Digest Contracts Conlaw.docx

COMPAGNIE DE COMMERCE ET DE NAVIGATION D’EXTREME ORIENT, plaintiff vs. THE HAMBURG AMERIKA PACKETFACHT ACTIEN GESELLSCHAFT, defendant GR No. L-10986

March 31, 1917

FACTS: On June 17, 1914, the defendant chartered and hired unto the plaintiff the steamship or vessel called the Sambia for the purpose of carrying a full cargo of rice, rice bran and cargo meal from the port of Saigon to the port of Dunkirk and Hamburg. The plaintiff loaded and shipped on board the Sambia at the said port of Saigon , destined for said ports of Dunkirk and Hamburg. On August 12, 1914, the said steamship Sambia sailed from the port of Saigon, but without the consent or approval of plaintiff as the character of said vessel and the owner of said cargo, and against the protest of the plaintiff, the said vessel wholly failed, omitted and refused to sail unto said destinations, but wilfully abandoned the said stipulated voyage and has remained at Manila continuously until the present day. On September 10, 1914, the defendant and in the absence of plaintiff, sought and obtained by means of petition filed the authority of this court to discharge the said cargo of the plaintiff from the said vessel and to sell the same at private sale, which they did. Under and by virtue of said failure, refusal, and neglect of the defendant to safely carry the said merchandise and cargo as in said charter party and bills of lading provided, the plaintiff instituted a complaint to the ISSUE: Whether the court has jurisdiction to the case RULING: Yes. In the court below defendant not only appeared and answered without objecting to the court's jurisdiction, but sought affirmative relief; and it is very clear that defendant cannot be permitted to submit the issues raised by the pleadings for adjudication, without objection, and then, when unsuccessful, assail the court's jurisdiction in reliance upon a stipulation in the charter party which the parties were at entire liberty to waive if they so desired. We do not stop therefore to rule upon the contention of opposing counsel, that a contractual stipulation, for a general arbitration cannot be invoked to oust our courts of their jurisdiction, under the doctrine announced in the cases of Wahl and Wahl vs. Donaldson, Sims & Co., and Cordoba vs. Conde; and that this doctrine should be applied in the case at bar, notwithstanding the fact that the contract was executed in England, in the absence of averment and proof that under the law of England compliance with, or an offer to comply with such a stipulation constitutes a condition precedent to the institution of judicial proceeding for the enforcement of the contract. PUROMINES, INC., petitioner, vs. COURT OF APPEAL and PHILIPPBROTHERS OCEANIC, INC., respondents. G.R. No. 91228. March 22,1993 Facts: Puromines, Inc. and Makati Agro Trading, Inc. entered into a contract withprivate respondents Philipp Brothers Oceanic, Inc. for the sale of prilled Urea inbulk. The Sales Contract provided, among others an arbitration clause whichstates, thus:

"9. Arbitration Any disputes arising under this contract shall be settled byarbitration in London in accordance with the Arbitration Act 1950 and anystatutory amendment or modification thereof. XXXX" The shipment covered by 3 bills of lading was loaded on MV Liliana Dimitrova withPhilipp Brothers as charterer of said vessel. When the shipment covered by Bill ofLading 1 and 3 were discharged in Manila, it was found to be in bad order andcondition, caked, hardened and lumpy, discoloured and contaminated with rustand dirt.Puromines filed a complaint with the Trial Court for breach of contract of carriageagainst Maritime, as ship-agent and Philipp Brothers, as charterer. Philipp filed amotion to dismiss on the ground that Petitioner should comply with the arbitrationclause in the sales contract. Puromines opposed contending that the sales contractdoes not include contract of carriage, therefore, the latter is not covered by theagreement on arbitration. Issue: Whether or not the arbitration clause in the sales contract covers claims forviolations of contract of carriage. Held: Yes. The sales contract is comprehensive enough to include claims fordamages arising from carriage and delivery of the goods. Puromines derives itsright to the cargo from the bill of lading which is the contract of affreightmenttogether with the sales contract. Consequently, it is bound by the provisions andterms of the said bill of lading and of the arbitration clause incorporated in the salescontract.Responsibility to third persons for goods shipped on board a vessel followsthe vessel's possession and employment. Assuming the cause of action is basedon contract of carriage, it must be first determined what kind of charter party hadwith the ship owner to determine liability. If it is a contract of affreightment, thecharterer is not liable as possession is still with owner. If it is a charter of demise or bareboat, then the charterer is liable as it is considered the owner and thereforewould be liable for damage or loss.In any case, whether the liability of respondent should be based on thesame contract or that of the bill of lading, the parties are nevertheless obligated torespect the arbitration provisions on the sales contract and/or the bill of lading.Petitioner being a signatory and party to the sales contract cannot escape from hisobligation under the arbitration clause as stated therein. Arbitration has been held valid and constitutional. The rule now is thatunless the agreement is such as absolutely to close the doors of the courts againstthe parties, which agreement would be void, the courts will look with favor uponsuch amicable arrangements and will only interfere with great reluctance toanticipate or nullify the action of the arbitrator.WHEREFORE, petition is hereby DISMISSED and decision of the court a quo is AFFIRMED. The Bremen v. Zapata Off-shore Co. 407 U.S. 1, 92 S. Ct. 1907 (1972) RULE: Forum-selection clauses are prima facie valid and should be enforced unless enforcement is shown by the resisting party to be unreasonable under the circumstances. This is the correct doctrine to be followed by federal district courts sitting in admiralty. FACTS:

Petitioner, a German corporation, contracted with respondent, a United States corporation, to transport an oil rig from Louisiana to the Adriatic Sea. During transportation, the rig was damaged and was towed to Tampa, Florida, where respondent filed suit. Petitioner asked the district court to enforce the forum-selection clause contained in the contract placing jurisdiction in England. Petitioner also filed a complaint,seeking exoneration or limitation of liability. The district court refused to enforce the clause. The appellate court affirmed. Petitioner sought review by certiorari of the judgment. The Supreme Court of the United States vacated the appellate court's judgment and remanded the case. ISSUE: Was the forum selection clause in an international agreement between petitioner and respondent valid? ANSWER: Yes. CONCLUSION: Petitioner’s filing its limitation complaint did not preclude it from relying on the forum clause. Further, the agreement was a freely negotiated international commercial agreement and whatever inconvenience respondent would suffer by being forced to litigate in the contractual forum as it agreed to do was clearly foreseeable at the time of contracting. As a result, the forum-selection clause was valid, and the case was remanded for a determination of whether enforcement was unreasonable.

PAN AMERICAN WORLD AIRWAYS, INC. vs. RAPADAS Nature: Petition to review ruling of the Court of Appeals that Pan Am cannot avail of a limitation of liabilities for lost baggages of passenger. Facts:On January 16, 1975, Private respondent Jose Rapadas held passenger ticket and baggage claim check for petitioner’s flight No. 841 with the route from Guam to Manila .While standing in line to board the flightat the Guam airport, private respondent Rapadas was ordered by petitioner's handcarry control agent tocheck-in his Samsonite attache case. Private respondent Rapadas protested pointing to the fact that other co-passengers were permitted to handcarry bulkier baggages. He stepped out of the line only to go back again at the end of it to try if he can get through without having to register his attache case. However, thesame man in charge of handcarry control did not fail to notice him and ordered him again to register his baggage. For fear that he would miss the plane if he insisted and argued on personally taking the valisewith him, he acceded to checking it in. He then gave his attache case to his brother who happened to bearound and who checked it in for him, but without declaring its contents or the value of its contents.Upon arriving in Manila private respondent Rapadas claimed and was given all his checked-in baggagesexcept the attache case. He sent his son, Jorge Rapadas to request for the search of the missing luggage.The petitioner exerted efforts to locate the luggage through the Pan American World Airways-ManilaInternational Airport (PAN AM-MIA) Baggage Service but they were not able to locate the attache case.Private respondent Rapadas thens received a letter from the petitioner's counsel offering to settle the claimfor the sum of $160.00 representing the petitioner's alleged limit of liability for loss or damage to a passenger's personal property under the contract of carriage between Rapadas and PAN AM. Refusing toaccept this kind of settlement, Rapadas filed the instant action for damages.The lower court ruled in favor of Rapadas after finding no stipulation giving notice to the baggageliability limitation. On appeal, the Court of Appeals affirmed the trial court decision. Hence, this petition. Issue:

Whether or not a passenger is bound by the terms of a passenger ticket declaring the limitations of carrier’s liability

Held: Yes. The Warsaw Convention, as amended, specifically provides that it is applicable tointernational carriage which it defines in Article 1, par. 2 as follows:(2) For the purposes of this Convention, the expression "international carriage" means any carriage inwhich, according to the agreement between the parties, the place of departure and the place of destination, whether or not there be a breach in the carriage or a transhipment, are situated either withinthe territories of two High Contracting Parties or within the territory of a single High Contracting Partyif there is an agreed stopping place within the territory of another State, even if that State is not a HighContracting Party. Carriage between two points within the territory of a single High Contracting Party without an agreed stopping place within the territory of another State is not international carriage for the purposes of this Convention. ("High Contracting Party" refers to a state which has ratified or adhered tothe Convention, or which has not effectively denounced the Convention [Article 40A(l)]). Nowhere in the Warsaw Convention, as amended, is such a detailed notice of baggage liabilitylimitations required. Nevertheless, it should become a common, safe and practical custom among air carriers to indicate beforehand the precise sums equivalent to those fixed by the Convention. TheConvention governs the availment of the liability limitations where the baggage check is combined withor incorporated in the passenger ticket. In the case at bar, the baggage check is combined with the passenger ticket in one document of carriage. The passenger ticket complies with Article 3, which provides:(c) a notice to the effect that, if the passenger's journey involves an ultimate destination or stop in acountry other than the country of departure, the Warsaw Convention may be applicable and that theConvention governs and in most cases limits the liability of carriers for death or personal injury and inrespect of loss of or damage to baggage.What the petitioner is concerned about is whether or not the notice, which it did not fail to state inthe plane ticket and which it deemed to have been read and accepted by the private respondent will beconsidered by this Court as adequate under the circumstances of this case. As earlier stated, the Courtfinds the provisions in the plane ticket sufficient to govern the limitations of liabilities of the airline for loss of luggage. The passenger, upon contracting with the airline and receiving the plane ticket, wasexpected to be vigilant insofar as his luggage is concerned. If the passenger fails to adduce evidence toovercome the stipulations, he cannot avoid the application of the liability limitations.The facts show that the private respondent actually refused to register the attache case and choseto take it with him despite having been ordered by the PANAM agent to check it in. In attempting toavoid registering the luggage by going back to the line, private respondent manifested a disregard of airline rules on allowable handcarried baggages. Prudence of a reasonably careful person also dictates thatcash and jewelry should be removed from checked-inluggage and placed in one's pockets or in ahandcarried Manila-paper or plastic envelope.The alleged lack of enough time for him to make a declaration of a higher value and to pay thecorresponding supplementary charges cannot justify his failure to comply with the requirement that willexclude the application of limited liability.

HONGKONG SHANGAI BANKING CORPORATION v. SHERMAN G.R. No. 72494 August 11, 1989 FACTS In 1981, Eastern Book Supply Service PTE, Ltd., (Eastern) a company incorporated inSingapore applied w/, & was granted by the Singapore branch of HSBC an overdraft facility inthe max amount of Singapore $200,000 (w/c amount was subsequently increased to Singapore$375,000) w/ interest at 3% over HSBC prime rate, payable monthly, on amounts due under said overdraft facility. As a security for the repayment by Eastern of sums advanced by HSBC toit through the aforesaid overdraft facility, in 1982, Jack Sherman, Dodato Reloj, and a Robin deClive Lowe, all of whom were directors of Eastern at such time, executed a Joint and SeveralGuarantee in favor of HSBC whereby Sherman, Reloj and Lowe agreed to pay, jointly andseverally, on demand all sums owed by Eastern to HSBC under the aforestated overdraftfacility. The Joint and Several Guarantee provides that: “This guarantee and all rights, obligations andliabilities arising hereunder shall be construed and determined under and may be enforced inaccordance with the laws of the Republic of Singapore. We hereby agree that the Courts of Singapore shall have jurisdiction over all disputes arising under this guarantee.” Eastern failed to pay its obligation. Thus, HSBC demanded payment of the obligation fromSherman & Reloj, conformably w/ the provisions of the Joint and Several Guarantee. Inasmuchas Sherman & Reloj still failed to pay, HSBC filed a complaint for collection of a sum of moneyagainst them. Sherman & Reloj filed a motion to dismiss on the grounds that (1) the court hasno jurisdiction over the subject matter of the complaint, and (2) the court has no jurisdiction over the person of the defendants. ISSUE W/N Philippine courts should have jurisdiction over the suit. RULING YES. While it is true that "the transaction took place in Singaporean setting" and that the Jointand Several Guarantee contains a choice-of-forum clause, the very essence of due processdictates that the stipulation that "this guarantee and all rights, obligations & liabilities arisinghereunder shall be construed & determined under & may be enforced in accordance w/ the lawsof the Republic of Singapore. We hereby agree that the Courts in Singapore shall have jurisdiction over all disputes arising under this guarantee" be liberally construed. One basicprinciple underlies all rules of jurisdiction in International Law: a State does not have jurisdictionin the absence of some reasonable basis for exercising it, whether the proceedings are in rem quasi in rem or in personam. To be reasonable, the jurisdiction must be based on someminimum contacts that will not offend traditional notions of fair play and substantial justice.Indeed, as pointed-out by HSBC at the outset, the instant case presents a very odd situation. Inthe ordinary habits of life, anyone would be disinclined to litigate before a foreign tribunal, w/more reason as a defendant. However, in this case, Sherman & Reloj are Philippine residents (afact which was not disputed by them) who would rather face a complaint against them before aforeign court and in the process incur considerable expenses, not to mention inconvenience,than to have a Philippine court try and resolve the case. Their stance is hardly comprehensible,unless their ultimate intent is to evade, or at least delay, the payment of a just obligation.The defense of Sherman & Reloj that the complaint should have been filed in Singapore isbased merely on technicality. They did not even claim, much less prove, that the filing of

theaction here will cause them any unnecessary trouble, damage, or expense. On the other hand,there is no showing that petitioner BANK filed the action here just to harass Sherman & Reloj.The parties did not thereby stipulate that only the courts of Singapore, to the exclusion of all therest, has jurisdiction. Neither did the clause in question operate to divest Philippine courts of jurisdiction. In International Law, jurisdiction is often defined as the light of a State to exerciseauthority over persons and things w/in its boundaries subject to certain exceptions. Thus, aState does not assume jurisdiction over travelling sovereigns, ambassadors and diplomaticrepresentatives of other States, and foreign military units stationed in or marching through Stateterritory w/ the permission of the latter's authorities. This authority, which finds its source in theconcept of sovereignty, is exclusive w/in and throughout the domain of the State. A State iscompetent to take hold of any judicial matter it sees fit by making its courts and agenciesassume jurisdiction over all kinds of cases brought before them.

Title: PHILIPPINE AIRLINES, INC., petitioner, 
vs. COURT OF APPEALS and GILDA C. MEJIA, respondents. This is definitely not a case of first impression. The incident, which eventuated in the present controversy, is a drama of common contentious occurrence between passengers and carriers whenever loss is sustained by the former. Withal, the exposition of the factual ambience and the legal precepts in this adjudication may hopefully channel the assertiveness of passengers and the intransigence of carriers into the realization that at times a bad extrajudicial compromise could be better than a good judicial victory.

Assailed in this petition for review is the decision of respondent Court of Appeals in CA-G.R. CV No. 42744 1 which affirmed the decision of the lower court 2 finding petitioner Philippine Air Lines, Inc. (PAL) liable as follows: ACCORDINGLY, judgment is hereby rendered ordering defendant Philippine Air Lines, Inc., to pay plaintiff Gilda C. Mejia: (1) P30, 000.00 by way of actual damages of the microwave oven; (2) P10, 000.00 by way of moral damages; (3) P20, 000.00 by way of exemplary damages; (4) P10, 000.00 as attorney's fee; All in addition to the costs of the suit.

Defendant's counterclaim is hereby dismissed for lack of merit.

Mejia shipped through PAL 1 microwave oven from San Francisco to Manila. Upon arrival, she discovered that the front glass door was broken and the oven could not be used. Mejia filed action against PAL. PAL denied liability and alleged that it acted in conformity with the Warsaw Convention

Whether or not the air waybill should be strictly construed against petitioner?

Although the airway bill is binding between the parties, the liability of Pal is not limited on the provisions of the airway bill. While the Warsaw Convention is law in the Philippines, the Philippines being a signatory thereto, it does not operate as an exclusive enumeration of the instances when a carrier shall be liable for breach of contract or as an absolute limit of the extent of liability nor does it preclude the operation of the Civil Code or other pertinent laws. Also, the willful misconduct and insensitivity of the officers of PAL in not attempting to explain the damage despite due demand and the unexplained delay in acting on her claim amounted to bad faith and renders unquestionable its liability for damages

Adhesion contract is one that is not negotiated by the parties having been drafted by the dominant party and usually embodied in a standardized form. It is called a contract of adhesion because the participation of 1 party is limited to affixing her signature.

American President Lines, Ltd. vs. CA Facts: American President Lines (APL) vessel President Washington(Carrier for short) receiveand loaded on board at Los Angeles, California, the subject of the shipment of one (1) unit of Submersible Jocky Pump, contained in (3) boxes, complete and in good order condition,covered by Commercial Invoice No. 602956, and Packing List. It was for transport to Manila infavor or Lindale Development Corporation, the consignee. The CARRIER, thru ForwardersDirect Container Lines, Inc., issued its clean Bill of Lading No. CHI-MNL-120. The shipment wasinsured by FGU Ins. Corp. for P481, 842.24The defendant CARRIER transshipped the shipment in Hongkong on board the vessel MS Partas‟, which arrived at the Port of Manila, on September 6, 1987. On the same date, the shipment was discharged and turned over to Marina Port Services, Inc.(Arrastre0, with one boxin bad order condition, showing signs of having beenpreviously tampered; hence, covered by a Turn over Survey Cargoes No. A-08851. The cargoremained

with the ARRASTRE for ten days until it was withdrawn on April 16, 1987 by thedefendant broker which delivered the same to the consignee, aforementioned, at its warehouse,where the said shipment was examined and inventoried, and the one box discharged from the CARRIER‟s vessel in bad order condition, was found short of one piece waster cone and onepiece Main Relief valued, per invoice, at P28, 248.58.Private respondent FGU Ins. Corp. filed a complaint for recovery of a sum of money against APL, Marina Port Services, Inc., and LCM Brokerage Co., Inc. The trial court found in favor of private respondent and ordered APL to pay private respondent the amount of P28, 248.58. Inactual damages, Issue: What law is applicable the Civil Code provisions or COGSA? Held: The Civil Code. With regard to the contention of the carrier that COGSA should control in this case, the same is of no moment. Art. 1763 of the New Civil Code provides that “the laws of the country to which the goods are transported shall govern the liability of the common carrier in case of loss, destruction and deterioration.” This means that the law of the Philippines on theNew Civil Code. Under 1766 of NCC, “in all matter not regulated by this Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by Special Laws.” Art. 1736-1738, NCC governs said rights and obligations. Therefore, although Sec 4(5)of COGSA states that the carrier shall not be liable in an amount exceeding $500 per packageunless the value of the goods had been declared by the shipper and asserted in the bill of lading, said section is merely supplementary to the provisions of the New Civil Code. KLM v. CA July 22, 1975 SUMMARY: The Mendozas approached Tirso Reyes of the Phil. Travel Bureau with regard to a world tour they wanted to undertake. The itinerary indicated that three segments of the trip would be by KLM. One of the routes they would take was Barcelona-Lourdes, with the knowledge that the only carrier serving that route was Aer Lingus. After Reyes made the necessary reservations, KLM secured the seat reservations with the exception of Aer Lingus. When the Mendozas left for their trip, the coupon for Aer Lingus was marked “on request.” When the Mendozas were in Germany, they acquired confirmation from Aer Lingus. At Barcelona Airport, the Mendozas’ daughter and a niece were allowed to board, but the Mendozas themselves were off loaded from the Aer Lingus flight upon orders of the Aer Lingus manager, who brusquely shoved them aside and shouted at them. The Mendozas were then forced to take a train from Barcelona to Lourdes. They subsequently filed a complaint for damages against KLM. In ruling in favor of the Mendozas, the SC said that the “Warsaw Convention” cannot be applied to this case DOCTRINE: The Warsaw Convention cannot be applied in cases wherein no delay or accident occurred. [Implied] Delay is to be interpreted in its ordinary meaning. Being ‘bumped off’ a flight does not constitute delay in the ordinary sense.

FACTS: In 1965, Spouses Mendoza approached Tirso Reyes, manager of a branch of the Philippine Travel Bureau 1, a travel agency, for a world tour they intended to make with their daughter and a niece. According to the itinerary given by Reyes, three segments of the trip, the longest, was via KLM. The spouses decided that one of the routes they will take was a Barcelona-Lourdes route with knowledge that only one airline, Aer Lingus, served it. Reyes made the necessary reservations with the approval of the spouses. In response to this, KLM secured the seat reservations from the carriers which would ferry the Spouses and their daughter and a niece throughout their trip, with the exception of Aer Lingus. When the Mendozas left the Philippines, they were issued KLM tickets for the entire trip. However, their coupon for Aer Lingus was marked “on request”. When they were in Germany, they went to the KLM office and obtained a confirmation from Aer Lingus. At the airport in Barcelona, the Mendozas and their companions checked in for their flight to Lourdes. However, although their daughter and niece were allowed to take the flight, the spouses Mendozas were off loaded on orders of the Aer Lingus manager, who brusquely shoved them aside with the aid of a policeman and shouted at them (Conos! Ignorantes Filipinos!). Mrs. Mendoza later called the manager of Aer Lingus and asked that they be given the means to get to Lourdes, but their request was denied. Acting on the advice of a stranger, the spouses Mendoza took a train ride to Lourdes instead. Thus, they filed a complaint for damages against KLM for breach of contract of carriage. The trial court decided in favor of the Mendozas. On appeal, the CA affirmed the decision. KLM’s arguments: 1. They should be exculpated on the basis of the “Warsaw Convention 2” of which the Philippine Government is a party by adherence. According to Art. 30 of said convention, the aggrieved party can only take action against the carrier if an accident or delay occurred. Since no such accident or delay occurred, they should be free from liability. 2. Under the “conditions of the contract” placed on the inside front cover of the ticket, “[a] carrier issuing a ticket or checking baggage for carriage over the lines of others does so only as agent.” 3. All that KLM did was to request seat reservations. Therefore, KLM merely acted as a ticket-issuing agent. Spouses Mendoza’s arguments: 1. Art. 30 of the “Warsaw Convention” cannot be applied to this case for it involves not action or delay but willful misconduct on the part of KLM’s agent, the Aer Lingus. Art. 253 of the “Warsaw Convention” is instructive on the matter. The travel agency was an agent for international air carriers which are members of the International Air Transport Association [IATA], of which both KLM and Aer Lingus are members. ART. 30. (1) In the case of transportation to be performed by various successive carriers and failing within the definition set out in the third paragraph of Article I, each carrier who accepts passengers, baggage, or goods shall be subject to the rules set out in the convention, and shall be deemed to be one of the contracting parties to the contract of transportation insofar as the contract deals with that part of transportation which is performed under his supervision. 1 2

(2) In the case of transportation of this nature, the passenger or his representative can take action only against the carrier who performed the transportation during which the accident or the delay occured, save in the case where, by express agreement, the first carrier has assumed liability for the whole journey. ART. 25. (1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his willful misconduct or by such default on his part as, in accordance with the law of the court to which the case is submitted, is considered to be equivalent to willful misconduct. 3 3

(2) Similarly, the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused under the same circumstances

2. The condition referred to by KLM on the “conditions of the contract” is written in so small a print that a magnifying glass is needed to view it. 3. The first paragraph of the same conditions indubitably states that the contract was one of continuous air transportation. 4. The contract of air transportation was exclusively between the Spouses Mendoza and KLM, the latter merely endorsing its performance to other carriers like Aer Lingus. ISSUES: WON KLM is liable for breach of contract of carriage RULING: YES, KLM is liable for breach of contract of carriage. RATIO: 1. The provision of the “Warsaw Convention” being relied upn by KLM is inapplicable. It presupposes that accident or delay occurred, neither of which happened at Barcelona Airport. Instead, it was Aer Lingus that refused to take the Mendozas to their destination. 2. KLM’s reliance on the “conditions of the contract” is untenable. Not only was the fine print so small, no steps were taken by KLM to inform the Mendozas of such conditions. Therefore, the Mendozas cannot be bound by the provision in question wherein KLM’s unilaterally declared that it was a mere ticket-issuing agent. 3. The same conditions also say that the carriage to be provided by several carriers is to be regarded as a single operation, which is the direct opposite of KLM’s theory that the Mendoxas entered into several independent contracts with the carriers that took them to their destinations. 4. The breach of KLM’s guarantee was further aggravated by the highly arbitrary and discourteous act of the Aer Lingus official. DISPOSITIVE: ACCORDINGLY, the judgment of the Court of Appeals dated August 14, 1969 is affirmed, at KLM's cost.

Santos III vs. Northwest Orient Airlines G.R. No. 101538, June 23, 1992 INTERNATIONAL LAW: Warsaw Convention is constitutional, a treaty commitment voluntarilyassumed by the Philippine government and, as such, has the force and effect of law in thiscountry. INTERNATIONAL LAW: Warsaw Convention, when applicable: To all "internationaltransportations of persons by aircraft for hire." Whether the transportation is "international" isdetermined by the contract of the parties, which in the case of passengers is the ticket. Whenthe contract of carriage provides for the transportation of the passenger between certaindesignated terminals "within the territories of two High Contracting Parties," the provisions of theConvention automatically apply and exclusively govern the rights and liabilities of the airline andits passenger. INTERNATIONAL LAW: Warsaw Convention, jurisdiction: Place of Destination vis-a-vis AgreedStopping Place: The contract is a single undivided operation, beginning with the place of departure and ending with the ultimate destination. The use of the singular in this expressionindicates the

by any agent of the carrier acting within the scope of his employment. (emphasis by respondents)

understanding of the parties to the Convention that every contract of carriage hasone place of departure and one place of destination. An intermediate place where the carriagemay be broken is not regarded as a "place of destination." FACTS:Petitioner is a minor and a resident of the Philippines. Private respondent Nortwest Orient Airlines (NOA) is a foreign corporation with principal office in Minnesota, U.S.A. and licensed todo business and maintain a branch office in the Philippines. The petitioner purchased from NOAa round-trip ticket in San Francisco, U.S.A. In December 19, 1986, the petitioner checked in theat the NOA counter in the San Francisco airport for his departure to Manila. Despite a previousconfirmation and re-confirmation, he was informed that he had no reservation for his flight for Tokyo to Manila. He therefore had to be wait-listed. On March 12, 1987, the petitioner suedNOA for damages in RTC Makati. NOA moved to dismiss the complaint on the ground of lack of jurisdiction. ISSUE:Whether or not Article 28 (1) of the Warsaw Convention is in accordance with the constitution soas to deprive the Philippine Courts jurisdiction over the case HELD: Art. 28. (1) An action for damage must be brought at the option of the plaintiff, in the territory of one of the High Contracting Parties, either before the court of the domicile of the carrier or of hisprincipal place of business, or where he has a place of business through which the contract hasbeen made, or before the court at the place of destination.Constitutionality of the Warsaw ConventionThe Republic of the Philippines is a party to the Convention for the Unification of Certain RulesRelating to International Transportation by Air, otherwise known as the Warsaw Convention. Ittook effect on February 13, 1933. The Convention was concurred in by the Senate, through itsResolution No. 19, on May 16, 1950. The Philippine instrument of accession was signed byPresident Elpidio Quirino on October 13, 1950, and was deposited with the Polish governmenton November 9, 1950. The Convention became applicable to the Philippines on February 9,1951. On September 23, 1955, President Ramon Magsaysay issued Proclamation No. 201,declaring our formal adherence thereto. "to the end that the same and every article and clausethereof may be observed and fulfilled in good faith by the Republic of the Philippines and thecitizens thereof."The Convention is thus a treaty commitment voluntarily assumed by the Philippine governmentand, as such, has the force and effect of law in this country.Does the Warsaw Convention apply in this case?By its own terms, the Convention applies to all international transportation of persons performedby aircraft for hire.International transportation is defined in paragraph (2) of Article 1 as follows:(2) For the purposes of this convention, the expression "international transportation" shall meanany transportation in which, according to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break in the transportation or atransshipment, are situated [either] within the territories of two High Contracting Parties . . .Whether the transportation is "international" is determined by the contract of the parties, whichin the case of passengers is the ticket. When the contract of carriage provides for thetransportation of the passenger between certain designated terminals "within the territories of two High Contracting Parties," the provisions of the Convention automatically apply andexclusively govern the rights and liabilities of the airline and its passenger.Since the flight involved in the case at bar is international, the same being from the UnitedStates to the Philippines and back to the United States, it is subject to the provisions of theWarsaw Convention, including Article 28(1), which enumerates the four places where an actionfor damages may be brought.Does Article 28(1) refer to Jurisdiction or Venue?...where the matter is governed by the Warsaw Convention, jurisdiction takes on a dual concept.Jurisdiction in the international sense must be established in accordance with Article 28(1) of the Warsaw Convention, following which the jurisdiction of a particular court must beestablished pursuant to the applicable domestic law. Only after the question of which court has jurisdiction is determined will the issue of venue be taken up. This second question shall begoverned by the law of the court to which the case is submitted. Was the case properly filed in the Philippines, since the plaintiff‟s destination was Manila?

The place of destination, within the meaning of the Warsaw Convention, is determined by theterms of the contract of carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioner's ticket shows that his ultimate destination is SanFrancisco. Although the date of the return flight was left open, the contract of carriage betweenthe parties indicates that NOA was bound to transport the petitioner to San Francisco fromManila. Manila should therefore be considered merely an agreed stopping place and not thedestination. Article 1(2) also draws a distinction between a "destination" and an "agreed stopping place." It isthe "destination" and not an "agreed stopping place" that controls for purposes of ascertaining jurisdiction under the Convention. The contract is a single undivided operation, beginning with the place of departure and endingwith the ultimate destination. The use of the singular in this expression indicates theunderstanding of the parties to the Convention that every contract of carriage has one place of departure and one place of destination. An intermediate place where the carriage may bebroken is not regarded as a "place of destination."WHEREFORE, the petition is DENIED, with costs against the petitioner. It is so ordered.