14 HABAWEL-VEGA, K. G.R. No. 119995.
o. 119995. November 18, 1997 CA: reversed the trial courts finding that there was gross negligence amounting
CARLOS SINGSON, vs. COURT OF APPEALS and CATHAY PACIFIC AIRWAYS,
INC.,
DOCTRINE:
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.
Attorneys fees may be awarded when the defendants act or omission has
compelled the plaintiff to litigate with third persons or to incur expenses to
protect his interest.
FACTS:
Petitioner CARLOS SINGSON and his cousin Crescentino Tiongson bought
from respondent Cathay Pacific Airways two (2) open-dated, identically
routed, round trip plane tickets (Manila to LA and vice versa). Each ticket
consisted of six (6) flight coupons, each would be detached at the start of each
leg of the trip.
Singson failed to obtain a booking in LA for their trip to Manila; apparently,
the coupon corresponding to the 5th leg of the trip was missing and instead
the 3rd was still attached. It was not until few days later that the defendant
finally was able to arrange for his return to Manila.
Singson commenced an action for damages based on breach of contract of
carriage against CATHAY before the Regional Trial Court.
CATHAY alleged that there was no contract of carriage yet existing such that
CATHAYs refusal to immediately book him could not be construed as breach
of contract of carriage.
TC: rendered a decision in favor of petitioner herein holding that CATHAY was
guilty of gross negligence amounting to malice and bad faith for which it was
adjudged to pay petitioner P20,000.00 for actual damages with interest at the
legal rate of twelve percent (12%) per annum from 26 August 1988 when the
complaint was filed until fully paid, P500,000.00 for moral damages,
P400,000.00 for exemplary damages, P100,000.00 for attorneys fees, and, to
pay the costs.
to bad faith or fraud and, accordingly, modified its judgment by deleting the
awards for moral and exemplary damages, and the attorneys fees as well.
ISSUES:
1. Whether a breach of contract was committed by CATHAY when it failed to
confirm the booking of petitioner Singson? YES
2. Whether the carrier was liable not only for actual damages but also for moral
and exemplary damages, and attorneys fees? YES
RULING:
1. The round trip ticket issued by the carrier to the passenger was in itself a
complete written contract by and between the carrier and the passenger. It had
all the elements of a complete written contract, to wit:
(a) the consent of the contracting parties manifested by the fact that the
passenger agreed to be transported by the carrier to and from Los
Angeles via San Francisco and Hong Kong back to the Philippines, and the
carriers acceptance to bring him to his destination and then back home;
(b) cause or consideration, which was the fare paid by the passenger as stated
in his ticket; and,
(c) object, which was the transportation of the passenger from the place of
departure to the place of destination and back, which are also stated in
his ticket.
In fact, the contract of carriage in the instant case was already partially
executed as the carrier complied with its obligation to transport the passenger
to his destination, i.e., Los Angeles.
The loss of the coupon was attributable to the negligence of CATHAYs
agents and was the proximate cause of the non-confirmation of petitioner's
return flight.
2. 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.
These circumstances reflect the carriers utter lack of care and
sensitivity to the needs of its passengers, clearly constitutive of gross
negligence, recklessness and wanton disregard of the rights of the latter, acts
evidently indistinguishable or no different from fraud, malice and bad faith. As
the rule now stands, where in breaching the contract of carriage the defendant
airline is shown to have acted fraudulently, with malice or in bad faith, the
award of moral and exemplary damages, in addition to actual damages, is
proper.

However, the P500,000.00 moral damages and P400,000.00 exemplary

damages awarded by the trial court have to be reduced. The well-entrenched
principle is that the grant of moral damages depends upon the discretion of the
court based on the circumstances of each case. This discretion is limited by the
principle that the "amount awarded should not be palpably and scandalously
excessive" as to indicate that it was the result of prejudice or corruption on the
part of the trial court. Damages are not intended to enrich the complainant at
the expense of the defendant. They are awarded only to alleviate the moral
suffering that the injured party had undergone by reason of the defendant's
culpable action. There is no hard-and-fast rule in the determination of what
would be a fair amount of moral damages since each case must be governed by
its own peculiar facts.

In the instant case, the injury suffered by petitioner is not so serious or

extensive as to warrant an award amounting to P900,000.00. The assessment of
P200,000.00 as moral damages and P50,000.00 as exemplary damages in his
favor is, in our view, reasonable and realistic.

On the issue of actual damages, we agree with the Court of Appeals that
the amount of P20,000.00 granted by the trial court to petitioner should not be
disturbed.

With regard to attorney's fees, they may be awarded when the

defendant's act or omission has compelled the plaintiff to litigate with third
persons or to incur expenses to protect his interest. It was therefore erroneous
for the Court of Appeals to delete the award made by the trial court;
consequently, petitioner should be awarded attorney's fees and the amount of
P25,000.00, instead of P100,000.00 earlier awarded, may be considered
rational, fair and reasonable.