MAGELLAN

FACTS:

Choju Co., Ltd purchased from Magellan Manufacturers Marketing Corp. (MMMC) 136,000 anahaw fans for $23,220

MMMC contracted with F.E. Zuellig, a shipping agent of Orient Overseas Container Lines, Inc., (OOCL) specifying that he needed an on-board bill of lading and that transhipment is not allowed under the letter of credit 

MMMC paid F.E. Zuellig the freight charges and secured a copy of the bill of lading which was presented to Allied Bank. The bank then credited the amount of US$23,220 covered by the letter of credit to MMMC

When MMMC's President James Cu, went back to the bank later, he was informed that the payment was refused by the buying for lack of bill of lading and there was a transhipment of goods

The anahaw fans were shipped back to Manila through OOCL who are demanding from MMMC P246,043.43 (freight charges from Japan to Manila, demurrage incurred in Japan and Manila from October 22, 1980 up to May 20, 1981 and charges for stripping the container van of the Anahaw fans on May 20, 1981)

MMMC abandoned the whole cargo and asked OOCL for damages

OOCL: bill of lading clearly shows that there will be a transhipment and that petitioner was well aware that MV (Pacific) Despatcher was only up to Hongkong where the subject cargo will be transferred to another vessel for Japan

RTC: favored OOCL:consented because the bill of lading

where it is clearly indicated that there will be transhipment

MMMC was the one who ordered the reshipment of the cargo from Japan to Manila

CA: Affirmed with modification of excluding demurrage in Manila

ISSUE: W/N the bill of lading which reflected the transhipment against the letter of credit is consented by MMMC 

HELD: YES. CA Affirmed with modification

Transhipmentact of taking cargo out of one ship and

loading it in anotherthe transfer of goods from the vessel

stipulated in the contract of affreightment to another vessel before the place of destination named in the contract has been reached

transfer for further transportation from one ship or conveyance to another

the fact of transhipment is not dependent upon the ownership of the transporting ships or conveyances or in the change of carriers, as the petitioner seems to suggest, but rather on the fact of actual physical transfer of cargo from one vessel to another

appears on the face of the bill of lading the entry "Hong Kong" in the blank space labeled "Transhipment," which can only mean that transhipment actually took place

bill of lading operates both as a receipt and as a

contract

receipt for the goods shippedcontract to transport and deliver

the same as therein stipulated names the parties, which

includes the consignee, fixes the route, destination, and freight rates or charges, and stipulates the rights and obligations assumed by the parties

law between the parties who are bound by its terms and conditions provided that these are not contrary to law, morals, good customs, public order and public policy

GR: acceptance of the bill without dissent raises the presumption that all the 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 term

There clearly appears on the face of the bill of lading under column "PORT OF TRANSHIPMENT" an entry "HONGKONG'

On board bill of lading vs. received for shipment bill of lading:

on board bill of ladingstated that the goods have been

received on board the vessel which is to carry the goods

received for shipment bill of lading stated that the goods have been

received for shipment with or without specifying the vessel by which the goods are to be shipped

issued whenever conditions are not

normal and there is insufficiency of shipping spacecertification of F.E. Zuellig, Inc. cannot

qualify the bill of lading, as originally issued, into an on board bill of lading as required by the terms of the letter of credit issued in favor of petitioner - it is a received for shipment bill of lading 

issued only on July 19, 1980, way beyond the expiry date of June 30, 1980 specified in the letter of credit for the presentation of an on board bill of lading 

Demurragecompensation provided for in the

contract of affreightment for the detention of the vessel beyond the time agreed on for loading and unloading

claim for damages for failure to accept delivery

before it could be charged for demurrage charges it should have been notified of the arrival of the goods first

Since abandon option was communicated, the same is binding upon the parties on legal and equitable considerations of estoppel

SAMAR

FACTS:Samar Mining Company, Inc. imported1

crate of welded wedge wire sieves shipped through Nordeutscher Lloyd

Bill of Lading No. 18:transshipped at port of

discharge: davao

Section 1, paragraph 3 of Bill of Lading No. 18

The carrier shall not be liable in any capacity whatsoever for any delay, loss or damage occurring before the goods enter ship's tackle to be loaded or after the goods leave ship's tackle to be discharged, transshipped or forwarded ...

Section 11:Whenever the carrier or m

aster may deem it advisable or in any case where the goods are placed at carrier's disposal at or consigned to a point where the ship does not expect to load or discharge, the carrier or master may, without notice, forward the whole or any part of the goods before or after loading at the original port of shipment, ... This carrier, in making arrangements for any transshipping or forwarding vessels or means of transportation not operated by this carrier shall be considered solely the forwarding agent of the shipper and without any other responsibility whatsoever even though the freight for the whole transport has been collected by him. ... Pending or during forwarding or transshipping the carrier may store the goods ashore or afloat solely as agent of the

shipper and at risk and expense of the goods and the carrier shall not be liable for detention nor responsible for the acts, neglect, delay or failure to act of anyone to whom the goods are entrusted or delivered for storage, handling or any service incidental thereto 

When the goods arrived in the port of Davao, it was delivered in good order and condition to the bonded warehouse of AMCYL but it was not delivered and received by Samar Mining Company, Inc.

Samar filed a claim against Nordeutscher and C.F. Sharp who brought in AMCYL as third party defendant

RTC: favored SamarNordeutscher and C.F. Sharp laible but

may enforce judgment against AMCYLISSUE: W/N the stipulations in bills of lading exempting the carrier from liability for loss or damage to the goods when the same are not in its actual custody is valid

HELD: YES. Reversed

Article 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 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. - applicable

Article 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. - no applicable since article contemplates a situation where the goods had already reached their place of destination and are stored in the warehouse of the carrier

Article 1884.       The agent is bound by his acceptance to carry out the agency, and is liable for the damages which, through his non-performance, the principal may suffer.

Article 1889.       The agent shall be liable for damages if, there being a conflict between his interests and those of the principal, he should prefer his own.

Article 1892.       The agent may appoint a substitute if the principal has not prohibited him from doing so; but he shall be responsible for the acts of the substitute:

(1)    When he was not given the power to appoint one;

(2)    When he was given such power but without designating the person and the person appointed was notoriously incompetent or insolvent

Article 1909.       The agent is responsible not only for fraud, but also for negligence which shall be judged with more or less rigor by the courts, according to whether the agency was or was not for a compensation.

The records fail to reveal proof of negligence, deceit or fraud committed by appellant or by its representative in the Philippines. Neither is there any showing of notorious incompetence or

insolvency on the part of AMCYT, which acted as appellant's substitute in storing the goods awaiting transshipment

SWEET LINES

FACTS:

Atty. Leovigildo Tandog and Rogelio Tiro bought tickets for Tagbilaran City via the port of Cebu

Since many passengers were bound for Surigao, M/S "Sweet Hope would not be proceeding to Bohol

They went to the proper brancg office and was relocated to M/S "Sweet Town" where they were forced to agree "to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard." and they were exposed to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits and their tickets were not honored so they had to purchase a new one

They sued Sweet Lines for damages and for breach of contract of carriage  before the Court of First Instance of Misamis Oriental who dismissed the compalitn for improper venue

A motion was premised on the condition printed at the back of the tickets -dismissed

instant petition for prohibition for preliminary injunction

ISSUE: W/N a common carrier engaged in inter-island shipping stipulate thru condition printed at the back of passage tickets to its vessels that any and all actions arising out of the contract of carriage should be filed only in a particular province or city

HELD: NO.petition for prohibition is DISMISSED. Restraining order LIFTED and SET ASIDE

contract of adhesionnot that kind of a contract where the

parties sit down to deliberate, discuss and agree specifically on all its terms, but rather, one which respondents took no part at all in preparing

just imposed upon them when they paid for the fare for the freight they wanted to ship

We find and hold that Condition No. 14 printed at the back of the passage tickets should be held as void and unenforceable for the following reasons

circumstances obligation in the inter-island ship

will prejudice rights and interests of innumerable passengers in different s of the country who, under Condition No. 14, will have to file suits against petitioner only in the City of Cebu 

subversive of public policy on transfers of venue of actions

philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote 21 the ends of justice

SERVANDO

FACTS:

Clara Uy Bico (1,528 cavans of rice worth P40,907.50) and Amparo Servando (44 cartons of colored paper toys and general merchandise worth

P1,070.50) loaded on board Philippine Steam Navigation Co.'s vessel, FS-176 for carriage from Manila to Pulupandan, Negros Occidental

Bill of Lading: 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 . ...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

2 pm: warehouse was razed by fireBefore the fire, 907 cavans of rice were

delivered by Uy Bico  Uy Bico and Servando filed a claim for the

value but was rejected by Philippine SteamCFI: favored UY Bico and Sercando

delivery of the shipment in question to the warehouse of the Bureau of Customs is not the delivery contemplated by Article 1736

ISSUE: W/N Philippine Steam should not be liable because of the stipulation in the bill of lading exempting it from fortuitous event

HELD: YES. set asideAgreement was in iteration of 

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.

'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.

nothing in the record to show that appellant carrier ,incurred in delay in the performance of its obligation

HEACOCK

EDGAR COKALIONG

BELGIAN OVERSEAS

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.-    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.-    Philippine First Insurance paid the claim of Philippine Steel and was thus subrogated.-    Philippine First then instituted a complaint for recovery of the amount paid to the consignee as insured.

-    Belgian claims 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. Belgian further 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, Belgian averred that, in any event, they exercised due diligence and foresight required by law to prevent any damage/loss to said shipment.-    The RTC dismissed the complaint.-    The CA reversed and ruled that Belgian 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. As to the extent of Belgian’s 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.

Issues:-    Whether the notice of loss was timely filed. (Belgian claims that pursuant to Section 3, paragraph 6 of 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.)

Whether the package limitation of liability under COGSA is applicable. (Belgian contends that assuming that they are liable their liability should be limited to US$500 per package as provided in the Bill of Lading and by Section 4(5)of COGS

Held:-    NO. 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.-    In this case, Belgian failed to rebut the prima facie presumption of negligence. First, as stated in the Bill of Lading, Belgian received the subject shipment in good order and condition in Germany. Second, prior to the unloading of the cargo, an Inspection Report 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 issued by Jardine Davies Transport Services 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.Fourth, the Certificate of Analysis stated that, based on the sample submitted and tested, the steel sheets found in bad order were wet with fresh water. Fifth, Belgian -- in a letteraddressed to the Philippine Steel --admitted that they were aware of the condition of the four coils found in bad order and condition.-    YES. First, the 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. Here, prior to unloading the cargo, an Inspection Report as to the condition of the goods was prepared and signed by representatives of both parties. 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. 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.-    A claim is not barred by prescription as long as the one-year period has not lapsed. In the present case, the cargo was discharged on July 31, 1990, while the Complaint51 was filed by respondent on July 25, 1991, within the one-year prescriptive

period.-    YES. In this case, there was no stipulation in the Bill of Lading 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 Belgian’s 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. That notation was made only for the convenience of the shipper and the bank processing the Letter of Credit.-    Second, a bill of lading is separate from the Other Letter of Credit arrangements. Thus, Belgian’s liability should be computed based on US$500 per package and not on the per metric ton price declared in the Letter of Credit.

SHEWARAM

FACTS:

Plaintiff paid for his ticket for his flight from Zamboanga to Manila. He checked in 3 luggages. Upon arrival in Manila, one of his luggages which contained a radio and a camera worth P353 was missing. Upon investigation by PAL, it was found out that it was mistagged and was sent to Iligan. The next day the lugggage was returned but the camera and radio were already missing.

Plaintiff now wants PAL to pay for the original amount of the camera and radio but PAL invoked the provision at the back of the ticket. The provision provided that the company would pay only P100 for any lost item not initially declared.

ISSUE:

Whether PAL is liable and to what extent.

HELD:

Yes. PAL being a common carrier is liable. Its contention that the liability limitation to P100 cannot be enforced. Accdg. to SC, there is nothing wrong in limiting the liability but first there must be a contract which is just and reasonable under the circumstances and must fairly be agreed upon (Art. 1750).

In this case, the print at the back of the ticket was so small and there was no signature at the back of the ticket to manifest a fairly agreed contract. Hence, PAL is liable for the whole amount of the objects although they were not initially declared.

To establish negligence, SC used Art 1734 and 1735. In these articles, there is an exclusive list where common carriers are exempted from liablility. These are the following:

1 flood , storm, earthquake, lightning or other natural disaster

2 act of the public enemyin war, whether international or civil

3 act or omission of the shipper or owner of goods

4 the cahracter of the goods or defects in the packing or in containers

5 order or act of competent public authorities

Since in the case at bar, none of these fall in the categories cited, PAL is considered negligent and liable.

CHINA AIRLINES

Facts: Daniel Chiok purchased from China Airlines a passenger ticket for air transportation covering Manila-Taipei-Hong Kong-Manila. The said ticket was exclusively endorsable to PAL. 

Before Chiok his trip, the trips covered by the ticket were pre-scheduled and confirmed by the former. When petitioner arrived in Taipei, he went to CAL to confirm his Hong Kong- Manila trip on board PAL. The CAL office attached a yellow sticker indicating the status was OK. 

When Chiok reached Hong Kong, he then went to PAL office to confirm his flight back to Manila. The PAL also confirmed the status of his ticket and attached a ticket indicating a status OK. Chiok proceeded to Hong Kong airport for his trip to Manila. However, upon reaching the PAL counter, he was told that the flight to Manila was cancelled due to typhoon. He was informed that all confirmed flight ticket holders of PAL were automatically booked for the next flight the following day. 

The next day, Chiok was not able to board the plane because his name did not appear on the computer as passenger for the said flight to Manila. 

Issue: Whether or not CAL is liable for damages? 

Held: The contract of air transportation between the petitioner and respondent, with the former endorsing PAL the segment of Chiok’s journey. Such contract of carriage has been treated in this jurisprudence as a single

operation pursuant to Warsaw Convention, to which the Philippines is a party. 

In the instant case, PAL as the carrying agent of CAL, the latter cannot evade liability to respondent, Chiok, even though it may have been only a ticket issuer for Hong Kong- Manila sector.

It is significant to note that the contract of air transportation was between petitioner and respondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always been treated in this jurisdiction as a single operation.

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."

In American Airlines v. Court of Appeals, we have noted that under a general pool partnership agreement, the ticket-issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent.

Likewise, as the principal in the contract of carriage, the petitioner in British Airways v. Court of Appeals was held liable, even when the breach of contract had occurred, not on its own flight, but on that of another airline. The Decision followed our ruling in Lufthansa German Airlines v. Court of Appeals, in which we had held that the obligation of the ticket-issuing airline remained and did not cease, regardless of the fact that another airline had undertaken to carry the passengers to one of their destinations.

SANTOS V CA

FACTS: The petitioner is a minor and a resident of the Philippines. Private respondent Northwest Orient Airlines (NOA) is a foreign corporation with principal office in Minnesota, U.S.A. and licensed to do business and maintain a branch office in the Philippines.On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San Francisco. U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The scheduled departure date from Tokyo was December 20, 1986. No date was specified for his return to San Francisco.

On December 19, 1986, the petitioner checked in at the NOA counter in the San Francisco airport for his scheduled departure to Manila. Despite a previous confirmation and re-confirmation, he was informed that he had no reservation for his flight from Tokyo to Manila. He therefore had to be wait-listed.

On March 12, 1987, the petitioner sued NOA for damages in the RTC of Makati. On April 13, 1987, NOA moved to dismiss the complaint on the ground of lack of jurisdiction, citing Article 28(1) of the Warsaw Convention, reading as follows:

Art. 28. (1) An action for damage must be brought at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court of the domicile of the carrier or of his principal place of business, or where he has a place of business through which the contract has been made, or before the court at the place of destination.

The private respondent contended that the Philippines was not its domicile nor was this its principal place of business. Neither was the petitioner’s ticket issued in this country nor was his destination Manila but San Francisco in the United States.Lower court granted the dismissal, CA affirmed.

ISSUE: WON the Philippines has jurisdiction over the case. (Issue raised by the party is WON the provision of the Warsaw convention was constitutional)

HELD: No jurisdiction (the provision is constitutional)

The Convention is a treaty commitment voluntarily assumed by the Philippine government and, as such, has the force and effect of law in this country. The petitioner’s allegations are not convincing enough to overcome this presumption. Apparently, the Convention considered the four places designated in Article 28 the most convenient forums for the litigation of any claim that may arise between the airline and its passenger, as distinguished from all other places.

NOTES:

WON Warsaw convention applies.Convention applies to all international transportation of persons performed by aircraft for hire. Whether the transportation is “international” is determined by the contract of the parties, which in the case of passengers is the ticket. When the contract of carriage provides for the transportation of the passenger between certain

designated terminals “within the territories of two High Contracting Parties,” the provisions of the Convention automatically apply and exclusively govern the rights and liabilities of the airline and its passenger.

WON MNL or SFO was the destination.The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract of carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioner’s ticket shows that his ultimate destination is San Francisco. Although the date of the return flight was left open, the contract of carriage between the parties indicates that NOA was bound to transport the petitioner to San Francisco from Manila. Manila should therefore be considered merely an agreed stopping place and not the destination.

WON Northwest has domicile in the PhilippinesNotably, the domicile of the carrier is only one of the places where the complaint is allowed to be filed under Article 28(1). By specifying the three other places, to wit, the principal place of business of the carrier, its place of business where the contract was made, and the place of destination, the article clearly meant that these three other places were not comprehended in the term

“domicile.”

UNITED AIRLINES v UY

Facts: On October 13, 1989, respondent, a passenger of United Airlines, checked in together with his luggage one piece of which was found to be overweight at the airline counter. To his utter humiliation, an employee of petitioner rebuked him saying that he should have known the maximum weight allowance per bag and that he should have packed his things accordingly. Then, in a loud voice in front of the milling crowd, she told respondent to repair his things and transfer some of them to the light ones. Respondent acceded but his luggage was still overweight. Petitioner billed him overweight charges but its employee reused to honor the miscellaneous charges under MCD which he offered to pay with. Not wanting to leave without his luggage, he paid with his credit card. Upon arrival in manila, he discovered that one of his bags had been slashed and its contents stolen. In a letter dated October 16, 1989, he notified petitioner of his loss and requested reimbursement. Petitioner paid for his loss based on the maximum liability per pound. Respondent considered the amount grossly inadequate. He sent two more letters to petition but to no avail. On June 9, 1992, respondent filed a complaint for damages against petitioner Airline. Petitioner moved to dismiss the complaint invoking the provisions of Article 29 of the Warsaw Convention. Respondent countered that according to par. 2 of Article 29, “the method of calculating the period of limitation shall be determined by the law of the court to which the

case is submitted.”

Issues:1) Does the Warsaw Convention preclude the operation of the Civil Code and other pertinent laws?2) Has the respondent’s cause of action prescribed?

Held: 1) No. Within our jurisdiction we have held that the Warsaw Convention can be applied, or ignored, depending on the peculiar facts presented by each case. Convention provisions do not regulate or exclude liabilities for other breaches of contract by the carrier or misconduct of its officers and employees, or for some particular or exceptional type of damage. Neither may the Convention be invoked to justify the disregardof some extraordinary type of damage. Neither may the Convention be invoked to justify the disregard of some extraordinary sort of damage resulting to a passenger and preclude recovery therefore3 beyond the limits et by said convention. Likewise, we have held that the Convention does not preclude the operation of the Civil Code and other pertinent laws. It does not regulate, much less exempt, the carrier from liability for damages for violating the rights of its passengers under the contract of carriage, especially if willful misconduct on the part of the carriers employees is found or established.2) No. While his 2nd cause of action (an action for damages arising from theft or damage to property or goods) is well within the bounds of the Warsaw convention, his 1st cause of action (an action for damages arising from the misconduct of the airline

employees and the violation of respondent’s rights as passengers) clearly is not.The 2-yr limitation incorporated in Art. 29 of the Warsaw Convention as an absolute bar to suit and not to be made subject to the various tolling provisions of the laws of the forum, forecloses the application of our own rules on interruption of prescriptive periods. (Art. 29, par. 2 was indented only to let local laws determine whether an action shall be deemed commenced upon the filing of a complaint.) Since, it is indisputable that respondent filed the present action beyond the 2-yr time frame his 2nd cause of action must be barred.However, it is obvious that respondent was forestalled from immediately filing an action because petitioner gave him the runaround, answering his letters but not giving in to his demands. True, respondent should have already filed an action at the first instance when petitioner denied his claims but the same could only be due to his desire to make an out-of-court settlement for which he cannot be faulted. Hence, despite the express mandate of Article 29 of the Warsaw Convention that an action for damages should be filed within 2 years from the arrival at the place ofdestination, such rule shall not be applied in the instant case because of the delaying tactics employed by petitioner airlines itself. Thus, respondent’s 2nd cause of action cannot be considered as time barred.DEL GUERRERO v MADRIGAL

On April 30, 1957, the wife and daughter of Pacifico Acacio, plaintiffs herein, filed a complaint against defendant corporation alleging that on November 1, 1949 Pacifico Acacio entered into a contract of carriage with defendant whereby for certain consideration the latter undertook to carry the former on it vessel "M.S. Regulus" from Malangas, Zamboanga, to the

City of Manila; that while the vessel was passing San Jose, Antique, its crew without taking the necessary precaution managed and steered the same in a reckless and imprudent manner thereby causing the vessel to capsized and resulting to the death of Pacifico Acacio.

Defendant filed a motion to dismiss on the ground that plaintiff's cause of action has already prescribed. It contended that they should have filed the action within six years from the time of the alleged breach of contract, or on November 1, 1955, or more than 7 years thereafter, the complaint was filed out of time.

The lower court sustained the motion holding that since the nature of the action is one for recovery of damages which is not based on a written contract, the action is already barred by the statute of limitations. Hence, the present appeal.

It appears that the complaint was dismissed by the trail court on the strength of a motion filed by defendant on the ground that the cause of action has already prescribed. No evidence was presented by any party in support of or against the motion, the ruling of the court having been based merely on the factula allegations of the complaint. The question that now arise is: Do the allegations of the complaint shows that the cause of action of plaintiffs is merely for recovery of damages, as found by the trial court, or is one based on a written contract of carriage as claimed by appellants?

We are inclined to uphold the contention of the appellants for cursory reading of the complaint would show that their cause of action is predicated upon the failure of appellee to comply with its contract of carrying the deceased from Malangas, Zamboanga to the City of Manila safely, in that the vessel on which he was riding belonging to defendant capsized because of the reckless and imprudent manner it was managed and steered by its crew. It is true that the complaint does not in so many words state that the transportation was undertaken by virtue of a written contract of carriage, but this can be implied from the complaint because It is a matter of common knowledge that whenever a passenger boards a ship for transportation from one place to another he is issued a ticket by the shipper wherein the terms of the contract are specified. According to appellants, "This ticket is in itself a complete written contract by and between the shipper and the passenger. It has all the elements of a complete contract, namely: (1) the consent of the contracting parties manifested by the fact

that the passenger board the ship and the shipper consents or accepts him in the sip for transportation; (2) cause or consideration which is the fare paid by the passenger as stated in the ticket; and (3) object, which is the transportation of the passenger from the place of departure to the place of destination which are stated in the ticket."

Considering that the ticket is not now before us because the case has been decided merely on the motion to dismiss, and this ticket is necessary to determine the right of action of appellants, it would have been more proper had action on the motion been deferred until after trial on the merits. This is authorized by the rule if the ground alleged in the motion does not appear to be indubitable (Section 3, Rule 8 of the Rules of the Court). We are therefore of the opinion that, in fairness to the appellants the trial court should not have dismissed the case out right but should have deferred action on the motion until after trial for the evidence to be presented may still show that the contract of the parties is really written and merely oral as intimated by the court a quo.

Wherefore, the order appealed is hereby set aside, and the case is remanded to the lower court for further proceedings. No pronouncement as to costs.

PHILAM GEN V SWEET LINES

WALLEM v PRUDENTIAL

General Milling Corporation (GMC) contracted WallemPhilippines Shipping Inc. (WALLEM) to ship Indian Toasted Soyabean Extraction Meal to its warehouse in Pasig. During the weighing of the cargo in Batangas, and after comparing its supposed weight from that indicated in the bill of lading, it was found that there was a shortage of 295.682 M/Tons in the shipment. The said bill of lading was prepared by GMC. 

Prudential Guarantee & Assurance Inc (PRUDENTIAL), being GMC’s insurer, received a claim from the latter because of the shortage in the shipment. Prudential paid GMC P995, 677.09, and the latter issued a subrogation receipt to PRUDENTIAL.PRUDENTIAL thereafter sent a demand letter to WALLEM to recover the amount paid to GMC. WALLEM

denied liability for the loss in the shipment. 

PRUDENTIAL brought an action for damages against WALLEM and Seacoast Maritime Corp. with the RTC of Makati City. The trial court ruled that PRUDENTIAL failed to prove that there was shortage inthe shipment. Since PRUDENTIAL failed to establish that the bill of lading was duly executed, the true and exact weight of the shipmentwhen it was loaded unto the vessel cannot be determined. Hence, there was no way by which a shortage could be determined. Also, since PRUDENTIAL failed to present the contract of insurance executed between it and GMC, it had no cause of action against WALLEM. 

On appeal, the CA reversed. 

Issue: Whether or not  PRUDENTIAL became subrogated to the rights of GMC to claim indemnity against WALLEM 

Held: No, PRUDENTIAL did not become subrogated to GMC’s rights. 

PRUDENTIAL claims that it is subrogated to the rights of GMC pursuant to their insurance contract. For this purpose, it submitted a subrogation receipt and a marine cargo risk note. However, this is not sufficient. As GMC’s subrogee, PRUDENTIAL can exercise only those rights granted to GMC under the insurance contract. The contract of insurance must be presented in evidence to indicate the extent of its coverage. By itself alone, the subrogation receipt is not sufficient to prove the PRUDENTIAL’s claim holding WALLEM liable for the loss in the shipment.