Mapa vs.

CA Issue: Whether the Warsaw Convention is applicable to this case Facts: Plaintiffs Cornelio Mapa and Purita Mapa entered into contract of air transportation with defendant TWA as evidenced by TWA tickets. Said TWA tickets are for Los Angeles-New York-Boston-St. LouisChicago. The domicile of carrier TWA is Kansas City, Missouri, USA. Its principal place of business is Kansas City, Missouri, USA. TWA's place of business through which the contracts were made isBangkok, Thailand. The place of destination is Chicago, USA. On August 10, 1990, plaintiffs Carmina (daughter of Cornelio and Purita) and Purita left Manila on board a PAL flight for Los Angeles. Carmina was to commence schooling and thus was accompanied by Purita to assist her in settling down at the University. They arrived Los Angeles on the same date and stayed there until August 14, 1990 when they left for New York City on a TWA flight. On August 27, 1990, plaintiffs Purita and Carmina S. Mapa departed for Boston, checking in seven (7) pieces of luggage at the TWA counter in the JFK Airport. They were issued receipts for the said baggage. Upon arriving in Boston, plaintiffs Purita and Carmina proceeded to the carousel to claim their baggages and found only three out of the seven they checked in. Plaintiffs immediately reported the loss of their four baggages to the TWA Baggage Office at Logan Airport. TWA's representative confidently assured them that their baggages would be located within 24 hours and not more than 48 hours. They were requested to accomplish a passenger property questionnaire to facilitate a further intensive and computerized search for the lost luggage, which they duly accomplished. The total value of the lost items amounted to $11,283.79. Two months later, TWA offered to amicably settle the case by giving plaintiffs-appellants two options: (a) transportation credit for future TWA travel or (b) cash settlement. Five months lapsed without any result on TWA's intensive search. Plaintiffs-appellant opted for transportation credit for future TWA travel. TWA disregarded plaintiffs' option and unilaterally declared the payment of $2,560.00 as constituting full satisfaction of the plaintiffs' claim. Plaintiffs accepted the check for $2,560.00, as partial payment for the actual cost of their lost baggages and their contents. Despite demands by plaintiffs, TWA failed and refused without just cause to indemnify and redress plaintiffs for the grave injury and damages they have suffered. Petitioners then filed a complaint for damages and complaint for breach of contract of carriage against TWA in the RTC. The trial court dismissed the case for lack of jurisdiction in light of Article 28(1) of the Warsaw Convention. The CA affirmed the order of the trial court. It held that the WarsawConvention is the law which governs the dispute between the petitioners and TWA because what is involved is internationaltransportation defined by said Convention in Article I(2). This holding is founded on its determination that the two TWA tickets for Los Angeles-New York-Boston-St. Louis-Chicago purchased in Bangkok, Thailand, were issued in conjunction with, and therefore formed part of, the contract of transportation performed from Manila, Philippines, to the United States. The respondent court further held that the cause of action of the petitioners arose from the loss of the four checked pieces of baggage, which then falls under Article 18(1), Chapter III (Liability of the Carrier) of the Warsaw Conventions. Pursuant to Article 24(1) of the Convention, all actions for damages, whether based on tort, code law or common law, arising from loss of baggage under Article 18 of the Warsaw Convention, can only be brought subject to the conditions and limits set forth in the Warsaw Convention. Article 28(1) thereof sets forth conditions and limits in that the action for damages may be instituted only in the territory of one of the High Contracting Parties, before the court of (1) the domicile of the carrier, (2) the carrier's principal place of business, (3) the place of business through which the contract has been made, or (4) the place of destination. Since the Philippines is not one of these places, aPhilippine Court, like the RTC, has no jurisdiction over the complaint for damages. Held: No, the Warsaw Convention is not applicable because the carriage or transportation was not international in character. The RTC is directed to proceed with pre-trial. It appears clear to us that TWA itself, the trial court, and the Court of Appeals impliedly admit that if the sole basis were the two TWA tickets for Los Angeles-New York-Boston-St. Louis-Chicago, the contracts cannot be brought within the term "internationaltransportation," as defined in Article I(2) of the Warsaw Convention. As provided therein, a contract is one of international transportation only if 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 transportation or a transshipment, 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, mandate or authority of another power, even though that power is not a party to this convention. There are then two categories of international transportation, (1) that where the place of departure and the place of destination are situated within the territories of two High Contracting Parties regardless of whether or not there be a break in the transportation or a transshipment; and (2) that where the place of departure and the place of destination are within the territory of a single High Contracting Party if there is an agreed stopping place within a territory subject to the sovereignty, mandate, or authority of another power, even though the power is not a party of the Convention. The contracts of transportation in this case are evidenced by the two TWA tickets, both purchased and issued in Bangkok, Thailand. On the basis alone of the provisions therein, it is obvious that the place of departure and the place of destination are all in the territory of theUnited States, or of a single High Contracting Party. The contracts, therefore, cannot come within the purview of the first category ofinternational transportation. Neither can it be under the second category since there was NO agreed stopping place within a territory subject to the sovereignty, mandate, or authority of another power. The only way to bring the contracts between Purita and Carmina Mapa, on the one hand, and TWA, on the other, within the first category of "international transportation" is to link them with, or to make them an integral part of, the Manila-Los Angeles travel of Purita and Carmina through PAL aircraft. The "linkages" which have been pointed out by the TWA, the trial court, and the Court of Appeals are (1) the handwritten notations, on the two TWA tickets; and (2) the entries made by petitioners Purita and Carmina Mapa in column YOUR COMPLETE ITINERARY in TWA's Passenger Property Questionnaire, wherein they mentioned their travel fromManila to Los Angeles in flight PR 102. The alleged "international tickets" mentioned in the notations in conjunction with which the two TWA tickets were issued were not presented. Clearly then, there is at all no factual basis of the finding that the TWA tickets were issued in conjunction with the internationaltickets, which are even, at least as of now, non-existent. As regards the petitioner's entry in Your Complete Itenerary column of the Passenger Property Questionnaire wherein they included theManilaLos Angeles travel, it must be pointed out that this was made by petitioners Purita and Carmina Mapa, and only in connection with their claim for their lost pieces of baggage. The entry can by no means be considered as a part of, or supplement to, their contracts of transportation evidenced by the TWA tickets which covered transportation within the United States only. It must be underscored that the first category of international transportation under the Warsaw Convention is based on "the contract made by the parties." TWA does not claim that the Manila-Los Angeles contracts of transportation which brought Purita and Carmina to Los Angeles were also its contracts. It does not deny the assertion of the petitioners that those contracts were independent of the TWA tickets issued in Bangkok, Thailand. No evidence was offered that TWA and PAL had an agreement concerning transportation of passengers from points of departures not served with aircrafts of one or the other. TWA relies on Article I(3) of the Convention, which provides as follows:

3. A carriage to be performed by several successive air carriers is deemed, for the purposes of this Convention, to be one undivided carriage, if it has been regarded by the parties as a single operation, whether it had 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. The flaw of respondent's position is the presumption that the parties have "regarded" as an "undivided carriage" or as a "single operation" the carriage from Manila to Los Angeles through PAL then to New YorkBoston-St. Louis-Chicago through TWA. Pan American World Airways vs. Rapadas (G.R. No. 60673) Facts: Private respondent Jose Rapadas held passenger ticket and baggage claim check for petitioners flight No. 841 with the route from Guam to Manila. While standing inline to board the flight at the Guam Airport, Rapadas was ordered by petitioners hand carry control agent to check-in his samsonite attach case. Rapadas protested pointing to the fact that other co-pasengers were permitted to hand carry baggage. He stepped out of the line only to go back again at the end of it to try of he can get through without having to register his attach case. However, the same man in charge of had carry control did not fail to notice him and ordered him again to register his baggage. Upon arriving in Manila on the same day, Rapadas claimed and was given all his checked in baggage except the attach case. Issue: Whether or not a passenger is bound by the terms of a passenger under the Warsaw convention, shall apply in case of loss, damage or destruction to a registered luggage of a passenger. Held: After a review of the various arguments of the appointing parties, the court found sufficient basis under the particular facts of the case for the availment of the liability limitations under the Warsaw Convention. There is no dispute and the courts below admit that there was such a notice appearing on page 2 of the airline ticket stating that the Warsaw Convention governs in case of death or injury of passengers or of loss, damage or destructionto a passengers luggage. Art. 22(4) of the Warsaw Convention does not preclude an award of attorneys fees. That provision states that the limits of liability prescribed in the instrument shall not prevent the court from awarding in accordance with its own law, in addition, the whole or part of the court costs and other expenses of litigation incurred by the plaintiff. KLM Royal Dutch Airlines vs Court of Appeals (65 SCRA 237) Facts: Spouses Mendoza approached Mr. Reyes, the branch manager of Philippine Travel Bureau, for consultation about a world tour which they were intending to make with their daughter and niece. Three segments of the trip, the longest, was via KLM. Respondents decided that one of the routes they will take was a Barcelona-Lourdes route with knowledge that only one airline, Aer Lingus, served it. Reyes made the necessary reservations. To this, KLM secured seat reservations for the Mendozas and their companions from the carriers which would ferry them throughout their trip, which the exception of Aer Lingus. When the Mendozas left the Philippines, they were issued KLM tickets for the entire trip. However, their coupon for Aer Lingus was marked 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 and shouted at them. So the spouses Mendozas took a train ride to Lourdes instead. Thus, they filed a complaint for damages against KLM for breach of contract of carriage. The trial court decided in favor of the Mendozas. On appeal, the CA affirmed the decision. Hence, KLM brings this petition to the Supreme Court. KLM cites Art 30 of the Warsaw Convention, which states: the passenger or his representatives can take action only against the carrier who performed the transportation during which the accident or delay occurred. Also, KLM avers that the front cover of each ticket reads: that liability of the carrier for damages shall be limited to occurrences on its own line. Issue: Whether or not KLM is liable for breach of contract of carriage?

Held: The applicability of Art. 30 of the Warsaw Convention cannot be sustained. The article presupposes the occurrence of delay or accident. What is manifest here is that the Aer Lingus refused to transport the spouses Mendozas to their planned and contracted destination. As the airline which issued the tickets, KLM was chargeable with the duty and responsibility of specifically informing the spouses of the conditions prescribed in their tickets or to ascertain that the spouses read them before they accepted their passage tickets. The Supreme Court held that KLM cannot be merely assumed as a ticketissuing agent for other airlines and limit its liability to untoward occurrences on its own line. The court found, that the passage tickets provide that the carriage to be performed therein by several successive carriers is to be regarded as a single operation.

American Airlines vs Court of Appeals 6112010 | 327 scra 482 Contract of Carriage FACTS: Private respondent Amadeo Seno purchased from Singapore Airlines in Manila conjunction tickets. In Geneva, the petitioner decided to forego his trip to Copenhagen, and go straight to New York, private respondent exchanged the unused portion of the conjunction ticket from International Air Transport Association clearing house in Geneva. Private respondent filed an action for damages before the RTC of Cebu for the alleged embarrassment and mental anguish he suffered at the Geneva Airport when the petitioners security officers prevented him from boarding the plane, detained him for about an hour and allowed him to board the plane only after all the passengers have boarded. ISSUE: Whether or not the Philippine courts have jurisdiction over the action for damages. HELD: The Supreme Court ruled that the case was properly filed in the Philippines. It held that the petitioner acted as an agent of the Singapore Airlines under IATA rules and as an agent of the principal carrier the petitioner may be held liable under contract of carriage in Manila. China Airlines vs. Chiok G.R. No. 152122. July 30, 2003 Facts: Daniel Chiok purchased from China Airlines a passenger ticket for air transportation covering Manila-Taipei-Hong Kong-Manila. The said ticket was exclusively endorsable to PAL. Before Chiok his trip, the trips covered by the ticket were pre-scheduled and confirmed by the former. When petitioner arrived in Taipei, he went to CAL to confirm his Hong Kong- Manila trip on board PAL. The CAL office attached a yellow sticker indicating the status was OK. When Chiok reached Hong Kong, he then went to PAL office to confirm his flight back to Manila. The PAL also confirmed the status of his ticket and attached a ticket indicating a status OK. Chiok proceeded to Hong Kong airport for his trip to Manila. However, upon reaching the PAL counter, he was told that the flight to Manila was cancelled due to typhoon. He was informed that all confirmed flight ticket holders of PAL were automatically booked for the next flight the following day.

The next day, Chiok was not able to board the plane because his name did not appear on the computer as passenger for the said flight to Manila. Issue: Whether or not CAL is liable for damages? Held: The contract of air transportation between the petitioner and respondent, with the former endorsing PAL the segment of Chioks journey. Such contract of carriage has been treated in this jurisprudence as a single operation pursuant to Warsaw Convention, to which the Philippines is a party.

In the instant case, PAL as the carrying agent of CAL, the latter cannot evade liability to respondent, Chiok, even though it may have been only a ticket issuer for Hong Kong- Manila sector. Northwest Airlines, Inc. vs. Cuenca | Concepcion (1965) FACTS

Respondent Nicolas L. Cuenca (Cuenca) was the Commissioner of Public Highways; he was the official delegate of the Philippines to a conference in Tokyo and, thus, he purchased a first class ticket from petitioner Northwest Airlines, Inc. (Northwest). o His ticket was marked W/L meaning he was waitlisted but his attention was never called thereto and he wasnt advised what it meant. Cuenca was given first class accommodation upon boarding the plane in Manila but, upon arrival at Okinawa, he was transferred to the tourist class. o Although he revealed that he was traveling in his official capacity, an agent of Northwest 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 Japan. Cuenca brought suit in the CFI in Manila which held Northwest liable for damages; this was affirmed by the CA.

ISSUES/HELD Does Cuenca have a cause of action against Northwest? YES. Is the award of nominal damages proper? YES. RATIONALE ST 1 ISSUE The instances specified in Arts. 17-19 of the Warsaw Convention 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 the carrier. Otherwise, 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. Thus, Cuenca has a cause of action for breach of contract against Northwest. ND 2 ISSUE The award of nominal damages is proper considering that the CA has adjudicated no compensatory, moral, and exemplary damages to Cuenca. Also, it is proper considering the following circumstances: o Cuenca was never advised that he was merely waitlisted; o After having been given first class accommodation in Manila, Cuenca was entitled to believe that his first class reservation was confirmed and would continue until his ultimate destination, Tokyo; o Notwithstanding this, Northwest rudely breached the contract, even with full knowledge of the fact that Cuenca was an official representative of the Philippines; o Northwest never explained that the person to whom Cuencas first class seat was given had a better right thereto. At any rate, considering the Northwests agent had acted in a wanton, reckless, and oppressive manner, said award may also be considered as one for exemplary damages. Luna vs. Court of Appeals | Bellosillo (1992) FACTS

flown to Seattle, U.S.A. It was only after 4 days later, and after repeated representations with Northwest Airlines personnel at the airport in Korea that petitioners were able to retrieve their luggage. By then the Convention was almost over. Petitioners Rufino Y. Luna and Rodolfo J. Alfonso assert that 13 days after they recovered their luggage, they sent a written claim to Northwest. Petitioner Porfirio Rodriquez also filed his claim. But Northwest disowned any liability for the delay, saying that it exerted "its best efforts to carry the passenger and baggage with reasonable dispatch." Petitioners filed their complaints. TC dismissed their complaints for lack of cause of action due to petitioners' failure to state in their complaints that they filed a prior claim with Northwest within the prescribed period. CA, applying the Warsaw Convention dismissed the petition of Luna and Alonso. Petitioners alleged that: o The CA disregarded the ruling that "[t]he Convention does not operate as an exclusive enumeration of the instances of an airline's liability, or as an absolute limit of the extent of that liability;" o That "petitions to revoke orders and decisions may be entertained even after the time to appeal had elapsed, in cases where the jurisdiction of the court had been exceeded;" o That Art. 26 of the Warsaw Convention which prescribes the reglementary period within which to file a claim cannot be invoked if damage is caused by the carrier's willful misconduct, as provided by Art. 25 of the Warsaw Convention. Northwest maintains that it did not receive any demand letter from petitioners within the 21-day reglementary period, as provided in par. 7 of the Conditions of Contract appearing in the plane ticket. Under Art. 26. par. (4), of the Warsaw 1 Convention , the carrier cannot be held liable for the delay in the delivery of the baggage. In other words, non-observance of the prescribed period to file a claim bars claimant's action in court for recovery. Northwest also alleges that Art. 25, par. (1), of the Warsaw Convention which excludes or limits liability of common carriers if the damage is caused by its willful misconduct, refers only to the monetary ceiling on damages found in Art. 22.

ISSUES/HELD WoN the CA erred in dismissing the complaints of the petitioners merely based on the Warsaw Convention? YES. WoN the common carrier incurred wilful negligence? NO. RATIONALE ST 1 ISSUE It was ruled that the Warsaw Convention was a treaty commitment voluntarily assumed by the Philippine government; thus, it has the force and effect of law in this country. But the Warsaw Convention does not operate as an exclusive enumeration of the instances for declaring an airline liable for breach of contract of carriage or as an absolute limit of the extent of that liability. The Convention just declares the carrier liable for damages in the cited cases, if the conditions specified are present. It does not regulate the liability, much less exempt, the carrier for violating the rights of others which must simply be respected in accordance with their contracts of carriage. The application of the Convention must not be construed to preclude the operation of the Civil Code and other pertinent laws. Thus, petitioners' alleged failure to file a claim with the common carrier under the Warsaw Convention should not be a ground for the summary dismissal of their complaints since private respondent may still be held liable for breach of other relevant laws which may provide a different period or procedure for filing a claim. Considering that petitioners indeed filed a claim which private respondent admitted having received on 21 June, 1989, their demand may have very well been filed within the period prescribed by those applicable laws. Thus, respondent TC and CA, were in error when they limited themselves to the provisions of the Warsaw Convention and disregarded completely the Civil Code.
1

Petitioners Rufino Luna, Rodolfo Alonso and Porfirio Rodriguez boarded private respondent Northwest Airlines bound for Seoul to attend a 4-day Convention. They checked in 1 piece of luggage each. After boarding, however, due to engine trouble, they were asked to disembark and transfer to a Korean Airlines plane. They were assured that their baggage would be with them in the same flight. When petitioners arrived in Seoul, they discovered that their personal belongings were nowhere to be found but were

"[f]ailing complaint within the times aforesaid, no action shall lie against the carrier, save in the case of fraud on his part,"

ISSUE The SC does not agree that Art. 25 of the Convention excludes the other provisions of the Convention if damage is caused by the common carrier's willful misconduct. As correctly pointed out by Northwest, Art. 25 refers only to the monetary ceiling on damages found in Art. 22 should damage be caused by the carrier's willful misconduct. Hence, only the provisions of Art. 22 limiting the carrier's liability and imposing a monetary ceiling in case of willful misconduct on its part that the carrier cannot invoke. This issue however has become academic in the light of our ruling that the trial courts erred in dismissing petitioners' respective complaints. The SC is not prepared to subscribe to petitioners' argument that the failure of private respondent to deliver their luggage at the designated time and place amounted ipso facto to willful misconduct. For willful misconduct to exist, there must be a showing that the acts complained of were impelled by an intention to violate the law, or were in persistent disregard of one's rights. It must be evidenced by a flagrantly or shamefully wrong or improper conduct. PHILIPPINE AIRLINES, INC., petitioner, vs. THE INTERMEDIATE APPELLATE COURT, GEORGE LORENZANA and VERONICA G. LORENZANA, respondents. DECISION MELO, J p: According to the court of origin, petitioner's liability for the missing luggage owned by private respondent can be attributed to the nondelivery thereof to the Pan Am Office in Tokyo after it was received by petitioner's office at the Manila International Airport (Page 11, Record on Appeal; Page 38, Rollo). Both petitioner and Pan American World Airways, Inc. appealed the adverse finding but the First Civil Cases Division of the then Intermediate Appellate Court, (P.J. Gaviola, Caguioa (P), Quetulio-Losa, Ines-Luciano, JJ.), was far from persuaded. The decretal portion rendered by the appellate court which petitioner impugns via the petition for certiorari before Us reads: "WHEREFORE, No. 1 of the dispositive portion of the judgment of the trial court, dated January 31, 1979 is hereby modified so as to read: 1) Ordering defendants, jointly and severally, to pay plaintiffs as actual damages the sum of $5,000 or its equivalent in Philippine currency computed according to the rate of exchange of the date of the promulgation of this decision, with interest thereon at the legal rate of 12% per annum from the date of the filing of the complaint until the amount of this judgment is fully paid. The rest of the dispositive portion from pars. 2 to par. 5 are hereby affirmed." (Page 14, Decision; Page 53, Rollo) Cdpr Before boarding petitioner's airplane on August 4, 1974 for their business sojourn from Manila to Honolulu via Tokyo, private respondents, the spouses George and Veronica Lorenzana, checked in two pieces of baggage for which they were given baggage claim tickets. George's personal effects and some of Veronica's things were in one baggage while the other luggage contained Veronica's other personal items and samples of women's apparel intended to be shown to prospective customers in America and Canada. On the Tokyo-Honolulu leg, they changed planes from PAL to Pan Am. When they arrived in Honolulu, only the luggage containing George's personal effects was located. Efforts exerted to report and claim the missing bag were futile and instead, private respondents were requested to follow-up the matter during their stay in Honolulu. After staying in Honolulu for three days, without the missing luggage being delivered to them, George and Veronica decided to fly to Los Angeles where they stayed for more than a week before leaving for San Francisco where they spent two days. Thereafter, the couple proceeded to Vancouver and Toronto, Canada and returned to Manila on September 24, 1974. It was sometime in April, 1975 when the couple was informed that the luggage was located and on December 5, 1975, the luggage was finally delivered to them. It turned out that the missing luggage was not turned over by the employees of the Philippines Airlines to the Pan Am Office in Tokyo and that the baggage was returned to Manila on September 16, 1974. In the suit for breach of contract, Pan Am interposed the defense that it did not receive the baggage from the Philippine Airlines. For its part, PAL admitted that it failed to deliver one of the pieces of luggage at the destination of private respondents in the United States and during the entire trip (paragraph 6, Answer). Nevertheless, it proferred the excuse that private respondents omitted to retrieve the bag after George was

ND

informed of its discovery and that at any rate, the carrier's liability under the Warsaw Convention is limited, in the absence of a declaration from the passenger, of a higher value (paragraph 15, Answer). After due hearing, the trial court pronounced petitioner accountable for the non-delivery mainly due to its frank representation that it breached the contract with private respondents (Page 4, Decision; page 38, Record on Appeal). On the other hand, the appellate court relied more on the presumption of culpa which neither PAL nor Pan Am was able to overcome by the requisite quantum of evidence. Regarding the exculpation raised by petitioner premised on the caveat under the Warsaw Convention, respondent court expressed the view that the proviso which concerns limited culpability for damage, loss or delay in transportation of the goods is inapplicable since the bag was not delivered to private respondent during the whole trip. On the expenses incurred by private respondents, the appellate court sustained the claim of $5,000 asserted by private respondent George Lorenzana on the witness stand representing the cost of the tickets and travelling expenses, in default of any evidence to the contrary. The socalled unrealized income was perceived as speculative while the trial court's refusal to grant moral and exemplary damages was affirmed by the reviewing authority. LLphil In the petition at bar, petitioner ascribes five errors which were supposedly committed by the appellate court yet, a serious study of the different angles for possible reversal fails to muster the desired conclusion. Petitioner begins with the hypothesis that it is private respondents who should be faulted for the alleged "delay in delivery" because an appreciable length of time elapsed from the moment they were informed of the whereabouts of the bag until an effort was exerted to retrieve it. However, an argument of this nature, which springs from petitioner's incongruous interpretation of "delay", is far from persuasive, since it is designed to toss the onus probandi on the admitted fact of non-delivery by the carrier to the passenger's shoulders. To be sure, it was ingeniously crafted for the purpose of extricating petitioner from the fatal aftermath of its admission in judicio for it was explicitly stated in its Answer that petitioner failed to deliver the baggage to private respondents during the entire length of the trip (paragraph 6, Answer; Article 1431, new Civil Code; Section 4, Rule 129; Section 2(a), Rule 131, Revised Rules on Evidence). Indeed, petitioner is quite candid in conceding at this stage that "the baggage was meant to travel with respondents Lorenzanas all the way until their return to Manila" (Page 12, Petition; Page 23, Rollo) which stance is enough to negate petitioner's concept of delay. By parity of reasoning: "'Delay'," as used in a contract exempting a telegraph company from all liability for any delay, error, or remissness in sending a message, implies that the message was or would be sent at some time, but not sent or delivered promptly, and the company is not exempt from liability for a total failure to send and deliver a message." (Balduin vs. U.S., Tel. Co., N.Y., 54 Barb. 505, 512, 6 Abb. Prac. N.S., 405, 423; 11-A Words and Phrases, Permanent Edition, 1971, page 414). To bring the case within the ambit of the limited liability clause for loss, damage, or delay under Article 22 in conjunction with the second paragraph of Article 26 of the Warsaw Convention, petitioner is inclined to construe its accountability by arguing that the missing bag was merely delayed. Petitioner is categorical in its disputation that since the bag was neither lost nor damaged, the baggage was merely delayed, hence the caveat must perforce apply. (Page 10, Memorandum; Page 133, Rollo). This process of exclusion typifies the classic fallacy of nonsequitur because the fact of the matter is that the missing luggage was not turned over by the employees of petitioner to the Pan Am Office in Tokyo and was returned to Manila on September 16, 1974 (Page 3, Decision in Civil Case No. 103684; Page 38, Record on Appeal). Still worse, the luggage was not forthwith delivered to private respondents who returned from their trip to the U.S. and Canada on September 24, 1974. It was not until more than a year thereafter, or on December 5, 1975, when the luggage was finally delivered to private respondents. There is thus no occasion to speak of delay since the baggage was not delivered at all to the passenger for purposes of the trip in contravention of a common carrier's undertaking to transport the goods from the place of embarkation to the ultimate point of destination. In point of law, petitioner cannot therefore ascribe an alleged reversible error on the part of respondent court for adhering to the pronouncement of this Court in Northwest Airlines, Inc. vs. Cuenca (14 SCRA 1063 [1965]) when the exculpatory clauses raised by the common carrier therein, predicated on the limited liability provisions under the Warsaw Pact, were brushed aside in this manner:

"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 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 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." (at p. 1065.) llcd Petitioner argues next that the award of damages is bereft of factual foundation. But the record in the court of origin, as synthesized by respondent court, reflects the bases for entitlement thereto: "Plaintiffs' stand on actual damages is sustained by the law and the evidence. Because of the nondelivery of the luggage during the entire length of plaintiffs' stay abroad, the entire purpose of their trip was frustrated. This conclusion is borne by the testimonies of plaintiffs who declare without contradiction that plaintiff Veronica G. Lorenzana was not able to promote the sale of her ready made dresses through outlets in the United States and Canada to whom plaintiffs have been supplying Philippine food products (pp. 19-20, tsn., Feb. 16, 1977; pp. 4 and 11, tsn., March 4, 1977), resulting in loss to plaintiff of an expected profit estimated at US$14,000.00 (p. 26, tsn., Dec. 10, 1976). It has been proven, too, by the declaration of plaintiff George Lorenzana that they spent US$5,000.00 for their round trip tickets and other travelling expenses (p. 26, Id.). Computed at the exchange rate of P7.43 to US$1.00, which appears to be accepted by the parties as the prevailing rate when the loss of business income occurred, the actual damages sustained by plaintiffs would amount to P141,170.00 in Philippine Currency."(Page 9, Decision; Page 48, Rollo) The belated notion advanced by petitioner relative to the absence of credibility on the part of private respondents along this line is also devoid of substance because the conclusion drawn by the trial court as a result of assigning values to narrations at the witness stand command great respect (2 Regalado, Remedial Law Compendium, Sixth Revised Edition, 1989, page 553). It has been repeatedly emphasized in adjective law that a factual query similar to the challenge posed by petitioner is proscribed by and is anathema to the second paragraph of Section 2, Rule 45 of the Revised Rules of Court, absent any convincing demonstration from petitioner of an exceptional circumstance that could have justified deviation from the rule (1 Regalado, Remedial Law Compendium, Fifth Revised Edition, 1988, page 53; Universal Motors Corporation vs. Court of Appeals (205 SCRA 448; 455 [1992]). And because of these precepts, petitioners may not likewise assail the award of attorney's fees which respondent court deemed appropriate to uphold. Lastly, contrary to the opinion expressed by petitioner concerning the pronouncement made by respondent court in requiring petitioner to pay damages in the sum of $5,000.00, We believe and so hold that there was no transgression of the Uniform Currency Act since, assuming that Republic Act No. 529, as amended, applies, the obligation itself is still valid to be discharged by payment in legal tender (Vitug, Pandect of Commercial Law and Jurisprudence, Revised Edition, 1990, page 72) which was what respondent court did in requiring petitioner to pay the $5,000.00 or its equivalent in Philippine Currency. WHEREFORE, the petition is hereby DISMISSED, and the decision of the respondent court AFFIRMED, with costs against petitioner. SO ORDERED. PHILIPPINE AIRLINES, INC., petitioner, vs. THE COURT OF APPEALS and CHUA MIN, respondents. (I-44936, sept 25,1992)

MELO, J p: On December 10, 1974, the Honorable Francisco de la Rosa, at that time Presiding Judge of Branch 7 of the then Court of First Instance of Rizal of the Seventh Judicial District stationed in Pasay City, adjudged the accountability of herein petitioner as defendant in a suit for a sum of money in this manner: "WHEREFORE, judgment is hereby rendered in favor of Plaintiff: (a)Ordering Defendant to pay Plaintiff the amount in Philippine Pesos equivalent to U.S.$4,000.00 at the rate of exchange obtaining in March, 1972, with legal interest from the filing of this suit until fully paid; (b)Ordering Defendant to pay the costs; and (c)Dismissing Defendants' Compulsory Counterclaim." (p. 70, Record on Appeal). The foregoing conclusion was formulated by the court of origin on the basis of the following facts: On April 4, 1972, private respondent boarded herein petitioner's Flight PR 301 from Hongkong to Manila and checked in four (4) pieces of baggage. When the plane landed in Manila, private respondent was not able to locate the two pieces of baggage containing cinematographic films despite diligent search therefor. Private respondent made the claim for such loss to petitioner which admitted the loss and offered to compensate private respondent (Annex "3", Answer; page 17, Record on Appeal; page 64, Rollo). Instead of accepting the offer, private respondent opted to file the case below to principally recover the value of the lost items which he estimated to be worth P20,000.00 (paragraph 7, Complaint; page 3, Record on Appeal). Herein petitioner responded by asserting that: LLjur "(4)Plaintiff has no cause of action against defendant. (5)On 4 April 1972, plaintiff was a passenger, economy class on defendant's Flight No. PR 301/4 April 1972, from Hongkong to Manila, under Passenger Ticket No. 2974-231418. As such passenger, plaintiff checked-in four (4) pieces of baggage, with a total weight of only twenty (20) kilos, inclusive of their contents such that it would be physically impossible for the two alleged lost pieces, to have in themselves an aggregate weight of twenty-five (25) kilos. (6)As such passenger the contractual relationship between plaintiff and defendant is wholly governed by the terms, conditions and stipulations which are clearly printed on plaintiff's Passenger Ticket No. 2974231418. Among the stipulations embodied in said ticket is a provision granting plaintiff a free baggage allowance of twenty (20) kilos. A copy of this provision, as embodied in plaintiff's ticket is attached hereto as Annex "1" and made part hereof. (7)In accordance with and in pursuant of this free baggage allowance Annex "1") plaintiff checked-in his four (4) pieces of baggage on Flight No. PR301/4 April 1972, for which he was issued corresponding baggage checks among them baggage checks Nos. PR 24-89-61 and PR 24-89-76, covering plaintiff's two alleged lost pieces of baggage. (8)Under Passenger Ticket No. 2974-231-418, which is the contract of carriage between plaintiff and defendant, it is an express condition of the contract that the same shall be 'subject to the rules and limitations relating to liability established by the Warsaw Convention.' A xerox copy of page 2 of plaintiff's Passenger Ticket No. 2974-231418 which contains the aforesaid condition is hereto attached as Annex "2" and made part hereof. (9)Under applicable rules and regulations of the Warsaw Convention on International Carriage by Air (as amended by the Hague Protocol of 1955), which is the convention referred to in Annex "2" hereof, defendant's liability for plaintiff's two (2) alleged lost pieces of baggage is limited to a maximum of US$6.50 per kilogram. (10)The total weight of plaintiff's four (4) pieces of checked-in baggage, inclusive of their contents, was only twenty (20) kilograms, such that

each baggage would have an average weight of five (5) kilograms, and the two alleged lost pieces, an average total weight of only ten (10) kilograms. Accordingly, defendant's maximum liability to plaintiff is US$165.00, or its equivalent in Philippine currency."(pp. 6-8, Record on Appeal) After issues were joined, then plaintiff, now private respondent Chua Min testified and presented four documents (p. 57, Record on Appeal) while petitioner did not call any witness and merely adopted three exhibits of herein private respondent (p. 58, Record on Appeal). prcd Petitioner attempted to challenge private respondent's personality to file the suit on the ground that the film rolls belonged to the Hongkong firm of "Loong Kee Pen Co., Film Exchange Dept.", apart from the vacillating testimony spewed by Chua Min on the witness stand which supposedly suggests that he has no right to seek restitution for the lost films, including the damages resulting therefrom. On the merits of private respondent's plea for relief, petitioner tried to call the attention of the trial judge to the herein below quoted provisions of the Warsaw Convention which limit the liability of petitioner as an air carrier to 250 francs per kilogram, thus: "ARTICLE 3 (1). For the transportation of passengers the carrier must deliver a passenger ticket which shall contain the following particulars: (e)A statement that the transportation is subject to the rules relating to liability established by this convention." "ARTICLE 22 (2). In the transportation of checked baggage and of goods, the liability of the carrier shall be limited to a sum of 250 francs per kilogram, unless the consignor has made, at the time when the package was handed over to the carrier, a special declaration of the value at delivery and has paid a supplementary sum if the case so requires. In that case the carrier will be liable to pay a sum not exceeding the declared sum, unless he proves that the sum is greater than the actual value to the consignor at delivery." In resolving the issue of private respondent's legal standing to sue, the trial court expressed the view that he can be considered as if he were the owner on account of his responsibility for any eventuality that may occur to the film rolls. Verily, private respondent was considered to be a consignee of the lost goods since he accompanied the films aboard petitioner's plane who is presumed to have accepted the contract of carriage between the consignor and petitioner when he later demanded the delivery to him of the movie films (p. 63, Record on Appeal). Anent the aspect of liability, the trial court opined that since petitioner did not introduce a single piece of document and merely adopted private respondent's exhibits, it may not invoke the limitation of its liability with respect to 'checked baggage' under the provisions of the Warsaw Convention. The apathy of petitioner seems to have extended its impact on the outcome of the case when the trial court ruled that the films were worth $4,000.00 based on private respondent's Exhibit "A" which, as aforesaid, was nonchalantly adopted by petitioner as its Exhibit "1" (p. 69, Record on Appeal). cdll Realizing the vacuum insofar as the evidence is concerned, petitioner tried to fill the hiatus by starting with the proposition in its motion for reconsideration that the ticket under which private respondent was a passenger on petitioner's plane was a passenger ticket and baggage check at the same time. This tactic was resorted to in order to establish the conclusion that petitioner could not have produced the same since the ticket is usually retained by the passenger. Petitioner continued to asseverate that Article 4 paragraph 4 of the Warsaw Convention which reads: "(4)The absence, irregularity, or loss of the baggage checks shall not affect the existence or the validity of the contract of transportation which shall nonetheless be subject to the rules of this convention. Nevertheless, if the carrier accepts baggage without a baggage check having been delivered, or if the baggage check does not contain the particulars set out at (d), (f), and (h) above, the carrier shall not be entitled to avail himself of those provisions of the convention which exclude or limit his liability."(p. 66, Record on Appeal; p. 23, Motion for Reconsideration, p. 65, Rollo)

upon which provision the trial court allegedly relied in rejecting petitioner's contention, is in fact applicable judging from what is explicitly stated under the first sentence of the proviso. These ideas, however, did not persuade the trial judge to reconsider his findings of accountability on the part of petitioner (p. 111, Record on Appeal). The appeal interposed therefrom to the Court of Appeals was likewise rebuffed on September 17, 1976 by the Fifth Division (Fernandez (ponente), Serrano, Batacan,JJ.) which sustained the observations and dispositions reached by the trial court on the same grounds, except that the sum of $4,000.00 was directed to be paid by petitioner in Philippine Currency, at the exchange rate obtaining on the date the amount is actually paid to herein private respondent (pp. 43-44, Rollo). Petitioner's subsequent recourse to secure re-evaluation of the judgment did not merit the nod of approval of the respondent Court of Appeals (p. 56, Rollo). Thereupon, petitioner elevated to Us the matter of its liability under the contract of carriage via the instant petition for review on certiorari, asking this Court: "I WHETHER OR NOT PETITIONER CAN AVAIL OF THE LIMITATIONS ON LIABILITY UNDER THE WARSAW CONVENTION. II WHETHER OR NOT RESPONDENT IS THE REAL PARTY-IN-INTEREST TO ASSERT THE CLAIM FOR COMPENSATION IN THIS CASE." Before discussing the intrinsic worth of petitioner's discourse, We shall address the issue of private respondent's personality to seek redress for the loss of the films. We believe, and so hold, that Chua Min is no stranger to the cause of action instituted at the court of origin in spite of the message conveyed by him when he sat on the witness stand which seems to lead to the opposite conclusion, thus: llcd "ATTY. LAURETA: Q.Mr. Chua Min, may I invite your attention to Exhibit A, particularly the entry which reads: 'To De Mil Theatrical Corporation.' This is the corporation which bought supposedly the motion picture films listed in this invoice? WITNESS: A.It was not bought by the company, sir. It was only entrusted by Loong kee Pen to be distributed here in the Philippines. ATTY. LAURETA: Q.So that the films listed here (Exhibit 'A' for plaintiff) is owned by Loong Kee Pen Company of Hongkong? WITNESS: A.Yes sir, and it was only entrusted to De Mil Theatrical Corporation. Q.This De Mil Theatrical Corporation, is this an existing corporation? A.Yes, sir. Q.Now, these films listed herein which numbers 5 in all are still owned by the supplier, Loong Kee Pen Company of Hongkong. Do I understand then that those films which were supposedly lost were not paid for by De Mil Theatrical Corporation? A.It was not paid, sir. It was authorized to be the distributor but we take responsibility of all losses, of everything. Q.Now, when your made reference to 'we', you refer actually to the De Mil Theatrical Corporation?

A.Yes, sir. Q.Do I understand, therefore, that you, De Mil Theatrical Corporation, has already paid for the films in cartoons No. 3, 4 and 5, as specified in the invoice? A.It's not yet paid, sir. (pp. 73-75, Record on Appeal) since what is important, per his narration, is that he assume the loss while these films are in his custody and that he is accountable either to Loong Kee Pen Company or to the De Mil Theatrical Corporation should he fail to produce the films upon demand. On the hypothetical scenario, had the judgment of the trial court been adverse in the sense that the complaint was ordered dismissed, the pecuniary burden for the loss will certainly fall on private respondent's shoulders, which obligation, it is needless to stress, will constitute a material and substantial injury to him. Withal, another pivotal factor to consider is the letter from petitioner on August 28, 1972 addressed to herein private respondent that says: "We are an receipt of your claim for loss of baggage in connection with your travel to Manila from Hongkong on our Flight. We sincerely regret that this loss occurred and that despite a careful search we have been unsuccessful in recovering your property.We feel we should settle your claim without further delay. We wish we could compensate you for the total amount of your loss. However, existing rules and regulations established pursuant to the Warsaw Convention on International Carriage by Air (as amended by the Hague Protocol) limit our liability for losses of this nature to the sum of US$16.50 for every kilogram of checked-in baggage. The weight of your 4 pieces of baggage inclusive of its contents as stated in the Property Irregularity Report (PIR) and your ticket shows a total weight of 20 kilos. Based thereon, the average weight of 2 pieces of your lost baggage would come out to 10 kilos. Therefore, our maximum liability for the 2 pieces should be for a total amount of US$165.00 (10 kilos x US$16.50). Upon receipt of your advise, we shall have payment remitted in your favor."(pp. 17-18, Record on Appeal) which seems to be at least a failure to object to, if not an admission of, the personality of private respondent to initiate the suit below. The assurance made by petitioner that it will compensate private respondent's loss is a sufficient admission that indeed, private respondent has the right to avail himself of the suit for the sum of money. It follows, therefore, that whatever testimony may have been extracted through cross-examination from Chua Min, is of no legal bearing to what was expressly conceded previously by petitioner. Otherwise, We will in effect take the cudgels for petitioner and in the process, permit it to extricate itself from the fatal aftermath of an admission as a tenet under substantive law. Of course, the plea of avoidance raised by petitioner along this line is akin to lack of cause of action which may be utilized even for the first time on appeal (Section 1 (g), Rule 16; Section 2, Rule 9, Revised Rules of Court), but the adjective norm permitting such a belated defense under Section 2, Rule 9 of the Revised Rules of Court does not totally rule out the application of other legal doctrines under substantive law, like estoppel, to the elastic undertones of petitioner. Now, as to whether petitioner may utilize the provision under Article 22(2) of the Warsaw Convention which limits the liability of a common carrier for loss of baggage, We have to consider other salient features thereof such as Article 4, paragraph 1 that reads: LexLib "For the transportation of baggage, other than small personal objects of which the passenger takes charge himself, the carrier must deliver a baggage check." and the explicit wordings of Article 4, paragraph 4 of the same Convention that: "The absence, irregularity, or loss of the baggage checks shall not affect the existence or the validity of the contract of transportation which shall nonetheless be subject to the rules of this Convention. Nevertheless, if the carrier accepts baggage without a baggage check having been

delivered, or if the baggage check does not contain the particulars set out at (d), (f), and (h) above, the carrier shall not be entitled to avail himself of those provisions of the Convention which exclude or limit his liability." because these axioms will spell the difference between success and failure of the petition at bar. It may be recalled that petitioner made a categorical distinction between a passenger ticket and a baggage check when petitioner responded to the complaint for a sum of money (paragraphs 7 and 8, Answers; pp. 6-8, Record on Appeal; p. 2, supra). In its motion for reconsideration before the court a quo, petitioner had a sudden change of heart by asserting that the passenger ticket and the baggage check are one and the same thing (p. 81, Record on appeal). On a later occasion, it stressed that the 'baggage tags' were erroneously labeled as 'baggage checks' under paragraph 7 of its Answer to the Complaint (p. 3, Reply Brief for the Petitioner; p. 97, Rollo). But the question of semantics on whether the passenger ticket, the baggage check, and the tag refer to the same object is undoubtedly without legal significance and will not obliterate the fact that the baggage check was not presented by petitioner in the trial court inasmuch as it merely relied on, and adopted private respondent's exhibits, none of which was offered for the purpose of proving the missing link, so to speak (pp. 57-58, Record on Appeal). To rectify these lapses, petitioner argued that it is not in a position to introduce the baggage check in evidence since private respondent as passenger, is the one who retains possession thereof. Yet, such pretense does not sit well with what is expected of petitioner as an air carrier under Article 4 (2), Section II of the Warsaw Convention that: "The baggage check shall be made out in duplicate, one part for the passenger and the other part for the carrier." Consequently, petitioner can not capitalize on the limited liability clause under Article 22 (2) of the Warsaw Convention because of the unequivocal condition set forth under the second sentence of Article 4, paragraph 4 that: LibLex ". . . if the carrier accepts baggage without a baggage check having been delivered, or if the baggage check does not contain the particulars set out at (d), (f), and (h) above, the carrier shall not be entitled to avail himself of those provisions of the Convention which exclude or limit his liability." Petitioner contends that it is covered by the first and not by the second sentence of Article 4, paragraph 4 (page 8, supra). But the argument as proferred, requires Us to read something which is not so stated between the lines for the first sentence speaks only of the "existence" or the "validity" of the contract of transportation while the query on "liability" is particularly and directly resolved by the second sentence. To be sure, and even assuming in gratia argumenti that an inconsistency exists, the first sentence must be construed as the general proposition governing the existence or validity of the contract of transportation which must yield to the particular rule under the second sentence regarding liability. Furthermore, even if We consider the two sentences as particular in nature, the rule has been laid down that the clause which comes later shall be given effect upon the presumption that it expresses the dominant purpose of the instrument (Graham Paper Co. vs. National Newspapers Asso. (Mo. App.) 193 S.W. 1003; Barnett vs. Merchants' L. Ins. Co., 87 Okl. 42). WHEREFORE, the petition for review is hereby DISMISSED for lack of merit. SO ORDERED. PHILIPPINE AIR LINES, petitioner, vs. HON. COURT OF APPEALS and ISIDRO CO., respondents. (march 6,1992) SYLLABUS 1.REMEDIAL LAW; SUPREME COURT; NOT A TRIER OF FACTS. Whether or not the lost luggage was ever retrieved by the passenger, and whether or not the actual and exemplary damages awarded by the court to him are reasonable, are factual issues which we may not pass upon in

the absence of special circumstances requiring a review of the evidence. 2.CIVIL LAW; COMMON CARRIER; LIABILITY OF CARRIER FOR THE LOSS, DESTRUCTION OR DETERIORATION OF GOODS TRANSPORTED; GOVERNING LAWS; CASE AT BAR. Petitioner contends that under the Warsaw Convention, its liability, if any, cannot exceed US $20.00 based on weight as private respondent Co did not declare the contents of his baggage nor pay additional charges before the flight. We find no merit in that contention. In Samar Mining Company, Inc. vs. Nordeutscher Lloyd (132 SCRA 529), this Court ruled: "The liability of the common carrier for the loss, destruction or deterioration of goods transported from a foreign country to the Philippines is governed primarily by the New Civil Code. In all matters not regulated by said Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by Special Laws." Since the passenger's destination in this case was the Philippines, Philippine law governs the liability of the carrier for the loss of the passenger's luggage. 3.ID.; EXEMPLARY DAMAGES; JUSTIFIED IN CASE OF FAILURE TO SATISFY JUST AND VALID DEMANDABLE CLAIM. The award of exemplary damages and attorney's fees to the private respondent was justified. In the cases of Imperial Insurance, Inc. vs. Simon, (122 Phil. 189) and Bert Osmea and Associates vs. CA, (120 SCRA 396), the appellant was awarded attorney's fees because of appellee's failure to satisfy the former's just and valid demandable claim which forced the appellant to litigate. Likewise, in the case of Phil. Surety and Ins. Co., Inc. vs. Royal Oil Products, (102 Phil. 326), this Court justified the grant of exemplary damages and attorney's fees for the petitioner's failure, even refusal, to pay the private respondent's valid claim. DECISION GRIO-AQUINO, J p: This is a petition for review of the decision dated July 19, 1989 of the Court of Appeals affirming the decision of the Regional Trial Court of Pasay City which awarded P72,766.02 as damages and attorney's fees to private respondent Isidro Co for the loss of his checked-in baggage as a passenger of petitioner airline. llcd The findings of the trial court, which were adopted by the appellate court, are: "At about 5:30 a.m. on April 17, 1985, plaintiff [Co], accompanied by his wife and son, arrived at the Manila International Airport aboard defendant airline's PAL Flight No. 107 from San Francisco, California, U.S.A. Soon after his embarking (sic), plaintiff proceeded to the baggage retrieval area to claim his nine pieces of checked-in luggage with the corresponding claim checks in his possession. Plaintiff found eight of his luggage, but despite diligent search, he failed to locate the ninth luggage, with claim check number 729113 which is the one in question in this case. "Plaintiff then immediately notified defendant company through its employee, Willy Guevarra, who was then in charge of the PAL claim counter at the airport. Willy Guevarra, who testified during the trial court on April 11, 1986, filled up a printed form known as a Property Irregularity Report (Exh. 'A'), acknowledging one of the plaintiff's luggages to be missing (Exh. 'A-1'), and signed it after asking plaintiff himself to sign the same document (Exh. 'A-2'). In accordance with his procedure in cases if this nature, Willy Guevarra asked plaintiff to surrender to him the nine claim checks corresponding to the nine luggages, i.e., including the one that was missing. "The incontestable evidence further shows that plaintiff's lost luggage was a Samsonite suitcase measuring about 62 inches in length, worth about US $200.00 and containing various personal effects purchased by plaintiff and his wife during their stay in the United States and similar other items sent by their friends abroad to be given as presents to relatives in the Philippines. Plaintiff's invoices evidencing their purchases

show their missing personal effects to be worth US $1,243.01, in addition to the presents entrusted to them by their friends which plaintiff testified to be worth about US $500.00 to US $600.00 (Exhs. 'D,' 'D-1,' to 'D-17,' tsn, p. 9, July 11, 1985; pp. 5-14, March 7, 1986). "Plaintiff on several occasions unrelentingly called at defendant's office in order to pursue his complaint about his missing luggage but to no avail. Thus, on April 15, 1985, plaintiff through his lawyer wrote a demand letter to defendant company through Rebecca V. Santos, its manager, Central Baggage Services (Exhs. 'B' & 'B-1'). On April 17, 1985, Rebecca Santos replied to the demand letter (Exh. 'B') acknowledging 'that to date we have been unable to locate your client's (plaintiff's) baggage despite our careful search' and requesting plaintiff's counsel to 'please extend to him our sincere apologies for the inconvenience he was caused by this unfortunate incident' (Exh. 'C'). Despite the letter (Exh. 'C'), however, defendants never found plaintiff's missing luggage or paid its corresponding value. Consequently, on May 3, 1985, plaintiff filed his present complaint against said defendants." (pp. 38-40, Rollo.) Co sued the airline for damages. The Regional Trial Court of Pasay City found the defendant airline (now petitioner) liable, and rendered judgment on June 3, 1986, the dispositive portion of which reads: "WHEREFORE, judgment is hereby rendered sentencing defendant Philippine Airlines, Inc. to pay plaintiff Isidro Co: "1)P42,766.02 by way of actual damages; "2)P20,000.00 by way of exemplary damages; "3)P10,000.00 as attorney's fees; all in addition to the costs or the suit. "Defendants' counterclaim is hereby dismissed for lack of merit."(p. 40, Rollo.) On appeal, the Court of Appeals affirmed in toto the trial court's award. In his petition for review of the Court of Appeal's decision, petitioner alleges that the appellate court erred: 1.in affirming the conclusion of the trial court that petitioner's retrieval baggage report was a fabrication; 2.in not applying the limits of liability under the Warsaw Convention which limits the liability of an air carrier for loss, delay or damage to checked-in baggage to US $20.00 based on weight; and 3.in awarding private respondent Isidro Co actual and exemplary damages attorney's fees, and costs. The first and third assignments of error raise purely factual issues which are not reviewable by this Court (Sec. 2, Rule 45, Rules of Court). The Court reviews only questions of law which must be distinctly set forth in the petition. (Hodges vs. People, 68 Phil. 178.) The probative value of petitioner's retrieval report was passed upon by the Regional Trial Court of Pasay City, whose finding was affirmed by the Court of Appeals as follows: "In this respect, it is further argued that appellee should produce his claim tag if he had not surrendered it because there was no baggage received. It appeared, however, that appellee surrendered all the nine claim checks corresponding to the nine luggages, including the one that was missing, to the PAL officer after accomplishing the Property Irregularity Report. Therefore, it could not be possible for appellee to produce the same in court. It is now for appellant airlines to produce the veracity of their Baggage Retrieval Report by corroborating evidence other than testimonies of their employees. Such document is within the control of appellant and necessarily requires other corroborative evidence. Since there is no compelling reason to reverse the factual findings of the lower court, this Court resolves not to disturb the same." (p. 41, Rollo.)

Whether or not the lost luggage was ever retrieved by the passenger, and whether or not the actual and exemplary damages awarded by the court to him are reasonable, are factual issues which we may not pass upon in the absence of special circumstances requiring a review of the evidence. LLjur In Alitalia vs. IAC (192 SCRA 9, 18, citing Pan American World Airways, Inc. vs. IAC, 164 SCRA 268), the Warsaw Convention limiting the carrier's liability was applied because of a simple loss of baggage without any improper conduct on the part of the officials or employees of the airline, or other special injury sustained by the passengers. The petitioner therein did not declare a higher value for his luggage, much less did he pay an additional transportation charge. LLpr Petitioner contends that under the Warsaw Convention, its liability, if any, cannot exceed US $20.00 based on weight as private respondent Co did not declare the contents of his baggage nor pay additional charges before the flight (p. 3, tsn, July 18, 1985). We find no merit in that contention. In Samar Mining Company, Inc. vs. Nordeutscher Lloyd (132 SCRA 529), this Court ruled: "The liability of the common carrier for the loss, destruction or deterioration of goods transported from a foreign country to the Philippines is governed primarily by the New Civil Code. In all matters not regulated by said Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by Special Laws." The provisions of the New Civil Code on common carriers are Articles 1733, 1735 and 1753 which provide: "Art. 1733.Common carriers, from the nature of their business and for reasons of public policy, are bound to observe extraordinary diligence in the vigilance over the goods and for the safety of the passengers transported by them, according to all the circumstances of each case."

for the petitioner's failure, even refusal, to pay the private respondent's valid claim. WHEREFORE, the petition for review is DENIED for lack of merit. Costs against the petitioner.

Cathay Pacific Airways vs. CA (1993) Nature: Petition for review on certiorari of the decision of the Court of Appeals which affirmed with modification that of the trial court by increasing the award of damages in favor of private respondent Tomas L. Alcantara. Facts: On 19 October 1975, respondent Tomas L. Alcantara was a first class passenger of petitionerCathay Pacific Airways from Manila to Hongkong and onward from Hongkong to Jakarta. The purpose of his trip was to attend the following day, October 20, 1975, a conference with the Director General of Trade of Indonesia. He checked in his luggage which contained not only his clothing and articles for personal use but also papers and documents he needed for the conference. Upon his arrival in Jakarta, respondent discovered that his luggage was missing. Private respondent was told that his luggage was left behind in Hongkong. For this, respondent Alcantara was offered $20.00 as "inconvenience money" to buy his immediate personal needs until the luggage could be delivered to him. The respondent, as a result of the incident had to seek postponement of his pre-arranged conference. When his luggage finally reached Jakarta more than twenty four hours later, it was not delivered to him at his hotel but was required by petitioner to be picked up by an official of the PhilippineEmbassy. Respondent filed a case for damages in the CFI of Lanao del Norte which ruled in his favour.

"Art. 1735.In all cases other than those mentioned in Nos. 1, 2, 3, 4 and 5 of the preceding article if the goods are lost, destroyed or deteriorated, common carriers are presumed to have been at fault or to have acted negligently, unless they prove that they observed extraordinary diligence as required in article 1733. "Art. 1753.The law of the country to which the goods are to be transported shall govern the liability of the common carrier for their loss, destruction or deterioration." Since the passenger's destination in this case was the Philippines, Philippine law governs the liability of the carrier for the loss of the passenger's luggage. In this case, the petitioner failed to overcome, not only the presumption, but more importantly, the private respondent's evidence, proving that the carrier's negligence was the proximate cause of the loss of his baggage. Furthermore, petitioner acted in bad faith in faking a retrieval receipt to bail itself out of having to pay Co's claim. The Court of Appeals therefore did not err in disregarding the limits of liability under the Warsaw Convention. The award of exemplary damages and attorney's fees to the private respondent was justified. In the cases of Imperial Insurance, Inc. vs. Simon, 122 Phil. 189 and Bert Osmea and Associates vs. CA, 120 SCRA 396, the appellant was awarded attorney's fees because of appellee's failure to satisfy the former's just and valid demandable claim which forced the appellant to litigate. Likewise, in the case of Phil. Surety and Ins. Co., Inc. vs. Royal Oil Products, 102 Phil. 326, this Court justified the grant of exemplary damages and attorney's fees

Both parties appealed to the Court of Appeals. Court of Appeals rendered its decision affirming the decision of the CFI but by modifying its awards by increasing the damages. Issue: Whether or not the Court of Appeals erred in not applying the Warsaw Convention to limit the liability of the respondent airline. Ruling: No. xxx although the Warsaw Convention has the force and effect of law in this country, being a treaty commitment assumed by the Philippine government, said convention does not operate as an exclusive enumeration of the instances for declaring a carrier liable for breach of contract of carriage or as an absolute limit of the extent of that liability. The Warsaw Convention declares the carrier liable for damages in the enumerated cases and under certain limitations. However, it must not be construed to 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 wilfull misconduct on the part of the carrier's employees is found or established, which is clearly the case before Us. For, the Warsaw Convention itself provides in Art. 25 that "(1) The carrier shall not be entitled to avail himself of the provisions of this convention which exclude or limit his liability, if the damage is caused by his wilfull misconduct or by such default on his part as, in

accordance with the law of the court to which the case is submitted, is considered to be equivalent to wilfull misconduct." (2) Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused under the same circumstances by any agent of the carrier acting within the scope of his employment." When petitioner airline misplaced respondent's luggage and failed to deliver it to its passenger at the appointed place and time, some special species of injury must have been caused to him. For sure, the latter underwent profound distress and anxiety, and the fear of losing the opportunity to fulfill the purpose of his trip. In fact, for want of appropriate clothings for the occasion brought about by the delay of the arrival of his luggage, to his embarrassment and consternation respondent Alcantara had to seek postponement of his pre-arranged conference with the Director General of Trade of the host country. In one case, his Court observed that a traveller would naturally suffer mental anguish, anxiety and shock when he finds that his luggage did not travel with him and he finds himself in a foreign land without any article of clothing other than what he has on. Thus, respondent is entitled to moral and exemplary damages. We however find the award by the Court of Appeals of P80,000.00 for moral damages excessive, hence, We reduce the amount to P30,000.00. The exemplary damages of P20,000.00 being reasonable is maintained, as well as the attorney's fees of P25,000.00 considering that petitioner's act or omission has compelled Alcantara to litigate with third persons or to incur expenses to protect his interest. LUFTHANSA GERMAN AIRLINES vs CA 1.CIVIL LAW; OBLIGATION AND CONTRACTS; CONTRACT OF CARRIAGE; CARRIER ISSUING A CONFIRMED TICKET COVERING A FIVE-LEG TRIP ABOARD DIFFERENT AIRLINES, PRINCIPAL; LIABILITY FOR BREACH OF CONTRACT, PRINCIPAL. 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. 2.INTERNATIONAL LAW; WARSAW CONVENTION ON CONTRACT OF CARRIAGE; APPLICABLE ONLY TO OCCURRENCE OF ACCIDENT OR DELAY; CASE AT BAR. 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. 4.CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACT OF CARRIAGE; BREACH THEREOF MANIFESTED WITH BAD FAITH; CASE AT BAR. 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. In this petition for review on certiorari, the Court is confronted with the issue of whether or not petitioner Lufthansa German Airlines which issued a confirmed Lufthansa ticket to private respondent Antiporda covering a five-leg trip abroad different airlines should be held liable for damages occasioned by the "bumping-off" of said private respondent Antiporda by Air Kenya, one of the airlines contracted to carry him to a particular destination of the five-leg trip. 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. 1 On September 17, 1984, Lufthansa, through SGV, issued ticket No. 3477712678 for Antiporda's confirmed flights to Malawi, Africa. The ticket particularized his itinerary as follows: Carrier Flight Date Time Status Manila toSQ08125-9-841530OK Singapore Singapore toLH69525-9-842200OK Bombay Bombay toKQ20326-9-840215OK Nairobi Nairobi toQM33526-9-841395OK Lilongwe Lilongwe toQM03126-9-841600OK Blantyre 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. LLjur 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 2 of carriage." In reply, Lufthansa general manager Hagen Keilich assured Antiporda that the matter would be investigated. Apparently getting no positive action from Lufthansa, on January 21, 1985, Antiporda filed with the Regional Trial Court of Quezon City a complaint against Lufthansa which was docketed as Civil Case No. Q43810. The lower court, guided by the Supreme Court ruling in KLM Dutch 4 Airlines v. Court of Appeals, et al., found that Lufthansa breached the contract to transport Antiporda from Manila to Blantyre on a trip of five legs. It said: "The threshold issue that confronts this Court is: Was there a breach of obligation by the defendant in failing to transport the plaintiff from Manila to Blantyre, Malawi, Africa? The defendant admits the issuance and validity of Ticket No. 3477712678 (Exh. B). However, it denies its obligation to transport the plaintiff to his point of destination at Blantyre, Malawi, Africa. Defendant claims that it was obligated to transport the plaintiff only up to Bombay. This case is one of a contract of carriage. And the ticket issued by the defendant to the plaintiff is the written agreement between the parties herein. Ticket No. 3477712678 particularizes the itinerary of the plaintiff ... From the ticket, therefore, it is indubitably clear that it was the duty and responsibility of the defendant Lufthansa to transport the plaintiff from Manila to Blantyre, on a trip of five legs. The posture taken by the defendant that it was Air Kenya's, not Lufthansa's, liability to transport plaintiff from Bombay to Malawi, is unacceptable. The plaintiff dealt exclusively with the defendant Lufthansa which issued to him the ticket for his entire trip and which in effect guaranteed to the plaintiff that he would have sure space in Air Kenya's flight to Nairobi. Plaintiff, under that assurance of the defendant, naturally, had the right to expect that his ticket would be honored by Air Kenya, to which, in the legal sense, Lufthansa had endorsed and in effect guaranteed the performance of its principal engagement to carry out plaintiff's scheduled itinerary previously and mutually agreed upon by the parties. Defendant itself admitted that the flight from Manila, Singapore, Bombay, Nairobi, Lilongwe, Blantyre, Malawi, were all confirmed with the stamped letters 'OK' thereon. In short, after issuing a confirmed ticket from Manila to Malawi and receiv(ing) payment from the plaintiff for such one whole trip, how can the defendant now deny its contractual obligation by alleging that its responsibility ceased at the Bombay Airport? The contract of air transportation was exclusively between the plaintiff Antiporda and the defendant Lufthansa, the latter merely endorsing its performance to Air Kenya, as its subcontractor or agent. The fourth paragraph of the 'Conditions of Contracts' of the ticket (Exh. B) issued by Lufthansa to plaintiff indubitably shows that the contract was one of continuous air transportation from Manila to Blantyre, Malawi. '4.. . . carriage to be performed hereunder by several successive carriers is regarded as a single operation.' This condition embodied in the ticket issued to plaintiff is diametrically opposed to the defense theory that Lufthansa's liability is only limited up to Bombay." Pursuant to the above reasoning, the lower court held that Lufthansa cannot limit its liability as a mere ticket issuing agent for other airlines and only to untoward occurrences on its own line. The lower court added that under the pool arrangement of the International Air Transport Association (IATA), of which Lufthansa and Air Kenya are members, member airlines are agents of each other in the
3

issuance of tickets and, therefore, in accordance with Ortigas v. Lufthansa, 5 an airline company is considered bound by the mistakes committed by another member of IATA which, in behalf of the former, had confirmed a passenger's reservation for accommodation. In justifying its award of moral and exemplary damages, the lower court emphasized that the breach of contract was "aggravated by the discourteous and highly arbitrary conduct of Gerard Matias, an official of petitioner Lufthansa in Bombay." Its factual findings on the matter are the following: ". . . . Bumped off from his connecting flight to Nairobi and stranded in the Bombay Airport for 32 hours, when plaintiff insisted on taking his scheduled flight to Nairobi, Gerard Matias got angry and threw the ticket and passport on plaintiff's lap and was ordered to go to the basement with his heavy luggages for no reason at all. It was a difficult task for the plaintiff to carry three luggages and yet Gerard Matias did not even offer to help him. Plaintiff requested accommodation but Matias ignored it and just left. Not even Lufthansa office in Bombay, after learning plaintiff's being stranded in Bombay and his accommodation problem, provided any relief to plaintiff's sordid situation. Plaintiff had to stay in the transit area and could not sleep for fear that his luggages might be lost. Everytime he went to the toilet, he had to drag with him his luggages. He tried to eat the high-seasoned food available at the airport but developed stomach trouble. It was indeed a pathetic sight that the plaintiff, an official of the Central Bank, a multi-awarded institutional expert, tasked to perform consultancy work in a World Bank funded agricultural bank project in Malawi instead found himself stranded in a foreign land where nobody was expected to help him in his predicament except the defendant, who displayed utter lack of concern of its obligation to the plaintiff and left plaintiff alone in his misery at the Bombay airport." 6 Citing Air France v. Carrascoso, the lower court ruled that passengers have a right to be treated with kindness, respect, courtesy and consideration by the carrier's employees apart from their right to be protected against personal misconduct, injurious language, indignities and abuses from such employees. Consequently, the trial court ordered Lufthansa to pay Antiporda the following: "(a)the amount of P300,000.00 as moral damages; (b)the amount of P200,000.00 as exemplary damages; and (c)the amount of P50,000.00 as reasonable attorney's fees. With costs against the defendant." Lufthansa elevated the case to the Court of Appeals arguing that it cannot be held liable for the acts committed by Air Kenya on the basis of the following: (a)it merely acted as a ticket-issuing agent in behalf of Air Kenya; consequently the contract of carriage entered into is between respondent Antiporda and Air Kenya, to the exclusion of petitioner Lufthansa; (b)under sections (1) and (2) Article 30 of the Warsaw Convention, an airline carrier is liable only to untoward occurrences on its own line; (c)the award of moral and exemplary damages in addition to attorney's fees by the trial court is without basis in fact and in law. The Court of Appeals not convinced with Lufthansa's appeal, affirmed the decision on the trial court sought to be reviewed. LLphil 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. The appellate court also ruled that Lufthansa cannot rely on Sections (1) 7 and (2), Article 30 of the Warsaw Convention because the provisions thereof are not applicable under the circumstances of the case. Sections (1) and (2), Article 30 of the Warsaw Convention provide: "Art. 30 (1).In the case of transportation to be performed by various successive carriers and falling within the definition set out in the third paragraph of Article I, each carrier who accepts passengers, baggage, or goods shall be subject to the rules set out in the convention, and shall be deemed to be one of the contracting parties to the contract of transportation insofar as the contract deals with that part of the transportation which is performed under his supervision. (2)In the case of transportation of this nature, the passenger or his representative can take action only against the carrier who performed the transportation during which the accident or the delay occurred, save in the case where, by express agreement, the first carrier has assumed liability for the whole journey. (Emphasis supplied). According to the Court of Appeals, Antiporda's cause of action is not premised on the occurrence of an accident or delay as contemplated under Section 2 of said Article but on Air Kenya's refusal to transport him in order to accommodate another. To support this ruling, the Court of Appeals cited the Supreme Court ruling in KLM Royal Dutch Airlines v. Court of Appeals, 8 which held, inter alia, that: "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." The Court of Appeals concluded that Lufthansa cannot, thus, invoke Sections (1) and (2), Article 30 of the Warsaw Convention to evade liability. Failing to obtain a favorable decision, Lufthansa filed this petition for review on certiorari anchored on the following arguments: "1.The respondent court erred as a matter of law in refusing to apply the Warsaw Convention to the instant case. "2.Respondent court's ruling that Lufthansa had deceived private respondent has no factual or legal basis. "3.The respondent court erred as a matter of law in affirming the trial court's award of moral damages in the face of this Court's rulings concerning moral damages in cases of breach of contract. "4.The respondent court erred as a matter of law in affirming the trial court's award of exemplary damages for lack of legal or factual basis therefor." The arguments propounded by petitioner Lufthansa cannot suffice to reverse the appellate court's decision as prayed for. Lufthansa raised four assignments of error but the focal point at issue has been defined by us at the inception of this ponencia. LibLex 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 exclusive contract of carriage, the nature of which is a continuous carriage by air from Manila to Blantyre Malawi; that it did not enter into a series of independent contracts with the carriers that transported him for the remaining leg of his trip. The basis for such claim is well-founded. 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 acted 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 abroad 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 , 12 where the same issues were confronted, thus: 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." 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. . . ." 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." 13 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. 14 "Bumpingoff," 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. cdphil 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. Article 2220 of the Civil Code provides: "Art. 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." According to the findings of the appellate court which affirmed that of the lower court, the reasons given by the witnesses for Lufthansa for private respondent's being "bumped off" at Bombay airport were conflicting. Observed the Court of Appeals: "If there was really no seat available because of over-booking, why did Lufthansa confirm the ticket of the plaintiff-appellee? It has to be pointed out that the confirmed ticket is up to Blantyre, Malawi, not only to Bombay. If the plaintiff-appellee was not in the list of passengers of Kenya Airways (the connecting flight) then Lufthansa must have deceived him in Manila because according to Gerard Matias, the passengers booked by Kenya Airways for Boeing 707 were 190 passengers when the plane could accommodate only 144 passengers considering that the name of plaintiff-appellee was not in the list. If that was the situation, Lufthansa by the issuance of its ticket should have not assured the plaintiffappellee that he could get the connecting flights as scheduled. Surely, Lufthansa before confirming the ticket of the plaintiff-appellee must have confirmed the flight with Kenya Airways. If it was impossible to get a seat upon its own investigation in Bombay, then it should have not confirmed the ticket of the plaintiff-appellee. It is the defendantappellant who was negligent in the performance of its duties, and plaintiff-appellee was just plainly deceived. Since the ticket was marked O.K., meaning confirmed, therefore plaintiff-appellee must have a definite seat with Kenya Airways but it was lost or given to another person. It is not true therefore, that plaintiff-appellee's name was not in the list of Kenya Airways. Besides, why should Lufthansa allow a passenger to depart from the Philippines with a confirmed ticket, without instructing its Bombay office to reserve a seat with Kenya Airways for its connecting flight? In spite of the confirmation, Nelda Aquino testified that plaintiff-appellee was stranded in Bombay because he did not get a seat with Kenya Airways, and his name did not appear in the list of passengers. Then contrary to the testimonies of Berndt Loewe and Gerard Matias that the obligation of the defendant-appellant is only up to Bombay and the reason why plaintiff-appellee was not in the list of passengers is because of overbooking. Nelda Aquino contrary to the testimonies of the two, testified that the reason for the bumping-off is that the seat was given to another passenger, to wit: 'QDid you know or eventually learned later that the name of Antiporda was not in the list of confirmed passengers? AI only learned from the office at Bombay that it was given to other passenger which I only learned from the office at Bombay.

QWho informed you that the seat of Mr. Antiporda was given to other passenger? AFrom our international officer. QWho is he? AOur Sales Manager. QIs he your Sales Manager in Bombay? AYes, our Manager.' If Nelda Aquino knew that the reason for the bumping-off is that the seat was given to another, how come Berndt Loewe, passenger Sales Manager of defendant, Gerard Matias, an employee of defendantappellant in Bombay did not know the said reason why the name of plaintiff-appellee did not appear in the list of passengers? It is either they knew the truth but because they wanted to escape liability they pretended not to know the truth." 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. LibLex Antiporda is likewise entitled to the award of exemplary damages on the basis of Article 2232 of the Civil Code which provides: "Art. 2232.In contracts and quasi-contracts, the court may award exemplary damages if the defendant acted in a wanton, fraudulent, reckless, oppressive, or malevolent manner." There is every indication that Lufthansa, through its representatives in Bombay, acted in a reckless and malevolent manner in dealing with Antiporda. As found by the trial court:"The breach of the guarantee was aggravated by the discourteous and highly arbitrary conduct of Gerard Matias, an official of Lufthansa in Bombay. Bumped off from his connecting flight to Nairobi and stranded in the Bombay Airport for 32 hours, when plaintiff insisted on taking his scheduled flight to Nairobi, Gerard Matias got angry and threw the ticket and passport on plaintiff's lap and was ordered to go to the basement with his heavy luggages for no reason at all. It was a difficult task for the plaintiff to carry three luggages and yet Gerard Matias did not even offer to help him. Plaintiff requested accommodation but Matias ignored it and just left. Not even Lufthansa office in Bombay, after learning plaintiff's being stranded in Bombay and his accommodation problem, provided any relief to plaintiff's sordid situation. Plaintiff has to stay in the transit area and could not sleep for fear that his luggages might be lost. Everytime he went to the toilet, he had to drag with him his luggages. He tried to eat the high-seasoned food available at the airport but developed stomach trouble. It was indeed a pathetic sight that the plaintiff, an official of the Central Bank, a multi-awarded institutional expert, tasked to perform consultancy work in a World Bank funded agricultural bank project in Malawi instead found himself stranded in a foreign land where nobody was expected to help him in his predicament except the defendant, who displayed utter lack of concern of its obligation to the plaintiff and left plaintiff alone in his misery at the Bombay airport." These findings of the trial court were affirmed by the Court of Appeals on the ground that there are no cogent reasons to justify a contrary finding. The same holds true with this Court. The findings of fact of lower courts are binding on us and will not be generally disturbed on appeal. 15 In affirming the lower court's award of damages to Antiporda, we take into account his high position in the government, coupled with the fact that he failed to meet his professional commitment in Blantyre, Malawi due to the "bumping-off" incident accompanied by rude and discourteous behavior on the part of airline officials who should have been the first to attend to his travel needs. cdphil WHEREFORE, the petition for review is hereby DENIED and the decision of the Court of Appeals AFFIRMED. UNITED AIRLINES vs. UY

FACTS On October 13, 1989, respondent Willie Uy, a revenue passenger on a United Airlines flight for the San Francisco-Manila route, checked in together with his language one piece which was found to be overweight. An airline personnel rebuked him saying that he should have known the maximum weight allowance (70kgs per bag) and in a loud voice ordered Uy to repack his luggages. Respondent Uy acceded but the luggage was still overweight and so the airline billed him overweight charges which he offered to pay with a miscellaneous charge order (MCO) or an airline prepaid credit. However, the MCO was not accepted due to conflicting figures listed on it. In addition, upon arrival in Manila, he discovered that one of his bags had been slashed and its contents stolen, claiming the value lost to be around US$ 5,310. Respondent Uy sent three demand letters dated Oct. 16, 1989, Jan. 4, 1990, Oct. 28, 1991. The petitioner airline in response to the first demand, mailed a check representing to the payment of loss based on the maximum liability of $9.70 per pound. Uy was not satisfied and sent the said second and third letter demanding an out-of-court settlement of P1,000,000. United Airlines did not accede to his demands. Consequently on June 9, 1992, respondent Uy filed a complaint for damages 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, that petitioner airline accorded him ill and shabby treatment to his extreme embarrassment and humiliation. He prayed for P1 million for moral damages, P500k for exemplary, P50k attorneys fees and $5,310 for actual damages. United Airlines moved to dismiss on the ground that Uys cause of action had prescribed invoking Art. 29 of the Warsaw Convention: 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. Trial court ordered the dismissal of the action while the CA reversed stating that the Warsaw Convention did not preclude the operation of the Civil Code and other pertinent laws. ISSUE W/N the 2 year prescriptive period of the Warsaw Convention bar respondent Uys action for damages? No. RULING Within Philippine jurisdiction the SC has held that the Warsaw Convention can be applied, or ignored, depending on the peculiar facts presented by each case. Thus, 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. Insofar as the first cause of action (action for damages arising from misconduct) is concerned, respondent's failure to file his complaint within the 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 4 years for filing an action based on torts. As for respondent's second cause of action (action for damages arising from damage to property), indeed the travaux preparatories of the Warsaw Convention reveal that the delegates thereto intended the 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 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 2 year time frame his second cause of action must be barred. However in spite of this, the SC declared that although respondent filed his complaint more than 2 years later, beyond the period of limitation prescribed by the Warsaw Convention for filing a claim for damages, 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. Hence, despite the express mandate of Art. 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 airline itself. Therefore, Uy's second cause of action cannot be considered as time-barred under Art. 29 of the Warsaw Convention.

NORTHWEST AIRLINES, INC., petitioner, vs. COURT OF APPEALS and ROLANDO I. TORRES, respondents. [G.R. No. 120337. January 20, 1998.] ROLANDO I. TORRES, petitioner, vs. COURT OF APPEALS and NORTHWEST AIRLINES, INC., respondents. Quisumbing, Torres & Evangelista for petitioner. Umali, Soriano & Associates for respondents. SYNOPSIS Rolando Torres, on a special mission to purchase firearms for the Philippine Senate, purchased a round trip ticket from defendant Northwest Airlines, for his travel to Chicago and back to Manila. After purchasing firearms and on the way back to Manila, plaintiff checked-in and presented before defendant's representative his two identical baggage, one of which contained firearms. Upon arrival in Manila, plaintiff was not able to claim one of his baggages. Defendant informed him that his baggage containing the firearms was recalled back to Chicago for US Customs verification. When his baggage arrived, plaintiff opened the baggage in the presence of defendant's representative and found out that the firearms were missing. The RTC, in an action filed by plaintiff for the recovery of damages, rendered a full blown decision ordering Northwest to pay Torres damages and attorney's fees instead of just ruling on Northwest's motion to dismiss with motion for Summary Judgment which it considered submitted for resolution. The Court of Appeals affirmed the RTC decision, but disagreed in determining by way of summary judgment the amount of damages. Hence, the separate petitions for review by both parties. SCcHIE The Supreme Court agreed with the Court of Appeals' holding that the trial court erred in deciding the entire case on its merits. Indeed, as to the demurrer to evidence, the trial court should have been solely guided by the procedure laid down in the rule on demurrer to evidence. It had no choice other than to grant or to deny the demurrer. It could not, without committing grave abuse of discretion amounting to excess of jurisdiction, deny the motion and then forthwith grant Torres' claims on a finding that Torres has established a preponderance of evidence in support of such claims. In the instant case, the trial court did just that insofar as moral damages, attorney's fees, and expenses of litigation were concerned. What it should have done was to merely deny the demurrer and set a date for the reception of Northwest's evidence in chief. 4.INTERNATIONAL LAW; WARSAW CONVENTION; NOT A LIMITATION ON AN AIRPLANE'S LIABILITY. We, however, agree with both the trial court and the Court of Appeals that NORTHWEST's liability for actual damages may not be limited to that prescribed in Section 22(2) of the Warsaw Convention. In Alitalia v. Intermediate Appellate Court, we held: The [Warsaw] Convention does not operate as an exclusive enumeration of the instances of an airplane's liability, or as an absolute limit of the extent of that liability. Such a proposition is not borne out by the language of the Convention, as this Court has now, and at an earlier time, pointed out. Moreover, slight reflection readily leads to the conclusion that it should

be deemed a limit of liability only in those cases where the causes 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 willful 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. The Convention's provisions, in short, do not "regulate or exclude liability for other breaches of contract by the carriers or misconduct of its officers and employees, or for some particular or exceptional type of damage. Unable to accept the decision of the Court of Appeals in CAG.R. CV No. 24068, 1 petitioner Northwest Airlines, Inc., (hereafter NORTHWEST) and petitioner Rolando I. Torres (hereafter TORRES) filed separate petitions for review under Rule 45 of the Rules of Court, which were docketed as G.R. No. 120334 and G.R. No. 120337 and thereafter consolidated. The antecedents of these cases were summarized by the Court of Appeals as follows: 2 The plaintiff, [Torres], allegedly on a special mission to purchase firearms for the Philippine Senate, purchased a round trip ticket from defendant [Northwest] for his travel to Chicago and back to Manila. Via defendant's flight, plaintiff left for United States. After purchasing firearms and on the way back to Manila, plaintiff checked-in and presented before defendant's representative his two identical baggage, one of which contained firearms. Defendant's representative required the baggage to be opened and the supporting evidence to be presented. Plaintiff showed them his authorization from the Philippine government and the purchase receipts. Plaintiff thereafter sealed the baggage and defendant's representative placed a red tag on the baggage with firearms with the marking "CONTAINS FIREARMS". Upon arrival in Manila on June 22, 1988 plaintiff was not able to claim one of his baggages. Plaintiff was informed by defendant's representative that his baggage containing firearms was recalled back to Chicago by defendant for US Customs verification. A telex to this effect was shown to plaintiff. On June 28, 1988, after being advised of the arrival of his other baggage, plaintiff claimed and opened the baggage in the presence of defendant's representative and found out that the fire-arms were missing. A Personal Property Missing Damage Report was issued by defendant to plaintiff. On account of the continuous refusal of defendant to settle amicably, plaintiff then prayed before the trial court that defendant be ordered to pay actual damages, moral damages, temperate damages, exemplary damages and attorney's fees (pp. 1-6, Complaint; p. 1, Record). In its answer, defendant pleaded: a) that it was the agents from the US Customs who ordered for the return of the weapons which plaintiff checked-in; b) that when opened in the presence of US Customs agents the box contained no firearms; and c) that since the baggage which was returned back to Chicago did not contain any firearms, then the baggage which plaintiff received upon arrival in Manila must have contained the firearms (pp. 3-5, Answer; pp. 32-34, Record). After plaintiff had presented its evidence, defendant filed a "Motion to Dismiss (By Way of Demurrer to the Evidence with Motion for Summary Judgment)" dated April 24, 1989. In said motion, defendant moved for the "dismissal of the complaint in so far as it prays for moral, exemplary and temperate damages and attorney's fees" and further moved for "summary judgment to be rendered awarding the plaintiff $640.00 as actual damages." (Motion to Dismiss By Way of Demurrer to Evidence with Motion for Summary Judgment, p. 115, Records). Plaintiff on the other hand, offered no objection to the submission of the case for decision but insisted that he is entitled to damages as prayed for (p. 1, Comment on Defendant's Motion to Dismiss by Way of Demurrer to Evidence with Summary Judgment; pp. 136-169, Records). We add to this summary the following relevant matters: NORTHWEST argued in its motion for summary judgment that the Warsaw Convention and the contract of carriage limited its liability to US$640 and that the evidence presented by TORRES did not entitle him to moral, exemplary, and temperate damages and attorney's fees. 3 Instead of just ruling on NORTHWEST's Motion to Dismiss (By Way of Demurrer to Evidence) with Motion for Summary Judgment, which it considered submitted for resolution in the order of 14 June 1989, 4 the trial court rendered on 13 September 1989 a full-blown decision 5 ordering NORTHWEST to pay TORRES the following amounts:

1.The amount of $9,009.32, with legal interest thereon from the date of the filing of the complaint, in its peso equivalent at the official rate of exchange at the time payment is made, representing the value of the goods lost by the plaintiff; 2.The amount of P100,000.00 by way of attorney's fees; 3.The amount of P5,181.09 as filing fees paid by the plaintiff and the amount of P20,000.00 for expenses of litigation, representing travel expenses and hotel accommodations of plaintiff's counsels; and 4.The amount of P50,000.00 as moral damages. The award of US$9,009.32, representing the value of the lost firearms, was grounded on the trial court's finding that "the act of [NORTHWEST's] personnel in Tokyo or Narita Airport in just guessing which baggage contained the firearms was careless and imprudent, amounting to careless disregard for the safety of the luggage of the passenger." According to the trial court, such act constituted willful misconduct which brought the case beyond the application of Section 22(2) of the Warsaw Convention, thereby depriving NORTHWEST of the limitation of the liability provided for in said section. The awards of attorney's fees and expenses of litigation were premised on NORTHWEST's having ignored the demands of TORRES forcing the latter to litigate in order to assert his right TORRES was also awarded moral damages because of the "inconvenience, anxiety and worry" he suffered by reason of NORTHWEST's unjustifiable refusal to settle his claim. Both TORRES and NORTHWEST appealed from the decision to the Court of Appeals, which docketed the case as CA-G.R. CV No. 24068. TORRES assailed the failure of the trial court to award the actual, moral, and exemplary damages prayed for by him. 6 NORTHWEST, on the other hand, alleged that in prematurely resolving the case on the merits the court prevented it from presenting evidence, thereby denying it due process; and that even assuming that the trial court could resolve the entire case on the merits, it erred in awarding damages, attorney's fees, and expenses of litigation. 7 In its Decision 8 of 14 September 1994, the Court of Appeals sustained the trial court's judgment that TORRES was entitled to actual damages, since NORTHWEST had, in effect, admitted the loss of the firearms when it insisted that its liability was limited to $9.07 per pound or $20 per kilo. The appellate court then concluded that NORTHWEST's guessing of which luggage contained the firearms amounted to willful misconduct under Section 25(1) of the Warsaw Convention which entitled TORRES to claim actual damages in excess of the limitation provided for under Section 22(2) of said Convention. Nevertheless, the Court of Appeals held that while the trial court properly ruled on the right of TORRES to actual damages, it erred in determining by way of summary judgment the amount of damages; for under Section 3 of Rule 34 of the Rules of Court, a summary judgment may be rendered upon proper motion except as to the amount of damages. As to the trial court's act of disposing of the entire case by way of summary judgment, the Court of Appeals noted that NORTHWEST categorically moved for summary judgment only on the issue of actual damages, but not on the claims for moral damages and attorney's fees. NORTHWEST moved for the dismissal of the latter claims by way of demurrer to evidence. That being so, the trial court could not, by way of summary judgment, dispose of the case on its entirety. Section 2 of Rule 34 of the Rules of Court required that summary judgment should be issued only after the motion therefor has been heard. Since there was no such motion as to the claims for moral damages and attorney's fees, no summary judgment thereon could be made. Anent the demurrer to evidence, the Court of Appeals held that the trial court had to either grant or deny it. If granted, no award therefor could have been validly made. If denied, then under Section 1 of Rule 35 of the Rules of Court, NORTHWEST should have been allowed to present its evidence, as it was not deemed to have waived that right. This section provided: SEC. 1.Effect of judgment on demurrer to evidence. After the plaintiff has completed the presentation of his evidence, the defendant without waiving his right to offer evidence in the event the motion is not granted, may move for a dismissal on the ground that upon facts and the law the plaintiff has shown no right to relief. However, if the motion is granted and order of dismissal is reversed on appeal, the movant loses his right to present evidence in his behalf. 9

The Court of Appeals then held that since the demurrer was impliedly by the trial court, NORTHWEST should have been allowed to present its evidence in accordance with the above rule. Accordingly, the Court of Appeals affirmed the trial court's finding as to the right of TORRES to actual damages but set aside the rest of the appealed decision. It then remanded the case to the court a quo for further proceedings. On 23 May 1995, the Court of Appeals denied 10 NORTHWEST's motion for a partial reconsideration of the decision. Hence, the present petitions. NORTHWEST contests the right of TORRES to actual damages on the following grounds: (1) the loss of firearms was disputed; (2) the finding of willful misconduct was arbitrary; and (3) TORRES failed to produce a United States license for the shipment of the firearms; hence, the importation was illegal and no damages could arise therefrom. TORRES, on the other hand, claims that the Court of Appeals erred (1) in setting aside the appealed decision of the court a quo as to the awards of damages, attorney's fees, and cost of suit; (2) in remanding the case to the court a quo for further proceedings; and (3) in failing to award other damages for breach of contract and willful misconduct committed by NORTHWEST for mishandling the cargo. NORTHWEST's Motion to Dismiss (By Way of Demurrer to Evidence) with Motion for Summary Judgment involved two distinct and separate processes, viz: (1) demurrer to evidence, which was then governed by Rule 35, now by Rule 33; and (2) motion for summary judgment, which was then governed by Rule 34, now Rule 35, of the Rules of Court. The subject of the demurrer were the claims for moral exemplary, and temperate damages and attorney's fees; while the target of the motion for summary judgment was the claim for actual damages. We agree with the Court of Appeals in its holding that the trial court erred in deciding the entire case on its merits. Indeed, as to the demurrer to evidence, the trial court should have been solely guided by the procedure laid down in the abovementioned rule on demurrer to evidence. It had no choice other than to grant or to deny the demurrer. It could not, without committing grave abuse of discretion amounting to excess of jurisdiction, deny the motion and then forthwith grant TORRES' claims on a finding that TORRES has established a preponderance of evidence in support of such claims. In the instant case, the trial court did just that insofar as moral damages, attorney's fees, and expenses of litigation were concerned. What it should have done was to merely deny the demurrer and set a date for the reception of NORTHWEST's evidence in chief. As to the motion for summary judgment, both the trial court and the Court of Appeals were in error. Summary judgments were formerly governed by Rule 34 of the Rules of Court. The rule is now Rule 35 of the 1997 Rules of Civil Procedure with the amendments allowing the parties to submit not only affidavits but also depositions or admissions in support of their respective contentions. 11 Motions for summary judgment may be filed by the claimant or by the defending party.Sections 1, 2, and 3 of the old Rule 34, the governing law in this case, provided as follows: SEC. 1.Summary judgment for claimant. A party seeking to recover upon a claim, counterclaim, or cross-claim or to obtain a declaratory relief may, at any time after the pleading in answer thereto has been served, move with supporting affidavits for a summary judgment in his favor upon all or any part thereof. SEC. 2.Summary judgment for defending party. A party against whom a claim, counter-claim or cross-claim is asserted or a declaratory relief is sought may, at any time, move with supporting affidavits for a summary judgment in his favor as to all or any part thereof. SEC. 3.Motion and proceedings thereon. The motion shall be served at least ten (10) days before the time specified for the hearing. The adverse party prior to the day of hearing may serve opposing affidavits. After the hearing, the judgment sought shall be rendered forthwith if the pleadings, depositions, and admissions on file together with the affidavits, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. NORTHWEST, the defending party, moved for summary judgment on the claim for actual damages after TORRES had

presented his evidence in chief. This was allowed by Section 2 where the motion may be filed "at any time", as distinguished from Section 1 where the claimant, like TORRES, may file the motion at any time after the answer is filed. Summary judgment is allowed if, except as to the amount of damages, there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. In this case, NORTHWEST denied in its Answer the material allegations in the complaint and asserted, in fact, that it was not liable for actual damages because the box containing the alleged lost firearms was the one received by TORRES when he arrived in Manila. It likewise contended that, even granting that the firearms were lost, its liability was limited by the Warsaw Convention and the contract of transportation to $9.07 per pound or a total of $640 as the box weighed 70 pounds. 12 It also denied having acted fraudulently or in bad faith. 13 In thus submitting for summary judgment the matter of its liability only to the maximum allowed in Section 22(2) of the Warsaw Convention, NORTHWEST was deemed to have hypothetically admitted arguendo that the firearms were lost. It did not waive the presentation of evidence that it was not in fact liable for the alleged loss of firearms. And even if it were so liable, NORTHWEST could still prove at the appropriate time that it was not liable beyond the maximum provided in said Section 22(2). Notably, TORRES prayed for actual damages in the amounts of(1) $9,009.32 representing the value of the lost firearms; and (2) P39,065 14representing the cost of his plane tickets. Concretely then, there remained a genuine issue on the fact and amount of actual damages. The motion for summary judgment was not therefore in order. NORTHWEST must have resorted to it, in like manner as it did in filing the demurrer, to delay the progress of the trial of the case. Verily, it was grave abuse of discretion on the part of the trial court to grant such motion and award TORRES actual damages commensurate to the value of the firearms and based on his evidence alone. We, however, agree with both the trial court and the Court of Appeals that NORTHWEST's liability for actual damages may not be limited to that prescribed in Section 22(2) of the Warsaw Convention. In Alitalia v. Intermediate Appellate Court, 15 we held: The [Warsaw] Convention does not operate as an exclusive enumeration of the instances of an airline's liability, or as an absolute limit of the extent of that liability. Such a proposition is not borne out by the language of the Convention, as this Court has now, and at an earlier time, pointed out. Moreover, slight reflection readily leads to the conclusion that it should be deemed a limit of liability only in those cases where the cause of the death or injury to a person, or destruction, loss or damage to property or delay in its transport is not attributable to or attended by any willful 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. The Convention's provision, in short, 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. IN VIEW WHEREOF, judgment is hereby rendered (1) PARTLY GRANTING the petition in G.R No. 120334 by setting aside that portion of the challenged decision of the Court of Appeals in CA-G.R. CV No. 24068 affirming the summary judgment as to the right of respondent ROLANDO I. TORRES to actual damages; (2) DENYING for want of merit the petition in G.R. No. 120337; and (3) REMANDING this case to the trial court for the reception of the evidence for Northwest Airlines, Inc. in Civil Case No. 88-46117 and, thereafter, for the rendition of the judgment therein on the merits. No pronouncement as to costs. SO ORDERED. SABENA BELGIAN WORLD AIRLINES vs CA G.R. No. 104685 | March 14, 1996 | J. VITUG Doctrine: - Art. 1733 of the [Civil] Code provides that from the very nature of their business and by reasons of public policy, common carriers are bound to observe extraordinary diligence in the vigilance over the goods transported by them. - Art. 1735 establishes the presumption that if the goods are lost, destroyed or deteriorated, common carriers

are presumed to have been at fault or to have acted negligently, unless they prove that they had observed extraordinary diligence as required in Article 1733. - The Warsaw Convention denies to the carrier availment of the provisions which exclude or limit his liability, if the damage is caused by his wilful misconduct or by such default on his part as, in accordance with the law of the court seized of the case, is considered to be equivalent to wilful misconduct, or if the damage is (similarly) caused x x x by any agent of the carrier acting within the scope of his employment. Facts: 1.

Issue: W/N the airline is liable for the lost luggage Held: Yes. Fault or negligence consists in the omission of that diligence which is demanded by the nature of an obligation and corresponds with the circumstances of the person, of the time, and of the place. When the source of an obligation is derived from a contract, the mere breach or non-fulfillment of the prestation gives rise to the presumption of fault on the part of the obligor. This rule is not different in the case of common carriers in the carriage of goods which, indeed, are bound to observe not just the due diligence of a good father of a family but that of extraordinary care in the vigilance over the goods. The only exceptions to the foregoing extraordinary responsibility of the common carrier is when the loss, destruction, or deterioration of the goods is due to any of the following causes: (1) Flood, storm, earthquake, lightning, or other natural disaster or calamity; (2) Act of the public enemy in war, whether international or civil; (3) Act or omission of the shipper or owner of the goods; (4) The character of the goods or defects in the packing or in the containers; (5) Order or act of competent public authority. Not one of the above excepted causes obtains in this case. The airline cannot invoke the tort doctrine of proximate cause because the private respondents luggage was lost while it was in the custody of petitioner. The loss of said baggage not only once by twice, said the appellate court, underscores the wanton negligence and lack of care on the part of the carrier. The above findings foreclose whatever rights petitioner might have had to the possible limitation of liabilities enjoyed by international air carriers under the Warsaw Convention. In Alitalia vs. Intermediate Appellate Court, the Court held that the Warsaw Convention however denies to the carrier availment of the provisions which exclude or limit his liability, if the damage is caused by his wilful misconduct or by such default on his part as, in accordance with the law of the court seized of the case, is considered to be equivalent to wilful misconduct, or if the damage is (similarly) caused x x x by any agent of the carrier acting within the scope of his employment. The Hague Protocol amended the Warsaw Convention by removing the provision that if the airline took all necessary steps to avoid the damage, it could exculpate itself completely, and declaring the stated limits of liability not applicable if it is proved that the damage resulted from an act or omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and with knowledge that damage would probably result. The same deletion was effected by the Montreal Agreement of 1966, with the result that a passenger could recover unlimited damages upon proof of wilful misconduct. The Convention does not thus operate as an exclusive enumeration of the instances of an airlines 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. Decision appealed from AFFIRMED.

2.

3.

4.

5.

6.

Plaintiff Ma. Paula San Agustin, herein private respondent, was a passenger on board Flight SN 284 of defendant airline originating from Casablanca to Brussels, Belgium on her way back to Manila. She checked in her luggage which contained her valuables, namely: jewelries valued at $2,350.00; clothes $1,500.00; shoes/bag $150; accessories $75; luggage itself $10.00; or a total of $4,265.00, for which she was issued Tag No. 71423. She stayed overnight in Brussels and her luggage was left on board Flight SN 284. She arrived at Manila International Airport and immediately submitted her Tag No. 71423 but her luggage was missing. She was advised to accomplish and submit a property Irregularity Report which she submitted and filed on the same day but when her luggage could not be found, she filed a formal complaint with defendants Local Manager. Subsequently, plaintiff was furnished copies of telexes of defendants Brussels Office that the latter found her luggage and that they have broken the locks for identification. Plaintiff was assured by the defendant that it has notified its Manila Office that the luggage will be shipped to Manila. But unfortunately plaintiff was informed that the luggage was lost for the second time. Plaintiff demanded from the defendant the money value of the luggage and its contents or its exchange value, but defendant refused to settle the claim. Defendant asserts in its Answer and its evidence tend to show that while it admits that the plaintiff was a passenger with a piece of checked in luggage, the loss of the luggage was due to plaintiffs sole if not contributory negligence. Petitioner airline company, in contending that the alleged negligence of private respondent should be considered the primary cause for the loss of her luggage, avers that, despite her awareness that the flight ticket had been confirmed only for Casablanca and Brussels, and that her flight from Brussels to Manila had yet to be confirmed, she did not retrieve the luggage upon arrival in Brussels. Petitioner insists that private respondent, being a seasoned international traveler, must have likewise been familiar with the standard provisions contained in her flight ticket that items of value are required to be hand-carried by the passenger and that the liability of the airline or loss, delay or damage to baggage would be limited, in any event, to only US$20.00 per kilo unless a higher value is declared in advance and corresponding additional charges are paid thereon. At the Casablanca International Airport, private respondent, in checking in her luggage, evidently did not declare its contents or value, pursuant to Section 5(c), Article IX, of the General Conditions of Carriage, which states that: Passengers shall not include in his checked baggage, and the carrier may refuse to carry as checked baggage, fragile or perishable articles, money, jewelry, precious metals, negotiable papers, securities or other valuables. The trial court rendered judgment ordering Sabena Belgian World Airlines to pay private respondent. Sabena appealed but the CA affirmed in toto the trial courts judgment, hence the present petition for review.