Mecenas v. CA

Facts:

On April 22, 1980, two vessels, “Tacloban City” and “Don Juan” collided at the Talbas Strait within the vicinity of Mindoro. M/V Don Juan sank and hundreds of passengers died. Among them were petitioners’ parents, whose bodies were never recovered. Petitioners filed a complaint seeking damages against Negros Navigation. The trial court awarded P400,000, but the Court of Appeals reduced the award to P100,000.

Issue:

Whether the reduction of the award was properly ruled upon by the Court of Appeals

Held:

In an action based upon a breach of the contract of carriage, the carrier under our civil law is liable for the death of passengers arising from the negligence or wilful act of the carrier's employees although such employees may have acted beyond the scope of their authority or even in violation of the instructions of the carrier, which liability may include liability for moral damages. It follows that petitioners would be entitled to moral damages so long as the collision with the "Tacloban City" and the sinking of the "Don Juan" were caused or attended by negligence on the part of private respondents.

Whether petitioners are entitled to exemplary damages as claimed must depend upon whether or not private respondents acted recklessly, that is, with gross negligence. We believe that the behaviour of the captain of the "Don Juan" in this instance — playing mahjong "before and up to the time of collision" — constitutes behaviour that is simply unacceptable on the part of the master of a vessel to whose hands the lives and welfare of at least seven hundred fifty (750) passengers had been entrusted. There is also evidence that the "Don Juan" was carrying more passengers than she had been certified as allowed to carry. We conclude that Capt. Santisteban and Negros Navigation are properly held liable for gross negligence. We find no necessity for passing upon the degree of negligence or culpability properly attributable to PNOC and PNOC Shipping or the master of the "Tacloban City," since they were never impleaded here.

Exemplary damages are designed by our civil law to permit the courts to reshape behaviour that is socially deleterious in its consequence by creating negative incentives or deterrents against such behaviour. In requiring compliance with the standard of extraordinary diligence, a standard which is in fact that of the highest possible degree of diligence, from common carriers and in creating a presumption of negligence against them, the law seeks to compel them to control their employees, to tame their reckless instincts and to force them to take adequate care of human beings and their property. Both the demands of substantial justice and the imperious requirements of public policy compel us to the conclusion that the trial court's implicit award of moral and exemplary damages was erroneously deleted and must be restored and augmented and brought more nearly to the level required by public policy and substantial justice.

Prudenciado v. Alliance Transport System

Facts:

On May 11, 1960, Dra. Sofia Prudenciado was driving her car. She was about to cross Taft Avenue when a taxicab owned by respondent and driven by Jose Leyson bumped her car. The Court of First Instance of Rizal found Leyson guilty of negligence in the performance of his duty. Alliance failed to prove that it exercised the diligence of a good father of a family in the selection and supervision of it employees, and was held jointly and severally liable.

Issue:

Whether the petitioner is entitled to moral and exemplary damages, and to what extent

Held:

A careful review of the records makes it readily apparent that the injuries sustained by Dra. Prudenciado are not as serious or extensive as they were claimed to be, to warrant the damages awarded by the trial court. In fact, a closer scrutiny of the exhibits showing a moderate damage to the car can by no stretch of the imagination produce a logical conclusion that such disastrous effects of the accident sought to be established, actually took place, not to mention the fact that such were not supported by the medical findings presented. Unquestionably, therefore, the damages imposed' by the lower court should be reduced to more reasonable levels. On the other hand, it will be observed that the reduction of the damages made by the Court of Appeals is both too drastic and unrealistic, to pass the test of reasonableness, which appears to be the underlying basis to justify such reduction. While the damages sought to be recovered were not satisfactorily established to the extent desired by the petitioner, it was nonetheless not disputed that an accident occurred due to the fault and negligence of the respondents; that Dra. Prudenciado suffered a brain concussion which although mild can admittedly produce the effects complained of by her and that these symptoms can develop after several years and can lead to some, serious handicaps or predispose the patient to other sickness. Being a doctor by profession, her fears can be more real and intense than an ordinary person. Otherwise stated, she is undeniably a proper recipient of moral damages which are proportionate to her suffering.

The findings of the trial court in the case at bar which became the basis of the award of exemplary damages are to the effect that it is more apparent from the facts, conditions and circumstances obtaining in the record of the case that respondent driver was running at high speed after turning to the right along Taft Ave. coming from Ayala Boulevard, considering that the traffic was clear. Failing to notice petitioner's car, he failed to apply his brakes and did not even swerve to the right to avoid the collision. The Court of Appeals conforms with aforesaid findings of the trial court but is not prepared to accept that there was gross negligence on the part of the driver to justify the imposition of exemplary damages. However, a driver running at full speed on a rainy day, on a slippery road in complete disregard of the hazards to life and limb of other people cannot be said to be acting in anything less than gross negligence. The frequent incidence of accidents of this nature caused by taxi drivers indeed demands corrective measures.

Sarkies Tours Phils. V. IAC

Facts:

On August 31, 1984, Fatima boarded petitioner’s bus from Manila to Legazpi. Her belongings consisting of 3 bags were kept at the baggage compartment of the bus, but during the stopover in Daet, it was discovered that only one remained. The others might have dropped along the way. Other passengers suggested having the route traced, but the driver ignored it. Fatima immediately told the incident to her mother, who went to petitioner’s office in Legazpi and later in Manila. Petitioner offered P1,000 for each bag, but she turned it down. Disapointed, she sought help from Philtranco bus drivers and radio stations. One of the bags was recovered. She was told by petitioner that a team is looking for the lost luggage. After nine months of fruitless waiting, respondents filed a case to recover the lost items, as well as moral and exemplary damages, attorney’s fees and expenses of litigation. The trial court ruled in favor of respondents, which decision was affirmed with modification by the Court of Appeals, deleting moral and exemplary damages.

Issues:

(1) Whether petitioner is liable for the loss of the luggage

(2) Whether the damages sought should be recovered

Held:

(1) The cause of the loss in the case at bar was petitioner's negligence in not ensuring that the doors of the baggage compartment of its bus were securely fastened. As a result of this lack of care, almost all of the luggage was lost, to the prejudice of the paying passengers.

(2) There is no dispute that of the three pieces of luggage of Fatima, only one was recovered. Respondents had to shuttle between Bicol and Manila in their efforts to be compensated for the loss. During the trial, Fatima and Marisol had to travel from the United States just to be able to testify. Expenses were also incurred in reconstituting their lost documents. Under these circumstances, the Court agrees with the Court of Appeals in awarding P30,000.00 for the lost items and P30,000.00 for the transportation expenses, but disagrees with the deletion of the award of moral and exemplary damages which, in view of the foregoing proven facts, with negligence and bad faith on the fault of petitioner having been duly established, should be granted to respondents in the amount of P20,000.00 and P5,000.00, respectively.

Lopez v. Pan American World Airways

Facts:

Reservation for first class accommodation in Pan American Airlines from Tokyo to San Francisco was made by Delfin Faustino for then Senator Fernando Lopez and company. First class tickets were issued and paid for. The party left Manila for Tokyo as scheduled. Senator Lopez requested Minister Busuego to contact the airlines regarding their accommodation. However, they were informed that there was no accommodation for them. Because of some urgent matters to attend to in San Francisco, they were constrained to take the tourist flight “under protest”.

Issues:

(1) Whether the defendant acted in bad faith for deliberate refusal to comply with its contract to provide first-class accommodation to the plaintiff

(2) Whether moral and exemplary damages should be awarded

Held:

(1) From the evidence of defendant it is in effect admitted that defendant - through its agents - first cancelled plaintiffs, reservations by mistake and thereafter deliberately and intentionally withheld from plaintiffs or their travel agent the fact of said cancellation, letting them go on believing that their first class reservations stood valid and confirmed. In so misleading plaintiffs into purchasing first class tickets in the conviction that they had confirmed reservations for the same, when in fact they had none, defendant wilfully and knowingly placed itself into the position of having to breach its a foresaid contracts with plaintiffs should there be no last-minute cancellation by other passengers before flight time, as it turned out in this case. Such actuation of defendant may indeed have been prompted by nothing more than the promotion of its self-interest in holding on to Senator Lopez and party as passengers in its flight and foreclosing on their chances to seek the services of other airlines that may have been able to afford them first class accommodations. All the time, in legal contemplation such conduct already amounts to action in bad faith. For bad faith means a breach of a known duty through some motive of interest or ill-will.

At the time plaintiffs bought their tickets, defendant, therefore, in breach of its known duty, made plaintiffs believe that their reservation had not been cancelled. Such willful-non-disclosure of the cancellation or pretense that the reservations for plaintiffs stood - and not simply the erroneous cancellation itself - is the factor to which is attributable the breach of the resulting contracts. And, as above-stated, in this respect defendant clearly acted in bad faith.

(2) First, then, as to moral damages. As a proximate result of defendant's breach in bad faith of its contracts with plaintiffs, the latter suffered social humiliation, wounded feelings, serious anxiety and mental anguish. For plaintiffs were travelling with first class tickets issued by defendant and yet they were given only the tourist class. At stop-overs, they were expected to be among the first-class passengers by those awaiting to welcome them, only to be found among the tourist passengers. It may not be humiliating to travel as tourist passengers; it is humiliating to be compelled to travel as such, contrary to what is rightfully to be expected from the contractual undertaking.

The rationale behind exemplary or corrective damages is, as the name implies, to provide an example or correction for public good. Defendant having breached its contracts in bad faith, the court, as stated earlier, may award exemplary damages in addition to moral damages. In view of its nature, it should be imposed in such an amount as to sufficiently and effectively deter similar breach of contracts in the future by defendant or other airlines. In this light, we find it just to award P75,000.00 as exemplary or corrective damages.

Alitalia v. IAC

Facts:

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

Issues:

(1) Whether the Warsaw Convention should be applied to limit Alitalia’s liability

(2) Whether Dr. Pablo is entitled to nominal damages

Held:

(1) Under the Warsaw Convention, an air carrier is made liable for damages for:

a. The death, wounding or other bodily injury of a passenger if the accident causing it took place on board the aircraft or I the course of its operations of embarking or disembarking;

b. The destruction or loss of, or damage to, any registered luggage or goods, if the occurrence causing it took place during the carriage by air; and

c. Delay in the transportation by air of passengers, luggage or goods.

The 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 is considered to be equivalent to 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.

In the case at bar, no bad faith or otherwise improper conduct may be ascribed to the employees of petitioner airline; and Dr. Pablo's luggage was eventually returned to her, belatedly, it is true, but without appreciable damage. The fact is, nevertheless, that some species of injury was caused to Dr. Pablo because petitioner ALITALIA misplaced her baggage and failed to deliver it to her at the time appointed - a breach of its contract of carriage. Certainly, the compensation for the injury suffered by Dr. Pablo cannot under the circumstances be restricted to that prescribed by the Warsaw Convention for delay in the transport of baggage.

(2) She is not, of course, entitled to be compensated for loss or damage to her luggage. She is however entitled to nominal damages which, as the law says, is adjudicated in order that a right of the plaintiff, which has been violated or invaded by the defendant, may be vindicated and recognized, and not for the purpose of indemnifying the plaintiff that for any loss suffered and this Court agrees that the respondent Court of Appeals correctly set the amount thereof at PhP 40,000.00.

The Court also agrees that respondent Court of Appeals correctly awarded attorney’s fees to Dr. Pablo and the amount of PhP 5,000.00 set by it is reasonable in the premises. The law authorizes recovery of attorney’s fees inter alia where, as here, the defendant’s act or omission has compelled the plaintiff to litigate with third persons or to incur expenses to protect his interest or where the court deems it just and equitable.

Tan v. Northwest Airlines

Facts:

On May 31, 1994, Priscilla Tan and Connie Tan boarded a Northwest Airlines plane in Chicago bound to the Philippines with a stop-over at Detroit. Upon their arrival, they found out that their baggage was missing. On June 3, they recovered the baggage and discovered that some were destroyed and soiled. They filed an action for damages, claiming that they suffered mental anguish, sleepless nights and great damage. Northwest offered to reimburse the cost of repairs of the bags or purchase price of new bags. The trial court awarded actual, moral and exemplary damages, and also attorney’s fees. The Court of Appeals partially affirmed the decision by deleting moral and exemplary damages. Hence, Tan filed this instant petition.

Issue:

Whether respondent Airline is liable for moral and exemplary damages for willful misconduct and breach of contract of carriage

Held:

We agree with the Court of Appeals that respondent was not guilty of willful misconduct. "For willful misconduct to exist there must be a showing that the acts complained of were impelled by an intention to violate the law, or were in persistent disregard of one's rights. It must be evidenced by a flagrantly or shamefully wrong or improper conduct." Contrary to petitioner's contention, there was nothing in the conduct of respondent which showed that they were motivated by malice or bad faith in loading her baggages on another plane. Due to weight and balance restrictions, as a safety measure, respondent airline had to transport the baggages on a different flight, but with the same expected date and time of arrival in the Philippines. It is admitted that respondent failed to deliver petitioner's luggages on time. However, there was no showing of malice in such failure. By its concern for safety, respondent had to ship the baggages in another flight with the same date of arrival.

Cervantes v. CA

Facts:

On March 27, 1989, private respondent PAL issued to herein petitioner Nicholas Cervantes a round trip ticket for Manila-Honolulu-Los Angeles-Honolulu-Manila, which is valid until March 27, 1990. On March 23, 1990, petitioner used it. Upon his arrival in Los Angeles, he immediately booked a flight to Manila, which was confirmed on April 2. Upon learning that the plane would make a stop-over in San Francisco, and because he would be there on April 2, petitioner made arrangements to board in San Francisco. On April 2, he was not allowed to board due to the expiration of his ticket. He filed a complaint for damages. It was not given due course by both the trial court and the Court of Appeals.

Issues:

(1) Whether or not the act of the PAL agents in confirming subject ticket extended the period of validity of petitioner's ticket

(2) Whether or not the denial of the award for damages was proper

Held:

(1) From the facts, it can be gleaned that the petitioner was fully aware that there was a need to send a letter to the legal counsel of PAL for the extension of the period of validity of his ticket. Under Article 1898 11 of the New Civil Code, the acts of an agent beyond the scope of his authority do not bind the principal, unless the latter ratifies the same expressly or impliedly. Furthermore, when the third person (herein petitioner) knows that the agent was acting beyond his power or authority, the principal cannot be held liable for the acts of the agent. If the said third person is aware of such limits of authority, he is to blame, and is not entitled to recover damages from the agent, unless the latter undertook to secure the principal's ratification.

(2) An award of damages is improper because petitioner failed to show that PAL acted in bad faith in refusing to allow him to board its plane in San Francisco. In awarding moral damages for breach of contract of carriage, the breach must be wanton and deliberately injurious or the one responsible acted fraudulently or with malice or bad faith. Petitioner knew there was a strong possibility that he could not use the subject ticket, so much so that he bought a back-up ticket to ensure his departure. Should there be a finding of bad faith, we are of the opinion that it should be on the petitioner. What the employees of PAL did was one of simple negligence. No injury resulted on the part of petitioner because he had a back-up ticket should PAL refuse to accommodate him with the use of subject ticket.

Neither can the claim for exemplary damages be upheld. Such kind of damages is imposed by way of example or correction for the public good, and the existence of bad faith is established. The wrongful act must be accompanied by bad faith, and an award of damages would be allowed only if the guilty party acted in a wanton, fraudulent, reckless or malevolent manner. Here, there is no showing that PAL acted in such a manner. An award for attorney's fees is also improper.

Singson v. CA

Facts:

Carlos Singson and his cousin Crescentino Tiongson bought 2 identically routed, round-trip tickets from Cathay Pacific. Each ticket consisted of 5 coupons, and the procedure is that one coupn will be detached from the booklet at every start of the flight. The two left Manila on June 6, 1988. On July 1, 1988, Singson’s coupon corresponding to the San Francisco-Hongkong trip was found to be missing. Instead, what was there is the ticket for Los Angeles-San Francisco, which was supposed to be already detached. It was only on July 6 that the airline company arranged for his flight back to Manila. Singson filed a complaint for damages. The trial court ruled in his favor, but the decision was reversed by the Court of Appeals.

Issues:

(1) Whether a breach of contract was committed by Cathay when it failed to confirm the booking of petitioner for its July 1 flight

(2) Whether the carrier was liable not only for actual, but also for moral and exemplary damages

Held:

(1) CATHAY undoubtedly committed a breach of contract when it refused to confirm petitioner's flight reservation back to the Philippines on account of his missing flight coupon. Its contention that there was no contract of carriage that was breached because petitioner's ticket was open-dated is untenable. To begin with, the round trip ticket issued by the carrier to the passenger was in itself a complete written contract by and between the carrier and the passenger. It has all the elements of a complete written contract, to wit: (a) the consent of the contracting parties manifested by the fact that the passenger agreed to be transported by the carrier to and from Los Angeles via San Francisco and Hongkong back to the Philippines, and the carrier's acceptance to bring him to his destination and then back home; (b) cause or consideration, which was the fare paid by the passenger as stated in his ticket; and, (c) object, which was the transportation of the passenger from the place of departure to the place of destination and back, which are also stated in his ticket.

Interestingly, it appears that CATHAY was responsible for the loss of the ticket. One of two (2) things may be surmised from the circumstances of this case: first, US Air (CATHAY's agent) had mistakenly detached the San Francisco-Hongkong flight coupon thinking that it was the San Francisco-Los Angeles portion; or, second, petitioner's booklet of tickets did not from issuance include a San Francisco-Hongkong flight coupon. In either case, the loss of the coupon was attributed to the negligence of CATHAY's agents and was the proximate cause of the non-confirmation of petitioner's return flight on 1 July 1988. It virtually prevented petitioner from demanding the fulfillment of the carrier's obligations under the contract.

(2) Although the rule is that moral damages predicated upon a breach of contract of carriage may only be recoverable in instances where the mishap results in the death of a passenger, or where the carrier is guilty of fraud or bad faith, there are situations where the negligence of the carrier is so gross and reckless as to virtually amount to bad faith, in which case, the passenger likewise becomes entitled to recover moral damages. To be stranded for five (5) days in a foreign land because of an air carrier's negligence is too exasperating an experience for a plane passenger. For sure, petitioner underwent profound distress and anxiety, not to mention the worries brought by the thought that he did not have enough money to sustain himself, and the embarrassment of having been forced to seek the generosity of relatives and friends.

Private respondent's mistake in removing the wrong coupon was compounded by several other independent acts of negligence above-enumerated. Taken together, they indubitably signify more than ordinary inadvertence or inattention and thus constitute a radical departure from the extraordinary standard of care required of common carriers. Put differently, these circumstances reflect the carrier's utter lack of care and sensitivity to the needs of its passengers, clearly constitutive of gross negligence, recklessness and wanton disregard of the rights of the latter, acts evidently indistinguishable or no different from fraud, malice and bad faith. As the rule now stands, where in breaching the contract of carriage the defendant airline is shown to have acted fraudulently, with malice or in bad faith, the award of moral and exemplary damages, in addition to actual damages, is proper. In the instant case, the injury suffered by petitioner is not so serious or extensive as to warrant an award amounting to P900,000.00. The assessment of P200,000.00 as moral damages and P50,000.00 as exemplary damages in his favor is, in our view, reasonable and realistic.

Fores v. Miranda

Facts:

Respondent was one of the passengers of a jeepney driven by Eugenio Luga. While the vehicle was descending the Sta. Mesa bridge at an excessive speed, the driver lost control, and the jeepney swerved to the bridge wall. Serious injuries were suffered by the defendant. The driver was charged with serious physical injuries through reckless imprudence, and upon interposing a plea of guilty was sentenced accordingly. Petitioner denies liability for breach of contract of carriage, contending that a day before the accident, the jeepney was sold to a certain Carmen Sackerman.

Issues:

(1) Is the approval of the Public Service Commission necessary for the sale of a public service vehicle even without conveying therewith the authority to operate the same?

(2) To what damages is the respondent entitled?

Held:

(1) Assuming the dubious sale to be a fact, the court of Appeals answered the query in the affirmative. The ruling should be upheld. The provisions of the statute are clear and prohibit the sale, alienation, lease, or encumbrance of the property, franchise, certificate, privileges or rights, or any part thereof of the owner or operator of the public service Commission. The law was designed primarily for the protection of the public interest; and until the approval of the public Service Commission is obtained the vehicle is, in contemplation of law, still under the service of the owner or operator standing in the records of the Commission which the public has a right to rely upon.

(2) The P10,000 actual damages awarded by the Court of First Instance of Manila were reduced by the Court of Appeals to only P2,000, on the ground that a review of the records failed to disclose a sufficient basis for the trial court's appraisal, since the only evidence presented on this point consisted of respondent's bare statement that his expenses and loss of income amounted to P20,000. On the other hand, "it cannot be denied," the lower court said, "that appellee (respondent) did incur expenses"' It is well to note further that respondent was a painter by profession and a professor of Fine Arts, so that the amount of P2,000 awarded cannot be said to be excessive. The attorney's fees in the sum 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.

Cachero v. Manila Yellow Taxi Club

Facts:

On December 13, 1952, Atty. Tranquilino Cachero boarded a Yellow Taxi driven by Gregorio Mira Abinion. The taxicab bumped a Meralco post. The plaintiff fell out of the vehicle to the ground and sustained slight physical injuries. On January 6, 1953, plaintiff wrote a letter to the defendant, demanding payment for the sum of P79, 245.65 covering actual transportation and medical expenses, monetary loss, compensatory and exemplary damages. Defendant offered to settle the case amicably, but the parties were not able to agree on the settlement amount. Plaintiff instituted an action for damages on February 2, 1953. The Court of First Instance awarded: (1) P700 for medical and transportation expenses, (2) P3,200 unearned professional fees, and (3) P2,000 moral damages. The plaintiff filed this instant appeal.

Issue:

Whether moral damages can be awarded

Held:

A mere perusal of plaintiff complaint will show that his action against the defendant is predicated on an alleged breach of contract of carriage, i.e., the failure of the defendant to bring him "safely and without mishaps" to his destination, and it is to be noted that the chauffeur of defendant's taxicab that plaintiff used when he received the injuries involved herein, Gregorio Mira, has not even been made a party defendant to this case. The defendant herein has not committed in connection with this case any "criminal offense resulting in physical injuries". The one that committed the offense against the plaintiff is Gregorio Mira, and that is why he has been already prosecuted and punished therefor. We, therefore, hold that the case at bar does not come within the exception of paragraph 1, Article 2219 of the Civil Code. In view of the foregoing the sum of P2,000 awarded as moral damages by the trial Court has to be eliminated, for under the law it is not a compensation awardable in a case like the one at bar.

Korean Airlines v. CA

Facts:

Juanito Lapuz was contracted for employment in Saudi Arabia through Pan Pacific Recruiting Services, Inc. He was supposed to leave via Korean Airlines, but was initially listed as a “chance passenger”. According to Lapuz, he was allowed to check in and was cleared for departure. When he was on the stairs going to the airplane, a KAL officer pointed at him and shouted, “Down! Down!” and he was barred from taking the flight. When he asked for another booking, his ticket was cancelled. He was unable to report for work and so he lost his employment. KAL alleged that the agent of Pan Pacific was informed that there are 2 seats possibly available. He gave priority to Perico, while the other seat was won by Lapuz through lottery. But because only 1 seat became available, it was given to Perico. The trial court adjudged KAL liable for damages. The decision was affirmed by the Court of Appeals, with modification on the damages awarded.

Issues:

(1) Whether there is already a contract of carriage between KAL and Lapuz to hold KAL liable for breach of contract

(2) Whether moral and exemplary damages should be awarded, and to what extent

Held:

(1) The status of Lapuz as standby passenger was changed to that of a confirmed passenger when his name was entered in the passenger manifest of KAL for its Flight No. KE 903. His clearance through immigration and customs clearly shows that he had indeed been confirmed as a passenger of KAL in that flight. KAL thus committed a breach of the contract of carriage between them when it failed to bring Lapuz to his destination. A contract to transport passengers is different in kind and degree from any other contractual relation. The business of the carrier is mainly with the traveling public. It invites people to avail themselves of the comforts and advantages it offers. The contract of air carriage generates a relation attended with a public duty. Passengers have the right to be treated by the carrier's employees with kindness, respect, courtesy and due consideration. They are entitled to be protected against personal misconduct, injurious language, indignities and abuses from such employees. So it is that any discourteous conduct on the part of these employees toward a passenger gives the latter an action for damages against the carrier. The breach of contract was aggravated in this case when, instead of courteously informing Lapuz of his being a "wait-listed" passenger, a KAL officer rudely shouted "Down! Down!" while pointing at him, thus causing him embarrassment and public humiliation. The evidence presented by Lapuz shows that he had indeed checked in at the departure counter, passed through customs and immigration, boarded the shuttle bus and proceeded to the ramp of KAL's aircraft. In fact, his baggage had already been loaded in KAL's aircraft, to be flown with him to Jeddah. The contract of carriage between him and KAL had already been perfected when he was summarily and insolently prevented from boarding the aircraft.

(2) The Court of Appeals granted moral and exemplary damages because:

a. The findings of the court a quo that the defendant-appellant has committed breach of contract of carriage in bad faith and in wanton, disregard of plaintiff-appellant's rights as passenger laid the basis and justification of an award for moral damages.

b. In the instant case, we find that defendant-appellant Korean Air Lines acted in a wanton, fraudulent, reckless, oppressive or malevolent manner when it "bumped off" plaintiff-appellant on November 8, 1980, and in addition treated him rudely and arrogantly as a "patay gutom na contract worker fighting Korean Air Lines," which clearly shows malice and bad faith, thus entitling plaintiff-appellant to moral damages.

c. Considering that the plaintiff-appellant's entitlement to moral damages has been fully established by oral and documentary evidence, exemplary damages may be awarded. In fact, exemplary damages may be awarded, even though not so expressly pleaded in the complaint. By the same token, to provide an example for the public good, an award of exemplary damages is also proper.

A review of the record of this case shows that the injury suffered by Lapuz is not so serious or extensive as to warrant an award of P1.5 million. The assessment of P100,000 as moral and exemplary damages in his favor is, in our view, reasonable and realistic.

Gatchalian v. Delim

Facts:

On July 11, 1973, petitioner Reynalda Gatchalian boarded as paying passenger a minibus owned by respondents. While the bus was running along the highway, a “snapping sound” was heard, and after a short while, the bus bumped a cement flower pot, turned turtle and fell into a ditch. The passengers were confined in the hospital, and their bills were paid by respondent’s spouse on July 14. Before Mrs. Delim left, she had the injured passengers sign an already prepared affidavit waiving their claims against respondents. Petitioner was among those who signed. Notwithstanding the said document, petitioner filed a claim to recover actual and moral damages for loss of employment opportunities, mental suffering and inferiority complex caused by the scar on her forehead. Respondents raised in defense force majeure and the waiver signed by petitioner. The trial court upheld the validity of the waiver and dismissed the complaint. The appellate court ruled that the waiver was invalid, but also that the petitioner is not entitled to damages.

Issues:

(1) Whether there was a valid waiver

(2) Whether the respondent was negligent

(3) Whether the petitioner is entitled to actual and moral damages

Held:

(1) We agree with the majority of the Court of Appeals who held that no valid waiver of her cause of action had been made by petitioner. A waiver, to be valid and effective, must in the first place be couched in clear and unequivocal terms which leave no doubt as to the intention of a person to give up a right or benefit which legally pertains to him. A waiver may not casually be attributed to a person when the terms thereof do not explicitly and clearly evidence an intent to abandon a right vested in such person.

The circumstances under which the Joint Affidavit was signed by petitioner Gatchalian need to be considered. Petitioner testified that she was still reeling from the effects of the vehicular accident when the purported waiver in the form of the Joint Affidavit was presented to her for signing; that while reading the same, she experienced dizziness but that, seeing the other passengers who had also suffered injuries sign the document, she too signed without bothering to read the Joint Affidavit in its entirety. Considering these circumstances, there appears substantial doubt whether petitioner understood fully the import of the Joint Affidavit (prepared by or at the instance of private respondent) she signed and whether she actually intended thereby to waive any right of action against private respondent.

Finally, because what is involved here is the liability of a common carrier for injuries sustained by passengers in respect of whose safety a common carrier must exercise extraordinary diligence, we must construe any such purported waiver most strictly against the common carrier. To uphold a supposed waiver of any right to claim damages by an injured passenger, under circumstances like those exhibited in this case, would be to dilute and weaken the standard of extraordinary diligence exacted by the law from common carriers and hence to render that standard unenforceable. We believe such a purported waiver is offensive to public policy.

(2) In case of death or injuries to passengers, a statutory presumption arises that the common carrier was at fault or had acted negligently "unless it proves that it [had] observed extraordinary diligence as prescribed in Articles 1733 and 1755." To overcome this presumption, the common carrier must show to the court that it had exercised extraordinary diligence to present the injuries. The standard of extraordinary diligence imposed upon common carriers is considerably more demanding than the standard of ordinary diligence. A common carrier is bound to carry its passengers safely "as far as human care and foresight can provide, using the utmost diligence of a very cautious person, with due regard to all the circumstances".

The records before the Court are bereft of any evidence showing that respondent had exercised the extraordinary diligence required by law. The obvious continued failure of respondent to look after the roadworthiness and safety of the bus, coupled with the driver's refusal or neglect to stop the mini-bus after he had heard once again the "snapping sound" and the cry of alarm from one of the passengers, constituted wanton disregard of the physical safety of the passengers, and hence gross negligence on the part of respondent and his driver.

(3) At the time of the accident, she was no longer employed in a public school. Her employment as a substitute teacher was occasional and episodic, contingent upon the availability of vacancies for substitute teachers. She could not be said to have in fact lost any employment after and by reason of the accident. She may not be awarded damages on the basis of speculation or conjecture.

Petitioner's claim for the cost of plastic surgery for removal of the scar on her forehead, is another matter. A person is entitled to the physical integrity of his or her body; if that integrity is violated or diminished, actual injury is suffered for which actual or compensatory damages are due and assessable. Petitioner Gatchalian is entitled to be placed as nearly as possible in the condition that she was before the mishap. A scar, especially one on the face of the woman, resulting from the infliction of injury upon her, is a violation of bodily integrity, giving raise to a legitimate claim for restoration to her conditio ante.

Moral damages may be awarded where gross negligence on the part of the common carrier is shown. Considering the extent of pain and anxiety which petitioner must have suffered as a result of her physical injuries including the permanent scar on her forehead, we believe that the amount of P30,000.00 would be a reasonable award. Petitioner's claim for P1,000.00 as attorney's fees is in fact even more modest.

Villa Rey Transit v. CA

Facts:

On March 17, 1960, Policronio Quintos, Jr. was riding the petitioner’s bus, when the said bus frontally hit the rear side of a bullcart filled with hay. The protruding end of the bamboo pole at the rear of the cart penetrated the windshield of the bus and landed at Policronio’s face. He died of traumatic shock due to cerebral injuries. Private respondents are sisters and surviving heirs of the deceased. They brought this action against Villa Rey Transit for breach of contract of carriage. The trial court found that the death was caused by the negligence of the bus driver, for whom petitioner was liable under the contract of carriage with the deceased.

Issues:

(1) The number of years to be used as basis of computation

(2) The rate at which the losses sustained by respondents should be fixed

Held:

(1) The determination of the indemnity to be awarded to the heirs of a deceased person has no fixed basis. Much is left to the discretion of the court considering the moral and material damages involved, and so it has been said that "(t)here can be no exact or uniform rule for measuring the value of a human life and the measure of damages cannot be arrived at by precise mathematical calculation, but the amount recoverable depends on the particular facts and circumstances of each case. The life expectancy of the deceased or of the beneficiary, whichever is shorter, is an important factor.' Other factors that are usually considered are: (1) pecuniary loss to plaintiff or beneficiary; (2) loss of support; (3) loss of service; (4) loss of society; (5) mental suffering of beneficiaries; and (6) medical and funeral expenses."

Thus, life expectancy is, not only relevant, but, also, an important element in fixing the amount recoverable by private respondents herein. Although it is not the sole element determinative of said amount, no cogent reason has been given to warrant its disregard and the adoption, in the case at bar, of a purely arbitrary standard, such as a four-year rule. In short, the Court of Appeals has not erred in basing the computation of petitioner's liability upon the life expectancy of Policronio Quintos, Jr.

(2) With respect to the rate at which the damages shall be computed, petitioner impugns the decision appealed from upon the ground that the damages awarded therein will have to be paid now, whereas most of those sought to be indemnified will be suffered years later. This argument is basically true, and this is, perhaps, one of the reasons why the Alcantara case points out the absence of a "fixed basis" for the ascertainment of the damages recoverable in litigations like the one at bar. Just the same, the force of the said argument of petitioner herein is offset by the fact that, although payment of the award in the case at bar will have to take place upon the finality of the decision therein, the liability of petitioner herein had been fixed at the rate only of P2,184.00 a year, which is the annual salary of Policronio Quintos, Jr. at the time of his death, as a young "training assistant" in the Bacnotan Cement Industries, Inc. In other words, unlike the Alcantara case, on which petitioner relies, the lower courts did not consider, in the present case, Policronio's potentiality and capacity to increase his future income. Indeed, upon the conclusion of his training period, he was supposed to have a better job and be promoted from time to time, and, hence, to earn more, if not considering the growing importance of trade, commerce and industry and the concomitant rise in the income level of officers and employees therein much more.

Damages consist, not of the full amount of his earnings, but of the support, they received or would have received from him had he not died in consequence of the negligence of petitioner's agent. In fixing the amount of that support, We must reckon with the "necessary expenses of his own living", which should be deducted from his earnings. Only net earnings, not gross earning, are to be considered that is, the total of the earnings less expenses necessary in the creation of such earnings or income and less living and other incidental expenses.

All things considered, We are of the opinion that it is fair and reasonable to fix the deductible living and other expenses of the deceased at the sum of P1,184.00 a year, or about P100.00 a month, and that, consequently, the loss sustained by his sisters may be roughly estimated at P1,000.00 a year or P33,333.33 for the 33-1/3 years of his life expectancy. To this sum of P33,333.33, the following should be added: (a) P12,000.00, pursuant to Arts. 104 and 107 of the Revised Penal Code, in relation to Article 2206 of our Civil Code, as construed and applied by this Court; (b) P1,727.95, actually spent by private respondents for medical and burial expenses; and (c) attorney's fee, which was fixed by the trial court, at P500.00, but which, in view of the appeal taken by petitioner herein, first to the Court of Appeals and later to this Supreme Court, should be increased to P2,500.00. In other words, the amount adjudged in the decision appealed from should be reduced to the aggregate sum of P49,561.28, with interest thereon, at the legal rate, from December 29, 1961, date of the promulgation of the decision of the trial court.

Cariaga v. LTB Co.

Facts:

At about 3:00 pm on June 18, 1952, a collision occurred between LTB bus and a train, which resulted to the death of the bus driver, and severe injury to its passengers, including plaintiff Edgardo Cariaga. Edgardo was a 4^th year medical student at the University of SantoTomas. LTB paid the sum of P16,964.45 for his hospital bills, and daily allowance of P10 up to January 15, 1953, which totalled P775.30. On April 24, 1953, the present action was filed to recover for Edgardo the sum of P312,000 as actual, moral and compensatory damages from LTB and MRR Co. LTB disclaimed liability and filed a cross-claim against MRR for the medical assistance extended to Edgardo. The trial court awarded P10, 490 to Edgardo against LTB, and dismissed he cross-claim against MRR. The Cariagas and LTB both appealed. The Cariagas claim that the trial court erred in merely awarding P10,490 as compensatory damages, while LTB contends that the collision was due to the fault of the train engineer.

Issues:

(1) Whether it was the railroad company, and not LTB, who should be held liable

(2) Whether actual and moral damages should be awarded to Edgardo

(3) Whether Edgardo’s parents are entitled to damages

Held:

(1) The findings of the lower court are predicated mainly upon the testimony of Gregorio Ilusondo, a witness for the Manila Railroad Company. Notwithstanding the efforts exerted by the LTB to assail his credibility, we do not find in the record any fact or circumstance sufficient to discredit his testimony. We have, therefore, no other alternative but to accept the findings of the trial court to the effect, firstly, that the whistle of locomotive was sounded four times two long and two short "as the train was approximately 300 meters from the crossing"; secondly, that another LTB bus which arrived at the crossing ahead of the one where Edgardo Cariaga was a passenger, paid heed to the warning and stopped before the "crossing", while as the LTB itself now admits, the driver of the bus in question totally disregarded the warning.

(2) Appellant LTB admits that under Art. 2201 of the Civil Code the damages for which the obligor, guilty of a breach of contract but who acted in good faith, is liable shall be those that are the natural and probable consequences of the breach and which the parties had forseen or could have reasonably forseen at the time the obligation was constituted, provided such damages, according to Art. 2199 of the same Code, have been duly proved. Upon this premise it claims that only the actual damages suffered by Edgardo Cariaga consisting of medical, hospital and other expenses in the total sum of P17,719.75 are within this category. We are of the opinion, however, that the income which Edgardo Cariaga could earn if he should finish the medical course and pass the corresponding board examinations must be deemed to be within the same category because they could have reasonably been foreseen by the parties at the time he boarded the bus No. 133 owned and operated by the LTB. At that time he was already a fourth-year student in medicine in a reputable university. While his scholastic may not be first rate, it is, nevertheless, sufficient to justify the assumption that he could have passed the board test in due time. As regards the income that he could possibly earn as a medical practitioner, it appears that, according to Dr. Amado Doria, a witness for the LTB, the amount of P300.00 could easily be expected as the minimum monthly income of Edgardo had he finished his studies. Upon consideration of all the facts mentioned heretofore this Court is of the opinion, and so holds, that the compensatory damages awarded to Edgardo Cariaga should be increased to P25,000.00.

Art. 2219. Moral damages may be recovered in the following and analogous cases:

(1) A criminal offense resulting in physical injuries;

(2) Quasi-delicts causing physical injuries;

(3) Seduction, abduction, rape, or other lascivious acts;

(4) Adultery or concubinage;

(5) Illegal or arbitrary detention or arrest;

(6) Illegal search;

(7) Libel, slander or any other form of defamation;

(8) Malicious prosecution;

(9) Acts mentioned in Article 309;

(10) Acts and actions referred to in Articles 21, 26, 27, 28, 29, 30, 32, 34, and 35.

In the case of Cangco, vs. Manila Railroad, 38 Phil. 768, We established the distinction between obligation derived from negligence and obligation as a result of a breach of contract. Thus, we said:

It is important to note that the foundation of the legal liability of the defendant is the contract of carriage, and that the obligation to respond for the damage which plaintiff has suffered arises, if at all, from the breach of that contract by reason of the failure of defendant to exercise due care in its performance. That is to say, its liability is direct and immediate, differing essentially in the legal viewpoint from the presumptive responsibility for the negligence of its servants, imposed by Article 1903 of the Civil Code (Art. 2180 of the new), which can be rebutted by proof of the exercise of due care in their selection of supervision. Article 1903 is not applicable to obligations arising EX CONTRACTU, but only to extra-contractual obligation or to use the technical form of expression, that article relates only to CULPA AQUILIANA' and not to CULPA CONTRACTUAL.

(3) The claim made by said spouses for actual and compensatory damages is likewise without merits. As held by the trial court, in so far as the LTB is concerned, the present action is based upon a breach of contract of carriage to which said spouses were not a party, and neither can they premise their claim upon the negligence or quasi-delict of the LTB for the simple reason that they were not themselves injured as a result of the collision between the LTB bus and train owned by the Manila Railroad Company.