JAL is guilty of breach of contract of carriage.
JAL is guilty of
IV. Carriage of Passengers
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:
Transportation Law Case Digests 3
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. It
cannot be supposed, without clear proof, that respondent had willingly
done away 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
1
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.
Transportation Law Case Digests 3
 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 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 waiting for
boarding. They also claimed that they were unjustifiably delayed to
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
2
 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 CX-905 but because the latter
pushed through with the upgrading despite the 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.
 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
Transportation Law Case Digests 3
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.
The only problem is the legal effect of the upgrading of the seat
accommodation of the Vazquezes. Did it constitute a breach of
contract?
 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.
Issue(2): We are not, however, convinced that the upgrading or the
breach of contract was attended by fraud or bad faith.
 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.
3
 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:
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
Transportation Law Case Digests 3
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.
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
4
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."
Transportation Law Case Digests 3
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:
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
5
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.
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
Transportation Law Case Digests 3
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
6
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 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
Transportation Law Case Digests 3
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:
. . . 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
7
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 Article 28(1) of the Warsaw Convention.
Transportation Law Case Digests 3
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
8
 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.
 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
Transportation Law Case Digests 3
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.
9
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 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.
Transportation Law Case Digests 3
 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 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
10
 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.
Transportation Law Case Digests 3
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.
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:
11
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.”
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.”
Transportation Law Case Digests 3
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.
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
12
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.
Transportation Law Case Digests 3
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 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.
13
 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 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
Transportation Law Case Digests 3
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
14
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 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.
Transportation Law Case Digests 3
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 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
15
 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
Transportation Law Case Digests 3
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 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
16
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
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.
Transportation Law Case Digests 3
 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
17
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. 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
Transportation Law Case Digests 3
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
18
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
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
Transportation Law Case Digests 3
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
19
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 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.
Transportation Law Case Digests 3
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 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
20
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.

Transportation Law Case Digests 3 21