Philippine Airlines, Inc. v. Court of Appeals, G.R. No.

82619, [September 15, 1993]

Facts: On 25 November 1976 filed a complaint for damages for breach of contract of carriage against Philippine
Airlines, Inc. (PAL), before the Regional Trial Court, of Misamis Occidental, at Ozamiz City. According to him, on 2
August 1976, he was among the twenty-one (21) passengers of PAL that took off from Cebu bound for Ozamiz City.
The routing of this flight was Cebu-Ozamiz-Cotabato. While on flight and just about fifteen (15) minutes before landing
at Ozamiz City, the pilot received a radio message that the airport was closed due to heavy rains and inclement
weather and that he should proceed to Cotabato City instead.

Upon arrival at Cotabato City, the PAL Station Agent informed the passengers of their options to return to Cebu on
Flight 560 of the same day and thence to Ozamiz City on 4 August 1975, or take the next flight to Cebu the following
day, or remain at Cotabato and take the next available flight to Ozamiz City on 5 August 1975. The Station Agent
likewise informed them that Flight 560 bound for Manila would make a stop-over at Cebu to bring some of the diverted
passengers; that there were only six (6) seats available as there were already confirmed passengers for Manila; and,
that the basis for priority would be the check-in sequence at Cebu.

Private respondent chose to return to Cebu but was not accommodated because he checked-in as passenger No. 9 on
Flight 477. He insisted on being given priority over the confirmed passengers in the accommodation, but the Station
Agent refused private respondent's demand explaining that the latter's predicament was not due to PAL's own doing
but to a force majeure.

Private respondent tried to stop the departure of Flight 560 as his personal belongings, including a package containing
a camera which a certain Miwa from Japan asked him to deliver to Mrs. Fe Obid of Gingoog City, were still on board.
His plea fell on deaf ears. PAL then issued to private respondent a free ticket to Iligan City, which the latter received
under protest. 5 Private respondent was left at the airport and could not even hitch a ride in the Ford Fiera loaded with
PAL personnel. 6 PAL neither provided private respondent with transportation from the airport to the city proper nor
food and accommodation for his stay in Cotabato City.

The following day, private respondent purchased a PAL ticket to Iligan City. He informed PAL personnel that he would
not use the free ticket because he was filing a case against PAL. 7 In Iligan City, private respondent hired a car from
the airport to Kolambugan, Lanao del Norte, reaching Ozamiz City by crossing the bay in a launch. 8 His personal
effects including the camera, which were valued at P2,000.00, were no longer recovered.

On 13 January 1977, PAL filed its answer denying that it unjustifiably refused to accommodate private respondent. 9 It
alleged that there was simply no more seat for private respondent on Flight 560 since there were only six (6) seats
available and the priority of accommodation on Flight 560 was based on the check-in sequence in Cebu; that the first
six (6) priority passengers on Flight 477 chose to take Flight 560; that its Station Agent explained in a courteous and
polite manner to all passengers the reason for PAL's inability to transport all of them back to Cebu; that the stranded
passengers agreed to avail of the options and had their respective tickets exchanged for their onward trips; that it was
only the private respondent who insisted on being given priority in the accommodation; that pieces of checked-in
baggage and hand-carried items of the Ozamiz City passengers were removed from the aircraft; that the reason for the
pilot's inability to land at Ozamiz City airport was because the runway was wet due to rains thus posing a threat to the
safety of both passengers and aircraft; and, that such reason of force majeure was a valid justification for the pilot to
bypass Ozamiz City and proceed directly to Cotabato City.

Issue: Whether or not PAL's diversion of its flight due to inclement weather terminates PAL's contract with its
passengers.

Held: No. The contract of air carriage is a peculiar one. Being imbued with public interest, the law requires common
carriers 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. 20 In Air France v. Carrascoso, 21 we held that —

"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 attended with a public duty . . ." (emphasis supplied).

The position taken by PAL in this case clearly illustrates its failure to grasp the exacting standard required by law.
Undisputably, PAL's diversion of its flight due to inclement weather was a fortuitous event. Nonetheless, such
occurrence did not terminate PAL's contract with its passengers. Being in the business of air carriage and the sole one
to operate in the country, PAL is deemed equipped to deal with situations as in the case at bar. What we said in one
case once again must be stressed, i.e., the relation of carrier and passenger continues until the latter has been landed
at the port of destination and has left the carrier's premises. 22 Hence, PAL necessarily would still have to exercise
extraordinary diligence in safeguarding the comfort, convenience and safety of its stranded passengers until they have
reached their final destination. On this score, PAL grossly failed considering the then ongoing battle between
government forces and Muslim rebels in Cotabato City and the fact that the private respondent was a stranger to the
place. As the appellate court correctly ruled —

"While the failure of plaintiff in the first instance to reach his destination at Ozamis City in accordance with the contract
of carriage was due to the closure of the airport on account of rain and inclement weather which was radioed to
defendant 15 minutes before landing, it has not been disputed by defendant airline that Ozamis City has no all-weather
airport and has to cancel its flight to Ozamis City or by-pass it in the event of inclement weather. Knowing this fact, it
becomes the duty of defendant to provide all means of comfort and convenience to its passengers when they would
have to be left in a strange place in case of such by-passing. The steps taken by defendant airline company towards
this end has not been put in evidence, especially for those 7 others who were not accommodated in the return trip to
Cebu, only 6 of the 21 having been so accommodated. It appears that plaintiff had to leave on the next flight 2 days
later. If the cause of non-fulfillment of the contract is due to a fortuitous event, it has to be the sole and only cause (Art.
1755 C.C., Art. 1733 C.C.) Since part of the failure to comply with the obligation of common carrier to deliver its
passengers safely to their destination lay in the defendant's failure to provide comfort and convenience to its stranded
passengers using extra-ordinary diligence, the cause of non-fulfillment is not solely and exclusively due to fortuitous
event, but due to something which defendant airline could have prevented, defendant becomes liable to plaintiff."

While we find PAL remiss in its duty of extending utmost care to private respondent while being stranded in Cotabato
City, there is no sufficient basis to conclude that PAL failed to inform him about his non-accommodation on Flight 560,
or that it was inattentive to his queries relative thereto.

Spouses Zalamea v. Court of Appeals, G.R. No. 104235, [November 18, 1993]

Facts: 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 from 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 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 when he discovered that 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.

Issue: Whether or not the CA erred in accepting the finding that overbooking is specifically allowed by the US Code of
Federal Regulations and in holding that there was no fraud or bad faith on the part of TWA ?

Held: The CA was in error. There was fraud or bad faith on the part of TWA when it did not allow Mrs. Zalamea and
her daughter to board their flight for Los Angeles in spite of confirmed tickets. The US law or regulation allegedly
authorizing overbooking has never been proved.

1.) Foreign laws do not prove themselves nor can the court take judicial notice of them. Like any other fact, they must
be alleged and proved. Written law may be evidenced by an official publication thereof or by a copy attested by the
officers having 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 Phil. stationed in the foreign country in which the record is
kept and authenticated by the seal of his office. Here, TWA relied solely on the testimony of its customer service agent
in her deposition that the Code of Federal Regulations of the Civil Aeronautic Board allows overbooking. Aside from
said statement, no official publication of said code was presented as evidence. Thus, the CA‘s finding that overbooking
is specifically allowed by the US Code of Federal Regulations has no basis in fact.

"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. 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.
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. Since the tickets were sold and issued in the Philippines, the applicable
law in this case would be Philippine law."

Singson v. Court of Appeals, G.R. No. 119995, [November 18, 1997]

Facts: On 24 May 1988 CARLOS SINGSON and his cousin Crescentino Tiongson bought from Cathay Pacific
Airways, Ltd. (CATHAY), at its Metro Manila ticket outlet two (2) open-dated, identically routed, round trip plane tickets
for the purpose of spending their vacation in the United States. Each ticket consisted of six (6) flight coupons
corresponding to this itinerary: flight coupon no. 1 — Manila to Hongkong; flight coupon no. 2 — Hongkong to San
Francisco; flight coupon no. 3 — San Francisco to Los Angeles; flight coupon no. 4 — Los Angeles back to San
Francisco; flight coupon no. 5 — San Francisco to Hongkong; and, finally, flight coupon no. 6 — Hongkong to Manila.
The procedure was that at the start of each leg of the trip a flight coupon corresponding to the particular sector of the
travel would be removed from the ticket booklet so that at the end of the trip no more coupon would be left in the ticket
booklet.

On 6 June 1988 CARLOS SINGSON and Crescentino Tiongson left Manila on board CATHAY's Flight No. 902. They
arrived safely in Los Angeles and after staying there for about three (3) weeks they decided to return to the Philippines.
On 30 June 1988 they arranged for their return flight at CATHAY's Los Angeles Office and chose 1 July 1988, a Friday
for their departure. While Tiongson easily got a booking for the flight, SINGSON was not as lucky. It was discovered
that his ticket booklet did not have flight coupon no. 5 corresponding to the San Francisco-Hongkong leg of the trip.
Instead, what was in his ticket was flight coupon no. 3 — San Francisco to Los Angeles — which was supposed to
have been used and removed from the ticket booklet. It was not until 6 July 1988 that CATHAY was finally able to
arrange for his return flight to Manila.

On 26 August 1988 SINGSON commenced an action for damages against CATHAY before the Regional Trial Court of
Vigan, Ilocos Sur. 3 He claimed that he insisted on CATHAY's confirmation of his return flight reservation because of
very important and urgent business engagements in the Philippines. But CATHAY allegedly shrugged off his
protestations and arrogantly directed him to go to San Francisco himself and do some investigations on the matter or
purchase a new ticket subject to refund if it turned out that the missing coupon was still unused or subsisting. He
remonstrated that it was the airline's agent/representative who must have committed the mistake of tearing off the
wrong flight coupon; that he did not have enough money to buy new tickets; and, CATHAY could conclude the
investigation in a matter of minutes because of its facilities. CATHAY, allegedly in scornful insolence, simply dismissed
him like an impertinent "brown pest." Thus he and his cousin Tiongson, who deferred his own flight to accompany him,
were forced to leave for San Francisco on the night of 1 July 1988 to verify the missing ticket. prLL

CATHAY denied these allegations and averred that since petitioner was holding an "open dated" ticket, which meant
that he was not booked on a specific flight on a particular date, there was no contract of carriage yet existing such that
CATHAY's refusal to immediately book him could not be construed as breach of contract of carriage. Moreover, the
coupon had been missing for almost a month hence CATHAY must first verify its status, i.e., whether the ticket was still
valid and outstanding, before it could issue a replacement ticket to petitioner. For that purpose, it sent a request by
telex on the same day, 1 July 1988, to its Hongkong Headquarters where such information could be retrieved. 4
However, due to the time difference between Los Angeles and Hongkong, no response from the Hongkong office was
immediately received. Besides, since 2 and 3 July 1988 were a Saturday and a Sunday, respectively, and 4 July 1988
was an official holiday being U.S. Independence Day, the telex response of CATHAY Hongkong was not read until 5
July 1988. Lastly, CATHAY denied having required SINGSON to make a trip back to San Francisco; on the other hand,
it was the latter who informed CATHAY that he was making a side trip to San Francisco. Hence, CATHAY advised him
that the response of Hongkong would be copied in San Francisco so that he could conveniently verify thereat should he
wish to.

The trial court rendered a decision in favor of petitioner herein holding that CATHAY was guilty of gross negligence
amounting to malice and bad faith for which it was adjudged to pay petitioner P20,000.00 for actual damages with
interest at the legal rate of twelve percent (12%) per annum from 26 August 1988 when the complaint was filed until
fully paid, P500,000.00 for moral damages, P400,000.00 for exemplary damages, P100,000.00 for attorney's fees, and,
to pay the costs.

Issue: Whether or not a breach of contract was committed by CATHAY when it failed to confirm the booking of
petitioner for its 1 July 1988 flight.

Held: Yes. CATHAY undoubtedly committed a breach of contract when it refused to confirm petitioner's flight
reservation back to the Philippines on account of his missing flight coupon. Its contention that there was no contract of
carriage that was breached because petitioner's ticket was open-dated is untenable. To begin with, the round trip ticket
issued by the carrier to the passenger was in itself a complete written contract by and between the carrier and the
passenger. It had all the elements of a complete written contract, to wit: (a) the consent of the contracting parties
manifested by the fact that the passenger agreed to be transported by the carrier to and from Los Angeles via San
Francisco and Hongkong back to the Philippines, and the carrier's acceptance to bring him to his destination and then
back home; (b) cause or consideration, which was the fare paid by the passenger as stated in his ticket; and, (c) object,
which was the transportation of the passenger from the place of departure to the place of destination and back, which
are also stated in his ticket. 6 In fact, the contract of carriage in the instant case was already partially executed as the
carrier complied with its obligation to transport the passenger to his destination, i.e., Los Angeles. Only the
performance of the other half of the contract — which was to transport the passenger back to the Philippines — was
left to be done. Moreover, Timothy Remedios, CATHAY's reservation and ticketing agent, unequivocally testified that
petitioner indeed had reservations booked for travel.

Interestingly, it appears that CATHAY was responsible for the loss of the ticket. One of two (2) things may be surmised
from the circumstances of this case: first, US Air (CATHAY's agent) had mistakenly detached the San Francisco-
Hongkong flight coupon thinking that it was the San Francisco-Los Angeles portion; or, second, petitioner's booklet of
tickets did not from issuance include a San Francisco-Hongkong flight coupon. In either case, the loss of the coupon
was attributable to the negligence of CATHAY's agents and was the proximate cause of the non-confirmation of
petitioner's return flight on 1 July 1988. It virtually prevented petitioner from demanding the fulfillment of the carrier's
obligations under the contract. Had CATHAY's agents been diligent in double checking the coupons they were
supposed to detach from the passengers' tickets, there would have been no reason for CATHAY not to confirm
petitioner's booking as exemplified in the case of his cousin and flight companion Tiongson whose ticket booklet was
found to be in order. Hence, to hold that no contractual breach was committed by CATHAY and totally absolve it from
any liability would in effect put a premium on the negligence of its agents, contrary to the policy of the law requiring
common carriers to exercise extraordinary diligence.

Appellate court seriously erred in disallowing moral and exemplary damages. Although the rule is that moral damages
predicated upon a breach of contract of carriage may only be recoverable in instances where the mishap results in the
death of a passenger, 8 or where the carrier is guilty of fraud or bad faith, 9 there are situations where the negligence
of the carrier is so gross and reckless as to virtually amount to bad faith, in which case, the passenger likewise
becomes entitled to recover moral damages.

First, as heretofore discussed, the ticket coupon corresponding to the San Francisco-Hongkong flight was missing
either due to the negligence of CATHAY's agents in improperly detaching petitioner's flight coupons or failing to issue
the flight coupon for San Francisco-Hongkong in the ticket booklet; second, petitioner and his cousin presented their
respective ticket booklets bearing identical itineraries to prove that there had been a mistake in removing the coupons
of petitioner. Furthermore, CATHAY's Timothy Remedios testified that he was able to ascertain from his flight
reservations computer that petitioner indeed had reservations booked for travel on their return flight, but CATHAY
apparently ignored the clear evidential import of these facts and peremptorily refused to confirm petitioner's flight —
while ready to confirm his traveling companion's identically routed plane ticket on the lame and flimsy excuse that the
existence and validity of the missing ticket must first be verified; third, petitioner was directed by CATHAY to go to its
San Francisco office and make the necessary verification concerning the lost coupon himself. This, notwithstanding the
fact that CATHAY was responsible for the loss of the ticket and had all the necessary equipment, e.g., computers, fax
and telex machines and telephones which could facilitate the verification right there at its Los Angeles Office.

Lufthansa German Airlines v. Court of Appeals, G.R. No. 83612, [November 24, 1994]

Facts: Tirso V. Antiporda, Sr. was an associate director of the Central Bank of the Philippines and a registered
consultant of the Asian Development Bank, the World Bank and the UNDP. He was, contracted by Sycip, Gorres,
Velayo & Co. (SGV) to be the institutional financial specialist for the agricultural credit institution project of the
Investment and Development Bank of Malawi in Africa. According to the letter of August 30, 1984 addressed to
Antiporda from J.F. Singson of SGV, he would render his services to the Malawi bank as an independent contractor for
which he would be paid US$9,167 for a 50-day period commencing sometime in September 1984. For the
engagement, Antiporda would be provided one round-trip economy ticket from Manila to Blantyre and back with a
maximum travel time of four days per round-trip and, in addition, a travel allowance of $50 per day, a travel insurance
coverage of P100,000 and major hospitalization with AFIA and an accident insurance coverage of P150,000. On
September 17, 1984, Lufthansa, through SGV, issued ticket No. 3477712678 for Antiporda's confirmed flights to
Malawi, Africa.

Thus, on September 25, 1984, Antiporda took the Lufthansa flight to Singapore from where he proceeded to Bombay
on board the same airline. He arrived in Bombay as scheduled and waited at the transit area of the airport for his
connecting flight to Nairobi which was, per schedule given him by Lufthansa, to leave Bombay in the morning of
September 26, 1984. Finding no representative of Lufthansa waiting for him at the gate, Antiporda asked the duty
officer of Air India how he could get in touch with Lufthansa. He was told to call up Lufthansa which informed him that
somebody would attend to him shortly.

Ten minutes later, Gerard Matias, Lufthansa's traffic officer, arrived, asked for Antiporda's ticket and told him to just sit
down and wait. Matias returned with one Leslie Benent, duty officer of Lufthansa, who informed Antiporda that his seat
in Air Kenya Flight 203 to Nairobi had been given to a very important person of Bombay who was attending a religious
function in Nairobi. Antiporda protested, stressing that he had an important professional engagement in Blantyre,
Malawi in the afternoon of September 26, 1984. He requested that the situation be remedied but Air Kenya Flight 203
left for Nairobi without him on board. Stranded in Bombay, Antiporda was booked for Nairobi via Addis Ababa only on
September 27, 1984. He finally arrived in Blantyre at 9:00 o'clock in the evening of September 28, 1984, more than a
couple of days late for his appointment with people from the institution he was to work with in Malawi.

Consequently, on January 8, 1985, Antiporda's counsel wrote the general manager of Lufthansa in Manila demanding
P1,000,000 in damages for the airline's "malicious, wanton, disregard of the contract of carriage."2 In reply, Lufthansa
general manager Hagen Keilich assured Antiporda that the matter would be investigated.

Explained the Court of Appeals: although the contract of carriage was to be performed by several air carriers, the same
is to be treated as a single operation conducted by Lufthansa because Antiporda dealt exclusively with it which issued
him a Lufthansa ticket for the entire trip. By issuing a confirmed ticket, Lufthansa in effect guaranteed Antiporda a sure
seat with Air Kenya. Private respondent Antiporda, maintained the Court of Appeals, had the right to expect that his
ticket would be honored by Air Kenya which, in the legal sense, Lufthansa had endorsed and, in effect, guaranteed the
performance of its principal engagement to carry out his five-leg trip.

Lufthansa maintains that its liability to any passenger is limited to occurrences in its own line, and, thus, in the case at
bench, its liability to Antiporda is limited to the extent that it had transported him from Manila to Singapore and from
Singapore to Bombay; that therefrom, responsibility for the performance of the contract of carriage is assumed by the
succeeding carriers tasked to transport him for the remaining leg of his trip because at that stage, its contract of
carriage with Antiporda ceases, with Lufthansa acting, no longer as the principal in the contract of carriage, but merely
as a ticket-issuing agent for the other carriers.

In further advancing this line of defense, Lufthansa invoked Section 2, Article 30 of the Warsaw Convention 9 which
expressly stipulates that in cases where the transportation of passengers or goods is performed by various successive
carriers, the passenger can take action only against the carrier which performed the transportation, during which the
accident or delay occurred. Lufthansa further advanced the theory that this provision of the Warsaw Convention is
applicable to the present case, contrary to the decision of the Court of Appeals which relied on the Supreme Court
ruling in KLM Royal Dutch Lines. 10 For Lufthansa, "bumping-off" is considered delay since delay would inevitably
result therefrom. It implored this Court to re-examine our ruling in KLM and take heed of jurisprudence 11 in the U.S.
where "delay," unlike in our ruling in KLM, contemplates the instance of "bumping-off." In KLM, we held that the term
"delay" does not encompass the instance of "bumping-off," the latter having been defined as refusal to carry or
transport a passenger.

On his part, private respondent Antiporda insists that he entered with Lufthansa an exclusivee contract of carriage, the
nature of which is a continuous carriage by air from Manila to Blantyre Malawi; that it did not enter into a series of
independent contracts with the carriers that transported him for the remaining leg of his trip.

Issue: Was there a breach of obligation by the defendant in failing to transport the plaintiff from Manila to Blantyre,
Malawi, Africa.

Held: Yes. As ruled by the trial court, with the Court of Appeals concurring favorably, Antiporda was issued a confirmed
Lufthansa ticket all throughout the five-leg trip. The fourth paragraph of the "Conditions of Contract" stipulated in the
ticket indubitably showed that the contract of carriage was considered as one of continuous air transportation from
Manila to Blantyre, Malawi, thus: "4. . . . carriage to be performed hereunder by several successive carriers is regarded
as a single operation." In light of the stipulations expressly specified in the ticket defining the true nature of its contract
of carriage with Antiporda, Lufthansa cannot claim that its liability thereon ceased at Bombay Airport and thence,
shifted to the various carriers that assumed the actual task of transporting said private respondent. We, therefore,
reject Lufthansa's theory that from the time another carrier was engaged to transport Antiporda on another segment of
his trip, it merely acts as a ticket-issuing agent in behalf of said carrier. In the very nature of their contract, Lufthansa is
clearly the principal in the contract of carriage with Antiporda and remains to be so, regardless of those instances when
actual carriage was to be performed by various carriers. The issuance of a confirmed Lufthansa ticket in favor of
Antiporda covering his entire five-leg trip aboard successive carriers concretely attests to this. This also serves as proof
that Lufthansa, in effect guaranteed that the successive carriers, such as air Kenya would honor his ticket; assure him
of a space therein and transport him on a particular segment of his trip. This ruling finds corroboration in the Supreme
Court decision in KLM, where the same issues were confronted.

On the issue of whether the Warsaw Convention, particularly Section 2, Article 30 thereof is applicable herein,
we agree with the Court of Appeals in ruling in the negative. We reiterate what has been settled in KLM: "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 manifest, instead, is that the Aer Lingus, through its manager there, refused to transport the respondents to
their planned and contracted destination. . . ." Consequently, Section 2, Article 30 of the Warsaw Convention which
does not contemplate the instance of "bumping-off" but merely of simple delay, cannot provide a handy excuse for
Lufthansa as to exculpate it from any liability to Antiporda. The payment of damages is, thus, deemed warranted by this
Court. We find no reversible error in the lower court's award of moral and exemplary damages, including attorney's fees
in favor of Antiporda.

Lufthansa prays this court to take heed of jurisprudence in the United States where the term "delay" was interpreted to
include "bumping-off" or failure to carry a passenger with a confirmed reservation. These decisions in the United States
are not controlling in this jurisdiction. We are not prepared, absent reasons of compelling nature, to entertain an
extended meaning of the term "delay," which in KLM was given its ordinary signification. "Construction and
interpretation come only after it has been demonstrated that application is impossible or inadequate without them. The
ordinary language of a statute must be given its ordinary meaning and limited to a reasonable interpretation." In its
ordinary sense, "delay" means to prolong the time of or before; to stop, detain or hinder for a time, or cause someone
or something to be behind in schedule or usual rate of movement in progress. "Bumping-off," which is the refusal to
transport passengers with confirmed reservation to their planned and contracted destinations, totally forecloses said
passengers' right to be transported, whereas delay merely postpones for a time being the enforcement of such right.

Clearly, bad faith attended the performance of the contract of carriage, for even while Antiporda was in Bombay,
representatives of Lufthansa already tried to evade liability first, by claiming that the contract of carriage between
Lufthansa and Antiporda ceased at Bombay airport, in disregard of the fact that Antiporda was holding a Lufthansa
ticket for the entire five-leg trip; second, despite Berndt Loewe's knowledge that Antiporda's seat was allowed to be
given to another passenger, the same suppressed the information and feigned ignorance of the matter, presenting
altogether another reason why Antiporda was not listed in the manifest, i.e. that Air Kenya Boeing 707 was
overbooked, notwithstanding clear proof that Lufthansa in Manila confirmed his reservation for said flight. Antiporda is
likewise entitled to the award of exemplary damages on the basis of Article 2232 of the Civil Code.

Federal Express Corp. v. American Home Assurance Company, G.R. No. 150094, [August 18, 2004]

Facts: On January 26, 1994, SMITHKLINE Beecham (SMITHKLINE for brevity) of Nebraska, USA delivered to
Burlington Air Express (BURLINGTON), an agent of [Petitioner] Federal Express Corporation, a shipment of 109
cartons of veterinary biologicals for delivery to consignee SMITHKLINE and French Overseas Company in Makati City,
Metro Manila. The shipment was covered by Burlington Airway Bill No. 11263825 with the words, ‗REFRIGERATE
WHEN NOT IN TRANSIT‘ and ‗PERISHABLE‘ stamp marked on its face. That same day, Burlington insured the
cargoes in the amount of $39,339.00 with American Home Assurance Company (AHAC). The following day, Burlington
turned over the custody of said cargoes to Federal Express which transported the same to Manila. The first shipment,
consisting of 92 cartons arrived in Manila on January 29, 1994 in Flight No. 0071-28NRT and was immediately stored
at [Cargohaus Inc.‘s] warehouse. While the second, consisting of 17 cartons, came in two (2) days later, or on January
31, 1994, in Flight No. 0071-30NRT which was likewise immediately stored at Cargohaus‘ warehouse. Prior to the
arrival of the cargoes, Federal Express informed GETC Cargo International Corporation, the customs broker hired by
the consignee to facilitate the release of its cargoes from the Bureau of Customs, of the impending arrival of its client‘s
cargoes. CDaSAE

―On February 10, 1994, DARIO C. DIONEDA (‗DIONEDA‘), twelve (12) days after the cargoes arrived in Manila, a non-
licensed custom‘s broker who was assigned by GETC to facilitate the release of the subject cargoes, found out, while
he was about to cause the release of the said cargoes, that the same [were] stored only in a room with two (2) air
conditioners running, to cool the place instead of a refrigerator. When he asked an employee of Cargohaus why the
cargoes were stored in the ‗cool room‘ only, the latter told him that the cartons where the vaccines were contained
specifically indicated therein that it should not be subjected to hot or cold temperature. Thereafter, DIONEDA, upon
instructions from GETC, did not proceed with the withdrawal of the vaccines and instead, samples of the same were
taken and brought to the Bureau of Animal Industry of the Department of Agriculture in the Philippines by SMITHKLINE
for examination wherein it was discovered that the ‗ELISA reading of vaccinates sera are below the positive reference
serum.‘

―As a consequence of the foregoing result of the veterinary biologics test, SMITHKLINE abandoned the shipment and,
declaring ‗total loss‘ for the unusable shipment, filed a claim with AHAC through its representative in the Philippines,
the Philam Insurance Co., Inc. (‗PHILAM‘) which recompensed SMITHKLINE for the whole insured amount of THIRTY
NINE THOUSAND THREE HUNDRED THIRTY NINE DOLLARS ($39,339.00). Thereafter, [respondents] filed an
action for damages against the [petitioner] imputing negligence on either or both of them in the handling of the cargo.

Issue: Whether or not FEDEX liable for damage to or loss of the insured goods

Held: Basic is the requirement that before suing to recover loss of or damage to transported goods, the plaintiff must
give the carrier notice of the loss or damage, within the period prescribed by the Warsaw Convention and/or the airway
bill.

From the initial proceedings in the trial court up to the present, petitioner has tirelessly pointed out that respondents‘
claim and right of action are already barred. Indeed, this fact has never been denied by respondents and is plainly
evident from the records.

Airway Bill No. 11263825, issued by Burlington as agent of petitioner, states:

―6. No action shall be maintained in the case of damage to or partial loss of the shipment unless a written notice,
sufficiently describing the goods concerned, the approximate date of the damage or loss, and the details of the claim, is
presented by shipper or consignee to an office of Burlington within (14) days from the date the goods are placed at the
disposal of the person entitled to delivery, or in the case of total loss (including non-delivery) unless presented within
(120) days from the date of issue of the [Airway Bill]. xxx

Relevantly, petitioner‘s airway bill states:

―12./12.1 The person entitled to delivery must make a complaint to the carrier in writing in the case:
12.1.1 of visible damage to the goods, immediately after discovery of the damage and at the latest within fourteen (14)
days from receipt of the goods; xxx

Article 26 of the Warsaw Convention, on the other hand, provides:

Xxx (2) In case of damage, the person entitled to delivery must complain to the carrier forthwith after the discovery of
the damage, and, at the latest, within 3 days from the date of receipt in the case of baggage and 7 days from the date
of receipt in the case of goods. xx
(3) Every complaint must be made in writing upon the document of transportation or by separate notice in writing
dispatched within the times aforesaid.
(4) Failing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his
part.‖ xxx

Condition Precedent
In this jurisdiction, the filing of a claim with the carrier within the time limitation therefor actually constitutes a condition
precedent to the accrual of a right of action against a carrier for loss of or damage to the goods. The shipper or
consignee must allege and prove the fulfillment of the condition. If it fails to do so, no right of action against the carrier
can accrue in favor of the former. The aforementioned requirement is a reasonable condition precedent; it does not
constitute a limitation of action.

The requirement of giving notice of loss of or injury to the goods is not an empty formalism. The fundamental reasons
for such a stipulation are (1) to inform the carrier that the cargo has been damaged, and that it is being charged with
liability therefor; and (2) to give it an opportunity to examine the nature and extent of the injury. ―This protects the
carrier by affording it an opportunity to make an investigation of a claim while the matter is fresh and easily investigated
so as to safeguard itself from false and fraudulent claims.

NOTES: as to proper payee:

The Certificate specifies that loss of or damage to the insured cargo is ―payable to order x x x upon surrender of this
Certificate.‖ Such wording conveys the right of collecting on any such damage or loss, as fully as if the property were
covered by a special policy in the name of the holder itself. At the back of the Certificate appears the signature of the
representative of Burlington. This document has thus been duly indorsed in blank and is deemed a bearer instrument.

Since the Certificate was in the possession of Smithkline, the latter had the right of collecting or of being indemnified for
loss of or damage to the insured shipment, as fully as if the property were covered by a special policy in the name of
the holder. Hence, being the holder of the Certificate and having an insurable interest in the goods, Smithkline was the
proper payee of the insurance proceeds.

Subrogation
Upon receipt of the insurance proceeds, the consignee (Smithkline) executed a subrogation Receipt in favor of
respondents. The latter were thus authorized ―to file claims and begin suit against any such carrier, vessel, person,
corporation or government.‖ Undeniably, the consignee had a legal right to receive the goods in the same condition it
was delivered for transport to petitioner. If that right was violated, the consignee would have a cause of action against
the person responsible therefor.

KLM Royal Dutch Airlines v. Court of Appeals, G.R. No. L-31150, [July 22, 1975]

Facts: 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. 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 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".

When they were in Germany, they went to the KLM office and obtained a confirmation from Aer Lingus. At the airport in
Barcelona, the Mendozas and their companions checked in for their flight to Lourdes. However, although their daughter
and niece were allowed to take the flight, the spouses Mendozas were off loaded on orders of the Aer Lingus manager,
who brusquely shoved them 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. So the spouses Mendoza took a train ride to Lourdes instead.
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.

Issue: Whether or not KLM is liable for breach of contract?

Held: 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 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.

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.

Lhuillier v. British Airways, G.R. No. 171092, [March 15, 2010]

Facts: Edna Diago Lhuillier filed a Complaint 2 for damages against respondent British Airways before the Regional
Trial Court (RTC) of Makati City. She alleged that on February 28, 2005, she took respondent's flight 548 from London,
United Kingdom to Rome, Italy. Once on board, she allegedly requested Julian Halliday (Halliday), one of the
respondent's flight attendants, to assist her in placing her hand-carried luggage in the overhead bin. However, Halliday
allegedly refused to help and assist her, and even sarcastically remarked that "If I were to help all 300 passengers in
this flight, I would have a broken back!"
Petitioner further alleged that when the plane was about to land in Rome, Italy, another flight attendant, Nickolas
Kerrigan (Kerrigan), singled her out from among all the passengers in the business class section to lecture on plane
safety. Allegedly, Kerrigan made her appear to the other passengers to be ignorant, uneducated, stupid, and in need of
lecturing on the safety rules and regulations of the plane. Affronted, petitioner assured Kerrigan that she knew the
plane's safety regulations being a frequent traveler. Thereupon, Kerrigan allegedly thrust his face a mere few
centimeters away from that of the petitioner and menacingly told her that "We don't like your attitude."
Upon arrival in Rome, petitioner complained to respondent's ground manager and demanded an apology. However, the
latter declared that the flight stewards were "only doing their job."

Thus, petitioner filed the complaint for damages, praying that respondent be ordered to pay P5 million as moral
damages, P2 million as nominal damages, P1 million as exemplary damages, P300,000.00 as attorney's fees,
P200,000.00 as litigation expenses, and cost of the suit.

On May 16, 2005, summons, together with a copy of the complaint, was served on the respondent through Violeta
Echevarria, General Manager of Euro-Philippine Airline Services, Inc.
On May 30, 2005, respondent, by way of special appearance through counsel, filed a Motion to Dismiss 4 on grounds
of lack of jurisdiction over the case and over the person of the respondent. Respondent alleged that only the courts of
London, United Kingdom or Rome, Italy, have jurisdiction over the complaint for damages pursuant to the Warsaw
Convention, 5 Article 28 (1) of which provides: An action for damages must be brought at the option of the plaintiff,
either before the court of domicile of the carrier or his principal place of business, or where he has a place of business
through which the contract has been made, or before the court of the place of destination.

Thus, since a) respondent is domiciled in London; b) respondent's principal place of business is in London; c) petitioner
bought her ticket in Italy (through Jeepney Travel S.A.S. in Rome); 6 and d) Rome, Italy is petitioner's place of
destination, then it follows that the complaint should only be filed in the proper courts of London, United Kingdom or
Rome, Italy.

Likewise, it was alleged that the case must be dismissed for lack of jurisdiction over the person of the respondent
because the summons was erroneously served on Euro-Philippine Airline Services, Inc. which is not its resident agent
in the Philippines.

On June 3, 2005, the trial court issued an Order requiring herein petitioner to file her Comment/Opposition on the
Motion to Dismiss within 10 days from notice thereof, and for respondent to file a Reply thereon. 7 Instead of filing a
Comment/Opposition, petitioner filed on June 27, 2005, an Urgent Ex-Parte Motion to Admit Formal Amendment to the
Complaint and Issuance of Alias Summons. 8 Petitioner alleged that upon verification with the Securities and Exchange
Commission, she found out that the resident agent of respondent in the Philippines is Alonzo Q. Ancheta.
Subsequently, on September 9, 2005, petitioner filed a Motion to Resolve Pending Incident and Opposition to Motion to
Dismiss.

Issue: Whether or not PHILIPPINE COURTS HAVE JURISDICTION OVER A TORTIOUS CONDUCT COMMITTED
AGAINST A FILIPINO CITIZEN AND RESIDENT BY AIRLINE PERSONNEL OF A FOREIGN CARRIER
TRAVELLING BEYOND THE TERRITORIAL LIMIT OF ANY FOREIGN COUNTRY; AND THUS IS OUTSIDE THE
AMBIT OF THE WARSAW CONVENTION.

Held: Yes. The Warsaw Convention has the force and effect of law in this country.

It is settled that the Warsaw Convention has the force and effect of law in this country. In Santos III v. Northwest Orient
Airlines, 12 we held that:
The Republic of the Philippines is a party to the Convention for the Unification of Certain Rules Relating to
International Transportation by Air, otherwise known as the Warsaw Convention. It took effect on February 13, 1933.
The Convention was concurred in by the Senate, through its Resolution No. 19, on May 16, 1950. The Philippine
instrument of accession was signed by President Elpidio Quirino on October 13, 1950, and was deposited with the
Polish government on November 9, 1950. The Convention became applicable to the Philippines on February 9, 1951.
On September 23, 1955, President Ramon Magsaysay issued Proclamation No. 201, declaring our formal adherence
thereto, "to the end that the same and every article and clause thereof may be observed and fulfilled in good faith by
the Republic of the Philippines and the citizens thereof."

The Convention is thus a treaty commitment voluntarily assumed by the Philippine government and, as such, has the
force and effect of law in this country.
The Warsaw Convention applies because the air travel, where the alleged tortious conduct occurred, was between the
United Kingdom and Italy, which are both signatories to the Warsaw Convention.

Article 1 of the Warsaw Convention provides:

1. This Convention applies to all international carriage of persons, luggage or goods performed by aircraft for reward. It
applies equally to gratuitous carriage by aircraft performed by an air transport undertaking.
2. For the purposes of this Convention the expression "international carriage" means any carriage in which, according
to the contract made by the parties, the place of departure and the place of destination, whether or not there be a break
in the carriage or a transhipment, are situated either within the territories of two High Contracting Parties, or within the
territory of a single High Contracting Party, if there is an agreed stopping place within a territory subject to the
sovereignty, suzerainty, mandate or authority of another Power, even though that Power is not a party to this
Convention. A carriage without such an agreed stopping place between territories subject to the sovereignty,
suzerainty, mandate or authority of the same High Contracting Party is not deemed to be international for the purposes
of this Convention.

Thus, when the place of departure and the place of destination in a contract of carriage are situated within the
territories of two High Contracting Parties, said carriage is deemed an "international carriage". The High Contracting
Parties referred to herein were the signatories to the Warsaw Convention and those which subsequently adhered to it.

In the case at bench, petitioner's place of departure was London, United Kingdom while her place of destination was
Rome, Italy. 15 Both the United Kingdom 16 and Italy 17 signed and ratified the Warsaw Convention. As such, the
transport of the petitioner is deemed to be an "international carriage" within the contemplation of the Warsaw
Convention.

Since the Warsaw Convention applies in the instant case, then the jurisdiction over the subject matter of the action is
governed by the provisions of the Warsaw Convention.

Under Article 28 (1) of the Warsaw Convention, the plaintiff may bring the action for damages before —
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business; SECcIH
3. the court where the carrier has an establishment by which the contract has been made; or
4. the court of the place of destination.

In this case, it is not disputed that respondent is a British corporation domiciled in London, United Kingdom with London
as its principal place of business. Hence, under the first and second jurisdictional rules, the petitioner may bring her
case before the courts of London in the United Kingdom. In the passenger ticket and baggage check presented by both
the petitioner and respondent, it appears that the ticket was issued in Rome, Italy. Consequently, under the third
jurisdictional rule, the petitioner has the option to bring her case before the courts of Rome in Italy. Finally, both the
petitioner and respondent aver that the place of destination is Rome, Italy, which is properly designated given the
routing presented in the said passenger ticket and baggage check. Accordingly, petitioner may bring her action before
the courts of Rome, Italy. We thus find that the RTC of Makati correctly ruled that it does not have jurisdiction over the
case filed by the petitioner.

Philippine Airlines, Inc. v. Savillo, G.R. No. 149547, [July 4, 2008]

Facts: Private respondent was invited to participate in the 1993 ASEAN Seniors Annual Golf Tournament held in
Jakarta, Indonesia. He and several companions decided to purchase their respective passenger tickets from PAL with
the following points of passage: MANILA-SINGAPORE-JAKARTA-SINGAPORE-MANILA. Private respondent and his
companions were made to understand by PAL that its plane would take them from Manila to Singapore, while
Singapore Airlines would take them from Singapore to Jakarta. 4 TAcSCH

On 3 October 1993, private respondent and his companions took the PAL flight to Singapore and arrived at about 6:00
o'clock in the evening. Upon their arrival, they proceeded to the Singapore Airlines office to check-in for their flight to
Jakarta scheduled at 8:00 o'clock in the same evening. Singapore Airlines rejected the tickets of private respondent
and his group because they were not endorsed by PAL. It was explained to private respondent and his group that if
Singapore Airlines honored the tickets without PAL's endorsement, PAL would not pay Singapore Airlines for their
passage. Private respondent tried to contact PAL's office at the airport, only to find out that it was closed. 5

Stranded at the airport in Singapore and left with no recourse, private respondent was in panic and at a loss where to
go; and was subjected to humiliation, embarrassment, mental anguish, serious anxiety, fear and distress. Eventually,
private respondent and his companions were forced to purchase tickets from Garuda Airlines and board its last flight
bound for Jakarta. When they arrived in Jakarta at about 12:00 o'clock midnight, the party who was supposed to fetch
them from the airport had already left and they had to arrange for their transportation to the hotel at a very late hour.
After the series of nerve-wracking experiences, private respondent became ill and was unable to participate in the
tournament. 6

Upon his return to the Philippines, private respondent brought the matter to the attention of PAL. He sent a demand
letter to PAL on 20 December 1993 and another to Singapore Airlines on 21 March 1994. However, both airlines
disowned liability and blamed each other for the fiasco. On 15 August 1997, private respondent filed a Complaint for
Damages before the RTC docketed as Civil Case No. 23773, seeking compensation for moral damages in the amount
of P1,000,000.00 and attorney's fees. 7

Instead of filing an answer to private respondent's Complaint, PAL filed a Motion to Dismiss 8 dated 18 September
1998 on the ground that the said complaint was barred on the ground of prescription under Section 1 (f) of Rule 16 of
the Rules of Court. 9 PAL argued that the Warsaw Convention, 10 particularly Article 29 thereof, 11 governed this
case, as it provides that any claim for damages in connection with the international transportation of persons is subject
to the prescription period of two years. Since the Complaint was filed on 15 August 1997, more than three years after
PAL received the demand letter on 25 January 1994, it was already barred by prescription.

On 9 June 1998, the RTC issued an Order 12 denying the Motion to Dismiss. It maintained that the provisions of the
Civil Code and other pertinent laws of the Philippines, not the Warsaw Convention, were applicable to the present
case.

The Court of Appeals, in its assailed Decision dated 17 August 2001, likewise dismissed the Petition for Certiorari filed
by PAL and affirmed the 9 June 1998 Order of the RTC. It pronounced that the application of the Warsaw Convention
must not be construed to preclude the application of the Civil Code and other pertinent laws. By applying Article 1144
of the Civil Code, 13 which allowed for a ten-year prescription period, the appellate court declared that the Complaint
filed by private respondent should not be dismissed.

Issue: Whether or not PROVISIONS OF THE WARSAW SHOULD BE APPLIED CONVENTION DESPITE THE
FACT THAT GRIÑO'S CAUSE OF ACTION AROSE FROM A BREACH OF CONTRACT FOR INTERNATIONAL AIR
TRANSPORT.

Held: NO. If the Warsaw Convention covers all of private respondent's claims, then Civil Case No. 23773 has already
prescribed and should therefore be dismissed. On the other hand, if some, if not all, of respondent's claims are outside
the coverage of the Warsaw Convention, the RTC may still proceed to hear the case.

The Warsaw Convention applies to "all international transportation of persons, baggage or goods performed by any
aircraft for hire." It seeks to accommodate or balance the interests of passengers seeking recovery for personal injuries
and the interests of air carriers seeking to limit potential liability. It employs a scheme of strict liability favoring
passengers and imposing damage caps to benefit air carriers. The cardinal purpose of the Warsaw Convention is to
provide uniformity of rules governing claims arising from international air travel; thus, it precludes a passenger from
maintaining an action for personal injury damages under local law when his or her claim does not satisfy the conditions
of liability under the Convention. 17

Article 19 of the Warsaw Convention provides for liability on the part of a carrier for "damages occasioned by delay in
the transportation by air of passengers, baggage or goods." Article 24 excludes other remedies by further providing that
"(1) in the cases covered by articles 18 and 19, any action for damages, however founded, can only be brought subject
to the conditions and limits set out in this convention." Therefore, a claim covered by the Warsaw Convention can no
longer be recovered under local law, if the statute of limitations of two years has already lapsed.

Nevertheless, this Court notes that jurisprudence in the Philippines and the United States also recognizes that the
Warsaw Convention does not "exclusively regulate" the relationship between passenger and carrier on an international
flight. This Court finds that the present case is substantially similar to cases in which the damages sought were
considered to be outside the coverage of the Warsaw Convention.

In United Airlines v. Uy, 18 this Court distinguished between the (1) damage to the passenger's baggage and (2)
humiliation he suffered at the hands of the airline's employees. The first cause of action was covered by the Warsaw
Convention which prescribes in two years, while the second was covered by the provisions of the Civil Code on torts,
which prescribes in four years.
In the case at hand, Singapore Airlines barred private respondent from boarding the Singapore Airlines flight because
PAL allegedly failed to endorse the tickets of private respondent and his companions, despite PAL's assurances to
respondent that Singapore Airlines had already confirmed their passage. While this fact still needs to be heard and
established by adequate proof before the RTC, an action based on these allegations will not fall under the Warsaw
Convention, since the purported negligence on the part of PAL did not occur during the performance of the contract of
carriage but days before the scheduled flight. Thus, the present action cannot be dismissed based on the statute of
limitations provided under Article 29 of the Warsaw Convention.

Had the present case merely consisted of claims incidental to the airlines' delay in transporting their passengers, the
private respondent's Complaint would have been time-barred under Article 29 of the Warsaw Convention. However, the
present case involves a special species of injury resulting from the failure of PAL and/or Singapore Airlines to transport
private respondent from Singapore to Jakarta — the profound distress, fear, anxiety and humiliation that private
respondent experienced when, despite PAL's earlier assurance that Singapore Airlines confirmed his passage, he was
prevented from boarding the plane and he faced the daunting possibility that he would be stranded in Singapore Airport
because the PAL office was already closed. ASHaTc

These claims are covered by the Civil Code provisions on tort, and not within the purview of the Warsaw Convention.
Hence, the applicable prescription period is that provided under Article 1146 of the Civil Code:

Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict.

Private respondent's Complaint was filed with the RTC on 15 August 1997, which was less than four years since PAL
received his extrajudicial demand on 25 January 1994. Thus, private respondent's claims have not yet prescribed and
PAL's Motion to Dismiss must be denied.
Moreover, should there be any doubt as to the prescription of private respondent's Complaint, the more prudent action
is for the RTC to continue hearing the same and deny the Motion to Dismiss. Where it cannot be determined with
certainty whether the action has already prescribed or not, the defense of prescription cannot be sustained on a mere
motion to dismiss based on what appears to be on the face of the complaint. And where the ground on which
prescription is based does not appear to be indubitable, the court may do well to defer action on the motion to dismiss
until after trial on the merits.

Air France v. Gillego, G.R. No. 165266, [December 15, 2010]

Facts: Sometime in April 1993, respondent Bonifacio H. Gillego, 3 then incumbent Congressman of the Second District
of Sorsogon and Chairman of the House of Representatives Committee on Civil, Political and Human Rights, was
invited to participate as one of the keynote speakers at the 89th Inter-Parliamentary Conference Symposium on
Parliament Guardian of Human Rights to be held in Budapest, Hungary and Tokyo, Japan from May 19 to 22, 1993.
The Philippines is a member of the Inter-Parliamentary Union which organized the event.

On May 16, 1993, respondent left Manila on board petitioner Air France's aircraft bound for Paris, France. He
arrived in Paris early morning of May 17, 1993 (5:00 a.m.). While waiting at the De' Gaulle International Airport for his
connecting flight to Budapest scheduled at 3:15 p.m. that same day, respondent learned that petitioner had another
aircraft bound for Budapest with an earlier departure time (10:00 a.m.) than his scheduled flight. He then went to
petitioner's counter at the airport and made arrangements for the change in his booking. He was given a corresponding
ticket and boarding pass for Flight No. 2024 and also a new baggage claim stub for his checked-in luggage.

However, upon arriving in Budapest, respondent was unable to locate his luggage at the claiming section. He
sought assistance from petitioner's counter at the airport where petitioner's representative verified from their computer
that he had indeed a checked-in luggage. He was advised to just wait for his luggage at his hotel and that petitioner's
representatives would take charge of delivering the same to him that same day. But said luggage was never delivered
by petitioner's representatives despite follow-up inquiries by respondent.

Upon his return to the Philippines, respondent's lawyer immediately wrote petitioner's Station Manager
complaining about the lost luggage and the resulting damages he suffered while in Budapest. Respondent claimed that
his single luggage contained his personal effects such as clothes, toiletries, medicines for his hypertension, and the
speeches he had prepared, including the notes and reference materials he needed for the conference. He was thus left
with only his travel documents, pocket money and the clothes he was wearing. Because petitioner's representatives in
Budapest failed to deliver his luggage despite their assurances and his repeated follow-ups, respondent was forced to
shop for personal items including new clothes and his medicines. Aside from these unnecessary expenditures of about
$1,000, respondent had to prepare another speech, in which he had difficulty due to lack of data and information.
Respondent thus demanded the sum of P1,000,000.00 from the petitioner as compensation for his loss, inconvenience
and moral damages. Petitioner, however, continued to ignore respondent's repeated follow-ups regarding his lost
luggage.

On July 13, 1993, respondent filed a complaint for damages against the petitioner alleging that by reason of its
negligence and breach of obligation to transport and deliver his luggage, respondent suffered inconvenience, serious
anxiety, physical suffering and sleepless nights. It was further alleged that due to the physical, mental and emotional
strain resulting from the loss of his luggage, aggravated by the fact that he failed to take his regular medication,
respondent had to be taken to a medical clinic in Tokyo, Japan for emergency treatment.

Petitioner contended that its liability for lost checked-in baggage is governed by the Warsaw Convention for the
Unification of Certain Rules Relating to International Carriage. Under the said treaty, petitioner's liability for lost or
delayed registered baggage of respondent is limited to 250 francs per kilogram or US$20.00, which constitutes
liquidated damages and hence respondent is not entitled to any further damage. Petitioner averred that it has taken all
necessary measures to avoid loss of respondent's baggage, the contents of which respondent did not declare, and that
it has no intent to cause such loss, much less knew that such loss could occur.

The trial court awarded P1,000,000.00 as moral damages; P500,000.00 as exemplary damages and P50,000.00 as
attorney‘s fees to the plaintiff. This was affirmed by the Court of Appeals.

Air France sought relief before the Supreme Court, arguing that the award of ―extravagant sums to respondent that
already tend to punish the petitioner and enrich the respondent, which is not the function at all of moral damages‖ and
that ―the damages awarded are definitely not proportionate or commensurate to the wrong or injury supposedly
inflicted.‖ The plaintiff was after all an expert in the field of human rights who could have delivered his speech even
without his notes.

Issue: What is the liabilityof airlines have for lost luggage, particularly in terms of moral damages due to a passenger

Held: The petition was found to be partly meritorious. The Supreme Court held that being a ―business intended to
serve the travelling public primarily, a contract of carriage is imbued with public interest.‖ ―Article 1735 of the Civil Code
provides that in case of lost or damaged goods, common carriers are presumed to have been at fault or to have acted
negligently, unless they prove that they observed extraordinary diligence as required by Article 1733. Thus, in an
action based on a breach of contract of carriage, the aggrieved party does not have to prove that the common carrier
was at fault or was negligent. All that he has to prove is the existence of the contract and the fact of its non-
performance by the carrier.‖ [emphasis supplied]

There is no dispute that the checked-in luggage was not found upon arrival at plaintiff‘s destination and was only
returned two years later. The action is founded on the breach of the contract of carriage with Air France unable to offer
any satisfactory explanation for the unreasonable delay in the delivery of the baggage. Since the presumption of
negligence was not overcome, liability for the delay was established. Upon recovery of the baggage during trial, the
plaintiff no longer pressed his claim for actual or compensatory damages.

For moral damages to be awarded in the breach of contract of carriage, ―the breach must be wanton and deliberately
injurious or the one responsible acted fraudulently or with malice or bad faith. Not every case of mental anguish, fright
or serious anxiety calls for the award of moral damages.‖ Where there is no showing of fraud or bad faith, ―liability for
damages is limited to the natural and probable consequences of the breach of the obligation which the parties had
foreseen or could have reasonably foreseen. In such a case the liability does not include moral and exemplary
damages.‖

Air France was found liable for moral damages. Petitioner‘s station manager testified that upon receiving the letter-
complaint, she immediately began working on the Property Irregularity Report (PIR). This is issued at the airline station
upon complaint by a passenger on missing baggage. From the computer-printout, a PIR was initiated at the Budapest
counter. A search telex was sent out on three subsequent dates. Based on the PIR printout, the plaintiff only gave his
Philippine address and telephone number, and not the address and contact number of his Budapest hotel. The PIR
usually is printed in two originals, one for the station manager and the other copy is for the passenger. There was no
record or entry in the PIR of any follow-up call made by the plaintiff in Budapest. Plaintiff claimed that he was not given
a copy of this PIR and that his repeated telephone calls were ignored.

It was found that Air France ―acted in bad faith in repeatedly ignoring respondent‘s follow-up calls.‖ The alleged entries
in the PIR were not to be considered since these were not authenticated by the airline station representative in
Budapest. The Court did not accept as justification that plaintiff should be faulted in allegedly not giving his hotel
address and phone number. It found unbelievable that the plaintiff would not give his hotel and other information after
he had promptly filed a complaint. And even assuming that only the Philippine details were given, this does not explain
why Air France never communicated with plaintiff concerning the lost baggage long after he had returned to the
Philippines. The missing luggage was returned only after the trial.

In addition, the PIR only establishes that telex searches were made but there is no attempt to explain the loss of the
luggage. Air France ―did not give the attention and care due to its passenger whose baggage was not transported and
delivered to him at his travel destination and scheduled time. Inattention to and lack of care for the interest of its
passengers who are entitled to its utmost consideration, particularly as to their convenience, amount to bad faith which
entitles the passenger to an award of moral damages.‖ Bad faith may be ―in securing the contract and in the execution
thereof, as well as in the enforcement of its terms, or any other kind of deceit.‖ [emphasis supplied]

The failure to cite any act of discourtesy or rudeness does not make plaintiff‘s ―loss and moral suffering insignificant
and less deserving of compensation.‖ ―In repeatedly ignoring respondent‘s inquiries, petitioner‘s employees exhibited
an indifferent attitude without due regard for the inconvenience and anxiety he experienced after realizing that his
luggage was missing. Petitioner was thus guilty of bad faith in breaching its contract of carriage with the respondent,
which entitles the latter to the award of moral damages.‖ [emphasis supplied]

However, the sum of P1,000,000.00 is ―excessive and not proportionate to the loss or suffering inflicted on the
passenger under the circumstances.‖ The Court cited Trans World Airlines v. Court of Appeals where it considered the
social standing of the aggrieved passenger who was a lawyer and director of several companies but nonetheless
reduced the award of moral damages.

Moral damages are awarded ―to enable the injured party to obtain means, diversion or amusement that will serve to
alleviate the moral suffering he has undergone by reason of defendant's culpable action.‖ Exemplary damages are to
―deter serious wrongdoings.‖ Under Article 2216 of the Civil Code, the assessment of damages is left to the discretion
of the court according to the circumstances of each case. This is ―limited by the principle that the amount awarded
should not be palpably excessive as to indicate that it was the result of prejudice or corruption on the part of the trial
court. Simply put, the amount of damages must be fair, reasonable and proportionate to the injury suffered.‖

Since Air France ―failed to act timely on the passenger‘s predicament caused by its employees‘ mistake and more than
ordinary inadvertence or inattention, and the passenger failed to show any act of arrogance, discourtesy or rudeness
committed by the air carrier‘s employees, the amounts of P200,000.00, P50,000.00 and P30,000.00 as moral
damages, exemplary damages and attorney‘s fees would be sufficient and justified."

It is ironic that the award of damages, just like the luggage, comes too late since the plaintiff has already passed away.
Justice, just like baggage, can be just as delayed.

Northwest Airlines, Inc. v. Cuenca, G.R. No. L-22425, [August 31, 1965]

Facts: Northwest Airlines, Inc is ordered to pay to plaintiff Cuenca "the sum of P20,000 as moral damages, together
with the sum of P5,000 as exemplary damages, with legal interest thereon from the date of the filing of the complaint"
— December 12, 1959 — "until fully paid, plus the further sum of P2,000 as attorney's fees and expenses of litigation".
On appeal taken by petitioner, said decision was affirmed by the Court of Appeals, except as to the P50,000.00
exemplary damages, which was eliminated, and the P20,000.00 award for moral damages, which was converted into
nominal damages.

The case is now before us on petition for review by certiorari filed by petitioner.

Issue: Whether or not lower court has erred: (1) in holding that the Warsaw Convention of October 12, 1929, relative to
transportation by air is not in force in the Philippines; (2) in not holding that respondent has no cause of action; and (3)
in awarding P20,000 as nominal damages.

Held: We deem it unnecessary to pass upon the first assignment of error because the same is the basis of the second
assignment of error, and the latter is devoid of merit, even if we assumed the former to be well taken. Indeed, the
second assignment of error is predicated upon Articles 17, 18 and 19 of said Convention, reading:

"ART. 17. The carrier shall be liable for damage sustained in the event of the death or wounding of a passenger or any other bodily injury suffered by a passenger if
the accident which caused the damage so sustained took place on board the aircraft or in the course of any of the operations of embarking or disembarking.
"ART. 18. (1) The carrier shall be liable for damage sustained in the event of the destruction or loss of, or of damage to, any checked baggage, or any goods, if the
occurrence which caused the damage so sustained took place during the transportation by air.
"(2) The transportation by air within the meaning of the preceding paragraph shall comprise the period during which the baggage or goods are in charge of the
carrier, whether in an airport or on board an aircraft, or, in the case of a landing outside an airport, in any place whatsoever.
"(3) The period of the transportation by air shall not extend to any transportation by land, by sea, or by river performed outside an airport. If, however, such
transportation takes place in the performance of a contract for transportation by air, for the purpose of loading, delivery, or transshipment, any damage is presumed,
subject to proof to the contrary, to have been the result of an event which took place during the transportation by air.
"ART. 19. The carrier shall be liable for damage occasioned by delay in the transportation by air of passengers, baggage, or goods."

Petitioner argues that pursuant to these provisions, an air "carrier is liable only" in the event of death of a passenger or
injury suffered by him, or of destruction or loss of, or damage to any checked baggage or any goods, or of delay in the
transportation by air of passengers, baggage or goods. This pretense is not borne out by the language of said Articles.
The same merely declare the carrier liable for damages in the enumerated cases, if the conditions therein specified are
present. Neither said provisions nor others in the aforementioned Convention regulate or exclude liability for other
breaches of contract by carrier. Under petitioner's theory, an air carrier would be exempt from any liability for damages
in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd.

Moreover, there are special reasons why the P20,000.00 award in favor of respondent herein is justified, even if said
award were characterized as nominal damages. When his contract of carriage was violated by the petitioner,
respondent held the office of Commissioner of Public Highways of the Republic of the Philippines. Having boarded
petitioner's plane in Manila with a first class ticket to Tokyo, he was, upon arrival at Okinawa, transferred to the tourist
class compartment. Although he revealed that he was traveling in his official capacity as official delegate of the
Republic to a conference in Tokyo, an agent of petitioner rudely compelled him, in the presence of other passengers, to
move, over his objection, to the tourist class, under threat of otherwise leaving him in Okinawa. In order to reach the
conference on time, respondent had no choice but to obey.

It is true that said ticket was marked "W/L", but respondent's attention was not called thereto. Much less was he
advised that "W/L" meant "wait listed". Upon the other hand, having paid the first class fare in full and having been
given first class accommodation as he took petitioner's plane in Manila, respondent was entitled to believe that this was
a confirmation of his first class reservation and that he would keep the same until his ultimate destination, Tokyo. Then,
too, petitioner has not tried to explain or even alleged that the person to whom respondent's first class seat was given
had a better right thereto. In other words, since the offense had been committed with full knowledge of the fact that
respondent was an official representative of the Republic of the Philippines, the sum of P20,000 awarded as damages
may well be considered as merely nominal. At any rate, considering that petitioner's agent had acted in a wanton,
reckless and oppressive manner, said award may, also, be considered as one for exemplary damages.

Alitalia v. Intermediate Appellate Court, G.R. No. 71929, [December 4, 1990]

Facts: Dr. Felipa Pablo — an associate professor in the University of the Philippines, 1 and a research grantee of the
Philippine Atomic Energy Agency — was invited to take part at a meeting of the Department of Research and Isotopes
of the Joint FAO-IAEA Division of Atomic Energy in Food and Agriculture of the United Nations in Ispra, Italy. She was
invited in view of her specialized knowledge in "foreign substances in food and the agriculture environment." The
program announced that she would be the second speaker on the first day of the meeting. 4To fulfill this engagement,
Dr. Pablo booked passage on petitioner airline, ALITALIA.

She arrived in Milan on the day before the meeting in accordance with the itinerary and time table set for her by
ALITALIA. She was however told by the ALITALIA personnel there at Milan that her luggage was "delayed inasmuch
as the same . . . (was) in one of the succeeding flights from Rome to Milan." 5 Her luggage consisted of two (2)
suitcases: one contained her clothing and other personal items; the other, her scientific papers, slides and other
research material. But the other flights arriving from Rome did not have her baggage on board.

By then feeling desperate, she went to Rome to try to locate her bags herself. There, she inquired about her suitcases
in the domestic and international airports, and filled out the forms prescribed by ALITALIA for people in her
predicament. However, her baggage could not be found. Completely distraught and discouraged, she returned to
Manila without attending the meeting in Ispra, Italy.

Once back in Manila she demanded that ALITALIA make reparation for the damages thus suffered by her. ALITALIA
offered her "free airline tickets to compensate her for any alleged damages. . . ." She rejected the offer, and forthwith
commenced the action 6 which has given rise to the present appellate proceedings.

As it turned out, Prof. Pablo's suitcases were in fact located and forwarded to Ispra, Italy, but only on the day after her
scheduled appearance and participation at the U.N. meeting there. Of course Dr. Pablo was no longer there to accept
delivery; she was already on her way home to Manila. And for some reason or other, the suitcases were not actually
restored to Prof. Pablo by ALITALIA until eleven (11) months later, and four (4) months after institution of her action. 9
After appropriate proceedings and trial, the Court of First Instance rendered judgment in Dr. Pablo's favor: 10
"(1) Ordering the defendant (ALITALIA) to pay . . . (her) the sum of TWENTY THOUSAND PESOS (P20,000.00),
Philippine Currency, by way of nominal damages;
(2) Ordering the defendant to pay . . . (her) the sum of FIVE THOUSAND PESOS (P5,000.00), Philippine Currency, as
and for attorney's fees; (and)
(3) Ordering the defendant to pay the costs of the suit."

ALITALIA has appealed to this Court on certiorari. Here, it seeks to make basically the same points it tried to make
before the Trial Court and the Intermediate Appellate Court, i.e.:

1) that the Warsaw Convention should have been applied to limit ALITALIA'S liability; and
2) that there is no warrant in fact or in law for the award to Dr. Pablo of nominal damages and attorney's fees.

In addition, ALITALIA postulates that it was error for the Intermediate Appellate Court to have refused to pass on all the
assigned errors and in not stating the facts and the law on which its decision is based.

Under the Warsaw Convention, 16 an air carrier is made liable for damages for:

1) the death, wounding or other bodily injury of a passenger if the accident causing it took place on board the aircraft or
in the course of its operations of embarking or disembarking; 17
2) the destruction or loss of, or damage to, any registered luggage or goods, if the occurrence causing it took place
during the carriage by air;" 18 and
3) delay in the transportation by air of passengers, luggage or goods.

In these cases, it is provided in the Convention that the "action for damages, however, founded, can only be brought
subject to conditions and limits set out" therein. The Convention also purports to limit the liability of the carriers

Issue: 1) Whether the Warsaw Convention should be applied to limit Alitalia‘s liability (2) Whether Dr. Pablo is entitled
to nominal damages

Held: (1) Under the Warsaw Convention, an air carrier is made liable for damages for:
a. The death, wounding or other bodily injury of a passenger if the accident causing it took place on board the aircraft
or I the course of its operations of embarking or disembarking;
b. The destruction or loss of, or damage to, any registered luggage or goods, if the occurrence causing it took place
during the carriage by air; and
c. Delay in the transportation by air of passengers, luggage or goods.

The convention however denies to the carrier availment of the provisions which exclude or limit his liability, if the
damage is caused by his wilful misconduct, or by such default on his part as is considered to be equivalent to wilful
misconduct. The Convention does not thus operate as an exclusive enumeration of the instances of an airline's liability,
or as an absolute limit of the extent of that liability. It should be deemed a limit of liability only in those cases where the
cause of the death or injury to person, or destruction, loss or damage to property or delay in its transport is not
attributable to or attended by any wilful misconduct, bad faith, recklessness, or otherwise improper conduct on the part
of any official or employee for which the carrier is responsible, and there is otherwise no special or extraordinary form
of resulting injury.

In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner airline;
and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but without appreciable damage. The fact
is, nevertheless, that some species of injury was caused to Dr. Pablo because petitioner ALITALIA misplaced her
baggage and failed to deliver it to her at the time appointed - a breach of its contract of carriage. Certainly, the
compensation for the injury suffered by Dr. Pablo cannot under the circumstances be restricted to that prescribed by
the Warsaw Convention for delay in the transport of baggage.

Apart from this, there can be no doubt that Dr. Pablo underwent profound distress and anxiety, which gradually turned
to panic and finally despair, from the time she learned that her suitcases were missing up to the time when, having
gone to Rome, she finally realized that she would no longer be able to take part in the conference. As she herself put it,
she "was really shocked and distraught and confused."

Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the circumstances be restricted to that
prescribed by the Warsaw Convention for delay in the transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to her luggage. As already mentioned, her
baggage was ultimately delivered to her in Manila, tardily but safely.

(2) She is however entitled to nominal damages which, as the law says, is adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be vindicated and recognized, and not for the
purpose of indemnifying the plaintiff that for any loss suffered and this Court agrees that the respondent Court of
Appeals correctly set the amount thereof at PhP 40,000.00.

The Court also agrees that respondent Court of Appeals correctly awarded attorney‘s fees to Dr. Pablo and the amount
of PhP 5,000.00 set by it is reasonable in the premises. The law authorizes recovery of attorney‘s fees inter alia where,
as here, the defendant‘s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to
protect his interest or where the court deems it just and equitable.

Pan American World Airways, Inc. v. Intermediate Appellate Court, G.R. No. 70462, [August 11, 1988]

Facts: On April 25, 1978, plaintiff Rene V. Pangan, president and general manager of the plaintiffs Sotang Bastos and
Archer Productions, while in San Francisco, California and Primo Quesada of Prime Films, San Francisco, California,
entered into an agreement whereby the former, for and in consideration of the amount of US $2,500.00 per picture,
bound himself to supply the latter with three films. 'Ang Mabait, Masungit at ang Pangit,' 'Big Happening with Chikiting
and Iking,' and 'Kambal Dragon' for exhibition in the United States. It was also their agreement that plaintiffs would
provide the necessary promotional and advertising materials for said films on or before May 30, 1978.

On his way home to the Philippines, plaintiff Pangan visited Guam where he contacted Leo Slutchnick of the Hafa Adai
Organization. Plaintiff Pangan likewise entered into a verbal agreement with Slutchnick for the exhibition of two of the
films above-mentioned at the Hafa Adai Theater in Guam on May 30, 1978 for the consideration of P7,000.00 per
picture. Plaintiff Pangan undertook to provide the necessary promotional and advertising materials for said films on or
before the exhibition date on May 30, 1978.

By virtue of the above agreements, plaintiff Pangan caused the preparation of the requisite promotional handbills and
still pictures for which he paid the total sum of P12,900.00 . Likewise in preparation for his trip abroad to comply with
his contracts, plaintiff Pangan purchased fourteen clutch bags, four capiz lamps and four barong tagalog, with a total
value of P4,400.00

On May 18, 1978, plaintiff Pangan obtained from defendant Pan Am's Manila Office, through the Your Travel Guide, an
economy class for passage from Manila to Guam on defendant's flight of May 27, 1978, upon payment by said plaintiff
of the regular fare. The Your Travel Guide is a tour and travel office owned and managed by plaintiff's witness Mila de
la Rama.

On May 27, 1978, two hours before departure time plaintiff Pangan was at the defendant's ticket counter at the Manila
International Airport and presented his ticket and checked in his two luggages, for which he was given baggage claim.
The two luggages contained the promotional and advertising materials, the clutch bags, barong tagalog and his
personal belongings. Subsequently, Pangan was informed that his name was not in the manifest and so he could not
take Flight No. 842 in the economy class. Since there was no space in the economy class, plaintiff Pangan took the
first class because he wanted to be on time in Guam to comply with his commitment, paying an additional sum of
$112.00.

When plaintiff Pangan arrived in Guam on the date of May 27, 1978, his two luggages did not arrive with his flight, as a
consequence of which his agreements with Slutchnick and Quesada for the exhibition of the films in Guam and in the
United States were cancelled.Thereafter, he filed a written claim for his missing luggages.

Upon arrival in the Philippines, Pangan contacted his lawyer, who made the necessary representations to protest as to
the treatment which he received from the employees of the defendant and the loss of his two luggages. Defendant Pan
Am assured plaintiff Pangan that his grievances would be investigated and given its immediate consideration. Due to
the defendant's failure to communicate with Pangan about the action taken on his protests, the present complaint was
filed by the plaintiff.

Issue: Whether or not Pan American Airways liable for the lost check-in baggage?

Held: CONDITIONS OF CONTRACT - 1. As used in this contract "ticket" means this passenger ticket and baggage check of which these conditions and the
notices form part, "carriage" is equivalent to "transportation," "carrier" means all air carriers that carry or undertake to carry the passenger or his baggage hereunder
or perform any other service incidental to such air carriage. "WARSAW CONVENTION" means the convention for the Unification of Certain Rules Relating to
International Carriage by Air signed at Warsaw, 12th October 1929, or that Convention as amended at The Hague, 28th September 1955, whichever may be
applicable.

2. Carriage hereunder is subject to the rules and limitations relating to liability established by the Warsaw Convention unless such carriage is not "international
carriage" as defined by that Convention.
3. To the extent not in conflict with the foregoing carriage and other services performed by each carrier are subject to: (i) provisions contained in this ticket, (ii)
applicable tariffs, (iii) carrier's conditions of carriage and related regulations which are made part hereof (and are available on application at the offices of carrier),
except in transportation between a place in the United States or Canada and any place outside thereof to which tariffs in force in those countries apply.

xxx xxx xxx

NOTICE OF BAGGAGE LIABILITY LIMITATIONS

Liability for loss, delay, or damage to baggage is limited as follows unless a higher value is declared in advance and additional charges are paid: (1) for most
international travel (including domestic portions of international journeys) to approximately $9.70 per pound ($20.00 per kilo) for checked baggage and $400 per
passenger for unchecked baggage: (2) for travel wholly between U.S. points, to $750 per passenger on most carriers (a few have lower limits). Excess valuation
may not be declared on certain types of valuable articles. Carriers assume no liability for fragile or perishable articles further information may be obtained from the
carrier.

On the basis of the foregoing stipulations printed at the back of the ticket, petitioner contends that its liability for the lost
baggage of private respondent Pangan is limited to $600.00 ($20.00 x 30 kilos) as the latter did not declare a higher
value for his baggage and pay the corresponding additional charges.

To support this contention, petitioner cites the case of Ong Yiu v. Court of Appeals [G.R. No. L-40597, June 29, 1979,
91 SCRA 223), where the Court sustained the validity of a printed stipulation at the back of an airline ticket limiting the
liability of the carrier for lost baggage to a specified amount and ruled that the carrier's liability was limited to said
amount since the passenger did not declare a higher value, much less pay additional charges.

We find the ruling in Ong Yiu squarely applicable to the instant case. In said case, the Court, through Justice Melencio-
Herrera, stated: There is no dispute that petitioner did not declare any higher value for his luggage, much less did he
pay any additional transportation charge.

But petitioner argues that there is nothing in the evidence to show that he had actually entered into a contract with PAL
limiting the latter's liability for loss or delay of the baggage of its passengers, and that Article 1750 * of the Civil Code
has not been complied with.

While it may be true that petitioner had not signed the plane ticket (Exh. "12"), he is nevertheless bound by the provisions thereof. "Such
provisions have been held to be a part of the contract of carriage, and valid and binding upon the passenger regardless of the latter's lack of
knowledge or assent to the regulation." It is what is known as a contract of "adhesion," in regards which it has been said that contracts of
adhesion wherein one party imposes a ready-made form of contract on the other, as the plane ticket in the case at bar, are contracts not entirely
prohibited. The one who adheres to the contract is in reality free to reject it entirely; if he adheres, he gives his consent, [Tolentino, Civil Code,
Vol. IV, 1962 ed., p. 462, citing Mr. Justice J.B.L. Reyes, Lawyer's Journal, Jan. 31, 1951, p. 49]. And as held in Randolph v. American Airlines,
103 Ohio App. 172, 144 N.E. 2d 878; Rosenchein v. Trans World Airlines, Inc., 349 S.W. 2d 483, "a contract limiting liability upon an agreed
valuation does not offend against the policy of the law forbidding one from contracting against his own negligence."

Considering, therefore, that petitioner had failed to declare a higher value for his baggage, he cannot be permitted a
recovery in excess of P100.00.

On the other hand, the ruling in Shewaram v. Philippine Air Lines, Inc. [G.R. No. L-20099, July 2, 1966, 17 SCRA 606],
where the Court held that the stipulation limiting the carrier's liability to a specified amount was invalid, finds no
application in the instant case, as the ruling in said case was premised on the finding that the conditions printed at the
back of the ticket were so small and hard to read that they would not warrant the presumption that the passenger was
aware of the conditions and that he had freely and fairly agreed thereto. In the instant case, similar facts that would
make the case fall under the exception have not been alleged, much less shown to exist. LibLex

In view thereof petitioner's liability for the lost baggage is limited to $20.00 per kilo or $600.00, as stipulated at the back
of the ticket.

At this juncture, in order to rectify certain misconceptions the Court finds it necessary to state that the Court of Appeal's
reliance on a quotation from Northwest Airlines, Inc. v. Cuenca [G.R. No. L-22425, August 31, 1965, 14 SCRA 1063] to
sustain the view that "to apply the Warsaw Convention which limits a carrier's liability to US$9.07 per pound or
US$20.00 per kilo in cases of contractual breach of carriage ** is against public policy" is utterly misplaced, to say the
least. In said case, while the Court, as quoted in the Intermediate Appellate Court's decision, said:

Petitioner argues that pursuant to those provisions, an air "carrier is liable only" in the event of death of a passenger or
injury suffered by him, or of destruction or loss of, or damages to any checked baggage or any goods, or of delay in the
transportation by air of passengers, baggage or goods. This pretense is not borne out by the language of said Articles.
The same merely declare the carrier liable for damages in enumerated cases, if the conditions therein specified are
present. Neither said provisions nor others in the aforementioned Convention regulate or exclude liability for other
breaches of contract by the carrier. Under petitioner's theory, an air carrier would be exempt from any liability for
damages in the event of its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd.

it prefaced this statement by explaining that:

. . . The case is now before us on petition for review by certiorari, upon the ground that the lower court has erred: (1) in
holding that the Warsaw Convention of October 12, 1929, relative to transportation by air is not in force in the
Philippines: (2) in not holding that respondent has no cause of action; and (3) in awarding P20,000 as nominal
damages.

We deem it unnecessary to pass upon the first assignment of error because the same is the basis of the second
assignment of error, and the latter is devoid of merit, even if we assumed the former to be well-taken. (Emphasis
supplied.)

Thus, it is quite clear that the Court never intended to, and in fact never did, rule against the validity of provisions of the
Warsaw Convention. Consequently, by no stretch of the imagination may said quotation from Northwest be considered
as supportive of the appellate court's statement that the provisions of the Warsaw Convention limited a carrier's liability
are against public policy.

Thus, applying the foregoing ruling to the facts of the instant case, in the absence of a showing that petitioner's
attention was called to the special circumstances requiring prompt delivery of private respondent Pangan's luggages,
petitioner cannot be held liable for the cancellation of private respondents' contracts as it could not have foreseen such
an eventuality when it accepted the luggages for transit.

The Court is unable to uphold the Intermediate Appellate Court's disregard of the rule laid down in Mendoza and
affirmance of the trial court's conclusion that petitioner is liable for damages based on the finding that "[t]he undisputed
fact is that the contracts of the plaintiffs for the exhibition of the films in Guam and California were cancelled because of
the loss of the two luggages in question." [Rollo, p. 36] The evidence reveals that the proximate cause of the
cancellation of the contracts was private respondent Pangan's failure to deliver the promotional and advertising
materials on the dates agreed upon. For this petitioner cannot be held liable. Private respondent Pangan had not
declared the value of the two luggages he had checked in and paid additional charges. Neither was petitioner privy to
respondents' contracts nor was its attention called to the condition therein requiring delivery of the promotional and
advertising materials on or before a certain date.

China Airlines v. Chiok, G.R. No. 152122, [July 30, 2003]

Facts: On September 18, 1981, Daniel Chiok purchased from China Airlines, Ltd. airline passenger ticket number for
air transportation covering Manila-Taipei-Hongkong-Manila. Said ticket was exclusively endorseable to Philippine
Airlines, Ltd. (PAL for brevity).

"Subsequently, on November 21, 1981, Chiok took his trip from Manila to Taipei using [the] CAL ticket. Before he left
for said trip, the trips covered by the ticket were pre-scheduled and confirmed by the former. When he arrived in Taipei,
he went to the CAL office and confirmed his Hongkong to Manila trip on board PAL Flight No. PR 311. The CAL office
attached a yellow sticker appropriately indicating that his flight status was OK.

"When Chiok reached Hongkong, he went to the PAL office and sought to reconfirm his flight back to Manila. The PAL
office confirmed his return trip on board Flight No. PR 311 and attached its own sticker. On November 24, 1981, Chiok
proceeded to Hongkong International Airport for his return trip to Manila. However, upon reaching the PAL counter,
Chiok saw a poster stating that PAL Flight No. PR 311 was cancelled because of a typhoon in Manila. He was then
informed that all the confirmed ticket holders of PAL Flight No. PR 311 were automatically booked for its next flight,
which was to leave the next day. He then informed PAL personnel that, being the founding director of the Philippine
Polysterene Paper Corporation, he ha[d] to reach Manila on November 25, 1981 because of a business option which
he ha[d] to execute on said date.

"On November 25, 1981, Chiok went to the airport. Cathay Pacific stewardess Lok Chan (hereafter referred to as Lok)
ha[d] taken and received Chiok's plane ticket and his luggage. Lok called the attention of Carmen Chan (hereafter
referred to as Carmen), PAL's terminal supervisor, and informed the latter that Chiok's name was not in the computer
list of passengers. Subsequently, Carmen informed Chiok that his name did not appear in PAL's computer list of
passengers and therefore could not be permitted to board PAL Flight No. PR 307.
"Meanwhile, Chiok requested Carmen to put into writing the alleged reason why he was not allowed to take his flight.
The latter then wrote the following, to wit: 'PAL STAFF CARMEN CHAN CHKD WITH R/C KENNY AT 1005H NO
SUCH NAME IN COMPUTER FOR 311/24 NOV AND 307/25 NOV,' The latter sought to recover his luggage but found
only 2 which were placed at the end of the passengers line. Realizing that his new Samsonite luggage was missing,
which contained cosmetics worth HK$14,128.80, he complained to Carmen.

"Thereafter, Chiok proceeded to PAL's Hongkong office and confronted PAL's reservation officer, Carie Chao
(hereafter referred to as Chao), who previously confirmed his flight back to Manila. Chao told Chiok that his name was
on the list and pointed to the latter his computer number listed on the PAL confirmation sticker attached to his plane
ticket, which number was 'R/MN62'.

"Chiok then decided to use another CAL ticket with No. 297:4402:004:370:5 and asked Chao if this ticket could be
used to book him for the said flight. The latter, once again, booked and confirmed the former's trip this time on board
PAL Flight No. PR 311 scheduled to depart that evening. Later, Chiok went to the PAL check-in counter and it was
Carmen who attended to him. As this juncture, Chiok had already placed his travel documents, including his clutch bag,
on top of the PAL check-in counter.

"Thereafter, Carmen directed PAL personnel to transfer counters. In the ensuing commotion, Chiok lost his clutch bag
containing the following, to wit: (a) $2,000.00; (b) HK$2,000.00; (c) Taipei $8,000.00; (d) P2,000.00; (e) a three-piece
set of gold (18 carats) cross pens valued at P3,500; (f) a Cartier watch worth about P7,500.00; (g) a tie clip with a
garnet birthstone and diamond worth P1,800.00; and (h) a [pair of] Christian Dior reading glasses. Subsequently, he
was placed on stand-by and at around 7:30 p.m., PAL personnel informed him that he could now check-in.

"Consequently, Chiok as plaintiff, filed a Complaint on November 9, 1982 for damages, against PAL and CAL, as
defendants, docketed as Civil Case No. 82-13690, with Branch 31, Regional Trial Court, National Capital Judicial
Region, Manila.

"He alleged therein that despite several confirmations of his flight, defendant PAL refused to accommodate him in
Flight No. 307, for which reason he lost the business option aforementioned. He also alleged that PAL's personnel,
specifically Carmen, ridiculed and humiliated him in the presence of so many people. Further, he alleged that
defendants are solidarily liable for the damages he suffered, since one is the agent of the other."

Issue: Whether or not CAL is liable for damages.

Held: YES. It is significant to note that the contract of air transportation was between petitioner and respondent, with
the former endorsing to PAL the Hong Kong-to-Manila segment of the journey. Such contract of carriage has always
been treated in this jurisdiction as a single operation. This jurisprudential rule is supported by the Warsaw Convention,
22 to which the Philippines is a party, and by the existing practices of the International Air Transport Association
(IATA).

Article 1, Section 3 of the Warsaw Convention states:

"Transportation to be performed by several successive air carriers shall be deemed, for the purposes of this
Convention, to be one undivided transportation, if it has been regarded by the parties as a single operation, whether it
has been agreed upon under the form of a single contract or of a series of contracts, and it shall not lose its
international character merely because one contract or a series of contracts is to be performed entirely within a territory
subject to the sovereignty, suzerainty, mandate, or authority of the same High Contracting Party." 23

Article 15 of IATA-Recommended Practice similarly provides:

"Carriage to be performed by several successive carriers under one ticket, or under a ticket and any conjunction ticket
issued therewith, is regarded as a single operation."

In American Airlines v. Court of Appeals, 24 we have noted that under a general pool partnership agreement, the ticket-
issuing airline is the principal in a contract of carriage, while the endorsee-airline is the agent.

". . . Members of the IATA are under a general pool partnership agreement wherein they act as agent of each other in
the issuance of tickets to contracted passengers to boost ticket sales worldwide and at the same time provide
passengers easy access to airlines which are otherwise inaccessible in some parts of the world. Booking and
reservation among airline members are allowed even by telephone and it has become and accepted practice among
them. A member airline which enters into a contract of carriage consisting of a series of trips to be performed by
different carriers is authorized to receive the fare for the whole trip and through the required process of interline
settlement of accounts by way of the IATA clearing house an airline is duly compensated for the segment of the trip
serviced. Thus, when the petitioner accepted the unused portion of the conjunction tickets, entered it in the IATA
clearing house and undertook to transport the private respondent over the route covered by the unused portion of the
conjunction tickets, i.e., Geneva to New York, the petitioner tacitly recognized its commitment under the IATA pool
arrangement to act as agent of the principal contracting airline, Singapore Airlines, as to the segment of the trip the
petitioner agreed to undertake. As such, the petitioner thereby assumed the obligation to take the place of the carrier
originally designated in the original conjunction ticket. The petitioner's argument that it is not a designated carrier in the
original conjunction tickets and that it issued its own ticket is not decisive of its liability. The new ticket was simply a
replacement for the unused portion of the conjunction ticket, both tickets being for the same amount of US$2,760 and
having the same points of departure and destination. By constituting itself as an agent of the principal carrier the
petitioner's undertaking should be taken as part of a single operation under the contract of carriage executed by the
private respondent and Singapore Airlines in Manila." 25

PAL acted as the carrying agent of CAL. In the same way that we ruled against British Airways and Lufthansa in the
aforementioned cases, we also rule that CAL cannot evade liability to respondent, even though it may have been only a
ticket issuer for the Hong Kong-Manila sector.

Moral and Exemplary Damages

Moral damages cannot be awarded in breaches of carriage contracts, except in the two instances contemplated in
Articles 1764 and 2220 of the Civil Code, which we quote:

"Article 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of this Book,
concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of contract by a
common carrier.

xxx xxx xxx

"Article 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should find that,
under the circumstances, such damages are justly due. The same rule applies to breaches of contract where the
defendant acted fraudulently or in bad faith." (Emphasis supplied)

There is no occasion for us to invoke Article 1764 here. We must therefore determine if CAL or its agent (PAL) is guilty
of bad faith that would entitle respondent to moral damages.

In Lopez v. Pan American World Airways, 29 we defined bad faith as a breach of a known duty through some motive of
interest or ill will.

In the case at bar, the known duty of PAL was to transport herein respondent from Hong Kong to Manila. That duty
arose when its agent confirmed his reservation for Flight PR 311, 30 and it became demandable when he presented
himself for the trip on November 24, 1981.

It is true that due to a typhoon, PAL was unable to transport respondent on Flight PR 311 on November 24, 1981. This
fact, however, did not terminate the carrier's responsibility to its passengers. PAL voluntarily obligated itself to
automatically transfer all confirmed passengers of PR 311 to the next available flight, PR 307, on the following day. 31
That responsibility was subsisting when respondent, holding a confirmed ticket for the former flight, presented himself
for the latter.

The records amply establish that he secured repeated confirmations of his PR 311 flight on November 24, 1981.
Hence, he had every reason to expect that he would be put on the replacement flight as a confirmed passenger.
Instead, he was harangued and prevented from boarding the original and the replacement flights. Thus, PAL breached
its duty to transport him. After he had been directed to pay the terminal fee, his pieces of luggage were removed from
the weighing-in counter despite his protestations. 32

It is relevant to point out that the employees of PAL were utterly insensitive to his need to be in Manila on November
25, 1981, and to the likelihood that his business affairs in the city would be jeopardized because of a mistake on their
part. It was that mistake that had caused the omission of his name from the passenger list despite his confirmed flight
ticket. By merely looking at his ticket and validation sticker, it is evident that the glitch was the airline's fault. However,
no serious attempt was made by PAL to secure the all-important transportation of respondent to Manila on the following
day. To make matters worse, PAL allowed a group of non-revenue passengers, who had no confirmed tickets or
reservations, to board Flight PR 307. 33
In the present case, we stress that respondent had repeatedly secured confirmations of his PR 311 flight on November
24, 1981 — initially from CAL and subsequently from the PAL office in Hong Kong. The status of this flight was marked
"OK" on a validating sticker placed on his ticket. That sticker also contained the entry "RMN6V." Ms Chan explicitly
acknowledged that such entry was a computer reference that meant that respondent's name had been entered in
PAL's computer.

Since the status of respondent on Flight PR 311 was "OK," as a matter of right testified to by PAL's witness, he should
have been automatically transferred to and allowed to board Flight 307 the following day. Clearly resulting from
negligence on the part of PAL was its claim that his name was not included in its list of passengers for the November
24, 1981 PR 311 flight and, consequently, in the list of the replacement flight PR 307. Since he had secured
confirmation of his flight — not only once, but twice — by personally going to the carrier's offices where he was
consistently assured of a seat thereon — PAL's negligence was so gross and reckless that it amounted to bad faith.

In view of the foregoing, we rule that moral and exemplary 50 damages were properly awarded by the lower courts.

Santos III v. Northwest Orient Airlines, G.R. No. 101538, [June 23, 1992]

Facts: The petitioner is a minor and a resident of the Philippines. Private respondent Northwest Orient Airlines (NOA)
is a foreign corporation with principal office in Minnesota, U.S.A., and licensed to do business and maintain a branch
office in the Philippines.

On October 21, 1986, the petitioner purchased from NOA a round-trip ticket in San Francisco, U.S.A., for his flight from
San Francisco to Manila via Tokyo and back. The scheduled departure date from Tokyo was December 20, 1986. No
date was specified for his return to San Francisco.

On December 19, 1986, the petitioner checked in at the NOA counter in the San Francisco airport for his scheduled
departure to Manila. Despite a previous confirmation and re-confirmation, he was informed that he had no reservation
for his flight from Tokyo to Manila. He therefore had to be wait-listed.

On March 12, 1987, the petitioner sued NOA for damages in the Regional Trial Court of Makati. On April 13, 1987,
NOA moved to dismiss the complaint on the ground of lack of jurisdiction. Citing the above-quoted article, it contended
that the complaint could be instituted only in the territory of one of the High Contracting Parties, before:

1. the court of the domicile of the carrier;

2. the court of its principal place of business;
3. the court where it has a place of business through which the contract had been made;
4. the court of the place of destination.

The private respondent contended that the Philippines was not its domicile nor was this its principal place of business.
Neither was the petitioner's ticket issued in this country nor was his destination Manila but San Francisco in the United
States.

On February 1, 1988, the lower court granted the motion and dismissed the case. 2 The petitioner appealed to the
Court of Appeals, which affirmed the decision of the lower court. 3 On June 26, 1991, the petitioner filed a motion for
reconsideration, but the same was denied. 4 The petitioner then came to this Court, raising substantially the same
issues it submitted in the Court of Appeals.

Issues: Whether or not Philippine courts have jurisdiction over the matter to conduct judicial review.

Held: No jurisdiction (the provision is constitutional). No. The Supreme Court ruled that they cannot rule over the
matter for the SC is bound by the provisions of the Warsaw Convention which was ratified by the Senate. Until & unless
there would be amendment to the Warsaw Convention, the only remedy for Santos III is to sue in any of the place
indicated in the Convention such as in San Francisco, USA.

The SC cannot rule upon the constitutionality of Article 28(1) of the Warsaw Convention. In the first place, it is a treaty
which was a joint act by the legislative and the executive. The presumption is that it was first carefully studied and
determined to be constitutional before it was adopted and given the force of law in this country. In this case, Santos
was not able to offer any compelling argument to overcome the presumption.
The Convention is a treaty commitment voluntarily assumed by the Philippine government and, as such, has the force
and effect of law in this country. The petitioner‘s allegations are not convincing enough to overcome this presumption.
Apparently, the Convention considered the four places designated in Article 28 the most convenient forums for the
litigation of any claim that may arise between the airline and its passenger, as distinguished from all other places.

NOTES: WON Warsaw convention applies.

Convention applies to all international transportation of persons performed by aircraft for hire. Whether the
transportation is ―international‖ is determined by the contract of the parties, which in the case of passengers is the
ticket. When the contract of carriage provides for the transportation of the passenger between certain designated
terminals ―within the territories of two High Contracting Parties,‖ the provisions of the Convention automatically apply
and exclusively govern the rights and liabilities of the airline and its passenger.

WON MNL or SFO was the destination.

The place of destination, within the meaning of the Warsaw Convention, is determined by the terms of the contract of
carriage or, specifically in this case, the ticket between the passenger and the carrier. Examination of the petitioner‘s
ticket shows that his ultimate destination is San Francisco. Although the date of the return flight was left open, the
contract of carriage between the parties indicates that NOA was bound to transport the petitioner to San Francisco from
Manila. Manila should therefore be considered merely an agreed stopping place and not the destination.

WON Northwest has domicile in the Philippines

Notably, the domicile of the carrier is only one of the places where the complaint is allowed to be filed under Article
28(1). By specifying the three other places, to wit, the principal place of business of the carrier, its place of business
where the contract was made, and the place of destination, the article clearly meant that these three other places were
not comprehended in the term ―domicile.‖

United Airlines v. Uy, G.R. No. 127768, [November 19, 1999]

Facts: Willie J. Uy, a revenue passenger on United Airlines Flight No. 819 for the San Francisco — Manila route,
checked in together with his luggage one piece of which was as found to be overweight at the airline counter. To his
utter humiliation, an employee of petitioner rebuked him saying that he should have known the maximum weight
allowance to be 70 kgs. per bag and that he should have packed his things accordingly. Then, in a loud voice in front of
the milling crowd, she told respondent to repack his things and transfer some of them from the overweight luggage to
the lighter ones. Not wishing to create further scene, respondent acceded only to find his luggage still overweight. The
airline then billed him overweight charges which he offered to pay with a miscellaneous charge order (MCO) or an
airline pre-paid credit. However, the airline's employee, and later its airport supervisor, adamantly refused to honor the
MCO pointing out that there were conflicting figures listed on it. Despite the explanation from respondent that the last
figure written on the MCO represented his balance, petitioner's employees did not accommodate him. Faced with the
prospect of leaving without his luggage, respondent paid the overweight charges with his American Express credit
card.

Respondent's troubles did not end there. Upon arrival in Manila, he discovered that one of his bags had been slashed
and its contents stolen. He particularized his losses to be around US $5,310.00. In a letter dated 16 October 1989
respondent bewailed the insult, embarrassment and humiliating treatment he suffered in the hands of United Airlines
employees, notified petitioner of his loss and requested reimbursement thereof. Petitioner United Airlines, through
Central Baggage Specialist Joan Kroll, did not refute any of respondent's allegations and mailed a check representing
the payment of his loss based on the maximum liability of US $9.70 per pound. Respondent, thinking the amount to be
grossly inadequate to compensate him for his losses, as well as for the indignities he was subjected to, sent two (2)
more letters to petitioner airline, one dated 4 January 1990 through a certain Atty. Pesigan, and another dated 28
October 1991 through Atty. Ramon U. Ampil demanding an out-of-court settlement of P1,000,000.00. Petitioner United
Airlines did not accede to his demands.
Consequently, on 9 June 1992 respondent filed a complaint for damages against United Airlines alleging that he was a
person of good station, sitting in the board of directors of several top 500 corporations and holding senior executive
positions for such similar firms; 3 that petitioner airline accorded him ill and shabby treatment to his extreme
embarrassment and humiliation; and, as such he should be paid moral damages of at least P1,000,000.00, exemplary
damages of at least P500,000.00, plus attorney's fees of at least P50,000.00. Similarly, he alleged that the damage to
his luggage and its stolen contents amounted to around $5,310.00, and requested reimbursement therefor.
United Airlines moved to dismiss the complaint on the ground that respondent's cause of action had prescribed,
invoking Art. 29 of the Warsaw Convention which provides —
Art. 29 (1) The right to damages shall be extinguished if an action is not brought within two (2) years, reckoned from the date of arrival at the destination, or from the
date on which the aircraft ought to have arrived, or from the date on which the transportation stopped.
(2) The method of calculating the period of limitation shall be determined by the law of the court to which the case is submitted.
Respondent countered that par. (1) of Art. 29 of the Warsaw Convention must be reconciled with par. (2) thereof which
states that "the method of calculating the period of limitation shall be determined by the law of the court to which the
case is submitted." Interpreting thus, respondent noted that according to Philippine laws the prescription of actions is
interrupted "when they are filed before the court, when there is a written extrajudicial demand by the creditors, and
when there is any written acknowledgment of the debt by the debtor." 4 Since he made several demands upon United
Airlines: first, through his personal letter dated 16 October 1989; second, through a letter dated 4 January 1990 from
Atty. Pesigan; and, finally, through a letter dated 28 October 1991 written for him by Atty. Ampil, the two (2)-year period
of limitation had not yet been exhausted.

On 2 August 1992 the trial court ordered the dismissal of the action holding that the language of Art. 29 is clear that the
action must be brought within two (2) years from the date of arrival at the destination. It held that although the second
paragraph of Art. 29 speaks of deference to the law of the local court in "calculating the period of limitation," the same
does not refer to the local forum's rules in interrupting the prescriptive period but only to the rules of determining the
time in which the action may be deemed commenced, and within our jurisdiction the action shall be deemed "brought"
or commenced by the filing of a complaint. Hence, the trial court concluded that Art. 29 excludes the application of our
interruption rules.

Issues: Whether or not the action for damages is barred by the lapse of the 2-year prescriptive period under Art. 29 of
the Warsaw Convention

Held: 1) No. Supreme Court held that although the 2-year prescriptive period under the Warsaw Convention has
lapsed, it did not preclude the application of other pertinent provisions of the Civil Code. Thus, the action for damages
could still be filed based on tort which can be filed within 4 years from the time cause of action accrued. As for the
action pertaining to the loss of the contents of the luggage, while it was well within the bounds of the Warsaw
Convention, the Supreme Court found that there was an exception to the applicability of the 2-year prescriptive period –
that is when the airline employed delaying tactics and gave the passenger the run-around.

Applicability of the Warsaw Convention: Courts have discretion whether to apply them or not

Within our jurisdiction we have held that the Warsaw Convention can be applied, or ignored, depending on the peculiar
facts presented by each case. Thus, we have ruled that the Convention's provisions do not regulate or exclude liability
for other breaches of contract by the carrier or misconduct of its officers and employees, or for some particular or
exceptional type of damage. Neither may the Convention be invoked to justify the disregard of some extraordinary sort
of damage resulting to a passenger and preclude recovery therefor beyond the limits set by said Convention. Likewise,
we have held that the Convention does not preclude the operation of the Civil Code and other pertinent laws. It does
not regulate, much less exempt, the carrier from liability for damages for violating the rights of its passengers under the
contract of carriage, especially if willful misconduct on the part of the carrier's employees is found or established.

Respondent's complaint reveals that he is suing on two (2) causes of action: (a) the shabby and humiliating treatment
he received from petitioner's employees at the San Francisco Airport which caused him extreme embarrassment and
social humiliation; and, (b) the slashing of his luggage and the loss of his personal effects amounting to US $5,310.00.

While his second cause of action - an action for damages arising from theft or damage to property or goods - is well
within the bounds of the Warsaw Convention, his first cause of action -an action for damages arising from the
misconduct of the airline employees and the violation of respondent's rights as passenger - clearly is not.

Action for damages arising from the misconduct of the airline employees and the violation of the respondent‘s rights as
passengers is covered under the Civil Code

Consequently, insofar as the first cause of action is concerned, respondent's failure to file his complaint within the two
(2)-year limitation of the Warsaw Convention does not bar his action since petitioner airline may still be held liable for
breach of other provisions of the Civil Code which prescribe a different period or procedure for instituting the action,
specifically, Art. 1146 thereof which prescribes four (4) years for filing an action based on torts.

Exception to the Application of the 2-year prescriptive period: When airline employed delaying tactics

As for respondent's second cause of action, indeed the travaux preparatories of the Warsaw Convention reveal that the
delegates thereto intended the two (2)-year limitation incorporated in Art. 29 as an absolute bar to suit and not to be
made subject to the various tolling provisions of the laws of the forum. This therefore forecloses the application of our
own rules on interruption of prescriptive periods. Article 29, par. (2), was intended only to let local laws determine
whether an action had been commenced within the two (2)-year period, and within our jurisdiction an action shall be
deemed commenced upon the filing of a complaint. Since it is indisputable that respondent filed the present action
beyond the two (2)-year time frame his second cause of action must be barred. Nonetheless, it cannot be doubted that
respondent exerted efforts to immediately convey his loss to petitioner, even employed the services of two (2) lawyers
to follow up his claims, and that the filing of the action itself was delayed because of petitioner's evasion.

Verily, respondent filed his complaint more than two (2) years later, beyond the period of limitation prescribed by the
Warsaw Convention for filing a claim for damages. However, it is obvious that respondent was forestalled from
immediately filing an action because petitioner airline gave him the runaround, answering his letters but not giving in to
his demands. True, respondent should have already filed an action at the first instance when his claims were denied
by petitioner but the same could only be due to his desire to make an out-of-court settlement for which he cannot be
faulted. Hence, despite the express mandate of Art. 29 of the Warsaw Convention that an action for damages should
be filed within two (2) years from the arrival at the place of destination, such rule shall not be applied in the instant case
because of the delaying tactics employed by petitioner airline itself. Thus, private respondent's second cause of action
cannot be considered as time-barred under Art. 29 of the Warsaw Convention.

While his 2nd cause of action (an action for damages arising from theft or damage to property or goods) is well within
the bounds of the Warsaw convention, his 1st cause of action (an action for damages arising from the misconduct of
the airline employees and the violation of respondent‘s rights as passengers) clearly is not.

The 2-yr limitation incorporated in Art. 29 of the Warsaw Convention as an absolute bar to suit and not to be made
subject to the various tolling provisions of the laws of the forum, forecloses the application of our own rules on
interruption of prescriptive periods. (Art. 29, par. 2 was indented only to let local laws determine whether an action shall
be deemed commenced upon the filing of a complaint.) Since, it is indisputable that respondent filed the present action
beyond the 2-yr time frame his 2nd cause of action must be barred.

However, it is obvious that respondent was forestalled from immediately filing an action because petitioner gave him
the runaround, answering his letters but not giving in to his demands. True, respondent should have already filed an
action at the first instance when petitioner denied his claims but the same could only be due to his desire to make an
out-of-court settlement for which he cannot be faulted. Hence, despite the express mandate of Article 29 of the Warsaw
Convention that an action for damages should be filed within 2 years from the arrival at the place of destination, such
rule shall not be applied in the instant case because of the delaying tactics employed by petitioner airlines itself. Thus,
respondent‘s 2nd cause of action cannot be considered as time barred.