1 Japan Airlines vs. CA, et al., G.R.

118664, August 7, 1998

Japan Airlines Carrier
Passengers:
Enrique Agana JAL Flight No. 061
Maria Angela Nina Agana JAL Flight No. 061
Adalia B. Francisco JAL Flight No. 061
Jose Miranda JAL Flight No. JL001

FACTS:
The passengers boarded Japan Airlines in San Francisco,
California bound for Manila on June 13, 1991 and as incentive
for travelling with JAL, they were to make an overnight stop
over at Narita, Japan at the airlines expense before proceeding
to Manila the next day.
However, on the final leg of their journey to Manila their trip
was cancelled due to Mt. Pinatubo eruption that unrelenting
ashfall blanketed NAIA rendering it inaccessible to airline traffic.
To accommodate the needs of the stranded passengers of JAL
they rebooked all the Manila-bound passengers to June 16 flight
and paid for their hotel expenses for their unexpected overnight
stay.
Again, the June 16 flight was cancelled due to NAIAs indefinite
closure and JAL informed the passengers that it would no longer
defray their hotel and accommodation expenses during their
stay in Narita. With that, the passengers forced to pay for their
expenses from their personal funds until June 21.
Still reeling from the experience, private respondents on June
25 commenced an action for damages against JAL before the
RTC of QC Branch alleging that JAL failed to live up to its duty to
provide care and comfort to its stranded passengers when it
refused to pay for their expenses from June 16 to 21 at Narita,
Japan.
JAL DEFENSE: Airline passengers have no vested right to these
amenities in case a flight is cancelled due to force majeure.

RTC RULING:
- Ruled in favor of the passengers and ordered JAL to pay
actual, moral and exemplary damages:
Enrique Agana, Adalia B. Francisco and Maria Angela Nina
Agana Php 1,246,936
Jose Miranda Php320,616.31
Attorneys Fees Php200,000

CA RULING:
- Affirmed the RTC ruling with exception of lowering the
damages awarded:
Moral damages Php200,000 per plaintiff
Exemplary damages Php300,000
Attorneys Fees Php100,000

ISSUE: Whether JAL as common carrier has the obligation to
shoulder the hotel and meal expenses of its stranded passengers
until they have reached their final destination even if delay were
caused by force majeure.

SC RULING:
No, the SC ruled that though we sympathize with the private
respondents plight we are unable to accept their contention.
We are not unmindful of the fact that in plethora of cases we
have consistently ruled that a contract to transport passengers
is quite different in kind and degree from any other contractual
relation. It is safe to conclude that it is a relationship imbued
with public interest. Failure on the part of the common carrier
to live up to the exacting standards of care and diligence
renders it liable for any damages that may be sustained by its
passengers. However, this is not to say that common carriers
are absolutely responsible for all the injuries or damages even if
the same were caused by a fortuitous event. To rule otherwise
would render the defense of force majeure as an exception
from any liability, illusory and ineffective.
There is no question that when a party is unable to fulfill his
obligation because of force majeure the general rule is that he
cannot be held liable for damages for non-performance. Hence,
when JAL was prevented from resuming its flight to Manila due
to the effects of Mt. Pinatubo eruption, whatever losses or
damages in the form of hotel and meal expenses the stranded
passengers incurred, cannot be charged to JAL. Yet it is
undeniable that JAL assumed the hotel expenses of respondents
for their unexpected stay on June 15..
Admittedly, to be stranded for almost one week in a foreign
land was an exasperating experience for the private
respondents. To be sure, they underwent distress and anxiety
during their unanticipated stay in Narita, but their predicament
was not due to the fault or negligence of JAL but the closure of
NAIA to international flights. Indeed, to hold JAL, in the absence
of bad faith or negligence, liable for the amenities of its
stranded passengers by reason of fortuitous event is too much
of a burden to assume.
However, JAL is not completely absolved from any liability. It
must be noted that private respondents bought tickets from the
United States with Manila as their final destination. While JAL
was no longer required to defray private respondents living
expenses during their stay in Narita on account of fortuitous
event, JAL had the duty to make the necessary arrangements to
transport private respondents on the first available connecting
flight to Manila. JAL reneged on its obligation to look after the
comfort and convenience of its passengers when it declassified
private respondents from transit passengers to new
passengers as a result of which private respondents were
obliged to make the necessary arrangements themselves for the
next flight to Manila.
CA ruling is hereby modified. JAL is ordered to pay each of the
private respondents nominal damages in the sum of
Php100,000 each including attorneys fees of Php50,000.

2 Korean Airlines Co. Ltd. vs. Court of Appeals, G.R. No. 114061,
August 3, 1994 (supra)
FACTS: Sometime in 1980, Juanito C. Lapuz, an automotive
electrician, was contracted for employment in Jeddah, Saudi Arabia,
for a period of one year through Pan Pacific Overseas Recruiting
Services, Inc. Lapuz was supposed to leave on November 8, 1980,
via Korean Airlines. Initially, he was "wait-listed," which meant that
he could only be accommodated if any of the confirmed passengers
failed to show up at the airport before departure. When two of such
passengers did not appear, Lapuz and another person by the name
of Perico were given the two unclaimed seats.
According to Lapuz, he was allowed to check in with one suitcase
and one shoulder bag at the check-in counter of KAL. He passed
through the customs and immigration sections for routine check-up
and was cleared for departure as Passenger No. 157 of KAL Flight
No. KE 903. Together with the other passengers, he rode in the
shuttle bus and proceeded to the ramp of the KAL aircraft for
boarding. However, when he was at the third or fourth rung of the
stairs, a KAL officer pointed to him and shouted "Down! Down!" He
was thus barred from taking the flight. When he later asked for
another booking, his ticket was canceled by KAL.
Consequently, he was unable to report for his work in Saudi Arabia
within the stipulated 2-week period and so lost his employment.
KAL, on the other hand, alleged that on November 8, 1980, Pan
Pacific Recruiting Services Inc. coordinated with KAL for the
departure of 30 contract workers, of whom only 21 were confirmed
and 9 were wait-listed passengers. The agent of Pan Pacific, Jimmie
Joseph, after being informed that there was a possibility of having
one or two seats becoming available, gave priority to Perico, who
was one of the supervisors of the hiring company in Saudi Arabia.
The other seat was won through lottery by Lapuz. However, only
one seat became available and so, pursuant to the earlier
agreement that Perico was to be given priority, he alone was
allowed to board.
The Regional Trial Court of Manila, adjudged KAL liable for damages,
disposing as follows:
Judgment is hereby rendered sentencing the defendant Korean Air
Lines to pay plaintiff Juanito C. Lapuz
The case is hereby dismissed with respect to defendant Pan Pacific
Overseas Recruiting Services, Inc. The counterclaims and cross-claim
of defendant Korean Air Lines Co., Ltd. are likewise dismissed.
On appeal, this decision was modified by the Court of Appeals as
follows:
The appealed judgment is hereby AFFIRMED with modifications as
to amount of damages.
KAL and Lapuz filed their respective motions for reconsideration,
which were both denied for lack of merit.
Hence, the present petitions for review which have been
consolidated because of the identity of the parties and the similarity
of the issues.
In G. R. No. 114061, KAL assails the decision of the appellate court
on the following grounds:
1. That the Court of Appeals erred in concluding that petitioner
committed a breach of contract of carriage notwithstanding lack of
proper, competent and sufficient evidence of the existence of such
contract.
2. That the Court of Appeals erred in not according the proper
evidentiary weight to some evidence presented and the fact that
private respondent did not have any boarding pass to prove that he
was allowed to board and to prove that his airline ticket was
confirmed.
3. That the Court of Appeals erred in concluding that the standby
passenger status of private respondent Lapuz was changed to a
confirmed status when his name was entered into the passenger
manifest.
In G. R. No. 113842, Lapuz seeks:
(a) the setting aside of the decision of the Court of Appeals insofar
as it modifies the award of damages;
ISSUE: WON there was a perfected contract of carriage between
Lapuz and KAL.
HELD: The Court has consistently affirmed that the findings of fact
of the Court of Appeals and the other lower courts are as a rule
binding upon it, subject to certain exceptions. As nothing in the
record indicates any of such exceptions, the factual conclusions of
the appellate court must be affirmed.
The status of Lapuz as standby passenger was changed to that of a
confirmed passenger when his name was entered in the passenger
manifest of KAL for its Flight No. KE 903. His clearance through
immigration and customs clearly shows that he had indeed been
confirmed as a passenger of KAL in that flight. KAL thus committed a
breach of the contract of carriage between them when it failed to
bring Lapuz to his destination.
This Court has held that a contract to transport passengers is
different in kind and degree from any other contractual
relation. The business of the carrier is mainly with the traveling
public. It invites people to avail themselves of the comforts and
advantages it offers. The contract of air carriage generates a
relation attended with a public duty. Passengers have the right to
be treated by the carrier's employees with kindness, respect,
courtesy and due consideration. They are entitled to be protected
against personal misconduct, injurious language, indignities and
abuses from such employees. So it is that any discourteous conduct
on the part of these employees toward a passenger gives the latter
an action for damages against the carrier.
The breach of contract was aggravated in this case when, instead of
courteously informing Lapuz of his being a "wait-listed" passenger, a
KAL officer rudely shouted "Down! Down!" while pointing at him,
thus causing him embarrassment and public humiliation.
KAL argues that the evidence of confirmation of a chance passenger
status is not through the entry of the name of a chance passenger in
the passenger manifest nor the clearance from the Commission on
Immigration and Deportation, because they are merely means of
facilitating the boarding of a chance passenger in case his status is
confirmed.
We are not persuaded.
The evidence presented by Lapuz shows that he had indeed checked
in at the departure counter, passed through customs and
immigration, boarded the shuttle bus and proceeded to the ramp of
KAL's aircraft. In fact, his baggage had already been loaded in KAL's
aircraft, to be flown with him to Jeddah. The contract of carriage
between him and KAL had already been perfected when he was
summarily and insolently prevented from boarding the aircraft.
Judgment is AFFIRMED, but with the modification that the legal
interest on the damages awarded to private respondent should
commence from the date of the decision of the trial court on
November 14, 1990.
3 China Airlines vs. Chiok, 407 SCRA 432, G.R. No. 152122. July
30, 2003 (supra)
FACTS:
Private respondent Chiok purchased airline passenger ticket
from petitioner China Airlines endorsable to PAL (MNL-TPEI-
HKG-MNL).
Before taking his trip, Chiok sought confirmations of his flight at
the CALs and PALs office.
Upon his return trip to Manila, his flight was cancelled due to a
typhoon but he was informed that all confirmed tickets were
automatically booked for the next flight the next day.
He then informed PAL personnel of the importance of his arrival
to Manila.
On the flight date, PAL personnel informed Chiok that his name
was not on the computers list.
Chiok confronted the PALs reservation officer who confirmed
his ticket/flight and was informed that his name was on the list.
Finally, Chiok was able to depart after another confirmation
(and after losing personal effects).
Chiok then filed complaint for damages against CAL and PAL
alleging that several confirmations, he was refused
accommodation and that both are solidarily liable since one is
the agent of the other.
Trial court: ruled in favor of Chiok holding the airlines solidarily
liable.
CA: affirmed trial court stating that carrier reneged on its obligation
to transport passenger despite confirmations of his flight.
CALs Defense: only PAL is liable following Art 30, Warsaw
Convention
ISSUE: W/N CAL is liable for damages.
HELD: Yes. The contract between CAL and Chiok w/ the ticket
endorsable to PAL has always been regarded 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).
As the principal in the contract of carriage, CAL is liable even when
the breach of contract had occurred, not on its own flight, but on
that of another airline (quoting British Airways v. Court of Appeals).
Article 1, Section 3 of the Warsaw Convention:
Transportation to be performed by several successive air carriers
shall be deemed, for the purposes of this Convention, to be one
undivided transportation, if it has been regarded by the parties as a
single operation, whether it has been agreed upon under the form
of a single contract or of a series of contracts, and it shall not lose its
international character merely because one contract or a series of
contracts is to be performed entirely within a territory subject to
the sovereignty, suzerainty, mandate, or authority of the same High
Contracting Party.
Article 15 of IATA-Recommended Practice similarly provides:
Carriage to be performed by several successive carriers under one
ticket, or under a ticket and any conjunction ticket issued therewith,
is regarded as a single operation.
On the award of moral and exemplary damages: PALs negligence
was so gross and reckless that it amounted to bad faith (Art 1764,
2220).
Although the rule is that moral damages predicated upon a breach
of contract of carriage may only be recoverable in instances where
the mishap results in the death of a passenger, or where the carrier
is guilty of fraud or bad faith, there are situations where the
negligence of the carrier is so gross and reckless as to virtually
amount to bad faith, in which case, the passenger likewise becomes
entitled to recover moral damages.
DISPOSITIVE: WHEREFORE, the Petition is DENIED. Costs against
petitioner.
4 Singapore Airlines Ltd. vs. Fernandez
Facts: Respondent Andion Fernandez is an acclaimed soprano here
in the Philippines and abroad. She was invited to sing before the
King and Queen of Malaysia. For this singing engagement, an airline
passage ticket was purchased from petitioner Singapore Airlines
which would transport her to Manila from Frankfurt, Germany.
From Manila, she would proceed to Malaysia on the next day. The
petitioner issued the respondent a Singapore Airlines ticket for
Flight No. SQ 27, leaving Frankfurt,Germany on January 27,
1991 bound for Singapore with onward connections
from Singapore to Manila. Flight No. SQ 27 was scheduled to
leave Frankfurt at 1:45 in the afternoon of January 27, 1991, arriving
at Singapore at 8:50in the morning of January 28, 1991. The
connecting flight from Singapore to Manila, Flight No. SQ 72, was
leavingSingapore at 11:00 in the morning of January 28, 1991,
arriving in Manila at 2:20 in the afternoon of the same day.
On January 27, 1991, Flight No. SQ 27 left Frankfurt but arrived
in Singapore two hours late or at about 11:00in the morning
of January 28, 1991. By then, the aircraft bound for Manila had left
as scheduled, leaving the respondent and about 25 other
passengers stranded in the Changi Airport in Singapore. The
Respondent was forced to stay in Singapore for that day. The next
day, after being brought back to the airport, the respondent
proceeded to petitioners counter which says: Immediate Attention
To Passengers with Immediate Booking. There were four or five
passengers in line. The respondent approached petitioners male
employee at the counter to make arrangements for immediate
booking only to be told: Cant you see I am doing something. She
explained her predicament but the male employee uncaringly
retorted: Its your problem, not ours. The respondent never made
it to Manila and was forced to take a direct flight
from Singapore to Malaysia. Her mother also had to travel to
Malaysia bringing with her respondents wardrobe and personal
things needed for the performance that caused them to incur an
expense of about P50,000.
As a result of this incident, the respondents performance before
the Royal Family of Malaysia was below par. Because of the rude
and unkind treatment she received from the petitioners personnel
in Singapore, the respondent was engulfed with fear, anxiety,
humiliation and embarrassment causing her to suffer mental fatigue
and skin rashes. She was thereby compelled to seek immediate
medical attention upon her return to Manila for acute urticaria.
RTC: The RTC rendered a decision ordering SG Airlines to pay
Fernandez for the damages incurred.
CA: The CA promulgated the assailed decision finding no
reversible error in the appealed decision of the trial court.
Issue: WoN SG Airlines can be held liable for damages incurred by
the Respondent.
Ruling: SGs contention - The petitioner assails the award of
damages contending that it exercised the extraordinary diligence
required by law under the given circumstances. The delay of Flight
No. SQ 27 from Frankfurt to Singapore on January 28, 1991 for more
than two hours was due to a fortuitous event and beyond
petitioners control. Inclement weather prevented the petitioners
plane coming from Copenhagen, Denmark to arrive in Frankfurt on
time. The delay was even compounded when the plane could not
travel the normal route which was through the Middle East due to
the raging Gulf War at that time. It had to pass through the
restricted Russian airspace which was more congested.
The petition is barren of merit.
When an airline issues a ticket to a passenger, confirmed for a
particular flight on a certain date, a contract of carriage arises. The
passenger then has every right to expect that he be transported on
that flight and on that date. If he does not, then the carrier opens
itself to a suit for a breach of contract of carriage. In an action for
breach of contract of carriage, the aggrieved party does not have to
prove that the common carrier was at fault or was negligent. All
that is necessary to prove is the existence of the contract and the
fact of its non-performance by the carrier.
In the case at bar, it is undisputed that the respondent carried a
confirmed ticket for the two-legged trip
from Frankfurt to Manila: 1) Frankfurt-Singapore; and 2) Singapore-
Manila. In her contract of carriage with the petitioner, the
respondent certainly expected that she would fly to Manilaon Flight
No. SQ 72 on January 28, 1991. Since the petitioner did not
transport the respondent as covenanted by it on said terms, the
petitioner clearly breached its contract of carriage with the
respondent. The respondent had every right to sue the petitioner
for this breach. The defense that the delay was due to fortuitous
events and beyond petitioners control is unavailing. Indeed, in the
instant case, petitioner was not without recourse to enable it to
fulfill its obligation to transport the respondent safely as scheduled
as far as human care and foresight can provide to her destination.
Indeed, in the instant case, petitioner was not without recourse to
enable it to fulfill its obligation to transport the respondent safely as
scheduled as far as human care and foresight can provide to her
destination. The respondent was not remiss in conveying her
apprehension about the delay of the flight when she was still
in Frankfurt. Upon the assurance of petitioners personnel
in Frankfurt that she will be transported to Manila on the same
date, she had every right to expect that obligation fulfilled. When a
passenger contracts for a specific flight, he has a purpose in making
that choice which must be respected. This choice, once exercised,
must not be impaired by a breach on the part of the airline without
the latter incurring any liability. For petitioners failure to bring the
respondent to her destination, as scheduled, we find the petitioner
clearly liable for the breach of its contract of carriage with the
respondent.
5 Santos III vs. Northwest Orient Airlines, G.R. No. 101538, 210
SCRA 256 , June 23, 1992 CAI

6 Mapa,et al. vs. CA, et al., G.R. 122308, 275 SCRA 286 , July 08,
1997 OFE

7 Lhuillier vs. British Airways, G.R. No. 171092, 615 SCRA 380,
March 15, 2010 BRY

8 Sabena Belgian World Airlines vs. CA, 255 SCRA 38, G.R. No.
104685,March 14, 1996. RYAN
Characters:
Ma. Paula San Agustin > plaintiff
Sabena Belgian World Airlines > petitioner-common carrier
CASE: involves the issue of an airline's liability for lost luggage
FACTS:
plaintiff was a passenger on board defendant airline originating
from Casablanca to Brussels, Belgium on her way back to
Manila.
Plaintiff checked in her luggage which contained her valuables,
namely: jewelries valued at $2,350.00; clothes $1,500.00
shoes/bag $150; accessories $75; luggage itself $10.00; or a
total of $4,265.00, for which she was issued Tag No. 71423. She
stayed overnight in Brussels and her luggage was left on board.
Plaintiff arrived at Manila International Airport and submitted
baggage tag to facilitate the release of her luggage but the
luggage was missing. She was advised to accomplish and submit
a property Irregularity Report which she submitted and filed on
the same day.
She followed up her claim but the luggage remained to be
missing
she filed her formal complaint with Ferge Massed, defendant's
Local Manager, demanding immediate attention
on the occasion of plaintiffs following up of her luggage claim,
she was furnished copies of defendant's telexes with an
information that the Burssel's Office of defendant found the
luggage and that they have broken the locks for identification
Plaintiff was assured by the defendant that it has notified its
Manila Office that the luggage will be shipped to Manila
unfortunately plaintiff was informed that the luggage was lost
for the second time
At the time of the filing of the complaint, the luggage with its
content has not been found
Trial court: Plaintiff demanded from the defendant the money
value of the luggage and its contents amounting to $4,265.00 or
its exchange value, but defendant refused to settle the claim
Sabena defense:
1. asserts in its Answer and its evidence tend to show
that while it admits that the plaintiff was a
passenger on board with a piece of checked in
luggage, the loss of the luggage was due to
plaintiff's sole if not contributory negligence
2. that she did not declare the valuable items in her
checked in luggage at the flight counter when she
checked in for her flight from Casablanca to Brussels
so that either the representative of the defendant
at the counter would have advised her to secure an
insurance on the alleged valuable items and
required her to pay additional charges, or would
have refused acceptance of her baggage as required
by the generally accepted practices of international
carriers
3. that Section 9(a), Article IX of General Conditions of
carriage requiring passengers to collect their
checked baggage at the place of stop over, plaintiff
neglected to claim her baggage at the Brussels
Airport; that plaintiff should have retrieved her
undeclared valuables from her baggage at the
Brussels Airport
4. issued to plaintiff in Manila incorporated in all
Sabena tickets a warning that "Items of value
should be carried on your person" and that some
carriers assume no liability for fragile, valuable or
perishable articles and that further information may
be obtained from the carrier for guidance
5. that granting without conceding that defendant is
liable, its liability is limited only to US $20.00 per
kilo due to plaintiffs failure to declare a higher value
on the contents of her checked in luggage and pay
additional charges thereon
TRIAL COURT: ruled in favour of San Agustin, ordered Sabena to
pay full amount 4,265 USD in legal exchange plus damages
CA: Affirmed in toto
Sabena contention:
1. 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.
2. 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 passenger and that the liability of
the airline for 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
3. Petitioner cites Section 5(c), Article IX, of the General
Conditions of Carriage, signed at Warsaw, Poland,
amended by the Hague Protocol of 1955, generally
observed by International carriers, stating, among other
things: 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
valuable
ISSUE: W/N petitioner is liable for the extent of damages
HELD:
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 no 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.
o Art. 1733 of the [Civil] Code provides that from the
very nature of their business and by reasons of
public policy, common carriers are bound to
observe extraordinary diligence in the vigilance over
the goods transported by them.
o This extraordinary responsibility, according to Art.
1736, lasts from the time the goods are
unconditionally placed in the possession of and
received by the carrier until they are delivered
actually or constructively to the consignee or
person who has the right to receive them.
o Art. 1737 states that the common carrier's duty to
observe extraordinary diligence in the vigilance over
the goods transported by them remains in full force
and effect even when they are temporarily
unloaded or stored in transit
o And Art. 1735 establishes the presumption that if
the goods are lost, destroyed or deteriorated,
common carriers are presumed to have been at
fault or to have acted negligently, unless they prove
that they had observed extraordinary diligence as
required in Article 1733
o The only exceptions to the foregoing extraordinary
responsibility of the common carrier is when the
loss, destruction, or deterioration of the goods is
1734.
The above rules remain basically unchanged even when the
contract is breached by tort

although noncontradictory
principles on quasi-delict may then be assimilated as also
forming part of the governing law. Petitioner is not thus
entirely off track when it has likewise raised in its defense
the tort doctrine of proximate cause. Unfortunately for
petitioner, however, the doctrine cannot, in this particular
instance, support its case
the appellate court, given all the facts before it, sustained
the trial court in finding petitioner ultimately guilty of "gross
negligence" in the handling of private respondent's luggage.
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, which certainly cannot be said to be
without basis, foreclose whatever rights petitioner might
have had to the possible limitation of liabilities enjoyed by
international air carriers under the Warsaw Convention
SC cited Alitalia vs. Intermediate Appellate Court: 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
The Court thus sees no error in the preponderant
application to the instant case by the appellate court, as
well as by the trial court, of the usual rules on the extent of
recoverable damages beyond the Warsaw limitations.
Under domestic law and jurisprudence (the Philippines
being the country of destination), the attendance of gross
negligence (given the equivalent of fraud or bad faith) holds
the common carrier liable for all damages which can be
reasonably attributed, although unforeseen, to the non-
performance of the obligation
DISPOSITIVE: decision appealed from is AFFIRMED



9 Pan American Airlines vs. Rapadas, 209 SCRA 67 (supra)
Characters:
Jose Rapadas > respondent-passenger
PAN AMERICAN WORLD AIRWAYS > petitioner-common carrier
FACTS:
Rapadas held passenger ticket and baggage claim tag for
petitioners flight w/ the route from Guam to Manila.
Before boarding he was ordered to by petitioner's handcarry
control agent to check-in his Samsonite attache case.
Rapadas protested pointing to the fact that other co-passengers
were permitted to handcarry bulkier baggages. He stepped out
of the line only to go back again at the end of it to try if he can
get through without having to register his attache case.
However, the same man in charge of handcarry control did not
fail to notice him and ordered him again to register his baggage.
For fear that he would miss the plane if he insisted and argued
on personally taking the valise with him, he acceded to checking
it in.
He then gave his attache case to his brother who happened to
be around and who checked it in for him, but without declaring
its contents or the value of its contents.
He was given a Baggage Claim Tag.
Upon arrival in Manila, Rapadas was able to claim all his
checked-in baggage except for the attach case.
Rapadas then sent his son (because he was ill) to request for the
search of the missing luggage and petitioner exerted efforts to
locate the said luggage.
Petitioner then required Rapadas to put the request in writing,
to w/c Rapadas filled up a baggage claim blank form. Follow-ups
and calls to the head of the baggage section were made by
Rapadas.
Rapadas received a letter from petitioner offering to settle the
claim for 100 hundred dollars representing the petitioner's
alleged limit of liability for loss or damage to a passenger's
personal property under the contract of carriage between
Rapadas and PAN AM.
Refusing to accept this kind of settlement, Rapadas filed the
instant action for damages alleging that PAN AM discriminated
or singled him out in ordering that his luggage be checked in. He
also alleged that PAN AM neglected its duty in the handling and
safekeeping of his attache case from the point of embarkation
in Guam to his destination in Manila. He placed the value of the
lost attache case and its contents at US$42,403.90. According to
him, the loss resulted in his failure to pay certain monetary
obligations, failure to remit money sent through him to
relatives, inability to enjoy the fruits of his retirement and
vacation pay earned from working in Tonga Construction
Company (he retired in August 1974) and inability to return to
Tonga to comply with then existing contracts.
Petitioner acknowledged responsibility for the loss of the
attache case but asserted that the claim was subject to the
"Notice of Baggage Liability Limitations" allegedly attached to
and forming part of the passenger ticket. The petitioner argued
that the same notice was also conspicuously posted in its offices
for the guidance of the passengers. The petitioner maintains
that its liability for the lost baggage of respondent Rapadas was
limited to $160.00 since the latter did not declare a higher value
for his baggage and did not pay the corresponding additional
charges.
Trial Court held petitioner liable for damages.
CA affirmed trial court in toto.
ISSUE: W/N a passenger is bound by the terms of a passenger ticket
declaring that the limitations of liability set forth in the Warsaw
Convention as amended by the Hague Protocol, shall apply in case
of loss, damage or destruction to a registered luggage of a
passenger.
HELD: Yes. SC finds sufficient basis under the particular facts of this
case for the availment of the liability limitations under the Warsaw
Convention.
Reasons:
There is no dispute, and the courts below admit, that there was
such a Notice appearing on page two (2) of the airline ticket
stating that the Warsaw Convention governs in case of death or
injury to a passenger or of loss, damage or destruction to a
passenger's luggage.
The passenger, upon contracting with the airline and receiving
the plane ticket, was expected to be vigilant insofar as his
luggage is concerned. If the passenger fails to adduce evidence
to overcome the stipulations, he cannot avoid the application of
the liability limitations.
The facts show that the private respondent actually refused to
register the attache case and chose to take it with him despite
having been ordered by the PANAM agent to check it in. In
attempting to avoid registering the luggage by going back to the
line, private respondent manifested a disregard of airline rules
on allowable handcarried baggages. Prudence of a reasonably
careful person also dictates that cash and jewelry should be
removed from checked-in-luggage and placed in one's pockets
or in a handcarried Manila-paper or plastic envelope.
The alleged lack of enough time for him to make a declaration
of a higher value and to pay the corresponding supplementary
charges cannot justify his failure to comply with the
requirement that will exclude the application of limited liability.
Had he not wavered in his decision to register his luggage, he
could have had enough time to disclose the true worth of the
articles in it and to pay the extra charges or remove them from
the checked-in-luggage. Moreover, an airplane will not depart
meantime that its own employee is asking a passenger to
comply with a safety regulation.
Passengers are also allowed one handcarried bag each provided
it conforms to certain prescribed dimensions. If Mr. Rapadas
was not allowed to handcarry the lost attache case, it can only
mean that he was carrying more than the allowable weight for
all his luggages or more than the allowable number of
handcarried items or more than the prescribed dimensions for
the bag or valise. The evidence on any arbitrary behavior of a
Pan Am employee or inexcusable negligence on the part of the
carrier is not clear from the petition. Absent such proof, we
cannot hold the carrier liable because of arbitrariness,
discrimination, or mistreatment.
But SC ordered petitioner to pay Rapadas 400 hundred dollars
(instead of $160), attorneys fees (because the Warsaw
Convention does not preclude an award of attorneys fees) and
costs of suit.
As to the $400: The lost luggage was declared as weighing
around 18 pounds or approximately 8 kilograms. At $20.00 per
kilogram, the petitioner offered to pay $160.00 as a higher
value was not declared in advance and additional charges were
not paid. We note, however, that an amount of $400.00 per
passenger is allowed for unchecked luggage. Since the checking-
in was against the will of the respondent, we treat the lost bag
as partaking of involuntarily and hurriedly checked-in luggage
and continuing its earlier status as unchecked luggage. The fair
liability under the petitioner's own printed terms is $400.00.

10 Cathay Pacific vs. Spouses Vasquez, G.R. 150843, March 14,
2003 LEI
Characters:
1. CATHAY PACIFIC AIRWAYS petitioner; common carrier
engaged in the business of transporting passengers and
goods by air
2. Sps. Dr. Daniel Earnshaw Vazquez and Maria Luisa Madrigal
Vazquez - Respondents; are frequent flyers of Cathay and
are Gold Card members of its Marco Polo Club
3. Clara Lai Han Chiu ground attendant of Cathay

Facts: As part of its marketing strategy, Cathay accords its frequent
flyers membership in its Marco Polo Club. The members enjoy
several privileges, such as priority for upgrading of booking without
any extra charge whenever an opportunity arises.
On their return flight to Manila from Hongkong on 28
September 1996, Dr. Vazquez refused the upgrade, reasoning that it
would not look nice for them as hosts to travel in First Class and
their guests, in the Business Class; and moreover, they were going
to discuss business matters during the flight. He also told Ms. Chiu
that she could have other passengers instead transferred to the
First Class Section. Ms. Chiu informed the latter that the Business
Class was fully booked, and that since they were Marco Polo Club
members they had the priority to be upgraded to the First Class. Dr.
Vazquez continued to refuse, so Ms. Chiu told them that if they
would not avail themselves of the privilege, they would not be
allowed to take the flight. Eventually, after talking to his two
friends, Dr. Vazquez gave in.
Upon their return to Manila, the Vazquezes, in a letter
addressed to Cathays Country Manager, demanded that they be
indemnified for the "humiliation and embarrassment" caused by its
employees and written letter of apology from the management of
Cathay and from Ms. Chui.
In its reply of 14 October 1996, Mr. Larry Yuen, the assistant
to Cathays Country Manager, informed the Vazquezes that Cathay
would investigate the incident and get back to them within a weeks
time.
After Cathays failure to give them any feedback within its
self-imposed deadline, the Vazquezes instituted before the Regional
Trial Court of Makati City an action for damages against Cathay.
In their complaint, the Vazquezes alleged that when they
informed Ms. Chiu that they preferred to stay in Business Class, Ms.
Chiu "obstinately, uncompromisingly and in a loud, discourteous
and harsh voice threatened" that they could not board and leave
with the flight unless they go to First Class, since the Business Class
was overbooked.
In its answer, Cathay alleged that when Ms. Chiu informed
the Vazquezes that they were upgraded to First Class, Dr. Vazquez
refused. He then stood at the entrance of the boarding apron,
blocking the queue of passengers from boarding the plane, which
inconvenienced other passengers. He shouted that it was
impossible for him and his wife to be upgraded without his two
friends who were traveling with them.

RTC Ruling: RTC found favor with Vasquezes.

CA Ruling: CA affirmed but deleted the award for exemplary
damages and reduced the award for moral and nominal damages.
CA dismissed motions for reconsideration of both parties.

Cathay Defense: Cathay maintains that the award for moral
damages has no basis, since the Court of Appeals found that there
was no "wanton, fraudulent, reckless and oppressive" display of
manners on the part of its personnel; and that the breach of
contract was not attended by fraud, malice, or bad faith. If any
damage had been suffered by the Vazquezes, it was damnum
absque injuria, which is damage without injury, damage or injury
inflicted without injustice, loss or damage without violation of a
legal right, or a wrong done to a man for which the law provides
no remedy.

Issue: The key issues for our consideration are whether (1) by
upgrading the seat accommodation of the Vazquezes from Business
Class to First Class Cathay breached its contract of carriage with the
Vazquezes; (2) the upgrading was tainted with fraud or bad faith.

SC Ruling: 1) Yes. Undoubtedly, a contract of carriage existed
between Cathay and the Vazquezes. They voluntarily and freely
gave their consent to an agreement whose object was the
transportation of the Vazquezes from Manila to Hong Kong and
back to Manila, with seats in the Business Class Section of the
aircraft, and whose cause or consideration was the fare paid by the
Vazquezes to Cathay.
Breach of contract is defined as the "failure without legal
reason to comply with the terms of a contract." It is also defined as
the "[f]ailure, without legal excuse, to perform any promise which
forms the whole or part of the contract." We note that in all their
pleadings, the Vazquezes never denied that they were members of
Cathays Marco Polo Club. But, just like other privileges, such
priority could be waived. The Vazquezes should have been
consulted first whether they wanted to avail themselves of the
privilege or would consent to a change of seat accommodation
before their seat assignments were given to other passengers.
Normally, one would appreciate and accept an upgrading, for it
would mean a better accommodation. But, whatever their reason
was and however odd it might be, the Vazquezes had every right to
decline the upgrade and insist on the Business Class
accommodation they had booked for and which was designated in
their boarding passes. By insisting on the upgrade, Cathay breached
its contract of carriage with the Vazquezes.
2.) No. Fraud has been defined to include an inducement through
insidious machination. Insidious machination refers to a deceitful
scheme or plot with an evil or devious purpose. Deceit exists where
the party, with intent to deceive, conceals or omits to state material
facts and, by reason of such omission or concealment, the other
party was induced to give consent that would not otherwise have
been given.
Bad faith does not simply connote bad judgment or
negligence; it imports a dishonest purpose or some moral obliquity
and conscious doing of a wrong, a breach of a known duty through
some motive or interest or ill will that partakes of the nature of
fraud.
We find no persuasive proof of fraud or bad faith in this
case. The Vazquezes were not induced to agree to the upgrading
through insidious words or deceitful machination or through willful
concealment of material facts. Upon boarding, Ms. Chiu told the
Vazquezes that their accommodations were upgraded to First Class
in view of their being Gold Card members of Cathays Marco Polo
Club. She was honest in telling them that their seats were already
given to other passengers and the Business Class Section was fully
booked.
Neither was the transfer of the Vazquezes effected for some
evil or devious purpose. Needless to state, an upgrading is for the
better condition and, definitely, for the benefit of the passenger.
We are not persuaded by the Vazquezes argument that the
overbooking of the Business Class Section constituted bad faith on
the part of Cathay. It is clear from Section 3 of the Economic
Regulation No. 7 of the Civil Aeronautics Board that an overbooking
that does not exceed ten percent is not considered deliberate and
therefore does not amount to bad faith.
Before writing finis to this decision, we find it well-worth to
quote the apt observation of the Court of Appeals regarding the
awards adjudged by the trial court:
We are not amused but alarmed at the lower courts
unbelievable alacrity, bordering on the scandalous, to award
excessive amounts as damages. In their complaint, appellees asked
for P1 million as moral damages but the lower court awarded P4
million; they asked for P500,000.00 as exemplary damages but the
lower court cavalierly awarded a whooping P10 million; they asked
for P250,000.00 as attorneys fees but were awarded P2 million;
they did not ask for nominal damages but were awarded
P200,000.00. It is as if the lower court went on a rampage, and why
it acted that way is beyond all tests of reason. In fact the
excessiveness of the total award invites the suspicion that it was the
result of "prejudice or corruption on the part of the trial court."
Nonetheless, considering that the breach was intended to
give more benefit and advantage to the Vazquezes by upgrading
their Business Class accommodation to First Class because of their
valued status as Marco Polo members, we reduce the award for
nominal damages to P5,000. WHEREFORE, the instant petition is
hereby partly GRANTED. The Decision of the Court of Appeals of 24
July 2001 in CA-G.R. CV No. 63339 is hereby MODIFIED, and as
modified, the awards for moral damages and attorneys fees are set
aside and deleted
11 Lufthansa German Airlines vs. CA, G.R. No. 83612, 238 SCRA
290, November 24, 1994 MONETTE
Characters:
Tirso V. Antiporda, Sr. > petitioner; 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 Sycip, Gorres, Velayo & Co. (SGV) to be the
institutional financial specialist for the agricultural credit
institution project of the Investment and Development Bank of
Malawi in Africa. According to the letter of August 30, 1984
addressed to Antiporda, he would render his services to the
Malawi bank as an independent contractor. For the
engagement, Antiporda would be provided one round-trip
economy ticket from Manila to Blantyre and back.
Lufthansa German Airlines > petitioner-carrier
Air Kenya or Kenya Airways > airline that was supposed to
transport Antiporda from Bombay to Malawi
Gerard Matias > Lufthansa's traffic officer (extra)
Five-leg Trip: all confirmed by Lufthansa (Tandaan: Yung Bombay
to Blantyre trips ang naka-endorse sa Air Kenya. Si Antiporda, sa
Bombay na-stranded.)
Manila to Singapore
Singapore to Bombay
Bombay to Nairobi
Nairobi to Lilongwe
Lilongwe to Blantyre (Malawi)
FACTS:
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
to leave Bombay in the morning of September 26, 1984.
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, Matias arrived and asked for Antiporda's
ticket and told him to just sit down and wait.
Pagbalik ni Matias, Antiporda was informed by Benent (kasama
ni Matias), duty officer of Lufthansa, that his seat in Air Kenya 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 in the afternoon
of September 26, 1984. He requested that the situation be
remedied but Air Kenya left for Nairobi without him on board.
Stranded in Bombay, Antiporda was booked for Nairobi via
Addis Ababa the following day. 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.
Thereafter, Antiporda's counsel wrote the general manager of
Lufthansa in Manila demanding damages for the airline's
"malicious, wanton, disregard of the contract of carriage." In
reply, Lufthansa general manager assured Antiporda that the
matter would be investigated.
Antiporda then filed a complaint against Lufthansa w/ the
Quezon City-RTC after getting no positive action from Lufthansa.
Trial Court: Lufthansa breached the contract to transport Antiporda
from Manila to Blantyre on a trip of five legs. The contract of air
transportation was exclusively between the plaintiff Antiporda and
the defendant Lufthansa, the latter merely endorsing its
performance to Air Kenya, as its subcontractor or agent.
CA affirmed trial court explaining that although the contract of
carriage was to be performed by several air carriers, the same is to
be treated as a single operation conducted by Lufthansa because
Antiporda dealt exclusively with it which issued him a Lufthansa
ticket for the entire trip. By issuing a confirmed ticket, Lufthansa in
effect guaranteed Antiporda a sure seat with Air Kenya. Private
respondent Antiporda, maintained the Court of Appeals, had the
right to expect that his ticket would be honored by Air Kenya which,
in the legal sense, Lufthansa had endorsed and, in effect,
guaranteed the performance of its principal engagement to carry
out his five-leg trip.
Lufthansas Defense:
Lufthansa only acted as the ticket-issuing agent of other
carriers. 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.
Lufthansa invoked Section 2, Article 30 of the Warsaw
Convention which expressly stipulates that in cases where the
transportation of passengers or goods is performed by various
successive carriers, the passenger can take action only against
the carrier which performed the transportation, during which
the accident or delay occurred. Lufthansa further advanced the
theory that this provision of the Warsaw Convention is
applicable to the present case, contrary to the decision of the
Court of Appeals which relied on the Supreme Court ruling in
KLM Royal Dutch Lines. For Lufthansa, "bumping-off" is
considered delay since delay would inevitably result therefrom.
It implored this Court to re-examine our ruling in KLM and take
heed of jurisprudence in the U.S. where "delay," unlike in our
ruling in KLM, contemplates the instance of "bumping-off." In
KLM, we held that the term "delay" does not encompass the
instance of "bumping-off," the latter having been defined as
refusal to carry or transport a passenger.
Antipordas Contention: 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.
ISSUE: W/N petitioner Lufthansa, 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.
HELD: SC ruled in favor of Antiporda stating that the basis of his
claim is well-founded.
Single Operation. Stipulation in the Conditions of Contract
(printed on the ticket) showed that: carriage to be performed
hereunder by several successive carriers is regarded as a single
operation
Lufthansa NOT a ticket-issuing agent of Air Kenya. In the very
nature of their contract, Lufthansa is clearly the principal 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.
(Lufthansa in effect guaranteed that the successive carriers,
such as Air Kenya, would honor his ticket.)
Sec 2, Art 30, Warsaw Convention NOT applicable. Article 30 of
the Warsaw Convention cannot be sustained; reiterating what
has been settled in KLM Royal Dutch Airlines v. Court of
Appeals: That article presupposes the occurrence of either an
accident or a delay, neither of which took place at the Barcelona
airport; what is here manifest, instead, is that the Aer Lingus,
through its manager there, refused to transport the
respondents to their planned and contracted destination.
Sections (1) and (2), Article 30 of the Warsaw Convention provide:
Art. 30 (1). In the case of transportation to be performed by various
successive carriers and falling 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 the 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 accident or the delay
occurred, save in the case where, by express agreement, the first
carrier has assumed liability for the whole journey. (Emphasis
supplied).
Ang sinsabi dito eto: Antiporda's cause of action is not
premised on the occurrence of an accident or delay as
contemplated under Section 2 of said Article but on Air
Kenya's refusal to transport him in order to accommodate
another.
In connection to that, sabi ng SC, magkaiba ang definition ng
DELAY at BUMPING-OFF: "Bumping-off," which is the
refusal to transport passengers with confirmed reservation
to their planned and contracted destinations, totally
forecloses said passengers' right to be transported, whereas
delay merely postpones for a time being the enforcement
of such right.
Consequently, Section 2, Article 30 of the Warsaw
Convention which does not contemplate the instance of
"bumping-off" but merely of simple delay, cannot provide a
handy excuse for Lufthansa as to exculpate it from any
liability to Antiporda.
Bad Faith attended the performance of the contract of
carriage, for even while Antiporda was in Bombay,
representatives of Lufthansa already tried to evade liability first,
by claiming that the contract of carriage between Lufthansa and
Antiporda ceased at Bombay airport, in disregard of the fact
that Antiporda was holding a Lufthansa ticket for the entire five-
leg trip; second, despite Berndt Loewe's knowledge that
Antiporda's seat was allowed to be given to another passenger,
the same suppressed the information and feigned ignorance of
the matter, presenting altogether another reason why
Antiporda was not listed in the manifest, i.e. that Air Kenya was
overbooked, notwithstanding clear proof that Lufthansa in
Manila confirmed his reservation for said flight.
Aggravating Circumstance. The breach of the guarantee was
aggravated by the discourteous and highly arbitrary conduct of
Matias. Bumped off from his connecting flight to Nairobi and
stranded in the Bombay Airport for 32 hours, when plaintiff
insisted on taking his scheduled flight to Nairobi, Matias got
angry and threw the ticket and passport on plaintiff's lap and
was ordered to go to the basement with his heavy luggages for
no reason at all. It was a difficult task for the plaintiff to carry
three luggages and yet Matias did not even offer to help him.
Plaintiff requested accommodation but Matias ignored it and
just left. Not even Lufthansa office in Bombay, after learning
plaintiff's being stranded in Bombay and his accommodation
problem, provided any relief to plaintiff's sordid situation.
Plaintiff has to stay in the transit area and could not sleep for
fear that his luggages might be lost. Everytime he went to the
toilet, he had to drag with him his luggages. He tried to eat the
high-seasoned food available at the airport but developed
stomach trouble. It was indeed a pathetic sight that the plaintiff,
an official of the Central Bank, a multi-awarded institutional
expert, tasked to perform consultancy work in a World Bank
funded agricultural bank project in Malawi instead found
himself stranded in a foreign land where nobody was expected
to help him in his predicament except the defendant, who
displayed utter lack of concern of its obligation to the plaintiff
and left plaintiff alone in his misery at the Bombay airport.
DISPOSITIVE: Petition DENIED. CA decision AFFIRMED.

12 Savellano, et al. vs. Savillo, et al., G.R. No. 151783, July 8, 2003
PAUL

13 British Airways vs. CA, G.R. No. 121824, 285 SCRA 450,
January 29, 1998 WIJ
Characters:
1. GOP MAHTANI private respondent, passenger of British
Airlines for flight Manila Hongkong Bombay Hongkong
Manila ticket route.
2. British Airways petitioner; the carrier airlines
3. Philippine Airlines third party carrier for the connecting
flights route Manila-Hongkong-Manila

Facts: On April 16, 1989, Mahtani decided to visit his relatives in
Bombay, India. A British Airline round trip ticket was purchased on
his behalf by a travel agent. 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.
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.
BA in its answer, claimed that Mahtani have no cause of
action against it and then BA filed a counter-claim against PAL
alleging that the reason for the non-transfer of the luggage was due
to the latter's late arrival in Hongkong. PAL filed its answer to the
third-party complaint, wherein it disclaimed any liability, arguing
that there was, in fact, adequate time to transfer the luggage to BA
facilities in Hongkong.

Trial Court Ruling: After appropriate proceedings and trial, on
March 4, 1993, the trial court rendered its decision in favor of
Mahtani ordering BA to pay Mahtani the value of the baggage and
its contents plus moral damages. Trial court dismissed the counter-
claim of BA to PAL.

CA Ruling: CA affirmed in toto the decision of trial court.

BA Defense: The award of compensatory damages was without
basis. 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.

Issue: Is petitioner liable for damages for breach of contract? Is
the dismissal of the counter claim to PAL correct?

SC Ruling: It is needful to state that the nature of an airline's
contract of carriage partakes of two types, namely: a contract to
deliver a cargo or merchandise to its destination and a contract to
transport passengers to their destination. A business intended to
serve the traveling public primarily, it is imbued with public
interest, hence, the law governing common carriers imposes an
exacting standard. Neglect or malfeasance by the carrier's
employees could predictably furnish bases for an action for
damages.
1. Yes. Admittedly, in a contract of air carriage a
declaration by the passenger of a higher value is needed to recover
a greater amount. Article 22(1) of the Warsaw Convention, 19
provides as follows:
xxx xxx xxx
(2) In the transportation of checked baggage and goods, the liability
of the carrier shall be limited to a sum of 250 francs per kilogram,
unless the consignor has made, at time 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.
Notwithstanding the foregoing, we have, nevertheless,
ruled against blind reliance on adhesion contracts where the facts
and circumstances justify that they should be disregarded. 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.
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. 25 BA has precisely failed in this regard.

2. No. The rule that carriage by plane although performed
by successive carriers is regarded as a single operation and that the
carrier issuing the passenger's ticket is considered the principal
party and the other carrier merely subcontractors or agent, is a
settled issue.
The third-party complaint is, therefore, a procedural
device whereby a "third party" who is neither a party nor privy to
the act or deed complained of by the plaintiff, may be brought into
the case with leave of court, by the defendant, who acts, as third-
party plaintiff to enforce against such third-party defendant a right
for contribution, indemnity, subrogation or any other relief, in
respect of the plaintiff's claim. The third-party complaint is actually
independent of and separate and distinct from the plaintiff's
complaint. Were it not for this provision of the Rules of Court, it
would have to be filed independently and separately from the
original complaint by the defendant against the third-party. But the
Rules permit defendant to bring in a third-party defendant or so to
speak, to litigate his separate cause of action in respect of plaintiff's
claim against a third-party in the original and principal case with the
object of avoiding circuitry of action and unnecessary proliferation
of law suits and of disposing expeditiously in one litigation the
entire subject matter arising from one particular set of facts.
Firestone Tire and Rubber Company of the Philippines v.
Tempengko
In resolving this issue, it is worth observing that the contract
of air transportation was exclusively between Mahtani and BA, the
latter merely endorsing the Manila to Hongkong leg of the former's
journey to PAL, as its subcontractor or agent. In fact, the fourth
paragraph of the "Conditions of Contracts" of the ticket 32 issued by
BA to Mahtani confirms that the contract was one of continuous air
transportation from Manila to Bombay.
Prescinding from the above discussion, it is undisputed that
PAL, in transporting Mahtani from Manila to Hongkong acted as the
agent of BA.
Since the instant petition was based on breach of contract
of carriage, Mahtani can only sue BA alone, and not PAL, since the
latter was not a party to the contract. However, this is not to say
that PAL is relieved from any liability due to any of its negligent acts.
In China Air Lines, Ltd. v. Court of Appeals, 37 while not exactly in
point, the case, however, illustrates the principle which governs this
particular situation. In that case, we recognized that a carrier (PAL),
acting as an agent of another carrier, is also liable for its own
negligent acts or omission in the performance of its duties.


14 PAL vs. CA, 257 SCRA 33, G.R. No. 119641 May 17, 1996.
ADRIAN

15 PAL v. Savillo, GR 149547, July 4, 2008 (supra)
Characters:
Simplicio Grino > plaintiff sa RTC, private respondent sa SC
PAL and Singapore Airlines> respondents sa RTC civil case
PAL> petitioner SC
Judge Adriano Savillo> public respondent, presiding judge RTC
Iloilo
Nature of the Case: Complaint for Damages, seeking compensation
for moral damages.
FACTS:
Grino 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
private respondent and his companions took the PAL flight to
Singapore, Upon their arrival, they proceeded to the
Singapore Airlines to check-in for their flight to Jakarta
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 PALs endorsement, PAL
would not pay Singapore Airlines for their passage
PALs office at the airport 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
private respondent and his companions were forced
to purchase tickets from Garuda Airlines for Jakarta, arrived
late, party supposed to fetch them had already left, Grino
became ill and was unable to participate in the tournament
Upon his return to the Philippines, private respondent, sent a
demand letter to PAL on 20 December 1993 and another to
Singapore Airlines on 21 March 1994, both airlines disowned
liability and blamed each other for the fiasco
1997, private respondent filed a Complaint for Damages before
the RTC
Instead of filing an answer to private respondents Complaint,
PAL filed a Motion to Dismiss dated 18 September 1998 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.
PALs Contention: 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
Trial Court: denied the Motion to Dismiss, 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.
CA likewise dismissed the Petition for Certiorari filed by PAL and
affirmed Order 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 it is the provisions of the NCC or the Warsaw
Convention that should apply for the breach of contract for
international air transport
HELD:
Petition without merit
this Court notes that jurisprudence in the Philippines and the
United States also recognizes that the Warsaw Convention does
not "exclusively regulate" the relationship between passenger
and carrier on an international flight. This Court finds that the
present case is substantially similar to cases in which the
damages sought were considered to be outside the coverage of
the Warsaw Convention.
Instant case is comparable to the case of Lathigra v. British
Airways. In Lathigra, it was held that the airlines negligent act
of reconfirming the passengers reservation days before
departure and failing to inform the latter that the flight had
already been discontinued is not among the acts covered by the
Warsaw Convention, since the alleged negligence did not occur
during the performance of the contract of carriage but, rather,
days before the scheduled flight.
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 PALs 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
respondents 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 PALs 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:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict.
Private respondents 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
respondents claims have not yet prescribed and PALs Motion
to Dismiss must be denied
Should there be any doubt as to the prescription of private
respondents 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

16 Telengtan Bros. vs. CA, 236 SCRA 617, G.R. No. 110581 236
SCRA 617, September 21, 1994 ADRIAN

17 KengHua Paper Products vs. CA, et al., G.R. No. 116863 286
SCRA 257, February 12, 1998 PAUL

18 Ace v. FGU Insurance, GR 171591, June 25, 2012 OFE

19 MOF Company Inc. vs. Shin Yang Brokerage Corporation, G.R.
No. 172822, December 18, 2009 BRY