Lopez v. Northwest Airlines Inc.

and RTC of Makati, Branch 65 (17 June 1993) Ponente: Davide; 3rd Division Nature: Petition for review on certiorari seeking to reverse order of dismissal (treated by the SC as special civil action for certiorari under Rule 65) Doctrine: Jurisdiction is determined by the allegations in the complaint and is not made to depend upon the allegations in the answer or in the motion to dismiss. It continues until the case is finally terminated. While jurisdiction over the subject matter of the case may be raised at any stage of the proceedings, a party may be barred from raising it on the ground of laches or estoppel. Facts: 1. Lopez purchased from Northwest Airlines, Inc. (NWA) in New York a ticket for flights from NY to Seattle to Manila (connecting flights to get to Manila from NY) and then from Manila to Tokyo to New York (return trip). Lopez made the trip to the Philippines. Her trip back to New York via Tokyo was confirmed by NWA. However, 2 days before the date of the flight, she was informed that she could not be accommodated in view of its cancellation. NWA remained adamant despite Lopez s insistence. NWA scheduled her flight for 11 July 1987 instead of 10 July. 2. Petitioner then filed a complaint for damages against NWA before the Makati RTC. She alleges that she suffered mental anguish, embarrassment, humiliation and great inconvenience as a result of NWA s bad faith, utter disregard of her rights, and non fulfillment of its obligation under the contract of carriage. 3. NWA filed a motion to dismiss the complaint on the ground that the court has no jurisdiction over the subject matter of the action under the Warsaw Convention. The trial court, denied the motion to dismiss on the ground that it is "not well-taken." NWA then filed with the CA a special civil action for certiorari to set aside the aforesaid order. Private respondent insisted that the trial court is precluded from exercising jurisdiction over the case pursuant to Article 28(1) of the Warsaw Convention1. However, CA denied the petition. CA ratiocinated that Article 28(1) of the Warsaw Convention prescribes the venue for the different actions for damages enumerated in Articles 17, 18 and 19 therein, and does not cover an action for damages arising out of the carrier's absolute refusal, in bad faith, to comply with the contract of carriage. Furthermore, Article 28(1) was never meant to exempt a carrier from liability arising from breaches of contract not enumerated in said Articles 17, 18 and 19. 4. NWA then filed a petition for review, which was dismissed for the failure to sufficiently show that the Court of Appeals had committed any reversible error. Said decision was made final after reconsideration. NWA was then compelled to go back to the trial court and filed its Answer. After the trial on merits, the parties were made to file their respective memorandum, which expired on 14 February 1992. On 10 July 1992, NWA filed a second motion to dismiss civil case Civil Case. It argued that based on the court decision in the Santos vs. Northwest Orient Airlines case, the previous rulings of the CA and the SC cannot stand, and therefore must be deemed overruled and superseded. The trial court then handed down an order dismissing the case for want of jurisdiction. It upheld the ruling in Santos vs. Northwest Orient Airline and CA where the constitutionality of Article 28(1) of the Warsaw Convention was upheld. As such, it appeared clear that the court is not vested with jurisdiction to hear and render judgment in the present case. Hence, this petition. Issue: Whether the trial court had jurisdiction over the case? Held: Yes. Ratio: Private respondent filed its Answer to the Complaint in the Civil Case after the Supreme sustained the decision of the CA which dismissed NWA s petition to set aside the trial court s denial of its motion to dismiss based on lack of jurisdiction over the subject matter. None of the parties attached to their pleadings filed before this Court copies of the Complaint and the Answer. It is therefore not clear to the Supreme Court the said complaint contains specific allegations which may not entirely bring the subject matter within the broad confines of Article 28(1) of the Warsaw Convention, or whether the private respondent (a) had pleaded in its Answer lack of jurisdiction as one of its affirmative defenses, or (b) had set up a counterclaim invoking the jurisdiction of the trial court for specific reliefs in its favor as a consequence of the filing of the case. However, it is certain that private respondent participated by presenting and offering its evidence and did not object to the court order requiring the parties to submit their evidence. Pursuant to paragraphs (1) and (2), Section 15, Article VIII of the 1987 Constitution and paragraph 11.1, subdivision 11 of Administrative Circular No. 1 of this Court dated 28 January 1988, the trial court had ninety (90) days from 15 February 1992 or until 15 May 1992 within which to decide the case. There was nothing more for the trial court to do except decide the case especially since its 90-day mandatory period to do so had already expired. Doubtless, in view of the decision of the Court of Appeals in CA-G.R. SP No. 16174 and Our resolution in G.R. No. 91393, it had at least prima facie jurisdiction over the case and, therefore, the rendition of judgment therein was undeniably within its authority. Jurisdiction is determined by the allegations in the complaint and is not made to depend upon the allegations in the answer or in the motion to dismiss. It continues until the case is finally terminated. While jurisdiction over the subject matter of the case may be raised at any stage of the proceedings, a party may be barred from raising it on the ground of laches or estoppel.
1 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.

Santos vs. Northwest Orient Airlines cannot be invoked to oust the trial court of jurisdiction over the civil case. First, it was not shown that the facts in Santos are the same as that with the case. Moreover, it behooves the trial court to determine whether the private respondent is already barred from raising the issue of jurisdiction because of estoppel or laches. Finally, trial court should have taken into consideration the earlier case of Pan American World Airways, Inc. vs. IAC, where the Court affirmed the CA decision awarding damages to the private respondent for Pan Am s refusal to accommodate the latter on the flight despite the fact that said private respondent had a confirmed plane ticket. Posterior changes in the doctrine of this Court cannot retroactively be applied to nullify a prior final ruling in the same proceeding where the prior adjudication was had, whether the case should be civil or criminal in nature. Thus, the trial court committed grave abuse of discretion amounting to lack of jurisdiction in granting the second motion to dismiss solely on the basis of the Santos case, and in dismissing Civil Case No. 88-1014 weeks after its period to decide the same had expired. The Presiding Judge of Branch 65 should have denied the motion and decided the case taking into account, however, the decision in the Santos case and the above observations. Dispositive: the instant petition is hereby GRANTED. The Order of Branch 65 of he Regional Trial Court of Makati, Metro Manila of 31 August 1992 in Civil Case No. 88-1014 entitled Maria L. Lopez vs. Northwest Airlines, Inc. is hereby ANNULLED and SET ASIDE. The respondent court is directed to render its decision in the said case with purposeful dispatch. Costs against the private respondent. Votes: Bidin, Feliciano and Romero concur. Melo dissents. (4 on 1) Dissenting opinion: (MELO, J.) Private respondent's participation in the case by filing an Answer, presenting evidence, and not objecting to the trial court's order requiring the parties to submit their evidence may not be equated to estoppel. The private respondent had no alternative but to go through with the trial after the challenge it posed against the denial of the first motion to dismiss was rebuffed by the CA and the SC. Furthermore, in view of the rule in Santos vs. Northwest Orient Airlines, it is the passenger's ultimate destination that determines the country where the suit against an international carrier is to be filed. If previous to Santos the case below were decided on the merits and the decision thereafter attained finality, the doctrine of the law of the case would apply. But since the decision is elevated with Santos in the meantime having been pronounced, the appellate could should have vacated the judgment of the trial court for lack of jurisdiction.