PAL v CA

G.R. No. L-L-54470 May 8, 1990

GRIO-AQUINO, J.:

Facts:

On November 23, 1960, at 5:30 P.M., Starlight Flight No. 26 of the Philippine Air Lines (hereafter PAL)
took off from the Manduriao Airport in Iloilo, on its way to Manila, with 33 persons on board, including
the plane's complement. The plane did not reach its destination but crashed on Mt. Baco, Mindoro, one
hour and fifteen minutes after takeoff .The plane was Identified as PI-C133, a DC-3 type aircraft
manufactured in 1942 and acquired by PAL in 1948. It had flown almost 18,000 hours at the time of its
illfated flight. It had been certified as airworthy by the Civil Aeronautics Administration.

Among the fatalities was Nicanor Padilla who was a passenger on the star crossed flight. He was 29
years old, single. His mother, Natividad A. Vda. de Padilla, was his only legal heir. As a result of her son's
death, Mrs. Padilla filed a complaint (which was amended twice) against PAL, demanding payment of
P600,000 as actual and compensatory damages, plus exemplary damages and P60,000 as attorney's
fees. In its answer, PAL denied that the accident was caused by its negligence or that of any of the
plane's flight crew, and that, moreover, the damages sought were excessive and speculative.

(Nicanor A. Padilla was admitted by the Supreme Court of the Philippines to practice law; he was the
President and General Manager of the Padilla Shipping Co., Inc. He was also Vice-President and
Treasurer of the Allied Overseas Trading Co., Inc; He was a member of the Board of Directors of the
Junior Chamber of Commerce (Jaycees) International and Chairman of its Committee on Governmental
Affairs for the term 1960-1961. He died single, leaving as his nearest of kin and sole heiress to his estate
his mother the plaintiff herein with whom he was residing at the time of his death)

The trial court promulgated a decision demanding PAL to pay the plaintiff Natividad A. Vda. de Padilla
the sum of P477,000.00 as award for the expected income of the deceased Nicanor; P10,000.00 as
moral damages; P10,000.00 as attorney's fees; and to pay the costs. CA affirmed the decision in toto on
appeal.

Issue:

Whether or not the respondent court erred in computing the awarded indemnity on the basis of the life
expectancy of the late Nicanor A. Padilla rather than on the life expectancy of private respondent.

Held:

No. Petitioner relies on "the principle of law generally recognized and applied by the courts in the
United States" that "the controlling element in determining loss of earnings arising from death is, as
established by authorities, the life expectancy of the deceased or of the beneficiary, whichever is
shorter. However, resort to foreign jurisprudence would be proper only if no law or jurisprudence is
available locally to settle a controversy. Even in the absence of local statute and case law, foreign
jurisprudence is only persuasive.

For the settlement of the issue at hand, there are enough applicable local laws and jurisprudence. Under
Article 1764 and Article 2206(1) of the Civil Code, the award of damages for death is computed on the
basis of the life expectancy of the deceased, not of his beneficiary. The petitioner's contention that
actual damages under Article 2206 of the Civil Code must be proven by clear and satisfactory evidence is
correct, but its perception that such evidence was not presented in this case, is error.

For the settlement of the issue at hand, there are enough applicable local laws and jurisprudence. Under
Article 1764 and Article 2206(1) of the Civil Code, the award of damages for death is computed on the
basis of the life expectancy of the deceased, not of his beneficiary. The articles provide:

Art. 1764. Damages in cases comprised in this Section shall be awarded in accordance with Title XVIII of
this Book, concerning Damages. Article 2206 shall also apply to the death of a passenger caused by the breach of
contract by a common carrier.

Art. 2206. The amount of damages for death caused by a crime or quasi- delict shall be at least three
thousand pesos, even though there may have been mitigating circumstances. In addition:

(1) The defendant shall be liable for the loss of the earning capacity of the deceased, and the indemnity
shall be paid to the heirs of the latter; such indemnity shall in every case be assessed and awarded by the court,
unless the deceased on account of permanent physical disability not caused by the defendant, had no earning
capacity at the time of his death;

The petitioner's contention that actual damages under Article 2206 of the Civil Code must be proven by
clear and satisfactory evidence is correct, but its perception that such evidence was not presented in
this case, is error. Following the procedure used by the Supreme Court in the case of Davila vs. PAL, 49
SCRA 497, the trial court determined the victims gross annual income to be P23,100 based on his yearly
salaries of P18,000 from the Padilla Shipping Company and P5,100 from the Allied Overseas Trading
Corporation. Considering that he was single, the court deducted P9,200 as yearly living expenses,
resulting in a net income of P13,900 (not P15,900 as erroneously stated in the decision). Since Nicanor
Padilla was only 29 years old and in good health, the trial court allowed him a life expectancy of 30
years. Multiplying his annual net income of P13,900 by his life expectancy of 30 years, the product is
P417,000 (not P477,000) which is the amount of death indemnity due his mother and only forced heir.
The Court also found merit in the private respondent's plea for relief for the long delay this case has
suffered on account of the petitioner's multiple appeals as the respondent herein has already died
without being able to receive the indemnity she well deserved. Considering how inflation has depleted
the value of the judgment in her favor, in the interest of justice, the petitioner should pay legal rate of
interest on the indemnity due her.
Alitalia v IAC
G.R. No. 71238 March 19, 1992
BIDIN, J.:

Dr. Felipa Pablo, an associate professor in the University of the Philippines and a research grantee of the
Philippine Atomic Energy Agency, was invited to take part at a meeting of the Department of Research
and Isotopes in Italy in view of her specialized knowledge in foreign substances in food and the
agriculture environment. She would be the second speaker on the first day of the meeting. Dr. Pablo
booked passage on petitioner Alitalia. She arrived in Milan on the day before the meeting, but was told
that her luggage was delayed and was in a succeeding flight from Rome to Milan. The luggage included
her materials for the presentation. The succeeding flights did not carry her luggage. Desperate, she went
to Rome to try to locate the luggage herself, but to no avail. She returned to Manila without attending
the meeting. She demanded reparation for the damages. She rejected Alitalias offer of free airline
tickets and commenced an action for damages. As it turned out, the luggage was actually forwarded to
Ispra, but only a day after the scheduled appearance. It was returned to her after 11 months.

The CFI rendered judgment in Dr. Pablo's favor:

"(1) Ordering the defendant (ALITALIA) to pay . . . (her) the sum of TWENTY THOUSAND PESOS
(P20,000.00), Philippine Currency, by way of nominal damages;

(2) Ordering the defendant to pay . . . (her) the sum of FIVE THOUSAND PESOS (P5,000.00), Philippine
Currency, as and for attorney's fees; (and)

(3) Ordering the defendant to pay the costs of the suit."

ALITALIA appealed to the Intermediate Appellate Court but failed to obtain a reversal of the
judgment. The Appellate Court not only affirmed the Trial Court's decision but also increased the award
of nominal damages payable by ALITALIA to P40,000.00.

ALITALIA appealed to the Supreme Court with the same points it had made before the CFI and the CA,
these being: 1.) that the Warsaw Convention should have been applied to limit ALITALIA'S liability; and
2.) that there is no warrant in fact or in law for the award to Dr. Pablo of nominal damages and
attorney's fees.

Issue:

Is ALITALIA liable for damages under the Warsaw Convention?

Held:

No. Under the Warsaw Convention, an air carrier is made liable for damages for xxx 2.) the destruction
or loss of, or damage to, any registered luggage or goods, if the occurrence causing it took place during
the carriage by air, and 3.) delay in the transportation by air of passengers, luggage or goods xxx

The Convention also purports to limit the liability of the carriers in the following manner:
1. In the carriage of passengers the liability of the carrier for each passenger is limited to the sum of 250,000 francs . . .
Nevertheless, by special contract, the carrier and the passenger may agree to a higher limit of liability.

2. XXX b) In the case of loss, damage or delay of part of registered baggage or cargo, or of any object contained therein, the
weight to be taken into consideration in determining the amount to which the carrier's liability is limited shall be only the total
weight of the package or packages concerned. Nevertheless, when the loss, damage or delay of a part of the registered baggage
or cargo, or of an object contained therein, affects the value of other packages covered by the same baggage check or the same
air way bill, the total weight of such package or packages shall also be taken into consideration in determining the limit of
liability.

3. As regards objects of which the passenger takes charge himself the liability of the carrier is limited to 5000 francs per
passenger.

4. The limits prescribed . . shall not prevent the court from awarding, in accordance with its own law, in addition, the whole or
part of the court costs and of the other expenses of litigation incurred by the plaintiff. The foregoing provision shall not apply if
the amount of the damages awarded, excluding court costs and other expenses of the litigation, does not exceed the sum which
the carrier has offered in writing to the plaintiff within a period of six months from the date of the occurrence causing the
damage, or before the commencement of the action, if that is later.

The Warsaw Convention however denies to the carrier availment "of the provisions which exclude or
limit his liability, if the damage is caused by his wilful misconduct or by such default on his part as, in
accordance with the law of the court seized of the case, is considered to be equivalent to wilful
misconduct," or "if the damage is (similarly) caused . . by any agent of the carrier acting within the scope
of his employment." The Hague Protocol amended the Warsaw Convention by removing the provision
that if the airline took all necessary steps to avoid the damage, it could exculpate itself completely, and
declaring the stated limits of liability not applicable "if it is proved that the damage resulted from an act
or omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and
with knowledge that damage would probably result."

In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of
petitioner airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but
without appreciable damage. The fact is, nevertheless, that some special species of injury was caused to
Dr. Pablo because petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the time
appointed a breach of its contract of carriage, to be sure with the result that she was unable to
read the paper and make the scientific presentation (consisting of slides, autoradiograms or films, tables
and tabulations) that she had painstakingly labored over, at the prestigious international conference, to
attend which she had traveled hundreds of miles, to her chagrin and embarrassment and the
disappointment and annoyance of the organizers. She felt, not unreasonably, that the invitation for her
to participate at the conference, extended by the Joint FAO/IAEA Division of Atomic Energy in Food and
Agriculture of the United Nations, was a singular honor not only to herself, but to the University of the
Philippines and the country as well, an opportunity to make some sort of impression among her
colleagues in that field of scientific activity. The opportunity to claim this honor or distinction was
irretrievably lost to her because of Alitalia's breach of its contract. Apart from this, there can be no
doubt that Dr. Pablo underwent profound distress and anxiety, which gradually turned to panic and
finally despair, from the time she learned that her suitcases were missing up to the time when, having
gone to Rome, she finally realized that she would no longer be able to take part in the conference. As
she herself put it, she "was really shocked and distraught and confused." The compensation for the
injury suffered by Dr. Pablo cannot under the circumstances be restricted to that prescribed by the
Warsaw Convention for delay in the transport of baggage.

She is not, of course, entitled to be compensated for loss or damage to her luggage. As already
mentioned, her baggage was ultimately delivered to her in Manila, tardily but safely. She is however
entitled to nominal damages which, as the law says, is adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be vindicated and recognized, and
not for the purpose of indemnifying the plaintiff for any loss suffered and this Court agrees that the
respondent Court of Appeals correctly set the amount thereof at P40,000.00.