1- SALUDO v.

COURT OF APPEALS

Doctrines:
1. BILL OF LADING; DELIVERY OF GOODS — Logically, since a bill of lading
acknowledges receipt of goods to be transported, 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 even prior to actual possession and
control by the carrier of the cargo to be transported. There is no such law.

2. SALES; DELIVERY TO CARRIER ON BEHALF OF BUYER— 6There 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 delivery has thus
been accepted by the carrier, its liability commences eo instanti. Ordinarily, a receipt
is not essential to a complete delivery of goods to the carrier for transportation but,
when issued is competent and prima facie but not conclusive evidence of delivery to
the carrier.

FACTS:

Shipper - Pomierski and Son Funeral Home

Consignee – Maria Saludo
Carrier - Transworld Airlines (TWA) Chicago – San Francisco, and
Philippine Airlines (PAL)- San Francisco – Manila

 After the death of petitioner's mother, Crispina Galdo 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.
Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, 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 Galdo. On the same date, 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. is a national service
used by undertakers to throughout the nation (U.S.A.). C.M.A.S. booked the
shipment with PAL thru the carrier's agent Air Care International, with Pomierski
F.H. as the shipper and Maria (Maria) Saludo as the consignee. The requested
routing was from Chicago to San Francisco on board TWA Flight 131 and from San
Francisco to Manila on board PAL Flight No. 107. Maria Saludo upon arriving at San
Francisco Airport, 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 in a
matter of 10 minutes informed him that the remains were on a plane to Mexico
City, that there were two bodies at the terminal, and somehow they were switched.
 The following day, the shipment or remains of Crispina Saludo arrived in San
Francisco from Mexico on board American Airlines. This shipment was transferred
to or received by PAL. 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 Manila a day after its expected
arrival. Aggrieved by the incident, the petitioners instituted an action against
respondents and were asked to pay for damages.
 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 by Air Care International as carrier's agent; 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.
 RTC - absolved the two respondent airlines companies of liability.
 CA - affirmed the decision of the lower court in toto, and in a subsequent
resolution, denied herein petitioners' motion for reconsideration for lack of merit.
Hence, the petition for review on certiorari to SC.
 SC –The Supreme Court affirmed the appealed decision, with the modification that
an award or P40,000.00 as and by way of nominal damages is granted in favor of
the Saludos to be paid by TWA.

ISSUE

Whether or not the delay in the delivery of the casketed remains of petitioners' mother was
due to the fault of respondent airline companies.

RULING:

NO. PAL and TWA are not liable for switching of caskets prior to their receipt of agreed
cargo. TWA without authority, even prohibited, to verify contents of casket When the cargo
was received from C.M.A.S. at the Chicago airport terminal for shipment, which was
supposed to contain the remains of Crispina Saludo, 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. At this point, it can be categorically stated that, as
culled from the findings of both the trial court and appellate courts, 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.
CMAS classified as forwarder, is an agent of the shipper and not of the carrier. While the
actual participation of CMAS has been sufficiently and correctly established, to hold that it
acted as agent for TWA and PAL would be both an inaccurate appraisal and an
unwarranted categorization of the legal position it held in the entire transaction. Court
cannot grant damages at expense of TWA and PAL; Possible liability of CMAS best deferred
to another time and addressed to another forum. However, SC Award of nominal damages
warranted; Articles 2221 and 2222 NCC The facts show that the Saludos' right to be treated
with due courtesy in accordance with the degree of diligence required by law to be
exercised by every common carrier was violated by TWA and this entitles them, at least, to
nominal damages from TWA alone. cles 2221 and 2222 of the Civil Code make it clear that
nominal damages are not intended for indemnification of loss suffered but for the
vindication or recognition of a right violated or invadedThey are recoverable where some
injury has been done but the amount of which the evidence fails to show, the assessment of
damages being left to the discretion of the court according to the circumstances of the case.

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. According to foreign and local jurisprudence, "the 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 is prima
facie evidence of the receipt of the goods by the carrier. . . . In the absence of convincing
testimony establishing mistake, recitals in the bill of lading showing that the carrier
received the goods for shipment on a specified date controls.

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. There is no law which requires
that the delivery of the goods for carriage and the issuance of the covering bill of lading
must coincide in point of time or, for that matter, that the former should precede the latter.

As between the shipper and the carrier, when no goods have been delivered for
shipment no recitals in the bill can estop the carrier from showing the true facts . . . Between
the consignor of goods and receiving carrier, recitals in a bill of lading as to the goods shipped
raise only a rebuttable presumption that such goods were delivered for shipment. As between
the consignor and a receiving carrier, the fact must outweigh the recital."

In the case at bar, it was on October 26, 1976 the cargo containing the casketed
remains of CrispinaSaludo was booked for PAL Flight Number PR-107 leaving San
Francisco for Manila on October 27, 1976, 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.

Explicit is the rule under 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
intransitu, and terminates only after the lapse of a reasonable time for the acceptance, of
the goods by the consignee or such other person entitled to receive them. And, 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. 31 Where such a delivery has thus been
accepted by the carrier, the liability of the common carrier commences eoinstanti.

As already demonstrated, the facts in the case at bar belie the averment that there
was delivery of the cargo to the carrier on October 26, 1976. Rather, as earlier explained,
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 under their undertakings in PAL Airway Bill No.
079-01180454. Consequently, for the switching of caskets prior thereto which was not
caused by them, and subsequent events caused thereby, private respondents cannot be
held liable.

10- VISAYAN DISTRIBUTORS, INC. v. MARIANO R. FLORES

Doctrines:

1. OBLIGATIONS AND CONTRACTS; SALE; VENDEE’S INSOLVENCY AS VENDOR’S EXCUSE

FROM PERFORMANCE. — The vendee’s insolvency that will excuse the vendor from his
obligation to deliver the thing sold, as a judicially declared insolvency, or one inferred from
such acts as petitioning for suspension of payments or as a result of all his properties
having been attached in a civil or criminal proceeding is one which is discovered after the
perfection of the contract.

2. ID.; SURETYSHIP; NOVATION OF PRINCIPAL’S CONTRACT; A CHANGE IN OR PART

PERFORMANCE OF THE CONTRACT NOT RENDERING IT MORE ONEROUS, DOES NOT
RELEASE THE SURETY. — A change in, or part performance of, the contract which does not
render the obligation more onerous, such as part payment by vendee ahead of the day
stipulated or delivery by him to the vendors of more containers than what was stipulated,
cannot have the effect of releasing the vendor’s surety.

3. ID.; ID.; SURETY’S OBLIGATION; MEASURE OF SURETY’S OBLIGATION IS NOT THE

MEASURE OF PRINCIPAL’S OBLIGATION FOR DAMAGES. — The amount specified in the
bond as the surety’s obligation, does not limit the extent of the damages that may be
recovered from the principal, the latter’s liability being governed by the obligation he
assumed under his contract.

FACTS:
Defendants Flores and Abeto entered into a contract with plaintiff whereby the former will
deliver to the latter 2,000 long tons of copra. The plaintiff made an advance payment after
the perfection of the contract. However, the defendants refused to deliver the said copra on
the ground that the plaintiff is insolvent and failed to guarantee the payment of the
purchase price by a letter of credit called for in the contract. As a result, the plaintiff
instituted an action against the defendants. The lower court rendered a judgment in favor
of the plaintiff.

ISSUE:

WON the defendants are still bound to deliver or make deliver despite of the insolvency of
the plaintiff.

RULING:

Yes. Defendants are still bound to deliver. There is no conclusive proof showing that Abeto
and Flores, in definite terms, had warned the appellee that they would not deliver the copra
called for in their contract until they were sure of being paid in accordance with said
contract. Moreover, even assuming that the appellee still owed Abeto and Flores something
upon account of the 159,834 kilos of copra delivered before November 18, 1946, said fact is
not a positive evidence of insolvency, and to mention the circumstance that the contract is
essentially a cash transaction, 95 per cent of the purchase price being required to be paid in
cash and only 5 percent by an irrevocable letter of credit. Of course, the appellee was not to
be expected to tender payment before the presentation of the documents called for in the
contract, namely, commercial invoice, on board bills of lading, and wage certificate and/or
survey report.

19- GONZALES DE MONDRAGON v. ROMAN SANTOS

Doctrine:

PURCHASE AND SALE; FACTS SHOW THAT SALE IS BY LUMP SALE. —In a sale involving an
extensive agricultural estate containing undetermined lots of different classes, unappraised
improvements, barrio lots and roads and standing crop, it was well-nigh difficult, not to say
impossible, to conclude a transaction technically and strictly by the hectare. Such form of
sale would leave the parties in uncertainly on the amount to be added to or taken from the
price in the ensuing readjustment in the event of discrepancy in the assumed area. Such
form of sale would be fraught, as the parties ought to have realized, with extreme
difficulties and harassing controversies.

FACTS:

It appears that Don Joaquin Gonzales Mondragon, who died on December 16, 1940 in
Manila, left a large tract of land known as Hacienda Esperanza, situated in three
municipalities of Pangasinan and covered by five certificates of titles. The deceased had
executed a will and codicil in which he provided for the distribution and disposition of his
estate among his widow, Doña Nieves Balmori Vda. de Gonzales Mondragon, the plaintiff
herein, and various children. To his widow, the testator devised 33/34 of the hacienda,
among other legacies.

In 1941, the widow and her children made a partition of the inheritance, allotting to each
heir separate and specific portions but leaving pro-indiviso the residential lots and roads in
the barrios situated within the estate. They employed a surveyor, and a sub-division plan,
introduced in evidence as Exhibit 10, was drawn, on which the area of the widow’s
approximately one-third share was stated to be 1,023 hectares.

Subsequent to the partition, negotiations were started, or resumed, for the purchase by
Don Roman Santos, the defendant, of the plaintiff’s share and those of her children who
were willing to sell. Offers and counter-offers were made until, finally, the parties closed
the deal and executed the deed.

Sometime after the sale, a new survey was made and the new plan gave the area of the
plaintiff’s approximately one-third share of the hacienda as 1,091.24 instead of 1,023.

It was the restoration of the difference between these two figures or the payment of its
equivalent in cash that the first complaint was filed, it being alleged that the plaintiff had
sold her land on the basis of P450 per hectare. Explaining why she signed the deed without
objecting to the form in which it was written, the plaintiff declared that she did not read the
document because she was then sick suffering from a heart ailment. The defendant
countered with the allegation that he bought all the plaintiff’s right and interest to and in
the hacienda for lump sum and not for a specified price for each hectare, as the plaintiff
claims.

The last preceding paragraph states in a nutshell the pivotal issue, the resolution of which
will decide the rest, except the question as to the inclusion or non-inclusion in the sale of
lot No. 4397-A and barrio lots and roads, question will be taken up separately.
It is admitted that if the contract is to be construed by the language used in the deed of
conveyance, the plaintiff can not recover. It is also admitted that “as a general rule, by
virtue of section 22 of Rule 123 of the Rules of Court, Exhibit A may be considered as
containing the real agreement between the parties.”

ISSUE:

But it is contended that “Exhibit A does not express the true intent and agreement of the
parties therein and that the appellant’s consent thereto was given through mistake and
error,” in that she believed “that in signing that deed she was conveying 1,023 hectares
only.”

RULING:

The plaintiff has the burden of proof to overcome the strong presumption that the
document she and her co-sellers signed, expressed their true intention. Our view of the
plaintiff’s evidence is that it is neither predominant nor conclusive. The best that can be
said in its favor is that it does not rule out the opposite theory. Much less does it establish,
in order to show that the mistakes was mutual, that the buyer shared the vendor’s
intention and belief that the sale was by the hectare and not for a sum in gross as stated in
the document of sale.

The plaintiff’s evidence being as it is, the integrity of the document Exhibit A will, of
necessity, have to be maintained and equitable relief denied. This would be true even if
there were doubts. Decisions of this court and of American courts abound in favor of the
salutary doctrine that contracts solemnly and deliberately entered into may not be
overturned by inconclusive proof or by reason of mistakes of one of the parties to which
the other in no way has contributed.

Moran’s comments on the Rules of Court, Vol. III, p. 195, summing up the rulings laid down
in various decisions of the court and one of the United States Supreme Court, says: “Relief
by way of reformation of a written agreement will not be granted unless the proof
of mutual mistake is of the clearest and most satisfactory character. The amount of evidence
necessary to sustain a prayer for relief where it is sought to impugn a fact in a document is
always more than a mere preponderance of the evidence.”

In the case of Joaquin vs. Mitsumine (34 Phil., 858), this court held that “An alleged defect in
a contract perfectly valid and binding on its face, must be conclusively proved. The validity
and fulfillment of contracts can not be left to the will of one of the parties.”

In the case of Irureta Goyena vs. Tambunting (1 Phil., 490), it appeared that the defendant
bought a piece of land and agreed to pay $3,200 for it. It so happened that the land was less
than what the parties supposed, and the buyer refused to pay the price agreed upon unless
the corresponding reduction was made.

It is to be noted that in the last-cited case, the mistake was caused, intentionally or
innocently, by the agent of the plaintiff who was favored by the shortage, whereas in the
case at bar the error was in the plain of the plaintiff herself who was prejudiced by the
excess.

The judgment dismissing the complaint will be affirmed with costs.