G.R. No. 150094 - Federal Express Corp. vs. American Home Assurance Company

On January 26, 1994, SMITHKLINE Beecham (SMITHKLINE) of Nebraska, USA delivered a shipment of 109 cartons of veterinary biologicals to Burlington Air Express (BURLINGTON), an agent of Federal Express Corporation (Petitioner), for delivery to SMITHKLINE and French Overseas Company in Makati City, Philippines.
The shipment was covered by Burlington Airway Bill No. 11263825, marked with “REFRIGERATE WHEN NOT IN TRANSIT” and “PERISHABLE.”
BURLINGTON insured the cargo for $39,339.00 with American Home Assurance Company (AHAC).
On January 27, 1994, BURLINGTON turned the cargo over to Federal Express which transported the shipment to Manila.

The shipment arrived in two flights: 92 cartons on January 29, 1994, and 17 cartons on January 31, 1994; both were immediately stored at Cargohaus, Inc. warehouse.
Federal Express notified GETC Cargo International Corp., the consignee’s customs broker, of the impending arrival.

On February 10, 1994, Dario C. Dioneda, a non-licensed customs broker assigned by GETC, found the cargo stored in an air-conditioned room, not refrigerated as required.
Upon inquiry, Cargohaus employees indicated that the cartons’ labels stated the vaccines should not be exposed to hot or cold temperature.
Samples were taken for examination at the Bureau of Animal Industry, which revealed that the vaccines were unusable (“ELISA reading below positive reference serum”).
SMITHKLINE abandoned the shipment, declaring a total loss, and filed a claim with AHAC through Philam Insurance Company, Inc. (PHILAM), which indemnified SMITHKLINE for the insured amount of $39,339.00.

AHAC and PHILAM (Respondents) filed an action against Federal Express for damages due to negligence in handling the cargo.
The Regional Trial Court (RTC) of Makati City held Federal Express and Cargohaus solidarily liable, awarding actual damages (pesos equivalent of $39,339.00), attorney’s fees, and costs.
Federal Express appealed to the Court of Appeals (CA), which affirmed the RTC decision and denied Federal Express’s motion for reconsideration.
Federal Express filed a Petition for Review under Rule 45 before the Supreme Court.

Whether the Petition for Review under Rule 45 is proper.
Whether respondents have legal personality to sue Federal Express given that the insurance indemnity was paid to SMITHKLINE, the insured was Burlington Air Express.
Whether the CA correctly ruled that the goods were delivered to Federal Express in good condition.
Whether certain exhibits (Fa and Ga) were inadmissible hearsay evidence.
Whether the CA erred in disregarding the respondents’ admission that Federal Express was not liable.
Whether the CA erred in ignoring the applicable provisions of the Warsaw Convention.