FACTS:

On January 26, 1994, SMITHKLINE Beecham (SMITHKLINE), a company in Nebraska, USA, delivered a shipment of 109 cartons of veterinary biologics to Burlington Air Express (BURLINGTON), an agent of Federal Express Corporation. The shipment was covered by a Burlington Airway Bill and insured by American Home Assurance Company (AHAC). Federal Express transported the goods to Manila, where they were stored at Cargohaus Inc.'s warehouse. Twelve days later, it was discovered that the cargoes were stored in a cool room instead of a refrigerator, causing damage to the goods. SMITHKLINE declared the shipment as a total loss and filed a claim with AHAC, which reimbursed them for the insured amount. Respondents filed an action for damages against petitioner, alleging negligence in the handling of the cargo. The trial court held petitioner and Cargohaus Inc. solidarily liable for the loss, and the Court of Appeals affirmed this decision. Petitioner filed a Petition for Review questioning the appellate court's ruling.

ISSUES:

1. Is the Petition proper for review by the Supreme Court?

2. Is Federal Express liable for damage to or loss of the insured goods?

RULING:

1. Propriety of Review

   The Petition is proper for review by the Supreme Court because the correctness of the legal conclusions drawn by the Court of Appeals from undisputed facts is a question of law.

2. Liability for Damages

   Federal Express Corporation is not liable for the damage to or loss of the insured goods due to the failure of the respondents to comply with the condition precedent of giving timely notice to the carrier as required by the Warsaw Convention and/or the airway bill. The notice constitutes a condition precedent to the accrual of a right of action against the carrier.

PRINCIPLES:

1. Condition Precedent

   The filing of a claim notice within the stipulated period is a condition precedent to the accrual of a right of action against a carrier for loss or damage to the goods. Failure to comply bars recovery.

2. Subrogation

   Upon receiving insurance proceeds for lost or damaged goods, the insurer is subrogated to the rights of the insured to the extent of the amount paid.

3. Bearer Instrument

   A duly indorsed insurance certificate in blank is considered a bearer instrument, giving the holder the right to collect on the insured loss or damage.

4. Jurisdiction of the Supreme Court

   The Supreme Court has jurisdiction to review legal questions pertaining to the correctness of the legal conclusions drawn from undisputed facts, as distinguished from questions involving the truth or falsehood of facts.

5. Warsaw Convention Compliance

   Compliance with the Warsaw Convention's requirements for filing a notice of damage or loss within a specific period is essential to hold an air carrier liable.