
either before the Court having jurisdiction where
the carrier is ordinarily resident, or has his
principal place of business, or has an
establishment by which the contract has been
made or before the Court having jurisdiction at
the place of destination
Petitioner Santos bought a round trip ticket from
northwest orient airlines (NOA) in san Francisco
USA, for a flight to manila via Tokyo. However
upon check in he was informed that he has no
reservations for his flight from Tokyo to manila.
Santos filed a complaint against NOA in RTC of
Makati. But NOA moved to dismiss the complaint
on the ground of lack of jurisdiction pursuant to
article 28 of the Warsaw convention.
ISSUE:
Is NOA correct in contending that RTC of makati
has no jusrisdiction over the case at bar?
HELD:
Yes. Because flight involved is an international
fight from US to PHIL. The contract of carriage
designates terminals within the territory of 2 High
contracting parties. The WS convention
automatically applies and is exclusively governs
the rights and liabilities of the parties.
Complaint could only be instituted before: 1)
court of domicile of the carrier 2) court of
principal place of business 3) court when it has a
place of business through which the contract has
been made 4) court of place of destination
The place of destination within the meaning of
WSC is determined by the terms of the contract
of carriage or in this case the ticket where it
shows the ultimate destination is SF USA.
Domicile of a corporation is customarily regarded
as the place where it is incorporated. Not every
place where it has office.
ALITALIA vs IAC
FACTS:
Dr. Felipa Pablo, an associate professor in the
University of the Philippines was invited to a
scientific meeting in Italy where she was to be a
resource speaker.
Dr. Pablo booked passage on petitioner Alitalia.
She arrived in Milan on the day before the
meeting, but was told that her luggage was
delayed and was in a succeeding flight from
Rome to Milan. The luggage included her
materials for the presentation.
The succeeding flights did not carry her luggage.
Desperate, she went to Rome to try to locate the
luggage herself, but to no avail. She returned to
Manila without attending the meeting.
She demanded reparation for the damages. She
rejected Alitalias offer of free airline tickets and
commenced an action for damages. Her luggage
was returned to her only after 11 months. The
trial court ruled in favor of Dr. Pablo, and this was
affirmed by the Court of Appeals.
ISSUE:
W/N (1) the Warsaw Convention should be
applied to limit Alitalias liability;
HELD:
Under the Warsaw Convention Articles 17, 18, 19,
22, 24, 25. an air carrier is made liable for
damages for:
a. The death, wounding or other bodily injury of a
passenger if the accident causing it took place
onboard the aircraft or In the course of its
operations of embarking or disembarking;
b. The destruction or loss of, or damage to, any
registered luggage or goods, if the occurrence
causing it took place during the carriage by air;
and
c. Delay in the transportation by air of
passengers, luggage or goods.
The convention however denies to the carrier
availment of the provisions which exclude or limit
his liability, if the damage is caused by his willful
misconduct, or by such default on his part as is
considered to be equivalent to willful misconduct.
It should be deemed a limit of liability only in
those cases where the cause of the death or
injury to person, or destruction, loss or damage to
property or delay in its transport is not
attributable to or attended by any willful
misconduct, bad faith, recklessness, or otherwise
improper conduct on the part of any official or
employee for which the carrier is responsible, and
there is otherwise no special or extraordinary
form of resulting injury.
In the case at bar, no bad faith or otherwise
improper conduct may be ascribed to the
employees of petitioner airline; and Dr. Pablo's
luggage was eventually returned to her,
belatedly, it is true, but without appreciable
damage. However she is entitled to nominal
damages from the special injury caused.
Northewest airlines vs Cuenca
FACTS:
Cuenca boarded petitioner's plane in Manila with
a first class ticket to Tokyo to join a conference in
in his capacity as a delegate of the Philippines, he
was, upon arrival at Okinawa, transferred to the
tourist class compartment. He was rudely
compelled to do so under threat of otherwise
leaving him in Okinawa. He had no choice but to
comply to reach the conference on time.
Cuenca filed an action for damages for alleged
breach of contract of carriage in the CFI of
manila. NWAirlines contended that Warsaw
convention is not inforce in the Phil and has no
cause of action therefore. The CFI rendered
judgment in favor of cuenca. Ordering NWAirlines
to pay 20k in moral, 5k in exemplary with legal
interest and attorneys fees of 2k.
On appeal CA affirmed the decision except there
was no more exemplary damages and the 20k
moral damages was converted to nominal
damages.
ISSUE:
Whether or not 1) WSC is applicable in the
Philippines 2) NW air is liable to Cuenca.
HELD:
Article 17: carrier is made liable for damages in
the event of the death, wounding or other bodily
injury of a passenger if the accident causing it
took place onboard the aircraft or In the course of
its operations of embarking or disembarking;
Article 18: carrier is made liable for damages in
the event of the destruction or loss of, or damage
to, any registered luggage or goods, if the
occurrence causing it took place during the
carriage by air.
The transportation by air within the meaning of
the preceding paragraph comprise the period
during which baggage or goods are in the charge
of the carrier, whether in an airport or onboard
an aircraft or in any place whatsoever. Thus
applicable in the Philippines through definition of
transportation by air.
Petitioner contends that carrier is only liable in
the cases enumerated. The enumerations neither
regulate nor exclude liability for other breach of
contract by carrier. Theory of the carrier is
absurd. Therefore carrier is liable for nominal
damages.
Mayer Steel Pipe Corporation vs Court of
Appeals
FACTS:
In 1983, Hongkong Government Supplies
Department (HGSD) contracted Mayer Steel Pipe
Corporation for the latter to manufacture and
deliver various steel pipes and fittings. Before
Mayer Steel shipped the said pipes, it insured
them with two insurance companies namely,
South Sea Surety and Insurance Co., Inc. and
Charter Insurance Corporation. The insurance
policies cover all risks which include all causes
of conceivable loss or damage.
When the pipes reached Hongkong, the pipes
were discovered to have been damaged. The
insurance companies refused to make payment.
On April 17 1986, Mayer Steel sued the insurance
companies. The case reached the Court of
Appeals. The CA ruled that the case filed by
Mayer Steel should be dismissed. It held that the
action is barred under Section 3(6) of the
Carriage of Goods by Sea Act since it was filed
only on April 17, 1986, more than two years from
the time the goods were unloaded from the
vessel. Section 3(6) of the Carriage of Goods by
Sea Act 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 or the date when
the goods should have been delivered. The CA
ruled that this provision applies not only to the
carrier but also to the insurer, citing the case of
Filipino Merchants Insurance Co., Inc. vs
Alejandro.
ISSUE:
Whether or not the Court of Appeals is correct
discharging insurers liability based on COGSA sec
3(6)
HELD:
No. Section 3(6) of the Carriage of Goods by Sea
Act states that the carrier and the ship shall be
discharged from all liability for loss or damage to
the goods if no suit is filed within one year after
delivery of the goods or the date when they
should have been delivered.
Under this provision, only the carriers liability is
extinguished if no suit is brought within one year.
But the liability of the insurer is not extinguished
because the insurers liability is based not on the
contract of carriage but on the contract of
insurance. A close reading of the law reveals that
the Carriage of Goods by Sea Act governs the
relationship between the carrier on the one hand
and the shipper, the consignee and/or the insurer
on the other hand. It defines the obligations of
the carrier under the contract of carriage. It does
not, however, affect the relationship between the
shipper and the insurer. The latter case is
governed by the Insurance Code.
In Filipino Merchants, it was the insurer which
filed a claim against the carrier for
reimbursement of the amount it paid to the
shipper
Magellan Mftg. Marketing Vs. CA
FACTS:
Magellan Mftg. Marketing corp (MMM) entered
into a contract with Choju Co (CC). to export
anahaw fans
As payment CC issued a letter of credit to MMM.
MMM contracted F.E. Zuellig a shipping agent of
Orient Overseas Container Lines, Inc., (OOCL)
specifying that he needed an on-board bill of
lading and that transhipment is not allowed under
the letter of credit
MMM paid F.E. Zuellig the freight charges and
secured a copy of the bill of lading which was
presented to Allied Bank. The bank then credited
the amount covered by the letter of credit to
MMMC
When MMMC's President, went back to the bank
later, he was informed that the payment was
refused by the buying for lack of bill of lading and
there was a transhipment of goods
The anahaw fans were shipped back to Manila
through OOCL . MMM abandoned the whole cargo
and sued OOCL for damages praying to be paid
for whatever it was not able to earn from CC
OOCL: bill of lading clearly shows that there will
be a transhipment and that petitioner was well
aware that MV (Pacific) Despatcher was only up
to Hongkong where the subject cargo will be
transferred to another vessel for Japan
RTC: favored OOCL: consented because the bill of
lading where it is clearly indicated that there will
be transshipment. MMMC was the one who
ordered the reshipment of the cargo from Japan
to Manila
CA: Affirmed
ISSUE:
W/N the bill of lading which reflected the
transhipment against the letter of credit is
consented by MMMC
HELD:
Acceptance of the bill without dissent raises the
presumption that all the terms therein were
brought to the knowledge of the shipper and
agreed to by him and, in the absence of fraud or
mistake, he is estopped from thereafter denying
that he assented to such term
Ang vs Compania maritima
FACTS:
Ang is the assignee of a bill of lading held by Yau
Yue bank. Ang sued Compania Maritima for
damages for the misdelivery of a cargo But was
dismissed for lack of cause of action and
prescription since action was filed beyond the 1
year period in COGSA
ISSUE:
W/N Angs action has already prescribed based on
COGSA
HELD:
As held in American steamship Agencies action
for misdelivery of cargo must be distinguished
from loss. The one year period provided in COGSA
refers to loss. What is applicable is the 4 year
period of prescription for quasi-delict under the
civilcode or 10 years fro violation of a written
contract as provided in the same code
Since Ang filed the action less than 3 years from
the alleged misdelivery it has no prescribed. Ang
as indorsee of the bill of lading is a a real party in
interest with cause of action for damages.
ZALAMEA v. CA (228 SCRA 23, November 18,
1993) U.S. CODE OF FEDERAL
REGULATIONS
FACTS:
Petitioners-spouses Zalamea and their daughter
purchased 3 airline tickets, 2 of which are
discounted, from the Manila agent of respondent
Trans World Airlines (TWA) for a flight from New
York to Los Angeles. All three tickets represented
confirmed reservations.
While in New York, petitioners received notice of
the reconfirmation of their reservation for said
flight. On the appointed date, however,
petitioners checked in at 10:00 a.m., an hour
earlier than the scheduled flight at 11:00 a.m. but
were placed on the wait-list because the number
of passengers who had checked in before them
had already taken all the seats available on the
flight. Only the husband was allowed to board, his
wife and daughter were denied boarding.
Even in the next TWA flight to Los Angeles Mrs.
Zalamea and her Daughter, could not be
accommodated because it was fully booked.
Thus, they were constrained to book in another
flight and purchased two tickets from American
Airlines.
ISSUES:
1. Which country has jurisdiction over the
case?
2. Was there bad faith on the part of TWA?
HELD:
1. Since the tickets were sold and issued
in the Philippines, the applicable law in
this case would be the Philippine Law
by virtue of the pricicple lex loci
contractus
2. There was bad faith on the part of TWA
because:
a. It did not allow
petitioners to board their flight in
spite of confirmed tickets
b. There was
overbooking on its part; and
c. It did not inform its
passengers of its
alleged policy of
giving less priority to
discounted tickets
AIR FRANCE vs. CA (126 SCRA 449,
December 29, 1983) - IATA Tariff Rules and
Regulation
FACTS:
The GANAS were booked for the Manila/Osaka
segment on AIR FRANCE (AF) Flight 184 for 8 May
1970, and for the Tokyo/Manila return trip on AIR
FRANCE Flight 187 on 22 May 1970. The aforesaid
tickets were valid until 8 May 1971, the date
written under the period words Non valuable
epres de" (meaning, not valid after the") THE
GANAS did not depart on 8 May 1970.
The GANAS re-scheduled their departure on 7
May 1971 or one day before the expiry date. In
the morning of the very day of their scheduled
departure on the first leg of their trip, Teresita
Manucdoc, secretary of Jose Gana, requested
travel agent Lee Ella to arrange the revalidation
of the tickets. Ella gave the same negative
answer and warned her that although the tickets
could be used by the GANAS if they left on 7 May
1971, the tickets would no longer be valid for the
rest of their trip because the tickets would then
have expired on 8 May 1971.
ISSUE:
Was there a breach of contract of contract of air
carriage on the part of AF?
HELD:
There was no breach of contract of contract of air
carriage on the part of AF. Pursuant to the
International Air Transportation Association (IATA),
included in paragraphs 9, 10, and 11 of the
Stipulations of Fact between the parties in the
Trial Court, dated 31 March 1973; an airplane
tickets is valid for one year.
The passenger must undertake the final portion
of his journey by departing from the last point of
which he has made a voluntary stop before the
expiry of this limit x x x That is the time allowed
the passenger to begin and to complete his trip x
x x A ticket can no longer be used for travel if its
validity has expired before the passenger
completes his trip x x x To complete the trip, the
passenger must purchase a new ticket for the
remaining portion of the journey.
From the foregoing rules, it is clear that AIR
FRANCE cannot be faulted for breach of contract
when it dishonored the tickets of the GANAS after
8 May1971 since those tickets expired on said
date; nor when it required the GANAS to buy new
tickets or have their tickets re-issued for the
Tokyo/Manila segment of their trip.
AMERICAN AIRLINES v. CA (127 SCRA 482,
March 9, 2091) WARSAW CONVENTION
FACTS:
Private respondent Mendoza purchased, in Manila
from Singapore Airlines, conjunction tickets from
Manila to Singapore-Athens-Larnaca-Rome-Turin-
Zurich-Geneva-Copenhagen-New York.
In Geneva, Mendoza decided to forego his trip to
Copenhagen and to go straight to New York. He
exchanged the unused portion of the conjunction
ticket for a one-way ticket from Geneva to New
York from the petitioner airline.
Later, private respondent filed an action for
damages for the alleged embarrassment he
suffered when the petitioner's security officers
prevented him from boarding the plane.
The petitioner filed a motion to dismiss for lack of
jurisdiction of Philippine courts to entertain the
said proceedings under the Warsaw Convention.
ISSUE:
Is the assertion of AM correct?
HELD:
The assertion of AM is not correct because the
Warsaw Convention clearly states that a contract
of air transportation is taken as a single operation
whether it is founded on a single contract or a
series of contracts. The number of tickets issued
does not detract from the oneness of the contract
of carriage as long as the parties regard the
contract as a single operation. The evident
purpose is to promote international air travel by
facilitating the procurement of a series of
contracts for air transportation through a single
principal and obligating different airlines to be
bound by one contract of transportation.
Petitioner's acquiescence to take the place of the
original designated carrier binds it under the
contract of carriage entered into by the private
respondent and Singapore Airlines in Manila.
The third option of the plaintiff under the Warsaw
Convention is to sue in the place of business of
the carrier wherein the contract was made, is
therefore, Manila, and Philippine courts are
clothed with jurisdiction over this case.
UNITED AIRLINES vs. UY (318 SCRA 576,
November 19, 1999) - WARSAW
CONVENTION
FACTS:
Uy, a passenger on United Airlines (UA) checked
in together with his luggage of which was found
to be overweight at the airline counter. An airline
employee rebuked him and told him to repack his
things. The airline then billed him overweight
charges and was forced to pay the same with his
credit card.
Upon arrival in Manila, he discovered that one of
his bags had been slashed and its contents
stolen, respondent filed a complaint for damages.
United Airlines moved to dismiss the complaint
on the ground that respondent's cause of action
had prescribed, invoking Art. 29(1) of the Warsaw
Convention which provides that the right to
damages shall be extinguished if an action is not
brought within two years, reckoned from the date
of arrival at the destination, or from the date on
which the aircraft ought to have arrived, or from
the date on which the carriage stopped.
ISSUE:
Did the respondents cause of action prescribed?
HELD:
The respondents cause of action did not
prescribe. The Warsaw Convention can be
applied, or ignored, depending on the peculiar
facts presented by each case.
Respondent's complaint reveals that he is suing
on two (2) causes of action: (a) the shabby and
humiliating treatment he received from
petitioner's employees at the San Francisco
Airport which caused him extreme
embarrassment and social humiliation; and (b)
the slashing of his luggage and the loss of his
personal effects.
Insofar as the first cause of action is concerned,
respondent's failure to file his complaint within
the two (2)-year limitation of the Warsaw
Convention does not bar his action since
petitioner airline may still be held liable for
breach of other provisions of the Civil Code which
prescribe a different period or procedure for
instituting the action, specifically, Art, 1146
thereof which prescribes four (4) years for filing
on action based on torts.
With regard to the second cause of action,
respondent filed his complaint more than two (2)
years later, beyond the period of limitation
prescribed by the Warsaw Convention for filing a
claim for damages. However, it is obvious that
respondent was forestalled from immediately
filing an action because petitioner airline gave
him the run-around, answering his letters but not
giving in to his demands.
BRITISH AIRWAYS vs. CA (285 SCRA 450,
January 29, 1998) - WARSAW CONVENTION
FACTS:
On April 16, 1989, Mahtani decided to visit his
relatives in Bombay, India. Since British Airways
(BA) had no direct flights from Manila to Bombay,
Mahtani had to take a flight to Hongkong via PAL,
and upon arrival in Hongkong he had to take a
connecting flight to Bombay on board BA.
Prior to his departure, Mahtani checked in at the
PAL clothing's and personal effects, confident that
upon reaching Hongkong, the same would be
transferred to the BA flight bound for Bombay.
Unfortunately, when he arrived in Bombay he
discovered that his luggage was missing. The RTC
awarded him damages which were affirmed by
CA.
ISSUE:
Should BA be liable for Mahtanis loss?
HELD:
BA should be liable for Mahtanis loss. Admittedly,
in a contract of air carriage a declaration by the
passenger of a higher value is needed to recover
a greater amount, under Article 22(1) of the
Warsaw Convention.
American jurisprudence provides that an air
carrier is not liable for the loss of baggage in an
amount in excess of the limits specified in the
tariff which was filed with the proper authorities,
such tariff being binding on the passenger
regardless of the passenger's lack of knowledge
thereof or assent thereto. This doctrine is
recognized in this jurisdiction.
Notwithstanding the foregoing, the court, have
nevertheless, ruled against blind reliance on
adhesion contracts where the facts and
circumstances justify that they should be
disregarded.
In addition, the benefits of limited liability are
subject to waiver such as when the carrier failed
to raise timely objections during the trial when
questions and answers regarding the actual
claims and damages sustained by the passenger
were asked.
Given the foregoing postulates, the inescapable
conclusion is that BA had waived the defense of
limited liability when it allowed Mahtani to testify
as to the actual damages he incurred due to the
misplacement of his luggage, without any
objection.
SABENA BELGIAN WORLD AIRLINES v. CA
(255 SCRA 38, March 14, 1996) WARSAW
CONVENTION
FACTS:
Paula was a passenger on board Flight SN 284,
plaintiff checked in with her luggage. She stayed
overnight in Brussels and her luggage was left on
board Flight SN 284.
When Paula arrived at Manila she discovered that
the luggage was missing.
She felt relieved when she was advised that her
luggage had finally been found, with its contents
intact when examined, and that she could expect
it to arrive soon. She then waited anxiously only
to be told later that her luggage had been lost for
the second time.
Plaintiff demanded from the defendant the money
value of the luggage and its contents but
defendant refused to settle the claim.
ISSUE:
Should Sabena be liable for Paulas loss?
HELD:
Sabena should be liable for Sabenas loss. Based
on the undisputed facts, the petitioner was
ultimately guilty of gross negligence in the gage
not only once but twice.
The Warsaw Convention denies to the carrier
availment of the provisions which exclude or limit
his liability, if the damage is caused by his wilful
misconduct or by such default on his part as, in
accordance with the law of the court seized of the
case, is considered to be equivalent to wilful
misconduct,' or If the damage is (similarly)
caused x x x by any agent of the carrier acting
within the scope of his employment.'
Under domestic law and Jurisprudence (the
Philippines being the country of destination), the
attendance of gross negligence (given the
equivalent of fraud or bad faith) holds the
common carrier liable for all damages which can
be reasonably attributed, although unforeseen, to
the non-performance of the obligation, including
moral and exemplary damages.