Transpo Full t Xt March 5

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TRANQUILINO CACHERO, plaintiff and appellant , vs . MANILA YELLOW TAXICAB CO., INC., defendant-appellant .

Bernardino Guerrero and J. G. Madarang for plaintiff and appellant.

Castaño & Ampil for the defendant and appellant.

SYLLABUS

1.CONTRACT OF CARRIAGE; BREACH OF; DAMAGES; AGAINST WHOM THE ACTIONMUST BE MAINTAINED TO RECOVER MORAL DAMAGES. — While under the law,employers are made responsible for the damages caused by their employees acting withinthe scope of their assigned task, plaintiff, in the present case, does not maintain his actionagainst all the persons who might be liable for the damages caused but on an allegedbreach of contract of carriage and against the defendant employer alone. However, thedefendant taxicab company has not committed any criminal offense resulting in physicalinjuries against the plaintiff. The one that committed the offense against plaintiff is thedriver of defendant's taxicab but he was not made party defendant to the case. Therefore,plaintiff is not entitled to compensation for moral damages as his case does not comewithin the exception of paragraph 1 of Article 2219 of the Civil Code.

2.ID.; ATTORNEY'S FEES; WHEN MAY BE RECOVERED; CASE AT BAR. — Thepresent case does not come under any of the exceptions enumerated in Article 2208 of the Civil Code, specially of paragraph 2 thereof, because defendant's failure to meet itsresponsibility was not the cause that compelled the plaintiff to litigate or to incur expenses

to protect his interests. The present action was instituted because plaintiff demanded anexorbitant amount for moral damages and naturally the defendant did not and could notyield to such demand. This is neither a case that comes under paragraph 11 of said Articlebecause the Lower Court did not deem it just and equitable to award any amount forattorney's fees, on which point this Court agrees.

D E C I S I O N

FELIX , J p:

There is no dispute as to the following facts: on December 13, 1952, Atty.Tranquilino F. Cachero boarded a Yellow Taxicab, with plate No. 2159-52 driven byGregorio Mira Abinion and owned by the Manila Yellow Taxicab Co., Inc. On passingOroquieta between Doroteo Jose and Lope de Vega streets, Gregorio Mira Abinion bumpedsaid taxicab against a Meralco post, No. 1-4/387, with the result that the cab was badlysmashed and the plaintiff fell out of the vehicle to the ground, suffering thereby physicalinjuries, slight in nature .



The chauffeur was subsequently prosecuted by the City Fiscal and on February 26,1953, upon his plea of guilty the Municipal Court of Manila sentenced him to suffer 1month and 1 day of arresto mayor , and to pay the costs.

On December 17, 1952, Tranquilino F. Cachero addressed a letter tothe Manila Yellow Taxicab Co., Inc., which was followed by another of January 6, 1953,which reads as follows:

"MANILA, January 6, 1953

The MANILA YELLOW TAXICAB Co., INC.1338 Arlegui, Manila

Dear Sirs:

As you have been already advised by the letter dated December 17, 1952, onDecember 13, 1952, while I was a passenger of your taxicab bearing plate No. 2159and driven by your chauffeur Gregorio Mira and through his negligence and the badcondition of the said car, he bumped the same against the pavement on the street(Oroquieta — between Doroteo Jose and Lope de Vega streets, Manila) and hit theMeralco post on said street, resulting in the smashing of the said taxicab, and as a

result thereof I was gravely injured and suffered and is still suffering physical, mentaland moral damages and not being able to resume my daily calling.

For the said damages, I hereby make a demand for the payment of the sum of P79,245.65, covering expenses for transportation to the hospital for medicaltreatment, medicines, doctors bills, actual monetary loss, moral, compensatory andexemplary damages, etc., within 5 days from date of receipt hereof.

I trust to hear from you on the matter within the period of 5 days abovespecified.

Truly yours,

(Sgd.) Tranquilino F. Cachero2256 Int. B, Misericordia St.,Sta. Cruz, Manila"

(Exhibit K)

The Taxicab Co. to avoid expenses and time of litigation offered to settle the caseamicably with plaintiff but the latter only agreed to reduce his demand to the sum of P72,050.20 as his only basis for settlement which, of course, was not accepted by saidcompany. So plaintiff instituted this action on February 2, 1953, in the Court of FirstInstance of Manila, praying in the complaint that the defendant be condemned to pay

him:

"(a )The sum of P72,050.20, the total sum of the itemized losses and/ordamages under paragraph 7 of the complaint, with legal interest thereon from thedate of the filing of the complaint;

(b )The sum of 5,000 as attorney's fee; and the costs of the suit; and.

Plaintiff further respectfully prays for such other and further reliefs as the factsand the law pertaining to the case may warrant."

The defendant answered the complaint setting forth affirmative defenses and acounterclaim for P930 as damages and praying for the dismissal of plaintiff's action. After



hearing the Court rendered decision only July 20, 1954, the dispositive part of which is asfollows:

"IN VIEW OF THE FOREGOING, the Court hereby renders judgment in favor of the plaintiff and against the defendant, sentencing the latter to pay the former thefollowing: (1) For medicine, doctor's fees for services rendered and transportation,P700; (2) professional fee as attorney for the defendant in Criminal Case No. 364,'People vs . Manolo Maddela et al.' of the Court of First Instance of Nueva Vizcaya,

P3,000; (3) professional fees as attorney for the defendant in Civil Case No. 23891 of the Municipal Court of Manila, 'Virginia Tangulan vs . Leonel da Silva,' and for thetaking of the deposition of Gabina Angrepan in a case against the Philippine NationalBank, P200; and (4) moral damages in the amount of P2,000.

Defendant's counterclaim is hereby dismissed.

Defendant shall also pay the costs."

From this decision both parties appealed to Us, plaintiff limiting his appeal to thepart of the decision which refers to the moral damages awarded to him which heconsidered inadequate, and to the failure of said judgment to grant the attorney's fees

asked for in the prayer of his complaint. Defendant in turn alleges that the trial Courterred in awarding to the plaintiff the following:

"(1)P700 — for medicine, doctor's fees and transportation expenses;

(2)P3,000 — as supposedly unearned full professional fees as attorney for thedefendant in Criminal Case No. 364, 'People vs . Manolo Maddela et al.';

(3)P200 — as supposedly unearned professional fees as attorney for thedefendant in Civil Case No. 23891 of the Manila Municipal Court, 'Virginia Tangulan vs .Leonel de Silva', and for failure to take the deposition of a certain Gabina Angrepan inan unnamed case; and

(4)P2,000 —

as moral damages, amounting to the grand total of P5,900, theseamounts being very much greater than what plaintiff deserves."

In connection with his appeal, plaintiff calls attention to the testimonies of Dr. Modesto S.Purisima and of Dr. Francisco Aguilar, a member of the staff of the National OrthopedicHospital, which he considers necessary as a basis for ascertaining not only the physicalsufferings undergone by him, but also for determining the adequate compensation formoral damages that he should be awarded by reason of said accident.

The exact nature of plaintiff's injuries, their degree of seriousness and the period of his involuntary disability can be determined by the medical certificate (Exhibit D) issued by

the National Orthopedic Hospital on December 16, 1952, and the testimonies of Dr.Francisco Aguilar, physician in said hospital, and of Dr. Modesto Purisima, a privatepractitioner. The medical certificate (Exhibit D) lists: (a ) a subluxation of the right shoulder

joint; (b ) a contusion on the right chest; and (c ) a "suspicious fracture" of the upper endof the right humerus. Dr. Aguilar who issued the medical certificate admitted, however,with regard to the "suspicious fracture", that in his opinion with (the aid of) the x-raythere was no fracture. According to this doctor plaintiff went to the National OrthopedicHospital at least six times during the period from December 16, 1952, to April 7, 1953;that he strapped plaintiff's body (see exhibit E), which strap was not removed until after aperiod of six weeks had elapsed. Dr. Modesto Purisima, a private practitioner, testified that



he advised and treated plaintiff from December 14, 1952, to the end of March (1953).Plaintiff was never hospitalized for treatment of the injuries he received in said accident.

Counsel for the defendant delves quite extensively on these injuries. He says in hisbrief the following:

"Just what is a subluxation? Luxation is another term for dislocation (Dorland,W.A.N., The American Illustrated Medical Dictionary (13th ed.), p. 652), and hence,a subluxation is an incomplete or partial dislocation (Ibid., p. 1115). While adislocation is the displacement of a bone or bones from its or their normal setting(and, therefore, applicable and occurs only to joints and not to rigid or non-movableparts of the skeletal system) (Ibid., p. 358; Christopher, F., A Textbook of Surgery(5th ed.), p. 342), it should be distinguished from a fracture which is a break arrupture in a bone or cartilage, usually due to external violence (Christopher, F., ATextbook of Surgery (5th ed.), p. 194; Dorland, W.A.N., The American IllustratedMedical Dictionary (13th ed.), p. 459). Because, unlike fractures which may be partial(a crack in the bone) or total (a complete break in the bone), there can be no half-way situations with regard to dislocations of the shoulder joint (the head or ball of thehumerus — the humerus is the bone from the elbow to the shoulder) must be either

inside the socket of the scapula or shoulder blade (in which case there is nodislocation) or out of the latter (in which event there is a dislocation), to denote acondition where due to external violence, the muscles and ligaments connecting thehumerus to the scapula have subjected to strain intense enough to producetemporary distension or lessening of their tautness and consequently resulting in theloosening or wrenching of the ball of the humerus from its snug fit in the socket of thescapula, by using the terms subluxation or partial dislocation (as used in the medicalcertificate), is to fall into a misnomer — a term often used by 'chiropractors' and bythose who would want to sound impressive, but generally unfavored by the medicalprofession. To describe the above condition more aptly, the medical profession usuallyemploys the expression luxatio imperfecta , or, in simple language, a sprain (Dorland,W.A.N., The American Illustrated Medical Dictionary (13th ed.), p. 652). The conditionwe have described is a paraphrase of the definition of a sprain. Plaintiff suffered thisvery injury (a sprained or wrenched shoulder joint) and a cursory scrutiny of his x- rayplates (Exhibits A and B) by a qualified orthopedic surgeon or by a layman with apicture or x-ray plate of a normal shoulder joint (found in any standard textbook onhuman anatomy; the one we used was Scheffer, J.P., Morris' Human Anatomy (10ed., p. 194) for comparison will bear out our claim.

Treatment for a sprain is by the use of adhesive or elastic bandage, elevationof the joint, heat, effleurage and later massage (Christopher, F., A Textbook of Surgery (5th ed., p. 116). The treatment given to the plaintiff was just exactly that Dr.

Aguilar bandaged (strapped) plaintiff's right shoulder and chest (t.s.n., p. 31) in anelevated position (with the forearm horizontal to the chest (see photograph, ExhibitE), and certain vitamins wane prescribed for him (t.s.n., p. 131). He also underwentmassage for some time by Drs. Aguilar and Purisima. The medicines andappurtenances to treatment purchased by plaintiff from the Orthopedic Hospital,Botica Boie and Metro Drug Store were, by his own admission, adhesive plaster,bandage, gauze, oil and 'tintura arnica' (t.s.n., p. 3 — continuation of transcript), andDr. Purisima also prescribed 'Numotizin', a heat generating ointment (t.s.n., p. 23), all



of which are indicated for a sprain, and by their nature, can cure nothing more seriousthan a sprain anyway. Fractures and true dislocations cannot be cured by the kind of treatment and medicines which plaintiff received. A true dislocation, for instance, istreated by means of reduction through traction of the arm until the humeral headreturns to the proper position in the scapular socket (pulling the arm at a 60 degreeangle and guiding the ball of the humerus into proper position, in its socket) while thepatient is under deep anesthesia, and then, completely immobilizing the part until theinjured capsule has healed (Christopher, F., A Textbook of Surgery, pp. 343 and 344).No evidence was submitted that plaintiff ever received the latter kind of treatment.Dr. Purisima even declared that after the plaintiff's first visit to the Orthopedic Hospitalthe latter informed him that there was no fracture or dislocation (t.s.n., p. 26). Dr.Purisima's statement is the truth of the matter as we have already explained — jointsof the shoulder being only subject to total dislocation (due to their anatomical design),not to partial ones, and any injury approximating dislocation but not completely, itbeing classified as mere sprains, slight or bad.

The second and last injury plaintiff sustained was a contusion. What is acontusion? It is just a high flown expression for a bruise or the act of bruising(Dorland, W.A.N., The American Illustrated Medical Dictionary (13th ed., p. 290). No

further discussion need be made on this particular injury since the nature of a bruiseis of common knowledge (it's a bit uncomfortable but not disabling unless it occurs onmovable parts like the fingers or elbow, which is not the case herein having occurredin the right chest) and the kind of medical treatment or help it deserves is also wellknown." (pp. 10-14, defendant-appellant's brief).

The trial Judge undoubtedly did not give much value to the testimonies of thedoctors when in the statement of facts made in his decision he referred to the physicalinjuries received by the plaintiff as slight in nature and the latter is estopped fromdiscussing the same in order to make them appear as serious, because in the statement of facts made in his brief as appellant , he says the following:

"The facts of the case as found by the lower court in its decision, with thepermission of this Honorable Court, we respectfully quote them hereunder asour STATEMENT OF FACTS for the purpose of this appeal."

Before entering into a discussion of the merits of plaintiff's appeal, We Will say afew words as to the nature of the action on which his demand for damages is predicated.

"The nature of an action as in contract or in tort is determined from theessential elements of the complaint, taken as a whole, in the case of doubt aconstruction to sustain the action being given to it.

While the prayer for relief or measure of damages sought does not necessarilydetermine the character of the action, it may be material in the determination of thequestion and therefore entitled to consideration and in cases of doubt will oftendetermine the character of the action and indeed there are actions whose character isnecessarily determined thereby." (1 C.J.S. 1100)

A mere perusal of plaintiff's complaint will show that his action against thedefendant is predicated on an alleged breach of contract of carriage, i.e., the failure of thedefendant to bring him "safely and without mishaps" to his destination, and it is to benoted 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 thiscase.

Considering, therefore, the nature of plaintiff's action in this case, is he entitled tocompensation for moral damages? Article 2219 of the Civil Code says the following:

"ART. 2219.Moral damages may be recovered in the following and analogouscases:

(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 and35.

xxx xxx xxx."

Of the cases enumerated in the just quoted Article 2219 only the first two may haveany bearing on the case at bar. We find, however, with regard to the first that thedefendant herein has not committed in connection with this case any "criminal offenseresulting in physical injuries". The one that committed the offense against the plaintiff isGregorio Mira, and that is why he has been already prosecuted and punished therefor.

Although (a ) owners and managers of an establishment or enterprise are responsible fordamages caused by their employees in the service of the branches in which the latter areemployed or on the occasion of their functions; (b ) employers are likewise liable fordamages caused by their employees and household helpers acting within the scope of their assigned task (Article 2180 of the Civil Code); and (c ) employers and corporationsengaged in any kind of industry are subsidiarily civilly liable for felonies committed by theiremployees in the discharge of their duties (Art. 103, Revised Penal Code), plaintiff hereindoes not maintain this action under the provisions of any of the articles of the codes justmentioned and against all the persons who might be liable for the damages caused, but asa result of an admitted breach of contract of carriage and against the defendant employer

alone. We, therefore, hold that the case at bar does not come within the exception of paragraph 1, Article 2219 of the Civil Code.

The present complaint is not based either on a "quasi delict causing physicalinjuries" (Art. 2219, par. 2, of the Civil Code). From the report of the Code Commission onthe new Civil Code We copy the following:

"A question of nomenclature confronted the Commission. After a carefuldeliberation, it was agreed to use the term 'quasi delict' for those obligationwhich agreed to not arise from law, contracts, quasi- contracts, or criminal offenses.Theyare known in Spanish legal treatises as 'culpa aquiliana ' ,'culpa-extra-contractual' or



'cuasi- delitos '. The phrase 'culpa-extra-contractual' or its translation 'extra-contractualor penal obligation. 'Aquilian fault' might have been selected, but it was thoughtinadvisable to refer to so ancient a law as the 'Lex Aquilia'. So 'quasi-delicts' waschosen, which more nearly corresponds to the Roman Law classification of obligations, and is in harmony with the nature of this kind of liability."

"The Commission also thought of the possibility of adopting the word 'tort' from Anglo-American law. But 'tort' under that system is much broader than the Spanish-

Philippine concept of obligations arising from non-contractual negligence. 'Tort' in Anglo-American jurisprudence includes not only negligence, but also intentionalcriminal act, such as assault and battery, false imprisonment and deceit. In thegeneral plan of the Philippine legal system, intentional and malicious acts aregoverned by the Penal Code, although certain exceptions are made in the Project."(Report of the Code Commission, pp. 161-162).

In the case of Cangco vs. Manila Railroad, 38 Phil. 768, We established thedistinction between obligation derived from negligence and obligation as a result of abreach of a 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 thedamage which plaintiff has suffered arises, if at all, from the breach of that contact byreason of the failure of defendant to exercise due care in its performance. That is tosay, its liability is direct and immediate, differing essentially in the legal viewpoint from that 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 or supervision. Article 1903 is not applicable to obligations arising EX CONTRACTU, but only to extra- contractual obligations — or to use the technical form of expression, that article relates only to CULPA AQUILIANA and not to CULPA CONTRACTUAL."

The decisions in the cases of Castro vs. Acro Taxicab (82 Phil., 359, 46 Off. Gaz.,No. 5, p. 2023); Lilius et al. vs. Manila Railroad, (59 Phil. 758) and others, wherein moraldamages were awarded to the plaintiffs, are not applicable to the case at bar because saiddecisions were rendered before the effectivity of the new Civil Code (August 30, 1950) andfor the further reason that the complaints filed therein were based on different causes of action.

In view of the foregoing the sum of P2,000 awarded as moral damages by the trialCourt has to be eliminated, for under the law it is not a compensation awardable in a caselike the one at bar.

As to plaintiff's demand for P5,000 as attorney's fees, the Civil Code provides thefollowing:

"ART. 2208.In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs, cannot be recovered, except :

(1)When exemplary damages are awarded;

(2)When the defendant's act or omission has compelled the plaintiff to litigatewith third persons or to incur expenses to protect his interest;



(3)In criminal cases of malicious prosecution against the plaintiff;

(4)In case of a clearly unfounded civil action or proceeding against the plaintiff;

(5)Where the defendant acted in gross and evident bad faith in refusing tosatisfy the plaintiff's plainly valid, just and demandable claim;

(6)In actions for legal support;

(7)In actions for the recovery of wages of household helpers, laborers and

skilled workers;

(8)In actions for indemnity under workmen's compensation and employer'sliability laws;

(9)In a separate civil action to recover civil liability arising from a crime;

(10)When at least double judicial costs are awarded;

(11)In any other case where the court deems it just and equitable thatattorney's fees and expenses of litigation should be recovered.

In all cases, the attorney's fees and expenses of litigation must be reasonable."

The present case does not come under any of the exceptions enumerated in thepreceding article, specially of paragraph 2 thereof, because defendant's failure to meet itsresponsibility was not the cause that compelled the plaintiff to litigate or to incur expensesto protect his interests. The present action was instituted because plaintiff demanded anexorbitant a mount for moral damages (P60,000) and naturally the defendant did not andcould not yield to such demand. This is neither a case that comes under paragraph 11 of

Article 2208 because the Lower Court did not deem it just and equitable to award anyamount for attorney's fees. As We agree with the trial Judge on this point, We cannotdeclare that he erred for not a warding to plaintiff any such fees in this case.

Coming now to the appeal of the defendant, the Court, after due consideration of

the evidence appearing on record:

(1)Approves the award of P700 for medicine, doctors' fees and transportationexpenses;

(2)Reduces the award of P3,000 as attorney's fees to the sum of P2,000, as ManoloMaddela, defendant in Criminal Case No. 364 of the Court of First Instance of Nueva

Vizcaya testified that he has already paid to plaintiff part of the latter's fees of P3,000, theamount of which was not disclosed, though it was incumbent upon the plaintiff toestablish how much he had been paid of said fees;

(3)Approves the award of P200 as unearned professional fees as attorney for thedefendant in Civil Case No. 238191 of the Municipal Court of Manilawhom plaintiff wasunable to represent, and for the latter's failure to take the deposition of one Agripina

Angrepan due to the automobile accident referred to in this case.

Before closing this decision We deem it convenient to quote the following passageof defendant's brief as appellant:

"Realizing its obligation under its contract of carriage with the plaintiff, andbecause the facts of the case, as have been shown, mark it as more proper for theMunicipal Court only, the defendant, to avoid the expense and time of litigation,offered to settle the case amicably with plaintiff, but the latter refused and insisted on



his demand for P72,050.20 (Exhibit K) as the only basis for settlement, thus adding aclearly petty case to the already overflowing desk of the Honorable Members of thisCourt.

We admire and respect at all times a man for standing up and fighting for hisrights, and when said right consists in injuries sustained due to a breach of a contractof carriage with us, sympathy and understanding are added thereto. But when aperson starts demanding P2,050.20 for a solitary bruise and sprain, injuries for which

the trial court, even at its generous although erroneous best, could only grant P5,900,then respect and sympathy give way to something else. It is time to fight, for, in ourhumble opinion, there is nothing more loathsome nor truly worthy of condemnationthan one who uses his injuries for other purposes than just rectification. If plaintiff'sclaim is granted, it would be a blessing, not a misfortune, to be injured." (p. 34-35)

This case was instituted by a lawyer who, as an officer of the courts, should be thefirst in helping Us in the administration of justice, and after going over the record of thiscase, we do not hesitate to say that the demand of P72,050.20 for a subluxation of theright humerus bone and an insignificant contusion in the chest, has not even thesemblance of reasonableness. As a matter of fact, Dr. Aguilar himself said that the x-ray

plates (Exhibits A, B and C) "did not show anything significant except that it showsa slight subluxation of the right shoulder, and that there is a suspicious fracture", whichultimately he admitted not to exist. The plaintiff himself music have felt embarrassed byhis own attitude when after receiving defendant's brief as appellant, he makes in hisbrief as appellee the categorical statement that he "DOES NOT NOW INSIST NOR PRETEND IN THE LEAST to collect from the defendant all the damages he had claimed inhis complaint, but instead he is submitting his case to the sound discretion of theHonorable Court for the award of a reasonable and equitable damages allowable by law,to compensate the plaintiff of the suffering and looses he had undergone and incurredbecause of the accident oftentimes mentioned in this brief in which plaintiff was injured"(p. 17-18). This acknowledgment comes too late, for plaintiff has already deprived theCourt of Appeals of the occasion to exercise its appellate jurisdiction over this case whichhe recklessly dumped to this Court. We certainly cannot look with favor at this attitude of plaintiff.

Wherefore, the decision appealed from is hereby modified by reducing the amountawarded as unearned professional fees from P3,000 to P2,000 and by eliminating themoral damages of P2,000 awarded by the Lower Court to the plaintiff. Said decision is inall other respects affirmed, without pronouncement as to costs. It is so ordered.

PAZ FORES, petitioner , vs . IRENEO MIRANDA, respondent .

Alberto O. Villaraza for petitioner.

Almazan & Ereneta for respondent.

SYLLABUS





7.ID.; ID.; NEGLIGENCE; NOT CARRIER'S BAD FAITH. — While it is true thatnegligence may be occasionally so gross as to amount to malice, that fact must be shownin evidence. A carrier's bad faith is not to be lightly inferred from a mere finding that thecontract was breached through negligence of the carrier's employees.

8.ID.; ID.; FAILURE TO TRANSPORT PASSENGERS SAFELY. — The theory thatcarrier's violation of its engagement to safely transport the passenger involves a breach of the passenger's confidence, and therefore should be regarded as a breach of contract inbad faith, justifying recovery of moral damages, under Article 2220 of the New Code isuntenable, for under it the carrier would always be deemed in bad faith in every case itsobligation to the passenger is infringed and it would never be accountable for simplenegligence while under Article 1756 of the Civil Code the presumption is that commoncarriers actednegligently and not maliciously, and Article 1762 speaks of negligence of thecommon carrier.

9.ID.; CARRIERS; ACTIONS FOR BREACH OF CONTRACT; WHEN PRESUMPTION OR CARRIER'S LIABILITY ARISES. — An action for breach of contract imposes on the carrier apresumption of liability upon mere proof of injury of the passenger; the latter does not

have to establish the fault of the carrier, or of his employees, and the burden is placed onthe carrier to prove that it was due to an unforeseen event or to force majeure (Congcovs. Manila Railroad Co. 38 Phil., 768, 777.) Morever, the carrier, unlike in suits for quasi-delict may not escape liability by proving that it has exercised due diligence in theselection and supervision of its employees. (Art. 1759 New Civil Code, Cangco vs. ManilaRailroad Co. Supra ; Prado vs. Manila Electric Co., 51 Phil., 900)

D E C I S I O N

REYES, J.B.L., J p:

Defendant-petitioner Paz Fores brings this petition for review of the decision of theCourt of Appeals (C. A. Case No. 1437-R) awarding to the plaintiff-respondentIreneo Miranda the sums of P5,000 by way of actual damages and counsel fees, andP10,000 as moral damages, with costs.

Respondent was one of the passengers on a jeepney driven by Eugenio Luga. Whilethe vehicle was descending the Sta. Mesa bridge at an excessive rate of speed, the driver

lost control thereof, causing it to swerve and to hit the bridge wall. The accident occurredon the morning of March 22, 1953. Five of the passengers were injured, including therespondent who suffered a fracture of the upper right humerus. He was taken to theNational Orthopedic Hospital for treatment, and later was subjected to a series of operations; the first on May 23, 1953, when wire loops were wound around the brokenbones and screwed into place; a second, effected to insert a metal splint, and a third oneto remove such splint. At the time of the trial, it appears that respondent had not yetrecovered the use of his right arm.



The driver was charged with serious physical injuries through reckless imprudence,and upon interposing a plea of guilty was sentenced accordingly.

The contention that the evidence did not sufficiently establish the identity of thevehicle as that belonging to the petitioner was rejected by the appellate court whichfound, among other things, that it carried plate No. TPU-1163, series of 1952, QuezonCity, registered in the name of Paz Fores, (appellant herein) and that the vehicle even hadthe name of "Dona Paz" painted below its windshield. No evidence to the contrary wasintroduced by the petitioner, who relied on an attack upon the credibility of the twopolicemen who went to the scene of the incident.

A point to be further remarked is petitioner's contention that on March 21, 1953, orone day before the accident happened, she allegedly sold the passenger jeep that wasinvolved therein to a certain Carmen Sackerman.

The initial problem raised by the petitioner in this appeal may be formulated thus — "Is the approval of the Public Service Commission necessary for the sale of a public servicevehicle even without conveying therewith the authority to operate the same?" Assumingthe dubious sale to be a fact, the Court of Appeals answered the query in the affirmative.

The ruling should be upheld.

Section 20 of the Public Service Act (Commonwealth Act No. 146) provides:

"SEC. 20.Subject to established limitations and saving provisions to thecontrary, it shall be unlawful for any public service or for the owner, lessee oroperation thereof, without the previous approval and authority of the Commissionpreviously had —

(g)To sell, alienate, mortgage, encumber or lease its property, franchises,certificates, privileges, or rights, or any part thereof; or merge or consolidate itsproperty, franchises, privileges or rights, or any part thereof, with those of any other

public service. The approval herein required shall be given, after notice to the publicand after hearing the persons interested at a public hearing, if it be shown that thereare just and reasonable grounds for making the mortgage or encumbrance, forliabilities of more than one year maturity, or the sale, alienation, lease, merger, orconsolidation to be approved and the same are not detrimental to the public interest,and in case of a sale, the date on which the same is to be consummated shall be fixedin the order or approval: Provided, however , That nothing herein contained shall beconstrued to prevent the transaction from being negotiated or completed before itsapproval or to prevent the sale, alienation, or lease by any public service of any of itsproperty in the ordinary course of its business."

Interpreting the effects of this particular provision of law, we have held in the recentcases of Montoya vs. Ignacio, * 50 Off. Gaz. No. 1, p. 108; Timbol vs. Osias, et al., G. R.No. L-7547, April 30, 1955, and Medina vs. Cresencia, 99 Phil, 506; 52 Off. Gaz. No. 10, p.4606, that a transfer contemplated by the law, if made without the requisite approval of the Public Service Commission, is not effective and binding in so far as the responsibility of the grantee under the franchise in relation to the public is concerned. Petitioner assailscase, contending that in those cases, the operator, the operator did not convey, by leaseor by sale, the vehicle independently of his rights under the franchise. This line of reasoning does not find support in the law. The provisions of the statute are clear and



property, franchise, certificate, privileges or rights, or any part thereof of the owner oroperator of the public service without approval or authorization of the Public ServiceCommission. The law was designed primarily for the protection of the public interest; anduntil the approval of the Public Service Commission is obtained the vehicle is, incontemplation of law, still under the service of the owner or operator standing in therecords of the Commission which the public has a right to rely upon.

The proviso contained in the aforequoted law, to the effect that nothing thereinshall be construed "to prevent the transaction from being negotiated or completed beforeits approval", means only that the sale without the required approval is still valid andbinding between the parties (Montoya vs. Ignacio, supra). The phrase "in the ordinarycourse of its business" found in the other proviso "or to prevent the sale, alienation, orlease by any public service of any of its property". as correctly observed by the lowercourt, could not have been intended to include the sale of the vehicle itself, but at mostmay refer only to such property that may be conceivably disposed or by the carrier in theordinary course of its business, like junked equipment or spare parts.

The case of Indalecio de Torres vs. Visente Ona (63 Phil., 594,597) is enlightening;and there, it was held:

"Under the law, the Public Service Commission has not only general supervisionand regulation of, but also full jurisdiction and control over all public utilities includingthe property, equipment and facilities used, and the property rights and franchisesenjoyed by every individual and company engaged in the performance of a publicservice in the sense this phrase is used in the Public Service Act or Act No. 3108). Byvirtue of the provisions of said Act, motor vehicles used in the performance of a service, as the transportation of freight from one point to another, have to this datebeen considered — and they cannot but be so considered public service property ;

and, by reason of its own nature, a TH truck, which means that the operator thereof places it at the disposal of anybody who is willing to pay a rental for its use, when hedesires to transfer or carry his effects, merchandise or any other cargo from one placeto another, is necessarily a public service property." (Emphasis supplied)

Of course, this Court has held in the case of Bachrach Motor Co. vs. ZamboangaTransportation Co., 52 Phil., 244, that there may be a nunc pro tunc authorization whichhad the effect of having the approval retroact to the date of the transfer; but suchoutcome cannot prejudice rights intervening in the meantime. It appears that no suchapproval was given by the Commission before the accident occurred.

The P10,000 actual damages awarded by the Court of First Instance of Manila werereduced by the Court of Appeals to only P2,000, on the ground that a review of therecords failed to disclose a sufficient basis for the trial court's appraisal, since the onlyevidence presented on this point consisted of respondent's bare statement that hisexpenses and loss of income amounted to P20,000. On the other hand, "it cannot bedenied," the lower court said, "that appellee (respondent ) did incur expenses." It is wellto 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 (see Arts. 2224 and2225, Civil Code of the Philippines). 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 notprovide for the same, and since no appeal was interposed by said respondent, it wasallegedly error for the Court of Appeals to award them motu proprio . Petitioner fails tonote that attorney's fees are included in the concept of actual damaged under the CivilCode and may be awarded whenever the court deems it just and equitable (Art. 2208,Civil Code of the Philippines). We see no reason to alter these awards.

Anent the moral damages ordered to be paid to the respondent, the same must bediscarded. We have repeatedly ruled (Cachero vs. Manila Yellow Taxicab Co. Inc. 101Phil., 523; 54 Off. Gaz., [26], 6599; Necesito, et al vs. Paras, 104 Phil., 75; 56 Off. Gaz.,[23] 4023, that moral damages are not recoverable in damage actions predicated on abreach of the contract of transportation, in view of Articles 2219 and 2220 of the new CivilCode, which provide as follows:

"ART. 2219.Moral damages may be recovered in the following and analogouscases:

(1)A criminal offense resulting in physical injuries;

(2)Quasi-delicts causing physical injuries;

xxx xxx xxx

ART. 2220.Willful injury to property may be a legal ground for awarding moraldamages if the court should find that, under the circumstance, such damages are

justly due. The same rule applies to breaches of contract where the defendant actedfraudulently or in bad faith."

By contrasting the provisions of these two articles it immediately becomes apparentthat:

(a)In case of breach of contract (including one of transportation) proof of bad faithor fraud (dolus ), i.e., wanton or deliberately injurious conduct, is essential to justify anaward of moral damages; and

(b)That a breach of contract can not be considered included in the description term"analogous cases" used in Art. 2219; not only because Art. 2220 specifically provides forthe damages that are caused by contractual breach, but because the definition of quasi- delict in Act. 2176 of the Code expressly excludes the cases where there is a "preexistingcontractual relation between the parties."

"ART. 2176.Whoever by act or omission caused damage to another, therebeing fault or negligence, is obliged to pay for the damage done. Such fault ornegligence, if there is no pro-existing contractual relation between the parties, is

called a quasi-delict and is governed by the provision of this Chapter."

The exception to the basic rule of damages now under consideration is a mishap resultingin the death of a passenger, in which case Article 1764 makes the common carrierexpressly subject to the rule of Art. 2206, that entitles the spouse, descendants andascendants of the deceased passenger to "demand moral damages for mental anguish byreason of the death of the deceased" (Necesito vs. Paras, 104 Phil., 84, Resolution onmotion to reconsider, September 11, 1958). But the exceptional rule of Art. 1764 makes itall the more evident that where the injured passenger does not die, moral damages arenot 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 constituteor justify an inference of malice or bad faith on the part of the carrier; and in the case atbar there is no other evidence of such malice to support the award of moral damages forbreach of contract, therefore, without proof of bad faith or malice on the part of thedefendant, as required by Art. 2220, would be to violate the clear provisions of the law,and constitute unwarranted judicial legislation.

The Court of Appeals has invoked our ruling in Castro vs. Acro Taxicab Co., R. G.No. 49155, December 14, 1948 and Layda vs. Court of Appeals, 90 Phil., 724; but thesedoctrines were predicated upon our former law of damages, before judicial discretion infixing them became limited by the express provisions of the new Civil Code (previouslyquoted). Hence, the aforesaid rulings are now inapplicable.

Upon the other hand, the advantageous position of a party suing a carrier forbreach of the contract of transportation explains, to some extent, the limitation imposedby the new Code on the amount of the recovery. The action for breach of contractimposes on the defendant carrier a presumption of liability upon mere proof of injury tothe passenger; that latter is relieved from the duty to establish the fault of the carrier, or

of his employees, and the burden is placed on the carrier to prove the it was due to anunforeseen event or to force majeure (Cangco vs. Manila Railroad Co., 38 Phil., 768 777).Moreover, the carrier, unlike in suits for quasi-delict, may not escape liability by provingthat it has exercised due diligence in the selection and supervision of its employees (Art.1759, new Civil Code; Cangco vs. Manila Railroad Co., supra ; Prado vs. Manila Electric Co.,51 Phil., 900).

The difference in conditions, defenses and proof, as well as the codal conceptof quasi-delict as essentially extra contractual negligence, compel us to differentiatebetween action ex contractu , and actions quasi ex delicto, and prevent us from viewing

the action for breach of contract as simultaneously embodying an action on tort. Neitherliability under Art. 103 of the Revised Penal Code, since the responsibility is not alleged tobe subsidiary, nor is there on record any averment or proof that the driver of appellantwas insolvent. In fact, he is not even made a party to the suit.

It is also suggested that a carrier's violation of its engagement to safety transportthe passenger involves a breach of the passenger's confidence, and therefore should beregarded as a breach of contract in bad faith, justifying recovery of moral damages under

Art. 2220. This theory is untenable, for under it the carrier would always be deemed inbad faith, in every case its obligation to the passenger is infringed, and it would be neveraccountable for simple negligence; while under the law (Art. 1756) the presumption is that

common carriers acted negligently (and not maliciously), and Art. 1762 speaks of negligence of the common carrier.

"ART. 1756.In case of death of or injuries to passengers, common carriers arepresumed to have been at fault or to have acted negligently, unless the prove thatthey observed extraordinary diligence as prescribed in article 1733 and 1755."

"ART. 1762.The contributory negligence of the passenger does not barrecovery of damages for his death or injuries, it the proximate cause thereof is thenegligence of the common carrier, but the amount of damages shall be equitablyreduced."



The distinction between fraud, bad faith or malice in the sense of deliberate orwanton wrong doing and negligence (as mere carelessness) is too fundamental in our lawto be ignored (Arts. 1170-1172); their consequences being clearly differentiated by theCode.

"ART. 2201.In contracts and quasi-contracts, the damages for which the

obligor who acted in good faith is liable shall be those that are the natural andprobable consequence of the breach of the obligation, and which the parties haveforeseen or could have reasonable foreseen at the time the obligation wasconstituted.

In case of fraud, bad faith, malice or wanton attitude, the obligor shall beresponsible for all damages which may be reasonably attributed to the non-performance of the obligation."

It is to be presumed, in the absence of statutory provision to the contrary, that thisdifference was in the mind of the lawmakers when in Art. 2220 they limited recovery of moral damages to breaches of contract in bad faith. It is true that negligence may be

occasionally so gross as to amount to malice; but that fact must be shown in evidence,from a mere finding that the contract was breached through negligence of the carrier'semployees.

In view of the foregoing considerations, the decision of the Court of Appeals ismodified by eliminating the award of P5.000.00 by way of moral damages (Court of

Appeals Resolution of May 5, 1957). In all other respects, the judgment is affirmed. Nocosts in this instance. So ordered.

LAGUNA TAYABAS BUS COMPANY , petitioner , vs . JULIETA CORNISTA,

thru her parents, GIL CORNISTA and MANUELABELSONTACORNISTA, respondents .

Ozaeta, Gibbs & Ozaeta for petitioner.

Lastrilla & Alimañgahan for respondents.

SYLLABUS

1.DAMAGES; BREACH OF CONTRACT OF CARRIAGE; EFFECT OF CONTRIBUTORY NEGLIGENCE ON AWARD OF MORAL DAMAGES. — While contributory negligence on the partof the injured party justifies the reduction of moral damages in a breach of contract of carriage, it does not justify the exemption from liability of the carrier.

2.ID.; ID.; MORAL DAMAGES; NEGLIGENCE OF CARRIER. — The carrier's negligenceconsisting in its failure to cover the right side of the bus in question with a bar or some othercontrivance to safeguard and protect passengers falls within the category of the misconductmentioned in Article 2220 of the New Civil Code.



R E S O L U T I O N

DIZON, J p:

Julieta Cornista, through her parents, sued petitioner in the Court of First Instance of Leyte(Civil Case No. 2298) for damages arising from breach of contract of carriage, her claim being

that, while a passenger of one of petitioner's buses, she sustained physical injuries throughthe negligence of petitioner and its driver. Petitioner's principal defense was that Julieta's ownnegligence was the proximate cause of her injuries. After trial, the Court rendered judgmentfor the plaintiff awarding her the amount of P6,000 as moral damages, plus the amount of P300 for medical attendance, and P1,000 as attorney's fees, with costs. On appeal the Courtof Appeals reduced the moral damages to P3,000, and affirmed the appealed decision in allother respects.

Petitioner now seeks a review of the last mentioned decision for the purpose of having it setaside, or to have the award of moral damages eliminated.

The principal facts, as found by the trial Court, are as follows: cda

"The court, in considering the evidence presented in support of the main issue, issatisfied that the proximate cause of the injuries suffered by plaintiff JulietaCornista,as shown by Exhibit 'A' was the negligence of both the defendant and its driver of busNo. 284 who, at the time of the incident at bar, unmindful of the warning given himby his passengers, recklessly operated and drove said bus at high speed even onsharp curves of the road. A look at Exhs. '7' and '7-A' will readily show that bus No.284, wherein on November 9, 1957, plaintiff Julieta Cornista was a passenger and

from where she fell when said bus was running at a high speed on a curve, the rightside of said bus is not covered nor protected by any bar to safeguard passengerssitting at the extreme ends of the seats on the right side from falling therefrom."

Upon the above facts — which must be deemed final — petitioner's liability for damagescannot be doubted. The decision in Lara vs . Valencia, 55 Off. Gaz., 4438, does not apply tothe present for the reason that, as found by the trial Court, Julieta Cornista was not guilty of negligence. While the Court of Appeals found her chargeable with contributory negligencebecause, instead of holding the hand of her friend Myrna Cruz, who was seated beside her,she should have held tenaciously on to the bus itself, We believe with said Court that while

such circumstances justifies the reduction of the moral damages awarded by the Court of origin, it does not justify the exemption from liability of petitioner herein.

Regarding petitioner's contention that no award of moral damages should have been made infavor of the injured passenger, it must be borne in mind that the Court of origin not onlyfound petitioner's driver guilty of reckless driving, but also found petitioner itself guilty of negligence because "the right side of said bus is not covered nor protected by any bar tosafeguard passengers sitting at the extreme ends of the seats on the right side from fallingtherefrom."



Under the provisions of Art. 2220 of the New Civil Code, in cases of breach of contract(including one of transportation of carriage), either fraud or bad faith, that is, wanton anddeliberately injurious conduct on the part of the carrier is necessary to justify an award of moral damages. Petitioner's negligence consisting in its failure to cover the right side of thebus in question with a bar or some other contrivance to safeguard or protect passengers fallswithin this category of misconduct.

WHEREFORE, petition under consideration is dismissed for lack of merit.

JOSE G. TAMAYO, petitioner , vs . INOCENCIO AQUINO, ET AL., andSILVESTRE RAYOS, respondents . SILVESTRE RAYOS, petitioner , vs.JOSEG. TAMAYO and INOCENCIO AQUINO ET AL., respondents .

Briones & Pascual for petitioner.

Emiliano R. Navarro for respondent Inocencio Aquino et al.

Jose C. Laureta and Naty-Belen N. Millan for respondent Silvestre Rayos.

SYLLABUS

1.DAMAGES; REGISTERED OWNER OF PUBLIC UTILITIES LIABLE FOR DAMAGESDESPITE TRANSFER OF VEHICLE. — The registered owner of a public service vehicle isresponsible for damages that may be caused to any of the passengers therein, even if thesaid vehicle had already been sold, leased or transferred to another person who was, atthe time of the accident, actually operating the vehicle.

2.ID.; LIABILITY OF REGISTERED OWNER DIRECT; REMEDY OF THE LATTER AGAINST TRANSFEREE. — The responsibility of a registered owner of a public vehicle tothe public or to any passenger riding in the vehicle is direct. However, the transferee, whooperated the vehicle when the accident took place, and who is directly responsiblethereof, should in turn be made responsible to the registered owner for what the lattermay have been adjudged to pay. The remedy of the registered owner is by third-partycomplaint.

3.ID.; MORAL DAMAGES; NO MORAL DAMAGES IN BREACH OF CONTRACT IN THE ABSENCE OF FRAUD OR BAD FAITH; MEANING OF TERM "BAD FAITH". — Article 2220 of the Civil Code expressly provides that award of moral damages can be made in a suit forbreach of contract only when the defendant acted fraudulently or in bad faith. What thelaw would consider as bad faith which may furnish a ground for the award of moraldamages would be bad faith in the securing and in the execution of the contract and inthe enforcement of its terms, or any kind of deceit which may have been used by bothdefendants.

D E C I S I O N



LABRADOR , J p:

Inocencio Aquino and his children brought this action against JoseG. Tamayo, holder of a certificate of public convenience to operate two truck s fordamages for the death of Inocencio's wife, Epifania Gonzales, while ridingaboard Tamayo's truck. It is alleged that while his (Inocencio Aquino) wife was making atrip aboard truck with Plate No. TPU-735, it bumped against a culvert on the side of the

road in Bugallon, Pangasinan; that as a consequence of this accident Epifania Gonzaleswas thrown away from the vehicle and two pieces of wood embeded in her skull as aresult of which she died; that the impact of the truck against the culvert was so violentthat the roof of the vehicle was ripped off from its body, one fender was smashed and theengine damaged beyond repair. Complaint was filed for the recovery of P10,000 as actualdamages, P10,000 as moral damages, and costs.

Upon being summoned, defendant Tamayo answered alleging that the truck isowned by Silvestre Rayos, so he filed a third-party complaint against the latter, allegingthat he no longer had any interest whatsoever in the said truck, as he had sold the samebefore the accident to the third-party defendant Silvestre Rayos. Answering the third-partycomplaint, Rayos alleged that if any indemnity is due, it should come from JoseG. Tamayo, because he did not have any transaction with him regarding such sale.

The Court of First Instance found that the truck with plate No. TPU-735 was one of the trucks of Tamayo under a certificate of public convenience issued to him; that he hadsold it to Rayos in March, 1953, but did not inform the Public Service Commission of thesale until June 30, 1953, one month after the accident. On the basis of the above facts,the Court of First Instance ordered the defendant Tamayo and the third-party defendantRayos to pay plaintiffs jointly and severally the sum of P6,000 as compensatory damages,and another sum of P5,000 as moral damages, with interest, and authorized the

defendant or third-party defendant, whoever should pay the entire amount, to recoverfrom the other any sum in excess of one-half of the amount ordered to be paid, withinterest. The court also dismissed the third-party complaint.

Appeal against the above decision was made to the Court of Appeals. This courtaffirmed the judgment of the Court of First Instance in all respects, and against this

judgment certiorari was issued by us on separate petitions of Tamayo and Rayos.

Tamayo claims exemptionn from liability, arguing that the owner and operator of the truck at the time the accident was not he but Rayos. In answer we state that we havealready held in the cases of Medina vs. Cresencia, 99 Phil., 506; 52 Off. Gaz., (11) 4606;

Timbol vs. Osias, 98 Phil., 432; 52 Off. Gaz. (3) 1392; Montoya vs. Ignacio, 94 Phil., 182;50 Off. Gaz., 108, and Roque vs. Malibay, L-8561, Nov. 18, 1955, that the registeredowner of a public service vehicle is responsible for damages that may be caused to any of the passengers therein, even if the said vehicle had already been sold, leased ortransferred to another person who was, at the time of the accident, actually operating thevehicle. This principle was also reafirmed in the case of Erezo vs. Jepte, 102 Phil., 103.The reason given by us for the above liability imposed upon the registered owner of thevehicle under a certificate of public convenience is as follows:



". . . we hold with the trial court that the law does not allow him to do so; thelaw, with its aim and policy in mind, does not relieve him directly of the responsibilitythat the law fixes and places upon him as an incident or consequence of registration.Were a registered owner allowed to evade responsibility by proving who the supposedtransferre or owner is, it would be easy for him by collusion with others or otherwise,to escape said responsibility and transfer the same to an indefinite person, or to onewho possesses no property with which to respond financially for the damage or injurydone. A victim of recklessness on the public highways is usually without means todiscover or identify the person actually causing the injury or damage. He has nomeans other than by a recourse to the registration in the Motor Vehicles Office todetermine who is the owner. The protection that the law aims to extend to him wouldbecome illusory were the registered owner given the opportunity to escape liability bydisproving his ownership. If the policy of the law is to be enforced and carried out,the registered owner should not be allowed to prove the contrary to the prejudice of the person injured, that is, to prove that a third person or another has become theowner, so that he may thereby be relieved of the responsibility to the injured."(Erezo vs. Jepte, supra ).

The decision of the Court of Appeals is alsoo attacked insofar as it holdds thatinasmuch as the third-party defendant had used the truck on a route not covered by theregistered owner's franchise, both the registered owner and the actual owner andoperator should be considered as joint tortfeasors and should be made liable inaccordance with Article 2194 of the Civil Code. This Article is as follows:

"Art. 2194.The responsibility of two or more persons who are liable for a quasi-delict is solidary."

But the action instituted in the case at bar is one for breach of contract, for failureof the defendant to carry safety the deceased to her destination. The liability for which heis made responsible, i. e., for the death of the passenger, may not be considered as

arising from a quasi-delict. As the registered ownerTamayo and his tranferee Rayos maynot be held guilty of tort or a quasi-delict; their responsibility is not solidary as held by theCourt of Appeals.

The question that poses, therefore, is how should the holder of the certificate of public convenience Tamayo participate with his transferee, operator Rayos, in thedamages recoverable by the heirs of the deceased passenger, if their liability is not that of

joint tortfeasors in accordance with Article 2194 of the Civil Code. The followingconsiderations must be borne in mind in determining this question. As Tamayo is theregistered owner of the truck, his responsibility to the public or to any passenger riding in

the vehicle or truck must be direct, for the reasons given in our decision in the case of Erezo vs. Jepte, supra , as quoted above. But as the transferee, who operated the vehiclewhen the passenger died, is the one directly responsible for the accident and death heshould in turn be made responsible to the registered owner for what the latter may havebeen adjudged to pay. In operating the truck without transfer thereof having beenapproved by the Public Service Commission, the transferee acted merely as agent of theregistered owner and should be responsible to him (the registered owner), for anydamages that he may cause the latter by his negligence.



In the case at bar, the court found, furthermore, that inspite of the fact that theagreement between Tamayo and Rayos was for Rayos to use the truck in carrying of gasoline, the latter used the same in transporting passengers outside the route covered bythe franchise of Tamayo. For this additional reason, the agent or Rayos must be heldresponsible to the registered owner, to the extent that the latter may suffer damage byreason of the death caused during the accident. The responsibility of the transferee wasalready adverted to by us in the case of Erezo vs. Jepte, supra , when we held expressly.

"In synthesis, we hold that the registered owner, the defendant appellantherein, is primarily responsible for the damage caused to the vehicle of the plaintiff-appellee, but he (defendant-appellant) has a right to be indemnified by the real oractual owner of the amount that he may be required to pay as damage for the injurycaused to the plaintiff-appellant." (Erezo vs. Jepte, supra .)

We hereby affirm that the responsibility of the transferee of the public vehicle be asabove denied.

The procedural means by which the liability of the transferee to the holder of thecertificate should be enforced is that indicated by us in the above-quoted portion of the

case of Erezo vs. Jepte. This procedure was adopted by Tamayo, the defendant herein,when he presented third-party complaint against Rayos. The courts below should not havedismissed this third-party complaint, and should have adjudged the responsibility to makeindemnity in accordance therewith. The transferee is liable to indemnify the registeredowner for the damages that the latter may be required to pay for the accident, hence theremedy is by third-party complaint (See Rule 12, Rules of Court).

We now come to the question of the damages that the Court of Appeals and theCourt of First Instance awarded to the plaintiffs. The actual or compensatory damage of

P6,000 is not seriously questioned by any of the defendants, but the award of P5,000 asmoral damages is questioned by them in this appeal. We agree with the appellants that asthe responsibility of Tamayo and his agent Rayos is culpa-contractual , no award of moraldamages can be given. The law on this matter is expressed in Article 2220 of the CivilCode, which provides:

"Willful injury to property may be a legal ground for awarding moral damages if the court should find that, under the circumstances, such damages are justly due. Thesame rule applies to breaches of contract where the defendant acted fraudulently orin bad faith."

Both the Court of First Intance and the Court of Appeals considered the violation of the rules of the Public Service Commission prohibiting transfer of public vehicles withoutapproval by the Commission as justifying the award of moral damages. We believe thatboth courts erred. The law expressly provides that award of moral damages can be madein a suit for breach of contract only when the defendants acted fraudulently or in badfaith. We do not believe that the holder of the certificate, defendant Tamayo, was guilty of fraud or bad faith. There appears to be no fraud at all in the transfer. Transfers areprohibited only if made without approval by the Public Service Commission. There mayhave been a violation of the regulations because Tamayo did not secure a previousauthority to transfer from said Commission, but he actually applied for and obtained said



permission or approval about a month after the accident. Besides, the truck wastransferred to Rayos with the understanding that the same was not to be used as a publicconvenience, so that insofar as Tamayo is concerned, there could have been no shade ortint of bad faith at all. Consequently, the ground upon which moral damages may bedemanded from him by the plaintiffs does not exist.

Neither can wee find that there was fraud or bad faith committed on the part of thetransferee or agent. There may have been a breach of the agreementbetween Tamayo and Rayos, but this was not the immediate cause of the accident. It wasthe negligence of the driver. What the law would seem to consider as bad faith which mayfurnish a ground for the award of moral damages in the case at bar would be bad faith inthe securing and in the execution of the contract and in the enforcement of its terms(Article 1338, Civil Code), or any other kind of deceit which may have been used by bothdefendants. None can be said to have been present in the case at bar. There was no badfaith on the part of the agent Rayos, there was negligence of the driver employed by him,but this is certainly not bad faith on defendants' part contemplated by law.

For the foregoing considerations, the judgment appealed from is hereby modified, in

that the defendant-appellant Tamayo is hereby ordered to pay to the plaintiff-appelleesthe sum of P6,000 as compensatory damages for the death of the deceased, but that he(Tamayo) has the right to be indemnified by third-party defendant-appellant Rayos of theamount he is hereby ordered to pay. With costs against appellants.

AIR FRANCE, petitioner , vs. RAFAEL CARRASCOSO and THEHONORABLE COURT OF APPEALS, respondents .

Lichauco, Picazo & Agcaoili for petitioner.

Bengzon, Villegas & Zarraga for respondent R. Carrascoso.

SYLLABUS

1.JUDGMENT; FINDINGS OF FACT; REQUIREMENT OF LAW. — Courts of justice are notburdened with the obligation to specify in the sentence every bit and piece of evidencepresented by the parties upon the issues raised. The law solely insists that a decision statethe "essential ultimate facts" upon which the court's conclusion is drawn.

2.ID.; ID.; ID.; APPEAL AND ERROR; FAILURE TO MAKE FINDINGS ON EVIDENCE ANDCONTENTIONS OF ONE PARTY, EFFECT OF; DECISION NOT TO BE CLOGGED WITHDETAILS. — The mere failure to make specific findings of fact on the evidence presented forthe defense or to specify in the decision the contentions of the appellant and the reasons forrefusing to believe them is not sufficient to hold the same contrary to the requirement of thelaw and the Constitution. There is no law that so requires. A decision is not to be cloggedwith details such that prolixity, if not confusion, may result.



3.ID.; ID.; ID.; FINDINGS OF FACT BY COURTS DEFINED. — Findings of fact may be definedas the written statement of the ultimate facts as found by the court and essential to supportthe decision and judgment rendered thereon; they consist of the court's "conclusions withrespect to the determinative facts on issue."

4.ID.; ID.; ID.; QUESTION OF LAW EXPLAINED. — A question of law is "one which does notcall for an examination of the probative value of the evidence presented by the parties."

5.PLEADING AND PRACTICE; APPEAL; WHAT MAY BE RAISED ON APPEAL FROM COURT OF APPEALS. — It is not appropriately the business of the Supreme Court to alter the facts or toreview the questions of fact because, by statute, only questions of law may be raised in anappeal by certiorari from a judgment of the Court of Appeals, which judgment is conclusiveas to the facts.

6.ID.; ID.; EFFECT OF AFFIRMANCE BY COURT OF APPEALS OF TRIAL COURT'S DECISION. — When the Court of Appeals affirms a judgment of the trial court, and the findings of fact of said appellate court are not in any way at war with those of the trial court, nor is said

affirmance upon a ground or grounds different from those which were made the basis of thetrial court's conclusions, such judgment of affirmance is (1) a determination by the Court of

Appeals that the proceeding in the lower court was free from prejudicial error; (7) that allquestions raised by the assignments of error and all questions that might have been so raisedhave been finally adjudicated as free from all error.

7.ID.; COMPLAINT; SPECIFIC MENTION OF THE TERM "BAD FAITH" IN THE COMPLAINTNOT REQUIRED. — Although there is no specific mention of the term bad faith in thecomplaint, the inference of bad faith may be drawn from the facts and circumstances setforth therein. 8. EVIDENCE; FINDING OF COURT OF APPEALS THAT RESPONDENT WAS

ENTITLED TO A FIRST CLASS SEAT. —

The Court of Appeals properly found that a first class-ticket holder is entitled to first class seat, given the fact that seat availability in specific flightsis therein confirmed; otherwise, an air passenger will be placed in the hollow of the hands of an airline, because it will always be easy for an airline to strike out the very stipulations in theticket and say that there was verbal agreement to the contrary. If only to achieve stability inthe relations between passenger and air carrier, adherence to the ticket so issued isdesirable.

9.ID.; LACK OF SPECIFIC AVERMENT OF BAD FAITH CURED BY NOTICE TO DEFENDANT OFWHAT PLAINTIFF INTENDS TO PROVE AND BY EVIDENCE PRESENTED WITHOUTOBJECTION; AMENDMENT OF COMPLAINT TO CONFORM TO EVIDENCE UNNECESSARY.

—If

there was lack of specific averment of bad faith in the complaint, such deficiency was curedby notice, right at the start of the trial, by plaintiff's counsel to defendant as to what plaintiff intended to prove: while in the plane in Bangkok, plaintiff was ousted by defendant'smanager who gave his seat to a white man; and by evidence of bad faith in the fulfillment of the contract presented without objection on the part of the defendant. An amendment of thecomplaint to conform to the evidence is not even required.



10.ID.; ADMISSIBILITY OF TESTIMONY ON AN ENTRY IN A NOTEBOOK; TESTIMONY NOTCOVERED BY BEST EVIDENCE RULE. — The testimony of a witness that the purser made anentry in his notebook reading "First Class passenger was forced to go to the tourist classagainst his will and that the captain refused to intervene," is competent and admissiblebecause the subject of the inquiry is not the entry but the ouster incident. It does not comewithin the prescription of the best evidence rule.

11.CONTRACT OF CARRIAGE; QUASI-DELICT; LIABILITY OF COMMON CARRIERS; CASE ATBAR. — Neglect or malfeasance of the carrier's employees could give ground for an action fordamages. Damages here are proper because the stress of respondent's action is placed uponhis wrongful expulsion, which is a violation of a public duty by petitioner- aircarrier — a caseof quasi-delict.

12.ID.; ID.; ID.; AWARD OF MORAL DAMAGES FOR BREACH OF CONTRACT. — Award of moral damages is proper, despite petitioner's argument that respondent's action is plantedupon breach of contract, where the stress of the action is put on wrongful expulsion, thecontract having been averred only to establish the relation between the parties.

13.ID.; ID.; ID.; EMPLOYER IS RESPONSIBLE FOR TORTIOUS ACTS OF HIS EMPLOYEE;CASE AT BAR. — The responsibility of an employer for the tortious act of his employees iswell settled in law. (Art. 2130, Civil Code). Petitioner-aircarrier must answer for the willful,malevolent act of its manager.

14.ID.; ID.; ID.; LIABILITY FOR EXEMPLARY DAMAGES; POWER OF COURTS TO GRANT;CASE AT BAR. — The Civil Code gives the court ample power to grant exemplary damages,the only condition being that defendant should have "acted in a wanton, fraudulent, reckless,oppressive, or malevolent manner." As the manner of ejectment of plaintiff from his first class

seat fits into this legal precept, exemplary damages are well awarded, in addition to moraldamages.

15.ID.; ID.; LIABILITY FOR ATTORNEY'S FEES; COURT DISCRETION WELL EXERCISEDSHOULD NOT BE DISTURBED. — The grant of exemplary damages justifies a similar

judgment for attorney's fees. The court below felt that it is but just and equitable thatattorney's fees be given and the Supreme Court does not intend to break faith with thetradition that discretion well-exercised — as it is here should not be disturbed.

16.ID.; RIGHTS OF PASSENGERS. — Passengers do not contract merely for transportation.

They have a right to be treated by the carrier's employees with kindness, respect, courtesyand due consideration. They are entitled to be protected against personal misconduct,injurious language, indignities and abuses from such employees. So, any rude or discourteousconduct on the part of employees towards a passenger gives the latter an action for damagesagainst the carrier. (4 R. C. L-1174-1175).

17.ID.; BREACH OF CONTRACT MAY BE A TORT. — Although the relation of passenger andcarrier is contractual both in origin and nature, nevertheless, the act that breaks the contractmay also be a tort.



18.WORDS AND PHRASES; BAD FAITH DEFINED. — "Bad faith", as understood in law,contemplates a state of mind affirmatively operating with furtive design or with some motiveof self-interest or ill will or for ulterior purpose

D E C I S I O N

SANCHEZ, J p:

The Court of First Instance of Manila 1 sentenced petitioner to pay respondentRafael Carrascoso P25,000.00 by way of moral damages; P10,000.00 as exemplary damages;P393.20 representing the difference in fare between first class and tourist class for theportion of the trip Bangkok-Rome, these various amounts with interest at the legal rate, fromthe date of the filing of the complaint until paid; plus P3,000.00 for attorneys' fees; and thecosts of suit.

On appeal, 2 the Court of Appeals slightly reduced the amount of refundon Carrascoso's plane ticket from P393.20 to P383.10, and voted to affirm the appealeddecision "in all other respects", with costs against petitioner.

The case is now before us for review on certiorari.

The facts declared by the Court of Appeals as "fully supported by the evidence of record",are:

"Plaintiff, a civil engineer, was a member of a group of 48 Filipino pilgrims that left

Manila for Lourdes on March 30, 1958.

On March 28, 1958, the defendant, Air France, through its authorized agent,Philippine Air Lines, Inc., issued to plaintiff a 'first class' round trip airplane ticket fromManila to Rome. From Manila to Bangkok, plaintiff traveled in 'first class', but atBangkok, the Manager of the defendant airline forced plaintiff to vacate the 'first class'seat that he was occupying because, in the words of the witness Ernesto G. Cuento,there was a 'white man', who, the Manager alleged, had a 'better right to the seat.When asked to vacate his 'first class' seat, the plaintiff, as was to be expected,refused, and told defendant's Manager that his seat would be taken over his deadbody; a commotion ensued, and, according to said Ernesto G. Cuento, many of theFilipino passengers got nervous in the tourist class; when they found out thatMr. Carrascoso was having a hot discussion with the white man [manager], they cameall across to Mr. Carrascoso and pacified Mr. Carrascoso to give his seat to the 'whiteman' (Transcript, p. 12, Hearing of May 26, 1959); and plaintiff reluctantly gave his'first class' seat in the plane." 3

1.The thrust of the relief petitioner now seeks is that we review "all the findings" 4 of respondent Court of Appeals. Petitioner charges that respondent court failed to make



complete findings of fact on all the issues properly laid before it. We are asked to considerfacts favorable to petitioner, and then, to overturn the appellate court's decision.

Coming into focus is the constitutional mandate that "No decision shall be rendered by anycourt of record without expressing therein clearly and distinctly the facts and the law on

which it is based". 5 This is echoed in the statutory demand that a judgment determining themerits of the case shall state "clearly and distinctly the facts and the law on which it isbased", 6 and that "Every decision of the Court of Appeals shall contain complete findings of fact on all issues properly raised before it." 7

A decision with absolutely nothing to support it is a nullity. It is open to direct attack. 8 Thelaw, however, solely insists that a decision state the "essential ultimate facts" upon which thecourt's conclusion is drawn. 9 A court of justice is not hidebound to write in its decision everybit and piece of evidence 10 presented by one party and the other upon the issues raised.Neither is it to be burdened with the obligation "to specify in the sentence the facts" which a

party "considered as proved ". 11 This is but a part of the mental process from which theCourt draws the essential ultimate facts. A decision is not to be so clogged with details suchthat prolixity, if not confusion, may result. So long as the decision of the Court of Appealscontains the necessary facts to warrant its conclusions, it is no error for said court to withholdtherefrom "any specific finding of facts with respect to the evidence for the defense".Because, as this Court well observed, "There is no law that so requires". 12 Indeed, "themere failure to specify (in the decision) the contentions of the appellant and the reasons forrefusing to believe them is not sufficient to hold the same contrary to the requirements of theprovisions of law and the Constitution". It is in this setting that in Manigque , it was held thatthe mere fact that the findings "were based entirely on the evidence for the prosecution

without taking into consideration or even mentioning the appellant's side in the controversyas shown by his own testimony", would not vitiate the judgment. 13 If the court did not recitein the decision the testimony of each witness for, or each item of evidence presented by, thedefeated party, it does not mean that the court has overlooked such testimony or such itemof evidence. 14 At any rate, the legal presumptions are that official duty has been regularlyperformed, and that all the matters within an issue in a case were laid before the court andpassed upon by it.15

Findings of fact, which the Court of Appeals is required to make, may be defined as "thewritten statement of the ultimate facts as found by the court . . . and essential to support thedecision and judgment rendered thereon". 16 They consist of the court's "conclusions withrespect to the determinative facts in issue " 17 A question of law, upon the other hand, hasbeen declared as "one which does not call for an examination of the probative value of theevidence presented by the parties." 18

2.By statute, "only questions of law may be raised" in an appeal by certiorari from a judgment of the Court of Appeals 19 That judgment is conclusive as to the facts. It is notappropriately the business of this Court to alter the facts or to review the questions of fact. 20



With these guideposts, we now face the problem of whether the findings of fact of the Courtof Appeals support its judgment.

3.Was Carrascoso entitled to the first class seat he claims?

It is conceded in all quarters that on March 28, 1958 he paid to and received from petitionera first class ticket. But petitioner asserts that said ticket did not represent the true and

complete intent and agreement of the parties; that said respondent knew that he did nothave confirmed reservations for first class on any specific flight, although he had tourist classprotection; that, accordingly, the issuance of a first class ticket was no guarantee that hewould have a first class ride, but that such would depend upon the availability of first classseats.

These are matters which petitioner has thoroughly presented and discussed in its brief beforethe Court of Appeals under its third assignment of error, which reads: "The trial court erred infinding that plaintiff had confirmed reservations for, and a right to, first class seats on the'definite' segments of his journey, particularly that from Saigon to Beirut." 21

And, the Court of Appeals disposed of this contention thus:

"Defendant seems to capitalize on the argument that the issuance of a first-classticket was no guarantee that the passenger to whom the same had been issued,would be accommodated in the first-class compartment, for as in the case of plaintiff he had yet to make arrangements upon arrival at every station for the necessary firstclass reservation. We are not impressed by such a reasoning. We cannot understandhow a reputable firm like defendant airplane company could have the indiscretion togive out ticket it never meant to honor at all. It received the corresponding amount inpayment of first-class tickets end yet it allowed the passenger to be at the mercy of its employees. It is more in keeping with the ordinary course of business that thecompany should know whether or not the tickets it issues are to be honored or not."22

Not that the Court of Appeals is alone. The trial court similarly disposed of petitioner'scontention, thus:

"On the fact that plaintiff paid for, and was issued a 'First class ticket, there can be noquestion. Apart from his testimony, see plaintiffs Exhibits 'A', 'A-1' 'B', 'B-1', 'B-2', 'C'and 'C-1', and defendant's own witness, Rafael Altonaga, confirmed plaintiff's

testimony and testified as follows:

Q.In these tickets there are marks 'O.K.' From what you know, what doesthis O.K. mean?

A.That the space is confirmed.

Q.Confirmed for first class?

A.Yes, 'first class'. (Transcript, p. 169)



xxx xxx xxx

"Defendant tried to prove by the testimony of its witnesses Luis Zaldariaga and Rafael Altonaga that although plaintiff paid for, and was issued a 'first class' airplane ticket,the ticket was subject to confirmation in Hongkong. The court cannot give credit tothe testimony of said witnesses. Oral evidence cannot prevail over written evidence,and plaintiff's Exhibits 'A', 'A1', 'B', 'B-1', 'C' and 'C- 1' belie the testimony of saidwitnesses, and clearly show that the plaintiff was issued, and paid for, a first classticket without any reservation whatever.

Furthermore, as hereinabove shown, defendant's own witness Rafael Altonagatestified that the reservation for a 'first class' accommodation for the plaintiff wasconfirmed. The court cannot believe that after such confirmation ,defendant had averbal understanding with plaintiff that the 'first class' ticket issued to him bydefendant would be subject to confirmation in Hongkong." 23

We have heretofore adverted to the fact that except for a slight difference of a few pesos inthe amount refunded on Carrascoso's ticket, the decision of the Court of First Instance was

affirmed by the Court of Appeals in all other respects . We hold the view that such a judgmentof affirmance has merged the judgment of the lower court. 24 Implicit in that affirmance is adetermination by the Court of Appeals that the proceeding in the Court of First Instance wasfree from prejudicial error and that 'all questions raised by the assignments of error and allquestions that might have been so raised are to be regarded as finally adjudicated againstthe appellant". So also, the judgment affirmed "must be regarded as free from allerror" 25 We reached this policy construction because nothing in the decision of the Court of

Appeals on this point would suggest that its findings of fact are in any way at war with thoseof the trial court. Nor was said affirmance by the Court of Appeals upon a ground or groundsdifferent from those which were made the basis of the conclusions of the trial court. 26

If, as petitioner underscores, a first-class-ticket holder is not entitled to a first class seat,notwithstanding the fact that seat availability in specific flights is therein confirmed, thenan air passenger is placed in the hollow of the hands of an airline. What security then can apassenger have? It will always be an easy matter for an airline aided by its employees, tostrike out the very stipulations in the ticket, and say that there was a verbal agreement to thecontrary. What if the passenger had a schedule to fulfill? We have long learned that, as arule, a written document speaks a uniform language; that spoken word could be notoriouslyunreliable. If only to achieve stability in the relations between passenger and air carrier,adherence to the ticket so issued is desirable. Such is the case here. The lower courts refusedto believe the oral evidence intended to defeat the covenants in the ticket.

The foregoing are the considerations which point to the conclusion that there are facts uponwhich the Court of Appeals predicated the finding that respondentCarrascoso had a first classticket and was entitled to a first class seat at Bangkok, which is a stopover in the Saigon toBeirut leg of the flight, 27 We perceive no "welter of distortions by the Court of Appeals of petitioner's statement of its position", as charged by petitioner. 28 Nor do we subscribe topetitioners accusation that respondent Carrascoso "surreptitiously took a first class seat toprovoke an issue". 29 And this because, as petitioner states, Carrascoso went to see the



Manager at his office in Bangkok "to confirm my seat and because from Saigon I was toldagain to see the Manager. 30 Why, then, was he allowed to take a first class seat in the planeat Bangkok, if he had no seat? Or, if another had a better right to the seat?

4.Petitioner assails respondent court's award of moral damages. Petitioner's trenchant claimis that Carrascoso's action is planted upon breach of contract; that to authorize an award formoral damages there must be an averment of fraud or bad faith; 31 and that the decision of

the Court of Appeals fails to make a finding of bad faith. The pivotal allegations in thecomplaint bearing on this issue are:

"3.That . . . plaintiff entered into a contract of air carriage with the Philippine Air Linesfor a valuable consideration, the latter acting as general agents for and in behalf of the defendant, under which aid contract, plaintiff was entitled to, as defendant agreedto furnish plaintiff, First Class passage on defendant's plane during the entire durationof plaintiff's tour of Europe with Hongkong as starting point up to and until plaintiff's

return trip to Manila, . . .

4.That during the first two legs of the trip from Hongkong to Saigon and from Saigonto Bangkok, defendant furnished to the plaintiff First Class accommodation but onlyafter protestations, arguments and/or insistence were made by the plaintiff withdefendant's employees.

5.That finally, defendant failed to provide First Class passage, but instead furnishedplaintiff only Tourist Class accommodations from Bangkok to Teheran and/orCasablanca, . . . the plaintiff has been compelled by defendant's employees to leavethe First Class accommodation berths at Bangkok after he was already seated .

6.That consequently, the plaintiff, desiring no repetition of the inconvenience andembarrassments brought by defendant's breach of contract was forced to take a Pan

American World Airways plane on his return trip from Madrid to Manila. 32

xxx xxx xxx

2.That likewise, as a result of defendant's failure to furnish First Classaccommodations aforesaid, plaintiff suffered inconveniences, embarrassments, andhumiliations, thereby causing plaintiff mental anguish, serious anxiety, woundedfeelings, social humiliation, and the like injury, resulting in moral damages in the

amount of P30,000.00." 33

xxx xxx xxx

The foregoing, in our opinion, substantially aver: First , That there was a contract to furnishplaintiff a first class passage covering, amongst others, the Bangkok-Teheran leg; Second ,That said contract was breached when petitioner failed to furnish first class transportation atBangkok; and Third , That there was bad faith when petitioner's employeecompelled Carrascoso to leave his first class accommodation berth "after he was already



seated " and to take a seat in the tourist class, by reason of which he suffered inconvenience,embarrassments and humiliations, thereby causing him mental anguish, serious anxiety,wounded feelings and social humiliation, resulting in moral damages. It is true that there isno specific mention of the term bad faith in the complaint. But, the inference of bad faith isthere; it may be drawn from the facts and circumstances set forth therein. 34 The contractwas averred to establish the relation between the parties. But the stress of the action is puton wrongful expulsion.

Quite apart from the foregoing is that (a) right at the start of the trial, respondent's counselplaced petitioner on guard on what Carrascoso intended to prove: That while sitting in theplane in Bangkok, Carrascoso was ousted by petitioner's manager who gave his seat to awhite man; 35 and (b) evidence of bad faith in the fulfillment of the contract was presentedwithout objection on the part of the petitioner. It is, therefore, unnecessary to inquire as towhether or not there is sufficient averment in the complaint to justify an award for moraldamages. Deficiency in the complaint, if any, was cured by the evidence. An amendmentthereof to conform to the evidence is not even required. 36 On the question of bad faith, theCourt of Appeals declared:

"That the plaintiff was forced out of his seat in the first class compartment of theplane belonging to the defendant Air France while at Bangkok, and was transferred tothe tourist class not only without his consent but against his will, has been sufficientlyestablished by plaintiff in his testimony before the court, corroborated by thecorresponding entry made by the purser of the plane in his notebook which notationreads as follows:

'First-class passenger was forced to go to the tourist class against hiswill and that the captain refused to intervene',

and by the testimony of an eye-witness Ernesto G. Cuento, who was a co-passenger. The captain of the plane who was asked by the manager of defendant company at Bangkok to intervene even refused to do so. It isnoteworthy that no one on behalf of defendant ever contradicted or denied thisevidence for the plaintiff. It could have been easy for defendant to present itsmanager at Bangkok to testify at the trial of the case, or yet to secure hisdeposition; but defendant did neither. 37

The Court of Appeals further stated —

"Neither is there evidence as to whether or ,not a prior reservation was made by thewhite man. Hence, if the employees of the defendant at Bangkok sold a first-classticket to him when all the seats had already been taken, surely the plaintiff should nothave been picked out as the one to suffer the consequences and to be subjected tothe humiliation and indignity of being ejected from his seat in the presence of others.Instead of explaining to the white man the improvidence committed by defendant'semployees, the manager adopted the more drastic step of ousting the plaintiff whowas then safely ensconced in his rightful seat. We are strengthened in our belief thatthis probably was what happened there, by the testimony of defendant's witnessRafael Altonaga who, when asked to explain the meaning of the letters 'O.K.,appearing on the tickets of plaintiff, said that 'the space is confirmed' for first class.



Likewise, Zenaida Faustino, another witness for defendant, who was the chief of theReservation Office of defendant, testified as follows:

'Q.How does the person in the ticket-issuing office know what reservationthe passenger has arranged with you?

A.They call us up by phone and ask for the confirmation.' (t.s.n., p. 247,June 19, 1959)

In this connection, we quote with approval what the trial Judge has said on this point:

'Why did the, using the words of witness Ernesto G. Cuento, 'white man' have a'better right' to the seat occupied by Mr. Carrascoso? The record is silent. Thedefendant airline did not prove 'any better', nay, any right on the part of the 'whiteman' to the 'First class' seat that the plaintiff was occupying and for which he paidand was issued a corresponding 'first class' ticket.

'If there was a justified reason for the action of the defendant's Manager in Bangkok,

the defendant could have easily proven it by having taken the testimony of the saidManager by deposition, but defendant did not do so; the presumption is that evidencewillfully suppressed would be adverse if produced [Sec. 69, par. (e) Rules of Court];and, under the circumstances, the Court is constrained to find, as it does find, thatthe Manager of the defendant airline in Bangkok not merely asked but threatened theplaintiff to throw him out of the plane if he did not give up his 'first class' seatbecause the said Manager wanted to accommodate using the words of the witnessErnesto G. Cuento, the 'white man'." 38

It is really correct to say that the Court of Appeals in the quoted portion first transcribed didnot use the term "bad faith". But can it be doubted that the recital of facts therein points tobad faith? The manager not only prevented Carrascoso from enjoying his right to a first classseat; worse, he imposed his arbitrary will; he forcibly ejected him from his seat, made himsuffer the humiliation of having to go to the tourist class compartment — just to give way toanother passenger whose right thereto has not been established. Certainly, this is bad faith.Unless, of course, bad faith has assumed a meaning different from what is understood in law.For, "bad faith" contemplates a "state of mind affirmatively operating with furtive design orwith some motive of self-interest or ill will or for ulterior purposes." 39

And if the foregoing were not yet sufficient, there is the express finding of bad faith in the

judgment of the Court of First Instance, thus:

"The evidence shows that defendant violated its contract of transportation withplaintiff in bad faith, with the aggravating circumstances that defendant's Manager inBangkok went to the extent of threatening the plaintiff in the presence of manypassengers to have him thrown out of the airplane to give the 'first class' seat that hewas occupying to, again using the words of witness Ernesto G. Cuento, a 'white man'whom he (defendant's Manager) wished to accommodate, and the defendant has notproven that this 'white man' had any 'better right' to occupy the 'first class' seat that



the plaintiff was occupying, duly paid for, and for which the corresponding 'first class'ticket was issued by the defendant to him." 40

5.The responsibility of an employer for the tortuous act of its employees-need not beessayed. It is well settled in law. 41 For the willful malevolent act of petitioner's manager,petitioner's his employer, must answer. Article 21 of the Civil Code says:

"Art. 21.Any person who willfully causes loss or injury to another in a manner that iscontrary to morals, good customs or public policy shall compensate the latter for thedamage."

In parallel circumstances, we applied the foregoing legal precept; and, we held that upon theprovisions of Article 2219 (10), Civil Code, moral damages are recoverable. 42

6.A contract to transport passengers is quite different in kind and degree from any othercontractual relation. 43 And this, because of the relation which an air-carrier sustains with thepublic. Its business is mainly with the travelling public. It invites people to avail of thecomforts and advantages it offers. The contract of aircarriage, therefore, generates a relationattended with a public duty. Neglect or malfeasance of the carrier's employees, naturally,could give ground for an action for damages.

Passengers do not contract merely for transportation. They have a light to be treated by thecarrier's employees with kindness, respect, courtesy and due consideration. They are entitledto be protected against personal misconduct, injurious language, indignities and abuses fromsuch employees. So it is, that any rude or discourteous conduct on the part of employeestowards a passenger gives the latter an action for damages against the carrier. 44

Thus, "Where a steamship company 45 had accepted a passenger's check, it was a breach of contract and a tort, giving a right of action for its agent in the presence of third persons tofalsely notify her that the check was worthless and demand payment under threat of ejection,though the language used was not insulting and she was not ejected. 46 And this, because,altho the relation of passenger and carrier is "contractual both in origin and nature"nevertheless "the act that breaks the contract may be also a tort". 47 And in another case,"Where a passenger on a railroad train, when the conductor came to collect his fare,tendered him the cash fare to a point where the train was scheduled not to stop, and told

him that as soon as the train reached such point he would pay the cash fare from that pointto destination, there was nothing in the conduct of the passenger which justified theconductor in using insulting language to him, as by calling him a lunatic," 48 and theSupreme Court of South Carolina there held the carrier liable for the mental suffering of saidpassenger.

Petitioner's contract with Carrascoso is one attended with public duty. The stressof Carrascoso's action as we have said, is placed upon his wrongful expulsion. This is aviolation of public duty by the petitioner-air carrier — a case of quasi-delict. Damages areproper.

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7.Petitioner draws our attention to respondent Carrascoso's testimony, thus —

"Q.You mentioned about an attendant. Who is that attendant and purser?

A.When we left already — that was already in the trip — I could not helpit. So one of the flight attendants approached me and requestedfrom me my ticket and I said, What for? and she said, 'We will notethat you were transferred to the tourist class'. I said, 'Nothing of that kind. That is tantamount to accepting my transfer.' And I alsosaid, You are not going to note anything there because I amprotesting to this transfer.

Q.Was she able to note it?

A.No, because I did not give my ticket.

Q.About that purser?

A.Well, the seats there are so close that you feel uncomfortable and youdon't have enough leg room, I stood up and I went to the pantrythat was next to me and the purser was there. He told me, 'I haverecorded the incident in my notebook.' He read it and translated itto me — because it was recorded in French — 'First classpassenger was forced to go to the tourist class against his will, andthat the captain refused to intervene.'

MR. VALTE —

I move to strike out the last part of the testimony of the witness because

the best evidence would be the notes. Your Honor.

COURT —

I will allow that as part of his testimony." 49

Petitioner charges that the finding of the Court of Appeals that the purser made an entry inhis notebooks reading "First class passenger was forced to go to the tourist class against hiswill, and that the captain refused to intervene" is predicated upon evidence[Carrascoso's testimony above] which is incompetent. We do not think so. The subject of

inquiry is not the entry, but the ouster incident. Testimony of the entry does not come withinthe proscription of the best evidence rule. Such testimony is admissible. 49

Besides, from a reading of the transcript just quoted, when the dialogue happened, theimpact of the startling occurrence was still fresh and continued to be felt. The excitement hadnot as yet died down. Statements then, in this environment, are admissible as part of the res gestae . 50 For, they grow "out of the nervous excitement and mental and physical conditionof the declarant". 51 The utterance of the purser regarding his entry in the notebook wasspontaneous, and related to the circumstances of the ouster incident. Its trustworthiness has



been guaranteed. 52 It thus escapes the operation of the hearsay rule. It forms part of the res gestae .

At all events, the entry was made outside the Philippines. And, by an employee of petitioner.It would have been an easy matter for petitioner to have contradictedCarrascoso's testimony.If it were really true that no such entry was made, the deposition of the purser could havecleared up the matter.

We, therefore, hold that the transcribed testimony of Carrascoso is admissible in evidence.

8.Exemplary damages are well awarded. The Civil Code gives the Court ample power to grantexemplary damages — in contracts and quasi-contracts. The only condition is that defendantshould have "acted in a wanton, fraudulent, reckless, oppressive, or malevolentmanner". 53 The manner of ejectment of respondentCarrascoso from his first class seat fitsinto this legal precept. And this, in addition to moral damages. 54

9.The right to attorneys' fees is fully established. The grant of exemplary damages justifies a

similar judgment for attorneys' fees. The least that can be said is that the courts below feltthat it is but just and equitable that attorneys' fees be given. 55 We do not intend to break faith with the tradition that discretion well exercised — as it was here —should not bedisturbed.

10.Questioned as excessive are the amounts decreed by both the trial court and the Court of Appeals, thus: P25,000.00 as moral damages; P10,000.00, by way of exemplary damages,and P3,000.00 as attorney's fees. The task of fixing these amounts is primarily with the trial-court. 56 The Court of Appeals did not interfere with the same. The dictates of good sensesuggest that we give our imprimatur thereto. Because, the facts and circumstances point to

the reasonableness thereof.57

On balance, we say that the judgment of the Court of Appeals does not suffer from reversibleerror. We accordingly vote to affirm the same. Costs against petitioner. So ordered.

NORTHWEST AIRLINES, INC., petitioner , vs . NICOLAS L. CUENCA andCOURT OF APPEALS (SPECIAL SIXTH DIVISION), respondents .

Ross, Selph & Carrascoso for petitioner.

Bengzon, Villegas & Zarraga for respondents.

SYLLABUS

1.AIR CARRIERS; LIABILITY UNDER THE WARSAW CONVENTION OF 1929 AND FOR OTHER BREACHES OF CONTRACT. — Articles 17, 18 and 19 of the Warsaw Convention of 1929merely declare the airlines liable for damage in the cases enumerated therein, if the



conditions specified are present. Neither the provisions of said articles nor others regulate orexclude liability for other breaches of contract by the air carriers.

2.ID.; ID.; ID.; LIABILITY FOR NOMINAL AND EXEMPLARY DAMAGES; CASE AT BAR. — Respondent boarded petitioner's plane in Manila with a first class ticket to Tokyo. Upon arrivalat Okinawa, an agent of petitioner rudely compelled him, in the presence of otherpassengers, to move to the tourist class. Respondent protested, revealing that he was

traveling in his official capacity as delegate of the Republic of the Philippines to a conferencein Tokyo. In order to reach the conference on time, respondent obeyed. Held: Having beengiven first class accommodation as he took petitioner's plane in Manila, respondent wasentitled to believe that this was a confirmation of his first class reservation and that he wouldkeep the same until his ultimate destination, Tokyo. Since the offense had been committedwith full knowledge of the fact that respondent was an official representative of the Republicof the Philippines, the sum of P20,000.00 awarded as damages may well be considered asmerely nominal. At any rate, considering that petitioners agent had acted in a wanton,reckless and oppressive manner, said award may, also, be considered as one for exemplarydamages.

D E C I S I O N

CONCEPCION, J p:

This is an action for damages for alleged breach of contract. After appropriate proceedingsthe Court of First Instance of Manila, in which the case was originally filed, rendered

judgment sentencing defendant Northwest Airlines, Inc., — hereinafter referred to aspetitioner — to pay to plaintiff Cuenca — hereinafter referred to as respondent — "the sum ofP20,000 as moral damages, together with the sum of P5,000 as exemplary damages, withlegal interest thereon from the date of the filing of the complaint" — December 12, 1959 — "until fully paid, plus the further sum of P2,000 as attorney's fees and expenses of litigation".On appeal taken by petitioner, said decision was affirmed by the Court of Appeals, except asto the P50,000.00 exemplary damages, which was eliminated, and the P20,000.00 award formoral damages, which was converted into nominal damages. The case is now before us onpetition for review by certiorari filed by petitioner, upon the ground that the lower court haserred: (1) in holding that the Warsaw Convention of October 12, 1929, relative to

transportation by air is not in force in the Philippines; (2) in not holding that respondent hasno cause of action; and (3) in awarding P20,000 as nominal damages.

We deem it unnecessary to pass upon the first assignment of error because the same is thebasis of the second assignment of error, and the latter is devoid of merit, even if we assumedthe former to be well taken. Indeed, the second assignment of error is predicated upon

Articles 17, 18 and 19 of said Convention, reading:

"ART. 17.The carrier shall be liable for damage sustained in the event of the death orwounding of a passenger or any other bodily injury suffered by a passenger if the



accident which caused the damage so sustained took place on board the aircraft or inthe course of any of the operations of embarking or disembarking.

"ART. 18.(1)The carrier shall be liable for damage sustained in the event of thedestruction or loss of, or of damage to, any checked baggage, or any goods, if theoccurrence which caused the damage so sustained took place during thetransportation by air.

"(2)The transportation by air within the meaning of the preceding paragraph shallcomprise the period during which the baggage or goods are in charge of the carrier,whether in an airport or on board an aircraft, or, in the case of a landing outside anairport, in any place whatsoever.

"(3)The period of the transportation by air shall not extend to any transportation byland, by sea, or by river performed outside an airport. If, however, suchtransportation takes place in the performance of a contract for transportation by air,for the purpose of loading, delivery, or transshipment, any damage is presumed,subject to proof to the contrary, to have been the result of an event which took place

during the transportation by air.

"ART. 19.The carrier shall be liable for damage occasioned by delay in thetransportation by air of passengers, baggage, or goods."

Petitioner argues that pursuant to these provisions, an air "carrier is liable only" in the eventof death of a passenger or injury suffered by him, or of destruction or loss of, or damage toany checked baggage or any goods, or of delay in the transportation by air of passengers,baggage or goods. This pretense is not borne out by the language of said Articles. The samemerely declare the carrier liable for damages in the enumerated cases, if the conditions

therein specified are present. Neither said provisions nor others in the aforementionedConvention regulate or exclude liability for other breaches of contract by carrier. Underpetitioner's theory, an air carrier would be exempt from any liability for damages in the eventof its absolute refusal, in bad faith, to comply with a contract of carriage, which is absurd.

The third assignment of error is based upon Medina vs. Cresencia (52 Off. Gaz. 4606), andQuijano vs. Philippine Air Lines (CA-G.R. No. 21804). Neither case is, however, in point, asidefrom the fact that the latter is not controlling upon us. In the first case, this Court eliminateda P10,000 award for nominal damages, because the aggrieved party had already beenawarded P6,000 as compensatory damages, P30,000 as moral damages and P10,000 as

exemplary damages, and "nominal damages cannot co-exist with compensatory damages". Inthe case at bar, the Court of Appeals has adjudicated no such compensatory, moral andexemplary damages to respondent herein.

Moreover, there are special reasons why the P20,000.00 award in favor of respondent hereinis justified, even if said award were characterized as nominal damages. When his contract of carriage was violated by the petitioner, respondent held the office of Commissioner of PublicHighways of the Republic of the Philippines. Having boarded petitioner's plane in Manila witha first class ticket to Tokyo, he was, upon arrival at Okinawa, transferred to the tourist classcompartment. Although he revealed that he was traveling in his official capacity as official



delegate of the Republic to a conference in Tokyo, an agent of petitioner rudely compelledhim, in the presence of other passengers, to move, over his objection, to the tourist class,under threat of otherwise leaving him in Okinawa. In order to reach the conference on time,respondent had no choice but to obey.

It is true that said ticket was marked "W/L", but respondent's attention was not calledthereto. Much less was he advised that "W/L" meant "wait listed". Upon the other hand,

having paid the first class fare in full and having been given first class accommodation as hetook petitioner's plane in Manila, respondent was entitled to believe that this was aconfirmation of his first class reservation and that he would keep the same until his ultimatedestination, Tokyo. Then, too, petitioner has not tried to explain or even alleged that theperson to whom respondent's first class seat was given had a better right thereto. In otherwords, since the offense had been committed with full knowledge of the fact that respondentwas an official representative of the Republic of the Philippines, the sum of P20,000 awardedas damages may well be considered as merely nominal. At any rate, considering thatpetitioner's agent had acted in a wanton, reckless and oppressive manner, said award may,also, be considered as one for exemplary damages.

WHEREFORE, the decision appealed from is hereby affirmed, with costs against thepetitioner. It is so ordered.

RAFAEL ZULUETA, ET AL., plaintiffs-appellee , vs . PAN AMERICAN WORLD AIRWAYS INC., defendant-appellant .

Jose W . Diokno & Associates for plaintiffs-appellees.

Ross, Salcedo, Del Rosario, Bito & Misa for defendants appellants.

SYLLABUS

1.REMEDIAL LAW; COURTS OF FIRST INSTANCE; JURISDICTION; ACTIONS SUBJECT OFWHICH IS NOT CAPABLE OF PECUNIARY ESTIMATION IS WITHIN THE JURISDICTION OFCOURTS OF FIRST INSTANCE. — Where the complaint for damages, among others, includesa claim for moral damages, the court of first instance has jurisdiction over the complaint. Aclaim for moral damages is one not susceptible of pecuniary estimation.

2.ID., ID.; ID.; ACTION WHERE COUNTERCLAIM IS P12,000. — Where defendants had setup a counterclaim in the aggregate sum of P12,000, the action is within the original

jurisdiction of the court of first instance, thereby curing the alleged lack of jurisdiction overthe complaint itself.

3.ID.; ID.; ID.; DEFENDANT ESTOPPED FROM IMPUGNING JURISDICTION OF COURT ININSTANT CASE. — Having not only failed to question the jurisdiction of the trial court — either in that court or in this Court, before the rendition of the latter's decision, and evensubsequently thereto, by filing the present motion for reconsideration and seeking the reliefs



therein prayed for — but, also, urged both courts to exercise jurisdiction over the merits of the case, defendant is now estopped from impugning said jurisdiction.

4.CIVIL LAW; DAMAGES; EXEMPLARY DAMAGES, AWARD THEREOF IN QUASI-DELICTSJUSTIFIED WHERE ACT WAS PERFORMED DELIBERATELY AND IN BAD FAITH. — It is urgedby the defendant that exemplary damages are not recoverable in quasi-delicts, pursuant to

Art. 2231 of our Civil Code, except when the defendant has acted with "gross negligence,"

and that there is no specific finding that it had so acted. It is obvious, however, that in off-loading plaintiff at Wake Island, for having dared to retort to defendant's agent in a tone andmanner matching, if not befitting his intemperate language and arrogant attitude,defendant's agents had acted with malice aforethought and evident bad faith, If "grossnegligence" warrants the award of exemplary damages, with more reason is its imposition

justified when the act performed is deliberate, malicious and tainted with bad faith.

5.ID.; ID.; ID.; SUBSIDIARY LIABILITY THEREFOR OF PRINCIPAL FOR ACTS OF AGENTS;CASES OF ROTEA v. HALILI and PALISOC v. BRILLANTES, NOT IN POINT. — Defendant citesRotea vs. Halili, (109 Phil. 495) in support of the proposition that a principal is not liable for

exemplary damages owing to acts of his agent unless the former has participated in said actsor ratified the same. Said case involved, however, the subsidiary civil liability of an employerarising from criminal acts of his employee, and "exemplary damages . . . may be imposedwhen the crime was committed with one or more aggravating circumstances." The Roteacase is not in point, for the case at bar involves a breach of contract, as well as a quasi-delict.Neither may the case of Palisoc vs. Brillantes (L-29025, Oct., 4, 1971), invoked by thedefendant, be equated with the case at bar. There, in an action for damages, the schoolofficials were held jointly and severally liable with the student who caused the death of another for failure of the school to provide "adequate supervision over the activities of thestudents in the school premises," to protect them "from harm, whether at the hands of fellowstudents or other parties." Obviously, the amount of damages awarded in the Palisoc case isnot and cannot serve as the measure of the damages recoverable in the present case, thelatter having been caused directly and intentionally by an employee or agent of thedefendant, where as the student who killed the young Palisoc was in no wise an agent of theschool.

6.ID; ID; AWARD OF ATTORNEY'S FEES AND OF EXEMPLARY DAMAGES, EQUITABLE ININSTANT CASE. — Article 2208 of our Civil Code expressly authorizes the award of attorney'sfees "when exemplary damages are awarded," as they are in this case — as well as "in any

other case where the court deems it just and equitable that attorney's fees . . . berecovered," and We so deem it just and equitable in the present case, considering the"exceptional" circumstances obtaining therein, particularly the bad faith with whichdefendant's agent had acted, the place where and the conditions under which the plaintiff-appellee was left at Wake Island, the absolute refusal of defendant's manager in Manila totake any step whatsoever to alleviate Mr. Zulueta's predicament at Wake and have himbrought to Manila — which, under their contract of carriage, was defendant's obligation todischarge with "extraordinary" or "utmost" diligence — and, the "racial" factor that had,likewise, tainted the decision of defendant's agent, Capt. Zentner, to off-load him at WakeIsland.



7.ID.; ID.; AWARD THEREOF IN INSTANT CASE, PART OF CONJUGAL PARTNERSHIPPROPERTY. — Where the damages in question have arisen from, inter alia, a breach of plaintiffs' (husband's and wife's) contract of carriage with the defendant, for which plaintiffspaid their fare with funds presumably belonging to the conjugal partnership, said damagesform part of the conjugal partnership property under paragraph (l) of Art. 153, the rightthereto having been "acquired by onerous title during the marriage . . . ."

8.ID.; ID.; ID.; EFFECT OF COMPROMISE AGREEMENT ENTERED BY WIFE WITHDEFENDANT ON CONJUGAL PARTNERSHIP. — The payment to Mrs. Zuluetaby defendantPANAM after her having settled her differences with the latter is effective, insofar as it isdeductible from the award, and because it is due (or part of the amount due) from thedefendant, with or without its compromise agreement with Mrs. Zulueta. What is ineffective isthe compromise agreement, insofar as the conjugal partnership is concerned. Art. 113 of theCivil Code relied upon by the defense, refers to suits in which the wife is the principal or realparty in interest, not to the case at bar, "in which the husband is the main party-in-interest,both as the person principally aggrieved and as administrator of the conjugal partnership . . .having acted in this capacity in entering into the contract of carriage with PANAM and paid

the amount due to the latter, under the contract, with funds of the conjugal partnership," towhich the amounts recoverable for breach of said contract, accordingly, belong.

BARREDO, J.; concurring and dissenting opinion.

1.REMEDIAL LAW; COURTS; JURISDICTION; COURT OF FIRST INSTANCE HASJURISDICTION OVER PRESENT CASE. — In the present case, it is indisputable that thedamages claimed by appellees are susceptible of pecuniary estimation within thecontemplation of Sec. 44(a) of the Judiciary Act, and since they amount to more thanP10,000.00, the trial court had jurisdiction over the same.

2.ID.; ID.; ID.; RULE WHERE THERE IS COMPULSORY COUNTER-CLAIM. — It is the natureor amount of the subject of the plaintiff's action that is decisive as to which court is toexercise jurisdiction over his case, and if the defendant has any counterclaim, the latter, to beavailable within the same action, must be within the jurisdiction of the court in which plaintiff has properly filed his case, unless such counterclaim is compulsory, in which case, the samebeing essentially auxiliary or ancillary to the main controversy, considering that it arises outof or is necessarily connected with the transaction or occurrence that is the subject matter of the complaint, it is considered as absorbed, for jurisdictional purposes, by the latter, albeitthis exception does not obtain in inferior courts in view of the express provision of Section 5of Rule 5 to the effect that "a counterclaim beyond the court's jurisdiction may only bepleaded by way of defense."

3.ID.; ID.; ID.; RULE WHERE THERE IS PERMISSIVE COUNTERCLAIM. — As to permissivecounterclaims, which are considered as separate actions in themselves, it is obvious that theymust necessarily fall within the jurisdiction of the court in which the complaint has been filedunder the express provision of Section 8 of Rule 6 of the Rules of Court.



4.ID.; ID.; ID.; LACHES OR ESTOPPEL NOT APPLICABLE TO JURISDICTION OVER THESUBJECT MATTER. — Laches or estoppel is not juridically possible or proper in regard to the

jurisdiction over the subject matter, notwithstanding the long list of cases cited by themajority upholding the erroneously various shades of alleged estoppel and laches thatsupposedly had the effect of validating, very often for reasons of convenience andpracticality, actuations and actions of courts which otherwise, by clear mandate of the statutewhich this Court has held to be informed in public policy, do not come within the jurisdiction

conferred upon them thereby.

5.CIVIL LAW; CONTRACT OF CARRIAGE; BREACH OF SUCH CONTRACT; AWARD OFDAMAGES THEREFOR; AWARD IN INSTANT CASE DID NOT PROCEED FROM BAD FAITH OR MALICE. — If it were true that the PANAM agents were motivated by pure vindictivenessrather than by the desire to comply with the demands of the public interest involved in thesafety of the plane and of all on board thereof, they would not have offered to-allow him toreboard under any circumstance. The fact that they implied they would consider the incidentabout the "bomb scare" terminated if Mr. Zulueta would only permit examination of his bags,

just so there would be no reason for anyone to say that the captain was so imprudent as to

desist from taking safety measure only because Mr. Zulueta was tenaciously standing hisground, simply goes to show that the PANAM agents had no malice or any retaliatory intentin their minds. Accordingly I hold that appellant has to answer for the damages for breach of its contract of carriage with Mr. Zulueta, albeit I cannot condemn the captain's decision asproceeding from bad faith, vindictiveness, malice aforethought and deliberate ill-will, contraryto the finds of the majority.

6.ID.; ID.; ID.; ID.; ID.; REQUEST TO OPEN BAGS WAS NOT UNJUSTIFIED OR IN BAD

FAITH —

It is the inherent duty of the captain of an airplane to screen every piece of baggage or cargo with a view to avoiding the carrying of any which might endanger thesafety of the plane and its passengers. Correspondingly, it must follow that it is clearly withinthe ambit of his unquestionable lawful authority to refuse to load any baggage or cargo notproven to his satisfaction to be harmless. The net result of the foregoing consideration is thatthe whole heated altercation about the opening of the bags and the mutually unyieldingattitude of both parties resulted from nothing more than their precipitate misconception of each other's motivation. Verily, I cannot see any bad faith that can be attributed to any of those involved in such an unfortunate turn of events.

7.ID.; ID.; ID.; ID.; ID.; ID.; NO CONSTITUTIONAL RIGHT WAS VIOLATED. — I am notprepared to hold that the requirement to open his bags could be resisted by an invocation of constitutional rights, because I am more disposed to consider that it is a matter of publicpolicy, more paramount than an individual's right to privacy, that the safety of air travel ismaintained free from concessions and compromises in consideration of the variant personalstatus of the persons concerned. My considered view is that reliance should rather beexclusively on the sound judgment of the captain who after all is the one most responsible forsuch safety.



8.ID.; ID.; ID.; ID.; INSTANT CASE. — For the error of judgment of Captain Zentner resultingin the off-loading of Mr. Zulueta, appellant is liable to him for breach of the contract of carriage, it being indisputable that it failed in its obligation to take him to his destinationstipulated in said contract.

9.ID., ID.; ID.; ID.; AWARD THEREFOR SHOULD BE LIMITED TO ACTUAL DAMAGES. — There being no clear showing that appellant's agents acted in bad faith in off-loading

Mr. Zulueta, the damages for which appellant should answer must be limited to actual ones,and cannot include moral damages.

10.ID.; ID.; ID.; ID.; LIABILITY FOR INSULTING LANGUAGE PREDICATED ON QUASI-DELICT. — Although it has been established that appellant's agents employed insultinglanguage in dealing with the appellees, the liability therefor cannot be predicated oncontractual breach but on quasi-delict under Article 2176, read together with Articles 2180and 2219(7) of the Civil Code of the Philippines.

11.ID.; ID.; ID.; ID.; TORT RESULTING FROM VERBAL OFFENSE IN INSTANT CASE IS

SEPARATE FROM BREACH OF CARRIAGE CONTRACT. —

In the case at bar, the off-loading of Mr. Zulueta is in every sense separable from the abusive or insulting language attributed toappellant's employees while they were demanding that Mr. Zulueta open his bags, andconsequently, the tort resulting from such verbal offense is juridically independent of thecontractual breach of not taking him to his destination and it may, therefore, be consideredas a distinct cause of action and ground for relief from the ones for contractual breach.

12.ID.; ID.; ID.; ID.; ID.; EXPRESSIONS UTTERED BY PANAM AGENTS AGAINST PLAINTIFFS ARE NOT ACTIONABLE. — The choice of expressions by appellant' s agents was notexcellent, but viewed objectively in the context of the environmental circumstances

prevailing, I refuse to believe they are actionable. "What in (the) hell do you think you are?"is not an uncommon expression of molestation and annoyance. It is hardly, if ever, meant orconsidered as an offensive remark. As movant pointedly posits, it was once held by this Courtthat the utterance of the words "Agustin, putang ina mo" ("Your mother is a whore"),considered in the light of the circumstances under which it was made, is not defamatory. Andto make capital of them for the purpose of recovering supposed damages to feeling andreputation is, in my considered view, to expand the concept of damages in law beyond thenatural bounds of human nature and experience, which I cannot conceive could ever be

juridically assumed.

13.ID.; ID.; ID.; ID.; AWARD IS NOT CONJUGAL IN INSTANT CASE. —

I also disagree withthe majority's pose that all the damages due appellees are conjugal property of the Zulueta spouses for two basic juristic reasons: (a) said damages are merely reparativeand cannot in any sense be gains, hence inapposite to the essentially characteristic conceptof the conjugal partnership of gains, and (b) the legal effects of the tort in this case arepurely personal to each of appellees and consequently belong to their respective patrimonies,exclusive of the patrimony of the conjugal partnership; and also (c) because, in effect, themajority's position disregards the separate and individual interest of Miss Zulueta involvedherein, which cannot in any sense be deemed absorbed in or merged with the interest of her



parents. While the three appellees do belong to a single family, it is undeniable that thehonor and prestige of each of them do not belong to all of them in common. Besides, it isonly consistent with fundamental principles that the damages to be awarded to each of theappellees should be individualized in accordance not only with their respective personalcircumstances but also with the varying factors that affect the measure of the damages towhich each of them is entitled.

14.ID.; ID.; ID.; ID.; AWARD FOR DAMAGES ARE NOT EARNINGS OF THE CONJUGALPARTNERSHIP. — Since the actual and moral damages which may be awarded to theplaintiffs merely replace whatever material or sentimental losses or injuries they havesuffered, the same cannot be wholly considered as either the earnings or profits which arecategorized in the law on conjugal partnership as gains or "ganancias." The only portions of the said damages which may be deemed as pertaining to the category of earnings or profitsof the spouses are those that correspond to their unearned income and hospital expenses(Civil Code of the Philippines by Senator Tolentino, Vol. I, pp. 361-362, Bismorte vs. Aldecoa,17 Phil. 480; Lilius vs. Manila Railroad, 62 Phil 56).

15.ID.; ID.; ID.; ID.; AWARD FOR DAMAGES TO BODY AND HONOR OF THE SPOUSE ISSEPARATE PROPERTY. — In this jurisdiction, it is settled that the body of each spouse is hisor her own patrimony, and necessarily, compensation for any injury suffered by it in privateproperly of the injured spouse; their honor cannot be treated differently. From another pointof view, since under Article 163, "the fines and pecuniary indemnities imposed upon" thespouses "shall not be charged to the conjugal partnership," it stands to reason thatconversely and upon the principle that these matters are purely personal, the indemnities tothem for personal injury do not accrue to the partnership.

16.ID.; ID.; ID.; ID.; ARTICLE 153(1) OF THE CIVIL CODE IS NOT APPLICABLE IN INSTANT

CASE. —

Neither the letter of Article 153(1) nor the spirit behind it can be properly invoked inthis case. The theory of the majority seems to be that inasmuch ac conjugal fund was used inpurchasing his ticket, all rights accruing from the ensuing contract of carriage are necessarilyconjugal. I do not see it that way. It must be considered that even under the position takenby the majority to the effect that the liability of appellant arises from both contract and tort atthe same time, the inescapable implication is that there is a tort aspect therein, On the otherhand, the effects of that tort are purely personal to each of the appellees.

17.ID.; ID.; ID.; ID.; SAID AWARD SHOULD NOT BE FOR FAMILY. — The view beingsustained is that appellant is liable for damages to the three Zuluetas collectively, that is, as afamily and not to each of them individually. As far as I know, nowhere in the Civil Code is afamily, to which it devotes special attention as an institution, ever treated as a unit havingrights or obligations as such.

18.ID.; ID.; ID.; ID.; COMPROMISE AGREEMENT ENTERED INTO BY WIFE WITH APPELLANTMUST BE GIVEN EFFECT. — The majority would base their refusal to give effect toMrs. Zulueta's compromise agreement with appellant precisely on the predicate that thedamage being awarded to appellees constitute part of the properties of the conjugalpartnership of the Zulueta spouses. Frankly, and with due respect to the lengthy exposition of



such theory in the majority opinion, I believe this is its weakest point. And the first obviousobstacle to this conceptualization is the fact that by their very terms, the judgments herein,both of this Court and of the trial court, are not in favor of the so-called conjugal partnership,represented by its manager, the husband, but of all "the (three) plaintiffs" namely,Mr. Zulueta, Mrs. Zulueta and Miss Zulueta. In the second place, I am convinced after maturedeliberation that the damages herein involved cannot be juridically treated as conjugalproperty, having in mind the true concept and the basic elements of the conjugal partnership

of gains as it is known and contemplated in our Civil Code.

19.ID.; CONJUGAL PARTNERSHIP; RELEVANT NEW AND OLD CIVIL CODE PROVISIONSEXPLAINED . — Substantially, Article 142 of the Civil Code of the Philippines is the same as

Article 1392 of the Civil Code of Spain which was in force here before the present Code, but itwill be noted that the change in phraseology served to accentuate not only the nature of thecomponent elements of the so-called conjugal partnership of properties but also how theycome into being. Whereas the old provision refers broadly or vaguely to "ganancias obeneficio" or "earnings or profits," for which reason the system itself is aptly dominated as"sociedad de gananciales," the new one makes it abundantly clear that what are

contemplated are ''fruits of their separate property and the income from their work orindustry." There is thus a discernible emphasis on the thought that the effort or labor on thepart of any or both of the spouses, whether this be actual or presumed, must be the creativefactor of the "earnings or profit" in order for any of these to form part of the conjugalpartnership properties. This is even made clearer by the enumeration in Article 153 of whatare "conjugal partnership properly." Even the new provision regarding "things acquired byoccupation, such as fishing and hunting" conveys the same underlying idea. While the newprovision, Article 154, which provides that "the share of the hidden treasure which the lawawards to the finder or proprietor belongs to the conjugal partnership" seems to refer tosomething acquired without labor on the part of the spouses, the truth is that such hiddentreasure is viewed by the Code as fruit of the property of the spouse in which it is found,under Article 153(3). In contrast under Article 148, what either of the spouses "acquiresduring the marriage by lucrative title" is exclusive property of the spouse making theacquisition. And the obvious reason for all these distinctions and clarifications is the humanand realistic consideration that any earning or profit of the spouses, not derived from theirrespective private properties and without any effort on their part is the product of theircommon and never ceasing effort to help each other directly or indirectly in the promotion of their common interest and welfare. Such is the concern of the law for their common industrythat even in the absence of a marriage, properties acquired by a man and a woman living

together as husband and wife through their work and industry are made governable by therules on co-ownership (Art. 144).

20.ID.; ID.; SEPARATE PROPERTY OF SPOUSE CANNOT BY AGREEMENT BE MADECONJUGAL. — It is a cardinal principle that the spouses cannot modify their respectivepatrimonies vis-a-vis each other's and that of the conjugal partnership. In other words,separate property of one spouse cannot by agreement be made conjugal nor vice-versa.



21.ID.; ID.; PRIMARY OBJECTIVE OF PARTNERSHIP'S FORMATION. — The primary objectiveof the formation of the conjugal partnership of gains is to have a common fund to answer forthe obligations of the spouses contracted in the common interest of the family, therebysolving the problems of who of the two spouses should primarily answer for them and fromwhose resources they should be satisfied. But there are also obligations for which thespouses are individually liable, and for these, they answer with their own patrimonies.

R E S O L U T I O N

CONCEPCION, J p:

Both parties in this case have moved for the reconsideration of the decision of this Courtpromulgated on February 29, 1972. Plaintiffs maintain that the decision appealed from shouldbe affirmed in toto . The defendant, in turn, prays that the decision of this Court be "set aside. . . with or without a new trial, . . . and that the complaint be dismissed, with costs; or, in

the alternative, that the amount of the award embodied therein be considerably reduced."

Subsequently to the filing of its motion for reconsideration, the defendant filed a "petition toannul proceedings and/or to order the dismissal of plaintiffs-appellees' complaint," upon theground that "appellees' complaint actually seeks the recovery of only P5,502.85 as actualdamages, because, for the purpose of determining the jurisdiction of the lower court, theunspecified sums representing items of alleged damages, may not be considered, under thesettled doctrines of this Honorable Court," and "the jurisdiction of courts of first instancewhen the complaint in the present case was filed on Sept. 30, 1965" was limited to cases "inwhich the demand, exclusive of interest, or the value of the property in controversy amountsto more than ten thousand pesos" and "the mere fact that the complaint also prays forunspecified moral damages and attorney's fees, does not bring the action within the

jurisdiction of the lower court."

We find no merit in this contention. To begin with, it is not true that "the unspecified sumsrepresenting items or other alleged damages, may not be considered" — for the purpose of determining the jurisdiction of the court — "under the settled doctrines of this HonorableCourt." In fact, not a single case has been cited in support of this allegation.

Secondly, it has been held that a claim for moral damages is one not susceptible of pecuniaryestimation . 1 In fact, Article 2217 of the Civil Code of the Philippines explicitly provides that"(t)hough incapable of pecuniary computation , moral damages may be recovered if they arethe proximate result of the defendant's wrongful act or omission." Hence, "(n)o proof pecuniary loss necessary" — pursuant to Article 2216 of the same Code — "in order thatmoral . . . damages may be adjudicated." And "(t)he assessment of such damages . . . is leftto the discretion of the court" — said article adds — "according to the circumstances of eachcase." Appellees' complaint is, therefore, within the original jurisdiction of courts of firstinstance, which includes "all civil actions in which the subject of the litigation is not capable ofpecuniary estimation." 2

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Thirdly, in its answer to plaintiffs' original and amended complaints, defendant had set up acounterclaim in the aggregate sum of P12,000, which is, also, within the original Jurisdictionof said courts, thereby curing the alleged defect if any, in plaintiffs' complaint. 3

"We need not consider the jurisdictional controversy as to the amount the appellantsues to recover because the counterclaim interposed establishes the jurisdiction of theDistrict Court. Merchants' Heat & Light Co. v. James B. Clow & Sons, 204 U.S. 286, 27

S. Ct. 285, 51 L. Ed. 488; O. J. Lewis Mercantile Co. v. Klepner, 176 F. 343 (C.C.A. 2),certiorari denied 216 U.S. 620, 30 S Ct. 575, 54 L. Ed. 641 . . ." 4

". . . courts have said that 'when the jurisdictional amount is in question, thetendering of a counterclaim in an amount which in itself, or added to the amountclaimed in the petition, makes up a sum equal to the amount necessary to the

jurisdiction of this court, jurisdiction is established, whatever may be the state of theplaintiff's complaint.' American Sheet & Tin Plate Co. v. Winzeler (D.C.) 227 F. 321,324." 5

Thus, in Ago v. Buslon, 6 We held:

". . . Then, too, petitioner's counterclaim for P37,000.00 was, also, within theexclusive original jurisdiction of the latter courts, and there are ample precedents to the effect that 'although the original claim involves less than the jurisdictional amount,. . . jurisdiction can be sustained if the counterclaim (of the compulsory type)' — such as the one set up by petitioner herein, based upon the damages allegedly suffered by him in consequence of the filing of said complaint — 'exceeds the jurisdictional amount ,' (Moore Federal Practice, 2nd ed. [1948], Vol. 3, p. 41; Ginsburg vs. PacificMutual Life Ins. Co. of California, 69 Fed. [2d] 97; Home Life Ins. Co. vs. Sipp., 11Fed. [2d] 474; American Sheet & Tin Plate Co. vs. Winzeler [D.C.], 227 Fed. 321, 324;

Brix vs. People's Mutual Life Ins. Co., 41 P. 2d. 537, 2 Cal. 2d. 446; Emery vs. PacificEmployees Ins. Co., 67 P. 2d. 1046, 8 Cal. 2d. 663)."

Needless to say, having not only failed to question the jurisdiction of the trial court — eitherin that court or in this Court, before the rendition of the latter's decision, and evensubsequently thereto, by filing the aforementioned motion for reconsideration and seekingthe reliefs therein prayed for — but, also, urged both courts to exercise jurisdiction over the merits of the case , defendant is now estopped from impugning said jurisdiction. 7

Before taking up the specific questions raised in defendant's motion for reconsideration, itshould be noted that the same is mainly predicated upon the premise that plaintiffs' version isinherently incredible, and that this Court should accept the theory of the defense to the effectthat petitioner was off-loaded because of a bomb-scare allegedly arising from his delay inboarding the aircraft and subsequent refusal to open his bags for inspection. We need notrepeat here the reasons given in Our decision for rejecting defendant's contention and notdisturbing the findings of fact of His Honor, the Trial Judge, who had the decided advantage — denied to Us — of observing the behaviour of the witnesses in the course of the trial andfound those of the plaintiffs worthy of credence, not the evidence for the defense.























It may not be amiss, however, to stress the fact that, in his written report, made in transit from Wake to Manila — or immediately after the occurrence and before the legal implicationsor consequences thereof could have been the object of mature deliberation, so that it could,in a way, be considered as part of the res gestae — Capt. Zentner stated that Zulueta hadbeen off-loaded "due to drinking" and "belligerent attitude ," thereby belying the story of thedefense about said alleged bomb-scare, and confirming the view that said agent of thedefendant had acted out of resentment because his ego had been hurt by

Mr. Zulueta's adamant refusal to be bullied by him. Indeed, had there been an iota of truth insaid story of the defense, Capt. Zentner would have caused every one of the passengers tobe frisked or searched and the luggage of all of them examined — as it is done now — beforeresuming the flight from Wake Island. His failure to do so merely makes the artificious natureof defendant's version more manifest. Indeed, the fact that Mrs. Zulueta andMiss Zulueta were on board the plane shows beyond doubt that Mr.Zulueta could not possiblyhave intended to blow it up.

The defense tries to explain its failure to introduce any evidence to contradict the testimonyof Mr. Zulueta as to why he had gone to the beach and what he did there, alleging that, in

the very nature of things, nobody else could have witnessed it. Moreover, the defense insists,inter alia, that the testimony of Mr. Zulueta is inherently incredible because he had no idea asto how many toilets the plane had; it could not have taken him an hour to relieve himself inthe beach; there were eight (8) commodes at the terminal toilet for men; if he felt the needof relieving himself, he would have seen to it that the soldiers did not beat him to theterminal toilets; he did not tell anybody about the reason for going to the beach, until afterthe plane had taken off from Wake.

We find this pretense devoid of merit. Although Mr. Zulueta had to look for a secluded placein the beach to relieve himself, beyond the view of others, defendant's airport manager,whom Mr. Zulueta informed about it, soon after the departure of the plane, could have forthwith checked the veracity of Mr. Zulueta's statement by asking him to indicate thespecific place where he had been in the beach and then proceeding thereto for purposes of verification.

Then, again, the passenger of a plane seldom knows how many toilets it has. As a generalrule, his knowledge is limited to the toilets for the class — first class or tourist class — inwhich he is. Then, too, it takes several minutes for the passengers of big aircrafts, like thoseflying from the U.S. to the Philippines, to deplane. Besides, the speed with which a given

passenger may do so depends, largely, upon the location of his seat in relation to the exitdoor. He cannot go over the heads of those nearer than he thereby. Again, Mr. Zulueta mayhave stayed in the toilet terminal for some time, expecting one of the commodes therein tobe vacated soon enough, before deciding to go elsewhere to look for a place suitable to hispurpose. But he had to walk, first, from the plane to the terminal building and, then, aftervainly waiting therein for a while, cover a distance of about 400 yards therefrom to thebeach, and seek there a place not visible by the people in the plane and in the terminal,inasmuch as the terrain at Wake Island is flat. What is more, he must have had to take off part, at least, of his clothing, because, without the facilities of a toilet, he had to wash himselfand, then, dry himself up before he could be properly attired and walk back the 400 yards



that separated him from the terminal building and/or the plane. Considering, in addition tothe foregoing, the fact that he was not feeling well, at that time, We are not prepared to holdthat it could not have taken him around an hour to perform the acts narrated by him.

But, why — asks the defendant — did he not reveal the same before the plane took off? The

record shows that, even before Mr. Zulueta had reached the ramp leading to the plane, Capt.Zentner was already remonstrating at him in an intemperate and arrogant tone and attitude("What do you think you are?), thereby impelling Mr. Zulueta to answer back in the samevein. As a consequence, there immediately ensued an altercation in the course of which eachapparently tried to show that he could not be cowed by the other. Then came the order of Capt. Zentner to off-load all of the Zuluetas, including Mrs. Zulueta and the minorMissZulueta, as well as their luggage, their overcoats and other effects handcarried by them;but, Mr. Zulueta requested that the ladies be allowed to continue the trip. Meanwhile, it hadtaken time to locate his four (4) pieces of luggage. As a matter of fact, only three (3) of themwere found, and the fourth eventually remained in the plane. In short, the issue between

Capt. Zentner and Mr. Zulueta had been limited to determining whether the latter wouldallow himself to be browbeaten by the former. In the heat of the altercation, nobody hadinquired about the cause of Mr. Zulueta's delay in returning to the plane, apart from the factthat it was rather embarrassing for him to explain, in the presence and within the hearing of the passengers and the crew, then assembled around them, why he had gone to the beachand why it had taken him some time to answer there a call of nature, instead of doing so inthe terminal building.

Defendant's motion for reconsideration assails: (1) the amount of damages awarded asexcessive; (2) the propriety of accepting as credible plaintiffs' theory; (3) plaintiffs' right to

recover either moral or exemplary damages; (4) plaintiffs' right to recover attorney's fees;and (5) the non-enforcement of the compromise agreement between the defendant andplaintiff's wife, Mrs. Zulueta. Upon the other hand, plaintiffs' motion for reconsiderationcontests the decision of this Court reducing the amount of damages awarded by the trialcourt to approximately one-half thereof, upon the ground, not only that, contrary to thefindings of this Court, in said decision, plaintiff had not contributed to the aggravation of hisaltercation or incident with Capt. Zentner by reacting to his provocation with extremebelligerency, thereby allowing himself to be dragged down to the level on which said agent of the defendant had placed himself, but, also, because the purchasing power of our local

currency is now much lower than when the trial court rendered its appealed decision, overfive (5) years ago, on July 5, 1967, which is an undeniable and undisputed fact. Precisely, forthis reason, defendant's characterization as exorbitant of the aggregate award of overP700,000 by way of damages, apart from attorney's fees in the sum of P75,000, is untenable.Indeed, said award is now barely equivalent to around 100,000 U. S. dollars.

In further support of its contention, defendant cites the damages awarded in previous casesto passengers of airlines, 8 as well as in several criminal cases, and some cases for libel andslander. None of these cases is, however, in point. Said cases against airlines referred topassengers who were merely constrained to take atourist class accommodation , despite the







fact that they had first class tickets, and that although, in one of such cases, there was proof that the airline involved had acted as it did to give preference to a "white" passenger, thismotive was not disclosed until the trial in court, In the case at bar, plaintiff Rafael Zulueta was "off-loaded" at Wake Island, for having dared to retort to defendant'sagent in a tone and manner matching, if not befitting his intemperate language and arrogantattitude. As a consequence, Capt. Zentner's attempt to humiliate Rafael Zulueta hadboomeranged against him (Zentner), in the presence of the other passengers and the crew.

It was, also, in their presence that defendant's agent had referred to the plaintiffs as"monkeys," a racial insult not made openly and publicly in the abovementioned previouscases against airlines.

In other words, Mr. Zulueta was off-loaded, not to protect the safety of the aircraft and itspassengers, but to retaliate and punish him for the embarrassment and loss of face thussuffered by defendant's agent. This vindictive motive is made more manifest by the notedelivered to Mr. Zulueta by defendant's airport manager at Wake Island, Mr. Sitton, statingthat the former's stay therein would be "for a minimum of one week," during which he wouldbe charged $13.30 per day. This reference to a "minimum of one week" revealed the

intention to keep him there stranded that long, for no other plane, headed for Manila, wasexpected within said period of time, although Mr. Zulueta managed to board, days later, aplane that brought him to Hawaii, whence he flew back to the Philippines, via Japan.

Neither may criminal cases, nor the cases for libel and slander cited in the defendant's motionfor reconsideration, be equated with the present case. Indeed, in ordinary criminal cases, theaward for damages is, in actual practice, of purely academic value, for the convicts generallybelong to the poorest class of society. There is, moreover, a fundamental difference betweensaid cases and the one at bar. The Zuluetas had a contract of carriage with the defendant, asa common carrier, pursuant to which the latter was bound, for a substantial monetary consideration paid by the former, not merely to transport them to Manila, but, also, to do sowith "extraordinary diligence" or "utmost diligence." 9 The responsibility of the commoncarrier, under said contract, as regards the passenger's safety, is of such a nature, affectingas it does public interest, that it "cannot be dispensed with " or even "lessened by stipulation,by the posting of notices, by statements on tickets, or otherwise." 10 In the present case, thedefendant did not only fail to comply with its obligation to transport Mr. Zulueta to Manila,but, also, acted in a mannercalculated to humiliate him, to chastise him, to make him suffer,to cause to him the greatest possible inconvenience, by leaving him in a desolate island, inthe expectation that he would be stranded there for a "minimum of one week" and, in

addition thereto, charged therefor $13.30 a day.

It is urged by the defendant that exemplary damages are not recoverable in quasi-delicts,pursuant to Article 2231 of our Civil Code, except when the defendant has acted with "grossnegligence," and that there is no specific finding that it had so acted. It is obvious, however,that in off-loading plaintiff at Wake Island, under the circumstances heretofore adverted to,defendant's agents had acted with malice aforethought and evident bad faith. If "grossnegligence" warrants the award of exemplary damages, with more reason is its imposition

justified when the act performed is deliberate, malicious and tainted with bad faith. Thus, inLopez v. PANAM,11 We held:















"The rationale behind exemplary or corrective damages is, as the name implies, toprovide an example or correction for public good. Defendant having breached itscontracts in bad faith, the court, as stated earlier, may award exemplary damages inaddition to moral damages (Articles 2229, 2232, New Civil Code.)"

Similarly, in NWA v. Cuenca 12 this Court declared that an award for exemplary damages was justified by the fact that the airline's "agent had acted in a wanton, reckless and oppressive

manner " in compelling Cuenca, upon arrival at Okinawa, to transfer, over his objection, fromthe first class, where he was accommodated from Manila to Okinawa, to the tourist class, inhis trip to Japan, "under threat of otherwise leaving him in Okinawa," despite the fact that hehad paid in full the first class fare and was issued in Manila a first class ticket.

Defendant cites Rotea v. Halili, 13 in support of the proposition that a principal is not liable forexemplary damages owing to acts of his agent unless the former has participated in said actsor ratified the same. Said case involved, however, the subsidiary civil liability of an employerarising from criminal acts of his employee, and "exemplary damages . . . may be imposedwhen the crime was committed with one or more aggravating circumstances." 14 Accordingly,

the Rotea case is not in point, for the case at bar involves a breach of contract, as well asa quasi-delict .

Neither may the case of Palisoc v. Brillantes, 15 invoked by the defendant, be equated withthe case at bar. The Palisoc case dealt with the liability of school officials for damages arisingfrom the death of a student (Palisoc) due to fist blows given by another student (Daffon), inthe course of a quarrel between them, while in a laboratory room of the Manila TechnicalInstitute. In an action for damages, the head thereof and the teacher in charge of saidlaboratory were held jointly and severally liable with the student who caused said death, forfailure of the school to provide "adequate supervision over the activities of the students in the

school premises," to protect them "from harm, whether at the hands of fellow students orother parties." Such liability was predicated upon Article 2180 of our Civil Code, the pertinentpart of which reads:

"ART. 2180.The obligation imposed by article 2176 is demandable not only for one'sown acts or omissions, but also for those of persons for whom one is responsible.

"xxx xxx xxx

"Lastly, teachers or heads of establishments of arts and trades shall be liable fordamages caused by their pupils and students or apprentices, so long as they remainin their custody.

"xxx xxx xxx"

Obviously, the amount of damages awarded in the Palisoc case is not and cannot serve asthe measure of the damages recoverable in the present case, the latter having beencaused directly and intentionally by an employee or agent of the defendant, whereas thestudent who killed the young Palisoc was in no wise an agent of the school. Moreover, uponher arrival in the Philippines, Mrs. Zulueta reported her husband's predicament to defendant's



















local manager and asked him to forthwith have him (Mr. Zulueta) brought to Manila, whichdefendant's aforementioned manager refused to do, thereby impliedly ratifying the off-loading of Mr. Zulueta at Wake Island.

It is next urged that, under the contract of carriage with the defendant, Mr. Zulueta was

bound to be present at the time scheduled for the departure of defendant's plane and that hehad, consequently, violated said contract when he did not show up at such time. Thisargument might have had some weight had defendant's plane takenoff before Mr. Zulueta had shown up. But the fact is that he was ready, willing and able toboard the plane about two hours before it actually took off, and that he was deliberately andmaliciously off-loaded on account of his altercation with Capt. Zentner. It should, also, benoted that, although Mr. Zulueta was delayed some 20 to 30 minutes, the arrival or departureof planes is often delayed for much longer periods of time. Followed to its logical conclusion,the argument adduced by the defense suggests that airlines should be held liable fordamages due to the inconvenience and anxiety, aside from actual damages, suffered by

many passengers either in their haste to arrive at the airport on scheduled time just to findthat their plane will not take off until later, or by reason of the late arrival of the aircraft at itsdestination.

PANAM impugns the award of attorney's fees upon the ground that no penalty should beimposed upon the right to litigate; that, by law, it may be awarded only in exceptional cases;that the claim for attorney's fees has not been proven; and that said defendant was justifiedin resisting plaintiff's claim "because it was patently exorbitant."

Nothing, however, can be farther from the truth. Indeed, apart from plaintiff's claim for

actual damages, the amount of which is not contested, plaintiffs did not ask any specific sumby way of exemplary and moral damages, as we]l as attorney's fees, and left the amountthereof to the "sound discretion" of the lower court. This, precisely, is the reason whyPANAM, now, alleges — without justification — that the lower court had no jurisdiction overthe subject matter of the present case.

Moreover, Article 2208 of our Civil Code expressly authorizes the award of attorney's fees"when exemplary damages are awarded," — as they are in this case — as well as "in anyother case where the court deems it just and equitable that attorney's fees . . . berecovered," and We so deem it just and equitable in the present case, considering the"exceptional" circumstances obtaining therein, particularly the bad faith with whichdefendant's agent had acted, the place where and the conditions under whichRafael Zulueta was left at Wake Island, the absolute refusal of defendant's manager in Manilato take any step whatsoever to alleviate Mr.Zulueta's predicament at Wake and have himbrought to Manila — which, under their contract of carriage, was defendant's obligation todischarge with "extraordinary" or "utmost" diligence — and, the "racial" factor that had,likewise, tainted the decision of defendant's agent, Capt. Zentner, to off-load him at WakeIsland.



As regards the evidence necessary to justify the sum of P75,000 awarded as attorney's feesin this case, suffice it to say that the quantity and quality of the services rendered byplaintiffs' counsel appearing on record, apart from the nature of the case and the amountinvolved therein as well as his prestige as one of the most distinguished members of the legalprofession in the Philippines, of which judicial cognizance may be taken, amply justify saidaward, which is a little over 10% of the damages (P700,000) collectible by plaintiffs herein.Indeed, the attorney's fees in this case is proportionally much less than that adjudged in

Lopez v. PANAM 16 in which the judgment rendered for attorney's fees (P50,000) wasalmost 20% of the damages (P275,000) recovered by the plaintiffs therein.

The defense assails the last part of the decision sought to be reconsidered, in which — relying upon Article 172 of our Civil Code, which provides that "(t)he wife cannot bind theconjugal partnership without the husband's consent, except in cases provided by law," and itis not claimed that this is one of such cases — We denied a motion, filed by Mrs. Zulueta, forthe dismissal of this case, insofar as she is concerned — she having settled all her differenceswith the defendant, which appears to have paid her the sum of P50,000 therefor — "withoutprejudice to this sum being deducted from the award made in said decision." Defendant now

alleges that this is tantamount to holding that said compromise agreement is both effectiveand ineffective.

This, of course, is not true. The payment is effective, insofar as it is deductible from theaward, and, because it is due (or part of the amount due) from the defendant, with or without its compromise agreement with Mrs. Zulueta. What is ineffective is thecompromise agreement, insofar as the conjugal partnership is concerned.Mrs. Zulueta's motion was for the dismissal of the case insofar as she was concerned, and thedefense cited in support thereof Article 113 of said Code, pursuant to which "(t)he husbandmust be joined in all suits by or against the wife except: . . . (2) If they have in fact beenseparated for at least one year." This provision, We held, however, refers to suits in whichthe wife is the principal or real party in interest, not to the case at bar, "in which the husbandis the main party in interest, both as the person principally aggrieved and as administrator of the conjugal partnership . . . he having acted in this capacity in entering into the contract of carriage with PANAM and paid the amount due to the latter, under the contract, with funds of the conjugal partnership," to which the amounts recoverable for breach of said contract,accordingly, belong. The damages suffered by Mrs. Zulueta were mainly an incident of thehumiliation to which her husband had been subjected. The Court ordered that said sum of P50,000 paid by PANAM to Mrs. Zulueta be deducted from the aggregate award in favor of

the plaintiffs herein for the simple reason that upon liquidation of the conjugal partnership, asprovided by law, said amount would have to be reckoned with, either as part of her share inthe partnership, or as part of the support which might have been or may be due to her aswife of Rafael Zulueta. It would surely be inane to sentence the defendant to pay theP700,000 due to the plaintiffs and to direct Mrs. Zulueta to return said P50,000 to thedefendant.

In this connection, it is noteworthy that, for obvious reasons of public policy, she is notallowed by law to waive her share in the conjugal partnership, before the dissolutionthereof. 17 She cannot even acquire any property by gratuitous title, without the husband's











consent, except from her ascendants, descendants, parents-in-law, and collateral relativeswithin the fourth degree. 18

It is true that the law favors and encourages the settlement of litigations by compromiseagreement between the contending parties, but, it certainly does not favor a settlementwith one of the spouses, both of whom are plaintiffs or defendants in a common cause, suchas the defense of the rights of the conjugal partnership, when the effect, even if indirect, of

the compromise is to jeopardize "the solidarity of the family" —

which the law 19 seeks toprotect — by creating an additional cause for the misunderstanding that had arisen betweensuch spouses during the litigation, and thus rendering more difficult a reconciliation betweenthem.

It is urged that there is no proof as to the purpose of the trip of the plaintiffs, that neither isthere any evidence that the money used to pay the plane tickets came from the conjugalfunds and that the award to Mrs. Zulueta was for her personal suffering or injuries. Therewas, however, no individual or specific award in favor of Mrs. Zulueta or any of the plaintiffs.The award was made in their favor collectively. Again, in the absence of said proof, the

presumption is that the purpose of the trip was for the common benefit of the plaintiffs andthat the money had come from the conjugal funds, for, unless there is proof to the contrary,it is presumed "(t)hat things have happened according to the ordinary course of nature andthe ordinary habits of life." 20 In fact Manresa maintains 21 that they are deemed conjugal,when the source of the money used therefor is not established, even if the purchase hadbeen made by the wife. 22 And this is the rule obtaining in the Philippines. Even propertyregistered, under the Torrens system, in the name of one of the spouses, or in that of thewife only, if acquired during the marriage, is presumed to belong to the conjugal partnership,unless there is competent proof to the contrary. 23

PANAM maintains that the damages involved in the case at bar are not among those formingpart of the conjugal partnership pursuant to Article 153 of the Civil Code, reading:

"ART. 153.The following are conjugal partnership property:

"(1)That which is acquired by onerous title during the marriage at the expense of thecommon fund, whether the acquisition be for the partnership, or for only one of thespouses;

"(2)That which is obtained by the industry, or work, or as salary of the spouses, or of

either of them;

"(3)The fruits, rents or interests received or due during the marriage, coming from thecommon property or from the exclusive property of each spouse."

Considering that the damages in question have arisen from, inter alia , a breach of plaintiffs'contract of carriage with the defendant, for which plaintiffs paid their fare with fundspresumably belonging to the conjugal partnership, We hold that said damages fall underparagraph (1) of said Article 153, the right thereto having been "acquired by onerous title



















during the marriage . . ." This conclusion is bolstered up by Article 148 of our Civil Code,according to which:

"ART. 148.The following shall be the exclusive property of each spouse:

"(1)That which is brought to the marriage as his or her own;

"(2)That which each acquires, during the marriage, by lucrative title;

"(3)That which is acquired by right of redemption or by exchange with other propertybelonging to only one of the spouses;

"(4)That which is purchased with exclusive money of the wife or of the husband."

The damages involved in the case at bar do not come under any of these provisions or of theother provisions forming part of Chapter 3, Title VI, of Book I of the Civil Code, which chapter

is entitled "Paraphernal Property." What is more, if "(t)hat which is acquired by right of redemption or by exchange with other property belonging to only one of the spouses," and"(t)hat which is purchased with exclusive money of the wife or of the husband," 24 belongexclusively to such wife or husband, it follows necessarily that that which is acquired withmoney of the conjugal partnership belongs thereto or forms part thereof. The rulings inMaramba v. Lozano 25 and Perez v. Lantin, 26 cited in defendant's motion for reconsideration,are, in effect, adverse thereto. In both cases, it was merely held that the presumption under

Article 160 of our Civil Code — to the effect that all property of the marriage belong to the conjugal partnership — does not apply unless it is shown that it wasacquired during marriage. In the present case, the contract of carriage was concededly

entered into, and the damages claimed by the plaintiffs were incurred, during marriage.Hence, the rights accruing from said contract, including those resulting from breach thereof by the defendant, are presumed to belong to the conjugal partnership of Mr. andMrs. Zulueta. The fact that such breach of contract was coupled, also, with a quasi-delictconstitutes an aggravating circumstances and can not possibly have the effect of deprivingthe conjugal partnership of such property rights.

Defendant insists that the use of conjugal funds to redeem property does not make theproperty redeemed conjugal if the right of redemption pertained to the wife . In the absence,however, of proof that such right of redemption pertains to the wife — and there is no proof that the contract of carriage with PANAM or the money paid therefor belongs toMrs. Zulueta — the property involved, or the rights arising therefrom, must be presumed,therefore, to form part of the conjugal partnership.

It is true that in Lilius v. Manila Railroad Co., 27 it was held that the "patrimonial and moraldamages" awarded to a young and beautiful woman by reason of a scar — in consequence ofan injury resulting from an automobile accident — which disfigured her face and fractured herleft leg, as well as caused a permanent deformity, are her paraphernal property. Defendantcites, also, in support of its contention the following passage from Colin y Capitant:



















"No esta resuelta expresamente en la legislacion española la cuestin de si lasindemnizaciones debidas por accidentes del trabajo tienen la consideracion degananciales o son bienes particulares de los conyuges.

"Inclinan a la solucion de que estas indemnizaciones deben ser consideradas comogananciales, el hecho de que la sociedad pierde la capacidad de trabajo con elaccidente, que a ella le pertenece, puesto que de la sociedad son los frutos de esetrabajo; en cambio, la consideracion de que de igual manera que los bienes quesustituyen a los que cada conyuge lleva al matrimonio como propios tienen el caracterde propios, hace pensar que las indemnizaciones que vengan a suplir la capacidad detrabajo aportada por cada conyuge a la sociedad, deben ser juridicamente reputadascomo bienes propios del conyuge que haya sufrido el accidente. As! se llega a la

misma solicion aportada por la jurisprudencia francesca." 28

This opinion is, however, undecisive, to say the least. It should be noted that Colin y Capitantwere commenting on the French Civil Code; that their comment referred to indemnities duein consequence of "accidentes del trabajo" resulting in physical injuries sustained by one thespouses (which Mrs. Zulueta has not suffered); and that said commentators admit that the

question whether or not said damages are paraphernal property or belong to the conjugalpartnership is not settled under the Spanish law. 29 Besides, the French law and jurisprudence — to which the comments of Planiol and Ripert, likewise, refer — are inapposite to thequestion under consideration, because they differ basically from the Spanish law in thetreatment of the property relations between husband and wife. Indeed, our Civil Code, lie theSpanish Civil Code, favors the system of conjugal partnership of gains. Accordingly, theformer provides that "(i)n the absence of marriage settlements, or when the same are void,the system of relative community or conjugal partnership of gains . . . shall govern theproperty relations between" the spouses. 30 Hence, "(a)ll property of the marriage is

presumed to belong to the conjugal partnership, unless it be proved that it pertainsexclusively to the husband or to the wife." 31

No similar rules are found in the French Civil Code. What is more, under the provisionsthereof, the conjugal partnership exists only when so stipulated in the "capitulacionesmatrimoniales" or by way of exception. In the language of Manresa —

"Prescindimos de los preceptos de los Codigos de Francia, Italia, Holanda, Portugal, Alemania y Suiza, porsue solo excepcionalmente, o cuando asi se pacta en las

capitulaciones, admiten el sistema de gananciales." 32

Again, Colin y Capitant, as well as the Lilius case, refer to damages recoveredfor physical injuries suffered by the wife. In the case at bar, the party mainly injured,although not physically, is the husband.

Accordingly, the other Philippine cases 33 and those from Louisiana — whose civil law is basedupon the French Civil Code — cited by the defendant, which similarly refer to moral damagesdue to physical injuries suffered by the wife , are, likewise, inapplicable to the case at bar.















We find, therefore, no plausible reason to disturb the views expressed in Our decisionpromulgated on February 29, 1972.

WHEREFORE, the motions for reconsideration above-referred to should be, as they arehereby denied.

FRANCISCO ORTIGAS, JR., plaintiff-appellant-

appellee , vs . LUFTHANSA GERMAN AIRLINES, defendant-appellant- appellee .

Baizas, Alberto & Associates for appellant Lufthansa German Airlines.

Pelaez, Jalandoni & Jamir for appellant Francisco Ortigas, Jr.

SYNOPSIS

Plaintiff sued defendant for damages as a result of his being refused by defendant'semployees and agents to travel first-class despite his confirmed and validated airline ticketsindicating his right to such accommodations. The trial of the case covered a long period of time, delayed by innumerable postponements sought by both parties. Having allowed apermissible number of continuances the trial court repeatedly warned against furtherpostponements, since the case had been pending for three years. When defendant againsought postponement of the hearing set for September 28, 1966, the court, in the exercise of its sound judicial discretion, denied the same, no valid reason having been given why thewitness could not appear. Corollary to this denial order, the court directed the striking off

from the records the unfinished testimony of the defendant's witness Ivo Lazzari andconsidered the case submitted for decision on the evidence presented by the plaintiff. Amotion for reconsideration was likewise denied and subsequently, a decision was rendered"condemning defendant to pay the plaintiff the amount of P100,000.00 as moral damages,P30,00.00 as exemplary or corrective damages with interest on both sums at the legal ratefrom the commencement of the suit until fully paid, P20,000.00 as attorney's fees and thecosts" for the failure to "comply with its obligation to give first-class accommodation to theplaintiff, a Filipino passenger, holding a first class ticket, aggravated by the giving of thespace instead to a Belgian and the improper conduct of its agent in dealing with plaintiff during the occasion of such discriminatory violation of the contract of carriage."

Both parties appealed directly to this Court, plaintiff-appellant contending that the amount of damages awarded him was insufficient and defendant-appellant contending, on the otherhand, that the lower court acted with grave abuse of discretion in denying its urgent motionfor postponement of the hearing set for September 28, 1966, for striking out the testimony ofits witness and for ordering it to pay plaintiff damages.

The Supreme Court, considering precedents and the circumstances of the case, raised theaward of moral and exemplary damages to plaintiff-appellant to P150,000.00 andP100,000.00 respectively.



Judgment modified.

SYLLABUS

1.CIVIL PROCEDURE; APPEALS MATTERS NOT ASSIGNED AS ERRORS, WHEN REVIEWABLE. — The Supreme Court is clothed with ample authority to review matters even if they are not

assigned as errors in the appeal, if it finds that their consideration is necessary in arriving at a just decision of the case. An unassigned error closely related to an error properly assigned, orupon which the determination of the question raised by the error properly assigned isdependent, will be considered by the appellate court notwithstanding the failure to assign itas error.

2.ID.; TRIAL; POSTPONEMENTS THEREOF; CIRCUMSTANCES WHICH CALL FOR DENIAL OFDEFENDANT'S MOTION. — Where a case had been pending for about three years and hadactually suffered during the said period even more than the usually permissible number of continuances to suit the convenience of defendant's counsel, and where notice of next

scheduled hearing had been served on said counsel a month earlier, it must be assumed thatdue preparations and arrangements had been made after the receipt of notice to insure thepresence of the witnesses on the date set. The excuse that the witnesses cannot leave theirrespective stations and places of work to attend the trial is unacceptable, especially wherethe movant is an airline company engage in international transportation and presumablyhaving all the facilities to have any of its employees available practically anywhere in theworld at a moment's notice. A party must not rely on the assumption that courts could bemade to wait until the volume and conditions of business of a party would permit it to complywith the schedule of the court.

3.ID.; ID.; ID.; ABSENCE OF EVIDENCE; RULE. —

Trials may be postponed because of theabsence of evidence only when such absence is justified. Mere absence is not a justificationin itself. It must be shown to the court that due diligence had been exercised in eithersecuring the presence of the evidence or preventing the absence thereof, accompanied by anaffidavit showing the materiality of the evidence expected to be obtained, pursuant to Rule22, Section 4.

4.ID.; ID.; PRESENTATION OF EVIDENCE; INCOMPLETE ORAL TESTIMONY MAY BESTRICKEN OUT. — Oral testimony may be taken into account only when it is complete, thatis, if the witness has been wholly cross-examined by the adverse party or the right to cross-

examine is lost wholly or in part thru the fault of such adverse party. But when cross-examination is not and cannot be done or completed due to causes attributable to the partyoffering the witness, the uncompleted testimony is thereby rendered incompetent.

5.ID.; ID.; ID.; CROSS-EXAMINATION OF WITNESSES, AN INDISPENSABLE PART OF DUEPROCESS. — The right of a party to cross-examine the witnesses of his adversary isinvaluable as it is inviolable in civil cases, no less than the right of the accused in criminalcases. The express recognition of such right of the accused in the Constitution does notrender the right thereto of parties in civil cases less continually based, for it is an



indispensable part of the due process guaranteed by the fundamental law. Subject toappropriate supervision by the judge in order to avoid unnecessary delays on account of itsbeing unduly protracted and to needed injunctions protective of the right of the witnessagainst self-incrimination and oppressive and unwarranted harassment and embarrassment, aparty is absolutely entitled to a full cross-examination as prescribed in Section 8, Rule 132 of the Rules of Court.

6.CONTRACTS; CONTRACT OF CARRIAGE; CARRIER'S LIABILITY FOR DAMAGES;PREFERENCE GIVEN TO ANOTHER PASSENGER IN DISREGARD OF PLAINTIFF'S RIGHTS ANDDIGNITY AMOUNTS TO BAD FAITH AND FRAUD ENTITLING AGGRIEVED PASSENGER TO

AWARD OF DAMAGES. — When it comes to contracts of common carriage, inattention andlack of care on the part of the carrier resulting in the failure of the passenger to beaccommodated in the class contracted for, amounts to bad faith or fraud which entitles thepassenger to the award of moral damages in accordance with Article 2220 of the Civil Code.In the instant case, the preference given to a Belgian passenger over plaintiff was donewillfully and in wanton disregard of plaintiff's rights and dignity as a human being and as aFilipino, who may not be discriminated against with impunity. The breach is of a grave

nature. The treatment given to plaintiff was completely wrong and absolutely unjustifiable.The carrier is liable for moral damages.

7.ID.; ID.; ID.; WILLFUL AND WANTON BREACH OF CONTRACT OF CARRIAGE;JURISPRUDENCE. — The right of a passenger to moral damages has been upheld in caseswherein after having contract and paid for first class accommodation duly confirmed andvalidated; he is transferred over his objection to economy class, which he has to take in orderto be able to arrive at his destination on his scheduled time. (Northwest Airlines, Inc. vs .Cuenca, 14 SCRA 1063 Fernando Lopez et al. vs Pan American World Airways. 16 SCRA 431:

Air France vs Carrascoso, 18 SCRA 155).

8.ID.; ID.; ID.; ID.; CONSIDERATIONS WHICH JUSTIFY AN INCREASE IN THE AWARD OFMORAL DAMAGES; CASE AT BAR. — Where an air carrier's employee falsely noted on theticket of a Filipino passenger that the latter was travelling economy class in order to give wayto a Belgian passenger on account of his nationality, and considering that said passenger wassuffering from a weak heart and was advised by his doctor to travel first class only, andtaking into account his personal and social status, being a prominent lawyer, businessman,civil and religious leader, member of the numerous government boards and organizations aswell as of local and international bodies, carrying a special Philippine government passport,

and taking into account the present peso rate at exchange vis-a-vis the dollars, the SupremeCourt held that the increase of moral damages awarded by the trial court from P100,000 toP150,000 was justified.

9.ID.; ID.; ID.; ID.; PAYMENT OF EXEMPLARY DAMAGES. — "Exemplary damages arerequired by public policy, for wanton acts must be repressed. They are an antidote so thatthe poison of wickedness may not through the body politic."(Report of the Code Commission,pp. 75-76). An airline company should be made to pay an amount that can really serve as adeterent against a seeming pattern of indifference and unconcern, and of discrimination forracial reasons, discernible in the treatment of air passengers.



10.ID.; ID.; ID.; ID.; ID.; RATIONALE. — "The rationale behind exemplary or correctivedamages, is, as the name implies, to provide an example or correction for public good. Inview of its nature, it should be imposed in such an amount as to sufficiently and effectivelydeter similar breach of contracts by defendant or other airlines." (Lopez vs. Pan AmericanWorld Airways, 16 SCRA 431).

11.ID.; ID.; ID.; ID.; ID.; AMOUNT INCREASED IN INSTANT CASE. — The amount of

P30,000.00, fixed by the lower court as exemplary damages is increased to P100,000.00 toserve the ends for which the liability has been conceived. This is not the first case, and unlessthe proper sanction are applied, it does not appear it is going to be the last yet, of instanceswherein Filipino passengers having validated and confirmed tickets for first class would beshoved to the economy class over their valid objections and without any regard at all to theirfeelings and convenience, only to favor other passengers presumed by the airlines to be of superior race, hence deserving preference. It is high time everyone concerned were made torealize that the laws of the Philippines do not permit any act of discrimination against itscitizens, especially when this accompanies a clear breach of contractual obligations of common carriers whose business is affected with public interest and must be directed to

serve the convenience and comfort of the passengers. When any disregard of such laws iscommitted, the Supreme Court, as the interpreter of such laws, must exact thecommensurate liability which they contemplate.

D E C I S I O N

BARREDO, J p:

Direct appeals of both parties plaintiff, Francisco Ortigas, and defendant Lufthansa German Airlines, from the decision of the Court of First Instance of Manila, Branch X, "condemning thedefendant to pay plaintiff the amount of P100,000 as moral damages, P30,000 as exemplaryor corrective damages, with interest on both sums at the legal rate from the commencementof this suit until fully paid, P20,000 as attorney's fees and the costs" for the former's failure to"comply with its obligation to give first class accommodation to (the latter) a (Filipino)passenger holding a first class ticket," aggravated by the giving of the space instead to a

Belgian and the improper conduct of its agents in dealing with him during the occasion of such discriminatory violation of its contract of carriage.

Defendant buttresses its appeal on the following:

"ASSIGNMENT OF ERRORS

I

THE LOWER COURT ACTED WITH GRAVE ABUSE OF DISCRETION IN DENYING THEDEFENDANTS URGENT-MOTION FOR POSTPONEMENT DATED SEPTEMBER 24, 1966.



II

THE LOWER COURT CONSEQUENTLY ERRED IN ORDERING THE STRIKING FROMTHE RECORDS THE TESTIMONY OF WITNESS IVO LAZZARI AND IN DEEMING THECASE SUBMITTED FOR DECISION ON THE EVIDENCE OF THE PLAINTIFF ALONE.

III

THE LOWER COURT ERRED IN CONDEMNING DEFENDANT TO PAY THE PLAINTIFFTHE AMOUNT OF P100,000.00 AS MORAL DAMAGES, P30,000.00 AS EXEMPLARY OR CORRECTIVE DAMAGES, WITH INTEREST ON BOTH SUMS AT THE LEGAL RATEFROM THE COMMENCEMENT OF THIS SUIT UNTIL FULLY PAID, P20,000.00 AS

ATTORNEY'S FEES, AND COSTS." (Pp. 12-13, p. 118, Record.)

On the other hand, plaintiff's sole ground for his appeal is that "the trial court erred inordering Lufthansa to pay Ortigas only P100,000 as moral damages, P20,000 as exemplary orcorrective damages, and P20,000 as attorney's fees." (Plaintiff-Appellant's Brief, p. a.) Thus,apart from the contention of defendant that it has been denied its full day in court, the only

issue raised by both appellants relate to the amount of the damages awarded by the trialcourt, plaintiff claiming it is less than he is entitled to and the defendant insisting on theopposite.

Lufthansa maintains it has not had its full day in court because the trial court abruptly endedthe trial by denying its last motion for postponement notwithstanding it was well founded andforthwith ordering the striking out of the testimony of its absent witness whose cross-examination had not been finished and then declaring the case submitted for decision. In thisconnection, the record reveals the following facts:

Plaintiff's complaint was filed with the court below on December 24, 1963 and after issueswere joined, a pre-trial was held, the parties submitted a partial stipulation of facts andthereafter went to trial, the last day of which was on September 28, 1966. As to whathappened in between, a detailed account is made in the brief of Ortigas as plaintiff-appelleeas follows:

". . . Thereafter the case was set for hearing twenty four (24) times, or on April 27,1964, July 9, 1964, August 20, 1964, October 1, 1964, November 11, 1964, December22, 1964, February 3, 1965, March 18, 1965, May 5, 1965, June 11, 1965, July 22,1965, August 26, 1965 and September 8, 1965, September 22, 1965, November 3,

1965, November 24, 1965, December 17, 1965, December 29, 1965, January 14,1966, February 2, 1966, April 19, 1966, April 20, 1966, July 5, 6 and 7, 1966, August25, 1966 and September 28, 1966.

One (1) hearing, or that of August 25, 1966, was cancelled because the trial judge,Hon. Jose L. Moya, was then sick. Other postponements were as follows:

Postponements at instance of plaintiff



Three (3) settings were cancelled upon motion of plaintiff on grounds that defendant'scounsel (Atty. Crispin Baizas) himself must have found sufficient, for he gave hisconformity thereto. These were the hearings set for:

July 9, 1964 — postponed upon plaintiffs motion, dated June 27, 1964, or 12 daysbefore the hearing, on the ground that he had to attend an important business matterin Mindanao, which was so urgent that 'for plaintiff to even make a flying trip toManila for the scheduled hearing might jeopardize and render to naught a project towhich plaintiff has already expended considerable time, money and effort' (RA — pp.28-29. Note: All reference herein will be to plaintiff's Record on Appeal)

August 26, 1965 — postpone upon plaintiff's motion, dated August 23, 1965, for thereason that he was in London for business reasons and could not return to thePhilippines on time for the hearing. This motion is not reproduced in any Record on

Appeal but is admitted.

July 5-7, 1966 — 18 days before the dates set for the hearing, counsel for plaintiff filed a motion, dated June 17, 1966, for postponement on the ground that Atty.

Rodegelio M. Jalandoni, who had been personally handling this case was then inWashington, D.C. on business and would not be back until the middle part of August,1966. Considering that the trial of the case was far advanced, it would be difficult foranother lawyer to substitute for Atty. Jalandoni. Defendant's counsel agreed to themotion (RA — pp. 50-51).

Postponements at instance of both parties

Four (4) settings, or those of August 20, 1964, October 1, 1964 November 11, 1964and December 22, 1964, were cancelled upon the joint motion of the parties on theground that negotiations for the possible settlement of this case were pending (RA —

pp. 31-34).

While both attorneys for plaintiff and defendant signed the joint motions forpostponement, the initiative to have the hearings cancelled actually came fromdefendant's counsel who claimed that he needed time to consult with his client.Plaintiff welcomed the possibility of compromise and acceded to join the requests forpostponement but became impatient at and suspicious of the attempt to delay so thatin the motion to postpone the December 22, 1964 hearing, plaintiff insisted on theinsertion of the phrase 'be postponed for the last time' (RA — p. 34). These took placeafter the pre-trial but before plaintiff had started presenting his evidence.

Postponement at instance of defendant

Of the remaining 16 settings, at least TEN (10) were postponed or could not proceedexcept for a few minutes because either Atty. Crispin Baizas, counsel for defendant,was not available or needed time to prepare or had to attend a meeting somewhereelse, or, as in the ease of September 28, 1966, defendant's witnesses wanted to avoidthe inconvenience of coming to the Philippines. The situation became such that ontwo (2) occasions the court a quo warned the defendant and/or its counsel that it waspostponing the trial 'for the last time' and 'definitely for the last time.' Thus:



February 3, 1965 — On this date, although plaintiff was ready to present his evidenceand the Court to hear the parties, Atty. Baizas asked for postponement for the reasonthat he had to be somewhere else. The undersigned graciously obliged by notobjecting, albeit the motion was made without warning and in open court.

March 18, 1965 — Once again the hearing scheduled for this date was postponed onmotion of Atty. Baizas in open court. The undersigned did not object because, as faras he can now recall, the excuse given was that opposite counsel had anotherappointment.

June 11, 1965 — The Court was free the whole morning of this day and plaintiff actually took the witness stand. After plaintiff was through with his direct testimony,

Atty. Zaida R. Alberto, who appeared for the defendant, asked that the cross-examination be postponed for the next hearing, on the ground that Atty. Baizas knewmore of the defense. The following appears on record:

'ATTY. ALBERTO:

If Your Honor please, may I request to allow the cross examination at the nexthearing.

COURT:

You can handle the cross examination now.

ATTY. ALBERTO:

The defense are more in the knowledge of Atty. Baizas.

COURT:

If you postpone the cross examination we will forget the testimony and will bespending much time referring to this testimony, so you better cross-examine himwhile his testimony is still fresh.

ATTY. ALBERTO:

May I ask for a reconsideration, Your Honor, anyway it is past 11:00 o'clock I do notthink there will be enough time.

We still have one hour.

ATTY. ALBERTO:

I ask for a reconsideration, Your Honor.

COURT:



On motion of the defendant's counsel, the continuation of the trial is postponed toJuly 22, 1965, at 8:30 a.m. The parties were notified in open court of this newassignment.' (t.s.n. pp. 43-44, June 11, 1965)

Notwithstanding there was an hour left, which was precious considering thecrowded calendar of the Court, and Judge Moya wanted to hear the cross-examination because plaintiff's testimony was fresh, the Court pleased counselfor the defendant and postponed the hearing to July 22, 1965.

September 22, 1965 — At this hearing the undersigned requested that Dr. IsidroPertiera be permitted to take the witness stand. He is a heart specialist and it wasdifficult to bring him to court because of his many patients. His direct testimony didnot take long, after which Atty. Baizas asked for postponement, for the reason that hedid not expect Dr. Pertiera to testify and, since the subject of the testimony wasimportant and technical, he needed time to be able to cross-examine. Theundersigned, understanding the predicament of Atty. Baizas, did not offer anyobjection.

November 3, 1965 —

This scheduled hearing was postponed upon motion datedOctober 7, 1965, of Atty. Baizas on the ground that he was leaving on business tripabroad. The undersigned again did not object.

November 24, 1965 — It will be recalled that the hearing of September 22,1965, supra , was postponed to enable Atty. Baizas to prepare for his cross-examination of Dr. Pertiera. On this date November 24, 1965, Atty. Baizas cross-examined briefly the doctor, but announced:

'ATTY. BAIZAS:

May I announce, your Honor, that after I cross-examine the Doctor I willask for a postponement of my cross examination of Atty. Ortigasbecause I will have to attend a meeting of the PAL Board of Directors this morning. My crossexamination will not be very long.' (t.s.n., pp. 3-4, November 24, 1965)

The PAL Board of Directors' meeting was certainly not more important than theoccupation of the Court, and it was still early, bur counsel was insistent. TheCourt was beginning to be perturbed by the dilatory motions; yet it granted

counsel's requested postponement but 'for the last time.' Thus:

'ATTY. BAIZAS:

That is all. May I make that request, Your Honor, that it is simply that Ihave to be present at the meeting. I wish to finish my cross examination on

Atty. Ortigas but it is merely that the meeting is held for today at 10:00 o'clock and I would like to ask for a postponement to continue the cross examination.

COURT:



I will grant this for the last time. On motion of Atty. Baizas, thecontinuation of the hearing is postponed for the last time to December 17,1965, at 8:30 a.m., by agreement between him and Atty. Jalandoni.' (t.s.n., p.17, November 24, 1965)

December 17, 1965 — Although at the hearing of November 24, 1965 trial waspostponed for the last time to December 17, 1965, the Court's warning did not seemto register because on December 7, 1965 defendant's counsel filed another motion forpostponement alleging that he had received a telegram to the effect that the meetingof the Legal Committee of IATA that he was attending, originally scheduled forDecember 10-15, had been deferred and would begin on December 13 and as it wasfor 5 days, it would not be possible for him to return for the December 17 hearing;hence, he requested that said hearing be reset for December 27 and 29. In hisundated motion filed on December 7, 1965 counsel averred that:

'There is no intention whatever to delay the case but because of thecircumstances above-stated, undersigned counsel is constrained to ask, for thelast time, for the cancellation of the hearing on December 17 and for its

resetting on such dates as may be convenient to this Honorable Court,preferably December 27 and 29.' (RA - p. 41)

The undersigned opposed said motion and alleged:

'That this case has been pending since December 24, 1963, or almosttwo years now, and trial thereof has been repeatedly suspended and/orpostponed;

That at the hearing of November 24, 1965, this Honorable Courtprecisely postponed continuation of the trial thereof for the last time to

December 17, a date which was fixed by agreement of the parties;

That when counsel for defendant left, as alleged, on December 6, 1965he did so with full knowledge of the intransferable character of the trial set forDecember 17;

That defendant can well be represented by Atty. Baizas' associate, Atty. Alberto, who, as a matter of fact, handled this case when trial started on June11, 1965 and has been actively collaborating with Atty. Baizas since then;

That when plaintiff testified on direct examination on June 11, 1965 said Atty. Alberto appeared for defendant and that plaintiff is now merely due forfurther cross-examination.' (RA — p. 43)

In spite of said opposition, the Trial Court once more granted defendant'srequest but was more categorical this time with its admonition against furtherpostponements and used the word 'definitely' in its order which read:

'O R D E R



For the reasons stated in the defendant's motion for postponement andin view of the fact that it seeks a deferment of the hearing for only a few days,the continuation of the trial is postponed definitely for the last time toDecember 29, 1965, at 8:30 a.m.

'SO ORDERED

'Manila, Philippines, December 11, 1965.

JOSE L. MOYAJudge'

(RA — p. 46)

March 10, 1966 — The hearing on this date lasted for only a few minutes, with theundersigned offering the documentary evidence for the plaintiff. Thereupon,defendant's counsel again asked for postponement so he could go over said evidence.Since he had no witnesses to present, the Court once more postponed the trial to

April 19, 1966 without any objection on the part of the undersigned.

April 19, 1966 — The hearing for this day was cancelled upon motion of defendant'scounsel (RA — p. 49) on his representation that defendant's witness Ivo Lazzari hadarrived from Italy at midnight of April 18, 1966 and was not in a condition to take thewitness stand. The Court again accommodatingly transferred the hearing to thefollowing day, April 20, 1966, although it had other cases scheduled for that date andthe case at bar was not among them, just so Lazzari's trip would not be useless. Theundersigned likewise did not oppose the transfer of hearing." (Pp. 2-13 — Brief, p.132 — Record.)

Defendant does not seriously deny these facts. Seemingly, the controversy between theparties revolves around defendant's motion for postponement of the hearing set forSeptember 28, 1966 which was denied by the trial court. It is this denial that is the subjectof the first above-quoted alleged errors assigned byLufthansa in its brief as defendant-appellant.

At the time this incident of postponement arose, plaintiff had already closed his evidence, andso it was the turn of the defendant to prove its defenses. The starting date for this was April19, 1966, but, upon motion of defendant's counsel, it was deferred to the next day, April 20,1966, on which date defendant's first witness, Ivo Lazzari, took the witness stand. Histestimony, however, was not finished in the morning and afternoon of that day nor duringthe whole day of April 22, 1966. Atty. Rodegelio M. Jalandoni was still cross-examining himwhen the hearing was continued "to the first available date in the calendar". Eventually, thenext continuation of the trial was set at first for July 5, 6 and 7, 1966, but upon motion of plaintiff's counsel, it was reset for August 25, 1966, on which date, in spite of the presence of Lazzari who came from Rome purposely for the trial together with another expected witness,Severino Caselli, and still another witness, C.H. Dehio, who came from Hongkong, no trialcould be held because of the absence of the judge. Hence, another date, September 28,1966 was fixed with notice to the parties received by them respectively the month previous.



On September 24, 1966, defendant's counsel filed a motion for postponement thus:

"COMES NOW the defendant by undersigned counsel and to this Honorable Courtrespectfully states:

1

The above-entitled case is set for hearing on September 28, 1966 at 8:30 o'clock inthe morning.

2

The witnesses who are scheduled to testify for the defendant at said hearing are tocome from Rome, Italy;

3

Word has been received from the defendant that said witnesses will not be able to

come for the hearing aforementioned.

WHEREFORE, it is respectfully prayed that the hearing of this case scheduled forSeptember 28 be postponed to some other date most convenient to this HonorableCourt, preferably on any of the following dates: October 21, 17 November 3, 8, 9 or11, 1966.

. . ." (Page 53, Record on Appeal, p. 29, Rec.)

On September 27, 1966, plaintiff's counsel filed the following opposition to the above motion:

"COMES NOW plaintiff, through undersigned counsel and, in opposition to defendant'surgent motion for postponement, dated September 24, 1966, to this Honorable Courtrespectfully states:

That this case has been pending since December, 1963;

That defendant's aforesaid motion does not give any valid reason for postponing thehearing, since it does not state why defendant's witnesses cannot come to Manila onthe scheduled dates of continuation of trial;

That the convenience and motive of defendant and its witnesses in not exerting everyeffort to testify are not the concern of the plaintiff, and more so of this HonorableCourt, and that the speedy and proper administration of justice dictates that thehearing proceed irrespective of defendant's obvious disregard of the need thereof;

That defendant's attitude is aggravated by the fact that, being an airline company, ithas all facilities to have its employees available as witnesses at any time it desires.

WHEREFORE, it is respectfully prayed that defendant's aforesaid motion forpostponement be denied.



. . ." (Pp. 55-56, id.)

In view of this opposition, on the same day, His Honor issued an order of denial:

"No reason whatsoever having been alleged or shown why the defendant's witnesseswill not be able to come from Rome to Manila on the day of the hearing, and this casehaving been pending since December, 1963, the motion for postponement is denied."(Pp. 56-57, id.)

On the day set for the hearing, September 28, 1966, Atty. Zaida Ruby S. Alberto appeared fordefendant and verbally moved for reconsideration of the foregoing order of denial. Sheargued that:

"Actually, it is not intended to delay the termination of this case. As a matter of fact,on August 15, 1966, the date set for the hearing of this case, we were ready with thepresentation of our evidence as our two witnesses from Rome were here. Butunfortunately, Your Honor was indisposed, so the hearing was postponed to this date.I really do not know why our witnesses failed to come. However, I intend to make an

inquiry about the matter so that I could file the corresponding explanation for theirfailure to appear in Court today. May I, therefore, reiterate my motion forreconsideration, with the reservation that I be allowed to file my explanation for thefailure of these two witnesses coming from Rome to appear for today's hearing."(Page 2, t.s.n., Sept. 28/66.)

But as counsel could not give the exact reason why defendant's witness scheduled totestify were absent, the trial court denied the motion; ruling that "no ground has beenalleged in support thereof". (p. 6, t.s.n., September 28, 1966.)

This order was immediately followed by a motion of plaintiff's counsel for the striking out of the entire testimony of the witness, Ivo Lazzari, upon the ground that counsel had not yetfinished his cross-examination of him and his absence was unexplained. No objection appearsto have been made to such motion, albeit counsel for defendant tried to point out that Atty.Jalandoni had already finished his cross-examination of the witness. After verifying from therecords that such was not the case, His Honor issued the following order:

"The witness Ivo Lazzari not having appeared at the hearing set for today, for which

reason his cross-examination cannot be continued, on motion of the plaintiff'scounsel, his testimony is striken from the record, and this case is deemed submittedfor decision on the evidence already presented." (Pp. 57-58, Rec. on Ap., id.)

Thus the trial ended and parties were allowed to submit their respective memoranda.

On October 19, 1966, however, defendant's counsel filed the following motion forreconsideration:

"MOTION FOR RECONSIDERATION



COMES NOW defendant by undersigned counsel this Honorable Court moving for areconsideration of the orders dated September 27 and September 28, 1966,respectively, respectfully states:

1

On September 26, 1966 a motion for postponement of the hearing on September 28,1966 was filed by undersigned counsel for the reason that word had just beenreceived from the defendant that the witnesses who were scheduled to testify at thesaid hearing and who were to come from Rome, Italy, would not be able to come tothe Philippines for said hearing. This motion was denied in the order of September 27,1966;

2

No reason could be stated in the aforesaid motion for postponementbecause at the time it was prepared, counsel for defendant did not really knowthe specific reasons for the inability of said witnesses to come. A simple telexmessage had been sent by the Far East Manager of the defendant company to

defendant's representatives in Manila advising the latter that the witnesses inquestion could not come. Copy of said telex message is attached to and madepart of this motion for reconsideration as Annex "1";

3

For this reason on September 28, 1966, when the case was called, counsel for thedefendant reiterated the motion for postponement and requested this HonorableCourt for time to submit an explanation on the failure of defendant's witnesses tocome as a letter elaborating on the matter would surely follow the telex message.This request was however denied by the Honorable Court and upon motion of

plaintiff's counsel, another order was issued striking out from the record the testimonyof defendant's only witness so far, Ivo Lazzari, whose cross-examination was to becontinued that date, for the latter's failure to appear at the hearing, and deeming thecase submitted for decision;

4

It is alleged by opposing counsel that the witnesses did not come for the hearing of September 28, 1966 because it was inconvenient for them and for defendant. Thisaccusation is absolutely without basis and malicious;

5

If inconvenience were the only reason for the witnesses' failure to come, then theywould not also have come previously because it was just as inconvenient for themthen. It will be recalled that Ivo Lazzari had been here in April 1966 when he waspresented on direct examination and partly on cross-examination. On August 25,1966, the case was also scheduled for hearing. All of defendant's witnesses came herefrom Rome, Italy for said hearing. Even Mr. C.H. Dehio was also here to testify.Unfortunately, the Presiding (Judge) of this Honorable Court was indisposed on thatparticular morning and so the hearing on said date was cancelled. We mention this



only to show that the failure of the witnesses to come for the hearing on September28 was not caused by mere inconvenience;

6

Defendant had and had no intention to delay the proceedings whatsoever. Thewitnesses in question could not come because of certain circumstances that renderedtheir coming over virtually impossible. Both witnesses, Ivo Lazzari and Saverino Casilliare employees of defendant company at the Rome office. The air traffic in Rome hasbeen particularly heavy this season. Some of the personnel of the Lufthansa Romeoffice were on leave and these two employees had to assume some of the duties of those employees who were on leave, aside from performing their own regular duties.If they were to leave their posts to come for the hearing on September 28, therewould be grave disruption to the public service and for this reason they were not ableto come. These facts are contained in a letter dated September 29, 1966 written toundersigned counsel by C. H. Dehio, IATA Agency Manager, Far East and

Australasia, LufthansaGerman Air Lines, copy of which is attached to and made part of this motion for reconsideration as Annex '2'. The envelope in which said letter

contained is likewise attached to and made part of this motion as Annex '2-A';

7

Witness Ivo Lazzari had finished his testimony on direct examination and onSeptember 28, 1966, opposing counsel was to continue cross-examination of saidwitness. The other witness Saverino Casilli was to be presented after Ivo Lazzariwould have finished testifying. Both witnesses are material for the defense and noother person could testify on the facts that are the subject of their testimony. Theinability of said witnesses to come for the hearing on September 28 was not due toany fault or neglect on the part of defendant who in fact had exerted every effort to

have them come, but because of the supervening circumstances above-described,their coming over could not have been possible without seriously disrupting publicservice;

8

There is no question that the granting or denial of a motion for postponement restsupon the sound discretion of the court. We submit however that under thecircumstances, the ends of justice would have been better served by granting themotion on question. The reason for defendant's motion for postponement is valid and

meritorious, and the grant of a postponement based on such ground would not haveadversely affected the substantial rights of plaintiffs.

'Continuances and postponements of trial are part and parcel of our judicial system of justice, and where no substantial rights are affected and theintention to delay is not manifest, it is sound judicial discretion to allow them.(Rexwell vs. Canlas, No. L-16746, Dec. 30, 1961)



'There is even authority for the view that the right to a speedy trial isnot violated by granting a continuance on the ground of absence of materialwitnesses. (People vs. Romero, G.R. No. L-4517-20, May 25, 1953)

'The lower court erred in denying a motion for postponement filed bydefense to await arrival of a material witness." (People vs. Narsolis, et al. G.R.No. L-2764, March 24, 1950)

'A miscarriage of justice may result from the accidental or excusableabsence of a material witness, where presence can be secured by the grant of a reasonable continuance.' (Luna vs. Arcenas, 34 Phil. 80, 98-99)

8

Defendant has a valid and meritorious defense, and if given opportunity to present itsside of the case, it would certainly diminish, if not altogether disprove plaintiff's claim.

'. . . court litigations are primarily for the search of truth. . . . A trial by

which both parties are given the chance to adduce truth is the best way to findout such truth. A denial of this chance would be too technical. The dispensationof justice and the vindication of grievances should not be barred bytechnicalities.' (Ronquillo vs. Marasigan, L-11621, May 21, 1962; Santiago vs.Joaquin, L-15237, May 31, 1963, italics ours.)

'Judicial experience dictates that it is better that cases are tried on themerits even with a little delay than that substantial rights of a party litigant besacrificed on the altar of technicality.' (Uy vs. Demetillo, CA-G.R. No. 32665-R,Jan. 14, 1964.)

9

An affidavit of merit by Clarita C. de la Riva, Manager, Rocha & Cua., Inc., GeneralSales Agents, Lufthansa German Airlines is likewise attached to and made an integralpart of this motion for reconsideration as Annex "3";

10

The order dated September 27, denying defendant's motion for postponement andthe order of September 28, 1966 striking off from the records the testimony on directexamination of the witness Ivo Lazzari and holding the case submitted for decision onthe evidence presented would unduly prejudice defendant's stand, and would amountto a denial of due process to defendant.

'The paramount interests of justice demand such reasonable allowancesas would prevent, without doing an injustice to the opposing party, the loss bya litigant of his chance to duly present his side of the case before the court.With a view of avoiding a possible miscarriage of justice, the exercise of thecourt's discretion ought to lean, in a reasonable degree toward bringing abouta presentation of evidence on both sides. . . .' (Gerona vs. Calada, CA-G.R. No.



23955-R March 30, 1963, Tormes vs. Balzado, CA-G.R. No. 32019-R, April 17,1964.)

WHEREFORE, it is respectfully prayed that the orders of the Honorable Court datedSeptember 27, and September 28, 1966, respectively, be reconsidered and set aside;that the testimony of defendant's witness Ivo Lazzari be allowed to remain on recordand that a date be set for the continuation of defendant's evidence.

Manila, Philippines, October 19, 1966.

CRISPIN D. BAIZAS & ASSOCIATES

By: s/t/ Crispin D. BaizasCounsel for the defendantSuite 305 Shurdut BuildingIntramuros, Manila.

VERIFICATION

I, CRISPIN D. BAIZAS, after having been sworn according to law, depose and say:

I am the counsel for the defendant in the above-entitled case;

I have prepared the foregoing motion for reconsideration and all the allegationscontained therein are true and correct of my own knowledge and to the best of myinformation and belief.

s/t/ CRISPIN D. BAIZAS

SUBSCRIBED AND SWORN TO BEFORE ME this 19th day of October, 1966 in the City

of Manila, affiant exhibiting to me his Res. Cert. No. A-5892423 issued on January 28,1966 at Makati, Rizal.

s/(Illigible) NOTARY PUBLICUntil December 31, 1967Doc. No. 1377

Page No. 77Book No. IIISeries of 1966."

(Pages 58-67, Record on Appeal, id.)

to which, plaintiff's counsel filed the following opposition:

"COMES NOW plaintiff, through undersigned-counsel, and, in opposition todefendant's motion for reconsideration, dated October 19, 1966, to this HonorableCourt respectfully states that:



1.This is in effect the second motion for reconsideration that defendant has filedagainst the order of September 27, 1966 denying its motion for postponement of thehearing of September 28. The first motion for reconsideration was made in open courtby Atty. Zaida S. Alberto and denied on the same date.

2.Defendant now claims that it did not intend to delay the trial of this case and seeksto justify the failure of its witnesses, Ivo Lazzari and Saverino Casilli, to appear onSeptember 28 on the ground that:

'. . . The air traffic in Rome has been particularly heavy this season.Some of the personnel of the Lufthansa Rome office were on leave and thesetwo employees had to assume some of the duties of these employees whowere on leave, aside from performing their own regular duties. If they were toleave their posts to come for the hearing on September 28, there would begrave disruption to the public service and for this reason they were not able tocome. . . .' (p. 3, Defendant's Motion for Reconsideration.)

3.Note that the above alleged facts are contained in a mere letter that was written by

a certain Mr. C.H. Dehio, an employee of defendant in Hongkong, to its counsel onSeptember 29, 1966, or one day after the hearing of September 28, when presumablydefendant's aforesaid employee had already been informed that this Honorable Courthad denied the postponement and considered this case as submitted for decision.Defendant is an airline company and has all the telex facilities to communicate in amatter of minutes with its various agencies. The ground for failure to appear, to wit,supposed pressure of work of said employees, is as easier to conceive andgratuitously state as to flick one's fingers. We wish to call attention to the significantfact that the statement of Mr. Dehio in his letter is not under oath. Incorporating saidstatement in the body of the motion for reconsideration that is sworn to by counselmerely 'to the best of his information and belief', or in an affidavit of Mrs. Clarita C. de

la Riva (Annex 3) who was only referring to hearsay information derived from Mr.Dehio's aforesaid letter, is insufficient verification of the motion for reconsiderationunder Section 6, Rule 7 of the Rules of Court. Even Mr. Dehio had he executed theaffidavit himself, would have been disqualified to swear to the facts because he isstationed in Hongkong. So that, when defendant's counsel and Mrs. de la Riva verifiedthe motion on 'information and belief' derived from Mr. Dehio's letter, their statementswere hearsay thrice removed.

4.But assuming said facts to be true, did this justify the failure of defendant'switnesses to appear at the scheduled hearing or constitute a valid excuse for

defendant's inability to present evidence" We respectfully submit that they do not.The September 28 hearing was set as early as August 25, 1966, or more than one (1)month previous, to suit the schedules not only of this Honorable Court but of theparties as well. Surely, it was incumbent on defendant, if it has deference to thisHonorable Court and our administration of justice, to see to it that its witnesses,particularly Ivo Lazzari who was on the witness stand and due for cross-examination,would be available, rather than granting leave to its other employees and burdeningthe two needed witnesses with additional work. Defendant is not a neophyte in theairline business. Assuming arguendo that it is true that the volume of air traffic inEurope was high in 'September and early October', it should have foreseen the



situation and taken appropriate measures to assure compliance with its obligation tothis Honorable Court. The witnesses are defendant's employees and subject to itsexclusive control. Instead, defendant allegedly rendered itself short handed bygranting leave to its other employees, and now comes to court with a lame excuserequesting that it be extricated from a predicament that it has deliberatedly broughtupon itself. For, the excuse that with the workload for Mr. Lazzari and Mr. Casillibecoming heavier than usual 'it would seriously disrupt our service to the travellingpublic if, during this time, they were to leave their jobs for several days' (Please seeMr. Dehio's letter, Annex '2'), is lame, by any standard. The local newspapers areconstantly carrying news articles of how large and expanded is the Lufthansa as anairline outfit. Surely, of its hundred (if not thousands) of available employees, two likeLazzari and Casilli could have been dispensed from their work temporarily to defendthe company against the just grievance asserted by an injured passenger before acourt of justice. At the most, defendant was after the promotion of its own interest inholding the two employees to their jobs, and is not avoiding 'grave disruption to thepublic service' as counsel exaggerates Mr. Dehio's expression 'seriously disrupt ourservice to the travelling public' — two distinct ideas, the latter signifying self-interestas distinguished from public necessity. This Honorable Court can take judicial notice

that there are many other airlines operating in the same areas as does Lufthansa andcompeting with it.

5.As we explained at the September 28 hearing, the truth of the matter is that,contrary to the unverified representations of defendant, the reason for the non-attendance of defendant's witnesses was to avoid the inconvenience of coming to thePhilippines to testify. In other words, after Ivo Lazzari and Saverino Casilli wereunable to testify last August 25, 1966, defendant thought of avoiding having saidwitnesses come again to Manila. We say this because sometime on September 20,1966, Atty. Leonardo P. Valmonte (an assistant attorney of plaintiff who is helping inthis case) had a telephone conversation with defendant's counsel, Atty. Zaida S.

Alberto in connection with the former's request for a copy of a certain exhibit, and inthe course of their conversation Atty. Alberto informed Atty. Valmonte that the trialscheduled for September 28, 1966 would not proceed because they were intending 'tosecure the permission of the court to take the testimonies of their witnesses by way of deposition'. In short, even before the receipt of the alleged telex (Annex "1" of Motion) by defendant's counsel on September 22, 1966, said counsel announcing thatthe trial could not proceed because they were going to resort to depositions of theirwitnesses in Rome, rather than have said witnesses come to Manila. The decision totake depositions having been made on or before September 20, it was an easy matterto have Lufthansa's Hongkong office send the telex of September 22 stating that they

would be unable to provide witnesses on September 28. No reason was given whywitnesses could not be provided 6 or 7 days thence. If in truth there was unexpectedincrease in air traffic, surely 6 or 7 days were more than sufficient to make thenecessary arrangements so that the work of Lazzari and Casilli could be taken overtemporarily just so these witnesses could appear before this Honorable Court at theappointed date. Attached hereto as Annex "A" is the affidavit of Atty. Leonardo P.

Valmonte on his aforesaid conversation with Atty. Alberto.

6.At the hearing on September 28, when we made reference to the above-referred toconversation between Attys. Valmonte and Alberto, the latter did not deny that she



had in truth spoken to Atty. Valmonte in the tenor above related. As a matter of fact,she admitted that defendant was intending to take the depositions of its witnesses inRome.

7.When this Honorable Court denied the motion for postponement on September 28,1966, it did so in the exercise of its sound judicial discretion, for no valid reason wasgiven why the witnesses could not appear, whereas this case had been pending forabout three (3) years and had been postponed several times with repeated warningson defendant that said postponements were for the last time. And now, in its motionfor reconsideration, defendant has failed to effectively allege the ground for the failureof said witnesses to come, and even if said ground be admitted as true for argument'ssake, it merely showed 'inofficiousness, lack of resourcefulness and diligence, if nottotal indifference' on the part of defendant to protect in court its interests and toprevent needless delays in the discharge of judicial business.

'Postponement not based on valid reasons. — Where a party seeks postponement of the hearing of this case for reasons caused by his own inofficiousness, lack of resourcefulness and diligence if not total indifference to his own interests or to the

interests of those he represents, thereby resulting in his failure to present his ownevidence, the court would not extend to him its mantle of protection. If it was he whocreated the situation that brought about the resulting adverse consequences, hecannot plead for his day in court nor claim that he was so denied of it.' (De Leon vs.People's Homesite and Housing Corporation, CA-G.R. No. 31169-R, Aug. 31, 1963.)

8.In the case of Hap Hong Hardware Co. vs. Philippine Company, G.R. No. L-16773(May 23, 1961), the Supreme Court, in sustaining the trial court's denial of a motionfor postponement and on the ground that the defendant's witnesses, officers of thecompany, had not come because it was the beginning of the milling season in themunicipality of San Jose, Mindoro Occidental and their presence in the Central was

very necessary, held that the trial court was perfectly justified in denying said motionfor postponement because the reason adduced was 'not unavoidable and one thatcould not have been foreseen.' Said the Supreme Court:

'The reason adduced in support of the motion for postponement is notunavoidable and one that could not have been foreseen. Defendant ought tohave known long before the date of trial that the milling season would startwhen the trial of the case would be held. The motion should have beenpresented long in advance of the hearing, so that the court could have takensteps to postpone the trial without inconvenience to the adverse party. As it is,

however, the motion was presented on the day of the trial. Knowing as itshould have known that postponements lie in the court's discretion and therebeing no apparent reason why the defendant could not have presented themotion earlier, thus avoiding inconvenience to the adverse party, the appellantcannot claim that the trial court erred in denying postponement. Under all thecircumstances we hold that the court was perfectly justified in denying themotion for postponement.'



In the case at bar, the same unjustified excuse is adduced — that the witnesses,who are employees (not even officers) of defendant, had work to do, albeit dateof trial was set one month previous.

9.The cases cited by defendant are not in point, the facts involved therein being verydifferent from those attending the case at bar. For example, in the cited case of LinoLuna vs. Arcenas, 34 Phil. 93, the trial judge declined to grant a continuance of a fewhours to give counsel an opportunity to secure the presence of the defendant. TheSupreme Court held that considering that it did not appear that defendant wasindulging in dilatory tactics, the denial of the motion for short postponement wasimproper. Again, in the case of People vs. Romero, G.R. No. L-4517, May 25, 1953,the prosecution witnesses, although subpoenaed, failed to appear; whereupon thefiscal asked that they be ordered arrested and that in the meantime the trial bepostponed. The Supreme Court likewise held that the denial of the postponement wasimproper. These fact situations, however, as can immediately be seen are completelydifferent from that of Lufthansa whose non-presentation of its employees-witnesseswas motivated by the desire to avoid inconvenience to them, hence its frustrated planto have their depositions taken in Rome.

10.Complaints regarding delays in the disposition of court cases are prevalent andhave recently found expression not only in executive pronouncements but in judicialadmonitions. The unclogging of court dockets remains a pressing problem to thedespair of litigants. As the Court of Appeals put it:

'The records reveals that the trial of the case was postponed five timesat the instance of appellants themselves, and for this reason the trial wasdelayed for more than one year and three months. In granting these severalpostponements, the trial judge was over liberal already, and to have allowedanother postponement would have been to jeopardize plaintiff's interest.

Obviously courts cannot unduly protect the interests of one party to thedetriment of the other. Already, there are complaints regarding delays in thedisposition of court cases. The unclogging of our court dockets still remains apressing problem in the despair of many a litigant. However to eliminate, atleast minimize, these delays is as much our concern and any act of trial courtsconducive towards this purposeful end will be encouraged by appellate court's.'(Rosario vs. De Leon, CA-G.R. No. 6495-R, April 25, 1941; 40 O.G. 752.)

11.Prejudice will be occasioned plaintiff if defendant's belated motion forreconsideration is granted. Notwithstanding defendant's counsel's receipt of Mr.

Dehio's letter, dated September 25, 1966, a few days after said date, defendantdelayed the filing of its motion for reconsideration until after about three (3) weekslater. In the meantime, it knew as of September 28 that this Honorable Court hadstriken out the testimony of Ivo Lazzari, considered the case submitted for decision onthe evidence on record, and given plaintiff's counsel 7 days to present hismemorandum. Plaintiff and his counsel exerted all efforts and worked overtime just soto be able to submit his memorandum within the short period allowed. Saidmemorandum was finished on time, and has been served on defendant's counsel andsubmitted to Court. In other words, defendant purposely waited until the submissionof plaintiff's memorandum before presenting its motion for reconsideration based on



alleged information received three (3) weeks previous. To grant defendant's instantmotion for reconsideration would place plaintiff at a great disadvantage, becausedefendant is now fully aware of every facet of plaintiff's cause and can simply tailor itsdefenses and evidence in refutation thereof.

12.Defendant claims that plaintiff is taking undue advantage of a technicality and itshould not be deprived of its day in court on this ground. Suffice it to state that it isnever technical to invoke one's rights, and that while the Rules of Court should beliberally construed, their strict observance has been considered indispensable to theprevention of needless delays and the orderly and speedy discharge of judicialbusiness. Thus:

'Although the Rules of Court should he liberally construed, however theirstrict observance which have been considered indispensable to the preventionof needless delays and to the orderly and speedy discharge of judicial business,is as imperative necessity. Thus, the rules prescribing the time within whichcertain act must be done, or certain proceedings taken, are consideredabsolutely indispensable to the prevention of needless delays and to the orderly

and speedy discharge of judicial business, is as imperative necessity. Thus, therules prescribing the time within which certain act must be done, or certainproceedings taken, are considered absolutely indispensable to the prevention of needless delays and to the orderly and speedy discharge of judicial businessand therefore must be strictly complied with.' (Alvero vs. De la Rosa, 76 Phil.428, cited in Francisco on Civil Procedure, Vol. 1, p. 89)

'Rules of Courts, promulgated by authority of law, have the force andeffect of law; and rules of court prescribing the time within which certain actsmust be done, or certain proceedings taken are considered absolutelyindispensable to the prevention of needless delays and to the orderly and

speedy discharge of judicial business.' Conlu vs. Court of Appeals, et al., G.R.No. L-14027, January 29, 1960, citing Shioji vs. Harvey, 43 Phil. 333; Alvero vs.De la Rosa, et al., 42 Off. Gaz., p. 316, (Supra.)

WHEREFORE, it is respectfully prayed that defendant's motion for reconsideration,dated October 19, 1966, be denied.

Manila, October 31, 1966." (Pages 74-88, Record on Appeal, id.)

By way of reply to the above opposition, defendant's counsel alleged:

"Defendant could have from the beginning taken depositions in Rome, but so as toavoid any inconvenience to plaintiff and that the court may see and hear thewitnesses testify to better determine the credibility of their testimony defendant hadbeen bringing the witnesses here. As a matter of fact, defendant even without leaveof court may take the depositions of its witnesses by merely giving the Court notice of its intention to do so.

'After answer has been filed no leave of court is required as aprerequisite to taking depositions . . . (Marzo vs. Moore McCormick Line, Inc. 8



Feb. Rules of Service, p. 560; cited in Moran Comments on Rules of Court Vol.II, p. 18)

'After issue is joined, depositions may be taken without leave of court.(Lyons vs. Bronx Towing Line, Inc., 1 Fed. Service p. 341)

'After answer is served, depositions may be taken as of course andapplication should not be made to the court for leave. (Schultz vs. State MutualLife Assurance Company, 1 Fed. Rules of Service, p. 340, US Dist. Ct. Dist. of Oregon, Oct. 14, 1938)

The statements made by Atty. Valmonte are false and malicious. An affidavit executedby Atty. Zaida Ruby Alberto is attached to and made part of this Reply as Annex '1'."(Pages 92-93, Record on Appeal, id.)

On October 24, 1966, the trial court resolved the incident in a brief order holding that "(f)orthe reasons stated in the plaintiff's opposition to the motion for reconsideration, it is denied."

In its appeal, defendant reiterates insistently its position that the denial of its motion forpostponement as well as the order striking out the testimony of Ivo Lazzari were issued ingrave abuse of discretion and should be set aside. Before going any further, however, it maybe mentioned that since defendant has not assigned as error, although it discusses in itsbrief, the denial of its last motion for reconsideration, plaintiff contends that such failureconstitutes a bar to any further consideration of the merits of the arguments of defendantrelative to the main denial-of-postponement and striking-out orders. To be sure, there istechnical plausibility in such pose of plaintiff, but considering the importance of the othermatters involved in this case, it would serve the interests of justice more if We passed on themerits of the substantial issues in this controversy. After all, "this Court is clothed with ample

authority to review matters, even if they are not assigned as errors in the appeal, if it findsthat their consideration is necessary in arriving at a just decision of the case." (Saura Import& Export Co., Inc. vs. Philippine International Surety Co., Inc., L-15184, May 31, 1963, 8SCRA 143.) And considering the inter-relation between the omitted assignment of error andthose actually assigned and discussed by defendant's counsel, We can apply here the rulingin Hernandez vs. Andal, 78 Phil. 196, to the effect that "an unassigned error closely related toan error properly assigned or upon which the determination of the question raised by theerror properly assigned is dependent, will be considered by the appellate courtnotwithstanding the failure to assign it as an error." (at pp. 209-210.)

Now, with respect to defendant's first assignment of error, We feel that the rather extendedrecital We have made above of the incidents and proceedings related to the trial court's orderdenying defendant's motion for postponement of the hearing set for September 28, 1966 isself-revealing. It argues against the charge that His Honor's order of denial was improper andunjustified.

The case had been pending for about three years and had actually suffered during thatperiod even more than the usually permissible number of continuances, quite often to suitthe convenience of defendant's counsel. Notice of the September 28, 1966 schedule had



been served on counsel the month previous. It must be assumed that due preparations andarrangements were to be made since the receipt of that notice to insure the presence inManila for the expected witnesses on the date set. Under the circumstances, the excuse givenby defendant that the witnesses could not leave their respective stations and places of work to attend the trial is plainly unacceptable. There was enough time and opportunity fordefendant to have made the corresponding adjustments in the assignments of its personnelso as to enable its witnesses to be in court. The trouble is that defendant relied on the

assumption that the court could be made to wait until the volume and other conditions of itsbusiness would permit it to comply with the schedule of the court. For an airline companyengaged in international transportation and presumably having all the facilities to have any of its employees available practically anywhere in the world at a moment's notice, if it only took due care to do this, defendant's attitude cannot be countenanced.

What is more, the motion of September 24, 1966 gave no reason at all why defendant'switnesses supposed to come from Rome would be unable to be at the trial. Even as late as

the day of the hearing, September 28, 1966, the court could not be told the reason for suchinability. All that counsel could say was that she "intend(ed) to inquire and file theexplanation" later. This was not as it should have been, for the telex advising the Manilaoffice that the witnesses would not be available was received on September 22nd yet, andcertainly there was enough time to investigate and find out the reason for such unavailability.

And as no justifiable reason could be advanced in support of the verbal motion forreconsideration. We cannot say that His Honor acted improperly when he denied the same.

We reiterate, the case had been pending for more than three years, with so manypostponements, and the least that defendant should have done to merit favorable action on

the part of the trial judge was to be ready with an explanation of its inability to proceed withthe trial, giving the detailed and good reasons therefor. As it is, there was actually no basis atall for the exercise of discretion on the part of the trial judge in a manner favorable to it.Trials may be postponed because of the absence of evidence only when such absence is

justified. Mere absence is not a justification in itself. Section 4 of Rule 22 is sufficiently clearon this point. It provides that "A motion to postpone a trial on the ground of absence of evidence can be granted only upon affidavit showing the materiality of evidence expected tobe obtained, and that due diligence has been used to procure it." This means that it must beshown to the court that due diligence had been exercised in either securing the presence of

the evidence (witnesses) or preventing the absence thereof.

There is, of course, defendant's motion for reconsideration of October 19, 1966 praying forthe setting aside of the court's order of denial as well as the other order striking out thetestimony of witness Lazzari. But, as already noted, the only excuse given in said motion isthat:

". . . The witnesses in question could not come because of certain circumstances thatrendered their coming over virtually impossible. Both witnesses, Ivo Lazzari andSaverino Casilli are employees of defendant company at the Rome office. The air



traffic in Rome has been particularly heavy this season. Some of the personnel of the Lufthansa Rome office were on leave and these two employees had to assumesome of the duties of those employees who were on leave, aside from performingtheir own regular duties. If they were to leave their posts to come for the hearing onSeptember 28, there would be grave disruption to the public service and for thisreason they were not able to come. . . ." (Page 47, Rec. on Ap., p. 32, Record.)

Indeed, even if such reason were given earlier on September 24, 1966 the court wouldhave been as well justified in denying the requested postponement. We cannot see anyreason why, despite its having knowledge of the date of the hearing about a monthbefore, defendant did not see to it that its expected witnesses were not assigned to doduty on the day they were supposed to appear in court. We cannotbelieve Lufthansa could be so undermanned that such a simple adjustment of itspersonnel had to be "impossible."

Moreover, the Rome based witnesses were not the only possible witnesses of defendant. Tobegin with, Mr. C.H. Dehio, the IATA Agency Manager, Far East and

Australasia, Lufthansa German Air Lines, who, according to the record, had already attendedprevious hearings as a prospective witness could have been made to go to court. There isnothing in the record to show that he was also rendered incapable of doing so. Then therecould still be local witnesses. it is no excuse that presenting other witnesses would havedisrupted the presentation of defendant's case, for parties may be allowed to maintain theirown way of presenting their evidence only where this can be done without injury to theexpeditious disposition of the case and the best interests of the administration of justice.

Coming now to the second assigned error regarding the striking out of the unfinishedtestimony of Lazarri, the Court is also of the opinion and so holds that the trial court's action

cannot be categorized as arbitrary or oppressive or as amounting to a grave abuse of discretion. To be sure, this second order was but a logical consequence of the previous orderdenying defendant's motion for postponement. With such denial, the next thing in order wasto declare the presentation of evidence of the defendant terminated. Accordingly, it wasnecessary to determine what evidence could be considered to be for the defendant. And sowhen counsel for plaintiff asked the court to strike out the testimony so far given by Lazarri,there was practically no alternative for the court but to grant the same. Indeed, defendant'scounsel could not and did not offer any objection thereto.

Oral testimony may be taken into account only when it is complete, that is, if the witness has

been wholly cross-examined by the adverse party or the right to cross-examine is lost whollyor in part thru the fault of such adverse party. But when cross-examination is not and cannotbe done or completed due to causes attributable to the party offering the witness, theuncompleted testimony is thereby rendered incompetent.

The right of a party to cross-examine the witnesses of his adversary is invaluable as it isinviolable in civil cases, no less than the right of the accused in criminal cases. The expressrecognition of such right of the accused in the Constitution does not render the right theretoof parties in civil cases less constitutionally based, for it is an indispensable part of the due



process guaranteed by the fundamental law. Subject to appropriate supervision by the judgein order to avoid unnecessary delays on account of its being unduly protracted and to neededinjunctions protective of the right of the witness against self-incrimination and oppressive andunwarranted harassment and embarrassment, a party is absolutely entitled to a full cross-examination as prescribed in Section 8 of Rule 132 thus: "Upon the termination of the directexamination, the witness may be cross-examined by the adverse party as to any mattersstated in the direct examination, or connected therewith, with sufficient fullness and freedom

to test his accuracy and truthfulness and freedom from interest or bias, or the reverse, and toelicit all important facts bearing upon the issue." Until such cross-examination has beenfinished, the testimony of the witness cannot be considered as complete and may not,therefore, be allowed to form part of the evidence to be considered by the court in decidingthe case.

In the case at bar, however, We have opted not to rely exclusively on the foregoingconsiderations. In order to satisfy Ourselves as to whether or not defendant stands to beirreparably prejudiced by the impugned action of the trial court relative to the testimony of Lazzari, We have just the same gone over the transcript thereof. After considering the same,

however, We are of the impression that even his direct testimony, without taking intoaccount anymore his answers to the cross-examination questions of counsel for plaintiff,cannot be of much weight in establishing the defenses in defendant's answer. But it wouldseem more appropriate to elaborate on this point when We come to the discussion of themutual accusation of the parties that the trial court erred in the portion of its discretionawarding damages to plaintiff.

The last issue submitted for Our resolution relates to the award of damages made by the trialcourt in favor of Ortigas against Lufthansa in the amounts aforestated, as to which, asalready noted at the outset, both parties have appealed taking opposite positions. In thisrespect, the appealed decision made the following findings and discussion of the materialfacts:

"In October, 1963, the Sharp Travel Service, the travel department of C. F. Sharp,Inc., the majority interest in which is held by Rocha y Cia., Inc., General Agents of thedefendant, Lufthansa German Airlines, issued to the plaintiff First Class Pan AmericanTicket No. 026492 147076 to 81 which would take him from Manila, the place of departure, to Hongkong, various cities in the United States, Europe, Asia, the FarEast, and then back to Manila, the place of destination. Ortigas' ticket for all thesedifferent legs of his journey was first class.

He left Manila October 12, 1963, as scheduled. In New York, he decided to leave outsome cities, included in his original itinerary, to be in Hongkong on the 19th day of November, 1963, for several appointments he had there. He went to the Trans World

Airlines and had his Pan American ticket changed with First Class TWA Ticket No. 115-460-451-878 to 881. His TWA ticket was also first class for the entire trip from New

York to several European cities, including Rome, and thence to the Far East, withManila also as the place of destination.



Ortigas arrived in due course in Rome. To be sure be could fly first class to Hongkongon November 18, 1963, for his appointments there the next day,Ortigas repaired tothe office of the Alitalia on Saturday, November 16, 1963, to book passage. The manat the counter of the Alitalia office told him it had no flight on Monday butthe Lufthansa had. The man thereupon called up the office of the Lufthansa and, aftertalking to an employee thereof, told Ortigas that the Lufthansa had no first class, butonly economy, seats available on its Monday flight.

Ortigas answered that he was not willing to take an economy seat and requested theemployee to call up other airlines. Then the phone rang. The employee answered andafterwards informed Ortigas that the Lufthansa had a first class seat available for itsMonday flight. Ortigas immediately asked him to get the seat and to see to it that histicket be confirmed and validated for the flight and a first class seat. The manthereafter asked for Ortigas' passport and other travel papers and attached avalidating sticker (Exhibit 'D-1') on flight coupon No. 4 (Exhibit 'B') whichcorresponded to the Rome-Hongkong leg of his TWA Ticket No. 115-460-451-878.The sticker recites:

FlightRes.

CarrierNo.DateTimeStatus

LH64618 Nov.12:35 P.M.O.K.

Wishing to be doubly sure, Ortigas again requested the Alitalia employee to call back the Lufthansa office to recheck whether his ticket was really confirmed and validated.The man did so, after which he told Ortigas that his ticket had been checked,validated, and confirmed as shown by the word 'O.K.' on the sticker. The same

employee later wrote on the cover of the plaintiff's ticket '10.15 Terminal-36, viaGioliti' (Exhibits 'C' and 'C-1') and told him to be in the air terminal on Monday,November 18, at 10:00 A.M.

The following Monday, Ortigas checked out of his hotel and took a taxi to theterminal, arriving there about 9:30 A.M. He unloaded his baggage and proceeded tothe counter in charge of the Lufthansa passengers. The lady at the counter told himthe Lufthansa had no space for him that day. Ortigasrequested her to check with hermain office, which she did by calling it up. After calling, she apologized and said theplaintiff's ticket was in order and would be confirmed and validated. On herrequest, Ortigas had his luggage weighed and was given the free luggage allowanceof a first class passenger. He was furthermore asked to pay 800 liras for bus fare and700 liras as embarkation tax. Then Ortigas, along with other passengers, one of whom was Amado Castro of the Development Bank of the Philippines, boarded a busfor the airport.

At the airport, the plaintiff handed over his ticket to the man behindthe Lufthansa counter, who told him everything was all right. At that juncture, theplaintiff heard his name called. He inquired if he was being called from an employeeof the Lufthansa and, on receiving an affirmative answer, said he wasOrtigas. Theemployee asked for his passport and other papers and, after examining his passport,



where his Filipino nationality appears, said he could not board the plane that daybecause his seat would be given to a Belgian. Ortigas asked the man why he wasdoing that to him when his ticket was confirmed and validated first class.The Lufthansa employee replied he was sorry but Ortigas could not leave.

Fearing he would have a recurrence of his heart ailment, Ortigas took a nitroglycerinpill which his doctor advised him to take on occasions of stress. The plaintiff then toldthe Lufthansa man to bring the Belgian over so that his papers may be examined todetermine whether he had a preferred right to Ortigas'seat butthe Lufthansa employee turned down the request, raised his voice, and said if theplaintiff desired, he could take an economy seat and he would be allowed arefund. Ortigas retorted he was not interested in a refund and what he wanted was totravel first class in accordance with his ticket.

This argument occurred in the presence of the other passengers, one of whom was Amado Castro, and the plaintiff felt embarrassed and humiliated becausethe Lufthansa employee was shouting at him and treating him the way hedid. Ortigas made another request, namely, that the employee call other airlines to

inquire if they had flights to Hongkong that day but he once more turned down theplea and insisted that Ortigas travel economy, with the promise that he will betransferred to first class in Cairo and onward to Hongkong.

After promising to, the man went inside a room and, after a while, came out andassured the plaintiff he would travel first class from Cairo to Hongkong because hesent a communication that it should he done. He then jotted down some letterson Ortigas' ticket. The plaintiff replied he was not satisfied with the arrangement butwas constrained to agree to it because he had to be in Hongkong the next day, hisluggage was in all probability already inside the plane, he was not certain he couldstill secure a hotel reservation, the manager of the hotel where he shyed having told

him it would be hard for him to get another reservation once he checks out, and hewas assured he would be given first class passage from Cairo onward.

Upon arrival in Cairo, the plaintiff requested the Lufthansa agent to transfer him tofirst class but the agent said he could not and that he did not receive anycommunication from Rome to that effect. Ortigas also requested the man to find out if there were other airlines having planes leaving that day but his request was likewisedenied. The man, however, promised that at Dharham, Ortigas will be transferred tofirst class. Ortigas had no alternative but to continue traveling as before but he did soagain under protest.

At Dharham, the plaintiff once more requested a transfer to first class but was alsotold by the Lufthansa agent that he had not received any communication about thechange and the request could not be granted. The plaintiff had to travel perforceeconomy from Dharham. In Calcutta, Ortigas once again requested a transfer or thathe be assisted in booking passage on other planes but was also refused. It was onlyin Bangkok when the chief steward asked him if he wanted to move over to first classbut having been already embarrassed and humiliated and the trip to Hongkong beingonly three hours, he said he would not as a sign of protest.



In Hongkong, Ortigas protested against the treatment given him but was told bythe Lufthansa office he had to file his protest in Manila, it being the point of destination. He did so by means of a letter, dated November 25, 1963 (Exhibit "F"),followed by another letter, dated December 20, 1963 (Exhibit "C"), and not havingreceived any definite answer, he brought this suit.

Although Ortigas' ticket for the flight from Rome to Hongkong was validated andconfirmed by the Alitalia, its act bound and obligated the Lufthansa. The Alitaliaand Lufthansa are members of the International Air Transport Association (IATA). It isadmitted that as such member, the Alitalia can issue tickets for other members of theassociation like the Lufthansa, Pan American World Airways, and others. Par. 10,Order of April 29, 1964, and Exhibit "H", certification of the manager of the Alitalia.

Aside from being members of the IATA, the Alitalia and Lufthansa are pool partnersand conduct a joint service with interchangeable flights for the European-Far East-and

Australia sectors. Par. 11, Order of April 29, 1964. Under the pool agreement (Exhibit"DD") they undertake to adhere to the appropriate IATA regulations and to takemeasures to provide district sales offices with every possibility for close cooperation inthe promotion of the pool services covered by the agreement, including "reservation

and booking". They furthermore, in effect confirm in the agreement that tickets of one, other than free and reduced tickets, may be validated by the other.

Finally, Manuel Otayza, general manager of Filital, Inc., which is the general agent of the Alitalia in the Philippines, testified that space reservation through telephone callsbetween airlines is permitted by IATA's, 'Manual of Traffic Conference Resolutions'and that telephone calls for reservation by one airline to another is in fact acceptedprocedure in accordance with the official airline guide of the Air Traffic Conferenceand International Air Transport Association (Exhibit "W")

The placing by the Alitalia of a sticker on the plaintiff's ticket obligated

the Lufthansa to give him a first class seat on its flight from Rome to Hongkong onNovember 18, 1963. The same witness, Manuel Otayza, testified that the placing of avalidating sticker on a ticket is standard airline procedure; that a sticker changes arestatus of a reservation; that consequently while Ortigas' ticket was "open", that is, ithad no reservation for a particular flight between Rome and Hongkong, the moment avalidating sticker was placed thereon, stating the flight number of the airline, the dayand hour of departure, with the letters "O.K", his ticket was changed from an "open"to a "confirmed" or "validated" ticket; and that the sticker on Ortigas' ticket meantthat first class space was confirmed for him on Lufthansa flight 646 to Hongkong onNovember 18, 1963, at 12:35 P.M.

Aside from Otayza's testimony, it is admitted that in the stipulation of facts that "theletters 'O.K.' (Exhibit D-2) appearing on the 'Res. Status' box of the sticker (Exhibit D-1) attached to Flight Coupon No. 4 of TWA Ticket No. 015-410: 451-880 (Exhibit "D")means space confirmed', per IATA Resolution 275, page 4, Issue 2, a photostatic copyof which is attached hereto as Exhibit 'O'; that validate' means to stamp or write onthe passenger ticket an indication that the passenger ticket has been officially issuedby the carrier; that "the placing of a sticker on a flight coupon is a revalidation thereof for the flight mentioned in said sticker and is an alteration effected on said coupon, inaccordance with the procedure laid down in IATA Resolution 275d, Page 1, Issue 1, a



photostatic copy of which is attached thereto as Exhibit 'S'"; and that "priorendorsement was not necessary for Alitalia to revalidate TWA Ticket No. 115-410-880Exhibit "D") because Alitalia is the carrier originally designated in the 'Via carrier' boxof said ticket, in accordance with IATA Resolution No. 279, photostatic copy of whichis attached hereto as Exhibit 'T' ".

There was, therefore, a valid and binding contract between Lufthansa and the plaintiff to transport him as a first class passenger from Rome to Hongkong on November 18,1963, and this agreement the defendant violated by compelling the plaintiff to travelas an economy passenger. It cannot be said the breach was the result of an honestmistake or excusable negligence. There is evidence the defendant acted with bad faithand in wilful disregard of the plaintiff's rights.

Ortigas' ticket was confirmed on the early morning of November 16, 1963, more than43 hours before his departure on the afternoon of November 18. There was,therefore, ample time to send a telex message from Rome to the defendant's mainoffice in Frankfurt, which is only about 2-1/2 flying hours away, to reserve a first classseat for the plaintiff.

At the terminal on Via Gioliti, he was again told that he had a first class seat, hisluggage was checked in divesting him of control thereof, and transported to theairport some 37 kilometers distant. He was in this manner deprived of the opportunityof availing himself of the facilities of other airlines and compelled to takethe Lufthansa flight even against his will.

In the airport, although he was found entitled to fly first class, he was told after hisFilipino passport was seen, that his seat would be given to a Belgian, without any

reason or explanation whatsoever. His simple request that the Belgian's ticket beproduced and examined to see who had a better right to a first class seat was turneddown. So was his equally simple request that other airlines be called to find out if anyof them could accept him as a first class passenger to Hongkong that day. He wasdeceived into boarding the Lufthansa plane at Rome by falsely assuring him he will betransferred to first class at Cairo, the next stop in the flight. The same false anddeceptive promise was given him at Dharham and Calcutta.

Indubitable proof of the defendant's bad faith is found in the fact that while itsemployee was assuring the plaintiff be would be transferred to first class in Cairo, he

was at the same time writing on his ticket the following notation: 'TRVLDY/c ROMEHEG ROME ST', which means 'Travelled economy class Rome to Hongkong St',thereby barring Ortigas from asserting any right to demand first class accommodation.The defendant's employee, therefore, knew all along the plaintiff would not travel firstclass, and yet he deliberately made him believe he would be transferred to first classfrom Cairo to Hongkong.

From the circumstances, it is clear that the defendant not only breached its duty tothe plaintiff but also did not want to release him as a passenger and wished to hold



on to him even if it would cause him inconvenience and embarrassment." (Pages 97-109, Record on Appeal.)

Disputing the foregoing conclusions, Lufthansa claims firstly that the Alitalia employee whovalidated and confirmed Ortigas' reservation must have made a mistake because actually, hewas informed by the Lufthansa Rome office that Ortigas could only be waitlisted. Assuming,however, there was such an error, it has been indisputably proven that under the so-called

pool arrangement among different airline companies pursuant to the International AirTransport Association (IATA) agreement of which Alitalia and Lufthansa are signatories, bothcompanies are constituted thereby as agents of each other in the issuing of tickets and othermatters pertaining to their relations with those who would need their services, and sincethere can be no question that on its face, the annotations made by Alitalia on the ticket herein dispute cannot have any other meaning than that the reservation of Ortigas for the Rome — Hongkong flight was validated and confirmed, Lufthansa'sdisclaimer is unavailing. Besides,it appears that when Ortigas checked in at the airport, the Lufthansa lady employee thereattold him, after making the proper verification, that the reservation was correct. What is more,in the unconcluded testimony of Ivo Lazzari, the striking out of which is questioned

by Lufthansa, he admitted that it was a fact that the said reservation of plaintiff for first classwas confirmed, albeit he qualified that this was done already in the morning of November18th, the day of the flight, almost at the last hour. What seems to have happened was thatsomehow the first class accommodations for that flight were overboard and Lufthansa tried tosolve the problem by downgrading Ortigas to the economy class in favor of a Belgian,as Ortigas was told by the Lufthansaemployee who paged him over the public address systemfor the purpose just as he was about to go to the departure area, with his luggage alreadychecked and his overweight fees duly paid, so much so that they were already loaded in theplane. Verily, such treatment given to plaintiff was completely wrong and absolutelyunjustifiable. Nobody, much less a common carrier who is under constant special obligation togive utmost consideration to the convenience of its customers, may be permitted to relieveitself from any difficulty situation created by its own lack of diligence in the conduct of itsaffairs in a manner prejudicial to such customers. It is Our considered view that when itcomes to contracts of common carriage, inattention and lack of care on the part of the carrierresulting in the failure of the passenger to be accommodated in the class contracted foramounts to bad faith or fraud which entitles the passenger to the award of moral damages inaccordance with Article 2220 of the Civil Code. But in the instant case, the breach appears tobe of graver nature, since the preference given to the Belgian passenger over plaintiff wasdone willfully and in wanton disregard of plaintiff's rights and his dignity as a human being

and as a Filipino, who may not be discriminated against with impunity.

Lufthansa contends, however, that there could not have been any possible discrimination byreason of race against Ortigas because from his appearance, said plaintiff can easily be takenfor a European or white more than his own witness Amado Castro and besides, there wereother orientals in the same flight on that occasion. It is argued that any such policy would beself-defeating, since it would certainly be damaging to its own business. Again, thisratiocination cannot carry the day for Lufthansa, for what appears from the evidence in thiscase is not really a case of a general policy of discriminating against orientals or non-whites,but a specific act of Lufthansa's employee at the airport of giving preference to a Belgian



after examining Ortigas' passport wherein his Filipino nationality is noted. Indeed, the factthat despite plaintiff's protestations and demand that he be shown how it could happen thatsomebody else, particularly that Belgian, should be given his place when his reservation wasvalidated and confirmed and actually, he had already checked in and his luggage was alreadyin the plane, nothing was done to satisfy him, merely infused bad faith into the breach of contract already committed of depriving plaintiff of his reserved accommodation. In otherwords, from the legal standpoint, such preference given to a European surely aggravated the

damage or injury suffered by plaintiff, but the very act alone of deliberately downgrading himdespite his confirmed reservation for first class accommodation is sufficient ground for relief.

And considering that there are already recorded cases in this Court wherein Filipinos havebeen similarly discriminated against by foreign airline company employees in the treatment of passengers, this new instance can easily be believed and correspondingly dealt with in fixingand assessing the liability of herein defendant.

As found by the court below what worsened the situation of Ortigas wasthat Lufthansa succeeded in keeping him as its passenger by assuring him that he would begiven first class accommodation at Cairo, the next station, the proper arrangements therefor

having been made already, when in truth such was not the case. Thus, instead of complyingwith the request of Ortigas that other airlines be contacted to find out if they had first classspace for him, the Lufthansa employee who had indifferently told him about his downgradingpaid very little attention if ever to said request. And to keep him from giving the business toanother company, he was made to believe that he would be given first class accommodationat Cairo. Although molested and embarrassed to the point that he had to take nitroglycerinepills to ward off a possible heart attack, Ortigas hardly had any choice, since his luggage wasalready in the plane. To his disappointment, when the plane reached Cairo, he was told bythe Lufthansa office there that no word at all had been received from Rome and they had nospace for him in first class. Worse, similar false representations were made to him atDharham and Calcutta. It was only at Bangkok where for the first time, Ortigas was at lastinformed that he could have a first class seat in that leg of the flight, from Bangkok toHongkong. This Ortigas rejected, if only to make patent his displeasure and indignation atbeing so inconsiderately treated in the earlier part of his journey.

Lufthansa insists in its brief that it could have proven that there was no such "entrapment of a captive passenger" had it been allowed the postponement it sought of the September 28,1966 hearing. It is argued that there could have been no way by which its Rome office couldhave assured Ortigas about what he would be given in Cairo, the flight being fully booked as

it was without any assurance of any first class seat being vacated by then. We are notimpressed. In view of the insistence of plaintiff that he be given the first classaccommodation he had contracted and paid for, the least that the Rome office should havedone was to communicate with Cairo and strongly urge that all possible effort be made tocomply with his well grounded request. As it happened, however, the Cairo officeinformed Ortigas when he arrived there that they had not received any word at all fromRome. On the contrary, as pointed out by the trial court, contrary to the verbal assurancegivenOrtigas, the Lufthansa employee made annotations on his ticket that he was travellingeconomy class from Rome to Hongkong. If, as contended by Lufthansa,Ortigas was dulyadvised to make arrangements for transfer to first class as soon as he arrived at each station



on the way, why was such notation made that he was travelling up to Hongkong in economyclass? All these only go to show that any evidence of defendant tending to disprove thetestimony of Ortigas would in any event have been inconclusive or unreliable.

Likewise, Lufthansa maintains that it could have proven that Ortigas did not take offense at

being downgraded, as in fact, according to Lufthansa, he was in jovial mood throughout thetrip enjoying his conversation and exchange of amenities with his seatmate, who by strangecoincidence happened to be the Manager ofLufthansa German Airlines for the district of

Australia and New Zealand holding said position since 1962. 1 Moreover, it is argued, theeconomy class accommodations are not much different from first class and Ortigas was notdelayed in his trip. We cannot see the point. A passenger contracts for first classaccommodations for many reasons peculiar to himself and pays a higher price therefor, and itis certainly not for the airplane to say later, after it deprives him of his space in order to favoranother passenger, that economy class is anyway just as good as first class. That Ortigas wasrightfully indignant is not difficult to imagine. No person in his normal senses and possessed

of human dignity would have been unperturbed and unruffled by the treatment he hadreceived. More, he was under express admonition of his doctor taking care of his ailingcoronary condition to travel only in first class. Indeed, that he complained and made himself emphatically clear while still in Rome is sufficiently substantiated in the record, as it was moreor less admitted by defendant's witness Lazzari when he testified that he heard aboutplaintiff's complaint that same day, November 18, 1963.

In the light of all the foregoing, there can be no doubt as to the right of Ortigas to damages,both moral and exemplary. Precedents We have consistently adhered to so dictate. Beginningwith Cuenca, 2 wherein the Court rejected the theory that an air carrier is liable only in the

event of death or injury suffered by a passenger, because, according to the Court, to so holdwould be tantamount to declaring the carrier "exempt from any liability for damages in theevent of its absolute refusal, in bad faith, to comply with a contract of carriage, which isabsurd", We have uniformly upheld the right of a passenger to damages in all cases wherein,after having contracted and paid for first class accommodations duly confirmed and validated,he is transferred over his objection to economy class, which he has to take in order to be ableto arrive at his destination on his scheduled time.

In the case of Nicolas L. Cuenca, then Commissioner of Public Highways of the Philippines, heboarded a Northwest plane in Manila with a first class ticket to Tokyo, but upon arrival atOkinawa, an agent of the company rudely compelled him, over his protest, to move over tothe tourist class, which he had to do, so he could reach the international conference he wasattending on time. Under these facts, the Court held that the P20,000 awarded by the lowercourt to Cuenca "may well be considered as nominal and also as exemplary, the Court of

Appeals having modified the trial court's designation thereof as moral, saying it should havebeen nominal.

In Lopez 3 , Honorable Fernando Lopez, then an incumbent senator and former Vice Presidentof the Philippines, together with his wife and his daughter and son-in-law, made first class

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reservations with the Pan American World Airways in its Tokyo-San Francisco flight. Thereservation having been confirmed, first class tickets were subsequently issued in their favor.Mistakenly, however, defendant's agent cancelled said reservation, but expecting somecancellations before the flight scheduled about a month later, the reservations supervisordecided to withhold the information from them, with the result that upon arrival in Tokyo, theLopezes discovered they had no first class accommodations and were thus compelled to takethe tourist class, just so the senator could be on time for his pressing engagements in the

United States. In the light of these facts, the Court held there was a breach of the contract of carriage and viewed as the element of bad faith entitling the plaintiffs to moral damages forsuch contractual breach, the failure of the agents of the defendant to inform the plaintiffs ontime that their reservation for first class had long before been cancelled by mistake.

According to the Court, such omission placed plaintiffs in a predicament that enabled thecompany to keep the plaintiffs as their passengers in the tourist class, thereby retaining thebusiness and promoting the company's self-interest at the expense of, embarrassment,discomfort and humiliation on the part of the plaintiffs.

In Air France vs. Carrascoso, 4 plaintiff Mr. Rafael Carrascoso, a civil engineer who was going

to Lourdes, France, as a member of a religious group of pilgrims was issued by the Philippine Air Lines, as agent of the defendant Air France, a ticket for first class round trip from Manilato Rome. From Manila, Carrascoso travelled first class, as per said ticket, but at Bangkok, theManager of the defendant airline forced him to vacate the first class seat because there was awhite man who allegedly had a better right thereto, without, however, showing him the basisfor such preference. Upon these factual premises, the Court held:

"It is really correct to say that the Court of Appeals in the quoted portion firsttranscribed did not use the term 'bad faith'. But can it be doubted that the recital of facts therein points to bad faith? The manager not only prevented Carrascoso from

enjoying his right to a first class seat; worse, he imposed his arbitrary will; he forciblyejected him from his seat, made him suffer the humiliation of having to go to thetourist class compartment — just to give way to another passenger whose rightthereto has not been established. Certainly, this is bad faith. Unless, of course, badfaith has assumed a meaning different from what is understood in law. For, 'bad faith'contemplates a 'state of mind affirmatively operating with furtive design or with somemotive of self-interest or ill will or for ulterior purpose.' (Words & Phrases, Perm. Ed.,

Vol. 5, p. 13, citing Warfield Natural Gas Co. vs. Allen, 59 S.W. (2d) 534, 538.)

And if the foregoing were not yet sufficient, there is the express finding of bad faith in

the judgment of the Court of First Instance, thus:

'The evidence shows that defendant violated its contract of transportation with plaintiff in bad faith, with the aggravating circumstances that defendant's Manager in Bangkok went to the extent of threatening the plaintiff in the presence of many passengers to have himthrown out of the airplane to give the 'first class' seat that he was occupyingto, again using the words of the witness Ernesto G. Cuento, a 'white man'whom he (defendant's Manager) wished to accommodate, and the defendanthas not proven that this 'white man' had any 'better right' to occupy the 'firstclass' seat that the plaintiff was occupying, duly paid for, and for which the







corresponding 'first class' ticket was issued by the defendant to him.' (R.A., p.74; emphasis supplied.) (at pp. 166-167.)

These precedents, as may be seen, apply four-square to herein plaintiff's case. Defendant'sliability for willful and wanton breach of its contract of carriage with plaintiff is, therefore,indubitable.

Coming now to the amount that should be awarded by way of damages to the plaintiff, it isalso the teaching of the cases aforecited that defendant is liable not only for moral but alsofor exemplary damages. As earlier stated, the court below fixed the compensation for moraldamages at P100,000 and the exemplary at P30,000. The Court believes that these amountsare not enough.

According to the lower court:

"Although the plaintiff has not held any elective public office, he has however, adistinguished record as a private citizen, a lawyer, businessman, a civic and religiousleader, a member of numerous government boards and organizations as well as of local and international bodies, and is the recipient of awards and citations foroutstanding services and achievements.

He was, and still is, moreover suffering from a heart ailment and has been advised byhis physician to travel first class because it is more relaxing and comfortable. Hisposition as chairman of the boards of directors of the corporation he represented alsorequired that he travel in that manner. He was, furthermore, carrying a specialpassport issued by the Philippine Government to represent it and businesscorporations abroad.

His sickness and the need for him to travel in the most comfortable manner possiblewere made known to the defendant's employee, but he paid no heed to them.Instead, he engaged Ortigas in a heated discussion, summarily brushed off hisprotests and pleas, humiliated him, and tricked him into boarding his employer'splane, endangering thereby his health and obliging him to take medicine to forestallan attack.

There is, finally, evidence that he was discriminated against because of his nationality,for he was told to yield his first class seat to a Belgian only after his passport wasexamined and his Filipino citizenship must have been noted.

"Under the circumstances and measured by the criterion jurisprudence has followed,the compensation the plaintiff should be entitled to receive must be fixed atP100,000.00 as moral damages, P30,000.00 as exemplary damages or correctivedamages, and P20,000.00 as attorney's fees." (Pp. 111-113, Record on Appeal.)

We have reviewed the evidence and We are convinced there is more than ample basis forthese findings. But under the circumstances revealed in the record, it is Our consideredopinion that the award of moral damages should be increased to P150,000.



We cannot go along with defendant's pose that in Cuenca the amount awarded was onlyP20,000, for the very obvious reason that in that case what was involved was only one leg of the flight contracted for, namely, that from Okinawa to Tokyo, whereas in the case not atbar, the offense was repeated four times, at Rome, Cairo, Dharham and Calcutta, withapparent cold indifference of defendant's agents to plaintiff's plight. Besides, it appears thatCuenca did not appeal from the trial court's decision fixing said amount, hence there was nooccasion for the Supreme Court to award more. This was also what happened in the

Carrascoso case, where the plaintiff did not complain against the award of only P25,000-moral-and-P10,000-exemplary damages made by the trial court. It was Air France whoclaimed that these were even excessive. Verily, however, such discriminatory acts of thedefendants in those cases which were not only violative of their contractual obligations butalso offensive to human dignity and national or racial pride constitute about the most

justifiable ground for the award of moral damages, for the resulting injury therefrom cannotbut cause immense mental anguish, besmirched reputation, wounded feelings, moral shock and social humiliation. (See Article 2217 of the Civil Code.) We reiterate, they are to beconsidered as infecting with bad faith the breach of contract committed, under Article 2220 ofthe same Code. (Lopez vs. Pan Am., supra.)

Lufthansa suggests that compared to the P100,000 awarded to Vice President Lopez in thecase aforementioned, the P100,000 given by the trial court to Ortigas are "grossly excessive".It does not appear to Us to be so. As pointed out by His Honor, "although plaintiff has notheld any elective public office, he has, however, a distinguished record as a private citizen, alawyer, businessman, a civic and religious leader, a member of numerous boards andorganizations as well as local and international bodies, and is the recipient of awards andcitations for outstanding services and achievements." Indeed, under the proven facts in therecord, We cannot regard plaintiff to be in any inferior position vis-a-vis Vice President Lopezin the highest circles of Philippine society and in the business and religious world, not tospeak of his standing in government officialdom.

Besides, there is again the disparity between the Lopez case and this one that here theoffense, which, as in Cuenca, is aggravated by the Lufthansa employee at Rome havingfalsely noted on the ticket that Ortigas was travelling in economy from Rome toHongkong, 5 was repeated four times in the same trip, namely, in Rome, Cairo, Dharham andCalcutta. More importantly, unlike in the case of Lopez, Ortigas was suffering from a weak

heart and was under doctor's advice to travel only in first class, hence, his being compelled tostay in economy or tourist class during the major part of his trip, must have given him addedapprehensive feelings about his safety. And, moreover, it is to be noted that in the Lopezcase, which was decided in 1966, aside from taking into account the personal circumstancesof the plaintiff, the Court considered "the present rate of exchange and the terms at whichthe amount of damages awarded would approximately be in U.S. dollars", hence, We may not

justifiably do differently here.

Furthermore, it may not be amiss to mention here that in Zulueta vs. Pan American World Airways, Inc., 43 SCRA 397, the Court awarded the plaintiffs: Zulueta, the husband, his wife







and a minor daughter, a total of P775,000 as damages, consisting of P500,000 as moral,P200,000 as exemplary and P75,000 as attorney's fees, apart from actual damages. In thatcase, the Zulueta's were coming home to Manila from Honolulu in a Pan-American plane. AtWake, however, where the plane arrived at 4:00 o'clock in the morning, Zulueta could not befound at flight time because, without letting anyone know, not even his wife or daughter, hehad relieved himself, according to him, at the beach behind the terminal. When at last, hewas found, the Pan-Am employee who first met him while walking back from the beach

remonstrated him thus: "What in the hell do you think you are? Get on that plane." Thisangered Zulueta who engaged the said employee in an exchange of angry words. In themeanwhile, the pilot who had been tipped by a "man from the State Department", also apassenger in that flight, that there might be a bomb in the plane and expressed apprehensionfor the safety of the flight unless Zulueta could be found, ordered the unloading of the bagsof the Zuluetas, and when three of the four of them had already been unloaded, he orderedZulueta to open them, but the latter refused. Another exchange of angry words followed, inthe course of which, according to Zulueta's evidence, the pilot went to the extent of referringto him and his family as "those monkeys" Ultimately, the plane left without Zulueta, albeit hiswife and daughter were on board, because the captain refused to allow Zulueta to board untilafter his bags were opened and inspected, which Zulueta refused entirely to do. Although,said decision is not yet final, because of the pendency of a second motion for reconsiderationthe Court has not yet resolved, the Court has already allowed the partial execution of the

judgment, thus enabling Zuluetas to collect already one-half of the amount or over P335,000,which amount, according to the concurring and dissenting opinion there of the writer of theinstant decision could be the least that should anyway be allowed. Of course, the Court didnot itemize the award but granted the same to the family as a whole, but it is evident that inthe final distribution, Zulueta would get for himself from at least P150,000 to not more thanP200,000. 6

We hold that the foregoing considerations justify the increase of the award of moral damagesfrom P100.000 to P150,000.

Finally, We have the dispute regarding the amount of exemplary damages awarded. In thisrespect, it is Our considered opinion that defendant should pay P100,000 instead of theP30,000 awarded by the trial court. The record of this case taken together with what arerevealed in the other similar cases decided by this Court, those aforediscussed, convinces Usthat defendant, as an airline, should be made to pay an amount that can really serve as adeterrent against a seeming pattern of indifference and unconcern, and what is worse, of

discrimination for racial reasons, discernible in the treatment of air passengers. This is not thefirst case, and unless the proper sanctions are applied, it does not appear it is going to be thelast yet, of instances wherein Filipino passengers having validated and confirmed tickets forfirst class would be shoved to the economy class, over their valid objections and without anyregard at all to their feelings and convenience, only to favor other passengers presumed bythe airlines to be of superior race, hence, deserving preference. It is high time everyoneconcerned were made to realize that the laws of the Philippines do not permit any act of discrimination against its citizens, specially when this accompanies a clear breach of contractual obligations of common carriers whose business is affected with public interest andmust be directed to serve the convenience and comfort of the passengers. When any







disregard of such laws is committed, the Supreme Court, as the interpreter of such laws,must exact the commensurate liability which they contemplate.

"Exemplary damages are required by public policy, for wanton acts must be repressed. Theyare an antidote so that the poison of wickedness may not run through the body politic."(Report of Code Commission, pp. 75-76) by authority of the decided casesaforediscussed, 7 acts of similar nature as those herein involved fall within the category of

those justifying the imposition of exemplary damages pursuant to the codal concept juststated.

"The rationale behind exemplary or corrective damages is, as the name implies, to provide anexample or correction for public good. . . . In view of its nature, it should be imposed in suchan amount as to sufficiently and effectively deter similar breach of contracts by defendant orother airlines." (Lopez v. Pan-American World Airways, supra; see also Rotea vs. Halili, 109Phil. 495; People vs. Medroso, Jr., G.R. No. L-37633, Jan. 31, 1975, 62 SCRA 245; CotabatoTimberland Co. Inc. vs. Plaridel Lumber Co., Inc., 13 SCRA 235) Thus, all relevant mattersconsidered, P100,000 of exemplary damages, which practically amounts only to not more

than $15,000 U.S. under the present rate of exchange, would serve the ends for which theliability has been conceived.

WHEREFORE, the judgment appealed from is modified by raising the award of moral andexemplary damages to plaintiff Ortigas to P150,000.00 and P100,000.00, respectively. In allother respects, including as to the payment of interests on the said amounts, the same isaffirmed.

PHILIPPINE RABBIT BUS LINES, INC. and NICASIO DE LOSREYES, petitioners , vs. PATROCINIO ESGUERRA, TRANSPORTCONTRACTORS, INC. and MODESTO JOAQUIN, respondents .

Angel A. Sison for petitioners.

Sycip, Salazar, Luna, Manalo & Feliciano for respondent Patrocinio Esguerra.

M.G. Palileo & F.T. Chua for respondents Transport Contractors Inc.

SYPNOSIS

Respondent Patrocinio Esguerra, a paying passenger in a bus of Philippine Rabbit Bus Lines,Inc., was seriously injured when said vehicles and a freight truck of Transport Constractors,Inc. sideswiped each other in the midle of the road. Esguerra filed an action for damagesagainst the owners of said vehicles and their respective drivers. The trial court dismissed thecomplaint against Transport Constractors, Inc. and Modesto Joaquin butordered Philippine Rabbit Bus Lines, Inc. and Nicasio de los Reyes to pay solidarily theplaintiff P25,085.40 as compensatory damages, P5,000.00 as moral damages, P 2,000.00 asattorney's fees and the costs of the suit. On appeal, the Court of Appeals modified the







compensatory damages to. P20,085.40 and ordered all four defendants to pay solidarily saidamounts to the plaintiff. On certiorari, petitioners Philippine Rabbit Bus Lines, Inc. and Nicasiode los Reyes contend that the award of P 5,000.00 moral damages is contrary to law and

jurisprudence; and that the award of P2,000.00 attorney's fees is without factual and legalbasis.

On review, the Supreme Court held that the instant case falls under the jurisprudential rule

that moral damages are not recoverable in actions for damages predicated on a breach of contract of transportation in view of the provisions of Articles 2219 and 2220 of the New CivilCode; but that with respect to the attorney's fee of P2,000.00, the same need not be provedand is allowed in the discretion of the court after considering several factors which arediscernible from the facts brought out during trial, such as its present in the instant casewhere respondent Esguerra as plaintiff in the lower court was compelled to litigate and incurexpenses in order to protect his interest.

SYLLABUS

1.CIVIL LAW; DAMAGES; MORAL DAMAGES GENERALLY NOT COVERABLE IN ACTIONS FOR DAMAGES BASED ON BREACH OF CONTRACT OF CARRIAGE. — This Court has repeatedlyheld (Cachero v. Manila Yellow Taxicab, Inc., G.R. No. L-8721, May 23. 1957; Necesito v.Paras, et al., G.R. Nos. L-10605-10606, June 30, 1958; Fores v. Miranda, G.R. No. L-12163,March 4, 1959; Tamayo v. Aquino, et al., G.R. No. L-12634, May 29, 1959) that moraldamages are not recoverable in actions for damages predicated on a breach of the contractof transportation, as in the instant case, in view of the provisions of Articles 2219 and 2220 ofthe New Civil Code.

2.ID.; ID.; ID.; EXCEPTION. —

The exceptions are (I) where the mishap results in the deathof a passenger, and (2) where it is proved that the carrier was guilty of fraud or bad faith,even if death does not result. (Rex Taxicab Co., Inc. vs. Jose Bautista, et at., G.R. No. L-15392, Sept. 30, 1960).

3.ID.; ID.; ID.; GENERAL RULE APPLIES TO CASE AT BAR. — The Court of Appeals foundthat the two vehicles sideswiped each other at the middle of the road. In other words, bothvehicles were in their respective lanes and that they did not invade the lane of the other. Itcannot be said therefore that there was fraud or bad faith on the part of the carrier's driver.This being the case, no moral damages are recoverable.

4.LEGAL ETHICS; ATTORNEY'S FEES; RECOVERABLE WHERE PLAINTIFF IS COMPELLED TOLITIGATE AND INCUR EXPENSES IN ORDER TO PROTECT HIS INTEREST; CASE AT BAR. — With respect to attorney's fee of P2,000.00, the same need not be proved as hereinpetitioners contended. The same is allowed in the discretion of the court after consideringseveral factors which are discernible from the facts brought out during the trial. In this case,plaintiff was compelled to litigate and incur expenses in order to protect his interest.



D E C I S I O N

RELOVA, J p:

In this petition for certiorari, petitioners pray that the portion of the decision of the Court of Appeals sentencing the Philippine Rabbit Bus Lines. Inc. to pay solidarily the sum of

P5,000,00 as moral damages and sentencing both petitioners to pay respondentPatrocinio Esguerra the sum of P2,000.00 as attorney's fees, be revoked.

Records show that the Court of First Instance of Manila rendered a decision in Civil Case No.53698, entitled: Patrocinio Esguerra versus Philippine Rabbit Bus Lines, Inc., Nicasio de losReyes, Transport Contractors, Inc. and Modesto Joaquin, the dispositive portion of whichreads:

"WHEREFORE, judgment is hereby rendered dismissing the complaint againstdefendants Transport Contractors, Inc. and Modesto Joaquin but sentencing

defendants Nicasio de los Reyes and Philippine Rabbit Bus Lines, Inc., jointly andseverally, to pay the plaintiff the sum of P25,085.40 as compensatory damages,P5,000.00 as moral damages, P2,000.00 as attorney's fees and the costs of suit. Thecross-claim of defendants Philippine Rabbit Bus Lines, Inc. and Transport Contractors,Inc. against each other are hereby dismissed."

The Court of Appeals modified the decision of the lower court as follows:

"From the foregoing it would appear that all the defendants are solidarily liable; butplaintiffs not having appealed the judgment, no affirmative relief therefrom whichabsolved defendants Transport Contractors, Inc. and Modesto Joaquin from thecomplaint as to make them co-responsible with appellantsRabbit Bus and Nicasio delos Reyes. Hence, except the obviously erroneous addition of the items forcompensatory damages which would be P20,085.40, not P25,085.40 as stated in thedispositive part of the appealed decision, the judgment appealed from is inaccordance with law and the evidence.

"WHEREFORE, modified as indicated above, the judgment appealed from is affirmedin all other respects, with costs against all the defendants."

However, in a resolution, dated December 8, 1969, the Court of Appeals modified the

dispositive portion of its decision promulgated on July 10, 1969 in the sense that:

". . . the defendants-appellees Transport Contractors, Inc. and Modesto Joaquin areordered to pay solidarily with the defendants-appellants Philippine RabbitBus Lines,Inc. and Nicasio de los Reyes sums awarded in the judgment, with costs in thisinstance against all the defendants."

Patrocinio Esguerra was a paying passenger of Bus No. 223 of Philippine Rabbit Bus Lines,Inc. He boarded the said bus at the Manila terminal about four o'clock in the afternoon of November 6, 1961, bound for San Fernando, Pampanga. He sat at the left-end of the fourth



row behind the driver, close to the window. As the busapproached barrio San Marcos,Calumpit, Bulacan, a freight truck owned and operated by the Transport Contractors, Inc.was coming from the opposite direction. The vehicles sideswiped each other. The windowglass near the driver's seat of the Rabbit Bus was detached and the left side of its body wasdamaged. The left forearm of Patrocinio Esguerra was hit by a hard blunt object, breakingthe bones into small fragments while the soft tissues of the muscles and the skin weremascerated. He was immediately brought to the Bulacan Provincial Hospital in Malolos,

Bulacan for treatment. The left arm was amputated.

Plaintiff filed a case against the Philippine Rabbit Bus Lines, Inc. and the TransportContractors, Inc., together with their respective drivers, praying that judgment be rendered infavor of the plaintiff and against the defendants requiring them to pay, jointly and severallydamages, actual and compensatory, moral and exemplary, litigation expenses and costs.

The Court of Appeals found that the two drivers of the two vehicles were reckless in driving.The two vehicles sideswiped each other at the middle of the road. Cdpr

"By and large, it is not denied that plaintiff's arm was so seriously injured as to needamputation as a result of the collision. It is neither denied that the Transcon truck hitthe arm when it came in contact with the Rabbit Bus. It is immaterial which part of the truck hit it. The defendant carrier failed to exonerate itself from its presumedfault."

In this petition, Philippine Rabbit Bus Lines, Inc. and Nicasio de los Reyes contend that theaward of P5,000.00 moral damages is contrary to law and violates the prevailing

jurisprudence; that the award of P2,000.00 attorney's fees is bereft of legal and factual basis;that moral damages are not allowable against the carrier, if ex-contracto, except when the

mishap results in death and where it is proved that the carrier was guilty of fraud or bad faitheven if death did not result; that as passenger Esguerra did not die and no fraud or bad faithhad been imputed, much less proved, against the carrier, they cannot be adjudged to paymoral damages. Further, petitioners claim that there is no evidence adduced bypassenger Esguerra showing actual proof of expenses for attorney's fees.

The contention of petitioners with respect to the award of moral damages is meritorious. ThisCourt has repeatedly held (Cachero v. Manila Yellow Taxicab, Inc., G. R. No. L-8721,promulgated May 23, 1957; Necesito v. Paras, et al., G. R. No. L10605-10606, promulgatedJune 30, 1958; Fores v. Miranda, G. R. No. L-12163, promulgated March 4, 1959; Tamayo v.

Aquino, et al., G. R. No. L-12634, promulgated May 29, 1959) that moral damages are notrecoverable in actions for damages predicated on a breach of the contract of transportation,as in the instant case, in view of the provisions of Articles 2219 and 2220 of the New CivilCode. The exceptions are (1) where the mishap results in the death of a passenger, and (2)where it is proved that the carrier was guilty of fraud or bad faith, even if death does notresult. (Rex Taxicab Co., Inc. vs. Jose Bautista, et al., G. R. No.L-15392, Sept. 30, 1960). llcd



The Court of Appeals found that the two vehicles sideswiped each other at the middle of theroad. In other words, both vehicles were in their respective lanes and that they did notinvade the lane of the other. It cannot be said therefore that there was fraud or bad faith onthe part of the carrier's driver. This being the case, no moral damages are recoverable.

However, with respect to attorney's fee of P2,000.00, the same need not be proved as hereinpetitioners contended. The same is allowed in the discretion of the court after considering

several factors which are discernible from the facts brought out during the trial. In this case,plaintiff was compelled to litigate and incur expenses in order to protect his interest.

ACCORDINGLY, this petition is granted with respect to that portion of the decision of theCourt of Appeals sentencing herein petitioners to pay the sum of P5,000.00, as moraldamages, which is hereby set aside. However, that portion of the decision sentencingpetitioners to pay respondent Patrocinio Esguerra the sum of P2,000.00, as attorney's fees,stays.

SO ORDERED.

SWEET LINES, INC., petitioner , vs. THE HONORABLE COURT OF APPEALS,MICAELA B. QUINTOS, FR. JOSE BACATAN, S.J., MARCIANO CABRAS and ANDREA VELOSO, respondents .

Felixberto Leonardo and Ramon Tuangco for petitioner.

Expedito P. Bugarin for respondents.

SYLLABUS

1.CIVIL LAW; COMMON CARRIERS; FAILURE TO FULFILL UNDERTAKING AND/OR INTERRUPTION OF TRIP; LIABILITY FOR DAMAGES; EXISTENCE OF FORTUITOUS EVENT. ACRUCIAL FACTOR. — The crucial factor then is the existence of a fortuitous event or forcemajeure. Without it, the right to damages and indemnity exists against a captain who fails tofulfill his undertaking or where the interruption has been caused by the captain exclusively.

As found by both Courts below, there was no fortuitous event or force majeure whichprevented the vessel from fulfilling its undertaking of taking private respondents to

Catbalogan. In the first place, mechanical defects in the carrier are not considered a casofortuito that exempts the carrier from responsibility (Landingin vs. Pangasinan TransportationCo., 33 SCRA 284 [1970]). In the second place, even granting arguendo that the enginefailure was a fortuitous event, it accounted only for the delay in departure. When the vesselfinally left the port of Cebu on July 10, 1972, there was no longer any force mucure that

justified by-passing a port of call. The vessel was completely repaired the following day afterit was towed back to Cebu. In fact, after docking at Tacloban City, it left the next day forManila to complete its voyage.



2.ID.; ID.; LIABILITY; MAY NOT BE DIMINISHED OR CANCELLED BY CONDITIONS PRINTED AT THE BACK OF THE TICKET. — In defense, petitioner cannot rely on the conditions in smallhold print at the back of the ticket. Even assuming that those conditions are squarelyapplicable to the case at bar, petitioner did not comply with the same. It did not cancel theticket nor did it refund the value of the tickets to private respondents. Besides, it was not thevessel's sailing schedule that was involved. Private respondents' complaint is directed not atthe delayed departure the next day but at the by-passing of Catbalogan, their destination.

Had petitioner notified them previously, and offered to bring them to their destination at itsexpense, or refunded the value of the tickets purchased, perhaps, this controversy would nothave arisen. Furthermore, the conditions relied upon by petitioner cannot prevail over Articles614 and 698 of the Code of Commerce heretofore quoted.

3.ID.; ID.; CIVIL LIABILITY OF OWNER AND SHIP AGENT. — The voyage to Catbalogan was"interrupted" by the captain upon instruction of management. The "interruption" was not dueto fortuitous event or force majeure nor to disability of the vessel. Having been caused by thecaptain upon instruction of management, the passengers' right to indemnity is evident. Theowner of a vessel and the ship agent shall be civilly liable for the acts of the captain.

4.ID.; MORAL DAMAGES; RECOVERABLE IN THE CASE AT BAR. — Under Article 2220 of theCivil Code, moral damages are justly due in breaches of contract where the defendant actedfraudulently or in bad faith. Both the Trial Court and the Appellate Court found that there wasbad faith on the part of petitioner. That finding of bad faith is binding on this Court, since it isnot the function of the Court to analyze and review evidence on this point all over again,aside from the fact that the Court finds it faithful to the meaning of bad faith enunciatedthus: "Bad faith means a breach of a known duty through some motive or interest or illwill.Self-enrichment or fraternal interest, and not personal illwill, may have been the motive, butit is malice nevertheless." Under the circumstances, however, the Court finds the award of moral damages excessive and accordingly reduce them to P3,000.00, respectively, for each ofthe private respondents.

5.ID.; ATTORNEY'S FEES; AWARD HELD REASONABLE. — The total award of attorney's feesof P5,000.00 is in order considering that the case has reached this Tribunal.

6.ID.; EXEMPLARY DAMAGES; AWARD DISCRETIONARY UPON THE COURT. — Insofar asexemplary damages are concerned, although there was bad faith, the Court is not inclined togrant them in addition to moral damages. Exemplary damages cannot be recovered as amatter of right; the Court decides whether or not they should be adjudicated. The objectiveto meet its schedule might have been called for, but petitioner should have taken thenecessary steps for the protection of its passengers under its contract of carriage.

7.ID.; ACTUAL OR COMPENSATORY DAMAGES; NOT MITIGATED WHEN HARM OUTWEIGHSBENEFIT. — Article 2215(2) of the Civil Code invoked by petitioner is inapplicable herein. Theharm done to private respondents outweighs any benefits they may have derived from beingtransported to Tacloban instead of being taken to Catbalogan, their destination and thevessel's first port of call, pursuant to its normal schedule.



R E S O L U T I O N

MELENCIO-HERRERA, J p:

For having by-passed a port of call without previous notice, petitioner shipping company andthe ship captain were sued for damages by four of its passengers, private respondents

herein, before the then Court of First Instance of Cebu, Branch VIII.

Briefly, the facts of record show that private respondents purchased first-class tickets frompetitioner at the latter's office in Cebu City. They were to board petitioner's vessel,M/V Sweet Grace, bound for Catbalogan, Western Samar. Instead of departing at thescheduled hour of about midnight on July 8, 1972, the vessel set sail at 3:00 A.M. of July 9,1972 only to be towed back to Cebu due to engine trouble, arriving there at about 4:00 P.M.on the same day. Repairs having been accomplished, the vessel lifted anchor again on July10, 1972 at around 8:00 A.M.

Instead of docking at Catbalogan, which was the first port of call, the vessel proceeded directto Tacloban at around 9:00 P.M. of July 10, 1972. Private respondents had no recourse but todisembark and board a ferryboat to Catbalogan.

Hence, this suit for damages for breach of contract of carriage which the Trial Court, affirmedby respondent Appellate Court, awarded as follows:

"IN THE LIGHT OF THE FOREGOING OBSERVATIONS, judgment is rendered orderingthe defendant Sweet Lines, Incorporated to pay to the plaintiffs the following:

"1)P75,000.00 as moral damages divided among the plaintiffs as follows: P30,000.00for Mrs. Micaela B. Quintos, P25,000.00 for Jesuit Father Jose Bacatan; P10,000.00 forMrs. Andrea Veloso and P10,000.00 for plaintiff Mike Cabras;

2)P30,000.00 as exemplary or corrective damages;

3)Interest at the legal rate of 6% per annum on the moral and exemplary damages asset forth above from the date of this decision until said damages are fully paid;

4)P5,000.00 as attorney's fees; and

5)The costs.

Counterclaim dismissed."

The governing provisions are found in the Code of Commerce and read as follows:

"ART. 614.A captain who, having agreed to make a voyage, fails to fulfill hisundertaking, without being prevented by fortuitous event or force majeure, shallindemnify all the losses which his failure may cause, without prejudice to criminalpenalties which may be proper.



and

"ART. 698.In case of interruption of a voyage already begun, the passengers shallonly be obliged to pay the fare in proportion to the distance covered, without right torecover damages if the interruption is due to fortuitous event or force majeure, butwith a right to indemnity, if the interruption should have been caused by the captainexclusively. If the interruption should be caused by the disability of the vessel, andthe passenger should agree to wait for her repairs, he may not be required to pay anyincreased fare of passage, but his living expenses during the delay shall be for hisown account."

The crucial factor then is the existence of a fortuitous event or force majeure. Without it, theright to damages and indemnity exists against a captain who fails to fulfill his undertaking orwhere the interruption has been caused by the captain exclusively.

As found by both Courts below, there was no fortuitous event or force majeure whichprevented the vessel from fulfilling its undertaking of taking private respondents toCatbalogan. In the first place, mechanical defects in the carrier are not considered a caso fortuito that exempts the carrier from responsibility. 1

In the second place, even granting arguendo that the engine failure was a fortuitous event, itaccounted only for the delay in departure. When the vessel finally left the port of Cebu onJuly 10, 1972, there was no longer any force majeure that justified by-passing a port of call.The vessel was completely repaired the following day after it was towed back to Cebu. Infact, after docking at Tacloban City, it left the next day for Manila to complete its voyage. 2

The reason for by-passing the port of Catbalogan, as admitted by petitioner's GeneralManager, was to enable the vessel to catch up with its schedule for the next week. Therecord also discloses that there were 50 passengers for Tacloban compared to 20 passengersfor Catbalogan, 3 so that the Catbalogan phase could be scrapped without too much loss forthe company. Cdpr

In defense, petitioner cannot rely on the conditions in small bold print at the back of theticket reading:

"The passenger's acceptance of this ticket shall be considered as an acceptance of thefollowing conditions:

3.In case the vessel cannot continue or complete the trip for any cause whatsoever, thecarrier reserves the right to bring the passenger to his/her destination at the expense of thecarrier or to cancel the ticket and refund the passenger the value of his/her ticket;

xxx xxx xxx

11.The sailing schedule of the vessel for which this ticket was issued is subject to changewithout previous notice." (Exhibit "1-A").

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Even assuming that those conditions are squarely applicable to the case at bar, petitioner didnot comply with the same. It did not cancel the ticket nor did it refund the value of thetickets to private respondents. Besides, it was not the vessel's sailing schedule that wasinvolved. Private respondents' complaint is directed not at the delayed departure the next daybut at the by-passing of Catbalogan, their destination. Had petitioner notified them

previously, and offered to bring them to their destination at its expense, or refunded thevalue of the tickets purchased, perhaps, this controversy would not have arisen.

Furthermore, the conditions relied upon by petitioner cannot prevail over Articles 614 and 698of the Code of Commerce heretofore quoted.

The voyage to Catbalogan was "interrupted" by the captain upon instruction of management.The "interruption" was not due to fortuitous event or for majeure nor to disability of thevessel. Having been caused by the captain upon instruction of management, the passengers'right to indemnity is evident. The owner of a vessel and the ship agent shall be civilly liable

for the acts of the captain. 4

Under Article 2220 of the Civil Code, moral damages are justly due in breaches of contractwhere the defendant acted fraudulently or in bad faith. Both the Trial Court and the AppellateCourt found that there was bad faith on the part of petitioner in that: Cdpr

"(1)Defendants-appellants did not give notice to plaintiffs-appellees as to the changeof schedule of the vessel;

(2)Knowing fully well that it would take no less than fifteen hours to effect the repairs

of the damaged engine, defendants-appellants instead made announcement of assurance that the vessel would leave within a short period of time, and whenplaintiffs-appellees wanted to leave the port and gave up the trip, defendants-appellants' employees would come and say, `we are leaving, already.'

(3)Defendants-appellants did not offer to refund plaintiffs-appellees' tickets norprovide them with transportation from Tacloban City to Catbalogan. 5

That finding of bad faith is binding on us, since it is not the function of the Court to analyzeand review evidence on this point all over again 6 aside from the fact that we find it faithful tothe meaning of bad faith enunciated thus:

"Bad faith means a breach of a known duty through some motive or interest or illwill.Self-enrichment or fraternal interest, and not personal illwill, may have been themotive, but it is malice nevertheless." 7

Under the circumstances, however, we find the award of moral damages excessive andaccordingly reduce them to P3,000.00, respectively, for each of the private respondents.



















The total award of attorney's fees of P5,000.00 is in order considering that the case hasreached this Tribunal.

Insofar as exemplary damages are concerned, although there was bad faith, we are notinclined to grant them in addition to moral damages. Exemplary damages cannot berecovered as a matter of right; the Court decides whether or not they should beadjudicated. 8 The objective to meet its schedule might have been called for, but petitioner

should have taken the necessary steps for the protection of its passengers under its contractof carriage. llcd

Article 2215(2) of the Civil Code 9 invoked by petitioner is in-applicable herein. The harmdone to private respondents outweighs any benefits they may have derived from beingtransported to Tacloban instead of being taken to Catbalogan, their destination and thevessel's first port of call, pursuant to its normal schedule.

ACCORDINGLY, the judgment appealed from is hereby modified in that petitioner is herebysentenced to indemnify private respondents in the sum of P3,000.00 each, without interest,

plus P1,250.00, each, by way of attorney's fees and litigation expenses.

Costs against petitioner.

SO ORDERED.

DRA. SOFIAL. PRUDENCIADO, petitioner , vs. ALLIANCE TRANSPORT SYSTEM, INC. and

JOSE LEYSON, et al., respondents .

D E C I S I O N

PARAS, J p:

This is a petition for review on certiorari of the decision 1 of the Court of Appeals dated May4, 1971 in CA-G.R. No. 34832R entitled Dra. Sofia

L. Prudenciado v.Alliance Transport System, Inc. and Jose Leyson, which modified thedecision 2 of the Court of First Instance of Rizal, Quezon City, in Civil Case No. Q-5235reducing the amount of moral damages from P25,000 to P2,000 and eliminating the award of exemplary damages and attorney's fees but granting actual damages of P2,451.27. cdll

The decretal portion of said decision reads:

"WHEREFORE, the decision appealed from is hereby modified, ordering appellants jointly and severally to pay plaintiff the sum of P2,451.27 for actual damages







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representing the cost of the repair of the car of Plaintiff; (2) the sum of P2,000.00 asmoral damages. No pronouncement as to costs."

The antecedent facts of this case as found by the trial court and by the Court of Appeals areas follows:

At about 2:05 p.m. of May 11, 1960, Dra. Sofia L. Prudenciado was driving her own Chevrolet

Bel Air car along Arroceros Street with the intention of crossing Taft Avenue in order to turnleft, to go to the Philippine Normal College Compound where she would hold classes. Sheclaimed that she was driving her car at the rate of 10 kmph; that before crossing Taft Ave.she stopped her car and looked to the right and to the left and not noticing any on-comingvehicle on either side she slowly proceeded on first gear to cross the same, but when shewas almost at the center, near the island thereof, Jose Leyson who was driving People'sTaxicab owned and operated by Alliance Transport System, Inc., suddenly bumped andstruck Dra. Prudenciado's car, thereby causing physical injuries in different parts of her body,suffering more particularly brain concussion which subjected her to several physicalexaminations and to an encephalograph test while her car was damaged to the extent of

P2,451.27. The damage to the taxicab amounted to P190.00 (Decision in Civil Case No. Q-5235, CFI, Rizal; Record on Appeal, pp. 63-64; Decision, CA-G.R. No. 34832-R, Rollo, pp. 37-38). cdrep

Dra. Prudenciado filed a complaint for damages at the Court of First Instance of Rizal,Quezon City against the Alliance Transport System and Jose Leyson docketed as aforestated,Civil Case No. Q-5232 (Record on Appeal, pp. 2-11).

After due hearing, the Court of First Instance of Rizal, Quezon City, found Jose Leyson guiltyof negligence in the performance of his duties as taxicab driver which is the proximate cause

of the accident in question. On the other hand, defendant Alliance Transport System, Inc.failed to prove to the satisfaction of the court that it had exercised the required diligence of agood father of the family in the selection, supervision and control of its employees includingdefendant Leyson. Consequently, both defendants were held jointly and severally liable forthe physical injuries suffered by the plaintiff Dra. Sofia L. Prudenciado as well as for thedamage to her car, in addition to the other consequential damages prayed for.

The dispositive portion of said decision reads:

"IN VIEW OF THE FOREGOING CONSIDERATIONS judgment is rendered, one in favor

of plaintiff and against the defendants, by ordering the said defendants, jointly andseverally, to pay the plaintiff the sum of P2,451.27 for actual damages representingthe cost for the repair of the car of plaintiff; P25,000.00 as moral damages; P5,000.00as exemplary damages; and the further sum of P3,000.00 as attorney's fees, withcosts against the defendants." (Record on Appeal, pp. 71-73).

On appeal, the Court of Appeals rendered the assailed decision on May 14, 1971 and deniedpetitioner's motion for reconsideration in its resolution dated July 20, 1971.

Hence, this petition.



The petition was given due course in the resolution of this Court dated September 6, 1971and petitioner filed her brief on November 10, 1971 (Rollo, p. 69) while respondents filedtheir brief on January 24, 1972 (Rollo, p. 86). Petitioner filed her Reply Brief on March 1,1972 (Rollo, p. 96); after which the case was considered submitted for decision on the samedate (Rollo, p. 99).

In her brief, petitioner raised the following assignment of errors:

I

THE RESPONDENT COURT OF APPEALS ERRED IN REDUCING THE AWARD OFMORAL DAMAGES TO THE PETITIONER FROM P25,000.00 AWARDED BY THE COURTOF FIRST INSTANCE OF RIZAL, BRANCH V, QUEZON CITY, TO P2,000.00NOTWITHSTANDING THE FACT THAT THERE WAS NO FINDING THAT THE AWARDWAS PALPABLY AND SCANDALOUSLY EXCESSIVE AS TO INDICATE THAT IT WAS THERESULT OF PASSION OR CORRUPTION ON THE PART OF THE TRIAL COURT;

II

THE RESPONDENT COURT OF APPEALS ERRED IN ELIMINATING THE AWARD OFEXEMPLARY DAMAGES OF P5,000.00 NOTWITHSTANDING THE FACT THAT THEFINDING OF THE SAID COURT ON THE EVIDENCE AND THE LAW APPLICABLEJUSTIFIED THE AWARD OF EXEMPLARY DAMAGES AS HELD BY THE SAID TRIALCOURT;

III

THE COURT OF APPEALS ERRED IN FINDING THAT HER DEMOTION IN RANK AS A

PROFESSOR IN THE UNITED STATES WAS NOT SUBSTANTIATED AND IN MAKINGTHIS FINDING A BASIS FOR THE REDUCTION OF THE AWARD OF MORAL DAMAGES,NOTWITHSTANDING THAT IT IS ALREADY TOO FAR-FETCHED AND IT MERELY CONFIRMS THE TRUTH OF THE FACT THAT THE ACCUSED SUFFERED LOSS OF HER USUAL LIVELINESS; VIVACITY, ACTIVITY SELF-CONFIDENCE AND THAT SHE FEELSUNCERTAIN AND INSECURE AND THAT SHE WAS SUBJECTED TO EXTREME FRIGHT

AND SERIOUS ANXIETY, SERIOUS APPREHENSION OF LOSING HER LIFE OR HER SENSES OR REASON AND OF HER PHYSICAL MOBILITY ANYTIME AND THAT SHESUFFERED GREAT SHOCK AND SEVERE PAINS ON HER BACK NEAR THE LEFT SIDEOF HER SPINAL COLUMN OF THE LUMBAR REGION;

IV

THE RESPONDENT COURT OF APPEALS ALSO ERRED IN ELIMINATING THE AWARDOF ATTORNEY'S FEES TO THE PETITIONERS NOTWITHSTANDING THE FACT THATSAID AWARD IS LEGAL AND PROPER;

V



THE RESPONDENT COURT OF APPEALS ERRED IN ELIMINATING THE COSTS TAXED AGAINST THE RESPONDENTS NOTWITHSTANDING THE FACT THAT SAID COSTS ARELEGAL AND PROPER;

VI

THE RESPONDENT COURT OF APPEALS ERRED IN FINDING THAT THE CLAIM OF DR.SOFIA L. PRUDENCIADO OF HER LOSS OF HER USUAL LIVELINESS, VIVACITY,

ACTIVITY AND HER USUAL SELF CONFIDENCE, SUCH THAT SHE NOW FEELSUNCERTAIN AND INSECURE .. EXTREME FRIGHT AND SERIOUS ANXIETY, SERIOUS

APPREHENSION OF LOSING HER LIFE OR HER SENSES OR REASON; OF HER PHYSICAL MOBILITY ANYTIME .. GREAT SHOCK AND SEVERE PAINS ON HER BACK NEAR THE LEFT SIDE OF HER SPINAL COLUMN IN THE LUMBAR REGION ISUNCORROBORATED NOTWITHSTANDING THE FACT OF THE CERTIFICATE, EXHIBIT"G" OF DR. DOMINADOR VERGARA, OF THE VETERANS MEMORIAL HOSPITAL ANDDR. CONRADO ARAMIL, BRAIN SPECIALIST AND THE CORROBORATING TESTIMONY OF THE LATTER AFTER EXAMINATION AND TREATMENT OF PETITIONER;

VII

THE RESPONDENT COURT OF APPEALS ERRED IN SO MODIFYING THE DECISION OFTHE TRIAL COURT NOTWITHSTANDING THE FACT THAT IT HAD NO POWER TO DOSO UNDER THE FACTS AND CIRCUMSTANCES OF THIS CASE AS FOUND BY THECOURT OF APPEALS;

VIII

THE RESPONDENT COURT OF APPEALS ERRED IN MODIFYING THE DECISION OFTHE TRIAL COURT NOTWITHSTANDING THE FACT THAT THE DECISION OF SAID

TRIAL COURT IS IN ACCORDANCE WITH LAW.

The Court of Appeals and the trial court are in accord in the finding that the accident wascaused by the negligence of the taxi driver. The bone of contention is however in the awardof damages, which crystalizes the errors assigned into one main issue, which is whether ornot the Court of Appeals is justified in modifying or changing the grant of damages by thetrial court. cdrep

It is well settled that factual findings of the Court of Appeals are binding on the SupremeCourt, but said findings are subject to scrutiny if such are diametrically opposed to those of

the trial court (Samson v. CA, et al., G.R. No. L-40071, January 29, 1986).

The Court of Appeals concedes that a concussion of the brain was suffered byDra. Prudenciado but as to how serious was the concussion or how it had later become, andthe disastrous extent of the injuries which she alleges to have sustained as a result of theaccident, are seriously doubted by said Appellate Court.

Specifically, said Court finds that Dra. Prudenciado's claim (which was sustained by the trialcourt) that because of aforesaid concussion, she eventually lost her usual liveliness, vivacity,



activity and her usual self-confidence, to the extent that now she feels uncertain andinsecure, not to mention a sense of extreme fright and serious anxiety, serious apprehensionof losing her life, or her senses or reason or her physical mobility momentarily, plusexperiences of great shock and severe pains on her back near the left side of her spinalcolumn in the lumbar region, was not supported by the deposition of Dr. Conrado Aramil, thespecialist who attended to the plaintiff from May 14 to May 26, 1960 (TSN, July 13, 1960, pp.72-73). From said deposition, it was gathered that Dra. Prudenciado suffered a mild

abnormality, compatible with mild concussion of the brain (TSN, July 13, 1960, pp. 47-48);that the symptoms of any brain concussion usually are headache, dizziness, vomiting and lackof pep or alertness; and that the possible after effects that may be produced are persistent orirregular headaches, fluctuating dizziness. Accordingly, Dra. Prudenciado was advised "Just towatch herself if she would develop any alarming symptoms such as headache, dizziness orvomitings, to have her rechecked after several months for her to be sure." ( Ibid, pp. 51-52).It might also produce intellectual deterioration or lessening of intelligence, and even insanity.

Dra. Prudenciado sought to establish that she had precisely suffered all those after effectsexcept insanity; but the Court of Appeals ruled that her proof consisted merely in her own

uncorroborated testimony. In support of her allegation she could not show any medicalcertificate tending to prove that she was indeed medically treated abroad for her brainailment nor was there any showing in the documents presented that she was demoted to therank of technical assistant because the San Francisco State College does not believe in hermental capacity any more. Cdpr

Finally, her statements that she is almost completely losing her voice, that she has a terribleheadache when her head is pressed, that she has lost her sense of taste, that she is nervous

and temperamental and that she has lapses of memory, are belied by the deposition of Dr. Aramil that the patient's EEG was already normal on May 26, 1960; and on cross-examinationhe declared that she was clinically symtomless when she was discharged from the hospital(TSN, July 13, 1960, pp. 75 76; 78-79).

There is no argument that moral damages include physical suffering, mental anguish, fright,serious anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation,and similar injury. Though incapable of pecuniary computation, moral damages may berecovered if they are the proximate result of defendant's wrongful act or omission (People v.Baylon, 129 SCRA 62 [1984]).

In the same manner, it is undisputed that the trial courts are given discretion to determinethe amount of moral damages (Alcantara v. Surro, 93 Phil. 472) and that the Court of

Appeals can only modify or change the amount awarded when they are palpably andscandalously excessive "so as to indicate that it was the result of passion, prejudice orcorruption on the part of the trial court (Gellada v. Warner Barnes & Co., Inc., 57 O.G. (4)7347, 7358; Sadie v. Bachrach Motors Co., Inc., 57 O.G. (4) 636 and Adone v. BachrachMotor Co., Inc., 57 O.G. 656). But in more recent cases where the awards of moral andexemplary damages are far too excessive compared to the actual losses sustained by theaggrieved party, this Court ruled that they should be reduced to more reasonable amounts.



Thus, in the case of San Andres v. Court of Appeals (116 SCRA 85 [1982]) the Supreme Courtruled that while the amount of moral damages is a matter left largely to the sound discretionof a court, the same when found excessive should be reduced to more reasonable amounts,considering the attendant facts and circumstances. Moral damages, though incapable of pecuniary estimation, are in the category of an award designed to compensate the claimantfor actual injury suffered and not to impose a penalty on the wrongdoer.

In a much later case (Siguenza v. Court of Appeals, 137 SCRA 578-579 [1985]), the Supremecourt, reiterating the above ruling, reduced the awards of moral and exemplary damageswhich were far too excessive compared to the actual losses sustained by the aggrievedparties and where the records show that the injury suffered was not serious or gross and,therefore, out of proportion to the amount of damages generously awarded by the trial court.

In any case the Court held that "moral damages are emphatically not intended to enrich acomplainant at the expense of a defendant. They are awarded only to enable the injuredparty to obtain means, diversion or amusements that will serve to alleviate the moralsuffering he has undergone, by reason of the defendants' culpable action." The award of

moral damages must be proportionate to the suffering inflicted (R & B Surety & InsuranceCo., Inc. v. Intermediate Appellate Court, 129 SCRA 745 [1984] citing Grand UnionSupermarket, Inc. v. Espino, Jr., 94 SCRA 966). cdll

Coming back to the case at bar, a careful review of the records makes it readily apparent thatthe injuries sustained by Dra. Prudenciado are not as serious or extensive as they wereclaimed 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 imaginationproduce a logical conclusion that such disastrous effects of the accident sought to beestablished, 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 lowercourt should be reduced to more reasonable levels.

On the other hand, it will be observed that the reduction of the damages made by the Courtof Appeals is both too drastic and unrealistic, to pass the test of reasonableness, whichappears to be the underlying basis to justify such reduction.

While the damages sought to be recovered were not satisfactorily established to the extentdesired by the petitioner, it was nonetheless not disputed that an accident occurred due tothe fault and negligence of the respondents; that Dra. Prudenciado suffered a brainconcussion which although mild, can admittedly produce the effects complained of by her andthat these symptoms can develop after several years and can lead to some serious handicapsor predispose the patient to other sickness (TSN, July 13, 1960, pp. 52-54). Being a doctor byprofession, her fears can be more real and intense than an ordinary person. Otherwisestated, she is undeniably a proper recipient of moral damages which are proportionate to hersuffering.

As to exemplary damages, Article 2231 of the Civil Code provides:



"In quasi-delicts, exemplary damages may be granted if the defendant acted withgrave negligence."

The rationale behind exemplary or corrective damages is, as the name implies, to provide anexample or correction for the public good (Lopez, et al. v. Pan American World Airways, 16SCRA 431). cdphil

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 andcircumstances obtaining in the record of the case that respondent driver was running at highspeed after turning to the right along Taft Ave. coming from Ayala Boulevard, consideringthat the traffic was clear. Failing to notice petitioner's car, he failed to apply his brakes anddid not even swerve to the right to avoid the collision (Record on Appeal, pp. 69-70).

The Court of Appeals conforms with aforesaid findings of the trial court but is not prepared toaccept 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 completedisregard of the hazards to life and limb of other people cannot be said to be acting inanything less than gross negligence. The frequent incidence of accidents of this naturecaused by taxi drivers indeed demands corrective measures.

PREMISES CONSIDERED, the assailed decision of the Court of Appeals is hereby MODIFIEDinsofar as the award of damages is concerned; and respondents are ordered to jointly andseverally pay the petitioner; (1) the sum of P2,451.27 for actual damages representing thecost of the repair of her car; (2) the sum of P15,000.00 as moral damages; (3) the sum of

P5,000.00 as exemplary damages; and (4) the sum of P3,000.00 as attorney's fees. Nopronouncement as to costs. cdrep

PAN AMERICAN WORLD AIRWAYS, INC., petitioner , vs. THE INTERMEDIATE APPELLATE COURT, TEOFISTA P. TINITIGAN, joined by her husband,SEVERINO TINITIGAN, respondents .

SYLLABUS

1.REMEDIAL LAW; EVIDENCE; CREDIBILITY OF WITNESSES; FINDINGS OF FACT OF THETRIAL COURT GENERALLY BINDING ON APPEAL. — All of the issues raised by petitioner arefactual issues which the trial court ruled upon by favoring plaintiff's evidence as more crediblethan the evidence — for the defendant. A cursory reading of the decision of the trial court aswell as the decision of the appellate court reveals that all evidence available were considered.It is not the function of this Court to analyze or weigh evidence all over again, as Our

jurisdiction is limited to reviewing errors of law that might have been committed by the lowercourts. Moreover, the findings of the lower court as to the credibility of the witnesses will notbe generally disturbed on appeal and if the appeal is on questions of fact, the factual findings



of the appellate court are binding on Us (Collector of Customs of Manila vs. IAC, 137 SCRA3).

D E C I S I O N

PARAS, J p:

Before Us is a petition to review by certiorari the judgment 1 of the respondent Court of Appeals (IAC) affirming with modification the decision 2 rendered by the trial court in favor of the plaintiff 3 and against the defendant 4 sentencing the latter to pay the former the sum of US$1,546.15 or its equivalent in Philippine Currency as actual and compensatory damages,P500,000.00 as moral damages, P200,000.00 as exemplary damages, P100,000.00 asattorney's fees and to pay the costs of litigation. The modification consists in that thepayment of US$1,546.15 or its equivalent in Philippine Currency must be valued at thepresent rate of exchange.

The statement of the case is as follows:

On February 5, 1975, private respondent herein, Teofista P. Tinitigan, filed a complaintagainst petitioner herein, Pan American World Airways, Inc. (Pan Am for brevity) for damagesarising from defendant's alleged refusal to accommodate her on Pan Am Flight No. 431 fromSto. Domingo, Republica Dominica to San Juan, Puerto Rico on April 29, 1973notwithstanding the fact that she possessed a confirmed plane ticket purchasedfrom Pan Am's Office at Sto. Domingo and thus causing her to suffer mental anguish, seriousanxiety, besmirched reputation, wounded feelings and social humiliation. She prayed that shebe awarded moral damages of P500,000.00, exemplary damages of P200,000.00, attorney'sfees of P100,000.00 and actual damages sustained by her in the amount of US$1,546.15. Cdpr

In its Answer, defendant denied that plaintiff was a confirmed passenger since the ticket forFlight No. 431 issued to her was on an open space basis which meant that she could only beaccommodated if any of the confirmed passengers failed to show up at the airport beforedeparture. Plaintiff was advised by defendant of this fact when plaintiff changed her ticket fora new route with San Juan as additional part of her itinerary.

After due trial, the lower court rendered judgment on August 6, 1980 in favor of plaintiff andawarded the amount of damages as prayed for.

Defendant appealed said decision on both questions of fact and law to the respondent courtassigning errors, to wit:

I.The lower court erred in holding that plaintiff had a confirmed reservationon Pan Am Flight 431 from Santo Domingo, Republica Dominica to San Juan, PuertoRico on April 29, 1973.

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she was advised that her ticket was valid for Sto. Domingo, Republica Dominica only but inSanto Domingo she could make arrangements with Pan-Am for her trip to San Juan.

While in Sto. Domingo, after talking thru the telephone with Mrs. Lilibeth Warner, the formersaid that she (plaintiff) must be in San Juan that same day, to sign her contract or lose it.Plaintiff expected to make a profit of $1,000 in said contract. Plaintiff then proceeded to theairport at about 2 o'clock in the afternoon, or 3 hours ahead of the scheduled Pan Am flight.

She was told to wait and upon the arrival of the plane bound for San Juan, she surrenderedto the Pan Am employees passenger ticket No. 0264200919952 (Exh. "3") with Sto.Domingo-Miami Route and she was issued passenger ticket No. 023443466114 (Exh. "D" of Exh. "2") for flight No. 431 with Sto. Domingo-San Juan-Miami route. She was also issuedbaggage claim No. 474-618 (Exh. "A") and given the corresponding boarding pass (Exh. "B")and assigned seat 3-A (Exh. "B-1") after she paid the fare and terminal fee. Appellee wasthen instructed to proceed to the Immigration Section where her passport (Exh. "C") wasstamped accordingly.

While plaintiff was standing in line preparatory to boarding the aircraft, Rene Nolasco,

a Pan Am employee ordered her in a loud voice to step out of line because her ticket was notconfirmed to her consternation and embarrassment in the presence of several people whoheard and order. Despite her pleas that she should be in San Juan because it was veryimportant to her, she was not allowed to board the aircraft. And as if to add insult to injury,she saw that her seat was given to a white man prompting her to engage Nolasco, whoknows both the English and Spanish languages, in a heated argument provoking her intotelling him that she would file a suit against Pan Am. Later, a few Pan Am employees wentnear her to tell her she could finally board the plane and on the pretext that they wouldinspect her baggage, they led her to another place, which she finally realized, was not thedeparture area. Meanwhile, the plane took off without her but with her luggage on board.She was forced to return to her hotel without any luggage much less an extra dress. It was agood thing that the Hotel people remembered her because they do not usually accommodatefemale guests, without any luggage to stay in the hotel. While normally, hotelaccommodation was paid before departure, plaintiff was made to pay the roomaccommodation in advance (Exh. "E").

She finally retrieved her luggage after five days in San Francisco after presenting herbaggage ticket (Exh. "A"). She brought the matter to the attention of Mr. V.W. Smith,Manager of Pan Am in San Francisco, who sent a letter of apology (Exh. "G") for the

"inconveniences" Pan Am caused her (plaintiff) and attached a refund check (Exh. "H")reflecting the value of the flight coupon issued for the flight from Sto. Domingo to San Juanin which plaintiff was denied boarding.

On the other hand, there was no oral evidence for defendant Pan Am. Evidence consisted of documents which included depositions and counter depositions of witnesses and thefollowing: LexLib

"Exh. "1", Pan Am manifest on Flight 431 dated April 29, 1973 from Sto. Domingo toSan Juan, Dominican Republic; Exh. 2, Ticket Coupon No. 026443466114 dated April



29, 1973 issued to plaintiff with status "open" with routing Sto. Domingo-Miami; Exh.3, Ticket Coupon No. 0264200919952 dated April 29, 1973; Exh. 4, Letter of defendant's witness Raul Fiallo to Director of Pan Am, Manila dated March 29, 1974furnishing a copy of said letter toPan Am Sto. Domingo; Exh. 5 Item No. 26 in Exhibit1 enclosed in blue ink which reads "T. Tinitigan NB;" Exh. 6, Message sent bydeponent Raul Fiallo to Mr. McKenzie, Pan Am, Manila; Exh. 7, Brown envelopecontaining the deposition of the witness; Exhs. 8, 8-A to 8-G, Certification of thedeposition officer and the deposition of Raul Fiallo consisting of 8 pages in Spanish,Exh. 8-A-1, Signature of the deponent appearing at the left hand margin in everypage of the deposition; Exhs. 9, 9-A to 9-F, Translation of the deposition from Spanishto English consisting of 7 pages; Exh. 10 Official Receipt representing fee of theLanguages Internationale in translating the deposition from Spanish to English; Exh.11, Deponent's answer to cross interrogatories written in Spanish; and Exh. 12,Translation to deponent's answer to cross-interrogatories from Spanish to English byLanguages Internationale upon plaintiff's request. (pp. 46-47, Record on Appeal)

Considering the aforementioned evidence for both parties, the lower court said:

"Examining the evidence presented, the Court finds that the same preponderates infavor of the plaintiff. The plaintiff having been issued by the defendant with thenecessary ticket (Exh. "D"), baggage claim symbol (Exh. "A"), the requisite boardingpass (Exh. "B") with assigned seat 3-A and her having been cleared throughimmigration (Exhs. C and C-1) all clearly and unmistakably show that plaintiff wasindeed a confirmed passenger of defendant's Flight No. 431 for San Juan and that forall legal intents and purposes the contract of carriage between the plaintiff and thedefendant was already perfected which bound the latter to transport the former to herplace of destination on said Flight. This conclusion finds eloquent support in Exhibit Qof the defendant showing that plaintiff was included in the passenger manifest of saidflight. The failure therefore of the defendant to accommodate plaintiff in said flightand the taking in by it of a white man in lieu of plaintiff, who was brazenly ordered byan employee of the defendant to get off the line and unceremoniously whisked off from the departure area on the pretext that her luggage had to undergo custom'sinspection to plaintiff's chargrin and great humiliation, smacks of a clear case of racialdiscrimination for which the defendant should be held liable in damages to theplaintiff.

Moreover, the written apology offered by the defendant to the plaintiff, thru its

Manager in San Francisco, (Exh. G) is a tell-tale indication of an admission of fault bythe defendant for the "inconvenience" it caused plaintiff.

The defense put up by the defendant to the effect that the issuance by it of theboarding pass in favor of plaintiff with an assigned seat was merely in compliancewith the formal requirements of immigration fails to generate belief. There was noevidence presented, save the evidently self-serving declaration of deponent FialloRodriguez, of such a requirement by the immigration laws of said foreign country. cdrep



Considering the sex, age and the social and business stature of the plaintiff in thecommunity, the amounts of moral damages being claimed by her in the complaintcannot be said to be unreasonable. Moreover, the award of exemplary damages iscalled for under the circumstances to teach defendant a lesson for the public good.

WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against thedefendant sentencing the latter to pay the former the sum of USS1,546.15 or itsequivalent in Philippine Currency, as actual and compensatory damages, P200,000.00as moral damages, P200,000.00 as exemplary damages, P20,000.00 as attorney'sfees and the costs of litigation.

SO ORDERED. (pp. 47-49, Record on Appeal).

In its ruling, the appellate respondent court was merely echoing the findings of the lowercourt and in finding no merit in the appeal, gave the following reasons:

FIRST: It is clear from the evidence that defendant issued n Passenger Ticket andBaggage Check No. 026443466114 (Exh. "D") with assigned seat 3-A (Exh. "B-1") and

the corresponding pass (Exh. "B") and baggage claim symbol (Exh "A"). Plaintiff wasmade to pay the fare and terminal fee. At the immigration section, plaintiff's passport(Exh. "C") was stamped accordingly (Exh. "C-3"). Plaintiff's name was included in thepassenger manifest (Exh. "1," "5") of PANAM for Flight 431 dated April 19, 1973. Andthese show that plaintiff was indeed a confirmed passenger of defendant's Flight 431for San Juan on April 29, 1973. There was, therefore, a contract or carriage perfectedbetween plaintiff and defendant for the latter to take plaintiff to her place of destination.

By refusing to accommodate plaintiff in said flight, defendant had willfully andknowingly violated the contract of carriage and failed to bring the plaintiff to her placeof destination under its contract with plaintiff.

Defendant has from the start argued that plaintiff was merely to chance passengerthus she had to give way to a passenger with a confirmed reservation. However,defendant through Mr. Jose Raul Fiolla Rodriguez, testified that he cannot say exactlywhat the total capacity of the plane on Flight 431 was; that he does not knowwhether Mrs. Tinitigan was allowed to buy a ticket because there was still spaceavailable; that he cannot say whether Mrs. Tinitigan was the first or last to buy aticket to San Juan because there is no knowing; that there is no way of knowing whooccupied the seat (3-A) assigned to Mrs. Tinitigan; that he does not know if the ticket

number of the person who occupied seat 3-A was higher or lower that the ticketnumber of Mrs. Tinitigan because it cannot be determined; that a higher number thanthat of Mrs. Tinitigan's ticket does not necessarily mean that Mrs. Tinitigan bought herticket ahead; that no one else with open ticket was assigned the same seat number asMrs. Tinitigan; that PANAM does not practice the principle of "first come, first served."

In other words, defendant would like us to believe that plaintiff was a chancepassenger only and was not assured of her flight on that day. Defendant, howeverhas no way of proving the same as it was not certain whether plaintiff was a chancepassenger or not.



Bad faith means a breach of a known duty through some motive or interest or illwill.Self enrichment or fraternal interest and not personal illwill, may have been themotive of defendant, but it is malice nevertheless. The fact that plaintiff was orderedout under some pretext in order to accommodate a white man in an airline owned byan American firm with a reputation for bumping off non-caucasian to accommodatewhites is very regrettable. LexLib

When defendant's employee ordered plaintiff to step out of line because her ticketwas not confirmed despite plaintiff's pleas that she should be in San Juan that day,this caused plaintiff embarrassment because so many people heard the same andplaintiff was prevented from boarding the plane at all while her seat (3-A) was givento another passenger (a white man). For being subjected to such indignities, plaintiff suffered social humiliation, wounded feelings, serious anxiety, and mental anguish.Defendant should be held liable to plaintiff for moral damages.

A contract to transport passengers is quite different in kind and degree from any othercontractual relation. And this, because of the relation which an air-carrier sustainswith the public. Its business is mainly with the travelling public. It invites people to

avail of the comforts and advantages it offers. The contract of carriage, therefore,generates a relation attended with a public duty. Neglect or malfeasance of thecarrier's employees, naturally, could give ground for an action for damages. 5

By not allowing plaintiff to board Flight 431 on April 29, 1973, plaintiff was not able tosign a contract with Mrs. Lilibeth Warner who had earlier placed an order for asizeable number of "capiz" shells in which transaction plaintiff expected to derive aprofit of US $1,000.00. Plaintiff had to return to the Hotel El Embajador drom theaircraft costing her US$20.00. She had to pay for additional accommodations in saidhotel for US$26.15 and the damage to her personal property amounted to US$500.00.Defendant should be held liable to the plaintiff in the amount of US$1,546.15 or its

equivalent in Philippine Currency at the present rate of exchange as actual orcompensatory damages.

Defendant having breached its contract with plaintiff in bad faith, it is not error for thetrial court to have awarded exemplary damages. The rational behind exemplary orcorrective damages is, as the name implies, to provide an example or correction for

public good. 6 In view of it nature, it should be imposed in such amount as tosufficiently and effectively deter similar breach of contract in the future by defendantand other airlines.

An award of attorney's fees is also in order, having found bad faith on the part of defendant.

WHEREFORE, the decision appealed from is hereby AFFIRMED with the followingmodifications: defendant is sentenced to pay the plaintiff the sum of US$1,546.15 orits equivalent in Philippine Currency at the present rate of exchange with the USdollar.

Costs against defendant-appellant.











SO ORDERED. (pp. 3-5, Decision, pp. 96-98, Rollo)

It is noted that petitioner submitted in this petition the same grounds enumerated in itsMotion for Reconsideration of the assailed judgment of the respondent appellate courtanchoring its claim mainly on the appreciation of facts as supported by the evidence onrecord. These same grounds are also raised in petitioner's appeal from the judgment of thelower court to the respondent appellate court which affirmed the said assailed judgment.

All of the issues raised by petitioner are factual issues which the trial court ruled upon byfavoring plaintiff's evidence as more credible than the evidence — for the defendant. Acursory reading of the decision of the trial court as well as the decision of the appellate courtreveals that all evidence available were considered. It is not the function of this Court toanalyze or weigh evidence all over again, as Our jurisdiction is limited to reviewing errors of law that might have been committed by the lower courts. Moreover, the findings of the lowercourt as to the credibility of the witnesses will not be generally disturbed on appeal and if theappeal is on questions of fact, the factual findings of the appellate court are binding on Us(Collector of Customs of Manila vs. IAC, 137 SCRA 3). LibLex

We believe, however the amount of some damages awarded to be exorbitant: We thereforereduce the moral and exemplary damages to the combined total sum of Two HundredThousand (P200,000.00) Pesos and the attorney's fees to Twenty Thousand (P20,000.00)Pesos. The award of actual damages in the amount of One Thousand Five Hundred FortySix American dollars and fifteen cents (US$1,546.15) computed at the exchange rateprevailing at the time of payment is hereby retained and granted.

TRANS WORLD AIRLINES, petitioner , vs. COURT OF APPEALS andROGELIO A. VINLUAN, respondents .

Guerrero & Torres Law Offices for petitioner.

Angara, Abello, Concepcion, Regala & Cruz for private respondent.

The Solicitor General for public respondent.

SYLLABUS

1.CIVIL LAW; DAMAGES; MORAL AND EXEMPLARY DAMAGES; BASIS FOR THE AWARDTHEREOF IN THE CASE AT BAR. — The discrimination is obvious and the humiliation to whichprivate respondent was subjected is undeniable. Consequently, the award of moral andexemplary damages by the respondent court is in order. At the time of this unfortunateincident, the private respondent was a practicing lawyer, a senior partner of a big law firm inManila. He was a director of several companies and was active in civic and socialorganizations in the Philippines. Considering the circumstances of this case and the socialstanding of private respondent in the community, he is entitled to the award of moral andexemplary damages. However, the moral damages should be reduced to P300,000.00, and



the exemplary damages should be reduced to P200,000.00. This award should be reasonablysufficient to indemnify private respondent for the humiliation and embarrassment that hesuffered and to serve as an example to discourage the repetition of similar oppressive anddiscriminatory acts.

2.ID.; ID.; MORAL DAMAGES; PRESENCE OF BAD FAITH JUSTIFIES AWARD THEREOF. — Petitioner sacrificed the comfort of its first class passengers including private respondent

Vinluan for the sake of economy. Such inattention and lack of care for the interest of itspassengers who are entitled to its utmost consideration, particularly as to their convenience,amount to bad faith which entitles the passenger to the award of moral damages. More so inthis case where instead of courteously informing private respondent of his being downgradedunder the circumstances, he was angrily rebuffed by an employee of petitioner.

D E C I S I O N

GANCAYCO, J p:

Rogelio A. Vinluan is a practicing lawyer who had to travel in April, 1979 to several cities inEurope and the U.S. to attend to some matters involving several clients. He entered into acontract for air carriage for valuable consideration with Japan Airlines first class from Manilato Tokyo, Moscow, Paris, Hamburg, Zurich, New York, Los Angeles, Honolulu and back toManila thru the same airline and other airlines it represents for which he was issued thecorresponding first class tickets for the entire trip.

On April 18, 1979, while in Paris, he went to the office of Trans World Airlines (TWA) at theDe Gaulle Airport and secured therefrom confirmed reservation for first class accommodationon board its Flight No. 41 from New York to San Francisco which was scheduled to depart on

April 20, 1979. A validated stub was attached to the New York-Los Angeles portion of histicket evidencing his confirmed reservation for said flight with the mark "OK." 1 On April 20,1979, at about 8:00 o'clock A.M., Vinluan reconfirmed his reservation for first classaccommodation on board TWA Flight No. 41 with its New York office. He was advised that hisreservation was confirmed. He was even requested to indicate his seat preference on saidflight on said scheduled date of departure of TWA Flight No. 41. Vinluan presented his ticketfor check-in at the counter of TWA at JFK International Airport at about 9:45 o'clock A.M., the

scheduled time of the departure being 11:00 o'clock A.M. He was informed that there was nofirst class seat available for him on the flight. He asked for an explanation but TWAemployees on duty declined to give any reason. When he began to protest, one of the TWAemployees, a certain Mr. Braam, rudely threatened him with the words "Don't argue with me,I have a very bad temper."

To be able to keep his schedule, Vinluan was compelled to take the economy seat offered tohim and he was issued a "refund application" as he was downgraded from first class toeconomy class.

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While waiting for the departure of Flight No. 41, Vinluan noticed that other passengers whowere white Caucasians and who had checked-in later than him were given preference insome first class seats which became available due to "no show" passengers.

On February 15, 1980, Vinluan filed an action for damages against the TWA in the Court of First Instance of Rizal alleging breach of contract and bad faith. After trial on the merits, adecision was rendered the dispositive part of which reads as follows:

"WHEREFORE, judgment is hereby rendered in favor of the plaintiff and against thedefendant holding the latter liable to the former for the amount representing thedifference in fare between first class and economy class accommodations on boardFlight No. 6041 from New York to San Francisco, the amount of P500,000.00 as moraldamages, the amount of P300,000.00 as exemplary damages and the amount of P100,000.00 as and for attorney's fees, all such amounts to earn interest at the rateof twelve (12%) percent per annum from February 15, 1980 when the complaint wasfiled until fully paid.

Correspondingly, defendant's counterclaim is dismissed.

Costs against the defendant.

SO ORDERED."

Not satisfied therewith, the TWA appealed to the Court of Appeals wherein in due course adecision was rendered on May 27, 1987, 2 the dispositive part of which reads as follows:

"WHEREFORE, the decision dated March 8, 1984 is hereby modified by (1) fixing theinterest 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 untildate of full payment and (2) reducing the attorney's fees to P50,000.00 withoutinterest, the rest of the decision is affirmed. Costs against appellant.

SO ORDERED."

Hence, the herein petition for review.

The theory of the petitioner is that because of maintenance problems of the aircraft on theday of the flight, TWA Flight No. 41 was cancelled and a special Flight No. 6041 wasorganized to operate in lieu of Flight No. 41. 3 Flight No. 41 was to have utilized a Lockheed1011 with 34 first class seats, but instead, a smaller Boeing 707 with only 16 first class seatswas substituted for use in Flight No. 6041. Hence, passengers who had first class reservationson Flight No. 41 had to be accommodated on Flight No. 6041 on a first-come, first-servedbasis. An announcement was allegedly made to all passengers in the entire terminal of theairport advising them to get boarding cards for Flight No. 6041 to San Francisco and that thefirst ones getting them would get first preference as to seats in the aircraft. It denieddeclining to give any explanation for the downgrading of private respondent as well as thediscourteous attitude of Mr. Braam.











On the other hand, private respondent asserts that he did not hear such announcement atthe terminal and that he was among the early passengers to present his ticket for check-inonly to be informed that there was no first class seat available for him and that he had to bedowngraded.

The petitioner contends that the respondent Court of Appeals committed a grave abuse of discretion in finding that petitioner acted maliciously and discriminatorily, and in granting

excessive moral and exemplary damages and attorney's fees.

The contention is devoid of merit. Private respondent had a first class ticket for Flight No. 41of petitioner from New York to San Francisco on April 20, 1979. It was twice confirmed andyet respondent unceremoniously told him that there was no first class seat available for himand that he had to be downgraded to the economy class. As he protested, he was arrogantlythreatened by one Mr. Braam. Worst still, while he was waiting for the flight, he saw thatseveral Caucasians who arrived much later were accommodated in first class seats when theother passengers did not show up.

The discrimination is obvious and the humiliation to which private respondent was subjectedis undeniable. Consequently, the award of moral and exemplary damages by the respondentcourt is in order. 4

Indeed, private respondent had shown that the alleged switch of planes from a Lockheed1011 to a smaller Boeing 707 was because there were only 138 confirmed economy classpassengers who could very well be accommodated in the smaller plane and not because of maintenance problems.

Petitioner sacrificed the comfort of its first class passengers including private respondent

Vinluan for the sake of economy. Such inattention and lack of care for the interest of itspassengers who are entitled to its utmost consideration, particularly as to their convenience,amount to bad faith which entitles the passenger to the award of moral damages. 5 More soin this case where instead of courteously informing private respondent of his beingdowngraded under the circumstances, he was angrily rebuffed by an employee of petitioner.

At the time of this unfortunate incident, the private respondent was a practicing lawyer, asenior partner of a big law firm in Manila. He was a director of several companies and wasactive in civic and social organizations in the Philippines. Considering the circumstances of this case and the social standing of private respondent in the community, he is entitled to the

award of moral and exemplary damages. However, the moral damages should be reduced toP300,000.00, and the exemplary damages should be reduced to P200,000.00. This awardshould be reasonably sufficient to indemnify private respondent for the humiliation andembarrassment that he suffered and to serve as an example to discourage the repetition of similar oppressive and discriminatory acts.

WHEREFORE, with the above modification reducing the moral and exemplary damages asabove-stated, the decision subject of the petition for review is AFFIRMED in all otherrespects, without pronouncement as to costs in this instance.







SO ORDERED.

DR. HERMAN ARMOVIT, DORA ARMOVIT ANDJACQUELINE ARMOVIT, petitioners , vs. COURT OF APPEALS, ANDNORTHWEST AIRLINES, INC., respondents .

Law Firm of Raymundo A. Armovit for petitioners.

Quisumbing, Torres & Evangelista for private respondent.

SYLLABUS

1.CIVIL LAW; DAMAGES; GROUNDS FOR GRANTING THEREOF; GROSS NEGLIGENCE AMOUNTING TO MALICE AND BAD FAITH AND WHICH TAINTED THE BREACH OFCONTRACT. — In Air France, this Court observed: "A contract to transport passengers is quitedifferent in kind and degree from any other contractual relation. And this, because of therelation which an air carrier sustains with the public. Its business is mainly with the travelingpublic. It invites people to avail of the comforts and advantages it offers. The contract of air carriage, therefore, generates a relation attended with a public duty . Neglect or malfeasanceof the carrier's employees, naturally, could give ground for an action for damages."Passengers do not contract merely for transportation. They have the right to be treated bythe carrier's employees with kindness, respect, courtesy and due consideration. They areentitled to be protected against personal misconduct, injurious language, indignities andabuses from such employees. So it is, that any rude or discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against the

carrier ." The gross negligence committed by private respondent in the issuance of the ticketswith entries as to the time of the flight, the failure to correct such erroneous entries and themanner by which petitioners were rudely informed that they were bumped off areclear indicia of such malice and bad faith and establish that private respondent committed abreach of contract which entitles petitioners to moral damages.

2.REMEDIAL LAW; EVIDENCE; FAILURE OF WITNESS TO TESTIFY ON THE SOCIALHUMILIATION AND ANXIETY SUFFERED; JUSTIFIED IN CASE AT BAR. — The appellate courtobserved that the petitioners failed to take the witness stand and testify on the matter. Itoverlooked however, that the failure of the petitioner to appear in court to testify was

explained by them. The assassination of Senator Benigno Aquino, Jr. on August 21, 1983following the year they were bumped off caused a turmoil in the country. This turmoil spilledover to the year 1984 when they were scheduled to testify. However, the violentdemonstrations in the country were sensationalized in the U.S. media so petitioners wereadvised to refrain from returning to the Philippines at the time. Nevertheless, Atty.Raymund Armovit, brother of petitioner Dr. Armovit, took the witness stand as he was withthe petitioners from the time they checked in up to the time of their ultimate departure. Atty.Raymund Armovit's testimony adequately and sufficiently established the serious anxiety,wounded feelings and social humiliation that petitioners suffered upon having been bumped



off. However, considering the circumstances of this case whereby the private respondentattended to the plight of the petitioners, taking care of their accommodations while waitingand boarding them in the flight back to the U.S. the following day, the Court finds that thepetitioners are entitled to moral damages in the amount of P100,000.00 each.

D E C I S I O N

GANCAYCO, J p:

This is a case which involves a Filipino physician and his family residing in the United Stateswho came home to the Philippines on a Christmas visit. They were bumped off at the ManilaInternational Airport on their return flight to the U.S. because of an erroneous entry in theirplane tickets relating to their time of departure.

In October 1981, the petitioners decided to spend their Christmas holidays with relatives and

friends in the Philippines, so they purchased from private respondent, (Northwest Airlines,Inc.) three (3) round trip airline tickets from the U.S. to Manila and back, plus three (3)tickets for the rest of the children, though not involved in the suit. Each ticket of thepetitioners which was in the handwriting of private respondent's tickets sales agent containsthe following entry on the Manila to Tokyo portion of the return flight:

"from Manila to Tokyo, NW flight 002, date 17 January, time 10:30 A.M. Status, OK." 1

On their return trip from Manila to the U.S. scheduled on January 17, 1982, petitioner arrivedat the check-in counter of private respondent at the Manila International Airport at 9:15 in

the morning, which is a good one (1) hour and fifteen (15) minutes ahead of the 10:30 A.M.scheduled flight time recited in their tickets. Petitioners were rudely informed that theycannot be accommodated inasmuch as Flight 002 scheduled at 9:15 a.m. was already takingoff and the 10:30 A.M. flight time entered in their plane tickets was erroneous.

Previous to the said date of departure petitioners re-confirmed their reservations throughtheir representative Ernesto Madriaga who personally presented the three (3) tickets at theprivate respondent's Roxas Boulevard office. 2 The departure time in the three (3) tickets of petitioners was not changed when re-confirmed. The names of petitioners appeared in thepassenger manifest and confirmed as Passenger Nos. 306, 307, and 308, Flight 002. 3

Herein petitioner Dr. Armovit protested in extreme agitation that because of the bump-off hewill not be able to keep his appointments with his patients in the U.S. Petitioners sufferedanguish, wounded feelings, and serious anxiety day and night of January 17th until themorning of January 18th when they were finally informed that seats will be available for themon the flight that day.

Because of the refusal of the private respondent to heed the repeated demands of thepetitioners for compensatory damages arising from the aforesaid breach of their air-transport

http://www.cdasiaonline.com/search/show_article/19320?search=%28title%3A+%28armovit%29+AND+title%3A+%28ca%29%29+OR+%28title%3A+%28armovit%29+AND+title%3A+%28%22Court+of+Appeals%22%29%29#footnotes














contracts, 4 petitioners were compelled to file an action for damages in the Regional TrialCourt of Manila.

After trial on the merits, a decision was rendered on July 2, 1985, the dispositive part of which reads as follows:

"WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered

ordering defendant to pay plaintiffs actual, moral, exemplary and nominal damages,plus attorney's fees, as follows:

a)Actual damages in favor of Dr. Herman Armovit in the sum of P1,300.00, with interest at the legal rate from January 17, 1982;

b)Moral damages of P500,000.00, exemplary damages of P500,000.00,and nominal damages of P100,000.00 in favor of Dr. HermanArmovit;

c)Moral damages of P300,000.00, exemplary damages of P300,000.00,and nominal damages of P50,000.00 in favor of Mrs. Dora Armovit;

d)Moral damages of P300,000.00, exemplary damages of P300,000.00,and nominal damages of P50,000.00 in favor of Miss JacquelineArmovit; and

e)Attorney's fees of 5% of the total awards under the above paragraphs.

plus costs of suit." 5

Not satisfied therewith, private respondent interposed an appeal to the Court of Appeals wherein in due course a decision was rendered on June 20, 1989, the relevant

portion and dispositive part of which read as follows:

"Plaintiffs-appellees had complied with the "72-hour reconfirmation rule." They hadobtained reconfirmation from defendant-appellant of the time and date of their flight,as indicated in their tickets. The trial court said so and We find nothing significance towarrant a disturbance of such finding.

On the allowance of damages, the trial court has discretion to grant and fix theamounts to be paid the prevailing party. In this case, there was gross negligence onthe part of defendant-appellant in reconfirming the time and date of departure of Flight No. 002 as indicated in the three (3) tickets (Exhibits A, A-1 and A-2). And, as

admitted by defendant-appellant, plaintiffs-appellees had arrived at the airport at 9:15 A.M. or one (1) hour before departure time of 10:30 A.M.

Appellees' actual damages in the amount of P1,300.00 is maintained for beingunrebutted by the Appellant.

However, We modify the allowance of the other awards made by the trial court.

The moral damages of P900,000.00 awarded to Appellees must be eliminatedconsidering the following: llcd











1.That the appellees did not take the witness stand to testify on their "socialhumiliation, wounded feelings and anxiety" and the breach of contract was notmalicious or fraudulent. (Art. 2220, Civil Code). It has been held that:

'Nor was there error in the appealed decision in denying moral damages, not only onaccount of the plaintiff's failure to take the witness stand and testify to her socialhumiliation, wounded feelings, anxiety, etc., as the decision holds, but primarilybecause a breach of contract like that of defendant not being malicious or fraudulent,does not warrant the award of moral damages under Article 2220 of the Civil Code(Ventilla vs. Centeno, L-14333, 28 Jan. 1961; Fores vs. Miranda, L-12163; 4 March1959; Francisco vs. GSIS, 7 SCRA 577).'

2.Furthermore, moral damages, though incapable of pecuniary estimation, are in thecategory of an award designed to compensate the claimant for actual injury sufferedand not to impose a penalty on the wrongdoer (San Andres vs. Court of Appeals, 116SCRA 85). In a later case, the Supreme Court held that moral damages areemphatically not intended to enrich a complainant at the expense of the defendant (R & B Surety vs. IAC, 129 SCRA 745) citing Grand Union Supermarket, Inc. vs. Espino

Jr. 94 SCRA 966).

However, there is no question that appellant acted with negligence in not informingappellees about the change of hour of departure. To provide an example or correctionfor the public good, therefore, the award of exemplary damages is proper (Art 2229 & 2231 Civil Code; Lopez v. Pan American World Airways, 16 SCRA 431; Prudenciado vs.

Alliance Transport, 148 SCRA 440). Nonetheless, the awards granted by the trial courtare far too exorbitant and excessive compared to the actual loss of P1,300.00. Theauthority of the Court of Appeals to modify or change the amounts of awards hasbeen upheld in a long line of decisions. We reduce the award of exemplary damagesfrom P500,000.00 to P100,000.00 in favor of Dr. Herman Armovit, from P500,000.00

to P50,000.00 in favor of Mrs. Dora Armovit; and from P300,000.00 to P20,000.00 infavor of Miss Jacqueline Armovit. (Gellada vs. Warner Barnes, 57 O.G. (4) 7347, Sadievs. Bachrach, 57 O.G. (4) 636, Prudenciado vs. Alliance Transport, supra) . The awardof nominal damages has to be eliminated since we are already awarding actual loss.Nominal damages cannot co-exist with actual or compensatory damages (Vda. deMedina, et al. v. Cresencia, et al., 99 Phil. 506).

The award of 5% of the total damages as attorney's fees is reasonable.

WHEREFORE, with the above modifications, the decision appealed from is hereby AFFIRMED in all other respects." 6

A motion for reconsideration thereof filed by the petitioners was denied in a resolution datedMay 29, 1989. 7

Both petitioners and private respondent elevated the matter to this Court for review bycertiorari.











The petition of private respondent was docketed as G.R. No. 86776. It was denied in aresolution of this Court dated July 10, 1989, and the motion for reconsideration thereof wasdenied in a resolution dated September 6, 1989. On October 12, 1989 this Court ordered theentry of judgment in this case and for the records to be remanded to the court of origin forprompt execution of the judgment.

In the herein petition for review on certiorari filed by petitioner they claim that the questioned

decision and resolution of the Court of Appeals should be struck down as an unlawful, unjustand reasonless departure from the decisions of this Court as far as the award for moraldamages and the drastic reduction of the exemplary damages are concerned. cdll

The petition is impressed with merit.

The appellate court observed that private respondent was guilty of gross negligence not onlyin the issuance of the tickets by the erroneous entry of the date of departure and withoutchanging or correcting the error when the said three (3) tickets were presented for re-confirmation. Nevertheless it deleted the award of moral damages on the ground that

petitioners did not take the witness stand to testify on "their social humiliation, woundedfeelings and anxiety, and that the breach of contract was not malicious or fraudulent." 8

We disagree.

In Air France vs. Carrascoso , 9 Lopez vs. Pan American World Airways , 10 and Zulueta vs. Pan American World Airways , 11 this Court awarded damages for the gross negligence of theairline which amounted to malice and bad faith and which tainted the breach of airtransportation contract.

Thus in Air France, this Court observed:

"A contract to transport passengers is quite different in kind and degree from anyother contractual relation. And this, because of the relation which an air carriersustains with the public. Its business is mainly with the traveling public. It invitespeople to avail of the comforts and advantages it offers. The contract of air carriage,therefore, generates a relation attended with a public duty . Neglect or malfeasance of the carrier's employees, naturally, could give ground for an action for damages.

"Passengers do not contract merely for transportation. They have the right to betreated by the carrier's employees with kindness, respect, courtesy and dueconsideration. They are entitled to be protected against personal misconduct,injurious language, indignities and abuses from such employees. So it is, thatany rude or discourteous conduct on the part of employees towards a passenger gives the latter an action for damages against the carrier ." 12

The gross negligence committed by private respondent in the issuance of the tickets withentries as to the time of the flight, the failure to correct such erroneous entries and themanner by which petitioners were rudely informed that they were bumped off are























clear indicia of such malice and bad faith and establish that private respondent committed abreach of contract which entitles petitioners to moral damages.

The appellate court observed that the petitioners failed to take the witness stand and testifyon the matter. It overlooked however, that the failure of the petitioner to appear in court totestify was explained by them. The assassination of Senator Benigno Aquino, Jr. on August21, 1983 following the year they were bumped off caused a turmoil in the country. This

turmoil spilled over to the year 1984 when they were scheduled to testify. However, theviolent demonstrations in the country were sensationalized in the U.S. media so petitionerswere advised to refrain from returning to the Philippines at the time. LLjur

Nevertheless, Atty. Raymund Armovit, brother of petitioner Dr. Armovit, took the witnessstand as he was with the petitioners from the time they checked in up to the time of theirultimate departure. He was a witness when the check-in officer rudely informed thepetitioners that their flight had already taken off, while petitioner Dr. Armovit remonstratedthat their tickets reflected their flight time to be 10:30 A.M.; that in anger and frustration,Dr. Armovit told the said check-in-officer that he had to be accommodated that morning so

that he could attend to all his appointments in the U.S.; that petitionerJacqueline Armovit also complained about not being able to report for work at the expirationof her leave of absence; that while petitioner had to accept private respondent's offer forhotel accommodations at the Philippine Village Hotel so that they could follow up and wait fortheir flight out of Manila the following day, petitioners did not use their meal couponssupplied because of the limitations thereon so they had to spend for lunch, dinner, andbreakfast in the sum of P1,300.00 while waiting to be flown out of Manila; thatDr. Armovit had to forego the professional fees for the medical appointments he missed dueto his inability to take the January 17 flight; that the petitioners were finally able to fly out of Manila on January 18, 1982, but were assured of this flight only on the very morning of thatday, so that they experienced anxiety until they were assured seats for that flight. 13

No doubt Atty. Raymund Armovit's testimony adequately and sufficiently established theserious anxiety, wounded feelings and social humiliation that petitioners suffered upon havingbeen bumped off. However, considering the circumstances of this case whereby the privaterespondent attended to the plight of the petitioners, taking care of their accommodationswhile waiting and boarding them in the flight back to the U.S. the following day, the Courtfinds that the petitioners are entitled to moral damages in the amount of P100,000.00 each.

By the same token to provide an example for the public good, an award of exemplarydamages is also proper. 14 The award of the appellate court is adequate. llcd

Nevertheless, the deletion of the nominal damages by the appellate court is well-taken sincethere is an award of actual damages. Nominal damages cannot co-exist with actual orcompensatory damages. 15

WHEREFORE, the petition is GRANTED. The questioned judgment of the Court of Appeals ishereby modified such that private respondent shall pay the following:















(a)actual damages in favor of Dr. Armovit in the sum of P1,300.00 with interest at the legalrate from January 17, 1982;

(b)moral damages at P100,000.00 and exemplary damages and P100,000.00 in favor of Dr. Armovit;

(c)moral damages of P100,000.00 and exemplary damages of P50,000.00 in favor of Mrs.

Dora Armovit;

(d)moral damages of P100,000.00 and exemplary damages in the amount of P20,000.00 infavor of Miss Jacqueline Armovit; and

(e)attorney's fees at 5% of the total awards under the above paragraphs, plus the cost of suit.

SO ORDERED.

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