G.R. No.
125524 August 25, 1999 GPC in the transaction as notify party was precisely to be notified of the arrival of the cargoes in
BENITO MACAM doing business under the name and style BEN-MAC ENTERPRISES, petitioner, vs.
COURT OF APPEALS, CHINA OCEAN SHIPPING CO., and/or WALLEM PHILIPPINES SHIPPING,
INC., respondents.
BELLOSILLO, J.:
On 4 April 1989 petitioner Benito Macam, doing business under the name and style Ben-Mac Enterprises,
shipped on board the vessel Nen Jiang, owned and operated by respondent China Ocean Shipping Co.,
through local agent respondent Wallem Philippines Shipping, Inc. (hereinafter WALLEM), 3,500 boxes of
watermelons valued at US$5,950.00 covered by Bill of Lading No. HKG 99012 and exported through
Letter of Credit No. HK 1031/30 issued by National Bank of Pakistan, Hongkong (hereinafter PAKISTAN
BANK) and 1,611 boxes of fresh mangoes with a value of US$14,273.46 covered by Bill of Lading No. HKG
99013 and exported through Letter of Credit No. HK 1032/30 also issued by PAKISTAN BANK. The Bills of
Lading contained the following pertinent provision: "One of the Bills of Lading must be surrendered duly
endorsed in exchange for the goods or delivery order.1 The shipment was bound for Hongkong with
PAKISTAN BANK as consignee and Great Prospect Company of Kowloon, Hongkong (hereinafter GPC) as
notify party.
On 6 April 1989, per letter of credit requirement, copies of the bills of lading and commercial invoices
were submitted to petitioner's depository bank, Consolidated Banking Corporation (hereinafter
SOLIDBANK), which paid petitioner in advance the total value of the shipment of US$20,223.46.
Upon arrival in Hongkong, the shipment was delivered by respondent WALLEM directly to GPC, not to
PAKISTAN BANK, and without the required bill of lading having been surrendered. Subsequently, GPC
failed to pay PAKISTAN BANK such that the latter, still in possession of the original bills of lading, refused
to pay petitioner through SOLIDBANK. Since SOLIDBANK already pre-paid petitioner the value of the
shipment, it demanded payment from respondent WALLEM through five (5) letters but was refused.
Petitioner was thus allegedly constrained to return the amount involved to SOLIDBANK, then demanded
payment from respondent WALLEM in writing but to no avail.
On 25 September 1991 petitioner sought collection of the value of the shipment of US$20,223.46 or its
equivalent of P546,033.42 from respondents before the Regional Trial Court of Manila, based on delivery
of the shipment to GPC without presentation of the bills of lading and bank guarantee.
Respondents contended that the shipment was delivered to GPC without presentation of the bills of
lading and bank guarantee per request of petitioner himself because the shipment consisted of
perishable goods. The telex dated 5 April 1989 conveying such request read —
AS PER SHPR'S REQUEST KINDLY ARRANGE DELIVERY OF A/M SHIPT TO RESPECTIVE CNEES
WITHOUT PRESENTATION OF OB/L2 and bank guarantee since for prepaid shipt ofrt charges
already fully paid our end . . . .3
Respondents explained that it is a standard maritime practice, when immediate delivery is of the
essence, for the shipper to request or instruct the carrier to deliver the goods to the buyer upon arrival
at the port of destination without requiring presentation of the bill of lading as that usually takes time.
As proof thereof, respondents apprised the trial court that for the duration of their two-year business
relationship with petitioner concerning similar shipments to GPC deliveries were effected without
presentation of the bills of lading.4 Respondents advanced next that the refusal of PAKISTAN BANK to
pay the letters of credit to SOLIDBANK was due to the latter's failure to submit a Certificate of Quantity
and Quality. Respondents counterclaimed for attorney's fees and costs of suit.
On 14 May 1993 the trial court ordered respondents to pay, jointly and severally, the following amounts:
(1) P546,033.42 plus legal interest from 6 April 1989 until full payment; (2) P10,000.00 as attorney's fees;
and, (3) the costs. The counterclaims were dismissed for lack of merit.5 The trial court opined that
respondents breached the provision in the bill of lading requiring that "one of the Bills of Lading must
be surrendered duly endorsed in exchange for the goods or delivery order," when they released the
shipment to GPC without presentation of the bills of lading and the bank guarantee that should have
been issued by PAKISTAN BANK in lieu of the bills of lading. The trial court added that the shipment
should not have been released to GPC at all since the instruction contained in the telex was to arrange
delivery to the respective consignees and not to any party. The trial court observed that the only role of
Hongkong so it could in turn duly advise the consignee.
Respondent Court of Appeals appreciated the evidence in a different manner. According to it, as
established by previous similar transactions between the parties, shipped cargoes were sometimes
actually delivered not to the consignee but to notify party GPC without need of the bills of lading or bank
guarantee.6 Moreover, the bills of lading were viewed by respondent court to have been properly
superseded by the telex instruction and to implement the instruction, the delivery of the shipment must
be to GPC, the real importer/buyer of the goods as shown by the export invoices, 7 and not to PAKISTAN
BANK since the latter could very well present the bills of lading in its possession; likewise, if it were the
PAKISTAN BANK to which the cargoes were to be strictly delivered it would no longer be proper to
require a bank guarantee. Respondent court noted that besides, GPC was listed as a consignee in the
telex. It observed further that the demand letter of petitioner to respondents never complained of
misdelivery of goods. Lastly, respondent court found that petitioner's claim of having reimbursed the
amount involved to SOLIDBANK was unsubstantiated. Thus, on 13 March 1996 respondent court set
aside the decision of the trial court and dismissed the complaint together with the counterclaims. 8 On 5
July 1996 reconsideration was denied.9
Petitioner submits that the fact that the shipment was not delivered to the consignee as stated in the
bill of lading or to a party designated or named by the consignee constitutes a misdelivery thereof.
Moreover, petitioner argues that from the text of the telex, assuming there was such an instruction, the
delivery of the shipment without the required bill of lading or bank guarantee should be made only to
the designated consignee, referring to PAKISTAN BANK.
We are not persuaded. The submission of petitioner that "the fact that the shipment was not delivered
to the consignee as stated in the Bill of Lading or to a party designated or named by the consignee
constitutes a misdelivery thereof" is a deviation from his cause of action before the trial court. It is clear
from the allegation in his complaint that it does not deal with misdelivery of the cargoes but of delivery
to GPC without the required bills of lading and bank guarantee —
6. The goods arrived in Hongkong and were released by the defendant Wallem directly to the
buyer/notify party, Great Prospect Company and not to the consignee, the National Bank of
Pakistan, Hongkong, without the required bills of lading and bank guarantee for the release
of the shipment issued by the consignee of the goods . . . .10
Even going back to an event that transpired prior to the filing of the present case or when petitioner
wrote respondent WALLEM demanding payment of the value of the cargoes, misdelivery of the cargoes
did not come into the picture —
We are writing you on behalf of our client, Ben-Mac Enterprises who informed us that Bills of
Lading No. 99012 and 99013 with a total value of US$20,223.46 were released to Great
Prospect, Hongkong without the necessary bank guarantee. We were further informed that
the consignee of the goods, National Bank of Pakistan, Hongkong, did not release or endorse
the original bills of lading. As a result thereof, neither the consignee, National Bank of
Pakistan, Hongkong, nor the importer, Great Prospect Company, Hongkong, paid our client
for the goods . . . .11
At any rate, we shall dwell on petitioner's submission only as a prelude to our discussion on the imputed
liability of respondents concerning the shipped goods. Article 1736 of the Civil Code provides —
Art. 1736. The extraordinary responsibility of the common carriers lasts from the time the
goods are unconditionally placed in the possession of, and received by the carrier for
transportation until the same are delivered, actually or constructively, by the carrier to the
consignee, or to the person who has a right to receive them, without prejudice to the
provisions of article 1738.12
We emphasize that the extraordinary responsibility of the common carriers lasts until actual or
constructive delivery of the cargoes to the consignee or to the person who has a right to receive them.
PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was the notify party.
However, in the export invoices GPC was clearly named as buyer/importer. Petitioner also referred to
GPC as such in his demand letter to respondent WALLEM and in his complaint before the trial court. This
Civil Code (Carriage of Goods) | Page 1 of 28
premise draws us to conclude that the delivery of the cargoes to GPC as buyer/importer which,
conformably with Art. 1736 had, other than the consignee, the right to receive them 14 was proper.
The real issue is whether respondents are liable to petitioner for releasing the goods to GPC without the
bills of lading or bank guarantee.
Respondents submitted in evidence a telex dated 5 April 1989 as basis for delivering the cargoes to GPC
without the bills of lading and bank guarantee. The telex instructed delivery of various shipments to the
respective consignees without need of presenting the bill of lading and bank guarantee per the
respective shipper's request since "for prepaid shipt ofrt charges already fully paid." Petitioner was
named therein as shipper and GPC as consignee with respect to Bill of Lading Nos. HKG 99012 and HKG
99013. Petitioner disputes the existence of such instruction and claims that this evidence is self-serving.
From the testimony of petitioner, we gather that he has been transacting with GPC as buyer/importer
for around two (2) or three (3) years already. When mangoes and watermelons are in season, his
shipment to GPC using the facilities of respondents is twice or thrice a week. The goods are released to
GPC. It has been the practice of petitioner to request the shipping lines to immediately release
perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his
"people." In transactions covered by a letter of credit, bank guarantee is normally required by the
shipping lines prior to releasing the goods. But for buyers using telegraphic transfers, petitioner
dispenses with the bank guarantee because the goods are already fully paid. In his several years of
business relationship with GPC and respondents, there was not a single instance when the bill of lading
was first presented before the release of the cargoes. He admitted the existence of the telex of 3 July
1989 containing his request to deliver the shipment to the consignee without presentation of the bill of
lading15 but not the telex of 5 April 1989 because he could not remember having made such request.
Consider pertinent portions of petitioner's testimony —
Q: Are you aware of any document which would indicate or show that your request to the
defendant Wallem for the immediate release of your fresh fruits, perishable goods, to Great
Prospect without the presentation of the original Bill of Lading?
A: Yes, by telegraphic transfer, which means that it is fully paid. And I requested immediate
release of the cargo because there was immediate payment.
Q: And you are referring, therefore, to this copy Telex release that you mentioned where your
Company's name appears Ben-Mac?
Atty. Hernandez: Just for the record, Your Honor, the witness is showing a Bill of
Lading referring to SKG (sic) 93023 and 93026 with Great Prospect Company.
Atty. Ventura:
Q: Is that the telegraphic transfer?
A: Yes, actually, all the shippers partially request for the immediate release of the goods when
they are perishable. I thought Wallem Shipping Lines is not neophyte in the business. As far
as LC is concerned, Bank guarantee is needed for the immediate release of the goods . . . . 15
Q: Mr. Witness, you testified that if is the practice of the shipper of the perishable goods to
ask the shipping lines to release immediately the shipment. Is that correct?
A: Yes, sir.
Q: Now, it is also the practice of the shipper to allow the shipping lines to release the
perishable goods to the importer of goods without a Bill of Lading or Bank guarantee?
A: No, it cannot be without the Bank Guarantee.
Atty. Hernandez:
Q: Can you tell us an instance when you will allow the release of the perishable goods by the
shipping lines to the importer without the Bank guarantee and without the Bill of Lading?
A: As far as telegraphic transfer is concerned.
Q: Can you explain (to) this Honorable Court what telegraphic transfer is?
A: Telegraphic transfer, it means advance payment that I am already fully paid . . . .
Q: Mr. Macam, with regard to Wallem and to Great Prospect, would you know and can you
recall that any of your shipment was released to Great Prospect by Wallem through
telegraphic transfer?
A: I could not recall but there were so many instances sir.
Q: Mr. Witness, do you confirm before this Court that in previous shipments of your goods
through Wallem, you requested Wallem to release immediately your perishable goods to the
buyer?
A: Yes, that is the request of the shippers of the perishable goods . . . .16
Q: Now, Mr. Macam, if you request the Shipping Lines for the release of your goods
immediately even without the presentation of OBL, how do you course it?
A: Usually, I call up the Shipping Lines, sir . . . .17
Q: You also testified you made this request through phone calls. Who of you talked whenever
you made such phone call?
A: Mostly I let my people to call, sir. (sic)
Q: So everytime you made a shipment on perishable goods you let your people to call? (sic)
A: Not everytime, sir.
Q: You did not make this request in writing?
A: No, sir. I think I have no written request with Wallem . . . .18
Against petitioner's claim of "not remembering" having made a request for delivery of subject cargoes
to GPC without presentation of the bills of lading and bank guarantee as reflected in the telex of 5 April
1989 are damaging disclosures in his testimony. He declared that it was his practice to ask the shipping
lines to immediately release shipment of perishable goods through telephone calls by himself or his
"people." He no longer required presentation of a bill of lading nor of a bank guarantee as a condition
to releasing the goods in case he was already fully paid. Thus, taking into account that subject shipment
consisted of perishable goods and SOLIDBANK pre-paid the full amount of the value thereof, it is not
hard to believe the claim of respondent WALLEM that petitioner indeed requested the release of the
goods to GPC without presentation of the bills of lading and bank guarantee.
The instruction in the telex of 5 April 1989 was "to deliver the shipment to respective consignees." And
so petitioner argues that, assuming there was such an instruction, the consignee referred to was
PAKISTAN BANK. We find the argument too simplistic. Respondent court analyzed the telex in its entirety
and correctly arrived at the conclusion that the consignee referred to was not PAKISTAN BANK but GPC
—
There is no mistake that the originals of the two (2) subject Bills of Lading are still in the
possession of the Pakistani Bank. The appealed decision affirms this fact. Conformably, to
implement the said telex instruction, the delivery of the shipment must be to GPC, the notify
party or real importer/buyer of the goods and not the Pakistani Bank since the latter can very
well present the original Bills of Lading in its possession. Likewise, if it were the Pakistani Bank
to whom the cargoes were to be strictly delivered, it will no longer be proper to require a bank
guarantee as a substitute for the Bill of Lading. To construe otherwise will render meaningless
the telex instruction. After all, the cargoes consist of perishable fresh fruits and immediate
delivery thereof to the buyer/importer is essentially a factor to reckon with. Besides, GPC is
listed as one among the several consignees in the telex (Exhibit 5-B) and the instruction in the
telex was to arrange delivery of A/M shipment (not any party) to respective consignees
without presentation of OB/L and bank guarantee . . . .20
Apart from the foregoing obstacles to the success of petitioner's cause, petitioner failed to substantiate
his claim that he returned to SOLIDBANK the full amount of the value of the cargoes. It is not far-fetched
to entertain the notion, as did respondent court, that he merely accommodated SOLIDBANK in order to
recover the cost of the shipped cargoes from respondents. We note that it was SOLIDBANK which initially
demanded payment from respondents through five (5) letters. SOLIDBANK must have realized the
absence of privity of contract between itself and respondents. That is why petitioner conveniently took
the cudgels for the bank.
Civil Code (Carriage of Goods) | Page 2 of 28
In view of petitioner's utter failure to establish the liability of respondents over the cargoes, no reversible
error was committed by respondent court in ruling against him.
WHEREFORE, the petition is DENIED. The decision of respondent Court of Appeals of 13 March 1996
dismissing the complaint of petitioner Benito Macam and the counterclaims of respondents China Ocean
Shipping Co. and/or Wallem Philippines Shipping, Inc., as well as its resolution of 5 July 1996 denying
reconsideration, is AFFIRMED.1âwphi1.nêt
SO ORDERED.
G.R. L-No. 4378 August 18, 1909
CHAN KEEP, ET AL., plaintiffs-appellees, vs. LEON CHAN GIOCO, ET AL., defendants-appellants.
CARSON, J.:
This is an appeal taken by the defendants, Leon Chan Gioco, from a judgment of the Court of First
Instance of the Province of La Union in favor of the plaintiffs in an action to recover the value of
120 cavanes of rice, which plaintiffs claim to have delivered to defendants upon a contract for its
transportation by boat ( parao) from the port of Luna, in the Province of La Union, to the port of San
Fernando, in the same province, in consideration of the sum of twenty-five centavos per cavan; the rice,
as it is alleged, having been lost through the negligence, carelessness, and lack of due precaution taken
by the defendants in the management of the boat on which it was being transported, as result of which
the boat sank as she entered the port of San Fernando, on the night of the 8th of April, 1907.
Leon Chan Gioco denied having entered into the transportation contract, as allegedly by the plaintiffs,
and the testimony introduced by plaintiffs and defendants as to the execution of the contract with this
defendant is, as stated by the trial court in its decision, contradictory in the extreme; in our opinion,
however, the weight of the evidence sustains the finding of the trial judge that plaintiffs succeeded in
establishing the transportation contract set out in the complaint, and the delivery of the rice to the
defendant Leon Chan Gioco and his codefendant, Anastasio Atregenio, the latter being the patron or
captain of the boat on which the rice was loaded, employed as such by Leon Chan Gioco.
Counsel for appellants contends that the loss of the rice was due to the sinking of the boat on which it
was loaded, as a result of a strong wind which struck her as she was entering the port of San Fernando;
and that appellants should not be held responsible therefor, the loss having resulted from an act of God
( fuerza mayor) or an unavoidable accident (caso fortuíto), and without blame upon their part.
In support of this contention, they cite article 1602 of the Civil Code, which is as follows:
"Carriers (by land or sea) are also responsible for looses and damages of the articles intrusted to them,
unless they prove that the loss or damage was the result of unavoidable accident (caso fortuíto) or an
act of God ( fuerza mayor)."
We do not think, however, that the evidence in support of appellants' claim that the loss of the rice was
the result of an act of God or an unavoidable accident is satisfactorily established; and, as appears from
an examination of the above-cited article of the code, the burden of proof in this regard rested upon the
defendants.
The only evidence in support of this contention is the testimony of the captain and one of the members
of the crew, from which it appears that about 10 o'clock at night, when the boat laden with rice arrived
in front of the bouy just outside the harbor or port of San Fernando, the wind was blowing strong
( fuerte); that while changing the course to enter the harbor, the wind blew the boat over on one side
so that she shipped so much water that the crew were compelled to strike sail, cast anchor, and escape
to shore by swimming with the aid of the oars; and that, having been abandoned in that condition, the
running of the tide aided the wind in throwing the boat still further upon one side and swamped her.
Neither of these witnesses pretend that at the time when the disaster occurred there was a storm raging
or that the seas were running dangerously high, and we are satisfied from their testimony of the agent
of the Weather Bureau stationed at San Fernando, which was introduced by the plaintiffs, that, while
there may have been a strong wind moving on the night in question, there was no such heavy wind or
violent storm blowing as would unavoidably swamp a boat manned by a capable crew, commanded by
a careful navigator, and properly equipped for sailing the high seas.
It not having been otherwise expressly stipulated, it is to be presumed that the owner of the boat, Leon
Chan Gioco, when he contracted to transport the rice in question over the high seas, obligated himself
to furnish a boat suitable for the work which he undertook to perform, and a capable crew to man her
(In the matter of the "Caledonia," 157 U. S., 124; The "Edwin I. Morrison," 153 U. S., 199); and the mere
fact that a strong wind was blowing when the boat changed its course is not in itself sufficient to excuse
her owners for losses incurred as a result of so poor an execution of this maneuver as to result in sinking
her. In the absence of proof of such a violent storm or such an exceptionally high sea that, despite the
proper equipment of the boat and the exercise of due skill and diligence by the patron and crew, those
in charge of the boat were overpowered by the force of the elements, we do not think that the sinking
of the boat can justly be said to have been the result of an act of God or of an unavoidable accident; the
blowing of strong winds must always be anticipated by men who go down into the sea in ships, and in
the absence of evidence of some unusual intervening cause, we must hold that the exercise of due
diligence in the performance of their duty by the patron and the members of his crew, had they been
reasonably expert as seafaring men, could have and would have avoided the accident which actually
occurred, provided the boat was suited to the work required of her.
We would not be understood as holding that ships and boats are not sometimes lost as a result of
unavoidable accident or an act of God when storms are not raging and even when the sea is
comparatively calm. Instances of such losses are of frequent occurrence. Losses resulting from an
accident caused by a sudden and unexpected gust of wind have under some circumstances been held to
be attributable to an act of God (11 Ill., 519; 95 Penn., 287; and the books contain many instances of
losses attributed to an act of God or inevitable accident, other than those resulting from the action of
storms and high seas, but it will be found that in all such cases the evidence introduced at the trial
sustains a finding that the loss was due to exceptional circumstances or conditions, beyond the control
of those who would otherwise be responsible for the loss, notwithstanding the exercise of due diligence,
foresight, pains and care to avoid it; and, as has been said, mere proof that a strong wind is blowing
when a properly manned and equipped sailing boat tacks its course is not sufficient to sustain such a
finding.
The judgment appealed from should be and is hereby affirmed, with costs against the appellants.
Arellano, C. J., Torres, Johnson, and Moreland, JJ., concur.
G.R. No. L-69044 May 29, 1987
EASTERN SHIPPING LINES, INC., petitioner, vs. INTERMEDIATE APPELLATE COURT and DEVELOPMENT
INSURANCE & SURETY CORPORATION, respondents.
No. 71478 May 29, 1987
EASTERN SHIPPING LINES, INC., petitioner, vs. THE NISSHIN FIRE AND MARINE INSURANCE CO., and
DOWA FIRE & MARINE INSURANCE CO., LTD., respondents.
MELENCIO-HERRERA, J.:
These two cases, both for the recovery of the 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.
The basic facts are not in controversy:
In G.R. No. 69044, sometime in or prior to June, 1977, the M/S ASIATICA, a vessel operated by petitioner
Eastern Shipping Lines, Inc., (referred to hereinafter as Petitioner Carrier) loaded at Kobe, Japan for
transportation to Manila, 5,000 pieces of calorized lance pipes in 28 packages valued at P256,039.00
consigned to Philippine Blooming Mills Co., Inc., and 7 cases of spare parts valued at P92,361.75,
consigned to Central Textile Mills, Inc. Both sets of goods were insured against marine risk for their
stated value with respondent Development Insurance and Surety Corporation.
In G.R. No. 71478, during the same period, the same vessel took on board 128 cartons of garment fabrics
and accessories, in two (2) containers, consigned to Mariveles Apparel Corporation, and two cases of
surveying instruments consigned to Aman Enterprises and General Merchandise. The 128 cartons were
insured for their stated value by respondent Nisshin Fire & Marine Insurance Co., for US $46,583.00, and
the 2 cases by respondent Dowa Fire & Marine Insurance Co., Ltd., for US $11,385.00.
Civil Code (Carriage of Goods) | Page 3 of 28
Enroute for Kobe, Japan, to Manila, the vessel caught fire and sank, resulting in the total loss of ship and
cargo. The respective respondent Insurers paid the corresponding marine insurance values to the
consignees concerned and were thus subrogated unto the rights of the latter as the insured.
G.R. NO. 69044
On May 11, 1978, respondent Development Insurance & Surety Corporation (Development Insurance,
for short), having been subrogated unto the rights of the two insured companies, filed suit against
petitioner Carrier for the recovery of the amounts it had paid to the insured before the then Court of
First instance of Manila, Branch XXX (Civil Case No. 6087).
Petitioner-Carrier denied liability mainly on the ground that the loss was due to an extraordinary
fortuitous event, hence, it is not liable under the law.
On August 31, 1979, the Trial Court rendered judgment in favor of Development Insurance in the
amounts of P256,039.00 and P92,361.75, respectively, with legal interest, plus P35,000.00 as attorney's
fees and costs. Petitioner Carrier took an appeal to the then Court of Appeals which, on August 14, 1984,
affirmed.
Petitioner Carrier is now before us on a Petition for Review on Certiorari.
G.R. NO. 71478
On June 16, 1978, respondents Nisshin Fire & Marine Insurance Co. NISSHIN for short), and Dowa Fire &
Marine Insurance Co., Ltd. (DOWA, for brevity), as subrogees of the insured, filed suit against Petitioner
Carrier for the recovery of the insured value of the cargo lost with the then Court of First Instance of
Manila, Branch 11 (Civil Case No. 116151), imputing unseaworthiness of the ship and non-observance of
extraordinary diligence by petitioner Carrier.
Petitioner Carrier denied liability on the principal grounds that the fire which caused the sinking of the
ship is an exempting circumstance under Section 4(2) (b) of the Carriage of Goods by Sea Act (COGSA);
and that when the loss of fire is established, the burden of proving negligence of the vessel is shifted to
the cargo shipper.
On September 15, 1980, the Trial Court rendered judgment in favor of NISSHIN and DOWA in the
amounts of US $46,583.00 and US $11,385.00, respectively, with legal interest, plus attorney's fees of
P5,000.00 and costs. On appeal by petitioner, the then Court of Appeals on September 10, 1984,
affirmed with modification the Trial Court's judgment by decreasing the amount recoverable by DOWA
to US $1,000.00 because of $500 per package limitation of liability under the COGSA.
Hence, this Petition for Review on certiorari by Petitioner Carrier.
Both Petitions were initially denied for lack of merit. G.R. No. 69044 on January 16, 1985 by the First
Division, and G. R. No. 71478 on September 25, 1985 by the Second Division. Upon Petitioner Carrier's
Motion for Reconsideration, however, G.R. No. 69044 was given due course on March 25, 1985, and the
parties were required to submit their respective Memoranda, which they have done.
On the other hand, in G.R. No. 71478, Petitioner Carrier sought reconsideration of the Resolution
denying the Petition for Review and moved for its consolidation with G.R. No. 69044, the lower-
numbered case, which was then pending resolution with the First Division. The same was granted; the
Resolution of the Second Division of September 25, 1985 was set aside and the Petition was given due
course.
At the outset, we reject Petitioner Carrier's claim that it is not the operator of the M/S Asiatica but
merely a charterer thereof. We note that in G.R. No. 69044, Petitioner Carrier stated in its Petition:
There are about 22 cases of the "ASIATICA" pending in various courts where various
plaintiffs are represented by various counsel representing various consignees or
insurance companies. The common defendant in these cases is petitioner herein,
being the operator of said vessel. ... 1
Petitioner Carrier should be held bound to said admission. As a general rule, the facts alleged in a party's
pleading are deemed admissions of that party and binding upon it. 2 And an admission in one pleading
in one action may be received in evidence against the pleader or his successor-in-interest on the trial of
another action to which he is a party, in favor of a party to the latter action. 3
The threshold issues in both cases are: (1) which law should govern — the Civil Code provisions on
Common carriers or the Carriage of Goods by Sea Act? and (2) who has the burden of proof to show
negligence of the carrier?
On the Law Applicable
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. 4 As the cargoes in question were transported
from Japan to the Philippines, the liability of Petitioner Carrier is governed primarily by the Civil
Code. 5 However, in all matters not regulated by said Code, the rights and obligations of common carrier
shall be governed by the Code of Commerce and by special laws. 6 Thus, the Carriage of Goods by Sea
Act, a special law, is suppletory to the provisions of the Civil Code. 7
On the Burden of Proof
Under the Civil Code, common carriers, from the nature of their business and for reasons of public policy,
are bound to observe extraordinary diligence in the vigilance over goods, according to all the
circumstances of each case. 8 Common carriers are responsible for the loss, destruction, or deterioration
of the goods unless the same is due to any of the following causes only:
(1) Flood, storm, earthquake, lightning or other natural disaster or calamity;
xxx xxx xxx 9
Petitioner Carrier claims that the loss of the vessel by fire exempts it from liability under the phrase
"natural disaster or calamity. " However, we are of the opinion that fire may not be considered a natural
disaster or calamity. This must be so as it arises almost invariably from some act of man or by human
means. 10 It does not fall within the category of an act of God unless caused by lightning 11 or by other
natural disaster or calamity. 12 It may even be caused by the actual fault or privity of the carrier. 13
Article 1680 of the Civil Code, which considers fire as an extraordinary fortuitous event refers to leases
of rural lands where a reduction of the rent is allowed when more than one-half of the fruits have been
lost due to such event, considering that the law adopts a protection policy towards agriculture. 14
As the peril of the fire is not comprehended within the exception in Article 1734, supra, Article 1735 of
the Civil Code provides that all cases than those mention in Article 1734, the common carrier shall be
presumed to have been at fault or to have acted negligently, unless it proves that it has observed the
extraordinary deligence required by law.
In this case, the respective Insurers. as subrogees of the cargo shippers, have proven that the
transported goods have been lost. Petitioner Carrier has also proved that the loss was caused by fire.
The burden then is upon Petitioner Carrier to proved that it has exercised the extraordinary diligence
required by law. In this regard, the Trial Court, concurred in by the Appellate Court, made the following
Finding of fact:
The cargoes in question were, according to the witnesses defendant placed in hatches No, 2
and 3 cf the vessel, Boatswain Ernesto Pastrana noticed that smoke was coming out from
hatch No. 2 and hatch No. 3; that where the smoke was noticed, the fire was already big; that
the fire must have started twenty-four 24) our the same was noticed; that carbon dioxide was
ordered released and the crew was ordered to open the hatch covers of No, 2 tor
commencement of fire fighting by sea water: that all of these effort were not enough to
control the fire.
Pursuant to Article 1733, common carriers are bound to extraordinary diligence in the
vigilance over the goods. The evidence of the defendant did not show that extraordinary
vigilance was observed by the vessel to prevent the occurrence of fire at hatches numbers 2
and 3. Defendant's evidence did not likewise show he amount of diligence made by the crew,
on orders, in the care of the cargoes. What appears is that after the cargoes were stored in
the hatches, no regular inspection was made as to their condition during the voyage.
Consequently, the crew could not have even explain what could have caused the fire. The
defendant, in the Court's mind, failed to satisfactorily show that extraordinary vigilance and
care had been made by the crew to prevent the occurrence of the fire. The defendant, as a
common carrier, is liable to the consignees for said lack of deligence required of it under
Article 1733 of the Civil Code. 15
Civil Code (Carriage of Goods) | Page 4 of 28
Having failed to discharge the burden of proving that it had exercised the extraordinary diligence
required by law, Petitioner Carrier cannot escape liability for the loss of the cargo.
And even if fire were to be considered a "natural disaster" within the meaning of Article 1734 of the Civil
Code, it is required under Article 1739 of the same Code that the "natural disaster" must have been the
"proximate and only cause of the loss," and that the carrier has "exercised due diligence to prevent or
minimize the loss before, during or after the occurrence of the disaster. " This Petitioner Carrier has also
failed to establish satisfactorily.
Nor may Petitioner Carrier seek refuge from liability under the Carriage of Goods by Sea Act, It is
provided therein that:
Sec. 4(2). Neither the carrier nor the ship shall be responsible for loss or damage
arising or resulting from
(b) Fire, unless caused by the actual fault or privity of the carrier.
xxx xxx xxx
In this case, both the Trial Court and the Appellate Court, in effect, found, as a fact, that there was "actual
fault" of the carrier shown by "lack of diligence" in that "when the smoke was noticed, the fire was
already big; that the fire must have started twenty-four (24) hours before the same was noticed; " and
that "after the cargoes were stored in the hatches, no regular inspection was made as to their condition
during the voyage." The foregoing suffices to show that the circumstances under which the fire
originated and spread are such as to show that Petitioner Carrier or its servants were negligent in
connection therewith. Consequently, the complete defense afforded by the COGSA when loss results
from fire is unavailing to Petitioner Carrier.
On the US $500 Per Package Limitation:
Petitioner Carrier avers that its liability if any, should not exceed US $500 per package as provided in
section 4(5) of the COGSA, which reads:
(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or
damage to or in connection with the transportation of goods in an amount exceeding $500
per package lawful money of the United States, or in case of goods not shipped in packages,
per customary freight unit, or the equivalent of that sum in other currency, unless the nature
and value of such goods have been declared by the shipper before shipment and inserted in
bill of lading. This declaration if embodied in the bill of lading shall be prima facie evidence,
but all be conclusive on the carrier.
By agreement between the carrier, master or agent of the carrier, and the shipper another
maximum amount than that mentioned in this paragraph may be fixed: Provided, That such
maximum shall not be less than the figure above named. In no event shall the carrier be Liable
for more than the amount of damage actually sustained.
xxx xxx xxx
Article 1749 of the New Civil Code also allows the limitations of liability in this wise:
Art. 1749. A stipulation that the common carrier's liability as limited to the value of
the goods appearing in the bill of lading, unless the shipper or owner declares a
greater value, is binding.
It is to be noted that the Civil Code does not of itself limit the liability of the common carrier to a fixed
amount per package although the Code expressly permits a stipulation limiting such liability. Thus, the
COGSA which is suppletory to the provisions of the Civil Code, steps in and supplements the Code by
establishing a statutory provision limiting the carrier's liability in the absence of a declaration of a higher
value of the goods by the shipper in the bill of lading. The provisions of the Carriage of Goods by.Sea Act
on limited liability are as much a part of a bill of lading as though physically in it and as much a part
thereof as though placed therein by agreement of the parties. 16
In G.R. No. 69044, there is no stipulation in the respective Bills of Lading (Exhibits "C-2" and "I-3") 1 7
limiting the carrier's liability for the loss or destruction of the goods. Nor is there a declaration of a higher
value of the goods. Hence, Petitioner Carrier's liability should not exceed US $500 per package, or its
peso equivalent, at the time of payment of the value of the goods lost, but in no case "more than the
amount of damage actually sustained."
The actual total loss for the 5,000 pieces of calorized lance pipes was P256,039 (Exhibit "C"), which was
exactly the amount of the insurance coverage by Development Insurance (Exhibit "A"), and the amount
affirmed to be paid by respondent Court. The goods were shipped in 28 packages (Exhibit "C-2")
Multiplying 28 packages by $500 would result in a product of $14,000 which, at the current exchange
rate of P20.44 to US $1, would be P286,160, or "more than the amount of damage actually sustained."
Consequently, the aforestated amount of P256,039 should be upheld.
With respect to the seven (7) cases of spare parts (Exhibit "I-3"), their actual value was P92,361.75
(Exhibit "I"), which is likewise the insured value of the cargo (Exhibit "H") and amount was affirmed to
be paid by respondent Court. however, multiplying seven (7) cases by $500 per package at the present
prevailing rate of P20.44 to US $1 (US $3,500 x P20.44) would yield P71,540 only, which is the amount
that should be paid by Petitioner Carrier for those spare parts, and not P92,361.75.
In G.R. No. 71478, in so far as the two (2) cases of surveying instruments are concerned, the amount
awarded to DOWA which was already reduced to $1,000 by the Appellate Court following the statutory
$500 liability per package, is in order.
In respect of the shipment of 128 cartons of garment fabrics in two (2) containers and insured with
NISSHIN, the Appellate Court also limited Petitioner Carrier's liability to $500 per package and affirmed
the award of $46,583 to NISSHIN. it multiplied 128 cartons (considered as COGSA packages) by $500 to
arrive at the figure of $64,000, and explained that "since this amount is more than the insured value of
the goods, that is $46,583, the Trial Court was correct in awarding said amount only for the 128 cartons,
which amount is less than the maximum limitation of the carrier's liability."
We find no reversible error. The 128 cartons and not the two (2) containers should be considered as the
shipping unit.
In Mitsui & Co., Ltd. vs. American Export Lines, Inc. 636 F 2d 807 (1981), the consignees of tin ingots and
the shipper of floor covering brought action against the vessel owner and operator to recover for loss of
ingots and floor covering, which had been shipped in vessel — supplied containers. The U.S. District
Court for the Southern District of New York rendered judgment for the plaintiffs, and the defendant
appealed. The United States Court of Appeals, Second Division, modified and affirmed holding that:
When what would ordinarily be considered packages are shipped in a container supplied by
the carrier and the number of such units is disclosed in the shipping documents, each of those
units and not the container constitutes the "package" referred to in liability limitation
provision of Carriage of Goods by Sea Act. Carriage of Goods by Sea Act, 4(5), 46 U.S.C.A.&
1304(5).
Even if language and purposes of Carriage of Goods by Sea Act left doubt as to whether carrier-
furnished containers whose contents are disclosed should be treated as packages, the interest
in securing international uniformity would suggest that they should not be so treated.
Carriage of Goods by Sea Act, 4(5), 46 U.S.C.A. 1304(5).
... After quoting the statement in Leather's Best, supra, 451 F 2d at 815, that treating a
container as a package is inconsistent with the congressional purpose of establishing a
reasonable minimum level of liability, Judge Beeks wrote, 414 F. Supp. at 907 (footnotes
omitted):
Although this approach has not completely escaped criticism, there is,
nonetheless, much to commend it. It gives needed recognition to the
responsibility of the courts to construe and apply the statute as enacted,
however great might be the temptation to "modernize" or reconstitute
it by artful judicial gloss. If COGSA's package limitation scheme suffers
from internal illness, Congress alone must undertake the surgery. There
is, in this regard, obvious wisdom in the Ninth Circuit's conclusion in
Hartford that technological advancements, whether or not forseeable by
the COGSA promulgators, do not warrant a distortion or artificial
construction of the statutory term "package." A ruling that these large
Civil Code (Carriage of Goods) | Page 5 of 28
 reusable metal pieces of transport equipment qualify as COGSA
packages — at least where, as here, they were carrier owned and
supplied — would amount to just such a distortion.
Certainly, if the individual crates or cartons prepared by the shipper and
containing his goods can rightly be considered "packages" standing by
themselves, they do not suddenly lose that character upon being stowed
in a carrier's container. I would liken these containers to detachable
stowage compartments of the ship. They simply serve to divide the ship's
overall cargo stowage space into smaller, more serviceable loci.
Shippers' packages are quite literally "stowed" in the containers utilizing
stevedoring practices and materials analogous to those employed in
traditional on board stowage.
In Yeramex International v. S.S. Tando,, 1977 A.M.C. 1807 (E.D. Va.) rev'd on other
grounds, 595 F 2nd 943 (4 Cir. 1979), another district with many maritime cases
followed Judge Beeks' reasoning in Matsushita and similarly rejected the functional
economics test. Judge Kellam held that when rolls of polyester goods are packed
into cardboard cartons which are then placed in containers, the cartons and not
the containers are the packages.
xxx xxx xxx
The case of Smithgreyhound v. M/V Eurygenes, 18 followed the Mitsui test:
Eurygenes concerned a shipment of stereo equipment packaged by the shipper into
cartons which were then placed by the shipper into a carrier- furnished
container. The number of cartons was disclosed to the carrier in the bill of lading.
Eurygenes followed the Mitsui test and treated the cartons, not the container, as
the COGSA packages. However, Eurygenes indicated that a carrier could limit its
liability to $500 per container if the bill of lading failed to disclose the number of
cartons or units within the container, or if the parties indicated, in clear and
unambiguous language, an agreement to treat the container as the package.
(Admiralty Litigation in Perpetuum: The Continuing Saga of
Package Limitations and Third World Delivery Problems by
Chester D. Hooper & Keith L. Flicker, published in Fordham
International Law Journal, Vol. 6, 1982-83, Number 1)
(Emphasis supplied)
In this case, the Bill of Lading (Exhibit "A") disclosed the following data:
2 Containers
(128) Cartons)
Men's Garments Fabrics and Accessories Freight Prepaid
Say: Two (2) Containers Only.
Considering, therefore, that the Bill of Lading clearly disclosed the contents of the containers, the
number of cartons or units, as well as the nature of the goods, and applying the ruling in
the Mitsui and Eurygenes cases it is clear that the 128 cartons, not the two (2) containers should be
considered as the shipping unit subject to the $500 limitation of liability.
True, the evidence does not disclose whether the containers involved herein were carrier-furnished or
not. Usually, however, containers are provided by the carrier. 19 In this case, the probability is that they
were so furnished for Petitioner Carrier was at liberty to pack and carry the goods in containers if they
were not so packed. Thus, at the dorsal side of the Bill of Lading (Exhibit "A") appears the following
stipulation in fine print:
11. (Use of Container) Where the goods receipt of which is acknowledged on the
face of this Bill of Lading are not already packed into container(s) at the time of
receipt, the Carrier shall be at liberty to pack and carry them in any type of
container(s).
The foregoing would explain the use of the estimate "Say: Two (2) Containers Only" in the Bill of Lading,
meaning that the goods could probably fit in two (2) containers only. It cannot mean that the shipper
had furnished the containers for if so, "Two (2) Containers" appearing as the first entry would have
sufficed. and if there is any ambiguity in the Bill of Lading, it is a cardinal principle in the construction of
contracts that the interpretation of obscure words or stipulations in a contract shall not favor the party
who caused the obscurity. 20 This applies with even greater force in a contract of adhesion where a
contract is already prepared and the other party merely adheres to it, like the Bill of Lading in this case,
which is draw. up by the carrier. 21
On Alleged Denial of Opportunity to Present Deposition of Its Witnesses: (in G.R. No. 69044 only)
Petitioner Carrier claims that the Trial Court did not give it sufficient time to take the depositions of its
witnesses in Japan by written interrogatories.
We do not agree. petitioner Carrier was given- full opportunity to present its evidence but it failed to do
so. On this point, the Trial Court found:
xxx xxx xxx
Indeed, since after November 6, 1978, to August 27, 1979, not to mention the time from June
27, 1978, when its answer was prepared and filed in Court, until September 26, 1978, when
the pre-trial conference was conducted for the last time, the defendant had more than nine
months to prepare its evidence. Its belated notice to take deposition on written
interrogatories of its witnesses in Japan, served upon the plaintiff on August 25th, just two
days before the hearing set for August 27th, knowing fully well that it was its undertaking on
July 11 the that the deposition of the witnesses would be dispensed with if by next time it had
not yet been obtained, only proves the lack of merit of the defendant's motion for
postponement, for which reason it deserves no sympathy from the Court in that regard. The
defendant has told the Court since February 16, 1979, that it was going to take the deposition
of its witnesses in Japan. Why did it take until August 25, 1979, or more than six months, to
prepare its written interrogatories. Only the defendant itself is to blame for its failure to
adduce evidence in support of its defenses.
xxx xxx xxx 22
Petitioner Carrier was afforded ample time to present its side of the case. 23 It cannot complain now that
it was denied due process when the Trial Court rendered its Decision on the basis of the evidence
adduced. What due process abhors is absolute lack of opportunity to be heard. 24
On the Award of Attorney's Fees:
Petitioner Carrier questions the award of attorney's fees. In both cases, respondent Court affirmed the
award by the Trial Court of attorney's fees of P35,000.00 in favor of Development Insurance in G.R. No.
69044, and P5,000.00 in favor of NISSHIN and DOWA in G.R. No. 71478.
Courts being vested with discretion in fixing the amount of attorney's fees, it is believed that the amount
of P5,000.00 would be more reasonable in G.R. No. 69044. The award of P5,000.00 in G.R. No. 71478 is
affirmed.
WHEREFORE, 1) in G.R. No. 69044, the judgment is modified in that petitioner Eastern Shipping Lines
shall pay the Development Insurance and Surety Corporation the amount of P256,039 for the twenty-
eight (28) packages of calorized lance pipes, and P71,540 for the seven (7) cases of spare parts, with
interest at the legal rate from the date of the filing of the complaint on June 13, 1978, plus P5,000 as
attorney's fees, and the costs.
2) In G.R.No.71478,the judgment is hereby affirmed.
SO ORDERED.
Civil Code (Carriage of Goods) | Page 6 of 28
G.R. No. 143133 June 5, 2002
BELGIAN OVERSEAS CHARTERING AND SHIPPING N.V. and JARDINE DAVIES TRANSPORT SERVICES,
INC., petitioners, vs. PHILIPPINE FIRST INSURANCE CO., INC., respondents.
PANGANIBAN, J.:
Proof of the delivery of goods in good order to a common carrier and of their arrival in bad order at their
destination constitutes prima facie fault or negligence on the part of the carrier. If no adequate
explanation is given as to how the loss, the destruction or the deterioration of the goods happened, the
carrier shall be held liable therefor.
Statement of the Case
Before us is a Petition for Review under Rule 45 of the Rules of Court, assailing the July 15, 1998
Decision1 and the May 2, 2000 Resolution2 of the Court of Appeals3 (CA) in CA-GR CV No. 53571. The
decretal portion of the Decision reads as follows:
"WHEREFORE, in the light of the foregoing disquisition, the decision appealed from is hereby
REVERSED and SET ASIDE. Defendants-appellees are ORDERED to jointly and severally pay
plaintiffs-appellants the following:
'1) FOUR Hundred Fifty One Thousand Twenty-Seven Pesos and 32/100
(P451,027.32) as actual damages, representing the value of the damaged cargo,
plus interest at the legal rate from the time of filing of the complaint on July 25,
1991, until fully paid;
'2) Attorney's fees amounting to 20% of the claim; and
'3) Costs of suit.'"4
The assailed Resolution denied petitioner's Motion for Reconsideration.
The CA reversed the Decision of the Regional Trial Court (RTC) of Makati City (Branch 134), which had
disposed as follows:
"WHEREFORE, in view of the foregoing, judgment is hereby rendered, dismissing the
complaint, as well as defendant's counterclaim."5
The Facts
The factual antecedents of the case are summarized by the Court of Appeals in this wise:
"On June 13, 1990, CMC Trading A.G. shipped on board the M/V 'Anangel Sky' at Hamburg,
Germany 242 coils of various Prime Cold Rolled Steel sheets for transportation to Manila consigned
to the Philippine Steel Trading Corporation. On July 28, 1990, M/V Anangel Sky arrived at the port
of Manila and, within the subsequent days, discharged the subject cargo. Four (4) coils were found
to be in bad order B.O. Tally sheet No. 154974. Finding the four (4) coils in their damaged state to
be unfit for the intended purpose, the consignee Philippine Steel Trading Corporation declared the
same as total loss.1âwphi1.nêt
"Despite receipt of a formal demand, defendants-appellees refused to submit to the consignee's
claim. Consequently, plaintiff-appellant paid the consignee five hundred six thousand eighty six &
50/100 pesos (P506,086.50), and was subrogated to the latter's rights and causes of action against
defendants-appellees. Subsequently, plaintiff-appellant instituted this complaint for recovery of
the amount paid by them, to the consignee as insured.
"Impugning the propriety of the suit against them, defendants-appellees imputed that the damage
and/or loss was due to pre-shipment damage, to the inherent nature, vice or defect of the goods,
or to perils, danger and accidents of the sea, or to insufficiency of packing thereof, or to the act or
omission of the shipper of the goods or their representatives. In addition thereto, defendants-
appellees argued that their liability, if there be any, should not exceed the limitations of liability
provided for in the bill of lading and other pertinent laws. Finally, defendants-appellees averred
that, in any event, they exercised due diligence and foresight required by law to prevent any
damage/loss to said shipment."6
Ruling of the Trial Court
The RTC dismissed the Complaint because respondent had failed to prove its claims with the quantum
of proof required by law.7
It likewise debunked petitioners' counterclaim, because respondent's suit was not manifestly frivolous
or primarily intended to harass them.8
Ruling of the Court of Appeals
In reversing the trial court, the CA ruled that petitioners were liable for the loss or the damage of the
goods shipped, because they had failed to overcome the presumption of negligence imposed on
common carriers.
The CA further held as inadequately proven petitioners' claim that the loss or the deterioration of the
goods was due to pre-shipment damage.9 It likewise opined that the notation "metal envelopes rust
stained and slightly dented" placed on the Bill of Lading had not been the proximate cause of the damage
to the four (4) coils.10
As to the extent of petitioners' liability, the CA held that the package limitation under COGSA was not
applicable, because the words "L/C No. 90/02447" indicated that a higher valuation of the cargo had
been declared by the shipper. The CA, however, affirmed the award of attorney's fees.
Hence, this Petition.11
Issues
In their Memorandum, petitioners raise the following issues for the Court's consideration:
I. "Whether or not plaintiff by presenting only one witness who has never seen the subject
shipment and whose testimony is purely hearsay is sufficient to pave the way for the
applicability of Article 1735 of the Civil Code;
II. "Whether or not the consignee/plaintiff filed the required notice of loss within the time
required by law;
III. "Whether or not a notation in the bill of lading at the time of loading is sufficient to show
pre-shipment damage and to exempt herein defendants from liability;
IV. "Whether or not the "PACKAGE LIMITATION" of liability under Section 4 (5) of COGSA is
applicable to the case at bar."12
In sum, the issues boil down to three:
1. Whether petitioners have overcome the presumption of negligence of a common carrier
2. Whether the notice of loss was timely filed
3. Whether the package limitation of liability is applicable
This Court's Ruling
The Petition is partly meritorious.
First Issue:
Proof of Negligence
Petitioners contend that the presumption of fault imposed on common carriers should not be applied
on the basis of the lone testimony offered by private respondent. The contention is untenable.
Well-settled is the rule that common carriers, from the nature of their business and for reasons of public
policy, are bound to observe extraordinary diligence and vigilance with respect to the safety of the goods
and the passengers they transport.13 Thus, common carriers are required to render service with the
greatest skill and foresight and "to use all reason[a]ble means to ascertain the nature and characteristics
of the goods tendered for shipment, and to exercise due care in the handling and stowage, including
such methods as their nature requires."14 The extraordinary responsibility lasts from the time the goods
are unconditionally placed in the possession of and received for transportation by the carrier until they
are delivered, actually or constructively, to the consignee or to the person who has a right to receive
them.15
This strict requirement is justified by the fact that, without a hand or a voice in the preparation of such
contract, the riding public enters into a contract of transportation with common carriers.16 Even if it
wants to, it cannot submit its own stipulations for their approval. 17 Hence, it merely adheres to the
agreement prepared by them.
Owing to this high degree of diligence required of them, common carriers, as a general rule, are
presumed to have been at fault or negligent if the goods they transported deteriorated or got lost or
Civil Code (Carriage of Goods) | Page 7 of 28
destroyed.18 That is, unless they prove that they exercised extraordinary diligence in transporting the
goods.19 In order to avoid responsibility for any loss or damage, therefore, they have the burden of
proving that they observed such diligence.20
However, the presumption of fault or negligence will not arise21 if the loss is due to any of the following
causes: (1) flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) an act of the
public enemy in war, whether international or civil; (3) an act or omission of the shipper or owner of the
goods; (4) the character of the goods or defects in the packing or the container; or (5) an order or act of
competent public authority.22 This is a closed list. If the cause of destruction, loss or deterioration is
other than the enumerated circumstances, then the carrier is liable therefor. 23
Corollary to the foregoing, mere proof of delivery of the goods in good order to a common carrier and
of their arrival in bad order at their destination constitutes a prima facie case of fault or negligence
against the carrier. If no adequate explanation is given as to how the deterioration, the loss or the
destruction of the goods happened, the transporter shall be held responsible.24
That petitioners failed to rebut the prima facie presumption of negligence is revealed in the case at bar
by a review of the records and more so by the evidence adduced by respondent.25
First, as stated in the Bill of Lading, petitioners received the subject shipment in good order and condition
in Hamburg, Germany.26
Second, prior to the unloading of the cargo, an Inspection Report 27 prepared and signed by
representatives of both parties showed the steel bands broken, the metal envelopes rust-stained and
heavily buckled, and the contents thereof exposed and rusty.
Third, Bad Order Tally Sheet No. 15497928 issued by Jardine Davies Transport Services, Inc., stated that
the four coils were in bad order and condition. Normally, a request for a bad order survey is made in
case there is an apparent or a presumed loss or damage.29
Fourth, the Certificate of Analysis30 stated that, based on the sample submitted and tested, the steel
sheets found in bad order were wet with fresh water.
Fifth, petitioners -- in a letter31 addressed to the Philippine Steel Coating Corporation and dated October
12, 1990 -- admitted that they were aware of the condition of the four coils found in bad order and
condition.
These facts were confirmed by Ruperto Esmerio, head checker of BM Santos Checkers Agency. Pertinent
portions of his testimony are reproduce hereunder:
"Q. Mr. Esmerio, you mentioned that you are a Head Checker. Will you inform the
Honorable Court with what company you are connected?
A. BM Santos Checkers Agency, sir.
Q. How is BM Santos checkers Agency related or connected with defendant Jardine Davies
Transport Services?
A. It is the company who contracts the checkers, sir.
Q. You mentioned that you are a Head Checker, will you inform this Honorable Court your
duties and responsibilities?
A. I am the representative of BM Santos on board the vessel, sir, to supervise the discharge
of cargoes.
xxx xxx xxx
Q. On or about August 1, 1990, were you still connected or employed with BM Santos as a
Head Checker?
A. Yes, sir.
Q. And, on or about that date, do you recall having attended the discharging and inspection
of cold steel sheets in coil on board the MV/AN ANGEL SKY?
A. Yes, sir, I was there.
xxx xxx xxx
Q. Based on your inspection since you were also present at that time, will you inform this
Honorable Court the condition or the appearance of the bad order cargoes that were
unloaded from the MV/ANANGEL SKY?
ATTY. MACAMAY:
Objection, Your Honor, I think the document itself reflects the condition of the cold
steel sheets and the best evidence is the document itself, Your Honor that shows
the condition of the steel sheets.
COURT:
Let the witness answer.
A. The scrap of the cargoes is broken already and the rope is loosen and the cargoes are
dent on the sides."32
All these conclusively prove the fact of shipment in good order and condition and the consequent
damage to the four coils while in the possession of petitioner,33 who notably failed to explain why.34
Further, petitioners failed to prove that they observed the extraordinary diligence and precaution which
the law requires a common carrier to know and to follow to avoid damage to or destruction of the goods
entrusted to it for safe carriage and delivery.35
True, the words "metal envelopes rust stained and slightly dented" were noted on the Bill of Lading;
however, there is no showing that petitioners exercised due diligence to forestall or lessen the
loss.36 Having been in the service for several years, the master of the vessel should have known at the
outset that metal envelopes in the said state would eventually deteriorate when not properly stored
while in transit.37 Equipped with the proper knowledge of the nature of steel sheets in coils and of the
proper way of transporting them, the master of the vessel and his crew should have undertaken
precautionary measures to avoid possible deterioration of the cargo. But none of these measures was
taken.38 Having failed to discharge the burden of proving that they have exercised the extraordinary
diligence required by law, petitioners cannot escape liability for the damage to the four coils.39
In their attempt to escape liability, petitioners further contend that they are exempted from liability
under Article 1734(4) of the Civil Code. They cite the notation "metal envelopes rust stained and slightly
dented" printed on the Bill of Lading as evidence that the character of the goods or defect in the packing
or the containers was the proximate cause of the damage. We are not convinced.
From the evidence on record, it cannot be reasonably concluded that the damage to the four coils was
due to the condition noted on the Bill of Lading.40 The aforecited exception refers to cases when goods
are lost or damaged while in transit as a result of the natural decay of perishable goods or the
fermentation or evaporation of substances liable therefor, the necessary and natural wear of goods in
transport, defects in packages in which they are shipped, or the natural propensities of animals. 41 None
of these is present in the instant case.
Further, even if the fact of improper packing was known to the carrier or its crew or was apparent upon
ordinary observation, it is not relieved of liability for loss or injury resulting therefrom, once it accepts
the goods notwithstanding such condition.42 Thus, petitioners have not successfully proven the
application of any of the aforecited exceptions in the present case.43
Second Issue:
Notice of Loss
Petitioners claim that pursuant to Section 3, paragraph 6 of the Carriage of Goods by Sea Act 44 (COGSA),
respondent should have filed its Notice of Loss within three days from delivery. They assert that the
cargo was discharged on July 31, 1990, but that respondent filed its Notice of Claim only on September
18, 1990.45
We are not persuaded. First, the above-cited provision of COGSA provides that the notice of claim need
not be given if the state of the goods, at the time of their receipt, has been the subject of a joint
inspection or survey. As stated earlier, prior to unloading the cargo, an Inspection Report 46 as to the
condition of the goods was prepared and signed by representatives of both parties.47
Second, as stated in the same provision, a failure to file a notice of claim within three days will not bar
recovery if it is nonetheless filed within one year.48 This one-year prescriptive period also applies to the
shipper, the consignee, the insurer of the goods or any legal holder of the bill of lading. 49
In Loadstar Shipping Co., Inc, v. Court of Appeals,50 we ruled that a claim is not barred by prescription as
long as the one-year period has not lapsed. Thus, in the words of the ponente, Chief Justice Hilario G.
Davide Jr.:
Civil Code (Carriage of Goods) | Page 8 of 28
 "Inasmuch as the neither the Civil Code nor the Code of Commerce states a specific
prescriptive period on the matter, the Carriage of Goods by Sea Act (COGSA)--which provides
for a one-year period of limitation on claims for loss of, or damage to, cargoes sustained
during transit--may be applied suppletorily to the case at bar."
In the present case, the cargo was discharged on July 31, 1990, while the Complaint 51 was filed by
respondent on July 25, 1991, within the one-year prescriptive period.
Third Issue:
Package Limitation
Assuming arguendo they are liable for respondent's claims, petitioners contend that their liability should
be limited to US$500 per package as provided in the Bill of Lading and by Section 4(5)52 of COGSA.53
On the other hand, respondent argues that Section 4(5) of COGSA is inapplicable, because the value of
the subject shipment was declared by petitioners beforehand, as evidenced by the reference to and the
insertion of the Letter of Credit or "L/C No. 90/02447" in the said Bill of Lading.54
A bill of lading serves two functions. First, it is a receipt for the goods shipped.53 Second, it is a contract
by which three parties -- namely, the shipper, the carrier, and the consignee -- undertake specific
responsibilities and assume stipulated obligations.56 In a nutshell, the acceptance of the bill of lading by
the shipper and the consignee, with full knowledge of its contents, gives rise to the presumption that it
constituted a perfected and binding contract.57
Further, a stipulation in the bill of lading limiting to a certain sum the common carrier's liability for loss
or destruction of a cargo -- unless the shipper or owner declares a greater value58 -- is sanctioned by
law.59 There are, however, two conditions to be satisfied: (1) the contract is reasonable and just under
the circumstances, and (2) it has been fairly and freely agreed upon by the parties. 60 The rationale for
this rule is to bind the shippers by their agreement to the value (maximum valuation) of their goods.61
It is to be noted, however, that the Civil Code does not limit the liability of the common carrier to a fixed
amount per package.62 In all matters not regulated by the Civil Code, the right and the obligations of
common carriers shall be governed by the Code of Commerce and special laws.63 Thus, the COGSA, which
is suppletory to the provisions of the Civil Code, supplements the latter by establishing a statutory
provision limiting the carrier's liability in the absence of a shipper's declaration of a higher value in the
bill of lading.64 The provisions on limited liability are as much a part of the bill of lading as though
physically in it and as though placed there by agreement of the parties.65
In the case before us, there was no stipulation in the Bill of Lading66 limiting the carrier's liability. Neither
did the shipper declare a higher valuation of the goods to be shipped. This fact notwithstanding, the
insertion of the words "L/C No. 90/02447 cannot be the basis for petitioners' liability.
First, a notation in the Bill of Lading which indicated the amount of the Letter of Credit obtained by the
shipper for the importation of steel sheets did not effect a declaration of the value of the goods as
required by the bill.67 That notation was made only for the convenience of the shipper and the bank
processing the Letter of Credit.68
Second, in Keng Hua Paper Products v. Court of Appeals,69 we held that a bill of lading was separate from
the Other Letter of Credit arrangements. We ruled thus:
"(T)he contract of carriage, as stipulated in the bill of lading in the present case, must be
treated independently of the contract of sale between the seller and the buyer, and the
contract of issuance of a letter of credit between the amount of goods described in the
commercial invoice in the contract of sale and the amount allowed in the letter of credit will
not affect the validity and enforceability of the contract of carriage as embodied in the bill of
lading. As the bank cannot be expected to look beyond the documents presented to it by the
seller pursuant to the letter of credit, neither can the carrier be expected to go beyond the
representations of the shipper in the bill of lading and to verify their accuracy vis-à-vis the
commercial invoice and the letter of credit. Thus, the discrepancy between the amount of
goods indicated in the invoice and the amount in the bill of lading cannot negate petitioner's
obligation to private respondent arising from the contract of transportation."70
In the light of the foregoing, petitioners' liability should be computed based on US$500 per package and
not on the per metric ton price declared in the Letter of Credit. 71 In Eastern Shipping Lines, Inc. v.
Intermediate Appellate Court,72 we explained the meaning of packages:
"When what would ordinarily be considered packages are shipped in a container supplied by
the carrier and the number of such units is disclosed in the shipping documents, each of those
units and not the container constitutes the 'package' referred to in the liability limitation
provision of Carriage of Goods by Sea Act."
Considering, therefore, the ruling in Eastern Shipping Lines and the fact that the Bill of Lading clearly
disclosed the contents of the containers, the number of units, as well as the nature of the steel sheets,
the four damaged coils should be considered as the shipping unit subject to the US$500
limitation.1âwphi1.nêt
WHEREFORE, the Petition is partly granted and the assailed Decision MODIFIED. Petitioners' liability is
reduced to US$2,000 plus interest at the legal rate of six percent from the time of the filing of the
Complaint on July 25, 1991 until the finality of this Decision, and 12 percent thereafter until fully paid.
No pronouncement as to costs.
SO ORDERED.
G.R. No. 168151 September 4, 2009
REGIONAL CONTAINER LINES (RCL) OF SINGAPORE and EDSA SHIPPING AGENCY, Petitioners,
vs.THE NETHERLANDS INSURANCE CO. (PHILIPPINES), INC., Respondent.
DECISION
BRION, J.:
For our resolution is the petition for review on certiorari filed by petitioners Regional Container Lines of
Singapore (RCL) and EDSA Shipping Agency (EDSA Shipping) to annul and set aside the decision1 and
resolution2 of the Court of Appeals (CA) dated May 26, 2004 and May 10, 2005, respectively, in CA-G.R.
CV No. 76690.
RCL is a foreign corporation based in Singapore. It does business in the Philippines through its agent,
EDSA Shipping, a domestic corporation organized and existing under Philippine laws. Respondent
Netherlands Insurance Company (Philippines), Inc. (Netherlands Insurance) is likewise a domestic
corporation engaged in the marine underwriting business.
FACTUAL ANTECEDENTS
The pertinent facts, based on the records are summarized below.
On October 20, 1995, 405 cartons of Epoxy Molding Compound were consigned to be shipped from
Singapore to Manila for Temic Telefunken Microelectronics Philippines (Temic). U-Freight Singapore PTE
Ltd.3 (U-Freight Singapore), a forwarding agent based in Singapore, contracted the services of Pacific
Eagle Lines PTE. Ltd. (Pacific Eagle) to transport the subject cargo. The cargo was packed, stored, and
sealed by Pacific Eagle in its Refrigerated Container No. 6105660 with Seal No. 13223. As the cargo was
highly perishable, the inside of the container had to be kept at a temperature of 0º Celsius. Pacific Eagle
then loaded the refrigerated container on board the M/V Piya Bhum, a vessel owned by RCL, with which
Pacific Eagle had a slot charter agreement. RCL duly issued its own Bill of Lading in favor of Pacific Eagle.
To insure the cargo against loss and damage, Netherlands Insurance issued a Marine Open Policy in favor
of Temic, as shown by MPO-21-05081-94 and Marine Risk Note MRN-21 14022, to cover all
losses/damages to the shipment.
On October 25, 1995, the M/V Piya Bhum docked in Manila. After unloading the refrigerated container,
it was plugged to the power terminal of the pier to keep its temperature constant. Fidel Rocha (Rocha),
Vice-President for Operations of Marines Adjustment Corporation, accompanied by two surveyors,
conducted a protective survey of the cargo. They found that based on the temperature chart, the
temperature reading was constant from October 18, 1995 to October 25, 1995 at 0º Celsius. However,
at midnight of October 25, 1995 – when the cargo had already been unloaded from the ship – the
temperature fluctuated with a reading of 33º Celsius. Rocha believed the fluctuation was caused by the
burnt condenser fan motor of the refrigerated container.
Civil Code (Carriage of Goods) | Page 9 of 28
On November 9, 1995, Temic received the shipment. It found the cargo completely damaged. Temic filed
a claim for cargo loss against Netherlands Insurance, with supporting claims documents. The
Netherlands Insurance paid Temic the sum of P1,036,497.00 under the terms of the Marine Open Policy.
Temic then executed a loss and subrogation receipt in favor of Netherlands Insurance.
Seven months from delivery of the cargo or on June 4, 1996, Netherlands Insurance filed a complaint for
subrogation of insurance settlement with the Regional Trial Court, Branch 5, Manila, against "the
unknown owner of M/V Piya Bhum" and TMS Ship Agencies (TMS), the latter thought to be the local
agent of M/V Piya Bhum’s unknown owner.4 The complaint was docketed as Civil Case No. 96-78612.
Netherlands Insurance amended the complaint on January 17, 1997 to implead EDSA Shipping, RCL,
Eagle Liner Shipping Agencies, U-Freight Singapore, and U-Ocean (Phils.), Inc. (U-Ocean), as additional
defendants. A third amended complaint was later made, impleading Pacific Eagle in substitution of Eagle
Liner Shipping Agencies.
TMS filed its answer to the original complaint. RCL and EDSA Shipping filed their answers with cross-
claim and compulsory counterclaim to the second amended complaint. U-Ocean likewise filed an answer
with compulsory counterclaim and cross-claim. During the pendency of the case, U-Ocean, jointly with
U-Freight Singapore, filed another answer with compulsory counterclaim. Only Pacific Eagle and TMS
filed their answers to the third amended complaint.
The defendants all disclaimed liability for the damage caused to the cargo, citing several reasons why
Netherland Insurance’s claims must be rejected. Specifically, RCL and EDSA Shipping denied negligence
in the transport of the cargo; they attributed any negligence that may have caused the loss of the
shipment to their co-defendants. They likewise asserted that no valid subrogation exists, as the payment
made by Netherlands Insurance to the consignee was invalid. By way of affirmative defenses, RCL and
EDSA Shipping averred that the Netherlands Insurance has no cause of action, and is not the real party-
in-interest, and that the claim is barred by laches/prescription.
After Netherlands Insurance had made its formal offer of evidence, the defendants including RCL and
EDSA Shipping sought leave of court to file their respective motions to dismiss based on demurrer to
evidence.
RCL and EDSA Shipping, in their motion, insisted that Netherlands Insurance had (1) failed to prove any
valid subrogation, and (2) failed to establish that any negligence on their part or that the loss was
sustained while the cargo was in their custody.
On May 22, 2002, the trial court handed down an Order dismissing Civil Case No. 96-78612 on demurrer
to evidence. The trial court ruled that while there was valid subrogation, the defendants could not be
held liable for the loss or damage, as their respective liabilities ended at the time of the discharge of the
cargo from the ship at the Port of Manila.
Netherlands Insurance seasonably appealed the order of dismissal to the CA.
On May 26, 2004, the CA disposed of the appeal as follows:
WHEREFORE, in view of the foregoing, the dismissal of the complaint against defendants Regional
Container Lines and Its local agent, EDSA Shipping Agency, is REVERSED and SET ASIDE. The dismissal of
the complaint against the other defendants is AFFIRMED. Pursuant to Section 1, Rule 33 of the 1997
Rules of Civil Procedure, defendants Regional Container Lines and EDSA Shipping Agency are deemed to
have waived the right to present evidence.
As such, defendants Regional Container Lines and EDSA Shipping Agency are ordered to reimburse
plaintiff in the sum of P1,036,497.00 with interest from date hereof until fully paid.
No costs.
SO ORDERED. [Emphasis supplied.]
The CA dismissed Netherland Insurance’s complaint against the other defendants after finding that the
claim had already been barred by prescription.5
Having been found liable for the damage to the cargo, RCL and EDSA Shipping filed a motion for
reconsideration, but the CA maintained its original conclusions.
The sole issue for our resolution is whether the CA correctly held RCL and EDSA Shipping liable as common
carriers under the theory of presumption of negligence.
THE COURT’S RULING
The present case is governed by the following provisions of the Civil Code:
ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the
passengers transported by them according to all the circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735,
and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further
set forth in articles1755 and 1756.
ART. 1734. Common carriers are responsible for the loss, destruction, or deterioration of the goods,
unless the same is due to any of the following 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 of 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.
ART. 1735. In all cases other that those mentioned in Nos. 1, 2, 3, 4 and 5 of the preceding article, if the
goods are lost, destroyed, or deteriorated, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as required by
article 1733.
ART. 1736. The extraordinary responsibility of the common carrier lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until the sane
are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right
to receive them, without prejudice to the provisions of articles 1738.
ART. 1738. The extraordinary liability of the common carrier continues to be operative even during the
time the goods are stored in a warehouse of the carrier at the place of destination, until the consignee
has been advised of the arrival of the goods and has had reasonable opportunity thereafter to remove
them or otherwise dispose of them.
ART. 1742. Even if the loss, destruction, or deterioration of the goods should be caused by the character
of the goods, or the faulty nature of the packing or of the containers, the common carrier must exercise
due diligence to forestall or lessen the loss.
In Central Shipping Company, Inc. v. Insurance Company of North America, 6 we reiterated the rules for
the liability of a common carrier for lost or damaged cargo as follows:
(1) Common carriers are bound to observe extraordinary diligence over the goods they
transport, according to all the circumstances of each case;
(2) In the event of loss, destruction, or deterioration of the insured goods, common carriers
are responsible, unless they can prove that such loss, destruction, or deterioration was
brought about by, among others, "flood, storm, earthquake, lightning, or other natural
disaster or calamity"; and
(3) In all other cases not specified under Article 1734 of the Civil Code, common carriers are
presumed to have been at fault or to have acted negligently, unless they observed
extraordinary diligence.7
In the present case, RCL and EDSA Shipping disclaim any responsibility for the loss or damage to the
goods in question. They contend that the cause of the damage to the cargo was the "fluctuation of the
temperature in the reefer van," which fluctuation occurred after the cargo had already been discharged
from the vessel; no fluctuation, they point out, arose when the cargo was still on board M/V Piya Bhum.
As the cause of the damage to the cargo occurred after the same was already discharged from the vessel
and was under the custody of the arrastre operator (International Container Terminal Services, Inc. or
ICTSI), RCL and EDSA Shipping posit that the presumption of negligence provided in Article 1735 of the
Civil Code should not apply. What applies in this case is Article 1734, particularly paragraphs 3 and 4
thereof, which exempts the carrier from liability for loss or damage to the cargo when it is caused either
Civil Code (Carriage of Goods) | Page 10 of 28
by an act or omission of the shipper or by the character of the goods or defects in the packing or in the
containers. Thus, RCL and EDSA Shipping seek to lay the blame at the feet of other parties.
We do not find the arguments of RCL and EDSA Shipping meritorious.
A common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary
vigilance over the goods it transported.8 When the goods shipped are either lost or arrived in damaged
condition, a presumption arises against the carrier of its failure to observe that diligence, and there need
not be an express finding of negligence to hold it liable.91avvphi1
To overcome the presumption of negligence, the common carrier must establish by adequate proof that
it exercised extraordinary diligence over the goods. It must do more than merely show that some other
party could be responsible for the damage.10
In the present case, RCL and EDSA Shipping failed to prove that they did exercise that degree of diligence
required by law over the goods they transported. Indeed, there is sufficient evidence showing that the
fluctuation of the temperature in the refrigerated container van, as recorded in the temperature chart,
occurred after the cargo had been discharged from the vessel and was already under the custody of the
arrastre operator, ICTSI. This evidence, however, does not disprove that the condenser fan – which
caused the fluctuation of the temperature in the refrigerated container – was not damaged while the
cargo was being unloaded from the ship. It is settled in maritime law jurisprudence that cargoes while
being unloaded generally remain under the custody of the carrier;11 RCL and EDSA Shipping failed to
dispute this.1avvphi1
RCL and EDSA Shipping could have offered evidence before the trial court to show that the damage to
the condenser fan did not occur: (1) while the cargo was in transit; (2) while they were in the act of
discharging it from the vessel; or (3) while they were delivering it actually or constructively to the
consignee. They could have presented proof to show that they exercised extraordinary care and
diligence in the handling of the goods, but they opted to file a demurrer to evidence. As the order
granting their demurrer was reversed on appeal, the CA correctly ruled that they are deemed to have
waived their right to present evidence,12 and the presumption of negligence must stand.
It is for this reason as well that we find RCL and EDSA Shipping’s claim that the loss or damage to the
cargo was caused by a defect in the packing or in the containers. To exculpate itself from liability for the
loss/damage to the cargo under any of the causes, the common carrier is burdened to prove any of the
causes in Article 1734 of the Civil Code claimed by it by a preponderance of evidence. If the carrier
succeeds, the burden of evidence is shifted to the shipper to prove that the carrier is negligent.13 RCL
and EDSA Shipping, however, failed to satisfy this standard of evidence and in fact offered no evidence
at all on this point; a reversal of a dismissal based on a demurrer to evidence bars the defendant from
presenting evidence supporting its allegations.
WHEREFORE, we DENY the petition for review on certiorari filed by the Regional Container Lines of
Singapore and EDSA Shipping Agency. The decision of the Court of Appeals dated May 26, 2004 in CA-
G.R. CV No. 76690 is AFFIRMED IN TOTO. Costs against the petitioners.
SO ORDERED.
G.R. No. L-9840 April 22, 1957
LU DO & LU YM CORPORATION, petitioner-defendant, vs. I. V. BINAMIRA, respondent-plaintiff.
BAUTISTA ANGELO, J.:
On April 4, 1954, plaintiff filed an action in the Court of First Instance of Cebu against defendant to
recover the sum of P324.63 as value of certain missing shipment, P150 as actual and compensatory
damages, and P600 as moral and pecuniary damages. After trial, the court rendered judgment ordering
defendant to pay plaintiff the sum of P216.84, with legal interest. On appeal, the Court of Appeals
affirmed the judgment, hence the present petition for review.
On August 10, 1951, the Delta Photo Supply Company of New York shipped on board the M/S
"FERNSIDE" at New York, U.S.A., six cases of films and/or photographic supplies consigned to the order
of respondent I. V. Binamira. For this shipment, Bill of Lading No. 29 was issued. The ship arrived at the
port of Cebu on September 23, 1951 and discharged her cargo on September 23, and 24, 1951, including
the shipment in question, placing it in the possession and custody of the arrastre operator of said port,
the Visayan Cebu Terminal Company, Inc.
Petitioner, as agent of the carrier, hired the Cebu Stevedoring Company, Inc. to unload its cargo. During
the discharge, good order cargo was separated from the bad order cargo on board the ship, and a
separate list of bad order cargo was prepared by Pascual Villamor, checker of the stevedoring company.
All the cargo unloaded was received at the pier by the Visayan Cebu Terminal Company Inc, arrastre
operator of the port. This terminal company had also its own checker, Romeo Quijano, who also
recorded and noted down the good cargo from the bad one. The shipment in question, was not included
in the report of bad order cargo of both checkers, indicating that it was discharged from the, ship in good
order and condition.
On September 26, 1951, three days after the goods were unloaded from the ship, respondent took
delivery of his six cases of photographic supplies from the arrastre operator. He discovered that the
cases showed signs of pilferage and, consequently, he hired marine surveyors, R. J. del Pan & Company,
Inc., to examine them. The surveyors examined the cases and made a physical count of their contents in
the presence of representatives of petitioner, respondent and the stevedoring company. The surveyors
examined the cases and made a physical count of their contents in the presence of representatives of
petitioner, respondent and the stevedoring company. The finding of the surveyors showed that some
films and photographic supplies were missing valued at P324.63.
It appears from the evidence that the six cases of films and photographic supplies were discharged from
the ship at the port of Cebu by the stevedoring company hired by petitioner as agent of the carrier. All
the unloaded cargo, including the shipment in question, was received by the Visayan Cebu Terminal
Company Inc., the arrastre operator appointed by the Bureau of Customs. It also appears that during the
discharge, the cargo was checked both by the stevedoring company hired by petitioner as well as by the
arrastre operator of the port, and the shipment in question, when discharged from the ship, was found
to be in good order and condition. But after it was delivered to respondent three days later, the same
was examined by a marine surveyor who found that some films and supplies were missing valued at
P324.63.
The question now to be considered is: Is the carrier responsible for the loss considering that the same
occurred after the shipment was discharged from the ship and placed in the possession and custody of
the customs authorities?
The Court of Appeals found for the affirmative, making on this point the following comment:
In this jurisdiction, a common carrier has the legal duty to deliver goods to a consignee in the
same condition in which it received them. Except where the loss, destruction or deterioration
of the merchandise was due to any of the cases enumerated in Article 1734 of the new Civil
Code, a carrier is presumed to have been at fault and to have acted negligently, unless it could
prove that it observed extraordinary diligence in the care and handling of the goods (Article
1735, supra). Such presumption and the liability of the carrier attach until the goods are
delivered actually or constructively, to the consignee, or to the person who has a right to
receive them (Article 1736, supra), and we believe delivery to the customs authorities is not
the delivery contemplated by Article 1736, supra, in connection with second paragraph of
Article 1498, supra, because, in such a case, the goods are then still in the hands of the
Government and their owner could not exercise dominion whatever over them until the
duties are paid. In the case at bar, the presumption against the carrier, represented appellant
as its agent, has not been successfully rebutted.
It is now contended that the Court of Appeals erred in its finding not only because it made wrong
interpretation of the law on the matter, but also because it ignored the provisions of the bill of lading
covering the shipment wherein it was stipulated that the responsibility of the carrier is limited only to
losses that may occur while the cargo is still under its custody and control.
We believe this contention is well taken. It is true that, as a rule, a common carrier is responsible for the
loss, destruction or deterioration of the goods it assumes to carry from one place to another unless the
same is due to any to any of the causes mentioned in Article 1734 on the new Civil Code, and that, if the
goods are lost, destroyed or deteriorated, for causes other that those mentioned, the common carrier
is presumed to have been at fault or to have acted negligently, unless it proves that it has observed
Civil Code (Carriage of Goods) | Page 11 of 28
extraordinary diligence in their care (Article 1735, Idem.), and that this extraordinary liability lasts from
the time the goods are placed in the possession of the carrier until they are delivered to the consignee,
or "to the person who has the right to receive them" (Article 1736, Idem.), but these provisions only
apply when the loss, destruction or deterioration takes place while the goods are in the possession of
the carrier, and not after it has lost control of them. The reason is obvious. While the goods are in its
possession, it is but fair that it exercise extraordinary diligence in protecting them from damage, and if
loss occurs, the law presumes that it was due to its fault or negligence. This is necessary to protect the
interest the interest of the owner who is at its mercy. The situation changes after the goods are delivered
to the consignee.
While we agree with the Court of Appeals that while delivery of the cargo to the consignee, or to the
person who has a right to receive them", contemplated in Article 1736, because in such case the goods
are still in the hands of the Government and the owner cannot exercise dominion over them, we believe
however that the parties may agree to limit the liability of the carrier considering that the goods have
still to through the inspection of the customs authorities before they are actually turned over to the
consignee. This is a situation where we may say that the carrier losses control of the goods because of a
custom regulation and it is unfair that it be made responsible for what may happen during the
interregnum. And this is precisely what was done by the parties herein. In the bill of lading that was
issued covering the shipment in question, both the carrier and the consignee have stipulated to limit the
responsibility of the carrier for the loss or damage that may because to the goods before they are
actually delivered by insert in therein the following provisions:
1. . . . The Carrier shall not be liable in any capacity whatsoever for any delay, nondelivery or
misdelivery, or loss of or damage to the goods occurring while the goods are not in the actual
custody of the Carrier. . . . (Emphasis ours.)
(Paragraph 1, Exhibit "1")
2. . . . The responsibility of the Carrier in any capacity shall altogether cease and the goods
shall be considered to be delivered and at their own risk and expense in every respect when
taken into the custody of customs or other authorities. The Carrier shall not be required to
give any notification of disposition of the goods. . . . (Emphasis ours.)
(Paragraph 12, Exhibit "1")
3. Any provisions herein to the contrary notwithstanding, goods may be . . . by Carrier at ship's
tackle . . . and delivery beyond ship's tackle shall been tirely at the option of the Carrier and
solely at the expense of the shipper or consignee.
(Paragraph 22, Exhibit "1")
It therefore appears clear that the carrier does not assume liability for any loss or damage to the goods
once they have been "taken into the custody of customs or other authorities", or when they have been
delivered at ship's tackle. These stipulations are clear. They have been adopted precisely to mitigate the
responsibility of the carrier considering the present law on the matter, and we find nothing therein that
is contrary to morals or public policy that may justify their nullification. We are therefore persuaded to
conclude that the carrier is not responsible for the loss in question, it appearing that the same happened
after the shipment had been delivered to the customs authorities.
Wherefore, the decision appealed from is reversed, without pronouncement as to costs.
Bengzon, Padilla, Montemayor, Reyes, A., Labrador, Concepcion, Reyes, J.B.L. Endencia and Felix,
JJ., concur.
G.R. No. L-36481-2 October 23, 1982
AMPARO C. SERVANDO, CLARA UY BICO, plaintiffs-appellees, vs. PHILIPPINE STEAM NAVIGATION
CO., defendant-appellant.
ESCOLIN, J.:
This appeal, originally brought to the Court of Appeals, seeks to set aside the decision of the Court of
First Instance of Negros Occidental in Civil Cases Nos. 7354 and 7428, declaring appellant Philippine
Steam Navigation liable for damages for the loss of the appellees' cargoes as a result of a fire which
gutted the Bureau of Customs' warehouse in Pulupandan, Negros Occidental.
The Court of Appeals certified the case to Us because only pure questions of law are raised therein.
The facts culled from the pleadings and the stipulations submitted by the parties are as follows:
On November 6, 1963, appellees Clara Uy Bico and Amparo Servando loaded on board the appellant's
vessel, FS-176, for carriage from Manila to Pulupandan, Negros Occidental, the following cargoes, to wit:
Clara Uy Bico —
1,528 cavans of rice valued
at P40,907.50;
Amparo Servando —
44 cartons of colored paper,
toys and general merchandise valued at P1,070.50;
as evidenced by the corresponding bills of lading issued by the appellant. 1
Upon arrival of the vessel at Pulupandan, in the morning of November 18, 1963, the cargoes were
discharged, complete and in good order, unto the warehouse of the Bureau of Customs. At about 2:00
in the afternoon of the same day, said warehouse was razed by a fire of unknown origin, destroying
appellees' cargoes. Before the fire, however, appellee Uy Bico was able to take delivery of 907 cavans of
rice 2 Appellees' claims for the value of said goods were rejected by the appellant.
On the bases of the foregoing facts, the lower court rendered a decision, the decretal portion of which
reads as follows:
WHEREFORE, judgment is rendered as follows:
1. In case No. 7354, the defendant is hereby ordered to pay the plaintiff Amparo C.
Servando the aggregate sum of P1,070.50 with legal interest thereon from the date
of the filing of the complaint until fully paid, and to pay the costs.
2. In case No. 7428, the defendant is hereby ordered to pay to plaintiff Clara Uy
Bico the aggregate sum of P16,625.00 with legal interest thereon from the date of
the filing of the complaint until fully paid, and to pay the costs.
Article 1736 of the Civil Code imposes upon common carriers the duty to observe extraordinary diligence
from the moment the goods are unconditionally placed in their possession "until the same are delivered,
actually or constructively, by the carrier to the consignee or to the person who has a right to receive
them, without prejudice to the provisions of Article 1738. "
The court a quo held that the delivery of the shipment in question to the warehouse of the Bureau of
Customs is not the delivery contemplated by Article 1736; and since the burning of the warehouse
occurred before actual or constructive delivery of the goods to the appellees, the loss is chargeable
against the appellant.
It should be pointed out, however, that in the bills of lading issued for the cargoes in question, the parties
agreed to limit the responsibility of the carrier for the loss or damage that may be caused to the shipment
by inserting therein the following stipulation:
Clause 14. Carrier shall not be responsible for loss or damage to shipments billed
'owner's risk' unless such loss or damage is due to negligence of carrier. Nor shall
carrier be responsible for loss or damage caused by force majeure, dangers or
accidents of the sea or other waters; war; public enemies; . . . fire . ...
We sustain the validity of the above stipulation; there is nothing therein that is contrary to law, morals
or public policy.
Appellees would contend that the above stipulation does not bind them because it was printed in fine
letters on the back-of the bills of lading; and that they did not sign the same. This argument overlooks
the pronouncement of this Court in Ong Yiu vs. Court of Appeals, promulgated June 29, 1979, 3 where
the same issue was resolved in this wise:
While it may be true that petitioner had not signed the plane ticket (Exh. '12'), he
is nevertheless bound by the provisions thereof. 'Such provisions have been held
Civil Code (Carriage of Goods) | Page 12 of 28
 to be a 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', in regards which it has been said that contracts
of adhesion wherein one party imposes a ready made form of contract on the
other, as the plane ticket in the case at bar, are contracts not entirely prohibited.
The one who adheres to the contract is in reality free to reject it entirely; if he
adheres, he gives his consent." (Tolentino, Civil Code, Vol. IV, 1962 Ed., p. 462, citing
Mr. Justice J.B.L. Reyes, Lawyer's Journal, Jan. 31, 1951, p. 49).
Besides, the agreement contained in the above quoted Clause 14 is a mere iteration of the basic principle
of law written in Article 1 1 7 4 of the Civil Code:
Article 1174. Except in cases expressly specified by the law, or when it is otherwise
declared by stipulation, or when the nature of the obligation requires the
assumption of risk, no person shall be responsible for those events which could not
be foreseen, or which, though foreseen, were inevitable.
Thus, where fortuitous event or force majeure is the immediate and proximate cause of the loss, the
obligor is exempt from liability for non-performance. The Partidas, 4 the antecedent of Article 1174 of
the Civil Code, defines 'caso fortuito' as 'an event that takes place by accident and could not have been
foreseen. Examples of this are destruction of houses, unexpected fire, shipwreck, violence of robbers.'
In its dissertation of the phrase 'caso fortuito' the Enciclopedia Juridicada Espanola 5 says: "In a legal
sense and, consequently, also in relation to contracts, a 'caso fortuito' presents the following essential
characteristics: (1) the cause of the unforeseen and unexpected occurrence, or of the failure of the
debtor to comply with his obligation, must be independent of the human will; (2) it must be impossible
to foresee the event which constitutes the 'caso fortuito', or if it can be foreseen, it must be impossible
to avoid; (3) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation
in a normal manner; and (4) the obligor must be free from any participation in the aggravation of the
injury resulting to the creditor." In the case at bar, the burning of the customs warehouse was an
extraordinary event which happened independently of the will of the appellant. The latter could not
have foreseen the event.
There is nothing in the record to show that appellant carrier ,incurred in delay in the performance of its
obligation. It appears that appellant had not only notified appellees of the arrival of their shipment, but
had demanded that the same be withdrawn. In fact, pursuant to such demand, appellee Uy Bico had
taken delivery of 907 cavans of rice before the burning of the warehouse.
Nor can the appellant or its employees be charged with negligence. The storage of the goods in the
Customs warehouse pending withdrawal thereof by the appellees was undoubtedly made with their
knowledge and consent. Since the warehouse belonged to and was maintained by the government, it
would be unfair to impute negligence to the appellant, the latter having no control whatsoever over the
same.
The lower court in its decision relied on the ruling laid down in Yu Biao Sontua vs. Ossorio 6, where this
Court held the defendant liable for damages arising from a fire caused by the negligence of the
defendant's employees while loading cases of gasoline and petroleon products. But unlike in the said
case, there is not a shred of proof in the present case that the cause of the fire that broke out in the
Custom's warehouse was in any way attributable to the negligence of the appellant or its employees.
Under the circumstances, the appellant is plainly not responsible.
WHEREFORE, the judgment appealed from is hereby set aside. No costs.
SO ORDERED.
G.R. No. 95536 March 23, 1992
ANICETO G. SALUDO, JR., MARIA SALVACION SALUDO, LEOPOLDO G. SALUDO and SATURNINO G.
SALUDO, petitioners, vs. HON. COURT OF APPEALS, TRANS WORLD AIRLINES, INC., and PHILIPPINE
AIRLINES, INC., respondents.
REGALADO, J.:
Assailed in this petition for review on certiorari is the decision in CA-G.R. CV No. 20951 of respondent
Court of Appeals 1 which affirmed the decision of the trial court 2 dismissing for lack of evidence herein
petitioners' complaint in Civil Case No R-2101 of the then Court of First Instance of Southern Leyte,
Branch I.
The facts, as recounted by the court a quo and adopted by respondent court after "considering the
evidence on record," are as follows:
After the death of plaintiffs' mother, Crispina Galdo Saludo, in Chicago Illinois, (on)
October 23, 1976 (Exh. A), Pomierski and Son Funeral Home of Chicago, made the
necessary preparations and arrangements for the shipment, of the remains from
Chicago to the Philippines. The funeral home had the remains embalmed (Exb. D)
and secured a permit for the disposition of dead human body on October 25, 1976
(Exh. C), Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00
p.m. on October 26, 1976 at the Pomierski & Son Funeral Home, sealed the shipping
case containing a hermetically sealed casket that is airtight and waterproof wherein
was contained the remains of Crispina Saludo Galdo (sic) (Exb. B). On the same date,
October 26, 1976, Pomierski brought the remains to C.M.A.S. (Continental
Mortuary Air Services) at the airport (Chicago) which made the necessary
arrangements such as flights, transfers, etc.; C.M.A.S. is a national service used by
undertakers to throughout the nation (U.S.A.), they furnish the air pouch which the
casket is enclosed in, and they see that the remains are taken to the proper air
freight terminal (Exh. 6-TWA). C.M.A.S. booked the shipment with PAL thru the
carrier's agent Air Care International, with Pomierski F.H. as the shipper and Mario
(Maria) Saludo as the consignee. PAL Airway Bill No. 079-01180454 Ordinary was
issued wherein the requested routing was from Chicago to San Francisco on board
TWA Flight 131 of October 27, 1976 and from San Francisco to Manila on board PAL
Flight No. 107 of the same date, and from Manila to Cebu on board PAL Flight 149
of October 29, 1976 (See Exh. E., Also Exh. 1-PAL).
In the meantime, plaintiffs Maria Salvacion Saludo and Saturnino Saludo, thru a
travel agent, were booked with United Airlines from Chicago to California, and with
PAL from California to Manila. She then went to the funeral director of Pomierski
Funeral Home who had her mother's remains and she told the director that they
were booked with United Airlines. But the director told her that the remains were
booked with TWA flight to California. This upset her, and she and her brother had
to change reservations from UA to the TWA flight after she confirmed by phone
that her mother's remains should be on that TWA flight. They went to the airport
and watched from the look-out area. She saw no body being brought. So, she went
to the TWA counter again, and she was told there was no body on that flight.
Reluctantly, they took the TWA flight upon assurance of her cousin, Ani Bantug,
that he would look into the matter and inform her about it on the plane or have it
radioed to her. But no confirmation from her cousin reached her that her mother
was on the West Coast.
Upon arrival at San Francisco at about 5:00 p.m., she went to the TWA counter
there to inquire about her mother's remains. She was told they did not know
anything about it.
She then called Pomierski that her mother's remains were not at the West Coast
terminal, and Pomierski immediately called C.M.A.S., which in a matter of 10
minutes informed him that the remains were on a plane to Mexico City, that there
were two bodies at the terminal, and somehow they were switched; he relayed this
Civil Code (Carriage of Goods) | Page 13 of 28
 information to Miss Saludo in California; later C.M.A.S. called and told him they
were sending the remains back to California via Texas (see Exh. 6-TWA).
It-turned out that TWA had carried a shipment under PAL Airway Bill No. 079-ORD-
01180454 on TWA Flight 603 of October 27, 1976, a flight earlier than TWA Flight
131 of the same date. TWA delivered or transferred the said shipment said to
contain human remains to PAL at 1400H or 2:00 p.m. of the same date, October 27,
1976 (Bee Exh. 1- TWA). "Due to a switch(ing) in Chicago", this shipment was
withdrawn from PAL by CMAS at 1805H (or 6:05 p.m.) of the same date, October
27 (Exh. 3-PAL, see Exh. 3-a-PAL).
What transpired at the Chicago (A)irport is explained in a memo or incident report
by Pomierski (Exh. 6-TWA) to Pomierski's lawyers who in turn referred to said'
memo and enclosed it in their (Pomierski's lawyers) answer dated July 18, 1981 to
herein plaintiff's counsel (See Exh. 5-TWA). In that memo or incident report (Exh.
6-TWA), it is stated that the remains (of Crispina Saludo) were taken to CMAS at
the airport; that there were two bodies at the (Chicago Airport) terminal, and
somehow they were switched, that the remains (of Crispina Saludo) were on a
plane to Mexico City; that CMAS is a national service used by undertakers
throughout the nation (U.S.A.), makes all the necessary arrangements, such as
flights, transfers, etc., and see(s) to it that the remains are taken to the proper air
freight terminal.
The following day October 28, 1976, the shipment or remains of Crispina Saludo
arrived (in) San Francisco from Mexico on board American Airlines. This shipment
was transferred to or received by PAL at 1945H or 7:45 p.m. (Exh. 2-PAL, Exh. 2-a-
PAL). This casket bearing the remains of Crispina Saludo, which was mistakenly sent
to Mexico and was opened (there), was resealed by Crispin F. Patagas for shipment
to the Philippines (See Exh. B-1). The shipment was immediately loaded on PAL
flight for Manila that same evening and arrived (in) Manila on October 30, 1976, a
day after its expected arrival on October 29, 1976. 3
In a letter dated December 15, 1976, 4 petitioners' counsel informed private respondent Trans World
Airlines (TWA) of the misshipment and eventual delay in the delivery of the cargo containing the remains
of the late Crispin Saludo, and of the discourtesy of its employees to petitioners Maria Salvacion Saludo
and Saturnino Saludo. In a separate letter on June 10, 1977 addressed to co-respondent Philippine
Airlines (PAL), 5 petitioners stated that they were holding PAL liable for said delay in delivery and would
commence judicial action should no favorable explanation be given.
Both private respondents denied liability. Thus, a damage suit 6 was filed by petitioners before the then
Court of First Instance, Branch III, Leyte, praying for the award of actual damages of P50,000.00, moral
damages of P1,000,000.00, exemplary damages, attorney's fees and costs of suit.
As earlier stated, the court below absolved the two respondent airlines companies of liability. The Court
of Appeals affirmed the decision of the lower court in toto, and in a subsequent resolution, 7 denied
herein petitioners' motion for reconsideration for lack of merit.
In predictable disagreement and dissatisfaction with the conclusions reached by respondent appellate
court, petitioners now urge this Court to review the appealed decision and to resolve whether or not (1)
the delay in the delivery of the casketed remains of petitioners' mother was due to the fault of
respondent airline companies, (2) the one-day delay in the delivery of the same constitutes contractual
breach as would entitle petitioners to damages, (3) damages are recoverable by petitioners for the
humiliating, arrogant and indifferent acts of the employees of TWA and PAL, and (4) private respondents
should be held liable for actual, moral and exemplary damages, aside from attorney's fees and litigation
expenses. 8
At the outset and in view of the spirited exchanges of the parties on this aspect, it is to be stressed that
only questions of law may be raised in a petition filed in this Court to review on certiorari the decision
of the Court of Appeals. 9 This being so, the factual findings of the Court of Appeals are final and
conclusive and cannot be reviewed by the Supreme Court. The rule, however, admits of established
exceptions, to wit: (a) where there is grave abuse of discretion; (b) when the finding is grounded entirely
on speculations, surmises or conjectures;(c) when the inference made is manifestly-mistaken, absurd or
impossible; (d) when the judgment of the Court of Appeals was based on a misapprehension of facts; (e)
when the factual findings are conflicting; (f) when the Court of Appeals, in making its findings, went
beyond the issues of the case and the same are contrary to the admissions of both appellant and
appellee; 10 (g) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by
the parties and which, if properly considered, would justify a different conclusion; 11 and (h) where the
findings of fact of the Court of Appeals are contrary to those of the trial court, or are mere conclusions
without citation of specific evidence, or where the facts of set forth by the petitioner are not disputed
by the respondent, or where the findings of fact of the Court of Appeals are premised on the absence of
evidence and are contradicted by the evidence on record. 12
To distinguish, a question of law is one which involves a doubt or controversy on what the law is on a
certain state of facts; and, a question of fact, contrarily, is one in which there is a doubt or difference as
to the truth or falsehood of the alleged facts. 13 One test, it has been held, is whether the appellate court
can determine the issue raised without reviewing or evaluating the evidence, in which case it is a
question of law, otherwise it will be a question of fact. 14
Respondent airline companies object to the present recourse of petitioners on the ground that this
petition raises only factual questions. 15 Petitioners maintain otherwise or, alternatively, they are of the
position that, assuming that the petition raises factual questions, the same are within the recognized
exceptions to the general rule as would render the petition cognizable and worthy of review by the
Court. 16
Since it is precisely the soundness of the inferences or conclusions that may be drawn from the factual
issues which are here being assayed, we find that the issues raised in the instant petition indeed warrant
a second look if this litigation is to come to a reasonable denouement. A discussion seriatim of said issues
will further reveal that the sequence of the events involved is in effect disputed. Likewise to be settled
is whether or not the conclusions of the Court of Appeals subject of this review indeed find evidentiary
and legal support.
I. Petitioners fault respondent court for "not finding that private respondents failed to exercise
extraordinary diligence required by law which resulted in the switching and/or misdelivery of the
remains of Crispina Saludo to Mexico causing gross delay in its shipment to the Philippines, and
consequently, damages to petitioners." 17
Petitioner allege that private respondents received the casketed remains of petitioners' mother on
October 26, 1976, as evidenced by the issuance of PAL Air Waybill No. 079-01180454 18 by Air Care
International as carrier's agent; and from said date, private respondents were charged with the
responsibility to exercise extraordinary diligence so much so that for the alleged switching of the caskets
on October 27, 1976, or one day after private respondents received the cargo, the latter must necessarily
be liable.
To support their assertion, petitioners rely on the jurisprudential dictum, both under American and
Philippine law, that "(t)he issuance of a bill of lading carries the presumption that the goods were
delivered to the carrier issuing the bill, for immediate shipment, and it is nowhere questioned that a bill
of lading is prima facie evidence of the receipt of the goods by the carrier. . . . In the absence of
convincing testimony establishing mistake, recitals in the bill of lading showing that the carrier received
the goods for shipment on a specified date control (13 C.J.S. 235)." 19
A bill of lading is a written acknowledgment of the receipt of the goods and an agreement to transport
and deliver them at a specified place to a person named or on his order. Such instrument may be called
a shipping receipt, forwarder's receipt and receipt for transportation. 20 The designation, however, is
immaterial. It has been hold that freight tickets for bus companies as well as receipts for cargo
transported by all forms of transportation, whether by sea or land, fall within the definition. Under the
Tariff and Customs Code, a bill of lading includes airway bills of lading. 21 The two-fold character of a bill
of lading is all too familiar; it is a receipt as to the quantity and description of the goods shipped and a
contract to transport the goods to the consignee or other person therein designated, on the terms
specified in such instrument. 22
Logically, since a bill of lading acknowledges receipt of goods to be transported, delivery of the goods to
the carrier normally precedes the issuance of the bill; or, to some extent, delivery of the goods and
Civil Code (Carriage of Goods) | Page 14 of 28
issuance of the bill are regarded in commercial practice as simultaneous acts. 23 However, except as may
be prohibited by law, there is nothing to prevent an inverse order of events, that is, the execution of the
bill of lading even prior to actual possession and control by the carrier of the cargo to be transported.
There is no law which requires that the delivery of the goods for carriage and the issuance of the covering
bill of lading must coincide in point of time or, for that matter, that the former should precede the latter.
Ordinarily, a receipt is not essential to a complete delivery of goods to the carrier for transportation but,
when issued, is competent and prima facie, but not conclusive, evidence of delivery to the carrier. A bill
of lading, when properly executed and delivered to a shipper, is evidence that the carrier has received
the goods described therein for shipment. Except as modified by statute, it is a general rule as to the
parties to a contract of carriage of goods in connection with which a bill of lading is issued reciting that
goods have been received for transportation, that the recital being in essence a receipt alone, is not
conclusive, but may be explained, varied or contradicted by parol or other evidence. 24
While we agree with petitioners' statement that "an airway bill estops the carrier from denying receipt
of goods of the quantity and quality described in the bill," a further reading and a more faithful quotation
of the authority cited would reveal that "(a) bill of lading may contain constituent elements of estoppel
and thus become something more than a contract between the shipper and the carrier. . . . (However),
as between the shipper and the carrier, when no goods have been delivered for shipment no recitals in
the bill can estop the carrier from showing the true facts . . . Between the consignor of goods and receiving
carrier, recitals in a bill of lading as to the goods shipped raise only a rebuttable presumption that such
goods were delivered for shipment. As between the consignor and a receiving carrier, the fact must
outweigh the recital." 25 (Emphasis supplied)
For this reason, we must perforce allow explanation by private respondents why, despite the issuance
of the airway bill and the date thereof, they deny having received the remains of Crispina Saludo on
October 26, 1976 as alleged by petitioners.
The findings of the trial court, as favorably adopted by the Court of Appeals and which we have earner
quoted, provide us with the explanation that sufficiently over comes the presumption relied on by
petitioners in insisting that the remains of their mother were delivered to and received by private
respondents on October 26, 1976. Thus —
. . . Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00 p.m.
on October 26, 1976 at the Pomierski & Son Funeral Home, sealed the shipping case
containing a hermetically sealed casket that is airtight and waterproof wherein was
contained the remains of Crispina Saludo Galdo (sic) (Exh. B). On the same date
October 26, 1976, Pomierski brought the remains to C.M.A.S. (Continental Mortuary
Air Services) at the airport (Chicago) which made the necessary arrangements such
as flights, transfers, etc; C.M.A.S. is a national service used by undertakers
throughout the nation (U.S.A.), they furnish the air pouch which the casket is
enclosed in, and they see that the remains are taken to the proper air freight
terminal (Exh. G-TWA). C.M.A.S. booked the shipment with PAL thru the carrier's
agent Air Care International, with Pomierski F.H. as the shipper and Mario (Maria)
Saludo as the consignee. PAL Airway Bill No. 079- 01180454 Ordinary was issued
wherein the requested routing was from Chicago to San Francisco on board TWA
Flight-131 of October 27;1976, and from San Francisco to Manila on board PAL
Flight No. 107 of the same date, and from Manila to Cebu on board PAL Flight 149
of October 29, 1976 (See Exh. E, also Exh. 1-PAL). 26(Emphasis ours.)
Moreover, we are persuaded to believe private respondent PAL's account as to what transpired October
26, 1976:
. . . Pursuant thereto, on 26 October 1976, CMAS acting upon the instruction of
Pomierski, F.H., the shipper requested booking of the casketed remains of Mrs.
Cristina (sic) Saludo on board PAL's San Francisco-Manila Flight No. PR 107 on
October 27, 1976.
2. To signify acceptance and confirmation of said booking, PAL issued to said
Pomierski F.H., PAL Airway Bill No. 079-01180454 dated October 27, 1976 (sic,
"10/26/76"). PAL confirmed the booking and transporting of the shipment on board
of its Flight PR 107 on October 27, 1976 on the basis of the representation of the
shipper and/or CMAS that the said cargo would arrive in San Francisco from Chicago
on board United Airlines Flight US 121 on 27 October 1976. 27
In other words, on October 26, 1976 the cargo containing the casketed remains of Crispina Saludo was
booked for PAL Flight Number PR-107 leaving San Francisco for Manila on October 27, 1976, PAL Airway
Bill No. 079-01180454 was issued, not as evidence of receipt of delivery of the cargo on October 26,
1976, but merely as a confirmation of the booking thus made for the San Francisco-Manila flight
scheduled on October 27, 1976. Actually, it was not until October 28, 1976 that PAL received physical
delivery of the body at San Francisco, as duly evidenced by the Interline Freight Transfer Manifest of the
American Airline Freight System and signed for by Virgilio Rosales at 1945H, or 7:45 P.M. on said date. 28
Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the
common carrier begins from the time the goods are delivered to the carrier. This responsibility remains
in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper
or owner exercises the right of stoppage in transitu, 29 and terminates only after the lapse of a reasonable
time for the acceptance, of the goods by the consignee or such other person entitled to receive
them. 30 And, there is delivery to the carrier when the goods are ready for and have been placed in the
exclusive possession, custody and control of the carrier for the purpose of their immediate
transportation and the carrier has accepted them. 31 Where such a delivery has thus been accepted by
the carrier, the liability of the common carrier commences eo instanti. 32
Hence, while we agree with petitioners that the extraordinary diligence statutorily required to be
observed by the carrier instantaneously commences upon delivery of the goods thereto, for such duty
to commence there must in fact have been delivery of the cargo subject of the contract of carriage. Only
when such fact of delivery has been unequivocally established can the liability for loss, destruction or
deterioration of goods in the custody of the carrier, absent the excepting causes under Article 1734,
attach and the presumption of fault of the carrier under Article 1735 be invoked.
As already demonstrated, the facts in the case at bar belie the averment that there was delivery of the
cargo to the carrier on October 26, 1976. Rather, as earlier explained, the body intended to be shipped
as agreed upon was really placed in the possession and control of PAL on October 28, 1976 and it was
from that date that private respondents became responsible for the agreed cargo under their
undertakings in PAL Airway Bill No. 079-01180454. Consequently, for the switching of caskets prior
thereto which was not caused by them, and subsequent events caused thereby, private respondents
cannot be held liable.
Petitioners, proceeding on the premise that there was delivery of the cargo to private respondents on
October 26,1976 and that the latter's extraordinary responsibility had by then become operative, insist
on foisting the blame on private respondents for the switching of the two caskets which occurred on
October 27, 1976. It is argued that since there is no clear evidence establishing the fault Continental
Mortuary Air Services (CMAS) for the mix-up, private respondents are presumably negligent pursuant to
Article 1735 of the Civil Code and, for failure to rebut such presumption, they must necessarily be held
liable; or, assuming that CMAS was at fault, the same does not absolve private respondents of liability
because whoever brought the cargo to the airport or loaded it on the plane did so as agent of private
respondents.
This contention is without merit. As pithily explained by the Court of Appeals:
The airway bill expressly provides that "Carrier certifies goods described below
were received for carriage", and said cargo was "casketed human remains of
Crispina Saludo," with "Maria Saludo as Consignee; Pomierski F.H. as Shipper; Air
Care International as carrier's agent." On the face of the said airway bill, the specific
flight numbers, specific routes of shipment and dates of departure and arrival were
typewritten, to wit: Chicago TWA Flight 131/27 to San Francisco and from San
Francisco by PAL 107 on, October 27, 1976 to Philippines and to Cebu via PAL Flight
149 on October 29, 1976. The airway bill also contains the following typewritten
words, as follows: all documents have been examined (sic). Human remains of
Crispina Saludo. Please return back (sic) first available flight to SFO.
Civil Code (Carriage of Goods) | Page 15 of 28
 But, as it turned out and was discovered later the casketed human remains which Yes, I did.
was issued PAL Airway Bill #079-1180454 was not the remains of Crispina Saludo, ATTY. JUAN COLLAS, JR.:
the casket containing her remains having been shipped to Mexico City. What was your participation with the transfer of the cargo?
However, it should be noted that, Pomierski F.H., the shipper of Mrs. Saludo's MICHAEL GIOSSO:
remains, hired Continental Mortuary Services (hereafter referred to as C.M.A.S.), I manifested the freight on a transfer manifest and physically
which is engaged in the business of transporting and forwarding human remains. moved it to PAL and concluded the transfer by signing it off.
Thus, C.M.A.S. made all the necessary arrangements such as flights, transfers, etc. ATTY. JUAN COLLAS, JR.:
— for shipment of the remains of Crispina Saludo. You brought it there yourself?
The remains were taken on October 26th, 1976, to C.M.A.S. at MICHAEL GIOSSO:
the airport. These people made all the necessary Yes sir.
arrangements, such as flights, transfers, etc. This is a national ATTY. JUAN COLIAS, JR.:
service used by undertakers throughout the nation. They Do you have anything to show that PAL received the cargo
furnished the air pouch which the casket is enclosed in, and from TWA on October 27, 1976?
they see that the remains are taken to the proper air frieght MICHAEL GIOSSO:
terminal. I was very surprised when Miss Saludo called me to Yes, I do.
say that the remains were not at the west coast terminal. I (Witness presenting a document)
immediately called C.M.A.S. They called me back in a matter ATTY. JUAN COLLAS, JR.:
of ten minutes to inform me that the remains were on a plane For purposes of clarity, Exhibit I is designated as Exhibit I-TWA.
to Mexico City. The man said that there were two bodies at the xxx xxx xxx
terminal, and somehow they were switched. . . . (Exb. 6 — ATTY. JUAN COLLAS, JR.:
"TWA", which is the memo or incident report enclosed in the This Exhibit I-TWA, could you tell what it is, what it shows?
stationery of Walter Pomierski & Sons Ltd.) MICHAEL GIOSSO:
It shows transfer of manifest on 10-27-76 to PAL at 1400 and
Consequently, when the cargo was received from C.M.A.S. at the Chicago airport
verified with two signatures as it completed the transfer.
terminal for shipment, which was supposed to contain the remains of Crispina
ATTY. JUAN COLLAS, JR.:
Saludo, Air Care International and/or TWA, had no way of determining its actual
Very good,. Who was the PAL employee who received the
contents, since the casket was hermetically sealed by the Philippine Vice-Consul in
cargo?
Chicago and in an air pouch of C.M.A.S., to the effect that Air Care International
MICHAEL GIOSSO:
and/or TWA had to rely on the information furnished by the shipper regarding the
The name is Garry Marcial." 37
cargo's content. Neither could Air Care International and/or TWA open the casket
The deposition of Alberto A. Lim, PAL's cargo supervisor at San Francisco, as deponent-witness for PAL,
for further verification, since they were not only without authority to do so, but even
makes this further clarification:
prohibited.
ATTY. CESAR P. MANALAYSAY:
Thus, under said circumstances, no fault and/or negligence can be attributed to PAL
You mentioned Airway Bill, Mr. Lim. I am showing to you a PAL
(even if Air Care International should be considered as an agent of PAL) and/or
Airway Bill Number 01180454 which for purposes of evidence,
TWA, the entire fault or negligence being exclusively with C.M.A.S. 33 (Emphasis
I would like to request that the same be marked as evidence
supplied.)
Exhibit I for PAL.
It can correctly and logically be concluded, therefore, that the switching occurred or, more accurately, xxx xxx xxx
was discovered on October 27, 1976; and based on the above findings of the Court of appeals, it In what circumstances did you encounter Exhibit I-PAL?
happened while the cargo was still with CMAS, well before the same was place in the custody of private ALBERTO A. LIM:
respondents. If I recall correctly, I was queried by Manila, our Manila office
Thus, while the Air Cargo Transfer Manifest of TWA of October 27, 1976 34 was signed by Garry Marcial with regard to a certain complaint that a consignee filed that
of PAL at 1400H, or 2:00 P.M., on the same date, thereby indicating acknowledgment by PAL of the this shipment did not arrive on the day that the consignee
transfer to them by TWA of what was in truth the erroneous cargo, said misshipped cargo was in fact expects the shipment to arrive.
withdrawn by CMAS from PAL as shown by the notation on another copy of said manifest 35 stating ATTY CESAR P. MANALAYSAY:
"Received by CMAS — Due to switch in Chicago 10/27-1805H," the authenticity of which was never Okay. Now, upon receipt of that query from your Manila
challenged. This shows that said misshipped cargo was in fact withdrawn by CMAS from PAL and the office, did you conduct any investigation to pinpoint the
correct shipment containing the body of Crispina Saludo was received by PAL only on October 28, 1976, possible causes of mishandling?
at 1945H, or 7:45 P.M., per American Airlines Interline Freight Transfer Manifest No. AA204312. 36 ALBERTO A. LIM:
Witness the deposition of TWA's ramp serviceman, Michael Giosso, on this matter: Yes.
ATTY. JUAN COLLAS, JR.: xxx xxx xxx
On that date, do (sic) you have occasion to handle or deal with ATTY. CESAR P. MANALAYSAY:
the transfer of cargo from TWA Flight No. 603 to PAL San What is the result of your investigation?
Francisco? ALBERTO A. LIM:
MICHAEL GIOSSO:
Civil Code (Carriage of Goods) | Page 16 of 28
 In the course of my investigation, I found that we received the
body on October 28, 1976, from American Airlines.
ATTY. CESAR P. MANALAYSAY:
What body are you referring to?
xxx xxx xxx
ALBERTO A. LIM:
The remains of Mrs. Cristina (sic) Saludo.
ATTY. CESAR P. MANALAYSAY:
Is that the same body mentioned in this Airway Bill?
ALBERTO A. LIM:
Yes.
ATTY. CESAR P. MANALAYSAY:
What time did you receive said body on October 28, 1976?
ALBERTO A. LIM:
If I recall correctly, approximately 7:45 of October 28, 1976.
ATTY. CESAR P. MANALAYSAY:
Do you have any proof with you to back the statement?
ALBERTO A. LIM:
Yes. We have on our records a Transfer Manifest from
American Airlines Number 204312 showing that we received
a human remains shipment belong to Mrs. Cristina (sic) Saludo
or the human remains of Mrs. Cristina (sic) Saludo.
ATTY. CESAR P. MAIALAYSAY:
At this juncture, may I request that the Transfer Manifest
referred to by the witness be marked as an evidence as Exhibit
II-PAL.
xxx xxx xxx
Mr. Lim, yesterday your co-defendant TWA presented as their
Exhibit I evidence tending to show that on October 27, 1976
at about 2:00 in the, afternoon they delivered to you a cargo
bearing human remains. Could you go over this Exhibit I and
please give us your comments as to that exhibit?
ATTY. ALBERTO C. MENDOZA:
That is a vague question. I would rather request that counsel
propound specific questions rather than asking for comments
on Exhibit I-TWA.
ATTY. CESAR P. MANALAYSAY:
In that case, I will reform my question. Could you tell us
whether TWA in fact delivered to you the human remains as
indicated in that Transfer Manifest?
ALBERTO A. LIM:
Yes, they did.
ATTY. CESAR P. MANALAYSAY:
I noticed that the Transfer Manifest of TWA marked as Exhibit
I-TWA bears the same numbers or the same entries as the
Airway Bill marked as Exhibit I-A PAL tending to show that this
is the human remains of Mrs Cristina (sic) Saludo. Could you
tell us whether this is true?
ALBERTO A. LIM:
It is true that we received human remains shipment from TWA
as indicated on this Transfer Manifest. But in the course of
investigation, it was found out that the human remains
transferred to us is not the remains of Mrs. Cristina (sic)
Saludo this is the reason why we did not board it on our
flight. 38
Petitioners consider TWA's statement that "it had to rely on the information furnished by the shipper"
a lame excuse and that its failure to prove that its personnel verified and identified the contents of the
casket before loading the same constituted negligence on the part of TWA. 39
We upbold the favorable consideration by the Court of Appeals of the following findings of the trial
court:
It was not (to) TWA, but to C.M.A.S. that the Pomierski & Son Funeral Home
delivered the casket containing the remains of Crispina Saludo. TWA would have
no knowledge therefore that the remains of Crispina Saludo were not the ones
inside the casket that was being presented to it for shipment. TWA would have to
rely on there presentations of C.M.A.S. The casket was hermetically sealed and also
sealed by the Philippine Vice Consul in Chicago. TWA or any airline for that matter
would not have opened such a sealed casket just for the purpose of ascertaining
whose body was inside and to make sure that the remains inside were those of the
particular person indicated to be by C.M.A.S. TWA had to accept whatever
information was being furnished by the shipper or by the one presenting the casket
for shipment. And so as a matter of fact, TWA carried to San Francisco and
transferred to defendant PAL a shipment covered by or under PAL Airway Bill No.
079-ORD-01180454, the airway bill for the shipment of the casketed remains of
Crispina Saludo. Only, it turned out later, while the casket was already with PAL,
that what was inside the casket was not the body of Crispina Saludo so much so
that it had to be withdrawn by C.M.A.S. from PAL. The body of Crispina Saludo had
been shipped to Mexico. The casket containing the remains of Crispina Saludo was
transshipped from Mexico and arrived in San Francisco the following day on board
American Airlines. It was immediately loaded by PAL on its flight for Manila.
The foregoing points at C.M.A.S., not defendant TWA much less defendant PAL, as
the ONE responsible for the switching or mix-up of the two bodies at the Chicago
Airport terminal, and started a chain reaction of the misshipment of the body of
Crispina Saludo and a one-day delay in the delivery thereof to its destination. 40
Verily, no amount of inspection by respondent airline companies could have guarded against the
switching that had already taken place. Or, granting that they could have opened the casket to inspect
its contents, private respondents had no means of ascertaining whether the body therein contained was
indeed that of Crispina Saludo except, possibly, if the body was that of a male person and such fact was
visually apparent upon opening the casket. However, to repeat, private respondents had no authority
to unseal and open the same nor did they have any reason or justification to resort thereto.
It is the right of the carrier to require good faith on the part of those persons who deliver goods to be
carried, or enter into contracts with it, and inasmuch as the freight may depend on the value of the
article to be carried, the carrier ordinarily has the right to inquire as to its value. Ordinarily, too, it is the
duty of the carrier to make inquiry as to the general nature of the articles shipped and of their value
before it consents to carry them; and its failure to do so cannot defeat the shipper's right to recovery of
the full value of the package if lost, in the absence of showing of fraud or deceit on the part of the
shipper. In the absence of more definite information, the carrier has a the right to accept shipper's marks
as to the contents of the package offered for transportation and is not bound to inquire particularly
about them in order to take advantage of a false classification and where a shipper expressly represents
the contents of a package to be of a designated character, it is not the duty of the carrier to ask for a
repetition of the statement nor disbelieve it and open the box and see for itself. 41 However, where a
common carrier has reasonable ground to suspect that the offered goods are of a dangerous or illegal
character, the carrier has the right to know the character of such goods and to insist on an inspection, if
reasonable and practical under the circumstances, as a condition of receiving and transporting such
goods. 42
It can safely be said then that a common carrier is entitled to fair representation of the nature and value
of the goods to be carried, with the concomitant right to rely thereon, and further noting at this juncture
Civil Code (Carriage of Goods) | Page 17 of 28
that a carrier has no obligation to inquire into the correctness or sufficiency of such information. 43 The
consequent duty to conduct an inspection thereof arises in the event that there should be reason to
doubt the veracity of such representations. Therefore, to be subjected to unusual search, other than the
routinary inspection procedure customarily undertaken, there must exist proof that would justify cause
for apprehension that the baggage is dangerous as to warrant exhaustive inspection, or even refusal to
accept carriage of the same; and it is the failure of the carrier to act accordingly in the face of such proof
that constitutes the basis of the common carrier's liability. 44
In the case at bar, private respondents had no reason whatsoever to doubt the truth of the shipper's
representations. The airway bill expressly providing that "carrier certifies goods received below were
received for carriage," and that the cargo contained "casketed human remains of Crispina Saludo," was
issued on the basis of such representations. The reliance thereon by private respondents was reasonable
and, for so doing, they cannot be said to have acted negligently. Likewise, no evidence was adduced to
suggest even an iota of suspicion that the cargo presented for transportation was anything other than
what it was declared to be, as would require more than routine inspection or call for the carrier to insist
that the same be opened for scrutiny of its contents per declaration.
Neither can private respondents be held accountable on the basis of petitioners' preposterous
proposition that whoever brought the cargo to the airport or loaded it on the airplane did so as agent of
private respondents, so that even if CMAS whose services were engaged for the transit arrangements
for the remains was indeed at fault, the liability therefor would supposedly still be attributable to private
respondents.
While we agree that the actual participation of CMAS has been sufficiently and correctly established, to
hold that it acted as agent for private respondents would be both an inaccurate appraisal and an
unwarranted categorization of the legal position it held in the entire transaction.
It bears repeating that CMAS was hired to handle all the necessary shipping arrangements for the
transportation of the human remains of Crispina Saludo to Manila. Hence, it was to CMAS that the
Pomierski & Son Funeral Home, as shipper, brought the remains of petitioners' mother for shipment,
with Maria Saludo as consignee. Thereafter, CMAS booked the shipment with PAL through the carrier's
agent, Air Care International. 45 With its aforestated functions, CMAS may accordingly be classified as a
forwarder which, by accepted commercial practice, is regarded as an agent of the shipper and not of the
carrier. As such, it merely contracts for the transportation of goods by carriers, and has no interest in
the freight but receives compensation from the shipper as his agent. 46
At this point, it can be categorically stated that, as culled from the findings of both the trial court and
appellate courts, the entire chain of events which culminated in the present controversy was not due to
the fault or negligence of private respondents. Rather, the facts of the case would point to CMAS as the
culprit. Equally telling of the more likely possibility of CMAS' liability is petitioners' letter to and
demanding an explanation from CMAS regarding the statement of private respondents laying the blame
on CMAS for the incident, portions of which, reading as follows:
. . . we were informed that the unfortunate a mix-up occurred due to your
negligence. . . .
Likewise, the two airlines pinpoint the responsibility upon your agents. Evidence
were presented to prove that allegation.
On the face of this overwhelming evidence we could and should have filed a case
against you. . . . 47
clearly allude to CMAS as the party at fault. This is tantamount to an admission by petitioners that they
consider private respondents without fault, or is at the very least indicative of the fact that petitioners
entertained serious doubts as to whether herein private respondents were responsible for the
unfortunate turn of events.
Undeniably, petitioners' grief over the death of their mother was aggravated by the unnecessary
inconvenience and anxiety that attended their efforts to bring her body home for a decent burial. This
is unfortunate and calls for sincere commiseration with petitioners. But, much as we would like to give
them consolation for their undeserved distress, we are barred by the inequity of allowing recovery of
the damages prayed for by them at the expense of private respondents whose fault or negligence in the
very acts imputed to them has not been convincingly and legally demonstrated.
Neither are we prepared to delve into, much less definitively rule on, the possible liability of CMAS as
the evaluation and adjudication of the same is not what is presently at issue here and is best deferred
to another time and addressed to another forum.
II. Petitioners further fault the Court of Appeals for ruling that there was no contractual breach on the
part of private respondents as would entitle petitioners to damages.
Petitioners hold that respondent TWA, by agreeing to transport the remains of petitioners' mother on
its Flight 131 from Chicago to San Francisco on October 27, 1976, made itself a party to the contract of
carriage and, therefore, was bound by the terms of the issued airway bill. When TWA undertook to ship
the remains on its Flight 603, ten hours earlier than scheduled, it supposedly violated the express
agreement embodied in the airway bill. It was allegedly this breach of obligation which compounded, if
not directly caused, the switching of the caskets.
In addition, petitioners maintain that since there is no evidence as to who placed the body on board
Flight 603, or that CMAS actually put the cargo on that flight, or that the two caskets at the Chicago
airport were to be transported by the same airline, or that they came from the same funeral home, or
that both caskets were received by CMAS, then the employees or agents of TWA presumably caused the
mix-up by loading the wrong casket on the plane. For said error, they contend, TWA must necessarily be
presumed negligent and this presumption of negligence stands undisturbed unless rebutting evidence
is presented to show that the switching or misdelivery was due to circumstances that would exempt the
carrier from liability.
Private respondent TWA professes otherwise. Having duly delivered or transferred the cargo to its co-
respondent PAL on October 27, 1976 at 2:00 P.M., as supported by the TWA Transfer Manifest, TWA
faithfully complied with its obligation under the airway bill. Said faithful compliance was not affected by
the fact that the remains were shipped on an earlier flight as there was no fixed time for completion of
carriage stipulated on. Moreover, the carrier did not undertake to carry the cargo aboard any specified
aircraft, in view of the condition on the back of the airway bill which provides:
CONDITIONS OF CONTRACT
xxx xxx xxx
It is agreed that no time is fixed for the completion of carriage hereunder and that
Carrier may without notice substitute alternate carriers or aircraft. Carrier assumes
no obligation to carry the goods by any specified aircraft or over any particular
route or routes or to make connection at any point according to any particular
schedule, and Carrier is hereby authorized to select, or deviate from the route or
routes of shipment, notwithstanding that the same may be stated on the face
hereof. The shipper guarantees payment of all charges and advances. 48
Hence, when respondent TWA shipped the body on earlier flight and on a different aircraft, it was acting
well within its rights. We find this argument tenable.
The contention that there was contractual breach on the part of private respondents is founded on the
postulation that there was ambiguity in the terms of the airway bill, hence petitioners' insistence on the
application of the rules on interpretation of contracts and documents. We find no such ambiguity. The
terms are clear enough as to preclude the necessity to probe beyond the apparent intendment of the
contractual provisions.
The hornbook rule on interpretation of contracts consecrates the primacy of the intention of the parties,
the same having the force of law between them. When the terms of the agreement are clear and explicit,
that they do not justify an attempt to read into any alleged intention of the parties, the terms are to be
understood literally just as they appear on the face of the contract. 49 The various stipulations of a
contract shall be interpreted together 50 and such a construction is to be adopted as will give effect to
all provisions thereof. 51 A contract cannot be construed by parts, but its clauses should be interpreted
in relation to one another. The whole contract must be interpreted or read together in order to arrive
at its true meaning. Certain stipulations cannot be segregated and then made to control; neither do
particular words or phrases necessarily determine the character of a contract. The legal effect of the
Civil Code (Carriage of Goods) | Page 18 of 28
contract is not to be determined alone by any particular provision disconnected from all others, but in
the ruling intention of the parties as gathered from all the language they have used and from their
contemporaneous and subsequent acts. 52
Turning to the terms of the contract at hand, as presented by PAL Air Waybill No. 079-01180454,
respondent court approvingly quoted the trial court's disquisition on the aforequoted condition
appearing on the reverse side of the airway bill and its disposition of this particular assigned error:
The foregoing stipulation fully answers plaintiffs' objections to the one-day delay
and the shipping of the remains in TWA Flight 603 instead of TWA Flight 131. Under
the stipulation, parties agreed that no time was fixed to complete the contract of
carriage and that the carrier may, without notice, substitute alternate carriers or
aircraft. The carrier did not assume the obligation to carry the shipment on any
specified aircraft.
xxx xxx xxx
Furthermore, contrary to the claim of plaintiffs-appellants, the conditions of the Air
Waybill are big enough to be read and noticed. Also, the mere fact that the cargo
in question was shipped in TWA Flight 603, a flight earlier on the same day than
TWA Flight 131, did not in any way cause or add to the one-day delay complained
of and/or the switching or mix-up of the bodies. 53
Indubitably, that private respondent can use substitute aircraft even without notice and without the
assumption of any obligation whatsoever to carry the goods on any specified aircraft is clearly
sanctioned by the contract of carriage as specifically provided for under the conditions thereof.
Petitioners' invocation of the interpretative rule in the Rules of Court that written words control printed
words in documents, 54 to bolster their assertion that the typewritten provisions regarding the routing
and flight schedule prevail over the printed conditions, is tenuous. Said rule may be considered only
when there is inconsistency between the written and printed words of the contract.
As previously stated, we find no ambiguity in the contract subject of this case that would call for the
application of said rule. In any event, the contract has provided for such a situation by explicitly stating
that the above condition remains effective "notwithstanding that the same (fixed time for completion
of carriage, specified aircraft, or any particular route or schedule) may be stated on the face hereof."
While petitioners hinge private respondents' culpability on the fact that the carrier "certifies goods
described below were received for carriage," they may have overlooked that the statement on the face
of the airway bill properly and completely reads —
Carrier certifies goods described below were received for carriage subject to the
Conditions on the reverse hereof the goods then being in apparent good order and
condition except as noted hereon. 55 (Emphasis ours.)
Private respondents further aptly observe that the carrier's certification regarding receipt of the goods
for carriage "was of a smaller print than the condition of the Air Waybill, including Condition No. 5 —
and thus if plaintiffs-appellants had recognized the former, then with more reason they were aware of
the latter. 56
In the same vein, it would also be incorrect to accede to the suggestion of petitioners that the
typewritten specifications of the flight, routes and dates of departures and arrivals on the face of the
airway bill constitute a special contract which modifies the printed conditions at the back thereof. We
reiterate that typewritten provisions of the contract are to be read and understood subject to and in
view of the printed conditions, fully reconciling and giving effect to the manifest intention of the parties
to the agreement.
The oft-repeated rule regarding a carrier's liability for delay is that in the absence of a special contract,
a carrier is not an insurer against delay in transportation of goods. When a common carrier undertakes
to convey goods, the law implies a contract that they shall be delivered at destination within a
reasonable time, in the absence, of any agreement as to the time of delivery. 57 But where a carrier has
made an express contract to transport and deliver property within a specified time, it is bound to fulfill
its contract and is liable for any delay, no matter from what cause it may have arisen. 58 This result
logically follows from the well-settled rule that where the law creates a duty or charge, and the party is
disabled from performing it without any default in himself, and has no remedy over, then the law will
excuse him, but where the party by his own contract creates a duty or charge upon himself, he is bound
to make it good notwithstanding any accident or delay by inevitable necessity because he might
have provided against it by contract. Whether or not there has been such an undertaking on the part of
the carrier to be determined from the circumstances surrounding the case and by application of the
ordinary rules for the interpretation of contracts. 59
Echoing the findings of the trial court, the respondent court correctly declared that —
In a similar case of delayed delivery of air cargo under a very similar stipulation contained in
the airway bill which reads: "The carrier does not obligate itself to carry the goods by any
specified aircraft or on a specified time. Said carrier being hereby authorized to deviate from
the route of the shipment without any liability therefor", our Supreme Court ruled that
common carriers are not obligated by law to carry and to deliver merchandise, and persons
are not vested with the right to prompt delivery, unless such common carriers previously
assume the obligation. Said rights and obligations are created by a specific contract entered
into by the parties (Mendoza vs. PAL, 90 Phil. 836).
There is no showing by plaintiffs that such a special or specific contract had been entered into
between them and the defendant airline companies.
And this special contract for prompt delivery should call the attention of the carrier to the
circumstances surrounding the case and the approximate amount of damages to be suffered
in case of delay (See Mendoza vs. PAL, supra). There was no such contract entered into in the
instant case.60
Also, the theory of petitioners that the specification of the flights and dates of departure and arrivals
constitute a special contract that could prevail over the printed stipulations at the back of the airway bill
is vacuous. To countenance such a postulate would unduly burden the common carrier for that would
have the effect of unilaterally transforming every single bill of lading or trip ticket into a special contract
by the simple expedient of filling it up with the particulars of the flight, trip or voyage, and thereby
imposing upon the carrier duties and/or obligations which it may not have been ready or willing to
assume had it been timely, advised thereof.
Neither does the fact that the challenged condition No. 5 was printed at the back of the airway bill
militate against its binding effect on petitioners as parties to the contract, for there were sufficient
indications on the face of said bill that would alert them to the presence of such additional condition to
put them on their guard. Ordinary prudence on the part of any person entering or contemplating to
enter into a contract would prompt even a cursory examination of any such conditions, terms and/or
stipulations.
There is a holding in most jurisdictions that the acceptance of a bill of lading without dissent raises a
presumption that all terms therein were brought to the knowledge of the shipper and agreed to by him,
and in the absence of fraud or mistake, he is estopped from thereafter denying that he assented to such
terms. This rule applies with particular force where a shipper accepts a bill of lading with full knowledge
of its contents, and acceptance under such circumstances makes it a binding contract. In order that any
presumption of assent to a stipulation in a bill of lading limiting the liability of a carrier may arise, it must
appear that the clause containing this exemption from liability plainly formed a part of the contract
contained in the bill of lading. A stipulation printed on the back of a receipt or bill of lading or on papers
attached to such receipt will be quite as effective as if printed on its face, if it is shown that the consignor
knew of its terms. Thus, where a shipper accepts a receipt which states that its conditions are to be
found on the back, such receipt comes within the general rule, and the shipper is held to have accepted
and to be bound by the conditions there to be found. 61
Granting arguendo that Condition No. 5 partakes of the nature of a contract of adhesion and as such
must be construed strictly against the party who drafted the same or gave rise to any ambiguity therein,
it should be borne in mind that a contract of adhesion may be struck down as void and unenforceable,
for being subversive of public policy, only when the weaker party is imposed upon in dealing with the
dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived
of the opportunity to bargain on equal footing. 62However, Ong Yiu vs. Court of Appeals, et al 63 instructs
us that contracts of adhesion are not entirely prohibited. The one who adheres to the contract is in
Civil Code (Carriage of Goods) | Page 19 of 28
reality free to reject it entirely; if he adheres, be gives his consent. Accordingly, petitioners, far from
being the weaker party in this situation, duly signified their presumed assent to all terms of the contract
through their acceptance of the airway bill and are consequently bound thereby. It cannot be gainsaid
that petitioners' were not without several choices as to carriers in Chicago with its numerous airways
and airliner servicing the same.
We wish to allay petitioners' apprehension that Condition No. 5 of the airway bill is productive of
mischief as it would validate delay in delivery, sanction violations of contractual obligations with
impunity or put a premium on breaches of contract.
Just because we have said that condition No. 5 of the airway bill is binding upon the parties to and fully
operative in this transaction, it does not mean, and let this serve as fair warning to respondent carriers,
that they can at all times whimsically seek refuge from liability in the exculpatory sanctuary of said
Condition No. 5 or arbitrarily vary routes, flights and schedules to the prejudice of their customers. This
condition only serves to insulate the carrier from liability in those instances when changes in routes,
flights and schedules are clearly justified by the peculiar circumstances of a particular case, or by general
transportation practices, customs and usages, or by contingencies or emergencies in aviation such as
weather turbulence, mechanical failure, requirements of national security and the like. And even as it is
conceded that specific routing and other navigational arrangements for a trip, flight or voyage, or
variations therein, generally lie within the discretion of the carrier in the absence of specific routing
instructions or directions by the shipper, it is plainly incumbent upon the carrier to exercise its rights
with due deference to the rights, interests and convenience of its customers.
A common carrier undertaking to transport property has the implicit duty to carry and deliver it within
reasonable time, absent any particular stipulation regarding time of delivery, and to guard against delay.
In case of any unreasonable delay, the carrier shall be liable for damages immediately and proximately
resulting from such neglect of duty. 64 As found by the trial court, the delay in the delivery of the remains
of Crispina Saludo, undeniable and regrettable as it was, cannot be attributed to the fault, negligence or
malice of private respondents, 65 a conclusion concurred in by respondent court and which we are not
inclined to disturb.
We are further convinced that when TWA opted to ship the remains of Crispina Saludo on an earlier
flight, it did so in the exercise of sound discretion and with reasonable prudence, as shown by the
explanation of its counsel in his letter of February 19, 1977 in response to petitioners' demand letter:
Investigation of TWA's handling of this matter reveals that although the shipment
was scheduled on TWA Flight 131 of October 27, 1976, it was actually boarded on
TWA Flight 603 of the same day, approximately 10 hours earlier, in order to assure
that the shipment would be received in San Francisco in sufficient time for transfer
to PAL. This transfer was effected in San Francisco at 2:00 P.M. on October 27,
1976. 66
Precisely, private respondent TWA knew of the urgency of the shipment by reason of this notation on
the lower portion of the airway bill: "All documents have been certified. Human remains of Cristina (sic)
Saludo. Please return bag first available flight to SFO." Accordingly, TWA took it upon itself to carry the
remains of Crispina Saludo on an earlier flight, which we emphasize it could do under the terms of the
airway bill, to make sure that there would be enough time for loading said remains on the transfer flight
on board PAL.
III. Petitioners challenge the validity of respondent court's finding that private respondents are not liable
for tort on account of the humiliating, arrogant and indifferent acts of their officers and personnel. They
posit that since their mother's remains were transported ten hours earlier than originally scheduled,
there was no reason for private respondents' personnel to disclaim knowledge of the arrival or
whereabouts of the same other than their sheer arrogance, indifference and extreme insensitivity to the
feelings of petitioners. Moreover, being passengers and not merely consignors of goods, petitioners had
the right to be treated with courtesy, respect, kindness and due consideration.
In riposte, TWA claims that its employees have always dealt politely with all clients, customers and the
public in general. PAL, on the other hand, declares that in the performance of its obligation to the riding
public, other customers and clients, it has always acted with justice, honesty, courtesy and good faith.
Respondent appellate court found merit in and reproduced the trial court's refutation of this assigned
error:
About the only evidence of plaintiffs that may have reference to the manner with
which the personnel of defendants treated the two plaintiffs at the San Francisco
Airport are the following pertinent portions of Maria Saludo's testimony:
Q When you arrived there, what did you do, if any?
A I immediately went to the TWA counter and I inquired about whether
my mother was there or if' they knew anything about it.
Q What was the answer?
A They said they do not know. So, we waited.
Q About what time was that when you reached San Francisco from
Chicago?
A I think 5 o'clock. Somewhere around that in the afternoon.
Q You made inquiry it was immediately thereafter?
A Right after we got off the plane.
Q Up to what time did you stay in the airport to wait until the TWA
people could tell you the whereabouts?
A Sorry, Sir, but the TWA did not tell us anything. We stayed there until
about 9 o'clock. They have not heard anything about it. They did not say
anything.
Q Do you want to convey to the Court that from 5 up to 9 o'clock in the
evening you yourself went back to the TWA and they could not tell you
where the remains of your mother were?
A Yes sir.
Q And after nine o'clock, what did you do?
A I told my brother my Mom was supposed to be on the Philippine
Airlines flight. "Why don't" we check with PAL instead to see if she was
there?" We tried to comfort each other. I told him anyway that was a
shortest flight from Chicago to California. We will be with our mother on
this longer flight. So, we checked with the PAL.
Q What did you find?
A We learned, Yes, my Mom would be on the flight.
Q Who was that brother?
A Saturnino Saludo.
Q And did you find what was your flight from San Francisco to the
Philippines?
A I do not know the number. It was the evening flight of the Philippine
Airline(s) from San Francisco to Manila.
Q You took that flight with your mother?
A We were scheduled to, Sir.
Q Now, you could not locate the remains of your mother in San Francisco
could you tell us what did you feel?
A After we were told that my mother was not there?
Q After you learned that your mother could not fly with you from Chicago
to California?
A Well, I was very upset. Of course, I wanted the confirmation that my
mother was in the West Coast. The fliqht was about 5 hours from Chicago
to California. We waited anxiously all that time on the plane. I wanted to
be assured about my mother's remains. But there was nothing and we
could not get any assurance from anyone about it.
Q Your feeling when you reached San Francisco and you could not find
out from the TWA the whereabouts of the remains, what did you feel?
A Something nobody would be able to describe unless he experiences it
himself. It is a kind of panic. I think it's a feeling you are about to go crazy.
Civil Code (Carriage of Goods) | Page 20 of 28
 It is something I do not want to live through again. (Inting, t.s.n., Aug. 9,
1983, pp. 14-18).
The foregoing does not show any humiliating or arrogant manner with which the
personnel of both defendants treated the two plaintiffs. Even their alleged
indifference is not clearly established. The initial answer of the TWA personnel at
the counter that they did not know anything about the remains, and later, their
answer that they have not heard anything about the remains, and the inability of
the TWA counter personnel to inform the two plaintiffs of the whereabouts of the
remains, cannot be said to be total or complete indifference to the said plaintiffs.
At any rate, it is any rude or discourteous conduct, malfeasance or neglect, the use
of abusive or insulting language calculated to humiliate and shame passenger or
had faith by or on the part of the employees of the carrier that gives the passenger
an action for damages against the carrier (Zulueta vs. Pan American World Airways,
43 SCRA 397; Air France vs. Carrascoso, et al., 18 SCRA 155; Lopez, et al. vs. Pan
American World Airways, 16 SCRA 431; Northwest Airlines, Inc. vs. Cuenca, 14 SCRA
1063), and none of the above is obtaining in the instant case. 67
We stand by respondent court's findings on this point, but only to the extent where it holds that the
manner in which private respondent TWA's employees dealt with petitioners was not grossly
humiliating, arrogant or indifferent as would assume the proportions of malice or bad faith and lay the
basis for an award of the damages claimed. It must however, be pointed out that the lamentable
actuations of respondent TWA's employees leave much to be desired, particularly so in the face of
petitioners' grief over the death of their mother, exacerbated by the tension and anxiety wrought by the
impasse and confusion over the failure to ascertain over an appreciable period of time what happened
to her remains.
Airline companies are hereby sternly admonished that it is their duty not only to cursorily instruct but
to strictly require their personnel to be more accommodating towards customers, passengers and the
general public. After all, common carriers such as airline companies are in the business of rendering
public service, which is the primary reason for their enfranchisement and recognition in our law. Because
the passengers in a contract of carriage do not contract merely for transportation, they have a right to
be treated with kindness, respect, courtesy and consideration. 68 A contract to transport passengers is
quite different in kind and degree from any other contractual relation, and generates a relation attended
with public duty. The operation of a common carrier is a business affected with public interest and must
be directed to serve the comfort and convenience of passengers. 69 Passengers are human beings with
human feelings and emotions; they should not be treated as mere numbers or statistics for revenue.
The records reveal that petitioners, particularly Maria and Saturnino Saludo, agonized for nearly five
hours, over the possibility of losing their mother's mortal remains, unattended to and without any
assurance from the employees of TWA that they were doing anything about the situation. This is not to
say that petitioners were to be regaled with extra special attention. They were, however, entitled to the
understanding and humane consideration called for by and commensurate with the extraordinary
diligence required of common carriers, and not the cold insensitivity to their predicament. It is hard to
believe that the airline's counter personnel were totally helpless about the situation. Common sense
would and should have dictated that they exert a little extra effort in making a more extensive inquiry,
by themselves or through their superiors, rather than just shrug off the problem with a callous and
uncaring remark that they had no knowledge about it. With all the modern communications equipment
readily available to them, which could have easily facilitated said inquiry and which are used as a matter
of course by airline companies in their daily operations, their apathetic stance while not legally
reprehensible is morally deplorable.
Losing a loved one, especially one's, parent, is a painful experience. Our culture accords the tenderest
human feelings toward and in reverence to the dead. That the remains of the deceased were
subsequently delivered, albeit belatedly, and eventually laid in her final resting place is of little
consolation. The imperviousness displayed by the airline's personnel, even for just that fraction of time,
was especially condemnable particularly in the hour of bereavement of the family of Crispina Saludo,
intensified by anguish due to the uncertainty of the whereabouts of their mother's remains. Hence, it is
quite apparent that private respondents' personnel were remiss in the observance of that genuine
human concern and professional attentiveness required and expected of them.
The foregoing observations, however, do not appear to be applicable or imputable to respondent PAL
or its employees. No attribution of discourtesy or indifference has been made against PAL by petitioners
and, in fact, petitioner Maria Saludo testified that it was to PAL that they repaired after failing to receive
proper attention from TWA. It was from PAL that they received confirmation that their mother's remains
would be on the same flight to Manila with them.
We find the following substantiation on this particular episode from the deposition of Alberto A. Lim,
PAL's cargo supervisor earlier adverted to, regarding their investigation of and the action taken on
learning of petitioner's problem:
ATTY. ALBERTO C. MENDOZA:
Yes.
Mr. Lim, what exactly was your procedure adopted in your so called
investigation?
ALBERTO A. LIM:
I called the lead agent on duty at that time and requested for a copy of
airway bill, transfer manifest and other documents concerning the
shipment.
ATTY ALBERTO C. MENDOZA:
Then, what?
ALBERTO A. LIM:
They proceeded to analyze exactly where PAL failed, if any, in forwarding
the human remains of Mrs. Cristina (sic) Saludo. And I found out that
there was not (sic) delay in shipping the remains of Mrs. Saludo to
Manila. Since we received the body from American Airlines on 28
October at 7:45 and we expedited the shipment so that it could have
been loaded on our flight leaving at 9:00 in the evening or just barely one
hour and 15 minutes prior to the departure of the aircraft. That is so (sic)
being the case, I reported to Manila these circumstances. 70
IV. Finally, petitioners insist, as a consequence of the delay in the shipment of their mother's remains
allegedly caused by wilful contractual breach, on their entitlement to actual, moral and exemplary
damages as well as attorney's fees, litigation expenses, and legal interest.
The uniform decisional tenet in our jurisdiction bolds that moral damages may be awarded for wilful or
fraudulent breach of contract 71 or when such breach is attended by malice or bad faith. 72 However, in
the absence of strong and positive evidence of fraud, malice or bad faith, said damages cannot be
awarded. 73 Neither can there be an award of exemplary damages 74 nor of attorney's fees 75 as an item
of damages in the absence of proof that defendant acted with malice, fraud or bad faith.
The censurable conduct of TWA's employees cannot, however, be said to have approximated the
dimensions of fraud, malice or bad faith. It can be said to be more of a lethargic reaction produced and
engrained in some people by the mechanically routine nature of their work and a racial or societal
culture which stultifies what would have been their accustomed human response to a human need
under a former and different ambience.
Nonetheless, the facts show that petitioners' right to be treated with due courtesy in accordance with
the degree of diligence required by law to be exercised by every common carrier was violated by TWA
and this entitles them, at least, to nominal damages from TWA alone. Articles 2221 and 2222 of the Civil
Code make it clear that nominal damages are not intended for indemnification of loss suffered but for
the vindication or recognition of a right violated of invaded. They are recoverable where some injury has
been done but the amount of which the evidence fails to show, the assessment of damages being left to
the discretion of the court according to the circumstances of the case. 76 In the exercise of our discretion,
we find an award of P40,000.00 as nominal damages in favor of, petitioners to be a reasonable amount
under the circumstances of this case.
Civil Code (Carriage of Goods) | Page 21 of 28
WHEREFORE, with the modification that an award of P40,000.00 as and by way of nominal damages is
hereby granted in favor of petitioners to be paid by respondent Trans World Airlines, the appealed
decision is AFFIRMED in all other respects.
SO ORDERED.
G.R. No. L-56487 October 21, 1991
REYNALDA GATCHALIAN, petitioner, vs. ARSENIO DELIM and the HON. COURT OF
APPEALS, respondents.
FELICIANO, J.:p
At noon time on 11 July 1973, petitioner Reynalda Gatchalian boarded, as a paying passenger,
respondent's "Thames" mini bus at a point in San Eugenio, Aringay, La Union, bound for Bauang, of the
same province. On the way, while the bus was running along the highway in Barrio Payocpoc, Bauang,
Union, "a snapping sound" was suddenly heard at one part of the bus and, shortly thereafter, the vehicle
bumped a cement flower pot on the side of the road, went off the road, turned turtle and fell into a
ditch. Several passengers, including petitioner Gatchalian, were injured. They were promptly taken to
Bethany Hospital at San Fernando, La Union, for medical treatment. Upon medical examination,
petitioner was found to have sustained physical injuries on the leg, arm and forehead, specifically
described as follows: lacerated wound, forehead; abrasion, elbow, left; abrasion, knee, left; abrasion,
lateral surface, leg, left. 1
On 14 July 1973, while injured. passengers were confined in the hospital, Mrs. Adela Delim, wife of
respondent, visited them and later paid for their hospitalization and medical expenses. She also gave
petitioner P12.00 with which to pay her transportation expense in going home from the hospital.
However, before Mrs. Delim left, she had the injured passengers, including petitioner, sign an already
prepared Joint Affidavit which stated, among other things:
That we were passengers of Thames with Plate No. 52-222 PUJ Phil. 73 and victims
after the said Thames met an accident at Barrio Payocpoc Norte, Bauang, La Union
while passing through the National Highway No. 3;
That after a thorough investigation the said Thames met the accident due to
mechanical defect and went off the road and turned turtle to the east canal of the
road into a creek causing physical injuries to us;
xxx xxx xxx
That we are no longer interested to file a complaint, criminal or civil against the said
driver and owner of the said Thames, because it was an accident and the said driver
and owner of the said Thames have gone to the extent of helping us to be treated
upon our injuries.
xxx xxx xxx 2
(Emphasis supplied)
Notwithstanding this document, petitioner Gathalian filed with the then Court of First Instance of La
Union an action extra contractu to recover compensatory and moral damages. She alleged in the
complaint that her injuries sustained from the vehicular mishap had left her with a conspicuous white
scar measuring 1 by 1/2 inches on the forehead, generating mental suffering and an inferiority complex
on her part; and that as a result, she had to retire in seclusion and stay away from her friends. She also
alleged that the scar diminished her facial beauty and deprived her of opportunities for employment.
She prayed for an award of: P10,000.00 for loss of employment and other opportunities; P10,000.00 for
the cost of plastic surgery for removal of the scar on her forehead; P30,000.00 for moral damages; and
P1,000.00 as attorney's fees.
In defense, respondent averred that the vehicular mishap was due to force majeure, and that petitioner
had already been paid and moreover had waived any right to institute any action against him (private
respondent) and his driver, when petitioner Gatchalian signed the Joint Affidavit on 14 July 1973.
After trial, the trial court dismissed the complaint upon the ground that when petitioner Gatchalian
signed the Joint Affidavit, she relinquished any right of action (whether criminal or civil) that she may
have had against respondent and the driver of the mini-bus.
On appeal by petitioner, the Court of Appeals reversed the trial court's conclusion that there had been
a valid waiver, but affirmed the dismissal of the case by denying petitioner's claim for damages:
We are not in accord, therefore, of (sic) the ground of the trial court's dismissal of
the complaint, although we conform to the trial court's disposition of the case —
its dismissal.
IN VIEW OF THE FOREGOING considerations, there being no error committed by
the lower court in dismissing the plaintiff-appellant's complaint, the judgment of
dismissal is hereby affirmed.
Without special pronouncement as to costs.
SO ORDERED. 3
In the present Petition for Review filed in forma pauperis, petitioner assails the decision of the Court of
Appeals and ask this Court to award her actual or compensatory damages as well as moral damages.
We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of action
had been made by petitioner. The relevant language of the Joint Affidavit may be quoted again:
That we are no longer interested to file a complaint, criminal or civil against the said
driver and owner of the said Thames, because it was an accident and the said driver
and owner of the said Thames have gone to the extent of helping us to be treated
upon our injuries. (Emphasis supplied)
A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal
terms which leave no doubt as to the intention of a person to give up a right or benefit which
legally pertains to him. 4 A waiver may not casually be attributed to a person when the terms
thereof do not explicitly and clearly evidence an intent to abandon a right vested in such
person.
The degree of explicitness which this Court has required in purported waivers is illustrated in Yepes and
Susaya v. Samar Express Transit (supra), where the Court in reading and rejecting a purported waiver
said:
. . . It appears that before their transfer to the Leyte Provincial Hospital, appellees
were asked to sign as, in fact, they signed the document Exhibit I wherein they
stated that "in consideration of the expenses which said operator has incurred in
properly giving us the proper medical treatment, we hereby manifest our desire to
waive any and all claims against the operator of the Samar Express Transit."
xxx xxx xxx
Even a cursory examination of the document mentioned above will readily show
that appellees did not actually waive their right to claim damages from appellant
for the latter's failure to comply with their contract of carriage. All that said
document proves is that they expressed a "desire" to make the waiver — which
obviously is not the same as making an actual waiver of their right. A waiver of the
kind invoked by appellant must be clear and unequivocal (Decision of the Supreme
Court of Spain of July 8, 1887) — which is not the case of the one relied upon in this
appeal. (Emphasis supplied)
If we apply the standard used in Yepes and Susaya, we would have to conclude that the terms
of the Joint Affidavit in the instant case cannot be regarded as a waiver cast in "clear and
unequivocal" terms. Moreover, the circumstances under which the Joint Affidavit was signed
by petitioner Gatchalian need to be considered. Petitioner testified that she was still reeling
from the effects of the vehicular accident, having been in the hospital for only three days,
when the purported waiver in the form of the Joint Affidavit was presented to her for signing;
that while reading the same, she experienced dizziness but that, seeing the other passengers
who had also suffered injuries sign the document, she too signed without bothering to read
the Joint Affidavit in its entirety. Considering these circumstances there appears substantial
Civil Code (Carriage of Goods) | Page 22 of 28
 doubt whether petitioner understood fully the import of the Joint Affidavit (prepared by or at
the instance of private respondent) she signed and whether she actually intended thereby to
waive any right of action against private respondent.
Finally, because what is involved here is the liability of a common carrier for injuries sustained by
passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must
construe any such purported waiver most strictly against the common carrier. For a waiver to be valid
and effective, it must not be contrary to law, morals, public policy or good
customs. 5 To uphold a supposed waiver of any right to claim damages by an injured passenger, under
circumstances like those exhibited in this case, would be to dilute and weaken the standard of
extraordinary diligence exacted by the law from common carriers and hence to render that standard
unenforceable. 6 We believe such a purported waiver is offensive to public policy.
Petitioner Gatchalian also argues that the Court of Appeals, having by majority vote held that there was
no enforceable waiver of her right of action, should have awarded her actual or compensatory and moral
damages as a matter of course.
We have already noted that a duty to exercise extraordinary diligence in protecting the safety of its
passengers is imposed upon a common carrier. 7 In case of death or injuries to passengers, a statutory
presumption arises that the common carrier was at fault or had acted negligently "unless it proves that
it [had] observed extraordinary diligence as prescribed in Articles 1733 and 1755." 8 In fact, because of
this statutory presumption, it has been held that a court need not even make an express finding of fault
or negligence on the part of the common carrier in order to hold it liable. 9 To overcome this
presumption, the common carrier must slow to the court that it had exercised extraordinary diligence
to prevent the injuries. 10 The standard of extraordinary diligence imposed upon common carriers is
considerably more demanding than the standard of ordinary diligence, i.e., the diligence of a
good paterfamilias established in respect of the ordinary relations between members of society. A
common carrier is bound to carry its passengers safely" as far as human care and foresight can provide,
using the utmost diligence of a very cautious person, with due regard to all the circumstances". 11
Thus, the question which must be addressed is whether or not private respondent has successfully
proved that he had exercised extraordinary diligence to prevent the mishap involving his mini-bus. The
records before the Court are bereft of any evidence showing that respondent had exercised the
extraordinary diligence required by law. Curiously, respondent did not even attempt, during the trial
before the court a quo, to prove that he had indeed exercised the requisite extraordinary diligence.
Respondent did try to exculpate himself from liability by alleging that the mishap was the result of force
majeure. But allegation is not proof and here again, respondent utterly failed to substantiate his defense
of force majeure. To exempt a common carrier from liability for death or physical injuries to passengers
upon the ground of force majeure, the carrier must clearly show not only that the efficient cause of the
casualty was entirely independent of the human will, but also that it was impossible to avoid. Any
participation by the common carrier in the occurrence of the injury will defeat the defense of force
majeure. In Servando v. Philippine Steam Navigation Company, 12 the Court summed up the essential
characteristics of force majeure by quoting with approval from the Enciclopedia Juridica Española:
Thus, where fortuitous event or force majeure is the immediate and proximate
cause of the loss, the obligor is exempt from liability non-performance. The
Partidas, the antecedent of Article 1174 of the Civil Code, defines "caso fortuito" as
'an event that takes place by accident and could not have been foreseen. Examples
of this are destruction of houses, unexpected fire, shipwreck, violence of robber.
In its dissertation on the phrase "caso fortuito" the Enciclopedia Juridica Española
says: 'In legal sense and, consequently, also in relation to contracts, a "caso
fortuito" presents the following essential characteristics: (1) the cause of the
unforeseen and unexpected occurence, or of the failure of the debtor to comply
with his obligation, must be independent of the human will; (2) it must be
impossible to foresee the event which constitutes the "caso fortuito", or if it can be
foreseen, it must be impossible to avoid; (3) the occurrence must be such as to
render it impossible for the debtor to fulfill his obligation in a normal manner; and
(4) the obligor must be free from any participation in the aggravation of the injury
resulting to the creditor.
Upon the other hand, the record yields affirmative evidence of fault or negligence on the part of
respondent common carrier. In her direct examination, petitioner Gatchalian narrated that shortly
before the vehicle went off the road and into a ditch, a "snapping sound" was suddenly heard at one
part of the bus. One of the passengers, an old woman, cried out, "What happened?" ("Apay addan samet
nadadaelen?"). The driver replied, nonchalantly, "That is only normal" ("Ugali ti makina dayta"). The
driver did not stop to check if anything had gone wrong with the bus. Moreover, the driver's reply
necessarily indicated that the same "snapping sound" had been heard in the bus on previous occasions.
This could only mean that the bus had not been checked physically or mechanically to determine what
was causing the "snapping sound" which had occurred so frequently that the driver had gotten
accustomed to it. Such a sound is obviously alien to a motor vehicle in good operating condition, and
even a modicum of concern for life and limb of passengers dictated that the bus be checked and
repaired. The obvious continued failure of respondent to look after the roadworthiness and safety of
the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again
the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of
the physical safety of the passengers, and hence gross negligence on the part of respondent and his
driver.
We turn to petitioner's claim for damages. The first item in that claim relates to revenue which petitioner
said she failed to realize because of the effects of the vehicular mishap. Petitioner maintains that on the
day that the mini-bus went off the road, she was supposed to confer with the district supervisor of public
schools for a substitute teacher's job, a job which she had held off and on as a "casual employee." The
Court of Appeals, however, found that at the time of the accident, she was no longer employed in a
public school since, being a casual employee and not a Civil Service eligible, she had been laid off. Her
employment as a substitute teacher was occasional and episodic, contingent upon the availability of
vacancies for substitute teachers. In view of her employment status as such, the Court of Appeals held
that she could not be said to have in fact lost any employment after and by reason of the
accident. 13 Such was the factual finding of the Court of Appeals, a finding entitled to due respect from
this Court. Petitioner Gatchalian has not submitted any basis for overturning this finding of fact, and she
may not be awarded damages on the basis of speculation or conjecture. 14
Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another
matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or
diminished, actual injury is suffered for which actual or compensatory damages are due and assessable.
Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before
the mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon
her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio
ante. If the scar is relatively small and does not grievously disfigure the victim, the cost of surgery may
be expected to be correspondingly modest. In Araneta, et al. vs. Areglado, et al., 15 this Court awarded
actual or compensatory damages for, among other things, the surgical removal of the scar on the face
of a young boy who had been injured in a vehicular collision. The Court there held:
We agree with the appellants that the damages awarded by the lower court for the
injuries suffered by Benjamin Araneta are inadequate. In allowing not more than
P1,000.00 as compensation for the "permanent deformity and — something like an
inferiority complex" as well as for the "pathological condition on the left side of the
jaw" caused to said plaintiff, the court below overlooked the clear evidence on
record that to arrest the degenerative process taking place in the mandible
and restore the injured boy to a nearly normal condition, surgical intervention was
needed, for which the doctor's charges would amount to P3,000.00, exclusive of
hospitalization fees, expenses and medicines. Furthermore, the operation,
according to Dr. Diño, would probably have to be repeated in order to effectuate a
complete cure, while removal of the scar on the face obviously demanded plastic
surgery.
xxx xxx xxx
Civil Code (Carriage of Goods) | Page 23 of 28
 The father's failure to submit his son to a plastic operation as soon as possible does
not prove that such treatment is not called for. The damage to the jaw and
the existence of the scar in Benjamin Araneta's face are physical facts that can not
be reasoned out of existence. That the injury should be treated in order to restore
him as far as possible to his original condition is undeniable. The father's delay, or
even his negligence, should not be allowed to prejudice the son who has no control
over the parent's action nor impair his right to a full indemnity.
. . . Still, taking into account the necessity and cost of corrective measures to fully
repair the damage; the pain suffered by the injured party; his feelings of inferiority
due to consciousness of his present deformity, as well as the voluntary character of
the injury inflicted; and further considering that a repair, however, skillfully
conducted, is never equivalent to the original state, we are of the opinion that the
indemnity granted by the trial court should be increased to a total of P18,000.00.
(Emphasis supplied)
Petitioner estimated that the cost of having her scar surgically removed was somewhere between
P10,000.00 to P15,000.00. 16 Upon the other hand, Dr. Fe Tayao Lasam, a witness presented as an expert
by petitioner, testified that the cost would probably be between P5,000.00 to P10,000.00. 17 In view of
this testimony, and the fact that a considerable amount of time has lapsed since the mishap in 1973
which may be expected to increase not only the cost but also very probably the difficulty of removing
the scar, we consider that the amount of P15,000.00 to cover the cost of such plastic surgery is not
unreasonable.
Turning to petitioner's claim for moral damages, the long-established rule is that moral damages may be
awarded where gross negligence on the part of the common carrier is shown. 18 Since we have earlier
concluded that respondent common carrier and his driver had been grossly negligent in connection with
the bus mishap which had injured petitioner and other passengers, and recalling the aggressive
manuevers of respondent, through his wife, to get the victims to waive their right to recover damages
even as they were still hospitalized for their injuries, petitioner must be held entitled to such moral
damages. Considering the extent of pain and anxiety which petitioner must have suffered as a result of
her physical injuries including the permanent scar on her forehead, we believe that the amount of
P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as atttorney's fees is in fact
even more modest. 19
WHEREFORE, the Decision of the Court of Appeals dated 24 October 1980, as well as the decision of the
then Court of First Instance of La Union dated 4 December 1975 are hereby REVERSED and SET
ASIDE.Respondent is hereby ORDERED to pay petitioner Reynalda Gatchalian the following sums: 1)
P15,000.00 as actual or compensatory damages to cover the cost of plastic surgery for the removal of
the scar on petitioner's forehead; 2) P30,000.00 as moral damages; and 3) P1,000.00 as attorney's fees,
the aggregate amount to bear interest at the legal rate of 6% per annum counting from the promulgation
of this decision until full payment thereof. Costs against private respondent.
SO ORDERED.
G.R. No. L-31379 August 29, 1988
COMPAÑIA MARITIMA, petitioner, vs. COURT OF APPEALS and VICENTE CONCEPCION, respondents.
FERNAN, C.J.:
Petitioner Compañia Maritima seeks to set aside through this petition for review on certiorari the
decision 1 of the Court of Appeals dated December 5, 1965, adjudging petitioner liable to private
respondent Vicente E. Concepcion for damages in the amount of P24,652.97 with legal interest from the
date said decision shall have become final, for petitioner's failure to deliver safely private respondent's
payloader, and for costs of suit. The payloader was declared abandoned in favor of petitioner.
The facts of the case are as follows:
Private respondent Vicente E. Concepcion, a civil engineer doing business under the name and style of
Consolidated Construction with office address at Room 412, Don Santiago Bldg., Taft Avenue, Manila,
had a contract with the Civil Aeronautics Administration (CAA) sometime in 1964 for the construction of
the airport in Cagayan de Oro City Misamis Oriental.
Being a Manila — based contractor, Vicente E. Concepcion had to ship his construction equipment to
Cagayan de Oro City. Having shipped some of his equipment through petitioner and having settled the
balance of P2,628.77 with respect to said shipment, Concepcion negotiated anew with petitioner, thru
its collector, Pacifico Fernandez, on August 28, 1964 for the shipment to Cagayan de Oro City of one (1)
unit payloader, four (4) units 6x6 Reo trucks and two (2) pieces of water tanks. He was issued Bill of
Lading 113 on the same date upon delivery of the equipment at the Manila North Harbor. 2
These equipment were loaded aboard the MV Cebu in its Voyage No. 316, which left Manila on August
30, 1964 and arrived at Cagayan de Oro City in the afternoon of September 1, 1964. The Reo trucks and
water tanks were safely unloaded within a few hours after arrival, but while the payloader was about
two (2) meters above the pier in the course of unloading, the swivel pin of the heel block of the port
block of Hatch No. 2 gave way, causing the payloader to fall. 3 The payloader was damaged and was
thereafter taken to petitioner's compound in Cagayan de Oro City.
On September 7, 1964, Consolidated Construction, thru Vicente E. Concepcion, wrote Compañia
Maritima to demand a replacement of the payloader which it was considering as a complete loss because
of the extent of damage. 4 Consolidated Construction likewise notified petitioner of its claim for
damages. Unable to elicit response, the demand was repeated in a letter dated October 2, 1964. 5
Meanwhile, petitioner shipped the payloader to Manila where it was weighed at the San Miguel
Corporation. Finding that the payloader weighed 7.5 tons and not 2.5 tons as declared in the B-111 of
Lading, petitioner denied the claim for damages of Consolidated Construction in its letter dated October
7, 1964, contending that had Vicente E. Concepcion declared the actual weight of the payloader, damage
to their ship as well as to his payloader could have been prevented. 6
To replace the damaged payloader, Consolidated Construction in the meantime bought a new one at
P45,000.00 from Bormaheco Inc. on December 3, 1964, and on July 6, 1965., Vicente E. Concepcion filed
an action for damages against petitioner with the then Court of First Instance of Manila, Branch VII,
docketed as Civil Case No. 61551, seeking to recover damages in the amount of P41,225.00 allegedly
suffered for the period of 97 days that he was not able to employ a payloader in the construction job at
the rate of P450.00 a day; P34,000.00 representing the cost of the damaged payloader; Pl 1, 000. 00
representing the difference between the cost of the damaged payloader and that of the new payloader;
P20,000.00 representing the losses suffered by him due to the diversion of funds to enable him to buy a
new payloader; P10,000.00 as attorney's fees; P5,000.00 as exemplary damages; and cost of the suit. 7
After trial, the then Court of First Instance of Manila, Branch VII, dismissed on April 24, 1968 the
complaint with costs against therein plaintiff, herein private respondent Vicente E. Concepcion, stating
that the proximate cause of the fall of the payloader was Vicente E. Concepcion's act or omission in
having misrepresented the weight of the payloader as 2.5 tons instead of its true weight of 7.5 tons,
which underdeclaration was intended to defraud Compañia Maritima of the payment of the freight
charges and which likewise led the Chief Officer of the vessel to use the heel block of hatch No. 2 in
unloading the payloader. 8
From the adverse decision against him, Vicente E. Concepcion appealed to the Court of Appeals which,
on December 5, 1965 rendered a decision, the dispositive portion of which reads:
IN VIEW WHEREOF, judgment must have to be as it is hereby reversed; defendant
is condemned to pay unto plaintiff the sum in damages of P24,652.07 with legal
interest from the date the present decision shall have become final; the payloader
is declared abandoned to defendant; costs against the latter. 9
Hence, the instant petition.
The principal issue in the instant case is whether or not the act of private respondent Vicente E.
Concepcion in furnishing petitioner Compañia Maritima with an inaccurate weight of 2.5 tons instead of
the payloader's actual weight of 7.5 tons was the proximate and only cause of the damage on the Oliver
Payloader OC-12 when it fell while being unloaded by petitioner's crew, as would absolutely exempt
petitioner from liability for damages under paragraph 3 of Article 1734 of the Civil Code, which provides:
Civil Code (Carriage of Goods) | Page 24 of 28
 Art. 1734. Common carriers are responsible for the loss, destruction, or
deterioration of the goods, unless the same is due to any of the following causes
only:
xxx xxx xxx
(3) Act or omission of the shipper or owner of the goods.
Petitioner claims absolute exemption under this provision upon the reasoning that private respondent's
act of furnishing it with an inaccurate weight of the payloader constitutes misrepresentation within the
meaning of "act or omission of the shipper or owner of the goods" under the above- quoted article. It
likewise faults the respondent Court of Appeals for reversing the decision of the trial court
notwithstanding that said appellate court also found that by representing the weight of the payloader
to be only 2.5 tons, private respondent had led petitioner's officer to believe that the same was within
the 5 tons capacity of the heel block of Hatch No. 2. Petitioner would thus insist that the proximate and
only cause of the damage to the payloader was private respondent's alleged misrepresentation of the
weight of the machinery in question; hence, any resultant damage to it must be borne by private
respondent Vicente E. Concepcion.
The general rule under Articles 1735 and 1752 of the Civil Code is that common carriers are presumed
to have been at fault or to have acted negligently in case the goods transported by them are lost,
destroyed or had deteriorated. To overcome the presumption of liability for the loss, destruction or
deterioration of the goods under Article 1735, the common carriers must prove that they observed
extraordinary diligence as required in Article 1733 of the Civil Code. The responsibility of observing
extraordinary diligence in the vigilance over the goods is further expressed in Article 1734 of the same
Code, the article invoked by petitioner to avoid liability for damages.
Corollary is the rule that mere proof of delivery of the goods in good order to a common carrier, and of
their arrival at the place of destination in bad order, makes out prima facie case against the common
carrier, so that if no explanation is given as to how the loss, deterioration or destruction of the goods
occurred, the common carrier must be held responsible. 10 Otherwise stated, it is incumbent upon the
common carrier to prove that the loss, deterioration or destruction was due to accident or some other
circumstances inconsistent with its liability.
In the instant case, We are not persuaded by the proferred explanation of petitioner alleged to be the
proximate cause of the fall of the payloader while it was being unloaded at the Cagayan de Oro City pier.
Petitioner seems to have overlooked the extraordinary diligence required of common carriers in the
vigilance over the goods transported by them by virtue of the nature of their business, which is
impressed with a special public duty.
Thus, Article 1733 of the Civil Code provides:
Art. 1733. Common carriers, from the nature of their business and for reason of
public policy, are bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by them according to all the
circumstances of each case.
Such extraordinary diligence in the vigilance over the goods is further expressed in
Articles 1734, 1735 and 1745, Nos. 5, 6 and 7, ...
The extraordinary diligence in the vigilance over the goods tendered for shipment requires the common
carrier to know and to follow the required precaution for avoiding damage to, or destruction of the
goods entrusted to it for safe carriage and delivery. It requires common carriers to render service with
the greatest skill and foresight and "to use all reasonable means to ascertain the nature and
characteristic of goods tendered for shipment, and to exercise due care in the handling and stowage
including such methods as their nature requires." 11 Under Article 1736 of the Civil Code, the
responsibility to observe extraordinary diligence commences and lasts from the time the goods are
unconditionally placed in the possession of, and received by the carrier for transportation until the same
are delivered, actually or constructively, by the carrier to the consignee, or to the person who has the
right to receive them without prejudice to the provisions of Article 1738.
Where, as in the instant case, petitioner, upon the testimonies of its own crew, failed to take the
necessary and adequate precautions for avoiding damage to, or destruction of, the payloader entrusted
to it for safe carriage and delivery to Cagayan de Oro City, it cannot be reasonably concluded that the
damage caused to the payloader was due to the alleged misrepresentation of private respondent
Concepcion as to the correct and accurate weight of the payloader. As found by the respondent Court
of Appeals, the fact is that petitioner used a 5-ton capacity lifting apparatus to lift and unload a visibly
heavy cargo like a payloader. Private respondent has, likewise, sufficiently established the laxity and
carelessness of petitioner's crew in their methods of ascertaining the weight of heavy cargoes offered
for shipment before loading and unloading them, as is customary among careful persons.
It must be noted that the weight submitted by private respondent Concepcion appearing at the left-
hand portion of Exhibit 8 12 as an addendum to the original enumeration of equipment to be shipped
was entered into the bill of lading by petitioner, thru Pacifico Fernandez, a company collector, without
seeing the equipment to be shipped. 13 Mr. Mariano Gupana, assistant traffic manager of petitioner,
confirmed in his testimony that the company never checked the information entered in the bill of
lading. 14 Worse, the weight of the payloader as entered in the bill of lading was assumed to be correct
by Mr. Felix Pisang, Chief Officer of MV Cebu. 15
The weights stated in a bill of lading are prima facie evidence of the amount received and the fact that
the weighing was done by another will not relieve the common carrier where it accepted such weight
and entered it on the bill of lading. 16 Besides, common carriers can protect themselves against mistakes
in the bill of lading as to weight by exercising diligence before issuing the same. 17
While petitioner has proven that private respondent Concepcion did furnish it with an inaccurate weight
of the payloader, petitioner is nonetheless liable, for the damage caused to the machinery could have
been avoided by the exercise of reasonable skill and attention on its part in overseeing the unloading of
such a heavy equipment. And circumstances clearly show that the fall of the payloader could have been
avoided by petitioner's crew. Evidence on record sufficiently show that the crew of petitioner had been
negligent in the performance of its obligation by reason of their having failed to take the necessary
precaution under the circumstances which usage has established among careful persons, more
particularly its Chief Officer, Mr. Felix Pisang, who is tasked with the over-all supervision of loading and
unloading heavy cargoes and upon whom rests the burden of deciding as to what particular winch the
unloading of the payloader should be undertaken. 18 While it was his duty to determine the weight of
heavy cargoes before accepting them. Mr. Felix Pisang took the bill of lading on its face value and
presumed the same to be correct by merely "seeing" it. 19 Acknowledging that there was a "jumbo" in
the MV Cebu which has the capacity of lifting 20 to 25 ton cargoes, Mr. Felix Pisang chose not to use it,
because according to him, since the ordinary boom has a capacity of 5 tons while the payloader was only
2.5 tons, he did not bother to use the "jumbo" anymore. 20
In that sense, therefore, private respondent's act of furnishing petitioner with an inaccurate weight of
the payloader upon being asked by petitioner's collector, cannot be used by said petitioner as an excuse
to avoid liability for the damage caused, as the same could have been avoided had petitioner utilized
the "jumbo" lifting apparatus which has a capacity of lifting 20 to 25 tons of heavy cargoes. It is a fact
known to the Chief Officer of MV Cebu that the payloader was loaded aboard the MV Cebu at the Manila
North Harbor on August 28, 1964 by means of a terminal crane. 21 Even if petitioner chose not to take
the necessary precaution to avoid damage by checking the correct weight of the payloader,
extraordinary care and diligence compel the use of the "jumbo" lifting apparatus as the most prudent
course for petitioner.
While the act of private respondent in furnishing petitioner with an inaccurate weight of the payloader
cannot successfully be used as an excuse by petitioner to avoid liability to the damage thus caused, said
act constitutes a contributory circumstance to the damage caused on the payloader, which mitigates the
liability for damages of petitioner in accordance with Article 1741 of the Civil Code, to wit:
Art. 1741. If the shipper or owner merely contributed to the loss, destruction or
deterioration of the goods, the proximate cause thereof being the negligence of
the common carrier, the latter shall be liable in damages, which however, shall be
equitably reduced.
We find equitable the conclusion of the Court of Appeals reducing the recoverable amount of damages
by 20% or 1/5 of the value of the payloader, which at the time the instant case arose, was valued at
P34,000. 00, thereby reducing the recoverable amount at 80% or 4/5 of P34,000.00 or the sum of
Civil Code (Carriage of Goods) | Page 25 of 28
P27,200.00. Considering that the freight charges for the entire cargoes shipped by private respondent
amounting to P2,318.40 remained unpaid.. the same would be deducted from the P27,000.00 plus an
additional deduction of P228.63 representing the freight charges for the undeclared weight of 5 tons
(difference between 7.5 and 2.5 tons) leaving, therefore, a final recoverable amount of damages of
P24,652.97 due to private respondent Concepcion.
Notwithstanding the favorable judgment in his favor, private respondent assailed the Court of Appeals'
decision insofar as it limited the damages due him to only P24,652.97 and the cost of the suit. Invoking
the provisions on damages under the Civil Code, more particularly Articles 2200 and 2208, private
respondent further seeks additional damages allegedly because the construction project was delayed
and that in spite of his demands, petitioner failed to take any steps to settle his valid, just and
demandable claim for damages.
We find private respondent's submission erroneous. It is well- settled that an appellee, who is not an
appellant, may assign errors in his brief where his purpose is to maintain the judgment on other grounds,
but he may not do so if his purpose is to have the judgment modified or reversed, for, in such case, he
must appeal. 22 Since private respondent did not appeal from the judgment insofar as it limited the award
of damages due him, the reduction of 20% or 1/5 of the value of the payloader stands.
WHEREFORE, in view of the foregoing, the petition is DENIED. The decision of the Court of Appeals is
hereby AFFIRMED in all respects with costs against petitioner. In view of the length of time this case has
been pending, this decision is immediately executory.
Gutierrez, Jr., Feliciano, Bidin and Cortes JJ., concur.
G.R. No. 84458 November 6, 1989
ABOITIZ SHIPPING CORPORATION, petitioner, vs. HON. COURT OF APPEALS, ELEVENTH DIVISION,
LUCILA C. VIANA, SPS. ANTONIO VIANA and GORGONIA VIANA, and PIONEER STEVEDORING
CORPORATION, respondents.
REGALADO, J.:
In this appeal by certiorari, petitioner Aboitiz Shipping Corporation seeks a review of the decision 1 of
respondent Court of Appeals, dated July 29, 1988, the decretal portion of which reads:
WHEREFORE, the judgment appealed from as modified by the order of October 27,
1982, is hereby affirmed with the modification that appellant Aboitiz Shipping is
hereby ordered to pay plaintiff-appellees the amount of P30,000.00 for the death
of Anacleto Viana; actual damages of P9,800.00; P150,000.00 for unearned income;
P7,200.00 as support for deceased's parents; P20,000.00 as moral damages;
P10,000.00 as attorney's fees; and to pay the costs.
The undisputed facts of the case, as found by the court a quo and adopted by respondent court, are as
follows: .
The evidence disclosed that on May 11, 1975, Anacleto Viana boarded the vessel
M/V Antonia, owned by defendant, at the port at San Jose, Occidental Mindoro,
bound for Manila, having purchased a ticket (No. 117392) in the sum of P23.10 (Exh.
'B'). On May 12, 1975, said vessel arrived at Pier 4, North Harbor, Manila, and the
passengers therein disembarked, a gangplank having been provided connecting the
side of the vessel to the pier. Instead of using said gangplank Anacleto Viana
disembarked on the third deck which was on the level with the pier. After said
vessel had landed, the Pioneer Stevedoring Corporation took over the exclusive
control of the cargoes loaded on said vessel pursuant to the Memorandum of
Agreement dated July 26, 1975 (Exh. '2') between the third party defendant Pioneer
Stevedoring Corporation and defendant Aboitiz Shipping Corporation.
The crane owned by the third party defendant and operated by its crane operator
Alejo Figueroa was placed alongside the vessel and one (1) hour after the
passengers of said vessel had disembarked, it started operation by unloading the
cargoes from said vessel. While the crane was being operated, Anacleto Viana who
had already disembarked from said vessel obviously remembering that some of his
cargoes were still loaded in the vessel, went back to the vessel, and it was while he
was pointing to the crew of the said vessel to the place where his cargoes were
loaded that the crane hit him, pinning him between the side of the vessel and the
crane. He was thereafter brought to the hospital where he later expired three (3)
days thereafter, on May 15, 1975, the cause of his death according to the Death
Certificate (Exh. "C") being "hypostatic pneumonia secondary to traumatic fracture
of the pubic bone lacerating the urinary bladder" (See also Exh. "B"). For his
hospitalization, medical, burial and other miscellaneous expenses, Anacleto's wife,
herein plaintiff, spent a total of P9,800.00 (Exhibits "E", "E-1", to "E-5"). Anacleto
Viana who was only forty (40) years old when he met said fateful accident (Exh. 'E')
was in good health. His average annual income as a farmer or a farm supervisor
was 400 cavans of palay annually. His parents, herein plaintiffs Antonio and
Gorgonia Viana, prior to his death had been recipient of twenty (20) cavans of palay
as support or P120.00 monthly. Because of Anacleto's death, plaintiffs suffered
mental anguish and extreme worry or moral damages. For the filing of the instant
case, they had to hire a lawyer for an agreed fee of ten thousand (P10,000.00)
pesos. 2
Private respondents Vianas filed a complaint 3 for damages against petitioner corporation (Aboitiz, for
brevity) for breach of contract of carriage.
In its answer. 4 Aboitiz denied responsibility contending that at the time of the accident, the vessel was
completely under the control of respondent Pioneer Stevedoring Corporation (Pioneer, for short) as the
exclusive stevedoring contractor of Aboitiz, which handled the unloading of cargoes from the vessel of
Aboitiz. It is also averred that since the crane operator was not an employee of Aboitiz, the latter cannot
be held liable under the fellow-servant rule.
Thereafter, Aboitiz, as third-party plaintiff, filed a third-party complaint 5 against Pioneer imputing
liability thereto for Anacleto Viana's death as having been allegedly caused by the negligence of the
crane operator who was an employee of Pioneer under its exclusive control and supervision.
Pioneer, in its answer to the third-party complaint, 6 raised the defenses that Aboitiz had no cause of
action against Pioneer considering that Aboitiz is being sued by the Vianas for breach of contract of
carriage to which Pioneer is not a party; that Pioneer had observed the diligence of a good father of a
family both in the selection and supervision of its employees as well as in the prevention of damage or
injury to anyone including the victim Anacleto Viana; that Anacleto Viana's gross negligence was the
direct and proximate cause of his death; and that the filing of the third-party complaint was premature
by reason of the pendency of the criminal case for homicide through reckless imprudence filed against
the crane operator, Alejo Figueroa.
In a decision rendered on April 17, 1980 by the trial court, 7 Aboitiz was ordered to pay the Vianas for
damages incurred, and Pioneer was ordered to reimburse Aboitiz for whatever amount the latter paid
the Vianas. The dispositive portion of said decision provides:
WHEREFORE, judgment is hereby rendered in favor of the plantiffs:
(1) ordering defendant Aboitiz Shipping Corporation to pay to plaintiffs the sum of
P12,000.00 for the death of Anacleto Viana P9,800.00 as actual damages;
P533,200.00 value of the 10,664 cavans of palay computed at P50.00 per cavan;
P10,000.00 as attorney's fees; F 5,000.00, value of the 100 cavans of palay as
support for five (5) years for deceased (sic) parents, herein plaintiffs Antonio and
Gorgonia Viana computed at P50.00 per cavan; P7,200.00 as support for deceased's
parents computed at P120.00 a month for five years pursuant to Art. 2206, Par. 2,
of the Civil Code; P20,000.00 as moral damages, and costs; and
(2) ordering the third party defendant Pioneer Stevedoring Corporation to
reimburse defendant and third party plaintiff Aboitiz Shipping Corporation the said
amounts that it is ordered to pay to herein plaintiffs.
Both Aboitiz and Pioneer filed separate motions for reconsideration wherein they similarly raised the
trial court's failure to declare that Anacleto Viana acted with gross negligence despite the overwhelming
evidence presented in support thereof. In addition, Aboitiz alleged, in opposition to Pioneer's motion,
Civil Code (Carriage of Goods) | Page 26 of 28
that under the memorandum of agreement the liability of Pioneer as contractor is automatic for any
damages or losses whatsoever occasioned by and arising from the operation of its arrastre and
stevedoring service.
In an order dated October 27, 1982, 8 the trial court absolved Pioneer from liability for failure of the
Vianas and Aboitiz to preponderantly establish a case of negligence against the crane operator which
the court a quo ruled is never presumed, aside from the fact that the memorandum of agreement
supposedly refers only to Pioneer's liability in case of loss or damage to goods handled by it but not in
the case of personal injuries, and, finally that Aboitiz cannot properly invoke the fellow-servant rule
simply because its liability stems from a breach of contract of carriage. The dispositive portion of said
order reads:
WHEREFORE, judgment is hereby modified insofar as third party defendant Pioneer
Stevedoring Corporation is concerned rendered in favor of the plaintiffs-,:
(1) Ordering defendant Aboitiz Shipping Corporation to pay the plaintiffs the sum
of P12,000.00 for the death of Anacleto Viana; P9,000.00 (sic) as actual damages;
P533,200.00 value of the 10,664 cavans of palay computed at P50.00 per cavan;
P10,000.00 as attorney's fees; P5,000.00 value of the 100 cavans of palay as
support for five (5) years for deceased's parents, herein plaintiffs Antonio and
Gorgonia Viana,computed at P50.00 per cavan; P7,200.00 as support for
deceased's parents computed at P120.00 a month for five years pursuant to Art.
2206, Par. 2, of the Civil Code; P20,000.00 as moral damages, and costs; and
(2) Absolving third-party defendant Pioneer Stevedoring Corporation for (sic) any
liability for the death of Anacleto Viana the passenger of M/V Antonia owned by
defendant third party plaintiff Aboitiz Shipping Corporation it appearing that the
negligence of its crane operator has not been established therein.
Not satisfied with the modified judgment of the trial court, Aboitiz appealed the same to respondent
Court of Appeals which affirmed the findings of of the trial court except as to the amount of damages
awarded to the Vianas.
Hence, this petition wherein petitioner Aboitiz postulates that respondent court erred:
(A) In holding that the doctrine laid down by this honorable Court in La Mallorca vs.
Court of Appeals, et al. (17 SCRA 739, July 27, 1966) is applicable to the case in the
face of the undisputable fact that the factual situation under the La Mallorca case
is radically different from the facts obtaining in this case;
(B) In holding petitioner liable for damages in the face of the finding of the court a
quo and confirmed by the Honorable respondent court of Appeals that the
deceased, Anacleto Viana was guilty of contributory negligence, which, We
respectfully submit contributory negligence was the proximate cause of his death;
specifically the honorable respondent Court of Appeals failed to apply Art. 1762 of
the New Civil Code;
(C) In the alternative assuming the holding of the Honorable respondent Court of
Appears that petitioner may be legally condemned to pay damages to the private
respondents we respectfully submit that it committed a reversible error when it
dismissed petitioner's third party complaint against private respondent Pioneer
Stevedoring Corporation instead of compelling the latter to reimburse the
petitioner for whatever damages it may be compelled to pay to the private
respondents Vianas. 9
At threshold, it is to be observed that both the trial court and respondent Court of Appeals found the
victim Anacleto Viana guilty of contributory negligence, but holding that it was the negligence of Aboitiz
in prematurely turning over the vessel to the arrastre operator for the unloading of cargoes which was
the direct, immediate and proximate cause of the victim's death.
I. Petitioner contends that since one (1) hour had already elapsed from the time Anacleto Viana
disembarked from the vessel and that he was given more than ample opportunity to unload his cargoes
prior to the operation of the crane, his presence on the vessel was no longer reasonable e and he
consequently ceased to be a passenger. Corollarily, it insists that the doctrine in La Mallorca vs. Court of
Appeals, et al. 10 is not applicable to the case at bar.
The rule is that the relation of carrier and passenger continues until the passenger has been landed at
the port of destination and has left the vessel owner's dock or premises. 11 Once created, the relationship
will not ordinarily terminate until the passenger has, after reaching his destination, safely alighted from
the carrier's conveyance or had a reasonable opportunity to leave the carrier's premises. All persons
who remain on the premises a reasonable time after leaving the conveyance are to be deemed
passengers, and what is a reasonable time or a reasonable delay within this rule is to be determined
from all the circumstances, and includes a reasonable time to see after his baggage and prepare for his
departure. 12 The carrier-passenger relationship is not terminated merely by the fact that the person
transported has been carried to his destination if, for example, such person remains in the carrier's
premises to claim his baggage. 13
It was in accordance with this rationale that the doctrine in the aforesaid case of La Mallorca was
enunciated, to wit:
It has been recognized as a rule that the relation of carrier and passenger does not
cease at the moment the passenger alights from the carrier's vehicle at a place
selected by the carrier at the point of destination, but continues until the passenger
has had a reasonable time or a reasonable opportunity to leave the carrier's
premises. And, what is a reasonable time or a reasonable delay within this rule is
to be determined from all the circumstances. Thus, a person who, after alighting
from a train, walks along the station platform is considered still a passenger. So
also, where a passenger has alighted at his destination and is proceeding by the
usual way to leave the company's premises, but before actually doing so is halted
by the report that his brother, a fellow passenger, has been shot, and he in good
faith and without intent of engaging in the difficulty, returns to relieve his brother,
he is deemed reasonably and necessarily delayed and thus continues to be a
passenger entitled as such to the protection of the railroad company and its agents.
In the present case, the father returned to the bus to get one of his baggages which
was not unloaded when they alighted from the bus. Racquel, the child that she was,
must have followed the father. However, although the father was still on the
running board of the bus waiting for the conductor to hand him the bag or bayong,
the bus started to run, so that even he (the father) had to jump down from the
moving vehicle. It was at this instance that the child, who must be near the bus,
was run over and killed. In the circumstances, it cannot be claimed that the carrier's
agent had exercised the 'utmost diligence' of a 'very cautious person' required by
Article 1755 of the Civil Code to be observed by a common carrier in the discharge
of its obligation to transport safely its passengers. ... The presence of said
passengers near the bus was not unreasonable and they are, therefore, to be
considered still as passengers of the carrier, entitled to the protection under their
contract of carriage. 14
It is apparent from the foregoing that what prompted the Court to rule as it did in said case is the fact of
the passenger's reasonable presence within the carrier's premises. That reasonableness of time should
be made to depend on the attending circumstances of the case, such as the kind of common carrier, the
nature of its business, the customs of the place, and so forth, and therefore precludes a consideration
of the time element per se without taking into account such other factors. It is thus of no moment
whether in the cited case of La Mallorca there was no appreciable interregnum for the passenger therein
to leave the carrier's premises whereas in the case at bar, an interval of one (1) hour had elapsed before
the victim met the accident. The primary factor to be considered is the existence of a reasonable cause
as will justify the presence of the victim on or near the petitioner's vessel. We believe there exists such
a justifiable cause.
It is of common knowledge that, by the very nature of petitioner's business as a shipper, the passengers
of vessels are allotted a longer period of time to disembark from the ship than other common carriers
such as a passenger bus. With respect to the bulk of cargoes and the number of passengers it can load,
Civil Code (Carriage of Goods) | Page 27 of 28
such vessels are capable of accommodating a bigger volume of both as compared to the capacity of a the "utmost diligence of very cautious persons" to be exercised "as far as human care and foresight can
regular commuter bus. Consequently, a ship passenger will need at least an hour as is the usual practice, provide" which is required by law of common carriers with respect to their passengers.
to disembark from the vessel and claim his baggage whereas a bus passenger can easily get off the bus While the victim was admittedly contributorily negligent, still petitioner's aforesaid failure to exercise
and retrieve his luggage in a very short period of time. Verily, petitioner cannot categorically claim, extraordinary diligence was the proximate and direct cause of, because it could definitely have
through the bare expedient of comparing the period of time entailed in getting the passenger's cargoes, prevented, the former's death. Moreover, in paragraph 5.6 of its petition, at bar, 19 petitioner has
that the ruling in La Mallorca is inapplicable to the case at bar. On the contrary, if we are to apply the expressly conceded the factual finding of respondent Court of Appeals that petitioner did not present
doctrine enunciated therein to the instant petition, we cannot in reason doubt that the victim Anacleto sufficient evidence in support of its submission that the deceased Anacleto Viana was guilty of gross
Viana was still a passenger at the time of the incident. When the accident occurred, the victim was in negligence. Petitioner cannot now be heard to claim otherwise.
the act of unloading his cargoes, which he had every right to do, from petitioner's vessel. As earlier No excepting circumstance being present, we are likewise bound by respondent court's declaration that
stated, a carrier is duty bound not only to bring its passengers safely to their destination but also to there was no negligence on the part of Pioneer Stevedoring Corporation, a confirmation of the trial
afford them a reasonable time to claim their baggage. court's finding to that effect, hence our conformity to Pioneer's being absolved of any liability.
It is not definitely shown that one (1) hour prior to the incident, the victim had already disembarked As correctly observed by both courts, Aboitiz joined Pioneer in proving the alleged gross negligence of
from the vessel. Petitioner failed to prove this. What is clear to us is that at the time the victim was the victim, hence its present contention that the death of the passenger was due to the negligence of
taking his cargoes, the vessel had already docked an hour earlier. In consonance with common shipping the crane operator cannot be sustained both on grounds, of estoppel and for lack of evidence on its
procedure as to the minimum time of one (1) hour allowed for the passengers to disembark, it may be present theory. Even in its answer filed in the court below it readily alleged that Pioneer had taken the
presumed that the victim had just gotten off the vessel when he went to retrieve his baggage. Yet, even necessary safeguards insofar as its unloading operations were concerned, a fact which appears to have
if he had already disembarked an hour earlier, his presence in petitioner's premises was not without been accepted by the plaintiff therein by not impleading Pioneer as a defendant, and likewise inceptively
cause. The victim had to claim his baggage which was possible only one (1) hour after the vessel arrived by Aboitiz by filing its third-party complaint only after ten (10) months from the institution of the suit
since it was admittedly standard procedure in the case of petitioner's vessels that the unloading against it. Parenthetically, Pioneer is not within the ambit of the rule on extraordinary diligence required
operations shall start only after that time. Consequently, under the foregoing circumstances, the victim of, and the corresponding presumption of negligence foisted on, common carriers like Aboitiz. This, of
Anacleto Viana is still deemed a passenger of said carrier at the time of his tragic death. course, does not detract from what we have said that no negligence can be imputed to Pioneer but, that
II. Under the law, common carriers are, from the nature of their business and for reasons of public policy, on the contrary, the failure of Aboitiz to exercise extraordinary diligence for the safety of its passenger
bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the is the rationale for our finding on its liability.
passengers transported by them, according to all the circumstances of each case. 15 More particularly, a WHEREFORE, the petition is DENIED and the judgment appealed from is hereby AFFIRMED in toto.
common carrier is bound to carry the passengers safely as far as human care and foresight can provide,
SO ORDERED.
using the utmost diligence of very cautious persons, with a due regard for all the circumstances. 16 Thus,
where a passenger dies or is injured, the common carrier is presumed to have been at fault or to have
acted negligently. 17 This gives rise to an action for breach of contract of carriage where all that is
required of plaintiff is to prove the existence of the contract of carriage and its non-performance by the
carrier, that is, the failure of the carrier to carry the passenger safely to his destination, 18 which, in the
instant case, necessarily includes its failure to safeguard its passenger with extraordinary diligence while
such relation subsists.
The presumption is, therefore, established by law that in case of a passenger's death or injury the
operator of the vessel was at fault or negligent, having failed to exercise extraordinary diligence, and it
is incumbent upon it to rebut the same. This is in consonance with the avowed policy of the State to
afford full protection to the passengers of common carriers which can be carried out only by imposing a
stringent statutory obligation upon the latter. Concomitantly, this Court has likewise adopted a rigid
posture in the application of the law by exacting the highest degree of care and diligence from common
carriers, bearing utmost in mind the welfare of the passengers who often become hapless victims of
indifferent and profit-oriented carriers. We cannot in reason deny that petitioner failed to rebut the
presumption against it. Under the facts obtaining in the present case, it cannot be gainsaid that
petitioner had inadequately complied with the required degree of diligence to prevent the accident from
happening.
As found by the Court of Appeals, the evidence does not show that there was a cordon of drums around
the perimeter of the crane, as claimed by petitioner. It also adverted to the fact that the alleged presence
of visible warning signs in the vicinity was disputable and not indubitably established. Thus, we are not
inclined to accept petitioner's explanation that the victim and other passengers were sufficiently warned
that merely venturing into the area in question was fraught with serious peril. Definitely, even assuming
the existence of the supposed cordon of drums loosely placed around the unloading area and the guard's
admonitions against entry therein, these were at most insufficient precautions which pale into
insignificance if considered vis-a-vis the gravity of the danger to which the deceased was exposed. There
is no showing that petitioner was extraordinarily diligent in requiring or seeing to it that said
precautionary measures were strictly and actually enforced to subserve their purpose of preventing
entry into the forbidden area. By no stretch of liberal evaluation can such perfunctory acts approximate
Civil Code (Carriage of Goods) | Page 28 of 28