1 MENDOZA v. PAL
1. Mendoza, owner of Cita Theater, contracted with LVN Pictures
Inc., for him to show during the town fiesta of Naga the film
Himala ng Birhen.
2. The posters stated that it would be shown on Sept. 17-18 (eve
and day of fiesta)
3. On Sept. 17, LVN delivered to PAL a can containing the film
consigned to Cita Theater. PAL issued a Way Bill.
4. The can was loaded on a PAL Flight, arriving at Pili Airport the
same day.
5. For reasons not explained by PAL, but which would appear to be
the fault of its employees/agents, this can of film was not
unloaded at Pili Airport and was brought back to Manila.
6. The film was located the following day and then shipped to Pili
on the 20th.
7. Mendoza exhibited the film but he had missed his opportunity
to realize a large profit because the people who were there for
the Fiesta already left.
8. Mendoza brought an action against PAL to recoup his losses. TC:
PAL is not liable for the damages (P3k).
9. To avoid liability, PAL called the attention of the TC to paragraph
6 of the terms and conditions of the Way Bill.
a. The Carrier does not obligate itself to carry the Goods by
any specified aircraft or on a specified time. Said Carrier
being hereby authorized to deviate from the route of the
shipment without any liability therefor.
10. PAL claimed that since there was no obligation on its part to
carry the film on any specified time, it could not be held
accountable for the 3-day delay.
11. TC: Although PAL was not obligated to load the film on any
specified plane or on any particular day, once the can was
loaded and shipped on one of its planes making trip to
Camarines, then it assumed the obligation to unload it at its
point of destination and deliver it to the consignee, and its
unexplained failure to comply with this duty constituted
negligence.
a. But found that fraud was not involved; PAL was a debtor
in good faith.
b. Inasmuch as these damages suffered by Mendoza were
not foreseen or could not have been foreseen at the time
PAL accepted the can of film for shipment, because
neither LVN Pictures Inc. (shipper) nor Mendoza
(consignee) had called its attention to the special
circumstances attending the shipment and the showing
of the film during the town fiesta of Naga, Mendoza may
not recover the damages sought.
ISSUE: Whether PAL should be held liable for damages. NO.
Under Art. 1107 of the Civil Code, a debtor in good faith like
PAL, may be held liable only for damages that were foreseen or
might have been foreseen at the time the contract of the
transportation was entered into.
The TC correctly found that PAL could not have foreseen the
damages that would be suffered by Mendoza upon failure to
deliver the can of film on the Sept. 17 for the reason that the
plans of Mendoza to exhibit that film during the town fiesta and
his preparations (announcement by posters and advertisement
in the newspaper) were not called to PAL's attention.
In order to impose on the defaulting party further liability than
for damages naturally and directly arising from a breach of
contract, such unusual or extraordinary damages must have
been brought within the contemplation of the parties as the
probable result of a breach at the time of or prior to contracting.
Generally, notice then of any special circumstances which will
show that the damages to be anticipated from a breach would
be enhanced has been held sufficient for this effect.
Common carriers are not obligated by law to carry and to
deliver merchandise, and persons are not vested with the right
of 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.
In situations where failure to exhibit films on a certain day
would spell substantial damages or considerable loss of profits,
including waste of efforts on preparations and expenses for
advertisements, exhibitors, for their security, may either get
hold of the films well ahead of the time of exhibition in order to
make allowance for any hitch in the delivery, or else enter
into a special contract or make a suitable arrangement
with the common carrier for the prompt delivery of the
films, calling the attention of the carrier to the circumstances
surrounding the case and the approximate amount of damages
to be suffered in case of delay.
ISSUE: Whether the Contract of transportation by air is
commercial. YES.
Counsel for Mendoza: Code of Commerce, not Civil Code, should
apply because the shipment of the can of film is an act of
commerce.
 o It involves an object of commerce; PAL was a common
carrier, customarily engaged in transportation for the
public.
o Although the contract of transportation was not by land
or water (Art. 349), air transportation being analogous,
should be considered as included, because Art. 2 of the
same Code provides that transactions covered by the
Code of Commerce and all others of analogous character
shall be deemed acts of commerce.
SC: PAL is a common carrier; air transportation is analogous to
land and water transportation. The obvious reason for its non-
inclusion in the Code was that at the time of its promulgation,
commercial air transportation was not yet known.
The test of whether one is a common carrier by air is whether
he holds out that he will carry for hire, so long as he has room,
goods for everyone bringing goods to him for carriage, not
whether he is carrying as a public employment or whether he
carries to a fixed place.
DOCTRINE: Common carriers are not obligated by law to carry and
to deliver merchandise, and persons are not vested with the right of
prompt delivery, unless such common carriers previously assume
that obligation.