Korean Airlines CO., LTD., petitioner, vs.

Court of Appeals and

Juanito C. Lapuz, respondents.
G.R. No. 114061, August 3, 1994
FACTS:
Through Pan Pacific Recruiting Services, Inc., Juanito Lapuz signed a contract
to work in Saudi Arabia. Although initially identified as a "chance passenger,"
he was actually scheduled to fly out on Korean Airlines. Lapuz claims that he
was permitted to check in and given permission to leave. A KAL officer yelled,
"Down!" at him as he was ascending the stairs to the aircraft. Down! ", and he
was denied access to the flight. His ticket was cancelled when he requested
another reservation. He was unable to arrive at work, and as a result, he was
fired. KAL claimed that Pan Pacific's agent was notified there may be 2 tickets
available. Perico received preference, and Lapuz got the other seat in a lottery.
However, Perico was awarded the available seat because there was only one.
The trial court found that KAL was responsible for damages. The Court of
Appeals modified the damages awarded while upholding the ruling.

ISSUE:
Whether there is already a contract of carriage between KAL and Lapuz to hold
KAL liable for breach of contract.

RULING:
1) When Lapuz's name appeared in the KAL passenger manifest for flight
number, his status as a standby passenger was converted to one of a
confirmed passenger. KE 903. His successful passage through customs and
immigration demonstrates unequivocally that he had been confirmed as a
passenger of KAL on that aircraft. KAL's failure to deliver Lapuz to his
destination amounted to a breach of their agreement regarding the terms of
their carriage contract. A passenger transportation contract is distinct from all
other contracts in both nature and degree. The majority of the carrier's
customers are people who travel. It invites individuals to take advantage of the
conveniences and benefits it provides. The contract for air transportation
creates a relationship with a public obligation. The personnel of the carrier
have a duty to treat passengers with attention, compassion, and respect. They
have a right to protection from such employees' personal wrongdoing,
derogatory language, treatment, and abuse. As a result, whenever one of these
personnel behaves impolitely toward a passenger, the latter is entitled to file a
claim for damages against the carrier. In this instance, the breach of contract
was made worse when a KAL employee loudly yelled "Down! Down!" while
pointing at Lapuz instead of politely notifying him that he was a "wait-listed"
passenger, causing him embarrassment and public humiliation. According to
the evidence provided by Lapuz, he had certainly checked in at the departure
counter, gone through customs and immigration, gotten on the shuttle bus,
and then made his way to the aircraft ramp for KAL. In actuality, his luggage
had already been loaded onto the KAL flight to Jeddah. When he was abruptly
and impolitely denied boarding the plane, the contract of carriage between him
and KAL had already been finalized.

2) For the following reasons, the Court of Appeals awarded moral and
exemplary damages:

a. An award for moral damages was justified by the court's conclusions that
the defendant-appellant had broken the terms of the carriage contract in bad
faith and with wilful disregard for the plaintiff-rights appellant's as a
passenger.

b. In the present case, we find that defendant-appellant Korean Air Lines acted
maliciously and in bad faith by "bumping off" the appellant on November 8,
1980, and by treating him rudely and haughtily as a "patay gutom na” contract
worker fighting Korean Air Lines," which clearly demonstrates malice and bad
faith. As a result, the appellant is entitled to moral damages.

c. Exemplary damages may be granted given that the plaintiff-eligibility

appellant's for moral damages has been fully demonstrated through oral and
written proof. Despite not being expressly pleaded in the lawsuit, exemplary
damages may nevertheless be granted. On the other hand, a judgement of
exemplary damages is also appropriate to set a positive example for the general
public.

The evidence in this instance indicates that Lapuz's injury was not severe or
widespread enough to justify a P1.5 million compensation. We believe it is
reasonable and feasible to assess P100, 000 in his favour as moral and
exemplary damages.