TRANSPORTATION LAW | ATTY.
CAPANAS | COMPILATION OF CASE DIGESTS – PART 5 (AVIATION LAW)
AVIATION LAW
INTERNATIONAL AIR TRANSPORTION
DEFINITION OF INTERNATIONAL CARRIAGE OR INTERNATIONAL TRANSPORTATION
1. MAPA, ET AL vs. CA, ET AL
A contract is one of international transportation only if according to the contract made by
the parties, the place of departure and the place of destination, whether or not there be a
break in the transportation or a transshipment, are situated either within the territories of
two High Contracting Parties, or within the territory of a single High Contracting Party, if
there is an agreed stopping place within a territory subject to the sovereignty, mandate or
authority of another power, even though that power is not a party to this convention.
FACTS:
Plaintiffs Cornelio Mapa and Purita Mapa entered into contract of air transportation with
defendant TWA as evidenced by TWA tickets. Said TWA tickets are for Los Angeles-New York-
Boston-St. Louis-Chicago.
The domicile of carrier TWA is Kansas City, Missouri, USA. Its principal place of business is
Kansas City, Missouri, USA. TWA's place of business through which the contracts were made
is Bangkok, Thailand. The place of destination is Chicago, USA.
On August 10, 1990, plaintiffs Carmina (daughter of Cornelio and Purita) and Purita left
Manila on board a PAL flight for Los Angeles. Carmina was to commence schooling and thus
was accompanied by Purita to assist her in settling down at the University.
They arrived Los Angeles on the same date and stayed there until August 14, 1990 when they
left for New York City on a TWA flight. On August 27, 1990, plaintiffs Purita and Carmina S.
Mapa departed for Boston, checking in seven (7) pieces of luggage at the TWA counter in the
JFK Airport. They were issued receipts for the said baggage.
Upon arriving in Boston, plaintiffs Purita and Carmina proceeded to the carousel to claim
their baggages and found only three out of the seven they checked in. Plaintiffs immediately
reported the loss of their four baggages to the TWA Baggage Office at Logan Airport. TWA's
representative confidently assured them that their baggages would be located within 24
hours and not more than 48 hours.
They were requested to accomplish a passenger property questionnaire to facilitate a further
intensive and computerized search for the lost luggage, which they duly accomplished. The
total value of the lost items amounted to $11,283.79.
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Two months later, TWA offered to amicably settle the case by giving plaintiffs-appellants two
options: (a) transportation credit for future TWA travel or (b) cash settlement. Five months
lapsed without any result on TWA's intensive search.
Plaintiffs-appellant opted for transportation credit for future TWA travel. TWA disregarded
plaintiffs' option and unilaterally declared the payment of $2,560.00 as constituting full
satisfaction of the plaintiffs' claim. Plaintiffs accepted the check for $2,560.00, as partial
payment for the actual cost of their lost baggages and their contents.
Despite demands by plaintiffs, TWA failed and refused without just cause to indemnify and
redress plaintiffs for the grave injury and damages they have suffered.
Petitioners then filed a complaint for damages and complaint for breach of contract of
carriage against TWA in the RTC.
Regional Trial Court:
The trial court dismissed the case for lack of jurisdiction in light of Article 28(1) of the
Warsaw Convention.
Court of Appeals:
The CA affirmed the order of the trial court. It held that the Warsaw Convention is the law
which governs the dispute between the petitioners and TWA because what is involved is
international transportation defined by said Convention in Article I(2). This holding is
founded on its determination that the two TWA tickets for Los Angeles-New York-Boston-St.
Louis-Chicago purchased in Bangkok, Thailand, were issued in conjunction with, and
therefore formed part of, the contract of transportation performed from Manila, Philippines,
to the United States.
The respondent court further held that the cause of action of the petitioners arose from the
loss of the four checked pieces of baggage, which then falls under Article 18(1), Chapter III
(Liability of the Carrier) of the Warsaw Conventions. Pursuant to Article 24(1) of the
Convention, all actions for damages, whether based on tort, code law or common law, arising
from loss of baggage under Article 18 of the Warsaw Convention, can only be brought
subject to the conditions and limits set forth in the Warsaw Convention. Article 28(1) thereof
sets forth conditions and limits in that the action for damages may be instituted only in the
territory of one of the High Contracting Parties, before the court of (1) the domicile of the
carrier, (2) the carrier's principal place of business, (3) the place of business through which
the contract has been made, or (4) the place of destination. Since the Philippines is not one
of these places, a Philippine Court, like the RTC, has no jurisdiction over the complaint for
damages.
ISSUE:
Whether the Warsaw Convention is applicable to this case
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RULING:
NO. The Warsaw Convention is not applicable because the carriage or transportation was not
international in character. The RTC is directed to proceed with pre-trial.
It appears clear to us that TWA itself, the trial court, and the Court of Appeals impliedly admit
that if the sole basis were the two TWA tickets for Los Angeles-New York-Boston-St. Louis-
Chicago, the contracts cannot be brought within the term "international transportation," as
defined in Article I(2) of the Warsaw Convention.
As provided therein, a contract is one of international transportation only if according to the
contract made by the parties, the place of departure and the place of destination, whether or
not there be a break in the transportation or a transshipment, are situated either within the
territories of two High Contracting Parties, or within the territory of a single High Contracting
Party, if there is an agreed stopping place within a territory subject to the sovereignty,
mandate or authority of another power, even though that power is not a party to this
convention.
There are then two categories of international transportation, (1) that where the place of
departure and the place of destination are situated within the territories of two High
Contracting Parties regardless of whether or not there be a break in the transportation or a
transshipment; and (2) that where the place of departure and the place of destination are
within the territory of a single High Contracting Party if there is an agreed stopping place
within a territory subject to the sovereignty, mandate, or authority of another power, even
though the power is not a party of the Convention.
The contracts of transportation in this case are evidenced by the two TWA tickets, both
purchased and issued in Bangkok, Thailand. On the basis alone of the provisions therein, it is
obvious that the place of departure and the place of destination are all in the territory of the
United States, or of a single High Contracting Party. The contracts, therefore, cannot come
within the purview of the first category of international transportation. Neither can it be
under the second category since there was NO agreed stopping place within a territory
subject to the sovereignty, mandate, or authority of another power.
NOTICE OF LIABILITY; CONTRACT OF ADHESION
2. PAN AMERICAN WORLD AIRWAYS INC. vs. RAPADAS, ET AL
Art. 22(4) of the Warsaw Convention does not preclude an award of attorney’s fees. That
provision states that the limits of liability prescribed in the instrument shall not prevent the
court from awarding in accordance with its own law, in addition, the whole or part of the
court costs and other expenses of litigation incurred by the plaintiff
FACTS:
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Private respondent Jose Rapadas held passenger ticket and baggage claim check for
petitioner’s flight No. 841 with the route from Guam to Manila. While standing inline to
board the flight at the Guam Airport, Rapadas was ordered by petitioner’s hand carry control
agent to check-in his samsonite attaché case. Rapadas protested pointing to the fact that
other co-pasengers were permitted to hand carry baggage. He stepped out of the line only to
go back again at the end of it to try of he can get through without having to register his
attaché case. However, the same man in charge of had carry control did not fail to notice him
and ordered him again to register his baggage. Upon arriving in Manila on the same day,
Rapadas claimed and was given all his checked in baggage except the attaché case.
ISSUE:
Whether or not a passenger is bound by the terms of a passenger under the Warsaw
convention, shall apply in case of loss, damage or destruction to a registered luggage of a
passenger
RULING:
YES. After a review of the various arguments of the appointing parties, the court found
sufficient basis under the particular facts of the case for the availment of the liability
limitations under the Warsaw Convention. There is no dispute and the courts below admit
that there was such a notice appearing on page 2 of the airline ticket stating that the Warsaw
Convention governs in case of death or injury of passengers or of loss, damage or destruction
to a passenger’s luggage. Art. 22(4) of the Warsaw Convention does not preclude an award of
attorney’s fees. That provision states that the limits of liability prescribed in the instrument
shall not prevent the court from awarding in accordance with its own law, in addition, the
whole or part of the court costs and other expenses of litigation incurred by the plaintiff.
CARRIAGE TO BE PERFORMED BY SUCCESSIVE CARRIERS
3. KLM ROYAL DUTCH AIRLINES vs. CA, ET AL
ART. 30 of the Warsaw Convention:
(1) In the case of transportation to be performed by various successive carriers and failing
within the definition set out in the third paragraph of Article I, each carrier who accepts
passengers, baggage, or goods shall be subject to the rules set out in the convention,
and shall be deemed to be one of the contracting parties to the contract of
transportation insofar as the contract deals with that part of transportation which is
performed under his supervision.
(2) In the case of transportation of this nature, the passenger or his representative can take
action only against the carrier who performed the transportation during which the
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accident or the delay occured, save in the case where, by express agreement, the first
carrier has assumed liability for the whole journey.
FACTS:
Spouses Mendoza approached Mr. Reyes, the branch manager of Philippine Travel Bureau,
for consultation about a world tour which they were intending to make with their daughter
and niece. Three segments of the trip, the longest, was via KLM. Respondents decided that
one of the routes they will take was a Barcelona-Lourdes route with knowledge that only one
airline, Aer Lingus, served it. Reyes made the necessary reservations. To this, KLM secured
seat reservations for the Mendoza’s and their companions from the carriers which would
ferry them throughout their trip, which the exception of Aer Lingus. When the Mendoza’s left
the Philippines, they were issued KLM tickets for the entire trip. However, their coupon for
Aer Lingus was marked “on request”.
When they were in Germany, they went to the KLM office and obtained a confirmation from
Aer Lingus. At the airport in Barcelona, the Mendozas and their companions checked in for
their flight to Lourdes. However, although their daughter and niece were allowed to take the
flight, the spouses Mendozas were off loaded on orders of the Aer Lingus manager, who
brusquely shoved them aside and shouted at them. So the spouses Mendozas took a train
ride to Lourdes instead.
Thus, they filed a complaint for damages against KLM for breach of contract of carriage. The
trial court decided in favor of the Mendozas. On appeal, the CA affirmed the decision. Hence,
KLM brings this petition to the Supreme Court. KLM cites Art 30 of the Warsaw Convention,
which states: the passenger or his representatives can take action only against the carrier
who performed the transportation during which the accident or delay occurred. Also, KLM
avers that the front cover of each ticket reads: that liability of the carrier for damages shall
be limited to occurrences on its own line.
ISSUE:
Whether or not KLM should be held liable for damage
RULING:
YES. The argument that the KLM should not be held accountable for the tortious conduct of
Aer Lingus because of the provision printed on the respondents' tickets expressly limiting the
KLM's liability for damages only to occurrences on its own lines is unacceptable. As noted by
the Court of Appeals that condition was printed in letters so small that one would have to
use a magnifying glass to read the words. Under the circumstances, it would be unfair and
inequitable to charge the respondents with automatic knowledge or notice of the said
condition so as to preclude any doubt that it was fairly and freely agreed upon by the
respondents when they accepted the passage tickets issued to them by the KLM.
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As maintained by the respondents and the Court of Appeals, the passage tickets of the
respondents provide that the carriage to be performed thereunder by several successive
carriers "is to be regarded as a single operation," which is diametrically incompatible with the
theory of the KLM that the respondents entered into a series of independent contracts with
the carriers which took them on the various segments of their trip. This position of KLM we
reject. The respondents dealt exclusively with the KLM which issued them tickets for their
entire trip and which in effect guaranteed to them that they would have sure space in Aer
Lingus flight 861. The respondents, under that assurance of the internationally prestigious
KLM, naturally had the right to expect that their tickets would be honored by Aer Lingus to
which, in the legal sense, the KLM had indorsed and in effect guaranteed the performance of
its principal engagement to carry out the respondents' scheduled itinerary previously and
mutually agreed upon between the parties
4. LUFTHANSA GERMAN AIRLINES vs. CA, ET AL
FACTS:
Tirso V. Antiporda, Sr. was an associate director of the Central Bank of the Philippines and a
registered consultant of the Asian Development Bank, the World Bank and the UNDP. He
was, contracted by SGV to be the institutional financial specialist for the agricultural credit
institution project of the Investment and Development Bank of Malawi in Africa. For the
engagement, Antiporda would be provided one round-trip economy ticket from Manila to
Blantyre and back with a maximum travel time of four days per round-trip and, in addition, a
travel allowance of $50 per day, a travel insurance coverage of P100,000 and major
hospitalization with AFIA and an accident insurance coverage of P150,000. On September 17,
1984, Lufthansa, through SGV, issued ticket for Antiporda's confirmed flights to Malawi,
Africa.
Antiporda took the Lufthansa flight to Singapore from where he proceeded to Bombay on
board the same airline. He arrived in Bombay as scheduled and waited at the transit area of
the airport for his connecting flight to Nairobi which was, per schedule given him by
Lufthansa, to leave Bombay.
Finding no representative of Lufthansa waiting for him at the gate, Antiporda asked the duty
officer of Air India how he could get in touch with Lufthansa. He was told to call up Lufthansa
which informed him that somebody would attend to him shortly. Ten minutes later, Gerard
Matias, Lufthansa's traffic officer, arrived, asked for Antiporda's ticket and told him to just sit
down and wait. Matias returned with one Leslie Benent, duty officer of Lufthansa, who
informed Antiporda that his seat in Air Kenya Flight 203 to Nairobi had been given to a very
important person of Bombay who was attending a religious function in Nairobi. Antiporda
protested, stressing that he had an important professional engagement in Blantyre, Malawi.
He requested that the situation be remedied but Air Kenya Flight 203 left for Nairobi without
him on board. Stranded in Bombay, Antiporda was booked for Nairobi via Addis Ababa only
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on September 27, 1984. He finally arrived in Blantyre at 9:00 o'clock in the evening of
September 28, 1984, more than a couple of days late for his appointment with people from
the institution he was to work with in Malawi.
Antiporda's counsel wrote the general manager of Lufthansa in Manila demanding
P1,000,000 in damages for the airline's "malicious, wanton, disregard of the contract of
carriage." In reply, Lufthansa general manager Hagen Keilich assured Antiporda that the
matter would be investigated.
Apparently getting no positive action from Lufthansa, Antiporda filed with the RTC a
complaint against Lufthansa.
ISSUE:
Whether or not petitioner Lufthansa German Airlines which issued a confirmed Lufthansa
ticket to private respondent Antiporda covering a five-leg trip abroad different airlines should
be held liable for damages occasioned by the "bumping-off" of said private respondent
Antiporda by Air Kenya, one of the airlines contracted to carry him to a particular destination
of the five-leg trip
RULING:
YES. Lufthansa maintains that its liability to any passenger is limited to occurrences in its own
line, and, thus, in the case at bench, its liability to Antiporda is limited to the extent that it
had transported him from Manila to Singapore and from Singapore to Bombay; that
therefrom, responsibility for the performance of the contract of carriage is assumed by the
succeeding carriers tasked to transport him for the remaining leg of his trip because at that
stage, its contract of carriage with Antiporda ceases, with Lufthansa acting, no longer as the
principal in the contract of carriage, but merely as a ticket-issuing agent for the other
carriers.
On his part, private respondent Antiporda insists that he entered with Lufthansa an exclusive
contract of carriage, the nature of which is a continuous carriage by air from Manila to
Blantyre Malawi; that it did not enter into a series of independent contracts with the carriers
that transported him for the remaining leg of his trip.
In light of the stipulations expressly specified in the ticket defining the true nature of its
contract of carriage with Antiporda, Lufthansa cannot claim that its liability thereon ceased at
Bombay Airport and thence, shifted to the various carriers that assumed the actual task of
transporting said private respondent.
We, therefore, reject Lufthansa's theory that from the time another carrier was engaged to
transport Antiporda on another segment of his trip, it merely acted as a ticket-issuing agent
in behalf of said carrier. In the very nature of their contract, Lufthansa is clearly the principal
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in the contract of carriage with Antiporda and remains to be so, regardless of those instances
when actual carriage was to be performed by various carriers. The issuance of a confirmed
Lufthansa ticket in favor of Antiporda covering his entire five-leg trip abroad successive
carriers concretely attests to this. This also serves as proof that Lufthansa, in effect
guaranteed that the successive carriers, such as Air Kenya would honor his ticket; assure him
of a space therein and transport him on a particular segment of his trip.
5. AMERICAN AIRLINES vs. CA, ET AL
According to the said article, transportation to be performed by several carriers shall be
deemed as one and undivided. The number of tickets issued does not detract from the
oneness of the contract of carriage.
FACTS:
Private respondent purchased from Singapore Airlines in Manila conjunction tickets from
Manila-Singapore-Athens-Larnaca-Rome-Turin-Zurich-Geneva-Copenhagen-New York. In
Geneva, he decided to forego his trip to Copenhagen and go straight to New York. In the
absence of a direct flight under his conjunction tickets from Geneva to New York, he
exchanged the unused portion of the conjunction ticket for a one way ticket from Geneva to
New York from American Airlines, which issued its own ticket to respondent in Geneva and
claimed the value of the unused portion of the conjunction ticket from the International Air
Transport Association (IATA) clearing house in Geneva. In September, 1989, respondent filed
an action for damages before the Regional Trial Court of Cebu for the alleged embarrassment
and mental anguish he suffered at the Geneva Airport when American Airline’s security
officers prevented him from boarding the plane.
ISSUE:
Whether or not the issuance of American Airlines of a new ticket in exchange of the
conjunction ticket the respondent purchased in Manila bar him from seeking recourse in
Philippine courts.
RULING:
The petitioner contends that under Article 28 of the Warsaw Convention, action for damages
may only be brought upon the following courts:
a.) Domicile of the carrier
b.) Carrier’s principal place of business
c.) Place where carrier has a place of business
d.) Place of destination
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Since neither of these elements is present in the case, the petitioner contends that plaintiff
cannot file the case in the Philippines. He further posits that the second contract cannot be
deemed as an extension of the first as the petitioner airline is not a participating airline in
any of the destinations under the first contract.
Respondent on the other hand contends that the second contract she entered into at Geneva
is part and parcel of the first contract, thus the third option under Article 28 of the Warsaw
Convention would apply to him. He further pointed out that petitioner cannot deny the
contract of agency with Singapore Airlines after it honored the conjunction tickets issued by
the latter.
The court ruled that petitioner’s argument is void of merit with reference to Article 1(3) of
the Warsaw Convention. According to the said article, transportation to be performed by
several carriers shall be deemed as one and undivided. The number of tickets issued does not
detract from the oneness of the contract of carriage. Hence, the third option of the plaintiff
under Article 28 of the Warsaw Convention is clothed with jurisdiction.
6. CHINA AIRLINES vs. CHIOK
The obligation of the ticket-issuing airline remained and did not cease, regardless of the fact
that another airline had undertaken to carry the passengers to one of their destinations.
FACTS:
Daniel Chiok purchased from China Airlines, Ltd. an airline passenger ticket for air
transportation covering Manila-Taipei-Hongkong-Manila. Said ticket was exclusively
endorsable to Philippine Airlines, Ltd. Before he left for said trip, the trips covered by the
ticket were pre-scheduled and confirmed by Chiok. When Chiok reached Hongkong, he went
to the PAL office and sought to reconfirm his flight back to Manila. The PAL office confirmed
his return trip on board Flight No. PR 311 and attached its own sticker.
On the next day, Chiok proceeded to Hongkong International Airport for his return trip to
Manila. However, upon reaching the PAL counter, Chiok saw a poster stating that PAL Flight
No. PR 311 was cancelled because of a typhoon in Manila. He was then informed that all the
confirmed ticket holders of PAL Flight No. PR 311 were automatically booked for its next
flight, which was to leave the next day. He then informed PAL personnel that, being the
founding director of the Philippine Polysterene Paper Corporation, he had to reach Manila
the following day because of a business option which he had to execute on said date.
The following day Chiok went to the airport. Cathay Pacific stewardess Lok Chan took and
received Choik’s plane ticket and luggage. However, Carmen Chan, PAL’s terminal supervisor,
informed Chiok that his name did not appear in PAL’s computer list of passengers and
therefore could not be permitted to board PAL Flight No. PR 307. Thereafter, Chiok
proceeded to PAL’s Hongkong office and confronted PAL’s reservation officer, Carie Chao
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(hereafter referred to as Chao), who previously confirmed his flight back to Manila. Chao told
Chiok that his name was on the list and pointed to the latter his computer number listed on
the PAL confirmation sticker attached to his plane ticket, which number was ‘R/MN62’. Chiok
was not able to return to Manila on time.
Consequently, Chiok as plaintiff, filed a Complaint on November 9, 1982 for damages, against
PAL and CAL, as defendants with the Regional Trial Court Manila. He alleged therein that
despite several confirmations of his flight, defendant PAL refused to accommodate him in
Flight No. 307, for which reason he lost the business option aforementioned. He also alleged
that PAL’s personnel, specifically Carmen, ridiculed and humiliated him in the presence of so
many people. Further, he alleged that defendants are solidarily liable for the damages he
suffered, since one is the agent of the other.
The Regional Trial Court (RTC) of Manila held CAL and PAL jointly and severally liable.
Ultimately, it was only the Appeal of CAL that reached the Supreme Court. It allege among
others that since it was only the ticket issuer, it should not be held liable unlike PAL.
ISSUE:
Considering the fact that CAL was only the ticket issuer, may it be held jointly and severally
liable for the acts of PAL’s employees?
RULING:
YES. It is significant to note that the contract of air transportation was between petitioner
and respondent, with the former endorsing to PAL the Hong Kong-to-Manila segment of the
journey. Such contract of carriage has always been treated in this jurisdiction as a single
operation. This jurisprudential rule is supported by the Warsaw Convention, to which the
Philippines is a party, and by the existing practices of the International Air Transport
Association (IATA).
In American Airlines v. Court of Appeals, the court have noted that under a general pool
partnership agreement, the ticket-issuing airline is the principal in a contract of carriage,
while the endorsee-airline is the agent.
Likewise, as the principal in the contract of carriage, the petitioner in British Airways v. Court
of Appeals was held liable, even when the breach of contract had occurred, not on its own
flight, but on that of another airline. The Decision followed our ruling in Lufthansa German
Airlines v. Court of Appeals, in which we had held that the obligation of the ticket-issuing
airline remained and did not cease, regardless of the fact that another airline had undertaken
to carry the passengers to one of their destinations.
In the instant case, following the jurisprudence cited above, PAL acted as the carrying agent
of CAL. In the same way that we ruled against British Airways and Lufthansa in the
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aforementioned cases, we also rule that CAL cannot evade liability to respondent, even
though it may have been only a ticket issuer for the Hong Kong-Manila sector.
ARTICLES 17, 18 AND 19
7. NORTHWEST AIRLINES, INC. vs. CUENCA, ET AL
The same merely declare the carrier liable for damages in the enumerated cases, if the
conditions therein specified are present. Neither said provisions nor others in the
aforementioned Convention regulate or exclude liability for other breaches of contract by the
carrier.
FACTS:
This is an action for damages for alleged breach of contract. After appropriate proceedings
the Court of First Instance of Manila, in which the case was originally filed, rendered
judgment sentencing defendant Northwest Airlines, Inc. — hereinafter referred to as
petitioner — to pay to plaintiff Cuenca — hereinafter referred to as respondent — the sum
of P20,000 as moral damages, together with the sum of P5,000 as exemplary damages, with
legal interest thereon from the date of the filing of complaint," December 12, 1959, "until
fully paid, plus the further sum of P2,000 as attorney's fees and expenses of litigation."
On appeal taken by petitioner, said decision was affirmed by the Court of Appeals, except as
to the P5,000.00 exemplary damages, which was eliminated, and the P20,000.00 award for
moral damages, which was converted into nominal damages.
ISSUE:
Whether or not petitioner has a cause of action, pursuant to Articles 17, 18 and 19 of the
Warsaw Convention
RULING:
YES.
ART. 17. The carrier shall be liable for damages sustained in the event of the death or
wounding of a passenger or any other bodily injury suffered by a passenger, if the accident
which caused the damage so sustained took place on board the aircraft or in the course of
any of the operations of embarking or disembarking.
ART. 18.
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(1) The carrier shall be liable for damage sustained in the event of the destruction or
loss of, or of damage to, any checked baggage, or any goods, if the occurrence
which caused the damage so sustained took place during the transportation by air.
(2) The transportation by air within the meaning of the preceding paragraph shall
comprise the period during which the baggage or goods are in charge of the carrier,
whether in an airport or on board an aircraft, or, in the case of a landing outside an
airport, in any place whatsoever.
(3) The period of the transportation by air shall not extend to any transportation by
land, by sea, or by river performed outside an airport. If, however, such
transportation takes place in the performance of a contract for transportation by
air, for the purpose of loading, delivery, or transhipment, any damage is presumed,
subject to proof to the contrary, to have been the result of an event which took
place during the transportation by air.
ART. 19. The carrier shall be liable for damage occasioned by delay in the transportation by
air of passengers, baggage, or goods.
Petitioner argues that pursuant to those provisions, an air "carrier is liable only" in the event
of death of a passenger or injury suffered by him, or of destruction or loss of, or damage to
any checked baggage or any goods, or of delay in the transportation by air of passengers,
baggage or goods. This pretense is not borne out by the language of said Articles.
The same merely declare the carrier liable for damages in the enumerated cases, if the
conditions therein specified are present. Neither said provisions nor others in the
aforementioned Convention regulate or exclude liability for other breaches of contract by
the carrier. Under petitioner's theory, an air carrier would be exempt from any liability for
damages in the event of its absolute refusal, in bad faith, to comply with a contract of
carriage, which is absurd.
8. PHILIPPINE AIRLINES, INC. VS. IAC
FACTS:
Before boarding petitioner's airplane on August 4, 1974 for their business sojourn from
Manila to Honolulu via Tokyo, private respondents, the spouses George and Veronica
Lorenzana, checked in two pieces of baggage for which they were given baggage claim
tickets. George's personal effects and some of Veronica's things were in one baggage while
the other luggage contained Veronica's other personal items and samples of women's
apparel intended to be shown to prospective customers in America and Canada. On the
Tokyo-Honolulu leg, they changed planes from PAL to Pan Am. When they arrived in
Honolulu, only the luggage containing George's personal effects was located. Efforts exerted
to report and claim the missing bag were futile and instead, private respondents were
requested to follow-up the matter during their stay in Honolulu.
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After staying in Honolulu for three days, without the missing luggage being delivered to
them, George and Veronica decided to fly to Los Angeles where they stayed for more than a
week before leaving for San Francisco where they spent two days. Thereafter, the couple
proceeded to Vancouver and Toronto, Canada and returned to Manila on September 24,
1974.
It was sometime in April, 1975 when the couple was informed that the luggage was located
and on December 5, 1975, the luggage was finally delivered to them. It turned out that the
missing luggage was not turned over by the employees of the Philippines Airlines to the Pan
Am Office in Tokyo and that the baggage was returned to Manila on September 16, 1974.
In the suit for breach of contract, Pan Am interposed the defense that it did not receive the
baggage from the Philippine Airlines. For its part, PAL admitted that it failed to deliver one of
the pieces of luggage at the destination of private respondents in the United States and
during the entire trip. Nevertheless, it proferred the excuse that private respondents omitted
to retrieve the bag after George was informed of its discovery and that at any rate, the
carrier's liability under the Warsaw Convention is limited, in the absence of a declaration
from the passenger, of a higher value.
Regional Trial Court:
After due hearing, the trial court pronounced petitioner accountable for the non-delivery
mainly due to its frank representation that it breached the contract with private
respondents.
Court of Appeals:
The appellate court relied more on the presumption of culpa which neither PAL nor Pan Am
was able to overcome by the requisite quantum of evidence. Regarding the exculpation
raised by petitioner premised on the caveat under the Warsaw Convention, respondents
court expressed the view that the proviso which concerns limited culpability for damage, loss
or delay in transportation of the goods is inapplicable since the bag was not delivered to
private respondent during the whole trip.
ISSUE:
Whether or not Pan Am should be held liable
RULING:
YES. Petitioner begins with the hypothesis that it is private respondents who should be
faulted for the alleged "delay in delivery" because an appreciable length of time elapsed
from the moment they were informed of the whereabouts of the bag until an effort was
exerted to retrieve it. However, an argument of this nature, which springs from petitioner's
incongruous interpretation of "delay", is far from persuasive, since it is designed to toss the
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onus probandi on the admitted fact of non-delivery by the carrier to the passenger's
shoulders.
To bring the case within the ambit of the limited liability clause for loss, damage, or delay
under Article 22 in conjunction with the second paragraph of Article 26 of the Warsaw
Convention, petitioner is inclined to construe its accountability by arguing that the missing
bag was merely delayed. Petitioner is categorical in its disputation that since the bag was
neither lost nor damaged, the baggage was merely delayed, hence the caveat must perforce
apply.
This process of exclusion typifies the classic fallacy of non-sequitur because the fact of the
matter is that the missing luggage was not turned over by the employees of petitioner to the
Pan Am Office in Tokyo and was returned to Manila on September 16, 1974. Still worse, the
luggage was not forthwith delivered to private respondents who returned from their trip to
the U.S. and Canada on September 24, 1974. It was not until more than a year thereafter, or
on December 5, 1975, when the luggage was finally delivered to private respondents.
There is thus no occasion to speak of delay since the baggage was not delivered at all to the
passenger for purposes of the trip in contravention of a common carrier's undertaking to
transport the goods from the place of embarkation to the ultimate point of destination.
ARTICLE 22 – LIMIT LIABILITY
9. PHILIPPINE AIR LINES vs. CA, ET AL (GR No. L-44936, 25 September 1992)
Petitioner cannot capitalize on the limited liability clause under Article 22 (2) of the Warsaw
Convention because of the unequivocal condition set forth under the second sentence of
Article 4, paragraph 4.
FACTS:
On April 4, 1972, private respondent boarded herein petitioner’s Flight PR 301 from
Hongkong to Manila and checked in four (4) pieces of baggage. When the plane landed in
Manila, private respondent was not able to locate the two pieces of baggage containing
cinematographic films despite diligent search therefor. Private respondent made the claim
for such loss to petitioner which admitted the loss and offered to compensate private
respondent.
Instead of accepting the offer, private respondent opted to file the case below to principally
recover the value of the lost items which he estimated to be worth P20,000.00.
Petitioner tried to call the attention of the trial judge to the herein below quoted provisions
of the Warsaw Convention which limit the liability of petitioner as an air carrier to 250 francs
per kilogram:
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"ARTICLE 22 (2). In the transportation of checked baggage and of goods, the liability of the
carrier shall be limited to a sum of 250 francs per kilogram, unless the consignor has made, at
the time when the package was handed over to the carrier, a special declaration of the value
at delivery and has paid a supplementary sum if the case so requires. In that case the carrier
will be liable to pay a sum not exceeding the declared sum, unless he proves that the sum is
greater than the actual value to the consignor at delivery."
Regional Trial Court:
Anent the aspect of liability, the trial court opined that since petitioner did not introduce a
single piece of document and merely adopted private respondent’s exhibits, it may not
invoke the limitation of its liability with respect to ‘checked baggage’ under the provisions of
the Warsaw Convention. The apathy of petitioner seems to have extended its impact on the
outcome of the case when the trial court ruled that the films were worth $4,000.00 which, as
aforesaid, was nonchalantly adopted by petitioner.
Court of Appeals:
Sustained the findings of the RTC
ISSUE:
Whether or not petitioner can avail the limitations on liability under the Warsaw Convention
RULING: NO.
Article 4(4) of the Warsaw Convention:
"The absence, irregularity, or loss of the baggage checks shall not affect the existence or the
validity of the contract of transportation which shall nonetheless be subject to the rules of this
Convention. Nevertheless, if the carrier accepts baggage without a baggage check having
been delivered, or if the baggage check does not contain the particulars set out at (d), (f), and
(h) above, the carrier shall not be entitled to avail himself of those provisions of the
Convention which exclude or limit his liability."
Petitioner cannot capitalize on the limited liability clause under Article 22 (2) of the Warsaw
Convention because of the unequivocal condition set forth under the second sentence of
Article 4, paragraph 4 that:
". . . if the carrier accepts baggage without a baggage check having been delivered, if the
baggage check does not contain the particulars set out at (d), (f), and (h) above, the carrier
shall not be entitled to avail himself of those provisions of the Convention which exclude or
limit his liability."
Petitioner contends that it is covered by the first and not by the second sentence of Article 4,
paragraph 4 (page 8, supra). But the argument as proferred, requires Us to read something
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which is not so stated between the lines for the first sentence speaks only of the "existence"
or the "validity" of the contract of transportation while the query on "liability" is particularly
and directly resolved by the second sentence.
To be sure, and even assuming in gratia argumenti that an inconsistency exists, the first
sentence must be construed as the general proposition governing the existence or validity of
the contract of transportation which must yield to the particular rule under the second
sentence regarding liability. Furthermore, even if We consider the two sentences as
particular in nature, the rule has been laid down that the clause which comes later shall be
given effect upon the presumption that it expresses the dominant purpose of the instrument.
10. PAN AMERICAN WORLD AIRWAYS, INC. vs. IAC, ET AL
The Warsaw Convention limits a carrier's liability to US$9.07 per pound or US$20.00 per kilo
in cases of contractual breach of carriage.
FACTS:
Plaintiff Rene V. Pangan, president and general manager of the plaintiffs Sotang Bastos and
Archer Production, while in San Francisco, Califonia and Primo Quesada of Prime Films, San
Francisco, California, entered into an agreement whereby the former, for and in
consideration of the amount of US $2,500.00 per picture, bound himself to supply the latter
with three films. 'Ang Mabait, Masungit at ang Pangit,' 'Big Happening with Chikiting and
Iking,' and 'Kambal Dragon' for exhibition in the United States. It was also their agreement
that plaintiffs would provide the necessary promotional and advertising materials for said
films on or before May 30, 1978.
Pangan obtained from defendant Pan Am's Manila Office, through the Your Travel Guide, an
economy class airplane ticket for passage from Manila to Guam on defendant's Flight No. 842
upon payment by said plaintiff of the regular fare.
2 hours before departure time, Pangan was at the defendant's ticket counter at the Manila
International Airport and presented his ticket and checked in his two luggages, for which he
was given baggage claim tickets. The two luggages contained the promotional and
advertising materials, the clutch bags, barong tagalog and his personal belongings.
Subsequently, Pangan was informed that his name was not in the manifest and so he could
not take Flight No. 842 in the economy class. Since there was no space in the economy class,
plaintiff Pangan took the first class because he wanted to be on time in Guam to comply with
his commitment, paying an additional sum of $112.00. When Pangan arrived in Guam, his
two luggages did not arrive with his flight; as a consequence of which his agreements with
Slutchnick and Quesada for the exhibition of the films in Guam and in the United States were
cancelled. Thereafter, he filed a written claim for his missing luggages.
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Upon arrival in the Philippines, Pangan contacted his lawyer, who made the necessary
representations to protest as to the treatment which he received from the employees of the
defendant and the loss of his two luggages.
Defendant Pan Am assured Pangan that his grievances would be investigated and given its
immediate consideration. Due to the defendant's failure to communicate with Pangan about
the action taken on his protests, the present complaint was filed by the plaintiff.
ISSUE:
Whether or not petitioner should be held liable for the lost luggage of the defendant
RULING:
NO. On the basis of the foregoing stipulations printed at the back of the ticket, petitioner
contends that its liability for the lost baggage of private respondent Pangan is limited to
$600.00 ($20.00 x 30 kilos) as the latter did not declare a higher value for his baggage and
pay the corresponding additional charges. In view thereof petitioner's liability for the lost
baggage is limited to $20.00 per kilo or $600.00, as stipulated at the back of the ticket.
At this juncture, in order to rectify certain misconceptions, the Court finds it necessary to
state that the Court of Appeal's reliance on a quotation from Northwest Airlines, Inc. v.
Cuenca to sustain the view that "to apply the Warsaw Convention which limits a carrier's
liability to US$9.07 per pound or US$20.00 per kilo in cases of contractual breach of carriage
is against public policy" is utterly misplaced, to say the least.
Thus, it is quite clear that the Court never intended to, and in fact never did, rule against the
validity of provisions of the Warsaw Convention. Consequently, by no stretch of the
imagination may said quotation from Northwest be considered as supportive of the
appellate court's statement that the provisions of the Warsaw Convention limited a carrier's
liability are against public policy.
The Court finds itself unable to agree with the decision of the trial court, and affirmed by the
Court of Appeals, awarding private respondents damages as and for lost profits when their
contracts to show the films in Guam and San Francisco, California were cancelled. In the
absence of a showing that petitioner's attention was called to the special circumstances
requiring prompt delivery of private respondent Pangan's luggages, petitioner cannot be held
liable for the cancellation of private respondents' contracts as it could not have foreseen
such an eventuality when it accepted the luggages for transit.
The evidence reveals that the proximate cause of the cancellation of the contracts was
private respondent Pangan's failure to deliver the promotional and advertising materials on
the dates agreed upon. For this petitioner cannot be held liable. Private respondent Pangan
had not declared the value of the two luggages he had checked in and paid additional
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charges. Neither was petitioner privy to respondents' contracts nor was its attention called to
the condition therein requiring delivery of the promotional and advertising materials on or
before a certain date.
With the Court's holding that petitioner's liability is limited to the amount stated in the ticket,
the award of attorney's fees, which is grounded on the alleged unjustified refusal of
petitioner to satisfy private respondent's just and valid claim, loses support and must be set
aside.
APPLICATION OF NCC/OTHER LAWS/NOT AN EXCLUSIVE ENUMERATION
11. PHILIPPINE AIR LINES vs. CA, ET AL (GR No. 92501, 6 March 1992)
Since the passenger's destination in this case was the Philippines, Philippine law governs the
liability of the carrier for the loss of the passenger's luggage.
FACTS:
About 5:30 a.m. on April 17, 1985, plaintiff [Co], accompanied by his wife and son, arrived at
the Manila International Airport aboard defendant airline's PAL Flight No. 107 from San
Francisco, California, U.S.A. Soon after his embarking (sic), plaintiff proceeded to the baggage
retrieval area to claim his checks in his possession. Plaintiff found eight of his luggage, but
despite diligent search, he failed to locate ninth luggage, with claim check number 729113
which is the one in question in this case.
Plaintiff then immediately notified defendant company through its employee, Willy
Guevarra, who was then in charge of the PAL claim counter at the airport. Willy Guevarra,
who testified during the trial court on April 11, 1986, filled up the printed form known as a
Property Irregularity Report, acknowledging one of the plaintiff's luggages to be missing, and
signed after asking plaintiff himself to sign the same document. In accordance with this
procedure in cases of this nature, Willy Guevarra asked plaintiff to surrender to him the nine
claim checks corresponding to the nine luggages, i.e., including the one that was missing.
The incontestable evidence further shows that plaintiff lost luggage was a Samsonite suitcase
measuring about 62 inches in length, worth about US$200.00 and containing various
personal effects purchased by plaintiff and his wife during their stay in the United States and
similar other items sent by their friends abroad to be given as presents to relatives in the
Philippines. Plaintiff's invoices evidencing their purchases show their missing personal effects
to be worth US$1,243.01, in addition to the presents entrusted to them by their friends
which plaintiffs testified to be worth about US$500.00 to US$600.00.
Plaintiff on several occasions unrelentingly called at defendant's office in order to pursue his
complaint about his missing luggage but no avail. Thus, on April 15, 1985, plaintiff through his
lawyer wrote a demand letter to defendant company though Rebecca V. Santos, its manager,
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Central Baggage Services. On April 17, 1985, Rebecca Santos replied to the demand letter
acknowledging "that to date we have been unable to locate your client's (plaintiff's) baggage
despite our careful search" and requesting plaintiff's counsel to "please extend to him our
sincere apologies for the inconvenience he was caused by this unfortunate incident". Despite
the letter, however, defendants never found plaintiff's missing luggage or paid its
corresponding value. Consequently, on May 3, 1985, plaintiff filed his present complaint
against said defendants.
ISSUE:
Whether or not PAL can claim the limitation on liability under the Warsaw Convention
RULING:
Petitioner contends that under the Warsaw Convention, its liability, if any, cannot exceed US
$20.00 based on weight as private respondent Co did not declare the contents of his baggage
nor pay traditional charges before the flight. We find no merit in that contention.
In Samar Mining Company, Inc. vs. Nordeutscher Lloyd (132 SCRA 529), this Court ruled:
The liability of the common carrier for the loss, destruction or deterioration of goods
transported from a foreign country to the Philippines is governed primarily by the New Civil
Code. In all matters not regulated by said Code, the rights and obligations of common carriers
shall be governed by the Code of Commerce and by Special Laws.
Since the passenger's destination in this case was the Philippines, Philippine law governs the
liability of the carrier for the loss of the passenger's luggage.
In this case, the petitioner failed to overcome, not only the presumption, but more
importantly, the private respondent's evidence, proving that the carrier's negligence was the
proximate cause of the loss of his baggage. Furthermore, petitioner acted in bad faith in
faking a retrieval receipt to bail itself out of having to pay Co's claim.
12. LUNA, ET AL vs. CA, ET AL
The Convention merely declares the carrier liable for damages in the enumerated cases, if the
conditions therein specified are present. For sure, it does not regulate the liability, much less
exempt, the carrier for violating the rights of others which must simply be respected in
accordance with their contracts of carriage. The application of the Convention must not
therefore be construed to preclude the operation of the Civil Code and other pertinent laws.
FACTS:
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On 19 May 1989, at around 8:00 in the morning, petitioners Rufino Luna, Rodolfo Alonso and
Porfirio Rodriguez boarded Flight 020 of private respondent Northwest Airlines bound for
Seoul, South Korea, to attend the four-day Rotary International Convention from the 21st to
the 24th of May 1992. They checked in one (1) piece of luggage each. After boarding,
however, due to engine trouble, they were asked to disembark and transfer to a Korean
Airlines plane scheduled to depart four (4) hours later. They were assured that their baggage
would be with them in the same flight.
When petitioners arrived in Seoul, they discovered that their personal belongings were
nowhere to be found instead, they were allegedly flown to Seattle, U.S.A. It was not until
four (4) days later, and only after repeated representations with Northwest Airlines
personnel at the airport in Korea were petitioners able to retrieve their luggage. By then the
Convention, which they were hardly able to attend, was almost over.
Petitioners Rufino Y. Luna and Rodolfo J. Alfonso assert that on 6 June 1989, or thirteen (13)
days after they recovered their luggage, they sent a written claim to private respondent's
office along Roxas Blvd., Ermita, Manila. Petitioner Porfirio Rodriquez, on his part,
asserverates that he filed his claim on 13 June 1989. However, private respondent, in a letter
of 21 June 1989, disowned any liability for the delay and averred that it exerted "its best
efforts to carry the passenger and baggage with reasonable dispatch."
Private respondent maintains that it did not receive any demand letter from petitioners
within the 21-day reglementary period, as provided in par. 7 of the Conditions of Contract
appearing in the plane ticket. Since Art. 26. par. (4), of the Warsaw Convention provides that
"[f]ailing complaint within the times aforesaid, no action shall lie against the carrier, save in
the case of fraud on his part," the carrier consequently cannot be held liable for the delay in
the delivery of the baggage. In other words, non-observance of the prescribed period to file a
claim bars claimant's action in court for recovery.
Private respondent, citing foreign jurisprudence, likewise submits that Art. 25, par. (1), of the
Warsaw Convention which excludes or limits liability of common carriers if the damage is
caused by it willful misconduct, refers only to the monetary ceiling on damages found in Art.
22.
ISSUE:
Whether the application of the Warsaw Convention operates to exclude the application of
the provisions of the New Civil Code and the other statutes
RULING:
YES. Previously, We ruled that the Warsaw Convention was a treaty commitment voluntarily
assumed by the Philippine government; consequently, it has the force and effect of law in
this country. But, in the same token, We are also aware of jurisprudence that the Warsaw
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Convention does not operate as an exclusive enumeration of the instances for declaring an
airline liable for breach of contract of carriage or as an absolute limit of the extent of that
liability. The Convention merely declares the carrier liable for damages in the enumerated
cases, if the conditions therein specified are present. For sure, it does not regulate the
liability, much less exempt, the carrier for violating the rights of others which must simply be
respected in accordance with their contracts of carriage. The application of the Convention
must not therefore be construed to preclude the operation of the Civil Code and other
pertinent laws. In fact, in Alitalia v. IAC, We awarded Dr. Felipa Pablo nominal damages, the
provisions of the Convention notwithstanding.
Hence, petitioners' alleged failure to file a claim with the common carrier as mandated by the
provisions of the Warsaw Convention should not be a ground for the summary dismissal of
their complaints since private respondent may still be held liable for breach of other relevant
laws which may provide a different period or procedure for filing a claim. Considering that
petitioners indeed filed a claim which private respondent admitted having received on 21
June, 1989, their demand may have very well been filed within the period prescribed by
those applicable laws. Consequently, respondent trial courts, as well as respondent appellate
court, were in error when they limited themselves to the provisions of the Warsaw
Convention and disregarding completely the provisions of the Civil Code.
However, we are not prepared to subscribed to petitioners' argument that the failure of
private respondent to deliver their luggage at the designated time and place amounted ipso
facto to willful misconduct. For willful misconduct to exist, there must be a showing that the
acts complained of were impelled by an intention to violate the law, or were in persistent
disregard of one's rights. It must be evidenced by a flagrantly or shamefully wrong or
improper conduct.
13. CATHAY PACIFIC AIRWAYS, LTD. vs. CA, ET AL
It does not regulate, much less exempt, the carrier from liability for damages for violating the
rights of its passengers under the contract of carriage, especially if wilfull misconduct on the
part of the carrier's employees is found or established, which is clearly the case before Us.
FACTS:
On 19 October 1975, respondent Tomas L. Alcantara was a first class passenger of petitioner
Cathay Pacific Airways, Ltd. (CATHAY for brevity) on its Flight No. CX-900 from Manila to
Hongkong and onward from Hongkong to Jakarta on Flight No. CX-711. The purpose of his
trip was to attend the following day, 20 October 1975, a conference with the Director
General of Trade of Indonesia, Alcantara being the Executive Vice-President and General
Manager of Iligan Cement Corporation, Chairman of the Export Committee of the Philippine
Cement Corporation, and representative of the Cement Industry Authority and the Philippine
Cement Corporation. He checked in his luggage which contained not only his clothing and
articles for personal use but also papers and documents he needed for the conference.
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Upon his arrival in Jakarta, respondent discovered that his luggage was missing. When he
inquired about his luggage from CATHAY's representative in Jakarta, private respondent was
told that his luggage was left behind in Hongkong. For this, respondent Alcantara was offered
$20.00 as "inconvenience money" to buy his immediate personal needs until the luggage
could be delivered to him.
His luggage finally reached Jakarta more than twenty four (24) hours after his arrival.
However, it was not delivered to him at his hotel but was required by petitioner to be picked
up by an official of the Philippine Embassy.
On 1 March 1976, respondent filed his complaint against petitioner with the Court of First
Instance (now Regional Trial Court) praying for temperate, moral and exemplary damages,
plus attorney's fees.
ISSUE:
Whether or not CATHAY can apply the limitation on liability of a common carrier under
Warsaw Convention
RULING:
NO. Petitioner airline contends that the extent of its liability for breach of contract should be
limited absolutely to that set forth in the Warsaw Convention.
We do not agree. As We have repeatedly held, although the Warsaw Convention has the
force and effect of law in this country, being a treaty commitment assumed by the Philippine
government, said convention does not operate as an exclusive enumeration of the instances
for declaring a carrier liable for breach of contract of carriage or as an absolute limit of the
extent of that liability.
The Warsaw Convention declares the carrier liable for damages in the enumerated cases and
under certain limitations. However, it must not be construed to preclude the operation of the
Civil Code and other pertinent laws. It does not regulate, much less exempt, the carrier from
liability for damages for violating the rights of its passengers under the contract of carriage,
especially if wilfull misconduct on the part of the carrier's employees is found or established,
which is clearly the case before Us.
When petitioner airline misplaced respondent's luggage and failed to deliver it to its
passenger at the appointed place and time, some special species of injury must have been
caused to him. For sure, the latter underwent profound distress and anxiety, and the fear of
losing the opportunity to fulfill the purpose of his trip. In fact, for want of appropriate
clothings for the occasion brought about by the delay of the arrival of his luggage, to his
embarrassment and consternation respondent Alcantara had to seek postponement of his
pre-arranged conference with the Director General of Trade of the host country.
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14. PHILIPPINE AIRLINES vs. CA, ET AL (GR No. 119706, 14 March 1996)
FACTS:
On January 27, 1990, plaintiff Gilda C. Mejia shipped thru defendant, Philippine Airlines, one
(1) unit microwave oven, with a gross weight of 33 kilograms from San Francisco, U.S.A. to
Manila, Philippines. Upon arrival, however, of said article in Manila, Philippines, plaintiff
discovered that its front glass door was broken and the damage rendered it unserviceable.
Demands both oral and written were made by plaintiff against the defendant for the
reimbursement of the value of the damaged microwave oven, and transportation charges
paid by plaintiff to defendant company. But these demands fell on deaf ears.
Plaintiff Gilda Mejia testified that sometime on January 27, 1990, she took defendants plane
from San Francisco, U.S.A. for Manila, Philippines. Amongst her baggages was a slightly used
microwave oven with the brand name Sharp under PAL Air Waybill No. 0-79-1013008-3.
When shipped, defendants office at San Francisco inspected it. It was in good condition with
its front glass intact. She did not declare its value upon the advice of defendants personnel at
San Francisco.
When she arrived in Manila, she gave her sister Concepcion C. Dio authority to claim her
baggage and took a connecting flight for Bacolod City. When Concepcion C. Dino claimed the
baggage with defendant, then with the Bureau of Customs, the front glass of the microwave
oven was already broken and cannot be repaired because of the danger of radiation. They
demanded from defendant thru Atty. Paco P30,000.00 for the damages although a brand
new one costs P40,000.00, but defendant refused to pay.
ISSUE:
Whether or not the limitations on liability under the Warsaw Convention are applicable in
this case
RULING:
NO. The Court finds no merit to defendant’s contention that under the Warsaw Convention,
its liability if any, cannot exceed U.S. $20.00 based on weight as plaintiff did not declare the
contents of her baggage nor pay additional charges before the flight.
The appellate court declared correct the non-application by the trial court of the limited
liability of therein defendant-appellant under the Conditions of the Contract contained in the
air waybill, based on the ruling in Cathay Pacific Airways, Ltd. vs. Court of Appeals, et al.,
which substantially enunciates the rule that while the Warsaw Convention has the force and
effect of law in the Philippines, being a treaty commitment by the government and as a
signatory thereto, the same does not operate as an exclusive enumeration of the instances
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when a carrier shall be liable for breach of contract or as an absolute limit of the extent of
liability, nor does it preclude the operation of the Civil Code or other pertinent laws.
It is additionally averred that since private respondent was merely advised, not ordered, that
she need not declare a higher value for her cargo, the final decision of refraining from making
such a declaration fell on private respondent and should not put the petitioner in estoppel
from invoking its limited liability.
In refutation, private respondent explains that the reason for the absence of a declaration of
a higher value was precisely because petitioner’s personnel in San Francisco, U.S.A. advised
her not to declare the value of her cargo, which testimony has not at all been rebutted by
petitioner. This being so, petitioner is estopped from faulting private respondent for her
failure to declare the value of the microwave oven.
In the case at bar, it will be noted that private respondent signified an intention to declare
the value of the microwave oven prior to shipment, but was explicitly advised against doing
so by PALs personnel in San Francisco, U.S.A.
It cannot be denied that the attention of PAL through its personnel in San Francisco was
sufficiently called to the fact that private respondent’s cargo was highly susceptible to
breakage as would necessitate the declaration of its actual value. Petitioner had all the
opportunity to check the condition and manner of packing prior to acceptance for shipment,
as well as during the preparation of the air waybill by PAL's Acceptance Personnel based on
information supplied by the shipper, and to reject the cargo if the contents or the packing did
not meet the company’s required specifications. Certainly, PAL could not have been
otherwise prevailed upon to merely accept the cargo.
15. NORTHWEST AIRLINES, INC. vs. CA, ET AL and TORRES vs. CA, ET AL
FACTS:
The plaintiff, [Torres], allegedly on a special mission to purchase firearms for the Philippine
Senate, purchased a round trip ticket from defendant [Northwest] for his travel to Chicago
and back to Manila. via defendants flight, plaintiff left for United States.
After purchasing firearms and on the way back to Manila, plaintiff checked-in and presented
before defendant’s representative his two identical baggage, one of which contained
firearms. Defendant’s representative required the baggage to be opened and the supporting
evidence to be presented. Plaintiff showed them his authorization from the Philippine
government and the purchase receipts. Plaintiff thereafter sealed the baggage and
defendants representative placed a red tag on the baggage with firearms with the marking
"CONTAINS FIREARMS".
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Upon arrival in Manila on June 22, 1988 plaintiff was not able to claim one of his baggages.
Plaintiff was informed by defendant’s representative that his baggage containing firearms
was recalled back to Chicago by defendant for US Customs verification. A telex to this effect
was shown to plaintiff.
On June 28, 1988, after being advised of the arrival of his other baggage, plaintiff claimed
and opened the baggage in the presence of defendants representative and found out that
the firearms were missing. A Personal Property Missing Damage Report was issued by
defendant to plaintiff.
On account of the continuous refusal of defendant to settle amicably, plaintiff then prayed
before the trial court that defendant be ordered to pay actual damages, moral damages,
temperate damages, exemplary damages and attorney's fees.
ISSUE:
Whether or not the limitations on liability under the Warsaw Convention can be availed of by
Northwest Airlines
RULING:
NO. In this case, NORTHWEST denied in its Answer the material allegations in the complaint
and asserted, in fact, that it was not liable for actual damages because the box containing the
alleged lost firearms was the one received by TORRES when he arrived in Manila. It likewise
contended that, even granting that the firearms were lost, its liability was limited by the
Warsaw Convention and the contract of transportation to $9.07 per pound, or a total of $640
as the box weighed 70 pounds. It also denied having acted fraudulently or in bad faith.
In thus submitting for summary judgment the matter of its liability only to the maximum
allowed in Section 22(2) of the Warsaw Convention, NORTHWEST was deemed to have
hypothetically admitted arguendo that the firearms were lost. It did not waive the
presentation of evidence that it was not in fact liable for the alleged loss of firearms. And
even if it were so liable, NORTHWEST could still prove at the appropriate time that it was not
liable beyond the maximum provided in said Section 22(2).
We, however, agree with both the trial court and the Court of Appeals that NORTHWESTs
liability for actual damages may not be limited to that prescribed in Section 22(2) of the
Warsaw Convention. In Alitalia v. Intermediate Appellate Court, we held:
The [Warsaw] Convention does not operate as an exclusive enumeration of the instances of
an airlines liability, or as an absolute limit of the extent of that liability. Such a proposition is
not borne out by the language of the Convention, as this Court has now, and at an earlier
time, pointed out. Moreover, slight reflection readily leads to the conclusion that it should be
deemed a limit of liability only in those cases where the cause of the death or injury to person,
EH403
or destruction, loss or damage to property or delay in its transport is not attributable to or
attended by any willful misconduct, bad faith, recklessness, or otherwise 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 injury. The Conventions provisions, in short, do
not regulate or exclude liability for other breaches of contract by the carrier or misconduct of
its officers and employees, or for some particular or exceptional type of damage.
16. UNITED AIRLINES vs. UY
The Convention does not preclude the operation of the Civil Code and other pertinent laws. It
does not regulate, much less exempt, the carrier from liability for damages for violating the
rights of its passengers under the contract of carriage, especially if willful misconduct on the
part of the carrier’s employees is found or established.
FACTS:
On October 13, 1989, respondent, a passenger of United Airlines, checked in together with
his luggage one piece of which was found to be overweight at the airline counter. To his utter
humiliation, an employee of petitioner rebuked him saying that he should have known the
maximum weight allowance per bag and that he should have packed his things accordingly.
Then, in a loud voice in front of the milling crowd, she told respondent to repair his things
and transfer some of them to the light ones. Respondent acceded but his luggage was still
overweight. Petitioner billed him overweight charges but its employee reused to honor the
miscellaneous charges under MCD which he offered to pay with. Not wanting to leave
without his luggage, he paid with his credit card. Upon arrival in manila, he discovered that
one of his bags had been slashed and its contents stolen.
In a letter dated October 16, 1989, he notified petitioner of his loss and requested
reimbursement. Petitioner paid for his loss based on the maximum liability per pound.
Respondent considered the amount grossly inadequate. He sent two more letters to petition
but to no avail. On June 9, 1992, respondent filed a complaint for damages against petitioner
Airline. Petitioner moved to dismiss the complaint invoking the provisions of Article 29 of the
Warsaw Convention. Respondent countered that according to par. 2 of Article 29, “the
method of calculating the period of limitation shall be determined by the law of the court to
which the case is submitted.”
ISSUE:
Does the Warsaw Convention preclude the operation of the Civil Code and other pertinent
laws?
RULING:
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NO. Within our jurisdiction we have held that the Warsaw Convention can be applied, or
ignored, depending on the peculiar facts presented by each case. Convention provisions do
not regulate or exclude liabilities for other breaches of contract by the carrier or misconduct
of its officers and employees, or for some particular or exceptional type of damage. Neither
may the Convention be invoked to justify the disregard of some extraordinary type of
damage. Neither may the Convention be invoked to justify the disregard of some
extraordinary sort of damage resulting to a passenger and preclude recovery therefore
beyond the limits set by said convention. Likewise, we have held that the Convention does
not preclude the operation of the Civil Code and other pertinent laws. It does not regulate,
much less exempt, the carrier from liability for damages for violating the rights of its
passengers under the contract of carriage, especially if willful misconduct on the part of the
carrier’s employees is found or established.
GROSS NEGLIGENCE/DISCOURTESY
17. SABENA BELGIAN WORLD AIRLINES vs. CA
FACTS:
Private respondent MA. PAULA SAN AGUSTIN was a passenger on board Flight SN 284 of
defendant airline originating from Casablanca to Brussels, Belgium on her way back to
Manila. She checked in her luggage which contained her valuables all amounting to
$4,265.00, for which she was issued Tag No. 71423. She stayed overnight in Brussels and her
luggage was left on board Flight SN 284. Upon Arrival in Manila, she learned that her luggage
was missing and was advised to accomplish and submit a property Irregularity Report which
she submitted and filed on the same day.
Upon follow up, it remained missing; thus, she filed her formal complaint with the office of
Ferge Massed, petitioner’s Local Manager, demanding immediate attention.
Two weeks later she was notified that her luggage was found. But unfortunately plaintiff was
informed that the luggage was lost for the second time. She demanded payment but the
airline refused to settle the claim.
The trial court ruled in favor of Ma. Paula San Agustin. The appellate court affirmed in toto
the trial court’s judgment.
Petitioner airline company, in contending that the alleged negligence of private respondent
should be considered the primary cause for the loss of her luggage, avers that, despite her
awareness that the flight ticket had been confirmed only for Casablanca and Brussels, and
that her flight from Brussels to Manila had yet to be confirmed, she did not retrieve the
luggage upon arrival in Brussels. Petitioner insists that private respondent, being a seasoned
international traveler, must have likewise been familiar with the standard provisions
contained in her flight ticket that items of value are required to be hand-carried by the
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passenger and that the liability of the airline or loss, delay or damage to baggage would be
limited, in any event, to only US$20.00 per kilo unless a higher value is declared in advance
and corresponding additional charges are paid thereon. At the Casablanca International
Airport, private respondent, in checking in her luggage, evidently did not declare its contents
or value. Petitioner cites Section 5(c), Article IX, of the General Conditions of Carriage, signed
at Warsaw, Poland, on 02 October 1929, as amended by the Hague Protocol of 1955,
generally observed by International carriers, stating, among other things, that:
“Passengers shall not include in his checked baggage, and the carrier may refuse to carry as
checked baggage, fragile or perishable articles, money, jewelry, precious metals, negotiable
papers, securities or other valuables.”
ISSUE:
Whether or not the airlines should be held liable for the lost baggage
RULING:
YES. Fault or negligence consists in the omission of that diligence which is demanded by the
nature of an obligation and corresponds with the circumstances of the person, of the time,
and of the place. When the source of an obligation is derived from a contract, the mere
breach or non-fulfillment of the prestation gives rise to the presumption of fault on the part
of the obligor. This rule is not different in the case of common carriers in the carriage of
goods which, indeed, are bound to observe not just the due diligence of a good father of a
family but that of “extraordinary” care in the vigilance over the goods.
The airline cannot invoke the tort doctrine of proximate cause because the private
respondent’s luggage was lost while it was in the custody of petitioner. The “loss of said
baggage not only once but twice,” said the appellate court, “underscores the wanton
negligence and lack of care” on the part of the carrier. The above findings foreclose whatever
rights petitioner might have had to the possible limitation of liabilities enjoyed by
international air carriers under the Warsaw Convention.
In Alitalia vs. Intermediate Appellate Court, the Court held that “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 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 ‘if the damage is (similarly) caused x x x by any agent of the carrier
acting within the scope of his employment.’
The Convention does not thus operate as an exclusive enumeration of the instances of an
airline’s liability, or as an absolute limit of the extent of that liability. It should be deemed a
limit of 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 to or
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attended by any wilful misconduct, bad faith, recklessness or otherwise 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 injury.
18. PHILIPPINE AIRLINES vs. CA, ET AL (GR No. 119641, 17 May 1996)
FACTS:
Sometime in May, 1988, Dr. Josefino Miranda and his wife, Luisa, who were residents of
Surigao City, went to the United States of America on a regular flight of Philippine Airlines,
Inc. (PAL). On June 19, 1988, after a stay of over a month there, they obtained confirmed
bookings from PAL's San Francisco Office for PAL Flight PR 101 from San Francisco to Manila
via Honolulu on June 21, 1988; PAL flight PR 851 from Manila to Cebu on June 24, 1988; and
PAL Flight PR 905 from Cebu to Surigao also on June 24, 1988.
Accordingly, on June 21, 1988, private respondents boarded PAL Flight PR 101 in San
Francisco with five (5) pieces of baggage. After a stopover at Honolulu, and upon arrival in
Manila on June 23, 1988, they were told by the PAL personnel that their baggage consisting
of two balikbayan boxes, two pieces of luggage and one fishing rod case were off-loaded at
Honolulu, Hawaii due to weight limitations. Consequently, private respondents missed their
connecting flight from Manila to Cebu City, as originally scheduled, since they had to wait for
their baggage which arrived the following day, June 24, 1988, after their pre-scheduled
connecting flight had left. They consequently also missed their other scheduled connecting
flight from Cebu City to Surigao City.
On June 25, 1988, they departed for Cebu City and therefrom private respondents had to
transfer to PAL Flight 471 for Surigao City. On the way to Surigao City, the pilot announced
that they had to return to Mactan Airport due to some mechanical problem. While at Mactan
Airport, the passengers were provided by PAL with lunch and were booked for the afternoon
flight to Surigao City. However, said flight was also canceled.
Since there were no more flights for Surigao City that day, private respondents asked to be
billeted at the Cebu Plaza Hotel where they usually stay whenever they happen to be in Cebu
City. They were, however, told by the PAL employees that they could not be accommodated
at said hotel supposedly because it was fully booked. Contrarily, when Dr. Miranda called the
hotel, he was informed that he and his wife could be accommodated there. Although
reluctant at first, PAL eventually agreed to private respondents' overnight stay at said hotel.
Oscar Jereza, PAL duty manager, approved the corresponding hotel authority with standard
meals. It was only after private respondents' insistence that their meals be ordered a la carte
that they were allowed to do so by PAL provided that they sign for their orders.
Inasmuch as the shuttle bus had already left by the time private respondents were ready to
go to the hotel, PAL offered them P150.00 to include the fare for the return trip to the
airport. Dr. Miranda asked for P150.00 more as he and his wife, along with all of their
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baggage, could not be accommodated in just one taxi, aside from the need for tipping money
for hotel boys. Upon refusal of this simple request, Dr. Miranda then declared that he would
forego the amenities offered by PAL. Thus, the voucher for P150.00 and the authority for the
hotel accommodations prepared by PAL were voided due to private respondents' decision
not to avail themselves thereof.
To aggravate the muddled situation, when private respondents tried to retrieve their
baggage, they were told this time that the same were loaded on another earlier PAL flight to
Surigao City. Thus, private respondents proceeded to the hotel sans their baggage and of
which they were deprived for the remainder of their trip. Private respondents were finally
able to leave on board the first PAL flight to Surigao City only on June 26, 1988. Thereafter,
they instituted an action for damages which, after trial as well as on appeal, was decided in
their favor.
ISSUE:
Whether or not there was bad faith on the part of PAL to warrant the award of moral
damages to the private respondents
RULING:
YES. Petitioner argues that there was no bad faith on its part for while there was admittedly
a delay in fulfilling its obligation under the contract of carriage with respect to the transport
of passengers and the delivery of their baggage, such delay was justified by the paramount
consideration of ensuring the safety of its passengers. It likewise maintains that its
employees treated private respondents fairly and with courtesy to the extent of acceding to
most of their demands in order to mitigate the inconvenience occasioned by the measures
undertaken by the airline to ensure passenger safety.
The Court has time and again ruled, and it cannot be over-emphasized, that a contract of air
carriage generates a relation attended with a public duty and any discourteous conduct on
the part of a carrier's employee toward a passenger gives the latter an action for damages
and, more so, where there is bad faith.
It is settled that bad faith must be duly proved and not merely presumed. The existence of
bad faith, being a factual question, and the Supreme Court not being a trier of facts, the
findings thereon of the trial court as well as of the Court of Appeals shall not be disturbed on
appeal and are entitled to great weight and respect. Said findings are final and conclusive
upon the Supreme Court except, inter alia, where the findings of the Court of Appeals and
the trial court are contrary to each other.
It is evident that the issues raised in this petition are the correctness of the factual findings of
the Court of Appeals of bad faith on the part of petitioner and the award of damages against
it. This Court has consistently held that the findings of the Court of Appeals and the other
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lower courts are as a rule binding upon it, subject to certain exceptions created by case law.
As nothing in the record indicates any of such exceptions, the factual conclusions of the
appellate court must be affirmed.
Court of Appeals’ findings:
As earlier noted, the off-loading of appellees' baggag(e) was done in bad faith because it was
not really for the purpose of complying with weight limitations but to give undue preference
to newly-loaded baggag(e) in Honolulu. This was followed by another mishandling of said
baggag(e) in the twice-cancelled connecting flight from Cebu to Surigao. Appellees' sad
experience was further aggravated by the misconduct of appellant's personnel in Cebu, who
lied to appellees in denying their request to be billeted at Cebu Plaza Hotel.
19. PHILIPPINE AIRLINES vs. LOPEZ, JR.
FACTS:
Lopez claimed that PAL had unjustifiably downgraded his seat from business to economy
class in his return flight from Bangkok to Manila last November 30, 1991, and that, in view
thereof, PAL should be directed to pay him moral damages of at least P100,000, exemplary
damages of at least P20,000, attorney's fees in the sum of P30,000, as well as the costs of
suit.
To support his claim, Lopez averred that he purchased a Manila-Hongkong-Bangkok-Manila
PAL business class ticket and that his return flight to Manila was confirmed by PAL's booking
personnel in Bangkok on November 26, 1991. He also mentioned that he was surprised to
learn during his check-in for the said return flight that his status as business class passenger
was changed to economy class, and that PAL was not able to offer any valid explanation for
the sudden change when he protested the change. Lopez added that although aggrieved, he
nevertheless took the said flight as an economy class passenger because he had important
appointments in Manila.
For its part, PAL denied any liability and claimed that whatever damage Lopez had suffered
was due to his own fault. PAL explained that the terms and conditions of the contract of
carriage required Lopez to reconfirm his booking for the Bangkok-to-Manila leg of his trip,
and that he did not protest the economy seat given to him when the change in his
accommodations was read to him by the person who received his phone reconfirmation. PAL
also asserted that Lopez did not complain against his economy seat during the check-in and
that he raised the issue only after the flight was over. Thus, PAL prayed that the case be
dismissed for lack of merit.
Regional Trial Court:
The trial court held PAL liable for damages. It said that PAL's contention that Lopez might
have thought that he was holding an economy class ticket or that he waived his right to have
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a business class seat is untenable, considering that Lopez is an experienced businessman and
a Bachelor of Science degree holder.
It also noted that the following showed that PAL's employees had been negligent in booking
and confirming Lopez's travel accommodations from Bangkok to Manila:
(1) the admission of PAL's booking personnel that she affixed the validation sticker on
Lopez's ticket on the basis of the passenger's name list showing that his reservation
was for an economy class seat without examining or checking the latter's ticket
during his booking validation; and
(2) the admission of PAL's check-in clerk at the Bangkok Airport that when Lopez
checked-in for his return trip to Manila, she similarly gave Lopez an economy
boarding pass based on the information found in the coupon of the ticket and the
passenger manifest without checking the latter's ticket.
The trial court said that had PAL's employees examined his ticket in those instances, the error
or oversight which might have resulted from the phoned-in booking could have been easily
rectified.
The trial court held that the inattention and lack of care on the part of the common carrier, in
this case PAL, resulting in the failure of the passenger to be accommodated in the class
contracted for amounts to bad faith or fraud, making it liable for damages. The trial court
likewise awarded attorney's fees in favor of Lopez after noting that Lopez was forced to
litigate in order to assert his rights.
Court of Appeals:
The Court of Appeals affirmed in toto the trial court's decision after having been fully
convinced of the negligence of PAL's employees and after finding PAL's defenses to be
unworthy of belief and contrary to common observation and experience.
ISSUE:
Did the Court of Appeals err in awarding moral damages, exemplary damages and attorney's
fees in favor of Lopez in view of the alleged absence of fraud or bad faith of PAL?
RULING:
YES. We had nevertheless carefully reviewed the records of this case and found no
compelling reason to depart from the uniform factual findings of the trial court and the Court
of Appeals that: (1) it was the negligence of PAL which caused the downgrading of the seat of
Lopez; and (2) the aforesaid negligence of PAL amounted to fraud or bad faith, considering
our ruling in Ortigas.
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CONTRACT OF CARRIAGE/NOMINAL DAMAGES
20. ALITALIA vs. IAC, ET AL
FACTS:
Dr. Felipa Pablo, an associate professor in the University of the Philippines 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 in Italy in view of her specialized knowledge in “foreign
substances in food and the agriculture environment”. She would be the second speaker on
the first day of the meeting.
Dr. Pablo booked passage on petitioner Alitalia. She arrived in Milan on the day before the
meeting, but was told that her luggage was delayed and was in a succeeding flight from
Rome to Milan. The luggage included her materials for the presentation. The succeeding
flights did not carry her luggage. Desperate, she went to Rome to try to locate the luggage
herself, but to no avail. She returned to Manila without attending the meeting. She
demanded reparation for the damages. She rejected Alitalia’s offer of free airline tickets and
commenced an action for damages. As it turned out, the luggage was actually forwarded to
Ispra, but only a day after the scheduled appearance. It was returned to her after 11 months.
The trial court ruled in favor of Dr. Pablo, and this was affirmed by the Court of Appeals.
ISSUE:
Whether Dr. Pablo is entitled to nominal damages
RULING:
YES. There can be no doubt that Dr. Pablo underwent profound distress and anxiety, which
gradually turned to panic and finally despair, from the time she learned that her suitcases
were missing up to the time when, having gone to Rome, she finally realized that she would
no longer be able to take part in the conference. As she herself put it, she "was really
shocked and distraught and confused."
Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the
circumstances be restricted to that prescribed by the Warsaw Convention for delay in the
transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to her luggage. As
already mentioned, her baggage was ultimately delivered to her in Manila, tardily but safely.
She is however entitled to nominal damages — which, as the law says, is adjudicated in order
that a right of the plaintiff, which has been violated or invaded by the defendant, may be
vindicated and recognized, and not for the purpose of indemnifying the plaintiff for any loss
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suffered — and this Court agrees that the respondent Court of Appeals correctly set the
amount thereof at P40,000.00.
As to the purely technical argument that the award to her of such nominal damages is
precluded by her omission to include a specific claim therefor in her complaint, it suffices to
draw attention to her general prayer, following her plea for moral and exemplary damages
and attorney's fees, "for 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.
Besides, petitioner should have realized that the explicit assertion, and proof, that Dr. Pablo's
right had been violated or invaded by it — absent any claim for actual or compensatory
damages, the prayer thereof having been voluntarily deleted by Dr. Pablo upon the return to
her of her baggage — necessarily raised the issue of nominal damages.
This Court also agrees that respondent Court of Appeals correctly awarded attorney's fees to
Dr. Pablo, and the amount of P5,000.00 set by it is reasonable in the premises. The law
authorizes recovery of attorney's fees inter alia where, 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," or "where the court deems it just and equitable."
21. SAVELLANO, ET AL vs. NORTHWEST AIRLINES
When, as a result of engine malfunction, a commercial airline is unable to ferry its passengers
on the original contracted route, it nonetheless has the duty of fulfilling its responsibility of
carrying them to their contracted destination on the most convenient route possible. Failing
in this, it cannot just unilaterally shuttle them, without their consent, to other routes or
stopping places outside of the contracted sectors.
However, moral damages cannot be awarded without proof of the carrier’s 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 nominal damages may be allowed under the
circumstances in the case herein.
FACTS:
Petitioners Victorino, Virginia and Deogracias, all surnamed Savellano, were on board
Northwest Airlines Flight 27 bound for Manila when the pilot made an emergency landing in
Seattle because of a fire which has started in one of plane’s engine. As a result, they were
billeted at a hotel nearby and instructed that they can use the same boarding passes the next
day. The family received a call, that midnight, advising them to be at the airport by 7:00 a.m.
for their departure, thus making them skip breakfast. When petitioners reached the airport,
they were belatedly advised that instead of flying to Manila, they would have to board NW
Flight bound to Los Angeles for a connecting flight to Manila. In Los Angeles, they found out
that no flight was posted bound for Manila, thus it was only after complaining that the flight
was changed to include Manila. On arrival at the Manila airport, Col. Delfin teased the
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petitioners for taking the longer and tiresome route to the Philippines. Thus, they filed a
complaint for damages because they suffered inconvenience, embarrassment, and
humiliation for taking a longer route.
Regional Trial Court:
The RTC ruled in favor of and granted moral damages to petitioners because they were
excluded from the Seattle-Tokyo-Manila flight to accommodate several Japanese passengers
for Japan.
Court of Appeals:
On appeal, the CA reversed the ruling of the lower court and held that there was no basis for
the award of moral damages finding no bad faith, negligence or malice in transporting
petitioners via the Seattle-Los Angeles-Seoul-Manila route.
ISSUE:
Whether or not petitioners are entitled to moral damages as a consequence of the breach by
respondent airline of its air-carriage contract?
RULING:
The Supreme Court was not convinced when petitioners imputed oppression, discrimination,
recklessness and malevolence to respondent. There is no persuasive evidence that they were
maliciously singled out to fly the Seattle-Los Angeles-Seoul-Manila route. It appears that the
passengers of the distressed flight were randomly divided into two groups. One group was
made to take the Tokyo-Manila flight; and the other, 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 only the passengers’ final destination.
The records show that respondent was impelled by sincere motives to get petitioners to their
final destination by whatever was the most expeditious course - in its judgment, if not in
theirs. Though they claim that they were not accommodated on Flight 27 from Seattle to
Tokyo because respondent had taken on Japanese passengers, petitioners failed to present
convincing evidence to back this allegation. In the absence of convincing evidence,
respondent could not be found guilty of bad faith. Petitioners have failed to show
convincingly that they were rerouted 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 needs to be proved by the party alleging it. In the absence of bad faith, ill will,
malice or wanton conduct, respondent cannot be held liable for moral damages. Article 2219
of the Civil Code enumerates the instances in which moral damages may be awarded.
In a breach of contract, such damages are not awarded if the defendant is not shown to have
acted fraudulently or with malice or bad faith.
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Insufficient to warrant the award of moral damages is the fact that complainants suffered
economic hardship, or that they worried and experienced mental anxiety.
PRESENCE OF BAD FAITH
22. AIR FRANCE vs. BONIFACIO H. GILLEGO (SUBSTITUTED BY HIS SURVIVING HEIRS
REPRESENTED BY DOLORES P. GILLEGO)
Petitioner's 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.
FACTS:
Sometime in April 1993, respondent Bonifacio H. Gillego, then 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-Parliamentary Conference Symposium on Parliament Guardian of Human
Rights to be held in Budapest, Hungary and Tokyo, Japan from May 19 to 22, 1993. The
Philippines is a member of the Inter-Parliamentary Union which organized the event.
On May 16, 1993, respondent left Manila on board petitioner Air 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, 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. 2024 and also a new
baggage claim stub for his checked-in luggage.
However, upon arriving in Budapest, respondent was unable to locate his luggage at the
claiming section. He sought assistance from petitioners counter at the airport where
petitioner’s representative verified from their computer that he had indeed a checked-in
luggage. He was advised to just wait for his luggage 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 petitioner’s representatives despite follow-up inquiries by
respondent.
Upon his return to the Philippines, respondent’s lawyer immediately wrote petitioner’s
Station Manager complaining about the lost luggage and the resulting damages he suffered
while in Budapest.
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On July 13, 1993, respondent filed a complaint for damages against the petitioner alleging
that by reason of its negligence and breach of obligation to transport and deliver his luggage,
respondent suffered inconvenience, serious 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, aggravated by the fact that he failed to take his regular medication,
respondent had to be taken to a medical clinic in Tokyo, Japan for emergency treatment.
Petitioner averred that it has taken all necessary measures to avoid loss of respondents
baggage, the contents of which respondent did not declare, and that it has no intent to cause
such loss, much less knew that such loss could occur. The loss of respondent’s luggage is due
to or occasioned by force majeure or fortuitous event or other causes beyond the carriers
control. Diligent, sincere and timely efforts were exerted by petitioner to locate respondents
missing luggage and attended to his problem with utmost courtesy, concern and dispatch.
Petitioner further asserted that it exercised due diligence in the selection and supervision of
its employees and acted in good faith in denying respondents demand for damages. The
claims for actual, moral and exemplary damages and attorney’s fees therefore have no basis
in fact and in law, and are, moreover speculative and unconscionable.
Regional Trial Court:
The trial court found there was gross negligence on the part of petitioner which failed to
retrieve respondent’s checked-in luggage up to the time of the filing of the complaint and as
admitted in its answer, ignored respondents repeated follow-ups. It likewise found petitioner
guilty of willful misconduct as it persistently disregarded the rights of respondent who was
no ordinary individual but a high government official.
Court of Appeals:
The CA noted that in the memorandum submitted by petitioner before the trial court it was
mentioned that respondent’s luggage was eventually found and delivered to him, which was
not denied by respondent and thus resulted in the withdrawal of the claim for actual
damages. As to the trial courts finding of gross negligence, bad faith and willful misconduct
which justified the award of moral and exemplary damages, the CA sustained the same.
ISSUE:
Whether or not there was gross negligence on the part of Air France to warrant the award of
moral damages
RULING:
In awarding moral damages for breach of contract of carriage, the breach must be wanton
and deliberately injurious or the one responsible acted fraudulently or with malice or bad
faith. Not every case of mental anguish, fright or serious anxiety calls for the award of moral
damages. Where in breaching the 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
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consequences of the breach of the obligation which the parties had foreseen or could have
reasonably foreseen. In such a case the liability does not include moral and exemplary
damages.
Bad faith should be established by clear and convincing evidence. The settled rule is that the
law always presumes good faith such that any person who seeks to be awarded damages due
to the acts of another has the burden of proving that the latter acted in bad faith or with ill
motive.
We hold that the trial and appellate courts did not err in finding that petitioner 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 identified or authenticated by
the airline station representative in Budapest who initiated and inputed the said entries.
Furthermore, this Court cannot accept the convenient excuse given by petitioner that
respondent should be faulted in 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
necessities for his stay in a foreign land and his reference materials for a speaking
engagement, would not give an information so vital such as his hotel address and contact
number to the airline counter where he had promptly and frantically filed his complaint. And
even assuming arguendo that his Philippine address and contact number were the only
details respondent had provided for the PIR, still there was no explanation as to why
petitioner never communicated with respondents concerning his lost baggage long after
respondent had already returned to the Philippines. While the missing luggage was
eventually recovered, it was returned to respondent only after the trial of this case.
While respondent failed to cite any act of discourtesy, discrimination or rudeness by
petitioner’s employees, this did not make his loss and moral suffering insignificant and less
deserving of compensation. In repeatedly ignoring respondents inquiries, petitioner’s
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.
ABSENCE OF BAD FAITH
23. PHILIPPINE AIR LINES vs. MIANO
The prerequisite for the award of exemplary damages in cases of contract or quasi-contract is
that the defendant acted in wanton, fraudulent, reckless, oppressive, or malevolent manner.
The undisputed facts do not so warrant the characterization of the action of petitioner.
FACTS:
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TRANSPORTATION LAW | ATTY. CAPANAS | COMPILATION OF CASE DIGESTS – PART 5 (AVIATION LAW)
On August 31, 1988, private respondent took petitioner's flight bound for Germany. He had
an immediate onward connecting flight via Lufthansa flight to Vienna, Austria. At the NAIA,
he checked-in one brown suitcase but did not declare a higher valuation. He claimed that his
suitcase contained money, documents, one Nikkon camera with zoom lens, etc. Upon private
respondent's arrival at Vienna, his checked-in baggage was missing. He reported the matter
to the authorities and after three (3) hours of waiting, he proceeded to Piestany,
Czechoslovakia. Eleven (11) days after, his suitcase was delivered to him in Piestany. Private
respondent instituted an action for damages before the RTC Makati which rendered a
decision awarding private respondent moral and exemplary damages and atty’s fees.
ISSUE:
WON the RTC erred in awarding moral and exemplary damages to private respondent
RULING:
Assailed Decision MODIFIED deleting the award of moral and exemplary damages and
attorney's fees.
In breach of contract of carriage by air, moral damages are awarded only if the defendant
acted fraudulently or in bad faith. The trial court erred in awarding moral damages to private
respondent. The established facts evince that petitioner's late delivery of the baggage for
eleven (11) days was not motivated by ill will or bad faith. The SC neither sustained the
award of exemplary damages. The prerequisite for the award of exemplary damages in cases
of contract or quasi-contract is that the defendant acted in wanton, fraudulent, reckless,
oppressive, or malevolent manner. The undisputed facts do not so warrant the
characterization of the action of petitioner.
The award of attorney's fees must also be disallowed for lack of legal leg to stand on.
Needless to say, award of attorney’s fees must be deleted where the award of moral and
exemplary damages are eliminated.
WAIVER OF APPLICABILITY
24. LUFTHANSA GERMAN AIRLINES vs. IAC, ET AL
Petitioner waived the applicability of the Warsaw Convention to the case at bar when it
offered private respondent a higher amount than that which is provided in the said law.
FACTS:
On January 21, 1979, respondent Henry H. Alcantara shipped thirteen (13) pieces of luggage
through petitioner Lufthansa from Teheran to Manila as evidenced by Lufthansa Air Waybill
No. 220-9776-2733. The Air Waybill discloses that the actual gross weight of the thirteen (13)
EH403
pieces of luggage is 180 kilograms. Respondent Henry H. Alcantara did not declare an
inventory of the contents or the value of the luggages when he delivered them to Lufthansa.
On March 3, 1979, the thirteen (13) pieces of luggage were boarded in one of Lufthansa's
flights which arrived in Manila on the same date. After the luggages arrived in Manila, the
consignee, respondent Teresita Alcantara, was able to claim from the cargo broker Philippine
Skylanders, Inc. on March 6, 1979 only twelve (12) out of the thirteen (13) pieces of luggage
with a total weight of 174 kilograms.
The private respondents advised Lufthansa of the loss of one of the luggages and of the
contents thereof. Petitioner Lufthansa sent telex tracing messages to different stations and
to the Philippine Airlines which actually carried the cargo. But all efforts in tracing the missing
luggage were fruitless.
Since efforts to trace the missing luggage yielded negative results, Lufthansa informed Henry
Alcantara accordingly and advised him to file a claim invoice.
On September 24, 1979, the private respondents wrote the petitioner demanding the
production of the missing luggage within then (10) days from receipt. Since the petitioner did
not comply with said demand, the private respondents filed a complaint dated May 7, 1980,
for breach of contract with damages against the petitioner before the Court of First Instance
of Manila.
ISSUE:
Whether or not the private respondents are entitled to an award of damages beyond the
liability set forth in the Warsaw Convention and in the Airwaybill of Lading
RULING:
YES. Under the circumstances, there appears to be no cogent reason to disturb the factual
findings of both the trial court and the Court of Appeals.
Furthermore, the respondent court found that petitioner waived the applicability of the
Warsaw Convention to the case at bar when it offered private respondent a higher amount
than that which is provided in the said law and failed to raise timely objections during the
trial when questions and answers were brought out regarding the actual claims and damages
sustained by Alcantara which were even subjected to lengthy cross examination by
Lufthansa's counsel.
25. BRITISH AIRWAYS vs. CA
BA had waived the defense of limited liability when it allowed Mahtani to testify as to the
actual damages he incurred due to the misplacement of his luggage, without any objection.
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FACTS:
On April 16, 1989, Mahtani decided to visit his relatives in Bombay, India. In anticipation of
his visit, he obtained the services of a certain Mr. Gumar to prepare his travel plans.
Since BA had no direct flights from Manila to Bombay, Mahtani had to take a flight to
Hongkong via PAL, and upon arrival in Hongkong he had to take a connecting flight to
Bombay on board BA.
Prior to his departure, Mahtani checked in at the PAL counter in Manila his two pieces of
luggage containing his clothings and personal effects, confident that upon reaching
Hongkong, the same would be transferred to the BA flight bound for Bombay.
Unfortunately, when Mahtani arrived in Bombay he discovered that his luggage was missing
and that upon inquiry from the BA representatives, he was told that the same might have
been diverted to London. After patiently waiting for his luggage for one week, BA finally
advised him to file a claim by accomplishing the Property Irregularity Report.
Back in the Philippines, specifically on June 11, 1990, Mahtani filed his complaint for damages
and attorney’s fees against BA and Mr. Gumar before the trial court.
Regional Trial Court:
After appropriate proceedings and trial, on March 4, 1993, the trial court rendered its
decision in favor of Mahtani:
WHEREFORE, premises considered, judgment is rendered for the plaintiff and against the
defendant for which defendant is ordered to pay plaintiff the sum of Seven Thousand
(P7,000.00) Pesos for the value of the two (2) suit cases; Four Hundred U.S. ($400.00) Dollars
representing the value of the contents of plaintiffs luggage; Fifty Thousand (P50,000.00)
Pesos for moral and actual damages and twenty percent (20%) of the total amount imposed
against the defendant for attorney’s fees and costs of this action.
Court of Appeals:
Affirmed the decision of the RTC
ISSUE:
Whether or not the award for compensatory damages is proper
RULING:
YES. BA asserts that the award of compensatory damages in the separate sum of P7,000.00
for the loss of Mahtani’s two pieces of luggage was without basis since Mahtani in his
complaint stated the following as the value of his personal belongings:
EH403
1. personal belonging - - - - - - - - - - - - - - P10,000.00
2. gifts for his parents and relatives - - - - - $5,000.00
Moreover, he failed to declare a higher valuation with respect to his luggage, a condition
provided for in the ticket, which reads:
Liability for loss, delay, or damage to baggage is limited unless a higher value is declared in
advance and additional charges are paid:
1. For most international travel (including domestic corporations of international
journeys) the liability limit is approximately U.S. $9.07 per pound (U.S. $20.00) per
kilo for checked baggage and U.S. $400 per passenger for unchecked baggage.
Admittedly, in a contract of air carriage a declaration by the passenger of a higher value is
needed to recover a greater amount pursuant to Article 22(1) of the Warsaw Convention.
American jurisprudence provides that an air carrier is not liable for the loss of baggage in an
amount in excess of the limits specified in the tariff which was filed with the proper
authorities, such tariff being binding on the passenger regardless of the passenger’s lack of
knowledge thereof or assent thereto. This doctrine is recognized in this jurisdiction.
In addition, we have held that benefits of limited liability are subject to waiver such as when
the air carrier failed to raise timely objections during the trial when questions and answers
regarding the actual claims and damages sustained by the passenger were asked.
Given the foregoing postulates, the inescapable conclusion is that BA had waived the defense
of limited liability when it allowed Mahtani to testify as to the actual damages he incurred
due to the misplacement of his luggage, without any objection.
Indeed, it is a well-settled doctrine that where the proponent offers evidence deemed by
counsel of the adverse party to be inadmissible for any reason, the latter has the right to
object. However, such right is a mere privilege which can be waived. Necessarily, the
objection must be made at the earliest opportunity, lest silence when there is opportunity to
speak may operate as a waiver of objections. BA has precisely failed in this regard.
NOTICE OF LOSS
26. FEDERAL EXPRESS CORP. vs. AMERICAN HOME ASSURANCE CO., ET AL
Notice is a condition precedent, and the carrier is not liable if notice is not given in accordance
with the stipulation. Failure to comply with such a stipulation bars recovery for the loss or
damage suffered.
FACTS:
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Shipper SMITHKLINE USA delivered to carrier Burlington Air Express (BURLINGTON), an agent
of [Petitioner] Federal Express Corporation, a shipment of 109 cartons of veterinary
biologicals for delivery to consignee SMITHKLINE and French Overseas Company in Makati
City. The shipment was covered by Burlington Airway Bill No. 11263825 with the words,
‘REFRIGERATE WHEN NOT IN TRANSIT’ and ‘PERISHABLE’ stamp marked on its face. That
same day, Burlington insured the cargoes with American Home Assurance Company (AHAC).
The following day, Burlington turned over the custody of said cargoes to FEDEX which
transported the same to Manila.
The shipments arrived in Manila and were immediately stored at [Cargohaus Inc.’s]
warehouse. Prior to the arrival of the cargoes, FEDEX informed GETC Cargo International
Corporation, the customs broker hired by the consignee to facilitate the release of its cargoes
from the Bureau of Customs, of the impending arrival of its client’s cargoes.
12 days after the cargoes arrived in Manila, DIONEDA, a non-licensed custom’s broker who
was assigned by GETC, found out, while he was about to cause the release of the said
cargoes, that the same [were] stored only in a room with 2 air conditioners running, to cool
the place instead of a refrigerator. DIONEDA, upon instructions from GETC, did not proceed
with the withdrawal of the vaccines and instead, samples of the same were taken and
brought to the Bureau of Animal Industry of the Department of Agriculture in the Philippines
by SMITHKLINE for examination wherein it was discovered that the ‘ELISA reading of
vaccinates sera are below the positive reference serum.’
As a consequence of the foregoing result of the veterinary biologics test, SMITHKLINE
abandoned the shipment and, declaring ‘total loss’ for the unusable shipment, filed a claim
with AHAC through its representative in the Philippines, the Philam Insurance Co., Inc.
(PHILAM) which recompensed SMITHKLINE for the whole insured amount. Thereafter,
PHILAM filed an action for damages against the FEDEX imputing negligence on either or both
of them in the handling of the cargo.
Trial ensued and ultimately concluded with the FEDEX being held solidarily liable for the loss.
Aggrieved, petitioner appealed to the CA. The appellate court ruled in favor of PHILAM and
held that the shipping Receipts were a prima facie proof that the goods had indeed been
delivered to the carrier in good condition.
ISSUE:
Is FEDEX liable for damage to or loss of the insured goods
RULING:
NO.
Prescription of Claim:
EH403
From the initial proceedings in the trial court up to the present, petitioner has tirelessly
pointed out that respondents’ claim and right of action are already barred. Indeed, this fact
has never been denied by respondents and is plainly evident from the records.
Airway Bill No. 11263825 issued by Burlington as agent of petitioner, states:
“6. No action shall be maintained in the case of damage to or partial loss of the shipment
unless a written notice, sufficiently describing the goods concerned, the approximate date of
the damage or loss, and the details of the claim, is presented by shipper or consignee to an
office of Burlington within (14) days from the date the goods are placed at the disposal of the
person entitled to delivery, or in the case of total loss (including non-delivery) unless
presented within (120) days from the date of issue of the [Airway Bill]."
Relevantly, petitioner’s airway bill states:
"12./12.1 The person entitled to delivery must make a complaint to the carrier in writing in
the case:
12.1.1 of visible damage to the goods, immediately after discovery of the damage and at the
latest within fourteen (14) days from receipt of the goods; xxx"
Article 26 of the Warsaw Convention, on the other hand, provides:
"(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 3 days from the date of receipt in
the case of baggage and 7 days from the date of receipt in the case of goods.
(3) Every complaint must be made in writing upon the document of transportation or by
separate notice in writing dispatched within the times aforesaid.
(4) Failing complaint within the times aforesaid, no action shall lie against the carrier, save in
the case of fraud on his part.”
Condition Precedent:
In this jurisdiction, the filing of a claim with the carrier within the time limitation therefor
actually constitutes a condition precedent to the accrual of a right of action against a carrier
for loss of or damage to the goods. The shipper or consignee must allege and prove the
fulfillment of the condition. If it fails to do so, no right of action against the carrier can
accrue in favor of the former. The aforementioned requirement is a reasonable condition
precedent; it does not constitute a limitation of action.
The requirement of giving notice of loss of or injury to the goods is not an empty formalism.
The fundamental reasons for such a stipulation are (1) to inform the carrier that the cargo
has been damaged, and that it is being charged with liability therefor; and (2) to give it an
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opportunity to examine the nature and extent of the injury. “This protects the carrier by NOA moved to dismiss the complaint on the ground of lack of jurisdiction. Citing the above-
affording it an opportunity to make an investigation of a claim while the matter is fresh and quoted article, it contended that the complaint could be instituted only in the territory of
easily investigated so as to safeguard itself from false and fraudulent claims.” one of the High Contracting Parties, before:

When an airway bill -- or any contract of carriage for that matter -- has a stipulation that 1. the court of the domicile of the carrier;
requires a notice of claim for loss of or damage to goods shipped and the stipulation is not 2. the court of its principal place of business;
complied with, its enforcement can be prevented and the liability cannot be imposed on the 3. the court where it has a place of business through which the contract had been
carrier. To stress, notice is a condition precedent, and the carrier is not liable if notice is not made;
given in accordance with the stipulation. Failure to comply with such a stipulation bars 4. the court of the place of destination.
recovery for the loss or damage suffered.
The private respondent contended that the Philippines was not its domicile nor was this its
Being a condition precedent, the notice must precede a suit for enforcement. In the present principal place of business. Neither was the petitioner's ticket issued in this country nor was
case, there is neither an allegation nor a showing of respondents compliance with this his destination Manila but San Francisco in the United States.
requirement within the prescribed period. While respondents may have had a cause of
action then, they cannot now enforce it for their failure to comply with the aforesaid Regional Trial Court:
condition precedent. Granted the motion and dismissed the case.

JURISDICTION Court of Appeals:

Affirmed the decision of the RTC
27. SANTOS III vs. NORTHWEST ORIENT AIRLINES, ET AL
ISSUE:
It is the "destination" and not an "agreed stopping place" that controls for purposes of
Whether or not the Philippine Courts have jurisdiction over this case
ascertaining jurisdiction under the Convention.
RULING:
FACTS:
NO.
The petitioner is a minor and a resident of the Philippines. Private respondent Northwest
Orient Airlines (NOA) is a foreign corporation with principal office in Minnesota, U.S.A. and A. The petitioner claims that the lower court erred in not ruling that Article 28(1) of
licensed to do business and maintain a branch office in the Philippines.
the Warsaw Convention is a rule merely of venue and was waived by defendant
when it did not move to dismiss on the ground of improper venue – WRONG. IT
On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San Francisco.
RAISED THE ISSUE ON IMPROPER VENUE.
U.S.A., for his flight from San Francisco to Manila via Tokyo and back. The scheduled
departure date from Tokyo was December 20, 1986. No date was specified for his return to
By its own terms, the Convention applies to all international transportation of persons
San Francisco. performed by aircraft for hire.
On December 19, 1986, the petitioner checked in at the NOA counter in the San Francisco Whether the transportation is "international" is determined by the contract of the parties,
airport for his scheduled departure to Manila. Despite a previous confirmation and re-
which in the case of passengers is the ticket. When the contract of carriage provides for the
confirmation, he was informed that he had no reservation for his flight from Tokyo to Manila. transportation of the passenger between certain designated terminals "within the territories
He therefore had to be wait-listed.
of two High Contracting Parties," the provisions of the Convention automatically apply and
exclusively govern the rights and liabilities of the airline and its passenger.
On March 12, 1987, the petitioner sued NOA for damages in the Regional Trial Court of
Makati. Since the flight involved in the case at bar is international, the same being from the United
States to the Philippines and back to the United States, it is subject to the provisions of the
NOA’s argument:
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Warsaw Convention, including Article 28(1), which enumerates the four places where an
action for damages may be brought.
Here the matter is governed by the Warsaw Convention, jurisdiction takes on a dual concept.
Jurisdiction in the international sense must be established in accordance with Article 28(1) of
the Warsaw Convention, following which the jurisdiction of a particular court must be
established pursuant to the applicable domestic law. Only after the question of which court
has jurisdiction is determined will the issue of venue be taken up. This second question shall
be governed by the law of the court to which the case is submitted.
We agree that even granting arguendo that Article 28(1) is a venue and not a jurisdictional
provision, dismissal of the case was still in order. The respondent court was correct in
affirming the ruling of the trial court on this matter, thus:
True it is that NOA averred in its MOTION TO DISMISS that the ground thereof is "the Court
has no subject matter jurisdiction to entertain the Complaint" which SANTOS considers as
equivalent to "lack of jurisdiction over the subject matter . . ." However, the gist of NOA's
argument in its motion is that the Philippines is not the proper place where SANTOS could
file the action — meaning that the venue of the action is improperly laid. Even assuming
then that the specified ground of the motion is erroneous, the fact is the proper ground of the
motion — improper venue — has been discussed therein.
B. The petitioner claims that the lower court erred in not ruling that under Article
28(1) of the Warsaw Convention, this case was properly filed in the Philippines,
because Manila was the destination of the plaintiff – WRONG. SAN FRANCISCO
WAS THE DESTINATION, NOT MANILA.
The place of destination, within the meaning of the Warsaw Convention, is determined by
the terms of the contract of carriage or, specifically in this case, the ticket between the
passenger and the carrier. Examination of the petitioner's ticket shows that his ultimate
destination is San Francisco. Although the date of the return flight was left open, the
contract of carriage between the parties indicates that NOA was bound to transport the
petitioner to San Francisco from Manila. Manila should therefore be considered merely an
agreed stopping place and not the destination.
Article 1(2) also draws a distinction between a "destination" and an "agreed stopping place."
It is the "destination" and not an "agreed stopping place" that controls for purposes of
ascertaining jurisdiction under the Convention.
The contract is a single undivided operation, beginning with the place of departure and
ending with the ultimate destination. The use of the singular in this expression indicates the
understanding of the parties to the Convention that every contract of carriage has one place
of departure and one place of destination. An intermediate place where the carriage may be
broken is not regarded as a "place of destination."
EH403
C. The petitioner claims that the lower court erred in not ruling that under Art. 28(1)
of the Warsaw Convention, this case was properly filed in the Philippines because
the defendant has its domicile in the Philippines – WRONG. IT’S THE DOMICILE OF
THE CARRIER.
Notably, the domicile of the carrier is only one of the places where the complaint is allowed
to be filed under Article 28(1). By specifying the three other places, to wit, the principal place
of business of the carrier, its place of business where the contract was made, and the place
of destination, the article clearly meant that these three other places were not
comprehended in the term "domicile."
28. LOPEZ vs. NORTHWEST AIRLINES, INC., ET AL
FACTS:
Petitioner purchased from the private respondent Northwest Airlines, Inc. (NWA) in New
York Ticket No. 8443546771 with bookings for an airplane flight covering the following
destinations: "New York-Seattle-Manila-Tokyo-New York."
It appears that the petitioner made the trip to the Philippines on the New York-Seattle-
Manila leg of her ticket and that her trip back to New York via Tokyo was confirmed by the
private respondent for 10 July 1987. However, when she went to the latter’s representative
in the Philippines on 7 July 1987, or barely two (2) days before the date of the flight, to
reconfirm her booking, she was informed that she could not be accommodated in view of its
cancellation. Despite her insisting that she be allowed to take the 10 July 1987 flight as
stipulated in her ticket, private respondent remained adamant; it scheduled her flight for 11
July 1987.
Consequently, the petitioner filed a complaint for damages against the private respondent
before the Regional Trial Court (RTC) of Makati, Metro Manila alleging that in bad faith and
utter disregard to her rights as well as its own obligation under the contract of carriage, the
private respondent unjustly and without good and/or valid cause cancelled her
accommodation in its scheduled flight for 10 July 1987; as a result thereof, she supposedly
suffered mental anguish, embarrassment, humiliation and great inconvenience.
On 29 July 1988, private respondent filed a motion to dismiss the complaint on the ground
that the court has no jurisdiction over the subject matter of the action under the Warsaw
Convention.
Regional Trial Court:
Denied the Motion to Dismiss
In the Court of Appeals:
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Private respondent filed with the Court of Appeals on 24 November 1988 a special civil action
for certiorari to set aside the aforesaid order.
Private respondent insisted that the trial court is precluded from exercising jurisdiction over
the case pursuant to Article 28(1) of the Warsaw Convention which provides:
"ARTICLE 28(1). An action for damages must be brought, at the option of the plaintiff, in the
territory of one of the High Contracting Parties, either before the court of the domicile of the
carrier or of his principal place of business, or where he has a place of business through which
the contract has been made, or before the court at the place of destination."
The Court of Appeals DENIED the petition.
This denial is anchored on the appellate court’s view that Article 28(1) of the Warsaw
Convention prescribes the venue for the different actions for damages enumerated in
Articles 17, 18 and 19 therein, and does not cover an action for damages arising out of the
carrier’s absolute refusal, in bad faith, to comply with the contract of carriage.
Said court further maintained that Article 28(1) was never meant to exempt a carrier from
liability arising from breaches of contract not enumerated in said Articles 17, 18 and 19. It
invoked the decision in Pan American World Airways, Inc. v. Intermediate Appellate Court,
the factual background of which is similar to the instant case, wherein this Court affirmed the
decision of the appellate court awarding damages to the private respondent therein.
Reliance was likewise placed on its own decision in KLM Royal Dutch Airlines v. Tamayo, a
case wherein the Court of Appeals ruled that even "off-loading or bumping off" does not
come under the contemplation of Article 28(1) just as Article 28 thereof should not be
interpreted to be a rule on jurisdiction but of mere venue.
In the Supreme Court:
Private respondent filed with this Court a petition for review under Rule 45 of the Revised
Rules of Court. In the Resolution of 21 March 1990, this Court dismissed the petition for the
"failure to sufficiently show that the Court of Appeals had committed any reversible error in
the questioned judgment."
Private respondent sought to have this adverse resolution reconsidered. On 9 May 1990,
however, this Court denied the motion with finality, "the basic issues raised therein having
previously been duly considered and passed upon by this Court in the aforesaid resolution
and no substantial matter having been adduced to warrant the reconsideration sought."
ISSUE:
Whether or not the Court has jurisdiction over the case
EH403
RULING:
YES. It is therefore not clear to Us whether the said complaint contains specific allegations
which may not entirely bring the subject matter within the broad confines of Article 28(1) of
the Warsaw Convention, or whether the private respondent (a) had pleaded in its Answer
lack of jurisdiction as one of its affirmative defenses, or (b) had set up a counterclaim
invoking the jurisdiction of the trial court for specific reliefs in its favor as a consequence of
the filing of the case.
What is sufficiently certain is that private respondent participated in the said case by
presenting and offering its evidence, and advanced no objection to the trial court’s order
requiring the parties to submit their evidence within thirty (30) days from 15 January 1992
and declaring the case submitted for decision upon the lapse of the said thirty (30) day
period on 14 February 1992.
The trial court had ninety (90) days from 15 February 1992 — or until 15 May 1992 — within
which to decide the case. There was nothing more for the trial court to do except decide the
case especially since its 90-day mandatory period to do so had already expired. Doubtless, in
view of the decision of the Court of Appeals in CA-G.R. SP No. 16174 and Our resolution in
G.R. No. 91393, it had at least prima facie jurisdiction over the case and, therefore, the
rendition of judgment therein was undeniably within its authority.
Jurisdiction over the subject matter is determined by the allegations in the complaint and is
not made to depend upon the allegations in the answer or in the motion to dismiss.
Jurisdiction continues until the case is finally terminated. And while jurisdiction over the
subject matter of the case may be raised at any stage of the proceedings as the same is
conferred by law, it is nevertheless settled that a party may be barred from raising it on the
ground of laches or estoppel.
It is clear that the decision in Santos v. Northwest Orient Airlines cannot be invoked to
peremptorily oust the trial court of jurisdiction.
For one, there is no indubitable showing that indeed, the factual antecedents in Santos are
substantially the same as those obtaining in this case. Whether there exists such an identity
would depend largely on the findings of fact which the trial court must make in its decision in
Civil Case No. 88-1014. It is quite evident that the trial court has not yet endeavored to do so.
Moreover, it behooves the trial court to determine whether the private respondent is
already barred from raising the issue of jurisdiction because of estoppel or laches.
Finally, the trial court should have seriously taken into consideration the earlier case of Pan
American World Airways, Inc. v. Intermediate Appellate Court, wherein this Court affirmed
a decision of the appellate court awarding damages to the private respondent therein arising
from Pan American World Airways’ (PAN AM) refusal to accommodate the latter on PAN AM
Flight No. 431 from Sto. Domingo, Republica Dominica, to San Juan, Puerto Rico on 29 April
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1973 notwithstanding the fact that said private respondent had a confirmed plane ticket
which, she purchased from PAN AM’s office in Sto. Domingo. We have ruled in a number of
cases that posterior changes in the doctrine of this Court cannot retroactively be applied to
nullify a prior final ruling in the same proceeding where the prior adjudication was had,
whether the case should be civil or criminal in nature.
Thus, the trial court committed grave abuse of discretion amounting to lack of jurisdiction in
granting the second motion to dismiss solely on the basis of the Santos case, and in
dismissing Civil Case No. 88-1014 weeks after its period to decide the same had expired. The
Presiding Judge of Branch 65 should have denied the motion and decided the case taking into
account, however, the decision in the Santos case and the above observations.
29. LHUILLIER vs. BRITISH AIRWAYS
In the case at bench, petitioner’s place of departure was London, United Kingdom while her
place of destination was Rome, Italy. Both the United Kingdom and Italy signed and ratified
the Warsaw Convention. As such, the transport of the petitioner is deemed to be an
"international carriage" within the contemplation of the Warsaw Convention.
FACTS:
On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint for damages against
respondent British Airways before the Regional Trial Court (RTC) of Makati City.
She alleged that on February 28, 2005, she took respondent’s flight 548 from London, United
Kingdom to Rome, Italy. Once on board, she allegedly requested Julian Halliday (Halliday),
one of the respondent’s flight attendants, to assist her in placing her hand-carried luggage in
the overhead bin. However, Halliday allegedly refused to help and assist her, and even
sarcastically remarked that "If I were to help all 300 passengers in this flight, I would have a
broken back!"
Petitioner further alleged that when the plane was about to land in Rome, Italy, another
flight attendant, Nickolas Kerrigan (Kerrigan), singled her out from among all the passengers
in the business class section to lecture on plane safety. Allegedly, Kerrigan made her appear
to the other passengers to be ignorant, uneducated, stupid, and in need of lecturing on the
safety rules and regulations of the plane. Affronted, petitioner assured Kerrigan that she
knew the plane’s safety regulations being a frequent traveler. Thereupon, Kerrigan allegedly
thrust his face a mere few centimeters away from that of the petitioner and menacingly told
her that "We don’t like your attitude."
Upon arrival in Rome, petitioner complained to respondent’s ground manager and
demanded an apology. However, the latter declared that the flight stewards were "only
doing their job."
EH403
Thus, petitioner filed the complaint for damages, praying that respondent be ordered to pay
₱5 million as moral damages, ₱2 million as nominal damages, ₱1 million as exemplary
damages, ₱300,000.00 as attorney’s fees, ₱200,000.00 as litigation expenses, and cost of the
suit.
Respondent’s argument:
Respondent, by way of special appearance through counsel, filed a Motion to Dismiss4 on
grounds of lack of jurisdiction over the case and over the person of the respondent.
Respondent alleged that only the courts of London, United Kingdom or Rome, Italy, have
jurisdiction over the complaint for damages pursuant to the Warsaw Convention, Article
28(1) of which provides:
An action for damages must be brought at the option of the plaintiff, either before the court
of domicile of the carrier or his principal place of business, or where he has a place of business
through which the contract has been made, or before the court of the place of destination.
Thus, since:
a) respondent is domiciled in London;
b) respondent’s principal place of business is in London;
c) petitioner bought her ticket in Italy (through Jeepney Travel S.A.S, in Rome); and
d) Rome, Italy is petitioner’s place of destination
Then it follows that the complaint should only be filed in the proper courts of London, United
Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed for lack of jurisdiction over the
person of the respondent because the summons was erroneously served on Euro-Philippine
Airline Services, Inc. which is not its resident agent in the Philippines.
The RTC granted the motion to dismiss, hence this current petition.
ISSUE:
Whether or not the court has jurisdiction
RULING:
NO.
The Warsaw Convention has the force and effect of law in this country. The Warsaw
Convention applies because the air travel, where the alleged tortious conduct occurred, was
between the United Kingdom and Italy, which are both signatories to the Warsaw
Convention.
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TRANSPORTATION LAW | ATTY. CAPANAS | COMPILATION OF CASE DIGESTS – PART 5 (AVIATION LAW)
When the place of departure and the place of destination in a contract of carriage are
situated within the territories of two High Contracting Parties, said carriage is deemed an
"international carriage". The High Contracting Parties referred to herein were the signatories
to the Warsaw Convention and those which subsequently adhered to it.
In the case at bench, petitioner’s place of departure was London, United Kingdom while her
place of destination was Rome, Italy. Both the United Kingdom and Italy signed and ratified
the Warsaw Convention. As such, the transport of the petitioner is deemed to be an
"international carriage" within the contemplation of the Warsaw Convention.
Since the Warsaw Convention applies in the instant case, then the jurisdiction over the
subject matter of the action is governed by the provisions of the Warsaw Convention.
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the action for
damages before –
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract has been
made; or
4. the court of the place of destination.
In this case, it is not disputed that respondent is a British corporation domiciled in London,
United Kingdom with London as its principal place of business. Hence, under the first and
second jurisdictional rules, the petitioner may bring her case before the courts of London in
the United Kingdom.
In the passenger ticket and baggage check presented by both the petitioner and respondent,
it appears that the ticket was issued in Rome, Italy. Consequently, under the third
jurisdictional rule, the petitioner has the option to bring her case before the courts of Rome
in Italy.
Finally, both the petitioner and respondent aver that the place of destination is Rome, Italy,
which is properly designated given the routing presented in the said passenger ticket and
baggage check. Accordingly, petitioner may bring her action before the courts of Rome, Italy.
We thus find that the RTC of Makati correctly ruled that it does not have jurisdiction over the
case filed by the petitioner. Both the United Kingdom and Italy signed and ratified the
Warsaw Convention. As such, the transport of the petitioner is deemed to be an
"international carriage" within the contemplation of the Warsaw Convention.
PRESCRIPTION
EH403
30. PHILIPPINE AIRLINES VS. HON. ADRIANO SAVILLO, PRESIDING JUDGE OF RTC
BRANCH 30, ILOILO CITY
FACTS:
Private respondent was invited to participate in the 1993 ASEAN Seniors Annual Golf
Tournament held in Jakarta, Indonesia. He and several companions decided to purchase their
respective passenger tickets from PAL with the following points of passage: MANILA-
SINGAPORE-JAKARTA-SINGAPORE-MANILA. Private respondent and his companions were
made to understand by PAL that its plane would take them from Manila to Singapore, while
Singapore Airlines would take them from Singapore to Jakarta.
On 3 October 1993, private respondent and his companions took the PAL flight to Singapore
and arrived at about 6:00 o’clock in the evening. Upon their arrival, they proceeded to the
Singapore Airlines office to check-in for their flight to Jakarta scheduled at 8:00 o’clock in the
same evening. Singapore Airlines rejected the tickets of private respondent and his group
because they were not endorsed by PAL. It was explained to private respondent and his
group that if Singapore Airlines honored the tickets without PAL’s endorsement, PAL would
not pay Singapore Airlines for their passage. Private respondent tried to contact PAL’s office
at the airport, only to find out that it was closed.
Stranded at the airport in Singapore and left with no recourse, private respondent was in
panic and at a loss where to go; and was subjected to humiliation, embarrassment, mental
anguish, serious anxiety, fear and distress. Eventually, private respondent and his
companions were forced to purchase tickets from Garuda Airlines and board its last flight
bound for Jakarta. When they arrived in Jakarta at about 12:00 o’clock midnight, the party
who was supposed to fetch them from the airport had already left and they had to arrange
for their transportation to the hotel at a very late hour. After the series of nerve-wracking
experiences, private respondent became ill and was unable to participate in the tournament.
Upon his return to the Philippines, private respondent brought the matter to the attention of
PAL. He sent a demand letter to PAL on 20 December 1993 and another to Singapore Airlines
on 21 March 1994. However, both airlines disowned liability and blamed each other for the
fiasco. On 15 August 1997, private respondent filed a Complaint for Damages before the RTC,
seeking compensation for moral damages in the amount of P1,000,000.00 and attorney’s
fees.
PAL filed a Motion to Dismiss dated on the ground that the said complaint was barred on the
ground of prescription under Section 1(f) of Rule 16 of the Rules of Court. PAL argued that
the Warsaw Convention, particularly Article 29 thereof, governed this case, as it provides
that any claim for damages in connection with the international transportation of persons is
subject to the prescription period of two years. Since the Complaint was filed on 15 August
1997, more than three years after PAL received the demand letter on 25 January 1994, it was
already barred by prescription.
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TRANSPORTATION LAW | ATTY. CAPANAS | COMPILATION OF CASE DIGESTS – PART 5 (AVIATION LAW) EH403

Regional Trial Court:
It denied the Motion to Dismiss. It maintained that the provisions of the Civil Code and other
pertinent laws of the Philippines, not the Warsaw Convention, were applicable to the present
case.
Court of Appeals:
It affirmed the decision of the RTC. It pronounced that the application of the Warsaw
Convention must not be construed to preclude the application of the Civil Code and other
pertinent laws. By applying Article 1144 of the Civil Code, which allowed for a ten-year
prescription period, the appellate court declared that the Complaint filed by private
respondent should not be dismissed.
ISSUE:
Whether or not the complaint filed is already barred by prescription, being filed beyond the
2-year period provided under the Warsaw Convention
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict.
Private respondent’s Complaint was filed with the RTC on 15 August 1997, which was less
than four years since PAL received his extrajudicial demand on 25 January 1994. Thus, private
respondent’s claims have not yet prescribed and PAL’s Motion to Dismiss must be denied.
Moreover, should there be any doubt as to the prescription of private respondent’s
Complaint, the more prudent action is for the RTC to continue hearing the same and deny
the Motion to Dismiss. Where it cannot be determined with certainty whether the action has
already prescribed or not, the defense of prescription cannot be sustained on a mere motion
to dismiss based on what appears to be on the face of the complaint. And where the ground
on which prescription is based does not appear to be indubitable, the court may do well to
defer action on the motion to dismiss until after trial on the merits.

RULING:

In the case at hand, Singapore Airlines barred private respondent from boarding the
Singapore Airlines flight because PAL allegedly failed to endorse the tickets of private
respondent and his companions, despite PAL’s assurances to respondent that Singapore
Airlines had already confirmed their passage. While this fact still needs to be heard and
established by adequate proof before the RTC, an action based on these allegations will not
fall under the Warsaw Convention, since the purported negligence on the part of PAL did not
occur during the performance of the contract of carriage but days before the scheduled
flight. Thus, the present action cannot be dismissed based on the statute of limitations
provided under Article 29 of the Warsaw Convention.

Had the present case merely consisted of claims incidental to the airlines’ delay in
transporting their passengers, the private respondent’s Complaint would have been time-
barred under Article 29 of the Warsaw Convention. However, the present case involves a
special species of injury resulting from the failure of PAL and/or Singapore Airlines to
transport private respondent from Singapore to Jakarta – the profound distress, fear, anxiety
and humiliation that private respondent experienced when, despite PAL’s earlier assurance
that Singapore Airlines confirmed his passage, he was prevented from boarding the plane
and he faced the daunting possibility that he would be stranded in Singapore Airport because
the PAL office was already closed.

These claims are covered by the Civil Code provisions on tort, and not within the purview of
the Warsaw Convention. Hence, the applicable prescription period is that provided under
Article 1146 of the Civil Code:

Art. 1146. The following actions must be instituted within four years:

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