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Monday, December 2, 2013

G.R. No. L-37750 May 19, 1978 SWEET LINES, INC., petitioner, vs. HON. BERNARDO TEVES, Presiding Judge, CFI of Misamis Oriental Branch VII, LEOVIGILDO TANDOG, JR., and ROGELIO TIRO, respondents.



TOPIC: IN ADHESION CONTRACTS, STIPULATION VOID IF CONTRARY TO PUBLIC POLICY

NATURE OF THE CASE: This case was elevated to the SC to restrain the CFI of Misamis Oriental to proceed in the complaint filed by Tandog and Tiro against Sweet Lines on the ground that the venue was improperly laid.

FACTS:
            Sweet Lines is a shipping company which transports inter-island passengers and cargoes at Cagayan de Oro City. Rogelio Tiro, a contractor, and Atty. Leovigildo Tandog bought tickets from Sweet Lines and were bound to Bohol. When they were about to board M/S “Sweet Hope” which was bound for Tagbilaran City via the port of Cebu, they were informed that the vessel will not proceed to Bohol because most of the passengers were bound to Surigao. They were advised to relocate and board to M/S “Sweet Town”. However, the said vessel was already full and they were forced to agree “ to hide at the cargo section to avoid inspection of the officers of the Philippine Coastguard." Private respondents alleged that they were, during the trip," "exposed to the scorching heat of the sun and the dust coming from the ship's cargo of corn grits.” Further, the tickets they bought at Cagayan de Oro City for Tagbilaran were not honored and they were constrained to pay for other tickets. Thus, Tandog and Tiro filed a complaint against Sweet Lines for damages and breach of contract of carriage in the CFI of Misamis Oriental (Cagayan de Oro is the capital of Misamis Oriental).


SWEET LINES: It moved to dismiss the complaint on the ground of improper venue. This was based on the condition printed at the back of the tickets purchased by Tandog and Tiro which reads:
14. It is hereby agreed and understood that any and all actions arising out of the conditions and provisions of this ticket, irrespective of where it is issued, shall be filed in the competent courts in the City of Cebu.
CFI: Denied the motion to dismiss.
Sweet Lines: Motion for Reconsideration.
CFI: Denied the motion for reconsideration.
---Hence, this petition.
ISSUE: WON a common carrier engaged in inter-island shipping may stipulate thru condition printed at the back of passage tickets to its vessels that any and all actions arising out of the contract of carriage should be filed only in a particular province or city, in this case the City of Cebu, to the exclusion of all others.
WON the venue of the action should be in the City of Cebu as stipulated by the condition in the ticket bought by Tandog and Tiro.
SWEET LINES: The condition is valid and enforceable since Tandog and Tiro acceded to it when they purchased the tickets at its Cagayan de Oro branch office and took its vessel M/S "Sweet Town" for passage to Tagbilaran, Bohol. Moreover, venue may be validly waived and it is clear that the ticket stipulates that the condition had fixed the venue in the City of Cebu. Thus, the orders of the CFI Judge are an unwarranted departure from established jurisprudence governing the case; and that he acted without or in excess of his jurisdiction in is the orders complained of.
TANDOG AND TIRO: The condition in the ticket is not valid as it is not an essential element of the contract of carriage, being in itself a different agreement which requires the mutual consent of the parties to it. Tandog and Tiro had no say in its preparation, the existence of which they could not refuse, hence, they had no choice but to pay for the tickets and to avail of petitioner's shipping facilities out of necessity. Further, the carrier "has been exacting too much from the public by inserting impositions in the passage tickets too burdensome to bear," and the condition which was printed in fine letters is an imposition on the riding public and does not bind respondents. Lastly, while venue of actions may be transferred from one province to another, such arrangement requires the "written agreement of the parties", not to be imposed unilaterally; and that assuming that the condition is valid, it is not exclusive and does not, therefore, exclude the filing of the action in Misamis Oriental.
HELD: No, the actuations of Sweet Lines (putting a condition at the back of its tickets fixing the venue for any complaints filed against them in the City of Cebu) is contrary to public policy. Thus, the venue was not improperly laid in the CFI of Misamis Oriental.
There is no question that there was a valid contract of carriage entered into by petitioner and private respondents and that the passage tickets, upon which the latter based their complaint, are the best evidence thereof. All the essential elements of a valid contract, i.e., consent, cause or consideration and object, are present.
However, with respect to the condition which is in issue in this case — printed at the back of the passage tickets, these are commonly known as "contracts of adhesion," the validity and/or enforceability of which will have to be determined by the peculiar circumstances obtaining in each case and the nature of the conditions or terms sought to be enforced. For, "(W)hile generally, stipulations in a contract come about after deliberate drafting by the parties thereto, ... there are certain contracts almost all the provisions of which have been drafted only by one party, usually a corporation. Such contracts are called contracts of adhesion, because the only participation of the party is the signing of his signature or his 'adhesion' thereto. Insurance contracts, bills of lading, contracts of make of lots on the installment plan fall into this category"
By the peculiar circumstances under which contracts of adhesion are entered into — namely, that it is drafted only by one party, usually the corporation, and is sought to be accepted or adhered to by the other party, in this instance the passengers, private respondents, who cannot change the same and who are thus made to adhere thereto on the "take it or leave it" basis — certain guidelines in the determination of their validity and/or enforceability have been formulated in order to that justice and fair play characterize the relationship of the contracting parties.
To the same effect and import, and, in recognition of the character of contracts of this kind, the protection of the disadvantaged is expressly enjoined in Art. 24 of the New Civil Code —
In all contractual property or other relations, when one of the parties is at a disadvantage on account of his moral dependence, ignorance indigence, mental weakness, tender age and other handicap, the courts must be vigilant for his
protection.
Considered in the light Of the foregoing norms and in the context of circumstances prevailing in the inter-island shipping industry in the country today, the SC declared the condition at the back of the passage to be void and unenforceable. First, under circumstances obligation in the inter-island shipping industry, it is not just and fair to bind passengers to the terms of the conditions printed at the back of the passage tickets. Second, the condition subverts the public policy on transfer of venue of proceedings of this nature, since the same will prejudice rights and interests of innumerable passengers in different s of the country who, under the said condition, will have to file suits against petitioner only in the City of Cebu.
Moreover, it is hardly just and proper to expect the passengers to examine their tickets received from crowded/congested counters, more often than not during rush hours, for conditions that may be printed much charge them with having consented to the conditions, so printed, especially if there are a number of such conditions m fine print, as in this case. Thus, passengers cannot be expected to read all the conditions much less consider the public policies that the conditions therein violate.
Additionally, although venue may be changed or transferred from one province to another by agreement of the parties in writing t to Rule 4, Section 3, of the Rules of Court, such an agreement will not be held valid where it practically negates the action of the claimants, such as the private respondents herein. The philosophy underlying the provisions on transfer of venue of actions is the convenience of the plaintiffs as well as his witnesses and to promote the ends of justice. Considering the expense and trouble a passenger residing outside of Cebu City would incur to prosecute a claim in the City of Cebu, he would most probably decide not to file the action at all. The condition will thus defeat, instead of enhance, the ends of justice. Upon the other hand, petitioner has branches or offices in the respective ports of call of its vessels and can afford to litigate in any of these places. Hence, the filing of the suit in the CFI of Misamis Oriental, as was done in the instant case, will not cause inconvenience to, much less prejudice, petitioner.
Public policy is ". . . that principle of the law which holds that no subject or citizen can lawfully do that which has a tendency to be injurious to the public or against the public good ... 22 Under this principle" ... freedom of contract or private dealing is restricted by law for the good of the public. Clearly, the subject condition, if enforced, will be subversive of the public good or interest, since it will frustrate in meritorious cases, actions of passenger cants outside of Cebu City, thus placing petitioner company at a decided advantage over said persons, who may have perfectly legitimate claims against it. The said condition should, therefore, be declared void and unenforceable, as contrary to public policy — to make the courts accessible to all who may have need of their services.
            Thus, PETITION IS DENIED.

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