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Summary: While the plane was on flight, 4 people declared a hold-up which included the stealing of valuables owned by Quisumbing, Sr., one of the passengers. Upon
landing, the hold-uppers escaped.

Doctrine: Philippine Airlines is not liable for the loss of Quisumbing’s valuables as the event was a force majeure. The hijackers did not board an airplane through a
blatant display of firepower and violent fury. The robbers were able to gain entrance to the plane with the guns they used already in their possession, which fact could
not have been prevented nor avoided by the defendant. These circumstances, when taken into account, would lead to the conclusion that such incident is a force
majeure. The Court ruled that PAL could not be faulted for want of diligence, particularly for failing to take positive measures. The failure to take positive measure to
inform the Civil Aeronautics Board were not negligent acts sufficient to overcome the force majeure nature of the armed robbery. Moreover, the lives of the rest of the
passengers and crew were more important than their properties.


The Warsaw Convention governs the availment of the liability limitations where the baggage check is combined with or incorporated in the passenger ticket. In the case
at bar, the baggage check is combined with the passenger ticket in one document of carriage. The passenger ticket complies with Article 3, which provides:

(c) a notice to the effect that, if the passenger's journey involves an ultimate destination or stop in a country other than the country of departure, the Warsaw Convention
may be applicable and that the Convention governs and in most cases limits the liability of carriers for death or personal injury and in respect of loss of or damage to

The provisions in the plane ticket are sufficient to govern the limitations of liabilities of the airline for loss of luggage. The passenger, upon contracting with the airline
and receiving the plane ticket, was expected to be vigilant insofar as his luggage is concerned. If the passenger fails to adduce evidence to overcome the stipulations,
he cannot avoid the application of the liability limitations.

The facts show that the private respondent actually refused to register the attache case and chose to take it with him despite having been ordered by the PANAM agent
to check it in. In attempting to avoid registering the luggage by going back to the line, private respondent manifested a disregard of airline rules on allowable handcarried
baggages. Prudence of a reasonably careful person also dictates that cash and jewelry should be removed from checked-in-luggage and placed in one's pockets or in
a handcarried Manila-paper or plastic envelope.

The alleged lack of enough time for him to make a declaration of a higher value and to pay the corresponding supplementary charges cannot justify his failure to comply
with the requirement that will exclude the application of limited liability.

Plane ticket is what is known as a contract of "adhesion", in regards which it has been said that contracts of adhesion wherein one party imposes a ready-made form
of contract on the other, as the plane ticket in the case at bar, are contracts 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.

If the loss of life or property is caused by the gross negligence or arbitrary acts of the airline or the contents of the lost luggage are proved by satisfactory evidence
other than the self-serving declarations of one party, the Court will not hesitate to disregard the fine print in a contract of adhesion. Otherwise, the Court is constrained
to rule and to enforce the contract as it is the only reasonable basis to arrive at a just award.


The doctrine last clear chance, stated broadly, is that the negligence of the plaintiff does not preclude a recovery for the negligence of the defendant where it appears
that the defendant, by exercising reasonable care and prudence, might have avoided injurious consequences to the plaintiff notwithstanding the plaintiff's negligence.
In other words, the doctrine of last clear chance means that even though a person's own acts may have placed him in a position of peril, and an injury results, the
injured person is entitled to recovery. As the doctrine is usually stated, a person who has the last clear chance or opportunity of avoiding an accident, notwithstanding
the negligent acts of his opponent or that of a third person imputed to the opponent is considered in law solely responsible for the consequences of the accident.

All premises considered, the Court is convinced that the respondent Court committed an error of law in applying the doctrine of last clear chance as between the
defendants, since the case at bar is not a suit between the owners and drivers of the colliding vehicles but a suit brought by the heirs of the deceased passengers
against both owners and drivers of the colliding vehicles. Therefore, the respondent court erred in absolving the owner and driver of the cargo truck from liability.


Nueca was not a passenger thus, MRC did not owe him extraordinary diligence. A passenger is one who travels in a public conveyance by virtue of a contract, express
or implied, with the carrier as to the payment of the fare, or that which is accepted as an equivalent. The relation of passenger and carrier commences when one puts
himself in the care of the carrier, or directly under its control, with the bona fide intention of becoming a passenger, and is accepted as such by the carrier – as where
he makes a contract for transportation and presents himself at the proper place and in a proper manner to be transported. Even disregarding the matter of tickets, and
assuming Nueca intended to be a passenger, he was never accepted as such by MRC as he did not present himself at the proper place and in a proper manner to be

The liability of railroad companies to persons upon their premises is determined by the general rules of negligence relating to duties of owners/occupiers of property.
While railroad companies are not bound to the same degree of care in regard to strangers who are unlawfully upon the premises of its passengers, it may still be liable
to such strangers for negligent or tortious acts. Here, Nueca was not on the track, but either unlawfully inside the baggage car or beside the track. It is normal for people
to walk on the track or roadbed when there is no oncoming train and to walk beside the track when a train passes. This practice is tolerated by MRC. Generally, MRC’s
stations are not enclosed, and is easily accessible to the public. An invitation to stay in the premises is implied from the lack of prohibition to outsiders to keep off the
premises, hence, a stranger who is injured by a derailed train while staying beside a railroad track is not guilty of contributory negligence.

MRC is negligent; doctrine of res ipsa loquitur applied. The train was under the complete control of the railroad company at the time of the accident. The baggage car
would not have been derailed if the train had been properly operated. Res ipsa loquitur is a rule of evidence peculiar to the law of negligence which recognizes that
prima facie negligence may be established without direct proof and furnishes a substitute for specific proof of negligence.


In the case at bar, Pestaño, as a professional driver operating a public transport bus, should have anticipated that overtaking at a junction was a perilous maneuver
and should thus have exercised extreme caution.

Under Articles 2180 and 2176 of the Civil Code, owners and managers are responsible for damages caused by their employees. When an injury is caused by the
negligence of a servant or an employee, the master or employer is presumed to be negligent either in the selection or in the supervision of that employee. This
presumption may be overcome only by satisfactorily showing that the employer exercised the care and the diligence of a good father of a family in the selection and
the supervision of its employee. The CA said that allowing Pestaño to ply his route with a defective speedometer showed laxity on the part of Metro Cebu in the
operation of its business and in the supervision of its employees. The negligence alluded to here is in its supervision over its driver, not in that which directly caused
the accident. The fact that Pestaño was able to use a bus with a faulty speedometer shows that Metro Cebu was remiss in the supervision of its employees and in the
proper care of its vehicles. It had thus failed to conduct its business with the diligence required by law


Doctrine of res ipsa loquitur (the thing speaks for itself) contemplates that where the thing which causes injury is shown to be under the management of the defendant,
and the accident is such as in the ordinary course of things does not happen if those who have the management use proper care, it affords reasonable evidence, in
the absence of an explanation by the defendant, that the accident arose from want of care. The doctrine recognizes that parties may establish prima facie negligence
without direct proof and allows the principle to substitute for specific proof of negligence. This is invoked when under the circumstances, direct evidence is absent and
not readily available.

Petitioner did not have direct evidence on what transpired within as the officers and crew maneuvered the vessel to its berthing place. Applying now the above, there
exists a presumption of negligence against private respondents which we opine the latter failed to overcome.


While it may be true that the tire that blew-up was still good because the grooves of the tire were still visible, this fact alone does not make the explosion of the tire a
fortuitous event. No evidence was presented to show that the accident was due to adverse road conditions or that precautions were taken by the jeepney driver to
compensate for any conditions liable to cause accidents. The record shows that the jeepney was running at a very fast speed and was overloaded before the accident.
The sudden blowing up, therefore, could have been caused by too much air pressure injected into the tire plus the fact that the jeepney was overloaded and speeding
at the time of the accident. Common carriers should teach their drivers not to overload their vehicles, not to exceed safe and legal speed limits, and to know the correct
measures to take when a tire blows up thus insuring the safety of passengers at all times.

One is considered as force majeure when its occurrence (1) is independent of human will, (2) is impossible to foresee or, if foreseeable, impossible to avoid, (3) renders
it impossible for debtor to fulfill his obligation in a normal manner, and (4) is free from any participation from the debtor. The instant case cannot be considered as one
caused by force majeure.

The source of a common carrier’s liability is the contract of carriage and by entering into such contract, common carrier binds itself to carry the passengers safely as
far as human care and foresight can provide, using utmost diligence of a very cautious person, with due regard for all circumstances.

Under Article 1989 of the New Civil Code, the acts an agent beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or
impliedly. Furthermore, when the third person (herein petitioner) knows that the agent was acting beyond his power or authority, the principal cannot be held liable for
the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages from the agent, unless the latter
undertook to secure the principal's ratification.

Petitioner knew there was a strong possibility that he could not use the subject ticket, so much so that he bought a back-up ticket to ensure his departure. Should there
be a finding of bad faith, it should be on the petitioner. What the employees of PAL did was one of simple negligence. No injury resulted on the part of petitioner.


While a passenger is entitled to protection from personal violence by the carrier or its agents or employees, since the contract of transportation obligates the carrier to
transport a passenger safely to his destination, the responsibility of the carrier extends only to those acts that the carrier could foresee or avoid through the exercise of
the degree of care and diligence required of it. In the present case, the act of the train guard of the Manila Railroad Company in shooting the passenger (because of a
personal grudge nurtured against the latter since the Japanese occupation) was entirely unforseeable by the Manila Railroad Co. The latter had no means to ascertain
or anticipate that the two would meet, nor could it reasonably forsee every personal rancor that might exist between each one of its many employees and any one of
the thousands of eventual passengers riding in its trains. The shooting in question was therefore "caso fortuito" within the definition of Art. 1105 of the Old Civil
Code (which is the law applicable at that time), being both unforeseeable and inevitable under the given circumstances; and pursuant to established doctrine, the
resulting breach of the company's contract of safe carriage with the deceased was excused thereby.


The running amuck of the passenger was the proximate cause of the incident as it triggered off a commotion and panic among the passengers such that the passengers
started running to the sole exit shoving each other resulting in the falling off the bus by passengers Beter and Rautraut causing them fatal injuries. The sudden act of
the passenger who stabbed another passenger in the bus is within the context of force majeure. However, in order that a common carrier may be absolved from liability
in case of force majeure, it is not enough that the accident was caused by force majeure. The common carrier must still prove that it was not negligent in causing the
injuries resulting from such accident. In this case, Bachelor was negligent.

Considering the factual findings of the Court of Appeals-the bus driver did not immediately stop the bus at the height of the commotion; the bus was speeding from a
full stop; the victims fell from the bus door when it was opened or gave way while the bus was still running; the conductor panicked and blew his whistle after people
had already fallen off the bus; and the bus was not properly equipped with doors in accordance with law.


The defense put up by petitioner is that since Abello was not its employee it should not be held responsible for his acts. This defense was correctly overruled by the
trial court, considering the provisions of Article 1763 of the Civil Code and section 48(b) of the Motor Vehicle Law, which respectively provide as follows:

ART. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the willful acts or negligence of other passengers or of strangers, if the
common carrier's employees through the exercise of the diligence of a good father of a family could have prevented or stopped the act or omission.

Sec. 48(b). No professional chauffeur shall permit any unlicensed person to drive the motor vehicle under his control, or permit a person, sitting beside him or in any
other part of the car, to interfere with him in the operation of the motor vehicle, by allowing said person to take hold of the steering wheel, or in any other manner take
part in the manipulation or control of the car.


Negligence is a conduct that creates undue risk of harm to another. It is the failure to observe that degree of care, precaution and vigilance that the circumstances
justly demand, whereby that other person suffers injury.

Petitioner’s vessel was carrying chemical cargo. While knowing that their vessel was carrying dangerous inflammable chemicals, its officers and crew failed to take all
the necessary precautions to prevent an accident. Petitioner was, therefore, negligent. Hence, the owner or the person in possession and control of a vessel and the
vessel are liable for all natural and proximate damage caused to persons and property by reason of negligent management or navigation.
The three elements of quasi delict are: (a) damages suffered by the plaintiff, (b) fault or negligence of the defendant, and (c) the connection of cause and effect between
the fault or negligence of the defendant and the damages inflicted on the plaintiff. All these elements were established in this case. Knowing fully well that it was carrying
dangerous chemicals, petitioner was negligent in not taking all the necessary precautions in transporting the cargo.


Cathay cannot argue that their liability is limited upon the fact that Singson was a “chance passenger”. The round trip ticket issued by the carrier to the passenger was
in itself a complete written contract by and between the carrier and the passenger. It had all the elements of a complete written contract. In fact, the contract of carriage
in the instant case was already partially executed as the carrier complied with its obligation to transport the passenger to his destination.


A common carrier, by stipulations inserted in the bill of lading, can limit its liability for the loss of or damage to the cargo to an agreed valuation. Three kinds of stipulations
have often been made in a bill of lading:

 One exempting the carrier from any and all liability for loss or damage occasioned by its own negligence.

 One providing for an unqualified limitation of such liability to an agreed valuation.

 One limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and pays a higher rate of freight.

According to an almost uniform weight of authority, the first and second kinds of stipulations are invalid as being contrary to public policy, but the third is valid and

If a common carrier gives to a shipper the choice of two rates and if the shipper makes such a choice, understandingly and freely, and names his valuation, he cannot
thereafter recover more than the value which he thus places upon his property. A limitation of liability based upon an agreed value does not conflict with any sound
principle of public policy; and it is not conformable to plain principles of justice that a shipper may understate value in order to reduce the rate and then recover a larger
value in case of loss.


This is for the simple reason that while a manifest cargo is a declaration of the entire cargo, a bill of lading is but a declaration of a specific part of the cargo and is a
matter of business convenience based exclusively on a contract.

The purpose of a manifest cargo is to furnish the customs officers with a list to check against, to inform our revenue officers what goods are being brought into the
country, and to provide a safeguard against goods being brought into this country on a vessel and then smuggled ashore. It is absolutely essential to the exportation
or importation of property in all vessels.

A bill of lading, on the other hand, is ordinarily and merely a convenient commercial instrument designed to protect the importer or consignee.

The purpose served by the manifest is far different from that of the bill of lading, the Court cannot accept or place an imprimatur on the contention of petitioner that the
entries in the bill of lading adequately supplied the deficiency of the manifest and cured it of its infirmity


Transhipment is defined as the act of taking cargo out of one ship and loading it in another or; 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.

It is a long standing jurisprudential rule that a bill of lading operates both as a receipt and as a contract. It is a receipt for the goods shipped and a contract to transport
and deliver the same as therein stipulated.

The holding in most jurisdictions has been that a shipper who receives a bill of lading without objection after an opportunity to inspect it, and permits the carrier to act
on it by proceeding with the shipment is presumed to have accepted it as correctly stating the contract and to have assented to its terms. In other words, the 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 terms.


Except as may be prohibited by law, there is nothing to prevent an inverse order of events, that is, the execution of the bill of lading even prior to actual possession and
control by the carrier of the cargo to be transported. There is no law which requires that the delivery of the goods for carriage and the issuance of the covering bill of
lading must coincide in point of time or, for that matter, that the former should precede the latter. While we agree with petitioners' statement that "an airway bill estops
the carrier from denying receipt of goods of the quantity and quality described in the bill," a further reading and a more faithful quotation of the authority cited would
reveal that "(a) bill of lading may contain constituent elements of estoppel and thus become something more than a contract between the shipper and the carrier. . . .
(However), as between the shipper and the carrier, when no goods have been delivered for shipment no recitals in the bill can estop the carrier from showing the true
facts . . . Between the consignor of goods and receiving carrier, recitals in a bill of lading as to the goods shipped raise only a rebuttable presumption that such goods
were delivered for shipment. As between the consignor and a receiving carrier, the fact must outweigh the recital."

There is a holding in most jurisdictions that the acceptance of a bill of lading without dissent raises a presumption that all 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 terms. This rule applies
with particular force where a shipper accepts a bill of lading with full knowledge of its contents, and acceptance under such circumstances makes it a binding contract.
In order that any presumption of assent to a stipulation in a bill of lading limiting the liability of a carrier may arise, it must appear that the clause containing this exemption
from liability plainly formed a part of the contract contained in the bill of lading. A stipulation printed on the back of a receipt or bill of lading or on papers attached to
such receipt will be quite as effective as if printed on its face, if it is shown that the consignor knew of its terms. Thus, where a shipper accepts a receipt which states
that its conditions are to be found on the back, such receipt comes within the general rule, and the shipper is held to have accepted and to be bound by the conditions
there to be found.

Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the
carrier. This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner exercises the right
of stoppage in transitu, and terminates only after the lapse of a reasonable time for the acceptance, of the goods by the consignee or such other person entitled to
receive them. And, there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier
for the purpose of their immediate transportation and the carrier has accepted them. Where such a delivery has thus been accepted by the carrier, the liability of the
common carrier commences. Only when such fact of delivery has been unequivocally established can the liability for loss, destruction or deterioration of goods in the
custody of the carrier, absent the excepting causes under Article 1734, attach and the presumption of fault of the carrier under Article 1735 be invoked.


The parties may, if they see fit, fix by agreement a shorter time for the bringing of suit on the contract than that provided by the statute of limitations, and if the period
therein limited is reasonable, suit must be brought within that time or the shipper’s right of action will be barred.

Such a provision is prohibited by no rule of law nor by any consideration of public policy. Nor is it at all affected by the existence within the jurisdiction of a statutory or
constitutional prohibition against carriers limiting or restricting their common law liability, since it is held that such a stipulation 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. But the limitation must be reasonable, and if the period of time specified is such that under the facts of the particular case the
shipper could not with reasonable diligence be enabled to bring suit before it expired, the attempted limitation is void. Thus, a provision that suit must be brought within
thirty days after the loss or damage occurred has been held unreasonable. carrier cannot limit its liability for injury to or loss of goods shipped where such injury or loss
was caused by its own negligence.


It cannot be said that a contract has been entered into between a passenger and the common carrier, embodying the conditions as printed at the back of the ticket.
The fact that those conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that the passenger
was aware of those conditions such that he had "fairly and freely agreed" to those conditions. The passenger is considered not having agreed to the stipulation on the
ticket, as manifested by the fact that he did not sign the ticket.


The total liability of the Carrier for lost or damaged baggage of the passenger is LIMITED TO P100.00 for each ticket unless a passenger declares a higher valuation
in excess of P100.00, but not in excess, however, of a total valuation of P1,000.00 and additional charges are paid pursuant to Carrier's tariffs. There is no dispute that
petitioner did not declare any higher value for his luggage, much less did he pay any additional transportation charge.
While it may be true that the passenger had not signed the plane ticket, he is nevertheless bound by the provisions thereof. "Such provisions have been held to be a
part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation". It is what is known
as a contract of "adhesion", in regards which it has been said that contracts of adhesion wherein one party imposes a ready made form of contract on the other, as the
plane ticket in the case at bar, are contracts 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. A contract limiting liability upon an agreed valuation does not offend against the policy of the law forbidding one from contracting against his own negligence.


While it is true that in the bill of lading there is such stipulation that the liability of the carrier is US$500.00 per package/container/customary freight, there is an exception,
that is, when the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading.

In no event shall the carrier be liable for more than the amount of damage actually sustained. Neither the carrier nor the ship shall be responsible in any event for loss
or damage to or in connection with the transportation of the goods if the nature or value thereof has been knowingly and fraudulently misstated by the shipper in the
bill of lading. In this case the description of the nature and the value of the goods shipped are declared and reflected in the bills of lading. Thus, it is the basis of the
liability of the carrier as the actual value of the loss.


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 common carrier to the consignee is governed primarily by the Civil
Code. Applying the Civil Code provisions (Article 1749 and 1750) the stipulation in the bill of lading limiting the liability of the common carrier for loss or damages to the
shipment covered by said rule unless the shipper declares the value of the shipment and pays additional charges is valid and binding on the consignee.


Basic is the rule that a stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater
value, is binding. Furthermore, 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 fairly and freely agreed upon.

In this case, the award based on the alleged market value of the goods is erroneous. It is provided in a clause in the BOL that its liability is limited to US$2.00/kilo. The
consignee also admits in the memorandum that the value of the goods does not appear in the bill of lading. Hence, the stipulation on the carrier’s limited liability applies.


In the bill of lading, the carrier made it clear that all claims for which it may be liable shall be adjusted and settled on the basis of the shipper's net invoice cost plus
freight and insurance premiums, if paid, and in no event shall the carrier be liable for any loss of possible profits or any consequential loss. Its liability would only be up
to One Hundred Thousand (Y100,000.00) Yen. However, the shipper, 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.

To defeat the carriers’ limited liability, the aforecited Clause 18 of the bill of lading requires that the shipper should have declared in writing a higher valuation of its
goods before receipt thereof by the carrier and insert the said declaration in the bill of lading, with the extra freight paid. These requirements in the bill of lading were
never complied with by the shipper, hence, the liability of the carrier under the limited liability clause stands.


American jurisprudence provides that an air carrier is not liable for the loss of baggage in an amount in excess of the limits specified in the tariff which was filed with
the proper authorities, such tariff being binding, on the passenger regardless of the passenger's lack of knowledge thereof or assent thereto. This doctrine is recognized
in this jurisdiction.

The Court, in addition, held that benefits of limited liability are subject to waiver such as when the air carrier failed to raise timely objections during the trial when
questions and answers regarding the actual claims and damages sustained by the passenger were asked. Given the foregoing postulates, the inescapable conclusion
is that BA had waived the defense of limited liability when it allowed Mahtani to testify as to the actual damages he incurred due to the misplacement of his luggage,
without any objection.

The contract of transportation was exclusively between the passenger and common carrier BA. The latter merely endorsing the Manila to Hong Kong log of the former’s
journey to PAL, as its subcontractor or agent. Conditions of contracts were one of continuous air transportation. Well-settled rule that an agent is also responsible for
any negligence in the performance of its function and is liable for damages which the principal may suffer by reason of its negligent act. When an action is based on
breach of contract of carriage, the passenger can only sue BA and not PAL, since the latter was not a party in the contract.

The contention of BA with respect to limited liability was overruled although it is recognized in the Philippines, stating that BA had waived the defense of limited liability
when it allowed Mahtani(the passenger) to testify as to the actual damages he incurred due to the misplacement of his luggage, without any objection.


The Supreme Court held that the condition printed at the back of the ticket limiting the venue of actions arising from the contract is void and unenforceable because it
subverts the public policy on transfer of venue of proceeding. Furthermore, it will prejudice the rights and interests of innumerable passengers located in different places
of the country, who, under the condition, will have to file suits against petitioner only in the City of Cebu. Thus, such condition will likewise defeat the ends of justice.


The Warsaw 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, Otherwise, an air carrier would be exempt from any liability for damages in the event of its absolute refusal, in bad
faith, to comply with a contract of carriage, which is absurd. 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, belatedly, it is true, but without appreciable damage.

There can be no doubt that Dr. Pablo 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. Certainly, the
compensation for the injury suffered by Dr. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport
of baggage.

She is not, of course, entitled to be compensated for loss or damage to her luggage. As already mentioned, her baggage was ultimately delivered to her in Manila,
tardily, but safely.


Petitioner cites the case of Ong Yiu, where the Court sustained the validity of a printed stipulation at the back of an airline ticket limiting the liability of the carrier for lost
baggage to a specified amount and ruled that the carrier's liability was limited to said amount since the passenger did not declare a higher value, much less pay
additional charges. The petition has merit, and Ong Yiu is applicable to the instant case.

In view thereof petitioner's liability for the lost baggage is limited to $20.00 per kilo or $600.00, as stipulated at the back of the ticket.


It is significant to note that the contract of air transportation was between CAL 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. Warsaw Convention provides that: 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 contracts.

Since he had secured confirmation of his flight not only once, but twice by personally going to the carrier’s offices where he was consistently assured of a seat thereon
PAL’s negligence was so gross and reckless that it amounted to bad faith. In view of the foregoing, we rule that moral and exemplary damages were properly awarded
by the lower courts.

The Warsaw Convention is a treaty commitment voluntarily assumed by the Philippine government and, as such, has the force and effect of law in this country. By its
own terms, it applies to all international transportation of persons performed by aircraft for hire. Since the flight involved in this case is international, it is subject to the
provisions of the Warsaw Convention.

The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract or carriage or, specifically in this case, the ticket.
Examination of 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 petitioner from Manila to San Francisco. Manila should therefore be considered merely an agreed
stopping place and not the destination. Hence, Philippine courts have no jurisdiction over the case.


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 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. Thus, the action for damages could still be filed.

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. Verily, respondent filed his complaint more than two (2) years later, but it is obvious that respondent was forestalled from immediately filing
an action by but not giving in to his demands.

Also, 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


In Air France v. Gillego, this Court ruled that 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 nonperformance by the carrier

In FGU Insurance Corporation v. G.P. Sarmiento Trucking Corporation, the Court recognized the interests of the injured party in breach of contract cases: A breach
upon the contract confers upon the injured party a valid cause for recovering that which may have been lost or suffered.

Moral and exemplary damages are not ordinarily awarded in breach of contract cases. This Court has held that damages may be awarded only when the breach is
wanton and deliberately injurious, or the one responsible had acted fraudulently or with malice or bad faith

However, the award of P5 million as moral damages is excessive, considering that the highest amount ever awarded by this Court for moral damages in cases involving
airlines is P500,000. As We said in Air France v. Gillego, the mere fact that respondent was a Congressman should not result in an automatic increase in the moral
and exemplary damages."

We find that upon the facts established, the amount of P500,000 as moral damages is reasonable to obviate the moral suffering that respondents have undergone.
With regard to exemplary damages, jurisprudence shows that P50,000 is sufficient to deter similar acts of bad faith attributable to airline representatives


The Supreme Court held that this case actually involves a contract of carriage. Petitioners, the Fabres, did not have to be engaged in the business of public transportation
for the provisions of the Civil Code on common carriers to apply to them. Art. 1732 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 exists a contract of carriage between Air France and Carrascoso. There was a contract to furnish Carrasocoso a first class passage; Second, That said contract
was breached when Air France failed to furnish first class transportation at Bangkok; and Third, that there was bad faith when Air France’s employee compelled
Carrascoso to leave his first class accommodation berth “after he was already, seated” and to take a seat in the tourist class, by reason of which he suffered
inconvenience, embarrassments and humiliations, thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral

There is also a tortuous act based on culpa aquiliana. Passengers do not contract merely for transportation. They have a right to be treated by the carrier’s employees
with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from
such employee


This is because under the said contract of carriage, the petitioners assumed the express obligation to transport the respondent and his wife to their destination safely
and to observe extraordinary diligence with due regard for all circumstances. Any injury suffered by the passengers in the course thereof is immediately attributable to
the negligence of the carrier. Upon the happening of the accident, the presumption of negligence at once arises, and it becomes the duty of a common carrier to prove
that he observed extraordinary diligence in the care of his passengers.


Philamgen asserted that the bills of lading with prescriptive period 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 Philamgen’s failure to deny under oath the existence of the bills of lading
was tantamount to an admission of its existence. In Ong Yu vs CA SC held 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 said ruled 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.


Carriage of Goods by Sea Act, in its Section 3, paragraph 6, 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

The substance of its argument is 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.

These arguments might merit weightier consideration were it not for the fact that the question has already received a definitive answer. To which, the Supreme Court
ruled 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.

Similarly, we now 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.


A voyage charter being a private carriage, the parties may freely contract respecting liability for damage to the goods and other matters. The basic principle is that "the
responsibility for cargo loss falls on the one who agreed to perform the duty involved" in accordance with the terms of most voyage charters. This is true in the present
cases where the charterer was responsible for loading, stowage and discharging at the ports visited, while the owner was responsible for the care of the cargo during
the voyage.
The liability imposable upon it cannot be borne by Maritime which, as a mere agent, is not answerable for injury caused by its principal. It is a well-settled principle that
the agent shall be liable for the act or omission of the principal only if the latter is undisclosed. The charterer did not represent itself as a carrier and indeed assumed
responsibility ability only for the unloading of the cargo, i.e, after the goods were already outside the custody of the vessel. Maritime acted in representation of the
charterer and not of the vessel; thus cannot be considered a ship agent. As a mere charterer's agent, it cannot be held solidarily liable with Transcontinental for the
losses/damages to the cargo outside the custody of the vessel.


Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration.
They are titled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is, that any rude or discourteous
conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier. Where a conductor uses language to a passenger
which is calculated to insult, humiliate, or wound the feelings of a person of ordinary feelings and sensibilities, the carrier is liable, because the contract of carriage
impliedly stipulates for decent, courteous, and respectful treatment, at hands of the carrier's employees.


The record yields affirmative evidence of fault or negligence on the part of respondent common carrier. The driver did not stop to check if anything had gone wrong
with the bus when the snapping sound was heard and made known to him by the passengers, instead told them that it was normal. The driver's reply necessarily
indicated that the same "snapping sound" had been heard in the bus on previous occasions. This could only mean that the bus had not been checked physically or
mechanically to determine what was causing the "snapping sound" which had occurred so frequently that the driver had gotten accustomed to it. Such a sound is
obviously alien to a motor vehicle in good operating condition, and even a modicum of concern for life and limb of passengers dictated that the bus be checked and
repaired. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the
mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of
the passengers, and hence gross negligence on the part of respondent and his driver.

To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and
weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable.

Because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise
extraordinary diligence, SC construed any such purported waiver most strictly against the common carrier. For a waiver to be valid and effective, it must not be contrary
to law, morals, public policy or good customs.

A cursory examination of the purported waiver will readily show that appellees did not actually waive their right to claim damages from appellant for the latter's failure
to comply with their contract of carriage. All that said document proves is that they expressed a "desire" to make the waiver which obviously is not the same as making
an actual waiver of their right. A waiver of the kind invoked by appellant must be clear and unequivocal.

A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which actual or compensatory
damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before mishap. A scar, especially
one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her
condition ante.


It is argued that this Court is without jurisdiction to adjudicate the exemplary damages since there was no allegation nor prayer, nor proof, nor counterclaim of error for
the same by the respondents. It is to be observed however, that in the complaint, plaintiffs "prayed for such other and further relief as this Court may deem just and
equitable." Now, since the body of the complaint sought to recover damages against the defendant-carrier wherein plaintiffs prayed for indemnification for the damages
they suffered as a result of the negligence of the driver who is appellant's employee and since exemplary damages is intimately connected with general damages,
plaintiffs may not be expected to single out by express term the kind of damages they are trying to recover against the defendant's carrier. Suffice it to state that when
plaintiffs prayed in their complaint for such other relief and remedies that may be availed of under the premises, in effect, therefore, the court is called upon the exercise
and use its discretion whether the imposition of punitive or exemplary damages even though not expressly prayed or pleaded in the plaintiffs' complaint. Exemplary
damages may be imposed by way of example or correction only in addition, among others, to compensatory damages, but that they cannot be recovered as a matter
of right, their determination depending upon the discretion of the court. If the amount of exemplary damages need not be proved, it need not also be alleged, and the
reason is obvious because it is merely incidental or dependent upon what the court may award as compensatory damages.

Petitioner sacrificed the comfort of its first class passengers including private respondent Vinluan for the sake of economy. Such inattention 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 the award
of moral damages. More so in this case where instead of courteously informing private respondent of his being downgraded under the circumstances, he was angrily
rebuffed by an employee of petitioner.

At the time of this unfortunate incident, the private respondent was a practicing lawyer, a senior partner of a big law firm in Manila. He was a director of several
companies and was active in civic and social organizations in the Philippines. Considering the circumstances of this case and the social standing of private respondent
in the community, he is entitled to the award of moral and exemplary damages.


Dra. Prudenciado suffered a brain concussion which although mild can admittedly produce the effects complained of by her and that these symptoms can develop after
several years and can lead to some, serious handicaps or predispose the patient to other sickness. Being a doctor by profession, her fears can be more real and
intense than an ordinary person. Otherwise stated, she is undeniably a proper recipient of moral damages which are proportionate to her suffering.

As to exemplary damages, Article 2231 of the Civil Code provides: “In quasi-delicts, exemplary damages may be granted if the defendant acted with grave negligence.”
The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for the public good. Respondent driver was running
at high speed after turning to the right along Taft Ave. coming from Ayala Boulevard, considering that the traffic was clear. Failing to notice petitioner's car, he failed to
apply his brakes and did not even swerve to the right to avoid the collision. Much more, it was raining that time and the roads are slippery. The frequent incidence of
accidents of this nature caused by taxi drivers indeed demands corrective measures