Tayabas Bus Company (LTB) Bound For Lilio Laguna

1 Cariaga v. Laguna Tayabas  At about 1:00 pm, June 18, 1952, Bus No.
133 of the Laguna Issues/Held:

Bus Company, G.R. No. L- Tayabas Bus Company (LTB) bound for Lilio Laguna Regarding LTB’s appeal:
11037, 29 December 1960 (departing from Azcarriaga St., Manila) collided with the engine  Untenable; all the witnesses on both side (LTB and MRR Co.)
of a train then passing by the national railroad tracks of the swore that they heard the train whistle sometime before the
poblacion of Bay, Laguna. One of the injured: Edgardo Cariaga
collision, but that it was the Bus that refused to slow down.
- 4th year medical student (UST).
- Sustained grave injuries; He was unconscious for 35 days,  LTB was unable to discredit MRR Co.’s witness that effect!
and his right forehead was fractured in such a way that it
necessitated the removal of practically all of the right Regarding the Cariagas’ appeal:
frontal lobe of his brain. Under the testimony of Dr.  Compensatory damages of P10K+ is too low considering the
Fernandez (psychiatrist), Cariaga’s mental capacity has effects (and the evidence thereof) of said accident.
been reduced to that he can no longer finish his studies.
 LTB: Under A. 2201 of the CC, the damages for which the obligor,
Right frontal bone of his head was replaced by a tantalum
plate that when pressed in or dented in (the brain), could guilty of a breach of contract but who acted in good faith, is liable
cause Cariaga’s death. The gist of it is that he became an shall be for those that are the natural and probable consequences
invalid after the accident. of the breach and which the parties had forseen or could have
- LTB paid for the expenses in the hospitalization of reasonably forseen at the time the obligation was constituted,
Cariaga. provided such damages, according to A. 2199 of the same code,
 Cariaga (plus parents) filed a case against LTB and the Manila have been duly proved.
Railroad Company (MRR Co.) for the recovery of P312,000.00
o Only the hospital expenses of P17,719.75 has been duly
worth of actual, compensatory, moral and exemplary damages.
 Lower Court: Negligence of the bus driver that caused the proved
accident; sentenced LTB to pay Cariaga P10,490.00.
 Both the Cariaga and the LTB appealed. SC: The income of Cariaga had he finished his medical studies should
- Cariaga: for awarding only P10K+ in compensatory be considered too; could have been reasonably forseen by the parties
damages and not awarding them actual and moral at the time Cariaga boarded the bus.
damages  Upon consideration of all facts, compensatory damages should
- LTB: the fault should not have been bore by them alone; be increased to P25K.
MRR Co. should be included (collision: both because of
 Moral damage and atty’s fees cannot be awarded:
MRR Co. and bus driver).
o Current case not one of those contemplated in Art.
2219 that enumerated the instances such damage
can be awarded; cannot come under par. 2 thereon
because the present action is not one quasi-delict
(due to the pre-existing contractual relation between
Cariaga and LTB).
o Neither can LTB be held accountable for moral
damages under A. 2220 of the CC because LTB did
not act fraudulently or in bad faith and that LTB
exercised due diligence in the selection and
supervision of its buses in connection with the
discharge of their duties.
o Cachero vs Manila Yellow Taxi Cab:
 Not a liability arising from crime, because the
one who committed the offense is the driver.
 Liability = as a result of a breach of contract.
o Quasi-delict = for those obligations which do not arise
from law, contracts, quasi-contracts or criminal
Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 1
offenses.
2 Pangasinan Transportation  Aurora Breguera, Welly Pua and Memia Chua boarded Is evidence of defendant’s financial standing material in an action for
Co. v. Legaspi, G.R. No. L- Pantranco Bus No. 334, bound for the town of Alaminos driven breach of contract of carriage?
20916-17, 23 December 1964 by Arsenio Osorio.
SC: YES
[Bus collision, 3 died,  Before reaching Alaminos and just after rounding a blind curve,
Presentation of Documents] the bus collided with an oncoming passenger truck bus No. JBL Reyes: NO
306, likewise owned and operated by defendant (Pantranco),”
Reyes, Dissent: causing Bus No. 334 to turn turtle several times. COURT:
 Rule 28 permits “fishing for evidence”
 Dissented in so far as the  Aurora Breguera and the child Welly Pua (1 yo) suffered Under Section 1 of Rule 27 of the Revised Rules of Court, a party may
decision implies that injuries from which they died shortly after the accident, while ask for the production of documents, papers. books, accounts, letters,
inquiries into the Memia Chua (18yo) died instantaneously. photographs, objects or tangible things, not privileged, „which constitute
resources of a defendant or contain evidence material to any matter involved in the action and
would be permissible  In their complaints, respondents stated that PANTRANCO is which are in his possession, custody or control.
whenever damages, financially well-established having enormous assets and a
pecuniary or moral, are huge income.  Article 2206 of CC fixed minimum indemnity for death at
sought. 3000 which courts may increase
 Respondents asked the court to order the office manager
 Compensatory and moral of PANTRANCO to produce the company’s general ledgers  Regarding amount of damages: If common carrier can pay
damages can only be and financial statements for the years 1959, 1960 and a greater amount as demanded by circumstances, then it
awarded to indemnify the 1961, for respondents to inspect, examine or photograph. may be made to pay more.
victim or his relatives for A common carrier, if liable, must be made to pay the minimum amount.
the prejudice suffered,  Trial Court ordered PANTRANCO to make documents But if its financial ability is such that it can pay a greater amount of
and the financial available. indemnity as demanded by the circumstances of the case, then
standing of the person certainly it should be made to pay more than P3,000. Its financial
responsible is  PANTRANCO asked for reconsideration, but this was denied. standing in such a case is material.
irrelevant to their
evaluation.  Hence this petition for certiorari.  Request by Respondent was for a good cause
Respondents sought the production of the ledgers and financial
 Damages cannot be both DISSENT BY REYES statements of Pantranco in connection with their allegation that
nominal and actual at the But I must dissent in so far as the decision implies that inquiries into „defendant (Pantranco) is financially well-established having
same time (Civil Code, the resources of a defendant would be permissible whenever enormous .assets and a huge income.‰ That is why in the prayer of
Article 2221). damages, pecuniary or moral, are sought. We cannot lose sight of their complaints, they asked the court, not for the minimum indemnity of
the fact that the purpose of moral damages is essentially indemnity P3,000, but for such indemnity for the death of Aurora Breguera, Welly
 Civil Code doesn’t or reparation, not punishment or correction. Pua and Memia Chua, as the Court may find proper and reasonable.‰
mention any reference to Their request therefore was for a good cause and the respondent Judge
defendant’s pecuniary Moral damages are emphatically not intended to enrich a committed no abuse of discretion in granting it.
ability complainant at the expense of a defendant; they are awarded only
to enable the injured party to obtain means, diversions or PANTRANCO:
amusements that will serve to alleviate the moral suffering he has Documents are immaterial and irrelevant to the issue of negligence and
undergone, by reason of the defendant’s culpable action. that to allow their production would be to sanction inquisition or fishing
expedition into the financial records of the company.
In other words, the award of moral damages is aimed at a
restoration and must be proportionate to the suffering inflicted. [Baka itanong ni ma’am]
Q: What do courts consider in fixing a greater amount of indemnity?
Concurred with the denial of the writ; presentation of 1. Financial capacity of the common carrier
documents proper since corrective damages are at discretion Along with other factors:
of the court 2. the life expectancy of the deceased or beneficiary, whichever

is shorter
Corrective damages are at the discretion of the Court (Art. 2233), 3. pecuniary loss to the plaintiff or beneficiary,
the latter may properly inquire in this case into the pecuniary ability 4. loss of support,
of the defendant in order to determine what amount should be 5. loss of service,
added to the normal indemnity, to serve as effective deterrent to 6. loss of society,
induce defendant to exert more diligence and care in the future. 7. mental suffering of beneficiaries, and
8. medical and funeral expenses.
A small award of corrective damages would be ineffective for the
purpose if the defendant possessed ample means; or it might prove
excessive if the defendant were poor.
3 Davila v. PAL, G.R. No. L-  23 Nov 1960: PAL’s passenger plane (DC-3 type, acquired in PAL liable for violation of its K of carriage? If so, for how much?
28512, 28 February 1973 1948) crashed on its way to Manila from Iloilo. Despite its age,
it has been certified as airworthy. YES.
 Parents of the deceased Pedro T. Davila, Jr. had no definite The pilot did not follow the route prescribed for his flight, at least
news of what had happened until they received a letter of between Romblon and Manila. Since up to that point over Romblon,
condolence (19 Dec 1960) from PAL’s president Soriano where he was supposed to intersect airway “Amber I,” the weather was
informing them of their son’s death. clear, the most reasonable conclusion is that his failure to do so was
 29 Dec 1960: Body recovered and taken back to Iloilo intentional, and that he probably wanted to fly on a straight line to
 RTC Iloilo ordered PAL to pay Davila et al the following: Manila. It was a violation of air-traffic rules to which, under the
o Death of Davila, Jr. – P6,000 circumstances, the accident may be directly attributable.
o Loss of earning capacity (P12,000 per annum for 5
years) – P60,000  Death of Davila, Jr. – P6,000  P12,000
o Moral damages – P10,000 o Must be increased pursuant to current jurisprudence
o Exemplary Damages – P10,000  Loss of earning capacity (P12,000 per annum for 5 years) –
o Actual damages – P5,000 P60,000  P15,000 per annum, from 33.3 years to 25 years of
 Rolex watch life expectancy
 Pistol o As manager of a radio station (P9,100), a layer and junior
 Burial expenses partner of his father in the law office (P3,600), and a
 Lot and mausoleum farmer (P3,000), the deceased had a gross earnings of
o Attorney’s fees – P10,000 P15,000 a year.
 On appeal: Davila seeks an increase, while PAL seeks a o According to Art 2206, the defendant shall be liable for the
complete exoneration or at least a mitigation of liability loss of the earning capacity of the deceased and
indemnity shall be paid to the heirs of the latter. This
article, while referring to “damages for death caused by
crime or QD,” is expressly made applicable by Art 1764 to
the “death of a passenger caused by the breach of
contract by a common carrier.”
o Although the deceased was in relatively good health, his
medical history shows that he had complained of and
been treated for such ailments as backaches, chest pains
and occasional feelings of tiredness. It is reasonable to
make an allowance for these circumstances and consider,
for purposes of this case, a reduction of his life
expectancy to 25 years.
 Moral damages – P10,000, retained
o The parents of the deceased are entitled to MD for their
mental anguish considering the long period of
uncertainty and suffering the plaintiffs underwent.
 Exemplary Damages – P10,000  DELETED
o According to Art 2232, CC, in contracts and quasi-
contracts the court may award ED if the defendant acted
in a wanton, fraudulent, reckless, oppressive or
malevolent manner. The failure of the defendant here to
exercise EOD, as required by law, does not amount to
anyone of the circumstances contemplated in the said
provision.
 Actual damages – P5,000, sustained
o Rolex watch
o Pistol
o Burial expenses
o Lot and mausoleum
 Attorney’s fees – P10,000, retained
4 PAL v. CA, G.R. No. L-54470,  Starlight Flight No. 26 of the Philippine Air Lines (hereafter Whether the indemnity for the death of Nicanor A. Padilla should be
8 May 1990 PAL) took off from the Manduriao Airport in Iloilo, on its way to computed on the basis of his life expectancy rather than the life
Manila, with 33 persons on board, including the plane’s expectancy of his only legal heir - YES
complement.
 The plane had been certified as airworthy by the Civil o resort to foreign jurisprudence would be proper only if no law or
Aeronautics Administration. jurisprudence is available locally to settle a controversy. Even in
 The plane did not reach its destination but crashed on Mt. the absence of local statute and case law, foreign jurisprudence is
Baco, Mindoro, one hour and fifteen minutes after take-off. only persuasive
 Among the fatalities was Nicanor Padilla who was a passenger o Under Article 1764 and Article 2206(1) of the Civil Code, the award
on the star-crossed flight. of damages for death is computed on the basis of the life
 He was 29 years old, single. His mother, Natividad A. Vda. de expectancy of the deceased, not of his beneficiary
Padilla, was his only legal heir. o In the case of Davila vs. PAL, 49 SCRA 497 which involved the
 Mrs. Padilla filed a complaint against PAL, demanding same tragic plane crash, this Court determined not only PAL’s
payment of liability for negligence or breach of contract, but also the manner of
o P600k as computing the damages due the plaintiff therein which it based on
 actual and compensatory damages, the life expectancy of the deceased
 plus exemplary damages and
o P60k as attorney’s fees. RE: ACTUAL DAMAGES
 PAL
o denied that the accident was caused by its negligence o PAL also contends that actual damages under Article 2206 of the
or that of any of the plane’s flight crew, Civil Code must be proven by clear and satisfactory evidence is
o and that the damages sought were excessive and correct
speculative o SC: evidence was presented:
o The witnesses Mate (manager of Allied Overseas Trading
 the deceased NICANOR PADILLA:
Company) and Reyes (auditor of Padilla Shipping
o graduated the Reserve Officer’s Course (Infantry
Company) were competent to testify on matters within
Basic Course) Armed Forces of the Philippines in
their personal knowledge because of their positions, such
1949, and
as the income and salary of the deceased, Nicanor A.
o graduated with the degree of Bachelor of Literature in
Padilla
1951 in Ateneo de Manila, and
o graduated with the degree of Bachelor of Laws in
TRIAL COURT’S COMPUTATION
1954, also in Ateneo de Manila
gross annual income= P23,100
o he was a lawyer and he was associated with the law
based on
offices of Senator Ambrosio Padilla, brother of his
o his yearly salaries of P18,000 from the Padilla Shipping
father, Alberto R. Padilla.
Company
o President and General Manager of the Padilla
o and P5,100 from the Allied Overseas Trading Corporation.
Shipping Co., Inc.
o Vice- President and Treasurer of the Allied Overseas
Trading Co., Inc. Considering that he was single, the court deducted P9,200 as yearly
o member of the Board of Directors of the Junior living expenses,
Chamber of Commerce (Jaycees) International and
Chairman of its Committee on Governmental Affairs Resulting in a net income of P13,900 (not P15,900 as erroneously
for the term 1960-1961. stated in the decision)
 TRIAL COURT (CA affirmed)
o P447k as award for expected income Since Nicanor Padilla was only 29 years old and in good health, the trial
o P10k moral damages court allowed him a life expectancy of 30 years.
o P10k atty’s fees
 PAL appealed to SC; contention:
o the principle of law generally recognized and applied (net income of P13,900) x (his life expectancy of 30 years) = P417,000
by the courts in the United State that “the controlling (not P477,000) which is the amount of death indemnity due his mother
element in determining loss of earnings arising from and only forced heir
death is, as established by authorities, the life
expectancy of the deceased or of the beneficiary, MOTHER DIED BEFORE PROMULGATION OF SC DECISION! (sad
whichever is shorter” reacts only)
o because of the 16-year delay in the disposition of this case,

the private respondent herself has already joined her son in
the Great Beyond without being able to receive the indemnity
she well deserved.
o petitioner should pay legal rate of interest on the indemnity due
her. The failure of the trial court to award such interest
amounts to a plain error
SC: The petitioner is ordered to pay the private respondent or her heirs
death indemnity in the sum of P417,000 (not P477,000), with legal rate
of interest of 6% per annum from the date of the judgment on August
31, 1973, until it is fully paid. Costs
against the petitioner.
5 De Caliston v. CA, G.R. No.  Dalcamio ran over de Darrocha (a USVA pensioner), who died Was deleting the P10,000 payment for loss of pension proper?
L-63135, 24 June 1983 instantly, while driving a passenger bus in Bacolod City. NO.
 CFI: Convicted of homicide thru reckless imprudence and The pension of the decedent being a sure income that was cut short by
ordered to pay De Caliston (de Darrocha’s daughter) her death for which Dalmacio was responsible, the surviving heir of the
o P10,000 – loss of pension wc the deceased had decedent is entitled to the award of P10,000 which is just equivalent to
failed to receive the pension the decedent would have received for one year if she did
o P15,000 – death of the victim not die.
o P5,000 – moral damages
o P5,000 – burial expenses The P5,000 paid to De Caliston by the insurer of the passenger bus
 CA: Deleted the P10,000 payment for loss of pension and which figured in the accident may be deemed to have come from the
credited Dalmacio for P5,000 previously paid to De Caliston bus owner who procured the insurance. Since the civil liability (ex-
under a vehicle insurance policy delicto) of the passenger bus for the death caused by his driver is
subsidiary and, at bottom, arises from the same culpa, the insurance
proceeds should be credited in favor of the errant driver.

6 De Lima v. LTB, G.R. No. L-  This is a petition for review on certiorari of the decision De 1. Whether the Court of Appeals erred in granting legal interest on
35697-99, 15 April 1988 Lima vs. Laguna Tayabas Co. of the Court of Appeals affirming damages to start only from the date of its decision instead of from the
the decision of the court a quo with modification to include an date of the trial court’s decision? YES.
award of legal interest on the amounts adjudged in favor of the 2. Whether the Court of Appeals erred in not increasing the indemnity
petitioners from the date of the decision of the Court of for the death of Petra de la? YES.
Appeals to the time of actual payment.
 June 3, 1958: A passenger bus of Laguna Tayabas Bus 1. LEGAL INTEREST ON THE AMOUNTS ADJUDGED IN FAVOR OF
Company and a delivery truck of Seven Up Bottling Co., PETITIONERS SHOULD START FROM THE TRIAL COURT’S
Philippines collided causing the death of Petra Dela Cruz and DECISION
serious physical injuries to Eladia De Lima and Nemesio
Flores. Petitioners: award of the legal rate of interest should be computed from
 Three suits were filed against the respondents before the Court the promulgation of the decision of the trial court.
of First Instance of Laguna (San Pablo City)
 December 27, 1963: the court a quo rendered a decision in Respondents: having failed to appeal from the lower court’s decision
favor of the plaintiffs specifying the indemnity afforded to them. they are now precluded from questioning the ruling of the CA.
 Plaintiffs filed a motion for reconsideration on the decision by
the court a quo seeking award of legal interest on the adjudged SC: The legal interest of six percent (6%) on the amounts adjudged in
amount in their favor from the date of the said decision but favor of petitioners should start from the time of the rendition of the trial
their motion was not acted upon by the said court. court’s decision on December 27, 1963 instead of January 31,1972, the
 All of the plaintiffs desisted from appealing with the hope that promulgation of the decision of the Court of Appeals.
the defendant will comply with the indemnity. But instead, the
defendant filed an appeal in contrary to the motion for It is true that the rule is well-settled that a party cannot impugn the
reconsideration raised by the petitioners to the Court of correctness of a judgment not appealed from by him, and while he may
Appeals. This appeal was pending for around 30 years. make counter assignment of errors, he can do so only to sustain the
 December 1971: the petitioners filed a motion before the court judgment on other grounds but not to seek modification or reversal
of Appeals seeking the grant of legal interest from the date of thereof for in such case he must appeal. A party who does not appeal
the decision of the Court a quo and increasing the civil from the decision may not obtain any affirmative relief from the
indemnity (3k to 12k) for the death of Petra Dela Cruz. appellate court other than what he has obtained from the lower court, if
any, whose decision is brought up on appeal.
 Appellate Court: denied the motion on the contention that the
petitioners failed to make an appeal on the error on lower
However, respondents failed to note that the legal interest was awarded
court’s ruling for not awarding the legal interest and damages.
by the Appellate Court in its discretion based on equitable grounds,
 Supreme Court: granted the petition of the petitioners with
which is duly sanctioned by Art. 2210 of the Civil Code which
modifications on the amounts previously specified by the court
provides—
a quo.
“Interest may, in the discretion of the court, be allowed upon damages
awarded for breach of contract.”
This Court is inclined to adopt a liberal stance in this case as We have

done in previous decisions where We have held that litigations should,
as much as possible be decided on their merits and not on technicality.
The claim for legal interest and increase in the indemnity should be
entertained in spite of the failure of the claimants to appeal the
judgment.
2. CIVIL INDEMNITY FOR THE DEATH OF PASSENGERS PROPER,

BUT THE AMOUNT OF P3, 000 SHOULD BE INCREASED TO
P30,000 UNDER PREVAILING CIRCUMSTANCES

Civil indemnity for the death of Petra de la Cruz was properly awarded
by virtue of Art. 1764 in relation to Art 2206 of the Civil Code of the
Phiiippines which allows a minimum indemnity of P3.000.00 for the
death of a passenger caused by the breach of contract by a common
carrier.
In accordance with prevailing jurisprudence the indemnity of P3, 000.00

should be increased to P30,000.00 and not Pl2,000.00 as prayed for by
petitioner.
If the transportation company had only accepted the judgment of the

trial court and paid its just awards instead of appealing the same to the
Court of Appeals, no further delay would have been occasioned on the
simple issue of interest and indemnity. To mitigate the impact of such a
great delay in this case the Court finds ample justification in the
aforesaid award for interest and indemnity. We hope this relief is not too
late.
7 Sulpicio v. CA, G.R. No.  October 23, 1988: Tito Duran Tabuquilde (Tito) and his 3-year ISSUE: W/N Tito has a right to recover damage for his lost belongings
113578, 14 July 1995 old daughter Jennifer Anne (Anne) boarded the M/V Dona
Marilyn at North Harbor, Manila, bringing with them several HELD:
pieces of luggage. NO.
 Storm Signal No. 2 had been raised by the PAG-ASA  Decision of Court of Appeals is AFFIRMED with the
authorities over Leyte as early as 5:30 P.M. of October 23, MODIFICATION that the award of P27,580.00 as actual damages
1988 and which signal was raised to Signal No. 3 by 10 P.M for the loss of the contents of the pieces of baggage is deleted and
 ship captain ordered the vessel to proceed to Tacloban when that the award of P30,000.00 under Article 2206 in relation Article
prudence dictated that he should have taken it to the nearest 1764 is increased to P50,000.00.
port for shelter, thus violating his duty to exercise extraordinary  There is no showing that the value of the contents of the lost pieces
diligence in the carrying of passengers safely to their of baggage was based on the bill of lading or was previously
destination declared by Tito before he boarded the ship
 October 24, 1988 morning: M/V Dona Marilyn, while in transit,  Article 2206 of the Civil Code of the Philippines provides that only
encountered inclement weather which caused huge waves due deaths caused by a crime as quasi delict are entitled to actual and
to Typhoon Unsang. compensatory damages without the need of proof of the said
 Angelina Tabuquilde contacted the Sulpicio Office to verify damages
radio reports that the vessel M/V Dona Marilyn was missing  The amount of damages for death caused by a crime or quasi
 Sulpicio Lines assured her that the ship was merely "hiding" delict shall be at least Three Thousand Pesos, even though there
thereby assuaging her anxiety may have been mitigating circumstances…
 October 24, 1988 2:00 P.M.: vessel capsized, throwing Tito  Deducing alone from said provision, one can conclude that
and Anne, along with hundreds of passengers, into the sea. damages arising from culpa contractual are not compensable
 Tito tried to keep himself and his daughter afloat but to no avail without proof of special damages sustained by the heirs of the
as the waves got stronger and he was subsequently separated victim.
from his daughter despite his efforts.  With respect to the award of moral damages, the general rule is
 October 25, 1988 11:00 A.M.: He found himself on Almagro that said damages are not recoverable in culpa contractual except
Island in Samar. He immediately searched for his daughter when the presence of bad faith was proven
among the survivors in the island, but failed.  in breach of contract of carriage, moral damages may be recovered
 Angelina tried to seek the assistance of the Sulpicio Lines in when it results in the death of a passenger
Manila to no avail.  With respect to the award of exemplary damages, Article 2232 of
 Angelina spent sleepless nights worrying about her husband the Civil Code of the Philippines gives the Court the discretion to
and daughter in view of the refusal of Sulpicio Lines to release grant said damages in breach of contract when the defendant
a verification of the sinking of the ship. acted in a wanton, fraudulent and reckless manner
 October 26, 1988: Tito and other survivors in the Almagro  The crew assumed a greater risk when, instead of dropping anchor
Island were fetched and were brought to Tacloban Medical in or at the periphery of the Port of Calapan, or returning to the port
Center for treatment of Manila which is nearer, proceeded on its voyage on the
 October 31, 1988: Tito reported the loss of his daughter and assumption that it will be able to beat and race with the typhoon
was informed that the corpse of a child with his daughter's and reach its destination before it (Unsang) passes.
description had been found. Tito wrote a letter to his wife,  The award of attorney's fees by the trial court to respondents is
reporting the sad fact that Jennifer Anne was dead Angelina also assailed by petitioner, citing Mirasol v. De la Cruz, 84 SCRA
suffered from shock and severe grief upon receipt of the news. 337 (1978). In this case, the petitioner filed before the Municipal
 November 3, 1988: coffin bearing the corpse of Anne was Court an action for forcible entry against the private respondent.
buried. The said court dismissed the complaint. On appeal, the Court of
 November 24, 1988: Tito filed a claim for damages against First Instance of Camarines Sur sustained the decision of the lower
Sulpicio Lines for the death of Anne and the loss of his court, dismissed the appeal and awarded attorney's fees in the sum
belongings worth P27,580. of not less than P500.00 in favor of private respondent. Upon
 Trial Court ruled in favor of Tito: appeal to us, we deleted the award of attorney's fees because the
1. actual damages, P30,000.00 for the death of Anne text of the appealed decision was bereft of any findings of fact and
2. P100,000.00 as moral damages law to justify such an award. Moreover, there was no proof, other
3. P50,000.00 as exemplary damages than the bare allegation of harassment that the adverse party had
4. P50,000.00 as attorney's fees, and costs acted in bad faith. The aforementioned decision is inapposite to the
 CA affirmed. instant case where the decision clearly mentions the facts and the
law upon which the award of attorney's fees were based.
8 Fores v. Miranda, G.R. No. L-  Miranda was one of the passengers on a jeepney driven by (1) Is the approval of the Public Service Commission necessary for the
12163, 4 March 1959 Eugenio Luga. While the jeep was descending Sta. Mesa sale of a public service vehicle even without conveying therewith the
bridge at an excessive speed, the driver lost control causing it authority to operate the same?
Respondent Miranda was a to swerve and hit the bridge wall.
passenger in a jeep operated  Five of the passengers were injured, including Miranda who (2) To what damages is the respondent entitled?
by Petitioner Fores. The jeep suffered a fracture of the upper right humerus. He was subject
got involved in an accident, to a series of operations yet at the time of the trial, he has not HELD:
and Miranda was injured. The yet recovered the use of his right arm.
(1) Assuming the dubious sale to be a fact, the court of Appeals
CFi awarded moral damages,  Luga was charged with serious physical injuries through
which Fores contested in the answered the query in the affirmative. The ruling should be upheld. The
reckless imprudence, and upon interposing a plea of guilty,
SC. SC held that moral provisions of the statute are clear and prohibit the sale, alienation,
was sentenced accordingly.
lease, or encumbrance of the property, franchise, certificate, privileges
damages cannot be awarded,  It was alleged that the evidence failed to identify the vehicle but
because there was no this was rejected by the appellate court which found that the or rights, or any part thereof of the owner or operator of the public
showing of fraud or bad faith. jeep carried the plate no. TPU 1163, series of 1952 and service Commission. The law was designed primarily for the protection
The liability of common registered in the name of Paz Fores and that the vehicle had of the public interest; and until the approval of the public Service
carriers is contractual; the name of “Dona Paz” painted below the windshield. Commission is obtained the vehicle is, in contemplation of law, still
therefore, there is a  There was no evidence presented to prove the contrary. under the service of the owner or operator standing in the records of the
presumption of liability on the  Fores also said that she allegedly sold the jeep involved to a Commission which the public has a right to rely upon.
part of the carrier, upon mere Carmen Sackerman.
proof of injury to the (2) The P10,000 actual damages awarded by the Court of First Instance
passenger. They also cannot
of Manila were reduced by the Court of Appeals to only P2,000, on the
escape liability by proving that
they exercised due diligence ground that a review of the records failed to disclose a sufficient basis
in the selection and for the trial court's appraisal, since the only evidence presented on this
supervision of their point consisted of respondent's bare statement that his expenses and
employees. In addition, moral loss of income amounted to P20,000. On the other hand, "it cannot be
damages cannot be awarded denied," the lower court said, "that appellee (respondent) did incur
in the absence of fraud or bad expenses"' It is well to note further that respondent was a painter by
faith on the part of the profession and a professor of Fine Arts, so that the amount of P2,000

common carrier, unless a awarded cannot be said to be excessive. The attorney's fees in the sum
passenger dies (NCC 1763) of P3,000 also awarded to the respondent are assailed on the ground
that the Court of First Instance did not provided for the same, and since
no appeal was interposed by said respondent, it was allegedly error for
the Court of Appeals to award them motu proprio. Petitioner fails to note
that attorney's fees are included in the concept of actual damages
under the Civil Code and may be awarded whenever the court deems it
is just and equitable. We see no reason to alter these awards.
Anent the moral damages ordered to be paid to the respondent, the

same must be discarded. We have repeatedly ruled that moral
damages are not recoverable in damage actions predicted on a breach
of the contract of transportation. Where the injured passenger does not
die, moral damages are not recoverable unless it is proved that the
carrier was guilty of malice or bad faith. We think it is clear that the
mere carelessness of the carrier's driver does not per se constitute of
justify an inference of malice or bad faith on the part of the carrier; and
in the case at bar there is no other evidence of such malice to support
the award of moral damages by the Court of Appeals.
9 Phil. Rabbit Bus Lines v.  Patrocinio Esguerra (ESGUERRA) boarded Bus No. 223 of Was award of Moral damages and attorneys fees proper? Moral –
Esguerra, G.R. No. L-31420, Philippine Rabbit Bus Lines, Inc. (PR) bound for San Fernando Not Proper, Atty’s Fees - Proper
23 October 1982 at the Manila Terminal.
Moral Damages = Not recoverable, no bad faith on part of PR’s
[Amputated Arm, Sideswipe]  He sat at the left end of the 4th row behind the driver. driver.
 PR and Nicasio delos Reyes correct in saying that moral
Moral damages, not  While in San Marcos, Calumpit a freight truck owned by damages are not recoverable in actions for damages
Transport Contractors Inc (TRANSPORT) was coming from the predicated on a breach of the contract of transportation, as in
recoverable in actions for
opposite direction. The vehicles sideswiped each other at the instant case, in view of the provisions of Articles 2219 and
damages predicated on
the middle of the road. 2220 of the New Civil Code.
breach of contract of o EGR: [The exceptions are (1) where the mishap
transportation
 The glass near the drivers seat of the PR bus was detached results in the death of a passenger, and (2) where it is
and its left side was damaged. proved that the carrier was guilty of fraud or bad faith,
Attorney's fees, allowable in even if death does not result.]
the discretion of the court  The left forearm of Patrocinio Esguerra was hit by a hard blunt  There was no bad faith or fraud on the part of the carrier’s
object, breaking the bones into small fragments while the soft driver. That being the case no moral damages are recoverable
tissues of the muscles and the skin were mascerated.  The Court of Appeals found that the two vehicles sideswiped
each other at the middle of the road. In other words, both
 He was immediately brought to the Bulacan Provincial Hospital vehicles were in their respective lanes and that they did not
in Malolos, Bulacan for treatment. The left arm was amputated. invade the lane of the other. It cannot be said therefore that
there was fraud or bad faith on the part of the carrier's driver.
 ESGUERRA filed a case against PR , TRANSPORT and their This being the case, no moral damages are recoverable.
drivers praying that judgment be rendered in favor of the
plaintiff and against the defendants requiring them to pay, Attorney’s Fees: recoverable , need no proof, allowed in discretion
jointly and severally damages, actual and compensatory, moral of the court.
and exemplary, litigation expenses and costs.  Need not be proved as herein petitioners contended. The
same is allowed in the discretion of the court after considering
CFI: several factors which are discernible from the facts brought out

Dismissed complaint against Transport Contractors Inc and during the trial. In this case, plaintiff was compelled to litigate
Modesto Joaquin but sentenced defendants Nicasio de los Reyes and incur expenses in order to protect his interest.
and PR jointly and severally to pay plaintiff
1. P25,085.40 as compensatory damages, SC:
2. P5,000.00 as moral damages, Petition is granted.
3. P2,000.00 as attorney's fees
4. and the costs of suit. Decision of the CA sentencing herein petitioners to pay the sum of
The cross-claim of defendants Philippine Rabbit Bus Lines, Inc. and P5,000.00, as moral damages set aside.
Transport Contractors, Inc. against each other are hereby
dismissed." However, that portion of the decision sentencing petitioners to pay
respondent Patrocinio Esguerra the sum of P2,000.00, as attorney's
CA: fees, stays.
Transport Contractors, Inc. and Modesto Joaquin are ordered to
pay solidarity (sic) with the defendants- appellants PR and Nicasio
de los Reyes sums awarded in the judgment, with costs in this
instance against all the defendants.
PR and Nicasio delos Reyes:

Contend that the awards of
1. 5k moral damages is contrary to law and
2. 2k award of attys fees is bereft of legal and factual basis.
10 China Airlines v. IAC, G.R.  14 Apr 1980: After a four-day delay caused by an engine Breach of contract?
No. 73835, 17 January 1989 malfunction, Osorio boarded in Manila flight of China Airlines YES, failing to secure an immediate flight connection for Osorio.
for Taipei. Said flight, as originally scheduled, was to bring The reliance of China Airlines on the subject telex communications falls
Osorio and 9 others to Taipei in time for China Airlines’ flight short of the utmost diligence of a very cautious person expected of it,
for LAX. thereby rendering it liable for its failure to abide by the promised
 As this schedule had been rendered impossible by the delay, it immediate connection.
was agreed, prior to departure from Manila that Osorio et al.
would spend the night in Taipei at China Airlines’ expense and However, breach not attended by gross negligence, recklessness,
would be brought the following day to SF, where they would be or wanton disregard of the rights of the passenger.
furnished an immediate flight connection to LAX. Telex was the established mode of connection. Contact by telephone
 15 Apr 1980: No instructions having been received by the SF not a practice due to time difference bw the two places. While Manila
Office due to the delay in transmission of the telex messages office was aware of the possibility of the transmission delay, it had to
from Manila, Osorio et al. were asked to deplane and wait avail itself of this mode of communication.
while contact with Manila was being made. This could not be
done immediately because of the time difference between the Considering the gap of more than 24 hrs bw the time the telex
2 places. messages were sent out and Osorio’s expected arrival at SF, it was
 Osorio et al. asked that they be provided food and overnight unreasonable for China Airlines to expect that this time gap would cover
accommodations as transit passengers, but were refused by whatever delay might be encountered at the Hongkong link. While
the passenger service agent, Dennis Cheng. Apparently irked China Airlines may have been remiss in its total reliance upon the telex
by this refusal + info that their luggage were not unloaded, communications, and therefore negligent in view of the degree of
Osorio et al. left the SF office without leaving a contact diligence required of it as a common carrier, such negligence cannot
address. under the obtaining circumstances be said to be so gross as to amount
 When word from Manila came at 6:45 PM authorizing issuance to bad faith.
of LAX tickets, Osorio et al. could not be informed thereof.
 16 Apr 1980: After spending the night at YMCA, paying a fee Liability?
of $5, Osorio learned thru her companions that her ticket for Only actual damages. No award of moral damages.
LAX and luggage were ready for pick-up any time. Breach of contract incurred in good faith, thus liable for damages which
 17 Apr 1980: When Osorio decided to pick up her luggage and are the natural and probable consequences of said breach and which

fly to LAX with a Western Airlines ticket wc she purchased for the parties have foreseen at the time the obligation was constituted.
$56. Osorio spent the night of Apr 16 in the house of Mrs.
Sim’s friend who did not charge anything. Bough only some Their refusal to accede to her demands for a flight connection to Los
groceries for her hostess. Angeles and/or food and hotel accommodations was due primarily to
 Osorio filed a complaint for damages arising from breach of lack of information or knowledge upon which to act upon and not from a
contract. deliberate Intent to Ignore or disregard private respondent’s rights as a
 RTC: Absolved China Airles from liability, except for passenger. They cannot be faulted for wanting to verify with Manila
o Reimbursement of $100 spent as an involuntarily private respondent’s status before acting upon her request as tickets for
rerouted passenger in SF – P1,248 Los Angeles cannot be used in going to San Francisco, and possession
o SFC-LAX Western Airlines ticket - $56 of a ticket with Los Angeles as destination was not an indication that
 CA: Reversed RTC. Finding a breach of K of carriage, ordered one was a transit or an involuntarily re-routed passenger.
China Airlines to pay:
o Actual damages
o Moral damages – P100,000
o Exemplary damages – P200,000
o Attorney’s fees – P5,000
11 PAL v. Miano, G.R. No.  Florante Miano took PAL flight PR 722, Mabuhay Class, Whether the award of damages was proper – NO (except for the
106664, 8 March 1995 bound for Frankfurt, Germany. He had an immediate onward cost of transporting suitcase)
connecting flight via Lufthansa flight LH 1452 to Vienna, MORAL DAMAGES (deleted)
Austria  trial court erred in awarding moral damages
 At NAIA, he checked-in one brown suitcase weighing twenty  In breach of contract of carriage by air, moral damages are
(20) kilograms but did not declare a higher valuation. awarded only if the defendant acted fraudulently or in bad
 He claimed that his suitcase contained money, documents, faith. Bad faith means a breach of a known duty through some
one Nikkon camera with zoom lens, suits, sweaters, shirts, motive of interest or ill will
pants, shoes, and other accessories  The established facts evince that petitioner’s late delivery of
 upon arrival at Vienna his checked-in baggage was missing. the baggage for eleven (11) days was not motivated by ill will
He reported the matter to the Lufthansa authorities. or bad faith. In fact, it immediately coordinated with its Central
 After three (3) hours of waiting in vain, he proceeded to Baggage Services to trace private respondent’s suitcase and
Piestany, Czechoslovakia. succeeded in finding it.
 Eleven (11) days after his suitcase was delivered to him in his  records disclosed that Manila, the originating station, did not
hotel in Piestany, Czechoslovakia. receive any tracer telex
 He claimed that because of the delay in the delivery of his  Upon inquiry from their Frankfurt Station, it was however
suitcase, he was forced to borrow money to buy some clothes, discovered that the interline tag of Miano’s baggage was
to pay $200.00 for the transportation of his baggage from accidentally taken off.
Vienna to Piestany, and lost his Nikkon camera.  it was customary for destination stations to hold a tagless
 DEMAND LETTER TO PAL: baggage until properly identified.
o P10K cost of allegedly lost Nikkon camera;  The tracer telex, which contained information on the baggage,
o $200 for alleged cost of transporting luggage from is matched with the tagless luggage for identification. Without
Vienna to Piestany; and the tracer telex, the color and the type of baggage are used as
o P100K as damages basis for the matching. Thus, the delay.
 Miano instituted an action for damages before RTC Makati  Worthy to stress, the trial court made an unequivocal
 PAL CONTESTED COMPLAINT conclusion that petitioner did not act in bad faith or with malice.
o There was no report of mishandled baggage on flight  Bad faith must be substantiated by evidence. Bad faith under
o nor a tracer telex received from its Vienna Station the law cannot be presumed; it must be established by clear
(trace telex: action of any station that the airlines and convincing evidence. Again, the unbroken jurisprudence is
operate from whom a passenger may complain or that in breach of contract cases where the defendant is not
have not received his baggage upon his arrival) shown to have acted fraudulently or in bad faith, liability for
o if at all liable its obligation is limited by the Warsaw damages is limited to the natural and probable consequences
Convention rate of the breach of the obligation which the parties had foreseen
 PAL filed a third-party complaint against Lufthansa German or could reasonably have foreseen. The damages, however,
Airlines imputing the mishandling of Miano’s baggage, but was will not include liability for moral damages.
dismissed for its failure to prosecute.
 TRIAL COURT: no bad faith but awarded damages EXEMPLARY DAMAGES (deleted)
o U.S. $200.00 as cost of transporting the suitcase from
Vienna to Czechoslovakia;  The prerequisite for the award of exemplary damages in cases
o P40k as moral damages; of contract or quasi-contract is that the defendant acted in
o P20k as exemplary damages; and wanton, fraudulent, reckless, oppressive, or malevolent
o P15k as attorney’s fees. manner. The undisputed facts do not so warrant the
characterization of the action of PAL
ATTORNEY’S FEES (deleted)

 The award of attorney’s fees must also be disallowed for lack
of legal leg to stand on. The fact that private respondent was
compelled to litigate and incur expenses to protect and enforce
his claim did not justify the award of attorney’s fees.
 The general rule is that attorney’s fees cannot be recovered as
part of damages because of the policy that no premium should
be placed on the right to litigate.
 Petitioner is willing to pay the just claim of $200.00 as a result
of the delay in the transportation of the luggage in accord with
the Warsaw Convention. Needless to say, the award of
attorney’s fees must be deleted where the award of moral and
exemplary damages are eliminated.
12 Tan v. Northwest Airlines,  Priscilla Tan and Connie Tan boarded Northwest Airlines in Northwest liable for moral damages and exemplary damages for
Inc., G.R. No. 135802, 3 Chicago > Detroit (stop-over) > Philippines. willful misconduct and breach of contract of carriage?
March 2000  01 Jun 1994: Arrived at NAIA and found that their baggages NO.
were missing. Nothing in Northwest Airlines’ conduct showed that they were motivated
 02 Jun 1994: Returned to the airport and were informed that by malice or bad faith in loading the baggages on another plane. Due to
their baggages might still be in another plane in Tokyo, Japan. weight and balance restrictions, as a safety measure, Northwest
 03 Jun 1994: Recovered their baggages and discovered that Airlines had to transport the baggages on a different flight, but with the
some of its contents were destroyed and soiled. same expected date and time of arrival in the PHL. Northwest explained
 Tan’s demanded compensation for damages, claiming that that if there is an overload, i.e., a perceived safety risk, the aircraft’s
they suffered mental anguish, sleepless nights and great load will be reduced by off-loading cargo, which will then be placed on
damage bc of (1) Northwest’s failure to inform them in advance the next available flight.
that their baggages would not be loaded on the same flight
they boarded and bc of (2) their delayed arrival. For willful misconduct to exist, there must be a showing that the acts
 Northwest did not deny that the baggages were not loaded on complained of were impelled by an intention to violate the law, or were
the same flight. The baggages could not be carried on the in persistent disregard of one’s rights. It must be evidenced by a
same flight bc of weight and balance restrictions. However, flagrantly or shamefully wrong or improper conduct.
the baggages were loaded in another Northwest Airlines flight,
wc arrived PM of 02 Jun 1994. Bad faith does not simply connote bad judgment or negligence. It
 Northwest offered to either (1) reimburse the cost or repair of imports a dishonest or purpose or some moral obliquity and conscious
the bags; or (2) reimburse the cost for the purchase of new doing of a wrong, a breach of known duty through some motive or
bags, upon submission of receipts. interest or ill-will that partakes of the nature of fraud.
 RTC: Found Northwest Airlines liable for damages as follows
Where in breaching the contract of carriage the defendant airline is
o P15,000 – actual damages
not shown to have acted fraudulently or in bad faith, liability for
o P100,000 – moral damages
damages is limited to the natural and probable consequences of
o P50,000 – exemplary damages
o P30,000 – attorney’s fees the breach of obligation which the parties had foreseen or could
 CA: Partially affirmed RTC by deleting the award of moral have reasonably foreseen. In that case, such liability does not
and exemplary damages and reducing the attorney’s fees to include moral and exemplary damages.
P10,000
13 Trans World Airlines v. CA, Rogelio A. Vinluan is a practicing lawyer who had to travel in April, WON the respondent Court of Appeals committed a grave abuse of
G.R. No. 78656, 30 August 1979 to several cities in Europe and the U.S. to attend to some discretion in finding that petitioner acted maliciously and
1988 matters involving several clients. He entered into a contract for air discriminatorily, and in granting excessive moral and exemplary
carriage for valuable consideration with Japan Airlines first class damages and attorney's fees NO
from Manila to Tokyo, Moscow, Paris, Hamburg, Zurich, New York,
Los Angeles, Honolulu and back to Manila thru the same airline and award of moral and exemplary damages is proper
other airlines it represents for which he was issued the
corresponding first class tickets for the entire trip. 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 18, 1979: while in Paris, he went to the office of Trans World April 20, 1979. It was twice confirmed and yet respondent
Airlines (TWA) at the De Gaulle Airport and secured therefrom unceremoniously told him that there was no first class seat available for
confirmed reservation for first class accommodation on board its him and that he had to be downgraded to the economy class. As he
Flight No. 41 from New York to San Francisco which was protested, he was arrogantly threatened by one Mr. Braam. Worst still,
scheduled to depart on April 20, 1979. A validated stub was while he was waiting for the flight, he saw that several Caucasians who
attached to the New York-Los Angeles portion of his ticket arrived much later were accommodated in first class seats when the
evidencing his confirmed reservation for said flight with the mark other passengers did not show up. The discrimination is obvious and
"OK " the humiliation to which private respondent was subjected is
undeniable.
April 20, 1979:
8:00 o'clock A.M.: Vinluan reconfirrred his reservation for first class The petitioner’s inattention and lack of care for the interest of its
accommodation on board TWA Flight No. 41 with its New York passengers amount to bad faith
office. He was advised that his reservation was confirmed. He was
even requested to indicate his seat preference on said flight on said Petitioner sacrificed the comfort of its first class passengers including
scheduled date of departure of TWA Flight No. 41. 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
9:45 o'clock A.M.: Vinluan presented his ticket for check-in at the utmost consideration, particularly as to their convenience, amount to
counter of TWA at JFK International Airport (ETD: 11:00am) He bad faith which entitles the passenger to the award of moral damages.
was informed that there was no first class seat available for him on More so in this case where instead of courteously informing private
the flight. He asked for an explanation but TWA employees on duty respondent of his being downgraded under the circumstances, he was
declined to give any reason. When he began to protest, one of the angrily rebuffed by an employee of petitioner.
TWA employees, a certain Mr. Braam, rudely threatened him with
the words "Don't argue with me, I have a very bad temper." Award of damages should serve as an example to discourage
repetition of similar oppressive and discriminatory acts
Vinluan was compelled to take the economy seat offered to him
and he was issued a refund application" as he was downgraded At the time of this unfortunate incident, the private respondent was a
from first class to economy class. practicing lawyer, a senior partner of a big law firm in Manila. He was a
director of several companies and was active in civic and social
While waiting for the departure of his flight, Vinluan noticed that organizations in the Philippines. Considering the circumstances of this
other passengers who were white Caucasians and who had case and the social standing of private respondent in the community, he
checked-in later than him were given preference in some first class is entitled to the award of moral and exemplary damages.
seats which became available due to "no show" passengers.
However, the moral damages should be reduced to P300,000.00, and
February 15, 1980: Vinluan filed an action for damages against the exemplary damages should be reduced to P200,000.00.
the TWA in the CFI of Rizal alleging breach of contract and bad
faith.

CFI: Defendant liable for:
1. amount representing the difference in fare between first
class and economy class accommodations on board Flight
No. 6041 from New York to San Francisco
2. P500,000.00 as moral damages
3. P300,000.00 as exemplary damages,
4. P100,000.00 as and for attorney's fees
5. all such amounts to earn interest at the rate of twelve
(12%) percent per annum from February 15, 1980 when
the complainant was filed until fully paid.
CA: MODIFIED:
1. fixing the interest which appellant must pay on the
awards of moral and exemplary damages at six per
cent (6%) per annum from the date of the decision a quo,
March 8, 1984 until date of full payment
2. reducing the attorney's fees to P50,000.00 without
interest
3. the rest of the decision is affirmed.
TWA: Because of maintenance problems of the aircraft on the day

of the flight, TWA Flight No. 41 was cancelled and a special Flight
No. 6041 was organized to operate in lieu of Flight No. 41. Flight
No. 41 was to have utilized a Lockheed 1011 with 34 first class
seats, but instead, a smaller Boeing 707 with only 16 first class
seats was substituted for use in Flight No. 6041. Hence,
passengers who had first class reservations on Flight No. 41 had to
be accommodated on Flight No. 6041 on a first-come, first-served
basis. An announcement was allegedly made to all passengers in
the entire terminal of the airport advising them to get boarding
cards for Flight No. 6041 to San Francisco and that the first ones
getting them would get first preference as to seats in the aircraft. It
denied declining to give any explanation for the downgrading of
private respondent as well as the discourteous attitude of Mr.
Braam.
Vinluan: He did not hear such announcement at the terminal and

that he was among the early passengers to present his ticket for
check-in only to be informed that there was no first class seat
available for him and that he had to be downgraded.
14 Alitalia Airways, Inc. v. CA,  Spouses Jose and Victoria Juliano, arrived at the Fumicino Whether there exists factual or legal basis for the award of moral and
G.R. No. 77011, 24 July 1990 Airport in Rome, Italy in order to board Flight AZ 1774 of exemplary damages and attorney's fee
Alitalia Airways scheduled to depart at 10:30 a.m. for
Hongkong. YES.
 However, Flight AZ 1774 left Rome without the Julianos. When  The Court has consistently affirmed that review of the findings of
private respondent Jose O. Juliano arrived in Manila, he fact of the Court of Appeals is not a function that it ordinarily
returned to his employer Bristol-Myers, Inc., of which he was undertakes such findings being as a nile binding and conclusive.

Vice-President for Operations, the unused Rome-Hongkong  Thus we re-affirm the ruling laid down by the Court in a long line of
leg of the Alitalia ticket. However, the cost of the Thai Airways cases that when an airline issues a ticket to a passenger confirmed
tickets they had to purchase in lieu of Alitalia was not refunded on a particular flight, on a certain date, a contract of carriage
by his office. arises, and the passenger has every right to expect that he would
 The Julianos filed a complaint with the Regional Trial Court of fly on that flight and on that date. If he does not, then the carrier
Quezon City against the petitioner for damages from the opens itself to a suit for breach of contract of carriage.
alleged breach of its contractual obligations when the petitioner  Accordingly, the respondent court erred in holding that the Julianos
failed to transport the private respondent to Hongkong on the are not entitled to a refund because the purchase of the Thai
Alitalia Flight AZ 1774. Airways tickets was unnecessary.
 According to Alitalia, boarding time was 9:30 o'clock in the  It was already too much of a coincidence that, at Fumicino Airport,
morning for Flight AZ 1774. The check-in counter was then the Julianos would find another Filipino, in the person of Ms.
closed and all confirmed passengers who failed to check-in Estanislao, in the same predicament that they were in. What is
before that time were marked as NO SHOW in the airline plain to see is that the airline had deliberately overbooked and in
manifest as in the case of the Julianos. Thereafter, chance doing so took the risk of having to deprive some passengers of
passengers, or those without confirmed reservations, were their seats in case all of them would show up for check-in.
allowed to board.  That Alitalia had no intention to accommodate all who had
 On the other hand, the Julianos claim that, having left the hotel 'confirmed their flight reservations could be seen in the absence of
right after breakfast at 6:30 o'clock in the morning, they arrived any measure to contract all possible passengers for each flight who
at the airport at around 9:15 o'clock in the might be within the airport premises. As a result, some passengers
morning. Notwithstanding this timely arrival at the airport, the would really be left behind in the long and disorderly queue at the
Julianos had to contend with a long queue for the check-in check-in counter.
because there were no individual counters specifically for  Common carriers, like commercial airlines, are in the business of
Alitalia passengers. rendering service, which is the primary reason for their recognition
 Realizing that it was already close to boarding time, the in our law. They can not be allowed to disregard our laws as if they
Julianos, armed with confirmed tickets, decided to approach are doing the passengers any favor by accommodating them.
the check-in counter.At the counter, a lady employee only  Because the passengers in a contract of carriage do not contract
brushed them aside and ordered them to fall in line, which they merely for transportation, they have a right to be treated by the
did. carrier's employees with kindness, respect, courtesy, and
 At any rate, they were getting restless because the lines were consideration. Hence the justification why passengers must be
no longer moving, so they decided to call the attention of the spared from the indignity and inconvenience of being refused a
airline authorities. confirmed seat on the last minute.
 To make matters worse, the herein petitioner allegedly began  As held in Trans World Airlines v. Court of Appeals, such
to discriminate. The Julianos noticed that despite the fact that inattention to and lack of care [by the petitioner airline] for the
their line was not moving, some of the passengers were being interest of its passengers who are entitled to its utmost
escorted ahead of the line in order to be checked-in. consideration, particularly as to their convenience, amount to bad
 For the second time, the Julianos approached the lady at the faith which entitles the passenger to the award of moral
counter to explain that they would miss the flight if they were damages. Ergo, we affirm the respondent court's award of moral
not checked in. damages at P200.000.00. This award should be sufficient to
 It was then that the Julianos ran into Ms. Chuchi Estanislao, an indemnify the Julianos for the delay, inconvenience, humiliation,
employee of the University of the Philippines Asian Institute of and embarrassment they suffered.
Tourism, who could not also check in. Together with Ms.  Likewise the award of exemplary damages is well-grounded. With
Estanislao, they approached the Alitalia employee wearing a dismay, we note, that the imposition of substantial amounts of
uniform with the tag "supervisor". He only shrugged when damages notwithstanding, international carriers have not been
shown the confirmed tickets and said that the Julianos should dissuaded from repeating similar derogatory acts.
try to check-in already because it was near departure time.  Nonetheless, we agree with the injunction expressed by the Court
 Lower court found Alitalia to have overbooked in order to of Appeals that passengers must not prey on international airlines
ensure that all seats will be taken As a consequence, some of for damage awards, like "trophies in a safari." After all neither the
the passengers in Rome has to be "bumped off to social standing nor prestige of the passenger should determine the
accommodate the passengers embarking at the rest of the leg extent to which he would suffer, because of a wrong done, since
of the trip. In fact more passengers were picked up by the the dignity affronted in the individual is a quality inherent in him and
same flight as it proceeded to Athens, Bangkok, and then not conferred by these social indicators. Thus, as well and aptly put
Hongkong. by Justice Serafin Camilon, in his ponencia in this case, the
 Thus, the lower court adjudged Alitalia liable for damages:  ... Propriety of damage awards is judged by their fairness
o U.S. $2,065.00 as actual damages payable in considering all the circumstances. A man's stature is but an
Philippine Currency at the official rate of exchange at accident of life. The role it plays is secondary to the concepts of
the time of payment; justice and fair play.
o P400,000.00 as moral damages;  Nevertheless we have noted the proliferation of similar offenses by
o P50,000.00 as attorney's fees, Costs. international carriers finding their way to this Court; we have to
 This decision was motu proprio amended by the trial court on advocate a punitive stands to stem, if not totally eliminate, this
September 19, 1984 to include the award of P50,000.00 as deplorable tide. In the discretion of the Court, the award of
exemplary damages. exemplary damages should be increased to P200,000.00.
 Both parties appealed.
 The respondent Court of Appeals modified the judgment as WHEREFORE, the decision of the respondent court is MODIFIED in
follows: that the petitioner Alitalia Airways is hereby ordered to pay the private
o reducing the award of moral damages to respondents Jose O. Juliano and Victoria G. Juliano the following
P200,000.00; amounts:
o reducing the award of exemplary damages to 1) U.S.$2,065.00 as actual damages, payable in Philippine Currency at
P25,000.00; and the official rate of exchange at the time of payment;
o reducing attorney's fees to P 30,000.00, the rest of 2) P200,000.00, as and for moral damages;
the decision is maintained. 3) P200,000.00, as and for exemplary damages; and
4) P30,000.00, as attorney's fees.
Costs against the petitioner.
SO ORDERED.
15 Zalamea v. CA, G.R. No.  Petitioners-spouses Cesar Zalamea and Suthira Zalamea, and WON TWZ acted with bad faith and would entitle Zalameas to Moral
104235, 18 November 1993 their daughter, Liana purchased 3 airline tickets from the and Exemplary damages.
Manila agent of respondent TransWorld Airlines, Inc. for a flight
to New York to Los Angeles. The tickets of petitioners-spouses The U.S. law or regulation allegedly authorizing overbooking has never
were purchased at a discount of 75% while that of their been proved. Foreign laws do not prove themselves nor can the courts
daughter was a full fare ticket. All three tickets represented take judicial notice of them. Like any other fact, they must be alleged
confirmed reservations. and proved. Written law may be evidenced by an official publication
thereof or by a copy attested by the officer having the legal custody of
 On the appointed date, however, petitioners checked in but the record, or by his deputy, and accompanied with a certificate that
were placed on the wait-list because the number of such officer has custody. The certificate may be made by a secretary of
passengers who had checked in before them had already an embassy or legation, consul general, consul, vice-consul, or
taken all the seats available on the flight. Out of the 42 names consular agent or by any officer in the foreign service of the Philippines
on the wait list, the first 22 names were eventually allowed to stationed in the foreign country in which the record is kept, and
board the flight to Los Angeles, including petitioner Cesar authenticated by the seal of his office.
Zalamea. The two others were not able to fly. Those holding Respondent TWA relied solely on the statement of Ms. Gwendolyn
full-fare tickets were given first priority among the wait-listed Lather, its customer service agent, in her deposition that the Code of
passengers. Mr. Zalamea, who was holding the full-fare ticket Federal Regulations of the Civil Aeronautics Board allows overbooking.
of his daughter, was allowed to board the plane; while his wife No official publication of said code was presented as evidence. Thus,
and daughter, who presented the discounted tickets were respondent court’s finding that overbooking is specifically allowed by
denied boarding. the US Code of Federal Regulations has no basis in fact.
Even if the claimed U.S. Code of Federal Regulations does exist, the
 Even in the next TWA flight to Los Angeles Mrs. Zalamea and same is not applicable to the case at bar in accordance with the
her daughter, could not be accommodated because it was also principle of lex loci contractus which require that the law of the place
fully booked. Thus, they were constrained to book in another where the airline ticket was issued should be applied by the court where
flight and purchased two tickets from American Airlines. Upon the passengers are residents and nationals of the forum and the ticket
their arrival in the Philippines, petitioners filed an action for is issued in such State by the defendant airline. Since the tickets were

damages based on breach of contract of air carriage before the sold and issued in the Philippines, the applicable law in this case would
RTC- Makati. The lower court ruled in favor of petitioners . CA be Philippine law.
held that moral damages are recoverable in a damage suit
predicated upon a breach of contract of carriage only where Existing jurisprudence explicitly states that overbooking amounts to bad
there is fraud or bad faith. Since it is a matter of record that faith, entitling the passengers concerned to an award of moral
overbooking of flights is a common and accepted practice of damages. In Alitalia Airways v. Court of Appeals, where passengers
airlines in the United States and is specifically allowed under with confirmed bookings were refused carriage on the last minute, this
the Code of Federal Regulations by the Civil Aeronautics Court held that when an airline issues a ticket to a passenger confirmed
Board, no fraud nor bad faith could be imputed on respondent on a particular flight, on a certain date, a contract of carriage arises, and
TransWorld Airlines. Thus petitioners raised the case on the passenger has every right to expect that he would fly on that flight
petition for review on certiorari. and on that date. If he does not, then the carrier opens itself to a suit for
breach of contract of carriage. Where an airline had deliberately
overbooked, it took the risk of having to deprive some passengers of
their seats in case all of them would show up for the check in. For the
indignity and inconvenience of being refused a confirmed seat on the
last minute, said passenger is entitled to an award of moral damages.
For a contract of carriage generates a relation attended with public duty

— a duty to provide public service and convenience to its passengers
which must be paramount to self-interest or enrichment.
Respondent TWA is still guilty of bad faith in not informing its

passengers beforehand that it could breach the contract of carriage
even if they have confirmed tickets if there was overbooking.
Respondent TWA should have incorporated stipulations on overbooking
on the tickets issued or to properly inform its passengers about these
policies so that the latter would be prepared for such eventuality or
would have the choice to ride with another airline.
Respondent TWA was also guilty of not informing its passengers of its
alleged policy of giving less priority to discounted tickets. Neither did it
present any argument of substance to show that petitioners were duly
apprised of the overbooked condition of the flight or that there is a
hierarchy of boarding priorities in booking passengers. It is evident that
petitioners had the right to rely upon the assurance of respondent TWA,
thru its agent in Manila, then in New York, that their tickets represented
confirmed seats without any qualification. The failure of respondent
TWA to so inform them when it could easily have done so thereby
enabling respondent to hold on to them as passengers up to the last
minute amounts to bad faith. Evidently, respondent TWA placed its self-
interest over the rights of petitioners under their contracts of carriage.
Such conscious disregard of petitioners’ rights makes respondent TWA
liable for moral damages. To deter breach of contracts by respondent
TWA in similar fashion in the future, we adjudge respondent TWA liable
for exemplary damages, as well.
In the case of Alitalia Airways v. Court of Appeals, this Court explicitly

held that a passenger is entitled to be reimbursed for the cost of the
tickets he had to buy for a flight to another airline. Thus, instead of
simply being refunded for the cost of the unused TWA tickets,

petitioners should be awarded the actual cost of their flight from New
York to Los Angeles.
WHEREFORE, the petition is hereby GRANTED and the decision of the

respondent Court of Appeals is hereby MODIFIED
16 Sarkies Tours v. IAC, G.R.

No. L-63723, 2 September
1983
17 R Transport Corp. v. Eduardo

Pante, G.R. No. 162104, 15
September 2009
18 Sulpicio Lines v. Domingo E.

Curso, G.R. No. 157009, 17
March 2010
19 Philippine Hawk v. Vivian Tan

Lee, G.R. No. 166869, 16
February 2010
20 Air France v. Gillego, G.R.  Gillego, a congressman left Manila on board Air France’s a. Was there legal and factual basis that Air France's actions were
No. 165266, 15 December aircraft bound for Paris, France. He was to attend as a keynote attended by gross negligence, bad faith and willful misconduct and that
2010 speaker in a conference to be held in Budapest, Hungary and it acted in a wanton, fraudulent, reckless, oppressive or malevolent
Tokyo, Japan. manner to justify award of moral and exemplary damages?
 When in Paris, he arranged for an earlier connecting flight to b. Is the amount of damages awarded by the RTC and affirmed by the
Budapest. When he arrived in Budapest, he was not able to CA as moral and exemplary damages excessive, unconscionable and
locate his luggage. Despite assurance that it would be unreasonable?
delivered to him and repeated follow-ups, he did not recover
his luggage. It contained his personal effects such as clothes, a. Yes, a business intended to serve the travelling public primarily, a
toiletries, medicines for his hypertension, and the speeches he contract of carriage is imbued with public interest. The law governing
had prepared, including the notes and reference materials he common carriers consequently imposes an exacting standard. Article
needed for the conference. 1735 of the Civil Code provides that in case of lost or damaged goods,
common carriers are presumed to have been at fault or to have acted
 When he returned to Manila, he followed up about his luggage negligently, unless they prove that they observed extraordinary
but was ignored. diligence as required by Article 1733. Thus, in an action based on a
breach of contract of carriage, the aggrieved party does not have to
 July 13, 1993: Gillego filed a complaint for damages against prove that the common carrier was at fault or was negligent. All that he
Air France. has to prove is the existence of the contract and the fact of its non-
a. He asserted that as a common carrier which advertises performance by the carrier.
and offers its services to the public, Air France is
under obligation to observe extraordinary diligence in the That respondent’s checked-in luggage was not found upon arrival at his
vigilance over checked-in luggage and to see to it destination and was not returned to him until about two years later is not
that his luggage entrusted to petitioner’s custody disputed. The action filed by the respondent is founded on such breach
would accompany him on his flight and/or could be of the contract of carriage with petitioner who offered no satisfactory
claimed by him upon arrival at his point of explanation for the unreasonable delay in the delivery of respondent’s
destination or delivered to him without delay. baggage. The presumption of negligence was not overcome by the
petitioner and hence its liability for the delay was sufficiently
b. He claimed for actual damages ($2,000.00 or P40,000), established. However, upon receipt of the said luggage during the
moral damages (P1,000,000), exemplary damages pendency of the case in the trial court, respondent did not anymore
(P500,000), attorney’s fees (P50,000) and costs of suit. press on his claim for actual or compensatory damages and neither did
he adduce evidence of the actual amount of loss and damage incurred
 Air France: by such delayed delivery of his luggage. Consequently, the trial court
proceeded to determine only the propriety of his claim for moral and
a. Its liability for lost checked-in baggage is governed by the exemplary damages, and attorney’s fees.
Warsaw Convention for the Unification of Certain Rules
Relating to International Carriage. Under the said treaty, b. In awarding moral damages for breach of contract of carriage, the
its liability for lost or delayed registered baggage of breach must be wanton and deliberately injurious or the one
respondent is limited to 250 francs per kilogram or responsible acted fraudulently or with malice or bad faith. Not every
US$20.00, which constitutes liquidated damages and case of mental anguish, fright or serious anxiety calls for the award of
hence Gillego is not entitled to any further damage. moral damages. Where in breaching the contract of carriage the airline
b. It has taken all necessary measures to avoid loss of is not shown to have acted fraudulently or in bad faith, liability for
Gillego’s baggage, the contents of which he did not damages is limited to the natural and probable consequences of the
declare, and that it has no intent to cause such loss, much breach of the obligation which the parties had foreseen or could have
less knew that such loss could occur. reasonably foreseen. In such a case the liability does not include moral
c. The loss of luggage is due to or occasioned by force and exemplary damages.
majeure or fortuitous event or other causes beyond the
carrier’s control. Diligent, sincere and timely efforts were In repeatedly ignoring respondent’s inquiries, petitioner’s employees
exerted to locate the missing luggage. exhibited an indifferent attitude without due regard for the
d. The claims for actual, moral and exemplary damages and inconvenience and anxiety he experienced after realizing that his
attorney’s fees therefore have no basis in fact and in law, luggage was missing. Petitioner was thus guilty of bad faith in
and are, moreover speculative and unconscionable. breaching its contract of carriage with the respondent, which entitles the
latter to the award of moral damages. However, we agree with
 RTC: Air France is grossly negligent for failing to deliver the petitioner that the sum of ₱1,000,000.00 awarded by the trial court is
luggage and ignoring Gillego’s follow-ups. Air France is liable excessive and not proportionate to the loss or suffering inflicted on
to pay: the passenger under the circumstances.
a. 1 million as moral damages
b. 500,000 as exemplary damages
c. 50,000 as attorney’s fees
 CA affirmed the ruling of the trial court.
21 Cruz v. Sun Holidays, Inc.,

G.R. No. 186312, 29 June
2010
22 Tan v. OMC Carriers, Inc., Respondent OMC Carriers owned a truck, driven by respondent Whether or not:
G.R. No. 190521, 12 January Arambala, which crashed into the home of petitioners Tan when its a) the reduction of actual damages for loss of property was proper;
2011 braking mechanism failed. This caused the death of the head of the b) the removal of actual damages for loss of earning capacity was
family, Celedonio Tan. The Tans went to court to demand damages proper; and
due to the negligence of OMC. OMC counters that the truck went c) whether or not the reduction of exemplary damages was proper.
out of control because of motor oil spilled on the road. The RTC
found OMC to be liable, that the brake of the truck malfunctioned, Civil Law: Temperate damages are awarded when the exact amount of
and that there was no motor oil which caused the accident. The damages is unknown. The petitioners clearly suffered damages. Their
driver, Aramballa, abandoned the truck when the brakes did not home and property were damaged. The provider of the family passed
work which caused the truck to slam into the home of the Tans. The away. It is clear and undisputed that they did suffer losses. However,
RTC awarded actual damages, both on the loss of property and since the value of the properties damaged could not be determined with
earning capacity of Celedonio. Exemplary damages were also certainty because of the nature of the property, temperate damages are
awarded. Upon appeal to the Court of Appeals, the actual damages in order. Also, even if there are no documents supporting the earning
for loss of property was reduced as they were insufficiently capacity of the deceased, the damage caused is still undisputed.
substantiated. The damages for loss of earning capacity was Temperate damages must be awarded. The reduction of exemplary
deleted for being totally unsubstantiated. The Tans were unable to damages are proper as exemplary damages are not meant to enrich or
present documents to ascertain the amount of earning capacity reduce another party to poverty.
lost. Exemplary damages were also reduced.
Consistent with pertinent jurisprudence, the interest on these awards
must be computed from the date when the RTC rendered its decision in
the civil case, or on June 17, 2008, as it was at this time that a
quantification of the damages may be deemed to have been reasonably
ascertained.
23 People of the Philippines v.

Sanchez, G.R. Nos. 121039,
18 October 2001

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1 Cariaga v. Laguna Tayabas  At about 1:00 pm, June 18, 1952, Bus No.

133 of the Laguna Issues/Held:

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 2

o because of the 16-year delay in the disposition of this case,

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 5

This Court is inclined to adopt a liberal stance in this case as We have

2. CIVIL INDEMNITY FOR THE DEATH OF PASSENGERS PROPER,

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 6

In accordance with prevailing jurisprudence the indemnity of P3, 000.00

If the transportation company had only accepted the judgment of the

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 8

Anent the moral damages ordered to be paid to the respondent, the

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 9

PR and Nicasio delos Reyes:

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 10

ATTORNEY’S FEES (deleted)

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 13

TWA: Because of maintenance problems of the aircraft on the day

Vinluan: He did not hear such announcement at the terminal and

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 14

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 16

For a contract of carriage generates a relation attended with public duty

Respondent TWA is still guilty of bad faith in not informing its

In the case of Alitalia Airways v. Court of Appeals, this Court explicitly

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 17

WHEREFORE, the petition is hereby GRANTED and the decision of the

16 Sarkies Tours v. IAC, G.R.

17 R Transport Corp. v. Eduardo

18 Sulpicio Lines v. Domingo E.

19 Philippine Hawk v. Vivian Tan

 CA affirmed the ruling of the trial court.

21 Cruz v. Sun Holidays, Inc.,

23 People of the Philippines v.

Vol. 3 : February 24 Transportation Digests – Atty. Germaine Chua 20

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