Pal vs. CA

10/17/21, 8:06 PM SUPREME COURT REPORTS ANNOTATED VOLUME 257
VOL. 257, MAY 17, 1996 33

Philippine Airlines, Inc. vs. Court of Appeals
*
G.R. No. 119641. May 17, 1996.
PHILIPPINE AIRLINES, INC., vs. COURT OF APPEALS,

DR. JOSEFINO MIRANDA and LUISA MIRANDA,
respondents.
Common Carriers; Air Transportation; 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.—The Court has time and again ruled,
and it cannot be overemphasized, 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.
Same; Same; Bad faith must be duly proved and not merely
presumed.—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.
Same; Same; Damages; Inattention to and lack of care for the
interests of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount to bad
faith which entitles the passenger to an award of moral damages.
—It is now firmly settled that moral damages are recoverable in
suits predicated on breach of a contract of carriage where it is
proved that the carrier was guilty of fraud or bad faith.
Inattention to and lack of care for the interests of its passengers
who are entitled to its utmost consideration, particularly as to
their convenience, amount to bad faith which entitles the
passenger to an award of moral damages. What the law considers
as bad faith which may furnish the ground for an award of moral
https://www.central.com.ph/sfsreader/session/0000017c8e2b2802ce43c453000d00d40059004a/t/?o=False 1/17
damages would be bad faith in securing the contract and in the

execution thereof, as well as in the enforcement
_______________
* SECOND DIVISION.
34
34 SUPREME COURT REPORTS ANNOTATED
of its terms, or any other kind of deceit.

Same; Same; Airline Amenities; An airline’s unilateral and
voluntary act of providing cash assistance is deemed part of its
obligations as an air carrier, and is hardly anything to rave about.
—At this juncture, it may also be pointed out that it is PAL’s duty
to provide assistance to private respondents and, for that matter,
any other passenger similarly inconvenienced due to delay in the
completion of the transport and the receipt of their baggage.
Therefore, its unilateral and voluntary act of providing cash
assistance is deemed part of its obligation as an air carrier, and is
hardly anything to rave about. Likewise, arrangements for and
verification of requested hotel accommodations for private
respondents could and should have been done by PAL employees
themselves, and not by Dr. Miranda. It was rather patronizing of
PAL to make much of the fact that they allowed Dr. Miranda to
use its office telephone in order to get a hotel room.
Same; Same; Same; Judicial Notice; Tipping, especially in a
first-rate hotel, is an accepted practice, of which the Supreme
Court can take judicial notice.—We agree with the findings of the
lower court that the request of private respondents for monetary
assistance of P300.00 for taxi fare was indeed justified,
considering that there were two of them and they had several
pieces of luggage which had to be ferried between the airport and
the hotel. Also, the request for a small additional sum for tips is
equally reasonable since tipping, especially in a first-rate hotel, is
an accepted practice, of which the Court can take judicial notice.
Same; Same; Warsaw Convention; The Warsaw 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—it must not be
construed to preclude the operation of the Civil Code and pertinent
laws.—There was no error on the part of the Court of Appeals
when it refused to apply the provisions of the Warsaw

Convention, for in the words of this Court in the aforequoted
Cathay Pacific case: “x x x 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
35
VOL. 257, MAY 17, 1996 35
liability. The Warsaw Convention declares the carrier liable in the

enumerated cases and under certain limitations. However, it
must not be construed to preclude the operation of the Civil Code
and 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, which is the case before Us. x x x.”
PETITION for review on certiorari of a decision of the

Court of Appeals.
The facts are stated in the opinion of the Court.

Siguion Reyna, Montecillo & Ongsiako for petitioner.
Noel P. Catre for private respondents.
REGALADO, J.:
In this appeal by certiorari, petitioner Philippine Airlines,

Inc. (PAL) assails the decision of 1 respondent Court of
Appeals in CA-G.R. CV No. 29147 which affirmed the
judgment of the trial court finding herein petitioner liable
as follows:
“Wherefore, premises considered, judgment is hereby rendered

ordering the defendant, Philippine Airlines or PAL, to pay to the
plaintiffs, Dr. Josefino Miranda and Luisa Miranda, the sum of
P100,000.00 as moral damages; P30,000.00 as exemplary or 2
corrective damages; P10,000.00 as attorney’s fees; and the costs.”
The factual antecedents of the present petition reveal that

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
_______________
1 Penned by Justice Ruben T. Reyes, with Justices Antonio M. Martinez

and Consuelo Ynares-Santiago concurring.
2 Civil Case No. 105; per Judge Diomedes M. Eviota, Regional Trial
Court, Branch 32, Surigao City.
36

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
37
VOL. 257, MAY 17, 1996 37

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 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.
Petitioner PAL has come to us via the instant petition
for review on certiorari, wherein it challenges 3
the
affirmatory decision of respondent Court of Appeals (1) for
applying Articles 2220, 2232 and 2208 of the Civil Code
when it sustained the award of the court a quo for moral
and exemplary damages and attorney’s fees despite
absence of bad faith on its part; and (2) for not applying the
express provisions of the contract of carriage and pertinent
provisions of the Warsaw Convention limiting its liability
to US$20.00 per kilo of baggage.
1. Anent the first issue, petitioner argues that there was

no bad faith on its part for while there was admittedly a
delay
_______________
3 Rollo, 46.
38

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 measures4
undertaken by
the airline to ensure passenger safety.
It reiterated its position that the off-loading of private
respondents’ baggage was due to “weight limitations,” as
lengthily explained by 5
petitioner from an aeronautically
technical viewpoint, taking into consideration such
variable factors as flight distance, weather, air resistance,
runway condition and fuel requirement. Given the variable
weather conditions, it claimed that the weight limitation
for each flight can only be ascertained shortly before take-
off. While admittedly there would be a resulting
inconvenience in the accommodations of the passengers
and the handling of their cargo, the same is outweighed by
the paramount concern for the safety of the flight.
Petitioner moreover impugns the Court of Appeals’
allegedly improper reliance on the inaccurate
interpretation of the testimony **of PAL’s baggage service
representative, Edgar Mondejar, that private respondents’
baggage were off-loaded to give preference to baggage
and/or cargo originating from Honolulu. PAL argues that
Mondejar’s knowledge of what transpired in Honolulu was
merely based on the telex report forwarded to PAL’s
Manila station stating
6
that the off-loading was due to
weight limitations.
Petitioner enumerates the following incidents as
indicative of its good faith in dealing with private
respondents: (1) The
_______________
4 Ibid., 14.
5 Ibid., 14-15.
** His surname is also spelled “Montejar” in some portions of the TSN.
6 Rollo, 16.
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VOL. 257, MAY 17, 1996 39

cancellation of the flight to Surigao City due to

mechanical/engine trouble was to ensure the safety of
passengers and cargo; (2) PAL offered to shoulder private
respondents’ preferred accommodations, meals and
transportation while in Cebu City with more than the
usual amenities given in cases of flight disruption, and
gave them priority in the following day’s flight to Surigao
City; (3) PAL employees did not act rudely towards private
respondents and its managerial personnel even gave them
special attention; (4) It was reasonable for PAL to limit the
transportation expense to P150.00, considering that the
fare between the airport and the hotel was only P75.00,
and they would be picked up by the shuttle bus from the
hotel to the airport, while the request for money for tips
could not be justified; and (5) The inadvertent loading of
private respondents’ baggage on the replacement flight to
Surigao City was at most simple and excusable negligence
due to the numerous flight disruptions and large number of
baggage on that day.
Petitioner strenuously, and understandably, insists that
its employees did not lie to private respondents regarding
the want of accommodations at the latter’s hotel of
preference. The only reason why Cebu Plaza Hotel was not
initially offered to them by PAL was because of the earlier
advice of the hotel personnel that not all the stranded PAL
passengers could be accommodated therein. It claimed that
it was in accordance with the airline’s policy of housing all
affected passengers in one location for easy communication
and transportation, which accommodations in this instance
could be provided by Magellan Hotel. However, upon
insistence of the Mirandas on their preference for Cebu
Plaza Hotel, Jeremias Tumulak, PAL’s passenger relations
officer, told them that they could use the office phone and
that if they could arrange for such accommodation PAL
would shoulder the expenses. This concession, so petitioner
avers, negates any malicious intent on its part.
Crucial to the determination of the propriety of the

award of damages in this case is the lower court’s findings
on the matter of bad faith, which deserves to be quoted at
length:
40

“These claims were reasonable and appeared to be supported by

the evidence. Thus it cannot be denied that plaintiffs had to
undergo some personal inconveniences in Manila for lack of their
baggage. It is also highly probable that plaintiffs’ scheduled
return to Surigao City was upset because of their having to wait
for one day for their missing things. Consequently, it was quite
evident that the off-loading of plaintiffs’ baggage in Honolulu was
the proximate cause of plaintiffs’ subsequent inconveniences for
which they claimed to have suffered social humiliation, wounded
feelings, frustration and mental anguish.
xxx
“In the present case there was a breach of contract committed
in bad faith by the defendant airlines. As previously noted,
plaintiffs had a confirmed booking on PAL Flight PR 101 from
San Francisco to Manila. Therefore plaintiffs were entitled to an
assured passage not only for themselves but for their baggage as
well. They had a legal right to rely on this.
“The evidence showed that plaintiffs’ baggage were properly
loaded and stowed in the plane when it left San Francisco for
Honolulu. The off-loading or bumping off by defendant airlines of
plaintiffs’ baggage to give way to other passengers or cargo was
an arbitrary and oppressive act which clearly amounted to a
breach of contract committed in bad faith and with malice. In the
aforecited case, the Supreme Court defined bad faith as a breach
of a known duty through some motive of interest or ill will. Self-
enrichment or fraternal interest, and not personal ill will, may
have been the motive, but it is malice nevertheless (infra).
“As correctly pointed out in the Memorandum for Plaintiffs
dated June 18, 1990 (pp. 4-5), the following excerpt from the
testimony of Edgar Mondejar clearly demonstrated the act of
discrimination perpetrated by defendant on the herein plaintiffs
(TSN, Edgar Mondejar, Feb. 28, 1990, pp. 26-28), thus:
Q: Before a plane departs, your office will see to it the plane

loads the exact weight limitation insofar as the cargoes (sic)
and passengers are concerned, is that correct?
A: Yes.
Q: And so with the PR 101 flight starting mainland USA, it
complied with the weight limitation, passengers and baggages

(sic) limitation, is that correct?
A: Yes.
41
VOL. 257, MAY 17, 1996 41

Q: In other words the trip from the mainland USA started in

Hawaii to off-load cargoes (sic), you complied with the weight
limitation and so on?
A: Yes.
Q: But you are saying upon arriving in Honolulu certain
containers were off-loaded?
A: Yes.
Q: That would be therefore some containers were off-loaded to
give way to some other containers starting from Honolulu
towards Manila?
A: Yes.
Q: In other words Mr. Mondejar, preference was given to cargoes
(sic) newly loaded at Honolulu instead of the cargoes (sic)
already from mainland USA, is that correct?
A: Yes.
“The aforesaid testimony constituted a clear admission in

defendant’s evidence of facts amounting to a breach of contract in
bad faith. This being so, defendant must
7
be held liable in damages
for the consequences of its action.” (Corrections indicated in
original text.)
The trial court further found that the situation was

aggravated by the following incidents: the poor treatment
of the Mirandas by the PAL employees during the stopover
at Mactan Airport in Cebu; the cavalier and dubious
response of petitioner’s personnel to the Miranda spouses’
request to be billeted at the Cebu Plaza Hotel by denying
the same allegedly because it was fully booked, which claim
was belied by the fact that Dr. Miranda was easily able to
arrange for accommodations thereat; and, the PAL
employees’ negligent, almost malicious, act of sending off
the baggage of private respondents to Surigao City, while
they were still 8in Cebu, without any explanation for this
gross oversight.
The Court of Appeals affirmed these findings of the trial
court by stating that—
_______________
7 Ibid., 62-64; Original Record, 168-170.

8 Ibid., 64-65; ibid., 170-171.
42

“While we recognize an airline’s prerogative to off-load baggag(e)

to conform with weight limitations for the purpose of ensuring the
safety of passengers, We, however, cannot sanction the motion
(sic) and manner it was carried out in this case.
“It is uncontroverted that appellees’ baggag(e) were properly
weighed and loaded in the plane when it left San Francisco for
Honolulu. When they reached Honolulu, they were not informed
that their baggag(e) would be off-loaded. Ironically, if the purpose
of the off-loading was to conform with the weight limitations, why
were other containers loaded in Honolulu? The real reason was
revealed by Edgar9
Montejar, baggage service representative of the
appellant. x x x.
xxx
“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
10
in denying their request to be billeted at
Cebu Plaza Hotel.”
The Court has time and again ruled, and it cannot be

overemphasized, 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 11
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
_______________
9 Ibid., 40.
10 Ibid., 44.
11 Saludo, Jr. vs. Court of Appeals, et al., G.R. No. 95536, March 23,
1992, 207 SCRA 498; Korean Airlines Co., Ltd. vs. Court of Appeals, et al.,
G.R. No. 114061, August 3, 1994, 234 SCRA 717, and companion case.
43
VOL. 257, MAY 17, 1996 43

Appeals shall not be disturbed12

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 13
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
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, the14factual conclusions of
the appellate court must be affirmed.
It is now firmly settled that moral damages are
recoverable in suits predicated on breach of a contract of
carriage where it is
15
proved that the carrier was guilty of
fraud or bad faith. Inattention to and lack of care for the
interests of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount
to bad faith which entitles the passenger to an award of
moral damages. What the law considers as bad faith which
may furnish the ground for an award of moral damages
would be bad faith in securing the contract and in the
execution thereof, as well as in16 the enforcement of its
terms, or any other kind of deceit. Such
_______________
12 Tan Chun Suy vs. Court of Appeals, et al., G.R. No. 93640, January
7, 1994, 229 SCRA 151; Verdejo vs. Court of Appeals, et al., G.R. No.
106018, December 5, 1994, 238 SCRA 781.
13 Cayabyab vs. Intermediate Appellate Court, et al., G.R. No. 75120,
April 28, 1994, 232 SCRA 1.
14 Korean Airlines Co., Ltd. vs. Court of Appeals, et al., supra.
15 Philippine Airlines, Inc. vs. Court of Appeals, G.R. Nos. 50504-05,
August 13, 1990, 188 SCRA 461; China Airlines, Limited vs. Court of
Appeals, et al., G.R. No. 94590, July 29, 1992, 211 SCRA 897; Zalamea, et
al. vs. Court of Appeals, et al., G.R. No. 104235, November 19, 1993, 228
SCRA 23.
16 Trans World Airlines vs. Court of Appeals, et al., G.R. Nos. 78656,
August 30, 1988, 165 SCRA 143; Alitalia Airways vs. Court of
44

unprofessional and proscribed conduct is attributable to

petitioner airline in the case at bar and the adverse
doctrinal rule is accordingly applicable to it.
In
17
Cathay Pacific Airways, Ltd. vs. Court of Appeals, et
al., a case which is virtually on all fours with the present
controversy, we stated:
“In the case at bar, both the trial court and the appellate court
found that CATHAY was grossly negligent and reckless when it
failed to deliver the luggage of petitioner at the appointed place
and time. We agree. x x x. While the mere failure of CATHAY to
deliver respondent’s luggage at the agreed place and time did not
ipso facto amount to willful misconduct since the luggage was
eventually delivered to private respondent, albeit belatedly, We
are persuaded that the employees of CATHAY acted in bad faith.
x x x.
“x x x, if the defendant airline is shown to have acted
fraudulently or in bad faith, the award of moral and exemplary
damages is proper.”
It must, of course, be borne in mind that moral damages

are not awarded to penalize the defendant but to
compensate
18
the plaintiff for the injuries he may have
suffered. In a contractual or quasi-contractual
relationship, exemplary damages, on the other hand, may
be awarded only if the defendant had acted in a wanton, 19
fraudulent, reckless, oppressive or malevolent manner.
Attorney’s fees in the concept of damages
20
may be awarded
where there is a finding of bad faith. The evidence on
record amply sustains, and we
_______________
Appeals, et al., G.R. No. 77011, July 24, 1990, 187 SCRA 763.
17 G.R. No. 60501, March 5, 1993, 219 SCRA 520.
18 MHP Garments, Inc., et al. vs. Court of Appeals, et al., G.R. No.
86720, September 2, 1994, 236 SCRA 227; Metropolitan Bank and Trust
Company vs. Court of Appeals, et al., G.R. No. 112576, October 26, 1994,
237 SCRA 761.
19 LBC Express, Inc. vs. Court of Appeals, et al., G.R. No. 108670,
September 21, 1994, 236 SCRA 602.
20 Songcuan vs. Intermediate Appellate Court, et al., G.R. No. 75096,
October 23, 1990, 191 SCRA 28; Ramnani, et al. vs. Court of Appeals, et
al., G.R. No. 85494, May 7, 1991, 196 SCRA 731; Maersk
45
VOL. 257, MAY 17, 1996 45

correspondingly find, that the awards assessed against

petitioner on the aforestated items of damages are justified
and reasonable.
At this juncture, it may also be pointed out that it is
PAL’s duty to provide assistance to private respondents
and, for that matter, any other passenger similarly
inconvenienced due to delay in the completion of the
trasport and the receipt of their baggage. Therefore, its
unilateral and voluntary act of providing cash assistance is
deemed part of its obligation as an air carrier, and is
hardly anything to rave about. Likewise, arrangements for
and verification of requested hotel accommodations for
private respondents could and should have been done by
PAL employees themselves, and not by Dr. Miranda. It was
rather patronizing of PAL to make much of the fact that
they allowed Dr. Miranda to use its office telephone in
order to get a hotel room.
While it may be true that there was no direct evidence
on record of blatant rudeness on the part of PAL employees
towards the Mirandas, the fact that private respondents
were practically compelled to haggle for accommodations, a
situation unbefitting persons of their stature, is rather
demeaning and it partakes of discourtesy magnified by
PAL’s condescending attitude. Moreover, it cannot be
denied that the PAL employees herein concerned were
definitely less than candid, to put it mildly, when they
withheld information from private respondents that they
could actually be accommodated in a hotel of their choice.
***
Indeed, the flamboyant testimony of Oscar Jereza, as
PAL’s duty manager, merely pays lip-service to, without
putting into reality, the avowed company policy of
invariably making available and always granting the
requests for the kind and standard of accommodations
demanded by and
_______________
Line vs. Court of Appeals, et al., G.R. No. 94761, May 17, 1993, 222
SCRA 108.
*** His surname is alternately spelled as “Hereza” or “Jeresa” in the
records.
46

21
appropriate for its passengers. Certainly, a more efficient
service, and not a lackadaisical and disorganized system, is
expected of the nation’s flag carrier, especially on an
international flight.
For, on the picayune matter of transportation expenses,
PAL was obviously and unduly scrimping even on the small
amount to be given to the Mirandas. PAL failed to consider
that they were making arrangements for two paying round-
trip passengers, not penny-ante freeloaders, who had been
inconvenienced by the numerous delays in flight services
and careless handling of their belongings by PAL. The
niggardly attitude of its personnel in this unfortunate
incident, as well as their hair-splitting attempts at
justification, is a disservice to the image which our national
airline seeks to project in its costly advertisements.
We agree with the findings of the lower court that the
request of private respondents for monetary assistance of
P300.00 for taxi fare was indeed justified, considering that
there were two of them and they had several pieces of
luggage which had to be ferried between the airport and
the hotel. Also, the request for a small additional sum for
tips is equally reasonable since tipping, especially in a first-
rate hotel, is an accepted practice, of which the Court can
take judicial notice. This is aside from the fact that private
respondents, having just arrived from an extended trip
abroad, had already run out of Philippine currency, which
predicament was exacerbated by their additional stay in
Manila due to the off-loading of their baggage. All these
inconveniences should have warranted a commonsensical
and more understanding treatment from PAL, considering
that private respondents found themselves in this
unpleasant situation through no fault of theirs.
2. On its second issue, petitioner avers that the express
provisions on private respondents’ tickets stipulating that
liability for delay in delivery of baggage shall be limited to
US$20.00 per kilo of baggage delayed, unless the passenger
_______________
21 TSN, January 12, 1990, 20, 37-38.
47
VOL. 257, MAY 17, 1996 47

declares a higher valuation, constitutes the contract of

carriage between PAL and private respondents.
It further contends that these express provisions are in
compliance with the provisions of the Warsaw Convention
for the Unification of Rules Relating to International
Carrier by Air, to which the Philippines is a signatory.
Thereunder, it is asserted that PAL flight PR 101 from San
Francisco, U.S.A. to Manila, Philippines is an
“international transportation” well within the coverage of
the Warsaw Convention.
Petitioner obstinately insists on the applicability of the
provisions of the Warsaw Convention regarding the
carrier’s limited liability since the off-loading was
supposedly justified and not attended by bad faith. Neither
was there any claim for loss of baggage as in fact private
respondents’ baggage 22were, albeit delayed, received by
them in good condition.
The court a quo debunked petitioner’s arguments by this
holding:
“The defense raised by defendant airlines that it can be held liable

only under the terms of the Warsaw Convention (Answer, Special
and Affirmative Defenses, dated October 26, 1988) is of no
moment. For it has also been held that Articles 17, 18 and 19 of
the Warsaw Convention of 1929 merely declare the air carriers
liable for damages in the cases enumerated therein, if the
conditions specified are present. Neither the provisions of said
articles nor others regulate or exclude liability for other breaches
of contract by air carriers (Northwest
23
Airlines, Inc. vs. Nicolas
Cuenca, et al., 14 SCRA 1063).”
This ruling of the trial court was affirmed by respondent

Court of Appeals, thus:
“We are not persuaded. Appellees do not seek payment for loss of
any baggage. They are claiming damages arising from the
discriminatory off-loading of their baggag(e). That cannot be
limited by the printed conditions in the tickets and baggage
checks. Neither
____________________
22 Ibid., 28-29.
23 Ibid., 65-66; Original Record, 171-172.
48

can the Warsaw Convention exclude nor regulate the liability for
other breaches of contract by air carriers. A recognition of the
Warsaw Convention does not preclude the operation of our Civil
Code and related laws in determining the extent of liability of
common carriers in breach of contract 24of carriage, particularly for
willful misconduct of their employees.”
The congruent finding of both the trial court and

respondent court that there was discriminatory off-loading
being a factual question is, as stated earlier, binding upon
and can no longer be passed upon by this Court, especially
in view of and in deference to the affirmance of the same by
respondent appellate court.
There was no error on the part of the Court of Appeals
when it refused to apply the provisions of the Warsaw
Convention, for in the words of this Court in the
aforequoted Cathay Pacific case:
“x x x 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 in the enumerated cases and under certain
limitations. However, it must not be construed to preclude the
operation of the Civil Code and 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, which is the case
before Us. x x x.”
ACCORDINGLY, finding no reversible error, the

challenged judgment of respondent Court of Appeals is
hereby AFFIRMED in toto.
SO ORDERED.
Romero, Puno, Mendoza and Torres, Jr., JJ.,

concur.
___________________
24 Ibid., 43.
49
VOL. 257, MAY 22, 1996 49

Martinez vs. Zoleta
Judgment affirmed in toto.
Notes.—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])
The unprofessional indifference of a carrier’s personnel
despite full and actual knowledge of the damage to a
passenger’s cargo, just to be exculpated from liability on
pure technicality and bureaucratic subterfuge, smacks of
willful misconduct and insensitivity to passenger’s plight
tantamount to bad faith and renders unquestionable such
carrier’s liability for damages. (Philippine Airlines, Inc. vs.
Court of Appeals, 255 SCRA 48 [1996])
——o0o——
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10/17/21, 8:06 PM SUPREME COURT REPORTS ANNOTATED VOLUME 257

VOL. 257, MAY 17, 1996 33

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

Common Carriers; Air Transportation; A contract of air

damages would be bad faith in securing the contract and in the

34 SUPREME COURT REPORTS ANNOTATED

Philippine Airlines, Inc. vs. Court of Appeals

of its terms, or any other kind of deceit.

when it refused to apply the provisions of the Warsaw

VOL. 257, MAY 17, 1996 35

Philippine Airlines, Inc. vs. Court of Appeals

liability. The Warsaw Convention declares the carrier liable in the

PETITION for review on certiorari of a decision of the

The facts are stated in the opinion of the Court.

In this appeal by certiorari, petitioner Philippine Airlines,

“Wherefore, premises considered, judgment is hereby rendered

The factual antecedents of the present petition reveal that

United States of America on a regular flight of Philippine

1 Penned by Justice Ruben T. Reyes, with Justices Antonio M. Martinez

36 SUPREME COURT REPORTS ANNOTATED

there, they obtained confirmed bookings from PAL’s San

hotel supposedly because it was fully booked. Contrarily,

VOL. 257, MAY 17, 1996 37

ordered a la carte that they were allowed to do so by PAL

1. Anent the first issue, petitioner argues that there was

38 SUPREME COURT REPORTS ANNOTATED

in fulfilling its obligation under the contract of carriage

VOL. 257, MAY 17, 1996 39

cancellation of the flight to Surigao City due to

Crucial to the determination of the propriety of the

40 SUPREME COURT REPORTS ANNOTATED

“These claims were reasonable and appeared to be supported by

Q: Before a plane departs, your office will see to it the plane

complied with the weight limitation, passengers and baggages

VOL. 257, MAY 17, 1996 41

Q: In other words the trip from the mainland USA started in

“The aforesaid testimony constituted a clear admission in

The trial court further found that the situation was

7 Ibid., 62-64; Original Record, 168-170.

42 SUPREME COURT REPORTS ANNOTATED

“While we recognize an airline’s prerogative to off-load baggag(e)

The Court has time and again ruled, and it cannot be

VOL. 257, MAY 17, 1996 43

Appeals shall not be disturbed12

44 SUPREME COURT REPORTS ANNOTATED

unprofessional and proscribed conduct is attributable to

It must, of course, be borne in mind that moral damages

VOL. 257, MAY 17, 1996 45

correspondingly find, that the awards assessed against

46 SUPREME COURT REPORTS ANNOTATED

21 TSN, January 12, 1990, 20, 37-38.

VOL. 257, MAY 17, 1996 47

declares a higher valuation, constitutes the contract of

“The defense raised by defendant airlines that it can be held liable

This ruling of the trial court was affirmed by respondent

48 SUPREME COURT REPORTS ANNOTATED

The congruent finding of both the trial court and

“x x x although the Warsaw Convention has the force and effect of

ACCORDINGLY, finding no reversible error, the

Romero, Puno, Mendoza and Torres, Jr., JJ.,

VOL. 257, MAY 22, 1996 49

Judgment affirmed in toto.

Notes.—The contract of air carriage generates a