Designer Baskets vs Air Sea Transport

Facts:
DBI is a domestic corporation engaged in the production of housewares and handicraft
items for export. On October 1995, Ambiente, a foreign-based company, ordered from DBI
223 cartons of assorted wooden items it was worth US$12,590.87 and payable through
telegraphic transfer. Ambiente designated Asia Cargo Container Lines, Inc. as the
forwarding agent that will ship out its order from the Philippines to the United States (US).
ACCLI is a domestic corporation acting as agent of Air Sea Transport, Inc., a US based
corporation engaged in carrier transport business, in the Philippines.
On January 7, 1996, DBI delivered the shipment to ACCLI for sea transport from Manila
and delivery to Ambiente at 8306 Wilshire Blvd., Suite 1239, Beverly Hills, California. To
acknowledge receipt and to serve as the contract of sea carriage, ACCLI issued to DBI
triplicate copies of ASTI Bill of Lading No. AC/MLLA601317. DBI retained possession of
the originals of the bills of lading pending the payment of the goods by Ambiente.
On January 23, 1996, Ambiente and ASTI entered into an Indemnity Agreement. Under
the Agreement, Ambiente obligated ASTI to deliver the shipment to it or to its order
without the surrender of the relevant bill(s) of lading due to the non-arrival or loss
thereof. In exchange, Ambiente undertook to indemnify and hold ASTI and its agent free
from any liability as a result of the release of the shipment. ASTI released the shipment to
Ambiente without the knowledge of DBI, and without it receiving payment for the total cost
of the shipment.
DBI then made several demands to Ambiente for the payment of the shipment, but to no
avail. DBI filed the Original Complaint for the payment of the value of the shipment in the
amount of US$12,590.87 (333,658.00).
The trial court found ASTI, ACCLI, and Ambiente solidarily liable to DBI for the value of the
shipment.
Issue: W/N ASTI and ACCLI are liable for non-presentment of the bill of lading
Held: A common carrier may release the goods to the consignee even without the
surrender of the bill of lading.
ACCLI, as agent of ASTI, issued Bill of Lading No. AC/MLLA601317 to DBI. This bill of
lading governs the rights, obligations and liabilities of DBI and ASTI. The language of the
bill of lading shows no requirement that the bill of lading must be presented. What the bill
of lading provides
If required by the Carrier this Bill of Lading duly endorsed must be surrendered in
exchange for the Goods of delivery order

There is no obligation, therefore, on the part of ASTI and ACCLI to release the goods only
upon the surrender of the original bill of lading.
A carrier is allowed by law to release the goods to the consignee even without the latters
surrender of the bill of lading.
General rule is that upon receipt of the goods, the consignee surrenders the bill of lading
to the carrier and their respective obligations are considered canceled. There are two
exceptions where the goods may be released without the surrender of the bill of lading
because the consignee can no longer return it. These exceptions are when the bill of
lading gets lost or for other cause. In either case, the consignee must issue a receipt to
the carrier upon the release of the goods. Such receipt shall produce the same effect as
the surrender of the bill of lading.
The non-surrender of the original bill of lading does not violate the carriers duty of
extraordinary diligence over the goods. the carrier exercised extraordinary diligence when
it released the shipment to the consignee, not upon the surrender of the original bill of
lading, but upon signing the delivery receipts and surrender of the certified true copies of
the bills of lading. Thus, we held that the surrender of the original bill of lading is not a
condition precedent for a common carrier to be discharged of its contractual obligation.
The surrender of the original bill of lading is not absolute; that in case of loss or any other
cause, a common carrier may release the goods to the consignee even without it.
In case the consignee, upon receiving the goods, cannot return the bill of lading
subscribed by the carrier, because of its loss or any other cause, he must give the latter a
receipt for the goods delivered, this receipt producing the same effects as the return of the
bill of lading. (Art 353 (3) of Code of Commerce)
Lhuillier vs British Airways
On February 28, 2005, she took respondents flight 548 from London, United Kingdom to
Rome, Italy. Once on board, she allegedly requested Julian Halliday (Halliday), one of the
respondents flight attendants, to assist her in placing her hand-carried luggage in the
overhead bin. However, Halliday allegedly refused to help and assist her, and even
sarcastically remarked that "If I were to help all 300 passengers in this flight, I would have
a broken back!"
Petitioner further alleged that when the plane was about to land in Rome, Italy, another
flight attendant, Nickolas Kerrigan (Kerrigan), singled her out from among all the
passengers in the business class section to lecture on plane safety. Allegedly, Kerrigan
made her appear to the other passengers to be ignorant, uneducated, stupid, and in need
of lecturing on the safety rules and regulations of the plane. Affronted, petitioner assured
Kerrigan that she knew the planes safety regulations being a frequent traveler.

Thereupon, Kerrigan allegedly thrust his face a mere few centimeters away from that of
the petitioner and menacingly told her that "We dont like your attitude."
Upon arrival in Rome, petitioner complained to respondents ground manager and
demanded an apology. However, the latter declared that the flight stewards were "only
doing their job."
Thus, petitioner filed the complaint for damages. The trial court dismissed the case for
lack of jurisdiction.
Issue: WHETHER PHILIPPINE COURTS HAVE JURISDICTION OVER A TORTIOUS
CONDUCT COMMITTED AGAINST A FILIPINO CITIZEN AND RESIDENT BY AIRLINE
PERSONNEL OF A FOREIGN CARRIER TRAVELLING BEYOND THE TERRITORIAL
LIMIT OF ANY FOREIGN COUNTRY; AND THUS IS OUTSIDE THE AMBIT OF THE
WARSAW CONVENTION.
Held:

In this case, it is not disputed that respondent is a British corporation domiciled in London,
United Kingdom with London as its principal place of business. Hence, under the first and
second jurisdictional rules, the petitioner may bring her case before the courts of London
in the United Kingdom. In the passenger ticket and baggage check presented by both the
petitioner and respondent, it appears that the ticket was issued in Rome, Italy.
Consequently, under the third jurisdictional rule, the petitioner has the option to bring her
case before the courts of Rome in Italy. Finally, both the petitioner and respondent aver
that the place of destination is Rome, Italy, which is properly designated given the routing
presented in the said passenger ticket and baggage check. Accordingly, petitioner may
bring her action before the courts of Rome, Italy. We thus find that the RTC of Makati
correctly ruled that it does not have jurisdiction over the case filed by the petitioner.
Tortious conduct as ground for the petitioners complaint is within the purview of the
Warsaw Convesntion.
PAL vs Savillo
Facts:

When the place of departure and the place of destination in a contract of carriage are
situated within the territories of two High Contracting Parties, said carriage is deemed an
"international carriage". The High Contracting Parties referred to herein were the
signatories to the Warsaw Convention and those which subsequently adhered to it.
In the case at bench, petitioners place of departure was London, United Kingdom while
her place of destination was Rome, Italy. Both UK and Italy signed and ratified the Warsaw
Convention. As such, the transport of the petitioner is deemed to be an "international
carriage" within the contemplation of the Warsaw Convention.
Since the Warsaw Convention applies in the instant case, then the jurisdiction over the
subject matter of the action is governed by the provisions of the Warsaw Convention.
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for
damages before
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract has
been made; or
4. the court of the place of destination.

Simplicio Grio was invited to participate in the 1993 ASEAN Seniors Annual Golf
Tournament held in Jakarta, Indonesia. He and several companions decided to purchase
their respective passenger tickets from PAL with the following points of passage: MANILASINGAPORE-JAKARTA-SINGAPORE-MNL. Private respondent and his companions were
made to understand by PAL that its plane would take them from Manila to Singapore,
while Singapore Airlines would take them from Singapore to Jakarta.
On 3 October 1993, private respondent and his companions took the PAL flight to
Singapore and arrived at about 6:00 oclock in the evening. Upon their arrival, they
proceeded to the Singapore Airlines office to check-in for their flight to Jakarta scheduled
at 8:00 oclock in the same evening. Singapore Airlines rejected the tickets of private
respondent and his group because they were not endorsed by PAL. It was explained to
private respondent and his group that if Singapore Airlines honored the tickets without
PALs endorsement, PAL would not pay Singapore Airlines for their passage. Private
respondent tried to contact PALs office at the airport, only to find out that it was closed.
Stranded at the airport in Singapore and left with no recourse. Private respondent and his
companions were forced to purchase tickets from Garuda Airlines and board its last flight
bound for Jakarta. When they arrived in Jakarta at about 12:00 oclock midnight, the party
who was supposed to fetch them from the airport had already left and they had to arrange
for their transportation to the hotel at a very late hour. After the series of nerve-wracking
experiences, private respondent became ill and was unable to participate in the
tournament.

Upon his return to the Philippines, private respondent brought the matter to the attention
of PAL. He sent a demand letter to PAL on 20 December 1993 and another to Singapore
Airlines. On 15 August 1997, private respondent filed a Complaint for Damages. Trial court
and CA both dismissed PALs case.
Issue: THE COURT OF APPEALS ERRED IN NOT APPLYING THE PROVISIONS OF
THE WARSAW CONVENTION DESPITE THE FACT THAT GRIOS CAUSE OF ACTION
AROSE FROM A BREACH OF CONTRACT FOR INTERNATIONAL AIR TRANSPORT.
Held:
The cardinal purpose of the Warsaw Convention is to provide uniformity of rules governing
claims arising from international air travel; thus, it precludes a passenger from maintaining
an action for personal injury damages under local law when his or her claim does not
satisfy the conditions of liability under the Convention.
In the Petition at bar, private respondents Complaint alleged that both PAL and Singapore
Airlines were guilty of gross negligence, which resulted in his being subjected to
"humiliation, embarrassment, mental anguish, serious anxiety, fear and distress." The
emotional harm suffered by the private respondent as a result of having been
unreasonably and unjustly prevented from boarding the plane should be distinguished
from the actual damages which resulted from the same incident. Under the Civil Code
provisions on tort, such emotional harm gives rise to compensation where gross
negligence or malice is proven.
The present case involves a special species of injury resulting from the failure of PAL
and/or Singapore Airlines to transport private respondent from Singapore to Jakarta the
profound distress, fear, anxiety and humiliation that private respondent experienced when,
despite PALs earlier assurance that Singapore Airlines confirmed his passage, he was
prevented from boarding the plane and he faced the daunting possibility that he would be
stranded in Singapore Airport because the PAL office was already closed.
Singapore Airlines barred private respondent from boarding the Singapore Airlines flight
because PAL allegedly failed to endorse the tickets of private respondent and his
companions, despite PALs assurances to respondent that Singapore Airlines had already
confirmed their passage. While this fact still needs to be heard and established by
adequate proof before the RTC, an action based on these allegations will not fall under
the Warsaw Convention, since the purported negligence on the part of PAL did not occur
during the performance of the contract of carriage but days before the scheduled flight.
Thus, the present action cannot be dismissed based on the statute of limitations provided
under Article 29 of the Warsaw Convention.
Ong Yiu vs CA

On August 26, 1967, Agustino Ong Yiu petitioner was a fare paying passenger of
respondent Philippine Air Lines, Inc. (PAL), on board Flight No. 463-R, from Mactan Cebu,
bound for Butuan City. He was scheduled to attend the trial of Civil Case No. 1005 and
Spec. Procs. No. 1125 in the Court of First Instance, set for hearing on August 28-31,
1967. As a passenger, he checked in one piece of luggage, a blue "maleta" for which he
was issued Claim Check No. 2106-R.
The plane left Mactan Airport, Cebu, at about 1:00 o'clock P.M., and arrived at Bancasi
airport, Butuan City, at past 2:00 o'clock P.M., of the same day. Upon arrival, petitioner
claimed his luggage but it could not be found. According to petitioner, it was only after
reacting indignantly to the loss that the matter was attended to by the porter clerk, Maximo
Gomez.
At about 3:00 o'clock P.M., PAL Butuan, sent a message to PAL, Cebu, inquiring about the
missing luggage, which message was, in turn relayed in full to the Mactan Airport teletype
operator at 3:45 P.M.
PAL Manila wired PAL Cebu advising that the luggage had been over carried to Manila
aboard Flight No. 156 and that it would be forwarded to Cebu on Flight No. 345 of the
same day. Instructions were also given that the luggage be immediately forwarded to
Butuan City on the first available flight. At 5:00 P.M. of the same afternoon, PAL Cebu sent
a message to PAL Butuan that the luggage would be forwarded on Fright No. 963 the
following day, August 27, 196'(. However, this message was not received by PAL Butuan
as all the personnel had already left since there were no more incoming flights that
afternoon. Petitioner was worried about the missing luggage because it contained vital
documents needed for trial the next day. At 10:00 o'clock that evening, petitioner wired
PAL Cebu demanding the delivery of his baggage before noon the next day, otherwise, he
would hold PAL liable for damages, and stating that PAL's gross negligence had caused
him undue inconvenience, worry, anxiety and extreme embarrassment. This telegram was
received by the Cebu PAL supervisor but the latter felt no need to wire petitioner that his
luggage had already been forwarded on the assumption that by the time the message
reached Butuan City, the luggage would have arrived.
August 27, 1967, petitioner went to the Bancasi Airport to inquire about his luggage. He
did not wait, however, for the morning flight which arrived at 10:00 o'clock that morning.
This flight carried the missing luggage. The porter clerk, Maximo Gomez, paged petitioner,
but the latter had already left. A certain Emilio Dagorro a driver of a "colorum" car, who
also used to drive for petitioner, volunteered to take the luggage to petitioner. As Maximo
Gomez knew Dagorro to be the same driver used by petitioner whenever the latter was in
Butuan City, Gomez took the luggage and placed it on the counter. Dagorro examined the
lock, pressed it, and it opened. After calling the attention of Maximo Gomez, the "maleta"
was opened, Gomez took a look at its contents, but did not touch them. Dagorro then
delivered the "maleta" to petitioner, with the information that the lock was open. Upon

inspection, petitioner found that a folder containing certain exhibits, transcripts and private
documents in Civil Case No. 1005 and Sp. Procs. No. 1126 were missing, aside from two
gift items for his parents-in-law. Petitioner refused to accept the luggage. Dagorro returned
it to the porter clerk, Maximo Gomez, who sealed it and forwarded the same to PAL Cebu
Petitioner asked for postponement of the hearing of Civil Case No. 1005 due to loss of his
documents, which was granted by the Court
Petitioner filed a Complaint against PAL for damages for breach of contract of
transportation with the Court of First Instance of Cebu. The trial court found PAL to have
acted in bad faith and with malice and declared petitioner to damages

Issue: Whether or not the limited liability clause in the bill of lading is valid.
Held:

CA held that PAL was guilty only of simple negligence

Issue: W/N THE HONORABLE CA ERRED IN HOLDING RESPONDENT PAL GUILTY
ONLY OF SIMPLE NEGLIGENCE AND NOT BAD FAITH IN THE BREACH OF ITS
CONTRACT OF TRANSPORTATION WITH PETITIONER
Held: We agree with respondent Court that PAL had not acted in bad faith. Bad faith
means a breach of a known duty through some motive of interest or ill will. It was the duty
of PAL to look for petitioner's luggage which had been miscarried. PAL exerted due
diligence in complying with such duty. PAL has exerted diligent effort to locate plaintiff's
baggage. The trial court saw evidence of bad faith because PAL sent the telegraphic
message to Mactan only at 3:00 o'clock that same afternoon, despite plaintiff's indignation
for the non-arrival of his baggage. The message was sent within less than one hour after
plaintiff's luggage could not be located. Efforts had to be exerted to locate plaintiff's
maleta. Then the Bancasi airport had to attend to other incoming passengers and to the
outgoing passengers. Certainly, no evidence of bad faith can be inferred from these facts.
Cebu office immediately wired Manila inquiring about the missing baggage of the plaintiff.
At 3:59 P.M., Manila station agent at the domestic airport wired Cebu that the baggage
was over carried to Manila. And this message was received in Cebu one minute thereafter,
or at 4:00 P.M. The baggage was in fact sent back to Cebu City that same afternoon.
Everett Steamship Corporation vs. CA and Hernandez Trading Co. Inc.
Facts:
Private respondent imported three crates of bus spare parts, from its supplier,
Maruman Trading, a foreign corporation based in Aichi, Japan. The crates were
shipped from Nagoya, Japan to Manila on board a vessel owned by petitioners
principal, Everett Orient Lines. The said crates were covered by Bill of Lading.
Upon arrival at the port of Manila, it was discovered that the crate marked
MARCO C/No. 14 was missing. Private respondent, which thereafter made a
formal claim upon petitioner for the value of the lost cargo amounting to
Y1,552,500.00 Yen. However, petitioner offered to pay only One Hundred

Thousand (Y100,000.00) Yen, the maximum amount stipulated under the bill of
lading which limits the liability of petitioner.
Respondent rejected the offer and thereafter instituted a suit for collection
docketed to the RTC. RTC and CA rendered judgment in favour of respondent.
Hence this petition.

Yes. ART. 1749. A stipulation that the common carriers liability is limited to the
value of the goods appearing in the bill of lading, unless the shipper or owner
declares a greater value, is binding.
ART. 1750. 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 freely and fairly
agreed upon.
That said stipulation is just and reasonable is arguable from the fact that it
echoes Art. 1750 itself in providing a limit to liability only if a greater value is not
declared for the shipment in the bill of lading.
Pursuant to the afore-quoted provisions of law, it is required that the stipulation
limiting the common carriers liability for loss must be reasonable and just under
the circumstances, and has been freely and fairly agreed upon.
However, the shipper, Maruman Trading, 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.

Alitalia vs. IAC

Facts:

Dr. Felipa Pablo is an associate professor in UP, and was invited to take part
at a meeting of the Department of Research and Isotopes of the Joint FAO-IAEA
Division of Atomic Energy in Food and Agriculture of the United Nations in Ispra,
Italy. To fulfill this engagement, Dr. Pablo booked passage on petitioner airline,
ALITALIA.

She arrived in Milan on the day before the meeting in accordance with the
itinerary. She was however told by the ALITALIA personnel there at Milan that her
luggage was "delayed inasmuch as the same . . . was in one of the
succeeding flights from Rome to Milan. Her luggage consisted of two (2)
suitcases: one contained her clothing and other personal items; the other, her
scientific papers, slides and other research material. But the other flights arriving
from Rome did not have her baggage on board.
By then feeling desperate, she went to Rome to try to locate her bags herself.
There, she inquired about her suitcases in the domestic and international
airports. However, her baggage could not be found. Completely distraught
and discouraged, she returned to Manila without attending the meeting in
Ispra, Italy. :
Back in Manila, she instituted an action demanding that ALITALIA make
reparation for the damages thus suffered by her.

Issue: W/N the Warsaw Convention should be applied thus limiting Alitalias liability.
Held:

No. Under the Warsaw Convention, an air carrier is made liable for damages
for:

1) the death, wounding or other bodily injury of a passenger if the accident causing it took
place on board the aircraft or in the course of its operations of embarking or disembarking;
2) 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
3) Delay in the transportation by air of passengers, luggage or good

The Convention also purports to limit the liability of the carriers in different
manners. Warsaw Convention however 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.

The Convention does not thus operate as an exclusive enumeration of the

instances of an airline's liability, or as an absolute limit of the extent of that
liability.
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 wilful
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. The fact is, nevertheless, that some special species of injury was
caused to Dr. Pablo because petitioner ALITALIA misplaced her baggage and
failed to deliver it to her at the time appointed a breach of its contract of
carriage, to be sure with the result that she was unable to read the paper and
make the scientific presentation in Italy.
Dr. Pablo also underwent profound distress and anxiety, which gradually turned
to panic and finally despair; from the time she learned that her suitcases were
missing up to the time when, having gone to Rome, she finally realized that she
would no longer be able to take part in the conference. As she herself put it, she
"was really shocked and distraught and confused."

Santos vs Northwest Orient

Petitioner Augusto Santos III is a minor and a resident of the Philippines. Private
respondent Northwest Orient Airlines (NOA) is a foreign corporation with principal office in
Minnesota, U.S.A. and licensed to do business and maintain a branch office in the
Philippines.

On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San
Francisco. U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The
scheduled departure date from Tokyo was December 20, 1986. No date was specified for
his return to San Francisco.
On December 19, 1986, the petitioner checked in at the NOA counter in the San Francisco
airport for his scheduled departure to Manila. Despite a previous confirmation and reconfirmation, he was informed that he had no reservation for his flight from Tokyo to
Manila. He therefore had to be wait-listed.
On March 12, 1987, the petitioner sued NOA for damages in the Regional Trial Court of
Makati. On April 13, 1987, NOA moved to dismiss the complaint on the ground of lack of
jurisdiction. Citing Article 28(1) of the Warsaw Convention
Art. 28. (1) An action for damage must be brought at the option of the plaintiff, in the
territory of one of the High Contracting Parties, either before the court of the domicile of
the carrier or of his principal place of business, or where he has a place of business
through which the contract has been made, or before the court at the place of destination.
Issue: W/N Article 28(1) of the Warsaw Convention violates the constitutional guarantees
of due process and equal protection.
Held:
Republic of the Philippines is a party to the Warsaw Convention. It took effect on February
13, 1933. The Convention was concurred in by the Senate, through its Resolution No. 19,
on May 16, 1950. The Philippine instrument of accession was signed by President Elpidio
Quirino on October 13, 1950, and was deposited with the Polish government on
November 9, 1950. The Convention became applicable to the Philippines on February 9,
1951. On September 23, 1955, President Ramon Magsaysay issued Proclamation No.
201, declaring our formal adherence thereto. "to the end that the same and every article
and clause thereof may be observed and fulfilled in good faith by the Republic of the
Philippines and the citizens thereof."
The Convention is thus a treaty commitment voluntarily assumed by the Philippine
government and, as such, has the force and effect of law in this country.
The Warsaw drafters wished to create a system of liability rules that would cover all the
hazards of air travel . . . The Warsaw delegates knew that, in the years to come, civil
aviation would change in ways that they could not foresee. They wished to design a
system of air law that would be both durable and flexible enough to keep pace with these

changes . . . The ever-changing needs of the system of civil aviation can be served within
the framework they created.
where the matter is governed by the Warsaw Convention, jurisdiction takes on a dual
concept. Jurisdiction in the international sense must be established in accordance with
Article 28(1) of the Warsaw Convention, following which the jurisdiction of a particular
court must be established pursuant to the applicable domestic law. Only after the question
of which court has jurisdiction is determined will the issue of venue be taken up. This
second question shall be governed by the law of the court to which the case is submitted.
The place of destination, within the meaning of the Warsaw Convention, is determined by
the terms of the contract of carriage or, specifically in this case, the ticket between the
passenger and the carrier. Examination of the petitioner's ticket shows that his ultimate
destination is San Francisco. Although the date of the return flight was left open, the
contract of carriage between the parties indicates that NOA was bound to transport the
petitioner to San Francisco from Manila. Manila should therefore be considered merely an
agreed
stopping
place
and
not
the
destination.
Article 1(2) also draws a distinction between a "destination" and an "agreed stopping
place." It is the "destination" and not an "agreed stopping place" that controls for purposes
of
ascertaining
jurisdiction
under
the
Convention.
The contract is a single undivided operation, beginning with the place of departure and
ending with the ultimate destination. The use of the singular in this expression indicates
the understanding of the parties to the Convention that every contract of carriage has one
place of departure and one place of destination. An intermediate place where the carriage
may be broken is not regarded as a "place of destination."
China Airlines vs. Chiok
Facts:
Daniel Chiok purchased from China Airlines, Ltd. an airline passenger ticket for air
transportation covering Manila-Taipei-Hongkong-Manila. Said ticket was exclusively
endorsable to Philippine Airlines, Ltd. Before he left for said trip, the trips covered by the
ticket were pre-scheduled and confirmed by Chiok. When Chiok reached Hongkong, he
went to the PAL office and sought to reconfirm his flight back to Manila. The PAL office
confirmed his return trip on board Flight No. PR 311 and attached its own sticker.
On the next day, Chiok proceeded to Hongkong International Airport for his return trip to
Manila. However, upon reaching the PAL counter, Chiok saw a poster stating that PAL
Flight No. PR 311 was cancelled because of a typhoon in Manila. He was then
informed that all the confirmed ticket holders of PAL Flight No. PR 311 was automatically
booked for its next flight, which was to leave the next day. He then informed PAL
personnel that, being the founding director of the Philippine Polysterene Paper
Corporation, he had to reach Manila the following day because of a business option which
he had to execute on said date.

The following day Chiok went to the airport. Carmen Chan, PALs terminal supervisor,
informed Chiok that his name did not appear in PALs computer list of passengers and
therefore could not be permitted to board PAL Flight No. PR 307. Thereafter, Chiok
proceeded to PALs Hongkong office and confronted PALs reservation officer, Carie Chao,
who previously confirmed his flight back to Manila. Chao told Chiok that his name was on
the list and pointed to the latter his computer number listed on the PAL confirmation sticker
attached to his plane ticket, which number was R/MN62. Chiok was not able to return to
Manila on time.
Consequently, Chiok as plaintiff, filed a Complaint for damages, against PAL and CAL,
with the Regional Trial Court Manila. He alleged therein that despite several confirmations
of his flight, PAL refused to accommodate him in Flight No. 307, for which reason he lost
the business option aforementioned. He also alleged that PALs personnel, specifically
Carmen, ridiculed and humiliated him in the presence of so many people.
Issue: Whether CAL is liable for damages.
Held:
Yes. It is significant to note that the contract of air transportation was between petitioner
and respondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of
the journey. Such contract of carriage has always been treated in this jurisdiction as a
single operation. Article 1, Section 3 of the Warsaw Convention states:
Transportation to be performed by several successive air carriers shall be deemed, for
the purposes of this Convention, to be one undivided transportation, if it has been
regarded by the parties as a single operation, whether it has been agreed upon under the
form of a single contract or of a series of contract.

In the same way that we ruled against British Airways and Lufthansa in the
aforementioned cases, we also rule that CAL cannot evade liability to
respondent, even though it may have been only a ticket issuer for the Hong
Kong-Manila sector.

Moral damages cannot be awarded in breaches of carriage contracts, except in

the two instances contemplated in Articles 1764 and 2220 of the Civil Code,
which we quote:

Article 2220 - Willful injury to property may be a legal ground for awarding moral damages
if the court should find that, under the circumstances, such damages are justly due. The
same rule applies to breaches of contract where the defendant acted fraudulently or in
bad faith.

There is no occasion for us to invoke Article 1764 here. We must therefore

determine if CAL or its agent (PAL) is guilty of bad faith that would entitle
respondent to moral damages.

The records amply establish that Chiok secured repeated confirmations on

November 24, 1981. Hence, he had every reason to expect that he would be put
on the replacement flight as a confirmed passenger. Instead, he was harangued

and prevented from boarding the original and the replacement flights. Thus, PAL
breached its duty to transport him. After he had been directed to pay the
terminal fee, his pieces of luggage were removed from the weighing-in counter
despite his protestations.
It is relevant to point out that the employees of PAL were utterly insensitive to his
need to be in Manila, and to the likelihood that his business affairs in the city
would be jeopardized because of a mistake on their part. It was that mistake that
had caused the omission of his name from the passenger list despite his
confirmed flight ticket. By merely looking at his ticket and validation sticker, it is
evident that the glitch was the airlines fault. However, no serious attempt was
made by PAL to secure the all-important transportation of respondent to Manila
on the following day. To make matters worse, PAL allowed a group of nonrevenue passengers, who had no confirmed tickets or reservations, to board
Flight PR 307.
The acts of PALs employees, particularly Chan, clearly fell short of the
extraordinary standard of care that the law requires of common carriers.

United Airlines vs Uy
Facts: October 13, 1989 Respondent Willie Uy is a passenger of petitioner United
Airlines, bound from San Francisco to Manila. While in San Francisco, it was found that
one piece of his luggage was over the maximum weight allowance of 70 kg. per bag. A
United Airlines employee rebuked him and in a loud voice, in front of the milling crowd,
ordered him to repack his things accordingly. Wishing not to create a scene, Willie did as
asked. Unfortunately, his luggage was still overweight so the airline billed him overweight
charges. Willie offered to pay the charges with a Miscellaneous Charge Order (MCO) or
an airline pre-paid credit but the same employee, and an airline supervisor, refused to
honor it, contending that there were discrepancies in the figures. Thus, Willie was forced
to pay the charges with his American Express credit card. Upon arrival in Manila, Willie
discovered that one of his bags had been slashed and its contents, amounting to
US$5,310.00, stolen.
October 16, 1989 he sent his first letter of demand to United Airlines. The airline did not
refute Willies allegations and mailed a check representing payment of his loss based on
the maximum liability of US$9.70 per pound. Willie, thinking the amount to be grossly
inadequate to compensate him for his losses as well as for the indignities he was
subjected to, sent two more letters to petitioner airline, one dated January 4, 1990 and the
other dated October 28, 1991, demanding out-of-court settlement of P1,000,000.00.
June 9, 1992 Willie filed a complaint for damages before the Philippine courts. He had
two causes of action: (1) the shabby and humiliating treatment he received from
petitioners employees at the San Francisco Airport which caused him extreme
embarrassment and social humiliation; and (2) the slashing of his luggage and the loss of
personal effects amounting to US$5,310.00.

For its part, United Airlines moved to dismiss the complaint on the ground that it was filed
out of time. Under Art. 29 of the Warsaw Convention, the right to damages shall be
extinguished if an action is not brought within 2 years. However, the second paragraph of
the said provision stated that the method of calculating the period of limitation shall be
determined by the law of the court to which the case is submitted. It is Willies position that
our rules on interruption of prescriptive period should apply. When he sent his letters of
demand, the 2-year period was tolled, giving him ample time to file his complaint.
The trial court ordered the dismissal of the case, holding that Art. 29(2) refers not to the
local forums rules in interrupting the prescriptive period but only to the rules of
determining the time in which the action was deemed commenced (meaning filed). Willie
filed his motion for reconsideration of the order of dismissal only on the 14th day. The trial
court denied his motion and 2 days later Willie filed his notice of appeal. United Airlines
this time contended that the notice of appeal was filed beyond the 15-day reglementary
period and should therefore be dismissed. The CA, however, took cognizance of the case
in the interest of justice and ruled in favour of respondent. Hence, this petition for
certiorari.
ISSUE: Whether or not the action for damages is barred by the lapse of the 2-year
prescriptive period under Art. 29 of the Warsaw Convention
Held
Supreme Court held that although the 2-year prescriptive period under the Warsaw
Convention has lapsed, it did not preclude the application of other pertinent provisions of
the Civil Code. Thus, the action for damages could still be filed based on tort which can be
filed within 4 years from the time cause of action accrued. As for the action pertaining to
the loss of the contents of the luggage, while it was well within the bounds of the Warsaw
Convention, the Supreme Court found that there was an exception to the applicability of
the 2-year prescriptive period that is when the airline employed delaying tactics and
gave the passenger the run-around.
Applicability of the Warsaw Convention: Courts have discretion whether to apply them or
not
Within our jurisdiction we have held that the Warsaw Convention can be applied, or
ignored, depending on the peculiar facts presented by each case. Thus, we have ruled
that the Convention's provisions do not regulate or exclude liability for other breaches of
contract by the carrier or misconduct of its officers and employees, or for some particular
or exceptional type of damage. Neither may the Convention be invoked to justify the
disregard of some extraordinary sort of damage resulting to a passenger and preclude
recovery therefor beyond the limits set by said Convention. Likewise, we have held that
the Convention does not 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 willful misconduct
on the part of the carrier's employees is found or established.
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 amounting to US
$5,310.00.
While his second cause of action - an action for damages arising from theft or damage to
property or goods - is well within the bounds of the Warsaw Convention, his first cause of
action -an action for damages arising from the misconduct of the airline employees and
the violation of respondent's rights as passenger - clearly is not.
Action for damages arising from the misconduct of the airline employees and the violation
of the respondents rights as passengers is covered under the Civil Code
Consequently, 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 an action based on
torts.
Exception to the Application of the 2-year prescriptive period: When airline employed
delaying tactics
As for respondent's second cause of action, indeed the travaux preparatories of the
Warsaw Convention reveal that the delegates thereto intended the two (2)-year limitation
incorporated in Art. 29 as an absolute bar to suit and not to be made subject to the various
tolling provisions of the laws of the forum. This therefore forecloses the application of our
own rules on interruption of prescriptive periods. Article 29, par. (2), was intended only to
let local laws determine whether an action had been commenced within the two (2)-year
period, and within our jurisdiction an action shall be deemed commenced upon the filing of
a complaint. Since it is indisputable that respondent filed the present action beyond the
two (2)-year time frame his second cause of action must be barred. Nonetheless, it
cannot be doubted that respondent exerted efforts to immediately convey his loss to
petitioner, even employed the services of two (2) lawyers to follow up his claims, and that
the filing of the action itself was delayed because of petitioner's evasion.
Verily, 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 runaround, answering his letters but not giving in to his

demands. True, respondent should have already filed an action at the first instance when
his claims were denied by petitioner but the same could only be due to his desire to make
an out-of-court settlement for which he cannot be faulted. Hence, despite the express
mandate of Art. 29 of the Warsaw Convention that an action for damages should be filed
within two (2) years from the arrival at the place of destination, such rule shall not be
applied in the instant case because of the delaying tactics employed by petitioner airline
itself. Thus, private respondent's second cause of action cannot be considered as timebarred under Art. 29 of the Warsaw Convention.
Keng Hua Papers vs CA
Facts:
SEA-LAND SERVICE, INC , a shipping company, is a foreign corporation licensed to do
business in the Philippines. On June 29, 1982, plaintiff received at its Hong Kong terminal
a sealed container, containing seventy-six bales of unsorted waste paper for shipment to
defendant (herein petitioner), Keng Hua Paper Products, Co. in Manila. A bill of lading to
cover the shipment was issued by the plaintiff.
On July 9, 1982, the shipment was discharged at the Manila International Container
Port. Notices of arrival were transmitted to the defendant but the latter failed to discharge
the shipment from the container during the free time period or grace period. The said
shipment remained inside the plaintiffs container from the moment the free time period
expired on July 29, 1982 until the time when the shipment was unloaded from the
container on November 22, 1983, or a total of four hundred eighty-one (481) days. During
the 481-day period, demurrage charges accrued. Within the same period, letters
demanding payment were sent by the plaintiff to the defendant who, however, refused to
settle its obligation which eventually amounted to P67,340.00. Numerous demands were
made on the defendant but the obligation remained unpaid. Plaintiff thereafter
commenced this civil action for collection and damages.
In its answer, defendant, by way of special and affirmative defense, alleged that it
purchased fifty (50) tons of waste paper from the shipper in Hong Kong, Ho Kee Waste
Paper, as manifested in Letter of Credit No. 824858 issued by Equitable Banking
Corporation, with partial shipment permitted; that under the letter of credit, the remaining
balance of the shipment was only ten (10) metric tons as shown in Invoice No. H-15/82;
that the shipment plaintiff was asking defendant to accept was twenty (20) metric tons
which is ten (10) metric tons more than the remaining balance; that if defendant were to
accept the shipment, it would be violating Central Bank rules and regulations and custom
and tariff laws; that plaintiff had no cause of action against the defendant because the
latter did not hire the former to carry the merchandise; that the cause of action should be
against the shipper which contracted the plaintiffs services and not against defendant; and

that the defendant duly notified the plaintiff about the wrong shipment through a letter
dated January 24, 1983.

Sea Land vs IAC

Facts:

As previously mentioned, the RTC found petitioner liable for demurrage, attorneys fees
and expenses of litigation. CA also affirmed in toto.
Issue: Whether petitioner was bound by the bill of lading
Held:
In the case at bar, both lower courts held that the bill of lading was a valid and perfected
contract between the shipper (Ho Kee), the consignee (Petitioner Keng Hua), and the
carrier (Private Respondent Sea-Land). Section 17 of the bill of lading provided that the
shipper and the consignee were liable for the payment of demurrage charges for the
failure to discharge the containerized shipment beyond the grace period allowed by tariff
rules. Applying said stipulation, both lower courts found petitioner liable.
In the instant case, (herein petitioner) cannot and did not allege non-receipt of its copy of
the bill of lading from the shipper. Hence, the terms and conditions as well as the various
entries contained therein were brought to its knowledge. (Herein petitioner) accepted the
bill of lading without interposing any objection as to its contents. This raises the
presumption that (herein petitioner) agreed to the entries and stipulations imposed therein.
Moreover, it is puzzling that (herein petitioner) allowed months to pass, six (6) months to
be exact, before notifying (herein private respondent) of the wrong shipment. It was only
on January 24, 1983 that (herein petitioner) sent (herein private respondent) such a letter
of notification (Exh D for plaintiff, Exh. 4 for defendant; p. 5, Folder of Exhibits). Thus, for
the duration of those six months (herein private respondent never knew the reason for
(herein petitioners) refusal to discharge the shipment.

On or about January 8, 1981, Sea-Land Service, Inc. (Sea-Land), a foreign shipping and
forwarding company licensed to do business in the Philippines, received from Seaborne
Trading Company in Oakland, California a shipment consigned to Sen Hiap Hing the
business name used by Paulino Cue in the wholesale and retail trade which he operated
out of an establishment located on Borromeo and Plaridel Streets, Cebu City.
The shipper not having declared the value of the shipment, no value was indicated in the
bill of lading. The shipment was loaded on board the MS Patriot, a vessel owned and
operated by Sea-Land, for discharge at the Port Of Cebu. The shipment arrived in Manila
on February 12, 1981, and there discharged in Container No. 310996 into the custody of
the arrastre contractor and the customs and port authorities. Sometime between February
13 and 16, 1981, after the shipment had been transferred, along with other cargoes to
Container No. 40158 near Warehouse 3 at Pier 3 in South Harbor, Manila, awaiting transshipment to Cebu, it was stolen by pilferers and has never been recovered.
On March 10, 1981, Paulino Cue, the consignee, made formal claim upon Sea-Land for
the value of the lost shipment allegedly amounting to P179,643.48. Sea-Land offered to
settle for US$4,000.00 (Php 30 K). Cue rejected the offer and thereafter brought suit for
damages against Sea-Land in the then CFI of Cebu. Said Court, after trial, rendered
judgment in favor of Cue.
Issue: Whether or not the consignee of seaborne freight is bound by stipulations in the
covering bill of lading limiting to a fixed amount the liability of the carrier for loss or
damage to the cargo where its value is not declared in the bill.
Held:

After accepting the bill of lading, receiving notices of arrival of the shipment, failing to
object thereto, (herein petitioner) cannot now deny that it is bound by the terms in the bill
of lading. If it did not intend to be bound, (herein petitioner) would not have waited for six
months to lapse before finally bringing the matter to (herein private respondents
attention.The most logical reaction in such a case would be to immediately verify the
matter with the other parties involved. In this case, however, (herein petitioner)
unreasonably detained (herein private respondents) vessel to the latters prejudice.
the prolonged failure of petitioner to receive and discharge the cargo from the private
respondents vessel constitutes a violation of the terms of the bill of lading. It should thus
be liable for demurrage to the former.

Yes. There is no question of the right of a consignee in a bill of lading to recover from the
carrier or shipper for loss of, or damage to, goods being transported under said bill,
although that document may have been drawn up only by the consignor and the carrier
without the intervention of the consignee.
Since the liability of a common carrier for loss of or damage to goods transported by it
under a contract of 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
Sea-Land has Cue is governed primarily by the Civil Code, and as ordained by the said
Code, supplementary, in all matters not cluttered thereby, by the Code of Commerce and
special laws. One of these supplementary special laws is the Carriage of goods by Sea

Act (COGSA), made applicable to all contracts for the carriage by sea to and from the
Philippines Ports in Foreign Trade by Comm. Act. 65. Even if Section 4(5) of COGSA did
not list the validity and binding effect of the liability limitation clause in the bill of lading
here are fully substantial on the basis alone of Article 1749 and 1750 of the Civil Code.
The justices of such stipulation is implicit in its giving the owner or shipper the option of
avoiding accrual of liability limitation by the simple expedient of declaring the value of the
shipment in the bill of lading. The stipulation in the bill of lading limiting the liability of SeaLand for loss or damages to the shipment covered by said rule to US$500 per package
unless the shipper declares the value of the shipment and pays additional charges is valid
and binding on Cue
Philamgen Insurance vs Sweetlines
Facts:
A total 7,000 bags of low density polyethylene (600 bags of polyethylene 641 and 6,400
bags of polyethylene 647) were shipped from Baton Rouge, LA to Manila on board SS
Vishva Yash, a vessel belonging to the Shipping Corporation of India (SCI). From Manila,
the cargoes were shipped to Davao on board MV Sweet Love, a vessel owned by Sweet
Lines. The consignee was Far East Bank with arrival notice to Tagum Plastics, Inc.,
Tagum, Davao City. The cargoes were insured by Far East Bank with the Philippine
American General Insurance Co (Philamgen) and were covered by bills of lading which
contained the following stipulation in paragraph 5:
Claims for shortage, damage, must be made at the time of delivery to
consignee or agent, if container shows exterior signs of damage or
shortage. Claims for non-delivery, misdelivery, loss or damage
must be filed within 30 days from accrual. Suits arising from
shortage, damage or loss, non-delivery or misdelivery shall be
instituted within 60 days from date of accrual of right of action.
Failure to file claims or institute judicial proceedings as herein provided
constitutes waiver of claim or right of action. In no case shall carrier be
liable for any delay, non-delivery, misdelivery, loss of damage to cargo
while cargo is not in actual custody of carrier.
On May 15, 1977, the shipment(s) were discharged from the interisland carrier into the
custody of the consignee. A survey conducted on July 8, 1977 showed that of the
shipment totalling 7,000 bags, originally contained in 175 pallets, only a total of 5,820
bags were delivered to the consignee in good order condition, leaving a balance of 1,080
bags. Some of the 1,080 bags were either MISSING OR DAMAGED beyond the point of
being useful for the intended purpose.
FEBTC and Tagum Plastics sued the international carrier, SCI, the inter-island carriers,
Sweet Lines, the arrastre company, Davao Arrastre and FE Zuellig (which I assume is the
shipper). Before trial, a compromise agreement was entered into between the
complainants and SCI and F.E. Zuellig, thus, only Sweet Lines and Davao Arrastre
remained as defendants.

The trial court ruled in favour of Philamgen and Tagum Plastics. The CA reversed on the
ground of prescription and denied the motion for reconsideration.
Issues
(1) Was there a prescriptive period?
(2) If yes, was the prescriptive period valid and legal?
(3) If it was valid and legal, did Philamgen act within the prescriptive period?
Held
(1) Yes. There was a prescriptive period. When the complaint was filed, prescription as
an affirmative defense was seasonably raised by Sweet Lines in its answer. Though
the bills of lading were not presented in evidence, the SC said that: As petitioners are
suing upon SLI's contractual obligation under the contract of carriage as contained in the
bills of lading, such bills of lading can be categorized as actionable documents which
under the Rules must be properly pleaded either as causes of action or defenses, and
the genuineness and due execution of which are deemed admitted unless
specifically denied under oath by the adverse party. The rules on actionable
documents cover and apply to both a cause of action or defense based on said
documents. In their answer, Sweet Lines included the prescriptive period under
paragraph 5 of the bills of lading. Philamgen did not deny the existence of the bill of lading
under oath. Instead, in its reply to the answer, Philamgen asserted that the bills of lading
were contracts of adhesion and that such provisions were contrary to law and public
policy and thus, Sweet Lines cannot avail of such prescriptive period as a valid defense.
The SC said that Philamgens failure to deny under oath the existence of the bills of lading
was tantamount to an admission of its existence, together with paragraph 5 containing the
prescriptive period. Thus, the existence of the prescriptive period was duly proved even if
the bills of lading were not presented in court.
(2) Yes. The prescriptive periods were valid and legal. Philamgen insists that the bills of
lading were contracts of adhesion and that the prescriptive periods stated therein were
void for being contrary to law and public policy. The SC, citing Ong Yu vs CA, said that
contracts of adhesion are 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. Philamgen, thus, gave
its consent to the contracts the bills of lading including consent to the prescriptive
periods therein. The SC also agreed with the CA that parties can stipulate a shorter
prescriptive period for the filing of suits. The SC quoted the CA, It must be noted, at this
juncture, that the aforestated time limitation (paragraph 5) in the presentation of claim for
loss or damage, is but a restatement of the rule prescribed under Art. 366 of the
Code of Commerce... The SC said that, ... the validity of a contractual limitation
of time for filing the suit itself against a carrier shorter than the statutory period
therefor has generally been upheld as such stipulation merely affects the shipper's
remedy and does not affect the liability of the carrier. In the absence of any
statutory limitation and subject only to the requirement on the reasonableness of
the stipulated limitation period, the parties to a contract of carriage may fix by agreement a
shorter time for the bringing of suit on a claim for the loss of or damage to the shipment
than that provided by the statute of limitations. Such limitation is not contrary to public
policy for it does not in any way defeat the complete vestiture of the right to recover, but
merely requires the assertion of that right by action at an earlier period than would be
necessary to defeat it through the operation of the ordinary statute of limitations. The SC
also said that, ..., the shortened period for filing suit is not unreasonable and has in fact

been generally recognized to be a valid business practice in the shipping industry. This is
in recognition of the inherent dangers of carriage by sea.
(3) No. Philamgen did not act within the prescriptive period. The shipment was
discharged into the custody of the consignee on May 15, 1977, and it was from this date
that petitioners' cause of action accrued, with thirty (30) days therefrom within which to file
a claim with the carrier for any loss or damage which may have been suffered by the
cargo and thereby perfect their right of action. Claim was filed only on April 28, 1978, way
beyond the period provided in the bills of lading and violative of the contractual provision,
the inevitable consequence of which is the loss of petitioners' remedy or right to
sue. The SC said, Even the filing of the complaint on May 12, 1978 is of no remedial or
practical consequence, since the time limits for the filing thereof, whether viewed as a
condition precedent or as a prescriptive period, would in this case be productive of the
same result, that is, that petitioners had no right of action to begin with or, at any rate, their
claim was time-barred.
Other things discussed by the SC:
1. ...where the contract of shipment contains a reasonable requirement of giving notice of
loss of or injury to the goods, the giving of such notice is a condition precedent to the
action for loss or injury or the right to enforce the carrier's liability. Such requirement
is not an empty formalism. The fundamental reason or purpose of such a stipulation is not
to relieve the carrier from just liability, but reasonably to inform it that the shipment has
been damaged and that it is charged with liability therefor, and to give it an opportunity to
examine the nature and extent of the injury. This protects the carrier by affording it an
opportunity to make an investigation of a claim while the matter is fresh and easily
investigated so as to safeguard itself from false and fraudulent claims.
2. Philamgen also asserted that since the purpose of the notice of claim or loss was to
charge Sweet Lines with actual knowledge of the loss and damage involved, then the
issuance of Sweet Lines of a Report on Losses and Damage dated May 15, 1977,
would obviate the need for or render superfluous the filing of a claim within the stipulated
period. The SC said, The report on losses and damages is not the claim referred to
and required by the bills of lading for it does not fix responsibility for the loss or
damage, but merely states the condition of the goods shipped. The claim contemplated
herein, in whatever form, must be something more than a notice that the goods
have been lost or damaged; it must contain a claim for compensation or indicate an
intent to claim. Furthermore, the report bears an annotation at its lower part that says
this Copy should be submitted together with your claim invoice or receipt within 30 days
from date of issue otherwise your claim will not be honored."
3. The claim against the carrier, Sweet Lines, has prescribed but what about the claim
against Davao Arrastre. The SC said that there was not enough proof to pinpoint the party
responsible for the lost and damaged bags. (What I found surprising was that the SC also
said, Unlike a common carrier, an arrastre operator does not labor under a
presumption of negligence in case of loss, destruction or deterioration of goods
discharged into its custody. In other words, to hold an arrastre operator liable for loss of
and/or damage to goods entrusted to it there must be preponderant evidence that it did
not exercise due diligence in the handling and care of the goods.
DOLE Phil vs Maritime Co of the Philippines

Facts:
The cargo subject of the instant case was discharged in Dadiangas unto the custody of
the consignee, Dole Philippines. The corresponding claim for the damages sustained by
the cargo was filed by the plaintiff with the defendant, Maritime Company on May 4, 1972.
On June 11, 1973 the plaintiff filed a complaint in the CFI Manila embodying 3 causes of
action involving 3 separate and different shipments. The third cause of action therein
involved the cargo now subject of this present litigation.
On December 11, 1974, Judge Serafin Cuevas issued an Order dismissing the first two
causes of action. The third cause of action which covered the cargo subject of this case
now was likewise dismissed but without prejudice as it was not covered by the settlement.
Because of the dismissal of the complaint with respect to the third cause of action, DOLE
instituted this present complaint on January 6, 1975.
Maritime filed an answer pleading inter alia the affirmative defense of prescription under
the provisions of the Carriage of Goods by Sea Act. The Trial Court granted the motion,
scheduling the preliminary hearing on April 27, 1977. The record before the Court does
not show whether or not that hearing was held, but under date of May 6, 1977, Maritime
filed a formal motion to dismiss invoking once more the ground of prescription.
The Trial Court, after due consideration, resolved the matter in favor of Maritime and
dismissed the complaint.
Issue
Whether or not Article 1155 of the Civil Code applies in lieu of the COGSA.
Held
No. Article 1155 of the Civil Code provides that the prescription of actions is interrupted by
the making of an extrajudicial written demand by the creditor Section 3, paragraph 6 of the
COGSA 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; Provided, That, if a notice of loss or damage, either
apparent or conceded, is not given as provided for in this section, that fact shall not affect
or prejudice the right of the shipper to bring suit within one year after the delivery of the
goods or the date when.the goods should have been delivered.
1. Dole argues that since the provisions of the Civil Code are, by express mandate of said
Code, suppletory of deficiencies in the Code of Commerce and special laws in matters
governed by the latter and there being a patent deficiency with respect to the tolling of the
prescriptive period provided for in the Carriage of Goods by Sea Act, prescription under

said Act is subject to the provisions of Article 1155 of the Civil Code on tolling. Since
Dole's claim for loss or damage was filed on May 4, 1972 amounted to a written
extrajudicial demand which would toll or interrupt prescription under Article 1155, it
operated to toll prescription also in actions under the Carriage of Goods by Sea Act.
These arguments might merit weightier consideration were it not for the fact that the
question has already received a definitive answer, adverse to the position taken by Dole,
in The Yek Tong Lin Fire & Marine Insurance Co., Ltd. vs. American President Lines, Inc.
2. Dole argues that it was error for the court not to have considered the action of plaintiffappellant suspended by the extrajudicial demand which took place, according to
defendant's own motion to dismiss on August 22, 1952.
Court noticed that while plaintiff avoids stating any date when the goods arrived in Manila,
it relies upon the allegation made in the motion to dismiss that a protest was filed on
August 22, 1952 which goes to show that plaintiff-appellant's counsel has not been
laying the facts squarely before the court for the consideration of the merits of the case.
We have already decided that in a case governed by the Carriage of Goods by Sea Act,
the general provisions of the Code of Civil Procedure on prescription should not be made
to apply. (Chua Kuy vs. Everett Steamship Corp., G.R. No. L-5554, May 27, 1953.) We
hold that in such a case the general provisions of the new Civil Code (Art. 1155) cannot be
made to apply, as such application would have the effect of extending the one-year period
of prescription fixed in the law. It is desirable that matters affecting transportation of goods
by sea be decided in as short a time as possible; the application of the provisions of Article
1155 of the new Civil Code would unnecessarily extend the period and permit delays in
the settlement of questions affecting transportation, contrary to the clear intent and
purpose of the law.
Under Dole's theory, when its claim was received by Maritime, the one-year prescriptive
period was interrupted and began to run anew from May 4, 1972, affording Dole another
period of one year counted from that date within which to institute action on its claim for
damage. Unfortunately, Dole let the new period lapse without filing action. It instituted Civil
Case No. 91043 only on June 11, 1973, more than one month after that period has
expired and its right of action had prescribed.
Air France vs Gillego
Facts:
Sometime in April 1993, respondent Bonifacio H. Gillego (incumbent Congressman of the
Second District of Sorsogon) was invited to participate as one of the keynote speakers at
the 89th Inter-Parliamentary Conference Symposium on Parliament Guardian of Human
Rights to be held in Budapest, Hungary and Tokyo, Japan from May 19 to 22, 1993.
On May 16, 1993, respondent left Manila on board petitioner Air Frances aircraft bound
for Paris, France. He arrived in Paris early morning of May 17, 1993. While waiting at the
De Gaulle International Airport for his connecting flight to Budapest scheduled at 3:15 p.m.
that same day, respondent learned that petitioner had another aircraft bound for Budapest
with an earlier departure time (10:00 a.m.) than his scheduled flight. He then went to

petitioners counter at the airport and made arrangements for the change in his
booking. He was given a corresponding ticket and boarding pass for Flight No. 2024 and
also a new baggage claim stub for his checked-in luggage.
However, upon arriving in Budapest, respondent was unable to locate his luggage at the
claiming section. He sought assistance from petitioners counter at the airport where
petitioners representative verified from their computer that he had indeed a checked-in
luggage. He was advised to just wait for his luggage at his hotel and that petitioners
representatives would take charge of delivering the same to him that same day. But said
luggage was never delivered by petitioners representatives despite follow-up inquiries by
respondent.
Upon his return to the Philippines, respondents lawyer immediately wrote petitioners
Station Manager complaining about the lost luggage and the resulting damages he
suffered while in Budapest. Petitioner, however, continued to ignore respondents repeated
follow-ups regarding his lost luggage.
Issue:
Whether or not there is legal and factual basis that Air Frances actions were attended by
gross negligence, bad faith and willful misconduct and thatit acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner to justify award of moral and exemplary
damages.
Held:
The mere fact that respondent was a Congressman should not result in an automatic
increase in the moral and exemplary damages recoverable. The social and financial
standing of a claimant may be considered only if he or she was subjected to
contemptuous conduct despite the offenders knowledge of his or her social and financial
standing.
In an action based on a breach of contract of carriage, the aggrieved party does not have
to prove that the common carrier was at fault or was negligent. All that he has to prove is
the existence of the contract and the fact of its non-performance by the carrier.
The action filed by the respondent is founded on such breach of the contract of carriage
with petitioner who offered no satisfactory explanation for the unreasonable delay in the
delivery of respondents baggage. The presumption of negligence was not overcome by
the petitioner and hence its liability for the delay was sufficiently established.
The Court held that the trial and appellate courts did not err in finding that petitioner acted
in bad faith in repeatedly ignoring respondents follow-up calls. Clearly, Air France did not
give the attention and care due to its passenger whose baggage was not transported and
delivered to him at his travel destination and scheduled time; inattention to and lack of
care 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 an
award of moral damages.
Sabena Belgian World Airlines vs. CA

G.R. No. 104685. March 14, 1996

Facts:

Plaintiff was a passenger on board of defendant airline originating from

Casablanca to Brussels, Belgium on her way back to Manila. Plaintiff checked in
her luggage which contained her valuables, namely: jewelries, clothes, shoes,
bags, and accessories. She stayed overnight in Brussels and her luggage was
left on board.

Plaintiff arrived at Manila International Airport and immediately submitted her Tag
No. 71423 to facilitate the release of her luggage but the luggage was missing.
She then filed for an irregularity report.

She followed up her claim but the luggage remained to be missing.

On the occasion of plaintiffs following up of her luggage claim, Brussels Office of

defendant found the luggage and that they have broken the locks for
identification. Plaintiff was assured by the defendant that it has notified its Manila
Office that the luggage will be shipped to Manila on October 27, 1987. But
unfortunately plaintiff was informed that the luggage was lost for the second time.

Plaintiff demanded from the defendant the money value of the luggage and its
contents. Defendant refused to settle.
Issue: W/N the Airline is liable for damages for the loss of plaintiffs luggages?
Held:

Yes. It remained undisputed that private respondents luggage was lost while it
was in the custody of petitioner. It was supposed to arrive on the same flight that
private respondent took in returning to Manila. When she discovered that the
luggage was missing, she promptly accomplished and filed a Property Irregularity
Report. She followed up her claim on 14 September 1987, and filed, on the
following day, a formal letter-complaint with petitioner. She felt relieved when, on
23 October 1987, she was advised that her luggage had finally been found, with
its contents intact when examined, and that she could expect it to arrive on 27
October 1987.
She then waited anxiously only to be told later that her luggage had been lost for
the second time.
Petitioner ultimately guilty of gross negligence in the handling of private
respondents luggage. The loss of said baggage not only once by twice, said the
appellate court, underscores the wanton negligence and lack of care on the
part of the carrier.
The above findings, foreclose whatever rights petitioner might have had to the
possible limitation of liabilities enjoyed by international air carriers under the
Warsaw Convention.
The Warsaw Convention however 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.
Convention 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

wilful 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.
Convention must be applied, or ignored, depending on the peculiar facts
presented by each case.

American Airlines vs CA
Facts:
Private respondent Democrito Mendoza purchased from Singapore Airlines in Manila
conjunction tickets for Manila - Singapore - Athens - Larnaca - Rome - Turin - Zurich Geneva - Copenhagen - New York. The petitioner was not a participating airline in any of
the segments in the itinerary under the said conjunction tickets. In Geneva the petitioner
decided to forego his trip to Copenhagen and to go straight to New York and in the
absence of a direct flight under his conjunction tickets from Geneva to New York, the
private respondent on June 7, 1989 exchanged the unused portion of the conjunction
ticket for a one-way ticket from Geneva to New York from the petitioner airline. Petitioner
issued its own ticket to the private respondent in Geneva and claimed the value of the
unused portion of the conjunction ticket from the IATA clearing house in Geneva.
n September 1989, private respondent filed an action for damages before the regional trial
court of Cebu for the alleged embarassment and mental anguish he suffered at the
Geneva Airport when the petitioners security officers prevented him from boarding the
plane, detained him for about an hour and allowed him to board the plane only after all the
other passengers have boarded. The petitioner filed a motion to dismiss for lack of
jurisdiction of Philippine courts to entertain the said proceedings under Art. 28 (1) of the
Warsaw Convention. The trial court denied the motion. The order of denial was elevated to
the Court of Appeals which affirmed the ruling of the trial court.
Issue:
Whether the questioned jurisdiction of the Regional Trial Court of Cebu to take cognizance
of the action for damages filed by the private respondent against herein petitioner in view
of Art 28 (1) of the Warsaw Convention.
Held:
Warsaw convention; has force and effect of law in countries like the Philippines which are
parties thereto; convention applies to international transportation. The Warsaw Convention
to which the Republic of the Philippines is a party and which has the forceand effect of law
in this country applies to all international transportation of persons, baggage or goods
performed by an aircraft gratuitously or for hire.
As enumerated in the Preamble of the Convention, one of the objectives is "to regulate in
a uniformmanner the conditions of international transportation by air." The contract of
carriage entered into by the private respondent with Singapore Airlines, and subsequently
with the petitioner, to transporthim to nine cities in different countries with New York as the
final destination is a contract of international transportation and the provisions of the

Convention automatically apply and exclusively govern the rights and liabilities of the
airline and its passengers.

On July 20, 2008, Jose and his 19 companions boarded the 0820 Cebu Pacific flight to
Palawan
and
had
an
enjoyable
stay.

This includes Section 28 (1) which enumerates the four places where an action for
damages may be brought.

On the afternoon of July 22, 2008, the group proceeded to the airport for their flight back
to Manila. During the processing of their boarding passes, they were informed by Cebu
Pacific personnel that nine (9) of them could not be admitted because their tickets were for
the 1005 (or 10:05 a.m.) flight earlier that day. Jose informed the ground personnel that he
personally purchased the tickets and specifically instructed the ticketing agent that all 20
of
them
should
be
on
the
4:15
p.m.
flight
to
Manila.

1) domicile of the carrier;

2) the carrier's principal place of business;
3) the place where the carrier has a place of business through which the contract was
made;
4) the place of destination.
Members of IATA under general pool partnership agreement: a contract of carriage
although performed by different carriers under a series of airline tickets, constitutes a
single operation.The contract of carriage between the AA and Singapore Airlines although
performed by different carriers under a series of airline tickets, including that issued by the
AA, constitutes a single operation.

Members of the IATA are under a general pool partnership agreement wherein
they act as agent of each other in the issuance of tickets to contracted
passengers to boost ticket salesworldwide and at the same time provide
passengers easy access to airlines which are otherwise inaccessible in some
parts of the world. o
o Booking and reservation among airline members are allowed even by
telephone and it has become an accepted practice among them.
o
A member airline which enters into a contract of carriage consisting of a
series of trips to be performed by different carriers is authorized to
receive the fare for the whole trip and through the required process of
interline settlement of accounts by way of the IATA clearing house an
airline is duly compensated for the segment of the trip serviced.

Manay vs Cebu Air

Facts:
On June 13, 2008, Carlos S. Jose (Jose) purchased 20 Cebu Pacific round-trip tickets
from Manila to Palawan for himself and on behalf of his relatives and friends. He made the
purchase at Cebu Pacific's branch office in Robinsons Galleria.
Jose alleged that he specified to "Alou," the Cebu Pacific ticketing agent, that his preferred
date and time of departure from Manila to Palawan should be on July 20, 2008 at 8:20
a.m. and that his preferred date and time for their flight back to Manila should be on July
22, 2008 at 4:15 p.m. He paid a total amount of P42,957.00 using his credit card. that after
paying for the tickets, Alou printed the tickets, which consisted of three (3) pages, and
recapped only the first page to him. Since the first page contained the details he specified
to Alou, he no longer read the other pages of the flight information.

Upon checking the tickets, they learned that only the first two (2) pages had the schedule
Jose specified. They were left with no other option but to rebook their tickets. They then
learned that their return tickets had been purchased as part of the promo sales of the
airline, and the cost to rebook the flight would be P7,000.00 more expensive than the
promo tickets. The sum of the new tickets amounted to P65,000.00.
They offered to pay the amount by credit card but were informed by the ground personnel
that they only accepted cash. They then offered to pay in dollars, since most of them were
balikbayans and had the amount on hand, but the airline personnel still refused.
Eventually, they pooled enough cash to be able to buy tickets for five (5) of their
companions. he other four (4) were left behind in Palawan and had to spend the night at
an inn, incurring additional expenses. Upon his arrival in Manila, Jose immediately
purchased four (4) tickets for the companions they left behind, which amounted to 5,205.

Later in July 2008, Jose went to Cebu Pacifics ticketing office in Robinsons Galleria to
complain about the allegedly erroneous booking and the rude treatment that his group
encountered from the ground personnel in Palawan. Jose and his companions were
frustrated and annoyed by Cebu Pacifics handling of the incident so they sent the
airline demand letters asking for a reimbursement of 42,955.00, representing the
additional amounts spent to purchase the nine (9) tickets, the accommodation, and meals
of the four (4) that were left behind.
Issue: Whether respondent is liable for the erroneous booking
Held:
Common carriers are required to exercise extraordinary diligence in the performance of
its obligations under the contract of carriage. This extraordinary diligence must be
observed not only in the transportation of goods and services but also in the issuance
of the contract of carriage, including its ticketing operations.

Article 1732 of the Civil Code defines a common carrier as persons, corporations or firms,
or associations engaged in the business of carrying or transporting passengers or goods
or both, by land, water or air, for compensation, offering their services to the public.

When a common carrier, through its ticketing agent, has not yet issued a ticket to the
prospective passenger, the transaction between them is still that of a seller and a
buyer. The obligation of the airline to exercise extraordinary diligence commences
upon the issuance of the contract of carriage. Ticketing, as the act of issuing the
contract of carriage, is necessarily included in the exercise of extraordinary diligence.

the common carrier to the passenger is governed principally by what is written on the
contract of carriage.

When an airline issues a ticket to a passenger confirmed on a particular flight, on a certain

date, a contract of carriage arises, and the passenger has every right to expect that he
would fly on that flight and on that date. If he does not, then the carrier opens itself to a
suit for breach of contract of carriage.

Petitioners, in failing to exercise the necessary care in the conduct of their affairs, were
without a doubt negligent. Thus, they are not entitled to damages.

Once a plane ticket is issued, the common carrier binds itself to deliver the
passenger safely on the date and time stated in the ticket. The contractual obligation of

Even assuming that the ticketing agent encoded the incorrect flight information, it is
incumbent upon the purchaser of the tickets to at least check if all the information is
correct before making the purchase. Once the ticket is paid for and printed, the purchaser
is presumed to have agreed to all its terms and conditions.