Contract of carriage of cargo

National Development Corporation v. Court of Appeals

G.R. No. L-49407, 19 August 1988, 164 SCRA 593

FACTS:

NDC as the first preferred mortgagee of three ocean going vessels including one with the name ‘Dona Nati’ appointed
MCP as its agent to manage and operate said vessel for and in its behalf and account. Thus, the E. Philipp Corporation
of New York loaded on board the vessel “Dona Nati” at San Francisco, California, a total of 1,200 bales of American
raw cotton consigned to the order of Manila Banking Corporation, Manila and the People’s Bank and Trust Company
acting for and in behalf of the Pan Asiatic Commercial Company, Inc., who represents Riverside Mills Corporation.
Also loaded on the same vessel at Tokyo, Japan, were the cargo of Kyokuto Boekui, Kaisa, Ltd., consigned to the
order of Manila Banking Corporation consisting of 200 cartons of sodium lauryl sulfate and 10 cases of aluminum foil.

En route to Manila the vessel Dofia Nati figured in a collision at Ise Bay, Japan with a Japanese vessel ‘SS Yasushima
Maru’ as a result of which 550 bales of aforesaid cargo of American raw cotton were lost and/or destroyed. The
damaged and lost cargoes were paid by the insurer to the Riverside Mills Corporation as holder of the negotiable bills
of lading duly endorsed.

Also considered totally lost were the aforesaid shipment of Kyokuto, Boekui Kaisa Ltd., consigned to the order of
Manila Banking Corporation, Manila, acting for Guilcon, Manila. The total loss was paid by the insurer to Guilcon as
holder of the duly endorsed bill of lading. Hence, plaintiff filed this complaint to recover said amount from the NDC
and MCP as owner and ship agent respectively, of the said ‘Dofia Nati’ vessel.

ISSUE:

Which laws govern loss or destruction of goods due to collision of vessels outside Philippine waters?

HELD:

This issue has already been laid to rest by this Court in Eastern Shipping Lines Inc. v. IAC where it was held under
similar circumstance “that the law of the country to which the goods are to be transported governs the liability of the
common carrier in case of their loss, destruction or deterioration” (Article 1753, Civil Code). Thus, the rule was
specifically laid down that for cargoes transported from Japan to the Philippines, the liability of the carrier is governed
primarily by the Civil Code and in all matters not regulated by said Code, the rights and obligations of common carrier
shall be governed by the Code of commerce and by laws (Article 1766, Civil Code). Hence, the Carriage of Goods by
Sea Act, a special law, is merely suppletory to the provision of the Civil Code.

It is immaterial that the collision actually occurred in foreign waters, such as Ise Bay, Japan. It appears, however, that
collision falls among matters not specifically regulated by the Civil Code, so that no reversible error can be found in
respondent courses application to the case at bar of Articles 826 to 839, Book Three of the Code of Commerce, which
deal exclusively with collision of vessels.
Eastern Shipping Lines Inc. VS IAC Case Digest
Eastern Shipping Lines Inc. VS. Intermediate Appellate Court
(150 SCRA 463)

Facts: Sometime in or prior to June 1977, the M/S Asiatica, a vessel operated by petitioner Eastern Shipping Lines Inc.,
loaded at Kobe, Japan for transportation to Manila loaded 5,000 pieces of calorized pipes valued at P256,039.00 which was
consigned to Philippine Blooming Mills Co, Inc. and 7 cases of spare parts valued at P92, 361.75 consigned to Central
Textile Mills. Both sets of goods were inured against marine risk for their stated value with respondent Development
Insurance and Surety Corp.

In the same vessel, 2 containers of garment fabrics were also loaded which was consigned to Mariveles Apparel Corp worth
$46,583. The said cargoes were consigned to Nisshin Fire and Marine Insurance. Another cargo loaded to the vessel was
the surveying instruments consigned to Aman Enterprises and General Merchandise and insured against respondent Dowa
Fire & Marine Insurance for $1,385.00.

On the way to Manila, M/S Asiatica caught fire and sank. This resulted to the loss of the ship and its cargoes. The respective
Insurers paid the corresponding marine insurance values and were thus subrogated to the rights of the insured.

The insurers filed a suit against the petitioner carrier for recovery of the amounts paid to the insured. However, petitioner
contends that it is not liable on the ground that the loss was due to an extraordinary fortuitous event.

Issue: Whether the Civil Code provisions on Common Carriers or the Carriage of the Goods by Sea Act will govern the
case at bar?

Held: The law of the country to which the goods are to be transported governs the liability of common carrier in case of their
loss, destruction or deterioration. The liability of petitioner is governed primarily by the Civil Code however, in all matters
not regulated by the Civil Code, the Code of Commerce and Special Laws will govern with respect to the rights and
obligations of the carrier. Therefore COGSA is suppletory to the provisions of the Civil Code.
 Santos III vs. Northwest Orient Airlines

G.R. No. 101538, June 23, 1992

o INTERNATIONAL LAW: Warsaw Convention is constitutional, a treaty commitment voluntarily assumed by the
Philippine government and, as such, has the force and effect of law in this country.
o INTERNATIONAL LAW: Warsaw Convention, when applicable: To all "international transportations of persons by
aircraft for hire." Whether the transportation is "international" is determined by the contract of the parties, which in the
case of passengers is the ticket. When the contract of carriage provides for the transportation of the passenger between
certain designated terminals "within the territories of two High Contracting Parties," the provisions of the Convention
automatically apply and exclusively govern the rights and liabilities of the airline and its passenger.
o INTERNATIONAL LAW: Warsaw Convention, jurisdiction: Place of Destination vis-a-vis Agreed Stopping Place: The
contract is a single undivided operation, beginning with the place of departure and ending with the ultimate destination.
The use of the singular in this expression indicates the understanding of the parties to the Convention that every contract
of carriage has one place of departure and one place of destination. An intermediate place where the carriage may be
broken is not regarded as a "place of destination."

FACTS:

Petitioner is a minor and a resident of the Philippines. Private respondent Nortwest Orient Airlines (NOA) is a foreign
corporation with principal office in Minnesota, U.S.A. and licensed to do business and maintain a branch office in the
Philippines. The petitioner purchased from NOA a round-trip ticket in San Francisco, U.S.A. In December 19, 1986, the
petitioner checked in the at the NOA counter in the San Francisco airport for his departure to Manila. Despite a previous
confirmation and re-confirmation, he was informed that he had no reservation for his flight for Tokyo to Manila. He
therefore had to be wait-listed. On March 12, 1987, the petitioner sued NOA for damages in RTC Makati. NOA moved to
dismiss the complaint on the ground of lack of jurisdiction.

ISSUE:

o Whether or not Article 28 (1) of the Warsaw Convention is in accordance with the constitution so as to deprive
the Philippine Courts jurisdiction over the case

HELD:

Art. 28. (1) An action for damage 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.

Constitutionality of the Warsaw Convention

The Republic of the Philippines is a party to the Convention for the Unification of Certain Rules Relating to International
Transportation by Air, otherwise known as the Warsaw Convention. It took effect on February 13, 1933. The Convention
was concurred in by the Senate, through its Resolution No. 19, on May 16, 1950. The Philippine instrument of accession
was signed by President Elpidio Quirino on October 13, 1950, and was deposited with the Polish government on
November 9, 1950. The Convention became applicable to the Philippines on February 9, 1951. On September 23, 1955,
President Ramon Magsaysay issued Proclamation No. 201, declaring our 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."

The Convention is thus a treaty commitment voluntarily assumed by the Philippine government and, as such, has the
force and effect of law in this country.

Does the Warsaw Convention apply in this case?

By its own terms, the Convention applies to all international transportation of persons performed by aircraft for hire.

International transportation is defined in paragraph (2) of Article 1 as follows:

(2) For the purposes of this convention, the expression "international transportation" shall mean any transportation in
which, 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 . . .

Whether the transportation is "international" is determined by the contract of the parties, which in the case of passengers
is the ticket. When the contract of carriage provides for the transportation of the passenger between certain designated
terminals "within the territories of two High Contracting Parties," the provisions of the Convention automatically apply and
exclusively govern the rights and liabilities of the airline and its passenger.

Since the flight involved in the case at bar is international, the same being from the United States to the Philippines and
back to the United States, it is subject to the provisions of the Warsaw Convention, including Article 28(1), which
enumerates the four places where an action for damages may be brought.

Does Article 28(1) refer to Jurisdiction or Venue?

...where the matter is governed by the Warsaw Convention, jurisdiction takes on a dual concept. Jurisdiction in the
international sense must be established in accordance with Article 28(1) of the Warsaw Convention, following which the
jurisdiction of a particular court must be established pursuant to the applicable domestic law. Only after the question of
which court has jurisdiction is determined will the issue of venue be taken up. This second question shall be governed by
the law of the court to which the case is submitted.

Was the case properly filed in the Philippines, since the plaintiff’s destination was Manila?

The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract of
carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioner's ticket
shows that his ultimate destination is San Francisco. Although the date of the return flight was left open, the contract of
carriage between the parties indicates that NOA was bound to transport the petitioner to San Francisco from Manila.
Manila should therefore be considered merely an agreed stopping place and not the destination.

Article 1(2) also draws a distinction between a "destination" and an "agreed stopping place." It is the "destination" and not
an "agreed stopping place" that controls for purposes of ascertaining jurisdiction under the Convention.

The contract is a single undivided operation, beginning with the place of departure and ending with the ultimate
destination. The use of the singular in this expression indicates the understanding of the parties to the Convention that
every contract of carriage has one place of departure and one place of destination. An intermediate place where the
carriage may be broken is not regarded as a "place of destination."

WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so ordered.