Some cases on Private International Law

7/24/2019 Some cases on Private International Law

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G.R. No. L-20099 July 7, 1966

PARMANAND SHEWARAM,plaintif and appellee,vs.PHILIPPINE AIR LINES, INC.,deendant and appellant.

Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant andappellant.Climaco and Associates for plainti and appellee.

ZALDIVAR,J.:

Beore the municipal court o Zamboanga City, plaintif-appelleeParmanand Shewaram instituted an action to recover damagessufered by him due to the alleged ailure o deendant-appellantPhilippines ir !ines, "nc. to observe e#traordinary diligence in the

vigilance and carriage o his luggage. ter trial the municipal court oZamboanga City rendered $udgment ordering the appellant to payappellee P%&%.'' as actual damages, P(''.'' as e#emplary damages,P()'.'' as attorney*s ees, and the costs o the action.

ppellant Philippine ir !ines appealed to the Court o +irst "nstance oZamboanga City. ter hearing the Court o +irst "nstance oZamboanga City modied the $udgment o the inerior court byordering the appellant to pay the appellee only the sum o P%&%.'' asactual damages, with legal interest rom ay , (/' and the sum oP()'.'' as attorney*s ees, eliminating the award o e#emplary

damages.

+rom the decision o the Court o +irst "nstance o Zamboanga City,appellant appeals to this Court on a 0uestion o law, assigning twoerrors allegedly committed by the lower court a quo, to wit1

(. 2he lower court erred in not holding that plaintif-appellee wasbound by the provisions o the tarif regulations led by deendant-appellant with the civil aeronautics board and the conditions ocarriage printed at the bac3 o the plane tic3et stub.

4. 2he lower court erred in not dismissing this case or limiting theliability o the deendant-appellant to P(''.''.

2he acts o this case, as ound by the trial court, 0uoted rom thedecision appealed rom, are as ollows1

2hat Parmanand Shewaram, the plaintif herein, was on 5ovember4%, (/)/, a paying passenger with tic3et 5o. 6-%'/&, on


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deendant*s aircrat 7ight 5o. /&8/(' rom Zamboanga City boundor anila9 that deendant is a common carrier engaged in air linetransportation in the Philippines, ofering its services to the publicto carry and transport passengers and cargoes rom and to diferentpoints in the Philippines9 that on the above-mentioned date o

5ovember 4%, (/)/, he chec3ed in three :%; pieces o baggages >%, instead o 5! :or anila;.?hen plaintif Parmanand Shewaram arrived in anila on the dateo 5ovember 4%, (/)/, his suitcase did not arrive with his 7ightbecause it was sent to "ligan. So, he made a claim with deendant*spersonnel in anila airport and another suitcase similar to his ownwhich was the only baggage let or that 7ight, the rest having beenclaimed and released to the other passengers o said 7ight, wasgiven to the plaintif or him to ta3e delivery but he did not and

reused to ta3e delivery o the same on the ground that it was nothis, alleging that all his clothes were white and the 5ationaltransistor & and a @oll7e# camera were not ound inside thesuitcase, and moreover, it contained a pistol which he did not havenor placed inside his suitcase9 that ater in0uiries made bydeendant*s personnel in anila rom diferent airports where thesuitcase in 0uestion must have been sent, it was ound to havereached "ligan and the station agent o the P! in "ligan caused thesame to be sent to anila or delivery to r. Shewaram and whichsuitcase belonging to the plaintif herein arrived in anila airport on5ovember 46, (/)/9 that it was also ound out that the suitcase

shown to and given to the plaintif or delivery which he reused tota3e delivery belonged to a certain Ael @osario who was bound or"ligan in the same 7ight with r. Shewaram9 that when theplaintif*s suitcase arrived in anila as stated above on 5ovember46, (/)/, he was inormed by r. 2omas Blanco, r., the actingstation agent o the anila airport o the arrival o his suitcase buto course minus his 2ransistor @adio & and the @oll7e# Camera9 thatShewaram made demand or these two :4; items or or the valuethereo but the same was not complied with by deendant.

# # # # # # # # #

"t is admitted by deendant that there was mista3e in tagging thesuitcase o plaintif as "=5. 2he tampering o the suitcase is moreapparent when on 5ovember 46, (/)/, when the suitcase arrived inanila, deendant*s personnel could open the same in spite o theact that plaintif had it under 3ey when he delivered the suitcase todeendant*s personnel in Zamboanga City. oreover, it wasestablished during the hearing that there was space in the suitcase


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where the two items in 0uestion could have been placed. "t wasalso shown that as early as 5ovember 46, (/)/, when plaintif wasnotied by phone o the arrival o the suitcase, plaintif as3ed thatchec3 o the things inside his suitcase be made and deendantadmitted that the two items could not be ound inside the suitcase.

2here was no evidence on record sucient to show that plaintif*ssuitcase was never opened during the time it was placed indeendant*s possession and prior to its recovery by the plaintif.Dowever, deendant had presented evidence that it had authorityto open passengers* baggage to veriy and nd its ownership oridentity. E#hibit F(F o the deendant would show that the baggagethat was ofered to plaintif as his own was opened and the plaintifdenied ownership o the contents o the baggage. 2his proven actthat baggage may and could be opened without the necessaryauthoriGation and presence o its owner, applied too, to the suitcaseo plaintif which was mis-sent to "ligan City because o mistagging.

2he possibility o what happened in the baggage o r. Ael @osarioat the anila irport in his absence could have also happened toplaintifs suitcase at "ligan City in the absence o plaintif. Dence,the Court believes that these two items were really in plaintif*ssuitcase and deendant should be held liable or the same by virtueo its contract o carriage.

"t is clear rom the above-0uoted portions o the decision o the trialcourt that said court had ound that the suitcase o the appellee wastampered, and the transistor radio and the camera contained thereinwere lost, and that the loss o those articles was due to the negligence

o the employees o the appellant. 2he evidence shows that thetransistor radio cost P(/&.'' and the camera cost P(&.'', so the totalvalue o the two articles was P%&%.''.

2here is no 0uestion that the appellant is a common carrier.(s suchcommon carrier the appellant, rom the nature o its business and orreasons o public policy, is bound to observe e#traordinary diligence inthe vigilance over the goods and or the saety o the passengerstransported by it according to the circumstances o each case. 4 "thaving been shown that the loss o the transistor radio and the camerao the appellee, costing P%&%.'', was due to the negligence o the

employees o the appellant, it is clear that the appellant should be heldliable or the payment o said loss.%

"t is, however, contended by the appellant that its liability should belimited to the amount stated in the conditions o carriage printed at thebac3 o the plane tic3et stub which was issued to the appellee, whichconditions are embodied in Aomestic 2arif @egulations 5o. 4 which wasled with the Civil eronautics Board. Hne o those conditions, which is


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pertinent to the issue raised by the appellant in this case provides asollows1

2he liability, i any, or loss or damage to chec3ed baggage or ordelay in the delivery thereo is limited to its value and, unless the

passenger declares in advance a higher valuation and pay anadditional charge thereor, the value shall be conclusively deemednot to e#ceed P(''.'' or each tic3et.

2he appellant maintains that in view o the ailure o the appellee todeclare a higher value or his luggage, and pay the reight on the basiso said declared value when he chec3ed such luggage at theZamboanga City airport, pursuant to the above0uoted condition,appellee can not demand payment rom the appellant o an amount ine#cess o P(''.''.

2he law that may be invo3ed, in this connection is rticle (&)' o the5ew Civil Code which provides as ollows1

contract #ing the sum that may be recovered by the owner orshipper or the loss, destruction, or deterioration o the goods isvalid, i it is reasonable and $ust under the circumstances, and hasbeen airly and reely agreed upon.

"n accordance with the above-0uoted provision o rticle (&)' o the5ew Civil Code, the pecuniary liability o a common carrier may, bycontract, be limited to a #ed amount. "t is re0uired, however, that the

contract must be Freasonable and $ust under the circumstances andhas been airly and reely agreed upon.F

2he re0uirements provided in rticle (&)' o the 5ew Civil Code mustbe complied with beore a common carrier can claim a limitation o itspecuniary liability in case o loss, destruction or deterioration o thegoods it has underta3en to transport. "n the case beore us ?e believethat the re0uirements o said article have not been met. "t can not besaid that the appellee had actually entered into a contract with theappellant, embodying the conditions as printed at the bac3 o thetic3et stub that was issued by the appellant to the appellee. 2he act

that those conditions are printed at the bac3 o the tic3et stub in lettersso small that they are hard to read would not warrant the presumptionthat the appellee was aware o those conditions such that he hadFairly and reely agreedF to those conditions. 2he trial court hascategorically stated in its decision that the FAeendant admits thatpassengers do not sign the tic3et, much less did plaintif herein sign histic3et when he made the 7ight on 5ovember 4%, (/)/.F ?e hold,thereore, that the appellee is not, and can not be, bound by the


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conditions o carriage ound at the bac3 o the tic3et stub issued to himwhen he made the 7ight on appellant*s plane on 5ovember 4%, (/)/.

2he liability o the appellant in the present case should be governed bythe provisions o rticles (&%6 and (&%) o the 5ew Civil Code, which

?e 0uote as ollows1

@2. (&%6. Common carries are responsible or the loss,destruction, or deterioration o the goods, unless the same is due toany o the ollowing causes only1

:(; +lood, storm, earth0ua3e, or other natural disaster or calamity9

:4; ct o the public enemy in war, whether international or civil9

:%; ct or omission o the shipper or owner o the goods9

:6; 2he character o the goods or deects in the pac3ing or in thecontainers9

:); Hrder or act o competent public authority.1!p"#1.$%t

@2. (&%). "n all cases other than those mentioned in 5os. (, 4, %, 6and ) o the preceding article, i the goods are lost, destroyed ordeteriorated, common carriers are presumed to have been at aultor to have acted negligently, unless they prove that they observede#traordinary diligence as re0uired in rticle (&%%.

"t having been clearly ound by the trial court that the transistor radioand the camera o the appellee were lost as a result o the negligenceo the appellant as a common carrier, the liability o the appellant isclear < it must pay the appellee the value o those two articles.

"n the case o &smael and Co. 's. Barreto, )( Phil. /', cited by the trialcourt in support o its decision, this Court had laid down the rule thatthe carrier can not limit its liability or in$ury to or loss o goods shippedwhere such in$ury or loss was caused by its own negligence.

Corpus uris, volume (', p. ()6, says1

FPar. (/6, . Reasona(leness of )imitations. < 2he validity ostipulations limiting the carrier*s liability is to be determined bytheir reasonableness and their conormity to the sound publicpolicy, in accordance with which the obligations o the carrier to thepublic are settled. "t cannot lawully stipulate or e#emption romliability, unless such e#emption is $ust and reasonable, and unless


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the contract is reely and airly made. 5o contractual limitation isreasonable which is subversive o public policy.

FPar. (/). &. ?hat !imitations o !iability Permissible. < a.5egligence < :(; @ule in merica < :a; "n bsence o Hrganic or

Statutory Provisions @egulating Sub$ect < aa. a$ority @ule. < "nthe absence o statute, it is settled by the weight o authority in theInited States, that whatever limitations against its common-lawliability are permissible to a carrier, it cannot limit its liability orin$ury to or loss o goods shipped, where such in$ury or loss iscaused by its own negligence. 2his is the common law doctrine andit ma3es no diference that there is no statutory prohibition againstcontracts o this character.

FPar. (/. bb. Considerations on !"ic" Rule Based. < 2he rule, it issaid, rests on considerations o public policy. 2he underta3ing is to

carry the goods, and to relieve the shipper rom all liability or lossor damage arising rom negligence in perorming its contract is toignore the contract itsel. 2he natural efect o a limitation oliability against negligence is to induce want o care on the part othe carrier in the perormance o its duty. 2he shipper and thecommon carrier are not on e0ual terms9 the shipper must send hisreight by the common carrier, or not at all9 he is thereore entirelyat the mercy o the carrier unless protected by the higher power othe law against being orced into contracts limiting the carrier*sliability. Such contracts are wanting in the element o voluntaryassent.

FPar. (/&. cc.Application and E*tent of Rule< :aa; +egligence ofSer'ants. < 2he rule prohibiting limitation o liability or negligenceis oten stated as a prohibition o any contract relieving the carrierrom loss or damage caused by its own negligence or miseasance,or that o its servants9 and it has been specically decided in manycases that no contract limitation will relieve the carrier romresponsibility or the negligence, uns3illulness, or carelessness oits employer.F :Cited in Jsmael and Co. vs. Barreto, )( Phil. /', />,//;.

"n view o the oregoing, the decision appealed rom is armed, withcosts against the appellant.

G.R. No. L-11!0 July 22, 197!

"#NIN"LIJ"E L$CH%VAAR% MAA%SHAPPIJ N.V., o&'()*+( o*/ "LM R#AL D$%CH AIRLINES,petitioner,vs.


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%HE H#N#RALE C#$R% # APPEALS, C#NS$EL# %. MEND#ZA/3 R$IN# %. MEND#ZA, respondents.

Picao, Agcaoili, Santayana, Reyes and -ayao for petitioner.

BengGon, Killegas, Zarraga, 5arciso and Cudala or respondents.

CAS%R#,J.:

"n this appeal by way o certiorari the Lonin3li$3e !uchtvaartaatschappi$ 5.K., otherwise 3nown as the L! @oyal Autch irlines:hereinater reerred to as the L!; assails the award o damagesmade by the Court o ppeals in C-=.@. 6'4' in avor o the spouses@uno 2. endoGa and Consuelo 2. endoGa :hereinater reerred to as

the respondents;.1!p"#1.$%t

Sometime in arch (/) the respondents approached 2irso @eyes,manager o a branch o the Philippine 2ravel Bureau, a travel agency,or consultations about a world tour which they were intending to ma3ewith their daughter and a niece. @eyes submitted to them, aterpreliminary discussions, a tentative itinerary which prescribed a trip othirty-ve legs9 the respondents would 7y on diferent airlines. 2hreesegments o the trip, the longest, would be via L!. 2he respondentse#pressed a desire to visit !ourdes, +rance, and discussed with @eyestwo alternate routes, namely, Paris to !ourdes and Barcelona to

!ourdes. 2he respondents decided on the Barcelona-!ourdes route with3nowledge that only one airline, er !ingus, serviced it.

2he Philippine 2ravel Bureau to which @eyes was accredited was anagent or international air carriers which are members o the"nternational ir 2ransport ssociation, popularly 3nown as the F"2,Fo which both the L! and the er !ingus are members.

ter about two wee3s, the respondents approved the itineraryprepared or them, and as3ed @eyes to ma3e the necessary planereservations. @eyes went to the L!, or which the respondents had

e#pressed preerence. 2he L! thereater secured seat reservations orthe respondents and their two companions rom the carriers whichwould erry them throughout their trip, with the e#ception o er!ingus. ?hen the respondents let the Philippines :without their youngwards who had enplaned much earlier;, they were issued L! tic3etsor their entire trip. Dowever, their coupon or the er !ingus portion:+light >( or une 44, (/); was mar3ed F@MF which meant Fonre0uestF.


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ter sightseeing in merican and European cities :they were in themeantime $oined by their two young companions;, the respondentsarrived in +ran3urt, =ermany. 2hey went to a L! oce there andobtained a conrmation rom er !ingus o seat reservations on 7ight>(. ter meandering in !ondon, Paris and !isbon, the oursome nally

too3 wing to Barcelona or their trip to !ourdes, +rance.

"n the aternoon o une 44, (/) the respondents with their wardswent to the Barcelona airport to ta3e their plane which arrived at 61''o*cloc3. t the airport, the manager o er !ingus directed therespondents to chec3 in. 2hey did so as instructed and were acceptedor passage. Dowever, although their daughter and niece were allowedto ta3e the plane, the respondents were of-loaded on orders o the er!ingus manager who brus0uely shoved them aside with the aid o apoliceman and who shouted at them, FConosN "gnorantes +ilipinosNF

rs. endoGa later called up the manager o er !ingus and re0uestedthat they provide her and her husband means to get to !ourdes, butthe re0uest was denied. stranger, however, advised them to ta3e atrain, which the two did9 despite the third class accommodations andlac3 o ood service, they reached !ourdes the ollowing morning.Auring the train trip the respondents had to sufer drat winds as theywore only minimum clothing, their luggage having gone ahead with theer !ingus plane. 2hey spent O)' or that train trip9 their planepassage was worth O6%.%).

Hn arch (&, (/ the respondents, reerring to L! as the principal

o er !ingus, led a complaint or damages with the Court o +irst"nstance o anila arising rom breach o contract o carriage and orthe humiliating treatment received by them at the hands o the er!ingus manager in Barcelona. ter due hearing, the trial courtawarded damages to the respondents as ollows1 O6%.%) or its pesoe0uivalent as actual damages, P(',''' as moral damages, P),''' ase#emplary damages, and P),''' as attorney*s ees, and e#penses olitigation.

Both parties appealed to the Court o ppeals. 2he L! soughtcomplete e#oneration9 the respondents prayed or an increase in the

award o damages. "n its decision o ugust (6, (// the Court oppeals decreed as ollows1 Fppellant L! is condemned to pay untothe plaintifs the sum o O6%.%) as actual damages9 P)',''' as moraldamages9 and P,''' as attorney*s ees and costs.F

Dence, the present recourse by the L!.

2he L! prays or e#culpation rom damages on the strength o the


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ollowing particulars which were advanced to but re$ected by the Courto ppeals1

:a; 2he air tic3ets issued to the respondents stipulate that carriagethereunder is sub$ect to the FConvention or the Inication o Certain

@ules @elating to "nternational 2ransportation by ir,F otherwise 3nownas the F?arsaw Convention,F to which the Philippine =overnment is aparty by adherence, and which pertinently provides.1

@2. %'. :(; "n the case o transportation to be perormed byvarious successive carriers and ailing within the denition setout in the third paragraph o rticle ", each carrier who acceptspassengers, baggage, or goods shall be sub$ect to the rules set

out in the convention, and shall be deemed to be one o thecontracting parties to the contract o transportation insoar asthe contract deals with that part o transportation which isperormed under his supervision.2

:4; "n the case o transportation o this nature, the passenger orhis representative can ta3e action only against the carrier whoperormed the transportation during which the accident or t"edelay occured, save in the case where, by e#press agreement,

the rst carrier has assumed liability or the whole $ourney.:emphasis supplied;

:b; Hn the inside ront cover o each tic3et the ollowing appears underthe heading FConditions o ContractF1

( ... :a; !iability o carrier or damages shall be limited tooccurrences on its own line, e#cept in the case o chec3edbaggage as to which the passenger also has a right o action

against the rst or last carrier. carrier issuing a tic3et orchec3ing baggage or carriage over the lines o others does soonly as agent..

:c; ll that the L! did ater the respondents completed theirarrangements with the travel agency was to re0uest or seatreservations among the airlines called or by the itinerary submitted tothe L! and to issue tic3ets or the entire 7ight as a tic3et-issuing


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agent.

2he respondents rebut the oregoing arguments, thus1

:a; rticle %' o the ?arsaw Convention has no application in the case

at bar which involves, not an accident or delay, but a willulmisconduct on the part o the L!*s agent, the er !ingus. Inderarticle 4) o the same Convention the ollowing is prescribed1

@2. 4). :(; 2he carrier shall not be entitled to avail himsel othe provisions o this convention which e#clude or limit hisliability, i the damage is caused by his !illful misconduct or bysuch deault on his part as, in accordance with the law o thecourt to which the case is submitted, is considered to bee0uivalent to willul misconduct.

:4; Similarly, the carrier shall not be entitled to avail himsel othe said provisions, i the damage is caused under the samecircumstances by any agent o the carrier acting within thescope o his employment. :emphasis by respondents;

:b; 2he condition in their tic3ets which purportedly e#cuse the L!rom liability appears in very small print, to read which, as ound by the

Court o ppeals, one has practically to use a magniying glass.

:c; 2he rst paragraph o the FConditions o ContractF appearingidentically on the L! tic3ets issued to them idubitably shows thattheir contract was one o continuous air transportation around theworld1

( ... FcarriageF includes the air carrier issuing this tic3et and allcarriers that carry or underta3e to carry the passenger or hisbaggage hereunder or perorm any other service incidental tosuch air carriage... Carriage to be perormed hereunder by

several successive carrier is regarded as a single operation.

:d; 2he contract o air transportation was e#clusively between therespondents and the L!, the latter merely endorsing its perormanceto other carriers, li3e er !ingus, as its subcontractors or agents, asevidenced by the passage tic3ets themselves which on their acedisclose that they are L! tic3ets. oreover, the respondents dealtonly with L! through the travel agency.


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1. 2he applicability insisted upon by the L! o article %' o the?arsaw Convention cannot be sustained. 2hat article presupposes theoccurrence o either an accident or a delay, neither o which too3 placeat the Barcelona airport9 what is here maniest, instead, is that the er!ingus, through its manager there, reused to transport the

respondents to their planned and contracted destination.

.2he argument that the L! should not be held accountable or thetortious conduct o er !ingus because o the provision printed on therespondents* tic3ets e#pressly limiting the L!*s liability or damagesonly to occurrences on its own lines is unacceptable. s noted by theCourt o ppeals that condition was printed in letters so small that onewould have to use a magniying glass to read the words. Inder thecircumstances, it would be unair and ine0uitable to charge therespondents with automatic 3nowledge or notice o the said conditionso as to preclude any doubt that it was airly and reely agreed upon by

the respondents when they accepted the passage tic3ets issued tothem by the L!. s the airline which issued those tic3ets with the3nowledge that the respondents would be 7own on the various legs otheir $ourney by diferent air carriers, the L! was chargeable with theduty and responsibility o specically inorming the respondents oconditions prescribed in their tic3ets or, in the very least, to ascertainthat the respondents read them beore they accepted their passagetic3ets. thorough search o the record, however, ine#plicably ails toshow that any efort was e#erted by the L! ocials or employees todischarge in a proper manner this responsibility to the respondents.Conse0uently, we hold that the respondents cannot be bound by the

provision in 0uestion by which L! unilaterally assumed the role o amere tic3et-issuing agent or other airlines and limited its liability onlyto untoward occurrences on its own lines.

/. oreover, as maintained by the respondents and the Court oppeals, the passage tic3ets o the respondents provide that thecarriage to be perormed thereunder by several successive carriers Fisto be regarded as a single operation,F which is diametricallyincompatible with the theory o the L! that the respondents enteredinto a series o independent contracts with the carriers which too3them on the various segments o their trip. 2his position o L! we

re$ect. 2he respondents dealt e#clusively with the L! which issuedthem tic3ets or their entire trip and which in efect guaranteed tothem that they would have sure space in er !ingus 7ight >(. 2herespondents, under that assurance o the internationally prestigiousL!, naturally had the right to e#pect that their tic3ets would behonored by er !ingus to which, in the legal sense, the L! hadindorsed and in efect guaranteed the perormance o its principalengagement to carry out the respondents* scheduled itinerary


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previously and mutually agreed upon between the parties.

0.2he breach o that guarantee was aggravated by the discourteousand highly arbitrary conduct o an ocial o the er !ingus which theL! had engaged to transport the respondents on the Barcelona-

!ourdes segment o their itinerary. "t is but $ust and in ull accord withthe policy e#pressly embodied in our civil law which en$oins courts tobe more vigilant or the protection o a contracting party who occupiesan inerior position with respect to the other contracting party, that theL! should be held responsible or the abuse, in$ury andembarrassment sufered by the respondents at the hands o asupercilious boor o the er !ingus.

CCH@A"5=!J, the $udgment o the Court o ppeals dated ugust (6,(// is armed, at L!*s cost.

=.@. 5o. '&% ay (/, (//4

PAN AMERICAN W#RLD AIRWAS, INC., petitioner,vs.

J#SE ". RAPADAS /3 %HE C#$R% # APPEALS, respondents.

roilan P. Po(re for pri'ate respondent.

G$%IERREZ, JR.,J.:

2his is a petition or review assailing the decision o the respondentCourt o ppeals which armed in totothe trial court decision on theliability o petitioner Pan merican ?orld irways or damages due toprivate respondent. 2he trial court ruled that the petitioner can notavail o a limitation o liabilities or lost baggages o a passenger. 2hedispositive portion o the trial court decision reads1

?DE@E+H@E, in view o the oregoing considerations, $udgmentis hereby rendered ordering deendant to pay plaintif by way oactual damages the e0uivalent peso value o the amount o

O),44>./' and ('' paengs, nominal damages in the amount oP4','''.'' and attorney*s ees o P),'''.'', and the costs othe suit. Aeendant*s counterclaim is dismissed. :Rollo, p. (%;

Hn anuary (, (/&), private respondent ose L. @apadas heldPassenger 2ic3et and Baggage Claim Chec3 5o. '4-%/6>%''>6-) orpetitioner*s +light 5o. >6( with the route rom =uam to anila. ?hilestanding in line to board the 7ight at the =uam airport, @apadas was


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ordered by petitioner*s handcarry control agent to chec3-in hisSamsonite attache case. @apadas protested pointing to the act thatother co-passengers were permitted to handcarry bul3ier baggages. Destepped out o the line only to go bac3 again at the end o it to try i hecan get through without having to register his attache case. Dowever,

the same man in charge o handcarry control did not ail to notice himand ordered him again to register his baggage. +or ear that he wouldmiss the plane i he insisted and argued on personally ta3ing the valisewith him, he acceded to chec3ing it in. De then gave his attache caseto his brother who happened to be around and who chec3ed it in orhim, but without declaring its contents or the value o its contents. Dewas given a Baggage Claim 2ag 5o. P-&6/-&(%. :E#hibit FBF or theplaintif-respondent;

Ipon arriving in anila on the same date, anuary (, (/&), @apadasclaimed and was given all his chec3ed-in baggages e#cept the attache

case. Since @apadas elt ill on his arrival, he sent his son, orge@apadas to re0uest or the search o the missing luggage. 2hepetitioner e#erted eforts to locate the luggage through the Panmerican ?orld irways-anila "nternational irport :P5 -";Baggage Service.

Hn anuary %', (/&), the petitioner re0uired the private respondent toput the re0uest in writing. 2he respondent lled in a Baggage ClaimBlan3 +orm. 2hereater, @apadas personally ollowed up his claim. +orseveral times, he called up r. Panuelos, the head o the BaggageSection o P5 . De also sent letters demanding and reminding the

petitioner o his claim.

@apadas received a letter rom the petitioner*s counsel dated ugust 4,(/&) ofering to settle the claim or the sum o one hundred si#tydollars :O('.''; representing the petitioner*s alleged limit o liabilityor loss or damage to a passenger*s personal property under thecontract o carriage between @apadas and P5 . @eusing to acceptthis 3ind o settlement, @apadas led the instant action or damageson Hctober (, (/&). @apadas alleged that P5 discriminated orsingled him out in ordering that his luggage be chec3ed in. De alsoalleged that P5 neglected its duty in the handling and sae3eeping

o his attache case rom the point o embar3ation in =uam to hisdestination in anila. De placed the value o the lost attache case andits contents at ISO64,6'%./'. ccording to him, the loss resulted in hisailure to pay certain monetary obligations, ailure to remit money sentthrough him to relatives, inability to en$oy the ruits o his retirementand vacation pay earned rom wor3ing in 2onga Construction Company:he retired in ugust (/&6; and inability to return to 2onga to complywith then e#isting contracts.


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"n its answer, petitioner-deendant P5 ac3nowledged responsibilityor the loss o the attache case but asserted that the claim was sub$ectto the F5otice o Baggage !iability !imitationsF allegedly attached toand orming part o the passenger tic3et. 2he petitioner argued thatthe same notice was also conspicuously posted in its oces or the

guidance o the passengers.

t the trial, private respondent showed proo o his retirement awardand vacation pay amounting to O6,&)'.''. De claimed that the attachecase also contained other money consisting o O(,6'' allegedly givento him by his son, aime, as a round trip are o his :plaintif-respondent; wie, but which amount was later ound to be actuallyintended by aime as payment or arrears o a lot purchased rom2ropical Domes, "nc.9 O%,''' allegedly given by his brothers orpayment o ta#es and or constructing improvements on the @apadasestates9 and O%''.'' birthday present o the spouses r. and rs.

@uben CanoniGado to plaintif-respondent*s wie. De also claimedhaving 3ept several items in the attache case, namely :(; contractsand records o employment, letters o commendation, testimonials andnewspaper clippings on his achievement or (% years in 2onga, 5ewZealand and ustralia, drats o manuscripts, photographs and driverslicense alleged to be worth O4','''.''9 a Polaroid camera, lms,calculator, and other personal items worth O6'%./'9 memorabilia,autographs personally ac0uired rom Charles !indberg, !awrence@oc3eeller and @yoichi Sasa3awa, a commemorative palladium coinworth 2ongan ('' paengs and unused 2ongan stamps, all totallingO&,)''.''9 and a plan worth O),'''.'' drawn by his son aime, who is

an architect, or the construction o a residential house and a -storycommercial building. @apadas claimed the amount o the attache caseitsel to be O4).)'. :See Aecision in Civil Case 5o. //)6 in mended@ecord on ppeal, pp. (->);

2he lower court ruled in avor o complainant @apadas ater nding nostipulation giving notice to the baggage liability limitation. 2he courtre$ected the claim o deendant P5 that its liability under the termso the passenger tic3et is only up to O('.''. Dowever, it scrutiniGedall the claims o the plaintif. "t discredited insucient evidence toshow discriminatory acts or bad aith on the part o petitioner P5.

Hn appeal, the Court o ppeals armed the trial court decision.Dence, this petition.

2he main issue raised in the case at bar is whether or not a passengeris bound by the terms o a passenger tic3et declaring that thelimitations o liability set orth in the ?arsaw Convention :Hctober (4,(/4/9 (%& !eague o 5ations 2reaty Series ""9 See Proclamation 5o. 4'(


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Q(/))R, )( H.=. 6/%% QHctober, (/))R; as amended by the DagueProtocol :September 4>, (/))9 6&> I52S %&%9 """ P2S )();, shall applyin case o loss, damage or destruction to a registered luggage o apassenger.

2he petitioner maintains that its liability or the lost baggage orespondent @apadas was limited to O('.'' since the latter did notdeclare a higher value or his baggage and did not pay thecorresponding additional charges.

2he private respondent, on the other hand, insists that he is entitled toas much damages as those awarded by the court and armed by therespondent appellate court.

ter a review o the various arguments o the opposing parties as wellas the records o the case, the Court nds sucient basis under the

particular acts o this case or the availment o the liability limitationsunder the ?arsaw Convention.

2here is no dispute, and the courts below admit, that there was such a5otice appearing on page two :4; o the airline tic3et stating that the?arsaw Convention governs in case o death or in$ury to a passengeror o loss, damage or destruction to a passenger*s luggage.

2he 5otice states1

" the passenger*s $ourney involves an ultimate destination or

stop in a country other than the country o departure the?arsaw Convention may be applicable and the Conventiongoverns and in most cases limits the liability o carriers ordeath or personal in$ury and in respect o loss o or damage tobaggage. See also notice headed Fdvice to "nternationalPassengers on !imitation o !iability.F :2he latter notice reers tolimited liability or death or personal in$ury to passengers withproven damages not e#ceeding IS O&),''' per passenger9E#hibit FLF or plaintif respondent, 2able o E#hibits, p. (/;

+urthermore, paragraph 4 o the FConditions o ContractF also

appearing on page 4 o the tic3et states1

4. Carriage hereunder is sub$ect to the rules and limitationsrelating to liability established by the ?arsaw Convention unlesssuch carriage is not Finternational carriageF as dened by thatConvention. :E#hibit FLF, supra;

?e note that plaintif-respondent @apadas presented as proo o the


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Passenger 2ic3et and Baggage Chec3 5o. '4-%/6>%''>6-) a #ero#copy o its page 4 which contains the 5otice and Conditions oContract, and also page % which recites the dvice to "nternationalPassengers on !imitation o !iability. De also presented two #ero#copies o +light Coupon 5o. % o the same passenger tic3et showing the

ares paid or the trips Donolulu to =uam, =uam to anila, and anilato Donolulu to prove his obligations which remained unpaid because othe une#pected loss o money allegedly placed inside the missingattache case. @apadas e#plained during the trial that the samepassenger tic3et was returned by him to one r. S.!. +aupula o theInion Steam Ship Company o 5ew Zealand, !td., 2onga whodemanded the payment o the ares or otherwise, the return o theunused plane tic3ets :including the sub$ect Passenger 2ic3et Baggage Chec3 5o. '4-%/6>%''>6-);. 2he issuance o these tic3etswas acilitated by r. +aupula on credit.

eanwhile, the petitioner ofered as evidence E#hibit F(F also showingpage 4 o the passenger tic3et to prove the notice and the conditionso the contract o carriage. "t li3ewise ofered E#hibit F(-F, a #ero#copy o a F5otice o Baggage !iability !imitationsF which the trial courtdisregarded and held to be non-e#istent. 2he same E#hibit F(-Fcontained the ollowing stipulations1

5H2"CE H+ B===E !"B"!"2J !""22"H5S !iability or loss,delay, or damage to baggage is limited as ollows unless ahigher value is declared in advance and additional charges arepaid1 :(; or most international travel :including domestic

portions o international $ourneys; to appro#imately O>.( perpound :O(>.'' per 3ilo9 now O4'.'' per E#hibit F(%F; orchec3ed baggage and O%' :now O6'' per E#hibit F(%F; perpassenger or unchec3ed baggage9 :4; or travel wholly betweenI.S. points, to O)'' per passenger on most carriers :a ew havelower limits;. E#cess valuation may not be declared on certaintypes o valuable articles. Carriers assume no liability or ragileor perishable articles. +urther inormation may be obtained romthe carrier. :2able o E#hibits, p. 6);

2he original o the Passenger 2ic3et and Baggage Chec3 5o. '4-

%/6>%''>6-) itsel was not presented as evidence as it was amongthose returned to r. +aupula. 2hus, apart rom the evidence ofered bythe deendant airline, the lower court had no other basis ordetermining whether or not there was actually a stipulation on thespecic amounts the petitioner had e#pressed itsel to be liable or losso baggage.

lthough the trial court re$ected the evidence o the deendant-


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involves an ultimate destination or stop in a countryother than the country o departure, the ?arsawConvention may be applicable and that the Conventiongoverns and in most cases limits the liability o carriersor death or personal in$ury and in respect o loss o or

damage to baggage.

?e have held in the case o 2ng &iu '.Court of Appeals, supra, andreiterated in a similar case where herein petitioner was also sued ordamages, Pan American 3orld Air!ays '.4ntermediate Appellate Court:(6 SC@ 4> Q(/>>R; that1

"t :plane tic3et; is what is 3nown as a contract o FadhesionF, inregards which it has been said that contracts o adhesionwherein one party imposes a ready made orm o contract onthe other, as the plane tic3et in the case at bar, are contracts

not entirely prohibited. 2he one who adheres to the contract isin reality ree to re$ect it entirely9 i he adheres, he gives hisconsent. :2olentino, Civil Code, Kol. "K, (/4 ed., p. 64, citingr. ustice .B.!. @eyes, !awyer*s ournal, anuary %(, (/)(, p.6/; nd as held in @andolph v. merican irlines, ('% Hhio pp.(&4, (66 5.E. 4d >&>9 @osenchein v. 2rans ?orld irlines, "nc.,%6/ S.?. 4d 6>%, Fa contract limiting liability upon an agreedvaluation does not ofend against the policy o the laworbidding one rom contracting against his own negligence.

Considering, thereore, that petitioner had ailed to declare a

higher value or his baggage, he cannot be permitted a recoveryin e#cess o P(''.'' . . . :/( SC@ 44% at page 4%(;

?e hasten to add that while contracts o adhesion are not entirelyprohibited, neither is a blind reliance on them encouraged. "n the aceo acts and circumstances showing they should be ignored because otheir basically one sided nature, the Court does not hesitate to rule outblind adherence to their terms. :See Sweet !ines, "nc. v. 2eves, >%SC@ %(, %>-%/Q(/&>R;

2he arguments o the petitioner do not belie the act that it was indeed

accountable or the loss o the attache case. ?hat the petitioner isconcerned about is whether or not the notice, which it did not ail tostate in the plane tic3et and which it deemed to have been read andaccepted by the private respondent will be considered by this Court asade0uate under the circumstances o this case. s earlier stated, theCourt nds the provisions in the plane tic3et sucient to govern thelimitations o liabilities o the airline or loss o luggage. 2he passenger,upon contracting with the airline and receiving the plane tic3et, was


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e#pected to be vigilant insoar as his luggage is concerned. " thepassenger ails to adduce evidence to overcome the stipulations, hecannot avoid the application o the liability limitations.

2he acts show that the private respondent actually reused to register

the attache case and chose to ta3e it with him despite having beenordered by the P5 agent to chec3 it in. "n attempting to avoidregistering the luggage by going bac3 to the line, private respondentmaniested a disregard o airline rules on allowable handcarriedbaggages. Prudence o a reasonably careul person also dictates thatcash and $ewelry should be removed rom chec3ed-in-luggage andplaced in one*s poc3ets or in a handcarried anila-paper or plasticenvelope.

2he alleged lac3 o enough time or him to ma3e a declaration o ahigher value and to pay the corresponding supplementary charges

cannot $ustiy his ailure to comply with the re0uirement that wille#clude the application o limited liability. Dad he not wavered in hisdecision to register his luggage, he could have had enough time todisclose the true worth o the articles in it and to pay the e#tra chargesor remove them rom the chec3ed-in-luggage. oreover, an airplanewill not depart meantime that its own employee is as3ing a passengerto comply with a saety regulation.

Passengers are also allowed one handcarried bag each provided itconorms to certain prescribed dimensions. " r. @apadas was notallowed to handcarry the lost attache case, it can only mean that he

was carrying more than the allowable weight or all his luggages ormore than the allowable number o handcarried items or more than theprescribed dimensions or the bag or valise. 2he evidence on anyarbitrary behavior o a Pan m employee or ine#cusable negligence onthe part o the carrier is not clear rom the petition. bsent such proo,we cannot hold the carrier liable because o arbitrariness,discrimination, or mistreatment.

?e are not by any means suggesting that passengers are alwaysbound to the stipulated amounts printed on a tic3et, ound in acontract o adhesion, or printed elsewhere but reerred to in handouts

or orms. ?e simply recogniGe that the reasons behind stipulations onliability limitations arise rom the diculty, i not impossibility, oestablishing with a clear preponderance o evidence the contents o alost valise or suitcase. Inless the contents are declared, it will alwaysbe the word o a passenger against that o the airline. " the loss o lieor property is caused by the gross negligence or arbitrary acts o theairline or the contents o the lost luggage are proved by satisactoryevidence other than the sel-serving declarations o one party, the


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Court will not hesitate to disregard the ne print in a contract oadhesion. :See Sweet !ines "nc. v. 2eves, supra; Htherwise, we areconstrained to rule that we have to enorce the contract as it is theonly reasonable basis to arrive at a $ust award.

?e note that the nding on the amount lost is more o a probabilitythan a proved conclusion.

2he trial court stated1

### ### ###

?e come now to the actual loss o O6,&)'.'' which the plaintifclaims was the amount o his retirement award and vacationpay. ccording to the plaintif, this was in cash o O(''denominations and !as placed in an en'elope separate rom

the other money he was carrying. Plaintif presented thememorandum award, E#hibit 2-( and the vouchers o payment,E#hibits 2-4 and 2-%. Inder the circumstances, recited by theplaintif in which the loss occurred, the Court believes thatplainti could really "a'e placed t"is amount in t"e attac"ecase considering that he was originally handcarrying saidattache case and the same was loo3ed, and he did not e#pectthat he would be re0uired to chec3 it in. . . . :mended @ecordon ppeal, p. &)9 Emphasis ours;

2he above conclusion o the trial court does not arise rom the acts.

2hat the attache case was originally handcarried does not beg theconclusion that the amount o O6,&)'.'' in cash could have beenplaced inside. "t may be noted that out o a claim or ISO64,6'%./' asthe amount lost, the trial court ound or only ISO),44>./' and (''paengs. 2he court had doubts as to the total claim.

2he lost luggage was declared as weighing around (> pounds orappro#imately > 3ilograms. t O4'.'' per 3ilogram, the petitionerofered to pay O('.'' as a higher value was not declared in advanceand additional charges were not paid. ?e note, however, that anamount o O6''.'' per passenger is allowed or unchec3ed luggage.

Since the chec3ing-in was against the will o the respondent, we treatthe lost bag as parta3ing o involuntarily and hurriedly chec3ed-inluggage and continuing its earlier status as unchec3ed luggage. 2heair liability under the petitioner*s own printed terms is O6''.''. Sincethe trial court ruled out discriminatory acts or bad aith on the part oPan m or other reasons warranting damages, there is no actual basisor the grant o P4','''.'' damages.


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s to the 0uestion o whether or not private respondent should be paidattorney*s ees, the Court sustains the nding o the trial court and therespondent appellate court that it is $ust and e0uitable or the privaterespondent to recover e#penses or litigation in the amount oP),'''.''. rticle 44:6; o the ?arsaw Convention, as amended does

not preclude an award o attorney*s ees. 2hat provision states that thelimits o liability prescribed in the instrument Fshall not prevent thecourt rom awarding, in accordance with its own law, in addition, thewhole or part o the court costs and other e#penses o litigationincurred by the plaintif.F ?e, however, raise the award to P(','''.''considering the resort to the Court o ppeals and this Court.

?DE@E+H@E, the petition is hereby =@52EA and the decision o therespondent Court o ppeals is @EKE@SEA and SE2 S"AE. 2hepetitioner is ordered to pay the private respondent damages in theamount o ISO6''.'' or its e0uivalent in Philippine Currency at the

time o actual payment, P(','''.'' in attorney*s ees, and costs o thesuit.

SH H@AE@EA.

G.R. No. 104 J/u/)y 5, 1995

EDERIC# SERRA, petitioner,vs.%HE H#N. C#$R% # APPEALS AND RIZAL C#MMERCIALAN"ING C#RP#RA%I#N, respondents.

Andres R. Amante, 5r. for petitioner.

@.C. Aomingo, r. ssociates or private respondent.

N#C#N,J.:

promise to buy and sell a determinate thing or a price certain isreciprocally demandable. n accepted unilateral promise to buy and

sell a determinate thing or a price certain is binding upon the promisori the promise is supported by a consideration distinct rom the price.:rticle (6&/, 5ew Civil Code; 2he rst is the mutual promise and eachhas the right to demand rom the other the ulllment o the obligation.?hile the second is merely an ofer o one to another, which iaccepted, would create an obligation to the oferor to ma3e good hispromise, provided the acceptance is supported by a considerationdistinct rom the price.


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Aisputed in the present case is the ecacy o a FContract o !ease withHption to BuyF, entered into between petitioner +ederico Serra andprivate respondent @iGal Commercial Ban3ing Corporation. :@CBC;.

Petitioner is the owner o a %&6 s0uare meter parcel o land located at

MueGon St., asbate, asbate. Sometime in (/&), respondent ban3, inits desire to put up a branch in asbate, asbate, negotiated withpetitioner or the purchase o the then unregistered property. Hn ay4', (/&), a contract o !ESE ?"2D HP2"H5 2H BIJ was instead orgedby the parties, the pertinent portion o which reads1

(. 2he !ESSH@ leases unto the !ESSEE, an the !ESSEE herebyaccepts in lease, the parcel o land described in the rst?DE@ES clause, to have and to hold the same or a period otwenty-ve :4); years commencing rom une (, (/&) to une (,4'''. 2he !ESSEE, however, shall have the option to purchase

said parcel o land within a period o ten :('; years rom thedate o the signing o this Contract at a price not greater than2?H DI5A@EA 2E5 PESHS :P4('.''; per s0uare meter. +or thispurpose, the !ESSH@ underta3es, within such ten-year period,to register said parcel o land under the 2H@@E5S SJS2E andall e#penses appurtenant thereto shall be or his sole account.

", or any reason, said parcel o land is not registered under the2H@@E5S SJS2E within the aorementioned ten-year period,the !ESSEE shall have the right, upon termination o the leaseto be paid by the !ESSH@ the mar3et value o the building and

improvements constructed on said parcel o land.

2he !ESSEE is hereby appointed attorney-in-act or the !ESSH@to register said parcel o land under the 2H@@E5S SJS2E incase the !ESSH@, or any reason, ails to comply with hisobligation to efect said registration within reasonable time aterthe signing o this greement, and all e#penses appurtenant tosuch registration shall be charged by the !ESSEE against therentals due to the !ESSH@.

4. Auring the period o the lease, the !ESSEE covenants to pay

the !ESSH@, at the latter*s residence, a monthly rental o SEKE5DI5A@EA PESHS :P&''.'';, Philippine Currency, payable inadvance on or beore the th :)th; day o every calendarmonth, provided that the rentals or the rst our :6; monthsshall be paid by the !ESSEE in advance upon the signing o thisContract.

%. 2he !ESSEE is hereby authoriGed to construct as its sole


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e#pense a building and such other improvements on said parcelo land, which it may need in pursuance o its business and8oroperations9 provided, that i or any reason the !ESSEE shall ailto e#ercise its option mentioned in paragraph :(; above in casethe parcel o land is registered under the 2H@@E5S SJS2E

within the ten-year period mentioned therein, said buildingand8or improvements, shall become the property o the !ESSH@ater the e#piration o the 4)-year lease period without the righto reimbursement on the part o the !ESSEE. 2he authorityherein granted does not, however, e#tend to the ma3ing orallowing any unlawul, improper or ofensive used o the leasedpremises, or any use thereo, other than ban3ing and ocepurposes. 2he maintenance and up3eep o such building,structure and improvements shall li3ewise be or the soleaccount o the !ESSEE. 1

2he oregoing agreement was subscribed beore 5otary Public @omeo+. 5atividad.

Pursuant to said contract, a building and other improvements wereconstructed on the land which housed the branch oce o @CBC inasbate, asbate. ?ithin three years rom the signing o the contract,petitioner complied with his part o the agreement by having the

property registered andplaced under the 2H@@E5S SJS2E, or which Hriginal Certicate o2itle 5o. '-4%4 was issued by the @egister o Aeeds o the Province oasbate.

Petitioner alleges that as soon as he had the property registered, he3ept on pursuing the manager o the branch to efect the sale o the lotas per their agreement. "t was not until September 6, (/>6, however,when the respondent ban3 decided to e#ercise its option and inormedpetitioner, through a letter, 2o its intention to buy the property at theagreed price o not greater than P4('.'' per s0uare meter or a total o

P&>,6%'.''. But much to the surprise o the respondent, petitionerreplied that he is no longer selling the property.

Dence, on arch (6, (/>), a complaint or specic perormance anddamages were led by respondent against petitioner. "n the complaint,respondent alleged that during the negotiations it made clear to


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petitioner that it intends to stay permanently on property once itsbranch oce is opened unless the e#igencies o the business re0uiresotherwise. side rom its prayer or specic perormance, it li3ewiseas3ed or an award o P)','''.'' or attorney*s ees P('','''.'' ase#emplary damages and the cost o the suit.5

special and armative deenses, petitioner contended1

(. 2hat the contract having been prepared and drawn by @CBC,it too3 undue advantage on him when it set in lopsided terms.

4. 2hat the option was not supported by any considerationdistinct rom the price and hence not binding upon him.

%. 2hat as a condition or the validity and8or ecacy o theoption, it should have been e#ercised within the reasonable timeater the registration o the land under the 2orrens System9 thatits delayed action on the option have oreited whatever itsclaim to the same.

6. 2hat e#traordinary in7ation supervened resulting in theunusual decrease in the purchasing power o the currency thatcould not reasonably be orseen or was maniestly beyond thecontemplation o the parties at the time o the establishment othe obligation, thus, rendering the terms o the contract

unenorceable, ine0uitable and to the undue enrichment o@CBC. !

and as counterclaim petitioner alleged that1

(. 2he rental o P&''.'' has become unrealistic andunreasonable, that $ustice and e0uity will re0uire its ad$ustment.

4. By the institution o the complaint he sufered moral damageswhich may be assessed at P('','''.'' and award o attorney*see o P4),'''.'' and e#emplary damages at P('','''.''.6


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"nitially, ater trial on the merits, the court dismissed the complaint.lthough it ound the contract to be valid, the court nonetheless ruledthat the option to buy in unenorceable because it lac3ed aconsideration distinct rom the price and @CBC did not e#ercise itsoption within reasonable time. 2he prayer or read$ustment o rental

was denied, as well as that or moral and e#emplary damages.7

5evertheless, upon motion or reconsideration o respondent, the courtin the order o anuary /, (/>/, reversed itsel, the dispositive portionreads1

?DE@E+H@E, the Court reconsiders its decision dated une ,(/>>, and hereby renders $udgment as ollows1

(. 2he deendant is hereby ordered to e#ecute and deliver theproper deed o sale in avor o plaintif selling, transerring andconveying the property covered by and described in the HriginalCerticate o 2itle '-4%4 o the @egistry o Aeeds o asbate orthe sum o Seventy Eight 2housand +ive Dundred +orty Pesos:P&>,)6','';, Philippine Currency9

4. Aeendant is ordered to pay plaintif the sum o +ive2housand :P),'''.''; Pesos as attorney*s ees9

%. 2he counter claim o deendant is hereby dismissed9 and

6. Aeendants shall pay the costs o suit.4

"n a decision promulgated on September (/, (//(, 9 the Court oppeals armed the ndings o the trial court that1

(. 2he contract is valid and that the parties perectly understood

the contents thereo9

4. 2he option is supported by a distinct and separateconsideration as embodied in the agreement9

%. 2here is no basis in granting an ad$ustment in rental.

ssailing the $udgment o the appellate court, petitioner would li3e us


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to consider mainly the ollowing1

(. 2he disputed contract is a contract o adhesion.

4. 2here was no consideration to support the option, distinct

rom the price, hence the option cannot be e#ercised.

%. @espondent court gravely abused its discretion in notgranting currency ad$ustment on the already eroded value othe stipulated rentals or twenty-ve years.

2he petition is devoid o merit.

2here is no dispute that the contract is valid and e#isting between theparties, as ound by both the trial court and the appellate court.5either do we nd the terms o the contract unairly lopsided to have it

ignored.

contract o adhesion is one wherein a party, usually a corporation,prepares the stipulations in the contract, while the other party merelya#es his signature or his FadhesionF thereto. 2hese types o contractsare as binding as ordinary contracts. Because in reality, the party whoadheres to the contract is ree to re$ect it entirely. lthough, this Courtwill not hesitate to rule out blind adherence to terms where acts andcircumstances will show that it is basically one-sided. 10

?e do not nd the situation in the present case to be ine0uitable.Petitioner is a highly educated man, who, at the time o the trial wasalready a CP-!awyer, and when he entered into the contract, wasalready a CP, holding a respectable position with the etropolitananila Commission. "t is evident that a man o his stature should havebeen more cautious in transactions he enters into, particularly where itconcerns valuable properties. De is amply e0uipped to drive a hardbargain i he would be so minded to.

Petitioner contends that the doctrines laid down in the cases o

At6ins 7roll '.Cua 8ian -e6,11Sanc"e '.Rigos,12and 9da.de :uirino'. Palarca 1 were misapplied in the present case, because (; theoption given to the respondent ban3 was not supported by aconsideration distinct rom the price9 and 4; that the stipulated price oFnot greater than P4('.'' per s0uare meterF is not certain or denite.

rticle (%46 o the Civil Code provides that when an oferor hasallowed the oferee a certain period to accept, the ofer maybe


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withdrawn at anytime beore acceptance by communicating suchwithdrawal, e#cept when the option is ounded upon consideration, assomething paid or promised. Hn the other hand, rticle (6&/ o theCode provides that an accepted unilateral promise to buy and sell adeterminate thingfor a price certain is binding upon the promisor i the

promise is supported (y a consideration distinct from t"e price.

"n a unilateral promise to sell, where the debtor ails to withdraw thepromise beore the acceptance by the creditor, the transactionbecomes a bilateral contract to sell and to buy, because uponacceptance by the creditor o the ofer to sell by the debtor, there isalready a meeting o the minds o the parties as to the thing which isdeterminate and the price which is certain. 15"n which case, the partiesmay then reciprocally demand perormance.

urisprudence has taught us that an optional contract is a privilege

e#isting only in one party < the buyer. +or a separate considerationpaid, he is given the right to decide to purchase or not, a certainmerchandise or property, at any time within the agreed period, at a#ed price. 2his being his prerogative, he may not be compelled toe#ercise the option to buy beore the timee#pires. 1!

Hn the other hand, what may be regarded as a consideration separaterom the price is discussed in the case o9da.de :uirino '.Palarca 16

wherein the acts are almost on all ours with the case at bar. 2he saidcase also involved a lease contract with option to buy where we hadoccasion to say that Fthe consideration or the lessor*s obligation to sellthe leased premises to the lessee, should he choose to e#ercise hisoption to purchase the same, is the obligation o the lessee to sell tothe lessor the building and8or improvements constructed and8or madeby the ormer, i he ails to e#ercise his option to buy leased premises.F17

"n the present case, the consideration is even more onerous on thepart o the lessee since it entails transerring o the building and8orimprovements on the property to petitioner, should respondent ban3ail to e#ercise its option within the period stipulated. 14

2he bugging 0uestion then is whether the price Fnot greater than 2?H


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DI5A@EA PESHSF is certain or denite. price is considered certain iit is so with reerence to another thing certain or when thedetermination thereo is let to the $udgment o a specied person orpersons. 19nd generally, gross inade0uacy o price does not afect acontract o sale. 20

Contracts are to be construed according to the sense and meaning othe terms which the parties themselves have used. "n the presentdispute, there is evidence to show that the intention o the parties is topeg the price at P4(' per s0uare meter. 2his was conrmed bypetitioner himsel in his testimony, as ollows1

M. ?ill you please tell this Court what was the oferT

. "t was an ofer to buy the property that " have inMueGon City :sic;.

M. nd did they give you a specic amountT

### ### ###

. ?ell, there was an ofer to buy the property at P4('per s0uare meters :sic;.

M. nd that was in what yearT

. (/&), sir.

M. nd did you accept the oferT

. Jes, sir. 21

oreover, by his subse0uent acts o having the land titled under the2orrens System, and in pursuing the ban3 manager to efect the saleimmediately, means that he understood perectly the terms o thecontract. De even had the same property mortgaged to the respondent


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ban3 sometime in (/&/, without the slightest hint o wanting toabandon his ofer to sell the property at the agreed price o P4(' pers0uare meter. 22

+inally, we agree with the courts a quo that there is no basis, legal oractual, in ad$usting the amount o the rent. 2he contract is the lawbetween the parties and i there is indeed reason to ad$ust the rent, theparties could by themselves negotiate or the amendment o thecontract. 5either could we consider the decline o the purchasingpower o the Philippine peso rom (/>% to the time o thecommencement o the present case in (/>), to be so great as to resultin an e#traordinary in7ation. E#traordinary in7ation e#ists when therein an unimaginable increase or decrease o the purchasing power othe Philippine currency, or 7uctuation in the value o pesos maniestly

beyond the contemplation o the parties at the time o theestablishment o the obligation. 2

Premises considered, we nd that the contract o F!ESE ?"2D HP2"H52H BIJF between petitioner and respondent ban3 is valid, efective andenorceable, the price being certain and that there was considerationdistinct rom the price to support the option given to the lessee.

?DE@E+H@E, this petition is hereby A"S"SSEA, and the decision o the

appellate court is hereby ++"@EA.

SH H@AE@EA.

G.R. No. L-77!0 M/y 19, 1974

SWEE% LINES, INC., petitioner,vs.H#N. ERNARD# %EVES, P)(+3+ Ju3(, CI o M+/8+#)+(&/l )/' VII, LE#VIGILD# %AND#G, JR., /3 R#GELI#%IR#, respondents.

ili(erto )eonardo, A(elardo C. Almario ; Samuel B. A(adiano forpetitioner.

!eovigildo Kallar or private respondents.


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S52HS,5.','''.'' as moral damages9 anddeendant because o the unavorable $udgment rendered against it.

Hn ugust 44, (/&6, the Court o ppeals,U nding that P! was guiltyonly o simple negligence, reversed the $udgment o the trial Courtgranting petitioner moral and e#emplary damages, but ordered P! topay plaintif the sum o P(''.'', the baggage liability assumed by itunder the condition o carriage printed at the bac3 o the tic3et.

Dence, this Petition or @eview by Certiorari, led on ay 4, (/&), withpetitioner ma3ing the ollowing ssignments o Error1

". 2DE DH5H@B!E CHI@2 H+ PPE!S E@@EA "5 DH!A"5=@ESPH5AE52 P! =I"!2J H5!J H+ S"P!E 5E=!"=E5CE 5A5H2 BA +"2D "5 2DE B@ECD H+ "2S CH52@C2 H+2@5SPH@22"H5 ?"2D PE2"2"H5E@.

"". 2DE DH5H@B!E CHI@2 H+ PPE!S "SCH5S2@IEA 2DEEK"AE5CE 5A 2DE !? ?DE5 "2 @EKE@SEA 2DE AEC"S"H5 H+

2DE !H?E@ CHI@2 ?@A"5= 2H PE2"2"H5E@ H@!A=ES "5 2DE HI52 H+ P>','''.'', EVEP!@JA=ES H+ P%','''.'', 5A P),'''.'' @EP@ESE52"5=22H@5EJ*S +EES, 5A H@AE@EA @ESPH5AE52 P! 2HCHPE5S2E P!"52"++ 2DE SI H+ P(''.'' H5!J, CH52@@J2H 2DE EVP!"C"2 P@HK"S"H5S H+ @2"C!ES 444', 444/, 44%45A 44%6 H+ 2DE C"K"! CHAE H+ 2DE PD"!"PP"5ES.


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Hn uly (, (/&), this Court gave due course to the Petition.

2here is no dispute that P! incurred in delay in the delivery opetitioner*s luggage. 2he 0uestion is the correctness o respondentCourt*s conclusion that there was no gross negligence on the part o

P! and that it had not acted raudulently or in bad aith as to entitlepetitioner to an award o moral and e#emplary damages.

+rom the acts o the case, we agree with respondent Court that P!had not acted in bad aith. Bad aith means a breach o a 3nown dutythrough some motive o interest or ill will. 2"t was the duty o P! toloo3 or petitioner*s luggage which had been miscarried. P! e#erteddue diligence in complying with such duty.

s aptly stated by the appellate Court1

?e do not nd any evidence o bad aith in this. Hn thecontrary, ?e nd that the deendant had e#erted diligent efortto locate plaintif*s baggage. 2he trial court saw evidence o badaith because P! sent the telegraphic message to actan onlyat %1'' o*cloc3 that same aternoon, despite plaintif*sindignation or the non-arrival o his baggage. 2he message wassent within less than one hour ater plaintif*s luggage could notbe located. Eforts had to be e#erted to locate plaintif*s maleta.2hen the Bancasi airport had to attend to other incomingpassengers and to the outgoing passengers. Certainly, noevidence o bad aith can be inerred rom these acts. Cebu

oce immediately wired anila in0uiring about the missingbaggage o the plaintif. t %1)/ P.., anila station agent at thedomestic airport wired Cebu that the baggage was over carriedto anila. nd this message was received in Cebu one minutethereater, or at 61'' P.. 2he baggage was in act sent bac3 toCebu City that same aternoon. Dis Donor stated that the actthat the message was sent at %1)/ P.. rom anila andcompletely relayed to actan at 61'' P.., or within one minute,made the message appear spurious. 2his is a orced reasoning. radio message o about )' words can be completelytransmitted in even less than one minute depending upon

atmospheric conditions. Even i the message was sent romanila or other distant places, the message can be receivedwithin a minute. that is a scientic act which cannot be0uestioned.

5either was the ailure o P! Cebu to reply to petitioner*s rush


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telegram indicative o bad aith, 2he telegram :E#h. B; was dispatchedby petitioner at around ('1'' P.. o ugust 4, (/&. 2he P!supervisor at actan irport was notied o it only in the morning othe ollowing day. t that time the luggage was already to be orwardedto Butuan City. 2here was no bad aith, thereore, in the assumption

made by said supervisor that the plane carrying the bag would arriveat Butuan earlier than a reply telegram. Dad petitioner waited orcaused someone to wait at the Bancasi airport or the arrival o themorning 7ight, he would have been able to retrieve his luggage sooner.

"n the absence o a wrongul act or omission or o raud or bad aith,petitioner is not entitled to moral damages.

rt. 44(&. oral damages include physical sufering, mentalanguish, right, serious an#iety, besmirched reputation,wounded eelings, moral shoc3, social humiliation, and similar

in$ury. 2hough incapable o pecuniary computation, moraldamages may be recovered i they are the pro#imate result othe deendant*s wrongul act o omission.

rt. 444'. ?illul in$ury to property may be a legal ground orawarding moral damages i the court should nd that, under thecircumstances, such damages are $ustly due. 2he same ruleapplies to breaches o contract where the deendant actedraudulently or in bad aith.

Petitioner is neither entitled to e#emplary damages. "n contracts, as

provided or in rticle 44%4 o the Civil Code, e#emplary damages canbe granted i the deendant acted in a wanton, raudulent, rec3less,oppressive, or malevolent manner, which has not been proven in thiscase.

Petitioner urther contends that respondent Court committed graveerror when it limited P!*s carriage liability to the amount o P(''.''as stipulated at the bac3 o the tic3et. "n this connection, respondentCourt opined1

s a general proposition, the plaintif*s maleta having been

pilered while in the custody o the deendant, it is presumedthat the deendant had been negligent. 2he liability, however, oP! or the loss, in accordance with the stipulation written onthe bac3 o the tic3et, E#hibit (4, is limited to P(''.'' perbaggage, plaintif not having declared a greater value, and nothaving called the attention o the deendant on its true valueand paid the tarif thereor. 2he validity o this stipulation is not0uestioned by the plaintif. 2hey are printed in reasonably and


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airly big letters, and are easily readable. oreover, plaintif hadbeen a re0uent passenger o P! rom Cebu to Butuan City andbac3, and he, being a lawyer and businessman, must be ullyaware o these conditions. 5

?e agree with the oregoing nding. 2he pertinent Condition oCarriage printed at the bac3 o the plane tic3et reads1

>. B===E !"B"!"2J ... 2he total liability o the Carrier or lostor damaged baggage o the passenger is !""2EA 2H P(''.''or each tic3et unless a passenger declares a higher valuation ine#cess o P(''.'', but not in e#cess, however, o a total

valuation o P(,'''.'' and additional charges are paid pursuantto Carrier*s tarifs.

2here is no dispute that petitioner did not declare any higher value orhis luggage, much less did he pay any additional transportationcharge.

But petitioner argues that there is nothing in the evidence to show thathe had actually entered into a contract with P! limiting the latter*sliability or loss or delay o the baggage o its passengers, and thatrticle (&)'U o the Civil Code has not been complied with.

?hile it may be true that petitioner had not signed the plane tic3et:E#h. F(4F;, he is nevertheless bound by the provisions thereo. FSuchprovisions have been held to be a part o the contract o carriage, andvalid and binding upon the passenger regardless o the latter*s lac3 o3nowledge or assent to the regulationF. ! "t is what is 3nown as acontract o FadhesionF, in regards which it has been said that contractso adhesion wherein one party imposes a ready made orm o contracton the other, as the plane tic3et in the case at bar, are contracts notentirely prohibited. 2he one who adheres to the contract is in realityree to re$ect it entirely9 i he adheres, he gives his consent. 6nd as

held in @andolph v. merican irlines, ('% Hhio pp. (&4, (66 5.E. 4d>&>9 @osenchein vs. 2rans ?orld irlines, "nc., %6/ S.?. 4d 6>%, Facontract limiting liability upon an agreed valuation does not ofendagainst the policy o the law orbidding one rom contracting againsthis own negligence.

Considering, thereore, that petitioner had ailed to declare a highervalue or his baggage, he cannot be permitted a recovery in e#cess o


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P(''.''.Besides, passengers are advised not to place valuable itemsinside their baggage but Fto avail o our K-cargo service F :E#h. F(F;. " tis li3ewise to be noted that there is nothing in the evidence to show theactual value o the goods allegedly lost by petitioner.

2here is another matter involved, raised as an error by P! < the actthat on Hctober 46, (/&6 or two months ater the promulgation o theAecision o the appellate Court, petitioner*s widow led a otion orSubstitution claiming that petitioner died on anuary , (/&6 and thatshe only came to 3now o the adverse Aecision on Hctober 4%, (/&6when petitioner*s law partner inormed her that he received copy o theAecision on ugust 4>, (/&6. ttached to her otion was an davito petitioner*s law partner reciting acts constitutive o e#cusablenegligence. 2he appellate Court noting that all pleadings had beensigned by petitioner himsel allowed the widow Fto ta3e such steps asshe or counsel may deem necessary.F She then led a otion or

@econsideration over the opposition o P! which alleged that theCourt o ppeals Aecision, promulgated on ugust 44, (/&6, hadalready become nal and e#ecutory since no appeal had beeninterposed thererom within the reglementary period.

Inder the circumstances, considering the demise o petitioner himsel,who acted as his own counsel, it is best that technicality yields to theinterests o substantial $ustice. Besides, in the *last analysis, no seriouspre$udice has been caused respondent P!.

"n ne, we hold that the conclusions drawn by respondent Court rom

the evidence on record are not erroneous.

?DE@E+H@E, or lac3 o merit, the instant Petition is hereby denied,and the $udgment sought to be reviewed hereby armed in toto.

5o costs.

SH H@AE@EA.

G.R. No. 110!41 S(:&(8;() 21, 1995

%ELENG%AN R#%HERS < S#NS, INC. =LA S$ER%E CIGAR , petitioner,vs.%HE C#$R% # APPEALS, "AWASA"I "ISHEN "AISHA, L%D. /3SMI%H, ELL < C#., INC., respondents.

5uan, )uces, )una and Associates for petitioner.


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Bito, !oGada, Hrtega Castillo or private respondents.

MEND#ZA,J.:

2his is a petition or review o the decision o the Court o ppeals, 1inC-=.@. CK 5o. '/)(6, arming with modication the decision o the@egional 2rial Court in a case or specic perormance brought bypetitioner.

Private respondent Lawasa3i Lishen Laisha, !td. :L-!ine; is a oreignshipping company doing business in the Philippines, its shipping agentbeing respondent the Smith, Bell Co., "nc. "t is a member o the +arEast Conerence, the body which #es rates by agreement o itsmember-shipowners. 2he conerence is registered with the I.S. +ederal

aritime Commission.2

Hn ay >, (/&/, the Kan @ee3um Paper, "nc. entered into a contract oafreightment with the L-!ine or the shipment o 6> rolls o containerboard liners rom Savannah, =eorgia to anila. 2he shipment wasconsigned to herein petitioner !a Suerte Cigar Cigarette +actory. 2hecontract o afreightment was embodied in Bill o !ading 5o. '4 issuedby the carrier to the shipper. 2he e#penses o loading and unloadingwere or the account o the consignee.

2he shipment was pac3ed in (4 container vans and loaded on boardthe carrier*s vessel, SS 9erraano Bridge. t 2o3yo, apan, the cargowas transhipped on two vessels o the L-!ine. 2en container vans wereloaded on the SS ar East riends"ip, while two were loaded on the SS8angang ?lory.

Shortly thereater, the consignee :herein petitioner; received rom theshipper photocopies o the bill o lading, consular invoice and pac3inglist, as well as notice o the estimated time o arrival o the cargo.

Hn une ((, (/&/, the SS ar East riends"ip arrived at the port oanila. side rom the regular advertisements in the shipping sectiono the Bulletin -odayannouncing the arrival o its vessels, petitionerwas notied in writing o the ship*s arrival, together with inormationthat container demurrage at the rate o P6.'' per linear oot per dayor the rst ) days and P>.'' per linear oot per day ater the )th daywould be charged unless the consignee too3 delivery o the cargowithin ten days.


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Hn une 4(, (/&/, the other vessel SS 8angang ?lory, carryingpetitioner*s two other vans, arrived and was discharged o its contentsthe ne#t day. Hn the same day the shipping agent Smith, Bell Co.released the Aelivery Permit or twelve :(4; containers to the bro3erupon payment o reight charges on the bill o lading.

2he ne#t day, une 44, (/&/, the "sland Bro3erage Co. presented, inbehal o petitioner, the shipping documents to the Customs arineAivision o the Bureau o Customs. But the latter reused to act onthem because the maniest o the SS ar East riends"ip covered only(' containers, whereas the bill o lading covered (4 containers.

2he bro3er, thereore, sent bac3 the maniest to the shipping agentwith the re0uest that the maniest be amended. Smith, Bell Co.reused on the ground that an amendment, as re0uested, would violateW('') o the 2arif and Customs Code relating to unmaniested cargo.

!ater, however, it agreed to add a ootnote reading F2wo containervans carried by the SS 8angang ?lory to complete the shipment otwelve containers under the bill o lading.F

Hn une 4/, (/&/ the maniest was pic3ed up rom the oce orespondent shipping agent by an employee o the "BC and led withthe Bureau o Customs. 2he maniest was approved or release on uly%, (/&/. "BC wrote Smith, Bell Co. to ma3e o record that entry o theshipment had been delayed by the error in the maniest.

Hn uly ((, (/&/, when the "BC tried to secure the release o the cargo,

it was inormed by private respondents* collection agent, the CBCS=uaranteed +ast Collection Services, that the ree time or removingthe containers rom the container yard had e#pired on une 4, (/&/,in the case o the SS ar East riends"ip, and on uly /, in the case othe SS 8angang ?lory, and that demurrage charges had begun to runon une 4&, (/&/ with respect to the (' containers on the SS ar Eastriends"ip and on uly (', (/&/ with respect to the 4 containersshipped on board the SS 8angang ?lory.

Hn uly (%, (/&/, petitioner paid P6&,>'.'' representing the totaldemurrage charges on all the containers, but it was not able to obtain

its goods. Hn uly (, (/&/ it was able to obtain the release o twocontainers and onuly (&, (/&/ o one more container. "t was able to obtain only a partialrelease o the cargo because o the brea3down o the arrastre*se0uipment at the container yard.

2his matter was reported by "BC in letters o complaint sent to thePhilippine Ports uthority. "n addition, on uly (, (/&/, petitioner sent


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a letter dated uly (4, (/&/ :E#h. "; to Smith, Bell Co., re0uestingreconsideration o the demurrage charges, on the ground that thedelay in claiming the goods was due to the alleged late arrival o theshipping documents, the delay caused by the amendment o themaniest, and the act that two o the containers arrived separately

rom the other ten containers.

Hn uly (/, (/&/, petitioner paid additional charges in the amount oP4',('.'' or the period uly (6-(/, (/&/ to secure the release o itscargo, but still petitioner was unable to get any cargo rom theremaining nine container vans. "t was only the ne#t day, uly 4', (/&/,that it was able to have two more containers released rom thecontainer yard, bringing to ve the total number o containers whosecontents had been delivered to it.

Subse0uently, petitioner reused to pay any more demurrage charges

on the ground that there was agreement or their payment in the bill olading and that the delay in the release o the cargo was not due to itsault but to the brea3down o the e0uipment at the container yard. "nall, petitioner had paid demurrage charges rom une 4& to uly (/,(/&/, in the total amount o P&,>6'.'', computed as ollows1

. Container demurrage paid on uly (%, (/&/

(. +ar East +riendship :E#h. D-(; une 4& < uly (% :(& days;

(st ) days X P68day8oot

) days # P6' t. # (' ctrns. P >,'''.''5e#t (4 days X P>8day8oot(4 days # P> # 6' t. # (' ctrns. P %>,6''.''

'.''


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B. Container demurrage paid on uly (/, (/&/

(. +ar East +riendship

a. on 4 containers released uly (

% days # P> # 6' t. # 4 ctnrs. P (,/4'.''

:E#h. !-4;

b. on ( container released uly (&

6 days # P> # 6' t. # & cntrs. P (,4>'.''

:E#h. !-%;

c. remaining & containers as o uly (/

days # P> # 6' t. # & cntrs. P (%,66'.''

:E#h. !-(;

4. Dangang =lory

a. )th day :uly (6;

( day # P6.'' # 6' t. # 4 cntrs. P %4'.''

b. uly ()-(/1

) days # P>.'' # 6' t. # 4 cntrs. P %,4''.''

:E#h. !;


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Hn uly 4', (/&/ petitioner wrote private respondent or a reund o thedemurrage charges, but private respondent replied on uly 4), (/&/that, as member o the +ar East Conerence, it could not modiy therules or authoriGe reunds o the stipulated tarifs.

Petitioner, thereore, led this suit in the @2C or specic perormanceto compel private respondent carrier, through it s shipping agent, theSmith, Bell Co., to release & container vans consigned to it ree ocharge and or a reund o P&,>6'.'' which it had paid, plusattorney*s ees and other e#penses o litigation. Petitioner also as3edor the issuance o a writ o preliminary in$unction to restrain privaterespondents rom charging additional demurrage.

"n their amended answer, private respondents claimed that collectiono container charges was authoriGed by WW 4, 4% and 4/ o the bill olading and that they were not ree to waive these charges because

under the Inited States Shipping ct o (/( it was unlawul or anycommon carrier engaged in transportation involving the oreigncommerce o the Inited States to charge or collect a greater or lessercompensation that the rates and charges specied in its tarifs on lewith the +ederal aritime Commission.

Private respondents alleged that petitioner 3new that the contract ocarriage was sub$ect to the +ar East Conerence rules and that thepublication o the notice o reimposition o container demurragecharges published in the shipping section o the Bulletin -oday andBusinessday newspapers rom +ebruary (/ < +ebruary 4), (/&/ was

binding upon petitioner. 2hey contended urther that the collection ocontainer demurrage was an international practice which is widelyaccepted in ports all over the world and that it was in conormity with@epublic ct 5o. (6'&, otherwise 3nown as the Philippine HverseasShipping ct o (/)).

2hereater, a writ was issued ater petitioner had posted a bond oP)','''.'' and the container vans were released to the petitioner. Hnarch (/, (/>, however, the @2C dismissed petitioner*s complaint. "tcited the bill o lading which provided1

4%. 2he ocean carrier shall have a lien on the goods, which shallsurvive delivery, or all reight, dead reight, demurrage,damages, loss, charges, e#penses and any other sumswhatsoever payable or chargeable to or or the account o theerchant under this bill o lading . . . .

"t li3ewise invo3ed clause 4/ o the bill o lading which provided1


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4/. . . .2he terms o the ocean carrier*s applicable tarif,including tarifs covering intermodal transportation on le withthe +ederal aritime Commission and the "nterstateCommission or any other regulatory body which governs aportion o the carriage o goods, are incorporated herein.

@ule 4( o the +ar East Conerence 2arif 5o. 4>-+C 5o. (4 @ules and@egulations, reerred to above, provides1

:A; +ree 2ime, Aemurrage, and E0uipment Aetention at Ports inthe Philippines.

5ote1 Philippine Customs !aw prescribes all cargo dischargedrom vessels to be given into custody o the =overnmentrrastre Contractor, appointed by Philippine Customs whounderta3es delivery to the consignee.

### ### ###

Aemurrage charges on Containers with CJ Cargo.

(. +ree time will commence at >1'' a.m. on the rst wor3ingcalendar day ollowing completion o discharge o the vessel. "tshall e#pire at (41'' p.m. :midnight; on the tenth wor3ingcalendar day, e#cluding Saturdays, Sundays and holidays.

?or3 stoppage at a terminal due to labor dispute or other force

maeureas dened by the conerence preventing delivery ocargo or containers shall be e#cluded rom the calculation o theree time or the period o the wor3 stoppage.

4. Aemurrage charges are incurred beore the container leavesthe carrier*s designated CJ, and shall be applicable on thecontainer commencing the ne#t wor3ing calendar day ollowinge#piration o the allowable ree time until the consignee hasta3en delivery o the container or has ully striped the containero its contents in the carrier*s designated CJ.

Aemurrage charges shall be assessed hereunder1

Hrdinary containers < P6.'' per linear oot o thecontainer per day or the rst ve days9 P>.'' perlinear oot o the container per day, thereater.

2he @2C held that the bill o lading was the contract between theparties and, thereore, petitioner was liable or demurrage charges. "t


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re$ected petitioner*s claim oforce maeure. "t held1

2his Court cannot also accord aith and credit on the plaintif*sclaim that the delay in the delivery o the containers wascaused by the brea3ing down o the e0uipment o the arrastre

operator. Such claim was not supported with competentevidence. !et us assume the act that the arrastre operator*se0uipment bro3e down still plaintif has to pay thecorresponding demurrage charges. 2he possibility that thee0uipment would brea3 down was not only oreseeable, butactually, oreseen, and was not caso fortuito. 5

2he @2C, thereore, ordered1

?DE@E+H@E, nding the preponderance o evidence in avor othe deendants and against the plaintif, $udgment is herebyrendered dismissing the complaint with costs against it. Plaintifis hereby ordered to pay deendants the sum o P%,6>'.''representing demurrage charges or the detention o the seven:&; orty-ooter container vans rom uly 4' to ugust &, (/&/,with legal interest commencing on ugust &, (/&/ until ullypaid. nd plaintif has to pay the sum o P(','''.'', by way oattorney*s ees.

SH H@AE@EA.

Hn appeal, the case was armed with modication by the Court oppeals as ollows1

?DE@E+H@E, modied as indicated above deleting the award oattorney*s ees, the decision appealed rom is hereby ++"@EAin all other respects.

Costs against plaintif-appellant.

SH H@AE@EA. !

Dence, this petition or review in which it is contended1


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( that no demurrage lies in the absence o any showingthat the vessels had been improperly detained or thatloss or damage had been incurred as a conse0uence oimproper detention9

4 that respondent Court*s nding that private respondentSmith Bell had promptly and on the same day amendedthe deective maniest is contrary to the evidence orecord.

% that respondent Court maniestly over-loo3edundisputed evidence presented by petitioner showingthat the brea3down in the acilities and e0uipment o thearrastre operator urther delayed petitioner*s withdrawalo the cargo. 6

Petitioner prays or a reversal o the decision o the Court o ppealsa

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