G.R. No. L-20099 July 7, 1966
PARMANAND SHEWARAM, plaintiff and appellee, vs. PHILIPPINE AIR LINES, INC., defendant and appellant.

FACTS

Plaintiff Parmanand Shewaram was a paying passenger on defendant Philippine Air Lines, Inc.’s flight from Zamboanga City to Manila on November 23, 1959. He checked in three pieces of baggage, including a suitcase. The defendant’s personnel in Zamboanga mistagged this suitcase for Iligan (I.G.N.) instead of Manila (MNL). Consequently, upon arrival in Manila, the suitcase did not arrive with his flight as it was sent to Iligan. A different suitcase, belonging to another passenger bound for Iligan, was offered to the plaintiff, which he refused as it was not his. The plaintiff’s suitcase was later located and sent to Manila, arriving on November 24, 1959. When recovered, the suitcase could be opened despite the plaintiff having left it locked, and a transistor radio and a Rollflex camera, with a total value of P373.00, were missing. The trial court found that the suitcase was tampered with and the items were lost due to the negligence of the defendant’s employees. The defendant admitted the mistagging error. The defendant sought to limit its liability to P100.00 based on a condition printed on the back of the plane ticket stub, which was part of its tariff regulations filed with the Civil Aeronautics Board, stating that liability for checked baggage is limited to P100.00 per ticket unless a higher value is declared and an additional charge paid. The plaintiff did not declare a higher value.

ISSUE

1. Whether the plaintiff-appellee is bound by the provisions of the tariff regulations and the conditions of carriage printed on the ticket stub, thereby limiting the defendant-appellant’s liability to P100.00.
2. Whether the defendant-appellant’s liability should be limited to P100.00 or if it should be held liable for the full actual damages of P373.00.

RULING

The Supreme Court affirmed the decision of the Court of First Instance. The plaintiff is not bound by the conditions of carriage printed on the ticket stub. The requirements of Article 1750 of the New Civil Code for a valid stipulation limiting liability—that the contract must be reasonable and just and has been fairly and freely agreed upon—were not met. The conditions were printed in small letters on the back of the ticket, and the defendant admitted that passengers do not sign the ticket. Therefore, it could not be presumed that the plaintiff was aware of and had fairly agreed to those conditions. Furthermore, a common carrier cannot limit its liability for loss caused by its own negligence. The loss of the plaintiff’s items was due to the negligence of the defendant’s employees (mistagging and resulting tampering). As a common carrier bound to observe extraordinary diligence, the defendant is liable for the full actual damages of P373.00, plus legal interest and attorney’s fees as awarded by the lower court. The defense of limited liability based on the printed conditions is invalid under the circumstances.