Asia Lighterage and Shipping, Inc vs CA

FACTS:
Asia Lighterage and Shipping, Inc was contracted as carrier to deliver 3,150 metric tons of Better
Western White Wheat in bulk, (US$423,192.35) to the consignee‘s (General Milling Corporation)
warehouse at Bo. Ugong, Pasig City insured by Prudential Guarantee and Assurance, Inc. against
loss/damage for P14,621,771.75.
It appears that on August 17, 1990, the transport of said cargo was suspended due to a warning of an
incoming typhoon. PSTSI III was tied down to other barges which arrived ahead of it while weathering
out the storm that night. A few days after, the barge developed a list because of a hole it sustained after
hitting an unseen protuberance underneath the water. It filed a Marine Protest on August 28, 1990 and
also secured the services of Gaspar Salvaging Corporation to refloat the barge.
The barge was then towed to ISLOFF terminal before it finally headed towards the consignee’s wharf on
September 5, 1990. Upon reaching the Sta. Mesa spillways, the barge again ran aground due to strong
current.
7 days later, a bidding was conducted to dispose of the damaged wheat retrieved & loaded on the 3 other
barges. The total proceeds from the sale of the salvaged cargo was P201,379.75.

ISSUES:
1. Whether petitioner is a common carrier.

HELD:
1. Petitioner is a common carrier.
Article 1732 of the Civil Code defines common carriers as persons, corporations, 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.
In De Guzman vs. CA it was held that the definition of common carriers in Article 1732 of the Civil
Code makes no distinction between one whose principal business activity is the carrying of persons or
goods or both, and one who does such carrying only as an ancillary activity. There is also no distinction
between a person or enterprise offering transportation service on a regular/scheduled basis and one
offering such service on an occasional, episodic or unscheduled basis.]
The test to determine a common carrier is “whether the given undertaking is a part of the business
engaged in by the carrier which he has held out to the general public as his occupation rather than the
quantity or extent of the business transacted.” In the case at bar, the petitioner admitted that it is engaged
in the business of shipping, lighterage and drayage, offering its barges to the public, despite its limited
clientele for carrying/transporting goods by water for compensation.

MINDANAO TERMINAL AND BROKERAGE SERVICE, INC.

- versus -
PHOENIX ASSURANCE COMPANY OF NEW YORK/MCGEE & CO., INC
G.R. No. 162467 May 8, 2009
Tinga, J.:

FACTS:
Del Monte Philippines, Inc. contracted petitioner Mindanao Terminal and Brokerage Service,
Inc., a stevedoring company, to load and stow a shipment of 146,288 cartons of fresh green Philippine
bananas and 15,202 cartons of fresh pineapples belonging to Del Monte Fresh Produce International,
Inc. into the cargo hold of the vessel M/V Mistrau. The vessel was docked at the port of Davao City and
the goods were to be transported by it to the port of Inchon, Korea in favor of consignee Taegu
Industries, Inc. Del Monte Produce insured the shipment under an "open cargo policy" with private
respondent Phoenix Assurance Company of New York , a non-life insurance company, and private
respondent McGee & Co. Inc. (McGee), the underwriting manager/agent of Phoenix.
The vessel set sail from the port of Davao City and arrived at the port of Inchon, Korea. It was then
discovered upon discharge that some of the cargo was in bad condition. The Marine Cargo Damage
Surveyor of Incok Loss and Average Adjuster of Korea, through its representative Byeong Yong Ahn
(Byeong), surveyed the extent of the damage of the shipment. In a survey report, it was stated that
16,069 cartons of the banana shipment and 2,185 cartons of the pineapple shipment were so damaged
that they no longer had commercial value.
Mindanao Terminal loaded and stowed the cargoes aboard the M/V Mistrau. The vessel set sail from the
port of Davao City and arrived at the port of Inchon, Korea. It was then discovered upon discharge that
some of the cargo was in bad condition.
Del Monte Produce filed a claim under the open cargo policy for the damages to its shipment. McGee’s
Marine Claims Insurance Adjuster evaluated the claim and recommended that payment in the amount of
$210,266.43 be made. Phoenix and McGee instituted an action for damages against Mindanao Terminal
After trial, the RTC held that the only participation of Mindanao Terminal was to load the cargoes on
board the M/V Mistrau under the direction and supervision of the ship’s officers, who would not have
accepted the cargoes on board the vessel and signed the foreman’s report unless they were properly
arranged and tightly secured to withstand voyage across the open seas. Accordingly, Mindanao Terminal
cannot be held liable for whatever happened to the cargoes after it had loaded and stowed them.
Moreover, citing the survey report, it was found by the RTC that the cargoes were damaged on account
of a typhoon which M/V Mistrau had encountered during the voyage. It was further held that Phoenix
and McGee had no cause of action against Mindanao Terminal because the latter, whose services were
contracted by Del Monte, a distinct corporation from Del Monte Produce, had no contract with the
assured Del Monte Produce. The RTC dismissed the complaint and awarded the counterclaim of
Mindanao Terminal in the amount of P83,945.80 as actual damages and P100,000.00 as attorney’s fees.
ISSUE:
Whether or not Phoenix and McGee have a cause of action and whether Mindanao Terminal is
liable for not having exercised extraordinary diligence in the transport and storage of the cargo.

RULING:
No, in the present case, Mindanao Terminal, as a stevedore, was only charged with the loading
and stowing of the cargoes from the pier to the ship’s cargo hold; it was never the custodian of the
shipment of Del Monte Produce. A stevedore is not a common carrier for it does not transport goods or
passengers; it is not akin to a warehouseman for it does not store goods for profit.

Philippine Airlines v. Savillo

Facts:
• Savillo was a judge of the RTC of Iloilo
• He was invited to participate in the 1993 ASEAN Seniors Annual Golf Tournament in Jakarta
Indonesia.
• So, in order to take part in such event, he purchased a ticket from PAL with the following
itinerary: Manila-Singapore-Jakarta-Singapore-Manila.
• PAL would take them from Manila to Signapore, while Singapore Airlines would take them
from Singapore to Jakarta.
• When they arrived in Singapore, Singapore Airlines rejected the tickets of Savillo because they
were not endorsed by PAL. It was explained that if Singapore Airlines honoured the tickets without
PALS’ endorsement, PAL would not pay Singapore Airlines for their passage.
• Savillo demanded compensation from both PAL and Singapore Airlines, but his efforts were
futile. He then sued PAL after 3 years, demanding moral damages.
• PAL , in its MTD, claimed that the cause of action has already prescribed invoking the Warsaw
Convention (providing for a 2 year prescriptive period). Both RTC and CA ruled against PAL.
Issues:
What is the applicable law, the Civil Code or the Warsaw Convention? Has the action prescribed?
Held:
The Civil Code is applicable. Therefore the action has not yet prescribed for the prescription period is 4
years.
If cause of action claims moral damages, not covered by Warsaw Convention. Article 19 of the Warsaw
Convention provides for liability on the part of a carrier for “damages occasioned by delay in the
transportation by air of passengers, baggage or goods. Article 24 excludes other remedies by further
providing that “(1) in the cases covered by articles 18 and 19, any action for damages, however founded,
can only be brought subject to the conditions and limits set out in this convention.” Therefore, a claim
covered by the Warsaw Convention can no longer be recovered under local law, if the statue of
limitations of two years has elapsed.
 G.R. No. 171092. March 15, 2010.
EDNA DIAGO LHUILLIER, petitioner, vs. BRITISH AIRWAYS, respondent.
FACTS: On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint for damages against
respondent British Airways before the Regional Trial Court (RTC) of Makati City. The tortuous conduct
by the flight attendants of said Airways, which prompted petitioner to file a case for damages, allegedly
transpired when petitioner boarded respondent’s flight 548 from London, United Kingdom to Rome,
Italy. On May 30, 2005, respondent, by way of special appearance through counsel, filed a Motion to
Dismiss on grounds of lack of jurisdiction over the case and over the person of the respondent.
Respondent alleged that only the courts of London, United Kingdom or Rome, Italy, have jurisdiction
over the complaint for damages pursuant to the Warsaw Convention, Article 28(1) of which provides:
“An action for damages must be brought at the option of the plaintiff, either before the court of domicile
of the carrier or his principal place of business, or where he has a place of business through which the
contract has been made, or before the court of the place of destination.”
ISSUE: Whether or not Philippines, a signatory to the Warsaw Convention, should adhere to the
provision of the Warsaw Convention in the determination of its jurisdiction with respect to a case for
damages involving a tortuous conduct committed by an airline personnel while in an international carrier
against a Filipino citizen.
HELD: Yes. It is settled that the Warsaw Convention has the force and effect of law in this country.
In Santos III v. Northwest Orient Airlines, 210 SCRA 256 (1992), we held that: The Republic of the
Philippines is a party to the Convention for the Unification of Certain Rules Relating to International
Transportation by Air, otherwise known as 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.

GR No. 172682, July 27, 2016

Sulpicio Lines Inc. (Petitioner) v Napoleon Sisante (Respondents)
First Division
Ponente: Bersamin, J.

Nature of Action: Action for damages for breach of contract of carriage.

FACTS:
The M/V Princess of the Orient, a passenger vessel owned and operated by the petitioner, sank near
Fortune Island in Batangas. Of the 388 recorded passengers, 150 were lost. Napoleon Sesante, then a
member of the Philippine National Police (PNP) and a lawyer, was one of the passengers who survived
the sinking. He sued the petitioner for breach of contract and damages. In its defense, the petitioner
insisted on the seaworthiness of the M/V Princess of the Orient due to its having been cleared to sail
from the Port of Manila by the proper authorities; that the sinking had been due to force majeure; that it
had not been negligent; and that its officers and crew had also not been negligent because they had made
preparations to abandon the vessel because they had launched life rafts and had provided the passengers
assistance in that regard. The RTC rendered judgement in favor of plaintiff Napoleon Sesante and
ordered defendant to pay temperate and moral damages. The RTC observed that the petitioner, being
negligent, was liable to Sesante pursuant to Articles 1739 and 1759 of the Civil Code. The CA reduced
the award of the temperate damages to the approximate cost of Sesante's lost personal belongings and
held that petitioner remained civilly liable.
The petitioner has attributed the sinking of the vessel to the storm notwithstanding its position on the
seaworthiness of M/V Princess of the Orient. Yet, the findings of the BMI directly contradicted the
petitioner's attribution, as the BMI found that petitioner’s fault was the immediate and proximate cause
of the sinking due to the Captain's erroneous maneuvers of the M/V Princess of the Orient minutes
before she sunk.
ISSUE:
Whether or not the petitioner is liable for moral damages.

RULING:
Yes. The Court awarded moral damages due to the totality of the negligence by the officers and crew of
the Princess of the Orient coupled with the seeming indifference of the petitioner to render assistance to
Sesante.
The petitioner argues that moral damages could be meted against a common carrier only in the following
instances, to wit: (1) in the situations enumerated by Article 2201 of the Civil Code; (2) in cases of the
death of a passenger; or (3) where there was bad faith on the part of the common carrier. It contends that
none of these instances obtained herein; hence, the award should be deleted.
We agree with the petitioner that moral damages may be recovered in an action upon breach of contract
of carriage only when: (a) death of a passenger results, or (b) it is proved that the carrier was guilty of
fraud and bad faith, even if death does not result. However, moral damages may be awarded if the
contractual breach is found to be wanton and deliberately injurious, or if the one responsible acted
fraudulently or with malice or bad faith.
The negligent acts of the officers and crew of M/V Princess of the Orient could not be ignored in view
of the extraordinary duty of the common carrier to ensure the safety of the passengers. The totality of the
negligence by the officers and crew of M/V Princess of the Orient, coupled with the seeming
indifference of the petitioner to render assistance to Sesante, warranted the award of moral damages.