PURITA S. MAPA, CARMINA S. MAPA and CORNELIO P.

MAPA, Petitioners, v.
COURT OF APPEALS AND TRANS-WORLD AIRLINES INC., Respondents.

Angara, Abello, Concepcion, Regala & Cruz, for Petitioners.

Quisumbing, Torres & Evangelista for Private Respondent.

SYNOPSIS

Petitioners purchased two (2) TWA tickers in Bangkok, Thailand. Said tickers are for Los
Angeles — New York — Boston — St. Louis-Chicago. On August 27, 1990 petitioners
Purita and Carmina S. Mapa departed for Boston, taking a connecting flight on TWA’s
carrier TW 0901 from JFK Airport, checking in seven (7) pieces of luggage at the TWA
counter in the JFK Airport. Upon arriving in Boston petitioners Purita and Carmina
proceeded to the carousel to claim their baggages and found only three (3) out of the
seven they checked in. Despite TWA’s assurance that their luggages would be located
within 48 hours, the same were never found. The total value of the lost items amounted
to $11,283.79. TWA offered to settle the case by giving petitioners two options; (a)
transportation credit for future TWA travel or (b) cash settlement. Petitioners chose the
first option, however, TWA disregarded petitioners’ option and unilaterally declared the
payment of $2,560.00 as constituting full satisfaction of petitioners’ claim. Petitioners
accepted the check for $2,560 as partial payment for the actual cost of their lost
baggages. Despite demands by petitioners respondent TWA failed and refused without
just cause to indemnify and redress petitioners for grave injury and damages they have
suffered.

Petitioners filed with the trial court a complaint for damages. The trial court dismissed
the case for lack of jurisdiction in light of Article 28(1) of the Warsaw Convention. The
trial court held that the Warsaw Convention is applicable in case at bar, since the
Philippines and the United States are parties to the convention, the contracts of
transportation come within the meaning of "International Transportation." The trial
court also held that the Philippines, not being one of the places specified in Art. 28 (1)
of the Warsaw Convention where the complaint may be instituted then it has no
jurisdiction over the present case. On appeal to the Court of Appeals, the appellate
court affirmed the ruling of the trial court. Hence, the present petition. The Supreme
Court ruled that the contracts does not fall under the category of international
transportation as provided by the Warsaw Convention. The only way to bring the
contracts between petitioners Purita and Carmina Mapa on the one hand, and TWA on
the other, within the category of international transportation is to link them or to make
them an integral part of the Manila — Los Angeles travel of Purita and Carmina through
Pal aircraft. However, the alleged international tickets issued by TWA were not
presented in evidence, clearly then; there is at all no factual basis of the finding that
the TWA tickets were issued in conjunction with the international tickets.

Petition granted and the challenged decision of the Court of Appeals is reversed and set
aside.

SYLLABUS
1. CIVIL LAW; CONTRACT OF TRANSPORTATION; WARSAW CONVENTION;
"INTERNATIONAL TRANSPORTATION," DEFINED. — As provided in Article I(2) of the
Warsaw Convention, a contract is one of international transportation only if according to
the contract made by the parties, the place of departure and the place of destination,
whether or not there be a break in the transportation or a transshipment, are situated
either within the territories of two High Contracting Parties, or within the territory of a
single High Contracting Party, if there is an agreed stopping place within a territory
subject to the sovereignty, mandate or authority of another power, even though that
power is not a party to this convention. There are then two categories of international
transportation, viz., (1) that where the place of departure and the place of destination
are situated within the territories of two High Contracting Parties regardless of whether
or not there be a break in the transportation or a transshipment; and (2) that where
the place of departure and the place of destination are within the territory of a single
High Contracting Party if there is an agreed stopping place within a territory subject to
the sovereignty, mandate, or authority of another power, even though the power is not
a party to the Convention. The High Contracting Parties referred to in the Convention
are the signatories thereto and those which subsequently adhered to it.

2. ID.; ID.; ID.; ADHERED TO BY THE REPUBLIC OF THE PHILIPPINES. — In the case of
the Philippines, the Convention was concurred in by the Senate, through Resolution No.
19, on 16 May 1950. The Philippines instrument of accession was signed by President
Elpidio Quirino on 13 October 1950 and was deposited with the Polish Government on 9
November 1950. The Convention became applicable to the Philippines on 9 February
1951. Then, on 23 September 1955, President Ramon Magsaysay issued Proclamation
No. 201, declaring the Philippines’ formal adherence thereto, "to the end that the same
and every article and clause thereof maybe observed and fulfilled in good faith by the
Republic of the Philippines and the citizens thereof.

3. ID.; ID.; ID.; WHEN CONTRACT IS NOT OF INTERNATIONAL TRANSPORTATION;

CASE AT BAR. — The contracts of transportation in this case are evidence by the two
TWA tickets, No. 015:9475:153:304 and No. 015:9475:153:305, both purchased and
issued in Bangkok, Thailand. On the basis alone of the provisions therein, it is obvious
that the place of departure and the place of destination are all in the territory of the
United States, or of a single High Contracting Party. The contracts, therefore, cannot
come within the purview of the first category of international transportation. Neither
can it be under the second category since there was NO agreed stopping place within a
territory subject to the sovereignty, mandate, or authority of another power. It must be
underscored that the first category of international transportation under the Warsaw
Convention is based on "the contract made by the parties." TWA does not claim that the
Manila-Los Angeles contracts of transportation which brought Purita and Carmina to Los
Angeles were also its contracts. It does not deny the assertion of the petitioners that
those contracts were independent of the TWA tickets issued in Bangkok, Thailand. No
evidence was offered that TWA and PAL had an agreement concerning transportation of
passengers from points of departures not served with aircrafts of one or the other.
There could have been no difficulty for such agreement, since TWA admitted without
qualification in paragraph 1 of its Answer to the second Amended Complaint the
allegation in paragraph 1.1 of the latter that TWA "is a foreign corporation licensed to
do business in the Philippines with office address at Ground Floor, Saville Building, Sen.
Gil J. Puyat Avenue, corner Paseo de Roxas, Makati, Metro Manila." cralaw virtua1aw library
4. REMEDIAL LAW; ACTIONS; MOTION TO DISMISS; EVIDENCE SHOULD HAVE BEEN
OFFERED AT THE PRELIMINARY HEARING. — TWA should have offered evidence for its
affirmative defenses at the preliminary hearing therefor. Section 5 of Rule 16 of the
Rules of Court expressly provides: SEC. 5. Pleading grounds as affirmative defenses. —
Any of the grounds for dismissal provided for in this rule, except improper venue, may
be pleaded as an affirmative defense, and a preliminary hearing may be had thereon as
if a motion to dismiss had been filed. Without any further evidence as earlier discussed,
the trial court should have denied the affirmative defense of lack of jurisdiction because
it did not appear to be indubitable. Section 3 of Rule 16 of the Rules of Court provides:
SEC. 3. Hearing and order. — After hearing the court may deny or grant the motion or
allow amendment of pleading, or may defer the hearing and determination of the
motion until the trial if the ground alleged therein does not appear to be indubitable.

DECISION

DAVIDE, JR., J.:

The main issue in this petition for review under Rule 45 of the Rules of Court is the
applicability of Article 28(1) of the Warsaw Convention; 1 which provides as follows: chanrob1es virtual 1aw library

ARTICLE 28.(1) An action for damages must be brought, at the option of the plaintiff, in
the territory of one of the High Contracting Parties, either before the court of the
domicile of the carrier or of his principal place of business, or where he has a place of
business through which the contract has been made, or before the court at the place of
destination.

We are urged by the petitioners to reverse the 31 May 1995 Decision of the Court of
Appeals in CA-G.R. CV No. 39896 2 affirming the 24 July 1992 Order of the Regional
Trial Court of Quezon City Branch 102, which dismissed Civil Case No. Q-91-9620 3 on
the ground of lack of jurisdiction in view of the aforementioned Article 28(1) of the
Warsaw Convention.

The antecedent facts, as summarized by the Court of Appeals, are as follows: chanrob1es virtual 1aw library

Plaintiffs Cornelio P. Mapa and Purita S. Mapa are respectable members of the society.
Mr. Mapa is an established businessman and currently the Regional General Manager of
Akerlund and Rausing, a multinational packaging material manufacturer based in
Manila. He was previously the Senior Vice President of Phimco Industries, an affiliate
company of Swedish Match Company. Mrs. Mapa is a successful businesswoman
engaged in the commercial transactions of high value antique and oriental arts decor
items originating from Asian countries. Carmina S. Mapa is the daughter of plaintiffs
Purita and Cornelio and is a graduate of the International School in Bangkok, Thailand,
now presently enrolled at the Boston University where she is majoring in
communication. chanroblesvirtuallawlibrary

Plaintiffs Mapa entered into contract of air transportation with defendant TWA as
evidenced by TWA ticket Nos. 015:9475:153:304 and 015:9475:153:305, purchased in
Bangkok, Thailand. Said TWA tickets are for Los Angeles-New York-Boston-St. Louis-
Chicago. . .

Domicile of carrier TWA is Kansas City, Missouri, USA. Its principal place of business is
Kansas City, Missouri, USA. TWA’s place of business through which the contracts were
made is Bangkok, Thailand. The place of destination is Chicago, USA.

On August 10, 1990, plaintiffs Carmina and Purita left Manila on board PAL flight NO.
104 for Los Angeles. Carmina was to commence schooling and thus was accompanied
by Purita to assist her in settling down at the University.

They arrived in Los Angeles on the same date and stayed there until August 14, 1990
when they left for New York City.

On August 14, 1990, plaintiffs Purita and Carmina S. Mapa arrived at the John F.
Kennedy (JFK) Airport, New York, on TWA Flight No. 904.

On August 27, 1990, plaintiffs Purita and Carmina S. Mapa departed for Boston, taking
a connecting flight on TWA’s carrier, TW 0901, from JFK Airport, New York, to Boston’s
Logan Airport, checking in seven (7) pieces of luggage at the TWA counter in the JFK
Airport. The seven baggages were received by a porter who issued seven TWA baggage
receipts numbered 17-8270, 71, 72, 73, 74, 75, and 76 therefor.

From the entrance gate of the terminal building, plaintiffs Purita and Carmina
proceeded to TWA’s ticket counter and presented their confirmed TWA tickets
numbered 015:9475:153:304 and 015:9475:153:305 with a 3:00 p.m. departure time.
They were issued their boarding passes and were instructed to proceed to gate 35 for
boarding. At about 2:40 p.m., plaintiffs noticed that there was still no instruction to
board the aircraft so they made inquiries. The TWA ground stewardess informed
plaintiffs that they were at the wrong gate because their flight was boarding at gate 1.
Upon hearing this, plaintiffs rushed to gate 1 which was in another building terminal. At
gate 1, they were told by a TWA ground stewardess that flight 901 had just departed.
However, they were consoled that another TWA flight was leaving for Boston after 30
minutes and plaintiffs could use the same boarding pass for the next flight. At around
3:15 p.m., plaintiffs Purita and Carmina were able to board the next flight. However,
the plane was not immediately cleared for take off on account of a thunderstorm. The
passengers were instructed to stay inside the aircraft until 6:00 p.m. when the plane
finally left for Boston.

Upon arriving in Boston, plaintiffs Purita and Carmina proceeded to the carousel to
claim their baggages and found only three out of the seven they checked in, to wit: one
Samsonite on the carousel, another Samsonite lying on the floor near the carousel and
a third baggage, an American Tourister, inside the unclaimed baggage office. Plaintiffs
immediately reported the loss of their four baggages to the TWA Baggage Office at
Logan Airport. TWA’s representative confidently assured them that their baggages
would be located within 24 hours and not more than 48 hours.

On September 2, 1990, plaintiffs received a letter from TWA, signed by Mr. J.A. Butler,
Customer Relations-Baggage Service, apologizing for TWA’s failure to locate the missing
luggage and requesting plaintiffs to accomplish a passenger property questionnaire to
facilitate a further intensive and computerized search for the lost luggage. Plaintiffs duly
accomplished the passenger property questionnaire, taking pains to write down in detail
the contents of each missing baggage. The total value of the lost items amounted to
$11,283.79

On September 20, 1990, plaintiffs’ counsel wrote TWA thru its General Sales Manager
in the Philippines, Daniel Tuason, with office address at Ground Floor, Saville Building,
Sen. Gil J. Puyat Avenue corner Paseo de Roxas, Makati, Metro Manila demanding
indemnification for the grave damage and injury suffered by the plaintiffs.

TWA again assured plaintiffs that intensive search was being conducted.

On October 8, 1990, TWA offered to amicably settle the case by giving plaintiffs-
appellants two options: (a) transportation credit for future TWA travel or (b) cash
settlement. Five months lapsed without any result on TWA’s intensive search.

On January 3, 1991, plaintiffs-appellants opted for transportation credit for future TWA
travel

On January 11, 1991, TWA disregarded plaintiffs’ option and unilaterally declared the
payment of $2,560.00 as constituting full satisfaction of the plaintiffs’ claim.

On July 19, 1991, plaintiffs accepted the check for $2,560.00 as partial payment for the
actual cost of their lost baggages and their contents.

Despite demands by plaintiffs, TWA failed and refused without just cause to indemnify
and redress plaintiffs for the grave injury and damages they have suffered. 4

Purita S. Mapa, Carmina S. Mapa, and Cornelio P. Mapa (herein petitioners) then filed
with the trial court on 1 August 1991 a complaint 5 for damages, 6 which was docketed
as Civil Case No. Q-91-9620. Before a responsive pleading was filed, the petitioners
filed an Amended Complaint. 7 They prayed that after due trial private respondent
Trans-World Airlines, Inc. (hereafter, TWA), be ordered to pay them the following
amounts: (1) US$8,723.79, or its equivalent in Philippine currency, representing the
cost of the lost luggage and its contents; (2) US$2,949.50, or its equivalent in
Philippine currency, representing the cost of hotel, board and lodging, and
communication expenses; (3) P1 million, by way of moral damages; (4) P1 million, by
way of exemplary damages, with legal interest on said amounts from the date of
extrajudicial demand thereof; and (5) P500,000.00 as attorney’s fees, cost of the suit,
and other expenses of litigation. 8

On 26 February 1992, TWA filed its Answer to the Amended Complaint raising, as
special and affirmative defense, lack of jurisdiction of Philippine courts over the action
for damages in that pursuant to Article 28(1) of the Warsaw Convention, the action
could only be brought either in Bangkok where the contract was entered into, or in
Boston which was the place of destination, or in Kansas City which is the carrier’s
domicile and principal place of business.

TWA further alleged that pursuant to the Warsaw Convention and the Notice of Baggage
Limitations at the back of the tickets, its liability to the petitioners is limited to US$9.07
per pound, or US$20.00 per kilo, which is in lieu of actual and compensatory damages.
Even assuming that petitioners’ bag weighed the maximum acceptable weight of 70
pounds, TWA’s maximum liability is $640.00 per bag or $2,560.00 for the four pieces of
baggage, which the petitioners have been offered and have accepted. TWA also
submitted that it could not be liable for moral and exemplary damages and attorney’s
fees because it did not act in a wanton, fraudulent, reckless, oppressive, or malevolent
manner. 9

On 7 February 1992, the petitioners filed their second Amended Complaint 10 to include
a claim of US$2,500, or its equivalent in Philippine Currency, representing the
additional replacement cost of the items and personal effects contained in their lost
luggage; and US$4,500 representing the travel expenses, hotel, lodging, food and
other expenses of petitioner Cornelio Mapa, who was constrained to join his family in
Boston to extend the necessary assistance in connection with the lost luggage.

After the filing of TWA’s Answer to the second Amended Complaint, 11 and petitioners’
Reply thereto, the trial court gave TWA ten days within which to submit a memorandum
in support of its affirmative defenses; after which the incident would be deemed
submitted for resolution. 12 However, after TWA filed its Memorandum, 13 the trial
court gave the petitioners five days within which to file a reply memorandum; and TWA,
two days from receipt of the latter to file its comment thereon. 14 The petitioners then
filed their Opposition (by way of Reply Memorandum) 15 to which TWA filed a Reply. 16
Thereafter, the petitioners submitted a Rejoinder 17; TWA, a Surrejoinder. 18

On 24 July 1992, the trial court issued an Order 19 dismissing the case for lack of
jurisdiction in light of Article 28(1) of the Warsaw Convention. Thus: chanrob1es virtual 1aw library

It is plaintiffs’ theory that the Warsaw Convention does not apply to the instant case
because plaintiffs’ contract of transportation does not constitute "international
transportation" as defined in said convention. This however is belied by the Passenger
Property Questionnaire which is Annex C of plaintiffs’ amended complaint. Page two of
said questionnaire accomplished by plaintiffs under the heading "Your Complete
Itinerary" shows that the TWA tickets issued to the plaintiffs form part of the contract of
transportation to be performed from Manila to the United States. Since the Philippines
and the United States are parties to the convention, plaintiffs’ contracts of
transportation come within the meaning of International Transportation.

x           x          x

On the basis of the foregoing, the Court holds that the Warsaw Convention is applicable
to the case at bar, even if the basis of plaintiffs’ present action is breach of contract of
carriage under the New Civil Code.

The next question to be resolved is whether or not the Court has jurisdiction to try the
present case in the light of the provision Art. 28(1) above-quoted.

Under Art. 28(1) supra, a complaint for damages against an air carrier can be instituted
only in any of the following places/courts:chanrob1es virtual 1aw library
(1) The court of the domicile of the carrier;

(2) The court of its principal place of business;

(3) The court where it has a place of business through which the contract had been
made;

(4) The court of the place of destination.

In interpreting the provision of Art. 28(1) of the Warsaw Convention, the Supreme
Court in the same case of Augusto Benedicto Santos v. Northwest Airlines held: chanrob1es virtual 1aw library

Whether Article 28(1) refers to jurisdiction or only to venue is a question over which
authorities are sharply divided. While the petitioner cites several cases holding that
Article 28(1) refers to venue rather that jurisdiction, there are later cases cited by the
private respondent supporting the conclusion that the provision is jurisdictional.

Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be conferred
by consent or waiver upon a court which otherwise would have no jurisdiction over the
subject-matter of an action; but the venue of an action is fixed by statute may be
changed by the consent of the parties and an objection that the plaintiff brought his suit
in the wrong country may be waived by the failure of the defendant to make a timely
objection. In either case, the court may render a valid judgment. Rules as to
jurisdiction can never be left to the consent or agreement of the parties, whether or not
a prohibition exists against their alteration.

A number of reasons tends to support the characterization of Article 28(1) as

jurisdiction and not a venue provision. First, the wording of Article 32, which indicates
the places where the action for damages "must" be brought, underscores the
mandatory nature of Article 28(1). Second, this characterization is consistent with one
of the objectives of the Convention, which is to "regulate in a uniform manner the
conditions of international transportation by air." Third, the Convention does not
contain any provision prescribing rules of jurisdiction other than Article 28(1), which
means that the phrase "rules as to jurisdiction" used in Article 32 must refer only to
Article 28(1). In fact, the last sentence of Article 32 specifically deals with the exclusive
enumeration in Article 28(1) as "jurisdiction," which, as such, cannot be left to the will
of the parties regardless of the time when the damage occurred." cralaw virtua1aw library

It has been shown by the defendant that the domicile of the defendant Trans World
Airlines, Inc. is Kansas City, Missouri, its principal place of business is also in Kansas
City, Missouri, the carrier’s place of business through which the contracts were made is
Bangkok (Annexes A and A-1, Amended Complaint), and the place of destination was
Boston.

The Philippines not being one of the places specified in Art. 28(1) abovequoted where
the complaint may be instituted, this Court therefore, does not have jurisdiction over
the present case.

Evidently discontented with the trial court’s order, the petitioners appealed to the Court
of Appeals, contending that the lower court erred in not holding that (1) it has
jurisdiction over the instant case and (2) the Warsaw Convention is inapplicable in the
instant case because the subject matter of the case is not included within the coverage
of the said convention. 20 They claimed that their cause of action could be based on
breach of contract of air carriage founded on Articles 1733, 1734, 1735, 1755, and
1756 of the New Civil Code governing common carriers or Article 2176 of the same
Code governing tort or quasi-delict.

The appellate court disagreed with the petitioners and affirmed the order of the trial
court. It held that the Warsaw Convention is the law which governs the dispute
between the petitioners and TWA because what is involved in international
transportation defined by said Convention in Article I(2). This holding is founded on its
determination that the two TWA tickets for Los Angeles-New York-Boston-St. Louis-
Chicago purchased in Bangkok, Thailand, were issued in conjunction with, and therefore
formed part of, the contract of transportation performed from Manila, Philippines, to the
United States.

The respondent court further held that the cause of action of the petitioners arose from
the loss of the four checked pieces of baggage, which then falls under Article 18(1),
Chapter III (Liability of the Carrier) of the Warsaw Convention. 21 Pursuant to Article
24(1) of the Convention, all actions for damages, whether based on tort, code law of
common law, arising from loss of baggage under Article 18 of the Warsaw Convention,
can only be brought subject to the conditions and limits set forth in the Warsaw
Convention. Article 28(1) thereof sets forth conditions and limits in that the action for
damages may be instituted only in the territory of one of the High Contracting Parties,
before the court of (1) the domicile of the carrier, (2) the carrier’s principal place of
business, (3) the place of business through which the contract has been made, or (4)
the place of destination. Since the Philippines is not one of these places, a Philippine
Court, like the RTC, has no jurisdiction over the complaint for damages.

Respondent Court of Appeals likewise held that the petitioners could not claim
application of Articles 1733, 1734, 1735, 1755, and 1756 of the New Civil code on
common carriers without taking into consideration Article 1753 of the same Code, which
provides that the law of the country to which the goods are to be transported shall
govern the liability of the common carrier for their loss, destruction, or deterioration.
Since the country of ultimate destination is Chicago, the law of Chicago shall govern the
liability of TWA for the loss of the four pieces of baggage. Neither is Article 2176 of the
New Civil code on torts or quasi-delicts applicable in view of the private international
law principle of lex loci delicti commissi. 22 In addition, comformably with Santos III v.
Northwest Orient Airlines, 23 mere allegation of willful misconduct resulting in a tort is
insufficient to exclude the case from the comprehension of the Warsaw Convention.

Failing in their bid to reconsider the decision, the petitioners filed this petition. They
aver that respondent Court of Appeals gravely erred (1) in holding that the Warsaw
Convention is applicable to this case and (2) in applying Article 1753 of the Civil Code
and the principle of lex loci delicti commissi. 24

We resolved to give due course to the petition after the filing by TWA of its Comment
on the petition and noted without action for the reasons stated in the resolution of 25
September 1996 petitioners’ Reply and Rejoinder. We then required the parties to
submit their respective memoranda. They did in due time.
The petitioners insist that the Warsaw Convention is not applicable to their case
because the contracts they had with TWA did not involve an international
transportation. Whether the contracts were of international transportation is to be
solely determined from the TWA tickets issued to them in Bangkok, Thailand, which
showed that their itinerary was Los Angeles-New-York-Boston-St. Louis-Chicago.
Accordingly, since the place of departure (Los Angeles) and the place of destination
(Chicago) are both within the territory of one High Contracting Party, with no agreed
stopping place in a territory subject to the sovereignty, mandate, suzerainty or
authority of another Power, the contracts did not constitute ‘international
transportation’ as defined by the convention. They also claim to be without legal basis
the contention of TWA that their transportation contracts were of international
character because of the handwritten notations in the tickets re "INT’L TKT #079-
4402956821-2" and INT’L TKT #079-4402956819." Notwithstanding such notations,
the TWA tickets, viz., (a) No. 015:9475:153:304 and (b) No. 015:9475:153:305 did
not cease to be for the itinerary therein designated. Besides, it is a fact that petitioners
Purita and Carmina Mapa traveled from Manila to Los Angeles via Philippine Airlines
(PAL) by virtue of PAL tickets issued independently of the TWA tickets.

The pith issue to be resolved under the petitioners’ first assigned error is whether the
contracts of transportation between Purita and Carmina Mapa, on the one hand, and
TWA, on the other, were contracts of "international transportation" under the Warsaw
Convention. If they were, then we should sustain the trial court and the Court of
Appeals in light of our ruling in Santos v. Northwest Orient Airlines. 25 It appears clear
to us that TWA itself, the trial court, and the Court of Appeals, impliedly admit that if
the sole basis were the two TWA tickets for Los Angeles-New-York-Boston-St. Louis-
Chicago, the contracts cannot be brought within the term "international transportation,"
as defined in Article I(2) of the Warsaw Convention. As provided therein, a contract is
one of international transportation only if

according to the contract made by the parties, the place of departure and the place of
destination, whether or not there be a break in the transportation or a transshipment,
are situated either within the territories of two High Contracting Parties, or within the
territory of a single High Contracting Party, if there is an agreed stopping place within a
territory subject to the sovereignty, mandate or authority of another power, even
though that power is not a party to this convention.

There are then two categories of international transportation, viz., (1) that where the
place of departure and the place of destination are situated within the territories of two
High Contracting Parties regardless of whether or not there be a break in the
transportation or a transshipment; and (2) that where the place of departure and the
place of destination are within the territory of a single High Contracting Party if there is
an agreed stopping place within a territory subject to the sovereignty, mandate, or
authority of another power, even though the power is not a party to the Convention.

The High Contracting Parties referred to in the Convention are the signatories thereto
and those which subsequently adhered to it. In the case of the Philippines, the
Convention was concurred in by the Senate, through Resolution No. 19, on 16 May
1950. The Philippine instrument of accession was signed by President Elpidio Quirino on
13 October 1950 and was deposited with the Polish Government on 9 November 1950.
The Convention became applicable to the Philippines on 9 February 1951. Then, on 23
September 1955, President Ramon Magsaysay issued Proclamation No. 201, declaring
the Philippines’ formal adherence thereto, "to the end that the same and every article
and clause thereof may be observed and fulfilled in good faith by the Republic of the
Philippines and the citizens thereof. 26

The contracts of transportation in this case are evidenced by the two TWA tickets, No.
015:9475:153:304 and No. 015:9475:153:305, both purchased and issued in Bangkok,
Thailand. On the basis alone of the provisions therein, it is obvious that the place of
departure and the place of destination are all in the territory of the United States, or of
a single High Contracting Party. The contracts, therefore, cannot come within the
purview of the first category of international transportation. Neither can it be under the
second category since there was NO agreed stopping place within a territory subject to
the sovereignty, mandate, or authority of another power.

The only way to bring the contracts between Purita and Carmina Mapa, on the one
hand, and TWA, on the other, within the first category of "international transportation"
is to link them with, or to make them an integral part of, the Manila-Los Angeles travel
of Purita and Carmina through PAL aircraft. The "linkages" which have been pointed out
by the TWA, the trial court, and the Court of Appeals are (1) the handwritten notations,
viz., INT’L TKT #079-4402956821-2 and INT’L TKT #079-4402956819, on the two TWA
tickets; and (2) the entries made by petitioners Purita and Carmina Mapa in column
YOUR COMPLETE ITINERARY in TWA’s Passenger Property Questionnaire, wherein they
mentioned their travel from Manila to Los Angeles in flight PR 102.

The alleged "international tickets" mentioned in the notations in conjunction with which
the two TWA tickets were issued were not presented.. Clearly then, there is at all no
factual basis of the finding that the TWA tickets were issued in conjunction with the
international tickets, which are even, at least as of now, non-existent.

As regards the petitioner’s entry in YOUR COMPLETE ITINERARY column of the

Passenger Property Questionnaire wherein they included the Manila-Los Angeles travel,
it must be pointed out that this was made on 4 September 1990 27 by petitioners
Purita and Carmina Mapa, and only in connection with their claim for their lost pieces of
baggage. The loss occurred much earlier, or on 27 August 1990. The entry can by no
means be considered as a part of, or supplement to, their contracts of transportation
evidenced by the TWA tickets which covered transportation within the United States
only.

It must be underscored that the first category of international transportation under the
Warsaw Convention is based on "the contract made by the parties." TWA does not claim
that the Manila-Los Angeles contracts of transportation which brought Purita and
Carmina to Los Angeles were also its contracts. It does not deny the assertion of the
petitioners that those contracts were independent of the TWA tickets issued in Bangkok,
Thailand. No evidence was offered that TWA and PAL had an agreement concerning
transportation of passengers from points of departures not served with aircrafts of one
or the other. There could have been no difficulty for such agreement, since TWA
admitted without qualification in paragraph 1 of its Answer 28 to the second Amended
Complaint the allegation in paragraph 1.1 of the latter 29 that TWA "is a foreign
corporation licensed to do business in the Philippines with office address at Ground
Floor, Saville Building, Sen. Gil. J. Puyat Avenue, corner Paseo de Roxas, Makati, Metro
Manila."cralaw virtua1aw library

TWA relies on Article I(3) of the Convention, which provides as follows: chanrob1es virtual 1aw library

3. A carriage to be performed by several successive air carriers is deemed, for the

purposes of this Convention, to be one undivided carriage, if it has been regarded by
the parties as a single operation, whether it had 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 a series of contracts is to be performed entirely within a
territory subject to the sovereignty, suzerainty, mandate, or authority of the same High
Contracting Party.

It also points to Article 15 of the IATA Recommend Practice 1724, which provides:
Carriage to be performed by several successive carriers under one ticket, or under a
ticket and any conjunction ticket issued in connection therewith, is regarded as a single
operation." 30

The flaw of respondents’ position is the presumption that the parties have "regarded" as
an "undivided carriage" or as a "single operation" the carriage from Manila to Los
Angeles through PAL then to New York-Boston-St. Louis-Chicago through TWA. The
dismissal then of the second Amended Complaint by the trial court and the Court of
Appeals’ affirmance of the dismissal were not based on indubitable facts or grounds,
but on inferences without established factual basis.

TWA should have offered evidence for its affirmative defenses at the preliminary
hearing therefor. Section 5 of Rule 16 of the Rules of Court expressly provides: chanrob1es virtual 1aw library

SEC. 5. Pleading grounds as affirmative defenses. — Any of the grounds for dismissal
provided for in this rule, except improper venue, may be pleaded as an affirmative
defense, and a preliminary hearing may be had thereon as if a motion to dismiss had
been filed.

Without any further evidence as earlier discussed, the trial court should have denied
the affirmative defense of lack of jurisdiction because it did not appear to be
indubitable. Section 3 of Rule 16 of the Rules of Court provides: chanrob1es virtual 1aw library

SEC. 3. Hearing and order. — After hearing the court may deny or grant the motion or
allow amendment of pleading, or may defer the hearing and determination of the
motion until the trial if the ground alleged therein does not appear to be indubitable. chanroblesvirtuallawlibrary:red

WHEREFORE, the instant petition is GRANTED and the challenged decision of 31 May
1995 of respondent Court of Appeals in CA-G.R. CV No. 39896, as well as the Order of
24 July 1992 of the Regional Trial Court of Quezon City, Branch 102, in Civil Case No.
Q-91-9620, is REVERSED and SET ASIDE.

The Regional Trial Court of Quezon City, Branch 102, is hereby DIRECTED to proceed
with the pre-trial, if it has not been terminated, and with the trial on the merits of the
case and then to render judgment thereon, taking into account the foregoing
observations on the issue of jurisdiction.
SO ORDERED.

Narvasa, C.J., Melo, Francisco and Panganiban, JJ., concur.

G.R. No. L-49407 August 19, 1988

NATIONAL DEVELOPMENT COMPANY, petitioner-appellant,

vs.
THE COURT OF APPEALS and DEVELOPMENT INSURANCE & SURETY
CORPORATION, respondents-appellees.

No. L-49469 August 19, 1988

MARITIME COMPANY OF THE PHILIPPINES, petitioner-appellant,

vs.
THE COURT OF APPEALS and DEVELOPMENT INSURANCE & SURETY
CORPORATION, respondents- appellees.

Balgos & Perez Law Office for private respondent in both cases.

PARAS, J.:

These are appeals by certiorari from the decision * of the Court of Appeals in CA G.R. No: L- 46513-R entitled "Development Insurance and
Surety Corporation plaintiff-appellee vs. Maritime Company of the Philippines and National Development Company defendant-appellants,"
affirming in toto the decision ** in Civil Case No. 60641 of the then Court of First Instance of Manila, Sixth Judicial District, the dispositive
portion of which reads:

WHEREFORE, judgment is hereby rendered ordering the defendants National

Development Company and Maritime Company of the Philippines, to pay jointly and
severally, to the plaintiff Development Insurance and Surety Corp., the sum of
THREE HUNDRED SIXTY FOUR THOUSAND AND NINE HUNDRED FIFTEEN
PESOS AND EIGHTY SIX CENTAVOS (364,915.86) with the legal interest thereon
from the filing of plaintiffs complaint on April 22, 1965 until fully paid, plus TEN
THOUSAND PESOS (Pl0,000.00) by way of damages as and for attorney's fee.

On defendant Maritime Company of the Philippines' cross-claim against the

defendant National Development Company, judgment is hereby rendered, ordering
the National Development Company to pay the cross-claimant Maritime Company of
the Philippines the total amount that the Maritime Company of the Philippines may
voluntarily or by compliance to a writ of execution pay to the plaintiff pursuant to the
judgment rendered in this case.

With costs against the defendant Maritime Company of the Philippines.

(pp. 34-35, Rollo, GR No. L-49469)

The facts of these cases as found by the Court of Appeals, are as follows:

The evidence before us shows that in accordance with a memorandum agreement

entered into between defendants NDC and MCP on September 13, 1962, defendant
NDC as the first preferred mortgagee of three ocean going vessels including one with
the name 'Dona Nati' appointed defendant MCP as its agent to manage and operate
said vessel for and in its behalf and account (Exh. A). Thus, on February 28, 1964
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 People's Bank and Trust
Company acting for and in behalf of the Pan Asiatic Commercial Company, Inc., who
represents Riverside Mills Corporation (Exhs. K-2 to K7-A & L-2 to L-7-A). 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 (Exhs. M & M-1). En
route to Manila the vessel Dofia Nati figured in a collision at 6:04 a.m. on April 15,
1964 at Ise Bay, Japan with a Japanese vessel 'SS Yasushima Maru' as a result of
which 550 bales of aforesaid cargo of American raw cotton were lost and/or
destroyed, of which 535 bales as damaged were landed and sold on the authority of
the General Average Surveyor for Yen 6,045,-500 and 15 bales were not landed and
deemed lost (Exh. G). The damaged and lost cargoes was worth P344,977.86 which
amount, the plaintiff as insurer, paid to the Riverside Mills Corporation as holder of
the negotiable bills of lading duly endorsed (Exhs. L-7-A, K-8-A, K-2-A, K-3-A, K-4-A,
K-5-A, A- 2, N-3 and R-3}. 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 P19,938.00 which the plaintiff
as insurer paid to Guilcon as holder of the duly endorsed bill of lading (Exhibits M-1
and S-3). Thus, the plaintiff had paid as insurer the total amount of P364,915.86 to
the consignees or their successors-in-interest, for the said lost or damaged cargoes.
Hence, plaintiff filed this complaint to recover said amount from the defendants-NDC
and MCP as owner and ship agent respectively, of the said 'Dofia Nati' vessel. (Rollo,
L-49469, p.38)

On April 22, 1965, the Development Insurance and Surety Corporation filed before the then Court of
First Instance of Manila an action for the recovery of the sum of P364,915.86 plus attorney's fees of
P10,000.00 against NDC and MCP (Record on Appeal), pp. 1-6).

Interposing the defense that the complaint states no cause of action and even if it does, the action
has prescribed, MCP filed on May 12, 1965 a motion to dismiss (Record on Appeal, pp. 7-14). DISC
filed an Opposition on May 21, 1965 to which MCP filed a reply on May 27, 1965 (Record on Appeal,
pp. 14-24). On June 29, 1965, the trial court deferred the resolution of the motion to dismiss till after
the trial on the merits (Record on Appeal, p. 32). On June 8, 1965, MCP filed its answer with
counterclaim and cross-claim against NDC.

NDC, for its part, filed its answer to DISC's complaint on May 27, 1965 (Record on Appeal, pp. 22-
24). It also filed an answer to MCP's cross-claim on July 16, 1965 (Record on Appeal, pp. 39-40).
However, on October 16, 1965, NDC's answer to DISC's complaint was stricken off from the record
for its failure to answer DISC's written interrogatories and to comply with the trial court's order dated
August 14, 1965 allowing the inspection or photographing of the memorandum of agreement it
executed with MCP. Said order of October 16, 1965 likewise declared NDC in default (Record on
Appeal, p. 44). On August 31, 1966, NDC filed a motion to set aside the order of October 16, 1965,
but the trial court denied it in its order dated September 21, 1966.
On November 12, 1969, after DISC and MCP presented their respective evidence, the trial court
rendered a decision ordering the defendants MCP and NDC to pay jointly and solidarity to DISC the
sum of P364,915.86 plus the legal rate of interest to be computed from the filing of the complaint on
April 22, 1965, until fully paid and attorney's fees of P10,000.00. Likewise, in said decision, the trial
court granted MCP's crossclaim against NDC.

MCP interposed its appeal on December 20, 1969, while NDC filed its appeal on February 17, 1970
after its motion to set aside the decision was denied by the trial court in its order dated February
13,1970.

On November 17,1978, the Court of Appeals promulgated its decision affirming in toto the decision
of the trial court.

Hence these appeals by certiorari.

NDC's appeal was docketed as G.R. No. 49407, while that of MCP was docketed as G.R. No.
49469. On July 25,1979, this Court ordered the consolidation of the above cases (Rollo, p. 103). On
August 27,1979, these consolidated cases were given due course (Rollo, p. 108) and submitted for
decision on February 29, 1980 (Rollo, p. 136).

In its brief, NDC cited the following assignments of error:

THE COURT OF APPEALS ERRED IN APPLYING ARTICLE 827 OF THE CODE OF COMMERCE
AND NOT SECTION 4(2a) OF COMMONWEALTH ACT NO. 65, OTHERWISE KNOWN AS THE
CARRIAGE OF GOODS BY SEA ACT IN DETERMINING THE LIABILITY FOR LOSS OF
CARGOES RESULTING FROM THE COLLISION OF ITS VESSEL "DONA NATI" WITH THE
YASUSHIMA MARU"OCCURRED AT ISE BAY, JAPAN OR OUTSIDE THE TERRITORIAL
JURISDICTION OF THE PHILIPPINES.

II

THE COURT OF APPEALS ERRED IN NOT DISMISSING THE C0MPLAINT FOR

REIMBURSEMENT FILED BY THE INSURER, HEREIN PRIVATE RESPONDENT-APPELLEE,
AGAINST THE CARRIER, HEREIN PETITIONER-APPELLANT. (pp. 1-2, Brief for Petitioner-
Appellant National Development Company; p. 96, Rollo).

On its part, MCP assigned the following alleged errors:

THE RESPONDENT COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENT

DEVELOPMENT INSURANCE AND SURETY CORPORATION HAS NO CAUSE OF ACTION AS
AGAINST PETITIONER MARITIME COMPANY OF THE PHILIPPINES AND IN NOT DISMISSING
THE COMPLAINT.

II

THE RESPONDENT COURT OF APPEALS ERRED IN NOT HOLDING THAT THE CAUSE OF
ACTION OF RESPONDENT DEVELOPMENT INSURANCE AND SURETY CORPORATION IF
ANY EXISTS AS AGAINST HEREIN PETITIONER MARITIME COMPANY OF THE PHILIPPINES
IS BARRED BY THE STATUTE OF LIMITATION AND HAS ALREADY PRESCRIBED.

III

THE RESPONDENT COURT OF APPEALS ERRED IN ADMITTING IN EVIDENCE PRIVATE

RESPONDENTS EXHIBIT "H" AND IN FINDING ON THE BASIS THEREOF THAT THE
COLLISION OF THE SS DONA NATI AND THE YASUSHIMA MARU WAS DUE TO THE FAULT
OF BOTH VESSELS INSTEAD OF FINDING THAT THE COLLISION WAS CAUSED BY THE
FAULT, NEGLIGENCE AND LACK OF SKILL OF THE COMPLEMENTS OF THE YASUSHIMA
MARU WITHOUT THE FAULT OR NEGLIGENCE OF THE COMPLEMENT OF THE SS DONA
NATI

IV

THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT UNDER THE CODE OF
COMMERCE PETITIONER APPELLANT MARITIME COMPANY OF THE PHILIPPINES IS A SHIP
AGENT OR NAVIERO OF SS DONA NATI OWNED BY CO-PETITIONER APPELLANT NATIONAL
DEVELOPMENT COMPANY AND THAT SAID PETITIONER-APPELLANT IS SOLIDARILY LIABLE
WITH SAID CO-PETITIONER FOR LOSS OF OR DAMAGES TO CARGO RESULTING IN THE
COLLISION OF SAID VESSEL, WITH THE JAPANESE YASUSHIMA MARU.

THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT THE LOSS OF OR

DAMAGES TO THE CARGO OF 550 BALES OF AMERICAN RAW COTTON, DAMAGES WERE
CAUSED IN THE AMOUNT OF P344,977.86 INSTEAD OF ONLY P110,000 AT P200.00 PER BALE
AS ESTABLISHED IN THE BILLS OF LADING AND ALSO IN HOLDING THAT PARAGRAPH 1O
OF THE BILLS OF LADING HAS NO APPLICATION IN THE INSTANT CASE THERE BEING NO
GENERAL AVERAGE TO SPEAK OF.

VI

THE RESPONDENT COURT OF APPEALS ERRED IN HOLDING THE PETITIONERS NATIONAL

DEVELOPMENT COMPANY AND COMPANY OF THE PHILIPPINES TO PAY JOINTLY AND
SEVERALLY TO HEREIN RESPONDENT DEVELOPMENT INSURANCE AND SURETY
CORPORATION THE SUM OF P364,915.86 WITH LEGAL INTEREST FROM THE FILING OF THE
COMPLAINT UNTIL FULLY PAID PLUS P10,000.00 AS AND FOR ATTORNEYS FEES INSTEAD
OF SENTENCING SAID PRIVATE RESPONDENT TO PAY HEREIN PETITIONERS ITS
COUNTERCLAIM IN THE AMOUNT OF P10,000.00 BY WAY OF ATTORNEY'S FEES AND THE
COSTS. (pp. 1-4, Brief for the Maritime Company of the Philippines; p. 121, Rollo)

The pivotal issue in these consolidated cases is the determination of which laws govern loss or
destruction of goods due to collision of vessels outside Philippine waters, and the extent of liability
as well as the rules of prescription provided thereunder.

The main thrust of NDC's argument is to the effect that the Carriage of Goods by Sea Act should
apply to the case at bar and not the Civil Code or the Code of Commerce. Under Section 4 (2) of
said Act, the carrier is not responsible for the loss or damage resulting from the "act, neglect or
default of the master, mariner, pilot or the servants of the carrier in the navigation or in the
management of the ship." Thus, NDC insists that based on the findings of the trial court which were
adopted by the Court of Appeals, both pilots of the colliding vessels were at fault and negligent, NDC
would have been relieved of liability under the Carriage of Goods by Sea Act. Instead, Article 287 of
the Code of Commerce was applied and both NDC and MCP were ordered to reimburse the
insurance company for the amount the latter paid to the consignee as earlier stated.

This issue has already been laid to rest by this Court of Eastern Shipping Lines Inc. v. IAC (1 50
SCRA 469-470 [1987]) 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.

In the case at bar, it has been established that the goods in question are transported from San
Francisco, California and Tokyo, Japan to the Philippines and that they were lost or due to a collision
which was found to have been caused by the negligence or fault of both captains of the colliding
vessels. Under the above ruling, it is evident that the laws of the Philippines will apply, and it is
immaterial that the collision actually occurred in foreign waters, such as Ise Bay, Japan.

Under Article 1733 of the Civil Code, common carriers from the nature of their business and for
reasons of public policy are bound to observe extraordinary diligence in the vigilance over the goods
and for the safety of the passengers transported by them according to all circumstances of each
case. Accordingly, under Article 1735 of the same Code, in all other than those mentioned is Article
1734 thereof, the common carrier shall be presumed to have been at fault or to have acted
negigently, unless it proves that it has observed the extraordinary diligence required by law.

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.

More specifically, Article 826 of the Code of Commerce provides that where collision is imputable to
the personnel of a vessel, the owner of the vessel at fault, shall indemnify the losses and damages
incurred after an expert appraisal. But more in point to the instant case is Article 827 of the same
Code, which provides that if the collision is imputable to both vessels, each one shall suffer its own
damages and both shall be solidarily responsible for the losses and damages suffered by their
cargoes.

Significantly, under the provisions of the Code of Commerce, particularly Articles 826 to 839, the
shipowner or carrier, is not exempt from liability for damages arising from collision due to the fault or
negligence of the captain. Primary liability is imposed on the shipowner or carrier in recognition of
the universally accepted doctrine that the shipmaster or captain is merely the representative of the
owner who has the actual or constructive control over the conduct of the voyage (Y'eung Sheng
Exchange and Trading Co. v. Urrutia & Co., 12 Phil. 751 [1909]).

There is, therefore, no room for NDC's interpretation that the Code of Commerce should apply only
to domestic trade and not to foreign trade. Aside from the fact that the Carriage of Goods by Sea Act
(Com. Act No. 65) does not specifically provide for the subject of collision, said Act in no uncertain
terms, restricts its application "to all contracts for the carriage of goods by sea to and from Philippine
ports in foreign trade." Under Section I thereof, it is explicitly provided that "nothing in this Act shall
be construed as repealing any existing provision of the Code of Commerce which is now in force, or
as limiting its application." By such incorporation, it is obvious that said law not only recognizes the
existence of the Code of Commerce, but more importantly does not repeal nor limit its application.

On the other hand, Maritime Company of the Philippines claims that Development Insurance and
Surety Corporation, has no cause of action against it because the latter did not prove that its alleged
subrogers have either the ownership or special property right or beneficial interest in the cargo in
question; neither was it proved that the bills of lading were transferred or assigned to the alleged
subrogers; thus, they could not possibly have transferred any right of action to said plaintiff- appellee
in this case. (Brief for the Maritime Company of the Philippines, p. 16).

The records show that the Riverside Mills Corporation and Guilcon, Manila are the holders of the
duly endorsed bills of lading covering the shipments in question and an examination of the invoices
in particular, shows that the actual consignees of the said goods are the aforementioned companies.
Moreover, no less than MCP itself issued a certification attesting to this fact. Accordingly, as it is
undisputed that the insurer, plaintiff appellee paid the total amount of P364,915.86 to said
consignees for the loss or damage of the insured cargo, it is evident that said plaintiff-appellee has a
cause of action to recover (what it has paid) from defendant-appellant MCP (Decision, CA-G.R. No.
46513-R, p. 10; Rollo, p. 43).

MCP next contends that it can not be liable solidarity with NDC because it is merely the manager
and operator of the vessel Dona Nati not a ship agent. As the general managing agent, according to
MCP, it can only be liable if it acted in excess of its authority.

As found by the trial court and by the Court of Appeals, the Memorandum Agreement of September
13, 1962 (Exhibit 6, Maritime) shows that NDC appointed MCP as Agent, a term broad enough to
include the concept of Ship-agent in Maritime Law. In fact, MCP was even conferred all the powers
of the owner of the vessel, including the power to contract in the name of the NDC (Decision, CA
G.R. No. 46513, p. 12; Rollo, p. 40). Consequently, under the circumstances, MCP cannot escape
liability.

It is well settled that both the owner and agent of the offending vessel are liable for the damage done
where both are impleaded (Philippine Shipping Co. v. Garcia Vergara, 96 Phil. 281 [1906]); that in
case of collision, both the owner and the agent are civilly responsible for the acts of the captain
(Yueng Sheng Exchange and Trading Co. v. Urrutia & Co., supra citing Article 586 of the Code of
Commerce; Standard Oil Co. of New York v. Lopez Castelo, 42 Phil. 256, 262 [1921]); that while it is
true that the liability of the naviero in the sense of charterer or agent, is not expressly provided in
Article 826 of the Code of Commerce, it is clearly deducible from the general doctrine of
jurisprudence under the Civil Code but more specially as regards contractual obligations in Article
586 of the Code of Commerce. Moreover, the Court held that both the owner and agent (Naviero)
should be declared jointly and severally liable, since the obligation which is the subject of the action
had its origin in a tortious act and did not arise from contract (Verzosa and Ruiz, Rementeria y Cia v.
Lim, 45 Phil. 423 [1923]). Consequently, the agent, even though he may not be the owner of the
vessel, is liable to the shippers and owners of the cargo transported by it, for losses and damages
occasioned to such cargo, without prejudice, however, to his rights against the owner of the ship, to
the extent of the value of the vessel, its equipment, and the freight (Behn Meyer Y Co. v. McMicking
et al. 11 Phil. 276 [1908]).

As to the extent of their liability, MCP insists that their liability should be limited to P200.00 per
package or per bale of raw cotton as stated in paragraph 17 of the bills of lading. Also the MCP
argues that the law on averages should be applied in determining their liability.
MCP's contention is devoid of merit. The declared value of the goods was stated in the bills of lading
and corroborated no less by invoices offered as evidence ' during the trial. Besides, common
carriers, in the language of the court in Juan Ysmael & Co., Inc. v. Barrette et al., (51 Phil. 90 [1927])
"cannot limit its liability for injury to a loss of goods where such injury or loss was caused by its own
negligence." Negligence of the captains of the colliding vessel being the cause of the collision, and
the cargoes not being jettisoned to save some of the cargoes and the vessel, the trial court and the
Court of Appeals acted correctly in not applying the law on averages (Articles 806 to 818, Code of
Commerce).

MCP's claim that the fault or negligence can only be attributed to the pilot of the vessel SS
Yasushima Maru and not to the Japanese Coast pilot navigating the vessel Dona Nati need not be
discussed lengthily as said claim is not only at variance with NDC's posture, but also contrary to the
factual findings of the trial court affirmed no less by the Court of Appeals, that both pilots were at
fault for not changing their excessive speed despite the thick fog obstructing their visibility.

Finally on the issue of prescription, the trial court correctly found that the bills of lading issued allow
trans-shipment of the cargo, which simply means that the date of arrival of the ship Dona Nati on
April 18,1964 was merely tentative to give allowances for such contingencies that said vessel might
not arrive on schedule at Manila and therefore, would necessitate the trans-shipment of cargo,
resulting in consequent delay of their arrival. In fact, because of the collision, the cargo which was
supposed to arrive in Manila on April 18, 1964 arrived only on June 12, 13, 18, 20 and July 10, 13
and 15, 1964. Hence, had the cargoes in question been saved, they could have arrived in Manila on
the above-mentioned dates. Accordingly, the complaint in the instant case was filed on April 22,
1965, that is, long before the lapse of one (1) year from the date the lost or damaged cargo "should
have been delivered" in the light of Section 3, sub-paragraph (6) of the Carriage of Goods by Sea
Act.

PREMISES CONSIDERED, the subject petitions are DENIED for lack of merit and the assailed
decision of the respondent Appellate Court is AFFIRMED.

SO ORDERED.

Melencio-Herrera, (Chairperson), Padilla, and Sarmiento, JJ., concur.