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[Responsibility for acts of employees] and service; nor is it responsible ex contractu, since the complaint did not aver

sufficient facts to establish such liability, and no negligence on appellant's party

G.R. No. L-8034 November 18, 1955 was shown. The Court below held the Railroad company responsible on the
ground that a contract of transportation implies protection of the passengers
CORNELIA A. DE GILLACO, ET AL., plaintiffs-appellees,
against acts of personal violence by the agents or employees of the carrier.
MANILA RAILROAD COMPANY, defendant-appellant. There can be no quarrel with the principle that a passenger is entitled to
protection from personal violence by the carrier or its agents or employees,
First Assistant Corporate Counsel Federico C. Alikpala and Attorney Higino R.
since the contract of transportation obligates the carrier to transport a passenger
Francisco for appellant. Restituto Luna for appellees.
safely to his destination. But under the law of the case, this responsibility
REYES, J.B.L., J.: extends only to those that the carrier could foresee or avoid through the exercise
of the degree of car and diligence required of it.
The Manila Railroad Company has appealed from a judgment of the Court of
First Instance of Laguna sentencing it to pay P4,000 damages to the appellees Discussing the basis of a carrier's liability under the old Civil Code of 1889
herein, the widow and children of the late Tomas Gillaco, shot by an employee (which was in force in 1946, when Gillaco was shot) this Court said in Lasam vs.
of the Company in April, 1946. Smith (45 Phil., 657):

The judgment was rendered upon the following stipulation of facts: In our opinion, the conclusions of the court below are entirely correct. That upon
the facts stated the defendant's liability, if any, is contractual, is well settled by
That at about 7:30 a.m., on the morning of April 1, 1946, Lieut. Tomas Gillaco, previous decisions of the court, beginning with the case of Rakes vs. Atlantic,
husband of the plaintiff, was a passenger in the early morning train of the Manila Gulf & Pacific Co. (7 Phil., 359), and the distinction between extra-contractual
Railroad Company from Calamba, Laguna to Manila; liability and contractual liability has been so ably and exhaustively discussed in
various other cases that nothing further need here be said upon that subject.
That when the train reached the Paco Railroad station, Emilio Devesa, a train (See Cangco vs. Manila Railroad Co., 38 Phil., 768; Manila Railroad vs.
guard of the Manila Railroad Company assigned in the Manila-San Fernando, Compañia Transatlantica and Atlantic, Gulf & Pacific Co., 38 Phil., 875; De Guia
La Union Line, happened to be in said station waiting for the same train which vs. Manila Electric Railroad & Light Co., 40 Phil., 706). It is sufficient to reiterate
would take him to Tutuban Station, where he was going to report for duty; that the source of the defendant's legal liability is the contract of carriage; that by
entering into that contract he bound himself to carry the plaintiff safely and
That Emilio Devesa had a long standing personal grudge against Tomas Gillaco,
securely to their destination; and that having failed to do so he is liable in
same dating back during the Japanese occupation;
damages unless he shows that the failure to fulfill his obligation was due to
That because of this personal grudge, Devesa shot Gillaco with the carbine causes mentioned in article 1105 of the Civil Code, which reads as follows:
furnished to him by the Manila Railroad Company for his use as such train
"No one shall be liable for events which could not be foreseen or which, even if
guard, upon seeing him inside the train coach;
foreseen, were inevitable, with the exception of the cases in which the law
That Tomas Gillaco died as a result of the would which he sustained from the expressly provides otherwise and those in which the obligation itself imposes
shot fired by Devesa. such liability."

It is also undisputed that Devesa was convicted with homicide by final judgment The act of guard Devesa in shooting passenger Gillaco (because of a personal
of the Court of Appeals. grudge nurtured against the latter since the Japanese occupation) was entirely
unforeseeable by the Manila Railroad Co. The latter had no means to ascertain
Appellant's contention is that, on the foregoing facts, no liability attaches to it as or anticipate that the two would meet, nor could it reasonably foresee every
employer of the killer, Emilio Devesa; that it is not responsible subsidiary ex personal rancor that might exist between each one of its many employees and
delicto, under Art. 103 of the Revised Penal Code, because the crime was not any one of the thousands of eventual passengers riding in its trains. The
committed while the slayer was in the actual performance of his ordinary duties shooting in question was therefore "caso fortuito" within the definition of article
105 of the old Civil Code, being both unforeseeable and inevitable under the The only good reason for making the carrier responsible for the misconduct of
given circumstances; and pursuant to established doctrine, the resulting breach the servant perpetrated in his own interest, and not in that of his employer, or
of appellant's contract of safe carriage with the late Tomas Gillaco was excused otherwise within the scope of his employment, is that the servant is clothed with
thereby. the delegated authority, and charge with the duty by the carrier, to execute his
undertaking with the passenger. And it cannot be said, we think, that there is
No doubt that a common carrier is held to a very high degree of care and any such delegation to the employees at a station with reference to passenger
diligence in the protection of its passengers; but, considering the vast and embarking at another or traveling on the train. Of course, we are speaking only
complex activities of modern rail transportation, to require of appellant that it of the principle which holds a carrier responsible for wrong done to passenger
should guard against all possible misunderstanding between each and every by servants acting in their own interest, and not in that of the employer. That
one of its employees and every passenger that might chance to ride in its principle is not the ordinary rule, respondent superior, by which the employer is
conveyances at any time, strikes us as demanding diligence beyond what held responsible only for act or omissions of the employee in the scope of his
human care and foresight can provide. employment; but the only reason in our opinion for a broader liability arises from
the fact that the servant, in mistreating the passenger wholly for some private
The lower Court and the appellees both relied on the American authorities that
purpose of his own, in the very act, violates the contractual obligation of the
particularly hold carriers to be insurers of the safety of their passengers against
employer for the performance of which he has put the employee in his place.
willful assault and intentional ill treatment on the part of their servants, it being
The reason does not exist where the employee who committed the assault was
immaterial that the act should be one of private retribution on the part of the
never in a position in which it became his duty to his employer to represent him
servant, impelled by personal malice toward the passenger (10 Am. Jur. 108;
in discharging any duty of the latter toward the passenger. The proposition that
Ed. Note to Gassenheimer vs. Wester R. Co. 40 LRA (NS), p. 999, et seq.) But
the carrier clothes every employee engaged in the transportation business with
as can be inferred from the previous jurisprudence of this Court , the Civil Code
the comprehensive duty of protecting every passenger with whom he may in any
of 1889 did not impose such absolute liability (Lasam vs. Smith, supra). The
way come in contact, and hereby makes himself liable for every assault
liability of a carrier as an insurer was not recognized in this jurisdiction
commited by such servant, without regard to the inquiry whether or not the
(Government vs. Inchausti & Co., 40 Phil., 219; Oriental Comm. Co. vs. Naviera
passenger has come within the sphere of duty of that servant as indicated by the
Filipina, 38 Off. Gaz., 1020).
employment, is regarded as not only not sustained by the authorities, but as
Another very important consideration that must be borne in mind is that, when being unsound and oppressive both to the employer and the employee.
the crime took place, the guard Devesa had no duties to discharge in connection (Houston & T. C. R. Co. vs. Bush, 32 LRA (NS), p. 1205.)
with the transportation of the deceased from Calamba to Manila. The stipulation
Wherefore, the judgment appealed from is reversed and the complaint ordered
of facts is clear that when Devesa shot and killed Gillaco, Devesa was assigned
dismissed, without cost. So ordered.
to guard the Manila-San Fernando (La Union) trains, and he was at Paco Station
awaiting transportation to Tutuban, the starting point of the train that he was
engaged to guard. In fact, his tour of duty was to start at 9:00 a.m., two hours
after the commission of the crime. Devesa was therefore under no obligation to
safeguard the passenger of the Calamba-Manila train, where the deceased was
riding; and the killing of Gillaco was not done in line of duty. The position of
Devesa at the time was that of another would be passenger, a stranger also
awaiting transportation, and not that of an employee assigned to discharge any
of the duties that the Railroad had assumed by its contract with the deceased.
As a result, Devesa's assault cannot be deemed in law a breach of Gillaco's
contract of transportation by a servant or employee of the carrier. We agree with
the position taken by the Supreme Court of Texas in a similar case, where it
[Responsibility for acts of employees] x x x when the crime took place, the guard Devesa had no duties to discharge in
connection with the transportation of the deceased from Calamba to Manila. The
G.R. No. L-22272 June 26, 1967 stipulation of facts is clear that when Devesa shot and killed Gillaco, Devesa
was assigned to guard the Manila-San Fernando (La Union) trains, and he was
ANTONIA MARANAN, plaintiff-appellant, vs.
at Paco Station awaiting transportation to Tutuban, the starting point of the train
PASCUAL PEREZ, ET AL., defendants. PASCUAL PEREZ, defendant that he was engaged to guard. In fact, his tour of duty was to start at 9:00 two
appellant. hours after the commission of the crime. Devesa was therefore under no
obligation to safeguard the passengers of the Calamba-Manila train, where the
Pedro Panganiban for plaintiff-appellant. deceased was riding; and the killing of Gillaco was not done in line of duty. The
position of Devesa at the time was that of another would be passenger, a
Magno T. Bueser for defendant-appellant. stranger also awaiting transportation, and not that of an employee assigned to
discharge any of the duties that the Railroad had assumed by its contract with
the deceased. As a result, Devesa's assault can not be deemed in law a breach
Rogelio Corachea, on October 18, 1960, was a passenger in a taxicab owned of Gillaco's contract of transportation by a servant or employee of the carrier. . . .
and operated by Pascual Perez when he was stabbed and killed by the driver, (Emphasis supplied)
Simeon Valenzuela.
Now here, the killing was perpetrated by the driver of the very cab transporting
Valenzuela was prosecuted for homicide in the Court of First Instance of the passenger, in whose hands the carrier had entrusted the duty of executing
Batangas. Found guilty, he was sentenced to suffer imprisonment and to the contract of carriage. In other words, unlike the Gillaco case, the killing of the
indemnify the heirs of the deceased in the sum of P6,000. Appeal from said passenger here took place in the course of duty of the guilty employee and
conviction was taken to the Court of Appeals.1äwphï1.ñët when the employee was acting within the scope of his duties.

On December 6 1961, while appeal was pending in the Court of Appeals, Moreover, the Gillaco case was decided under the provisions of the Civil Code
Antonia Maranan, Rogelio's mother, filed an action in the Court of First Instance of 1889 which, unlike the present Civil Code, did not impose upon common
of Batangas to recover damages from Perez and Valenzuela for the death of her carriers absolute liability for the safety of passengers against wilful assaults or
son. Defendants asserted that the deceased was killed in self-defense, since he negligent acts committed by their employees. The death of the passenger in the
first assaulted the driver by stabbing him from behind. Defendant Perez further Gillaco case was truly a fortuitous event which exempted the carrier from
claimed that the death was a caso fortuito for which the carrier was not liable. liability. It is true that Art. 1105 of the old Civil Code on fortuitous events has
been substantially reproduced in Art. 1174 of the Civil Code of the Philippines
The court a quo, after trial, found for the plaintiff and awarded her P3,000 as but both articles clearly remove from their exempting effect the case where the
damages against defendant Perez. The claim against defendant Valenzuela was law expressly provides for liability in spite of the occurrence of force majeure.
dismissed. From this ruling, both plaintiff and defendant Perez appealed to this And herein significantly lies the statutory difference between the old and present
Court, the former asking for more damages and the latter insisting on non- Civil Codes, in the backdrop of the factual situation before Us, which further
liability. Subsequently, the Court of Appeals affirmed the judgment of conviction accounts for a different result in the Gillaco case. Unlike the old Civil Code, the
earlier mentioned, during the pendency of the herein appeal, and on May 19, new Civil Code of the Philippines expressly makes the common carrier liable for
1964, final judgment was entered therein. (Rollo, p. 33). intentional assaults committed by its employees upon its passengers, by the
wording of Art. 1759 which categorically states that
Defendant-appellant relies solely on the ruling enunciated in Gillaco v. Manila
Railroad Co., 97 Phil. 884, that the carrier is under no absolute liability for Common carriers are liable for the death of or injuries to passengers through the
assaults of its employees upon the passengers. The attendant facts and negligence or willful acts of the former's employees, although such employees
controlling law of that case and the one at bar are very different however. In the may have acted beyond the scope of their authority or in violation of the orders
Gillaco case, the passenger was killed outside the scope and the course of duty of the common carriers.
of the guilty employee. As this Court there found:
The Civil Code provisions on the subject of Common Carriers 1 are new and driver was not a party thereto. His civil liability is covered in the criminal case
were taken from Anglo-American Law.2 There, the basis of the carrier's liability wherein he was convicted by final judgment.
for assaults on passengers committed by its drivers rests either on (1) the
doctrine of respondeat superior or (2) the principle that it is the carrier's implied In connection with the award of damages, the court a quo granted only P3,000
duty to transport the passenger safely.3 to plaintiff-appellant. This is the minimum compensatory damages amount
recoverable under Art. 1764 in connection with Art. 2206 of the Civil Code when
Under the first, which is the minority view, the carrier is liable only when the act a breach of contract results in the passenger's death. As has been the policy
of the employee is within the scope of his authority and duty. It is not sufficient followed by this Court, this minimal award should be increased to P6,000. As to
that the act be within the course of employment only.4 other alleged actual damages, the lower court's finding that plaintiff's evidence
thereon was not convincing,8 should not be disturbed. Still, Arts. 2206 and 1764
Under the second view, upheld by the majority and also by the later cases, it is award moral damages in addition to compensatory damages, to the parents of
enough that the assault happens within the course of the employee's duty. It is the passenger killed to compensate for the mental anguish they suffered. A
no defense for the carrier that the act was done in excess of authority or in claim therefor, having been properly made, it becomes the court's duty to award
disobedience of the carrier's orders.5 The carrier's liability here is absolute in the moral damages.9 Plaintiff demands P5,000 as moral damages; however, in the
sense that it practically secures the passengers from assaults committed by its circumstances, We consider P3,000 moral damages, in addition to the P6,000
own employees.6 damages afore-stated, as sufficient. Interest upon such damages are also due to
plaintiff-appellant. 10
As can be gleaned from Art. 1759, the Civil Code of the Philippines evidently
follows the rule based on the second view. At least three very cogent reasons Wherefore, with the modification increasing the award of actual damages in
underlie this rule. As explained in Texas Midland R.R. v. Monroe, 110 Tex. 97, plaintiff's favor to P6,000, plus P3,000.00 moral damages, with legal interest on
216 S.W. 388, 389-390, and Haver v. Central Railroad Co., 43 LRA 84, 85: (1) both from the filing of the complaint on December 6, 1961 until the whole
the special undertaking of the carrier requires that it furnish its passenger that amount is paid, the judgment appealed from is affirmed in all other respects. No
full measure of protection afforded by the exercise of the high degree of care costs. So ordered.
prescribed by the law, inter alia from violence and insults at the hands of
strangers and other passengers, but above all, from the acts of the carrier's own
servants charged with the passenger's safety; (2) said liability of the carrier for
the servant's violation of duty to passengers, is the result of the formers
confiding in the servant's hands the performance of his contract to safely
transport the passenger, delegating therewith the duty of protecting the
passenger with the utmost care prescribed by law; and (3) as between the
carrier and the passenger, the former must bear the risk of wrongful acts or
negligence of the carrier's employees against passengers, since it, and not the
passengers, has power to select and remove them.

Accordingly, it is the carrier's strict obligation to select its drivers and similar
employees with due regard not only to their technical competence and physical
ability, but also, no less important, to their total personality, including their
patterns of behavior, moral fibers, and social attitude.

Applying this stringent norm to the facts in this case, therefore, the lower court
rightly adjudged the defendant carrier liable pursuant to Art. 1759 of the Civil
Code. The dismissal of the claim against the defendant driver was also correct.
Plaintiff's action was predicated on breach of contract of carriage7 and the cab
[Responsibility for acts of strangers and co-passengers] stone-throwing incident. After trial, the court a quo rendered judgment with the
following dispositive part:
G.R. No. 52159 December 22, 1989
Wherefore, judgment is hereby entered:
JOSE PILAPIL, petitioner, vs.
1. Ordering defendant transportation company to pay plaintiff Jose Pilapil the
HON. COURT OF APPEALS and ALATCO TRANSPORTATION COMPANY, sum of P 10,000.00, Philippine Currency, representing actual and material
INC., respondents. damages for causing a permanent scar on the face and injuring the eye-sight of
the plaintiff;
Martin Badong, Jr. for petitioner.
2. Ordering further defendant transportation company to pay the sum of P
Eufronio K. Maristela for private respondent.
5,000.00, Philippine Currency, to the plaintiff as moral and exemplary damages;

3. Ordering furthermore, defendant transportation company to reimburse plaintiff

PADILLA, J.: the sum of P 300.00 for his medical expenses and attorney's fees in the sum of
P 1,000.00, Philippine Currency; and
This is a petition to review on certiorari the decision* rendered by the Court of
Appeals dated 19 October 1979 in CA-G.R. No. 57354-R entitled "Jose Pilapil, 4. To pay the costs.
plaintiff-appellee versus Alatco Transportation Co., Inc., defendant-appellant,"
which reversed and set aside the judgment of the Court of First Instance of
Camarines Sur in Civil Case No. 7230 ordering respondent transportation From the judgment, private respondent appealed to the Court of Appeals where
company to pay to petitioner damages in the total sum of sixteen thousand three the appeal was docketed as CA-G.R. No. 57354R. On 19 October 1979, the
hundred pesos (P 16,300.00). Court of Appeals, in a Special Division of Five, rendered judgment reversing and
setting aside the judgment of the court a quo.
The record discloses the following facts:
Hence the present petition.
Petitioner-plaintiff Jose Pilapil, a paying passenger, boarded respondent-
defendant's bus bearing No. 409 at San Nicolas, Iriga City on 16 September In seeking a reversal of the decision of the Court of Appeals, petitioner contends
1971 at about 6:00 P.M. While said bus No. 409 was in due course negotiating that said court has decided the issue not in accord with law. Specifically,
the distance between Iriga City and Naga City, upon reaching the vicinity of the petitioner argues that the nature of the business of a transportation company
cemetery of the Municipality of Baao, Camarines Sur, on the way to Naga City, requires the assumption of certain risks, and the stoning of the bus by a stranger
an unidentified man, a bystander along said national highway, hurled a stone at resulting in injury to petitioner-passenger is one such risk from which the
the left side of the bus, which hit petitioner above his left eye. Private common carrier may not exempt itself from liability.
respondent's personnel lost no time in bringing the petitioner to the provincial
hospital in Naga City where he was confined and treated. We do not agree.

Considering that the sight of his left eye was impaired, petitioner was taken to In consideration of the right granted to it by the public to engage in the business
Dr. Malabanan of Iriga City where he was treated for another week. Since there of transporting passengers and goods, a common carrier does not give its
was no improvement in his left eye's vision, petitioner went to V. Luna Hospital, consent to become an insurer of any and all risks to passengers and goods. It
Quezon City where he was treated by Dr. Capulong. Despite the treatment merely undertakes to perform certain duties to the public as the law imposes,
accorded to him by Dr. Capulong, petitioner lost partially his left eye's vision and and holds itself liable for any breach thereof.
sustained a permanent scar above the left eye.
Under Article 1733 of the Civil Code, common carriers are required to observe
Thereupon, petitioner instituted before the Court of First Instance of Camarines extraordinary diligence for the safety of the passenger transported by them,
Sur, Branch I an action for recovery of damages sustained as a result of the according to all the circumstances of each case. The requirement of
extraordinary diligence imposed upon common carriers is restated in Article Where, as in the instant case, the injury sustained by the petitioner was in no
1755: "A common carrier is bound to carry the passengers safely as far as way due to any defect in the means of transport or in the method of transporting
human care and foresight can provide, using the utmost diligence of very or to the negligent or willful acts of private respondent's employees, and
cautious persons, with due regard for all the circumstances." Further, in case of therefore involving no issue of negligence in its duty to provide safe and suitable
death of or injuries to passengers, the law presumes said common carriers to be cars as well as competent employees, with the injury arising wholly from causes
at fault or to have acted negligently. 2 created by strangers over which the carrier had no control or even knowledge or
could not have prevented, the presumption is rebutted and the carrier is not and
While the law requires the highest degree of diligence from common carriers in ought not to be held liable. To rule otherwise would make the common carrier
the safe transport of their passengers and creates a presumption of negligence the insurer of the absolute safety of its passengers which is not the intention of
against them, it does not, however, make the carrier an insurer of the absolute the lawmakers.
safety of its passengers. 3
Second, while as a general rule, common carriers are bound to exercise
Article 1755 of the Civil Code qualifies the duty of extraordinary care, vigilance extraordinary diligence in the safe transport of their passengers, it would seem
and precaution in the carriage of passengers by common carriers to only such that this is not the standard by which its liability is to be determined when
as human care and foresight can provide. what constitutes compliance with said intervening acts of strangers is to be determined directly cause the injury, while
duty is adjudged with due regard to all the circumstances. the contract of carriage Article 1763 governs:

Article 1756 of the Civil Code, in creating a presumption of fault or negligence on Article 1763. A common carrier is responsible for injuries suffered by a
the part of the common carrier when its passenger is injured, merely relieves the passenger on account of the wilful acts or negligence of other passengers or of
latter, for the time being, from introducing evidence to fasten the negligence on strangers, if the common carrier's employees through the exercise of the
the former, because the presumption stands in the place of evidence. Being a diligence of a good father of a family could have prevented or stopped the act or
mere presumption, however, the same is rebuttable by proof that the common omission.
carrier had exercised extraordinary diligence as required by law in the
performance of its contractual obligation, or that the injury suffered by the Clearly under the above provision, a tort committed by a stranger which causes
passenger was solely due to a fortuitous event. 4 injury to a passenger does not accord the latter a cause of action against the
carrier. The negligence for which a common carrier is held responsible is the
In fine, we can only infer from the law the intention of the Code Commission and negligent omission by the carrier's employees to prevent the tort from being
Congress to curb the recklessness of drivers and operators of common carriers committed when the same could have been foreseen and prevented by them.
in the conduct of their business. Further, under the same provision, it is to be noted that when the violation of the
contract is due to the willful acts of strangers, as in the instant case, the degree
Thus, it is clear that neither the law nor the nature of the business of a
of care essential to be exercised by the common carrier for the protection of its
transportation company makes it an insurer of the passenger's safety, but that
passenger is only that of a good father of a family.
its liability for personal injuries sustained by its passenger rests upon its
negligence, its failure to exercise the degree of diligence that the law requires. 5 Petitioner has charged respondent carrier of negligence on the ground that the
injury complained of could have been prevented by the common carrier if
Petitioner contends that respondent common carrier failed to rebut the
something like mesh-work grills had covered the windows of its bus.
presumption of negligence against it by proof on its part that it exercised
extraordinary diligence for the safety of its passengers. We do not agree.

We do not agree. Although the suggested precaution could have prevented the injury complained
of, the rule of ordinary care and prudence is not so exacting as to require one
First, as stated earlier, the presumption of fault or negligence against the carrier
charged with its exercise to take doubtful or unreasonable precautions to guard
is only a disputable presumption. It gives in where contrary facts are established
against unlawful acts of strangers. The carrier is not charged with the duty of
proving either that the carrier had exercised the degree of diligence required by
providing or maintaining vehicles as to absolutely prevent any and all injuries to
law or the injury suffered by the passenger was due to a fortuitous event.
passengers. Where the carrier uses cars of the most approved type, in general
use by others engaged in the same occupation, and exercises a high degree of
care in maintaining them in suitable condition, the carrier cannot be charged with
negligence in this respect. 6

Finally, petitioner contends that it is to the greater interest of the State if a carrier
were made liable for such stone-throwing incidents rather than have the bus
riding public lose confidence in the transportation system.

Sad to say, we are not in a position to so hold; such a policy would be better left
to the consideration of Congress which is empowered to enact laws to protect
the public from the increasing risks and dangers of lawlessness in society.

WHEREFORE, the judgment appealed from is hereby AFFIRMED.

[Actual or compensatory] connection the total sum of P775.30 in addition to the amount already referred
G.R. No. L-11037 December 29, 1960
On April 24, 1953 the present action was filed to recover for Edgardo Cariaga,
EDGARDO CARIAGA, ET AL., plaintiffs-appellants, from the LTB and the MRR Co., and total sum of P312,000.00 as actual,
vs. compensatory, moral and exemplary damages, and for his parents, the sum of
LAGUNA TAYABAS BUS COMPANY, defendant-appellant. P18,00.00 in the same concepts. The LTB disclaimed liability claiming that the
MANILA RAILROAD COMPANY, defendant-appellee. accident was due to the negligence of its co-defendant, the Manila Railroad
Company, for not providing a crossing bar at the point where the national
Ozaeta, Lichauco and Picazo for defendant and appellant.
highway crossed the railway track, and for this reason filed the corresponding
E.A. Fernandez and L.H. Fernandez for plaintiffs and appellants.
cross-claim against the latter company to recover the total sum of P18,194.75
Gov't. Corp. Counsel A. Padilla and Atty. F.A. Umali for appellee.
representing the expenses paid to Edgardo Cariaga. The Manila Railroad
Company, in turn, denied liability upon the complaint and cross-claim alleging
that it was the reckless negligence of the bus driver that caused the accident.
The lower court held that it was the negligence of the bus driver that caused the
At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the Laguna Tayabas Bus accident and, as a result, rendered judgment sentencing the LTB to pay
Co. — hereinafter referred to as the LTB — driven by Alfredo Moncada, left its Edgardo Cariaga the sum of P10,490.00 as compensatory damages, with
station at Azcarraga St., Manila, for Lilio, Laguna, with Edgardo Cariaga, a interest at the legal rate from the filing of the complaint, and dismissing the
fourth-year medical student of the University of Santo Tomas, as one of its cross-claim against the Manila Railroad Company. From this decision the
passengers. At about 3:00 p.m., as the bus reached that part of the poblacion of Cariagas and the LTB appealed.
Bay, Laguna, where the national highway crossed a railroad track, it bumped
against the engine of a train then passing by with such terrific force that the first The Cariagas claim that the trial court erred: in awarding only P10,490.00 as
six wheels of the latter were derailed, the engine and the front part of the body of compensatory damages to Edgardo; in not awarding them actual and moral
the bus was wrecked, the driver of the bus died instantly, while many of its damages, and in not sentencing appellant LTB to pay attorney's fees.
passengers, Edgardo among them, were severely injured. Edgardo was first
On the other hand, the LTB's principal contention in this appeal is that the trial
confined at the San Pablo City Hospital from 5:00 p.m., June 18, 1952, to 8:25
court should have held that the collision was due to the fault of both the
a.m., June 20 of the same year when he was taken to the De los Santos Clinic,
locomotive driver and the bus driver and erred, as a consequence, in not holding
Quezon City. He left that clinic on October 14 to be transferred to the University
the Manila Railroad Company liable upon the cross-claim filed against it.
of Santo Tomas Hospital where he stayed up to November 15. On this last date
he was taken back to the De los Santos Clinic where he stayed until January 15, We shall first dispose of the appeal of the bus company. Its first contention is
1953. He was unconscious during the first 35 days after the accident; at the De that the driver of the train locomotive, like the bus driver, violated the law, first, in
los Santos Clinic Dr. Gustilo removed the fractured bones which lacerated the sounding the whistle only when the collision was about to take place instead of
right frontal lobe of his brain and at the University of Santo Tomas Hospital Dr. at a distance at least 300 meters from the crossing, and second, in not ringing
Gustilo performed another operation to cover a big hole on the right frontal part the locomotive bell at all. Both contentions are without merits.
of the head with a tantalum plate.
After considering the evidence presented by both parties the lower court
The LTB paid the sum of P16,964.45 for all the hospital, medical and expressly found:
miscellaneous expenses incurred from June 18, 1952 to April, 1953. From
January 15, 1953 up to April of the same year Edgardo stayed in a private . . . While the train was approximately 300 meters from the crossing, the
house in Quezon, City, the LTB having agreed to give him a subsistence engineer sounded two long and two short whistles and upon reaching a point
allowance of P10.00 daily during his convalescence, having spent in this about 100 meters from the highway, he sounded a long whistle which lasted up
to the time the train was about to cross it. The bus proceeded on its way without
slackening its speed and it bumped against the train engine, causing the first six From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that, as a
wheels of the latter to be derailed. result of the injuries suffered by Edgardo, his right forehead was fractured
necessitating the removal of practically all of the right frontal lobe of his brain.
xxx xxx xxx From the testimony of Dr. Jose A. Fernandez, a psychiatrist, it may be gathered
that, because of the physical injuries suffered by Edgardo, his mentality has
. . . that the train whistle had been sounded several times before it reached the
been so reduced that he can no longer finish his studies as a medical student;
crossing. All witnesses for the plaintiffs and the defendants are uniform in stating
that he has become completely misfit for any kind of work; that he can hardly
that they heard the train whistle sometime before the impact and considering
walk around without someone helping him, and has to use a brace on his left leg
that some of them were in the bus at the time, the driver thereof must have
and feet.
heard it because he was seated on the left front part of the bus and it was his
duty and concern to observe such fact in connection with the safe operation of Upon the whole evidence on the matter, the lower court found that the removal
the vehicle. The other L.T.B. bus which arrived ahead at the crossing, heeded of the right frontal lobe of the brain of Edgardo reduced his intelligence by about
the warning by stopping and allowing the train to pass and so nothing happened 50%; that due to the replacement of the right frontal bone of his head with a
to said vehicle. On the other hand, the driver of the bus No. 133 totally ignored tantalum plate Edgardo has to lead a quite and retired life because "if the
the whistle and noise produced by the approaching train and instead he tried to tantalum plate is pressed in or dented it would cause his death."
make the bus pass the crossing before the train by not stopping a few meters
from the railway track and in proceeding ahead. The impression one gathers from this evidence is that, as a result of the physical
injuries suffered by Edgardo Cariaga, he is now in a helpless condition, virtually
The above findings of the lower court are predicated mainly upon the testimony an invalid, both physically and mentally.
of Gregorio Ilusondo, a witness for the Manila Railroad Company.
Notwithstanding the efforts exerted by the LTB to assail his credibility, we do not Appellant LTB admits that under Art. 2201 of the Civil Code the damages for
find in the record any fact or circumstance sufficient to discredit his testimony. which the obligor, guilty of a breach of contract but who acted in good faith, is
We have, therefore, no other alternative but to accept the findings of the trial liable shall be those that are the natural and probable consequences of the
court to the effect, firstly, that the whistle of locomotive was sounded four times breach and which the parties had forseen or could have reasonably forseen at
— two long and two short — "as the train was approximately 300 meters from the time the obligation was constituted, provided such damages, according to
the crossing"; secondly, that another LTB bus which arrived at the crossing Art. 2199 of the same Code, have been duly proved. Upon this premise it claims
ahead of the one where Edgardo Cariaga was a passenger, paid heed to the that only the actual damages suffered by Edgardo Cariaga consisting of
warning and stopped before the "crossing", while — as the LTB itself now medical, hospital and other expenses in the total sum of P17,719.75 are within
admits (Brief p. 5) — the driver of the bus in question totally disregarded the this category. We are of the opinion, however, that the income which Edgardo
warning. Cariaga could earn if he should finish the medical course and pass the
corresponding board examinations must be deemed to be within the same
But to charge the MRR Co. with contributory negligence, the LTB claims that the category because they could have reasonably been foreseen by the parties at
engineer of the locomotive failed to ring the bell altogether, in violation of the the time he boarded the bus No. 133 owned and operated by the LTB. At that
section 91 of Article 1459, incorporated in the charter of the said MRR Co. This time he was already a fourth-year student in medicine in a reputable university.
contention — as is obvious — is the very foundation of the cross-claim While his scholastic may not be first rate (Exhibits 4, 4-A to 4-C), it is,
interposed by the LTB against its nevertheless, sufficient to justify the assumption that he could have passed the
co-defendant. The former, therefore, had the burden of proving it affirmatively board test in due time. As regards the income that he could possibly earn as a
because a violation of law is never presumed. The record discloses that this medical practitioner, it appears that, according to Dr. Amado Doria, a witness for
burden has not been satisfactorily discharged. the LTB, the amount of P300.00 could easily be expected as the minimum
monthly income of Edgardo had he finished his studies.
The Cariagas, as appellants, claim that the award of P10,000.00 compensatory
damages to Eduardo is inadequate considering the nature and the after effects Upon consideration of all the facts mentioned heretofore this Court is of the
of the physical injuries suffered by him. After a careful consideration of the opinion, and so holds, that the compensatory damages awarded to Edgardo
evidence on this point we find their contentions to be well-founded. Cariaga should be increased to P25,000.00.
Edgardo Cariaga's claim for moral damages and attorney's fees was denied by (4) Adultery or concubinage;
the trial court, the pertinent portion of its decision reading as follows:
(5) Illegal or arbitrary detention or arrest;
Plaintiffs' claim for moral damages cannot also be granted. Article 2219 of the
Civil Code enumerates the instances when moral damages may be covered and (6) Illegal search;
the case under consideration does not fall under any one of them. The present
(7) Libel, slander or any other form of defamation;
action cannot come under paragraph 2 of said article because it is not one of the
quasi-delict and cannot be considered as such because of the pre-existing (8) Malicious prosecution;
contractual relation between the Laguna Tayabas Bus Company and Edgardo
Cariaga. Neither could defendant Laguna Tayabas Bus Company be held liable (9) Acts mentioned in Article 309;
to pay moral damages to Edgardo Cariaga under Article 2220 of the Civil Code
on account of breach of its contract of carriage because said defendant did not (10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and
act fraudulently or in bad faith in connection therewith. Defendant Laguna 35.
Tayabas Bus Company had exercised due diligence in the selection and
xxx xxx xxx
supervision of its employees like the drivers of its buses in connection with the
discharge of their duties and so it must be considered an obligor in good faith. Of course enumerated in the just quoted Article 2219 only the first two may have
any bearing on the case at bar. We find, however, with regard to the first that the
The plaintiff Edgardo Cariaga is also not entitled to recover for attorney's fees,
defendant herein has not committed in connection with this case any "criminal
because this case does not fall under any of the instances enumerated in Article
offense resulting in physical injuries". The one that committed the offense
2208 of the Civil Code.
against the plaintiff is Gregorio Mira, and that is why he has been already
We agree with the trial court and, to the reason given above, we add those given prosecuted and punished therefor. Altho (a) owners and managers of an
by this Court in Cachero vs. Manila Yellow Taxicab Co., Inc.(101 Phil., 523, 530, establishment and enterprise are responsible for damages caused by their
533): employees in the service of the branches in which the latter are employed or on
the occasion of their functions; (b) employers are likewise liable for damages
A mere perusal of plaintiff's complaint will show that this action against the caused by their employees and household helpers acting within the scope of
defendant is predicated on an alleged breach of contract of carriage, i.e., the their assigned task (Article 218 of the Civil Code); and (c) employers and
failure of the defendants to bring him "safely and without mishaps" to his corporations engaged in any kind of industry are subsidiary civilly liable for
destination, and it is to be noted that the chauffeur of defendant's taxicab that felonies committed by their employees in the discharge of their duties (Art. 103,
plaintiff used when he received the injuries involved herein, Gregorio Mira, has Revised Penal Code), plaintiff herein does not maintain this action under the
not even made a party defendant to this case. provisions of any of the articles of the codes just mentioned and against all the
persons who might be liable for the damages caused, but as a result of an
Considering, therefore, the nature of plaintiff's action in this case, is he entitled admitted breach of contract of carriage and against the defendant employer
to compensation for moral damages? Article 2219 of the Civil Code says the alone. We, therefore, hold that the case at bar does not come within the
following: exception of paragraph 1, Article 2219 of the Civil Code.
Art. 2219. Moral damages may be recovered in the following and analogous The present complaint is not based either on a "quasi-delict causing physical
cases: injuries" (Art. 2219, par. 2 of the Civil Code). From the report of the Code
Commission on the new Civil Code. We copy the following:
(1) A criminal offense resulting in physical injuries;
A question of nomenclature confronted the Commission. After a careful
(2) Quasi-delicts causing physical injuries;
deliberation, it was agreed to use the term "quasi-delict" for those obligations
(3) Seduction, abduction, rape, or other lascivious acts; which do not arise from law, contracts, quasi-contracts, or criminal offenses.
They are known in Spanish legal treaties as "culpa aquiliana", "culpa-extra-
contractual" or "cuasi-delitos". The phrase "culpa-extra-contractual" or its In view of the foregoing the sum of P2,000 was awarded as moral damages by
translation "extra-contractual-fault" was eliminated because it did not exclude the trial court has to be eliminated, for under the law it is not a compensation
quasi-contractual or penal obligations. "Aquilian fault" might have been selected, awardable in a case like the one at bar.
but it was thought inadvisable to refer to so ancient a law as the "Lex Aquilia".
So "quasi-delict" was chosen, which more nearly corresponds to the Roman What has been said heretofore relative to the moral damages claimed by
Law classification of the obligations and is in harmony with the nature of this Edgardo Cariaga obviously applies with greater force to a similar claim (4th
kind of liability. assignment of error) made by his parents.

The Commission also thought of the possibility of adopting the word "tort" from The claim made by said spouses for actual and compensatory damages is
Anglo-American law. But "tort" under that system is much broader than the likewise without merits. As held by the trial court, in so far as the LTB is
Spanish-Philippine concept of obligations arising from non-contractual concerned, the present action is based upon a breach of contract of carriage to
negligence. "Tort" in Anglo-American jurisprudence includes not only which said spouses were not a party, and neither can they premise their claim
negligence, but also intentional criminal act, such as assault and battery, false upon the negligence or quasi-delict of the LTB for the simple reason that they
imprisonment and deceit. In the general plan of the Philippine legal system, were not themselves injured as a result of the collision between the LTB bus and
intentional and malicious acts are governed by the Penal Code, although certain train owned by the Manila Railroad Company.
exceptions are made in the Project. (Report of the Code Commission, pp. 161-
Wherefore, modified as above indicated, the appealed judgement is hereby
affirmed in all other respects, with costs against appellant LTB.
In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We established the
distinction between obligation derived from negligence and obligation as a result
of a breach of contract. Thus, we said:

It is important to note that the foundation of the legal liability of the defendant is
the contract of carriage, and that the obligation to respond for the damage which
plaintiff has suffered arises, if at all, from the breach of that contract by reason of
the failure of defendant to exercise due care in its performance. That is to say,
its liability is direct and immediate, differing essentially in the legal viewpoint
from the presumptive responsibility for the negligence of its servants, imposed
by Article 1903 of the Civil Code (Art. 2180 of the new), which can be rebutted
by proof of the exercise of due care in their selection of supervision. Article 1903
is not applicable to obligations arising EX CONTRACTU, but only to extra-
contractual obligations — or to use the technical form of expression, that article
relates only to CULPA AQUILIANA' and not to CULPA

The decisions in the cases of Castro vs. Acro Taxicab Co., (82 Phil., 359; 46 Off.
Gaz., No. 5, p. 2023); Lilius, et al. vs. Manila Railroad, 59 Phil., 758) and others,
wherein moral damages were awarded to the plaintiffs, are not applicable to the
case at bar because said decision were rendered before the effectivity of the
new Civil Code (August 30, 1950) and for the further reason that the complaints
filed therein were based on different causes of action.
[Actual or compensatory] such assistance, Policronio Quintos, Jr. died at 3:15 p.m. on the same day,
March 17, 1960, due to traumatic shock due to cerebral injuries.
G.R. No. L-25499 February 18, 1970
The private respondents, Trinidad, Prima and Julita, all surnamed Quintos, are
VILLA REY TRANSIT, INC., petitioner, the sisters and only surviving heirs of Policronio Quintos Jr., who died single,
vs. leaving no descendants nor ascendants. Said respondents herein brought this
THE COURT OF APPEALS, TRINIDAD A. QUINTOS, PRIMA A. QUINTOS, action against herein petitioner, Villa Rey Transit, Inc., as owner and operator of
AND JULITA A. QUINTOS, respondents. said passenger bus, bearing Plate No. TPU-14871-Bulacan, for breach of the
contract of carriage between said petitioner and the deceased Policronio
Laurea and Pison for petitioner.
Quintos, Jr., to recover the aggregate sum of P63,750.00 as damages, including
Bonifacio M. Abad, Jr. for respondents. attorney's fees. Said petitioner — defendant in the court of first instance —
contended that the mishap was due to a fortuitous event, but this pretense was
rejected by the trial court and the Court of Appeals, both of which found that the
accident and the death of Policronio had been due to the negligence of the bus
CONCEPCION, C.J.: driver, for whom petitioner was liable under its contract of carriage with the
deceased. In the language of His Honor, the trial Judge:
Petitioner, Villa Rey Transit, Inc., seeks the review by certiorari of a decision of
the Court of Appeals affirming that of the Court of First Instance of Pangasinan. The mishap was not the result of any unforeseeable fortuitous event or
The basic facts are set forth in said decision of the Court of Appeals, from which emergency but was the direct result of the negligence of the driver of the
We quote: defendant. The defendant must, therefore, respond for damages resulting from
its breach of contract for carriage. As the complaint alleged a total damage of
At about 1:30 in the morning of March 17, 1960, an Izuzu First Class passenger
only P63,750.00 although as elsewhere shown in this decision the damages for
bus owned and operated by the defendant, bearing Plate No. TPU-14871-
wake and burial expenses, loss of income, death of the victim, and attorneys fee
Bulacan and driven by Laureano Casim, left Lingayen, Pangasinan, for Manila.
reach the aggregate of P79,615.95, this Court finds it just that said damages be
Among its paying passengers was the deceased, Policronio Quintos, Jr. who sat
assessed at total of only P63,750.00 as prayed for in plaintiffs' amended
on the first seat, second row, right side of the bus. At about 4:55 o'clock a.m.
when the vehicle was nearing the northern approach of the Sadsaran Bridge on
the national highway in barrio Sto. Domingo, municipality of Minalin, Pampanga, The despositive part of the decision of the trial Court reads:
it frontally hit the rear side of a bullcart filled with hay. As a result the end of a
bamboo pole placed on top of the hayload and tied to the cart to hold it in place, WHEREFORE, judgment is hereby rendered ordering the defendant to pay to
hit the right side of the windshield of the bus. The protruding end of the bamboo the plaintiffs the amount of P63,750.00 as damages for breach of contract of
pole, about 8 feet long from the rear of the bullcart, penetrated through the glass carriage resulting from the death of Policronio Quintos, Jr.
windshield and landed on the face of Policronio Quintos, Jr. who, because of the
impact, fell from his seat and was sprawled on the floor. The pole landed on his which, as above indicated, was affirmed by the Court of Appeals. Hence, the
left eye and the bone of the left side of his face was fractured. He suffered other present petition for review on certiorari, filed by Villa Rey Transit, Inc.
multiple wounds and was rendered unconscious due, among other causes to
The only issue raised in this appeal is the amount of damages recoverable by
severe cerebral concussion. A La Mallorca passenger bus going in the opposite
private respondents herein. The determination of such amount depends, mainly
direction towards San Fernando, Pampanga, reached the scene of the mishap
upon two (2) factors, namely: (1) the number of years on the basis of which the
and it was stopped by Patrolman Felino Bacani of the municipal police force of
damages shall be computed and (2) the rate at which the losses sustained by
Minalin who, in the meantime, had gone to the scene to investigate. Patrolman
said respondents should be fixed.
Bacani placed Policronio Quintos, Jr. and three other injured men who rode on
the bullcart aboard the La Mallorca bus and brought them to the provincial The first factor was based by the trial court — the view of which was concurred
hospital of Pampanga at San Fernando for medical assistance. Notwithstanding in by the Court of Appeals — upon the life expectancy of Policronio Quintos, Jr.,
which was placed at 33-1/3 years — he being over 29 years of age (or around arbitrary standard, such as a four-year rule. In short, the Court of Appeals has
30 years for purposes of computation) at the time of his demise — by applying not erred in basing the computation of petitioner's liability upon the life
the formula (2/3 x [80-301 = life expectancy) adopted in the American expectancy of Policronio Quintos, Jr.
Expectancy Table of Mortality or the actuarial of Combined Experience Table of
Mortality. Upon the other hand, petitioner maintains that the lower courts had With respect to the rate at which the damages shall be computed, petitioner
erred in adopting said formula and in not acting in accordance with Alcantara v. impugns the decision appealed from upon the ground that the damages
Surro1 in which the damages were computed on a four (4) year basis, despite awarded therein will have to be paid now, whereas most of those sought to be
the fact that the victim therein was 39 years old, at the time of his death, and indemnified will be suffered years later. This argument is basically true, and this
had a life expectancy of 28.90 years. is, perhaps, one of the reasons why the Alcantara case points out the absence
of a "fixed basis" for the ascertainment of the damages recoverable in litigations
The case cited is not, however, controlling in the one at bar. In the Alcantara like the one at bar. Just the same, the force of the said argument of petitioner
case, none of the parties had questioned the propriety of the four-year basis herein is offset by the fact that, although payment of the award in the case at bar
adopted by the trial court in making its award of damages. Both parties will have to take place upon the finality of the decision therein, the liability of
appealed, but only as regards the amount thereof. The plaintiffs assailed the petitioner herein had been fixed at the rate only of P2,184.00 a year, which is
non-inclusion, in its computation, of the bonus that the corporation, which was the annual salary of Policronio Quintos, Jr. at the time of his death, as a young
the victim's employer, had awarded to deserving officers and employees, based "training assistant" in the Bacnotan Cement Industries, Inc. In other words,
upon the profits earned less than two (2) months before the accident that unlike the Alcantara case, on which petitioner relies, the lower courts did not
resulted in his death. The defendants, in turn, objected to the sum awarded for consider, in the present case, Policronio's potentiality and capacity to increase
the fourth year, which was treble that of the previous years, based upon the his future income. Indeed, upon the conclusion of his training period, he was
increases given, in that fourth year, to other employees of the same corporation. supposed to have a better job and be promoted from time to time, and, hence, to
Neither this objection nor said claim for inclusion of the bonus was sustained by earn more, if not — considering the growing importance of trade, commerce and
this Court. Accordingly, the same had not thereby laid down any rule on the industry and the concomitant rise in the income level of officers and employees
length of time to be used in the computation of damages. On the contrary, it therein — much more.
At this juncture, it should be noted, also, that We are mainly concerned with the
The determination of the indemnity to be awarded to the heirs of a deceased determination of the losses or damages sustained by the private respondents,
person has therefore no fixed basis. Much is left to the discretion of the court as dependents and intestate heirs of the deceased, and that said damages
considering the moral and material damages involved, and so it has been said consist, not of the full amount of his earnings, but of the support, they received
that "(t)here can be no exact or uniform rule for measuring the value of a human or would have received from him had he not died in consequence of the
life and the measure of damages cannot be arrived at by precise mathematical negligence of petitioner's agent. In fixing the amount of that support, We must
calculation, but the amount recoverable depends on the particular facts and reckon with the "necessary expenses of his own living", which should be
circumstances of each case. The life expectancy of the deceased or of the deducted from his earnings. Thus, it has been consistently held that earning
beneficiary, whichever is shorter, is an important factor.' (25 C.J.S. 1241.) Other capacity, as an element of damages to one's estate for his death by wrongful act
factors that are usually considered are: (1) pecuniary loss to plaintiff or is necessarily his net earning capacity or his capacity to acquire money, "less
beneficiary (25 C.J.S. 1243-1250) ; (2) loss of support (25 C.J.S., 1250-1251); the necessary expense for his own living.3 Stated otherwise, the amount
(3) loss of service (25 C.J.S. 1251-1254); (4) loss of society (25 C.J.S. 1254- recoverable is not loss of the entire earning, but rather the loss of that portion of
1255); (5) mental suffering of beneficiaries (25 C.J.S., 1258-1259) ; and (6) the earnings which the beneficiary would have received. 4 In other words, only
medical and funeral expenses (26 C.J.S., 1254-1260)."2 net earnings, not gross earning, are to be considered5 that is, the total of the
earnings less expenses necessary in the creation of such earnings or income 6
Thus, life expectancy is, not only relevant, but, also, an important element in and less living and other incidental expenses.7
fixing the amount recoverable by private respondents herein. Although it is not
the sole element determinative of said amount, no cogent reason has been All things considered, We are of the opinion that it is fair and reasonable to fix
given to warrant its disregard and the adoption, in the case at bar, of a purely the deductible living and other expenses of the deceased at the sum of
P1,184.00 a year, or about P100.00 a month, and that, consequently, the loss
sustained by his sisters may be roughly estimated at P1,000.00 a year or
P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of
P33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts.
104 and 107 of the Revised Penal Code, in relation to Article 2206 of our Civil
Code, as construed and applied by this Court;8 (b) P1,727.95, actually spent by
private respondents for medical and burial expenses; and (c) attorney's fee,
which was fixed by the trial court, at P500.00, but which, in view of the appeal
taken by petitioner herein, first to the Court of Appeals and later to this Supreme
Court, should be increased to P2,500.00. In other words, the amount adjudged
in the decision appealed from should be reduced to the aggregate sum of
P49,561.28, with interest thereon, at the legal rate, from December 29, 1961,
date of the promulgation of the decision of the trial court.

Thus modified, said decision and that of the Court of Appeals are hereby
affirmed, in all other respects, with costs against petitioner, Villa Rey Transit,
Inc. It is so ordered.
[Actual or compensatory] In its answer, PAL denied that the accident was caused by its negligence or that
of any of the plane's flight crew, and that, moreover, the damages sought were
G.R. No. L-54470 May 8, 1990 excessive and speculative.

PHILIPPINE AIRLINES, INC., petitioner, On November 23, 1964, the trial court issued a pre-trial order requiring the
vs. parties to file on or before January 30, 1965 a stipulation of facts, or a negative
HON. COURT OF APPEALS and NATIVIDAD VDA. DE PADILLA, manifestation in case they failed to submit a stipulation.
substituted by her legal heirs, namely: AUGUSTO A. PADILLA, ALBERTO
A. PADILLA, CRESENCIO R. ABES (representing the deceased Isabel On June 8, 1965, the parties submitted a partial stipulation of facts providing as
Padilla Abes) MIGUEL A. PADILLA and RAMON A. PADILLA, respondents. follows:

Siguion Reyna, Montecillo & Ongsiako for petitioner. 1.

Ambrosio Padilla, Mempin & Reyes Law Offices for private respondents. Plaintiff is the widow of the late Alberto R. Padilla Filipino, of legal age, and a
resident of and with postal address at No. 970 (formerly No. 247) Gral. Solano
St., San Miguel, Manila, while defendant Philippine Air Lines, Inc. is a
corporation duly organized, registered and existing under and by virtue of the
laws of the Philippines, engaged, as a common carrier in the business of
The only legal issue raised by the petitioner in this thirty-year-old case is carrying or transporting by air passengers and goods, offering its services to the
whether the indemnity for the death of private respondent's son, the late Nicanor public as such for compensation, with offices at Makati Bldg., Makati, Rizal.
A. Padilla should be computed on the basis of his life expectancy, as the trial
court and the Court of Appeals did, rather than the life expectancy of private
respondent, his only legal heir, as the petitioner contends. Nicanor A. Padilla was born on January 10, 1931. He was a son by lawful
marriage of plaintiff and Alberto R. Padilla, who died on September 2, 1948.
On November 23, 1960, at 5:30 P.M., Starlight Flight No. 26 of the Philippine Air
Lines (hereafter PAL) took off from the Manduriao Airport in Iloilo, on its way to 3.
Manila, with 33 persons on board, including the plane's complement. The plane
did not reach its destination but crashed on Mt. Baco, Mindoro, one hour and Nicanor A. Padilla finished the elementary grades in 1943, high school in 1947,
fifteen minutes after takeoff .The plane was Identified as PI-C133, a DC-3 type graduated the Reserve Officer's Course (Infantry Basic Course) Armed Forces
aircraft manufactured in 1942 and acquired by PAL in 1948. It had flown almost of the Philippines in 1949, and graduated with the degree of Bachelor of
18,000 hours at the time of its illfated flight. It had been certified as airworthy by Literature in 1951 and the degree of Bachelor of Laws in 1954, all in Ateneo de
the Civil Aeronautics Administration. Manila.

Among the fatalities was Nicanor Padilla who was a passenger on the star 4.
crossed flight. He was 29 years old, single. His mother, Natividad A. Vda. de
Padilla, was his only legal heir. He was admitted by the Supreme Court of the Philippines to practice law on
January 28, 1955, and from January 1958, to the time of his death on November
As a result of her son's death, Mrs. Padilla filed a complaint (which was 23, 1960, he was associated with the law offices of Senator Ambrosio Padilla,
amended twice) against PAL, demanding payment of P600,000 as actual and brother of his father, Alberto R. Padilla.
compensatory damages, plus exemplary damages and P60,000 as attorney's
fees. 5.

At the time of his death, he was the President and General Manager of the
Padilla Shipping Co., Inc. He was also Vice-President and Treasurer of the
Allied Overseas Trading Co., Inc.
6. 11.

He was a member of the Board of Directors of the Junior Chamber of Other facts on which the parties cannot agree will be subject to proof at the trial.
Commerce (Jaycees) International and Chairman of its Committee on (pp. 34-39, Record on Appeal; p. 11 7, Rollo.)
Governmental Affairs for the term 1960-1961. This Committee on Governmental
Affairs published a pamphlet entitled "Good Government is our Business," for On January 15, 1966, the parties submitted another partial stipulation of facts:
which the deceased was named "Jaycee of the Month of January 1960."
That in the book written by Salvador B. Salvosa, M.S. University of Michigan and
Nicanor A. Padilla, while travelling and being transported and flown as a paid member of the Actuarial Society of the Philippine, entitled; "Filipino Experience
passenger on one [of] defendant's aircraft, a DC-3 with registry No. PI-C133, on Mortality Table," the complete life expectancy of Filipinos appear on page 3
"Star Light Flight" No. 26 bound for Manila from the City of Iloilo on November thereof, a photostat of which is attached hereto as Exhibit "A."
23, 1960, was killed when said plane crashed in the area of Mount Baco,
Oriental Mindoro
That in said Exhibit "A", the columns under the heading "Age x," refers to the
age of the individual, and the columns "oe x" refers to the corresponding number
Nicanor A. Padilla died single, leaving as his nearest of kin and sole heiress to of years the individuals expected to live. Thus, under the column "Age x," a
his estate his mother the plaintiff herein with whom he was residing at the time person aged 29, the corresponding life expectancy of said person under column
of his death at 970 Gral. Solano St., Manila. "oex" is "42.60" years; and under said column "Age x" a person aged 60,
corresponding life expec tancy of said person under column 'oex' is "17.90"
9. years;

The aircraft (PI-C133) that crashed on Mt. Baco, Oriental Mindoro on November 3.
23, 1960, was a twin-engine passenger plane of the Philippine Air Lines of the
DC-3 type. It was manufactured by Douglas Aircraft Corporation of the United That Salvador B. Salvosa's "Filipino Experience Mortality Table," including the
States for the U.S. Army and was purchased from the latter by the Commercial table of life expectancy are used by the Philippine International life Insurance
Air lines, Inc., on September 25, 1946. The defendant Philippine Air Lines Co., the Sterling Life Insurance Co., the Cardinal Life Insurance Co., and Star
acquired the plane from the Commercial Air Lines, Inc., on October 15, 1948. life Insurance Co., and that the same has been approved by the Insurance
The aircraft was registered by Philippine Air Lines with the Civil Aeronautics Commissioner for the use of life insurance companies doing business in the
Administration as PI-C142 on May 10, 1949. On October 15, 1953, PI-C142 met Philippines as shown by a certificate issued by said Commissioner which is
with a non-fatal accident at Piat, Tuguegarao, Cagayan. PAL requested the Civil attached hereto as Exhibit "B";
Aeronautics Administration for a change in the identification mark. Said request
was granted and the registration number was changed from PI-C142 to PI-C133
on July 29, 1954. As [ofl November 22, 1960, the day before the fatal crash on That the book of Nelson and Warren, Consulting Actuaries of St. Luis and
Mt. Baco, PI-C133 had a total flying time of 17,996:33 hours. Kansas cities, Missouri, entitled: "Principal Mortality Tables", contains a table of
comparison of complete life expectancy based on principal mortality tables used
by life insurance companies, a photostat of which is likewise attached hereto as
PI-C133 was issued a certificate of airworthiness by the Civil Aeronautics Exhibits "C", "C-l", "C-2", and "C-3";
Administration on September 13, 1960 which was to expire on September 12,
1961; a copy of which is attached hereto as Exhibit "I" and made a part of this
stipulation. That of the life expectancy based on the different systems mentioned in said
Exhibits "C", "C-1", "C-2" and "C-3", the following are also used in the
Philippines for life insurance purposes: (a) the American Experience appearing d) PI.-CAA Rating Grant to operate
in Exhibit "B", 'fifth columns on both pages, the first column corresponding to the
age of the individual (pages 12 and 13 of the book); (b) the Standard Industrial, a repair station with ratings on
appearing in the same Exhibit "B", "sixth column on both pages (pages 12 and
(i) Aircraft of Composite Construction;
13 of the book); and (c) the 1941 Commissioner Standard Ordinary, or CSO
1941 for short, appearing in Exhibit "B-1", third column, on both pages (pages (ii) Aircraft of all Metal Construction;
14 and 15 of the book).
(iii) Aircraft Instrument. 4
2. Defendant maintained and repaired aircrafts of the U.S. Air Force, U.S. Navy
That the materiality and applicability [sic] of the life expectancy tables shown in and commercial carriers like PANAM Northwest Airways, KLM and other foreign
Exhibit A or Exhibits "C", "C-1", "C-2" and "C-3" are left to the judgment of the airlines.
Honorable Court. (pp. 39-42, Record on Appeal; p. 117, Rollo.)
3. Also in 1960 defendant was maintaining and following a CAA approved
On March 19, 1970, a third joint partial stipulation of facts was submitted by the system of aircraft maintenance control using worksheets and work card which
parties to the trial court which reads, thus: record the specific job on any particular aircraft. They are:
JOINT FIRST PARTIAL STIPULATION OF FACTS a) Preflight inspections consisting of the —
Plaintiff and defendant through their respective counsel, respectfully submit the (i) Through Check: — the visual inspection of an aircraft prior to flight and
following partial stipulation of facts: performed in stations where maintenance men are assigned.
1. Defendant in November, 1960 and even before was authorized and rated to (ii) Terminating Check: — the visual inspection of the aircraft performed in
repair aircrafts of U.S. and foreign registries and as such holds the following: stations were aircraft terminated a flight and where maintenance men are
Description Exhibit
(iii) After Maintenance Check: — the visual inspection of an aircraft preparatory
a) US FAA Air Agency 1
to any flight following the completion of any check from Check No. 1 to Cheek
Certificate No. 6, to wit:

b) US FAA Repair Station (a) Check No. 1 known as daily inspection check;

Operations Specifications (b) Check No. 2 which is accomplished every 125 hours;

(2 pages) PI- 2 and 2-A (c) Check No. 3 which is accomplished every 250 flying hours;

c) CAA Rating Grant to operate (d) Check No. 4 which is accomplished every 500 flying hours;

Repair Station with ratings on (e) Check No. 5 which is accomplished every 1,250 flying hours;

[sic] (i) Aircraft Metal (f) Check No. 6 which is a series broken down into 6- A, 6-B, 6-C, 6-D, 6-E and
propeller Hubs Overhaul Shop,
4. The Quality Control Division is the custodian of all worksheets for the checks
(ii) Aircraft Engine Overhaul Shop. 3 performed and under PI-CAA regulations, is required to keep the records for at
least 90 days.
5. The forms used and accomplished for the various checks were: k) Check No. 6-F consisting of 16,16-A to

Description Exhibit 118 work control cards 16-(M)

a) Preflight check sheet, The parties reserve their right to agree to additional stipulation of facts and/or to
adduce evidence on other matters not covered by this stipulation.
including DC-3C Daily
All exhibits mentioned and identified are attached to this stipulation. (pp. 42-46,
Airplane and Engine Record on Appeal; p. 117, Rollo.)

Routine and Cleaning Routine; 5,6 & 6-A During the hearing on September 4, 1972, the parties stipulated that they were
reproducing the testimonial and documentary evidence presented in Civil Cases
b) Check No. 2, consisting of
Nos. 5728 and 2790 of the Court of First Instance of Iloilo, arising out of the
37 work control cards; 7-A to 7-KK same accident. Certified copy of said transcript of stenographic notes were then
submitted to the trial court.
c) Check No. 3 consisting of
A fourth partial stipulation of facts was submitted by the parties, reading as
49 work control cards; 8, 8-A to 8-XX follows:

d) Check No. 4 consisting of PARTIAL STIPULATION OF FACTS

a work control card; 9, 9-A to 9-F Plaintiff and defendant respectfully submit the following partial stipulation of
e) Check No. 5 consisting of 00, 10-A to
1. For the convenience and brevity of these proceedings, considering that
9 work control cards; 10-H defendant's evidence on the basic issues of fortuitous event and extraordinary
diligence of the carrier consists of the witnesses and documents presented in
f) Check No. 6-A consisting of 11, 11-A to
Civil Case No. 5720 of the Court of First Instance of Iloilo entitled "Pedro R.
112 work control cards; 11-(G) Davila vs. Preciosa C. Tirol," now pending appeal before the Supreme Court in
G.R. No. L-28512, defendant has proposed to reproduce in this case the
g) Check No. 6-B consisting of 12, 12-A to testimonies of same witnesses and documentary evidence Identified and
marked in the course of the same proceedings, as reflected in the corresponding
114 work control cards; 12-(J) transcript of stenographic notes, to wit:

h) Check No. 6-C consisting of 13, 13-A to Transcript of

117 work control cards 13-(I) Witnesses Stenographic Notes At Pages Exhibit

i) Check No. 6-D consisting of 14,14-A to a Mario Rodriguez October 30, 1962 1 - 67 37

110 work control cards; 14-(E) October 31, 1962 67 - 153 38

j) Check No. 6-E consisting of 15,15-A to January 7, 1963 17 - 74 39

120 work control cards; 15-(E) October 14, 1963 6 - 11 40

b. Pedro N. Mallari March 19, 1963 17 - 39) 5. Defendant reserves its right to present evidence on the question of damages.

c. Arturo Camatoy March 19, 1963 39 - 75) 41 6. Plaintiff reserves her right to present such further evidence as she may deem
proper in rebuttal. (pp. 47-50, Record on Appeal; p. 117, Rollo.)
d. Ponciano Saldaña March 19, 1963 75 - 88)
In addition to the stipulations of facts, private respondent Padilla testified that
e. Melecio Joson March 20, 1963 91 - 161) 42 her son, Nicanor Padilla, prior to his death, was 29 years old, single, in good
health, President and General Manager of Padilla Shipping Company at Iloilo
f. Alfredo Subesa March 20, 1963 162 - 166)
City, and a legal assistant of the Padilla Law Office; that upon learning of the
g. Eduardo Estrella October 14, 1963 11 - 27) death of her son in the plane crash, she suffered shock and mental anguish,
because her son who was still single was living with her; and that Nicanor had a
h. Vicente Sison October 14, 1963 27 - 74) life insurance of P20,000, the proceeds of which were paid to his sister.

i. Felipe Paculaba October 15, 1963 4 - 15 Eduardo Mate, manager of the Allied Overseas Trading Company, testified that
the deceased, Nicanor Padilla, was one of the incorporators of the company and
j. Antonio Lopez October 15, 1963 15 - 25) 43 also its vice-president and treasurer, receiving a monthly salary of P455.

k. Isaac Lamela October 15, 1963 26 - 55) Isaac M. Reyes, auditor of the Padilla Shipping Company, declared that the
deceased was the President and General of the firm and received a salary of
l. Ramon Pedrosa December 19, 1963 6 - 83 44
P1,500 monthly.
m. Cesar Mijares December 20, 1963 15 - 89 45
The trial court in its decision stated that on March 19, 1970, it was manifested in
n. Jaime Manzano February 6, 1964 3 - 15) 46 court that "the parties agreed that they will abide with whatever decision the
Supreme Court may have in similar cases involving the same airplane crash
o. Offer of documen- accident then pending before other courts pending decision in Supreme Court"
(p. 51, Rec. on Appeal; p. 117, Rollo)
tary evidence February 6, 1964 18 - 76)
On August 31, 1973, the trial court promulgated a decision, the dispositive
2. The transcript of stenographic notes are attached hereto and marked as portion of which reads:
above set forth.
WHEREFORE, judgment is hereby rendered ordering the defendant Philippine
3. If aforenamed witnesses were called to testify in this case, they would give Air Lines, Inc. to pay the plaintiff Natividad A. Vda. de Padilla the sum of
the same testimony as shown in the afore-mentioned transcript of stenographic P477,000.00 as award for the expected income of the deceased Nicanor;
notes on direct examination, cross-examination and re-direct examination, as P10,000.00 as moral damages; P10,000.00 as attorney's fees; and to pay the
the case may be plaintiffs counsel hereby adopting the manifestations, costs. (pp. 59-60, Record on Appeal; p. 117, Rollo.)
objections, cross and recross examination by the plaintiff's counsels in Davila
vs. PAL, supra and so far as the joint hearings held on December 20, 1963 and On Appeal to the Court of Appeals (CA-G.R. No. 56079-R) dated July 17, 1980,
February 6, 1964, also of plaintiff's counsels in Abeto, et al. vs. PAL, Civil Case the decision of the trial court was affirmed in toto.
No. 5790, also of the Court of First Instance of Iloilo.
As pointed out at the outset, the lone issue is whether or not the respondent
4. All the documentary evidence marked in the course of the hearings shown in court erred in computing the awarded indemnity on the basis of the life
the transcripts of stenographic notes attached hereto have already been marked expectancy of the late Nicanor A. Padilla rather than on the life expectancy of
correspondingly before the Commissioner of this Honorable Court on a hearing private respondent, and thus erred in awarding what appears to the petitioner as
held on May 24, 1968 with the same exhibit identification. the excessive sum of P477,000 as indemnity for loss of earnings.
Petitioner relies on "the principle of law generally recognized and applied by the pains and occasional feelings of tiredness. It is reasonable to make an
courts in the United States" that "the controlling element in determining loss of allowance for these circumstances and consider, for purposes of this case, a
earnings arising from death is, as established by authorities, the life expectancy reduction of his life expectancy to 25 years.
of the deceased or of the beneficiary, whichever is shorter (p. 19, Brief for the
Defendant-Appellant; p. 119, Rollo). xxx xxx xxx

However, resort to foreign jurisprudence would be proper only if no law or Considering the fact that the deceased was getting his income from three (3)
jurisprudence is available locally to settle a controversy. Even in the absence of different sources, namely, from managing a radio station, from law practice and
local statute and case law, foreign jurisprudence is only persuasive. from farming, the expenses incidental to the generation of such income were
necessarily more than if he had only one source. Together with his living
For the settlement of the issue at hand, there are enough applicable local laws expenses, a deduction of P600.00 a month, or P7,200.00 a year, seems to Us
and jurisprudence. Under Article 1764 and Article 2206(1) of the Civil Code, the reasonable, leaving a net yearly income of P7,800.00. This amount, multiplied
award of damages for death is computed on the basis of the life expectancy of by 25 years, or P195,000.00 is the amount which should be awarded to the
the deceased, not of his beneficiary. The articles provide: plaintiffs in this particular respect. (pp. 504-505, Rollo.)

Art. 1764. Damages in cases comprised in this Section shall be awarded in The petitioner's recourse to our decision in Alcantara vs. Surro, 93 Phil. 472,
accordance with Title XVIII of this Book, concerning Damages. Article 2206 shall undermines instead of supporting its stand here, for the indemnity in that case
also apply to the death of a passenger caused by the breach of contract by a was also based on the life expectancy of the deceased and not of his
common carrier. beneficiaries.

Art. 2206. The amount of damages for death caused by a crime or quasi- delict The petitioner's contention that actual damages under Article 2206 of the Civil
shall be at least three thousand pesos, even though there may have been Code must be proven by clear and satisfactory evidence is correct, but its
mitigating circumstances. In addition: perception that such evidence was not presented in this case, is error.

(1) The defendant shall be liable for the loss of the earning capacity of the The witnesses Mate and Reyes, who were respectively the manager and auditor
deceased, and the indemnity shall be paid to the heirs of the latter; such of Allied Overseas Trading Company and Padilla Shipping Company, were
indemnity shall in every case be assessed and awarded by the court, unless the competent to testify on matters within their personal knowledge because of their
deceased on account of permanent physical disability not caused by the positions, such as the income and salary of the deceased, Nicanor A. Padilla
defendant, had no earning capacity at the time of his death; . . . (Emphasis (Sec. 30, Rule 130, Rules of Court). As observed by the Court of Appeals, since
supplied.) they were cross-examined by petitioner's counsel, any objections to their
competence and the admissibility of their testimonies, were deemed waived.
In the case of Davila vs. PAL, 49 SCRA 497 which involved the same tragic The payrolls of the companies and the decedent's income tax returns could, it is
plane crash, this Court determined not only PALs liability for negligence or true, have constituted the best evidence of his salaries, but there is no rule
breach of contract, but also the manner of computing the damages due the disqualifying competent officers of the corporation from testifying on the
plaintiff therein which it based on the life expectancy of the deceased, Pedro compensation of the deceased as an officer of the same corporation, and in any
Davila, Jr. This Court held thus: event, no timely objection was made to their testimonies.

The deceased, Pedro Davila, Jr., was single and 30 years of age when he died. Following the procedure used by the Supreme Court in the case of Davila vs.
At that age one's normal life expectancy is 33-1/3 years, according to the PAL, 49 SCRA 497, the trial court determined the victims gross annual income
formula (2/3 x [80-30]) adopted by this Court in the case of Villa Rey Transit, Inc. to be P23,100 based on his yearly salaries of P18,000 from the Padilla Shipping
vs. Court of Appeals on the basis of the American Expectancy Table of Mortality Company and P5,100 from the Allied Overseas Trading Corporation.
or the Actuarial of Combined Experience Table of Mortality. However, although Considering that he was single, the court deducted P9,200 as yearly living
the deceased was in relatively good health, his medical history shows that he expenses, resulting in a net income of P13,900 (not P15,900 as erroneously
had complained of and been treated for such ailments as backaches, chest stated in the decision). Since Nicanor Padilla was only 29 years old and in good
health, the trial court allowed him a life expectancy of 30 years. Multiplying his
annual net income of P13,900 by his life expectancy of 30 years, the product is
P417,000 (not P477,000) which is the amount of death indemnity due his mother
and only forced heir (p. 58, Record on Appeal; p. 117, Rollo).

While as a general rule, an appellee who has not appealed is not entitled to
affirmative relief other than the ones granted in the decision of the court below
(Aparri vs. CA, 13 SCRA 611; Dy vs. Kuizon, 113 Phil. 592; Borromeo vs.
Zaballero, 109 Phil. 332), we nevertheless find merit in the private respondent's
plea for relief for the long delay this case has suffered on account of the
petitioner's multiple appeals. Indeed, because of the 16 year delay in the
disposition of this case, the private respondent herself has already joined her
son in the Great Beyond without being able to receive the indemnity she well
deserved. Considering how inflation has depleted the value of the judgment in
her favor, in the interest of justice, the petitioner should pay legal rate of interest
on the indemnity due her. The failure of the trial court to award such interest
amounts to a "plain error" which we may rectify on appeal although it was not
specified in the appellee's brief (Sec. 7, Rule 51, Rules of Court).

WHEREFORE, the petition is dismissed. The decision of the trial court is

affirmed with modification. The petitioner is ordered to pay the private
respondent or her heirs death indemnity in the sum of P417,000 (not P477,000),
with legal rate of interest of 6% per annum from the date of the judgment on
August 31, 1973, until it is fully paid. Costs against the petitioner.
[Actual or compensatory] 8, 1997, counsel of petitioner was absent despite due notice and was deemed to
have waived right to cross-examine respondent Rosalito.[15]
[G.R. No. 159636. November 25, 2004]
Petitioners motion to reset the presentation of its evidence to March 25,
VICTORY LINER, INC., petitioner, vs. ROSALITO GAMMAD, APRIL 1998[16] was granted. However, on March 24, 1998, the counsel of petitioner
ROSSAN P. GAMMAD, ROI ROZANO P. GAMMAD and DIANA FRANCES P. sent the court a telegram[17] requesting postponement but the telegram was
GAMMAD, respondents. received by the trial court on March 25, 1998, after it had issued an order
considering the case submitted for decision for failure of petitioner and counsel
to appear.[18]
On November 6, 1998, the trial court rendered its decision in favor of
Assailed in this petition for review on certiorari is the April 11, 2003 decision[1] of respondents, the dispositive portion of which reads:
the Court of Appeals in CA-G.R. CV No. 63290 which affirmed with modification
WHEREFORE, premises considered and in the interest of justice, judgment is
the November 6, 1998 decision[2] of the Regional Trial Court of Tuguegarao,
hereby rendered in favor of the plaintiffs and against the defendant Victory Liner,
Cagayan, Branch 5 finding petitioner Victory Liner, Inc. liable for breach of
Incorporated, ordering the latter to pay the following:
contract of carriage in Civil Case No. 5023.
1. Actual Damages -------------------- P 122,000.00
The facts as testified by respondent Rosalito Gammad show that on March 14,
1996, his wife Marie Grace Pagulayan-Gammad,[3] was on board an air- 2. Death Indemnity --------------------- 50,000.00
conditioned Victory Liner bus bound for Tuguegarao, Cagayan from Manila. At
about 3:00 a.m., the bus while running at a high speed fell on a ravine 3. Exemplary and Moral Damages----- 400,000.00
somewhere in Barangay Baliling, Sta. Fe, Nueva Vizcaya, which resulted in the
death of Marie Grace and physical injuries to other passengers.[4] 4. Compensatory Damages ---------- 1,500,000.00

On May 14, 1996, respondent heirs of the deceased filed a complaint[5] for 5. Attorneys Fees ------------ 10% of the total amount granted
damages arising from culpa contractual against petitioner. In its answer,[6] the
6. Cost of the Suit.
petitioner claimed that the incident was purely accidental and that it has always
exercised extraordinary diligence in its 50 years of operation. SO ORDERED.[19]
After several re-settings,[7] pre-trial was set on April 10, 1997.[8] For failure to On appeal by petitioner, the Court of Appeals affirmed the decision of the trial
appear on the said date, petitioner was declared as in default.[9] However, on court with modification as follows:
petitioners motion[10] to lift the order of default, the same was granted by the
trial court.[11] [T]he Decision dated 06 November 1998 is hereby MODIFIED to reflect that the
following are hereby adjudged in favor of plaintiffs-appellees:
At the pre-trial on May 6, 1997, petitioner did not want to admit the proposed
stipulation that the deceased was a passenger of the Victory Liner Bus which fell 1. Actual Damages in the amount of P88,270.00;
on the ravine and that she was issued Passenger Ticket No. 977785.
Respondents, for their part, did not accept petitioners proposal to pay 2. Compensatory Damages in the amount of P1,135,536,10;
3. Moral and Exemplary Damages in the amount of P400,000.00; and
After respondent Rosalito Gammad completed his direct testimony, cross-
4. Attorneys fees equivalent to 10% of the sum of the actual, compensatory,
examination was scheduled for November 17, 1997[13] but moved to December
moral, and exemplary damages herein adjudged.
8, 1997,[14] because the parties and the counsel failed to appear. On December
The court a quos judgment of the cost of the suit against defendant-appellant is setting aside of the order of default. In fact, petitioner was represented by Atty.
hereby AFFIRMED. Paguirigan at the pre-trial who proposed settlement for P50,000.00. Although
Atty. Paguirigan failed to file motions for reconsideration of the orders declaring
SO ORDERED.[20] petitioner to have waived the right to cross-examine respondents witness and to
present evidence, he nevertheless, filed a timely appeal with the Court of
Represented by a new counsel, petitioner on May 21, 2003 filed a motion for
Appeals assailing the decision of the trial court. Hence, petitioners claim that it
reconsideration praying that the case be remanded to the trial court for cross-
was denied due process lacks basis.
examination of respondents witness and for the presentation of its evidence; or
in the alternative, dismiss the respondents complaint.[21] Invoking APEX Mining, Petitioner too is not entirely blameless. Prior to the issuance of the order
Inc. v. Court of Appeals,[22] petitioner argues, inter alia, that the decision of the declaring it as in default for not appearing at the pre-trial, three notices (dated
trial court should be set aside because the negligence of its former counsel, October 23, 1996,[25] January 30, 1997,[26] and March 26, 1997,[27]) requiring
Atty. Antonio B. Paguirigan, in failing to appear at the scheduled hearings and attendance at the pre-trial were sent and duly received by petitioner. However, it
move for reconsideration of the orders declaring petitioner to have waived the was only on April 27, 1997, after the issuance of the April 10, 1997 order of
right to cross-examine respondents witness and right to present evidence, default for failure to appear at the pre-trial when petitioner, through its finance
deprived petitioner of its day in court. and administrative manager, executed a special power of attorney[28]
authorizing Atty. Paguirigan or any member of his law firm to represent petitioner
On August 21, 2003, the Court of Appeals denied petitioners motion for
at the pre-trial. Petitioner is guilty, at the least, of contributory negligence and
fault cannot be imputed solely on previous counsel.
Hence, this petition for review principally based on the fact that the mistake or
The case of APEX Mining, Inc., invoked by petitioner is not on all fours with the
gross negligence of its counsel deprived petitioner of due process of law.
case at bar. In APEX, the negligent counsel not only allowed the adverse
Petitioner also argues that the trial courts award of damages were without basis
decision against his client to become final and executory, but deliberately
and should be deleted.
misrepresented in the progress report that the case was still pending with the
The issues for resolution are: (1) whether petitioners counsel was guilty of gross Court of Appeals when the same was dismissed 16 months ago.[29] These
negligence; (2) whether petitioner should be held liable for breach of contract of circumstances are absent in this case because Atty. Paguirigan timely filed an
carriage; and (3) whether the award of damages was proper. appeal from the decision of the trial court with the Court of Appeals.

It is settled that the negligence of counsel binds the client. This is based on the In Gold Line Transit, Inc. v. Ramos,[30] the Court was similarly confronted with
rule that any act performed by a counsel within the scope of his general or the issue of whether or not the client should bear the adverse consequences of
implied authority is regarded as an act of his client. Consequently, the mistake its counsels negligence. In that case, Gold Line Transit, Inc. (Gold Line) and its
or negligence of counsel may result in the rendition of an unfavorable judgment lawyer failed to appear at the pre-trial despite notice and was declared as in
against the client. However, the application of the general rule to a given case default. After the plaintiffs presentation of evidence ex parte, the trial court
should be looked into and adopted according to the surrounding circumstances rendered decision ordering Gold Line to pay damages to the heirs of its
obtaining. Thus, exceptions to the foregoing have been recognized by the court deceased passenger. The decision became final and executory because
in cases where reckless or gross negligence of counsel deprives the client of counsel of Gold Line did not file any appeal. Finding that Goldline was not
due process of law, or when its application will result in outright deprivation of denied due process of law and is thus bound by the negligence of its lawyer, the
the clients liberty or property or where the interests of justice so require, and Court held as follows
accord relief to the client who suffered by reason of the lawyers gross or
This leads us to the question of whether the negligence of counsel was so gross
palpable mistake or negligence.[24]
and reckless that petitioner was deprived of its right to due process of law. We
The exceptions, however, are not present in this case. The record shows that do not believe so. It cannot be denied that the requirements of due process were
Atty. Paguirigan filed an Answer and Pre-trial Brief for petitioner. Although observed in the instant case. Petitioner was never deprived of its day in court, as
initially declared as in default, Atty. Paguirigan successfully moved for the in fact it was afforded every opportunity to be heard. Thus, it is of record that
notices were sent to petitioner and that its counsel was able to file a motion to
dismiss the complaint, an answer to the complaint, and even a pre-trial brief. Viewed vis--vis the foregoing jurisprudence, to sustain petitioners argument that
What was irretrievably lost by petitioner was its opportunity to participate in the it was denied due process of law due to negligence of its counsel would set a
trial of the case and to adduce evidence in its behalf because of negligence. dangerous precedent. It would enable every party to render inutile any adverse
order or decision through the simple expedient of alleging gross negligence on
In the application of the principle of due process, what is sought to be the part of its counsel. The Court will not countenance such a farce which
safeguarded against is not the lack of previous notice but the denial of the contradicts long-settled doctrines of trial and procedure.[33]
opportunity to be heard. The question is not whether petitioner succeeded in
defending its rights and interests, but simply, whether it had the opportunity to Anent the second issue, petitioner was correctly found liable for breach of
present its side of the controversy. Verily, as petitioner retained the services of contract of carriage. A common carrier is bound to carry its passengers safely as
counsel of its choice, it should, as far as this suit is concerned, bear the far as human care and foresight can provide, using the utmost diligence of very
consequences of its choice of a faulty option. Its plea that it was deprived of due cautious persons, with due regard to all the circumstances. In a contract of
process echoes on hollow ground and certainly cannot elicit approval nor carriage, it is presumed that the common carrier was at fault or was negligent
sympathy. when a passenger dies or is injured. Unless the presumption is rebutted, the
court need not even make an express finding of fault or negligence on the
To cater to petitioners arguments and reinstate its petition for relief from part of the common carrier. This statutory presumption may only be overcome
judgment would put a premium on the negligence of its former counsel and by evidence that the carrier exercised extraordinary diligence.[34]
encourage the non-termination of this case by reason thereof. This is one case
where petitioner has to bear the adverse consequences of its counsels act, for a In the instant case, there is no evidence to rebut the statutory presumption that
client is bound by the action of his counsel in the conduct of a case and he the proximate cause of Marie Graces death was the negligence of petitioner.
cannot thereafter be heard to complain that the result might have been different Hence, the courts below correctly ruled that petitioner was guilty of breach of
had his counsel proceeded differently. The rationale for the rule is easily contract of carriage.
discernible. If the negligence of counsel be admitted as a reason for opening
cases, there would never be an end to a suit so long as a new counsel could be Nevertheless, the award of damages should be modified.
hired every time it is shown that the prior counsel had not been sufficiently
Article 1764[35] in relation to Article 2206[36] of the Civil Code, holds the
diligent, experienced or learned.[31]
common carrier in breach of its contract of carriage that results in the death of a
Similarly, in Macalalag v. Ombudsman,[32] a Philippine Postal Corporation passenger liable to pay the following: (1) indemnity for death, (2) indemnity for
employee charged with dishonesty was not able to file an answer and position loss of earning capacity, and (3) moral damages.
paper. He was found guilty solely on the basis of complainants evidence and
In the present case, respondent heirs of the deceased are entitled to indemnity
was dismissed with forfeiture of all benefits and disqualification from government
for the death of Marie Grace which under current jurisprudence is fixed at
service. Challenging the decision of the Ombudsman, the employee contended
that the gross negligence of his counsel deprived him of due process of law. In
debunking his contention, the Court said The award of compensatory damages for the loss of the deceaseds earning
capacity should be deleted for lack of basis. As a rule, documentary evidence
Neither can he claim that he is not bound by his lawyers actions; it is only in
should be presented to substantiate the claim for damages for loss of earning
case of gross or palpable negligence of counsel when the courts can step in and
capacity. By way of exception, damages for loss of earning capacity may be
accord relief to a client who would have suffered thereby. If every perceived
awarded despite the absence of documentary evidence when (1) the deceased
mistake, failure of diligence, lack of experience or insufficient legal knowledge of
is self-employed earning less than the minimum wage under current labor laws,
the lawyer would be admitted as a reason for the reopening of a case, there
and judicial notice may be taken of the fact that in the deceaseds line of work no
would be no end to controversy. Fundamental to our judicial system is the
documentary evidence is available; or (2) the deceased is employed as a daily
principle that every litigation must come to an end. It would be a clear mockery if
wage worker earning less than the minimum wage under current labor laws.[38]
it were otherwise. Access to the courts is guaranteed, but there must be a limit
to it.
In People v. Oco,[39] the evidence presented by the prosecution to recover earning capacity because the income of the victim was not sufficiently proven,
damages for loss of earning capacity was the bare testimony of the deceaseds thus
wife that her husband was earning P8,000.00 monthly as a legal researcher of a
private corporation. Finding that the deceased was neither self-employed nor The trial court based the amounts of damages awarded to the petitioner on the
employed as a daily-wage worker earning less than the minimum wage under following circumstances:
the labor laws existing at the time of his death, the Court held that testimonial
As to the loss or impairment of earning capacity, there is no doubt that Pleno is
evidence alone is insufficient to justify an award for loss of earning capacity.
an ent[re]preneur and the founder of his own corporation, the Mayon Ceramics
Likewise, in People v. Caraig,[40] damages for loss of earning capacity was not Corporation. It appears also that he is an industrious and resourceful person
awarded because the circumstances of the 3 deceased did not fall within the with several projects in line, and were it not for the incident, might have pushed
recognized exceptions, and except for the testimony of their wives, no them through. On the day of the incident, Pleno was driving homeward with
documentary proof about their income was presented by the prosecution. Thus geologist Longley after an ocular inspection of the site of the Mayon Ceramics
Corporation. His actual income however has not been sufficiently established so
The testimonial evidence shows that Placido Agustin, Roberto Raagas, and that this Court cannot award actual damages, but, an award of temperate or
Melencio Castro Jr. were not self-employed or employed as daily-wage workers moderate damages may still be made on loss or impairment of earning capacity.
earning less than the minimum wage under the labor laws existing at the time of That Pleno sustained a permanent deformity due to a shortened left leg and that
their death. Placido Agustin was a Social Security System employee who he also suffers from double vision in his left eye is also established. Because of
received a monthly salary of P5,000. Roberto Raagas was the President of this, he suffers from some inferiority complex and is no longer active in business
Sinclair Security and Allied Services, a family owned corporation, with a as well as in social life. In similar cases as in Borromeo v. Manila Electric
monthly compensation of P30,000. Melencio Castro Jr. was a taxi driver of Railroad Co., 44 Phil 165; Coriage, et al. v. LTB Co., et al., L-11037, Dec. 29,
New Rocalex with an average daily earning of P500 or a monthly earning of 1960, and in Araneta, et al. v. Arreglado, et al., L-11394, Sept. 9, 1958, the
P7,500. Clearly, these cases do not fall under the exceptions where indemnity proper award of damages were given.
for loss of earning capacity can be given despite lack of documentary evidence.
Therefore, for lack of documentary proof, no indemnity for loss of earning We rule that the lower courts awards of damages are more consonant with the
capacity can be given in these cases. (Emphasis supplied) factual circumstances of the instant case. The trial courts findings of facts are
clear and well-developed. Each item of damages is adequately supported by
Here, the trial court and the Court of Appeals computed the award of evidence on record.
compensatory damages for loss of earning capacity only on the basis of the
testimony of respondent Rosalito that the deceased was 39 years of age and a Article 2224 of the Civil Code was likewise applied in the recent cases of People
Section Chief of the Bureau of Internal Revenue, Tuguergarao District Office v. Singh[43] and People v. Almedilla,[44] to justify the award of temperate
with a salary of P83,088.00 per annum when she died.[41] No other evidence damages in lieu of damages for loss of earning capacity which was not
was presented. The award is clearly erroneous because the deceaseds substantiated by the required documentary proof.
earnings does not fall within the exceptions.
Anent the award of moral damages, the same cannot be lumped with exemplary
However, the fact of loss having been established, temperate damages in the damages because they are based on different jural foundations.[45] These
amount of P500,000.00 should be awarded to respondents. Under Article 2224 damages are different in nature and require separate determination.[46] In culpa
of the Civil Code, temperate or moderate damages, which are more than contractual or breach of contract, moral damages may be recovered when the
nominal but less than compensatory damages, may be recovered when the defendant acted in bad faith or was guilty of gross negligence (amounting to bad
court finds that some pecuniary loss has been suffered but its amount can not, faith) or in wanton disregard of contractual obligations and, as in this case, when
from the nature of the case, be proved with certainty. the act of breach of contract itself constitutes the tort that results in physical
injuries. By special rule in Article 1764 in relation to Article 2206 of the Civil
In Pleno v. Court of Appeals,[42] the Court sustained the trial courts award of Code, moral damages may also be awarded in case the death of a passenger
P200,000.00 as temperate damages in lieu of actual damages for loss of results from a breach of carriage.[47] On the other hand, exemplary damages,
which are awarded by way of example or correction for the public good may be
recovered in contractual obligations if the defendant acted in wanton, fraudulent, shall be adjudged on unliquidated claims or damages except when or until the
reckless, oppressive, or malevolent manner.[48] demand can be established with reasonable certainty. Accordingly, where the
demand is established with reasonable certainty, the interest shall begin to run
Respondents in the instant case should be awarded moral damages to from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code)
compensate for the grief caused by the death of the deceased resulting from the but when such certainty cannot be so reasonably established at the time the
petitioners breach of contract of carriage. Furthermore, the petitioner failed to demand is made, the interest shall begin to run only from the date the judgment
prove that it exercised the extraordinary diligence required for common carriers, of the court is made (at which time the quantification of damages may be
it is presumed to have acted recklessly.[49] Thus, the award of exemplary deemed to have been reasonably ascertained). The actual base for the
damages is proper. Under the circumstances, we find it reasonable to award computation of legal interest shall, in any case, be on the amount finally
respondents the amount of P100,000.00 as moral damages and P100,000.00 as adjudged.
exemplary damages. These amounts are not excessive.[50]
3. When the judgment of the court awarding a sum of money becomes
The actual damages awarded by the trial court reduced by the Court of Appeals final and executory, the rate of legal interest, whether the case falls under
should be further reduced. In People v. Duban,[51] it was held that only paragraph 1 or paragraph 2, above, shall be 12% per annum from such
substantiated and proven expenses or those that appear to have been genuinely finality until its satisfaction, this interim period being deemed to be by then an
incurred in connection with the death, wake or burial of the victim will be equivalent to a forbearance of credit. (Emphasis supplied).
recognized. A list of expenses (Exhibit J),[52] and the contract/receipt for the
construction of the tomb (Exhibit F)[53] in this case, cannot be considered In the instant case, petitioner should be held liable for payment of interest as
competent proof and cannot replace the official receipts necessary to justify the damages for breach of contract of carriage. Considering that the amounts
award. Hence, actual damages should be further reduced to P78,160.00,[54] payable by petitioner has been determined with certainty only in the instant
which was the amount supported by official receipts. petition, the interest due shall be computed upon the finality of this decision at
the rate of 12% per annum until satisfaction, per paragraph 3 of the aforecited
Pursuant to Article 2208[55] of the Civil Code, attorneys fees may also be rule.[57]
recovered in the case at bar where exemplary damages are awarded. The Court
finds the award of attorneys fees equivalent to 10% of the total amount adjudged WHEREFORE, in view of all the foregoing, the petition is partially granted. The
against petitioner reasonable. April 11, 2003 decision of the Court of Appeals in CA-G.R. CV No. 63290, which
modified the decision of the Regional Trial Court of Tuguegarao, Cagayan in
Finally, in Eastern Shipping Lines, Inc. v. Court of Appeals,[56] it was held that Civil Case No. 5023, is AFFIRMED with MODIFICATION. As modified, petitioner
when an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, Victory Liner, Inc., is ordered to pay respondents the following: (1) P50,000.00
delicts or quasi-delicts is breached, the contravenor can be held liable for as indemnity for the death of Marie Grace Pagulayan-Gammad; (2) P100,000.00
payment of interest in the concept of actual and compensatory damages, as moral damages; (3) P100,000.00 as exemplary damages; (4) P78,160.00 as
subject to the following rules, to wit actual damages; (5) P500,000.00 as temperate damages; (6) 10% of the total
amount as attorneys fees; and the costs of suit.
1. When the obligation is breached, and it consists in the payment of a sum of
money, i.e., a loan or forbearance of money, the interest due should be that Furthermore, the total amount adjudged against petitioner shall earn interest at
which may have been stipulated in writing. Furthermore, the interest due shall the rate of 12% per annum computed from the finality of this decision until fully
itself earn legal interest from the time it is judicially demanded. In the absence of paid.
stipulation, the rate of interest shall be 12% per annum to be computed from
default, i.e., from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code.

2. When an obligation, not constituting a loan or forbearance of money, is

breached, an interest on the amount of damages awarded may be imposed at
the discretion of the court at the rate of 6% per annum. No interest, however,
[Moral] The initial problem raised by the petitioner in this appeal may be formulated thus
— "Is the approval of the Public Service Commission necessary for the sale of a
G.R. No. L-12163 March 4, 1959 public service vehicle even without conveying therewith the authority to operate
the same?" Assuming the dubious sale to be a fact, the court of Appeals
PAZ FORES, petitioner, vs.
answered the query in the affirmative. The ruling should be upheld.
IRENEO MIRANDA, respondent.
Section 20 of the Public Service Act (Commonwealth Act No. 146) provides:
Alberto O. Villaraza for petitioner.
Sec. 20. Subject to established limitations and exceptions and saving provisions
Almazan and Ereneta for respondent.
to the contrary, it shall be unlawful for any public service or for the owner, lessee
REYES, J.B.L., J.: or operator thereof, without the previous approval and authority of the
Commission previously had —
Defendant-petitioner Paz Fores brings this petition for review of the decision of
the Court of Appeals (C.A. Case No. 1437-R) awarding to the plaintiff- xxx xxx xxx
respondent Ireneo Miranda the sums of P5,000 by way of actual damages and
(g) To sell, alienate, mortgage, encumber or lease its property, franchises,
counsel fees, and P10,000 as moral damages, with costs.
certificates, privileges, or rights, or any part thereof; or merge or consolidate its
Respondent was one of the passengers on a jeepney driven by Eugenio Luga. property, franchises, privileges or rights, or any part thereof, with those of any
While the vehicle was descending the Sta. Mesa bridge at an excessive rate of other public service. The approval herein required shall be given, after notice to
speed, the driver lost control thereof, causing it to swerve and to his the bridge the public and after hearing the persons interested at a public hearing, if it be
wall. The accident occurred on the morning of March 22, 1953. Five of the shown that there are just and reasonable grounds for making the mortgage or
passengers were injured, including the respondent who suffered a fracture of the encumbrance, for liabilities of more than one year maturity, or the sale,
upper right humerus. He was taken to the National Orthopedic Hospital for alienation, lease, merger, or consolidation to be approved and that the same are
treatment, and later was subjected to a series of operations; the first on May 23, not detrimental to the public interest, and in case of a sale, the date on which the
1953, when wire loops were wound around the broken bones and screwed into same is to be consummated shall be fixed in the order of approval: Provided,
place; a second, effected to insert a metal splint, and a third one to remove such however, That nothing herein contained shall be construed to prevent the
splint. At the time of the trial, it appears that respondent had not yet recovered transaction from being negotiated or completed before its approval or to prevent
the use of his right arm. the sale, alienation, or lease by any public service of any of its property in the
ordinary course of its business.
The driver was charged with serious physical injuries through reckless
imprudence, and upon interposing a plea of guilty was sentenced accordingly. Interpreting the effects of this particular provision of law, we have held in the
recent cases of Montoya vs. Ignacio, * 50 Off. Gaz. No. 1, p. 108; Timbol vs.
The contention that the evidence did not sufficiently establish the identity of the Osias, et al., G. R. No. L-7547, April 30, 1955, and Medina vs. Cresencia, 99
vehicle as the belonging to the petitioner was rejected by the appellate court Phil., 506; 52 Off. Gaz. No. 10, p. 4606, that a transfer contemplated by the law,
which found, among other things, that is carried plate No. TPU-1163, SERIES if made without the requisite approval of the Public Service Commission, is not
OF 1952, Quezon City, registered in the name of Paz Fores, (appellant herein) effective and binding in so far as the responsibility of the grantee under the
and that the vehicle even had the name of "Doña Paz" painted below its wind franchise in relation to the public is concerned. Petitioner assails, however, the
shield. No evidence to the contrary was introduced by the petitioner, who relied applicability of these rulings to the instant case, contending that in those cases,
on an attack upon the credibility of the two policemen who went to the scene of the operator did not convey, by lease or by sale, the vehicle independently of his
the incident. rights under the franchise. This line of reasoning does not find support in the
law. The provisions of the statute are clear and prohibit the sale, alienation,
A point to be further remarked is petitioner's contention that on March 21, 1953, lease, or encumbrance of the property, franchise, certificate, privileges or rights,
or one day before the accident happened, she allegedly sold the passenger jeep or any part thereof of the owner or operator of the public service Commission.
that was involved therein to a certain Carmen Sackerman. The law was designed primarily for the protection of the public interest; and until
the approval of the public Service Commission is obtained the vehicle is, in P20,000. On the other hand, "it cannot be denied," the lower court said, "that
contemplation of law, still under the service of the owner or operator standing in appellee (respondent) did incur expenses"' It is well to note further that
the records of the Commission which the public has a right to rely upon. respondent was a painter by profession and a professor of Fine Arts, so that the
amount of P2,000 awarded cannot be said to be excessive (see Arts. 2224 and
The proviso contained in the aforequoted law, to the effect that nothing therein 2225, Civil Code of the Philippines). The attorney's fees in the sum of P3,000
shall be construed "to prevent the transaction from being negotiated or complete also awarded to the respondent are assailed on the ground that the Court of
before its approval", means only that the sale without the required approval is First Instance did not provided for the same, and since no appeal was
still valid and binding between the parties (Montoya vs. Ignacio, supra). The interposed by said respondent, it was allegedly error for the Court of Appeals to
phrase "in the ordinary course of its business" found in the other proviso" or to award them motu proprio. Petitioner fails to note that attorney's fees are
prevent the sale, alienation, or lease by any public service of any of its property". included in the concept of actual damages under the Civil Code and may be
As correctly observed by the lower court, could not have been intended to awarded whenever the court deems it is just and equitable (Art. 2208, Civil Code
include the sale of the vehicle itself, but at most may refer only to such property of the Philippines). We see no reason to alter these awards.
that may be conceivably disposed or by the carrier in the ordinary course of its
business, like junked equipment or spare parts. Anent the moral damages ordered to be paid to the respondent, the same must
be discarded. We have repeatedly ruled (Cachero vs. Manila Yellow Taxicab
The case of Indalecio de Torres vs. Vicente Ona (63 Phil., 594, 597) is Co. Inc., 101 Phil., 523; 54 Off. Gaz., [26], 6599; Necesito, et al vs. Paras, 104
enlightening; and there, it was held: Phil., 75; 56 Off. Gaz., [23] 4023, that moral damages are not recoverable in
damage actions predicted on a breach of the contract of transportation, in view
Under the law, the Public Service Commission has not only general supervision
of Articles 2219 and 2220 of the new Civil Code, which provide as follows:
and regulation of, but also full jurisdiction and control over all public utilities
including the property, equipment and facilities used, and the property rights and Art. 2219. Moral damages may be recovered in the following and analogous
franchise enjoyed by every individual and company engaged i the performance cases:
of a public service in the sense this phrase is used in the Public Service Act or
Act No. 3108). By virtue of the provisions of said Act, motor vehicles used in the (1) A criminal offense resulting in physical injuries;
performance of a service, as the transportation of freight from one point to
another, have to this date been considered — and they cannot but be so (2) Quasi-delicts causing physical injuries;
considered-public service property; and, by reason of its own nature, a TH truck,
xxx xxx xxx
which means that the operator thereof places it at the disposal of anybody who
is willing to pay a rental of its use, when he desires to transfer or carry his Art. 2220. Willful injury to property may be a legal ground for awarding moral
effects, merchandise or any other cargo from one place to another, is damages if the court should find that, under circumstances, such damages are
necessarily a public service property. (Emphasis supplied) justify due. The same rule applies to breaches of contract where the defendant
acted fraudulently or in bad faith.
Of course, this court has held in the case of Bachrach Motor co. vs. Zamboanga
Transportation Co., 52 Phil., 244, that there may be a nunc pro tunc By contrasting the provisions of these two article it immediately becomes
authorization which has the effect of having the approval retroact to the date of apparent that:
the transfer; but such outcome cannot prejudice rights intervening in the
meantime. It appears that no such approval was given by the Commission (a) In case of breach of contract (including one of transportation) proof of bad
before the accident occurred. faith or fraud (dolus), i.e., wanton or deliberately injurious conduct, is essential to
justify an award of moral damages; and
The P10,000 actual damages awarded by the Court of First Instance of Manila
were reduced by the Court of Appeals to only P2,000, on the ground that a (b) That a breach of contract can not be considered included in the descriptive
review of the records failed to disclose a sufficient basis for the trial court's term "analogous cases" used in Art. 2219; not only because Art. 2220
appraisal, since the only evidence presented on this point consisted of specifically provides for the damages that are caused by contractual breach, but
respondent's bare statement that his expenses and loss of income amounted to because the definition of quasi-delict in Art. 2176 of the Code expressly
excludes the cases where there is a "preexisting contractual relation between The difference in conditions, defenses and proof, as well as the codal concept of
the parties." quasi-delict as essentially extra contractual negligence, compel us to
differentiate between action ex contractu, and actions quasi ex delicto, and
Art. 2176. Whoever by act or omission causes damage to another, there being prevent us from viewing the action for breach of contract as simultaneously
fault or negligence, is obliged to pay for the damage dome. Such fault or embodying an action on tort. Neither can this action be taken as one to enforce
negligence, if there is no pre-existing contractual relation between the parties, is on employee's liability under Art. 103 of the Revised Penal Code, since the
called a quasi-delict and is governed by the provisions of this Chapter. responsibility is not alleged to be subsidiary, nor is there on record any averment
or proof that the driver of appellant was insolvent. In fact, he is not even made a
The exception to the basic rule of damages now under consideration is a mishap
party to the suit.
resulting in the death of a passenger, in which case Article 1764 makes the
common carrier expressly subject to the rule of Art. 2206, that entitles the It is also suggested that a carrier's violation of its engagement to safety transport
deceased passenger to "demand moral damages for mental anguish by reason the passenger involves a breach of the passenger's confidence, and therefore
of the death of the deceased" (Necesito vs. Paras, 104 Phil., 84, Resolution on should be regarded as a breach of contract in bad faith, justifying recovery of
motion to reconsider, September 11, 1958). But the exceptional rule of Art. 1764 moral damages under Art. 2220. This theory is untenable, for under it the carrier
makes it all the more evident that where the injured passenger does not die, would always be deemed in bad faith, in every case its obligation to the
moral damages are not recoverable unless it is proved that the carrier was guilty passenger is infringed, and it would be never accountable for simple negligence;
of malice or bad faith. We think it is clear that the mere carelessness of the while under the law (Art. 1756). the presumption is that common carriers acted
carrier's driver does not per se constitute of justify an inference of malice or bad negligently (and not maliciously), and Art. 1762 speaks of negligence of the
faith on the part of the carrier; and in the case at bar there is no other evidence common carrier.
of such malice to support the award of moral damages by the Court of Appeals.
To award moral damages for breach of contract, therefore, without proof of bad ART. 1756. In case of death of or injuries to passengers, common carriers are
faith or malice on the part of the defendant, as required by Art. 220, would be to presumed to have been at fault or to have acted negligently, unless they prove
violate the clear provisions of the law, and constitute unwarranted judicial that they observed extraordinary diligence as prescribed in article 1733 and
legislation. 1755.

The Court of Appeals has invoked our rulings in Castro vs. Acro Taxicab Co., ART. 1762. The contributory negligence of the passenger does not bar recovery
G.R. No. 49155, December 14, 1948 and Layda vs. Court of Appeals, 90 Phil., of damages for his death or injuries, if the proximate cause thereof is the
724; but these doctrines were predicated upon our former law of damages, negligence of the common carrier, but the amount of damages shall be equitably
before judicial discretion in fixing them became limited by the express provisions reduced.
of the new Civil Code (previously quoted). Hence, the aforesaid rulings are now
inapplicable. The distinction between fraud, bad faith or malice in the sense of deliberate or
wanton wrong doing and negligence (as mere carelessness) is too fundamental
Upon the other hand, the advantageous position of a party suing a carrier for in our law to be ignored (Arts. 1170-1172); their consequences being clearly
breach of the contract of transportations explains, to some extent, the limitations differentiated by the Code.
imposed by the new Code on the amount of the recovery. The action for breach
of contract imposes on the defendant carrier a presumption of liability upon mere ART. 2201. In contracts and quasi-contracts, the damages for which the obligor
proof of injury to the passenger; that latter is relieved from the duty to who acted in good faith is liable shall be those that are the natural and probable
established the fault of the carrier, or of his employees, and the burden is placed consequences of the breach of the obligation, and which the parties have
on the carrier to prove that it was due to an unforseen event or to force majeure foreseen or could have reasonably foreseen at the time the obligation was
(Cangco vs. Manila Railroad Co., 38 Phil., 768, 777). Moreover, the carrier, constituted.
unlike in suits for quasi-delict, may not escape liability by proving that it has
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be
exercised due diligence in the selection and supervision of its employees (Art.
responsible for all damages which may be reasonably attributed to the non-
1759, new civil code; Cangco vs. Manila Railroad Co., supra; Prado vs. Manila
performance of the obligation.
Electric Co., 51 Phil., 900).
It is to be presumed, in the absence of statutory provision to the contrary, that
this difference was in the mind of the lawmakers when in Art. 2220 they limited
recovery of moral damages to breaches of contract in bad faith. It is true that
negligence may be occasionally so gross as to amount to malice; but that fact
must be shown in evidence, and a carrier's bad faith is not to be lightly inferred
from a mere finding that the contract was breached through negligence of the
carrier's employees.

In view of the foregoing considerations, the decision of the Court of Appeals is

modified by eliminating the award of P5,000.00 by way of moral damages.
(Court of Appeals Resolution of May 5, 1957). In all other respects, the judgment
is affirmed. No costs in this instance. So ordered.
[Moral] with the white man [manager], they came all across to Mr. Carrascoso and
pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12,
G.R. No. L-21438 September 28, 1966 Hearing of May 26, 1959); and plaintiff reluctantly gave his "first class" seat in
the plane.3
AIR FRANCE, petitioner, vs.
1. The trust of the relief petitioner now seeks is that we review "all the findings" 4
of respondent Court of Appeals. Petitioner charges that respondent court failed
to make complete findings of fact on all the issues properly laid before it. We are
Lichauco, Picazo and Agcaoili for petitioner. asked to consider facts favorable to petitioner, and then, to overturn the
Bengzon Villegas and Zarraga for respondent R. Carrascoso. appellate court's decision.

Coming into focus is the constitutional mandate that "No decision shall be
rendered by any court of record without expressing therein clearly and distinctly
SANCHEZ, J.: the facts and the law on which it is based". 5 This is echoed in the statutory
demand that a judgment determining the merits of the case shall state "clearly
The Court of First Instance of Manila 1 sentenced petitioner to pay respondent and distinctly the facts and the law on which it is based"; 6 and that "Every
Rafael Carrascoso P25,000.00 by way of moral damages; P10,000.00 as decision of the Court of Appeals shall contain complete findings of fact on all
exemplary damages; P393.20 representing the difference in fare between first issues properly raised before it". 7
class and tourist class for the portion of the trip Bangkok-Rome, these various
amounts with interest at the legal rate, from the date of the filing of the complaint A decision with absolutely nothing to support it is a nullity. It is open to direct
until paid; plus P3,000.00 for attorneys' fees; and the costs of suit. attack. 8 The law, however, solely insists that a decision state the "essential
ultimate facts" upon which the court's conclusion is drawn. 9 A court of justice is
On appeal,2 the Court of Appeals slightly reduced the amount of refund on not hidebound to write in its decision every bit and piece of evidence 10
Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the presented by one party and the other upon the issues raised. Neither is it to be
appealed decision "in all other respects", with costs against petitioner. burdened with the obligation "to specify in the sentence the facts" which a party
"considered as proved". 11 This is but a part of the mental process from which
The case is now before us for review on certiorari.
the Court draws the essential ultimate facts. A decision is not to be so clogged
The facts declared by the Court of Appeals as " fully supported by the evidence with details such that prolixity, if not confusion, may result. So long as the
of record", are: decision of the Court of Appeals contains the necessary facts to warrant its
conclusions, it is no error for said court to withhold therefrom "any specific
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left finding of facts with respect to the evidence for the defense". Because as this
Manila for Lourdes on March 30, 1958. Court well observed, "There is no law that so requires". 12 Indeed, "the mere
failure to specify (in the decision) the contentions of the appellant and the
On March 28, 1958, the defendant, Air France, through its authorized agent, reasons for refusing to believe them is not sufficient to hold the same contrary to
Philippine Air Lines, Inc., issued to plaintiff a "first class" round trip airplane ticket the requirements of the provisions of law and the Constitution". It is in this
from Manila to Rome. From Manila to Bangkok, plaintiff travelled in "first class", setting that in Manigque, it was held that the mere fact that the findings "were
but at Bangkok, the Manager of the defendant airline forced plaintiff to vacate based entirely on the evidence for the prosecution without taking into
the "first class" seat that he was occupying because, in the words of the witness consideration or even mentioning the appellant's side in the controversy as
Ernesto G. Cuento, there was a "white man", who, the Manager alleged, had a shown by his own testimony", would not vitiate the judgment. 13 If the court did
"better right" to the seat. When asked to vacate his "first class" seat, the plaintiff, not recite in the decision the testimony of each witness for, or each item of
as was to be expected, refused, and told defendant's Manager that his seat evidence presented by, the defeated party, it does not mean that the court has
would be taken over his dead body; a commotion ensued, and, according to said overlooked such testimony or such item of evidence. 14 At any rate, the legal
Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist presumptions are that official duty has been regularly performed, and that all the
class; when they found out that Mr. Carrascoso was having a hot discussion
matters within an issue in a case were laid before the court and passed upon by allowed the passenger to be at the mercy of its employees. It is more in keeping
it. 15 with the ordinary course of business that the company should know whether or
riot the tickets it issues are to be honored or not.22
Findings of fact, which the Court of Appeals is required to make, maybe defined
as "the written statement of the ultimate facts as found by the court ... and Not that the Court of Appeals is alone. The trial court similarly disposed of
essential to support the decision and judgment rendered thereon". 16 They petitioner's contention, thus:
consist of the court's "conclusions" with respect to the determinative facts in
issue". 17 A question of law, upon the other hand, has been declared as "one On the fact that plaintiff paid for, and was issued a "First class" ticket, there can
which does not call for an examination of the probative value of the evidence be no question. Apart from his testimony, see plaintiff's Exhibits "A", "A-1", "B",
presented by the parties." 18 "B-1," "B-2", "C" and "C-1", and defendant's own witness, Rafael Altonaga,
confirmed plaintiff's testimony and testified as follows:
2. By statute, "only questions of law may be raised" in an appeal by certiorari
from a judgment of the Court of Appeals. 19 That judgment is conclusive as to Q. In these tickets there are marks "O.K." From what you know, what does this
the facts. It is not appropriately the business of this Court to alter the facts or to OK mean?
review the questions of fact. 20
A. That the space is confirmed.
With these guideposts, we now face the problem of whether the findings of fact
Q. Confirmed for first class?
of the Court of Appeals support its judgment.
A. Yes, "first class". (Transcript, p. 169)
3. Was Carrascoso entitled to the first class seat he claims?
xxx xxx xxx
It is conceded in all quarters that on March 28, 1958 he paid to and received
from petitioner a first class ticket. But petitioner asserts that said ticket did not Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and
represent the true and complete intent and agreement of the parties; that said Rafael Altonaga that although plaintiff paid for, and was issued a "first class"
respondent knew that he did not have confirmed reservations for first class on airplane ticket, the ticket was subject to confirmation in Hongkong. The court
any specific flight, although he had tourist class protection; that, accordingly, the cannot give credit to the testimony of said witnesses. Oral evidence cannot
issuance of a first class ticket was no guarantee that he would have a first class prevail over written evidence, and plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and
ride, but that such would depend upon the availability of first class seats. "C-1" belie the testimony of said witnesses, and clearly show that the plaintiff
was issued, and paid for, a first class ticket without any reservation whatever.
These are matters which petitioner has thoroughly presented and discussed in
its brief before the Court of Appeals under its third assignment of error, which Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga
reads: "The trial court erred in finding that plaintiff had confirmed reservations testified that the reservation for a "first class" accommodation for the plaintiff
for, and a right to, first class seats on the "definite" segments of his journey, was confirmed. The court cannot believe that after such confirmation defendant
particularly that from Saigon to Beirut". 21 had a verbal understanding with plaintiff that the "first class" ticket issued to him
by defendant would be subject to confirmation in Hongkong. 23
And, the Court of Appeals disposed of this contention thus:
We have heretofore adverted to the fact that except for a slight difference of a
Defendant seems to capitalize on the argument that the issuance of a first-class
few pesos in the amount refunded on Carrascoso's ticket, the decision of the
ticket was no guarantee that the passenger to whom the same had been issued,
Court of First Instance was affirmed by the Court of Appeals in all other
would be accommodated in the first-class compartment, for as in the case of
respects. We hold the view that such a judgment of affirmance has merged the
plaintiff he had yet to make arrangements upon arrival at every station for the
judgment of the lower court. 24 Implicit in that affirmance is a determination by
necessary first-class reservation. We are not impressed by such a reasoning.
the Court of Appeals that the proceeding in the Court of First Instance was free
We cannot understand how a reputable firm like defendant airplane company
from prejudicial error and "all questions raised by the assignments of error and
could have the indiscretion to give out tickets it never meant to honor at all. It
all questions that might have been raised are to be regarded as finally
received the corresponding amount in payment of first-class tickets and yet it
adjudicated against the appellant". So also, the judgment affirmed "must be during the entire duration of plaintiff's tour of Europe with Hongkong as starting
regarded as free from all error". 25 We reached this policy construction because point up to and until plaintiff's return trip to Manila, ... .
nothing in the decision of the Court of Appeals on this point would suggest that
its findings of fact are in any way at war with those of the trial court. Nor was 4. That, during the first two legs of the trip from Hongkong to Saigon and from
said affirmance by the Court of Appeals upon a ground or grounds different from Saigon to Bangkok, defendant furnished to the plaintiff First Class
those which were made the basis of the conclusions of the trial court. 26 accommodation but only after protestations, arguments and/or insistence were
made by the plaintiff with defendant's employees.
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first
class seat, notwithstanding the fact that seat availability in specific flights is 5. That finally, defendant failed to provide First Class passage, but instead
therein confirmed, then an air passenger is placed in the hollow of the hands of furnished plaintiff only Tourist Class accommodations from Bangkok to Teheran
an airline. What security then can a passenger have? It will always be an easy and/or Casablanca, ... the plaintiff has been compelled by defendant's
matter for an airline aided by its employees, to strike out the very stipulations in employees to leave the First Class accommodation berths at Bangkok after he
the ticket, and say that there was a verbal agreement to the contrary. What if the was already seated.
passenger had a schedule to fulfill? We have long learned that, as a rule, a
6. That consequently, the plaintiff, desiring no repetition of the inconvenience
written document speaks a uniform language; that spoken word could be
and embarrassments brought by defendant's breach of contract was forced to
notoriously unreliable. If only to achieve stability in the relations between
take a Pan American World Airways plane on his return trip from Madrid to
passenger and air carrier, adherence to the ticket so issued is desirable. Such is
the case here. The lower courts refused to believe the oral evidence intended to
defeat the covenants in the ticket. xxx xxx xxx
The foregoing are the considerations which point to the conclusion that there are 2. That likewise, as a result of defendant's failure to furnish First Class
facts upon which the Court of Appeals predicated the finding that respondent accommodations aforesaid, plaintiff suffered inconveniences, embarrassments,
Carrascoso had a first class ticket and was entitled to a first class seat at and humiliations, thereby causing plaintiff mental anguish, serious anxiety,
Bangkok, which is a stopover in the Saigon to Beirut leg of the flight. 27 We wounded feelings, social humiliation, and the like injury, resulting in moral
perceive no "welter of distortions by the Court of Appeals of petitioner's damages in the amount of P30,000.00. 33
statement of its position", as charged by petitioner. 28 Nor do we subscribe to
petitioner's accusation that respondent Carrascoso "surreptitiously took a first xxx xxx xxx
class seat to provoke an issue". 29 And this because, as petitioner states,
Carrascoso went to see the Manager at his office in Bangkok "to confirm my The foregoing, in our opinion, substantially aver: First, That there was a contract
seat and because from Saigon I was told again to see the Manager". 30 Why, to furnish plaintiff a first class passage covering, amongst others, the Bangkok-
then, was he allowed to take a first class seat in the plane at Bangkok, if he had Teheran leg; Second, That said contract was breached when petitioner failed to
no seat? Or, if another had a better right to the seat? furnish first class transportation at Bangkok; and Third, that there was bad faith
when petitioner's employee compelled Carrascoso to leave his first class
4. Petitioner assails respondent court's award of moral damages. Petitioner's accommodation berth "after he was already, seated" and to take a seat in the
trenchant claim is that Carrascoso's action is planted upon breach of contract; tourist class, by reason of which he suffered inconvenience, embarrassments
that to authorize an award for moral damages there must be an averment of and humiliations, thereby causing him mental anguish, serious anxiety, wounded
fraud or bad faith;31 and that the decision of the Court of Appeals fails to make a feelings and social humiliation, resulting in moral damages. It is true that there is
finding of bad faith. The pivotal allegations in the complaint bearing on this issue no specific mention of the term bad faith in the complaint. But, the inference of
are: bad faith is there, it may be drawn from the facts and circumstances set forth
therein. 34 The contract was averred to establish the relation between the
3. That ... plaintiff entered into a contract of air carriage with the Philippine Air parties. But the stress of the action is put on wrongful expulsion.
Lines for a valuable consideration, the latter acting as general agents for and in
behalf of the defendant, under which said contract, plaintiff was entitled to, as Quite apart from the foregoing is that (a) right the start of the trial, respondent's
defendant agreed to furnish plaintiff, First Class passage on defendant's plane counsel placed petitioner on guard on what Carrascoso intended to prove: That
while sitting in the plane in Bangkok, Carrascoso was ousted by petitioner's "Q How does the person in the ticket-issuing office know what reservation the
manager who gave his seat to a white man; 35 and (b) evidence of bad faith in passenger has arranged with you?
the fulfillment of the contract was presented without objection on the part of the
petitioner. It is, therefore, unnecessary to inquire as to whether or not there is A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June
sufficient averment in the complaint to justify an award for moral damages. 19, 1959)
Deficiency in the complaint, if any, was cured by the evidence. An amendment
In this connection, we quote with approval what the trial Judge has said on this
thereof to conform to the evidence is not even required. 36 On the question of
bad faith, the Court of Appeals declared:
Why did the, using the words of witness Ernesto G. Cuento, "white man" have a
That the plaintiff was forced out of his seat in the first class compartment of the
"better right" to the seat occupied by Mr. Carrascoso? The record is silent. The
plane belonging to the defendant Air France while at Bangkok, and was
defendant airline did not prove "any better", nay, any right on the part of the
transferred to the tourist class not only without his consent but against his will,
"white man" to the "First class" seat that the plaintiff was occupying and for
has been sufficiently established by plaintiff in his testimony before the court,
which he paid and was issued a corresponding "first class" ticket.
corroborated by the corresponding entry made by the purser of the plane in his
notebook which notation reads as follows: If there was a justified reason for the action of the defendant's Manager in
Bangkok, the defendant could have easily proven it by having taken the
"First-class passenger was forced to go to the tourist class against his will, and
testimony of the said Manager by deposition, but defendant did not do so; the
that the captain refused to intervene",
presumption is that evidence willfully suppressed would be adverse if produced
and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co- [Sec. 69, par (e), Rules of Court]; and, under the circumstances, the Court is
passenger. The captain of the plane who was asked by the manager of constrained to find, as it does find, that the Manager of the defendant airline in
defendant company at Bangkok to intervene even refused to do so. It is Bangkok not merely asked but threatened the plaintiff to throw him out of the
noteworthy that no one on behalf of defendant ever contradicted or denied this plane if he did not give up his "first class" seat because the said Manager
evidence for the plaintiff. It could have been easy for defendant to present its wanted to accommodate, using the words of the witness Ernesto G. Cuento, the
manager at Bangkok to testify at the trial of the case, or yet to secure his "white man".38
disposition; but defendant did neither. 37
It is really correct to say that the Court of Appeals in the quoted portion first
The Court of appeals further stated — transcribed did not use the term "bad faith". But can it be doubted that the recital
of facts therein points to bad faith? The manager not only prevented Carrascoso
Neither is there evidence as to whether or not a prior reservation was made by from enjoying his right to a first class seat; worse, he imposed his arbitrary will;
the white man. Hence, if the employees of the defendant at Bangkok sold a first- he forcibly ejected him from his seat, made him suffer the humiliation of having
class ticket to him when all the seats had already been taken, surely the plaintiff to go to the tourist class compartment - just to give way to another passenger
should not have been picked out as the one to suffer the consequences and to whose right thereto has not been established. Certainly, this is bad faith. Unless,
be subjected to the humiliation and indignity of being ejected from his seat in the of course, bad faith has assumed a meaning different from what is understood in
presence of others. Instead of explaining to the white man the improvidence law. For, "bad faith" contemplates a "state of mind affirmatively operating with
committed by defendant's employees, the manager adopted the more drastic furtive design or with some motive of self-interest or will or for ulterior purpose."
step of ousting the plaintiff who was then safely ensconsced in his rightful seat. 39

We are strengthened in our belief that this probably was what happened there,
by the testimony of defendant's witness Rafael Altonaga who, when asked to And if the foregoing were not yet sufficient, there is the express finding of bad
explain the meaning of the letters "O.K." appearing on the tickets of plaintiff, said faith in the judgment of the Court of First Instance, thus:
"that the space is confirmed for first class. Likewise, Zenaida Faustino, another
The evidence shows that the defendant violated its contract of transportation
witness for defendant, who was the chief of the Reservation Office of defendant,
with plaintiff in bad faith, with the aggravating circumstances that defendant's
testified as follows:
Manager in Bangkok went to the extent of threatening the plaintiff in the
presence of many passengers to have him thrown out of the airplane to give the fare tendered him the cash fare to a point where the train was scheduled not to
"first class" seat that he was occupying to, again using the words of the witness stop, and told him that as soon as the train reached such point he would pay the
Ernesto G. Cuento, a "white man" whom he (defendant's Manager) wished to cash fare from that point to destination, there was nothing in the conduct of the
accommodate, and the defendant has not proven that this "white man" had any passenger which justified the conductor in using insulting language to him, as by
"better right" to occupy the "first class" seat that the plaintiff was occupying, duly calling him a lunatic," 48 and the Supreme Court of South Carolina there held the
paid for, and for which the corresponding "first class" ticket was issued by the carrier liable for the mental suffering of said passenger.1awphîl.nèt
defendant to him.40
Petitioner's contract with Carrascoso is one attended with public duty. The
5. The responsibility of an employer for the tortious act of its employees need stress of Carrascoso's action as we have said, is placed upon his wrongful
not be essayed. It is well settled in law. 41 For the willful malevolent act of expulsion. This is a violation of public duty by the petitioner air carrier — a case
petitioner's manager, petitioner, his employer, must answer. Article 21 of the of quasi-delict. Damages are proper.
Civil Code says:
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus —
ART. 21. Any person who willfully causes loss or injury to another in a manner
that is contrary to morals, good customs or public policy shall compensate the Q You mentioned about an attendant. Who is that attendant and purser?
latter for the damage.
A When we left already — that was already in the trip — I could not help it. So
In parallel circumstances, we applied the foregoing legal precept; and, we held one of the flight attendants approached me and requested from me my ticket
that upon the provisions of Article 2219 (10), Civil Code, moral damages are and I said, What for? and she said, "We will note that you transferred to the
recoverable. 42 tourist class". I said, "Nothing of that kind. That is tantamount to accepting my
transfer." And I also said, "You are not going to note anything there because I
6. A contract to transport passengers is quite different in kind and degree from am protesting to this transfer".
any other contractual relation. 43 And this, because of the relation which an air-
carrier sustains with the public. Its business is mainly with the travelling public. It Q Was she able to note it?
invites people to avail of the comforts and advantages it offers. The contract of
A No, because I did not give my ticket.
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 Q About that purser?
action for damages.
A Well, the seats there are so close that you feel uncomfortable and you don't
Passengers do not contract merely for transportation. They have a right to be have enough leg room, I stood up and I went to the pantry that was next to me
treated by the carrier's employees with kindness, respect, courtesy and due and the purser was there. He told me, "I have recorded the incident in my
consideration. They are entitled to be protected against personal misconduct, notebook." He read it and translated it to me — because it was recorded in
injurious language, indignities and abuses from such employees. So it is, that French — "First class passenger was forced to go to the tourist class against his
any rule or discourteous conduct on the part of employees towards a passenger will, and that the captain refused to intervene."
gives the latter an action for damages against the carrier. 44
Thus, "Where a steamship company 45 had accepted a passenger's check, it
was a breach of contract and a tort, giving a right of action for its agent in the I move to strike out the last part of the testimony of the witness because the best
presence of third persons to falsely notify her that the check was worthless and evidence would be the notes. Your Honor.
demand payment under threat of ejection, though the language used was not
insulting and she was not ejected." 46 And this, because, although the relation of COURT —
passenger and carrier is "contractual both in origin and nature" nevertheless
I will allow that as part of his testimony. 49
"the act that breaks the contract may be also a tort". 47 And in another case,
"Where a passenger on a railroad train, when the conductor came to collect his
Petitioner charges that the finding of the Court of Appeals that the purser made imprimatur thereto. Because, the facts and circumstances point to the
an entry in his notebook reading "First class passenger was forced to go to the reasonableness thereof.57
tourist class against his will, and that the captain refused to intervene" is
predicated upon evidence [Carrascoso's testimony above] which is incompetent. On balance, we say that the judgment of the Court of Appeals does not suffer
We do not think so. The subject of inquiry is not the entry, but the ouster from reversible error. We accordingly vote to affirm the same. Costs against
incident. Testimony on the entry does not come within the proscription of the petitioner. So ordered.
best evidence rule. Such testimony is admissible. 49a

Besides, from a reading of the transcript just quoted, when the dialogue
happened, the impact of the startling occurrence was still fresh and continued to
be felt. The excitement had not as yet died down. Statements then, in this
environment, are admissible as part of the res gestae. 50 For, they grow "out of
the nervous excitement and mental and physical condition of the declarant". 51
The utterance of the purser regarding his entry in the notebook was
spontaneous, and related to the circumstances of the ouster incident. Its
trustworthiness has been guaranteed. 52 It thus escapes the operation of the
hearsay rule. It forms part of the res gestae.

At all events, the entry was made outside the Philippines. And, by an employee
of petitioner. It would have been an easy matter for petitioner to have
contradicted Carrascoso's testimony. If it were really true that no such entry was
made, the deposition of the purser could have cleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in


8. Exemplary damages are well awarded. The Civil Code gives the court ample
power to grant exemplary damages — in contracts and quasi- contracts. The
only condition is that defendant should have "acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner." 53 The manner of ejectment of
respondent Carrascoso from his first class seat fits into this legal precept. And
this, in addition to moral damages.54

9. The right to attorney's fees is fully established. The grant of exemplary

damages justifies a similar judgment for attorneys' fees. The least that can be
said is that the courts below felt that it is but just and equitable that attorneys'
fees be given. 55 We do not intend to break faith with the tradition that discretion
well exercised — as it was here — should not be disturbed.

10. Questioned as excessive are the amounts decreed by both the trial court
and the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by
way of exemplary damages, and P3,000.00 as attorneys' fees. The task of fixing
these amounts is primarily with the trial court. 56 The Court of Appeals did not
interfere with the same. The dictates of good sense suggest that we give our
[Moral] Due to pressing engagements awaiting Senator Lopez and his wife, in the
United States — he had to attend a business conference in San Francisco the
G.R. No. L-22415 March 30, 1966 next day and she had to undergo a medical check-up in Mayo Clinic, Rochester,
Minnesota, on May 28, 1960 and needed three days rest before that in San
FERNANDO LOPEZ, ET AL., plaintiffs-appellants,
Francisco — Senator Lopez and party were constrained to take PAN-AM's flight
from Tokyo to San Francisco as tourist passengers. Senator Lopez however
PAN AMERICAN WORLD AIRWAYS, defendant-appellant.
made it clear, as indicated in his letter to PAN-AM's Tokyo office on that date
Ross, Selph and Carrascoso for the defendant-appellant. (Exh. A), that they did so "under protest" and without prejudice to further action
Vicente J. Francisco for the plaintiffs-appellants. against the airline.1äwphï1.ñët

BENGZON, J.P., J.: Suit for damages was thereafter filed by Senator Lopez and party against PAN-
AM on June 2, 1960 in the Court of First Instance of Rizal. Alleging breach of
Plaintiffs and defendant appeal from a decision of the Court of First Instance of contracts in bad faith by defendant, plaintiffs asked for P500,000 actual and
Rizal. Since the value in controversy exceeds P200,000 the appeals were taken moral damages, P100,000 exemplary damages, P25,000 attorney's fees plus
directly to this Court upon all questions involved (Sec. 17, par. 3[5], Judiciary costs. PAN-AM filed its answer on June 22, 1960, asserting that its failure to
Act). provide first class accommodations to plaintiffs was due to honest error of its
employees. It also interposed a counterclaim for attorney's fees of P25,000.
Stated briefly the facts not in dispute are as follows: Reservations for first class
accommodations in Flight No. 2 of Pan American World Airways — hereinafter Subsequently, further pleadings were filed, thus: plaintiffs' answer to the
otherwise called PAN-AM — from Tokyo to San Francisco on May 24, 1960 counterclaim, on July 25, 1960; plaintiffs' reply attached to motion for its
were made with admittance, on December 2, 1961; defendant's supplemental answer, on March
PAN-AM on March 29, 1960, by "Your Travel Guide" agency, specifically, by 8, 1962; plaintiffs' reply to supplemental answer, on March 10, 1962; and
Delfin Faustino, for then Senator Fernando Lopez, his wife Maria J. Lopez, his defendant's amended supplemental answer, on July 10, 1962.
son-in-law Alfredo Montelibano, Jr., and his daughter, Mrs. Alfredo Montelibano,
Jr., (Milagros Lopez Montelibano). PAN-AM's San Francisco head office After trial — which took twenty-two (22) days ranging from November 25, 1960
confirmed the reservations on March 31, 1960. to January 5, 1963 — the Court of First Instance rendered its decision on
November 13, 1963, the dispositive portion stating:
First class tickets for the abovementioned flight were subsequently issued by
PAN-AM on May 21 and 23, 1960, in favor of Senator Lopez and his party. The In view of the foregoing considerations, judgment is hereby rendered in favor of
total fare of P9,444 for all of them was fully paid before the tickets were issued. the plaintiffs and against the defendant, which is accordingly ordered to pay the
plaintiffs the following: (a) P100,000.00 as moral damages; (b) P20,000.00 as
As scheduled Senator Lopez and party left Manila by Northwest Airlines on May exemplary damages; (c) P25,000.00 as attorney's fees, and the costs of this
24, 1960, arriving in Tokyo at 5:30 P.M. of that day. As soon as they arrived action.
Senator Lopez requested Minister Busuego of the Philippine Embassy to contact
PAN-AM's Tokyo office regarding their first class accommodations for that So ordered.
evening's flight. For the given reason that the first class seats therein were all
Plaintiffs, however, on November 21, 1963, moved for reconsideration of said
booked up, however, PAN-AM's Tokyo office informed Minister Busuego that
judgment, asking that moral damages be increased to P400,000 and that six per
PAN-AM could not accommodate Senator Lopez and party in that trip as first
cent (6%) interest per annum on the amount of the award be granted. And
class passengers. Senator Lopez thereupon gave their first class tickets to
defendant opposed the same. Acting thereon the trial court issued an order on
Minister Busuego for him to show the same to PAN-AM's Tokyo office, but the
December 14, 1963, reconsidering the dispositive part of its decision to read as
latter firmly reiterated that there was no accommodation for them in the first
class, stating that they could not go in that flight unless they took the tourist
class therein.
In view of the foregoing considerations, judgment is hereby rendered in favor of tourist class, although they had first class tickets, which they had previously
the plaintiffs and against the defendant, which is accordingly ordered to pay the confirmed, because their seats in first class were given to "passengers from
plaintiffs the following: (a) P150,000.00 as moral damages; (b) P25,000.00 as London."
exemplary damages; with legal interest on both from the date of the filing of the
complaint until paid; and (c) P25,000.00 as attorney's fees; and the costs of this Against the foregoing, however, defendant's evidence would seek to establish
action. its theory of honest mistake, thus:

So ordered. The first class reservations of Senator Lopez and party were made on March 29,
1960 together with those of four members of the Rufino family, for a total of eight
It is from said judgment, as thus reconsidered, that both parties have appealed. (8) seats, as shown in their joint reservation card (Exh. 1). Subsequently on
March 30, 1960, two other Rufinos secured reservations and were given a
Defendant, as stated, has from the start admitted that it breached its contracts separate reservation card (Exh. 2). A new reservation card consisting of two
with plaintiffs to provide them with first class accommodations in its Tokyo-San pages (Exhs. 3 and 4) was then made for the original of eight passengers,
Francisco flight of May 24, 1960. In its appeal, however, it takes issue with the namely, Senator Lopez and party and four members of the Rufino family, the
finding of the court a quo that it acted in bad faith in the branch of said contracts. first page (Exh. 3) referring to 2 Lopezes, 2 Montelibanos and 1 Rufino and the
Plaintiffs, on the other hand, raise questions on the amount of damages second page (Exh. 4) referring to 3 Rufinos. On April 18, 1960 "Your Travel
awarded in their favor, seeking that the same be increased to a total of Guide" agency cancelled the reservations of the Rufinos. A telex message was
P650,000. thereupon sent on that date to PAN-AM's head office at San Francisco by
Mariano Herranz, PAN-AM's reservations employee at its office in Escolta,
Anent the issue of bad faith the records show the respective contentions of the
Manila. (Annex A-Acker's to Exh. 6.) In said message, however, Herranz
parties as follows.
mistakenly cancelled all the seats that had been reserved, that is, including
According to plaintiffs, defendant acted in bad faith because it deliberately those of Senator Lopez and party.
refused to comply with its contract to provide first class accommodations to
The next day — April 1960 — Herranz discovered his mistake, upon seeing the
plaintiffs, out of racial prejudice against Orientals. And in support of its
reservation card newly prepared by his co-employee Pedro Asensi for Sen.
contention that what was done to plaintiffs is an oftrepeated practice of
Lopez and party to the exclusion of the Rufinos (Exh. 5). It was then that
defendant, evidence was adduced relating to two previous instances of alleged
Herranz sent another telex wire to the San Francisco head office, stating his
racial discrimination by defendant against Filipinos in favor of "white"
error and asking for the reinstatement of the four (4) first class seats reserved
passengers. Said previous occasions are what allegedly happened to (1) Benito
for Senator Lopez and party (Annex A-Velasco's to Exh. 6). San Francisco head
Jalbuena and (2) Cenon S. Cervantes and his wife.
office replied on April 22, 1960 that Senator Lopez and party are waitlisted and
And from plaintiffs' evidence this is what allegedly happened; Jalbuena bought a that said office is unable to reinstate them (Annex B-Velasco's to Exh. 6).
first class ticket from PAN-AM on April 13, 1960; he confirmed it on April 15,
Since the flight involved was still more than a month away and confident that
1960 as to the Tokyo-Hongkong flight of April 20, 1960; PAN-AM similarly
reinstatement would be made, Herranz forgot the matter and told no one about it
confirmed it on April 20, 1960. At the airport he and another Oriental — Mr. Tung
except his co-employee, either Armando Davila or Pedro Asensi or both of them
— were asked to step aside while other passengers - including "white"
(Tsn., 123-124, 127, Nov. 17, 1961).
passengers — boarded PAN-AM's plane. Then PAN-AM officials told them that
one of them had to stay behind. Since Mr. Tung was going all the way to Subsequently, on April 27, 1960, Armando Davila, PAN-AM's reservations
London, Jalbuena was chosen to be left behind. PAN-AM's officials could only employee working in the same Escolta office as Herranz, phoned PAN-AM's
explain by saying there was "some mistake". Jalbuena thereafter wrote PAN-AM ticket sellers at its other office in the Manila Hotel, and confirmed the
to protest the incident (Exh. B). reservations of Senator Lopez and party.
As to Cenon S. Cervantes it would appear that in Flight No. 6 of PAN-AM on PAN-AM's reservations supervisor Alberto Jose, discovered Herranz's mistake
September 29, 1958 from Bangkok to Hongkong, he and his wife had to take after "Your Travel Guide" phone on May 18, 1960 to state that Senator Lopez
and party were going to depart as scheduled. Accordingly, Jose sent a telex wire interest, and not personal ill-will, may well have been the motive; but it is malice
on that date to PAN-AM's head office at San Francisco to report the error and nevertheless."
asked said office to continue holding the reservations of Senator Lopez and
party (Annex B-Acker's to Exh. 6). Said message was reiterated by Jose in his As of May 18, 1960 defendant's reservations supervisor, Alberto Jose knew that
telex wire of May 19, 1960 (Annex C-Acker's to Exh. 6). San Francisco head plaintiffs' reservations had been cancelled. As of May 20 he knew that the San
office replied on May 19, 1960 that it regrets being unable to confirm Senator Francisco head office stated with finality that it could not reinstate plaintiffs'
Lopez and party for the reason that the flight was solidly booked (Exh. 7). Jose cancelled reservations. And yet said reservations supervisor made the
sent a third telex wire on May 20, 1960 addressed to PAN-AM's offices at San "decision" — to use his own, word — to withhold the information from the
Francisco, New York (Idlewild Airport), Tokyo and Hongkong, asking all-out plaintiffs. Said Alberto Jose in his testimony:
assistance towards restoring the cancelled spaces and for report of
Q Why did you not notify them?
cancellations at their end (Annex D-Acker's to Exh. 6). San Francisco head
office reiterated on May 20, 1960 that it could not reinstate the spaces and A Well, you see, sir, in my fifteen (15) years of service with the air lines business
referred Jose to the Tokyo and Hongkong offices (Exh. 8). Also on May 20, the my experience is that even if the flights are solidly booked months in advance,
Tokyo office of PAN-AM wired Jose stating it will do everything possible (Exh. usually the flight departs with plenty of empty seats both on the first class and
9). tourist class. This is due to late cancellation of passengers, or because
passengers do not show up in the airport, and it was our hope others come in
Expecting that some cancellations of bookings would be made before the flight
from another flight and, therefore, are delayed and, therefore, missed their
time, Jose decided to withhold from Senator Lopez and party, or their agent, the
connections. This experience of mine, coupled with that wire from Tokyo that
information that their reservations had been cancelled.
they would do everything possible prompted me to withhold the information, but
Armando Davila having previously confirmed Senator Lopez and party's first unfortunately, instead of the first class seat that I was hoping for and which I
class reservations to PAN-AM's ticket sellers at its Manila Hotel office, the latter anticipated only the tourists class was open on which Senator and Mrs. Lopez,
sold and issued in their favor the corresponding first class tickets on the 21st Mr. and Mrs. Montelibano were accommodated. Well, I fully realize now the
and 23rd of May, 1960. gravity of my decision in not advising Senator and Mrs. Lopez, Mr. and Mrs.
Montelibano nor their agents about the erroneous cancellation and for which I
From the foregoing evidence of defendant it is in effect admitted that defendant would like them to know that I am very sorry.
— through its agents — first cancelled plaintiffs, reservations by mistake and
thereafter deliberately and intentionally withheld from plaintiffs or their travel xxx xxx xxx
agent the fact of said cancellation, letting them go on believing that their first
Q So it was not your duty to notify Sen. Lopez and parties that their reservations
class reservations stood valid and confirmed. In so misleading plaintiffs into
had been cancelled since May 18, 1960?
purchasing first class tickets in the conviction that they had confirmed
reservations for the same, when in fact they had none, defendant wilfully and A As I said before it was my duty. It was my duty but as I said again with respect
knowingly placed itself into the position of having to breach its a foresaid to that duty I have the power to make a decision or use my discretion and
contracts with plaintiffs should there be no last-minute cancellation by other judgment whether I should go ahead and tell the passenger about the
passengers before flight time, as it turned out in this case. Such actuation of cancellation. (Tsn., pp. 17-19, 28-29, March 15, 1962.)
defendant may indeed have been prompted by nothing more than the promotion
of its self-interest in holding on to Senator Lopez and party as passengers in its At the time plaintiffs bought their tickets, defendant, therefore, in breach of its
flight and foreclosing on their chances to seek the services of other airlines that known duty, made plaintiffs believe that their reservation had not been
may have been able to afford them first class accommodations. All the time, in cancelled. An additional indication of this is the fact that upon the face of the two
legal contemplation such conduct already amounts to action in bad faith. For tickets of record, namely, the ticket issued to Alfredo Montelibano, Jr. on May
bad faith means a breach of a known duty through some motive of interest or ill- 21, 1960 (Exh. 22) and that issued to Mrs. Alfredo Montelibano, Jr., on May 23,
will (Spiegel vs. Beacon Participations, 8 NE 2d 895, 907). As stated in Kamm v. 1960 (Exh. 23), the reservation status is stated as "OK". Such willful-non-
Flink, 113 N.J.L. 582, 175 A. 62, 99 A.L.R. 1, 7: "Self-enrichment or fraternal disclosure of the cancellation or pretense that the reservations for plaintiffs stood
— and not simply the erroneous cancellation itself — is the factor to which is public good, in breach of contract where the defendant acted in a wanton,
attributable the breach of the resulting contracts. And, as above-stated, in this fraudulent, reckless, oppressive or malevolent manner (Articles 2229, 2232,
respect defendant clearly acted in bad faith. New Civil Code). And, third, a written contract for an attorney's services shall
control the amount to be paid therefor unless found by the court to be
As if to further emphasize its bad faith on the matter, defendant subsequently unconscionable or unreasonable (Sec. 24, Rule 138, Rules of Court).
promoted the employee who cancelled plaintiffs' reservations and told them
nothing about it. The record shows that said employee — Mariano Herranz — First, then, as to moral damages. As a proximate result of defendant's breach in
was not subjected to investigation and suspension by defendant but instead was bad faith of its contracts with plaintiffs, the latter suffered social humiliation,
given a reward in the form of an increase of salary in June of the following year wounded feelings, serious anxiety and mental anguish. For plaintiffs were
(Tsn., 86-88, Nov. 20, 1961). travelling with first class tickets issued by defendant and yet they were given
only the tourist class. At stop-overs, they were expected to be among the first-
At any rate, granting all the mistakes advanced by the defendant, there would at class passengers by those awaiting to welcome them, only to be found among
least be negligence so gross and reckless as to amount to malice or bad faith the tourist passengers. It may not be humiliating to travel as tourist passengers;
(Fores vs. Miranda, L-12163, March 4, 1959; Necesito v. Paras, L-10605-06, it is humiliating to be compelled to travel as such, contrary to what is rightfully to
June 30, 1958). Firstly, notwithstanding the entries in the reservation cards be expected from the contractual undertaking.
(Exhs. 1 & 3) that the reservations cancelled are those of the Rufinos only,
Herranz made the mistake, after reading said entries, of sending a wire Senator Lopez was then Senate President Pro Tempore. International carriers
cancelling all the reservations, including those of Senator Lopez and party (Tsn., like defendant know the prestige of such an office. For the Senate is not only the
pp. 108-109, Nov. 17, 1961). Secondly, after sending a wire to San Francisco Upper Chamber of the Philippine Congress, but the nation's treaty-ratifying
head office on April 19, 1960 stating his error and asking for reinstatement, body. It may also be mentioned that in his aforesaid office Senator Lopez was in
Herranz simply forgot about the matter. Notwithstanding the reply of San a position to preside in impeachment cases should the Senate sit as
Francisco head Office on April 22, 1960 that it cannot reinstate Senator Lopez Impeachment Tribunal. And he was former Vice-President of the Philippines.
and party (Annex B-Velasco's to Exh. 6), it was assumed and taken for granted Senator Lopez was going to the United States to attend a private business
that reinstatement would be made. Thirdly, Armando Davila confirmed plaintiff's conference of the Binalbagan-Isabela Sugar Company; but his aforesaid rank
reservations in a phone call on April 27, 1960 to defendant's ticket sellers, when and position were by no means left behind, and in fact he had a second
at the time it appeared in plaintiffs' reservation card (Exh. 5) that they were only engagement awaiting him in the United States: a banquet tendered by Filipino
waitlisted passengers. Fourthly, defendant's ticket sellers issued plaintiffs' tickets friends in his honor as Senate President Pro Tempore (Tsn., pp. 14-15, Nov. 25,
on May 21 and 23, 1960, without first checking their reservations just before 1960). For the moral damages sustained by him, therefore, an award of
issuing said tickets. And, finally, no one among defendant's agents notified P100,000.00 is appropriate.
Senator Lopez and party that their reservations had been cancelled, a
precaution that could have averted their entering with defendant into contracts Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige and therefore
that the latter had already placed beyond its power to perform. his humiliation. In addition she suffered physical discomfort during the 13-hour
trip,(5 hours from Tokyo to Honolulu and 8 hours from Honolulu to San
Accordingly, there being a clear admission in defendant's evidence of facts Francisco). Although Senator Lopez stated that "she was quite well" (Tsn., p. 22,
amounting to a bad faith on its part in regard to the breach of its contracts with Nov. 25, 1960) — he obviously meant relatively well, since the rest of his
plaintiffs, it becomes unnecessary to further discuss the evidence adduced by statement is that two months before, she was attackedby severe flu and lost 10
plaintiffs to establish defendant's bad faith. For what is admitted in the course of pounds of weight and that she was advised by Dr. Sison to go to the United
the trial does not need to be proved (Sec. 2, Rule 129, Rules of Court). States as soon as possible for medical check-up and relaxation, (Ibid). In fact,
Senator Lopez stated, as shown a few pages after in the transcript of his
Addressing ourselves now to the question of damages, it is well to state at the testimony, that Mrs. Lopez was sick when she left the Philippines:
outset those rules and principles. First, moral damages are recoverable in
breach of contracts where the defendant acted fraudulently or in bad faith (Art. A. Well, my wife really felt very bad during the entire trip from Tokyo to San
2220, New Civil Code). Second, in addition to moral damages, exemplary or Francisco. In the first place, she was sick when we left the Philippines, and then
corrective damages may be imposed by way of example or correction for the with that discomfort which she [experienced] or suffered during that evening, it
was her worst experience. I myself, who was not sick, could not sleep because In view of its nature, it should be imposed in such an amount as to sufficiently
of the discomfort. (Tsn., pp. 27-28, Nov. 25, 1960). and effectively deter similar breach of contracts in the future by defendant or
other airlines. In this light, we find it just to award P75,000.00 as exemplary or
It is not hard to see that in her condition then a physical discomfort sustained for corrective damages.
thirteen hours may well be considered a physical suffering. And even without
regard to the noise and trepidation inside the plane — which defendant Now, as to attorney's fees, the record shows a written contract of services
contends, upon the strengh of expert testimony, to be practically the same in executed on June 1, 1960 (Exh. F) whereunder plaintiffs-appellants engaged the
first class and tourist class — the fact that the seating spaces in the tourist class services of their counsel — Atty. Vicente J. Francisco — and agreedto pay the
are quite narrower than in first class, there beingsix seats to a row in the former sum of P25,000.00 as attorney's fees upon the termination of the case in the
as against four to a row in the latter, and that in tourist class there is very little Court of First Instance, and an additional sum of P25,000.00 in the event the
space for reclining in view of the closer distance between rows (Tsn., p. 24, Nov. case is appealed to the Supreme Court. As said earlier, a written contract for
25, 1960), will suffice to show that the aforesaid passenger indeed experienced attorney's services shall control the amount to be paid therefor unless found by
physical suffering during the trip. Added to this, of course, was the painfull the court to be unconscionable or unreasonable. A consideration of the subject
thought that she was deprived by defendant — after having paid for and matter of the present controversy, of the professional standing of the attorney for
expected the same — of the most suitable, place for her, the first class, where plaintiffs-appellants, and of the extent of the service rendered by him, shows that
evidently the best of everything would have been given her, the best seat, said amount provided for in the written agreement is reasonable. Said lawyer —
service, food and treatment. Such difference in comfort between first class and whose prominence in the legal profession is well known — studied the case,
tourist class is too obvious to be recounted, is in fact the reason for the former's prepared and filed the complaint, conferred with witnesses, analyzed
existence, and is recognized by the airline in charging a higher fare for it and by documentary evidence, personally appeared at the trial of the case in twenty-two
the passengers in paying said higher rate Accordingly, considering the totality of days, during a period of three years, prepared four sets of cross-interrogatories
her suffering and humiliation, an award to Mrs. Maria J. Lopez of P50,000.00 for for deposition taking, prepared several memoranda and the motion for
moral damages will be reasonable. reconsideration, filed a joint record on appeal with defendant, filed a brief for
plaintiffs as appellants consisting of 45 printed pages and a brief for plaintiffs as
Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as immediate members of appellees consisting of 265 printed pages. And we are further convinced of its
the family of Senator Lopez. They formed part of the Senator's party as shown reasonableness because defendant's counsel likewise valued at P50,000.00 the
also by the reservation cards of PAN-AM. As such they likewise shared his proper compensation for his services rendered to defendant in the trial court and
prestige and humiliation. Although defendant contends that a few weeks before on appeal.
the flight they had asked their reservations to be charged from first class to
tourist class — which did not materialize due to alleged full booking in the tourist In concluding, let it be stressed that the amount of damages awarded in this
class — the same does not mean they suffered no shared in having to take appeal has been determined by adequately considering the official, political,
tourist class during the flight. For by that time they had already been made to social, and financial standing of the offended parties on one hand, and the
pay for first class seats and therefore to expect first class accommodations. As business and financial position of the offender on the other (Domingding v. Ng,
stated, it is one thing to take the tourist class by free choice; a far different thing 55 O.G. 10). And further considering the present rate of exchange and the terms
to be compelled to take it notwithstanding having paid for first class seats. at which the amount of damages awarded would approximately be in U.S.
Plaintiffs-appellants now ask P37,500.00 each for the two but we note that in dollars, this Court is all the more of the view that said award is proper and
their motion for reconsideration filed in the court a quo, they were satisfied with reasonable.
P25,000.00 each for said persons. (Record on Appeal, p. 102). For their social
humiliation, therefore, the award to them of P25,000.00 each is reasonable. Wherefore, the judgment appealed from is hereby modified so as to award in
favor of plaintiffs and against defendant, the following: (1) P200,000.00 as moral
The rationale behind exemplary or corrective damages is, as the name implies, damages, divided among plaintiffs, thus: P100,000.00 for Senate President Pro
to provide an example or correction for public good. Defendant having breached Tempore Fernando Lopez; P50,000.00 for his wife Maria J. Lopez; P25,000.00
its contracts in bad faith, the court, as stated earlier, may award exemplary for his son-in-law Alfredo Montelibano, Jr.; and P25,000.00 for his daughter Mrs.
damages in addition to moral damages (Articles 2229, 2232, New Civil Code). Alfredo Montelibano, Jr.; (2) P75,000.00 as exemplary or corrective damages;
(3) interest at the legal rate of 6% per annum on the moral and exemplary
damages aforestated, from December 14, 1963, the date of the amended
decision of the court a quo, until said damages are fully paid; (4) P50,000.00 as
attorney's fees; and (5) the costs. Counterclaim dismissed.So ordered.
FRANCISCO ORTIGAS, JR., plaintiff-appellant-appellee,
COSTS. (Pp. 12-13, p. 118, Record.)
LUFTHANSA GERMAN AIRLINES, defendant-appellant-appellee.
On the other hand, plaintiff's sole ground for his appeal is that "the trial court
Baizas, Alberto and Associates for appellant Lufthansa German Airlines.
erred in ordering Lufthansa to pay Ortigas only P100,000 as moral damages,
Pelaez, Jalandoni and Jamir for appellant Francisco Ortigas, Jr. P20,000 as exemplary or corrective damages, and P20,000 as attorney's fees."
(Plaintiff-Appellant's Brief, p. a.) Thus, apart from the contention of defendant
that it has been denied its full day in court, the only issue raised by both
appellants relate to the amount of the damages awarded by the trial court,
BARREDO, J.: plaintiff claiming it is less than he is entitled to and the defendant insisting on the
Direct appeals of both parties plaintiff, Francisco Ortigas, and defendant
Lufthansa German Airlines, from the decision of the Court of First Instance of Lufthansa maintains it has not had its full day in court because the trial court
Manila, Branch X, "condemning the defendant to pay plaintiff the amount of abruptly ended the trial by denying its last motion for postponement
P100,000 as moral damages, P30,000 as exemplary or corrective damages, notwithstanding it was well founded and forthwith ordering the striking out of the
with interest on both sums at the legal rate from the commencement of this suit testimony of its absent witness whose cross-examination had not been finished
until fully paid, P20,000 as attorney's fees and the costs" for the former's failure and then declaring the case submitted for decision. In this connection, the
to "comply with its obligation to give first class accommodation to (the latter) a record reveals the following facts:
(Filipino) passenger holding a first class ticket," aggravated by the giving of the
space instead to a Belgian and the improper conduct of its agents in dealing with Plaintiff's complaint was filed with the court below on December 24, 1963 and
him during the occasion of such discriminatory violation of its contract of after issues were joined, a pre-trial was held, the parties submitted a partial
carriage. stipulation of facts and thereafter went to trial, the last day of which was on
September 28, 1966. As to what happened in between, a detailed account is
Defendant buttresses its appeal on the following: made in the brief of Ortigas as plaintiff-appellee as follows:

ASSIGNMENT OF ERRORS ... Thereafter the case was set for hearing twenty four (24) times, or on April 27,
1964, July 9, 1964, August 20, 1964, October 1, 1964, November 11, 1964,
December 22, 1964, February 3, 1965, March 18, 1965, May 5, 1965, June 11,
THE LOWER COURT ACTED WITH GRAVE ABUSE OF DISCRETION IN 1965, July 22, 1965, August 26, 1965 and September 8, 1965, September 22,
DENYING THE DEFENDANT'S URGENT MOTION FOR POSTPONEMENT 1965, November 3, 1965, November 24, 1965, December 17, 1965, December
DATED SEPTEMBER 24, 1966. 29, 1965, January 14, 1966, February 2, 1966, April 19, 1966, April 20, 1966,
July 5, 6 and 7, 1966, August 25, 1966 and September 28, 1966.
One (1) hearing, or that of August 25, 1966, was cancelled because the trial
THE LOWER COURT CONSEQUENTLY ERRED IN ORDERING THE judge, Hon. Jose L. Moya, was then sick. Other postponements were as follows:

Three (3) settings were cancelled upon motion of plaintiff on grounds that Of the remaining 16 settings, at least TEN (10) were postponed or could not
defendant's counsel (Atty. Crispin Baizas) himself must have found sufficient, for proceed except for a few minutes because either Atty. Crispin Baizas, counsel
he gave his conformity thereto. These were the hearings set for: for defendant, was not available or needed time to prepare or had to attend a
meeting somewhere else, or, as in the case of September 28, 1966, defendants
July 9, 1964 — postponed upon plaintiff's motion, dated June 27, 1964, or 12 witnesses wanted to avoid the inconvenience of coming to the Philippines. The
days before the hearing, on the ground that he had to attend an important situation became such that on two (2) occasions the court a quo warned the
business matter in Mindanao, which was so urgent that "for plaintiff to even defendant and/or its counsel that it was postponing the trial "for the last time"
make a flying trip to Manila for the scheduled hearing might jeopardize and and "definitely for the last time." Thus:
render to naught a project to which plaintiff has already expended considerable
time, money and effort" (RA— pp. 28-29. Note: All reference herein will be to February 3, 1965 — On this date, although plaintiff was ready to present his
plaintiff's Record on Appeal). evidence and the Court to hear the parties, Atty. Baizas asked for postponement
for the reason that he had to be somewhere else. The undersigned graciously
August 26, 1965 — postpone upon plaintiff's motion, dated August 23, 1965, for obliged by not objecting, albeit the motion was made without warning and in
the reason that he was in London for business reasons and could not return to open court.
the Philippines on time for the hearing. This motion is not reproduced in any
Record on Appeal but is admitted. March 18, 1965 — Once again the hearing scheduled for this date was
postponed on motion of Atty. Baizas in open court. The undersigned did not
July 5-7, 1966 — 18 days before the dates set for the hearing, counsel for object because, as far as he can now recall, the excuse given was that opposite
plaintiff filed a motion, dated June 17, 1966, for Postponement on the ground counsel had another appointment.
that Atty. Rodegelio M. Jalandoni, who had been personally handling this case
was then in Washington, D.C. on business and would not be back until the June 11, 1965 — The Court was free the whole morning of this day and plaintiff
middle part of August, 1966. Considering that the trial of the case was far actually took the witness stand. After plaintiff was through with his direct
advanced, it would be difficult for another lawyer to substitute for Atty. Jalandoni. testimony, Atty. Zaida R. Alberto, who appeared for the defendant, asked that
Defendant's counsel agreed to the motion (RA — pp. 50-51). the cross-examination be postponed for the next hearing, on the ground that
Atty. Baizas knew more of the defense. The following appears of record:
Postponement at instance of both parties
Four (4) settings, or those of August 20, 1964, October 1, 1964, November 11,
1964 and December 22, 1964, were cancelled upon the joint motion of the If Your Honor please, may I request to allow the cross examination at the next
parties on the ground that negotiations for the possible settlement of this case hearing.
were pending (RA — pp. 31-34).
While both attorneys for plaintiff and defendant signed the joint motions for
postponement, the initiative to have the hearings cancelled actually came from You can handle the cross examination now.
defendant's counsel who claimed that he needed time to consult with his client.
Plaintiff welcomed the possibility of compromise and acceded to join the
requests for postponement but became impatient at and suspicious of the The defense are more in the knowledge of Atty. Baizas.
attempt to delay so that in the motion to postpone the December 22, 1964
hearing, plaintiff insisted on the insertion of the phrase "be postponed for the last COURT:
time" (RA — p. 34).1äwphï1.ñët These took place after the pre-trial but before
plaintiff had started presenting his evidence. If you postpone the cross-examination we will forget the testimony and will be
spending much time referring to his testimony, so you better cross-examine him
Postponement at instance of defendant while his testimony is still fresh.

May I ask for a reconsideration, Your Honor, anyway it is past 11:00 o'clock I do The PAL Board of Directors' meeting was certainly not more important than the
not think there will be enough time. occupation of the Court, and it was still early, but counsel was insistent. The
Court was beginning to be perturbed by the dilatory motions; yet it granted
COURT: counsel's requested postponement but "for the last time." Thus:
We still have one hour. "ATTY. BAIZAS:

ATTY. ALBERTO: That is all. May I make that request, Your Honor, that it is simply that I have to
be present at the meeting. I wish to finish my cross examination on Atty. Ortigas
I ask for a reconsideration, Your Honor.
but it is merely that the meeting is held for today at 10:00 o'clock and I would like
COURT: to ask for a postponement to continue the cross examination.

On motion of the defendant's counsel, the continuation of the trial is postponed COURT:
to July 22, 1965, at 8:30 a.m. The parties were notified in open court of this new
I will grant this for the last time. On motion of Atty. Baizas, the continuation of
assignment." (t.s.n. pp. 43-44, June 11, 1965)
the hearing is postponed for the last time to December 17, 1965, at 8:30 a.m.,
Notwithstanding there was an hour left, which was precious considering the by agreement between him and Atty. Jalandoni." (t.s.n., p. 17, November 24,
crowded calendar of the Court, and Judge Moya wanted to hear the cross- 1965)
examination because plaintiff's testimony was fresh, the Court pleased counsel
December 17, 1965 — Although at the hearing of November 24, 1965 trial was
for the defendant and postponed the hearing to July 22, 1965.
postponed for the last time to December 17, 1965, the Court's warning did not
September 22, 1965 — At this hearing the undersigned requested that Dr. Isidro seem to register because on December 7, 1965 defendant's counsel filed
Pertiera be permitted to take the witness stand. He is a heart specialist and it another motion for postponement alleging that he had received a telegram to the
was difficult to bring him to court because of his many patients. His direct effect that the meeting of the Legal Committee of IATA that he was attending,
testimony did not take long, after which Atty. Baizas asked for postponement, for originally scheduled for December 10-15, had been deferred and would begin on
the reason that he did not expect Dr. Pertiera to testify and, since the subject of December 13 and as it was for 5 days, it would not be possible for him to return
the testimony was important and technical, he needed time to be able to cross- for the December 17 hearing; hence, he requested that said hearing be reset for
examine. The undersigned, understanding the predicament of Atty. Baizas, did December 27 and 29. In his undated motion filed on December 7,1965 counsel
not offer any objection. averred that:

November 3, 1965 — This scheduled hearing was postponed upon motion "There is no intention whatever to delay the case but because of the
dated October 7, 1965, of Atty. Baizas on the ground that he was leaving on a circumstances above-stated, undersigned counsel is constrained to ask, for the
business trip abroad. The undersigned again did not object. last time, for the cancellation of the hearing on December 17 and for its resetting
on such dates as may be convenient to this Honorable Court, preferably
November 24, 1965 — It will be recalled that the hearing of September 22, December 27 and 29." (RA — p. 41)
1965, supra, was postponed to enable Atty. Baizas to prepare for his cross-
examination of Dr. Pertiera. On this date, November 24, 1965, Atty. Baizas The undersigned opposed said motion and alleged:
cross-examined briefly the doctor, but announced:
"That this case has been pending since December 24, 1963, or almost two
"ATTY. BAIZAS: years now, and trial thereof has been repeatedly suspended and/or postponed;

May I announce, your Honor, that after I cross-examine the Doctor I will ask for That at the hearing of November 24, 1965, this Honorable Court precisely
a postponement of my cross examination of Atty. Ortigas because I will have to postponed continuation of the trial thereof for the last time to December 17, a
attend a meeting of the PAL Board of Directors this morning. My cross date which was fixed by agreement of the parties;
examination will not be very long." (t.s.n., pp. 34, November 24, 1965)
That when counsel for defendant left, as alleged, on December 6, 1965 he did Lazzari's trip would not be useless. The undersigned likewise did not oppose the
so with full knowledge of the intransferable character of the trial set for transfer of hearing. (Pp. 2-13 — Brief, p. 132 — Record.)
December 17;
Defendant does not seriously deny these facts. Seemingly, the controversy
That defendant can well be represented by Atty. Baizas' associate, Atty. Alberto, between the parties revolves around defendant's motion for postponement of
who, as a matter of fact, handled this case when trial started on June 11, 1965 the hearing set for September 28, 1966 which was denied by the trial court. It is
and has been actively collaborating with Atty. Baizas since then; this denial that is the subject of the first above-quoted alleged errors assigned by
Lufthansa in its brief as defendant-appellant.
That when plaintiff testified on direct examination on June 11, 1965 said Atty.
Alberto appeared for defendant and that plaintiff is now merely due for further At the time this incident of postponement arose, plaintiff had already closed his
cross-examination." (RA — p. 43) evidence, and so it was the turn of the defendant to prove its defenses. The
starting date for this was April 19, 1966, but, upon motion of defendant's
In spite of said opposition, the Trial Court once more granted defendant's counsel, it was deferred to the next day, April 20, 1966, on which date
request but was more categorical this time with its admonition against further defendant's first witness, Ivo Lazzari, took the witness stand. His testimony,
postponements and used the word "definitely" in its order which read: however, was not finished in the morning and afternoon of that day nor during
the whole day of April 22, 1966. Atty. Rodegelio M. Jalandoni was still cross-
examining him when the hearing was continued "to the first available date in the
For the reasons stated in the defendant's motion for postponement and in view calendar". Eventually, the next continuation of the trial was set at first for July 5,
of the fact that it seeks a deferment of the hearing for only a few days, the 6 and 7, 1966, but upon motion of plaintiff's counsel, it was reset for August 25,
continuation of the trial is postponed definitely for the last time to December 29, 1966, on which date, in spite of the presence of Lazzari who came from Rome
1965, at 8:30 a.m. purposely for the trial together with another expected witness, Severino Caselli,
and still another witness, C.H. Dehio, who came from Hongkong, no trial could
"SO ORDERED. be held because of the absence of the judge. Hence, another date, September
28, 1966 was fixed with notice to the parties received by them respectively the
"Manila, Philippines, December 11, 1965. month previous.

JOSE L. MOYA On September 24, 1966, defendant's counsel filed a motion for postponement
Judge" thus:

(RA — p. 46) COMES NOW the defendant by undersigned counsel and to this Honorable
Court respectfully states:
March 10, 1966 — The hearing on this date lasted for only a few minutes, with
the undersigned offering the documentary evidence for the plaintiff. Thereupon, 1
defendant's counsel again asked for postponement so he could go over said
evidence. Since he had no witnesses to present, the Court once more The above-entitled case is set for hearing on September 28, 1966 at 8:30
postponed the trial to April 19, 1966 without any objection on the part of the o'clock in the morning.
April 19, 1966 — The hearing for this day was cancelled upon motion of
defendant's counsel (RA — p. 49) on his representation that defendant's witness The witnesses who are scheduled to testify for the defendant at said hearing are
Ivo Lazzari had arrived from Italy at midnight of April 18, 1.966 and was not in a to come from Rome, Italy;
condition to take the witness stand. The Court again accommodatingly
transferred the hearing to the following day, April 20, 1966, although it had other
cases scheduled for that date and the case at bar was not among them, just so
Word has been received from the defendant that said witn will not be able to On the day set for the hearing, September 28, 1966, Atty. Zaida Ruby S. Alberto
come for the hearing aforementioned. appeared for defendant and verbally moved for reconsideration of the foregoing
order of denial. She argued that:
WHEREFORE, it is respectfully prayed that the hearing of this case scheduled
for September 28 be postponed to some other date most convenient to this Actually, it is not intended to delay the termination of this case. As a matter of
Honorable Court, preferably on any of the following dates: October 21, 17; fact, on August 15, 1966, the date set for the hearing of this case, we were
Novembers, 3, 8, 9 or 11, 1966. ready with the presentation of our evidence as our two witnesses from Rome
were here. But unfortunately, Your Honor was indisposed, so the hearing was
... . (Page 53, Record on Appeal, p. 29, Rec.) postponed to this date. I really do not know why our witness failed to come.
However, I intend to make an inquiry about the matter so that I could file the
On September 27, 1966, plaintiff's counsel filed the following opposition to the
corresponding explanation for their failure to appear in Court today. May I,
above motion:
therefore, reiterate my motion for reconsideration, with the reservation that I be
COMES NOW plaintiff, through undersigned counsel and, in opposition to allowed to file my explanation for the failure of these two witnesses coming from
defendant's urgent motion for postponement, dated September 24, 1966, to this Rome to appear for today's hearing. (Page 2, t.s.n., Sept. 28/66.)
Honorable Court respectfully states:
But as counsel could not give the exact reason why defendant's witness
That this case has been pending since December, 1963; scheduled to testify were absent, the trial court denied the motion; ruling that "no
ground has been alleged in support thereof." (p. 6, t.s.n., September 28, 1966.)
That defendant's aforesaid motion does not give any valid reason for postponing
the hearing, since it does not state why defendant's witnesses cannot come to This order was immediately followed by a motion of plaintiff's counsel for the
Manila on the scheduled dates of continuation of trial; striking out of the entire testimony of the witness, Ivo Lazzari, upon the ground
that counsel had not yet finished his cross-examination of him and his absence
That the convenience and motive of defendant and its witnesses in not exerting was unexplained. No objection appears to have been made to such motion,
every effort to testify are not the concern of the plaintiff, and more so of this albeit counsel for defendant tried to point out that Atty. Jalandoni had already
Honorable Court, and that the speedy and proper administration of justice finished his cross-examination of the witness. After verifying from the records
dictates that the hearing proceed irrespective of defendant's obvious disregard that such was not the case, His Honor issued the following order:
of the need thereofl;
The witness Ivo Lazzari not having appeared at the hearing set for today, for
That defendant's attitude is aggravated by the fact that, being an airline which reason his cross-examination cannot be continued, on motion of the
company, it has all facilities to have its employees available as witnesses at any plaintiff's counsel, his testimony is striken from the record, and this case is
time it desires. deemed submitted for decision on the evidence already presented. (Pp. 57-58,
Rec. on Ap., id.)
WHEREFORE, it is respectfully prayed that defendant's aforesaid motion for
postponement be denied. Thus the trial ended and parties were allowed to submit their respective
... . (Pp. 55-56, id.)
On October 19, 1966, however, defendant's counsel filed the following motion
In view of this opposition, on the same day, His Honor issued an order of denial: for reconsideration:

No reason whatsoever having been alleged or shown why the defendant's MOTION FOR RECONSIDERATION .
witnesses will not be able to come from Rome to Manila on the day of the
hearing, and this case having been pending since December, 1963, the motion COMES NOW defendant by undersigned counsel this Honorable Court moving
for postponement is denied. (Pp. 56-57, id.) for a reconsideration of the orders dated September 27 and September 28,
1966, respectively, respectfully states:
1 was also here to testify. Unfortunately, the Presiding (Judge) of this Honorable
Court was indisposed on that particular morning and so the hearing on said date
On September 26, 1966 a motion for postponement of the hearing on was cancelled. We mention this only to show that the failure of the witnesses to
September 28, 1966 was filed by undersigned counsel for the reason that word come for the hearing on September 28 was not caused by mere inconvenience;
had just been received from the defendant that the witnesses who were
scheduled to testify at the said hearing and who were to come from Rome, Italy, 6
would not be able to come to the Philippines for said hearing. This motion was
denied in the order of September 27, 1966; Defendant had and had no intention to delay the proceedings whatsoever. The
witnesses in question could not come because of certain circumstances that
2 rendered their coming over virtually impossible. Both witnesses, Ivo Lazzari and
Saverino Casilli are employees of defendant company at the Rome office. The
No reason could be stated in the aforesaid motion for postponement because at air traffic in Rome has been particularly heavy this season. Some of the
the time it was prepared, counsel for defendant did not really know the specific personnel of the Lufthansa Rome office were on leave and these two employees
reasons for the inability of said witnesses to come. A simple telex message had had to assume some of the duties of those employees who were on leave, aside
been sent by the Far East Manager of the defendant company to defendant's from performing their own regular duties, If they were to leave their posts to
representatives in Manila advising the latter that the witnesses in question could come for the hearing on September 28, there would be grave disruption to the
not come. Copy of said telex message is attached to and made part of this public service and for this reason they were not able to come. These facts are
motion for reconsideration as Annex "I"; contained in a letter dated September 29, 1966 written to undersigned counsel
by C. H. Dehio, IATA Agency Manager, Far East and Australasia, Lufthansa
German Air Lines, copy of which is attached to and made part of this motion for
For this reason on September 28, 1966, when the case was called, counsel for reconsideration as Annex "2";. The envelope in which said letter contained is
the defendant reiterated the motion for postponement and requested this likewise attached to and made part of this motion as Annex "2-A";
Honorable Court for time to submit an explanation on the failure of defendant's
witnesses to come as a letter elaborating on the matter would surely follow the
telex' message. This request was however denied by the Honorable Court and Witness Ivo Lazzari had first shed his testimony on direct examination and on
upon motion of plaintiff's counsel, another order was issued striking out from the September 28, 1966, opposing counsel was to continue cross-examination of
record the testimony of defendant's only witness so far, Ivo Lazzari, whose said witness. The other witness Saverino Casilli was to be presented after Ivo
cross-examination was to be continued that date, for the latter's failure to appear Lazzari would have finished testifying. Both witnesses are material for the
at the hearing, and deeming the case submitted for decision; defense and no other person could testify on the facts that are the subject of
their testimony. The inability of said witnesses to come for the hearing on
September 28 was not due to any fault or neglect on the part of defendant who
It is alleged by opposing counsel that the witnesses did not come for the hearing in fact had exerted every effort to have them come, but because of the
of September 28, 1966 because it was inconvenient for them and for defendant. supervening circumstances above-described, their coming over could not have
This accusation is absolutely without basis and malicious; been possible without seriously disrupting public service;

5 8

If inconvenience were the only reason for the witnesses' failure to come, then There is no question that the granting or denial of a motion for postponement
they would not also have come previously because it was just as inconvenient rests upon the sound discretion of the court. We submit however that under the
for them then. It will be recalled that Ivo Lazzari had been here in April 1966 circumstances, the ends of justice would have been better served by granting
when he was presented on direct examination and partly on cross-examination. the motion on question. The reason for defendant's motion for postponement is
On August 25, 1966, the case was also scheduled for hearing. All of defendant's valid and meritorious, and the grant of a postponement based on such ground
witnesses came here from Rome, Italy for said hearing. Even Mr. C. H. Dehio would not have adversely affected the substantial rights of plaintiffs.
"Continuances and postponements of trial are part and parcel of our judicial on direct examination of the witness Ivo Lazzari and holding the case submitted
system of justice, and where no substantial rights are affected and the intention for decision on the evidence presented would unduly prejudice defendant's
to delay is not manifest, it is sound judicial discretion to allow them. (Rexwell vs. stand, and would amount to a denial of due process to defendant.
Canlas, No. L-16746, Dec. 30, 1961)
"The paramount interests of justice demand such reasonable allowances as
"There is even authority for the view that the right to a speedy trial is not violated would prevent, without doing an injustice to the opposing party, the loss by a
by granting a continuance on the ground of absence of material witness. (People litigant of his chance to duly present his side of the case before the court. With a
vs. Romero, G.R. No. L-4517-20, May 25, 1953) view of avoiding a possible miscarriage of justice, the exercise of the court's
discretion ought to lean, in a reasonable degree toward bringing about a
The lower court erred in denying a motion for postponement filed by defense to presentation of evidence on both sides. ..." (Gerona vs. Calada, CA-G.R. No.
await arrival of a material witness." (People vs. Narsolis, et al. G.R. No. L-2764, 23955-R March 30, 1963, Tormes vs. Balzado, CA-G.R. No. 32019-R, April 17,
March 24, 1950) 1964.)

"A miscarriage of justice may result from the accidental or excusable absence of WHEREFORE, it is respectfully prayed that the orders of the Honorable Court
a material witness, where presence can be secured by the grant of a reasonable dated September 27, and September 28, 1966, respectively, be reconsidered
continuance." (Luna vs. Arcenas, 34 Phil. 80, 98-99) and set aside; that the testimony of defendant's witness Ivo Lazzari be allowed
to remain on record and that a date be set for the continuation of defendant's
Defendant has a valid and meritorious defense, and if given opportunity to
Manila, Philippines, October 19, 1966.
present its side of the case, it would certainly diminish, if not altogether disprove
plaintiffs claim. CRISPIN D. BAIZAS & ASSOCIATES

... court litigations are primarily for the search of truth. ... A trial by which both By: s/t/ Crispin D. Baizas
parties are given the chance to adduce truth is the best way to find out such Counsel for the defendant
truth. A denial of this chance would be too technical. The dispensation of justice Suite 305 Shurdut Building
and the vindication of grievances should not be barred by technicalities." Intramuros, Manila
(Ronquillo vs. Marasigan, L-11621, May 21, 1962; Santiago vs. Joaquin, L-
15237, May 31, 1963, emphasis ours.) VERIFICATION

"Judicial experience dictates that it is better that cases are tried on the merits I, CRISPIN D. BAIZAS, after having been sworn according to law, depose and
even with a little delay than that substantial rights of a party litigant be sacrificed say:
on the altar of technicality." (Uy vs. Demetillo, CA-G.R. No. 32665-R, Jan. 14,
1964.) I am the counsel for the defendant in the above-entitled case;

9 I have prepared the foregoing motion for reconsideration and all the allegations
contained therein are true and correct of my own knowledge and to the best of
An affidavit of merit by Clarita C. de la Riva, Manager, Rocha & Cua., Inc., my information and belief.
General Sales Agents, Lufthansa German Airlines is likewise attached to and
made an integral part of this motion for reconsideration as Annex "3"; s/t/ CRISPIN D. BAIZAS

10 SUBSCRIBED AND SWORN TO BEFORE ME this 19th day of October. 1966 in

the City of Manila, affiant exhibiting to me his Res. Cert. No. A- 5892423 issued
The order dated September 27, denying defendant's motion for postponement on January 28, 1966 at Makati, Rizal.
and the order of September 28, 1966 striking off from the records the testimony
s/ (Illigible) body of the motion for reconsideration that is sworn to by counsel merely `to the
NOTARY PUBLIC best of his information and belief, or in an affidavit of Mrs. Clarita C. de la Riva
Until December 31, 1967 (Annex 3) who was only referring to hearsay information derived from Mr.
Dehio's aforesaid letter, is insufficient verification of the motion for
Doc. No. 1377 reconsideration under Section 6, Rule 7 of the Rules of Court. Even Mr. Dehio
Page No. 77 had he executed the affidavit himself, would have been disqualified to swear to
Book No. III the facts because he is stationed in Hongkong. So that, when defendant's
Series of 1966. counsel and Mrs. de la Riva verified the motion on "information and belief"
derived from Mr. Dehio's letter, their statements were hearsay thrice removed.
(Pages 58-67, Record on Appeal, id.)
4. But assuming said facts to be true, did this justify the failure of defendant's
to which, plaintiff's counsel filed the following opposition:
witnesses to appear at the scheduled hearing or constitute a valid excuse for
COMES NOW plaintiff, through undersigned counsel, and, in opposition to defendant's inability to present evidence. We respectfully submit that they do
defendant's motion for reconsideration, dated October 19, 1966, to this not. The September 28 hearing was set as early as August 25, 1966, or more
Honorable Court respectfully states that: than one (1) month previous, to suit the schedules not only of this Honorable
Court but of the parties as well. Surely, it was incumbent on defendant, if it has
1. This is in effect the second motion for reconsideration that defendant has filed deference to this Honorable Court and our administration of justice to see to it
against the order of September 27, 1966 denying its motion for postponement of that its witnesses, particularly Ivo Lazzari who was on the witness stand and due
the hearing of September 28. The first motion for reconsideration was made in for cross-examination, would be available, rather than granting leave to its other
open court by Atty. Zaida S. Alberto and denied on the same date. employees and burdening the two needed witnesses with additional work.
Defendant is not a neophyte in the airline business. Assuming arguendo that it is
2. Defendant now claims that it did not intend to delay the trial of this case and true that the volume of air traffic in Europe was high in "September and early
seeks to justify the failure of its witnesses, Ivo Lazzari and Saverino Casilli, to October", it should have foreseen the situation and taken appropriate measures
appear on September 28 on the ground that: to assure compliance with its obligation to this Honorable Court. The witnesses
are defendant's employees and subject to its exclusive control. Instead,
"... The air traffic in Rome has been particularly heavy this season. Some of the
defendant allegedly rendered itself short handed by granting leave to its other
personnel of the Lufthansa Rome office were on leave and these two employees
employees, and now comes to court with a lame excuse requesting that it be
had to assume some of the duties of these employees who were on leave, aside
extricated from a predicament that it has deliberatedly brought upon itself. For
from performing their own regular duties. If they were to leave their posts to
the execuse that with the workload for Mr. Lazzari and Mr. Casilli becoming
come for the hearing on September 28, there would be grave disruption to the
heavier than usual "it would seriously disrupt our service to the travelling public
public service and for this reason they were not able to come. ..." (p. 3,
if, during this time, they were to leave their jobs for several days" (Please see
Defendant's Motion for Reconsideration.)
Mr. Dehio's letter, Annex "2") is lame, by any standard. The local newspapers
3. Note that the above alleged facts are contained in a mere letter that was are constantly carrying news articles of how large and expanded is the
written by a certain Mr. C.H. Dehio, an employee of defendant in Hongkong, to Lufthansa as an airline outfit. Surely, of its hundred (if not thousands) of
its counsel on September 29, 1966, or one day after the hearing of September available employees, two like Lazzari and Casilli could have been dispensed
28, when presumably defendant's aforesaid employee had already been from their work temporarily to defend the company against the just grievance
informed that this Honorable Court had denied the postponement and asserted by an injured passenger before a court of justice. At the most,
considered this case as submitted for decision. Defendant is an airline company defendant was after the promotion of its own interest in holding the two
and has all the telex facilities to communicate in a matter of minutes with its employees to their jobs, and is not avoiding "grave disruption to the public
various agencies. The ground for failure to appear, to wit, supposed pressure of service" as counsel exaggerates Mr. Dehio's expression "seriously disrupt our
work of said employees, is as easy to conceive and gratuitously state as to flick service to the travelling public" two distinct ideas, the latter signifying self-
one's fingers. We wish to call attention to the significant fact that the statement interest as distinguished from public necessity. This Honorable Court can take
of Mr. Dehio in his letter is not under oath. Incorporating said statement in the
judicial notice that there are many other airlines-operating in the same areas as failed to effectively allege the ground for the failure of said witnesses to come,
doe, Lufthansa and competing with it. and even if said ground be admitted as true for argument's sake, it merely
showed "inofficiousness, lack of resourcefulness and diligence, if not total
5. As we explained at the September 28 hearing, the truth of the matter is that, indifference" on the part of defendant to protect in court its interests and to
contrary to the unverified representations of defendant, the reason for the non- prevent needless delays in the discharge of judicial business.
attendance of defendant's witnesses was to avoid the inconvenience of coming
to the Philippines to testify. In other words, after Ivo Lazzari and Saverino Casilli "Postponement not based on valid reasons. — Where a party seeks
were unable to testify last August 25, 1966, defendant thought of avoiding postponement of the hearing of this case for reasons caused by his own
having said witnesses come again to Manila. We say this because sometime on inofficiousness, lack of resourcefulness and diligence if not total indifference to
September 20, 1966, Atty. Leonardo P. Valmonte (an assistant attorney of his own interests or to the interests of those he represents, thereby resulting in
plaintiff who is helping in this case) had a telephone conversation with his failure to present his own evidence, the court would not extend to him its
defendant's counsel, Atty. Zaida S. Alberto in connection with the former's mantle of protection. If it was he who created the situation that brought about the
request for a copy of a certain exhibit, and in the course of their conversation resulting adverse consequences, he cannot plead for his day in court nor claim
Atty. Alberto informed Atty. Valmonte that the trial scheduled for September 28, that he was so denied of it." (De Leon vs. People's Homesite and Housing
1966 would not proceed because they were intending "to secure the permission Corporation, CA-G.R. No. 31169-R, Aug. 31,1963.)
of the court to take the testimonies of their witnesses by way of deposition". In
short, even before the receipt of the alleged telex (Annex "1" of Motion) by 8. In the case of Hap Hong Hardware Co. vs. Philippine Company, GR. No. L-
defendant's counsel on September 22, 1966, said counsel announcing that the 16773 (May 23, 1961), the Supreme Court, in sustaining the trial court's denial
trial could not proceed because they were going to resort to depositions of their of a motion for postponement and on the ground that the defendant's witnesses,
witnesses in Rome, rather than have said witnesses come to Manila. The officers of the company, had not come because it was the beginning of the
decision to take depositions having been made on or before September 20, it milling season in the municipality of San Jose, Mindoro Occidental and their
was an easy matter to have Lufthansa's Hongkong office send the telex of presence in the Central was very, necessary, held that the trial court was
September 22 stating that they would be unable to provide witnesses on perfectly justified in denying said motion for postponement because the reason
September 28. No reason was given why witnesses could not be provided 6 or 7 adduced was "not unavoidable and one that could not have been foreseen."
days thence. If in truth there was unexpected increase in air traffic, surely 6 or 7 Said the Supreme Court:
days were more than sufficient to make the necessary arrangements so that the
"The reason adduced in support of the motion for postponement is not
work of Lazzari and Casilli could be taken over temporarily just so these
unavoidable and one that could not have been foreseen. Defendant ought to
witnesses could appear before this Honorable Court at the appointed date.
have known long before the date of trial that the milling season would start when
Attached hereto as Annex "A" is the affidavit of Atty. Leonardo P. Valmonte on
the trial of the case would be held. The motion should have been presented long
his aforesaid conversation with Atty. Alberto.
in advance of the hearing, so that the court could have taken steps to postpone
6. At the hearing on September 28, when we made reference to the above- the trial without inconvenience to the adverse party. As it is, however, the motion
referred to conversation between Attys. Valmonte and Alberto, the latter did not was presented on the day of the trial. Knowing as it should have known that
deny that she had in truth spoken to Atty. Valmonte in the tenor above related. postponements lie in the court's discretion and there being no apparent reason
As a matter of fact, she admitted that defendant was intending to take the why the defendant could not have presented the motion earlier, thus avoiding
depositions of its witnesses in Rome. inconvenience to the adverse party, the appellant cannot claim that the trial
court erred in denying postponement. Under all the circumstances we hold that
7. When this honorable Court denied the motion for postponement on the Court was perfectly justified in denying the motion for postponement."
September 28, 1966, it did so in the exercise of its sound judicial discretion, for
no valid reason was given why the witnesses could not appear, whereas this In the case at bar, the same unjustified excuse is adduced — that the witnesses,
case had been pending for about three (3) years and had been postponed who are employees (not even officers) of defendant, had work to do, albeit date
several times with repeated warnings on defendant that said postponements of trial was set one month previous.
were for the last time. And now, in its motion for reconsideration, defendant has
9. The cases cited by defendant are not in point, the facts involved therein being short period allowed. Said memorandum was finished on time, and has been
very different from those attending the case at bar. For example, in the cited served on defendant's counsel and submitted to Court. In other words,
case of Lino Luna vs. Arcenas, 34 Phil. 93, the trial judge declined to grant a defendant purposely waited until the submission of plaintiffs memorandum
continuance of a few hours to give counsel an opportunity to secure the before presenting its motion for reconsideration based on alleged information
presence of the defendant. The Supreme Court held that considering that it did received three (3) weeks previous. To grant defendant's instant motion for
not appear that defendant was indulging in dilatory tactics, the denial of the reconsideration would place plaintiff at a great disadvantage, because defendant
motion for short Postponement was improper. Again, in the case of People vs. is now fully aware of every facet of plaintiff's cause and can simply tailor its
Romero, G.R. No. L-4517, May 25, 1953, the prosecution witnesses, although defenses and evidence in refutation thereof.
subpoenaed, failed to appear; whereupon the fiscal asked that they be ordered
arrested and that in the meantime the trial be postponed. The Supreme Court 12. Defendant claims that plaintiff is taking undue advantage of a technicality
likewise held that the denial of the postponement was improper. These fact and it should not be deprived of its day in court on this ground. Suffice it to state
situations, however, as can immediately be seen are completely different from that it is never technical to invoke one's rights, and that while the Rules of Court
that of Lufthansa whose non-presentation of its employees-witnesses was should be liberally construed, their strict observance has been considered
motivated by the desire to avoid inconvenience to them, hence its frustrated plan indispensable to the prevention of needless delays and the orderly and speedy
to have their depositions taken in Rome. discharge of judicial business. Thus:

10. Complaints regarding delays in the disposition of court cases are prevalent "Although the Rules of Court should be liberally construed, however their strict
and have recently found expression not only in executive pronouncements but in observance which have been considered indispensable to the prevention of
judicial admonitions. The unclogging of court dockets remains a pressing needless delays and to the orderly and speedy discharge of judicial business, is
problem to the despair of litigants. As the Court of Appeals put it: as imperative necessity. Thus, the rules prescribing the time within which certain
act must be done, or certain proceedings taken, are considered absolutely
"The records reveals that the trial of the case was postponed five times at the indispensable to the prevention of needless delays and to the orderly and
instance of appellants themselves, and for this reason the trial was delayed for speedy discharge of judicial business, is as imperative necessity. Thus, the rules
more than one year and three months. In granting these several postponements, prescribing the time within which certain act must be done, or certain
the trial judge was over liberal already, and to have allowed another proceedings taken, are considered absolutely indispensable to the prevention of
postponement would have been to jeopardize plaintiff's interest. Obviously needless delays and to the orderly and speedy discharge of judicial business
courts cannot unduly protect the interests of one party to the detriment of the and therefore must be strictly complied with." (Alvero vs. De la Rosa, 76 Phil.
other. Already, there are complaints regarding delays in the disposition of court 428, cited in Francisco on Civil Procedure, Vol. 1, P. 89)
cases. The unclogging of our court dockets still remains a pressing problem in
the despair of many a litigant. However to eliminate, at least minimize, these "Rules of Courts, promulgated by authority of law, have the force and effect of
delays is as much our concern and any act of trial courts conducive towards this law; and rules of court prescribing the time within which certain acts must be
purposeful end will be encouraged by appellate court's." (Rosario vs. De Leon, done, or certain proceedings taken are considered absolutely indispensable to
CA-G.R. No. 6495-R, April 25, 1941; 40 O.G. 752.) the prevention of needless delays and to the orderly and speedy discharge of
judicial business. "Conlu vs. Court of Appeals, et al., G.R. No. L-14027, January
11. Prejudice will be occasioned plaintiff if defendant's belated motion for 29, 1960, citing Shioji vs. Harvey, 43 Phil. 333; Alvero vs. De la Rosa, et al., 42
reconsideration is granted. Notwithstanding defendant's counsel's receipt of Mr. Off. Gaz., p. 316, (Supra.)
Dehio's letter, dated September 25, 1966, a few days after said date, defendant
delayed the filing of its motion for reconsideration until after about three (3) WHEREFORE, it is respectfully prayed that defendant's motion for
weeks later. In the meantime, it knew as of September 28 that this Honorable reconsideration, dated October 19, 1966, be denied.
Court had striken out the testimony of Ivo Lazzari, considered the case
Manila, October 31, 1966. (Pages 74-88, Record on Appeal, id.)
submitted for decision on the evidence on record, and given plaintiff's counsel 7
days to present his memorandum. Plaintiff and his counsel exerted all efforts By way of reply to the above opposition, defendant's counsel alleged:
and worked overtime just so to be able to submit his memorandum within the
Defendant could have from the beginning taken depositions in Rome, but so as can apply here the ruling in Hernandez vs. Andal, 78 Phil. 196, to the effect that
to avoid any inconvenience to plaintiff and that the court may see and hear the "an unassigned error closely related to an error properly assigned or upon which
witnesses testify to better determine the credibility of their testimony defendant the determination of the question raised by the error properly assigned is
had been bringing the witnesses here. As a matter of fact, defendant even dependent, will be considered by the appellate court notwithstanding the failure
without leave of court may take the depositions of its witness by merely giving to assign it as an error." (at pp. 209-210.)
the Court notice of its intention to do so.
Now, with respect to defendant's first assignment of error, We feel that the
"After answer has been filed no leave at court is required as a prerequisite to rather extended recital We have made above of the incidents and proceedings
taking depositions ... (Marzo vs. Moore McCormick Line, Inc. 8 Feb. Rules of related to the trial court's order denying defendant's motion for postponement of
Service, p. 560; cited in Moran Comments on Rules of Court Vol. II, p. 18) the hearing set for September 28, 1966 is self-revealing. It argues against the
charge that His Honor's order of denial was improper and unjustified.
"After issue is joined, depositions may be taken without leave of court. (Lyons
vs. Bronx Towing Line, Inc., 1 Fed. Service p. 341) The case had been pending for about three years and had actually suffered
during that period even more than the usually permissible number of
"After answer is served, depositions may be taken as of course and application continuances, quite often to suit the convenience of defendant's counsel. Notice
should not be made to the court for leave. (Schultz vs. State Mutual Life of the September 28, 1966 schedule had been served on counsel the month
Assurance Company, 1 Fed. Rules of Service, p. 340, US Dist. Ct. Dist. of previous. It must be assumed that due preparations and arrangements were to
Oregon, Oct. 14, 1938) be made since the receipt of that notice to insure the presence in Manila for the
expected witnesses on the date set. Under the circumstances, the excuse given
"The statements made by Atty. Valmonte are false and malicious. An affidavit
by defendant that the witnesses could not leave their respective stations and
executed by Atty. Zaida Ruby Alberto is attached to and made part of this Reply
places of work to attend the trial is plainly unacceptable. There was enough time
as Annex "1". (Pages 92-93, Record on Appeal, id.)
and opportunity for defendant to have made the corresponding adjustments in
On October 24, 1966, the trial court resolved the incident in a brief order holding the assignments of its personnel so as to enable its witnesses to be in court.
that "(f)or the reasons stated in the plaintiff's opposition to the motion for The trouble is that defendant relied on the assumption that the court could be
reconsideration, it is denied." made to wait until the volume and other conditions of its business would permit it
to comply with the schedule of the court. For an airline company engaged in
In its appeal, defendant reiterates insistently its position that the denial of its international transportation and presumably having all the facilities to have any
motion for postponement as well as the order striking out the testimony of Ivo of its employees available practically anywhere in the world at a moment's
Lazzari were issued in grave abuse of discretion and should be set aside. notice, if it only took due care to do this, defendant's attitude cannot be
Before going any further, however, it may be mentioned that since defendant countenanced.
has not assigned as error, although it discusses in its brief, the denial of its last
motion for reconsideration, plaintiff contends that such failure constitutes a bar What is more, the motion of September 24, 1966 gave no reason at all why
to any further consideration of the merits of the arguments of defendant relative defendant's witnesses supposed to come from Rome would be unable to be at
to the main denial-of-postponement and striking-out orders. To be sure, there is the trial. Even as late as the day of the hearing, September 28, 1966, the court
technical plausibility in such pose of plaintiff, but considering the importance of could not be told the reason for such inability. All that counsel could say was that
the other matters involved in this case, it would serve the interests of justice she "intend(ed) to inquire and file the explanation" later. This was not as it
more if We passed on the merits of the substantial issues in this controversy. should have been, for the telex advising the Manila office that the witnesses
After all, "this Court is clothed with ample authority to review matters, even if would not be available was received on September 22nd yet, and certainly there
they are not assigned as errors in the appeal, if it finds that their consideration is was enough time to investigate and find out the reason for such unavailability.
necessary in arriving at a just decision of the case." (Saura Import & Export Co., And as no justifiable reason could be advanced in support of the verbal motion
Inc. vs. Philippine International Surety Co., Inc., L-15184, May 31, 1963, 8 for reconsideration. We cannot say that His Honor acted improperly when he
SCRA 143.) And considering the inter-relation between the omitted assignment denied the same.
of error and those actually assigned and discussed by defendant's counsel, We
We reiterate, the case had been pending for more than three years, with so rendered incapable of doing so. Then there could still be local witnesses, it is no
many postponements, and the least that defendant should have done to merit excuse that presenting other witnesses would have disrupted the presentation of
favorable action on the part of the trial judge was to be ready with an defendant's case, for parties may be allowed to maintain their own way of
explanation of its inability to proceed with the trial, giving the detailed and good presenting their evidence only where this can be done without injury to the
reasons therefor. As it is, there was actually no basis at all for the exercise of expeditious disposition of the case and the best interests of the administration of
discretion on the part of the trial judge in a manner favorable to it. Trials may be justice.
postponed because of the absence of evidence only when such absence is
justified. Mere absence is not a justification in itself. Section 4 of Rule 22 is Coming now to the second assigned error regarding the striking out of the
sufficiently clear on this point. It provides that "A motion to postpone a trial on unfinished testimony of Lazarri, the Court is also of the opinion and so holds that
the ground of absence of evidence can be granted only upon affidavit showing the trial court's action cannot be categorized as arbitrary or oppressive or as
the materiality of evidence expected to be obtained, and that due diligence has amounting to a grave abuse of discretion. To be sure, this second order was but
been used to procure it." This means that it must be shown to the court that due a logical consequence of the previous order denying defendant's motion for
diligence had been exercised in either securing the presence of the evidence postponement. With such denial, the next thing in order was to declare the
(witnesses) or preventing the absence thereof. presentation of evidence of the defendant terminated. Accordingly, it was
necessary to determine what evidence could be considered to be for the
There is, of course, defendant's motion for reconsideration of October 19, 1966 defendant. And so when counsel for plaintiff asked the court to strike out the
praying for the setting aside of the court's order of denial as well as the other testimony so far given by Lazarri, there was practically no alternative for the
order striking out the testimony of witness Lazzari. But, as already noted, the court but to grant the same. Indeed, defendant's counsel could not and did not
only excuse given in said motion is that: offer any objection thereto.

... The witnesses in question could not come because of certain circumstances Oral testimony may be taken into account only when it is complete, that is, if the
that rendered their coming over virtually impossible. Both witnesses, Ivo Lazzari witness has been wholly cross-examined by the adverse party or the right to
and Saverino Casilli are employees of defendant company at the Rome office. cross-examine is lost wholly or in part thru the fault of such adverse party. But
The air traffic in Rome has been particularly heavy this season. Some of the when cross-examination is not and cannot be done or completed due to causes
personnel of the Lufthansa Rome office were on leave and these two employees attributable to the party offering the witness, the uncompleted testimony is
had to assume some of the duties of those employees who were on leave aside thereby rendered incompetent.
from performing their own regular duties. If they were to leave their posts to
come for the hearing on September 28, there would be grave disruption to the The right of a party to cross-examine the witnesses of his adversary is
public service and for this reason they were not able to come. ... (Page 47, Rec. invaluable as it is inviolable in civil cases, no less than the right of the accused in
on Ap., p. 32, Record.) criminal cases. The express recognition of such right of the accused in the
Constitution does not render the right thereto of parties in civil cases less
Indeed, even if such reason were given earlier on September 24, 1966 the court constitutionally based, for it is an indispensable part of the due process
would have been as well justified in denying the requested postponement. We guaranteed by the fundamental law. Subject to appropriate supervision by the
cannot see any reason why, despite its having knowledge of the date of the judge in order to avoid unnecessary delays on account of its being unduly
hearing about a month before, defendant did not see to it that its expected protracted and to needed injunctions protective of the right of the witness
witnesses were not assigned to do duty on the day they were supposed to against self-incrimination and oppressive and unwarranted harrassment and
appear in court. We cannot believe Lufthansa could be so undermanned that embarrassment, a party is absolutely entitled to a full cross-examination as
such a simple adjustment of its personnel had to be "impossible." prescribed in Section 8 of Rule 132 thus: "Upon the termination of the direct
examination, the witness may be cross-examined by the adverse party as to any
Moreover, the Rome based witnesses were not the only possible witnesses of matters stated in the direct examination, or connected therewith, with sufficient
defendant. To begin with, Mr. C.H. Dehio, the IATA Agency Manager, Far East fullness and freedom to test his accuracy and truthfulness and freedom from
and Australasia, Lufthansa German Air Lines, who, according to the record, had interest or bias, or the reverse, and to elicit all important facts bearing upon the
already attended previous hearings as a prospective witness could have been issue." Until such cross-examination has been finished, the testimony of the
made to go to court. There is nothing in the record to show that he was also
witness cannot be considered as complete and may not, therefore, be allowed to Lufthansa had no first class, but only economy, seats available on its Monday
form part of the evidence to be considered by the court in deciding the case. flight.

In the case at bar, however, We have opted not to rely exclusively on the Ortigas answered that he was not willing to take an economy seat and
foregoing considerations. In order to satisfy Ourselves as to whether or not requested the employee to call up other airlines. Then the phone rang. The
defendant stands to be irreparably prejudiced by the impugned action of the trial employee answered and afterwards informed Ortigas that the Lufthansa had a
court relative to the testimony of Lazzari, We have just the same gone over the first class seat available for its Monday flight. Ortigas immediately asked him to
transcript thereof. After considering the same, however, We are of the get the seat and to see to it that his ticket be confirmed and validated for the
impression that even his direct testimony, without taking into account anymore flight and a first class seat. The man thereafter asked for Ortigas' passport and
his answers to the cross-examination questions of counsel for plaintiff, cannot other travel papers and attached a validating sticker (Exhibit "D-1") on flight
be of much weight in establishing the defenses in defendant's answer. But it coupon No. 4 (Exhibit "B") which corresponded to the Rome-Hongkong leg of
would seem more appropriate to elaborate on this point when We come to the his TWA Ticket No. 115-460-461-878 The sticker recites:
discussion of the mutual accusation of the parties that the trial court erred in the
portion of its discretion awarding damages to plaintiff. Flight Res.

The last issue submitted for Our resolution relates to the award of damages Carrier No. Date Time Status
made by the trial court in favor of Ortigas against Lufthansa in the amounts
LH 646 18 Nov. 12:35 P.M. O.K.
aforestated, as to which, as already noted at the outset, both parties have
appealed taking opposite positions. In this respect, the appealed decision made Wishing to be doubly sure, Ortigas again requested the Alitalia employee to call
the following findings and discussion of the material facts: back the Lufthansa office to recheck whether his ticket was really confirmed and
validated. The man did so, after which he told Ortigas that his ticket had been
In October, 1963, the Sharp Travel Service, the travel department of C. F.
checked, validated, and confirmed as shown by the word "O.K." on the sticker.
Sharp, Inc., the majority interest-in-which is held by Rocha y Cia., Inc., General
The same employee later wrote on the cover of the plaintiff's ticket "10.15
Agents of the defendant, Lufthansa German Airlines issued to the plaintiff First
Terminal-36, via Gioliti" (Exhibits "C" and "C-1") and told him to be in the air
Class Pan American Ticket No. 026492147076 to 81 which would take him from
terminal on Monday, November 18, at 10:00 A.M.
Manila, the place of departure, to Hongkong, various cities in the United States,
Europe, Asia, the Far East, and then back to Manila, the place of destination. The following Monday, Ortigas checked out of his hotel and took a taxi to the
Ortigas' ticket for all these different legs of his journey was first class. terminal, arriving there about 9:30 A.M. He unloaded his baggage and
proceeded to the counter in charge of the Lufthansa passengers. The lady at the
He left Manila October 12, 1963, as scheduled. In New York, he decided to
counter told him the Lufthansa had no space for him that day. Ortigas requested
leave out some cities, included in his original itinerary, to be in Hongkong on the
her to check with her main office, which she did by calling it up. After calling, she
19th day of November, 1963, for several appointments he had there. He went to
apologized and said the plaintiff's ticket was in order and would be confirmed
the Trans World Airlines and had his Pan American ticket changed with First
and validated. On her request, Ortigas had his luggage weighed and was given
Class TWA Ticket No. 115-460-451- 878 to 881. His TWA ticket was also first
the free luggage allowance of a first class passenger. He was furthermore asked
class for the entire trip from New York to several European cities, including
to pay 800 liras for bus fare and 700 liras as embarkation tax. Then Ortigas,
Rome, and thence to the Far East, with Manila also as the place of destination.
along with other passengers, one of whom was Amado Castro of the
Ortigas arrived in due course in Rome. To be sure he could fly first class to Development Bank of the Philippines, boarded a bus for the airport.
Hongkong on November 18, 1963, for his appointments there the next day,
At the airport, the plaintiff handed over his ticket to the man behind the
Ortigas repaired to the office of the Alitalia on Saturday, November 16, 1963, to
Lufthansa counter, who told him everything was all right. At that juncture, the
book passage. The man at the counter of the Alitalia office told him it had no
plaintiff heard his name called. He inquired if he was being called from an
flight on Monday but the Lufthansa had. The man thereupon called up the office
employee of the Lufthansa and, on receiving an affirmative answer, said he was
of the Lufthansa and, after talking to an employee thereof, told Ortigas that the
Ortigas. The employee asked for his passport and other papers and, after
examining his passport, where his Filipino nationality appears, said he could not about the change and the request could not be granted. The plaintiff had to
board the plane that day because his seat would be given to a Belgian. Ortigas travel perforce economy from Dharham. In Calcutta, Ortigas once again
asked the man why he was doing that to him when his ticket was confirmed and requested a transfer or that he be assisted in booking passage on other planes
validated first class. The Lufthansa employee replied he was sorry but Ortigas but was also refused. It was only in Bangkok when the chief steward asked him
could not leave. if he wanted to move over to first class but having been already embarrassed
and humiliated and the trip to Hongkong being only three hours, he said he
Fearing he would have a recurrence of his heart ailment, Ortigas took a would not as a sign of protest.
nitroglycerin pill which his doctor advised him to take on occasions of stress.
The plaintiff then told the Lufthansa man to bring the Belgian over so that his In Hongkong, Ortigas protested against the treatment given him but was told by
papers may be examined to determine whether he had a preferred right to the Lufthansa office he had to file his protest in Manila, it being the point of
Ortigas' seat but the Lufthansa employee turned down the request, raised his destination. He did so by means of a letter, dated November 25, 1963 (Exhibit
voice, and said if the plaintiff desired, he could take an economy seat and he "F"), followed by another letter, dated December 20, 1963 (Exhibit "C"), and not
would be allowed a refund. Ortigas retorted he was not interested in a refund having received any definite answer, he brought this suit.
and what he wanted was to travel first class in accordance with his ticket.
Although Ortigas' ticket for the flight from Rome to Hongkong was validated and
This argument occurred in the presence of the other passengers, one of whom confirmed by the Alitalia, its act bound and obligated the Lufthansa. The Alitalia
was Amado Castro, and the plaintiff felt embarrassed and humiliated because and Lufthansa are members of the International Air Transport Association
the Lufthansa employee was shouting at him and treating him the way he did. (IATA). It is admitted that as such member, the Alitalia can issue tickets for other
Ortigas made another request, namely, that the employee call other airlines to members of the association like the Lufthansa, Pan American World Airways,
inquire if they had flights to Hongkong that day but he once more turned down and others. Par. 10, Order of April 29, 1964, and Exhibit "H", certification of the
the plea and insisted that Ortigas travel economy, with the promise that he will manager of the Alitalia. Aside from being members of the IATA, the Alitalia and
be transferred to first class in Cairo and onward to Hongkong. Lufthansa are pool partners and conduct a joint service with interchangeable
flights for the European-Far East-and Australia sectors. Par. 11, Order of April
After promising to, the man went inside a room and, after a while, came out and 29, 1964. Under the pool agreement (Exhibit "DD") they undertake to adhere to
assured the plaintiff he would travel first class from Cairo to Hongkong because the appropriate IATA regulations and to take measures to provide district sales
he sent a communication that it should be done. He then jotted down some offices with every possibility for close cooperation in the promotion of the pool
letters on Ortigas' ticket. The plaintiff replied he was not satisfied with the services covered by the agreement, including "reservation and booking". They
arrangement but was constrained to agree to it because he had to be in furthermore, in effect confirm in the agreement that tickets of one, other than
Hongkong the next day, his luggage was in all probability already inside the free and reduced tickets, may be validated by the other.
plane, he was not certain he could still secure a hotel reservation, the manager
of the hotel where he stayed having told him it would be hard for him to get Finally, Manuel Otayza, general manager of Filital, Inc., which is the general
another reservation once he checks out, and he was assured he would be given agent of the Alitalia in the Philippines, testified that space reservation through
first class passage from Cairo onward. telephone calls between airlines is permitted by IATA's, "Manual of Traffic
Conference Resolutions" and that telephone calls for reservation by one airline
Upon arrival in Cairo, the plaintiff requested the Lufthansa agent to transfer him to another is in fact accepted procedure in accordance with the official airline
to first class but the agent said he could not and that he did not receive any guide of the Air Traffic Conference and International Air Transport Association
communication from Rome to that effect. Ortigas also requested the man to find (Exhibit "W").
out if there were other airlines having planes leaving that day but his request
was likewise denied. The man, however, promised that at Dharham, Ortigas will The placing by the Alitalia of a sticker on the plaintiff's ticket obligated the
be transferred to first class. Ortigas had no alternative but to continue traveling Lufthansa to give him a first class seat on its flight from Rome to Hongkong on
as before but he did so again under protest. November 18, 1963. The same witness, Manuel Otayza, testified that the
placing of a validating sticker on a ticket is standard airline procedure; that a
At Dharham, the plaintiff once more requested a transfer to first class but was sticker changes are status of a reservation; that consequently while Ortigas'
also told by the Lufthansa agent that he had not received any communication ticket was "open", that is, it had no reservation for a particular flight between
Rome and Hongkong, the moment a validating sticker was placed thereon, any reason or explanation whatsoever. His simple request that the Belgian's
stating the flight number of the airline, the day and hour of departure, with the ticket be produced and examined to see who had a better right to a first class
letters "O-K", his ticket was changed from an "open" to a "confirmed" or seat was turned down. So was his equally simple request that other airlines be
"validated" ticket; and that the sticker on Ortigas' ticket meant that first class called to find out if any of them could accept him as a first class passenger to
space was confirmed for him on Lufthansa flight 646 to Hongkong on November Hongkong that day. He was deceived into boarding the Lufthansa plane at
18, 1963, at 12:35 P.M. Rome by falsely assuring him he will be transferred to first class at Cairo, the
next stop in the flight. The same false and deceptive promise was given him at
Aside from Otayza's testimony, it is admitted that in the stipulation of facts that Dharham and Calcutta.
"the letters "O.K." (Exhibit D-2) appearing on the "Res. Status" box of the sticker
(Exhibit D-1) attached to Flight Coupon No. 4 of TWA Ticket No. 015-410:451- Indubitable proof of the defendant's bad faith is found in the fact that while its
880 (Exhibit "D") means space confirmed, per IATA Resolution 275, page 4, employee was assuring the plaintiff he would be transferred to first class in
Issue 2, a photostatic copy of which is attached hereto as Exhibit "O"; that Cairo, he was at the same time writing on his ticket the following notation:
validate means to stamp or write on the passenger ticket an indication that the "TRVLDY/c ROME HEG ROME ST", which means "Travelled economy class
passenger ticket has been officially issued by the carrier; that "the placing of a Rome to Hongkong St", thereby barring Ortigas from asserting any right to
sticker on a flight coupon is a revalidation thereof for the flight mentioned in said demand first class accommodation. The defendant's employee, therefore, knew
sticker and is an alteration effected on said coupon, in accordance with the all along the plaintiff would not travel first class, and yet he deliberately made
procedure laid down in IATA Resolution 275d, Page 1, Issue 1, a photostatic him believe he would be transferred to first class from Cairo to Hongkong.
copy of which is attached thereto as Exhibit "S";. and that "prior endorsement
was not necessary for Alitalia to revalidate TWA Ticket No. 115-410-880 Exhibit From the circumstances, it is clear that the defendant not only breached its duty
"D" because Alitalia is the carrier originally designated in the "Via carrier" box of to the plaintiff but also did not want to release him as a passenger and wished to
said ticket, in accordance with IATA Resolution No. 279, photostatic copy of hold on to him even if it would cause him inconvenience and embarrassment.
which is attached hereto as Exhibit 'T'." (Pages 97-109, Record on Appeal.) .

There was, therefore, a valid and binding contract between Lufthansa and the Disputing the foregoing conclusions, Lufthansa claims firstly that the Alitalia
plaintiff to transport him as a first class passenger from Rome to Hongkong on employee who validated and confirmed Ortigas' reservation must have made a
November 18, 1963, and this agreement the defendant violated by compelling mistake because actually, he was informed by the Lufthansa Rome office that
the plaintiff to travel as an economy passenger. It cannot be said the breach was Ortigas could only be waitlisted. Assuming, however, there was such an error, it
the result of an honest mistake or excusable negligence. There is evidence the has been indisputably proven that under the so-called pool arrangement among
defendant acted with `bad faith and in wilful disregard of the plaintiffs rights. different airline companies pursuant to the International Air Transport
Association (IATA) agreement of which Alitalia and Lufthansa are signatories,
Ortigas' ticket was confirmed on the early morning of November 16, 1963, more both companies are constituted thereby as agents of each other in the issuing of
than 48 hours before his departure on the afternoon of November 18. There tickets and other matters pertaining to their relations with those who would need
was, therefore, ample time to send a telex message from Rome to the their services, and since there can be no question that on its face, the
defendant's main office in Frankfurt, which is only about 2-1/2 flying hours away, annotations made by Alitalia on the ticket here in dispute cannot have any (other
to reserve a first class seat for the plaintiff. meaning than that the reservation of Ortigas for the Rome — Hongkong flight
was validated and confirmed, Lufthansa's disclaimer is unavailing. Besides, it
At the terminal on Via Gioliti, he was again told that he had a first class seat, his appears that when Ortigas checked in at the airport, the Lufthansa lady
luggage was checked in divesting him of control thereof, and transported to the employee thereat told him, after making the proper verification, that the
airport some 37 kilometers distant. He was in this manner deprived of the reservation was correct. What is more, in the unconcluded testimony of Ivo
opportunity of availing himself of the facilities of other airlines and compelled to Lazzari, the striking out of which is questioned by Lufthansa, he admitted that it
take the Lufthansa flight even against his will. was a fact that the said reservation of plaintiff for first class was confirmed, albeit
he qualified that this was done already in the morning of November 18th, the
In the airport, although he, was found entitled to fly first class, he was told after
day of the flight, almost at the last hour. What seems to have happened was that
his Filipino passport was seen, that his seat would be given to a Belgian, without
somehow the first class accommodations for that flight were overboard and in the treatment of passengers this new instance can easily be believed and
Lufthansa tried to solve the problem by downgrading Ortigas to the economy correspondingly dealt with in fixing and assessing the liability of herein
class in favor of a Belgian, as Ortigas was told by the Lufthansa employee who defendant.
paged him over the public address system for the purpose just as he was about
to go to the departure area, with his luggage already checked and his As found by the court below what worsened the situation of Ortigas was that
overweight fees duly paid, so much so that they were already loaded in the Lufthansa succeeded in keeping him as its passenger by assuring him that he
plane. Verily, such treatment given to plaintiff was completely wrong and would be given first class accommodation at Cairo, the next station, the proper
absolutely unjustifiable. Nobody, much less a common carrier who is under arrangements therefor having been made already, when in truth such was not
constant special obligation to give utmost consideration to the convenience of its the case. Thus, instead of complying with the request of Ortigas that other
customers, may be permitted to relieve itself from any difficulty situation created airlines be contacted to find out it they had first class space for him, the
by its own lack of diligence in the conduct of its affairs in a manner prejudicial to Lufthansa employee who had indifferently told him about his downgrading paid
such customers. It is Our considered view that when it comes to contracts of very little attention if ever to said request. And to keep him from giving the
common carriage, inattention and lack of care on the part of the carrier resulting business to another company, he was made to believe that he would be given
in the failure of the passenger to be accommodated in the class contracted for first class accommodation at Cairo. Although molested and embarrassed to the
amounts to bad faith or fraud which entitles the passenger to the award of moral point that he had to take nitroglycerine pills to ward off a possible heart attack,
damages in accordance with Article 2220 of the Civil Code. But in the instant Ortigas hardly had any choice, since his luggage was already in the plane. To
case, the breach appears to be of graver nature, since the preference given to his disappointment, when the plane reached Cairo, he was told by the Lufthansa
the Belgian passenger over plaintiff was done willfully and in wanton disregard office there that no word at all had been received from Rome and they had no
of plaintiff's rights and his dignity as a human being and as a Filipino, who may space for him in first class. Worse, similar false representations were made to
not be discriminated against with impunity. him at Dharham and Calcutta. It was only at Bangkok where for the first time,
Ortigas was at last informed that he could have a first class seat in that leg of
Lufthansa contends, however, that there could not have been any possible the flight, from Bangkok to Hongkong. This Ortigas rejected, if only to make
discrimination by reason of race against Ortigas because from his appearance, patent his displeasure and indignation at being so inconsiderately treated in the
said plaintiff can easily be taken for a European or white more than his own earlier part of his journey.
witness Amado Castro and besides, there were other orientals in the same flight
on that occasion. It is argued that any such policy would be self-defeating, since Lufthansa insists in its brief that it could have proven that there was no such
it would certainly be damaging to its own business. Again, this ratiocination "entrapment of a captive passenger" had it been allowed the postponement it
cannot carry the day for Lufthansa, for what appears from the evidence in this sought of the September 28, 1966 hearing. It is argued that there could have
case is not really a case of a general policy of discriminating against orientals or been no way by which its Rome office could have assured Ortigas about what
non-whites, but a specific act of Lufthansa employee at the airport of giving he would be given in Cairo, the flight being fully booked as it was without any
preference to a Belgian after examining Ortigas passport wherein his Filipino assurance of any first class seat being vacated by then. We are not impressed.
nationality is noted. Indeed, the fact that despite plaintiffs protestations and In view of the insistence of plaintiff that he be given the first class
demand that he be shown how it could happen that somebody else, particularly accommodation he had contracted and paid for, the least that the, Rome office
that Belgian, should be given his place when his reservation was validated and should have done was to communicate with Cairo and strongly urge that all
confirmed and actually, he had already checked in and his baggage was already possible effort be made to comply with his well grounded request. As it
in the plane, nothing was done to satisfy him, merely infused bad faith into the happened, however, the Cairo office informed Ortigas when he arrived there that
breach of contract already committed of depriving plaintiff of his reserved they had not received any word at all from Rome. On the contrary, as pointed
accommodation. In other words, from the legal standpoint, such preference out by the trial court, contrary to the verbal assurance given Ortigas, the
given to a European surely aggravated the damage or injury suffered by plaintiff, Lufthansa employee made annotations on his ticket that he was travelling
but the very act alone of deliberately downgrading him despite his confirmed economy class from Rome to Hongkong. If, as contended by Lufthansa, Ortigas
reservation for first class accommodation is sufficient ground for relief. And was duly advised to make arrangements for transfer to first class as soon as he
considering that there are already recorded cases in this Court wherein Filipinos arrived at each station on the way, why was such notation made that he was
have been similarly discriminated against by foreign airline company employees travelling up to Hongkong in economy class? All these only go to show that any
evidence of defendant tending to disprove the testimony of Ortigas would in any "may well be considered as nominal and also as exemplary, the Court of
event have been inconclusive or unreliable. Appeals having modified the trial court's designation thereof as moral, saying it
should have been nominal.
Likewise, Lufthansa maintains that it could have proven that Ortigas did not take
offense at being downgraded, as in fact, according to Lufthansa, he was in jovial In Lopez3 , Honorable Fernando Lopez, then an incumbent senator and former
mood throughout the trip enjoying his conversation and exchange of amenities Vice President of the Philippines, together with his wife and his daughter and
with his seatmate, who by strange coincidence happened to be the Manager of son-in-law, made first class reservations with the Pan American World Airways
Lufthansa German Airlines for the district of Australia and New Zealand holding in its Tokyo-San Francisco flight. The reservation having been confirmed, first
said position since 1962.1 Moreover, it is argued, the economy class class tickets were subsequently issued in their favor. Mistakenly, however,
accommodations are not much different from first class and Ortigas was not defendant's agent cancelled said reservation, but expecting some cancellations
delayed in his trip. We cannot see the point. A passenger contracts for first class before the flight scheduled about a month later, the reservations supervisor
accommodations for many reasons peculiar to himself and pays a higher price decided to withhold the information from them, with the result that upon arrival in
therefor, and it is certainly not for the airplane to say later, after it deprives him of Tokyo, the Lopezes discovered they had no first class accommodations and
his space in order to favor another passenger, that economy class is anyway were thus compelled to take the tourist class, just so the senator could be on
just as good as first class. That Ortigas was rightfully indignant is not difficult to time for his pressing engagements in the United States. In the light of these
imagine. No person in his normal senses and possessed of human dignity would facts, the Court held there was a breach of the contract of carriage and viewed
have been unperturbed and unruffled by the treatment he had received. More, as the element of bad faith entitling the plaintiffs to moral damages for such
he was under express admonition of his doctor taking care of his ailing coronary contractual breach, the failure of the agents of the defendant to inform the
condition to travel only in first class. Indeed, that he complained and made plaintiffs on time that their reservation for first class had long before been
himself emphatically clear while still in Rome is sufficiently substantiated in the cancelled by mistake. According to the Court, such omission placed plaintiffs in
record, as it was more or less admitted by defendant's witness Lazzari when he a predicament that enabled the company to keep the plaintiffs as their
testified that he heard about plaintiff's complaint that same day, November 18, passengers in the tourist class, thereby retaining the business and promoting
1963. the company's self-interest at the expense of, embarrassment, discomfort and
humiliation on the part of the plaintiffs.
In the light of all the foregoing, there can be no doubt as to the right of Ortigas to
damages, both moral and exemplary. Precedents We have consistently adhered In Air France vs. Carrascoso4 plaintiff Mr. Rafael Carrascoso, a civil engineer
to so dictate. Beginning with Cuenca,2 wherein the Court rejected the theory who was going to Lourdes, France, as a member of a religious group of pilgrims
that an air carrier is liable only in the event of death or injury suffered by a was issued by the Philippine Air Lines, as agent of the defendant Air France, a
passenger, because, according to the Court, to so hold would be tantamount to ticket for first class round trip from Manila to Rome. From Manila, Carrascoso
declaring the carrier "exempt from any liability for damages in the event of its travelled first class, as per said ticket, but at Bangkok, the Manager of the
absolute refusal, in bad faith, to comply with a contract of carriage, which is defendant airline forced him to vacate the first class seat because there was a
absurd", We have uniformly upheld the right of a passenger to damages in all white man who allegedly had a better right thereto, without, however, showing
cases wherein, after having contracted and paid for first class accommodations him the basis for such preference. Upon these factual premises, the Court held:
duly confirmed and validated, he is transferred over his objection to economy,
class, which he has to take in order to be able to arrive at his destination on his It is really correct to say that the Court of Appeals in the quoted portion first
scheduled time. transcribed did not use the term `bad faith'. But can it be doubted that the recital
of facts therein points to bad faith? The manager not only prevented Carrascoso
In the case of Nicolas L. Cuenca, then Commissioner of Public Highways of the from enjoying his right to a first class seat, worse, he imposed his arbitrary will;
Philippines, he boarded a Northwest plane in Manila with a first class ticket to he forcibly ejected him from his seat, made him suffer the humiliation of having
Tokyo, but upon arrival at Okinawa, an agent of the company rudely compelled to go to the tourist class compartment — just to give way to another passenger
him, over his protest, to move over to the tourist class, which he had to do, so he whose right thereto has not been established. Certainly, this is bad faith. Unless,
could reach the international conference he was attending on time. Under these of course, bad faith has assumed a meaning different from what is understood in
facts, the Court held that the P20,000 awarded by the lower court to Cuenca law. For, bad faith, contemplates a "state of mind affirmatively operating with
furtive design or with some motive of self-interest or ill will or for ulterior them. Instead, he engaged Ortigas in a heated discussion, summarily brushed
purpose." (Words & Phrases, Perm. Ed., Vol. 5, p. 13, citing Warfield Natural off his protests and pleas, humiliated him, and tricked him into boarding his
Gas Co. vs. Allen, 59 S.W. (2d) 534, 538.) employer's plane, endangering thereby his health and obliging him to take
medicine to forestall an attack.
And if the foregoing were not yet sufficient, there is the express finding of bad
faith in the judgment of the Court of First Instance, thus: There is, finally, evidence that he was discriminated against because of his
nationality for he was told to yield his first class seat to a Belgian only after his
"The evidence shows that defendant violated its contract of transportation with passport was examined and his Filipino citizenship must have been noted. .
plaintiff in bad faith, with the aggravating circumstances that defendant's
Manager in Bangkok went to the extent of threatening the plaintiff in the Under the circumstances and measured by the criterion, jurisprudence has
presence of many passengers to have him thrown out of the airplane to give the followed, the compensation the plaintiff should be entitled to receive must be
"first class" seat that he was occupying to, again using the words of the witness fixed at P100,000.00 as moral damages, P30,000.00 as exemplary damages or
Ernesto G. Cuento, a "white man" whom he (defendant's Manager) wished to corrective damages, and P20,000.00 as attorney's fees. (Pp. 111-113, Record
accommodate, and the defendant has not proven that this "white man" had any on Appeal.)
"better right" to occupy the "first class" seat that the plaintiff was occupying, duly
paid for, and for which the corresponding "first class" ticket was issued by the We have reviewed the evidence and We are convinced there is more than
defendant to him." (R.A., p. 74; emphasis supplied.) (at pp. 166-167.) ample basis for these findings. But under the circumstances revealed in the
record, it is Our considered opinion that the award of moral damages should be
These precedents, as may be seen, apply four-square to herein plaintiffs case. increased to P150,000.
Defendant's liability for willful and wanton breach of its contract of carriage with
plaintiff is, therefore, indubitable. We cannot go along with defendant's pose that in Cuenca the amount awarded
was only P20,000, for the very obvious reason that in that case what was
Coming now to the amount that should be awarded by way of damages to the involved was only one leg of the flight contracted for, namely, that from Okinawa
plaintiff, it is also the teaching of the cases aforecited that defendant is liable not to Tokyo, whereas in the case not at bar, the offense was repeated four times, at
only for moral but also for exemplary damages. As earlier stated, the court Rome, Cairo, Dharham and Calcutta, with apparent cold indifference of
below fixed the compensation for moral damages at P100,000 and the defendant's agents to plaintiff's plight. Besides, it appears that Cuenca did not
exemplary at P30,000. The Court believes that these amounts are not enough. appeal from the trial court's decision fixing said amount, hence there was no
occasion for the Supreme Court to award more. This was also what happened in
According to the lower court: the Carrascoso case, where the plaintiff did not complain against the award of
only P25,000-moral-and P10,000-exemplary damages made by the trial court. It
Although the plaintiff has not held any elective public office, he has however, a
was Air France who claimed that these were even excessive. Verily, however,
distinguished record as a private citizen, a lawyer, businessman, a civic and
such, discriminatory acts of the defendants in those cases which were not only
religious leader, a member of numerous government boards and organizations
violative of their contractual obligations but also offensive to human dignity and
as well as of local and international bodies, and is the recipient of awards and
national or racial pride constitute about the most justifiable ground for the award
citations for outstanding services and achievements.
of moral damages, for the resulting injury therefrom cannot but cause immense
He was, and still is, moreover suffering from a heart ailment and has been mental anguish, besmirched reputation, wounded feelings, moral shock and
advised by his physician to travel first class because it is more relaxing and social humiliation. (See Article 2217 of the Civil Code.) We reiterate, they are to
comfortable. His position as chairman of the boards of directors of the be considered as infecting with bad faith the breach of contract committed,
corporation he represented also required that he travel in that manner. He was, under Article 2220 of the same Code. (Lopez vs. Pan Am., supra.)
furthermore, carrying a special passport issued by the Philippine Government to
Lufthansa suggests that compared to the P100,000 awarded to Vice President
represent it and business corporations abroad.
Lopez in the case aforementioned, the P100,000 given by the trial court to
His sickness and the need for him to travel in the most comfortable manner Ortigas are "grossly excessive". It does not appear to Us to be so. As pointed
possible were made known to the defendant's employee, but he paid no heed to out by His Honor, "although plaintiff has not held any elective public office, he
has, however, a distinguished record as a private citizen, a lawyer, Zulueta's evidence, the pilot went to the extent of referring to him and his family
businessman, a civic and religious leader, a member of numerous boards and as "those monkeys". Ultimately, the plane left without Zulueta, albeit his wife and
organizations as well as local and international bodies, and is the recipient of daughter were on board, because the captain refused to allow Zulueta to board
awards and citations for outstanding services and achievements." Indeed, under until after his bags were opened and inspected, which Zulueta refused entirely to
the proven facts in the record, We cannot regard plaintiff in any inferior position do. Although, said decision is not yet final, because of the pendency of a second
vis-a-vis Vice President Lopez in the highest circles of Philippine society and in motion for reconsideration the Court has not yet resolved, the Court has already
the business and religious world, not to speak of his standing in government allowed the partial execution of the judgment, thus enabling Zuluetas to collect
officialdom. already one-half of the amount or over P335,000, which amount, according to
the concurring and dissenting opinion there of the writer of the instant decision
Beside there is again the disparity between then Lopez case and this one that could be the least that should anyway be allowed. Of course, the Court did not
here the offense, which, as in Cuenca, is aggravated by the Lufthansa employee itemize the award but granted the same to the family as a whole, but it is evident
at Rome having falsely noted on the ticket that Ortigas was travelling in that in the final distribution, Zulueta would get for himself from at least P150,000
economy from Rome to Hongkong,5 was repeated four times in the same trip, to not more than P200,00.6
namely in Rome, Cairo, Dharham and Calcutta. More importantly, unlike in the
case of Lopez, Ortigas was suffering from a weak heart and under doctor's We hold that the foregoing considerations justify the increase of the award of
advice to travel only in first class, hence, his being compelled to stay in economy moral damages from P100,000 to P150,000.
or tourist class during the major part of his trip, must have given him added
apprehensive feelings about his safety. And, moreover, it is to benoted that in Finally, We have the dispute regarding the amount of exemplary damages
the Lopez case, which was decided in 1966, aside from taking into account the awarded. In this respect, it is Our considered opinion that defendant should Pay
personal circumstances of the plaintiff, the Court considered "the present rate of P100,000 instead of the P30,000 awarded by the trial court. The record of this
exchange and the terms at which amount of damages awarded would case taken together with what are revealed in the other similar cases decided by
approximately be in U.S. dollars", hence, We may not justifiably do differently this Court, those aforediscussed, convinces Us that defendant, as an airline,
here.. should be made to pay an amount that can really serve as a deterrent against a
seeming pattern of indifference and unconcern, and what is worse, of
Furthermore, it may not be amiss to mention here that in Zulueta vs. Pan discrimination for racial reasons, discernible in the treatment of air passengers.
American Airways Inc., 43 SCRA 397, the Court awarded the plaintiffs: Zulueta, This is not the first case, and unless the proper sanctions are applied, it does not
the husband, his wife and a minor daughter, a total of P775,000 as damages appear it is going to be the last yet, of instances wherein Filipino passengers
consisting of P500,000 as moral, P200,000 as exemplary and P75,000 as having validated and confirmed tickets for first class would be shoved to the
attorney's fees, apart from actual damages. In that case, the Zulueta's were economy class, over their valid objections and without any regard at all to their
coming home to Manila from Honolulu in a Pan-American plane. At Wake, feelings and convenience, only to favor other passengers presumed by the
however, where the plane arrived at 4:00 o'clock in the morning, Zulueta could airlines to be of superior race, hence, deserving preference. It is high time
not be found at flight time because, without letting anyone know, not even his everyone concerned were made to realize that the laws of the Philippines do not
wife or daughter, he had relieved himself, according to him, at the beach behind permit any act of discrimination against its citizens, specially when this
the terminal. When at last, he was found, the Pan-Am employee who first met accompanies a clear breach of contractual obligations of common carriers
him while walking back from the beach remonstrated him thus: "What in the hell whose business is affected with public interest and must be directed to serve the
do you think you are! Get on that plane." This angered Zulueta who engaged the convenience and comfort of the passengers. When any disregard of such laws
said employee in an exchange of angry words. In the meanwhile, the pilot who is committed, the Supreme Court, as the interpreter of such laws, must exact the
had been tipped by a "man from the State Department", also a passenger in that commensurate liability which they contemplate.
flight, that there might be a bomb in the plane and expressed apprehension for
the safety of the flight unless Zulueta could be found, ordered the unloading of "Exemplary damages are required by public policy, for wanton acts must be
the bags of the Zuluetas, and when three of the four of them had already been repressed. They are an antidote so that the poison of wickedness may not run
unloaded, he ordered Zulueta to open them, but the latter refused. Another through the body politic." (Report of Code Commission, pp. 75-76) by authority
exchange of angry words followed, in the course of which, according to of the decided cases aforediscussed,7 acts of similar nature as those herein
involved fall within the category of those justifying the imposition of exemplary
damages pursuant to the codal concept just stated.

The rationale behind exemplary or corrective damages is, as the name implies,
to provide an example or correction for public good. ... In view of its nature, it
should be imposed in such an amount as to sufficiently and effectively deter
similar breach of contracts by defendant or other airlines." (Lopez v. Pan-
American World Airways, supra; see also Rotea vs. Halili, 109 Phil. 495; People
vs. Medroso, Jr., G.R. No. L-37633, Jan. 31, 1975, 62 SCRA 245; Cotabato
Timberland Co. Inc. vs. Plaridel Lumber Co., Inc., 13 SCRA 235) Thus, all
relevant matters considered, P100,000 of exemplary damages, which practically
amounts only to not more than $15,000 U.S. under the present rate of
exchange, would serve the ends for which the liability has been conceived.

WHEREFORE, the judgment appealed from is modified by raising the award of

moral and exemplary damages to plaintiff Ortigas to P150,000.00 and
P100,000.00, respectively. In all other respects, including as to the payment of
interests on the said amounts, the same is affirmed.
[Moral] stewardess, who in turn inserted it into an electronic machine reader or
computer at the gate. The ground stewardess was assisted by a ground
[G.R. No. 150843. March 14, 2003] attendant by the name of Clara Lai Han Chiu. When Ms. Chiu glanced at the
computer monitor, she saw a message that there was a seat change from
Business Class to First Class for the Vazquezes.
Ms. Chiu approached Dr. Vazquez and told him that the Vazquezes
accommodations were upgraded to First Class. Dr. Vazquez refused the
DAVIDE, JR., C.J.: upgrade, reasoning that it would not look nice for them as hosts to travel in First
Class and their guests, in the Business Class; and moreover, they were going to
Is an involuntary upgrading of an airline passengers accommodation from one discuss business matters during the flight. He also told Ms. Chiu that she could
class to a more superior class at no extra cost a breach of contract of carriage have other passengers instead transferred to the First Class Section. Taken
that would entitle the passenger to an award of damages? This is a novel aback by the refusal for upgrading, Ms. Chiu consulted her supervisor, who told
question that has to be resolved in this case. her to handle the situation and convince the Vazquezes to accept the upgrading.
Ms. Chiu informed the latter that the Business Class was fully booked, and that
The facts in this case, as found by the Court of Appeals and adopted by since they were Marco Polo Club members they had the priority to be upgraded
petitioner Cathay Pacific Airways, Ltd., (hereinafter Cathay) are as follows: to the First Class. Dr. Vazquez continued to refuse, so Ms. Chiu told them that if
they would not avail themselves of the privilege, they would not be allowed to
Cathay is a common carrier engaged in the business of transporting passengers
take the flight. Eventually, after talking to his two friends, Dr. Vazquez gave in.
and goods by air. Among the many routes it services is the Manila-Hongkong-
He and Mrs. Vazquez then proceeded to the First Class Cabin.
Manila course. As part of its marketing strategy, Cathay accords its frequent
flyers membership in its Marco Polo Club. The members enjoy several Upon their return to Manila, the Vazquezes, in a letter of 2 October 1996
privileges, such as priority for upgrading of booking without any extra charge addressed to Cathays Country Manager, demanded that they be indemnified in
whenever an opportunity arises. Thus, a frequent flyer booked in the Business the amount of P1million for the humiliation and embarrassment caused by its
Class has priority for upgrading to First Class if the Business Class Section is employees. They also demanded a written apology from the management of
fully booked. Cathay, preferably a responsible person with a rank of no less than the Country
Manager, as well as the apology from Ms. Chiu within fifteen days from receipt
Respondents-spouses Dr. Daniel Earnshaw Vazquez and Maria Luisa Madrigal
of the letter.
Vazquez are frequent flyers of Cathay and are Gold Card members of its Marco
Polo Club. On 24 September 1996, the Vazquezes, together with their maid and In his reply of 14 October 1996, Mr. Larry Yuen, the assistant to Cathays
two friends Pacita Cruz and Josefina Vergel de Dios, went to Hongkong for Country Manager Argus Guy Robson, informed the Vazquezes that Cathay
pleasure and business. would investigate the incident and get back to them within a weeks time.

For their return flight to Manila on 28 September 1996, they were booked on On 8 November 1996, after Cathays failure to give them any feedback within its
Cathays Flight CX-905, with departure time at 9:20 p.m. Two hours before their self-imposed deadline, the Vazquezes instituted before the Regional Trial Court
time of departure, the Vazquezes and their companions checked in their of Makati City an action for damages against Cathay, praying for the payment to
luggage at Cathays check-in counter at Kai Tak Airport and were given their each of them the amounts of P250,000 as temperate damages; P500,000 as
respective boarding passes, to wit, Business Class boarding passes for the moral damages; P500,000 as exemplary or corrective damages; and P250,000
Vazquezes and their two friends, and Economy Class for their maid. They then as attorneys fees.
proceeded to the Business Class passenger lounge.
In their complaint, the Vazquezes alleged that when they informed Ms. Chiu that
When boarding time was announced, the Vazquezes and their two friends went they preferred to stay in Business Class, Ms. Chiu obstinately,
to Departure Gate No. 28, which was designated for Business Class uncompromisingly and in a loud, discourteous and harsh voice threatened that
passengers. Dr. Vazquez presented his boarding pass to the ground they could not board and leave with the flight unless they go to First Class, since
the Business Class was overbooked. Ms. Chius loud and stringent shouting During the trial, Dr. Vazquez testified to support the allegations in the complaint.
annoyed, embarrassed, and humiliated them because the incident was His testimony was corroborated by his two friends who were with him at the time
witnessed by all the other passengers waiting for boarding. They also claimed of the incident, namely, Pacita G. Cruz and Josefina Vergel de Dios.
that they were unjustifiably delayed to board the plane, and when they were
finally permitted to get into the aircraft, the forward storage compartment was For its part, Cathay presented documentary evidence and the testimonies of Mr.
already full. A flight stewardess instructed Dr. Vazquez to put his roll-on luggage Yuen; Ms. Chiu; Norma Barrientos, Comptroller of its retained counsel; and Mr.
in the overhead storage compartment. Because he was not assisted by any of Robson. Yuen and Robson testified on Cathays policy of upgrading the seat
the crew in putting up his luggage, his bilateral carpal tunnel syndrome was accommodation of its Marco Polo Club members when an opportunity arises.
aggravated, causing him extreme pain on his arm and wrist. The Vazquezes The upgrading of the Vazquezes to First Class was done in good faith; in fact,
also averred that they belong to the uppermost and absolutely top elite of both the First Class Section is definitely much better than the Business Class in terms
Philippine Society and the Philippine financial community, [and that] they were of comfort, quality of food, and service from the cabin crew. They also testified
among the wealthiest persons in the Philippine[s]. that overbooking is a widely accepted practice in the airline industry and is in
accordance with the International Air Transport Association (IATA) regulations.
In its answer, Cathay alleged that it is a practice among commercial airlines to Airlines overbook because a lot of passengers do not show up for their flight.
upgrade passengers to the next better class of accommodation, whenever an With respect to Flight CX-905, there was no overall overbooking to a degree that
opportunity arises, such as when a certain section is fully booked. Priority in a passenger was bumped off or downgraded. Yuen and Robson also stated that
upgrading is given to its frequent flyers, who are considered favored passengers the demand letter of the Vazquezes was immediately acted upon. Reports were
like the Vazquezes. Thus, when the Business Class Section of Flight CX-905 gathered from their office in Hong Kong and immediately forwarded to their
was fully booked, Cathays computer sorted out the names of favored counsel Atty. Remollo for legal advice. However, Atty. Remollo begged off
passengers for involuntary upgrading to First Class. When Ms. Chiu informed because his services were likewise retained by the Vazquezes; nonetheless, he
the Vazquezes that they were upgraded to First Class, Dr. Vazquez refused. He undertook to solve the problem in behalf of Cathay. But nothing happened until
then stood at the entrance of the boarding apron, blocking the queue of Cathay received a copy of the complaint in this case. For her part, Ms. Chiu
passengers from boarding the plane, which inconvenienced other passengers. denied that she shouted or used foul or impolite language against the
He shouted that it was impossible for him and his wife to be upgraded without Vazquezes. Ms. Barrientos testified on the amount of attorneys fees and other
his two friends who were traveling with them. Because of Dr. Vazquezs outburst, litigation expenses, such as those for the taking of the depositions of Yuen and
Ms. Chiu thought of upgrading the traveling companions of the Vazquezes. But Chiu.
when she checked the computer, she learned that the Vazquezes companions
did not have priority for upgrading. She then tried to book the Vazquezes again In its decision[1] of 19 October 1998, the trial court found for the Vazquezes and
to their original seats. However, since the Business Class Section was already decreed as follows:
fully booked, she politely informed Dr. Vazquez of such fact and explained that
WHEREFORE, finding preponderance of evidence to sustain the instant
the upgrading was in recognition of their status as Cathays valued passengers.
complaint, judgment is hereby rendered in favor of plaintiffs Vazquez spouses
Finally, after talking to their guests, the Vazquezes eventually decided to take
and against defendant Cathay Pacific Airways, Ltd., ordering the latter to pay
the First Class accommodation.
each plaintiff the following:
Cathay also asserted that its employees at the Hong Kong airport acted in good
a) Nominal damages in the amount of P100,000.00 for each plaintiff;
faith in dealing with the Vazquezes; none of them shouted, humiliated,
embarrassed, or committed any act of disrespect against them (the Vazquezes). b) Moral damages in the amount of P2,000,000.00 for each plaintiff;
Assuming that there was indeed a breach of contractual obligation, Cathay
acted in good faith, which negates any basis for their claim for temperate, moral, c) Exemplary damages in the amount of P5,000,000.00 for each plaintiff;
and exemplary damages and attorneys fees. Hence, it prayed for the dismissal
of the complaint and for payment of P100,000 for exemplary damages and d) Attorneys fees and expenses of litigation in the amount of
P300,000 as attorneys fees and litigation expenses. P1,000,000.00 for each plaintiff; and

e) Costs of suit.
SO ORDERED. Cathay seasonably filed with us this petition in this case. Cathay maintains that
the award for moral damages has no basis, since the Court of Appeals found
According to the trial court, Cathay offers various classes of seats from which that there was no wanton, fraudulent, reckless and oppressive display of
passengers are allowed to choose regardless of their reasons or motives, manners on the part of its personnel; and that the breach of contract was not
whether it be due to budgetary constraints or whim. The choice imposes a clear attended by fraud, malice, or bad faith. If any damage had been suffered by the
obligation on Cathay to transport the passengers in the class chosen by them. Vazquezes, it was damnum absque injuria, which is damage without injury,
The carrier cannot, without exposing itself to liability, force a passenger to damage or injury inflicted without injustice, loss or damage without violation of a
involuntarily change his choice. The upgrading of the Vazquezes legal right, or a wrong done to a man for which the law provides no remedy.
accommodation over and above their vehement objections was due to the Cathay also invokes our decision in United Airlines, Inc. v. Court of Appeals[3]
overbooking of the Business Class. It was a pretext to pack as many where we recognized that, in accordance with the Civil Aeronautics Boards
passengers as possible into the plane to maximize Cathays revenues. Cathays Economic Regulation No. 7, as amended, an overbooking that does not exceed
actuations in this case displayed deceit, gross negligence, and bad faith, which ten percent cannot be considered deliberate and done in bad faith. We thus
entitled the Vazquezes to awards for damages. deleted in that case the awards for moral and exemplary damages, as well as
attorneys fees, for lack of proof of overbooking exceeding ten percent or of bad
On appeal by the petitioners, the Court of Appeals, in its decision of 24 July
faith on the part of the airline carrier.
2001,[2] deleted the award for exemplary damages; and it reduced the awards
for moral and nominal damages for each of the Vazquezes to P250,000 and On the other hand, the Vazquezes assert that the Court of Appeals was correct
P50,000, respectively, and the attorneys fees and litigation expenses to P50,000 in granting awards for moral and nominal damages and attorneys fees in view of
for both of them. the breach of contract committed by Cathay for transferring them from the
Business Class to First Class Section without prior notice or consent and over
The Court of Appeals ratiocinated that by upgrading the Vazquezes to First
their vigorous objection. They likewise argue that the issuance of passenger
Class, Cathay novated the contract of carriage without the formers consent.
tickets more than the seating capacity of each section of the plane is in itself
There was a breach of contract not because Cathay overbooked the Business
fraudulent, malicious and tainted with bad faith.
Class Section of Flight CX-905 but because the latter pushed through with the
upgrading despite the objections of the Vazquezes. The key issues for our consideration are whether (1) by upgrading the seat
accommodation of the Vazquezes from Business Class to First Class Cathay
However, the Court of Appeals was not convinced that Ms. Chiu shouted at, or
breached its contract of carriage with the Vazquezes; (2) the upgrading was
meant to be discourteous to, Dr. Vazquez, although it might seemed that way to
tainted with fraud or bad faith; and (3) the Vazquezes are entitled to damages.
the latter, who was a member of the elite in Philippine society and was not
therefore used to being harangued by anybody. Ms. Chiu was a Hong Kong We resolve the first issue in the affirmative.
Chinese whose fractured Chinese was difficult to understand and whose manner
of speaking might sound harsh or shrill to Filipinos because of cultural A contract is a meeting of minds between two persons whereby one agrees to
differences. But the Court of Appeals did not find her to have acted with give something or render some service to another for a consideration. There is
deliberate malice, deceit, gross negligence, or bad faith. If at all, she was no contract unless the following requisites concur: (1) consent of the contracting
negligent in not offering the First Class accommodations to other passengers. parties; (2) an object certain which is the subject of the contract; and (3) the
Neither can the flight stewardess in the First Class Cabin be said to have been cause of the obligation which is established.[4] Undoubtedly, a contract of
in bad faith when she failed to assist Dr. Vazquez in lifting his baggage into the carriage existed between Cathay and the Vazquezes. They voluntarily and freely
overhead storage bin. There is no proof that he asked for help and was refused gave their consent to an agreement whose object was the transportation of the
even after saying that he was suffering from bilateral carpal tunnel syndrome. Vazquezes from Manila to Hong Kong and back to Manila, with seats in the
Anent the delay of Yuen in responding to the demand letter of the Vazquezes, Business Class Section of the aircraft, and whose cause or consideration was
the Court of Appeals found it to have been sufficiently explained. the fare paid by the Vazquezes to Cathay.

The Vazquezes and Cathay separately filed motions for a reconsideration of the The only problem is the legal effect of the upgrading of the seat accommodation
decision, both of which were denied by the Court of Appeals. of the Vazquezes. Did it constitute a breach of contract?
Breach of contract is defined as the failure without legal reason to comply with Fraud has been defined to include an inducement through insidious
the terms of a contract.[5] It is also defined as the [f]ailure, without legal excuse, machination. Insidious machination refers to a deceitful scheme or plot with an
to perform any promise which forms the whole or part of the contract.[6] evil or devious purpose. Deceit exists where the party, with intent to deceive,
conceals or omits to state material facts and, by reason of such omission or
In previous cases, the breach of contract of carriage consisted in either the concealment, the other party was induced to give consent that would not
bumping off of a passenger with confirmed reservation or the downgrading of a otherwise have been given.[7]
passengers seat accommodation from one class to a lower class. In this case,
what happened was the reverse. The contract between the parties was for Bad faith does not simply connote bad judgment or negligence; it imports a
Cathay to transport the Vazquezes to Manila on a Business Class dishonest purpose or some moral obliquity and conscious doing of a wrong, a
accommodation in Flight CX-905. After checking-in their luggage at the Kai Tak breach of a known duty through some motive or interest or ill will that partakes of
Airport in Hong Kong, the Vazquezes were given boarding cards indicating their the nature of fraud.[8]
seat assignments in the Business Class Section. However, during the boarding
time, when the Vazquezes presented their boarding passes, they were informed We find no persuasive proof of fraud or bad faith in this case. The Vazquezes
that they had a seat change from Business Class to First Class. It turned out were not induced to agree to the upgrading through insidious words or deceitful
that the Business Class was overbooked in that there were more passengers machination or through willful concealment of material facts. Upon boarding, Ms.
than the number of seats. Thus, the seat assignments of the Vazquezes were Chiu told the Vazquezes that their accommodations were upgraded to First
given to waitlisted passengers, and the Vazquezes, being members of the Class in view of their being Gold Card members of Cathays Marco Polo Club.
Marco Polo Club, were upgraded from Business Class to First Class. She was honest in telling them that their seats were already given to other
passengers and the Business Class Section was fully booked. Ms. Chiu might
We note that in all their pleadings, the Vazquezes never denied that they were have failed to consider the remedy of offering the First Class seats to other
members of Cathays Marco Polo Club. They knew that as members of the Club, passengers. But, we find no bad faith in her failure to do so, even if that
they had priority for upgrading of their seat accommodation at no extra cost amounted to an exercise of poor judgment.
when an opportunity arises. But, just like other privileges, such priority could be
waived. The Vazquezes should have been consulted first whether they wanted Neither was the transfer of the Vazquezes effected for some evil or devious
to avail themselves of the privilege or would consent to a change of seat purpose. As testified to by Mr. Robson, the First Class Section is better than the
accommodation before their seat assignments were given to other passengers. Business Class Section in terms of comfort, quality of food, and service from the
Normally, one would appreciate and accept an upgrading, for it would mean a cabin crew; thus, the difference in fare between the First Class and Business
better accommodation. But, whatever their reason was and however odd it might Class at that time was $250.[9] Needless to state, an upgrading is for the better
be, the Vazquezes had every right to decline the upgrade and insist on the condition and, definitely, for the benefit of the passenger.
Business Class accommodation they had booked for and which was designated
We are not persuaded by the Vazquezes argument that the overbooking of the
in their boarding passes. They clearly waived their priority or preference when
Business Class Section constituted bad faith on the part of Cathay. Section 3 of
they asked that other passengers be given the upgrade. It should not have been
the Economic Regulation No. 7 of the Civil Aeronautics Board, as amended,
imposed on them over their vehement objection. By insisting on the upgrade,
Cathay breached its contract of carriage with the Vazquezes.
Sec 3. Scope. This regulation shall apply to every Philippine and foreign air
We are not, however, convinced that the upgrading or the breach of contract
carrier with respect to its operation of flights or portions of flights originating from
was attended by fraud or bad faith. Thus, we resolve the second issue in the
or terminating at, or serving a point within the territory of the Republic of the
Philippines insofar as it denies boarding to a passenger on a flight, or portion of
Bad faith and fraud are allegations of fact that demand clear and convincing a flight inside or outside the Philippines, for which he holds confirmed reserved
proof. They are serious accusations that can be so conveniently and casually space. Furthermore, this Regulation is designed to cover only honest mistakes
invoked, and that is why they are never presumed. They amount to mere on the part of the carriers and excludes deliberate and willful acts of non-
slogans or mudslinging unless convincingly substantiated by whoever is alleging accommodation. Provided, however, that overbooking not exceeding 10% of the
seating capacity of the aircraft shall not be considered as a deliberate and willful The deletion of the award for exemplary damages by the Court of Appeals is
act of non-accommodation. correct. It is a requisite in the grant of exemplary damages that the act of the
offender must be accompanied by bad faith or done in wanton, fraudulent or
It is clear from this section that an overbooking that does not exceed ten percent malevolent manner.[15] Such requisite is absent in this case. Moreover, to be
is not considered deliberate and therefore does not amount to bad faith.[10] entitled thereto the claimant must first establish his right to moral, temperate, or
Here, while there was admittedly an overbooking of the Business Class, there compensatory damages.[16] Since the Vazquezes are not entitled to any of
was no evidence of overbooking of the plane beyond ten percent, and no these damages, the award for exemplary damages has no legal basis. And
passenger was ever bumped off or was refused to board the aircraft. where the awards for moral and exemplary damages are eliminated, so must the
award for attorneys fees.[17]
Now we come to the third issue on damages.
The most that can be adjudged in favor of the Vazquezes for Cathays breach of
The Court of Appeals awarded each of the Vazquezes moral damages in the
contract is an award for nominal damages under Article 2221 of the Civil Code,
amount of P250,000. Article 2220 of the Civil Code provides:
which reads as follows:
Article 2220. Willful injury to property may be a legal ground for awarding moral
Article 2221 of the Civil Code provides:
damages if the court should find that, under the circumstances, such damages
are justly due. The same rule applies to breaches of contract where the Article 2221. Nominal damages are adjudicated in order that a right of the
defendant acted fraudulently or in bad faith. plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the plaintiff for
Moral damages include physical suffering, mental anguish, fright, serious
any loss suffered by him.
anxiety, besmirched reputation, wounded feelings, moral shock, social
humiliation, and similar injury. Although incapable of pecuniary computation, Worth noting is the fact that in Cathays Memorandum filed with this Court, it
moral damages may be recovered if they are the proximate result of the prayed only for the deletion of the award for moral damages. It deferred to the
defendants wrongful act or omission.[11] Thus, case law establishes the Court of Appeals discretion in awarding nominal damages; thus:
following requisites for the award of moral damages: (1) there must be an injury
clearly sustained by the claimant, whether physical, mental or psychological; (2) As far as the award of nominal damages is concerned, petitioner respectfully
there must be a culpable act or omission factually established; (3) the wrongful defers to the Honorable Court of Appeals discretion. Aware as it is that
act or omission of the defendant is the proximate cause of the injury sustained somehow, due to the resistance of respondents-spouses to the normally-
by the claimant; and (4) the award for damages is predicated on any of the appreciated gesture of petitioner to upgrade their accommodations, petitioner
cases stated in Article 2219 of the Civil Code.[12] may have disturbed the respondents-spouses wish to be with their companions
(who traveled to Hong Kong with them) at the Business Class on their flight to
Moral damages predicated upon a breach of contract of carriage may only be Manila. Petitioner regrets that in its desire to provide the respondents-spouses
recoverable in instances where the carrier is guilty of fraud or bad faith or where with additional amenities for the one and one-half (1 1/2) hour flight to Manila,
the mishap resulted in the death of a passenger.[13] Where in breaching the unintended tension ensued.[18]
contract of carriage the airline is not shown to have acted fraudulently or in bad
faith, liability for damages is limited to the natural and probable consequences of Nonetheless, considering that the breach was intended to give more benefit and
the breach of the obligation which the parties had foreseen or could have advantage to the Vazquezes by upgrading their Business Class accommodation
reasonably foreseen. In such a case the liability does not include moral and to First Class because of their valued status as Marco Polo members, we
exemplary damages.[14] reduce the award for nominal damages to P5,000.

In this case, we have ruled that the breach of contract of carriage, which Before writing finis to this decision, we find it well-worth to quote the apt
consisted in the involuntary upgrading of the Vazquezes seat accommodation, observation of the Court of Appeals regarding the awards adjudged by the trial
was not attended by fraud or bad faith. The Court of Appeals award of moral court:
damages has, therefore, no leg to stand on.
We are not amused but alarmed at the lower courts unbelievable alacrity,
bordering on the scandalous, to award excessive amounts as damages. In their
complaint, appellees asked for P1 million as moral damages but the lower court
awarded P4 million; they asked for P500,000.00 as exemplary damages but the
lower court cavalierly awarded a whooping P10 million; they asked for
P250,000.00 as attorneys fees but were awarded P2 million; they did not ask for
nominal damages but were awarded P200,000.00. It is as if the lower court went
on a rampage, and why it acted that way is beyond all tests of reason. In fact the
excessiveness of the total award invites the suspicion that it was the result of
prejudice or corruption on the part of the trial court.

The presiding judge of the lower court is enjoined to hearken to the Supreme
Courts admonition in Singson vs. CA (282 SCRA 149 [1997]), where it said:

The well-entrenched principle is that the grant of moral damages depends upon
the discretion of the court based on the circumstances of each case. This
discretion is limited by the principle that the amount awarded should not be
palpably and scandalously excessive as to indicate that it was the result of
prejudice or corruption on the part of the trial court.

and in Alitalia Airways vs. CA (187 SCRA 763 [1990], where it was held:

Nonetheless, we agree with the injunction expressed by the Court of Appeals

that passengers must not prey on international airlines for damage awards, like
trophies in a safari. After all neither the social standing nor prestige of the
passenger should determine the extent to which he would suffer because of a
wrong done, since the dignity affronted in the individual is a quality inherent in
him and not conferred by these social indicators. [19]

We adopt as our own this observation of the Court of Appeals.

WHEREFORE, the instant petition is hereby partly GRANTED. The Decision of

the Court of Appeals of 24 July 2001 in CA-G.R. CV No. 63339 is hereby
MODIFIED, and as modified, the awards for moral damages and attorneys fees
are set aside and deleted, and the award for nominal damages is reduced to

No pronouncement on costs.

[Moral] January 3, 1996 of the Regional Trial Court (RTC) of Makati City, Branch 137 in
Civil Case No. 93-2328.
AIR FRANCE, G.R. No. 165266
The facts follow:
Sometime in April 1993, respondent Bonifacio H. Gillego,[3] then
Present: incumbent Congressman of the Second District of Sorsogon and Chairman of
the House of Representatives Committee on Civil, Political and Human Rights,
was invited to participate as one of the keynote speakers at the 89th Inter-
CARPIO MORALES, J., Parliamentary Conference Symposium on Parliament Guardian of Human
Rights to be held in Budapest, Hungary and Tokyo, Japan from May 19 to 22,
Chairperson, 1993. The Philippines is a member of the Inter-Parliamentary Union which
organized the event.[4]
- versus - BERSAMIN,
On May 16, 1993, respondent left Manila on board petitioner Air
MENDOZA, Frances aircraft bound for Paris, France. He arrived in Paris early morning of
May 17, 1993 (5:00 a.m.). While waiting at the De Gaulle International Airport for
his connecting flight to Budapest scheduled at 3:15 p.m. that same day,
SERENO, JJ. respondent learned that petitioner had another aircraft bound for Budapest with
an earlier departure time (10:00 a.m.) than his scheduled flight. He then went to
petitioners counter at the airport and made arrangements for the change in his
booking. He was given a corresponding ticket and boarding pass for Flight No.
BONIFACIO H. GILLEGO, Promulgated: 2024 and also a new baggage claim stub for his checked-in luggage.[5]
substituted by his surviving heirs
represented by Dolores P. Gillego, However, upon arriving in Budapest, respondent was unable to locate his
luggage at the claiming section. He sought assistance from petitioners counter
Respondent. December 15, 2010 at the airport where petitioners representative verified from their computer that
he had indeed a checked-in luggage. He was advised to just wait for his luggage
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
at his hotel and that petitioners representatives would take charge of delivering
the same to him that same day. But said luggage was never delivered by
petitioners representatives despite follow-up inquiries by respondent.
Upon his return to the Philippines, respondents lawyer immediately wrote
petitioners Station Manager complaining about the lost luggage and the resulting
damages he suffered while in Budapest. Respondent claimed that his single
VILLARAMA, JR., J.: luggage contained his personal effects such as clothes, toiletries, medicines for
his hypertension, and the speeches he had prepared, including the notes and
For review is the Decision[1] dated June 30, 2004 of the Court of reference materials he needed for the conference. He was thus left with only his
Appeals (CA) in CA-G.R. CV No. 56587 which affirmed the Decision[2] dated travel documents, pocket money and the clothes he was wearing. Because
petitioners representatives in Budapest failed to deliver his luggage despite their
assurances and his repeated follow-ups, respondent was forced to shop for
personal items including new clothes and his medicines. Aside from these
unnecessary expenditures of about $1,000, respondent had to prepare another
speech, in which he had difficulty due to lack of data and information.
Respondent thus demanded the sum of P1,000,000.00 from the petitioner as selection and supervision of its employees and acted in good faith in denying
compensation for his loss, inconvenience and moral damages.[6] Petitioner, respondents demand for damages. The claims for actual, moral and exemplary
however, continued to ignore respondents repeated follow-ups regarding his lost damages and attorneys fees therefore have no basis in fact and in law, and are,
luggage. moreover speculative and unconscionable.

On July 13, 1993, respondent filed a complaint[7] for damages against the In his Reply,[9] respondent maintained that the loss of his luggage cannot be
petitioner alleging that by reason of its negligence and breach of obligation to attributed to anything other than petitioners simple negligence and its failure to
transport and deliver his luggage, respondent suffered inconvenience, serious perform the diligence required of a common carrier.
anxiety, physical suffering and sleepless nights. It was further alleged that due to
the physical, mental and emotional strain resulting from the loss of his luggage, On January 3, 1996, the trial court rendered its decision in favor of respondent
aggravated by the fact that he failed to take his regular medication, respondent and against the petitioner, as follows:
had to be taken to a medical clinic in Tokyo, Japan for emergency treatment.
WHEREFORE, premises considered, judgment is rendered ordering defendant
Respondent asserted that as a common carrier which advertises and offers its
to pay plaintiff:
services to the public, petitioner is under obligation to observe extraordinary
diligence in the vigilance over checked-in luggage and to see to it that 1. The sum of P1,000,000.00 as moral damages;
respondents luggage entrusted to petitioners custody would accompany him on
his flight and/or could be claimed by him upon arrival at his point of destination 2. The sum of P500,000.00 as exemplary damages;
or delivered to him without delay. Petitioner should therefore be held liable for
actual damages ($2,000.00 or P40,000.00), moral damages (P1,000,000.00), 3. The sum of P50,000.00 as attorneys fees; and
exemplary damages (P500,000.00), attorneys fees (P50,000.00) and costs of
4. The costs.
Petitioner filed its answer[8] admitting that respondent was issued tickets for the
flights mentioned, his subsequent request to be transferred to another flight The trial court found there was gross negligence on the part of petitioner which
while at the Paris airport and the loss of his checked-in luggage upon arrival at failed to retrieve respondents checked-in luggage up to the time of the filing of
Budapest, which luggage has not been retrieved to date and the respondents the complaint and as admitted in its answer, ignored respondents repeated
repeated follow-ups ignored. However, as to the rest of respondents allegations, follow-ups. It likewise found petitioner guilty of willful misconduct as it
petitioner said it has no knowledge and information sufficient to form a belief as persistently disregarded the rights of respondent who was no ordinary individual
to their truth. As special and affirmative defense, petitioner contended that its but a high government official. As to the applicability of the limited liability for lost
liability for lost checked-in baggage is governed by the Warsaw Convention for baggage under the Warsaw Convention, the trial court rejected the argument of
the Unification of Certain Rules Relating to International Carriage. Under the petitioner citing the case of Alitalia v. Intermediate Appellate Court.[11]
said treaty, petitioners liability for lost or delayed registered baggage of
respondent is limited to 250 francs per kilogram or US$20.00, which constitutes Petitioner appealed to the CA, which affirmed the trial courts decision.
liquidated damages and hence respondent is not entitled to any further damage. The CA noted that in the memorandum submitted by petitioner before the trial
court it was mentioned that respondents luggage was eventually found and
Petitioner averred that it has taken all necessary measures to avoid loss of delivered to him, which was not denied by respondent and thus resulted in the
respondents baggage, the contents of which respondent did not declare, and withdrawal of the claim for actual damages. As to the trial courts finding of gross
that it has no intent to cause such loss, much less knew that such loss could negligence, bad faith and willful misconduct which justified the award of moral
occur. The loss of respondents luggage is due to or occasioned by force and exemplary damages, the CA sustained the same, stating thus:
majeure or fortuitous event or other causes beyond the carriers control. Diligent,
sincere and timely efforts were exerted by petitioner to locate respondents It bears stressing that defendant-appellant committed a breach of contract by its
missing luggage and attended to his problem with utmost courtesy, concern and failure to deliver the luggage of plaintiff-appellee on time despite demand from
dispatch. Petitioner further asserted that it exercised due diligence in the plaintiff-appellee. The unreasonable delay in the delivery of the luggage has
not been satisfactorily explained by defendant-appellant, either in its rights in the Philippines, respondent should have had no difficulty delivering his
memorandum or in its appellants brief. Instead of justifying the delay, speech even without his notes. In addition, there is no evidence that members of
defendant-appellant took refuge under the provisions of the Warsaw Convention the Inter-Parliamentary Union made derogatory statements or even knew that he
to escape liability. Neither was there any showing of apology on the part of was unprepared for the conference. Bearing in mind that the actual damages
defendant-appellant as to the delay. Furthermore, the unapologetic sought by respondent was only $2,000.00, then clearly the trial court went way
defendant-appellant even faulted plaintiff-appellee for not leaving a local beyond that amount in determining the appropriate damages, inspite of the fact
address in Budapest in order for the defendant-appellant to contact him that the respondent eventually got back his baggage.[14]
(plaintiff-appellee) in the event the luggage is found. This actuation of
defendant-appellant is a clear showing of willful misconduct and a Comparing the situation in this case to other cases awarding similar damages to
deliberate design to avoid liability. It amounts to bad faith. As elucidated by the aggrieved passenger as a result of breaches of contract by international
Chief Justice Hilario Davide, Jr., [b]ad faith does not simply connote bad carriers, petitioner argues that even assuming that respondent was entitled to
judgment or negligence; it imports a dishonest purpose or some moral obliquity moral and exemplary damages, the sums adjudged should be modified or
and conscious doing of a wrong, a breach of a known duty through some motive reduced. It is stressed that petitioner or its agents were never rude or
or interest or ill will that partakes of the nature of fraud.[12] (Emphasis supplied.) discourteous toward respondent; he was not subjected to humiliating treatment
or comments as in the case of Lopez, et al. v. Pan American World Airways,[15]
Its motion for reconsideration having been denied, petitioner filed the Ortigas, Jr. v. Lufthansa German Airlines[16] and Zulueta v. Pan American
present Rule 45 petition raising the following grounds: World Airways, Inc.[17]. The mere fact that respondent was a Congressman
should not result in an automatic increase in the moral and exemplary damages
I. recoverable. As held in Kierulf v. Court of Appeals[18] the social and financial
standing of a claimant may be considered only if he or she was subjected to
contemptuous conduct despite the offenders knowledge of his or her social and
financial standing.[19]
In any event, petitioner invokes the application of the exception to the rule that
only questions of law may be entertained by this Court in a petition for review
THERE IS NO LEGAL AND FACTUAL BASIS TO THE FINDINGS OF THE under Rule 45 as to allow a factual review of the case. First, petitioner contends
TRIAL COURT AND THE COURT OF APPEALS THAT PETITIONERS that it has always maintained that the admission in its answer was only made
ACTIONS WERE ATTENDED BY GROSS NEGLIGENCE, BAD FAITH AND out of inadvertence, considering that it was inconsistent with the special and
WILLFUL MISCONDUCT AND THAT IT ACTED IN A WANTON, affirmative defenses set forth in the same pleading. The trial court incorrectly
FRAUDULENT, RECKLESS, OPPRESSIVE OR MALEVOLENT MANNER, TO concluded that petitioner had not prepared a Property Irregularity Report (PIR)
JUSTIFY THE AWARD OF MORAL AND EXEMPLARY DAMAGES.[13] but fabricated one only as an afterthought. A PIR can only be initiated upon the
instance of a passenger whose baggage had been lost, and in this case it was
Petitioner assails the trial and appellate courts for awarding extravagant prepared by the station where the loss was reported. The PIR in this case was
sums to respondent that already tend to punish the petitioner and enrich the automatically and chronologically recorded in petitioners computerized system.
respondent, which is not the function at all of moral damages. Upon the facts Respondent himself admitted in his testimony that he gave his Philippine
established, the damages awarded are definitely not proportionate or address and telephone number to the lady in charge of petitioners complaint
commensurate to the wrong or injury supposedly inflicted. Without belittling the desk in Budapest. It was not necessary to furnish a passenger with a copy of the
problems respondent experienced in Budapest after losing his luggage, PIR since its purpose is for the airline to trace a lost baggage. What respondent
petitioner points out that despite the unfortunate incident, respondent was able ought to have done was to make a xerox copy thereof for himself.[20]
to reconstruct the speeches, notes and study guides he had earlier prepared for
the conference in Budapest and Tokyo, and to attend, speak and participate Petitioner reiterates that there was no bad faith or negligence on its part and the
therein as scheduled. Since he prepared the research and wrote his speech, burden is on the respondent to prove by clear and convincing evidence that it
considering his acknowledged and long-standing expertise in the field of human acted in bad faith. Respondent in his testimony miserably failed to prove that
bad faith, fraud or ill will motivated or caused the delay of his baggage. This reasonably foreseen. In such a case the liability does not include moral and
Court will surely agree that mere failure of a carrier to deliver a passengers exemplary damages.[27]
baggage at the agreed place and time did not ipso facto amount to willful
misconduct as to make it liable for moral and exemplary damages. Petitioner Bad faith should be established by clear and convincing evidence. The settled
adduced evidence showing that it exerted diligent, sincere and timely efforts to rule is that the law always presumes good faith such that any person who seeks
locate the missing baggage, eventually leading to its recovery. It attended to to be awarded damages due to the acts of another has the burden of proving
respondents problem with utmost courtesy, concern and dispatch. Respondent, that the latter acted in bad faith or with ill motive.[28]
moreover, never alleged that petitioners employees were at anytime rude,
In the case of Tan v. Northwest Airlines, Inc.,[29] we sustained the CAs deletion
mistreated him or in anyway showed improper behavior.[21]
of moral and exemplary damages awarded to a passenger whose baggage were
The petition is partly meritorious. loaded to another plane with the same expected date and time of arrival but
nevertheless not delivered to her on time. We found that respondent carrier was
A business intended to serve the travelling public primarily, a contract of not motivated by malice or bad faith in doing so due to weight and balance
carriage is imbued with public interest.[22] The law governing common carriers restrictions as a safety measure. In another case involving the off-loading of
consequently imposes an exacting standard. Article 1735 of the Civil Code private respondents baggage to another destination, taken together with
provides that in case of lost or damaged goods, common carriers are presumed petitioner airlines neglect in providing the necessary accommodations and
to have been at fault or to have acted negligently, unless they prove that they assistance to its stranded passengers, aggravated by the discourteous acts of
observed extraordinary diligence as required by Article 1733. Thus, in an action its employees, we upheld the CA in sustaining the trial courts decision awarding
based on a breach of contract of carriage, the aggrieved party does not have to moral and exemplary damages and attorneys fees. We pointed out that it is
prove that the common carrier was at fault or was negligent. All that he has to PALs duty to provide assistance to private respondents and to any other
prove is the existence of the contract and the fact of its non-performance by the passenger similarly inconvenienced due to delay in the completion of the
carrier.[23] transport and the receipt of their baggage.[30]

That respondents checked-in luggage was not found upon arrival at his After a careful review, we find that petitioner is liable for moral damages.
destination and was not returned to him until about two years later[24] is not
disputed. The action filed by the respondent is founded on such breach of the Petitioners station manager, Ma. Lourdes Reyes, testified that upon receiving
contract of carriage with petitioner who offered no satisfactory explanation for the letter-complaint of respondents counsel, she immediately began working on
the unreasonable delay in the delivery of respondents baggage. The the PIR from their computerized data. Based on her testimony, a PIR is issued
presumption of negligence was not overcome by the petitioner and hence its at the airline station upon complaint by a passenger concerning missing
liability for the delay was sufficiently established. However, upon receipt of the baggage. From the information obtained in the computer-printout, it appears that
said luggage during the pendency of the case in the trial court, respondent did a PIR[31] was initiated at petitioners Budapest counter. A search telex for the
not anymore press on his claim for actual or compensatory damages and neither missing luggage was sent out on the following dates: May 17, May 21 and May
did he adduce evidence of the actual amount of loss and damage incurred by 23, 1993. As shown in the PIR printout, the information respondent supposedly
such delayed delivery of his luggage. Consequently, the trial court proceeded to furnished to petitioner was only his Philippine address and telephone number,
determine only the propriety of his claim for moral and exemplary damages, and and not the address and contact number of the hotel where he was billeted at
attorneys fees. Budapest. According to the witness, PIR usually is printed in two originals, one
is kept by the station manager and the other copy given to the passenger. The
In awarding moral damages for breach of contract of carriage, the breach must witness further claimed that there was no record or entry in the PIR of any
be wanton and deliberately injurious or the one responsible acted fraudulently or follow-up call made by the respondent while in Budapest.[32] Respondent, on
with malice or bad faith.[25] Not every case of mental anguish, fright or serious the other hand, claimed that he was not given a copy of this PIR and that his
anxiety calls for the award of moral damages.[26] Where in breaching the repeated telephone calls to inquire about his lost luggage were ignored.
contract of carriage the airline is not shown to have acted fraudulently or in bad
faith, liability for damages is limited to the natural and probable consequences of We hold that the trial and appellate courts did not err in finding that petitioner
the breach of the obligation which the parties had foreseen or could have acted in bad faith in repeatedly ignoring respondents follow-up calls. The alleged
entries in the PIR deserve scant consideration, as these have not been properly aggrieved passenger who is a lawyer and director of several companies, the
identified or authenticated by the airline station representative in Budapest who amount of P500,000.00 awarded by the trial court as moral damages was still
initiated and inputed the said entries. Furthermore, this Court cannot accept the reduced to P300,000.00, the moral damages granted to herein respondent
convenient excuse given by petitioner that respondent should be faulted in should likewise be adjusted.
allegedly not giving his hotel address and telephone number. It is difficult to
believe that respondent, who had just lost his single luggage containing all his The purpose of awarding moral damages is to enable the injured party to obtain
necessities for his stay in a foreign land and his reference materials for a means, diversion or amusement that will serve to alleviate the moral suffering he
speaking engagement, would not give an information so vital such as his hotel has undergone by reason of defendant's culpable action. On the other hand, the
address and contact number to the airline counter where he had promptly and aim of awarding exemplary damages is to deter serious wrongdoings.[36]
frantically filed his complaint. And even assuming arguendo that his Philippine Article 2216 of the Civil Code provides that assessment of damages is
address and contact number were the only details respondent had provided for left to the discretion of the court according to the circumstances of each case.
the PIR, still there was no explanation as to why petitioner never communicated This discretion is limited by the principle that the amount awarded should not be
with respondents concerning his lost baggage long after respondent had already palpably excessive as to indicate that it was the result of prejudice or corruption
returned to the Philippines. While the missing luggage was eventually on the part of the trial court. Simply put, the amount of damages must be fair,
recovered, it was returned to respondent only after the trial of this case. reasonable and proportionate to the injury suffered.[37]

Furthermore, the alleged copy of the PIR confirmed that the only action taken by Where as in this case the air carrier failed to act timely on the passengers
the petitioner to locate respondents luggage were telex searches allegedly made predicament caused by its employees mistake and more than ordinary
on May 17, 21 and 23, 1993. There was not even any attempt to explain the inadvertence or inattention, and the passenger failed to show any act of
reason for the loss of respondents luggage. Clearly, petitioner did not give the arrogance, discourtesy or rudeness committed by the air carriers employees, the
attention and care due to its passenger whose baggage was not transported and amounts of P200,000.00, P50,000.00 and P30,000.00 as moral damages,
delivered to him at his travel destination and scheduled time. Inattention to and exemplary damages and attorneys fees would be sufficient and justified.[38]
lack of care for the interest of its passengers who are entitled to its utmost
WHEREFORE, the petition is DENIED. The Decision dated June 30, 2004 of the
consideration, particularly as to their convenience, amount to bad faith which
Court of Appeals in CA-G.R. CV No. 56587 is hereby AFFIRMED with
entitles the passenger to an award of moral damages.[33] What the law
MODIFICATION in that the award of moral damages, exemplary damages and
considers as bad faith which may furnish the ground for an award of moral
attorneys fees are hereby reduced to P200,000.00, P50,000.00 and P30,000.00,
damages would be bad faith in securing the contract and in the execution
thereof, as well as in the enforcement of its terms, or any other kind of
deceit.[34] With costs against the petitioner.
While respondent failed to cite any act of discourtesy, discrimination or rudeness
by petitioners employees, this did not make his loss and moral suffering
insignificant and less deserving of compensation. In repeatedly ignoring
respondents inquiries, petitioners employees exhibited an indifferent attitude
without due regard for the inconvenience and anxiety he experienced after
realizing that his luggage was missing. Petitioner was thus guilty of bad faith in
breaching its contract of carriage with the respondent, which entitles the latter to
the award of moral damages.

However, we agree with petitioner that the sum of P1,000,000.00 awarded by

the trial court is excessive and not proportionate to the loss or suffering inflicted
on the passenger under the circumstances. As in Trans World Airlines v. Court
of Appeals[35] where this Court after considering the social standing of the
[Exemplary] legitimate children of Perfecto Mecenas and Sofia Mecenas and that the latter
spouses perished in the collision which had resulted from the negligence of
G.R. No. 88052 December 14, 1989 Negros Navigation and Capt. Santisteban. Petitioners prayed for actual
damages of not less than P100,000.00 as well as moral and exemplary
damages in such amount as the Court may deem reasonable to award to them.
OFELIA M. JAVIER, petitioners, Another complaint, docketed as Civil Case No. Q-33932, was filed in the same
vs. court by Lilia Ciocon claiming damages against Negros Navigation, PNOC and
HON. COURT OF APPEALS, CAPT. ROGER SANTISTEBAN and NEGROS PNOC Shipping for the death of her husband Manuel Ciocon, another of the
NAVIGATION CO., INC., respondents. luckless passengers of the "Don Juan." Manuel Ciocon's body, too, was never
Benito P. Favie and Jose Dario Magno for petitioners.
The two (2) cases were consolidated and heard jointly by the Regional Trial
Hernandez, Velicaria, Vibar & Santiago for private respondents.
Court of Quezon City, Branch 82. On 17 July 1986, after trial, the trial court
rendered a decision, the dispositive of which read as follows:

FELICIANO, J.: WHEREFORE, the Court hereby renders judgment ordering:

At 6:20 o'clock in the morning of 22 April 1980, the M/T "Tacloban City," a a) The defendant Negros Navigation Co., Inc. and Capt. Roger Santisteban
barge-type oil tanker of Philippine registry, with a gross tonnage of 1,241,68 jointly and severally liable to pay plaintiffs in Civil Case No Q-31525, the sum of
tons, owned by the Philippine National Oil Company (PNOC) and operated by P400,000.00 for the death of plaintiffs' parents, Perfecto A. Mecenas and Sofia
the PNOC Shipping and Transport Corporation (PNOC Shipping), having P. Mecenas; to pay said plaintiff's the sum of P15.000,00 as and for attorney's
unloaded its cargo of petroleum products, left Amlan, Negros Occidental, and fees; plus costs of the suit.
headed towards Bataan. At about 1:00 o'clock in the afternoon of that same day,
b) Each of the defendants Negros Navigation Co Inc. and Philippine National Oil
the M/V "Don Juan," an interisland vessel, also of Philippine registry, of 2,391.31
Company/PNOC Shipping and Transportation Company, to pay the plaintiff in
tons gross weight, owned and operated by the Negros Navigation Co., Inc.
Civil Case No. Q-33932, the sum of P100,000.00 for the death of Manuel
(Negros Navigation) left Manila bound for Bacolod with seven hundred fifty (750)
Ciocon, to pay said plaintiff jointly and severally, the sum of P1 5,000.00 as and
passengers listed in its manifest, and a complete set of officers and crew
for attorney's fees, plus costs of the suit. 1
Negros Navigation, Capt. Santisteban, PNOC and PNOC Shipping appealed the
On the evening of that same day, 22 April 1980, at about 10:30 o'clock, the
trial court's decision to the Court of Appeals. Later, PNOC and PNOC Shipping
"Tacloban City" and the "Don Juan" collided at the Talbas Strait near Maestra de
withdrew their appeal citing a compromise agreement reached by them with
Ocampo Island in the vicinity of the island of Mindoro. When the collision
Negros Navigation; the Court of Appeals granted the motion by a resolution
occurred, the sea was calm, the weather fair and visibility good. As a result of
dated 5 September 1988, subject to the reservation made by Lilia Ciocon that
this collision, the M/V "Don Juan" sank and hundreds of its passengers
she could not be bound by the compromise agreement and would enforce the
perished. Among the ill-fated passengers were the parents of petitioners, the
award granted her by the trial court.
spouses Perfecto Mecenas and Sofia Mecenas, whose bodies were never found
despite intensive search by petitioners. In time, the Court of Appeals rendered a decision dated 26 January 1989 which
decreed the following:
On 29 December 1980, petitioners filed a complaint in the then Court- of First
Instance of Quezon City, docketed as Civil Case No. Q-31525, against private WHEREFORE, in view of the foregoing, the decision of the court a quo is hereby
respondents Negros Navigation and Capt. Roger Santisteban, the captain of the affirmed as modified with respect to Civil Case No. 31525, wherein defendant
"Don Juan" without, however, impleading either PNOC or PNOC Shipping. In appellant Negros Navigation Co. Inc. and Capt. Roger Santisteban are held
their complaint, petitioners alleged that they were the seven (7) surviving jointly and severally liable to pay the plaintiffs the amount of P100,000. 00 as
actual and compensatory damages and P15,000.00 as attorney's fees and the Thus, whether petitioners are entitled to exemplary damages as claimed must
cost of the suit. 2 depend upon whether or not private respondents acted recklessly, that is, with
gross negligence.
The issue to be resolved in this Petition for Review is whether or not the Court of
Appeals had erred in reducing the amount of the damages awarded by the trial We turn, therefore, to a consideration of whether or not Negros Navigation and
court to the petitioners from P400,000.00 to P100,000.00. Capt. Santisteban were grossly negligent during the events which culminated in
the collision with "Tacloban City" and the sinking of the "Don Juan" and the
We note that the trial court had granted petitioners the sum of P400,000,00 "for resulting heavy loss of lives.
the death of [their parents]" plus P15,000.00 as attorney's fees, while the Court
of Appeals awarded them P100,000.00 "as actual and compensatory damages" The then Commandant of the Philippine Coast Guard, Commodore B.C.
and P15,000.00 as attorney's fees. To determine whether such reduction of the Ochoco, in a decision dated 2 March 1981, held that the "Tacloban City" was
damages awarded was proper, we must first determine whether petitioners were "primarily and solely [sic] at fault and responsible for the collision." 7 Initially, the
entitled to an award of damages other than actual or compensatory damages, Minister of National Defense upheld the decision of Commodore Ochoco. 8 On
that is, whether they were entitled to award of moral and exemplary damages. Motion for Reconsideration, however, the Minister of National Defense reversed
himself and held that both vessels had been at fault:
We begin by noting that both the trial court and the Court of Appeals considered
the action (Civil Case No. Q-31525) brought by the sons and daughters of the It is therefore evident from a close and thorough review of the evidence that fault
deceased Mecenas spouses against Negros Navigation as based on quasi- is imputable to both vessels for the collision. Accordingly, the decision dated
delict. We believed that action is more appropriately regarded as grounded on March 12, 1982, subject of the Motion for Reconsideration filed by counsel of
contract, the contract of carriage between the Mecenas spouses as regular M/T Tacloban City, is hereby reversed. However, the administrative penalties
passengers who paid for their boat tickets and Negros Navigation; the surviving imposed oil both vessels and their respective crew concerned are hereby
children while not themselves passengers are in effect suing the carrier in affirmed. 9
representation of their deceased parents. 3 Thus, the suit (Civil Case No. Q-
33932) filed by the widow Lilia Ciocon was correctly treated by the trial and The trial court, after a review of the evidence submitted during the trial, arrived
appellate courts as based on contract (vis-a-vis Negros Navigation) and as well at the same conclusion that the Minister of National Defense had reached that
on quasi-delict (vis-a-vis PNOC and PNOC Shipping). In an action based upon a both the "Tacloban City" and the "Don Juan" were at fault in the collision. The
breach of the contract of carriage, the carrier under our civil law is liable for the trial court summarized the testimony and evidence of PNOC and PNOC
death of passengers arising from the negligence or willful act of the carrier's Shipping as well as of Negros Navigation in the following terms:
employees although such employees may have acted beyond the scope of their
Defendant PNOC's version of the incident:
authority or even in violation of the instructions of the carrier, 4 which liability
may include liability for moral damages. 5 It follows that petitioners would be M/V Don Juan was first sighted at about 5 or 6 miles from Tacloban City (TSN,
entitled to moral damages so long as the collision with the "Tacloban City" and January 21, 1985, p. 13); it was on the starboard (right) side of Tacloban City.
the sinking of the "Don Juan" were caused or attended by negligence on the part This was a visual contact; not picked up by radar (p. 15, Ibid). Tacloban City was
of private respondents. travelling 310 degrees with a speed of 6 knots, estimated speed of Don Juan of
16 knots (TSN, May 9, pp. 5-6). As Don Juan approached, Tacloban City gave a
In respect of the petitioners' claim for exemplary damages, it is only necessary
leeway of 1 0 degrees to the left. 'The purpose was to enable Tacloban to see
to refer to Article 2232 of the Civil Code:
the direction of Don Juan (p. 19, Ibid). Don Juan switched to green light,
Article 2332. In contracts and quasi-contracts, the court may exemplary signifying that it will pass Tacloban City's right side; it will be a starboard to
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive or starboard passing (p. 21, Ibid) Tacloban City's purpose in giving a leeway of 10
malevolent manner. 6 degrees at this point, is to give Don Juan more space for her passage (p. 22,
Ibid). This was increased by Tacloban City to an additional 15 degrees towards
the left (p. 22, Ibid). The way was clear and Don Juan has not changed its
course (TSN, May 9,1985, p. 39).
When Tacloban City altered its course the second time, from 300 degrees to our Civil Code requires for the imposition of exemplary damages. Our own
285 degrees, Don Juan was about 4.5 miles away (TSN, May 9,1985, p. 7). review of the record in the case at bar requires us to answer this in the
Despite executing a hardport maneuver, the collision nonetheless occurred. Don
Juan rammed the Tacloban City near the starboard bow (p. 7, Ibid)." In the first place, the report of the Philippine Coast Guard Commandant (Exhibit
"l 0"), while holding the "Tacloban City" as "primarily and solely [sic] at fault and
NENACO's [Negros Navigation] version. responsible for the collision," did itself set out that there had been fault or
negligence on the part of Capt. Santisteban and his officers and crew before the
Don Juan first sighted Tacloban City 4 miles away, as shown by radar (p. 13,
collision and immediately after contact of the two (2) vessels. The decision of
May 24, 1983). Tacloban City showed its red and green lights twice; it
Commodore Ochoco said:
proceeded to, and will cross, the path of Don Juan. Tacloban was on the left
side of Don Juan (TSN, April 20,1983, p. 4). xxxxxxxxx

Upon seeing Tacloban's red and green lights, Don Juan executed hard M/S Don Juan's Master, Capt. Rogelio Santisteban, was playing mahjong before
starboard (TSN, p. 4, Ibid.) This maneuver is in conformity with the rule that and up to the time of collision. Moreover, after the collision, he failed to institute
'when both vessels are head on or nearly head on, each vessel must turn to the appropriate measures to delay the sinking MS Don Juan and to supervise
right in order to avoid each other. (p. 5, Ibid). Nonetheless, Tacloban appeared properly the execution of his order of abandonship. As regards the officer on
to be heading towards Don Juan (p. 6, Ibid), watch, Senior 3rd Mate Rogelio Devera, he admitted that he failed or did not call
or inform Capt. Santisteban of the imminent danger of collision and of the actual
When Don Juan executed hard starboard, Tacloban was about 1,500 feet away
collision itself Also, he failed to assist his master to prevent the fast sinking of
(TSN, May 24,1983, p. 6). Don Juan, after execution of hard starboard, will
the ship. The record also indicates that Auxiliary Chief Mate Antonio Labordo
move forward 200 meters before the vessel will respond to such maneuver (p. 7,
displayed laxity in maintaining order among the passengers after the collision.
Ibid). The speed of Don Juan at that time was 17 knits; Tacloban City 6.3 knots.
t "Between 9 to 15 seconds from execution of hard starboard, collision occurred x x x x x x x x x. 13
(p. 8, Ibid). (pp. 3-4 Decision). 10
We believe that the behaviour of the captain of the "Don Juan" in tills instance-
The trial court concluded: playing mahjong "before and up to the time of collision constitutes behaviour
that is simply unacceptable on the part of the master of a vessel to whose hands
M/ V Don Juan and Tacloban City became aware of each other's presence in
the lives and welfare of at least seven hundred fifty (750) passengers had been
the area by visual contact at a distance of something like 6 miles from each
entrusted. Whether or not Capt. Santisteban was "off-duty" or "on-duty" at or
other. They were fully aware that if they continued on their course, they will meet
around the time of actual collision is quite immaterial; there is, both realistically
head on. Don Juan - steered to the right; Tacloban City continued its course to
speaking and in contemplation of law, no such thing as "off-duty" hours for the
the left. There can be no excuse for them not to realize that, with such
master of a vessel at sea that is a common carrier upon whom the law imposes
maneuvers, they will collide. They executed maneuvers inadequate, and too
the duty of extraordinary diligence-
late, to avoid collision.
[t]he duty to carry the passengers safely as far as human care and foresight can
The Court is of the considered view that the defendants are equally negligent
provide, using the utmost diligence of very cautious persons, with a due regard
and are liable for damages. (p. 4, decision). 11
for all the circumstances. 14
The Court of Appeals, for its part, reached the same conclusion. 12
The record does not show that was the first or only time that Capt. Santisteban
There is, therefore, no question that the "Don Juan" was at least as negligent as had entertained himself during a voyage by playing mahjong with his officers
the M/T "Tacloban City" in the events leading up to the collision and the sinking and passengers; Negros Navigation in permitting, or in failing to discover and
of the "Don Juan." The remaining question is whether the negligence on the part correct such behaviour, must be deemed grossly negligent.
of the "Don Juan" reached that level of recklessness or gross negligence that
Capt. Santisteban was also faulted in the Philippine Coast Guard decision for We hold that under these circumstances, a presumption of gross negligence on
failing after the collision, "to institute appropriate measures to delay the sinking the part of the vessel (her officers and crew) and of its ship-owner arises; this
of M/V Don Juan." This appears to us to be a euphemism for failure to maintain presumption was never rebutted by Negros Navigation.
the sea-worthiness or the water-tight integrity of the "Don Juan." The record
shows that the "Don Juan" sank within ten (10) to fifteen (15) minutes after initial The grossness of the negligence of the "Don Juan" is underscored when one
contact with the "Tacloban City. 15 While the failure of Capt. Santisteban to considers the foregoing circumstances in the context of the following facts:
supervise his officers and crew in the process of abandoning the ship and his Firstly, the "Don Juan" was more than twice as fast as the "Tacloban City." The
failure to avail of measures to prevent the too rapid sinking of his vessel after "Don Juan's" top speed was 17 knots; while that of the "Tacloban City" was 6.3.
collision, did not cause the collision by themselves, such failures doubtless knots. 19 Secondly, the "Don Juan" carried the full complement of officers and
contributed materially to the consequent loss of life and, moreover, were crew members specified for a passenger vessel of her class. Thirdly, the "Don
indicative of the kind and level of diligence exercised by Capt. Santisteban in Juan" was equipped with radar which was functioning that night. Fourthly, the
respect of his vessel and his officers and men prior to actual contact between "Don Juan's" officer on-watch had sighted the "Tacloban City" on his radar
the two (2) vessels. The officer-on-watch in the "Don Juan" admitted that he had screen while the latter was still four (4) nautical miles away. Visual confirmation
failed to inform Capt. Santisteban not only of the "imminent danger of collision" of radar contact was established by the "Don Juan" while the "Tacloban City"
but even of "the actual collision itself " was still 2.7 miles away. 20 In the total set of circumstances which existed in the
instant case, the "Don Juan," had it taken seriously its duty of extraordinary
There is also evidence that the "Don Juan" was carrying more passengers than diligence, could have easily avoided the collision with the "Tacloban City,"
she had been certified as allowed to carry. The Certificate of Inspection 16 dated Indeed, the "Don Juan" might well have avoided the collision even if it had
27 August 1979, issued by the Philippine Coast Guard Commander at Iloilo City, exercised ordinary diligence merely.
the Don Juan's home port, states:
It is true that the "Tacloban City" failed to follow Rule 18 of the International
Passengers allowed : 810 Rules of the Road which requires two (2) power- driven vessels meeting end on
or nearly end on each to alter her course to starboard (right) so that each vessel
Total Persons Allowed : 864 may pass on the port side (left) of the other.21 The "Tacloban City," when the
two (2) vessels were only three-tenths (0.3) of a mile apart, turned (for the
The report of the Philippine Coast Guard (Exhibit "10") stated that the "Don
second time) 150 to port side while the "Don Juan" veered hard to starboard.
Juan" had been "officially cleared with 878 passengers on board when she
This circumstance, while it may have made the collision immediately inevitable,
sailed from the port of Manila on April 22, 1980 at about 1:00 p.m." This head-
cannot, however, be viewed in isolation from the rest of the factual
count of the passengers "did not include the 126 crew members, children below
circumstances obtaining before and up to the collision. In any case, Rule 18 like
three (3) years old and two (2) half-paying passengers" which had been counted
all other International Rules of the Road, are not to be obeyed and construed
as one adult passenger. 17 Thus, the total number of persons on board the
without regard to all the circumstances surrounding a particular encounter
"Don Juan" on that ill-starred night of 22 April 1 980 was 1,004, or 140 persons
between two (2) vessels. 22 In ordinary circumstances, a vessel discharges her
more than the maximum lumber that could be safely carried by the "Don Juan,"
duty to another by a faithful and literal observance of the Rules of Navigation, 23
per its own Certificate of Inspection. 18 We note in addition, that only 750
and she cannot be held at fault for so doing even though a different course
passengers had been listed in its manifest for its final voyage; in other words, at
would have prevented the collision. This rule, however, is not to be applied
least 128 passengers on board had not even been entered into the "Don Juan's"
where it is apparent, as in the instant case, that her captain was guilty of
manifest. The "Don Juan's" Certificate of Inspection showed that she carried life
negligence or of a want of seamanship in not perceiving the necessity for, or in
boat and life raft accommodations for only 864 persons, the maximum number
so acting as to create such necessity for, a departure from the rule and acting
of persons she was permitted to carry; in other words, she did not carry enough
accordingly. 24 In other words, "route observance" of the International Rules of
boats and life rafts for all the persons actually on board that tragic night of 22
the Road will not relieve a vessel from responsibility if the collision could have
April 1980.
been avoided by proper care and skill on her part or even by a departure from
the rules. 25
In the petition at bar, the "Don Juan" having sighted the "Tacloban City" when it Upon the other hand, the complaint in the case at bar was filed on 29 December
was still a long way off was negligent in failing to take early preventive action 1980, that is, long before either Manchester or Circular No. 7 of 24 March 1988
and in allowing the two (2) vessels to come to such close quarters as to render emerged. The decision of the trial court was itself promulgated on 17 July 1986,
the collision inevitable when there was no necessity for passing so near to the again, before Manchester and Circular No. 7 were promulgated. We do not
"Tacloban City" as to create that hazard or inevitability, for the "Don Juan" could believe that Manchester should have been applied retroactively to this case
choose its own distance. 26, It is noteworthy that the "Tacloban City," upon where a decision on the merits had already been rendered by the trial court,
turning hard to port shortly before the moment of collision, signalled its intention even though such decision was then under appeal and had not yet reached
to do so by giving two (2) short blasts with horn. 26A The "Don Juan " gave no finality. There is no indication at all that petitioners here sought simply to evade
answering horn blast to signal its own intention and proceeded to turn hatd to payment of the court's filing fees or to mislead the court in the assessment of the
starboard. 26B filing fees. In any event, we apply Manchester as clarified and amplified by Sun
Insurance Office Ltd. (SIOL), by holding that the petitioners shall pay the
We conclude that Capt. Santisteban and Negros Navigation are properly held additional filing fee that is properly payable given the award specified below, and
liable for gross negligence in connection with the collision of the "Don Juan" and that such additional filing fee shall constitute a lien upon the judgment.
"Tacloban City" and the sinking of the "Don Juan" leading to the death of
hundreds of passengers. We find no necessity for passing upon the degree of We consider, finally, the amount of damages-compensatory, moral and
negligence or culpability properly attributable to PNOC and PNOC Shipping or exemplary-properly imposable upon private respondents in this case. The
the master of the "Tacloban City," since they were never impleaded here. original award of the trial court of P400,000.00 could well have been
disaggregated by the trial court and the Court of Appeals in the following
It will be recalled that the trial court had rendered a lump sum of P400,000.00 to manner:
petitioners for the death of their parents in the "Don Juan" tragedy. Clearly, the
trial court should have included a breakdown of the lump sum award into its 1. actual or compensatory damages proved in the course of trial
component parts: compensatory damages, moral damages and exemplary consisting of actual expenses
damages. On appeal, the Court of Appeals could have and should have itself
broken down the lump sum award of the trial court into its constituent parts; incurred by petitioners
perhaps, it did, in its own mind. In any case, the Court of Appeals apparently
in their search for their
relying upon Manchester Development Corporation V. Court of Appeals 27
reduced the P400,000.00 lump sum award into a P100,000.00 for actual and parents' bodies- -P126,000.00
compensatory damages only.
2. actual or compensatory
We believe that the Court of Appeals erred in doing so, It is true that the
petitioners' complaint before the trial court had in the body indicated that the damages in case of
petitioner-plaintiffs believed that moral damages in the amount of at least
P1,400,000.00 were properly due to them (not P12,000,000.00 as the Court of wrongful death
Appeals erroneously stated) as well as exemplary damages in the sum of
(P30,000.00 x 2) -P60,000.00 29
P100,000.00 and that in the prayer of their complaint, they did not specify the
amount of moral and exemplary damages sought from the trial court. We do not (3) moral damages -P107,000.00
believe, however, that the Manchester doctrine, which has been modified and
clarified in subsequent decision by the Court in Sun Insurance Office, Ltd. (4) exemplary damages -P107,000.00
(SIOL), et al. v. Asuncion, et al. 28 can be applied in the instant case so as to
work a striking out of that portion of the trial court's award which could be Total -P400,000.00
deemed nationally to constitute an award of moral and exemplary damages.
Considering that petitioners, legitimate children of the deceased spouses
Manchester was promulgated by the Court on 7 May 1987. Circular No. 7 of this
Mecenas, are seven (7) in number and that they lost both father and mothe in
Court, which embodied the doctrine in Manchester, is dated 24 March 1988.
one fell blow of fate, and considering the pain and anxiety they doubtless
experienced while searching for their parents among the survivors and the (b) P 60,000.00 as compensatory damages for wrongful death;
corpses recovered from the sea or washed ashore, we believe that an additional
amount of P200,000.00 for moral damages, making a total of P307,000.00 for (c) P 307,000.00 as moral damages;
moral damages, making a total of P307,000.00 as moral damages, would be
(d) P 307,000.00 as exemplary damages making a total of P 800,000.00; and
quite reasonable.
(e) P 15,000.00 as attorney's fees.
Exemplary damages are designed by our civil law to permit the courts to
reshape behaviour that is socially deleterious in its consequence by creating Petitioners shall pay the additional filing fees properly due and payable in view
negative incentives or deterrents against such behaviour. In requiring of the award here made, which fees shall be computed by the Clerks of Court of
compliance with the standard which is in fact that of the highest possible degree the trial court, and shall constitute a lien upon the judgment here awarded. Cost
of diligence, from common carriers and in creating a presumption of negligence against private respondents.
against them, the law seels to compel them to control their employees, to tame
their reckless instincts and to force them to take adequate care of human beings
and their property. The Court will take judicial notive of the dreadful regularity
with which grievous maritime disasters occur in our waters with massive loss of
life. The bulk of our population is too poor to afford domestic air transportation.
So it is that notwithstanding the frequent sinking of passenger vessels in our
waters, crowds of people continue to travel by sea. This Court is prepared to use
the instruments given to it by the law for securing the ends of law and public
policy. One of those instruments is the institution of exemplary damages; one of
those ends, of special importance in an archipelagic state like the Philippines, is
the safe and reliable carriage of people and goods by sea. Considering the
foregoing, we believe that an additional award in the amount of P200,000.00 as
exmplary damages, is quite modest.

The Court is aware that petitioners here merely asked for the restoration of the P
400.000.00 award of the trial court. We underscore once more, however, the
firmly settled doctrine that this Court may consider and resolved all issues which
must be decided in order to render substantial justice to the parties, including
issues not explicity raised by the party affected. In the case at bar, as in
Kapalaran Bus Line v. Coronado, et al., 30 both the demands of sustantial
justice and the imperious requirements of public policy compel us to the
conclusion that the trial court's implicit award of moral and exemplary damages
was erronoeusly deledted and must be restored and augmented and brought
more nearely to the level required by public policy and substantial justice.

WHEREFORE, the Petition for Review on certiorari is hereby GRANTED and

the Decision of the Court of Appeals insofar as it redurce the amount of
damages awarded to petitioners to P100,000.00 is hereby REVERSED and SET
ASIDE. The award granted by the trial court is hereby RESTORED and
AUGMENTED as follows:

(a) P 126,000.00 for actual damages;

[Nominal, Temperate and Liquidated] and discouraged, she returned to Manila without attending the meeting in Ispra,
Italy. : nad
[G.R. No. 71929 : December 4, 1990.]
Once back in Manila she demanded that ALITALIA make reparation for the
192 SCRA 9 damages thus suffered by her. ALITALIA offered her "free airline tickets to
compensate her for any alleged damages. . . ." She rejected the offer, and
forthwith commenced the action 6 which has given rise to the present appellate
E. PABLO, Respondents.

As it turned out, Prof. Pablo's suitcases were in fact located and forwarded to
DECISION Ispra, 7 Italy, but only on the day after her scheduled appearance and
participation at the U.N. meeting there. 8 Of course Dr. Pablo was no longer
there to accept delivery; she was already on her way home to Manila. And for
some reason or other, the suitcases were not actually restored to Prof. Pablo by
NARVASA, J.: ALITALIA until eleven (11) months later, and four (4) months after institution of
her action. 9

After appropriate proceedings and trial, the Court of First Instance rendered
Dr. Felipa Pablo — an associate professor in the University of the Philippines, 1
judgment in Dr. Pablo's favor: 10
and a research grantee of the Philippine Atomic Energy Agency — was invited
to take part at a meeting of the Department of Research and Isotopes of the "(1) Ordering the defendant (ALITALIA) to pay . . . (her) the sum of TWENTY
Joint FAO-IAEA Division of Atomic Energy in Food and Agriculture of the United THOUSAND PESOS (P20,000.00), Philippine Currency, by way of nominal
Nations in Ispra, Italy. 2 She was invited in view of her specialized knowledge in damages;
"foreign substances in food and the agriculture environment." She accepted the
invitation, and was then scheduled by the organizers, to read a paper on "The (2) Ordering the defendant to pay . . . (her) the sum of FIVE THOUSAND
Fate of Radioactive Fusion Products Contaminating Vegetable Crops." 3 The PESOS (P5,000.00), Philippine Currency, as and for attorney's fees; (and)
program announced that she would be the second speaker on the first day of
the meeting. 4 To fulfill this engagement, Dr. Pablo booked passage on (3) Ordering the defendant to pay the costs of the suit."
petitioner airline, ALITALIA.
ALITALIA appealed to the Intermediate Appellate Court but failed to obtain a
She arrived in Milan on the day before the meeting in accordance with the reversal of the judgment. 11 Indeed, the Appellate Court not only affirmed the
itinerary and time table set for her by ALITALIA. She was however told by the Trial Court's decision but also increased the award of nominal damages payable
ALITALIA personnel there at Milan that her luggage was "delayed inasmuch as by ALITALIA to P40,000.00. 12 That increase it justified as follows: 13
the same . . . (was) in one of the succeeding flights from Rome to Milan." 5 Her
"Considering the circumstances, as found by the Trial Court and the negligence
luggage consisted of two (2) suitcases: one contained her clothing and other
committed by defendant, the amount of P20,000.00 under present inflationary
personal items; the other, her scientific papers, slides and other research
conditions as awarded . . . to the plaintiff as nominal damages, is too little to
material. But the other flights arriving from Rome did not have her baggage on
make up for the plaintiff's frustration and disappointment in not being able to
appear at said conference; and for the embarrassment and humiliation she
By then feeling desperate, she went to Rome to try to locate her bags herself. suffered from the academic community for failure to carry out an official mission
There, she inquired about her suitcases in the domestic and international for which she was singled out by the faculty to represent her institution and the
airports, and filled out the forms prescribed by ALITALIA for people in her country. After weighing carefully all the considerations, the amount awarded to
predicament. However, her baggage could not be found. Completely distraught the plaintiff for nominal damages and attorney's fees should be increased to the
cost of her round trip air fare or at the present rate of peso to the dollar at
ALITALIA has appealed to this Court on Certiorari. Here, it seeks to make determining the amount to which the carrier's liability is limited shall be only the
basically the same points it tried to make before the Trial Court and the total weight of the package or packages concerned. Nevertheless, when the
Intermediate Appellate Court, i.e.: loss, damage or delay of a part of the registered baggage or cargo, or of an
object contained therein, affects the value of other packages covered by the
1) that the Warsaw Convention should have been applied to limit ALITALIA'S same baggage check or the same air way bill, the total weight of such package
liability; and or packages shall also be taken into consideration in determining the limit of
2) that there is no warrant in fact or in law for the award to Dr. Pablo of nominal
damages and attorney's fees. 14 3. As regards objects of which the passenger takes charge himself the liability of
the carrier is limited to 5000 francs per passenger.
In addition, ALITALIA postulates that it was error for the Intermediate Appellate
Court to have refused to pass on all the assigned errors and in not stating the 4. The limits prescribed . . shall not prevent the court from awarding, in
facts and the law on which its decision is based. 15 accordance with its own law, in addition, the whole or part of the court costs and
of the other expenses of litigation incurred by the plaintiff. The foregoing
Under the Warsaw Convention, 16 an air carrier is made liable for damages for:
provision shall not apply if the amount of the damages awarded, excluding court
1) the death, wounding or other bodily injury of a passenger if the accident costs and other expenses of the litigation, does not exceed the sum which the
causing it took place on board the aircraft or in the course of its operations of carrier has offered in writing to the plaintiff within a period of six months from the
embarking or disembarking; 17 date of the occurrence causing the damage, or before the commencement of the
action, if that is later.
2) the destruction or loss of, or damage to, any registered luggage or goods, if
the occurrence causing it took place during the carriage by air;" 18 and 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 wilful
3) delay in the transportation by air of passengers, luggage or goods. 19 misconduct or by such default on his part as, in accordance with the law of the
court seized of the case, is considered to be equivalent to wilful misconduct," or
In these cases, it is provided in the Convention that the "action for damages, "if the damage is (similarly) caused . . by any agent of the carrier acting within
however, founded, can only be brought subject to conditions and limits set out" the scope of his employment." 22 The Hague Protocol amended the Warsaw
therein. 20 Convention by removing the provision that if the airline took all necessary steps
to avoid the damage, it could exculpate itself completely, 23 and declaring the
The Convention also purports to limit the liability of the carriers in the following
stated limits of liability not applicable "if it is proved that the damage resulted
manner: 21
from an act or omission of the carrier, its servants or agents, done with intent to
1. In the carriage of passengers the liability of the carrier for each passenger is cause damage or recklessly and with knowledge that damage would probably
limited to the sum of 250,000 francs . . . Nevertheless, by special contract, the result." The same deletion was effected by the Montreal Agreement of 1966,
carrier and the passenger may agree to a higher limit of liability.: nad with the result that a passenger could recover unlimited damages upon proof of
wilful misconduct. 24
2. a) In the carriage of registered baggage and of cargo, the liability of the carrier
is limited to a sum of 250 francs per kilogramme, unless the passenger or The Convention does not thus operate as an exclusive enumeration of the
consignor has made, at the time when the package was handed over to the instances of an airline's liability, or as an absolute limit of the extent of that
carrier, a special declaration of interest in delivery at destination and has paid a liability. Such a proposition is not borne out by the language of the Convention,
supplementary sum if the case so requires. In that case the carrier will be liable as this Court has now, and at an earlier time, pointed out. 25 Moreover, slight
to pay a sum not exceeding the declared sum, unless he proves that sum is reflection readily leads to the conclusion that it should be deemed a limit of
greater than the actual value to the consignor at delivery. liability only in those cases where the cause of the death or injury to person, or
destruction, loss or damage to property or delay in its transport is not attributable
b) In the case of loss, damage or delay of part of registered baggage or cargo, to or attended by any wilful misconduct, bad faith, recklessness, or otherwise
or of any object contained therein, the weight to be taken into consideration in improper conduct on the part of any official or employee for which the carrier is
responsible, and there is otherwise no special or extraordinary form of resulting her chagrin and embarrassment and the disappointment and annoyance of the
injury. The Convention's provisions, in short, do not "regulate or exclude liability organizers. She felt, not unreasonably, that the invitation for her to participate at
for other breaches of contract by the carrier" 26 or misconduct of its officers and the conference, extended by the Joint FAO/IAEA Division of Atomic Energy in
employees, or for some particular or exceptional type of damage. Otherwise, "an Food and Agriculture of the United Nations, was a singular honor not only to
air carrier would be exempt from any liability for damages in the event of its herself, but to the University of the Philippines and the country as well, an
absolute refusal, in bad faith, to comply with a contract of carriage, which is opportunity to make some sort of impression among her colleagues in that field
absurd." 27 Nor may it for a moment be supposed that if a member of the of scientific activity. The opportunity to claim this honor or distinction was
aircraft complement should inflict some physical injury on a passenger, or irretrievably lost to her because of Alitalia's breach of its contract.
maliciously destroy or damage the latter's property, the Convention might
successfully be pleaded as the sole gauge to determine the carrier's liability to Apart from this, there can be no doubt that Dr. Pablo underwent profound
the passenger. Neither may the Convention be invoked to justify the disregard of distress and anxiety, which gradually turned to panic and finally despair, from
some extraordinary sort of damage resulting to a passenger and preclude the time she learned that her suitcases were missing up to the time when,
recovery therefor beyond the limits set by said Convention. It is in this sense that having gone to Rome, she finally realized that she would no longer be able to
the Convention has been applied, or ignored, depending on the peculiar facts take part in the conference. As she herself put it, she "was really shocked and
presented by each case.:-cralaw distraught and confused."

In Pan American World Airways, Inc. v. I.A.C., 28 for example, the Warsaw Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the
Convention was applied as regards the limitation on the carrier's liability, there circumstances be restricted to that prescribed by the Warsaw Convention for
being a simple loss of baggage without any otherwise improper conduct on the delay in the transport of baggage.
part of the officials or employees of the airline or other special injury sustained
She is not, of course, entitled to be compensated for loss or damage to her
by the passenger.
luggage. As already mentioned, her baggage was ultimately delivered to her in
On the other hand, the Warsaw Convention has invariably been held Manila, tardily but safely. She is however entitled to nominal damages — which,
inapplicable, or as not restrictive of the carrier's liability, where there was as the law says, is adjudicated in order that a right of the plaintiff, which has
satisfactory evidence of malice or bad faith attributable to its officers and been violated or invaded by the defendant, may be vindicated and recognized,
employees. 29 Thus, an air carrier was sentenced to pay not only and not for the purpose of indemnifying the plaintiff for any loss suffered — and
compensatory but also moral and exemplary damages, and attorney's fees, for this Court agrees that the respondent Court of Appeals correctly set the amount
instance, where its employees rudely put a passenger holding a first-class ticket thereof at P40,000.00. As to the purely technical argument that the award to her
in the tourist or economy section, 30 or ousted a brown Asiatic from the plane to of such nominal damages is precluded by her omission to include a specific
give his seat to a white man, 31 or gave the seat of a passenger with a claim therefor in her complaint, it suffices to draw attention to her general prayer,
confirmed reservation to another, 32 or subjected a passenger to extremely following her plea for moral and exemplary damages and attorney's fees, "for
rude, even barbaric treatment, as by calling him a "monkey." 33 such other and further just and equitable relief in the premises," which certainly
is broad enough to comprehend an application as well for nominal damages.
In the case at bar, no bad faith or otherwise improper conduct may be ascribed Besides, petitioner should have realized that the explicit assertion, and proof,
to the employees of petitioner airline; and Dr. Pablo's luggage was eventually that Dr. Pablo's right had been violated or invaded by it — absent any claim for
returned to her, belatedly, it is true, but without appreciable damage. The fact is, actual or compensatory damages, the prayer thereof having been voluntarily
nevertheless, that some special species of injury was caused to Dr. Pablo deleted by Dr. Pablo upon the return to her of her baggage — necessarily raised
because petitioner ALITALIA misplaced her baggage and failed to deliver it to the issue of nominal damages.: rd
her at the time appointed — a breach of its contract of carriage, to be sure —
with the result that she was unable to read the paper and make the scientific This Court also agrees that respondent Court of Appeals correctly awarded
presentation (consisting of slides, autoradiograms or films, tables and attorney's fees to Dr. Pablo, and the amount of P5,000.00 set by it is reasonable
tabulations) that she had painstakingly labored over, at the prestigious in the premises. The law authorizes recovery of attorney's fees inter alia where,
international conference, to attend which she had traveled hundreds of miles, to as here, "the defendant's act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest," 34 or "where the
court deems it just and equitable." 35

WHEREFORE, no error being perceived in the challenged decision of the Court

of Appeals, it appearing on the contrary to be entirely in accord with the facts
and the law, said decision is hereby AFFIRMED, with costs against the
[Nominal, Temperate and Liquidated] In the meantime, plaintiffs Maria Salvacion Saludo and Saturnino Saludo, thru a
travel agent, were booked with United Airlines from Chicago to California, and
G.R. No. 95536 March 23, 1992 with PAL from California to Manila. She then went to the funeral director of
Pomierski Funeral Home who had her mother's remains and she told the
director that they were booked with United Airlines. But the director told her that
SALUDO and SATURNINO G. SALUDO, petitioners,
the remains were booked with TWA flight to California. This upset her, and she
and her brother had to change reservations from UA to the TWA flight after she
confirmed by phone that her mother's remains should be on that TWA flight.
They went to the airport and watched from the look-out area. She saw no body
being brought. So, she went to the TWA counter again, and she was told there
was no body on that flight. Reluctantly, they took the TWA flight upon assurance
REGALADO, J.: of her cousin, Ani Bantug, that he would look into the matter and inform her
about it on the plane or have it radioed to her. But no confirmation from her
Assailed in this petition for review on certiorari is the decision in CA-G.R. CV No. cousin reached her that her mother was on the West Coast.
20951 of respondent Court of Appeals1 which affirmed the decision of the trial
court2 dismissing for lack of evidence herein petitioners' complaint in Civil Case Upon arrival at San Francisco at about 5:00 p.m., she went to the TWA counter
No R-2101 of the then Court of First Instance of Southern Leyte, Branch I. there to inquire about her mother's remains. She was told they did not know
anything about it.
The facts, as recounted by the court a quo and adopted by respondent court
after "considering the evidence on record," are as follows: She then called Pomierski that her mother's remains were not at the West Coast
terminal, and Pomierski immediately called C.M.A.S., which in a matter of 10
After the death of plaintiffs' mother, Crispina Galdo Saludo, in Chicago Illinois, minutes informed him that the remains were on a plane to Mexico City, that
(on) October 23, 1976 (Exh. A), Pomierski and Son Funeral Home of Chicago, there were two bodies at the terminal, and somehow they were switched; he
made the necessary preparations and arrangements for the shipment, of the relayed this information to Miss Saludo in California; later C.M.A.S. called and
remains from Chicago to the Philippines. The funeral home had the remains told him they were sending the remains back to California via Texas (see Exh. 6-
embalmed (Exb. D) and secured a permit for the disposition of dead human TWA).
body on October 25, 1976 (Exh. C), Philippine Vice Consul in Chicago, Illinois,
Bienvenido M. Llaneta, at 3:00 p.m. on October 26, 1976 at the Pomierski & Son It-turned out that TWA had carried a shipment under PAL Airway Bill No. 079-
Funeral Home, sealed the shipping case containing a hermetically sealed casket ORD-01180454 on TWA Flight 603 of October 27, 1976, a flight earlier than
that is airtight and waterproof wherein was contained the remains of Crispina TWA Flight 131 of the same date. TWA delivered or transferred the said
Saludo Galdo (sic) (Exb. B). On the same date, October 26, 1976, Pomierski shipment said to contain human remains to PAL at 1400H or 2:00 p.m. of the
brought the remains to C.M.A.S. (Continental Mortuary Air Services) at the same date, October 27, 1976 (Bee Exh. 1- TWA). "Due to a switch(ing) in
airport (Chicago) which made the necessary arrangements such as flights, Chicago", this shipment was withdrawn from PAL by CMAS at 1805H (or 6:05
transfers, etc.; C.M.A.S. is a national service used by undertakers to throughout p.m.) of the same date, October 27 (Exh. 3-PAL, see Exh. 3-a-PAL).
the nation (U.S.A.), they furnish the air pouch which the casket is enclosed in,
and they see that the remains are taken to the proper air freight terminal (Exh. 6- What transpired at the Chicago (A)irport is explained in a memo or incident
TWA). C.M.A.S. booked the shipment with PAL thru the carrier's agent Air Care report by Pomierski (Exh. 6-TWA) to Pomierski's lawyers who in turn referred to
International, with Pomierski F.H. as the shipper and Mario (Maria) Saludo as said' memo and enclosed it in their (Pomierski's lawyers) answer dated July 18,
the consignee. PAL Airway Bill No. 079-01180454 Ordinary was issued wherein 1981 to herein plaintiff's counsel (See Exh. 5-TWA). In that memo or incident
the requested routing was from Chicago to San Francisco on board TWA Flight report (Exh. 6-TWA), it is stated that the remains (of Crispina Saludo) were
131 of October 27, 1976 and from San Francisco to Manila on board PAL Flight taken to CMAS at the airport; that there were two bodies at the (Chicago Airport)
No. 107 of the same date, and from Manila to Cebu on board PAL Flight 149 of terminal, and somehow they were switched, that the remains (of Crispina
October 29, 1976 (See Exh. E., Also Exh. 1-PAL). Saludo) were on a plane to Mexico City; that CMAS is a national service used by
undertakers throughout the nation (U.S.A.), makes all the necessary
arrangements, such as flights, transfers, etc., and see(s) to it that the remains At the outset and in view of the spirited exchanges of the parties on this aspect,
are taken to the proper air freight terminal. it is to be stressed that only questions of law may be raised in a petition filed in
this Court to review on certiorari the decision of the Court of Appeals.9 This
The following day October 28, 1976, the shipment or remains of Crispina Saludo being so, the factual findings of the Court of Appeals are final and conclusive
arrived (in) San Francisco from Mexico on board American Airlines. This and cannot be reviewed by the Supreme Court. The rule, however, admits of
shipment was transferred to or received by PAL at 1945H or 7:45 p.m. (Exh. 2- established exceptions, to wit: (a) where there is grave abuse of discretion; (b)
PAL, Exh. 2-a-PAL). This casket bearing the remains of Crispina Saludo, which when the finding is grounded entirely on speculations, surmises or
was mistakenly sent to Mexico and was opened (there), was resealed by Crispin conjectures;(c) when the inference made is manifestly-mistaken, absurd or
F. Patagas for shipment to the Philippines (See Exh. B-1). The shipment was impossible; (d) when the judgment of the Court of Appeals was based on a
immediately loaded on PAL flight for Manila that same evening and arrived (in) misapprehension of facts; (e) when the factual findings are conflicting; (f) when
Manila on October 30, 1976, a day after its expected arrival on October 29, the Court of Appeals, in making its findings, went beyond the issues of the case
1976.3 and the same are contrary to the admissions of both appellant and appellee; 10
(g) when the Court of Appeals manifestly overlooked certain relevant facts not
In a letter dated December 15, 1976,4 petitioners' counsel informed private
disputed by the parties and which, if properly considered, would justify a
respondent Trans World Airlines (TWA) of the misshipment and eventual delay
different conclusion; 11 and (h) where the findings of fact of the Court of Appeals
in the delivery of the cargo containing the remains of the late Crispin Saludo,
are contrary to those of the trial court, or are mere conclusions without citation of
and of the discourtesy of its employees to petitioners Maria Salvacion Saludo
specific evidence, or where the facts of set forth by the petitioner are not
and Saturnino Saludo. In a separate letter on June 10, 1977 addressed to co-
disputed by the respondent, or where the findings of fact of the Court of Appeals
respondent Philippine Airlines (PAL),5 petitioners stated that they were holding
are premised on the absence of evidence and are contradicted by the evidence
PAL liable for said delay in delivery and would commence judicial action should
on record. 12
no favorable explanation be given.
To distinguish, a question of law is one which involves a doubt or controversy on
Both private respondents denied liability. Thus, a damage suit6 was filed by
what the law is on a certain state of facts; and, a question of fact, contrarily, is
petitioners before the then Court of First Instance, Branch III, Leyte, praying for
one in which there is a doubt or difference as to the truth or falsehood of the
the award of actual damages of P50,000.00, moral damages of P1,000,000.00,
alleged facts. 13 One test, it has been held, is whether the appellate court can
exemplary damages, attorney's fees and costs of suit.
determine the issue raised without reviewing or evaluating the evidence, in
As earlier stated, the court below absolved the two respondent airlines which case it is a question of law, otherwise it will be a question of fact.14
companies of liability. The Court of Appeals affirmed the decision of the lower
Respondent airline companies object to the present recourse of petitioners on
court in toto, and in a subsequent resolution,7 denied herein petitioners' motion
the ground that this petition raises only factual questions. 15 Petitioners maintain
for reconsideration for lack of merit.
otherwise or, alternatively, they are of the position that, assuming that the
In predictable disagreement and dissatisfaction with the conclusions reached by petition raises factual questions, the same are within the recognized exceptions
respondent appellate court, petitioners now urge this Court to review the to the general rule as would render the petition cognizable and worthy of review
appealed decision and to resolve whether or not (1) the delay in the delivery of by the Court. 16
the casketed remains of petitioners' mother was due to the fault of respondent
Since it is precisely the soundness of the inferences or conclusions that may be
airline companies, (2) the one-day delay in the delivery of the same constitutes
drawn from the factual issues which are here being assayed, we find that the
contractual breach as would entitle petitioners to damages, (3) damages are
issues raised in the instant petition indeed warrant a second look if this litigation
recoverable by petitioners for the humiliating, arrogant and indifferent acts of the
is to come to a reasonable denouement. A discussion seriatim of said issues will
employees of TWA and PAL, and (4) private respondents should be held liable
further reveal that the sequence of the events involved is in effect disputed.
for actual, moral and exemplary damages, aside from attorney's fees and
Likewise to be settled is whether or not the conclusions of the Court of Appeals
litigation expenses.8
subject of this review indeed find evidentiary and legal support.
I. Petitioners fault respondent court for "not finding that private respondents must coincide in point of time or, for that matter, that the former should precede
failed to exercise extraordinary diligence required by law which resulted in the the latter.
switching and/or misdelivery of the remains of Crispina Saludo to Mexico
causing gross delay in its shipment to the Philippines, and consequently, Ordinarily, a receipt is not essential to a complete delivery of goods to the carrier
damages to petitioners." 17 for transportation but, when issued, is competent and prima facie, but not
conclusive, evidence of delivery to the carrier. A bill of lading, when properly
Petitioner allege that private respondents received the casketed remains of executed and delivered to a shipper, is evidence that the carrier has received
petitioners' mother on October 26, 1976, as evidenced by the issuance of PAL the goods described therein for shipment. Except as modified by statute, it is a
Air Waybill No. 079-01180454 18 by Air Care International as carrier's agent; general rule as to the parties to a contract of carriage of goods in connection
and from said date, private respondents were charged with the responsibility to with which a bill of lading is issued reciting that goods have been received for
exercise extraordinary diligence so much so that for the alleged switching of the transportation, that the recital being in essence a receipt alone, is not
caskets on October 27, 1976, or one day after private respondents received the conclusive, but may be explained, varied or contradicted by parol or other
cargo, the latter must necessarily be liable. evidence. 24

To support their assertion, petitioners rely on the jurisprudential dictum, both While we agree with petitioners' statement that "an airway bill estops the carrier
under American and Philippine law, that "(t)he issuance of a bill of lading carries from denying receipt of goods of the quantity and quality described in the bill," a
the presumption that the goods were delivered to the carrier issuing the bill, for further reading and a more faithful quotation of the authority cited would reveal
immediate shipment, and it is nowhere questioned that a bill of lading is prima that "(a) bill of lading may contain constituent elements of estoppel and thus
facie evidence of the receipt of the goods by the carrier. . . . In the absence of become something more than a contract between the shipper and the carrier. . .
convincing testimony establishing mistake, recitals in the bill of lading showing . (However), as between the shipper and the carrier, when no goods have been
that the carrier received the goods for shipment on a specified date control (13 delivered for shipment no recitals in the bill can estop the carrier from showing
C.J.S. 235)." 19 the true facts . . . Between the consignor of goods and receiving carrier, recitals
in a bill of lading as to the goods shipped raise only a rebuttable presumption
A bill of lading is a written acknowledgment of the receipt of the goods and an that such goods were delivered for shipment. As between the consignor and a
agreement to transport and deliver them at a specified place to a person named receiving carrier, the fact must outweigh the recital." 25 (Emphasis supplied)
or on his order. Such instrument may be called a shipping receipt, forwarder's
receipt and receipt for transportation. 20 The designation, however, is For this reason, we must perforce allow explanation by private respondents why,
immaterial. It has been hold that freight tickets for bus companies as well as despite the issuance of the airway bill and the date thereof, they deny having
receipts for cargo transported by all forms of transportation, whether by sea or received the remains of Crispina Saludo on October 26, 1976 as alleged by
land, fall within the definition. Under the Tariff and Customs Code, a bill of lading petitioners.
includes airway bills of lading. 21 The two-fold character of a bill of lading is all
too familiar; it is a receipt as to the quantity and description of the goods shipped The findings of the trial court, as favorably adopted by the Court of Appeals and
and a contract to transport the goods to the consignee or other person therein which we have earner quoted, provide us with the explanation that sufficiently
designated, on the terms specified in such instrument. 22 over comes the presumption relied on by petitioners in insisting that the remains
of their mother were delivered to and received by private respondents on
Logically, since a bill of lading acknowledges receipt of goods to be transported, October 26, 1976. Thus —
delivery of the goods to the carrier normally precedes the issuance of the bill; or,
to some extent, delivery of the goods and issuance of the bill are regarded in . . . Philippine Vice Consul in Chicago, Illinois, Bienvenido M. Llaneta, at 3:00
commercial practice as simultaneous acts. 23 However, except as may be p.m. on October 26, 1976 at the Pomierski & Son Funeral Home, sealed the
prohibited by law, there is nothing to prevent an inverse order of events, that is, shipping case containing a hermetically sealed casket that is airtight and
the execution of the bill of lading even prior to actual possession and control by waterproof wherein was contained the remains of Crispina Saludo Galdo (sic)
the carrier of the cargo to be transported. There is no law which requires that the (Exh. B). On the same date October 26, 1976, Pomierski brought the remains to
delivery of the goods for carriage and the issuance of the covering bill of lading C.M.A.S. (Continental Mortuary Air Services) at the airport (Chicago) which
made the necessary arrangements such as flights, transfers, etc; C.M.A.S. is a
national service used by undertakers throughout the nation (U.S.A.), they furnish consignee or such other person entitled to receive them. 30 And, there is
the air pouch which the casket is enclosed in, and they see that the remains are delivery to the carrier when the goods are ready for and have been placed in the
taken to the proper air freight terminal (Exh. G-TWA). C.M.A.S. booked the exclusive possession, custody and control of the carrier for the purpose of their
shipment with PAL thru the carrier's agent Air Care International, with Pomierski immediate transportation and the carrier has accepted them. 31 Where such a
F.H. as the shipper and Mario (Maria) Saludo as the consignee. PAL Airway Bill delivery has thus been accepted by the carrier, the liability of the common
No. 079- 01180454 Ordinary was issued wherein the requested routing was carrier commences eo instanti. 32
from Chicago to San Francisco on board TWA Flight-131 of October 27;1976,
and from San Francisco to Manila on board PAL Flight No. 107 of the same Hence, while we agree with petitioners that the extraordinary diligence statutorily
date, and from Manila to Cebu on board PAL Flight 149 of October 29, 1976 required to be observed by the carrier instantaneously commences upon
(See Exh. E, also Exh. 1-PAL).26 (Emphasis ours.) delivery of the goods thereto, for such duty to commence there must in fact have
been delivery of the cargo subject of the contract of carriage. Only when such
Moreover, we are persuaded to believe private respondent PAL's account as to fact of delivery has been unequivocally established can the liability for loss,
what transpired October 26, 1976: destruction or deterioration of goods in the custody of the carrier, absent the
excepting causes under Article 1734, attach and the presumption of fault of the
. . . Pursuant thereto, on 26 October 1976, CMAS acting upon the instruction of carrier under Article 1735 be invoked.
Pomierski, F.H., the shipper requested booking of the casketed remains of Mrs.
Cristina (sic) Saludo on board PAL's San Francisco-Manila Flight No. PR 107 on As already demonstrated, the facts in the case at bar belie the averment that
October 27, 1976. there was delivery of the cargo to the carrier on October 26, 1976. Rather, as
earlier explained, the body intended to be shipped as agreed upon was really
2. To signify acceptance and confirmation of said booking, PAL issued to said placed in the possession and control of PAL on October 28, 1976 and it was
Pomierski F.H., PAL Airway Bill No. 079-01180454 dated October 27, 1976 (sic, from that date that private respondents became responsible for the agreed
"10/26/76"). PAL confirmed the booking and transporting of the shipment on cargo under their undertakings in PAL Airway Bill No. 079-01180454.
board of its Flight PR 107 on October 27, 1976 on the basis of the Consequently, for the switching of caskets prior thereto which was not caused
representation of the shipper and/or CMAS that the said cargo would arrive in by them, and subsequent events caused thereby, private respondents cannot be
San Francisco from Chicago on board United Airlines Flight US 121 on 27 held liable.
October 1976.27
Petitioners, proceeding on the premise that there was delivery of the cargo to
In other words, on October 26, 1976 the cargo containing the casketed remains private respondents on October 26,1976 and that the latter's extraordinary
of Crispina Saludo was booked for PAL Flight Number PR-107 leaving San responsibility had by then become operative, insist on foisting the blame on
Francisco for Manila on October 27, 1976, PAL Airway Bill No. 079-01180454 private respondents for the switching of the two caskets which occurred on
was issued, not as evidence of receipt of delivery of the cargo on October 26, October 27, 1976. It is argued that since there is no clear evidence establishing
1976, but merely as a confirmation of the booking thus made for the San the fault Continental Mortuary Air Services (CMAS) for the mix-up, private
Francisco-Manila flight scheduled on October 27, 1976. Actually, it was not until respondents are presumably negligent pursuant to Article 1735 of the Civil Code
October 28, 1976 that PAL received physical delivery of the body at San and, for failure to rebut such presumption, they must necessarily be held liable;
Francisco, as duly evidenced by the Interline Freight Transfer Manifest of the or, assuming that CMAS was at fault, the same does not absolve private
American Airline Freight System and signed for by Virgilio Rosales at 1945H, or respondents of liability because whoever brought the cargo to the airport or
7:45 P.M. on said date.28 loaded it on the plane did so as agent of private respondents.
Explicit is the rule under Article 1736 of the Civil Code that the extraordinary This contention is without merit. As pithily explained by the Court of Appeals:
responsibility of the common carrier begins from the time the goods are
delivered to the carrier. This responsibility remains in full force and effect even The airway bill expressly provides that "Carrier certifies goods described below
when they are temporarily unloaded or stored in transit, unless the shipper or were received for carriage", and said cargo was "casketed human remains of
owner exercises the right of stoppage in transitu, 29 and terminates only after Crispina Saludo," with "Maria Saludo as Consignee; Pomierski F.H. as Shipper;
the lapse of a reasonable time for the acceptance, of the goods by the Air Care International as carrier's agent." On the face of the said airway bill, the
specific flight numbers, specific routes of shipment and dates of departure and and/or TWA, the entire fault or negligence being exclusively with C.M.A.S.33
arrival were typewritten, to wit: Chicago TWA Flight 131/27 to San Francisco (Emphasis supplied.)
and from San Francisco by PAL 107 on, October 27, 1976 to Philippines and to
Cebu via PAL Flight 149 on October 29, 1976. The airway bill also contains the It can correctly and logically be concluded, therefore, that the switching occurred
following typewritten words, as follows: all documents have been examined (sic). or, more accurately, was discovered on October 27, 1976; and based on the
Human remains of Crispina Saludo. Please return back (sic) first available flight above findings of the Court of appeals, it happened while the cargo was still with
to SFO. CMAS, well before the same was place in the custody of private respondents.

But, as it turned out and was discovered later the casketed human remains Thus, while the Air Cargo Transfer Manifest of TWA of October 27, 197634 was
which was issued PAL Airway Bill #079-1180454 was not the remains of signed by Garry Marcial of PAL at 1400H, or 2:00 P.M., on the same date,
Crispina Saludo, the casket containing her remains having been shipped to thereby indicating acknowledgment by PAL of the transfer to them by TWA of
Mexico City. what was in truth the erroneous cargo, said misshipped cargo was in fact
withdrawn by CMAS from PAL as shown by the notation on another copy of said
However, it should be noted that, Pomierski F.H., the shipper of Mrs. Saludo's manifest35 stating "Received by CMAS — Due to switch in Chicago 10/27-
remains, hired Continental Mortuary Services (hereafter referred to as 1805H," the authenticity of which was never challenged. This shows that said
C.M.A.S.), which is engaged in the business of transporting and forwarding misshipped cargo was in fact withdrawn by CMAS from PAL and the correct
human remains. Thus, C.M.A.S. made all the necessary arrangements such as shipment containing the body of Crispina Saludo was received by PAL only on
flights, transfers, etc. — for shipment of the remains of Crispina Saludo. October 28, 1976, at 1945H, or 7:45 P.M., per American Airlines Interline Freight
Transfer Manifest No. AA204312.36
The remains were taken on October 26th, 1976, to C.M.A.S. at the airport.
These people made all the necessary arrangements, such as flights, transfers, Witness the deposition of TWA's ramp serviceman, Michael Giosso, on this
etc. This is a national service used by undertakers throughout the nation. They matter:
furnished the air pouch which the casket is enclosed in, and they see that the
remains are taken to the proper air frieght terminal. I was very surprised when ATTY. JUAN COLLAS, JR.:
Miss Saludo called me to say that the remains were not at the west coast
On that date, do (sic) you have occasion to handle or deal with the transfer of
terminal. I immediately called C.M.A.S. They called me back in a matter of ten
cargo from TWA Flight No. 603 to PAL San Francisco?
minutes to inform me that the remains were on a plane to Mexico City. The man
said that there were two bodies at the terminal, and somehow they were MICHAEL GIOSSO:
switched. . . . (Exb. 6 — "TWA", which is the memo or incident report enclosed
in the stationery of Walter Pomierski & Sons Ltd.) Yes, I did.

Consequently, when the cargo was received from C.M.A.S. at the Chicago ATTY. JUAN COLLAS, JR.:
airport terminal for shipment, which was supposed to contain the remains of
Crispina Saludo, Air Care International and/or TWA, had no way of determining What was your participation with the transfer of the cargo?
its actual contents, since the casket was hermetically sealed by the Philippine
Vice-Consul in Chicago and in an air pouch of C.M.A.S., to the effect that Air
Care International and/or TWA had to rely on the information furnished by the I manifested the freight on a transfer manifest and physically moved it to PAL
shipper regarding the cargo's content. Neither could Air Care International and concluded the transfer by signing it off.
and/or TWA open the casket for further verification, since they were not only
without authority to do so, but even prohibited. ATTY. JUAN COLLAS, JR.:

Thus, under said circumstances, no fault and/or negligence can be attributed to You brought it there yourself?
PAL (even if Air Care International should be considered as an agent of PAL)
Yes sir. ALBERTO A. LIM:

ATTY. JUAN COLIAS, JR.: If I recall correctly, I was queried by Manila, our Manila office with regard to a
certain complaint that a consignee filed that this shipment did not arrive on the
Do you have anything to show that PAL received the cargo from TWA on day that the consignee expects the shipment to arrive.
October 27, 1976?
Okay. Now, upon receipt of that query from your Manila office, did you conduct
Yes, I do. any investigation to pinpoint the possible causes of mishandling?

(Witness presenting a document) ALBERTO A. LIM:


For purposes of clarity, Exhibit I is designated as Exhibit I-TWA. xxx xxx xxx


ATTY. JUAN COLLAS, JR.: What is the result of your investigation?

This Exhibit I-TWA, could you tell what it is, what it shows? ALBERTO A. LIM:

MICHAEL GIOSSO: In the course of my investigation, I found that we received the body on October
28, 1976, from American Airlines.
It shows transfer of manifest on 10-27-76 to PAL at 1400 and verified with two
signatures as it completed the transfer. ATTY. CESAR P. MANALAYSAY:

ATTY. JUAN COLLAS, JR.: What body are you referring to?

Very good,. Who was the PAL employee who received the cargo? xxx xxx xxx


The name is Garry Marcial." 37 The remains of Mrs. Cristina (sic) Saludo.

The deposition of Alberto A. Lim, PAL's cargo supervisor at San Francisco, as ATTY. CESAR P. MANALAYSAY:
deponent-witness for PAL, makes this further clarification:
Is that the same body mentioned in this Airway Bill?
You mentioned Airway Bill, Mr. Lim. I am showing to you a PAL Airway Bill
Number 01180454 which for purposes of evidence, I would like to request that Yes.
the same be marked as evidence Exhibit I for PAL.
xxx xxx xxx
What time did you receive said body on October 28, 1976?
In what circumstances did you encounter Exhibit I-PAL?

If I recall correctly, approximately 7:45 of October 28, 1976. It is true that we received human remains shipment from TWA as indicated on
this Transfer Manifest. But in the course of investigation, it was found out that
ATTY. CESAR P. MANALAYSAY: the human remains transferred to us is not the remains of Mrs. Cristina (sic)
Saludo this is the reason why we did not board it on our flight. 38
Do you have any proof with you to back the statement?
Petitioners consider TWA's statement that "it had to rely on the information
furnished by the shipper" a lame excuse and that its failure to prove that its
Yes. We have on our records a Transfer Manifest from American Airlines personnel verified and identified the contents of the casket before loading the
Number 204312 showing that we received a human remains shipment belong to same constituted negligence on the part of TWA.39
Mrs. Cristina (sic) Saludo or the human remains of Mrs. Cristina (sic) Saludo.
We upbold the favorable consideration by the Court of Appeals of the following
ATTY. CESAR P. MAIALAYSAY: findings of the trial court:

At this juncture, may I request that the Transfer Manifest referred to by the It was not (to) TWA, but to C.M.A.S. that the Pomierski & Son Funeral Home
witness be marked as an evidence as Exhibit II-PAL. delivered the casket containing the remains of Crispina Saludo. TWA would
have no knowledge therefore that the remains of Crispina Saludo were not the
xxx xxx xxx ones inside the casket that was being presented to it for shipment. TWA would
have to rely on there presentations of C.M.A.S. The casket was hermetically
Mr. Lim, yesterday your co-defendant TWA presented as their Exhibit I evidence sealed and also sealed by the Philippine Vice Consul in Chicago. TWA or any
tending to show that on October 27, 1976 at about 2:00 in the, afternoon they airline for that matter would not have opened such a sealed casket just for the
delivered to you a cargo bearing human remains. Could you go over this Exhibit purpose of ascertaining whose body was inside and to make sure that the
I and please give us your comments as to that exhibit? remains inside were those of the particular person indicated to be by C.M.A.S.
TWA had to accept whatever information was being furnished by the shipper or
by the one presenting the casket for shipment. And so as a matter of fact, TWA
That is a vague question. I would rather request that counsel propound specific carried to San Francisco and transferred to defendant PAL a shipment covered
questions rather than asking for comments on Exhibit I-TWA. by or under PAL Airway Bill No. 079-ORD-01180454, the airway bill for the
shipment of the casketed remains of Crispina Saludo. Only, it turned out later,
ATTY. CESAR P. MANALAYSAY: while the casket was already with PAL, that what was inside the casket was not
the body of Crispina Saludo so much so that it had to be withdrawn by C.M.A.S.
In that case, I will reform my question. Could you tell us whether TWA in fact from PAL. The body of Crispina Saludo had been shipped to Mexico. The casket
delivered to you the human remains as indicated in that Transfer Manifest? containing the remains of Crispina Saludo was transshipped from Mexico and
arrived in San Francisco the following day on board American Airlines. It was
immediately loaded by PAL on its flight for Manila.
Yes, they did.
The foregoing points at C.M.A.S., not defendant TWA much less defendant PAL,
ATTY. CESAR P. MANALAYSAY: as the ONE responsible for the switching or mix-up of the two bodies at the
Chicago Airport terminal, and started a chain reaction of the misshipment of the
I noticed that the Transfer Manifest of TWA marked as Exhibit I-TWA bears the body of Crispina Saludo and a one-day delay in the delivery thereof to its
same numbers or the same entries as the Airway Bill marked as Exhibit I-A PAL destination.40
tending to show that this is the human remains of Mrs Cristina (sic) Saludo.
Could you tell us whether this is true? Verily, no amount of inspection by respondent airline companies could have
guarded against the switching that had already taken place. Or, granting that
they could have opened the casket to inspect its contents, private respondents cargo contained "casketed human remains of Crispina Saludo," was issued on
had no means of ascertaining whether the body therein contained was indeed the basis of such representations. The reliance thereon by private respondents
that of Crispina Saludo except, possibly, if the body was that of a male person was reasonable and, for so doing, they cannot be said to have acted negligently.
and such fact was visually apparent upon opening the casket. However, to Likewise, no evidence was adduced to suggest even an iota of suspicion that
repeat, private respondents had no authority to unseal and open the same nor the cargo presented for transportation was anything other than what it was
did they have any reason or justification to resort thereto. declared to be, as would require more than routine inspection or call for the
carrier to insist that the same be opened for scrutiny of its contents per
It is the right of the carrier to require good faith on the part of those persons who declaration.
deliver goods to be carried, or enter into contracts with it, and inasmuch as the
freight may depend on the value of the article to be carried, the carrier ordinarily Neither can private respondents be held accountable on the basis of petitioners'
has the right to inquire as to its value. Ordinarily, too, it is the duty of the carrier preposterous proposition that whoever brought the cargo to the airport or loaded
to make inquiry as to the general nature of the articles shipped and of their value it on the airplane did so as agent of private respondents, so that even if CMAS
before it consents to carry them; and its failure to do so cannot defeat the whose services were engaged for the transit arrangements for the remains was
shipper's right to recovery of the full value of the package if lost, in the absence indeed at fault, the liability therefor would supposedly still be attributable to
of showing of fraud or deceit on the part of the shipper. In the absence of more private respondents.
definite information, the carrier has a the right to accept shipper's marks as to
the contents of the package offered for transportation and is not bound to inquire While we agree that the actual participation of CMAS has been sufficiently and
particularly about them in order to take advantage of a false classification and correctly established, to hold that it acted as agent for private respondents would
where a shipper expressly represents the contents of a package to be of a be both an inaccurate appraisal and an unwarranted categorization of the legal
designated character, it is not the duty of the carrier to ask for a repetition of the position it held in the entire transaction.
statement nor disbelieve it and open the box and see for itself. 41 However,
It bears repeating that CMAS was hired to handle all the necessary shipping
where a common carrier has reasonable ground to suspect that the offered
arrangements for the transportation of the human remains of Crispina Saludo to
goods are of a dangerous or illegal character, the carrier has the right to know
Manila. Hence, it was to CMAS that the Pomierski & Son Funeral Home, as
the character of such goods and to insist on an inspection, if reasonable and
shipper, brought the remains of petitioners' mother for shipment, with Maria
practical under the circumstances, as a condition of receiving and transporting
Saludo as consignee. Thereafter, CMAS booked the shipment with PAL through
such goods.42
the carrier's agent, Air Care International. 45 With its aforestated functions,
It can safely be said then that a common carrier is entitled to fair representation CMAS may accordingly be classified as a forwarder which, by accepted
of the nature and value of the goods to be carried, with the concomitant right to commercial practice, is regarded as an agent of the shipper and not of the
rely thereon, and further noting at this juncture that a carrier has no obligation to carrier. As such, it merely contracts for the transportation of goods by carriers,
inquire into the correctness or sufficiency of such information. 43 The and has no interest in the freight but receives compensation from the shipper as
consequent duty to conduct an inspection thereof arises in the event that there his agent. 46
should be reason to doubt the veracity of such representations. Therefore, to be
At this point, it can be categorically stated that, as culled from the findings of
subjected to unusual search, other than the routinary inspection procedure
both the trial court and appellate courts, the entire chain of events which
customarily undertaken, there must exist proof that would justify cause for
culminated in the present controversy was not due to the fault or negligence of
apprehension that the baggage is dangerous as to warrant exhaustive
private respondents. Rather, the facts of the case would point to CMAS as the
inspection, or even refusal to accept carriage of the same; and it is the failure of
culprit. Equally telling of the more likely possibility of CMAS' liability is
the carrier to act accordingly in the face of such proof that constitutes the basis
petitioners' letter to and demanding an explanation from CMAS regarding the
of the common carrier's liability. 44
statement of private respondents laying the blame on CMAS for the incident,
In the case at bar, private respondents had no reason whatsoever to doubt the portions of which, reading as follows:
truth of the shipper's representations. The airway bill expressly providing that
. . . we were informed that the unfortunate a mix-up occurred due to your
"carrier certifies goods received below were received for carriage," and that the
negligence. . . .
Likewise, the two airlines pinpoint the responsibility upon your agents. Evidence presumably caused the mix-up by loading the wrong casket on the plane. For
were presented to prove that allegation. said error, they contend, TWA must necessarily be presumed negligent and this
presumption of negligence stands undisturbed unless rebutting evidence is
On the face of this overwhelming evidence we could and should have filed a presented to show that the switching or misdelivery was due to circumstances
case against you. . . . 47 that would exempt the carrier from liability.

clearly allude to CMAS as the party at fault. This is tantamount to an admission Private respondent TWA professes otherwise. Having duly delivered or
by petitioners that they consider private respondents without fault, or is at the transferred the cargo to its co-respondent PAL on October 27, 1976 at 2:00
very least indicative of the fact that petitioners entertained serious doubts as to P.M., as supported by the TWA Transfer Manifest, TWA faithfully complied with
whether herein private respondents were responsible for the unfortunate turn of its obligation under the airway bill. Said faithful compliance was not affected by
events. the fact that the remains were shipped on an earlier flight as there was no fixed
time for completion of carriage stipulated on. Moreover, the carrier did not
Undeniably, petitioners' grief over the death of their mother was aggravated by
undertake to carry the cargo aboard any specified aircraft, in view of the
the unnecessary inconvenience and anxiety that attended their efforts to bring
condition on the back of the airway bill which provides:
her body home for a decent burial. This is unfortunate and calls for sincere
commiseration with petitioners. But, much as we would like to give them CONDITIONS OF CONTRACT
consolation for their undeserved distress, we are barred by the inequity of
allowing recovery of the damages prayed for by them at the expense of private xxx xxx xxx
respondents whose fault or negligence in the very acts imputed to them has not
been convincingly and legally demonstrated. It is agreed that no time is fixed for the completion of carriage hereunder and
that Carrier may without notice substitute alternate carriers or aircraft. Carrier
Neither are we prepared to delve into, much less definitively rule on, the assumes no obligation to carry the goods by any specified aircraft or over any
possible liability of CMAS as the evaluation and adjudication of the same is not particular route or routes or to make connection at any point according to any
what is presently at issue here and is best deferred to another time and particular schedule, and Carrier is hereby authorized to select, or deviate from
addressed to another forum. the route or routes of shipment, notwithstanding that the same may be stated on
the face hereof. The shipper guarantees payment of all charges and
II. Petitioners further fault the Court of Appeals for ruling that there was no advances.48
contractual breach on the part of private respondents as would entitle petitioners
to damages. Hence, when respondent TWA shipped the body on earlier flight and on a
different aircraft, it was acting well within its rights. We find this argument
Petitioners hold that respondent TWA, by agreeing to transport the remains of tenable.
petitioners' mother on its Flight 131 from Chicago to San Francisco on October
27, 1976, made itself a party to the contract of carriage and, therefore, was The contention that there was contractual breach on the part of private
bound by the terms of the issued airway bill. When TWA undertook to ship the respondents is founded on the postulation that there was ambiguity in the terms
remains on its Flight 603, ten hours earlier than scheduled, it supposedly of the airway bill, hence petitioners' insistence on the application of the rules on
violated the express agreement embodied in the airway bill. It was allegedly this interpretation of contracts and documents. We find no such ambiguity. The
breach of obligation which compounded, if not directly caused, the switching of terms are clear enough as to preclude the necessity to probe beyond the
the caskets. apparent intendment of the contractual provisions.

In addition, petitioners maintain that since there is no evidence as to who placed The hornbook rule on interpretation of contracts consecrates the primacy of the
the body on board Flight 603, or that CMAS actually put the cargo on that flight, intention of the parties, the same having the force of law between them. When
or that the two caskets at the Chicago airport were to be transported by the the terms of the agreement are clear and explicit, that they do not justify an
same airline, or that they came from the same funeral home, or that both attempt to read into any alleged intention of the parties, the terms are to be
caskets were received by CMAS, then the employees or agents of TWA understood literally just as they appear on the face of the contract.49 The
various stipulations of a contract shall be interpreted together50 and such a provided for such a situation by explicitly stating that the above condition
construction is to be adopted as will give effect to all provisions thereof.51 A remains effective "notwithstanding that the same (fixed time for completion of
contract cannot be construed by parts, but its clauses should be interpreted in carriage, specified aircraft, or any particular route or schedule) may be stated on
relation to one another. The whole contract must be interpreted or read together the face hereof." While petitioners hinge private respondents' culpability on the
in order to arrive at its true meaning. Certain stipulations cannot be segregated fact that the carrier "certifies goods described below were received for carriage,"
and then made to control; neither do particular words or phrases necessarily they may have overlooked that the statement on the face of the airway bill
determine the character of a contract. The legal effect of the contract is not to be properly and completely reads —
determined alone by any particular provision disconnected from all others, but in
the ruling intention of the parties as gathered from all the language they have Carrier certifies goods described below were received for carriage subject to the
used and from their contemporaneous and subsequent acts. 52 Conditions on the reverse hereof the goods then being in apparent good order
and condition except as noted hereon. 55 (Emphasis ours.)
Turning to the terms of the contract at hand, as presented by PAL Air Waybill
No. 079-01180454, respondent court approvingly quoted the trial court's Private respondents further aptly observe that the carrier's certification regarding
disquisition on the aforequoted condition appearing on the reverse side of the receipt of the goods for carriage "was of a smaller print than the condition of the
airway bill and its disposition of this particular assigned error: Air Waybill, including Condition No. 5 — and thus if plaintiffs-appellants had
recognized the former, then with more reason they were aware of the latter. 56
The foregoing stipulation fully answers plaintiffs' objections to the one-day delay
and the shipping of the remains in TWA Flight 603 instead of TWA Flight 131. In the same vein, it would also be incorrect to accede to the suggestion of
Under the stipulation, parties agreed that no time was fixed to complete the petitioners that the typewritten specifications of the flight, routes and dates of
contract of carriage and that the carrier may, without notice, substitute alternate departures and arrivals on the face of the airway bill constitute a special contract
carriers or aircraft. The carrier did not assume the obligation to carry the which modifies the printed conditions at the back thereof. We reiterate that
shipment on any specified aircraft. typewritten provisions of the contract are to be read and understood subject to
and in view of the printed conditions, fully reconciling and giving effect to the
xxx xxx xxx manifest intention of the parties to the agreement.

Furthermore, contrary to the claim of plaintiffs-appellants, the conditions of the The oft-repeated rule regarding a carrier's liability for delay is that in the absence
Air Waybill are big enough to be read and noticed. Also, the mere fact that the of a special contract, a carrier is not an insurer against delay in transportation of
cargo in question was shipped in TWA Flight 603, a flight earlier on the same goods. When a common carrier undertakes to convey goods, the law implies a
day than TWA Flight 131, did not in any way cause or add to the one-day delay contract that they shall be delivered at destination within a reasonable time, in
complained of and/or the switching or mix-up of the bodies.53 the absence, of any agreement as to the time of delivery. 57 But where a carrier
has made an express contract to transport and deliver property within a
Indubitably, that private respondent can use substitute aircraft even without specified time, it is bound to fulfill its contract and is liable for any delay, no
notice and without the assumption of any obligation whatsoever to carry the matter from what cause it may have arisen. 58 This result logically follows from
goods on any specified aircraft is clearly sanctioned by the contract of carriage the well-settled rule that where the law creates a duty or charge, and the party is
as specifically provided for under the conditions thereof. disabled from performing it without any default in himself, and has no remedy
over, then the law will excuse him, but where the party by his own contract
Petitioners' invocation of the interpretative rule in the Rules of Court that written
creates a duty or charge upon himself, he is bound to make it good
words control printed words in documents, 54 to bolster their assertion that the
notwithstanding any accident or delay by inevitable necessity because he might
typewritten provisions regarding the routing and flight schedule prevail over the
have provided against it by contract. Whether or not there has been such an
printed conditions, is tenuous. Said rule may be considered only when there is
undertaking on the part of the carrier to be determined from the circumstances
inconsistency between the written and printed words of the contract.
surrounding the case and by application of the ordinary rules for the
As previously stated, we find no ambiguity in the contract subject of this case interpretation of contracts.59
that would call for the application of said rule. In any event, the contract has
Echoing the findings of the trial court, the respondent court correctly declared with full knowledge of its contents, and acceptance under such circumstances
that — makes it a binding contract. In order that any presumption of assent to a
stipulation in a bill of lading limiting the liability of a carrier may arise, it must
In a similar case of delayed delivery of air cargo under a very similar stipulation appear that the clause containing this exemption from liability plainly formed a
contained in the airway bill which reads: "The carrier does not obligate itself to part of the contract contained in the bill of lading. A stipulation printed on the
carry the goods by any specified aircraft or on a specified time. Said carrier back of a receipt or bill of lading or on papers attached to such receipt will be
being hereby authorized to deviate from the route of the shipment without any quite as effective as if printed on its face, if it is shown that the consignor knew
liability therefor", our Supreme Court ruled that common carriers are not of its terms. Thus, where a shipper accepts a receipt which states that its
obligated by law to carry and to deliver merchandise, and persons are not conditions are to be found on the back, such receipt comes within the general
vested with the right to prompt delivery, unless such common carriers previously rule, and the shipper is held to have accepted and to be bound by the conditions
assume the obligation. Said rights and obligations are created by a specific there to be found. 61
contract entered into by the parties (Mendoza vs. PAL, 90 Phil. 836).
Granting arguendo that Condition No. 5 partakes of the nature of a contract of
There is no showing by plaintiffs that such a special or specific contract had adhesion and as such must be construed strictly against the party who drafted
been entered into between them and the defendant airline companies. the same or gave rise to any ambiguity therein, it should be borne in mind that a
contract of adhesion may be struck down as void and unenforceable, for being
And this special contract for prompt delivery should call the attention of the
subversive of public policy, only when the weaker party is imposed upon in
carrier to the circumstances surrounding the case and the approximate amount
dealing with the dominant bargaining party and is reduced to the alternative of
of damages to be suffered in case of delay (See Mendoza vs. PAL, supra).
taking it or leaving it, completely deprived of the opportunity to bargain on equal
There was no such contract entered into in the instant case.60
footing. 62 However, Ong Yiu vs. Court of Appeals, et al 63 instructs us that
Also, the theory of petitioners that the specification of the flights and dates of contracts of adhesion are not entirely prohibited. The one who adheres to the
departure and arrivals constitute a special contract that could prevail over the contract is in reality free to reject it entirely; if he adheres, be gives his consent.
printed stipulations at the back of the airway bill is vacuous. To countenance Accordingly, petitioners, far from being the weaker party in this situation, duly
such a postulate would unduly burden the common carrier for that would have signified their presumed assent to all terms of the contract through their
the effect of unilaterally transforming every single bill of lading or trip ticket into a acceptance of the airway bill and are consequently bound thereby. It cannot be
special contract by the simple expedient of filling it up with the particulars of the gainsaid that petitioners' were not without several choices as to carriers in
flight, trip or voyage, and thereby imposing upon the carrier duties and/or Chicago with its numerous airways and airliner servicing the same.
obligations which it may not have been ready or willing to assume had it been
We wish to allay petitioners' apprehension that Condition No. 5 of the airway bill
timely, advised thereof.
is productive of mischief as it would validate delay in delivery, sanction violations
Neither does the fact that the challenged condition No. 5 was printed at the back of contractual obligations with impunity or put a premium on breaches of
of the airway bill militate against its binding effect on petitioners as parties to the contract.
contract, for there were sufficient indications on the face of said bill that would
Just because we have said that condition No. 5 of the airway bill is binding upon
alert them to the presence of such additional condition to put them on their
the parties to and fully operative in this transaction, it does not mean, and let this
guard. Ordinary prudence on the part of any person entering or contemplating to
serve as fair warning to respondent carriers, that they can at all times
enter into a contract would prompt even a cursory examination of any such
whimsically seek refuge from liability in the exculpatory sanctuary of said
conditions, terms and/or stipulations.
Condition No. 5 or arbitrarily vary routes, flights and schedules to the prejudice
There is a holding in most jurisdictions that the acceptance of a bill of lading of their customers. This condition only serves to insulate the carrier from liability
without dissent raises a presumption that all terms therein were brought to the in those instances when changes in routes, flights and schedules are clearly
knowledge of the shipper and agreed to by him, and in the absence of fraud or justified by the peculiar circumstances of a particular case, or by general
mistake, he is estopped from thereafter denying that he assented to such terms. transportation practices, customs and usages, or by contingencies or
This rule applies with particular force where a shipper accepts a bill of lading emergencies in aviation such as weather turbulence, mechanical failure,
requirements of national security and the like. And even as it is conceded that being passengers and not merely consignors of goods, petitioners had the right
specific routing and other navigational arrangements for a trip, flight or voyage, to be treated with courtesy, respect, kindness and due consideration.
or variations therein, generally lie within the discretion of the carrier in the
absence of specific routing instructions or directions by the shipper, it is plainly In riposte, TWA claims that its employees have always dealt politely with all
incumbent upon the carrier to exercise its rights with due deference to the rights, clients, customers and the public in general. PAL, on the other hand, declares
interests and convenience of its customers. that in the performance of its obligation to the riding public, other customers and
clients, it has always acted with justice, honesty, courtesy and good faith.
A common carrier undertaking to transport property has the implicit duty to carry
and deliver it within reasonable time, absent any particular stipulation regarding Respondent appellate court found merit in and reproduced the trial court's
time of delivery, and to guard against delay. In case of any unreasonable delay, refutation of this assigned error:
the carrier shall be liable for damages immediately and proximately resulting
About the only evidence of plaintiffs that may have reference to the manner with
from such neglect of duty. 64 As found by the trial court, the delay in the delivery
which the personnel of defendants treated the two plaintiffs at the San Francisco
of the remains of Crispina Saludo, undeniable and regrettable as it was, cannot
Airport are the following pertinent portions of Maria Saludo's testimony:
be attributed to the fault, negligence or malice of private respondents,65 a
conclusion concurred in by respondent court and which we are not inclined to Q When you arrived there, what did you do, if any?
A I immediately went to the TWA counter and I inquired about whether my
We are further convinced that when TWA opted to ship the remains of Crispina mother was there or if' they knew anything about it.
Saludo on an earlier flight, it did so in the exercise of sound discretion and with
reasonable prudence, as shown by the explanation of its counsel in his letter of Q What was the answer?
February 19, 1977 in response to petitioners' demand letter:
A They said they do not know. So, we waited.
Investigation of TWA's handling of this matter reveals that although the shipment
was scheduled on TWA Flight 131 of October 27, 1976, it was actually boarded Q About what time was that when you reached San Francisco from Chicago?
on TWA Flight 603 of the same day, approximately 10 hours earlier, in order to
A I think 5 o'clock. Somewhere around that in the afternoon.
assure that the shipment would be received in San Francisco in sufficient time
for transfer to PAL. This transfer was effected in San Francisco at 2:00 P.M. on Q You made inquiry it was immediately thereafter?
October 27, 1976. 66
A Right after we got off the plane.
Precisely, private respondent TWA knew of the urgency of the shipment by
reason of this notation on the lower portion of the airway bill: "All documents Q Up to what time did you stay in the airport to wait until the TWA people could
have been certified. Human remains of Cristina (sic) Saludo. Please return bag tell you the whereabouts?
first available flight to SFO." Accordingly, TWA took it upon itself to carry the
remains of Crispina Saludo on an earlier flight, which we emphasize it could do A Sorry, Sir, but the TWA did not tell us anything. We stayed there until about 9
under the terms of the airway bill, to make sure that there would be enough time o'clock. They have not heard anything about it. They did not say anything.
for loading said remains on the transfer flight on board PAL.
Q Do you want to convey to the Court that from 5 up to 9 o'clock in the evening
III. Petitioners challenge the validity of respondent court's finding that private you yourself went back to the TWA and they could not tell you where the
respondents are not liable for tort on account of the humiliating, arrogant and remains of your mother were?
indifferent acts of their officers and personnel. They posit that since their
A Yes sir.
mother's remains were transported ten hours earlier than originally scheduled,
there was no reason for private respondents' personnel to disclaim knowledge of Q And after nine o'clock, what did you do?
the arrival or whereabouts of the same other than their sheer arrogance,
indifference and extreme insensitivity to the feelings of petitioners. Moreover,
A I told my brother my Mom was supposed to be on the Philippine Airlines flight. indifference is not clearly established. The initial answer of the TWA personnel
"Why don't" we check with PAL instead to see if she was there?" We tried to at the counter that they did not know anything about the remains, and later, their
comfort each other. I told him anyway that was a shortest flight from Chicago to answer that they have not heard anything about the remains, and the inability of
California. We will be with our mother on this longer flight. So, we checked with the TWA counter personnel to inform the two plaintiffs of the whereabouts of the
the PAL. remains, cannot be said to be total or complete indifference to the said plaintiffs.
At any rate, it is any rude or discourteous conduct, malfeasance or neglect, the
Q What did you find? use of abusive or insulting language calculated to humiliate and shame
passenger or had faith by or on the part of the employees of the carrier that
A We learned, Yes, my Mom would be on the flight.
gives the passenger an action for damages against the carrier (Zulueta vs. Pan
Q Who was that brother? American World Airways, 43 SCRA 397; Air France vs. Carrascoso, et al., 18
SCRA 155; Lopez, et al. vs. Pan American World Airways, 16 SCRA 431;
A Saturnino Saludo. Northwest Airlines, Inc. vs. Cuenca, 14 SCRA 1063), and none of the above is
obtaining in the instant case. 67
Q And did you find what was your flight from San Francisco to the Philippines?
We stand by respondent court's findings on this point, but only to the extent
A I do not know the number. It was the evening flight of the Philippine Airline(s) where it holds that the manner in which private respondent TWA's employees
from San Francisco to Manila. dealt with petitioners was not grossly humiliating, arrogant or indifferent as
would assume the proportions of malice or bad faith and lay the basis for an
Q You took that flight with your mother?
award of the damages claimed. It must however, be pointed out that the
A We were scheduled to, Sir. lamentable actuations of respondent TWA's employees leave much to be
desired, particularly so in the face of petitioners' grief over the death of their
Q Now, you could not locate the remains of your mother in San Francisco could mother, exacerbated by the tension and anxiety wrought by the impasse and
you tell us what did you feel? confusion over the failure to ascertain over an appreciable period of time what
happened to her remains.
A After we were told that my mother was not there?
Airline companies are hereby sternly admonished that it is their duty not only to
Q After you learned that your mother could not fly with you from Chicago to cursorily instruct but to strictly require their personnel to be more
California? accommodating towards customers, passengers and the general public. After
all, common carriers such as airline companies are in the business of rendering
A Well, I was very upset. Of course, I wanted the confirmation that my mother
public service, which is the primary reason for their enfranchisement and
was in the West Coast. The fliqht was about 5 hours from Chicago to California.
recognition in our law. Because the passengers in a contract of carriage do not
We waited anxiously all that time on the plane. I wanted to be assured about my
contract merely for transportation, they have a right to be treated with kindness,
mother's remains. But there was nothing and we could not get any assurance
respect, courtesy and consideration. 68 A contract to transport passengers is
from anyone about it.
quite different in kind and degree from any other contractual relation, and
Q Your feeling when you reached San Francisco and you could not find out from generates a relation attended with public duty. The operation of a common
the TWA the whereabouts of the remains, what did you feel? carrier is a business affected with public interest and must be directed to serve
the comfort and convenience of passengers. 69 Passengers are human beings
A Something nobody would be able to describe unless he experiences it himself. with human feelings and emotions; they should not be treated as mere numbers
It is a kind of panic. I think it's a feeling you are about to go crazy. It is something or statistics for revenue.
I do not want to live through again. (Inting, t.s.n., Aug. 9, 1983, pp. 14-18).
The records reveal that petitioners, particularly Maria and Saturnino Saludo,
The foregoing does not show any humiliating or arrogant manner with which the agonized for nearly five hours, over the possibility of losing their mother's mortal
personnel of both defendants treated the two plaintiffs. Even their alleged remains, unattended to and without any assurance from the employees of TWA
that they were doing anything about the situation. This is not to say that ALBERTO A. LIM:
petitioners were to be regaled with extra special attention. They were, however,
entitled to the understanding and humane consideration called for by and I called the lead agent on duty at that time and requested for a copy of airway
commensurate with the extraordinary diligence required of common carriers, bill, transfer manifest and other documents concerning the shipment.
and not the cold insensitivity to their predicament. It is hard to believe that the
airline's counter personnel were totally helpless about the situation. Common
sense would and should have dictated that they exert a little extra effort in Then, what?
making a more extensive inquiry, by themselves or through their superiors,
rather than just shrug off the problem with a callous and uncaring remark that ALBERTO A. LIM:
they had no knowledge about it. With all the modern communications equipment
readily available to them, which could have easily facilitated said inquiry and They proceeded to analyze exactly where PAL failed, if any, in forwarding the
which are used as a matter of course by airline companies in their daily human remains of Mrs. Cristina (sic) Saludo. And I found out that there was not
operations, their apathetic stance while not legally reprehensible is morally (sic) delay in shipping the remains of Mrs. Saludo to Manila. Since we received
deplorable. the body from American Airlines on 28 October at 7:45 and we expedited the
shipment so that it could have been loaded on our flight leaving at 9:00 in the
Losing a loved one, especially one's, parent, is a painful experience. Our culture evening or just barely one hour and 15 minutes prior to the departure of the
accords the tenderest human feelings toward and in reverence to the dead. That aircraft. That is so (sic) being the case, I reported to Manila these
the remains of the deceased were subsequently delivered, albeit belatedly, and circumstances. 70
eventually laid in her final resting place is of little consolation. The
imperviousness displayed by the airline's personnel, even for just that fraction of IV. Finally, petitioners insist, as a consequence of the delay in the shipment of
time, was especially condemnable particularly in the hour of bereavement of the their mother's remains allegedly caused by wilful contractual breach, on their
family of Crispina Saludo, intensified by anguish due to the uncertainty of the entitlement to actual, moral and exemplary damages as well as attorney's fees,
whereabouts of their mother's remains. Hence, it is quite apparent that private litigation expenses, and legal interest.
respondents' personnel were remiss in the observance of that genuine human
The uniform decisional tenet in our jurisdiction bolds that moral damages may
concern and professional attentiveness required and expected of them.
be awarded for wilful or fraudulent breach of contract 71 or when such breach is
The foregoing observations, however, do not appear to be applicable or attended by malice or bad faith. 72 However, in the absence of strong and
imputable to respondent PAL or its employees. No attribution of discourtesy or positive evidence of fraud, malice or bad faith, said damages cannot be
indifference has been made against PAL by petitioners and, in fact, petitioner awarded.73 Neither can there be an award of exemplary damages 74 nor of
Maria Saludo testified that it was to PAL that they repaired after failing to receive attorney's fees 75 as an item of damages in the absence of proof that defendant
proper attention from TWA. It was from PAL that they received confirmation that acted with malice, fraud or bad faith.
their mother's remains would be on the same flight to Manila with them.
The censurable conduct of TWA's employees cannot, however, be said to have
We find the following substantiation on this particular episode from the approximated the dimensions of fraud, malice or bad faith. It can be said to be
deposition of Alberto A. Lim, PAL's cargo supervisor earlier adverted to, more of a lethargic reaction produced and engrained in some people by the
regarding their investigation of and the action taken on learning of petitioner's mechanically routine nature of their work and a racial or societal culture which
problem: stultifies what would have been their accustomed human response to a human
need under a former and different ambience.
Nonetheless, the facts show that petitioners' right to be treated with due
Yes. courtesy in accordance with the degree of diligence required by law to be
exercised by every common carrier was violated by TWA and this entitles them,
Mr. Lim, what exactly was your procedure adopted in your so called at least, to nominal damages from TWA alone. Articles 2221 and 2222 of the
investigation? Civil Code make it clear that nominal damages are not intended for
indemnification of loss suffered but for the vindication or recognition of a right
violated of invaded. They are recoverable where some injury has been done but
the amount of which the evidence fails to show, the assessment of damages
being left to the discretion of the court according to the circumstances of the
case.76 In the exercise of our discretion, we find an award of P40,000.00 as
nominal damages in favor of, petitioners to be a reasonable amount under the
circumstances of this case.

WHEREFORE, with the modification that an award of P40,000.00 as and by way

of nominal damages is hereby granted in favor of petitioners to be paid by
respondent Trans World Airlines, the appealed decision is AFFIRMED in all
other respects.
[Nominal, Temperate and Liquidated] in Narita ended on June 22, 1991 when they arrived in Manila on board JL flight
No. 741.
[G.R. No. 118664. August 7, 1998]
Obviously, still reeling from the experience, private respondents, on July 25,
JAPAN AIRLINES, petitioner, vs. THE COURT OF APPEALS ENRIQUE 1991, commenced an action for damages against JAL before the Regional Trial
AGANA, MARIA ANGELA NINA AGANA, ADALIA B. FRANCISCO and JOSE Court of Quezon City, Branch 104.[2] To support their claim, private respondents
MIRANDA, respondents. asserted that JAL failed to live up to its duty to provide care and comfort to its
stranded passengers when it refused to pay for their hotel and accommodation
expenses from June 16 to 21, 1991 at Narita, Japan. In other words, they
ROMERO, J.: insisted that JAL was obligated to shoulder their expenses as long as they were
still stranded in Narita. On the other hand, JAL denied this allegation and
Before us is an appeal by certiorari filed by petitioner Japan Airlines, Inc. (JAL) averred that airline passengers have no vested right to these amenities in case
seeking the reversal of the decision of the Court of Appeals,[1] which affirmed a flight is cancelled due to force majeure.
with modification the award of damages made by the trial court in favor of herein
private respondents Enrique Agana, Maria Angela Nina Agana, Adelia Francisco On June 18, 1992, the trial court rendered its judgment in favor of private
and Jose Miranda. respondents holding JAL liable for damages, viz.:

On June 13, 1991, private respondent Jose Miranda boarded JAL flight No. JL WHEREFORE, judgment is rendered in favor of plaintiffs ordering the defendant
001 in San Francisco, California bound for Manila. Likewise, on the same day Japan Airlines to pay the plaintiffs Enrique Agana, Adalia B. Francisco and
private respondents Enrique Agana, Maria Angela Nina Agana and Adelia Maria Angela Nina Agana the sum of One million Two Hundred forty-six
Francisco left Los Angeles, California for Manila via JAL flight No. JL 061. As an Thousand Nine Hundred Thirty-Six Pesos (P1,246,936.00) and Jose Miranda
incentive for travelling on the said airline, both flights were to make an overnight the sum of Three Hundred Twenty Thousand Six Hundred sixteen and 31/100
stopover at Narita, Japan, at the airlines expense, thereafter proceeding to (P320,616.31) as actual, moral and exemplary damages and pay attorneys fees
Manila the following day. in the amount of Two Hundred Thousand Pesos (P200,000.00), and to pay the
costs of suit.
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 Undaunted, JAL appealed the decision before the Court of Appeals, which,
the final leg of their journey, went to the airport to take their flight to Manila. however, with the exception of lowering the damages awarded affirmed the trial
However, due to the Mt. Pinatubo eruption, unrelenting ashfall blanketed Ninoy courts finding,[3] thus:
Aquino International Airport (NAIA), rendering it inaccessible to airline traffic.
Thus, the award of moral damages should be as it is hereby reduced to
Hence, private respondents trip to Manila was cancelled indefinitely.
P200,000.00 for each of the plaintiffs, the exemplary damages to P300,000.00
To accommodate the needs of its stranded passengers, JAL rebooked all the and the attorneys fees to P100,000.00 plus the costs.
Manila-bound passengers on flight No. 741 due to depart on June 16, 1991 and
WHEREFORE, with the foregoing Modification, the judgment appealed from is
also paid for the hotel expenses for their unexpected overnight stay. On June
hereby AFFIRMED in all other respects.
16, 1991, much to the dismay of the private respondents, their long anticipated
flight to Manila was again cancelled due to NAIAs indefinite closure. At this JAL filed a motion for reconsideration which proved futile and unavailing.[4]
point, JAL informed the private respondents that it would no longer defray their
hotel and accommodation expense during their stay in Narita. Failing in its bid to reconsider the decision, JAL has now filed this instant
Since NAIA was only reopened to airline traffic on June 22, 1991, private
respondents were forced to pay for their accommodations and meal expenses The issue to be resolved is whether JAL, as a common carrier has the obligation
from their personal funds from June 16 to June 21, 1991. Their unexpected stay to shoulder the hotel and meal expenses of its stranded passengers until they
have reached their final destination, even if the delay were caused by force Furthermore, it has been held that airline passengers must take such risks
majeure. incident to the mode of travel.[7] In this regard, adverse weather conditions or
extreme climatic changes are some of the perils involved in air travel, the
To begin with, there is no dispute that the Mt. Pinatubo eruption prevented JAL consequences of which the passenger must assume or expect. After all,
from proceeding to Manila on schedule. Likewise, private respondents concede common carriers are not the insurer of all risks.[8]
that such event can be considered as force majeure since their delayed arrival in
Manila was not imputable to JAL.[5] Paradoxically, the Court of Appeals, despite the presence of force majeure, still
ruled against JAL relying in our decision in PAL v. Court of Appeals,[9] thus:
However, private respondents contend that while JAL cannot be held
responsible for the delayed arrival in Manila, it was nevertheless liable for their The position taken by PAL in this case clearly illustrates its failure to grasp the
living expenses during their unexpected stay in Narita since airlines have the exacting standard required by law. Undisputably, PALs diversion of its flight due
obligation to ensure the comfort and convenience of its passengers. While we to inclement weather was a fortuitous event. Nonetheless, such occurrence did
sympathize with the private respondents plight, we are unable to accept this not terminate PALs contract with its passengers. Being in the business of air
contention. carriage and the sole one to operate in the country, PAL is deemed equipped to
deal with situations as in the case at bar. What we said in one case once again
We are not unmindful of the fact that in a plethora of cases we have consistently must be stressed, i.e., the relation of carrier and passenger continues until the
ruled that a contract to transport passengers is quite different in kind and degree latter has been landed at the port of destination and has left the carriers
from any other contractual relation. It is safe to conclude that it is a relationship premises. Hence, PAL necessarily would still have to exercise extraordinary
imbued with public interest. Failure on the part of the common carrier to live up diligence in safeguarding the comfort, convenience and safety of its stranded
to the exacting standards of care and diligence renders it liable for any damages passengers until they have reached their final destination. On this score, PAL
that may be sustained by its passengers. However, this is not to say that grossly failed considering the then ongoing battle between government forces
common carriers are absolutely responsible for all injuries or damages even if and Muslim rebels in Cotabato City and the fact that the private respondent was
the same were caused by a fortuitous event. To rule otherwise would render the a stranger to the place.
defense of force majeure, as an exception from any liability, illusory and
ineffective. The reliance is misplaced. The factual background of the PAL case is different
from the instant petition. In that case there was indeed a fortuitous event
Accordingly, there is no question that when a party is unable to fulfill his resulting in the diversion of the PAL flight. However, the unforeseen diversion
obligation because of force majeure, the general rule is that he cannot be held was worsened when private respondents (passenger) was left at the airport and
liable for damages for non-performance.[6] Corollarily, when JAL was prevented could not even hitch a ride in a Ford Fiera loaded with PAL personnel,[10] not to
from resuming its flight to Manila due to the effects of Mt. Pinatubo eruption, mention the apparent apathy of the PAL station manager as to the predicament
whatever losses or damages in the form of hotel and meal expenses the of the stranded passengers.[11] In light of these circumstances, we held that if
stranded passengers incurred, cannot be charged to JAL. Yet it is undeniable the fortuitous event was accompanied by neglect and malfeasance by the
that JAL assumed the hotel expenses of respondents for their unexpected carriers employees, an action for damages against the carrier is permissible.
overnight stay on June 15, 1991. Unfortunately, for private respondents, none of these conditions are present in
the instant petition.
Admittedly, to be stranded for almost a week in a foreign land was an
exasperating experience for the private respondents. To be sure, they We are not prepared, however, to completely absolve petitioner JAL from any
underwent distress and anxiety during their unanticipated stay in Narita, but their liability. It must be noted that private respondents bought tickets from the United
predicament was not due to the fault or negligence of JAL but the closure of States with Manila as their final destination. While JAL was no longer required to
NAIA to international flights. Indeed, to hold JAL, in the absence of bad faith or defray private respondents living expenses during their stay in Narita on account
negligence, liable for the amenities of its stranded passengers by reason of a of the fortuitous event, JAL had the duty to make the necessary arrangements to
fortuitous event is too much of a burden to assume. transport private respondents on the first available connecting flight to Manila.
Petitioner JAL reneged on its obligation to look after the comfort and
convenience of its passengers when it declassified private respondents from
transit passengers to new passengers as a result of which private respondents
were obliged to make the necessary arrangements themselves for the next flight
to Manila. Private respondents were placed on the waiting list from June 20 to
June 24. To assure themselves of a seat on an available flight, they were
compelled to stay in the airport the whole day of June 22, 1991 and it was only
at 8:00 p.m. of the aforesaid date that they were advised that they could be
accommodated in said flight which flew at about 9:00 a.m. the next day.

We are not oblivious to the fact that the cancellation of JAL flights to Manila from
June 15 to June 21, 1991 caused considerable 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 affected.
Nevertheless, this does not excuse JAL from its obligation to make the
necessary arrangements to transport private respondents on its first available
flight to Manila. After all, it had a contract to transport private respondents from
the United States to Manila as their final destination.

Consequently, the award of nominal damages is in order. Nominal damages are

adjudicated in order that a right of a plaintiff, which has been violated or invaded
by the defendant, may be vindicated or recognized and not for the purpose of
indemnifying any loss suffered by him.[12] The court may award nominal
damages in every obligation arising from any source enumerated in Article 1157,
or in every case where any property right has been invaded.[13]

WHEREFORE, in view of the foregoing, the decision of the Court of Appeals

dated December 22, 1993 is hereby MODIFIED. The award of actual, moral and
exemplary damages is hereby DELETED. Petitioner JAL is ordered to pay each
of the private respondents nominal damages in the sum of P100,000.00 each
including attorneys fees of P50,000.00 plus costs.
[Nominal, Temperate and Liquidated] All such sums shall bear legal interest, i.e., 6% per annum pursuant to Article
2209 of the Civil Code (Reformina vs. Tomol, 139 SCRA 260) from the date of
[G.R. No. 151783. July 8, 2003] the filing of the complaint until fully paid. Costs against the x x x Northwest
Airlines, Inc.
SAVELLANO, petitioners, vs. NORTHWEST AIRLINES, respondent. [Respondents] counterclaim is ordered dismissed, for lack of merit.[5]


PANGANIBAN, J.: The facts of the case are summarized by the CA as follows:

When, as a result of engine malfunction, a commercial airline is unable to ferry [Petitioner] Victorino Savellano (Savellano) was a Cabugao, Ilocos Sur mayor
its passengers on the original contracted route, it nonetheless has the duty of for many terms, former Chairman of the Commission on Elections and Regional
fulfilling its responsibility of carrying them to their contracted destination on the Trial Court (RTC) judge. His wife, [Petitioner] Virginia is a businesswoman and
most convenient route possible. Failing in this, it cannot just unilaterally shuttle operates several rural banks in Ilocos Sur. The couples x x x son [Petitioner]
them, without their consent, to other routes or stopping places outside of the Deogracias was, at the time [of] the incident subject of the case, the Vice-
contracted sectors. However, moral damages cannot be awarded without proof Governor of Ilocos Sur.
of the carriers bad faith, ill will, malice or wanton conduct. Neither will actual
damages be granted in the absence of convincing and timely proof of loss. But On October 27, 1991, at around 1:45 p.m., [petitioners] departed from San
nominal damages may be allowed under the circumstances in the case herein. Francisco, USA on board Northwest Airlines (NW) Flight 27, Business Class,
bound for Manila, Philippines using the NW round-trip tickets which were issued
The Case at [respondents] Manila ticketing office.

Before the Court is a Petition for Review under Rule 45 of the Rules of Court, [Petitioners] were expected to arrive at the Ninoy Aquino International Airport
seeking to set aside the June 29, 2001 Decision[1] of the Court of Appeals[2] (CA) (NAIA), Manila on October 29, 1991 (Manila time) or after twelve (12) hours of
in CA-GR CV No. 47165. The dispositive part of the Decision reads: travel.

WHEREFORE, the judgment of July 29, 1994 is hereby REVERSED and SET After being airborne for approximately two and one-half (2) hours or at about
ASIDE and another rendered DISMISSING [petitioners] Complaint. No 4:15 p.m. of the same day, October 27, 1991 (Seattle, USA time), NW Flight 27s
pronouncement as to costs. [3] pilot made an emergency landing in Seattle after announcing that a fire had
started in one of the planes engines.
On the other hand, the dispositive portion of the Regional Trial Court (RTC)
Decision[4] that was reversed by the CA disposed thus: [Petitioners] and the other passengers proceeded to Gate 8 of the Seattle
Airport where they were instructed to go home to Manila the next day, using the
WHEREFORE, premises considered, decision is hereby rendered in favor of the
same boarding passes with the same seating arrangements
plaintiffs and against the defendant, sentencing the latter to pay to the former,
the following amounts: [Respondents] shuttle bus thereafter brought all passengers to the Seattle Red
Lion Hotel where they were billeted by, and at the expense of [respondent].
1. P500,000.00 as actual damages;
[Petitioners] who were traveling as a family were assigned one room at the
2. P3,000,000.00 as moral damages;
hotel. At around 12:00 midnight, they were awakened by a phone call from
3. P500,000.00 as exemplary damages; and [respondents] personnel who advised them to be at the Seattle Airport by 7:00
a.m. (Seattle time) the following day, October 28, 1991, for departure. To reach
4. P500,000.00 as attorneys fees; the airport on time, the NW shuttle bus fetched them early, making them skip the
6:30 a.m. hotel breakfast.
Prior to leaving the hotel, however, [petitioners] met at the lobby Col. Roberto By letter of November 22, 1991, [petitioners] through counsel demanded from
Delfin, a Filipino co-passenger who was also traveling Business Class, who [respondent] the amount of P3,000,000.00 as damages for what they claimed to
informed them that he and some passengers were leaving the next day, October be the humiliation and inconvenience they suffered in the hands of its personnel.
29, 1991, on board the same plane with the same itinerary. [Respondent] did not accede to the demand, however, impelling [petitioners] to
file a case for damages at the RTC of Cabugao, Ilocos Sur subject of the
On account of the engine failure of the plane, [petitioner] Virginia developed present appeal.
nervousness. On getting wind of information that they were bumped off, she
took valium to calm her nerves and cough syrup for the fever and colds she had [Petitioners] concede that they were not downgraded in any of the flights on their
developed during the trip. way home to Manila. Their only complaint is that they suffered inconvenience,
embarrassment, and humiliation for taking a longer route.
When [petitioners] reached the Seattle Airport, [respondents] ground stewardess
belatedly advised them that instead of flying to Manila they would have to board During the trial, the [RTC], on motion of [petitioners], issued on October 29,
NW Flight 94, a DC-10 plane, bound for a 3-hour flight to Los Angeles for a 1993 a subpoena duces tecum directing [respondent] to submit the passengers
connecting flight to Manila. When [Petitioner] Savellano insisted theirs was a manifest of the distressed flight from San Francisco to Tokyo on October 27,
direct flight to Manila, the female ground stewardess just told them to hurry up 1991, the passengers manifest of the same distressed plane from Seattle to
as they were the last passengers to board. Tokyo which took off on October 29, 1991, and the passenger manifest of the
substitute plane from Seattle to Los Angeles and Los Angeles to Seoul enroute
In Los Angeles, [petitioners] and the other passengers became confused for to Manila which took off on October 28, 1991.
while there was a sort of a board which announced a Seoul-Bangkok flight, none
was posted for a Manila flight. It was only after they complained to the NW The subpoena duces tecum was served on December 1, 1993 but was not
personnel that the latter finally changed the board to include Manila. complied with, however, by [respondent], it proffering that its Minneapolis head
office retains documents only for one year after which they are destroyed.
Before boarding NW Flight 23 for Manila via Seoul, [petitioners] encountered
another problem. Their three small handcarried items which were not padlocked x x x Branch 24 of the RTC of Cabugao, Ilocos Sur rendered judgment in favor
as they were merely closed by zippers were not allowed to be placed inside the of [petitioners] x x x.
passengers baggage compartments of the plane by an arrogant NW ground
stewardess. In granting moral and actual damages to [petitioners], the [RTC] credited
[petitioners] claim that they were excluded form the Seattle-Tokyo-Manila flight
On [petitioners] arrival at the NAIA, Manila where they saw Col. Delfin and his to accommodate several Japanese passengers bound for Japan. And as basis
wife as well as the other passengers of the distressed flight who unlike them of its award of actual damages arising from the allegedly lost articles contained
[petitioners] who left Seattle on October 28, 1991, left Seattle on October 29, in the would-have-been handcarried [luggage], the [RTC], passing on the lack of
1991, they were teased for taking the longer and tiresome route to the receipts covering the same, took judicial notice of the Filipinos practice of often
Philippines. bringing home pasalubong for friends and relatives.[6]

When [petitioners] claimed their luggage at the baggage carousel, they Ruling of the Court of Appeals
discovered that the would-have-been handcarried items which were not allowed
to be placed inside the passengers baggage compartment had been ransacked The CA ruled that petitioners had failed to show respondents bad faith,
and the contents thereof stolen. Virginia was later to claim having lost her negligence or malice in transporting them via the Seattle-Los Angeles-Seoul-
diamond earrings costing P300,000.00, two (2) Perry Gan shoes worth US$ Manila route. Hence, it held that there was no basis for the RTCs award of moral
250.00, four (4) watches costing US$ 40.00 each, two (2) pieces of Tag Heuer and exemplary damages. Neither did it find any reason to grant attorneys fees.
watch and three (3) boxes of Elizabeth Arden [perfumes]. Deogracias, on the
It further ruled:
other hand, claimed to have lost two (2) pairs of Cole Haan shoes which he
bought for his wife, and the clothes, camera, personal computer, and jeans he [Petitioners] testimonial claim of losses is unsupported by any other evidence at
bought for his children. all. It is odd and even contrary to human experience for [petitioner] Virginia not
to have taken out a P300,000.00 pair of diamond earrings from an unlocked [c]arrier may without notice substitute alternate carriers or aircraft, and may alter
small luggage after such luggage was not allowed to be placed inside the or omit stopping places shown on the ticket in case of necessity. x x x. [11]
passengers baggage compartment, given the ease with which it could have
been done as the small luggage was merely closed by zipper. Just as it is odd The basis of the Complaint was the way respondent allegedly treated petitioners
why no receipts for alleged purchases for valuable pasalubongs including Tag like puppets that could be shuttled to Manila via Los Angeles and Seoul without
Huer watches, camera and personal computer were presented. x x x.[7] their consent.[12] Undeniably, it did not take the time to explain how it would be
meeting its contractual obligation to transport them to their final destination. Its
Thus, even the trial courts award of actual damages was reversed by the employees merely hustled the confused petitioners into boarding one plane after
appellate court. another without giving the latter a choice from other courses of action that were
available. It unilaterally decided on the most expedient way for them to reach
Hence this Petition.[8] their final destination.

Issues Passengers Consent

In their appeal, petitioners ask this Court to rule on these issues: After an examination of the conditions printed on the airline ticket, we find
nothing there authorizing Northwest to decide unilaterally, after the distressed
x x x [W]hether or not petitioners discriminatory bump-off from NW Flight No.
flight landed in Seattle, what other stopping places petitioners should take and
0027 on 28 October 1991 (not the diversion of the distressed plane to Seattle
when they should fly. True, Condition 9 on the ticket allowed respondent to
the day before, i.e. NW Flight 27 on 27 October 1991) constitutes breach by
substitute alternate carriers or aircraft without notice. However, nothing there
respondent airline of its air-carriage contract?
permits shuttling passengers -- without so much as a by your-leave -- to
And if so, whether or not petitioners are entitled to actual, moral and exemplary stopping places that they have not been previously notified of, much less agreed
damages -- including attorneys fees -- as a consequence?[9] to or been prepared for. Substituting aircrafts or carriers without notice is entirely
different from changing stopping places or connecting cities without notice.
The Courts Ruling
The ambiguities in the contract, being one of adhesion, should be construed
The Petition is partly meritorious. against the party that caused its preparation -- in this case, respondent.[13] Since
the conditions enumerated on the ticket do not specifically allow it to change
First Issue: stopping places or to fly the passengers to alternate connecting cities without
consulting them, then it must be construed to mean that such unilateral change
Breach of Contract
was not permitted.
Petitioners contract of carriage with Northwest was for the San Francisco-
Proof of Necessity of Alteration
Tokyo(Narita)-Manila flights scheduled for October 27, 1991. This itinerary was
not followed when the aircraft used for the first segment of the journey Furthermore, the change in petitioners flight itinerary does not fall under the
developed engine trouble. Petitioners stress that they are questioning, not the situation covered by the phrase may alter or omit stopping places shown on the
cancellation of the original itinerary, but its substitution, which they allegedly had ticket in case of necessity.[14] A case of necessity must first be proven. The
not contracted for or agreed to. They insist that, like the other passengers of the burden of proving it necessarily fell on respondent. This responsibility it failed to
distressed flight, they had the right to be placed on Flight 27, which had a discharge.
connecting flight from Japan to Manila. They add that in being treated differently
and shabbily, they were being discriminated against. Petitioners do not question the stop in Seattle, so we will not delve into this
matter. The airplane engine trouble that developed during the flight bound for
A contract is the law between the parties.[10] Thus, in determining whether Tokyo from San Francisco definitely merited the necessity of landing the plane
petitioners rights were violated, we must look into its provisions, which are at some place for repair -- in this case, Seattle -- but not that of shuttling
printed on the airline ticket. Condition 9 in the agreement states that a x x x petitioners to other connecting points thereafter without their consent.
Northwest failed to show a case of necessity for changing the stopping place none and hence deleted the award of damages. Thus, the Court is now
from Tokyo to Los Angeles and Seoul. It is a fact that some of the passengers behooved to review the basis for sustaining the award or deletion of damages.
on the distressed flight continued on to the Tokyo (Narita) connecting place. No
explanation whatsoever was given to petitioners as to why they were not Petitioners impute oppression, discrimination, recklessness and malevolence to
similarly allowed to do so. It may be that the Northwest connecting flight from respondent. We are not convinced. There is no persuasive evidence that they
Seattle to Tokyo to Manila could no longer accommodate them. Yet it may also were maliciously singled out to fly the Seattle-Los Angeles-Seoul-Manila route. It
be that there were other carriers that could have accommodated them for these appears that the passengers of the distressed flight were randomly divided into
sectors of their journey, and whose route they might have preferred to the more two groups. One group was made to take the Tokyo-Manila flight; and the other,
circuitous one unilaterally chosen for them by respondent. the Los Angeles-Seoul-Manila flight. The selection of who was to take which
flight was handled via the computer reservation system, which took into account
In the absence of evidence as to the actual situation, the Court is hard pressed only the passengers final destination.[17]
to determine if there was a case of necessity sanctioning the alteration of the
Tokyo stopping place in the case of petitioners. Thus, we hold that in the The records show that respondent was impelled by sincere motives to get
absence of a demonstrated necessity thereof and their rerouting to Los Angeles petitioners to their final destination by whatever was the most expeditious course
and Seoul as stopping places without their consent, respondent committed a -- in its judgment, if not in theirs. Though they claim that they were not
breach of the contract of carriage. accommodated on Flight 27 from Seattle to Tokyo because respondent had
taken on Japanese passengers, petitioners failed to present convincing
Second Issue: evidence to back this allegation. In the absence of convincing evidence, we
cannot find respondent guilty of bad faith.
Lopez, Zulueta and Ortigas
Being guilty of a breach of their contract, respondent may be held liable for
damages suffered by petitioners in accordance with Articles 1170 and 2201 of Rulings Not Applicable
the Civil Code, which state:
Petitioners cite the cases of Lopez v. Pan American World Airways,[18] Zulueta v.
Art. 1170. Those who in the performance of their obligations are guilty of fraud, Pan American World Airways, Inc.[19] and Ortigas Jr. v. Lufthansa German
negligence, or delay and those who in any manner contravene the tenor Airlines[20] to support their claim for moral and exemplary damages.
thereof are liable for damages. (Emphasis supplied)
In Lopez, Honorable Fernando Lopez, then an incumbent senator and former
Art. 2201. In contracts and quasi-contracts, the damages for which the obligor Vice President of the Philippines -- together with his wife, his daughter and his
who acted in good faith is liable shall be those that are the natural and probable son-in-law -- made first-class reservations with the Pan American World Airways
consequences of the breach of the obligation, and which the parties have on its Tokyo-San Francisco flight. The reservation having been confirmed, first-
foreseen or could have reasonably foreseen at the time the obligation was class tickets were subsequently issued in their favor. Mistakenly, however,
constituted. defendants agent cancelled the reservation. But expecting other cancellations
before the flight scheduled a month later, the reservations supervisor decided to
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be withhold the information from them, with the result that upon arrival in Tokyo, the
responsible for all damages which may be reasonably attributed to the non- Lopezes discovered they had no first-class accommodations. Thus, they were
performance of the obligation. compelled to take the tourist class, just so the senator could be on time for his
pressing engagements in the United States.
As a general rule, the factual findings of the CA when supported by substantial
evidence on record are final and conclusive and may not be reviewed on In the light of these facts, the Court held there was a breach of the contract of
appeal.[15] An exception to this rule is when the lower court and the CA arrive at carriage. The failure of the defendant to inform the plaintiffs on time that their
different factual findings.[16] In this case, the trial court found the presence of bad reservations for the first class had long been cancelled was considered as the
faith and hence awarded moral and exemplary damages; while the CA found element of bad faith entitling them to moral damages for the contractual breach.
According to the Court, such omission had placed them in a predicament that These cases are different from and inapplicable to the present case. Here, there
enabled the company to keep them as their passengers in the tourist class. is no showing that the breach of contract was done with the same
Thus, the defendant was able to retain the business and to promote its self- entrepreneurial motive or self-interest as in Lopez or with ill will as in Zulueta
interest at the expense of embarrassment, discomfort and humiliation on their and Ortigas. Petitioners have failed to show convincingly that they were rerouted
part. by respondent to Los Angeles and Seoul because of malice, profit motive or
self-interest. Good faith is presumed, while bad faith is a matter of fact that
In Zulueta, the passenger was coming home to Manila from Honolulu via a Pan- needs to be proved[21] by the party alleging it.
American flight. The plane had a stopover at Wake Island, where Rafael Zulueta
went down to relieve himself. At flight time, he could not be located immediately. In the absence of bad faith, ill will, malice or wanton conduct, respondent cannot
Upon being found, an altercation ensued between him and the Pan-Am be held liable for moral damages. Article 2219 of the Civil Code[22] enumerates
employees. One of them remonstrated: What in the hell do you think you are? the instances in which moral damages may be awarded. In a breach of contract,
Get on that plane. An exchange of angry words followed, and the pilot went to such damages are not awarded if the defendant is not shown to have acted
the extent of referring to the Zuluetas as those monkeys. Subsequently, for his fraudulently or with malice or bad faith.[23] Insufficient to warrant the award of
belligerent attitude, Rafael Zulueta was intentionally off-loaded and left at Wake moral damages is the fact that complainants suffered economic hardship, or that
Island with the prospect of being stranded there for a week, with malice they worried and experienced mental anxiety.[24]
aforethought. The Court awarded to the Zuluetas P500,000.00 as moral
damages, P200,000.00 as exemplary damages and P75,000.00 as attorneys Neither are exemplary damages proper in the present case. The Civil Code
fees, apart from the actual damages of P5,502.85. provides that [i]n contracts and quasi-contracts, the court may award exemplary
damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or
In Ortigas, Francisco Ortigas Jr. had a confirmed and validated first-class ticket malevolent manner.[25] Respondent has not been proven to have acted in that
for Lufthansas Flight No. 646. His reserved first-class seat was, however, given manner. At most, it can only be found guilty of having acted without first
to a Belgian. As a result, he was forced to take economy class on the same considering and weighing all other possible courses of actions it could have
flight. Lufthansa succeeded in keeping him as a passenger by assuring him that taken, and without consulting petitioners and securing their consent to the new
he would be given first-class accommodation at the next stop. The proper stopping places.
arrangements therefor had supposedly been made already, when in truth such
was not the case. In justifying the award of moral and exemplary damages, the The unexpected and sudden requirement of having to arrange the connecting
Court explained: flights of every single person in the distressed plane in just a few hours, in
addition to the Northwest employees normal workload, was difficult to satisfy
x x x [W]hen it comes to contracts of common carriage, inattention and lack of perfectly. We cannot find respondent liable for exemplary damages for its
care on the part of the carrier resulting in the failure of the passenger to be imperfection of neglecting to consult with the passengers beforehand.
accommodated in the class contracted for amounts to bad faith or fraud which
entitles the passenger to the award of moral damages in accordance with Article Nevertheless, herein petitioners will not be totally deprived of compensation.
2220 of the Civil Code. But in the instant case, the breach appears to be of Nominal damages may be awarded as provided by the Civil Code, from which
graver nature, since the preference given to the Belgian passenger over plaintiff we quote:
was done willfully and in wanton disregard of plaintiffs rights and his dignity as a
Art. 2221. Nominal damages are adjudicated in order that a right of the plaintiff,
human being and as a Filipino, who may not be discriminated against with
which has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss
To summarize, in Lopez, despite sufficient time -- one month -- to inform the suffered by him.
passengers of what had happened to their booking, the airline agent
Art. 2222. The court may award nominal damages in every obligation arising
intentionally withheld that information from them. In Zulueta, the passenger was
from any source enumerated in article 1157, or in every case where any
deliberately off-loaded after being gravely insulted during an altercation. And in
property right has been invaded.
Ortigas, the passenger was intentionally downgraded in favor of a European.
Nominal damages are recoverable if no actual, substantial or specific damages days from the date of receipt in the case of luggage and seven days from date of
were shown to have resulted from the breach.[26] The amount of such damages receipt in the case of goods. In the case of delay the complaint must be made at
is addressed to the sound discretion of the court, taking into account the the latest within fourteen days from the date on which the luggage or goods
relevant circumstances.[27] have been placed at his disposal.

In the present case, we must consider that petitioners suffered the 3. Every complaint must be made in writing upon the document of carriage
inconveniences of having to wake up early after a bad night and having to miss or by separate notice in writing dispatched within the times aforesaid.
breakfast; as well as the fact that they were business class passengers. They
paid more for better service; thus, rushing them and making them miss their 4. Failing complaint within the times aforesaid, no action shall lie against
small comforts was not a trivial thing. We also consider their social and official the carrier, save in the case of fraud on his part.
status. Victorino Savellano was a former mayor, regional trial court judge and
After allegedly finding that their luggage had been ransacked, petitioners never
chairman of the Commission on Elections. Virginia B. Savellano was the
lodged a complaint with any Northwest airport personnel. Neither did they
president of five rural banks, and Deogracias Savellano was then the incumbent
mention the alleged loss of their valuables in their November 22, 1991 demand
vice governor of Ilocos Sur. Hence, it will be proper to grant one hundred fifty
letter.[31] Hence, in accordance with the parties contract of carriage, no claim can
thousand pesos (P150,000) as nominal damages[28] to each of them, in order to
be heard or admitted against respondent with respect to alleged damage to or
vindicate and recognize their right[29] to be notified and consulted before their
loss of petitioners baggage.
contracted stopping place was changed.
WHEREFORE, the Petition is hereby PARTIALLY GRANTED, and the assailed
A claim for the alleged lost items from the baggage of petitioners cannot
Decision MODIFIED. Respondent is ORDERED to pay one hundred fifty
prosper, because they failed to give timely notice of the loss to respondent. The
thousand pesos (P150,000) to each of the three petitioners as nominal
Conditions printed on the airline ticket plainly read:
damages. No pronouncement as to costs.
2. Carriage hereunder is subject to the rules and limitations relating to
liability established by the Warsaw Convention unless such carriage is not
International carriage as defined by that Convention.

xxx xxx xxx

7. Checked baggage will be delivered to bearer of the baggage check. In

case of damage to baggage moving in international transportation complaint
must be made in writing to carrier forthwith after discovery of damage, and at the
latest, within 7 days from receipt; in case of delay, complaint must be made
within 21 days from date the baggage was delivered. x x x.[30]

The pertinent provisions of the Rules Relating to International Carriage by Air

(Warsaw Convention) state:

Article 26

1. Receipt by the person entitled to delivery of luggage or goods without

complaint is prima facie evidence that the same have been delivered in good
condition and in accordance with the document of carriage.

2. In case of damage, the person entitled to delivery must complain to the

carrier forthwith after the discovery of the damage, and, at the latest, within three