262. Mendoza vs. PALDoctrine:

Facts:Jose Mendoza was the owner of the Cita Theater located in Naga, Camarines Sur where he used to exhibit movie pictures booked from movie producers or film owners in Manila. He contracted with the LVN Pictures Inc., a movie producer in Manila, for him to show during the town fiesta on September 17 and 18 a Tagalog film entitled Himala ng Birhen. He made extensive preparations, including advertisements in the general circulation, and 2000 posters printed and distributed.LVN Pictures delivered the can containing the film to Philippine Airlines (PAL) whose planes carried passengers and cargo and made regular trips from Manila to the Pili Airport near Naga, Camarines Sur.For reasons not explained by PAL, the can was not unloaded at Pili Airport and it was brought back to Manila. Mendoza only received it on September 20 (after the fiesta). He exhibited the film but he had missed the opportunity to realize a large profit as he expected for the people after the fiesta had already left for their towns.

Issue:WON PAL should be held liable for Mendozas lost sales?Held:NO. Under Art. 1107 of the Civil Code, a debtor in good faith like the defendant herein, may be held liable only for damages that were foreseen or might have been foreseen at the time the contract of transportation was entered into. The defendant company could not have foreseen the damages that would be suffered by Mendoza upon failure to deliver the can of film on the 17th of September 1948 for the reason that the plans of Mendoza to exhibit that film during the town fiesta and his preparation, specially the announcement of said exhibition by posters and advertisement in the newspaper, were not called to the defendants attention. The highest court of the State of New York refused