ASIA LIGHTERAGE AND SHIPPING vs.

COURT OF APPEALS

G.R. No. 147246. August 19, 2003

PUNO, J.:

Facts:

On June 13, 1990, 3,150 metric tons of Better Western White Wheat in bulk was shipped by Marubeni
American Corporation of Portland, Oregon on board the vessel M/V NEO CYMBIDIUM V-26 for delivery
to the consignee, General Milling Corporation (GMC) in Manila. The shipment was insured by the private
respondent Prudential Guarantee and Assurance, Inc. against loss or damage. When the shipment
arrived to Manila, it was taken by petitioner Asia Lighterage as it was contracted by the consignee as
carrier to deliver the cargo to consignee's warehouse at Bo. Ugong, Pasig City. Before it was transferred
to the consignee’s warehouse, a typhoon struck. During the occurrence thereof, while petitioner’s barge
PSTSI III was docked at Engineering Island in Baseco, the said barge sustained a hole which caused it to
partially submerge. Nevertheless, petitioner proceeded to deliver the goods. On its journey towards
GMC’s warehouse, PSTSI III suffered another damage. A part of the shipment was transferred to three
other barges of the petitioner. A day later, PSTSI III broke its towing bits which caused it to sink. Thus,
the part of the shipment on the same barge was lost. Respondent Prudential thereafter indemnified
GMC of its losses due to the incident. As subrogee, it thus sought reimbursement from petitioner. When
the latter refused, Prudential filed an action before the court. THE RTC and the CA both ruled in favor of
Prudential. In its defense, petitioner argued that it was not a Common carrier and thus should not be
held responsible for the losses of GMC.

Issue: Whether or not petitioner is a common carrier

Held:

Yes. Article 1732 of the Civil Code defines common carriers as persons, corporations, firms or
associations engaged in the business of carrying or transporting passengers or goods or both, by land,
water, or air, for compensation, offering their services to the public. The test to determine a common
carrier, as provided in Bascos vs. CA, is whether the given undertaking is a part of the business engaged
in by the carrier which he has held out to the general public as his occupation rather than the quantity
or extent of the business transacted. In De Guzman vs. Court of Appeals the court held that the
definition of common carriers in Article 1732 of the Civil Code makes no distinction between one whose
principal business activity is the carrying of persons or goods or both, and one who does such carrying
only as an ancillary activity. The court also did not distinguish between a person or enterprise offering
transportation service on a regular or scheduled basis and one offering such service on an occasional,
episodic or unscheduled basis. Further, it was ruled that Article 1732 does not distinguish between a
carrier offering its services to the general public, and one who offers services or solicits business only
from a narrow segment of the general population. In the case at bar, the principal business of the
petitioner is that of lighterage and drayage and it offers its barges to the public for carrying or
transporting goods by water for compensation. Petitioner is clearly a common carrier.
 MINDANAO TERMINAL AND BROKERAGE SERVICE vs. PHOENIX ASSURANCE

G.R. No. 162467 May 8, 2009

Tinga, J.:

Facts:

Del Monte Philippines, Inc. (Del Monte) contracted petitioner Mindanao Terminal and Brokerage
Service, Inc. (Mindanao Terminal), a stevedoring company, to load and stow a shipment of 146,288
cartons of fresh green Philippine bananas and 15,202 cartons of fresh pineapples belonging to Del
Monte Fresh Produce International, Inc. (Del Monte Produce) into the cargo hold of the vessel M/V
Mistrau. The vessel was docked at the port of Davao City and the goods were to be transported by it to
the port of Inchon, Korea in favor of consignee Taegu Industries, Inc. Del Monte Produce insured the
shipment under an "open cargo policy" with private respondent Phoenix Assurance Company of New
York (Phoenix), a non-life insurance company, and private respondent McGee & Co. Inc. (McGee), the
underwriting manager/agent of Phoenix. Mindanao Terminal loaded and stowed the cargoes aboard the
M/V Mistrau. The vessel set sail from the port of Davao City and arrived at the port of Inchon, Korea. It
was then discovered upon discharge that some of the cargo was in bad condition. When it was
surveyed, it was stated that 16,069 cartons of the banana shipment and 2,185 cartons of the pineapple
shipment were so damaged that they no longer had commercial value. For said damaged products,
Phoenix indemnified Del Monte Produce. As subrogee, Phoenix and McGee sought reimbursement from
petitioner. It refused. Thus, Phoenix and McGee filed a suit against Mindanao Terminal. The RTC
dismissed the case finding no fault on the petitioner. The CA however reversed the RTC.

Issue: Whether or not petitioner is liable for the damaged fruits

Held:

No. It was not disputed that Mindanao Terminal was performing purely stevedoring function. As such,
petitioner was only charged with the loading and stowing of the cargoes from the pier to the ship’s
cargo hold; it was never the custodian of the shipment of Del Monte Produce. A stevedore is not a
common carrier for it does not transport goods or passengers; it is not akin to a warehouseman for it
does not store goods for profit. The public policy considerations in legally imposing upon a common
carrier or a warehouseman a higher degree of diligence is not present in a stevedoring outfit which
mainly provides labor in loading and stowing of cargoes for its clients. Article 1173 of the Civil Code is
very clear that if the law or contract does not state the degree of diligence which is to be observed in
the performance of an obligation then that which is expected of a good father of a family or ordinary
diligence shall be required. There is no specific provision of law that imposes a higher degree of
diligence than ordinary diligence for a stevedoring company or one who is charged only with the loading
and stowing of cargoes. It was neither alleged nor proven by Phoenix and McGee that Mindanao
Terminal was bound by contractual stipulation to observe a higher degree of diligence than that
required of a good father of a family. Thus, petitioner is bound only for ordinary diligence.
 PHILIPPINE AIRLINES vs. SAVILLO

G.R. No. 149547 July 4, 2008

CHICO-NAZARIO, J.:

Facts:

Private respondent Simplicio Griño was invited to participate in the 1993 ASEAN Seniors Annual Golf
Tournament held in Jakarta, Indonesia. He and several companions decided to purchase their respective
passenger tickets from PAL with the following points of passage: MANILA-SINGAPORE-JAKARTA-
SINGAPORE-MANILA. Private respondent and his companions were made to understand by PAL that its
plane would take them from Manila to Singapore, while Singapore Airlines would take them from
Singapore to Jakarta. However, when he and his companions reached Singapore on October 3, 1993,
and tried to board a plane of Singapore Airlines, they were denied access as PAL allegedly failed to
endorse the ticket. The group eventually reached Jakarta through Garuda Airlines, but Griño went ill
because of the incident. When he returned to Manila, he wrote to both PAL and Singapore Airlines but
both of them disclaimed liability. Thus, on August 15,1997, he filed an action for damages. PAL moved
for the dismissal of the action in view of its prescription under the Warsaw convention (2 years). The
RTC denied the motion and ruled that the Civil code applies. The CA dismissed PAL’s certiorari.

Issue: Whether the Warsaw convention applies in the case

Held:

No. Article 19 of the Warsaw Convention provides for liability on the part of a carrier for "damages
occasioned by delay in the transportation by air of passengers, baggage or goods." Article 24 excludes
other remedies by further providing that "in the cases covered by articles 18 and 19, any action for
damages, however founded, can only be brought subject to the conditions and limits set out in this
convention." Therefore, a claim covered by the Warsaw Convention can no longer be recovered under
local law, if the statute of limitations of two years has already lapsed. Nevertheless, the Court noted that
jurisprudence in the Philippines and the United States also recognizes that the Warsaw Convention does
not "exclusively regulate" the relationship between passenger and carrier on an international flight. The
Court found that the present case is substantially similar to cases in which the damages sought were
considered to be outside the coverage of the Warsaw Convention. The instant case is comparable to the
case of Lathigra v. British Airways. In Lathigra, 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, Singapore Airlines barred private respondent from boarding the
Singapore Airlines flight because PAL allegedly failed to endorse the tickets of private respondent and
his companions, despite PAL’s assurances to respondent that Singapore Airlines had already confirmed
their passage. While this fact still needs to be heard and established by adequate proof before the RTC,
an action based on these allegations will not fall under the Warsaw Convention, since the purported
negligence on the part of PAL did not occur during the performance of the contract of carriage but days
before the scheduled flight. Thus, the present action cannot be dismissed based on the statute of
limitations provided under Article 29 of the Warsaw Convention. The civil code therefore applies which
provides 4 years as prescription for an action based on upon an injury to the rights of the plaintiff or
upon a quasi-delict. Private respondent’s Complaint was filed less than four years since PAL received his
extrajudicial demand on 25 January 1994. Thus, it has not yet prescribed.
 LHUILLIER vs. BRITISH AIRWAYS

G.R. No. 171092 March 15, 2010

DEL CASTILLO, J.:

Facts:

Petitioner Edna Diago Lhuillier took respondent’s flight 548 from London, United Kingdom to Rome,
Italy. During the trip, she requested one of the flight attendants named Julian Halliday to assist her in
placing her hand-carried luggage in the overhead bin. However, Halliday refused and even made a
sarcastic remark against her. Petitioner further alleged that when the plane was about to land in Rome,
Italy, another flight attendant, Nickolas Kerrigan (Kerrigan), singled her out from among all the
passengers in the business class section to lecture on plane safety. Allegedly, Kerrigan made her appear
to the other passengers to be ignorant, uneducated, stupid, and in need of lecturing on the safety rules
and regulations of the plane. Affronted, petitioner assured Kerrigan that she knew the plane’s safety
regulations being a frequent traveler. Thereupon, Kerrigan allegedly thrust his face a mere few
centimeters away from that of the petitioner and menacingly told her that "We don’t like your attitude."
Upon arrival in Rome, petitioner complained to respondent’s ground manager and demanded an
apology. However, the latter declared that the flight stewards were "only doing their job." Thus, she
filed in the RTC of Makati City a complaint for damages against respondent. The latter however moved
for the dismissal of the case in view of the court’s lack of jurisdiction, applying the warsaw convention.
The RTC granted the motion and dismissed the case. Motion for reconsideration was likewise denied.

Issue: Whether or not the court has jurisdiction over the case

Held:

No. Art. 1 of the Warsaw convention provides that the same applies to all international carriage,
whether of persons or goods. There is international carriage in a situation when the place of departure
and the place of destination in a contract of carriage are situated within the territories of two High
Contracting Parties. The High Contracting Parties referred to herein were the signatories to the Warsaw
Convention and those which subsequently adhered to it. In the case at bench, petitioner’s place of
departure was London, United Kingdom while her place of destination was Rome, Italy. Both the United
Kingdom16 and Italy signed and ratified the Warsaw Convention. As such, the transport of the petitioner
is deemed to be an "international carriage" within the contemplation of the Warsaw Convention. Since
the Warsaw Convention applies in the instant case, then the jurisdiction over the subject matter of the
action is governed by the provisions of the Warsaw Convention. Art. 28 (1) of the said convention
provides consequently: “An action for damages must be brought at the option of the plaintiff, either
before the court of domicile of the carrier or his principal place of business, or where he has a place of
business through which the contract has been made, or before the court of the place of destination.” In
this case, it is not disputed that respondent is a British corporation domiciled in London, United Kingdom
with London as its principal place of business. Hence, under the first and second jurisdictional rules, the
petitioner may bring her case before the courts of London in the United Kingdom. In the passenger
ticket and baggage check presented by both the petitioner and respondent, it appears that the ticket
was issued in Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner has the option
to bring her case before the courts of Rome in Italy. Finally, both the petitioner and respondent aver
that the place of destination is Rome, Italy, which is properly designated given the routing presented in
the said passenger ticket and baggage check. Accordingly, petitioner may bring her action before the
courts of Rome, Italy. The court thus found that the RTC of Makati correctly ruled that it does not have
jurisdiction over the case filed by the petitioner. Also the court ruled that allegations of tortious conduct
committed against an airline passenger during the course of the international carriage do not bring the
case outside the ambit of the Warsaw Convention.