15. MONICO PUENTEBELLA, ET AL. vs. NEGROS COAL CO., LTD., ET AL

Facts:

These are appeals involved two actions for recovery of damages for the sum of P50,000 and P40,000, respectively.

It is alleged that the plaintiffs, having bound themselves to plant sugar cane which the defendants, in turn, promised to mill in a sugar central which they were to erect, complied with their contract, but the latter did not erect the central in due time, this delay causing the former to lose all of the said crop. It is further prayed that the contracts executed for that purpose be cancelled.

It is alleged in the answer of the defendants that the Negros Coal Co., Ltd., was dissolved by an order of the Court of First Instance of Iloilo, but that its rights, actions and obligations were placed in charge of the commercial firm of Hijos de I. de la Rama & Co., of which the defendant Esteban de la Rama is the manager; that due to  force majeure, fortuitous events, and other circumstances independent of the will of the defendants, they were unable to complete the construction of the sugar central within due time and that the plaintiffs, after the construction of the central, refused to mill their cane and did nothing to lessen their losses.

Moreover, in the first case it is alleged as a special defense, that it having been agreed in the contract upon which the plaintiffs base their action, that before commencing any litigation they would submit their differences to arbitrators, the plaintiffs have done nothing to comply with this stipulation. Indeed, paragraph 17 of the contract says:

"That they shall submit each and every one of the differences that may arise between the party of the first part and the party of the second part to the decision of arbitrators, two of whom shall be selected by the party of the first part and two by the party of the second part, who, in case of a disagreement, shall select a fifth arbitrator, and they shall respect and abide by the decision of said arbitrators or any three of them, as the case may be."

As may be seen, this clause states absolutely, and not as a mere condition precedent to judicial action, that all differences between the contracting parties shall be submitted to arbitrators, who decision the parties shall respect and abide by, and the clause is, therefore, void...

The contract was executed in Iloilo by Esteban de la Rama, in his capacity as President of the Negros Coal Co., Ltd., on the one hand, and by Juliana Puentebella, Pedro Ferrer and Francisco Ferrer on the other, which contract contains, among other things, a stipulation that the party of the first part shall erect a sugar central in the sitio denominated Labilabi, Escalante, Occidental Negros, with a railway across the land of the party of the second part for the transportation of sugar cane to the central, the said party of the second part binding itself to mill the sugar cane in said central, receiving 45 per cent of the total amount of the sugar manufactured; and the party of the second part grants an easement of way on their land to the party of the first part and, at its option, 'to mill or not to mill' its cane in the said sugar central.

Mrs. Juliana Puentebella, in company with her son Francisco Ferrer, also made a trip to Iloilo for a conference with Esteban de la Rama and to advise him that their cane, as well as the cane of her sons Pedro and Francisco was ripe and some of it over-ripe, and asked permission to mill it in the San Carlos sugar Central, Occidental Negros, in view of the fact that neither the sugar central of the Negros Coal Co., Ltd., nor the railway had been constructed, but Mr. De la Rama laid down certain conditions which the petitioner considered burdensome; so nothing was done about milling the cane in the San Carlos Central. As a result, the cane belonging to the Puentebellas and the Ferrers was

left in the fields without being milled, and with the exception of a small quantity belonging to the Puentebellas which they had sent to the San Carlos Central for milling was drying out and deteriorating and became a complete loss.

Esteban de la Rama alleged that the delay in the construction of the central was due to  force majeure, fortuitous events and other circumstances independent of the will of the defendants.

The plaintiffs allege, furthermore, that on account of not having harvested their crops, they could not prepare their fields for the cultivation of the ratoon crop for the next agricultural year, an having lost the crop for that year, they pray for damages for such loss.

Issue: WON the court committed an error in not dismissing the complaint of Messrs. Ferrer, the plaintiffs not having complied with the condition precedent to submit their difference to arbitrators before filing their complaint.

Held:

The contention is without merit. The arbitration clause in paragraph 17 of the Ferrer contract, Exhibit A, expressly provides that the parties shall "abide by the decision of said arbitrators or any three of them, as he case may be." The clause does not merely to the courts; it provides for a final determination of legal rights by arbitration. In other words, an attempt was make to take the disputes between the parties out of the jurisdiction of the courts. An agreement to that effect is contrary to public policy and is not binding upon the parties.

Note: yung may *** yung important part

14. PHILIPPINE AIRLINES, INC. vs. COURT OF APPEALS and GILDA C. MEJIA

***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.

Facts:

Plaintiff Gilda C. Mejia shipped thru defendant, Philippine Airlines, one (1) unit microwave oven, with a gross weight of 33 kilograms from San Francisco, U.S.A. to Manila, Philippines. Upon arrival, however, of said article in Manila, Philippines, plaintiff discovered that its front glass door was broken and the damage rendered it unserviceable. Demands both oral and written were made by plaintiff against the defendant for the reimbursement of the value of the damaged microwave oven, and transportation charges paid by plaintiff to defendant company. But these demands fell on deaf ears.

Plaintiff Gilda C. Mejia filed the instant action for damages against defendant in the lower court.

In its answer, defendant Airlines alleged inter alia, by way of special and affirmative defenses, that the court has no jurisdiction over the case; that plaintiff has no valid cause of action against defendant since it acted only in good faith and in compliance with the requirements of the law, regulations, conventions and contractual commitments; and that defendant had always exercised the required diligence in the selection, hiring and supervision of its employees. 

The trial court rule in favor of the private respondent.

It was transpired in the court a quo that the plaintiff suffered sleepless nights when defendant refused to pay her (for) the broken oven and claims P10,000.00 moral damages, P20,000.00 exemplary damages, P10,000.00 attorney's fees plus P300.00 per court appearance and P15,000.00 monthly loss of income in her business as the plaintiff is engaged in (the) catering and restaurant business. Hence, the necessity of the oven. On the other hand, defendant Philippine Airlines thru its employees Rodolfo Pandes and Vicente Villaruz posited that plaintiff's claim was not investigated until after the filing of the formal claim. Also plaintiff's claim was filed out of time under paragraph 12, a (1) of the Air Waybill which provides: "(a) the person entitled to delivery must make a complaint to the carrier in writing in case: (1) of visible damage to the goods, immediately after discovery of the damage and at the latest within 14 days from the receipt of the goods.

Respondent Court of Appeals similarly ruled in favor of private respondent by affirming in full the trial court's judgment, with costs against petitioner.

WON the trial court erred in:

I. ruling in favor of the private in respondent on the ground that since the air waybill is a contract of adhesion, its provisions should be strictly construed against herein petitioner;

II. finding that herein petitioner's liability is not limited by the provisions of the air waybill; andIII. in awarding to private respondent of moral and exemplary damages, attorney's fees and

litigation expenses.

Held:

I. The trial court relied on the ruling in the case of Fieldmen's Insurance Co., Inc. vs. Vda. De Songco, et al.  in finding that the provisions of the air waybill should be strictly construed against petitioner. It ruled that under our jurisprudence, the Air Waybill is a contract of adhesion considering that all the provisions thereof are prepared and drafted only by the carrier The only participation left of the other party is to affix his signature thereto. In the earlier case of Angeles v. Calasanz, the Supreme Court ruled that "the terms of a contract [of adhesion] must be interpreted against the party who drafted the same." The court found nothing objectionable about the lower court's reliance upon the Fieldmen's Insurance case, the principles wherein squarely apply to the present petition.

II. Petitioner insists that both respondent court and the trial court erred in finding that petitioner's liability, if any, is not limited by the provisions of the air waybill, for, as evidence of the contract of carriage between petitioner and private respondent, it substantially states that the shipper certifies to the correctness of the entries contained therein and accepts that the carrier's liability is limited to US $20 per kilogram of goods lost, damaged or destroyed unless a value is declared and a supplementary charge paid. In refutation, private respondent explains that the reason for the absence of a declaration of a higher value was precisely because petitioner's personnel in San Francisco, U.S.A. advised her not to declare the value of her cargo, which testimony has not at all been rebutted by petitioner. This being so, petitioner is estopped from faulting private respondent for her failure to declare the value of the microwave oven.

It cannot be denied that the attention of PAL through its personnel in San Francisco was sufficiently called to the fact that private respondent's cargo was highly susceptible to breakage as would necessitate the declaration of its actual value. Petitioner had all the opportunity to check the condition and manner of packing prior to acceptance for shipment,  as well as during the preparation of the air waybill by PAL's Acceptance Personnel based on information supplied by the shipper, and to reject the cargo if the contents or the packing did not meet the company's required specifications. Certainly, PAL could not have been otherwise prevailed upon to merely accept the cargo.

There is no absolute obligation on the part of a carrier to accept a cargo. Where a common carrier accepts a cargo for shipment for valuable consideration, it takes the risk of delivering it in good condition as when it was loaded. And if the fact of improper packing is known to the carrier or its personnel, or apparent upon observation but it accepts the goods notwithstanding such condition, it is not relieved of liability for loss or injury resulting therefrom.

II. Petitioner ascribes ultimate error in the award of moral and exemplary damages and attorney's fees in favor of private respondent in that other than the statement of the trial court that petitioner acted in bad faith in denying private respondent's claim, which was affirmed by the Court of Appeals, there is no evidence on record that the same is true. Petitioner insists that its failure to deliver the oven in the condition in which it was shipped could hardly be considered as amounting to bad faith. 

Private respondent counters that petitioner's failure to deliver the microwave oven in the condition in which it was received can be described as gross negligence amounting to bad faith, on the further consideration that it failed to prove that it exercised the extraordinary diligence required by law, and that no explanation whatsoever was given as to why the front glass of the oven was broken. 

Respondent appellate court was in full agreement with the trial court's finding of bad faith on the part of petitioner as a basis for the award of the aforestated damages, declaring that aside from the fact that defendant-appellant acted in bad faith in breaching the contract and in denying plaintiff's valid claim for damages, plaintiff-appellee underwent profound distress, sleepless nights, and anxiety upon knowledge of her damaged microwave oven in possession of defendant-appellant, entitling her to the award of moral and exemplary damages and certainly plaintiff-appellant's unjust refusal to comply with her valid demand for payment, thereby also entitling her to reasonable attorney's fees.

***paki-emphasize* On this note, the case at bar goes into the annals of our jurisprudence after six years and recedes into the memories of our legal experience as just another inexplicable inevitability. We will never know exactly how many man-hours went into the preparation, litigation and adjudication of this simple dispute over an oven, which the parties will no doubt insist they contested as a matter of principle. One thing, however, is certain. As long as the first letter in "principle" is somehow outplaced by the peso sign, the courts will always have to resolve similar controversies although mutual goodwill could have dispensed with judicial recourse.

13. G.R. No. R-190-P September 15, 1987

HON. JAMES B. PAJARES vs. DEPUTY SHERIFF ELIZER ALIPANTE

Facts:

Elizer Alipante, Deputy Sheriff of Camarines Sur, was charged with dishonesty, dereliction of duty and conduct prejudicial to the best interest of the service under a sworn complaint filed by Judge

James Pajares, RTC Branch 19, Naga City. The case was referred for investigation, report and recommendation to the Executive Judge of the Regional Trial Court at Naga City. Hearings were held on the matter before Acting Executive Judge Juan Llaguno, at which respondent was represented by counsel.

On the basis of the evidence adduced before him, the Investigating Judge opined that the guilt of the respondent for neglect of duty and inefficiency and incompetence in the performance of official duties, had been sufficiently established. According to him, the evidence proved that respondent as deputy sheriff undertook to enforce a writ of preliminary attachment issued in a civil case of the Court of First Instance entitled "Freshie Sta. Rosa-Yador v. Dario M. Javier, et al.," that pursuant to the writ he levied on several items of personalty in the possession of two of the defendants; that he deposited the articles in a private warehouse owned by Samson Cagonia, at Naga City; that somehow, and without respondent's knowledge, the plaintiff were thereafter able to withdraw the property from the warehouse, and respondent sheriff has since been unable to locate and retrieve the same; and that respondent failed to file a return on the writ of preliminary attachment, bestirring himself to do so only when required to do so under threat of disciplinary action by the complaint Judge. The Investigating Judge also rejected respondent's proferred excuse of pressure of work for his failure to file his report on his implementation of the writ of attachment, as well as his claim that his inability to retain official custody of the attached property was rendered inconsequential by the fact that an amicable settlement had been subsequently reached by the parties concerned and the plaintiffs had credited the defendants with the value of the property levied on.

The Investigating Judge however declared the other charges against respondent as not having been adequately substantiated by the evidence submitted.

Issue: WON the respondent is guilty of gross negligence

Held: The find no cogent reason after reviewing the record to disturb His Honor's findings. The court agree that the respondent is guilty of gross negligence and conduct seriously prejudicial to the best interest of the service. The evidence shows respondent to have been completely unmindful of his duties, so indifferent to his responsibilities as to be scornful of them, and utterly uncaring of the rights of the parties. He has by his conduct shown himself to be unfit for public service, specially that connected with the administration of justice, which demands the highest sense of dedication and zeal in the protection and conservation of the rights and interests of litigants as well as in assuring the efficacy and integrity of the judicial process.