Case Digest: Philippine Refining Co. vs. Francisco Jarque, G.R. No. L-41506

 

Philippine Refining Co. vs. Francisco Jarque, 61 Phil. 229, G.R. No. L-41506, March 25, 1935

Subject: Transportation Law

FACTS

Philippine Refining Co., Inc., and Francisco Jarque executed three mortgages on the motor vessels Pandan and Zaragoza. These documents were recorded in the record of transfers and incumbrances of vessels for the port of Cebu and each was therein denominated a "chattel mortgage".

Neither of the first two mortgages had appended an affidavit of good faith. The third mortgage contained such an affidavit, but this mortgage was not registered in the customs house or within the period of thirty days prior to the commencement of insolvency proceedings against Francisco Jarque; also, while the last-mentioned mortgage was subscribed by Francisco Jarque and M. N. Brink, there was nothing to disclose in what capacity the said M. N. Brink signed.

A fourth mortgage was executed by Francisco Jarque and Ramon Aboitiz on the motorship Zaragoza and was entered in the chattel mortgage registry of the register of deeds on May 12, 1932, or again within the thirty-day period before the institution of insolvency proceedings.

A petition was filed with the Court of First Instance of Cebu in which it was prayed that Francisco Jarque be declared an insolvent debtor, which soon thereafter was granted, with the result that an assignment of all the properties of the insolvent was executed in favor of Jose Corominas.

Judge Jose M. Hontiveros declined to order the foreclosure of the mortgages, but on the contrary, sustained the special defenses of fatal defectiveness of the mortgages. In so doing we believe that the trial judge acted advisedly.

ISSUE

Whether or not the mortgages are defective.

RULING

Yes, they are defective.

Under Article 585 of the Code of Commerce, for all purposes of law not modified or restricted by the provisions of this Code, vessels shall continue to be considered as personal property.

In this case, article 585 of the Code of Commerce is in force. Vessels are considered personal property under the civil law. A mortgage on a vessel is in nature a chattel mortgage. The only difference between a chattel mortgage of a vessel is that a record of documents affecting the title to a vessel must be entered in the record of the Collector of Customs at the port of entry. Section 5 of the Chattel Mortgage Law provides that a good chattel mortgage includes the requirement of an affidavit of good faith appended to the mortgage and recorded therewith. A chattel mortgage of a vessel that lacks the affidavit of good faith is unenforceable against third persons.

Case Digest: McMicking vs. Banco Espanol, G.R. No. 5029

 

McMicking vs. Banco Espanol, 13 Phil 429, G.R. No. 5029, April 1, 1909

Subject: Transportation Law

FACTS

In 1907, Sanchez and Cue Suan owned the Hock-Tay steamship. They borrowed P3,000 from El Banco Español-Filipino and provided a chattel mortgage as security. The mortgage was recorded in the port's collector of customs and register of property. In October, El Banco Español-Filipino delivered the mortgage to Manila's sheriff, requesting the ship's sale. The sheriff informed the mortgagors of the request and the ship would be sold in accordance with the law. The sale was scheduled for October 27th, and the steamer was sold to the highest bidder for P30,000. The transaction was documented in various records.

ISSUE

Whether or not appellant has liens existing in this case.

RULING

Yes, the appellant has existing liens.

Under Article 580 of the Code of Commerce, the wages of the crew and expenses incurred for the ship during the last voyage have a preference over the claim of a mortgagee.

In this case, this reference is known as a legal lien and takes priority over a lien created by giving the ship as security for money borrowed. The sale of a ship under a mortgage does not affect the right of prior lien holders, and their remedies lie in foreclosing their liens against the ship itself.

 

Case Digest: China Airlines vs. Court of Appeals, G.R. No. 45985

 

China Airlines vs. Court of Appeals, 185 SCRA 449, G.R. No. 45985, 18 May 1990

Subject: Transportation Law

FACTS

Jose Pagsibagan, General Manager of Rentokil (Phil.) Inc. purchased an airline ticket for Manila-Taipei-Hong Kong-Manila with Philippine Airlines which at that time was a sales and ticketing agent of China Air Lines. His plane ticket indicated that he is booked on CAL CI Flight No. 812 to depart from Manila for Taipei on June 10, 1968 at 5:20 p.m. as issued by PAL, through its ticketing clerk defendant Roberto Espiritu. One hour before his flight, Pagsibagan was informed that Flight No. 812 bound to Taipei had already left at 10:20. 

Immediately, PAL employees made appropriate arrangements for Pagsibagan to take the next flight to Taipei the following day, to which he arrived around noontime. Pagsibagan filed a complaint for damages, alleging further the negligence of Roberto Espiritu. PAL on its defense alleges that its ticketing office through Roberto Espiritu asked for confirmation from CAL before issuing the ticket to Mr. Pagsibagan, which CAL confirmed. Defendant China Air Lines, for its part, disclaims liability for the negligence and incompetence of the employees of PAL. 

Moreover, CAL avers that it had properly notified PAL of the flight schedule. RTC ruled that PAL and its employee shall indemnify Pagsibagan. Complaint is dismissed with respect to CAL. CA sustained the ruling of the RTC denying Pagsibagan’s claim for moral damages.

ISSUE

Whether or not multi carriers may be held liable in one contract of carriage.   

RULING

No.

Under the law, when an injury is caused by the negligence of an employee, there is instantly arises a presumption of law that there was negligence on the part of the employer either in the selection of the employee or in the supervision over him after such selection. The presumption, however, may be rebutted by a clear showing on the part of the employer that it has exercised the care and diligence of a good father of a family in the selection and supervision of his employee.

In this case, CAL was absolved because the court said that the latter did not contribute to the negligence committed by therein defendants-appellants PAL and Roberto Espiritu. PAL and Roberto Espiritu are declared jointly and severally liable to pay the sum of P10,000.00 by way of nominal damages, without prejudice to the right of PAL to recover from Roberto Espiritu reimbursement of the damages that it may pay respondent Jose Pagsibigan.

Case Digest: Lufthansa vs. Court of Appeals, G.R. No. 83612

 

Lufthansa vs. Court of Appeals, 238 SCRA 290, G.R. No. 83612, November 24, 1994

Subject: Transportation Law

FACTS

Tirso V. Antiporda, Sr., an associate director of the Central Bank of the Philippines and a consultant for various international organizations, was issued a confirmed Lufthansa ticket for a five-leg trip to Malawi, Africa, involving different airlines. However, during a layover in Bombay, Antiporda was informed that his seat on the Air Kenya flight to Nairobi had been given to another passenger, causing him to miss his appointment in Blantyre, Malawi.

Antiporda demanded damages from Lufthansa, but the airline denied liability. Antiporda then filed a complaint against Lufthansa for breach of contract before the Regional Trial Court, which ruled in his favor. The Court held that Lufthansa had the obligation to transport Antiporda for the entire five-leg trip, and the refusal to transport him to his final destination constituted a breach of contract.

The trial court also found that Lufthansa's conduct was aggravated by the discourteous and arbitrary behavior of its officials in Bombay. Antiporda was awarded moral and exemplary damages, as well as attorney's fees. Lufthansa appealed to the Court of Appeals, which affirmed the trial court's decision.

ISSUE

Whether or not Lufthansa is liable for damages for the "bumping-off" incident that occurred during Antiporda's layover in Bombay.

RULING

Yes, Lufthansa is liable for damages.

Article 30 of the Warsaw Convention provides: (1) In the case of transportation to be performed by various successive carriers and falling within the definition set out in the third paragraph of Article I, each carrier who accepts passengers, baggage, or goods shall be subject to the rules set out in the convention, and shall be deemed to be one of the contracting parties to the contract of transportation insofar as the contract deals with that part of the transportation which is performed under his supervision. (2) In the case of transportation of this nature, the passenger or his representative can take action only against the carrier who performed the transportation during which the accident or the delay occurred, save in the case where, by express agreement, the first carrier has assumed liability for the whole journey.

In this case, SC rejected Lufthansa's argument that its responsibility ceased at Bombay Airport and that it was merely a ticket-issuing agent for the other carriers. The Court emphasized that the confirmed Lufthansa ticket covered the entire journey, and Lufthansa, as the principal in the contract of carriage, guaranteed Antiporda a sure seat with Air Kenya. The Warsaw Convention's provisions invoked by Lufthansa did not apply to the circumstances of the case, as the refusal to transport Antiporda was not a result of an accident or delay but rather the airline's decision to accommodate another passenger. Moreover, the Court upheld the award of moral and exemplary damages, as well as attorney's fees, based on Lufthansa's bad faith and the discourteous behavior of its officials in Bombay. The Court considered Antiporda's high government position and the impact of the incident on his professional commitments in Malawi.

Case Digest: KLM Dutch Airlines vs. Court of Appeals, G.R. No. L-31150

KLM Dutch Airlines vs. Court of Appeals, 65 SCRA 237, G.R. No. L-31150, July 22, 1975

Subject: Transportation Law

FACTS

The Philippine Travel Bureau to which Reyes was an accredited agent for international air carriers which are members of the International Air Transport Association, popularly known as the "IATA," of which both the KLM and the Aer Lingus are members.

The respondents approached Tirso Reyes, branch manager of the Philippine Travel Bureau for consultations about a world tour which they were intending to make with their daughter and a niece. Reyes submitted to them, after preliminary discussions, a tentative itinerary that prescribed a trip of thirty-five legs.

When the respondents left the Philippines, they were issued KLM tickets for their entire trip. However, their coupon for the Aer Lingus portion (Flight 861 for June 22, 1965) was marked "RQ" which meant "on request".

They went on with the trip. However, in Barcelona airport, the Spouses Mendoza were off-loaded the Aer Lingus and were denied of means going to Lourdes. Hence, they were forced to take a train to Lourdes and pay the fare from their own pockets. 

In March 1966, the respondents, referring to KLM as the principal of Aer Lingus, filed a complaint for damages with the CFI of Manila arising from breach of contract of carriage and for the humiliating treatment received by them at the hands of the Aer Lingus manager in Barcelona.

After due hearing, the trial court awarded damages to the respondents. Both parties appealed to the Court of Appeals. The KLM sought complete exoneration; the respondents prayed for an increase in the award of damages. Hence, the present recourse by the KLM.

ISSUE

Whether or not KLM should be liable for the damages

RULING

Yes, KLM is liable for the damages.

Under the Warsaw Convention, Art. 25. (1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with the law of the court to which the case is submitted, is considered to be equivalent to willful misconduct. (2) Similarly, the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused under the same circumstances by any agent of the carrier acting within the scope of his employment.

In this case, SC held that as the airline that issued those tickets with the knowledge that the respondents would be flown on the various legs of their journey by different air carriers, the KLM was chargeable with the duty and responsibility of specifically informing the respondents of conditions prescribed in their tickets or, in the very least, to ascertain that the respondents read them before they accepted their passage tickets. A thorough search of the record fails to show KLM officials or employees exerted effort to discharge, in a proper manner, their responsibility to the respondents. Hence, the respondents cannot be bound by the provision in question by which KLM unilaterally assumed the role of a mere ticket-issuing agent for other airlines and limited its liability only to untoward occurrences on its own lines.

Case Digest: New Zealand vs. Joy, G.R. No. L-7311

 

New Zealand vs. Joy, 97 Phil. 646, G.R. No. L-7311, September 30, 1955

Subject: Transportation Law

FACTS

A cargo of oats was consigned to Muller and Phipps (Manila) Ltd. The cargo was insured against all risks by The New Zealand Insurance Co., Ltd. When the cargo was discharged several cartons which contained the oats were in bad order. The consignee filed a claim against the insurer for the value of the damaged goods which the latter paid in the amount of P18,148.69. The insurer as subrogee of the consignee sued E. Razon, Inc. who was the arrastre operator. The insurer demanded reimbursement in the amount of P17,025.87. The lower figure is due to the fact that the carrier responded for its share of the loss in the sum of P1,121.02.

RTC ordered E. Razon to pay. On appeal, the CA reversed RTC’s decision on the ground of prescription.

ISSUE

Whether or not E. Razon is not liable due to prescription based on Art. 366 of the Code of Commerce.

RULING

No. 

Under Article 366 of the Code of Commerce, there are two requisites before claim for damages may be demanded: (1) consignment of goods through a common carrier, by a consignor in one place to a consignee in another place; and (2) the delivery of the merchandise by the carrier to the consignee at the place of destination.

In the instant case, the consignor is the branch office of Lee Teh & Co., Inc., at Catarman, Samar, which placed the cargo on board the ship Jupiter, and the consignee, its main office at Manila. The lower court found that the cargo never reached Manila, its destination, nor was it ever delivered to the consignee, the office of the shipper in Manila, because the ship ran aground upon entering Laoang Bay, Samar on the same day of the shipment. It follows that the aforesaid Article 366 does not have application because the cargo was never received by the consignee. Moreover, under the bill of lading issued by the carrier, it was the letter's undertaking to bring the cargo to its destination—Manila—and deliver it to consignee, which undertaking was never complied with. The carrier, therefore, breached its contract, and, as such, it forfeited its right to invoke in its favor the conditions required by Article 366.

Case Digest: Tan Pho vs. Hassamal, G.R. No. 45598

 

Tan Pho vs. Hassamal, 67 Phil. 555, G.R. No. 45598, April 26, 1939

Subject: Transportation Law

FACTS

Enrique Aldeguer purchased on credit from Hassamal Dalamal certain merchandise valued at P583.60. Hassamal Dalamal, the plaintiff and herein respondent, shipped said merchandise on the ship of Tan Pho, defendant and herein petitioner, and endorsed the bill of lading to the Chartered Bank of China, India & Australia, which, in turn, endorsed it to the Philippine National Bank. The said bill of lading was made to order and contains the initials of Enrique Aldeguer, "E. A."

Upon arrival of the goods in Sorsogon, the agent of the defendant-petitioner delivered the merchandise to Enrique Aldeguer who presented the invoice and signed a receipt. The plaintiff-respondent; upon learning that Aldeguer had received the merchandise, made him sign a forty-day draft for the value of said merchandise.

The Philippine National Bank, with the consent of the plaintiff-respondent, gave Aldeguer an extension of ten days to pay the amount of the merchandise in question, and upon the expiration of the period, the plaintiff-respondent required Aldeguer to pay the merchandise. Unable to get such payment, the plaintiff-respondent brought suit on November 28, 1934, that is, after the expiration of 174 days from the delivery of the merchandise to Aldeguer.

The court decided in favor of the defendant and against the plaintiff upon the theory that the delivery of the goods to Aldeguer constitutes nondelivery, wherefore, the claim not having been filed within thirty days nor the action instituted within sixty days, the plaintiff-respondent waived his claim or right of action against the defendant.

On appeal the Court of Appeals upheld the contrary view and rendered judgment in favor of the plaintiff and against the defendant. Hence the defendant has taken this appeal on certiorari.

ISSUE

Whether or not the delivery of certain merchandise by the carrier to an agent without presenting the bill of lading, constitutes misdelivery or nondelivery.

RULING

Yes, it constitutes misdelivery, not a case of nondelivery.

Under the Article 368 of the Code of Commerce, the carrier must deliver to the consignee without any delay or difficulty the merchandise received by him, by reason of the mere fact of being designated in the bill of lading to receive it; and should said carrier not do so he shall be liable for the damages which may arise therefrom.

In this case, the bill of lading was issued to the order of the shipper, the carrier was under a duty not to deliver the merchandise mentioned in the bill of lading except upon presentation of the bill of lading duly endorsed by the shipper. Defendant Tan Pho having delivered the goods to Enrique Aldeguer without the presentation by the latter of the bill of lading duly endorsed to him by the shipper, the said defendant made a misdelivery and violated the bill of lading, because his duty was not only to transport the goods entrusted to him safely, but to deliver them to the person indicated in the bill of lading. In addition, SC held that when the owner of the goods transported attempts to secure the value thereof from the person to whom they have been delivered by mistake, he cannot be deemed to have ratified the misdelivery or to have waived his right against the carrier.