British Airways vs.

CA

FACTS:

February 15, 1981: First International Trading and General Services Co. (First Int'l), a duly licensed domestic
recruitment and placement agency, received a telex message from its principal ROLACO Engineering and
Contracting Services (ROLACO) in Jeddah, Saudi Arabia to recruit Filipino contract workers in its behalf
Early March 1981: ROLACO paid British Airways, Inc. (BA) Jeddah branch the airfare tickets for 93 contract
workers with specific instruction to transport the workers to Jeddah on or before March 30, 1981
o As soon as BA received a prepaid ticket advice from its Jeddah branch informed First Int'l.
Thereafter, First Int'l instructed ADB Travel and Tours. Inc. (its travel agent) to book the 93
workers with BA but it failed
So First Int'l had to borrow P304,416.00 for the purchase of airline tickets from the
other airlines for the 93 workers who must leave immediately since the visas are
valid only for 45 days and the Bureau of Employment Services mandates that
contract workers must be sent to the job site within a period of 30 days
First week of June, 1981: First Int'l was again informed by BA that it had received a prepaid ticket advice from its
Jeddah branch for the transportation of 27 contract workers.
o Immediately, First Int'l instructed its ADB to book the 27 contract workers with the BA but only 16 seats
were confirmed and booked on its June 9, 1981 flight.
June 9, 1981: only 9 workers were able to board said flight while the remaining 7 workers were rebooked to:
June 30, 1981 - again cancelled by British without any prior notice to either First Int'l or the workers
July 4,1981 - (6 + 7 workers) 13 workers were again cancelled and rebooked to July 7, 1981.
July 6, 1981: First Int'l paid the travel tax of the workers as required by BA but when the receipt of the tax
payments was submitted, only 12 seats were confirmed for July 7, 1981 flight
July 7, 1981: Flight was again cancelled without any prior notice
12 workers were finally able to leave for Jeddah after First Int'l had bought tickets from the other airlines
As a result of these incidents, First Int'l sent a letter to BA demanding compensation for the damages it had
incurred by the repeated failure to transport its contract workers despite confirmed bookings and payment of the
corresponding travel taxes.
July 23, 1981: the counsel of First Int'l sent another letter to BA demanding P350,000.00 damages and unrealized
profit or income - denied
August 8, 1981: First Int'l received a telex message from ROLACO cancelling the hiring of the remaining
recruited workers due to the delay in transporting the workers to Jeddah.
January 27, 1982: First Int'l filed a complaint for damages against First Int'l
CA Affirmed RTC: BA to pay First Int'l damages, attorneys fees and costs

ISSUE: W/N BA is not liable because there was no contract of carriage as no ticket was ever issued

HELD: Affirmed. MODIFICATION that the award of actual damages be deleted (reimbursed by ROLACO)

In dealing with the contract of common carriage of passengers for purpose of accuracy, there are two (2) aspects of
the same, namely:
o (a) the contract "to carry (at some future time)," which contract is consensual and is necessarily perfected
by mere consent - applicable in this case
o (b) the contract "of carriage" or "of common carriage" itself which should be considered as a real
contract for not until the carrier is actually used can the carrier be said to have already assumed the
obligation of a carrier
o Even if a prepaid ticket advice (PTA) is merely an advice from the sponsors that an airline is authorized
to issue a ticket and thus no ticket was yet issued, the fact remains that the passage had already been paid
for by the principal of the appellee, and the appellant had accepted such payment
o Besides, appellant knew very well that time was of the essence as the prepaid ticket advice had specified
the period of compliance therewith, and with emphasis that it could only be used if the passengers fly on
BA
o involvement of the BA in the contract "to carry" was well demonstrated when the it immediately advised
First Int'l
o Acts of BA indeed constitute malice and evident bad faith which had caused damage and besmirched the
reputation and business image fo First Int'l

Korean Airlines v. CA

Facts:
Juanito Lapuz was contracted for employment in Saudi Arabia through Pan Pacific Recruiting Services, Inc. He was supposed
to leave via Korean Airlines, but was initially listed as a chance passenger. According to Lapuz, he was allowed to check in
and was cleared for departure. When he was on the stairs going to the airplane, a KAL officer pointed at him and shouted,
Down! Down! and he was barred from taking the flight. When he asked for another booking, his ticket was cancelled. He
was unable to report for work and so he lost his employment. KAL alleged that the agent of Pan Pacific was informed that
there are 2 seats possibly available. He gave priority to Perico, while the other seat was won by Lapuz through lottery. But
because only 1 seat became available, it was given to Perico. The trial court adjudged KAL liable for damages. The decision
was affirmed by the Court of Appeals, with modification on the damages awarded.

Issues:

(1) Whether there is already a contract of carriage between KAL and Lapuz to hold KAL liable for breach of contract

(2) Whether moral and exemplary damages should be awarded, and to what extent

Held:

(1) The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the
passenger manifest of KAL for its Flight No. KE 903. His clearance through immigration and customs clearly shows that he
had indeed been confirmed as a passenger of KAL in that flight. KAL thus committed a breach of the contract of carriage
between them when it failed to bring Lapuz to his destination. A contract to transport passengers is different in kind and degree
from any other contractual relation. The business of the carrier is mainly with the traveling public. It invites people to avail
themselves of the comforts and advantages it offers. The contract of air carriage generates a relation attended with a public
duty. Passengers have the right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration.
They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees.
So it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages
against the carrier. The breach of contract was aggravated in this case when, instead of courteously informing Lapuz of his
being a "wait-listed" passenger, a KAL officer rudely shouted "Down! Down!" while pointing at him, thus causing him
embarrassment and public humiliation. The evidence presented by Lapuz shows that he had indeed checked in at the departure
counter, passed through customs and immigration, boarded the shuttle bus and proceeded to the ramp of KAL's aircraft. In
fact, his baggage had already been loaded in KAL's aircraft, to be flown with him to Jeddah. The contract of carriage between
him and KAL had already been perfected when he was summarily and insolently prevented from boarding the aircraft.

(2) The Court of Appeals granted moral and exemplary damages because:

a. The findings of the court a quo that the defendant-appellant has committed breach of contract of carriage in bad faith
and in wanton, disregard of plaintiff-appellant's rights as passenger laid the basis and justification of an award for
moral damages.
b. In the instant case, we find that defendant-appellant Korean Air Lines acted in a wanton, fraudulent, reckless,
oppressive or malevolent manner when it "bumped off" plaintiff-appellant on November 8, 1980, and in addition
treated him rudely and arrogantly as a "patay gutom na contract worker fighting Korean Air Lines," which clearly
shows malice and bad faith, thus entitling plaintiff-appellant to moral damages.
c. Considering that the plaintiff-appellant's entitlement to moral damages has been fully established by oral and
documentary evidence, exemplary damages may be awarded. In fact, exemplary damages may be awarded, even
though not so expressly pleaded in the complaint. By the same token, to provide an example for the public good, an
award of exemplary damages is also proper.

A review of the record of this case shows that the injury suffered by Lapuz is not so serious or extensive as to warrant an award
of P1.5 million. The assessment of P100,000 as moral and exemplary damages in his favor is, in our view, reasonable and
realistic.

Dangwa Transportation vs. CA

FACTS:

May 13, 1985: Theodore M. Lardizabal was driving a passenger bus belonging to Dangwa Transportation Co. Inc.
(Dangwa)
o The bus was at full stop bet. Bunkhouses 53 and 54 when Pedro alighted
Pedro Cudiamat fell from the platform of the bus when it suddenly accelerated forward
Pedro was ran over by the rear right tires of the vehicle
o Theodore first brought his other passengers and cargo to their respective destinations before bringing
Pedro to Lepanto Hospital where he expired

Private respondents filed a complaint for damages against Dangwa for the death of Pedro Cudiamat
o Dangwa: observed and continued to observe the extraordinary diligence required in the operation of the
co. and the supervision of the employees even as they are not absolute insurers of the public at large
 RTC: in favour of Dangwa holding Pedrito as negligent and his negligence was the cause of his death but still
ordered to pay in equity P 10,000 to the heirs of Pedrito
CA: reversed and ordered to pay Pedrito indemnity, moral damages, actual and compensatory damages and cost of
the suit

ISSUE: W/N Dangwa should be held liable for the negligence of its driver Theodore

HELD: YES. CA affirmed.

A public utility once it stops, is in effect making a continuous offer to bus riders (EVEN when moving as long as it
is still slow in motion)
o Duty of the driver: do NOT make acts that would have the effect of increasing peril to a passenger while
he is attempting to board the same
Premature acceleration of the bus in this case = breach of duty
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
o Duty extends to boarding and alighting
GR: By contract of carriage, the carrier assumes the express obligation to transport the passenger to his destination
safely and observe extraordinary diligence with a due regard for all the circumstances, and any injury that might be
suffered by the passenger is right away attributable to the fault or negligence of the carrier
EX: carrier to prove that it has exercised extraordinary diligence as prescribed in Art. 1733 and 1755 of the Civil
Code
Failure to immediately bring Pedrito to the hospital despite his serious condition = patent and incontrovertible
proof of their negligence
o Hospital was in Bunk 56
o 1st proceeded to Bunk 70 to allow a passenger (who later called the family of Pedrito on his own will) to
alight and deliver a refrigerator
In tort, actual damages is based on net earnings

Jesusa Vda. De Nueca vs. Manila Railroad Company

Facts:
- At 3 p.m. on Dec. 22, 1958, Fermin Nueca brought 7 sacks of palay to Manila Railroad Co. (MRC) at its station in
Barrio del Rosario, Camarines Sur, to be shipped to the municipality of Libmanan of the same province.

- He paid P 0.70 as freight charge and was issued Way Bill No. 56515.

- The cargo was loaded on the freight wagon of Train 537. Passengers boarded the train and shunting operations
started to hook a wagon thereto.

- Before the train reached the turnoff switch, its passenger coach fell on its side some 40 m from the station. The
wagon pinned Nueca, killing him instantly.

- Nuecas widow and children bring this claim for damages, alleging that the Nueca was a passenger and his death
was caused by MRCs negligence.

- MRC disclaimed liability stating: (1) it exercised due care in safeguarding the passengers during the shunting
operation, (2) Nueca was not a passenger but a trespasser, (3) even if Nueca were a passenger, he illegally boarded
the train without permission by not paying the fare, (4) the mishap was not attributable to any defect in MRC
equipment, (5) that the accident happened due to force majeur.

- MRC presented evidence showing there was no mechanical defect, but it did not explain why the accident
occurred or show that force majeur caused the mishap.

- The lower court absolved MRC of liability and held that Nueca was a trespasser since he did not buy any ticket,
and in any case, was not in a proper place for passengers.

Issue:
1. W/N Nueca was a passenger?
2. W/N MRC is liable?
3. Was the accident due to MRCs negligence or force majeur?
4. Is Nueca liable for contributory negligence?
Held:
1. No, Nueca was not a passenger thus, MRC did not owe him extraordinary diligence.

A passenger is one who travels in a public conveyance by virtue of a contract, express or implied, with the carrier as to the
payment of the fare, or that which is accepted as an equivalent.
The relation of passenger and carrier commences when one puts himself in the care of the carrier, or directly under its
control, with the bona fide intention of becoming a passenger, and is accepted as such by the carrier as where he makes a
contract for trasportation and presents himself at the proper place and in a proper manner to be transported.
Even disregarding the matter of tickets, and assuming Nueca intended to be a passenger, he was never accepted as such by
MRC as he did not present himself at the proper place and in a proper manner to be transported.
2. Yes, the liability of railroad companies to persons upon the premises is determined by the general rules of
negligence relating to duties of owners/occupiers of property.

While railroad companies are not bound to the same degree of care in regard to strangers who are unlawfully upon the
premises of its passengers, it may still be liable to such strangers for negligent or tortious acts.
Here, Nueca was not on the track, but either unlawfully inside the baggage car or beside the track.
It is normal for people to walk on the track or roadbed when there is no oncoming train and to walk beside the track when a
train passes. This practice is tolerated by MRC. Generally, MRCs stations are not enclosed, and is easily accessible to the
public.
3. MRC is negligent; doctrine of res ipsa loquitur applied.

The train was under the complete control of the railroad company at the time of the accident. The baggage car would not
have been derailed if the train had been properly operated.
Res ipsa loquitur is a rule of evidence peculiar to the law of negligence which recognizes that prima facie negligence may be
established without direct proof and furnishes a substitute for specific proof of negligence.
4. No.
An invitation to stay in the premises is implied from the lack of prohibition to outsiders to keep off the premises, hence, a
stranger who is injured by a derailed train while staying beside a railroad track is not guilty of contributory negligence.
Note: Our law on common carriers is lifted from Anglo-American statutes.

LRTA vs. Navidad et al.

FACTS:

October 14, 1993, 7:30 p.m. : Drunk Nicanor Navidad (Nicanor) entered the EDSA LRT station after purchasing a
token.
o While Nicanor was standing at the platform near the LRT tracks, the guard Junelito Escartin approached
him.
o Due to misunderstanding, they had a fist fight
Nicanor fell on the tracks and killed instantaneously upon being hit by a moving train operated
by Rodolfo Roman
December 8, 1994: The widow of Nicanor, along with her children, filed a complaint for damages against Escartin,
Roman, LRTA, Metro Transit Org. Inc. and Prudent (agency of security guards) for the death of her husband.
o LRTA and Roman filed a counter-claim against Nicanor and a cross-claim against Escartin and Prudent
Prudent: denied liability averred that it had exercised due diligence in the selection and
surpervision of its security guards
LRTA and Roman: presented evidence
Prudent and Escartin: demurrer contending that Navidad had failed to prove that Escartin was
negligent in his assigned task
RTC: In favour of widow and against Prudent and Escartin, complaint against LRT and Roman were dismissed for
lack of merit
CA: reversed by exonerating Prudent and held LRTA and Roman liable

ISSUE: W/N LRTA and Roman should be liable according to the contract of carriage

HELD: NO. Affirmed with Modification: (a) nominal damages is DELETED (CANNOT co-exist w/ compensatory
damages) (b) Roman is absolved.

Law and jurisprudence dictate that a common carrier, both from the nature of its business and for reasons of public
policy, is burdened with the duty off exercising utmost diligence in ensuring the safety of passengers
Civil Code:
 o Art. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances
o Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed
in articles 1733 and 1755
o Art. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence
or wilful acts of the formers employees, although such employees may have acted beyond the scope of
their authority or in violation of the orders of the common carriers

This liability of the common carriers does NOT cease upon proof that they
Exercised all the diligence of a good father of a family in the selection and
supervision of their employees

o Art. 1763. A common carrier is responsible for injuries suffered by a passenger on account of the wilful
acts or negligence of other passengers or of strangers, if the common carriers employees through the
exercise of the diligence of a good father of a family could have prevented or stopped the act or
omission.
Carriers presumed to be at fault or been negligent and by simple proof of injury, the passenger is relieaved of the
duty to still establish the fault or negligence of the carrier or of its employees and the burden shifts upon the carrier
to prove that the injury is due to an unforeseen event or to force majeure
Where it hires its own employees or avail itself of the services of an outsider or an independent firm to undertake
the task, the common carrier is NOT relieved of its responsibilities under the contract of carriage
GR: Prudent can be liable only for tort under Art. 2176 and related provisions in conjunction with Art. 2180 of the
Civil Code. (Tort may arise even under a contract, where tort [quasi-delict liability] is that which breaches the
contract)
o EX: if employers liability is negligence or fault on the part of the employee, employer can be made
liable on the basis of the presumption juris tantum that the employer failed to exercise diligentissimi
patris families in the selection and supervision of its employees.
o EX to the EX: Upon showing due diligence in the selection and supervision of the employee
Factual finding of the CA: NO link bet. Prudent and the death of Nicanor for the reason that the negligence of
Escartin was NOT proven
NO showing that Roman himself is guilty of any culpable act or omission, he must also be absolved from liability
o Contractual tie bet. LRT and Nicanor is NOT itself a juridical relation bet. Nicanor and Roman
Roman can be liable only for his own fault or negligence

Ganzon vs. CA

FACTS: Gelacio > Ganzon (via Capt. Niza) > Lighter Batman (common carrier) (loaded half)

November 28, 1956: Gelacio Tumambing (Gelacio) contracted the services of of Mauro B. Ganzon to haul 305
tons of scrap iron from Mariveles, Bataan, to the port of Manila on board the light LCT Batman
December 1, 1956: Gelacio delivered the scrap iron to Filomeno Niza, captain of the lighter, for loading which
was actually begun on the same date by the crew of the lighter under the captains supervisor.
When about half of the scrap iron was already loaded, Mayor Jose Advincula of Mariveles, Bataan arrived and
demanded P5000 from Gelacio
o Upon resisting, the Mayor fired at Gelacio so he had to be taken to the hospital
o Loading of the scrap iron was resumed
December 4, 1956: Acting Mayor Basilio Rub (Rub), accompanied by 3 policemen, ordered captain Filomeno
Niza and his crew to dump the scrap iron where the lighter was docked
o Later on Rub had taken custody of the scrap iron
RTC: in favor of Gelacio and against Ganzon

ISSUE: W/N Ganzon should be held liable under the contract of carriage

HELD: YES. Petition is DENIED.

Ganzon thru his employees, actually received the scraps is freely admitted.
Pursuant to Art. 1736, such extraordinary responsibility would cease only upon the delivery, actual or constructive,
by the carrier to the consignee, or to the person who has a right to receive them.
 The fact that part of the shipment had not been loaded on board the lighter did not impair the said contract of
transportation as the goods remained in the custody and control of the carrier, albeit still unloaded.
failed to show that the loss of the scraps was due to any of the following causes enumerated in Article 1734 of the
Civil Code, namely:

(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;
(5) Order or act of competent public authority.
Hence, the petitioner is presumed to have been at fault or to have acted negligently.

By reason of this presumption, the court is not even required to make an express finding of fault or negligence
before it could hold the petitioner answerable for the breach of the contract of carriage.
o exempted from any liability had he been able to prove that he observed extraordinary diligence in the
vigilance over the goods in his custody, according to all the circumstances of the case, or that the loss
was due to an unforeseen event or to force majeure. As it was, there was hardly any attempt on the part
of the petitioner to prove that he exercised such extraordinary diligence.
We cannot sustain the theory of caso fortuito - "order or act of competent public authority"(Art. 1174 of the Civil
Code)
o no authority or power of the acting mayor to issue such an order was given in evidence. Neither has it
been shown that the cargo of scrap iron belonged to the Municipality of Mariveles.
Ganzon was not duty bound to obey the illegal order to dump into the sea the scrap iron.
Moreover, there is absence of sufficient proof that the issuance of the same order was attended
with such force or intimidation as to completely overpower the will of the petitioner's
employees. The mere difficulty in the fullfilment of the obligation is not considered force
majeure.

Compania Maritima vs. Insurance Co. of North America

FACTS:

October, 1952: Macleod and Company of the Philippines (Macleod) contracted by telephone the services of the
Compaia Maritima (CM), a shipping corporation, for:
o shipment of 2,645 bales of hemp from the Macleod's Sasa private pier at Davao City to Manila
o subsequent transhipment to Boston, Massachusetts, U.S.A. on board the S.S. Steel Navigator.
This oral contract was later on confirmed by a formal and written booking issued by Macleod's branch office in
Sasa and handcarried to CM's branch office in Davao in compliance with which the CM sent to Macleod's private
wharf LCT Nos. 1023 and 1025 on which the loading of the hemp was completed on October 29, 1952.
o The 2 lighters were manned each by a patron and an assistant patron.
The patrons of both barges issued the corresponding carrier's receipts and that issued by the
patron of Barge No. 1025 reads in part:
Received in behalf of S.S. Bowline Knot in good order and condition from
MACLEOD AND COMPANY OF PHILIPPINES, Sasa Davao, for transhipment at
Manila onto S.S. Steel Navigator.
FINAL DESTINATION: Boston.
Early hours of October 30: LCT No. 1025 sank, resulting in the damage or loss of 1,162 bales of hemp loaded
therein
o Macleod promptly notified the carrier's main office in Manila and its branch in Davao advising it of its
liability
The damaged hemp was brought to Odell Plantation in Madaum, Davao, for cleaning, washing, reconditioning,
and redrying.
o total loss adds up to P60,421.02
All abaca shipments of Macleod were insured with the Insurance Company of North America against all losses
and damages
Macleod filed a claim for the loss it suffered with the insurance company and was paid P64,018.55
o subrogation agreement between Macleod and the insurance company wherein the Macleod assigned its
rights over the insured and damaged cargo
October 28, 1953.: failing to recover from the carrier P60,421.02 (amount supported by receipts), the insurance
company instituted the present action
CA affirmed RTC: ordering CM to pay the insurance co.
ISSUE: W/N there was a contract of carriage bet. CM (carrier) and Macleod (shipper)

HELD: YES. Affirmed

receipt of goods by the carrier has been said to lie at the foundation of the contract to carry and deliver, and if
actually no goods are received there can be no such contract
o The liability and responsibility of the carrier under a contract for the carriage of goods commence on
their actual delivery to, or receipt by, the carrier or an authorized agent. ... and delivery to a lighter in
charge of a vessel for shipment on the vessel, where it is the custom to deliver in that way
o Whenever the control and possession of goods passes to the carrier and nothing remains to be done by
the shipper, then it can be said with certainty that the relation of shipper and carrier has been established
As regards the form of the contract of carriage it can be said that provided that there is a meeting of the minds and
from such meeting arise rights and obligations, there should be no limitations as to form
o The bill of lading is not essential
Even where it is provided by statute that liability commences with the issuance of the bill of lading, actual delivery
and acceptance are sufficient to bind the carrier
marine surveyors, attributes the sinking of LCT No. 1025 to the 'non-water-tight conditions of various buoyancy
compartments

Baliwag Transit Corp. vs. CA

FACTS:

December 17 1984: George, who was a paying passenger on a Baliwag bus (Baliwag) he was thrown off by the
bus driven in a careless and negligent manner by Leonardo Cruz, authorized bus driver, along Barangay Patubig,
Marilao, Bulacan
o suffered multiple serious physical injuries
o confined in the hospital for treatment, incurring medical expenses, which were borne by his
parents, Spouses Sotero Cailipan, Jr. and Zenaida Lopez, in the sum of about P200,000.00 plus other
incidental expenses of about P10,000.00
April 10 1985:
o Baliwag: solely attributable to his own voluntary act in that, without warning and provocation, he
suddenly stood up from his seat and headed for the door of the bus as if in a daze, opened it and jumped
off while said bus was in motion, in spite of the protestations by the driver and without the knowledge of
the conductor
o Baliwag then filed a Third-Party Complaint against Fortune Insurance & Surety Company, Inc., on its
third-party liability insurance in the amount of P50,000.00
Fortune Insurance claimed limited liability, the coverage being subject to a Schedule of
Indemnities forming part of the insurance policy.
November 14 1985 and November 18 1985: Fortune Insurance and Baliwag each filed Motions to Dismiss on the
ground that George, in consideration of the sum of P8,020.50 had executed a notarized "Release of Claims" dated
16 May 1985. - denied as they were filed beyond the time for pleading and after the Answer were already filed so
Baliwag amended its answer to include such
RTC: dismissed the Complaint and Third-party Complaint, ruling that since the contract of carriage is between
Baliwag and George L. Cailipan (of legal age) had the exclusive right to execute the Release of Claims despite the
fact that he is still a student and dependent on his parents for support
October 22 1987: setting aside the appealed Order and holding that the "Release of Claims" cannot operate as a
valid ground for the dismissal of the case because it does not have the conformity of all the parties, particularly
George's parents, who have a substantial interest in the case as they stand to be prejudiced by the judgment
because they spent a sizeable amount for the medical bills of their son
Baliwag filed Petition for Review on certiorari

ISSUE: W/N the contract signed by George during case pendency is valid discharging Fortune Insurance and Baliwag from
any and all liability

HELD: YES. CA SET ASIDE

George is of legal age, a graduating student of Agricultural Engineering, and had the capacity to do acts with legal
effect (Article 37 in relation to Article 402, Civil Code)
o could sue and be sued even without the assistance of his parents
George had the right to be safely brought to his destination and Baliwag had the correlative obligation to do so
Since a contract may be violated only by the parties thereto, as against each other, in an action upon that contract,
the real parties in interest, either as plaintiff or as defendant, must be parties to said contract:
 o real party-in-interest -plaintiff - who has a legal right
o real party-in-interest-defendant - who has a correlative legal obligation whose act or omission violates
the legal right of the former
In the absence of any contract of carriage between Baliwag and George's parents, the latter are not real parties-in-
interest in an action for breach of that contract
general rule of the common law is that every action must be brought in the name of the party whose legal right has
been invaded or infringed
The phraseology "any and all claims or causes of action" is broad enough to include all damages that may accrue
to the injured party arising from the unfortunate accident.
o The Release of Claims had the effect of a compromise agreement since it was entered into for the
purpose of making a full and final compromise adjustment and settlement of the cause of action
involved.
o compromise - contract whereby the parties, by making reciprocal concessions, avoid a litigation or put
an end to one already commenced (Article 2028, Civil Code).

Everett Steamship Corp. vs. CA

FACTS
Hernandez trading company imported three crates of bus spare parts marked as Marco 12, Marco 13, Marco 14 from its
supplier Maruman trading company.

Said crates were shipped from Japan to Manila on noard the vessel owned by Everette Orient Lines. Upon arrival in Manila,
it was discovered that Marco 14 was missing.

Hernandez makes a formal claim to Everette in an amount of 1 mill ++ Yen, which is the amount of the cargo lost.
However, Everett offers an amount of 100k because it is the amount that was stipulated in its Bill of Lading.

Hernandez files a case at the RTC of Caloocan, RTC rules1 in favor of Hernandez holding Everett liable for the amount of
!mill ++ Yen.
THE CA affirmed the RTCs ruling and made an additional observation that since Hernandez is not a privy to the contract in
the bill of lading ( the contract was entered by Everett and Maruman trading [shipper]), and so the 100k limit stipulated will
not bind Hernandez making Everett liable for the full amount of 1mill ++ Yen.

ISSUE

1. Is Everett liable for the full amount or the amount that was stipulated in the contract?- what was stipulated in the
contract
2. Is Hernandez a privy to the contract which says that Petitioner is liable only for 100k? Yes

RULING

1. Controlling provisions for this issue would be 1749 and 1750 of the Civil Code. 2

In Sea Land Service, Inc. vs Intermediate Appellate Court

1 Art. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss,

destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances,
and has been fairly and freely agreed upon.
It is required, however, that the contract must be reasonable and just under the circumstances and has been fairly and
freely agreed upon.XXX
the Court is of the view that the requirements of said article have not been met. The fact that those conditions are printed
at the back of the bill of lading in letters so small that they are hard to read would not warrant the presumption that the
plaintiff or its supplier was aware of these conditions such that he had fairly and freely agreed to these conditions. It can
not be said that the plaintiff had actually entered into a contract with the defendant, embodying the conditions as printed
at the back of the bill of lading that was issued by the defendant to plaintiff.
2 ART. 1749. A stipulation that the common carriers liability is limited to the value of the goods appearing

in the bill of lading, unless the shipper or owner declares a greater value, is binding.
ART. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been
freely and fairly agreed upon.
That said stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to
liability only if a greater value is not declared for the shipment in the bill of lading. To hold otherwise would amount to
questioning the justness and fairness of the law itself, and this the private respondent does not pretend to do. But over and
above that consideration, the just and reasonable character of such stipulation is implicit in it giving the shipper or owner the
option of avoiding accrual of liability limitation by the simple and surely far from onerous expedient of declaring the nature
and value of the shipment in the bill of lading

The clause of the contract goes:

The carrier shall not be liable for any loss of or any damage to or in any connection with, goods in an amount
exceeding One Hundred Thousand Yen in Japanese Currency (Y100,000.00) or its equivalent in any other currency
per package or customary freight unit (whichever is least) unless the value of the goods higher than this amount is
declared in writing by the shipper before receipt of the goods by the carrier and inserted in the Bill of Lading and
extra freight is paid as required. (Emphasis supplied)

The shipper, Maruman Trading, had the option to declare a higher valuation if the value of its cargo was higher than the
limited liability of the carrier. Considering that the shipper did not declare a higher valuation, it had itself to blame
for not complying with the stipulations.

The trial courts ratiocination that private respondent could not have fairly and freely agreed to the limited liability
clause in the bill of lading because the said conditions were printed in small letters does not make the bill of lading invalid.
In Ong Yiu VS. CA the court said that

contracts of adhesion wherein one party imposes a ready-made form of

contract on the other, as the plane ticket in the case at bar, are contracts
not entirely prohibited

A contract limiting liability upon an agreed valuation does not offend

against the policy of the law forbidding one from contracting against his
own negligence

The shipper, Maruman Trading, we assume, has been extensively engaged in the trading business. It can not be said to be
ignorant of the business transactions it entered into involving the shipment of its goods to its customers. The shipper could
not have known, or should know the stipulations in the bill of lading and there it should have declared a higher valuation of
the goods shipped. Moreover, Maruman Trading has not been heard to complain that it has been deceived or rushed into
agreeing to ship the cargo in petitioners vessel.

2. Even if the consignee was not a signatory to the contract of carriage between the shipper and the carrier.

The consignee can still be bound by the contract. private respondent (Hernandez) formally claimed reimbursement for
the missing goods from petitioner and subsequently filed a case against the latter based on the very same bill of lading, it
(private respondent) accepted the provisions of the contract and thereby made itself a party thereto, or at least has come
to court to enforce it. Thus, private respondent cannot now reject or disregard the carriers limited liability stipulation in
the bill of lading. In other words, private respondent is bound by the whole stipulations in the bill of lading and must
respect the same.

Sulpicio vs. Ca

FACTS:

October 23, 1988: Tito Duran Tabuquilde (Tito) and his 3-year old daughter Jennifer Anne (Anne) boarded the
M/V Dona Marilyn at North Harbor, Manila, bringing with them several pieces of luggage.
o Storm Signal No. 2 had been raised by the PAG-ASA authorities over Leyte as early as 5:30 P.M. of
October 23, 1988 and which signal was raised to Signal No. 3 by 10 P.M
o ship captain ordered the vessel to proceed to Tacloban when prudence dictated that he should have taken
it to the nearest port for shelter, thus violating his duty to exercise extraordinary diligence in the carrying
of passengers safely to their destination
October 24, 1988 morning: M/V Dona Marilyn, while in transit, encountered inclement weather which caused
huge waves due to Typhoon Unsang.
o Angelina Tabuquilde contacted the Sulpicio Office to verify radio reports that the vessel M/V Dona
Marilyn was missing
Sulpicio Lines assured her that the ship was merely "hiding" thereby assuaging her anxiety
October 24, 1988 2:00 P.M.: vessel capsized, throwing Tito and Anne, along with hundreds of passengers, into the
sea.
o Tito tried to keep himself and his daughter afloat but to no avail as the waves got stronger and he was
subsequently separated from his daughter despite his efforts.
October 25, 1988 11:00 A.M.: He found himself on Almagro Island in Samar
 o He immediately searched for his daughter among the survivors in the island, but failed
o Angelina tried to seek the assistance of the Sulpicio Lines in Manila to no avail
o Angelina spent sleepless nights worrying about her husband and daughter in view of the refusal of
Sulpicio Lines to release a verification of the sinking of the ship
October 26, 1988: Tito and other survivors in the Almagro Island were fetched and were brought to Tacloban
Medical Center for treatment
October 31, 1988: Tito reported the loss of his daughter and was informed that the corpse of a child with his
daughter's description had been found
o Tito wrote a letter to his wife, reporting the sad fact that Jennifer Anne was dead
o Angelina suffered from shock and severe grief upon receipt of the news
November 3, 1988: coffin bearing the corpse of Anne was buried
November 24, 1988: Tito filed a claim for damages against Sulpicio Lines for the death of Anne and the loss of his
belongings worth P27,580
Trial Court: in favor of Tito
o actual damages, P30,000.00 for the death of Anne
o P100,000.00 as moral damages
o P50,000.00 as exemplary damages
o P50,000.00 as attorney's fees, and costs

ISSUE: W/N Tito has a right to recover damage for his lost belongings

HELD: NO. Court of Appeals is AFFIRMED with the MODIFICATION that the award of P27,580.00 as actual damages
for the loss of the contents of the pieces of baggage is deleted and that the award of P30,000.00 under Article 2206 in
relation Article 1764 is increased to P50,000.00.

There is no showing that the value of the contents of the lost pieces of baggage was based on the bill of lading or
was previously declared by Tito before he boarded the ship
Article 2206 of the Civil Code of the Philippines:

only deaths caused by a crime as quasi delict are entitled to actual and compensatory damages without the need of proof of
the said damages
The amount of damages for death caused by a crime or quasi delict shall be at least Three Thousand Pesos, even though
there may have been mitigating circumstances. . . .

o Deducing alone from said provision, one can conclude that damages arising from culpa contractual are
not compensable without proof of special damages sustained by the heirs of the victim.
o With respect to the award of moral damages, the general rule is that said damages are not recoverable
in culpa contractual except when the presence of bad faith was proven
o in breach of contract of carriage, moral damages may be recovered when it results in the death of a
passenger
o With respect to the award of exemplary damages, Article 2232 of the Civil Code of the Philippines gives
the Court the discretion to grant said damages in breach of contract when the defendant acted in a
wanton, fraudulent and reckless manner
The crew assumed a greater risk when, instead of dropping anchor in or at the periphery of the Port of Calapan, or
returning to the port of Manila which is nearer, proceeded on its voyage on the assumption that it will be able to
beat and race with the typhoon and reach its destination before it (Unsang) passes

PAL vs. CA

December 1950, he complained toPAL through its authorized official about the slow reaction and poor judgment
of Captain Bustamante. Notwithstanding said complaint, defendant allowed the pilot to continue flying.
January 8, 1951: Jesus V. Samson flew as co-pilot on a regular flight from Manila to Legaspi with stops at Daet,
Camarines Norte and Camarines Sur, with Captain Bustamante as commanding pilot of a PAL C-47 plane
o on attempting to land the plane at Daet airport, Captain Bustamante due to his very slow reaction and
poor judgment overshot the airfield and as a result, notwithstanding the diligent efforts of the Samson to
avert an accident, the airplane crashlanded beyond the runway; that the jolt caused the head of the
plaintiff to hit and break through the thick front windshield of the airplane causing him severe brain
concussion, wounds and abrasions on the forehead with intense pain
instead of expert and proper medical treatment called for by the nature and severity of his
injuries, PAL simply referred him to a company physician, a general medical practitioner, who
limited the treatment to the exterior injuries without examining the severe brain concussion
 several days after the accident, PAL called back the Samson to active duty as co-pilot, and was never given
any examination
o he had been having periodic dizzy spells and had been suffering from general debility and nervousness
December 21, 1953: he was discharged due to his physical disabilityCFI: PAL to pay the Samson
o P1988,000.00 as unearned income or damages
o P50,000.00 for moral damages
o P20,000.00 as attorneys fees
o P5,000.00 as expenses of litigation
CA: modified entitled to the legal rate of interest n unearned income

ISSUE: W/N PAL was negligent and was liable

HELD: YES. affirmed with slight modification in that the correct amount of compensatory damages is P204,000.00

Even the doctors presented by PAL admit vital facts about the brain injury. Dr. Bernardo and Dr. Reyes admits
that due to the incident, the plaintiff continuously complained of his fainting spells, dizziness and headache
everytime he flew as a co-pilot and everytime he went to the clinic no less than 25 times
We also find the imputation of gross negligence by respondent court to PAL for having allowed Capt. Delfin
Bustamante to fly on that fateful day of the accident on January 8, 1951 to be correct
o Bustamante was sick. He admittedly had tumor of the nasopharynx (nose)
The fact that the complaint was not in writing does not detract anything from the seriousness thereof, considering
that a miscalculation would not only cause the death of the crew but also of the passengers.
One month prior to the crash-landing, when the pilot was preparing to land in Daet, plaintiff warned him that they
were not in the vicinity of Daet but above the town of Ligao. The plane hit outside the airstrip. In another instance,
the pilot would hit the Mayon Volcano had not Samson warned him.
At least, the law presumes the employer negligent imposing upon it the burden of proving that it exercised the
diligence of a good father of a family in the supervision of its employees.
PAL would want to tie Samson to the report he signed about the crash-landing. The report was prepared by his
pilot and because the latter pleaded that he had a family too and would have nowhere to go if he lost his job,
Samsons compassion would not upturn the truth about the crash-landing

Art. 1733. 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 the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in Articles 1734, and 1745, Nos. 5, 6, and
7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.
Art. 1755. A common carrier is bound to carry the passenger safely as far as human care and foresight can provide, using the
utmost diligence of very cautious persons, with a due regard for all the circumstances.
Art. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as prescribed in Articles 1733 and 1755.

Article 2205 of the New Civil Code of the Philippines damages may be recovered for loss or impairment of earning
capacity in cases of temporary or permanent personal injury."

Art. 1711. Owners of enterprises and other employers are obliged to pay compensation for the death or injuries to their
laborers, workmen, mechanics or other employees, even though the event may have been purely accidental or entirely due to
a fortuitous cause, if the death or personal injury arose out of and in the course of the employment. The employer is also
liable for compensation if the employee contracts any illness or disease caused by such employment or as the result of the
nature of the employment. If the mishap was due to the employees own notorious negligence, or voluntary act, or
drunkenness, the employer shall not be liable for compensation. When the employees lack of due care contributed to his
death or injury, the compensation shall be equitably reduced.
Art. 1712. If the death or injury is due to the negligence of a fellow-worker, the latter and the employer shall be solidarily
liable for compensation. If a fellow-workers intentional or malicious act is the only cause of the death or injury, the
employer shall not be answerable, unless it should be shown that the latter did not exercise due diligence in the selection or
supervision of the plaintiffs fellow-worker.
Articles 1169, 2209 and 2212 of the Civil Code govern when interest shall be computed.

The correct amount of compensatory damages upon which legal interest shall accrue from the filing of the
complaint is P204,000.00 as herein computed and not P198,000.00
Delgado Brothers vs. Home Insurance

FACTS:

February 17, 1955: Victor Bijou & Co. shipped at New York for Manila aboard the vessel S.S. Leoville and
consigned to the Judy Philippines, Inc. of Manila, a shipment of 1 case Linen Handkerchiefs and 2 cases cotton
piece goods, for which, the New York agent of said vessel, the Barber Steamship Lines, Inc., issued Bill of Lading
No. 119
o shipment as insured with Home Insurance, Inc. by the shipper and/or consignee
March 30, 1955: vessel arrived at the Port of Manila and delivered 1 case of Linen
Handkerchiefs in bad order, with a shortage of 503 yards of Linen Print Handkerchiefs, to the
prejudice, loss and damage of shipper and or consignee in the sum of P1,287.20 so they filed a
claim against Home Insurance Inc.
March 7, 1956: Home Insurance Inc. filed against contractor Delgado Brothers Inc.
Trial Court: dismissed the case in favor of Home based on its special defenses invoked in its answer
o since no claim was filed within the 15-day period from the date of the arrival of the goods before they
could file a suit in the court of proper jurisdiction within 1 year from the date of said arrival at the Port of
Manila, it is completely relieved and released of any and all liability for loss or damage under the law
and in accordance with the pertinent provisions of the management Contract with the Bureau of
Customs, covering the operation of the Arrastre Service for the Port of Manila; and that petitioner in no
way acts as an agent of the carrying vessel or of the importer or consignee
CA: reversed because of lack of jurisdiction it being a maritime contract should be handled by the Municipal Court

ISSUE: W/N the case has prescribed according to maritime law (arrastre being a maritime case)

HELD: NO.

In case of controversy involving both maritime and nonmaritime subject matter, where the principal matter
involved belongs to the jurisdiction of a court of common law or of equity, admiralty will not take cognizance of
incidental maritime matters connected therewith but will relegate the whole controversy to the appropriate tribunal
Both as to the nature of the functions and the place of their performance (upon wharves and piers shipside),
Brother's services are clearly not maritime but arrastre services
o they are no different from those of a depositary or warehouseman
To give admiralty jurisdiction over a contract as maritime, such contract must relate to the trade and business of
the sea; it must be essentially and fully maritime in its character; it must provide for maritime services, maritime
transactions, or maritime casualties.
Delgado Brothers, Inc. has nothing to do with the loading or unloading of cargoes to and from the ships. Its
operation on and its responsibility for the merchandise and goods begins from the time they are placed upon the
wharves or piers or delivered along sides of ships
Court of First Instance of Manila has jurisdiction in cases where suit is brought directly against the carrier or
shipowner.

Respondent cannot invoke the rule against multiplicity of suits, for the simple reason that said rule has to be
subservient to the superior requirement that the court must have jurisdiction

Mayer Steel Pipe vs. Ca

FACTS:

1983: Hongkong Government Supplies Department (Hongkong) contracted Mayer Steel Pipe Corporation (Mayer)
to manufacture and supply various steel pipes and fittings
August to October, 1983: Mayer shipped the pipes and fittings to Hongkong as evidenced by Invoice Nos. MSPC-
1014, MSPC-1015, MSPC-1025, MSPC-1020, MSPC-1017 and MSPC-1022
Prior to the shipping, Mayer insured the pipes and fittings against all risks with South Sea Surety and Insurance
Co., Inc. (South Sea) and Charter Insurance Corp. (Charter)
o South Sea:Invoice Nos. MSPC-1014, 1015 and 1025 for US$212,772.09
o Charter: Invoice Nos. 1020, 1017 and 1022 for US$149,470.00
Mayer and Hongkong jointly appointed Industrial Inspection (International) Inc. as third-party inspector to
examine whether the pipes and fittings are manufactured in accordance with the specifications in the contract
o Industrial Inspection certified all the pipes and fittings to be in good order condition before they were
loaded in the vessel
o When the goods reached Hongkong, it was discovered that a substantial portion thereof was damaged
 Mayer and Hongkong a claim against private respondents for indemnity under the insurance contract
o Charter paid petitioner Hongkong the amount of HK$64,904.75
o demanded payment of the balance of HK$299,345.30 which was refused
April 17, 1986: filed an action to recover HK$299,345.30
o Defense: insurance surveyor's report allegedly showed that the damage is a factory defect
Trial Court: in favor of Mayer and Hongkong
CA: reversed
o affirmed the finding of the trial court that the damage is not due to factory defect and that it was covered
by the "all risks" insurance policies
o BUT held that Section 3(6) of the Carriage of Goods by Sea Act provides that "the carrier and the ship
shall be discharged from all liability in respect of loss or damage unless suit is brought within one year
after delivery of the goods or the date when the goods should have been delivered
o applies not only to the carrier but also to the insurer

ISSUE: W/N Section 3(6) of the Carriage of Goods by Sea also applies to insurer

HELD: NO. Petition is granted. CA reversed. RTC reinstated

Section 3(6) of the Carriage of Goods by Sea Act states that the carrier and the ship shall be discharged from all
liability for loss or damage to the goods if no suit is filed within one year after delivery of the goods or the date
when they should have been delivered. Under this provision, only the carrier's liability is extinguished if no suit is
brought within one year. But the liability of the insurer is not extinguished because the insurer's liability is based
not on the contract of carriage but on the contract of insurance - governed by the Insurance Code
An insurance contract is a contract whereby one party, for a consideration known as the premium, agrees to
indemnify another for loss or damage which he may suffer from a specified peril
o "all risks" insurance policy covers all kinds of loss other than those due to willful and fraudulent act of
the insured
o prescribes in ten years, in accordance with Article 1144 of the New Civil Code