UNSWORTH TRANSPORT INTERNATIONAL (PHILS.), INC.

,Petitioner,- versus -COURT

OF APPEALS and PIONEER INSURANCE AND SURETY CORPORATION, Respondents
G.R. No. 166250
Petitioner: Unsworth Transport International (Philippines), Inc., American President Lines, Ltd.
(APL), and Unsworth Transport International, Inc.s
Respondent: PIONEER INSURANCE AND SURETY CORPORATION
Facts: The shipper Sylvex Purchasing Corporation delivered to UTI a shipment of 27 drums of
various raw materials for pharmaceutical manufacturing. UTI issued Bill of Lading covering the
shipment. The subject shipment was insured with Pioneer Insurance and Surety Corporation in
favor of Unilab against all risks in the amount of P1,779,664.77 under and by virtue of Marine
Risk Note Number and Open Cargo Policy.
A bill of lading was issued and the shipment was loaded in a sealed 1x40 container van,
boarded on APLs vessel M/V Pres. Jackson, Voyage 42, and transshipped to APLs M/V Pres.
Taft for delivery to petitioner in favor of the consignee United Laboratories, Inc. (Unilab).
The shipment arrived at the port of Manila and UTI received the said shipment in its
warehouse after it stamped the Permit to Deliver Imported Goods procured by the Champs
Customs Brokerage. Oceanica Cargo Marine Surveyors Corporation (OCMSC) conducted a
stripping survey of the shipment located in petitioners warehouse. The survey results stated:
2-pallets STC 40 bags Dried Yeast, both in good order condition and properly sealed
19- steel drums STC Vitamin B Complex Extract, all in good order condition and properly
sealed
1-steel drum STC Vitamin B Complex Extra[ct] with cut/hole on side, with approx. spilling of
1%.
The arrastre Jardine Davies Transport Services, Inc. (Jardine) issued Gate Pass No.
7614 which stated that 22 drums Raw Materials for Pharmaceutical Mfg. were loaded on a truck
facilitated by Champs for delivery to Unilabs warehouse. The materials were noted to be
complete and in good order in the gate pass. When the shipment arrived in Unilabs warehouse it
was immediately surveyed by an independent surveyor, J.G. Bernas Adjusters & Surveyors, Inc.
(J.G. Bernas). The Report stated:
1-p/bag torn on side contents partly spilled
1-s/drum #7 punctured and retaped on bottom side content lacking
5-drums shortship/short delivery.
The same independent surveyor conducted final inspection surveys which yielded the
same results. Consequently, Unilabs quality control representative rejected one paper bag
containing dried yeast and one steel drum containing Vitamin B Complex as unfit for the
intended purpose.
Unilab filed a formal claim for the damage against private respondent and UTI which
they denied liability; and the private respondent paid the claimed amount and Subrogated
Unilabss rights to claim damages.
Issue: WHETHER OR NOT PETITIONER UTI IS A COMMON CARRIER.

Held: UTI is a freight forwarder. The term freight forwarder" refers to a firm holding itself out
to the general public (other than as a pipeline, rail, motor, or water carrier) to provide
transportation of property for compensation and, in the ordinary course of its business, (1) to
assemble and consolidate, or to provide for assembling and consolidating, shipments, and to
perform or provide for break-bulk and distribution operations of the shipments; (2) to assume
responsibility for the transportation of goods from the place of receipt to the place of
destination; and (3) to use for any part of the transportation a carrier subject to the federal law
pertaining to common carriers.
A freight forwarders liability is limited to damages arising from its own negligence,
including negligence in choosing the carrier; however, where the forwarder contracts to deliver
goods to their destination instead of merely arranging for their transportation, it becomes liable
as a common carrier for loss or damage to goods. A freight forwarder assumes the responsibility
of a carrier, which actually executes the transport, even though the forwarder does not carry the
merchandise itself.
It is undisputed that UTI issued a bill of lading in favor of Unilab. They undertook to
transport, ship, and deliver the 27 drums of raw materials for pharmaceutical manufacturing to
the consignee.
A bill of lading is a written acknowledgement of the receipt of goods and an agreement to
transport and to deliver them at a specified place to a person named or on his or her order.
UTI is liable as a common carrier. Common carriers, as a general rule, are presumed to
have been at fault or negligent if the goods they transported deteriorated or got lost or
destroyed. That is, unless they prove that they exercised extraordinary diligence in transporting
the goods. In order to avoid responsibility for any loss or damage, therefore, they have the
burden of proving that they observed such diligence. Mere proof of delivery of the goods in
good order to a common carrier and of their arrival in bad order at their destination constitutes a
prima facie case of fault or negligence against the carrier. If no adequate explanation is given as
to how the deterioration, loss, or destruction of the goods happened, the transporter shall be held
responsible.
As to the liability of UTI payment of damages, it is to be noted that the Civil Code does
not limit the liability of the common carrier to a fixed amount per package. In all matters not
regulated by the Civil Code, the rights and obligations of common carriers are governed by the
Code of Commerce and special laws. Thus, the COGSA supplements the Civil Code by
establishing a provision limiting the carriers liability in the absence of a shippers declaration of
a higher value in the bill of lading.
The shipper did not declare a higher valuation of the goods to be shipped. Hence, UTIs
liability should be limited to $500 per steel drum. In this case, as there was only one drum lost,
private respondent is entitled to receive only $500 as damages for the loss.

NORBERTO QUISUMBING, SR., and GUNTHER LOEFFLER petitioners, vs.COURT

OF APPEALS and PHILIPPINE AIR LINES, INC., respondents.
Norberto Quisumbing, Sr. and Gunther Leoffler were among the of PAL's Fokker
'Friendship' PIC-536 plane in its flight which left Mactan City with Manila for its destination.
After the plane had taken off, Florencio O. Villarin, a Senior NBI Agent and a passenger
of the said plane, noticed a certain 'Zaldy,' a suspect in the killing of Judge Valdez. A check by
Villarin with the passenger's ticket in the possession of flight Stewardess revealed that 'Zaldy'
had used the name 'Cardente,' one of his aliases known to Villarin and also he came to know
from the stewardess that 'Zaldy' had three companions on board the plane."
Villarin then scribbled a note addressed to the pilot of the plane requesting the latter to
contact NBI duty agents in Manila to send about six NBI agents to meet the plane because the
suspect in the killing of Judge Valdez was on board.
After receiving the note, which was about 15 minutes after takeoff, the pilot, Capt. Luis
Bonnevie, Jr., came out of the cockpit and sat beside Villarin and explained that he could not
send the message because it would be heard by all ground aircraft stations. Villarin, however,
told the pilot of the danger of commission of violent acts on board the plane by the notorious
'Zaldy' and his three companions.
While the pilot and Villarin were talking, 'Zaldy' and one of his companions walked to
the rear and stood behind them. Capt. Bonnevie then stood up and went back to the cockpit.
'Zaldy' and his companions returned to their seats.
Soon thereafter an exchange of gunshots ensued between Villarin and 'Zaldy' and the
latter's companions. 'Zaldy' announced to the passengers and the pilots in the cockpit that it was
a hold-up and ordered the pilot not to send any SOS. The hold-uppers divested passengers of
their belongings.
Norberto Quisumbing, Sr. was divested of jewelries and cash in the total amount of
P18,650.00 out of which recoveries were made amounting to P4,550.00. Gunther Leoffler was
divested of a wrist watch, cash and a wallet in the total of P1,700.00. As a result of the incident
Quisumbing, Sr. suffered shock, because a gun had been pointed at him by one of the hold
uppers.
Upon landing at the Manila International Airport. 'Zaldy' and his three companions succeeded in
escaping.
Demands were thereafter made on PAL by Quisumbing and Loeffler "to indemnify them
on their aforesaid loss, but PAL refused averring that it is not liable to them in law or in fact.
Contention of Quisimbing and Loeffler: Loss is a result of breach of PAL's contractual
obligation to carry them and their belongings and effects to their Manila destination without
loss or damage, and constitutes a serious dereliction of ... (PAL's) legal duty to exercise
extraordinary diligence in the vigilance over the same.
Contention of PAL: Denied liability, alleging that the robbery constitute force majeure.
Issue: whether or not hijacking-robbery was force majeure so that PAL was not liable cause by
the hijackers.

Held: The highjacking-robbery was force majeure. Hijackers do not board an airplane through a
blatant display of firepower and violent fury. The objective of modern-day hijackers is to
display the irresistible force amounting to force majeure only when it is most effective and that
is when the jetliner is winging its way at Himalayan altitudes and ill-advised heroics by either
crew or passengers would send the multi-million peso airplane and the priceless lives of all its
occupants into certain death and destruction. ..
World experience shows that if a group of armed hijackers want to take over a plane in
flight, they can elude the latest combined government and airline industry measures. And as our
own experience in Zamboanga City illustrates, the use of force to overcome hijackers, results in
the death and injury of innocent passengers and crew members.
The acts of the airline and its crew cannot be faulted as negligence. The hijackers had
already shown their willingness to kill. One passenger was in fact killed and another survived
gunshot wounds. The lives of the rest of the passengers and crew were more important than
their properties. Cooperation with the hijackers until they released their hostages at the runway
end near the South Superhighway was dictated by the circumstances.