I.

International Air Transport

Santos v. Northwest, 210 SCRA 256

EN BANC
[G.R. No. 101538. June 23, 1992.]
AUGUSTO BENEDICTO SANTOS III, represented by his father and
legal guardian, Augusto Benedicto Santos, petitioner, vs.
NORTHWEST ORIENT AIRLINES and COURT OF APPEALS,
respondents.
DECISION
CRUZ, J p:
This case involves the proper interpretation of Article 28(1) of the Warsaw
Convention, reading as follows:
Art. 28. (1) An action for damage must be brought at the option of the
plaintiff, in the territory of one of the High Contracting Parties, either
before the court of the domicile of the carrier or of his principal place of
business, or where he has a place of business through which the contract
has been made, or before the court at the place of destination.
The petitioner is a minor and a resident of the Philippines. Private
respondent Northwest Orient Airlines (NOA) is a foreign corporation with
principal office in Minnesota, U.S.A., and licensed to do business and
maintain a branch office in the Philippines.
On October 21, 1986, the petitioner purchased from NOA a round-trip ticket
in San Francisco, U.S.A., for his flight from San Francisco to Manila via
Tokyo and back. The scheduled departure date from Tokyo was December
20, 1986. No date was specified for his return to San Francisco. 1
On December 19, 1986, the petitioner checked in at the NOA counter in the
San Francisco airport for his scheduled departure to Manila. Despite a
previous confirmation and re-confirmation, he was informed that he had no
reservation for his flight from Tokyo to Manila. He therefore had to be waitlisted.
On March 12, 1987, the petitioner sued NOA for damages in the Regional
Trial Court of Makati. On April 13, 1987, NOA moved to dismiss the
complaint on the ground of lack of jurisdiction. Citing the above-quoted
article, it contended that the complaint could be instituted only in the
territory of one of the High Contracting Parties, before:
1.
the court of the domicile of the carrier;
2.
the court of its principal place of business;
3.
the court where it has a place of business through which the
contract had been made;
4.
the court of the place of destination.
The private respondent contended that the Philippines was not its domicile
nor was this its principal place of business. Neither was the petitioner's
ticket issued in this country nor was his destination Manila but San
Francisco in the United States.

On February 1, 1988, the lower court granted the motion and dismissed
the case.
2 The petitioner appealed to the Court of Appeals, which
affirmed the decision of the lower court.
3 On June 26, 1991, the
petitioner filed a motion for reconsideration, but the same was denied. 4
The petitioner then came to this Court, raising substantially the same
issues it submitted in the Court of Appeals.
The assignment of errors may be grouped into two major issues, viz:
(1)
the constitutionality of Article 28(1) of the Warsaw Convention; and
(2)
the jurisdiction of Philippine courts over the case.
The petitioner also invokes Article 24 of the Civil Code on the protection of
minors.
I.
THE ISSUE OF CONSTITUTIONALITY
A.
The petitioner claims that the lower court erred in not ruling that
Article 28(1) of the Warsaw Convention violates the constitutional
guarantees of due process and equal protection.
The Republic of the Philippines is a party to the Convention for the
Unification of Certain Rules Relating to International Transportation by Air,
otherwise known as the Warsaw Convention. It took effect on February 13,
1933. The Convention was concurred in by the Senate, through its
Resolution No. 19, on May 16, 1950. The Philippine instrument of accession
was signed by President Elpidio Quirino on October 13, 1950, and was
deposited with the Polish government on November 9, 1950. The
Convention became applicable to the Philippines on February 9, 1951. On
September 23, 1955, President Ramon Magsaysay issued Proclamation No.
201, declaring our formal adherence thereto, "to the end that the same
and every article and clause thereof may be observed and fulfilled in good
faith by the Republic of the Philippines and the citizens thereof." 5
The Convention is thus a treaty commitment voluntarily assumed by the
Philippine government and, as such, has the force and effect of law in this
country.
The petitioner contends that Article 28(1) cannot be applied in the present
case because it is unconstitutional. He argues that there is no substantial
distinction between a person who purchases a ticket in Manila and a
person who purchases his ticket in San Francisco. The classification of the
places in which actions for damages may be brought is arbitrary and
irrational and thus violates the due process and equal protection clauses.
It is well-settled that courts will assume jurisdiction over a constitutional
question only if it is shown that the essential requisites of a judicial inquiry
into such a question are first satisfied. Thus, there must be an actual case
or controversy involving a conflict of legal rights susceptible of judicial
determination; the constitutional question must have been opportunely
raised by the proper party and the resolution of the question is
unavoidably necessary to the decision of the case itself. 6
Courts generally avoid having to decide constitutional question. This
attitude is based on the doctrine of separation of powers, which enjoins
upon the departments of the government a becoming respect for each
other's acts.
The treaty which is the subject matter of this petition was a joint
legislative-executive act. The presumption is that it was first carefully

studied and determined to be constitutional before it was adopted and

given the force of law in this country.
The petitioner's allegations are not convincing enough to overcome this
presumption. Apparently, the Convention considered the four places
designated in Article 28 the most convenient forums for the litigation of
any claim that may arise between the airline and its passenger, as
distinguished from all other places. At any rate, we agree with the
respondent court that this case can be decided on other grounds without
the necessity of resolving the constitutional issue.
B.
The petitioner claims that the lower court erred in not ruling that
Art. 28(1) of the Warsaw Convention is inapplicable because of a
fundamental change in the circumstances that served as its basis.
The petitioner goes at great lengths to show that the provisions in the
Convention were intended to protect airline companies under "the
conditions prevailing then and which have long ceased to exist." He argues
that in view of the significant developments in the airline industry through
the years, the treaty has become irrelevant. Hence, to the extent that it
has lost its basis for approval, it has become unconstitutional.
The petitioner is invoking the doctrine of rebus sic stantibus. According to
Jessup, "this doctrine constitutes an attempt to formulate a legal principle
which would justify non-performance of a treaty obligation if the conditions
with relation to which the parties contracted have changed so materially
and so unexpectedly as to create a situation in which the exaction of
performance would be unreasonable." 7 The key element of this doctrine
is the vital change in the condition of the contracting parties that they
could not have foreseen at the time the treaty was concluded.
The Court notes in this connection the following observation made in Day
v. Trans World Airlines, Inc.: 8
The Warsaw drafters wished to create a system of liability rules that would
cover all the hazards of air travel . . . The Warsaw delegates knew that, in
the years to come, civil aviation would change in ways that they could not
foresee. They wished to design a system of air law that would be both
durable and flexible enough to keep pace with these changes . . . The everchanging needs of the system of civil aviation can be served within the
framework they created.
It is true that at the time the Warsaw Convention was drafted, the airline
industry was still in its infancy. However, that circumstance alone is not
sufficient justification for the rejection of the treaty at this time. The
changes recited by the petitioner were, realistically, not entirely
unforeseen although they were expected in a general sense only. In fact,
the Convention itself, anticipating such developments, contains the
following significant provision:
Article 41.
Any High Contracting Party shall be entitled not earlier
than two years after the coming into force of this convention to call for the
assembling of a new international conference in order to consider any
improvements which may be made in this convention. To this end, it will
communicate with the Government of the French Republic which will take
the necessary measures to make preparations for such conference.
But the more important consideration is that the treaty has not been
rejected by the Philippine government. The doctrine of rebus sic stantibus
does not operate automatically to render the treaty inoperative. here is a

necessity for a formal act of rejection, usually made by the head of State,
with a statement of the reasons why compliance with the treaty is no
longer required.
In lieu thereof, the treaty may be denounced even without an expressed
justification for this action. Such denunciation is authorized under its
Article 39, viz: cdrep
Article 39. (1) Any one of the High Contracting Parties may denounce this
convention by a notification addressed to the Government of the Republic
of Poland, which shall at once inform the Government of each of the High
Contracting Parties.
(2)
Denunciation shall take effect six months after the notification of
denunciation, and shall operate only as regards the party which shall have
proceeded to denunciation.
Obviously, rejection of the treaty, whether on the ground of rebus sic
stantibus or pursuant to Article 39, is not a function of the courts but of the
other branches of government. This is a political act. The conclusion and
renunciation of treaties is the prerogative of the political departments and
may not be usurped by the judiciary. The courts are concerned only with
the interpretation and application of laws and treaties in force and not with
their wisdom or efficacy.
C.
The petitioner claims that the lower court erred in ruling that the
plaintiff must sue in the United States, because this would deny him the
right to access to our courts.
The petitioner alleges that the expenses and difficulties he will incur in
filing a suit in the United States would constitute a constructive denial of
his right to access to our courts for the protection of his rights. He would
consequently be deprived of this vital guaranty as embodied in the Bill of
Rights.
Obviously, the constitutional guaranty of access to courts refers only to
courts with appropriate jurisdiction as defined by law. It does not mean
that a person can go to any court for redress of his grievances regardless
of the nature or value of his claim. If the petitioner is barred from filing his
complaint before our courts, it is because they are not vested with the
appropriate jurisdiction under the Warsaw Convention, which is part of the
law of our land.
II.
THE ISSUE OF JURISDICTION
A.
The petitioner claims that the lower court erred in not ruling that
Article 28(1) of the Warsaw Convention is a rule merely of venue and was
waived by defendant when it did not move to dismiss on the ground of
improper venue.
By its own terms. the Convention applies to all international transportation
of persons performed by aircraft for hire.
International transportation is defined in paragraph (2) of Article 1 as
follows:
(2)
For the purposes of this convention, the expression "international
transportation" shall mean any transportation in which, according to the
contract made by the parties, the place of departure and the place of
destination, whether or not there be a break in the transportation or a
transshipment, are situated [either] within the territories of two High
Contracting Parties . . .

Whether the transportation is "international" is determined by the contract

of the parties, which in the case of passengers is the ticket. When the
contract of carriage provides for the transportation of the passenger
between certain designated terminals "within the territories of two High
Contracting Parties," the provisions of the Convention automatically apply
and exclusively govern the rights and liabilities of the airline and its
passenger.
Since the flight involved in the case at bar is international, the same being
from the United States to the Philippines and back to the United States, it
is subject to the provisions of the Warsaw Convention, including Article
28(1), which enumerates the four places where an action for damages may
be brought.
Whether Article 28(1) refers to jurisdiction or only to venue is a question
over which authorities are sharply divided. While the petitioner cites
several cases holding that Article 28(1) refers to venue rather than
jurisdiction,
9 there are later cases cited by the private respondent
supporting the conclusion that the provision is jurisdictional. 10
Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be
conferred by consent or waiver upon a court which otherwise would have
no jurisdiction over the subject-matter of an action; but the venue of an
action as fixed by statute may be changed by the consent of the parties
and an objection that the plaintiff brought his suit in the wrong county may
be waived by the failure of the defendant to make a timely objection. In
either case, the court may render a valid judgment. Rules as to jurisdiction
can never be left to the consent or agreement of the parties, whether or
not a prohibition exists against their alteration. 11
A number of reasons tends to support the characterization of Article 28(1)
as a jurisdiction and not a venue provision. First, the wording of Article 32,
which indicates the places where the action for damage "must" be brought,
underscores the mandatory nature of Article 28(1). Second, this
characterization is consistent with one of the objectives of the Convention,
which is to "regulate in a uniform manner the conditions of international
transportation by air." Third, the Convention does not contain any provision
prescribing rules of jurisdiction other than Article 28(1), which means that
the phrase "rules as to jurisdiction" used in Article 32 must refer only to
Article 28(1). In fact, the last sentence of Article 32 specifically deals with
the exclusive enumeration in Article 28(1) as "jurisdictions," which, as
such, cannot be left to the will of the parties regardless of the time when
the damage occurred.
This issue was analyzed in the leading case of Smith v. Canadian Pacific
Airways, Ltd., 12 where it was held:
. . . Of more, but still incomplete, assistance is the wording of Article 28(2),
especially when considered in the light of Article 32. Article 28(2) provides
that "questions of procedure shall be governed by the law of the court to
which the case is submitted" (Emphasis supplied). Section (2) thus may be
read to leave for domestic decision questions regarding the suitability and
location of a particular Warsaw Convention case."
In other words, where the matter is governed by the Warsaw Convention,
jurisdiction takes on a dual concept. Jurisdiction in the international sense
must be established in accordance with Article 28(1) of the Warsaw
Convention, following which the jurisdiction of a particular court must be

established pursuant to the applicable domestic law. Only after the

question of which court has jurisdiction is determined will the issue of
venue be taken up. This second question shall be governed by the law of
the court to which the case is submitted.
The petitioner submits that since Article 32 state that the parties are
precluded "before the damages occurred" from amending the rules of
Article 28(1) as to the place where the action may be brought, it would
follow that the Warsaw Convention was not intended to preclude them
from doing so "after the damages occurred."
Article 32 provides:
Article 32.
Any clause contained in the contract and all special
agreements entered into before the damage occurred by which the parties
purport to infringe the rules laid down by this convention, whether by
deciding the law to be applied, or by altering the rules as to jurisdiction,
shall be null and void. Nevertheless for the transportation of goods,
arbitration clauses shall be allowed, subject to this convention, if the
arbitration is to take place within one of the jurisdictions referred to in the
first paragraph of Article 28.
His point is that since the requirements of Article 28(1) can be waived
"after the damages (shall have) occurred," the article should be regarded
as possessing the character of a "venue" and not of a "jurisdiction"
provision. Hence, in moving to dismiss on the ground of lack of jurisdiction,
the private respondent has waived improper venue as a ground to dismiss.
The foregoing examination of Article 28(1) in relation to Article 32 does not
support this conclusion. In any event, we agree that even granting
arguendo that Article 28(1) is a venue and not a jurisdictional provision,
dismissal of the case was still in order. The respondent court was correct in
affirming the ruling of the trial court on this matter, thus:
Santos' claim that NOA waived venue as a ground of its motion to dismiss
is not correct. True it is that NOA averred in its MOTION TO DISMISS that
the ground thereof is "the Court has no subject matter jurisdiction to
entertain the Complaint" which SANTOS considers as equivalent to "lack of
jurisdiction over the subject matter . . ." However, the gist of NOA's
argument in its motion is that the Philippines is not the proper place where
SANTOS could file the action meaning that the venue of the action is
improperly laid. Even assuming then that the specified ground of the
motion is erroneous, the fact is the proper ground of the motion
improper venue has been discussed therein.
Waiver cannot be lightly inferred. In case of doubt, it must be resolved in
favor of non-waiver if there are special circumstances justifying this
conclusion, as in the petition at bar. As we observed in Javier vs.
Intermediate Court of Appeals: 13
Legally, of course, the lack of proper venue was deemed waived by the
petitioners when they failed to invoke it in their original motion to dismiss.
Even so, the motivation of the private respondent should have been taken
into account by both the trial judge and the respondent court in arriving at
their decisions.
The petitioner also invokes KLM Royal Dutch Airlines v. RTC, 14 a decision
of our Court of Appeals, where it was held that Article 28(1) is a venue
provision. However, the private respondent avers that this was in effect
reversed by the case of Aranas v. United Airlines,
15 where the same

court held that Article 28(1) is a jurisdictional provision. Neither of these

cases is finding on this Court, of course, nor was either of them appealed
to us. Nevertheless, we here express our own preference for the later case
of Aranas insofar as its pronouncements on jurisdiction conform to the
judgment we now make in this petition.
B.
The petitioner claims that the lower court erred in not ruling that
under Article 28(1) of the Warsaw Convention, this case was properly filed
in the Philippines, because Manila was the destination of the plaintiff.
The petitioner contends that the facts of this case are analogous to those
in Aanestad v. Air Canada. 16 In that case, Mrs. Silverberg purchased a
round-trip ticket from Montreal to Los Angeles and back to Montreal. The
date and time of departure were specified but not of the return flight. The
plane crashed while en route from Montreal to Los Angeles, killing Mrs.
Silverberg. Her administratrix filed an action for damages against Air
Canada in the U.S. District Court of California. The defendant moved to
dismiss for lack of jurisdiction but the motion was denied thus:
. . . It is evident that the contract entered into between Air Canada and
Mrs. Silverberg as evidenced by the ticket booklets and the Flight Coupon
No. 1, was a contract for Air Canada to carry Mrs. Silverberg to Log Angeles
on a certain flight, a certain time and a certain class, but that the time for
her to return remained completely in her power. Coupon No. 2 was only a
continuing offer by Air Canada to give her a ticket to return to Montreal
between certain dates . . .
The only conclusion that. can be reached then, is that "the place of
destination" as used in the Warsaw Convention is considered by both the
Canadian C.T.C. and the United States C.A.B. to describe at least two
"places of destination," viz., the "place of destination" of a particular flight
either an "outward destination" from the "point of origin" or from the
"outward point of destination" to any place in Canada.
Thus the place of destination under Art. 28 and Art. 1 of the Warsaw
Convention of the flight on which Mrs. Silverberg was killed, was Los
Angeles according to the ticket, which was the contract between the
parties and the suit is properly filed in this Court which has jurisdiction.
The petitioner avers that the present case falls squarely under the above
ruling because the date and time of his return flight to San Francisco were,
as in the Aanestad case, also left open: Consequently, Manila and not San
Francisco should be considered the petitioner's destination.
The private respondent for its part invokes the ruling in Butz v. British
Airways, 17 where the United States District Court (Eastern District of
Pennsylvania) said:
. . . Although the authorities which addressed this precise issue are not
extensive, both the cases and the commentators are almost unanimous in
concluding that the "place of destination" referred to in the Warsaw
Convention "in a trip consisting of several parts . . . is the ultimate
destination that is accorded treaty jurisdiction." . . .
But apart from that distinguishing feature, I cannot agree with the Court's
analysis in Aanestad; whether the return portion of the ticket is
characterized as an option or a contract, the carrier was legally bound to
transport the passenger back to the place of origin within the prescribed
time and the passenger for her part agreed to pay the fare and, in fact, did
pay the fare. Thus there was mutuality of obligation and a binding contract

of carriage. The fact that the passenger could forego her rights under the
contract does not make it any less a binding contract. Certainly, if the
parties did not contemplate the return leg of the journey, the passenger
would not have paid for it and the carrier would not have issued a round
trip ticket.
We agree with the latter case. The place of destination, within the meaning
of the Warsaw Convention, is determined by the terms of the contract of
carriage or, specifically in this case, the ticket between the passenger and
the carrier. Examination of the petitioner's ticket shows that his ultimate
destination is San Francisco. Although the date of the return flight was left
open, the contract of carriage between the parties indicates that NOA was
bound to transport the petitioner to San Francisco from Manila. Manila
should therefore be considered merely an agreed stopping place and not
the destination.
The petitioner submits that the Butz case could not have overruled the
Aanestad case because these decisions are from different jurisdictions. But
that is neither here nor there. In fact, neither of these cases is controlling
on this Court. If we have preferred the Butz case, it is because, exercising
our own freedom of choice, we have decided that it represents the better,
and correct, interpretation of Article 28(1).
Article 1(2) also draws a distinction between a "destination" and an
"agreed stopping place." It is the "destination" and not an "agreed stopping
place" that controls for purposes of ascertaining jurisdiction under the
Convention.
The contract is a single undivided operation, beginning with the place of
departure and ending with the ultimate destination. The use of the singular
in this expression indicates the understanding of the parties to the
Convention that every contract of carriage has one place of departure and
one place of destination. An intermediate place where the carriage may be
broken is not regarded he a "place of destination."
C.
The petitioner claims that the lower court erred in not ruling that
under Art. 28 (1) of the Warsaw Convention, this case was properly filed in
the Philippines because the defendant has its domicile in the Philippines.
The petitioner argues that the Warsaw Convention was originally written in
French and that in interpreting its provisions, American courts have taken
the broad view that the French legal meaning must govern. 18 In French,
he says, the "domicile" of the carrier means every place where it has a
branch office.
The private respondent notes, however, that in Compagnie Nationale Air
France vs. Giliberto, 19 it was held:
The plaintiffs' first contention is that Air France is domiciled in the United
States. They say that the domicile of a corporation includes any country
where the airline carries on its business on "a regular and substantial
basis," and that the United States qualifies under such definition. The
meaning of domicile cannot, however, be so extended. The domicile of a
corporation is customarily regarded as the place where it is incorporated,
and the courts have given the meaning to the term as it is used in article
28(1) of the Convention. (See Smith v. Canadian Pacific Airways, Ltd. (2d
Cir. 1971), 452 F2d 798, 802; Nudo v. Societe Anonyme Belge d'
Exploitation de la Navigation Aerienne Sabena Belgian World Airlines (E.D.
pa. 1962), 207 F. Supp. 191; Karfunkel v. Compagnie Nationale Air France

(S.D.N.Y. 1977), 427 F. Suppl. 971, 974). Moreover, the structure of article
28(1), viewed as a whole, is also incompatible with the plaintiffs' claim. The
article, in stating that places of business are among the bases of the
jurisdiction, sets out two places where an action for damages may be
brought: the country where the carrier's principal place of business is
located, and the country in which it has a place of business through which
the particular contract in question was made, that is, where the ticket was
bought. Adopting the plaintiffs' theory would at a minimum blur these
carefully drawn distinctions by creating a third intermediate category. It
would obviously introduce uncertainty into litigation under the article
because of the necessity of having to determine, and without standards or
criteria, whether the amount of business done by a carrier in a particular
country was "regular" and "substantial." The plaintiff's request to adopt
this basis of jurisdiction is in effect a request to create a new jurisdictional
standard for the Convention.
Furthermore, it was argued in another case 20 that:
. . . In arriving at an interpretation of a treaty whose sole official language
is French, are we bound to apply French law? . . . We think this question
and the underlying choice of law issue warrant some discussion . . . We do
not think this statement can be regarded as a conclusion that internal
French law is to be "applied" in the choice of law sense, to determine the
meaning and scope of the Conventio's terms. Of course, French legal usage
must be considered in arriving at an accurate English translation of the
French. But when an accurate English translation is made and agreed
upon, as here, the inquiry not meaning does not then revert to a quest for
a past or present French law to be "applied" for revelation of the proper
scope of the terms. It does not follow from the fact that the treaty is
written in French that in interpreting it, we are forever chained to French
law, either as it existed when the treaty was written or in its present state
of development. There is no suggestion in the treaty that French law was
intended to govern the meaning of Warsaw's terms, nor have we found any
indication to this effect in its legislative history or from our study of its
application and interpretation by other courts. Indeed, analysis of the
cases indicates that the courts, in interpreting and applying the Warsaw
Convention, have not considered themselves bound to apply French law
simply because the Convention is written in French.
We agree with these rulings.
Notably, the domicile of the carrier is only one of the places where the
complaint is allowed to be filed under Article 28(1). By specifying the three
other places, to wit, the principal place of business of the carrier, its place
of business where the contract was made, and the place of destination, the
article clearly meant that these three other places were not comprehended
in the term "domicile."
D.
The petitioner claims that the lower court erred in not ruling that
Art. 28(1) of the Warsaw Convention does not apply to actions based on
tort.
The petitioner alleges that the gravamen of the complaint is that private
respondent acted arbitrarily and in bad faith, discriminated against the
petitioner, and committed a willful misconduct because it canceled his
confirmed reservation and gave his reserved seat to someone who had no
better right to it. In short, the private respondent committed a tort.

Such allegation, he submits, removes the present case from the coverage
of the Warsaw Convention. He argues that in at least two American cases,
21 it was held that Article 28(1) of the Warsaw Convention does not apply
if the action is based on tort.
This position is negated by Husserl v. Swiss Air Transport Company, 22
where the article in question was interpreted thus:
. . . Assuming for the present that plaintiff's claim is "covered" by Article
17, Article 24 clearly excludes any relief not provided for in the Convention
as modified by the Montreal Agreement. It does not, however, limit the
kind of cause of action on which the relief may be founded; rather it
provides that any action based on the injuries specified in Article 17
"however founded," i.e., regardless of the type of action on which relief is
founded, can only be brought subject to the conditions and limitations
established by the Warsaw System. Presumably, the reason for the use of
the phrase "however founded," is two-fold: to accommodate all of the
multifarious bases on which a claim might be founded in different
countries, whether under code law or common law, whether under contract
or tort, etc.; and to include all bases on which a claim seeking relief for an
injury might be founded in any one country. In other words, if the injury
occurs as described in Article 17, any relief available is subject to the
conditions and limitations established by the Warsaw System, regardless of
the particular cause of action which forms the basis on which a plaintiff
could seek relief . . .
xxx
xxx
xxx
The private respondent correctly contends that the allegation of willful
misconduct resulting in a tort is insufficient to exclude the case from the
comprehension of the Warsaw Convention. The petitioner has apparently
misconstrued the import of Article 25(1) of the Convention, which reads as
follows:
Article 25 (1). The carrier shall not be entitled to avail himself of the
provisions of this Convention which exclude or limit his liability, if the
damage is caused by his willful misconduct or by such default on his part
as, in accordance which the law of the court to which the case is
submitted, is considered to be equivalent to willful misconduct.
It is understood under this article that the court called upon to determine
the applicability of the limitation provision must first be vested with the
appropriate jurisdiction. Article 28(1) is the provision in the Convention
which defines that jurisdiction. Article 22 23 merely fixes the monetary
ceiling for the liability of the carrier in cases covered by the Convention. If
the carrier is indeed guilty of willful misconduct, it can avail itself of the
limitations set forth in this article. But this can be done only if the action
has first been commenced properly under the rules on jurisdiction set forth
in Article 28 (1).
III.
THE ISSUE OF PROTECTION TO MINORS
The petitioner calls our attention to Article 24 of the Civil Code, which
states:
Art. 24. In all contractual property or other relations, when one of the
parties is at a disadvantage on account of his moral dependence,
ignorance, indigence, mental weakness, tender age or other handicap, the
courts must be vigilant for his protection.

Application of this article to the present case is misplaced. The above

provision assumes that the court is vested with jurisdiction to rule in favor
of the disadvantaged minor. As already explained, such jurisdiction is
absent in the case at bar.
CONCLUSION
A number of countries have signified their concern over the problem of
citizens being denied access to their own courts because of the restrictive
provision of Article 28(1) of the Warsaw Convention. Among these is the
United States, which has proposed an amendment that would enable the
passenger to sue in his own domicile if the carrier does business in that
jurisdiction. The reason for this proposal is explained thus:
In the event a US citizen temporarily residing abroad purchases a Rome to
New York to Rome ticket on a foreign air carrier which is generally subject
to the jurisdiction of the US, Article 28 would prevent that person from
suing the carrier in the US in a "Warsaw Case" even though such a suit
could be brought in the absence of the Convention.
The proposal was incorporated in the Guatemala Protocol amending the
Warsaw Convention, which was adopted at Guatemala City on March 8,
1971. 24 But it is still ineffective because it has not yet been ratified by
the required minimum number of contracting parties. Pending such
ratification, the petitioner will still have to file his complaint only in any of
the four places designated by Article 28(1) of the Warsaw Convention.
The proposed amendment bolsters the ruling of this Court that a citizen
does not necessarily have the right to sue in his own courts simply because
the defendant airline has a place of business in his country. LibLex
The Court can only sympathize with the petitioner, who must prosecute his
claims in the United States rather than in his own country at less
inconvenience. But we are unable to grant him the relief he seeks because
we are limited by the provisions of the Warsaw Convention which continues
to bind us. It may not be amiss to observe at this point that the mere fact
that he will have to litigate in the American courts does not necessarily
mean he will litigate in vain. The judicial system of that country is known
for its sense of fairness and, generally, its strict adherence to the rule of
law.
WHEREFORE, the petition is DENIED, with costs against the petitioner. It is
so ordered.
Narvasa, C .J ., Gutierrez, Jr., Paras, Feliciano, Padilla, Bidin, Grio-Aquino,
Medialdea, Regalado, Davide, Jr., Romero, Nocon and Bellosillo, JJ ., concur.

A.

When applicable, Art. 1(1)

B. Liabilities under the Convention, Arts. 17, 18, 19

Northwest v. Cuenca, 14 SCRA 1063
EN BANC
[G.R. No. L-22425. August 31, 1965.]
NORTHWEST AIRLINES, INC., petitioner, vs. NICOLAS L. CUENCA
and COURT OF APPEALS (SPECIAL SIXTH DIVISION), respondents.
Ross, Selph & Carrascoso for petitioner.
Bengzon, Villegas & Zarraga for respondents.
SYLLABUS
1.
AIR CARRIERS; LIABILITY UNDER THE WARSAW CONVENTION OF
1929 AND FOR OTHER BREACHES OF CONTRACT. Articles 17, 18 and 19
of the Warsaw Convention of 1929 merely declare the airlines liable for
damage in the cases enumerated therein, if the conditions specified are
present. Neither the provisions of said articles nor others regulate or
exclude liability for other breaches of contract by the air carriers.
2.
ID.; ID.; ID.; LIABILITY FOR NOMINAL AND EXEMPLARY DAMAGES;
CASE AT BAR. Respondent boarded petitioner's plane in Manila with a
first class ticket to Tokyo. Upon arrival at Okinawa, an agent of petitioner

rudely compelled him, in the presence of other passengers, to move to the

tourist class. Respondent protested, revealing that he was traveling in his
official capacity as delegate of the Republic of the Philippines to a
conference in Tokyo. In order to reach the conference on time, respondent
obeyed. Held: Having been given first class accommodation as he took
petitioner's plane in Manila, respondent was entitled to believe that this
was a confirmation of his first class reservation and that he would keep the
same until his ultimate destination, Tokyo. Since the offense had been
committed with full knowledge of the fact that respondent was an official
representative of the Republic of the Philippines, the sum of P20,000.00
awarded as damages may well be considered as merely nominal. At any
rate, considering that petitioners agent had acted in a wanton, reckless
and oppressive manner, said award may, also, be considered as one for
exemplary damages.
DECISION
CONCEPCION, J p:
This is an action for damages for alleged breach of contract. After
appropriate proceedings the Court of First Instance of Manila, in which the
case was originally filed, rendered judgment sentencing defendant
Northwest Airlines, Inc., hereinafter referred to as petitioner to pay to
plaintiff Cuenca hereinafter referred to as respondent "the sum of
P20,000 as moral damages, together with the sum of P5,000 as exemplary
damages, with legal interest thereon from the date of the filing of the
complaint" December 12, 1959 "until fully paid, plus the further sum
of P2,000 as attorney's fees and expenses of litigation". On appeal taken
by petitioner, said decision was affirmed by the Court of Appeals, except as
to the P50,000.00 exemplary damages, which was eliminated, and the
P20,000.00 award for moral damages, which was converted into nominal
damages. The case is now before us on petition for review by certiorari
filed by petitioner, upon the ground that the lower court has erred: (1) in
holding that the Warsaw Convention of October 12, 1929, relative to
transportation by air is not in force in the Philippines; (2) in not holding that
respondent has no cause of action; and (3) in awarding P20,000 as nominal
damages.
We deem it unnecessary to pass upon the first assignment of error because
the same is the basis of the second assignment of error, and the latter is
devoid of merit, even if we assumed the former to be well taken. Indeed,
the second assignment of error is predicated upon Articles 17, 18 and 19 of
said Convention, reading:
"ART. 17.
The carrier shall be liable for damage sustained in the
event of the death or wounding of a passenger or any other bodily injury

suffered by a passenger if the accident which caused the damage so

sustained took place on board the aircraft or in the course of any of the
operations of embarking or disembarking.
"ART. 18.
(1)
The carrier shall be liable for damage sustained in
the event of the destruction or loss of, or of damage to, any checked
baggage, or any goods, if the occurrence which caused the damage so
sustained took place during the transportation by air.
"(2)
The transportation by air within the meaning of the preceding
paragraph shall comprise the period during which the baggage or goods
are in charge of the carrier, whether in an airport or on board an aircraft,
or, in the case of a landing outside an airport, in any place whatsoever.
"(3)
The period of the transportation by air shall not extend to any
transportation by land, by sea, or by river performed outside an airport. If,
however, such transportation takes place in the performance of a contract
for transportation by air, for the purpose of loading, delivery, or
transshipment, any damage is presumed, subject to proof to the contrary,
to have been the result of an event which took place during the
transportation by air.
"ART. 19.
The carrier shall be liable for damage occasioned by delay
in the transportation by air of passengers, baggage, or goods."
Petitioner argues that pursuant to these provisions, an air "carrier is liable
only" in the event of death of a passenger or injury suffered by him, or of
destruction or loss of, or damage to any checked baggage or any goods, or
of delay in the transportation by air of passengers, baggage or goods. This
pretense is not borne out by the language of said Articles. The same
merely declare the carrier liable for damages in the enumerated cases, if
the conditions therein specified are present. Neither said provisions nor
others in the aforementioned Convention regulate or exclude liability for
other breaches of contract by carrier. Under petitioner's theory, an air
carrier would be exempt from any liability for damages in the event of its
absolute refusal, in bad faith, to comply with a contract of carriage, which
is absurd.
The third assignment of error is based upon Medina vs. Cresencia (52 Off.
Gaz. 4606), and Quijano vs. Philippine Air Lines (CA-G.R. No. 21804).
Neither case is, however, in point, aside from the fact that the latter is not
controlling upon us. In the first case, this Court eliminated a P10,000 award
for nominal damages, because the aggrieved party had already been
awarded P6,000 as compensatory damages, P30,000 as moral damages
and P10,000 as exemplary damages, and "nominal damages cannot coexist with compensatory damages". In the case at bar, the Court of
Appeals has adjudicated no such compensatory, moral and exemplary
damages to respondent herein.
Moreover, there are special reasons why the P20,000.00 award in favor of
respondent herein is justified, even if said award were characterized as

nominal damages. When his contract of carriage was violated by the

petitioner, respondent held the office of Commissioner of Public Highways
of the Republic of the Philippines. Having boarded petitioner's plane in
Manila with a first class ticket to Tokyo, he was, upon arrival at Okinawa,
transferred to the tourist class compartment. Although he revealed that he
was traveling in his official capacity as official delegate of the Republic to a
conference in Tokyo, an agent of petitioner rudely compelled him, in the
presence of other passengers, to move, over his objection, to the tourist
class, under threat of otherwise leaving him in Okinawa. In order to reach
the conference on time, respondent had no choice but to obey.
It is true that said ticket was marked "W/L", but respondent's attention was
not called thereto. Much less was he advised that "W/L" meant "wait
listed". Upon the other hand, having paid the first class fare in full and
having been given first class accommodation as he took petitioner's plane
in Manila, respondent was entitled to believe that this was a confirmation
of his first class reservation and that he would keep the same until his
ultimate destination, Tokyo. Then, too, petitioner has not tried to explain or
even alleged that the person to whom respondent's first class seat was
given had a better right thereto. In other words, since the offense had been
committed with full knowledge of the fact that respondent was an official
representative of the Republic of the Philippines, the sum of P20,000
awarded as damages may well be considered as merely nominal. At any
rate, considering that petitioner's agent had acted in a wanton, reckless
and oppressive manner, said award may, also, be considered as one for
exemplary damages.
WHEREFORE, the decision appealed from is hereby affirmed, with costs
against the petitioner. It is so ordered.
Bengzon, C.J., Bautista Angelo, Reyes, J.B.L., Dizon, Regala, Makalintal and
Zaldivar, JJ., concur.
Bengzon, J.P., took no part.
Barrera, J., is on leave.

Alitalia v. IAC, 192 SCRA 10

FIRST DIVISION
[G.R. No. 71929. December 4, 1990.]
ALITALIA, petitioner, vs. INTERMEDIATE APPELLATE COURT and
FELIPA E. PABLO, respondents.
Santiago & Santiago for petitioner.
Alfredo L. Bentulan for private respondent.
DECISION
NARVASA, J p:
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. prcd
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. LLjur
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. cdphil
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. cdrep
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.

DECISION
CORTES, J p:

C. Limitation on Liability, Art 22

Pan Am v. IAC, 164 SCRA 268
THIRD DIVISION
[G.R. No. 70462. August 11, 1988.]
PAN
AMERICAN
WORLD
AIRWAYS,
INC.,
petitioner,
vs.
INTERMEDIATE APPELLATE COURT, RENE V. PANGAN, SOTANG
BASTOS PRODUCTIONS and ARCHER PRODUCTIONS, respondents.
Guerrero & Torres for petitioner.
Jose B. Layug for private respondents.
SYLLABUS
1.
WARSAW CONVENTION; CIVIL LAW; ACTUAL DAMAGES; LIABILITY
OF AIRLINE CARRIER. On the basis of the stipulations printed at the back
of the Airline ticket, specifically referring to the applicability of the Warsaw
convention the airline carrier's liability for the lost baggage of private
respondent Pangan is limited to $20.00 per kilo or $600.00, as stipulated at
the back of the ticket as the latter did not declare a higher value for his
baggage and pay the corresponding additional charges, the case of Ong
Yiu v. Court of Appeals (G.R. No. L-40597, June 29, 1979, 91 SCRA 223) is
squarely applicable to the instant case.
2.
REMEDIAL LAW; EVIDENCE; CONCLUSION AND FINDINGS OF THE
TRIAL COURT AND THE COURT OF APPEALS, REVERSED AND SET ASIDE.
The Court set aside the decision of the trial court and affirmed by the Court
of Appeals, awarding private respondent's damages as for and for lost
profits when their contracts to show the films in Guam and San Francisco,
California were cancelled. Applying the ruling in Mendoza v. Philippine
Airlines, Inc. (90 Phil. 836), petitioner cannot be held liable for the
cancellation of respondents' contracts in the absence of showing that
petitioner's attention was called to the special circumstances requiring
prompt delivery of the respondent's luggage on or before a certain date.

Before the Court is a petition filed by an international air carrier seeking to

limit its liability for lost baggage, containing promotional and advertising
materials for films to be exhibited in Guam and the U.S.A., clutch bags,
barong tagalogs and personal belongings, to the amount specified in the
airline ticket absent a declaration of a higher valuation and the payment of
additional charges. LLjur
The undisputed facts of the case, as found by the trial court and adopted
by the appellate court, are as follows:
On April 25, 1978, plaintiff Rene V. Pangan, president and general manager
of the plaintiffs Sotang Bastos and Archer Productions, while in San
Francisco, California and Primo Quesada of Prime Films, San Francisco,
California, entered into an agreement (Exh. A) whereby the former, for and
in consideration of the amount of US $2,500.00 per picture, bound himself
to supply the latter with three films. 'Ang Mabait, Masungit at ang Pangit,'
'Big Happening with Chikiting and Iking,' and 'Kambal Dragon' for
exhibition in the United States. It was also their agreement that plaintiffs
would provide the necessary promotional and advertising materials for said
films on or before May 30, 1978.
On his way home to the Philippines, plaintiff Pangan visited Guam where he
contacted Leo Slutchnick of the Hafa Adai Organization. Plaintiff Pangan
likewise entered into a verbal agreement with Slutchnick for the exhibition
of two of the films above-mentioned at the Hafa Adai Theater in Guam on
May 30, 1978 for the consideration of P7,000.00 per picture (p. 11, tsn,
June 20, 1979). Plaintiff Pangan undertook to provide the necessary
promotional and advertising materials for said films on or before the
exhibition date on May 30, 1978.
By virtue of the above agreements, plaintiff Pangan caused the preparation
of the requisite promotional handbills and still pictures for which he paid
the total sum of P12,900.00 (Exhs. B, B-1, C and C-1). Likewise in
preparation for his trip abroad to comply with his contracts, plaintiff
Pangan purchased fourteen clutch bags, four capiz lamps and four barong
tagalog, with a total value of P4,400.00 (Exhs. D, D-1, E, and F).
On May 18, 1978, plaintiff Pangan obtained from defendant Pan Am's
Manila Office, through the Your Travel Guide, an economy class airplane
ticket with No. 0269207406324 (Exh. G) for passage from Manila to Guam
on defendant's Flight No. 842 of May 27, 1978, upon payment by said
plaintiff of the regular fare. The Your Travel Guide is a tour and travel office
owned and managed by plaintiff's witness Mila de la Rama.
On May 27, 1978, two hours before departure time plaintiff Pangan was at
the defendant's ticket counter at the Manila International Airport and
presented his ticket and checked in his two luggages, for which he was
given baggage claim tickets Nos. 963633 and 963649 (Exhs. H and H-1).
The two luggages contained the promotional and advertising materials, the
clutch bags, barong tagalog and his personal belongings. Subsequently,
Pangan was informed that his name was not in the manifest and so he
could not take Flight No. 842 in the economy class. Since there was no
space in the economy class, plaintiff Pangan took the first class because he

wanted to be on time in Guam to comply with his commitment, paying an

additional sum of $112.00.
When plaintiff Pangan arrived in Guam on the date of May 27, 1978, his
two luggages did not arrive with his flight, as a consequence of which his
agreements with Slutchnick and Quesada for the exhibition of the films in
Guam and in the United States were cancelled (Exh. L). Thereafter, he filed
a written claim (Exh. J) for his missing luggages.
Upon arrival in the Philippines, Pangan contacted his lawyer, who made the
necessary representations to protest as to the treatment which he received
from the employees of the defendant and the loss of his two luggages
(Exh. M, O, Q, S, and T). Defendant Pan Am assured plaintiff Pangan that
his grievances would be investigated and given its immediate
consideration (Exhs. N, P and R). Due to the defendant's failure to
communicate with Pangan about the action taken on his protests, the
present complaint was filed by the plaintiff. (Pages 4-7, Record On Appeal).
[Rollo, pp. 27-29.]
On the basis of these facts, the Court of First Instance found petitioner
liable and rendered judgment as follows:
(1)
Ordering defendant Pan American World Airways, Inc. to pay all the
plaintiffs the sum of P83,000.00, for actual damages, with interest thereon
at the rate of 14% per annum from December 6, 1978, when the complaint
was filed, until the same is fully paid, plus the further sum of P10,000.00 as
attorney's fees;
(2)
Ordering defendant Pan American World Airways, Inc. to pay
plaintiff Rene V. Pangan the sum of P8,123.34, for additional actual
damages, with interest thereon at the rate of 14% per annum from
December 6, 1978, until the same is fully paid;
(3)
Dismissing the counterclaim interposed by defendant Pan
American World Airways, Inc.; and
(4)
Ordering defendant Pan American World Airways, Inc. to pay the
costs of suit. [Rollo, pp. 106-107.]
On appeal, the then Intermediate Appellate Court affirmed the trial court
decision.
Hence, the instant recourse to this Court by petitioner.
The petition was given due course and the parties, as required, submitted
their respective memoranda. In due time the case was submitted for
decision.
In assailing the decision of the Intermediate Appellate Court petitioner
assigned the following errors:
1.
The respondent court erred as a matter of law in affirming the trial
court's award of actual damages beyond the limitation of liability set forth
in the Warsaw Convention and the contract of carriage.
2.
The respondent court erred as a matter of law in affirming the trial
court's award of actual damages consisting of alleged lost profits in the
face of this Court's ruling concerning special or consequential damages as
set forth in Mendoza v. Philippine Airlines [90 Phil. 836 (1952).]
The assigned errors shall be discussed seriatim.
1.
The airline ticket (Exh. "G") contains the following conditions:
NOTICE
If the passenger's journey involves an ultimate destination or stop in a
country other than the country of departure the Warsaw Convention may

be applicable and the Convention governs and in most cases limits the
liability of carriers for death or personal injury and in respect of loss of or
damage to baggage. See also notice headed "Advice to International
Passengers on Limitation of Liability."
CONDITIONS OF CONTRACT
1.
As used in this contract "ticket" means this passenger ticket and
baggage check of which these conditions and the notices form part,
"carriage" is equivalent to "transportation," "carrier" means all air carriers
that carry or undertake to carry the passenger or his baggage hereunder or
perform any other service incidental to such air carriage. "WARSAW
CONVENTION" means the convention for the Unification of Certain Rules
Relating to International Carriage by Air signed at Warsaw, 12th October
1929, or that Convention as amended at The Hague, 28th September
1955, whichever may be applicable.
2.
Carriage hereunder is subject to the rules and limitations relating
to liability established by the Warsaw Convention unless such carriage is
not "international carriage" as defined by that Convention.
3.
To the extent not in conflict with the foregoing carriage and other
services performed by each carrier are subject to: (i) provisions contained
in this ticket, (ii) applicable tariffs, (iii) carrier's conditions of carriage and
related regulations which are made part hereof (and are available on
application at the offices of carrier), except in transportation between a
place in the United States or Canada and any place outside thereof to
which tariffs in force in those countries apply.
xxx
xxx
xxx
NOTICE OF BAGGAGE LIABILITY LIMITATIONS
Liability for loss, delay, or damage to baggage is limited as follows unless a
higher value is declared in advance and additional charges are paid: (1) for
most international travel (including domestic portions of international
journeys) to approximately $9.70 per pound ($20.00 per kilo) for checked
baggage and $400 per passenger for unchecked baggage: (2) for travel
wholly between U.S. points, to $750 per passenger on most carriers (a few
have lower limits). Excess valuation may not be declared on certain types
of valuable articles. Carriers assume no liability for fragile or perishable
articles further information may be obtained from the carrier. [Emphasis
supplied.].
On the basis of the foregoing stipulations printed at the back of the ticket,
petitioner contends that its liability for the lost baggage of private
respondent Pangan is limited to $600.00 ($20.00 x 30 kilos) as the latter
did not declare a higher value for his baggage and pay the corresponding
additional charges.
To support this contention, petitioner cites the case of Ong Yiu v. Court of
Appeals [G.R. No. L-40597, June 29, 1979, 91 SCRA 223), where the Court
sustained the validity of a printed stipulation at the back of an airline ticket
limiting the liability of the carrier for lost baggage to a specified amount
and ruled that the carrier's liability was limited to said amount since the
passenger did not declare a higher value, much less pay additional
charges.
We find the ruling in Ong Yiu squarely applicable to the instant case. In said
case, the Court, through Justice Melencio-Herrera, stated:

Petitioner further contends that respondent Court committed grave error

when it limited PAL's carriage liability to the amount of P100.00 as
stipulated at the back of the ticket . . .
We agree with the foregoing finding. The pertinent Condition of Carriage
printed at the back of the plane ticket reads:
8.
BAGGAGE LIABILITY . . . The total liability of the Carrier for lost or
damage baggage of the passenger is LIMITED TO P100.00 for each ticket
unless a passenger declares a higher valuation in excess of P100.00, but
not in excess, however, of a total valuation of P1,000.00 and additional
charges are paid pursuant to Carrier's tariffs.
There is no dispute that petitioner did not declare any higher value for his
luggage, much less did he pay any additional transportation charge.
But petitioner argues that there is nothing in the evidence to show that he
had actually entered into a contract with PAL limiting the latter's liability for
loss or delay of the baggage of its passengers, and that Article 1750 * of
the Civil Code has not been complied with.
While it may be true that petitioner had not signed the plane ticket (Exh.
"12"), he is nevertheless bound by the provisions thereof. "Such provisions
have been held to be a part of the contract of carriage, and valid and
binding upon the passenger regardless of the latter's lack of knowledge or
assent to the regulation." [Tannebaum v. National Airline, Inc., 13 Misc. 2d
450, 176 N.Y.S. 2d 400; Lichten v. Eastern Airlines, 87 Fed. Supp. 691;
Migoski v. Eastern Air Lines, Inc., Fla., 63 So. 2d 634.] It is what is known as
a contract of "adhesion," in regards which it has been said that contracts of
adhesion wherein one party imposes a ready made form of contract on the
other, as the plane ticket in the case at bar, are contracts not entirely
prohibited. The one who adheres to the contract is in reality free to reject it
entirely; if he adheres, he gives his consent, [Tolentino, Civil Code, Vol. IV,
1962 ed., p. 462, citing Mr. Justice J.B.L. Reyes, Lawyer's Journal, Jan. 31,
1951, p. 49]. And as held in Randolph v. American Airlines, 103 Ohio App.
172, 144 N.E. 2d 878; Rosenchein v. Trans World Airlines, Inc., 349 S.W. 2d
483, "a contract limiting liability upon an agreed valuation does not offend
against the policy of the law forbidding one from contracting against his
own negligence."
Considering, therefore, that petitioner had failed to declare a higher value
for his baggage, he cannot be permitted a recovery in excess of P100.00.
On the other hand, the ruling in Shewaram v. Philippine Air Lines, Inc. [G.R.
No. L-20099, July 2, 1966, 17 SCRA 606], where the Court held that the
stipulation limiting the carrier's liability to a specified amount was invalid,
finds no application in the instant case, as the ruling in said case was
premised on the finding that the conditions printed at the back of the ticket
were so small and hard to read that they would not warrant the
presumption that the passenger was aware of the conditions and that he
had freely and fairly agreed thereto. In the instant case, similar facts that
would make the case fall under the exception have not been alleged, much
less shown to exist. LibLex
In view thereof petitioner's liability for the lost baggage is limited to $20.00
per kilo or $600.00, as stipulated at the back of the ticket.
At this juncture, in order to rectify certain misconceptions the Court finds it
necessary to state that the Court of Appeals' reliance on a quotation from
Northwest Airlines, Inc. v. Cuenca [G.R. No. L-22425, August 31, 1965, 14

SCRA 1063] to sustain the view that "to apply the Warsaw Convention
which limits a carrier's liability to US$9.07 per pound or US$20.00 per kilo
in cases of contractual breach of carriage ** is against public policy" is
utterly misplaced, to say the least. In said case, while the Court, as quoted
in the Intermediate Appellate Court's decision, said:
Petitioner argues that pursuant to those provisions, an air "carrier is liable
only" in the event of death of a passenger or injury suffered by him, or of
destruction or loss of, or damages to any checked baggage or any goods,
or of delay in the transportation by air of passengers, baggage or goods.
This pretense is not borne out by the language of said Articles. The same
merely declare the carrier liable for damages in enumerated cases, if the
conditions therein specified are present. Neither said provisions nor others
in the aforementioned Convention regulate or exclude liability for other
breaches of contract by the carrier. Under petitioner's theory, an air carrier
would be exempt from any liability for damages in the event of its absolute
refusal, in bad faith, to comply with a contract of carriage, which is absurd.
it prefaced this statement by explaining that:
. . . The case is now before us on petition for review by certiorari, upon the
ground that the lower court has erred: (1) in holding that the Warsaw
Convention of October 12, 1929, relative to transportation by air is not in
force in the Philippines: (2) in not holding that respondent has no cause of
action; and (3) in awarding P20,000 as nominal damages.
We deem it unnecessary to pass upon the first assignment of error because
the same is the basis of the second assignment of error, and the latter is
devoid of merit, even if we assumed the former to be well-taken.
(Emphasis supplied.)
Thus, it is quite clear that the Court never intended to, and in fact never
did, rule against the validity of provisions of the Warsaw Convention.
Consequently, by no stretch of the imagination may said quotation from
Northwest be considered as supportive of the appellate court's statement
that the provisions of the Warsaw Convention limited a carrier's liability are
against public policy.
2.
The Court finds itself unable to agree with the decision of the trial
court, and affirmed by the Court of Appeals, awarding private respondents
damages as and for lost profits when their contracts to show the films in
Guam and San Francisco, California were cancelled.
The rule laid down in Mendoza v. Philippine Air Lines, Inc. [90 Phil. 836
(1952)] cannot be any clearer:
. . . Under Art. 1107 of the Civil Code, a debtor in good faith like the
defendant herein, may be held liable only for damages that were foreseen
or might have been foreseen at the time the contract of transportation was
entered into. The trial court correctly found that the defendant company
could not have foreseen the damages that would be suffered by Mendoza
upon failure to deliver the can of film on the 17th of September, 1948 for
the reason that the plans of Mendoza to exhibit that film during the town
fiesta and his preparations, specially the announcement of said exhibition
by posters and advertisement in the newspaper, were not called to the
defendant's attention.
In our research for authorities we have found a case very similar to the one
under consideration. In the case of Chapman vs. Fargo, L.R.A. (1918 F) p.
1049, the plaintiff in Troy, New York, delivered motion picture films to the

defendant Fargo, an express company, consigned and to be delivered to

him in Utica. At the time of shipment the attention of the express company
was called to the fact that the shipment involved motion picture films to be
exhibited in Utica, and that they should be sent to their destination, rush.
There was delay in their delivery and it was found that the plaintiff because
of his failure to exhibit the film in Utica due to the delay suffered damages
or loss of profits. But the highest court in the State of New York refused to
award him special damages. Said appellate court observed:
But before defendant could be held to special damages such as the
present alleged loss of profits on account of delay or failure of delivery it
must have appeared that he had notice at the time of delivery to him of
the particular circumstances attending the shipment and which probably
would lead to such special loss if he defaulted. Or, as the rule has been
stated in another form in order to impose on the defaulting party further
liability than for damages naturally and directly i.e., in the ordinary course
of things arising from a breach of contract such unusual or extraordinary
damages must have been brought within the contemplation of the parties
as the probable result of breach at the time of or prior to contracting.
Generally notice then of any special circumstances which will show that the
damages to be anticipated from a breach would be enhanced has been
held sufficient far this effect.
As may be seen, that New York case is a stronger one than the present
case for the reason that the attention of the common carrier in said case
was called to the nature of the articles shipped, the purpose of shipment,
and the desire to rush the shipment, circumstances and facts absent in the
present case. [Emphasis supplied.]
Thus, applying the foregoing ruling to the facts of the instant case, in the
absence of a showing that petitioner's attention was called to the special
circumstances requiring prompt delivery of private respondent Pangan's
luggages, petitioner cannot be held liable for the cancellation of private
respondents' contracts as it could not have foreseen such an eventuality
when it accepted the luggages for transit. prLL
The Court is unable to uphold the Intermediate Appellate Court's disregard
of the rule laid down in Mendoza and affirmance of the trial court's
conclusion that petitioner is liable for damages based on the finding that
"[t]he undisputed fact is that the contracts of the plaintiffs for the
exhibition of the films in Guam and California were cancelled because of
the loss of the two luggages in question." [Rollo, p. 36] The evidence
reveals that the proximate cause of the cancellation of the contracts was
private respondent Pangan's failure to deliver the promotional and
advertising materials on the dates agreed upon. For this petitioner cannot
be held liable. Private respondent Pangan had not declared the value of the
two luggages he had checked in and paid additional charges. Neither was
petitioner privy to respondents' contracts nor was its attention called to the
condition therein requiring delivery of the promotional and advertising
materials on or before a certain date.
3.
With the Court's holding that petitioner's liability is limited to the
amount stated in the ticket, the award of attorney's fees, which is
grounded on the alleged unjustified refusal of petitioner to satisfy private
respondent's just and valid claim, loses support and must be set aside.

WHEREFORE, the Petition is hereby GRANTED and the Decision of the

Intermediate Appellate Court is SET ASIDE and a new judgment is rendered
ordering petitioner to pay private respondents damages in the amount of
US$600.00 or its equivalent in Philippine currency at the time of actual
payment.
SO ORDERED.

D. When Limitations unavailable, Arts. 3, 25

TWA v. CA, 165 SCRA 143
FIRST DIVISION
[G.R. No. 78656. August 30, 1988.]
TRANS WORLD AIRLINES, petitioner, vs. COURT OF APPEALS and
ROGELIO A. VINLUAN, respondents.
Guerrero & Torres Law Offices for petitioner.
Angara, Abello, Concepcion, Regala & Cruz for private respondent.
The Solicitor General for public respondent.
SYLLABUS
1.
CIVIL LAW; DAMAGES; MORAL AND EXEMPLARY DAMAGES; BASIS
FOR THE AWARD THEREOF IN THE CASE AT BAR. The discrimination is
obvious and the humiliation to which private respondent was subjected is
undeniable. Consequently, the award of moral and exemplary damages by
the respondent court is in order. At the time of this unfortunate incident,
the private respondent was a practicing lawyer, a senior partner of a big
law firm in Manila. He was a director of several companies and was active
in civic and social organizations in the Philippines. Considering the
circumstances of this case and the social standing of private respondent in
the community, he is entitled to the award of moral and exemplary
damages. However, the moral damages should be reduced to P300,000.00,
and the exemplary damages should be reduced to P200,000.00. This award
should be reasonably sufficient to indemnify private respondent for the
humiliation and embarrassment that he suffered and to serve as an
example to discourage the repetition of similar oppressive and
discriminatory acts.
2.
ID.; ID.; MORAL DAMAGES; PRESENCE OF BAD FAITH JUSTIFIES
AWARD THEREOF. Petitioner sacrificed the comfort of its first class
passengers including private respondent Vinluan for the sake of economy.
Such inattention and lack of care for the interest of its passengers who are
entitled to its utmost consideration, particularly as to their convenience,
amount to bad faith which entitles the passenger to the award of moral
damages. More so in this case where instead of courteously informing

private respondent of his being downgraded under the circumstances, he

was angrily rebuffed by an employee of petitioner.
DECISION

(12%) percent per annum from February 15, 1980 when the complaint was
filed until fully paid.
Correspondingly, defendant's counterclaim is dismissed.
Costs against the defendant.
SO ORDERED."

GANCAYCO, J p:
Rogelio A. Vinluan is a practicing lawyer who had to travel in April, 1979 to
several cities in Europe and the U.S. to attend to some matters involving
several clients. He entered into a contract for air carriage for valuable
consideration with Japan Airlines first class from Manila to Tokyo, Moscow,
Paris, Hamburg, Zurich, New York, Los Angeles, Honolulu and back to
Manila thru the same airline and other airlines it represents for which he
was issued the corresponding first class tickets for the entire trip.
On April 18, 1979, while in Paris, he went to the office of Trans World
Airlines (TWA) at the De Gaulle Airport and secured therefrom confirmed
reservation for first class accommodation on board its Flight No. 41 from
New York to San Francisco which was scheduled to depart on April 20,
1979. A validated stub was attached to the New York-Los Angeles portion
of his ticket evidencing his confirmed reservation for said flight with the
mark "OK." 1 On April 20, 1979, at about 8:00 o'clock A.M., Vinluan
reconfirmed his reservation for first class accommodation on board TWA
Flight No. 41 with its New York office. He was advised that his reservation
was confirmed. He was even requested to indicate his seat preference on
said flight on said scheduled date of departure of TWA Flight No. 41.
Vinluan presented his ticket for check-in at the counter of TWA at JFK
International Airport at about 9:45 o'clock A.M., the scheduled time of the
departure being 11:00 o'clock A.M. He was informed that there was no first
class seat available for him on the flight. He asked for an explanation but
TWA employees on duty declined to give any reason. When he began to
protest, one of the TWA employees, a certain Mr. Braam, rudely threatened
him with the words "Don't argue with me, I have a very bad temper."
To be able to keep his schedule, Vinluan was compelled to take the
economy seat offered to him and he was issued a "refund application" as
he was downgraded from first class to economy class.
While waiting for the departure of Flight No. 41, Vinluan noticed that other
passengers who were white Caucasians and who had checked-in later than
him were given preference in some first class seats which became
available due to "no show" passengers.
On February 15, 1980, Vinluan filed an action for damages against the TWA
in the Court of First Instance of Rizal alleging breach of contract and bad
faith. After trial on the merits, a decision was rendered the dispositive part
of which reads as follows:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiff and
against the defendant holding the latter liable to the former for the amount
representing the difference in fare between first class and economy class
accommodations on board Flight No. 6041 from New York to San Francisco,
the amount of P500,000.00 as moral damages, the amount of P300,000.00
as exemplary damages and the amount of P100,000.00 as and for
attorney's fees, all such amounts to earn interest at the rate of twelve

Not satisfied therewith, the TWA appealed to the Court of Appeals wherein
in due course a decision was rendered on May 27, 1987, 2 the dispositive
part of which reads as follows:
"WHEREFORE, the decision dated March 8, 1984 is hereby modified by (1)
fixing the interest which appellant must pay on the awards of moral and
exemplary damages at six per cent (6%) per annum from the date of the
decision a quo, March 8, 1984 until date of full payment and (2) reducing
the attorney's fees to P50,000.00 without interest, the rest of the decision
is affirmed. Costs against appellant.
SO ORDERED."
Hence, the herein petition for review.
The theory of the petitioner is that because of maintenance problems of
the aircraft on the day of the flight, TWA Flight No. 41 was cancelled and a
special Flight No. 6041 was organized to operate in lieu of Flight No. 41. 3
Flight No. 41 was to have utilized a Lockheed 1011 with 34 first class seats,
but instead, a smaller Boeing 707 with only 16 first class seats was
substituted for use in Flight No. 6041. Hence, passengers who had first
class reservations on Flight No. 41 had to be accommodated on Flight No.
6041 on a first-come, first-served basis. An announcement was allegedly
made to all passengers in the entire terminal of the airport advising them
to get boarding cards for Flight No. 6041 to San Francisco and that the first
ones getting them would get first preference as to seats in the aircraft. It
denied declining to give any explanation for the downgrading of private
respondent as well as the discourteous attitude of Mr. Braam.
On the other hand, private respondent asserts that he did not hear such
announcement at the terminal and that he was among the early
passengers to present his ticket for check-in only to be informed that there
was no first class seat available for him and that he had to be downgraded.
The petitioner contends that the respondent Court of Appeals committed a
grave abuse of discretion in finding that petitioner acted maliciously and
discriminatorily, and in granting excessive moral and exemplary damages
and attorney's fees.
The contention is devoid of merit. Private respondent had a first class
ticket for Flight No. 41 of petitioner from New York to San Francisco on April
20, 1979. It was twice confirmed and yet respondent unceremoniously told
him that there was no first class seat available for him and that he had to
be downgraded to the economy class. As he protested, he was arrogantly
threatened by one Mr. Braam. Worst still, while he was waiting for the
flight, he saw that several Caucasians who arrived much later were
accommodated in first class seats when the other passengers did not show
up.
The discrimination is obvious and the humiliation to which private
respondent was subjected is undeniable. Consequently, the award of moral
and exemplary damages by the respondent court is in order. 4

Indeed, private respondent had shown that the alleged switch of planes
from a Lockheed 1011 to a smaller Boeing 707 was because there were
only 138 confirmed economy class passengers who could very well be
accommodated in the smaller plane and not because of maintenance
problems.
Petitioner sacrificed the comfort of its first class passengers including
private respondent Vinluan for the sake of economy. Such inattention and
lack of care for the interest of its passengers who are entitled to its utmost
consideration, particularly as to their convenience, amount to bad faith
which entitles the passenger to the award of moral damages. 5 More so in
this case where instead of courteously informing private respondent of his
being downgraded under the circumstances, he was angrily rebuffed by an
employee of petitioner.
At the time of this unfortunate incident, the private respondent was a
practicing lawyer, a senior partner of a big law firm in Manila. He was a
director of several companies and was active in civic and social
organizations in the Philippines. Considering the circumstances of this case
and the social standing of private respondent in the community, he is
entitled to the award of moral and exemplary damages. However, the
moral damages should be reduced to P300,000.00, and the exemplary
damages should be reduced to P200,000.00. This award should be
reasonably sufficient to indemnify private respondent for the humiliation
and embarrassment that he suffered and to serve as an example to
discourage the repetition of similar oppressive and discriminatory acts.
WHEREFORE, with the above modification reducing the moral and
exemplary damages as above-stated, the decision subject of the petition
for review is AFFIRMED in all other respects, without pronouncement as to
costs in this instance.
SO ORDERED.
Narvasa, Cruz, Grio-Aquino and Medialdea, JJ., concur.

Luna v. Court of Appeals, 216 SCRA 107

FIRST DIVISION
[G.R. No. 100374-75. November 27, 1992.]
RUFINO Y. LUNA, RODOLFO J. ALONSO and PORFIRIO RODRIGUEZ,
petitioners, vs. HON. COURT OF APPEALS, HON. CRISTINA M.
ESTRADA in her capacity as Presiding Judge, RTC-Pasig, Br. 69,
Metro Manila, HON. TERESITA D. CAPULONG in her capacity as
Presiding Judge, RTC-Valenzuela, Br. 172, Metro Manila, and
NORTHWEST AIRLINES, INC., respondents.
Virgilio R. Garcia for petitioners.
Quisumbing, Torres & Evangelista for Northwest Airlines, Inc.
SYLLABUS
1.
REMEDIAL
LAW;
ACTIONS;
TECHNICALITIES
SHOULD
BE
DISREGARDED TO RENDER PARTIES WHAT IS DUE THEM. From the facts,
it appears that private respondent Northwest Airlines indeed failed to
deliver petitioners' baggage at the designated time and place. For this, all
that respondent carrier could say was that "[W]e exerted all efforts to
comply with this condition of the contract." Hence, it is evident that

petitioners suffered some special specie of injury for which they should
rightly be compensated. Private respondent cannot be allowed to escape
liability be seeking refuge in the argument that the trial courts' orders have
attained finality due to petitioners' failure to move for reconsideration or to
file a timely appeal therefrom. Technicalities should be disregarded if only
to render to the respective parties that which is their due.
2.
ID.; SPECIAL CIVIL ACTION; CERTIORARI; GENERALLY, NOT A
SUBSTITUTE FOR APPEAL; EXCEPTIONS. Although We have said that
certiorari cannot be a substitute for a lapsed appeal, We have, time and
again, likewise held that where a rigid application of that rule will result in
a manifest failure or miscarriage of justice, the rule may be relaxed. Hence,
considering the broader and primordial interests of justice, particularly
when there is grave abuse of discretion, thus impelling occasional
departure from the general rule that the extraordinary writ of certiorari
cannot substitute for a lost appeal, respondent appellate court may legally
entertain the special civil action for certiorari.
3.
ID.; ACTIONS; WARSAW CONVENTION; A TREATY COMMITMENT
WHICH DOES NOT OPERATE AS AN EXCLUSIVE ENUMERATION OF GROUNDS
NOR LIMITATION OF LIABILITY FOR BREACH OF CONTRACT OF CARRIAGE.
The Warsaw Convention was a treaty commitment voluntarily assumed by
the Philippine government; consequently, it has the force and effect of law
in this country. But, in the same token, We are also aware of jurisprudence
that the Warsaw Convention does not operate as an exclusive enumeration
of the instances for declaring an airline liable for breach of contract of
carriage or as an absolute limit of the extent of that liability. The
Convention merely declares the carrier liable for damages in the
enumerated cases, if the conditions therein specified are present. For sure,
it does not regulate the liability, much less exempt, the carrier for violating
the rights of others which must simply be respected in accordance with
their contracts of carriage. The application of the Convention must not
therefore be construed to preclude the operation of the Civil Code and
other pertinent laws.
4.
ID.; ID.; ID.; ID.; CASE AT BAR. Hence, petitioners' alleged failure
to file a claim with the common carrier as mandated by the provisions of
the Warsaw Convention should not be a ground for the summary dismissal
of their complaints since private respondent may still be held liable for
breach of other relevant laws which may provide a different period or
procedure for filing a claim. Considering that petitioners indeed filed a
claim which private respondent admitted having received on 21 June 1989,
their demand may have very well filed within the period prescribed by
those applicable laws. Consequently, respondent trial courts, as well as
respondent appellate court, were in error when they limited themselves to
the provisions of the Warsaw Convention and disregarding completely the
provisions of the Civil Code.
5.
CIVIL LAW; OBLIGATIONS AND CONTRACTS; CONTRACT OF
CARRIAGE; BREACH OF CONTRACT FOR FAILURE TO DELIVER CARGO; MUST
BE INTENTIONAL TO RECOVER DAMAGES; FAILURE IN CASE AT BAR, NOT
INTENTIONAL. We are not prepared to subscribe to petitioners' argument
that the failure of private respondent to deliver their luggage at the
designated time and place amounted ipso facto to willful misconduct. for
willful misconduct to exist, there must be a showing that the acts

complained of were impelled by an intention to violate the law, or were in

persistent disregard of one's rights. It must be evidenced by a flagrantly or
shamefully wrong or improper conduct.
DECISION
BELLOSILLO, J p:
This joint petition for review on certiorari originated from two (2) separate
complaints arising from an airline's delay in the delivery of the luggage of
its passengers at their destination which respondent courts dismissed for
lack of cause of action. The resulting issue is whether the application of the
Warsaw Convention operates to exclude the application of the provisions of
the New Civil Code and other pertinent statutes.
Briefly, the facts: On 19 May 1989, at around 8:00 in the morning,
petitioners Rufino Luna, Rodolfo Alonso and Porfirio Rodriguez boarded
Flight 020 of private respondent Northwest Airlines bound for Seoul, South
Korea, to attend the four-day Rotary International Convention from the 21st
to the 24th of May 1992. They checked in one (1) piece of luggage each.
After boarding, however, due to engine trouble, they were asked to
disembark and transfer to a Korean Airlines plane scheduled to depart four
(4) hours later. They were assured that their baggage would be with them
in the same flight.
When petitioners arrived in Seoul, they discovered that their personal
belongings were nowhere to be found; instead, they were allegedly flown
to Seattle, U.S.A. It was not until four (4) days later, and only after
repeated representations with Northwest Airlines personnel at the airport
in Korea were petitioners able to retrieve their luggage. By then the
Convention, which they were hardly able to attend, was almost over. LLjur
Petitioners Rufino Y. Luna and Rodolfo J. Alonso assert that on 6 June 1989,
or thirteen (13) days after they recovered their luggage, they sent a
written claim to private respondent's office along Roxas Blvd., Ermita,
Manila. Petitioner Porfirio Rodriguez, on his part, asseverates that he filed
his claim on 13 June 1989. However, private respondent, in a letter of 21
June 1989, disowned any liability for the delay and averred that it exerted
"its best efforts to carry the passenger and baggage with reasonable
dispatch." 1
Thus, on 14 July 1989, petitioners Luna and Alonso jointly filed a complaint
for breach of contract with damages before the Regional Trial Court of
Pasig, Metro Manila, docketed as Civil Case No. 58390, subsequently raffled
to Br. 69, 2 while petitioner Rodriguez filed his own complaint with the
Regional Trial Court of Valenzuela, Metro Manila, docketed as Civil Case No.
3194-V-89, assigned to Br. 172. 3 However, upon motion of private
respondent, both complaints were dismissed 4 for lack of cause of action
due to petitioner's failure to state in their respective complaints that they
filed a prior claim with private respondent within the prescribed period.
Petitioners Luna and Alonso then filed a petition for certiorari before the
Court of Appeals to set aside the order of respondent Judge Cristina M.
Estrada granting private respondent's motion to dismiss, while petitioner
Rodriguez proceeded directly to this Court on Certiorari for the same

purpose. However, in Our resolution of 26 February 1990, We referred his

petition to the Court of Appeals.
On 26 March 1991, the Third Division of respondent Court of Appeals,
applying the provisions of the Warsaw Convention and ruling that certiorari
was not a substitute for a lost appeal, dismissed the petition of Luna and
Alonso, 5 and on 7 June 1991 denied their motion for reconsideration. 6
Meanwhile, on 28 February 1991 the Seventh Division of respondent Court
of Appeals, ruling that the questioned order of the trial court had already
become final, similarly rejected the petition of Rodriguez, and on 6 June
1991 denied his motion for reconsideration. 7 Hence, this present recourse
by petitioners Luna, Alonso and Rodriguez.
Four (4) grounds are relied upon by petitioners which, nevertheless, may
be reduced to three, namely: (a) that respondent appellate court
disregarded Our ruling in Alitalia v. CA 8 where We said that "[t]he
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;" 9 (b) that "petitions to revoke orders and decisions may be
entertained even after the time to appeal had elapsed, in cases wherein
the jurisdiction of the court had been exceeded;" 10 and, (c) that Art. 26 of
the Warsaw Convention which prescribes the reglementary period within
which to file a claim cannot be invoked if damage is caused by the carrier's
willful misconduct, as provided by Art. 25 of the same Warsaw Convention.
Private respondent, on the other hand, argues that the dismissal orders of
respondent courts had already become final after petitioners failed to
either move for reconsideration or appeal from the orders within the
reglementary period, hence, certiorari is no substitute for a lost appeal.
LLpr
Private respondent also maintains that it did not receive any demand letter
from petitioners within the 21-day reglementary period, as provided in par.
7 of the Conditions of Contract appearing in the plane ticket. Since Art. 26,
par. (4), of the Warsaw Convention provides that "[f]ailing complaint within
the times aforesaid, no action shall lie against the carrier, save in the case
of fraud on him part," the carrier consequently cannot be held liable for the
delay in the delivery of the baggage. In other words, non-observance of the
prescribed period to file a claim bars claimant's action in court for recovery.
Private respondent, citing foreign jurisprudence, 11 likewise submits that
Art. 25, par. (1), of the Warsaw Convention which excludes or limits liability
of common carriers if the damage is caused by its willful misconduct, refers
only to the monetary ceiling on damages found in Art. 22.
We find the appeal impressed with merit.
From the facts, it appears that private respondent Northwest Airlines
indeed failed to deliver petitioners' baggage at the designated time and
place. For this, all that respondent carrier could say was that "[w]e exerted
all efforts to comply with this condition of the contract." 12 Hence, it is
evident that petitioners suffered some special specie of injury for which
they should rightly be compensated. Private respondent cannot be allowed
to escape liability by seeking refuge in the argument that the trial courts'
orders have attained finality due to petitioners' failure to move for
reconsideration or to file a timely appeal therefrom. Technicalities should
be disregarded if only to render to the respective parties that which is their
due. Thus, although We have said that certiorari cannot be a substitute for

a lapsed appeal, We have, time and again, likewise held that where a rigid
application of that rule will result in a manifest failure or miscarriage of
justice, the rule may be relaxed. 13 Hence, considering the broader and
primordial interests of justice, particularly when there is grave abuse of
discretion, thus impelling occasional departure from the general rule that
the extraordinary writ of certiorari cannot substitute for a lost appeal,
respondent appellate court may legally entertain the special civil action for
certiorari. 14
Previously, We ruled that the Warsaw Convention was a treaty commitment
voluntarily assumed by the Philippine government; consequently, it has the
force and effect of law in this country. 15 But, in the same token, We are
also aware of jurisprudence that the Warsaw Convention does not operate
as an exclusive enumeration of the instances for declaring an airline liable
for breach of contract of carriage or as an absolute limit of the extent of
that liability. 16 The Convention merely declares the carrier liable for
damages in the enumerated cases, if the conditions therein specified are
present. 17 For sure, it does not regulate the liability, much less exempt,
the carrier for violating the rights of others which must simply be respected
in accordance with their contracts of carriage. The application of the
Convention must not therefore be construed to preclude the operation of
the Civil Code and other pertinent laws. In fact, in Alitalia v. IAC, 18 We
awarded Dr. Felipa Pablo nominal damages, the provisions of the
Convention notwithstanding.
Hence, petitioners' alleged failure to file a claim with the common carrier
as mandated by the provisions of the Warsaw Convention should not be a
ground for the summary dismissal of their complaints since private
respondent may still be held liable for breach of other relevant laws which
may provide a different period or procedure for filing a claim. Considering
that petitioners indeed filed a claim which private respondent admitted
having received on 21 June 1989, their demand may have very well been
filed within the period prescribed by those applicable laws. Consequently,
respondent trial courts, as well as respondent appellate court, were in error
when they limited themselves to the provisions of the Warsaw Convention
and disregarding completely the provisions of the Civil Code. cdphil
We are unable to agree however with petitioners that Art. 25 of the
Convention operates to exclude the other provisions of the Convention
operates to exclude the other provisions of the Convention if damage is
caused by the common carrier's willful misconduct. As correctly pointed
out by private respondent, Art. 25 refers only to the monetary ceiling on
damages found in Art. 22 should damage be caused by carrier's willful
misconduct. Hence, only the provisions of Art. 22 limiting the carrier's
liability and imposing a monetary ceiling in case of willful misconduct on its
part that the carrier cannot invoke. 19 This issue however has become
academic in the light of our ruling that the trial courts erred in dismissing
petitioners' respective complaints.
We are not prepared to subscribe to petitioners' argument that the failure
of private respondent to deliver their luggage at the designated time and
place amounted ipso facto to willful misconduct. For willful misconduct to
exist, there must be a showing that the acts complained of were impelled
by an intention to violate the law, or were in persistent disregard of one's

rights. It must be evidenced by a flagrantly or shamefully wrong or

improper conduct.
WHEREFORE, the assailed decisions and resolutions of respondent Court of
Appeals are REVERSED and SET ASIDE. The complaints for breach of
contract of carriage with damages in Civil Case No. 3194-V-89 and Civil
Case No. 58390 dismissed by respondent Judges Teresita D. Capulong and
Cristina M. Estrada, respectively, are ordered REINSTATED and given due
course until terminated. No costs.
SO ORDER.
G.R. No. 171092
March 15, 2010
EDNA DIAGO LHUILLIER, Petitioner,
vs.
BRITISH AIRWAYS, Respondent.
DECISION
DEL CASTILLO, J.:
Jurisdictio est potestas de publico introducta cum necessitate juris dicendi.
Jurisdiction is a power introduced for the public good, on account of the
necessity of dispensing justice.1
Factual Antecedents
On April 28, 2005, petitioner Edna Diago Lhuillier filed a Complaint 2 for
damages against respondent British Airways before the Regional Trial Court
(RTC) of Makati City. She alleged that on February 28, 2005, she took
respondents flight 548 from London, United Kingdom to Rome, Italy. Once
on board, she allegedly requested Julian Halliday (Halliday), one of the
respondents flight attendants, to assist her in placing her hand-carried
luggage in the overhead bin. However, Halliday allegedly refused to help
and assist her, and even sarcastically remarked that "If I were to help all
300 passengers in this flight, I would have a broken back!"
Petitioner further alleged that when the plane was about to land in Rome,
Italy, another flight attendant, Nickolas Kerrigan (Kerrigan), singled her out
from among all the passengers in the business class section to lecture on
plane safety. Allegedly, Kerrigan made her appear to the other passengers
to be ignorant, uneducated, stupid, and in need of lecturing on the safety
rules and regulations of the plane. Affronted, petitioner assured Kerrigan
that she knew the planes safety regulations being a frequent traveler.
Thereupon, Kerrigan allegedly thrust his face a mere few centimeters away
from that of the petitioner and menacingly told her that "We dont like your
attitude."
Upon arrival in Rome, petitioner complained to respondents ground
manager and demanded an apology. However, the latter declared that the
flight stewards were "only doing their job."
Thus, petitioner filed the complaint for damages, praying that respondent
be ordered to pay P5 million as moral damages, P2 million as nominal
damages, P1 million as exemplary damages, P300,000.00 as attorneys
fees, P200,000.00 as litigation expenses, and cost of the suit.

On May 16, 2005, summons, together with a copy of the complaint, was
served on the respondent through Violeta Echevarria, General Manager of
Euro-Philippine Airline Services, Inc.3
On May 30, 2005, respondent, by way of special appearance through
counsel, filed a Motion to Dismiss 4 on grounds of lack of jurisdiction over
the case and over the person of the respondent. Respondent alleged that
only the courts of London, United Kingdom or Rome, Italy, have jurisdiction
over the complaint for damages pursuant to the Warsaw Convention, 5
Article 28(1) of which provides:
An action for damages must be brought at the option of the plaintiff, either
before the court of domicile of the carrier or his principal place of business,
or where he has a place of business through which the contract has been
made, or before the court of the place of destination.
Thus, since a) respondent is domiciled in London; b) respondents principal
place of business is in London; c) petitioner bought her ticket in Italy
(through Jeepney Travel S.A.S, in Rome); 6 and d) Rome, Italy is petitioners
place of destination, then it follows that the complaint should only be filed
in the proper courts of London, United Kingdom or Rome, Italy.
Likewise, it was alleged that the case must be dismissed for lack of
jurisdiction over the person of the respondent because the summons was
erroneously served on Euro-Philippine Airline Services, Inc. which is not its
resident agent in the Philippines.
On June 3, 2005, the trial court issued an Order requiring herein petitioner
to file her Comment/Opposition on the Motion to Dismiss within 10 days
from notice thereof, and for respondent to file a Reply thereon. 7 Instead of
filing a Comment/Opposition, petitioner filed on June 27, 2005, an Urgent
Ex-Parte Motion to Admit Formal Amendment to the Complaint and
Issuance of Alias Summons. 8 Petitioner alleged that upon verification with
the Securities and Exchange Commission, she found out that the resident
agent of respondent in the Philippines is Alonzo Q. Ancheta. Subsequently,
on September 9, 2005, petitioner filed a Motion to Resolve Pending
Incident and Opposition to Motion to Dismiss.9
Ruling of the Regional Trial Court
On October 14, 2005, the RTC of Makati City, Branch 132, issued an Order 10
granting respondents Motion to Dismiss. It ruled that:
The Court sympathizes with the alleged ill-treatment suffered by the
plaintiff. However, our Courts have to apply the principles of international
law, and are bound by treaty stipulations entered into by the Philippines
which form part of the law of the land. One of this is the Warsaw
Convention. Being a signatory thereto, the Philippines adheres to its
stipulations and is bound by its provisions including the place where
actions involving damages to plaintiff is to be instituted, as provided for
under Article 28(1) thereof. The Court finds no justifiable reason to deviate
from the indicated limitations as it will only run counter to the provisions of

the Warsaw Convention. Said adherence is in consonance with the comity

of nations and deviation from it can only be effected through proper
denunciation as enunciated in the Santos case (ibid). Since the Philippines
is not the place of domicile of the defendant nor is it the principal place of
business, our courts are thus divested of jurisdiction over cases for
damages. Neither was plaintiffs ticket issued in this country nor was her
destination Manila but Rome in Italy. It bears stressing however, that
referral to the court of proper jurisdiction does not constitute constructive
denial of plaintiffs right to have access to our courts since the Warsaw
Convention itself provided for jurisdiction over cases arising from
international transportation. Said treaty stipulations must be complied with
in good faith following the time honored principle of pacta sunt servanda.
The resolution of the propriety of service of summons is rendered moot by
the Courts want of jurisdiction over the instant case.
WHEREFORE, premises considered, the present Motion to Dismiss is hereby
GRANTED and this case is hereby ordered DISMISSED.
Petitioner filed a Motion for Reconsideration but the motion was denied in
an Order11 dated January 4, 2006.
Petitioner now comes directly before us on a Petition for Review on
Certiorari on pure questions of law, raising the following issues:
Issues
I. WHETHER X X X PHILIPPINE COURTs HAVE JURISDICTION OVER A
TORTIOUS CONDUCT COMMITTED AGAINST A FILIPINO CITIZEN AND
RESIDENT BY AIRLINE PERSONNEL OF A FOREIGN CARRIER TRAVELLING
BEYOND THE TERRITORIAL LIMIT OF ANY FOREIGN COUNTRY; AND THUS IS
OUTSIDE THE AMBIT OF THE WARSAW CONVENTION.
II. WHETHER x x x RESPONDENT AIR CARRIER OF PASSENGERS, IN FILING
ITS MOTION TO DISMISS BASED ON LACK OF JURISDICTION OVER THE
SUBJECT MATTER OF THE CASE AND OVER ITS PERSON MAY BE DEEMED AS
HAVING IN FACT AND IN LAW SUBMITTED ITSELF TO THE JURISDICTION OF
THE LOWER COURT, ESPECIALLY SO, WHEN THE VERY LAWYER ARGUING
FOR IT IS HIMSELF THE RESIDENT AGENT OF THE CARRIER.
Petitioners Arguments
Petitioner argues that her cause of action arose not from the contract of
carriage, but from the tortious conduct committed by airline personnel of
respondent in violation of the provisions of the Civil Code on Human
Relations. Since her cause of action was not predicated on the contract of
carriage, petitioner asserts that she has the option to pursue this case in
this jurisdiction pursuant to Philippine laws.
Respondents Arguments
In contrast, respondent maintains that petitioners claim for damages fell
within the ambit of Article 28(1) of the Warsaw Convention. As such, the
same can only be filed before the courts of London, United Kingdom or
Rome, Italy.

Our Ruling
The petition is without merit.
The Warsaw Convention has the force and effect of law in this country.
It is settled that the Warsaw Convention has the force and effect of law in
this country. In Santos III v. Northwest Orient Airlines,12 we held that:
The Republic of the Philippines is a party to the Convention for the
Unification of Certain Rules Relating to International Transportation by Air,
otherwise known as the Warsaw Convention. It took effect on February 13,
1933. The Convention was concurred in by the Senate, through its
Resolution No. 19, on May 16, 1950. The Philippine instrument of accession
was signed by President Elpidio Quirino on October 13, 1950, and was
deposited with the Polish government on November 9, 1950. The
Convention became applicable to the Philippines on February 9, 1951. On
September 23, 1955, President Ramon Magsaysay issued Proclamation No.
201, declaring our formal adherence thereto, "to the end that the same
and every article and clause thereof may be observed and fulfilled in good
faith by the Republic of the Philippines and the citizens thereof."
The Convention is thus a treaty commitment voluntarily assumed by the
Philippine government and, as such, has the force and effect of law in this
country.13
The Warsaw Convention applies because the air travel, where the alleged
tortious conduct occurred, was between the United Kingdom and Italy,
which are both signatories to the Warsaw Convention.
Article 1 of the Warsaw Convention provides:
1. This Convention applies to all international carriage of persons, luggage
or goods performed by aircraft for reward. It applies equally to gratuitous
carriage by aircraft performed by an air transport undertaking.
2. For the purposes of this Convention the expression "international
carriage" means any carriage in which, according to the contract made by
the parties, the place of departure and the place of destination, whether or
not there be a break in the carriage or a transhipment, are situated either
within the territories of two High Contracting Parties, or within the territory
of a single High Contracting Party, if there is an agreed stopping place
within a territory subject to the sovereignty, suzerainty, mandate or
authority of another Power, even though that Power is not a party to this
Convention. A carriage without such an agreed stopping place between
territories subject to the sovereignty, suzerainty, mandate or authority of
the same High Contracting Party is not deemed to be international for the
purposes of this Convention. (Emphasis supplied)
Thus, when the place of departure and the place of destination in a
contract of carriage are situated within the territories of two High
Contracting Parties, said carriage is deemed an "international carriage".
The High Contracting Parties referred to herein were the signatories to the
Warsaw Convention and those which subsequently adhered to it. 14

In the case at bench, petitioners place of departure was London, United

Kingdom while her place of destination was Rome, Italy. 15 Both the United
Kingdom16 and Italy17 signed and ratified the Warsaw Convention. As such,
the transport of the petitioner is deemed to be an "international carriage"
within the contemplation of the Warsaw Convention.
Since the Warsaw Convention applies in the instant case, then the
jurisdiction over the subject matter of the action is governed by the
provisions of the Warsaw Convention.
Under Article 28(1) of the Warsaw Convention, the plaintiff may bring the
action for damages before
1. the court where the carrier is domiciled;
2. the court where the carrier has its principal place of business;
3. the court where the carrier has an establishment by which the contract
has been made; or
4. the court of the place of destination.
In this case, it is not disputed that respondent is a British corporation
domiciled in London, United Kingdom with London as its principal place of
business. Hence, under the first and second jurisdictional rules, the
petitioner may bring her case before the courts of London in the United
Kingdom. In the passenger ticket and baggage check presented by both
the petitioner and respondent, it appears that the ticket was issued in
Rome, Italy. Consequently, under the third jurisdictional rule, the petitioner
has the option to bring her case before the courts of Rome in Italy. Finally,
both the petitioner and respondent aver that the place of destination is
Rome, Italy, which is properly designated given the routing presented in
the said passenger ticket and baggage check. Accordingly, petitioner may
bring her action before the courts of Rome, Italy. We thus find that the RTC
of Makati correctly ruled that it does not have jurisdiction over the case
filed by the petitioner.
Santos III v. Northwest Orient Airlines 18 applies in this case.
Petitioner contends that Santos III v. Northwest Orient Airlines 19 cited by
the trial court is inapplicable to the present controversy since the facts
thereof are not similar with the instant case.
We are not persuaded.
In Santos III v. Northwest Orient Airlines,20 Augusto Santos III, a resident of
the Philippines, purchased a ticket from Northwest Orient Airlines in San
Francisco, for transport between San Francisco and Manila via Tokyo and
back to San Francisco. He was wait-listed in the Tokyo to Manila segment of
his ticket, despite his prior reservation. Contending that Northwest Orient
Airlines acted in bad faith and discriminated against him when it canceled
his confirmed reservation and gave his seat to someone who had no better
right to it, Augusto Santos III sued the carrier for damages before the RTC.
Northwest Orient Airlines moved to dismiss the complaint on ground of lack
of jurisdiction citing Article 28(1) of the Warsaw Convention. The trial court

granted the motion which ruling was affirmed by the Court of Appeals.
When the case was brought before us, we denied the petition holding that
under Article 28(1) of the Warsaw Convention, Augusto Santos III must
prosecute his claim in the United States, that place being the (1) domicile
of the Northwest Orient Airlines; (2) principal office of the carrier; (3) place
where contract had been made (San Francisco); and (4) place of
destination (San Francisco).21
We further held that Article 28(1) of the Warsaw Convention is jurisdictional
in character. Thus:
A number of reasons tends to support the characterization of Article 28(1)
as a jurisdiction and not a venue provision. First, the wording of Article 32,
which indicates the places where the action for damages "must" be
brought, underscores the mandatory nature of Article 28(1). Second, this
characterization is consistent with one of the objectives of the Convention,
which is to "regulate in a uniform manner the conditions of international
transportation by air." Third, the Convention does not contain any provision
prescribing rules of jurisdiction other than Article 28(1), which means that
the phrase "rules as to jurisdiction" used in Article 32 must refer only to
Article 28(1). In fact, the last sentence of Article 32 specifically deals with
the exclusive enumeration in Article 28(1) as "jurisdictions," which, as
such, cannot be left to the will of the parties regardless of the time when
the damage occurred.
xxxx
In other words, where the matter is governed by the Warsaw Convention,
jurisdiction takes on a dual concept. Jurisdiction in the international sense
must be established in accordance with Article 28(1) of the Warsaw
Convention, following which the jurisdiction of a particular court must be
established pursuant to the applicable domestic law. Only after the
question of which court has jurisdiction is determined will the issue of
venue be taken up. This second question shall be governed by the law of
the court to which the case is submitted.22
Contrary to the contention of petitioner, Santos III v. Northwest Orient
Airlines23 is analogous to the instant case because (1) the domicile of
respondent is London, United Kingdom;24 (2) the principal office of
respondent airline is likewise in London, United Kingdom; 25 (3) the ticket
was purchased in Rome, Italy;26 and (4) the place of destination is Rome,
Italy.27 In addition, petitioner based her complaint on Article 2176 28 of the
Civil Code on quasi-delict and Articles 1929 and 2130 of the Civil Code on
Human Relations. In Santos III v. Northwest Orient Airlines, 31 Augusto
Santos III similarly posited that Article 28 (1) of the Warsaw Convention did
not apply if the action is based on tort. Hence, contrary to the contention
of the petitioner, the factual setting of Santos III v. Northwest Orient
Airlines32 and the instant case are parallel on the material points.
Tortious conduct as ground for the petitioners complaint is within the

purview of the Warsaw Convention.

Petitioner contends that in Santos III v. Northwest Orient Airlines, 33 the
cause of action was based on a breach of contract while her cause of
action arose from the tortious conduct of the airline personnel and violation
of the Civil Code provisions on Human Relations.34 In addition, she claims
that our pronouncement in Santos III v. Northwest Orient Airlines 35 that "the
allegation of willful misconduct resulting in a tort is insufficient to exclude
the case from the comprehension of the Warsaw Convention," is more of
an obiter dictum rather than the ratio decidendi. 36 She maintains that the
fact that said acts occurred aboard a plane is merely incidental, if not
irrelevant.37
We disagree with the position taken by the petitioner. Black defines obiter
dictum as "an opinion entirely unnecessary for the decision of the case"
and thus "are not binding as precedent." 38 In Santos III v. Northwest Orient
Airlines,39 Augusto Santos III categorically put in issue the applicability of
Article 28(1) of the Warsaw Convention if the action is based on tort.
In the said case, we held that the allegation of willful misconduct resulting
in a tort is insufficient to exclude the case from the realm of the Warsaw
Convention. In fact, our ruling that a cause of action based on tort did not
bring the case outside the sphere of the Warsaw Convention was our ratio
decidendi in disposing of the specific issue presented by Augusto Santos III.
Clearly, the contention of the herein petitioner that the said ruling is an
obiter dictum is without basis.
Relevant to this particular issue is the case of Carey v. United Airlines, 40
where the passenger filed an action against the airline arising from an
incident involving the former and the airlines flight attendant during an
international flight resulting to a heated exchange which included insults
and profanity. The United States Court of Appeals (9th Circuit) held that the
"passenger's action against the airline carrier arising from alleged
confrontational incident between passenger and flight attendant on
international flight was governed exclusively by the Warsaw Convention,
even though the incident allegedly involved intentional misconduct by the
flight attendant."41
In Bloom v. Alaska Airlines, 42 the passenger brought nine causes of action
against the airline in the state court, arising from a confrontation with the
flight attendant during an international flight to Mexico. The United States
Court of Appeals (9th Circuit) held that the "Warsaw Convention governs
actions arising from international air travel and provides the exclusive
remedy for conduct which falls within its provisions." It further held that
the said Convention "created no exception for an injury suffered as a result
of intentional conduct" 43 which in that case involved a claim for intentional
infliction of emotional distress.
It is thus settled that allegations of tortious conduct committed against an
airline passenger during the course of the international carriage do not

bring the case outside the ambit of the Warsaw Convention.

Respondent, in seeking remedies from the trial court through special
appearance of counsel, is not deemed to have voluntarily submitted itself
to the jurisdiction of the trial court.
Petitioner argues that respondent has effectively submitted itself to the
jurisdiction of the trial court when the latter stated in its
Comment/Opposition to the Motion for Reconsideration that "Defendant [is
at a loss] x x x how the plaintiff arrived at her erroneous impression that it
is/was Euro-Philippines Airlines Services, Inc. that has been making a
special appearance since x x x British Airways x x x has been clearly
specifying in all the pleadings that it has filed with this Honorable Court
that it is the one making a special appearance." 44
In refuting the contention of petitioner, respondent cited La Naval Drug
Corporation v. Court of Appeals 45 where we held that even if a party
"challenges the jurisdiction of the court over his person, as by reason of
absence or defective service of summons, and he also invokes other
grounds for the dismissal of the action under Rule 16, he is not deemed to
be in estoppel or to have waived his objection to the jurisdiction over his
person."46
This issue has been squarely passed upon in the recent case of Garcia v.
Sandiganbayan,47 where we reiterated our ruling in La Naval Drug
Corporation v. Court of Appeals48 and elucidated thus:
Special Appearance to Question a Courts Jurisdiction Is Not
Voluntary Appearance
The second sentence of Sec. 20, Rule 14 of the Revised Rules of Civil
Procedure clearly provides:
Sec. 20. Voluntary appearance. The defendants voluntary appearance in
the action shall be equivalent to service of summons. The inclusion in a
motion to dismiss of other grounds aside from lack of jurisdiction over the
person of the defendant shall not be deemed a voluntary appearance.
Thus, a defendant who files a motion to dismiss, assailing the jurisdiction
of the court over his person, together with other grounds raised therein, is
not deemed to have appeared voluntarily before the court. What the rule
on voluntary appearance the first sentence of the above-quoted rule
means is that the voluntary appearance of the defendant in court is
without qualification, in which case he is deemed to have waived his
defense of lack of jurisdiction over his person due to improper service of
summons.
The pleadings filed by petitioner in the subject forfeiture cases, however,
do not show that she voluntarily appeared without qualification. Petitioner
filed the following pleadings in Forfeiture I: (a) motion to dismiss; (b)
motion for reconsideration and/or to admit answer; (c) second motion for
reconsideration; (d) motion to consolidate forfeiture case with plunder
case; and (e) motion to dismiss and/or to quash Forfeiture I. And in

Forfeiture II: (a) motion to dismiss and/or to quash Forfeiture II; and (b)
motion for partial reconsideration.
The foregoing pleadings, particularly the motions to dismiss, were filed by
petitioner solely for special appearance with the purpose of challenging the
jurisdiction of the SB over her person and that of her three children.
Petitioner asserts therein that SB did not acquire jurisdiction over her
person and of her three children for lack of valid service of summons
through improvident substituted service of summons in both Forfeiture I
and Forfeiture II. This stance the petitioner never abandoned when she
filed her motions for reconsideration, even with a prayer to admit their
attached Answer Ex Abundante Ad Cautelam dated January 22, 2005
setting forth affirmative defenses with a claim for damages. And the other
subsequent pleadings, likewise, did not abandon her stance and defense of
lack of jurisdiction due to improper substituted services of summons in the
forfeiture cases. Evidently, from the foregoing Sec. 20, Rule 14 of the 1997
Revised Rules on Civil Procedure, petitioner and her sons did not voluntarily
appear before the SB constitutive of or equivalent to service of summons.
Moreover, the leading La Naval Drug Corp. v. Court of Appeals applies to
the instant case. Said case elucidates the current view in our jurisdiction
that a special appearance before the courtchallenging its jurisdiction
over the person through a motion to dismiss even if the movant invokes
other groundsis not tantamount to estoppel or a waiver by the movant of
his objection to jurisdiction over his person; and such is not constitutive of
a voluntary submission to the jurisdiction of the court.1avvphi1
Thus, it cannot be said that petitioner and her three children voluntarily
appeared before the SB to cure the defective substituted services of
summons. They are, therefore, not estopped from questioning the
jurisdiction of the SB over their persons nor are they deemed to have
waived such defense of lack of jurisdiction. Consequently, there being no
valid substituted services of summons made, the SB did not acquire
jurisdiction over the persons of petitioner and her children. And perforce,
the proceedings in the subject forfeiture cases, insofar as petitioner and
her three children are concerned, are null and void for lack of jurisdiction.
(Emphasis supplied)
In this case, the special appearance of the counsel of respondent in filing
the Motion to Dismiss and other pleadings before the trial court cannot be
deemed to be voluntary submission to the jurisdiction of the said trial
court. We hence disagree with the contention of the petitioner and rule
that there was no voluntary appearance before the trial court that could
constitute estoppel or a waiver of respondents objection to jurisdiction
over its person.
WHEREFORE, the petition is DENIED. The October 14, 2005 Order of the
Regional Trial Court of Makati City, Branch 132, dismissing the complaint
for lack of jurisdiction, is AFFIRMED.

SO ORDERED

G.R. No. 149547

July 4, 2008
PHILIPPINE AIRLINES, INC., petitioner,
vs.
HON. ADRIANO SAVILLO, Presiding Judge of RTC Branch 30 , Iloilo City, and
SIMPLICIO GRIO, respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the Decision 1 dated 17 August 2001, rendered by the Court
of Appeals in CA-G.R. SP No. 48664, affirming in toto the Order2 dated 9
June 1998, of Branch 30 of the Regional Trial Court (RTC) of Iloilo City,
dismissing the Motion to Dismiss filed by petitioner Philippine Airlines Inc.
(PAL) in the case entitled, Simplicio Grio v. Philippine Airlines, Inc. and
Singapore Airlines, docketed as Civil Case No. 23773.
PAL is a corporation duly organized under Philippine law, engaged in the
business of providing air carriage for passengers, baggage and cargo. 3
Public respondent Hon. Adriano Savillo is the presiding judge of Branch 30
of the Iloilo RTC, where Civil Case No. 23773 was filed; while private
respondent Simplicio Grio is the plaintiff in the aforementioned case.
The facts are undisputed.
Private respondent was invited to participate in the 1993 ASEAN Seniors
Annual Golf Tournament held in Jakarta, Indonesia. He and several
companions decided to purchase their respective passenger tickets from
PAL with the following points of passage: MANILA-SINGAPORE-JAKARTASINGAPORE-MANILA. Private respondent and his companions were made to
understand by PAL that its plane would take them from Manila to
Singapore, while Singapore Airlines would take them from Singapore to
Jakarta.4
On 3 October 1993, private respondent and his companions took the PAL
flight to Singapore and arrived at about 6:00 oclock in the evening. Upon
their arrival, they proceeded to the Singapore Airlines office to check-in for
their flight to Jakarta scheduled at 8:00 oclock in the same evening.
Singapore Airlines rejected the tickets of private respondent and his group
because they were not endorsed by PAL. It was explained to private
respondent and his group that if Singapore Airlines honored the tickets

without PALs endorsement, PAL would not pay Singapore Airlines for their
passage. Private respondent tried to contact PALs office at the airport,
only to find out that it was closed.5
Stranded at the airport in Singapore and left with no recourse, private
respondent was in panic and at a loss where to go; and was subjected to
humiliation, embarrassment, mental anguish, serious anxiety, fear and
distress. Eventually, private respondent and his companions were forced to
purchase tickets from Garuda Airlines and board its last flight bound for
Jakarta. When they arrived in Jakarta at about 12:00 oclock midnight, the
party who was supposed to fetch them from the airport had already left
and they had to arrange for their transportation to the hotel at a very late
hour. After the series of nerve-wracking experiences, private respondent
became ill and was unable to participate in the tournament. 6
Upon his return to the Philippines, private respondent brought the matter
to the attention of PAL. He sent a demand letter to PAL on 20 December
1993 and another to Singapore Airlines on 21 March 1994. However, both
airlines disowned liability and blamed each other for the fiasco. On 15
August 1997, private respondent filed a Complaint for Damages before the
RTC docketed as Civil Case No. 23773, seeking compensation for moral
damages in the amount of P1,000,000.00 and attorneys fees.7
Instead of filing an answer to private respondents Complaint, PAL filed a
Motion to Dismiss8 dated 18 September 1998 on the ground that the said
complaint was barred on the ground of prescription under Section 1(f) of
Rule 16 of the Rules of Court.9 PAL argued that the Warsaw Convention, 10
particularly Article 29 thereof,11 governed this case, as it provides that any
claim for damages in connection with the international transportation of
persons is subject to the prescription period of two years. Since the
Complaint was filed on 15 August 1997, more than three years after PAL
received the demand letter on 25 January 1994, it was already barred by
prescription.
On 9 June 1998, the RTC issued an Order 12 denying the Motion to Dismiss.
It maintained that the provisions of the Civil Code and other pertinent laws
of the Philippines, not the Warsaw Convention, were applicable to the
present case.
The Court of Appeals, in its assailed Decision dated 17 August 2001,
likewise dismissed the Petition for Certiorari filed by PAL and affirmed the 9
June 1998 Order of the RTC. It pronounced that the application of the
Warsaw Convention must not be construed to preclude the application of
the Civil Code and other pertinent laws. By applying Article 1144 of the
Civil Code,13 which allowed for a ten-year prescription period, the appellate
court declared that the Complaint filed by private respondent should not
be dismissed.14
Hence, the present Petition, in which petitioner raises the following issues:
I

THE COURT OF APPEALS ERRED IN NOT GIVING DUE COURSE TO THE

PETITION AS RESPONDENT JUDGE COMMITED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURSIDICTION IN DENYING PALS
MOTION TO DISMISS.
II
THE COURT OF APPEALS ERRED IN NOT APPLYING THE PROVISIONS OF THE
WARSAW CONVENTION DESPITE THE FACT THAT GRIOS CAUSE OF
ACTION AROSE FROM A BREACH OF CONTRACT FOR INTERNATIONAL AIR
TRANSPORT.
III
THE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE COMPLAINT
FILED BY GRIO BEYOND THE TWO (2)-YEAR PERIOD PROVIDED UNDER THE
WARSAW CONVENTION IS ALREADY BARRED BY PRESCRIPTION. 15
The petition is without merit.
In determining whether PALs Motion to Dismiss should have been granted
by the trial court, it must be ascertained if all the claims made by the
private respondent in his Complaint are covered by the Warsaw
Convention, which effectively bars all claims made outside the two-year
prescription period provided under Article 29 thereof. If the Warsaw
Convention covers all of private respondents claims, then Civil Case No.
23773 has already prescribed and should therefore be dismissed. On the
other hand, if some, if not all, of respondents claims are outside the
coverage of the Warsaw Convention, the RTC may still proceed to hear the
case.
The Warsaw Convention applies to "all international transportation of
persons, baggage or goods performed by any aircraft for hire." It seeks to
accommodate or balance the interests of passengers seeking recovery for
personal injuries and the interests of air carriers seeking to limit potential
liability. It employs a scheme of strict liability favoring passengers and
imposing damage caps to benefit air carriers. 16 The cardinal purpose of the
Warsaw Convention is to provide uniformity of rules governing claims
arising from international air travel; thus, it precludes a passenger from
maintaining an action for personal injury damages under local law when
his or her claim does not satisfy the conditions of liability under the
Convention.17
Article 19 of the Warsaw Convention provides for liability on the part of a
carrier for "damages occasioned by delay in the transportation by air of
passengers, baggage or goods." Article 24 excludes other remedies by
further providing that "(1) in the cases covered by articles 18 and 19, any
action for damages, however founded, can only be brought subject to the
conditions and limits set out in this convention." Therefore, a claim covered
by the Warsaw Convention can no longer be recovered under local law, if
the statute of limitations of two years has already lapsed.
Nevertheless, this Court notes that jurisprudence in the Philippines and the

United States also recognizes that the Warsaw Convention does not
"exclusively regulate" the relationship between passenger and carrier on
an international flight. This Court finds that the present case is
substantially similar to cases in which the damages sought were
considered to be outside the coverage of the Warsaw Convention.
In United Airlines v. Uy,18 this Court distinguished between the (1) damage
to the passengers baggage and (2) humiliation he suffered at the hands of
the airlines employees. The first cause of action was covered by the
Warsaw Convention which prescribes in two years, while the second was
covered by the provisions of the Civil Code on torts, which prescribes in
four years.
Similar distinctions were made in American jurisprudence. In Mahaney v.
Air France,19 a passenger was denied access to an airline flight between
New York and Mexico, despite the fact that she held a confirmed
reservation. The court therein ruled that if the plaintiff were to claim
damages based solely on the delay she experienced for instance, the
costs of renting a van, which she had to arrange on her own as a
consequence of the delay the complaint would be barred by the two-year
statute of limitations. However, where the plaintiff alleged that the airlines
subjected her to unjust discrimination or undue or unreasonable preference
or disadvantage, an act punishable under the United States laws, then the
plaintiff may claim purely nominal compensatory damages for humiliation
and hurt feelings, which are not provided for by the Warsaw Convention. In
another case, Wolgel v. Mexicana Airlines,20 the court pronounced that
actions for damages for the "bumping off" itself, rather than the incidental
damages due to the delay, fall outside the Warsaw Convention and do not
prescribe in two years.
In the Petition at bar, private respondents Complaint alleged that both PAL
and Singapore Airlines were guilty of gross negligence, which resulted in
his being subjected to "humiliation, embarrassment, mental anguish,
serious anxiety, fear and distress."21 The emotional harm suffered by the
private respondent as a result of having been unreasonably and unjustly
prevented from boarding the plane should be distinguished from the actual
damages which resulted from the same incident. Under the Civil Code
provisions on tort,22 such emotional harm gives rise to compensation where
gross negligence or malice is proven.
The instant case is comparable to the case of Lathigra v. British Airways.23
In Lathigra, it was held that the airlines negligent act of reconfirming the
passengers reservation days before departure and failing to inform the
latter that the flight had already been discontinued is not among the acts
covered by the Warsaw Convention, since the alleged negligence did not
occur during the performance of the contract of carriage but, rather, days
before the scheduled flight.
In the case at hand, Singapore Airlines barred private respondent from

boarding the Singapore Airlines flight because PAL allegedly failed to

endorse the tickets of private respondent and his companions, despite
PALs assurances to respondent that Singapore Airlines had already
confirmed their passage. While this fact still needs to be heard and
established by adequate proof before the RTC, an action based on these
allegations will not fall under the Warsaw Convention, since the purported
negligence on the part of PAL did not occur during the performance of the
contract of carriage but days before the scheduled flight. Thus, the present
action cannot be dismissed based on the statute of limitations provided
under Article 29 of the Warsaw Convention.
Had the present case merely consisted of claims incidental to the airlines
delay in transporting their passengers, the private respondents Complaint
would have been time-barred under Article 29 of the Warsaw Convention.
However, the present case involves a special species of injury resulting
from the failure of PAL and/or Singapore Airlines to transport private
respondent from Singapore to Jakarta the profound distress, fear, anxiety
and humiliation that private respondent experienced when, despite PALs
earlier assurance that Singapore Airlines confirmed his passage, he was
prevented from boarding the plane and he faced the daunting possibility
that he would be stranded in Singapore Airport because the PAL office was
already closed.
These claims are covered by the Civil Code provisions on tort, and not
within the purview of the Warsaw Convention. Hence, the applicable
prescription period is that provided under Article 1146 of the Civil Code:
Art. 1146. The following actions must be instituted within four years:
(1) Upon an injury to the rights of the plaintiff;
(2) Upon a quasi-delict.
Private respondents Complaint was filed with the RTC on 15 August 1997,
which was less than four years since PAL received his extrajudicial demand
on 25 January 1994. Thus, private respondents claims have not yet
prescribed and PALs Motion to Dismiss must be denied.
Moreover, should there be any doubt as to the prescription of private
respondents Complaint, the more prudent action is for the RTC to continue
hearing the same and deny the Motion to Dismiss. Where it cannot be
determined with certainty whether the action has already prescribed or
not, the defense of prescription cannot be sustained on a mere motion to
dismiss based on what appears to be on the face of the complaint. 24 And
where the ground on which prescription is based does not appear to be
indubitable, the court may do well to defer action on the motion to dismiss
until after trial on the merits.25
IN VIEW OF THE FOREGOING, the instant Petition is DENIED. The assailed
Decision of the Court of Appeals in CA-G.R. SP No. 48664, promulgated on
17 August 2001 is AFFIRMED. Costs against the petitioner.
SO ORDERED.

Ynares

[G.R. No. 127768. November 19, 1999]

UNITED AIRLINES, petitioner, vs. WILLIE J. UY, respondent.
DECISION
BELLOSILLO, J.:
UNITED AIRLINES assails in this petition for review on certiorari
under Rule 45 the 29 August 1995 Decision of the Court of Appeals in CAG.R. CV No. 39761 which reversed the 7 August 1992 order issued by the
trial court in Civil Case No. Q-92-12410 granting petitioner's motion to
dismiss based on prescription of cause of action. The issues sought to be
resolved are whether the notice of appeal to the appellate court was timely
filed, and whether Art. 29 of the Warsaw Convention should apply to the
case at bar.
On 13 October 1989 respondent Willie J. Uy, a revenue passenger on

United Airlines Flight No. 819 for the San Francisco - Manila route, checked
in together with his luggage one piece of which was found to be
overweight at the airline counter. To his utter humiliation, an employee of
petitioner rebuked him saying that he should have known the maximum
weight allowance to be 70 kgs. per bag and that he should have packed his
things accordingly. Then, in a loud voice in front of the milling crowd, she
told respondent to repack his things and transfer some of them from the
overweight luggage to the lighter ones. Not wishing to create further
scene, respondent acceded only to find his luggage still overweight. The
airline then billed him overweight charges which he offered to pay with a
miscellaneous charge order (MCO) or an airline pre-paid credit. However,
the airlines employee, and later its airport supervisor, adamantly refused
to honor the MCO pointing out that there were conflicting figures listed on
it. Despite the explanation from respondent that the last figure written on
the MCO represented his balance, petitioners employees did not
accommodate him. Faced with the prospect of leaving without his luggage,
respondent paid the overweight charges with his American Express credit
card.
Respondents troubles did not end there. Upon arrival in Manila, he
discovered that one of his bags had been slashed and its contents stolen.
He particularized his losses to be around US $5,310.00. In a letter dated 16
October 1989 respondent bewailed the insult, embarrassment and
humiliating treatment he suffered in the hands of United Airlines
employees, notified petitioner of his loss and requested reimbursement
thereof. Petitioner United Airlines, through Central Baggage Specialist Joan
Kroll, did not refute any of respondents allegations and mailed a check
representing the payment of his loss based on the maximum liability of US
$9.70 per pound. Respondent, thinking the amount to be grossly
inadequate to compensate him for his losses, as well as for the indignities
he was subjected to, sent two (2) more letters to petitioner airline, one
dated 4 January 1990 through a certain Atty. Pesigan, and another dated
28 October 1991 through Atty. Ramon U. Ampil demanding an out-of-court
settlement of P1,000,000.00. Petitioner United Airlines did not accede to
his demands.
Consequently, on 9 June 1992 respondent filed a complaint for
damages against United Airlines alleging that he was a person of good
station, sitting in the board of directors of several top 500 corporations and
holding senior executive positions for such similar firms; [ that petitioner
airline accorded him ill and shabby treatment to his extreme
embarrassment and humiliation; and, as such he should be paid moral
damages of at least P1,000,000.00, exemplary damages of at least
P500,000.00, plus attorney's fees of at least P50,000.00. Similarly, he
alleged that the damage to his luggage and its stolen contents amounted
to around $5,310.00, and requested reimbursement therefor.
United Airlines moved to dismiss the complaint on the ground that
respondents cause of action had prescribed, invoking Art. 29 of the Warsaw
Convention which provides Art. 29 (1) The right to damages shall be extinguished if an action is not
brought within two (2) years, reckoned from the date of arrival at the
destination, or from the date on which the aircraft ought to have arrived, or
from the date on which the transportation stopped.

(2) The method of calculating the period of limitation shall be determined

by the law of the court to which the case is submitted.
Respondent countered that par. (1) of Art. 29 of the Warsaw
Convention must be reconciled with par. (2) thereof which states that "the
method of calculating the period of limitation shall be determined by the
law of the court to which the case is submitted." Interpreting thus,
respondent noted that according to Philippine laws the prescription of
actions is interrupted "when they are filed before the court, when there is a
written extrajudicial demand by the creditors, and when there is any
written acknowledgment of the debt by the debtor." Since he made several
demands upon United Airlines: first, through his personal letter dated 16
October 1989; second, through a letter dated 4 January 1990 from Atty.
Pesigan; and, finally, through a letter dated 28 October 1991 written for
him by Atty. Ampil, the two (2)-year period of limitation had not yet been
exhausted.
On 2 August 1992 the trial court ordered the dismissal of the action
holding that the language of Art. 29 is clear that the action must be
brought within two (2) years from the date of arrival at the destination. It
held that although the second paragraph of Art. 29 speaks of deference to
the law of the local court in "calculating the period of limitation," the same
does not refer to the local forums rules in interrupting the prescriptive
period but only to the rules of determining the time in which the action
may be deemed commenced, and within our jurisdiction the action shall be
deemed "brought" or commenced by the filing of a complaint. Hence, the
trial court concluded that Art. 29 excludes the application of our
interruption rules.
Respondent received a copy of the dismissal order on 17 August
1992. On 31 August 1992, or fourteen (14) days later, he moved for the
reconsideration of the trial courts order. The trial court denied the motion
and respondent received copy of the denial order on 28 September 1992.
Two (2) days later, on 1 October 1992 respondent filed his notice of appeal.
United Airlines once again moved for the dismissal of the case this
time pointing out that respondents fifteen (15)-day period to appeal had
already elapsed. Petitioner argued that having used fourteen (14) days of
the reglementary period for appeal, respondent Uy had only one (1) day
remaining to perfect his appeal, and since he filed his notice of appeal two
(2) days later, he failed to meet the deadline.
In its questioned Decision dated 29 August 1995 the appellate court
gave due course to the appeal holding that respondents delay of two (2)
days in filing his notice of appeal did not hinder it from reviewing the
appealed order of dismissal since jurisprudence dictates that an appeal
may be entertained despite procedural lapses anchored on equity and
justice.
On the applicability of the Warsaw Convention, the appellate court
ruled that the Warsaw Convention did not preclude the operation of the
Civil Code and other pertinent laws. Respondents failure to file his
complaint within the two (2)-year limitation provided in the Warsaw
Convention did not bar his action since he could still hold petitioner liable
for breach of other provisions of the Civil Code which prescribe a different
period or procedure for instituting an action. Further, under Philippine laws,
prescription of actions is interrupted where, among others, there is a

written extrajudicial demand by the creditors, and since respondent Uy

sent several demand letters to petitioner United Airlines, the running of the
two (2)-year prescriptive period was in effect suspended. Hence, the
appellate court ruled that respondents cause of action had not yet
prescribed and ordered the records remanded to the Quezon City trial
court for further proceedings.
Petitioner now contends that the appellate court erred in assuming
jurisdiction over respondent's appeal since it is clear that the notice of
appeal was filed out of time. It argues that the courts relax the stringent
rule on perfection of appeals only when there are extraordinary
circumstances, e.g., when the Republic stands to lose hundreds of hectares
of land already titled and used for educational purposes; when the counsel
of record was already dead; and wherein appellant was the owner of the
trademark for more than thirty (30) years, and the circumstances of the
present case do not compare to the above exceptional cases. [if Section 1 of
Rule 45 of the 1997 Rules of Civil Procedure provides that "a party may
appeal by certiorari, from a judgment of the Court of Appeals, by filing with
the Supreme Court a petition for certiorari, within fifteen (15) days from
notice of judgment or of the denial of his motion for reconsideration filed in
due time x x x x" This Rule however should not be interpreted as "to
sacrifice the substantial right of the appellant in the sophisticated altar of
technicalities with impairment of the sacred principles of justice." [ It should
be borne in mind that the real purpose behind the limitation of the period
of appeal is to forestall or avoid an unreasonable delay in the
administration of justice. Thus, we have ruled that delay in the filing of a
notice of appeal does not justify the dismissal of the appeal where the
circumstances of the case show that there is no intent to delay the
administration of justice on the part of appellant's counsel, [ or when there
are no substantial rights affected,[ or when appellant's counsel committed
a mistake in the computation of the period of appeal, an error not
attributable to negligence or bad faith In the instant case, respondent filed
his notice of appeal two (2) days later than the prescribed period. Although
his counsel failed to give the reason for the delay, we are inclined to give
due course to his appeal due to the unique and peculiar facts of the case
and the serious question of law it poses. In the now almost trite but still
good principle, technicality, when it deserts its proper office as an aid to
justice and becomes its great hindrance and chief enemy, deserves scant
consideration. Petitioner likewise contends that the appellate court erred in
ruling that respondent's cause of action has not prescribed since delegates
to the Warsaw Convention clearly intended the two (2)-year limitation
incorporated in Art. 29 as an absolute bar to suit and not to be made
subject to the various tolling provisions of the laws of the forum. Petitioner
argues that in construing the second paragraph of Art. 29 private
respondent cannot read into it Philippine rules on interruption of
prescriptive periods and state that his extrajudicial demand has
interrupted the period of prescription American jurisprudence has declared
that "Art. 29 (2) was not intended to permit forums to consider local
limitation tolling provisions but only to let local law determine whether an
action had been commenced within the two-year period, since the method
of commencing a suit varies from country to country."
Within our jurisdiction we have held that the Warsaw Convention can

be applied, or ignored, depending on the peculiar facts presented by each

case.[if Thus, we have ruled that the Convention's provisions do not
regulate or exclude liability for other breaches of contract by the carrier or
misconduct of its officers and employees, or for some particular or
exceptional type of damage. Neither may the Convention be invoked to
justify the disregard of some extraordinary sort of damage resulting to a
passenger and preclude recovery therefor beyond the limits set by said
Convention.[if ! Likewise, we have held that the Convention does not
preclude the operation of the Civil Code and other pertinent laws. It does
not regulate, much less exempt, the carrier from liability for damages for
violating the rights of its passengers under the contract of carriage,
especially if willful misconduct on the part of the carrier's employees is
found or established Respondent's complaint reveals that he is suing on
two (2) causes of action: (a) the shabby and humiliating treatment he
received from petitioner's employees at the San Francisco Airport which
caused him extreme embarrassment and social humiliation; and, (b) the
slashing of his luggage and the loss of his personal effects amounting to
US $5,310.00.
While his second cause of action - an action for damages arising
from theft or damage to property or goods - is well within the bounds of the
Warsaw Convention, his first cause of action -an action for damages arising
from the misconduct of the airline employees and the violation of
respondent's rights as passenger - clearly is not.
Consequently, insofar as the first cause of action is concerned,
respondent's failure to file his complaint within the two (2)-year limitation
of the Warsaw Convention does not bar his action since petitioner airline
may still be held liable for breach of other provisions of the Civil Code
which prescribe a different period or procedure for instituting the action,
specifically, Art. 1146 thereof which prescribes four (4) years for filing an
action based on torts.
As for respondent's second cause of action, indeed the travaux
preparatories of the Warsaw Convention reveal that the delegates thereto
intended the two (2)-year limitation incorporated in Art. 29 as an absolute
bar to suit and not to be made subject to the various tolling provisions of
the laws of the forum. This therefore forecloses the application of our own
rules on interruption of prescriptive periods. Article 29, par. (2), was
intended only to let local laws determine whether an action had been
commenced within the two (2)-year period, and within our jurisdiction an
action shall be deemed commenced upon the filing of a complaint. Since it
is indisputable that respondent filed the present action beyond the two (2)year time frame his second cause of action must be barred. Nonetheless, it
cannot be doubted that respondent exerted efforts to immediately convey
his loss to petitioner, even employed the services of two (2) lawyers to
follow up his claims, and that the filing of the action itself was delayed
because of petitioner's evasion.
In this regard, Philippine Airlines, Inc. v. Court of Appeals [if is
instructive. In this case of PAL, private respondent filed an action for
damages against petitioner airline for the breakage of the front glass of the
microwave oven which she shipped under PAL Air Waybill No. 0-791013008-3. Petitioner averred that, the action having been filed seven (7)
months after her arrival at her port of destination, she failed to comply

with par. 12, subpar. (a) (1), of the Air Waybill which expressly provided
that the person entitled to delivery must make a complaint to the carrier in
writing in case of visible damage to the goods, immediately after discovery
of the damage and at the latest within 14 days from receipt of the goods.
Despite non-compliance therewith the Court held that by private
respondent's immediate submission of a formal claim to petitioner, which
however was not immediately entertained as it was referred from one
employee to another, she was deemed to have substantially complied with
the requirement. The Court noted that with private respondent's own
zealous efforts in pursuing her claim it was clearly not her fault that the
letter of demand for damages could only be filed, after months of
exasperating follow-up of the claim, on 13 August 1990, and that if there
was any failure at all to file the formal claim within the prescriptive period
contemplated in the Air Waybill, this was largely because of the carrier's
own doing, the consequences of which could not in all fairness be
attributed to private respondent.
In the same vein must we rule upon the circumstances brought
before us. Verily, respondent filed his complaint more than two (2) years
later, beyond the period of limitation prescribed by the Warsaw Convention
for filing a claim for damages. However, it is obvious that respondent was

forestalled from immediately filing an action because petitioner airline

gave him the runaround, answering his letters but not giving in to his
demands. True, respondent should have already filed an action at the first
instance when his claims were denied by petitioner but the same could
only be due to his desire to make an out-of-court settlement for which he
cannot be faulted. Hence, despite the express mandate of Art. 29 of the
Warsaw Convention that an action for damages should be filed within two
(2) years from the arrival at the place of destination, such rule shall not be
applied in the instant case because of the delaying tactics employed by
petitioner airline itself. Thus, private respondent's second cause of action
cannot be considered as time-barred under Art. 29 of the Warsaw
Convention.
WHEREFORE, the assailed Decision of the Court of Appeals reversing and
setting aside the appealed order of the trial court granting the motion to
dismiss the complaint, as well as its Resolution denying reconsideration, is
AFFIRMED. Let the records of the case be remanded to the court of origin
for further proceedings taking its bearings from this disquisition.
SO ORDERED.
Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur.