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they preferred to stay in Business Class, she “obstinately, [COMMON CARRIERS - NATURE AND BASIS OF LIABILITY]

uncompromisingly and in a loud, discourteous and harsh voice 20 CATHAY PACIFIC AIRWAYS v. SPS. Vazquez
threatened” that they could not board and leave with the flight March 14, 2003 | Davide, Jr. CJ. |
unless they go to First Class since Business Class was
overbooked. Doctrine: Spouses Vazquez voluntarily and freely gave their
◦ They also alleged that since they were unjustifiably delayed to consent to an agreement whose object was to transport them from
board the plane, the storage compartment was already full. Dr. Manila → Hong Kong → Manila, with seats in the Business Class
Vazquez was not assisted in putting his luggage in the Section of the aircraft, and whose cause or consideration was the
overhead storage compartment and as a result, his bilateral fare paid by the Vazquezes to Cathay. Airline passengers have
carpal tunnel syndrome was aggravated, causing him extreme every right to decline an upgrade and insist on the accommodation
pain on his arm and wrist. they had booked, and if an airline insists on the upgrade, it
breaches its contract of carriage with the passengers.
CATHAY PACIFIC
• It is a practice among commercial airlines to upgrade passengers Facts:
to the next better class of accommodation, whenever an • Cathay accords its frequent flyers membership in its Marco Polo
opportunity arises, such as when a certain section is fully booked. Club . Members enjoy special privileges, such as upgrading of
• When the Business Class Section of Flight CX-905 was fully booking without any extra charge when an opportunity arises.
booked, Cathay’s computer sorted out the names of favored • Spouses Vazquez are frequent flyers and Gold Card members of
passengers for involuntary upgrading to First Class Cathay’s Marco Polo Club
• Dr. Vazquez refused the upgrade then stood at the entrance of • Sept. 28, 1996 — Flight back to Manila scheduled to depart at
the boarding apron, blocking the queue of passengers from 9:20pm
boarding the plane, which inconvenienced other passengers. He ◦ Vazquezes and their friends Pacita Cruz and Josefina Vergel de
shouted at Ms. Chiu that it was impossible for he and his wife to Dios had Business Class seats while the two maids were in
be upgraded without his two friends traveling with them. Economy Class
• Ms. Chiu thought of upgrading Dr. Vazquez’ friends but • At the Departure Gate, when the spouses’ boarding passes were
discovered they did not have priority for upgrading. She tried to scanned, the computer monitor revealed a message that there
book the Vazquezes again to their original seats but learned that was a seat change from Business to First Class
the Business Class Section was already full. • Dr. Vazquez refused the upgrade. He argued it would not look
• Its employees at the Hong Kong airport acted in good faith in nice for them as hosts to travel in First Class while their guests
dealing with the Vazquezes; none of them shouted, humiliated, were in Business Class and they were going to discuss business
embarrassed, or committed any act of disrespect against the matters during the flight.
Vazquezes. • Ms. Chiu, the ground attendant, told the Vazquezes that
• Overbooking is a widely accepted practice in the airline Business Class was fully booked and if they would not
industry and is in accordance with the International Air Transport avail the upgrade, they would not be allowed to take the
Association (IATA) regulations. Airlines overbook because a lot of flight. Eventually, Dr. Vazquez gave in.
passengers do not show up for their flight. • Upon their return to Manila, the Vazquezes addressed a letter to
• With respect to Flight CX-905, there was no overall overbooking Cathay’s Country Manager demanding that they be indemnified
to a degree that a passenger was bumped off or downgraded in the amount of P1M for the “humiliation and embarrassment”
and that they receive a “written apology” from Cathay
RTC: in favor of spouses management as well as Ms. Chiu.
• Cathay offers various classes of seats from which passengers are
allowed to choose regardless of their reasons or motives, whether SPS Vazquez
it be due to budgetary constraints or whim. • Vazquezes instituted an action for damages against Cathay
alleging in their complaint that when they informed Ms. Chiu that
Section was fully booked. Ms. Chiu might have failed to • The choice imposes a clear obligation on Cathay to transport the
consider the remedy of offering the First Class seats to other passengers in the class chosen by them. The carrier cannot,
passengers, but such was poor judgment, not bad faith. without exposing itself to liability, force a passenger to
◦ Neither was the transfer effected for some evil or devious involuntarily change his choice.
purpose. An upgrading is for the better condition and definitely • The upgrading of the Vazquezes’ accommodation over and above
for the benefit of the passenger. their vehement objections was due to the overbooking of the
• The overbooking of the Business Class section did not Business Class. It was a pretext to pack as many passengers as
constitute bad faith on the part of Cathay. possible into the plane to maximize Cathay’s revenues.
◦ Economic Regulation No. & of the Civil Aeronautics Board,
Section 3. “ xxx Provided, however, that overbooking not CA: in favor of spouses
exceeding 10% of the seating capacity of the aircraft • By upgrading the Vazquezes to First Class, Cathay novated the
shall not be considered as a deliberate and willful act of contract of carriage without the former’s consent.
non-accommodation.”
◦ While there was admittedly an overbooking of the Business Issue:
Class, there was no evidence of over-booking of the plane 1. W/N Cathay breached its contract of carriage with the Vazquezes
beyond ten percent, and no passenger was ever bumped off or when it upgraded them from Business to First Class — YES
was refused to board the aircraft.
2. W/N upgrade was attended with fraud or bad faith — NO
Dispositive
WHEREFORE, the instant petition is hereby partly GRANTED. The Held:
Decision of the Court of Appeals of 24 July 2001 in CA-G.R. CV No. 1. YES — the upgrade privilege given to Marco Polo Club
63339 is hereby MODIFIED, and as modified, the awards for moral members is one that could be waived. Spouses Vazquez
damages and attorneyÊs fees are set aside and deleted, and the should have been consulted if they would avail of their
award for nominal damages is reduced to P5,000. upgrade before their seat assignments were given to other
passengers.
• Breach of contract is defined as the “failure without legal reason
to comply with the terms of a contract”
• Vazquezes never denied that they were members of Cathay’s
Marco Polo Club. They knew that as members of the Club, they
had priority for upgrading of their seat accommodation at no
extra cost. But such priority could be waived.
• Vazquezes had every right to decline the upgrade and insist on
the Business Class accommodation they had booked. It should
not have been imposed on them over their vehement objection.
• By insisting on the upgrade, Cathay breached its contract of
carriage with the Vazquezes.

2. However, the upgrade or breach of contract was not


attended by fraud or bad faith.
• The Vazquezes were not induced to agree to the upgrading
through insidious words or deceitful machination or through
willful concealment of material facts.
◦ Ms. Chiu was honest in telling them that their seats were
already given to other passengers and the Business Class

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