SECOND DIVISION

[G.R. No. 156654. November 20, 2008.]

PHILIPPINE AIRLINES, INC. , petitioner, vs . VICENTE LOPEZ, JR. ,

respondent.

RESOLUTION

QUISUMBING , J : p

This petition for review assails the Decision 1 dated June 20, 2002 and the
Resolution 2 dated December 10, 2002 of the Court of Appeals in CA-G.R. CV No.
53360 which a rmed in toto the Decision 3 dated April 19, 1995 of the Regional Trial
Court (RTC) of Manila, Branch 24 in Civil Case No. 92-60199. The RTC had ordered
petitioner Philippine Airlines, Inc. (PAL) to pay respondent Vicente Lopez, Jr. P100,000
moral damages, P20,000 exemplary damages and P30,000 attorney's fees plus costs
of suit.
The antecedent facts are as follows:
In a Complaint 4 dated February 11, 1992, led with the RTC of Manila, Branch 24,
Lopez claimed that PAL had unjusti ably downgraded his seat from business to
economy class in his return ight from Bangkok to Manila last November 30, 1991, and
that, in view thereof, PAL should be directed to pay him moral damages of at least
P100,000, exemplary damages of at least P20,000, attorney's fees in the sum of
P30,000, as well as the costs of suit.
To support his claim, Lopez averred that he purchased a Manila-Hongkong-
Bangkok-Manila PAL business class ticket and that his return ight to Manila was
con rmed by PAL's booking personnel in Bangkok on November 26, 1991. He also
mentioned that he was surprised to learn during his check-in for the said return ight
that his status as business class passenger was changed to economy class, and that
PAL was not able to offer any valid explanation for the sudden change when he
protested the change. Lopez added that although aggrieved, he nevertheless took the
said ight as an economy class passenger because he had important appointments in
Manila. DaEHS

For its part, PAL denied any liability and claimed that whatever damage Lopez
had suffered was due to his own fault. PAL explained that the terms and conditions of
the contract of carriage required Lopez to recon rm his booking for the Bangkok-to-
Manila leg of his trip, and that he did not protest the economy seat given to him when
the change in his accommodations was read to him by the person who received his
phone recon rmation. PAL also asserted that Lopez did not complain against his
economy seat during the check-in and that he raised the issue only after the ight was
over. 5 Thus, PAL prayed that the case be dismissed for lack of merit. 6
In its Decision dated April 19, 1995, the trial court held PAL liable for damages. It
said that PAL's contention that Lopez might have thought that he was holding an
economy class ticket or that he waived his right to have a business class seat is
untenable, considering that Lopez is an experienced businessman and a Bachelor of
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 Science degree holder.
It also noted that the following showed that PAL's employees had been negligent
in booking and con rming Lopez's travel accommodations from Bangkok to Manila: (1)
the admission of PAL's booking personnel 7 that she a xed the validation sticker on
Lopez's ticket on the basis of the passenger's name list showing that his reservation
was for an economy class seat without examining or checking the latter's ticket during
his booking validation; and (2) the admission of PAL's check-in clerk 8 at the Bangkok
Airport that when Lopez checked-in for his return trip to Manila, she similarly gave
Lopez an economy boarding pass based on the information found in the coupon of the
ticket and the passenger manifest without checking the latter's ticket. The trial court
said that had PAL's employees examined his ticket in those instances, the error or
oversight which might have resulted from the phoned-in booking could have been easily
rectified. 9
Thus, citing Articles 1733 1 0 and 2220 1 1 of the Civil Code and the case of
Ortigas, Jr. v. Lufthansa German Airlines, 1 2 the trial court held that the inattention and
lack of care on the part of the common carrier, in this case PAL, resulting in the failure
of the passenger to be accommodated in the class contracted for amounts to bad faith
or fraud, making it liable for damages. 1 3 The trial court likewise awarded attorney's
fees in favor of Lopez after noting that Lopez was forced to litigate in order to assert
his rights. 1 4 HSacEI

The dispositive portion of the trial court's decision reads:

Based on all the foregoing therefore, the Court nds in favor of the plaintiff
and against the defendant and orders defendant to pay plaintiff, as prayed for in
the complaint, the following amounts: P100,000.00 for moral damages;
P20,000.00 for exemplary damages and P30,000.00 for attorney's fees and also
to pay for the cost of suit. All amounts awarded to bear legal interest from date of
this decision.

SO ORDERED. 1 5

On appeal, the Court of Appeals a rmed in toto the trial court's decision after
having been fully convinced of the negligence of PAL's employees and after nding
PAL's defenses to be unworthy of belief and contrary to common observation and
experience.
PAL moved for reconsideration but it was denied. Hence, this petition.
In our Resolution 1 6 dated September 26, 2007, we suspended the proceedings
of this case and directed PAL to submit a status report on its then ongoing corporate
rehabilitation. Pursuant to our directive, PAL submitted a Manifestation/Compliance 1 7
dated October 22, 2007, informing us of the Securities and Exchange Commission
Order 1 8 dated September 28, 2007, which granted its request to exit from corporate
rehabilitation. Thus, we now resolve the instant petition.
Petitioner contends that:
I.

THE COURT OF APPEALS ERRED IN NOT RULING THAT IN AN OPEN-DATED

CONTRACT OF CARRIAGE, THE PARTIES ARE FREE TO AGREE ON THE TERMS
THEREOF ON THE DATE LEFT OPEN.

II.
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 THE COURT OF APPEALS ERRED IN NOT RULING THAT RESPONDENT'S
CONTRIBUTORY NEGLIGENCE PREVENTS HIM FROM RECOVERING DAMAGES
FROM PETITIONER.

III.

THE COURT OF APPEALS ERRED IN NOT RULING THAT IN MORAL DAMAGES

RECOVERABLE IN BREACHES OF CONTRACTS, THE TERMS "FRAUD" AND "BAD
FAITH" HAVE REFERENCE TO WANTON, RECKLESS, OPPRESSIVE, OR
MALEVOLENT CONDUCT. DTIaHE

IV.

THE COURT OF APPEALS ERRED IN NOT RULING THAT EXEMPLARY DAMAGES

ARE NOT RECOVERABLE IN THE ABSENCE OF FRAUD OR BAD FAITH.

V.

THE COURT OF APPEALS ERRED IN NOT RULING THAT AWARD OF ATTORNEY'S

FEES IS NOT PROPER IN THE ABSENCE OF GROSS AND EVIDENT BAD FAITH ON
THE PART OF PETITIONER. 1 9

Simply put, the issues are: (1) Did the Court of Appeals err in not ruling that Lopez
agreed or allowed his business class seat to be downgraded to economy class? (2) Did
the Court of Appeals err in not ruling that Lopez's alleged contributory negligence was
the proximate cause of the downgrading of his seat? and (3) Did the Court of Appeals
err in awarding moral damages, exemplary damages and attorney's fees in favor of
Lopez in view of the alleged absence of fraud or bad faith of PAL?
A perusal of the aforesaid issues readily shows that the same are questions of
facts since its resolution would entail a re-evaluation of the evidence presented before
the trial court. 2 0 Thus, we could not take cognizance of such issues considering the
settled rule that our review under Rule 45 is con ned to questions of law. It is true that
there are several exceptions 2 1 to the said rule; however, none nds application in this
case.
Moreover, we had already speci cally held that issues on the existence of
negligence, fraud and bad faith are questions of fact. 2 2
We had also observed that PAL is also guilty of raising prohibited new matters 2 3
and in changing its theory of defense 2 4 since it is only in the present petition that it
alleged the contributory negligence of Lopez.
PAL's procedural lapses notwithstanding, we had nevertheless carefully reviewed
the records of this case and found no compelling reason to depart from the uniform
factual ndings of the trial court and the Court of Appeals that: (1) it was the
negligence of PAL which caused the downgrading of the seat of Lopez; and (2) the
aforesaid negligence of PAL amounted to fraud or bad faith, considering our ruling in
Ortigas. 2 5 CSHcDT

Moreover, we cannot agree with PAL that the amount of moral damages
awarded by the trial court, as a rmed by the Court of Appeals, was excessive. In
Mercury Drug Corporation v. Baking, 2 6 we had stated that "there is no hard-and-fast
rule in determining what would be a fair and reasonable amount of moral damages,
since each case must be governed by its own peculiar facts. However, it must be
commensurate to the loss or injury suffered." 2 7 Taking into account the attending
circumstances here, we believe that the amount of P100,000 awarded as moral
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 damages is appropriate.
WHEREFORE, the assailed Decision dated June 20, 2002 and Resolution dated
December 10, 2002 of the Court of Appeals in CA-G.R. CV No. 53360 are AFFIRMED.
Costs against the petitioner.
SO ORDERED.
Carpio-Morales, Tinga, Velasco, Jr. and Brion, JJ., concur.

Footnotes
1. Rollo, pp. 31-40. Penned by Associate Justice Mercedes Gozo-Dadole, with Associate
Justices Salvador J. Valdez, Jr. and Amelita G. Tolentino concurring.

2. Id. at 28.
3. Records, pp. 199-210. Penned by Judge Sergio D. Mabunay.

4. Id. at 1-4.
5. Id. at 15-16.
6. Id. at 17.
7. Ms. Chongchit Tiumtongbai.
8. Ms. Choompoonoot Chinkumnon.

9. Records, p. 207.
10. ART. 1733. Common carriers, from the nature of their business and for reasons of
public policy, are bound to observe extraordinary diligence in the vigilance over the
goods and for the safety of the passengers transported by them, according to all the
circumstances of each case. cCaATD

xxx xxx xxx

11. ART. 2220. 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. The same rule applies to breaches of contract where the defendant acted
fraudulently or in bad faith.
12. No. L-28773, June 30, 1975, 64 SCRA 610.

13. Id. at 643-644.

14. Rollo, p. 35. HDATCc

15. Records, p. 210.

16. Rollo, pp. 130-134.

17. Id. at 135-137.
18. Id. at 138-143.
19. Id. at 13-14.
20. Microsoft Corporation v. Maxicorp, Inc., G.R. No. 140946, September 13, 2004, 438
SCRA 224, 231.
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 21. In Rosario v. PCI Leasing and Finance, Inc., G.R. No. 139233, November 11, 2005, 474
SCRA 500, 506, we held that factual issues may be resolved by this Court in cases where
(1) the conclusion is a finding grounded entirely on speculation, surmise and conjecture;
(2) the inference made is manifestly mistaken; (3) there is grave abuse of discretion; (4)
the judgment is based on a misapprehension of facts; (5) the findings of fact are
conflicting; (6) the CA went beyond the issues of the case and its findings are contrary to
the admissions of both appellant and appellees; (7) the findings of fact of the CA are
contrary to those of the trial court; (8) said findings of fact are conclusions without
citation of specific evidence on which they are based; (9) the facts set forth in the
petition as well as in the petitioner's main and reply briefs are not disputed by the
respondents; and (10) the findings of fact of the CA are premised on the supposed
absence of evidence and contradicted by the evidence on record.

22. See the cases of Metro Manila Transit Corporation v. Court of Appeals, G.R. No.
141089, August 1, 2002, 386 SCRA 126, 132; Quesada v. Department of Justice, G.R. No.
150325, August 31, 2006, 500 SCRA 454, 461; Land Bank of the Philippines v. Pua, G.R.
No. 163197, March 30, 2005, pp. 1, 3-4 (Unsigned Resolution).

23. Mendoza v. Bautista, G.R. No. 143666, March 18, 2005, 453 SCRA 691, 702.
24. Philippine National Construction Corporation v. Court of Appeals, G.R. No. 159270,
August 22, 2005, 467 SCRA 569, 584-585.

25. Ortigas, Jr. v. Lufthansa German Airlines, supra note 12.

26. G.R. No. 156037, May 25, 2007, 523 SCRA 184.

27. Id. at 191. ITDSAE

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