TRANSPO CASES (H)

OBLIGATIONS OF CARRIER IN AIR TRANSPORTATION

G.R. No. 124110 April 20, 2001

UNITED AIRLINES, INC., Petitioner vs.
COURT OF APPEALS, ANICETO FONTANILLA,
in his personal capacity and in behalf of his minor son
MYCHAL ANDREW FONTANILLA, Respondents.

FACTS:
Aniceto Fontanilla bought from United Airlines,through the Philippine Travel Bureau in Manila,
three “Visit the U.S.A.” tickets from himself, his wife and his minors on, Mychal, to visit the
cities of Washington DC, Chicago and Los Angeles.All flights had been confirmed previously by
United Airlines.
Having used the first coupon to DC and while at the Washington Dulles Airport, Anice to
changed their itinerary, paid the penalty for rewriting their tickets and was issued tickets
with corresponding boarding passes with the words: “Check-in-required.” They were then
set to leave but were denied boarding because the flight was overbooked. The CA ruled that
private respondents’ failure to comply with the check-in requirement will not defeat his claim as the denied
boarding rules were not complied with applying the laws of the USA, relying on the Code of Federal Regulation
Part on Oversales of the USA

ISSUE: WON the CA is correct in applying the laws of USA.

HELD: No.

According to the doctrine of “lex loci contractus”, the law of the place where a contract is made or entered into
governs with respect to its nature and validity, obligation and interpretation shall govern. This has been said to
be the rule even though the place where the contract was made is different from the place where it is to be
performed. Hence, the court should apply the law of the place where the airline ticket was issued, where the
passengers are residents and nationals of the forum and the ticket is issued in such State by the defendant
airline. Therefore, although, the contract of carriage was to be performed in the United States, the tickets were
purchased through petitioner’s agent in Manila. It is true that the tickets were "rewritten" in D.C.,however, such
fact did not change the nature of the original contract of carriage entered Into by the parties in Manila.
AIR FRANCE v. BONIFACIO H. GILLEGO
GR. No. 165266, December 15, 2010

FACTS: Gillego, then incumbent Congressman and Chairman of the House of

Representatives Committee on Civil, Political and Human Rights, was invited to participate
as one of the keynote speakers at the 89th Inter-Parliamentary Conference Symposium on
Parliament Guardian of Human Rights to be held in Budapest, Hungary and Tokyo, Japan.

On May 16, 1993, Gillego left Manila on board Air Frances aircraft bound for Paris, France.
While waiting at the Airport for his connecting flight to Budapest scheduled a few hours
after his arrival learned that Air France had another aircraft bound for Budapest with an
earlier departure time than his scheduled flight. He then made arrangements for the
change in his booking. He was given a corresponding ticket and boarding pass and also a
new baggage claim stub for his checked-in luggage. However, his baggage despite
numerous follow-up was never delivered to him prompting Gillego to purchase new set of
clothes and other personal effects.

Gillego filed a complaint for damages against the Air France alleging that by reason of its
negligence and breach of obligation to transport and deliver his luggage, Gillego suffered
inconvenience, serious anxiety, physical suffering and sleepless nights. It was further
alleged that due to the physical, mental and emotional strain resulting from the loss of his
luggage, aggravated by the fact that he failed to take his regular medication, Gillego had to
be taken to a medical clinic in Tokyo, Japan for emergency treatment.

The RTC found there was gross negligence on the part of Air France. It likewise found Air
France guilty of willful misconduct as it persistently disregarded the rights of Gillego. As to
the applicability of the limited liability for lost baggage under the Warsaw Convention, the
trial court rejected the argument of Air France. The CA affirmed the trial courts decision.

ISSUES:

I. Was there legal and factual basis that Air France's actions were attended by gross
negligence, bad faith and willful misconduct and that it acted in a wanton, fraudulent,
reckless, oppressive or malevolent manner to justify award of moral and exemplary
damages?

II. Is the amount of damages awarded by the RTC and affirmed by the CA as moral and
exemplary damages excessive, unconscionable and unreasonable?
HELD: I. In an action based on a breach of contract of carriage, the aggrieved party does not
have to prove that the common carrier was at fault or was negligent. All that he has to
prove is the existence of the contract and the fact of its non-performance by the carrier.

The action filed by the respondent is founded on such breach of the contract of carriage
with petitioner who offered no satisfactory explanation for the unreasonable delay in the
delivery of respondents baggage. The presumption of negligence was not overcome by the
petitioner and hence its liability for the delay was sufficiently established.

The Court held that the trial and appellate courts did not err in finding that petitioner acted
in bad faith in repeatedly ignoring respondents follow-up calls. Clearly, Air France did not
give the attention and care due to its passenger whose baggage was not transported and
delivered to him at his travel destination and scheduled time; inattention to and lack of
care for the interest 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.

HELD: II. The amount of damages must be fair, reasonable and proportionate to the injury
suffered. The purpose of awarding moral damages is to enable the injured party to obtain
means, diversion or amusement that will serve to alleviate the moral suffering he has
undergone by reason of defendant's culpable action. On the other hand, the aim of
awarding exemplary damages is to deter serious wrongdoings. Hence, the Court held that
the sum of P1,000,000.00 awarded by the trial court is excessive and not proportionate to
the loss or suffering inflicted on the passenger under the circumstances.

DENIED

SABENA BELGIAN WORLD AIRLINES V CA

GR No. 1046855, 3/14/1996

Doctrine:
– Art. 1733 of the [Civil] Code provides that from the very nature of their business and by reasons of
public policy, common carriers are bound to observe extraordinary diligence in the vigilance
over the goods transported by them.
– Art. 1735 establishes the presumption that if the goods are lost, destroyed or deteriorated, common
carriers are presumed to have been at fault or to have acted negligently, unless they prove
that they had observed extraordinary diligence as required in Article 1733.
 – The Warsaw Convention denies to the carrier availment ‘of the provisions which exclude
or limit his liability, if the damage is caused by his wilful misconduct or by such
default on his part as, in accordance with the law of the court seized of the case, is considered to be
equivalent to wilful misconduct,’ or ‘if the damage is (similarly) caused x x x by any agent of the
carrier acting within the scope of his employment.’

Facts:
1. Plaintiff Ma. Paula San Agustin, herein private respondent, was a passenger on board Flight SN 284
of defendant airline originating from Casablanca to Brussels, Belgium on her way back to Manila.
She checked in her luggage which contained her valuables, namely: jewelries valued at $2,350.00;
clothes $1,500.00; shoes/bag $150; accessories $75; luggage itself $10.00; or a total of $4,265.00,
for which she was issued Tag No. 71423. She stayed overnight in Brussels and her luggage was left on
board Flight SN 284.
2. She arrived at Manila International Airport and immediately submitted her Tag No. 71423 but her
luggage was missing. She was advised to accomplish and submit a property Irregularity Report
which she submitted and filed on the same day but when her luggage could not be found, she filed
a formal complaint with defendant’s Local Manager.
3. Subsequently, plaintiff was furnished copies of telexes of defendant’s Brussel’s Office that the latter
found her luggage and that they have broken the locks for identification. Plaintiff was assured by the
defendant that it has notified its Manila Office that the luggage will be shipped to Manila. But
unfortunately plaintiff was informed that the luggage was lost for the second time.
4. Plaintiff demanded from the defendant the money value of the luggage and its contents or its
exchange value, but defendant refused to settle the claim. Defendant asserts in its Answer and its
evidence tend to show that while it admits that the plaintiff was a passenger with a piece of checked
in luggage, the loss of the luggage was due to plaintiff’s sole if not contributory negligence.
5. Petitioner airline company, in contending that the alleged negligence of private respondent should be
considered the primary cause for the loss of her luggage, avers that, despite her awareness that the
flight ticket had been confirmed only for Casablanca and Brussels, and that her flight from Brussels
to Manila had yet to be confirmed, she did not retrieve the luggage upon arrival in
Brussels. Petitioner insists that private respondent, being a seasoned international traveler, must
have likewise been familiar with the standard provisions contained in her flight ticket that items of
value are required to be hand-carried by the passenger and that the liability of the airline or loss,
delay or damage to baggage would be limited, in any event, to only US$20.00 per kilo unless a higher
value is declared in advance and corresponding additional charges are paid thereon. At the
Casablanca International Airport, private respondent, in checking in her luggage, evidently did not
declare its contents or value, pursuant to Section 5(c), Article IX, of the General Conditions of
Carriage, which states that: “Passengers shall not include in his checked baggage, and the carrier may
refuse to carry as checked baggage, fragile or perishable articles, money, jewelry, precious metals,
negotiable papers, securities or other valuables.”
6. The trial court rendered judgment ordering Sabena Belgian World Airlines to pay private
respondent. Sabena appealed but the CA affirmed in toto the trial court’s judgment, hence the
present petition for review.

Issue:
W/N the airline is liable for the lost luggage

Held:
Yes. Fault or negligence consists in the omission of that diligence which is demanded by the nature
of an obligation and corresponds with the circumstances of the person, of the time, and of the
place. When the source of an obligation is derived from a contract, the mere breach or non-
fulfillment of the prestation gives rise to the presumption of fault on the part of the obligor. This rule
is not different in the case of common carriers in the carriage of goods which, indeed, are bound to
observe not just the due diligence of a good father of a family but that of “extraordinary” care in the
vigilance over the goods.
The only exceptions to the foregoing extraordinary responsibility of the common carrier is when the
loss, destruction, or deterioration of the goods is due to any of the following causes:

(1) Flood, storm, earthquake, lightning, or other natural disaster or calamity;

(2) Act of the public enemy in war, whether international or civil;
(3) Act or omission of the shipper or owner of the goods;
(4) The character of the goods or defects in the packing or in the containers;
(5) Order or act of competent public authority.’

Not one of the above excepted causes obtains in this case.

The airline cannot invoke the tort doctrine of proximate cause because the private respondent’s
luggage was lost while it was in the custody of petitioner. The “loss of said baggage not only once by
twice,” said the appellate court, “underscores the wanton negligence and lack of care” on the part of
the carrier. The above findings foreclose whatever rights petitioner might have had to the possible
limitation of liabilities enjoyed by international air carriers under the Warsaw Convention.

In Alitalia vs. Intermediate Appellate Court, the Court held that “the Warsaw Convention however
denies to the carrier availment ‘of the provisions which exclude or limit his liability, if the damage is
caused by his wilful misconduct or by such default on his part as, in accordance with the law of the
court seized of the case, is considered to be equivalent to wilful misconduct,’ or ‘if the damage is
(similarly) caused x x x by any agent of the carrier acting within the scope of his employment.’
The Hague Protocol amended the Warsaw Convention by removing the provision that if the airline
took all necessary steps to avoid the damage, it could exculpate itself completely, and declaring the
stated limits of liability not applicable ‘if it is proved that the damage resulted from an act or
omission of the carrier, its servants or agents, done with intent to cause damage or recklessly and
with knowledge that damage would probably result.’ The same deletion was effected by the Montreal
Agreement of 1966, with the result that a passenger could recover unlimited damages upon proof of
wilful misconduct.

The Convention does not thus operate as an exclusive enumeration of the instances of an airline’s
liability, or as an absolute limit of the extent of that liability. 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 wilful 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. Decision appealed from AFFIRMED.

Trans World Airlines v. CA,

GR No. 78656, 8/30/1988

 Rogelio A. Vinluan is a practicing lawyer, entered into a contract for air carriage for
valuable consideration with Japan Airlines first class from Manila to Tokyo, Moscow,
Paris, Hamburg, Zurich, New York, Los Angeles, Honolulu and back to Manila.
  On April 18, 1979, while in Paris, he went to the office of Trans World Airlines
(TWA) and secured therefrom a confirmed reservation for his accommodation.
 On April 20, 1979, at about 8:00 o'clock A.M., Vinluan reconfirmed his reservation
for first class accommodation on board TWA Flight No. 41 with its New York. He
was advised that his reservation was confirmed.
 He was informed that there was no first class seat available for him on the flight. He
asked for an explanation but TWA employees on duty declined to give any reason.
When he began to protest, one of the TWA employees, a certain Mr. Braam, rudely
threatened him with the words "Don't argue with me, I have a very bad temper."
 To be able to keep his schedule, Vinluan was compelled to take the economy seat
offered to him and he was issued a "refund application" as he was downgraded from
first class to economy class.
 Vinluan filed an action for damages against the TWA in the Court of First Instance of
Rizal alleging breach of contract and bad faith. Decision rendered in favor of Vinluan.
 TWA appealed to the Court of Appeals, in which the CA affirmed the CFI’s decision with
modification.
 Hence the petition for review.

ISSUE: Whether or not the petitioner acted maliciously and discriminatorily.

RULING:

 The petitioner contends that the respondent Court of Appeals committed a grave
abuse of discretion in finding that petitioner acted maliciously and discriminatorily, and in
granting excessive moral and exemplary damages and attorney's fees.
 The contention is devoid of merit. Private respondent had a first class ticket for
Flight No. 41 of petitioner from New York to San Francisco on April 20, 1979. It was
twice confirmed and yet respondent unceremoniously told him that there was no
first class seat available for him and that he had to be downgraded to the economy
class. As he protested, he was arrogantly threatened by one Mr. Braam. Worst still,
while he was waiting for the flight, he saw that several Caucasians who arrived
much later were accommodated in first class seats when the other passengers did
not show up.
 Petitioner sacrificed the comfort of its first class passengers including private
respondent Vinluan for the sake of economy. Such inattention and lack of care for
the interest of its passengers who are entitled to its utmost consideration,
particularly as to their convenience, amount to bad faith which entitles the
passenger to the award of moral damages. More so in this case where instead of
courteously informing private respondent of his being downgraded under the circumstances, he
was angrily rebuffed by an employee of petitioner.
 Decision of the CA affirmed.
Air France v. Carrascoso,
Gr No. L-21438, 9/28/1966

FACTS:

Air France, through Philippine Airlines (PAL), issued Carrascoso a first-class round trip
ticket from Manila to Rome. From Manila to Bangkok, he travelled in first class but in
Bangkok, PAL manager forced him to vacate his seat because there was a white man who
the manager alleged had a “better right” to the seat. Carrascoso refused to vacate his seat,
but was later convinced by some Filipino passengers to give up his seat.

Carrascoso filed a case for damages against Air France. The Court of First Instance (CFI) of
Manila ordered Air France to pay Carrascoso moral and exemplary damages as well as the
difference in fare between first class and tourist class for the portion of the trip.

On appeal, the Court of Appeals slightly reduced the refund of the ticket, but otherwise
affirmed the CFI decision.

Petitioner Air France now claims that the first class ticket did not represent the true and
complete intent and agreement of the parties. It asserts that Carrascoso knew that he did
not have confirmed reservations for first class though he had tourist class protection. Thus,
the ticket was no guarantee that he would have a first class seat since such would depend
on the availability of first class seats.

ISSUES:

1. Was Carrascoso was entitled to the first class seat? – YES.

2. Can he claim moral damages? – YES.

RATIO:

There is a contract of carriage between Air France and Carrascoso.

He is entitled to first-class seat by the mere fact that he paid for and was issued a first-class
ticket. Also, if, as petitioner claims, a first-class-ticket holder is not entitled to a first-class
seat, stability in the relations between passenger and air carrier as well as the passenger’s
security would be adversely affected. Petitioner also failed to establish whether or not a
prior reservation was made by the white man, so he had no claim to the seat.

Carrascoso can claim moral damages.

Air France argues that Carrascoso’s action is based on breach of contract. Thus, to
authorize an award for moral damages, there must be an averment of fraud or bad faith as
per Art. 2220.

The Court established that:

 There was a contract

 The contract was breached when petitioner failed to furnish first class transportation
at Bangkok
 There was bad faith when petitioner’s employee compelled Carrascoso to leave his
first class seat, causing him mental anguish, humiliation and wounded feelings
resulting in moral damages.

Though there was no specific claim of bad faith in the complaint, inference of bad faith may
be drawn from the facts of the case. Also, during the trial, evidence of bad faith was
presented without objection from the petitioner. Thus, the deficiency in the complaint was
cured by evidence.

Petitioner’s contract with Carrascoso is attended with public duty. Though based on breach
of contract, the stress of Carrascoso’s action is put on wrongful expulsion. Moreover, an act
that breaks a contract is a tort. Thus, being a violation of public duty, it is a quasi-delict.

The wrongful expulsion is independent of the breach. Two sources of obligations are
implicated in this case— contract and quasi-delict. Petitioner is still be liable for moral
damages.

China Airlines VS Chiok

GR 152122 30 July 2003

FACTS:

Daniel Chiok purchased a ticket from China Airlines Ltd. Covering Manila-Taipei-Hong
Kong-Manila. The ticket was exclusively endorsable to Philippine Airlines. The trips
covered by the ticket were pre-scheduled and confirmed.

In Taipei, Chiok went to CAL office to confirm his Hong Kong-Manila flight. CAL attached a
yellow sticker, indicating that flight was OK.
In Hong Kong, Chiok went to PAL office to confirm his Manila flight. PAL confirmed and
attached its own sticker.

During the scheduled flight bound to Manila, it was cancelled due to a typhoon. All
confirmed ticket holders were booked automatically for it’s next flight (next day)

However on the following day, a PAL employee informed Chiok that his name did not
appear in PAL’s computer list of passengers and therefore could not be permitted to board
PAL flight no. PR 307.

Chiok filed a complaint for damages.

The Regional Trial Court held that CAL and PAL jointly and severely liable to
correspondent, affirmed by Court of Appeals.

ISSUE:

WON China Airline is liable as a principal carrier?

HELD:

In citing several cases:

As the principal in the contract of carriage, the petitioner in British Airways v. Court of
Appeals was held liable, even when the breach of contract had occurred, not on its own
flight, but on that of another airline. The Decision followed our ruling in Lufthansa German
Airlines v. Court of Appeals, in which we had held that the obligation of the ticket-issuing
airline remained and did not cease, regardless of the fact that another airline had
undertaken to carry the passengers to one of their destinations.

In the instant case, following the jurisprudence cited above, PAL acted as the carrying agent
of CAL. In the same way that we ruled against British Airways and Lufthansa in the
aforementioned cases, we also rule that CAL cannot evade liability to respondent, even
though it may have been only a ticket issuer for the Hong Kong-Manila sector.

Japan Airlines vs Court of Appeals

(G.R. No. 118664)

Facts:
Private respondents boarded a JAL flight in San Francisco, California bound for Manila. It
included an overnight stopover at Narita, Japan at JAL’s expense. Due to the Mt. Pinatubo
eruption, private respondents’ trip to Manila was cancelled. JAL rebooked all the Manila-
bound passengers and paid for the hotel expenses of their unexpected overnight stay. The
flight of private respondents was again cancelled due to NAIA’s indefinite closure. JAL
informed the respondents that it would no longer defray their hotel and accommodation
expense during their stay in Narita. The respondents were forced to pay for their
accommodations and meal expenses for 5 days.

Issues:
Whether or not JAL has the obligation to shoulder the hotel and meal expenses even if the
delay was caused by force majeure
Whether or not the award of damages was proper

Held:
When a party is unable to fulfill his obligation because of force majeure, the general rule is
that he cannot be held liable for damages for non-performance. When JAL was prevented
from resuming its flight to Manila due to the effects of the eruption, whatever losses or
damages in the form of hotel and meal expenses the stranded passengers incurred cannot
be charged to JAL. The predicament of the private respondents was not due to the fault or
negligence of JAL. JAL had the duty to arrange the respondents’ flight back to Manila.
However, it failed to look after the comfort and convenience of its passengers when it made
the passengers arrange their flight back to Manila on their own and after waiting in the
airport for a whole day.
Yes, the award of nominal damages is proper. Nominal damages are adjudicated in order
that a right of a plaintiff, which has been violated or invaded by the defendant, may be
vindicated or recognized and not for the purpose of indemnifying any loss suffered by him.