7. Fernando Lopez vs.

Pan American World Airways

G.R. No. L-22415 (1966)

Facts: Reservations for first class accommodations and tickets of PAN-AM from Tokyo to
San Francisco were made for then Senator Fernando Lopez, his wife Maria J. Lopez, his
son-in-law Alfredo Montelibano, Jr., and his daughter, Mrs. Alfredo Montelibano, Jr. As
scheduled, plaintiffs left Manila, arriving in Tokyo. As s o o n a s t h e y a r r i v e d , S e n a t o r
Lo p e z f o l l o w e d u p r e g a r d i n g t h e i r f i r s t c l a s s accommodations for that evening's
flight. Through mistake, PAN-AM’s agents cancelled the reservations. Expecting that some
cancellations of bookings would be made before the time, the supervisor decided to
withhold from the plaintiffs the fact that their reservations had been cancelled. The first
class seats therein were all booked that PAN-AM could not accommodate them in that trip as
first class passengers. PAN-AM's Tokyo office firmly reiterated that there was no
accommodation for them in the first class, stating that they could not go in that flight
unless they took the tourist class therein.

Due to pressing engagements waiting in the United States, business conference, and
a medical check-up, plaintiffs were constrained to take PAN-AM's fl i ght from Tok yo t o
S an Fran ci sco as t ouri st passen gers a nd di d s o under protest. Hence, the
plaintiffs filed a suit for damages for breach of contracts in bad faith, actual, moral, and
exemplary damages and a claim for attorney’s fees.

Issue: Whether defendant acted in bad faith in the breach of its contract with plaintiffs?

Ruling: Plaintiffs were mislead into purchasing first class tickets in the conviction that they
had confirmed reservations for the same, when in fact they had none, defendant wilfully
and knowingly placed itself into the position of having to breach its aforesaid contracts with
plaintiffs should there be no last-minute cancellation by other passengers before flight time.
Such actuation of defendant may indeed have been prompted by nothing more than the
promotion of its self-interest inn holding on to plaintiffs as passengers in its flight and
foreclosing on their chances to seek the services of other airlines that may have been able to
afford them first class accommodations. All the time, in legal contemplation such conduct
already amounts to an action in bad faith, for bad faith means a breach of a known
duty through some motive of interest or ill-will.

- There is no Conflicts of Law issue in this case; maybe Atty. Macapili gave the wrong case
citation. I searched for other similar cases -

Reginaldo Lopez vs. Pan Am World Services, Inc.

U.S. Case (1987)

Facts: Reginaldo Lopez, a 59 year old United States citizen, applied in 1982 for a position with
Pan Am World Services, Inc., a Florida corporation. Pan Am decided to fly Lopez from Florida
to Greenwich, Connecticut for an interview with several Pan Am employees. In that interview,
Pan Am employees told Lopez that he was qualified for a warehouse superintendent position in
Caracas, Venezuela. Subsequently, E.E. Wilcoxen, a Pan Am employment services manager,
withdrew Pan Am's employment offer because of Lopez's age.

Issue: Whether the Age Discrimination in Employment Act (ADEA), 29 U.S.C. Secs. 621-634,
prior to its amendment in 1984, applies to the application for employment by an American
citizen to an American corporation, where the place of employment would be in a foreign
country?

Ruling: The district court held that the ADEA did not have extraterritorial effect, thereby barring
the Lopez’s age discrimination claim under the ADEA; the U.S. C.A. agrees. The location of the
work station should be the controlling factor for discerning the ADEA's extraterritorial effect.
The work station for Lopez's job would have been Caracas, Venezuela. Therefore, the ADEA,
prior to its amendment in 1984, does not protect the appellant from age discrimination. The court
regrets that Lopez does not have a cause of action because Pan Am's hiring decision based on
age occurred too early. Nevertheless, the law must be applied as it stood in 1982.