BRITISH AIRWAYS, petitioner, vs.

COURT OF APPEALS, GOP MAHTANI, and PHILIPPINE

AIRLINES,respondents.
Petitioner:BritishAirways
Respondents:MahtaniandPAL
Facts:
MahtanidecidedtovisithisrelativesinIndia.Inanticipationofhisvisit,heobtainedservicesofMrGumarto
preparehistravelplans.MrGumarpurchasedaticketfromBA(BritishAirways).SinceBAhadnodirect
flightsfromManilatoIndia,MahtanihadtotakeaflighttoHongkongviaPAL,anduponarrivalinHongkong
hehadtotakeaconnectingflighttoIndiaonboardBA.
Priortohisdeparture,MahtanicheckedinatthePALcounterinManilahistwopiecesofluggageconfidentthat
theluggageswouldbetransferredtoBAflightboundforIndia.Unfotunately,whenMahtaniarrivedinIndia,he
discoveredthathisluggagewasmissingandthatuponinquiryfromBArepresentatives,hewastoldthatthe
sammighthavebeendivertedtoLondon.Afterwaitingforhisluggaeforoneweek,BAfinallyadvisedhimto
fileaclaimbyaccomplishingthePROPERTYIRREGULARITYREPORT
InthePhilippines,MahtanifiledacomplaintagainsttheBAandMrGumarintrialcourt.
BAfiledanswerwithcounterclaimthatMahtanididnothaveacauseofactionagainstit.Baalsofiledathird
partycomplaintagainstPALallegingthatthereasonforthenontransferfortheluggagewasduetothelatters
latearrivalinHongkong,thusleavinghardlyanytimeforthepropertransferofMahtanisluggagetotheBA
aircraftboundforIndia.
PAL filed an answer alleged that there was an adequate time to transfer the luggage to BA facilities in
Hongkong.Also,thetransferofluggageoHongkongauthoritiesshouldbeconsideredastransfertoBA
TrialCourtrenderedinfavorofMahtaniagainstthedefendantawardingdamages.BAappealedtotheCAbut
wasdenied.Hencethispetition:BAisassailingthatthereisnobasisinawardingcompensatorydamages
separateforthelossoftwopiecesofluggage,aswellasthereisnodeclarationofhighervaluationwithrespect
totheluggageofMahtani.Therewasacondition:Liabilityforloss,delay,ordamagetobaggageislimited
unlessahighervalueisdeclaredinadvance
Issue/s:
1. Whoshallbeheldliableforthelossoftheluggage
2. Whetherornotdeclarationofhighervaluationisneededtobeawardedhigheramount
Held:
TheCourtofAppeals'rulingregardingtheactualvalueoftheluggageisaquestionoffact,afindingnot
reviewable by the Supreme Court. The Court cannot agree with the dismissal of the thirdcomplaint. The
contractual relationship between petitioner and respondent PAL is one of agency, the former being the
principal,sinceitwastheonewhichissuedtheconfirmedticket,andthelattertheagent.Sincetheinstant
petitionwasbasedonbreachofcontractofcarriage,privaterespondentcanonlysuepetitioneralone,andnot
respondentPAL,sincethelatterwasnotapartytothecontract.However,respondentPALisnotrelievedfrom
anyliabilityduetoanyofitsnegligentacts.Itisbutlogical,fairandequitabletoallowpetitionertosue
respondentPALforindemnification,ifitisproventhatthelatter'snegligencewastheproximatecauseof

privaterespondent'sunfortunateexperience,insteadoftotallyabsolvingrespondentPALfromanyliability.

1.DAMAGES,LIABILITYOFAIRLINEFORMISPLACEDLUGGAGE.Intheinstantcase,itisapparent
thatthecontractofcarriagewasbetweenMahtaniandBA.Moreover,itisindubitablethathisluggagenever
arrivedinBombayontime.Therefore,asinanumberofcaseswehaveassessedtheairlines'culpabilityinthe
formofdamagesforbreachofcontractinvolvingmisplacedluggage.
2. COMMON CARRIERS; AIRLINE'S CONTRACT OF CARRIAGE; TYPES. The nature of anairline's
contractofcarriagepartakesoftwotypes,namely:acontracttodeliveracargoormerchandisetoitsdestination
andacontracttotransportpassengerstotheirdestination.Abusinessintendedtoservethetravellingpublic
primarily,itisimbuedwithpublicinterest,hence,thelawgoverningcommoncarriersimposesanexacting
standard.Neglectormalfeasancebythecarrier'semployeescouldpredictablyfurnishbasesforanactionfor
damages.
3. LIABILITYNOTLIMITEDBYARTICLE22(1)OFTHEWARSAWCONVENTION. Admittedly,ina
contractofaircarriageadeclarationbythepassengerofahighervalueisneededtorecoveragreateramount.
(Article22[1]oftheWarsawConvention).Americanjurisprudenceprovidesthatanaircarrierisnotliablefor
thelossofbaggageinanamountinexcessofthelimitsspecifiedinthetariffwhichwasfiledwiththeproper
authorities,suchtariffbeingbindingonthepassengerregardlessofthepassenger'slackofknowledgethereofor
assent thereto. This doctrine is recognized in this jurisdiction. Notwithstanding the foregoing, we have,
nevertheless,ruledagainstblindrelianceonadhesioncontractswherethefactsandcircumstancesjustifythat
theyshouldbedisregarded.
4. BENEFITS OF LIMITED LIABILITY, SUBJECT TO WAIVER; CASE AT BAR. Benefits of limited
liabilityaresubjecttowaiversuchaswhentheaircarrierfailedtoraisetimelyobjectionsduringthetrialwhen
questionsandanswersregardingtheactualclaimsanddamagessustainedbythepassengerwereasked.Given
theforegoingpostulates,theinescapableconclusionisthatBAhadwaivedthedefenseoflimitedliabilitywhen
itallowedMahtanitotestifyastotheactualdamagesheincurredduetothemisplacementofhisluggage,w
ithoutanyobjection.Itisawellsettleddoctrinethatwheretheproponentoffersevidencedeemedbycounselof
theadversepartytobeinadmissibleforanyreason,thelatterhastherighttoobject.However,suchrightisa
mereprivilegewhichcanbewaived.Necessarily,theobjectionmustbemadeattheearliestopportunity,lest
silencewhenthereisopportunitytospeakmayoperateasawaiverofobjections.BAhaspreciselyfailedinthis
regard.TocompoundmattersforBA,itscounselfailed,notonlytointerposeatimelyobjection,buteven
conductedhisowncrossexaminationaswell.