G. Martini Ltd. vs. Macondray & Co. (GR 13972, 28 July 1919)
En Banc, Street (J): 7 concur

Facts: In September 1916, G. Martini, Ltd. arranged with Macondray & Co. Inc., as agents of the Eastern and Australian Steamship Company, for the shipment of 219 cases or packages of chemical products from Manila, Philippine Islands, to Kobe, Japan. On 15 September 1916 (Friday), Martini applied to Macondray for necessary space on the steamship Eastern, and received a shipping order, which constituted authority for the ship’s officers to receive the cargo aboard.  The mate’s receipt did not come to Martini’s hand until Monday night, but as Martini was desirous of obtaining the bills of lading on the Saturday morning preceding in order that he might negotiate them at the bank, a request was made for the delivery of the bills of lading on that day To effectuate this, Martini was required to enter into the written obligation, calling itself a “letter of guarantee.” In conformity with the purpose of this document the bills of lading were issued, and the negotiable copies were, upon the same day, negotiated at the bank by the plaintiff for 90% of the invoice value of the goods. The bills of lading contained on their face, conspicuously stenciled, the words “on deck at shipper’s risks.” The mate’s receipt, received by the plaintiff two days later also bore the notation “on deck at shipper’s risk,” written with pencil, and evidently by the officer who took the cargo on board and signed the receipt.  Martini says that upon seeing the stamped “on deck at shipper’s risks”, he at once called the attention of S. Codina thereto, the latter being an employee of the house whose duty it was to attend to all shipments of merchandise and who in fact had entire control of all matters relating to the shipping of the cargo. Letters by Martini, warning Macondray that it would be held liable for loss or damage if the goods were stowed on deck, were dispatched by messenger, and upon receiving it, Macondray called Codina by telephone at about 4.30 p.m. and, referring to the communication just received, told him that  Macondray could not accept the cargo for transportation otherwise than on deck and that if Martini were dissatisfied, the cargo could be discharged from the ship. The goods were embarked at Manila on the steamship Eastern and were carried to Kobe on the deck of that ship, on 16 September 1916. Upon arrival at the port of destination it was found that the chemicals comprised in the shipment had suffered damage from the effects of both fresh and salt water.

An action was instituted by Martini to recover the amount of the damage thereby occasioned. In the Court of First Instance judgment was rendered in favor of Martini for the sum of P34,997.56, with interest from 24 March 1917, and costs of the proceeding. From this judgment, Macondray appealed.

The Supreme Court reversed the judgment appealed from and absolved Macondray from the complaint; with no express pronouncement will be made as to the costs of either instance.

1.    Damage was caused by water
The damage was caused by water, either falling in the form of rain or splashing aboard by the action of wind and waves.

2.    Paragraph 19 of the several bills of lading issued for transportation of the cargo
Paragraph 19 of the several bills of lading issued for transportation of the cargo reads “(19) Goods signed for on this bill of lading as carried on deck are entirely at shipper’s risk, whether carried on deck or under hatches, and the steamer is not liable for any loss or damage from any cause whatever. ”

3.    Shipper ordinarily produce mate’s receipt to agents of ship’s company
Ordinarily the shipper is supposed to produce the mate’s receipt to the agents of the ship’s company, who thereupon issue the bill of lading to the shipper. When, however, the shipper desires to procure the bill of lading before he obtains the mate’s receipt, it is customary for him to enter into a written obligation, binding himself, among other things, to abide by the terms of the mate’s receipt. Herein,

4.    Contents of the “Letter of Guarantee”
The “Letter of Guarantee” dated 16 September 1916, is of the tenor “In consideration of your signing us clean B/L for the undermentioned cargo per above steamer to be shipped on or under deck at ship’s option, for Kobe without production of the mate’s receipt, we hereby guarantee to hold you free from any responsibility by your doing so, and for any expense should the whole or part of the cargo be shut out, or otherwise, and to hand you said mate’s receipt as soon as it reaches us and to abide by all clauses and notations on the same.”

5.    Martini did nothing to discharge cargo
In order to get the cargo off certain formalities were necessary which could not be accomplished, as for instance, the return of the mate’s receipt (which had not yet come to Martini’s hands), the securing of a permit from the customs authorities, and the securing of an order of discharge from the steamship company. In view of the fact that Martini did nothing whatever looking towards the discharge of the cargo, not even so much as to notify Macondray that the cargo must come off, the proof relative to the practicability of discharge is inconclusive. If Martini had promptly informed Macondray of their resolve to have the cargo discharged, and the latter had nevertheless permitted the ship to sail without discharging it, there would have been some ground for Martini’s contention that its consent had not been given for the goods to be carried on deck. Needless to say the Court attached no weight to the statement of Codina that he was unable to get Macondray by telephone in order to communicate directions for the discharge of the cargo.

6.    Inferred reasons why Martini allowed cargo to be carried away
It is inferable that one reason why Martini allowed the cargo to be carried away without being discharged, was that the bills had been discounted and to stop the shipment would have entailed the necessity of refunding the money which the bank had advanced, with the inconveniences incident thereto. Another reason apparently was that Martini discerned, or thought he discerned the possibility of shifting the risk so as to make it fall upon the ship’s company.

7.    Cordina not deceived into signing document; Guaranty permit stowage either on or under deck at ship’s option
There was no space in the hold to take the cargo and it was unnecessary to consider whether the chemicals to be shipped were of an explosive or inflammable character, such as to require stowage on deck. By reason of the fact that the cargo had to be carried on deck at all events, if carried at all, the guaranty was so drawn as to permit stowage either on or under deck at the ship’s option; and the attention of Codina must have been drawn to this provision because Macondray refused to issue the bills of lading upon a guaranty signed by Codina upon another form, which contained no such provision. The messenger between the two establishments who was sent for the bills of lading accordingly had to make a second trip and go back for a letter of guaranty signed upon the desired form.

8.    Martini duly notified as to manner in which cargo was shipped, failed to give necessary instructions manifesting acquiescence
Although Martini would have greatly preferred for the cargo to be carried under the hatches, they nevertheless consented for it to go on deck. Codina, if attentive to the interests of his house, must have known from the tenor of the guaranty to which his signature is affixed that Macondray had reserved the right to carry it on deck, and when the bills of lading were delivered to Martini they plainly showed that the cargo would be so carried. Martini was duly affected with notice as to the manner in which the cargo was shipped. No complaint was made until after the bills of lading had been negotiated at the bank. When the manager of Martini first had his attention drawn to the fact that the cargo was being carried on deck, he called Codina to account, and the latter found it to his interest to feign surprise and pretend that he had been deceived by Macondray. Even then there was time to stop the shipment, but Martini failed to give the necessary instructions, thereby manifesting acquiescence in the accomplished fact.  Martini must thus be held to have assented to the shipment of the cargo on deck and that they are bound by the bills of lading in the form in which they were issued.

9.    Clean bill of lading and stowage of cargo on deck without consent; The Paragon
If a clean bill of lading had been issued and Martini had not consented for the cargo to go on deck, the ship’s company would have been liable for all damage which resulted from the carriage on deck. In the case of The Paragon (1 Ware, 326; 18 Fed. Cas. No. 10708), decided in 1836 in one of the district courts of the United States, it appeared that cargo was shipped from Boston, Massachusetts, to Portland, Maine, upon what is called a clean bill of lading, that is, one in the common form without any memorandum in the margin or on its face showing that the goods are to be carried on deck. It was proved that the shipper had not given his consent for carriage on deck. Nevertheless, the master stowed the goods on deck; and a storm having arisen, it became necessary to jettison them. None of the cargo in the hold was lost. It was thus evident that although the cargo in question was lost by peril of the sea, it would not have been lost except for the fact that it was being carried on deck. It was held that the ship was liable.

10.    The Paragon; Loss by fortuitous event, general average
The goods, having been lost by the dangers of the seas, both the master and the vessel are exempted from responsibility within the common exemption in bills of lading; and the goods having been thrown overboard from necessity, and for the safety of the vessel and cargo, as well as the lives of the crew, that it presents a case for a general average or contribution, upon the common principle that when a sacrifice is made for the benefit of all, that the loss shall be shared by all. In every contract of affreightment, losses by the dangers of the seas are excepted from the risks which the master takes upon himself, whether the exception is expressed in the contract or not. The exception is made by the law, and falls within the general principle that no one is responsible for fortuitous events and accidents of major force. Casus fortuitous nemo praestat.

11.    The Paragon; Loss by fortuitous event, exceptions
The general law is subject to an exception, that when the inevitable accident is preceded by a fault of the debtor or person bound without which it would not have happened, then he becomes responsible for it. Thus, the master is responsible for the safe and proper stowage of the cargo, and there is no doubt that by the general maritime law he is bound to secure the cargo safely under deck. If the master carries goods on deck without the consent of the shipper, he does it at his own risk. If they are damaged or lost in consequence of their being thus exposed, he cannot protect himself from responsibility by showing that they were damaged or lost by the dangers of the seas. When the shipper consents to his goods being carried on deck, he takes the risk upon himself of these peculiar perils.

12.    Van Horn vs. Taylor; When shipper had no notice of cargo being carried on deck
Van Horn vs. Taylor (2 La. Ann., 587; 46 Am. Dec., 558), was a case where goods stowed on deck were lost in a collision. The court found that the ship carrying these goods was not at fault, and that the shipper had notice of the fact that the cargo was being carried on deck. It was held that the ship was not liable. Said the court: “It is said that the plaintiff’s goods were improperly stowed on deck; that the deck load only was thrown overboard by the collision, the cargo in the hold not being injured. The goods were thus laden with the knowledge and implied approbation of the plaintiff. He was a passenger on board the steamer, and does not appear to have made any objection to the goods being thus carried, though the collision occurred several days after the steamer commenced her voyage.”

13.    The Thomas P. Thorn; Risk of damage to shipper when contract is to carry upon deck
In the case of The Thomas P. Thorn (8 Ben., 3; 23 Fed., Cas. No. 13927), decided in the District Court in the State of New York, it appeared that tobacco was received upon a canal boat, with the understanding that it was to be carried on deck, covered with tarpaulins. Upon arrival at its destination it was found damaged by water, for the most part on the top, and evidently as a consequence of rains. At the same time a quantity of malt stowed below deck on the same voyage was uninjured. In discussing the question whether upon a contract to carry on deck, the vessel was liable for the wetting of the tobacco, the court said:  “It is manifest that the injury to the tobacco arose simply from the fact that it was carried on deck. The malt, carried below, although an article easily injured, received no damage, and the voyage was performed with usual care, and without disaster. Indeed, there is evidence of a statement by the libelant, that tobacco must of necessity be injured by being carried on deck. But, under a contract to carry upon deck, the risk of any damage resulting from the place of carriage rests upon the shipper, and, without proof of negligence causing the damage, there can be no recovery. Here the evidence shows that all reasonable care was taken of the tobacco during its transportation; that the manner of stowing and covering it was known to and assented to by the shipper; and the inference is warranted that the injury arose, without fault of the carrier, from rain, to which merchandise transported on deck must necessarily be in some degree exposed. Any loss arising from damaged thus occasioned is to be borne by the shipper.”

14.    Lawrence vs. Minturn; Goods stowed on deck with consent of shipper jettisoned during storm entitled to general average
Lawrence vs. Minturn (17 How [U.S,], 100; 15 L ed., 58), was a case where goods stowed on deck with the consent of the shipper were jettisoned during a storm at sea. In discussing whether this cargo was entitled to general average, the Supreme Court of the United States said:  “The maritime codes and writers have recognized the distinction between cargo placed on deck, with the consent of the shipper, and cargo under deck.  There is not one of them which gives a recourse against the master, the vessel, or the owners, if the property lost had been placed on deck with the consent of its owner, and they afford very high evidence of the general and appropriate usages, in this particular, of merchants and shipowners.  So the courts of this country and England, and the writers on this subject, have treated the owner of goods on deck, with his consent, as not having a claim on the master or owner of the ship in case of jettison. The received law, on the point, is expressed by Chancellor Kent, with his usual precision, in 3 Com., 240: ‘Nor is the carrier in that case (Jettison of deck load) responsible to the owner, unless the goods were stowed on deck without the consent of the owner, or a general custom binding him, and then he would be chargeable with the loss.’”

15.    Gould vs. Oliver; Goods loaded on deck with consent of merchant, Merchant has no remedy against shipper or master
In Gould vs. Oliver (4 Bing., N. C., 132), decided in the English Court of Common Pleas in 1837, Tindal, C.J., said:  “Where the loading on deck has taken place with the consent of the merchant, it is obvious that no remedy against the shipowner or master for a wrongful loading of the goods on deck can exist. The foreign authorities are indeed express; on that point. And the general rule of the English law, that no one can maintain an action for a wrong, where he has consented or contributed to the act which occasioned his loss, leads to the same conclusion.”

16.    When shipper consents to have goods carried on deck, he takes risks of damage or loss
Where the shipper consents to have his goods carried on deck he takes the risks of any damage or loss sustained as a consequence of their being so carried. In the present case it is indisputable that the goods were injured during the voyage and solely as a consequence of their being on deck, instead of in the ship’s hold. The loss must therefore fall on the owner. And this would be true, under the authorities, even though paragraph 19 of the bills of lading had not been made a term of the contract.

17.    When shipowner may be held liable
Upon general principle, and momentarily ignoring paragraph 19 of these bills of lading, the ship’s owner might be held liable for any damage directly resulting from a negligent failure to exercise the care properly incident to the carriage of the merchandise on deck. For instance, if it had been improperly placed or secured, and had been swept overboard as a proximate result of such lack of care, the ship would be liable, to the same extent as if the cargo had been deliberately thrown over without justification. So, if it had been shown that, notwithstanding the stowage of these goods on deck, the damage could have been prevented, by the exercise of proper skill and diligence in the discharge of the duties incumbent on the ship, the owner might still be held.

18.    Ship’s company may be liable for damage that may be avoided by use of precaution
Supposed that a custom had been proved among mariners to protect deck cargo from the elements by putting a tarpaulin over it; or approaching still more to imaginable conditions, supposed that the persons charged with the duty of transporting the cargo, being cognizant of the probability of damage by water, had negligently and without good reason failed to exercise reasonable care to protect it by covering it with tarpaulins. In such case it could hardly be denied that the ship’s company should be held liable for such damage as might have been avoided by the use of such precaution.

19.    Burden of proof
It is incumbent on Martini, if his cause of action is founded on negligence of this character, to allege and prove that the damage suffered was due to failure of the persons in charge of the cargo to use the diligence properly incident to carriage under these conditions.

20.    Clark vs. Barnwell; Onus probandi
In Clark vs. Barnwell (12 How. [U.S.], 272; 13 L. ed., 985), the Supreme Court distinguishes with great precision between the situation where the burden of proof is upon the shipowner to prove that the loss resulted from an excepted peril and that where the burden of proof is upon the owner of the cargo to prove that the loss was caused by negligence on the part of the persons employed in the conveyance of the goods. The first two syllabi in Clark vs. Barnwell read as follows: “Where goods are shipped and the usual bill of lading given, ‘promising to deliver them in good order, the dangers of the seas excepted,’ and they are found to be damaged the onus probandi is upon the owners of the vessel, to show that the injury was occasioned by one of the excepted causes. But, although the injury may have been occasioned by one of the excepted causes, yet still the owners of the vessel are responsible if the injury might have been avoided, by the exercise of reasonable skill and attention on the part of the persons employed in the conveyance of the goods. But the onus probandi then becomes shifted upon the shipper, to show the negligence.

21.    Clark vs. Barnwell; Damage due to dampness not the fault of master or owners
Notwithstanding the proof was clear that the damage was occasioned by the effect of the humidity and dampness of the vessel, which is one of the dangers of navigation, it was competent for the libelants to show that the shipowner and master might have prevented it by proper skill and diligence in the discharge of their duties; but no such evidence is found in the record. For caught that appears every precaution was taken that is usual or customary, or known to shipmasters, to avoid the damage in question. It is to be attributed exclusively to the dampness of the atmosphere of the vessel, without negligence or fault on the part of the master or owners.

22.    Damage caused by rain and sea water, Macondray not liable
Herein, the damage was caused by rain and sea water — the risk of which is inherently incident to carriage on deck — Macondray cannot be held liable. It is not permissible for the court, in the absence of any allegation or proof of negligence, to attribute negligence to the ship’s employees in the matter of protecting the goods from rains and storms. The complaint clearly indicates that the damage done was due to the mere fact of carriage on deck, no other fault or delinquency on the part of anybody being alleged.

23.    Paragraph 19 of bills of lading would not protect ship from liability for consequences of negligent acts
By the terms of paragraph 19 of the bills of lading, the ship is not to be held liable, in the case of goods signed for as carried on deck, for any loss or damage from any cause whatever. This provision would not have protected the ship from liability for the consequences of negligent acts, if negligence had been alleged and proved. From the discussion in Manila Railroad Co. vs. Compania Transatlantica and Atlantic, Gulf & Pacific Co. (38 Phil. Rep., 875), it may be collected that the carrier would be held liable in such case, notwithstanding the exemption contained in paragraph 19. But however that may be damages certainly cannot be recovered on the ground of negligence, even from a carrier, where negligence is neither alleged nor proved.

Saludo vs. CA (GR 95536, 23 March 1992)
Second Division, Regalado (J): 4 concur

Facts: After the death of Crispina Galdo Saludo, mother of Aniceto G. Saludo Jr., Maria Salvacion Saludo, Leopoldo G. Saludo, and Saturnino G. Saludo, in Chicago, Illinois, on 23 October 1976, Pomierski and Son Funeral Home of Chicago, made the necessary preparations and arrangements for the shipment of the remains from Chicago to the Philippines. The funeral home had the remains embalmed and secured a permit for the disposition of dead human body on 25 October 1976. Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00 p.m. on 26 October 1976 at the Pomierski & Son Funeral Home, sealed the shipping case containing a hermetically sealed casket that is airtight and waterproof wherein was contained the remains of Crispina Galdo Saludo. On the same date, 26 October 1976, Pomierski brought the remains to C.M.A.S. (Continental Mortuary Air Services) at the airport (Chicago) which made the necessary arrangements such as flights, transfers, etc.; C.M.A.S. is a national service used by undertakers throughout the nation (U.S.A.), they furnish the air pouch which the casket is enclosed in, and they see that the remains are taken to the proper air freight terminal. C.M.A.S. booked the shipment with PAL thru the carrier’s agent Air Care International, with Pomierski F.H. as the shipper and Mario (Maria) Saludo as the consignee. PAL Airway Bill 079-01180454 Ordinary was issued wherein the requested routing was from Chicago to San Francisco on board TWA Flight 131 of 27 October 1976, and from San Francisco to Manila on board PAL Flight 107 of the same date, and from Manila to Cebu on board PAL Flight 149 of 29 October 1976. In the meantime, Maria Salvacion Saludo and Saturnino Saludo, thru a travel agent, were booked with United Airlines from Chicago to California, and with PAL from California to Manila. She then went to the funeral director of Pomierski Funeral Home who had her mother’s remains and she told the director that they were booked with United Airlines. But the director told her that the remains were booked with TWA flight to California. This upset her, and she and her brother had to change reservations from UA to the TWA flight after she confirmed by phone that her mother’s remains would be on that TWA flight. They went to the airport and watched from the look-out area. She saw no body being brought. So, she went to the TWA counter again, and she was told there was no body on that flight. Reluctantly, they took the TWA flight upon assurance of her cousin, Ani Bantug, that he would look into the matter and inform her about it on the plane or have it radioed to her. But no confirmation from her cousin reached her that her mother was on the West Coast. Upon arrival at San Francisco at about 5:00 p.m., she went to the TWA counter there to inquire about her mother’s remains. She was told they did not know anything about it. She then called Pomierski that her mother’s remains were not at the West Coast terminal, and Pomierski immediately called C.M.A.S., which in a matter of 10 minutes informed him that the remains were on a place to Mexico City, that there were two bodies at the terminal, and somehow they were switched; he relayed this information to Miss Saludo in California; later C.M.A.S. called and told him they were sending the remains back to California via Texas. The following day, 28 October 1976, the shipment or remains of Crispina Saludo arrived in San Francisco from Mexico on board American Airlines. This shipment was transferred to or received by PAL at 7:45 p.m. This casket bearing the remains of Crispina Saludo, which was mistakenly sent to Mexico and was opened (there), was resealed by Crispin F. Padagas for shipment to the Philippines. The shipment was immediately loaded on PAL flight for Manila that same evening and arrived in Manila on 30 October 1976, a day after its expected arrival on 29 October 1976. In a letter dated 15 December 1976, the counsel of the Saludos informed Trans World Airlines (TWA) of the misshipment and eventual delay in the delivery of the cargo containing the remains of the late Crispina Saludo, and of the discourtesy of its employees to Maria Salvacion Saludo and Saturnino Saludo. In a separate letter on 10 June 1977 addressed to Philippine Airlines (PAL), the Saludos stated that they were holding PAL liable for said delay in delivery and would commence judicial action should no favorable explanation be given.  Both TWA and PAL denied liability.

A damage suit  was filed by the Saludos before the then Court of First Instance, Branch III, Southern Leyte, praying for the award of actual damages of P50,000.00, moral damages of P1,000,000.00, exemplary damages, attorney’s fees and costs of suit. The trial court absolved the two airline companies of liability.

The Court of Appeals affirmed the decision of the lower court in toto, and in a subsequent resolution, denied the Saludos’ motion for reconsideration for lack of merit. Hence, the petition for review on certiorari.

The Supreme Court affirmed the appealed decision, with the modification that an award or P40,000.00 as and by way of nominal damages is granted in favor of the Saludos to be paid by TWA.

1.    Factual findings of the Court of Appeals binding upon the Supreme Court; Exceptions
Only questions of law may be raised in a petition filed in the Supreme Court to review on certiorari the decision of the Court of Appeals. This being so, the factual findings of the Court of Appeals are final and conclusive and cannot be reviewed by the Supreme Court. The rule, however, admits of established exceptions, to wit: (a) where there is grave abuse of discretion; (b) when the finding is grounded entirely on speculations, surmises or conjectures; (c) when the inference made is manifestly mistaken, absurd or impossible; (d) when the judgment of the Court of Appeals was based on a misapprehension of facts; (e) when the factual findings are conflicting; (f) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same are contrary to the admissions of both appellant and appellee;    (g) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion; and (h) where the findings of fact of the Court of Appeals are contrary to those of the trial court, or are mere conclusions without citation of specific evidence, or where the facts set forth by the petitioner are not disputed by the respondent, or where the findings of fact of the Court of Appeals are premised on the absence of evidence and are contradicted by the evidence on record.

2.    Distinction between question of law and question of fact; Test to determine
A question of law is one which involves a doubt or controversy on what the law is on a certain state of facts; and, a question of fact, contrarily, is one in which there is a doubt or difference as to the truth or falsehood of the alleged facts.  One test, it has been held, is whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case it is a question of law, otherwise it will be a question of fact.

3.    Issues warrant second look at facts
Since it is the soundness of the inferences or conclusions that may be drawn from the factual issues which are being assayed, the Court finds that the issues raised in the present petition indeed warrant a second look if this litigation is to come to a reasonable denouement. A discussion seriatim of said issues will further reveal that the sequence of the events involved is in effect disputed. Likewise to be settled is whether or not the conclusions of the Court of Appeals subject of the review indeed find evidentiary and legal support.

4.    Nature of bill of lading
A bill of lading is a written acknowledgment of the receipt of the goods and an agreement to transport and deliver them at a specified place to a person named or on his order. The two-fold character of a bill of lading is all too familiar: it is a receipt as to the quantity and description of the goods shipped and a contract to transport the goods to the consignee or other person therein designated, on the terms specified in such instrument.

5.    Designation of bill of lading immaterial
The designation is immaterial. Such instrument may be called a shipping receipt, forwarder’s receipt and receipt for transportation. Freight tickets for bus companies as well as receipts for cargo transported by all forms of transportation, whether by sea or land, fall within the definition. Under the Tariff and Customs Code, a bill of lading includes airway bills of lading.

6.    When bill of lading issued; Inverse order not prohibited by law
Since a bill of lading acknowledges receipt of goods to be transported, delivery of the goods to the carrier normally precedes the issuance of the bill; or, to some extent, delivery of the goods and issuance of the bill are regarded in commercial practice as simultaneous acts. However, except as may be prohibited by law, there is nothing to prevent an inverse order of events, that is, the execution of the bill, of lading even prior to actual possession and control by the carrier of the cargo to be transported. There is no law which requires that the delivery of the goods for carriage and the issuance of the covering bill of lading must coincide in point of time or, for that matter, that the former should precede the latter.

7.    Receipt a prima facie evidence of delivery to carrier
Ordinarily, a receipt is not essential to a complete delivery of goods to the carrier for transportation but, when issued, is competent and prima facie, but not conclusive, evidence of delivery to the carrier. A bill of lading, when properly executed and delivered to a shipper, is evidence that the carrier has received the goods described therein for shipment. Except as modified by statute, it is a general rule as to the parties to a contract of carriage of goods in connection with which a bill of lading is issued reciting that goods have been received for transportation, that the recital being in essence a receipt alone, is not conclusive, but may be explained, varied or contradicted by parol or other evidence.

8.    Bill of lading vis-à-vis estoppel
An airway bill estops the carrier from denying receipt of goods of the quantity and quality described in the bill. However, a bill of lading may contain constituent elements of estoppel and thus become something more than a contract between the shipper and the carrier. However, as between the shipper and the carrier, when no goods have been delivered for shipment no recitals in the bill can estop the carrier from showing the true facts. Between the consignor of goods and a receiving carrier, recitals in a bill of lading as to the goods shipped raise only a rebuttable presumption that such goods were delivered for shipment. As between the consignor and a receiving carrier, the fact must outweigh the recital.

9.    Explanation overcoming presumption that remains were delivered and received by TWA and PAL
Herein, Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00 p.m. on 26 October 1976 at the Pomierski & Son Funeral Home, sealed the shipping case containing a hermetically sealed casket that is airtight and waterproof wherein was contained the remains of Crispina Galdo Saludo. On the same date, Pomierski brought the remains to C.M.A.S. (Continental Mortuary Air Services) at the airport (Chicago) which made the necessary arrangements such as flights, transfers, etc; C.M.A.S. is a national service used by undertakers throughout the nation (U.S.A.), they furnish the air pouch which the casket is enclosed in, and they see that the remains are taken to the proper air freight terminal. C.M.A.S. booked the shipment with PAL thru the carrier’s agent Air Care International, with Pomierski F.H. as the shipper and Mario (Maria) Saludo as the consignee. PAL Airway Bill 079- 01180454 Ordinary was issued wherein the requested routing was from Chicago to San Francisco on board TWA Flight 131 of 27 October 1976, and from San Francisco to Manila on board PAL Flight 107 of the same date, and from Manila to Cebu on board PAL Flight 149 of 29 October 1976.

10.    PAL’s explanation
On 26 October 1976 the cargo containing the casketed remains of Crispina Saludo was booked for PAL Flight PR-107 leaving San Francisco for Manila on 27 October 1976. PAL Airway Bill 079-01180454 was issued, not as evidence of receipt of delivery of the Cargo on 26 October 1976, but merely as a confirmation of the booking thus made for the San Francisco-Manila flight scheduled on 27 October 1976. Actually, it was not until 28 October 1976 that PAL received physical delivery of the body at San Francisco, as duly evidenced by the Interline Freight Transfer Manifest of the American Airline Freight System and signed for by Virgilio Rosales at 7:45 p.m. on said date.

11.    Article 1736 NCC; Period where extraordinary responsibility observed by common carrier; When delivery made
Explicit is the rule under Article 1736 of the Civil Code that the extraordinary responsibility of the common carrier begins from the time the goods are delivered to the carrier. This responsibility remains in full force and effect even when they are temporarily unloaded or stored in transit, unless the shipper or owner exercises the right of stoppage in transitu, and terminates only after the lapse of a reasonable time for the acceptance of the goods by the consignee or such other person entitled to receive them. And, there is delivery to the carrier when the goods are ready for and have been placed in the exclusive possession, custody and control of the carrier for the purpose of their immediate transportation and the carrier has accepted them. Where such a delivery has thus been accepted by the carrier, the liability of the common carrier commences eo instanti.

12.    PAL and TWA not liable for switching of caskets prior to their receipt of agreed cargo
While the extraordinary diligence statutorily required to be observed by the carrier instantaneously commences upon delivery of the goods thereto, for such duty to commence there must in fact have been delivery of the cargo subject of the contract of carriage; only when such fact of delivery has been unequivocally established can the liability for loss, destruction or deterioration of goods in the custody of the carrier, absent the excepting causes under Article 1734, attach and the presumption of fault of the carrier under Article 1735 be invoked. Herein, the body intended to be shipped as agreed upon was really placed in the possession and control of PAL on 28 October 1976 and it was from that date that TWA and PAL became responsible for the agreed cargo under their undertakings in PAL Airway Bill 079-01180454. Consequently, for the switching of caskets prior thereto which was not caused by them., and subsequent events caused thereby, TWA and PAL cannot be held liable.

13.    TWA without authority, even prohibited, to verify contents of casket
When the cargo was received from C.M.A.S. at the Chicago airport terminal for shipment, which was supposed to contain the remains of Crispina Saludo, Air Care International and/or TWA, had no way of determining its actual contents, since the casket was hermetically sealed by the Philippine Vice-Consul in Chicago and in an air pouch of C.M.A.S., to the effect that Air Care International and/or TWA had to rely on the information furnished by the shipper regarding the cargo’s content. Neither could Air Care International and/or TWA open the casket for further verification, since they were not only without authority to do so, but even prohibited.

14.    Pomierski & Son delivered casket to CMAS, and not to TWA
It was not to TWA, but to C.M.A.S. that the Pomierski & Son Funeral Home delivered the casket containing the remains of Crispina Saludo. TWA would have no knowledge therefore that the remains of Crispina Saludo were not the ones inside the casket that was being presented to it for shipment. TWA would have to rely on the representations of C.M.A.S. The casket was hermetically sealed and also sealed by the Philippine Vice Consul in Chicago. TWA or any airline for that matter would not have opened such sealed casket just for the purpose of ascertaining whose body was inside and to make sure that the remains inside were those of the particular person indicated to be by C.M.A.S. TWA had to accept whatever information was being furnished by the shipper or by the one presenting the casket for shipment.And so as a matter of fact, TWA carried to San Francisco and transferred to defendant PAL a shipment covered by or under PAL Airway Bill 079-ORD-01180454, the airway bill for the shipment of the casketed remains of Crispina Saludo. Only, it turned out later, while the casket was already with PAL, that what was inside the casket was not the body of Crispina Saludo so much so that it had to be withdrawn by C.M.A.S. from PAL. The body of Crispina Saludo had been shipped to Mexico. The casket containing the remains of Crispina Saludo was transshipped from Mexico and arrived in San Francisco the following day on board American Airlines. It was immediately loaded by PAL on its flight for Manila. The foregoing points at C.M.A.S. as the one responsible for the switching or mix-up of the two bodies at the Chicago Airport terminal, and started a chain reaction of the misshipment of the body of Crispina Saludo and a one-day delay in the delivery thereof to its destination.

15.    Right of carrier to require good faith on part of persons delivering goods; Right of carrier to know contents when it has reasonable ground to suspect goods are dangerous or of illegal character
It is the right of the carrier to require good faith on the part of those persons who deliver goods to be carried, and enter into contracts with it, and inasmuch as the freight may depend on the value of the article to be carried, the carrier ordinarily has the right to inquire as to its value. Ordinarily, too, it is the duty of the carrier to make inquiry as to the general nature of the articles shipped and of their value before it consents to carry them; and its failure to do so cannot defeat the shipper’s right to recovery of the full value of the package if lost, in the absence of showing of fraud or deceit on the part of the shipper. In the absence of more definite information, the carrier has the right to accept shipper’s marks as to the contents of the package offered for transportation and is not bound to inquire particularly about them in order to take advantage of a false classification and where a shipper expressly represents the contents of a package to be of a designated character, it is not the duty of the carrier to ask for a repetition of the statement nor disbelieve it and open the box and see for itself.  However, where a common carrier has reasonable ground to suspect that the offered goods are of a dangerous or illegal character, the carrier has the right to know the character of such goods and to insist on an inspection, if reasonable and practical under the circumstances, as a condition of receiving and transporting such goods.

16.    Common carrier entitled to fair representation of nature and value of goods to be carried; Right of carrier to conduct an inspection
A common carrier is entitled to fair representation of the nature and value of the goods to be carried, with the concomitant right to rely thereon, and further noting at this juncture that a carrier has no obligation to inquire into the correctness or sufficiency of such information.  The consequent duty to conduct an inspection thereof arises in the event that there should be reason to doubt the veracity of such representations. Therefore, to be subjected to unusual search, other than the routinary inspection procedure customarily undertaken, there must exist proof that would justify cause for apprehension that the baggage is dangerous as to warrant exhaustive inspection, or even refusal to accept carriage of the same; and it is the failure of the carrier to act accordingly in the face of such proof that constitutes the basis of the common carrier’s liability.

17.    CMAS classified as forwarder, is an agent of the shipper and not of the carrier
While the actual participation of CMAS has been sufficiently and correctly established, to hold that it acted as agent for TWA and PAL would be both an inaccurate appraisal and an unwarranted categorization of the legal position it held in the entire transaction. It bears repeating that CMAS was hired to handle all the necessary shipping arrangements for the transportation of the human remains of Crispina Saludo to Manila. Hence, it was to CMAS that the Pomierski & Son Funeral Home, as shipper, brought the remains of Saludo for shipment, with Maria Saludo as consignee. Thereafter, CMAS booked the shipment with PAL through the carrier’s agent, Air Care International. With its functions, CMAS may accordingly be classified as a forwarder which, by accepted commercial practice, is regarded as an agent of the shipper and not of the carrier. As such, it merely contracts for the transportation of goods by carriers, and has no interest in the freight but receives compensation from the shipper as his agent.

18.    CMAS is actual culprit
The facts of the case would point to CMAS as the culprit. Equally telling of the more likely possibility of CMAS’ liability is the Saludos’ letter to and demanding an explanation from CMAS, regarding the statement of TWA and PAL laying the blame on CMAS for the incident, clearly allude to CMAS as the party at fault. This is tantamount to an admission by the Saludos that they consider TWA and PAL without fault, or is at the very least indicative of the fact that the Saludos entertained serious doubts as to whether TWA and PAL were responsible for the unfortunate turn of events.

19.    Court cannot grant damages at expense of TWA and PAL; Possible liability of CMAS best deferred to another time and addressed to another forum
The Saludos’ grief over the death of their mother was aggravated by the unnecessary inconvenience and anxiety that attended their efforts to bring her body home for a decent burial. But, as much as the Court would like to give them consolation for their undeserved distress, the Court is barred by the inequity of allowing recovery of the damages prayed for by them at the expense of TWA and PAL whose fault or negligence in the very acts imputed to them has not been convincingly and legally demonstrated. Neither was the Court prepared to delve into, much less definitively rule on, the possible liability of CMAS as the evaluation and adjudication of the same is not what is presently at issue and is best deferred to another time and addressed to another forum.

20.    Carrier did not undertake to carry cargo aboard any specified aircraft
The carrier did not undertake to carry the cargo aboard any specified aircraft, in view of the condition on the back of the airway bill which provides that “It is agreed that no time is fixed for the completion of carriage hereunder and that Carrier may without notice substitute alternate carriers or aircraft. Carrier assumes no obligation to carry the goods by any specified aircraft or over any particular route or routes or to make connection at any point according to any particular schedule, and Carrier is hereby authorized to select, or deviate from the route or routes of shipment, notwithstanding that the same may be stated on the face hereof. The shipper guarantees payment of all charges and advances.” Hence, when TWA shipped the body on an earlier flight and on a different aircraft, it was acting well within its rights. TWA can use substitute aircraft even without notice and without the assumption of any obligation whatsoever to carry the goods on any specified aircraft is clearly sanctioned by the contract of carriage as specifically provided for under the conditions thereof.

21.    Terms clear, no interpretation needed
The terms are clear enough as to preclude the necessity to probe beyond the apparent intendment of the contractual provisions. There is no ambiguity in the terms of the airway bill to warrant the application of the rules on interpretation of contracts and documents.

22.    Interpretation of contracts
The hornbook rule on interpretation of contracts consecrates the primacy of the intention of the parties, the same having the force of law between them. When the terms of the agreement are clear and explicit, that they do not justify an attempt to read into any alleged intention of the parties, the terms are to be understood literally just as they appear on the face of the contract. The various stipulations of a contract shall be interpreted together and such a construction is to be adopted as will give effect to all provisions thereof.  A contract cannot be construed by parts, but its clauses should be interpreted in relation to one another. The whole contract must be interpreted or read together in order to arrive at its true meaning. Certain stipulations cannot be segregated and then made to control; neither do particular words or phrases necessarily determine the character of a contract. The legal effect of the contract is not to be determined alone by any particular provision disconnected from all others, but in the ruling intention of the parties as gathered from all the language they have used and from their contemporaneous and subsequent acts.

23.    Interpretative rule in Rules of Court applies only if there is inconsistency between written and printed words
The interpretative rule in the Rules of Court that written words control printed words in documents may be considered only when there is inconsistency between the written and printed words of the contract. As previously stated, there was no ambiguity in the contract subject of this case that would call for the application of said rule. In any event, the contract has provided for such a situation by explicitly stating that the condition remains effective “notwithstanding that the same (fixed time for completion of carriage, specified aircraft, or any particular route or schedule) may be stated on the face hereof.”  Herein, the typewritten specifications of the flight, routes and dates of departures and arrivals on the face of the airway bill does not constitute a special contract which modifies the printed conditions at the back thereof. The typewritten provisions of the contract are to be read and understood subject to and in view of the printed conditions, fully reconciling and giving effect to the manifest intention of the parties to the agreement.

24.    Statement on the face of the airway bill
The statement on the face of the airway bill properly and completely reads “Carrier certifies goods described below were received for carriage subject to the Conditions on the reverse hereof  the goods then being in apparent good order and condition except as noted hereon.”

25.    Carrier not an insurer against delay in transportation of goods in absence of a special contract
The oft-repeated rule regarding a carrier’s liability for delay is that in the absence of a special contract, a carrier is not an insurer against delay in transportation of goods. When a common carrier undertakes to convey goods, the law implies a contract that they shall be delivered at destination within a reasonable time, in the absence of any agreement as to the time of delivery. But where a carrier has made an express contract to transport and deliver property within a specified time, it is bound to fulfill its contract and is liable for any delay, no matter from what cause it may have arisen.    This result logically follows from the well-settled rule that where the law creates a duty or charge, and the party is disabled from performing it without any default in himself, and has no remedy over, then the law will excuse him, but where the party by his own contract creates a duty or charge upon himself, he is bound to make it good notwithstanding any accident or delay by inevitable necessity because he might have provided against it by contract. Whether or not there has been such an undertaking on the part of the carrier is to be determined from the circumstances surrounding the case and by application of the ordinary rules for the interpretation of contracts.

26.    Mendoza vs. PAL; Delayed delivery of air cargo
In a similar case of delayed delivery of air cargo under a very similar stipulation contained in the airway bill which reads: “The carrier does not obligate itself to carry the goods by any specified aircraft or on a specified time. Said carrier being hereby authorized to deviate from the route of the shipment without any liability therefore,” the Supreme Court ruled that common carriers are not obligated by law to carry and to deliver merchandise, and persons are not vested with the right to prompt delivery, unless such common carriers previously assume the obligation. Said rights and obligations are created by a specific contract entered into by the parties (Mendoza vs. PAL, 90 Phil. 836).

27.    Specification of flights does not constitute a special contract
To countenance a postulate that the specification of the flights and dates of departures and arrivals constitute a special contract (that would prevail over the printed stipulations at the back of the airway bill) would unduly burden the common carrier for that would have the effect of unilaterally transforming every single bill of lading or trip ticket into a special contract by the simple expedient of filling it up with the particulars of the flight, trip or voyage, and thereby imposing upon the carrier duties and/or obligations which it may not have been ready or willing to assume had it been timely advised thereof.

28.    Ordinary prudence required of person entering in contract
The fact that the challenged condition 5 was printed at the back of the airway bill militate against its binding effect on the Saludos as parties to the contract, for there were sufficient indications on the face of said bill that would alert them to the presence of such additional condition to put them on their guard. Ordinary prudence on the part of any person entering or contemplating to enter into a contract would prompt even a cursory examination of any such conditions, terms and/or stipulations.

29.    Acceptance of bill of lading without dissent raises presumption that all terms brought to knowledge of shipper and agreed to by him
The acceptance of a bill of lading without dissent raises a presumption that all terms therein were brought to the knowledge of the shipper and agreed to by him, and in the absence of fraud or mistake, he is estopped from thereafter denying that he assented to such terms. This rule applies with particular force where a shipper accepts a bill of lading with full knowledge of its contents, and acceptance, under such circumstances makes it a binding contract. In order that any presumption of assent to a stipulation in a bill of lading limiting the liability of a carrier may arise, it must appear that the clause containing this exemption from liability plainly formed a part of the contract contained in the bill of lading. A stipulation printed on the back of a receipt or bill of lading or on papers attached to such receipt will be quite as effective as if printed on its face, if it is shown that the consignor knew of its terms. Thus, where a shipper accepts a receipt which states that its conditions are to be found on the back, such receipt comes within the general rule, and the shipper is held to have accepted and to be bound by the conditions there to be found.

30.    When contract of adhesion void and unenforceable
A contract of adhesion may be struck down as void and unenforceable, for being subversive of public policy, only when the weaker party is imposed upon in dealing with the dominant bargaining party and is reduced to the alternative of taking it or leaving it, completely deprived of the opportunity to bargain on equal footing.

31.    Ong Yiu vs. CA; Contracts of adhesion not entirely prohibited
The case of Ong Yiu vs. Court of Appeals, et al. instructs that contracts of adhesion are not entirely prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent. Herein, the Saludos, far from being the weaker party in the situation, duly signified their presumed assent to all terms of the contract through their acceptance of the airway bill and are consequently bound thereby. It cannot be gainsaid that the Saludos were not without several choices as to carriers in Chicago with its numerous airways and airlines servicing the same.

32.    Condition serves as insulation to liability when flight routes and schedules change; Changes should be justified
Although Condition 5 of the airway bill is binding upon the parties to and fully operative in the present transaction, it does not mean, that the carriers can at all times whimsically seek refuge from liability in the exculpatory sanctuary of Condition 5 or arbitrarily vary routes, flights and schedules to the prejudice of their customers. This condition only serves to insulate the carrier from liability in those instances when changes in routes, flights and schedules are clearly justified by the peculiar circumstances of a particular case, or by general transportation practices, customs and usages, or by contingencies or emergencies in aviation such as weather turbulence, mechanical failure, requirements of national security and the like. And even as it is conceded that specific routing and other navigational arrangements for a trip, flight or voyage, or variations therein, generally lie within the discretion of the carrier in the absence of specific routing instructions or directions by the shipper, it is plainly incumbent upon the carrier to exercise its rights with due deference to the rights, interests and convenience of its customers.

33.    Common carrier has implicit duty to carry property within reasonable time and guard against delay; Liability of carrier for unreasonable delay
A common carrier undertaking to transport property has the implicit duty to carry and deliver it within a reasonable time, absent any particular stipulation regarding time of delivery, and to guard against delay. In case of any unreasonable delay, the carrier shall be liable for damages immediately and proximately resulting from such neglect of duty. Herein, the delay in the delivery of the remains of Crispina Saludo, undeniable and regrettable as it was, cannot be attributed to the fault, negligence or malice of PAL and TWA.

34.    TWA knew urgency of shipment and actually carried the remains on earlier flight
Herein, TWA knew of the urgency of the shipment by reason of this notation on the lower portion of the airway bill: “All documents have been certified. Human remains of Cristina (sic) Saludo. Please return bag first available flight to SFO.” Accordingly, TWA took it upon itself to carry the remains of Crispina Saludo on an earlier flight, which it could do under the terms of the airway bill, to make sure that there would be enough time for loading said remains on the transfer flight on board PAL.

35.    No showing that personnel treated the Saludos in humiliating or arrogant manner; What constitutes rude or discourteous conduct
There was no showing of any humiliating or arrogant manner with which the personnel of both TWA and PAL treated the Saludos. Even their alleged indifference is not clearly established. The initial answer of the TWA personnel at the counter that they did not know anything about the remains, and later, their answer that they have not heard anything about the remains, and the inability of the TWA counter personnel to inform the Saludos of the whereabouts of the remains, cannot be said to be total or complete indifference to the latter. At any rate, it is any rude or discourteous conduct, malfeasance or neglect, the use of abusive or insulting language calculated to humiliate and shame passenger or bad faith by or on the part of the employees of the carrier that gives the passenger an action for damages against the carrier, and none of the above is obtaining in the present case.

36.    Although not in bad faith, actuations of TWA’s employees leave must to be desired
The manner in which TWA’s employees dealt with the Saludos was not grossly humiliating, arrogant or indifferent as would assume the proportions of malice or bad faith and lay the basis for an award of the damages claimed. It must however, be pointed out that the lamentable actuations of TWA’s employees leave much to be desired, particularly so in the face of the Saludos’ grief over the death of their mother, exacerbated by the tension and anxiety wrought by the impasse and confusion over the failure to ascertain over an appreciable period of time what happened to her remains.

37.    Airline companies admonished to require personnel to be more accommodating towards customers and general public; Contract of carriage different from other contractual relations, and is not a mere contract for transportation but also treatment with courtesy and consideration
Airline companies are hereby sternly admonished that it is their duty not only to cursorily instruct but to strictly require their personnel to be more accommodating towards customers, passengers and the general public. After all, common carriers such as airline companies are in the business of rendering public service, which is the primary reason for their enfranchisement and recognition in our law. Because the passengers in a contract of carriage do not contract merely for transportation, they have a right to be treated with kindness, respect, courtesy and consideration. A contract to transport passengers is quite different in kind and degree from any other contractual relation, and generates a relation attended with public duty. The operation of a common carrier is a business affected with public interest and must be directed to serve the comfort and convenience of passengers. Passengers are human beings with human feelings and emotions; they should not be treated as mere numbers or statistics for revenue.

38.    Apathy not legally reprehensible but is morally deplorable
Herein, the Saludos were not to be regaled with extra special attention. They were, however, entitled to the understanding and humane consideration called for by and commensurate with the extraordinary diligence required of common carriers, and not the cold insensitivity to their predicament. The airline’s counter personnel were totally helpless about the situation. Common Sense could and should have dictated that they exert a little extra effort in making a more extensive inquiry, by themselves or through their superiors, rather than just shrug off the problem with a callous and uncaring remark that they had no knowledge about it. With all the modern communications equipment readily available to them, which could have easily facilitated said inquiry and which are used as a matter of course by airline companies in their daily operations, their apathetic stance while not legally reprehensible is morally deplorable.

39.    No attribution of discourtesy or indifference against PAL
No attribution of discourtesy or indifference has been made against PAL by the Saludos and, in fact, Maria Saludo testified that it was to PAL that they repaired after failing to receive proper attention from TWA. It was from PAL that they received confirmation that their mother’s remains would be on the same flight to Manila with them.

40.    When moral and exemplary damages, or attorney’s fees, awarded
Moral damages may be awarded for willful or fraudulent breach of contract or when such breach is attended by malice or bad faith. However, in the absence of strong and positive evidence of fraud, malice or bad faith, said damages cannot be awarded.  Neither can, there be an award of exemplary damages nor of attorney’s fees    as an item of damages in the absence of proof that defendant acted with malice, fraud or bad faith.

41.    Censurable conduct of TWA employees do not approximate dimensions of fraud, malice or good faith
The censurable conduct of TWA’s employees cannot, however, be said to have approximated the dimensions of fraud, malice or bad faith. It can be said to be more of a lethargic reaction produced and engrained in some people by the mechanically routine nature of their work and a racial or societal culture which stultifies what would have been their accustomed human response to a human need under a former and different ambience.

42.    Award of nominal damages warranted; Articles 2221 and 2222 NCC
The facts show that the Saludos’ right to be treated with due courtesy in accordance with the degree of diligence required by law to be exercised by every common carrier was violated by TWA and this entitles them, at least, to nominal damages from TWA alone. Articles 2221 and 2222 of the Civil Code make it clear that nominal damages are not intended for indemnification of loss suffered but for the vindication or recognition of a right violated or invaded. They are recoverable where some injury has been done but the amount of which the evidence fails to show, the assessment of damages being left to the discretion of the court according to the circumstances of the case. In the exercise of the Court’s discretion, the Court find an award of P40,000.00 as nominal damages in favor of the Salufos to be a reasonable amount under the circumstances of the present case.

Eastern Shipping Lines vs. CA (GR 80936, 17 October 1990)
Third Division, Gutierrez Jr. (J): 3 concur, 1 on leave

Facts: On 24 February 1980, the Nanyo Corporation of Kobe, Japan shipped a cargo consisting of 5 packages of supplies and materials for “1200 W x 2500 LMM Apron Feeder and 200 W x 5850 LMM Apron Feeder,” covered by a bill of lading. The cargo was loaded on board the S/S Eastern Adventure destined for Manila. The vessel is operated by Eastern Shipping Lines. The bill of lading was consigned to “Shipper’s Order”, with “Address Arrival Notice to Consolidated Mines Inc. 6799 Ayala Avenue, Makati, Metro Manila, Philippines.”  The cargo arrived in Manila on 4 March  1980. A few days later, on the basis of an Undertaking for Delivery of Cargo but without the surrender of the original bill of lading presented by Consolidated Mines (CMI), Eastern Shipping released the shipment in question to CMI. In said guaranty, CMI undertook to indemnify Eastern Shipping “harmless from all demands, claiming liabilities, actions and expenses” About 5 ½ months later, or specifically on 19 August 1980, Eastern Shipping received from Hongkong and Shanghai Bank (HSBC), a letter stating that HSBC holds title to the goods and has possession of the full set of original bills of lading, and that it is unable to locate the cargo and that it appeared that Eastern Shipping has released it to CMI. Considering that there was no reply from Eastern Shipping, HSBC wrote another demand letter through counsel dated 29 October 1980 in contemplation of a legal action against Eastern Shipping should it not make good HSBC’s claim. On 23 December 1980 CMI wrote a letter to HSBC admitting that they received the shipment in question due to a guarantee executed by them, and requested HSBC that legal action be held off for at least 30 days, promising to settle its account with HSBC from the funds it was expecting from Benguet Corporation. On 14 January 1981, Eastern Shipping wrote a reply to HSBC, stating therein that it regrets releasing the cargo without the consent of HSBC’s client, but that it was constrained to release the same in view of the consignee’s strong representation and guarantee that they will settle their obligation with the bank. Eastern Shipping requested that HSBC advise the former if the consignee be unable to comply with its requirement after 30 days.

CMI having failed to fulfill its promise, HSBC filed a complaint before the then CFI of Rizal against Eastern Shipping praying for actual and compensatory damages in the amount of $168,521.16 representing the value of the goods covered by the Bill of Lading, exemplary damage in the amount deemed just by the court and P50,000 attorney’s fees plus expenses of litigation and judicial costs. On 15 August 1981, Eastern Shipping filed a third party complaint against CMI seeking reimbursement from the latter of whatever pecuniary obligations Eastern Shipping may be liable to HSBC, as well as moral damages. During trial, CMI filed a Motion to Stay Action in view of the pendency of involuntary insolvency proceedings commenced against it in the meantime by its creditors which included HSBC. This motion was denied by the trial court. On the basis of the evidence presented by HSBC and Eastern Shipping, as CMI failed to present its evidence, the court on 15 January 1985 rendered judgment in favor HSBC and against Eastern Shipping, ordering the latter to pay the sum of $168,521.16 or its equivalent in Philippine Currency representing the value of the goods covered by the Bill of Lading plus interest thereon from the filing of the complaint, until fully paid; P20,000.00 as and for attorney’s fees and to pay the costs. With respect to the Third Party Complaint, the Court rendered judgment in favor of Eastern Shipping and against the CMI ordering the latter to pay all the liabilities of the former in favor of HSBC consisting of the value of the goods covered by the Bill of Lading in the sum of $168,521.16 or its equivalent in Philippine Currency plus interest from the filing of the third party complaint until fully paid; attorney’s fees of P20,000.00 and to pay the costs.

Its motion for reconsideration having been denied, Eastern Shipping appealed to the Court of Appeals. On 30 June 1987, the Court of Appeals rendered the decision affirming the appealed decision in toto. Eastern Shipping filed a motion for reconsideration, but the same was denied on 24 November 1987. Hence, the petition for review.

The Supreme Court granted the petition, set aside the decision and order of the Court of Appeals, dismissed the complaint before the trial court for lack of merit but without prejudice to HSBC pursuing its claims against CMI in the proper proceedings.

1.    Bill of lading refer to CMI, not HSBC, as consignee
At the outset, the Bill of Lading which was issued by the carrier but contained articles furnished by the Shipper, shows on its face that the Shipment is consigned “TO SHIPPER’S ORDER” with “ADDRESS ARRIVAL NOTICE TO CONSOLIDATED MINES INC. 6799 AYALA AVE. MAKATI, METRO MANILA, PHILIPPINES.” Nowhere did the Bill of Lading refer to HSBC as the consignee or the one to be notified. The foregoing information, without more, in effect makes CMI for all practical intents and purposes the party named and ordered to receive the goods.

2.    Eastern Shipping not expected to look beyond face of bil of lading
Eastern Shipping, not being privy to any transaction between HSBC and CMI, cannot be expected to look beyond what is contained on the face of the bill of lading and guess which of the many banks in Metro Manila or some other unrevealed corporation could possibly be the consignee. To consider otherwise would not be sound business practice as Eastern Shipping would be forced to wait for the real owner of the goods to show up, perhaps in vain. The shipment consisted of machinery materials and supplies for a mining company named in the bill of lading. In the absence of contrary instructions or at least knowledge of other facts, the carrier is not ordinarily expected to deliver mining equipment to an unnamed or unknown party lurking for several months.

3.    Nature of Bill of lading; Macondray vs. Acting Commissioner of Customs, Phoenix Assurance vs. US Lines
In Macondray and Company Inc. v. Acting Commissioner of Customs (62 SCRA 427 [1975]), it was held that a bill of lading is ordinarily merely a convenient commercial instrument designed to protect the importer or consignee. And in Phoenix Assurance Co., Ltd. v. United States Lines (22 SCRA 674 [1968]), it was held that as a receipt, a bill of lading recites the place and date of shipment, describes the goods as to quantity, weight, dimensions, identification marks, condition, quality and value.

4.    CMI owner of goods in question; Other evidences
(1)  HSBC expressly admitted in its complaint that “pursuant to the Bill of lading the shipment was issued ‘To Shipper’s Order.’” It never alleged therein that it was the consignee of the shipment in question. Similarly, by HSBC’s own documentary evidence, CMI is the buyer-owner of the shipment. (2) the Buyer referred to in the Certificate  issued by the shipper Nanyo Corporation should perforce refer to CMI, as that it certified that the Original Consular Invoice had been airmailed directly to Buyer, and certified that advance copies of Commercial Invoice Packing List and Bill of Lading were airmailed directly to Buyer. (3) HSBC has established by its own documentary evidence, more particularly, the Consular Invoice dated 25 February 1980, issued in Tokyo, Japan by the Foreign Service of the Republic of the Philippines, that the consignee of the shipment in question is CMI. Hence, in view of the admissions of HSBC, exceptional circumstances allow a deviation from the general rule regarding the surrender of the bill of lading. The rule cannot always be absolute.

5.    Section 3, Rule 128, Rules of Court; Admissibility of evidence
Section 3, Rule 128, of the Rules of Court provide that “Evidence is admissible when it is relevant to the issue and is not excluded by these rules.”

6.    Section 2, Rule 129, Rules of Court; Judicial admissions
Section 2, Rule 129, of the Rules of Court provide that “Admissions made by the parties in the pleadings, or in the course of the trial or other proceedings do not require proof and cannot be contradicted unless previously shown to have been made through palpable mistakes.”

7.    Article 353 of Code of Commerce
Assuming that CMI may not be considered consignee, Eastern Shipping cannot be faulted for releasing the goods to CMI under the circumstances, due to its lack of knowledge as to who was the real consignee in view of CMI’s strong representations and letter of undertaking wherein it stated that the bill of lading would be presented later. This is precisely the situation covered by the last paragraph of Article 353 of the Code of Commerce, i.e. “If in case of loss or for any other reason whatsoever, the consignee cannot return upon receiving the merchandise the bill of lading subscribed by the carrier, he shall give said carrier a receipt of the goods delivered this receipt producing the same effects as the return of the bill of lading.”

8.    State Bonding and Insurance vs. Manila Port Service
In State Bonding and Ins. Co. Inc. v. Manila Port Service, (11 SCRA 400 [1964]), it was held that the arrival of shipment is deemed admitted by an allegation of delivery to the consignee.

9.    Eastern Shipping in good faith
Under the special circumstances of the present case, equity favors Eastern Shipping which proved that it was in good faith while both CMI and HSBC cannot claim the same. While the goods in question were released on 4 March 1980 the records show that HSBC received the original bill of lading, as per testimony of its witness Ederlina Crisostomo, only on April 1980 or long after the goods had been released. This circumstance goes against the claims of HSBC. Thus HSBC in its original demand letter stated, “We are unable to locate the cargo and it would appear that it has been released by you to Consolidated Mines, Inc.” This proves that it had fore-knowledge of the prior release to CMI. And to make things worse, HSBC, despite CMI’s admission that it received the goods, sued only Eastern Shipping while at the same time claiming for the value of the goods in the involuntary insolvency proceedings of CMI which the Bank itself, together with others, initiated. Only later developments led to the present case.

10.    Article 1736 NCC; Article uses conjunction “or”
Article 1736 of the Civil Code of the Philippines which provides that “the extraordinary responsibility of the common carrier lasts from the time the goods are unconditionally placed in the possession of, and received by the carrier for transportation until the same are delivered, actually or constructively, by the carrier to the consignee, or to the person who has a right to receive them, without prejudice to the provisions of Article 1738.” Herein, HSBC wittingly or unwittingly overlooked the fact that the same article uses the conjunction “or” in reference to whom the goods may be delivered, that is, to the consignee, or to the person who has a right to receive them.

11.    HSBC more negligent party as against Eastern Shipping
It becomes more evident that HSBC is the more negligent party as against Eastern Shipping when aside from having allowed CMI to be designed in the bills of lading, as the party to be notified, it allowed the latter to be designated as the consignee in the Consular Invoice, the original of which was directly furnished to CMI by and as certified to by the shipper Nanyo Corporation. With such vast powers, akin to an agent of HSBC, CMI acted within its authority, and even if it acted on its own.

12.    Article 1883 NCC
“If an agent acts in his own name, the principal has no right of action against the persons with whom the agent has contracted, neither have such persons against the principal. In such case the agent is the one directly bound in favor of the person with whom he has contracted, as if the transaction were his own, except when the contract involves things belonging to the principal. The provisions of this article shall be understood to be without prejudice to the actions between the principal and agent.”

13.    Bad faith by both HSBC and CMI
For almost 6 months from the arrival of the goods HSBC did not do anything to claim the cargo. It could not possibly be left around lying idle when on the face of the bill of lading, there was a named owner to be notified. On the other hand, CMI secured the release of the goods through misrepresentation before Eastern Shipping without settling its account with HSBC and thereafter did not bother to present evidence before the trial court, leaving Eastern Shipping holding an empty bag as it were. These circumstances also prove bad faith on the part of CMI. Under the exceptional circumstances and applying especially strong considerations of equity, Eastern Shipping did not commit any fault sufficient to render it liable to HSBC. On the contrary, it was HSBC and CMI who were obviously in bad faith in dealing with Eastern Shipping.

De Villata vs. JS Stanley (GR 8154, 20 December 1915)
En Banc, Carson (J): 4 concur, 1 concur in result

Facts: Joaquin de Villata is the master of SS Vizcaya of the coastwise trade. As such captain, on 6 July 1912, when sailing from the port of Gubat to the port of Legaspi, Philippine Islands, he failed to notify the postmaster of the former port, in advance, of his intended sailing, and therefore failed to carry the mails between said ports. The Collector of Customs (JS Stanley, Acting Insular Collector of Customs) was threatening to suspend or revoke the license of de Villata by reason of said facts, under and by virtue of the terms of Customs Administrative Circular 627. De Villata filed an application for a writ of prohibition directed against the Collector of Customs to restrain him from enforcing Customs Administrative Circular 627 against de Villata. The case was submitted to the Supreme Court upon de Villata’s demurrer to Stanley’s answer to the complaint.

The Supreme Court held that the complaint, unless amended, must be dismissed, on the ground that no cause of action is developed by the pleadings. The Court ordered that 20 days thereafter, the complaint be dismissed at the costs of the de Villata unless amended so as to set forth a cause of action, and 10 days thereafter let the record be filed in the archives of original actions in the Supreme Court.

1.    Customs Administrative Circular 627 (Prescribing regulations for the transportation of mails on vessels engaged in the Philippine coastwise trade, 24 December 1910)
[par 1] Every vessel to which a license is granted under the provisions of section 117 of Act No. 355 to engage in the coastwise trade of the Philippine Islands . . . shall carry mail tendered for transportation in a safe and secure manner, and shall keep the same free from injury by water or otherwise. Masters, owners, or agents of vessels shall give prompt advance notice of the intended sailing thereof to the postmaster at each port of departure in ample time to permit the making up of mails for dispatch. Any changes in such sailings shall also be promptly communicated to the postmaster.  [par 2] Mails carried by vessels shall be delivered at ports of call on shore or on a wharf immediately after arrival and prior to the discharge or lading of any cargo, and shall be taken from shore or wharf just before the vessel’s sailing time, except at ports where the postal authorities have arranged for ship-side delivery. [par 3] Each vessel mentioned in the preceding paragraph shall be provided with a lock box having a slot in the top or side thereof to receive letters, papers, or other mail matter delivered on board the vessel after the mails have been closed at the post office for that particular voyage. All mail matter deposited in such box shall be delivered by the master, or his representative, to the postmaster at a port of call where a post office is located. [par 4] The master, owner, agent, or other person in charge of a vessel shall be legally liable for the loss of or damage to mail in his custody, or in the custody of his representatives or agents. [par 5] The license of the master of any vessel engaged in the coastwise trade of the Philippine Islands may be suspended or revoked by the Insular Collector of Customs for failure to comply with or strictly enforce the regulations governing the transportation of mails.  [par 6] Postmasters throughout the Islands are requested to promptly report to this office in writing any unnecessary delay in the handling of mails transported by vessels, or failure on the part of masters thereof to comply with the requirements of this circular. [par 7] Philippine customs officers shall give due publicity to the terms of this circular.”

2.    Decree of 4 August 1863
A decree dated 4 August 1863, provided as follows: “In the matter of the investigation made for the application of the provisions now in force relative to the notice to be given in advance to the post office of the sailings of ships, in the exceptional case of a ship just arrived in port and which has to sail immediately for the convenience of the interests of its owners or consignees,  Having considered the ordinances relating to packet boats and other royal orders and superior decrees imposing upon the captain of every ship the duty of giving notice to the postoffice four days in advance at least of the date they are to sail and the port of destination,  Considering that the actual application of such provisions might affect in a remarkable way the commercial interests in the very exceptional case spoken of, where the ship just anchored should have to set sail again before the period of four days referred to,  The capitamia del puerto, the administracion general de aduanas, comandancia general de carabineros and the administracion general de correos, having been heard,  This superior civil government ordains: That when a ship falls within the precise exceptional case raised by the within resolution, its captain shall only be required to give, from the very instant of determining the sailing of the ship, immediate notice to the postoffice stating the day and hour in which the sailing must be made, For the purposes that may be proper, let this decree be communicated to the comandancia general de marina, capitania del puerto de Manila and Cavite and the administracion general de correos, and let same be published in the Gazette for general information. Report to the government of H. M. and file.” (Berriz, Diccionario de la Administracion de Filipinas, 1888, vol. 1, p. 516.)

3.    Decree of 13 January 1876
A later decree dated 13 January 1876, was as follows: “Having considered the consultation made by the comandancia general de marina proposing the amendment of section 7 of the superior decree of December 18, 1868, relative to the duty imposed upon shipowners or consignees of steamers whether national or foreign, plying between this port and the other ports of the Archipelago or China and vice versa, of giving four days’ notice before the day they are to sail, to their great prejudice; and Having considered the reports submitted by the direccion general de administracion civil and the administracion general de correos:  Considering the fact that since that superior order was enforced, the fortunate increase of steamers and consequently the frequent repetition of voyages made by them, is evident, and therefore, this circumstance alone would change the object or reason which at that time made it necessary to impose the duty referred to in said section 7.  Considering the importance and value at certain times of the prompt clearance of one of its ships to a commercial firm which is at all times worthy of protection by the government.  This general government ordains as follows: (1) The period of four days prescribed by section 7 of the superior decree of December 18, 1868, is reduced to two. (2) The shipowners or consignees of steamers, whether national or foreign, plying between this port and the other ports of the archipelago or China, and vice versa, shall give notice to the captain of the port’s before midday, in order that the post office may have immediate notice of the sailing at an hour that may enable it to insert same in the Gazette of next day, and the ship may sail in the afternoon of the day next following.  (3) The office of the captain of the port will report daily to the administracion general de correos all ships that at 12 o’clock, noon, may have requested the visita de salida and in the event of there being none a report shall be sent stating that fact.  (4) The report of the captain of the port’s office must be at that administracion general before 2 o’clock, p. m., every day. (5) Captains and consignees of ships can in no case request the visita de salida without the period of forty-eight hours intervening between the time they report and the visit, so as to give opportune notice to the administracion de correos. (6) The centro de correos shall send the notices to the Gazette and other newspapers, and shall post them besides on a bulletin board at the door of the postoffice.” (Berriz, Diccionario de la Administracion de Filipinas, 1888, vol. 1, pp. 528, 529.)

4.    Vessels required to carry mails under Spanish sovereignty
An examination of its terms leaves little room for doubt that under Spanish sovereignty the Government of these Islands assumed and exercised the right to prescribe reasonable regulations requiring vessels trading in the Philippine Islands to carry the mails and to give due notice of their sailing hours to the postal authorities. Indeed it is a matter of common knowledge that, under the laws and regulations in force at the time of the change of sovereignty, all vessels engaged in the coasting trade were required to carry the mails, and to furnish the postal authorities with due notice of their sailing hours. There is no allegation in the pleadings denying the continuance in force of this practice under American sovereignty down to the date of the issuance of the above cited Customs Administrative Circular.

5.    Nothing in Philippine Bill of Rights depriving government power to make and enforce regulations
There is nothing in the Philippine Bill of Rights which deprived the Philippine Government of the power to make and enforce reasonable regulations of this nature with which it was clothed prior to the enactment of that statute.

6.    Regulations and control exercised on vessels licensed to engage in interisland trade not in contravention of Philippine Bill of Rights or US Constitution
Vessels licensed to engage in the interisland trade are common carriers; and that as to them, there is an extensive field of regulation and control which may properly be exercised by the state without contravention of the provisions of the Philippine Bill of Rights or the Constitution of the United States; and this notwithstanding the fact that the enforcement of such regulations may tend to restrict their liberty, and to control the free exercise of their discretion in the conduct of their business to a degree and in a form and manner which would not be tolerated under the constitutional guarantees with relation to the private business of a private citizen.

7.    Business of common carriers affected with public interest
Common carriers exercise a sort of public office, and have duties to perform in which the public is interested. Their business is, therefore, affected with a public interest, and is subject to public regulation.

8.    As business is of public employment, state may impose reasonable regulations
The nature of the business in which they are engaged as a public employment, is such that it is clearly within the power of the state to impose such just and reasonable regulations thereon as in the interest of the public it may deem proper. Of course such regulations must not have the effect of depriving an owner of this property without due process of law, nor of confiscating or appropriating private property without just compensation, nor of limiting or prescribing irrevocably vested rights or privileges lawfully acquired under a charter or franchise. But aside from such constitutional limitations, the determination of the nature and extent of the regulations which should be precribed rests in the hands of the legislator. (New Jersey Steam Nav. Co. vs. Merchants’ Bank, 6 How., 344, 382; Munn vs. Illinois, 94 U. S., 113, 13().)

9.    Power to regulate not power to destroy, limitation not confiscation
The power to regulate is not a power to destroy, and limitation is not the equivalent of confiscation. Under pretense of regulating fares and freights the state can not require a railroad corporation to carry persons or property without reward. Nor can it do that which in law amounts to a taking of private property for public use without just compensation, or without due process of law. (Chicago etc. R. Co. v.s. Minnesota, 134 U. S., 418; Minneapolis Eastern R. Co. vs. Minnesota, 134 U. S., 467.)

10.    Judicial interference does not occur unless the case presents flagrant attack upon rights and property in guise of regulation
The judiciary ought not to interfere with regulations established under legislative sanction unless they are so plainly and palpably unreasonable as to make their enforcement equivalent to the taking of property for public use without such compensation as under all the circumstances is just both to the owner and to the public, that is, judicial interference should never occur unless the case presents, clearly and beyond all doubt, such a flagrant attack upon the rights and property under the guise of regulations as to compel the court to say that the regulations in question will have the effect to deny just compensation for private property taken for the public use. (Chicago etc. R. Co. vs. Well- man, 143 U. S., 339; Smyth vs. Ames, 169 U. S., 466, 524; Henderson Bridge Co. vs. Henderson City, 173 U. S., 592, 614.) ” (Fisher vs. Yangco Steamship Co., 31 Phil. Rep., 1.)

11.    Regulation is reasonable
A regulation requiring all coasting vessels licensed to engage in the interisland trade to carry the mails and give prompt advance notice in all cases of intended sailings in ample time to permit dispatch of mails, and of changes of sailing hours, (manifestly with a view to make it possible for the post-office officials to tender mail for transportation at the last practicable moment prior to the hour of departure) is a reasonable regulation, made in the interests of the public, which the state has a right to impose when it grants licenses to the vessels affected thereby.

12.    Governments incur considerable expenditures to secure safety of vessels plying in Philippine waters
Considerable expenditures of public money have been made in the past and continue to be made annually for the purpose of securing the safety of vessels plying in Philippine waters. To this end lighthouses have been erected; wharfs and docks constructed; and buoys, bells and other warning signals maintained at points of danger. Largely for the purpose of conveying timely warnings of threatening weather to those that go down into the sea in ships, appropriations are made for the support of a Weather Bureau. Coast and geodetic surveys are conducted to keep them informed as to the dangers hidden beneath the treacherous sea. Licensed pilots are provided to insure safe entry into the dangerous ports and harbors throughout the Islands. Maps, charts and general information as to conditions affecting travel by water are kept up to date, and furnished all vessels having need for them. In a word, the Government unhesitatingly spends a considerable part of the public funds wherever and whenever it appears that the safety and even the convenience of the shipping in Philippine waters will be advanced thereby. Can it be fairly contended that a regulation is unreasonable which requires vessels licensed to engage in the interisland trade, in whose behalf the public funds are so lavishly expended, to hold themselves in readiness to carry the public mails when duly tendered for transportation, and to give such reasonable notice of their sailing hours as will insure the prompt dispatch of all mails ready for delivery at the hours thus designated?

13.    Regulations only begin to affect business of shipowner when it enters into employment as common carrier
It is only when the owner of a vessel enters the quasi-public employment of a common carrier that regulations of this kind begin to affect or control the conduct of his business, and he cannot be heard to complain that he is deprived of his property without due process of law when he elects, of his own free will and accord, to secure a license as a common carrier in Philippine waters, and to engage in a business, one of the conditions of which is that he will comply with such regulations. Under the law in force in these Islands at the time of the change of sovereignty, and of the enactment of the Act of Congress the owners of all licensed coasting vessels were required to comply with regulations of this character, as one of the conditions upon which they were permitted to engage in the quasi-public employment of carriers in the interisland trade. No one is compelled to comply with these regulations unless he voluntarily enters upon the business which they affect, and if he does enter such business he cannot; claim that he is unlawfully deprived, without due process of law, of that which he voluntarily agrees to surrender.

14.    Uniformity of taxes (assuming)
If regulations of this kind be regarded as in the nature of a tax upon the vessels affected thereby, the tax cannot be attacked for lack of uniformity so long as it is laid uniformly upon all the members of the class to which it extends. The only limitation upon the authority conferred is uniformity in laying the tax, and uniformity does not require the equal application of the tax to all persons or corporations who may come within its operation, but it is limited to geographical uniformity.

15.    Distinction between “equality” and “uniformity”
The distinction between “equality” and “uniformity” in taxation is thus stated in Black on Constitutional Law, page 392, citing Miller, Const., 241: “In practice, therefore, ‘equality’ in taxation means to be called upon to pay taxes, which taxes shall be strictly proportioned to the relative value of their taxable property. And ‘uniformity’ in taxation means that all taxable articles or kinds of property, of the same class, shall be taxed at the same rate. It does not mean that lands, chattels, securities, incomes, occupations, franchises, privileges, necessities, and luxuries shall all be assessed at the same rate. Different articles may be taxed at different amounts, provided the rate is uniform on the same class everywhere, with all people, and at all times. “

16.    Power to impose taxes unlimited in force
The power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is sub.iect to any restrictions whatever, except such as rest in the discretion of the authority which exercises it. It reaches to every trade or occupation; to every object of industry, use, or enjoyment; to every species of possession; and it imposes a burden which, in case of failure to discharge it, may be followed by seizure and sale or confiscation of property. No attribute of sovereignty is more pervading, and at no point does the power of the Government affect more constantly and intimately all the relations of life than through the exactions made under it. . . .

17.    Power to tax rests upon necessity, and is inherent in every sovereignty
The power to tax rests upon necessity, and is inherent in every sovereignty. The legislature of every free State will possess it under the general grant of legislative power, whether particularly specified in the constitution among the powers to be exercised by it or not. No constitutional government can exist without it, and no arbitrary government without regular and steady taxation could be anything but an oppressive and vexatious despotism, since the only alterative to taxation would be a forced extortion for the needs of government from such persons or objects as the men in power might select as victims. Chief Justice Marshall has said of this power: ‘The power of taxing the people and their property is essential to the very existence of government, and may be legitimately exercised on the objects to which it is applicable to the utmost extent to which the government may choose to carry it.

18.    Security against abuse of power of taxation
The only security against the abuse of this power is found in the structure of the government itself. In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation. The people of a State, therefore, give to their government a right of taxing themselves and their property; and as the exigencies of the government cannot be limited, they prescribe no limits to the exercise of this right, resting confidently on the interest of the legislator, and on the influence of the constituents over their representative, to guard them against its abuse.’

19.    Scope of power of legislation and taxation
The power of legislation, and consequently of taxation, operates on all persons and property belonging to the body politic. This is an original principle, which has its foundation in society itself. It is granted by all for the benefit of all. It resides in the government as part of itself, and need not be reserved where property of any description, or the right to use it in any manner, is granted to individuals or corporate bodies. However absolute the right of an individual may be, it is still in the nature of that right that it must bear a portion of the public burdens, and that portion must be determined by the legislature. This vital power may be abused; but the interest, wisdom, and justice of the representative body, and its relations with its constituents, furnish the only security where there is no express contract against unjust and excessive taxation, as well as against unwise legislation generally.

20.    Judicial department unfit to inquire on degree of taxation
It is unfit for the judicial department to inquire what degree of taxation is the legitimate use, and what degree may amount to the abuse, of the power. The judicial cannot prescribe to the legislative department of the government limitations upon the exercise of its acknowledged powers. The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the courts, but to the people by whom its members are elected. So if a particular tax bears heavily upon a corporation or a class of corporations, it cannot, for that reason only, be pronounced contrary to the Constitution. (Veazie Bank vs. Fenno, 8 Wall., 533, 548.)

21.    Judicial department charged with duty of enforcing constitution; Separation of powers
As a result of our written constitution, it is axiomatic that the judicial department of the government is charged with the solemn duty of enforcing the Constitution, and therefore in cases properly presented, of determining whether a given manifestation of authority has exceed the power conferred by that instrument, no instance is afforded from the foundation of the government where an act, which was within a power conferred, was declared to be repugnant to the Constitution, because it appeared to the judicial mind that the particular exertion of constitutional power was either unwise or unjust. To announce such a principle would amount to declaring that in our constitutional system the judiciary was not only charged with the duty of upholding the Constitution but also with the responsibility of correcting every possible abuse arising from the exercise by the other departments of their conceded authority. So to hold would be to overthrow the entire distinction between the legislative, judicial and executive departments of the government, upon which our system is founded, and would be a mere act of judicial usurpation. (McCray vs. U. S., 195 U. S., 27.)

22.    Presumed intention of Collector in circular
The provisions of paragraph I require trading vessels to carry mails tendered for transportation in a safe and secure manner. This does not necessarily require these vessels to accept and to carry mail free of charge. It is only when goods are lawfully tendered that common carriers may be compelled to carry them, and it must be presumed that the author of the circular had in mind a lawful tender of mails when he wrote this paragraph. If a vessels may not be required to carry mail without direct compensation, or a contract providing for such compensation, it must be presumed that the Collector did not intend to require vessels to accept mail without tender of reasonable compensation for such services or provision for payment by contract or otherwise, and that this paragraph was intended merely as a regulation requiring the acceptance of all mail thus lawfully tendered and the safe transportation of such mail when accepted for transportation.

23.    No fact or allegation in pleading that Collector of Customs is compelling vessel’s master to carry mail free of charge
There is absence of the necessary allegations setting forth that the Collector of Customs has compelled and is threatening to compel the master of the Viscaya to carry mails free of charge. It does not appear from the pleadings, nor in fact, that any attempt has been made or is being made by the Collector to compel the master of the Vizcaya, over his protest, to carry mail without compensation. The allegations of the complaint disclose merely that he threatened to enforce the regulations of the circular requiring the master of the Vizcaya to make provision for the transportation of the mails