transpo

In sum, a consignee, although not a signatory to the contract of carriage

between the shipper and the carrier, becomes a party to the contract by reason
of either a) the relationship of agency between the consignee and the shipper/
consignor; b) the unequivocal acceptance of the bill of lading delivered to the
consignee, with full knowledge of its contents or c) availment of the stipulation
pour autrui, i.e., when the consignee, a third person, demands before the carrier
the fulfillment of the stipulation made by the consignor/shipper in the
consigneeʼs favor, specifically the delivery of the goods/cargoes shipped.
In the instant case, Shin Yang consistently denied in all of its pleadings that it
authorized Halla Trading, Co. to ship the goods on its behalf; or that it got hold
of the bill of lading covering the shipment or that it demanded the release of
the cargo. Basic is the rule in evidence that the burden of proof lies upon him
who asserts it, not upon him who denies, since, by the nature of things, he who
denies a fact cannot produce any proof of it. Thus, MOF has the burden to
controvert all these denials, it being insistent that Shin Yang asserted itself as
the consignee and the one that caused the shipment of the goods to the
Philippines.
In civil cases, the party having the burden of proof must establish his case by
preponderance of evidence, which means evidence which is of greater weight,
or more convincing than that which is offered in opposition to it. Here, MOF
failed to meet the required quantum of proof. Other than presenting the bill of
lading, which, at most, proves that the carrier acknowledged receipt of the
subject cargo from the shipper and that the consignee named is to shoulder the
freightage, MOF has not adduced any other credible evidence to strengthen its
cause of action. It did not even present any witness in support of its allegation
that it was Shin Yang which furnished all the details indicated in the bill of lading
and that Shin Yang consented to shoulder the shipment costs. There is also
nothing in the records which would indicate that Shin Yang was an agent of
Halla Trading Co. or that it exercised any act that would bind it as a named
consignee. Thus, the CA correctly dismissed the suit for failure of petitioner to
establish its cause against respondent
MOF Company v. Shin Yang
Facts:
Halla shipped to Manila secondhand cars and other articles on board the
vessel Hanjin Busan.
The bill of lading was prepared by the carrier Hanjin where Shin Yang was
named as the consignee and indicated that payment was on a "Freight Collect"
basis (meaning the consignee/receiver of the goods would be the one to pay for
the freight and other charges).
When the shipment arrived in Manila MOF, Hanjinʼs exclusive general agent in
the Philippines, demanded the payment from Shin Yang.
Shin Yang refused to pay the freight and other charges. Shin Yang is saying
that it is not the ultimate consignee but merely the consolidator/forwarder.
Shin Yang contends that the fact that its name was mentioned as the
consignee of the cargoes did not make it automatically liable for the freightage
because it never benefited from the shipment.
It never claimed or accepted the goods, it was not the shipperʼs agent, it was
not aware of its designation as consignee and the original bill of lading was
never endorsed to it.
Issue:
Whether a consignee, who is not a signatory to the bill of lading, is bound by the
stipulations thereof? - Yes
Whether Shin Yang, who was not an agent of the shipper and who did not make
any demand for the fulfillment of the stipulations of the bill of lading drawn in its
favor, is liable to pay the corresponding freight and handling charges? - No
Held: While it is true that a bill of lading serves two (2) functions: first, it is a
receipt for the goods shipped; second, it is a contract by which three parties,
namely, the shipper, the carrier and the consignee who undertake specific
responsibilities and assume stipulated obligations.
The bill of lading is oftentimes drawn up by the shipper/consignor and the
carrier without the intervention of the consignee. However, the latter can be
bound by the stipulations of the bill of lading when a) there is a relation of
agency between the shipper or consignor and the consignee or b) when the
consignee demands fulfillment of the stipulation of the bill of lading which was
drawn up in its favor.

Ace Navigation Co. Inc., petitioner v. FGU Insurance Corporation and Pioneer
Insurance and Surety Corporation, respondents
Facts:
Cardia Limited shipped on board the vessel M/V Pakarti Tiga at Shanghai Port,
China, 8260 metric tons (or 165,200 bags) of Grey Portland Cement to be
discharged at the Port of Manila and delivered to its consignee, Heindrich
Trading Corp. The subject shipment was insured with respondents FGU
Insurance Corp. and Pioneer Insurance and Surety Corp. against all risks for the
amount of Php 18,048,421.00. Regency Express Lines S.A., chartered by Sky
International, Inc. having entered into a contract with Shinwa Kaiun Kaisha Ltd.
to which the subject vessel was chartered by the owner Pakarti Tata, was the
one which directly dealt with Heindrich and accordingly issued Clean Bill of
Lading No. SM-1.
The vessel arrived at the Port of Manila and the shipment was discharged. Upon
inspection by Heindrich and Ace Navigation Co. Inc, agent of Cardia Limited, it
was found that out of the 165,200 bags of cement, 43,905 bags were in bad
order and condition. The respondents, unable to collect the sustained damages
from Cardia Limited and Regency Express Lines S.A., each paid Heindrich
separately totaling to Php 711,727.34 and became sub rated to all the rights and
causes of action accruing to Heindrich. Respondents filed a complaint for
damages. Ace Navigation Co. Inc. claimed it was not a real party-in-interest
from whom the respondents can demand compensation. The respondents
maintain that Ace Navigation Co. Inc is a ship agent and not a mere agent of
Cardia, as found by both the CA and the RTC.
Issue:
Whether or not Ace Navigation Co. Inc. be held liable for damages sought by
FGU Insurance Corporation and Pioneer Insurance and Surety Corporation.
Decision:
Article 586 of the Code of Commerce provides that “the ship owner and the
ship agent shall be civilly liable for the acts of the captain and for the obligations
contracted by the latter to repair, equip and provision the vessel, provided the
creditor proves the amount claimed was invested therein. By ship agent is
understood the person entrusted with the provisioning of a vessel, or who
represents her in the port in which she may be found.” Due to the above

provision, the Court disagreed with respondentsʼ contention. Thus, Ace

Navigation Co. Inc. cannot be held liable for damages sought by the
respondents.

[G.R. No. 118030. January 15, 2004]

PROVIDENT INSURANCE CORP., petitioner, vs. HONORABLE
COURT OF APPEALS and AZUCAR SHIPPING CORP.,
respondents.
DECISION
YNARES-SANTIAGO, J.:
This is a petition for review under Rule 45 of the Rules of Court assailing the
Decision of the Court of Appeals dated November 15, 1994, which affirmed the
appealed Orders dated August 12, 1991 and February 4, 1992 issued by the
Regional Trial Court of Manila, Branch 51, in Civil Case No. 91-56167.
The pertinent facts as culled from the stipulation of facts submitted by the
parties are as follows:
On or about June 5, 1989, the vessel MV Eduardo II took and received on board
at Sangi, Toledo City a shipment of 32,000 plastic woven bags of various
fertilizer in good order and condition for transportation to Cagayan de Oro City.
The subject shipment was consigned to Atlas Fertilizer Corporation, and
covered by Bill of Lading No. 01 and Marine Insurance Policy No. CMI-211/89-
CB.
Upon its arrival at General Santos City on June 7, 1989, the vessel MV Eduardo II
was instructed by the consignees representative to proceed to Davao City and
deliver the shipment to its Davao Branch in Tabigao.
On June 10, 1989, the MV Eduardo II arrived in Davao City where the subject
shipment was unloaded. In the process of unloading the shipment, three bags of
fertilizer fell overboard and 281 bags were considered to be unrecovered
spillages. Because of the mishandling of the cargo, it was determined that the
consignee incurred actual damages in the amount of P68,196.16.
As the claims were not paid, petitioner Provident Insurance Corporation
indemnified the consignee Atlas Fertilizer Corporation for its damages.
Thereafter, petitioner, as subrogee of the consignee, filed on June 3, 1991 a
complaint against respondent carrier seeking reimbursement for the value of the
losses/damages to the cargo.
Respondent carrier moved to dismiss the complaint on the ground that the claim
or demand by petitioner has been waived, abandoned or otherwise extinguished
for failure of the consignee to comply with the required claim for damages set
forth in the first sentence of Stipulation No. 7 of the bill of lading, the full text of
which reads
7. All claims for damages to the goods must be made to the carrier at the
time of delivery to the consignee or his agent if the package or containers
show exterior sign of damage, otherwise to be made in writing to the carrier
within twenty-four hours from the time of delivery. Notice of loss due to
delay must be given in writing to the carrier within 30 days from the time the
goods were ready for delivery, or in case of non-delivery or misdelivery of
shipment the written notice must be given within 30 days after the arrival at
the port of discharge of the vessels on which the goods were received in
case of the failure of the vessel on which the goods were shipped to arrived
at the port of discharge, misdelivery must be presented in writing to the
carrier within two months after the arrival of the vessel of the port of
discharge or in case of the failure of the vessel in which the goods were
shipped to arrive at the port of discharge written claims shall be made
within 30 days of the time the vessel should have arrived. The giving of
notice and the filing of claims as above provided shall be conditions
precedent to the securing of the right of actions against the carrier for
losses due to delay, non-delivery, or misdelivery. In the case of damage to
goods, the filing of the suit based upon claims arising from damage, delay,
non-delivery or mis-delivery shall be instituted within one year from the
date of the accrual of the right of action. Failure to institute judicial
proceedings as herein provided shall constitute a waiver of the claim or right
of action, and no agent nor employee of the carrier shall have authority to
waive any of the provisions or requirements of this bill of lading. Any action
by the ship owner or its agents or attorneys in considering or dealing with
claims where the provisions or requirements of this bill of lading have not
been complied with shall not be considered a waiver of such requirements
and they shall not be considered as waived except by an express waiver.[1]
(Italics Supplied)
The trial court, in an Order dated August 12, 1991, found the motion to dismiss
well taken and accordingly, dismissed the complaint.[2]
Petitioner filed a motion for reconsideration which the trial court, in an Order
dated February 4, 1992, denied.[3]
Aggrieved by the lower courts decision, petitioner appealed to the Court of
Appeals. On November 15, 1994, the Court of Appeals rendered the assailed
decision which affirmed the lower courts Orders dated August 12, 1991 and
February 4, 1992.[4] Hence, this petition raising the lone error that
THE HONORABLE COURT OF APPEALS HAS DECIDED THE QUESTION IN
ISSUE NOT IN ACCORDANCE WITH THE PURPOSE FOR WHICH THE LAW WAS
ESTABLISHED AND CONTRARY TO THE EXISTING JURISPRUDENCE.[5]
In support of its petition, petitioner contends that it is unreasonable for the
consignee Atlas Fertilizer Corporation to be required to abide by the provisions
of Stipulation No. 7 of the bill of lading. According to petitioner, since the place
of delivery was remote and inaccessible, the consignee cannot be expected to
have been able to immediately inform its main office and make the necessary
claim for damages for the losses and unrecovered spillages in the subject cargo.
Petitioner further argues that the contents of the bill of lading are printed in
small letters that no one would bother to read them, as they are difficult to read.
Finally, petitioner avers that from June 13 to 18, 1987, the vessels Chief Officer
supervised the unloading of the shipment and thereafter signed a discharging
report attesting to the fact of loss and unrecovered spillages on the cargo. Thus,
petitioner argues that respondent carriers knowledge of the loss and spillages
was substantial compliance with the notice of claim required under Stipulation
No. 7 of the bill of lading.
The petition is bereft of merit.
It is a fact admitted by both parties that the losses and damages were caused
by the mishandling of the cargo by respondent carrier. There is also no dispute
that the consignee failed to strictly comply with Stipulation No. 7 of the Bill of
Lading in not making claims for damages to the goods within the twenty-four
hour period from the time of delivery, and that there was no exterior sign of
damage of the goods. Consequently, the only issue left to be resolved is
whether the failure to make the prompt notice of claim as required is fatal to the
right of petitioner to claim indemnification for damages.
The bill of lading defines the rights and liabilities of the parties in reference to
the contract of carriage. Stipulations therein are valid and binding in the
absence of any showing that the same are contrary to law, morals, customs,
public order and public policy. Where the terms of the contract are clear and
leave no doubt upon the intention of the contracting parties, the literal meaning
of the stipulations shall control.
In light of the foregoing, there can be no question about the validity and
enforceability of Stipulation No. 7 in the bill of lading. The twenty-four hour
requirement under the said stipulation is, by agreement of the contracting
parties, a sine qua non for the accrual of the right of action to recover damages
against the carrier. The wisdom of this kind of proviso has been succinctly
explained in Consunji v. Manila Port Service, where it was held:
Carriers and depositaries sometimes require presentation of claims within a
short time after delivery as a condition precedent to their liability for losses.
Such requirement is not an empty formalism. It has a definite purpose, i.e., to
afford the carrier or depositary a reasonable opportunity and facilities to check
the validity of the claims while the facts are still fresh in the minds of the
persons who took part in the transaction and the document are still available.[6]
Considering that a prompt demand was necessary to foreclose the possibility of
fraud or mistake in ascertaining the validity of claims, there was a need for the
consignee or its agent to observe the conditions provided for in Stipulation No.
7. Hence, petitioners insistence that respondent carrier had knowledge of the
damage because one of respondent carriers officers supervised the unloading
operations and signed a discharging report, cannot be construed as sufficient
compliance with the aforementioned proviso. The Discharge Report is not the
notice referred to in Stipulation No. 7, hence, its accomplishment cannot be
considered substantial compliance of the requirement embodied therein.
Moreover, a reading of the first paragraph of Stipulation No. 7 will readily show
that upon the consignee or its agent rests the obligation to make the necessary
claim within the prescribed period and not merely rely on the supposed
knowledge of the damages by the carrier.
Petitioner also makes much of the fact that it had nothing to do with the
preparation of the bill of lading. Worse, according to petitioner, the bill of lading,
particularly Stipulation No. 7, was printed in very small letters that no one would
be minded to closely examine the contents thereof and understand its legal
implications.
We are not persuaded. A bill of lading is in the nature of a contract of adhesion,
defined as one where one of the parties imposes a ready-made form of contract
which the other party may accept or reject, but which the latter cannot modify.
One party prepares the stipulation in the contract, while the other party merely
affixes his signature or his adhesion thereto, giving no room for negotiation and
depriving the latter of the opportunity to bargain on equal footing. Nevertheless,
these types of contracts have been declared as binding as ordinary contracts,
the reason being that the party who adheres to the contract is free to reject it
entirely.[7]
After it received the bill of lading without any objection, consignee Atlas
Fertilizer Corporation was presumed to have knowledge of its contents and to
have assented to the terms and conditions set forth therein. The
pronouncement by this Court in Magellan Manufacturing Marketing Corp. v.
Court of Appeals may be cited by analogy
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.[8] (Italics
Supplied)
In this regard, we also quote with approval the lower courts view on the matter
when it said:
It is very clear that the Bill of Lading provides for the time or period within which
a claim should be made or suit filed in Court. Plaintiff or Atlas Fertilizer
Corporation failed on this score. Moreover, Atlas Fertilizer Corporation could not
claim ignorance of the contents of the Bill of Lading just because the printed
letters are so small that they are hard to read or that the shipper did not sign it
for Atlas Fertilizer Corporation being a regular shipper and a big corporation.
Plaintiff is presumed to know the contents thereof for the reason that this is the
very document (Annex A of the complaint) where plaintiff relied its suit.[9]
We are likewise not inclined to lend credence to petitioners allegation that the
lack of communications facilities in the place of delivery prevented the
consignee from making a prompt claim for recovery of damages as prescribed
by Stipulation No. 7. It is indeed hard to believe that Atlas Fertilizer Corporation,
being an established corporation and a regular shipper, would be so inept as not
to have the necessary facilities to at least monitor, in the form of
communications equipment, the condition of its large shipment involving 32,000
bags of fertilizer. As pointed out by the appellate court, at this day and age of
advanced telecommunications and modern transportation, even in the year
1989, the time limitation provided for in Stipulation No. 7 are just and
reasonable.
WHEREFORE, in view of all the foregoing, the petition is DENIED. The Decision
of the Court of Appeals in CA-G.R. CV No. 36498 is AFFIRMED in toto.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, Carpio, and Azcuna, JJ., concur.

Transportation Case Digest: Sweet Lines, Inc. V. Teves (1978)

G.R. No. L-37750 May 19, 1978

Lessons Applicable: Contract of Adhesion (Transportation)

Laws Applicable: 

FACTS:

● Atty. Leovigildo Tandog and Rogelio Tiro bought tickets for

Tagbilaran City via the port of Cebu
● Since many passengers were bound for Surigao, M/S "Sweet
Hope would not be proceeding to Bohol
● They went to the proper brancg office and was relocated to M/S
 "Sweet Town" where they were forced to agree "to hide at the cargo section
to avoid inspection of the officers of the Philippine Coastguard." and they
were exposed to the scorching heat of the sun and the dust coming from
the ship's cargo of corn grits and their tickets were not honored so they had
to purchase a new one
● They sued Sweet Lines for damages and for breach of contract of
carriage  before the Court of First Instance of Misamis Oriental who
dismissed the compalitn for improper venue
● A motion was premised on the condition printed at the back of the
tickets -dismissed
● instant petition for prohibition for preliminary injunction
ISSUE: W/N a common carrier engaged in inter-island shipping stipulate thru
condition printed at the back of passage tickets to its vessels that any and all
actions arising out of the contract of carriage should be filed only in a particular
province or city

HELD: NO.petition for prohibition is DISMISSED. Restraining order LIFTED and

SET ASIDE

● contract of adhesion
○ not that kind of a contract where the parties sit down to
deliberate, discuss and agree specifically on all its terms, but rather,
one which respondents took no part at all in preparing
○ just imposed upon them when they paid for the fare for the
freight they wanted to ship
● We find and hold that Condition No. 14 printed at the back of the
passage tickets should be held as void and unenforceable for the following
reasons
○ circumstances obligation in the inter-island ship
◆ will prejudice rights and interests of innumerable
passengers in different s of the country who, under Condition No.
14, will have to file suits against petitioner only in the City of Cebu 
○ subversive of public policy on transfers of venue of actions
◆ philosophy underlying the provisions on transfer of venue of
actions is the convenience of the plaintiffs as well as his witnesses
and to promote 21 the ends of justice
Shewaram vs, Philippine Airlines 
(17 SCRA 606, (1966) 

Facts: A PAL ticket, on the reverse side, stated in fine print that if the value of
baggage is not stated, and the baggage is lost, the maximum liability of PAL is
P100.00 if value in excess of P100.00 is stated, PAL will charge extra because
PAL is being held liable for an amount exceeding P100.00. Shewaram, a Hindu
from Davao, boarded a PAL plane for Manila. Among his baggage was a camera
with P800.00 and it was lost. PAL offered to pay P100.00. Shewaram wanted full
payment of P800.00. 

Issue: Whether the limited liability rule shall apply in the case at bar? 

Held: The limited liability rule shall not apply. Since this is a stipulation on
qualified liability, which operates to reduce the liability of the carrier, the carrier
and the shipper must agree thereupon. Otherwise, the carrier will be liable for
full. PAL is fully liable (for full) because Shewaran did not agree to the stipulation
on the ticket, as manifested by the fact that Shewaram did not sign the ticket.
Ticket should have been signed.

National Development Corporation v. Court of Appeals

G.R. No. L-49407, 19 August 1988, 164 SCRA 593
FACTS:
NDC as the first preferred mortgagee of three ocean going vessels including
one with the name ‘Dona Natiʼ appointed MCP as its agent to manage and
operate said vessel for and in its behalf and account. Thus, the E. Philipp
Corporation of New York loaded on board the vessel “Dona Nati” at San
Francisco, California, a total of 1,200 bales of American raw cotton consigned to
the order of Manila Banking Corporation, Manila and the Peopleʼs Bank and Trust
Company acting for and in behalf of the Pan Asiatic Commercial Company, Inc.,
who represents Riverside Mills Corporation. Also loaded on the same vessel at
Tokyo, Japan, were the cargo of Kyokuto Boekui, Kaisa, Ltd., consigned to the
order of Manila Banking Corporation consisting of 200 cartons of sodium lauryl
sulfate and 10 cases of aluminum foil.
En route to Manila the vessel Dofia Nati figured in a collision at Ise Bay, Japan
with a Japanese vessel ‘SS Yasushima Maruʼ as a result of which 550 bales of
aforesaid cargo of American raw cotton were lost and/or destroyed. The
damaged and lost cargoes were paid by the insurer to the Riverside Mills
Corporation as holder of the negotiable bills of lading duly endorsed.
Also considered totally lost were the aforesaid shipment of Kyokuto, Boekui
Kaisa Ltd., consigned to the order of Manila Banking Corporation, Manila, acting
for Guilcon, Manila. The total loss was paid by the insurer to Guilcon as holder of
the duly endorsed bill of lading. Hence, plaintiff filed this complaint to recover
said amount from the NDC and MCP as owner and ship agent respectively, of
the said ‘Dofia Natiʼ vessel.
ISSUE:
Which laws govern loss or destruction of goods due to collision of vessels
outside Philippine waters?
HELD:
This issue has already been laid to rest by this Court in Eastern Shipping Lines
Inc. v. IAC where it was held under similar circumstance “that the law of the
country to which the goods are to be transported governs the liability of the
common carrier in case of their loss, destruction or deterioration” (Article 1753,
Civil Code). Thus, the rule was specifically laid down that for cargoes
transported from Japan to the Philippines, the liability of the carrier is governed
primarily by the Civil Code and in all matters not regulated by said Code, the
rights and obligations of common carrier shall be governed by the Code of
commerce and by laws (Article 1766, Civil Code). Hence, the Carriage of Goods
by Sea Act, a special law, is merely suppletory to the provision of the Civil Code.
It is immaterial that the collision actually occurred in foreign waters, such as Ise
Bay, Japan. It appears, however, that collision falls among matters not
specifically regulated by the Civil Code, so that no reversible error can be found
in respondent courses application to the case at bar of Articles 826 to 839,
Book Three of the Code of Commerce, which deal exclusively with collision of
vessels.

ANICETO G. SALUDO, JR., MARIA SALVACION SALUDO, LEOPOLDO G.

SALUDO and SATURNINO G. SALUDO, petitioners, vs. HON. COURT OF
APPEALS, TRANS WORLD AIRLINES, INC., and PHILIPPINE AIRLINES,
INC., respondents.
 
G.R. No. 95536, March 23, 1992, Second Division, REGALADO, J.
 
The carrier has the right to accept shipper's marks as to the contents of the
package offered for transportation and is not bound to inquire particularly
about them in order to take advantage of a false classification and where a
shipper expressly represents the contents of a package to be of a
designated character, it is not the duty of the carrier to ask for a repetition
of the statement nor disbelieve it and open the box and see for itself.
 
Facts:
 
Petitioners herein together with Pomierski and Son Funeral Home of Chicago
brought the remains of petitionersʼ mother to Continental Mortuary Air Services
(CMAS) which booked the shipment of the remains from Chicago to San
Francisco by Trans World Airways (TWA) and from San Francisco to Manila with
Philippine Airlines (PAL).
 
The remains were taken to the Chicago Airport, but it turned out that there were
two (2) bodies in the said airport. Somehow the two (2) bodies were switched,
and the remains of petitionersʼ mother was shipped to Mexico instead.
 
The shipment was immediately loaded on another PAL flight and it arrived the
day after the expected arrival. Petitioners filed a claim for damages in court.
Petitioners consider TWA's statement that "it had to rely on the information
furnished by the shipper" a lame excuse and that its failure to prove that its
personnel verified and identified the contents of the casket before loading the
same constituted negligence on the part of TWA.
 
The lower court absolved both airlines and upon appeal it was affirmed by the
court.
 
 
Issue:
Whether or not private respondents is liable for damages for the switching of
the two caskets.
 
 
Ruling:
 
No. The Supreme Court concluded that the switching occurred or, more
accurately, was discovered on October 27, 1976; and based on the above
findings of the Court of appeals, it happened while the cargo was still with
CMAS, well before the same was place in the custody of private respondents.
Verily, no amount of inspection by respondent airline companies could have
guarded against the switching that had already taken place. Or, granting that
they could have opened the casket to inspect its contents, private respondents
had no means of ascertaining whether the body therein contained was indeed
that of Crispina Saludo except, possibly, if the body was that of a male person
and such fact was visually apparent upon opening the casket. However, to
repeat, private respondents had no authority to unseal and open the same nor
did they have any reason or justification to resort thereto.
 
It is the right of the carrier to require good faith on the part of those persons
who deliver goods to be carried, or enter into contracts with it, and inasmuch as
the freight may depend on the value of the article to be carried, the carrier
ordinarily has the right to inquire as to its value. Ordinarily, too, it is the duty of
the carrier to make inquiry as to the general nature of the articles shipped and of
their value before it consents to carry them; and its failure to do so cannot
defeat the shipper's right to recovery of the full value of the package if lost, in
the absence of showing of fraud or deceit on the part of the shipper. In the
absence of more definite information, the carrier has a the right to accept
shipper's marks as to the contents of the package offered for transportation and
is not bound to inquire particularly about them in order to take advantage of a
false classification and where a shipper expressly represents the contents of a
package to be of a designated character, it is not the duty of the carrier to ask
for a repetition of the statement nor disbelieve it and open the box and see for
itself. However, where a common carrier has reasonable ground to suspect that
the offered goods are of a dangerous or illegal character, the carrier has the
right to know the character of such goods and to insist on an inspection, if
reasonable and practical under the circumstances, as a condition of receiving
and transporting such goods.
 
It can safely be said then that a common carrier is entitled to fair representation
of the nature and value of the goods to be carried, with the concomitant right to
rely thereon, and further noting at this juncture that a carrier has no obligation to
inquire into the correctness or sufficiency of such information. The consequent
duty to conduct an inspection thereof arises in the event that there should be
reason to doubt the veracity of such representations. Therefore, to be subjected
to unusual search, other than the routinary inspection procedure customarily
undertaken, there must exist proof that would justify cause for apprehension
that the baggage is dangerous as to warrant exhaustive inspection, or even
refusal to accept carriage of the same; and it is the failure of the carrier to act
accordingly in the face of such proof that constitutes the basis of the common
carrier's liability.
 
In the case at bar, private respondents had no reason whatsoever to doubt the
truth of the shipper's representations. The airway bill expressly providing that
"carrier certifies goods received below were received for carriage," and that the
cargo contained "casketed human remains of Crispina Saludo," was issued on
the basis of such representations. The reliance thereon by private respondents
was reasonable and, for so doing, they cannot be said to have acted negligently.
Likewise, no evidence was adduced to suggest even an iota of suspicion that
the cargo presented for transportation was anything other than what it was
declared to be, as would require more than routine inspection or call for the
carrier to insist that the same be opened for scrutiny of its contents per
declaration.
 
Nonetheless, the facts show that petitioners' right to be treated with due
courtesy in accordance with the degree of diligence required by law to be
exercised by every common carrier was violated by TWA and this entitles them,
at least, to nominal damages from TWA alone. Articles 2221 and 2222 of the
Civil Code make it clear that nominal damages are not intended for
indemnification of loss suffered but for the vindication or recognition of a right
violated of invaded.
 
WHEREFORE, with the modification that an award of P40,000.00 as and by way
of nominal damages is hereby granted in favor of petitioners to be paid by
respondent Trans World Airlines, the appealed decision is AFFIRMED in all other
respects.