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for twelve (12) months with a salary of two hundred

THIRD DIVISION eighty US dollars ($280). It was this employment


agreement which was approved by the Philippine
Overseas Employment Administration (POEA).

[G.R. No. 129584. December 3, 1998] On September 16, 1992, Osdana left for Riyadh,
Saudi Arabia, and commenced working for GCC. She
was assigned to the College of Public Administration
of the Oleysha University and, contrary to the terms
TRIPLE EIGHT INTEGRATED SERVICES, and conditions of the employment contract, was
INC., petitioner, vs. NATIONAL LABOR made to wash dishes, cooking pots, and utensils,
RELATIONS COMMISSION, HON. perform janitorial work and other tasks which were
LABOR ARBITER POTENCIANO S. unrelated to her job designation as waitress. Making
CANIZARES, JR. and ERLINDA R. matters worse was the fact that she was made to work
OSDANA, respondents. a gruelling twelve-hour shift, from six oclock in the
morning to six oclock in the evening, without
overtime pay.
DECISION
Because of the long hours and the strenuous
ROMERO, J.:
nature of her work, Osdana suffered from numbness
and pain in her arms. The pain was such that she had
In this petition for certiorari now before us, to be confined at the Ladies Villa, a housing facility
petitioner Triple Eight Integrated Services Inc. seeks of GCC, from June 18 to August 22, 1993, during
to annul the decision[1] of public respondent National which period, she was not paid her salaries.
Labor Relations Commission (First Division, Quezon
City) dated March 11, 1997 affirming the August 20, After said confinement, Osdana was allowed to
1996 decision[2] of Labor Arbiter Potenciano resume work, this time as Food Server and Cook at
Canizares.Petitioner was ordered to pay private the Hota Bani Tameem Hospital, where she worked
respondent Erlinda Osdana her salaries for the seven days a week from August 22 to October 5,
unexpired portion of her employment contract, 1993. Again, she was not compensated.
unpaid salaries, salary differential, moral and
Then, from October 6 to October 23, 1993,
exemplary damages, as well as attorneys fees. On
Osdana was again confined at the Ladies Villa for no
April 28, 1997, the NLRC denied petitioners motion
apparent reason. During this period, she was still not
for reconsideration.[3]
paid her salary.
The antecedent facts follow.
On October 24, 1993, she was re-assigned to the
Sometime in August 1992, private respondent Oleysha University to wash dishes and do other
Osdana was recruited by petitioner for employment menial tasks. As with her previous assignment at the
with the latters principal, Gulf Catering Company said University, Osdana worked long hours and under
(GCC), a firm based in the Kingdom of Saudi Arabia. harsh conditions. Because of this, she was diagnosed
Under the original employment contract, Osdana was as having Bilateral Carpal Tunnel Syndrome, a
engaged to work as Food Server for a period of condition precipitated by activities requiring repeated
thirty-six (36) months with a salary of five hundred flexion, pronation, and supination of the wrist and
fifty Saudi rials (SR550). characterized by excruciating pain and numbness in
the arms.[5]
Osdana claims she was required by petitioner to
pay a total of eleven thousand nine hundred fifty As the pain became unbearable, Osdana had to
pesos (P11,950.00) in placement fees and other be hospitalized. She underwent two surgical
charges, for which no receipt was issued. She was operations, one in January 1994, another on April 23,
likewise asked to undergo a medical examination 1994. Between these operations, she was not given
conducted by the Philippine Medical Tests System, a any work assignments even if she was willing and
duly accredited clinic for overseas workers, which able to do light work in accordance with her doctors
found her to be Fit of Employment. advice. Again,
Osdana wasnot paid any compensation for the period
Subsequently, petitioner asked Osdana to sign between February to April 22, 1994.
another Contractor-Employee Agreement[4] which
provided that she would be employed as a waitress
After her second operation, Osdana was Hence, this petition for certiorari.
discharged from the hospital on April 25, 1994. The
medical report stated that she had very good Petitioner alleges grave abuse of discretion on
improvement of the symptoms and she was the part of the public respondents for the following
discharged on the second day of the operation.[6] reasons: (a) ruling in favor of Osdana even if there
was no factual or legal basis for the award and, (b)
Four days later, however, she was dismissed holding petitioner solely liable for her claims despite
from work, allegedly on the ground of illness. She the fact that its liability is joint and several with its
was not given any separation pay nor was she paid principal, GCC.
her salaries for the periods when she was not allowed
to work. At the outset, petitioner argues that public
respondent Labor Arbiter gravely abused his
Upon her return to the Philippines, Osdana discretion when he rendered the questioned decision
sought the help of petitioner, but to no avail. She was dated August 20, 1996 without stating the facts and
thus constrained to file a complaint before the POEA the law where he derived his conclusions.[7] In
against petitioner, praying for unpaid and underpaid support of this argument, petitioner cites the first
salaries, salaries for the unexpired portion of the paragraph of Article VIII, Section 14 of the
employment contract, moral and exemplary damages Constitution: No decision shall be rendered by any
and attorneys fees, as well as the revocation, court without expressing therein clearly and distinctly
cancellation, suspension and/or imposition of the facts and the law on which it is based.
administrative sanctions against petitioner.
On this point, it is enough to note that the
Pursuant to Republic Act No. 8042, otherwise decisions of both the labor arbiter and the NLRC
known as the Migrant Workers and Overseas were based mainly on the facts and allegations in
Filipinos Act of 1995, the case was transferred to the Osdanas position paper and supporting
arbitration branch of the NLRC and assigned to documents. We find these sufficient to constitute
Labor Arbiter Canizares. substantial evidence to support the questioned
decisions. Generally, findings of facts of quasi-
In a decision dated August 20, 1996, the labor judicial agencies like the NLRC are accorded great
arbiter ruled in favor of Osdana. The dispositive respect and, at times, even finality if supported by
portion of the decision follows: substantial evidence. Substantial evidence is such
amount of relevant evidence which a reasonable mind
Wherefore, the respondent is hereby ordered to pay might accept as adequate to justify a conclusion.[8]
the complainant US$2,499.00 as salaries for the
unexpired portion of the contract, and US$1,076.00 Moreover, well-settled is the rule that if doubts
as unpaid salary and salary differential, or its exist between the evidence presented by the employer
equivalent in Philippine Peso. and the employee, the scales of justice must be tilted
in favor of the latter. Thus, in controversies between
a worker and her employer, doubts reasonably arising
The respondent is likewise ordered to pay the
from the evidence or in the interpretation of
complainant P50,000 moral damages, and P20,000
exemplary damages. agreements should be resolved in favor of the former.
Petitioner, for its part, was given the same
The respondent is further ordered to pay the opportunity to file its own position paper but instead,
complainant 10% of the monetary award as attorneys it opted to file a two-page Answer With Special And
fee. Affirmative Defenses, denying generally the
allegations of the complaint.[9]
Other claims are hereby dismissed for lack of As observed by the labor arbiter, The record
sufficient evidence. shows the complainant filed complaint (sic), position
paper, and supporting documents, and prosecuted her
SO ORDERED. case diligently; while the respondent merely tried to
settle the case amicably, failing even to file its
Aggrieved by the labor arbiters decision, position paper.[10] The present case being one for
petitioner appealed to the NLRC, which affirmed the illegal dismissal, it was incumbent upon petitioner
decision in question on March 11, 1997. Petitioners employer to show by substantial evidence that the
motion for reconsideration was likewise denied by termination was validly made. In termination cases,
the NLRC in its order dated April 28, 1997. the burden of proof rests on the employer to show
that the dismissal is for a just cause.[11] Having failed there is a certification by competent public authority
to file its position paper and to support its denials and that the disease is of such nature or at such a stage
affirmative defenses in its answer, petitioner cannot that it cannot be cured within a period of six (6)
now fault the labor arbiter and the NLRC for relying months with proper medical treatment. If the disease
on the facts as laid down by Osdana in her position or ailment can be cured within the period, the
paper and supported by other documents. The employer shall not terminate the employee but shall
essence of due process is that a party be afforded ask the employee to take a leave. The employer shall
reasonable opportunity to be heard and to submit any reinstate such employee to his former position
evidence he may have in support of his immediately upon the restoration of his normal
defense,[12] and this is exactly what petitioner was health. (Underscoring supplied)
accorded, although it chose not to fully avail thereof.
This Court, therefore, upholds the finding of Viewed in the light of the foregoing provisions,
herein public respondents that the facts and the the manner by which Osdana was terminated was
evidence on record adduced by Osdana and taken in clearly in violation of the Labor Code and its
relation to the answer of petitioner show that indeed implementing rules and regulations.
there was breach of the employment contract and In the first place, Osdanas continued
illegal dismissal committed by petitioners principal. employment despite her illness was
Petitioner claims that public respondents not prohibited by law nor was it prejudicial to her
committed grave abuse of discretion when they ruled health, as well as that of her co-employees. In fact,
that Osdana had been illegally dismissed by GCC. It the medical report issued after her second operation
maintains that the award for salaries for the stated that she had very good improvement of the
unexpired portion of the contract was improper symptoms. Besides, Carpal Tunnel Syndrome is not a
because Osdana was validly dismissed on the ground contagious disease.
of illness. Petitioner attributes good faith on the part of its
The argument must fail. principal, claiming that It was the concern for the
welfare and physical well being (sic) of private
In its Answer, Memorandum of respondent that drove her employer to take the
Appeal,[13] Petition for Certiorari,[14] and painful decision of terminating her from the service
Consolidated Reply,[15] petitioner consistently and having her repatriated to the Philippines at its
asserted that Osdana was validly repatriated for expense. The employer did not want to risk the
medical reasons, but it failed to substantiate its claim aggravation of the illness of private respondent which
that such repatriation was justified and done in could have been the logical consequence were private
accordance with law. respondent allowed to continue with her job.[16]
Article 284 of the Labor Code is clear on the The Court notes, however, that aside from these
matter of termination by reason of disease or illness, bare allegations, petitioner has not presented any
viz: medical certificate or similar document from a
competent public health authority in support of its
Art. 284. Disease as a ground for termination An claims.
employer may terminate the services of an employee On the medical certificate requirement,
who has been found to be suffering from any disease petitioner erroneously argues that private respondent
and whose continued employment is prohibited by was employed in Saudi Arabia and not here in the
law or prejudicial to his health as well as the health of Philippines. Hence, there was a physical
his co-employees: x x x. impossibility to secure from a Philippine public
health authority the alluded medical certificate that
Specifically, Section 8, Rule 1, Book VI of the public respondents illness will not be cured within a
Omnibus Rules Implementing the Labor Code period of six months.[17]
provides:
Petitioner entirely misses the point, as counsel
for private respondent states in the Comment.[18] The
Sec. 8. Disease as a ground for dismissal Where the
rule simply prescribes a certification by a competent
employee suffers from a disease and his continued
public health authority and not a Philippine public
employment is prohibited by law or prejudicial to his
health authority.
health or to the health of his co-employees, the
employer shall not terminate his employment unless
If, indeed, Osdana was physically unfit to The State shall afford full protection to labor, local
continue her employment, her employer could have and overseas, organized and unorganized, and
easily obtained a certification to that effect from a promote full employment and equality of
competent public health authority in Saudi Arabia, employment opportunities for all.
thereby heading off any complaint for illegal
dismissal. It shall guarantee the rights of all workers to self-
The requirement for a medical certificate under organization, collective bargaining and negotiations,
Article 284 of the Labor Code cannot be dispensed and peaceful concerted activities, including the right
with; otherwise, it would sanction the unilateral and to strike in accordance with law. They shall be
arbitrary determination by the employer of the entitled to security of tenure, humane conditions of
gravity or extent of the employees illness and thus work, and a living wage. They shall also participate
defeat the public policy on the protection of labor. As in policy and decision-making processes affecting
the Court observed in Prieto v. NLRC,[19] The Court their rights and benefits as may be provided by law.
is not unaware of the many abuses suffered by our
overseas workers in the foreign land where they have x x x x x x x x x.
ventured, usually with heavy hearts, in pursuit of a
This public policy should be borne in mind in
more fulfilling future. Breach of contract,
this case because to allow foreign employers to
maltreatment, rape, insufficient nourishment, sub-
determine for and by themselves whether an overseas
human lodgings, insults and other forms of
contract worker may be dismissed on the ground of
debasement, are only a few of the inhumane acts to illness would encourage illegal or arbitrary pre-
which they are subjected by their foreign employers, termination of employment contracts.
who probably feel they can do as they please in their
country. While these workers may indeed have As regards the monetary award of salaries for
relatively little defense against exploitation while the unexpired portion of the employment contract,
they are abroad, that disadvantage must not continue unpaid salaries and salary differential granted by
to burden them when they return to their own public respondents to Osdana, petitioner assails the
territory to voice their muted complaint. There is no same for being contrary to law, evidence and existing
reason why, in their own land, the protection of our jurisprudence, all of which therefore constitutes grave
own laws cannot be extended to them in full measure abuse of discretion.
for the redress of their grievances.
Although this contention is without merit, the
Petitioner likewise attempts to sidestep the award for salaries for the unexpired portion of the
medical certificate requirement by contending that contract must, however, be reduced. Paragraph 5,
since Osdana was working in Saudi Arabia, her Section 10 ofR.A. No. 8042, applies in this case,
employment was subject to the laws of the host thus:
country. Apparently, petitioner hopes to make it
appear that the labor laws of Saudi Arabia do not In case of termination of overseas employment
require any certification by a competent public health without just, valid or authorized cause as defined by
authority in the dismissal of employees due to illness. law or contract, the worker shall be entitled to the full
Again, petitioners argument is without merit. reimbursement of his placement fee with interest at
twelve percent (12%) per annum, plus his salaries for
First, established is the rule that lex loci the unexpired portion of his employment contract or
contractus (the law of the place where the contract is for three (3) months for every year of the unexpired
made) governs in this jurisdiction. There is no term, whichever is less.
question that the contract of employment in this case
was perfected here in the Philippines. Therefore, the In the case at bar, while it would appear that the
Labor Code, its implementing rules and regulations, employment contract approved by the POEA was
and other laws affecting labor apply in this only for a period of twelve months, Osdanas actual
case. Furthermore, settled is the rule that the courts of stint with the foreign principal lasted for one year and
the forum will not enforce any foreign claim seven-and-a-half months. It may be inferred,
obnoxious to the forums public policy.[20] Here in the therefore, that the employer renewed her employment
Philippines, employment agreements are more than contract for another year. Thus, the award for the
contractual in nature. The Constitution itself, in unexpired portion of the contract should have been
Article XIII Section 3, guarantees the special US$1,260 (US$280 x 4 months) or its equivalent in
protection of workers, to wit:
Philippine pesos, not US$2,499 as adjudged by the arbiter which was affirmed by the NLRC did not
labor arbiter and affirmed by the NLRC. really absolve the foreign principal.
As for the award for unpaid salaries and Petitioner was the only one held liable for
differential amounting to US$1,076 representing Osdanas monetary claims because it was the only
seven months unpaid salaries and one month respondent named in the complaint and it does not
underpaid salary, the same is proper because, as appear that petitioner took steps to have its principal
correctly pointed out by Osdana, the no work, no pay included as co-respondent. Thus, the POEA, and later
rule relied upon by petitioner does not apply in this the labor arbiter, did not acquire jurisdiction over the
case. In the first place, the fact that she had not foreign principal.
worked from June 18 to August 22, 1993 and then
from January 24 to April 29, 1994, was due to her This is not to say, however, that GCC may not
illness which was clearly work-related. Second, from be held liable at all. Petitioner can still claim
August 23 to October 5, 1993, Osdana actually reimbursement or contribution from it for the
worked as food server and cook for seven days a amounts awarded to the illegally-dismissed
week at the Hota Bani Tameem Hospital, but was not employee.
paid any salary for the said period. Finally, from WHEREFORE, in view of the foregoing, the
October 6 to October 23, 1993, she was confined to instant petition is DISMISSED. Accordingly, the
quarters and was not given any work for no reason at decisions of the labor arbiter dated August 20, 1996,
all. and of the NLRC dated March 11, 1997, are
Now, with respect to the award of moral and AFFIRMED with the MODIFICATION that the
exemplary damages, the same is likewise proper but award to private respondent Osdana should be one
should be reduced. Worth reiterating is the rule that thousand two hundred sixty US dollars (US$1,260),
moral damages are recoverable where the dismissal or its equivalent in Philippine pesos, as salaries for
of the employee was attended by bad faith or fraud or the unexpired portion of the employment contract,
constituted an act oppressive to labor, or was done in and one thousand seventy six US dollars (US$1,076),
a manner contrary to morals, good customs, or public or its equivalent in Philippine pesos, representing
policy.[21] Likewise, exemplary damages may be unpaid salaries for seven (7) months and underpaid
awarded if the dismissal was effected in a wanton, salary for one (1) month, plus interest.
oppressive or malevolent manner.[22] Petitioner is likewise ordered to pay private
According to the facts of the case as stated by respondent P30,000.00 in moral
public respondent, Osdana was made to perform such damages, P10,000.00 in exemplary damages and 10%
menial chores, as dishwashing and janitorial work, attorneys fees.
among others, contrary to her job designation as This decision is without prejudice to any
waitress. She was also made to work long hours remedy or claim for reimbursement or contribution
without overtime pay. Because of such arduous petitioner may institute against its foreign principal,
working conditions, she developed Carpal Tunnel Gulf Catering Company. No pronouncement as to
Syndrome. Her illness was such that she had to costs.
undergo surgery twice. Since her employer
determined for itself that she was no longer fit to SO ORDERED.
continue working, they sent her home posthaste
without as much as separation pay or compensation
for the months when she was unable to work because
of her illness.Since the employer is deemed to have
acted in bad faith, the award for attorneys fees is
likewise upheld.
Finally, petitioner alleges grave abuse of
discretion on the part of public respondents for
holding it solely liable for the claims of Osdana
despite the fact that its liability with the principal is
joint and several.
Petitioner misunderstands the decision in
question. It should be noted that contrary to
petitioners interpretation, the decision of the labor
G.R. No. 101538 June 23, 1992 On March 12, 1987, the petitioner sued NOA for
damages in the Regional Trial Court of Makati.
AUGUSTO BENEDICTO SANTOS III, On April 13, 1987, NOA moved to dismiss the
represented by his father and legal guardian, complaint on the ground of lack of jurisdiction.
Augusto Benedicto Santos, petitioner, Citing the above-quoted article, it contended that
vs. the complaint could be instituted only in the
NORTHWEST ORIENT AIRLINES and COURT territory of one of the High Contracting Parties,
OF APPEALS, respondents. before:

1. the court of the domicile of


the carrier;
CRUZ, J.:
2. the court of its principal place
of business;
This case involves the Proper interpretation of
Article 28(1) of the Warsaw Convention, reading
as follows: 3. the court where it has a place
of business through which the
Art. 28. (1) An action for contract had been made;
damage must be brought at the
option of the plaintiff, in the 4. the court of the place of
territory of one of the High destination.
Contracting Parties, either
before the court of the domicile The private respondent contended that the
of the carrier or of his principal Philippines was not its domicile nor was this its
place of business, or where he principal place of business. Neither was the
has a place of business through petitioner's ticket issued in this country nor was
which the contract has been his destination Manila but San Francisco in the
made, or before the court at the United States.
place of destination.
On February 1, 1988, the lower court granted
The petitioner is a minor and a resident of the the motion and dismissed the case. 2 The
Philippines. Private respondent Northwest Orient petitioner appealed to the Court of Appeals,
Airlines (NOA) is a foreign corporation with which affirmed the decision of the lower
principal office in Minnesota, U.S.A. and court. 3 On June 26, 1991, the petitioner filed a
licensed to do business and maintain a branch motion for reconsideration, but the same was
office in the Philippines. denied. 4 The petitioner then came to this Court,
raising substantially the same issues it
On October 21, 1986, the petitioner purchased submitted in the Court of Appeals.
from NOA a round-trip ticket in San Francisco.
U.S.A., for his flight from San Francisco to The assignment of errors may be grouped into
Manila via Tokyo and back. The scheduled two major issues, viz:
departure date from Tokyo was December 20,
1986. No date was specified for his return to (1) the constitutionality of Article 28(1) of the
San Francisco. 1 Warsaw Convention; and

On December 19, 1986, the petitioner checked (2) the jurisdiction of Philippine courts over the
in at the NOA counter in the San Francisco case.
airport for his scheduled departure to Manila.
Despite a previous confirmation and re-
The petitioner also invokes Article 24 of the Civil
confirmation, he was informed that he had no
Code on the protection of minors.
reservation for his flight from Tokyo to Manila.
He therefore had to be wait-listed.
I
THE ISSUE OF opportunely raised by the proper party; and the
CONSTITUTIONALITY resolution of the question is unavoidably
necessary to the decision of the case itself. 6
A. The petitioner claims that the
lower court erred in not ruling Courts generally avoid having to decide a
that Article 28(1) of the Warsaw constitutional question. This attitude is based on
Convention violates the the doctrine of separation of powers, which
constitutional guarantees of due enjoins upon the departments of the government
process and equal protection. a becoming respect for each other's acts.

The Republic of the Philippines is a party to the The treaty which is the subject matter of this
Convention for the Unification of Certain Rules petition was a joint legislative-executive act. The
Relating to International Transportation by Air, presumption is that it was first carefully studied
otherwise known as the Warsaw Convention. It and determined to be constitutional before it was
took effect on February 13, 1933. The adopted and given the force of law in this
Convention was concurred in by the Senate, country.
through its Resolution No. 19, on May 16, 1950.
The Philippine instrument of accession was The petitioner's allegations are not convincing
signed by President Elpidio Quirino on October enough to overcome this presumption.
13, 1950, and was deposited with the Polish Apparently, the Convention considered the four
government on November 9, 1950. The places designated in Article 28 the most
Convention became applicable to the Philippines convenient forums for the litigation of any claim
on February 9, 1951. On September 23, 1955, that may arise between the airline and its
President Ramon Magsaysay issued passenger, as distinguished from all other
Proclamation No. 201, declaring our formal places. At any rate, we agree with the
adherence thereto. "to the end that the same respondent court that this case can be decided
and every article and clause thereof may be on other grounds without the necessity of
observed and fulfilled in good faith by the resolving the constitutional issue.
Republic of the Philippines and the citizens
thereof." 5 B. The petitioner claims that the
lower court erred in not ruling
The Convention is thus a treaty commitment that Art. 28(1) of the Warsaw
voluntarily assumed by the Philippine Convention is inapplicable
government and, as such, has the force and because of a fundamental
effect of law in this country. change in the circumstances
that served as its basis.
The petitioner contends that Article 28(1) cannot
be applied in the present case because it is The petitioner goes at great lengths to show that
unconstitutional. He argues that there is no the provisions in the Convention were intended
substantial distinction between a person who to protect airline companies under "the
purchases a ticket in Manila and a person who conditions prevailing then and which have long
purchases his ticket in San Francisco. The ceased to exist." He argues that in view of the
classification of the places in which actions for significant developments in the airline industry
damages may be brought is arbitrary and through the years, the treaty has become
irrational and thus violates the due process and irrelevant. Hence, to the extent that it has lost its
equal protection clauses. basis for approval, it has become
unconstitutional.
It is well-settled that courts will assume
jurisdiction over a constitutional question only if The petitioner is invoking the doctrine of rebus
it is shown that the essential requisites of a sic stantibus. According to Jessup, "this doctrine
judicial inquiry into such a question are first constitutes an attempt to formulate a legal
satisfied. Thus, there must be an actual case or principle which would justify non-performance of
controversy involving a conflict of legal rights a treaty obligation if the conditions with relation
susceptible of judicial determination; the to which the parties contracted have changed so
constitutional question must have been materially and so unexpectedly as to create a
situation in which the exaction of performance But the more important consideration is that the
would be unreasonable." 7 The key element of treaty has not been rejected by the Philippine
this doctrine is the vital change in the condition government. The doctrine of rebus sic
of the contracting parties that they could not stantibus does not operate automatically to
have foreseen at the time the treaty was render the treaty inoperative. There is a
concluded. necessity for a formal act of rejection, usually
made by the head of State, with a statement of
The Court notes in this connection the following the reasons why compliance with the treaty is no
observation made in Day v. Trans World longer required.
Airlines, Inc.: 8
In lieu thereof, the treaty may be denounced
The Warsaw drafters wished to even without an expressed justification for this
create a system of liability rules action. Such denunciation is authorized under its
that would cover all the hazards Article 39, viz:
of air travel . . . The Warsaw
delegates knew that, in the Article 39. (1) Any one of the
years to come, civil aviation High Contracting Parties may
would change in ways that they denounce this convention by a
could not foresee. They wished notification addressed to the
to design a system of air law Government of the Republic of
that would be both durable and Poland, which shall at once
flexible enough to keep pace inform the Government of each
with these changes . . . The of the High Contracting Parties.
ever-changing needs of the
system of civil aviation can be (2) Denunciation shall take
served within the framework effect six months after the
they created. notification of denunciation, and
shall operate only as regards
It is true that at the time the Warsaw Convention the party which shall have
was drafted, the airline industry was still in its proceeded to denunciation.
infancy. However, that circumstance alone is not
sufficient justification for the rejection of the Obviously. rejection of the treaty, whether on the
treaty at this time. The changes recited by the ground of rebus sic stantibus or pursuant to
petitioner were, realistically, not entirely Article 39, is not a function of the courts but of
unforeseen although they were expected in a the other branches of government. This is a
general sense only. In fact, the Convention itself, political act. The conclusion and renunciation of
anticipating such developments, contains the treaties is the prerogative of the political
following significant provision: departments and may not be usurped by the
judiciary. The courts are concerned only with the
Article 41. Any High Contracting interpretation and application of laws and
Party shall be entitled not earlier treaties in force and not with their wisdom or
than two years after the coming efficacy.
into force of this convention to
call for the assembling of a new C. The petitioner claims that the
international conference in order lower court erred in ruling that
to consider any improvements the plaintiff must sue in the
which may be made in this United States, because this
convention. To this end, it will would deny him the right to
communicate with the access to our courts.
Government of the French
Republic which will take the The petitioner alleges that the expenses and
necessary measures to make
difficulties he will incur in filing a suit in the
preparations for such
United States would constitute a constructive
conference.
denial of his right to access to our courts for the
protection of his rights. He would consequently
be deprived of this vital guaranty as embodied in High Contracting Parties," the provisions of the
the Bill of Rights. Convention automatically apply and exclusively
govern the rights and liabilities of the airline and
Obviously, the constitutional guaranty of access its passenger.
to courts refers only to courts with appropriate
jurisdiction as defined by law. It does not mean Since the flight involved in the case at bar is
that a person can go to any court for redress of international, the same being from the United
his grievances regardless of the nature or value States to the Philippines and back to the United
of his claim. If the petitioner is barred from filing States, it is subject to the provisions of the
his complaint before our courts, it is because Warsaw Convention, including Article 28(1),
they are not vested with the appropriate which enumerates the four places where an
jurisdiction under the Warsaw Convention, which action for damages may be brought.
is part of the law of our land.
Whether Article 28(1) refers to jurisdiction or
II only to venue is a question over which
authorities are sharply divided. While the
THE ISSUE OF petitioner cites several cases holding that Article
JURISDICTION. 28(1) refers to venue rather than
jurisdiction, 9 there are later cases cited by the
A. The petitioner claims that the private respondent supporting the conclusion
lower court erred in not ruling that the provision is jurisdictional. 10
that Article 28(1) of the Warsaw
Convention is a rule merely of Venue and jurisdiction are entirely distinct
venue and was waived by matters. Jurisdiction may not be conferred by
defendant when it did not move consent or waiver upon d court which otherwise
to dismiss on the ground of would have no jurisdiction over the subject-
improper venue. matter of an action; but the venue of an action
as fixed by statute may be changed by the
By its own terms, the Convention applies to all consent of the parties and an objection that the
plaintiff brought his suit in the wrong county may
international transportation of persons
be waived by the failure of the defendant to
performed by aircraft for hire.
make a timely objection. In either case, the court
may render a valid judgment. Rules as to
International transportation is defined in jurisdiction can never be left to the consent or
paragraph (2) of Article 1 as follows: agreement of the parties, whether or not a
prohibition exists against their alteration. 11
(2) For the purposes of this
convention, the expression A number of reasons tends to support the
"international transportation" characterization of Article 28(1) as a jurisdiction
shall mean any transportation in and not a venue provision. First, the wording of
which, according to the contract Article 32, which indicates the places where the
made by the parties, the place action for damages "must" be brought,
of departure and the place of underscores the mandatory nature of Article
destination, whether or not there 28(1). Second, this characterization is consistent
be a break in the transportation with one of the objectives of the Convention,
or a transshipment, are situated which is to "regulate in a uniform manner the
[either] within the territories of conditions of international transportation by air."
two High Contracting Parties . . . Third, the Convention does not contain any
provision prescribing rules of jurisdiction other
Whether the transportation is "international" is than Article 28(1), which means that the phrase
determined by the contract of the parties, which "rules as to jurisdiction" used in Article 32 must
in the case of passengers is the ticket. When the refer only to Article 28(1). In fact, the last
contract of carriage provides for the sentence of Article 32 specifically deals with the
transportation of the passenger between certain exclusive enumeration in Article 28(1) as
designated terminals "within the territories of two "jurisdictions," which, as such, cannot be left to
the will of the parties regardless of the time void. Nevertheless for the
when the damage occurred. transportation of goods,
arbitration clauses shall be
This issue was analyzed in the leading case allowed, subject to this
of Smith v. Canadian Pacific Airways, convention, if the arbitration is to
Ltd., 12 where it was held: take place within one of the
jurisdictions referred to in the
. . . Of more, but still incomplete, first paragraph of Article 28.
assistance is the wording of
Article 28(2), especially when His point is that since the requirements of Article
considered in the light of Article 28(1) can be waived "after the damages (shall
32. Article 28(2) provides that have) occurred," the article should be regarded
"questions of procedure shall be as possessing the character of a "venue" and
governed by the law of the court not of a "jurisdiction" provision. Hence, in
to which the case is submitted" moving to dismiss on the ground of lack of
(Emphasis supplied). Section jurisdiction, the private respondent has waived
(2) thus may be read to leave improper venue as a ground to dismiss.
for domestic decision questions
regarding the suitability and The foregoing examination of Article 28(1) in
location of a particular Warsaw relation to Article 32 does not support this
Convention case. conclusion. In any event, we agree that even
granting arguendo that Article 28(1) is a venue
In other words, where the matter is governed by and not a jurisdictional provision, dismissal of
the Warsaw Convention, jurisdiction takes on a the case was still in order. The respondent court
dual concept. Jurisdiction in the international was correct in affirming the ruling of the trial
sense must be established in accordance with court on this matter, thus:
Article 28(1) of the Warsaw Convention,
following which the jurisdiction of a particular Santos' claim that NOA waived
court must be established pursuant to the venue as a ground of its motion
applicable domestic law. Only after the question to dismiss is not correct. True it
of which court has jurisdiction is determined will is that NOA averred in its
the issue of venue be taken up. This second MOTION TO DISMISS that the
question shall be governed by the law of the ground thereof is "the Court has
court to which the case is submitted. no subject matter jurisdiction to
entertain the Complaint" which
The petitioner submits that since Article 32 SANTOS considers as
states that the parties are precluded "before the equivalent to "lack of jurisdiction
damages occurred" from amending the rules of over the subject matter . . ."
Article 28(1) as to the place where the action However, the gist of NOA's
may be brought, it would follow that the Warsaw argument in its motion is that
Convention was not intended to preclude them the Philippines is not the proper
from doing so "after the damages occurred." place where SANTOS could file
the action meaning that the
venue of the action is improperly
Article 32 provides:
laid. Even assuming then that
the specified ground of the
Art. 32. Any clause contained in motion is erroneous, the fact is
the contract and all special the proper ground of the motion
agreements entered into before improper venue has been
the damage occurred by which discussed therein.
the parties purport to infringe
the rules laid down by this
Waiver cannot be lightly inferred. In case of
convention, whether by deciding
doubt, it must be resolved in favor of non-waiver
the law to be applied, or by
if there are special circumstances justifying this
altering the rules as to
conclusion, as in the petition at bar. As we
jurisdiction, shall be null and
observed in Javier vs. Intermediate Court of Canada and Mrs. Silverberg as
Appeals: 13 evidenced by the ticket booklets
and the Flight Coupon No. 1,
Legally, of course, the lack of was a contract for Air Canada to
proper venue was deemed carry Mrs. Silverberg to Los
waived by the petitioners when Angeles on a certain flight, a
they failed to invoke it in their certain time and a certain class,
original motion to dismiss. Even but that the time for her to return
so, the motivation of the private remained completely in her
respondent should have been power. Coupon No. 2 was only
taken into account by both the a continuing offer by Air Canada
trial judge and the respondent to give her a ticket to return to
court in arriving at their Montreal between certain dates.
decisions. ...

The petitioner also invokes KLM Royal Dutch The only conclusion that can be
Airlines v. RTC, 14 a decision of our Court of reached then, is that "the place
Appeals, where it was held that Article 28(1) is a of destination" as used in the
venue provision. However, the private Warsaw Convention is
respondent avers that this was in effect reversed considered by both the
by the case of Aranas v. United Canadian C.T.C. and the United
Airlines, 15 where the same court held that States C.A.B. to describe at
Article 28(1) is a jurisdictional provision. Neither least two "places of
of these cases is binding on this Court, of destination," viz., the "place of
course, nor was either of them appealed to us. destination" of a particular flight
Nevertheless, we here express our own either an "outward destination"
preference for the later case of Aranas insofar from the "point of origin" or from
as its pronouncements on jurisdiction conform to the "outward point of
the judgment we now make in this petition. destination" to any place in
Canada.
B. The petitioner claims that the
lower court erred in not ruling Thus the place of destination
that under Article 28(1) of the under Art. 28 and Art. 1 of the
Warsaw Convention, this case Warsaw Convention of the flight
was properly filed in the on which Mrs. Silverberg was
Philippines, because Manila killed, was Los Angeles
was the destination of the according to the ticket, which
plaintiff. was the contract between the
parties and the suit is properly
filed in this Court which has
The Petitioner contends that the facts of this
case are analogous to those in Aanestad v. Air jurisdiction.
Canada. 16 In that case, Mrs. Silverberg
purchased a round-trip ticket from Montreal to The Petitioner avers that the present case falls
Los Angeles and back to Montreal. The date and squarely under the above ruling because the
time of departure were specified but not of the date and time of his return flight to San
return flight. The plane crashed while on route Francisco were, as in the Aanestad case, also
from Montreal to Los Angeles, killing Mrs. left open. Consequently, Manila and not San
Silverberg. Her administratrix filed an action for Francisco should be considered the petitioner's
damages against Air Canada in the U.S. District destination.
Court of California. The defendant moved to
dismiss for lack of jurisdiction but the motion The private respondent for its part invokes the
was denied thus: ruling in Butz v. British Airways, 17 where the
United States District Court (Eastern District of
. . . It is evident that the contract Pennsylvania) said:
entered into between Air
. . . Although the authorities these decisions are from different jurisdictions.
which addressed this precise But that is neither here nor there. In fact, neither
issue are not extensive, both the of these cases is controlling on this Court. If we
cases and the commentators have preferred the Butz case, it is because,
are almost unanimous in exercising our own freedom of choice, we have
concluding that the "place of decided that it represents the better, and correct,
destination" referred to in the interpretation of Article 28(1).
Warsaw Convention "in a trip
consisting of several parts . . . is Article 1(2) also draws a distinction between a
the ultimate destination that is "destination" and an "agreed stopping place." It
accorded treaty jurisdiction." . . . is the "destination" and not an "agreed stopping
place" that controls for purposes of ascertaining
But apart from that jurisdiction under the Convention.
distinguishing feature, I cannot
agree with the Court's analysis The contract is a single undivided operation,
in Aanestad; whether the return beginning with the place of departure and
portion of the ticket is ending with the ultimate destination. The use of
characterized as an option or a the singular in this expression indicates the
contract, the carrier was legally understanding of the parties to the Convention
bound to transport the that every contract of carriage has one place of
passenger back to the place of departure and one place of destination. An
origin within the prescribed time intermediate place where the carriage may be
and. the passenger for her part broken is not regarded as a "place of
agreed to pay the fare and, in destination."
fact, did pay the fare. Thus there
was mutuality of obligation and C. The petitioner claims that the
a binding contract of carriage, lower court erred in not ruling
The fact that the passenger that under Art. 28(1) of the
could forego her rights under Warsaw Convention, this case
the contract does not make it was properly filed in the
any less a binding contract. Philippines because the
Certainly, if the parties did not defendant has its domicile in the
contemplate the return leg of the Philippines.
journey, the passenger would
not have paid for it and the
carrier would not have issued a The petitioner argues that the Warsaw
round trip ticket. Convention was originally written in French and
that in interpreting its provisions, American
courts have taken the broad view that the
We agree with the latter case. The place of
French legal meaning must govern. 18 In
destination, within the meaning of the Warsaw
French, he says, the "domicile" of the carrier
Convention, is determined by the terms of the means every place where it has a branch office.
contract of carriage or, specifically in this case,
the ticket between the passenger and the
carrier. Examination of the petitioner's ticket The private respondent notes, however, that
shows that his ultimate destination is San in Compagnie Nationale Air France vs.
Francisco. Although the date of the return flight Giliberto, 19 it was held:
was left open, the contract of carriage between
the parties indicates that NOA was bound to The plaintiffs' first contention is
transport the petitioner to San Francisco from that Air France is domiciled in
Manila. Manila should therefore be considered the United States. They say that
merely an agreed stopping place and not the the domicile of a corporation
destination. includes any country where the
airline carries on its business on
The petitioner submits that the Butz case could "a regular and substantial
not have overruled the Aanestad case because basis," and that the United
States qualifies under such
definition. The meaning of . . . In arriving at an
domicile cannot, however, be so interpretation of a treaty whose
extended. The domicile of a sole official language is French,
corporation is customarily are we bound to apply French
regarded as the place where it law? . . . We think this question
is incorporated, and the courts and the underlying choice of law
have given the meaning to the issue warrant some discussion
term as it is used in article 28(1) . . . We do not think this
of the Convention. (See Smith v. statement can be regarded as a
Canadian Pacific Airways, Ltd. conclusion that internal French
(2d Cir. 1971), 452 F2d 798, law is to be "applied" in the
802; Nudo v. Societe Anonyme choice of law sense, to
Belge d' Exploitation de la determine the meaning and
Navigation Aerienne Sabena scope of the Convention's
Belgian World Airlines (E.D. pa. terms. Of course, French legal
1962). 207 F. Supp, 191; usage must be considered in
Karfunkel v. Compagnie arriving at an accurate English
Nationale Air France (S.D.N.Y. translation of the French. But
1977), 427 F. Suppl. 971, 974). when an accurate English
Moreover, the structure of article translation is made and agreed
28(1), viewed as a whole, is upon, as here, the inquiry into
also incompatible with the meaning does not then revert to
plaintiffs' claim. The article, in a quest for a past or present
stating that places of business French law to be "applied" for
are among the bases of the revelation of the proper scope of
jurisdiction, sets out two places the terms. It does not follow
where an action for damages from the fact that the treaty is
may be brought; the country written in French that in
where the carrier's principal interpreting it, we are forever
place of business is located, chained to French law, either as
and the country in which it has a it existed when the treaty was
place of business through which written or in its present state of
the particular contract in development. There is no
question was made, that is, suggestion in the treaty that
where the ticket was bought, French law was intended to
Adopting the plaintiffs' theory govern the meaning of
would at a minimum blur these Warsaw's terms, nor have we
carefully drawn distinctions by found any indication to this
creating a third intermediate effect in its legislative history or
category. It would obviously from our study of its application
introduce uncertainty into and interpretation by other
litigation under the article courts. Indeed, analysis of the
because of the necessity of cases indicates that the courts,
having to determine, and in interpreting and applying the
without standards or criteria, Warsaw Convention, have, not
whether the amount of business considered themselves bound to
done by a carrier in a particular apply French law simply
country was "regular" and because the Convention is
"substantial." The plaintiff's written in French. . . .
request to adopt this basis of
jurisdiction is in effect a request We agree with these rulings.
to create a new jurisdictional
standard for the Convention.
Notably, the domicile of the carrier is only one of
the places where the complaint is allowed to be
Furthermore, it was argued in another filed under Article 28(1). By specifying the three
case 20 that:
other places, to wit, the principal place of multifarious bases on which a
business of the carrier, its place of business claim might be founded in
where the contract was made, and the place of different countries, whether
destination, the article clearly meant that these under code law or common law,
three other places were not comprehended in whether under contract or tort,
the term "domicile." etc.; and to include all bases on
which a claim seeking relief for
D. The petitioner claims that the an injury might be founded in
lower court erred in not ruling any one country. In other words,
that Art. 28(1) of the Warsaw if the injury occurs as described
Convention does not apply to in Article 17, any relief available
actions based on tort. is subject to the conditions and
limitations established by the
The petitioner alleges that the gravamen of the Warsaw System, regardless of
complaint is that private respondent acted the particular cause of action
which forms the basis on which
arbitrarily and in bad faith, discriminated against
a plaintiff could seek
the petitioner, and committed a willful
relief . . .
misconduct because it canceled his confirmed
reservation and gave his reserved seat to
someone who had no better right to it. In short. The private respondent correctly contends that
the private respondent committed a tort. the allegation of willful misconduct resulting in a
tort is insufficient to exclude the case from the
comprehension of the Warsaw Convention. The
Such allegation, he submits, removes the
petitioner has apparently misconstrued the
present case from the coverage of the Warsaw
Convention. He argues that in at least two import of Article 25(l) of the Convention, which
reads as follows:
American cases, 21 it was held that Article 28(1)
of the Warsaw Convention does not apply if the
action is based on tort. Art. 25 (1). The carrier shall not
be entitled to avail himself of the
This position is negated by Husserl v. Swiss Air provisions of this Convention
Transport Company, 22 where the article in which exclude or limit his
liability. if the damage is caused
question was interpreted thus:
by his willful misconduct or by
such default on his part as, in
. . . Assuming for the present accordance with the law of the
that plaintiff's claim is "covered" court to which the case is
by Article 17, Article 24 clearly submitted, is considered to be
excludes any relief not provided equivalent to willful misconduct.
for in the Convention as
modified by the Montreal
Agreement. It does not, It is understood under this article that the court
however, limit the kind of cause called upon to determine the applicability of the
limitation provision must first be vested with the
of action on which the relief may
appropriate jurisdiction. Article 28(1) is the
be founded; rather it provides
provision in the Convention which defines that
that any action based on the
jurisdiction. Article 22 23 merely fixes the
injuries specified in Article 17
"however founded," i.e., monetary ceiling for the liability of the carrier in
cases covered by the Convention. If the carrier
regardless of the type of action
is indeed guilty of willful misconduct, it can avail
on which relief is founded, can
itself of the limitations set forth in this article. But
only be brought subject to the
this can be done only if the action has first been
conditions and limitations
established by the Warsaw commenced properly under the rules on
System. Presumably, the jurisdiction set forth in Article 28(1).
reason for the use of the phrase
"however founded," in two-fold: III
to accommodate all of the
THE ISSUE OF PROTECTION not yet been ratified by the required minimum
TO MINORS number of contracting parties. Pending such
ratification, the petitioner will still have to file his
The petitioner calls our attention to Article 24 of complaint only in any of the four places
the Civil Code, which states: designated by Article 28(1) of the Warsaw
Convention.
Art. 24. In all contractual
property or other relations, when The proposed amendment bolsters the ruling of
one of the parties is at a this Court that a citizen does not necessarily
disadvantage on account of his have the right to sue in his own courts simply
moral dependence, ignorance, because the defendant airline has a place of
indigence, mental weakness, business in his country.
tender age or other handicap,
the courts must be vigilant for The Court can only sympathize with the
his protection. petitioner, who must prosecute his claims in the
United States rather than in his own country at
Application of this article to the present case is least inconvenience. But we are unable to grant
misplaced. The above provision assumes that him the relief he seeks because we are limited
the court is vested with jurisdiction to rule in by the provisions of the Warsaw Convention
favor of the disadvantaged minor, As already which continues to bind us. It may not be amiss
explained, such jurisdiction is absent in the case to observe at this point that the mere fact that he
at bar. will have to litigate in the American courts does
not necessarily mean he will litigate in vain. The
CONCLUSION judicial system of that country in known for its
sense of fairness and, generally, its strict
adherence to the rule of law.
A number of countries have signified their
concern over the problem of citizens being
denied access to their own courts because of WHEREFORE, the petition is DENIED, with
the restrictive provision of Article 28(1) of the costs against the petitioner. It is so ordered.
Warsaw Convention. Among these is the United
States, which has proposed an amendment that
would enable the passenger to sue in his own
domicile if the carrier does business in that
jurisdiction. The reason for this proposal is
explained thus:

In the event a US citizen


temporarily residing abroad
purchases a Rome to New York
to Rome ticket on a foreign air
carrier which is generally
subject to the jurisdiction of the
US, Article 28 would prevent
that person from suing the
carrier in the US in a "Warsaw
Case" even though such a suit
could be brought in the absence
of the Convention.

The proposal was incorporated in the


Guatemala Protocol amending the Warsaw
Convention, which was adopted at Guatemala
City on March 8,
1971. 24 But it is still ineffective because it has
defendants Local Manager, demanding immediate
attention (Exh. A).
FIRST DIVISION
On September 30, 1987, on the occasion of plaintiffs
following up of her luggage claim, she was furnished
copies of defendants telexes with an information that
[G.R. No. 104685. March 14, 1996] the Brussels Office of defendant found the luggage
and that they have broken the locks for identification
(Exhibit B). Plaintiff was assured by the defendant
that it has notified its Manila Office that the luggage
SABENA BELGIAN WORLD will be shipped to Manila on October 27, 1987. But
AIRLINES, petitioner, vs. HON. unfortunately plaintiff was informed that the luggage
COURT OF APPEALS and MA. was lost for the second time (Exhibits C and C-1).
PAULA SAN AGUSTIN, respondents.
At the time of the filling of the complaint, the
DECISION luggage with its content has not been found.

VITUG, J.: Plaintiff demanded from the defendant the money


value of the luggage and its contents amounting to
The appeal before the Court involves the $4,265.00 or its exchange value, but defendant
issue of an airlines liability for lost luggage. The refused to settle the claim.
petition for review assails the decision of the
Court Appeals,[1] dated 27 February 1992, Defendant asserts in its Answer and its evidence tend
affirming an award of damages made by the trial to show that while it admits that the plaintiff was a
court in a complaint filed by private respondent passenger on board Flight No. SN 284 with a piece of
against petitioner. checked in luggage bearing Tag No. 71423, the loss
The factual background of the case, of the luggage was due to plaintiffs sole if not
narrated by the trial court and reproduced at contributory negligence; that she did not declare the
length by the appellate court, is hereunder valuable items in her checked-in luggage at the flight
quoted: counter when she checked in for her flight from
Casablanca to Brussels so that either the
representative of the defendant at the counter would
On August 21, 1987, plaintiff was a passenger on
have advised her to secure an insurance on the
board Flight SN 284 of defendant airline originating
alleged valuable items and required her to pay
from Casablanca to Brussels, Belgium on her way
additional charges, or would have refused acceptance
back to Manila. Plaintiff checked in her luggage
of her baggage as required by the generally accepted
which contained her valuables, namely: jewelries
practices of international carriers; that Section 9(a),
valued at $2,350.00; clothes $1,500.00; shoes/bag
Article IX of General Conditions of carriage
$150; accessories $75; luggage itself $10.00; or a
requiring passengers to collect their checked baggage
total of $4,265.00, for which she was issued Tag No.
at the place of stopover, plaintiff neglected to claim
71423. She stayed overnight in Brussels and her
her baggage at the Brussels Airport; that plaintiff
luggage was left on board Flight SN 284.
should have retrieved her undeclared valuables from
her baggage at the Brussels Airport since her flight
Plaintiff arrived at Manila International Airport on from Brussels to Manila will still have to visit for
September 2, 1987 and immediately submitted her confirmation inasmuch as only her flight from
Tag No. 71423 to facilitate the release of her luggage Casablanca to Brussels was confirmed; that
hut the luggage was missing. She was advised to defendant incorporated in all Sabena Plane Tickets,
accomplish and submit a property Irregularity Report including Sabena Ticket No. 082422-72502241
which she submitted and filed on the same day. issued to plaintiff in Manila on August 21, 1987, a
warning that Items of value should be carried on your
She followed up her claim on September 14, 1987 person and that some carriers assume no liability for
but the luggage remained to be missing. fragile, valuable or perishable articles and that further
information may he obtained from the carrier for
On September 15, 1987, she filed her formal guidance; that granting without conceding that
complaint with the office of Ferge Massed, defendant is liable, its liability is limited only to US
$20.00 per kilo due to plaintiffs failure to declare a Passengers shall not include in his checked baggage,
higher value on the contents of her checked in and the carrier may refuse to carry as checked
luggage and pay additional charges thereon.[2] baggage, fragile or perishable articles, money,
jewelry, precious metals, negotiable papers, securities
The trial court rendered judgment ordering or other valuables.[4]
petitioner Sabena Belgian World Airlines to pay
private respondent Ma. Paula San Agustin Fault or negligence consists in the omission
of that diligence which is demanded by the
(a) x x x US$4,265.00 or its legal exchange in nature of an obligation and corresponds with the
Philippine pesos; circumstances of the person, of the time, and of
the place. When the source of an obligation is
(b) x x x P30,000.00 as moral damages; derived from a contract, the mere breach or non-
fulfillment of the prestation gives rise to the
presumption of fault on the part of the
(c) x x x P10,000.00 as exemplary damages; obligor. This rule is not different in the case of
common carriers in the carriage of goods which,
(d) x x x P10,000.00 attorneys fees; and indeed, are bound to observe not just the due
diligence of a good father of a family but that of
(e) (t)he costs of the suit.[3] extraordinary care in the vigilance over the
goods. The appellate court has aptly observed:
Sabena appealed the decision of the
Regional Trial Court to the Court of Appeals. x x x Art. 1733 of the [Civil] Code provides that from
The appellate court, in its decision of 27 the very nature of their business and by reasons of
February 1992, affirmed in toto the trial courts public policy, common carriers are bound to observe
judgment. extraordinary diligence in the vigilance over the
goods transported by them. This extraordinary
Petitioner airline company, in contending responsibility, according to Art. 1736, lasts from the
that the alleged negligence of private time the goods are unconditionally placed in the
respondent should be considered the primary possession of and received by the carrier until they
cause for the loss of her luggage, avers that, are delivered actually or constructively to the
despite her awareness that the flight ticket had consignee or person who has the right to receive
been confirmed only for Casablanca and them. Art. 1737 states that the common carriers duty
Brussels, and that her flight from Brussels to to observe extraordinary diligence in the vigilance
Manila had yet to be confirmed, she did not over the goods transported by them remains in full
retrieve the luggage upon arrival in force and effect even when they are temporarily
Brussels. Petitioner insists that private unloaded or stored in transit. And Art. 1735
respondent, being a seasoned international establishes the presumption that if the goods are lost,
traveler, must have likewise been familiar with destroyed or deteriorated, common carriers are
the standard provisions contained in her flight presumed to have been at fault or to have acted
ticket that items of value are required to be negligently, unless they prove that they had observed
hand-carried by the passenger and that the extraordinary diligence as required in Article 1733.
liability of the airline or loss, delay or damage to
baggage would be limited, in any event, to only
The only exceptions to the foregoing extraordinary
US$20.00 per kilo unless a higher value is
responsibility of the common carrier is when the loss,
declared in advance and corresponding
destruction, or deterioration of the goods is due to
additional charges are paid thereon. At the
any of the following causes:
Casablanca International Airport, private
respondent, in checking in her luggage,
evidently did not declare its contents or (1) Flood, storm, earthquake, lightning, or other
value. Petitioner cites Section 5(c), Article IX, of natural disaster or calamity;
the General Conditions of Carriage, signed at
Warsaw, Poland, on 02 October 1929, as (2) Act of the public enemy in war, whether
amended by the Hague Protocol international or civil;
of 1955, generally observed by International
carriers, stating, among other things, that: (3) Act or omission of the shipper or owner of the
goods;
(4) The character of the goods or defects in the had been lost for the second time. Thus, the
packing or in the containers; appellate court, given all the facts before it,
sustained the trial court in finding petitioner
(5) Order or act of competent public authority. ultimately guilty of gross negligence in the
handling of private respondents luggage. The
Not one of the above excepted causes obtains in this loss of said baggage not only once by twice,
case.[5] said the appellate court, underscores the wanton
negligence and lack of care on the part of the
carrier.
The above rules remain basically
unchanged even when the contract is breached
The above findings, which certainly cannot be said to
by tort[6] although noncontradictory principles on
be without basis, foreclose whatever rights petitioner
quasi-delict may then be assimilated as also
might have had to the possible limitation of liabilities
forming part of the governing law. Petitioner is
enjoyed by international air carriers under the
not thus entirely off track when it has likewise
Warsaw Convention (Convention for the Unification
raised in its defense the tort doctrine of
of Certain Rules Relating to International Carriage by
proximate cause. Unfortunately for petitioner,
Air, as amended by the Hague Protocol of 1955, the
however, the doctrine cannot, in this particular
Montreal Agreement of 1966, the Guatemala
instance, support its case. Proximate cause is
Protocol of 1971 and the Montreal Protocols of
that which, in natural and continuous sequence,
1975). In Alitalia vs. Intermediate Appellate
unbroken by any efficient intervening cause,
Court,[8] now Chief Justice Andres R. Narvasa,
produces injury and without which the result
speaking for the Court, has explained it well; he said:
would not have occurred. The exemplification by
the Court in one case[7] is simple and explicit;
viz: The Warsaw Convention however denies to the
carrier availment of the provisions which exclude or
limit his liability, if the damage is caused by his
(T)he proximate legal cause is that acting first and
wilful misconduct or by such default on his part as, in
producing the injury, either immediately or by setting
accordance with the law of the court seized of the
other events in motion, all constituting a natural and
Continuous chain of events, each having a close case, is considered to be equivalent to wilful
causal Connection with its immediate predecessor, misconduct, or if the damage is (similarly) caused x x
x by any agent of the carrier acting within the scope
the final event in the chain immediately affecting the
of his employment. The Hague Protocol amended the
injury as a natural and probable result of the cause
Warsaw Convention by removing the provision that
which first acted, under such circumstances that the
if the airline took all necessary steps to avoid the
person responsible for the first event should, as an
ordinarily prudent, and intelligent person, have damage, it could exculpate itself completely, and
reasonable ground to expect at the moment of his act declaring the stated limits of liability not applicable if
it is proved that the damage resulted from an act or
or default that an injury to some person might
omission of the carrier, its servants or agents, done
probably result therefrom.
with intent to cause damage or recklessly and with
knowledge that damage would probably result. The
It remained undisputed that private same deletion was effected by the Montreal
respondents luggage was lost while it was in the Agreement of 1966, with the result that a passenger
custody of petitioner. It was supposed to arrive could recover unlimited damages upon proof of
on the same flight that private respondent took wilful misconduct.
in returning to Manila on 02 September
1987. When she discovered that the luggage
The Convention does not thus operate as an exclusive
was missing, she promptly accomplished and
enumeration of the instances of an airlines liability,
filed a Property Irregularity Report. She followed
or as an absolute limit of the extent of that
up her claim on 14 September 1987, and filed,
liability. Such a proposition is not borne out by the
on the following day, a formal letter-complaint
language of the Convention, as this Court has now,
with petitioner. She felt relieved when, on 23
and at an earlier time, pointed out. Moreover, slight
October 1987, she was advised that her luggage
reflection readily leads to the conclusion that it
had finally been found, with its contents intact
should be deemed a limit of liability only in those
when examined, and that she could expect it to
cases where the cause of the death or injury to
arrive on 27 October 1987. She then waited
person, or destruction, loss or damage to property or
anxiously only to be told later that her luggage
delay in its transport is not attributable to or attended G.R. No. 120334 January 20, 1998
by any wilful misconduct, bad faith, recklessness or
otherwise improper conduct on the part of any NORTHWEST AIRLINES, INC. petitioner,
official or employee for which the carrier is vs.
responsible, and there is otherwise no special or COURT OF APPEALS and ROLANDO I.
extraordinary form of resulting injury. The TORRES, respondents.
Contentions provisions, in short, do not regulate or
exclude liability for other breaches of contract by the
G.R. No. 120337 January 20, 1998
carrier or misconduct of its officers and employees,
or for some particular or exceptional type of
damage. Otherwise, an air carrier would be exempt ROLANDO I. TORRES, petitioner,
from any liability for damages in the event of its vs.
absolute refusal, in bad faith, to comply with a COURT OF APPEALS and NORTHWEST
contract of carriage, which is absurd. Nor may it for a AIRLINES, INC., respondents.
moment be supposed that if a member of the aircraft
complement should inflict some physical injury on a
passenger, or maliciously destroy or damage the
latters property, the Convention might successfully DAVIDE, JR., J.:
be pleaded as the sole gauge to determine the carriers
liability to the passenger.Neither may the Convention Unable to accept the decision of the Court of
be invoked to justify the disregard of some Appeals in CA-G.R. CV No. 24068, 1 petitioner
extraordinary sort of damage resulting to a passenger Northwest Airlines, Inc., (hereafter
and preclude recovery therefor beyond the limits set NORTHWEST) and petitioner Rolando I. Torres
by said Convention. It is in this sense that the (hereafter TORRES) filed separate petitions for
Convention has been applied, or ignored, depending review under Rule 45 of the Rules of Court,
on the peculiar facts presented by each case. which were docketed as G.R. No. 120334 and
G.R. No. 120337 and thereafter consolidated.
The Court thus sees no error in the
preponderant application to the instant case by The antecedents of these cases were
the appellate court, as well as by the trial court, summarized by the Court of Appeals as follows:2
of the usual rules on the extent of recoverable
damages beyond the Warsaw limitations. Under
The plaintiff, [Torres], allegedly
domestic law and jurisprudence (the Philippines
on a special mission to
being the country of destination), the attendance
purchase firearms for the
of gross negligence (given the equivalent of
Philippine Senate, purchased a
fraud or bad faith) holds the common carrier
round trip ticket from defendant
liable for all damages which can be reasonably
[Northwest] for his travel to
attributed, although unforeseen, to the non-
Chicago and back to Manila. Via
performance of the obligation,[9] including moral
defendant's flight, plaintiff left for
and exemplary damages.[10]
United States.
WHEREFORE, the decision appealed from
is AFFIRMED. Costs against petitioner. After purchasing firearms and
on the way back to Manila,
SO ORDERED.
plaintiff checked-in and
presented before defendant's
representative his two identical
baggage, one of which
contained firearms. Defendant's
representative required the
baggage to be opened and the
supporting evidence to be
presented. Plaintiff showed
them his authorization from the
Philippine government and the
purchase receipts. Plaintiff
thereafter sealed the baggage firearms (pp. 3-5, Answer; pp.
and defendant's representative 32-34, Record).
placed a red tag on the
baggage with firearms with the After plaintiff had presented its
marking "CONTAINS evidence, defendant filed a
FIREARMS". "Motion to Dismiss (By Way of
Demurrer to the Evidence with
Upon arrival in Manila on June Motion for Summary Judgment)"
22, 1988 plaintiff was not able to dated April 24, 1989.
claim one of his baggages.
Plaintiff was informed by In said motion, defendant
defendant's representative that moved for the "dismissal of the
his baggage containing firearms complaint in so far as it prays for
was recalled back to Chicago by moral, exemplary and temperate
defendant for US Customs damages and attorney's fees"
verification. A telex to this effect and further moved for "summary
was shown to plaintiff. judgment to be rendered
awarding the plaintiff $640.00 as
On June 28, 1988, after being actual damages." (Motion to
advised of the arrival of his Dismiss By Way of Demurrer to
other baggage, plaintiff claimed Evidence with Motion for
and opened the baggage in the Summary Judgment; p. 115,
presence of defendant's Records).
representative and found out
that the firearms were missing. Plaintiff on the other hand,
A Personal Property Missing offered no objection to the
Damage Report was issued by submission of the case for
defendant to plaintiff. decision but insisted that he is
entitled to damages as prayed
On account of continuous for (p. 1, Comment on
refusal of defendant to settle Defendant's Motion to Dismiss
amicably, plaintiff then prayed by Way of Demurrer to
before the trial court that Evidence with Summary
defendant be ordered to pay Judgment; pp. 136-169,
actual damages, moral Records).
damages, temperate damages,
exemplary damages and We add to this summary the following relevant
attorney's fees (pp. 1-6, matters:
Complaint; p. 1, Record).
NORTHWEST argued in its motion for summary
In its answer, defendant judgment that the Warsaw Convention and the
pleaded: a) that it was the contract of carriage limited its liability to US$640
agents from the US Customs and that the evidence presented by TORRES
who ordered for the return of the did not entitle him to moral, exemplary, and
weapons which plaintiff temperate damages and attorney's fees.3
checked-in; b) that when
opened in the presence of US
Instead of just ruling on NORTHWEST's Motion
Customs agents the box
to Dismiss (By Way of Demurrer to Evidence)
contained no firearms; and c)
with Motion for Summary Judgment, which it
that since the baggage which considered submitted for resolution in the order
was returned back to Chicago of 14 June 1989, 4 the trial court rendered on 13
did not contain any firearms, September 1989 a full-blown decision 5 ordering
then the baggage which plaintiff
NORTHWEST to pay TORRES the following
received upon arrival in Manila
amounts:
must have contained the
1. The amount of $9,009.32, prevented it from presenting evidence, thereby
with legal interest thereon from denying it due process; and that even assuming
the date of the filing of the that the trial court could resolve the entire case
complaint, in its peso equivalent on the merits, it erred in awarding damages,
at the official rate of exchange attorney's fees, and expenses of litigation.7
at the time payment is made,
representing the value of the In its Decision 8 of 14 September 1994, the
goods lost by the plaintiff; Court of Appeals sustained the trial court's
judgment that TORRES was entitled to actual
2. The amount of P100,000.00 damages, since NORTHWEST had, in effect,
by way of attorney's fees; admitted the loss of the firearms when it insisted
that its liability was limited to $9.07 per pound or
3. The amount of P5,181.09 as $20 per kilo. The appellate court then concluded
filing fees paid by the plaintiff that NORTHWEST's guessing of which luggage
and the amount of P20,000.00 contained the firearms amounted to willful
for expenses of litigation, misconduct under Section 25(1) of the Warsaw
representing travel expenses Convention which entitled TORRES to claim
and hotel accommodations of actual damages in excess of the limitation
plaintiff's counsels; and provided for under Section 22(2) of said
Convention.
4. The amount of P50,000.00 as
moral damages. Nevertheless, the Court of Appeals held that
while the trial court properly ruled on the right of
The award of US$9,009.32, representing the TORRES to actual damages, it erred in
determining by way of summary judgment the
value of the lost firearms, was grounded on the
amount of damages; for under Section 3 of Rule
trial court's finding that "the act of
34 of the Rules of Court, a summary judgment
[NORTHWEST's] personnel in Tokyo or Narita
Airport in just guessing which baggage may be rendered upon proper motion except as
contained the firearms was careless and to the amount of damages.
imprudent, amounting to careless disregard for
the safety of the luggage of the passenger." As to the trial court's act of disposing of the
According to the trial court, such act constituted entire case by way of summary judgment, the
willful misconduct which brought the case Court of Appeals noted that NORTHWEST
beyond the application of Section 22(2) of the categorically moved for summary judgment only
Warsaw Convention, thereby depriving on the issue of actual damages, but not on the
NORTHWEST of the limitation of the liability claims for moral damages and attorney's fees.
provided for in said section. NORTHWEST moved for the dismissal of the
latter claims by way of demurrer to evidence.
That being so, the trial court could not, by way of
The awards of attorney's fees and expenses of
litigation were premised on NORTHWEST's summary judgment, dispose of the case on its
having ignored the demands of TORRES forcing entirety. Section 2 of Rule 34 of the Rules of
Court required that summary judgment should
the latter to litigate in order to assert his right.
be issued only after the motion therefor has
TORRES was also awarded moral damages
been heard. Since there was no such motion as
because of the "inconvenience, anxiety and
to the claims for moral damages and attorney's
worry" he suffered by reason of NORTHWEST's
unjustifiable refusal to settle his claim. fees, no summary judgment thereon could be
made.
Both TORRES and NORTHWEST appealed
Anent the demurrer to evidence, the Court of
from the decision to the Court of Appeals, which
docketed the case as CA-G.R. CV No. 24068. Appeals held that the trial court had to either
TORRES assailed the failure of the trial court to grant or deny it. If granted, no award therefor
could have been validly made. If denied, then
award the actual, moral, and exemplary
damages prayed for by him. 6 NORTHWEST, on under Section 1 of Rule 35 of the Rules of Court,
NORTHWEST should have been allowed to
the other hand, alleged that in prematurely
resolving the case on the merits the court
present its evidence, as it was not deemed to willful misconduct committed by Northwest for
have waived that right. This section provided: mishandling the cargo.

Sec. 1. Effect of judgment on NORTHWEST's Motion to Dismiss (By Way of


demurrer to evidence. After Demurrer to Evidence) with Motion for Summary
the plaintiff has completed the Judgment involved two distinct and separate
presentation of his evidence, the processes, viz: (1) demurrer to evidence, which
defendant without waiving his was then governed by Rule 35, now by Rule 33;
right to offer evidence in the and (2) motion for summary judgment, which
event the motion is not granted, was then governed by Rule 34, now Rule 35, of
may move for a dismissal on the the Rules of Court. The subject of the demurrer
ground that upon facts and the were the claims for moral, exemplary, and
law the plaintiff has shown no temperate damages and attorney's fees; while
right to relief. However, if the the target of the motion for summary judgment
motion is granted and order of was the claim for actual damages.
dismissal is reversed on appeal,
the movant loses his right to We agree with the Court of Appeals in its
present evidence in his behalf.9 holding that the trial court erred in deciding the
entire case on its merits. Indeed, as to the
The Court of Appeals then held that since the demurrer to evidence, the trial court should have
demurrer was impliedly denied by the trial court, been solely guided by the procedure laid down
NORTHWEST should have been allowed to in the abovementioned rule on demurrer to
present its evidence in accordance with the evidence. It had no choice other than to grant or
above rule. to deny the demurrer. It could not, without
committing grave abuse of discretion amounting
Accordingly, the Court of Appeals affirmed the to excess of jurisdiction, deny the motion and
trial court's finding as to the right of TORRES to then forthwith grant TORRES' claims on a
actual damages but set aside the rest of the finding that TORRES has established a
appealed decision. It then remanded the case to preponderance of evidence in support of such
the court a quo for further proceedings. claims. In the instant case, the trial court did just
that insofar as moral damages, attorney's fees,
and expenses of litigation were concerned. What
On 23 May 1995, the Court of Appeals
denied 10 NORTHWEST's motion for a partial it should have done was to merely deny the
demurrer and set a date for the reception of
reconsideration of the decision.
NORTHWEST's evidence in chief.
Hence, the present petitions.
As to the motion for summary judgment, both
the trial court and the Court of Appeals were in
NORTHWEST contests the right of TORRES to error. Summary judgments were formerly
actual damages on the following grounds: (1) governed by Rule 34 of the Rules of Court. The
the loss of firearms was disputed; (2) the finding rule is now Rule 35 of the 1987 Rules of Civil
of willful misconduct was arbitrary; and (3) Procedure with the amendments allowing the
TORRES failed to produce a United States parties to submit not only affidavits but also
license for the shipment of the firearms; hence, depositions or admissions in support of their
the importation was illegal and no damages respective contentions. 11 Motions for summary
could arise therefrom. judgment may be filed by the claimant or by the
defending party. Sections 1, 2, and 3 of the old
TORRES, on the other hand, claims that the Rule 34, the governing law in this case, provided
Court of Appeals erred (1) in setting aside the as follows:
appealed decision of the court a quo as to the
awards of damages, attorney's fees, and cost of Sec. 1. Summary judgment for
suit; (2) in remanding the case to the court a claimant. A party seeking to
quo for further proceedings; and (3) in failing to recover upon a claim,
award other damages for breach of contract and counterclaim, or cross-claim or
to obtain a declaratory relief
may, at any time after the TORRES when he arrived in Manila. It likewise
pleading in answer thereto has contended that, even granting that the firearms
been served, move with were lost, its liability was limited by the Warsaw
supporting affidavits for a Convention and the contract of transportation to
summary judgment in his favor $9.07 per pound, or a total of $640 as the box
upon all or any part thereof. weighed 70 pounds. 12 It also denied having
acted fraudulently or in bad faith. 13
Sec. 2. Summary judgment for
defending party. A party In thus submitting for summary judgment the
against whom a claim, matter of its liability only to the maximum
counterclaim, or cross-claim is allowed in Section 22(2) of the Warsaw
asserted or a declaratory relief Convention, NORTHWEST was deemed to have
is sought may, at any time, hypothetically admitted arguendo that the
move with supporting affidavits firearms were lost. It did not waive the
for a summary judgment in his presentation of evidence that it was not in fact
favor as to all or any part liable for the alleged loss of firearms. And even if
thereof. it was not liable beyond the maximum provided
in said Section 22(2). Notably, TORRES prayed
Sec. 3. Motion and proceedings for actual damages in the amounts of (1)
thereon. The motion shall be $9,009.32 representing the value of the lost
served at least ten (10) days firearms; and (2) P39,065 14representing the
before the time specified for the cost of his place tickets.
hearing. The adverse party prior
to the day of hearing may serve Concretely the, there remained a genuine issue
opposing affidavits. After the on the fact and amount of actual damages. The
hearing, the judgment sought motion for summary judgment was not therefore
shall be rendered forthwith if the in order. NORTHWEST must have resorted to it,
pleadings, depositions, and in like manner as it did in filing the demurrer, to
admissions on file together with delay the progress of the trial of the case. Verily,
the affidavits, show that, except it was grave abuse of discretion on the part of
as to the amount of damages, the trial court to grant such motion and award
there is no genuine issue as to TORRES actual damages commensurate to the
any material fact and that the value of the firearms and based on his evidence
moving party is entitled to a alone.
judgment as a matter of law.
We, however, agree with both the trial court and
NORTHWEST, the defending party, moved for the Court of Appeals that NORTHWEST's
summary judgment on the claim for actual liability for actual damages may not be limited to
damages after TORRES had presented his that prescribed in Section 22(2) of the Warsaw
evidence in chief. This was allowed by Section 2 Convention. In Alitalia v. Intermediate Appellate
where the motion may be filed "at any time," as Court, 15 we held:
distinguished from section 1 where the claimant,
like TORRES, may file the motion at any time The [Warsaw] Convention does
after the answer is filed. not operate as an exclusive
enumeration of the instances of
Summary judgment is allowed if, except as to an airline's liability, or as an
the amount of damages, there is no genuine absolute limit of the extent of
issue as to any material fact and the moving that liability. Such a proposition
party is entitled to a judgment as a matter of law. is not borne out by the language
of the Convention, as this Court
In this case, NORTHWEST denied in its Answer has now, and at an earlier time,
the material allegations in the complaint and pointed out. Moreover, slight
asserted, in fact, that it was not liable for actual reflection readily leads to the
damages because the box containing the conclusion that it should be
alleged lost firearms was the one received by deemed a limit of liability only in
those cases where the cause of THIRD DIVISION
the death or injury to person, or
destruction, loss or damage to
property or delay in its transport
is not attributable to or attended [G.R. No. 118664. August 7, 1998]
by any willful misconduct, bad
faith, recklessness, or otherwise
improper conduct on the part of
any official or employee for JAPAN AIRLINES, petitioner, vs. THE COURT
which the carrier is responsible, OF APPEALS ENRIQUE AGANA,
and there is otherwise no MARIA ANGELA NINA AGANA,
special or extraordinary form of ADALIA B. FRANCISCO and JOSE
resulting injury. The MIRANDA, respondents.
Convention's provisions, in
short, do not "regulate or
DECISION
exclude liability for other
breaches of contract by the ROMERO, J.:
carrier" or misconduct of its
officers and employees, or for Before us is an appeal by certiorari filed by
some particular or exceptional petitioner Japan Airlines, Inc. (JAL) seeking the
type of damage. reversal of the decision of the Court of
Appeals,[1]which affirmed with modification the
IN VIEW WHEREOF, judgment is hereby award of damages made by the trial court in
rendered (1) PARTLY GRANTING the petition in favor of herein private respondents Enrique
G.R. No. 120334 by setting aside that portion of Agana, Maria Angela Nina Agana, Adelia
the challenge decision of the Court of Appeals in Francisco and Jose Miranda.
CA-G.R. CV No. 24068 affirming the summary
judgment as to the right of respondent On June 13, 1991, private respondent Jose
ROLANDO I. TORRES to actual damages; (2) Miranda boarded JAL flight No. JL 001 in San
DENYING for want of merit the petition in G.R. Francisco, California bound for Manila. Likewise,
No. 120337; and (3) REMANDING this case to on the same day private respondents Enrique
the trial court for the reception of the evidence Agana, Maria Angela Nina Agana and Adelia
for Northwest Airlines, Inc. in Civil Case No. 88- Francisco left Los Angeles, California for Manila
46117 and, thereafter, for the rendition of the via JAL flight No. JL 061. As an incentive for
judgment therein on the merits. travelling on the said airline, both flights were to
make an overnight stopover at Narita, Japan, at
No pronouncement as to costs. the airlines expense, thereafter proceeding to
Manila the following day.
SO ORDERED. Upon arrival at Narita, Japan on June 14,
1991, private respondents were billeted at Hotel
Nikko Narita for the night. The next day, private
respondents, on the final leg of their journey,
went to the airport to take their flight to
Manila. However, due to the Mt. Pinatubo
eruption, unrelenting ashfall blanketed Ninoy
Aquino International Airport (NAIA), rendering it
inaccessible to airline traffic. Hence, private
respondents trip to Manila was cancelled
indefinitely.
To accommodate the needs of its stranded
passengers, JAL rebooked all the Manila-bound
passengers on flight No. 741 due to depart on
June 16, 1991 and also paid for the hotel
expenses for their unexpected overnight
stay. On June 16, 1991, much to the dismay of
the private respondents, their long anticipated Thus, the award of moral damages should be as
flight to Manila was again cancelled due to it is hereby reduced to P200,000.00 for each of
NAIAs indefinite closure. At this point, JAL the plaintiffs, the exemplary damages
informed the private respondents that it would to P300,000.00 and the attorneys fees
no longer defray their hotel and accommodation to P100,000.00 plus the costs.
expense during their stay in Narita.
Since NAIA was only reopened to airline WHEREFORE, with the foregoing Modification,
traffic on June 22, 1991, private respondents the judgment appealed from is hereby
were forced to pay for their accommodations AFFIRMED in all other respects.
and meal expenses from their personal funds
from June 16 to June 21, 1991. Their JAL filed a motion for reconsideration which
unexpected stay in Narita ended on June 22, proved futile and unavailing.[4]
1991 when they arrived in Manila on board JL
Failing in its bid to reconsider the decision,
flight No. 741. JAL has now filed this instant petition.
Obviously, still reeling from the The issue to be resolved is whether JAL, as
experience, private respondents, on July 25,
a common carrier has the obligation to shoulder
1991, commenced an action for damages
the hotel and meal expenses of its stranded
against JAL before the Regional Trial Court of
passengers until they have reached their final
Quezon City, Branch 104.[2] To support their
destination, even if the delay were caused by
claim, private respondents asserted that JAL force majeure.
failed to live up to its duty to provide care and
comfort to its stranded passengers when it To begin with, there is no dispute that the
refused to pay for their hotel and Mt. Pinatubo eruption prevented JAL from
accommodation expenses from June 16 to 21, proceeding to Manila on schedule. Likewise,
1991 at Narita, Japan. In other words, they private respondents concede that such event
insisted that JAL was obligated to shoulder their can be considered as force majeure since their
expenses as long as they were still stranded in delayed arrival in Manila was not imputable to
Narita. On the other hand, JAL denied this JAL.[5]
allegation and averred that airline passengers
have no vested right to these amenities in case However, private respondents contend that
a flight is cancelled due to force majeure. while JAL cannot be held responsible for the
delayed arrival in Manila, it was nevertheless
On June 18, 1992, the trial court rendered liable for their living expenses during their
its judgment in favor of private respondents unexpected stay in Narita since airlines have the
holding JAL liable for damages, viz.: obligation to ensure the comfort and
convenience of its passengers.While we
WHEREFORE, judgment is rendered in favor of sympathize with the private respondents plight,
plaintiffs ordering the defendant Japan Airlines we are unable to accept this contention.
to pay the plaintiffs Enrique Agana, Adalia B.
We are not unmindful of the fact that in a
Francisco and Maria Angela Nina Agana the
plethora of cases we have consistently ruled that
sum of One million Two Hundred forty-six
a contract to transport passengers is quite
Thousand Nine Hundred Thirty-Six Pesos
different in kind and degree from any other
(P1,246,936.00) and Jose Miranda the sum of
contractual relation. It is safe to conclude that it
Three Hundred Twenty Thousand Six Hundred
is a relationship imbued with public
sixteen and 31/100 (P320,616.31) as actual,
interest. Failure on the part of the common
moral and exemplary damages and pay
carrier to live up to the exacting standards
attorneys fees in the amount of Two Hundred
of care and diligence renders it liable for any
Thousand Pesos (P200,000.00), and to pay the
damages that may be sustained by its
costs of suit.
passengers.However, this is not to say that
common carriers are absolutely responsible for
Undaunted, JAL appealed the decision all injuries or damages even if the same were
before the Court of Appeals, which, however, caused by a fortuitous event. To rule otherwise
with the exception of lowering the damages would render the defense of force majeure, as
awarded affirmed the trial courts finding,[3] thus:
an exception from any liability, illusory and destination and has left the carriers
ineffective. premises. Hence, PAL necessarily would still
have to exercise extraordinary diligence in
Accordingly, there is no question that when safeguarding the comfort, convenience and
a party is unable to fulfill his obligation because safety of its stranded passengers until they have
of force majeure, the general rule is that he reached their final destination. On this score,
cannot be held liable for damages for non- PAL grossly failed considering the then ongoing
performance.[6] Corollarily, when JAL was battle between government forces and Muslim
prevented from resuming its flight to Manila due rebels in Cotabato City and the fact that the
to the effects of Mt. Pinatubo eruption, whatever private respondent was a stranger to the place.
losses or damages in the form of hotel and meal
expenses the stranded passengers incurred,
cannot be charged to JAL.Yet it is undeniable The reliance is misplaced. The factual
that JAL assumed the hotel expenses of background of the PAL case is different from the
respondents for their unexpected overnight stay instant petition. In that case there was indeed a
on June 15, 1991. fortuitous event resulting in the diversion of the
PAL flight. However, the unforeseen diversion
Admittedly, to be stranded for almost a was worsened when private respondents
week in a foreign land was an exasperating (passenger) was left at the airport and could not
experience for the private respondents. To be even hitch a ride in a Ford Fiera loaded with
sure, they underwent distress and anxiety during PAL personnel,[10] not to mention the apparent
their unanticipated stay in Narita, but their apathy of the PAL station manager as to the
predicament was not due to the fault or predicament of the stranded passengers.[11] In
negligence of JAL but the closure of NAIA to light of these circumstances, we held that if the
international flights. Indeed, to hold JAL, in the fortuitous event was accompanied by neglect
absence of bad faith or negligence, liable for the and malfeasance by the carriers employees, an
amenities of its stranded passengers by reason action for damages against the carrier is
of a fortuitous event is too much of a burden to permissible. Unfortunately, for private
assume. respondents, none of these conditions are
present in the instant petition.
Furthermore, it has been held that airline
passengers must take such risks incident to the We are not prepared, however, to
mode of travel.[7] In this regard, adverse weather completely absolve petitioner JAL from any
conditions or extreme climatic changes are liability. It must be noted that private
some of the perils involved in air travel, the respondents bought tickets from the United
consequences of which the passenger must States with Manila as their final destination.
assume or expect.After all, common carriers are While JAL was no longer required to defray
not the insurer of all risks.[8] private respondents living expenses during their
stay in Narita on account of the fortuitous event,
Paradoxically, the Court of Appeals, despite JAL had the duty to make the
the presence of force majeure, still ruled against necessary arrangements to transport private
JAL relying in our decision in PAL v. Court of respondents on the first available connecting
Appeals,[9] thus: flight to Manila. Petitioner JAL reneged on its
obligation to look after the comfort and
The position taken by PAL in this case clearly convenience of its passengers when it
illustrates its failure to grasp the exacting declassified private respondents from transit
standard required by law. Undisputably, PALs passengers to new passengers as a result of
diversion of its flight due to inclement weather which private respondents were obliged to make
was a fortuitous event. Nonetheless, such the necessary arrangements themselves for the
occurrence did not terminate PALs contract with next flight to Manila. Private respondents were
its passengers. Being in the business of air placed on the waiting list from June 20 to June
carriage and the sole one to operate in the 24. To assure themselves of a seat on an
country, PAL is deemed equipped to deal with available flight, they were compelled to stay in
situations as in the case at bar. What we said in the airport the whole day of June 22, 1991 and it
one case once again must be stressed, i.e., the was only at 8:00 p.m. of the aforesaid date that
relation of carrier and passenger continues until they were advised that they could be
the latter has been landed at the port of
accommodated in said flight which flew at about G.R. No. 127768 November 19, 1999
9:00 a.m. the next day.
We are not oblivious to the fact that the UNITED AIRLINES, petitioner,
cancellation of JAL flights to Manila from June vs.
15 to June 21, 1991 caused considerable WILLIE J. UY, respondent.
disruption in passenger booking and
reservation. In fact, it would be unreasonable to
expect, considering NAIAs closure, that JAL
flight operations would be normal on the days BELLOSILLO, J.:
affected. Nevertheless, this does not excuse
JAL from its obligation to make the necessary UNITED AIRLINES assails in this petition for
arrangements to transport private respondents review on certiorari under Rule 45 the 29 August
on its first available flight to Manila. After all, it 1995 Decision of the Court of Appeals in CA-
had a contract to transport private respondents G.R. CV No. 39761 which reversed the 7 August
from the United States to Manila as their final 1992 order issued by the trial court in Civil Case
destination. No. Q-92-12410 1 granting petitioner's motion to
Consequently, the award of nominal dismiss based on prescription of cause of action.
damages is in order. Nominal damages are The issues sought to be resolved are whether
adjudicated in order that a right of a plaintiff, the notice of appeal to the appellate court was
which has been violated or invaded by the timely filed, and whether Art. 29 of the Warsaw
defendant, may be vindicated or recognized and Convention 2 should apply to the case at bar.
not for the purpose of indemnifying any loss
suffered by him.[12] The court may award On 13 October 1989 respondent Willie J. Uy, a
nominal damages in every obligation arising revenue passenger on United Airlines Flight No.
from any source enumerated in Article 1157, or 819 for the San Francisco Manila route,
in every case where any property right has been checked in together with his luggage one piece
invaded.[13] of which was found to be overweight at the
airline counter. To his utter humiliation, an
WHEREFORE, in view of the foregoing, the employee of petitioner rebuked him saying that
decision of the Court of Appeals dated he should have known the maximum weight
December 22, 1993 is hereby MODIFIED. The allowance to be 70 kgs. per bag and that he
award of actual, moral and exemplary damages should have packed his things accordingly.
is hereby DELETED. Petitioner JAL is ordered to Then, in a loud voice in front of the milling
pay each of the private respondents crowd, she told respondent to repack his things
nominal damages in the sum of P100,000.00 and transfer some of them from the overweight
each including attorneys fees of P50,000.00 plus luggage to the lighter ones. Not wishing to
costs. create further scene, respondent acceded only
SO ORDERED. to find his luggage still overweight. The airline
then billed him overweight charges which he
offered to pay with a miscellaneous charge order
(MCO) or an airline pre-paid credit. However,
the airline's employee, and later its airport
supervisor, adamantly refused to honor the
MCO pointing out that there were conflicting
figures listed on it. Despite the explanation from
respondent that the last figure written on the
MCO represented his balance, petitioner's
employees did not accommodate him. Faced
with the prospect of leaving without his luggage,
respondent paid the overweight charges with his
American Express credit card.

Respondent's troubles did not end there. Upon


arrival in Manila, he discovered that one of his
bags had been slashed and its contents stolen.
He particularized his losses to be around US determined by the law of the
$5,310.00. In a letter dated 16 October 1989 court to which the case is
respondent bewailed the insult, embarrassment submitted.
and humiliating treatment he suffered in the
hands of United Airlines employees, notified Respondent countered that par. (1) of Art. 29 of
petitioner of his loss and requested the Warsaw Convention must be reconciled with
reimbursement thereof. Petitioner United par. (2) thereof which states that "the method of
Airlines, through Central Baggage Specialist calculating the period of limitation shall be
Joan Kroll, did not refute any of respondent's determined by the law of the court to which the
allegations and mailed a check representing the case is submitted." Interpreting thus, respondent
payment of his loss based on the maximum noted that according to Philippine laws the
liability of US $9.70 per pound. Respondent, prescription of actions is interrupted "when they
thinking the amount to be grossly inadequate to are filed before the court, when there is a written
compensate him for his losses, as well as for the extrajudicial demand by the creditors, and when
indignities he was subjected to, sent two (2) there is any written acknowledgment of the debt
more letters to petitioner airline, one dated 4 by the debtor." 4 Since he made several
January 1990 through a certain Atty. Pesigan, demands upon United Airlines: first, through his
and another dated 28 October 1991 through personal letter dated 16 October 1989; second,
Atty. Ramon U. Ampil demanding an out-of-court through a letter dated 4 January 1990 from Atty.
settlement of P1,000,000.00. Petitioner United Pesigan; and, finally, through a letter dated 28
Airlines did not accede to his demands. October 1991 written for him by Atty. Ampil, the
two (2)-year period of limitation had not yet been
Consequently, on 9 June 1992 respondent filed exhausted.
a complaint for damages against United Airlines
alleging that he was a person of good station, On 2 August 1992 the trial court ordered the
sitting in the board of directors of several top dismissal of the action holding that the language
500 corporations and holding senior executive of Art. 29 is clear that the action must be brought
positions for such similar firms; 3 that petitioner within two (2) years from the date of arrival at
airline accorded him ill and shabby treatment to the destination. It held that although the second
his extreme embarrassment and humiliation; paragraph of Art. 29 speaks of deference to the
and, as such he should be paid moral damages law of the local court in "calculating the period of
of at least P1,000,000.00, exemplary damages limitation," the same does not refer to the local
of at least P500,000.00, plus attorney's fees of forum's rules in interrupting the prescriptive
at least P50,000.00. Similarly, he alleged that period but only to the rules of determining the
the damage to his luggage and its stolen time in which the action may be deemed
contents amounted to around $5,310.00, and commenced, and within our jurisdiction the
requested reimbursement therefor. action shall be deemed "brought" or commenced
by the filing of a complaint. Hence, the trial court
United Airlines moved to dismiss the complaint concluded that Art. 29 excludes the application
on the ground that respondent's cause of action of our interruption rules.
had prescribed, invoking Art. 29 of the Warsaw
Convention which provides Respondent received a copy of the dismissal
order on 17 August 1992. On 31 August 1992,
Art. 29 (1) The right to damages or fourteen (14) days later, he moved for the
shall be extinguished if an reconsideration of the trial court's order. The trial
action is not brought within two court denied the motion and respondent
(2) years, reckoned from the received copy of the denial order on 28
date of arrival at the destination, September 1992. Two (2) days later, on 1
or from the date on which the October 1992 respondent filed his notice of
aircraft ought to have arrived, or appeal.
from the date on which the
transportation stopped. United Airlines once again moved for the
dismissal of the case this time pointing out that
(2) The method of calculating respondent's fifteen (15)-day period to appeal
the period of limitation shall be had already elapsed. Petitioner argued that
having used fourteen (14) days of the Sec. 1 of Rule 45 of the 1997 Rules of Civil
reglementary period for appeal, respondent Uy Procedure provides that "a party may appeal
had only one (1) day remaining to perfect his by certiorari, from a judgment of the Court of
appeal, and since he filed his notice of appeal Appeals, by filing with the Supreme Court a
two (2) days later, he failed to meet the petition for certiorari, within fifteen (15) days
deadline. from notice of judgment or of the denial of his
motion for reconsideration filed in due time . . . ."
In its questioned Decision dated 29 August This Rule however should not be interpreted as
1995 5 the appellate court gave due course to "to sacrifice the substantial right of the appellant
the appeal holding that respondent's delay of in the sophisticated altar of technicalities with
two (2) days in filing his notice of appeal did not impairment of the sacred principles of
hinder it from reviewing the appealed order of justice." 7 It should be borne in mind that the real
dismissal since jurisprudence dictates that an purpose behind the limitation of the period of
appeal may be entertained despite procedural appeal is to forestall or avoid an unreasonable
lapses anchored on equity and justice. delay in the administration of justice. Thus, we
have ruled that delay in the filing of a notice of
appeal does not justify the dismissal of the
On the applicability of the Warsaw Convention,
appeal where the circumstances of the case
the appellate court ruled that the Warsaw
show that there is no intent to delay the
Convention did not preclude the operation of the
Civil Code and other pertinent laws. administration of justice on the part of
Respondent's failure to file his complaint within appellant's counsel, 8 or when there are no
substantial rights affected, 9 or when appellant's
the two (2)-year limitation provided in the
counsel committed a mistake in the computation
Warsaw Convention did not bar his action since
of the period of appeal, an error not attributable
he could still hold petitioner liable for breach of
other provisions of the Civil Code which to negligence or bad faith. 10
prescribe a different period or procedure for
instituting an action. Further, under Philippine In the instant case, respondent filed his notice of
laws, prescription of actions is interrupted appeal two (2) days later than the prescribed
where, among others, there is a written period. Although his counsel failed to give the
extrajudicial demand by the creditors, and since reason for the delay, we are inclined to give due
respondent Uy sent several demand letters to course to his appeal due to the unique and
petitioner United Airlines, the running of the two peculiar facts of the case and the serious
(2)-year prescriptive period was in effect question of law it poses. In the now almost trite
suspended. Hence, the appellate court ruled that but still good principle, technicality, when it
respondent's cause of action had not yet deserts its proper office as an aid to justice and
prescribed and ordered the records remanded to becomes its great hindrance and chief enemy,
the Quezon City trial court for further deserves scant consideration. 11
proceedings.
Petitioner likewise contends that the appellate
Petitioner now contends that the appellate court court erred in ruling that respondent's cause of
erred in assuming jurisdiction over respondent's action has not prescribed since delegates to the
appeal since it is clear that the notice of appeal Warsaw Convention clearly intended the two (2)-
was filed out of time. It argues that the courts year limitation incorporated in Art. 29 as an
relax the stringent rule on perfection of appeals absolute bar to suit and not to be made subject
only when there are extraordinary to the various tolling provisions of the laws of the
circumstances, e.g., when the Republic stands forum. Petitioner argues that in construing the
to lose hundreds of hectares of land already second paragraph of Art. 29 private respondent
titled and used for educational purposes; when cannot read into it Philippine rules on
the counsel of record was already dead; and interruption of prescriptive periods and state that
wherein appellant was the owner of the his extrajudicial demand has interrupted the
trademark for more than thirty (30) years, and period of prescription. 12 American jurisprudence
the circumstances of the present case do not has declared that "Art. 29 (2) was not intended
compare to the above exceptional cases. 6 to permit forums to consider local limitation
tolling provisions but only to let local law
determine whether an action had been
commenced within the two-year period, since As for respondent's second cause of action,
the method of commencing a suit varies from indeed the travaux preparatories of the Warsaw
country to country." 13 Convention reveal that the delegates thereto
intended the two (2)-year limitation incorporated
Within our jurisdiction we have held that the in Art. 29 as an absolute bar to suit and not to be
Warsaw Convention can be applied, or ignored, made subject to the various tolling provisions of
depending on the peculiar facts presented by the laws of the forum. This therefore forecloses
each case. 14 Thus, we have ruled that the the application of our own rules on interruption
Convention's provisions do not regulate or of prescriptive periods. Article 29, par. (2), was
exclude liability for other breaches of contract by intended only to let local laws determine whether
the carrier or misconduct of its officers and an action had been commenced within the two
employees, or for some particular or exceptional (2)-year period, and within our jurisdiction an
type of damage. 15 Neither may the Convention action shall be deemed commenced upon the
be invoked to justify the disregard of some filing of a complaint. Since it is indisputable that
extraordinary sort of damage resulting to a respondent filed the present action beyond the
passenger and preclude recovery therefor two (2)-year time frame his second cause of
beyond the limits set by said action must be barred. Nonetheless, it cannot be
Convention. 16 Likewise, we have held that the doubted that respondent exerted efforts to
Convention does not preclude the operation of immediately convey his loss to petitioner, even
the Civil Code and other pertinent laws. 17 It employed the services of two (2) lawyers to
does not regulate, much less exempt, the carrier follow up his claims, and that the filing of the
from liability for damages for violating the rights action itself was delayed because of petitioner's
of its passengers under the contract of carriage, evasion.
especially if willful misconduct on the part of the
carrier's employees is found or established. 18 In this regard, Philippine Airlines, Inc. v. Court of
Appeals 19 is instructive. In this case of PAL,
Respondent's complaint reveals that he is suing private respondent filed an action for damages
on two (2) causes of action: (a) the shabby and against petitioner airline for the breakage of the
humiliating treatment he received from front glass of the microwave oven which she
petitioner's employees at the San Francisco shipped under PAL Air Waybill No. 0-79-
Airport which caused him extreme 1013008-3. Petitioner averred that, the action
embarrassment and social humiliation; and, (b) having been filed seven (7) months after her
the slashing of his luggage and the loss of his arrival at her port of destination, she failed to
personal effects amounting to US $5,310.00. comply with par. 12, subpar. (a) (1), of the Air
Waybill which expressly provided that the
While his second cause of action an action person entitled to delivery must make a
for damages arising from theft or damage to complaint to the carrier in writing in case of
visible damage to the goods, immediately after
property or goods is well within the bounds of
discovery of the damage and at the latest within
the Warsaw Convention, his first cause of action
14 days from receipt of the goods. Despite non-
an action for damages arising from the
compliance therewith the Court held that by
misconduct of the airline employees and the
violation of respondent's rights as passenger private respondent's immediate submission of a
formal claim to petitioner, which however was
clearly is not.
not immediately entertained as it was referred
from one employee to another, she was deemed
Consequently, insofar as the first cause of action to have substantially complied with the
is concerned, respondent's failure to file his requirement. The Court noted that with private
complaint within the two (2)-year limitation of the respondent's own zealous efforts in pursuing her
Warsaw Convention does not bar his action claim it was clearly not her fault that the letter of
since petitioner airline may still be held liable for demand for damages could only be filed, after
breach of other provisions of the Civil Code months of exasperating follow-up of the claim,
which prescribe a different period or procedure on 13 August 1990, and that if there was any
for instituting the action, specifically, Art. 1146 failure at all to file the formal claim within the
thereof which prescribes four (4) years for filing prescriptive period contemplated in the Air
an action based on torts. Waybill, this was largely because of the carrier's
own doing, the consequences of which could not
in all fairness be attributed to private
respondent.
G.R. No. 104235 November 18, 1993
In the same vein must we rule upon the
circumstances brought before us. Verily, SPOUSES CESAR & SUTHIRA ZALAMEA and
respondent filed his complaint more than two (2) LIANA ZALAMEA, petitioners,
years later, beyond the period of limitation vs.
prescribed by the Warsaw Convention for filing a HONORABLE COURT OF APPEALS and
claim for damages. However, it is obvious that TRANSWORLD AIRLINES, INC., respondents.
respondent was forestalled from immediately
filing an action because petitioner airline gave Sycip, Salazar, Hernandez, Gatmaitan for
him the runaround, answering his letters but not petitioners.
giving in to his demands. True, respondent
should have already filed an action at the first
instance when his claims were denied by Quisumbing, Torres & Evangelista for private-
petitioner but the same could only be due to his respondent.
desire to make an out-of-court settlement for
which he cannot be faulted. Hence, despite the
express mandate of Art. 29 of the Warsaw
Convention that an action for damages should NOCON, J.:
be filed within two (2) years from the arrival at
the place of destination, such rule shall not be Disgruntled over TransWorld Airlines, Inc.'s
applied in the instant case because of the refusal to accommodate them in TWA Flight 007
delaying tactics employed by petitioner airline departing from New York to Los Angeles on
itself. Thus, private respondent's second cause June 6, 1984 despite possession of confirmed
of action cannot be considered as time-barred tickets, petitioners filed an action for damages
under Art. 29 of the Warsaw Convention. before the Regional Trial Court of Makati, Metro
Manila, Branch 145. Advocating petitioner's
WHEREFORE, the assailed Decision of the position, the trial court categorically ruled that
Court of Appeals reversing and setting aside the respondent TransWorld Airlines (TWA)
appealed order of the trial court granting the breached its contract of carriage with petitioners
motion to dismiss the complaint, as well as its and that said breach was "characterized by bad
Resolution denying reconsideration, is faith." On appeal, however, the appellate court
AFFIRMED. Let the records of the case be found that while there was a breach of contract
remanded to the court of origin for further on respondent TWA's part, there was neither
proceedings taking its bearings from this fraud nor bad faith because under the Code of
disquisition. Federal Regulations by the Civil Aeronautics
Board of the United States of America it is
SO ORDERED. allowed to overbook flights.

The factual backdrop of the case is as follows:

Petitioners-spouses Cesar C. Zalamea and


Suthira Zalamea, and their daughter, Liana
Zalamea, purchased three (3) airline tickets from
the Manila agent of respondent TransWorld
Airlines, Inc. for a flight to New York to Los
Angeles on June 6, 1984. The tickets of
petitioners-spouses were purchased at a
discount of 75% while that of their daughter was
a full fare ticket. All three tickets represented
confirmed reservations.

While in New York, on June 4, 1984, petitioners


received notice of the reconfirmation of their
reservations for said flight. On the appointed (2) US $159.49, or its peso
date, however, petitioners checked in at 10:00 equivalent at the time of
a.m., an hour earlier than the scheduled flight at payment, representing the price
11:00 a.m. but were placed on the wait-list of Suthira Zalamea's ticket for
because the number of passengers who had TWA Flight 007;
checked in before them had already taken all the
seats available on the flight. Liana Zalamea (3) Eight Thousand Nine
appeared as the No. 13 on the wait-list while the Hundred Thirty-Four Pesos and
two other Zalameas were listed as "No. 34, Fifty Centavos (P8,934.50,
showing a party of two." Out of the 42 names on Philippine Currency,
the wait list, the first 22 names were eventually representing the price of Liana
allowed to board the flight to Los Angeles, Zalamea's ticket for TWA Flight
including petitioner Cesar Zalamea. The two 007,
others, on the other hand, at No. 34, being
ranked lower than 22, were not able to fly. As it (4) Two Hundred Fifty Thousand
were, those holding full-fare tickets were given
Pesos (P250,000.00), Philippine
first priority among the wait-listed passengers.
Currency, as moral damages for
Mr. Zalamea, who was holding the full-fare ticket
all the plaintiffs'
of his daughter, was allowed to board the plane;
while his wife and daughter, who presented the
discounted tickets were denied boarding. (5) One Hundred Thousand
According to Mr. Zalamea, it was only later when Pesos (P100,000.00), Philippine
he discovered the he was holding his daughter's Currency, as and for attorney's
full-fare ticket. fees; and

Even in the next TWA flight to Los Angeles Mrs. (6) The costs of suit.
Zalamea and her daughter, could not be
accommodated because it was also fully SO ORDERED. 2
booked. Thus, they were constrained to book in
another flight and purchased two tickets from On appeal, the respondent Court of Appeals
American Airlines at a cost of Nine Hundred held that moral damages are recoverable in a
Eighteen ($918.00) Dollars. damage suit predicated upon a breach of
contract of carriage only where there is fraud or
Upon their arrival in the Philippines, petitioners bad faith. Since it is a matter of record that
filed an action for damages based on breach of overbooking of flights is a common and
contract of air carriage before the Regional Trial accepted practice of airlines in the United States
Court of Makati, Metro Manila, Branch 145. As and is specifically allowed under the Code of
aforesaid, the lower court ruled in favor of Federal Regulations by the Civil Aeronautics
petitioners in its decision 1 dated January 9, Board, no fraud nor bad faith could be imputed
1989 the dispositive portion of which states as on respondent TransWorld Airlines.
follows:
Moreover, while respondent TWA was remiss in
WHEREFORE, judgment is not informing petitioners that the flight was
hereby rendered ordering the overbooked and that even a person with a
defendant to pay plaintiffs the confirmed reservation may be denied
following amounts: accommodation on an overbooked flight,
nevertheless it ruled that such omission or
(1) US $918.00, or its peso negligence cannot under the circumstances be
equivalent at the time of considered to be so gross as to amount to bad
payment representing the price faith.
of the tickets bought by Suthira
and Liana Zalamea from Finally, it also held that there was no bad faith in
American Airlines, to enable placing petitioners in the wait-list along with
them to fly to Los Angeles from forty-eight (48) other passengers where full-fare
New York City;
first class tickets were given priority over . . . IN ELIMINATING THE
discounted tickets. AWARD OF EXEMPLARY
DAMAGES.
The dispositive portion of the decision of
respondent Court of Appeals3 dated October 25, III.
1991 states as follows:
. . . IN NOT ORDERING THE
WHEREFORE, in view of all the REFUND OF LIANA
foregoing, the decision under ZALAMEA'S TWA TICKET AND
review is hereby MODIFIED in PAYMENT FOR THE
that the award of moral and AMERICAN AIRLINES
exemplary damages to the TICKETS.5
plaintiffs is eliminated, and the
defendant-appellant is hereby That there was fraud or bad faith on the part of
ordered to pay the plaintiff the respondent airline when it did not allow
following amounts: petitioners to board their flight for Los Angeles in
spite of confirmed tickets cannot be disputed.
(1) US$159.49, or its peso The U.S. law or regulation allegedly authorizing
equivalent at the time of the overbooking has never been proved. Foreign
payment, representing the price laws do not prove themselves nor can the courts
of Suthira Zalamea's ticket for take judicial notice of them. Like any other fact,
TWA Flight 007; they must be alleged and proved.6 Written law
may be evidenced by an official publication
(2) US$159.49, or its peso thereof or by a copy attested by the officer
equivalent at the time of the having the legal custody of the record, or by his
payment, representing the price deputy, and accompanied with a certificate that
of Cesar Zalamea's ticket for such officer has custody. The certificate may be
TWA Flight 007; made by a secretary of an embassy or legation,
consul general, consul, vice-consul, or consular
agent or by any officer in the foreign service of
(3) P50,000.00 as and for
the Philippines stationed in the foreign country in
attorney's fees.
which the record is kept, and authenticated by
the seal of his office.7
(4) The costs of suit.
Respondent TWA relied solely on the statement
SO ORDERED.4 of Ms. Gwendolyn Lather, its customer service
agent, in her deposition dated January 27, 1986
Not satisfied with the decision, petitioners raised that the Code of Federal Regulations of the Civil
the case on petition for review on certiorari and Aeronautics Board allows overbooking. Aside
alleged the following errors committed by the from said statement, no official publication of
respondent Court of Appeals, to wit: said code was presented as evidence. Thus,
respondent court's finding that overbooking is
I. specifically allowed by the US Code of Federal
Regulations has no basis in fact.
. . . IN HOLDING THAT THERE
WAS NO FRAUD OR BAD Even if the claimed U.S. Code of Federal
FAITH ON THE PART OF Regulations does exist, the same is not
RESPONDENT TWA applicable to the case at bar in accordance with
BECAUSE IT HAS A RIGHT TO the principle of lex loci contractus which require
OVERBOOK FLIGHTS. that the law of the place where the airline ticket
was issued should be applied by the court where
II. the passengers are residents and nationals of
the forum and the ticket is issued in such State
by the defendant airline.8 Since the tickets were
sold and issued in the Philippines, the applicable Inc. 12 This is so, for a contract of carriage
law in this case would be Philippine law. generates a relation attended with public duty
a duty to provide public service and convenience
Existing jurisprudence explicitly states that to its passengers which must be paramount to
overbooking amounts to bad faith, entitling the self-interest or enrichment. Thus, it was also
passengers concerned to an award of moral held that the switch of planes from Lockheed
damages. In Alitalia Airways v. Court of 1011 to a smaller Boeing 707 because there
Appeals,9 where passengers with confirmed were only 138 confirmed economy class
bookings were refused carriage on the last passengers who could very well be
minute, this Court held that when an airline accommodated in the smaller planes, thereby
issues a ticket to a passenger confirmed on a sacrificing the comfort of its first class
particular flight, on a certain date, a contract of passengers for the sake of economy, amounts
carriage arises, and the passenger has every to bad faith. Such inattention and lack of care for
right to expect that he would fly on that flight and the interest of its passengers who are entitled to
on that date. If he does not, then the carrier its utmost consideration entitles the passenger
opens itself to a suit for breach of contract of to an award of moral damages. 13
carriage. Where an airline had deliberately
overbooked, it took the risk of having to deprive Even on the assumption that overbooking is
some passengers of their seats in case all of allowed, respondent TWA is still guilty of bad
them would show up for the check in. For the faith in not informing its passengers beforehand
indignity and inconvenience of being refused a that it could breach the contract of carriage even
confirmed seat on the last minute, said if they have confirmed tickets if there was
passenger is entitled to an award of moral overbooking. Respondent TWA should have
damages. incorporated stipulations on overbooking on the
tickets issued or to properly inform its
Similarly, in Korean Airlines Co., Ltd. v. Court of passengers about these policies so that the
Appeals, 10 where private respondent was not latter would be prepared for such eventuality or
allowed to board the plane because her seat would have the choice to ride with another
had already been given to another passenger airline.
even before the allowable period for passengers
to check in had lapsed despite the fact that she Respondent TWA contends that Exhibit I, the
had a confirmed ticket and she had arrived on detached flight coupon upon which were written
time, this Court held that petitioner airline acted the name of the passenger and the points of
in bad faith in violating private respondent's origin and destination, contained such a notice.
rights under their contract of carriage and is An examination of Exhibit I does not bear this
therefore liable for the injuries she has sustained out. At any rate, said exhibit was not offered for
as a result. the purpose of showing the existence of a notice
of overbooking but to show that Exhibit I was
In fact, existing jurisprudence abounds with used for flight 007 in first class of June 11, 1984
rulings where the breach of contract of carriage from New York to Los Angeles.
amounts to bad faith. In Pan American World
Airways, Inc. v. Intermediate Appellate Moreover, respondent TWA was also guilty of
Court, 11 where a would-be passenger had the not informing its passengers of its alleged policy
necessary ticket, baggage claim and clearance of giving less priority to discounted tickets. While
from immigration all clearly and unmistakably the petitioners had checked in at the same time,
showing that she was, in fact, included in the and held confirmed tickets, yet, only one of them
passenger manifest of said flight, and yet was was allowed to board the plane ten minutes
denied accommodation in said flight, this Court before departure time because the full-fare ticket
did not hesitate to affirm the lower court's finding he was holding was given priority over
awarding her damages. discounted tickets. The other two petitioners
were left behind.
A contract to transport passengers is quite
different in kind and degree from any other It is respondent TWA's position that the practice
contractual relation. So ruled this Court of overbooking and the airline system of
in Zulueta v. Pan American World Airways, boarding priorities are reasonable policies,
which when implemented do not amount to bad was the consequence of respondent TWA's
faith. But the issue raised in this case is not the unjustifiable breach of its contracts of carriage
reasonableness of said policies but whether or with petitioners. In accordance with Article 2201,
not said policies were incorporated or deemed New Civil Code, respondent TWA should,
written on petitioners' contracts of carriage. therefore, be responsible for all damages which
Respondent TWA failed to show that there are may be reasonably attributed to the non-
provisions to that effect. Neither did it present performance of its obligation. In the previously
any argument of substance to show that cited case of Alitalia Airways v. Court of
petitioners were duly apprised of the overbooked Appeals, 15 this Court explicitly held that a
condition of the flight or that there is a hierarchy passenger is entitled to be reimbursed for the
of boarding priorities in booking passengers. It is cost of the tickets he had to buy for a flight to
evident that petitioners had the right to rely upon another airline. Thus, instead of simply being
the assurance of respondent TWA, thru its agent refunded for the cost of the unused TWA tickets,
in Manila, then in New York, that their tickets petitioners should be awarded the actual cost of
represented confirmed seats without any their flight from New York to Los Angeles. On
qualification. The failure of respondent TWA to this score, we differ from the trial court's ruling
so inform them when it could easily have done which ordered not only the reimbursement of the
so thereby enabling respondent to hold on to American Airlines tickets but also the refund of
them as passengers up to the last minute the unused TWA tickets. To require both
amounts to bad faith. Evidently, respondent prestations would have enabled petitioners to fly
TWA placed its self-interest over the rights of from New York to Los Angeles without any fare
petitioners under their contracts of carriage. being paid.
Such conscious disregard of petitioners' rights
makes respondent TWA liable for moral The award to petitioners of attorney's fees is
damages. To deter breach of contracts by also justified under Article 2208(2) of the Civil
respondent TWA in similar fashion in the future, Code which allows recovery when the
we adjudge respondent TWA liable for defendant's act or omission has compelled
exemplary damages, as well. plaintiff to litigate or to incur expenses to protect
his interest. However, the award for moral
Petitioners also assail the respondent court's damages and exemplary damages by the trial
decision not to require the refund of Liana court is excessive in the light of the fact that only
Zalamea's ticket because the ticket was used by Suthira and Liana Zalamea were actually
her father. On this score, we uphold the "bumped off." An award of P50,000.00 moral
respondent court. Petitioners had not shown damages and another P50,000.00 exemplary
with certainty that the act of respondent TWA in damages would suffice under the circumstances
allowing Mr. Zalamea to use the ticket of her obtaining in the instant case.
daughter was due to inadvertence or deliberate
act. Petitioners had also failed to establish that WHEREFORE, the petition is hereby GRANTED
they did not accede to said agreement. The and the decision of the respondent Court of
logical conclusion, therefore, is that both Appeals is hereby MODIFIED to the extent of
petitioners and respondent TWA agreed, albeit adjudging respondent TransWorld Airlines to
impliedly, to the course of action taken. pay damages to petitioners in the following
amounts, to wit:
The respondent court erred, however, in not
ordering the refund of the American Airlines (1) US$918.00 or its peso equivalent at the time
tickets purchased and used by petitioners of payment representing the price of the tickets
Suthira and Liana. The evidence shows that bought by Suthira and Liana Zalamea from
petitioners Suthira and Liana were constrained American Airlines, to enable them to fly to Los
to take the American Airlines flight to Los Angeles from New York City;
Angeles not because they "opted not to use their
TWA tickets on another TWA flight" but because
(2) P50,000.00 as moral damages;
respondent TWA could not accommodate them
either on the next TWA flight which was also
fully booked. 14 The purchase of the American (3) P50,000.00 as exemplary damages;
Airlines tickets by petitioners Suthira and Liana
(4) P50,000.00 as attorney's fees; and
(5) Costs of suit.

SO ORDERED.