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I. General Considerations A. Public Utilities 1. Article XII, 1987 Constitution Art. XII, Section 11. No franchise, certificate or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least 60% of whose capital is owned by such citizens, nor shall such franchise, certificate or authorization be exclusive in character or for a longer period than fifty years. Neither shall any franchise or right be granted except under the condition that it shall be subject to amendment, alteration or repeal by the Congress when the common good so requires. The State shall encourage equity participation in public utilities by the general public. The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. Section 17. In times of national emergency, when the public interest so requires, the State may, during the emergency and under reasonable terms prescribed by it, temporarily take over or direct the operation of any privately owned public utility or business affected with public interest. Section 18. The State may, in the interest of national welfare or defense, establish and operate vital industries and, upon payment of just compensation, transfer to public ownership utilities and other private enterprises to be operated by the Government. Section 19. The State shall regulate or prohibit monopolies when the public interest so requires. No combinations in restraint of trade or unfair competition shall be allowed. (a) What is a public utility? A public utility is a business or service engaged in regularly supplying the public with some commodity or service of public consequence such as electricity, gas, water, transportation, telephone or telegraph service. Apart from statutes which define the public utilities that are within the purview of such statutes, it would be difficult to construct a definition of a public utility which would fit every conceivable case. As its name indicates, however, the term public utility implies a public use and service to the public. (Am. Jur. 2d V. 64, p.549.) (Albano vs Reyes) (b) What is a public service? The Public Service Act (CA No. 146 as amended) provides that the term public service "includes every person that now or hereafter may own, operate, manage, or control in the Philippines, for hire or compensation, with general or limited clientele, whether permanent, occasional or accidental, and
done for general business purposes, any common carrier, railroad, street railway, traction railway, subway motor vehicle, either for freight or passenger, or both with or without fixed route and whatever may be its classification, freight or carrier service or any class, express service, steamboat, or steamship line, pontines, ferries, and water craft, engaged in the transportation of passengers and freight or both, shipyard, marine repairshop, [warehouse], wharf or dock, ice plant, ice refrigeration plant, canal, irrigation system, gas, electric light, heat and power, water supply and power, petroleum, sewerage system, wire or wireless communications system, wire or wireless broadcasting stations and other similar public services..." [Sec. 13(b)] (Albano vs Reyes) Albano vs Reyes 175 SCRA 264 F: On 20 April 1987, the Phil. Ports Authority (PPA) adopted a resolution directing mgmt. to prepare the Invitation to Bid and all relevant bidding documents necessary for the public bidding of the development, mgmt., and operation of the Manila Intl. Container Terminal (MICT) and authorized the Board Chairman Secretary Reyes to oversee and implement the project. Secretary Reyes created a 7-man MICT Bidding Committee to evaluate all bids and recommend to the Board the best bid. The PPA published the Invitation to Bid with the reservation that it had the right to reject any bid and to accept such bid it may deem advantageous to the govt. Seven companies submitted bids. The Committee recommended that the contract be awarded to Intl. Container Terminal Services (ICTSI) on the ground that it offered the best technical and financial proposal. Secretary Reyes awarded the contract to ICTSI. Before the contract could be signed, two cases were filed questioning the legality or regularity of the bidding. The first was a special action for prohibition with prelim injunction filed by Alo, a concerned taxpayer. The second was a civil case for prohibition with prayer for TRO filed by Sharp Co. which actively participated in the bidding. The President approved the proposed MICT contract. The PPA and ICTFSI perfected the contract. Rodolfo Albano, a member of the House of Representatives filed the present case assailing the award of the contract on the ground that since the MICT is a public utility, it needs a legislative franchise before it can legally operate as a public utility. Issue : WON a legislative franchise is necessary. Held : NO. Petition dismissed. A franchise specially granted by Congress is not necessary for the operation of the MICT by a private entity. A contract entered into by the PPA and such entity is substantial compliance with the law. 1. Executive Order No. 30 authorized the PPA to take over, manage and operate the MICT in accordance with PD 857 (Revised Charter of the PPA). PD 857 expressly empowers the PPA to provide services within Port Districts "whether on its own, by contract or otherwise." Therefore, under EO 30 and PD 857, the PPA may contract with ICTSI for the mgmt., operation and devt. of the MICT. 2. Even if the MICT be considered a public utility or a public service on the theory that it is a wharf or a dock as contemplated by the Public Service Act, its operation would not necessarily call for a legislative franchise. Legislative franchises are not required before each and every public utility may operate. The law has granted certain administrative agencies the power to grant licenses for or to authorize the operation of certain public utilities. That the Consti provides that the issuance of a franchise for the operation of a public utility shall be subject to amendment, alteration or repeal by
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Held : NO. Decision of PSC is revoked. An autobus line is a public utility, and as such, is a common carrier and an impt. factor in the business affairs of the community. The PSC has the power to specify and define the terms and conditions upon which any public utility shall operate and to make reasonable rules and regulations for its operation, and to fix the compensation that it shall receive for its service to the public, and for good cause may suspend or even revoke a license granted. It is not the policy of the law for the PSC to issue a CPC to a second operator to cover the same field and in competition with a first operator who is rendering sufficient, adequate and satisfactory service, and who in all things and respects is complying with the rules and regulations of the PSC. The power of the PSC to issue a CPC is founded on the condition precedent that after a full hearing and investigation, it shall find as a fact that the proposed operation is for the convenience of the public. So long as the first operator keeps and performs his terms and conditions of its license and complies with the reasonable demands of the public, it has more or less of a vested and preferential right over another who seeks to acquire a later license to operate over the same route. To carry out the purpose and intent for which the PSC was created, the law contemplates that the first license will be protected in his investment and will not be subjected to ruinous competition. The primary purpose of the PSC is to secure adequate, sustained service for the public at the least possible cost and to protect and conserve investments which have already been made for that purpose. A CPCN for the operation of an auto truck line in occupied territory should not be granted where there is no complaint as to existing rates and the co. in the field is rendering adequate service. It is the duty of the PSC to protect rather than to destroy the investment of a public utility. The policy of regulation upon which the present public utility commission plan is based and which tends to do away with competition among public utilities as they are natural monopolies, is at once the reason that the regulation of an existing system of transportation, which is properly serving a given field, or may be required to do so, is to be preferred to competition among several independent systems. While requiring a proper service from a single system for a territory in consideration for protecting it as a monopoly for all the service required and in conserving its resources, no economic waste results and service may be furnished at a minimum cost. Carmelo vs Monserrat 55 Phil 644 F: Monserrat twice applied to Congress for an exclusive franchise to operate a taxicab service in Manila. The Governor General twice vetoed the bill. Monserrat then applied to the PSC for a CPC. It was granted.
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Eastern Shipping Lines vs IAC 150 SCRA 463 F: These two cases, both for the recovery of value of cargo insurance, arose from the same incident, the sinking of the M/S ASIATICA when it caught fire, resulting in the total loss of ship and cargo. In the first case, the M/S ASIATICA, a vessel operated by petitioner Eastern Shipping Lines, loaded at Kobe, Japan for transportation to Manila 5,000 pieces of colorized lance pipes in 28 packages valued at P256,039 consigned to Phil. Blooming Mills and 7 cases of spare parts valued at P92,361.75 consigned to Central Textile Mills. Both sets of goods were insured against marine risk for their stated value with respondent Devt. Insurance and Surety Corporation. In the second case, the same vessel took on board 128 cartons of garment fabrics and accessories, in 2 containers, consigned to Mariveles Apparel Corporation, and 2 cases of surveying instruments consigned to Aman Enterprises and General Merchandise. The 128 cartons were insured by respondent Nisshin Fire and Marine Insurance Co. and Dowa Fire & Marine Insurance Co. En route for Manila, the ship caught fire and sank. The insurers paid the corresponding marine insurance values and were subrogated to the rights of the latter as the insured. They filed suits against the petitioner Carrier and won (affirmed by the CA). Petitioner carrier denies liability on the ff. grounds: (a) that the loss was due to an extraordinary fortuitous even which is an exempting circumstance under Sec. 4(2)(b) of the Carriage of Goods by Sea Act (COGSA); (b) that when fire is established, the burden of proving negligence is shifted to the cargo shipper. Issues: (1)Which law should govern : the Civil Code or the Carriage of Goods by Sea Act. (2)Who has the burden of proof to show negligence of the carrier. Ratio : (1) 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. As the cargoes in question were transported from Japan to the Philippines, the liability of Petitioner Carrier is governed primarily by the Civil Code. However, in all matters not regulated by said Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and special laws. Thus, the COGSA, a special law, is suppletory to the provisions of the Civil Code.
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4 Agbayani: Effect of New Civil Code.-- Transportation of the merchandise "at the risk and venture of the shipper" means that the shipper will suffer losses and deterioration arising from fortuitous event, force majeure, or inherent nature and defects of the goods. It does not mean that the carrier is free from liability for losses and deterioration arising from his negligence or fault, w/c is presumed. Thus construed, par. 1 of Art. 361 is not inconsistent with Art. 1735 of the NCC. Requisites for defense of natural disaster: 1. Art. 1739 -- natural disaster must have been the proximate and only cause of the loss 2. The CC must exercise due diligence to prevent or minimize the loss before, during and after the occurrence of flood, storm, or other natural disaster. If the CC does not exercise due diligence in minimizing the loss, he may yet be held liable notwithstanding the fact that the loss, destruction or deterioration of the goods arose out of natural disaster. 3. Art. 1740 -- the CC must not be in delay. If the CC incurs in delay, a natural disaster shall not free it from responsibility. Under Art. 1165 par. 3, if the obligor incurs delay, he shall be responsible for any fortuitous event until he has effected delivery. However, if between the delay or refusal of the CC to transport the goods and the loss of the goods due to an act of God there intervened the shipper's negligence, thus causing a break in the chain of causation between the act of God which caused their loss and the CC's fault, the act of God is the proximate cause of the loss and the carrier's delay or refusal to transport the goods, is merely the remote cause. In such cases, the shipper is not even entitled to set up the claim of contributory negligence. It is then necessary that it be established that the CC was guilty of a willful or negligent act and that between this willful or negligent act and the act of God, no negligence on the part of the shipper intervened. Accident due to defects of carrier not caso fortuito.-- Accidents caused either by defects in the carrier or through the negligence of the carrier is not caso fortuito. The passenger or shipper has every right to presume that the carrier is perfectly in good condition and could transport him safely and securely to his destination
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(e)
Order
of
competent
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F: Macleod and Co. contracted the services of Cia Maritima for the shipment of bales of hemp from Davao to Manila. The bales were loaded into CC's lighters. One of the lighters sunk. The insurance co. paid Macleod and filed to collect from CC. CC denied liability on the grounds that the hemp was loaded on a barge owned by the CC free of charge, that there was no bill of lading issued thereby resulting to the nonexistence of a contract of carriage, that the sinking was due to a fortuitous event, and that the insurance co. has no personality to sue. Held: There was a complete contract of carriage the consummation of which has already begun when the shipper delivered the cargo to the carrier and the latter took possession of the same by placing it on a lighter manned by its EEs, under which Macleod became entitled to the privilege secured to him by law for its safe transportation and delivery, and the carrier to the full payment of its freight upon completion of the voyage. The barges or lighters were merely employed as the first step of the voyage, which is part of the contract. The receipt of the goods by the carrier has been said to lie at the foundation of the contract to carry and deliver, and if no goods are received there can be no such contract. 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, of
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4. Agreement Limiting Liability (a) As to diligence required Art. 1744. A stipulation between the common carrier and the shipper or owner limiting the liability of the former for the loss or destruction, or deterioration of the goods to a degree less than extra-ordinary diligence shall be valid, provided it be: (1) In writing, signed by the shipper or owner; (2) Supported by a valuable consideration other than the service rendered by the CC; and (3) Reasonable, just and not contrary to public policy. Art. 1745. Any of the following or similar stipulations shall be considered unreasonable, unjust and contrary to public policy: (1) That the goods are transported at the risk of the owner or shipper; (2) That the common carrier will not be liable for any loss, destruction or deterioration of the goods; (3) That the common carrier need not observe any diligence in the custody of the goods; (4) That the common carrier shall exercise a degree of diligence less than that of a good father of a family, or of a man of ordinary prudence in the vigilance over the movable transported; (5) That the common carrier shall not be responsible for the acts or omissions of his or its employees; (6) That the common carrier's liability for acts committed by thieves, or of robbers who do not act with grave or irresistible threat, violence or force, is dispensed with or diminished; (7) That the common carrier is not responsible for the loss, destruction, or deterioration of goods on account of the defective condition of the car, vehicle, ship, airplane or other equipment used in the contract of carriage. Art. 1751. The fact that the common carrier has no competitor along the line or route, or a part thereof, to which the contract refers shall be taken into consideration of the question of whether or not a stipulation limiting the common carrier's liability is reasonable, just and in accordance with public policy. (b) As to amount liability Art. 1749. A stipulation that the common carrier's 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 fairly and freely agreed upon. Ysmael vs Barreto, 51 Phil 90
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Shewaram vs PAL, 17 SCRA 606 F: Plaintiff bought a plane ticket from Zamboanga to Manila. When he arrived in Manila, his suitcase was tampered with and his camera and radio were lost. PAL contended that plaintiff was bound by the conditions printed at the back of his ticket which provided that the liability of PAL for any loss is limited to the value of the thing unless the passenger declares in advance a higher valuation and pays an additional charge, and that the value is conclusively deemed not to exceed P 100/ticket. Held : Two requisites must be fulfilled in order that the liability of PAL be limited according to the stipulations behind the ticket stub : (1) the contract is just and reasonable under the circumstances; and (2) it has been fairly and freely agreed upon. (Art. 1750) The fact that the conditions are printed at the back of the ticket stub in letters so small that they are hard to read would not warrant the presumption that plaintiff was aware of those conditions such that he had "fairly and freely agreed" to those conditions. PAL has admitted that passengers do not sign the ticket. Also the carrier cannot limit his liability for injury or loss of goods shipped when such injury or loss was caused by its own negligence. (Arts. 1734, 1735) Ong Yiu vs CA, 91 SCRA 223 F: Atty. Ong Yiu was a passenger on a PAL CebuButuan flight to attend court hearings in Butuan. His suitcase was accidentally sent to Manila. PAL-Manila sent the suitcase to Butuan but the lock had been opened and a folder containing court documents was missing. Plaintiff refused to accept the luggage. PALCebu delivered the luggage to Ong Yiu with the promise to investigate the matter. Plaintiff sued and was awarded moral and exemplary damages. CA reversed holding that PAL was guilty of simple negligence and denied moral and exemplary damages but ordered PAL to pay P100, the baggage liability assumed by it under the condition of carriage printed on the back of the ticket. Held: PAL incurred delay in the delivery of petitioner's luggage. However, there was no bad faith. The liability of PAL was limited to the stipulations printed on the back of the ticket. While the passenger had not signed the plane ticket, he is nevertheless bound by the provision thereof; such provisions have been held to be part of the contract of carriage and valid and binding upon the passenger regardless of the latter's lack of knowledge or assent to the regulation. It is what is known as a contract of adhesion wherein one party imposes a ready made form of contract on the other; it is not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. A contract limiting liability upon an agree valuation does not offend against the policy of the law forbidding one from contracting against his own negligence. Considering that petitioner had failed to declare a higher value for his baggage, he cannot be
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2. Duration of responsibility 4 Agbayani: When relationship of carrier and passenger terminates.-- The relation of CC and passenger does not cease at the moment that the passenger alights from the CC's vehicle at a place selected by the CC at the point of destination, but continues until the passenger had reasonable time or a reasonable opportunity to leave the CC's premises. What is a reasonable time or a reasonable delay within this rule is to be determined from all the circumstances La Mallorca vs CA, 17 SCRA 739 F: Husband and wife together with minor children boarded a La Mallorca bus. They alighted from the bus. The father returned to the bus to get their baggage. He was followed by his daughter. While the father was still on the running board awaiting for the conductor to give his baggage, the bus stated to run so that the father had to jump. His daughter was run over and was killed. The bus co. contended that when she was killed, she was no longer a passenger and the contract of carriage had terminated. Held: Whether or not the relation between carrier and passenger does not cease at the moment the passenger alights from the carrier's premises is to be determined from the circumstances. In this case, there was no utmost diligence. The driver stopped the bus but did not turn off the engine. He started to run the bus even before the conductor gave him the signal. The presence of passengers near the bus was not unreasonable and the duration of the responsibility still exists. Bataclan vs Medina, 102 Phil 181 F: The bus of Medina Trans left Cavite for Pasay with 18 passengers. Around dawn, the front tires burst and the vehicles began to zigzag until it fell into a canal and turned turtle. Some passengers were able to get out while four were trapped including Bataclan. Later, 10 men came to help, one of them carrying a lighted torch, fueled by petroleum. A fire started, burning the bus and the 4 passengers. Gas had leaked when the bus overturned. Held: The proximate cause of the death was the overturning of the vehicle which was followed by the negligence of the driver and the conductor who were on the road walking back and forth. They should have known that with the position of the bus, leakage was possible aside from the fact that gas when spilled can be smelled from a distance. The failure of the driver and conductor to have cautioned or taken steps to warn rescuers not to bring a lighted torch too near the bus constitutes negligence on the part of the agents of the carrier. Aboitiz vs CA 179 SCRA 95 F: A farmer boarded a boat owned by Aboitiz at Mindoro bound for Manila. When the vessel arrived, Pioneer Stevedoring took over control of the cargoes loaded at the vessel and placed its crane alongside the vessel. One hour after he disembarked, he went back to get his cargo but the crane hit him and he died. Held: Aboitiz is still liable for his death under the contract of carriage. The relation of carrier and
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5. Limitation of liability; validity of stipulations Art. 1757. The responsibility of the common carrier for the safety of passengers as required in Arts. 1733 and 1755 cannot be dispensed with or lessened by stipulation, by the posting of notices, by statements on tickets, or otherwise. Art. 1758. When a passenger is carried gratuitously, a stipulation limiting the common carrier's liability for negligence is valid, but not for willful acts or gross negligence. The reduction of fare does not justify any limitation of the common carrier's liability. Ticket given to a passenger is a written contract.-- Ticket given to passenger is a written contract with the ff. elements: (1) the consent of the contracting parties manifested by the fact that the passenger boards the ship and the shipper consents or accepts him in the ship for transportation; (2) cause or consideration which is the fare paid by the passenger as stated in the ticket; (3) object, which is the transportation of the passenger from the place of departure to the place of destination which are stated in the ticket. Passenger bound notwithstanding his failure to sign ticket containing stipulation limiting liability.-- Even if the passenger failed to sign the ticket, he is nevertheless bound by the provisions thereof. Such provisions are part of the contract of carriage, regardless of the passenger's lack of knowledge or assent to the regulation. It is what is known as a contract of adhesion which is not entirely prohibited by law. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. Accordingly, where the CC incurred delay, it is liable only for the amount printed in the ticket the passenger not having declared a higher value for his luggage nor paid addtl. charges. Dispensing with or limiting liability.-- General rule: Under 1757, the extraordinary diligence required under 1733 and 1755 for the carriage of passengers cannot be dispensed with or lessened (1) by stipulation, (2) by the posting of notices, (3) by statements on tickets, or (4) otherwise What cannot be stipulated in a carriage of passengers : (1) absolutely exempting the CC from liability from the passenger's death or injuries; (2) lessening the extraordinary diligence required by law to the diligence of a good father of a family Exception: Effect of gratuitous carriage.-Under 1758, the CC and the passenger may validly stipulate limiting the CC's liability for negligence where the passenger is carried gratuitously (but the parties cannot stipulate to entirely eliminate liability of CC) Effect of reduction of fares.-Under 1758 (2), the reduction of fare does not justify any limitation of the CC's liability -the law requires gratuitous passage. The law is much stricter with respect to carriage of passengers as compared with carriage of goods: a stipulation limiting the CC's liability in writing, signed by the parties, supported by sufficient
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Pilapil vs CA 180 SCRA 546 F: While on a bus, an unidentified bystander hurled a stone at the bus and hit Pilapil above his left eye. He sustained some injuries to his eye. Held: The law does not make the CC an insurer of the absolute safety of its passengers. Art. 1755 qualifies the duty of the CC in exercising vigilance to only such as human care and foresight can provide. The presumption created by law against the CC is rebuttable by proof that the CC had exercised extraordinary diligence in the performance of its obligations and that the injuries suffered were caused by fortuitous events. The liability of the CC necessarily rests upon its negligence, or its failure to exercise the degree of diligence required by law. Under Art. 1763, the diligence required, with regards to its liability in cases when intervening acts of strangers directly caused the injury, is the diligence only of a good father of a family and not the extraordinary diligence generally required. The rule is not so exacting as to require one charged with its exercise to take doubtful or unreasonable precautions to guard against unlawful acts of strangers. The CC would only be negligent if the tort caused by a third person could have been foreseen and prevented by them. The injury was in no way connected to the performance of the obligation of the bus company. It was caused by a stranger, over which the carrier had no control or even knowledge of, and which could not have been prevented. Bachelor Express vs CA, 180 SCRA 217 F: supra. A passenger stabbed a PC officer which caused a commotion which resulted in the death of 2 passengers. Held: The CC raised the defense of caso fortuito. The running amuck of the passenger was the proximate cause of the incident and is within the context of force majeure. However, in order that a CC may be absolved from liability in case of force majeure, it is not enough that the accident was caused by force majeure. The CC must still prove that it was not negligent in causing the injuries resulting from such accident. It must prove that there was no negligence or lack of care and diligence on the part of the CC. The TC and the CA had conflicting findings of fact. The SC upheld the findings of the CA-- the driver did not immediately stop the bus at the height of the commotion; the bus was speeding from a full stop; the victims fell from the bus door when it was opened or gave way while the bus was still running; the conductor panicked and blew his whistle after people had already fallen off the bus; the bus was not properly equipped with doors in accordance with law. It is therefore clear that the petitioners have failed to overcome the presumption of fault and negligence found in the law governing CCs. The CC's argument that it is not an insurer of its passengers deserves no merit in view of the failure of the CC to prove that the deaths of the 2 passengers were exclusively due to force majeure and not to the failure of the CC to observe extraordinary diligence in transporting safely the passengers to their destinations as warranted by law. 8. Duty contributory negligence of passenger; effect of
Art. 17. The carrier shall be liable for damages sustained in the event of death or wounding of a passenger or any other bodily injury suffered by a passenger, if the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.
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Art. 2219. Moral damages may be recovered in the following analogous cases : (1) A criminal offense resulting in physical injuries; (2) Quasi-delicts causing physical injuries; xxx (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34 and 35. xxx Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the defendant acted fraudulently or in bad faith. Art. 2206. xxx (3) The spouses, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased. Fores vs Miranda 105 Phil 266 F: supra. While the jeepney was descending the Sta. Mesa bridge at an excessive rate of speed, the driver lost control, causing it to swerve and hit the bridge wall. Five of the passengers were injured, including the respondent. The CA awarded moral damages. Held: Art. 1764 makes it all the more evident that where the injured passenger does not die, moral damages are not recoverable unless it is proved that the CC was guilty of malice or bad faith. In the case at bar, there is no other evidence of such malice to support an award of moral damages. To award moral damages for breach of contract, without proof of bad faith or malice on the part of the CC, as required by Art. 2220, would be to violate the clear provisions of the law, and constitute unwarranted legislation. A CC's bad faith is not to be lightly inferred from a mere finding that the contract was breached through negligence of the CC's EEs. The exception is a mishap resulting to the death of a passenger in which case Art. 1764 makes the CC subject to Art. 2206 (award of moral damages). Air France vs Carrascoso, 18 SCRA 155 F: Plaintiff, a civil engineer, was a member of a group of 48 Filipinos that left Manila for Lourdes on March 30, 1958. Air France, through its authorized agent, PAL, issued to plaintiff a first class round trip ticket from Manila to Rome. From Manila to Bangkok, he traveled first class, but at Bangkok, Air France forced him to vacate the first class seat that he was occupying because there was a white man who had a better right to the seat. There was a commotion when plaintiff first refused to give up his seat, but he was pacified by his fellow Filipino passengers to give up his seat and transfer to another class. The lower court sentenced Air France to pay P 25,000 as moral damages, P 10,000 as exemplary damages, the difference in fare between first class and tourist class plus P 3,000 for attorney's fees and costs of suit. The CA reduced the refund from P 393.20 to P 383.20.
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Art. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods, unless the same is due to any of the ff. causes only: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers; (5) Order or act of competent public authority. (New Civil Code.) Art. 1735. In all cases other than those mentioned in Nos. 1,2,3,4, and 5 of the preceding article, if the goods are lost, destroyed or deteriorated, CCs are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in Art. 1733. (Ibid.) 4. Delivery (a) Condition of Goods Art. 363. With the exception of the cases prescribed in the second paragraph of Article 361, the carrier shall be obliged to deliver the goods transported in the same condition in which, according to the bill of lading, they were at the time of their receipt, without any damage or impairment, and should he not do so, he shall be obliged to pay the value of the goods not delivered at the point where they should have been and at the time the delivery should have taken place. If part of the goods transported should be delivered the consignee may refuse to receive them, when he proves that he cannot make use thereof without the others. Duty to deliver goods : duty to deliver the goods in the same condition in which accdg. to the B/L they
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Successive carriers shall assume the obligations of previous carriers but have a right of action against previous carriers is the latter are directly responsible for the fault giving rise to the claim of the shipper (f) Obligation to keep registry Art. 378. Transportation agents shall be obliged to keep a special registry, with the formalities required by Article 36, in which there shall be entered, in progressive order of number and dates, all the goods the transportation of which is undertaken, stating the circumstances required by Articles 350 et seq. for the respective bills of lading. (g) Compliance with administrative regulations Art. 377. The carrier shall be liable for all the consequences arising from noncompliance on his part with the formalities prescribed by the laws and regulations of the public administration during the entire course of the trip and upon arrival at the point of destination, except when his omission arises from his having been induced into error by false statements of the shipper in the declaration of the merchandise. If the carrier has acted in accordance with a formal order received from the shipper or consignee of the merchandise both shall incur liability. The CC is exempted from responsibility where his failure to comply arises from having been led into error by the falsehood on the part of the shipper in the declaration of the merchandise The shipper or consignee may become liable for noncompliance with govt. rules and regulations, when the CC has acted by virtue of a formal order of the shipper or consignee --> but the CC continues to be liable F. Rights and Obligations of Shipper and/or Consignee 1. Right to Damages
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G. Applicability of Provisions Art. 379. The provisions contained in Article 349 et seq. shall also be understood as relating to persons who, although they do not personally effect the transportation of commercial goods, contract to do so through others, either as contracts for a special and fixed transaction or as freight and transportation agents. In either case they shall be subrogated to the place of the carriers with regard to the obligations and liability of the latter, as well as with regard to their right.
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Vessels exempt from Registration : AFP vessels, vessels owned and/or operated by the AFP or by foreign govt. for military purposes, and bancas, sail boats and other water craft which are not motorized of less than 3 gross tons shall not be subject to the requirements of these rules and regulations relative to registration and navigation, except in so far as may be prescribed by regulations of MARINA. The Phil. Coast Guard is vested with exclusive authority over the registration and documentation of Phil. vessels, as well as the issuance of all certificates,
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(c) Specific rights and prerogatives Art. 575. Part owners of vessels shall enjoy the right of pre-emption and redemption in the sales made to strangers; but they can only exercise it within the nine days following the record of the sale in the registry and by delivering the price at once. Art. 593. The owners of a vessel shall have preference in her charter over other persons, offering equal conditions and price. If two or more of the former should claim said right the one having greater interest shall be preferred, and should they have an equal interest it shall be decided by lot. Art. 594. The part owners shall elect the manager who is to represent them in the capacity of agent. The appointment of director or agent shall be revocable at the will of the partners.
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(not included in the outline) Art. 624. A captain whose vessel has gone through a hurricane or who believes that the cargo has suffered damages or averages, shall make a protest thereon before the competent authority at the first port he touches within the twenty-four hours following his arrival, and shall ratify it within the same period when he arrives at the place of his destination, immediately proceeding with the proof of the facts, it not being permitted to open the hatches until after this has been done. The captain shall proceed in the same manner if, the vessel having been wrecked, he is saved alone or with part of his crew, in which case he shall appear before the nearest authority, and make a sworn statement of the facts. The authority or the consul abroad shall verify the said facts, receiving sworn statements of the members of the crew and passengers who may have been saved, and taking such other steps as may help in arriving at the facts, he shall make a statement of the result of the proceedings in the log book and in that of the sailing mate, and shall deliver the original records of the proceedings to the captain, stamped and folioed, with a memorandum of the folios, which he must rubricate, for their presentation to the judge or court of the port of destination. The statement of the captain shall be believed if it is in accordance with those of the crew and passengers; if they disagreed, the latter shall be accepted, unless there is proof to the contrary. (not included in the outline) Art. 625. Upon arrival at the port of destination, the captain shall, under his personal liability, turn over the cargo, without any defalcation, to the consignees, and, in a proper case, the vessel, rigging, and freights to the agent, after having obtained the necessary permission from the health and customs officers and fulfilled the other formalities required by the regulations of the administration. [If, by reason of the absence of the consignee or on account of the nonappearance of a legal holder of the invoices, the captain does not know to whom he is to make the legal delivery of the cargo, he shall place it at the disposal of the proper judge or court or authority, in order that he may decide with regard to its deposit, preservation, and custody.] Notes: Under 619, the delivery of the cargo at the port of discharge terminates the captain's responsibility as to the cargo
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International Harvester vs Hamburg American Line 42 Phil 845 F: In the spring of 1917, defendant undertook to carry agricultural machineries, belonging to the plaintiff, from Hamburg to Vladivostok, Russia. Freight charges were prepaid to ultimate destination and defendant reserved the right to forward the machineries at its own expense by some other means in case of its inability to effect discharge at the port of destination. When the voyage was almost completed at the China Sea, war broke out between Germany and Russia, and the ship put in to the port of Manila, where it was interned. Captain of the vessel refused to
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(2) Appraisal of general average Art. 850. If by reason of one or more accidents of the sea, particular and gross averages of the vessel, of the cargo, or of both, should take place on the same voyage, the expenses and damages corresponding to each average shall be determined separately in the port where the repairs are made, or where the merchandise is discharged, sold, or utilized.
(e) Jason Clause Jason Clause, Rule D, York-Antwerp Rules Rights to contribution in general average shall not be affected, though the event which gave rise to
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Art. 867. If the persons contributing should not pay the amount of the contribution at the end of the third day after having been required to do so, the goods saved shall be proceeded against, at the request of the captain, until payment has been made from their proceeds. Art. 868. If the person interested in receiving the goods saved should not give security sufficient to answer for the amount corresponding to the gross average, the captain may defer the delivery thereof until payment has been made. Art. 869. The experts whom the court or the persons interested may appoint, as the case may be, shall proceed with the examination and appraisement of the averages in the manner prescribed in Articles 853 and 854, Rules 2 to 7, in so far as they are applicable.
Art. 820. An arrival shall not be considered lawful in the following cases: 1. If the lack of provisions should arise from the failure to take the necessary provisions for the voyage according to usage and custom, or if they should have been rendered useless or lost through bad stowage or negligence in their care. 2. If the risk of enemies, privateers, or pirates should not have been well known,
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(2) Captain, pilot, others Art. 829. In the cases above mentioned the civil action of the owner against the person causing the injury as well as the criminal liabilities, which may be proper, are reserved. Art. 834. If the vessels colliding with each other should have pilots on board discharging their duties at the time of the collision, their presence shall not exempt the captains from the liabilities they incur, but the latter shall have the right to be indemnified by the pilots, without prejudice to the criminal liability which the latter may incur. (3) conditions; protests Art. 835. The action for the recovery of losses and damages arising from collisions cannot be admitted if a protest or declaration is not presented within twenty-four hours before the competent authority of the point where the collision took place, or that of the first port of arrival of the vessel, if in Philippine territory and to the consul of the Philippines, if it occurred in a foreign country. Art. 836. With respect to damages caused to persons or to the cargo, the absence of a protest may not prejudice the persons interested who were not on board or were not in a condition to make known their wishes. Art. 835 establishes a condition precedent before any action for the recovery of damages arising from collisions may be admitted --> presentation of a protest or declaration within 24 hours before the proper authorities [competent authority at the point where the collision took place or of the first port of
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safe
no limit view of
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Effect of registration: 1. the loan shall have, with regard to other credits, the preference which, according to its nature, it should have (Art. 580 - 8th in the order of preference) 2. effective against third persons from the time of execution/registration Art. 721. In a contract on bottomry or respondentia the following must be stated: 1. The kind, name, and registry of the vessel. 2. The name, surname, and domicile of the captain. 3. The names, surnames, and domiciles of the person giving and the person receiving the loan. 4. The amount of the loan and the premium stipulated. 5. The time for repayment. 6. The goods pledged to secure repayment. 7. The voyage during which the risk is run. Art. 722. The contracts may be made to order, in which case they shall be transferable by indorsement, and the indorsee shall acquire all the rights and shall incur all the risks corresponding to the indorser. e. On What Constituted Art. 724. The loans may be constituted jointly or separately: 1. On the hull of the vessel. 2. On the rigging. 3. On the equipment, provisions, and fuel. 4. On the engine, if the vessel is a steamer. 5. On the merchandise loaded. If the loan is constituted on the hull of the vessel, the rigging, equipment and other goods, provisions, fuel, steam engines, and the freightage earned during the voyage on which the loan is made, shall also be considered as included in the liability for the loan. If the loan is made on the cargo, all that which constitutes the same shall be subject to the repayment; and if on a particular object of the vessel or of the cargo, only the object concretely and specifically mentioned shall be liable. Art. 725. No loans on bottomry may be made on the salaries of the crew or on the profits expected. f. Amount Art. 723. Loans may be made in goods and in merchandise, fixing their value in order to determine the principal of the loan. Art. 726. If the lender should prove that he loaned an amount larger than the value of
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F. BILL OF LADING B/L operates both as a receipt and as a contract; it is a receipt for the goods shipped and a contract to transport and deliver the same as stipulated A stipulation that a CC's liability is limited to the value of the goods appearing in the B/L, unless the owner declares a greater value, is valid and binding Bill of Lading vs Charter party 1. Charter party - entire or complete contract B/L - private receipt which the captain gives to accredit that such goods belong to such persons 2. Charter party - consensual party, which can be dissolved by means of indemnity for losses and damages B/L - real contract; exists only after delivery of the goods to be transported is made 1. Contents Art. 706. The captain and the shipper shall have the obligation of drawing up the bill of lading, in which shall be stated: 1. The name, registry, and tonnage of the vessel. 2. The name of the captain and his domicile. 3. The port of loading and that of unloading. 4. The name of the shipper. 5. The name of the consignee, if the bill of lading is issued in the name of a specified person. 6. The quantity, quality, number of packages, and marks of the merchandise. 7. The freightage and the primage stipulated. The bill of lading may be issued to bearer, to order, or in the name of a specified person, and must be signed within twenty- four hours after the cargo has been received on board, the shipper being entitled to demand the unloading at the expense of the captain should the latter not sign it, and, in any case, the losses and damages suffered thereby. Art.707. Four true copies of the original bill of lading shall be made, and all of them shall be signed by the captain and by the shipper. Of these copies the shipper shall keep one and send another to the consignee; the captain shall take two, one for himself and the other for the ship agent. There may also be drawn as many copies of the bill of lading as may be considered necessary by the parties; but, when they are issued to order or to bearer, there shall be stated in all the copies, be they the first four or the subsequent ones, the destination of each one, stating whether it is for the ship agent, for the captain, for the shipper, or for the consignee. If the copy sent to the latter should have a duplicate, this circumstance and the fact
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RISKS Sec. 2. Subject to the provisions of Section 6, under every contract of carriage of goods by sea, the carrier in relation to the loading, handling, stowage, carriage, custody, care, and discharge of such goods shall be subject to the responsibilities and liabilities and entitled to the rights and immunities hereinafter set forth.
RESPONSIBILITIES AND LIABILITIES Sec. 3. (1) The carrier shall be bound before and at the beginning of the voyage to exercise due diligence to(a) Make the ship seaworthy; (b) Properly man, equip, and supply the ship; (c) Make the holds, refrigerating and cooling chambers, and all other parts of the ship in which goods are carried, fit and safe for their reception, carriage, and preservation (2) The carrier shall properly and carefully load, handle, stow, carry, keep, care for, and discharge the goods carried. (3) After receiving the goods into his charge the carrier, or the master or agent of the
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The plaintiff cannot dispute said limitation on the ground that it was not freely and fairly agreed upon or that it is against public policy, since the LAW ITSELF PROVIDES FOR SAID LIMITATION; THE SAME IS DEEMED READ INTO THEIR CONTRACT Package - means individual packaging of the goods - does not cover 1 container van Parties may agree to amount of liability less than $500 under Sec. 4(5). By providing that $500 is the maximum liability, the law does not disallow an agreement for liability at a lesser amount. Moreover, Art. 1749 of the NCC expressly allows th limitation of the carrier's liability. (Eastern v. Great American) SURRENDER OF RIGHTS AND IMMUNITIES AND INCREASE OF RESPONSIBILITIES AND LIABILITIES Sec. 5. A carrier shall be at liberty to surrender in whole or in part all or any of his rights and immunities or to increase any of his responsibilities and liabilities under this Act, provided such surrender or increase shall be embodied in the bill of lading issued to the shipper. The provisions of this Act shall not be applicable to charter parties; but if bills of lading are issued in the case of a ship under a charter party, they shall comply with the terms of this
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Sec. 11. When under the custom of any trade the weight of any bulk cargo inserted in the bill of lading is a weight ascertained or accepted by a third party other than the carrier or the shipper and the fact that the weight as ascertained or accepted is stated in the bill of lading, then notwithstanding anything in this Act, the bill of lading shall not be deemed to be prima facie evidence against the carrier of the receipt of goods of the weight so inserted in the bill of lading, and the accuracy thereof at the time of shipment shall not be deemed to have been guaranteed by the shipper. Sec. 12. Philippines.) (Not applicable to the
Sec. 13. This act shall apply to all contracts for carriage of goods by sea to or from ports of the United States in foreign trade. As used in this Act the term "United States" includes its districts, territories, and possessions: Provided, however, that the Philippine Legislature may by law exclude its application to transportation to or from ports of the Philippine Islands. The term "foreign trade" means the transportation of goods between the ports of the United States and ports of foreign countries. Nothing in this Act shall be held to apply to contracts for carriage of goods by sea between any port of the United States or its possession: Provided, however, that any bill of lading or similar document of the title which is evidence of a contract for the carriage of goods by sea between such ports, containing an express statement that it shall be subject to the provisions of this Act, shall be subjected hereto as fully as if subject hereto by the express provisions of this Act: Provided, further, that every bill of lading or similar document of title which is evidence of a contract for the carriage of goods by sea from ports of the United States in foreign trade, shall contain a statement that it shall have effect subject to the provisions of this Act. Notes: American Insurance vs Cia Maritima : contract of carriage from NY with final destination in Cebu. COGSA is applicable despite the fact that from Manila to Cebu, the goods were transshipped on an interisland vessel. Transshipment was not a separate transaction from that originally entered into by the parties but was part of the carrier's contractual obligation. Sec. 14. Upon the certification of the Secretary of Commerce that the foreign commerce of the United States in its competition with that of foreign nations is prejudiced by the provisions, or any of them, of the Title I of this Act, or by the laws of any foreign country or countries relating to the carriage of goods by sea, the President of the United States may, from time to time by proclamation, suspend any or all provisions of Title I of this Act for such periods of time or indefinitely as may be designated in the proclamation., The President may at any time rescind such suspension of Title I hereof, and any time rescind such suspension of Title I hereof, and any provisions thereof which may have been thereafter made for carriage of goods by sea. Any proclamation of suspension or rescission of
V. International Air Transport A. The Warsaw Convention, 51 O.G. 5084 (October 1955); Presidential Proclamation No. 201, 51 O.G. 4933 (October 1955) MAKING PUBLIC THE ADHERENCE OF THE R.P. TO THE CONVENTION FOR THE UNIFICATION OF CERTAIN RULES RELATING TO INTL. TRANSPORTATION BY AIR AND THE ADDITIONAL PROTOCOL THERETO, 1929 WHEREAS, a Convention for the Unification of Certain Rules Relating to International Transportation by Air & an Additional Protocol thereto relating to Article 2 of the Convention were signed at Warsaw by the plenipotentiaries of 32 countries; WHEREAS, Article 38 of the aforesaid Convention provides that a Government on behalf of which this Convention has not been signed, shall be allowed to adhere thereto at any time after the Convention has come into force, by means of a notification addressed to the Government of the Republic of Poland; WHEREAS, the Senate of the Congress of the Philippines, by its Resolution No. 19 adopted on May 16, 1950, concurred in the adherence by the Republic of the Philippines Government to the said Convention & the said Protocol in accordance with the Philippine Constitution, subject to the reservation, as provided in the Additional Protocol, that the 1st paragraph of Art. 2 of the Convention shall not apply to
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WHEREAS, the Republic of the Philippines Government has formally adhered to the said Convention its Additional Protocol, & the Government of the Republic of Poland was notified of said adherence on November 9, 1950, when the instrument of adherence was registered in accordance with Article 38 (2) of said Convention; and, WHEREAS, the adherence of the Republic of the Philippines Government, pursuant to Art. 38(3) of said Convention, took effect as from the 90th day after November 9, 1950. NOW, THEREFORE, be it known that I, Ramon Magsaysay, Republic of the Philippines President, in pursuance of the aforesaid concurrence of the Senate of the Congress of the Philippines, and subject to the reservation as provided in the Additional Protocol that the First paragraph of Art.2 of the Convention shall not apply to international transportation that may be performed by the Republic of the Philippines, do hereby proclaim and make public the said Convention and said Protocol, a copy of which is hereto attached, to the end that the same and every article and clause thereof may be observed & fulfilled with good faith by the Republic of the Philippines and the citizens thereof. Notes: If common carrier, Civil Code first applies, then Warsaw Convention. Situations where Warsaw is applicable is in private carriers. The only criterion for the Warsaw Convention to be applicable is: it is applicable to ALL international transportation of persons, baggage, or goods performed by aircraft for hire. International transport: where there's transport by AIR & there is a point of contact in 2 high contracting parties (countries which have acceded to the Convention). E.g. transportation by PAL from Manila to San Francisco Federal Express - transporation of goods B. Constitutionality SANTOS V. NORTHWEST AIRLINES [210 S 256 (1992)] F: 1. A Filipino minor was informed by Northwest that he had no reservations for his flights, and had to be waitlisted, despite a previous confirmation. He sued for damages. Northwest moved to dismiss on the ground of lack of jurisdiction based on Art.28 (1) of the Warsaw Convention, where the complaint could be instituted in the territory of one of the contracting parties before the court of the (1) domicile of the carrier; (2) principal place of business; (3) where it has a place of business through which the contract had been made; and (4) place of destination. FIRST ISSUE: W/NOT THE WARSAW CONVENTION IS UNCONSTITUTIONAL? HELD: No. Art. 28 (1) of Although the case can without resolving the Warsaw Convention is a Warsaw Con. is constitutional. be decided on other grounds constitutional question, the treaty commitment voluntarily
HELD: No. Art. 28 (1) provides that an action for damage must be brought at the option of the plaintiff: (a) before the court of the domicile of the carrier; (b) the court of its principal place of business; (c) the court where it has a place of business thru w/c the contract had been made; (d) the court of the place of destination. In this case, the ff. were not followed, and hence the Philippines, not being one of the courts mentioned in Art.28 (1), does not have jurisdiction over the case. (1) court of domicile is Minnesota, U.S.A; (2) principal place of business of carrier is also U.S.A; (3) place of business where contract was made was in San Francisco; (4) place of destination is also San Francisco, Santos having purchased a round trip-ticket from SFO-TYO-MNL, then back to TYO- SFO. The "ultimate destination" being San Francisco. The court called upon to determine the applicability of the limitation provision must first be vested with the appropriate jurisdiction. If the carrier is indeed is indeed not guilty of WILLFUL MISCONDUCT, it can avail itself of the limitations set forth in this article. But it can be done only if the action has first been commenced properly under the rules set forth in Art.28 (1). Notes: The enumeration of the causes of action in the WC is not an exclusive list. You can have a cause of action even if it is not: (a) death or wounding of passenger; (b) damage or loss or destruction of checked baggage; (c) delay in transportation of passengers, luggage and goods. The case of Northwest is actually overbooking. Delay still a cause of action under WC. Note however, that the limitations of liability in the Convention favors the carrier.
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NORTHRWEST V. CUENCA [14 S 1063 (1965)] F: Nicolas Cuenca, an official delegate of Philippines to a conference in Tokyo, was transferred from first class to tourist class despite his first class ticket. The Northwest agent also treated him rudely in front of other passengers. Northwest argues that according to the Warsaw Convention, Arts. 17, 18, 19, an air carrier is liable only in the event of (a) death of a passenger or injury suffered by him; (b) of destruction or loss of, or damage to any checked baggage/goods; & (c) delay in the transportation by air of passengers, baggage or goods. ISSUE: W/NOT CUENCA HAS A CAUSE OF ACTION THOUGH NOT AMONG THOSE MENTIONED IN THE WC? HELD: Yes. The said articles merely declare the carrier liable for damages in the enumerated cases, if the conditions therein specified are present. Neither the provisions of said articles nor others regulate or exclude liability for other breaches of contract by the carrier. Under petitioner's theory, an air carrier would be exempt from any liability for damages in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd. ALITALIA V. IAC [192 SCRA 10 (1990)] F: Dr. Felipa Pablo, an Associate UP Professor and research grantee of the Philippine Atomic Energy Agency was scheduled to speak in a UN meeting in Ispra, Italy. She arrived in Milan a day before the meeting, but her luggage (where her speech was) was delayed, and arrived a day after the meeting. She returned to Manila before the meeting. ISSUE: W/NOT THE WC SHOULD APPLY TO LIMIT ALITATLIA'S LIABILITY? HELD: No. The WC does not operate as an absolute limit of the extent of an airline's liability. It does not regulate or exclude liability for other breaches of contract by the carrier. Under the WC, an air carrier is made liable for damages for delay in the transportation by air of passengers, luggage or goods. The WC also limits the liability of the carrier to 250 francs per kilo of the total weight of the package. The WC denies to the carrier availment of the provisions which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with the law of the court seized of the case, is considered as willful misconduct, or if the damage is caused by any agent of the carrier acting w/in the scope of his employment. 2. The WC does not regulate or exclude liability for other breaches of contract by the carrier or misconduct of its officers and employees or for some particular or exceptional damage. The WC has been held inapplicable where there was proof of malice or bad faith attributable
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E. Limitations on Liability RE: PASSENGERS Art.22. (1) In the transportation of passengers the liability of the carrier for each passenger shall be limited to the sum of 125,000 francs. (Now $100,000) Where, in accordance w/ the law of the court to w/c the case is submitted, damages may be awarded in the form of periodical payments, the equivalent capital value of the said payments shall not be exceed 125,000 francs. Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability. RE: BAGGAGE/GOODS (2) In the transportation of checked baggage and of goods, the liability of the carrier shall be limited to a sum of 250 francs per kilogram (Now $20 per kilo), unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of the value of the delivery and has paid a supplementary sum if the case so requires. In that case, the carrier will be liable to pay a sum not exceeding the declared sun, unless he proves that the sum is grater that the actual value to the consignor at delivery. (3) As regards objects of w/c the passenger takes charge himself, the liability of the carrier shall be limited to 5,000 francs per passenger. (4) The sums mentioned above shall be deemed to refer to the French franc consisting of 65 1/2 milligrams of gold at the standard of fineness of nine hundred thousandths. These sums may be converted into any national currency in round figures. Art. 23. Any provision tending to relieve the carrier of liability or to fix a lower limit that which is laid down in this convention shall be null and void, but the nullity of any such provision shall not involve the nullity of the whole contract, which shall remain subject to the provisions of this convention. Art. 24. (1) In the cases covered by Arts.18 & 19 any action for damages, HOWEVER FOUNDED, can only be brought subject to the conditions and limit set out in this convention. (2) In the case covered by Art.17, the provisions of the preceding paragraph shall also apply,w/o prejudice to the question as to who are the persons who have the right to bring suit and what are their respective rights. NOTES: Even if you base your claim on quasi-delict, you can still sue under Warsaw, invoking Art.24 (1). PAN AM v. IAC (164 SCRA) F: Pangan's luggages didn't arrive w/ his flight. As a consequence the film exhibitions he set up & promoted for, was cancelled. CFI ordered PanAm to pay
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A: YES. It just can't avail of the limitation on liability. Thus it can still invoke the provisions on NOTICE or PRESCRIPTION/LACK OF CAUSE OF ACTION. e.g. If damage wasn't one of the enumerations in the WC, & case was filed beyond the 2 year requirement. The carrier can invoke prescription. But if suit is brought w/in 2 years, carrier may be liable for a higher amount than the limitation. The only time when WC isn't applicable is when it's not intl. air transport. There is nothing in Art.25 w/c says that the WC doesn't apply entirely. ALITALIA v.IAC (supra) The Convention does not regulate or exclude liability for other breaches of contract by the carrier or misconduct of its officers and employees or for some particular or exceptional damage. The Con. has been held inapplicable where there was proof of malice or bad faith attributable to its officers & employees. HERE, HOWEVER, no bad faith of EES. Nominal damages however, was awarded because of the presence of some special species of injury caused to Dr. Pablo. TWA v. CA (165 SCRA) F: Vinluan, ACCRA lawyer, was downgraded from 1st class to economy & was issued refund application, in his MNL-Europe-NYK- SFO-MNL flight. (His NYK-SFO flight particularly) He also noticed that white Caucasian passengers who checked in later than him were given preference in 1st class seats, w/c became available due to "no show" passengers. He sued in CFI for breach of contract & bad faith. ISSUE: WON Warsaw Con. limit on liability can be availed of --- NO. There was obvious discrimination & humiliation to w/c Vinluan was subjected. Such inattention & lack of care for interest of its passengers amount to bad faith w/c entitles passenger to moral damages. NOTES: His entire trip, even though he availed of the services of other airlines, is equal to one transport. E.g. MNL-SFO via PAL } one continuing SFO-NYK via United } ticket Hence, if injury appears in SFO-NYK, Warsaw can be applied. F. Conditions of Liability
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