MAGELLAN

FACTS:

Choju Co., Ltd purchased from Magellan

Manufacturers Marketing Corp. (MMMC) 136,000
anahaw fans for $23,220
MMMC contracted with F.E. Zuellig, a
shipping agent of Orient Overseas Container Lines,
Inc., (OOCL) specifying that he needed an on-board
bill of lading and that transhipment is not allowed
under the letter of credit
MMMC paid F.E. Zuellig the freight charges
and secured a copy of the bill of lading which was
presented to Allied Bank. The bank then credited the
amount of US$23,220 covered by the letter of credit
to MMMC
When MMMC's President James Cu, went
back to the bank later, he was informed that the
payment was refused by the buying for lack of bill of
lading and there was a transhipment of goods
The anahaw fans were shipped back to
Manila through OOCL who are demanding from
MMMC P246,043.43 (freight charges from Japan to
Manila, demurrage incurred in Japan and Manila from
October 22, 1980 up to May 20, 1981 and charges
for stripping the container van of the Anahaw fans on
May 20, 1981)
MMMC abandoned the whole cargo and
asked OOCL for damages
OOCL: bill of lading clearly shows that
there will be a transhipment and that petitioner
was well aware that MV (Pacific) Despatcher was
only up to Hongkong where the subject cargo

will be transferred to another vessel for Japan

RTC: favored OOCL:

consented because the bill of lading

where it is clearly indicated that there will be
transhipment
MMMC was the one who ordered the
reshipment of the cargo from Japan to Manila
CA: Affirmed with modification of excluding
demurrage in Manila
ISSUE: W/N the bill of lading which reflected the transhipment
against the letter of credit is consented by MMMC
HELD: YES. CA Affirmed with modification

Transhipment
act of taking cargo out of one ship and
loading it in another
the transfer of goods from the vessel
stipulated in the contract of affreightment to
another vessel before the place of destination
named in the contract has been reached
transfer for further transportation from
one ship or conveyance to another
the fact of transhipment is not dependent
upon the ownership of the transporting ships or
conveyances or in the change of carriers, as the
petitioner seems to suggest, but rather on the fact of
actual physical transfer of cargo from one vessel to
another
appears on the face of the bill of lading the
entry "Hong Kong" in the blank space labeled
"Transhipment," which can only mean that
transhipment actually took place

bill of lading
operates both as a receipt and as a
contract
receipt for the goods shipped
contract to transport and deliver
the same as therein stipulated
names the parties, which
includes the consignee, fixes the route,
destination, and freight rates or
charges, and stipulates the rights and
obligations assumed by the parties
law between the parties who
are bound by its terms and conditions
provided that these are not contrary to
law, morals, good customs, public order
and public policy
GR: acceptance of the bill without dissent
raises the presumption that all the terms therein
were brought to the knowledge of the shipper and
agreed to by him and, in the absence of fraud or
mistake, he is estopped from thereafter denying that
he assented to such term
There clearly appears on the face of the bill
of lading under column "PORT OF TRANSHIPMENT"
an entry "HONGKONG'
On board bill of lading vs. received for
shipment bill of lading:
on board bill of lading
stated that the goods have been
received on board the vessel which is to
carry the goods
received for shipment bill of lading
stated that the goods have been

received for shipment with or without

specifying the vessel by which the goods are
to be shipped
issued whenever conditions are not
normal and there is insufficiency of shipping
space
certification of F.E. Zuellig, Inc. cannot
qualify the bill of lading, as originally issued, into an
on board bill of lading as required by the terms of
the letter of credit issued in favor of petitioner - it is
a received for shipment bill of lading
issued only on July 19, 1980, way
beyond the expiry date of June 30,
1980 specified in the letter of credit for the
presentation of an on board bill of lading
Demurrage
compensation provided for in the
contract of affreightment for the detention of the
vessel beyond the time agreed on for loading
and unloading
claim for damages for failure to accept
delivery
before it could be charged for demurrage
charges it should have been notified of the arrival of
the goods first
Since abandon option was communicated,
the same is binding upon the parties on legal and
equitable considerations of estoppel
SAMAR
FACTS:

Samar Mining Company, Inc. imported1

crate of welded wedge wire sieves shipped

through Nordeutscher Lloyd
Bill of Lading No. 18:
transshipped at port of
discharge: davao
Section 1, paragraph 3 of Bill of
Lading No. 18
The carrier shall not be liable in
any capacity whatsoever for any delay,
loss or damage occurring before the
goods enter ship's tackle to be loaded
or after the goods leave ship's tackle to
be discharged, transshipped or
forwarded ...
Section 11:
Whenever the carrier or m
aster may deem it advisable or in
any case where the goods are
placed at carrier's disposal at or
consigned to a point where the
ship does not expect to load or
discharge, the carrier or master
may, without notice, forward the
whole or any part of the goods
before or after loading at the
original port of shipment, ... This
carrier, in making arrangements for
any transshipping or forwarding
vessels or means of transportation
not operated by this carrier shall
be considered solely the forwarding
agent of the shipper and without
any other responsibility whatsoever

even though the freight for the

whole transport has been collected
by him. ... Pending or during
forwarding or transshipping the
carrier may store the goods ashore
or afloat solely as agent of the
shipper and at risk and expense of
the goods and the carrier shall not
be liable for detention nor
responsible for the acts, neglect,
delay or failure to act of anyone to
whom the goods are entrusted or
delivered for storage, handling or
any service incidental thereto

When the goods arrived in the port of Davao, it

was delivered in good order and condition to the

bonded warehouse of AMCYL but it was not delivered

and received by Samar Mining Company, Inc.
Samar filed a claim against Nordeutscher
and C.F. Sharp who brought in AMCYL as third party
defendant
RTC: favored Samar
Nordeutscher and C.F. Sharp laible but
may enforce judgment against AMCYL
ISSUE: W/N the stipulations in bills of lading exempting the
carrier from liability for loss or damage to the goods
when the same are not in its actual custody is valid
HELD: YES. Reversed
Article 1736.
The extraordinary responsibility
of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by

the carrier for transportation until the same are delivered,

actually or constructively, by the carrier to the consignee, or
to the person who has a right to receive them, without
prejudice to the provisions of article 1738. - applicable
Article 1738.
The extraordinary liability of the
common carrier continues to be operative even during the
time the goods are stored in a warehouse of the carrier at
the place of destination, until the consignee has been
advised of the arrival of the goods and has had reasonable
opportunity thereafter to remove them or otherwise dispose
of them. - no applicable since article contemplates a

situation where the goods had already reached their

place of destination and are stored in the warehouse
of the carrier
Article 1884.
The agent is bound by his
acceptance to carry out the agency, and is liable for
the damages which, through his non-performance,
the principal may suffer.
Article 1889.
The agent shall be liable
for damages if, there being a conflict between his
interests and those of the principal, he should prefer
his own.
Article 1892.
The agent may appoint a
substitute if the principal has not prohibited him from
doing so; but he shall be responsible for the acts of
the substitute:
(1) When he was not given the power to appoint
one;
(2) When he was given such power but without
designating the person and the person appointed
was notoriously incompetent or insolvent

Article 1909.
The agent is responsible
not only for fraud, but also for negligence which shall
be judged with more or less rigor by the courts,
according to whether the agency was or was not for
a compensation.
The records fail to reveal proof of
negligence, deceit or fraud committed by appellant
or by its representative in the Philippines. Neither is
there any showing of notorious incompetence or
insolvency on the part of AMCYT, which acted as
appellant's substitute in storing the goods awaiting
transshipment
SWEET LINES
FACTS:

Atty. Leovigildo Tandog and Rogelio Tiro

bought tickets for Tagbilaran City via the port of
Cebu
Since many passengers were bound for
Surigao, M/S "Sweet Hope would not be proceeding
to Bohol
They went to the proper brancg office and
was relocated to M/S "Sweet Town" where they
were forced to agree "to hide at the cargo section to
avoid inspection of the officers of the Philippine
Coastguard." and they were exposed to the
scorching heat of the sun and the dust coming from
the ship's cargo of corn grits and their tickets were
not honored so they had to purchase a new one
They sued Sweet Lines for damages and for
breach of contract of carriage before the Court of
First Instance of Misamis Oriental who dismissed the

compalitn for improper venue

A motion was premised on the condition
printed at the back of the tickets -dismissed
instant petition for prohibition for
preliminary injunction
ISSUE: W/N a common carrier engaged in inter-island
shipping stipulate thru condition printed at the back of
passage tickets to its vessels that any and all actions
arising out of the contract of carriage should be filed only
in a particular province or city
HELD: NO.petition for prohibition is DISMISSED.

Restraining order LIFTED and SET ASIDE

contract of adhesion
not that kind of a contract where the
parties sit down to deliberate, discuss and agree
specifically on all its terms, but rather, one which
respondents took no part at all in preparing
just imposed upon them when they paid
for the fare for the freight they wanted to ship
We find and hold that Condition No. 14
printed at the back of the passage tickets should be
held as void and unenforceable for the following
reasons
circumstances obligation in the interisland ship
will prejudice rights and interests of
innumerable passengers in different s of the
country who, under Condition No. 14, will
have to file suits against petitioner only in
the City of Cebu
subversive of public policy on transfers

of venue of actions
philosophy underlying the
provisions on transfer of venue of actions is
the convenience of the plaintiffs as well as
his witnesses and to promote 21 the ends of
justice
SERVANDO
FACTS:

Clara Uy Bico (1,528 cavans of rice

worth P40,907.50) and Amparo Servando (44
cartons of colored paper toys and general
merchandise worth P1,070.50) loaded on
board Philippine Steam Navigation Co.'s vessel, FS176 for carriage from Manila to Pulupandan, Negros
Occidental
Bill of Lading:
Clause 14. Carrier shall not be
responsible for loss or damage to shipments
billed 'owner's risk' unless such loss or
damage is due to negligence of carrier. Nor
shall carrier be responsible for loss or
damage caused by force majeure, dangers
or accidents of the sea or other waters;
war; public enemies; . . . fire . ...
Upon arrival of the vessel at Pulupandan, in
the morning of November 18, 1963, the cargoes
were discharged, complete and in good order, unto
the warehouse of the Bureau of Customs
2 pm: warehouse was razed by fire
Before the fire, 907 cavans of rice were
delivered by Uy Bico

Uy Bico and Servando filed a claim for the

value but was rejected by Philippine Steam
CFI: favored UY Bico and Sercando

delivery of the shipment in question to

the warehouse of the Bureau of Customs is not
the delivery contemplated by Article 1736

ISSUE: W/N Philippine Steam should not be liable because of the

stipulation in the bill of lading exempting it from fortuitous event
HELD: YES. set aside
Agreement was in iteration of
Article 1174. Except in cases expressly
specified by the law, or when it is otherwise declared by
stipulation, or when the nature of the obligation
requires the assumption of risk, no person shall be
responsible for those events which could not be
foreseen, or which, though foreseen, were inevitable.
'caso fortuito' presents the following essential
characteristics: (1) the cause of the unforeseen and
unexpected occurrence, or of the failure of the debtor to
comply with his obligation, must be independent of the
human will; (2) it must be impossible to foresee the event
which constitutes the 'caso fortuito', or if it can be foreseen,
it must be impossible to avoid; (3) the occurrence must be
such as to render it impossible for the debtor to fulfill his
obligation in a normal manner; and (4) the obligor must be
free from any participation in the aggravation of the injury
resulting to the creditor." In the case at bar, the burning of
the customs warehouse was an extraordinary event which
happened independently of the will of the appellant. The
latter could not have foreseen the event.

nothing in the record to show that appellant

carrier ,incurred in delay in the performance of its
obligation

HEACOCK
EDGAR COKALIONG
BELGIAN OVERSEAS
CMC Trading A.G. shipped on board the M/V Anangel Sky at
Hamburg, Germany 242 coils of various Prime Cold Rolled Steel
sheets for transportation to Manila consigned to the Philippine
Steel Trading Corporation.
- On July 28, 1990, M/V Anangel Sky arrived at the port of Manila
and, within the subsequent days, discharged the subject cargo.
Four (4) coils were found to be in bad order.
- Finding the four (4) coils in their damaged state to be unfit for
the intended purpose, the consignee Philippine Steel Trading
Corporation declared the same as total loss.
- Philippine First Insurance paid the claim of Philippine Steel and
was thus subrogated.
- Philippine First then instituted a complaint for recovery of the
amount paid to the consignee as insured.
- Belgian claims that the damage and/or loss was due to preshipment damage, to the inherent nature, vice or defect of the
goods, or to perils, danger and accidents of the sea, or to
insufficiency of packing thereof, or to the act or omission of the
shipper of the goods or their representatives. Belgian further
argued that their liability, if there be any, should not exceed the
limitations of liability provided for in the bill of lading and other
pertinent laws. Finally, Belgian averred that, in any event, they
exercised due diligence and foresight required by law to prevent
any damage/loss to said shipment.
- The RTC dismissed the complaint.
- The CA reversed and ruled that Belgian were liable for the loss
or the damage of the goods shipped, because they had failed to
overcome the presumption of negligence imposed on common
carriers. As to the extent of Belgians liability, the CA held that the
package limitation under COGSA was not applicable, because the
words "L/C No. 90/02447" indicated that a higher valuation of the
cargo had been declared by the shipper.

Issues:
- Whether the notice of loss was timely filed. (Belgian claims
that pursuant to Section 3, paragraph 6 of COGSA, respondent
should have filed its Notice of Loss within three days from
delivery. They assert that the cargo was discharged on July 31,
1990, but that respondent filed its Notice of Claim only on
September 18, 1990.)
Whether the package limitation of liability under COGSA is
applicable. (Belgian contends that assuming that they are liable
their liability should be limited to US$500 per package as
provided in the Bill of Lading and by Section 4(5)of COGS

Held:
- NO. 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.
- In this case, Belgian failed to rebut the prima facie
presumption of negligence. First, as stated in the Bill of Lading,
Belgian received the subject shipment in good order and condition
in Germany. Second, prior to the unloading of the cargo, an
Inspection Report prepared and signed by representatives of both
parties showed the steel bands broken, the metal envelopes ruststained and heavily buckled, and the contents thereof exposed
and rusty. Third, Bad Order Tally Sheet issued by Jardine Davies
Transport Services stated that the four coils were in bad order and
condition. Normally, a request for a bad order survey is made in

case there is an apparent or a presumed loss or damage.Fourth,

the Certificate of Analysis stated that, based on the sample
submitted and tested, the steel sheets found in bad order were
wet with fresh water. Fifth, Belgian -- in a letteraddressed to the
Philippine Steel --admitted that they were aware of the condition
of the four coils found in bad order and condition.
- YES. First, the provision of COGSA provides that the notice of
claim need not be given if the state of the goods, at the time of
their receipt, has been the subject of a joint inspection or survey.
Here, prior to unloading the cargo, an Inspection Report as to the
condition of the goods was prepared and signed by
representatives of both parties. Second, as stated in the same
provision, a failure to file a notice of claim within three days will
not bar recovery if it is nonetheless filed within one year. This oneyear prescriptive period also applies to the shipper, the
consignee, the insurer of the goods or any legal holder of the bill
of lading.
- A claim is not barred by prescription as long as the one-year
period has not lapsed. In the present case, the cargo was
discharged on July 31, 1990, while the Complaint51 was filed by
respondent on July 25, 1991, within the one-year prescriptive
period.
- YES. In this case, there was no stipulation in the Bill of Lading
limiting the carrier's liability. Neither did the shipper declare a
higher valuation of the goods to be shipped. This fact
notwithstanding, the insertion of the words "L/C No. 90/02447
cannot be the basis for Belgians liability.
- First, a notation in the Bill of Lading which indicated the
amount of the Letter of Credit obtained by the shipper for the
importation of steel sheets did not effect a declaration of the
value of the goods as required by the bill. That notation was made
only for the convenience of the shipper and the bank processing
the Letter of Credit.
- Second, a bill of lading is separate from the Other Letter of
Credit arrangements. Thus, Belgians liability should be computed
based on US$500 per package and not on the per metric ton price
declared in the Letter of Credit.

SHEWARAM
FACTS:
Plaintiff paid for his ticket for his flight from Zamboanga to Manila. He checked in 3 luggages.
Upon arrival in Manila, one of his luggages which contained a radio and a camera worth P353 was
missing. Upon investigation by PAL, it was found out that it was mistagged and was sent to Iligan. The
next day the lugggage was returned but the camera and radio were already missing.
Plaintiff now wants PAL to pay for the original amount of the camera and radio but PAL invoked
the provision at the back of the ticket. The provision provided that the company would pay only P100 for
any lost item not initially declared.
ISSUE:
Whether PAL is liable and to what extent.

HELD:
Yes. PAL being a common carrier is liable. Its contention that the liability limitation to P100
cannot be enforced. Accdg. to SC, there is nothing wrong in limiting the liability but first there must be a
contract which is just and reasonable under the circumstances and must fairly be agreed upon (Art. 1750).
In this case, the print at the back of the ticket was so small and there was no signature at the back
of the ticket to manifest a fairly agreed contract. Hence, PAL is liable for the whole amount of the objects
although they were not initially declared.
To establish negligence, SC used Art 1734 and 1735. In these articles, there is an
exclusive list where common carriers are exempted from liablility. These are the following:
1 flood , storm, earthquake, lightning or other natural disaster
2 act of the public enemyin war, whether international or civil
3 act or omission of the shipper or owner of goods
4 the cahracter of the goods or defects in the packing or in containers
5 order or act of competent public authorities
Since in the case at bar, none of these fall in the categories cited, PAL is considered
negligent and liable.

CHINA AIRLINES
Facts: Daniel Chiok purchased from China Airlines a passenger ticket for
air transportation covering Manila-Taipei-Hong Kong-Manila. The said ticket
was exclusively endorsable to PAL.

Before Chiok his trip, the trips covered by the ticket were pre-scheduled
and confirmed by the former. When petitioner arrived in Taipei, he went to
CAL to confirm his Hong Kong- Manila trip on board PAL. The CAL office
attached a yellow sticker indicating the status was OK.
When Chiok reached Hong Kong, he then went to PAL office to confirm his
flight back to Manila. The PAL also confirmed the status of his ticket and
attached a ticket indicating a status OK. Chiok proceeded to Hong Kong
airport for his trip to Manila. However, upon reaching the PAL counter, he
was told that the flight to Manila was cancelled due to typhoon. He was
informed that all confirmed flight ticket holders of PAL were automatically
booked for the next flight the following day.
The next day, Chiok was not able to board the plane because his name did
not appear on the computer as passenger for the said flight to Manila.
Issue: Whether or not CAL is liable for damages?
Held: The contract of air transportation between the petitioner and
respondent, with the former endorsing PAL the segment of Chioks journey.
Such contract of carriage has been treated in this jurisprudence as a single
operation pursuant to Warsaw Convention, to which the Philippines is a
party.
In the instant case, PAL as the carrying agent of CAL, the latter cannot
evade liability to respondent, Chiok, even though it may have been only a
ticket issuer for Hong Kong- Manila sector.
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 15 of IATA-Recommended Practice similarly provides: "Carriage to be performed by several
successive carriers under one ticket, or under a ticket and any conjunction ticket issued therewith, is
regarded as a single operation."
In American Airlines v. Court of Appeals, we have noted that under a general pool partnership agreement,
the ticket-issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent.
Likewise, as the principal in the contract of carriage, the petitioner in British Airways v. Court of Appeals
was held liable, even when the breach of contract had occurred, not on its own flight, but on that of another
airline. The Decision followed our ruling in Lufthansa German Airlines v. Court of Appeals, in which we
had held that the obligation of the ticket-issuing airline remained and did not cease, regardless of the fact
that another airline had undertaken to carry the passengers to one of their destinations.

SANTOS V CA

FACTS: The petitioner 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 re-confirmation, 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 RTC 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, reading as
follows:
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.
The private respondent contended that the Philippines was
not its domicile nor was this its principal place of business.
Neither was the petitioners ticket issued in this country
nor was his destination Manila but San Francisco in the
United States.
Lower court granted the dismissal, CA affirmed.
ISSUE: WON the Philippines has jurisdiction over the
case. (Issue raised by the party is WON the provision of
the Warsaw convention was constitutional)
HELD: No jurisdiction (the provision is constitutional)
The Convention is a treaty commitment voluntarily
assumed by the Philippine government and, as such, has
the force and effect of law in this country. The petitioners
allegations are not convincing enough to overcome this
presumption. Apparently, the Convention considered the
four places designated in Article 28 the most convenient
forums for the litigation of any claim that may arise
between the airline and its passenger, as distinguished
from all other places.
NOTES:

WON Warsaw convention applies.

Convention applies to all international transportation of
persons performed by aircraft for hire. Whether the
transportation is international is determined by the
contract of the parties, which in the case of passengers is
the ticket. When the contract of carriage provides for the
transportation of the passenger between certain
designated terminals within the territories of two High
Contracting Parties, the provisions of the Convention
automatically apply and exclusively govern the rights and
liabilities of the airline and its passenger.
WON MNL or SFO was the destination.
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
petitioners 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.
WON Northwest has domicile in the Philippines
Notably, the domicile of the carrier is only one of the
places where the complaint is allowed to be filed under
Article 28(1). By specifying the three other places, to wit,
the principal place of business of the carrier, its place of
business where the contract was made, and the place of

destination, the article clearly meant that these three other

places were not comprehended in the term domicile.
UNITED AIRLINES v UY

Facts:

On October 13, 1989, respondent, a

passenger of United Airlines, checked in together with his
luggage one piece of which was found to be overweight
at the airline counter. To his utter humiliation, an
employee of petitioner rebuked him saying that he should
have known the maximum weight allowance per bag and
that he should have packed his things accordingly. Then,
in a loud voice in front of the milling crowd, she told
respondent to repair his things and transfer some of
them to the light ones. Respondent acceded but his
luggage was still overweight. Petitioner billed him
overweight charges but its employee reused to honor the
miscellaneous charges under MCD which he offered to
pay with. Not wanting to leave without his luggage, he
paid with his credit card. Upon arrival in manila, he
discovered that one of his bags had been slashed and its
contents stolen. In a letter dated October 16, 1989, he
notified petitioner of his loss and requested
reimbursement. Petitioner paid for his loss based on the
maximum liability per pound. Respondent considered the
amount grossly inadequate. He sent two more letters to
petition but to no avail. On June 9, 1992, respondent
filed a complaint for damages against petitioner Airline.
Petitioner moved to dismiss the complaint invoking the
provisions of Article 29 of the Warsaw Convention.
Respondent countered that according to par. 2 of Article

29, the method of calculating the period of limitation

shall be determined by the law of the court to which the
case is submitted.

Issues:
1) Does the Warsaw Convention preclude the operation of
the Civil Code and other pertinent laws?
2) Has the respondents cause of action prescribed?

Held: 1) No. Within our jurisdiction we have held

that the Warsaw Convention can be applied, or ignored,
depending on the peculiar facts presented by each case.
Convention provisions do not regulate or exclude
liabilities 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 disregardof
some extraordinary 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 therefore3 beyond the limits et 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 carriers employees is found or established.
2) No. While his 2nd 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 1st cause of action (an action for
damages arising from the misconduct of the airline
employees and the violation of respondents rights as
passengers) clearly is not.
The 2-yr limitation incorporated in Art. 29 of the Warsaw
Convention as an absolute bar to suit and not to be made
subject to the various tolling provisions of the laws of the
forum, forecloses the application of our own rules on
interruption of prescriptive periods. (Art. 29, par. 2 was
indented only to let local laws determine whether an
action shall be deemed commenced upon the filing of a
complaint.) Since, it is indisputable that respondent filed
the present action beyond the 2-yr time frame his 2nd
cause of action must be barred.
However, it is obvious that respondent was forestalled
from immediately filing an action because petitioner 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 petitioner denied
his claims 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 Article 29
of the Warsaw Convention that an action for damages
should be filed within 2 years from the arrival at the
place ofdestination, such rule shall not be applied in the
instant case because of the delaying tactics employed by
petitioner airlines itself. Thus, respondents 2nd cause of
action cannot be considered as time barred.
DEL GUERRERO v MADRIGAL

On April 30, 1957, the wife and daughter of Pacifico Acacio, plaintiffs
herein, filed a complaint against defendant corporation alleging that on
November 1, 1949 Pacifico Acacio entered into a contract of carriage with
defendant whereby for certain consideration the latter undertook to carry
the former on it vessel "M.S. Regulus" from Malangas, Zamboanga, to the
City of Manila; that while the vessel was passing San Jose, Antique, its
crew without taking the necessary precaution managed and steered the
same in a reckless and imprudent manner thereby causing the vessel to
capsized and resulting to the death of Pacifico Acacio.
Defendant filed a motion to dismiss on the ground that plaintiff's cause of
action has already prescribed. It contended that they should have filed the
action within six years from the time of the alleged breach of contract, or on
November 1, 1955, or more than 7 years thereafter, the complaint was filed
out of time.
The lower court sustained the motion holding that since the nature of the
action is one for recovery of damages which is not based on a written
contract, the action is already barred by the statute of limitations. Hence,
the present appeal.
It appears that the complaint was dismissed by the trail court on the
strength of a motion filed by defendant on the ground that the cause of
action has already prescribed. No evidence was presented by any party in
support of or against the motion, the ruling of the court having been based
merely on the factula allegations of the complaint. The question that now
arise is: Do the allegations of the complaint shows that the cause of action
of plaintiffs is merely for recovery of damages, as found by the trial court, or
is one based on a written contract of carriage as claimed by appellants?
We are inclined to uphold the contention of the appellants for cursory
reading of the complaint would show that their cause of action is predicated
upon the failure of appellee to comply with its contract of carrying the
deceased from Malangas, Zamboanga to the City of Manila safely, in that
the vessel on which he was riding belonging to defendant capsized
because of the reckless and imprudent manner it was managed and
steered by its crew. It is true that the complaint does not in so many words
state that the transportation was undertaken by virtue of a written contract
of carriage, but this can be implied from the complaint because It is a
matter of common knowledge that whenever a passenger boards a ship for

transportation from one place to another he is issued a ticket by the shipper

wherein the terms of the contract are specified. According to appellants,
"This ticket is in itself a complete written contract by and between the
shipper and the passenger. It has all the elements of a complete contract,
namely: (1) the consent of the contracting parties manifested by the fact
that the passenger board the ship and the shipper consents or accepts him
in the sip for transportation; (2) cause or consideration which is the fare
paid by the passenger as stated in the ticket; and (3) object, which is the
transportation of the passenger from the place of departure to the place of
destination which are stated in the ticket."
Considering that the ticket is not now before us because the case has been
decided merely on the motion to dismiss, and this ticket is necessary to
determine the right of action of appellants, it would have been more proper
had action on the motion been deferred until after trial on the merits. This is
authorized by the rule if the ground alleged in the motion does not appear
to be indubitable (Section 3, Rule 8 of the Rules of the Court). We are
therefore of the opinion that, in fairness to the appellants the trial court
should not have dismissed the case out right but should have deferred
action on the motion until after trial for the evidence to be presented may
still show that the contract of the parties is really written and merely oral as
intimated by the court a quo.
Wherefore, the order appealed is hereby set aside, and the case is
remanded to the lower court for further proceedings. No pronouncement as
to costs.

PHILAM GEN V SWEET LINES

WALLEM v PRUDENTIAL
General Milling Corporation (GMC) contracted WallemPhilippines Shipping
Inc. (WALLEM) to ship Indian Toasted Soyabean Extraction Meal to its
warehouse in Pasig. During the weighing of the cargo in Batangas, and
after comparing its supposed weight from that indicated in the bill of
lading, it was found that there was a shortage of 295.682 M/Tons in the
shipment. The said bill of lading was prepared by GMC.

Prudential Guarantee & Assurance Inc (PRUDENTIAL), being GMCs

insurer, received a claim from the latter because of the shortage in the
shipment. Prudential paid GMC P995, 677.09, and the latter issued a
subrogation receipt to PRUDENTIAL.PRUDENTIAL thereafter sent a
demand letter to WALLEM to recover the amount paid to GMC. WALLEM
denied liability for the loss in the shipment.
PRUDENTIAL brought an action for damages against WALLEM and
Seacoast Maritime Corp. with the RTC of Makati City. The trial court ruled
that PRUDENTIAL failed to prove that there was shortage inthe shipment.
Since PRUDENTIAL failed to establish that the bill of lading was duly
executed, the true and exact weight of the shipmentwhen it was loaded
unto the vessel cannot be determined. Hence, there was no way by which
a shortage could be determined. Also, since PRUDENTIAL failed to present
the contract of insurance executed between it and GMC, it had no cause of
action against WALLEM.
On appeal, the CA reversed.
Issue: Whether or not PRUDENTIAL became subrogated to the rights of
GMC to claim indemnity against WALLEM
Held: No, PRUDENTIAL did not become subrogated to GMCs rights.
PRUDENTIAL claims that it is subrogated to the rights of GMC pursuant to
their insurance contract. For this purpose, it submitted a subrogation
receipt and a marine cargo risk note. However, this is not sufficient. As
GMCs subrogee, PRUDENTIAL can exercise only those rights granted to
GMC under the insurance contract. The contract of insurance must be
presented in evidence to indicate the extent of its coverage. By itself alone,
the subrogation receipt is not sufficient to prove the PRUDENTIALs claim
holding WALLEM liable for the loss in the shipment.