544 SUPREME COURT REPORTS ANNOTATED

Japan Airlines vs. Asuncion

G.R. No. 161730. January 28, 2005.*
JAPAN AIRLINES, petitioner, vs. MICHAEL ASUNCION and JEANETTE
ASUNCION, respondents.
Transportation; Common Carriers; Air Transportation; When an airline
issues a ticket to a passenger, confirmed for a particular flight on a certain
date, a contract of carriage arises and the passenger has every right to expect
that he be transported on that flight and on that date and it becomes the
carrier’s obligation to carry him and his luggage safely to the agreed
destination.—Under Article 1755 of the Civil Code, a common carrier such as
JAL is bound to carry its passengers safely as far as human care and foresight
can provide, using the utmost diligence of very cautious persons, with due
regard for all the circumstances. When an airline issues a ticket to a
passenger, confirmed for a particular flight on a certain date, a contract of
carriage arises. The passenger has every right to expect that he be transported
on that flight and on that date and it becomes the carrier’s obligation to carry
him and his luggage safely to the agreed destination. If the passenger is not so
transported or if in the process of transporting he dies or is injured, the carrier
may be held liable for a breach of contract of carriage.
Same; Same; Same; While it may be true that an airline has the duty to
inspect whether its passengers have the necessary travel documents, such duty
does not extend to checking the veracity of every entry in such documents—an
airline could not vouch for the authenticity of a passport and the correctness of
the entries therein.—We find that JAL did not breach its contract of carriage
with respondents. It may be true that JAL has the duty to inspect whether its
passengers have the necessary travel documents, however, such duty does not
extend to checking the veracity of every entry in these documents. JAL could
not vouch for the authenticity of a passport and the correctness of the entries
therein. The power to admit or not an alien into the country is a sovereign act
which cannot be interfered with even by JAL. This is not within the ambit of
the contract of carriage entered into by JAL and herein respondents. As such,
JAL
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*FIRST DIVISION.
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Japan Airlines vs. Asuncion
should not be faulted for the denial of respondents’ shore pass applications.
 Same; Same; Same; Damages; Where there is no breach of contract nor
proof that an airline acted in wanton, fraudulent or malevolent manner, there
is no basis for the award of any form of damages.—Moral damages may be
recovered in cases where one willfully causes injury to property, or in cases of
breach of contract where the other party acts fraudulently or in bad faith.
Exemplary damages are imposed by way of example or correction for the
public good, when the party to a contract acts in wanton, fraudulent,
oppressive or malevolent manner. Attorney’s fees are allowed when exemplary
damages are awarded and when the party to a suit is compelled to incur
expenses to protect his interest. There being no breach of contract nor proof
that JAL acted in wanton, fraudulent or malevolent manner, there is no basis
for the award of any form of damages.
Actions; Damages; A person’s right to litigate should not be penalized by
holding him liable for damages.—We find that the Court of Appeals correctly
dismissed JAL’s counterclaim for litigation expenses, exemplary damages and
attorney’s fees. The action was filed by respondents in utmost good faith and
not manifestly frivolous. Respondents honestly believed that JAL breached its
contract. A person’s right to litigate should not be penalized by holding him
liable for damages. This is especially true when the filing of the case is to
enforce what he believes to be his rightful claim against another although
found to be erroneous.

PETITION for review on certiorari of the decision and resolution of the Court
of Appeals.

The facts are stated in the opinion of the Court.

Quisumbing Torres for petitioner.
Ferry, Toledo, Gonzaga, Tria & Associates for respondents.
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Japan Airlines vs. Asuncion

YNARES-SANTIAGO, J.:

This petition for review seeks to reverse and set aside the October 9, 2002
decision1 of the Court of Appeals and its January 12, 2004 resolution, 2 which
affirmed in toto the June 10, 1997 decision of the Regional Trial Court of
Makati City, Branch 61 in Civil Case No. 92-3635.3
On March 27, 1992, respondents Michael and Jeanette Asuncion left Manila
on board Japan Airlines’ (JAL) Flight 742 bound for Los Angeles. Their
itinerary included a stopover in Narita and an overnight stay at Hotel Nikko
Narita. Upon arrival at Narita, Mrs. Noriko Etou-Higuchi of JAL endorsed
their applications for shore pass and directed them to the Japanese
immigration official.4 A shore pass is required of a foreigner aboard a vessel or
aircraft who desires to stay in the neighborhood of the port of call for not more
than 72 hours.
During their interview, the Japanese immigration official noted that
Michael appeared shorter than his height as indicated in his passport.
Because of this inconsistency, respondents were denied shore pass entries and
were brought instead to the Narita Airport Rest House where they were
billeted overnight.
The immigration official also handed Mrs. Higuchi a Notice5 where it was
stated that respondents were to be “watched so as not to escape.”
Mr. Atsushi Takemoto of the International Service Center (ISC), the agency
tasked by Japan’s Immigration Department
_______________
1 Penned by Associate Justice Elvi John S. Asuncion as concurred in by
Associate Justices Portia Aliño-Hormachuelos and Juan Q. Enriquez, Jr.,
Rollo, pp. 67-74.
2 Rollo, p. 76.
3 Penned by Judge Fernando V. Gorospe, Jr., Rollo, pp. 87-92.
4 Mrs. Higuchi’s Deposition, 21 September 1994, Records, pp. 583-585.
5 Exhibit “1-E-Deposition,” Records, p. 627.

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Japan Airlines vs. Asuncion
to handle passengers who were denied shore pass entries, brought respondents
to the Narita Airport Rest House where they stayed overnight until their
departure the following day for Los Angeles. Respondents were charged
US$400.00 each for their accommodation, security service and meals.
On December 12, 1992, respondents filed a complaint for damages6 claiming
that JAL did not fully apprise them of their travel requirements and that they
were rudely and forcibly detained at Narita Airport.
JAL denied the allegations of respondents. It maintained that the refusal of
the Japanese immigration authorities to issue shore passes to respondents is
an act of state which JAL cannot interfere with or prevail upon. Consequently,
it cannot impose upon the immigration authorities that respondents be
billeted at Hotel Nikko instead of the airport resthouse.7
On June 10, 1997, the trial court rendered its decision, the dispositive
portion of which reads:
“WHEREFORE PREMISES CONSIDERED, judgment is hereby rendered in
favor of plaintiffs ordering defendant JAL to pay plaintiffs as follows:
 1.1.the sum of US$800.00 representing the expenses incurred at the
Narita Airport with interest at 12% per annum from March 27, 1992
until the sum is fully paid;
2.2.the sum of P200,000.00 for each plaintiff as moral damages;
3.3.the amount of P100,000.00 for each plaintiff as exemplary damages;
4.4.the amount of P100,000.00 as attorney’s fees; and
5.5.costs of suit.

SO ORDERED.”8
_______________
6 Rollo, pp. 77-81.
7 Id., p. 84.
8 Id., p. 92.

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Japan Airlines vs. Asuncion
The trial court dismissed JAL’s counterclaim for litigation expenses,
exemplary damages and attorney’s fees.
On October 9, 2002, the Court of Appeals affirmed in toto the decision of the
trial court. Its motion for reconsideration having been denied,9 JAL now files
the instant petition.
The basic issue for resolution is whether JAL is guilty of breach of contract.
Under Article 1755 of the Civil Code, a common carrier such as JAL is
bound to carry its passengers safely as far as human care and foresight can
provide, using the utmost diligence of very cautious persons, with due regard
for all the circumstances. When an airline issues a ticket to a passenger,
confirmed for a particular flight on a certain date, a contract of carriage arises.
The passenger has every right to expect that he be transported on that flight
and on that date and it becomes the carrier’s obligation to carry him and his
luggage safely to the agreed destination.10 If the passenger is not so
transported or if in the process of transporting he dies or is injured, the carrier
may be held liable for a breach of contract of carriage.11
We find that JAL did not breach its contract of carriage with respondents. It
may be true that JAL has the duty to inspect whether its passengers have the
necessary travel documents, however, such duty does not extend to
checking the veracity of every entry in these documents. JAL could not vouch
for the authenticity of a passport and the correctness of the entries therein.
The power to admit or not an alien into the country is a sovereign act which
cannot be interfered with even by JAL. This is not within the ambit of the
contract of
_______________
9 Id., p. 76.
10 Cathay Pacific Airways, Ltd. v. Court of Appeals, G.R. No. 60501, 5 March
1993, 219 SCRA 520, 524.
11 Singapore Airlines Limited v. Fernandez, G.R. No. 142305, 10 December

2003, 417 SCRA 474, 480, citing Alitalia Airways v. Court of Appeals, G.R. No.
77011, 24 July 1990, 187 SCRA 763, 770.
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Japan Airlines vs. Asuncion
carriage entered into by JAL and herein respondents. As such, JAL should not
be faulted for the denial of respondents’ shore pass applications.
Prior to their departure, respondents were aware that upon arrival in
Narita, they must secure shore pass entries for their overnight stay.
Respondents’ mother, Mrs. Imelda Asuncion, insisted though that Ms. Linda
Villavicencio of JAL assured her that her children would be granted the
passes.12 This assertion was satisfactorily refuted by Ms. Villavicencio’s
testimony during the cross examination, to wit:
ATTY. GONZAGA:
Q I will show to you Exh. 9 which is the TIM and on
page 184 hereof, particularly number 10, and I quote,
“Those holding tickets with confirmed seats and
other documents for their onward journey and
continuing their journey to a third country provided
that they obtain an indorsement with an application
of shore pass or transit pass from the airline ground
personnel before clearing the immigration
formality?”
WITNESS:
A Yes, Sir.
Q Did you tell this provision to Mrs. Asuncion?
A Yes, Sir. I did.
Q Are you sure?
A Yes, Sir.
Q Did you give a copy?
A No, Sir, I did not give a copy but verbally I explained
to her the procedure they have to undergo when they
get to narita airport.
....
Q And you read the contents of this [TIM]?
A No, Sir, I did not read it to her but I explained to her
 the procedure that each passenger has to go through
before
_______________
12 Records, p. 327.
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Japan Airlines vs. Asuncion
when they get to narita airport before they line up
in the immigration counter.
Q In other words, you told Mrs. Asuncion the
responsibility of securing shore passes bears solely
on the passengers only?
A Yes, Sir.
Q That the airline has no responsibility whatsoever
with regards (sic) to the application for shore
passes?
A Yes, Sir.13
Next, respondents claimed that petitioner breached its contract of carriage
when it failed to explain to the immigration authorities that they had
overnight vouchers at the Hotel Nikko Narita. They imputed that JAL did not
exhaust all means to prevent the denial of their shore pass entry applications.
To reiterate, JAL or any of its representatives have no authority to interfere
with or influence the immigration authorities. The most that could be expected
of JAL is to endorse respondents’ applications, which Mrs. Higuchi did
immediately upon their arrival in Narita.
As Mrs. Higuchi stated during her deposition:
ATTY. QUIMBO
Q: Madam Witness, what assistance did you give, if
any, to the plaintiffs during this interview?
A: No, I was not present during their interview. I
cannot assist.
Q: Why not?
A: It is forbidden for a civilian personnel to interfere
with the Immigration agent’s duties.14
....
Q: During the time that you were in that room and you
were given this notice for you to sign, did you tell
the immigra
_______________
13 TSN, Linda Villavicencio, 21 July 1994, Records, pp. 403-406.
 14 Mrs. Higuchi’s Deposition, Records, p. 586.
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Japan Airlines vs. Asuncion
tion agent that Michael and Jeanette Asuncion
should be allowed to stay at the Hotel Nikko
Narita because, as passengers of JAL, and
according to the plaintiff, they had vouchers to
stay in that hotel that night?
A: No, I couldn’t do so.
Q: Why not?
A: This notice is evidence which shows the
decision of immigration authorities. It shows
there that the immigration inspector also
designated Room 304 of the Narita Airport
Resthouse as the place where the passengers
were going to wait for their outbound flight. I
cannot interfere with that decision.15
Mrs. Higuchi did all she could to assist the respondents. Upon being notified of
the denial of respondents’ applications, Mrs. Higuchi immediately made
reservations for respondents at the Narita Airport Rest House which is really
more a hotel than a detention house as claimed by respondents.16
More importantly, nowhere in respondent Michael’s testimony did he state
categorically that Mrs. Higuchi or any other employee of JAL treated them
rudely or exhibited improper behavior throughout their stay. We therefore find
JAL not remiss in its obligations as a common carrier.
Moral damages may be recovered in cases where one willfully causes injury
to property, or in cases of breach of contract where the other party acts
fraudulently or in bad faith. Exemplary damages are imposed by way of
example or correction for the public good, when the party to a contract acts in
wanton, fraudulent, oppressive or malevolent manner. Attorney’s fees are
allowed when exemplary damages are awarded and when the party to a suit is
compelled to incur expenses to protect his interest.17 There being no breach of
contract nor
_______________
15 Id., pp. 589-590.
16 Exhibits “1-H-Deposition,” “1-J-Deposition” to “1-N-Deposition,” Records,

pp. 630, 632-634.

17 Rivera v. Del Rosario, G.R. No. 144934, 15 January 2004, 419 SCRA 626.

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Japan Airlines vs. Asuncion
proof that JAL acted in wanton, fraudulent or malevolent manner, there is no
basis for the award of any form of damages.
Neither should JAL be held liable to reimburse respondents the amount of
US$800.00. It has been sufficiently proven that the amount pertained to ISC,
an agency separate and distinct from JAL, in payment for the accommodations
provided to respondents. The payments did not in any manner accrue to the
benefit of JAL.
However, we find that the Court of Appeals correctly dismissed JAL’s
counterclaim for litigation expenses, exemplary damages and attorney’s fees.
The action was filed by respondents in utmost good faith and not manifestly
frivolous. Respondents honestly believed that JAL breached its contract. A
person’s right to litigate should not be penalized by holding him liable for
damages. This is especially true when the filing of the case is to enforce what
he believes to be his rightful claim against another although found to be
erroneous.18
WHEREFORE, in view of the foregoing, the instant petition is PARTLY
GRANTED. The October 9, 2002 decision of the Court of Appeals and its
January 12, 2004 resolution in CA-G.R. CV No. 57440, are REVERSED and
SET ASIDE insofar as the finding of breach on the part of petitioner and the
award of damages, attorney’s fees and costs of the suit in favor of respondents
is concerned. Accordingly, there being no breach of contract on the part of
petitioner, the award of actual, moral and exemplary damages, as well as
attorney’s fees and costs of the suit in favor of respondents Michael and
Jeanette Asuncion, is DELETED for lack of basis. However, the dismissal for
lack of merit of petitioner’s counterclaim for litigation expenses, exemplary
damages and attorney’s fees, is SUSTAINED. No pronouncement as to costs.
_______________
18J. Marketing Corp. v. Sia, Jr., 349 Phil. 513, 517; 285 SCRA 580, 583
(1998).
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Japan Airlines vs. Asuncion
SO ORDERED.