PARMANAND SHEWARAM vs PAL

FACTS: That Parmanand Shewaram, checked in three (3) pieces of baggages a suitcase and two (2) other
pieces; that the suitcase was mistagged by defendant's personnel in Zamboanga City, When plaintiff
Parmanand Shewaram arrived in Manila his suitcase did not arrive with his flight because it was sent to
Iligan. So, he made a claim with defendant's personnel in Manila airport and another suitcase similar to his
own which was the only baggage left for that flight, the rest having been claimed and released to the other
passengers of said flight, was given to the plaintiff for him to take delivery but he did not and refused to take
delivery of the same on the ground that it was not his, alleging that all his clothes were white and the National
transistor 7 and a Rollflex camera were not found inside the suitcase, and moreover, it contained a pistol
which he did not have nor placed inside his suitcase; that after inquiries made by defendant's personnel in
Manila from different airports where the suitcase in question must have been sent, it was found to have
reached Iligan and the station agent of the PAL in Iligan caused the same to be sent to Manila for delivery to
Mr. Shewaram and which suitcase belonging to the plaintiff herein arrived in Manila airport on November 24,
1959; that it was also found out that the suitcase shown to and given to the plaintiff for delivery which he
refused to take delivery belonged to a certain Del Rosario who was bound for Iligan in the same flight with
Mr. Shewaram; that when the plaintiff's suitcase arrived in Manila as stated above on November 24, 1959, he
was informed by Mr. Tomas Blanco, Jr., the acting station agent of the Manila airport of the arrival of his
suitcase but of course minus his Transistor Radio 7 and the Rollflex Camera; that Shewaram made demand
for these two (2) items or for the value thereof but the same was not complied with by defendant.
ISSUE: WON PALs liability should be limited
HELD: YES.
It is clear from the above-quoted portions of the decision of the trial court that said court had found that the
suitcase of the appellee was tampered, and the transistor radio and the camera contained therein were lost,
and that the loss of those articles was due to the negligence of the employees of the appellant. There is no
question that the appellant is a common carrier.1 As such common carrier the appellant, from the nature of its
business and for reasons of public policy, is bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by it according to the circumstances of each case. 2 It
having been shown that the loss of the transistor radio and the camera of the appellee, costing P373.00, was
due to the negligence of the employees of the appellant, it is clear that the appellant should be held liable for
the payment of said loss. It is, however, contended by the appellant that its liability should be limited to the
amount stated in the conditions of carriage printed at the back of the plane ticket stub which was issued to
the appellee as follows:
The liability, if any, for loss or damage to checked baggage or for delay in the delivery thereof is
limited to its value and, unless the passenger declares in advance a higher valuation and pay an
additional charge therefor, the value shall be conclusively deemed not to exceed P100.00 for each
ticket.
The appellant maintains that in view of the failure of the appellee to declare a higher value for his luggage,
and pay the freight on the basis of said declared value when he checked such luggage at the Zamboanga City
airport, pursuant to the abovequoted condition, appellee can not demand payment from the appellant of an
amount in excess of P100.00.

HELD: NO. The law that may be invoked, in this connection is Article 1750 of the New Civil Code which
provides as follows:

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.
In accordance with the above-quoted provision of Article 1750 of the New Civil Code, the pecuniary liability
of a common carrier may, by contract, be limited to a fixed amount. It is required, however, that the contract
must be "reasonable and just under the circumstances and has been fairly and freely agreed upon." The
requirements provided in Article 1750 of the New Civil Code must be complied with before a common carrier
can claim a limitation of its pecuniary liability in case of loss, destruction or deterioration of the goods it has
undertaken to transport. In the case before us We believe that the requirements of said article have not been
met. It can not be said that the appellee had actually entered into a contract with the appellant, embodying
the conditions as printed at the back of the ticket stub that was issued by the appellant to the appellee. The
fact that those conditions are printed at the back of the ticket stub in letters so small that they are hard to
read would not warrant the presumption that the appellee was aware of those conditions such that he had
"fairly and freely agreed" to those conditions.
2ND SET:
Mallari, Sr. v. Court of Appeals (324 SCRA 147)
Post under case digests, Civil Law at Thursday, February 23, 2012 Posted by Schizophrenic Mind
Facts: Mallari Jr. was the driving a passenger jeepney owned by his father, co-petitioner herein. The jeep
collided with the delivery van of Bulletin Publishing Corp. while travelling on the National Highway in Bataan.
Mallari Jr. proceeded to overtake a fiera which had stopped in front of him. He negotiated the curve and
moved in the opposite lane in order to overtake the fiera. As he passed the vehicle he saw the delivery van of
Bulletin and the vehicles collided. The points of collision were the and the left rear portion of
the passenger jeepney and the left front side of the delivery van. The 2 right wheels of the delivery van were
on the right shoulder of the road and pieces of debris from the accident were found scattered along the
shoulder ofthe road up to a certain portion of the lane travelled by thepassenger jeepney. The impact caused
the jeepney to turn around and fall on its left side resulting in injuries to its passengers one of whom was
Israel Reyes who eventually died due to the gravity of his injuries.

The widow of Reyes filed a complaint to recover damages from Mallari, Jr. and Sr. and Bulletin as well. The
trial court found that the proximate cause of the collision was the negligence of the driver of the Bulletin
delivery van, considering the fact that the left front portion of the delivery truck hit and bumped the left rear
portion of the passenger jeepney. On appeal, the court reversed the decision of the lower court and held that
it was Mallari Jr. who was negligent. Hence this petition.

Issue: Whether or not petitioners herein should be held liable for the death of Reyes.

Held: The Court affirmed the decision of the Court of Appeals and held that Mallari Jr. and Sr. who are
responsible for the death of Reyes. The collision was caused by the sole negligence of petitioner Alfredo
Mallari Jr. who admitted that immediately before the collision and after he rounded a curve on the highway,
he overtook a Fiera which had stopped on his lane and that he had seen the van driven by Angeles before
overtaking the Fiera. This act of overtaking was in clear violation of Sec. 41, pars. (a) and (b), of RA 4136 as
amended, otherwise known as The Land Transportation and Traffic Code. The rule is settled that a driver
abandoning his proper lane for the purpose of overtaking another vehicle in an ordinary situation has the
duty to see to it that the road is clear and not to proceed if he cannot do so in safety. Article 2185 of the NCC,
there is a presumption of negligence on the part of a person driving a motor vehicle if at the time of the
mishap he was violating a traffic regulation. Petitioners herein failed to present satisfactory evidence to
overcome this legal presumption. Therefore they shall be liable for the loss of Reyes life.

ALLIED BANKING v YONG

FACTS: Philippine Pacific Fishing Company, Inc. (Philippine Pacific), through its then Vice-Chairman of the
Board and concurrent President Marilyn Javier, obtained from Allied Banking Corporation (Allied Bank), a
packing credit. To secure the obligation, Marilyn Javier and the spouses Cheng Yong and Lilia Gaw (spouses
Cheng, for short), executed a Continuing Guaranty/Comprehensive Surety. Later, Philippine Pacific, due to
business reverses and alleged misuse of corporate funds by its operating officers, defaulted in the payment of
said obligation. An intra-corporate dispute among its stockholders followed. Likewise, a criminal case for
Estafa was filed against Marilyn Javier.
Thereafter, the corporation was reorganized, following which the spouses Cheng Yong and Lilia Gaw
were elected as its president and treasurer, respectively. Allied Bank and Philippine Pacific agreed to
restructure and convert the packing credit accommodation into a simple loan. As it turned out, Philippine
Pacific failed to pay according to the schedule of payments set out in the promissory note prompting the
spouses Cheng to secure the note with substantial collateral by executing a deed of chattel mortgage in favor
of Allied Bank over a fishing vessel, Jean III, a Japanese- manufactured vessel with refrigerated hatches and
glass freezers, owned by the spouses and registered in their names. Philippine Pacific again defaulted
payment. Allied Bank filed an application for extra-judicial foreclosure of the chattel mortgage constituted
on Jean III. In the meantime, the vessel sank at the port of Navotas resulting to its total loss. The vessel sank
due to unnoticed defects caused by its prolonged stay in the fish port and the abandonment thereof. The
spouses Cheng filed in Civil Case an amended complaint praying, among others, that: (b) the vessel be
declared a total loss; and (c) Allied Bank be ordered to pay them the value of the loss

The trial court declared both the promissory note and the deed of chattel mortgage over the vessel Jean
III invalid and unenforceable. CA partially reversed and set aside the appealed decision of the trial court
insofar as it (a) declared the promissory note as not valid and unenforceable and (b) ordered Allied Bank to
pay the spouses Cheng for the loss of the fishing vessel

ISSUE: WON the Loss of the mortgaged Fishing Vessel Jean III must be borne by the respondent
bank considering that the vessel was in its possession and control at the time of the loss.

HELD: YES. SC declare and so hold that Allied Banks foreclosure of the chattel mortgage constituted over the
vessel Jean III was justified. On this score, we also rule that the loss of the mortgaged chattel brought about
by its sinking must be borne not by Allied Bank but by the spouses Cheng. As owners of the fishing vessel, it
was incumbent upon the spouses to insure it against loss. Thus, when the vessel sank before the chattel
mortgage could be foreclosed, uninsured as it is, its loss must be borne by the spouses Cheng.

THE GOVERNMENT OF THE PHILIPPINE ISLANDS vs.

PHILIPPINE STEAMSHIP CO., INC.,
FACTS: The coastwise Isabel, equipped with motor and sails, left the port of Manila with primary destination
to Balayan, Batangas, carrying, among its cargo, 911 sacks of rice belonging to the plaintiff and consigned to
points in the south. After the boat had been under weigh for about four hours, and has passed the San Nicolas
Light near the entrance into Manila Bay, the watch and the mate on the bridge of the Isabel discerned the light
of another vessel, which proved to be the Antipolo, also a coastwise vessel, on its way to Manila and coming
towards the Isabel. At about the same time both the watch and mate on the bridge of the Antipolo also saw
the Isabel, the two vessels being then about one mile and a half or two miles apart. Each vessel was going
approximately at the speed of 6 miles an hour, and in about ten minutes they had together traversed the
intervening space and were in close proximity to each other. When the mate of the Antipolo, who was then at
the wheel, awoke to the danger of the situation and saw the Isabel"almost on top of him," to use the words of
the committee on marine accidents reporting the incident, he put his helm hard to the starboard. This
maneuver was correct, and if the helmsman of the Isabel had done likewise, all would apparently have been
well, as in that event the two vessels should have passed near to each other on the port side without colliding.
As chance would have it, however, the mate on the Isabel at this critical juncture lost his wits and, in disregard
of the regulations and of common prudence, at once placed his own helm hard to port, with the result that his
boat veered around directly in the path of the other vessel and a collision became inevitable. Upon this the
mate on theAntipolo fortunately stopped his engines, but the Isabel continued with full speed ahead, and the
two vessels came together near the bows. The Isabel immediately sank, with total loss of vessel and cargo,
though the members of her crew were picked up from the water and saved.
ISSUE: WON both vessels re liable
HELD: YES. The Court agrees with the trial judge, committed no error in holding that both vessels were to
blame and in applying article 827 of the Code of Commerce to the situation before him. It is there declared
that where both vessels are to blame, both shall be solidarily responsible for the damage occasioned to their
cargoes. As the Isabel was a total loss and cannot sustain any part of this liability, the burden of responding to
the Government of the Philippine Islands, as owner of the rice embarked on the Isabel, must fall wholly upon
the owner of the other ship, that is, upon the defendant, the Philippine Steamship Company, Inc. Only one
observation will be added, in response to one of the contentions of the appellant's attorneys, which is, that the
application of article 827 of the Code of Commerce is not limited by article 828 to the case where it cannot be

determined which of the two vessels was the cause of the collision. On the contrary article 828 must be
considered as an extension of article combined the rule of liability announced in article 827 is applicable not
only to the case where both vessels may be shown to be actually blameworthy but also to the case where it is
obvious that only one was at fault but the proof does not show which.
US v SMITH, BELL and CO.
FACTS: This is an action for damages occasioned to the Navy boat Barceloon, near the mouth of the Pasig
River, by a collision with a casco that was then and there being towed by the launch Alexandra. The
launch Alexandra is the property of the defendant. The inferior court found that the defendant had not
complied with the rules of navigation in Manila Bay, in that it failed to display lights in accordance with such
regulations, and that, by reason of such failure, the collision and consequent damages occurred. The
defendant, in the court below, claimed that the plaintiff could not recover in the action, for the reason that it
had not complied with the provisions of the Code of Commerce, relying particularly upon article 835 of the
same. Article 835 provides: "The action for the recovery of loss and damages arising from collisions can not
be admitted if a sworn statement or declaration is not presented within twenty-four hours to competent
authority of the point where the collision took place, or that of the first port of arrival of the vessel."
The plaintiff claimed that this provision of the Commercial Code did not apply to it.
ISSUE: WON plaintiff can recover damages.
HELD: NO. The Court is of the opinion that the quoted provision of the Commercial Code applies to all persons
engaged in traffic upon the waters of the Philippine Archipelago; that the defendant has as much right to
insist upon compliance with this provision of the code where the damages were done to a boat operated by
the Government as if such boat had been operated by a private individual or company. This provision of the
Commercial Code, requiring protest to be made and presented to the proper authority within twenty-four
hours after the collision, or after the arrival of the injured boat in port, is a prerequisite to the bringing of an
action for damages. By having failed to comply with this provision of the Commercial Code it can not maintain
this action for damages.
INTERNATIONAL HARVESTER COMPANY OF THE PHILIPPINES vs. ARAGON
FACTS: The complaint alleges that the defendant Manila Terminal Co., Inc., is in charge of the custody and
delivery to the respective owners of cargoes discharged at the Government piers in the City of Manila; that
the defendant International Harvester Company of the Philippines is the agent in the Philippines of the
vessel Belle of the Sea; the S/S Belle of the Sea took on board at Los Angeles, California, U. S. A., goods for
shipment to Manila, Philippines; that the S/S Belle of the Seaarrived in Manila and discharged her cargo at the
Government piers under the supervision and custody of the defendant Manila Terminal Co., Inc.; that out of
the goods one carton of assorted was not delivered to Yaras and Company; and said merchandise was lost
through the negligence either of the Manila Terminal Co., Inc., or of the International Harvester Company of
the Philippines.
ISSUE: WON Ints Harvester Company should bear all loss
HELD: NO. From the facts alleged in the complaint filed in the municipal court, it is clear that the International
Harvester Company of the Philippines, as agent in the Philippines of the vessel S/S Belle of the Sea, is
alternatively being held liable for the loss of the cargo in question through its negligence. Inasmuch as it is
expressly that the cargo of the S/S Belle of the Sea was discharged on December 23, 1946, at the Government
piers under the supervision and custody of the Manila Terminal Company, Inc., the International Havester
Company of the Philippines may be held liable only on the assumption that the goods had been lost in transit
or before being discharged at the pier. In other words the liability of the International Harvester Company of

the Philippines is predicated on the contract of carriage by sea between the International Harvester Company
of the Philippines and Yaras and Company as evidenced by Bill of Lading No. 105, independently of the
liability of the Manila Terminal Co., Inc, as operator of an arrastre service.