IV.
Carriage of Passengers It cannot be supposed, without clear proof, that respondent had willingly done away
14. JAPAN AIRLINES, petitioner,
vs.
JESUS SIMANGAN, respondent.
GR 170141 (April 22, 2008)
FACTS:
In 1991,Respondent Simangan decided to donate a kidney to his ailing
cousin, Loreto Simangan, in UCLA School of Medicine in Los Angeles,
California,U.S.A.
Respondent needed to go to the United States to complete his preliminary
work-up and donation surgery. Hence, to facilitaterespondent's travel to the
United States, UCLA wrote a letter to the American Consulate in Manila to
arrange for his visa.
In due time,respondent was issued an emergency U.S. visa by the American
Embassy in Manila.Having obtained an emergency U.S. visa, respondent
purchased a round trip plane ticket from petitioner Japan Airlines (JAL) and
was issued the corresponding boarding pass.
While inside the airplane, JAL'sairline crew suspected respondent of carrying
a falsified travel document and imputed that he would only use the trip to the
United States as a pretext to stay and work in Japan.
The stewardess asked respondent to show his travel documents. Shortly
after, the stewardess along with aJapanese and a Filipino haughtily ordered
him to stand up and leave the plane.
Respondent protested, explaining that he was issued a U.S.visa. However,
He was still constrained to go out of the plane. The plane took off and
respondent was left behind.
Respondent was refunded with the cost of his ticket minus 500 USD, when
JAL found out eventually that his travel documents were not falsified and in
order.Hence, he filed an action for damages against JAL airlines.
RTC RULING:
JAL is liable for breach of contract of carriage. JAL appealed contending
it is not guilty of breach of contract of carriage and not liable for damages.
CA RULING:
Affirmed RTC Decision with modification as to amount of damages for
being scandalously excessive.
ISSUE: WON JAL is guilty of breach of contract of carriage.
HELD:
JAL is guilty of breach of contract of carriage.JAL is guilty of breach of
contract of carriage. That respondent purchased a round trip plane ticket from JAL
and was issued the corresponding boarding pass is uncontroverted. His plane ticket,
boarding pass, travel authority and personal articles were subjected to rigid
immigration and security procedure. After passing through said immigration and
security procedure, he was allowed by JAL to enter its airplane to fly to Los Angeles,
California, U.S.A. via Narita, Japan. Concisely, there was a contract of carriage
between JAL and respondent.Nevertheless, JAL made respondent get off the plane
on his scheduled. He was not allowed by JAL to fly. JAL thus failed to comply with its
obligation under the contract of carriage.
JAL justifies its action by arguing that there was "a need to verify the
authenticity of respondent's travel document." It alleged that no one from its airport
staff had encountered a parole visa before. It further contended that respondent
agreed to fly the next day so that it could first verify his travel document, hence, there
was novation. It maintained that it was not guilty of breach of contract of carriage as
respondent was not able to travel to the United States due to his own voluntary
desistance.
The contentions lack merit. JAL did not allow respondent to fly. It
informed respondent that there was a need to first check the authenticity of his travel
documents with the U.S. Embassy. As admitted by JAL, "the flight could not wait for
Mr.Simangan because it was ready to depart."
Since JAL definitely declared that the flight could not wait for respondent,
it gave respondent no choice but to be left behind. The latter was unceremoniously
bumped off despite his protestations and valid travel documents and notwithstanding
his contract of carriage with JAL. Damage had already been done when respondent
was offered to fly the next day on July 30, 1992. Said offer did not cure JAL's default.
Considering that respondent was forced to get out of the plane and left
behind against his will, he could not have freely consented to be rebooked the next
day. In short, he did not agree to the alleged novation. Since novation implies a
waiver of the right the creditor had before the novation, such waiver must be express.
TRANSPORTATION LAW case digest
with his right to fly on July 29, 1992.
Apart from the fact that respondent's plane ticket, boarding pass, travel
authority and personal articles already passed the rigid immigration and security
routines, JAL, as a common carrier, ought to know the kind of valid travel documents
respondent carried. As provided in Article 1755 of the New Civil Code: "A common
carrier is bound to carry the passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with a due regard for all
the circumstances." Thus, JAL's defense of "verification of respondent's documents"
in its breach of contract of carriage is untenable.
It bears repeating that the power to admit or not an alien into the country
is a sovereign act which cannot be interfered with even by JAL.In an action for breach
of contract of carriage, all that is required of plaintiff is to prove the existence of such
contract and its non-performance by the carrier through the latter's failure to carry the
passenger safely to his destination. Respondent has complied with these twin
requisites.
15. G.R. No. 150843 March 14, 2003
CATHAY PACIFIC AIRWAYS, LTD., petitioner, vs. SPOUSES DANIEL VAZQUEZ
and MARIA LUISA MADRIGAL VAZQUEZ, respondents.
Case:
Is an involuntary upgrading of an airline passenger’s accommodation from one
class to a more superior class at no extra cost a breach of contract of carriage that
would entitle the passenger to an award of damages? This is a novel question that
has to be resolved in this case.
Facts:
Cathay is a common carrier engaged in the business of transporting passengers
and goods by air. Among the many routes it services is the Manila-Hongkong-
Manila course. As part of its marketing strategy, Cathay accords its frequent flyers
membership in its Marco Polo Club. The members enjoy several privileges, such
as priority for upgrading of booking without any extra charge whenever an
opportunity arises. Thus, a frequent flyer booked in the Business Class has priority
for upgrading to First Class if the Business Class Section is fully booked.
Respondents-spouses Dr. Daniel Earnshaw Vazquez and Maria Luisa Madrigal
Vazquez are frequent flyers of Cathay and are Gold Card members of its Marco
Polo Club. On 24 September 1996, the Vazquezes, together with their maid and
two friends Pacita Cruz and Josefina Vergel de Dios, went to Hongkong for
pleasure and business.
For their return flight to Manila on 28 September 1996, they were booked on
Cathay’s Flight CX-905, with departure time at 9:20 p.m. Two hours before their
time of departure, the Vazquezes and their companions checked in their luggage
at Cathay’s check-in counter at Kai Tak Airport and were given their respective
boarding passes, to wit, Business Class boarding passes for the Vazquezes and
their two friends, and Economy Class for their maid. They then proceeded to the
Business Class passenger lounge.
When boarding time was announced, the Vazquezes and their two friends went to
Departure Gate No. 28, which was designated for Business Class passengers. Dr.
Vazquez presented his boarding pass to the ground attendant by the name of
Clara Lai Han Chiu. When Ms. Chiu glanced at the computer monitor, she saw a
message that there was a "seat change" from Business Class to First Class for the
Vazquezes.
Ms. Chiu approached Dr. Vazquez and told him that the Vazquezes’
accommodations were upgraded to First Class. Dr. Vazquez refused the upgrade,
reasoning that it would not look nice for them as hosts to travel in First Class and
their guests, in the Business Class; and moreover, they were going to discuss
business matters during the flight. He also told Ms. Chiu that she could have other
passengers instead transferred to the First Class Section.
Taken aback by the refusal for upgrading, Ms. Chiu consulted her supervisor, who
told her to handle the situation and convince the Vazquezes to accept the
upgrading. Ms. Chiu informed the latter that the Business Class was fully booked,
and that since they were Marco Polo Club members they had the priority to be
upgraded to the First Class. Dr. Vazquez continued to refuse, so Ms. Chiu told
them that if they would not avail themselves of the privilege, they would not be
allowed to take the flight. Eventually, after talking to his two friends, Dr. Vazquez
gave in. He and Mrs. Vazquez then proceeded to the First Class Cabin.
Upon their return to Manila, the Vazquezes, in a letter of 2 October 1996
addressed to Cathay’s Country Manager, demanded that they be indemnified in
the amount of P1million for the "humiliation and embarrassment" caused by its
employees. They also demanded "a written apology from the management of
Cathay, preferably a responsible person with a rank of no less than the Country
Page | 1
 Manager, as well as the apology from Ms. Chiu" within fifteen days from receipt of
the letter.
In his reply of 14 October 1996, Mr. Larry Yuen, the assistant to Cathay’s Country
Manager Argus Guy Robson, informed the Vazquezes that Cathay would
investigate the incident and get back to them within a week’s time.
On 8 November 1996, after Cathay’s failure to give them any feedback within its
self-imposed deadline, the Vazquezes instituted before the Regional Trial Court of
Makati City an action for damages against Cathay
In their complaint, the Vazquezes alleged that when they informed Ms. Chiu that
they preferred to stay in Business Class, Ms. Chiu in harsh voice threatened" that
they could not board and leave with the flight unless they go to First Class, they
were humiliated because the incident was witnessed by all the other passengers
The only problem is the legal effect of the upgrading of the seat accommodation of the
waiting for boarding. They also claimed that they were unjustifiably delayed to
Vazquezes. Did it constitute a breach of contract?
board the plane, and when they were finally permitted to get into the aircraft, he
was not assisted by any of the crew in putting up his luggage, his bilateral carpal
tunnel syndrome was aggravated, causing him extreme pain on his arm and wrist.
The Vazquezes also averred that they "belong to the uppermost and absolutely top
elite of both Philippine Society and the Philippine financial community, [and that]
they were among the wealthiest persons in the Philippine[s]."
In its answer, Cathay alleged that it is a practice among commercial airlines to
upgrade passengers to the next better class of accommodation, whenever an
opportunity arises, such as when a certain section is fully booked. Priority in
upgrading is given to its frequent flyers, who are considered favored passengers
like the Vazquezes. Cathay also asserted that its employees at the Hong Kong
airport acted in good faith in dealing with the Vazquezes; none of them shouted,
humiliated, embarrassed, or committed any act of disrespect against them (the
Vazquezes).
They also testified that overbooking is a widely accepted practice in the airline
industry and is in accordance with the International Air Transport Association
(IATA) regulations. Airlines overbook because a lot of passengers do not show up
for their flight. With respect to Flight CX-905, there was no overall overbooking to a
degree that a passenger was bumped off or downgraded.
Trial court decided in favor of plaintiffs Vazquez spouses and against defendant
Cathay Pacific Airways
Court of Appeals, in its decision of 24 July 2001, deleted the award for exemplary
damages; and it reduced the awards for damages.
The CA ratiocinated that by upgrading the Vazquezes to First Class, Cathay
novated the contract of carriage without the former’s consent. There was a breach
of contract not because Cathay overbooked the Business Class Section of Flight
Issue(2): We are not, however, convinced that the upgrading or the breach of
CX-905 but because the latter pushed through with the upgrading despite the
contract was attended by fraud or bad faith.
objections of the Vazquezes. However, the CA was not convinced that Ms. Chiu
shouted at, or meant to be discourteous to, Dr. Vazquez, although it might seemed
that way to the latter, who was a member of the elite in Philippine society and was
not therefore used to being harangued by anybody. Ms. Chiu was a Hong Kong
Chinese whose fractured Chinese was difficult to understand and whose manner of
speaking might sound harsh or shrill to Filipinos because of cultural differences.
There is no proof that he asked for help and was refused even after saying that he
was suffering from "bilateral carpal tunnel syndrome." Anent the delay of Yuen in
responding to the demand letter of the Vazquezes, the CA found it to have been
sufficiently explained.
The Vazquezes and Cathay separately filed MFR of the decision, both of which
were denied by the Court of Appeals.
Cathay seasonably filed with us this petition in this case. Cathay maintains that the
award for moral damages has no basis. If any damage had been suffered by the
Vazquezes, it was damnum absque injuria, which is damage without injury,
damage or injury inflicted without injustice, loss or damage without violation of a
legal right, or a wrong done to a man for which the law provides no remedy.
Vazquezes assert that the Court of Appeals was correct in granting awards for
moral and nominal damages and attorney’s fees in view of the breach of contract
committed by Cathay for transferring them from the Business Class to First Class
Section without prior notice or consent and over their vigorous objection. They
likewise argue that the issuance of passenger tickets more than the seating
capacity of each section of the plane is in itself fraudulent, malicious and tainted
with bad faith.
Issues:
1. WON by upgrading the seat accommodation of the Vazquezes from
Business Class to First Class Cathay breached its contract of carriage
with the Vazquezes? Yes
2. WON the upgrading was tainted with fraud or bad faith? No
3. WON the Vazquezes are entitled to damages? Award of damages was
modefied
Issue(1): We resolve the first issue in the affirmative.
TRANSPORTATION LAW case digest
A contract is a meeting of minds between two persons whereby one agrees to give
something or render some service to another for a consideration. There is no
contract unless the following requisites concur: (1) consent of the contracting
parties; (2) an object certain which is the subject of the contract; and (3) the cause
of the obligation which is established.
Undoubtedly, a contract of carriage existed between Cathay and the Vazquezes.
They voluntarily and freely gave their consent to an agreement whose object was
the transportation of the Vazquezes from Manila to Hong Kong and back to Manila,
with seats in the Business Class Section of the aircraft, and whose cause or
consideration was the fare paid by the Vazquezes to Cathay.
Breach of contract is defined as the "failure without legal reason to comply with the
terms of a contract." It is also defined as the "[f]ailure, without legal excuse, to
perform any promise which forms the whole or part of the contract."
In previous cases, the breach of contract of carriage consisted in either the
bumping off of a passenger with confirmed reservation or the downgrading of a
passenger’s seat accommodation from one class to a lower class. In this case,
what happened was the reverse.
Vazquezes never denied that they were members of Cathay’s Marco Polo Club.
They knew that as members of the Club, they had priority for upgrading of their
seat accommodation at no extra cost when an opportunity arises. But, just like
other privileges, such priority could be waived. The Vazquezes should have been
consulted first whether they wanted to avail themselves of the privilege or would
consent to a change of seat accommodation before their seat assignments were
given to other passengers.
Normally, one would appreciate and accept an upgrading, for it would mean a
better accommodation. But, whatever their reason was and however odd it might
be, the Vazquezes had every right to decline the upgrade and insist on the
Business Class accommodation they had booked for and which was designated in
their boarding passes. They clearly waived their priority or preference when they
asked that other passengers be given the upgrade. It should not have been
imposed on them over their vehement objection. By insisting on the upgrade,
Cathay breached its contract of carriage with the Vazquezes.
Bad faith and fraud are allegations of fact that demand clear and convincing proof.
They are serious accusations that can be so conveniently and casually invoked,
and that is why they are never presumed. They amount to mere slogans or
mudslinging unless convincingly substantiated by whoever is alleging them.
Fraud has been defined to include an inducement through insidious machination.
Insidious machination refers to a deceitful scheme or plot with an evil or devious
purpose. Deceit exists where the party, with intent to deceive, conceals or omits to
state material facts and, by reason of such omission or concealment, the other
party was induced to give consent that would not otherwise have been given.
Bad faith does not simply connote bad judgment or negligence; it imports a
dishonest purpose or some moral obliquity and conscious doing of a wrong, a
breach of a known duty through some motive or interest or ill will that partakes of
the nature of fraud.
We find no persuasive proof of fraud or bad faith in this case. The Vazquezes were
not induced to agree to the upgrading through insidious words or deceitful
machination or through willful concealment of material facts. Upon boarding, Ms.
Chiu told the Vazquezes that their accommodations were upgraded to First Class
in view of their being Gold Card members of Cathay’s Marco Polo Club. She was
honest in telling them that their seats were already given to other passengers and
the Business Class Section was fully booked. Ms. Chiu might have failed to
consider the remedy of offering the First Class seats to other passengers. But, we
find no bad faith in her failure to do so, even if that amounted to an exercise of
poor judgment.
Neither was the transfer of the Vazquezes effected for some evil or devious
purpose. The First Class Section is better than the Business Class Section in
terms of comfort, quality of food, and service from the cabin crew; thus, the
difference in fare between the First Class and Business Class at that time was
$250. Needless to state, an upgrading is for the better condition and, definitely, for
the benefit of the passenger.
We are not persuaded by the Vazquezes’ argument that the overbooking of the
Business Class Section constituted bad faith on the part of Cathay. Section 3 of
the Economic Regulation No. 7 of the Civil Aeronautics Board, as amended,
provides:
Page | 2
 Sec 3. Scope. – xx. Furthermore, this Regulation is designed to cover
only honest mistakes on the part of the carriers and excludes deliberate
and willful acts of non-accommodation. Provided, however, that
overbooking not exceeding 10% of the seating capacity of the aircraft
shall not be considered as a deliberate and willful act of non-
accommodation.
It is clear from this section that an overbooking that does not exceed ten percent is
not considered deliberate and therefore does not amount to bad faith. Here, while
there was admittedly an overbooking of the Business Class, there was no evidence
of overbooking of the plane beyond ten percent, and no passenger was ever
bumped off or was refused to board the aircraft.
Issue(3):Issue on damages in case i-ask ni maam
Moral damages include physical suffering, mental anguish, fright, serious anxiety,
besmirched reputation, wounded feelings, moral shock, social humiliation, and
similar injury.
Moral damages predicated upon a breach of contract of carriage may only be
recoverable in instances where the carrier is guilty of fraud or bad faith or where
the mishap resulted in the death of a passenger. Where in breaching the contract
of carriage the airline is not shown to have acted fraudulently or in bad faith,
liability for damages is limited to the natural and probable consequences of the
breach of the obligation which the parties had foreseen or could have reasonably
foreseen. In such a case the liability does not include moral and exemplary
damages.
In this case, we have ruled that the breach of contract of carriage, which consisted
in the involuntary upgrading of the Vazquezes’ seat accommodation, was not
attended by fraud or bad faith. The Court of Appeals’ award of moral damages has,
therefore, no leg to stand on.
The deletion of the award for exemplary damages by the Court of Appeals is
correct. It is a requisite in the grant of exemplary damages that the act of the
offender must be accompanied by bad faith or done in wanton, fraudulent or
malevolent manner. Such requisite is absent in this case. Moreover, to be entitled
thereto the claimant must first establish his right to moral, temperate, or
compensatory damages. Since the Vazquezes are not entitled to any of these
damages, the award for exemplary damages has no legal basis. And where the
awards for moral and exemplary damages are eliminated, so must the award for
attorney’s fees.
The most that can be adjudged in favor of the Vazquezes for Cathay’s breach of
contract is an award for nominal damages under Article 2221 of the Civil Code,
which reads as follows:
Article 2221. Nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized, and not for the purpose of indemnifying the
plaintiff for any loss suffered by him.
Nonetheless, considering that the breach was intended to give more benefit and
advantage to the Vazquezes by upgrading their Business Class accommodation to
First Class because of their valued status as Marco Polo members, we reduce the
award for nominal damages to P5,000.
Before writing finis to this decision, we find it well-worth to quote the apt
observation of the Court of Appeals regarding the awards adjudged by the trial
court:
 We are not amused but alarmed at the lower court’s unbelievable alacrity,
bordering on the scandalous, to award excessive amounts as damages.
In their complaint, appellees asked for P1 million as moral damages but
the lower court awarded P4 million; they asked for P500,000.00 as
exemplary damages but the lower court cavalierly awarded a whooping
P10 million; they asked for P250,000.00 as attorney’s fees but were
awarded P2 million; they did not ask for nominal damages but were
awarded P200,000.00. It is as if the lower court went on a rampage, and
why it acted that way is beyond all tests of reason. In fact the
excessiveness of the total award invites the suspicion that it was the
result of "prejudice or corruption on the part of the trial court."
WHEREFORE, the instant petition is hereby partly GRANTED. CA decision
MODIFIED, the awards for moral damages and attorney’s fees are deleted, and
nominal damages is reduced to P5,000.
16. TAN VS NORTHWEST AIRLINES
[G.R. No. 135802. March 3, 2000]
PRISCILLA L. TAN, petitioner, vs. NORTHWEST AIRLINES, INC., respondent.
FACTS- On May 31, 1994, Priscilla Tan and Connie Tan boarded Northwest
Airlines in Chicago, US bound for the Philippines, with a stop-over at Detroit. They
arrived at the NAIA on June 1, 1994 at about 10:40 in the evening.
TRANSPORTATION LAW case digest
Upon their arrival, petitioner and her companion Connie found that their
baggages were missing. They returned to the airport in the evening of the following
day and they were informed that their baggages might still be in another plane in
Tokyo, Japan.
On June 3, 1994, they recovered their baggages and discovered that
some of its contents were destroyed and soiled.
Claiming that they "suffered mental anguish, sleepless nights and great
damage" because of Northwest's failure to inform them in advance that their
baggages would not be loaded on the same flight they boarded and because of their
delayed arrival, they demanded from Northwest Airlines compensation for the
damages they suffered. Petitioner sent demand letters to Northwest Airlines, but the
latter did not respond hence the filing of the case with the RTC.
In its answer to the complaint, respondent Northwest Airlines did not deny
that the baggages of petitioners were not loaded. Petitioner's baggages could not be
carried on the same flight because of "weight and balance restrictions." However, the
baggages were loaded in another Northwest Airlines flight.
When petitioner received her baggages in damaged condition, Northwest
offered to either (1) reimburse the cost or repair of the bags; or (2) reimburse the cost
for the purchase of new bags, upon submission of receipts.
RTC found Northwest Airlines liable for damages.
Northwest Airlines appealed contending that the RTC erred in finding it
guilty of breach of contract of carriage and of willful misconduct and awarded
damages which had no basis in fact or were otherwise excessive.
ISSUE- W/N respondent is liable for moral and exemplary damages for willful
misconduct and breach of the contract of air carriage.
RULING- Northwest Airlines 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.’
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. To ensure the safety of each flight,
Northwest's personnel determine every flight's compliance with "weight and balance
restrictions."
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.
"Bad faith does not simply connote bad judgment or negligence, it imports
a dishonest purpose or some moral obliquity and conscious doing of a wrong, a
breach of known duty through some motive or interest or ill-will that partakes of the
nature of fraud."
"Where in breaching the contract of carriage the defendant airline is not
shown to have acted fraudulently or in bad faith, liability for damages is limited to the
natural and probable consequences of the breach of obligation which the parties had
foreseen or could have reasonably foreseen. In that case, such liability does not
include moral and exemplary damages."
17. AUGUSTO BENEDICTO SANTOS III, represented by his father and legal
guardian, Augusto Benedicto Santos, petitioner, vs. NORTHWEST ORIENT
AIRLINES and COURT OF APPEALS, respondents.
NATURE OF THE CASE:
Page | 3
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.
FACTS:
The petitioner is a minor and a resident of the Philippines. Private
respondent Northwest Orient Airlines (NOA) is a foreign corporation with principal
office in Minnesota, U.S.A. and licensed to do business and maintain a branch office
in the Philippines.
On October 21, 1986, the petitioner purchased from NOA a round-trip ticket
in San Francisco. U.S.A., for his flight from San Francisco to Manila via Tokyo and
back. The scheduled departure date from Tokyo was December 20, 1986. No date
was specified for his return to San Francisco.
On December 19, 1986, the petitioner checked in at the NOA counter in the
San Francisco airport for his scheduled departure to Manila. Despite a previous
confirmation and re-confirmation, he was informed that he had no reservation for his
flight from Tokyo to Manila. He therefore had to be wait-listed.
On March 12, 1987, the petitioner sued NOA for damages in the Regional
Trial Court of Makati. On April 13, 1987, NOA moved to dismiss the complaint on the
ground of lack of jurisdiction. Citing the above-quoted article, it contended that the
complaint could be instituted only in the territory of one of the High Contracting
Parties, before:
1. the court of the domicile of the carrier;
2. the court of its principal place of business;
3. the court where it has a place of business through which the contract
had been made;
4. the court of the place of destination.
The private respondent contended that the Philippines was not its domicile
nor was this its principal place of business. Neither was the petitioner's ticket issued in
this country nor was his destination Manila but San Francisco in the United States.
RTC granted the motion and dismissed the case. The petitioner appealed to the
Court of Appeals, which affirmed the decision of the lower court. On June 26, 1991,
the petitioner filed a motion for reconsideration, but the same was denied.
ISSUES:
(1) WON Article 28(1) of the Warsaw Convention is constitutional; and
(2) WON Philippine courts has jurisdiction over the case.
RULING:
(1) 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."
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.
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.
TRANSPORTATION LAW case digest
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 ever-changing 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.
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. There 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.
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.
(2) 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, there are later cases cited by
the private respondent supporting the conclusion that the provision is jurisdictional.
Venue and jurisdiction are entirely distinct matters. Jurisdiction may not be
conferred by consent or waiver upon d court which otherwise would have no
jurisdiction over the subject-matter of an action; but the venue of an action as fixed by
Page | 4
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.
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.
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 states 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:
Art. 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.
The petitioner also invokes KLM Royal Dutch Airlines v. RTC, 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, where the same court held that Article 28(1) is a
jurisdictional provision. Neither of these cases is binding 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. 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 on 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:
TRANSPORTATION LAW case digest
. . . 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 Los 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 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 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 as 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. In French, he says, the "domicile" of
the carrier means every place where it has a branch office.
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.
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(l) of the Convention, which reads as follows:
Art. 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 with 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 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).
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
Page | 5
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. \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.
The Court can only sympathize with the petitioner, who must prosecute his
claims in the United States rather than in his own country at least 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 in known for its sense of fairness and, generally, its strict adherence to the
rule of law.
18. [G.R. No. 119641. May 17, 1996]
PHILIPPINE AIRLINES, INC., petitioner, vs. COURT OF APPEALS, DR.
JOSEFINO MIRANDA and LUISA MIRANDA, respondents.
FACTS:
In this appeal by certiorari, petitioner PAL assails the decision of respondent CA which
affirmed the judgment of the TC finding herein petitioner PAL liable to plaintiffs, Dr.
Josefino Miranda and Luisa Miranda.
Sometime in May, 1988, Dr. Josefino Miranda and his wife, Luisa, who
were residents of Surigao City, went to the USA on a regular flight of
PAL.
On June 19, 1988, after a stay of over a month there, they obtained
confirmed bookings from PAL’s San Francisco Office for PAL Flight PR
101 from San Francisco to Manila via Honolulu on June 21, 1988; PAL
Flight PR 851 from Manila to Cebu on June 24, 1988; and PAL Flight PR
905 from Cebu to Surigao also on June 24, 1988.
Accordingly, on June 21, 1988, private respondents boarded PAL Flight
PR 101 in San Francisco with 5 pieces of baggage.
After a stopover at Honolulu, and upon arrival in Manila on June 23,
1988, they were told by the PAL personnel that their baggage consisting
of two balikbayan boxes, two pieces of luggage and one fishing rod case
were off-loaded at Honolulu, Hawaii due to weight limitations.
Consequently, private respondents missed their connecting flight
from Manila to Cebu City since they had to wait for their baggage which
arrived the following day, June 24, 1988, after their pre-scheduled
connecting flight had left. They consequently also missed their other
scheduled connecting flight from Cebu City to Surigao City.
On June 25, 1988, they departed for Cebu City and therefrom private
respondents had to transfer to PAL Flight 471 for Surigao City. On the
way to Surigao City, the pilot announced that they had to return to Mactan
Airport due to some mechanical problem. While at Mactan Airport, the
passengers were provided by PAL with lunch and were booked for the
afternoon flight to Surigao City. However, said flight was also canceled.
Since there were no more flights for Surigao City that day, private
respondents asked to be billeted at the Cebu Plaza Hotel where they
usually stay whenever they happen to be in Cebu City. They were,
however, told by the PAL employees that they could not be
accommodated at said hotel supposedly because it was fully booked.
Contrarily, when Dr. Miranda called the hotel, he was informed that he
and his wife could be accommodated there.
Inasmuch as the shuttle bus had already left by the time private
respondents were ready to go to the hotel, PAL offered them P 150.00 to
include the fare for the return trip to the airport. Dr. Miranda asked for P
150.00 more as he and his wife, along with all of their baggages, could
not be accommodated in just one taxi, aside from the need for tipping
money for hotel boys. Upon refusal of this simple request, private
respondents did not accept the offer of PAL.
TRANSPORTATION LAW case digest
When private respondents tried to retrieve their baggage, they were told
this time that the same were loaded on another earlier PAL flight
to Surigao City. Thus, private respondents proceeded to the
hotel sans their baggage and of which they were deprived for the
remainder of their trip. Private respondents were finally able to leave on
board the first PAL flight to Surigao City only on June 26, 1988.
Thereafter, they instituted an action for damages which, after trial as
well as on appeal, was decided in their favor.
Petitioner PAL has come to us via the instant petition for review on
certiorari.
Petitioner PAL’s contentions: CA erred. (1) for applying Articles 2220,
2232 and 2208 of the Civil Code when it sustained the award of the
court a quo for moral and exemplary damages and attorney’s fees
despite absence of bad faith on its part; (2) for not applying the express
provisions of the contract of carriage and pertinent provisions of the
Warsaw Convention limiting its liability to US$20.00 per kilo of baggage.
ISSUE 1: WON the factual findings of the CA of bad faith on the part of petitioner and
the award of damages against it are correct. YES.
Petitioner argues that there was no bad faith on its part for while there
was admittedly a delay in fulfilling its obligation under the contract of
carriage with respect to the transport of passengers and the delivery of
their baggage, such delay was justified by the paramount consideration of
ensuring the safety of its passengers. It likewise maintains that its
employees treated private respondents fairly and with courtesy to the
extent of acceding to most of their demands in order to mitigate the
inconvenience occasioned by the measures undertaken by the airline to
ensure passenger safety. Cause of the offloading of baggage: Exceeded
the weight limitation.
Petitioner enumerates the following incidents as indicative of its good
faith in dealing with private respondents: (1) The cancellation of the flight
to Surigao City due to mechanical/engine trouble was to ensure the
safety of passengers and cargo; (2) PAL offered to shoulder private
respondents’ preferred accommodations, meals and transportation while
in Cebu City with more than the usual amenities given in cases of flight
disruption, and gave them priority in the following day’s flight to Surigao
City; (3) PAL employees did not act rudely towards private respondents
and its managerial personnel even gave them special attention; (4) It was
reasonable for PAL to limit the transportation expense to P150.00,
considering that the fare between the airport and the hotel was only
P75.00, and they would be picked up by the shuttle bus from the hotel to
the airport, while the request for money for tips could not be justified;
and (5) The inadvertent loading of private respondents’ baggage on the
replacement flight to Surigao City was at most simple and excusable
negligence due to the numerous flight disruptions and large number of
baggages on that day.
Crucial to the determination of the propriety of the award of damages in
this case is the lower court’s findings on the matter of bad faith: TC: “In
the present case there was a breach of contract committed in bad faith by
the defendant airlines. As previously noted, plaintiffs had a confirmed
booking on PAL Flight PR 101 from San Francisco to Manila. Therefore
plaintiffs were entitled to an assured passage not only for themselves but
for their baggage as well. They had a legal right to rely on this. . The off-
loading or bumping off by defendant airlines of plaintiffs’ baggage to give
way to other passengers or cargo was an arbitrary and oppressive act
which clearly amounted to a breach of contract committed in bad faith
and with malice. Bad faith has been defined as a breach of a known duty
through some motive of interest or ill will.
CA affirmed the decision of TC: As earlier noted, the off-loading of
appellees’ baggag(e) was done in bad faith because it was not really for
the purpose of complying with weight limitations but to give undue
preference to newly-loaded baggag(e) inHonolulu. This was followed by
another mishandling of said baggag(e) in the twice-cancelled connecting
flight from Cebu to Surigao. Appellees’ sad experience was further
aggravated by the misconduct of appellant’s personnel in Cebu, who lied
to appellees in denying their request to be billeted at Cebu Plaza Hotel. A
contract of air carriage generates a relation attended with a public duty
and any discourteous conduct on the part of a carrier’s employee toward
a passenger gives the latter an action for damages and, more so, where
there is bad faith.
HELD 1:
It is now firmly settled that moral damages are recoverable in suits
predicated on breach of a contract of carriage where it is proved
that the carrier was guilty of fraud or bad faith. Inattention to and
lack of care for the interests of its passengers who are entitled to its
utmost consideration, particularly as to their convenience, amount
Page | 6
 to bad faith which entitles the passenger to an award of moral
damages. What the law considers as bad faith which may furnish the
ground for an award of moral damages would be bad faith in securing the
contract and in the execution thereof, as well as in the enforcement of its
terms, or any other kind of deceit. Such unprofessional and proscribed
conduct is attributable to petitioner airline in the case at bar and the
adverse doctrinal rule is accordingly applicable to it.
In Cathay Pacific Airways, Ltd. vs. Court of Appeals, et al., a case which
is virtually on all fours with the present controversy, we stated: “In the
case at bar, both the trial court and the appellate court found that
CATHAY was grossly negligent and reckless when it failed to deliver the
luggage of petitioner at the appointed place and time. We agree. x x x.
While the mere failure of CATHAY to deliver respondent’s luggage at the
agreed place and time did not ipso facto amount to willful misconduct
since the luggage was eventually delivered to private respondent, albeit
belatedly, We are persuaded that the employees of CATHAY acted in
bad faith. x x x
Moral damages are not awarded to penalize the defendant but to
compensate the plaintiff for the injuries he may have suffered. In a
contractual or quasi-contractual relationship, exemplary damages, on the
other hand, may be awarded only if the defendant had acted in a wanton,
fraudulent, reckless, oppressive or malevolent manner. Attorney’s fees in
the concept of damages may beawarded where there is a finding of bad
faith. The evidence on record amply sustains, and we
correspondingly find, that the awards assessed against petitioner
on the aforestated items of damages are justified and reasonable.
At this juncture, it may also be pointed out that it is PAL’s duty to provide
assistance to private respondents and, for that matter, any other
passenger similarly inconvenienced due to delay in the completion of the
transport and the receipt of their baggage. Therefore, its unilateral and
voluntary act of providing cash assistance is deemed part of its obligation
as an air carrier, and is hardly anything to rave about. Likewise,
arrangements for and verification of requested hotel accommodations for
private respondents could and should have been done by PAL
employees themselves, and not by Dr. Miranda. It was rather patronizing
of PAL to make much of the fact that they allowed Dr. Miranda to use its
office telephone in order to get a hotel room.
While it may be true that there was no direct evidence on record of
blatant rudeness on the part of PAL employees towards the Mirandas, the
fact that private respondents were practically compelled to haggle for
accommodations, a situation unbefitting persons of their stature, is rather
demeaning and it partakes of discourtesy magnified by PAL’s
condescending attitude.
We agree with the findings of the lower court that the request of private
respondents for monetary assistance of P300.00 for taxi fare was indeed
justified, considering that there were two of them and they had several
pieces of luggage which had to be ferried between the airport and the
hotel. Also, the request for a small additional sum for tips is equally
reasonable since tipping, especially in a first-rate hotel, is an accepted
practice, of which the Court can take judicial notice. This is aside from the
fact that private respondents, having just arrived from an extended trip
abroad, had already run out of Philippine currency, which predicament
was exacerbated by their additional stay in Manila due to the off-loading
of their baggage. All these inconveniences should have warranted a
commonsensical and more understanding treatment from PAL,
considering that private respondents found themselves in this unpleasant
situation through no fault of theirs.
ISSUE 2: WON CA erred in not applying the express provisions of the contract of
carriage and pertinent provisions of the Warsaw Convention limiting its liability to
US$20.00 per kilo of baggage. NO.
HELD 2:
Petitioner avers that the express provisions on private respondents’ tickets stipulating
that liability for delay in delivery of baggage shall be limited to US$20.00 per kilo of
baggage delayed, unless the passenger declares a higher valuation, constitutes the
contract of carriage between PAL and private respondents. It further contends that
these express provisions are in compliance with the provisions of the Warsaw
Convention for the Unification of Rules Relating to International Carrier by Air, to
which the Philippines is a signatory. Thereunder, it is asserted that PAL flight PR 101
from San Francisco, U.S.A. to Manila, Philippines is an “international transportation”
well within the coverage of the Warsaw Convention.
“The defense raised by defendant airlines that it can be held liable only
under the terms of the Warsaw Convention (Answer, Special and
Affirmative Defenses, dated October 26, 1988) is of no moment. For it
has also been held that Articles 17, 18 and 19 of the Warsaw Convention
of 1929 merely declare the air carriers liable for damages in the cases
enumerated therein, if the conditions specified are present. Neither the
TRANSPORTATION LAW case digest
provisions of said articles nor others regulate or exclude liability for other
breaches of contract by air carriers (Northwest Airlines, Inc. vs. Nicolas
Cuenca, et al., 14 SCRA 1063).”
There was no error on the part of the Court of Appeals when it
refused to apply the provisions of the Warsaw Convention, for in the
words of this Court in the aforequoted Cathay Pacific case: “x x x
although the Warsaw Convention has the force and effect of law in this
country, being a treaty commitment assumed by the Philippine
government, said convention does not operate as an exclusive
enumeration of the instances for declaring a carrier liable for breach of
contract of carriage or as an absolute limit of the extent of that liability.
The Warsaw Convention declares the carrier liable in the
enumerated cases and under certain limitations. However, it must
not be construed to preclude the operation of the Civil Code and
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, which is
the case before Us. x x x”
ACCORDINGLY, finding no reversible error, the challenged judgment of
respondent Court of Appeals is hereby AFFIRMED in toto.
19. [G.R. No. 119706. March 14, 1996]
19. PHILIPPINE AIRLINES, INC., petitioner, vs. COURT OF APPEALS and GILDA
C. MEJIA, respondents. Penned by REGALADO, J.:
FACTS:
The facts as found by respondent Court of Appeals are as follows:
On January 27, 1990, plaintiff Gilda C. Mejia shipped thru defendant, Philippine
Airlines, one (1) unit microwave oven, with a gross weight of 33 kilograms from San
Francisco, U.S.A. for Manila, Philippines. Upon arrival, however, of said article
in Manila, Philippines, plaintiff discovered that its front glass door was broken and
the damage rendered it unserviceable. Demands both oral and written were made by
plaintiff against the defendant for the reimbursement of the value of the damaged
microwave oven, and transportation charges paid by plaintiff to defendant
company. But these demands fell on deaf ears.
On September 25, 1990, plaintiff Gilda C. Mejia filed the instant action for damages
against defendant in the lower court.
In its answer, defendant Airlines alleged inter alia, by way of special and affirmative
defenses, that the court has no jurisdiction over the case; that plaintiff has no valid
cause of action against defendant since it acted only in good faith and in compliance
with the requirements of the law, regulations, conventions and contractual
commitments; and that defendant had always exercised the required diligence in the
selection, hiring and supervision of its employees.
What had theretofore transpired at the trial in the court a quo is narrated as follows:
Plaintiff Gilda Mejia testified that sometime on January 27, 1990, she took
defendant’s plane from San Francisco, U.S.A. for Manila, Philippines. Amongst
her baggages was a slightly used microwave oven with the brand name ‘Sharp’
under PAL Air Waybill No. 0-79-1013008-3. When shipped, defendant’s office at San
Francisco inspected it. It was in good condition with its front glass intact. She did not
declare its value upon the advice of defendant’s personnel at San Francisco.
When she arrived in Manila, she gave her sister Concepcion C. Diño authority to
claim her baggag(e) and took a connecting flight for Bacolod City.
When Concepcion C. Dino claimed the baggag(e) with defendant, then with the
Bureau of Customs, the front glass of the microwave oven was already broken and
cannot be repaired because of the danger of radiation. They demanded from
defendant thru Atty. Paco P30,000.00 for the damages although a brand new one
costs P40,000.00, but defendant refused to pay.
Hence, plaintiff engaged the services of counsel. Despite demand by counsel,
defendant still refused to pay.
Page | 7
The damaged oven is still with defendant. Plaintiff is engaged in (the) catering and
restaurant business. Hence, the necessity of the oven. Plaintiff suffered sleepless
nights when defendant refused to pay her (for) the broken oven and claims P
10,000.00 moral damages, P20,000.00 exemplary damages, P10,000.00 attorney’s
fees plus P300.00 per court appearance and P15,000.00 monthly loss of income in
her business beginning February, 1990.
Defendant Philippine Airlines thru its employees Rodolfo Pandes and
Vicente Villaruz posited that plaintiff’s claim was not investigated until after the filing
of the formal claim on August 13, 1990. During the investigations, plaintiff failed to
submit positive proof of the value of the cargo. Hence her claim was denied.
Also plaintiff’s claim was filed out of time under paragraph 12, a(1) of the Air Waybill
which provides: ‘(a) the person entitled to delivery must make a complaint to the
carrier in writing in case: (1) of visible damage to the goods, immediately after
discovery of the damage and at the latest within 14 days from the receipt of the
goods.”
RTC - Finding petitioner Philippine Air Lines, Inc. (PAL) liable as follows to pay
plaintiff Gilda C. Mejia: (1) P30,000.00 by way of actual damages of the microwave
oven; (2) P10,000.00 by way of moral damages; (3) P20,000.00 by way of
exemplary damages; (4) P10,000.00 as attorney’s fee; all in addition to the costs of
the suit.
Court of Appeals - Affirmed the decision of the lower court, Defendant’s counterclaim
is dismissed for lack of merit.
ISSUES:
WON PAL is a common carrier? YES.
WON PAL is a carriage of passengers? YES.
WON the air way bill is a contract of adhesion and its provisions should be strictly
construed against herein petitioner? YES.
Whether or not the provisions particularly on the limited liability of the carrier are
binding on private respondent? NO.
HELD:
The provisions of the air waybill should be strictly construed against petitioner,
as reiterated in the ruling of the case of Fieldmen’s Insurance Co., Inc. vs. Vda.
De Songco, et al.
In this case, it is seriously doubted whether plaintiff had read the printed conditions at
the back of the Air Waybill or even if she had, if she was given a chance to negotiate
on the conditions for loading her microwave oven. Instead she was advised by
defendant’s employee at San Francisco, U.S.A., that there is no need to declare
the value of her oven since it is not brand new. Further, plaintiff testified that she
immediately submitted a formal claim for P30,000.00 with defendant. But their claim
was referred from one employee to another th(e)n told to come back the next day, and
the next day, until she was referred to a certain Atty. Paco. When they got tired and
frustrated of coming without a settlement of their claim in sight, they consulted a
lawyer who demanded from defendant on August 13, 1990.
CONTRACT OF ADHESION
Respondent appellate court did not agree with defendant-appellant’s above
contention.
Under our jurisprudence, the Air Waybill is a contract of adhesion considering
that all the provisions thereof are prepared and drafted only by the carrier. The
only participation left of the other party is to affix his signature thereto. In the earlier
case of Angeles v. Calasanz, the Supreme Court ruled that ‘the terms of a contract
(of adhesion) must be interpreted against the party who drafted the same.’
x x x.”
TRANSPORTATION LAW case digest
A review of jurisprudence on the matter reveals the consistent holding of the Court
that contracts of adhesion are not invalid per se and that it has on numerous
occasions upheld the binding effect thereof.
“x x x. Such provisions have been held to be a part of the contract
of carriage, and valid and binding upon the passenger regardless of the latter’s
lack of knowledge or assent to the regulation. It is what is known as a contract of
‘adhesion,’ in regards which it has been said that contracts of adhesion wherein one
party imposes a ready-made form of contract on the other, as the plane ticket in the
case at bar, are contracts not entirely prohibited. The one who adheres to the
contract is in reality free to reject it entirely; if he adheres, he gives his consent.
x x x, 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.”
“x x x, it should be borne in mind that a contract of adhesion may be struck down as
void and unenforceable, for being subversive of public policy, only when the weaker
party is imposed upon in dealing with the dominant bargaining party and is reduced to
the alternative of taking it or leaving it, completely deprived of the opportunity to
bargain on equal footing. x x x.” but subject to the caveat that –
”x x x. Just because we have said that Condition No. 5 of the airway bill is binding
upon the parties to and fully operative in this transaction, it does not mean, and let this
serve as fair warning to respondent carriers, that they can at all times whimsically
seek refuge from liability in the exculpatory sanctuary of said Condition No. 5 x x x.”
We find nothing objectionable about the lower court’s reliance upon
the Fieldmen’s Insurance case, the principles wherein squarely apply to the present
petition. Thus, there can be no further question as to the validity of the terms of the
air waybill, even if the same constitutes a contract of adhesion.
LIABILITY FOR THE DAMAGE
On petitioner’s insistence that its liability for the damage to private respondent’s
microwave oven, if any, should be limited by the provisions of the air waybill, the lower
court had this to say that, defendant’s evidence is anchored principally on plaintiff’s
alleged failure to comply with paragraph 12, a(1) of the Air waybill by filing a formal
claim immediately after discovery of the damage. Plaintiff filed her formal claim only
on August 13, 1990 . And, failed to present positive proof on the value of the
damaged microwave oven. Hence, the denial of her claim.
Finally, the Court finds no merit to defendant’s contention that under the Warsaw
Convention, its liability if any, cannot exceed U.S. $20.00 based on weight as plaintiff
did not declare the contents of her baggage nor pay additional charges before
the flight.
The appellate court declared correct the non-application by the trial court of the
limited liability of therein defendant-appellant under the “Conditions of the
Contract” contained in the air waybill , based on the ruling in Cathay Pacific Airways,
Ltd. vs. Court of Appeals, et al., which substantially enunciates the rule that while the
Warsaw Convention has the force and effect of law in the Philippines, being a treaty
commitment by the government and as a signatory thereto, the same does not
operate as an exclusive enumeration of the instances when a carrier shall be liable for
breach of contract or as an absolute limit of the extent of liability, nor does it preclude
the operation of the Civil Code or other pertinent laws.
The validity of provisions limiting the liability of carriers contained in bills of
lading have been consistently upheld for the following reason:
“x x x. The stipulation in the bill of lading limiting the common carrier’s liability
to the value of goods appearing in the bill, unless the shipper or owner declares
a greater value, is valid and binding. The limitation of the carrier’s liability is
sanctioned by the freedom of the contracting parties to establish such stipulations,
clauses, terms, or conditions as they may deem convenient, provided they are not
contrary to law, morals, good customs and public policy. x x x.”
However, the Court has likewise cautioned against blind reliance on adhesion
contracts where the facts and circumstances warrant that they should be disregarded.
In the case at bar, it will be noted that private respondent signified an intention to
declare the value of the microwave oven prior to shipment, but was explicitly advised
against doing so by PAL’s personnel in San Francisco, U.S.A., as borne out by her
testimony in court.
Page | 8
 It cannot be denied that the attention of PAL through its personnel in San
Francisco was sufficiently called to the fact that private respondent’s cargo was highly
susceptible to breakage as would necessitate the declaration of its actual
value. Petitioner had all the opportunity to check the condition and manner of packing
prior to acceptance for shipment, as well as during the preparation of the air waybill
by PAL’s Acceptance Personnel based on information supplied by the shipper, and to
reject the cargo if the contents or the packing did not meet the company’s required
specifications. Certainly, PAL could not have been otherwise prevailed upon to
merely accept the cargo.
While Vicente Villaruz, officer-in-charge of the PAL Import Section at the
time of incident, posited that there may have been inadequate and improper packing
of the cargo, which by itself could be a ground for refusing carriage of the goods
presented for shipment, he nonetheless admitted on cross-examination that private
respondent’s cargo was accepted by PAL in its San Francisco office. He also stated
that while the passenger’s declaration regarding the general or fragile character of the
cargo is to a certain extent determinative of its classification, PAL nevertheless has
and exercises discretion as to the manner of handling required by the nature of the
cargo it accepts for carriage. He further opined that the microwave oven was only a
general, not a fragile, cargo which did not require any special handling.
There is no absolute obligation on the part of a carrier to accept a
cargo. Where a common carrier accepts a cargo for shipment for valuable
consideration, it takes the risk of delivering it in good condition as when it was
loaded. And if the fact of improper packing is known to the carrier or its personnel, or
apparent upon observation but it accepts the goods notwithstanding such condition, it
is not relieved of liability for loss or injury resulting therefrom.
The acceptance in due course by PAL of private respondent’s cargo as
packed and its advice against the need for declaration of its actual value operated as
an assurance to private respondent that in fact there was no need for such a
declaration. Petitioner can hardly be faulted for relying on the representations
of PAL’s own personnel.
In other words, private respondent Mejia could and would have complied with the
conditions stated in the air waybill, i.e., declaration of a higher value and payment of
supplemental transportation charges, entitling her to recovery of damages beyond the
stipulated limit of US$20 per kilogram of cargo in the event of loss or damage, had
she not been effectively prevented from doing so upon the advice of PAL’s personnel
for reasons best known to themselves.
As pointed out by private respondent, the aforestated facts were not denied by PAL in
any of its pleadings nor rebutted by way of evidence presented in the course of the
trial, and thus in effect it judicially admitted that such an advice was given by its
personnel in San Francisco, U.S.A. Petitioner, therefore, is estopped from blaming
private respondent for not declaring the value of the cargo shipped and which would
have otherwise entitled her to recover a higher amount of damages.
We likewise uphold the lower court’s finding that private respondent complied
with the requirement for the immediate filing of a formal claim for damages as required
in the air waybill or, at least, we find that there was substantial compliance therewith.
Considering the incidents and private respondent Mejia’s own zealous efforts in
following up the 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
August 13, 1990. 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 PAL’s own doing, the consequences of which cannot, in all fairness, be attributed to
private respondent.
Even if the claim for damages was conditioned on the timely filing of a formal
claim, under Article 1186 of the Civil Code that condition was deemed fulfilled,
considering that the collective action of PAL’s personnel in tossing around the claim
and leaving it unresolved for an indefinite period of time was tantamount to
“voluntarily preventing its fulfillment.” On grounds of equity, the filing of the
baggage freight claim, which sufficiently informed PAL of the damage sustained by
private respondent’s cargo, constituted substantial compliance with the requirement in
the contract for the filing of a formal claim.
All told, therefore, respondent appellate court did not err in ruling that the
provision on limited liability is not applicable in this case. We, however, note in
passing that while the facts and circumstances of this case do not call for the direct
application of the provisions of the Warsaw Convention, it should be stressed that,
indeed, recognition of the Warsaw Convention does not preclude the operation of the
Civil Code and other pertinent laws in the determination of the extent of liability of the
common carrier.
The Warsaw Convention, being a treaty to which the Philippines is a
signatory, is as much a part of Philippine law as the Civil Code, Code of
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Commerce and other municipal special laws. The provisions therein contained,
specifically on the limitation of carrier’s liability, are operative in the Philippines but
only in appropriate situations.
Since the plaintiff’s baggage destination was the Philippines, Philippine law governs
the liability of the defendant for damages for the microwave oven.
The provisions of the New Civil Code on common carriers are Article(s) 1733, 1735
and 1753 x x x.
In this case, defendant failed to overcome, not only the presumption but more
importantly, plaintiff’s evidence that defendant’s negligence was the proximate cause
of the damages of the microwave oven. Further, plaintiff has established that
defendant acted in bad faith when it denied the former’s claim on the ground that the
formal claim was filed beyond the period as provided in paragraph 12 (a-1) (Exh. ‘1-C-
2’) of the Air Waybill (Exh.‘1’, also Exh ‘A’), when actually, Concepcion Diño, sister of
plaintiff has immediately filed the formal claim upon discovery of the damage.”
Respondent appellate court was in full agreement with the trial court’s finding
of bad faith on the part of petitioner as a basis for the award of
the aforestated damages.
It will be noted that petitioner never denied that the damage to the microwave
oven was sustained while the same was in its custody. The possibility that said
damage was due to causes beyond the control of PAL has effectively been ruled out
since the entire process in handling of the cargo - from the unloading thereof from
the plane, the towing and transfer to the PAL warehouse, the transfer to the Customs
examination area, and its release thereafter to the shipper - was done almost
exclusively by, and with the intervention or, at the very least, under the direct
supervision of a responsible PAL personnel. It leads to the inevitable conclusion that
whatever damage may have been sustained by the cargo is due to causes
attributable to PAL’s personnel or, at all events, under their responsibility.
Moreover, the trial court underscored the fact that petitioner was not able to
overcome the statutory presumption of negligence in Article 1735 which, as a
common carrier, it was laboring under in case of loss, destruction or deterioration of
goods, through proper showing of the exercise of extraordinary diligence. Neither did
it prove that the damage to the microwave oven was because of any of
the excepting causes under Article 1734, all of the same Code. Inasmuch as the
subject item was received in apparent good condition, no contrary notation or
exception having been made on the air waybill upon its acceptance for shipment, the
fact that it was delivered with a broken glass door raises the presumption
that PAL’s personnel were negligent in the carriage and handling of the cargo.
Furthermore, there was glaringly no attempt what so ever on the part of
petitioner to explain the cause of the damage to the oven. The unexplained cause
of damage to private respondent’s cargo constitutes gross carelessness or
negligence which by itself justifies the present award of damages. The equally
unexplained and inordinate delay in acting on the claim upon referral thereof to the
claims officer, Atty. Paco, and the noncommittal responses to private respondent’s
entreaties for settlement of her claim for damages belies petitioner’s pretension that
there was no bad faith on its part. This unprofessional indifference of PAL’s personnel
despite full and actual knowledge of the damage to private respondent’s cargo, just to
be exculpated from liability on pure technicality and bureaucratic subterfuge, smacks
of willful misconduct and insensitivity to a passenger’s plight tantamount to bad faith
and renders unquestionable petitioner’s liability for damages. In sum, there is no
reason to disturb the findings of the trial court in this case, especially with its
full affirmance by respondent Court of Appeals.
The assailed judgment of respondent Court of Appeals is AFFIRMED in toto.
20. NORTHWEST ARILINES v. CA
284 s 408
FACTS:
Torres, allegedly on a special mission to purchase firearms for the Philippine Senate,
purchased a round trip ticket from Northwest for his travel to Chicago and back to
Manila.
After purchasing firearms and on the way back to Manila, Torres checked-in and
presented before Northwest’s representative his two identical baggage, on of which
contained firearms. Requiring the baggage to be opened and the supporting evidence
to be presented, Torres showed them his authorization from the Philippine
Page | 9
government and the purchase receipts. Thereafter, he sealed the baggage and
Northwest’s representative placed a red tag on the baggage with firearms with the
marking “CONTAINS FIREARMS”.
Upon arrival in Manila, Torres was not able to claim one of his baggages and was
informed by Northwest’s representative that his baggage containing firearms was
recalled back to Chicago by Northwest for US Customs verification. A telex to that
effect was shown to Torres.
After being advised of the arrival of his other baggage, Torres claimed and opened
the baggage in the presence of Northwest’s representative and found out that the
firearms were missing. A Personal Property Missing Damage Report was then issued
by Northwest to Torres.
On account of the continuous refusal of Northwest to settle amicably, Torres prayed
before the TC that Northwest be ordered to pay actual damages, moral damages,
temperate damages, exemplary damages and attorney’s fees.
In defense, Northwest pleaded that it was the agents from the US Customs who
ordered the return of the weapons which Torres checked-in; that when opened in the
presence of US Customs agents the box contained no firearms; and that since the
baggage which was returned back to Chicago did not contain firearms, then the
baggage which Torres received upon arrival in Manila must have contained the
firearms.
Now, Northwest argues that the Warsaw Convention and the contract of carriage
limited its liability to US$640 and that the evidence presented by Torres did not entitle
him to moral, exemplary, and temperate damages and attorney’s fees.
ISSUE:
May the liability of Northwest for actual damages be limited to that prescribed in Sec.
22(2) of the Warsaw Convention? NO.
HELD:
In Alitalia v. Intermediate Appellate Court, we held:
The [Warsaw] Convention does not operate as an exclusive enumeration of the
instances of an airline’s liability, or as an absolute limit of the extent of that
liability. Such a proposition is not borne out by the language of the Convention, as
this Court has now, and at an earlier time, pointed out. Moreover, slight reflection
readily leads to the conclusion that it should be deemed a limit of liability only in those
cases where the cause of the death or injury to person, or destruction, loss or damage
to property or delay in its transport is not attributable to or attended by any willful
misconduct, bad faith, recklessness, or otherwise improper conduct on the part of any
official or employee for which the carrier is responsible, and there is otherwise no
special or extraordinary form of resulting injury. The Convention’s provisions, in short,
do not “regulate or exclude liability for other breaches of contract by the carrier” or
misconduct of its officers and employees, or for some particular or exceptional type of
damage.
21. G.R. No. 122308 July 8, 1997
PURITA S. MAPA, CARMINA S. MAPA and CORNELIO P. MAPA
vs.
COURT OF APPEALS and TRANS-WORLD AIRLINES INC.
FACTS:
Purita and carmina Mapa bought 2 TWA tickets in
Bangkok, Thailand. Domicile of carrier TWA and principal place of
business is Kansas City, Missouri, USA. The place of destination is
Chicago, USA.
On August 10, 1990, plaintiffs Carmina and Purita left Manila
on board PAL flight No. 104 for Los Angeles. Carmina was to commence
schooling and thus was accompanied by Purita to assist her in settling
down at the University.
They arrived Los Angeles on the same date and stayed there
until August 14, 1990 when they left for New York City. On August 27,
1990, plaintiffs Purita and Carmina S. Mapa departed for Boston, taking a
connecting flight on TWA's carrier, TW 0901, from JFK Airport, New York,
to Boston's Logan Airport, checking in seven (7) pieces of luggage at the
TWA counter in the JFK Airport. They were issued their boarding passes
for their 3 pm flight and were instructed to proceed to gate 35 for
boarding. At about 2:40 p.m., plaintiffs noticed that there was still no
instruction to board the aircraft so they made inquiries. The TWA ground
stewardess informed plaintiffs that they were at the wrong gate because
TRANSPORTATION LAW case digest
their flight was boarding at gate 1. Upon hearing this, plaintiffs rushed to
gate 1 which was in another building terminal. At gate 1, they were told by
a TWA ground stewardess that flight 901 had just departed. However,
they were consoled that another TWA flight was leaving for Boston after
30 minutes and plaintiffs could use the same boarding pass for the next
flight. At around 3:15 p.m., plaintiffs Purita and Carmina were able to
board the next flight. However, the plane was not immediately cleared for
take off on account of a thunderstorm. The passengers were instructed to
stay inside the aircraft until 6:00 p.m. when the plane finally left for
Boston.
Upon arriving in Boston, plaintiffs Purita and Carmina
proceeded to the carousel to claim their baggages and found only three
out of the seven they checked in. Plaintiffs immediately reported the loss
of their four baggages to the TWA Baggage Office at Logan Airport.
TWA's representative confidently assured them that their baggages
would be located within 24 hours and not more than 48 hours.
On September 2, 1990, plaintiffs received a letter from TWA,
signed by Mr. J.A. Butler, Customer Relations-Baggage Service,
apologizing for TWA's failure to locate the missing luggage and
requesting plaintiffs to accomplish a passenger property questionnaire to
facilitate a further intensive and computerized search for the lost luggage.
The total value of the lost items amounted to $11,283.79.
On September 20, 1990, plaintiff's counsel wrote TWA thru
its General Sales Manager in the Philippines, Daniel Tuason, demanding
indemnification for the grave damage and injury suffered by the plaintiffs.
TWA offered to amicably settle the case by giving plaintiffs-appellants two
options: (a) transportation credit for future TWA travel or (b) cash
settlement. Five months lapsed without any result on TWA's intensive
search.
Plaintiffs-appellant opted for transportation credit for future
TWA travel but TWA disregarded plaintiffs' option and unilaterally
declared the payment of $2,560.00 as constituting full satisfaction of the
plaintiffs' claim.
On July 19, 1991, plaintiffs accepted the check for $2,560.00,
as partial payment for the actual cost of their lost baggages and their
contents. Despite demands by plaintiffs, TWA failed and refused without
just cause to indemnify and redress plaintiffs for the grave injury and
damages they have suffered.
Ptrs then filed with the trial court on 1 August 1991 a complaint for
damages. Before a responsive pleading was filed, the petitioners filed an Amended
Complaint. They prayed that after due trial private respondent Trans-World Airlines,
Inc. (hereafter, TWA), be ordered to pay them the following amounts: (1)
US$8,723.79, or its equivalent in Philippine currency, representing the cost of the lost
luggage and its contents; (2) US$2,949.50, or its equivalent in Philippine currency,
representing the cost of hotel, board and lodging, and communication expenses; (3)
P1 million, by way of moral damages; (4) P1 million, by way of exemplary damages,
with legal interest on said amounts from the date of extrajudicial demand thereof; and
(5) P500,000.00 as attorney's fees, costs of the suit, and other expenses of litigation.
On 26 February 1992, TWA filed its Answer raising, as special and
affirmative defense, lack of jurisdiction of Philippine courts over the action for
damages in the pursuant to Article 28(1) of the Warsaw Convention, the action could
only be brought either in Bangkok where the contract was entered into, or in Boston
which was the place of destination, or in Kansas City which is the carrier's domicile
and principal place of business.
TWA further alleged that pursuant to the Warsaw Convention and the
Notice of Baggage Limitations at the back of the tickets, its liability to the petitioners is
limited to US$9.07 per pound, or US$20.00 per kilo, which is in lieu of actual and
compensatory damages. Even assuming that petitioners' bag weighed the maximum
acceptable weight of 70 pounds, TWA's maximum liability is $640.00 per bag or
$2,560.00 for the four pieces of baggage, which the petitioners have been offered and
have accepted. TWA also submitted that it could not be liable for moral and exemplary
damages and attorney's fees because it did not act in a wanton, fraudulent, reckless,
oppressive, or malevolent manner.
TC-dismissed the case for lack of jurisdiction in light of Article 28(1) of the Warsaw
Convention. Thus:
It is plaintiffs' theory that the Warsaw Convention does not
apply to the instant case because plaintiffs' contract of transportation
does not constitute "international transportation" as defined in said
convention. This however is belied by the Passenger Property
Questionnaire which is Annex C of plaintiffs' amended complaint. Page
two of said questionnaire accomplished by plaintiffs under the heading
"Your Complete Itinerary" shows that the TWA tickets issued to the
plaintiffs form part of the contract of transportation to be performed from
Manila to the United States. Since the Philippines and the United States
Page | 10
 are parties to the convention, plaintiffs' contracts of transportation come
within the meaning of International Transportation.
On the basis of the foregoing, the Court holds that the
Warsaw Convention is applicable to the case at bar, even if the basis of
plaintiffs' present action is breach of contract of carriage under the New
Civil Code.
The next question to be resolved is whether or not the Court has
jurisdiction to try the present case in the light of the provision of Art. 28(1)
above-quoted.
Under Art. 28(1) supra, a complaint for damages against an air carrier
can be instituted only in any of the following places/courts:
(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.
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 country 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 prohibition exists against their
alteration.
The Philippines not being one of the places specified in Art.
28(1) abovequoted where the complaint may be instituted, this Court
therefore, does not have jurisdiction over the present case.
CA-affirmed the order of the trial court. The respondent court further held
that the cause of action of the petitioners arose from the loss of the four checked
pieces of baggage, which then falls under Article 18(1), Chapter III (Liability of the
Carrier) of the Warsaw Conventions. Pursuant to Article 24(1) of the Convention, all
actions for damages, whether based on tort, code law or common law, arising from
loss of baggage under Article 18 of the Warsaw Convention, can only be brought
subject to the conditions and limits set forth in the Warsaw Convention.
Respondent Court of Appeals likewise held that the petitioners could not
claim application of Articles 1733, 1734, 1735, 1755, and 1756 of the New Civil Code
on common carriers without taking into consideration Article 1753 of the same Code,
which provides that the law of the country to which the goods are to be transported
shall govern the liability of the common carrier for their loss, destruction, or
deterioration. Since the country of ultimate destination is Chicago, the law of Chicago
shall govern the liability of TWA for the loss of the four pieces of baggage. Neither is
Article 2176 of the New Civil Code on torts or quasi-delicts applicable in view of the
private international law principle of lex loci delicti commissi. In addition, comformably
with Santos III v. Northwest Orient Airlines, mere allegation of willful misconduct
resulting in a tort is insufficient to exclude the case from the comprehension of the
Warsaw Convention.
ISSUE: WON the Warsaw Convention is applicable to this case.
HELD:
Article I(2) of the Warsaw Convention provides that a
contract is one of international transportation only if
according to the contract made by the parties, the place of departure and
the place of destination, whether or not there be a break in the
transportation or a transshipment, are situated either within the territories
of two High Contracting Parties, or within the territory of a single High
Contracting Party, if there is an agreed stopping place within a territory
subject to the sovereignty, mandate or authority of another power, even
though that power is not a party to this convention.
There are then two categories of international transportation, viz., (1) that
where the place of departure and the place of destination are situated within the
territories of two High Contracting Parties regardless of whether or not there be a
break in the transportation or a transshipment; and (2) that where the place of
departure and the place of destination are within the territory of a single High
Contracting Party if there is an agreed stopping place within a territory subject to the
sovereignty, mandate, or authority of another power, even though the power is not a
party of the Convention.
The High Contracting Parties referred to in the Convention are the
signatories thereto and those which subsequently adhered to it. The Phil is one of the
signatories since 1951.
The contracts of transportation in this case are evidenced by the two
TWA tickets, both purchased and issued in Bangkok, Thailand. On the basis alone of
the provisions therein, it is obvious that the place of departure and the place of
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destination are all in the territory of the United States, or of a single High Contracting
Party. The contracts, therefore, cannot come within the purview of the first category of
international transportation. Neither can it be under the second category since there
was NO agreed stopping place within a territory subject to the sovereignty, mandate,
or authority of another power.
The only way to bring the contracts between Purita and Carmina Mapa,
on the one hand, and TWA, on the other, within the first category of "international
transportation" is to link them with, or to make them an integral part of, the Manila-Los
Angeles travel of Purita and Carmina through PAL aircraft. The "linkages" which have
been pointed out by the TWA, the trial court, and the Court of Appeals are (1) the
handwritten notations, viz., INT'L TKT # 079-4402956821-2 and INT'L TKT # 079-
4402956819, on the two TWA tickets; and (2) the entries made by petitioners Purita
and Carmina Mapa in column YOUR COMPLETE ITINERARY in TWA's Passenger
Property Questionnaire, wherein they mentioned their travel from Manila to Los
Angeles in flight PR 102.
The alleged "international tickets" mentioned in the notations in
conjunction with which the two TWA tickets were issued were not presented. Clearly
then, there is at all no factual basis of the finding that the TWA tickets were issued in
conjunction with the international tickets, which are even, at least as of now, non-
existent.
As regards the petitioner's entry in YOUR COMPLETE ITINERARY
column of the Passenger Property Questionnaire wherein they included the Manila-
Los Angeles travel, it must be pointed out that this was made on 4 September 1990
by petitioners Purita and Carmina Mapa, and only in connection with their claim for
their lost pieces of baggage. The loss occurred much earlier, or on 27 August 1990.
The entry can by no means be considered as a part of, or supplement to, their
contracts of transportation evidenced by the TWA tickets which covered transportation
within the United States only.
It must be underscored that the first category of international
transportation under the Warsaw Convention is based on "the contract made by the
parties." TWA does not claim that the Manila-Los Angeles contracts of transportation
which brought Purita and Carmina to Los Angeles were also its contracts. It does not
deny the assertion of the petitioners that those contracts were independent of the
TWA tickets issued in Bangkok, Thailand. No evidence was offered that TWA and
PAL had an agreement concerning transportation of passengers from points of
departures not served with aircrafts of one or the other. TWA relies on Article
I(3) of the Convention, which provides as follows:
3. A carriage to be performed by several successive air carriers is
deemed, for the purposes of this Convention, to be one undivided
carriage, if it has been regarded by the parties as a single operation,
whether it had been agreed upon under the form of a single contract or of
a series of contracts, and it shall not lose its international character
merely because one contract or a series of contracts is to be performed
entirely within a territory subject to the sovereignty, suzerainty, mandate,
or authority of the same High Contracting Party.
It also points to Article 15 of the IATA Recommend Practice 1724, which
provides: Carriage to be performed by a several successive carriers under one ticket,
or under a ticket and any conjunction ticket issued in connection therewith, is
regarded as a single operation."
The flaw of respondent's position is the presumption that the parties have
"regarded" as an "undivided carriage" or as a "single operation" the carriage from
Manila to Los Angeles through PAL then to New York-Boston-St. Louis-Chicago
through TWA. The dismissal then of the second Amended Complaint by the trial court
and the Court of Appeals' affirmance of the dismissal were not based on indubitable
facts or grounds, but no inferences without established factual basis.
Petition is GRANTED. The RTC is hereby DIRECTED to proceed with the
trial.
Policy: Art. 28. (1) An action for damages 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.
22. [G.R. No. 116044-45. March 9, 2000]
AMERICAN AIRLINES, petitioner, vs. COURT OF APPEALS, HON. BERNARDO
LL. SALAS and DEMOCRITO MENDOZA, respondents.
Facts:
 Private respondent purchased from Singapore Airlines in Manila conjunction tickets
for Manila - Singapore - Athens - Larnaca - Rome - Turin - Zurich - Geneva -
Copenhagen - New York. The petitioner was not a participating airline in any of the
segments in the itinerary under the said conjunction tickets. In Geneva the petitioner
decided to forego his trip to Copenhagen and to go straight to New York and in the
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absence of a direct flight under his conjunction tickets from Geneva to New York, the
private respondent on June 7, 1989 exchanged the unused portion of the conjunction
ticket for a one-way ticket from Geneva to New York from the petitioner airline.
Petitioner issued its own ticket to the private respondent in Geneva and claimed the
value of the unused portion of the conjunction ticket from the IATA clearing house in
Geneva.
 In September 1989, private respondent filed an action for damages before the
regional trial court of Cebu for the alleged embarassment and mental anguish he
suffered at the Geneva Airport when the petitioner’s security officers prevented him
from boarding the plane, detained him for about an hour and allowed him to board the
plane only after all the other passengers have boarded. The petitioner filed a motion
to dismiss for lack of jurisdiction of Philippine courts to entertain the said proceedings
under Art. 28 (1) of the Warsaw Convention.
 The trial court denied the motion. The order of denial was elevated to the Court of
Appeals which affirmed the ruling of the trial court. Both the trial and that appellate
courts held that the suit may be brought in the Philippines under the pool partnership
agreement among the IATA members, which include Singapore Airlines and American
Airlines, wherein the members act as agents of each other in the issuance of tickets to
those who may need their services. The contract of carriage perfected in Manila
between the private respondent and Singapore Airlines binds the petitioner as an
agent of Singapore Airlines and considering that the petitioner has a place of business
in Manila, the third option of the plaintiff under the Warsaw Convention i.e. the action
may be brought in the place where the contract was perfected and where the airline
has a place of business, is applicable. Hence this petition assailing the order
upholding the jurisdiction of Philippine courts over the instant action.
 The petitioner’s theory is as follows: Under Art 28 (1) of the Warsaw convention an
action for damages must be brought at the option of the plaintiff either before the court
of the 1) domicile of the carrier; 2) the carrier’s principal place of business; 3) the
place where the carrier has a place of business through which the contract was made;
4) the place of destination. The petitioner asserts that the Philippines is neither
the domicile nor the principal place of business of the defendant airline; nor is it
the place of destination. The petitioner contends that since the Philippines is
not the place where the contract of carriage was made between the parties
herein, Philippine courts do not have jurisdiction over this action for damages.
The issuance of petitioner’s own ticket in Geneva in exchange for the conjunction
ticket issued by Singapore Airlines for the final leg of the private respondent’s trip
gave rise to a separate and distinct contract of carriage from that entered into by the
private respondent with Singapore Airlines in Manila. Petitioner lays stress on the fact
that the plane ticket for a direct flight from Geneva to New York was purchased by the
private respondent from the petitioner by "exchange and cash" which signifies that the
contract of carriage with Singapore Airlines was terminated and a second contract
was perfected. Moreover, the second contract of carriage cannot be deemed to have
been an extension of the first as the petitioner airline is not a participating airline in
any of the destinations under the first contract. The petitioner claims that the private
respondent’s argument that the petitioner is bound under the IATA Rules as agent of
the principal airline is irrelevant and the alleged bad faith of the airline does not
remove the case from the applicability of the Warsaw Convention. Further, the IATA
Rule cited by the private respondent which is admittedly printed on the ticket issued
by the petitioner to him which states, "An air carrier issuing a ticket for carriage over
the lines of another carrier does so only as its agent" does not apply herein, as neither
Singapore Airlines nor the petitioner issued a ticket to the private respondent covering
the route of the other. Since the conjunction tickets issued by Singapore Airlines do
not include the route covered by the ticket issued by the petitioner, the petitioner
airline submits that it did not act as an agent of Singapore Airlines.
 Private respondent controverts the applicability of the Warsaw Convention in this
case. He posits that under Article 17 of the Warsaw Convention a carrier may be held
liable for damages if the "accident" occurred on board the airline or in the course of
"embarking or disembarking" from the carrier and that under Article 25 (1) thereof the
provisions of the convention will not apply if the damage is caused by the "willful
misconduct" of the carrier. He argues that his cause of action is based on the incident
at the pre-departure area of the Geneva airport and not during the process of
embarking nor disembarking from the carrier and that security officers of the petitioner
airline acted in bad faith. Accordingly, this case is released from the terms of the
Convention. Private respondent argues that assuming that the convention applies, his
trip to nine cities in different countries performed by different carriers under the
conjunction tickets issued in Manila by Singapore Airlines is regarded as a single
transaction; as such the final leg of his trip from Geneva to New York with the
petitioner airline is part and parcel of the original contract of carriage perfected in
Manila. Thus, the third option of the plaintiff under Art. 28 (1) e.g., where the carrier
has a place of business through which the contract of carriage was made, applies
herein and the case was properly filed in the Philippines. The private respondent
seeks affirmance of the ruling of the lower courts that the petitioner acted as an agent
of Singapore Airlines under the IATA Rules and as an agent of the principal carrier the
petitioner may be held liable under the contract of carriage perfected in Manila, citing
the judicial admission made by the petitioner that it claimed the value of the unused
portion of the private respondent’s conjunction tickets from the IATA Clearing House
in Geneva where the accounts of both airlines are respectively credited and debited.
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Accordingly, the petitioner cannot now deny the contract of agency with Singapore
Airlines after it honored the conjunction tickets issued by the latter.
ISSUE: WON the Philippine Courts have jurisdiction in the present case? YES
HELD:
The Warsaw Convention to which the Republic of the Philippines is a party and which
has the force and effect of law in this country applies to all international transportation
of persons, baggage or goods performed by an aircraft gratuitously or for hire. As
enumerated in the Preamble of the Convention, one of the objectives is "to regulate in
a uniform manner the conditions of international transportation by air". The contract of
carriage entered into by the private respondent with Singapore Airlines, and
subsequently with the petitioner, to transport him to nine cities in different countries
with New York as the final destination is a contract of international transportation and
the provisions of the Convention automatically apply and exclusively govern the rights
and liabilities of the airline and its passengers. This includes section 28 (1) which
enumerates the four places where an action for damages may be brought.
The threshold issue of jurisdiction of Philippine courts under Art 28 (1) must first be
resolved before any pronouncements may be made on the liability of the carrier
thereunder. The objections raised by the private respondent that this case is released
from the terms of the Convention because the incident on which this action is
predicated did not occur in the process of embarking and disembarking from the
carrier under Art 17 and that the employees of the petitioner airline acted with malice
and bad faith under Art 25 (1) pertain to the merits of the case which may be
examined only if the action has first been properly commenced under the rules on
jurisdiction set forth in Art. 28 (1).
Art (28) (1) of the Warsaw Convention states: An action for damages 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.
There is no dispute that petitioner issued the ticket in Geneva which was neither the
domicile nor the principal place of business of petitioner nor the respondent’s place of
destination. The question is whether the contract of transportation between the
petitioner and the private respondent would be considered as a single operation and
part of the contract of transportation entered into by the latter with Singapore Airlines
in Manila. Petitioner disputes the ruling of the lower court that it is. Petitioner’s main
argument is that the issuance of a new ticket in Geneva created a contract of carriage
separate and distinct from that entered by the private respondent in Manila.
Art 1(3) of the Warsaw Convention which states:
"Transportation to be performed by several successive carriers shall be deemed, for
the purposes of this convention, to be one undivided transportation, if it has been
regarded by the parties as a single operation, whether it has been agreed upon under
the form of a single contract or a series of contracts, and it shall not lose its
international character merely because one contract or series of contracts is to be
performed entirely within the territory subject of the sovereignty, suzerainty, mandate
or authority of the same High contracting Party."
The contract of carriage between the private respondent and Singapore Airlines
although performed by different carriers under a series of airline tickets, including that
issued by petitioner, constitutes a single operation. Members of the IATA are under a
general pool partnership agreement wherein they act as agent of each other in the
issuance of tickets to contracted passengers to boost ticket sales worldwide and at
the same time provide passengers easy access to airlines which are otherwise
inaccessible in some parts of the world. Booking and reservation among airline
members are allowed even by telephone and it has become an accepted practice
among them. A member airline which enters into a contract of carriage consisting of a
series of trips to be performed by different carriers is authorized to receive the fare for
the whole trip and through the required process of interline settlement of accounts by
way of the IATA clearing house an airline is duly compensated for the segment of the
trip serviced. Thus, when the petitioner accepted the unused portion of the
conjunction tickets, entered it in the IATA clearing house and undertook to transport
the private respondent over the route covered by the unused portion of the
conjunction tickets, i.e., Geneva to New York, the petitioner tacitly recognized its
commitment under the IATA pool arrangement to act as agent of the principal
contracting airline, Singapore Airlines, as to the segment of the trip the petitioner
agreed to undertake. As such, the petitioner thereby assumed the obligation to take
the place of the carrier originally designated in the original conjunction ticket. The
petitioner’s argument that it is not a designated carrier in the original conjunction
tickets and that it issued its own ticket is not decisive of its liability. The new ticket was
simply a replacement for the unused portion of the conjunction ticket, both tickets
being for the same amount of US$ 2,760 and having the same points of departure
and destination. By constituting itself as an agent of the principal carrier the
petitioner’s undertaking should be taken as part of a single operation under the
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contract of carriage executed by the private respondent and Singapore Airlines in
Manila.
The quoted provisions of the Warsaw Convention Art. 1(3) clearly states that a
contract of air transportation is taken as a single operation whether it is founded on a
single contract or a series of contracts. The number of tickets issued does not detract
from the oneness of the contract of carriage as long as the parties regard the contract
as a single operation. The evident purpose underlying this Article is to promote
international air travel by facilitating the procurement of a series of contracts for air
transportation through a single principal and obligating different airlines to be bound
by one contract of transportation. Petitioner’s acquiescence to take the place of the
original designated carrier binds it under the contract of carriage entered into by the
private respondent and Singapore Airlines in Manila.
The third option of the plaintiff under Art 28 (1) of the Warsaw Convention e.g., to sue
in the place of business of the carrier wherein the contract was made, is therefore,
Manila, and Philippine courts are clothed with jurisdiction over this case. We note that
while this case was filed in Cebu and not in Manila the issue of venue is no longer an
issue as the petitioner is deemed to have waived it when it presented evidence before
the trial court.
The issue raised in SP No. 31452 which is whether or not the trial court committed
grave abuse of discretion in ordering the deposition of the petitioner’s security officer
taken in Geneva to be stricken off the record for failure of the said security officer to
appear before the Philippine consul in Geneva to answer the cross-interrogatories
filed by the private respondent does not have to be resolved. The subsequent
appearance of the said security officer before the Philippine consul in Geneva on
September 19, 1994 and the answer to the cross-interrogatories propounded by the
private respondent was transmitted to the trial court by the Philippine consul in
Geneva on September 23, 1994 should be deemed as full compliance with the
requisites of the right of the private respondent to cross-examine the petitioner’s
witness. The deposition filed by the petitioner should be reinstated as part of the
evidence and considered together with the answer to the cross-interrogatories.
23. [G.R. No. 127768. November 19, 1999]
UNITED AIRLINES, petitioner, vs. WILLIE J. UY, respondent.
FACTS:
 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 airline’s employee, and later its
airport supervisor, adamantly refused to honor the MCO pointing out that there were
conflicting figures listed on it. Despite the explanation from respondent that the last
figure written on the MCO represented his balance, petitioner’s employees did not
accommodate him. Faced with the prospect of leaving without his luggage,
respondent paid the overweight charges with his American Express credit card.
 Respondent’s troubles did not end there. Upon arrival in Manila, he discovered
that one of his bags had been slashed and its contents stolen. He particularized his
losses to be around US $5,310.00. In a letter dated 16 October 1989 respondent
bewailed the insult, embarrassment and humiliating treatment he suffered in the
hands of United Airlines employees, notified petitioner of his loss and requested
reimbursement thereof. Petitioner United Airlines, through Central Baggage Specialist
Joan Kroll, did not refute any of respondent’s allegations and mailed a check
representing the payment of his loss based on the maximum liability of US $9.70 per
pound. Respondent, thinking the amount to be grossly inadequate to compensate
him for his losses, as well as for the indignities he was subjected to, sent two (2) more
letters to petitioner airline, one dated 4 January 1990 through a certain Atty. Pesigan,
and another dated 28 October 1991 through Atty. Ramon U. Ampil demanding an out-
of-court settlement of P1,000,000.00. Petitioner United Airlines did not accede to his
demands.
 Consequently, on 9 June 1992 respondent filed a complaint for damages against
United Airlines alleging that he was a person of good station, sitting in the board of
directors of several top 500 corporations and holding senior executive positions for
such similar firms; 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 leastP500,000.00, plus
attorney's fees of at least P50,000.00. Similarly, he alleged that the damage to his
TRANSPORTATION LAW case digest
luggage and its stolen contents amounted to around $5,310.00, and requested
reimbursement therefor.
 United Airlines moved to dismiss the complaint on the ground that respondent’s
cause of action had prescribed, invoking Art. 29 of the Warsaw Convention which
provides –
Art. 29 (1) The right to damages shall be extinguished if an action is not brought
within two (2) years, reckoned from the date of arrival at the destination, or from the
date on which the aircraft ought to have arrived, or from the date on which the
transportation stopped.
(2) The method of calculating the period of limitation shall be determined by the law of
the court to which the case is submitted.
 Respondent countered that par. (1) of Art. 29 of the Warsaw Convention must be
reconciled with par. (2) thereof which states that "the method of calculating the period
of limitation shall be determined by the law of the court to which the case is
submitted." Interpreting thus, respondent noted that according to Philippine laws the
prescription of actions is interrupted "when they are filed before the court, when there
is a written extrajudicial demand by the creditors, and when there is any written
acknowledgment of the debt by the debtor." Since he made several demands upon
United Airlines: first, through his personal letter dated 16 October 1989; second,
through a letter dated 4 January 1990 from Atty. Pesigan; and, finally, through a letter
dated 28 October 1991 written for him by Atty. Ampil, the two (2)-year period of
limitation had not yet been exhausted.
 On 2 August 1992 the trial court ordered the dismissal of the action holding that
the language of Art. 29 is clear that the action must be brought within two (2) years
from the date of arrival at the destination. It held that although the second paragraph
of Art. 29 speaks of deference to the law of the local court in "calculating the period of
limitation," the same does not refer to the local forum’s rules in interrupting the
prescriptive period but only to the rules of determining the time in which the action
may be deemed commenced, and within our jurisdiction the action shall be deemed
"brought" or commenced by the filing of a complaint. Hence, the trial court concluded
that Art. 29 excludes the application of our interruption rules.
 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. Respondent’s 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 respondent’s cause of
action had not yet prescribed and ordered the records remanded to the Quezon City
trial court for further proceedings.
ISSUE: WON the action for damages is barred by the lapse of the 2-year
prescriptive period under Art. 29 of the Warsaw Convention?
HELD:
Supreme Court held that although the 2-year prescriptive period under the
Warsaw Convention has lapsed, it did not preclude the application of other pertinent
provisions of the Civil Code. Thus, the action for damages could still be filed based on
tort which can be filed within 4 years from the time cause of action accrued. As for the
action pertaining to the loss of the contents of the luggage, while it was well within the
bounds of the Warsaw Convention, the Supreme Court found that there was an
exception to the applicability of the 2-year prescriptive period – that is when
the airline employed delaying tactics and gave the passenger the run-around.
Applicability of the Warsaw Convention: Courts have discretion whether to
apply them or not.
Within our jurisdiction we have held that the Warsaw Convention can be applied, or
ignored, depending on the peculiar facts presented by each case. Thus, we have
ruled that the Convention's provisions do not regulate or exclude liability for other
breaches of contract by the carrier or misconduct of its officers and employees, or for
some particular or exceptional type of damage. Neither may the Convention be
invoked to justify the disregard of some extraordinary sort of damage resulting to a
passenger and preclude recovery therefor beyond the limits set by said Convention.
Likewise, we have held that the Convention does not preclude the operation of the
Civil Code and other pertinent laws. It does not regulate, much less exempt, the
carrier from liability for damages for violating the rights of its passengers under the
contract of carriage, especially if willful misconduct on the part of the carrier's
employees is found or established.
Respondent's complaint reveals that he is suing on two (2) causes of action: (a) the
Page | 13
shabby and humiliating treatment he received from petitioner's employees at the San
Francisco Airport which caused him extreme embarrassment and social humiliation;
and, (b) the slashing of his luggage and the loss of his personal effects amounting to
US $5,310.00.

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

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

Consequently, insofar as the first cause of action is concerned, respondent's failure to

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

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

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

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

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