San Miguel vs. Sabiniano, GR No. 141716, July
Only 5 out
4, 2002
Facts: San Miguel Corporation entered into a
Time Charter Party Agreement with Julius
Ouano, doing business under the name and style
J. Ouano Marine Services. Under the terms of the
agreement, SMC chartered the M/V Doña
Roberta owned by Julius Ouano for a period of
two years , from June 1, 1989 to May 31, 1991,
for the purpose of transporting SMC's beverage
products from its Mandaue City plant to various
points in Visayas and Mindanao.
In accordance with the sailing orders, Captain
Inguito obtained the necessary sailing clearance
from the Philippine Coast Guard.3 Loading of the
cargo on the M/V Doña Roberta was completed
at 8:30 p.m. of November 11, 1990. However,
the vessel did not leave Mandaue City until 6:00
a.m. of the following day, November 12, 1990.
Meanwhile, at 4:00 a.m. of November 12, 1990,
typhoon Ruping was spotted 570 kilometers
east-southeast of Borongan, Samar, moving
west-northwest at 22 kilometers per hour in the
general direction of Eastern Visayas. The
typhoon had maximum sustained winds of 240
kilometers per hour near the center with
gustiness of up to 280 kilometers per hour.4
At 7:00 a.m., November 12, 1990, one hour after
the M/V Doña Roberta departed from Mandaue
City and while it was abeam Cawit Island off
Cebu, SMC Radio Operator Rogelio P. Moreno,
who was an employee of San Miguel, contacted
Captain Inguito through the radio and advised
him to take shelter. Captain Inguito replied that
they will proceed since the typhoon was far away
from them, and that the winds were in their
favor. They proceeded in their voyage.
Moreno kept warning the captain calling again at
2pm, 4pm, and 8pm, but the captain did not
heed his warnings. Finally, at 1 am the captain
called him asking for a helicopter to rescue them.
At 2:30 am M/V Doña Roberta sank.
of the 25 crew remained alive.
The heirs of the deceased captain and crew filed
a case against Ouano (shipowner) and San
Miguel Corp.
The RTC ruled that San Miguel was the proximate
cause of the los.
The CA ruled that Ouano and San Miguel are
solidarily liable for the loss.
Issue: Should a shipowner be liable for the death
of the crew when the agreement was a time
charter?
Ruling:Yes. A charter party may either be a (1)
bareboat or demise charter or (2) contract of
affreightment. Under a demise or bareboat
charter, the charterer mans the vessel with his
own people and becomes, in effect, the owner of
the ship for the voyage or service stipulated,
subject to liability for damages caused by
negligence.
In a contract of affreightment, on the other
hand, the owner of the vessel leases part or all of
its space to haul goods for others. It is a contract
for special service to be rendered by the owner
of the vessel. Under such contract the ship
owner retains the possession, command and
navigation of the ship, the charterer or freighter
merely having use of the space in the vessel in
return for his payment of the charter hire.
A contract of affreightment may be either time
charter, wherein the leased vessel is leased to
the charterer for a fixed period of time, or
voyage charter, wherein the ship is leased for a
single voyage.
In this case, it was a contract of affreightment.
Under the Agreement, the captain and the crew
where employed by Ouano and that they agreed
that Ouano will be laibel for the damage caused
by them. It appearing that Ouano was the
employer of the captain and crew of the M/V
Doña Roberta during the term of the charter, he
therefore had command and control over the
vessel.
Issue: Should San Miguel be solidarily liable with
Ouano?
Ruling: No. The evidence does not show that
SMC or its employees were amiss in their duties.
The facts indubitably establish that SMC's Radio
Operator, Rogelio P. Moreno, who was tasked to
monitor every shipment of its cargo, contacted
Captain Inguito as early as 7:00 a.m., one hour
after the M/V Doña Roberta departed from
Mandaue, and advised him to take shelter from
typhoon Ruping. In contrast to the care exercised
by Moreno, Rico Ouano tried to communicate
with the captain only after receiving the S.O.S.
message. Neither Ouano nor his son was
available during the entire time that the vessel
set out and encountered foul weather.
Considering that the charter was a contract of
affreightment, the shipowner had the clear duty
to ensure the safe carriage and arrival of goods
transported on board its vessels.
Issue: Is the shipowner vicariously liable for the
negligent acts of his employee?
Ruling: Yes. We likewise agree with the Court of
Appeals that Ouano is vicariously liable for the
negligent acts of his employee, Captain Inguito.
Under Articles 2176 and 2180 of the Civil Code,
owners and managers are responsible for
damages 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.
Priniple: The shipowner is liable under a time
charter party.
De Guzman vs. Ca, GR No. L-47822, December
22, 1988
Facts: Respondent Ernesto Cendana, a junk
dealer, was engaged in buying up used bottles
and scrap metal in Pangasinan. Upon gathering
sufficient quantities of such scrap material,
respondent would bring such material to Manila
for resale. He utilized two (2) six-wheeler trucks
which he owned for hauling the material to
Manila. On the return trip to Pangasinan,
respondent would load his vehicles with cargo
which various merchants wanted delivered to
differing establishments in Pangasinan. For that
service, respondent charged freight rates which
were commonly lower than regular commercial
rates.
Sometime in November 1970, petitioner Pedro
de Guzman a merchant and authorized dealer of
General Milk Company (Philippines), Inc. in
Urdaneta, Pangasinan, contracted with
respondent for the hauling of 750 cartons of
Liberty filled milk from a warehouse of General
Milk in Makati, Rizal, to petitioner's
establishment in Urdaneta on or before 4
December 1970.
Only 150 boxes of Liberty filled milk were
delivered to petitioner. The other 600 boxes
never reached petitioner, since the truck which
carried these boxes was hijacked somewhere
along the MacArthur Highway in Paniqui, Tarlac,
by armed men who took with them the truck, its
driver, his helper and the cargo.
De Guzman then sued Cednana, stating that he
was a common carrier and that he should have
exercised extraordinary diligence.
The trial court ruled that Cendana was a
common carrier, while the CA ruled that
respondent had been engaged in transporting
return loads of freight "as a casual
occupation — a sideline to his scrap iron
business" and not as a common carrier and that
he has no certificate of public convenience.
Issue: Can a person engaging to carry goods as a
sideline to his usual business be considered a
common carrier?
Ruling: Yes. The Civil Code defines "common
carriers" in the following terms:
Article 1732. Common carriers are 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.
The above article 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 (in local Idiom as "a
sideline").
It appears to the Court that private respondent
is properly characterized as a common carrier
even though he merely "back-hauled" goods for
other merchants from Manila to Pangasinan,
although such back-hauling was done on a
periodic or occasional rather than regular or
scheduled manner, and even though private
respondent's principal occupation was not the
carriage of goods for others. There is no dispute
that private respondent charged his customers a
fee for hauling their goods; that fee frequently
fell below commercial freight rates is not
relevant here.
Issue: Is a one a common carrier even though he
has no certificate of public convenience?
Ruling: Yes. A certificate of public convenience is
not a requisite for the incurring of liability under
the Civil Code provisions governing common
carriers. That liability arises the moment a
person or firm acts as a common carrier, without
regard to whether or not such carrier has also
complied with the requirements of the
applicable regulatory statute and implementing
regulations and has been granted a certificate of
public convenience or other franchise. To
exempt private respondent from the liabilities of
a common carrier because he has not secured
the necessary certificate of public convenience,
would be offensive to sound public policy; that
would be to reward private respondent precisely
for failing to comply with applicable statutory
requirements.
Issue: Does hijacking exempt a common carrier
of liability?
Ruling: Yes. Article 1734 establishes the general
rule that common carriers are responsible for
the loss, destruction or deterioration of the
goods which they carry, "unless the same is due
to any of the following causes only:
(1) Flood, storm, earthquake, lightning or other
natural disaster or calamity;
(2) Act of the public enemy in war, whether
international or civil;
(3) Act or omission of the shipper or owner of the
goods;
(4) The character-of the goods or defects in the
packing or-in the containers; and
(5) Order or act of competent public authority.
It is important to point out that the above list of
causes of loss, destruction or deterioration
which exempt the common carrier for
responsibility therefor, is a closed list. Applying
the above-quoted Articles 1734 and 1735, we
note firstly that the specific cause alleged in the
instant case — the hijacking of the carrier's truck
— does not fall within any of the five (5)
categories of exempting causes listed in Article
1734. This presumption, however, may be
overthrown by proof of extraordinary diligence
on the part of private respondent.
Petitoner insists that there was no extraordinary
diligence because CEndana should have hired a
security guard. However the Court ruled that
even it is not necessary to hire one to engage in
a firefight with brigands, endangering his life and
others.
Further, the Court ruled thqt under Article 1745:
Any of the following or similar stipulations shall
be considered unreasonable, unjust and
contrary to public policy:
xxxxxxx
(6) that the common carrier's liability for acts
committed by thieves, or of robbers who do
not act with grave or irresistible threat,
violence or force, is dispensed with or
diminished;
Under Article 1745 (6) above, a common carrier
is held responsible — and will not be allowed to
divest or to diminish such responsibility — even
for acts of strangers like thieves or
robbers, except where such thieves or robbers in
fact acted "with grave or irresistible threat,
violence or force." I this case, there was threat
violence and force employed by the armed men
who hijacked the truck.
Principle: Generally, hijacking does not exempt
the common carrier from liability, but it
is exempted when the hijackers(thieves
and robbers) used violence and
intimidation against persons or force
upon things.
Philippine Industrial Corporation vs. CA, GR No.
125948, December 29, 1998
Facts: Philippine Industrial Corporation is a
grantee of a pipeline concession under Republic
Act No. 387, as amended, to contract, install and
operate oil pipelines. The original pipeline
concession was granted in 1967 and renewed by
the Energy Regulatory Board in 1992. Sometime
in January 1995, petitioner applied for a mayor's
permit with the Office of the Mayor of Batangas
City. However, before the mayor's permit could
be issued, the respondent City Treasurer
required petitioner to pay a local tax based on its
gross receipts for the fiscal year 1993 pursuant
to the Local Government Code.
Philippine Industrial Corporation filed a letter-
protest addressed to the respondent City
Treasurer. It argued that it is engaged in
transportation and hence exempt from local
taxation under Sec 133 of the Local Government
Code.
On March 8, 1994, the respondent City Treasurer
denied the protest contending that petitioner
cannot be considered engaged in transportation
business, thus it cannot claim exemption under
Section 133 (j) of the Local Government Code.
The treasurer argued that Philippine Industrial
Corporation cannot be exempt from taxes under
Section 133 (j) of the Local Government Code as
said exemption applies only to "transportation
contractors and persons engaged in the
transportation by hire and common carriers by
air, land and water." Respondents assert that
pipelines are not included in the term "common
carrier" which refers solely to ordinary carriers
such as trucks, trains, ships and the
like. Respondents further posit that the term
"common carrier" under the said code pertains
to the mode or manner by which a product is
delivered to its destination.
Issue: Is a one a common carrier when it
transport oil through pipes?
Ruling: Yes. A "common carrier" may be defined,
broadly, as one who holds himself out to the
public as engaged in the business of transporting
persons or property from place to place, for
compensation, offering his services to the public
generally.
Article 1732 of the Civil Code defines a "common
carrier" as "any person, corporation, firm or
association 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."
The test for determining whether a party is a
common carrier of goods is:
1. He must be engaged in the business of
carrying goods for others as a public
employment, and must hold himself out as ready
to engage in the transportation of goods for
person generally as a business and not as a
casual occupation;
2. He must undertake to carry goods of the kind
to which his business is confined;
3. He must undertake to carry by the method by
which his business is conducted and over his
established roads; and
4. The transportation must be for hire.
Based on the above definitions and
requirements, there is no doubt that petitioner
is a common carrier. It is engaged in the business
of transporting or carrying goods, i.e. petroleum
products, for hire as a public employment. It
undertakes to carry for all persons indifferently,
that is, to all persons who choose to employ its
services, and transports the goods by land and
for compensation. The fact that petitioner has a
limited clientele does not exclude it from the
definition of a common carrier.
Under Section 13, paragraph (b) of the Public
Service Act, 'public service' includes:
'every person that now or hereafter may own,
operate, manage, or control in the Philippines,
for hire or compensation, with general or limited
clientele, whether permanent, occasional or
accidental, and done for general business
purposes, any common carrier, railroad, street
railway, traction railway, subway motor vehicle,
either for freight or passenger, or both, with or
without fixed route and whatever may be its
classification, freight or carrier service of any
class, express service, steamboat, or steamship
line, pontines, ferries and water craft, engaged
in the transportation of passengers or freight or
both, shipyard, marine repair shop, wharf or
dock, ice plant, ice-refrigeration plant, canal,
irrigation system gas, electric light heat and
power, water supply and power petroleum,
sewerage system, wire or wireless
communications systems, wire or wireless
broadcasting stations and other similar public
services.' "
As correctly pointed out by petitioner, the
definition of "common carriers" in the Civil Code
makes no distinction as to the means of
transporting, as long as it is by land, water or
air. It does not provide that the transportation of
the passengers or goods should be by motor
vehicle.
Priciple: One is a common carrier when it
transports oil through pipes since the Civil Code
did not mention that transportation should be
through a motor vehicle.
Perena vs Zarate, GR No. 157917, August 29,
2012
Facts: The Pereñas were engaged in the business
of transporting students from their respective
residences in Parañaque City to Don Bosco in
Pasong Tamo, Makati City, and back. In June
1996, the Zarates contracted the Pereñas to
transport Aaron (their son) to and from Don
Bosco. On August 22, 1996, as on previous school
days, the van picked Aaron up around 6:00 a.m.
from the Zarates’ residence. Aaron took his place
on the left side of the van near the rear door. The
van, with its air-conditioning unit turned on and
the stereo playing loudly, ultimately carried all
the 14 student riders on their way to Don Bosco.
Considering that the students were due at Don
Bosco by 7:15 a.m., and that they were already
running late because of the heavy vehicular
traffic on the South Superhighway, Alfaro took
the van to an alternate route at about 6:45 a.m.
by traversing the narrow path underneath the
Magallanes Interchange that was then
commonly used by Makati-bound vehicles as a
short cut into Makati. At the time, the narrow
path was marked by piles of construction
materials and parked passenger jeepneys, and
the railroad crossing in the narrow path had no
railroad warning signs, or watchmen, or other
responsible persons manning the crossing. In
fact, the bamboo barandilla was up, leaving the
railroad crossing open to traversing motorists.
At about the time the van was to traverse the
railroad crossing, PNR Commuter No. 302 (train),
operated by Jhonny Alano (Alano), was in the
vicinity of the Magallanes Interchange travelling
northbound. As the train neared the railroad
crossing, Alfaro drove the van eastward across
the railroad tracks, closely tailing a large
passenger bus. His view of the oncoming train
was blocked because he overtook the passenger
bus on its left side. The train operator hit the
brakes. The passenger bus successfully crossed
the railroad tracks, but the van driven by Alfaro
did not. The train hit the rear end of the van, and
the impact threw nine of the 12 students in the
rear, including Aaron, out of the van. Aaron
landed in the path of the train, which dragged his
body and severed his head, instantaneously
killing him.
The Zarates sued Alfaro, the Pereñas, PNR and
Alano.
Issue: Is a van sending children to school a
common carrier?
Ruling: Yes. A private carrier is one who, without
making the activity a vocation, or without
holding himself or itself out to the public as
ready to act for all who may desire his or its
services, undertakes, by special agreement in a
particular instance only, to transport goods or
persons from one place to another either
gratuitously or for hire.The provisions on
ordinary contracts of the Civil Code govern the
contract of private carriage.The diligence
required of a private carrier is only ordinary, that
is, the diligence of a good father of the family. In
contrast, a common carrier is a person,
corporation, firm or association engaged in the
business of carrying or transporting passengers
or goods or both, by land, water, or air, for
compensation, offering such services to the
public.Contracts of common carriage are
governed by the provisions on common carriers
of the Civil Code, the Public Service Act, and
other special laws relating to transportation. A
common carrier is required to observe
extraordinary diligence, and is presumed to be at
fault or to have acted negligently in case of the
loss of the effects of passengers, or the death or
injuries to passengers.
The true test for a common carrier is not the
quantity or extent of the business actually
transacted, or the number and character of the
conveyances used in the activity, but whether
the undertaking is a part of the activity engaged
in by the carrier that he has held out to the
general public as his business or occupation. If
the undertaking is a single transaction, not a part
of the general business or occupation engaged
in, as advertised and held out to the general
public, the individual or the entity rendering
such service is a private, not a common, carrier.
Applying these considerations to the case before
us, there is no question that the Pereñas as the
operators of a school bus service were: (a)
engaged in transporting passengers generally as
a business, not just as a casual occupation; (b)
undertaking to carry passengers over
established roads by the method by which the
business was conducted; and (c) transporting
students for a fee. Despite catering to a limited
clientèle, the Pereñas operated as a common
carrier because they held themselves out as a
ready transportation indiscriminately to the
students of a particular school living within or
near where they operated the service and for a
fee.
Although the Perenas spouses argued that they
exercised the diligence of a good father in hiring
their driver (they required him to have a driver’s
license, instructed him to go a certain route,
etc.), this is not enough since they are liable for
extraordinary diligence.
The Pereñas were liable for the death of Aaron
despite the fact that their driver might have
acted beyond the scope of his authority or even
in violation of the orders of the common
carrier.27 In this connection, the records showed
their driver’s actual negligence. He took a
shortcut when he knew it was dangerous, he had
loud music in the car wghich was maybe why he
didn’t hear the train’s horn and he even overtook
the passenger bus and ended up being hit by the
train.
Principle: The operator of a. school bus service is
a common carrier in the eyes of the law. He is
bound to observe extraordinary diligence in the
conduct of his business. He is presumed to be
negligent when death occurs to a passenger. His
liability may include indemnity for loss of earning
capacity even if the deceased passenger may
only be an unemployed high school student at
the time of the accident.
Principle: One is a common carrier even if his
clientel is limited to a specific class or group.
China Airlines v. Daniel Chiok
Facts: On September 18, 1981, Daniel Chiok
purchased from China Airlines, Ltd. (CAL) airline
passenger ticket number for air transportation
covering Manila-Taipei-Hongkong-Manila. Said
ticket was exclusively endorseable to PAL..On
November 21, 1981, Chiok took his trip from
Manila to Taipei using the CAL ticket. When he
arrived in Taipei, he went to the CAL office and
confirmed his Hongkong to Manila trip on board
PAL Flight no. PR311. The CAL office attached a
yellow sticker appropriately indicating that his
flight status was OK. On November 24, 1981,
Chiok proceeded to Hongkong International
Airport for his return trip to Manila however, it
was cancelled because of a typhoon in Manila.
He was then informed that ticket holders of the
same flight were automatically booked for its
next flight. He informed PAL personnel that,
being the founding director of the Philippine
Polysterene Paper Corporation, he had to reach
Manila on November 25, 1981 because of a
business option which he had to execute on said
date. On November 25, 1981, Chiok went to the
airport. Cathay Pacific stewardess Lok Chan
received Chiok's plane ticket and his luggage.
However, Carmen Chan, PAL's terminal
supervisor, informed Chiok that his name did not
appear in PAL's computer list of passengers and
thus cannot be permitted to board the PAL flight.
Chiok sought to recover his luggage but found
only two. Chiok proceeded to PAL's Hongkong
office and confronted PAL's reservation officer,
Carie Chao, who previously confirmed his flight
back to Manila. In the ensuing commotion, Chiok
lost his clutch bag containing the following, to
wit: (a) $2,000.00; (b) HK$2,000.00; (c) Taipei
$8,000.00; (d) P2,000.00; (e) a three-piece set of
gold (18 carats) cross pens valued at P3,500; (f) a
Cartier watch worth about P7,500.00; (g) a tie
clip with a garnet birthstone and diamond worth
P1,800.00; and (h) a [pair of] Christian Dior
reading glasses. RTC of Manila held CAL and PAL
jointly and severally liable to respondent. On
PAL’s appeal, the appellate court held that the
carrier had reneged on its obligation to transport
respondent when, in spite of the confirmations
he had secured for Flight PR 311, his name did
not appear in the computerized list of
passengers. Ruling that the airline’s negligence
was the proximate cause of his excoriating
experience, the appellate court sustained the
award of moral and exemplary damages. The CA,
however, deleted the RTC’s award of actual
damages amounting to HK$14,128.80 and
US$2,000.00, because the lost piece of luggage
and clutch bag had not actually been "checked
in" or delivered to PAL for transportation to
Manila.
Issue: Is CAL liable for damages?
Held: 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. This jurisprudential rule is supported
by the Warsaw Convention,22 to which the
Philippines is a party, and by the existing
practices of the International Air Transport
Association (IATA). In American Airlines v. Court
of Appeals,24 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. In
Lufthansa German Airlines v. Court of Appeals,27
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.
In the instant case, following the jurisprudence
cited above, PAL acted as the carrying agent of
CAL. In the same way that we ruled against
British Airways and Lufthansa in the
aforementioned cases, we also rule that CAL
cannot evade liability to respondent, even
though it may have been only a ticket issuer for
the Hong Kong-Manila sector.
PAL v. Hon. Savillo
Facts: Private respondent was invited to
participate in the 1993 ASEAN Seniors Annual
Golf Tournament held in Jakarta, Indonesia. He
and several companions purchsed their
respective passenger tickets from PAL with the
following points of passage: MANILA-
SINGAPORE-JAKARTA-SINGAPORE-MANILA. On
3 October 1993, private respondent and his
companions took the PAL flight to Singapore and
arrived at about 6:00 o’clock in the evening.
Upon their arrival, they proceeded to the
Singapore Airlines office to check-in for their
flight to Jakarta scheduled at 8:00 o’clock in the
same evening. Singapore Airlines rejected the
tickets of private respondent and his group
because they were not endorsed by PAL. It was
explained to private respondent and his group
that if Singapore Airlines honored the tickets
without PAL’s endorsement, PAL would not pay
Singapore Airlines for their passage. Private
respondent tried to contact PAL’s office at the
airport, only to find out that it was closed.
Stranded at the airport in Singapore and left with
no recourse, private respondent was in panic
and at a loss where to go; and was subjected to
humiliation, embarrassment, mental anguish,
serious anxiety, fear and distress. Eventually,
private respondent and his companions were
forced to purchase tickets from Garuda Airlines.
When they arrived in Jakarta at about 12:00
o’clock midnight, the party who was supposed to
fetch them from the airport had already left and
they had to arrange for their transportation to
the hotel at a very late hour. After the series of
nerve-wracking experiences, private respondent
became ill and was unable to participate in the
tournament. Upon his return to the Philippines,
private respondent brought the matter to the
attention of PAL. He sent a demand letter to PAL
on 20 December 1993 and another to Singapore
Airlines on 21 March 1994. However, both
airlines disowned liability and blamed each other
for the fiasco. On 15 August 1997, private
respondent filed a Complaint for Damages
before the RTC. RTC’s denied PAL’s the Motion
to Dismiss, maintaining that the provisions of the
Civil Code and other pertinent laws of the
Philippines, not the Warsaw Convention, were
applicable to the present case. CA affirmed.
Issue: Is the RTC correct that the provisions of
the Civil Code and other pertinent laws of the
Philippines, not the Warsaw Convention, were
applicable to the present case?
Held: Yes. Jurisprudence in the Philippines and
the United States also recognizes that the
Warsaw Convention does not "exclusively
regulate" the relationship between passenger
and carrier on an international flight. This Court
finds that the present case is substantially similar
to cases in which the damages sought were
considered to be outside the coverage of the
Warsaw Convention. The emotional harm
suffered by the private respondent as a result of
having been unreasonably and unjustly
prevented from boarding the plane should be
distinguished from the actual damages which
resulted from the same incident. Under the Civil
Code provisions on tort,22 such emotional harm
gives rise to compensation where gross
negligence or malice is proven.
In the case at hand, Singapore Airlines barred
private respondent from boarding the Singapore
Airlines flight because PAL allegedly failed to
endorse the tickets of private respondent and his
companions, despite PAL’s assurances to
respondent that Singapore Airlines had already
confirmed their passage. While this fact still
needs to be heard and established by adequate
proof before the RTC, an action based on these
allegations will not fall under the Warsaw
Convention, since the purported negligence on
the part of PAL did not occur during the
performance of the contract of carriage but days
before the scheduled flight. Thus, the present
action cannot be dismissed based on the statute
of limitations provided under Article 29 of the
Warsaw Convention.
American Airlines v. CA
Facts: In September 1989, private respondent
filed an action for damages before the regional
trial court of Cebu for the alleged
embarrassment and mental anguish he suffered
at the Geneva Airport when the petitioner's
security officers prevented him from boarding
the plane, detained him for about an hour and
allowed him to board the plane only after all the
other passengers have boarded. The petitioner
filed a motion to dismiss for lack of jurisdiction
of Philippine courts to entertain the said
proceedings under Art. 28(1) of the Warsaw
Convention. The trial court denied the motion.
CA affirmed. Both the trial and the appellate
courts held that the suit may be brought in the
Philippines under the pool partnership
agreement among the IATA members, which
include Singapore Airlines and American Airlines,
wherein the members act as agents of each
other in the issuance of tickets to those who may
need their services.
Issue: Would the contract of transportation
between the petitioner and the private
respondent be considered as a single operation
and part of the contract of transportation
entered into by the latter with Singapore Airlines
in Manila?
Held: Yes. Art 1(3) of the Warsaw Convention
which states:
Transportation to be performed by
several successive 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 a series
of contracts, and it shall not lose its
international character merely because
one contract or series of contracts is to
be performed entirely within the
territory subject of the sovereignty,
suzerainty, mandate or authority of the
same High Contracting Party.
The contract of carriage between the private
respondent and Singapore Airlines although
performed by different carriers under a series of
airline tickets, including that issued by the
petitioner, constitutes a single operation.
Members of the IATA are under a general pool
partnership agreement wherein they act as
agent of each other in the issuance of tickets 11
to contracted passengers to boost ticket sales
worldwide and at the same time provide
passengers easy access to airlines which are
otherwise inaccessible in some parts of the
world. Booking and reservation among airline
members are allowed even by telephone and it
has become an accepted practice among them.
12 A member airline which enters into a contract
of carriage consisting of a series of trips to be
performed by different carriers is authorized to
receive the fare for the whole trip and through
the required process of interline settlement of
accounts by way of the IATA clearing house an
airline is duly compensated for the segment of
the trip serviced. 13 Thus, when the petitioner
accepted the unused portion of the conjunction
tickets, entered it in the IATA clearing house and
undertook to transport the private respondent
over the route covered by the unused portion of
the conjunction tickets, i.e., Geneva to New York,
the petitioner tacitly recognized its commitment
under the IATA pool arrangement to act as agent
of the principal contracting airline, Singapore
Airlines, as to the segment of the trip the
petitioner agreed to undertake. As such, the
petitioner thereby assumed the obligation to
take the place of the carrier originally designated
in the original conjunction ticket. The
petitioner's argument that it is not a designated
carrier in the original conjunction tickets and
that it issued its own ticket is not decisive of its
liability. The new ticket was simply a
replacement for the unused portion of the
conjunction ticket, both tickets being for the
same amount of US$2,760 and having the same
points of departure and destination. 14 By
constituting itself as an agent of the principal
carrier the petitioner's undertaking should be
taken as part of a single operation under the
contract of carriage executed by the private
respondent and Singapore Airlines in Manila.
The quoted provision of the Warsaw Convention
Art. 1(3) clearly states that a contract of air
transportation is taken as a single operation
whether it is founded on a single contract or a
series of contracts. The number of tickets issued
does not detract from the oneness of the
contract of carriage as long as the parties regard
the contract as a single operation. The evident
purpose underlying this Article is to promote
international air travel.
PAL v. CA
Facts: On January 27, 1990, Gilda C. Mejia
shipped thru PAL, one (1) unit microwave oven,
from San Francisco, U.S.A. to Manila, Philippines.
Upon arrival, however, of said article in Manila,
it was discovered that its front glass door was
broken and the damage rendered it
unserviceable. Demands both oral and written
were made for the reimbursement of the value
of the damaged microwave oven, and
transportation charges paid but these demands
fell on deaf ears. On September 25, 1990,
plaintiff Gilda C. Mejia filed the instant action for
damages. Trial court found PAL liable. CA
affirmed.
Issue: Is PAL liable?
Held: Yes.
Private respondent signified an intention to
declare the value of the microwave oven prior to
shipment, but was explicitly advised against
doing so by PAL's personnel in San Francisco,
U.S.A. The attention of PAL through its personnel
in San Francisco was sufficiently called to the fact
that private respondent's cargo was highly
susceptible to breakage as would necessitate the
declaration of its actual value. The acceptance in
due course by PAL of private respondent's cargo
as packed and its advice against the need for
declaration of its actual value operated as an
assurance to private respondent that in fact
there was no need for such a declaration.
Petitioner can hardly be faulted for relying on
the representations of PAL's own personnel. In
other words, private respondent Mejia could and
would have complied with the conditions stated
in the air waybill, i.e., declaration of a higher
value and payment of supplemental
transportation charges, entitling her to recovery
of damages beyond the stipulated limit of US $20
per kilogram of cargo in the event of loss or
damage, had she not been effectively prevented
from doing so upon the advice of PAL's personnel
for reasons best known to themselves.
Considering the incidents and private
respondent Mejia's own zealous efforts in
following up the claim, it was clearly not her
fault that the letter of demand for damages
could only be filed, after months of exasperating
follow-up of the claim, on August 13, 1990. If
there was any failure at all to file the formal
claim within the prescriptive period
contemplated in the air waybill, this was largely
because of PAL's own doing, the consequences
of which cannot, in all fairness, be attributed to
private respondent.
Even if the claim for damages was conditioned
on the timely filing of a formal claim, under
Article 1186 of the Civil Code that condition was
deemed fulfilled, considering that the collective
action of PAL's personnel in tossing around the
claim and leaving it unresolved for an indefinite
period of time was tantamount to "voluntarily
preventing its fulfillment." On grounds of equity,
the filing of the baggage freight claim, which
sufficiently informed PAL of the damage
sustained by private respondent's cargo,
constituted substantial compliance with the
requirement in the contract for the filing of a
formal claim.
All told, therefore, respondent appellate court
did not err in ruling that the provision on limited
liability is not applicable in this case. While the
facts and circumstances of this case do not call
for the direct application of the provisions of the
Warsaw Convention, it should be stressed that,
indeed, recognition of the Warsaw Convention
does not preclude the operation of the Civil Code
and other pertinent laws in the determination of
the extent of liability of the common carrier. 36
The Warsaw Convention, being a treaty to which
the Philippines is a signatory, is as much a part of
Philippine law as the Civil Code, Code of
Commerce and other municipal special laws. 3 7
The provisions therein contained, specifically on
the limitation of carrier's liability, are operative
in the Philippines but only in appropriate
situations.
Cathay vs Vasquez
Facts: Respondents-spouses Dr. Daniel Earnshaw
Vazquez and Maria Luisa Madrigal Vazquez are
frequent flyers of Cathay and are Gold Card
members of its Marco Polo Club. On 24
September 1996, the Vazquezes, together with
their maid and two friends Pacita Cruz and
Josefina Vergel de Dios, went to Hongkong for
pleasure and business. For their return flight,
they were on business class. However, upon
boarding Dr. Vasquez was informed that they
were being transferred to the First Class in which
they refused to do so because they had guest
with them. Later on, they were informed by Ms.
Chiu that if they would refuse the privilege, they
would not be allowed to take the flight. Vasquez
then proceed to the First Class Cabin.
They later on demanded that they be
indemnified for the humiliation and
embarrassment caused by its employees. Trial
court ruled that The upgrading of the Vazquezes
accommodation over and above their vehement
objections was due to the overbooking of the
Business Class. It was a pretext to pack as many
passengers as possible into the plane to
maximize Cathays revenues. Cathays actuations
in this case displayed deceit, gross negligence,
and bad faith, which entitled the Vazquezes to
awards for damages.CA affirmed and
ratiocinated that by upgrading the Vazquezes to
First Class, Cathay novated the contract of
carriage without the formers consent. There was
a breach of contract not because Cathay
overbooked the Business Class Section of Flight
CX-905 but because the latter pushed through
with the upgrading despite the objections of the
Vazquezes.
Issue: Is an involuntary upgrading of an airline
passengers accommodation from one class to a
more superior class at no extra cost a breach of
contract of carriage?
Ruling: A contract is a meeting of minds between
two persons whereby one agrees to give
something or render some service to another for
a consideration. There is no contract unless the
following requisites concur: (1) consent of the
contracting parties; (2) an object certain which is
the subject of the contract; and (3) the cause of
the obligation which is
established.[4] Undoubtedly, a contract of
carriage existed between Cathay and the
Vazquezes. They voluntarily and freely gave their
consent to an agreement whose object was the
transportation of the Vazquezes from Manila to
Hong Kong and back to Manila, with seats in the
Business Class Section of the aircraft, and whose
cause or consideration was the fare paid by the
Vazquezes to Cathay.
We note that in all their pleadings, the
Vazquezes never denied that they were
members of Cathays Marco Polo Club. They
knew that as members of the Club, they had
priority for upgrading of their seat
accommodation at no extra cost when an
opportunity arises. But, just like other privileges,
such priority could be waived. The Vazquezes
should have been consulted first whether they
wanted to avail themselves of the privilege or
would consent to a change of seat
accommodation before their seat assignments
were given to other passengers. Normally, one
would appreciate and accept an upgrading, for it
would mean a better accommodation. But,
whatever their reason was and however odd it
might be, the Vazquezes had every right to
decline the upgrade and insist on the Business
Class accommodation they had booked for and
which was designated in their boarding
passes. They clearly waived their priority or
preference when they asked that other
passengers be given the upgrade. It should not
have been imposed on them over their
vehement objection. By insisting on the
upgrade, Cathay breached its contract of
carriage with the Vazquezes. We are not,
however, convinced that the upgrading or the
breach of contract was attended by fraud or bad
faith.
Lufthansa vs IAC
Facts: Alcantara shipped 13 luggage through
Lufthansa. The Air Waybill discloses that the
actual gross weight of the thirteen (13) pieces of
luggage is 180 kilograms. Respondent Henry H.
Alcantara did not declare an inventory of the
contents Or the value of the luggages when he
delivered them to Lufthansa. Out of the 13,
Alcantara was able to claim from the cargo
broker Philippine Skylandards, Inc. only 12 out of
the 13 luggage.
A letter demand was made for the production of
the missing luggage but Lufthansa was unable to
do so. Thus, Alcantara filed for breach of contract
against Lufthansa.
The petitioner filed its answer to the complaint
alleging that the Warsaw Convention limits the
liability of the carrier, if any, with respect to
cargo to a sum of 250 francs per kilo ($20.00 per
kilo or $9.07 per pound), unless a higher value is
declared in advance and additional charges are
paid by the passenger and the conditions of the
contract as set forth in the air waybill expressly
subject the contract of carriage of cargo to the
Warsaw Convention. Respondent Henry H.
Alcantara having admitted that he did not
declare the value or contents of the missing
luggage, the liability of the petitioner is therefore
limited by the Warsaw Convention and the Air
waybill to US$20.00 per kilo.
CFI ruled in favor of Alcantara. MR was denied.
Hence this case.
On the other hand, the private respondents
maintain that the petitioner, as found by the trial
and appellate courts, waived the benefits of the
Warsaw Convention when it offered a
settlement in the amount of $200.00 which is
much higher than what the Convention
prescribes and never raised timely objections
during the trial to the introduction of evidence
regarding the actual claims and damages
sustained by respondent Alcantara.
Issue: Can Lufthansa be held liable for the
missing luggages?
Whether or not the private respondents are
entitled to an award of damages beyond the
liability set forth in the Warsaw Convention and
in the Airwaybill of Lading.
Ruling: Yes. The loss of one luggage belonging to
the private respondents while the same was in
the custody of the petitioner is not disputed. The
contract of air carriage generates a relation
attended with a public duty. Neglect or
malfeasance of the carrier’s employees could
give ground for an action for damages (Zulueta
v. Pan American World Airways, Inc., 43 SCRA 37
[1972]). Common carriers are liable for the
missing goods for failure to comply with its duty
(American Insurance Co., Inc. v. Macondray &
Co., Inc., 39 SCRA 494 [171]).
In the case at bar, the trial court found that: (a)
petitioner airline has not successfully refuted the
presumption established by Article 1735 of the
Civil Code that the loss of the luggage in question
was due to the negligence or fault of its
employees: (b) the contents of the missing
luggage of private respondents could not be
replaced and were assessed at P200,000. 00 by
the latter; (c) respondent Henry Alcantara spent
about $15,000.00 in trying to locate said luggage
in Frankfurt, Germany, London, United Kingdom
and Hongkong; (d) there being no evidence to
the contrary, the foregoing assessments made
by private respondents were fair and
reasonable; and (e) private respondents were
unable to present ample evidence to prove fraud
and bad faith and are therefore not entitled to
moral damages under Article 2220 of the Civil
Code.
Yes. The respondent court found that petitioner
waived the applicability of the Warsaw
Convention to the case at bar when it offered
private respondent a higher amount than that
which is provided in the said law and failed to
raise timely objections during the trial when
questions and answers were brought out
regarding the actual claims and damages
sustained by Alcantara which were even
subjected to lengthy cross examination by
Lufthansa’s counsel.
Dangwa Transpo vs CA
Facts: Private respondents filed a complaint for
damages against petitioners for the death of
Pedrito Cudiamat as a result of a vehicular
accident. Among others, it was alleged that on
said date, while petitioner Theodore M.
Lardizabal was driving a passenger bus belonging
to petitioner corporation in a reckless and
imprudent manner and without due regard to
traffic rules and regulations and safety to
persons and property, it ran over its passenger,
Pedrito Cudiamat. However, instead of bringing
Pedrito immediately to the nearest hospital, the
said driver, in utter bad faith and without regard
to the welfare of the victim, first brought his
other passengers and cargo to their respective
destinations before banging said victim to the
Lepanto Hospital where he expired
On the other hand, petitioners alleged that they
had observed and continued to observe the
extraordinary diligence required in the operation
of the transportation company and the
supervision of the employees, even as they add
that they are not absolute insurers of the safety
of the public at large. Further, it was alleged that
it was the victim's own carelessness and
negligence which gave rise to the subject
incident, hence they prayed for the dismissal of
the complaint plus an award of damages in their
favor by way of a counterclaim.
Trial court ruled in favor of petitioners saying
that Cudiamat’s negligence was the proximate
cause of his death. Such act in trying to board a
moving vehicle, especially with one of his hands
holding an umbrella and without giving the
driver or conductor any indication that he wishes
to board the bus. CA reversed such by ruling that
the incident took place due to the gross
negligence of the appellee-driver in prematurely
stepping on the accelerator and in not waiting
for the passenger to first secure his seat
especially so when we take into account that the
platform of the bus was at the time slippery and
wet because of the drizzle. Respodent utterly
failed to observe their duty and obligation as a
common carrier to the end that they should
observe extra ordinary diligence in the vigilance
over the goods and the safety of the passenger.
Hence, this case.
Issue: Whether respondent court erred in
reversing the decision of the trial court and in
finding petitioners negligent and liable for the
damages claimed.
Ruling: No. A public utility bus, once it stops, is in
effect making a continuous offer to bus riders.
Hence, it becomes the duty of the driver and the
conductor, every time the bus stops, to do no act
that would have the effect of increasing the peril
to a passenger while he was attempting to board
the same. The premature acceleration of the bus
in this case was a breach of such duty.
Further, even assuming that the bus was moving,
the act of the victim in boarding the same cannot
be considered negligent under the
circumstances. As clearly explained in the
testimony of the witness for petitioner, the bus
has just started and was still in slow motion at
the point when the victim had boarded and was
on its platform.
It is not negligence per se, or as a matter of law,
for one attempt to board a train or streetcar
which is moving slowly. An ordinarily prudent
person would have made the attempt board the
moving conveyance under the same or similar
conditions. The fact that passengers board and
alight from slowly moving vehicle is a matter of
common experience both the driver and
conductor in this case could not have been
unaware of such an ordinary practice.
The victim herein, by stepping and standing on
the platform of the bus, is already considered a
passenger and is entitled all the rights and
protection pertaining to such a contractual
relation. Hence, it has been held that the duty
which the carrier passengers owes to its patrons
extends to persons boarding cars as well as to
those alighting therefrom.
La Mallorca vs CA
Facts: Husband and wife, together with their
minor daughters, namely, Milagros, 13 years old,
Raquel, about 4½ years old, and Fe, over 2 years
old, boarded the Pambusco Bus No. 352. At the
time, they were carrying with them four pieces
of baggages containing their personal belonging.
After about an hour's trip, the bus reached Anao
whereat it stopped to allow the passengers
bound therefor, among whom were the plaintiffs
and their children to get off. They then went
down the bus. Mariano returned to the bus to
get get his other bayong, which he had left
behind, but in so doing, his daughter Raquel
followed him, unnoticed by her father. While
Beltran was in the running board of the bus
waiting for the conductor to hand him his
bayong, the bus, whose motor was not shut off
while unloading, suddenly started moving
forward, evidently to resume its trip
notwithstanding the fact that the conductor has
not given the driver the customary signal to
start, since said conductor was still attending to
the baggage left behind by Beltran. Incidentally,
when the bus was again placed into a complete
stop, it had travelled about ten meters from the
point where the plaintiffs had gotten off.
Sensing that the bus was in motion, Beltran
jumped from the running board. At that precise
time, he saw people beginning to gather around
the body of a child lying prostrate on the ground,
her skull crushed, and without life. The child was
none other than his daughter Raquel, who was
run over by the bus in which she rode earlier
together with her parents. Trial court found
defendant liable for breach of contract of
carriage.
On appeal, it argued that that there could not be
a breach of contract in the case, for the reason
that when the child met her death, she was no
longer a passenger of the bus involved in the
incident and, therefore, the contract of carriage
had already terminated. Although the Court of
Appeals sustained this theory, it nevertheless
found the defendant-appellant guilty of quasi-
delict and held the latter liable for damages, for
the negligence of its driver, in accordance with
Article 2180 of the Civil Code
Issue: W/N petitioner can be held liable for the
death of the child?
Ruling: Yes. It has been recognized as a rule that
the relation of carrier and passenger does not
cease at the moment the passenger alights from
the carrier's vehicle at a place selected by the
carrier at the point of destination, but continues
until the passenger has had a reasonable time or
a reasonable opportunity to leave the carrier's
premises. And, what is a reasonable time or a
reasonable delay within this rule is to be
determined from all the circumstances. Thus, a
person who, after alighting from a train, walks
along the station platform is considered still a
passenger.2 So also, where a passenger has
alighted at his destination and is proceeding by
the usual way to leave the company's premises,
but before actually doing so is halted by the
report that his brother, a fellow passenger, has
been shot, and he in good faith and without
intent of engaging in the difficulty, returns to
relieve his brother, he is deemed reasonably and
necessarily delayed and thus continues to be a
passenger entitled as such to the protection of
the railroad and company and its agents.3
In the present case, the father returned to the
bus to get one of his baggages which was not
unloaded when they alighted from the bus.
Raquel, the child that she was, must have
followed the father. However, although the
father was still on the running board of the bus
awaiting for the conductor to hand him the bag
or bayong, the bus started to run, so that even
he (the father) had to jump down from the
moving vehicle. It was at this instance that the
child, who must be near the bus, was run over
and killed. In the circumstances, it cannot be
claimed that the carrier's agent had exercised
the "utmost diligence" of a "very cautions
person" required by Article 1755 of the Civil
Code to be observed by a common carrier in the
discharge of its obligation to transport safely its
passengers. In the first place, the driver,
although stopping the bus, nevertheless did not
put off the engine. Secondly, he started to run
the bus even before the bus conductor gave him
the signal to go and while the latter was still
unloading part of the baggages of the passengers
Mariano Beltran and family. The presence of said
passengers near the bus was not unreasonable
and they are, therefore, to be considered still as
passengers of the carrier, entitled to the
protection under their contract of carriage.
But even assuming arguendo that the contract
of carriage has already terminated, herein
petitioner can be held liable for the negligence of
its driver, as ruled by the Court of Appeals,
pursuant to Article 2180 of the Civil Code.
Paragraph 7 of the complaint, which reads —
That aside from the aforesaid breach of contract,
the death of Raquel Beltran, plaintiffs' daughter,
was caused by the negligence and want of
exercise of the utmost diligence of a very
cautious person on the part of the defendants
and their agent, necessary to transport plaintiffs
and their daughter safely as far as human care
and foresight can provide in the operation of
their vehicle.
is clearly an allegation for quasi-delict. The
inclusion of this averment for quasi-delict, while
incompatible with the other claim under the
contract of carriage, is permissible under Section
2 of Rule 8 of the New Rules of Court, which
allows a plaintiff to allege causes of action in the
alternative, be they compatible with each other
or not, to the end that the real matter in
controversy may be resolved and determined.
Aboitiz v. CA
Facts: Anacleto Viana boarded the vessel M/V
Antonia, owned by Aboitiz Shipping Corporation,
at the port at San Jose, Occidental Mindoro,
bound for Manila. After said vessel had landed,
the Pioneer Stevedoring Corporation took over
the exclusive control of the cargoes loaded on
said vessel pursuant to the Memorandum of
Agreement between Pioneer and petitioner
Aboitiz.
The crane owned by Pioneer was placed
alongside the vessel and one (1) hour after the
passengers of said vessel had disembarked, it
started operation by unloading the cargoes from
said vessel. While the crane was being operated,
Anacleto Viana who had already disembarked
from said vessel obviously remembering that
some of his cargoes were still loaded in the
vessel, went back to the vessel, and it was while
he was pointing to the crew of the said vessel to
the place where his cargoes were loaded that the
crane hit him, pinning him between the side of
the vessel and the crane. He was thereafter
brought to the hospital where he later expired
three (3) days thereafter.
Private respondents Vianas filed a complaint for
damages against petitioner for breach of
contract of carriage. Aboitiz denied
responsibility contending that at the time of the
accident, the vessel was completely under the
control of respondent Pioneer Stevedoring
Corporation as the exclusive stevedoring
contractor of Aboitiz, which handled the
unloading of cargoes from the vessel of Aboitiz.
Issue: Whether or not Aboitiz is negligent and is
thus liable for the death.
Ruling: Yes. The victim Anacleto Viana was guilty
of contributory negligence, but it was the
negligence of Aboitiz in prematurely turning over
the vessel to the arrastre operator for the
unloading of cargoes which was the direct,
immediate and proximate cause of the victim's
death.
The rule is that the relation of carrier and
passenger continues until the passenger has
been landed at the port of destination and has
left the vessel owner's dock or premises. Once
created, the relationship will not ordinarily
terminate until the passenger has, after reaching
his destination, safely alighted from the carrier's
conveyance or had a reasonable opportunity to
leave the carrier's premises. All persons who
remain on the premises a reasonable time after
leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a
reasonable delay within this rule is to be
determined from all the circumstances, and
includes a reasonable time to see after his
baggage and prepare for his departure. The
carrier-passenger relationship is not terminated
merely by the fact that the person transported
has been carried to his destination if, for
example, such person remains in the carrier's
premises to claim his baggage.
It is apparent from the foregoing that what
prompted the Court to rule as it did in said case
is the fact of the passenger's reasonable
presence within the carrier's premises. That
reasonableness of time should be made to
depend on the attending circumstances of the
case, such as the kind of common carrier, the
nature of its business, the customs of the place,
and so forth, and therefore precludes a
consideration of the time element per se without
taking into account such other factors. It is thus
of no moment whether in the cited case of La
Mallorca there was no appreciable interregnum
for the passenger therein to leave the carrier's
premises whereas in the case at bar, an interval
of one (1) hour had elapsed before the victim
met the accident. The primary factor to be
considered is the existence of a reasonable cause
as will justify the presence of the victim on or
near the petitioner's vessel. We believe there
exists such a justifiable cause.
It is of common knowledge that, by the very
nature of petitioner's business as a shipper, the
passengers of vessels are allotted a longer period
of time to disembark from the ship than other
common carriers such as a passenger bus. With
respect to the bulk of cargoes and the number of
passengers it can load, such vessels are capable
of accommodating a bigger volume of both as
compared to the capacity of a regular commuter
bus. Consequently, a ship passenger will need at
least an hour as is the usual practice, to
disembark from the vessel and claim his baggage
whereas a bus passenger can easily get off the
bus and retrieve his luggage in a very short
period of time. Verily, petitioner cannot
categorically claim, through the bare expedient
of comparing the period of time entailed in
getting the passenger's cargoes, that the ruling
in La Mallorca is inapplicable to the case at bar.
On the contrary, if we are to apply the doctrine
enunciated therein to the instant petition, we
cannot in reason doubt that the victim Anacleto
Viana was still a passenger at the time of the
incident. When the accident occurred, the victim
was in the act of unloading his cargoes, which he
had every right to do, from petitioner's vessel. As
earlier stated, a carrier is duty bound not only to
bring its passengers safely to their destination
but also to afford them a reasonable time to
claim their baggage.
Lopez v. Pan American World Airways
Facts: Reservation for first class
accommodation in Pan American Airlines from
Tokyo to San Francisco was made by Delfin
Faustino for then Senator Fernando Lopez and
company. First class tickets were issued and paid
for. The party left Manila for Tokyo as scheduled.
Senator Lopez requested Minister Busuego to
contact the airlines regarding their
accommodation. However, they were informed
that there was no accommodation for them.
Because of some urgent matters to attend to in
San Francisco, they were constrained to take the
tourist flight “under protest”.
Issues:
(1) Whether the defendant acted in bad faith for
deliberate refusal to comply with its contract to
provide first-class accommodation to the
plaintiff
(2) Whether moral and exemplary damages
should be awarded
Ruling:
(1) From the evidence of defendant it is in effect
admitted that defendant - through its agents -
first cancelled plaintiffs, reservations by mistake
and thereafterdeliberately and
intentionally withheld from plaintiffs or their
travel agent the fact of said cancellation, letting
them go on believing that their first class
reservations stood valid and confirmed. In so
misleading plaintiffs into purchasing first class
tickets in the conviction that they had confirmed
reservations for the same, when in fact they had
none, defendant wilfully and knowingly placed
itself into the position of having to breach its a
foresaid contracts with plaintiffs should there be
no last-minute cancellation by other passengers
before flight time, as it turned out in this case.
Such actuation of defendant may indeed have
been prompted by nothing more than the
promotion of its self-interest in holding on to
Senator Lopez and party as passengers in its
flight and foreclosing on their chances to seek
the services of other airlines that may have been
able to afford them first class accommodations.
All the time, in legal contemplation such conduct
already amounts to action in bad faith. For bad
faith means a breach of a known duty through
some motive of interest or ill-will.
At the time plaintiffs bought their tickets,
defendant, therefore, in breach of its known
duty, made plaintiffs believe that their
reservation had not been cancelled. Such willful-
non-disclosure of the cancellation or pretense
that the reservations for plaintiffs stood - and
not simply the erroneous cancellation itself - is
the factor to which is attributable the breach of
the resulting contracts. And, as above-stated, in
this respect defendant clearly acted in bad faith.
(2) First, then, as to moral damages. As a
proximate result of defendant's breach in bad
faith of its contracts with plaintiffs, the latter
suffered social humiliation, wounded feelings,
serious anxiety and mental anguish. For plaintiffs
were travelling with first class tickets issued by
defendant and yet they were given only the
tourist class. At stop-overs, they were expected
to be among the first-class passengers by those
awaiting to welcome them, only to be found
among the tourist passengers. It may not be
humiliating to travel as tourist passengers; it is
humiliating to be compelled to travel as such,
contrary to what is rightfully to be expected from
the contractual undertaking.
The rationale behind exemplary or corrective
damages is, as the name implies, to provide an
example or correction for public good.
Defendant having breached its contracts in bad
faith, the court, as stated earlier, may award
exemplary damages in addition to moral
damages. In view of its nature, it should be
imposed in such an amount as to sufficiently and
effectively deter similar breach of contracts in
the future by defendant or other airlines. In this
light, we find it just to award P75,000.00 as
exemplary or corrective damages.
Alitalia v. IAC
Facts: Dr. Felipa Pablo, an associate professor
in the University of the Philippines and a
research grantee of the Philippine Atomic Energy
Agency, was invited to take part at a meeting of
the Department of Research and Isotopes in Italy
in view of her specialized knowledge in “foreign
substances in food and the agriculture
environment”. She would be the second speaker
on the first day of the meeting. Dr. Pablo booked
passage on petitioner Alitalia. She arrived in
Milan on the day before the meeting, but was
told that her luggage was delayed and was in a
succeeding flight from Rome to Milan. The
luggage included her materials for the
presentation. The succeeding flights did not
carry her luggage. Desperate, she went to Rome
to try to locate the luggage herself, but to no
avail. She returned to Manila without attending
the meeting. She demanded reparation for the
damages. She rejected Alitalia’s offer of free
airline tickets and commenced an action for
damages. As it turned out, the luggage was
actually forwarded to Ispra, but only a day after
the scheduled appearance. It was returned to
her after 11 months. The trial court ruled in favor
of Dr. Pablo, and this was affirmed by the Court
of Appeals.
Issues:
(1) Whether the Warsaw Convention should be
applied to limit Alitalia’s liability
(2) Whether Dr. Pablo is entitled to nominal
damages
Ruling:
(1) Under the Warsaw Convention, an air carrier
is made liable for damages for:
a. The death, wounding or other bodily injury of
a passenger if the accident causing it took place
on board the aircraft or I the course of its
operations of embarking or disembarking;
b. The destruction or loss of, or damage to, any
registered luggage or goods, if the occurrence
causing it took place during the carriage by air;
and
c. Delay in the transportation by air of respondent Court of Appeals correctly set the
passengers, luggage or goods. amount thereof at PhP 40,000.00.

The convention however denies to the carrier The Court also agrees that respondent Court of
availment of the provisions which exclude or Appeals correctly awarded attorney’s fees to Dr.
limit his liability, if the damage is caused by his Pablo and the amount of PhP 5,000.00 set by it is
wilful misconduct, or by such default on his part reasonable in the premises. The law authorizes
as is considered to be equivalent to wilful recovery of attorney’s fees inter alia where, as
misconduct. The Convention does not thus here, the defendant’s act or omission has
operate as an exclusive enumeration of the compelled the plaintiff to litigate with third
instances of an airline's liability, or as an absolute persons or to incur expenses to protect his
limit of the extent of that liability. It should be interest or where the court deems it just and
deemed a limit of liability only in those cases equitable.
where the cause of the death or injury to person,
or destruction, loss or damage to property or
delay in its transport is not attributable to or
attended by any wilful misconduct, bad faith,
recklessness, or otherwise improper conduct on
the part of any official or employee for which the
carrier is responsible, and there is otherwise no
special or extraordinary form of resulting injury.

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. The fact is, nevertheless, that some
species of injury was caused to Dr. Pablo because
petitioner ALITALIA misplaced her baggage and
failed to deliver it to her at the time appointed -
a breach of its contract of carriage. 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.

(2) She is not, of course, entitled to be

compensated for loss or damage to her luggage.
She is however entitled to nominal damages
which, as the law says, is adjudicated in order
that a right of the plaintiff, which has been
violated or invaded by the defendant, may be
vindicated and recognized, and not for the
purpose of indemnifying the plaintiff that for any
loss suffered and this Court agrees that the