Case Digest: American Airlines vs. Court of Appeals, 327 SCRA 482

 

American Airlines vs. Court of Appeals, 327 SCRA 482

Subject: Transportation Law

FACTS

Democrito Mendoza purchased a conjunction ticket from Singapore Airlines for a multi-leg trip. In Geneva, Mendoza decided to skip Copenhagen and fly directly to New York. He exchanged the unused portion of his ticket for a one-way ticket from Geneva to New York with American Airlines.

Mendoza filed a lawsuit against American Airlines in the Regional Trial Court of Cebu for damages before the regional trial court of Cebu for the alleged embarrassment and mental anguish he suffered at the Geneva Airport.

The petitioner filed a motion to dismiss for lack of jurisdiction of Philippine courts to entertain the said proceedings under Art. 28 (1) of the Warsaw Convention. The trial court denied the motion. CA affirmed the ruling of the trial court.

The petitioner asserts that the Philippines is neither the domicile nor the principal place of business of the defendant airline; nor is it the place of destination. As regards the third option of the plaintiff, the petitioner contends that since the Philippines is not the place where the contract of carriage was made between the parties herein, Philippine courts do not have jurisdiction over this action for damages.

ISSUE

Whether or not RTC of Cebu has jurisdiction over the case against American Airlines given Art 28 (1) of the Warsaw Convention.

RULING

Yes, RTC of Cebu has jurisdiction over the case in view of Art 28 (1) of the Warsaw Convention.

Under Art 28 (1) of the Warsaw convention an action for damages must be brought at the option of the plaintiff either before the court of the 1) domicile of the carrier; 2) the carrier’s principal place of business; 3) the place where the carrier has a place of business through which the contract was made; 4) the place of destination.

In this case, there is no dispute that the petitioner issued the ticket in Geneva which was neither the domicile nor the principal place of business of the petitioner nor the respondent’s place of destination. However, SC held that the contract of carriage between the private respondent and Singapore Airlines although performed by different carriers under a series of airline tickets constitutes a single operation. The third option under Art 28 (1) of the Warsaw Convention e.g., to sue in the place of business of the carrier wherein the contract was made, is therefore, Manila, and Philippine courts are clothed with jurisdiction over this case. While this case was filed in Cebu and not in Manila the issue of venue is no longer an issue as the petitioner is deemed to have waived it when it presented evidence before the trial court.

Case Digest: Merit Freight International Inc. vs. Federal Express Pacific Inc., C.A. G.R. SP. No. 119658

Merit Freight International Inc. vs. Federal Express Pacific Inc., C.A. G.R. SP. No. 119658, January 23, 2013

Subject: Transportation Law

FACTS

On 18 March 2009, respondent [Federal Express Pacific, Inc.] filed with the Civil Aeronautics Board (“CAB”) an Application for Authority to Operate as an International Airfreight Forwarder.

On 14 March 2011, after all parties to the case were heard and evidence received, the CAB issued the respondent a provisional authority to operate as an International Airfreight Forwarder. The license was valid for one (1) year effective 10 March 2011 until 9 March 2012.

On 12 April 2011, respondent filed a Motion to Issue Regular License, valid for a period of at least five (5) years.

On 25 April 2011, petitioner [Merit Freight International, Inc.] filed a Motion for Reconsideration and Opposition/Comment to Applicant's Motion for Issuance of Regular License. 

On 2 May 2011, the CAB granted the motion and issued respondent a regular license, allowing it to operate as an international airfreight forwarder for a period of five years, i.e., from 2 May 2011 until 1 May 2016.

Petitioners felt aggrieved by the above resolution of the Civil Aeronautics Board; thus, they filed the present petitions.

ISSUE

Whether or not only Filipinos can be granted a permit to engage in international airfreight forwarding business.

RULING

Yes, only Filipinos can be granted a permit to engage in international airfreight forwarding business.

The 1987 Constitution “provides for the Filipinization of public utilities by requiring that any form of authorization for the operation of public utilities should be granted only to ‘citizens of the Philippines or to corporations or associations organized under the laws of the Philippines at least sixty per centum of whose capital is owned by such citizens.’

In this case, Federal Express Pacific, Inc., a “foreign corporation”, disqualified in our country from operating as an “International Airfreight Forwarder” which is clearly a public utility. Old Civil Aeronautics Board’s policy of limiting the issuance of permits to Filipino citizens with regard to the business of international airfreight forwarding, and (2) appellate court’s ruling that international airfreight forwarding, as a public utility enterprise, is covered by the restriction provided under Section 11, Article XII of the 1987 Constitution. 

Case Digest: Go Chan vs. Aboitiz, 98 Phil 179

 

Go Chan vs. Aboitiz, 98 Phil 179

Subject: Transportation Law

FACTS

The plaintiff shipped 240 cases of milk and the corresponding freight was paid; that the cargo was transhipped on the S. S. Snug Hitch and arrived at the port of Cebu in 1947 with 24 cases shortlanded; that a timely claim for the short-landed cargo of 24 cases was presented by the plaintiff to the defendant but the latter asked to defer the claim; that when the 24 cases arrived, Go Tiong, the General Manager of the plaintiff corporation did not receive them because they were no longer in cases but in sakes, and that the cans were no longer fit for human consumption - they were damaged and rusty; that the delay in payment was due to the request of the defendant for amicable settlement which later, the defendant refused to pay.

The defendant answered that the loss was due to a peril of the sea and that anyway the action was barred because more than one year had elapsed from February 1947 to May 1950 when the complaint was filed.

The court of first instance of Cebu rendered judgment for the plaintiff. Having failed in a motion to reconsider, defendant perfected its appeal.

ISSUE

Whether or not the action has already prescribed.

RULING

Yes, the action has prescribed.

Under existing jurisprudence, the prescriptive period of one year established in the Carriage of Goods by Sea Act modified pro tanto the provisions of Act No. 190 as to goods transported to and from Philippine ports in foreign trade.

In this case, the transaction under consideration is covered by the Carriage of Goods by Sea Act, and since this is a special act, its provisions must of necessity limit or restrict a law of general application. Moreover, since the action was not filed within one year from February, 1947 when the cargo was delivered or should have been delivered, the law discharged this defendant from all liability in connection with the carriage of said goods.

Case Digest: Chiok Ho vs. Compañia Maritima, 13 SCRA 734, 737

Chiok Ho vs. Compañia Maritima, 13 SCRA 734, 737, April 30, 1965

Subject: Transportation Law

FACTS

A shipment of 69 cases containing radio parts was discharged from the vessel S.S. Samar of the Compañia Maritima and placed in the Special Cargo Coral of the Manila Port Service which was then operating the arrastre service at the Port of Manila. Marinduque Iron Mines, Inc. is the consignee. However, upon delivery of said goods, the consignee found that 4 cases were missing.

Chiok Ho, the assignee, made a formal demand upon the Manila Port Service for the payment of the value of missing goods which was refused by CM. For this reason, Chiok Ho filed the action before the CFI of Manila to recover not the amount of missing goods plus attorney’s fees, and expenses of litigation.

CFI rendered a decision ordering the defendants, Manila Port Service and the Manila Railroad Company, to pay the plaintiff. Hence, the defendants interposed the present appeal.

The defendant alleged that since the appellee did not file his claim with the Manila Port Service within the reglementary 15-day period, stamped as notice on both delivery permit and pertinent gates passes used to withdraw the goods, from May 15, 1960 the date of discharge of the last package of the shipment from the carrying vessel, his claim is already barred and, consequently, his action should be dismissed.

ISSUE

Whether or not the reglementary 15-day period has expired.

RULING

No, the reglementary 15-day period has not expired.

Under the law, when the claim for indemnity for a particular loss is rejected, such claim shall be filed "within 15 days from the date of discharge of the last package from the carrying vessel."

In this case, the stipulation is completely silent as to when the shipment was delivered to the consignee. It is not enough that the consignee be notified of the discharge of the shipment from the carrying vessel in order that section 15 of the management agreement may be applicable. It is equally important to indicate the date when the shipment was actually delivered to the consignee in order that he may be given the chance to discover if there is something missing or lost in the shipment. Only in this way can he be apprised of the loss and file the necessary claim, - not otherwise. Since this is a matter of defense on the part of the defendants, in the absence of proof to the contrary, it should be presumed that the claim was filed within the reglementary period, as properly found by the lower court.

Case Digest: Malayan vs. Manila Port, 85 SCRA 320

 

Malayan vs. Manila Port, 85 SCRA 320

Subject: Transportation Law

FACTS

In a suit for recovery of money arising out of short delivery and pilferage of goods — which came into the Philippines under four importations — while in the possession of the Manila Port Service, judgment was rendered by the City Court of Manila against defendants. The latter appealed. Thereafter, in the Court of First Instance of Manila, judgment was rendered against the defendants.

Defendants appealed on points of law.

Firstly, on December 31, 1961, the arrival of the "Pioneer Ming" from the United States with a shipment of electrical surface raceways and fittings resulted in the pilferage of one carton and the non-delivery of six cartons, forming the basis of the first cause of action.

Secondly, on November 29, 1961, the Brunette Shoe Factory imported upper leather, but upon discharge into the custody of Manila Port Service, the delivered leather fell short of 111-¾ square feet, leading to the second cause of action.

The third cause of action, arising on November 27, 1961, involves Dupro (Philippines), Inc.'s importation of 18 cases of auto parts on the "Pioneer Ming," with one case being pilfered upon discharge into the Manila Port Service's custody.

Lastly, the fourth cause of action relates to the arrival on September 15, 1962, of a shipment of 15 cases of black umbrella cloth imported by Chua Luan and Co., Inc. from Japan via the SS "Narra."

Despite being discharged into the custody of the Manila Port Service, two cases of the shipment were pilfered, resulting in a loss to the consignee.

ISSUE

Whether or not the Manila Port Service is liable.

RULING

Yes, the Manila Port Service is liable.

Firstly, Paragraph 7 of the Stipulation of Facts reads: "VII. That the goods were discharged complete into the custody of the defendant." Defendants in their brief categorically state that the opinion of the lower court "that the shipments in question were discharged into the custody of the defendant Manila Port Service complete with respect to quantity, is not disputed."

Secondly, Article 1265 of the Civil Code provides that whenever "the thing is lost in the possession of the debtor, it shall be presumed that the loss was due to his fault, unless there is proof to the contrary." As early as 1907, this Court held that under Article 1183 of the Spanish Civil Code (Article 1265 of the new Code), "the burden of explanation of the loss rested upon the depositary and under article 1769 [of the Spanish Civil Code — now Article 1981 of the new Civil Code], the fault is presumed to be his."

In this case, it is now futile for defendants to pass on liability to the carriers which are not parties to this action. Although defendants argue the fact that the shipments were received by defendant Manila Port Service complete, this does not mean that the goods were received in "good order". This is immaterial because plaintiff's claim is for short delivery and pilferage. Furthermore, drawing parallels between the legal relationships of consignee-arrastre operator and consignee-common carrier, the arrastre operator is obligated to care for the goods. It would seem quite elementary that since the care to be used in the safekeeping of the goods rests peculiarly within the knowledge of the Manila Port Service, it is incumbent upon said defendant to prove that the losses were not due to its negligence or that of its employees. Because there is no proof that the losses occurred either without defendants' fault or by reason of caso fortuito, defendants are liable.

Case Digest: Delgado Brothers vs. Home Insurance, 1 SCRA 853

Delgado Brothers vs. Home Insurance, 1 SCRA 853

Subject: Transportation Law

FACTS

In 1955, Victor Bijou & Co. shipped aboard the vessel S.S. Leoville, and consigned to the Judy Philippines, Inc. of Manila a shipment of 1 case Linen Handkerchief and 2 cases cotton piece goods from New York to Manila.

The shipment was insured with herein respondent by the shipper and/or consignee. The shipment was unloaded complete and in good order from the said vessel by the petitioner, but the latter delivered the same to the consignee with 1 case of Linen Handkerchief in bad order, with a shortage of 503 yards of Linen Print Handkerchiefs, to the prejudice, loss and damage of the shipper and/or consignee.

Respondent paid the shipper/consignee and was issued a subrogation receipt. Notwithstanding the respondent’s claim, the petitioner failed and refused to pay the shipper and/or consignee and/or respondent. Hence, the respondent was compelled to file the case.

As special defense, petitioner alleged that since no claim whatsoever was filed by respondent or the consignee, or their representatives against petitioner within the 15-day period from the date of the arrival of the goods before they could file a suit in the court of proper jurisdiction within 1 year from the date of said arrival at the Port of Manila hence petitioner is completely relieved and released of any liability for loss or damage under the law and in accordance with the pertinent provisions of the Management Contract with the Bureau of Customs, covering the operation of the Arrastre Service for the Port of Manila; and that petitioner in no way acts as an agent of the carrying vessel or of the importer or consignee. Petitioner, therefore, prayed for the dismissal of respondent’s complaint.

After trial, the court rendered a decision dismissing the case and absolving petitioner from liability on the merits of the latter’s special defenses invoked in its answer. On appeal, CA reversed CFI’s decision and ordered the petitioner to pay to respondent.

ISSUE

Whether or not CFI had no jurisdiction over the subject matter of the action, the same not being an admiralty case, and the amount sought to be recovered falling within the exclusive original jurisdiction of the Municipal Court of Manila.

RULING

Yes, CFI had no jurisdiction over the subject matter of action, the same not being an admiralty case, and the amount sought to recover falls within the exclusive original jurisdiction of the MTC of Manila.

Under the law, in case of controversy involving both maritime and non-maritime subject matter, where the principal matter involved belongs to the jurisdiction of a court of common law or of equity, admiralty will not take cognizance of incidental maritime matters connected therewith but will relegate the whole controversy to the appropriate tribunal.

In this case, Section 2 of the Management Contract with the Bureau of Customs clearly states the functions of petitioner as arrastre operator. Nothing in those functions relates to the trade and business of navigation nor the use or operation of vessels.  Delgado Brothers, Inc. has nothing to do with the loading or unloading of cargoes to and from the ships. Its operation on and its responsibility for the merchandise and goods begins from the time they are placed upon the wharves or piers or delivered along sides of ships and does not deal with any maritime matter or with the administration and application of any maritime law. Court of First Instance of Manila has jurisdiction in cases where suit is brought directly against the carrier or shipowner. Respondent cannot invoke the rule against multiplicity of suits, for the simple reason that said rule has to be subservient to the superior requirement that the court must have jurisdiction.

Case Digest: Eastern Shipping vs. Margarine, 93 SCRA 257

 

Eastern Shipping vs. Margarine, 93 SCRA 257

Subject: Transportation  Law

FACTS

The court upheld the appellate judgment holding petitioner liable for the damage suffered by respondent's copra cargo on board petitioner's vessel. Respondent corporation was the consignee of 500 long tons of Philippine copra in bulk with a total value of US$ 108,750.00. A fire broke out aboard the vessel, causing water damage in the amount of US$ 591.38. The lower court rejected petitioner's defense that it was not liable under Philippine Law for the damage. The court ordered Eastern Shipping Lines, Inc. to pay the plaintiff, Margarine-Verkaufs-Union GMBH, US$ 591.38, plus attorney's fees and litigation costs. The petitioner reiterated its submission that Article 848 of the Code of Commerce should be applied.

ISSUE

Whether or not Article 848 of the Code of Commerce governs this case despite the bill of lading which expressly contained the application of the York-Antwerp Rules which provide for MARGARINE-VERKAUFS-UNION GmbH’s fun recovery of the damage loss.

RULING

No.

Article 848 states that claims for averages shall not be admitted if they do not exceed 5 per cent of the interest which the claimant may have in the vessel or cargo if it is gross average, and 1 per cent of the goods damaged if particular average, deducting in both cases the expenses of appraisal, unless there is an agreement to the contrary.

In this case, SC held Article 848 is not applicable in this particular case for the reason that the bill of lading contains an agreement to the contrary. There is a clear and irreconcilable inconsistency between the York-Antwerp Rules expressly adopted by the parties as their contract under the bill of lading which sustains Eastern’s claim, and Article 848 as cited by Margarine which would bar the same. A contract of adhesion as embodied in the printed bill of lading issued for the shipment to which the consignee merely adhered, having no choice in the matter, and consequently, any ambiguity must be construed against the author.