PARMANAND SHEWARAM, PLAINTIFF-APPELLEE, VS. PHILIPPINE AIR LINES, INC., DEFENDANT-APPELLANT.

Before the ounicipal court of Znboanga City,
plaintiff-appellee Pamanand Shewaram instituted an action to recover
damages suffered by his due to the alleged failure of
defendant-appellant Philippine Air Lines, Inc. to observe extraordinary
diligence in the vigilance and carriage of his luggage. After trial the
municipal court of Zamboanga City rendered judgment ordering the
appellant to pay appellee P373.00 as actual danages, P100.00 as
exemplary damages, P150.00 as attorney’s fees, and the costs of the
action.

Appellant Philippine Air Lines appealed to the Court of
First Instance of Zamboanga City. After hearing the Court of First
Instance of Zamboanga City modified the judgment of the inferior court
by ordering the appellant to pay the appellee only the sun of P373.00
as actual damages, with legal interest from May 6, 1960, and the sum of
P150.00 as attorney’s fees, eliminating the award of exemplary damages.

From
the decision of the Court of First Instance of Zamboanga City,
appellant appeals to this Court on a question of law, assigning two
errors allegedly committed by the lower court a quo, to wit:

1. The lower court erred in not holding that plaintiff-appellee was
   bound by the provisions of the tariff regulations filed by
   defendant-appellant with the civil aeronautics board and the conditions
   of carriage printed at the back of the plane ticket stub.
2. The lower court erred in net dismissing this cage or Halting the liability of the defendant-appellant to P100. 00.

The facts of this case, as found by the trial court, quoted from the decision appealed from, are as follows:

“That
Parmanand Shewaran, the plaintiff herein, was on November 23, 1959, a
paying passenger with ticket No. 4-30976, on defendant’s aircraft
flight No. 976/910 from Zamboanga City bound for Manila; that defendant
is a common carrier engaged in airline transportation in the
Philippines, offering its services to the public to carry and transport
passengers and cargoes from and to different points in the Philippines;
that on the above-mentioned date of November 23, 1959, he checked in
(3) pieces of baggages — a suitcase and two (2) other pieces; that
the suitcase was alstagged by defendant’s personnel in Zamboanga City,
as I.G.N. (for Iligan) with claim cheek No. B-3883, instead of JML (for
Manila). When plaintiff Parmanand Shewaram arrived in Manila on the
date of November 23, 1959, 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 ner placed inside his
suitcase; that after inquiries Bade by defendant’s personnel in Manila
from different airports where the suitcase is 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.

x x x x x x x .

“It
is admitted by defendant that there was mistake in tagging the suitcase
of plaintiff as IGN. The tampering of the suitcase is more apparent
when on November 24, 1959, when the suitcase arrived in Manila,
defendant’s personnel could open the same in spite of the fact that
plaintiff had it under key when he delivered the suitcase to
defendant’s personnel in Zamboanga City. Moreover, it was established
during the hearing that there was space in the suitcase where the two
items in question could have been placed. It was also shown that as
early as November 24, 1959, when plaintiff was notified by phone of the
arrival of the suitcase, plaintiff asked that a check of the things
inside his suitcase be made and defendant admitted that the two items
could not be found inside the suitcase. There was no evidence on record
sufficient to show that plaintiff’s suitcase was never opened during
the time it was placed in defendant’s possession and prior to its
recovery by the plaintiff. However, defendant had presented evidence
that it had authority to open passengers’ baggage to verify and find
its ownership or identity. Exhibit “1” of the defendant would show that
the baggage that was offered to plaintiff as his own was opened and the
plaintiff denied ownership of the contents of the baggage. This proven
fact that baggage nay and could be opened without the necessary
authorization and presence of its owner, applied too, to the suitcase
of plaintiff which was missent to Iligan City because of mistagging.
The possibility of what happened in the baggage of Mr. del Bosario at
the Manila Airport in his absence could have also happened to
plaintiff’s suitcase at Iligan City in the absence of plaintiff. Hence,
the Court believes that these two items were really in plaintiff’s
suitcase and defendant should lie held liable for the same by virtue of
its contract of carriage.

“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. The evidence shows that the transistor radio cost P197.00
and the camera cost P176.00, so the total value of the two lost
articles was P373.00.

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.^[1]

It is, however, contended by the appellant that its liability should be
limited to the amount atated in the conditions of carriage printed at
the back of the plane ticket stub which was issued to the appellee,
which conditions are embodied in Domestic Tariff Regulations No. 2
which was filed with the Civil Aeronautics Board. One of those
conditions, which is pertinent to the issue raised by the appellant in
this case, provides 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 PI00.00 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.
The law that may be invoked, in this connection, is Article 1750 of the
Mew 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
Sew 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
letter 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. The trial court
has categorically stated in its decision that the “Defendant admits
that passengers do not sign the ticket, much less did plaintiff herein
sign his ticket when he made the flight on November 23, 1959.” We hold,
therefore, that the appellee is not, and can not be, bound by the
conditions of carriage found at the bade of the ticket stub issued to
him when he made the flight on appellant’s plane on November 23, 1959.

The liability of the appellant in the present case should be
governed by the provisions of Articles 1734 and 1735 of the New Civil
Code, which We quote as follows:

“Art. 1734. Conmon carriers are responsible for the
loss, destruction, or deterioration of the goods, unless the sane is
due to any of the following causes only:

(1) Flood, storm, earthquake, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;

(3) Act or mission of the shipper or owner of the goods;

(4) The character of the goods or defects in the packing or in the containers;

(5) Order or act of competent public authority.”

“Art. 1735. Ib all cases other than those mentioned in Nos. 1, 2, 3, 4,
and 5 of the preceding article, if the goods are lost, destroyed or
deteriorated, common carriers are presumed to have been at fault or to
hare acted negligently, unless they prove that they observed
extraordinary diligence as required in article 1733.”

It having been clearly found by the trial court that the transistor
radio and the camera of the appellee were lost as a result of the
negligence of the appellant as a common carrier, the liability of the
appellant is clear – it must pay the appellee the value of those two
articles.

In the case of Tsmael and Co. vs. Barretto, 51 Phil. 90, cited by
the trial court in support of its decision, this Court had laid down
the rule that the carrier can not limit its liability for injury to or
loss of goods shipped where such injury or loss was caused by its own
negligence.

“Corpus Juris, volume 10, p. 154, says:

‘Par. 194. Reasonableness of Limitations.-
The validity of stipulations limiting the carrier’s liability is to be
determined by their reasonableness and their conformity to the sound
public policy, in accordance with which the obligations of the carrier
to the public are settled. It cannot lawfully stipulate for exemption
from liability, unless such exemption is just and reasonable, and
unless the contract is freely and fairly made. No contractual
limitation is reasonable which is subversive of public policy.

‘Par. 195. 7. What, Limitations of Liability Permissible.– a. Negligence – (1) Rule in America-(a) In absence of Organic or Staturiry Provisions Regulating Subject- aa. Majority Rule
– In the absence of statute, it is settled by the weight of authority
in the United States, that whatever limitations against its common-law
liability are permissible to a carrier, it cannot limit its liability
for injury to or loss of goods shipped, where such injury or loss is
caused by its own negligence. This is the common law doctrine and it
Bakes no difference that there is no statutory prohibition against
contracts of this character.

‘Par. 196. bb. Considerations on which Rule Based.-The
rule, it is said, rests on considerations of public policy. The
undertaking is to carry the goods, and to relieve the shipper from all
liability for loss or damage arising from negligence in performing its
contract is to ignore the contract itself. The natural effect of a
limitation of liability against negligence is to induce want of care on
the part of the carrier in the performance of its duty. The shipper and
the common carrier are not on equal terms; the shipper must send his
freight by the common carrier, or not at all; he is therefore entirely
at the mercy of the carrier unless protected by the higher power of the
law against being forced into contracts limiting the carrier’s
liability. Such contracts are wanting in the element of voluntary
assent.

‘Par. 197. cc . Application and Extent of Ruler.- (aa) Negligence of Servants.–
The rale prohibiting limitation or liability for negligence is often
stated as a prohibition of any contract relieving the carrier from loss
or damage caused by its own negligence or misfeasance, or that of its
servants; and it has been specifically decided in many cases that no
contract limitation will relieve the carrier from responsibility for
the negligence, unskillfulness, or carelessness of its employees.'”

(Cited in Ysmael and Co. vs. Barretto, 51 Phil. 90, 98, 99).

IN VIEW OF THE FOREGOING, the decision appealed from is affirmed, with costs against the appellant.

Concepcion, C.J., Reyes, Barrera, Dizon, Regala, Makalintal, Bengzon, and Sanchez, JJ., concur.

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^[1] Article 1732, New Civil Code.

^[2] Articles 1733, 1734, 1735, and 1745, New Civil Code.

^[3] Articles 1734, 1735, 1736, 1754, New Civil Code.