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PHILIPPINE AIRLINES vs. COURT OF APPEALS and LEOVIGILDO A.

PANTEJO

275 SCRA 621 G.R. No. 120262

July 17, 1997

FACTS:

On October 23, 1988, Leovegildo Pantejo, then City Fiscal of Surigao City, boarded a PAL plane
in Manila and disembarked in Cebu City where he was supposed to take his connecting flight to Surigao
City. However, due to typhoon Osang, the connecting flight to Surigao City was cancelled. PAL initially
gave out cash assistance of P100 and, the next day, P200 for their expected stay of two days in Cebu.
Pantejo requested instead that he be accommodated in a hotel at the expense of PAL as he did not have
cash with him at that time but PAL refused. Fortunately, Pantejo was accommodated by Andoni Dumlao
and he shared a room with the latter at Sky View Hotel with the promise to pay his share of the expenses
upon reaching Surigao. When the flight for Surigao was resumed, Pantejo was informed that the hotel
expenses of his co-passengers were reimbursed by PAL. At this point, Pantejo informed the Manager for
Departure Services of PAL at Mactan Airport that he was going to sue the airline for discriminating against
him. The manager offered to pay Pantejo P300 which the latter declined. Pantejo filed a suit for damages
against PAL in the Regional Trial Court of Surigao City. Said court rendered judgment in favor of Pantejo,
ordering PAL to pay Pantejo P300 for actual damages, P150,000 as moral damages, P100,000 as
exemplary damages, P15,000 as attorney's fees, and 6% interest from the time of the filing of the
complaint until said amounts shall have been fully paid, plus costs of suit. On appeal, CA affirmed the
decision, but with the exclusion of the award of attorney's fees and litigation expenses. Hence, this
petition.

ISSUE:

Whether or not PAL was liable for damages.

HELD:

Yes. A contract to transport passengers is quite different in kind and degree from any other
contractual relation because of the relation which an air carrier sustains with the public. Its business is
mainly with the travelling public. It invites people to avail of the comforts and advantages it offers. The
contract of air carriage, therefore, generates a relation attended with a public duty. Neglect or
malfeasance of the carrier's employees naturally could give ground for an action for damages.

In this case, there was bad faith on the part of PAL. Contrary to the claim of PAL that cash
assistance was given instead because of non-availability of rooms in hotels, the evidence showed that
Sky View Hotel, where respondent Pantejo was billeted, had plenty of rooms available. Pantejo only came
to know about the reimbursements when other passengers informed him that they were able to obtain the
refund for their own hotel expenses. PAL offered to pay P300.00 to Pantejo only after the latter had
confronted the manager of PAL about the discrimination committed against Pantejo, which the manager
realized was an actionable wrong. The hotel accommodation was not a mere amenity or privilege. It was
a company policy whenever a flight is cancelled as testified by several witnesses. And even if it was a
mere privilege, PAL was still liable for damages for its blatant refusal to accord the so-called amenities
equally to all its stranded passengers. No compelling or justifying reason was advanced for such
discriminatory and prejudicial conduct. It was not also true that Pantejo was not listening to the
announcements. In fact, Pantejo immediately proceeded to the office of PAL and requested for hotel
accommodations. He was not only refused accommodations, but he was not even informed that he may
later on be reimbursed for his hotel expenses. The refund of hotel expenses was surreptitiously and
discriminatorily made by PAL as only handful of passengers knew about it. Pantejo was exposed to
humiliation and embarrassment especially because of his government position and social prominence.
The discriminatory act of PAL against Pantejo made PAL liable for moral damages under Article 21 in
relation to Article 2219 (10) of the Civil Code. As held in Alitalia Airways vs. CA, such inattention to and
lack of care by petitioner airline for the interest of its passengers who were entitled to its utmost
consideration, particularly as to their convenience, amounted to bad faith which entitled the passenger to
the award of moral damages. Under the peculiar circumstances of this case, the awards for actual, moral
and exemplary damages granted in the judgment of CA were just and equitable. But the interest of 6%
imposed should be computed from the date of rendition of judgment and not from the filing of the
complaint. The judgment of Court of Appeals was AFFIRMED, subject to the MODIFICATION regarding
the computation of the 6% legal rate of interest on the monetary awards granted therein to private
respondent.