G.R. No.
L-28512 February 28, 1973 December 19, 1960, a letter of condolence from the defendant's
PEDRO R. DAVILA and PRECIOSA C. TIRO, plaintiffs-
appellants,
vs.
PHILIPPINE AIR LINES, defendant-appellant.
MAKALINTAL, J.:
In Civil Case No. 5728 of the Court of First Instance of Iloilo (Pedro
R. Davila and Preciosa C. Tirol, plaintiffs, vs. Philippine Air Lines,
Inc., defendant) judgment was rendered ordering the defendant to
pay the plaintiffs various sums of money, as follows:
(1) For the death of Pedro T. Davila, Jr. the
amount of P6,000.00;
(2) For the loss of the earning capacity of the
deceased at the rate of P12,000.00 per annum
for five (5) years in the amount of Sixty
Thousand Pesos. (P60,000.00);
(3) For moral damages in favor of the plaintiffs
Ten Thousand Pesos (P10,000.00);
(4) For exemplary damages in the amount of
Ten Thousand Pesos (P10,000.00);
(5) For actual damages the amount of Five
Thousand Pesos (P5,000.00) broken down to as
follows: A rolex watch valued at P600.00; a
pistol worth P300.00; burial expenses P600.00;
for the lot and the mausoleum P3,500.00;
(6) For Attorney's fees the amount of Ten
Thousand Pesos (P10,000.00) or a total amount
of One Hundred and One Thousand Pesos
(P101,000.00)
To pay the costs of this proceedings.
Both parties appealed directly to this Court in view of the
aggregate of the amounts awarded, the judgment having been
rendered before the effectivity of Rep. Act No. 5440. In this appeal
the plaintiffs seek an increase in said amounts, and the defendant,
complete exoneration from, or at least mitigation of, liability.
The case arose from the tragic crash of a passenger plane of the
defendant which took the lives of all its crew and passengers. The
plane, identified as PI-C133, was a DC-3 type of aircraft,
manufactured in 1942 and acquired by the defendant in 1948. It
had flown almost 18,000 hours at the time of its ill-fated flight.
Despite its age, however, it had been certified as airworthy by the
Civil Aeronautics Administration. On November 23, 1960, at 5:30
in the afternoon, it took off from the Manduriao Airport, Iloilo, on its
way to Manila, with 33 people on board, including the plane's
complement. It did not reach its destination, but crashed at Mt.
Baco, Mindoro, one hour and fifteen minutes after take-off. A
massive search was undertaken by the defendant and by other
parties as soon as it was realized that the plane's arrival in Manila
was overdue. The plaintiffs, parents of Pedro T. Davila, Jr., who
was one of the passengers, had no definite news of what had
happened to their son, getting what information they could only
from conflicting newspaper reports, until they received, on
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president Andres Soriano, informing them that their son had died
in the crash. And it was only on December 29 that his body was
recovered an taken back to Iloilo.
The issues before the trial court, and now before Us in this appeal,
are whether or not the defendant is liable for violation of its
contract of carriage and if so, for how much. The provisions of the
Civil Code on this substantive question of liability are clear and
explicit. Article 1733 binds common carriers, "from the nature of
their business and by reasons of public policy, ... to observe
extraordinary diligence in the vigilance ... for the safety of the
passengers transported by them according to all the
circumstances of each case." Article 1755 establishes the standard
of care required of a common carrier, which is, "to carry the
passengers safely as far as human care and foresight can provide,
using the utmost diligence of very cautious persons, with due
regard for all the circumstances." Article 1756 fixes the burden of
proof by providing that "in case of death of or injuries to
passengers, common carriers are presumed to have been at fault
or to have acted negligently, unless they prove that they observed
extraordinary diligence as prescribed in Articles 1733 and 1755."
Lastly, Article 1757 states that "the responsibility of a common
carrier for the safety of passengers ... cannot be dispensed with or
lessened by stipulation, by the posting of notices, by statements on
tickets, or otherwise."
The route prescribed by the Civil Aeronautics Administration for
the flight of plane PI-C113 in the afternoon of November 23, 1960
was Iloilo-Romblon-Manila, the latter stage, denominated as
airway "Amber I," being a straight lane from Romblon to Manila.
The prescribed elevation of the flight was 6,000 ft. The plane
reported its position after take-off and again when it was abeam
the Roxas homer. However, it did not intercept airway "Amber I"
over Romblon as it was supposed to do, and the pilot did not give
his position then although Romblon was a compulsory checking
point. The fact was that the plane had deviated from the prescribed
route by 32 miles to the west when it crashed at Mt. Baco. The
reading of the altimeter of the plane when its wreckage was found
was 6,800 ft.
There is a suggestion that in the course of the flight between
Romblon and Mindoro the aircraft was drifted westward by the
cross-winds then blowing in the region. The defendant, however,
has not given a definite explanation as to why, if such was the
case, the pilot failed to make the necessary correction in his flight
to compensate for the drift. According to the defendant's witness,
Maj. Mijares, Chief of the Aviation Safety Division of the Civil
Aeronautics Administration and Chairman of the CAA Investigating
Committee, there was a navigational error, to which several factors
contributed: "the weather observation at that time from the
Weather Bureau was not so good between Mt. Baco and Romblon
and the wind aloft was quite strong, which would be also one of the
causes for the drifting of the aircraft; and the other strong
probability, I would say, would be the malfunction of the aircraft's
navigational instrument." He further explained that "a cross-wind
can drift the plane if the pilot will not make the necessary
correction, if his navigational instrument is malfunctioning and the
visual reference outside the aircraft could not make the necessary
corrections."
There is nothing in the testimony of Maj. Mijares to show just how
strong the cross-winds were in the region at the time, although in
the investigation of the accident by the Senate Committee on
transportation there was testimony that the cross-winds had a
velocity of either 20 to 25 knots or 25 to 35 knots an hour.
Considering the relatively short distance from Romblon to Mt. Baco
and the brief span of time it would take to fly that distance, cross-
winds with the velocity stated could not have possibly deviated the
plane by as much as 32 miles.
The defendant points out that the navigational instrument on board
the plane consisted of two (2) sets of automatic direction finders
(ADF) which, when found after the crash, showed a reading that
the aircraft was heading north, which was the proper flight
direction. This point, however, is of no vital significance in this case
since it does not explain why the aircraft was 32 miles off its
prescribed route in the first place. It is suggested that the pilot did
not notice the drift of his plane because of poor visibility due to
thick clouds, which prevented him from making the corresponding
correction on the basis of visual references to the terrain outside.
But according to Maj. Mijares himself the report from the Weather
Bureau at the time showed that visibility was 15 miles between
Romblon and Mt. Baco and that the clouds from 2,700 to 7,000 ft.
elevation were "scattered." And the profile of the probable weather
cross-section along airway "Amber I" during the flight (Exh. 33-A)
shows that at 6,000 ft. the airlane was clear and free of clouds.
The suggestion therefore that the pilot was practically flying blind
and consequently failed to notice the drift of the aircraft is not
justified by the evidence. Indeed even the investigating team of the
defendant under the chairmanship of Capt. Jaime Manzano
concluded in its report that "based on the limited evidences
available, the board is of the opinion that the probable cause was
the inability of the pilot to intersect airway "Amber I" over Romblon
and to maintain track within its designated airway lane for reasons
unknown."
What is undisputed therefore is that the pilot did not follow the
route prescribed for his flight, at least between Romblon and
Manila. Since up to that point over Romblon, where he was
supposed to intersect airway "Amber I" the weather was clear, the
most reasonable conclusion is that his failure to do so was
intentional, and that he probably wanted to fly on a straight line to
Manila. It was a violation of air-craft traffic rules to which, under the
circumstances, the accident may be directly attributable.
In any case, absent a satisfactory explanation on the part of the
defendant as to how and why the accident occurred, the
presumption is that it was at fault, under Article 1756 of the Civil
Code.
The next question relates to the amount of damages that should
be awarded to the plaintiffs, parents of the deceased. The trial
court fixed the indemnity for his death in the amount of P6,000.00.
Pursuant to current jurisprudence on the point it should be
increased to P12,000.00.1
The deceased was employed as manager of a radio station 2, from
which he was earning P8,400.00 a year, consisting of a monthly
salary of P600.00 and allowance of P100.00. As a lawyer and
junior partner of his father in the law office, he had an annual
income of P3,600.00. From farming he was getting an average of
P3,000.00. All in all therefore the deceased had gross earnings of
P15,000.00 a year.
According to Article 2206, paragraph (1), of the Civil Code, "the
defendant shall be liable for the loss of the earning capacity of the
deceased and indemnity shall be paid to the heirs of the latter."
This Article, while referring to "damages for death caused by crime
or quasi-delict," is expressly made applicable by Article 1764 "to
the death of a passenger caused by the breach of contract by a
common carrier."
The deceased, Pedro Davila, Jr., was single and 30 years of age
when he died. At that age one's normal life expectancy is 33-1/3
years, according to the formula (2/3 x [80-30]) adopted by this
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Court in the case of Villa Rey Transit, Inc. vs. Court of Appeals3 on
the basis of the American Expectancy Table of Mortality or the
Actuarial of Combined Experience Table of Mortality. However,
although the deceased was in relatively good health, his medical
history shows that he had complained of and been treated for such
ailments as backaches, chest pains and occasional feelings of
tiredness. It is reasonable to make an allowance for these
circumstances and consider, for purposes of this case, a reduction
of his life expectancy to 25 years.
In the same case of Villa Revenue Transit this Court stated:
"... earning capacity, as an element of damages to one's estate for
his death by wrongful act is necessarily his net earning capacity or
his capacity to acquire money, less the necessary expense for his
own living. Stated otherwise, the amount recoverable is not loss of
the entire earnings, but rather the loss of that portion of the
earnings which the beneficiary would have received. In other
words, only net earnings, not gross earnings, are to be considered,
that is, the total of the earnings less expenses necessary in the
creation of such earnings or income and less living and other
incidental expenses."
Considering the fact that the deceased was getting his income
from three (3) different sources, namely from managing a radio
station, from law practice and from farming, the expenses
incidental to the generation of such income were necessarily more
than if he had only one source. Together with his living expenses,
a deduction of P600.00 a month, or P7,200.00 a year, seems to Us
reasonable, leaving a net yearly income of P7,800.00. This
amount, multiplied by 25 years, or P195,000.00 is the amount
which should be awarded to the plaintiffs in this particular respect.
Actual losses sustained consist of the following, as found by the
trial court: "Rolex Watch — P600.00; pistol — P300.00; Burial
Expenses — P600.00; and cost of cemetery lot and mausoleum -
P3,500.00."
Under Article 2206, in relation to Article 1764, of the Civil Code,
the parents of the deceased are entitled to moral damages for their
mental anguish. The trial court awarded P10,000.00 in this
concept, and We find no justification to change the award,
considering the long period of uncertainty and suffering the
plaintiffs underwent from November 23, when the plane crash
occurred, to December 19, when they received a letter from the
defendant's president confirming the death of their son, and again
to the following December 29, when his body was finally recovered
and taken back to them.
With respect to the award of P10,000.00 as exemplary damages, it
is Our opinion that the same should be eliminated. According to
Article 2232 of the Civil Code, in contracts and quasi-contracts the
court may award exemplary damages if the defendant acted in a
wanton, fraudulent, reckless, oppressive or malevolent manner.
The failure of the defendant here to exercise extraordinary
diligence, as required by law, does not amount to anyone of the
circumstances contemplated in the said provision.
The trial court has awarded attorney's fees of P10,000.00. We do
not find this award groundless or the amount thereof
unreasonable.
The total of the different items above enumerated is P232,000.00.
The judgment of the court a quo is therefore modified accordingly
and the defendant is ordered to pay the said amount to the
plaintiffs, with legal interest thereon from the finality of this
judgment. With costs against the defendant.

G.R. No. L-31150 July 22, 1975
KONINKLIJKE LUCHTVAART MAATSHAPPIJ N.V., otherwise
known as KLM ROYAL DUTCH AIRLINES, petitioner,
vs.
THE HONORABLE COURT OF APPEALS, CONSUELO T.
MENDOZA and RUFINO T. MENDOZA, respondents.
CASTRO, J.:
In this appeal by way of certiorari the Koninklijke Luchtvaart
Maatschappij N.V., otherwise known as the KLM Royal Dutch
Airlines (hereinafter referred to as the KLM) assails the award of
damages made by the Court of Appeals in CA-G.R. 40620 in favor
of the spouses Rufino T. Mendoza and Consuelo T. Mendoza
(hereinafter referred to as the respondents).1äwphï1.ñët
Sometime in March 1965 the respondents approached Tirso
Reyes, manager of a branch of the Philippine Travel Bureau, a
travel agency, for consultations about a world tour which they were
intending to make with their daughter and a niece. Reyes
submitted to them, after preliminary discussions, a tentative
itinerary which prescribed a trip of thirty-five legs; the respondents
would fly on different airlines. Three segments of the trip, the
longest, would be via KLM. The respondents expressed a desire to
visit Lourdes, France, and discussed with Reyes two alternate
routes, namely, Paris to Lourdes and Barcelona to Lourdes. The
respondents decided on the Barcelona-Lourdes route with
knowledge that only one airline, Aer Lingus, serviced it.
The Philippine Travel Bureau to which Reyes was accredited was
an agent for international air carriers which are members of the
International Air Transport Association, popularly known as the
"IATA," of which both the KLM and the Aer Lingus are members.
After about two weeks, the respondents approved the itinerary
prepared for them, and asked Reyes to make the necessary plane
reservations. Reyes went to the KLM, for which the respondents
had expressed preference. The KLM thereafter secured seat
reservations for the respondents and their two companions from
the carriers which would ferry them throughout their trip, with the
exception of Aer Lingus. When the respondents left the Philippines
(without their young wards who had enplaned much earlier), they
were issued KLM tickets for their entire trip. However, their coupon
for the Aer Lingus portion (Flight 861 for June 22, 1965) was
marked "RQ" which meant "on request".
After sightseeing in American and European cities (they were in
the meantime joined by their two young companions), the
respondents arrived in Frankfurt, Germany. They went to a KLM
office there and obtained a confirmation from Aer Lingus of seat
reservations on flight 861. After meandering in London, Paris and
Lisbon, the foursome finally took wing to Barcelona for their trip to
Lourdes, France.
In the afternoon of June 22, 1965 the respondents with their wards
went to the Barcelona airport to take their plane which arrived at
4:00 o'clock. At the airport, the manager of Aer Lingus directed the
respondents to check in. They did so as instructed and were
accepted for passage. However, although their daughter and niece
were allowed to take the plane, the respondents were off-loaded
on orders of the Aer Lingus manager who brusquely shoved them
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aside with the aid of a policeman and who shouted at them,
"Conos! Ignorantes Filipinos!"
Mrs. Mendoza later called up the manager of Aer Lingus and
requested that they provide her and her husband means to get to
Lourdes, but the request was denied. A stranger, however,
advised them to take a train, which the two did; despite the third
class accommodations and lack of food service, they reached
Lourdes the following morning. During the train trip the
respondents had to suffer draft winds as they wore only minimum
clothing, their luggage having gone ahead with the Aer Lingus
plane. They spent $50 for that train trip; their plane passage was
worth $43.35.
On March 17, 1966 the respondents, referring to KLM as the
principal of Aer Lingus, filed a complaint for damages with the
Court of First Instance of Manila arising from breach of contract of
carriage and for the humiliating treatment received by them at the
hands of the Aer Lingus manager in Barcelona. After due hearing,
the trial court awarded damages to the respondents as follows:
$43.35 or its peso equivalent as actual damages, P10,000 as
moral damages, P5,000 as exemplary damages, and P5,000 as
attorney's fees, and expenses of litigation.
Both parties appealed to the Court of Appeals. The KLM sought
complete exoneration; the respondents prayed for an increase in
the award of damages. In its decision of August 14, 1969 the Court
of Appeals decreed as follows: "Appellant KLM is condemned to
pay unto the plaintiffs the sum of $43.35 as actual damages;
P50,000 as moral damages; and P6,000 as attorney's fees and
costs."
Hence, the present recourse by the KLM.
The KLM prays for exculpation from damages on the strength of
the following particulars which were advanced to but rejected by
the Court of Appeals:
(a) The air tickets issued to the respondents stipulate that carriage
thereunder is subject to the "Convention for the Unification of
Certain Rules Relating to International Transportation by Air,"
otherwise known as the "Warsaw Convention," to which the
Philippine Government is a party by adherence, and which
pertinently provides.1
ART. 30. (1) In the case of transportation to be
performed by various successive carriers and
failing 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 transportation
which is performed under his supervision.2
(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 occured, save in the case where, by
express agreement, the first carrier has
assumed liability for the whole journey.
(emphasis supplied)
(b) On the inside front cover of each ticket the following appears
under the heading "Conditions of Contract":
 1 ... (a) Liability of carrier for damages shall be
limited to occurrences on its own line, except in
the case of checked baggage as to which the
passenger also has a right of action against the
first or last carrier. A carrier issuing a ticket or
checking baggage for carriage over the lines of
others does so only as agent..
(c) All that the KLM did after the respondents completed their
arrangements with the travel agency was to request for seat
reservations among the airlines called for by the itinerary
submitted to the KLM and to issue tickets for the entire flight as a
ticket-issuing agent.
The respondents rebut the foregoing arguments, thus:
(a) Article 30 of the Warsaw Convention has no application in the
case at bar which involves, not an accident or delay, but a willful
misconduct on the part of the KLM's agent, the Aer Lingus. Under
article 25 of the same Convention the following is prescribed:
ART. 25. (1) The carrier shall not be entitled to
avail himself of the provisions of this convention
which exclude or limit his liability, if the damage
is caused by his willful misconduct or by such
default on his part as, in accordance with the law
of the court to which the case is submitted, is
considered to be equivalent to willful
misconduct.3
(2) Similarly, the carrier shall not be entitled to
avail himself of the said provisions, if the
damage is caused under the same
circumstances by any agent of the carrier acting
within the scope of his employment. (emphasis
by respondents)
(b) The condition in their tickets which purportedly excuse the KLM
from liability appears in very small print, to read which, as found by
the Court of Appeals, one has practically to use a magnifying
glass.
(c) The first paragraph of the "Conditions of Contract" appearing
identically on the KLM tickets issued to them idubitably shows that
their contract was one of continuous air transportation around the
world:
1 ... "carriage" includes the air carrier issuing this
ticket and all carriers that carry or undertake to
carry the passenger or his baggage hereunder
or perform any other service incidental to such
air carriage... Carriage to be performed
hereunder by several successive carrier is
regarded as a single operation.
(d) The contract of air transportation was exclusively between the
respondents and the KLM, the latter merely endorsing its
performance to other carriers, like Aer Lingus, as its
subcontractors or agents, as evidenced by the passage tickets
themselves which on their face disclose that they are KLM tickets.
Moreover, the respondents dealt only with KLM through the travel
agency.
1. The applicability insisted upon by the KLM of article 30 of the
Warsaw Convention cannot be sustained. That article
presupposes the occurrence of either an accident or a delay,
neither of which took place at the Barcelona airport; what is here
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manifest, instead, is that the Aer Lingus, through its manager
there, refused to transport the respondents to their planned and
contracted destination.
2. The argument that the KLM should not be held accountable for
the tortious conduct of Aer Lingus because of the provision printed
on the respondents' tickets expressly limiting the KLM's liability for
damages only to occurrences on its own lines is unacceptable. As
noted by the Court of Appeals that condition was printed in letters
so small that one would have to use a magnifying glass to read the
words. Under the circumstances, it would be unfair and inequitable
to charge the respondents with automatic knowledge or notice of
the said condition so as to preclude any doubt that it was fairly and
freely agreed upon by the respondents when they accepted the
passage tickets issued to them by the KLM. As the airline which
issued those tickets with the knowledge that the respondents
would be flown on the various legs of their journey by different air
carriers, the KLM was chargeable with the duty and responsibility
of specifically informing the respondents of conditions prescribed
in their tickets or, in the very least, to ascertain that the
respondents read them before they accepted their passage tickets.
A thorough search of the record, however, inexplicably fails to
show that any effort was exerted by the KLM officials or employees
to discharge in a proper manner this responsibility to the
respondents. Consequently, we hold that the respondents cannot
be bound by the provision in question by which KLM unilaterally
assumed the role of a mere ticket-issuing agent for other airlines
and limited its liability only to untoward occurrences on its own
lines.
3. Moreover, as maintained by the respondents and the Court of
Appeals, the passage tickets of the respondents provide that the
carriage to be performed thereunder by several successive
carriers "is to be regarded as a single operation," which is
diametrically incompatible with the theory of the KLM that the
respondents entered into a series of independent contracts with
the carriers which took them on the various segments of their trip.
This position of KLM we reject. The respondents dealt exclusively
with the KLM which issued them tickets for their entire trip and
which in effect guaranteed to them that they would have sure
space in Aer Lingus flight 861. The respondents, under that
assurance of the internationally prestigious KLM, naturally had the
right to expect that their tickets would be honored by Aer Lingus to
which, in the legal sense, the KLM had indorsed and in effect
guaranteed the performance of its principal engagement to carry
out the respondents' scheduled itinerary previously and mutually
agreed upon between the parties.
4. The breach of that guarantee was aggravated by the
discourteous and highly arbitrary conduct of an official of the Aer
Lingus which the KLM had engaged to transport the respondents
on the Barcelona-Lourdes segment of their itinerary. It is but just
and in full accord with the policy expressly embodied in our civil
law which enjoins courts to be more vigilant for the protection of a
contracting party who occupies an inferior position with respect to
the other contracting party, that the KLM should be held
responsible for the abuse, injury and embarrassment suffered by
the respondents at the hands of a supercilious boor of the Aer
Lingus.
ACCORDINGLY, the judgment of the Court of Appeals dated
August 14, 1969 is affirmed, at KLM's cost.
UNITED AIRLINES, INC., petitioner, vs. COURT OF APPEALS,
ANICETO FONTANILLA, in his personal capacity and in
behalf of his minor son MYCHAL ANDREW
FONTANILLA respondents.
DECISION
KAPUNAN, J.:
On March 1, 1989, private respondent Aniceto Fontanilla purchased
from petitioner United Airlines, through the Philippine Travel Bureau in
Manila, three (3) Visit the U.S.A. tickets for himself, his wife and his minor
son Mychal for the following routes:
(a) San Francisco to Washington (15 April 1989);
(b) Washington to Chicago (25 April 1989);
(c) Chicago to Los Angeles (29 April 1989);
(d) Los Angeles to San Francisco (01 May 1989 for petitioners wife and
05 May 1989 for petitioner and his son).[1]
All flights had been confirmed previously by United Airlines.[2]
The Fontanillas proceeded to the United States as planned, where
they used the first coupon from San Francisco to Washington. On April 24,
1989, Aniceto Fontanilla bought two (2) additional coupons each for
himself, his wife and his son from petitioner at its office in Washington
Dulles Airport. After paying the penalty for rewriting their tickets, the
Fontanillas were issued tickets with corresponding boarding passes with
the words CHECK-IN REQUIRED, for United Airlines Flight No. 1108,
set to leave from Los Angeles to San Francisco at 10:30 a.m. on May 5,
1989.[3]
The cause of the non-boarding of the Fontanillas on United Airlines
Flight No. 1108 makes up the bone of contention of this controversy.
Private respondents' version is as follows:
Aniceto Fontanilla and his son Mychal claim that on May 5, 1989,
upon their arrival at the Los Angeles Airport for their flight, they proceeded
to United Airlines counter where they were attended by an employee
wearing a nameplate bearing the name LINDA. Linda examined their
tickets, punched something into her computer and then told them that
boarding would be in fifteen minutes.[4]
When the flight was called, the Fontanillas proceeded to the
plane. To their surprise, the stewardess at the gate did not allow them to
board the plane, as they had no assigned seat numbers. They were then
directed to go back to the check-in counter where Linda subsequently
informed them that the flight had been overbooked and asked them to
wait.[5]
The Fontanillas tried to explain to Linda the special circumstances of
their visit. However, Linda told them in arrogant manner, So what, I can
not do anything about it.[6]
Subsequently, three other passengers with Caucasian features were
graciously allowed to board, after the Fontanillas were told that the flight
had been overbooked.[7]
The plane then took off with the Fontanillas baggage in tow, leaving
them behind.[8]
The Fontanillas then complained to Linda, who in turn gave them an
ugly stare and rudely uttered, Its not my fault. Its the fault of the
company. Just sit down and wait.[9] When Mr. Fontanilla reminded Linda
of the inconvenience being caused to them, she bluntly retorted, Who do
you think you are? You lousy Flips are good for nothing beggars.You
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always ask for American aid. After which she remarked Dont worry about
your baggage. Anyway there is nothing in there. What are you doing here
anyway? I will report you to immigration. You Filipinos should go
home.[10] Such rude statements were made in front of other people in the
airport causing the Fontanillas to suffer shame, humiliation and
embarrassment. The chastening situation even caused the younger
Fontanilla to break into tears.[11]
After some time, Linda, without any explanation, offered the
Fontanillas $50.00 each. She simply said Take it or leave it. This, the
Fontanillas declined.[12]
The Fontanillas then proceeded to the United Airlines customer
service counter to plead their case. The male employee at the counter
reacted by shouting that he was ready for it and left without saying
anything.[13]
The Fontanillas were not booked on the next flight, which departed
for San Francisco at 11:00 a.m. It was only at 12:00 noon that they were
able to leave Los Angeles on United Airlines Flight No. 803.
Petitioner United Airlines has a different version of what occurred at
the Los Angeles Airport on May 5, 1989.
According to United Airlines, the Fontanillas did not initially go to
the check-in counter to get their seat assignments for UA Flight 1108. They
instead proceeded to join the queue boarding the aircraft without first
securing their seat assignments as required in their ticket and boarding
passes. Having no seat assignments, the stewardess at the door of the plane
instructed them to go to the check-in counter. When the Fontanillas
proceeded to the check-in counter, Linda Allen, the United Airlines
Customer Representative at the counter informed them that the flight was
overbooked. She booked them on the next available flight and offered them
denied boarding compensation. Allen vehemently denies uttering the
derogatory and racist words attributed to her by the Fontanillas.[14]
The incident prompted the Fontanillas to file Civil Case No. 89-4268
for damages before the Regional Trial Court of Makati. After trial on the
merits, the trial court rendered a decision, the dispositive portion of which
reads as follows:
WHEREFORE, judgment is rendered dismissing the complaint. The
counterclaim is likewise dismissed as it appears that plaintiffs were not
actuated by legal malice when they filed the instant complaint.[15]
On appeal, the Court of Appeals ruled in favor of the Fontanillas. The
appellate court found that there was an admission on the part of United
Airlines that the Fontanillas did in fact observe the check-in requirement. It
ruled further that even assuming there was a failure to observe the check-
in requirement, United Airlines failed to comply with the procedure laid
down in cases where a passenger is denied boarding. The appellate court
likewise gave credence to the claim of Aniceto Fontanilla that the
employees of United Airlines were discourteous and arbitrary and, worse,
discriminatory. In light of such treatment, the Fontanillas were entitled to
moral damages. The dispositive portion of the decision of the respondent
Court of Appeals dated 29 September 1995, states as follows:
WHEREFORE, in view of the foregoing, judgment appealed herefrom is
hereby REVERSED and SET ASIDE, and a new judgment is entered
ordering defendant-appellee to pay plaintiff-appellant the following:
a) P200,000.00 as moral damages;
b) P200,000.00 as exemplary damages;
c) P50, 000.00 as attorneys fees.
No pronouncement as to costs.
SO ORDERED.[16]
Petitioner United Airlines now comes to this Court raising the
following assignment of errors:
I untrue.[22] Whether or not private respondents checked in at petitioner's
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT THE TRIAL COURT WAS WRONG IN
FAILING TO CONSIDER THE ALLEGED ADMISSION THAT
PRIVATE RESPONDENT OBSERVED THE CHECK-IN
REQUIREMENT.
II
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENTS FAILURE TO
CHECK-IN WILL NOT DEFEAT HIS CLAIMS BECAUSE THE
DENIED BOARDING RULES WERE NOT COMPLIED WITH.
III
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENT IS ENTITLED TO
MORAL DAMAGES OF P200, 000.
IV
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENT IS ENTITLED TO
EXEMPLARY DAMAGES OF P200,000.
V It must be remembered that the general rule in civil cases is that the
RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
RULING THAT PRIVATE RESPONDENT IS ENTITLED TO
ATTORNEYS FEES OF P50, 000.[17]
On the first issue raised by the petitioner, the respondent Court of
Appeals ruled that when Rule 9, Section 1 of the Rules of Court, [18] there
was an implied admission in petitioner's answer in the allegations in the
complaint that private respondent and his son observed the check-in
requirement at the Los Angeles Airport. Thus:
A perusal of the above pleadings filed before the trial court disclosed
that there exists a blatant admission on the part of the defendant-appellee
that the plaintiffs-appellants indeed observed the check-in requirement at
the Los Angeles Airport on May 5, 1989. In view of defendant-appellees
admission of plaintiffs-appellants material averment in the complaint, We
find no reason why the trial court should rule against such admission. [19]
We disagree with the above conclusion reached by respondent Court
of Appeals. Paragraph 7 of private respondents' complaint states:
7. On May 5, 1989 at 9:45 a.m., plaintiff and his son checked in at
defendants designated counter at the airport in Los Angeles for their
scheduled flight to San Francisco on defendants Flight No. 1108. [20]
Responding to the above allegations, petitioner averred in paragraph
4 of its answer, thus:
4. Admits the allegation set forth in paragraph 7 of the complaint except
to deny that plaintiff and his son checked in at 9:45 a.m., for lack of
knowledge or information at this point in time as to the truth thereof.[21]
Transpoeh 6
The rule authorizing an answer that the defendant has no knowledge
or information sufficient to form a belief as to the truth of an averment and
giving such answer the effect of a denial, does not apply where the fact as
to which want of knowledge is asserted is so plainly and necessarily within
the defendant's knowledge that his averment of ignorance must be palpably
designated counter at the airport at 9:45 a.m. on May 5, 1989 must
necessarily be within petitioner's knowledge.
While there was no specific denial as to the fact of compliance with
the check-in requirement by private respondents, petitioner presented
evidence to support its contention that there indeed was no compliance.
Private respondents then are said to have waived the rule on
admission. It not only presented evidence to support its contention that
there was compliance with the check-in requirement, it even allowed
petitioner to present rebuttal evidence. In the case of Yu Chuck vs. "Kong
Li Po," we ruled that:
The object of the rule is to relieve a party of the trouble and expense in
proving in the first instance an alleged fact, the existence or non-existence
of which is necessarily within the knowledge of the adverse party, and of
the necessity (to his opponents case) of establishing which such adverse
party is notified by his opponents pleadings.
The plaintiff may, of course, waive the rule and that is what must be
considered to have done (sic) by introducing evidence as to the execution
of the document and failing to object to the defendants evidence in
refutation; all this evidence is now competent and the case must be
decided thereupon.[23]
The determination of the other issues raised is dependent on whether
or not there was a breach of contract in bad faith on the part of the petitioner
in not allowing the Fontanillas to board United Airlines Flight 1108.
party having the burden of proof of an essential fact must produce a
preponderance of evidence thereon.[24] Although the evidence adduced by
the plaintiff is stronger than that presented by the defendant, a judgment
cannot be entered in favor of the former, if his evidence is not sufficient to
sustain his cause of action. The plaintiff must rely on the strength of his
own evidence and not upon the weakness of the defendants.[25] Proceeding
from this, and considering the contradictory findings of facts by the
Regional Trial Court and the Court of Appeals, the question before this
Court is whether or not private respondents were able to prove with
adequate evidence his allegations of breach of contract in bad faith.
We rule in the negative.
Time and again, the Court has pronounced that appellate courts
should not, unless for strong and cogent reasons, reverse the findings of
facts of trial courts. This is so because trial judges are in a better position
to examine real evidence and at a vantage point to observe the actuation
and the demeanor of the witnesses.[26] While not the sole indicator of the
credibility of a witness, it is of such weight that it has been said to be the
touchstone of credibility.[27]
Aniceto Fontanillas assertion that upon arrival at the airport at 9:45
a.m., he immediately proceeded to the check-in counter, and that Linda
Allen punched in something into the computer is specious and not
supported by the evidence on record. In support of their allegations, private
respondents submitted a copy of the boarding pass. Explicitly printed on
the boarding pass are the words Check-In Required. Curiously, the said
pass did not indicate any seat number. If indeed the Fontanillas checked in
at the designated time as they claimed, why then were they not assigned
seat numbers? Absent any showing that Linda was so motivated, we do not
buy into private respondents' claim that Linda intentionally deceived him,
and made him the laughing stock among the passengers.[28] Hence, as
correctly observed by the trial court:
Plaintiffs fail to realize that their failure to check in, as expressly required
in their boarding passes, is the very reason why they were not given their
respective seat numbers, which resulted in their being denied boarding. [29]
Neither do we agree with the conclusion reached by the appellate
court that private respondents' failure to comply with the check-in
requirement will not defeat his claim as the denied boarding rules were not
complied with. Notably, the appellate court relied on the Code of Federal
Regulation Part on Oversales, which states:
250.6 Exceptions to eligibility for denied boarding compensation.
A passenger denied board involuntarily from an oversold flight shall not
be eligible for denied board compensation if:
(a) The passenger does not comply with the carriers contract of carriage
or tariff provisions regarding ticketing, reconfirmation, check-in, and
acceptability for transformation.
The appellate court, however, erred in applying the laws of the
United States as, in the case at bar, Philippine law is the applicable
law. Although, the contract of carriage was to be performed in the United
States, the tickets were purchased through petitioners agent in Manila. It is
true that the tickets were rewritten in Washington, D.C. However, such fact
did not change the nature of the original contract of carriage entered into
by the parties in Manila.
In the case of Zalamea vs. Court of Appeals,[30] this Court applied the
doctrine of lex loci contractus. According to the doctrine, as a general rule,
the law of the place where a contract is made or entered into governs with
respect to its nature and validity, obligation and interpretation. This has
been said to be the rule even though the place where the contract was made
is different from the place where it is to be performed, and particularly so,
if the place of the making and the place of performance are the
same. Hence, the court should apply the law of the place where the airline
ticket was issued, when the passengers are residents and nationals of the
forum and the ticket is issued in such State by the defendant airline.
The law of the forum on the subject matter is Economic Regulations
No. 7 as amended by Boarding Priority and Denied Boarding
Compensation of the Civil Aeronautics Board, which provides that the
check-in requirement be complied with before a passenger may claim
against a carrier for being denied boarding:
SEC. 5. Amount of Denied Boarding Compensation Subject to the
exceptions provided hereinafter under Section 6, carriers shall pay to
passengers holding confirmed reserved space and who have presented
themselves at the proper place and time and fully complied with the
carriers check-in and reconfirmation procedures and who are
acceptable for carriage under the Carriers tariffs but who have been
denied boarding for lack of space, a compensation at the rate of: xx
Private respondents' narration that they were subjected to harsh and
derogatory remarks seems incredulous. However, this Court will not
attempt to surmise what really happened. Suffice to say, private respondent
was not able to prove his cause of action, for as the trial court correctly
observed:
xxx plaintiffs claim to have been discriminated against and insulted in the
presence of several people. Unfortunately, plaintiffs limited their
evidence to the testimony [of] Aniceto Fontanilla, without any
corroboration by the people who saw or heard the discriminatory remarks
and insults; while such limited testimony could possibly be true, it does
not enable the Court to reach the conclusion that plaintiffs have, by a
preponderance of evidence, proven that they are entitled to P1,650,000.00
damages from defendant.[31]
Transpoeh 7
As to the award of moral and exemplary damages, we find error in
the award of such by the Court of Appeals. For the plaintiff to be entitled
to an award of moral damages arising from a breach of contract of carriage,
the carrier must have acted with fraud or bad faith. The appellate court
predicated its award on our pronouncement in the case of Zalamea vs.
Court of Appeals, supra, where we stated:
Existing jurisprudence explicitly states that overbooking amounts to bad
faith, entitling passengers concerned to an award of moral
damages. In Alitalia Airways v. Court of Appeals, where passengers with
confirmed booking were refused carriage on the last minute, this Court
held that when an airline issues a ticket to a passenger confirmed on a
particular flight, on a certain date, a contract of carriage arises, and the
passenger has every right to expect that he would fly on that flight and on
that date. If he does not, then the carrier opens itself to a suit for breach of
contract of carriage. Where an airline had deliberately overbooked, it
took the risk of having to deprive some passengers of their seats in case
all of them would show up for check in. For the indignity and
inconvenience of being refused a confirmed seat on the last minute, said
passenger is entitled to moral damages. (Emphasis supplied.)
However, the Courts ruling in said case should be read in consonance
with existing laws, particularly, Economic Regulations No. 7, as amended,
of the Civil Aeronautics Board:
Sec 3. Scope. This regulation shall apply to every Philippine and foreign
air carrier with respect to its operation of flights or portions of flights
originating from or terminating at, or serving a point within the territory
of the Republic of the Philippines insofar as it denies boarding to a
passenger on a flight, or portion of a flight inside or outside the
Philippines, for which he holds confirmed reserved space. Furthermore,
this Regulation is designed to cover only honest mistakes on the part of
the carriers and excludes deliberate and willful acts of non-
accommodation. Provided, however, that overbooking not exceeding
10% of the seating capacity of the aircraft shall not be considered as
a deliberate and willful act of non-accommodation.
What this Court considers as bad faith is the willful and deliberate
overbooking on the part of the airline carrier. The above-mentioned law
clearly states that when the overbooking does not exceed ten percent
(10%), it is not considered as deliberate and therefore does not amount to
bad faith. While there may have been overbooking in this case, private
respondents were not able to prove that the overbooking on United Airlines
Flight 1108 exceeded ten percent.
As earlier stated, the Court is of the opinion that the private
respondents were not able to prove that they were subjected to coarse and
harsh treatment by the ground crew of United Airlines. Neither were they
able to show that there was bad faith on part of the carrier airline. Hence,
the award of moral and exemplary damages by the Court of Appeals is
improper. Corollarily, the award of attorney's fees is, likewise, denied for
lack of any legal and factual basis.
WHEREFORE, the petition is GRANTED. The decision of the
Court of Appeals in CA-G.R. CV No. 37044 is hereby REVERSED and
SET ASIDE. The decision of the Regional Trial Court of Makati City in
Civil Case No. 89-4268 dated April 8, 1991 is hereby REINSTATED.
SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 104235 November 18, 1993
SPOUSES CESAR & SUTHIRA ZALAMEA and LIANA
ZALAMEA, petitioners,
vs.
HONORABLE COURT OF APPEALS and TRANSWORLD
AIRLINES, INC., respondents.
Sycip, Salazar, Hernandez, Gatmaitan for petitioners.
Quisumbing, Torres & Evangelista for private-respondent.
NOCON, J.:
Disgruntled over TransWorld Airlines, Inc.'s refusal to
accommodate them in TWA Flight 007 departing from New York to
Los Angeles on June 6, 1984 despite possession of confirmed
tickets, petitioners filed an action for damages before the Regional
Trial Court of Makati, Metro Manila, Branch 145. Advocating
petitioner's position, the trial court categorically ruled that
respondent TransWorld Airlines (TWA) breached its contract of
carriage with petitioners and that said breach was "characterized
by bad faith." On appeal, however, the appellate court found that
while there was a breach of contract on respondent TWA's part,
there was neither fraud nor bad faith because under the Code of
Federal Regulations by the Civil Aeronautics Board of the United
States of America it is allowed to overbook flights.
The factual backdrop of the case is as follows:
Petitioners-spouses Cesar C. Zalamea and Suthira Zalamea, and
their daughter, Liana Zalamea, purchased three (3) airline tickets
from the Manila agent of respondent TransWorld Airlines, Inc. for a
flight to New York to Los Angeles on June 6, 1984. The tickets of
petitioners-spouses were purchased at a discount of 75% while
that of their daughter was a full fare ticket. All three tickets
represented confirmed reservations.
While in New York, on June 4, 1984, petitioners received notice of
the reconfirmation of their reservations for said flight. On the
appointed date, however, petitioners checked in at 10:00 a.m., an
hour earlier than the scheduled flight at 11:00 a.m. but were placed
on the wait-list because the number of passengers who had
checked in before them had already taken all the seats available
on the flight. Liana Zalamea appeared as the No. 13 on the wait-
list while the two other Zalameas were listed as "No. 34, showing a
party of two." Out of the 42 names on the wait list, the first 22
names were eventually allowed to board the flight to Los Angeles,
including petitioner Cesar Zalamea. The two others, on the other
hand, at No. 34, being ranked lower than 22, were not able to fly.
As it were, those holding full-fare tickets were given first priority
among the wait-listed passengers. Mr. Zalamea, who was holding
the full-fare ticket of his daughter, was allowed to board the plane;
while his wife and daughter, who presented the discounted tickets
were denied boarding. According to Mr. Zalamea, it was only later
Transpoeh 8
when he discovered the he was holding his daughter's full-fare
ticket.
Even in the next TWA flight to Los Angeles Mrs. Zalamea and her
daughter, could not be accommodated because it was also fully
booked. Thus, they were constrained to book in another flight and
purchased two tickets from American Airlines at a cost of Nine
Hundred Eighteen ($918.00) Dollars.
Upon their arrival in the Philippines, petitioners filed an action for
damages based on breach of contract of air carriage before the
Regional Trial Court of Makati, Metro Manila, Branch 145. As
aforesaid, the lower court ruled in favor of petitioners in its
decision 1 dated January 9, 1989 the dispositive portion of which
states as follows:
WHEREFORE, judgment is hereby rendered
ordering the defendant to pay plaintiffs the
following amounts:
(1) US $918.00, or its peso equivalent at the
time of payment representing the price of the
tickets bought by Suthira and Liana Zalamea
from American Airlines, to enable them to fly to
Los Angeles from New York City;
(2) US $159.49, or its peso equivalent at the
time of payment, representing the price of
Suthira Zalamea's ticket for TWA Flight 007;
(3) Eight Thousand Nine Hundred Thirty-Four
Pesos and Fifty Centavos (P8,934.50, Philippine
Currency, representing the price of Liana
Zalamea's ticket for TWA Flight 007,
(4) Two Hundred Fifty Thousand Pesos
(P250,000.00), Philippine Currency, as moral
damages for all the plaintiffs'
(5) One Hundred Thousand Pesos
(P100,000.00), Philippine Currency, as and for
attorney's fees; and
(6) The costs of suit.
SO ORDERED. 2
On appeal, the respondent Court of Appeals held that moral
damages are recoverable in a damage suit predicated upon a
breach of contract of carriage only where there is fraud or bad
faith. Since it is a matter of record that overbooking of flights is a
common and accepted practice of airlines in the United States and
is specifically allowed under the Code of Federal Regulations by
the Civil Aeronautics Board, no fraud nor bad faith could be
imputed on respondent TransWorld Airlines.
Moreover, while respondent TWA was remiss in not informing
petitioners that the flight was overbooked and that even a person
with a confirmed reservation may be denied accommodation on an
overbooked flight, nevertheless it ruled that such omission or
negligence cannot under the circumstances be considered to be
so gross as to amount to bad faith.
Finally, it also held that there was no bad faith in placing
petitioners in the wait-list along with forty-eight (48) other
passengers where full-fare first class tickets were given priority
over discounted tickets.
The dispositive portion of the decision of respondent Court of
Appeals3 dated October 25, 1991 states as follows:
WHEREFORE, in view of all the foregoing, the
decision under review is hereby MODIFIED in
that the award of moral and exemplary damages
to the plaintiffs is eliminated, and the defendant-
appellant is hereby ordered to pay the plaintiff
the following amounts:
(1) US$159.49, or its peso equivalent at the time
of the payment, representing the price of Suthira
Zalamea's ticket for TWA Flight 007;
(2) US$159.49, or its peso equivalent at the time
of the payment, representing the price of Cesar
Zalamea's ticket for TWA Flight 007;
(3) P50,000.00 as and for attorney's fees.
(4) The costs of suit.
SO ORDERED.4
Not satisfied with the decision, petitioners raised the case on
petition for review on certiorari and alleged the following errors
committed by the respondent Court of Appeals, to wit:
I.
. . . IN HOLDING THAT THERE WAS NO
FRAUD OR BAD FAITH ON THE PART OF
RESPONDENT TWA BECAUSE IT HAS A
RIGHT TO OVERBOOK FLIGHTS.
II.
. . . IN ELIMINATING THE AWARD OF
EXEMPLARY DAMAGES.
III.
. . . IN NOT ORDERING THE REFUND OF
LIANA ZALAMEA'S TWA TICKET AND
PAYMENT FOR THE AMERICAN AIRLINES
TICKETS.5
That there was fraud or bad faith on the part of respondent airline
when it did not allow petitioners to board their flight for Los
Angeles in spite of confirmed tickets cannot be disputed. The U.S.
law or regulation allegedly authorizing overbooking has never been
proved. Foreign laws do not prove themselves nor can the courts
take judicial notice of them. Like any other fact, they must be
alleged and proved.6 Written law may be evidenced by an official
publication thereof or by a copy attested by the officer having the
legal custody of the record, or by his deputy, and accompanied
with a certificate that such officer has custody. The certificate may
be made by a secretary of an embassy or legation, consul general,
consul, vice-consul, or consular agent or by any officer in the
foreign service of the Philippines stationed in the foreign country in
which the record is kept, and authenticated by the seal of his
office.7
Transpoeh 9
Respondent TWA relied solely on the statement of Ms. Gwendolyn
Lather, its customer service agent, in her deposition dated January
27, 1986 that the Code of Federal Regulations of the Civil
Aeronautics Board allows overbooking. Aside from said statement,
no official publication of said code was presented as evidence.
Thus, respondent court's finding that overbooking is specifically
allowed by the US Code of Federal Regulations has no basis in
fact.
Even if the claimed U.S. Code of Federal Regulations does exist,
the same is not applicable to the case at bar in accordance with
the principle of lex loci contractus which require that the law of the
place where the airline ticket was issued should be applied by the
court where the passengers are residents and nationals of the
forum and the ticket is issued in such State by the defendant
airline.8 Since the tickets were sold and issued in the Philippines,
the applicable law in this case would be Philippine law.
Existing jurisprudence explicitly states that overbooking amounts
to bad faith, entitling the passengers concerned to an award of
moral damages. In Alitalia Airways v. Court of Appeals,9 where
passengers with confirmed bookings were refused carriage on the
last minute, this Court held that when an airline issues a ticket to a
passenger confirmed on a particular flight, on a certain date, a
contract of carriage arises, and the passenger has every right to
expect that he would fly on that flight and on that date. If he does
not, then the carrier opens itself to a suit for breach of contract of
carriage. Where an airline had deliberately overbooked, it took the
risk of having to deprive some passengers of their seats in case all
of them would show up for the check in. For the indignity and
inconvenience of being refused a confirmed seat on the last
minute, said passenger is entitled to an award of moral damages.
Similarly, in Korean Airlines Co., Ltd. v. Court of Appeals, 10 where
private respondent was not allowed to board the plane because
her seat had already been given to another passenger even before
the allowable period for passengers to check in had lapsed despite
the fact that she had a confirmed ticket and she had arrived on
time, this Court held that petitioner airline acted in bad faith in
violating private respondent's rights under their contract of carriage
and is therefore liable for the injuries she has sustained as a result.
In fact, existing jurisprudence abounds with rulings where the
breach of contract of carriage amounts to bad faith. In Pan
American World Airways, Inc. v. Intermediate Appellate
Court, 11 where a would-be passenger had the necessary ticket,
baggage claim and clearance from immigration all clearly and
unmistakably showing that she was, in fact, included in the
passenger manifest of said flight, and yet was denied
accommodation in said flight, this Court did not hesitate to affirm
the lower court's finding awarding her damages.
A contract to transport passengers is quite different in kind and
degree from any other contractual relation. So ruled this Court
in Zulueta v. Pan American World Airways, Inc. 12 This is so, for a
contract of carriage generates a relation attended with public duty
— a duty to provide public service and convenience to its
passengers which must be paramount to self-interest or
enrichment. Thus, it was also held that the switch of planes from
Lockheed 1011 to a smaller Boeing 707 because there were only
138 confirmed economy class passengers who could very well be
accommodated in the smaller planes, thereby sacrificing the
comfort of its first class passengers for the sake of economy,
amounts to bad faith. Such inattention and lack of care for the
interest of its passengers who are entitled to its utmost
consideration entitles the passenger to an award of moral
damages. 13
Even on the assumption that overbooking is allowed, respondent
TWA is still guilty of bad faith in not informing its passengers
beforehand that it could breach the contract of carriage even if
they have confirmed tickets if there was overbooking. Respondent
TWA should have incorporated stipulations on overbooking on the
tickets issued or to properly inform its passengers about these
policies so that the latter would be prepared for such eventuality or
would have the choice to ride with another airline.
Respondent TWA contends that Exhibit I, the detached flight
coupon upon which were written the name of the passenger and
the points of origin and destination, contained such a notice. An
examination of Exhibit I does not bear this out. At any rate, said
exhibit was not offered for the purpose of showing the existence of
a notice of overbooking but to show that Exhibit I was used for
flight 007 in first class of June 11, 1984 from New York to Los
Angeles.
Moreover, respondent TWA was also guilty of not informing its
passengers of its alleged policy of giving less priority to discounted
tickets. While the petitioners had checked in at the same time, and
held confirmed tickets, yet, only one of them was allowed to board
the plane ten minutes before departure time because the full-fare
ticket he was holding was given priority over discounted tickets.
The other two petitioners were left behind.
petitioners. In accordance with Article 2201, New Civil Code,
respondent TWA should, therefore, be responsible for all damages
which may be reasonably attributed to the non-performance of its
obligation. In the previously cited case of Alitalia Airways v. Court
of Appeals, 15 this Court explicitly held that a passenger is entitled
to be reimbursed for the cost of the tickets he had to buy for a flight
to another airline. Thus, instead of simply being refunded for the
cost of the unused TWA tickets, petitioners should be awarded the
actual cost of their flight from New York to Los Angeles. On this
score, we differ from the trial court's ruling which ordered not only
the reimbursement of the American Airlines tickets but also the
refund of the unused TWA tickets. To require both prestations
would have enabled petitioners to fly from New York to Los
Angeles without any fare being paid.
The award to petitioners of attorney's fees is also justified under
Article 2208(2) of the Civil Code which allows recovery when the
defendant's act or omission has compelled plaintiff to litigate or to
incur expenses to protect his interest. However, the award for
moral damages and exemplary damages by the trial court is
excessive in the light of the fact that only Suthira and Liana
Zalamea were actually "bumped off." An award of P50,000.00
moral damages and another P50,000.00 exemplary damages
would suffice under the circumstances obtaining in the instant
case.

It is respondent TWA's position that the practice of overbooking WHEREFORE, the petition is hereby GRANTED and the decision
and the airline system of boarding priorities are reasonable of the respondent Court of Appeals is hereby MODIFIED to the
policies, which when implemented do not amount to bad faith. But extent of adjudging respondent TransWorld Airlines to pay
the issue raised in this case is not the reasonableness of said damages to petitioners in the following amounts, to wit:
policies but whether or not said policies were incorporated or
deemed written on petitioners' contracts of carriage. Respondent (1) US$918.00 or its peso equivalent at the time of payment
TWA failed to show that there are provisions to that effect. Neither representing the price of the tickets bought by Suthira and Liana
did it present any argument of substance to show that petitioners Zalamea from American Airlines, to enable them to fly to Los
were duly apprised of the overbooked condition of the flight or that Angeles from New York City;
there is a hierarchy of boarding priorities in booking passengers. It
is evident that petitioners had the right to rely upon the assurance (2) P50,000.00 as moral damages;
of respondent TWA, thru its agent in Manila, then in New York, that
their tickets represented confirmed seats without any qualification.
The failure of respondent TWA to so inform them when it could (3) P50,000.00 as exemplary damages;
easily have done so thereby enabling respondent to hold on to
them as passengers up to the last minute amounts to bad faith. (4) P50,000.00 as attorney's fees; and
Evidently, respondent TWA placed its self-interest over the rights
of petitioners under their contracts of carriage. Such conscious (5) Costs of suit.
disregard of petitioners' rights makes respondent TWA liable for
moral damages. To deter breach of contracts by respondent TWA
in similar fashion in the future, we adjudge respondent TWA liable SO ORDERED.
for exemplary damages, as well.

Petitioners also assail the respondent court's decision not to

require the refund of Liana Zalamea's ticket because the ticket was
used by her father. On this score, we uphold the respondent court.
Petitioners had not shown with certainty that the act of respondent
TWA in allowing Mr. Zalamea to use the ticket of her daughter was
due to inadvertence or deliberate act. Petitioners had also failed to
establish that they did not accede to said agreement. The logical
conclusion, therefore, is that both petitioners and respondent TWA
agreed, albeit impliedly, to the course of action taken.

The respondent court erred, however, in not ordering the refund of

the American Airlines tickets purchased and used by petitioners
Suthira and Liana. The evidence shows that petitioners Suthira
and Liana were constrained to take the American Airlines flight to
Los Angeles not because they "opted not to use their TWA tickets
on another TWA flight" but because respondent TWA could not
accommodate them either on the next TWA flight which was also
fully booked. 14 The purchase of the American Airlines tickets by
petitioners Suthira and Liana was the consequence of respondent
TWA's unjustifiable breach of its contracts of carriage with
Transpoeh 10
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-28589 February 29, 1972
RAFAEL ZULUETA, ET AL., plaintiffs-appellees,
vs.
PAN AMERICAN WORLD AIRWAYS, INC., defendant-appellant.
Jose W. Diokno for plaintiffs-appellees.
Ross, Salcedo, Del Rosario, Bito and Misa for defendant-
appellant.
CONCEPCION, C.J.:p
Appeal, taken by defendant Pan American World Airways, Inc.,
from a decision of the Court of First Instance of Rizal, sentencing
said defendant to pay herein plaintiffs — Rafael Zulueta, Telly
Albert Zulueta and Carolinda Zulueta — "the sum of P5,502.85, as
actual damages; plus the further sum of P1,000,000.00 as moral
damages; the further sum of P400,000.00 as exemplary damages;
and attorney's fees in the sum of P100,000.00" with the costs
against said defendant, hereinafter referred to as PANAM for the
sake of brevity.
It is not disputed that, on October 23, 1964, the spouse Rafael
Zulueta and Telly Albert Zulueta — hereinafter referred to as
plaintiff and Mrs. Zulueta, respectively — as well as their daughter,
Carolinda Zulueta — hereinafter referred to as Miss Zulueta —
were passengers aboard a PANAM plane, on Flight No. 841-23,
from Honolulu to Manila, the first leg of which was Wake Island. As
the plane landed on said Island, the passengers were advised that
they could disembark for a stopover of about 30 minutes. Shortly
before reaching that place, the flight was, according to the
plaintiffs, "very rough." Testifying for PANAM its purser, Miss
Schmitz, asserted, however, that it was "very calm"; but her notes,
Exhibit 7 — prepared upon the request of Captain Zentner, on
account of the incident involved in this case — state that there was
"unusually small amount of roughness," which His Honor, the Trial
Judge, considered properly as "an admission that there was
roughness, only the degree thereof is in dispute." In any event,
plaintiff testified that, having found the need to relieve himself, he
went to the men's comfort room at the terminal building, but found
it full of soldiers, in view of which he walked down the beach some
100 yards away.
Meanwhile, the flight was called and when the passengers had
boarded the plane, plaintiff's absence was noticed. The take-off
was, accordingly, delayed and a search for him was conducted by
Mrs. Zulueta, Miss Zulueta and other persons. Minutes later,
plaintiff was seen walking back from the beach towards the
terminal. Heading towards the ramp of the plane, plaintiff
remarked, "You people almost made me miss your flight. You have
a defective announcing system and I was not paged." At this point,
the decision appealed from has the following to say:
(1) Plaintiffs were on their way to the plane in
order to board it, but defendant's employees —
Transpoeh 11
Kenneth Sitton, defendants airport manager,
according to plaintiffs; Wayne Pendleton,
defendant's airport customer service supervisor,
according to defendant — stopped them at the
gate. This is what the report of Wayne Pendleton
the airport customer service supervisor, says:
...I made no comment to the passenger but
turned and led the group toward the ramp. Just
as we reached the boarding gate, Mr. Zulueta
spoke to me for the first time saying, `You
people almost made me miss your flight. You
have a defective announcing system and I was
not paged."
I was about to make some reply when I noticed
the captain of the flight standing on the ramp,
midway between the gate and the aircraft, and
talking with the senior maintenance supervisor
and several other persons. The captain
motioned for me to join him which I
did, indicating to the Zulueta family that they
should wait for a moment at the gate.
-- Exh. 5 .
(2) Thereafter, one of defendant's employees —
Mr. Sitton, according to plaintiffs; Mr. Pendleton
according to defendants — asked plaintiffs to
turn over their baggage claim checks. Plaintiffs
did so, handing him four (4) claim checks.
(3) However, only three (3) bags were located
and segregated from the rest of the passenger's
luggage. The items hand-carried by plaintiffs,
except for plaintiff's overcoat, were also brought
down. These hand-carried items, however, were
not opened or inspected; later, plaintiffs Mrs.
Zulueta and Miss Zulueta were permitted to
reboard the plane with their hand-carried
luggage; and when the plane took off, about two
and a half hours later, it carried plaintiff's fourth
bag, his overcoat and the hand-carried luggage.
(4) Once three bags had been identified, and
while the search was going on for the fourth bag,
Mr. Sitton, defendant's airport manager,
demanded that plaintiffs open the bags (actually,
they were closed, but not locked) and allow
defendant's employees to inspect them. Plaintiff
Rafael Zulueta refused and warned that
defendant could open the bags only by force and
at its peril of a law suit.
(5) Mr. Sitton, defendant's manager, then told
plaintiff that he would not be allowed to proceed
to Manila on board the plane and handed
Zulueta the following letters:

"Mr. Zulueta:
Passenger aboard flight 84123
Honolulu/Manila .
Sir:
We are forced to off-load you
from flight 84123 due to the
fact that you have refused to
open your checked baggage
for Inspection as requested.
During your stay on Wake
Island, which will be for a
minimum of one week, you will
be charged $13.30 per day for
each member of your party.
K. Sitton
Airport Manager, Wake Island
Pan American World Airways, Inc."
— Exh. D
(6) All this happened in plain view and within
earshot of the other passengers on the plane,
many of whom were Filipinos who knew
plaintiffs;
The departure of the plane was delayed for
about two hours
(7) Though originally all three plaintiffs had been
off loaded, plaintiff requested that his wife and
daughter be permitted to continue with the flight.
This was allowed but they were required to leave
the three bags behind. Nevertheless, the plane
did fly with the Plaintiff's fourth bag; it was found
among all other passengers' luggage flown to
Manila upon the plane's arrival here.
(8) Upon arrival at Manila, Mrs. Zulueta
demanded of defendant's Manila office that it re-
route plaintiff Rafael Zulueta to Manila at the
earliest possible time, by the fastest route, and
at its expense; defendant refused; so plaintiffs
were forced to pay for his ticket and to send him
money as he was without funds.
Transpoeh 12
(9) On Octobere 27, 1964, plaintiff Zulueta finally
arrived at Manila,
r after spending two nights at
Wake, going back
1 to Honolulu, and from
Honolulu flying9thru Tokyo to Manila.
6
4
(10) On December 21, 1964, plaintiffs
demanded that defendant reimburse them in the
W
sum of P1,505,502.85 for damages but
a
defendants refused to do so; hence this action.
k
e
In its brief, PANAM maintains that I the trial court erred: (1) "in not
granting defendant additional hearing
s dates (not a postponement)
for the presentation of its other witnesses";
l (2) "in assuming it to be
true that the reason plaintiff Rafael
a Zulueta did not come aboard
when the passengers were reboarded n was that he had gone to the
beach to relieve himself"; (3) "in not
d holding that the real reason
why plaintiff Rafael Zulueta did not reboard the plane, when the
announcement to do so was made, was that he had a quarrel with
his wife and after he was found at the beach and his intention to be
left behind at Wake was temporarily thwarted he did everything
calculated to compel Pan American personnel to leave him
behind"; (4) "in accepting as true plaintiff Rafael Zulueta's claim of
what occurred when; he arrived at the terminal after he was found
at the beach"; (5) "in not holding that the captain was entitled to an
explanation for Zulueta's failure to reboard and not having received
a reasonable explanation and because of Zulueta's irrational
behavior and refusal to have his bags examined, the captain had
the right and duty to leave Zulueta behind"; (6) "in condemning the
defendant to pay plaintiffs P5,502.85 as actual damages plus the
further sum of P1,000,000.00 as moral damages, and the further
sum of P400,000.00 as exemplary damages, and attorneys' fees in
the sum of P100,000.00"; and (7) "in not granting defendant's
counterclaim of attorney's fees and expenses of litigation." .
PANAM's first assignment of error refers to the denial of its motion,
dated October 20, 1966, that it "be granted other hearing dates
about two months from today so as to be able to present
defendant's other witnesses or their depositions."
It appears that the complaint in this case was filed on September
30, 1965. It was amended on December 1, 1965, and again on
April 14, 1966. PANAM answered the second amended complaint
on May 6, 1966. After a pre-trial conference, held on May 28,
1966, the case was set for hearing on June 1, 2 and 3, 1966. By
subsequent agreement of the parties, the hearing was, on June 3,
1966, reset for August 1, 2 and 3, 1966. Plaintiffs rested their case
on August 2, 1966, whereupon it was agreed that PANAM's
witnesses would be presented "at a later date," months later,
because they would "come from far-flung places like Wake Island,
San Francisco, Seattle and it will take time to arrange for their
coming here." Accordingly the case was reset for October 17, 18
and 19, 1966, at 8:30 a.m. On motion of the plaintiffs, the trial
scheduled for October 17 was cancelled, without any objection on
the part of PANAM but, to offset said action, additional hearings
were set for October 18 and 19, in the afternoon, apart from those
originally set in the morning of these dates. Before the
presentation of PANAM's evidence, in the morning of October 18,
1966, plaintiffs' counsel asked for the names of the former's
witnesses, so that those not on the witness stand could be
excluded from the courtroom. PANAM's counsel announced that
his witnesses were Marshall Stanley Ho, Kenneth Sitton, Michael
Thomas, Wayne S. Pendleton, Capt. Robert Zentner and Miss
Carol Schmitz.
The defense then proceeded to introduce the testimony of said
witnesses, and consumed therefor the morning and afternoon of
October 18 and the morning of October 19. Upon the conclusion,
that morning, of the testimony of the last witness for the defense,
its counsel asked that it "be given an opportunity to present our
other witnesses who are not present today, at the convenience of
the Court." The motion was denied, but, said counsel sought a
reconsideration and the court gave PANAM a last chance to
present its "other witnesses" the next day, October 20. Instead of
doing so, PANAM filed a written motion reiterating its prayer for
"other hearing dates about two months from today so as to be able
to present defendant's other witnesses or their depositions." Upon
denial of this motion, PANAM made an offer of the testimony it
expected from one Edgardo Gavino, an unnamed meteorologist,
either Sue Welby and/or Helga Schley, and John C. Craig, Ida V.
Pomeroy, Herman Jaffe, Gerry Cowles and Col. Nilo de Guia.
His Honor, the Trial Judge, did not commit a reversible error in
denying said motion of October 20, 1966. PANAM knew, as early
as August 2, 1966, that its turn to present evidence would take
place, as agreed upon, about two (2) months and a half later, or on
October 17, 18 and 19, 1966. PANAM has not offered any valid
excuse for its failure to bring to court the witnesses mentioned in
said motion, despite the assurance given by its counsel, on August
2, 1966, that the defense would "spare no effort to bring them
here," or, if they could not be brought due to circumstances
beyond PANAM's control, to "submit their deposition." The records
do not show that any such effort to bring the aforementioned
witnesses had been exerted. The defense has not even tried to
explain why the deposition of said witnesses was not taken. What
is worse, the proffered explanation — that the six (6) persons who
testified for the defense1 were believed, by defense counsel, to be
enough for the three (3) days of October set for the reception of his
evidence2 — indicates that no effort whatsoever had been made
either to bring the "other witnesses"3 or to take and submit their
depositions.
Besides, the testimony allegedly expected of said other witnesses
for the defense — namely: (1) that there was, according to official
records, no turbulence in the flight from San Francisco to Honolulu,
on which the testimony of Carol Schmitz had touched; (2) that Ida
V. Pomeroy and John C. Craig would say that the passengers
were advised not to go beyond the terminal and that the stopover
would be for about 30 minutes only, on which duration of the
stopover Miss Schmitz had, also testified, as she could have
similarly testified on said advice, had it been given; (3) that either
Helga Schley or Sue Welby would narrate the sympathy with which
Mrs. Zulueta was allegedly treated during the flight from Wake
Island to Manila, which is not particularly relevant or material in the
case at bar; (4) that Herman Jaffe, Gerry Cowles and Nilo de Guia
were, also, expected to corroborate the testimony of Capt.
Zentner; and (5) that Edgardo Gavino was expected to corroborate
Michael Thomas regarding the remarks made by the plaintiff to
Mrs. Zulueta and Miss Zulueta when they and other members of
the searching party found him in the early morning of October 23,
1964 -- were merely cumulative in nature
Then, again, PANAM did not comply with section 4 of Rule 22 of
the Rules of Court, reading:
SEC. 4. Requisites of motion to postpone trial for
absence of evidence. — A motion to postpone a
trial on the ground of absence can be granted
only upon affidavit showing the materiality of
evidence expected to be obtained, and that due
diligence has been used to procure it. But if the
adverse party admits the facts to be given in
evidence, even if he objects or reserves the right
to object to their admissibility, the trial must not
be postponed." .
Although this provision refers to motions "to postpone trial," it
applies with equal force to motions like the one under
consideration, there being no plausible reason to distinguish
Transpoeh 13
between the same and a motion for postponement owing to the
"absence of evidence."
The second, third and fourth assignments of error are interrelated.
They refer to the question whether the reason why plaintiff went to
the beach was to relieve himself, as testified to by him, or to
remain in Wake Island because he had quarreled with his wife, as
contended by PANAM's counsel.
The latter contention however, is utterly devoid of merit. To begin
with, plaintiff's testimony about what he did upon reaching the
beach is uncontradicted. Secondly, other portions of his testimony
— such as, for instance, that the flight was somewhat rough,
shortly before reaching Wake Island; that there were quite a
number of soldiers in the plane and, later, in the terminal building;
that he did not voluntarily remain in Wake Island, but was "off-
loaded" by PANAM's agent therein — are borne out by the very
evidence for the defense. Thirdly, PANAM's efforts to show that
plaintiff had decided to remain in the Island because he had
quarreled with Mrs. Zulueta — which is ridiculous — merely
underscores the artificious nature of PANAM's contention.
Fourthly, there is absolutely no direct evidence about said alleged
quarrel. Nobody testified about it. Counsel for the defense has, in
effect, merely concluded that there must have been such quarrel
because, when the searching party located plaintiff, he —
according to Stanley Ho — was "shouting in a loud tone of voice"
— not at his wife, but — "towards his wife and daughter," who
headed said party and to which the words spoken were addressed,
according to plaintiff. Capt. Zentner said that plaintiff was "angry
with them" — Mrs. Zulueta and Miss Zulueta — who Michael
Thomas affirmed — were saying "I am sorry, I am sorry"; whereas,
Wayne S. Pendleton declared that Gavino told him that this
"seems to stem from a domestic issue" between Mr. and Mrs.
Zulueta. Surely, this alleged surmise, not even by Pendleton but by
Gavino — who was not placed on the witness stand — cannot be
taken as competent evidence that plaintiff had quarreled with his
wife, apart from the circumstance that such quarrel — if it took
place and there is absolutely no evidence or offer to prove that
anything had transpired between husband and wife before
reaching Wake Island which may suggest a misunderstanding
between them — does not warrant jumping at the conclusion that
plaintiff had decided to remain in the Island, for he would gain
nothing thereby.
Needless to say, if plaintiff's purpose in going to the beach was to
hide from Mrs. and Miss Zulueta and PANAM's personnel, so that
he may be left in the Island, he, surely, would not have walked
back from the beach to the terminal, before the plane had resumed
its flight to Manila, thereby exposing his presence to the full view of
those who were looking for him.
Then, again, the words uttered by him as he saw the search party
and approached the plane — "You people almost made me miss
your flight. You have a defective announcing system and I was not
paged" — and the "belligerent" manner — according to Captain
Zentner — in which he said it revealed his feeling of distress at the
thought that the plane could have left without him.4
The second, third and fourth assignments of error are thus clearly
untenable.
In connection with the fifth assignment of error, PANAM's witness,
Captain Zentner, testified that, while he was outside the plane,
waiting for the result of the search, a "man" approached him and
expressed concern over the situation; that the "man" said he was
with the State Department; that he, his wife and their children, who
were on board the aircraft, would not want to continue the flight
unless the missing person was found; that the "man" expressed
fear of a "bomb," a word he used reluctantly, because he knew it is
violative of a Federal law when said at the wrong time; that when
plaintiff came, Zentner asked him: "why did you not want to get on
the airplane?"; that plaintiff then became "very angry" and spoke to
him "in a way I have not been spoken to in my whole adult life";
that the witness explained: "I am Captain of the aircraft and it is my
duty to see to the flight's safety"; that he (Zentner) then told Wayne
Pendleton — PANAM's Customer Service Supervisor — to get
plaintiff's "bags off the plane to verify ... about the bomb"; that
PANAM's airport manager (K. Sitton) "got three bags of Mr.
Zulueta"; that his fourth bag could not be located despite a
thorough search; that believing that it must have been left behind,
in Honolulu, "we took off"; and that he (Zentner) would not have
done so had he thought it was still aboard.
The lower court did not err in giving no credence to this testimony.
Indeed, Captain Zentner did not explain why he seemingly
assumed that the alleged apprehension of his informant was
justified. He did not ask the latter whether he knew anything in
particular about plaintiff herein, although some members of the
crew would appear to have a notion that plaintiff is an impresario.
Plaintiff himself intimated to them that he was well known to the
U.S. State Department. Apparently, Captain Zentner did not even
know the informant's name. Neither did the captain know whether
the informant was really working for or in the State Department. In
other words, there was nothing — absolutely nothing — to justify
the belief that the luggage of the missing person should be
searched, in order to ascertain whether there was a bomb in it;
that, otherwise, his presence in the aircraft would be inimical to its
safety; and that, consequently, he should be off-loaded.
In fact, PANAM has not given the name of that "man" of the State
Department. Neither has the defense tried to explain such
omission. Surely, PANAM's records would have disclosed the
identity of said "man," if he were not a mere figment of the
imagination. The list of passengers has been marked as Exh. A,
and yet PANAM has not pointed out who among them is the
aforementioned "man".
The trial court did not believe the testimony of Captain Zentner and
rejected the theory of the defense, for the following reasons:
(1) The defendant had contracted to transport
plaintiff from Honolulu to Manila. It was its legal
obligation to do so, and it could be excused from
complying with the obligation only, if the
passenger had refused to continue with the trip
or it had become legally or physically impossible
without the carrier's fault, to transport him.
(2) In this case, it is plain that Zulueta was
desirous of continuing with the trip. Although
defendant's witnesses claim that Zulueta refused
to board the plane, its own evidence belies this
claim. The letter, Exh. "D", shows that it was
defendant who off-loaded Zulueta; not Zulueta
who resisted from continuing the trip. In his
testimony before the Court, Capt. Zentner,
defendant's pilot, said that if a passenger
voluntarily left the plane, the term used would be
`desistance' but the term "off-load" means that it
is the decision of the Captain not to allow the
passenger or luggage to continue the flight.
However, Capt. Zentner admitted on his
testimony that "his drunkenness... was of no
consequence in my report; (it) ... had nothing to
Transpoeh 14
do with his being belligerent and unfriendly in his
attitude towards me and the rest of the members
of the crew." The written report of Capt. Zentner
made in transit from Wake to Manila "intimated
he might possibly continue;" but "due to drinking,
belligerent attitude, he was off-loaded along with
his locked bags." (Exh. 10). In a later report,
Zentner admitted, "The decision to leave Mr.
Zulueta and his locked luggage in Wake was
mine and alone." (Exh. 9). Defendant's airport
customer service supervisor, W.S. Pendleton,
reported that:
"After the search for Mr. Zulueta had continued
almost 20 minutes and it was apparent that he
was not be found in the terminal building or
immediate vicinity, I proceeded to the parking lot
and picked up my jeep continue the search in
more remote areas. Just as I was getting
underway, a small group of persons approach
from the direction of the beach and a voice
called out the passenger had been found.
Having parked the jeep again, I walked toward
the group and was met by PAA fleet-serviceman
E. Gavino who was walking somewhere ahead
of the others. Mr. Gavino remarked to me
privately that the trouble seemed to have
stemmed from some domestic difference
between the Passenger and his wife who was
not at his side and returning with him to the gate.
"On hearing Mr. Gavino's remark, I made no
comment to the passenger but turned and led
the group toward the ramp. Just as we reached
the boarding gate, Mr. Zulueta spoke to me for
the first time saying, "You people almost made
me miss your flight. You have a defective
announcing system and I was not paged."
— Exh. 5
Evidently, these could not have been the words
of a man who refused to board the plane.
(3) There was no legal or physical impossibility
for defendant to transport plaintiff Zulueta from
Wake to Manila as it had contracted to do.
Defendant claims that the safety of its craft and
of the other passengers demanded that it
inspect Zulueta's luggage and when he refused
to allow inspection that it had no recourse but to
leave him behind. The truth that, knowing that of
plaintiff's four pieces of luggage, one could still
have been — as it was — aboard, defendant's
plane still flew on to Manila. Surely, if the
defendant's pilot and employees really believed
that Zulueta had planted a bomb in one of the
bags they would not have flown on until they had
made sure that the fourth bag had been left
behind at Honolulu until enough time had lapsed
for the bomb to have been exploded, since
presumably it had to have been set to go off
before they reached Manila.
"At any rate, it was quite evident that Zulueta
had nothing to hide; for the report of defendant's
witness, Mr. Stanley E. Ho, U.S. Marshall on
Wake, has this to say: "
"About twenty minutes later while an attempt
was being made to locate another piece of Mr.
Zulueta's luggage his daughter, Carolinda
approached her father and wanted to get some
clothes from one of the suitcases. Mr. Zulueta
asked the undersigned if it was alright if he
opened the suitcases and get the necessary
clothes. To this I stated he was free to open his
luggage and obtain whatever he needed. Mr.
Zulueta opened a suitcase and took the dress
for her then boarded the aircraft."
— Exh. 2B .
(4) What is evident to the Court is that defendant
— acted in a manner deliberately calculated to
humiliate and shame plaintiffs. Although the
plane was held up to wait for plaintiff — for, as
the Captain admitted in his testimony, he did so
because he knew that it would be a week before
another plane would come in for Manila (t.s.n.,
18 Oct. 1966, pp. 59-62) when plaintiff did come,
he was met and treated roughly by defendant's
manager Sitton. Here is what Zulueta testified to:
"Q. — When you saw your
wife and daughter what
happened? A. — Then I
started going towards the
airplane. At the ramp, I do not
know what they call it, as soon
as they arrived there, there
was a man who subsequently
identified himself as Kenneth
Sitton. He identified himself as
the Airport Manager of Wake
Island. He did not ask me what
happened, was I sick, he
looked at me and said, what in
the hell do you think you are?
Get on that plane. Then I said,
what right have you to talk to
me that way, I am a paying
passenger. Do not treat me
this way. And this started the
altercation, and then he said,
do you know you held up the
plane? And I answered, this is
not my fault, I was sick. Did it
not occur to you to ask me
how I feel; then he said get on
that plane.
"Q. — What happened? A. —
we started discussing kept
saying, "You get on that plane"
and then I said, "I don't have
to get on that plane." After a
prolonged discussion, he said,
give me your baggage tags
and I gave him four baggage
tickets or tags. I did not realize
what he was up to until finally,
I saw people coming down the
airplane and police cars
arrived and people were
coming down the ramp. I gave
him the four baggage tags and
a few minutes late, he brought
Transpoeh 15
three baggages and said,
open them up. I said, to begin
with, there is one baggage
missing and that missing bag
is my bag. Then I said you
cannot make me open these
baggages unless you are
United States customs
authorities and when I arrive in
the Philippines they can be
opened by the Philippine
Customs authorities. But an
Airport Manager cannot make
me open my bags unless you
do exactly the same thing to
all the passengers. Open the
bags of all the other
passengers and I will open my
bag.
"Q. — What did he say: A. —
He just kept on saying open
your bag, and I drew up my
hands and said, you want, you
open yourself or give me a
search warrant I shall open
this bag but give me a search
warrant and then I asked, who
is the Chief of Police, and he
said, "I am Chief of Police,"
then I said how can you be the
Chief Police and Airport
Manager and then he started
to talk about double
compensation and by this time
we were both quarreling and
he was shouting and so with
me. Then there was a man
who came around and said
`open the bag' and I said,
show the warrant of arrest and
do all the checking and the
discussion kept on going, and
finally I said look, my fourth
bag is missing and he said, "I
don't give damn." People at
the time were surrounding us
and staring at us and also the
passengers. My wife and
daughter all along had been
made to sit on a railing and
this man screaming and
looking at my wife and
daughter. Then he said, will
you pull these three monkeys
out of here? then I said, will
you send my wife and
daughter up the plane which
he did. However, they have
come down in their slippers
and when they were allowed
to return to the plane none of
the defendant's personnel who
had brought down the
overcoats, shoes and
handcarried items of my wife
and daughter ever offered to
bring back the items to the
plane, until I demanded that
one of the defendants should
 help my wife and daughter
which he did. And then one
man told me, because you
refused to open your bag, "we
shall hold you here in Wake
Island." then I asked, are we
under arrest? and the man
answered, no. And further
stated, your wife and daughter
can continue their flight but
you will not go to this flight an
we will charge you $13.30 a
day. Then I said, who are you
to tell all these things, and he
answered, I am the manager. I
said, put it in writing, then left
and in few minutes he came
back and handed me this letter
(witness referring to Exhibit
D)." .
— t.s.n., August 1, 1966, pp. 15-21
Anyone in Zulueta's position would have
reached the same way if he had had a sense of
dignity. Evidently, angered by Zulueta's reaction,
irked by the delay he had caused them,
defendant's employees decided to teach him a
lesson by forcing him to open his bags when
there was no justifiable reason to do so:
(a) Defendant did not make any attempt to
inquire from any passenger or even the crew
who knew Mr. Zulueta what his character and
reputation are, before demanding that he open
the bags; if it had done so, Miss Schmitz, the
purser, and Col. Villamor would have vouched
for plaintiffs; for Miss Schmitz believed she had
flown before with the Zulueta's and they had
been very nice people.
(b) Worse, defendant's manager Sitton admits
that Zulueta had told him who he was and his
social position in Manila; still he insisted that the
bags be opened. Moreover, some passengers
had informed the supervisor that Zulueta was
"the impresario"; but they persisted in their
demands.
(c) Defendant never identified the alleged State
Department men who reportedly approached the
Captain and expressed fear about a bomb, nor
did they confront him — if he existed with Mr.
Zulueta despite Mr. Zulueta's request.
(d) Defendant did not take any steps to put the
luggage off-loaded far from its passengers and
plane, a strange procedure if it really believed
the luggage contained a bomb;
(e) Defendant continued with the flight knowing
one bag -- Zulueta's bag himself — had not been
located and without verifying from Honolulu if the
bag had been found there, nor even advising
Honolulu that a bag possibly containing a bomb
had been left there, again an inexplicable
procedure if they sincerely believed that Zulueta
had planted a bomb;
Transpoeh 16
(f) Defendant's manager himself took Zulueta
and his off-loaded bags, in his own car, from the
terminal building to the hotel, which is also
inconsistent with a serious belief that the
luggages contained a bomb;
(g) Defendant knew that while Zulueta's bags
were on the ground, he had opened one of them
with the permission and in the presence of the
U. S. Marshall in order to enable his daughter to
get a dress from the bag; nothing suspicious
was seen; still, defendant insisted on refusing to
allow Zulueta to continue unless he opened and
allowed inspection of the bags by them; .
(h) Defendant completely changed his tone and
behavior towards the Zulueta's after the plane
had arrived at Manila and the Captain learned
that its Manila manager, Mr. Oppenheimer, was
a friend of Zulueta;
(i) Meantime, the attitude of Pan American
towards the Zulueta's caused other passengers
to resent Zulueta (See reports of Stewardesses
and of Captain Zentner, Exhs. 7, 8, 9 and 10).
"Many passengers were angry towards the
`missing passenger," says Miss Schmitz's report.
"A few inquisitive PA (passengers) — one
woman quite rudely stared once we were
airborne and left Mr. Zulueta behind ... anyway I
told the woman to sit down — so did Helga — so
did the man near her," say Miss Schmitz's
personal notes. This confirms the testimony of
plain plaintiffs that, all the while the search and
discussions were going on, they were the
subject of stares, remarks and whisper
comments from the passengers and other
persons around the plane.
(j) Defendant did not allow plaintiff Zulueta to
board the plane at all, even though it was aware
that some of his personal belongings, such as
his overcoat were on the plane. Plaintiffs so
testified; and though defendant's witness Mr.
Sitton denied it, claiming that plaintiff was always
free to board the plane, this denial is belied by
the report of defendant's own witness, U.S.
Marshall Ho, who said that:
"Ten minutes later, Mr. Zulueta asked if he could
talk to his wife who was aboard the aircraft. I
then accompanied him and as we got to the
ramp, we met Mr. Sitton who stated he would
summon Mrs. Zulueta from the aircraft. Mr.
Sitton summoned Mrs. Zulueta and she met her
husband at the foot of the ramp. Mr. Zulueta
then asked his wife and himself to which I
replied I was not concerned what he had to say."
— Exh. 2-B
(k) Finally, to add further humiliation and heap
indignity on plaintiffs, when Mrs. Zulueta arrived
at Manila and appealed to defendant's Manila
manager, Mr. Oppenheimer, to see to it that her
husband got back as soon as possible and was
made as comfortable as possible, at defendant's
expense, Mr. Oppenheimer refused to
 acknowledge any obligation to transport Mr.
Zulueta back to Manila and forcing Mrs. Zulueta
to send her husband $100.00 for pocket money
and pay for his fare from Wake to Manila, thru
Honolulu and Tokyo.
Upon a review of the record, We are satisfied that the foregoing
findings of His Honor, the Trial Judge, are supported by a
preponderance of the evidence.
The last two (2) assignments of error are mere consequences of
those already disposed of, and, hence, need no extended
discussion.
It is urged, however, that plaintiff is, at most, entitled to actual
damages only, because he was the first to commit a breach of
contract, for having gone over 200 yards away from the terminal,
where he could not expect to be paged. But, PANAM has not
pointed out what part of the contract has been violated thereby,
apart from the fact that the award for damages made in the
decision appealed from was due, not to PANAM's failure to so
page the plaintiff, but to the former's deliberate act of leaving him
at Wake Island, and the embarrassment and humiliation caused to
him and his family in the presence of many other persons. Then,
also, considering the flat nature of the terrain in Wake Island, and
the absence of buildings and structures, other than the terminal
and a modest "hotel," as well as plaintiff's need of relieving himself,
he had to find a place beyond the view of the people and near
enough the sea to wash himself up before going back to the plane.
It is next argued that plaintiff was, also, guilty of contributory
negligence for failure to reboard the plane within the 30 minutes
announced before the passengers debarked therefrom. This might
have justified a reduction of the damages, had plaintiff
been unwittingly left by the plane, owing to the negligence of
PANAM personnel, or even, perhaps, wittingly, if he could not be
found before the plane's departure. It does not, and cannot have
such justification in the case at bar, plaintiff having shown up
before the plane had taken off, and he having been off-
loaded intentionally and with malice aforethought, for his
"belligerent" attitude, according to Captain Zentner; for having
dared — despite his being one of "three monkeys," — the term
used by Captain Zentner to refer to the Zulueta family — to answer
him back — when he (Captain Zentner)5 said: "what in the hell do
you think you are ?" — in a way he had "not been spoken to" in his
"whole adult life," in the presence of the passengers and other
PANAM employees; for having responded to a command of either
Zentner or Sitton to open his (plaintiff's) bags, with a categorical
refusal and a challenge for Zentner or Sitton to open the bags
without a search warrant therefor, thereby making manifest the
lack of authority of the aforementioned representative of PANAM
to issue said command and exposing him to ridicule before said
passengers and employees. Besides, PANAM's own witness and
employee, Wayne Pendleton, testified the plane could not take off
at 4:30, as scheduled, because "we were still waiting for two (2)
local passengers."
Article 2201 of our Civil Code reads:
In contracts and quasi-contracts, the damages
for which the obligor who acted in good faith is
liable shall be those that are the natural and
probable consequences of the breach of the
obligation, and which the parties have foreseen
or could reasonably foreseen at the time the
obligation was constituted.
Transpoeh 17
In case of fraud, bad faith, malice or wanton
attitude, the obligor shall be responsible for all
damages which may be reasonably attributed to
the non-performance of the obligation.
This responsibility applies to common carriers. Pursuant to Article
1759 of the same Code:
ART. 1759. Common carriers are liable for the
death or injuries to passengers through the
negligence or wilful acts of the former's
employees, although such employees may have
acted beyond the scope of their authority or in
violation of the orders of the common carriers.
This liability of the common carriers does not
cease proof that they exercised all the diligence
of a good father of a family in the selection and
supervision of their employees.
Referring now to the specific amounts to damages due to plaintiffs
herein, We note that the sum of P5,502.85 awarded to them as
actual damages is not seriously disputed by PANAM.
As regards the moral and exemplary damages claimed by the
plaintiffs, our Civil Code provides:
ART. 21. Any person who wilfully causes loss or
injury to another in a manner that is contrary to
morals, good customs or public policy shall
compensate the latter for the damage.
ART. 2217. Moral damages include physical
suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral
shock, social humiliation, and similar injury.
Though incapable of pecuniary computation,
moral damages may be recovered if they are the
proximate result of defendant's wrongful act or
omission.
ART. 2229. Exemplary or corrective damages
are imposed, by way of example or correction for
the public good, in addition to the moral,
temperate liquidated or compensatory damages.
ART. 2232. In contracts and quasi-contracts, the
court may award exemplary damages if the
defendant acted in a wanton, fraudulent,
reckless, oppressive, or malevolent manner.
The records amply establish plaintiffs' right to recover both moral
and exemplary damages. Indeed, the rude and rough reception
plaintiff received at the hands of Sitton or Captain Zentner when
the latter met him at the ramp ("what in the hell do you think you
are? Get on that plane"); the menacing attitude of Zentner or Sitton
and the supercilious manner in which he had asked plaintiff to
open his bags ("open your bag," and when told that a fourth bag
was missing, "I don't give a damn"); the abusive language and
highly scornful reference to plaintiffs as monkeys by one of
PANAM's employees (who turning to Mrs. Zulueta and Miss
Zulueta remarked, "will you pull these three monkeys out of
here?"); the unfriendly attitude, the ugly stares and unkind remarks
to which plaintiffs were subjected, and their being cordoned by
men in uniform as if they were criminals, while plaintiff was arguing
with Sitton; the airline officials' refusal to allow plaintiff to board the
plane on the pretext that he was hiding a bomb in his luggage and
their arbitrary and high-handed decision to leave him in Wake;
Mrs. Zulueta's having suffered a nervous breakdown for which she
was hospitalized as a result of the embarrassment, insults and
humiliations to which plaintiffs were exposed by the conduct of
PANAM's employees; Miss Zulueta's having suffered shame,
humiliation and embarrassment for the treatment received by her
parents at the airport6 — all these justify an award for moral
damages resulting from mental anguish, serious anxiety, wounded
feelings, moral shock, and social humiliation thereby suffered by
plaintiffs.
The relation between carrier and passenger
involves special and peculiar obligations and
duties, differing in kind and degree, from those
of almost every other legal or contractual
relation. On account of the peculiar situation of
the parties the law implies a promise and
imposes upon the carrier the corresponding duty
of protection and courteous treatment.
Therefore, the carrier is under the absolute duty
of protecting his passengers from assault or
insult by himself or his servants. 7
A contract to transport passengers is quite
different in kind and degree from any other
contractual relation. And this, because of the
relation which an air-carrier sustains with the
public. Its business is mainly with the travelling
public. It invites people to avail of the comforts
and advantages it offers. The contract of air
carriage, therefore, generates a relation tended
with a public duty. Neglect or malfeasance of the
carrier's employees naturally could give ground
for an action for damages.
Passengers do not contract merely for
transportation. They have a right to be treated by
the carrier's employees with kindness, respect,
courtesy and due consideration. They are titled
to be protected against personal misconduct,
injurious language, indignities and abuses from
such employees. So it is, that any rude or
discourteous conduct on the part of employees
towards a passenger gives the latter an action
for damages against the carrier. 8
A carrier of passengers is as much bound to
protect them from humiliation and insult as from
physical injury .. It is held in nearly all
jurisdictions, if not universally, that a carrier is
liable to a passenger for humiliation and mental
suffering caused by abusive or insulting
language directed at such passenger by an
employee of the carrier. 9
Where a conductor uses language to a
passenger which is calculated to insult,
humiliate, or wound the feelings of a person of
ordinary feelings and sensibilities, the carrier is
liable, because the contract of carriage impliedly
stipulates for decent, courteous, and respectful
treatment, at hands of the carrier's employees.10
The general rule that a carrier owes to a
passenger highest degree of care has been held
to include the duty to protect the passenger from
abusive language by the carrier's agents, or by
others if under such circumstances that the
Transpoeh 18
carrier's agents should have known about it and
prevented it. Some of the courts have mentioned
the implied duty of the carrier, arising out of the
contract of carriage, not to insult the passenger,
or permit him to be insulted, and even where no
mention is made of this basis for liability, it is
apparent that it is the ground upon which
recovery is allowed. 11
The question is whether the award of P1,000,000 as moral
damages was proper and justified by the circumstances. It has
been held that the discretion in fixing moral damages lies in the
trial court. 12 Among the factors courts take into account in
assessing moral damages are the professional, social, political and
financial standing of the offended parties on one hand, and the
business and financial position of the offender on the other. 13
In comparatively recent cases in this jurisdiction, also involving
breach of contract of air carriage, this Court awarded the amount
of P25,000, where plaintiff, a first-class passenger in an Air France
plane from Manila to Rome was, in Bangkok, forced by the
manager of the airline company to leave his first class
accommodation after he was already seated because there was a
white man who, the manager alleged, had a "better right" to the
seat 14 ;the amount of P200,000, where plaintiffs, upon
confirmation of their reservation in defendant airline's flight from
Tokyo to San Francisco were issued first class tickets, but upon
arrival in Tokyo were informed that there was no accommodation
for them in the first class compartment and told they could not go
unless they took the tourist class 15 — in both of which cases the
Court found the airline companies to have acted in bad faith, or in
a wanton, reckless and oppressive manner, justifying likewise the
award of exemplary damages.
None of the passengers involved in said cases was, however, off-
loaded, much less in a place as barren and isolated as Wake
Island, with the prospect of being stranded there for a week. The
aforementioned passengers were merely constrained to take a
tourist or third class accommodation in lieu of the first class
passage they were entitled to. Then, also, in none of said cases
had the agents of the carrier acted with the degree of malice or
bad faith of those of PANAM in the case at bar, or caused to the
offended passengers a mental suffering arising from injuries to
feelings, fright and shock due to abusive, rude and insulting
language used by the carrier's employees in the presence and
within the hearing of others, comparable to that caused by
PANAM's employees to plaintiffs herein
To some extent, however, plaintiff had contributed to the gravity of
the situation because of the extreme belligerence with which he
had reacted on the occasion. We do not over-look the fact that he
justly believed he should uphold and defend his dignity and that of
the people of this country that the discomfort, the difficulties, and,
perhaps, the ordeal through which he had gone to relieve himself
— which were unknown to PANAM's agents — were such as to
put him in no mood to be understanding of the shortcoming of
others; and that said PANAM agents should have first inquired,
with an open mind, about the cause of his delay instead of
assuming that he was at fault and of taking an arrogant and
overbearing attitude, as if they were dealing with an inferior. Just
the same, there is every reason to believe that, in all probability,
things would not have turned out as bad as they became had he
not allowed himself, in a way, to be dragged to the level or plane
on which PANAM's personnel had placed themselves.
In view of this circumstance, We feel that the moral and exemplary
damages collectible by the plaintiffs should be reduced to one-half
of the amounts awarded by the lower court, that is, to P500,000 for
moral damages, and P200,000 for exemplary damages, aside from
the attorney's fees which should, likewise, be reduced to P75,000.

On April 22, 1971, Mrs. Zulueta filed a motion alleging that she
had, for more than two (2) years, been actually living separately
from her husband, plaintiff Rafael Zulueta, and that she had
decided to settle separately with PANAM and had reached a full
and complete settlement of all her differences with said defendant,
and praying accordingly, that this case be dismissed insofar as she
is concerned, Required to comment on said motion, PANAM
expressed no objection thereto.

Upon the other hand, plaintiff prayed that the motion be denied,
upon the ground that the case at bar is one for damages for
breach of a contract of carriage, owing to the off-loading of plaintiff
Rafael Zulueta, the husband and administrator of the conjugal
partnership, with the funds of which the PANAM had been paid
under said contract; that the action was filed by the plaintiffs as a
family and the lower court had awarded damages to them as such
family; that, although PANAM had questioned the award of
damages, it had not raised the question whether the lower court
should have specified what portion of the award should go to each
plaintiff; that although Mr. and Mrs. Zulueta had, for sometime,
been living separately, this has been without judicial approval; that
Mrs. Zulueta may not, therefore, bind the conjugal partnership or
settle this case separately; and that the sum given by PANAM to
Mrs. Zulueta is believed to be P50,000, which is less than 3-1/2%
of the award appealed from, thereby indicating the advisability of
denying her motion to dismiss, for her own protection.

Pursuant to a resolution, dated June 10, 1971, deferring action on

said motion to dismiss until the case is considered on the merits.
We now hold that the motion should be, as it is hereby denied.
Indeed, "(t)he wife cannot bind the conjugal partnership without the
husband's consent, except in cases provided by law," 16 and it has
not been shown that this is one of the cases so provided. Article
113 of our Civil Code, pursuant to which "(t)he husband must be
joined in all suits by or against the wife, except: ... (2) If they have
in fact been separated for at least one year ..." — relied upon by
PANAM — does not warrant the conclusion drawn therefrom by
the latter. Obviously the suit contemplated in subdivision (2) of said
Article 113 is one in which the wife is the real party — either
plaintiff or defendant — in interest, and, in which, without being so,
the hush must be joined as a party, by reason only of his relation
of affinity with her. Said provision cannot possibly apply to a case,
like the one at bar, in which the husband is the main party in
interest, both as the person principally grieved and as
administrator of the conjugal partnership. Moreover, he having
acted in this capacity in entering into the contract of carriage with
PANAM and paid the amount due to the latter, under the contract,
with funds of conjugal partnership, the damages recoverable for
breach of such contract belongs to said partnership.

Modified, as above stated, in the sense that plaintiffs shall recover

from defendant, Pan American World Airways, Inc., the sums of
P500,000 as moral damages, P200,000 as exemplary damages,
and P75,000 as attorney's fees, apart from P5,502.85 as actual
damages, and without prejudice to deducting the aforementioned
sum of P50,000 already paid Mrs. Zulueta, the decision appealed
from is hereby affirmed in all other respects, with the costs against
said defendant.

Transpoeh 19
 Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-22415 March 30, 1966
FERNANDO LOPEZ, ET AL., plaintiffs-appellants,
vs.
PAN AMERICAN WORLD AIRWAYS, defendant-appellant.
Ross, Selph and Carrascoso for the defendant-appellant.
Vicente J. Francisco for the plaintiffs-appellants.
BENGZON, J.P., J.:
Plaintiffs and defendant appeal from a decision of the Court of First
Instance of Rizal. Since the value in controversy exceeds
P200,000 the appeals were taken directly to this Court upon all
questions involved (Sec. 17, par. 3[5], Judiciary Act).
Stated briefly the facts not in dispute are as follows: Reservations
for first class accommodations in Flight No. 2 of Pan American
World Airways — hereinafter otherwise called PAN-AM — from
Tokyo to San Francisco on May 24, 1960 were made with
PAN-AM on March 29, 1960, by "Your Travel Guide" agency,
specifically, by Delfin Faustino, for then Senator Fernando Lopez,
his wife Maria J. Lopez, his son-in-law Alfredo Montelibano, Jr.,
and his daughter, Mrs. Alfredo Montelibano, Jr., (Milagros Lopez
Montelibano). PAN-AM's San Francisco head office confirmed the
reservations on March 31, 1960.
First class tickets for the abovementioned flight were subsequently
issued by
PAN-AM on May 21 and 23, 1960, in favor of Senator Lopez and
his party. The total fare of P9,444 for all of them was fully paid
before the tickets were issued.
As scheduled Senator Lopez and party left Manila by Northwest
Airlines on May 24, 1960, arriving in Tokyo at 5:30 P.M. of that
day. As soon as they arrived Senator Lopez requested Minister
Busuego of the Philippine Embassy to contact PAN-AM's Tokyo
office regarding their first class accommodations for that evening's
flight. For the given reason that the first class seats therein were all
booked up, however, PAN-AM's Tokyo office informed Minister
Busuego that PAN-AM could not accommodate Senator Lopez
and party in that trip as first class passengers. Senator Lopez
thereupon gave their first class tickets to Minister Busuego for him
to show the same to PAN-AM's Tokyo office, but the latter firmly
reiterated that there was no accommodation for them in the first
class, stating that they could not go in that flight unless they took
the tourist class therein.
Due to pressing engagements awaiting Senator Lopez and his
wife, in the United States — he had to attend a business
conference in San Francisco the next day and she had to undergo
a medical check-up in Mayo Clinic, Rochester, Minnesota, on May
28, 1960 and needed three days rest before that in San Francisco
— Senator Lopez and party were constrained to take PAN-AM's
flight from Tokyo to San Francisco as tourist passengers. Senator
Lopez however made it clear, as indicated in his letter to PAN-
AM's Tokyo office on that date (Exh. A), that they did so "under
protest" and without prejudice to further action against the
airline.1äwphï1.ñët
Transpoeh 20
Suit for damages was thereafter filed by Senator Lopez and party
against PAN-AM on June 2, 1960 in the Court of First Instance of
Rizal. Alleging breach of contracts in bad faith by defendant,
plaintiffs asked for P500,000 actual and moral damages, P100,000
exemplary damages, P25,000 attorney's fees plus costs. PAN-AM
filed its answer on June 22, 1960, asserting that its failure to
provide first class accommodations to plaintiffs was due to honest
error of its employees. It also interposed a counterclaim for
attorney's fees of P25,000.
Subsequently, further pleadings were filed, thus: plaintiffs' answer
to the counterclaim, on July 25, 1960; plaintiffs' reply attached to
motion for its admittance, on December 2, 1961; defendant's
supplemental answer, on March 8, 1962; plaintiffs' reply to
supplemental answer, on March 10, 1962; and defendant's
amended supplemental answer, on July 10, 1962.
After trial — which took twenty-two (22) days ranging from
November 25, 1960 to January 5, 1963 — the Court of First
Instance rendered its decision on November 13, 1963, the
dispositive portion stating:
In view of the foregoing considerations, judgment is
hereby rendered in favor of the plaintiffs and against the
defendant, which is accordingly ordered to pay the
plaintiffs the following: (a) P100,000.00 as moral
damages; (b) P20,000.00 as exemplary damages; (c)
P25,000.00 as attorney's fees, and the costs of this
action.
So ordered.
Plaintiffs, however, on November 21, 1963, moved for
reconsideration of said judgment, asking that moral damages be
increased to P400,000 and that six per cent (6%) interest per
annum on the amount of the award be granted. And defendant
opposed the same. Acting thereon the trial court issued an order
on December 14, 1963, reconsidering the dispositive part of its
decision to read as follows:
In view of the foregoing considerations, judgment is
hereby rendered in favor of the plaintiffs and against the
defendant, which is accordingly ordered to pay the
plaintiffs the following: (a) P150,000.00 as moral
damages; (b) P25,000.00 as exemplary damages; with
legal interest on both from the date of the filing of the
complaint until paid; and (c) P25,000.00 as attorney's
fees; and the costs of this action.
So ordered.
It is from said judgment, as thus reconsidered, that both parties
have appealed.
Defendant, as stated, has from the start admitted that it breached
its contracts with plaintiffs to provide them with first class
accommodations in its Tokyo-San Francisco flight of May 24,
1960. In its appeal, however, it takes issue with the finding of the
court a quo that it acted in bad faith in the branch of said contracts.
Plaintiffs, on the other hand, raise questions on the amount of
damages awarded in their favor, seeking that the same be
increased to a total of P650,000.
Anent the issue of bad faith the records show the respective
contentions of the parties as follows.
According to plaintiffs, defendant acted in bad faith because it
deliberately refused to comply with its contract to provide first class
accommodations to plaintiffs, out of racial prejudice against
Orientals. And in support of its contention that what was done to
plaintiffs is an oftrepeated practice of defendant, evidence was
adduced relating to two previous instances of alleged racial
discrimination by defendant against Filipinos in favor of "white"
passengers. Said previous occasions are what allegedly happened
to (1) Benito Jalbuena and (2) Cenon S. Cervantes and his wife.
And from plaintiffs' evidence this is what allegedly happened;
Jalbuena bought a first class ticket from PAN-AM on April 13,
1960; he confirmed it on April 15, 1960 as to the Tokyo-Hongkong
flight of April 20, 1960; PAN-AM similarly confirmed it on April 20,
1960. At the airport he and another Oriental — Mr. Tung — were
asked to step aside while other passengers - including "white"
passengers — boarded PAN-AM's plane. Then PAN-AM officials
told them that one of them had to stay behind. Since Mr. Tung was
going all the way to London, Jalbuena was chosen to be left
behind. PAN-AM's officials could only explain by saying there was
"some mistake". Jalbuena thereafter wrote PAN-AM to protest the
incident (Exh. B).
As to Cenon S. Cervantes it would appear that in Flight No. 6 of
PAN-AM on September 29, 1958 from Bangkok to Hongkong, he
and his wife had to take tourist class, although they had first class
tickets, which they had previously confirmed, because their seats
in first class were given to "passengers from London."
Against the foregoing, however, defendant's evidence would seek
to establish its theory of honest mistake, thus:
The first class reservations of Senator Lopez and party were made
on March 29, 1960 together with those of four members of the
Rufino family, for a total of eight (8) seats, as shown in their joint
reservation card (Exh. 1). Subsequently on March 30, 1960, two
other Rufinos secured reservations and were given a separate
reservation card (Exh. 2). A new reservation card consisting of two
pages (Exhs. 3 and 4) was then made for the original of eight
passengers, namely, Senator Lopez and party and four members
of the Rufino family, the first page (Exh. 3) referring to 2 Lopezes,
2 Montelibanos and 1 Rufino and the second page (Exh. 4)
referring to 3 Rufinos. On April 18, 1960 "Your Travel Guide"
agency cancelled the reservations of the Rufinos. A telex message
was thereupon sent on that date to PAN-AM's head office at San
Francisco by Mariano Herranz, PAN-AM's reservations employee
at its office in Escolta, Manila. (Annex A-Acker's to Exh. 6.) In said
message, however, Herranz mistakenly cancelled all the seats that
had been reserved, that is, including those of Senator Lopez and
party.
The next day — April 1960 — Herranz discovered his mistake,
upon seeing the reservation card newly prepared by his co-
employee Pedro Asensi for Sen. Lopez and party to the exclusion
of the Rufinos (Exh. 5). It was then that Herranz sent another telex
wire to the San Francisco head office, stating his error and asking
for the reinstatement of the four (4) first class seats reserved for
Senator Lopez and party (Annex A-Velasco's to Exh. 6). San
Francisco head office replied on April 22, 1960 that Senator Lopez
and party are waitlisted and that said office is unable to reinstate
them (Annex B-Velasco's to Exh. 6).
Since the flight involved was still more than a month away and
confident that reinstatement would be made, Herranz forgot the
matter and told no one about it except his co-employee, either
Armando Davila or Pedro Asensi or both of them (Tsn., 123-124,
127, Nov. 17, 1961).
Transpoeh 21
Subsequently, on April 27, 1960, Armando Davila, PAN-AM's
reservations employee working in the same Escolta office as
Herranz, phoned PAN-AM's ticket sellers at its other office in the
Manila Hotel, and confirmed the reservations of Senator Lopez
and party.
PAN-AM's reservations supervisor Alberto Jose, discovered
Herranz's mistake after "Your Travel Guide" phone on May 18,
1960 to state that Senator Lopez and party were going to depart
as scheduled. Accordingly, Jose sent a telex wire on that date to
PAN-AM's head office at San Francisco to report the error and
asked said office to continue holding the reservations of Senator
Lopez and party (Annex B-Acker's to Exh. 6). Said message was
reiterated by Jose in his telex wire of May 19, 1960 (Annex C-
Acker's to Exh. 6). San Francisco head office replied on May 19,
1960 that it regrets being unable to confirm Senator Lopez and
party for the reason that the flight was solidly booked (Exh. 7).
Jose sent a third telex wire on May 20, 1960 addressed to PAN-
AM's offices at San Francisco, New York (Idlewild Airport), Tokyo
and Hongkong, asking all-out assistance towards restoring the
cancelled spaces and for report of cancellations at their end
(Annex D-Acker's to Exh. 6). San Francisco head office reiterated
on May 20, 1960 that it could not reinstate the spaces and referred
Jose to the Tokyo and Hongkong offices (Exh. 8). Also on May 20,
the Tokyo office of PAN-AM wired Jose stating it will do everything
possible (Exh. 9).
Expecting that some cancellations of bookings would be made
before the flight time, Jose decided to withhold from Senator Lopez
and party, or their agent, the information that their reservations had
been cancelled.
Armando Davila having previously confirmed Senator Lopez and
party's first class reservations to PAN-AM's ticket sellers at its
Manila Hotel office, the latter sold and issued in their favor the
corresponding first class tickets on the 21st and 23rd of May,
1960.
From the foregoing evidence of defendant it is in effect admitted
that defendant — through its agents — first cancelled plaintiffs,
reservations by mistake and thereafter deliberately and
intentionally withheld from plaintiffs or their travel agent the fact of
said cancellation, letting them go on believing that their first class
reservations stood valid and confirmed. In so misleading plaintiffs
into purchasing first class tickets in the conviction that they had
confirmed reservations for the same, when in fact they had none,
defendant wilfully and knowingly placed itself into the position of
having to breach its a foresaid contracts with plaintiffs should there
be no last-minute cancellation by other passengers before flight
time, as it turned out in this case. Such actuation of defendant may
indeed have been prompted by nothing more than the promotion of
its self-interest in holding on to Senator Lopez and party as
passengers in its flight and foreclosing on their chances to seek
the services of other airlines that may have been able to afford
them first class accommodations. All the time, in legal
contemplation such conduct already amounts to action in bad faith.
For bad faith means a breach of a known duty through some
motive of interest or ill-will (Spiegel vs. Beacon Participations, 8
NE 2d 895, 907). As stated in Kamm v. Flink, 113 N.J.L. 582, 175
A. 62, 99 A.L.R. 1, 7: "Self-enrichment or fraternal interest, and not
personal ill-will, may well have been the motive; but it is malice
nevertheless."
As of May 18, 1960 defendant's reservations supervisor, Alberto
Jose knew that plaintiffs' reservations had been cancelled. As of
May 20 he knew that the San Francisco head office stated with
finality that it could not reinstate plaintiffs' cancelled reservations.
And yet said reservations supervisor made the "decision" — to use
his own, word — to withhold the information from the plaintiffs.
Said Alberto Jose in his testimony:
Q Why did you not notify them?
A Well, you see, sir, in my fifteen (15) years of service
with the air lines business my experience is that even if
the flights are solidly booked months in advance, usually
the flight departs with plenty of empty seats both on the
first class and tourist class. This is due to late cancellation
of passengers, or because passengers do not show up in
the airport, and it was our hope others come in from
another flight and, therefore, are delayed and, therefore,
missed their connections. This experience of mine,
coupled with that wire from Tokyo that they would do
everything possible prompted me to withhold the
information, but unfortunately, instead of the first class
seat that I was hoping for and which I anticipated only the
tourists class was open on which Senator and Mrs.
Lopez, Mr. and Mrs. Montelibano were accommodated.
Well, I fully realize now the gravity of my decision in not
advising Senator and Mrs. Lopez, Mr. and Mrs.
Montelibano nor their agents about the erroneous
cancellation and for which I would like them to know that I
am very sorry.
xxx xxx xxx
Q So it was not your duty to notify Sen. Lopez and parties
that their reservations had been cancelled since May 18,
1960?
A As I said before it was my duty. It was my duty but as I
said again with respect to that duty I have the power to
make a decision or use my discretion and judgment
whether I should go ahead and tell the passenger about
the cancellation. (Tsn., pp. 17-19, 28-29, March 15,
1962.)
At the time plaintiffs bought their tickets, defendant, therefore, in
breach of its known duty, made plaintiffs believe that their
reservation had not been cancelled. An additional indication of this
is the fact that upon the face of the two tickets of record, namely,
the ticket issued to Alfredo Montelibano, Jr. on May 21, 1960 (Exh.
22) and that issued to Mrs. Alfredo Montelibano, Jr., on May 23,
1960 (Exh. 23), the reservation status is stated as "OK". Such
willful-non-disclosure of the cancellation or pretense that the
reservations for plaintiffs stood — and not simply the erroneous
cancellation itself — is the factor to which is attributable the breach
of the resulting contracts. And, as above-stated, in this respect
defendant clearly acted in bad faith.
As if to further emphasize its bad faith on the matter, defendant
subsequently promoted the employee who cancelled plaintiffs'
reservations and told them nothing about it. The record shows that
said employee — Mariano Herranz — was not subjected to
investigation and suspension by defendant but instead was given a
reward in the form of an increase of salary in June of the following
year (Tsn., 86-88, Nov. 20, 1961).
At any rate, granting all the mistakes advanced by the defendant,
there would at least be negligence so gross and reckless as to
amount to malice or bad faith (Fores vs. Miranda, L-12163, March
4, 1959; Necesito v. Paras, L-10605-06, June 30, 1958). Firstly,
notwithstanding the entries in the reservation cards (Exhs. 1 & 3)
that the reservations cancelled are those of the Rufinos only,
Herranz made the mistake, after reading said entries, of sending a
wire cancelling all the reservations, including those of Senator
Transpoeh 22
Lopez and party (Tsn., pp. 108-109, Nov. 17, 1961). Secondly,
after sending a wire to San Francisco head office on April 19, 1960
stating his error and asking for reinstatement, Herranz simply
forgot about the matter. Notwithstanding the reply of San
Francisco head Office on April 22, 1960 that it cannot reinstate
Senator Lopez and party (Annex B-Velasco's to Exh. 6), it was
assumed and taken for granted that reinstatement would be made.
Thirdly, Armando Davila confirmed plaintiff's reservations in a
phone call on April 27, 1960 to defendant's ticket sellers, when at
the time it appeared in plaintiffs' reservation card (Exh. 5) that they
were only waitlisted passengers. Fourthly, defendant's ticket
sellers issued plaintiffs' tickets on May 21 and 23, 1960, without
first checking their reservations just before issuing said tickets.
And, finally, no one among defendant's agents notified Senator
Lopez and party that their reservations had been cancelled, a
precaution that could have averted their entering with defendant
into contracts that the latter had already placed beyond its power
to perform.
Accordingly, there being a clear admission in defendant's evidence
of facts amounting to a bad faith on its part in regard to the breach
of its contracts with plaintiffs, it becomes unnecessary to further
discuss the evidence adduced by plaintiffs to establish defendant's
bad faith. For what is admitted in the course of the trial does not
need to be proved (Sec. 2, Rule 129, Rules of Court).
Addressing ourselves now to the question of damages, it is well to
state at the outset those rules and principles. First, moral damages
are recoverable in breach of contracts where the defendant acted
fraudulently or in bad faith (Art. 2220, New Civil Code). Second, in
addition to moral damages, exemplary or corrective damages may
be imposed by way of example or correction for the public good, in
breach of contract where the defendant acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner (Articles
2229, 2232, New Civil Code). And, third, a written contract for an
attorney's services shall control the amount to be paid therefor
unless found by the court to be unconscionable or unreasonable
(Sec. 24, Rule 138, Rules of Court).
First, then, as to moral damages. As a proximate result of
defendant's breach in bad faith of its contracts with plaintiffs, the
latter suffered social humiliation, wounded feelings, serious anxiety
and mental anguish. For plaintiffs were travelling with first class
tickets issued by defendant and yet they were given only the
tourist class. At stop-overs, they were expected to be among the
first-class passengers by those awaiting to welcome them, only to
be found among the tourist passengers. It may not be humiliating
to travel as tourist passengers; it is humiliating to be compelled to
travel as such, contrary to what is rightfully to be expected from the
contractual undertaking.
Senator Lopez was then Senate President Pro Tempore.
International carriers like defendant know the prestige of such an
office. For the Senate is not only the Upper Chamber of the
Philippine Congress, but the nation's treaty-ratifying body. It may
also be mentioned that in his aforesaid office Senator Lopez was
in a position to preside in impeachment cases should the Senate
sit as Impeachment Tribunal. And he was former Vice-President of
the Philippines. Senator Lopez was going to the United States to
attend a private business conference of the Binalbagan-Isabela
Sugar Company; but his aforesaid rank and position were by no
means left behind, and in fact he had a second engagement
awaiting him in the United States: a banquet tendered by Filipino
friends in his honor as Senate President Pro Tempore (Tsn., pp.
14-15, Nov. 25, 1960). For the moral damages sustained by him,
therefore, an award of P100,000.00 is appropriate.
Mrs. Maria J. Lopez, as wife of Senator Lopez, shared his prestige
and therefore his humiliation. In addition she suffered physical
discomfort during the 13-hour trip,(5 hours from Tokyo to Honolulu
and 8 hours from Honolulu to San Francisco). Although Senator
Lopez stated that "she was quite well" (Tsn., p. 22, Nov. 25, 1960)
— he obviously meant relatively well, since the rest of his
statement is that two months before, she was attackedby severe
flu and lost 10 pounds of weight and that she was advised by Dr.
Sison to go to the United States as soon as possible for medical
check-up and relaxation, (Ibid). In fact, Senator Lopez stated, as
shown a few pages after in the transcript of his testimony, that Mrs.
Lopez was sick when she left the Philippines:
A. Well, my wife really felt very bad during the entire trip
from Tokyo to San Francisco. In the first place, she was
sick when we left the Philippines, and then with that
discomfort which she [experienced] or suffered during
that evening, it was her worst experience. I myself, who
was not sick, could not sleep because of the discomfort.
(Tsn., pp. 27-28, Nov. 25, 1960).
It is not hard to see that in her condition then a physical discomfort
sustained for thirteen hours may well be considered a physical
suffering. And even without regard to the noise and trepidation
inside the plane — which defendant contends, upon the strengh of
expert testimony, to be practically the same in first class and
tourist class — the fact that the seating spaces in the tourist class
are quite narrower than in first class, there beingsix seats to a row
in the former as against four to a row in the latter, and that in
tourist class there is very little space for reclining in view of the
closer distance between rows (Tsn., p. 24, Nov. 25, 1960), will
suffice to show that the aforesaid passenger indeed experienced
physical suffering during the trip. Added to this, of course, was the
painfull thought that she was deprived by defendant — after having
paid for and expected the same — of the most suitable, place for
her, the first class, where evidently the best of everything would
have been given her, the best seat, service, food and treatment.
Such difference in comfort between first class and tourist class is
too obvious to be recounted, is in fact the reason for the former's
existence, and is recognized by the airline in charging a higher fare
for it and by the passengers in paying said higher rate Accordingly,
considering the totality of her suffering and humiliation, an award
to Mrs. Maria J. Lopez of P50,000.00 for moral damages will be
reasonable.
Mr. and Mrs. Alfredo Montelibano, Jr., were travelling as
immediate members of the family of Senator Lopez. They formed
part of the Senator's party as shown also by the reservation cards
of PAN-AM. As such they likewise shared his prestige and
humiliation. Although defendant contends that a few weeks before
the flight they had asked their reservations to be charged from first
class to tourist class — which did not materialize due to alleged full
booking in the tourist class — the same does not mean they
suffered no shared in having to take tourist class during the flight.
For by that time they had already been made to pay for first class
seats and therefore to expect first class accommodations. As
stated, it is one thing to take the tourist class by free choice; a far
different thing to be compelled to take it notwithstanding having
paid for first class seats. Plaintiffs-appellants now ask P37,500.00
each for the two but we note that in their motion for reconsideration
filed in the court a quo, they were satisfied with P25,000.00 each
for said persons. (Record on Appeal, p. 102). For their social
humiliation, therefore, the award to them of P25,000.00 each is
reasonable.
The rationale behind exemplary or corrective damages is, as the
name implies, to provide an example or correction for public good.
Defendant having breached its contracts in bad faith, the court, as
stated earlier, may award exemplary damages in addition to moral
damages (Articles 2229, 2232, New Civil Code).
Transpoeh 23
In view of its nature, it should be imposed in such an amount as to
sufficiently and effectively deter similar breach of contracts in the
future by defendant or other airlines. In this light, we find it just to
award P75,000.00 as exemplary or corrective damages.
Now, as to attorney's fees, the record shows a written contract of
services executed on June 1, 1960 (Exh. F) whereunder plaintiffs-
appellants engaged the services of their counsel — Atty. Vicente J.
Francisco — and agreedto pay the sum of P25,000.00 as
attorney's fees upon the termination of the case in the Court of
First Instance, and an additional sum of P25,000.00 in the event
the case is appealed to the Supreme Court. As said earlier, a
written contract for attorney's services shall control the amount to
be paid therefor unless found by the court to be unconscionable or
unreasonable. A consideration of the subject matter of the present
controversy, of the professional standing of the attorney for
plaintiffs-appellants, and of the extent of the service rendered by
him, shows that said amount provided for in the written agreement
is reasonable. Said lawyer — whose prominence in the legal
profession is well known — studied the case, prepared and filed
the complaint, conferred with witnesses, analyzed documentary
evidence, personally appeared at the trial of the case in twenty-two
days, during a period of three years, prepared four sets of cross-
interrogatories for deposition taking, prepared several memoranda
and the motion for reconsideration, filed a joint record on appeal
with defendant, filed a brief for plaintiffs as appellants consisting of
45 printed pages and a brief for plaintiffs as appellees consisting of
265 printed pages. And we are further convinced of its
reasonableness because defendant's counsel likewise valued at
P50,000.00 the proper compensation for his services rendered to
defendant in the trial court and on appeal.
In concluding, let it be stressed that the amount of damages
awarded in this appeal has been determined by adequately
considering the official, political, social, and financial standing of
the offended parties on one hand, and the business and financial
position of the offender on the other (Domingding v. Ng, 55 O.G.
10). And further considering the present rate of exchange and the
terms at which the amount of damages awarded would
approximately be in U.S. dollars, this Court is all the more of the
view that said award is proper and reasonable.
Wherefore, the judgment appealed from is hereby modified so as
to award in favor of plaintiffs and against defendant, the following:
(1) P200,000.00 as moral damages, divided among plaintiffs, thus:
P100,000.00 for Senate President Pro Tempore Fernando Lopez;
P50,000.00 for his wife Maria J. Lopez; P25,000.00 for his son-in-
law Alfredo Montelibano, Jr.; and P25,000.00 for his daughter Mrs.
Alfredo Montelibano, Jr.; (2) P75,000.00 as exemplary or
corrective damages; (3) interest at the legal rate of 6% per annum
on the moral and exemplary damages aforestated, from December
14, 1963, the date of the amended decision of the court a quo,
until said damages are fully paid; (4) P50,000.00 as attorney's
fees; and (5) the costs. Counterclaim dismissed.So ordered.
 FIRST DIVISION
[G.R. No. 159636. November 25, 2004]
VICTORY LINER, INC., petitioner, vs. ROSALITO GAMMAD,
APRIL ROSSAN P. GAMMAD, ROI ROZANO P.
GAMMAD and DIANA FRANCES P.
GAMMAD, respondents.
DECISION
YNARES-SANTIAGO, J.:
Assailed in this petition for review on certiorari is the April 11,
2003 decision[1] of the Court of Appeals in CA-G.R. CV No. 63290
which affirmed with modification the November 6, 1998 decision [2] of
the Regional Trial Court of Tuguegarao, Cagayan, Branch 5 finding
petitioner Victory Liner, Inc. liable for breach of contract of carriage
in Civil Case No. 5023.
The facts as testified by respondent Rosalito Gammad show
that on March 14, 1996, his wife Marie Grace Pagulayan-
Gammad,[3] was on board an air-conditioned Victory Liner bus
bound for Tuguegarao, Cagayan from Manila. At about 3:00 a.m.,
the bus while running at a high speed fell on a ravine somewhere in
Barangay Baliling, Sta. Fe, Nueva Vizcaya, which resulted in the
death of Marie Grace and physical injuries to other passengers.[4]
On May 14, 1996, respondent heirs of the deceased filed a
complaint[5] for damages arising from culpa contractual against
petitioner. In its answer,[6] the petitioner claimed that the incident
was purely accidental and that it has always exercised extraordinary
diligence in its 50 years of operation.
After several re-settings,[7] pre-trial was set on April 10,
1997.[8] For failure to appear on the said date, petitioner was
declared as in default.[9] However, on petitioners motion[10] to lift the
order of default, the same was granted by the trial court.[11]
At the pre-trial on May 6, 1997, petitioner did not want to admit
the proposed stipulation that the deceased was a passenger of the
Victory Liner Bus which fell on the ravine and that she was issued
Passenger Ticket No. 977785. Respondents, for their part, did not
accept petitioners proposal to pay P50,000.00.[12]
After respondent Rosalito Gammad completed his direct
testimony, cross-examination was scheduled for November 17,
1997[13] but moved to December 8, 1997,[14] because the parties
and the counsel failed to appear. On December 8, 1997, counsel of
petitioner was absent despite due notice and was deemed to have
waived right to cross-examine respondent Rosalito.[15]
Petitioners motion to reset the presentation of its evidence to
March 25, 1998[16] was granted. However, on March 24, 1998, the
counsel of petitioner sent the court a telegram [17] requesting
postponement but the telegram was received by the trial court on
March 25, 1998, after it had issued an order considering the case
submitted for decision for failure of petitioner and counsel to
appear.[18]
On November 6, 1998, the trial court rendered its decision in
favor of respondents, the dispositive portion of which reads:
WHEREFORE, premises considered and in the interest of justice,
judgment is hereby rendered in favor of the plaintiffs and against the
defendant Victory Liner, Incorporated, ordering the latter to pay the
following:
Transpoeh 24
1. Actual Damages -------------------- P 122,000.00
2. Death Indemnity --------------------- 50,000.00
3. Exemplary and Moral Damages----- 400,000.00
4. Compensatory Damages ---------- 1,500,000.00
5. Attorneys Fees ------------ 10% of the total amount granted
6. Cost of the Suit.
SO ORDERED.[19]
On appeal by petitioner, the Court of Appeals affirmed the
decision of the trial court with modification as follows:
[T]he Decision dated 06 November 1998 is hereby MODIFIED to reflect
that the following are hereby adjudged in favor of plaintiffs-appellees:
1. Actual Damages in the amount of P88,270.00;
2. Compensatory Damages in the amount of P1,135,536,10;
3. Moral and Exemplary Damages in the amount of P400,000.00; and
4. Attorneys fees equivalent to 10% of the sum of the actual,
compensatory, moral, and exemplary damages herein
adjudged.
The court a quos judgment of the cost of the suit against defendant-
appellant is hereby AFFIRMED.
SO ORDERED.[20]
Represented by a new counsel, petitioner on May 21, 2003
filed a motion for reconsideration praying that the case be remanded
to the trial court for cross- examination of respondents witness and
for the presentation of its evidence; or in the alternative, dismiss the
respondents complaint.[21] Invoking APEX Mining, Inc. v. Court of
Appeals,[22] petitioner argues, inter alia, that the decision of the trial
court should be set aside because the negligence of its former
counsel, Atty. Antonio B. Paguirigan, in failing to appear at the
scheduled hearings and move for reconsideration of the orders
declaring petitioner to have waived the right to cross-examine
respondents witness and right to present evidence, deprived
petitioner of its day in court.
On August 21, 2003, the Court of Appeals denied petitioners
motion for reconsideration.[23]
Hence, this petition for review principally based on the fact that
the mistake or gross negligence of its counsel deprived petitioner of
due process of law. Petitioner also argues that the trial courts award
of damages were without basis and should be deleted.
The issues for resolution are: (1) whether petitioners counsel
was guilty of gross negligence; (2) whether petitioner should be held
liable for breach of contract of carriage; and (3) whether the award
of damages was proper.
It is settled that the negligence of counsel binds the client. This
is based on the rule that any act performed by a counsel within the
scope of his general or implied authority is regarded as an act of his
client. Consequently, the mistake or negligence of counsel may
result in the rendition of an unfavorable judgment against the client.
However, the application of the general rule to a given case should
be looked into and adopted according to the surrounding
circumstances obtaining. Thus, exceptions to the foregoing have
been recognized by the court in cases where reckless or gross
negligence of counsel deprives the client of due process of law, or
when its application will result in outright deprivation of the clients
liberty or property or where the interests of justice so require, and
accord relief to the client who suffered by reason of the lawyers
gross or palpable mistake or negligence.[24]
The exceptions, however, are not present in this case. The
record shows that Atty. Paguirigan filed an Answer and Pre-trial
Brief for petitioner. Although initially declared as in default, Atty.
Paguirigan successfully moved for the setting aside of the order of
default. In fact, petitioner was represented by Atty. Paguirigan at the
pre-trial who proposed settlement for P50,000.00. Although Atty.
Paguirigan failed to file motions for reconsideration of the orders
declaring petitioner to have waived the right to cross-examine
respondents witness and to present evidence, he nevertheless, filed
a timely appeal with the Court of Appeals assailing the decision of
the trial court. Hence, petitioners claim that it was denied due
process lacks basis.
Petitioner too is not entirely blameless. Prior to the issuance of
the order declaring it as in default for not appearing at the pre-trial,
three notices (dated October 23, 1996,[25] January 30, 1997,[26] and
March 26, 1997,[27]) requiring attendance at the pre-trial were sent
and duly received by petitioner. However, it was only on April 27,
1997, after the issuance of the April 10, 1997 order of default for
failure to appear at the pre-trial when petitioner, through its finance
and administrative manager, executed a special power of
attorney[28] authorizing Atty. Paguirigan or any member of his law
firm to represent petitioner at the pre-trial. Petitioner is guilty, at the
least, of contributory negligence and fault cannot be imputed solely
on previous counsel.
The case of APEX Mining, Inc., invoked by petitioner is not on
all fours with the case at bar. In APEX, the negligent counsel not
only allowed the adverse decision against his client to become final
and executory, but deliberately misrepresented in the progress
report that the case was still pending with the Court of Appeals when
the same was dismissed 16 months ago. [29] These circumstances
are absent in this case because Atty. Paguirigan timely filed an
appeal from the decision of the trial court with the Court of Appeals.
In Gold Line Transit, Inc. v. Ramos,[30] the Court was similarly
confronted with the issue of whether or not the client should bear
the adverse consequences of its counsels negligence. In that case,
Gold Line Transit, Inc. (Gold Line) and its lawyer failed to appear at
the pre-trial despite notice and was declared as in default. After the
plaintiffs presentation of evidence ex parte, the trial court rendered
decision ordering Gold Line to pay damages to the heirs of its
deceased passenger. The decision became final and executory
because counsel of Gold Line did not file any appeal. Finding that
Goldline was not denied due process of law and is thus bound by
the negligence of its lawyer, the Court held as follows
This leads us to the question of whether the negligence of counsel was so
gross and reckless that petitioner was deprived of its right to due process
of law. We do not believe so. It cannot be denied that the requirements of
due process were observed in the instant case. Petitioner was never
deprived of its day in court, as in fact it was afforded every opportunity to
be heard. Thus, it is of record that notices were sent to petitioner and that
its counsel was able to file a motion to dismiss the complaint, an answer
to the complaint, and even a pre-trial brief. What was irretrievably lost by
petitioner was its opportunity to participate in the trial of the case and to
adduce evidence in its behalf because of negligence.
In the application of the principle of due process, what is sought to be
safeguarded against is not the lack of previous notice but the denial of the
opportunity to be heard. The question is not whether petitioner succeeded
in defending its rights and interests, but simply, whether it had the
opportunity to present its side of the controversy. Verily, as petitioner
retained the services of counsel of its choice, it should, as far as this suit
is concerned, bear the consequences of its choice of a faulty option. Its
plea that it was deprived of due process echoes on hollow ground and
certainly cannot elicit approval nor sympathy.
Transpoeh 25
To cater to petitioners arguments and reinstate its petition for relief from
judgment would put a premium on the negligence of its former counsel
and encourage the non-termination of this case by reason thereof. This is
one case where petitioner has to bear the adverse consequences of its
counsels act, for a client is bound by the action of his counsel in the
conduct of a case and he cannot thereafter be heard to complain that the
result might have been different had his counsel proceeded differently.
The rationale for the rule is easily discernible. If the negligence of
counsel be admitted as a reason for opening cases, there would never be
an end to a suit so long as a new counsel could be hired every time it is
shown that the prior counsel had not been sufficiently diligent,
experienced or learned.[31]
Similarly, in Macalalag v. Ombudsman,[32] a Philippine Postal
Corporation employee charged with dishonesty was not able to file
an answer and position paper. He was found guilty solely on the
basis of complainants evidence and was dismissed with forfeiture of
all benefits and disqualification from government service.
Challenging the decision of the Ombudsman, the employee
contended that the gross negligence of his counsel deprived him of
due process of law. In debunking his contention, the Court said
Neither can he claim that he is not bound by his lawyers actions; it is only
in case of gross or palpable negligence of counsel when the courts can
step in and accord relief to a client who would have suffered thereby. If
every perceived mistake, failure of diligence, lack of experience or
insufficient legal knowledge of the lawyer would be admitted as a reason
for the reopening of a case, there would be no end to controversy.
Fundamental to our judicial system is the principle that every litigation
must come to an end. It would be a clear mockery if it were otherwise.
Access to the courts is guaranteed, but there must be a limit to it.
Viewed vis--vis the foregoing jurisprudence, to sustain
petitioners argument that it was denied due process of law due to
negligence of its counsel would set a dangerous precedent. It would
enable every party to render inutile any adverse order or decision
through the simple expedient of alleging gross negligence on the
part of its counsel. The Court will not countenance such a farce
which contradicts long-settled doctrines of trial and procedure.[33]
Anent the second issue, petitioner was correctly found liable
for breach of contract of carriage. A common carrier is bound to
carry its passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with
due regard to all the circumstances. In a contract of carriage, it is
presumed that the common carrier was at fault or was negligent
when a passenger dies or is injured. Unless the presumption is
rebutted, the court need not even make an express finding of
fault or negligence on the part of the common carrier. This
statutory presumption may only be overcome by evidence that the
carrier exercised extraordinary diligence.[34]
In the instant case, there is no evidence to rebut the statutory
presumption that the proximate cause of Marie Graces death was
the negligence of petitioner. Hence, the courts below correctly ruled
that petitioner was guilty of breach of contract of carriage.
Nevertheless, the award of damages should be modified.
Article 1764[35] in relation to Article 2206[36] of the Civil Code,
holds the common carrier in breach of its contract of carriage that
results in the death of a passenger liable to pay the following: (1)
indemnity for death, (2) indemnity for loss of earning capacity, and
(3) moral damages.
In the present case, respondent heirs of the deceased are
entitled to indemnity for the death of Marie Grace which under
current jurisprudence is fixed at P50,000.00.[37]
The award of compensatory damages for the loss of the
deceaseds earning capacity should be deleted for lack of basis. As
a rule, documentary evidence should be presented to substantiate
the claim for damages for loss of earning capacity. By way of
exception, damages for loss of earning capacity may be awarded
despite the absence of documentary evidence when (1) the
deceased is self-employed earning less than the minimum wage
under current labor laws, and judicial notice may be taken of the fact
that in the deceaseds line of work no documentary evidence is
available; or (2) the deceased is employed as a daily wage worker
earning less than the minimum wage under current labor laws. [38]
In People v. Oco,[39] the evidence presented by the
prosecution to recover damages for loss of earning capacity was the
bare testimony of the deceaseds wife that her husband was earning
P8,000.00 monthly as a legal researcher of a private corporation.
Finding that the deceased was neither self-employed nor employed
as a daily-wage worker earning less than the minimum wage under
the labor laws existing at the time of his death, the Court held that
testimonial evidence alone is insufficient to justify an award for loss
of earning capacity.
Likewise, in People v. Caraig,[40] damages for loss of earning
capacity was not awarded because the circumstances of the 3
deceased did not fall within the recognized exceptions, and except
for the testimony of their wives, no documentary proof about their
income was presented by the prosecution. Thus
The testimonial evidence shows that Placido Agustin, Roberto Raagas,
and Melencio Castro Jr. were not self-employed or employed as daily-
wage workers earning less than the minimum wage under the labor laws
existing at the time of their death. Placido Agustin was a Social
Security System employee who received a monthly salary of P5,000.
Roberto Raagas was the President of Sinclair Security and Allied
Services, a family owned corporation, with a monthly compensation
of P30,000. Melencio Castro Jr. was a taxi driver of New Rocalex
with an average daily earning of P500 or a monthly earning of
P7,500. Clearly, these cases do not fall under the exceptions where
indemnity for loss of earning capacity can be given despite lack of
documentary evidence. Therefore, for lack of documentary proof, no
indemnity for loss of earning capacity can be given in these cases.
(Emphasis supplied)
Here, the trial court and the Court of Appeals computed the
award of compensatory damages for loss of earning capacity only
on the basis of the testimony of respondent Rosalito that the
deceased was 39 years of age and a Section Chief of the Bureau of
Internal Revenue, Tuguergarao District Office with a salary of
P83,088.00 per annum when she died.[41] No other evidence was
presented. The award is clearly erroneous because the deceaseds
earnings does not fall within the exceptions.
However, the fact of loss having been established, temperate
damages in the amount of P500,000.00 should be awarded to
respondents. Under Article 2224 of the Civil Code, temperate or
moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds
that some pecuniary loss has been suffered but its amount can not,
from the nature of the case, be proved with certainty.
In Pleno v. Court of Appeals,[42] the Court sustained the trial
courts award of P200,000.00 as temperate damages in lieu of actual
damages for loss of earning capacity because the income of the
victim was not sufficiently proven, thus
The trial court based the amounts of damages awarded to the petitioner on
the following circumstances:
As to the loss or impairment of earning capacity, there is no doubt that
Pleno is an ent[re]preneur and the founder of his own corporation, the
Mayon Ceramics Corporation. It appears also that he is an industrious and
resourceful person with several projects in line, and were it not for the
Transpoeh 26
incident, might have pushed them through. On the day of the incident,
Pleno was driving homeward with geologist Longley after an ocular
inspection of the site of the Mayon Ceramics Corporation. His actual
income however has not been sufficiently established so that this Court
cannot award actual damages, but, an award of temperate or moderate
damages may still be made on loss or impairment of earning capacity.
That Pleno sustained a permanent deformity due to a shortened left leg
and that he also suffers from double vision in his left eye is also
established. Because of this, he suffers from some inferiority complex
and is no longer active in business as well as in social life. In similar
cases as in Borromeo v. Manila Electric Railroad Co., 44 Phil 165;
Coriage, et al. v. LTB Co., et al., L-11037, Dec. 29, 1960, and in Araneta,
et al. v. Arreglado, et al., L-11394, Sept. 9, 1958, the proper award of
damages were given.
We rule that the lower courts awards of damages are more consonant with
the factual circumstances of the instant case. The trial courts findings of
facts are clear and well-developed. Each item of damages is adequately
supported by evidence on record.
Article 2224 of the Civil Code was likewise applied in the recent
cases of People v. Singh[43] and People v. Almedilla,[44] to justify the
award of temperate damages in lieu of damages for loss of earning
capacity which was not substantiated by the required documentary
proof.
Anent the award of moral damages, the same cannot be
lumped with exemplary damages because they are based on
different jural foundations.[45] These damages are different in nature
and require separate determination.[46] In culpa contractual or
breach of contract, moral damages may be recovered when the
defendant acted in bad faith or was guilty of gross negligence
(amounting to bad faith) or in wanton disregard of contractual
obligations and, as in this case, when the act of breach of contract
itself constitutes the tort that results in physical injuries. By special
rule in Article 1764 in relation to Article 2206 of the Civil Code, moral
damages may also be awarded in case the death of a passenger
results from a breach of carriage.[47] On the other hand, exemplary
damages, which are awarded by way of example or correction for
the public good may be recovered in contractual obligations if the
defendant acted in wanton, fraudulent, reckless, oppressive, or
malevolent manner.[48]
Respondents in the instant case should be awarded moral
damages to compensate for the grief caused by the death of the
deceased resulting from the petitioners breach of contract of
carriage. Furthermore, the petitioner failed to prove that it exercised
the extraordinary diligence required for common carriers, it is
presumed to have acted recklessly.[49] Thus, the award of
exemplary damages is proper. Under the circumstances, we find it
reasonable to award respondents the amount of P100,000.00 as
moral damages and P100,000.00 as exemplary damages. These
amounts are not excessive.[50]
The actual damages awarded by the trial court reduced by the
Court of Appeals should be further reduced. In People v.
Duban,[51] it was held that only substantiated and proven expenses
or those that appear to have been genuinely incurred in connection
with the death, wake or burial of the victim will be recognized. A list
of expenses (Exhibit J),[52] and the contract/receipt for the
construction of the tomb (Exhibit F)[53] in this case, cannot be
considered competent proof and cannot replace the official receipts
necessary to justify the award. Hence, actual damages should be
further reduced to P78,160.00,[54] which was the amount supported
by official receipts.
Pursuant to Article 2208[55] of the Civil Code, attorneys fees
may also be recovered in the case at bar where exemplary damages
are awarded. The Court finds the award of attorneys fees equivalent
to 10% of the total amount adjudged against petitioner reasonable.
 Finally, in Eastern Shipping Lines, Inc. v. Court of
Appeals,[56] it was held that when an obligation, regardless of its
source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts
is breached, the contravenor can be held liable for payment of
interest in the concept of actual and compensatory damages,
subject to the following rules, to wit

1. When the obligation is breached, and it consists in the payment of a

sum of money, i.e., a loan or forbearance of money, the interest due
should be that which may have been stipulated in writing. Furthermore,
the interest due shall itself earn legal interest from the time it is judicially
demanded. In the absence of stipulation, the rate of interest shall be 12%
per annum to be computed from default, i.e., from judicial or extrajudicial
demand under and subject to the provisions of Article 1169 of the Civil
Code.

2. When an obligation, not constituting a loan or forbearance of money, is

breached, an interest on the amount of damages awarded may be imposed
at the discretion of the court at the rate of 6% per annum. No interest,
however, shall be adjudged on unliquidated claims or damages except
when or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty,
the interest shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code) but when such
certainty cannot be so reasonably established at the time the demand is
made, the interest shall begin to run only from the date the judgment of
the court is made (at which time the quantification of damages may be
deemed to have been reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on the amount finally
adjudged.

3. When the judgment of the court awarding a sum of money

becomes final and executory, the rate of legal interest, whether the
case falls under paragraph 1 or paragraph 2, above, shall be 12% per
annum from such finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a forbearance of credit.
(Emphasis supplied).

In the instant case, petitioner should be held liable for payment

of interest as damages for breach of contract of carriage.
Considering that the amounts payable by petitioner has been
determined with certainty only in the instant petition, the interest due
shall be computed upon the finality of this decision at the rate of 12%
per annum until satisfaction, per paragraph 3 of the aforecited
rule.[57]
WHEREFORE, in view of all the foregoing, the petition
is PARTIALLY GRANTED. The April 11, 2003 decision of the Court
of Appeals in CA-G.R. CV No. 63290, which modified the decision
of the Regional Trial Court of Tuguegarao, Cagayan in Civil Case
No. 5023, is AFFIRMED with MODIFICATION. As modified,
petitioner Victory Liner, Inc., is ordered to pay respondents the
following: (1) P50,000.00 as indemnity for the death of Marie Grace
Pagulayan-Gammad; (2) P100,000.00 as moral damages; (3)
P100,000.00 as exemplary damages; (4) P78,160.00 as actual
damages; (5) P500,000.00 as temperate damages; (6) 10% of the
total amount as attorneys fees; and the costs of suit.
Furthermore, the total amount adjudged against petitioner
shall earn interest at the rate of 12% per annum computed from the
finality of this decision until fully paid.
SO ORDERED.

Transpoeh 27
 Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 113578 July 14, 1995
SULPICIO LINES, INC., Petitioner,
vs.
The Honorable COURT OF APPEALS and TITO DURAN
TABUQUILDE and ANGELINA DE PAZ
TABUQUILDE, respondents.
QUIASON, J.:
This is a petition for review on certiorari under Rule 45 of the
Revised Rules of Court of the decision of the Court of Appeals in
CA-G.R. CV
No. 32864, which affirmed the decision of the Regional Trial Court,
Branch 85, Quezon City in Civil Case No. Q-89-3048.
I his daughter, was informed that the corpse of a
The Court of Appeals found:
On October 23, 1988, plaintiff Tito Duran
Tabuquilde (hereinafter, "Tito") and his three-
year old daughter Jennifer Anne boarded the
M/V Dona Marilyn at North Harbor, Manila,
bringing with them several pieces of luggage.
In the morning of October 24, 1988, the M/V
Dona Marilyn, while in transit, encountered
inclement weather which caused huge waves
due to Typhoon Unsang.
Notwithstanding the fact that Storm Signal No. 2
had been raised by the PAG-ASA authorities
over Leyte as early as 5:30 P.M. of October 23,
1988 and which signal was raised to Signal No.
3 by 10 P.M. of the same day, the ship captain
ordered the vessel to proceed to Tacloban when
prudence dictated that he should have taken it to
the nearest port for shelter, thus violating his
duty to exercise extraordinary diligence in the
carrying of passengers safely to their
destination.
At about the same time, plaintiff-appellee
Angelina Tabuquilde (hereinafter, "Angelina")
mother of Jennifer Anne, contacted the Sulpicio
Office to verify radio reports that the vessel M/V
Dona Marilyn was missing. Employees of said
Sulpicio Lines assured her that the ship was
merely "hiding" thereby assuaging her anxiety.
At around 2:00 P.M. of October 24, 1988, said
vessel capsized, throwing plaintiff-appellee Tito
and Jennifer Anne, along with hundreds of
passengers, into the tumultuous sea.
Transpoeh 28
Tito tried to keep himself and his daughter afloat
but to no avail as the waves got stronger and he
was subsequently separated from his daughter
despite his efforts.
He found himself on Almagro Island in Samar
the next day at round (sic) 11:00 A.M. and
immediately searched for his daughter among
the survivors in the island, but the search proved
fruitless.
In the meantime, Angelina tried to seek the
assistance of the Sulpicio Lines in Manila to no
avail, the latter refusing to entertain her and
hundreds of relatives of the other passengers
who waited long hours outside the Manila Office.
Angelina spent sleepless nights worrying about
her husband Tito and daughter Jennifer Anne in
view of the refusal of Sulpicio Lines to release a
verification of the sinking of the ship.
On October 26, 1988, Tito and other survivors in
the Almagro Island were fetched and were
brought to Tacloban Medical Center for
treatment.
On October 31, 1988, Tito reported the loss of
child with his daughter's description had been
found. Subsequently, Tito wrote a letter to his
wife, reporting the sad fact that Jennifer Anne
was dead. Angelina suffered from shock and
severe grief upon receipt of the news.
On November 3, 1988, the coffin bearing the
corpse of Jennifer Anne was buried in Tanauan,
Leyte.
On November 24, 1988, a claim for damages
was filed by Tito with the defendant Sulpicio
Lines in connection with the death of the plaintiff-
appellee's daughter and the loss of Tito's
belongings worth P27,580.00. (Appellees' Brief,
pp. 2-4) ( Rollo, pp. 52-54).
On January 3, 1991, the trial court rendered a decision in Civil
Case No. Q-89-3048 in favor of the plaintiffs Tito Duran
Tabuquilde and Angelina de Paz Tabuquilde (private respondents
herein) and against defendant Sulpicio Lines, Inc. (petitioner
herein) ordering defendant to pay P27,580.00 as actual damages,
P30,000.00 for the death of Jennifer Tabuquilde, P100,000.00 as
moral damages, P50,000.00 as exemplary damages, and
P50,000.00 as attorney's fees, and costs.
Petitioner appealed to the Court of Appeals which affirmed the
decision of the trial court. Petitioner then filed a motion for
reconsideration which was denied. Hence, this petition.
II
Generally, the findings of fact of the trial court are entitled to great
weight and not disturbed except for cogent reasons (Gatmaitan v.
Court of Appeals, 200 SCRA 37 [1991]). One of the accepted
reasons is when the findings of fact are not supported by the
evidence (Sandoval Shipyard, Inc. v. Clave, 94 SCRA 472 [1979]).
Corollary to this is the rule that actual or compensatory damages,
to be recovered, must be proved; otherwise, if the proof is flimsy,
no damages will be awarded (Dichoso v. Court of Appeals, 192
SCRA 169 [1990]).
In the case at bench, the trial court merely mentioned the fact of
the loss and the value of the contents of the pieces of baggage
without stating the evidence on which it based its findings. There is
no showing that the value of the contents of the lost pieces of
baggage was based on the bill of lading or was previously
declared by respondent Tito D. Tabuquilde before he boarded the
ship. Hence, there can be no basis to award actual damages in the
amount of P27,850.00.
The Court of Appeals was correct in confirming the award of
damages for the death of the daughter of private respondents, a
passenger on board the stricken vessel of petitioner. It is true that
under Article 2206 of the Civil Code of the Philippines, only deaths
caused by a crime as quasi delict are entitled to actual and
compensatory damages without the need of proof of the said
damages. Said Article provides:
The amount of damages for death caused by a
crime or quasi delict shall be at least Three
Thousand Pesos, even though there may have
been mitigating circumstances. . . .
Deducing alone from said provision, one can conclude that
damages arising from culpa contractual are not compensable
without proof of special damages sustained by the heirs of the
victim.
However, the Civil Code, in Article 1764 thereof, expressly makes
Article 2206 applicable "to the death of a passenger caused by the
breach of contract by a common carrier." Accordingly, a common
carrier is liable for actual or compensatory damages under Article
2206 in relation to Article 1764 of the Civil Code for deaths of its
passengers caused by the breach of the contract of transportation.
The trial court awarded an indemnity of P30,000.00 for the death
of the daughter of private respondents. The award of damages
under Article 2206 has been increased to P50,000.00 (People v.
Flores, 237 SCRA 653 [1994]).
With respect to the award of moral damages, the general rule is
that said damages are not recoverable in culpa contractual except
when the presence of bad faith was proven (Trans World Air Lines
v. Court of Appeals, 165 SCRA 143 [1988]). However, in breach of
contract of carriage, moral damages may be recovered when it
results in the death of a passenger (Philippine Rabbit Bus Lines,
Inc. v. Esguerra, 117 SCRA 741 [1982]; Vasquez v. Court of
Appeals, 138 SCRA 553 [1985]).
With respect to the award of exemplary damages, Article 2232 of
the Civil Code of the Philippines gives the Court the discretion to
grant said damages in breach of contract when the defendant
acted in a wanton, fraudulent and reckless manner (Air France v.
Carrascoso, 18 SCRA 155 [1966]).
Furthermore, in the case of Mecenas v. Court of Appeals, 180
SCRA 83 (1989), we ruled that:
. . . . The Court will take judicial notice of the
dreadful regularity with which grievous maritime
disasters occur in our waters with massive loss
of life. The bulk of our population is too poor to
afford domestic air transportation. So it is that
notwithstanding the frequent sinking of
passenger in our waters, crowds of people
Transpoeh 29
continue to travel by sea. This Court is prepared
to use the instruments given to it by the law for
securing the ends of law and public policy. One
of those instruments is the institution of
exemplary damages; one of those ends, of
special importance in an archipelagic state like
the Philippines, is the safe and reliable carriage
of people and goods by sea. . . . (at p. 100).
A common carrier is obliged to transport its passengers to their
destinations with the utmost diligence of a very cautious person
(Laguna Tayabas Bus Co. v. Tiongson, 16 SCRA 940 [1966]). The
trial court found that petitioner failed to exercise the extraordinary
diligence required of a common carrier, which resulted in the
sinking of the M/V Dona Marilyn.
The trial court correctly concluded that the sinking of M/V Dona
Marilyn was due to gross negligence, thus:
. . . [i]t is undisputed that Typhoon Unsang
entered the Philippine Area of Responsibility on
October 21, 1988. The rain in Metro Manila
started after lunch of October 23, 1988, and at
about 5:00 p.m. Public Storm Signal No. 1 was
hoisted over Metro Manila, Signal No. 2 in Leyte
and Signal No. 3 in Samar. But at 10:00 o'clock
(sic) in the morning of October 23, 1988, Public
Storm Signal No. 1 was already hoisted over the
province of Leyte, which is the destination of
M/V Dona Marilyn. This was raised to Signal No.
2 at 4:00 p.m. and Signal No. 3 at 10:00 p.m. on
the same date. The following day, October 24,
1988, at 4:00 a.m. and 10:00 a.m., Storm Signal
No. 3 remained hoisted in Leyte. At 4 p.m. on
October 24, 1988, Storm Signal No. 3 remained
hoisted in Leyte but was reduced to Storm
Signal No. 2 (Exh. G). Signal No. 1 has
maximum winds at 60 kph within 36 hours;
Signal No. 2 has maximum winds of from 60 kph
to 100 kph within a period of 24 hours; and
Signal No. 3 has maximum winds of 100 kph
and above within a period of 12 hours.
Warnings of the storm signal are issued by PAG-
ASA thru DZZA, Office of Civil Defense,
Philippine Navy, Coast Guard, Radio Stations,
and other offices, every six (6) hours as soon as
a cyclone enters the Philippine Area of
Responsibility.
At 10:30 a.m. on October 24, 1988, the vessel
was estimated to be between Mindoro and
Masbate, and the center of the typhoon then
was around 130 degrees longitude with
maximum winds of 65 kph (Exh. G-3), with a
"radius of rough to phenomenal sea at that time
of 450 kms. North and 350 kms. elsewhere; 350
kms. North center and all throughout the rest" (p.
12, TSN, Lumalda, Feb. 19, 1990).
xxx xxx xxx
In the same manner, (referring to the negligence
of the crew of the ship that sank in Vasquez v.
Court of Appeals, 138 SCRA 553 [1985]) the
crew of the vessel M/V Dona Marilyn took a
calculated risk when it proceeded despite the
typhoon brewing somewhere in the general
 direction to which the vessel was going. The
crew assumed a greater risk when, instead of
dropping anchor in or at the periphery of the Port
of Calapan, or returning to the port of Manila
which is nearer, proceeded on its voyage on the
assumption that it will be able to beat and race
with the typhoon and reach its destination before
it (Unsang) passes ( Rollo, pp. 45-47).

The award of attorney's fees by the trial court to respondents is

also assailed by petitioner, citing Mirasol v. De la Cruz, 84 SCRA
337 (1978). In this case, the petitioner filed before the Municipal
Court an action for forcible entry against the private respondent.
The said court dismissed the complaint. On appeal, the Court of
First Instance of Camarines Sur sustained the decision of the
lower court, dismissed the appeal and awarded attorney's fees in
the sum of not less than P500.00 in favor of private respondent.
Upon appeal to us, we deleted the award of attorney's fees
because the text of the appealed decision was bereft of any
findings of fact and law to justify such an award. Moreover, there
was no proof, other than the bare allegation of harassment that the
adverse party had acted in bad faith. The aforementioned decision
is inapposite to the instant case where the decision clearly
mentions the facts and the law upon which the award of attorney's
fees were based.

WHEREFORE, the decision of the Court of Appeals is AFFIRMED

with the MODIFICATION that the award of P27,580.00 as actual
damages for the loss of the contents of the pieces of baggage is
deleted and that the award of P30,000.00 under Article 2206 in
relation Article 1764 is increased to P50,000.00.

SO ORDERED.

Transpoeh 30
 SECOND DIVISION
[G.R. No. 128820. December 23, 1999]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. GAUDIOSO
MORE, ERNESTO, MORE and JERWIN MORE, accused-
appellants.
DECISION
BELLOSILLO, J.:
GAUDIOSO, ERNESTO and JERWIN, all surnamed MORE, were
found guilty of murder by the trial court for the killing of Valentino
Pagumay on 22 February 1994 and sentenced to reclusion perpetua with
all its accessory penalties and to pay P28,977.00 for funeral services and
other expenses, P133,333.00 for loss of income for five (5)
years, P100,000.00 for moral damages, and the costs.[1] They now come to
us appealing their conviction.
The factual backdrop: On 22 February 1994 at about six o'clock in
the evening, Valentino Pagumay and Romeo Muralla were walking along
the river in Brgy. Igsoligue, Miag-ao, Iloilo, on their way to nearby Brgy.
Igbogo to get some tuba when they chanced upon the More brothers
Gaudioso alias "Nono," Ernesto alias "Didoy" and Jerwin alias "Max"
some three hundred (300) meters away. As they drew near, the accused
who were armed with a gun and knives, inexplicably shouted why
Valentino and Romeo were pointing guns at them. Both Valentino and
Romeo were unarmed. When Valentino nervously told Romeo, who had
no quarrel with the accused, that the More brothers were going to kill him,
the duo ran as fast as they could. But the accused chased them.
About three hundred (300) meters from where the chase began, the
accused led by Jerwin finally caught up with Valentino who was lagging
behind Romeo. Jerwin stabbed Valentino at the left side of his
mouth. Ernesto followed by stabbing the victim in the chest. While Jerwin
and Ernesto were stabbing Valentino Gaudioso held their captive by the
shoulders. Gaudioso then took his turn and stabbed Valentino on the chest
causing the latter to fall to the ground. The three (3) accused persisted in
their criminal design and pinned their victim down with their hands and
knees. They took turns in stabbing him again several times.
As the stabbing progressed Romeo was having an unobstructed view
of the occurrence some ten (10) meters away. After they were through with
Valentino the accused turned to Romeo and warned him against telling
anybody about the incident and ordered him to go home. The three (3)
More brothers then ran away.
When the More brothers were already farther down the river Romeo
noticed Juanito Faromal standing a few meters away from the crime
scene. After seeing Valentino already lifeless Romeo left to inform the
victim's wife, but on the way he met Sgt. Romeo Gersa so he reported the
matter to him.[2] Sgt. Gersa pursued the accused but could not apprehend
them as he already got tired. When he fired a warning shot the three (3)
accused retaliated and fired three (3) shots instead. Juanito corroborated
the testimony of Romeo regarding the assault except that according to him
it was only Gaudioso who stabbed the victim while his brothers Jerwin and
Ernesto only assisted in restraining the victim.
The accused, on their part, invoked self defense. The version of
Ernesto and Jerwin was that at about six o'clock in the evening of 22
February 1994 they were walking along a road in Brgy. Igsoligue about ten
(10) arms' length ahead of their brother Gaudioso when they heard
someone ask the latter for a light for his cigarette. Ernesto and Jerwin did
not recognize the voice. About two (2) minutes later they heard a gun
explode. They looked back and saw Gaudioso and Valentino already on
the ground wrestling with each other. Gaudioso was sitting astride
Transpoeh 31
Valentino as he stabbed the latter.[3] Ernesto and Jerwin rushed towards the
two (2) - Gaudioso and Valentino - entreating Gaudioso to stop, but to no
avail. Gaudioso only stopped when Valentino was already dead. Gaudioso
then explained to his brothers that he stabbed Valentino because the latter
was going to shoot him. Afterwards they went home and did not report the
incident anymore to the barangay captain since it was already late.
Gaudioso claimed that when he handed his cigarette to Valentino
upon the latter's request he, instead of taking the cigarette, suddenly drew
a .38 caliber gun and pointed it at him with the words: "I will shoot
you.[4] Reacting immediately, Gaudioso, using both hands, frustrated
Valentino's attempt by grabbing the latter's right hand that was holding the
gun, twisted it, and then used his foot to outbalance Valentino sending the
latter to the ground. Thus Valentino was not able to fire his gun. Gaudioso
then straddled Valentino and pinned his left hand with his right knee while
his left hand held Valentino's right that was clutching the gun. In this
position, Gaudioso repeatedly stabbed Valentino until the latter died. [5]
On 9 May 1996 the trial court found all three (3) accused, Gaudioso,
Ernesto and Jerwin More, guilty as principals by conspiracy for the murder
of Valentino Pagumay, qualified by abuse of superior strength. The trial
court sustained the version of the prosecution and rejected the theory of
self-defense primarily in view of the eighteen (18) stab wounds sustained
by the victim and the fact that they were caused by at least two (2) different
knives, one single-bladed and the other double-bladed, indicating that there
were at least two (2) assailants. The three (3) accused were accordingly
sentenced to suffer the penalty of reclusion perpetua with all its accessory
penalties, and to pay damages in the total amount of P262,310.00 plus the
costs.
Accused-appellants contend in this appeal that the trial court
erred: (a) in not appreciating in their favor the justifying circumstance of
self-defense, insisting that all the elements thereof were successfully
established, and, (b) in finding them guilty beyond reasonable doubt of
murder notwithstanding the inconsistencies in the testimonies of
prosecution witnesses Romeo Muralla, Juanito Faromal and Sgt. Gersa.
We find no merit in the appeal. When self-defense is invoked by an
accused charged with murder or homicide he necessarily owns up to the
killing but may escape criminal liability by proving that it was justified and
that he incurred no criminal liability therefor.[6] Hence, the three (3)
elements of self-defense, namely: (a) unlawful aggression on the part of
the victim; (b) reasonable necessity of the means employed to prevent or
repel the aggression; and, (c) lack of sufficient provocation on the part of
the person defending himself, which must be proved by clear and
convincing evidence.[7] However, without unlawful aggression there can
be no self-defense, either complete or incomplete.[8]
In the instant case, accused-appellants sought to establish unlawful
aggression on the part of Valentino Pagumay by testifying that the latter,
after asking Gaudioso for a light for his cigarette, suddenly and for no
reason at all, drew his gun and pointed it at Gaudioso with the threatening
words, "I will shoot you." However, quite an enlightening and revealing
narrative follows thus:
Q: When Valentino Pagumay drew his gun from his waist what did you
do?
A: Both my hands caught his hand holding the firearm x x x x
Q: When you were able to grab the hand of Valentino Pagumay what
happened next?
A: He fell to the ground.
Q: So you want to tell the Court that immediately after you grabbed or
took hold of his hand he immediately fell to the ground?
A: Yes sir because he wrestled with me when I took hold both of his
hand (sic) and twisted his arm.
Q: When Valentino Pagumay fell to the ground what did you do?
 A: After he fell to the ground I sat on his abdomen. My right knee was
pinning down his left hand while my left hand was pinning on
the ground his right hand and then I delivered several successive
stab blows on his breast x x x x
Q: And how many times did you stab him?
A: I was not able to count the number of times because I was stabbing
him successively.
Q: And you cannot estimate the number of stab blows you delivered to
him?
A: I was not able to count the number of blows because I was stabbing
and hitting him until his death (underscoring ours).[9]
Clearly, the unlawful aggression allegedly started by Valentino -
assuming it to be true - had already ceased by the time Gaudioso repeatedly
stabbed Valentino to death. Gaudioso himself testified that after Valentino
threatened to shoot him, he was able to grab Valentino's right hand which
was holding the gun, outbalance him, and then pin both his hands while the
latter was lying prone on the ground. Having thus immobilized Valentino,
there was obviously no more reason for Gaudioso to stab Valentino
eighteen (18) times as he did because the alleged unlawful aggression from
Valentino had stopped. In legitimate self-defense the aggression must still
be existing or continuing when the person making the defense attacks or
injures the aggressor.[10] Thus when the unlawful aggression ceases to
exist, the one making the defense has no more right to kill the former
aggressor.[11] In such cases, less violent means would have sufficed; hence,
if not resorted to, the plea of self-defense must fail.[12]
In the instant case Valentino was already effectively immobilized by
Gaudioso, hence, the latter could have either simply boxed the former with
his free right hand, hit him on a non-vital part of his body,[13] or better yet,
summoned his brothers Ernesto and Jerwin who were just standing a few
meters away to help him in ensuring no further aggression from
Valentino. However, quite inconsistent with his plea of self-defense,
Gaudioso did none of these things. Instead, he even ignored his brothers'
entreaties for him to stop, rebuffed their efforts to the extent of even
accidentally hitting Jerwin as claimed by the latter,[14] and continued
stabbing Valentino successively until the latter died.[15]Considering all
these, the plea of self-defense cannot but be received with incredulity and
disbelief.
In addition to the foregoing, several other circumstances exist to
further undermine the plea of self-defense and establish accused-
appellants' collective guilt.
First, the trial court correctly noted that the victim sustained a total
of eighteen (18) stab wounds, fourteen (14) of which were inflicted on the
anterior chest alone, and four (4) of which were fatal. It is an oft-repeated
rule that the presence of a large number of wounds on the part of the victim
negates self-defense because, rather than suggest an effort to defend
oneself, it instead strongly indicates a determined effort to kill the
victim.[16] Second, the claim that Gaudioso alone killed Valentino in self-
defense and that Ernesto and Jerwin had nothing to do with the killing was
disproved not only by Romeo and Juanito's positive identification of
Ernesto and Jerwin as co-conspirators (at least) to the crime but, more
importantly, by the fact that the stab wounds themselves indicated that
there was actually more than one assailant. As testified to by Dr. Mary
Joyce M. Faeldan, the Acting Municipal Health Officer of Miag-ao who
autopsied the cadaver, the eighteen (18) stab wounds sustained by the
victim were not all caused by a single weapon but by two (2) kinds of
knives, i.e., one single-bladed, and the other, double-bladed. While three
(3) stab wounds had blunt and contussed extremities indicating that they
were inflicted with the use of a blunt single-bladed knife, the remaining
fourteen (14) stab wounds had regular distinct clean-cut edges and sharp
extremities indicating a sharp double-bladed knife as the murder
weapon.[17] Since only Gaudioso's right hand was free to hold a weapon,
his left hand already gripping Valentino's right hand, then it is quite
obvious that his brothers likewise participated in the assault as claimed by
the prosecution witnesses because Gaudioso, evidently, could not have
managed two (2) weapons at the same time with only his right hand free.
Transpoeh 32
Third, accused-appellants did not inform the authorities about the
incident. If they were really innocent as they claimed to be, they should
have told the authorities about the accidental killing.[18] Their excuse that
it was already late is not only shallow but quite incredible considering three
(3) factors: (a) accused-appellants managed to get home at the relatively
early hour of 6:30 in the evening;[19] (b) the house of the barangay captain
to whom they could have reported the incident was a mere fifty (50) meters
away from their own house;[20] and, (c) Gaudioso was himself a barangay
official making it easier for him to approach the other barangay authorities
who were but his colleagues.[21]
Fourth, accused-appellants do not deny that they did not surrender to
Sgt. Gersa when the latter saw them immediately after the killing. In fact,
they ignored his warning shot and ran away. Worse, accused-appellants
even returned fire with three (3) gunshots of their own, continued their
flight until Sgt. Gersa gave up the chase through sheer exhaustion, and
yielded only when they were already invited for questioning by the police
after having been identified as the killers by eyewitnesses Romeo Muralla
and Juanito Faromal.
On the alleged inconsistencies in the testimonies of the prosecution
witnesses, suffice it to say that inconsistencies on minor and trivial matters
do not diminish but rather bolster a witness's credibility as they in fact
manifest spontaneity and lack of scheming.[22] In other words, they are
badges of truth rather than indicia of falsehood.[23] Thus the alleged
contradictions on the relative positions of Romeo and Valentino while the
latter was being stabbed, whether it was Romeo or Juanito who informed
the victim's wife about the incident, and whether Juanito was indeed taken
by Sgt. Gersa to Camp Monteclaro after the incident, are but trivial and
minor inconsistencies which neither detract from the essential integrity of
the prosecution's evidence nor strengthen accused-appellants' flagging plea
of self-defense. Having already pleaded self-defense, accused-appellants
could not invoke the alleged weakness of the prosecution's evidence, for,
even if the latter were weak (which is certainly not so in the instant case),
it could not be disbelieved in view of their open admission of responsibility
for the killing.[24]
On the civil liabilities of accused-appellants a modification of the
amounts awarded by the trial court is in order. By way of moral damages,
the trial court awarded P100,000.00. Since the award is not meant to enrich
the heirs of the victim but only to compensate them for injuries sustained
to their feelings we reduce the amount to P50,000.00 consistent with
prevailing jurisprudence.[25] A reduction of the actual damages awarded is
likewise proper. The trial court awarded P28,977.00 for various expenses
incurred by the victim's widow as a result of the killing. However, since
only the costs of the tomb, coffin, embalming and funeral services in the
total amount of P8,977.00 were properly receipted[26] the estimated amount
of P20,000.00 allegedly spent for food and drinks consumed during the
wake must be disallowed for not having been competently proved. The
Court can only give credit to expenses which have been duly
substantiated.[27]
On the victim's loss of earning capacity, Victoria Pagumay testified
that her husband, a farmer, was 53 years old when he was killed, with an
average annual income of P40,000.00 to P50,000.00.[28] Using P40,000.00
as the deceased's average annual income while still alive, the trial court
awarded P133,333.00 for loss of earning capacity after multiplying two-
thirds (P26,666.67) of the victim's average annual income[29]by five (5)
years. No reason was given, and no legal basis exists, why lost income was
awarded for only five (5) years. On the contrary, the victim's lost earnings
are to be computed according to the formula adopted by the Court in
several decided cases,[30] to wit: net earning capacity ("X") equals life
expectancy[31] multiplied by gross annual income[32] less living
expenses.[33] Thus, the victim's lost earning capacity amounted
to P405,000.00 as may be shown hereunder -
X = 2(80-53) x
[P45,000 - P22,500]
3
X = 2 (27) x P22,500
3
X = 54 x P22,500
 3
X = 18 x P22, 500
X = P405,000.00
Finally, an award of another P50,000.00 is warranted as civil
indemnity for the death of the victim without need of evidence or proof of
damages.[34]
WHEREFORE, the appealed Decision dated 9 May 1996 of the
Regional Trial Court of Iloilo City, Branch 25, finding accused-appellants
GAUDIOSO MORE, ERNESTO MORE and JERWIN MORE guilty
beyond reasonable doubt of Murder is AFFIRMED. Accused-appellants
are ordered to pay, jointly and severally, the heirs of Valentino Pagumay
the following amounts: (a) P50,000.00 as civil indemnity; (b) P50,000.00
as moral damages; (c) P8,977.00 as actual damages; and, (d) P405,000.00
for loss of earning capacity. Costs against accused-appellants.
SO ORDERED.

Transpoeh 33
 SECOND DIVISION
[G.R. No. 120874. July 31, 2003]
NAPOLEON TUGADE, SR., and RIZALINA FABRO-TUGADE,
substituted by her heirs, namely, Napoleon Sr.,
Napoleon Jr., and Zenaida, all surnamed
TUGADE, petitioners, vs. COURT OF APPEALS and
PANGASINAN ELECTRIC COOPERATIVE,
INC., respondents.
DECISION
AUSTRIA-MARTINEZ, J.:
While this Court is not a trier of facts, there are instances
however when we are called upon to re-examine the factual findings
of the trial court and the Court of Appeals and weigh, after
considering the records of the case, which of the conflicting findings
is more in accord with law and justice.[1] Such is the case at bar.
The antecedent facts of this case are as follows:
On June 12, 1980 at around 12:00 noon, Engr. Henry Tugade
of the Pangasinan Electric Cooperative, Inc. (Panelco) rode in a
company rover jeep together with four other employees bound from
the Panelco compound in Bani to Bolinao, Pangasinan. Somewhere
in Tiep, Pangasinan, a Dagupan bus that was also headed for
Bolinao, began to follow the rover jeep. While the bus was trying to
overtake the jeep, the latter turned turtle and caused four of its five
occupants to fall out of the jeep causing the death of Tugade and
another passenger by the name of Consuelo Estolonio. [2]
Separate cases for damages, docketed as Civil Cases Nos. A-
1368 and A-1384 were filed by the heirs of the two deceased before
the Regional Trial Court of Pangasinan against Panelco and
Dagupan Bus Co. and their respective drivers, Honorato Areola and
Renato Quiambao. It is Civil Case No. A-1368 filed by the heirs of
Henry Tugade, which is now the subject of the present petition.
The Regional Trial Court of Pangasinan (Branch 55) held
Panelco and its driver liable, thus:
As a consequence and in view of the evidence on record, the Court
holds and so finds that the accident occurred due to the fault or
negligence of Panelco and its driver Honorato Areola. The
negligence of Panelco consists in having allowed its rover jeep
which is mechanically defective, unsafe and not roadworthy to be
operated on a highway. On the other hand, the defendant-driver
Honorato Areola was likewise, negligent in driving a vehicle which
was not roadworthy, unsafe and with a mechanical defect.
The Court finds that the defendants Panelco and Honorato Areola
are liable to pay to the plaintiffs in Civil Case No. A-1368 damages,
as follows: actual damages, P99,131.00 (Exhibits H to H-3, I to I-4
and K), attorneys fees, P20,000.00, moral damages, P20,000.00
and exemplary damages, P10,000.00
As to loss of earning capacity, it has been held in Villa-Rey Transit
vs. Court of Appeals, 31 SCRA 511, that this is based on net
earnings and not gross earnings. No evidence was introduced to
show the net earnings. However, under the Circumstances, the
Court holds that a monthly net earning of P500.00 would be
reasonable. Using the formula in the Villa-Rey case, the life
Transpoeh 34
expectancy of the late Henry Tugade would be 36 years, hence the
Court awards P216,000.00 for loss of earning capacity.
WHEREFORE, the Court hereby renders judgment:
1. Dismissing the complaint and cross-claim as
against Dagupan Bus in Civil Case No.
A-1368;
2. Dismissing the complaint in Civil Case No. A-
1384;
3. In Civil Case No. A-1368, ordering the
defendants Pangasinan Electric
Cooperative, Inc., and Honorato Areola
to pay, jointly and severally, to the
plaintiffs, the following:
P 99,131.00 as
actual damages;
216,000.00 for loss
of earning capacity;
20,000.00 moral
damages; and
10,000.00
exemplary
damages; and
20,000.00 attorneys
fees
With costs against said defendants.[3]
In arriving at its decision, the trial court explained that:
xxx Rosie Castrence, a passenger of Bus No. 244 who saw the
accident testified categorically that the rover jeep turned turtle in
front of the Dagupan Bus when the jeep was about 5 meters in front
of the Bus and the jeep turned turtle even without being bumped by
the Dagupan Bus. The Court considers this witness as an unbiased
witness as she appears not to be an interested party. She was also
in a good position to observe in detail what actually happened at the
scene of the accident as she was seated on the right front seat of
the bus. The Court believes this witness more than the other
witnesses who do not appear to be disinterested.
Furthermore, it is not credible that if the rover jeep was hit on its left
rear, it will turn turtle on its left side. The natural effect or tendency
is for the jeep to be pushed or even thrown towards its right side. If
the jeep turned turtle towards the left, it must have been due to some
other cause than being hit by the bus on its left side.
The physical facts which do not lie as well as testimonial evidence
support the stand of Dagupan Bus that the bus did not hit the left
rear of the rover jeep.
If the bus did not hit the left rear of the jeep what then caused the
latter to turn turtle. There is merit in the contention of defendant
Dagupan Bus that the cause was due to some mechanical
defect. By Defendant Areolas own admission, the rover jeep was
being fixed by the Chief mechanic at the motor pool of Panelco,
when he arrived at their compound, and that the jeep was Quite old.
Likewise, Rosie Castrence also testified that when she first saw the
Panelco jeep at Tiep, Bani, Pangasinan, the jeep was already zig-
zagging and wiggling, a sign that indeed the jeep had some
mechanical defect.
Another mark of a mechanical defect in the jeep was the fact that
the right front wheel and rear wheel of the jeep were detached
because their spindles were broken. This came from the mouth of
Panelcos witness Florencio Celeste.
The next issue to be resolved is what was the cause of death of
Henry Tugade? Plaintiffs theory is, of course, that Henry Tugade
died because he was run over and pinned under the left front wheel
of Dagupan Bus No. 244 crushing his head and upper body. This is
the same theory of defendants Panelco and Areola.Defendants
Dagupan Bus and Quiambao deny this claim and their theory is that
Henry Tugades death was caused by the violent impact of his head
against the hard pavement of the road when he was thrown out of
the rover jeep.
The plaintiffs theory is, however, contradicted by their own medico
legal expert Dr. Wilfredo Nazareno who testified positively that the
fatal injury which caused the death of Henry Tugade were the
fractures on his head which could have been due to the impact of
the head against the asphalted road.
Again plaintiffs theory is contradicted by Panelcos own witness
Florencio Celeste, Chief Engineer, who was the only one who did
not fall out of the jeep, when he testified that the left front wheel of
the bus did not rest on the head of Henry Tugade and the wheel of
the bus did not run over the head of the victim.
Rosie Castrence, a disinterested witness, also declared that the left
front tire of the bus did not run over the head of Henry Tugade. [4]
Petitioners went to the Court of Appeals questioning only the
award of damages and attorneys fees.[5] They claimed that the lower
court erred in: finding that the monthly earnings of the late Henry
Tugade at the time of his death was only P500.00; disregarding the
evidence on record showing the monthly earnings of the late Henry
Tugade; not considering the social, educational and economic
status of the plaintiffs in its assessment of the moral and exemplary
damages; and setting the sum of P20,000.00 as attorneys fees.[6]
Respondent Panelco also appealed to the Court of Appeals
from the decision of the trial court and assailed its ruling that the
negligence of Panelco and its driver was the proximate cause of the
accident.[7]
In its decision dated September 7, 1994,[8] the Court of
Appeals reversed the findings of the trial court, declared that
Dagupan Bus, as an employer, had exercised due diligence in the
selection and supervision of its employees and disposed of the case
in this wise:
WHEREFORE, in view of all the foregoing, the decision of the court
a quo is reversed, but only insofar as it holds defendant Pangasinan
Electric Cooperative, Inc. liable, and defendant Renato Quiambao
is ordered to pay to defendant-appellant Pangasinan Electric
Cooperative, Inc., P7,500.00 as temperate damages, P10,000.00
as attorneys fees and costs of suit.[9]
The appellate court explained, thus:
The testimony of Castrence, on which the court a quo heavily relied
in its finding of facts, is contradicted by the greater weight of
evidence on record.
First, there is no evidence whatsoever --- for either one of the parties
--- of a blown-out tire. What the evidence on record indicates is that
the two right wheels of the jeep were detached. The testimony
regarding a blown-out tire is not even in consonance with the theory
Transpoeh 35
of Dagupan, that is, that the wheels were detached due to
mechanical defects.
Second, her testimony that the jeep was wiggling and zigzagging is
contradicted by the testimonies of Florencio Celeste and Cipriano
Nacar, passengers of the jeep and witnesses for plaintiffs Tugade,
to the effect that their ride was smooth and normal. (TSN,
September 29, 1983, pp. 10, 43 & 66; November 20, 1984, p. 7)
Third, her testimony regarding the sitting arrangement of
passengers of the jeep is contradicted by the testimony of Cipriano
Nacar, passenger of the jeep and witness for plaintiffs
Tugade. According to Nacar, he and Estolonio were seated at the
rear of the jeep; the driver Areola was behind the steering wheel,
with Celeste to his right and Tugade on the rightmost. In other
words, Celeste was between Areola and Tugade, and no one was
seated to the left of the driver. (TSN, September 29, 1983, pp. 9-10)
Fourth, her testimony that Tugades head was about one foot from
the left front tire of the bus is likewise contradicted by the testimonies
of Cipriano Nacar and Honorato Areola that the tire of the bus was
partly resting on the head of Tugade. In fact, the bus driver Renato
Quiambao even had to back up the bus so that Tugades body may
be pulled out from below. (ibid., pp. 22-23)
Fifth, her testimony that Tugades shirt was checkered is also
contradicted by Exhibit G, a photograph of the deceased as he lay
on the ground. The photograph shows Tugade wearing a plain white
shirt.
Finally, her testimony that she did not see Estolonio after the
accident because the latter was inside the jeep is again contradicted
by the finding of the court a quo that all the passengers of the rover
jeep were thrown out of the vehicle except Florencio Celeste and
the body of Henry Tugade landed on the left lane of the road and
was in front of the left front wheel of Bus No. 244. (underscoring
ours, Decision, p. 2) In other words, Estolonio, just like Tugade, was
sprawled on the ground. (ibid., p. 22)
Castrences testimony is also marred by improbabilities.
First, she claims to have noticed the color of Tugades pants who
was seated --- in the front of the jeep. It is quite improbable that
Castrence, being seated inside the bus, could see the color of the
pants of Tugade who was seated on the front seat of the
jeep. Second, while she noticed the passengers in the front of the
jeep --- indeed she even noticed the color of the pants one of them
was wearing --- she could not tell whether or not there were
passengers at the back. Third, it is also improbable that the driver
and the passengers of the jeep simply continued with their journey,
oblivious to the wiggling and zigzagging of their vehicle.
Moreover, even disregarding the incredibility of Castrences
testimony, still the version that the accident was due to a mechanical
defect that allowed the wheels to be detached cannot be given
credence. If the cause of the accident was that both wheels on the
right side were detached, then the jeep would not have turned turtle
to its left, but to its right. If there had been no wheels to support its
right side, the jeep should have turned turtle to its right, but it turned
to its left instead.
The court a quo reasons that it is not credible that if the rover jeep
was hit on its left rear, it will turn turtle on its left side. The natural
effect or tendency is for the jeep to be pushed or even thrown
towards its right side. (Decision, p. 3) The court a quo, however,
seems to have disregarded the testimony of Honorato Areola that
the jeep first swerved to the right, then to the left. (TSN, October 15,
1984, p. 48) To be noted also is that a jeep is inherently
maneuverable, and may easily swerve from side to side when hit
from its left rear portion. Moreover, after the accident, both the jeep
and the bus were at the left side of the highway. If the bus were not
attempting to overtake the jeep, why then was it at the left side of
the highway?
As may be seen from the foregoing, the court a quo failed to take
into account the discrepancies and inconsistencies of Castrences
testimony vis--vis established facts and other evidence on record.
Moreover, the court a quo misappreciated the testimony of Areola
that the jeep was being checked up at the Panelco motor pool, and
interpreted such testimony to mean that the jeep was being fixed or
repaired due to a mechanical defect. First, the mere fact that the
jeep was at the motor pool does not mean that it was there due to a
mechanical defect. As testified by Areola, it was being subjected to
a check-up (TSN, October 9, 1984, pp. 41-42), which may have
been simply routinary. Second, even assuming that the jeep had a
mechanical defect, its presence at the motor pool may also mean
that such defect had been repaired and that the jeep was quite old
does not necessarily mean that it had a mechanical defect. That two
wheels were detached from the jeep and that its spindle was broken
can be just as reasonably explained by the fact that the jeep turned
turtle after being sideswiped by an overtaking bus.
On the contrary, Celeste and Nacar, witnesses for the plaintiffs
Tugade, consistently testified that their ride was normal and smooth.
In light of the foregoing, the conclusion must be that the accident
was caused by the negligence of Quiambao in driving Bus No. 244,
as testified to by Areola, Nacar and Celeste, for which he must be
held civilly liable.[10]xxx
Hence, petitioner filed the present petition for certiorari [11] of
the decision of the Court of Appeals and the resolution dated June
27, 1995 denying petitioners motion for reconsideration.
Petitioners contend that the Court of Appeals:
I each other, such as in this case, the Supreme Court may scrutinize
COMMITTED AN ERROR OF LAW AND VIOLATED THE RULES
OF EVIDENCE BY REJECTING THE TESTIMONY OF A
DISINTERESTED WITNESS AND ADMITTED THE BIASED
TESTIMONIES OF THE EMPLOYEES-WITNESSES FOR
PRIVATE RESPONDENT PANELCO.
II
COMMITTED AN ERROR OF LAW BY SUBSTITUTING ITS
FINDINGS OF FACTS TO THAT OF THE TRIAL COURT WHICH
WAS IN A BETTER POSITION TO EVALUATE AT FIRST HAND
THE EVIDENCE ADDUCED BY THE PARTIES, PARTICULARLY
THE SITUATION, DEMEANOR AND SINCERITY OF THE
WITNESSES.
III
MISINTERPRETED, IF NOT DELIBERATELY DISREGARDED,
THE BREAKING OF THE SPINDLE AND THE DETACHMENTS OF
THE FRONT RIGHT AND REAR WHEELS OF THE ROVER JEEP
OF PRIVATE RESPONDENT PANELCO WHICH ARE
CONCLUSIVE PROOF OF THE ROAD UNWORTHINESS OF THE
ROVER JEEP THAT TURNED TURTLE CAUSING THE DEATH
OF THE LATE HENRY TUGADE.
Transpoeh 36
IV
ERRED IN ARRIVING AT A CONCLUSION THAT PRIVATE
RESPONDENT WAS NOT NEGLIGENT AT THE TIME OF THE
ACCIDENT AND IS NOT THEREFORE LIABLE FOR THE
UNTIMELY DEATH OF HENRY TUGADE.
V
ERRED IN NOT APPLYING PERTINENT JURISPRUDENCE AND
PROVISIONS OF LAWS IN REVERSING THE DECISION OF THE
TRIAL COURT.[12]
Petitioners stress that they only questioned before the Court
of Appeals the amount of damages, loss of earning capacity and
attorneys fees awarded by the trial court in its decision, but the
appellate court disregarded the factual findings and conclusions of
the trial court and substituted its own findings of fact.Petitioners
claim that this violates the doctrine that the findings of the trial court
on the credibility of witnesses are entitled to great weight on appeal
as it is in a better position to decide the question on credibility having
seen and heard the witnesses themselves. Petitioners further claim
that: the Court of Appeals erroneously disregarded the testimony of
Rosie Castrence which the trial court found to be a disinterested
party, based on minor and trivial inconsistencies;[13] the appellate
court overlooked or failed to consider the breaking of the spindles
and the detachment of the front and rear wheels of the rover jeep
owned by and belonging to respondent Panelco which led the trial
court to conclude that the accident was due to the negligence of
private respondent as it allowed its rover jeep which is mechanically
defective and not roadworthy to be operated on a highway and due
to the negligence of defendant Honorato Areola in driving a vehicle
which was not roadworthy.[14]
In its Comment, respondent Panelco points out that the factual
findings of the Court of Appeals is not reviewable by the Supreme
Court.[15]
Petitioners in their Reply, meanwhile, argue that where the
findings of the Court of Appeals and the trial court are contrary to
the evidence on record.[16]
In its Rejoinder, respondent Panelco reiterates that: the
petitioners raised only factual issues which in effect will make this
Court a trier of facts; the Court of Appeals, contrary to the contention
of petitioners, actually set the record straight by carefully scrutinizing
the factual evidence; the appellate court pointed out in detail the
inconsistencies in the findings of the lower court unlike the
haphazard way by which the lower court reached its conclusions.[17]
We find the petition to be impressed with merit.
As mentioned earlier, it is settled that as a rule, our jurisdiction
in cases brought to us from the Court of Appeals is limited to the
review and revision of errors of law allegedly committed by the
appellate court, as its findings of fact are deemed conclusive and
we are not duty-bound to analyze and weigh all over again the
evidence already considered in the proceedings below.[18]
However, we have consistently enunciated that we may review
the findings of fact of the Court of Appeals:
(a) where there is grave abuse of discretion; (b) when the finding is
grounded entirely on speculations, surmises or conjectures; (c)
when the inference made is manifestly mistaken, absurd or
impossible; (d) when the judgment of the Court of Appeals was
based on a misapprehension of facts; (e) when the factual findings
are conflicting; (f) when the Court of Appeals, in making its findings,
went beyond the issues of the case and the same are contrary to
the admissions of both appellant and appellee; (g) when the Court
of Appeals manifestly overlooked certain relevant facts not disputed
by the parties and which, if properly considered, would justify a
different conclusion; and, (h) where the findings of fact of the
Court of Appeals are contrary to those of the trial court, or are
mere conclusions without citation of specific evidence, or where the
facts set forth by the petitioner are not disputed by the respondent,
or where the findings of fact of the Court of Appeals are premised
on the absence of evidence and are contradicted by the evidence
on record.[19] [Emphasis ours]
In this case, the factual findings of the trial court and the Court
of Appeals are conflicting. Thus, it behooves this Court to review the
findings of facts of the lower courts.
The trial court gave weight to the testimony of Rosie
Castrence, a passenger of Dagupan bus who testified that the
Panelco rover jeep turned turtle without being hit by the bus from
behind; while the Court of Appeals pointed out inconsistencies in her
testimony and gave weight to the version of the employees of
Panelco that the jeep turned turtle because it was hit by the bus from
behind.
The trial court reasoned that Castrence, a fish vendor who
happened to be a passenger at the time of the accident, was
credible and unbiased being a disinterested witness, unlike the other
witnesses who are employees of Panelco. It also explained that she
was in a good position to observe in detail what actually happened
at the scene of the accident as she was seated at the right front seat
of the bus.[20]
On the other hand, the Court of Appeals considered her
testimony not worthy of belief because of inconsistencies especially
vis-a-vis the testimonies of the employees of Panelco,
namely: Areola, Nacar and Celeste,[21] to which the appellate court
gave greater weight and on which basis it concluded that the
accident was caused by the negligence of Quiambao in driving Bus
No. 244 for which he must be held civilly liable. [22]
In ascertaining the facts of the case, it would have greatly
aided the courts if photographs of the vehicles were presented
during the trial. However, none was presented. Hence, we are
constrained to rely mainly on the testimonies of the witnesses.
After reviewing the entire records of the case, we find
compelling reasons to reverse the findings of the Court of Appeals,
and affirm the appreciation of facts of the trial court.
It is basic that findings of facts of trial courts are accorded by
appellate courts with great, if not conclusive effect. This is because
of the unique advantage enjoyed by trial courts of observing at close
range the demeanor, deportment and conduct of witnesses as they
give their testimonies.[23] Trial courts have the unique advantage of
being able to observe that elusive and incommunicable evidence of
the witness deportment on the stand while testifying --- the brazen
face of the liar, the glibness of the schooled witness in reciting a
lesson, the itching over-eagerness of the swift witness, as well as
the honest face of the truthful one.[24] Indeed, assignment of values
to declarations on the witness stand is best done by the trial judge
who, unlike appellate magistrates, can weigh firsthand the testimony
of a witness.[25]
While there may be inaccuracies in Castrences testimony as
pointed out by the appellate court---the mention of a blown out tire,
the seating arrangement of the passengers of the rover jeep, the
color of the shirt of the deceased, and the location of all the
passengers of the jeep after it turned turtle---we deem such
discrepancies negligible considering the totality of her
testimony. Records show that she was called to the witness stand
six years after the accident happened. It is therefore understandable
that she would miss recalling some details. As we held in the recent
case of People vs. Delim:
Transpoeh 37
The inconsistencies in the testimonies of [witnesses] do not render
them incredible or their testimonies barren of probative weight. It
must be borne in mind that human memory is not as unerring as a
photograph and a persons sense of observation is impaired by many
factors A truth-telling witness is not always expected to give an
error-free testimony considering the lapse of time and the treachery
of human memory. What is primordial is that the mass of testimony
jibes on material points, the slight clashing of statements dilute
neither the witnesses credibility nor the veracity of his
testimonyInconsistencies on minor and trivial matters only serve to
strengthen rather than weaken the credibility of witnesses for they
erase the suspicion of rehearsed testimony.[26]
In her testimony, Rosie Castrence said that she saw the jeep
turn turtle in front of their bus.
Q Mrs. Witness, you testified that the PANELCO jeep
turned turtle infront of the Dagupan Bus, how
close was the Dagupan Bus to the PANELCO jeep
when you saw it turn turtle?
A About five (5) meters infront the Dagupan Bus when it
turn (sic) turtle, sir.
Q In other words, the jeep turned turtle even without
being bumped by the Dagupan Bus?
A Yes, sir.[27]
She also testified that before the jeep turned turtle she saw
that it was wiggling.
A When we were still at Barangay Tiep I have seen
already that jeep.
xxx xxx xxx
Q What did you observe if any about the jeep that you
were following?
A The jeep was already wiggling and was zigzagging
along the way.[28]
We find this testimony not only credible but also consistent with
the physical evidence as well as the testimonies of Panelcos own
employees.
Engr. Florencio Celeste, who was seated beside Henry
Tugade, testified that after the jeep turned turtle he saw that the right
wheels were detached and that the spindle was broken.
Q If it turned turtle, did you observe the jeep suffered
(sic) any mechanical defect or parts were broken?
A After the jeep turned turtle, I noticed that the right
front wheel and rear wheel of the jeep were
detached, sir.
xxx xxx xxx
Q Did you see how the wheels were detached?
A The spindle were (sic) broken, sir.[29]
Engr. Agustin Erezo, the Officer In Charge of the Motorpool of
Panelco at the time of the accident, also admitted in his testimony
that the rover jeep was merely assembled in their motorpool, thus:
Q You mentioned that the rover jeep was assembled in
February 1980, if it was assembled in February
1980, what was the condition before you
assembled? (sic)
A We put all the spare parts new, we bought all the
spare parts new, all spare parts are new.
 Q So you want to make us understand that it was
almost a junk at the time you repair it?
A We bought the chassis, the engine and everything so
all the spare parts are new.
Q At the time you repaired it in 1980 (interruption)
A I assembled it.[30]
xxx xxx xxx
Q Before you repaired it in February 1980, was it in
running condition?
A Before we repaired it, it was not in running condition,
there was no jeep before the repair, they are all
spare parts and we assembled it.[31]
The driver of the jeep and one of the defendants, Honorato
Areola, also admitted that the engine of the jeep at the time of the
accident was already old.
Q And what year Mr. Witness is the model of the rover
jeep if you really know the model of the different
vehicles?
A I already forgot, sir. It is diesel model.
Q To make specific Mr. Witness, what year was this
model, was it the model 69, 65 or what?
A I cannot remember, sir.
Q But in your experience as driver, did this rover
jeepney, new or old, at the time you drove it on
June 12, 1980.
A Quite old already, sir.
Q What about the body of the jeepney, also old like the
engine?
A The body is newly assembled, sir.[32]
Worth noting also is the admission of Engr. Celeste that the
jeep did not have a speedometer.
Q Now, you estimated the speed of the jeep at 45 to 50
kilometers per hour, because according to you you
are also a driver and you always look at the
speedometer is that correct?
A Yes, sir.
Q This rover jeep having been made, home made at the
Panelco Motor pool, did not have speedometer, is
that correct?
A It does not have speedometer, so the speedometer
does not function, sir.
Q Aside from the speedometer there were many parts
of the jeep which were not functioning is that
correct?
A All of those parts in the Panel board except its
speedometer cable.
Q And so, when you said that the jeep was running
about 45 to 50 kilometers the truth is the speed
could have been even less than 45 kilometers or
more than 50 kilometers.
A That is approximate, sir.[33]
In sum, we find that with the testimony of Castrence, the
broken spindle of the rover jeep and the admissions of Panelcos
Transpoeh 38
own employees that the jeep was merely assembled, had an old
engine, and did not have any speedometer, manifest gross
negligence on the part of Panelco and its driver Honorato Areola for
which they should be held liable to pay damages. The trial court
correctly held both Panelco and its driver liable for using an unsafe
vehicle in transporting Panelcos employees.
As provided for in the New Civil Code:
Art. 2176. Whoever by act or omission causes damage to another,
there being fault or negligence, is obliged to pay for the damage
done
Art. 2180. The obligation imposed by Article 2176 is demandable
not only for ones own acts or omissions, but also for those of
persons for whom one is responsible.
xxx xxx xxx
Employers shall be liable for the damage caused by their employees
and household helpers acting within the scope of their assigned
tasks, even though the former are not engaged in any business or
industry.
xxx xxx xxx
The responsibility treated of in this article shall cease when the
persons herein mentioned prove that they observed all the diligence
of a good father of a family to prevent damage.
Areola, as driver of the vehicle, did not personally check the
condition of the vehicle before using it.
Q And when you arrive at the Panelco compound this
jeep was already ready to be driven?
A It was in the motor pool we were checking up.
Q But you yourself did not go to the motor pool to get
the jeep?
A I just see the jeep but I did not go under the jeep, sir.
Q You mean to say that the jeep was in an elevated flat
(sic) form at the time when you saw it at the
Panelco compound being checked up?
A Its not in the elevated place but it was in the Panelco
compound, I am looking for the Chief Mechanic
checking up the jeep. I was looking at the jeep
being checked up by the Chief Mechanic, sir.
Q How many mechanics were attending this rover jeep
at the time you were looking at the jeep?
A They were many but who was looking after was the
Chief Mechanic, sir.
xxx xxx xxx
Q And these mechanics of the Panelco were helping or
attending the Chief Mechanic?
A I do not know, sir, because they were doing
something.
Q So all these persons were working on the rover jeep,
is that correct?
A No, sir.[34] (sic)
 What was admitted was the fact that it was his first time to drive
said vehicle[35] and that he did not know whether or not the vehicle
was registered at the time of the accident.
Q xxx You are aware that the rover jeep was not
registered for that year 1980, the jeep you were
driving, is that correct?
A That is what I do not know, sir.
xxx xxx xxx
Q Is it a matter of your practice, that when you drive a
vehicle you do not determine and find out anymore
whether the registration certificate is found in the
vehicle?
A I relied that the papers are complete, sir.
Q But you yourself do not examine anymore whether
the vehicle that you are driving, that you are going
to drive has with the registration certificate.
A No more, sir.[36]
Panelco meanwhile is liable both as owner of the mechanically
defective vehicle under Art. 2176 and as employer of the negligent
driver under Art. 2180.
Under Art. 2180, Panelco as employer of Areola is primarily
and solidarily liable for the quasi-delict committed by the latter. It is
presumed to be negligent in the selection and supervision of its
employees by operation of law and may be relieved of responsibility
for the negligent acts of its driver, who at the time was acting within
the scope of his assigned task, only if it can show that it observed
all the diligence of a good father of a family to prevent damage. [37]
In this case, Panelco failed to show that it exercised the
diligence of a good father of a family to prevent the damage and that
it was diligent in the selection and supervision of its employees.
Areola in his testimony admitted that he did not undergo
physical examination when he was hired as driver of the
company[38] and that there were no records of his examination and
interview during his application for employment.[39] He also admitted
that Panelco never gave them seminars regarding driving but only
received personal advice from the managers.[40]
The use of a vehicle with a defective speedometer has been
held by this Court as an indication of the owners laxity in the
operation of its business and in the supervision of its employees;
clearly, a conduct below the diligence required by law. [41] In this
case, the rover jeep of Panelco did not have a speedometer at all.
Finding both Panelco and its driver liable for the death of Henry
Tugade, we now consider the amount of damages that should be
awarded to the heirs of the deceased.
Following Art. 2206 of the Civil Code and recent jurisprudence,
the heirs of the victim in this case are automatically entitled to
P50,000.00 as indemnity for the death of Henry Tugade. [42]
Actual damages to be recoverable, must actually be proved
and supported by receipts. In this case, the petitioners failed to
present any receipt to prove the expenses they
incurred. Nonetheless, temperate damages may still be given to the
heirs of the victim under Art. 2224 of the Civil Code. [43] Based on
prevailing jurisprudence, the amount of P25,000.00 as temperate
damages is in order.[44]
We also find that petitioners are entitled to the award of
attorneys fees which is proper where the acts and omissions of a
party have compelled another to litigate or incur expenses to protect
his rights and when deemed by the court as just and
Transpoeh 39
equitable.[45] We find no cogent reason to disturb the award
of P20,000.00 as attorneys fees fixed by the trial court.
Moral damages should also be awarded for the mental
anguish and moral suffering suffered by the heirs of Henry Tugade
brought about by his untimely demise. As held by this Court, the
award of moral damages is aimed at a restoration, within the limits
possible, of the spiritual status quo ante and therefore must be
proportionate to the suffering inflicted.[46]
In this case, Napoleon Tugade, father of the deceased,
testified as follows:
Q How many children do you have?
A We have three (3), sir.
xxx xxx xxx
Q about your second child, what is his profession or
employment at present, will you name your
second child?
A He is the late Henry Tugade, an Agricultural
Engineer.
xxx xxx xxx
Q At the time you learn the death of your son Henry,
how did you feel?
A I was shocked and had a little mental torture because
its a shock that he is still young to die and
professional and he is the only one earning among
my children, so there was mental torture also to
my wife and to my family.[47]
Rizalina Tugade, mother of the victim, also testified as follows:
Q And Mrs. Witness, at the time your son died do you
know if he was a member of some civic
organizations or associations?
A During his lifetime when he was studying, when he
was student, at the Araneta Univeristy, he was the
President of the Engineers Club Society.
Q And of course as a mother, having his son that
caliber, if said Henry your son, how did you feel on
those occasions, as he was a member of some
organizations.
A I had a feeling of great pride, sir.
Q This pride enjoyed as a mother, did it continue to be
still in you as a pride enjoyed by a mother.
A Well, my pride is no more sir, he already died.
Q And when at the time you learned for the first time of
the death of your son Mrs. Witness, how did you
feel as mother.
A I was miserably shocked, sir.
Q Aside from the shock, what else.
A Well, I lost my hope, my pride and happiness.[48]
Under Art. 2206 of the Civil Code, the ascendants of the
deceased may demand moral damages for mental anguish by
reason of the death of the deceased. Under the circumstances of
the case at bar an award of P100,000.00 would be appropriate.[49]
As to indemnity for loss of earning capacity, we take note of
Exh. L-1[50] showing Henry Tugades compensation to be Eight
Hundred Three Pesos (P803.00) a month which amounts to an
annual income of P9,636.00. He was 26 years old at the time of his
death. Using the formula enunciated in People vs. Napalit,[51]we
compute his lost earning capacity thus:

Net earning capacity = 2/3 x (80-26) x [P9,636.00 (P9,636.00)]

= 2/3 x (54) x P4,818.00

= 36 x P4,818.00

= P 173,448.00

WHEREFORE, we REVERSE and SET ASIDE the decision of

the Court of Appeals; AFFIRM the decision of the Regional Trial
Court dated July 24, 1990 with the MODIFICATION that Pangasinan
Electric Cooperative, Inc. (PANELCO) and Honorato Areola are
ordered to pay jointly and severally the following amounts to the
heirs of Henry Tugade:

1. Death indemnity in the amount of Fifty Thousand

Pesos (P50,000.00);

2. Temperate damages in the amount of Twenty-Five

Thousand Pesos (P25,000.00);

3. Attorneys fees in the amount of Twenty Thousand

Pesos (P20,000.00);

4. Moral damages in the amount of One Hundred

Thousand Pesos (P100,000.00);

5. Loss of earning capacity in the amount of One

Hundred Seventy Three Thousand, Three
Hundred and Forty Eight Pesos (P173,448.00);
and

6. the costs of suit.

SO ORDERED.

Transpoeh 40