BONGHANOY, EJ GWYNN C.

JD3-LO1 (TRAPOR 020)

1.
The bus company is liable for X’s missing maleta.

By express provision of law, 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.

In the case under consideration, on things deposited with a

common carrier for transit, the obligation of extreme diligence in
vigilance over the items is required. The fact that the baggage was not
declared nor paid for has no bearing, as it was received by the carrier
for transportation, that is, the Benguet Bus.

Therefore, Benguet Bus, or the bus company can be held liable

for X’s missing maleta.

2.
In terms of merchandise damage, the defense of the exercise of
the diligence of a good father of a family is not tenable.

As a general rule, in breach of contract proceedings, the defense

of exercise of due diligence by a good father of a family is unavailable,
but it is admissible in quasi-delict cases.

Under the circumstances, this defense is not applicable because

the contract required the items to be transported safely and unless the
loss was caused by a fortuitous event or force majeure, there was a
breach of contract. The cause of action by the owner of the
merchandise against the carrier is breach of contract.

Hence, such defense is not tenable.

3.
No, AM cannot set up the hijacking as a defense to defeat R’s
claim.
 In a case with similar facts, the Supreme Court ruled that,
hijacking may be set up as a defense if it was attended by the use of
grave or irresistible threat, violence, or force.

In such a case, given the presented circumstance, the truck was

left unattended while Reynaldo was visiting his girlfriend. Hence, it
does not present that it was attended by the use of grave or
irresistible threat, violence, or force.

Therefore, AM cannot set up the hijacking as a defense to defeat

R’s claim.

4.
No, there was no fortuitous event.

As a matter of law, the following are requisites of a fortuitous

event: (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 (debtor) must be free from any
participation in or the aggravation of the injury resulting to the
creditor.

In the case at bar, the elements are lacking. As far as the record
shows, the accident was caused either by defects in the automobile or
else through the negligence of B. Also, it does not suggests that the
accident in question was due to an act of God that will constitute caso
fortuito, or to adverse road conditions which could not have been
foreseen.

Thus, there was no fortuitous event.

5.
The applicable prescriptive period is ten years under the Civil
Code.
 Under Article 1144 of the New Civil Code, the following actions
must be brought within ten years from the time the right of action
accrues, specifically, upon a written contract.

In the case at hand, AA entered into a contract with BB through

CC to transport ladie’s wear from Manila to France with transshipment
at Taiwan. The one-year prescriptive period under the Carriage of
Goods by Sea Act does not apply because the present case involves
delay in the delivery of the goods. Loss under COGSA means no
delivery at all was made by the carrier of the goods because the same
had perished or gone out of commerce deteriorated or decayed while
in transit. In the present case, the shipment of ladies' wear was
actually delivered.

COGSA is inapplicable, therefore, the prescription of the action is

governed by Article 1144 of the Civil Code, which provides for a
prescriptive period of ten years in case of actions based on a written
contract.

6.
X can recover the value of his P500,000.00 actual loss.

Under Article 1750 of the Civil Code, a contract fixing the sum
that may be recovered by the owner or shipper for the loss,
destruction, or deterioration of the goods is valid, if it is reasonable
and just under the circumstances, and has been fairly and freely
agreed upon.

Under the given circumstance, it is believed that the stipulation

involved is not just and reasonable. This is especially true in this case
where the bill of lading itself indicates the true value of the goods
shipped and thus, supported by the letter of credit.

Hence, X can recover the value of his P500,000.00 actual loss.

7.
Mabuhay Lines, Inc. is liable for the injuries of several
employees of Company X.

Under Article 1757 of the Civil Code, the responsibility of a

common carrier for the safety of passengers as required in articles
 1733 and 1755 cannot be dispensed with or lessened by stipulation, by
the posting of notices, by statements on tickets, or otherwise.
In the case at bar, despite the fact that the bus was hired to
transport employees for a fixed fee, Mabuhay Lines, Inc. is still
considered a common carrier. The carrier, through its driver who was
still in control of the bus, was still required to exercise extraordinary
diligence. Consequently, the responsibility of Mabuhay Lines, Inc. for
the safety of passengers, cannot be dispensed with or lessened by
stipulation.

Therefore, Mabuhay Lines, Inc. is liable for the injuries of several

employees of Company X.

8.
a. PHILSECO is not public utility.

As defined by law, a public utility is a business or service

engaged in regularly supplying the public with some commodity or
service of public consequence such as electricity, gas, water,
transportation, telephone or telegraph service. To constitute a public
utility, the facility must be necessary for the maintenance of life and
occupation of the residents.

Applying the criterion laid down to the case at bar, it is crystal

clear that a shipyard cannot be considered a public utility. A shipyard
is defined as a site or enclosure where ships are made or repaired. By
definition, it serves just a small number of clients, whom it may
choose to serve at its discretion. While a shipyard is legally obligated
to provide its services to anyone who wishes to use them, it is not
obligated to do so indiscriminately. It is not required by law to provide
the services requested by each and every client. The fact that it makes
its services available to the public does not give the public the legal
right to demand that they be provided.

Hence, a shipyard is not a public utility.

b.
KAWASAKI can acquire, as a maximum, only 40% of PHILSECO’s
shares is correct only if a shipyard is a public utility.
 A public utility, according to the Constitution, must be at least 60
percent owned by Filipino citizens.

In this case, the non-selling partner, KAWASAKI, who is an alien

can only acquire a maximum of 40% of the total capitalization of a
public utility, regardless the grant of first refusal. The partners cannot,
by mere agreement, avoid the constitutional proscription. But as ruled,
PHILSECO is not a public utility and no other restriction is present that
would limit the right of KAWASAKI to purchase the Government's
share to 40% of PHILSECO’s total capitalization.

Hence, PHILSECO not being a public utility, KAWASAKI can

acquire, as a maximum, 40% of the former’s share.

9.
NA Insurance is correct.

Under Section 1 in COGSA, the term carriage of goods covers

the period from the time when the goods are loaded to the time when
they are discharged from the ship infer that the period of time when
the goods have been discharged from the ship and given to the
custody of the arrastre operator is not covered by the COGSA.

In the case at hand, the COGSA makes no mention of the

possibility of an arrastre operator using it. The arrastre operator is not
covered by the one-year prescriptive period.

Hence, ATI should be ordered to pay NA Insurance

notwithstanding the lapse of the one-year prescriptive period for filing
a suit under the COGSA.

10.
a. Romeo, Samuel and Teresita cannot sue for breach of contract of
carriage.

As a matter of law, the elements in the definition of a passenger,

is an undertaking of a person to travel in the conveyance provided by
the carrier and an acceptance by the carrier of the person as a
passenger.
 In the case at bar, Romeo, who obtains passage through
deception is not considered a passenger. Samuel boarded the bus to
commit robbery, not to be transported. Teresita boarded the bus not
to be transported, but to accompany the driver as he went about his
duties.
On the other hand, Uriel can sue for breach of contract.

Under Article 1753 of the Civil Code, the law of the country to
which the goods are to be transported shall govern the liability of the
common carrier for their loss, destruction or deterioration.

In the case at hand, Uriel was a passenger although he was

being transported gratuitously, because he won a free riding pass in a
raffle held by CTC.

b. Romeo, Samuel, Teresita and Uriel may sue UTI on the basis of
quasi-delict.

Under the Civil Code, as defined, quasi delict or tort refers to

acts or omission causes damage to another, there is being fault or
negligence, is obliged to pay for the damages done. If there is no pre-
existing contractual relation between the parties, such fault or
negligence is called quasi-delict.

Given the circumstances at bar, Romeo, Samuel, Teresita and

Uriel have no pre-existing contractual relationship with UTI. They may
allege that the collision was due to the negligence of driver of UTI and
UTI was negligent in the selection and supervision of its driver.

Hence, they may sue UTI on the basis of quasi-delict.

c. With respect to Romeo, Samuel and Teresita, CTC can raise the
defense that it exercised the due diligence of a good father of a
family in the selection and supervision of its driver.

Under ART. 2180 of the Civil Code, the obligation imposed by

article 2176 is demandable not only for one's own acts or omissions,
but also for those of persons for whom — one is responsible. The
father and, in case of his death or incapacity, the mother, are
responsible for the damages caused by the minor children who live in
their company.
 In this case, since there was no pre-existing contractual
relationship between them and CTC, CTC can raise the defense that it
exercised the due diligence of a good father of a family.

With respect to Uriel, UTI can also raise the same defense
against if there is a stipulation that exempts it from liability for simple
negligence, but not for willful acts or gross negligence.

Under Article 1758 of the Civil Code, when a passenger is carried

gratuitously, a stipulation limiting the common carrier's liability for
negligence is valid, but not for willful acts or gross negligence.

On the other hand, since UTI had no pre-existing contractual

relationship with them, it can raise the defense that it exercised due
diligence in the selection and supervision of its driver that the collision
was due exclusively to the negligence of the driver of CTC, and that
Samuel was committing a serious illegal act at the time of the collision.

11.
a. CAL is liable for damages.

Under a jurisprudential rule, supported by the Warsaw

Convention, to which the Philippines is a party, and by the existing
practices of the International Air Transport Association (IATA), Article
15 of IATA-Recommended Practice similarly provides:

"Carriage to be performed by several successive carriers under

one ticket, or under a ticket and any conjunction ticket issued
therewith, is regarded as a single operation."

It is significant to note, based on the aforementioned

jurisprudence, that the contract of air transportation was between CAL
and the passenger, with the former endorsing to PAL the Hong Kong-
to-Manila segment of the journey. Such contract of carriage is to be
treated in this jurisdiction as a single operation.

Therefore, CAL is liable for damages.

12.
 a. With respect against the airline, a complaint for breach of
contract of carriage can be filed.

Under Article 1755 of the Civil Code, a common carrier is bound

to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a
due regard for all the circumstances.

In the case at hand, it failed to exercise extraordinary diligence

in transporting the passenger’s safety from their point of embarkation
to their destination.

With respect against the Pilot, a complaint based on a quasi-

delict can be filed.

Under the Civil Code, as defined, quasi delict or tort refers to

acts or omission causes damage to another, there is being fault or
negligence, is obliged to pay for the damages done. If there is no pre-
existing contractual relation between the parties, such fault or
negligence is called quasi-delict.

In this case, complaint based on a quasi-delict can be filed

against the pilots because of their fault and negligence.

b. The ambulance driver and his employer should be held

accountable for damages.

Under the Civil Code, as defined, quasi delict or tort refers to

acts or omission causes damage to another, there is being fault or
negligence, is obliged to pay for the damages done. If there is no pre-
existing contractual relation between the parties, such fault or
negligence is called quasi-delict.

Also, under Article 2180 of the Civil Code, the obligation imposed
by article 2176 is demandable not only for one's own acts or
omissions, but also for those of persons for whom — one is
responsible.

In the case at hand, the passenger was run over. Since the
airline employee was being transported gratuitously, Fil-Asia Air was
 not required to exercise extraordinary diligence for his safety and only
ordinary care.

Hence, it is the driver of the ambulance and his employer who

should be held liable for damages, because a passenger was run over.

13.
a. Shipper can still recover the unpaid balance for it is not for "loss
or damage" to goods the question of prescription of action is
governed not by the COGSA but by Art. 1144 of the Civil Code
which provides for a prescriptive period of ten years.

As defined in the Civil Code and as applied to Section 3(6),

paragraph 4 of the Carriage of Goods by Sea Act, "loss" contemplates
merely a situation where no delivery at all was made by the shipper of
the goods because the same had perished, gone out of commerce, or
disappeared in such a way that their existence is unknown or they
cannot be recovered.

The damages suffered by shipper as a result of the delay in the

shipment of his cargo are not covered by the prescriptive provision of
the Carriage of Goods by Sea Act above referred to, if such damages
were due, not to the deterioration and decay of the goods while in
transit, but to other causes independent of the condition of the cargo
upon arrival, like a drop in their market value.

b. No, in case of damaged condition, it should be the one-year

prescriptive period.

It was held by the Supreme Court in a similar circumstance that,

whatever damage or injury is suffered by the goods while in transit
would result in loss or damage to either the shipper or the consignee.
As long as it is claimed, therefore, as it is done here, that the losses or
damages suffered by the shipper or consignee were due to the arrival
of the goods in damaged or deteriorated condition, the action is still
basically one for damage to the goods, and must be filed within the
period of one year from delivery or receipt, under the above-quoted
provision of the Carriage of Goods by Sea Act.

Hence, the one-year prescriptive period should apply.

 c. The prescriptive period to file claim is the ten year for there was
no loss because the goods had simply been misdelivered.

In a similar case, the Court had the occasion to rule that, one-year
period of limitation is designed to meet the exigencies of maritime
hazards. In a case where the goods shipped were neither lost nor
damaged in transit but were, on the contrary, delivered in port to
someone who claimed to be entitled thereto, the situation is different,
and the special need for the short period of limitation in cases of loss
or damage caused by maritime perils does not obtain.

In this case, the cargo was delivered to a different person

(misdelivered), there is neither deterioration nor disappearance nor
destruction of goods caused by the carrier's breach of contract.

Hence, the prescriptive period, regardless of the circumstance that

it was damaged, is ten years.

Whatever reduction there may have been in the value of the goods
is not due to their deterioration or disappearance because they had
been damaged in transit. As the suit below is not for 'loss or damage'
to goods contemplated in s 3(6), the question of prescription of action
is governed, not by COGSA, but by art 1144 of the Civil Code, which
provides for a prescriptive period of ten years.

14.
a. The limited liability rule, is not without exceptions, namely:
(1) where the injury or death to a passenger is due either to the
fault of the ship owner, or to the concurring negligence of the ship
owner and the captain;
(2) where the vessel is insured; and
(3) in workmen's compensation claims.

b. The Appellate Court did not err in applying the doctrine of limited
liability.

It was held in Yangco vs. Laserna, et al., supra that, ff the ship
owner or agent may in any way be held civilly liable at all for injury to
or death of passengers arising from the negligence of the captain in
cases of collisions or shipwrecks, his liability is merely co-extensive
 with his interest in the vessel such that a total loss thereof results in
its extinction.

In this case, there is nothing in the records to show that the loss
of the cargo was due to the fault of the private respondent as
shipowners, or to their concurrent negligence with the captain of the
vessel.
Hence, the Appellate Court’s decision was tenable.

15.

a. There was no force majeure to exempt the carrier from liability.

In a similar case, the Court had the occasion to rule that, the
sinking of the vessel was not due to force majeure, but to its
unseaworthy condition.

In this case, the sinking of the vessel was not due to the
typhoon, but due to its unseaworthiness. Where the vessel is found
unseaworthy, the shipowner is also presumed to be negligent since it
is tasked with the maintenance of its vessel.

Hence, the was no force majeure.

b. No, the limited liability doctrine does not apply to the case at
hand.

As prescribed by law, an exception to the limited liability doctrine

is when the damage is due to the fault of the shipowner or to the
concurrent negligence of the shipowner and the captain.

In this case, it failed to prove that the unseaworthiness of its

vessel was not due to its fault or negligence. The sinking of the vessel
was not due to force majeure, but to its unseaworthy condition.

Hence, the shipowner shall be liable to the full-extent of the

damage.

16.
a. The applicable law is Civil Code.
 In Lathigra v. British Airways, it was held that the airlines’
negligent act of reconfirming the passenger’s reservation days before
departure and failing to inform the latter that the flight had already
been discontinued is not among the acts covered by the Warsaw
Convention, since the alleged negligence did not occur during the
performance of the contract of carriage but, rather, days before the
scheduled flight.

In the case at hand, the Singapore Airlines rejected the tickets of

S because PAL did not endorse them.

Hence, the applicable law is Civil Code because the case does
not fall under the Warsaw Convention.

b. The cause of action has not yet prescribed, for the prescription
period is 4 years.

The applicable prescription period is that provided under Article

1146 of the Civil Code, Art. the following actions must be instituted
within four years: (1) Upon an injury to the rights of the plaintiff, and
(2) Upon a quasi-delict.

The present case involves a special species of injury resulting

from the failure of PAL and the Singapore Airlines to transport S from
Singapore to Jakarta. As a result, there exists a profound distress,
fear, anxiety and humiliation on the part of S.

Hence, the prescription period is 4 years.

17.

a. XYZ Shipping Corporation can validly ask for the rescission of the
Charter Party, and subsequently, Sand may recover damages to
the extent of its losses.

Under Article 689 of the Code of Commerce, at the request of

the person from whom the vessel is chartered the charter party may
be rescinded, specifically, if the person from whom the vessel was
chartered should sell her before the charterer has begun to load her
and the purchaser should load her for his own account. In such case
the vendor shall indemnify the charterer for the losses he may suffer.
 In this case, it sold the vessel before the charterer has begun to
load the vessel and the purchaser loads it for his own account.

Hence, Sand may recover damages to the extent of its losses.

b. It is bound by the charter party, but XYZ would have to

indemnify Oslob if it was not informed of the Charter Party at the
time of sale.

Under Article 689 of the Code of Commerce, if the new owner of

the vessel should not load her for his own account the charter party
shall be respected, and the vendor shall indemnify the purchaser if the
former did not inform him of the charter pending at the time of making
the sale.

c. Yes, Sand Development Corporation considered under this

charter party an “Owner Pro Hac Vice”.

Under the case of Litonjua Shipping Co v. National Seamen's

Board GR 51910, Aug 10, 1989, it was held that the term "Owner Pro
Hac Vice of the Vessel," is generally understood to be the charterer of
the vessel in the case of bareboat or demise charter whereby the
shipowner turns over possession of his vessel to the charterer, who
then undertakes to provide a crew and victuals and supplies and fuel
for her during the term of the charter.

In this case, the Sand Development Corporation entered into a

voyage charter with XYZ Shipping Corporation, over the latter’s vessel,
M/V Lady Love.

Therefore, Sand Development Corporation considered under this

charter party an “Owner Pro Hac Vice” as expressed by law.

18. No, they are not under obligation to file a maritime protest for a
successful maintenance of the action.

Art. 835 of the Code of Commerce states that “the action for
recovery of damages and losses arising from collisions cannot be
admitted without a previous protest or declaration presented by the
 captain within 24 hours before the competent authority of the point
where the collision took place, or of the first port of arrival.”

In this case, a marine protest is required to be made by the

master of the vessel, William Lines, Inc. who collided with M.S.
General, not by Rafael and Tanya who are just passengers.

Hence, Tanya and Rafael are not under obligation to a file a

maritime protest.

19.
a. Yes, there was a general average loss.

The law defines gross or general averages as damages and

expenses which are deliberately caused in order to save the vessel,
her cargo, or both at the same time, from a real and known risk, and
particularly, such as goods jettisoned to lighten the vessel, whether
they belong to the vessel, to the cargo, or to the crew, and the
damage suffered through said act by the goods or board; the damage
caused to the vessel by scuttling or entering her hold in order to save
the cargo; and the expenses of the liquidation of the average.

In the given facts, the loss of petroleum is of general loss.

Steam vessels navigating coastwise and inland waters are entitled to
contribution as a general average loss.

Hence, it was general average loss.

b. Yes, the shipper should bring a suit against the captain.

Under Article 852 of the Code of Commerce, the captain is

required to initiate the proceedings for the adjustment, liquidation, and
distribution of any gross average to which the circumstances of the
voyage may have given origin; and it is therefore his duty to take the
proper steps to protect any shipper whose goods may have been
jettisoned for the general safety.

Thus, the captain of the vessel did not take those steps as cited
in the provision of the law, and the court is of the opinion that the
failure of the captain to take those steps gave rise to a liability for
which the owner of the ship must answer.
 20.
a. X & Co. is liable for the death of all the passengers of the said
flight.

Under Article 1756 of the Civil Code it states that, in case of

death of or injuries to passengers, common carriers are presumed to
have been at fault or to have acted negligently, unless they prove that
they observed extraordinary diligence.

In the case at bar, X & CO. failed to observe extraordinary

diligence in the vigilance having an explosive device contained in a
suitcase by another passenger in the ill-fated aircraft.

Hence, X & Co. failed to exercise utmost diligence in the safety

of
Passengers.

b. As the counsel for X & Co., I will establish that despite an

exercise
of utmost diligence the explosion could not have been avoided
for the device was admitted by a passenger through fraud
despite diligent security upon boarding.

c. If I were the judge, I will hold X & Co. liable.

As a matter of law, in the carriage of passengers, the failure of

the common carrier to bring the passengers safely to their destination
immediately raises the presumption that such failure is attributable to
the carrier’s fault or negligence.

Evidently, the carrier, X & Co. did not take the necessary
precautions in ensuring the safety of passengers in the boarding.

21.
No, as it is expressly authorized by law to perform the functions
of a public utility, a certificate of public convenience is not necessary
for it to avail of a direct power connection from the NPC.

As prescribed by law, A "public utility" is a business or service

engaged in regularly supplying the public with some commodity or
 service of public consequence such as electricity, gas, water,
transportation, telephone or telegraph service.45 The term implies
public use and service.

Given the circumstance, PIA is a subsidiary of the PHIVIDEC with

governmental and proprietary functions. The PIA is authorized to
render indirect service to the public by its administration of the
PHIVIDEC industrial areas like the PIE-MO and may, therefore, be
considered a public utility.

Thus, a certificate of public convenience is not necessary for PIA

to avail of a direct power connection from the NPC.

22.
No, the NTC cannot revoke the CPCs of broadcast entities as a
necessary power flowing from the right to issue the same, since
legislative franchises are extended through statutes, they should
receive recognition as the ultimate expression of State
policy.

In a similar case, the Court had the occasion to rule that, “since
radio companies, including broadcast stations and telegraphic
agencies, were never under the jurisdiction of the Public Service
Commission except as to rate-fixing, that Commission’s authority to
impose fines did not carry over to the NTC even while the other
regulatory agencies that emanated from the Commission did retain the
previous authority their predecessor had exercised. No provision in the
Public Service Act thus can be relied upon by the petitioner to claim
that the NTC has the authority to cancel CPCs or licenses.”

Thus, allowing the NTC to countermand State policy by revoking

vested legal rights to operate broadcast stations unduly gives to a
mere administrative agency veto power over the implementation of
the law and the enforcement of especially vested legal rights.

23.
a. As defined by law, International Transportation means
transportation where a departure point and destination point,
regardless of whether an interruption in transportation or
reloading took place or not, are located either on the territory of
 different countries, or on the territory of one country if a stop is
planned on the territory of another country.

b. Yes, it is covered by the Warsaw Convention.

According to Article 1 (1) the Warsaw Convention 1929, it

applies to all international carriage of persons, luggage or goods
performed by aircraft for reward. It applies equally to gratuitous
carriage by aircraft performed by an air transport undertaking.

In the case at hand, during an international flight, Gadon, a

passenger of United Airlines and the airline’s flight attendant were
caught in an incident which resulted to a heated exchange which
included insults and profanity.

Hence, this case is covered by the Warsaw Convention.

c. Article 28 of the said convention provides that, (1) an action for

damages must be brought, at the option of the plaintiff, in the territory
of one of the High Contracting Parties, either before the Court having
jurisdiction where the carrier is ordinarily resident, or has his principal
place of business, or has an establishment by which the contract has
been made or before the Court having jurisdiction at the place of
destination, (2) questions of procedure shall be governed by the law of
the Court seized of the case.