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EN BANC

G.R. No. L-10126

October 22, 1957

SALUD VILLANUEVA VDA. DE BATACLAN and the minors NORMA, LUZVIMINDA, ELENITA, OSCAR and
ALFREDO BATACLAN, represented by their Natural guardian, SALUD VILLANUEVA VDA. DE BATACLAN,
plaintiffs-appellants,
vs.
MARIANO MEDINA, defendant-appellant.
Lope
E.
Adriano,
Emmanuel
Andamo
Fortunato Jose for defendant and appellant.

and

Jose

R.

Francisco

for

plaintiffs-appellants.

MONTEMAYOR, J.:
Shortly after midnight, on September 13, 1952 bus no. 30 of the Medina Transportation, operated by its owner
defendant Mariano Medina under a certificate of public convenience, left the town of Amadeo, Cavite, on its way to
Pasay City, driven by its regular chauffeur, Conrado Saylon.
There were about eighteen passengers, including the driver and conductor.
Among the passengers were Juan Bataclan, seated beside and to the right of the driver, Felipe Lara, sated to
the right of Bataclan, another passenger apparently from the Visayan Islands whom the witnesses just called
Visaya, apparently not knowing his name, seated in the left side of the driver, and a woman named Natalia
Villanueva, seated just behind the four last mentioned.
At about 2:00 o'clock that same morning, while the bus was running within the jurisdiction of Imus, Cavite,
i.

one of the front tires burst and the vehicle began to zig-zag until it fell into a canal or ditch on the right side of
the road and turned turtle.

ii.

Some of the passengers managed to leave the bus the best way they could, others had to be helped or
pulled out, while the three passengers seated beside the driver, named Bataclan, Lara and the
Visayan and the woman behind them named Natalia Villanueva, could not get out of the overturned
bus.

iii.

Some of the passengers, after they had clambered up to the road, heard groans and moans from inside
the bus, particularly, shouts for help from Bataclan and Lara, who said they could not get out of the
bus.

iv.

There is nothing in the evidence to show whether or not the passengers already free from the wreck,
including the driver and the conductor, made any attempt to pull out or extricate and rescue the four
passengers trapped inside the vehicle, but calls or shouts for help were made to the houses in the
neighborhood.

v.

After half an hour, came about ten men, one of them carrying a lighted torch made of bamboo with a wick on
one end, evidently fueled with petroleum.
These men presumably approach the overturned bus, and almost immediately, a fierce fire started,
burning and all but consuming the bus, including the four passengers trapped inside it.

It would appear that as the bus overturned, gasoline began to leak and escape from the gasoline
tank on the side of the chassis, spreading over and permeating the body of the bus and the ground
under and around it, and that the lighted torch brought by one of the men who answered the call for
help set it on fire.
vi.

That same day, the charred bodies of the four deemed passengers inside the bus were removed and duly
identified that of Juan Bataclan.
By reason of his death, his widow, Salud Villanueva, in her name and in behalf of her five minor
children, brought the present suit to recover from Mariano Medina compensatory, moral, and
exemplary damages and attorney's fees in the total amount of P87,150.

After trial, the Court of First Instance of Cavite awarded P1,000 to the plaintiffs plus P600 as attorney's fee, plus
P100, the value of the merchandise being carried by Bataclan to Pasay City for sale and which was lost in the fire.
The plaintiffs and the defendants appealed the decision to the Court of Appeals, but the latter endorsed the
appeal to us because of the value involved in the claim in the complaint.

Our new Civil Code amply provides for the responsibility of common carrier to its passengers and their goods. For
purposes of reference, we are reproducing the pertinent codal provisions:
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.
Such extraordinary diligence in the vigilance over the goods is further expressed in articles 1734, 1735, and
1745, Nos. 5, 6, and 7, while the extra ordinary diligence for the safety of the passengers is further set forth
in articles 1755 and 1756.
ART. 1755. A common carrier is bound to carry the passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with a due regard for all the
circumstances.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed
in articles 1733 and 1755
ART. 1759. Common carriers are liable for the death of or injuries to passengers through the negligence or
willful acts of the former's employees, although such employees may have acted beyond the scope of their
authority or in violation of the order of the common carriers.
This liability of the common carriers does not cease upon proof that they exercised all the diligence of a
good father of a family in the selection and supervision of their employees.
ART. 1763. A common carrier responsible for injuries suffered by a passenger on account of the willful acts
or negligence of other passengers or of strangers, if the common carrier's employees through the exercise
of the diligence of a good father of a family could have prevented or stopped the act or omission.

We agree with the trial court that the case involves a breach of contract of transportation for hire, the Medina
Transportation having undertaken to carry Bataclan safely to his destination, Pasay City. We also agree with the trial
court that there was negligence on the part of the defendant, through his agent, the driver Saylon. There is evidence
to show that at the time of the blow out, the bus was speeding, as testified to by one of the passengers, and as
shown by the fact that according to the testimony of the witnesses, including that of the defense, from the point
where one of the front tires burst up to the canal where the bus overturned after zig-zaging, there was a distance of
about 150 meters. The chauffeur, after the blow-out, must have applied the brakes in order to stop the bus, but
because of the velocity at which the bus must have been running, its momentum carried it over a distance of 150
meters before it fell into the canal and turned turtle.
There is no question that under the circumstances, the defendant carrier is liable. The only question is to what
degree. The trial court was of the opinion that the proximate cause of the death of Bataclan was not the overturning
of the bus, but rather, the fire that burned the bus, including himself and his co-passengers who were unable to
leave it; that at the time the fire started, Bataclan, though he must have suffered physical injuries, perhaps serious,
was still alive, and so damages were awarded, not for his death, but for the physical injuries suffered by him. We
disagree. A satisfactory definition of proximate cause is found in Volume 38, pages 695-696 of American
jurisprudence, cited by plaintiffs-appellants in their brief. It is as follows:
. . . 'that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause,
produces the injury, and without which the result would not have occurred.' And more comprehensively, 'the
proximate legal cause is that acting first and producing the injury, either immediately or by setting other
events in motion, all constituting a natural and continuous chain of events, each having a close causal
connection with its immediate predecessor, the final event in the chain immediately effecting the injury as a
natural and probable result of the cause which first acted, under such circumstances that the person
responsible for the first event should, as an ordinary prudent and intelligent person, have reasonable ground
to expect at the moment of his act or default that an injury to some person might probably result therefrom.
It may be that ordinarily, when a passenger bus overturns, and pins down a passenger, merely causing him physical
injuries, if through some event, unexpected and extraordinary, the overturned bus is set on fire, say, by lightning, or
if some highwaymen after looting the vehicle sets it on fire, and the passenger is burned to death, one might still
contend that the proximate cause of his death was the fire and not the overturning of the vehicle. But in the present
case under the circumstances obtaining in the same, we do not hesitate to hold that the proximate cause was the
overturning of the bus, this for the reason that when the vehicle turned not only on its side but completely on its
back, the leaking of the gasoline from the tank was not unnatural or unexpected; that the coming of the men with a
lighted torch was in response to the call for help, made not only by the passengers, but most probably, by the driver
and the conductor themselves, and that because it was dark (about 2:30 in the morning), the rescuers had to carry a
light with them, and coming as they did from a rural area where lanterns and flashlights were not available; and what
was more natural than that said rescuers should innocently approach the vehicle to extend the aid and effect the
rescue requested from them. In other words, the coming of the men with a torch was to be expected and was a
natural sequence of the overturning of the bus, the trapping of some of its passengers and the call for outside help.
What is more, the burning of the bus can also in part be attributed to the negligence of the carrier, through is driver
and its conductor. According to the witness, the driver and the conductor were on the road walking back and forth.
They, or at least, the driver should and must have known that in the position in which the overturned bus was,
gasoline could and must have leaked from the gasoline tank and soaked the area in and around the bus, this aside
from the fact that gasoline when spilled, specially over a large area, can be smelt and directed even from a distance,
and yet neither the driver nor the conductor would appear to have cautioned or taken steps to warn the rescuers not
to bring the lighted torch too near the bus. Said negligence on the part of the agents of the carrier come under the
codal provisions above-reproduced, particularly, Articles 1733, 1759 and 1763.
As regard the damages to which plaintiffs are entitled, considering the earning capacity of the deceased, as well as
the other elements entering into a damage award, we are satisfied that the amount of SIX THOUSAND (P6,000)

PESOS would constitute satisfactory compensation, this to include compensatory, moral, and other damages. We
also believe that plaintiffs are entitled to attorney's fees, and assessing the legal services rendered by plaintiffs'
attorneys not only in the trial court, but also in the course of the appeal, and not losing sight of the able briefs
prepared by them, the attorney's fees may well be fixed at EIGHT HUNDRED (P800) PESOS for the loss of
merchandise carried by the deceased in the bus, is adequate and will not be disturbed.
There is one phase of this case which disturbs if it does not shock us. According to the evidence, one of the
passengers who, because of the injuries suffered by her, was hospitalized, and while in the hospital, she was visited
by the defendant Mariano Medina, and in the course of his visit, she overheard him speaking to one of his bus
inspectors, telling said inspector to have the tires of the bus changed immediately because they were already old,
and that as a matter of fact, he had been telling the driver to change the said tires, but that the driver did not follow
his instructions. If this be true, it goes to prove that the driver had not been diligent and had not taken the necessary
precautions to insure the safety of his passengers. Had he changed the tires, specially those in front, with new ones,
as he had been instructed to do, probably, despite his speeding, as we have already stated, the blow out would not
have occurred. All in all, there is reason to believe that the driver operated and drove his vehicle negligently,
resulting in the death of four of his passengers, physical injuries to others, and the complete loss and destruction of
their goods, and yet the criminal case against him, on motion of the fiscal and with his consent, was provisionally
dismissed, because according to the fiscal, the witnesses on whose testimony he was banking to support the
complaint, either failed or appear or were reluctant to testify. But the record of the case before us shows the several
witnesses, passengers, in that bus, willingly and unhesitatingly testified in court to the effect of the said driver was
negligent. In the public interest the prosecution of said erring driver should be pursued, this, not only as a matter of
justice, but for the promotion of the safety of passengers on public utility buses. Let a copy of this decision be
furnished the Department of Justice and the Provincial Fiscal of Cavite.
In view of the foregoing, with the modification that the damages awarded by the trial court are increased from ONE
THOUSAND (P1,000) PESOS TO SIX THOUSAND (P6,000) PESOS, and from SIX HUNDRED PESOS TO EIGHT
HUNDRED (P800) PESOS, for the death of Bataclan and for the attorney's fees, respectively, the decision appealed
is from hereby affirmed, with costs.
Paras, C. J., Bengzon, Padilla, Reyes, A., Bautista Angelo, Labrador, Concepcion, Reyes, J. B. L., Endencia, and
Felix, JJ., concur.

EN BANC
G.R. No. L-11037

December 29, 1960

EDGARDO
CARIAGA,
vs.
LAGUNA
TAYABAS
MANILA RAILROAD COMPANY, defendant-appellee.

ET

AL., plaintiffs-appellants,

BUS

Ozaeta,
Lichauco
and
Picazo
for
E.A.
Fernandez
and
L.H.
Fernandez
Gov't. Corp. Counsel A. Padilla and Atty. F.A. Umali for appellee.

COMPANY, defendant-appellant.

for

defendant
plaintiffs

and
and

appellant.
appellants.

DIZON, J.:
At about 1:00 p.m. on June 18, 1952, Bus No. 133 of the Laguna Tayabas Bus Co. hereinafter referred to as the
LTB driven by Alfredo Moncada, left its station at Azcarraga St., Manila, for Lilio, Laguna, with Edgardo Cariaga, a
fourth-year medical student of the University of Santo Tomas, as one of its passengers.
At about 3:00 p.m., as the bus reached that part of the poblacion of Bay, Laguna, where the national highway
crossed a railroad track, it bumped against the engine of a train then passing by with such terrific force that
the first six wheels of the latter were derailed, the engine and the front part of the body of the bus was
wrecked, the driver of the bus died instantly, while many of its passengers, Edgardo among them, were severely
injured.
Edgardo was first confined at the San Pablo City Hospital from 5:00 p.m., June 18, 1952, to 8:25 a.m., June 20 of
the same year when he was taken to the De los Santos Clinic, Quezon City.
He left that clinic on October 14 to be transferred to the University of Santo Tomas Hospital where he stayed up to
November 15.
On this last date he was taken back to the De los Santos Clinic where he stayed until January 15, 1953. He was
unconscious during the first 35 days after the accident; at the De los Santos Clinic Dr. Gustilo removed the fractured
bones which lacerated the right frontal lobe of his brain and at the University of Santo Tomas Hospital Dr. Gustilo
performed another operation to cover a big hole on the right frontal part of the head with a tantalum plate.
The LTB paid the sum of P16,964.45 for all the hospital, medical and miscellaneous expenses incurred from
June 18, 1952 to April, 1953. From January 15, 1953 up to April of the same year Edgardo stayed in a private
house in Quezon, City, the LTB having agreed to give him a subsistence allowance of P10.00 daily during his
convalescence, having spent in this connection the total sum of P775.30 in addition to the amount already referred
to.
On April 24, 1953 the present action was filed to recover for Edgardo Cariaga, from the LTB and the MRR Co., and
total sum of P312,000.00 as actual, compensatory, moral and exemplary damages, and for his parents, the sum of
P18,00.00 in the same concepts.
The LTB disclaimed liability claiming that the accident was due to the negligence of its co-defendant, the Manila
Railroad Company, for not providing a crossing bar at the point where the national highway crossed the

railway track, and for this reason filed the corresponding cross-claim against the latter company to recover the total
sum of P18,194.75 representing the expenses paid to Edgardo Cariaga.
The Manila Railroad Company, in turn, denied liability upon the complaint and cross-claim alleging that it was the
reckless negligence of the bus driver that caused the accident.
The lower court held that it was the negligence of the bus driver that caused the accident and, as a result,
rendered judgment sentencing the LTB to pay Edgardo Cariaga the sum of P10,490.00 as compensatory
damages, with interest at the legal rate from the filing of the complaint, and dismissing the cross-claim against
the Manila Railroad Company.
From this decision the Cariagas and the LTB appealed.
The Cariagas claim that the trial court erred: in awarding only P10,490.00 as compensatory damages to Edgardo;
in not awarding them actual and moral damages, and in not sentencing appellant LTB to pay attorney's fees.
On the other hand, the LTB's principal contention in this appeal is that the trial court should have held that the
collision was due to the fault of both the locomotive driver and the bus driver and erred, as a consequence, in not
holding the Manila Railroad Company liable upon the cross-claim filed against it.

We shall first dispose of the appeal of the bus company. Its first contention is that the driver of the train locomotive,
like the bus driver, violated the law, first, in sounding the whistle only when the collision was about to take place
instead of at a distance at least 300 meters from the crossing, and second, in not ringing the locomotive bell at all.
Both contentions are without merits.
After considering the evidence presented by both parties the lower court expressly found:
. . . While the train was approximately 300 meters from the crossing, the engineer sounded two long and two
short whistles and upon reaching a point about 100 meters from the highway, he sounded a long whistle
which lasted up to the time the train was about to cross it. The bus proceeded on its way without slackening
its speed and it bumped against the train engine, causing the first six wheels of the latter to be derailed.
xxx

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xxx

. . . that the train whistle had been sounded several times before it reached the crossing. All witnesses for
the plaintiffs and the defendants are uniform in stating that they heard the train whistle sometime before the
impact and considering that some of them were in the bus at the time, the driver thereof must have heard it
because he was seated on the left front part of the bus and it was his duty and concern to observe such fact
in connection with the safe operation of the vehicle. The other L.T.B. bus which arrived ahead at the
crossing, heeded the warning by stopping and allowing the train to pass and so nothing happened to said
vehicle. On the other hand, the driver of the bus No. 133 totally ignored the whistle and noise produced by
the approaching train and instead he tried to make the bus pass the crossing before the train by not stopping
a few meters from the railway track and in proceeding ahead.
The above findings of the lower court are predicated mainly upon the testimony of Gregorio Ilusondo, a witness for
the Manila Railroad Company. Notwithstanding the efforts exerted by the LTB to assail his credibility, we do not find
in the record any fact or circumstance sufficient to discredit his testimony. We have, therefore, no other alternative
but to accept the findings of the trial court to the effect, firstly, that the whistle of locomotive was sounded four times
two long and two short "as the train was approximately 300 meters from the crossing"; secondly, that another

LTB bus which arrived at the crossing ahead of the one where Edgardo Cariaga was a passenger, paid heed to the
warning and stopped before the "crossing", while as the LTB itself now admits (Brief p. 5) the driver of the bus
in question totally disregarded the warning.
But to charge the MRR Co. with contributory negligence, the LTB claims that the engineer of the locomotive failed to
ring the bell altogether, in violation of the section 91 of Article 1459, incorporated in the charter of the said MRR Co.
This contention as is obvious is the very foundation of the cross-claim interposed by the LTB against its
co-defendant. The former, therefore, had the burden of proving it affirmatively because a violation of law is never
presumed. The record discloses that this burden has not been satisfactorily discharged.
The Cariagas, as appellants, claim that the award of P10,000.00 compensatory damages to Eduardo is inadequate
considering the nature and the after effects of the physical injuries suffered by him. After a careful consideration of
the evidence on this point we find their contentions to be well-founded.
From the deposition of Dr. Romeo Gustilo, a neurosurgeon, it appears that, as a result of the injuries suffered by
Edgardo, his right forehead was fractured necessitating the removal of practically all of the right frontal lobe of his
brain. From the testimony of Dr. Jose A. Fernandez, a psychiatrist, it may be gathered that, because of the physical
injuries suffered by Edgardo, his mentality has been so reduced that he can no longer finish his studies as a medical
student; that he has become completely misfit for any kind of work; that he can hardly walk around without someone
helping him, and has to use a brace on his left leg and feet.
Upon the whole evidence on the matter, the lower court found that the removal of the right frontal lobe of the brain of
Edgardo reduced his intelligence by about 50%; that due to the replacement of the right frontal bone of his head
with a tantalum plate Edgardo has to lead a quite and retired life because "if the tantalum plate is pressed in or
dented it would cause his death."
The impression one gathers from this evidence is that, as a result of the physical injuries suffered by Edgardo
Cariaga, he is now in a helpless condition, virtually an invalid, both physically and mentally.
Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the obligor, guilty of a breach of
contract but who acted in good faith, is liable shall be those that are the natural and probable consequences of the
breach and which the parties had forseen or could have reasonably forseen at the time the obligation was
constituted, provided such damages, according to Art. 2199 of the same Code, have been duly proved. Upon this
premise it claims that only the actual damages suffered by Edgardo Cariaga consisting of medical, hospital and
other expenses in the total sum of P17,719.75 are within this category. We are of the opinion, however, that the
income which Edgardo Cariaga could earn if he should finish the medical course and pass the corresponding board
examinations must be deemed to be within the same category because they could have reasonably been foreseen
by the parties at the time he boarded the bus No. 133 owned and operated by the LTB. At that time he was already
a fourth-year student in medicine in a reputable university. While his scholastic may not be first rate (Exhibits 4, 4-A
to 4-C), it is, nevertheless, sufficient to justify the assumption that he could have passed the board test in due time.
As regards the income that he could possibly earn as a medical practitioner, it appears that, according to Dr. Amado
Doria, a witness for the LTB, the amount of P300.00 could easily be expected as the minimum monthly income of
Edgardo had he finished his studies.
Upon consideration of all the facts mentioned heretofore this Court is of the opinion, and so holds, that the
compensatory damages awarded to Edgardo Cariaga should be increased to P25,000.00.
Edgardo Cariaga's claim for moral damages and attorney's fees was denied by the trial court, the pertinent portion
of its decision reading as follows:

Plaintiffs' claim for moral damages cannot also be granted. Article 2219 of the Civil Code enumerates the
instances when moral damages may be covered and the case under consideration does not fall under any
one of them. The present action cannot come under paragraph 2 of said article because it is not one of the
quasi-delict and cannot be considered as such because of the pre-existing contractual relation between the
Laguna Tayabas Bus Company and Edgardo Cariaga. Neither could defendant Laguna Tayabas Bus
Company be held liable to pay moral damages to Edgardo Cariaga under Article 2220 of the Civil Code on
account of breach of its contract of carriage because said defendant did not act fraudulently or in bad faith in
connection therewith. Defendant Laguna Tayabas Bus Company had exercised due diligence in the
selection and supervision of its employees like the drivers of its buses in connection with the discharge of
their duties and so it must be considered an obligor in good faith.
The plaintiff Edgardo Cariaga is also not entitled to recover for attorney's fees, because this case does not
fall under any of the instances enumerated in Article 2208 of the Civil Code.
We agree with the trial court and, to the reason given above, we add those given by this Court in Cachero vs. Manila
Yellow Taxicab Co., Inc.(101 Phil., 523, 530, 533):
A mere perusal of plaintiff's complaint will show that this action against the defendant is predicated on an
alleged breach of contract of carriage, i.e., the failure of the defendants to bring him "safely and without
mishaps" to his destination, and it is to be noted that the chauffeur of defendant's taxicab that plaintiff used
when he received the injuries involved herein, Gregorio Mira, has not even made a party defendant to this
case.
Considering, therefore, the nature of plaintiff's action in this case, is he entitled to compensation for moral
damages? Article 2219 of the Civil Code says the following:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
(3) Seduction, abduction, rape, or other lascivious acts;
(4) Adultery or concubinage;
(5) Illegal or arbitrary detention or arrest;
(6) Illegal search;
(7) Libel, slander or any other form of defamation;
(8) Malicious prosecution;
(9) Acts mentioned in Article 309;
(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.
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Of course enumerated in the just quoted Article 2219 only the first two may have any bearing on the case at
bar. We find, however, with regard to the first that the defendant herein has not committed in connection with
this case any "criminal offense resulting in physical injuries". The one that committed the offense against the
plaintiff is Gregorio Mira, and that is why he has been already prosecuted and punished therefor. Altho (a)
owners and managers of an establishment and enterprise are responsible for damages caused by their
employees in the service of the branches in which the latter are employed or on the occasion of their
functions; (b) employers are likewise liable for damages caused by their employees and household helpers
acting within the scope of their assigned task (Article 218 of the Civil Code); and (c) employers and
corporations engaged in any kind of industry are subsidiary civilly liable for felonies committed by their
employees in the discharge of their duties (Art. 103, Revised Penal Code), plaintiff herein does not maintain
this action under the provisions of any of the articles of the codes just mentioned and against all the persons
who might be liable for the damages caused, but as a result of an admitted breach of contract of carriage
and against the defendant employer alone. We, therefore, hold that the case at bar does not come within the
exception of paragraph 1, Article 2219 of the Civil Code.
The present complaint is not based either on a "quasi-delict causing physical injuries" (Art. 2219, par. 2 of
the Civil Code). From the report of the Code Commission on the new Civil Code. We copy the following:
A question of nomenclature confronted the Commission. After a careful deliberation, it was agreed to use the
term "quasi-delict" for those obligations which do not arise from law, contracts, quasi-contracts, or criminal
offenses. They are known in Spanish legal treaties as "culpa aquiliana", "culpa-extra-contractual" or "cuasidelitos". The phrase "culpa-extra-contractual" or its translation "extra-contractual-fault" was eliminated
because it did not exclude quasi-contractual or penal obligations. "Aquilian fault" might have been selected,
but it was thought inadvisable to refer to so ancient a law as the "Lex Aquilia". So "quasi-delict" was chosen,
which more nearly corresponds to the Roman Law classification of the obligations and is in harmony with the
nature of this kind of liability.
The Commission also thought of the possibility of adopting the word "tort" from Anglo-American law. But
"tort" under that system is much broader than the Spanish-Philippine concept of obligations arising from
non-contractual negligence. "Tort" in Anglo-American jurisprudence includes not only negligence, but also
intentional criminal act, such as assault and battery, false imprisonment and deceit. In the general plan of
the Philippine legal system, intentional and malicious acts are governed by the Penal Code, although certain
exceptions are made in the Project. (Report of the Code Commission, pp. 161-162).
In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We established the distinction between obligation
derived from negligence and obligation as a result of a breach of contract. Thus, we said:
It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and
that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of
that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its
liability is direct and immediate, differing essentially in the legal viewpoint from the presumptive
responsibility for the negligence of its servants, imposed by Article 1903 of the Civil Code (Art. 2180 of the
new), which can be rebutted by proof of the exercise of due care in their selection of supervision. Article
1903 is not applicable to obligations arising EX CONTRACTU, but only to extra-contractual obligations or
to use the technical form of expression, that article relates only to CULPA AQUILIANA' and not to CULPA
CONTRACTUAL.
lawphil.net

The decisions in the cases of Castro vs. Acro Taxicab Co., (82 Phil., 359; 46 Off. Gaz., No. 5, p. 2023);
Lilius, et al. vs. Manila Railroad, 59 Phil., 758) and others, wherein moral damages were awarded to the
plaintiffs, are not applicable to the case at bar because said decision were rendered before the effectivity of

the new Civil Code (August 30, 1950) and for the further reason that the complaints filed therein were based
on different causes of action.
In view of the foregoing the sum of P2,000 was awarded as moral damages by the trial court has to be
eliminated, for under the law it is not a compensation awardable in a case like the one at bar.
What has been said heretofore relative to the moral damages claimed by Edgardo Cariaga obviously applies with
greater force to a similar claim (4th assignment of error) made by his parents.
The claim made by said spouses for actual and compensatory damages is likewise without merits. As held by the
trial court, in so far as the LTB is concerned, the present action is based upon a breach of contract of carriage to
which said spouses were not a party, and neither can they premise their claim upon the negligence or quasi-delictof
the LTB for the simple reason that they were not themselves injured as a result of the collision between the LTB bus
and train owned by the Manila Railroad Company.
Wherefore, modified as above indicated, the appealed judgement is hereby affirmed in all other respects, with costs
against appellant LTB.
Paras, C.J., Bengzon, Bautista Angelo, Labrador, Reyes, J.B.L., Barrera, Gutierrez David, and Paredes, JJ., concur.

EN BANC

G.R. No. L-25499 February 18, 1970


VILLA
REY
vs.
THE COURT OF APPEALS, TRINIDAD
QUINTOS,respondents.

TRANSIT,
A.

QUINTOS,

PRIMA

INC., petitioner,
A.

QUINTOS,

AND

JULITA

A.

Laurea and Pison for petitioner.


Bonifacio M. Abad, Jr. for respondents.

CONCEPCION, C.J.:
Petitioner, Villa Rey Transit, Inc., seeks the review by certiorari of a decision of the Court of Appeals affirming that of
the Court of First Instance of Pangasinan. The basic facts are set forth in said decision of the Court of Appeals, from
which We quote:
At about 1:30 in the morning of March 17, 1960, an Izuzu First Class passenger bus owned and
operated by the defendant, bearing Plate No. TPU-14871-Bulacan and driven by Laureano Casim,
left Lingayen, Pangasinan, for Manila.
Among its paying passengers was the deceased, Policronio Quintos, Jr. who sat on the first seat,
second row, right side of the bus.
At about 4:55 o'clock a.m. when the vehicle was nearing the northern approach of the Sadsaran
Bridge on the national highway in barrio Sto. Domingo, municipality of Minalin, Pampanga, it frontally
hit the rear side of a bullcart filled with hay.
As a result the end of a bamboo pole placed on top of the hayload and tied to the cart to hold it in
place, hit the right side of the windshield of the bus.
The protruding end of the bamboo pole, about 8 feet long from the rear of the bullcart,
penetrated through the glass windshield and landed on the face of Policronio Quintos, Jr.
who, because of the impact, fell from his seat and was sprawled on the floor.
The pole landed on his left eye and the bone of the left side of his face was fractured. He
suffered other multiple wounds and was rendered unconscious due, among other causes to severe
cerebral concussion.
A La Mallorca passenger bus going in the opposite direction towards San Fernando, Pampanga,
reached the scene of the mishap and it was stopped by Patrolman Felino Bacani of the municipal
police force of Minalin who, in the meantime, had gone to the scene to investigate.
Patrolman Bacani placed Policronio Quintos, Jr. and three other injured men who rode on the
bullcart aboard the La Mallorca bus and brought them to the provincial hospital of Pampanga at San

Fernando for medical assistance. Notwithstanding such assistance, Policronio Quintos, Jr. died at
3:15 p.m. on the same day, March 17, 1960, due to traumatic shock due to cerebral injuries.
The private respondents, Trinidad, Prima and Julita, all surnamed Quintos, are the sisters and only surviving heirs of
Policronio Quintos Jr., who died single, leaving no descendants nor ascendants. Said respondents herein brought
this action against herein petitioner, Villa Rey Transit, Inc., as owner and operator of said passenger bus, bearing
Plate No. TPU-14871-Bulacan, for breach of the contract of carriage between said petitioner and the deceased
Policronio Quintos, Jr., to recover the aggregate sum of P63,750.00 as damages, including attorney's fees.
Said petitioner defendant in the court of first instance contended that the mishap was due to a fortuitous event,
but this pretense was rejected by the trial court and the Court of Appeals, both of which found that the
accident and the death of Policronio had been due to the negligence of the bus driver, for whom petitioner
was liable under its contract of carriage with the deceased. In the language of His Honor, the trial Judge:
The mishap was not the result of any unforeseeable fortuitous event or emergency but was the
direct result of the negligence of the driver of the defendant.
The defendant must, therefore, respond for damages resulting from its breach of contract for
carriage. As the complaint alleged a total damage of only P63,750.00 although as elsewhere shown
in this decision the damages for wake and burial expenses, loss of income, death of the victim, and
attorneys fee reach the aggregate of P79,615.95, this Court finds it just that said damages be
assessed at total of only P63,750.00 as prayed for in plaintiffs' amended complaint.
The despositive part of the decision of the trial Court reads:
WHEREFORE, judgment is hereby rendered ordering the defendant to pay to the plaintiffs the
amount of P63,750.00 as damages for breach of contract of carriage resulting from the death of
Policronio Quintos, Jr.
which, as above indicated, was affirmed by the Court of Appeals.
Hence, the present petition for review oncertiorari, filed by Villa Rey Transit, Inc.
The only issue raised in this appeal is the amount of damages recoverable by private respondents herein. The
determination of such amount depends, mainly upon two (2) factors, namely: (1) the number of years on the basis of
which the damages shall be computed and (2) the rate at which the losses sustained by said respondents should be
fixed.
The first factor was based by the trial court the view of which was concurred in by the Court of Appeals upon
the life expectancy of Policronio Quintos, Jr., which was placed at 33-1/3 years he being over 29 years of age (or
around 30 years for purposes of computation) at the time of his demise by applying the formula (2/3 x [80-301 =
life expectancy) adopted in the American Expectancy Table of Mortality or the actuarial of Combined Experience
Table of Mortality. Upon the other hand, petitioner maintains that the lower courts had erred in adopting said formula
and in not acting in accordance with Alcantara v. Surro1 in which the damages were computed on a four (4) year basis,
despite the fact that the victim therein was 39 years old, at the time of his death, and had a life expectancy of 28.90 years.
The case cited is not, however, controlling in the one at bar. In the Alcantara case, none of the parties had
questioned the propriety of the four-year basis adopted by the trial court in making its award of damages. Both
parties appealed, but only as regards the amount thereof. The plaintiffs assailed the non-inclusion, in its
computation, of the bonus that the corporation, which was the victim's employer, had awarded to deserving officers

and employees, based upon the profits earned less than two (2) months before the accident that resulted in his
death. The defendants, in turn, objected to the sum awarded for the fourth year, which was treble that of the
previous years, based upon the increases given, in that fourth year, to other employees of the same corporation.
Neither this objection nor said claim for inclusion of the bonus was sustained by this Court. Accordingly, the same
had not thereby laid down any rule on the length of time to be used in the computation of damages. On the contrary,
it declared:
The determination of the indemnity to be awarded to the heirs of a deceased person has thereforeno
fixed basis. Much is left to the discretion of the court considering the moral and material damages
involved, and so it has been said that "(t)here can be no exact or uniform rule for measuring the
value of a human life and the measure of damages cannot be arrived at by precise mathematical
calculation, but the amount recoverable depends on the particular facts and circumstances of each
case. The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important
factor.' (25 C.J.S. 1241.) Other factors that are usually considered are: (1) pecuniary loss to plaintiff
or beneficiary (25 C.J.S. 1243-1250) ; (2) loss of support (25 C.J.S., 1250-1251); (3) loss of service
(25 C.J.S. 1251-1254); (4) loss of society (25 C.J.S. 1254-1255); (5) mental suffering of beneficiaries
(25 C.J.S., 1258-1259) ; and (6) medical and funeral expenses (26 C.J.S., 1254-1260)." 2
Thus, life expectancy is, not only relevant, but, also, an important element in fixing the amount recoverable by
private respondents herein. Although it is not the sole element determinative of said amount, no cogent reason has
been given to warrant its disregard and the adoption, in the case at bar, of a purely arbitrary standard, such as a
four-year rule. In short, the Court of Appeals has not erred in basing the computation of petitioner's liability upon the
life expectancy of Policronio Quintos, Jr.
With respect to the rate at which the damages shall be computed, petitioner impugns the decision appealed from
upon the ground that the damages awarded therein will have to be paid now, whereas most of those sought to be
indemnified will be suffered years later. This argument is basically true, and this is, perhaps, one of the reasons why
the Alcantara case points out the absence of a "fixed basis" for the ascertainment of the damages recoverable in
litigations like the one at bar. Just the same, the force of the said argument of petitioner herein is offset by the fact
that, although payment of the award in the case at bar will have to take place upon the finality of the decision
therein, the liability of petitioner herein had been fixed at the rate only of P2,184.00 a year, which is the annual
salary of Policronio Quintos, Jr. at the time of his death, as a young "training assistant" in the Bacnotan Cement
Industries, Inc. In other words, unlike the Alcantara case, on which petitioner relies, the lower courts did not
consider, in the present case, Policronio's potentiality and capacity to increase his future income. Indeed, upon the
conclusion of his training period, he was supposed to have a better job and be promoted from time to time, and,
hence, to earn more, if not considering the growing importance of trade, commerce and industry and the
concomitant
rise
in
the
income
level
of
officers
and
employees
therein much more.
At this juncture, it should be noted, also, that We are mainly concerned with the determination of the losses or
damages sustained by the private respondents, as dependents and intestate heirs of the deceased, and that said
damages consist, not of the full amount of his earnings, but of the support, they received or would have received
from him had he not died in consequence of the negligence of petitioner's agent. In fixing the amount of that
support, We must reckon with the "necessary expenses of his own living", which should be deducted from his
earnings. Thus, it has been consistently held that earning capacity, as an element of damages to one's estate for his
death by wrongful act is necessarily his net earning capacity or his capacity to acquire money, " less the necessary
expense for his own living.3 Stated otherwise, the amount recoverable is not loss of the entire earning, but rather the loss
of that portion of the earnings which the beneficiary would have received. 4 In other words, only net earnings, not gross
earning, are to be considered5 that is, the total of the earnings less expenses necessary in the creation of such earnings
or income6 and less living and other incidental expenses.7

All things considered, We are of the opinion that it is fair and reasonable to fix the deductible living and other
expenses of the deceased at the sum of P1,184.00 a year, or about P100.00 a month, and that, consequently, the
loss sustained by his sisters may be roughly estimated at P1,000.00 a year or P33,333.33 for the 33-1/3 years of his
life expectancy. To this sum of P33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts. 104 and
107 of the Revised Penal Code, in relation to Article 2206 of our Civil Code, as construed and applied by this
Court;8 (b) P1,727.95, actually spent by private respondents for medical and burial expenses; and (c) attorney's fee, which
was fixed by the trial court, at P500.00, but which, in view of the appeal taken by petitioner herein, first to the Court of
Appeals and later to this Supreme Court, should be increased to P2,500.00. In other words, the amount adjudged in the
decision appealed from should be reduced to the aggregate sum of P49,561.28, with interest thereon, at the legal rate,
from December 29, 1961, date of the promulgation of the decision of the trial court.
Thus modified, said decision and that of the Court of Appeals are hereby affirmed, in all other respects, with costs
against petitioner, Villa Rey Transit, Inc. It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Teehankee, Barredo and Villamor, JJ.,
concur.

Footnotes
1 93 Phil. 472.
2 Emphasis supplied.
3 Pitman v. Merriman, 117 A. 18, 19, 80 N.H. 295.
4 Lynch v. Lynch, 195 A. 799; Lockerman v. Hurlock, 126 A. 482, 2 W.W. Harr. 479; Lemmon v.
Broadwater, 108 A. 273, 7 Boyce 472; Louisville & N.R.R. Co. v. Reverman's Adm'x, 15 S.W. 2d 300;
Heppner v. Atchison T. & S.F. Ry. Co., 297 S.W. 2d 497; Darnell v. Panhandle Co-op. Ass'n 120 N.
W. 2d 278 175 Neb. 40.
5 Meehan Y. Central R. Co, of New Jersey, D.C.N.Y. 181, F. Supp. 594.
6 Frasier v. Public Service Interstate Transp. Co., C.A.N.Y., 244 F. 2d. 668.
7 Hanks v. Norfolk & Western Ry. Co., 52 S.E. 2d 717, 230 N.C. 179; Gardner v. National Bulk
Carriers, Inc., D.C. Va. 221 F. Supp. 243, affirmed, C.A., 333 F. 2d 676; Meehan v. Central R. Co. of
New Jersey, D.C. N.Y., 181 F. Supp. 594; Frazier v. Ewell Engineering & Contracting Co., 62 So. 2d
51. See, also, 2 Cooley on Torts, 168-169.
8 People v. Pantoja L-18793, Oct. 11, 1968; People v. Sangaran, L-21757, Nov. 26, 1968; People v.
Gutierrez, L-25372, Nov. 29, 1968; People v. Buenbrazo, L-27852, Nov. 29, 1968; People v. Bakang,
L-20908, Jan. 31, 1969; People v. Labutin L-23513, Jan. 31, 1969; People v. Acabado L-26104, Jan.
31, 1969; People v. Vacal, L-20913, Feb. 27, 1969, People v. Gonzales, L-23303-04, May 20, 1969;
People v. Tapac, L-26491, May 20, 1969; People v. Aranas, L-27851, Oct. 28, 1969.

EN BANC
G.R. No. L-12163

March 4, 1959

PAZ
vs.
IRENEO MIRANDA, respondent.
Alberto
O.
Almazan and Ereneta for respondent.

FORES, petitioner,

Villaraza

for

petitioner.

REYES, J.B.L., J.:


Defendant-petitioner Paz Fores brings this petition for review of the decision of the Court of Appeals (C.A. Case No.
1437-R) awarding to the plaintiff-respondent Ireneo Miranda the sums of P5,000 by way of actual damages and
counsel fees, and P10,000 as moral damages, with costs.
Respondent was one of the passengers on a jeepney driven by Eugenio Luga.
While the vehicle was descending the Sta. Mesa bridge at an excessive rate of speed, the driver lost control thereof,
causing it to swerve and to his the bridge wall.
The accident occurred on the morning of March 22, 1953. Five of the passengers were injured, including the
respondent who suffered a fracture of the upper right humerus.
He was taken to the National Orthopedic Hospital for treatment, and later was subjected to a series of operations;
the first on May 23, 1953, when wire loops were wound around the broken bones and screwed into place; a second,
effected to insert a metal splint, and a third one to remove such splint.
At the time of the trial, it appears that respondent had not yet recovered the use of his right arm.
The driver was charged with serious physical injuries through reckless imprudence, and upon interposing a plea of
guilty was sentenced accordingly.
The contention that the evidence did not sufficiently establish the identity of the vehicle as the belonging to the
petitioner was rejected by the appellate court which found, among other things, that is carried plate No. TPU-1163,
SERIES OF 1952, Quezon City, registered in the name of Paz Fores, (appellant herein) and that the vehicle even
had the name of "Doa Paz" painted below its wind shield. No evidence to the contrary was introduced by the
petitioner, who relied on an attack upon the credibility of the two policemen who went to the scene of the incident.
A point to be further remarked is petitioner's contention that on March 21, 1953, or one day before the accident
happened, she allegedly sold the passenger jeep that was involved therein to a certain Carmen Sackerman.

The initial problem raised by the petitioner in this appeal may be formulated thus "Is the approval of the Public
Service Commission necessary for the sale of a public service vehicle even without conveying therewith the
authority to operate the same?" Assuming the dubious sale to be a fact, the court of Appeals answered the query in
the affirmative. The ruling should be upheld.
Section 20 of the Public Service Act (Commonwealth Act No. 146) provides:

Sec. 20. Subject to established limitations and exceptions and saving provisions to the contrary, it shall be
unlawful for any public service or for the owner, lessee or operator thereof, without the previous approval
and authority of the Commission previously had
xxx

xxx

xxx

(g) To sell, alienate, mortgage, encumber or lease its property, franchises, certificates, privileges, or rights, or
any part thereof; or merge or consolidate its property, franchises, privileges or rights, or any part thereof,
with those of any other public service. The approval herein required shall be given, after notice to the public
and after hearing the persons interested at a public hearing, if it be shown that there are just and reasonable
grounds for making the mortgage or encumbrance, for liabilities of more than one year maturity, or the sale,
alienation, lease, merger, or consolidation to be approved and that the same are not detrimental to the public
interest, and in case of a sale, the date on which the same is to be consummated shall be fixed in the order
of approval: Provided, however, That nothing herein contained shall be construed to prevent the transaction
from being negotiated or completed before its approval or to prevent the sale, alienation, or lease by any
public service of any of its property in the ordinary course of its business.
Interpreting the effects of this particular provision of law, we have held in the recent cases of Montoya vs.
Ignacio,* 50 Off. Gaz. No. 1, p. 108; Timbol vs. Osias, et al., G. R. No. L-7547, April 30, 1955, and Medina vs.
Cresencia, 99 Phil., 506; 52 Off. Gaz. No. 10, p. 4606, that a transfer contemplated by the law, if made without the
requisite approval of the Public Service Commission, is not effective and binding in so far as the responsibility of the
grantee under the franchise in relation to the public is concerned. Petitioner assails, however, the applicability of
these rulings to the instant case, contending that in those cases, the operator did not convey, by lease or by sale,
the vehicle independently of his rights under the franchise. This line of reasoning does not find support in the law.
The provisions of the statute are clear and prohibit the sale, alienation, lease, or encumbrance of the property,
franchise, certificate, privileges or rights, or any part thereof of the owner or operator of the public service
Commission. The law was designed primarily for the protection of the public interest; and until the approval of the
public Service Commission is obtained the vehicle is, in contemplation of law, still under the service of the owner or
operator standing in the records of the Commission which the public has a right to rely upon.
The proviso contained in the aforequoted law, to the effect that nothing therein shall be construed "to prevent the
transaction from being negotiated or complete before its approval", means only that the sale without the required
approval is still valid and binding between the parties (Montoya vs. Ignacio, supra). The phrase "in the ordinary
course of its business" found in the other proviso" or to prevent the sale, alienation, or lease by any public service of
any of its property". As correctly observed by the lower court, could not have been intended to include the sale of the
vehicle itself, but at most may refer only to such property that may be conceivably disposed or by the carrier in the
ordinary course of its business, like junked equipment or spare parts.
The case of Indalecio de Torres vs. Vicente Ona (63 Phil., 594, 597) is enlightening; and there, it was held:
Under the law, the Public Service Commission has not only general supervision and regulation of, but also
full jurisdiction and control over all public utilities including the property, equipment and facilities used, and
the property rights and franchise enjoyed by every individual and company engaged i the performance of a
public service in the sense this phrase is used in the Public Service Act or Act No. 3108). By virtue of the
provisions of said Act, motor vehicles used in the performance of a service, as the transportation of
freightfrom one point to another, have to this date been considered and they cannot but be so
considered-public service property; and, by reason of its own nature, a TH truck, which means that the
operator thereof places it at the disposal of anybody who is willing to pay a rental of its use, when he desires
to transfer or carry his effects, merchandise or any other cargo from one place to another, is necessarily a
public service property. (Emphasis supplied)

Of course, this court has held in the case of Bachrach Motor co. vs. Zamboanga Transportation Co., 52 Phil., 244,
that there may be a nunc pro tunc authorization which has the effect of having the approval retroact to the date of
the transfer; but such outcome cannot prejudice rights intervening in the meantime. It appears that no such approval
was given by the Commission before the accident occurred.
The P10,000 actual damages awarded by the Court of First Instance of Manila were reduced by the Court of
Appeals to only P2,000, on the ground that a review of the records failed to disclose a sufficient basis for the trial
court's appraisal, since the only evidence presented on this point consisted of respondent's bare statement that his
expenses and loss of income amounted to P20,000. On the other hand, "it cannot be denied," the lower court said,
"that appellee (respondent) did incur expenses"' It is well to note further that respondent was a painter by profession
and a professor of Fine Arts, so that the amount of P2,000 awarded cannot be said to be excessive (see Arts. 2224
and 2225, Civil Code of the Philippines). The attorney's fees in the sum of P3,000 also awarded to the respondent
are assailed on the ground that the Court of First Instance did not provided for the same, and since no appeal was
interposed by said respondent, it was allegedly error for the Court of Appeals to award themmotu proprio. Petitioner
fails to note that attorney's fees are included in the concept of actual damages under the Civil Code and may be
awarded whenever the court deems it is just and equitable (Art. 2208, Civil Code of the Philippines). We see no
reason to alter these awards.
Anent the moral damages ordered to be paid to the respondent, the same must be discarded. We have repeatedly
ruled (Cachero vs. Manila Yellow Taxicab Co. Inc., 101 Phil., 523; 54 Off. Gaz., [26], 6599; Necesito, et al vs. Paras,
104 Phil., 75; 56 Off. Gaz., [23] 4023, that moral damages are not recoverable in damage actions predicted on a
breach of the contract of transportation, in view of Articles 2219 and 2220 of the new Civil Code, which provide as
follows:
Art. 2219. Moral damages may be recovered in the following and analogous cases:
(1) A criminal offense resulting in physical injuries;
(2) Quasi-delicts causing physical injuries;
xxx

xxx

xxx

Art. 2220. Willful injury to property may be a legal ground for awarding moral damages if the court should
find that, under circumstances, such damages are justify due. The same rule applies to breaches of contract
where the defendant acted fraudulently or in bad faith.
By contrasting the provisions of these two article it immediately becomes apparent that:
(a) In case of breach of contract (including one of transportation) proof of bad faith or fraud (dolus), i.e., wanton or
deliberately injurious conduct, is essential to justify an award of moral damages; and
(b) That a breach of contract can not be considered included in the descriptive term "analogous cases" used in Art.
2219; not only because Art. 2220 specifically provides for the damages that are caused by contractual breach, but
because the definition of quasi-delict in Art. 2176 of the Code expressly excludes the cases where there is a
"preexisting contractual relation between the parties."
Art. 2176. Whoever by act or omission causes damage to another, there being fault or negligence, is obliged
to pay for the damage dome. Such fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the provisions of this Chapter.

The exception to the basic rule of damages now under consideration is a mishap resulting in the death of a
passenger, in which case Article 1764 makes the common carrier expressly subject to the rule of Art. 2206, that
entitles the deceased passenger to "demand moral damages for mental anguish by reason of the death of the
deceased" (Necesito vs. Paras, 104 Phil., 84, Resolution on motion to reconsider, September 11, 1958). But the
exceptional rule of Art. 1764 makes it all the more evident that where the injured passenger does not die, moral
damages are not recoverable unless it is proved that the carrier was guilty of malice or bad faith. We think it is clear
that the mere carelessness of the carrier's driver does not per se constitute of justify an inference of malice or bad
faith on the part of the carrier; and in the case at bar there is no other evidence of such malice to support the award
of moral damages by the Court of Appeals. To award moral damages for breach of contract, therefore, without proof
of bad faith or malice on the part of the defendant, as required by Art. 220, would be to violate the clear provisions of
the law, and constitute unwarranted judicial legislation.
The Court of Appeals has invoked our rulings in Castro vs. Acro Taxicab Co., G.R. No. 49155, December 14, 1948
and Layda vs. Court of Appeals, 90 Phil., 724; but these doctrines were predicated upon our former law of damages,
before judicial discretion in fixing them became limited by the express provisions of the new Civil Code (previously
quoted). Hence, the aforesaid rulings are now inapplicable.
Upon the other hand, the advantageous position of a party suing a carrier for breach of the contract of
transportations explains, to some extent, the limitations imposed by the new Code on the amount of the recovery.
The action for breach of contract imposes on the defendant carrier a presumption of liability upon mere proof of
injury to the passenger; that latter is relieved from the duty to established the fault of the carrier, or of his employees,
and the burden is placed on the carrier to prove that it was due to an unforseen event or to force majeure (Cangco
vs. Manila Railroad Co., 38 Phil., 768, 777). Moreover, the carrier, unlike in suits for quasi-delict, may not escape
liability by proving that it has exercised due diligence in the selection and supervision of its employees (Art. 1759,
new civil code; Cangco vs. Manila Railroad Co., supra; Prado vs. Manila Electric Co., 51 Phil., 900).
The difference in conditions, defenses and proof, as well as the codal concept of quasi-delict as
essentially extracontractual negligence, compel us to differentiate between action ex contractu, and actions quasi ex
delicto, and prevent us from viewing the action for breach of contract as simultaneously embodying an action on
tort. Neither can this action be taken as one to enforce on employee's liability under Art. 103 of the Revised Penal
Code, since the responsibility is not alleged to be subsidiary, nor is there on record any averment or proof that the
driver of appellant was insolvent. In fact, he is not even made a party to the suit.
It is also suggested that a carrier's violation of its engagement to safety transport the passenger involves a breach of
the passenger's confidence, and therefore should be regarded as a breach of contract in bad faith, justifying
recovery of moral damages under Art. 2220. This theory is untenable, for under it the carrier would always be
deemed in bad faith, in every case its obligation to the passenger is infringed, and it would be never accountable for
simple negligence; while under the law (Art. 1756). the presumption is that common carriers acted negligently(and
not maliciously), and Art. 1762 speaks of negligence of the common carrier.
ART. 1756. In case of death of or injuries to passengers, common carriers are presumed to have been at
fault or to have acted negligently, unless they prove that they observed extraordinary diligence as prescribed
in article 1733 and 1755.
ART. 1762. The contributory negligence of the passenger does not bar recovery of damages for his death or
injuries, if the proximate cause thereof is the negligence of the common carrier, but the amount of damages
shall be equitably reduced.
The distinction between fraud, bad faith or malice in the sense of deliberate or wanton wrong doing and negligence
(as mere carelessness) is too fundamental in our law to be ignored (Arts. 1170-1172); their consequences being
clearly differentiated by the Code.

ART. 2201. In contracts and quasi-contracts, the damages for which the obligor who acted in good faith is
liable shall be those that are the natural and probable consequences of the breach of the obligation, and
which the parties have foreseen or could have reasonably foreseen at the time the obligation was
constituted.
In case of fraud, bad faith, malice or wanton attitude, the obligor shall be responsible for all damages which
may be reasonably attributed to the non-performance of the obligation.
It is to be presumed, in the absence of statutory provision to the contrary, that this difference was in the mind of the
lawmakers when in Art. 2220 they limited recovery of moral damages to breaches of contract in bad faith. It is true
that negligence may be occasionally so gross as to amount to malice; but that fact must be shown in evidence, and
a carrier's bad faith is not to be lightly inferred from a mere finding that the contract was breached through
negligence of the carrier's employees.
In view of the foregoing considerations, the decision of the Court of Appeals is modified by eliminating the award of
P5,000.00 by way of moral damages. (Court of Appeals Resolution of May 5, 1957). In all other respects, the
judgment is affirmed. No costs in this instance. So ordered.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Bautista Angelo, Labrador, Concepcion and Endencia,
JJ.,concur.

EN BANC
G.R. No. L-21438

September 28, 1966

AIR
vs.
RAFAEL CARRASCOSO and the HONORABLE COURT OF APPEALS, respondents.
Lichauco,
Picazo
and
Bengzon Villegas and Zarraga for respondent R. Carrascoso.

Agcaoili

FRANCE, petitioner,

for

petitioner.

SANCHEZ, J.:
The Court of First Instance of Manila 1 sentenced petitioner to pay respondent Rafael Carrascoso P25,000.00 by way
of moral damages; P10,000.00 as exemplary damages; P393.20 representing the difference in fare between first
class and tourist class for the portion of the trip Bangkok-Rome, these various amounts with interest at the legal
rate, from the date of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees; and the costs of suit.
On appeal,2 the Court of Appeals slightly reduced the amount of refund on Carrascoso's plane ticket from P393.20
to P383.10, and voted to affirm the appealed decision "in all other respects", with costs against petitioner.
The case is now before us for review on certiorari.
The facts declared by the Court of Appeals as " fully supported by the evidence of record", are:
Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left Manila for Lourdes on
March 30, 1958.
On March 28, 1958, the defendant, Air France, through its authorized agent, Philippine Air Lines, Inc., issued
to plaintiff a "first class" round trip airplane ticket from Manila to Rome.
From Manila to Bangkok, plaintiff travelled in "first class", but at Bangkok, the Manager of the defendant
airline forced plaintiff to vacate the "first class" seat that he was occupying because, in the words of
the witness Ernesto G. Cuento, there was a "white man", who, the Manager alleged, had a "better right"
to the seat.
When asked to vacate his "first class" seat, the plaintiff, as was to be expected, refused, and told
defendant's Manager that his seat would be taken over his dead body; a commotion ensued, and, according
to said Ernesto G. Cuento, "many of the Filipino passengers got nervous in the tourist class; when they
found out that Mr. Carrascoso was having a hot discussion with the white man [manager], they came all
across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the white man" (Transcript, p. 12,
Hearing of May 26, 1959); and plaintiff reluctantly gave his "first class" seat in the plane. 3
1. The trust of the relief petitioner now seeks is that we review "all the findings" 4 of respondent Court of Appeals.
Petitioner charges that respondent court failed to make complete findings of fact on all the issues properly laid
before it. We are asked to consider facts favorable to petitioner, and then, to overturn the appellate court's decision.
Coming into focus is the constitutional mandate that "No decision shall be rendered by any court of record without
expressing therein clearly and distinctly the facts and the law on which it is based". 5 This is echoed in the statutory
demand that a judgment determining the merits of the case shall state "clearly and distinctly the facts and the law on
which it is based"; 6 and that "Every decision of the Court of Appeals shall contain complete findings of fact on all
issues properly raised before it". 7

A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8 The law, however, solely insists
that a decision state the "essential ultimate facts" upon which the court's conclusion is drawn. 9 A court of justice is
not hidebound to write in its decision every bit and piece of evidence 10 presented by one party and the other upon
the issues raised. Neither is it to be burdened with the obligation "to specify in the sentence the facts" which a party
"considered as proved". 11 This is but a part of the mental process from which the Court draws the essential ultimate
facts. A decision is not to be so clogged with details such that prolixity, if not confusion, may result. So long as the
decision of the Court of Appeals contains the necessary facts to warrant its conclusions, it is no error for said court
to withhold therefrom "any specific finding of facts with respect to the evidence for the defense". Because as this
Court well observed, "There is no law that so requires". 12 Indeed, "the mere failure to specify (in the decision) the
contentions of the appellant and the reasons for refusing to believe them is not sufficient to hold the same contrary
to the requirements of the provisions of law and the Constitution". It is in this setting that in Manigque, it was held
that the mere fact that the findings "were based entirely on the evidence for the prosecution without taking into
consideration or even mentioning the appellant's side in the controversy as shown by his own testimony", would not
vitiate the judgment. 13 If the court did not recite in the decision the testimony of each witness for, or each item of
evidence presented by, the defeated party, it does not mean that the court has overlooked such testimony or such
item of evidence. 14 At any rate, the legal presumptions are that official duty has been regularly performed, and that
all the matters within an issue in a case were laid before the court and passed upon by it. 15
Findings of fact, which the Court of Appeals is required to make, maybe defined as "the written statement of the
ultimate facts as found by the court ... and essential to support the decision and judgment rendered thereon". 16They
consist of the court's "conclusions" with respect to the determinative facts in issue". 17 A question of law, upon the
other hand, has been declared as "one which does not call for an examination of the probative value of the evidence
presented by the parties." 18
2. By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the Court of
Appeals. 19 That judgment is conclusive as to the facts. It is not appropriately the business of this Court to alter the
facts or to review the questions of fact. 20
With these guideposts, we now face the problem of whether the findings of fact of the Court of Appeals support its
judgment.
3. Was Carrascoso entitled to the first class seat he claims?
It is conceded in all quarters that on March 28, 1958 he paid to and received from petitioner a first class ticket. But
petitioner asserts that said ticket did not represent the true and complete intent and agreement of the parties; that
said respondent knew that he did not have confirmed reservations for first class on any specific flight, although he
had tourist class protection; that, accordingly, the issuance of a first class ticket was no guarantee that he would
have a first class ride, but that such would depend upon the availability of first class seats.
These are matters which petitioner has thoroughly presented and discussed in its brief before the Court of Appeals
under its third assignment of error, which reads: "The trial court erred in finding that plaintiff had confirmed
reservations for, and a right to, first class seats on the "definite" segments of his journey, particularly that from
Saigon to Beirut". 21
And, the Court of Appeals disposed of this contention thus:
Defendant seems to capitalize on the argument that the issuance of a first-class ticket was no guarantee
that the passenger to whom the same had been issued, would be accommodated in the first-class
compartment, for as in the case of plaintiff he had yet to make arrangements upon arrival at every station for
the necessary first-class reservation. We are not impressed by such a reasoning. We cannot understand
how a reputable firm like defendant airplane company could have the indiscretion to give out tickets it never
meant to honor at all. It received the corresponding amount in payment of first-class tickets and yet it
allowed the passenger to be at the mercy of its employees. It is more in keeping with the ordinary course of
business that the company should know whether or riot the tickets it issues are to be honored or not. 22
Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner's contention, thus:

On the fact that plaintiff paid for, and was issued a "First class" ticket, there can be no question. Apart from his
testimony, see plaintiff's Exhibits "A", "A-1", "B", "B-1," "B-2", "C" and "C-1", and defendant's own witness, Rafael
Altonaga, confirmed plaintiff's testimony and testified as follows:
Q. In these tickets there are marks "O.K." From what you know, what does this OK mean?
A. That the space is confirmed.
Q. Confirmed for first class?
A. Yes, "first class". (Transcript, p. 169)
xxx

xxx

xxx

Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that although plaintiff
paid for, and was issued a "first class" airplane ticket, the ticket was subject to confirmation in Hongkong. The court
cannot give credit to the testimony of said witnesses. Oral evidence cannot prevail over written evidence, and
plaintiff's Exhibits "A", "A-l", "B", "B-l", "C" and "C-1" belie the testimony of said witnesses, and clearly show that the
plaintiff was issued, and paid for, a first class ticket without any reservation whatever.
Furthermore, as hereinabove shown, defendant's own witness Rafael Altonaga testified that the reservation for a
"first class" accommodation for the plaintiff was confirmed. The court cannot believe that after such confirmation
defendant had a verbal understanding with plaintiff that the "first class" ticket issued to him by defendant would be
subject to confirmation in Hongkong. 23
We have heretofore adverted to the fact that except for a slight difference of a few pesos in the amount refunded on
Carrascoso's ticket, the decision of the Court of First Instance was affirmed by the Court of Appeals in all other
respects. We hold the view that such a judgment of affirmance has merged the judgment of the lower court. 24Implicit
in that affirmance is a determination by the Court of Appeals that the proceeding in the Court of First Instance was
free from prejudicial error and "all questions raised by the assignments of error and all questions that might have
been raised are to be regarded as finally adjudicated against the appellant". So also, the judgment affirmed "must
be regarded as free from all error". 25 We reached this policy construction because nothing in the decision of the
Court of Appeals on this point would suggest that its findings of fact are in any way at war with those of the trial
court. Nor was said affirmance by the Court of Appeals upon a ground or grounds different from those which were
made the basis of the conclusions of the trial court. 26
If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat, notwithstanding the fact that
seat availability in specific flights is therein confirmed, then an air passenger is placed in the hollow of the hands of
an airline. What security then can a passenger have? It will always be an easy matter for an airline aided by its
employees, to strike out the very stipulations in the ticket, and say that there was a verbal agreement to the contrary.
What if the passenger had a schedule to fulfill? We have long learned that, as a rule, a written document speaks a
uniform language; that spoken word could be notoriously unreliable. If only to achieve stability in the relations
between passenger and air carrier, adherence to the ticket so issued is desirable. Such is the case here. The lower
courts refused to believe the oral evidence intended to defeat the covenants in the ticket.
The foregoing are the considerations which point to the conclusion that there are facts upon which the Court of
Appeals predicated the finding that respondent Carrascoso had a first class ticket and was entitled to a first class
seat at Bangkok, which is a stopover in the Saigon to Beirut leg of the flight. 27 We perceive no "welter of distortions
by the Court of Appeals of petitioner's statement of its position", as charged by petitioner. 28 Nor do we subscribe to
petitioner's accusation that respondent Carrascoso "surreptitiously took a first class seat to provoke an issue". 29 And
this because, as petitioner states, Carrascoso went to see the Manager at his office in Bangkok "to confirm my seat
and because from Saigon I was told again to see the Manager". 30 Why, then, was he allowed to take a first class
seat in the plane at Bangkok, if he had no seat? Or, if another had a better right to the seat?
4. Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claim is that Carrascoso's
action is planted upon breach of contract; that to authorize an award for moral damages there must be an averment

of fraud or bad faith; 31 and that the decision of the Court of Appeals fails to make a finding of bad faith. The pivotal
allegations in the complaint bearing on this issue are:
3. That ... plaintiff entered into a contract of air carriage with the Philippine Air Lines for a valuable
consideration, the latter acting as general agents for and in behalf of the defendant, under which said
contract, plaintiff was entitled to, as defendant agreed to furnish plaintiff, First Class passage on defendant's
plane during the entire duration of plaintiff's tour of Europe with Hongkong as starting point up to and until
plaintiff's return trip to Manila, ... .
4. That, during the first two legs of the trip from Hongkong to Saigon and from Saigon to Bangkok, defendant
furnished to the plaintiff First Class accommodation but only after protestations, arguments and/or insistence
were made by the plaintiff with defendant's employees.
5. That finally, defendant failed to provide First Class passage, but instead furnished plaintiff
only TouristClass accommodations from Bangkok to Teheran and/or Casablanca, ... the plaintiff has
been compelled by defendant's employees to leave the First Class accommodation berths at Bangkok after
he was already seated.
6. That consequently, the plaintiff, desiring no repetition of the inconvenience and embarrassments brought
by defendant's breach of contract was forced to take a Pan American World Airways plane on his return trip
from Madrid to Manila.32
xxx

xxx

xxx

2. That likewise, as a result of defendant's failure to furnish First Class accommodations aforesaid, plaintiff suffered
inconveniences, embarrassments, and humiliations, thereby causing plaintiff mental anguish, serious anxiety,
wounded feelings, social humiliation, and the like injury, resulting in moral damages in the amount of P30,000.00. 33
xxx

xxx

xxx

The foregoing, in our opinion, substantially aver: First, That there was a contract to furnish plaintiff a first class
passage covering, amongst others, the Bangkok-Teheran leg; Second, That said contract was breached when
petitioner failed to furnish first class transportation at Bangkok; and Third, that there was bad faith when petitioner's
employee compelled Carrascoso to leave his first class accommodation berth "after he was already, seated" and to
take a seat in the tourist class, by reason of which he suffered inconvenience, embarrassments and humiliations,
thereby causing him mental anguish, serious anxiety, wounded feelings and social humiliation, resulting in moral
damages. It is true that there is no specific mention of the term bad faith in the complaint. But, the inference of bad
faith is there, it may be drawn from the facts and circumstances set forth therein. 34 The contract was averred to
establish the relation between the parties. But the stress of the action is put on wrongful expulsion.
Quite apart from the foregoing is that (a) right the start of the trial, respondent's counsel placed petitioner on guard
on what Carrascoso intended to prove: That while sitting in the plane in Bangkok, Carrascoso was oustedby
petitioner's manager who gave his seat to a white man; 35 and (b) evidence of bad faith in the fulfillment of the
contract was presented without objection on the part of the petitioner. It is, therefore, unnecessary to inquire as to
whether or not there is sufficient averment in the complaint to justify an award for moral damages. Deficiency in the
complaint, if any, was cured by the evidence. An amendment thereof to conform to the evidence is not even
required. 36 On the question of bad faith, the Court of Appeals declared:
That the plaintiff was forced out of his seat in the first class compartment of the plane belonging to the
defendant Air France while at Bangkok, and was transferred to the tourist class not only without his consent
but against his will, has been sufficiently established by plaintiff in his testimony before the court,
corroborated by the corresponding entry made by the purser of the plane in his notebook which notation
reads as follows:
"First-class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene",

and by the testimony of an eye-witness, Ernesto G. Cuento, who was a co-passenger. The captain of the
plane who was asked by the manager of defendant company at Bangkok to intervene even refused to do so.
It is noteworthy that no one on behalf of defendant ever contradicted or denied this evidence for the plaintiff.
It could have been easy for defendant to present its manager at Bangkok to testify at the trial of the case, or
yet to secure his disposition; but defendant did neither. 37
The Court of appeals further stated
Neither is there evidence as to whether or not a prior reservation was made by the white man. Hence, if the
employees of the defendant at Bangkok sold a first-class ticket to him when all the seats had already been
taken, surely the plaintiff should not have been picked out as the one to suffer the consequences and to be
subjected to the humiliation and indignity of being ejected from his seat in the presence of others. Instead of
explaining to the white man the improvidence committed by defendant's employees, the manager adopted
the more drastic step of ousting the plaintiff who was then safely ensconsced in his rightful seat. We are
strengthened in our belief that this probably was what happened there, by the testimony of defendant's
witness Rafael Altonaga who, when asked to explain the meaning of the letters "O.K." appearing on the
tickets of plaintiff, said "that the space is confirmed for first class. Likewise, Zenaida Faustino, another
witness for defendant, who was the chief of the Reservation Office of defendant, testified as follows:
"Q How does the person in the ticket-issuing office know what reservation the passenger has
arranged with you?
A They call us up by phone and ask for the confirmation." (t.s.n., p. 247, June 19, 1959)
In this connection, we quote with approval what the trial Judge has said on this point:
Why did the, using the words of witness Ernesto G. Cuento, "white man" have a "better right" to the
seat occupied by Mr. Carrascoso? The record is silent. The defendant airline did not prove "any
better", nay, any right on the part of the "white man" to the "First class" seat that the plaintiff was
occupying and for which he paid and was issued a corresponding "first class" ticket.
If there was a justified reason for the action of the defendant's Manager in Bangkok, the defendant
could have easily proven it by having taken the testimony of the said Manager by deposition, but
defendant did not do so; the presumption is that evidence willfully suppressed would be adverse if
produced [Sec. 69, par (e), Rules of Court]; and, under the circumstances, the Court is constrained
to find, as it does find, that the Manager of the defendant airline in Bangkok not merely asked but
threatened the plaintiff to throw him out of the plane if he did not give up his "first class" seat
because the said Manager wanted to accommodate, using the words of the witness Ernesto G.
Cuento, the "white man".38
It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use the term
"bad faith". But can it be doubted that the recital of facts therein points to bad faith? The manager not only
prevented Carrascoso from enjoying his right to a first class seat; worse, he imposed his arbitrary will; he
forcibly ejected him from his seat, made him suffer the humiliation of having to go to the tourist class
compartment - just to give way to another passenger whose right thereto has not been established.
Certainly, this is bad faith. Unless, of course, bad faith has assumed a meaning different from what is
understood in law. For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design or
with some motive of self-interest or will or for ulterior purpose." 39
And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment of the
Court of First Instance, thus:
The evidence shows that the defendant violated its contract of transportation with plaintiff in bad
faith, with the aggravating circumstances that defendant's Manager in Bangkok went to the extent of
threatening the plaintiff in the presence of many passengers to have him thrown out of the airplane
to give the "first class" seat that he was occupying to, again using the words of the witness Ernesto
G. Cuento, a "white man" whom he (defendant's Manager) wished to accommodate, and the

defendant has not proven that this "white man" had any "better right" to occupy the "first class" seat
that the plaintiff was occupying, duly paid for, and for which the corresponding "first class" ticket was
issued by the defendant to him.40
5. The responsibility of an employer for the tortious act of its employees need not be essayed. It is well settled in
law. 41 For the willful malevolent act of petitioner's manager, petitioner, his employer, must answer. Article 21 of the
Civil Code says:
ART. 21. Any person who willfully causes loss or injury to another in a manner that is contrary to morals,
good customs or public policy shall compensate the latter for the damage.
In parallel circumstances, we applied the foregoing legal precept; and, we held that upon the provisions of Article
2219 (10), Civil Code, moral damages are recoverable. 42
6. A contract to transport passengers is quite different in kind and degree from any other contractual relation. 43And
this, because of the relation which an air-carrier sustains with the public. Its business is mainly with the travelling
public. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore,
generates a relation attended with a public duty. Neglect or malfeasance of the carrier's employees, naturally, could
give ground for an action for damages.
Passengers do not contract merely for transportation. They have a right to be treated by the carrier's employees
with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal
misconduct, injurious language, indignities and abuses from such employees. So it is, that any rule or discourteous
conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier. 44
Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of contract and a tort,
giving a right of action for its agent in the presence of third persons to falsely notify her that the check was worthless
and demand payment under threat of ejection, though the language used was not insulting and she was not
ejected." 46 And this, because, although the relation of passenger and carrier is "contractual both in origin and
nature" nevertheless "the act that breaks the contract may be also a tort". 47 And in another case, "Where a
passenger on a railroad train, when the conductor came to collect his fare tendered him the cash fare to a point
where the train was scheduled not to stop, and told him that as soon as the train reached such point he would pay
the cash fare from that point to destination, there was nothing in the conduct of the passenger which justified the
conductor in using insulting language to him, as by calling him a lunatic," 48 and the Supreme Court of South
Carolina there held the carrier liable for the mental suffering of said passenger.
1awphl.nt

Petitioner's contract with Carrascoso is one attended with public duty. The stress of Carrascoso's action as we have
said, is placed upon his wrongful expulsion. This is a violation of public duty by the petitioner air carrier a case
of quasi-delict. Damages are proper.
7. Petitioner draws our attention to respondent Carrascoso's testimony, thus
Q You mentioned about an attendant. Who is that attendant and purser?
A When we left already that was already in the trip I could not help it. So one of the flight attendants
approached me and requested from me my ticket and I said, What for? and she said, "We will note that you
transferred to the tourist class". I said, "Nothing of that kind. That is tantamount to accepting my transfer."
And I also said, "You are not going to note anything there because I am protesting to this transfer".
Q Was she able to note it?
A No, because I did not give my ticket.
Q About that purser?
A Well, the seats there are so close that you feel uncomfortable and you don't have enough leg room, I
stood up and I went to the pantry that was next to me and the purser was there. He told me, "I have

recorded the incident in my notebook." He read it and translated it to me because it was recorded in
French "First class passenger was forced to go to the tourist class against his will, and that the captain
refused to intervene."
Mr. VALTE
I move to strike out the last part of the testimony of the witness because the best evidence would be the
notes. Your Honor.
COURT
I will allow that as part of his testimony. 49
Petitioner charges that the finding of the Court of Appeals that the purser made an entry in his notebook reading
"First class passenger was forced to go to the tourist class against his will, and that the captain refused to intervene"
is predicated upon evidence [Carrascoso's testimony above] which is incompetent. We do not think so. The subject
of inquiry is not the entry, but the ouster incident. Testimony on the entry does not come within the proscription of the
best evidence rule. Such testimony is admissible. 49a
Besides, from a reading of the transcript just quoted, when the dialogue happened, the impact of the startling
occurrence was still fresh and continued to be felt. The excitement had not as yet died down. Statements then, in
this environment, are admissible as part of the res gestae. 50 For, they grow "out of the nervous excitement and
mental and physical condition of the declarant". 51 The utterance of the purser regarding his entry in the notebook
was spontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has been
guaranteed. 52 It thus escapes the operation of the hearsay rule. It forms part of the res gestae.
At all events, the entry was made outside the Philippines. And, by an employee of petitioner. It would have been an
easy matter for petitioner to have contradicted Carrascoso's testimony. If it were really true that no such entry was
made, the deposition of the purser could have cleared up the matter.
We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.
8. Exemplary damages are well awarded. The Civil Code gives the court ample power to grant exemplary damages
in contracts and quasi- contracts. The only condition is that defendant should have "acted in a wanton,
fraudulent, reckless, oppressive, or malevolent manner." 53 The manner of ejectment of respondent Carrascoso from
his first class seat fits into this legal precept. And this, in addition to moral damages. 54
9. The right to attorney's fees is fully established. The grant of exemplary damages justifies a similar judgment for
attorneys' fees. The least that can be said is that the courts below felt that it is but just and equitable that attorneys'
fees be given. 55 We do not intend to break faith with the tradition that discretion well exercised as it was here
should not be disturbed.
10. Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus:
P25,000.00 as moral damages; P10,000.00, by way of exemplary damages, and P3,000.00 as attorneys' fees. The
task of fixing these amounts is primarily with the trial court. 56 The Court of Appeals did not interfere with the same.
The dictates of good sense suggest that we give our imprimatur thereto. Because, the facts and circumstances point
to the reasonableness thereof.57
On balance, we say that the judgment of the Court of Appeals does not suffer from reversible error. We accordingly
vote to affirm the same. Costs against petitioner. So ordered.
Concepcion, C.J., Reyes, J.B.L., Barrera, Dizon, Regala, Makalintal, Zaldivar and Castro, JJ., concur.
Bengzon, J.P., J., took no part.
Footnotes
1

Civil Case No. 38810, "Rafael Carrascoso, plaintiff, vs. Air France, defendant," R.A., pp. 79-80.

C.A.-G.R. No. 26522-R, "Rafael Carrascoso, plaintiff-appellee, vs. Air France, defendant-appellant."

Appendix A, petitioner's brief, pp 146-147. See also R.A., pp. 66-67.

Petitioner's brief, p. 142.

Section 12, Article VIII, Constitution.

Section 1, Rule 36, Rules of Court. See also Section 2, Rule 120, in reference to judgments in criminal
cases.
6

Sec. 4. Rule 51; Sec. 33(2), Judiciary Act of 1948, as amended.

Edwards vs. McCoy, 22 Phil. 598, 601; Yangco vs. Court of First Instance of Manila, et al., 29 Phil. 183,
191.
8

Braga vs. Millora, 3 Phil. 458, 465.

10

Id.

Aringo vs. Arena 14 Phil. 263, 266; emphasis supplied.

11

12

Reyes vs. People. 71 Phil. 598, 600.

People vs. Manigque 35 O.G., No. 94, pp. 1682, 1683, citing Section 133 of the Code of Civil Procedure
and Section 12, Art. VIII, Constitution, supra.
13

14

Badger et al. vs. Boyd, 65 S.W. (2d), pp. 601, 610.

15

Section 5, (m) and (o), Rule 131, Rules of Court.

16

In re Good's Estate, 266 P. (2d), pp. 719, 729.

17

Badger et al. vs. Boyd, supra.

18

Goduco vs. Court of Appeals, et al., L-17647, February 28, 1964.

19

Section 2, Rule 45, Rules of Court, formerly Section 2, Rule 46 of the Rules of Court.

Medel, et al. vs. Calasanz, et al. L-14835, August 31, 1960; Astraquillo, et al. vs. Javier, et al., L-20034,
January 30, 1965.
20

21

Petitioner's brief in the Court of Appeals, pp. 82-98.

22

Decision of the Court of Appeals, Appendix A, petitioner's brief, pp. 148-149.

23

R.A., pp. 67, 73.

24

5 B C.J.S., p. 295; 3 Am. Jur. p. 678.

25

3 Am. Jur., pp. 677-678.

26

See Garcia Valdez vs. Seterana Tuason, 40 Phil, 943, 951.

27

Carrascoso's ticket, according to petitioner (brief, pp. 7-8), shows:

Segment or leg Carrier


1. Manila to
PAL
Hongkong
2. Hongkong to VN(Air
Saigon
Vietnam)
3. Saigon to AF(Air
Beirut
France)

Flight
No.

Date
of
Departure

300A

March 30

693

March 31

245

March 31

28

Petitioner's brief, p. 50; see also id., pp. 37 and 46.

29

Id., p. 103.

30

Ibid., p. 102.

Article 2220, Civil Code reads: "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."
31

32

R.A., p. 2-4; emphasis supplied.

33

R.A., P. 5; second cause of action.

Copeland vs. Dunehoo et al., 138 S.E., 267, 270. See also 25 C.J.S., pp. 758-759; 15 Am. Jur., pp. 766767.
34

35

Statement of Attorney Villegas for respondent Carrascoso in open court. Respondent's brief, p. 33.

Section 5, Rule 10, Rules of Court, in part reads: "SEC. 5. Amendment to conform to or authorize
presentation of evidence.When issues not raised by the pleadings are tried by express or implied consent
of the parties, they shall be treated in all respects, as if they had been raised in the pleadings. Such
amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise
these issues may be made upon motion of any party at any time, even after judgment; but failure so to
amend does not affect the result of the trial of these issues ..."; Co Tiamco vs. Diaz, etc., et al., 75 Phil. 672,
679; J.M. Tuason & Co., Inc., etc. vs. Bolanos, 95 Phil. 106, 110.
36

37

Decision, Court of Appeals, Appendix A of petitioner's brief, pp. 147-148.

38

Decision of the Court of Appeals, Appendix A of petitioner's brief, pp. 147-151.

39

Words & Phrases, Perm. Ed., Vol. 5, p. 13, citing Warfield Natural Gas Co. vs. Allen, 59 S.W. (2d) 534, 538.

40

R.A., p.74; emphasis supplied.

41

Article 2180, Civil Code.

42

Philippine Refining Co. vs. Garcia, et al., L-21871 and L-21962, September 27, 1966.

43

See Section 4, Chapter 3, Title VIII, Civil Code.

44

4 R.C.L., pp. 1174-1175.

An air carrier is a common carrier; and air transportation is similar or analogous to land and water
transportation. Mendoza vs. Philippine Air Lines, Inc., 90 Phil. 836, 841-842.
45

46

Austro-American S.S. Co. vs. Thomas, 248 F. 231.

47

Id., p. 233.

48

Lipman vs. Atlantic Coast Line R. Co., 93 S.E. 714, 716.

49

Petitioner's brief, pp, 104-105.

49a

V Moran, Comments on the Rules of Court, 1963 ed., p. 76.

50

Section 36, Rule 130, Rules of Court.

51

IV Martin, Rules of Court in the Philippines, 1963 ed., p. 324.

52

Ibid.

53

Article 2232, Civil Code.

54

Article 2229, Civil Code.

55

Article 2208, (1) and (11), Civil Code.

56

Coleongco vs. Claparols, L-18616, March 31, 1964; Corpus vs. Cuaderno, et al., L-23721, March 31, 1965.

Cf. Yutuk vs. Manila Electric Company, L-13016, May 31, 1961; Lopez et al. vs. Pan American World
Airways, L-22415, March 30, 1966.
57

SECOND DIVISION

G.R. No. L-28773 June 30, 1975


FRANCISCO
ORTIGAS,
vs.
LUFTHANSA GERMAN AIRLINES, defendant-appellant-appellee.

JR., plaintiff-appellant-appellee,

Baizas, Alberto and Associates for appellant Lufthansa German Airlines.


Pelaez, Jalandoni and Jamir for appellant Francisco Ortigas, Jr.

BARREDO, J.:
Direct appeals of both parties plaintiff, Francisco Ortigas, and defendant Lufthansa German Airlines, from the
decision of the Court of First Instance of Manila, Branch X, "condemning the defendant to pay plaintiff the amount of
P100,000 as moral damages, P30,000 as exemplary or corrective damages, with interest on both sums at the legal
rate from the commencement of this suit until fully paid, P20,000 as attorney's fees and the costs" for the former's
failure to "comply with its obligation to give first class accommodation to (the latter) a (Filipino) passenger holding a
first class ticket," aggravated by the giving of the space instead to a Belgian and the improper conduct of its agents
in dealing with him during the occasion of such discriminatory violation of its contract of carriage.
Defendant buttresses its appeal on the following:
ASSIGNMENT OF ERRORS
I
THE LOWER COURT ACTED WITH GRAVE ABUSE OF DISCRETION IN DENYING THE
DEFENDANT'S URGENT MOTION FOR POSTPONEMENT DATED SEPTEMBER 24, 1966.
II
THE LOWER COURT CONSEQUENTLY ERRED IN ORDERING THE STRIKING FROM THE
RECORDS THE TESTIMONY OF WITNESS IVO LAZZARI AND IN DEEMING THE CASE
SUBMITTED FOR DECISION ON THE EVIDENCE OF THE PLAINTIFF ALONE.
III
THE LOWER COURT ERRED IN CONDEMNING DEFENDANT TO PAY THE PLAINTIFF THE
AMOUNT OF P100,000.00 AS MORAL DAMAGES, P30,000.00 AS EXEMPLARY OR
CORRECTIVE DAMAGES, WITH INTEREST ON BOTH SUMS AT THE LEGAL RATE FROM THE
COMMENCEMENT OF THIS SUIT UNTIL FULLY PAID, P20,000.00 AS ATTORNEY'S FEES, AND
COSTS. (Pp. 12-13, p. 118, Record.)
On the other hand, plaintiff's sole ground for his appeal is that "the trial court erred in ordering Lufthansa to pay
Ortigas only P100,000 as moral damages, P20,000 as exemplary or corrective damages, and P20,000 as attorney's

fees." (Plaintiff-Appellant's Brief, p. a.) Thus, apart from the contention of defendant that it has been denied its full
day in court, the only issue raised by both appellants relate to the amount of the damages awarded by the trial court,
plaintiff claiming it is less than he is entitled to and the defendant insisting on the opposite.
Lufthansa maintains it has not had its full day in court because the trial court abruptly ended the trial by denying its
last motion for postponement notwithstanding it was well founded and forthwith ordering the striking out of the
testimony of its absent witness whose cross-examination had not been finished and then declaring the case
submitted for decision. In this connection, the record reveals the following facts:
Plaintiff's complaint was filed with the court below on December 24, 1963 and after issues were joined, a pre-trial
was held, the parties submitted a partial stipulation of facts and thereafter went to trial, the last day of which was on
September 28, 1966. As to what happened in between, a detailed account is made in the brief of Ortigas as plaintiffappellee as follows:
... Thereafter the case was set for hearing twenty four (24) times, or on April 27, 1964, July 9, 1964, August 20,
1964, October 1, 1964, November 11, 1964, December 22, 1964, February 3, 1965, March 18, 1965, May 5, 1965,
June 11, 1965, July 22, 1965, August 26, 1965 and September 8, 1965, September 22, 1965, November 3, 1965,
November 24, 1965, December 17, 1965, December 29, 1965, January 14, 1966, February 2, 1966, April 19, 1966,
April 20, 1966, July 5, 6 and 7, 1966, August 25, 1966 and September 28, 1966.
One (1) hearing, or that of August 25, 1966, was cancelled because the trial judge, Hon. Jose L.
Moya, was then sick. Other postponements were as follows:
Postponements
plaintiff

at

instance

of

Three (3) settings were cancelled upon motion of plaintiff on grounds that defendant's counsel (Atty.
Crispin Baizas) himself must have found sufficient, for he gave his conformity thereto. These were
the hearings set for:
July 9, 1964 postponed upon plaintiff's motion, dated June 27, 1964, or 12 days before the
hearing, on the ground that he had to attend an important business matter in Mindanao, which was
so urgent that "for plaintiff to even make a flying trip to Manila for the scheduled hearing might
jeopardize and render to naught a project to which plaintiff has already expended considerable time,
money and effort" (RA pp. 28-29. Note: All reference herein will be to plaintiff's Record on Appeal).
August 26, 1965 postpone upon plaintiff's motion, dated August 23, 1965, for the reason that he
was in London for business reasons and could not return to the Philippines on time for the hearing.
This motion is not reproduced in any Record on Appeal but is admitted.
July 5-7, 1966 18 days before the dates set for the hearing, counsel for plaintiff filed a motion,
dated June 17, 1966, for Postponement on the ground that Atty. Rodegelio M. Jalandoni, who had
been personally handling this case was then in Washington, D.C. on business and would not be
back until the middle part of August, 1966. Considering that the trial of the case was far advanced, it
would be difficult for another lawyer to substitute for Atty. Jalandoni. Defendant's counsel agreed to
the motion (RA pp. 50-51).
Postponement
both parties

at

instance

of

Four (4) settings, or those of August 20, 1964, October 1, 1964, November 11, 1964 and December
22, 1964, were cancelled upon the joint motion of the parties on the ground that negotiations for the
possible settlement of this case were pending (RA pp. 31-34).
While both attorneys for plaintiff and defendant signed the joint motions for postponement, the
initiative to have the hearings cancelled actually came from defendant's counsel who claimed that he
needed time to consult with his client. Plaintiff welcomed the possibility of compromise and acceded
to join the requests for postponement but became impatient at and suspicious of the attempt to delay
so that in the motion to postpone the December 22, 1964 hearing, plaintiff insisted on the insertion of
the phrase "be postponed for the last time" (RA p. 34). These took place after the pre-trial but
before plaintiff had started presenting his evidence.
1wph1.t

Postponement
defendant

at

instance

of

Of the remaining 16 settings, at least TEN (10) were postponed or could not proceed except for a
few minutes because either Atty. Crispin Baizas, counsel for defendant, was not available or needed
time to prepare or had to attend a meeting somewhere else, or, as in the case of September 28,
1966, defendants witnesses wanted to avoid the inconvenience of coming to the Philippines. The
situation became such that on two (2) occasions the court a quo warned the defendant and/or its
counsel that it was postponing the trial "for the last time" and "definitely for the last time." Thus:
February 3, 1965 On this date, although plaintiff was ready to present his evidence and the Court
to hear the parties, Atty. Baizas asked for postponement for the reason that he had to be somewhere
else. The undersigned graciously obliged by not objecting, albeit the motion was made without
warning and in open court.
March 18, 1965 Once again the hearing scheduled for this date was postponed on motion of Atty.
Baizas in open court. The undersigned did not object because, as far as he can now recall, the
excuse given was that opposite counsel had another appointment.
June 11, 1965 The Court was free the whole morning of this day and plaintiff actually took the
witness stand. After plaintiff was through with his direct testimony, Atty. Zaida R. Alberto, who
appeared for the defendant, asked that the cross-examination be postponed for the next hearing, on
the ground that Atty. Baizas knew more of the defense. The following appears of record:
"ATTY. ALBERTO:
If Your Honor please, may I request to allow the cross examination at
the next hearing.
COURT:
You can handle the cross examination now.
ATTY. ALBERTO:
The defense are more in the knowledge of Atty.
Baizas.
COURT:

If you postpone the cross-examination we will forget the testimony


and will be spending much time referring to his testimony, so you
better cross-examine him while his testimony is still fresh.
ATTY. ALBERTO:
May I ask for a reconsideration, Your Honor, anyway it is past 11:00
o'clock I do not think there will be enough time.
COURT:
We still have one hour.
ATTY. ALBERTO:
I ask for a reconsideration, Your Honor.
COURT:
On motion of the defendant's counsel, the continuation of the trial is
postponed to July 22, 1965, at 8:30 a.m. The parties were notified in
open court of this new assignment." (t.s.n. pp. 43-44, June 11, 1965)
Notwithstanding there was an hour left, which was precious considering the crowded calendar of the
Court, and Judge Moya wanted to hear the cross-examination because plaintiff's testimony was
fresh, the Court pleased counsel for the defendant and postponed the hearing to July 22, 1965.
September 22, 1965 At this hearing the undersigned requested that Dr. Isidro Pertiera be
permitted to take the witness stand. He is a heart specialist and it was difficult to bring him to court
because of his many patients. His direct testimony did not take long, after which Atty. Baizas asked
for postponement, for the reason that he did not expect Dr. Pertiera to testify and, since the subject
of the testimony was important and technical, he needed time to be able to cross-examine. The
undersigned, understanding the predicament of Atty. Baizas, did not offer any objection.
November 3, 1965 This scheduled hearing was postponed upon motion dated October 7, 1965, of
Atty. Baizas on the ground that he was leaving on a business trip abroad. The undersigned again did
not object.
November 24, 1965 It will be recalled that the hearing of September 22, 1965, supra, was
postponed to enable Atty. Baizas to prepare for his cross-examination of Dr. Pertiera. On this date,
November 24, 1965, Atty. Baizas cross-examined briefly the doctor, but announced:
"ATTY. BAIZAS:
May I announce, your Honor, that after I cross-examine the Doctor I will ask for a
postponement of my cross examination of Atty. Ortigas because I will have to attend
a meeting of the PAL Board of Directors this morning. My cross examination will not
be very long." (t.s.n., pp. 34, November 24, 1965)

The PAL Board of Directors' meeting was certainly not more important than the occupation of the
Court, and it was still early, but counsel was insistent. The Court was beginning to be perturbed by
the dilatory motions; yet it granted counsel's requested postponement but "for the last time." Thus:
"ATTY. BAIZAS:
That is all. May I make that request, Your Honor, that it is simply that I
have to be present at the meeting. I wish to finish my cross
examination on Atty. Ortigas but it is merely that the meeting is held
for today at 10:00 o'clock and I would like to ask for a postponement
to continue the cross examination.
COURT:
I will grant this for the last time. On motion of Atty. Baizas, the
continuation of the hearing is postponed for the last time to
December 17, 1965, at 8:30 a.m., by agreement between him and
Atty. Jalandoni." (t.s.n., p. 17, November 24, 1965)
December 17, 1965 Although at the hearing of November 24, 1965 trial was postponed for the
last time to December 17, 1965, the Court's warning did not seem to register because on December
7, 1965 defendant's counsel filed another motion for postponement alleging that he had received a
telegram to the effect that the meeting of the Legal Committee of IATA that he was attending,
originally scheduled for December 10-15, had been deferred and would begin on December 13 and
as it was for 5 days, it would not be possible for him to return for the December 17 hearing; hence,
he requested that said hearing be reset for December 27 and 29. In his undated motion filed on
December 7,1965 counsel averred that:
"There is no intention whatever to delay the case but because of the circumstances
above-stated, undersigned counsel is constrained to ask, for the last time, for the
cancellation of the hearing on December 17 and for its resetting on such dates as
may be convenient to this Honorable Court, preferably December 27 and 29." (RA
p. 41)
The undersigned opposed said motion and alleged:
"That this case has been pending since December 24, 1963, or almost two years
now, and trial thereof has been repeatedly suspended and/or postponed;
That at the hearing of November 24, 1965, this Honorable Court precisely postponed
continuation of the trial thereof for the last time to December 17, a date which was
fixed by agreement of the parties;
That when counsel for defendant left, as alleged, on December 6, 1965 he did so
with full knowledge of the intransferable character of the trial set for December 17;
That defendant can well be represented by Atty. Baizas' associate, Atty. Alberto, who,
as a matter of fact, handled this case when trial started on June 11, 1965 and has
been actively collaborating with Atty. Baizas since then;

That when plaintiff testified on direct examination on June 11, 1965 said Atty. Alberto
appeared for defendant and that plaintiff is now merely due for further crossexamination." (RA p. 43)
In spite of said opposition, the Trial Court once more granted defendant's request but was more
categorical this time with its admonition against further postponements and used the word
"definitely" in its order which read:
"ORDER
For the reasons stated in the defendant's motion for postponement and in view of the
fact that it seeks a deferment of the hearing for only a few days, the continuation of
the trial is postponed definitely for the last time to December 29, 1965, at 8:30 a.m.
"SO ORDERED.
"Manila, Philippines, December 11, 1965.
JOSE
L.
MOYA
Judge"
(RA p. 46)
March 10, 1966 The hearing on this date lasted for only a few minutes, with the undersigned
offering the documentary evidence for the plaintiff. Thereupon, defendant's counsel again asked for
postponement so he could go over said evidence. Since he had no witnesses to present, the Court
once more postponed the trial to April 19, 1966 without any objection on the part of the undersigned.
April 19, 1966 The hearing for this day was cancelled upon motion of defendant's counsel (RA
p. 49) on his representation that defendant's witness Ivo Lazzari had arrived from Italy at midnight of
April 18, 1.966 and was not in a condition to take the witness stand. The Court again
accommodatingly transferred the hearing to the following day, April 20, 1966, although it had other
cases scheduled for that date and the case at bar was not among them, just so Lazzari's trip would
not be useless. The undersigned likewise did not oppose the transfer of hearing. (Pp. 2-13 Brief,
p. 132 Record.)
Defendant does not seriously deny these facts. Seemingly, the controversy between the parties revolves around
defendant's motion for postponement of the hearing set for September 28, 1966 which was denied by the trial court.
It is this denial that is the subject of the first above-quoted alleged errors assigned by Lufthansa in its brief as
defendant-appellant.
At the time this incident of postponement arose, plaintiff had already closed his evidence, and so it was the turn of
the defendant to prove its defenses. The starting date for this was April 19, 1966, but, upon motion of defendant's
counsel, it was deferred to the next day, April 20, 1966, on which date defendant's first witness, Ivo Lazzari, took the
witness stand. His testimony, however, was not finished in the morning and afternoon of that day nor during the
whole day of April 22, 1966. Atty. Rodegelio M. Jalandoni was still cross-examining him when the hearing was
continued "to the first available date in the calendar". Eventually, the next continuation of the trial was set at first for
July 5, 6 and 7, 1966, but upon motion of plaintiff's counsel, it was reset for August 25, 1966, on which date, in spite
of the presence of Lazzari who came from Rome purposely for the trial together with another expected witness,

Severino Caselli, and still another witness, C.H. Dehio, who came from Hongkong, no trial could be held because of
the absence of the judge. Hence, another date, September 28, 1966 was fixed with notice to the parties received by
them respectively the month previous.
On September 24, 1966, defendant's counsel filed a motion for postponement thus:
COMES NOW the defendant by undersigned counsel and to this Honorable Court respectfully
states:
1
The above-entitled case is set for hearing on September 28, 1966 at 8:30 o'clock in the morning.
2
The witnesses who are scheduled to testify for the defendant at said hearing are to come from
Rome, Italy;
3
Word has been received from the defendant that said witn will not be able to come for the hearing
aforementioned.
WHEREFORE, it is respectfully prayed that the hearing of this case scheduled for September 28 be
postponed to some other date most convenient to this Honorable Court, preferably on any of the
following dates: October 21, 17; Novembers, 3, 8, 9 or 11, 1966.
... . (Page 53, Record on Appeal, p. 29, Rec.)
On September 27, 1966, plaintiff's counsel filed the following opposition to the above motion:
COMES NOW plaintiff, through undersigned counsel and, in opposition to defendant's urgent motion
for postponement, dated September 24, 1966, to this Honorable Court respectfully states:
That this case has been pending since December, 1963;
That defendant's aforesaid motion does not give any valid reason for postponing the hearing, since it
does not state why defendant's witnesses cannot come to Manila on the scheduled dates of
continuation of trial;
That the convenience and motive of defendant and its witnesses in not exerting every effort to testify
are not the concern of the plaintiff, and more so of this Honorable Court, and that the speedy and
proper administration of justice dictates that the hearing proceed irrespective of defendant's obvious
disregard of the need thereofl;
That defendant's attitude is aggravated by the fact that, being an airline company, it has all facilities
to have its employees available as witnesses at any time it desires.
WHEREFORE, it is respectfully prayed that defendant's aforesaid motion for postponement be
denied.

... . (Pp. 55-56, id.)


In view of this opposition, on the same day, His Honor issued an order of denial:
No reason whatsoever having been alleged or shown why the defendant's witnesses will not be able
to come from Rome to Manila on the day of the hearing, and this case having been pending since
December, 1963, the motion for postponement is denied. (Pp. 56-57, id.)
On the day set for the hearing, September 28, 1966, Atty. Zaida Ruby S. Alberto appeared for defendant and
verbally moved for reconsideration of the foregoing order of denial. She argued that:
Actually, it is not intended to delay the termination of this case. As a matter of fact, on August 15,
1966, the date set for the hearing of this case, we were ready with the presentation of our evidence
as our two witnesses from Rome were here. But unfortunately, Your Honor was indisposed, so the
hearing was postponed to this date. I really do not know why our witness failed to come. However, I
intend to make an inquiry about the matter so that I could file the corresponding explanation for their
failure to appear in Court today. May I, therefore, reiterate my motion for reconsideration, with the
reservation that I be allowed to file my explanation for the failure of these two witnesses coming from
Rome to appear for today's hearing. (Page 2, t.s.n., Sept. 28/66.)
But as counsel could not give the exact reason why defendant's witness scheduled to testify were absent, the trial
court denied the motion; ruling that "no ground has been alleged in support thereof." (p. 6, t.s.n., September 28,
1966.)
This order was immediately followed by a motion of plaintiff's counsel for the striking out of the entire testimony of
the witness, Ivo Lazzari, upon the ground that counsel had not yet finished his cross-examination of him and his
absence was unexplained. No objection appears to have been made to such motion, albeit counsel for defendant
tried to point out that Atty. Jalandoni had already finished his cross-examination of the witness. After verifying from
the records that such was not the case, His Honor issued the following order:
The witness Ivo Lazzari not having appeared at the hearing set for today, for which reason his crossexamination cannot be continued, on motion of the plaintiff's counsel, his testimony is striken from
the record, and this case is deemed submitted for decision on the evidence already presented. (Pp.
57-58, Rec. on Ap., id.)
Thus the trial ended and parties were allowed to submit their respective memoranda.
On October 19, 1966, however, defendant's counsel filed the following motion for reconsideration:
MOTION FOR RECONSIDERATION .
COMES NOW defendant by undersigned counsel this Honorable Court moving for a reconsideration
of the orders dated September 27 and September 28, 1966, respectively, respectfully states:
1
On September 26, 1966 a motion for postponement of the hearing on September 28, 1966 was filed
by undersigned counsel for the reason that word had just been received from the defendant that the
witnesses who were scheduled to testify at the said hearing and who were to come from Rome, Italy,
would not be able to come to the Philippines for said hearing. This motion was denied in the order of
September 27, 1966;

2
No reason could be stated in the aforesaid motion for postponement because at the time it was
prepared, counsel for defendant did not really know the specific reasons for the inability of said
witnesses to come. A simple telex message had been sent by the Far East Manager of the
defendant company to defendant's representatives in Manila advising the latter that the witnesses in
question could not come. Copy of said telex message is attached to and made part of this motion for
reconsideration as Annex "I";
3
For this reason on September 28, 1966, when the case was called, counsel for the defendant
reiterated the motion for postponement and requested this Honorable Court for time to submit an
explanation on the failure of defendant's witnesses to come as a letter elaborating on the matter
would surely follow the telex' message. This request was however denied by the Honorable Court
and upon motion of plaintiff's counsel, another order was issued striking out from the record the
testimony of defendant's only witness so far, Ivo Lazzari, whose cross-examination was to be
continued that date, for the latter's failure to appear at the hearing, and deeming the case submitted
for decision;
4
It is alleged by opposing counsel that the witnesses did not come for the hearing of September 28,
1966 because it was inconvenient for them and for defendant. This accusation is absolutely without
basis and malicious;
5
If inconvenience were the only reason for the witnesses' failure to come, then they would not also
have come previously because it was just as inconvenient for them then. It will be recalled that Ivo
Lazzari had been here in April 1966 when he was presented on direct examination and partly on
cross-examination. On August 25, 1966, the case was also scheduled for hearing. All of defendant's
witnesses came here from Rome, Italy for said hearing. Even Mr. C. H. Dehio was also here to
testify. Unfortunately, the Presiding (Judge) of this Honorable Court was indisposed on that particular
morning and so the hearing on said date was cancelled. We mention this only to show that the
failure of the witnesses to come for the hearing on September 28 was not caused by mere
inconvenience;
6
Defendant had and had no intention to delay the proceedings whatsoever. The witnesses in question
could not come because of certain circumstances that rendered their coming over virtually
impossible. Both witnesses, Ivo Lazzari and Saverino Casilli are employees of defendant company
at the Rome office. The air traffic in Rome has been particularly heavy this season. Some of the
personnel of the Lufthansa Rome office were on leave and these two employees had to assume
some of the duties of those employees who were on leave, aside from performing their own regular
duties, If they were to leave their posts to come for the hearing on September 28, there would be
grave disruption to the public service and for this reason they were not able to come. These facts are
contained in a letter dated September 29, 1966 written to undersigned counsel by C. H. Dehio, IATA
Agency Manager, Far East and Australasia, Lufthansa German Air Lines, copy of which is attached

to and made part of this motion for reconsideration as Annex "2";. The envelope in which said letter
contained is likewise attached to and made part of this motion as Annex "2-A";
7
Witness Ivo Lazzari had first shed his testimony on direct examination and on September 28, 1966,
opposing counsel was to continue cross-examination of said witness. The other witness Saverino
Casilli was to be presented after Ivo Lazzari would have finished testifying. Both witnesses are
material for the defense and no other person could testify on the facts that are the subject of their
testimony. The inability of said witnesses to come for the hearing on September 28 was not due to
any fault or neglect on the part of defendant who in fact had exerted every effort to have them come,
but because of the supervening circumstances above-described, their coming over could not have
been possible without seriously disrupting public service;
8
There is no question that the granting or denial of a motion for postponement rests upon the sound
discretion of the court. We submit however that under the circumstances, the ends of justice would
have been better served by granting the motion on question. The reason for defendant's motion for
postponement is valid and meritorious, and the grant of a postponement based on such ground
would not have adversely affected the substantial rights of plaintiffs.
"Continuances and postponements of trial are part and parcel of our judicial system
of justice, and where no substantial rights are affected and the intention to delay is
not manifest, it is sound judicial discretion to allow them. (Rexwell vs. Canlas, No. L16746, Dec. 30, 1961)
"There is even authority for the view that the right to a speedy trial is not violated by
granting a continuance on the ground of absence of material witness. (People vs.
Romero, G.R. No. L-4517-20, May 25, 1953)
The lower court erred in denying a motion for postponement filed by defense to await
arrival of a material witness." (People vs. Narsolis, et al. G.R. No. L-2764, March 24,
1950)
"A miscarriage of justice may result from the accidental or excusable absence of a
material witness, where presence can be secured by the grant of a reasonable
continuance." (Luna vs. Arcenas, 34 Phil. 80, 98-99)
8
Defendant has a valid and meritorious defense, and if given opportunity to present its side of the
case, it would certainly diminish, if not altogether disprove plaintiffs claim.
... court litigations are primarily for the search of truth. ... A trial by which both parties
are given the chance to adduce truth is the best way to find out such truth. A denial
of this chance would be too technical. The dispensation of justice and the vindication
of grievances should not be barred by technicalities." (Ronquillo vs. Marasigan, L11621, May 21, 1962; Santiago vs. Joaquin, L-15237, May 31, 1963, emphasis ours.)

"Judicial experience dictates that it is better that cases are tried on the merits even
with a little delay than that substantial rights of a party litigant be sacrificed on the
altar of technicality." (Uy vs. Demetillo, CA-G.R. No. 32665-R, Jan. 14, 1964.)
9
An affidavit of merit by Clarita C. de la Riva, Manager, Rocha & Cua., Inc., General Sales Agents,
Lufthansa German Airlines is likewise attached to and made an integral part of this motion for
reconsideration as Annex "3";
10
The order dated September 27, denying defendant's motion for postponement and the order of
September 28, 1966 striking off from the records the testimony on direct examination of the witness
Ivo Lazzari and holding the case submitted for decision on the evidence presented would unduly
prejudice defendant's stand, and would amount to a denial of due process to defendant.
"The paramount interests of justice demand such reasonable allowances as would
prevent, without doing an injustice to the opposing party, the loss by a litigant of his
chance to duly present his side of the case before the court. With a view of avoiding
a possible miscarriage of justice, the exercise of the court's discretion ought to lean,
in a reasonable degree toward bringing about a presentation of evidence on both
sides. ..." (Gerona vs. Calada, CA-G.R. No. 23955-R March 30, 1963, Tormes vs.
Balzado, CA-G.R. No. 32019-R, April 17, 1964.)
WHEREFORE, it is respectfully prayed that the orders of the Honorable Court dated September 27,
and September 28, 1966, respectively, be reconsidered and set aside; that the testimony of
defendant's witness Ivo Lazzari be allowed to remain on record and that a date be set for the
continuation of defendant's evidence.
Manila, Philippines, October 19, 1966.
CRISPIN D. BAIZAS &
ASSOCIATES
By: s/t/ Crispin D.
Baizas
Counsel
for
the
defendant
Suite 305 Shurdut
Building
Intramuros, Manila
VERIFICATION
I, CRISPIN D. BAIZAS, after having been sworn according to law, depose and say:
I am the counsel for the defendant in the above-entitled case;
I have prepared the foregoing motion for reconsideration and all the allegations contained therein
are true and correct of my own knowledge and to the best of my information and belief.

s/t/ CRISPIN D. BAIZAS


SUBSCRIBED AND SWORN TO BEFORE ME this 19th day of October. 1966 in the City of Manila,
affiant exhibiting to me his Res. Cert. No. A- 5892423 issued on January 28, 1966 at Makati, Rizal.
s/
(Illigible)
NOTARY
PUBLIC
Until December 31,
1967
Doc.
Page
Book
Series of 1966.

No.
No.
No.

1377
77
III

(Pages 58-67, Record on Appeal, id.)


to which, plaintiff's counsel filed the following opposition:
COMES NOW plaintiff, through undersigned counsel, and, in opposition to defendant's motion for
reconsideration, dated October 19, 1966, to this Honorable Court respectfully states that:
1. This is in effect the second motion for reconsideration that defendant has filed against the order of
September 27, 1966 denying its motion for postponement of the hearing of September 28. The first
motion for reconsideration was made in open court by Atty. Zaida S. Alberto and denied on the same
date.
2. Defendant now claims that it did not intend to delay the trial of this case and seeks to justify the
failure of its witnesses, Ivo Lazzari and Saverino Casilli, to appear on September 28 on the ground
that:
"... The air traffic in Rome has been particularly heavy this season. Some of the personnel of the
Lufthansa Rome office were on leave and these two employees had to assume some of the duties of
these employees who were on leave, aside from performing their own regular duties. If they were to
leave their posts to come for the hearing on September 28, there would be grave disruption to the
public service and for this reason they were not able to come. ..." (p. 3, Defendant's Motion for
Reconsideration.)
3. Note that the above alleged facts are contained in a mere letter that was written by a certain Mr.
C.H. Dehio, an employee of defendant in Hongkong, to its counsel on September 29, 1966, or one
day after the hearing of September 28, when presumably defendant's aforesaid employee had
already been informed that this Honorable Court had denied the postponement and considered this
case as submitted for decision. Defendant is an airline company and has all the telex facilities to
communicate in a matter of minutes with its various agencies. The ground for failure to appear, to
wit, supposed pressure of work of said employees, is as easy to conceive and gratuitously state as
to flick one's fingers. We wish to call attention to the significant fact that the statement of Mr. Dehio in
his letter is not under oath. Incorporating said statement in the body of the motion for reconsideration
that is sworn to by counsel merely `to the best of his information and belief, or in an affidavit of Mrs.
Clarita C. de la Riva (Annex 3) who was only referring to hearsay information derived from Mr.
Dehio's aforesaid letter, is insufficient verification of the motion for reconsideration under Section 6,
Rule 7 of the Rules of Court. Even Mr. Dehio had he executed the affidavit himself, would have been

disqualified to swear to the facts because he is stationed in Hongkong. So that, when defendant's
counsel and Mrs. de la Riva verified the motion on "information and belief" derived from Mr. Dehio's
letter, their statements were hearsay thrice removed.
4. But assuming said facts to be true, did this justify the failure of defendant's witnesses to appear at
the scheduled hearing or constitute a valid excuse for defendant's inability to present evidence. We
respectfully submit that they do not. The September 28 hearing was set as early as August 25, 1966,
or more than one (1) month previous, to suit the schedules not only of this Honorable Court but of
the parties as well. Surely, it was incumbent on defendant, if it has deference to this Honorable Court
and our administration of justice to see to it that its witnesses, particularly Ivo Lazzari who was on
the witness stand and due for cross-examination, would be available, rather than granting leave to
its other employees and burdening the two needed witnesses with additional work. Defendant is not
a neophyte in the airline business. Assuming arguendo that it is true that the volume of air traffic in
Europe was high in "September and early October", it should have foreseen the situation and taken
appropriate measures to assure compliance with its obligation to this Honorable Court. The
witnesses are defendant's employees and subject to its exclusive control. Instead, defendant
allegedly rendered itself short handed by granting leave to its other employees, and now comes to
court with a lame excuse requesting that it be extricated from a predicament that it has deliberatedly
brought upon itself. For the execuse that with the workload for Mr. Lazzari and Mr. Casilli becoming
heavier than usual "it would seriously disrupt our service to the travelling public if, during this time,
they were to leave their jobs for several days" (Please see Mr. Dehio's letter, Annex "2") is lame, by
any standard. The local newspapers are constantly carrying news articles of how large and
expanded is the Lufthansa as an airline outfit. Surely, of its hundred (if not thousands) of available
employees, two like Lazzari and Casilli could have been dispensed from their work temporarily to
defend the company against the just grievance asserted by an injured passenger before a court of
justice. At the most, defendant was after the promotion of its own interest in holding the two
employees to their jobs, and is not avoiding "grave disruption to the public service" as counsel
exaggerates Mr. Dehio's expression "seriously disrupt our service to the travelling public" two distinct
ideas, the latter signifying self-interest as distinguished from public necessity. This Honorable Court
can take judicial notice that there are many other airlines-operating in the same areas as doe,
Lufthansa and competing with it.
5. As we explained at the September 28 hearing, the truth of the matter is that, contrary to the
unverified representations of defendant, the reason for the non-attendance of defendant's witnesses
was to avoid the inconvenience of coming to the Philippines to testify. In other words, after Ivo
Lazzari and Saverino Casilli were unable to testify last August 25, 1966, defendant thought of
avoiding having said witnesses come again to Manila. We say this because sometime on September
20, 1966, Atty. Leonardo P. Valmonte (an assistant attorney of plaintiff who is helping in this case)
had a telephone conversation with defendant's counsel, Atty. Zaida S. Alberto in connection with the
former's request for a copy of a certain exhibit, and in the course of their conversation Atty. Alberto
informed Atty. Valmonte that the trial scheduled for September 28, 1966 would not proceed because
they were intending "to secure the permission of the court to take the testimonies of their witnesses
by way of deposition". In short, even before the receipt of the alleged telex (Annex "1" of Motion) by
defendant's counsel on September 22, 1966, said counsel announcing that the trial could not
proceed because they were going to resort to depositions of their witnesses in Rome, rather than
have said witnesses come to Manila. The decision to take depositions having been made on or
before September 20, it was an easy matter to have Lufthansa's Hongkong office send the telex of
September 22 stating that they would be unable to provide witnesses on September 28. No reason
was given why witnesses could not be provided 6 or 7 days thence. If in truth there was unexpected
increase in air traffic, surely 6 or 7 days were more than sufficient to make the necessary
arrangements so that the work of Lazzari and Casilli could be taken over temporarily just so these

witnesses could appear before this Honorable Court at the appointed date. Attached hereto as
Annex "A" is the affidavit of Atty. Leonardo P. Valmonte on his aforesaid conversation with Atty.
Alberto.
6. At the hearing on September 28, when we made reference to the above-referred to conversation
between Attys. Valmonte and Alberto, the latter did not deny that she had in truth spoken to Atty.
Valmonte in the tenor above related. As a matter of fact, she admitted that defendant was intending
to take the depositions of its witnesses in Rome.
7. When this honorable Court denied the motion for postponement on September 28, 1966, it did so
in the exercise of its sound judicial discretion, for no valid reason was given why the witnesses could
not appear, whereas this case had been pending for about three (3) years and had been postponed
several times with repeated warnings on defendant that said postponements were for the last time.
And now, in its motion for reconsideration, defendant has failed to effectively allege the ground for
the failure of said witnesses to come, and even if said ground be admitted as true for argument's
sake, it merely showed "inofficiousness, lack of resourcefulness and diligence, if not total
indifference" on the part of defendant to protect in court its interests and to prevent needless delays
in the discharge of judicial business.
"Postponement not based on valid reasons. Where a party seeks postponement of the hearing of
this case for reasons caused by his own inofficiousness, lack of resourcefulness and diligence if not
total indifference to his own interests or to the interests of those he represents, thereby resulting in
his failure to present his own evidence, the court would not extend to him its mantle of protection. If it
was he who created the situation that brought about the resulting adverse consequences, he cannot
plead for his day in court nor claim that he was so denied of it." (De Leon vs. People's Homesite and
Housing Corporation, CA-G.R. No. 31169-R, Aug. 31,1963.)
8. In the case of Hap Hong Hardware Co. vs. Philippine Company, GR. No. L-16773 (May 23, 1961),
the Supreme Court, in sustaining the trial court's denial of a motion for postponement and on the
ground that the defendant's witnesses, officers of the company, had not come because it was the
beginning of the milling season in the municipality of San Jose, Mindoro Occidental and their
presence in the Central was very, necessary, held that the trial court was perfectly justified in
denying said motion for postponement because the reason adduced was "not unavoidable and one
that could not have been foreseen." Said the Supreme Court:
"The reason adduced in support of the motion for postponement is not unavoidable
and one that could not have been foreseen. Defendant ought to have known long
before the date of trial that the milling season would start when the trial of the case
would be held. The motion should have been presented long in advance of the
hearing, so that the court could have taken steps to postpone the trial without
inconvenience to the adverse party. As it is, however, the motion was presented on
the day of the trial. Knowing as it should have known that postponements lie in the
court's discretion and there being no apparent reason why the defendant could not
have presented the motion earlier, thus avoiding inconvenience to the adverse party,
the appellant cannot claim that the trial court erred in denying postponement. Under
all the circumstances we hold that the Court was perfectly justified in denying the
motion for postponement."
In the case at bar, the same unjustified excuse is adduced that the witnesses, who are employees
(not even officers) of defendant, had work to do, albeit date of trial was set one month previous.

9. The cases cited by defendant are not in point, the facts involved therein being very different from
those attending the case at bar. For example, in the cited case of Lino Luna vs. Arcenas, 34 Phil. 93,
the trial judge declined to grant a continuance of a few hours to give counsel an opportunity to
secure the presence of the defendant. The Supreme Court held that considering that it did not
appear that defendant was indulging in dilatory tactics, the denial of the motion for short
Postponement was improper. Again, in the case of People vs. Romero, G.R. No. L-4517, May 25,
1953, the prosecution witnesses, although subpoenaed, failed to appear; whereupon the fiscal
asked that they be ordered arrested and that in the meantime the trial be postponed. The Supreme
Court likewise held that the denial of the postponement was improper. These fact situations,
however, as can immediately be seen are completely different from that of Lufthansa whose nonpresentation of its employees-witnesses was motivated by the desire to avoid inconvenience to
them, hence its frustrated plan to have their depositions taken in Rome.
10. Complaints regarding delays in the disposition of court cases are prevalent and have recently
found expression not only in executive pronouncements but in judicial admonitions. The unclogging
of court dockets remains a pressing problem to the despair of litigants. As the Court of Appeals put it:
"The records reveals that the trial of the case was postponed five times at the
instance of appellants themselves, and for this reason the trial was delayed for more
than one year and three months. In granting these several postponements, the trial
judge was over liberal already, and to have allowed another postponement would
have been to jeopardize plaintiff's interest. Obviously courts cannot unduly protect
the interests of one party to the detriment of the other. Already, there are complaints
regarding delays in the disposition of court cases. The unclogging of our court
dockets still remains a pressing problem in the despair of many a litigant. However to
eliminate, at least minimize, these delays is as much our concern and any act of trial
courts conducive towards this purposeful end will be encouraged by appellate
court's." (Rosario vs. De Leon, CA-G.R. No. 6495-R, April 25, 1941; 40 O.G. 752.)
11. Prejudice will be occasioned plaintiff if defendant's belated motion for reconsideration is granted.
Notwithstanding defendant's counsel's receipt of Mr. Dehio's letter, dated September 25, 1966, a few
days after said date, defendant delayed the filing of its motion for reconsideration until after about
three (3) weeks later. In the meantime, it knew as of September 28 that this Honorable Court had
striken out the testimony of Ivo Lazzari, considered the case submitted for decision on the evidence
on record, and given plaintiff's counsel 7 days to present his memorandum. Plaintiff and his counsel
exerted all efforts and worked overtime just so to be able to submit his memorandum within the short
period allowed. Said memorandum was finished on time, and has been served on defendant's
counsel and submitted to Court. In other words, defendant purposely waited until the submission of
plaintiffs memorandum before presenting its motion for reconsideration based on alleged information
received three (3) weeks previous. To grant defendant's instant motion for reconsideration would
place plaintiff at a great disadvantage, because defendant is now fully aware of every facet of
plaintiff's cause and can simply tailor its defenses and evidence in refutation thereof.
12. Defendant claims that plaintiff is taking undue advantage of a technicality and it should not be
deprived of its day in court on this ground. Suffice it to state that it is never technical to invoke one's
rights, and that while the Rules of Court should be liberally construed, their strict observance has
been considered indispensable to the prevention of needless delays and the orderly and speedy
discharge of judicial business. Thus:
"Although the Rules of Court should be liberally construed, however their strict
observance which have been considered indispensable to the prevention of needless

delays and to the orderly and speedy discharge of judicial business, is as imperative
necessity. Thus, the rules prescribing the time within which certain act must be done,
or certain proceedings taken, are considered absolutely indispensable to the
prevention of needless delays and to the orderly and speedy discharge of judicial
business, is as imperative necessity. Thus, the rules prescribing the time within which
certain act must be done, or certain proceedings taken, are considered absolutely
indispensable to the prevention of needless delays and to the orderly and speedy
discharge of judicial business and therefore must be strictly complied with." (Alvero
vs. De la Rosa, 76 Phil. 428, cited in Francisco on Civil Procedure, Vol. 1, P. 89)
"Rules of Courts, promulgated by authority of law, have the force and effect of law;
and rules of court prescribing the time within which certain acts must be done, or
certain proceedings taken are considered absolutely indispensable to the prevention
of needless delays and to the orderly and speedy discharge of judicial
business. "Conlu vs. Court of Appeals, et al., G.R. No. L-14027, January 29, 1960,
citing Shioji vs. Harvey, 43 Phil. 333; Alvero vs. De la Rosa, et al., 42 Off. Gaz., p.
316, (Supra.)
WHEREFORE, it is respectfully prayed that defendant's motion for reconsideration, dated October
19, 1966, be denied.
Manila, October 31, 1966. (Pages 74-88, Record on Appeal, id.)
By way of reply to the above opposition, defendant's counsel alleged:
Defendant could have from the beginning taken depositions in Rome, but so as to avoid any
inconvenience to plaintiff and that the court may see and hear the witnesses testify to better
determine the credibility of their testimony defendant had been bringing the witnesses here. As a
matter of fact, defendant even without leave of court may take the depositions of its witness by
merely giving the Court notice of its intention to do so.
"After answer has been filed no leave at court is required as a prerequisite to taking
depositions ... (Marzo vs. Moore McCormick Line, Inc. 8 Feb. Rules of Service, p.
560; cited in Moran Comments on Rules of Court Vol. II, p. 18)
"After issue is joined, depositions may be taken without leave of court. (Lyons vs.
Bronx Towing Line, Inc., 1 Fed. Service p. 341)
"After answer is served, depositions may be taken as of course and application
should not be made to the court for leave. (Schultz vs. State Mutual Life Assurance
Company, 1 Fed. Rules of Service, p. 340, US Dist. Ct. Dist. of Oregon, Oct. 14,
1938)
"The statements made by Atty. Valmonte are false and malicious. An affidavit executed by Atty. Zaida
Ruby Alberto is attached to and made part of this Reply as Annex "1". (Pages 92-93, Record on
Appeal, id.)
On October 24, 1966, the trial court resolved the incident in a brief order holding that "(f)or the reasons stated in the
plaintiff's opposition to the motion for reconsideration, it is denied."

In its appeal, defendant reiterates insistently its position that the denial of its motion for postponement as well as the
order striking out the testimony of Ivo Lazzari were issued in grave abuse of discretion and should be set aside.
Before going any further, however, it may be mentioned that since defendant has not assigned as error, although it
discusses in its brief, the denial of its last motion for reconsideration, plaintiff contends that such failure constitutes a
bar to any further consideration of the merits of the arguments of defendant relative to the main denial-ofpostponement and striking-out orders. To be sure, there is technical plausibility in such pose of plaintiff, but
considering the importance of the other matters involved in this case, it would serve the interests of justice more if
We passed on the merits of the substantial issues in this controversy. After all, "this Court is clothed with ample
authority to review matters, even if they are not assigned as errors in the appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case." (Saura Import & Export Co., Inc. vs. Philippine International
Surety Co., Inc., L-15184, May 31, 1963, 8 SCRA 143.) And considering the inter-relation between the omitted
assignment of error and those actually assigned and discussed by defendant's counsel, We can apply here the
ruling in Hernandez vs. Andal, 78 Phil. 196, to the effect that "an unassigned error closely related to an error
properly assigned or upon which the determination of the question raised by the error properly assigned is
dependent, will be considered by the appellate court notwithstanding the failure to assign it as an error." (at pp. 209210.)
Now, with respect to defendant's first assignment of error, We feel that the rather extended recital We have made
above of the incidents and proceedings related to the trial court's order denying defendant's motion for
postponement of the hearing set for September 28, 1966 is self-revealing. It argues against the charge that His
Honor's order of denial was improper and unjustified.
The case had been pending for about three years and had actually suffered during that period even more than the
usually permissible number of continuances, quite often to suit the convenience of defendant's counsel. Notice of
the September 28, 1966 schedule had been served on counsel the month previous. It must be assumed that due
preparations and arrangements were to be made since the receipt of that notice to insure the presence in Manila for
the expected witnesses on the date set. Under the circumstances, the excuse given by defendant that the witnesses
could not leave their respective stations and places of work to attend the trial is plainly unacceptable. There was
enough time and opportunity for defendant to have made the corresponding adjustments in the assignments of its
personnel so as to enable its witnesses to be in court. The trouble is that defendant relied on the assumption that
the court could be made to wait until the volume and other conditions of its business would permit it to comply with
the schedule of the court. For an airline company engaged in international transportation and presumably having all
the facilities to have any of its employees available practically anywhere in the world at a moment's notice, if it only
took due care to do this, defendant's attitude cannot be countenanced.
What is more, the motion of September 24, 1966 gave no reason at all why defendant's witnesses supposed to
come from Rome would be unable to be at the trial. Even as late as the day of the hearing, September 28, 1966, the
court could not be told the reason for such inability. All that counsel could say was that she "intend(ed) to inquire and
file the explanation" later. This was not as it should have been, for the telex advising the Manila office that the
witnesses would not be available was received on September 22nd yet, and certainly there was enough time to
investigate and find out the reason for such unavailability. And as no justifiable reason could be advanced in support
of the verbal motion for reconsideration. We cannot say that His Honor acted improperly when he denied the same.
We reiterate, the case had been pending for more than three years, with so many postponements, and the least that
defendant should have done to merit favorable action on the part of the trial judge was to be ready with an
explanation of its inability to proceed with the trial, giving the detailed and good reasons therefor. As it is, there was
actually no basis at all for the exercise of discretion on the part of the trial judge in a manner favorable to it. Trials
may be postponed because of the absence of evidence only when such absence is justified. Mere absence is not a
justification in itself. Section 4 of Rule 22 is sufficiently clear on this point. It provides that "A motion to postpone a
trial on the ground of absence of evidence can be granted only upon affidavit showing the materiality of evidence
expected to be obtained, and that due diligence has been used to procure it." This means that it must be shown to

the court that due diligence had been exercised in either securing the presence of the evidence (witnesses) or
preventing the absence thereof.
There is, of course, defendant's motion for reconsideration of October 19, 1966 praying for the setting aside of the
court's order of denial as well as the other order striking out the testimony of witness Lazzari. But, as already noted,
the only excuse given in said motion is that:
... The witnesses in question could not come because of certain circumstances that rendered their
coming over virtually impossible. Both witnesses, Ivo Lazzari and Saverino Casilli are employees of
defendant company at the Rome office. The air traffic in Rome has been particularly heavy this
season. Some of the personnel of the Lufthansa Rome office were on leave and these two
employees had to assume some of the duties of those employees who were on leave aside from
performing their own regular duties. If they were to leave their posts to come for the hearing on
September 28, there would be grave disruption to the public service and for this reason they were
not able to come. ... (Page 47, Rec. on Ap., p. 32, Record.)
Indeed, even if such reason were given earlier on September 24, 1966 the court would have been as well justified in
denying the requested postponement. We cannot see any reason why, despite its having knowledge of the date of
the hearing about a month before, defendant did not see to it that its expected witnesses were not assigned to do
duty on the day they were supposed to appear in court. We cannot believe Lufthansa could be so undermanned that
such a simple adjustment of its personnel had to be "impossible."
Moreover, the Rome based witnesses were not the only possible witnesses of defendant. To begin with, Mr. C.H.
Dehio, the IATA Agency Manager, Far East and Australasia, Lufthansa German Air Lines, who, according to the
record, had already attended previous hearings as a prospective witness could have been made to go to court.
There is nothing in the record to show that he was also rendered incapable of doing so. Then there could still be
local witnesses, it is no excuse that presenting other witnesses would have disrupted the presentation of
defendant's case, for parties may be allowed to maintain their own way of presenting their evidence only where this
can be done without injury to the expeditious disposition of the case and the best interests of the administration of
justice.
Coming now to the second assigned error regarding the striking out of the unfinished testimony of Lazarri, the Court
is also of the opinion and so holds that the trial court's action cannot be categorized as arbitrary or oppressive or as
amounting to a grave abuse of discretion. To be sure, this second order was but a logical consequence of the
previous order denying defendant's motion for postponement. With such denial, the next thing in order was to
declare the presentation of evidence of the defendant terminated. Accordingly, it was necessary to determine what
evidence could be considered to be for the defendant. And so when counsel for plaintiff asked the court to strike out
the testimony so far given by Lazarri, there was practically no alternative for the court but to grant the same. Indeed,
defendant's counsel could not and did not offer any objection thereto.
Oral testimony may be taken into account only when it is complete, that is, if the witness has been wholly crossexamined by the adverse party or the right to cross-examine is lost wholly or in part thru the fault of such adverse
party. But when cross-examination is not and cannot be done or completed due to causes attributable to the party
offering the witness, the uncompleted testimony is thereby rendered incompetent.
The right of a party to cross-examine the witnesses of his adversary is invaluable as it is inviolable in civil cases, no
less than the right of the accused in criminal cases. The express recognition of such right of the accused in the
Constitution does not render the right thereto of parties in civil cases less constitutionally based, for it is an
indispensable part of the due process guaranteed by the fundamental law. Subject to appropriate supervision by the
judge in order to avoid unnecessary delays on account of its being unduly protracted and to needed injunctions
protective of the right of the witness against self-incrimination and oppressive and unwarranted harrassment and

embarrassment, a party is absolutely entitled to a full cross-examination as prescribed in Section 8 of Rule 132 thus:
"Upon the termination of the direct examination, the witness may be cross-examined by the adverse party as to any
matters stated in the direct examination, or connected therewith, with sufficient fullness and freedom to test his
accuracy and truthfulness and freedom from interest or bias, or the reverse, and to elicit all important facts bearing
upon the issue." Until such cross-examination has been finished, the testimony of the witness cannot be considered
as complete and may not, therefore, be allowed to form part of the evidence to be considered by the court in
deciding the case.
In the case at bar, however, We have opted not to rely exclusively on the foregoing considerations. In order to
satisfy Ourselves as to whether or not defendant stands to be irreparably prejudiced by the impugned action of the
trial court relative to the testimony of Lazzari, We have just the same gone over the transcript thereof. After
considering the same, however, We are of the impression that even his direct testimony, without taking into account
anymore his answers to the cross-examination questions of counsel for plaintiff, cannot be of much weight in
establishing the defenses in defendant's answer. But it would seem more appropriate to elaborate on this point
when We come to the discussion of the mutual accusation of the parties that the trial court erred in the portion of its
discretion awarding damages to plaintiff.
The last issue submitted for Our resolution relates to the award of damages made by the trial court in favor of
Ortigas against Lufthansa in the amounts aforestated, as to which, as already noted at the outset, both parties have
appealed taking opposite positions. In this respect, the appealed decision made the following findings and
discussion of the material facts:
In October, 1963, the Sharp Travel Service, the travel department of C. F. Sharp, Inc., the majority
interest-in-which is held by Rocha y Cia., Inc., General Agents of the defendant, Lufthansa German
Airlines issued to the plaintiff First Class Pan American Ticket No. 026492147076 to 81 which would
take him from Manila, the place of departure, to Hongkong, various cities in the United States,
Europe, Asia, the Far East, and then back to Manila, the place of destination. Ortigas' ticket for all
these different legs of his journey was first class.
He left Manila October 12, 1963, as scheduled. In New York, he decided to leave out some cities,
included in his original itinerary, to be in Hongkong on the 19th day of November, 1963, for several
appointments he had there. He went to the Trans World Airlines and had his Pan American ticket
changed with First Class TWA Ticket No. 115-460-451- 878 to 881. His TWA ticket was also first
class for the entire trip from New York to several European cities, including Rome, and thence to the
Far East, with Manila also as the place of destination.
Ortigas arrived in due course in Rome. To be sure he could fly first class to Hongkong on November
18, 1963, for his appointments there the next day, Ortigas repaired to the office of the Alitalia on
Saturday, November 16, 1963, to book passage. The man at the counter of the Alitalia office told him
it had no flight on Monday but the Lufthansa had. The man thereupon called up the office of the
Lufthansa and, after talking to an employee thereof, told Ortigas that the Lufthansa had no first
class, but only economy, seats available on its Monday flight.
Ortigas answered that he was not willing to take an economy seat and requested the employee to
call up other airlines. Then the phone rang. The employee answered and afterwards informed
Ortigas that the Lufthansa had a first class seat available for its Monday flight. Ortigas immediately
asked him to get the seat and to see to it that his ticket be confirmed and validated for the flight and
a first class seat. The man thereafter asked for Ortigas' passport and other travel papers and
attached a validating sticker (Exhibit "D-1") on flight coupon No. 4 (Exhibit "B") which corresponded
to the Rome-Hongkong leg of his TWA Ticket No. 115-460-461-878 The sticker recites:

Flight Res.
Carrier No. Date Time Status
LH 646 18 Nov. 12:35 P.M. O.K.
Wishing to be doubly sure, Ortigas again requested the Alitalia employee to call back the Lufthansa
office to recheck whether his ticket was really confirmed and validated. The man did so, after which
he told Ortigas that his ticket had been checked, validated, and confirmed as shown by the word
"O.K." on the sticker. The same employee later wrote on the cover of the plaintiff's ticket "10.15
Terminal-36, via Gioliti" (Exhibits "C" and "C-1") and told him to be in the air terminal on Monday,
November 18, at 10:00 A.M.
The following Monday, Ortigas checked out of his hotel and took a taxi to the terminal, arriving there
about 9:30 A.M. He unloaded his baggage and proceeded to the counter in charge of the Lufthansa
passengers. The lady at the counter told him the Lufthansa had no space for him that day. Ortigas
requested her to check with her main office, which she did by calling it up. After calling, she
apologized and said the plaintiff's ticket was in order and would be confirmed and validated. On her
request, Ortigas had his luggage weighed and was given the free luggage allowance of a first class
passenger. He was furthermore asked to pay 800 liras for bus fare and 700 liras as embarkation tax.
Then Ortigas, along with other passengers, one of whom was Amado Castro of the Development
Bank of the Philippines, boarded a bus for the airport.
At the airport, the plaintiff handed over his ticket to the man behind the Lufthansa counter, who told
him everything was all right. At that juncture, the plaintiff heard his name called. He inquired if he
was being called from an employee of the Lufthansa and, on receiving an affirmative answer, said he
was Ortigas. The employee asked for his passport and other papers and, after examining his
passport, where his Filipino nationality appears, said he could not board the plane that day because
his seat would be given to a Belgian. Ortigas asked the man why he was doing that to him when his
ticket was confirmed and validated first class. The Lufthansa employee replied he was sorry but
Ortigas could not leave.
Fearing he would have a recurrence of his heart ailment, Ortigas took a nitroglycerin pill which his
doctor advised him to take on occasions of stress. The plaintiff then told the Lufthansa man to bring
the Belgian over so that his papers may be examined to determine whether he had a preferred right
to Ortigas' seat but the Lufthansa employee turned down the request, raised his voice, and said if
the plaintiff desired, he could take an economy seat and he would be allowed a refund. Ortigas
retorted he was not interested in a refund and what he wanted was to travel first class in accordance
with his ticket.
This argument occurred in the presence of the other passengers, one of whom was Amado Castro,
and the plaintiff felt embarrassed and humiliated because the Lufthansa employee was shouting at
him and treating him the way he did. Ortigas made another request, namely, that the employee call
other airlines to inquire if they had flights to Hongkong that day but he once more turned down the
plea and insisted that Ortigas travel economy, with the promise that he will be transferred to first
class in Cairo and onward to Hongkong.
After promising to, the man went inside a room and, after a while, came out and assured the plaintiff
he would travel first class from Cairo to Hongkong because he sent a communication that it should
be done. He then jotted down some letters on Ortigas' ticket. The plaintiff replied he was not satisfied
with the arrangement but was constrained to agree to it because he had to be in Hongkong the next

day, his luggage was in all probability already inside the plane, he was not certain he could still
secure a hotel reservation, the manager of the hotel where he stayed having told him it would be
hard for him to get another reservation once he checks out, and he was assured he would be given
first class passage from Cairo onward.
Upon arrival in Cairo, the plaintiff requested the Lufthansa agent to transfer him to first class but the
agent said he could not and that he did not receive any communication from Rome to that effect.
Ortigas also requested the man to find out if there were other airlines having planes leaving that day
but his request was likewise denied. The man, however, promised that at Dharham, Ortigas will be
transferred to first class. Ortigas had no alternative but to continue traveling as before but he did so
again under protest.
At Dharham, the plaintiff once more requested a transfer to first class but was also told by the
Lufthansa agent that he had not received any communication about the change and the request
could not be granted. The plaintiff had to travel perforce economy from Dharham. In Calcutta,
Ortigas once again requested a transfer or that he be assisted in booking passage on other planes
but was also refused. It was only in Bangkok when the chief steward asked him if he wanted to move
over to first class but having been already embarrassed and humiliated and the trip to Hongkong
being only three hours, he said he would not as a sign of protest.
In Hongkong, Ortigas protested against the treatment given him but was told by the Lufthansa office
he had to file his protest in Manila, it being the point of destination. He did so by means of a letter,
dated November 25, 1963 (Exhibit "F"), followed by another letter, dated December 20, 1963 (Exhibit
"C"), and not having received any definite answer, he brought this suit.
Although Ortigas' ticket for the flight from Rome to Hongkong was validated and confirmed by the
Alitalia, its act bound and obligated the Lufthansa. The Alitalia and Lufthansa are members of the
International Air Transport Association (IATA). It is admitted that as such member, the Alitalia can
issue tickets for other members of the association like the Lufthansa, Pan American World Airways,
and others. Par. 10, Order of April 29, 1964, and Exhibit "H", certification of the manager of the
Alitalia. Aside from being members of the IATA, the Alitalia and Lufthansa are pool partners and
conduct a joint service with interchangeable flights for the European-Far East-and Australia sectors.
Par. 11, Order of April 29, 1964. Under the pool agreement (Exhibit "DD") they undertake to adhere
to the appropriate IATA regulations and to take measures to provide district sales offices with every
possibility for close cooperation in the promotion of the pool services covered by the agreement,
including "reservation and booking". They furthermore, in effect confirm in the agreement that tickets
of one, other than free and reduced tickets, may be validated by the other.
Finally, Manuel Otayza, general manager of Filital, Inc., which is the general agent of the Alitalia in
the Philippines, testified that space reservation through telephone calls between airlines is permitted
by IATA's, "Manual of Traffic Conference Resolutions" and that telephone calls for reservation by one
airline to another is in fact accepted procedure in accordance with the official airline guide of the Air
Traffic Conference and International Air Transport Association (Exhibit "W").
The placing by the Alitalia of a sticker on the plaintiff's ticket obligated the Lufthansa to give him a
first class seat on its flight from Rome to Hongkong on November 18, 1963. The same witness,
Manuel Otayza, testified that the placing of a validating sticker on a ticket is standard airline
procedure; that a sticker changes are status of a reservation; that consequently while Ortigas' ticket
was "open", that is, it had no reservation for a particular flight between Rome and Hongkong, the
moment a validating sticker was placed thereon, stating the flight number of the airline, the day and
hour of departure, with the letters "O-K", his ticket was changed from an "open" to a "confirmed" or

"validated" ticket; and that the sticker on Ortigas' ticket meant that first class space was confirmed
for him on Lufthansa flight 646 to Hongkong on November 18, 1963, at 12:35 P.M.
Aside from Otayza's testimony, it is admitted that in the stipulation of facts that "the letters "O.K."
(Exhibit D-2) appearing on the "Res. Status" box of the sticker (Exhibit D-1) attached to Flight
Coupon No. 4 of TWA Ticket No. 015-410:451-880 (Exhibit "D") means space confirmed, per IATA
Resolution 275, page 4, Issue 2, a photostatic copy of which is attached hereto as Exhibit "O"; that
validate means to stamp or write on the passenger ticket an indication that the passenger ticket has
been officially issued by the carrier; that "the placing of a sticker on a flight coupon is a revalidation
thereof for the flight mentioned in said sticker and is an alteration effected on said coupon, in
accordance with the procedure laid down in IATA Resolution 275d, Page 1, Issue 1, a photostatic
copy of which is attached thereto as Exhibit "S";. and that "prior endorsement was not necessary for
Alitalia to revalidate TWA Ticket No. 115-410-880 Exhibit "D" because Alitalia is the carrier originally
designated in the "Via carrier" box of said ticket, in accordance with IATA Resolution No. 279,
photostatic copy of which is attached hereto as Exhibit 'T'."
There was, therefore, a valid and binding contract between Lufthansa and the plaintiff to transport
him as a first class passenger from Rome to Hongkong on November 18, 1963, and this agreement
the defendant violated by compelling the plaintiff to travel as an economy passenger. It cannot be
said the breach was the result of an honest mistake or excusable negligence. There is evidence the
defendant acted with `bad faith and in wilful disregard of the plaintiffs rights.
Ortigas' ticket was confirmed on the early morning of November 16, 1963, more than 48 hours
before his departure on the afternoon of November 18. There was, therefore, ample time to send a
telex message from Rome to the defendant's main office in Frankfurt, which is only about 2-1/2 flying
hours away, to reserve a first class seat for the plaintiff.
At the terminal on Via Gioliti, he was again told that he had a first class seat, his luggage was
checked in divesting him of control thereof, and transported to the airport some 37 kilometers
distant. He was in this manner deprived of the opportunity of availing himself of the facilities of other
airlines and compelled to take the Lufthansa flight even against his will.
In the airport, although he, was found entitled to fly first class, he was told after his Filipino passport
was seen, that his seat would be given to a Belgian, without any reason or explanation whatsoever.
His simple request that the Belgian's ticket be produced and examined to see who had a better right
to a first class seat was turned down. So was his equally simple request that other airlines be called
to find out if any of them could accept him as a first class passenger to Hongkong that day. He was
deceived into boarding the Lufthansa plane at Rome by falsely assuring him he will be transferred to
first class at Cairo, the next stop in the flight. The same false and deceptive promise was given him
at Dharham and Calcutta.
Indubitable proof of the defendant's bad faith is found in the fact that while its employee was
assuring the plaintiff he would be transferred to first class in Cairo, he was at the same time writing
on his ticket the following notation: "TRVLDY/c ROME HEG ROME ST", which means "Travelled
economy class Rome to Hongkong St", thereby barring Ortigas from asserting any right to demand
first class accommodation. The defendant's employee, therefore, knew all along the plaintiff would
not travel first class, and yet he deliberately made him believe he would be transferred to first class
from Cairo to Hongkong.

From the circumstances, it is clear that the defendant not only breached its duty to the plaintiff but
also did not want to release him as a passenger and wished to hold on to him even if it would cause
him inconvenience and embarrassment. (Pages 97-109, Record on Appeal.) .
Disputing the foregoing conclusions, Lufthansa claims firstly that the Alitalia employee who validated and confirmed
Ortigas' reservation must have made a mistake because actually, he was informed by the Lufthansa Rome office
that Ortigas could only be waitlisted. Assuming, however, there was such an error, it has been indisputably proven
that under the so-called pool arrangement among different airline companies pursuant to the International Air
Transport Association (IATA) agreement of which Alitalia and Lufthansa are signatories, both companies are
constituted thereby as agents of each other in the issuing of tickets and other matters pertaining to their relations
with those who would need their services, and since there can be no question that on its face, the annotations made
by Alitalia on the ticket here in dispute cannot have any (other meaning than that the reservation of Ortigas for the
Rome Hongkong flight was validated and confirmed, Lufthansa's disclaimer is unavailing. Besides, it appears that
when Ortigas checked in at the airport, the Lufthansa lady employee thereat told him, after making the proper
verification, that the reservation was correct. What is more, in the unconcluded testimony of Ivo Lazzari, the striking
out of which is questioned by Lufthansa, he admitted that it was a fact that the said reservation of plaintiff for first
class was confirmed, albeit he qualified that this was done already in the morning of November 18th, the day of the
flight, almost at the last hour. What seems to have happened was that somehow the first class accommodations for
that flight were overboard and Lufthansa tried to solve the problem by downgrading Ortigas to the economy class in
favor of a Belgian, as Ortigas was told by the Lufthansa employee who paged him over the public address system
for the purpose just as he was about to go to the departure area, with his luggage already checked and his
overweight fees duly paid, so much so that they were already loaded in the plane. Verily, such treatment given to
plaintiff was completely wrong and absolutely unjustifiable. Nobody, much less a common carrier who is under
constant special obligation to give utmost consideration to the convenience of its customers, may be permitted to
relieve itself from any difficulty situation created by its own lack of diligence in the conduct of its affairs in a manner
prejudicial to such customers. It is Our considered view that when it comes to contracts of common carriage,
inattention and lack of care on the part of the carrier resulting in the failure of the passenger to be accommodated in
the class contracted for amounts to bad faith or fraud which entitles the passenger to the award of moral damages
in accordance with Article 2220 of the Civil Code. But in the instant case, the breach appears to be of graver nature,
since the preference given to the Belgian passenger over plaintiff was done willfully and in wanton disregard of
plaintiff's rights and his dignity as a human being and as a Filipino, who may not be discriminated against with
impunity.
Lufthansa contends, however, that there could not have been any possible discrimination by reason of race against
Ortigas because from his appearance, said plaintiff can easily be taken for a European or white more than his own
witness Amado Castro and besides, there were other orientals in the same flight on that occasion. It is argued that
any such policy would be self-defeating, since it would certainly be damaging to its own business. Again, this
ratiocination cannot carry the day for Lufthansa, for what appears from the evidence in this case is not really a case
of a general policy of discriminating against orientals or non-whites, but a specific act of Lufthansa employee at the
airport of giving preference to a Belgian after examining Ortigas passport wherein his Filipino nationality is noted.
Indeed, the fact that despite plaintiffs protestations and demand that he be shown how it could happen that
somebody else, particularly that Belgian, should be given his place when his reservation was validated and
confirmed and actually, he had already checked in and his baggage was already in the plane, nothing was done to
satisfy him, merely infused bad faith into the breach of contract already committed of depriving plaintiff of his
reserved accommodation. In other words, from the legal standpoint, such preference given to a European surely
aggravated the damage or injury suffered by plaintiff, but the very act alone of deliberately downgrading him despite
his confirmed reservation for first class accommodation is sufficient ground for relief. And considering that there are
already recorded cases in this Court wherein Filipinos have been similarly discriminated against by foreign airline
company employees in the treatment of passengers this new instance can easily be believed and correspondingly
dealt with in fixing and assessing the liability of herein defendant.

As found by the court below what worsened the situation of Ortigas was that Lufthansa succeeded in keeping him
as its passenger by assuring him that he would be given first class accommodation at Cairo, the next station, the
proper arrangements therefor having been made already, when in truth such was not the case. Thus, instead of
complying with the request of Ortigas that other airlines be contacted to find out it they had first class space for him,
the Lufthansa employee who had indifferently told him about his downgrading paid very little attention if ever to said
request. And to keep him from giving the business to another company, he was made to believe that he would be
given first class accommodation at Cairo. Although molested and embarrassed to the point that he had to take
nitroglycerine pills to ward off a possible heart attack, Ortigas hardly had any choice, since his luggage was already
in the plane. To his disappointment, when the plane reached Cairo, he was told by the Lufthansa office there that no
word at all had been received from Rome and they had no space for him in first class. Worse, similar false
representations were made to him at Dharham and Calcutta. It was only at Bangkok where for the first time, Ortigas
was at last informed that he could have a first class seat in that leg of the flight, from Bangkok to Hongkong. This
Ortigas rejected, if only to make patent his displeasure and indignation at being so inconsiderately treated in the
earlier part of his journey.
Lufthansa insists in its brief that it could have proven that there was no such "entrapment of a captive passenger"
had it been allowed the postponement it sought of the September 28, 1966 hearing. It is argued that there could
have been no way by which its Rome office could have assured Ortigas about what he would be given in Cairo, the
flight being fully booked as it was without any assurance of any first class seat being vacated by then. We are not
impressed. In view of the insistence of plaintiff that he be given the first class accommodation he had contracted and
paid for, the least that the, Rome office should have done was to communicate with Cairo and strongly urge that all
possible effort be made to comply with his well grounded request. As it happened, however, the Cairo office
informed Ortigas when he arrived there that they had not received any word at all from Rome. On the contrary, as
pointed out by the trial court, contrary to the verbal assurance given Ortigas, the Lufthansa employee made
annotations on his ticket that he was travelling economy class from Rome to Hongkong. If, as contended by
Lufthansa, Ortigas was duly advised to make arrangements for transfer to first class as soon as he arrived at each
station on the way, why was such notation made that he was travelling up to Hongkong in economy class? All these
only go to show that any evidence of defendant tending to disprove the testimony of Ortigas would in any event
have been inconclusive or unreliable.
Likewise, Lufthansa maintains that it could have proven that Ortigas did not take offense at being downgraded, as in
fact, according to Lufthansa, he was in jovial mood throughout the trip enjoying his conversation and exchange of
amenities with his seatmate, who by strange coincidence happened to be the Manager of Lufthansa German
Airlines for the district of Australia and New Zealand holding said position since 1962. 1 Moreover, it is argued, the
economy class accommodations are not much different from first class and Ortigas was not delayed in his trip. We cannot
see the point. A passenger contracts for first class accommodations for many reasons peculiar to himself and pays a
higher price therefor, and it is certainly not for the airplane to say later, after it deprives him of his space in order to favor
another passenger, that economy class is anyway just as good as first class. That Ortigas was rightfully indignant is not
difficult to imagine. No person in his normal senses and possessed of human dignity would have been unperturbed and
unruffled by the treatment he had received. More, he was under express admonition of his doctor taking care of his ailing
coronary condition to travel only in first class. Indeed, that he complained and made himself emphatically clear while still
in Rome is sufficiently substantiated in the record, as it was more or less admitted by defendant's witness Lazzari when he
testified that he heard about plaintiff's complaint that same day, November 18, 1963.
In the light of all the foregoing, there can be no doubt as to the right of Ortigas to damages, both moral and
exemplary. Precedents We have consistently adhered to so dictate. Beginning with Cuenca, 2 wherein the Court
rejected the theory that an air carrier is liable only in the event of death or injury suffered by a passenger, because,
according to the Court, to so hold would be tantamount to declaring the carrier "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", We have uniformly
upheld the right of a passenger to damages in all cases wherein, after having contracted and paid for first class
accommodations duly confirmed and validated, he is transferred over his objection to economy, class, which he has to
take in order to be able to arrive at his destination on his scheduled time.

In the case of Nicolas L. Cuenca, then Commissioner of Public Highways of the Philippines, he boarded a Northwest
plane in Manila with a first class ticket to Tokyo, but upon arrival at Okinawa, an agent of the company rudely
compelled him, over his protest, to move over to the tourist class, which he had to do, so he could reach the
international conference he was attending on time. Under these facts, the Court held that the P20,000 awarded by
the lower court to Cuenca "may well be considered as nominal and also as exemplary, the Court of Appeals having
modified the trial court's designation thereof as moral, saying it should have been nominal.
In Lopez 3, Honorable Fernando Lopez, then an incumbent senator and former Vice President of the Philippines, together
with his wife and his daughter and son-in-law, made first class reservations with the Pan American World Airways in its
Tokyo-San Francisco flight. The reservation having been confirmed, first class tickets were subsequently issued in their
favor. Mistakenly, however, defendant's agent cancelled said reservation, but expecting some cancellations before the
flight scheduled about a month later, the reservations supervisor decided to withhold the information from them, with the
result that upon arrival in Tokyo, the Lopezes discovered they had no first class accommodations and were thus
compelled to take the tourist class, just so the senator could be on time for his pressing engagements in the United
States. In the light of these facts, the Court held there was a breach of the contract of carriage and viewed as the element
of bad faith entitling the plaintiffs to moral damages for such contractual breach, the failure of the agents of the defendant
to inform the plaintiffs on time that their reservation for first class had long before been cancelled by mistake. According to
the Court, such omission placed plaintiffs in a predicament that enabled the company to keep the plaintiffs as their
passengers in the tourist class, thereby retaining the business and promoting the company's self-interest at the expense
of, embarrassment, discomfort and humiliation on the part of the plaintiffs.
In Air France vs. Carrascoso 4 plaintiff Mr. Rafael Carrascoso, a civil engineer who was going to Lourdes, France, as a
member of a religious group of pilgrims was issued by the Philippine Air Lines, as agent of the defendant Air France, a
ticket for first class round trip from Manila to Rome. From Manila, Carrascoso travelled first class, as per said ticket, but at
Bangkok, the Manager of the defendant airline forced him to vacate the first class seat because there was a white man
who allegedly had a better right thereto, without, however, showing him the basis for such preference. Upon these factual
premises, the Court held:
It is really correct to say that the Court of Appeals in the quoted portion first transcribed did not use
the term `bad faith'. But can it be doubted that the recital of facts therein points to bad faith? The
manager not only prevented Carrascoso from enjoying his right to a first class seat, worse, he
imposed his arbitrary will; he forcibly ejected him from his seat, made him suffer the humiliation of
having to go to the tourist class compartment just to give way to another passenger whose right
thereto has not been established. Certainly, this is bad faith. Unless, of course, bad faith has
assumed a meaning different from what is understood in law. For, bad faith, contemplates a "state of
mind affirmatively operating with furtive design or with some motive of self-interest or ill will or for
ulterior purpose." (Words & Phrases, Perm. Ed., Vol. 5, p. 13, citing Warfield Natural Gas Co. vs.
Allen, 59 S.W. (2d) 534, 538.)
And if the foregoing were not yet sufficient, there is the express finding of bad faith in the judgment
of the Court of First Instance, thus:
"The evidence shows that defendant violated its contract of transportation with
plaintiff inbad faith, with the aggravating circumstances that defendant's Manager in
Bangkok went to the extent of threatening the plaintiff in the presence of many
passengers to have him thrown out of the airplane to give the "first class" seat that
he was occupying to, again using the words of the witness Ernesto G. Cuento, a
"white man" whom he (defendant's Manager) wished to accommodate, and the
defendant has not proven that this "white man" had any "better right" to occupy the
"first class" seat that the plaintiff was occupying, duly paid for, and for which the
corresponding "first class" ticket was issued by the defendant to him." (R.A., p. 74;
emphasis supplied.) (at pp. 166-167.)

These precedents, as may be seen, apply four-square to herein plaintiffs case. Defendant's liability for willful and
wanton breach of its contract of carriage with plaintiff is, therefore, indubitable.
Coming now to the amount that should be awarded by way of damages to the plaintiff, it is also the teaching of the
cases aforecited that defendant is liable not only for moral but also for exemplary damages. As earlier stated, the
court below fixed the compensation for moral damages at P100,000 and the exemplary at P30,000. The Court
believes that these amounts are not enough.
According to the lower court:
Although the plaintiff has not held any elective public office, he has however, a distinguished record
as a private citizen, a lawyer, businessman, a civic and religious leader, a member of numerous
government boards and organizations as well as of local and international bodies, and is the
recipient of awards and citations for outstanding services and achievements.
He was, and still is, moreover suffering from a heart ailment and has been advised by his physician
to travel first class because it is more relaxing and comfortable. His position as chairman of the
boards of directors of the corporation he represented also required that he travel in that manner. He
was, furthermore, carrying a special passport issued by the Philippine Government to represent it
and business corporations abroad.
His sickness and the need for him to travel in the most comfortable manner possible were made
known to the defendant's employee, but he paid no heed to them. Instead, he engaged Ortigas in a
heated discussion, summarily brushed off his protests and pleas, humiliated him, and tricked him
into boarding his employer's plane, endangering thereby his health and obliging him to take medicine
to forestall an attack.
There is, finally, evidence that he was discriminated against because of his nationality for he was
told to yield his first class seat to a Belgian only after his passport was examined and his Filipino
citizenship must have been noted. .
Under the circumstances and measured by the criterion, jurisprudence has followed, the
compensation the plaintiff should be entitled to receive must be fixed at P100,000.00 as moral
damages, P30,000.00 as exemplary damages or corrective damages, and P20,000.00 as attorney's
fees. (Pp. 111-113, Record on Appeal.)
We have reviewed the evidence and We are convinced there is more than ample basis for these findings. But under
the circumstances revealed in the record, it is Our considered opinion that the award of moral damages should be
increased to P150,000.
We cannot go along with defendant's pose that in Cuenca the amount awarded was only P20,000, for the very
obvious reason that in that case what was involved was only one leg of the flight contracted for, namely, that from
Okinawa to Tokyo, whereas in the case not at bar, the offense was repeated four times, at Rome, Cairo, Dharham
and Calcutta, with apparent cold indifference of defendant's agents to plaintiff's plight. Besides, it appears that
Cuenca did not appeal from the trial court's decision fixing said amount, hence there was no occasion for the
Supreme Court to award more. This was also what happened in the Carrascoso case, where the plaintiff did not
complain against the award of only P25,000-moral-and P10,000-exemplary damages made by the trial court. It was
Air France who claimed that these were even excessive. Verily, however, such, discriminatory acts of the defendants
in those cases which were not only violative of their contractual obligations but also offensive to human dignity and
national or racial pride constitute about the most justifiable ground for the award of moral damages, for the resulting
injury therefrom cannot but cause immense mental anguish, besmirched reputation, wounded feelings, moral shock

and social humiliation. (See Article 2217 of the Civil Code.) We reiterate, they are to be considered as infecting with
bad faith the breach of contract committed, under Article 2220 of the same Code. (Lopez vs. Pan Am., supra.)
Lufthansa suggests that compared to the P100,000 awarded to Vice President Lopez in the case aforementioned,
the P100,000 given by the trial court to Ortigas are "grossly excessive". It does not appear to Us to be so. As
pointed out by His Honor, "although plaintiff has not held any elective public office, he has, however, a distinguished
record as a private citizen, a lawyer, businessman, a civic and religious leader, a member of numerous boards and
organizations as well as local and international bodies, and is the recipient of awards and citations for outstanding
services and achievements." Indeed, under the proven facts in the record, We cannot regard plaintiff in any inferior
position vis-a-vis Vice President Lopez in the highest circles of Philippine society and in the business and religious
world, not to speak of his standing in government officialdom.
Beside there is again the disparity between then Lopez case and this one that here the offense, which, as in
Cuenca, is aggravated by the Lufthansa employee at Rome having falsely noted on the ticket that Ortigas was
travelling in economy from Rome to Hongkong, 5 was repeated four times in the same trip, namely in Rome, Cairo,
Dharham and Calcutta. More importantly, unlike in the case of Lopez, Ortigas was suffering from a weak heart and under
doctor's advice to travel only in first class, hence, his being compelled to stay in economy or tourist class during the major
part of his trip, must have given him added apprehensive feelings about his safety. And, moreover, it is to benoted that in
the Lopez case, which was decided in 1966, aside from taking into account the personal circumstances of the plaintiff, the
Court considered "the present rate of exchange and the terms at which amount of damages awarded would approximately
be in U.S. dollars", hence, We may not justifiably do differently here..
Furthermore, it may not be amiss to mention here that in Zulueta vs. Pan American Airways Inc., 43 SCRA 397, the
Court awarded the plaintiffs: Zulueta, the husband, his wife and a minor daughter, a total of P775,000 as damages
consisting of P500,000 as moral, P200,000 as exemplary and P75,000 as attorney's fees, apart from actual
damages. In that case, the Zulueta's were coming home to Manila from Honolulu in a Pan-American plane. At Wake,
however, where the plane arrived at 4:00 o'clock in the morning, Zulueta could not be found at flight time because,
without letting anyone know, not even his wife or daughter, he had relieved himself, according to him, at the beach
behind the terminal. When at last, he was found, the Pan-Am employee who first met him while walking back from
the beach remonstrated him thus: "What in the hell do you think you are! Get on that plane." This angered Zulueta
who engaged the said employee in an exchange of angry words. In the meanwhile, the pilot who had been tipped by
a "man from the State Department", also a passenger in that flight, that there might be a bomb in the plane and
expressed apprehension for the safety of the flight unless Zulueta could be found, ordered the unloading of the bags
of the Zuluetas, and when three of the four of them had already been unloaded, he ordered Zulueta to open them,
but the latter refused. Another exchange of angry words followed, in the course of which, according to Zulueta's
evidence, the pilot went to the extent of referring to him and his family as "those monkeys". Ultimately, the plane left
without Zulueta, albeit his wife and daughter were on board, because the captain refused to allow Zulueta to board
until after his bags were opened and inspected, which Zulueta refused entirely to do. Although, said decision is not
yet final, because of the pendency of a second motion for reconsideration the Court has not yet resolved, the Court
has already allowed the partial execution of the judgment, thus enabling Zuluetas to collect already one-half of the
amount or over P335,000, which amount, according to the concurring and dissenting opinion there of the writer of
the instant decision could be the least that should anyway be allowed. Of course, the Court did not itemize the
award but granted the same to the family as a whole, but it is evident that in the final distribution, Zulueta would get
for himself from at least P150,000 to not more than P200,00. 6
We hold that the foregoing considerations justify the increase of the award of moral damages from P100,000 to
P150,000.
Finally, We have the dispute regarding the amount of exemplary damages awarded. In this respect, it is Our
considered opinion that defendant should Pay P100,000 instead of the P30,000 awarded by the trial court. The
record of this case taken together with what are revealed in the other similar cases decided by this Court, those
aforediscussed, convinces Us that defendant, as an airline, should be made to pay an amount that can really serve

as a deterrent against a seeming pattern of indifference and unconcern, and what is worse, of discrimination for
racial reasons, discernible in the treatment of air passengers. This is not the first case, and unless the proper
sanctions are applied, it does not appear it is going to be the last yet, of instances wherein Filipino passengers
having validated and confirmed tickets for first class would be shoved to the economy class, over their valid
objections and without any regard at all to their feelings and convenience, only to favor other passengers presumed
by the airlines to be of superior race, hence, deserving preference. It is high time everyone concerned were made to
realize that the laws of the Philippines do not permit any act of discrimination against its citizens, specially when this
accompanies a clear breach of contractual obligations of common carriers whose business is affected with public
interest and must be directed to serve the convenience and comfort of the passengers. When any disregard of such
laws is committed, the Supreme Court, as the interpreter of such laws, must exact the commensurate liability which
they contemplate.
"Exemplary damages are required by public policy, for wanton acts must be repressed. They are an antidote so that
the poison of wickedness may not run through the body politic." (Report of Code Commission, pp. 75-76) by
authority of the decided cases aforediscussed, 7 acts of similar nature as those herein involved fall within the category of
those justifying the imposition of exemplary damages pursuant to the codal concept just stated.
The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction
for public good. ... In view of its nature, it should be imposed in such an amount as to sufficiently and effectively
deter similar breach of contracts by defendant or other airlines." (Lopez v. Pan-American World Airways, supra; see
also Rotea vs. Halili, 109 Phil. 495; People vs. Medroso, Jr., G.R. No. L-37633, Jan. 31, 1975, 62 SCRA 245;
Cotabato Timberland Co. Inc. vs. Plaridel Lumber Co., Inc., 13 SCRA 235) Thus, all relevant matters considered,
P100,000 of exemplary damages, which practically amounts only to not more than $15,000 U.S. under the present
rate of exchange, would serve the ends for which the liability has been conceived.
WHEREFORE, the judgment appealed from is modified by raising the award of moral and exemplary damages to
plaintiff Ortigas to P150,000.00 and P100,000.00, respectively. In all other respects, including as to the payment of
interests on the said amounts, the same is affirmed.
Fernando (Chairman), Antonio, Aquino and Concepcion, Jr., JJ., concur.

Footnotes
1 Annexed as Appendix 1 to the Reply Brief of Defendant Appellant is the affidavit of Max Albert
Springweiler, who defendant claims is its newly discovered evidence.
2 Northwest Airlines Inc. vs. Cuenca, 14 SCRA 1063.
3 Fernando Lopez, et al. vs. Pan American World Airways, 16 SCRA 431.
4 18 SCRA 155.
5 In Cuenca, supra, his ticket was marked, without his knowledge as W/L or wait-listed despite it had
been confirmed.
6 the concurring and dissenting opinion of this writer was relative to the resolution denying the first
motion for reconsideration. It disputes the right of Zulueta to moral damages for breach of contract in
bad faith but recognizes his right to moral damages because of the inconsiderate and insulting

manner he was treated by the employees of Pan-Am a quasi delict. Said opinion has already
been released but it has not yet been published in SCRA.
7 Cuenca, Carrascoso and Lopez, supra.

SECOND DIVISION

G.R. No. 106664 March 8, 1995


PHILIPPINE
vs.
FLORANTE A. MIANO, respondent.

AIR

LINES, petitioner,

PUNO, J.:
The petitioner questions the Decision of the Regional Trial Court of Makati, Branch 148, dated July 29,
1992, 1awarding private respondent moral and exemplary damages and attorney's fees for want of legal justification. We
grant the petition.
The facts are uncontroverted.
On August 31, 1988, private respondent took petitioner's flight PR 722, Mabuhay Class, bound for Frankfurt,
Germany. He had an immediate onward connecting flight via Lufthansa flight LH 1452 to Vienna, Austria. At the
Ninoy Aquino International Airport, he checked-in one brown suitcase weighing twenty (20) kilograms 2 but did not
declare a higher valuation. He claimed that his suitcase contained money, documents, one Nikkon camera with zoom
lens, suits, sweaters, shirts, pants, shoes, and other accessories. 3
Upon private respondent's arrival at Vienna via Lufthansa flight LH 1452, his checked-in baggage was missing. He
reported the matter to the Lufthansa authorities. After three (3) hours of waiting in vain, he proceeded to Piestany,
Czechoslovakia. Eleven (11) days after or on September 11, 1988, his suitcase was delivered to him in his hotel in
Piestany, Czechoslovakia. He claimed that because of the delay in the delivery of his suitcase, he was forced to
borrow money to buy some clothes, to pay $200.00 for the transportation of his baggage from Vienna to Piestany,
and lost his Nikkon camera. 4
In November 1988, private respondent wrote to petitioner a letter demanding: (1) P10,000.00 cost of allegedly lost
Nikkon camera; (2) $200.00 for alleged cost of transporting luggage from Vienna to Piestany; and (3) P100,000.00
as damages. In its reply, petitioner informed private respondent that his letter was forwarded to its legal department
for investigation.
Private respondent felt his demand letter was left unheeded. He instituted an action for Damages docketed as Civil
Case No. 89-3496 before the Regional Trial Court of Makati.
Petitioner contested the complaint. It disclaimed any liability on the ground that there was neither a report of
mishandled baggage on flight PR 722 nor a tracer telex received from its Vienna Station. It, however, contended that
if at all liable its obligation is limited by the Warsaw Convention rate.
Petitioner filed a Third-Party Complaint against Lufthansa German Airlines imputing the mishandling of private
respondent's baggage, but was dismissed for its failure to prosecute.
In its decision, the trial court observed that petitioner's actuation was not attended by bad faith. Nevertheless, it
awarded private respondent damages and attorney's fees, the dispositive portion of which reads:

WHEREFORE, judgment is hereby rendered in favor of the plaintiff (private respondent) and against
the defendant (petitioner), thereby ordering the latter to pay the following:
(a) U.S. $200.00 as cost of transporting the suitcase from Vienna to Czechoslovakia;
(b) P40,000.00 as moral damages;
(c) P20,000.00 as exemplary damages; and
(d) P15,000.00 as attorney's fees.
SO ORDERED. 5
Hence, this petition for review.
In breach of contract of carriage by air, moral damages are awarded only if the defendant acted fraudulently or in
bad faith. 6 Bad faith means a breach of a known duty through same motive of interest or ill will. 7
The trial court erred in awarding moral damages to private respondent. The established facts evince that petitioner's
late delivery of the baggage for eleven (11) days was not motivated by ill will or bad faith. In fact, it immediately
coordinated with its Central Baggage Services to trace private respondent's suitcase and succeeded in finding it. At
the hearing, petitioner's Manager for Administration of Airport Services Department Miguel Ebio testified that their
records disclosed that Manila, the originating station, did not receive any tracer telex. 8 A tracer telex, an airline lingo,
is an action of any station that the airlines operate from whom a passenger may complain or have not received his
baggage upon his arrival. 9 It was reasonable to presume that the handling of the baggage was normal and regular. Upon
inquiry from their Frankfurt Station, it was however discovered that the interline tag of private respondent's baggage was
accidentally taken off. According to Mr. Ebio, it was customary for destination stations to hold a tagless baggage until
properly identified. The tracer telex, which contained information on the baggage, is matched with the tagless luggage for
identification. Without the tracer telex, the color and the type of baggage are used as basis for the matching. Thus, the
delay.
Worthy to stress, the trial court made an unequivocal conclusion that petitioner did not act in bad faith or with
malice, viz.:
xxx xxx xxx
Absent a finding as to the bad intention of defendant (petitioner) PAL, this court finds it appropriate to
apply the Warsaw Convention with respect to the liability of Air Carriers. 10
xxx xxx xxx

The mere fact that defendant (petitioner) exerted effort to assist plaintiff (private respondent) in his
predicament as shown in defendant's (petitioner's) letter to plaintiff (private respondent) (Exh. "E")
and likewise the letter from Mr. Miguel Ebio, Manager-Airport Services Administration of defendant
(petitioner) PAL to its Senior Counsel-Litigation, Atty. Marceliano Calica (Exh. "3") which reveals the
fact that an investigation was conducted as to mishandled baggage, coupled with the fact that said
information were then relayed to plaintiff (private respondent) as evidenced by a letter of defendant
(petitioner) to plaintiff (private respondent) (Exh. "4") does not warrant a showing of malice on the
part
of
defendant
( petitioner). 11
xxx xxx xxx

Under the circumstances obtaining, considering that defendant's (petitioner's) actuation was not
attendant with bad faith, the award of moral damages in the amount of P40,000.00 is but just and
fair. 12
Bad
faith
must
Appeals, 13 we ruled:

be

substantiated

by

evidence.

In LBC

vs. Court

of

Bad faith under the law cannot be presumed; it must be established by clear and convincing
evidence. Again, the unbroken jurisprudence is that in breach of contract cases where the defendant
is not shown to have acted fraudulently or in bad faith, liability for damages is limited to the natural
and probable consequences of the breach of the obligation which the parties had foreseen or could
reasonably have foreseen. The damages, however, will not include liability far moral damages.
(Citations omitted)
We can neither sustain the award of exemplary damages. The prerequisite for the award of exemplary damages in
cases of contract or quasi-contract 14 is that the defendant acted in wanton, fraudulent, reckless, oppressive, or
malevolent manner. 15 The undisputed facts do not so warrant the characterization of the action of petitioner.
The award of attorney's fees must also be disallowed for lack of legal leg to stand on. The fact that private
respondent was compelled to litigate and incur expenses to protect and enforce his claim did not justify the award of
attorney's fees. The general rule is that attorney's fees cannot be recovered as part of damages because of the
policy that no premium should be placed on the right to litigate. 16 Petitioner is willing to pay the just claim of $200.00 as
a result of the delay in the transportation of the luggage in accord with the Warsaw Convention. Needless to say, the
award of attorney's fees must be deleted where the award of moral and exemplary damages are eliminated.
IN VIEW WHEREOF, the assailed Decision of July 29, 1992 is MODIFIED deleting the award of moral and
exemplary damages and attorney's fees. No costs.
SO ORDERED.
Narvasa, C.J., Bidin, Regalado and Mendoza, JJ., concur.

Footnotes
1 Honorable Oscar B. Pimentel, Presiding Judge.
2 RTC decision, p. 3;. Rollo p. 23.
3 Id., p. 21.
4 Id.
5 Id., p. 28.
6 Civil Code, Article 2220.
7 Lopez, et al. vs. Pan American World Airways, No. L-22415, March 30, 1966, 16 SCRA 431.
8 Rollo, p. 23.

9 Id.
10 Id., p. 27.
11 Id., p. 28.
12 Id.
13 G.R. No. 108670, September 21, 1994.
14 Civil Code, Article 2232.
15 Albenson Enterprises Corp. vs. Court of Appeals, G.R. No. 88694, January 11, 1993, 217 SCRA
16.
16 Firestone Tire & Rubber Company
L-17106, October 19, 1966, 18 SCRA 356.

of

the

Philippines

vs.

Ines

Chaves,

No.

FIRST DIVISION
[G.R. No. 71929 : December 4, 1990.]
192 SCRA 9
ALITALIA, Petitioner,
Respondents.

vs. INTERMEDIATE

APPELLATE

COURT

and

FELIPA

E.

PABLO,

DECISION
NARVASA, J.:
Dr. Felipa Pablo an associate professor in the University of the Philippines, 1 and a research grantee of
the Philippine Atomic Energy Agency was invited to take part at a meeting of the Department of
Research and Isotopes of the Joint FAO-IAEA Division of Atomic Energy in Food and Agriculture of the
United Nations in Ispra, Italy. 2 She was invited in view of her specialized knowledge in "foreign
substances in food and the agriculture environment." She accepted the invitation, and was then scheduled
by the organizers, to read a paper on "The Fate of Radioactive Fusion Products Contaminating Vegetable
Crops." 3 The program announced that she would be the second speaker on the first day of the meeting. 4
To fulfill this engagement, Dr. Pablo booked passage on petitioner airline, ALITALIA.
She arrived in Milan on the day before the meeting in accordance with the itinerary and time table set for
her by ALITALIA. She was however told by the ALITALIA personnel there at Milan that her luggage was
"delayed inasmuch as the same . . . (was) in one of the succeeding flights from Rome to Milan." 5 Her
luggage consisted of two (2) suitcases: one contained her clothing and other personal items; the other,
her scientific papers, slides and other research material. But the other flights arriving from Rome did not
have her baggage on board.
By then feeling desperate, she went to Rome to try to locate her bags herself. There, she inquired about
her suitcases in the domestic and international airports, and filled out the forms prescribed by ALITALIA
for people in her predicament. However, her baggage could not be found. Completely distraught and
discouraged, she returned to Manila without attending the meeting in Ispra, Italy.
: nad

Once back in Manila she demanded that ALITALIA make reparation for the damages thus suffered by her.
ALITALIA offered her "free airline tickets to compensate her for any alleged damages. . . ." She rejected
the offer, and forthwith commenced the action 6 which has given rise to the present appellate
proceedings.
As it turned out, Prof. Pablo's suitcases were in fact located and forwarded to Ispra, 7 Italy, but only on
the day after her scheduled appearance and participation at the U.N. meeting there. 8 Of course Dr. Pablo
was no longer there to accept delivery; she was already on her way home to Manila. And for some reason
or other, the suitcases were not actually restored to Prof. Pablo by ALITALIA until eleven (11) months later,
and four (4) months after institution of her action. 9
After appropriate proceedings and trial, the Court of First Instance rendered judgment in Dr. Pablo's favor:
10
"(1) Ordering the defendant (ALITALIA) to pay . . . (her) the sum of TWENTY THOUSAND PESOS
(P20,000.00), Philippine Currency, by way of nominal damages;
(2) Ordering the defendant to pay . . . (her) the sum of FIVE THOUSAND PESOS (P5,000.00),
Philippine Currency, as and for attorney's fees; (and)
(3) Ordering the defendant to pay the costs of the suit."
ALITALIA appealed to the Intermediate Appellate Court but failed to obtain a reversal of the judgment. 11
Indeed, the Appellate Court not only affirmed the Trial Court's decision but also increased the award of
nominal damages payable by ALITALIA to P40,000.00. 12 That increase it justified as follows: 13
"Considering the circumstances, as found by the Trial Court and the negligence committed by
defendant, the amount of P20,000.00 under present inflationary conditions as awarded . . . to the

plaintiff as nominal damages, is too little to make up for the plaintiff's frustration and
disappointment in not being able to appear at said conference; and for the embarrassment and
humiliation she suffered from the academic community for failure to carry out an official mission for
which she was singled out by the faculty to represent her institution and the country. After
weighing carefully all the considerations, the amount awarded to the plaintiff for nominal damages
and attorney's fees should be increased to the cost of her round trip air fare or at the present rate
of peso to the dollar at P40,000,00."
ALITALIA has appealed to this Court on Certiorari. Here, it seeks to make basically the same points it tried
to make before the Trial Court and the Intermediate Appellate Court, i.e.:
1) that the Warsaw Convention should have been applied to limit ALITALIA'S liability; and
2) that there is no warrant in fact or in law for the award to Dr. Pablo of nominal damages and
attorney's fees. 14
In addition, ALITALIA postulates that it was error for the Intermediate Appellate Court to have refused to
pass on all the assigned errors and in not stating the facts and the law on which its decision is based. 15
Under the Warsaw Convention, 16 an air carrier is made liable for damages for:
1) the death, wounding or other bodily injury of a passenger if the accident causing it took place on
board the aircraft or in the course of its operations of embarking or disembarking; 17
2) the destruction or loss of, or damage to, any registered luggage or goods, if the occurrence
causing it took place during the carriage by air;" 18 and
3) delay in the transportation by air of passengers, luggage or goods. 19
In these cases, it is provided in the Convention that the "action for damages, however, founded, can only
be brought subject to conditions and limits set out" therein. 20
The Convention also purports to limit the liability of the carriers in the following manner: 21
1. In the carriage of passengers the liability of the carrier for each passenger is limited to the sum
of 250,000 francs . . . Nevertheless, by special contract, the carrier and the passenger may agree
to a higher limit of liability.
: nad

2. a) In the carriage of registered baggage and of cargo, the liability of the carrier is limited to a
sum of 250 francs per kilogramme, unless the passenger or consignor has made, at the time when
the package was handed over to the carrier, a special declaration of interest in delivery at
destination 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 sum is greater than
the actual value to the consignor at delivery.
b) In the case of loss, damage or delay of part of registered baggage or cargo, or of any object
contained therein, the weight to be taken into consideration in determining the amount to which
the carrier's liability is limited shall be only the total weight of the package or packages concerned.
Nevertheless, when the loss, damage or delay of a part of the registered baggage or cargo, or of
an object contained therein, affects the value of other packages covered by the same baggage
check or the same air way bill, the total weight of such package or packages shall also be taken
into consideration in determining the limit of liability.
3. As regards objects of which the passenger takes charge himself the liability of the carrier is
limited to 5000 francs per passenger.
4. The limits prescribed . . shall not prevent the court from awarding, in accordance with its own
law, in addition, the whole or part of the court costs and of the other expenses of litigation incurred
by the plaintiff. The foregoing provision shall not apply if the amount of the damages awarded,
excluding court costs and other expenses of the litigation, does not exceed the sum which the
carrier has offered in writing to the plaintiff within a period of six months from the date of the
occurrence causing the damage, or before the commencement of the action, if that is later.
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 . . by any agent of the carrier acting within the scope

of his employment." 22 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, 23 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. 24
The Convention does not thus operate as an exclusive enumeration of the instances of an airline's liability,
or as an absolute limit of the extent of that liability. 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. 25 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 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. The Convention's provisions, in short, do not "regulate
or exclude liability for other breaches of contract by the carrier" 26 or misconduct of its officers and
employees, or for some particular or exceptional type of damage. 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, which is absurd." 27 Nor may it for a moment be supposed that if a member of the
aircraft complement should inflict some physical injury on a passenger, or maliciously destroy or damage
the latter's property, the Convention might successfully be pleaded as the sole gauge to determine the
carrier's liability to the passenger. Neither may the Convention be invoked to justify the disregard of some
extraordinary sort of damage resulting to a passenger and preclude recovery therefor beyond the limits
set by said Convention. It is in this sense that the Convention has been applied, or ignored, depending on
the peculiar facts presented by each case.
:-crala w

In Pan American World Airways, Inc. v. I.A.C., 28 for example, the Warsaw Convention was applied as
regards the limitation on the carrier's liability, there being a simple loss of baggage without any otherwise
improper conduct on the part of the officials or employees of the airline or other special injury sustained
by the passenger.
On the other hand, the Warsaw Convention has invariably been held inapplicable, or as not restrictive of
the carrier's liability, where there was satisfactory evidence of malice or bad faith attributable to its officers
and employees. 29 Thus, an air carrier was sentenced to pay not only compensatory but also moral and
exemplary damages, and attorney's fees, for instance, where its employees rudely put a passenger
holding a first-class ticket in the tourist or economy section, 30 or ousted a brown Asiatic from the plane
to give his seat to a white man, 31 or gave the seat of a passenger with a confirmed reservation to
another, 32 or subjected a passenger to extremely rude, even barbaric treatment, as by calling him a
"monkey." 33
In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of
petitioner airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but without
appreciable damage. The fact is, nevertheless, that some special species of injury was caused to Dr. Pablo
because petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the time appointed
a breach of its contract of carriage, to be sure with the result that she was unable to read the paper and
make the scientific presentation (consisting of slides, autoradiograms or films, tables and tabulations) that
she had painstakingly labored over, at the prestigious international conference, to attend which she had
traveled hundreds of miles, to her chagrin and embarrassment and the disappointment and annoyance of
the organizers. She felt, not unreasonably, that the invitation for her to participate at the conference,
extended by the Joint FAO/IAEA Division of Atomic Energy in Food and Agriculture of the United Nations,
was a singular honor not only to herself, but to the University of the Philippines and the country as well,
an opportunity to make some sort of impression among her colleagues in that field of scientific activity.
The opportunity to claim this honor or distinction was irretrievably lost to her because of Alitalia's breach
of its contract.
Apart from this, there can be no doubt that Dr. Pablo underwent profound distress and anxiety, which
gradually turned to panic and finally despair, from the time she learned that her suitcases were missing up
to the time when, having gone to Rome, she finally realized that she would no longer be able to take part
in the conference. As she herself put it, she "was really shocked and distraught and confused."

Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the circumstances be
restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage.
She is not, of course, entitled to be compensated for loss or damage to her luggage. As already
mentioned, her baggage was ultimately delivered to her in Manila, tardily but safely. She is however
entitled to nominal damages which, as the law says, is adjudicated in order that a right of the plaintiff,
which has been violated or invaded by the defendant, may be vindicated and recognized, and not for the
purpose of indemnifying the plaintiff for any loss suffered and this Court agrees that the respondent
Court of Appeals correctly set the amount thereof at P40,000.00. As to the purely technical argument that
the award to her of such nominal damages is precluded by her omission to include a specific claim therefor
in her complaint, it suffices to draw attention to her general prayer, following her plea for moral and
exemplary damages and attorney's fees, "for such other and further just and equitable relief in the
premises," which certainly is broad enough to comprehend an application as well for nominal damages.
Besides, petitioner should have realized that the explicit assertion, and proof, that Dr. Pablo's right had
been violated or invaded by it absent any claim for actual or compensatory damages, the prayer thereof
having been voluntarily deleted by Dr. Pablo upon the return to her of her baggage necessarily raised
the issue of nominal damages.
: rd

This Court also agrees that respondent Court of Appeals correctly awarded attorney's fees to Dr. Pablo,
and the amount of P5,000.00 set by it is reasonable in the premises. The law authorizes recovery of
attorney's fees inter alia where, as here, "the defendant's act or omission has compelled the plaintiff to
litigate with third persons or to incur expenses to protect his interest," 34 or "where the court deems it
just and equitable." 35
WHEREFORE, no error being perceived in the challenged decision of the Court of Appeals, it appearing on
the contrary to be entirely in accord with the facts and the law, said decision is hereby AFFIRMED, with
costs against the petitioner.
SO ORDERED.
Cruz, Gancayco, Grio-Aquino and Medialdea, JJ., concur.
Endnotes
1. Teaching such natural science subjects as Botany, Biology and Plant Physiology.
2. Rollo, p. 36.
3. Ibid, reference being made to Exhs. "A-2-a" and "A-2-b".
4. This was on November 6, 1972.
5. Rollo, p. 88.
6. On June 7, 1973 (Rollo, p. 90).
7. Specifically to the Hotel Europa, as indicated by Prof. Pablo (Rollo, pp. 88-89).
8. Rollo, p. 89. The baggage arrived on Nov. 7, 1972; but by that time, Prof Pablo had already left Rome for
Hongkong.
9. Delivery appears to have been effected on October 17, 1973 (Rollo, p. 136).
10. Rollo, p. 43: Record on Appeal, pp. 61-62. The decision was written by Judge Ricardo D. Galano and is dated
February 2, 1975.
11. Its appeal was docketed as AC-G.R. CV No. 59501.
12. Rollo, pp. 35-39. The decision was written for the Second Civil Cases Division by Campos, Jr, J., with whom
concurred Pascual, Camilon and Jurado, JJ.
13. Id., pp. 38-39.
14. Id., pp. 91-92.
15. Id., p. 91.
16. Full title: "Convention for the Unification of Certain Rules Relating to International Carriage by Air signed at
Warsaw, October 12, 1929" (League of Nations Treaty Series), coming into force on Feb. 13, 1933, adhered
to by the Republic of the Philippines on Nov. 9, 1950 with reservation; the Philippines deposited the
Instrument of Adherence with the Polish Government on Nov. 9, 1950; and the Convention entered into force

for the Philippines on Feb. 7, 1951 (Philippine Treaties Index [1946-1982] citing 137 League of Nations
Treaties Series 11). The Warsaw Convention was amended by (1) the Hague Protocol on September 28, 1955
(Id., and United Nations, Treaty Series, Vol. 261, p. 423 and Vol. 266, p. 444), entering into force for the
Philippines on February 28, 1967; (2) the Montreal Agreement in 1966, of which the Philippine Airlines and
Alitalia are signatories; (3) the Guatemala Protocol in 1971 (apparently not adhered to by IATA members);
and (4) the Montreal Protocols (Numbered 3 and 4) (1975) (also apparently not effective among IATA
members).
17. ART. 17.
18. ART. 18 (par. 1), "transportation by air" being defined as "the period during which the baggage or goods are in
charge of the carrier whether in an airport or on board an aircraft, or, in the case of a landing outside an
airport, in any place whatever," but not where said baggage or goods are transported by land, sea or river
outside an airport unless it be in "the performance of a contract for transportation by air for the purpose of
loading, delivery or transshipment (pars. 2 and 3, ART. 18).
19. ART. 19.
20. ART. 24, which also states that with regard to Article 17, the application of the rule is "without prejudice to the
questions as to who are the persons who have the right to bring suit and what are their respective rights."
21. ART. 22, as amended by the Hague Protocol, supra; the Montreal Agreement of 1966 set the limitation of
damages at $75,000 per passenger; the Guatemala Protocol, 1971, boosted the limit to $100,000 per
passenger, liability for baggage was increased to $1,000, and the right to bring suit was expanded.
22. ART. 25.
23. ART. 20 (1). "The carrier is not liable if he proves that he and his agents have taken all necessary measures to
avoid the damage or that it was impossible for him or them to take such measures."
24. Lisi v. Alitalia-Linee Aeree Italiane, 370 F 2d 508 [2nd Cir. 1966] aff'd 390 US 455 [1968], rehearing denied
397 US 939 [1968] and Egan v. Kallsman Instrument Corp., 21 NY 2d 160, 287 NYS 2d 14 [1967]; CERT.
DENIED 390 US 1039 [1968].
25. Northwest Airlines, Inc. v. Cuenca, 14 SCRA 1065 (1965) which inter alia states that the Convention "merely
declares the carrier liable for damages in the enumerated cases, if the conditions therein specified are
present.".
26. Id.
27. Id.
28. 164 SCRA 268, citing Ong Yiu v. C.A. 91 SCRA 223; SEE Burnett v. Trans World Airlines, Inc. (DC NM), 368 F.
Supp. 1152 holding that the airline was not responsible to its passengers for mere mental anguish sustained
as a result of the hijacking, in the absence of physical injuries.
29. SEE KLM Royal Dutch Airlines v. Tuller, 119 App. DC 282, 292 F 2d 775, cert den 368 US 921, 7 L Ed 2d 136,
82 S Ct 243; American Airlines, Inc. v. Ulen, 87 App DC 307, 186 F 2d 529; Goepp v. American Overseas
Airlines, Inc., 281 App Div 105, 117 NYS 2d 276, affd. 305 NY 830, 114 NE 2d 37, cert den 346 US 874, 98 L
Ed 382, 74 S Ct 124.
30. Northwest Airlines, Inc. v. Cuenca, 14 SCRA 1063; Lopez v. Pan Am, 16 SCRA 43.
31. Air France v. Carrascoso, 18 SCRA 155. In Ortigas, Jr. v. Lufthansa German Airlines, 64 SCRA 610 (1975),
plaintiff's seat in the first-class section was given to a Belgian, and consequently plaintiff, who held a firstclass ticket, confirmed and validated, was relegated to a tourist or economy-class seat.
32. Korean Airlines Co., Ltd. v. C.A., 154 SCRA 211; see also, KLM Royal Dutch Airlines v. C.A., 65 SCRA 237.
33. Zulueta v. Pan Am, 43 SCRA 397.
34. Civil Code, ART. 2208, par. (2); see Rivera v. Litum & Co., Inc., 4 SCRA 1072 (1962); Filipino Pipe & Foundry
Corporation v. Central Bank, 23 SCRA 1044 (1968); Ganaban v. Bayle, 30 SCRA 365 (1969); Valenzuela v.
CA., G.R. No. 56168, Dec. 22, 1988.
35. Id., id., par (11); see Civil Aeronautics Administration v. C.A., G.R. No. 51806, Nov. 8, 1988.