CASE DIGEST (Transportation Law): PAL. vs. C.A.

Philippine Air Lines vs. Court of Appeals

GR 120262, 17 July 1997)

FACTS:

On 23 October 1988, Leovigildo A. Pantejo, then City Fiscal of Surigao City, boarded a PAL plane in Manila and
disembarked in Cebu City where he was supposed to take his connecting flight to Surigao City. However, due to
typhoon Osang, the connecting flight to Surigao City was cancelled. To accommodate the needs of its stranded
passengers, PAL initially gave out cash assistance of P 100.00 and, the next day, P200.00, for their expected stay of
2 days in Cebu. Pantejo requested instead that he be billeted in a hotel at the PAL’s expense because he did not have
cash with him at that time, but PAL refused. Thus, Pantejo was forced to seek and accept the generosity of a co-
passenger, an engineer named Andoni Dumlao, and he shared a room with the latter at Sky View Hotel with the
promise to pay his share of the expenses upon reaching Surigao. On 25 October 1988 when the flight for Surigao
was resumed, Pantejo came to know that the hotel expenses of his co-passengers, one Superintendent Ernesto
Gonzales and a certain Mrs. Gloria Rocha, an Auditor of the Philippine National Bank, were reimbursed by PAL. At
this point, Pantejo informed Oscar Jereza, PAL’s Manager for Departure Services at Mactan Airport and who was in
charge of cancelled flights, that he was going to sue the airline for discriminating against him. It was only then that
Jereza offered to pay Pantejo P300.00 which, due to the ordeal and anguish he had undergone, the latter declined.

Pantejo filed a suit for damages against PAL with the RTC of Surigao City which, after trial, rendered judgment,
ordering PAL to pay Pantejo P300.00 for actual damages, P150,000.00 as moral damages, P100,000.00 as exemplary
damages, P15,000.00 as attorney’s fees, and 6% interest from the time of the filing of the complaint until said
amounts shall have been fully paid, plus costs of suit.

On appeal, the appellate court affirmed the decision of the court a quo, but with the exclusion of the award of
attorney’s fees and litigation expenses.

The Supreme Court affirmed the challenged judgment of Court of Appeals, subject to the modification regarding the
computation of the 6% legal rate of interest on the monetary awards granted therein to Pantejo.

ISSUE:

Whether petitioner airlines acted in bad faith when it failed and refused to provide hotel accommodations for
respondent Pantejo or to reimburse him for hotel expenses incurred by reason of the cancellation of its connecting
flight to Surigao City due to force majeur.

HELD:
A contract to transport passengers is quite different in kind and degree from any other contractual relation, and this
is because of the relation which an air carrier sustains with 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 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.

The discriminatory act of PAL against Pantejo ineludibly makes the former liable for moral damages under Article 21
in relation to Article 2219 (10) of the Civil Code. As held in Alitalia Airways vs. CA, et al., such inattention to and lack
of care by the airline for the interest of its passengers 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.

Moral damages are emphatically not intended to enrich a plaintiff at the expense of the defendant. They are
awarded only to allow the former to obtain means, diversion, or amusements that will serve to alleviate the moral
suffering he has undergone due to the defendant’s culpable action and must, perforce, be proportional to the
suffering inflicted. However, substantial damages do not translate into excessive damages. Herein, except for
attorney’s fees and costs of suit, it will be noted that the Courts of Appeals affirmed point by point the factual
findings of the lower court upon which the award of damages had been based.

The interest of 6% imposed by the court should be computed from the date of rendition of judgment and not from
the filing of the complaint.

The rule has been laid down in Eastern Shipping Lines, Inc. vs. Court of Appeals, et. al. that “when an obligation, not
constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be
imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on
unliquidated claims or damages except when or until the demand can be established with reasonable certainty.
Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the
time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so
reasonably established at the time the demand is made, the interest shall begin to run only from the date the
judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally
adjudged.” This is because at the time of the filling of the complaint, the amount of the damages to which Pantejo
may be entitled remains unliquidated and not known, until it is definitely ascertained, assessed and determined by
the court, and only after the presentation of proof thereon.

Philippine Airlines, Inc. vs Court of Appeals, 181 SCRA 557, GR No. 49188, January 30, 1990, digested
Posted by Pius Morados on November 30, 2011

(Civil Procedure – Alias Writ of Execution; Civil Law – Payment; Commercial Law – Check)
THE FACTS:
Amelia Tan commenced a complaint for damages before the Court of First Instance against Philippine Airlines, Inc.
(PAL). The Court rendered a judgment in favor of the former and against the latter.

PAL filed its appeal with the Court of Appeals (CA), and the appellate court affirmed the judgment of the lower court
with the modification that PAL is condemned to pay the latter the sum of P25, 000.00 as damages and P5, 000.00 as
attorney’s fee.

Judgment became final and executory and was correspondingly entered in the case, which was remanded to the
trial court for execution. The trial court upon the motion of Amelia Tan issued an order of execution with the
corresponding writ in favor of the respondent. Said writ was duly referred to Deputy Sheriff Reyes for enforcement.

Four months later, Amelia Tan moved for the issuance of an alias writ of execution, stating that the judgment
rendered by the lower court, and affirmed with modification by the CA, remained unsatisfied. PAL opposed the
motion, stating that it had already fully paid its obligation to plaintiff through the issuance of checks payable to the
deputy sheriff who later did not appear with his return and instead absconded.

The CA denied the issuance of the alias writ for being premature. After two months the CA granted her an alias writ
of execution for the full satisfaction of the judgment rendered, when she filed another motion. Deputy Sheriff del
Rosario is appointed special sheriff for enforcement thereof.

PAL filed an urgent motion to quash the alias writ of execution stating that no return of the writ had as yet been
made by Deputy Sheriff Reyes and that judgment debt had already been fully satisfied by the former as evidenced
by the cash vouchers signed and received by the executing sheriff.
Deputy Sheriff del Rosario served a notice of garnishment on the depository bank of PAL, through its manager and
garnished the latter’s deposit. Hence, PAL brought the case to the Supreme Court and filed a petition for certiorari.

THE ISSUES:
1. WON an alias writ of execution can be issued without prior return of the original writ by the implementing officer.
2. WON payment of judgment to the implementing officer as directed in the writ of execution constitutes
satisfaction of judgment.
3. WON payment made in checks to the sheriff and under his name is a valid payment to extinguish judgment of
debt.
THE RULING:
1. Affirmative. Technicality cannot be countenanced to defeat the execution of a judgment for execution is the fruit
and end of the suit and is very aptly called the life of the law. A judgment cannot be rendered nugatory by
unreasonable application of a strict rule of procedure. Vested right were never intended to rest on the requirement
of a return. So long as judgment is not satisfied, a plaintiff is entitled to other writs of execution.
2. Negative. In general, a payment, in order to be effective to discharge an obligation, must be made to the proper
person. Article 1240 of the Civil Code provides:

“Payment made to the person in whose favor the obligation has been constituted, or his successor in interest, or
any person authorized to receive it.”

Under ordinary circumstances, payment by the judgment debtor in the case at bar, to the sheriff should be valid
payment to extinguish judgment of debt.

However, under the peculiar circumstances of this case, the payment to the absconding sheriff by check in his name
did not operate as a satisfaction of the judgment debt.

3. Negative. Article 1249 of the Civil Code provides:

“The payment of debts in money shall be made in the currency stipulated, and if it is not possible to deliver such
currency, then in the currency which is legal tender in the Philippines”.

Unless authorized to do so by law or by consent of the obligee, a public officer has no authority to accept anything
other than money in payment of an obligation under a judgment being executed. Strictly speaking, the acceptance
by the sheriff of the petitioner’s checks does not, per se, operate as a discharge of the judgment of debt.
A check, whether manager’s check or ordinary check, is not legal tender, and an offer of a check in payment of a
debt is not a valid tender or payment and may be refused receipt by the oblige or creditor. Hence, the obligation is
not extinguished.

THE TWIST: Payment in cash is logical, but it was not proper.

Payment in cash to the implementing officer may be deemed absolute payment of judgment debt but the Court has
never, in the least bit, suggested that judgment debtors should settle their obligations by turning over huge amounts
of cash or legal tender to the executing officers. Payment in cash would result in damage or endless litigations each
time a sheriff with huge amounts of cash in his hands decides to abscond.

As a protective measure, the courts encourage the practice of payment of check provided adequate controls are
instituted to prevent wrongful payment and illegal withdrawal or disbursement of funds.
However, in the case at bar, it is out of the ordinary that checks intended for a particular payee are made out in the
name of another. The issuance of the checks in the name of the sheriff clearly made possible the misappropriation
of the funds that were withdrawn.

The Court of Appeals explained:

“Knowing as it does that the intended payment was for the respondent Amelia Tan, the petitioner corporation,
utilizing the services of its personnel who are or should be knowledgeable about the accepted procedure and
resulting consequences of the checks drawn, nevertheless, in this instance, without prudence, departed from what
is generally observed and done, and placed as payee in the checks the name of the errant Sheriff and not the name
of the rightful payee. Petitioner thereby created a situation which permitted the said Sheriff to personally encash
said checks and misappropriate the proceeds thereof to his exclusive benefit. For the prejudice that resulted, the
petitioner himself must bear the fault…”

Having failed to employ the proper safeguards to protect itself, the judgment debtor whose act made possible the
loss had but itself to blame.