ALBERTA and CRESENCIO YOBIDO vsCA & LENY, ARDEE and JASMIN TUMBOY

FACTS:-April 26, 1988, spouses Tito and Leny Tumboy and their minor children named Ardee and Jasmin, boarded at Mangagoy, Surigao del Sur, a Yobido Liner bus bound for Davao City.

-Along Picop Road in Km. 17, Sta. Maria, Agusan del Sur, the left front tire of the bus exploded.The bus fell into a ravine around three (3) feet from the road and struck a tree.

-resulted in the death of 28-year-old Tito Tumboy and physical injuries to other passengers.-a complaint for breach of contract of carriage, damages and attorneys fees was filed by Leny and her children against Alberta Yobido, the owner of the bus, and Cresencio Yobido, its driver, before the Regional Trial Court of Davao City.

-defendants: affirmative defense ofcaso fortuito.-They also filed a third-party complaint against Philippine Phoenix Surety and Insurance, Inc. who answered with a counterclaim. It was not held liable under the insurance contract, the lower court dismissed the third party complaint.-Tumboy: violation of the COC was caused by the drivers failure to exercise the diligence required of the carrier in transporting passengers safely to their place of destination.-According to Leny Tumboy, the bus left Mangagoy 3PM.The winding road it traversed was not cemented and was wet due to the rain; it was rough with crushed rocks.The bus which was full of passengers had cargoes on top.Since it was running fast, she cautioned the driver to slow down but he merely stared at her through the mirror. At around 3:30 p.m., in Trento, she heard something explode and immediately, the bus fell into a ravine.-defendants: accident was due to a fortuitous event. Abundio Salce, who was the bus conductor testified that the 42-seater bus was not full as there were only 32 passengers, such that he himself managed to get a seat. bus was running at a speed of 60 to 50 and that it was going slow because of the zigzag road. He affirmed that the left front tire that exploded was a brand new tire that he mounted on the bus only five (5) days before the incident. all driver applicants in Yobido Liner underwent actual driving tests before they were employed. Defendant Cresencio Yobido underwent such test and submitted his professional drivers license and clearances from the barangay, the fiscal and the police.-Lower Court dismissed the action for lack of merit. the cause of the explosion remains a mystery until at present. the tire blowout was acaso fortuitowhich is completely an extraordinary circumstance independent of the will of the defendants -the plaintiffs appealed to the Court of Appeals.They ascribed to the lower court the following errors: (a) finding that the tire blowout was acaso fortuito; (b) failing to hold that the defendants did not exercise utmost and/or extraordinary diligence required of carriers under Article 1755 of the Civil Code, and (c) deciding the case contrary to the ruling inJuntilla v. Fontanar,[5]andNecesito v. Paras.[6]-CA: reversed the decision of the lower court. the explosion of the tire is not in itself a fortuitous event.The cause of the blow-out, if due to a factory defect, improper mounting, excessive tire pressure, is not an unavoidable event.The fact that the cause of the blow-out was not known does not relieve the carrier of liability.Owing to the statutory presumption of negligence against the carrier and its obligation to exercise the utmost diligence of very cautious persons to carry the passenger safely as far as human care and foresight can provide, it is the burden of the defendants to prove that the cause of the blow-out was a fortuitous eventProving that the tire that exploded is a new Goodyear tire is not sufficient to discharge defendants burden. -Yobido filed a motion for reconsideration of said decision which was denied.

ISSUE: Whether or not the tire blowout that caused the death of Tito Tumboy was acaso fortuito..-The Court did re-examine the facts and evidence in this case because the lower court and the Court of Appeals arrived at diverse factual findings.[8]However, upon such re-examination, we found no reason to overturn the findings and conclusions of the Court of Appeals.-SC: when a passenger boards a common carrier, he takes the risks incidental to the mode of travel he has taken. After all, a carrier is not an insurer of the safety of its passengers and is not bound absolutely and at all events to carry them safely and without injury.-However, when a passenger is injured or dies while travelling, the law presumes that the common carrier is negligent.Thus, the Civil Code provides:Art. 1756. In case of death or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755.Article 1755 provides that (a) common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances. -once a passenger dies or is injured, the carrier is presumed to have been at fault or to have acted negligently. This disputable presumption may only be overcome by evidence that: the carrier had observed extraordinary diligence or that the death or injury of the passenger was due to a fortuitous event.[11] -petitioners contention that they should be exempt from liability because the tire blowout was no more than a fortuitous event that could not have been foreseen, must fail.-A fortuitous event is possessed of the following characteristics: (a) must be independent of human will; (b) it must be unforeseeable or if can be forseen, must be inevitable(c) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner;(d) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor.[13]-As Article 1174 provides, no person shall be responsible for a fortuitous event which could not be foreseen, or which, though foreseen, was inevitable. In other words, there must be an entire exclusion of human agency from the cause of injury or loss.[14]-At the case at bar, the explosion of the new tire may not be considered a fortuitous event. The fact that the tire was new did not imply that it was entirely free from manufacturing defects or that it was properly mounted on the vehicle.-Neither may the fact that the tire bought and used in the vehicle is of a brand name noted for quality, resulting in the conclusion that it could not explode within five days use.-it is settled that an accident caused either by defects in the automobile or through the negligence of its driver is not acaso fortuitothat would exempt the carrier from liability for damages.[15]-Moreover, a common carrier may not be absolved from liability in case offorce majeureor fortuitous event alone.The common carrier must still prove that it wasnot negligent in causing the death or injury resulting from an accident.[16]-petitioners proved through the bus conductor, Salce, that the bus was running at 60-50 kilometers per hour only or within the prescribed lawful speed limit.However, they failed to rebut the testimony of Leny Tumboy that the bus was running so fast that she cautioned the driver to slow down.These contradictory facts must, therefore, be resolved in favor of liability in view of the presumption of negligence of the carrier in the law. -It was incumbent upon the defense to establish that it took precautionary measures considering partially dangerous condition of the road.As stated above, proof that the tire was new and of good quality is not sufficient proof that it wasnotnegligent.Petitioners should have shown that it undertook extraordinary diligence in the care of its carrier, such as conducting daily routinary check-ups of the vehicles parts. -Having failed to discharge its duty to overthrow the presumption of negligence with clear and convincing evidence, petitioners are hereby held liable for damages.

ANICETO Jr., MARIA SALVACION, LEOPLOLDO AND SATURNINO SALUDO VS CA, TRANSWORLD AIRLINES AND PHIL AIRLINESFACTS:-After the death of Crispina Saludo in Chicago Illinois, Pomierski and Son Funeral Home of Chicago, made the necessary preparations and arrangements for the shipment, of the remains from Chicago to the Philippines. -The funeral home had the remains embalmed and secured a permit for the disposition of dead human body on October 25, 1976, Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00 p.m. on October 26, 1976 at the Pomierski & Son Funeral Home, sealed the shipping case containing a hermetically sealed casket that is airtight and waterproof wherein was contained the remains of Crispina Saludo. -Pomierski brought the remains to C.M.A.S. (Continental Mortuary Air Services) at the airport (Chicago) which made the necessary arrangements such as flights, transfers, etc.; -C.M.A.S. booked the shipment with PAL thru Air Care International, with Pomierski F.H. as the shipper and Mario (Maria) Saludo as the consignee. -PAL Airway Bill No. 079-01180454 Ordinary was issued -routing: Chicago to San Francisco on board TransWorld Airlines Flight 131 of October 27, 1976 and from San Francisco to Manila on board PAL Flight No. 107 of the same date, and from Manila to Cebu on board PAL Flight 149 of October 29, 1976 -Maria Salvacion and Saturnino Saludo, thru a travel agent, were booked with United Airlines from Chicago to California, and with PAL from California to Manila. She informed the funeral director of Pomierski that they were booked with United Airlines. But the director told her that the remains were booked with TWA flight to California. -This upset her, and she and her brother had to change reservations from UA to the TWA flight after she confirmed by phone that her mother's remains should be on that TWA flight.-At the airport, they watched from the look-out area. She saw no body being brought. So, she went to the TWA counter again, and she was told there was no body on that flight. -Reluctantly, they took the TWA flight upon assurance of her cousin, Ani Bantug, that he would look into the matter and inform her about it on the plane. But no confirmation reached her.-Upon arrival at San Francisco at about 5:00 p.m., she went to the TWA counter there to inquire about her mother's remains. She was told they did not know anything about it.She then called Pomierski that her mother's remains were not at the West Coast terminal, and Pomierski immediately called C.M.A.S., which informed them that the remains were on a plane to Mexico City because there were two bodies at the terminal, and somehow they were switched. they were sending the remains back to California via Texas

-It-turned out that TWA had carried a shipment under PAL Airway Bill No. 079-ORD-01180454 on TWA Flight 603 of October 27, 1976, a flight earlier than TWA Flight 131 of the same date. TWA delivered or transferred the said shipment said to contain human remains to PAL at 2:00 p.m. of the same date, October 27, 1976. Due to a switch(ing) in Chicago, this shipment was withdrawn from PAL by CMAS at 6:05 p.m. of the same date, October 27.-In the memo or incident report of Pomierski, it is stated that the remains (of Crispina Saludo) were taken to CMAS at the airport; that there were two bodies at the (Chicago Airport) terminal, and somehow they were switched, that the remains (of Crispina Saludo) were on a plane to Mexico City.-The following day October 28, 1976, remains of Crispina Saludo arrived in San Francisco from Mexico on board American Airlines. -This shipment was transferred to or received by PAL at 7:45 p.m-This casket bearing the remains of Crispina Saludo, which was mistakenly sent to Mexico and was opened (there), was resealed by Crispin F. Patagas for shipment to the Philippines.-The shipment was immediately loaded on PAL flight for Manila that same evening and arrived (in) Manila on October 30, 1976, a day after its expected arrival on October 29, 1976.3-petitioners' counsel informed private respondent Trans World Airlines (TWA) of the misshipment and eventual delay in the delivery of the cargo and of the discourtesy of its employees to petitioners Maria Salvacion Saludo and Saturnino Saludo. -In a separate letter on June 10, 1977 addressed to co-respondent Philippine Airlines (PAL),5petitioners stated that they were holding PAL liable for said delay in delivery and would commence judicial action should no favorable explanation be given.-Both private respondents denied liability. Thus, a damage suit6was filed by petitioners before the then Court of First Instance Leyte.- CFI LEYTE: absolved the two respondent airlines companies of liability which the CA affirmed in toto.-ISSUES: (1) the delay in the delivery of the casketed was due to the fault of respondent airline companies, (2) the one-day delay in the delivery of the same constitutes contractual breach as would entitle petitioners to damages-SC: -Petitioners fault respondent court for "not finding that private respondents failed to exercise extraordinary diligence required by law which resulted in the switching and/or misdelivery of the remains of Crispina Saludo to Mexico causing gross delay in its shipment to the Philippines, and consequently, damages to petitioners."Petitioner allege that private respondents received the casketed remains of petitioners' mother on October 26, 1976, as evidenced by the issuance of PAL Air Waybill No. 079-01180454, and from said date, private respondents were charged with the responsibility to exercise extraordinary diligence so much so that for the alleged switching of the caskets on October 27, 1976, or one day after private respondents received the cargo, the latter must necessarily be liable."(t)he issuance of a bill of lading carries the presumption that the goods were delivered to the carrier issuing the bill, for immediate shipment, and it is nowhere questioned that a bill of lading isprima facieevidence of the receipt of the goods by the carrier. . . . A bill of lading is a written acknowledgment of the receipt of the goods and an agreement to transport and deliver them at a specified place to a person named or on his order. -delivery of the goods to the carrier normally precedes the issuance of the bill; or, to some extent, delivery of the goods and issuance of the bill are regarded in commercial practice as simultaneous acts.-However, except as may be prohibited by law, there is nothing to prevent an inverse order of events, that is, the execution of the bill of lading even prior to actual possession and control by the carrier of the cargo to be transported.-Ordinarily, a receipt is not essential to a complete delivery of goods to the carrier for transportation but, when issued, is competent andprima facie,evidence of delivery to the carrier but not conclusive (rebuttable) as it may be explained, varied or contradicted by parol or other evidence.-PAL Airway Bill No. 079-01180454 was issued, not as evidence of receipt of delivery of the cargo on October 26, 1976, but merely as a confirmation of the booking thus made for the San Francisco-Manila flight scheduled on October 27, 1976. Actually, it was not until October 28, 1976 that PAL received physical delivery of the body at San Francisco.-Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the carrier. This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner exercises the right of stoppage in transitu,_there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them.Where such a delivery has thus been accepted by the carrier, the liability of the common carrier commences.-the extraordinary diligence statutorily required to be observed by the carrier instantaneously commences upon delivery of the goods thereto, for such duty to commence there must in fact have been delivery of the cargo subject of the contract of carriage. -In the case at bar, the body intended to be shipped as agreed upon was really placed in the possession and control of PAL on October 28, 1976 and it was from that date that private respondents became responsible for the agreed cargo -the switching of caskets prior thereto which was not caused by them, and subsequent events caused thereby, private respondents cannot be held liable.Petitioners: It is argued that since there is no clear evidence establishing the fault Continental Mortuary Air Services (CMAS) for the mix-up, private respondents are presumably negligent pursuant to Article 1735 of the Civil Code and, for failure to rebut such presumption, they must necessarily be held liable; or, assuming that CMAS was at fault, the same does not absolve private respondents of liability because whoever brought the cargo to the airport or loaded it on the plane did so as agent of private respondents.This contention is without merit. -when the cargo was received from C.M.A.S. at the Chicago airport terminal for shipment, Air Care International and/or TWA, had no way of determining its actual contents, since the casket was hermetically sealed by the Philippine Vice-Consul in Chicago and in an air pouch of C.M.A.S., to the effect that Air Care International and/or TWA had to rely on the information furnished by the shipper regarding the cargo's content-Thus, under said circumstances, no fault and/or negligence can be attributed to PAL (even if Air Care International should be considered as an agent of PAL) and/or TWA, the entire fault or negligence being exclusively with C.M.A.S.It can correctly and logically be concluded, therefore, that the switching occurred or, more accurately, was discovered on October 27, 1976, it happened while the cargo was still with CMAS, before the same was place in the custody of private respondents.-Thus, while the Air Cargo Transfer Manifest of TWA of October 27, 197634was signed by Garry Marcial of PAL at 1400H, or 2:00 P.M., on the same date, thereby indicating acknowledgment by PAL of the transfer to them by TWA of what was in truth the erroneous cargo, said misshipped cargo was in fact withdrawn by CMAS from PAL and the correct shipment containing the body of Crispina Saludo was received by PAL only on October 28, 1976, at 1945H, or 7:45 P.M., -TWA or any airline for that matter would not have opened such a sealed casket just for the purpose of ascertaining whose body was inside and to make sure that the remains inside were those of the particular person indicated to be by C.M.A.S. TWA had to accept whatever information was being furnished by the shipper or by the one presenting the casket for shipment. -And so as a matter of fact, TWA carried to San Francisco and transferred to defendant PAL a shipment covered by or under PAL Airway Bill No. 079-ORD-01180454. Only, it turned out later, while the casket was already with PAL, that what was inside the casket was not the body of Crispina Saludo so much so that it had to be withdrawn by C.M.A.S. from PAL. -The body of Crispina Saludo had been shipped to Mexico. The casket containing the remains of Crispina Saludo was transshipped from Mexico and arrived in San Francisco the following day on board American Airlines. It was immediately loaded by PAL on its flight for Manila.-CMAS was the ONE responsible for the switching or mix-up of the two bodies at the Chicago Airport terminal, and started a chain reaction of the misshipment of the body of Crispina Saludo and a one-day delay in the delivery thereof to its destination.40-no amount of inspection by respondent airline companies could have guarded against the switching that had already taken place. -it is the duty of the carrier to make inquiry as to the general nature of the articles shipped and of their value before it consents to carry them; it is not bound to inquire particularly about them in order to take advantage of a false classification and where a shipper expressly represents the contents of a package to be of a designated character, it is not the duty of the carrier to ask for a repetition of the statement nor disbelieve it and open the box and see for itself.41-However, where a common carrier has reasonable ground to suspect that the offered goods are of a dangerous or illegal character, the carrier has the right to know the character of such goods and to insist on an inspection, if reasonable and practical under the circumstances, as a condition of receiving and transporting such goods.42-It can safely be said then that a common carrier is entitled to fair representation of the nature and value of the goods to be carried, with the concomitant right to rely thereon, and further noting at this juncture that a carrier has no obligation to inquire into the correctness or sufficiency of such information.-In the case at bar, private respondents had no reason whatsoever to doubt the truth of the shipper's representations. The reliance thereon by private respondents was reasonable and, for so doing, they cannot be said to have acted negligently. Likewise, no evidence was adduced to suggest even an iota of suspicion that the cargo presented for transportation was anything other than what it was declared to be.While we agree that the actual participation of CMAS has been sufficiently and correctly established, to hold that it acted as agent for private respondents would be both an inaccurate appraisal and an unwarranted categorization of the legal position it held in the entire transaction.It bears repeating that CMAS was hired to handle all the necessary shipping arrangements for the transportation of the human remains of Crispina Saludo to Manila., CMAS may accordingly be classified as a forwarder which, by accepted commercial practice, is regarded as an agent of the shipper and not of the carrier. As such, it merely contracts for the transportation of goods by carriers, and has no interest in the freight but receives compensation from the shipper as his agent.46-the entire chain of events which culminated in the present controversy was not due to the fault or negligence of private respondents. Rather, the facts of the case would point to CMAS as the culprit. The contention that there was contractual breach on the part of private respondents is founded on the postulation that there was ambiguity in the terms of the airway bill, hence petitioners' insistence on the application of the rules on interpretation of contracts and documents. We find no such ambiguity. The terms are clear enough as to preclude the necessity to probe beyond the apparent intendment of the contractual provisions.The hornbook rule on interpretation of contracts consecrates the primacy of the intention of the parties, the same having the force of law between them. When the terms of the agreement are clear and explicit, that they do not justify an attempt to read into any alleged intention of the parties, the terms are to be understood literally just as they appear on the face of the contract.49 Turning to the terms of the contract at hand, as presented by PAL Air Waybill No. 079-01180454, respondent court approvingly quoted the trial court's disquisition on the aforequoted condition appearing on the reverse side of the airway bill and its disposition of this particular assigned error:The foregoing stipulation fully answers plaintiffs' objections to the one-day delay and the shipping of the remains in TWA Flight 603 instead of TWA Flight 131. Under the stipulation, parties agreed that no time was fixed to complete the contract of carriage and that the carrier may, without notice, substitute alternate carriers or aircraft. The carrier did not assume the obligation to carry the shipment on any specified aircraft.xxx xxx xxxFurthermore, contrary to the claim of plaintiffs-appellants, the conditions of the Air Waybill are big enough to be read and noticed. Also, the mere fact that the cargo in question was shipped in TWA Flight 603, a flight earlier on the same day than TWA Flight 131, did not in any way cause or add to the one-day delay complained of and/or the switching or mix-up of the bodies.53As previously stated, we find no ambiguity in the contract subject of this case that would call for the application of said rule. In any event, the contract hasprovidedfor such a situation by explicitly stating that the above condition remains effective "notwithstanding that the same (fixed time for completion of carriage, specified aircraft, or any particular route or schedule) may be stated on the face hereof." While petitioners hinge private respondents' culpability on the fact that the carrier "certifies goods described below were received for carriage," they may have overlooked that the statement on the face of the airway bill properly and completely reads Carrier certifies goods described below were received for carriagesubject to the Conditions on the reverse hereofthe goods then being in apparent good order and condition except as noted hereon.55(Emphasis ours.)Private respondents further aptly observe that the carrier's certification regarding receipt of the goods for carriage "was of a smaller print than the condition of the Air Waybill, including Condition No. 5 and thus if plaintiffs-appellants had recognized the former, then with more reason they were aware of the latter.56In the same vein, it would also be incorrect to accede to the suggestion of petitioners that the typewritten specifications of the flight, routes and dates of departures and arrivals on the face of the airway bill constitute a special contract which modifies the printed conditions at the back thereof. We reiterate that typewritten provisions of the contract are to be read and understood subject to and in view of the printed conditions, fully reconciling and giving effect to the manifest intention of the parties to the agreement.The oft-repeated rule regarding a carrier's liability for delay is that in the absence of a special contract, a carrier is not an insurer against delay in transportation of goods. When a common carrier undertakes to convey goods, the law implies a contract that they shall be delivered at destination within a reasonable time, in the absence, of any agreement as to the time of delivery.57But where a carrier has made an express contract to transport and deliver property within a specified time, it is bound to fulfill its contract and is liable for any delay, no matter from what cause it may have arisen.58This result logically follows from the well-settled rule that where the law creates a duty or charge, and the party is disabled from performing it without any default in himself, and has no remedy over, then the law will excuse him, but where the party by his own contract creates a duty or charge upon himself, he is bound to make it good notwithstanding any accident or delay by inevitable necessity because he might haveprovidedagainst it by contract. Whether or not there has been such an undertaking on the part of the carrier to be determined from the circumstances surrounding the case and by application of the ordinary rules for the interpretation of contracts.59-common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation. Said rights and obligations are created by a specific contract entered into by the parties.There is no showing by plaintiffs that such a special or specific contract had been entered into between them and the defendant airline companies.-the acceptance of a bill of lading without dissent raises a presumption that all terms therein were brought to the knowledge of the shipper and agreed to by him, and in the absence of fraud or mistake, he is estopped from thereafter denying that he assented to such terms. This rule applies with particular force where a shipper accepts a bill of lading with full knowledge of its contents, and acceptance under such circumstances makes it a binding contract. =In order that any presumption of assent to a stipulation in a bill of lading limiting the liability of a carrier may arise, it must appear that the clause containing this exemption from liability plainly formed a part of the contract contained in the bill of lading. A stipulation printed on the back of a receipt or bill of lading or on papers attached to such receipt will be quite as effective as if printed on its face, if it is shown that the consignor knew of its terms. Thus, where a shipper accepts a receipt which states that its conditions are to be found on the back, such receipt comes within the general rule, and the shipper is held to have accepted and to be bound by the conditions there to be found.61-Grantingarguendothat Condition No. 5 partakes of the nature of a contract of adhesion and as such must be construed strictly against the party who drafted the same or gave rise to any ambiguity therein, it should be borne in mind that a contract of adhesion may be struck down as void and unenforceable, for being subversive of public policy, only when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal footing. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, be gives his consent. Accordingly, petitioners, far from being the weaker party in this situation, duly signified their presumed assent to all terms of the contract through their acceptance of the airway bill and are consequently bound thereby. It cannot be gainsaid that petitioners' were not without several choices as to carriers in Chicago with its numerous airways and airliner servicing the same.=A common carrier undertaking to transport property has the implicit duty to carry and deliver it within reasonable time, absent any particular stipulation regarding time of delivery, and to guard against delay. In case of any unreasonable delay, the carrier shall be liable for damages immediately and proximately resulting from such neglect of duty.64As found by the trial court, the delay in the delivery of the remains of Crispina Saludo, undeniable and regrettable as it was, cannot be attributed to the fault, negligence or malice of private respondents=We are further convinced that when TWA opted to ship the remains of Crispina Saludo on an earlier flight, it did so in the exercise of sound discretion and with reasonable prudence, in order to assure that the shipment would be received in San Francisco in sufficient time for transfer to PAL. Precisely, private respondent TWA knew of the urgency of the shipment by reason of this notation on the lower portion of the airway bill: "All documents have been certified. Human remains of Cristina (sic) Saludo. Please return bag first available flight to SFO."

BENITO MACAM vs.COURT OF APPEALS, CHINA OCEAN SHIPPING CO., and/or WALLEM PHILIPPINES SHIPPING, INC.,respondents.FACTS: On 4 April 1989 petitioner Benito Macam, doing business under the name and styleBen-Mac Enterprises, shipped on board the vesselNen Jiang, owned and operated by respondent China Ocean Shipping Co., through local agent respondent Wallem Philippines 3,500 boxes of watermelons valued at $5,950.00 covered by Bill of Lading No. HKG 99012 and exported through Letter of Credit No. HK 1031/30 issued by National Bank of Pakistan, Hongkong (hereinafter PAKISTAN BANK) 1,611 boxes of fresh mangoes with a value of $14,273.46 covered by Bill of Lading No. HKG 99013 and exported through Letter of Credit No. HK 1032/30 also issued by PAKISTAN BANK. The Bills of Lading contained the following pertinent provision:"One of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order. The shipment was bound for Hongkong with PAKISTAN BANK as consignee and Great Prospect Company of Kowloon, Hongkong (hereinafter GPC) as notify party. On 6 April 1989, per letter of credit requirement, copies of the bills of lading and commercial invoices were submitted to petitioner's depository bank, Consolidated Banking Corporation (hereinafter SOLIDBANK), which paid petitioner in advance the total value of the shipment of US$20,223.46. shipment was delivered by respondent WALLEM directly to GPC, not to PAKISTAN BANK, and without the required bill of lading having been surrendered. GPC failed to pay PAKISTAN BANK such that the latter, still in possession of the original bills of lading, refused to pay petitioner through SOLIDBANK.Since SOLIDBANK already pre-paid petitioner the value of the shipment, it demanded payment from respondent WALLEM through five (5) letters but was refused. Macam allegedly constrained to return the amount involved to SOLIDBANK, then demanded payment from respondent WALLEM in writing but to no avail. Ben Mac sought collection of the value of the shipment of US$20,223.46 or its equivalent ofP546,033.42 from respondents before the Regional Trial Court of Manila, based on delivery of the shipment to GPC without presentation of the bills of lading and bank guarantee. Respondents contended that the shipment was delivered to GPC without presentation of the bills of lading and bank guarantee per request of petitioner himself because the shipment consisted of perishable goods. As a standard maritime practice, when immediate delivery is of the essence, for the shipper to request or instruct the carrier to deliver the goods to the buyer upon arrival at the port of destination without requiring presentation of the bill of lading as that usually takes time. for the duration of their two-year business relationship with petitioner concerning similar shipments to GPC deliveries were effected without presentation of the bills of lading.[4]Respondents advanced next that the refusal of PAKISTAN BANK to pay the letters of credit to SOLIDBANK was due to the latter's failure to submit a Certificate of Quantity and Quality.Respondents counterclaimed for attorneys fees and costs of suit. RTC: trial court ordered respondents to pay the petitioner, jointly and severally holding that respondents breached the provision in the bill of lading requiring that "one of the Bills of Lading must be surrendered duly endorsed in exchange for the goods or delivery order," The trial court added that the shipment should not have been released to GPC at all since the instruction contained in the telex was to arrange delivery to the respective consignees and not to any party.The trial court observed that the only role of GPC in the transaction as notify party was precisely to be notified of the arrival of the cargoes in Hongkong so it could in turn duly advise the consignee. Court of Appeals ruled otherwise by reason of previous similar transactions between the parties, shipped cargoes were sometimes actually delivered not to the consignee but to notify party GPC without need of the bills of lading or bank guarantee.[6]Moreover, the bills of lading were viewed by respondent court to have been properly superseded by the telex. GPC was listed as a consignee in the telex.It observed further that the demand letter of petitioner to respondents never complained of misdelivery of goods.Lastly, respondent court found that petitioners claim of having reimbursedthe amount involved to SOLIDBANK was unsubstantiated. Petitioner: that the shipment was not delivered to the consignee as stated in the bill of lading or to a party designated or named by the consignee constitutes a misdelivery thereof. Moreover, petitioner argues that from the text of the telex, assuming there was such an instruction, the delivery of the shipment without the required bill of lading or bank guarantee should be made only to the designated consignee, referring to PAKISTAN BANK. SUPREME COURT: It is clear from the allegation in his complaint that petitioner does not deal with misdelivery of the cargoes but of delivery to GPC without the required bills of lading and bank guarantee Art. 1736.The extraordinary responsibility of the common carriers lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of article 1738.[12] extraordinary responsibility of the common carriers lasts until actual or constructive delivery of the cargoes to the consigneeor to the person who has a right to receive them. PAKISTAN BANK was indicated in the bills of lading as consignee whereas GPC was the notify party.However, in the export invoices GPC was clearly named as buyer/importer.GPC as buyer/importer which, conformably with Art. 1736 had, other than the consignee, had the right to receive them. ISSUE: whether respondents are liable to petitioner for releasing the goods to GPC without the bills of lading or bank guarantee. IS GPC considered a consignee? petitioner has been transacting with GPC as buyer/importer for around two (2) or three (3) years already for twice or thrice a week.It has been the practice of petitioner to request the shipping lines to immediately release perishable cargoes such as watermelons and fresh mangoes through telephone calls by himself or his people. In transactions covered by a letter of credit, bank guarantee is normally required by the shipping lines prior to releasing the goods. But in telegraphic transfers, petitioner dispenses with the bank guarantee because the goods are already fully paid. In his several years of business relationship with GPC and respondents, there was not a single instance when the bill of lading was first presented before the release of the cargoes. He declared that it was his practice to ask the shipping lines to immediately release shipment of perishable goods through telephone calls by himself or his people. He no longer required presentation of a bill of lading nor of a bank guarantee as a condition to releasing the goods in case he was already fully paid. Thus, taking into account that subject shipment consisted of perishable goods and SOLIDBANK pre-paid the full amount of the value thereof, it is not hard to believe the claim of respondent WALLEM that petitioner indeed requested the release of the goods to GPC without presentation of the bills of lading and bank guarantee. Analysis of the telex in its entirety arrives at the conclusion that the consignee referred to was not PAKISTAN BANK but GPC to implement the said telex instruction, the delivery of the shipment must be to GPC, the notify party or real importer/buyer of the goods and not the Pakistani Bank since the latter can very well present the original Bills of Lading in its possession.Likewise, if it were the Pakistani Bank to whom the cargoes were to be strictly delivered, it will no longer be proper to require a bank guarantee as a substitute for the Bill of Lading.To construe otherwise will render meaningless the telex instruction. petitioner failed to substantiate his claim that he returned to SOLIDBANK the full amount of the value of the cargoes.It is not far-fetched to entertain the notion, that he merely accommodated SOLIDBANK in order to recover the cost of the shipped cargoes from respondents.We note that it was SOLIDBANK which initially demanded payment from respondents through five (5) letters.SOLIDBANK must have realized the absence of privity of contract between itself and respondents.That is why petitioner conveniently took the cudgels for the bank. Petition denied.SEA-LAND SERVICE, INC.,petitioner,vs. INTERMEDIATE APPELLATE COURT and PAULINO CUE, doing business under the name and style of "SEN HIAP HING,"respondents. The main issue here is whether or not the consignee of seaborne freight is bound by stipulations in the covering bill of lading limiting to a fixed amount the liability of the carrier for loss or damage to the cargo where its value is not declared in the bill.

January 8, 1981, Sea-Land Service, Inc. (Sea-Land), a foreign shipping and forwarding company licensed to do business in the Philippines, received from Seaborne Trading Company in Oakland, California a shipment consigned to Sen Hiap Hing the business name used by Paulino Cue in the wholesale and retail trade located on Borromeo and Plaridel Streets, Cebu City.

The shipper not having declared the value of the shipment, no value was indicated in the bill of lading.

Based on volume measurements Sea-land charged the shipper the total amount of US$209.28

The shipment was loaded on board the MS Patriot, a vessel owned and operated by Sea-Land, for discharge at the Port Of Cebu.

The shipment arrived in Manila on February 12, 1981, and there discharged in Container No. 310996 into the custody of the arrastre contractor and the customs and port authorities.3

Sometime between February 13 and 16, 1981, after the shipment had been transferred, along with other cargoes in South Harbor, Manila, awaiting trans-shipment to Cebu, it was stolen by pilferers and has never been recovered.4

Paulino Cue made formal claim upon Sea-Land for the value of the lost shipment allegedly amounting to P179,643.48.5Sea-Land offered to settle for US$4,000.00, or its then Philippine peso equivalent of P30,600.00. asserting that said amount represented its maximum liability for the loss of the shipment under the package limitation clause in the covering bill of lading. Cue rejected the offer and thereafter brought suit for damages against Sea-Land in the then Court of First Instance of Cebu, Branch X.7 CFI rendered judgment in favor of Cue, sentencing Sea-Land to pay him P186,048.00 representing the Philippine currency value of the lost cargo, P55,814.00 for unrealized profit with one (1%) percent monthly interest from the filing of the complaint until fully paid, P25,000.00 for attorney's fees and P2,000.00 as litigation expenses.8 CA however affirmed the decision of the Trial Court xxx in all its parts. To begin with, there is no question of the right, in principle, of aconsigneein a bill of lading to recover from the carrier or shipper for loss of, or damage to, goods being transported under said bill ,although that document may have been as in practice it oftentimes is drawn up only by theconsignor and the carrierwithout the intervention of theconsignee.InMendoza vs. Philippine Air Lines, Inc.11the Court delved at some length into the reasons behind this when, upon a claim made by theconsigneeof a motion picture film shipped by air thathe was never a party to the contract of transportation and was a complete stranger thereto,it said:Since the liability of a common carrier for loss of or damage to goods transported by it under a contract of carriage is governed by the laws of the country of destinationand the goods in question were shipped from the United States to the Philippines, the liability of petitioner Sea-Land to the respondent consignee is governed primarily by the Civil Code, suppletorily by the Code of Commerce and special lawssuch as Carriage of Goods by Sea Act, U.S. Public Act No. 521 which was made applicable to all contracts for the carriage of goods by sea to and from Philippine ports in foreign trade by Commonwealth Act No. 65, approved on October 22, 1936. Sec. 4(5) of said Act in part reads:(5) Neither the carrier nor the ship shall in any event be or become liable for any loss or damage to or in connection with the transportation of goods in an amount exceeding $500 per package lawful money of the United States, or in case of goods not shipped in packages, per customary freight unit, or the equivalent of that sum in other currency, unless the nature and value of such goods have been declared by the shipper before shipment and inserted in the bill of lading. This declaration, if embodied in the bill of lading, shall be prima facie evidence, but shall not be conclusive on the carrier.By agreement between the carrier, master, or agent of the carrier, and the shipper another maximum amount than that mentioned in this paragraph may be fixed: Provided, That such maximum shall not be less than the figure above named. In no event shall the carrier be liable for more than the amount of damage actually sustained.xxx xxx xxxClause 22, first paragraph, of the long form bill of lading customarily issued by Sea-Land to its shipping clients states the same. And in its second paragraph, the bill states:if the actual value of the goods per package or per customary freight unit shall exceed such declared value, the value shall nevertheless be deemed to be declared value and the carrier's liability, if any, shall not exceed the declared value and any partial loss or damage shall be adjusted pro rata on the basis of such declared value.Article 1766 of the Civil Code expressly subjects the rights and obligations of common carriers to the provisions of the Code of Commerce and of special laws in matters not regulated by said (Civil) CodeNothing in the NCC prohibits agreements between shipper and carrier limiting the latter's liability for loss of or damage to cargo shipped under contracts of carriage; it is also quite clear that said Code in fact has agreements of such character in contemplation in providing, in its Articles 1749 and 1750, that:ART. 1749 A stipulation that the common carrier's liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.ART. 1750. A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.Nothing contained in section 4(5) of the Carriage of Goods by Sea Act already quoted is repugnant to or inconsistent with any of the just-cited provisions of the Civil Code. even if said section 4(5) of the Carriage of Goods by Sea Act did not exist, the validity and binding effect of the liability limitation clause in the bill of lading here are nevertheless fully sustainable on the basis alone of the cited Civil Code provisions. That said stipulation is just and reasonable is arguable from the fact that it echoes Art. 1750 itself in providing a limit to liability only if a greater value is not declared for the shipment in the bill of lading. The just and reasonable character of such stipulation is implicit in it giving the shipper or owner the option of avoiding acrrual of liability limitation by the simple and surely far from onerous expedient of declaring the nature and value of the shipment in the bill of lading. And since the shipper here has not been heard to complaint of having been "rushed," imposed upon or deceived in any significant way into agreeing to ship the cargo under a bill of lading carrying such a stipulation, there is simply no ground for assuming that its agreement thereto was not as the law would require, freely and fairly sought and given.- the right of a party to recover for loss of a shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier, springs from either a relation of agency that may exist between him and the shipper or consignor, or his status as a stranger in whose favor some stipulation is made in said contract, and who becomes a party thereto when he demands fulfillment of that stipulation, in this case the delivery of the goods or cargo shipped. In neither capacity can he assert personally, in bar to any provision of the bill of lading, the alleged circumstance that fair and free agreement to such provision was vitiated by its being in such fine print as to be hardly readable. -no doubt or equivocation about the validity and enforceability of freely-agreed-upon stipulations in a contract of carriage or bill of lading limiting the liability of the carrier to an agreed valuation unless the shipper declares a higher value and inserts it into said contract or bill. -The issue of alleged deviation is also settled by Clause 13 of the bill of lading which expressly authorizes trans-shipment of the goods at any point in the voyage in these terms:13. THROUGH CARGO AND TRANSSHIPMENT. The carrier or master, in the exercise of its or his discretion and although transshipment or forwarding of the goods may not have been contemplated or provided for herein, may at port of discharge or any other place whatsoever transship or forward the goods or any part thereof by any means at the risk and expense of the goods and at any time, whether before or after loading on the ship named herein and by any route, whether within or outside the scope of the voyage or beyond the port of discharge or destination of the goods and without notice to the shipper or consignee. The carrier or master may delay such transshipping or forwarding for any reason, including but not limited to awaiting a vessel or other means of transportation whether by the carrier or others.-Need not to offer any other justification for offloading the shipment in question in Manila for transshipment to Cebu City, the port of destination stipulated in the bill of lading. Sealand only directly serves the Port of Manila from abroad in the usual course of voyage of its carriers, hence its maintenance of arrangements with a local forwarder. Aboitiz and Company, for delivery of its imported cargo to the agreed final point of destination within the Philippines, such arrangements not being prohibited, but in fact recognized, by law.18Cue admitted that several times in the past shipments had been delivered to him through Sea-Land,20from which the assumption may fairly follow that by the time of the consignment now in question, he was already reasonably apprised of the usual terms covering contracts of carriage with said petitioner.- provisions of the Carriage of Goods by Sea Act on package limitation [sec 4(5) of the Act hereinabove referred to] are as much a part of a bill of lading as though actually placed therein by agreement of the parties.21-Cue by making claim for loss on the basis of the bill of lading, to all intents and purposes accepted said bill. Having done so, he becomes bound by all stipulations contained therein whether on the front or the back thereof. cannot elude its provisions simply because they prejudice him and take advantage of those that are beneficial. -the fact that respondent shipped his goods on board the ship of petitioner and paid the corresponding freight thereon shows that he impliedly accepted the bill of lading which was issued in connection with the shipment, and so it may be said that the same is finding upon him as if it had been actually signed by him or by any other person in his behalf. -as early as on April 22, 1981, Sea-Land had offered to settle his claim for US$4,000.00, the limit of said carrier's liability for loss of the shipment under the bill of lading. all that is justly due said respondent. Sea-Land, which offered that amount in good faith as early as six years ago, should, not be made to pay at the current conversion rate of the dollar to the peso, it is just and fair that Sea-Land's dollar obligation be convertible at the same rate which is 1$ to P8.-Thus, bill of lading limiting Sea-Land's liability for loss of or damage to the shipment covered by said bill to US$500.00 per package is held valid and binding on private respondent. Since shipment consisted of eight (8) cartons or packages, for the loss of which Sea-Land is therefore liable in the aggregate amount of US$4,000.00/ P32,000.00, at the conversion rate of P8.00 to $1.00.

CITADEL LINES, INCvs.COURT OF APPEALS*and MANILA WINE MERCHANTS, INC.,respondents.Petitioner Citadel Lines, Inc. is the general agent of the vessel "Cardigan Bay/Strait Enterprise," while respondent Manila Wine Merchants, Inc. is the importer of the subject shipment of Dunhill cigarettes from England.-March 17, 1979, the vessel "Cardigan Bay/Strait Enterprise" loaded on board at Southampton, England, for carriage to Manila, 180 Filbrite cartons of mixed British manufactured cigarettes called "Dunhill International Filter" and "Dunhill International Menthol," as evidenced by Bill of Lading No. 706213742and Bill of Lading No. 706086803of the Ben Line Containers Ltd. -The shipment arrived at the Port of Manila Pier 13, on April 18, 1979 in container van No. BENU 204850-9. And was received by E. Razon, Inc. as ARRASTRE.-On April 30, 1979, the container van, which contained two shipments was stripped. One shipment was delivered and the other shipment consisting of the imported British manufactured cigarettes was palletized. -Due to lack of space at the Special Cargo Coral, the aforesaid cigarettes were placed in two containers with two pallets in, the original container, and four pallets in another container. both containers duly padlocked and sealed by the representative of the Citadel.-One morning, Citadels headchecker discovered that container van with 4 pallets of cigarettes had a different padlock and the seal was tampered with. -It was reported to Jose G. Sibucao, Pier Superintendent, Pier 13, and upon verification, it was found that 90 cases of imported British manufactured cigarettes were missing. -it was revealed that the cargo in question was not formally turned over to the ARRASTRE by the CARRIER but was kept inside container van which was padlocked and sealed by the representatives of the CARRIER without any participation of the ARRASTRE.-Manila Wine filed a formal claim with the CARRIER, demanding the payment of P315,000.00 representing the market value of the missing cargoes. -The CARRIERadmitted the loss but alleged that the same occurred at Pier 13, an area absolutely under the control of the ARRASTRE.-CONSIGNEE filed a formal claim,with the ARRASTRE, demanding payment of the value of the goods but said claim was denied.-Lower court: exonerating the ARRASTRE of any liability on the ground that the subject container van was not formally turned over to its custody, and adjudging the CARRIER liable.-CA: affirmed Lower courtISSUES: -Whether the loss occurred while the cargo in question was in the custody of E. Razon, Inc. or of Citadel Lines, Inc; and-Whether the stipulation limiting the liability of the carrier contained in the bill of lading is binding on the consignee.- the subject cargo which was placed in a container van, padlocked and sealed by the representative of the CARRIER which was still in its possession and control when the loss occurred, there having been no formal turnover of the cargo to the ARRASTRE because of the lack for space-The CARRIER is now estopped from claiming otherwise.-Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case. If the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extra ordinary diligence as required in Article 1733 of the Civil Code.-The duty of the consignee is to prove merely that the goods were lost. Thereafter, the burden is shifted to the carrier to prove that it has exercised the extraordinary diligence required by law. extraordinary responsibility lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee or to the person who has the right to receive them.-in this case, shipment was lost while it was still in the custody of herein petitioner CARRIER, and it failed to prove that the loss was occasioned by an excepted cause, the inescapable conclusion is that the CARRIER was negligent and should be held liable therefor.-however, find the award of damages in the amount of P312,800.00 for the value of the goods lost, based on the alleged market value thereof, to be erroneous. -under Clause 6 of the aforementioned bills of lading issued by the CARRIER that its liability is limited to $2.00 per kilo. a stipulation limiting the liability of the carrier to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.-Further, a contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been fairly and freely agreed upon.15- the value of the goods shipped does not appear in the bills of lading.16Hence, the stipulation on the carrier's limited liability applies. it is just and reasonable under the circumstances and have been fairly and freely -Since 90 cartons were lost and the weight of said cartons is 2,233.80 kilos, at $2.00 per kilo the CARRIER's liability amounts to only US$4,467.60.

EVERETT STEAMSHIP CORPORATION, vs.COURT OF APPEALS and HERNANDEZ TRADING CO. INC.,-Hernandez Trading imported three crates of bus spare parts marked as MARCO12,13 and 14 from its supplier, Maruman Trading Company, Ltd. (Maruman Trading), a foreign corporation based in Inazawa, Aichi, Japan.-The crates were shipped from Nagoya, Japan to Manila on board ADELFA EVERETTE, a vesselowned by petitioners principal, Everett Orient Lines. -covered byBill of Lading No. NGO53MN.-Upon arrival at the port of Manila, it was discovered that the crate marked MARCO C/No. 14 was missing.-Hernandez Trading made a formal claim upon petitioner for the value of the lost cargo amounting to 1,552,500.00 Yen.-However, petitioner offered to pay only 100,000.00 Yen, the maximum amount stipulated under of the covering bill of lading which limits the liability of petitioner.-respondent rejected the offer and instituted a suit for collection against petitioner before the Regional Trial Court of Caloocan City.-RTC: rendered judgment[2]in favor of private Hernandez ordering Everette to pay:(a) Y1,552,500.00; (b) Y20,000.00 or its peso because of admission of loss and its failure to overcome the presumption of negligence and fault, the Court is of the view that the requirements of said article 1750 have not been met.The fact that those conditions are printed at the back of the bill of lading in letters so small that they are hard to read would not warrant the presumption that the plaintiff or its supplier was aware of these conditions such that he had fairly and freely agreed to these conditions.-CA affirmed the trial courts findings with the additional observation that private respondent can not be bound by the terms and conditions of the bill of lading because it was notprivy to the contract of carriage.Even assumingarguendothat the shipper Maruman Trading Co., Ltd. accepted the terms of the bill of lading when it delivered the cargo to the appellant, still it does not necessarily follow that Hernandez Trading Company as consignee is bound thereby considering that the latter was never privy to the shipping contract.Never having entered into a contract ,Hernandez should therefore not be bound by any of the terms and conditions in the bill of lading and may recover the full value of the shipment lost.-ISSUES: 1) Is the consent of the consignee to the terms and conditions of the bill of lading is necessary to make such stipulations binding upon it; (2) Does the carriers limited package liability as stipulated in the bill of lading apply in the instant case; (3) Can the private respondent fully recover the full alleged value of its lost cargo.-SC: ART. 1749.A stipulation that the common carriers liability is limited to the value of the goods appearing in the bill of lading, unless the shipper or owner declares a greater value, is binding.ART. 1750.A contract fixing the sum that may be recovered by the owner or shipper for the loss, destruction, or deterioration of the goods is valid, if it is reasonable and just under the circumstances, and has been freely and fairly agreed upon.-The bill of lading subject of the present controversy specifically provides, among others:The carrier shall not be liable for any loss of or any damage to or in any connection with, goods in an amount exceeding One Hundred Thousand Yen in Japanese Currency (Y100,000.00) or its equivalent in any other currency per package or customary freight unit (whichever is least)unless the value of the goods higher than this amount is declared in writing by the shipper before receipt of the goods by the carrier and inserted in the Bill of Lading and extra freight is paid as required.(Emphasis supplied)The above stipulations are, to our mind, reasonable and just.In the bill of lading, the carrier made it clear that its liability would only be up to One Hundred Thousand (Y100,000.00) Yen.However, the shipper, Maruman Trading,had the option to declare a higher valuation if the value of its cargo was higher than the limited liability of the carrier.Considering that the shipper did not declare a higher valuation, it had itself to blame for not complying with the stipulations.-the contention that the private respondent could not have fairly and freely agreed to the limited liability clause in the bill of lading because the said conditions were printed in small letters does not make the bill of lading invalid.-contracts of adhesion are not invalidperseandcontracts of adhesionwherein one party imposes a ready-made form of contract on the other x xx are contracts not entirely prohibited.The one who adheres to the contract is in reality free to reject it entirely; if he adheres he gives his consent. The stipulations in contracts of adhesion are valid and binding.-Article 24 of the Civil Code which mandates that (i)n all contractual, property or other relations,when one of the parties is at a disadvantage on account of his moral dependence, ignorance, indigence, mental weakness, tender age or other handicap, the courts must be vigilant for his protection.-The shipper, Maruman Trading, we assume, has been extensively engaged in the trading business.It can not be said to be ignorant of the business transactions and should know the stipulations in the bill of lading and there it should have declared a higher valuation of the goods shipped. -even if the consignee was not a signatory to the contract of carriage between the shipper and the carrier, the consignee can still be bound by the contract. -right of a party in the same situation as respondent here, to recover for loss of a shipment consigned to him under a bill of lading drawn up only by and between the shipper and the carrier, springs from either a relation of agency that may exist between him and the shipper or consignor, or his status as stranger in whose favor some stipulation is made in said contract, and who becomes a party thereto when he demands fulfillment of that stipulation, in this case the delivery of the goods or cargo shipped. -a similar package limitation clause was printed in the smallest type on the back of the bill of lading, it nonetheless ruled that the consignee was bound thereby on the strength of authority holding that such provisions on liability limitation are as much a part of a bill of lading as though physically in it and as though placed therein by agreement of the parties.-When Hernandez formally claimed reimbursement for the missing goods from petitioner and subsequently filed a case against the latter based on the very same bill of lading, it(private respondent) accepted the provisions of the contract and thereby made itself a party thereto, or at least has come to court to enforce it.[9]-Thus, private respondent cannot now reject or disregard the carriers limited liability stipulation in the bill of lading.He is now bound by the whole stipulations in the bill of lading and must respect the same.-To defeat the carriers limited liability, of the bill of lading requires that the shipper should havedeclared in writing a higher valuationof its goods before receipt thereof by the carrier andinsert the said declaration in the bill of lading, with the extra freight paid.-These requirements in the bill of lading were never complied with by the shipper, hence, the liability of the carrier under the limited liability clause stands. -the liability of petitioner for the loss of the cargo is limited to One Hundred Thousand (Y100,000.00) Yen, pursuant to Clause 18 of the bill of lading.SWEET LINES, INC.,petitioner,vs.HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental Branch VII, LEOVIGILDO TANDOG, JR., and ROGELIO TIRO,respondents.Private respondents Atty. Leovigildo Tandog and Rogelio Tiro, a contractor by professions, bought tickets Nos. 0011736 and 011737 for Voyage 90 on December 31, 1971 at the branch office of Sweet Lines, a shipping company transporting inter-island passengers and cargoes, at Cagayan de Oro City. Respondents were to board petitioner's vessel, "Sweet Hope" bound for Tagbilaran City but Upon learning that the vessel was not proceeding to Bohol, since many passengers were bound for Surigao, private respondents per advice, went to the branch office for proper relocation to M/S "Sweet Town".Because the said vessel was already filled to capacity, they were forced to agree "to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard. Private respondents alleged that:1) they were, during the trip," "exposed to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits,"2) and that the tickets they bought at Cagayan de Oro City for Tagbilaran were not honored and they were constrained to pay for other tickets. - private respondents sued petitioner for damages and for breach of contract of carriage before CFI of Misamis Oriental.2-Petitioner moved to dismiss the complaint on the ground of improper venue. This motion was premised on the condition printed at the back of the tickets, i.e., Condition No. 14, which reads:14. It is hereby agreed and understood that any and all actions arising out of the conditions and provisions of this ticket, irrespective of where it is issued, shall be filed in the competent courts in the City of Cebu.3The motion was denied by the trial court.-Hence, this instant petition for prohibition for preliminary injunction, 'alleging that the respondent judge has departed from the accepted and usual course of judicial preoceeding" and "had acted without or in excess or in error of his jurisdicton or in gross abuse of discretion.6ISSUE: Is Condition No. 14 printed at the back of the petitioner's passage tickets purchased by private respondents, which limits the venue of actions arising from the contract of carriage to the Court of First Instance of Cebu, valid and enforceable-Petitioner contends that Condition No. 14 is valid and enforceable, since private respondents acceded to it when they purchased passage tickets at its Cagayan de Oro branch office and took its vessel M/S "Sweet Town" for passage to Tagbilaran, Bohol -private respondents claim that Condition No. 14 is not valid, that the same is not an essential element of the contract of carriage, being in itself a different agreement which requires the mutual consent of the parties to it; that they had no say in its preparation, the existence of which they could not refuse, hence, they had no choice but to pay for the tickets and to avail of petitioner's shipping facilities out of necessity; -There is no question that there was a valid contract of carriage entered into by petitioner and private respondents and that the passage tickets, upon which the latter based their complaint, are the best evidence thereof. All the essential elements of a valid contract, i.e., consent, cause or consideration and object, are present. -"Condition No. 14" which is in issue in this case printed at the back of the passage tickets, these are commonly known as "contracts of adhesion," the validity and/or enforceability of which will have to be determined by the peculiar circumstances obtaining in each case and the nature of the conditions or terms sought to be enforced. -private respondents, who cannot change the same and who are thus made to adhere thereto on the "take it or leave it" basis certain guidelines in the determination of their validity and/or enforceability have been formulated -greater strictness and vigilance on the part of the courts of justice with a view to protecting the weaker party from abuses and imposition, and prevent their becoming traps for the unwary.In all contractual property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance indigence, mental weakness, tender age and other handicap, the courts must be vigilant for hisprotection.19SC: We find and hold that Condition No. 14 printed at the back of the passage tickets should be held as void and unenforceable for the following reasons:1) First, it is not just and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets, 2) second, Condition No. 14 subverts the public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and interests of innumerable passengers who will have to file suits against petitioner only in the City of Cebu.Under these circumstances, it is hardly just and proper to expect the passengers to examine their tickets received from crowded/congested counters, more often than not during rush hoursit should be noted that Condition No. 14 was prepared solely by the petitioner, respondents had no say in its preparation. Neither did the latter have the opportunity to take the into account prior to the purchase of their tickets. their alleged adhesion is presumed only from the fact that they purchased the tickets.It should also be stressed that shipping companies are franchise holders of certificates of public convenience and therefore, posses a virtual monopoly over the business of transporting passengers between the ports covered by their franchise. may thus dictate their terms of passage, leaving passengers with no choice but to buy their tickets and avail of their vessels and facilities.the bulk of those who board these inter-island vested come from the low-income groups and are less literate, and who have little or no choice but to avail of petitioner's vessels.- Condition No. 14 is subversive of public policy on transfers of venue of actions. For, although venue may be changed or transferred from one province to another by agreement of the parties in writing t to Rule 4, Section 3, of the Rules of Court, such an agreement will not be held valid where it practically negates the action of the claimants, such as the private respondents herein. The philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote21the ends of justice.

HERMINIO L. NOCUM,plaintiff-appellee,vs. LAGUNA TAYABAS BUS COMPANY,defendant-appellant.Nocum who was a passenger in Laguna Tayabas Bus Company Bus No. 120 then making a trip within the barrio of Dita, Municipality of Bay, Laguna, was injured as a consequence of the explosion of firecrackers, contained in a box, loaded in said bus and declared to its conductor as containing clothes and miscellaneous items by a co-passenger. CFI sentenced Laguna Tayabas to pay Nocum damages because it did not observe EOD of a very cautious man as required by the NCC.ART. 1733. Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case.Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and 1745, Nos. 5, 6, and 7, while the extraordinary diligence for the safety of the passengers is further set forth in articles 1755 and 1756.ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons, with a due regard for all the circumstances.ART 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in articles 1733 and 1755.ISSUE:According to Severino Andaya, a witness for the plaintiff, a man with a box went up the baggage compartment of the bus where he already was and said box was placed under the seat. They left Azcarraga at about 11:30 in the morning and when the explosion occurred, he was thrown out. PC investigation report states that thirty seven (37) passengers were injured (Exhibits "O" and "2").The bus conductor, Sancho Mendoza, testified that the box belonged to a passenger whose name he does not know and who told him that it contained miscellaneous items and clothes. He helped the owner in loading the baggage which weighed about twelve (12) kilos and because of company regulation, he charged him for it twenty-five centavos (P0.25). From its appearance there was no indication at all that the contents were explosives or firecrackers. Neither did he open the box because he just relied on the word of the owner.There is no question that Bus No. 120 was road worthy when it left its Manila Terminal for Lucena that morning of December 5, 1960. The injuries suffered by the plaintiff were not due to mechanical defects but to the explosion of firecrackers inside the bus which was loaded by a co-passenger.... Turning to the present case, it is quite clear that extraordinary or utmost diligence of a very cautious person was not observed by the defendant company. The service manual, exhibits "3" and "3-A," prohibits the employees to allow explosives, such as dynamite and firecrackers to be transported on its buses. To implement this particular rule for 'the safety of passengers, it was therefore incumbent upon the employees of the company to make the proper inspection of all the baggages which are carried by the passengers.Held:before the box containing the firecrackers were allowed to be loaded in the bus by the conductor, inquiry was made with the passenger carrying the same as to what was in it, Article 1733 is not as unbending as His Honor has held, for it reasonably qualifies the extraordinary diligence required of common carriers for the safety of the passengers transported by them to be "according to all the circumstances of each case." In fact, Article 1755 repeats this same qualification: "A common carrier is bound to carry the passengers safely as far as human care and foresight can provide, using the utmost diligence of very cautious persons,with due regard for all the circumstances."it must be considered that while it is true the passengers of appellant's bus should not be made to suffer for something over which they had no control,1fairness demands that in measuring a common carrier's duty towards its passengers, allowance must be given to the reliance that should be reposed on the sense of responsibility of all the passengers in regard to their common safety. It is to be presumed that a passenger will not take with him anything dangerous to the lives and limbs of his co-passengers, not to speak of his own. Not to be lightly considered must be the right to privacy to which each passenger is entitled. He cannot be subjected to any unusual search, when he protests the innocuousness of his baggage and nothing appears to indicate the contrary, as in the case at bar.-In other words, inquiry may be verbally made as to the nature of a passenger's baggage when such is not outwardly perceptible,- Of course, when there are sufficient indications that the representations of the passenger regarding the nature of his baggage may not be true, in the interest of the common safety of all, the assistance of the police authorities may be solicited, not necessarily to force the passenger to open his baggage, but to conduct the needed investigation consistent with the rules of propriety and, above all, the constitutional rights of the passengerExplosive or Dangerous Contents. A carrier is ordinarily not liable for injuries to passengers from fires or explosions caused by articles brought into its conveyances by other passengers, in the absence of any evidence that the carrier, through its employees, was aware of the nature of the article or had any reason to anticipate danger therefrom. - Since We hold that appellant has succeeded in rebutting the presumption of negligence by showing that it has exercised extraordinary diligence for the safety of its passengers, "according to the circumstances of the (each) case", We deem it unnecessary to rule whether or not there was any fortuitous event in this case.NEGROS NAVIGATION CO., INC.,petitioner, vs.THE COURT OF APPEALS, RAMON MIRANDA, SPS. RICARDO and VIRGINIA DE LA VICTORIA,respondents.D E C I S I O N-In April of 1980, private respondent Ramon Miranda purchased from the Negros Navigation Co., Inc. four special cabin tickets (#74411, 74412, 74413 and 74414) for his wife, daughter, son and niece who were going to Bacolod City to attend a family reunion. -Voyage No. 457-A of the M/VDon Juan, leaving Manila at 1:00 p.m. on April 22, 1980.The ship sailed from the port of Manila on schedule.-At about 10:30PM, theDon Juancollided off the Tablas Strait in Mindoro, with the M/TTacloban City, an oil tanker owned by the Philippine National Oil Company (PNOC)and as a result, the M/VDon Juansank. Several of her passengers perished in the sea tragedy.-Bodies of the four members of private respondents families were never found.Private respondents filed a complaint in RTC Manila, against the Negros Navigation, the Philippine National Oil Company (PNOC), and the PNOC Shipping and Transport Corporation (PNOC/STC), seeking damages for the death of Ardita de la Victoria Miranda, 48, Rosario V. Miranda, 19, Ramon V. Miranda, Jr., 16, and Elfreda de la Victoria, 26.-Petitioner, however, denied that the four relatives of private respondents actually boarded the vessel as shown by the fact that their bodies were never recovered.-Petitioner further averred that theDon Juanwas seaworthy and manned by a full and competent crew, and that the collision was entirely due to the fault of the crew of the M/TTacloban City.- PNOC and petitioner Negros Navigation Co., Inc. entered into a compromise agreement whereby petitioner assumed full responsibility for the payment and satisfaction of all claims arising out of or in connection with the collision and releasing the PNOC and the PNOC/STC from any liability to it..-RTC: ordered defendants to pay the plaintiffs damages-CA affirmed RTC with modifcations-Hence this petition, raising the following issues:whether the members of private respondents families were actually passengers of the Don Juan;whether the petitioner is negligent and failed to exercise EOD?Petitioner contends that the purchase of the tickets does not necessarily mean that the alleged victims actually took the trip.Petitioner asserts that it is common knowledge that passengers purchase tickets in advance but do not actually use them.SC: This contention is without merit. Private respondent Ramon Miranda testified that he personally took his family and his niece to the vessel on the day of the voyage and stayed with them on the ship until it was time for it to leave. There is no reason he should claim members of his family to have perished in the accident just to maintain an action.Petitioners only proof is that the bodies of the supposed victims were not among those recovered from the site of the mishap.But so were the bodies of the other passengers reported missing not recovered.Private respondent Mirandas testimony was corroborated by Edgardo Ramirez.Ramirez was a seminarian and one of the survivors of the collision. He testified that he saw Mrs. Miranda and Elfreda de la Victoria on the ship and that he talked with them.He knew Mrs. Miranda who was his teacher in the grade school. He also knew Elfreda who was his childhood friend and townmate- although the proximate cause of the mishap was the negligence of the crew of the M/TTacloban City, the crew of theDon Juanwas equally negligent as it found that the latters master, Capt. Rogelio Santisteban, was playing mahjong at the time of collision, and the officer on watch, Senior Third Mate Rogelio De Vera, admitted that he failed to call the attention of Santisteban to the imminent danger facing them.This Court found that Capt. Santisteban and the crew of the M/VDon Juanfailed to take steps to prevent the collision or at least delay the sinking of the ship and supervise the abandoning of the ship.In addition, the Court found that theDon Juanwas overloaded. number of persons allowed on the ship was 864, of whom 810 are passengers, but there were actually 1,004 on board the vessel when it sank, 140 persons more than the maximum number that could be safely carried by it.Taking these circumstances together, and the fact that the M/VDon Juan, as the faster and better-equipped vessel, could have avoided a collision with thePNOC tanker, this Court held that even if theTacloban Cityhad been at fault for failing to observe an internationally-recognized rule of navigation, theDon Juanwas guilty of contributory negligence.The grossness of the negligence of the Don Juan is underscored when one considers the foregoing circumstances :Firstly, the Don Juan was more than twice as fast as the Tacloban City.Secondly, the Don Juan carried the full complement of officers and crew members specified for a passenger vessel of her class.Thirdly, the Don Juan was equipped with radar which was functioning that night.Fourthly, the Don Juans officer on-watch had sighted the Tacloban City on his radar screen while the latter was still four (4) nautical miles away. Don Juan, had it taken seriously its duty of extraordinary diligence, could have easily avoided the collision with the Tacloban City.Indeed, the Don Juan might well have avoided the collision even if it had exercisedordinarydiligence merely.In the petition at bar, the Don Juan having sighted the Tacloban City when it was still a long way off was negligent in failing to take early preventive action and in allowing the two (2) vessels to come to such close quarters as to render the collision inevitable We conclude that Capt. Santisteban and Negros Navigation are properly held liable for gross negligence in connection with the collision of the Don Juan and Tacloban City and the sinking of the Don Juan leading to the death of hundreds of passengers. . . .[5]InMecenas, this Court found petitioner guilty of negligence in (1) allowing or tolerating the ship captain and crew members in playing mahjong during the voyage, (2) in failing to maintain the vessel seaworthy and (3) in allowing the ship to carry more passengers than it was allowed to carry.Petitioner is, therefore, clearly liable for damages to the full extent.KOREAN AIRLINES CO., LTD.,petitioner,vs. COURT OF APPEALS and JUANITO C. LAPUZ,respondents.-Juanito C. Lapuz, an automotive electrician, was contracted for employment in Jeddah, Saudi Arabia, for a period of one year through Pan Pacific Overseas Recruiting Services, Inc. -Lapuz was supposed to leave on November 8, 1980, via Korean Airlines. Initially, he was "wait-listed," which meant that he could only be accommodated if any of the confirmed passengers failed to show up at the airport before departure. When two of such passengers did not appear, Lapuz and another person by the name of Perico were given the two unclaimed seats.-he was allowed to check in with one suitcase and one shoulder bag at the check-in counter of KAL. -He passed through the customs and immigration sections for routine check-up and was cleared for departure as Passenger No. 157 of KAL Flight No. KE 903. -Together with the other passengers, he rode in the shuttle bus and proceeded to the ramp of the KAL aircraft for boarding. -However, when he was at the third or fourth rung of the stairs, a KAL officer pointed to him and shouted "Down! Down!" He was thus barred from taking the flight. -When he later asked for another booking, his ticket was canceled by KAL. Consequently, he was unable to report for his work in Saudi Arabia within the stipulated 2-week period and so lost his employment.-KAL alleged that Pan Pacific Recruiting Services Inc. coordinated with KAL for the departure of 30 contract workers, of whom only 21 were confirmed and 9 were wait-listed passengers. -The agent of Pan Pacific, Jimmie Joseph, after being informed that there was a possibility of having one or two seats becoming available, gave priority to Perico, who was one of the supervisors of the hiring company in Saudi Arabia. The other seat was won through lottery by Lapuz. However, only one seat became available and so, pursuant to the earlier agreement that Perico was to be given priority, he alone was allowed to board.-RTC MANILA held KAL liable for damages. CA affirmed with modification.-ISSUES: Whether or not Lapuz was a passenger and the petitioner committed a breach of COC?-HELD: The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance through immigration and customs clearly shows that he had indeed been confirmed as a passenger of KAL in that flight.-KAL thus committed a breach of the contract of carriage between them when it failed to bring Lapuz to his destination.-This Court has held that a contract to transport passengers is different in kind and degree from any other contractual relation.3The business of the carrier is mainly with the traveling public. It invites people to avail themselves of the comforts and advantages it offers. The contract of air carriage generates a relation attended with a public duty. Passengers have the right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees.4So it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier.-The breach of contract was aggravated in this case when, instead of courteously informing Lapuz of his being a "wait-listed" passenger, a KAL officer rudely shouted "Down! Down!" while pointing at him, thus causing him embarrassment and public humiliation.-KAL argues that "the evidence of confirmation of a chance passenger status is not through the entry of the name of a chance passenger in the passenger manifest nor the clearance from the Commission on Immigration and Deportation, because they are merely means of facilitating the boarding of a chance passenger in case his status is confirmed." We are not persuaded.- Lapuz shows that he had indeed checked in at the departure counter, passed through customs and immigration, boarded the shuttle bus and proceeded to the ramp of KAL's aircraft. In fact, his baggage had already been loaded in KAL's aircraft, to be flown with him to Jeddah. -The contract of carriage between him and KAL had already been perfected when he was summarily and insolently prevented from boarding the aircraft.FORTUNE EXPRESS, INC.,petitioner, vs.COURT OF APPEALS, PAULIE U. CAORONG, and minor children YASSER KING CAORONG, ROSE HEINNI and PRINCE ALEXANDER, all surnamed CAORONG, and represented by their mother PAULIE U. CAORONG,respondents.Fortune Express Inc. is a bus company in Northern Mindanao.Private respondent Paulie Caorong is the widow of Atty. Caorong, while private respondents Yasser King, Rose Heinni, and Prince Alexander are their minor children.-November 18, 1989, a bus of petitioner figured in an accident with a jeepney in Kauswagan, Lanao del Norte, resulting in the death of several passengers of the jeepney, including two Maranaos.-It was found out that the owner of the jeepney was a Maranao residing in Delabayan, Lanao del Norte and that certain Maranaos were planning to take revenge on the petitioner by burning some of its buses.-Generalao went to see Diosdado Bravo, operations manager of petitioner, at its main office in Cagayan de Oro City.Bravo assured him that the necessary precautions to insure the safety of lives and property would be taken.[1]- 6:45 P.M. on November 22, 1989, three armed Maranaos who pretended to be passengers, seized a bus of petitioner at Linamon, Lanao del Norte while on its way to Iligan City. Among the passengers of the bus was Atty. Caorong.-The leader of the Maranaos, identified as one Bashier Mananggolo, ordered the driver, Godofredo Cabatuan, to stop the bus on the side of the highway.Mananggolo then shot Cabatuan on the arm, which caused him to slump on the steering wheel.-Then one of the companions of Mananggolo started pouring gasoline inside the bus, as the