Case Digest: Cathay Pacific vs. Spouses Vasquez, G.R. No. 150843

 

Cathay Pacific v. Spouses Vasquez, G.R. 150843, March 14, 2003, 399 SCRA 207

Subject: Transportation Law

FACTS

Spouses Vasquez, private respondents were passengers of Cathay Pacific, petitioner and the former was booked on its flight CX-905 with the route of Manila-HK-Manila with their maid and 2 friends, went to HK for pleasure and business. The maid's boarding pass was for the Economy Class, the spouses and friends indicated that they were on the Business Class. However, while in Kai Tak Airport, a flight attendant who was checking on the boarding pass of the passenger informed the spouses that they were upgraded from Business Class to First Class since they were noted as frequent flyers and Gold members of Marco Polo Club.

Respondents refused as they are together with their 2 friends, and unless the latter will be upgraded to First Class, then they will accept the upgrade since they will talk business while on flight and it would not look nice for them as hosts to travel while their guest is in lower class.

Unusual reaction to a seat upgrade, Ms. Chiu after consulting with her supervisor, informed that if they would not avail the upgrade, they would not be allowed to take the flight, Dr. Vasquez agreed to take together with her spouse the First Class and the guests in Business Class.

Back in Manila, respondents filed a damage suit and asked for damages to include the attorney’s fees on the ground that the discourteous and humiliating behavior of the attendant, Ms. Chiu and the breached on the contract of carriage.

RTC ruled in favor of Spouses Vasquez awarded them P100,000 each as nominal damage, 2M each as moral damages, 5M each as exemplary damages and 1M each as attorney’s fees. CA then affirmed but deleted the award of exemplary damages and reduced the awards of moral, nominal and attorney’s fees.

ISSUE

Whether or not the Vasquezes are entitled to damages.

RULING

Yes.

Under the law, the requisites for the award of moral damages are: (1) there must be an injury clearly sustained by the claimant, whether physical, mental or psychological; (2) there must be a culpable act or omission factually established; (3) the wrongful act or omission of the defendant is the proximate cause of the injury sustained by the claimant; and (4) the award for damages is predicated on any of the cases stated in Art 2219 of the Civil Code.

In this case, the petition was partly granted. Considering that the breach was intended to give more benefit and advantage to the Vasquezes by upgrading their accommodation because their being valued status as Marco Polo members however, a breach of contract committed by Cathay because without prior notice or consent over the respondents vigorous objection. The SC reduced the nominal damages from 100,000 to P5,000. Moral and exemplary damages excluded by the SC for the Cathay breaching the contract of carriage does 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.

Case Digest: Northwest Airlines vs. Catapang, G.R. No. 174364

 

Northwest Airlines v. Catapang, 594 SCRA 401, G.R. No. 174364, July 30, 2009

Subject: Transportation Law

FACTS

Delfin S. Catapang, a lawyer and Assistant Vice President of the United Coconut Planters Bank (UCPB), was directed by UCPB to go on a business trip to Paris, intending to proceed to the United States afterward. Catapang requested First United Travel, Inc. (FUT) to issue him a ticket allowing rebooking or rerouting within the United States. FUT, as the authorized agent of Northwest Airlines, Inc. (petitioner), issued a ticket with a rebooking/rerouting scheme for an additional fee of US$50.

Upon Catapang's arrival in New York, petitioner's office informed him that his ticket was not rebookable or reroutable. He was advised to go to petitioner's nearest branch office. Catapang visited the World Trade Center branch, where an employee informed him that his ticket was of a "restricted type" and could only be rebooked by paying an additional US$644.00. Faced with no other option, Catapang paid the amount under protest.

In response, Catapang sent a letter of demand to petitioner, seeking damages for the airline's breach of contract, mistreatment by its personnel, and the additional expenses incurred. With no response from petitioner, Catapang filed a complaint for damages with the Regional Trial Court (RTC) of Makati. The RTC found petitioner liable for breach of contract of carriage and awarded damages. The Court of Appeals affirmed the decision with modifications, reducing the award of moral damages but upholding the overall decision.

ISSUE

Whether or not Northwest Airlines, Inc. breached the contract of carriage with Delfin S. Catapang and is liable for damages.

RULING

Yes, the Supreme Court ruled in favor of respondent and held petitioner liable for breach of contract of carriage. The court found that petitioner breached the contract of carriage by not allowing respondent to rebook or reroute his flight despite the agreement made with FUT. The court also noted that petitioner's agent in New York treated respondent rudely, which further aggravated the breach. The court held that passengers have the right to be treated with kindness, respect, courtesy, and due consideration by a carrier's employees. Therefore, petitioner was held liable for damages.

Case Digest: Air France vs. Gillego, G.R. No. 165266

 

Air France vs. Gillego, 638 SCRA 472, G.R. No. 165266, December 15, 2010

Subject: Transportation Law

FACTS

On May 16, 1993, respondent Bonifacio H. Gillego left Manila on board petitioner Air France’s aircraft bound for Paris, France. While waiting at the De’ Gaulle International Airport for his connecting flight to Budapest, respondent learned that petitioner had another aircraft bound for Budapest with an earlier departure time than his scheduled flight. He then went to petitioner’s counter at the airport and made arrangements for the change in his booking. He was given a corresponding ticket and boarding pass and also a new baggage claim stub for his checked-in luggage.

However, upon arriving in Budapest, the respondent was unable to locate his luggage and the petitioner airliner never delivered the lost luggage despite follow-up inquiries by the respondent. Upon his return to the Philippines, respondent’s lawyer immediately wrote petitioner’s Station Manager complaining about the lost luggage and the resulting damages he suffered while in Budapest.

The respondent filed a complaint for damages against the petitioner alleging that by reason of its negligence and breach of obligation to transport and deliver his luggage. As special and affirmative defense, petitioner contended that its liability for lost checked-in baggage is governed by the Warsaw Convention for the Unification of Certain Rules Relating to International Carriage.

The trial court rendered its decision in favor of respondent and against the petitioner. Petitioner appealed to the CA, which affirmed the trial court’s decision.

ISSUE

Whether or not the award of moral and exemplary damages to the respondent is justifiable.

RULING

Yes, the award of moral and exemplary damages to the respondent is justifiable.

Under the law, in awarding moral damages for breach of contract of carriage, the breach must be wanton and deliberately injurious or the one responsible acted fraudulently or with malice or bad faith. Not every case of mental anguish, fright or serious anxiety calls for the award of moral damages. Bad faith should be established by clear and convincing evidence. The settled rule is that the law always presumes good faith such that any person who seeks to be awarded damages due to the acts of another has the burden of proving that the latter acted in bad faith or with ill motive.

In this case, while respondent failed to cite any act of discourtesy, discrimination or rudeness by petitioner’s employees, SC held that this did not make his loss and moral suffering insignificant and less deserving of compensation. In repeatedly ignoring respondent’s inquiries, petitioner’s employees exhibited an indifferent attitude without due regard for the inconvenience and anxiety the respondent experienced after realizing that his luggage was missing. Petitioner was thus guilty of bad faith in breaching its contract of carriage with the respondent, which entitles the latter to the award of moral damages.

Case Digest: Sulpicio Lines vs. Curso, G.R. No. 157009

 

Sulpicio Lines vs. Curso, 615 SCRA 575, G.R. No. 157009, March 17, 2010

Subject: Transportation Law

FACTS

In October 1988, Dr. Cenon E. Curso boarded MV Dona Marilyn of Sulpicio Lines, Inc., bound for Tacloban City. Due to Typhoon Unsang, the ship sank. Dr. Curso's body, along with hundreds others, was not recovered.

At the time of the ship's sinking, Dr. Curso was 48 years old, and was a resident physician at the Naval District Hospital in Naval, Biliran with a basic monthly salary of P3,940.00, and would have retired from government service by December 20, 2004 at the age of 65.

The surviving brothers and sisters of Dr. Curso filed an action for damages against Sulpicio Lines based on breach of contract of carriage by sea.

RTC dismissed the complaint and said there was no basis for the award of damages because the ship had sunk due to force majeure. The RTC also held that the crew and officers acted with diligence and that there was no basis to find the ship not seaworthy since the Special Board of Marine Inquiry absolved Sulpicio Lines of any liability.

CA reversed RTC's findings, saying there was inadequate proof to show Sulpicio Inc., as well as its officers and crew, exercised diligence

ISSUE

Whether or not the brothers and sisters of a deceased passenger in a case of breach of contract of carriage is entitled to an award of moral damages against the carrier.

RULING

 No.

As a general rule, moral damages are not recoverable in actions for damages predicated on a breach of contract, unless there is fraud or bad faith. As an exception, moral damages may be awarded in case of breach of contract of carriage that results in the death of a passenger, in accordance with Article 1764, in relation to Article 2206 (3), of the Civil Code, which provide: "The spouse, legitimate and illegitimate descendants and ascendants of the deceased may demand moral damages for mental anguish by reason of the death of the deceased."

In this case, the brothers and sisters of Dr. Curso are not entitled thereto due to the legislative intent to exclude them from the recovery of moral damages for mental anguish by reason of the death of the deceased, as can be seen from the omission of brothers and sisters from Article 2206 (3) of the Civil Code.

Case Digest: Regional Container Lines v. Netherlands Insurance, G.R. No. 168151

 

Regional Container Lines v. Netherlands Insurance, 598 SCRA 304, G.R. No. 168151, September 4, 2009

Subject: Transportation Law

FACTS

In October 1995, 405 cartons of Epoxy Molding Compound were consigned to be shipped from Singapore to Manila for Temic Telefunken Microelectronics Philippines. U-Freight Singapore PTE Ltd., a forwarding agent based in Singapore, contracted the services of Pacific Eagle Lines PTE. Ltd. to transport the subject cargo. As the cargo was highly perishable, the inside of the container had to be kept at a temperature of 0º Celsius. Pacific Eagle loaded the refrigerated container on board the M/V Piya Bhum, a vessel owned by RCL, with which Pacific Eagle had a slot charter agreement.

However, when Temic received the shipment, the cargo completely damaged. It was found that during unloading from the ship, the chart temperature reading of the container fluctuated to 33º Celsius.

Temic then filed a claim for cargo loss against Netherlands Insurance. As subrogee, Netherlands Insurance filed a complaint for subrogation of insurance settlement with the RTC of Manila.

The trial court dismissed the complaint on demurrer to evidence. On appeal, CA reversed the decision of RTC. Motion for reconsiderations to CA were also dismissed. Hence this petition.

ISSUE

Whether or not the CA correctly held RCL and EDSA Shipping liable as common carriers under the theory of presumption of negligence

RULING

Yes, CA correctly held that RCL and EDSA Shipping are liable.

Under the law, a common carrier is presumed to have been negligent if it fails to prove that it exercised extraordinary vigilance over the goods it transported. When the goods shipped are either lost or arrived in damaged condition, a presumption arises against the carrier of its failure to observe that diligence, and there need not be an express finding of negligence to hold it liable. To overcome the presumption of negligence, the common carrier must establish by adequate proof that it exercised extraordinary diligence over the goods. It must do more than merely show that some other party could be responsible for the damage.

In this case, RCL and EDSA Shipping failed to prove that they did exercise the degree of diligence required by law over the goods they transported. It is settled in maritime law jurisprudence that cargoes while being unloaded generally remain under the custody of the carrier; RCL and EDSA Shipping failed to dispute this. RCL and EDSA Shipping, however, failed to satisfy this standard of evidence and offered no evidence at all; a reversal of a dismissal based on a demurrer to evidence bars the defendant from presenting evidence supporting its allegations.

Case Digest: Cathay Pacific v. Court of Appeals, 219 SCRA 520, G.R. No. 60501

 

Cathay Pacific v. Court of Appeals, 219 SCRA 520, G.R. No. 60501, 5 March 1993

Subject: Transportation Law

FACTS

On 19 October 1975, respondent Tomas L. Alcantara was a first-class passenger of petitioner Cathay Pacific Airways, Ltd. on its Flight No. CX-900 from Manila to Hongkong and onward from Hongkong to Jakarta on Flight No. CX-711. The purpose of his trip was to attend the following day, 20 October 1975, a conference with the Director General of Trade of Indonesia, Alcantara being the Executive Vice-President and General Manager of Iligan Cement Corporation, Chairman of the Export Committee of the Philippine Cement Corporation, and representative of the Cement Industry Authority and the Philippine Cement Corporation. He checked in his luggage which contained not only his clothing and articles for personal use but also papers and documents he needed for the conference.

Upon his arrival in Jakarta, respondent discovered that his luggage was missing. When he inquired about his luggage from CATHAY's representative in Jakarta, private respondent was told that his luggage was left behind in Hongkong. For this, respondent Alcantara was offered $20.00 as "inconvenience money" to buy his immediate personal needs until the luggage could be delivered to him.

His luggage finally reached Jakarta more than twenty-four (24) hours after his arrival. However, it was not delivered to him at his hotel but was required by petitioner to be picked up by an official of the Philippine Embassy.

On 1 March 1976, respondent filed his complaint against petitioner with the Court of First Instance (now RTC) of Lanao del Norte. RTC rendered a decision in favor of Alcantara. On appeal, CA affirms the decision of CFI with modifications. Hence this petition.

ISSUE

Whether or not the Warsaw Convention on the liability of a carrier to its passengers is applicable in this case.

RULING

No, it is not.

The Warsaw Convention itself provides in Art. 25 that:

“(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 wilfull 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 wilfull misconduct;

(2) Similarly the carrier shall not be entitled to avail himself of the said provisions, if the damage is caused under the same circumstances by any agent of the carrier acting within the scope of his employment."

In this case, SC held that Warsaw Convention declares the carrier liable for damages in the enumerated cases and under certain limitations. However, it must not be construed to 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, which is clearly the case before us. When petitioner airline misplaced respondent's luggage and failed to deliver it to its passenger at the appointed place and time, some special species of injury must have been caused to him.

Case Digest: PAL v. Court of Appeals, 207 SCRA 100, G.R. No. 92501

 

PAL v. Court of Appeals, 207 SCRA 100, G.R. No. 92501, 6 March 1992

Subject: Transportation Law

FACTS

Isidro Co, plaintiff, accompanied by his wife and son, arrived at the Manila International Airport aboard defendant airline's PAL Flight No. 107 from San Francisco, California, U.S.A. Soon after his embarking, plaintiff proceeded to the baggage retrieval area to claim his checks in his possession. Plaintiff found eight of his luggage, but despite diligent search, he failed to locate ninth luggage, with claim check number 729113 which is the one in question in this case.

Plaintiff then immediately notified defendant company through its employee, Willy Guevarra, who was then in charge of the PAL claim counter at the airport. Willy Guevarra, who testified during the trial court on April 11, 1986, filled up the printed form known as a Property Irregularity Report, acknowledging one of the plaintiff's luggage to be missing, and signed after asking plaintiff himself to sign the same document. In accordance with this procedure in cases of this nature, Willy Guevarra asked plaintiff to surrender to him the nine claim checks corresponding to the nine luggage, i.e., including the one that was missing.

Plaintiff on several occasions unrelentingly called at defendant's office in order to pursue his complaint about his missing luggage but no avail. Thus, on April 15, 1985, plaintiff through his lawyer wrote a demand letter to defendant company though Rebecca V. Santos, its manager, Central Baggage Services. Despite the letter of apology from the inconvenience, however, defendants never found plaintiff's missing luggage or paid its corresponding value. Consequently, in May 1985, plaintiff filed his present complaint against said defendants.

RTC rendered a decision in favor of plaintiff. CA affirmed RTC decision in toto. Hence this petition.

Petitioner contends that under the Warsaw Convention, its liability, if any, cannot exceed US $20.00 based on weight as private respondent Co did not declare the contents of his baggage nor pay traditional charges before the flight.

ISSUE                                                                                           

Whether or not CA erred in disregarding the limit of liability under the Warsaw Convention which limits the liability of an air carrier of loss, delay or damage to checked-in baggage to US$20.00 based on weight.

RULING

No, it is not applicable.

Under the law, the liability of the common carrier for the loss, destruction or deterioration of goods transported from a foreign country to the Philippines is governed primarily by the New Civil Code. In all matters not regulated by said Code, the rights and obligations of common carriers shall be governed by the Code of Commerce and by Special Laws.

In this case, since the passenger's destination in this case was the Philippines, Philippine law governs the liability of the carrier for the loss of the passenger's luggage as contemplated in Articles 1733, 1735 and 1753 of the Civil Code. Petitioner failed to overcome, not only the presumption, but more importantly, the private respondent's evidence, proving that the carrier's negligence was the proximate cause of the loss of his baggage. Furthermore, petitioner acted in bad faith in faking a retrieval receipt to bail itself out of having to pay Co's claim. Therefore, CA did not err in disregarding the limits of liability under the Warsaw Convention.