G.R. No. L-3678; February 29, 1952
JOSE MENDOZA, plaintiff-appellant, vs. PHILIPPINE AIR LINES, INC., defendant-appellee.

FACTS

In 1948, plaintiff-appellant Jose Mendoza, owner of the Cita Theater in Naga, Camarines Sur, contracted with LVN Pictures, Inc. to exhibit the film “Himala ng Birhen” during the town fiesta on September 17 and 18. He made extensive preparations, including printing and distributing posters and advertising. On September 17, LVN Pictures delivered the film can to defendant-appellee Philippine Air Lines, Inc. (PAL) for shipment to the Pili Air Port near Naga. PAL issued Air Way Bill No. 317133. The film was loaded on Flight 113, which arrived at Pili Air Port in the afternoon of September 17, but due to the fault of PAL’s employees, the film was not unloaded and was brought back to Manila. Mendoza inquired about the film, and after radiograms and searches, the film was located on September 18 and shipped to Pili on September 20. Mendoza received and exhibited the film but missed the fiesta crowd, resulting in a loss of expected profits of P3,000. He filed an action for damages against PAL. The trial court found that Mendoza suffered damages due to PAL’s negligence but dismissed the complaint, holding that the damages were not foreseen or foreseeable at the time of shipment because neither the shipper nor the consignee had informed PAL of the special circumstances (the fiesta exhibition). PAL relied on a condition in the Air Way Bill stating it was not obligated to carry the goods by any specified aircraft or time.

ISSUE

Whether PAL, as a common carrier, is liable for the special damages (lost profits) suffered by Mendoza due to the delay in delivering the film, despite not having been informed of the special circumstances surrounding the shipment.

RULING

No. The Supreme Court affirmed the trial court’s decision, holding that PAL is not liable for the special damages (lost profits) because these damages were not foreseen or could not have been foreseen at the time the obligation (contract of carriage) was constituted. The Court, without making a definite ruling on the civil or commercial nature of air transportation, inclined to regard it as commercial and analogous to land and water transportation, and considered PAL a common carrier. However, whether governed by the Civil Code (Article 1107) or the Code of Commerce (Article 358, which provides for damages caused by delay), the applicable principle is that only damages that were foreseen or foreseeable at the time of the contract are recoverable. Since neither the shipper (LVN Pictures) nor the consignee (Mendoza) informed PAL of the special need to deliver the film for the fiesta, the loss of profits was not foreseeable. The Court noted that Mendoza could have taken steps to secure his interest, such as obtaining the film well in advance or making a special contract with the carrier highlighting the circumstances and potential damages. The negligence of PAL in failing to unload the film was established, but liability for damages is limited to those foreseeable. The decision of the lower court was affirmed, with no costs.