PART I COMMON CARRIERS

CHAPTER 5 Bill of Lading and other Formalities

1. Concepts
a. A contract of carriage is NOT a formal contract.
b. A bill of lading or a ticket is NOT necessary for the perfection of a contract of
carriage.
2. Definition
a. Interprovincial Autobus Co., Inc. v. Collector and Perez v. CTA (p. 260)
3. Kinds of Bills of Lading
a. Negotiable or non-negotiable
b. Clean bill of lading or Foul bill of lading
c. On board bill or received for shipment bill
d. Spent bill of lading
e. Through bill of lading
f. Custody bill of lading
g. Port bill of lading
4. Nature of Bill of Lading
a. Receipt
b. Contract
c. Document of title makes it a symbol of the goods
5. When Effective
6. Bill of Lading as Contract
a. Parties
i. Ace Navigation Co., Inc. v. FGU Insurance Corporation, et al. (p. 265)
b. Contract of Adhesion contracts where almost all the provisions of which have
been drafted only by ONE party
i. Qua Chee Gan v. Law Union and Rock Insurance Co. (p. 266)
ii. Fieldman Insurance v. Vargas (p. 266)
iii. Ong Yiu v. Court of Appeals, et al. (p. 267)
iv. Servando, et al. v. Philippine Steam Navigation Co. (p. 267)
v. Magellan Manufacturing Marketing Corporation v. Court of Appeals (p.
267)
c. Parol Evidence Rule when the parties have reduced their agreement on a
particular matter into writing, all their previous and contemporaneous agreements
on the matter are merged therein
d. Bill of Lading as Evidence
i. Peralta de Guerrero et al. v. Madrigal Shipping Co., Inc. (p. 271)
e. Bill of Lading as Actionable Document
f. Shipment Terms (FOB, FAS, CIF)
1. Behn, Meyer & Co., Ltd. V. Yangco (p. 274)
ii. They determine the point at which the risk of loss passes from seller to
buyer
iii. They determine what performance by the seller amounts to a tender
which will put the buyer, if he thereafter refuses to accept delivery, in
breach
iv. They are used for quoting the price
7. Basic Stipulations (Code of Commerce)
a. Overland Transportation (Art. 350 - 352)
b. Maritime Commerce (Art. 706, 707, 710 718)
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i. COGSA (Sec. 3(3))

c. Electronic Documents (RA 8792 Sec. 25 26)
8. Prohibited (Art. 1745) and Limiting Stipulations
a. 3 Kinds of Limiting Stipulations
i. [INVALID] Exculpatory Contracts - Exempting the carrier from any and all
liability for loss or damage occasioned by its own negligence
ii. [INVALID] Providing for an unqualified limitation of such liability to an
agreed valuation
iii. [VALID AND ENFORCEABLE] Limiting the liability of the carrier to an
agree valuation unless the shipper declares a higher value and pays a
higher rate of freight
b. Purpose of Limiting Stipulations to protect the common carrier
c. Presumption of Negligence (Art. 1752)
d. Stipulation Reducing Diligence (Art. 1744)
i. Not allowed for passenger (Art. 1757)
e. Stipulations Fixing the Limit of Recovery (Art. 1750)
i. Requirement
1. It is reasonable and just under the circumstances
2. It is fairly and freely agreed upon
ii. Shewaram v. PAL (p. 285)
iii. Art. 1751 whether the carrier has a competitor
iv. Ong Yiu v. PAL (p. 287)
f. Riots and Strikes (Art. 1748)
g. COGSA the liability of the carrier is U$ 500 per package in the absence of a
shippers declaration of a higher value on the bill of lading (Sec. 4(5))
i. Belgian Overseas Chartering v. Phil. First Ins. Co.
h. When the Limiting Stipulation CANNOT be Invoked
i. When the agreement limiting the CCs liability is annulled by the shipper
or owner if the CC refused to carry the goods unless the former agreed to
such stipulation
ii. If the carrier delays in the transportation of the goods
iii. If the carrier changes the stipulated or usual route
i. Problem Set
i. Lu Do & Ym Corp. v. Binamira (p. 293-294)
ii. Philam Insurance Company, Inc. v. Heung-A Shipping Corp. et al. (p.
295-297)
9. Bill of Lading as Receipt
a. Saludo, Jr. v. CA (p. 297)
b. Said Weight Clause
i. Said to Weight nobody knows the actual weight of the cargo; the weight
written on the bill and on the manifest is based only on the declaration of
the shipper
1. Wallem Philippines Shipping Inc., et al. v. Prudential Guarantee &
Assurance, Inc., et al.
10. Bill of Lading as Document of Title
a. Negotiability (Art. 1507)
i. Effect of Stamp or Notation Non-negotiable remains to be negotiable
for as long as the document of title contains the required words of
negotiability under Art. 1507
b. How Negotiated (Art. 708, Code of Commerce)
i. Bearer Document (Art. 1508, 1511) by delivery
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ii. Order Document (Art. 38 of NIL, Art. 1509 of NCC) through the
indorsement of the specified person so named
iii. Incomplete Negotiation (Art. 1515)
c. Effects of Negotiation effect of transferring possession of the goods
i. Philippine Trust Co. v. National Bank (p. 303)
ii. Art. 1513, NCC
iii. National Development Co. v. Court of Appeals (p. 304) an indorsee of
negotiable bills of lading has the right to claim from the insurer for the loss
of the goods

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CHAPTER 6 Actions and Damages in Case of Breach

1. Distinctions
a. Cangco v. Manila Railroad Company (p. 306)
b. Culpa Contractual v. Culpa Aquiliana
Point of Distinction
Culpa Contractual
Source of Obligation
Contract
Liability of employee
No liability there being no
privity of contract
Availability of defense
Due diligence in the
selection and supervision
of the employee is NOT a
defense
In what capacity liable
Liable as contracting
party

Culpa Aquiliana
Quasi-delict
Solidarily liable with the
employer
Due diligence in the
selection and supervision
of the employee is a
defense under Art. 2180
Liable as an employer

2. Concurrent Causes of Action

a. Concurrence with THIRD persons
b. Solidary Liability in case the negligence of the carriers driver and a third
person concurs
i. Alternative Causes of Action Fabre v. CA (p. 308)
c. Alternative Compensation Scheme
i. Marine Transportation Sec. 14 & 15 of the Domestic Shipping
Development Act of 2004
ii. Motor vehicles Compulsory Motor Vehicle Liability Insurance (Sec. 374
389 of the Insurance Code of the Philippines)
3. Elements of Cause of Action (act or omission in violation of the right of the other party)
against the Carrier
a. 3 essential elements
i. A right in favor of the plaintiff by whatever means and whatever law it
arises
ii. The correlative obligation of the defendant to respect such right
iii. The act or omission of the defendant violates the right of the plaintiff
4. Recoverable Damages the pecuniary compensation, recompense, or satisfaction for
an injury sustained, or as otherwise expressed, the pecuniary consequences that the law
imposes for the breach of some duty or violation of some rights
a. Extent of recovery (Art. 2201 NCC)
i. Applied to Common Carrier
ii. Carriers right of recourse
b. Kinds of Damages
i. Art. 2197 NCC
1. Actual or compensatory
2. Moral
3. Nominal
4. Temperate or moderate
5. Liquidated
6. Exemplary or corrective
ii. Art. 2216 NCC

Page 4

5.

6.

7.

8.

1. No proof of pecuniary loss is necessary in order that moral,

nominal, temperate, liquidated or exemplary damages may be
adjudicated
Actual or Compensatory Damages (Art. 2199 - 2200)
a. Kinds of Actual Damages
i. The loss of what a person already possesses (dao emergente)
ii. The failure to receive as a benefit that would have pertained to him (lucro
cesante)
iii. Art. 2205
b. Proof
i. Determination of amount of liability in carriage by sea (Art. 372, CoC)
ii. International Carriage of Goods (Sec. 4(5), COGSA)
iii. Valuation of Goods
1. Goods value at the time of destruction
2. Profit-earning chattels value of the chattel to its owner as a
going concern at the time and place of the loss
iv. Damages in Personal Injury Cases
c. Damages in cases of Death (Art. 2206 CC applies to breach of contract of
carriage)
i. Fixed Damage
ii. Loss of earning capacity (Formula: Net earning capacity = life expectancy
x [gross annual income necessary living expenses])
Attorneys Fees (Art. 2208 CC)
a. Award of Attorneys Fees (PAL v. CA p. 317)
b. When available in Contract of Carriage (par. 1, 2,4, 5, 10, 11 of Art. 2208)
Interests a claim for damages based on breach of contract of carriage is NOT one
based on loan or forbearance of money
a. Eastern Shipping Lines, Inc. v. CA (p. 318)
b. PAL v. CA (2008) (p. 318)
Moral Damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and similar
injury
a. Breach of contract of air carriage
i. The mishap results in the death of a passenger
ii. Where the carrier is guilty of fraud or bad faith
iii. Where the negligence of the carrier is so gross and reckless as to virtually
amount to bad faith
b. Gross negligence implies a want or absence of or failure to exercise even slight
care or diligence, or the entire absence of care
i. Singson v. CAR (p. 319)
ii. PAL v. CA (1996) (p. 319)
iii. GSIS v. Pacific Airways Corp. (p. 319)
c. Requisites
i. Expert Travel & Tours, Inc. v. CA and Ricardo Lo (p. 320)
1. There must be an injury, whether physical, mental or
psychological, clearly sustained by the claimant
2. There must be a culpable act or omission factually established
3. The wrongful act or omission of the defendant is the proximate
cause of the injury sustained by the claimant
4. The award of damages is predicated on any of the cases stated in
Art. 2219
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ii. Ortigas, Jr. v. Lufthansa German Airlines (p. 320/ 323) inattention and
lack of care on the part of the carrier resulting in the failure of the
passengers to be accommodated in the class contracted for amounts to
bad fair or fraud
d. When Moral Damages were Awarded
i. Air Transportation Cases
1. Air France v. Gillego (p. 321)
2. PAL v. CA (p. 322)
3. Lopez v. Pan American World Airways (p. 322)
4. Zulueta v. Pan American World Airways, Inc. (p. 322-323)
5. Air France v. Rafael Carrascoso (p. 323-324)
6. Trans World Airlines v. CA (p. 324)
7. Armovit v. CA (p. 324)
8. PAL v. CA and Bagadiong (p. 324-325 / 331) bumped- off
passengers
9. Korean Airlines, Co., Ltd. V. CA, et al. (p. 325)
10. PAL v. CA and Gilda G. Mejia (p. 325)
e. Cases when there is NO awarded Moral Damages
i. Cathay Pacific Airways v. Juanita Reyes, et al. (p. 326)
ii. Tan v. Northwest Airlines, Inc. (p. 326)
f. Specific Cases when Recoverable (Art. 2219 2220 CC)
g. Factors to Consider (WRT the amount to be recovered)
i. The extent of humiliation may also determine the amount of moral
damages that can be awarded
ii. The extent of pain and suffering likewise determines the award
iii. Official, political, social and financial standing of the offended party and
the business and financial position of the offender affect the amount of
damages
iv. The age of the claimant
h. Carriers were made to pay moral damages to the passengers including: (from
Chapter 8 p. 354-355)
i. Inattention to and lack of care for the interest of the passenger and
inordinate delay in addressing complaints or claims
ii. Rude and discourteous treatment by employees
iii. Failure to provide accommodations and assistance to stranded
passengers
iv. Cancellation of confirmed reservation and transfer or downgrading to
another class
v. Forcibly ejecting a passenger from a seat and transferring him to another
vi. Off-loading of passenger before the final destination
vii. Bumping-off of or refusal to accept the passenger with confirmed tickets
because of erroneous entries in the tickets or lack of indorsement or
because of undue preference given to other passengers
viii. In case of cancellation of the flight due to typhoon, the passenger was
harangued and prevented from boarding the replacement flight
ix. After cancellation of a distressed flight, shuttling passengers to different
places and changing the stopping places without prior notice
9. Nominal Damages (De minimis non curate lex the law does not concern itself with
trifles)
a. Art. 2221 2223 CC
b. Japan Airlines v. CA (p. 328)
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c. Northwest Airlines, Inc. v. Nicolas L. Cuenca (p. 328)

10. Temperate or Moderate Damages
a. Art. 2224 2225 CC
b. Rationale: where from the nature of the case, definite proof of pecuniary loss
cannot be offered, although the court is convinced that there has been such loss
11. Liquidated Damages
a. Art. 2227 2228 CC
b. Those agreed upon by the parties to a contract, to be paid in case of breach
thereof
12. Exemplary or Corrective Damages
a. Requisites
i. They may be imposed by way of example in addition to compensatory
damages and only after the claimants right to them has been established
ii. They cannot be recovered as a matter of right, their determination
depending upon the amount of compensatory damages that may be
awarded to the claimant
iii. The act must be accompanied by bad faith or done in wanton, fraudulent,
oppressive or malevolent manner
b. Statutory Provision (Art. 2232 2235 CC)
c. Cases
i. Macenas v. CA (p. 331)
ii. R Transport Corp v. Pante (p. 331)

Page 7

PART II AVIATION LAW

Jose Mendoza v. Philippine Airlines, Inc. (p. 332)
CHAPTER 7 The Aircraft and Civil Aviation
1. Applicable Laws
a. Civil Aviation RA 9497 (Civil Aviation Act of 2008), Civil Aviation Regulations (Civil
Aviation Authority of the PH), RA 776 (economic regulation)
b. Treaties and Conventions
i. Warsaw Convention liabilities of carriers in international transportation by
air
ii. Chicago Convention
c. Regulatory Perspectives
i. Kuwait Airways Corp. v. PAL (p. 334)
2. Civil Aviation
a. Aeronautics or aviation the science and art of flight
b. Civil aviation the operation of any civil aircraft for the purpose of general aviation
operations, aerial work or commercial air transport operations
c. Aircraft any machine that can derive support in the atmosphere from the reactions
of the air other than the reactions of the air against the earths surface
i. Civil Aviation Act of 2008 aircraft = civil aircraft
3. Registration of Aircraft
a. Philippine Aircraft an aircraft registered in the Philippines in accordance with the
requirements of the Civil Aviation Authority Act of 2008
i. Art. 17, Ch. 3 of the Chicago Convention aircrafts have the nationality of the
State in which they are registered
b. Civil Aviation Authority Act of 2008 Sec. 43 48, 54
4. Recording of Conveyances (Sec. 49 53 of CAAA 2008)
a. Validity of the Registration of Voluntary Dealings concerning aircrafts with the CAAP
i. The registration is valid only WRT the parties and their heirs, assignees,
executors, administrators, devisees, or successors in interest, and any
person having actual notice thereof
ii. The registration is valid as against all persons and any instrument, recording
of which is required shall take effect from the date of its record in the books of
the Authority, and not from the date of its execution
5. Marine Insurance Sec. 99, PD 1460
6. Air Transportation in General
a. Air commerce or commercial air transport operation scheduled or non-scheduled
air transport services for pay or hire, the navigation of aircraft in furtherance of a
business, the navigation of aircraft from one place to another for operation in the
conduct of a business, or an aircraft operation involving the transport of passengers,
cargo or mail for remuneration or hire
b. Domestic air commerce air commerce within the limits of the Philippine territory
c. Domestic air transport air transportation within the limits of the Philippine territory
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d. Foreign air transport air transportation between the Philippines and any place
outside it or wholly outside the Philippines
e. International commercial air transport carriage by aircraft of persons or property for
remuneration or hire or the carriage of mail between any 2 or more countries
7. Persons involved in Air Transportation
a. Air carrier or operator a person who undertakes, whether directly or indirectly, or by
a lease or any other arrangements, to engage in air transportation services or air
commerce
b. Philippine air carrier an air carrier who is a citizen of the Philippines
c. Foreign air carrier or operator any operator, not being a Philippine air operator,
which undertakes, whether directly or indirectly or by lease or any other
arrangement, to engage in commercial air transport operations within borders or
airspace of the Philippines, whether on a scheduled or chartered basis
d. Airman any individual who engages, as the person in command or as pilot,
mechanic, aeronautical engineer, flight radio operator or member of the crew, in the
navigation of aircraft while under way and any individual who is directly in charge of
inspection, maintenance, overhauling, or repair of aircraft, aircraft engine, propellers,
or appliances and individual who serves in the capacity of aircraft dispatcher or air
traffic control operator
e. Economic aspects of air transportation (regulated by CAB)
i. General sales agent
ii. Cargo sales agent
iii. Air freight forwarders
iv. Off-line carrier
v. Air taxi operator
8. Charter of Aircraft air transportation performed by an air carrier where the entire capacity if
one or more aircraft, or less than the entire capacity of an aircraft, has been engaged for the
movement of persons and their personnel baggage or for the movement of property on a
time, mileage, or trip basis
a. by a person for his own use
b. by a representative of a group for the use of such group
c. by an airfreight forwarded holding a currently effective permit
d. Classification
i. On-route charter service performed by an air carrier between points which
said carrier is authorized to provide service pursuant to its certificate of public
convenience and necessity or foreign air carrier permit
ii. Off-router charter
iii. Pro-rata charter a charter the cost of which is divided among the
passengers transporter
iv. Single entity charter a charter the cost of which is borne by the charterer
and not by individual passengers, directly or indirectly
v. Mixed charter a charter the cost of which is borne, or pursuant to a contract
may be borne, partly by the charter participants and partly by the charterer
9. Sovereignty and Air Freedoms
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a. Air Services Agreement two governments shall have negotiated a bilateral treaty
between them that will define the air traffic rights each grants to the other during the
life of the treaty
b. Freedoms of the Air International Civil Aviation Organization (ICAO) (Note: only the
first 5 freedoms have been officially recognized)
i. First Freedom Right (the right or privilege, in respect of scheduled
international air services, granted by one State to another State or States) to
fly across its territory without landing
ii. Second Freedom Right (xxx) to land in its territory for non-traffic purposes
iii. Third Freedom Right (xxx) to put down, in the territory of the first State,
traffic coming from the home State of the carrier
iv. Fourth Freedom Right (xxx) to take on, in the territory of the first State,
traffic destined for the home state of the carrier
v. Fifth Freedom Right (xxx) to put down and to take on, in the territory of the
first State, traffic coming from or destined to a third state
vi. Sixth Freedom Right the right or privilege, in respect of scheduled
international air services, of transporting, via the home State of the carrier,
traffic moving between two other States
vii. Seventh Freedom Right (xxx) of transporting traffic between the territory of
the granting State and any third State with no requirement to include on such
operation any point in the territory of the recipient State
viii. Eighth Freedom Right consecutive cabotage
ix. Ninth Freedom Right stand alone cabotage
c. Cancellation of Commercial Agreement
i. Civil Aeronautics Board has the indispensible authority to compel local air
carriers to comply with government determined policies, even at the expense
of economic rights
ii. Has ample power under its organizing charter, to compel an airline, in proper
cases, to terminate whatever commercial agreements the carrier may have
d. Cabotage not granted in this jurisdiction
i. Consecutive Cabotage the right or privilege, in respect of scheduled
international air services, of transporting cabotage traffic between two points
in the territory of the granting State on a service which originates or
terminates in the home country of the foreign carrier or outside the territory of
the granting State
ii. Stand Alone Cabotage the right or privilege of transporting cabotage traffic
of the granting state on a service performed entirely within the territory of the
granting state

Page 10

CHAPTER 8 Obligations of Carrier in Air Transportation

1. Extraordinary Diligence in Air Transportation
a. Airworthiness must be fit to transport goods and passengers, able to withstand the
rigors of the flight
i. Sec. 3 of the CAA of 2008: an aircraft, its engines, propellers, and other
components and accessories, are of proper design and construction being
consistent with accepted engineering practice and in accordance with
aerodynamic laws and aircraft science
ii. CAAPs rules and requirements:
1. Certification of aircraft and aeronautical components
2. Issuance of certificate of airworthiness and other certifications for
aeronautical products
3. Continued airworthiness of aircraft and aeronautical components
4. Rebuilding and modifications of aircraft and aeronautical components
5. Maintenance and preventive maintenance of aircraft and aeronautical
components
6. Aircraft inspection requirements
7. Air operator aircraft maintenance and inspection requirements
2. Tariff System
a. Tariff a rule or condition of air travel that regulates and binds the airline and
passengers
b. Developed and imposed by air carriers with the approval of the CAB
c. Provided for in the tickets that are binding although they are in the nature of
contracts of adhesion
3. Care of Baggage
a. Air Carriers are made liable in the ff:
i. The baggage of their passengers were either damaged or its contents were
lost or stolen
ii. The baggage were transported or diverted to another place
iii. In case of off-loading of baggage
iv. When there was delay in the delivery of baggage
v. If the baggage is lost altogether
b. Baggage or Cargo inside the Cabin (Part 8 of the Civil Aviation Regulations)
4. Duty to Passenger
a. The nature of the air carriers duty WRT passengers is to strictly require their
personnel to be more accommodating towards customers, passengers and the
general public.
i. Breach of contract failure without legal reason to comply with the terms of a
contract; failure, without legal excuse, to perform any promise which forms
the whole or part of the contract
ii. Physical Injuries to Passengers
iii. Downgrading and Upgrading of Passengers
1. Cathay Pacific Airways, Ltd. V. Sps. Vasquez (p. 355)
iv. Delay and Diversion of Flight
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1. Japan Airlines v. CA (p. 356)

2. Singapore Airlines, Ltd. V. Fernandez (p. 356) the delay or diversion
of flight due to FE does not terminate the contract of carriage
v. Rude Treatment
1. Northwest Airlines v. Catapang (p. 356)
vi. Overbooking
1. Northwest Airlines, Inc. v. Sps. Heshan (p. 357) folding seats
vii. Cancellation due to Engine Malfunction
1. Savellano v. Northwest Airlines (p. 358)
b. Denied Boarding Passengers
i. General rule: The air carrier is duty bound to accept and board a passenger
with confirmed tickets if the passenger presents himself on time in the airline
counter in the airport
ii. Civil Aviation Regulations an operator may deny transportation if a
passenger:
1. Refused to comply with the instructions regarding exit seating
restrictions prescribed by the CAAP
2. Has handicap that can be physically accommodated only by an exit
row seat
iii. Economic Regulation No. 7 of the Civil Aeronautics Board Boarding Priority
and Compensation for Denied Boarding, Delayed and Cancelled Flights
provides rules when the denial is due to honest mistakes
1. United Airlines, Inc. v. CA (p. 359)
2. Applicable to every Philippine and foreign air carrier WRT the ff:
a. Flights or portion of flight within the territory of the Philippines
b. Flights or portion of flights from the territory of the Philippines
operated by a domestic or foreign carrier
c. Denied boarding for reasons other than no-show or
cancellations of booking voluntarily made by passengers
d. Delayed flights
e. Cancelled flights
3. Priority Rules (Sec. 4, CAB Economic Regulation No. 7, p. 360-361)
4. Important Terms (Sec. 2 of ER No. 7)
a. Cancellation the act of calling off a flight with the uncertainty
of knowing when such flight will happen
b. Conditional reservation ticket a ticket sold by a domestic or
foreign carrier on the basis of a tentative listing on a specific
flight, on a specific date, and a class of service and for which
space is conditionally reserved
c. Confirmed reserved space space on a specific date and on a
specific flight and class of service of a carrier which has been
requested by a passenger and which the carrier or this agent
has verified, by appropriate notation on the ticket, as being
reserved for the accommodation of destination
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d. Delay the act of deferring a flight to a later time

e. Fare payment in consideration for the carriage of a
passenger
f. Regular fare any fare that is offered on a regular basis and
does not qualify as promotional or special fare such as free
tickets provided by airlines to passengers, tickets available for
free to employees, and tickets claimed based on mileage
g. Promotional fare any fare other than regular fare; it is a low,
special, excursion, or apex (advance purchase excursion fare)
fare which has more fences or restrictions than a regular fare
h. Scheduled domestic carrier a Philippine carrier granted a
Certificate of Public and Convenience and Necessity (CPCN)
to operate scheduled or regular services within points in the
Philippines or to and from the territory of the Philippines
i. Scheduled foreign carrier an air carrier who is not a citizen of
the Philippines, and/or an air carrier, at a point between the
place of departure and the place of destination
j. Stop-over a deliberate interruption of a journey by the
passenger, agreed to in advance by the carrier, at a point
between the place of departure and the place of destination
k. Value of the first remaining flight coupon the applicable oneway fare, including any surcharge, less any applicable
discount on the sector where boarding is denied
5. Other rules under ER No. 7 (p. 362 366)
c. Bill of Rights for Air Passengers
i. DTOC-DTI Joint Administrative Order No. 1, Series of 2012
1. An air carrier ticket constitutes a contract of carriage between an air
carrier and a passenger, whereby the air carrier, for consideration,
obligates itself to transport a passenger by air safely, efficiently and
conveniently along a stipulated route at a given date and time, subject
to certain conditions and restrictions
2. Seeks to infuse a certain measure of balance, fairness and
reasonableness between the precarious position of a passenger vis-vis the vast resources at the disposal of the air carrier
ii. Economic Regulation No. 9 (p. 367 382)
5. Inspection of Aircraft and Cargo
a. Duty to Inspect Aircraft
i. RA 6235 prohibits acts inimical to civil aviation
ii. Detention of Civil Aircraft by the Director General of the CAAP (Sec. 38, 39
RA 9497)
1. The aircraft may not be airworthy
2. The airman may not be qualified or physically or mentally capable for
the flight

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3. The operation would cause imminent danger to persons or property

on the ground
iii. Duty of the carrier to inspect the cargo and/or baggage
1. Saludo, Jr. v. CA (p. 383)
iv. Northwest Airlines v. Laya (p. 384) protection of passengers must take
precedence over convenience
b. Applicable Law (RA 6235)
i. Nocum v. Laguna Tayabas Bus Company (p. 387) only applicable in buses
or jeepneys
1. Passengers and goods in aircrafts are subject to rigorous inspection
ii. Rules for the carriage of Dangerous Goods by Air (Part 18 of the CAR)
1. Dangerous goods are articles or substances which are capable of
posing a risk to the health, safety, property, or the environment
2. 9 classes of Dangerous Goods
a. Explosives
b. Gases
c. Flammable liquids
d. Flammable solids
e. Oxidizing substances and organic peroxides
f. Toxic and infectious substances
g. Radioactive
h. Corrosive substances
i. Misc. dangerous substances and articles

Page 14

CHAPTER 9 The Warsaw Convention

1. Binding Effect
a. The WC to which the Republic is a party and which has the force and effect of
law in this country applies to all international transportation of persons, baggage
or goods performed by an aircraft gratuitously or for hire
b. Preamble: to regulate in a uniform manner the conditions of international
transportation by air
2. Purposes
a. Designed to protect and promote the international airline industry
b. To provide uniformity of rules governing claims arising from international air
travel; thus, it precludes a passenger from maintaining an action for personal
injury damages under local law when his or her claim does not satisfy the
conditions of liability under the Convention
3. Constitutionality
a. Santos III v. Northwest Orient Airlines (p. 390)
b. Doctrine of Rebus Sic Stantibus (unenforceability of a treaty due to
fundamentally challenged circumstances) does not apply.
4. Coverage
a. Liability of carrier in international air transportation (Art. 17 19)
i. The liability under Art. 17 does not arise if a passengers injury results
from the passengers own internal reaction to the usual, normal, and
expected operation of the aircraft. Such provision applies only if a
passengers injury is caused by an unexpected or unusual event or
happening that is external to the passenger.
b. Limitations (Art. 24)
5. Meaning of International Transportation
a. There is international transportation
i. The place of departure and the place of destination are within the
territories of two contracting countries regardless of whether or not there
was a break in the transportation or transshipment
ii. The place of departure and the place of destination are within the territory
of a single contracting country if there is an agreed stopping place within
a territory subject to the sovereignty, mandate or authority of another
power, even though the power is not a party to the convention
6. Period Covered By International Transportation
a. The period during which the baggage or goods are in charge of the carrier,
whether in an airport or on board an aircraft, or, in the case of a landing outside
an airport, in any place whatsoever
b. Does not cover any transportation by land, by sea, or by river performed outside
an airport
7. When International Carrier is Liable
a. If the passengers injury was inflicted
i. On board the aircraft
ii. In the course of any of the operations of embarking
iii. In the course of disembarking
iv. When there was or because of delay
b. WRT checked-in baggage or goods, the IC is liable if the damage occurred
during air transportation or when there is delay
8. Limit of Liability
a. Warsaw Convention
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i. GR: 250, 000 francs // XPN: by special contract agree to a higher limit
of liability
ii. WRT registered baggage and cargoes 250 francs per kg
iii. WRT objects that the passenger takes charge himself 5000 francs per
passenger
b. Guatemala Protocol (1971) - $100,000 per passenger, liability for baggage was
increased to $1000
c. Montreal Agreement and CAB Rules on Limit of Liability (Sec. 15 of ER No. 9 of
the CAB) (p.397)
i. Passenger injury US$ 75,000 (1966 Montreal Inter-Carrier Agreement)
d. Tariff Limitations
i. British Airways v. CA (p. 398)
ii. An air carrier is NOT liable for the loss of baggage in an amount in excess
of the limits specified in the tariff which was filed with the proper
authorities, such tariff being binding on the passenger regardless of the
passengers lack of knowledge thereof or assent thereto
e. Defenses against Limit of Liability
i. Not applicable in case of:
1. Willful misconduct the intentional performance of an act with
knowledge that the act will probably result in injury or damage, or
in some manner as to imply reckless disregard of the
consequences of its performance, or a deliberate purpose not to
discharge some duty necessary to safety
a. Hague Protocol a passenger could recover unlimited
damages upon proof of willful misconduct
b. In Re Korean Airlines Disaster (p. 402)
2. Gross negligence amounts to bad faith or willful misconduct
a. Sabena Belgian World Airlines v. CA (p. 400)
3. Absence of baggage check
a. PAL v. CA (p. 400)
4. If there was waiver on the part of the carrier
5. If the carrier is estopped from invoking the provision on limit of
liability
a. PAL v. CA and Gilda Mejia (p. 401)
9. Tort Liability An complaint for QD can still be filed even if the filing is beyond the
prescriptive period provided for under the Convention so long as it is within the
prescriptive period of 4 years under the CC
a. Alitalia v. IAC (p. 402 403)
b. United Airlines v. Uy (p. 403)
c. PAL v. Hon. Savillo (p. 403 404)
d. Lhuillier v. British Airways (p. 404 405)
10. Venue of Action (Art. 28(1) jurisdictional in character)
a. The court where the carrier is domiciled
b. The court where the carrier has its principal place of business
c. The court where the carrier has an establishment by which the contract has been
made
d. The court of the place of destination
11. Notice of Claim or Complain (Art. 26)
a. Must be filed with the ff. period
i. 3 days from receipt of the baggage
ii. 7 days from receipt of goods
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iii. 14 days, in case of delay, counted from the time the baggage was placed
at the disposal of the passenger
b. The complaint or notice of claim is a condition precedent. Reasons:
i. To inform the carrier that the cargo has been damaged and that it is being
charged with liability therefor
ii. To give it an opportunity to examine the nature and extent of the injury
c. When NOT applicable
i. If there is fraud on the part of the carrier
ii. If there is delay due to the acts or omissions of the carrier (PAL v. CA and
Gilda Mejia) (p. 409)
12. Prescription (Art. 29) within 2 years, reckoned from the date of arrival at the
destination, or from the date on which the aircraft ought to have arrived, or from the date
on which the carriage stopped
a. Nature of Prescriptive Period (United Airlines v. Uy) (p. 410)
b. Not applicable to other causes of action (ex. QD)
13. Successive Carriers
a. International Air Transport Association (IATA) the member is part of a general
pool partnership agreement wherein they act as agent of each other in the
issuance of tickets to contracted passengers to boost ticket sales worldwide and
at the same time provide passengers easy access to airlines which are otherwise
inaccessible in some parts of the world
i. Lufthansa German Airlines v. CA (p. 412)
b. Liability of Agent the fact that a successive carrier is considered an agent does
not necessarily excuse the agent from liability
c. American Airlines v. CA (p. 413 - 414)
14. Formalities (p. 414 419)
a. Effect of non-compliance
i. Non-application of the limit of liability
1. Ex. PAL v. CA the absence of a baggage check is a defense
against the limit of liability

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