PAL v. Court of Appeals, 275 SCRA 621, G.R. No.120262, 17 July 1997.

11/11/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 275 new

VOL. 275, JULY 17, 1997 621
Philippine Airlines, Inc. vs. Court of Appeals

*
G.R. No. 120262. July 17, 1997.
PHILIPPINE AIRLINES, INC., petitioner, vs. COURT OF

APPEALS and LEOVIGILDO A. PANTEJO, respondents.
Common Carriers; Air Transportation; Damages; The contract

of air carriage generates a relation attended with a public duty,
and neglect or malfeasance of the carrier’s employees naturally
could give ground for an action for damages.—To begin with, it
must be emphasized that a contract to transport passengers is
quite different in kind and degree from any other contractual
relation, and this is because of the relation which an air carrier
sustains with the public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and advantages it
offers. The contract of air carriage, therefore, generates a relation
attended with a public duty. Neglect or malfeasance of the
carrier’s employees naturally could give ground for an action for
damages.
Same; Same; Evidence; Factual findings of the Court of
Appeals which are supported by substantial evidence are binding,
final and conclusive upon the Supreme Court.—It must be
stressed that these factual findings, which are supported by
substantial evidence, are binding, final and conclusive upon this
Court absent any reason, and we find none, why this settled
evidential rule should not apply.
________________
* SECOND DIVISION.
622
622 SUPREME COURT REPORTS ANNOTATED

www.central.com.ph/sfsreader/session/00000175b6452061dbd488ad003600fb002c009e/t/?o=False 1/13
Same; Same; Damages; Assuming arguendo that airline

passengers have no vested right to amenities in case a flight is
cancelled due to force majeure, what makes an airline liable for
damages in the instant case is its blatant refusal to accord the so-
called amenities equally to all its stranded passengers who were
similarly situated.—Assuming arguendo that the airline
passengers have no vested right to these amenities in case a flight
is cancelled due to force majeure, what makes petitioner liable for
damages in this particular case and under the facts obtaining
herein is its blatant refusal to accord the so-called amenities
equally to all its stranded passengers who were bound for Surigao
City. No compelling or justifying reason was advanced for such
discriminatory and prejudicial conduct.
Same; Same; Philippine Airlines; It has been sufficiently
established that it is petitioner carrier’s standard company policy
whenever a flight has been cancelled, to extend to its hapless
passengers cash assistance or to provide them accommodations in
hotels with which it has existing tie-ups.—More importantly, it
has been sufficiently established that it is petitioner’s standard
company policy, whenever a flight has been cancelled, to extend to
its hapless passengers cash assistance or to provide them
accommodations in hotels with which it has existing tie-ups. In
fact, petitioner’s Mactan Airport Manager for departure services,
Oscar Jereza, admitted that PAL has an existing arrangement
with hotels to accommodate stranded passengers, and that the
hotel bills of Ernesto Gonzales were reimbursed obviously
pursuant to that policy.
Same; Same; Same; The Supreme Court views as impressed
with dubiety PAL’s attempt to represent emergency assistance to
stranded passengers as being merely ex gratia and not ex debito.—
Further, Ernesto Gonzales, the aforementioned co-passenger of
respondent on that fateful flight, testified that based on his
previous experience hotel accommodations were extended by PAL
to its stranded passengers either in Magellan or Rajah Hotels, or
even in Cebu Plaza. Thus, we view as impressed with dubiety
PAL’s present attempt to represent such emergency assistance as
being merely ex gratia and not ex debito.
Same; Same; Same; The fact that the refund of hotel expenses
was surreptitiously and discriminatorily made by PAL since the
same was not made known to everyone except through word of
mouth to a handful of passengers is a sad commentary on the
quality of service
623
VOL. 275, JULY 17, 1997 623

and professionalism of an airline company which is the country’s

flag carrier at that.—Respondent Court of Appeals thus correctly
concluded that the refund of hotel expenses was surreptitiously
and discriminatorily made by herein petitioner since the same
was not made known to everyone, except through word of mouth
to a handful of passengers. This is a sad commentary on the
quality of service and professionalism of an airline company,
which is the country’s flag carrier at that.
Same; Same; Damages; The discriminatory act of an air
carrier ineludibly makes it liable for moral damages under Article
21 in relation to Article 2219 (10) of the Civil Code.—The
discriminatory act of petitioner against respondent ineludibly
makes the former liable for moral damages under Article 21 in
relation to Article 2219 (10) of the Civil Code. As held in Alitalia
Airways vs. CA, et al., such inattention to and lack of care by
petitioner airline for the interest of its passengers who are
entitled to its utmost consideration, particularly as to their
convenience, amount to bad faith which entitles the passenger to
the award of moral damages.
Same; Same; Same; Substantial damages do not translate
into excessive damages.—Moral damages are emphatically not
intended to enrich a plaintiff at the expense of the defendant.
They are awarded only to allow the former to obtain means,
diversion, or amusements that will serve to alleviate the moral
suffering he has undergone due to the defendant’s culpable action
and must, perforce, be proportional to the suffering inflicted.
However, substantial damages do not translate into excessive
damages. Except for attorney’s fees and costs of suit, it will be
noted that the Court of Appeals affirmed point by point the
factual findings of the lower court upon which the award of
damages had been based. We, therefore, see no reason to modify
the award of damages made by the trial court.
Same; Same; Same; It is high time that the travelling public is
afforded protection and that the duties of common carriers, long
detailed in laws and jurisprudence and thereafter collated and
specifically catalogued in the Civil Code in 1950, be enforced
through appropriate sanctions.—Under the peculiar
circumstances of this case, we are convinced that the awards for
actual, moral and exemplary damages granted in the judgment of
respondent court, for the reasons meticulously analyzed and
thoroughly explained in its decision, are just and equitable. It is
high time that the travelling public
624

is afforded protection and that the duties of common carriers, long

detailed in our previous laws and jurisprudence and thereafter
collated and specifically catalogued in our Civil Code in 1950, be
enforced through appropriate sanctions.
Actions; Judgments; Damages; Interest Rates; The interest of
6% should be computed from the date of rendition of judgment and
not from the filing of the complaint.—We agree, however, with the
contention that the interest of 6% imposed by respondent court
should be computed from the date of rendition of judgment and
not from the filing of the complaint. The rule has been laid down
in Eastern Shipping Lines, Inc. vs. Court of Appeals, et al. This is
because at the time of the filing of the complaint, the amount of
damages to which plaintiff may be entitled remains unliquidated
and not known, until it is definitely ascertained, assessed and
determined by the court, and only after the presentation of proof
thereon.
PETITION for review of a decision of the Court of Appeals.
The facts are stated in the opinion of the Court.

Rebanal & Hernando Law Offices for petitioner.
Noel P. Catre for private respondent.
REGALADO, J.:

In this appeal by certiorari, petitioner Philippine
Airlines, Inc. (PAL) seeks to1 set aside the decision of
respondent Court of Appeals, promulgated on December
29, 1994, which affirmed the award for damages made by
the trial court in favor of herein private respondent
Leovegildo A. Pantejo.
On October 23, 1988, private respondent Pantejo, then
City Fiscal of Surigao City, boarded a PAL plane in Manila
and disembarked in Cebu City where he was supposed to
take his connecting flight to Surigao City. However, due to
typhoon Osang, the connecting flight to Surigao City was
cancelled.
______________
1 CA-G.R. CV 33842; Presiding Justice Nathaniel P. De Pano, Jr.,

ponente; Associate Justices Artemon de Luna and Ramon U. Mabutas, Jr.
concurring; Annex A, Petition; Rollo, 48.
625
VOL. 275, JULY 17, 1997 625


To accommodate the needs of its stranded passengers,
PAL initially gave out cash assistance of P100.00 and, the
next day, P200.00, for their expected stay of two days in
Cebu. Respondent Pantejo requested instead that he be
billeted in a hotel at PAL’s expense because he did not have
cash with him at that time, but PAL refused. Thus,
respondent Pantejo was forced to seek and accept the
generosity of a co-passenger, an engineer named Andoni
Dumlao, and he shared a room with the latter at Sky View
Hotel with the promise to pay his share of the expenses
upon reaching Surigao.
On October 25, 1988 when the flight for Surigao was
resumed, respondent Pantejo came to know that the hotel
expenses of his co-passengers, one Superintendent Ernesto
Gonzales and a certain Mrs. Gloria Rocha, an auditor of the
Philippine National Bank, were reimbursed by PAL. At
this point, respondent Pantejo informed Oscar Jereza,
PAL’s Manager for Departure Services at Mactan Airport
and who was in charge of cancelled flights, that he was
going to sue the airline for discriminating against him. It
was only then that Jereza offered to pay respondent
Pantejo P300.00 which, due to the ordeal and anguish he
had undergone, the latter declined.
On March 18, 1991, the Regional Trial Court of Surigao
City, Branch 30, rendered judgment in the action for
damages filed by respondent Pantejo against herein
petitioner, Philippine Airlines, Inc., ordering the latter to
pay Pantejo P300.00 for actual damages, P150,000.00 as
moral damages, P100,000.00 as exemplary damages,
P15,000.00 as attorney’s fees, and 6% interest from the
time of the filing of the complaint until said amounts
2
shall
have been fully paid, plus costs of suit. On appeal,
respondent court affirmed the decision of the court a quo,
but with the exclusion of the award of attorney’s fees and
litigation expenses.
The main issue posed for resolution is whether
petitioner airlines acted in bad faith when it failed and
refused to provide hotel accommodations for respondent
Pantejo or to reim-
_______________
2 Petition, 3; Rollo, 30.
626

burse him for hotel expenses incurred by reason of the

cancellation of its connecting flight to Surigao City due to
force majeure.
To begin with, it must be emphasized that a contract to
transport passengers is quite different in kind and degree
from any other contractual relation, and this is because of
the relation which an air carrier sustains with the public.
Its business is mainly with the travelling public. It invites
people to avail of the comforts and advantages it offers. The
contract of air carriage, therefore, generates a relation
attended with a public duty. Neglect or malfeasance of the
carrier’s employees3 naturally could give ground for an
action for damages.
In ruling for respondent Pantejo, both the trial court and
the Court of Appeals found that herein petitioner acted in
bad faith in refusing to provide hotel accommodations for
respondent Pantejo or to reimburse him for hotel expenses
incurred despite and in contrast to the fact that other
passengers were so favored.
In declaring that bad faith existed, respondent court
took into consideration the following factual circumstances:
1. Contrary to petitioner’s claim that cash assistance was
given instead because of non-availability of rooms in hotels
where petitioner had existing tie-ups, the evidence shows
that Sky View Hotel, where respondent Pantejo was
billeted, had plenty of rooms available.
2. It is not true that the P300.00 paid to Ernesto Gonzales,
a co-passenger of respondent, was a refund for his plane
ticket, the truth being that it was a reimbursement for
hotel and meal expenses.
3. It is likewise not denied that said Gonzales and herein
respondent came to know about the reimbursements only
because another passenger, Mrs. Rocha, informed them
that she was able to obtain the refund for her own hotel
expenses.
_______________
3 Zulueta, et al. vs. Pan American World Airways, Inc., L-28589,

February 29, 1972, 43 SCRA 397.
627
VOL. 275, JULY 17, 1997 627


4. Petitioner offered to pay P300.00 to private respondent
only after he had confronted the airline’s manager about
the discrimination committed against him, which the latter
realized was an actionable wrong.
5. Service Voucher No. 199351, presented by petitioner to
prove that it gave cash assistance to its passengers, was
based merely on the list of passengers already given cash
assistance and was purportedly prepared at around 10:00
A.M. of October 23, 1988. This was two hours before
respondent came to know of the cancellation of his flight to
Surigao, hence private
4
respondent could not have possibly
refused the same.
It must be stressed that these factual findings, which
are supported by substantial evidence, are binding, final
and conclusive upon this Court absent any reason, and we
find none, why this settled evidential rule should not apply.
Petitioner theorizes that the hotel accommodations or
cash assistance given in case a flight is cancelled is in the
nature of an amenity and is merely a privilege that may be
extended at its own discretion, but never a right that may
be demanded by its passengers. Thus, when respondent
Pantejo was offered cash assistance and he refused it,
petitioner cannot be held liable for whatever befell
respondent Pantejo on that fateful day, because it was
merely exercising its discretion when it opted to just give
cash assistance to its passengers.
Assuming arguendo that the airline passengers have no
vested right to these amenities in case a flight is cancelled
due to force majeure, what makes petitioner liable for
damages in this particular case and under the facts
obtaining herein is its blatant refusal to accord the so-
called amenities equally to all its stranded passengers who
were bound for Surigao City. No compelling or justifying
reason was advanced for such discriminatory and
prejudicial conduct.
More importantly, it has been sufficiently established
that it is petitioner’s standard company policy, whenever a
flight has been cancelled, to extend to its hapless
passengers cash
_______________
4 Rollo, 52-57.
628

assistance or to provide them accommodations in hotels

with which it has existing tie-ups. In fact, petitioner’s
Mactan Airport Manager for departure services, Oscar
Jereza, admitted that PAL has an existing arrangement
5
with hotels to accommodate stranded passengers, and that6
the hotel bills of Ernesto Gonzales were reimbursed
obviously pursuant to that policy.
Also, two witnesses presented by respondent, Teresita
Azarcon and Nerie Bol, testified that sometime in
November, 1988, when their flight from Cebu to Surigao
was cancelled, they were billeted at Rajah Hotel 7
for two
nights and three days at the expense of PAL. This was
never denied by PAL. Further, Ernesto Gonzales, the
aforementioned co-passenger of respondent on that fateful
flight, testified that based on his previous experience hotel
accommodations were extended by PAL to its stranded
passengers either in Magellan or Rajah Hotels, or even in
Cebu Plaza. Thus, we view as impressed with dubiety
PAL’s present attempt to represent such emergency
assistance as being merely ex gratia and not ex debito.
While petitioner now insists that the passengers were
duly informed that they would be reimbursed for their
hotel expenses, it miserably and significantly failed to
explain why the other passengers were given
reimbursements while private respondent was not.
Although Gonzales was subsequently given a refund, this
was only so because he came to know about it by accident
through Mrs. Rocha, as earlier explained.
Petitioner could only offer the strained and flimsy
pretext that possibly the passengers were not listening
when the announcement was made. This is absurd because
when respondent Pantejo came to know that his flight had
been cancelled, he immediately proceeded to petitioner’s
office and
______________
5 Ibid., 54.
6 Ibid., 57.
7 Ibid., 52.
629
VOL. 275, JULY 17, 1997 629

requested for hotel accommodations. He was not only

refused accommodations, but he was not even informed
that he may later on be reimbursed for his hotel expenses.
This explains why his co-passenger, Andoni Dumlao,
offered to answer for respondent’s hotel bill and the latter
promised to pay him when they arrive in Surigao. Had both
known that they would be reimbursed by the airline, such
arrangement would not have been necessary.
Respondent Court of Appeals thus correctly concluded
that the refund of hotel expenses was surreptitiously and
discriminatorily made by herein petitioner since the same
was not made known to everyone, except through word of
mouth to a handful of passengers. This is a sad
commentary on the quality of service and professionalism
of an airline company, which is the country’s flag carrier at
that.
On the bases of all the foregoing, the inescapable
conclusion is that petitioner acted in bad faith in
disregarding its duties as a common carrier to its
passengers and in discriminating against herein
respondent Pantejo. It was even oblivious to the fact that
this respondent was exposed to humiliation and
embarrassment especially because of his government
position and social prominence, which altogether
necessarily subjected him to ridicule, shame and anguish.
It remains uncontroverted that at the time of the incident,
herein respondent was then the City Prosecutor of Surigao
City, and that he is a member of the Philippine Jaycee
Senate, past Lt. Governor of the Kiwanis Club of Surigao, a
past Master of the Mount Diwata Lodge of Free Masons of
the Philippines, member of the Philippine National Red
Cross, Surigao Chapter, and past Chairman of the 8
Boy
Scouts of the Philippines, Surigao del Norte Chapter.
It is likewise claimed that the moral and exemplary
damages awarded to respondent Pantejo are excessive and
unwarranted on the ground that respondent is not totally
blameless because of his refusal to accept the P100.00 cash
assistance which was inceptively offered to him. It bears
emphasis that
______________
8 Ibid., 58.
630

respondent Pantejo had every right to make such refusal

since it evidently could not meet his needs and that was all
that PAL claimed it could offer.
His refusal to accept the P300.00 proffered as an
afterthought when he threatened suit was justified by his
resentment when he belatedly found out that his co-
passengers were reimbursed for hotel expenses and he was
not. Worse, he would not even have known about it were it
not for a co-passenger who verbally told him that she was
reimbursed by the airline for hotel and meal expenses. It
may even be said that the amounts, the time and the
circumstances under which those amounts were offered
could not salve the moral wounds inflicted by PAL on
private respondent but even approximated insult added to
injury.
The discriminatory act of petitioner against respondent
ineludibly makes the former liable for moral damages
under9 Article 21 in relation to Article 2219 (10) of the
10
Civil
Code. As held in Alitalia Airways vs. CA, et al., such
inattention to and lack of care by petitioner airline for the
interest of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount
to bad faith which entitles the passenger to the award of
moral damages.
Moral damages are emphatically not intended to enrich
a plaintiff at the expense of the defendant. They are
awarded only to allow the former to obtain means,
diversion, or amusements that will serve to alleviate the
moral suffering he has undergone due to the defendant’s
culpable action and 11
must, perforce, be proportional to the
suffering inflicted. However, substantial
12
damages do not
translate into excessive damages. Except for attorney’s
fees and costs of suit, it will
_____________
9 Sibal vs. Notre Dame of Greater Manila, et al., G.R. No. 75093,
February 23, 1990, 182 SCRA 538.
10 G.R. No. 77011, July 24, 1990, 187 SCRA 763.
11 Philtranco Service Enterprises, Inc., et al. vs. CA, et al., G.R. No.
120553, June 17, 1997.
12 National Power Corporation, et al. vs. CA, et al., G.R. No. 113103,
June 13, 1997.
631
VOL. 275, JULY 17, 1997 631

be noted that the Court of Appeals affirmed point by point

the factual findings of the lower 13court upon which the
award of damages had been based. We, therefore, see no
reason to modify the award of damages made by the trial
court.
Under the peculiar circumstances of this case, we are
convinced that the awards for actual, moral and exemplary
damages granted in the judgment of respondent court, for
the reasons meticulously analyzed and thoroughly
explained in its decision, are just and equitable. It is high
time that the travelling public is afforded protection and
that the duties of common carriers, long detailed in our
previous laws and jurisprudence and thereafter collated
and specifically catalogued in our Civil Code in 1950, be
enforced through appropriate sanctions.
We agree, however, with the contention that the interest
of 6% imposed by respondent court should be computed
from the date of rendition of judgment and not from the
filing of the complaint. The rule has been laid down in14
Eastern Shipping Lines, Inc. vs. Court of Appeals, et al.
that:
“When an obligation, not constituting a loan or forbearance of

money, is breached, an interest on the amount of damages
awarded may be imposed at the discretion of the court at the rate
of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand
can be established with reasonable certainty. Accordingly, where
the demand is established with reasonable certainty, the interest
shall begin to run from the time the claim is made judicially or
extrajudicially (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of
damages may be deemed to have been reasonably ascertained).
The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.”
_______________
13 Meneses, et al. vs. CA, et al., G.R. No. 82220, July 14, 1995, 246
SCRA 162.
14 G.R. No. 97412, July 12, 1994, 234 SCRA 78.
632


This is because at the time of the filing of the complaint,
the amount of damages to which plaintiff may be entitled
remains unliquidated and not known, until it is definitely
ascertained, assessed and determined by 15the court, and
only after the presentation of proof thereon.
WHEREFORE, the challenged judgment of respondent
Court of Appeals is hereby AFFIRMED, subject to the
MODIFICATION regarding the computation of the 6%
legal rate of interest on the monetary awards granted
therein to private respondent.
SO ORDERED.
Romero and Puno, JJ., concur.

Mendoza, J., No part. Daughter in management of
petitioner.
Torres, Jr., J., On official leave.
Judgment affirmed with modification.
Note.—The contract of air carriage generates a relation

attended with a public duty and any discourteous conduct
on the part of the carrier’s employees toward a passenger
gives the latter an action for damages against the carrier.
(Korean Airlines Co., Ltd. vs. Court of Appeals, 234 SCRA
717 [1994])
——o0o——
_______________
15 Korean Airlines Co., Ltd. vs. Court of Appeals, et al., G.R. No.
114061, August 3, 1994, 234 SCRA 717.


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11/11/2020 SUPREME COURT REPORTS ANNOTATED VOLUME 275 new

PHILIPPINE AIRLINES, INC., petitioner, vs. COURT OF

Common Carriers; Air Transportation; Damages; The contract

622 SUPREME COURT REPORTS ANNOTATED

Philippine Airlines, Inc. vs. Court of Appeals

Same; Same; Damages; Assuming arguendo that airline

VOL. 275, JULY 17, 1997 623

and professionalism of an airline company which is the country’s

624 SUPREME COURT REPORTS ANNOTATED

is afforded protection and that the duties of common carriers, long

PETITION for review of a decision of the Court of Appeals.

The facts are stated in the opinion of the Court.

1 CA-G.R. CV 33842; Presiding Justice Nathaniel P. De Pano, Jr.,

concurring; Annex A, Petition; Rollo, 48.

VOL. 275, JULY 17, 1997 625

2 Petition, 3; Rollo, 30.

626 SUPREME COURT REPORTS ANNOTATED

burse him for hotel expenses incurred by reason of the

3 Zulueta, et al. vs. Pan American World Airways, Inc., L-28589,

VOL. 275, JULY 17, 1997 627

628 SUPREME COURT REPORTS ANNOTATED

assistance or to provide them accommodations in hotels

VOL. 275, JULY 17, 1997 629

requested for hotel accommodations. He was not only

630 SUPREME COURT REPORTS ANNOTATED

respondent Pantejo had every right to make such refusal

VOL. 275, JULY 17, 1997 631

be noted that the Court of Appeals affirmed point by point

“When an obligation, not constituting a loan or forbearance of

632 SUPREME COURT REPORTS ANNOTATED

Romero and Puno, JJ., concur.

Judgment affirmed with modification.

Note.—The contract of air carriage generates a relation

© Copyright 2020 Central Book Supply, Inc. All rights reserved.

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