G.R. No. 150843            March 14, 2003
There
CATHAY PACIFIC AIRWAYS, LTD., petitioner,
vs.
SPOUSES DANIEL VAZQUEZ and MARIA LUISA
MADRIGAL VAZQUEZ, respondents.
DAVIDE, JR., C.J.:
FACTS:
Cathay is a common carrier engaged in the
business of transporting passengers and goods
by air. It services the Manila-Hongkong-Manila
course, among many others.
As part of its marketing strategy, it accords its
frequent flyers membership in its Marco Polo
Club. Members enjoy priority for upgrading of
booking without any extra charge whenever
opportunity arises. So a frequent flyer booked
in Business Class has priority for upgrading to
First Class if the Business Class Section is fully
Booked.
Spouses Vasquez are frequent flyers of Cathay
Pacific (“Cathay”). They, together with their
maid and 2 friends went to Hong Kong. On their
flight back to Manila, they and their 2 friends
were booked on the Business Class. But prior to
departure, Sps. Vasquez were informed that
they would be upgraded to First Class. Sps.
Vasquez refused the upgrade, reasoning that it
would not look nice for them as hosts to travel
in First Class and their guests, in the Business
Class; plus, they were going to discuss business
matters during the flight. They asked that other
passengers be instead transferred to First Class.
However, Cathay personnel insisted saying the
Business Class was already overbooked and if
Sps. V continued to refuse, they would not be
allowed to take the flight. Sps. Vasquez had to
agree. But upon their arrival, Sps. Vasquez
demanded from Cathay that they be
indemnified for the “humiliation and
embarrassment” regarding the upgrade
incident.
RTC: In favor of Vasquezes. The upgrading of
passengers was a pretext to pack as many
passengers as possible to maximize its
revenues. Deceit, gross negligence, bad faith
present. Nominal—100k for each plaintiff;
Moral—2M each; Exemplary—5M each; Atty’s
fees—1M each.
CA: Deleted exemplary. Reduced awards.
was a novation without the Vasquezes’ consent
and breach.
ISSUES:
Whether or not the Vasquezes are entitled to
moral damages.
RULING:
THERE WAS BREACH OF CONTRACT. BUT NO
BAD FAITH/FRAUD, SO NO DAMAGES.
A contract of carriage existed between Cathay
and the Vazquezes. They voluntarily and freely
gave their consent to an agreement whose
object was the transportation of the Vazquezes
from Manila to Hong Kong and back to Manila,
with seats in the Business Class Section of the
aircraft, and whose cause or consideration was
the fare paid by the Vazquezes to Cathay.
In all their pleadings, the 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
when an opportunity arises.
But, just like other privileges, such priority could
be waived. The Vazquezes should have been
consulted first whether they wanted to avail
themselves of the privilege or would consent to
a change of seat accommodation before their
seat assignments were given to other
passengers. They clearly waived their priority or
preference when they asked that other
passengers be given the upgrade. 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.
The SC is not persuaded by the Vazquezes’
argument that the overbooking of the Business
ClassSection constituted bad faith on the part of
Cathay.
Economic Regulation No. 7 of the Civil
Aeronautics Board: “…Provided, however, that
overbooking not exceeding 10% of the seating
capacity of the aircraft shall not be considered
as a deliberate and willful act of non-
accommodation.”
It is clear from this section that an overbooking
that does not exceed ten percent is not
considered deliberate and therefore does not
amount to bad faith. Here, while there was
admittedly an overbooking of the Business
Class, there was no evidence of overbooking of
the plane beyond ten percent, and no
passenger was ever bumped off or was refused
to board the aircraft
DAMAGES: Moral damages predicated upon a
breach of contract of carriage may only be
recoverable in instances where the carrier is
guilty of fraud or bad faith or where the mishap
resulted in the death of a passenger. THUS NO
MORAL DAMAGES in this case. The deletion of
the award for exemplary damages by the Court
of Appeals is correct. It is a requisite in the grant
of exemplary damages that the act of the
offender must be accompanied by bad faith or
done in wanton, fraudulent or malevolent
manner. The most that can be adjudged in favor
of the Vazquezes for Cathay’s breach
of contract is an award for nominal damages
under Article 2221 of the Civil Code.
AIR FRANCE, PETITIONER, VS. BONIFACIO H.
GILLEGO, SUBSTITUTED BY HIS SURVIVING
HEIRS REPRESENTED BY DOLORES P. GILLEGO,
RESPONDENT.
FACTS:
Respondent Congressman Gillego was
invited to participate as one of the keynote
speakers at the 89th Inter-Parliamentary
Conference Symposium on Parliament Guardian
of Human Rights to be held in Budapest,
Hungary and Tokyo, Japan on May 19 to 22,
1993.
On May 16, 1993, respondent left
Manila on board petitioner Air France’s aircraft
bound for Paris, France. He arrived in Paris early
5 in the morning of May 17th. While waiting for
his connecting flight to Budapest, respondent
learned that petitioner had another aircraft
bound for Budapest with an earlier departure
time than his scheduled flight. He then went to
petitioner’s counter at the airport and made
arrangements for the change in his booking. He
was given a corresponding ticket and boarding
pass for and also a new baggage claim stub for
his checked-in luggage. However, upon arriving
in Budapest, respondent was unable to locate
his luggage at the claiming section. He sought
assistance from petitioner’s counter at the
airport and was advised to just wait for his
luggage at his hotel and that petitioner’s
representatives would take charge of delivering
the same to him that same day. But said
luggage was never despite follow-up inquiries.
Upon his return to the Philippines,
respondent immediately wrote petitioner’s
Station Manager complaining about the lost
luggage and the resulting damages he suffered
while in Budapest; that his single luggage
contained his personal effects such as clothes,
toiletries, medicines for his hypertension, and
the speeches he had prepared, He was thus left
with only his travel documents, pocket money
and the clothes he was wearing. Respondent
was forced to shop for personal items including
new clothes and his medicines. Aside from
these unnecessary expenditures of about
$1,000, respondent had to prepare another
speech, in which he had difficulty due to lack of
data and information. Petitioner continued to
ignore respondent’s repeated follow-ups
regarding his lost luggage.
Respondent filed a complaint for
damages against the petitioner alleging that by
reason of its negligence and breach of
obligation to transport and deliver his luggage,
respondent suffered inconvenience, serious
anxiety, physical suffering and sleepless nights.
Petitioner averred that it has taken all necessary
measures to avoid loss of respondent’s
baggage, the contents of which respondent did
not declare, and that it has no intent to cause
such loss, much less knew that such loss could
occur. The loss of respondent’s luggage is due
to or occasioned by force majeure or fortuitous
event or other causes beyond the carrier’s
control. Diligent, sincere and timely efforts were
exerted by petitioner to locate respondent’s
missing luggage and attended to his problem
with utmost courtesy, concern and dispatch.
Petitioner further asserted that it exercised due
diligence in the selection and supervision of its
employees and acted in good faith in denying
respondent’s demand for damages. The claims
for actual, moral and exemplary damages and
attorney’s fees therefore have no basis in fact
and in law, and are, moreover speculative and
unconscionable.
Issue:
Whether or not there was a legal and
factual basis that Air France's actions were
attended by gross negligence, bad faith and
willful misconduct and that it acted in a wanton,
fraudulent, reckless, oppressive or malevolent
manner to justify award of moral and exemplary
damages?
Ruling:
The petition is partly meritorious. A
business intended to serve the travelling public
primarily, a contract of carriage is imbued with
public interest. The law governing common
carriers consequently imposes an exacting
standard. Article 1735 of the Civil Code provides
that in case of lost or damaged goods, common
carriers are presumed to have been at fault or
to have acted negligently, unless they prove
that they observed extraordinary diligence as
required by Article 1733. Thus, in an action
based on a breach of contract of carriage, the
aggrieved party does not have to prove that the
common carrier was at fault or was negligent.
All that he has to prove is the existence of the
contract and the fact of its non-performance by
the carrier.
That respondent’s checked-in luggage
was not found upon arrival at his destination
and was not returned to him until about two
years later is not disputed. The action filed by
the respondent is founded on such breach of
the contract of carriage with petitioner who
offered no satisfactory explanation for the
unreasonable delay in the delivery of
respondent’s baggage. The presumption of
negligence was not overcome by the petitioner
and hence its liability for the delay was
sufficiently established. However, upon receipt
of the said luggage during the pendency of the
case in the trial court, respondent did not
anymore press on his claim for actual or
compensatory damages and neither did he
adduce evidence of the actual amount of loss
and damage incurred by such delayed delivery
of his luggage. Consequently, the trial court
proceeded to determine only the propriety of
his claim for moral and exemplary damages, and
attorney’s fees.
In awarding moral damages for breach
of contract of carriage, the breach must be
wanton and deliberately injurious or the one
responsible acted fraudulently or with malice or
bad faith. Not every case of mental anguish,
fright or serious anxiety calls for the award of
moral damages. Where in breaching the
contract of carriage the airline is not shown to
have acted fraudulently or in bad faith, liability
for damages is limited to the natural and
probable consequences of the breach of the
obligation which the parties had foreseen or
could have reasonably foreseen. In such a case
the liability does not include moral and
exemplary damages.
In repeatedly ignoring respondent’s
inquiries, petitioner’s employees exhibited an
indifferent attitude without due regard for the
inconvenience and anxiety he experienced after
realizing that his luggage was missing. Petitioner
was thus guilty of bad faith in breaching its
contract of carriage with the respondent, which
entitles the latter to the award of moral
damages. However, we agree with petitioner
that the sum of ₱1,000,000.00 awarded by the
trial court is excessive and not proportionate to
the loss or suffering inflicted on the passenger
under the circumstances.
G.R. No. 157009               March 17, 2010
SULPICIO LINES, INC., Petitioner,
vs.
DOMINGO E. CURSO, LUCIA E. CURSO,
MELECIO E. CURSO, SEGUNDO E. CURSO,
VIRGILIO E. CURSO, DIOSDADA E. CURSO, and
CECILIA E. CURSO, Respondents.
FACTS:
October 23, 1988, Dr. Curso boarded the MV
Doña Marilyn, a vessel owned and operated by
petitioner Sulpicio Lines, Inc.for Tacloban City.
Unfortunately, the MV Doña Marilyn at sea due
to the inclement sea and weather conditions
brought about by Typhoon Unsang. The body of
Dr. Curso was not recovered, along with recoverable in actions for damages predicated
hundreds of other passengers of the ill-fated on a breach of contract, unless there is fraud or
vessel. bad faith. As an exception, moral damages may
be awarded in case of breach of contract of
Respondents, brothers and sisters of Dr. Curso,
carriage that results in the death of a passenger,
sued the petitioner in the RTC in Naval, Biliran
in accordance with Article 1764, in relation to
to claim damages based on breach of contract
Article 2206 (3), of the Civil Code, which
of carriage by sea, averring that the petitioner
provide: “The spouse, legitimate and
acted negligently in transporting Dr. Curso and
illegitimate descendants and ascendants of the
the other passengers. They stated, that their
deceased may demand moral damages for
parents had predeceased Dr. Curso, who died
mental anguish by reason of the death of the
single and without issue; and that, as such, they
deceased.”
were Dr. Curso's surviving heirs and successors
in interest entitled to recover moral and other The foregoing legal provisions set forth the
damages. persons entitled to moral damages. The
omission from Article 2206 (3) of the brothers
The petitioner denied liability, insisting that the
and sisters of the deceased passenger reveals
sinking of the vessel was due to force majeure
the legislative intent to exclude them from the
(i.e., Typhoon Unsang), which exempted a
recovery of moral damages for mental anguish
common carrier from liability. It averred that
by reason of the death of the deceased. Inclusio
the MV Doña Marilyn was seaworthy in all
unius est exclusio alterius. The solemn power
respects, and was in fact cleared by the
and duty of the courts to interpret and apply
Philippine Coast Guard for the voyage; and that
the law do not include the power to correct the
after the accident it conducted intensive search
law by reading into it what is not written
and rescue operations and extended assistance
therein. Thus, the CA erred in awarding moral
and aid to the victims and their families.
damages to the respondents.
RTC dismissed the complaint upon its finding
To be entitled to moral damages, the
that the sinking of the vessel was due to force
respondents must have a right based upon law.
majeure. The RTC concluded that the officers of
Under Article 1003 of the Civil Code they
the MV Doña Marilyn had acted with the
succeeded to the entire estate of the late Dr.
diligence required of a common carrier; that the
Curso in the absence of the latter's
sinking of the vessel and the death of its
descendants, ascendants, illegitimate children,
passengers, including Dr. Curso, could not have
and surviving spouse. Brothers and sisters were
been avoided.
not included among the persons entitled to
Court found inadequate proof to show that recover moral damages, as enumerated in
Sulpicio Lines, Inc., or its officers and crew, had Article 2219 of the Civil Code.
exercised the required degree of diligence to
acquit the appellee of liability. If the officers and G.R. No. L-37632 July 30, 1982
crew of the Doña Marilyn had indeed been
adequately monitoring the strength and GREGORIA VDA. DE PAMAN, ROMEO PAMAN,
direction of the typhoon, and had acted ELISBERTO PAMAN, and CESARIA
PAMAN, petitioners,
promptly and competently to avoid the same,
vs.
then such a mishap would not have occurred.
HON. ALBERTO V. SEÑERIS, as Judge of CFI,
ISSUE Branch II, Zamboanga City, WESTERN
MINDANAO LUMBER COMPANY and TEODORO
WON, the surviving brothers and sisters of a DE LOS SANTOS, respondents.
passenger of a vessel that sinks during a voyage
entitled to recover moral damages from the FACTS:
vessel owner as common carrier?
On May 24, 1961, accused-respondent Teodoro
RULING: de los Santos was charged by the City Attorney
of Zamboanga City with HOMICIDE THRU
The petition is meritorious. RECKLESS IMPRUDENCE.
As a general rule, moral damages are not
Upon arraignment on June 26, 1972, accused-
respondent Teodoro de los Santos entered a
plea of guilty. In view of said plea, the
respondent Judge, Alberto Señeris, rendered a
Decision sentencing said respondent to suffer
an imprisonment of two (2) months and one (1)
day of arresto mayor and to indemnify the heirs
of the late Victoriano Paman, namely, the
petitioner Gregoria Vda. de Paman and her
three children, in the amount of P12,000.00.
On the same day, accused-respondent Teodoro
de los Santos commenced his service of
sentence. On August 4, 1972, petitioner
Gregoria Vda. de Paman, widow of the victim,
filed the first motion for execution of the
judgment to enforce the civil liability of the
P12,000.00 of the accused-respondent. This was
followed on August 28, 1972 by the filing of
petitioner of an ex parte motion for execution
of judgment against the accused. In both
instances, Western Mindanao Lumber Company
was duly notified.
On August 31, 1972, respondent Judge issued
an order granting the said motion for execution.
However, on September 4, 1972, the Sheriff's
Return of Service showed that the accused-
respondent Teodoro de los Santos had no
property registered in his name.
Upon discovery that accused-respondent is
insolvent, petitioner filed on September 19,
1972, a "Motion for Execution on Subsidiary
Liability of Employer Western Mindanao
Lumber Company under Article 103 of the
Revised Penal Code."
Petitioner contended therein that the subsidiary
liability of the employer Western Mindanao
Lumber Company in the event the accused is
insolvent, is executory in nature and there is no
need for a separate action or a further civil case
to be filed in the enforcement of the decision
aforementioned. On October 11, 1972,
petitioner filed a "Supplemental Motion for
Execution for Subsidiary Liability of Employer
under Art. 103 of the Penal Code."
Petitioner concluded that the tenor of the
aforesaid decision implies that the subsidiary
liability of the employer may be enforced in the
same proceeding.
On September 8, 1973, respondent Judge issued
an order denying the motion for issuance of
writ of execution against the employer of
Teodoro de los Santos. He opined that the
alleged employer not having been notified that
its driver was facing a criminal charge, a
separate civil action must be filed. Hence, this
petition for mandamus.
Issue:
Whether or not the institution of separate and
independent action to enforce employer’s
subsidiary liability is necessary.
Ruling:
Institution of separate and independent action
to enforce employer’s subsidiary liability
unnecessary as it will prolong agony of victims’
heirs.
Judgment of conviction sentencing a defendant
employer to pay indemnity conclusive upon
employer in an action for enforcement of
employer’s subsidiary liability as to the civil
liability and as to its amount.
Moreover, it has been invariably held that a
judgment of conviction sentencing a defendant
employer to pay an indemnity in the absence of
any collusion between the defendant and the
offended party, is conclusive upon the employer
in an action for the enforcement of the latter’s
subsidiary liability not only with regard to the
civil liability, but also with regard to its amount.
This being the case, this Court stated in Rotea
vs. Halili, 109 Phil. 495 that the court has no
other function than to render decision based
upon the indemnity awarded in the criminal
case and has no power to amend or modify it
even if in its opinion an error has been
committed in the decision. A separate and
independent action is, therefore, unnecessary
and would only unduly prolong the agony of the
heirs of the victim.
G.R. No. 131280               October 18, 2000
PEPE CATACUTAN and AURELIANA
CATACUTAN, petitioners,
vs.
HEIRS OF NORMAN KADUSALE, HEIRS OF LITO
AMANCIO and GIL B. IZON, respondents.
YNARES-SANTIAGO, J.:
FACTS:
Petitioner Aureliana Catacutan is the registered
owner and operator of a jeepney, driven by the
accused Porferio Vendiola, which bumped a
tricycle on April 11, 1991, in Banilad, Bacong,
Negros Oriental, thereby causing the death of
its driver, Norman Kadusale, and its passenger,
Lito Amancio, and serious physical injuries to
another passenger, respondent Gil B. Izon.
Respondents thus filed a criminal case against
Porferio Vendiola, for Reckless Imprudence
Resulting in Double Homicide with Physical
Injuries and Damages to Property on July 26,
1991, before the Regional Trial Court of Negros
Oriental.
Accused Vendiola did not appeal the judgment
of conviction. Instead, he applied for probation.
The judgment became final and executory,
respondents moved for the issuance of a writ of
execution and the corresponding writ was
issued by the trial court on April 24, 1996.
On August 28, 1996, respondents filed a Motion
for Subsidiary Writ of Execution  before the trial
court, praying that such writ be issued against
petitioner Aureliana Catacutan as registered
owner and operator of the jeepney driven by
the accused when the collision occurred.
Petitioner Aureliana Catacutan filed her
Opposition  thereto, arguing that she was never
a party to the case and that to proceed against
her would be in violation of the due process
clause of the Constitution. Petitioner also
argued that the subsidiary liability of the
employer is not determined in the criminal case
against the employee.
RTC denied the Motion for lack of merit.
ISSUE:
Whether or not the contention of petitioner is
correct in the matter of their alleged subsidiary
liability and that they were denied their day in
court, and that the court did not acquire
jurisdiction over them.
RULING:
No. The petitioner is not correct.
As stated in Martinez v. Barredo:
"The employer cannot be said to have been
deprived of his day in court, because the
situation before the SC is not one wherein the
employer is sued for a primary liability under
article 1903 of the Civil Code, but one in which
enforcement is sought of a subsidiary civil
liability incident to and dependent upon his
driver's criminal negligence which is a proper
issue to be tried and decided only in a criminal
action.
In other words, the employer becomes ipso
facto subsidiarily liable upon his driver's
conviction and upon proof of the latter's
insolvency, in the same way that acquittal wipes
out not only the employee's primary liability but
also his employer's subsidiary liability for such
criminal negligence.
The employer is, in substance and in effect, a
party to the criminal case against his employee,
considering the subsidiary liability imposed
upon him by law.
Petitioners cannot complain of having been
deprived of their day in court. They were duly
furnished a copy of respondents' Motion for
Subsidiary Writ of Execution to which they filed
their Opposition.
The requisites for the attachment of the
subsidiary liability of the employer have already
been established, to wit: First, the existence of
an employer-employee relationship.Second, the
employer is engaged in some kind of industry,
land transportation industry in this case as the
jeep driven by accused was admittedly a
passenger jeep.Third, the employee has already
been adjudged guilty of the wrongful act and
found to have committed the offense in the
discharge of his duties.  Finally, said employee is
insolvent.