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Korean Airlines v.

CAe
Facts:

Juanito Lapuz was contracted for employment in Saudi Arabia through Pan Pacific Recruiting
Services, Inc. He was supposed to leave via Korean Airlines, but was initially listed as a chance
passenger. According to Lapuz, he was allowed to check in and was cleared for departure. When
he was on the stairs going to the airplane, a KAL officer pointed at him and shouted, Down!
Down! and he was barred from taking the flight. When he asked for another booking, his ticket
was cancelled. He was unable to report for work and so he lost his employment. KAL alleged that
the agent of Pan Pacific was informed that there are 2 seats possibly available. He gave priority to
Perico, while the other seat was won by Lapuz through lottery. But because only 1 seat became
available, it was given to Perico. The trial court adjudged KAL liable for damages. The decision was
affirmed by the Court of Appeals, with modification on the damages awarded.

Issues:

(1) Whether there is already a contract of carriage between KAL and Lapuz to hold KAL liable for
breach of contract

(2) Whether moral and exemplary damages should be awarded, and to what extent

Held:

(1) The status of Lapuz as standby passenger was changed to that of a confirmed passenger when
his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance
through immigration and customs clearly shows that he had indeed been confirmed as a passenger
of KAL in that flight. KAL thus committed a breach of the contract of carriage between them when
it failed to bring Lapuz to his destination. A contract to transport passengers is different in kind
and degree from any other contractual relation. The business of the carrier is mainly with the
traveling public. It invites people to avail themselves of the comforts and advantages it offers. The
contract of air carriage generates a relation attended with a public duty. Passengers have the right
to be treated by the carrier's employees with kindness, respect, courtesy and due consideration.
They are entitled to be protected against personal misconduct, injurious language, indignities and
abuses from such employees. So it is that any discourteous conduct on the part of these employees
toward a passenger gives the latter an action for damages against the carrier. The breach of
contract was aggravated in this case when, instead of courteously informing Lapuz of his being a

"wait-listed" passenger, a KAL officer rudely shouted "Down! Down!" while pointing at him, thus
causing him embarrassment and public humiliation. The evidence presented by Lapuz shows that
he had indeed checked in at the departure counter, passed through customs and immigration,
boarded the shuttle bus and proceeded to the ramp of KAL's aircraft. In fact, his baggage had
already been loaded in KAL's aircraft, to be flown with him to Jeddah. The contract of carriage
between him and KAL had already been perfected when he was summarily and insolently prevented
from boarding the aircraft.

(2) The Court of Appeals granted moral and exemplary damages because:

a. The findings of the court a quo that the defendant-appellant has committed breach of
contract of carriage in bad faith and in wanton, disregard of plaintiff-appellant's rights as
passenger laid the basis and justification of an award for moral damages.
b. In the instant case, we find that defendant-appellant Korean Air Lines acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner when it "bumped off" plaintiffappellant on November 8, 1980, and in addition treated him rudely and arrogantly as a
"patay gutom na contract worker fighting Korean Air Lines," which clearly shows malice and
bad faith, thus entitling plaintiff-appellant to moral damages.
c. Considering that the plaintiff-appellant's entitlement to moral damages has been fully
established by oral and documentary evidence, exemplary damages may be awarded. In
fact, exemplary damages may be awarded, even though not so expressly pleaded in the
complaint. By the same token, to provide an example for the public good, an award of
exemplary damages is also proper.

A review of the record of this case shows that the injury suffered by Lapuz is not so serious or
extensive as to warrant an award of P1.5 million. The assessment of P100,000 as moral and
exemplary damages in his favor is, in our view, reasonable and realistic.

Tan v. Northwest Airlines


Facts:
On May 31, 1994, Priscilla Tan and Connie Tan boarded a Northwest Airlines plane in Chicago
bound to the Philippines with a stop-over at Detroit. Upon their arrival, they found out that their
baggage was missing. On June 3, they recovered the baggage and discovered that some were
destroyed and soiled. They filed an action for damages, claiming that they suffered mental anguish,
sleepless nights and great damage. Northwest offered to reimburse the cost of repairs of the bags or
purchase price of new bags. The trial court awarded actual, moral and exemplary damages, and
also attorneys fees. The Court of Appeals partially affirmed the decision by deleting moral and
exemplary damages. Hence, Tan filed this instant petition.

Issue:
Whether respondent Airline is liable for moral and exemplary damages for willful misconduct and
breach of contract of carriage
Held:
We agree with the Court of Appeals that respondent was not guilty of 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." Contrary to petitioner's contention, there
was nothing in the conduct of respondent which showed that they were motivated by malice or bad
faith in loading her baggages on another plane. Due to weight and balance restrictions, as a safety
measure, respondent airline had to transport the baggages on a different flight, but with the same
expected date and time of arrival in the Philippines. It is admitted that respondent failed to deliver
petitioner's luggages on time. However, there was no showing of malice in such failure. By its
concern for safety, respondent had to ship the baggages in another flight with the same date of
arrival.
Alitalia v. IAC
Facts:
Dr. Felipa Pablo, an associate professor in the University of the Philippines 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 in Italy in view of her specialized knowledge in foreign substances in food
and the agriculture environment. She would be the second speaker on the first day of the meeting.
Dr. Pablo booked passage on petitioner Alitalia. She arrived in Milan on the day before the meeting,
but was told that her luggage was delayed and was in a succeeding flight from Rome to Milan. The
luggage included her materials for the presentation. The succeeding flights did not carry her
luggage. Desperate, she went to Rome to try to locate the luggage herself, but to no avail. She
returned to Manila without attending the meeting. She demanded reparation for the damages. She
rejected Alitalias offer of free airline tickets and commenced an action for damages. As it turned
out, the luggage was actually forwarded to Ispra, but only a day after the scheduled appearance. It
was returned to her after 11 months. The trial court ruled in favor of Dr. Pablo, and this was
affirmed by the Court of Appeals.
Issues:
(1) Whether the Warsaw Convention should be applied to limit Alitalias liability
(2) Whether Dr. Pablo is entitled to nominal damages
Held:
(1) Under the Warsaw Convention, an air carrier is made liable for damages for:
a. The death, wounding or other bodily injury of a passenger if the accident causing it took
place on board the aircraft or I the course of its operations of embarking or disembarking;
b. The destruction or loss of, or damage to, any registered luggage or goods, if the occurrence
causing it took place during the carriage by air; and

c. Delay in the transportation by air of passengers, luggage or goods.


The convention however denies to the carrier availment of the provisions which exclude or limit his
liability, if the damage is caused by his wilful misconduct, or by such default on his part as is
considered to be equivalent to wilful misconduct. The Convention does not thus operate as an
exclusive enumeration of the instances of an airline's liability, or as an absolute limit of the extent
of that liability. It should be deemed a limit of liability only in those cases where the cause of the
death or injury to person, or destruction, loss or damage to property or delay in its transport is not
attributable to or attended by any wilful misconduct, bad faith, recklessness, or otherwise
improper conduct on the part of any official or employee for which the carrier is responsible, and
there is otherwise no special or extraordinary form of resulting injury.
In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of
petitioner airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but
without appreciable damage. The fact is, nevertheless, that some species of injury was caused to
Dr. Pablo because petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the
time appointed - a breach of its contract of carriage. Certainly, the compensation for the injury
suffered by Dr. Pablo cannot under the circumstances be restricted to that prescribed by the
Warsaw Convention for delay in the transport of baggage.
(2) She is not, of course, entitled to be compensated for loss or damage to her luggage. She is
however entitled to nominal damages which, as the law says, is adjudicated in order that a right of
the plaintiff, which has been violated or invaded by the defendant, may be vindicated and
recognized, and not for the purpose of indemnifying the plaintiff that for any loss suffered and this
Court agrees that the respondent Court of Appeals correctly set the amount thereof at PhP
40,000.00.
The Court also agrees that respondent Court of Appeals correctly awarded attorneys fees to Dr.
Pablo and the amount of PhP 5,000.00 set by it is reasonable in the premises. The law authorizes
recovery of attorneys fees inter alia where, as here, the defendants act or omission has compelled
the plaintiff to litigate with third persons or to incur expenses to protect his interest or where the
court deems it just and equitable.
Prudenciado v. Alliance Transport System
Facts:
On May 11, 1960, Dra. Sofia Prudenciado was driving her car. She was about to cross Taft Avenue
when a taxicab owned by respondent and driven by Jose Leyson bumped her car. The Court of
First Instance of Rizal found Leyson guilty of negligence in the performance of his duty. Alliance
failed to prove that it exercised the diligence of a good father of a family in the selection and
supervision of it employees, and was held jointly and severally liable.
Issue:
Whether the petitioner is entitled to moral and exemplary damages, and to what extent
Held:
A careful review of the records makes it readily apparent that the injuries sustained by Dra.
Prudenciado are not as serious or extensive as they were claimed to be, to warrant the damages
awarded by the trial court. In fact, a closer scrutiny of the exhibits showing a moderate damage to
the car can by no stretch of the imagination produce a logical conclusion that such disastrous

effects of the accident sought to be established, actually took place, not to mention the fact that
such were not supported by the medical findings presented. Unquestionably, therefore, the
damages imposed' by the lower court should be reduced to more reasonable levels. On the other
hand, it will be observed that the reduction of the damages made by the Court of Appeals is both
too drastic and unrealistic, to pass the test of reasonableness, which appears to be the underlying
basis to justify such reduction. While the damages sought to be recovered were not satisfactorily
established to the extent desired by the petitioner, it was nonetheless not disputed that an accident
occurred due to the fault and negligence of the respondents; that Dra. Prudenciado suffered a
brain concussion which although mild can admittedly produce the effects complained of by her
and that these symptoms can develop after several years and can lead to some, serious handicaps
or predispose the patient to other sickness. Being a doctor by profession, her fears can be more real
and intense than an ordinary person. Otherwise stated, she is undeniably a proper recipient of
moral damages which are proportionate to her suffering.
The findings of the trial court in the case at bar which became the basis of the award of exemplary
damages are to the effect that it is more apparent from the facts, conditions and circumstances
obtaining in the record of the case that respondent driver was running at high speed after turning
to the right along Taft Ave. coming from Ayala Boulevard, considering that the traffic was clear.
Failing to notice petitioner's car, he failed to apply his brakes and did not even swerve to the right
to avoid the collision. The Court of Appeals conforms with aforesaid findings of the trial court but
is not prepared to accept that there was gross negligence on the part of the driver to justify the
imposition of exemplary damages. However, a driver running at full speed on a rainy day, on a
slippery road in complete disregard of the hazards to life and limb of other people cannot be said to
be acting in anything less than gross negligence. The frequent incidence of accidents of this nature
caused by taxi drivers indeed demands corrective measures.