No. L-37750. May 19, 1978.

SWEET LINES, INC., petitioner vs. HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental,
Branch VII, LEOVIGILDO TANDOG, JR., and ROGELIO TIRO, respondents.

Civil Law; Common carriers; Contracts of adhesion, concept of.—It should be borne in mind, however,
that with respect to the fourteen (14) conditions—one of which is “Condition No. 14” which is in issue in
this case—printed at the back of the passage tickets, there are commonly known as “contracts of
adhesion,” the validity and/or enforceability of which will have to be determined by the peculiar
circumstances obtaining in each case and the nature of the conditions or terms sought to be enforced.
For “(W)hile generally, stipulations in a contract come about after deliberate drafting by the parties
thereto, . . . there are certain contracts almost all the provisions of which have been drafted only by one
party, usually a corporation. Such contracts are called contracts of adhesion, because the only
participation of the other party is the signing of his signature or his ‘adhesion’ thereto. Insurance
contracts, bills of lading, contracts of sale of lots on the installment plan fall into this category.” By the
peculiar circumstances under which contracts of adhesion are entered into—namely, that it is drafted
only by one party, usually the corporation, and is sought to be accepted or adhered to by the other
party, in this instance the passengers, private respondents, who cannot change the same and who are
thus made to adhere hereto on the “take it or leave it” basis—certain guidelines in the determination of
their validity and/or enforceability have been formulated in order to insure that justice and fair play
characterize the relationship of the contracting parties.

________________

* SECOND DIVISION.

362

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SUPREME COURT REPORTS ANNOTATED

Sweet Lines, Inc. vs. Teves

Same; Same; Acute shortage of interisland vessels taken judicial notice of by courts; Passengers of
interisland vessels not expected to examine their ticket for printed conditions therein; Reason.—It is a
matter of public knowledge, of which we can take judicial notice, that there is a dearth of and acute
shortage in inter-island vessels plying between the country’s several islands, and the facilities they offer
leave much to be desired. Thus, even under ordinary circumstances, the piers are congested with
passengers and their cargo waiting to be transported. The conditions are even worse at peak and/or the
rainy seasons, when passengers literally scramble to secure whatever accommodations may be availed
of, even through circuitous routes, and/or at the risk of their safety—their immediate concern, for the
moment, being to be able to board vessels with the hope of reaching their destinations. The schedules
are—as often as not if not more so—delayed or altered. This was precisely the experience of private
respondents when they were relocated to M/S “Sweet Town” from M/S “Sweet Hope” and then
allegedly “exposed to the scorching heat of the sun and the dust coming from the ship’s cargo of corn
grits,” because even the latter vessel was filled to capacity. Under these circumstances, it is hardly just
and proper to expect the passengers to examine their tickets received from crowded/congested
counters, more often than not during rush hours, for conditions that may be printed thereon, much less
charge them with having consented to the conditions, so printed, especially if there are a number of
such conditions in fine print, as in this case.

Same; Same; Condition 14 of shipping ticket which provides that all actions arising out of conditions and
provisions of the ticket irrespective of where issued shall be filed in the City of Cebu is void as it was
prepared solely at petitioner’s instance without participation of respondents; Courts take judicial notice
of fact that passengers availing of shipping facilities come from low income and less literate groups.—
Again, it should be noted that Condition No. 14 was prepared solely at the instance of the petitioner;
respondents had no say in its preparation. Neither did the latter have the opportunity to take the same
into account prior to the purchase of their tickets. For, unlike the small print provisions of insurance
contracts—the common example of contracts of adherence—which are entered into by the insured in
full awareness of said conditions, since the insured is afforded the opportunity to examine and consider
the same, passengers of inter-island vessels do not have the same chance, since their alleged adhesion is
presumed only from the fact that they purchased the passage tickets. It should also be stressed that
shipping

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Sweet Lines, Inc. vs. Teves

companies are franchise holders of certificates of public convenience and, therefore, possess a virtual
monopoly over the business of transporting passengers between the ports covered by their franchise.
This being so, shipping companies, like petitioner, engaged in inter-island shipping, have a virtual
monopoly of the business of transporting passengers and may thus dictate their terms of passage,
leaving passengers with no choice but to buy their tickets and avail of their vessels and facilities. Finally,
judicial notice may be taken of the fact that the bulk of those who board these inter-island vessels come
from the low-income groups and are less literate, and who have little or no choice but to avail of
petitioner’s vessels.

Same; Same; Condition 14 subversive of public policy on transfers of venue of actions; Philosophy
behind transfers of venue of actions; Public policy, concept of.—Condition No. 14 is subversive of public
policy on transfers of venue of actions. For, although venue may be changed or transferred from one
province to another by agreement of the parties in writing pursuant to Rule 4, Section 3, of the Rules of
Court, such an agreement will not be held valid where it practically negates the action of the claimants,
such as the private respondents herein. The philosophy underlying the provisions on transfer of venue
of actions is the convenience of the plaintiffs as well as his witnesses and to promote the ends of justice.
Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute
a claim in the City of Cebu, he would most probably decide not to file the action at all. The condition will
thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner had branches or
offices in the respective ports of call of its vessels and can afford to litigate in any of these places. Hence,
the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause
inconvenience to, much less prejudice, petitioner. Public policy is “. . . that principle of the law which
holds that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or
against the public good. . .”. Under this principle “. . . freedom of contract or private dealing is restricted
by law for the good of the public.” Clearly, Condition No. 14, if enforced, will be subversive of the public
good or interest, since it will frustrate in meritorious cases, actions of passenger claimants outside of
Cebu City, thus placing petitioner company at a decided advantage over said persons, who may have
perfectly legitimate claims against it. The said condition should, therefore, be declared void and
unenforceable, as contrary to public policy—to make the courts accessible to all who may have need of
their services.
364

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Sweet Lines, Inc. vs. Teves

Barredo, J., Concurring

Remedial Law; Venue; Civil Law; Common Carriers; Tickets issued by interisland vessel show that
actually no written agreement as to venue between the parties as contemplated by Sec. 3, Rule 4 of
Rules of Court; Where case already in respondent court and no showing that petitioner with its
resources would not suffer inconvenience, trial court can continue proceedings started in said court.—In
Hoechst Philippines, Inc. vs. Francisco Torres, et al., G. R. No. L-44351, promulgated May 18, 1978, We
made it clear that although generally, agreements regarding change of venue are enforceable, there
may be instances where for equitable considerations and in the better interest of justice, a court may
justify the laying of the venue in the place fixed by the rules instead of following the written stipulation
of the parties. In the particular case at bar, there is actually no written agreement as to venue between
the parties in the sense contemplated in Section 3 of Rule 4, which governs the matter. I take it that the
importance that a stipulation regarding change of the venue fixed by law entails is such that nothing less
than mutually conscious agreement as to it must be what the rule means. In the instant case, as well
pointed out in the main opinion, the ticket issued to private respondents by petitioner constitutes at
best a “contract of adhesion”. x x x It is common knowledge that individuals who avail of common
carriers hardly read the fine prints on such tickets to note anything more than the price thereof and the
destination designated therein. Under these circumstances, it would seem that, since this case is already
in respondent court and there is no showing that, with its more or less known resources as owner of
several interisland vessels plying between the different ports of the Philippines for sometime already,
petitioner would be greatly inconvenienced by submitting to the jurisdiction of said respondent court, it
is best to allow the proceedings therein to continue.

ORIGINAL ACTION in the Supreme Court. Prohibition with preliminary injunction.

The facts are stated in the opinion of the Court.

     Filiberto Leonardo, Abelardo C. Almario & Samuel B. Abadiano for petitioner.

     Leovigildo Vallar for private respondents.

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Sweet Lines, Inc. vs. Teves

SANTOS, J.:

This is an original action for Prohibition with Preliminary Injunction filed October 3, 1973 to restrain
respondent Judge from proceeding further with Civil Case No. 4091, entitled “Leovigildo D. Tandog, Jr.
and Rogelio Tiro v. Sweet Lines, Inc.” after he denied petitioner’s Motion to Dismiss the complaint, and
the Motion for Reconsideration of said order.1

Briefly, the facts of record follow. Private respondents Atty. Leovigildo Tandog and Rogelio Tiro, a
contractor by professions, bought tickets Nos. 0011736 and 011737 for Voyage 90 on December 31,
1971 at the branch office of petitioner, a shipping company transporting inter-island passengers and
cargoes, at Cagayan de Oro City. Respondents were to board petitioner’s vessel, M/S “Sweet Hope”
bound for Tagbilaran City via the port of Cebu. Upon learning that the vessel was not proceeding to
Bohol, since many passengers were bound for Surigao, private respondents per advice, went to the
branch office for proper relocation to M/S “Sweet Town”. Because the said vessel was already filled to
capacity, they were forced to agree “to hide at the cargo section to avoid inspection of the officers of
the Philippine Coastguard.” Private respondents alleged that they were, during the trip,” “exposed to
the scorching heat of the sun and the dust coming from the ship’s cargo of corn grits,” and that the
tickets they bought at Cagayan de Oro City for Tagbilaran were not honored and they were constrained
to pay for other tickets. In view thereof, private respondents sued petitioner for damages and for breach
of contract of carriage in the alleged sum of P110,000.00 before respondents Court of First Instance of
Misamis Oriental.2

Petitioner moved to dismiss the complaint on the ground of improper venue. This motion was premised
on the condition printed at the back of the tickets, i.e., Condition No. 14, which reads:

________________

1 Rollo, p. 2.

2 Id., p. 12, Annex “B”.

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SUPREME COURT REPORTS ANNOTATED

Sweet Lines, Inc. vs. Teves

“14. It is hereby agreed and understood that any and all actions arising out of the conditions and
provisions of this ticket, irrespective of where it is issued, shall be filed in the competent courts in the
City of Cebu.”3
The motion was denied by the trial court.4 Petitioner moved to reconsider the order of denial, but to no
avail.5 Hence, this instant petition for prohibition with preliminary injunction, alleging that the
respondent judge had departed from the “accepted and usual course of judicial proceeding” and “had
acted without or in excess or in error of his jurisdiction or in gross abuse of discretion.”6

In Our resolution of November 20, 1973, We restrained respondent Judge from proceeding further with
the case and required respondents to comment.7 On January 18, 1974, We gave due course to the
petition and required respondents to answer.8 Therefter, the parties submitted their respective
memoranda in support of their respective contentions.9

Presented thus for Our resolution is a question which, to all appearances, is one of first impression, to
wit—Is Condition No. 14 printed at the back of the petitioner’s passage tickets purchased by private
respondents, which limits the venue of actions arising from the contract of carriage to the Court of First
Instance of Cebu, valid and enforceable? Otherwise stated, may a common carrier engaged in inter-
island shipping stipulate thru a condition printed at the back of passage tickets to its vessels that any
and all actions arising out of the contract of carriage should be filed only in a particular province or city,
in this case the City of Cebu, to the exclusion of all others?

Petitioner contends that Condition No. 14 is valid and enforceable, since private respondents acceded to
it when they

_______________

3 Id., p. 18, Annex “C”.

4 Id., p. 20, Annex “D”.

5 Id., pp. 21 and 26, Annexes “E” and “F”

6 Rollo, p. 5; Petition, pars. 8, 9 & 10.

7 Id., p. 30.

8 Id., p. 47.

9 Id., pp. 66 and 76.

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Sweet Lines, Inc. vs. Teves

purchased passage tickets at its Cagayan de Oro branch office and took its vessel M/S “Sweet Town” for
passage to Tagbilaran, Bohol; that the condition fixing the venue of actions in the City of Cebu is proper
since venue may be validly waived, citing cases;10 that is an effective waiver of venue, valid and binding
as such, since it is printed in bold and capital letters and not in fine print and merely assigns the place
where the action arising from the contract is instituted, likewise citing cases;11 and that condition No.
14 is unequivocal and mandatory, the words and phrases “any and all”, “irrespective of where it is
issued,” and “shall” leave no doubt that the intention of Condition No. 14 is to fix the venue in the City
of Cebu, to the exclusion of all other places; that the orders of the respondent Judge are an
unwarranted departure from established jurisprudence governing the case; and that he acted without
or in excess of his jurisdiction in issuing the orders complained of.12

On the other hand, private respondents claim that Condition No. 14 is not valid; that the same is not an
essential element of the contract of carriage, being in itself a different agreement which requires the
mutual consent of the parties to it; that they had no say in its preparation, the existence of which they
could not refuse, hence, they had no choice but to pay for the tickets and to avail of petitioner’s
shipping facilities out of necessity; that the carrier “has been exacting too much from the public by
inserting impositions in the passage tickets too burdensome to bear;” that the condition which was
printed in fine letters is an imposition on the riding public and does not bind respondents, citing cases;
13 that while venue of actions

______________

10 Manila Railroad Company vs. Attorney General, 20 Phil. 523; Central Azucarera de Tarlac vs. de Leon,
56 Phil. 129; Marquez Lim Cay vs. Del Rosario, 55 Phil. 622; Abuton vs. Paler, 54 Phil. 519; De la Rosa vs.
De Borja, 53 Phil. 990; Samson vs. Carratela, 50 Phil. 647, See Rollo, p. 77.

11 Central Azucarera de Tarlac vs. de Leon, supra; Air France vs. Carrascoso, 18 SCRA, (Sept. 28, 1966), p.
155, Id., pp. 77 and 80.

12 Rollo, pp. 81-81, Memorandum of Petitioner.

13 Shewaram vs. PAL, Inc., G.R. No. L-20099, July 7, 1966, 17 SCRA 606-612; Mirasol vs. Robert Dollar
and Company, 53 Phil. 124, See Rollo, p. 79.

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Sweet Lines, Inc. vs. Teves

may be transferred from one province to another, such arrangement requires the “written agreement of
the parties”, not to be imposed unilaterally; and that assuming that the condition is valid, it is not
exclusive and does not, therefore, exclude the filing of the action in Misamis Oriental.14
There is no question that there was a valid contract of carriage entered into by petitioner and private
respondents and that the passage tickets, upon which the latter based their complaint, are the best
evidence thereof. All the essential elements of a valid contract, i.e., consent, cause or consideration and
object, are present. As held in Peralta de Guerrero, et al. v. Madrigal Shipping Co., Inc.,15

“It is a matter of common knowledge that whenever a passenger boards a ship for transportation from
one place to another he is issued a ticket by the shipper which has all the elements of a written contract,
Namely: (1) the consent of the contracting parties manifested by the fact that the passenger boards the
ship and the shipper consents or accepts him in the ship for transportation; (2) cause or consideration
which is the fare paid by the passenger as stated in the ticket; (3) object, which is the transportation of
the passenger from the place of departure to the place of destination which are stated in the ticket.”

It should be borne in mind, however, that with respect to the fourteen (14) conditions—one of which is
“Condition No. 14” which is in issue in this case—printed at the back of the passage tickets, these are
commonly known as “contracts of adhesion,” the validity and/or enforceability of which will have to be
determined by the peculiar circumstances obtaining in each case and the nature of the conditions or
terms sought to be enforced. For, “(W)hile generally, stipulations in a contract come about after
deliberate drafting by the parties thereto, . . . there are certain contracts almost all the provisions of
which have been drafted only by one party, usually a corporation. Such contracts are called contracts of
adhesion, because

________________

14 Rollo, pp. 66-70, Memorandum of Respondents, citing Polytrade Corporation v. Blanco, 30 SCRA 187-
191.

15 106 Phil. 485 (1959).

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Sweet Lines, Inc. vs. Teves

the only participation of the party is the signing of his signature or his ‘adhesion’ thereto. Insurance
contracts, bills of lading, contracts of sale of lots on the installment plan fall into this category.”16

By the peculiar circumstances under which contracts of adhesion are entered into—namely, that it is
drafted only by one party, usually the corporation, and is sought to be accepted or adhered to by the
other party, in this instance the passengers, private respondents, who cannot change the same and who
are thus made to adhere thereto on the “take it or leave it” basis—certain guidelines in the
determination of their validity and/or enforceability have been formulated in order to insure that justice
and fair play characterize the relationship of the contracting parties. Thus, this Court speaking through
Justice J.B.L. Reyes in Qua Chee Gan v. Law Union and Rock Insurance Co.,17 and later through Justice
Fernando in Fieldman Insurance v. Vargas,18 held—

“The courts cannot ignore that nowadays, monopolies, cartels and concentration of capital, endowed
with overwhelming economic power, manage to impose upon parties dealing with them cunningly
prepared ‘agreements’ that the weaker party may not change one whit, his participation in the
‘agreement’ being reduced to the alternative ‘to take it or leave it,’ labelled since Raymond Saleilles
‘contracts by adherence’ (contracts d’ adhesion) in contrast to those entered into by parties bargaining
on an equal footing. Such contracts (of which policies of insurance and international bill of lading are
prime examples) obviously call for greater strictness and vigilance on the part of the courts of justice
with a view to protecting the weaker party from abuses and imposition, and prevent their becoming
traps for the unwary.”

To the same effect and import, and, in recognition of the peculiar character of contracts of this kind, the
protection of the disadvantaged is expressly enjoined by the New Civil Code—

“In all contractual, property or other relations, when one of the parties is at a disadvantage on account
of his moral dependence, ig-
________________

16 Paras, Civil Code of the Philippines, Seventh ed., Vol. I, p. 80.

17 98 Phil. 95 (1955).

18 L-24833. 25 SCRA 70 (1968).

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Sweet Lines, Inc. vs. Teves

norance, indigence, mental weakness, tender age and other handicap,

the courts must be vigilant for his protection.”19

Considered in the light of the foregoing norms and in the context of circumstances prevailing in the
inter-island shipping industry in the country today, We find and hold that Condition No. 14 printed at
the back of the passage tickets should be held as void and unenforceable for the following reasons—
first, under circumstances obtaining in the inter-island shipping industry, it is not just and fair to bind
passengers to the terms of the conditions printed at the back of the passage tickets, on which Condition
No. 14 is printed in fine letters, and second, Condition No. 14 subverts the public policy on transfer of
venue of proceedings of this nature, since the same will prejudice rights and interests of innumerable
passengers in different parts of the country who, under Condition No. 14, will have to file suits against
petitioner only in the City of Cebu.
1. It is a matter of public knowledge, of which We can take judicial notice, that there is a dearth of and
acute shortage in inter island vessels plying between the country’s several islands, and the facilities they
offer leave much to be desired. Thus, even under ordinary circumstances, the piers are congested with
passengers and their cargo waiting to be transported. The conditions are even worse at peak and/or the
rainy seasons, when passengers literally scramble to secure whatever accommodations may be availed
of, even through circuitous routes, and/or at the risk of their safety—their immediate concern, for the
moment, being to be able to board vessels with the hope of reaching their destinations. The schedules
are—as often as not if not more so—delayed or altered. This was precisely the experience of private
respondents when they were relocated to M/S “Sweet Town” from M/S “Sweet Hope” and then
allegedly “exposed to the scorching heat of the sun and the dust coming from the ship’s cargo of corn
grits,” because even the latter vessel was filled to capacity.

_____________

19 Civil Code, Art. 24.

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Sweet Lines, Inc. vs. Teves

Under these circumstances, it is hardly just and proper to expect the passengers to examine their tickets
received from crowded/congested counters, more often than not during rush hours, for conditions that
may be printed thereon, much less charge them with having consented to the conditions, so printed,
especially if there are a number of such conditions in fine print, as in this case.20

Again, it should be noted that Condition No. 14 was prepared solely at the instance of the petitioner;
respondents had no say in its preparation. Neither did the latter have the opportunity to take the same
into account prior to the purchase of their tickets. For, unlike the small print provisions of insurance
contracts—the common example of contracts of adherence—which are entered into by the insured in
full awareness of said conditions, since the insured is afforded the opportunity to examine and consider
the same, passengers of inter-island vessels do not have the same chance, since their alleged adhesion is
presumed only from the fact that they purchased the passage tickets.

It should also be stressed that shipping companies are franchise holders of certificates of public
convenience and, therefore, possess a virtual monopoly over the business of transporting passengers
between the ports covered by their franchise. This being so, shipping companies, like petitioner,
engaged in inter-island shipping, have a virtual monopoly of the business of transporting passengers and
may thus dictate their terms of passage, leaving passengers with no choice but to buy their tickets and
avail of their vessels and facilities. Finally, judicial notice may be taken of the fact that the bulk of those
who board these inter-island vessels come from the low-income groups and are less literate, and who
have little or no choice but to avail of petitioner’s vessels.

2. Condition No. 14 is subversive of public policy on transfers of venue of actions. For, although venue
may be changed or transferred from one province to another by agreement of the parties in writing
pursuant to Rule 4, Section 3, of

______________

20 Condition No. 14 is the last condition printed at the back of the 4 x 6 inches passage tickets.

372

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SUPREME COURT REPORTS ANNOTATED

Sweet Lines, Inc. vs. Teves

the Rules of Court, such an agreement will not be held valid where it practically negates the action of
the claimants, such as the private respondents herein. The philosophy underlying the provisions on
transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote
the ends of justice.21 Considering the expense and trouble a passenger residing outside of Cebu City
would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the
action at all. The condition will thus defeat, instead of enhance, the ends of justice. Upon the other
hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to
litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in
the instant case, will not cause inconvience to, much less prejudice, petitioner.

Public policy is “. . . that principle of the law which holds that no subject or citizen can lawfully do that
which has a tendency to be injurious to the public or against the public good. . .”.22 Under this principle
“. . . freedom of contract or private dealing is restricted by law for the good of the public.”23 Clearly,
Condition No. 14, if enforced, will be subversive of the public good or interest, since it will frustrate in
meritorious cases, actions of passenger claimants outside of Cebu City, thus placing petitioner company
at a decided advantage over said persons, who may have perfectly legitimate claims against it. The said
condition should, therefore, be declared void and unenforceable, as contrary to public policy—to make
the courts accessible to all who may have need of their services.

WHEREFORE, the petition for prohibition is DISMISSED. The restraining order issued on November 20,
1973, is hereby LIFTED and SET ASIDE. Costs against petitioner.

     Fernando (Chairman), Aquino, Concepcion Jr., JJ., concur.

     Barredo, J., concurs with a separate opinion.

Antonio, J., reserves his vote.

__________________

21 See Nicolas v. Reparations Commission, et al., G. R. No. L-28649 (21 May 1975), 64 SCRA 111, 116.
22 Ferrazini v. Gsell, 34 Phil. 711-712 (1916).

23 Id., p. 712.

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Sweet Lines, Inc. vs. Teves

Petition dismissed Order lifted and set aside.

BARREDO, J.: Concurring—

I concur in the dismissal of the instant petition. Only a few days ago, in Hoechst Philippines, Inc. vs.
Francisco Torres, et al., G. R. No. L-44351, promulgated May 18, 1978, We made it clear that although
generally, agreements regarding change of venue are enforceable, there may be instances where for
equitable considerations and in the better interest of justice, a court may justify the laying of the venue
in the place fixed by the rules instead of following written stipulation of the parties.

In the particular case at bar, there is actually no written agreement as to venue between the parties in
the sense contemplated in Section 3 of Rule 4, which governs the matter. I take it that the importance
that a stipulation regarding change of the venue fixed by law entails is such that nothing less than
mutually conscious agreement as to it must be what the rule means. In the instant case, as well pointed
out in the main opinion, the ticket issued to private respondents by petitioner constitutes at best a
“contract of adhesion”. In other words, it is not that kind of a contract where the parties sit down to
deliberate, discuss and agree specifically on all its terms, but rather, one which respondents took no part
at all in preparing, since it was just imposed upon them when they paid for the fare for the freight they
wanted to ship. It is common knowledge that individuals who avail of common carriers hardly read the
fine prints on such tickets to note anything more than the price thereof and the destination designated
therein.

Under these circumstances, it would seem that, since this case is already in respondent court and there
is no showing that, with its more or less known resources as owner of several interisland vessels plying
between the different ports of the Philippines for sometime already, petitioner would be greatly
inconvenienced by submitting to the jurisdiction of said respondent court, it is best to allow the
proceedings therein to continue. I cannot conceive of any juridical injury such a step

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Sweet Lines, Inc. vs. Teves

can cause to anyone concerned.

I vote to dismiss the petition.

Petition dismissed Order lifted and set aside.

Notes.—The contract of air carriage generates a relation attended with a public duty. Neglect or
malfeasance of the carrier’s employees could give ground for an action for damages. (Zulueta vs. Pan
American World Airways, Inc., 43 SCRA 397).
In case of death of or injuries to passengers, common carriers are presumed to have been at fault or to
have acted negligently, unless they prove that they observed extraordinary diligence as prescribed in
articles 1733 and 1744 of the New Civil Code. (Davila vs. Philippine Air Lines, 49 SCRA 497).

The registered owner of a common carrier is liable for damages resulting from a breach of contract of
carriage. The transferee is, however, liable to the registered owner of the vehicle for the damages cause
to passengers. (Perez vs. Gutier-rez, 53 SCRA 149).

A provisional claim filed before the delivery of the cargo, in anticipation of any possible loss or damage
while the cargo is in the arrastre operator’s custody is premature and specualtive. (American Insurance
Company of Newark vs. Manila Port Service, 72 SCRA 18; Manila Port Service vs. Fortune Insurance &
Surety Co., Inc., 45 SCRA 65).

The 15-day notice to the arrastre operator of any damage or loss of cargo is reckoned from the date the
consignee or claimant learns of the loss or damage or from the date when with the exercise of due
diligence, information regarding the loss or damage could have been obtained. (New Zealand Insurance
Co., Ltd. vs. Manila Port Service, 19 SCRA 801) The reason for this rule is that before the claimant or
consignee learns of the shortage or damage he is in no position to make a claim since the goods are in
the arrastre contractor’s custody; otherwise the arrastre operator may escape liability by simply
withholding knowledge as to the loss or damage until after the

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Sweet Lines, Inc. vs. Teves

expiration of the 15-day period from the discharge of the last package from the carrying vessel (Yu
Kimteng Construction Corporation vs. Manila Railroad Company, 15 SCRA 292).
1. Statutory Construction: General terras may be restricted by specific words, with the result that the
general language will be limited by specific language which indicates the statute’s object and purpose.
(Colgate Palmolive Philippines, Inc. vs. Gimenez, 1 SCRA 267.)

2. Contracts: Where the provisions of a contract are ambiguous, such ambiguity must be construed
against the party who drafted the same; and it appearing that the contract in question must be
construed against appellant. (Coscolluela vs. Valderrama, 2 SCRA 1095.)

A written document speaks a uniform language; the spoken word could be notoriously unreliable. If only
to achieve stability in the relations between passenger and air carrier, adherence to the terms of a ticket
is desirable. (Air France vs. Carrascoso, 18 SCRA 155.)

A contract between two persons cannot bind another not a party thereto, merely because he is aiyare of
such contract and fcog acted with knowledge thereof. (Manila Port Service vs. Court of Appeals, 20 SCRA
1214.)

3. Venue: The venue of civil actions in the Court of First Instance is where the plaintiff resides or where
the defendant resides or found (Section 1, Rule 5, Rules of Court), but the latter phrase (may be found)
applies only to cases where the defendant has no residence in the Philippines. (Portillo vs. Reyes, 3 SCRA
311.)

The stipulation that “the parties agree to sue and be sued in the courts of Manila, “does not preclude
the filing of suits in the residence of plaintiff or defendant under Section 2(b), Rule 4, Rules of Court, in
the absence of qualifying or restrictive words in the agreement which would indicate that Manila alone
is the venue agreed upon by the parties (Polytrade Corporation vs. Blanco, 30 SCRA 187.)

——o0o——

376 E. S. Baltao & Co. Inc. vs. China Banking Corporation, 83 SCRA 355, No. L-35093, No. L-37750 May
19, 1978